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. 30......................... X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 25........................................ X
FEDERATED STOCK TRUST
(Exact Name of Registrant as Specified in Charter)
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7000
(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) on _________________
pursuant to paragraph (b) 60 days after filing pursuant to paragraph (a) (i)
X on DECEMBER 31, 1998 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.
Copies to:
Matthew G. Maloney, Esquire
Dickstein Shapiro Morin & Oshinsky, LLP
2101 L Street, N.W.
Washington, D.C. 20037
PROSPECTUS DECEMBER 31, 1998
FEDERATED STOCK TRUST
A large capitalization value mutual fund investing primarily in common stocks of
high quality companies.
FUND SHARES ARE NOT BANK DEPOSITS, FEDERALLY INSURED, OR GUARANTEED, AND MAY
LOSE VALUE. As with all mutual funds, the Securities and Exchange Commission has
not approved or disapproved these securities or passed upon the adequacy of this
prospectus, and any representation to the contrary is a criminal offense.
TABLE OF CONTENTS
Risk/Return Summary...
What are the Fund's Fees and Expenses?...
What are the Fund's Investment Strategies?...
What are the Principal Securities in Which the Fund Invests?... What are the
Specific Risks of Investing in the Fund?...
What Do Shares Cost?...
How Is The Fund Sold?...
How To Purchase Shares...
How To Redeem Shares...
Account and Share Information...
Who Manages the Fund?...
Financial Information...
<PAGE>
RISK/RETURN SUMMARY
WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
The Fund's investment objective is to provide growth of income and capital.
WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?
The Fund pursues its investment objective by investing primarily in equity
securities of companies that are generally leaders in their industries,
characterized by sound management and have the ability to finance expected
growth.
WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?
The value of equity securities in the Fund's portfolio will go up and down.
These fluctuations could be a sustained trend or a drastic movement. The Fund's
portfolio will reflect changes in prices of individual portfolio stocks or
general changes in stock valuations. Consequently, the Fund's share price may
decline and you could lose money. Other risks of investing in the Fund include
Sector Risk and Risk of Foreign Investing.
RISK/RETURN BAR CHART AND TABLE
The graphic presentation displayed here consists of a bar chart
representing the annual total returns of Federated Stock Trust as of the
calendar year-end for each of ten years.
The `y' axis reflects the "% Total Return" beginning with "-5.00" and
increasing in increments of 5.00% up to 40.00%.
The `x' axis represents calculation periods for the last ten calendar
years of the Fund, beginning with the earliest year. The light gray shaded
chart features ten distinct vertical bars, each shaded in charcoal, and
each visually representing by height the total return percentages for the
calendar year stated directly at its base. The calculated total return
percentage for the Fund for each calendar year is stated directly at the
top of each respective bar, for the calendar years 1988 through 1997, the
total return percentages are: 12.69%, 13.13%, -4.99%, 29.04%, 11.94%,
12.49%, -0.45%, 35.63%, 21.17% and 34.42%, respectively.
The bar chart shows the variability of the Fund's actual total returns on a
yearly basis.
The Fund's shares are not sold subject to a sales charge (load). Hence, the
total returns displayed above are based upon net asset value.
The Fund's average annual total return as of the most recent calendar quarter of
September 30, 1998 was -11.31%.
Within the period shown in the Chart, the Fund's highest quarterly return was
14.79% (quarter ended March 31, 1991). Its lowest quarterly return was
- -15.58%(quarter ended September 30, 1998).
Average Annual Total Return for the Fund Compared to S&P 500 Index (S&P 500) and
the Lipper Growth & Income Funds Average (LGIFA) for the calendar periods ending
December 31, 1997.
Calendar Period Fund S&P 500 LGIFA
1 Year 34.42 % __% __%
5 Year 19.86 % __% __%
10 Year 15.78% __% __%
The table shows the Fund's average annual total returns compared to the S&P 500,
which is a broad-based market index, and the LGIFA, an average of the fund's
with similar investment objectives.
While past performance does not necessarily predict future performance, this
information provides you with historical performance information so that you can
analyze whether the Fund's investment risks are balanced by its potential
rewards.
<PAGE>
WHAT ARE THE FUND'S FEES AND EXPENSES?
FEDERATED STOCK TRUST
FEES AND EXPENSES
THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
SHARES OF THE FUND.
SHAREHOLDER FEES ( FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering
price) None Maximum Deferred Sales Charge (Load) (as a percentage of original
purchase
price or redemption proceeds, as applicable).....................None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends
(and other Distributions)
( as a percentage of offering price).............................None
Redemption Fee (as a percentage of amount redeemed, if applicable)..None
Exchange Fee........................................................None
Maximum Account Fee.................................................None
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(as a percentage of average net assets)
Management Fee (1).................................................._____
Distribution (12b-1) Fee............................................None
Other Expenses ....................................................._____
Shareholder Services Fee ..........................0.25%
Total Annual Fund Operating Expenses (before waivers)..............._____
Waiver of Fund Expenses (2)......................................... _____
Total Actual Annual Fund Operating Expenses (after waivers)......... _____
(1) The maximum management services 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 shareholder services fee has been reduced to reflect the waiver of a
portion of the shareholders services fee. The shareholder services provider can
terminate this waiver at any time at its sole discretion. The shareholder
services fee paid by the Fund (after the voluntary reduction) was ______% for
the year ended October 31, 1998.
EXAMPLE
The following Example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses are BEFORE WAIVERS as estimated above and remain the
same. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------ ------- ------- --------
WHAT ARE THE FUND'S INVESTMENT STRATEGIES?
The Fund pursues its investment objective by investing primarily in equity
securities of companies that are generally leaders in their industries,
characterized by sound management and have the ability to finance expected
growth. The Adviser attempts to identify good long-term values by its
disciplined investment process and careful fundamental research. The Fund's
holdings ordinarily will be in the top 25% of their industries with regard to
revenues.
Using its own quantitative process, the Adviser rates the future performance
potential of companies. The Adviser evaluates each company's earnings quality in
light of their current valuation to narrow the list of attractive companies. The
Adviser then evaluates product positioning, management quality and
sustainability of current growth trends of those companies. Using this type of
fundamental analysis, the Adviser selects the most promising companies for the
Fund's portfolio.
Companies with similar characteristics may be grouped together in broad
categories called sectors. In determining the amount to invest in a security,
the Adviser limits the Fund's exposure to each business sector that comprises
the S&P 500 Index. The Fund's allocation to a sector will not be less than 50%
or more than 200% of the Index's allocation to that sector.
PORTFOLIO TURNOVER. The Fund may actively trade its portfolio securities in an
attempt to achieve its investment objective. Active trading will cause the Fund
to have an increased portfolio turnover rate which is likely to generate
shorter-term gains (losses) for its shareholders, which are taxed at a higher
rate than longer-term gains (losses). Actively trading portfolio securities
increases the Fund's trading costs and may have an adverse impact on the Fund's
performance.
WHAT ARE THE PRINCIPAL SECURITIES IN WHICH THE FUND INVESTS?
COMMON STOCKS are the most prevalent type of equity security. Common
stockholders receive the residual value of the issuer's earnings and assets
after the issuer pays its creditors and any preferred stockholders. As a result,
changes in an issuer's earnings directly influence the value of its common
stock.
AMERICAN DEPOSITARY RECEIPTS represent interests in underlying securities issued
by a foreign company, but traded in another market than the underlying security.
The foreign securities underlying American Depositary Receipts (ADRs) are traded
in the U.S. ADRs provide a way to buy shares of foreign-based companies in the
U.S. rather than in overseas markets. ADRs are also traded in U.S. dollars,
eliminating the need for foreign exchange transactions. Depositary Receipts
involve the Risk of Foreign Investing.
WHAT ARE THE SPECIFIC RISKS OF INVESTING IN THE FUND?
STOCK MARKET RISKS
The value of equity securities in the Fund's portfolio will go up and down.
These fluctuations could be a sustained trend or a drastic movement. The Fund's
portfolio will reflect changes in prices of individual portfolio stocks or
general changes in stock valuations.
Consequently, the Fund's share price may decline and you could lose money.
The Fund's investment adviser attempts to manage market risk of investing in
individual securities by limiting the amount the Fund invests in each stock.
SECTOR RISK
Companies with similar characteristics may be grouped together in broad
categories called sectors. Sector risk is the possibility that a certain sector
may perform differently than other sectors or as the market as a whole. As the
adviser allocates more of the Fund's portfolio holdings to a particular sector,
the Fund's performance will be more susceptible to any economic, business or
other developments which generally affect that sector.
<PAGE>
RISK OF FOREIGN INVESTING
Exchange rates for currency fluctuate daily. The combination of currency risk
and market risks tends to make securities traded in foreign markets more
volatile than securities traded exclusively in the U.S.
Foreign securities pose additional risks because foreign economic or political
conditions may be less favorable that those of the United States. Foreign
financial markets may also have fewer investor protections. Securities in
foreign markets may also be subject to taxation policies that reduce returns for
U.S. investors.
Due to these risk factors, foreign securities may be more volatile and less
liquid than similar securities traded in the U.S.
WHAT DO SHARES COST?
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is
open. When the Fund receives your transaction request in proper form, it is
processed at the next determined public offering price.
The public offering price is the net asset value (NAV) plus any applicable sales
charge. Fund Shares are sold without a sales charge. NAV is determined at the
end of regular trading (normally 4 p.m. Eastern time) each day the NYSE is open.
The required minimum initial investment for Fund Shares is $25,000. There is no
required minimum subsequent investment amount.
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 is
calculated by combining all accounts it maintains with the Fund. Accounts
established through investment professionals may be subject to a smaller minimum
investment amount. Keep in mind that investment professionals may charge you
fees for their services in connection with your Share transactions.
HOW IS THE FUND SOLD?
The Fund's Distributor, Federated Securities Corp., markets the Shares described
in this prospectus to institutions or individuals, directly or through
investment professionals. The Distributor and its affiliates may pay out of
their assets amounts (including items of material value) to investment
professionals for marketing and servicing Shares. The Distributor is a
subsidiary of Federated Investors, Inc. (Federated).
HOW TO PURCHASE SHARES
You may purchase Shares through an investment professional or directly from the
Fund. The Fund reserves the right to reject any request to purchase Shares.
THROUGH AN INVESTMENT PROFESSIONAL
o Establish an account with the investment professional; and
o Submit your purchase order to the investment professional before the end of
regular trading on the NYSE (normally 4 p.m. Eastern time). You will receive
that day's NAV if the investment professional forwards the order to the Fund
on the same day and the Fund receives payment within one business day. You
will become the owner of Shares and receive dividends when the Fund receives
your payment.
Investment professionals should send payments according to the instructions in
the sections "By Wire" or "By Check."
<PAGE>
DIRECTLY FROM THE FUND
w Establish your account with the Fund by submitting a completed New Account
Form; and w Send your payment to the Fund by Federal Reserve wire or check.
You will become the owner of Shares will be priced at the NAV on the day the
Fund receives your wire or your check. If your check does not clear, your
purchase will be canceled and you could be liable for any losses or fees the
Fund or its transfer agent incurs.
An institution may establish an account and place an order by calling the Fund
and the Shares will be priced at the NAV on the day the Fund receives the order.
BY WIRE. Send your wire to:
State Street Bank and Trust Company, Boston, MA
Dollar Amount of Wire
ABA Number 011000028
Attention: EDGEWIRE
Wire Order Number, Dealer Number, or Group Number
Nominee/Institution Name
Fund Name and Number and Account Number
You cannot purchase Shares by wire on holidays when wire transfers are
restricted.
BY CHECK. Make your check payable to The Federated Funds, note your account
number on the check, and mail it to:
Federated Shareholder Services Company
P.O. Box 8600, Boston, MA 02266-8600.
If you send your check by a PRIVATE COURIER OR OVERNIGHT DELIVERY service that
requires a street address, mail it to:
Federated Shareholder Services Company
1099 Hingham Street, Rockland, MA 02370-3317.
Payment should be made in U.S. dollars and drawn on a U.S. bank. The Fund
will not accept third-party checks (checks originally payable to someone other
than you or The Federated Funds).
BY AUTOMATED CLEARING HOUSE (ACH)
Once you have opened an account, you may purchase additional Shares through a
depository institution that is an ACH member. This purchase option can be
established by completing the appropriate sections of the New Account Form.
RETIREMENT INVESTMENTS
You may purchase Shares as retirement investments (such as qualified plans and
IRAs or transfer or rollover of assets). Call your investment professional or
the Fund for information on retirement investments. We suggest that you discuss
retirement investments with your tax adviser. You may be charged an annual IRA
account fee.
HOW TO REDEEM SHARES
You should redeem Shares:
o through an investment professional if you purchased Shares through an
investment professional; or o directly from the Fund if you purchased Shares
directly from the Fund.
THROUGH AN INVESTMENT PROFESSIONAL
Submit your redemption request to your investment professional by the end of
regular trading on the NYSE (normally 4 p.m. Eastern time). The redemption
amount you will receive is based upon the NAV on the day the Fund receives the
order from your investment professional.
<PAGE>
DIRECTLY FROM THE FUND
BY TELEPHONE. You may redeem Shares by calling the Fund once you have completed
the appropriate authorization form for telephone transactions. If you call
before the end of regular trading on the NYSE (normally 4 p.m. Eastern time) you
will receive a redemption amount based on that day's NAV.
BY MAIL. You may redeem Shares by mailing a written request to the Fund. You
will receive a redemption amount based on the NAV on the day the Fund receives
your written request in proper form.
Send requests by mail to:
Federated Shareholder Services Company
P.O. Box 8600, Boston, MA 02266-8600.
Send requests by PRIVATE COURIER OR OVERNIGHT DELIVERY to: Federated Shareholder
Services Company 1099 Hingham Street, Rockland, MA 02370-3317.
ALL REQUESTS MUST INCLUDE:
o Fund Name and Share Class, account number and account registration; o amount
to be redeemed; and o signatures of all Shareholders exactly as registered.
Call your investment professional or the Fund if you need special instructions.
SIGNATURE GUARANTEES. Signatures must be guaranteed if:
w your redemption will be sent to an address other than the address of record;
w your redemption will be sent to an address of record that was changed within
the last thirty days; or w a redemption is payable to someone other than the
shareholder(s) of record.
Your signature can be guaranteed by any federally insured financial institution
(such as a bank or trust company, savings association or credit union) or a
broker/dealer that is a domestic stock exchange member, BUT NOT BY A NOTARY
PUBLIC.
PAYMENT METHODS FOR REDEMPTIONS
Your redemption proceeds will be mailed by check to your address of record. The
following payment options are available if you complete the appropriate section
of the New Account Form or an Account Service Options Form. These payment
options require a signature guarantee if they were not established prior to
redeeming Shares:
o an electronic transfer to your depository account at a financial institution
that is an ACH member; or o wire payment to your account at a domestic
commercial bank that is a Federal Reserve System member.
REDEMPTION IN KIND. Although the Fund intends to pay Share redemptions in cash,
it reserves the right to pay the redemption price in whole or in part by a
distribution of the Fund's portfolio securities.
<PAGE>
LIMITATIONS ON REDEMPTION PROCEEDS
Redemption proceeds normally are wired or mailed within one business day after
receiving a request in proper form. Payment may be delayed up to seven days:
w to allow your purchase to clear;
w during periods of market volatility; or
w when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets.
You will not accrue interest or dividends on uncashed checks from the Fund. If
those checks are undeliverable and returned to the Fund, the proceeds will be
reinvested in Shares.
REDEMPTIONS FROM RETIREMENT ACCOUNTS
In the absence of your specific instructions, 10% of the value of your
redemption from a retirement account in the Fund may be withheld for taxes. This
withholding only applies to certain types of retirement accounts.
ADDITIONAL CONDITIONS
TELEPHONE TRANSACTIONS. The Fund will record your telephone instructions. If the
Fund does not follow reasonable procedures, it may be liable for losses due to
unauthorized or fraudulent telephone instructions. The Fund will notify you if
it changes telephone transaction privileges.
SHARE CERTIFICATES. The Fund no longer issues share certificates. If you are
redeeming Shares represented by certificates previously issued by the Fund, you
must return the certificates with your written redemption request. For your
protection, send your certificates by registered or certified mail, but do not
endorse them.
ACCOUNT AND SHARE INFORMATION
CONFIRMATIONS AND ACCOUNT STATEMENTS
You will receive confirmation of purchases and redemptions. In addition, you
will receive periodic statements reporting all account activity, including
dividends and capital gains paid.
DIVIDENDS AND CAPITAL GAINS
The Fund declares and pays any dividends quarterly to shareholders. Dividends
are paid to all shareholders invested in the Fund on the record date. The record
date is the date on which a shareholder must officially own shares in order to
earn a dividend.
In addition, the Fund pays any capital gains at least annually. Your dividends
and capital gains distributions will be automatically reinvested in additional
Shares without a sales charge, unless you elect cash payments. If you elect cash
payments and the payment is returned as undeliverable, your cash payment will be
reinvested in Shares and your distribution option will convert to automatic
reinvestment. If any distribution check remains uncashed for six months the
check will no longer be honored, the check amount will be reinvested in Shares,
and you will not accrue any interest or dividends on this amount prior to the
reinvestment.
If you purchase Shares just before a Fund declares a dividend or capital gain
distribution, you will pay the full price for the Shares and then receive a
portion of the price back in the form of a distribution, whether or not you
reinvest the distribution in Shares. Therefore, you should consider the tax
implications of purchasing Shares shortly before the Fund declares a dividend or
capital gain. Contact your investment professional or the Fund for information
concerning when dividends and capital gains will be paid.
ACCOUNTS WITH LOW BALANCES
Due to the high-cost of maintaining accounts with low balances, non-retirement
accounts may be closed if redemptions cause the account balance to fall below
the minimum initial investment amount. Before an account is closed, the
shareholder will be notified and allowed 30 days to purchase additional Shares
to meet the minimum.
<PAGE>
TAX INFORMATION
The Fund sends an annual statement of your account activity to assist you in
completing your federal, state and local tax returns. Fund distributions of
dividends and capital gains are taxable to you whether paid in cash or
reinvested in the Fund. Dividends and capital gains distributions are taxable at
different rates depending upon the length of time the Fund holds its assets.
Fund distributions are expected to be both dividends and capital gains.
Redemptions and exchanges are taxable sales. Please consult your tax preparer
regarding your federal, state, and local tax liability.
WHO MANAGES THE FUND?
The Board of Trustees governs the Fund. The Board selects and oversees the
Adviser, Federated Management. The Adviser manages the Fund's assets, including
buying and selling portfolio securities. The Adviser's address is Federated
Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA 15222-3779.
The Fund's portfolio managers are as follows:
Michael P. Donnelly has been the Fund's portfolio manager since November
1997. Mr. Donnelly joined Federated in 1989 as an Investment Analyst and has
been a Vice President of the Fund's Adviser since 1994. He served as an
Assistant Vice President of the Fund's Adviser from 1992 to 1994. Mr. Donnelly
is a Chartered Financial Analyst and received his M.B.A. from the University of
Virginia.
Charles A. Ritter has been the Fund's portfolio manager since October 1998.
Mr. Ritter joined Federated Investors in 1983 and has been a Vice President of
the Fund's investment adviser since 1992. Mr. Ritter is a Chartered Financial
Analyst and received his M.B.A. in Finance from the University of Chicago and
his M.S. in Economics from Carnegie Mellon University.
The Adviser and other subsidiaries of Federated advise and/or provide
administrative services to more than 300 mutual funds and private accounts,
which total over $120 billion in assets as of December 31, 1997. Federated was
established in 1955 and is one of the largest mutual fund investment managers in
the United States with more than 2,000 employees. Over 4,000 investment
professionals make Federated Funds available to their customers.
The annual investment advisory fee is based on the Fund's average daily net
assets as shown on the chart below.
Advisory Fee as a
Average Daily Percentage of Average
Net Assets Daily Net Assets
- ---------------------- ----------------------------
First $500 million 0.750%
Second $500 million 0.675%
Third $500 million 0.600%
Fourth $500 million 0.525%
Over $2 billion 0.400%
Under the investment advisory contract, the Adviser will reimburse the Fund the
amount, limited to the amount of the advisory fee, by which the Fund's aggregate
annual operating expenses, including its investment advisory fee but excluding
interest, taxes, brokerage commissions, expenses of registering and qualifying
the Fund and its shares under federal and state laws, expenses of withholding
taxes, and extraordinary expenses exceed 1.00% of its average daily net assets.
This does not include reimbursement to the Fund of any expenses incurred by
shareholders who use the transfer agent's subaccounting facilities.
<PAGE>
YEAR 2000 READINESS. The "Year 2000" problem is the potential for computer
errors or failures because certain computer systems may be unable to interpret
dates after December 31, 1999. The Year 2000 problem may cause systems to
process information incorrectly and could disrupt businesses that rely on
computers, like the Fund.
While it is impossible to determine in advance all of the risks to the Fund, the
Fund could experience interruptions in basic financial and operational
functions. Fund shareholders could experience errors or disruptions in Fund
share transactions or Fund communications.
The Fund's service providers are making changes to their computer systems to fix
any Year 2000 problems. In addition, they are working to gather information from
third-party providers to determine their Year 2000 readiness.
Year 2000 problems would also increase the risks of the Fund's investments. To
assess the potential effect of the Year 2000 problem, the Adviser is reviewing
information regarding the Year 2000 readiness of issuers of securities the Fund
may purchase.
However, this may be difficult with certain issuers. For example, funds dealing
with foreign service providers or investing in foreign securities, will have
difficulty determining the Year 2000 readiness of those entities. This is
especially true of entities or issuers in emerging markets.
The financial impact of these issues for the Fund is still being determined.
There can be no assurance that potential Year 2000 problems would not have a
material adverse effect on the Fund.
FINANCIAL INFORMATION
FINANCIAL HIGHLIGHTS
The following financial highlights will help you understand the Fund's financial
performance for its past five fiscal years, or since inception, if the life of
the Fund is shorter. Some of the information is presented on a per share basis.
Total returns represent the rate an investor would have earned (or lost) on an
investment in the Fund, assuming reinvestment of all dividends and
distributions.
Financial statements will be filed by amendment.
<PAGE>
FEDERATED STOCK TRUST
A Statement of Additional Information (SAI) dated December 31, 1998 is
incorporated by reference into this prospectus. Additional information about the
Fund's investments is available in the Fund's annual and semi-annual reports to
shareholders. The annual report discusses market conditions and investment
strategies that significantly affected the Fund's performance during its last
fiscal year. To obtain the SAI, the annual and semi-annual reports and other
information without charge call your investment professional or the Fund at
1-800-341-7400.
Internet Address: www.federatedinvestors.com
You can obtain information about the Fund by visiting or writing the Public
Reference Room of the Securities and Exchange Commission in Washington, D.C.
20549-6009 or from the Commission's Internet site at http://www.sec.gov. You can
call 1-800-SEC-0330 for information on the Public Reference Room's operations
and copying charges.
Cusip 313900102
8120102A (12/98)
Investment Company Act File No. 811-3385
[Federated Name, Logo]
STATEMENT OF ADDITIONAL INFORMATION DECEMBER 31, 1998
FEDERATED STOCK TRUST
This Statement of Additional Information (SAI) is not a prospectus. Read
this SAI in conjunction with the prospectus for Federated Stock Trust
(Fund), dated December 31, 1998. Obtain the prospectus without charge by
calling 1-800-341-7400.
CONTENTS
How is the Fund Organized?
Securities in Which the Fund Invests
What Do Shares Cost?
How is the Fund Sold?
Subaccounting Services
Redemption in Kind
Massachusetts Partnership Law
Account and Share Information
Tax Information
Who Manages and Provides
Services to the Fund?
How Does the Fund Measure Performance?
Who is Federated Investors, Inc.?
Investment Ratings
[Federated Investors Logo]
Federated Securities Corp., Distributor,
subsidiary of Federated Investors, Inc.
CUSIP 313900102
8120102B (12/98)
<PAGE>
HOW IS THE FUND ORGANIZED?
The Fund is a diversified open-end, management investment company that was
established under the laws of the Commonwealth of Massachusetts on December 30,
1981. The Fund may offer separate series of shares representing interests in
separate portfolios of securities.
SECURITIES IN WHICH THE FUND INVESTS
In pursuing its investment strategy, the Fund may invest in the following
securities for any purpose that is consistent with its investment objective.
EQUITY SECURITIES represent a share of the issuer's earnings and assets, after
the issuer pays its liabilities. Generally, issuers have discretion as to the
payment of any dividends or distributions. As a result, investors cannot predict
the income they will receive from equity securities. However, equity securities
offer greater potential for appreciation than many other types of securities,
because their value increases directly with the value of the issuer's business.
The following describes the types of equity securities in which the Fund
invests.
COMMON STOCKS are the most prevalent type of equity security. Common
stockholders receive the residual value of the issuer's earnings and assets
after the issuer pays its creditors and any preferred stockholders. As a
result, changes in an issuer's earnings directly influence the value of its
common stock.
PREFERRED STOCKS have the right to receive specified dividends or
distributions before the payment of dividends or distributions on common
stock. Some preferred stocks also participate in dividends and distributions
paid on common stock. Preferred stocks may provide for the issuer to redeem
the stock. The Fund may treat such redeemable preferred stock as a fixed
income security.
REITS are real estate investment trusts that lease, operate and finance
commercial real estate. REITs are exempt from federal corporate income tax if
they limit their operations and distribute most of their income. Such tax
requirements limit a REIT's ability to respond to changes in the commercial
real estate market.
WARRANTS give the Fund the option to buy the issuer's stock or other equity
securities at a specified price. The Fund may buy the designated shares by
paying the exercise price before the warrant expires. Warrants may become
worthless if the price of the stock does not rise above the exercise price by
the expiration date. RIGHTS are the same as warrants, except they are
typically issued to existing stockholders.
FIXED INCOME SECURITIES pay interest, dividends or distributions at a specified
rate. The rate may be fixed or adjusted periodically. The issuer must also repay
the principal amount of the security, normally within a specified time. Fixed
income securities provide more regular income than equity securities. However,
the returns on fixed income securities are limited and normally do not increase
with the issuer's earnings. This limits the potential appreciation of fixed
income securities as compared to equity securities.
A security's YIELD measures the annual income earned on a security as a
percentage of its price. Securities with higher credit risks generally have
higher yields. A security's yield will increase or decrease depending upon
whether it costs less (a "discount") or more (a "premium") than the principal
amount. Under normal market conditions, securities with longer maturities will
also have higher yields. If the issuer may redeem the security before its
scheduled maturity, the price and yield on a discount or premium security may
change based upon the probability of an early redemption.
<PAGE>
The following describes the types of fixed income securities in which the Fund
invests.
TREASURY SECURITIES are direct obligations of the federal government of the
United States. Investors regard treasury securities as having the lowest
Credit Risk.
AGENCY SECURITIES are issued or guaranteed by a federal agency or other
government sponsored entity acting under federal authority (a "GSE"). Some
GSEs are supported by the full, faith and credit of the United States. Other
GSEs receive support through federal subsidies, loans or other benefits. A
few GSEs have no explicit financial support, but are regarded as having
implied support because the federal government sponsors their activities.
Investors regard agency securities as having low Credit Risk, but not as low
as Treasury securities.
The Fund treats mortgage backed securities guaranteed by GSEs as agency
securities. Although a GSE guarantee protects against Credit Risk, it does
not reduce the Market and prepayment risks of these mortgage backed
securities.
CORPORATE DEBT SECURITIES are fixed income securities issued by businesses.
Notes, bonds, debentures and commercial paper are the most prevalent types of
corporate debt security. The credit risks of corporate debt securities vary
widely among issuers.
SPECIAL TRANSACTIONS
REPURCHASE AGREEMENTS are transactions in which a Fund buys a security from a
dealer or bank and agrees to sell the security back at a mutually agreed upon
time and price. The repurchase price exceeds the sale price, reflecting an
agreed upon interest rate effective for the period the Fund owns the security
subject to repurchase. The agreed upon interest rate is unrelated to the
interest rate on the underlying security. The Funds will only enter into
repurchase agreements with banks and other recognized financial institutions,
such as broker/dealers, which are deemed by the Adviser to be creditworthy.
A Fund's custodian or subcustodian is required to take possession of the
securities subject to repurchase agreements. The Adviser or subcustodian will
monitor the value of the underlying security each day to ensure that the
value of the security always equals or exceeds the repurchase price.
Repurchase Agreements are subject to Credit Risk.
SECURITIES OF OTHER INVESTMENT COMPANIES. The Fund may invest its assets in
securities of other investment companies, including the securities of
affiliated money market funds, as an efficient means of carrying out its
investment policies and managing its uninvested cash. It should be noted that
investment companies incur certain expenses, such as management fees, and,
therefore, any investment by the Fund in shares of other investment companies
may be subject to such duplicate expenses.
WHEN ISSUED TRANSACTIONS are arrangements in which a Fund purchases
securities for a set price, with payment and delivery scheduled for a future
time. During the period between purchase and settlement, no payment is made
by the Fund to the issuer and no interest accrues to the Fund. The Fund
records the transaction when it agrees to purchase the securities and
reflects their value in determining the price of its shares. 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.
Therefore, when issued transactions create Bond Market Risk for the Fund.
When issued transactions also involve Credit Risk in the event of a
counterparty default.
<PAGE>
FOREIGN SECURITIES are securities of issuers based outside the U.S. They are
primarily denominated in foreign currencies and traded outside of the U.S. In
addition to the risks normally associated with U.S. securities of the same
type, Foreign Securities are subject to risks related to the issuer's country
and that country's currency.
DEPOSITARY RECEIPTS represent interests in underlying securities issued by
a foreign company, but traded in another market than the underlying
security. The foreign securities underlying American Depositary Receipts
(ADRs) are traded in the U.S. ADRs provide a way to buy shares of
foreign-based companies in the U.S. rather than in overseas markets. ADRs
are also traded in U.S. dollars, eliminating the need for foreign exchange
transactions. The foreign securities underlying European Depositary
Receipts (EDRs), Global Depositary Receipts (GDRs), and International
Depositary Receipts (IDRs), are traded globally or outside the U.S.
Depositary Receipts involve many of the same risks of investing directly
in foreign securities.
EQUITY SECURITIES INVESTMENT RISKS
LIQUIDITY RISKS
Equity securities that are not widely held may trade less frequently than more
widely held securities. This limits trading opportunity making it more difficult
to sell or buy the securities at a favorable price or time. In response, the
fund may have to lower the price, sell other securities, or give up an
investment opportunity, any of which could have a negative effect on its
performance. Infrequent trading may also lead to greater price volatility.
RISKS RELATED TO COMPANY SIZE
Generally, the smaller the market capitalization of a company, the fewer the
number of shares traded daily, the less liquid its stock and the more volatile
its price. Market capitalization is determined by multiplying the number of
outstanding shares by the current market price per share.
In addition, investing in small capitalization companies entails greater risk
because these companies may have unproven track records, limited product or
service base, limited access to capital and may be more likely to fail than
larger, more established companies.
LEVERAGE RISK
Leverage risk is created when an investment exposes the Fund to a level of risk
that exceeds the amount invested. Changes in the value of such an investment
magnify the fund's risk of loss and potential for gain. Investments can have
these same results if their returns are based on a multiple of a specified
index, security, or other benchmark.
FIXED INCOME SECURITIES INVESTMENT RISKS
BOND MARKET RISK
Prices of fixed income securities rise and fall in response to interest rate
changes for similar securities. Generally, when interest rates rise, prices of
fixed income securities fall.
Interest rate changes have a greater effect on the price of fixed income
securities with longer durations. Duration measures the price sensitivity of a
fixed income security to changes in interest rates.
CREDIT RISK
Credit risk is the possibility that an issuer will default (the issuer fails to
repay interest and principal when due). If an issuer defaults, the Fund will
lose money.
Many fixed income securities receive credit ratings from services such as
Standard & Poor's and Moody's Investor Services. Fixed income securities receive
different credit ratings depending on the rating service's assessment of the
likelihood of default by the issuer. The lower the credit rating, the greater
the credit risk. In the case of unrated securities, the Fund must rely entirely
upon the Adviser's credit assessment.
Fixed income securities generally compensate for greater credit risk by paying
interest at a higher rate. The difference between the yield of the security and
the yield of a U.S. Treasury security with a comparable maturity (the "spread")
measures the additional interest received for taking risk. Spreads may increase
generally in response to adverse economic or market conditions. A security's
spread may also increase if the security's rating is lowered, or the security is
perceived to have an increased credit risk. An increase in the spread will cause
the price of the security to decline.
Credit risk includes the possibility that a party to a transaction involving the
Fund will fail to meet its obligations. This could cause the Fund to lose the
benefit of the transaction or disrupt management of the Fund's portfolio .
CALL RISK
Call risk is the possibility that an issuer may redeem a fixed income security
before maturity (a "call") at a price below it's current market price. An
increase in the likelihood of a call may reduce the security's price.
If a fixed income security is called, the Fund may have to reinvest the proceeds
in other fixed income securities with lower interest rates, higher credit risks,
or other less favorable characteristics.
LIQUIDITY RISKS
Fixed income securities that have noninvestment grade credit ratings, have not
been rated or that are not widely held may trade less frequently than more
widely held securities. This limits trading opportunities, making it more
difficult to sell or buy the security at a favorable price or time. In response,
the Fund may have to lower the price, sell other securities, or give up an
investment opportunity, any of which could have a negative effect on its
performance. Infrequent trading may also lead to greater price volatility.
Liquidity risk [also] refers to the possibility that the Fund may not be able to
sell a security or close out a derivative contract when it wants to. If this
happens, the Fund will be required to continue to hold the security or keep the
position open, and the Fund could incur losses.
OTC derivative contracts generally carry greater liquidity risk than
exchange-traded contracts.
RISKS ASSOCIATED WITH NONINVESTMENT GRADE SECURITIES
Securities rated below investment grade, also known as junk bonds, generally
entail greater risks than investment grade securities. For example, their prices
are more volatile, their values are more negatively impacted by economic
downturns, and their trading market may be more limited.
INVESTMENT LIMITATIONS
The Fund will not change any of the investment policies or limitations described
below without approval of shareholders, unless indicated otherwise.
STOCKS
At least 80% of the Fund's portfolio will be invested in common stocks, unless
it is in a defensive position.
ILLIQUID SECURITIES
Management will limit the amount of repurchase agreements with maturities in
excess of seven days and other illiquid securities to not more than 10% of the
Fund's assets.
BUYING ON MARGIN
The Fund will not purchase any securities on margin, except for such credits as
are necessary for the clearance of transactions.
<PAGE>
SELLING SHORT
The Fund will not make short sales of securities.
BORROWING MONEY
The Fund will not borrow money except as a temporary measure for extraordinary
or emergency purposes and then (a) only in amounts not in excess of 5% of the
value of its total assets or (b) in an amount up to one-third of the value of
its total assets including the amount borrowed 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 Fund to meet redemption requests where the
liquidation of portfolio securities is deemed to be inconvenient or
disadvantageous.) While any such borrowings are outstanding, no purchases of
investment securities will be made by the Fund.
PLEDGING ASSETS
The Fund will not pledge, mortgage or hypothecate its assets, except that, to
secure permitted borrowings, it may pledge securities having a market value at
the time of pledge not exceeding 10% of the value of the Fund's total assets.
INVESTING IN COMMODITIES OR MINERALS
The Fund will not purchase or sell commodities, commodity contracts, oil, gas,
or other mineral exploration or development programs.
INVESTING IN REAL ESTATE
The Fund will not purchase or sell real estate, but this shall not prevent the
Fund from investing in municipal bonds secured by real estate or interest
therein.
UNDERWRITING
The Fund 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.
LENDING CASH OR SECURITIES
The Fund 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.
PURCHASING SECURITIES OF OTHER INVESTMENT COMPANIES
The Fund 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 sponsor or dealer results from such purchases other than the
customary broker's commission or except when such a purchase, though not made in
the open market, is part of a plan of merger or consolidation.
DIVERSIFICATION OF INVESTMENTS
The Fund will not purchase the securities of any issuer (except cash, cash
instruments and securities issued or guaranteed by the United States 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.
DEALING IN PUTS AND CALLS
The Fund will not write, purchase or sell puts, calls, straddles or spreads or
any combinations thereof.
INVESTING IN ISSUERS WHOSE SECURITIES ARE OWNED BY OFFICERS OF THE FUND
The Fund will not purchase or retain the securities of any issuer other than the
securities of the Fund, if, to the Fund's knowledge, those officers and Trustees
of the Fund, 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.
CONCENTRATION OF INVESTMENTS IN ONE INDUSTRY
The Fund will not invest more than 25% of the value of its total assets in one
industry.
<PAGE>
ACQUIRING SECURITIES
The Fund may not acquire more than 10% of the voting securities of any one
issuer.
INVESTING IN NEW ISSUERS
The Fund may not invest more than 5% of the value of the total assets of the
Fund in securities of issuers which have a record of less than three years of
continuous operation, including the operation of any predecessor.
PURCHASING SECURITIES TO EXERCISE CONTROL
The Fund may not invest in securities of a company for the purpose of exercising
control or management. However, the Fund will acquire no more than 10% of the
voting securities of an issuer and may exercise its voting power in the Fund's
best interest. From time to time the Fund, 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 Fund 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 Fund might possibly become directors of
companies in which the Fund holds stock.
ISSUING SENIOR SECURITIES
The Fund will not issue senior securities except as permitted by its investment
objective, policies and limitations.
RESTRICTED SECURITIES
The Fund 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 any of the percentage limitations set
forth are 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 nor will the Fund be required to make any changes
in its portfolio holdings.
DETERMINING MARKET VALUE OF SECURITIES
Market values of the Fund's portfolio securities are determined as follows:
o for equity securities, according to the last sale price in the market in which
they are primarily traded (either a national securities exchange or the
over-the-counter market), if available;
o in the absence of recorded sales for equity securities, according to the mean
between the last closing bid and asked prices;
o for bonds and other fixed income securities, at the last sale price on a
national securities exchange, if available, otherwise, as determined by an
independent pricing service;
o for short-term obligations, according to the mean between bid and asked prices
as furnished by an independent pricing service, except that short-term
obligations with remaining maturities of less than 60 days at the time of
purchase may be valued at amortized cost or at fair market value as determined
in good faith by the Board; and
o for all other securities, at fair value as determined in good faith by
the Board.
Prices provided by independent pricing services may be determined without
relying exclusively on quoted prices and may consider: institutional trading in
similar groups of securities, yield, quality, stability, risk, coupon rate,
maturity, type of issue, trading characteristics, and other market data or
factors. From time to time, when prices cannot be obtained from an independent
pricing service, securities may be valued based on quotes from broker-dealers or
other financial institutions that trade the securities.
<PAGE>
The Fund values futures contracts and options at their market values established
by the exchanges on which they are traded at the close of trading on such
exchanges. Options traded in the over-the-counter market are valued according to
the mean between the last bid and the last asked price for the option as
provided by an investment dealer or other financial institution that deals in
the option. The Board may determine in good faith that another method of valuing
such investments is necessary to appraise their fair market value.
TRADING IN FOREIGN SECURITIES. Trading in foreign securities may be completed at
times which vary from the closing of the New York Stock Exchange (NYSE). In
computing its NAV, the Fund values foreign securities at the latest closing
price on the exchange on which they are traded immediately prior to the closing
of the NYSE. Certain foreign currency exchange rates may also be determined at
the latest rate prior to the closing of the NYSE. Foreign securities quoted in
foreign currencies are translated into U.S. dollars at current rates.
Occasionally, events that affect these values and exchange rates may occur
between the times at which they are determined and the closing of the NYSE. If
such events materially affect the value of portfolio securities, these
securities may be valued at their fair value as determined in good faith by the
Fund's Board, although the actual calculation may be done by others.
WHAT DO SHARES COST?
The Fund's net asset value (NAV) per Share fluctuates and is based on the market
value of all securities and other assets of the Fund.
HOW IS THE FUND SOLD?
Under the Distributor's Contract with the Fund, the Distributor (Federated
Securities Corp.), located at Federated Investors Tower, 1001 Liberty Avenue,
Pittsburgh, PA 15222-3779, offers Shares on a continuous, best-efforts basis.
SHAREHOLDER SERVICES
The Fund may pay Federated Shareholder Services, a subsidiary of Federated, for
providing shareholder services and maintaining shareholder accounts. Federated
Shareholder Services may select others to perform these services for their
customers and may pay them fees.
HOW TO BUY SHARES
EXCHANGING SECURITIES FOR SHARES
You may contact the Distributor to request a purchase of Shares in an exchange
for securities you own. The Fund reserves the right to determine whether to
accept your securities and the minimum market value to accept. The Fund will
value your securities in the same manner as it values its assets. This exchange
is treated as a sale of your securities for federal tax purposes.
SUBACCOUNTING SERVICES
Investment professional are encouraged to open single master accounts. However,
certain investment professional may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent may charge a fee based on the level of subaccounting services
rendered. Investment professional holding Shares in a fiduciary, agency,
custodial, or similar capacity may charge or pass through subaccounting fees as
part of or in addition to normal trust or agency account fees. They may also
charge fees for other services they provide that may be related to the ownership
of Shares. This information should, therefore, be read together with any
agreement between the customer and the financial intermediary with regard to the
services provided, the fees charged for those services, and any restrictions and
limitations imposed.
<PAGE>
REDEMPTION IN KIND
Although the Fund intends to pay Share redemptions in cash, it reserves the
right, as described below, to pay the redemption price in whole or in part by a
distribution of the Fund's portfolio securities.
Because the Fund has elected to be governed by Rule 18f-1 under the Investment
Company Act of 1940, the Fund is obligated to pay Share redemptions to any one
shareholder in cash only up to the lesser of $250,000 or 1% of the net assets
represented by such Share class during any 90-day period.
Any Share redemption payment greater than this amount will also be in cash
unless the Fund's Board determines that payment should be in kind. In such a
case, the Fund will pay all or a portion of the remainder of the redemption in
portfolio securities, valued in the same way as the Fund determines its NAV. The
portfolio securities will be selected in a manner that the Fund's Board deems
fair and equitable and, to the extent available, such securities will be readily
marketable.
Redemption in kind is not as liquid as a cash redemption. If redemption is made
in kind, shareholders receiving the portfolio securities and selling them before
their maturity could receive less than the redemption value of the 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 obligations of the Trust. To protect its
shareholders, the Trust has filed legal documents with Massachusetts that
expressly disclaim the liability of its shareholders for acts or obligations of
the Trust. These documents require notice of this disclaimer to be given in each
agreement, obligation, or instrument the Trust or its Trustees enter into or
sign.
In the unlikely event a shareholder is held personally liable for the Trust's
obligations, the Trust is required 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.
ACCOUNT AND SHARE INFORMATION
VOTING RIGHTS
Each share of the Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote.
Trustees may be removed by the Trustees or by shareholders at a special meeting.
A special meeting of shareholders will be called by the Trustees upon the
written request of shareholders who own at least 10% of the Fund's outstanding
shares entitled to vote.
As of October 9, 1998, the following shareholders owned of record, beneficially,
or both, 5% or more of outstanding Shares: Charles Schwab & Co., Inc., San
Francisco, California, owned approximately 2,181,406 shares (5.77%) and National
Financial Services (for the exclusive benefit of its customer), New York, New
York, owned approximately 1,961,235 shares (5.19%).
TAX INFORMATION
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects to meet requirements
of Subchapter M of the Internal Revenue Code (Code) applicable to regulated
investment companies and to receive the special tax treatment afforded such
companies.
<PAGE>
FOREIGN INVESTMENTS. If the Fund purchases foreign securities, their investment
income may be subject to foreign withholding or other taxes that could reduce
the return on these securities. Tax treaties between the United States and
foreign countries, however, may reduce or eliminate the amount of foreign taxes
to which the Fund would be subject. The effective rate of foreign tax cannot be
predicted since the amount of Fund assets to be invested within various
countries is uncertain. However, the Fund intends to operate so as to qualify
for treaty-reduced tax rates when applicable.
Distributions from a Fund may be based on estimates of book income for the year.
Book income generally consists solely of the coupon income generated by the
portfolio, whereas tax basis income includes gains or losses attributable to
currency fluctuation. Due to differences in the book and tax treatment of fixed
income securities denominated in foreign currencies, it is difficult to project
currency effects on an interim basis. Therefore, to the extent that currency
fluctuations cannot be anticipated, a portion of distributions to shareholders
could later be designated as a return of capital, rather than income, for income
tax purposes, which may be of particular concern to simple trusts.
If the Fund invests in the stock of certain foreign corporations, they may
constitute Passive Foreign Investment Companies (PFIC), and the Fund may be
subject to Federal income taxes upon disposition of PFIC investments.
If more than 50% of the value of the Fund's assets at the end of the tax year is
represented by stock or securities of foreign corporations, the Fund intends to
qualify for certain Code stipulations that would allow shareholders to claim a
foreign tax credit or deduction on their U.S. income tax returns. The Code may
limit a shareholder's ability to claim a foreign tax credit. Shareholders who
elect to deduct their portion of the Fund's foreign taxes rather than take the
foreign tax credit must itemize deductions on their income tax returns.
WHO MANAGES AND PROVIDES SERVICES TO THE FUND?
BOARD OF TRUSTEES
The Board is responsible for managing the Fund's business affairs and for
exercising all the Fund's powers except those reserved for the shareholders.
Information about each Board member is provided below and includes the following
data: name, address, birthdate, present position(s) held with the Fund,
principal occupations for the past five years, total compensation received as a
Trustee from the Fund for its most recent fiscal year, and the total
compensation received from the Federated Fund Complex for the most recent
calendar year. The Federated Fund Complex includes 56 investment companies whose
investment adviser is affiliated with the Fund's Adviser. As of October 9, 1998,
the Fund's Board and Officers as a group owned less than 1% of the Fund's
outstanding Shares.
An asterisk (*) denotes a Trustee who is deemed to be an interested person as
defined in the Investment Company Act of 1940. The following symbol (#) denotes
a Member of the Board's Executive Committee, which handles the Board's
responsibilities between its meetings.
<PAGE>
JOHN F. DONAHUE*#
Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA
Birthdate: July 28, 1924
Chairman and Trustee
Chief Executive Officer and Director or Trustee of the Federated Fund Complex.
Chairman and Director, Federated Investors, Inc.; Chairman and Trustee,
Federated Advisers, Federated Management, and Federated Research; Chairman and
Director, Federated Research Corp., and Federated Global Research Corp.;
Chairman, Passport Research, Ltd. Mr. Donahue is the father of J. Christopher
Donahue, Executive Vice President of the Fund.
Compensation from Fund $______
Compensation from Federated Fund Complex $______
THOMAS G. BIGLEY
15 Old Timber Trail, Pittsburgh, PA
Birthdate: February 3, 1934
Trustee
Director or Trustee of the Federated Fund Complex; Director, Member of Executive
Committee, Children's Hospital of Pittsburgh; formerly, Senior Partner, Ernst &
Young LLP; Director, MED 3000 Group, Inc.; Director, Member of Executive
Committee, University of Pittsburgh.
Compensation from Fund $______
Compensation from Federated Fund Complex $______
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
Director or Trustee of the Federated Fund Complex; President, Investment
Properties Corporation; Senior Vice-President, John R. Wood and Associates,
Inc., Realtors; Partner or Trustee in private real estate ventures in Southwest
Florida; formerly, President, Naples Property Management, Inc. and Northgate
Village Development Corporation.
Compensation from Fund $______
Compensation from Federated Fund Complex $______
NICHOLAS CONSTANTAKIS
175 Woodshire Drive, Pittsburgh, PA
Birthdate: September 3, 1939
Trustee
Director or Trustee of the Federated Fund Complex; formerly, Partner,
Andersen Worldwide SC;
Compensation from Fund $______
Compensation from Federated Fund Complex $______
<PAGE>
WILLIAM J. COPELAND
One PNC Plaza - 23rd Floor, Pittsburgh, PA
Birthdate: July 4, 1918
Trustee
Director or Trustee of the Federated Fund Complex; Director and Member of the
Executive Committee, Michael Baker, Inc.; formerly, Vice Chairman and Director,
PNC Bank, N.A., and PNC Bank Corp.; Director, Ryan Homes, Inc.; Director, United
Refinery; Chairman, Pittsburgh Foundation; Director, Forbes Fund; Chairman,
Pittsburgh Civic Light Opera.
Compensation from Fund $______
Compensation from Federated Fund Complex $______
JAMES E. DOWD, ESQ.
571 Hayward Mill Road, Concord, MA
Birthdate: May 18, 1922
Trustee
Director or Trustee of the Federated Fund Complex; Attorney-at-law; Director,
The Emerging Germany Fund, Inc.; formerly, President, Boston Stock Exchange,
Inc.; Regional Administrator, United States Securities and Exchange Commission.
Compensation from Fund $______
Compensation from Federated Fund Complex $______
LAWRENCE D. ELLIS, M.D.*
3471 Fifth Avenue, Suite 1111, Pittsburgh, PA
Birthdate: October 11, 1932
Trustee
Director or Trustee of the Federated Fund Complex; Professor of Medicine,
University of Pittsburgh; Medical Director, University of Pittsburgh Medical
Center - Downtown, Hematologist, Oncologist, and Internist, Presbyterian and
Montefiore Hospitals; formerly, Member, National Board of Trustees, Leukemia
Society of America.
Compensation from Fund $______
Compensation from Federated Fund Complex $______
EDWARD L. FLAHERTY, JR., ESQ.#
Miller, Ament, Henny & Kochuba, 205 Ross Street, Pittsburgh, PA
Birthdate: June 18, 1924
Trustee
Director or Trustee of the Federated Fund Complex; Attorney, Of Counsel, Miller,
Ament, Henny & Kochuba; Director, Eat'N Park Restaurants, Inc.; formerly,
Counsel, Horizon Financial, F.A., Western Region; Partner, Meyer and Flaherty.
Compensation from Fund $______
Compensation from Federated Fund Complex $______
<PAGE>
PETER E. MADDEN
One Royal Palm Way, 100 Royal Palm Way, Palm Beach, FL
Birthdate: March 16, 1942
Trustee
Director or Trustee of the Federated Fund Complex; formerly, Representative,
Commonwealth of Massachusetts General Court; President, State Street Bank and
Trust Company and State Street Corporation; Director, VISA USA and VISA
International; Chairman and Director, Massachusetts Banker Association;
Director, Depository Trust Corporation.
Compensation from Fund $______
Compensation from Federated Fund Complex $______
JOHN E. MURRAY, JR., J.D., S.J.D.
President, Duquesne University, Pittsburgh, PA
Birthdate: December 20, 1932
Trustee
Director or Trustee of the Federated Fund Complex; President, Law Professor,
Duquesne University; Consulting Partner, Mollica & Murray; formerly, Dean and
Professor of Law, University of Pittsburgh School of Law; Dean and Professor of
Law, Villanova University School of Law.
Compensation from Fund $______
Compensation from Federated Fund Complex $______
WESLEY W. POSVAR
1202 Cathedral of Learning, University of Pittsburgh, Pittsburgh, PA
Birthdate: September 14, 1925
Trustee
Director or Trustee of the Federated Fund Complex; President, World Society of
Ekistics, Athens; Professor, International Politics; Management Consultant;
Trustee, Carnegie Endowment for International Peace, RAND Corporation, Online
Computer Library Center, Inc., National Defense University and U.S. Space
Foundation; President Emeritus, University of Pittsburgh; Founding Chairman,
National Advisory Council for Environmental Policy and Technology, Federal
Emergency Management Advisory Board and Czech Management Center, Prague;
formerly, Professor, United States Military Academy; Professor, United States
Air Force Academy.
Compensation from Fund $______
Compensation from Federated Fund Complex $______
MARJORIE P. SMUTS
4905 Bayard Street, Pittsburgh, PA
Birthdate: June 21, 1935
Trustee
Director or Trustee of the Federated Fund Complex; Public
Relations/Marketing/Conference Planning; formerly, National Spokesperson,
Aluminum Company of America; business owner.
Compensation from Fund $______
Compensation from Federated Fund Complex $______
<PAGE>
GLEN R. JOHNSON
Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA
Birthdate: May 2, 1929
President
Trustee, Federated Investors, Inc.; staff member, Federated Securities Corp.
Compensation from Fund $______
Compensation from Federated Fund Complex $______
J. CHRISTOPHER DONAHUE
Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA
Birthdate: April 11, 1949
Executive Vice President
President or Executive Vice President of the Federated Fund Complex; Director or
Trustee of some of the Funds in the Federated Fund Complex President and
Director, Federated Investors, Inc.; President and Trustee, Federated Advisers,
Federated Management, and Federated Research; President and Director, Federated
Research Corp. and Federated Global Research Corp.; President, Passport
Research, Ltd.; Trustee, Federated Shareholder Services Company, and Federated
Shareholder Services; Director, Federated Services Company;. Mr. Donahue is the
son of John F. Donahue, Chairman and Trustee of the Fund.
Compensation from Fund $______
Compensation from Federated Fund Complex $______
EDWARD C. GONZALES
Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA
Birthdate: October 22, 1930
Executive Vice President
Trustee or Director of some of the Funds in the Federated Fund Complex;
President, Executive Vice President and Treasurer of some of the Funds in the
Federated Fund Complex; Vice Chairman, Federated Investors, Inc.; 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 Shareholder Services Company.
Compensation from Fund $______
Compensation from Federated Fund Complex $______
JOHN W. MCGONIGLE
Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA
Birthdate: October 26, 1938
Executive Vice President, Treasurer and Secretary
Executive Vice President and Secretary of the Federated Fund Complex; Treasurer
of some of the Funds in the Federated Fund Complex; Executive Vice President,
Secretary, and Director, Federated Investors, Inc.; Trustee, Federated Advisers,
Federated Management, and Federated Research; Director, Federated Research Corp.
and Federated Global Research Corp.; Trustee, Federated Shareholder Services
Company; Director, Federated Services Company; President and Trustee, Federated
Shareholder Services; Director, Federated Securities Corp.
Compensation from Fund $______
Compensation from Federated Fund Complex $______
<PAGE>
RICHARD B. FISHER
Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA
Birthdate: May 17, 1923
Vice President
President or Vice President of some of the Funds in the Federated Fund Complex;
Director or Trustee of some of the Funds in the Federated Fund Complex;
Executive Vice President, Federated Investors, Inc.; Chairman and Director,
Federated Securities Corp.;
Compensation from Fund $______
Compensation from Federated Fund Complex $______
INVESTMENT ADVISER
The Adviser conducts investment research and makes investment decisions for the
Fund. The Adviser is a wholly-owned subsidiary of Federated.
The Adviser shall not be liable to the Fund, or any Fund shareholder for any
losses that may be sustained in the purchase, holding, or sale of any security
or for anything done or omitted by it, except acts or omissions involving
willful misfeasance, bad faith, gross negligence, or reckless disregard of the
duties imposed upon it by its contract with the Fund.
The Adviser must waive the portion of its advisory fee that increases the Fund's
aggregate annual operating expenses above 1.00% of its average daily net assets.
The Fund's operating expenses include the advisory fee but exclude interest,
taxes, brokerage commissions, expenses of registering the Fund and its shares
under federal and state laws, expenses of withholding taxes, and extraordinary
expenses.
OTHER RELATED SERVICES. Affiliates of the Adviser may, from time to time,
provide certain electronic equipment and software to institutional customers in
order to facilitate the purchase of Fund Shares offered by the Distributor.
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. The Adviser will generally use those who are recognized dealers in
specific portfolio instruments, except when a better price and execution of the
order can be obtained elsewhere. The Adviser may select brokers and dealers
based on whether they also offer research services (as described below). In
selecting among firms believed to meet these criteria, the Adviser may give
consideration to those firms which have sold or are selling Shares of the Fund
and other funds distributed by the Distributor and its affiliates. The Adviser
makes decisions on portfolio transactions and selects brokers and dealers
subject to review by the Fund's Board.
RESEARCH SERVICES. Research services may include advice as to the advisability
of investing in securities; security analysis and reports; economic studies;
industry studies; receipt of quotations for portfolio evaluations; and similar
services. Research services may be used by the Adviser or by affiliates of
Federated in advising other accounts. To the extent that receipt of these
services may replace services for which the Adviser or its affiliates might
otherwise have paid, it would tend to reduce their expenses. The Adviser and its
affiliates exercise reasonable business judgment in selecting those 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.
For the fiscal year ended October 31, 1998, the Fund's adviser directed
brokerage transactions to certain brokers due to research services they
provided. The total amount of these transactions was $______ for which the Fund
paid $_________ in brokerage commissions.
<PAGE>
On October 31, 1998, the Fund owned securities of the following regular
broker/dealers:
Investment decisions for the Fund are made independently from those of other
accounts managed by the Adviser. When the Fund and one or more of those accounts
invests in, or disposes of, the same security, available investments or
opportunities for sales will be allocated among the Fund and the account(s) in a
manner believed by the Adviser to be equitable. While the coordination and
ability to participate in volume transactions may benefit the Fund, it is
possible that this procedure could adversely impact the price paid or received
and/or the position obtained or disposed of by the Fund.
ADMINISTRATOR
Federated Services Company, a subsidiary of Federated, provides administrative
personnel and services (including certain legal and financial reporting
services) necessary to operate the Fund. Federated Services Company provides
these at the following annual rate of the average aggregate daily net assets of
all Federated Funds as specified below:
MAXIMUM AVERAGE AGGREGATE DAILY NET
ADMINISTRATIVE FEE ASSETS OF THE FEDERATED FUNDS
.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
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of Shares.
Federated Services Company may voluntarily waive a portion of its fee and may
reimburse the Fund for expenses.
Federated Services Company also provides certain accounting and recordkeeping
services with respect to the Fund's portfolio investments for a fee based on
Fund assets plus out-of-pocket expenses.
CUSTODIAN
State Street Bank and Trust Company, Boston, Massachusetts, is custodian for the
securities and cash of the Fund. Foreign instruments purchased by the Fund are
held by foreign banks participating in a network coordinated by State Street
Bank.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Federated Services Company, through its registered transfer agent subsidiary,
Federated Shareholder Services Company, maintains all necessary shareholder
records. The Funds pays the transfer agent a fee based on the size, type, and
number of accounts and transactions made by shareholders.
INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young LLP is the independent public accountant for the Fund.
FEES PAID BY THE FUND FOR SERVICES
FOR THE YEAR ENDED
OCTOBER 31,
1998 1997 1996
Advisory Fee Earned............$............$.............$
Advisory Fee Reduction.........$............$.............$
Brokerage Commissions..........$............$.............$
Administrative Fee.............$............$.............$
12b-1 Fee......................$...........NA............NA
Shareholder Services Fee.......$...........NA............NA
If the Fund's expenses are capped at a particular level, the cap does not
include reimbursement to the Fund of any expenses incurred by shareholders who
use the transfer agent's subaccounting facilities.
<PAGE>
HOW DOES THE FUND MEASURE PERFORMANCE?
The Fund may advertise Share performance by using the Securities and Exchange
Commission's (SEC) standard method for calculating performance applicable to all
mutual funds. The SEC also permits this standard performance information to be
accompanied by non-standard performance information.
Unless otherwise stated, any quoted Share performance reflects the effect of
non-recurring charges, such as maximum sales charges, which, if excluded, would
increase the total return and yield. The performance of Shares depends upon such
variables as: portfolio quality; average portfolio maturity; type and value of
portfolio securities; changes in interest rates; changes or differences in the
Fund's or any class of Shares' expenses; and various other factors.
Share 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.
AVERAGE ANNUAL TOTAL RETURNS AND YIELD
Total returns given for the one-, five- and ten-year periods ended OCTOBER 31,
1998. Yield given for the 30-day period ended OCTOBER 31, 1998.
- ------------------------------------------
TOTAL YIELD
RETURN
- ------------------------------------------
- ------------------------------------------
- ------------------------------------------
- ------------------------------------------
One Year: % %
Five Year: % %
Ten Year: % %
- ------------------------------------------
TOTAL RETURN
Total return represents the change (expressed as a percentage) in the value of
Shares over a specific period of time, and includes the investment of income and
capital gains distributions.
The average annual total return for Shares 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 NAV 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, less any applicable sales charge, adjusted over the
period by any additional Shares, assuming the annual reinvestment of all
dividends and distributions.
YIELD
The yield of Shares is calculated by dividing: (i) the net investment income per
Share earned by the Shares over a thirty-day period; by (ii) the maximum
offering price per Share on the last day of the period. This number 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 Shares because of certain
adjustments required by the SEC and, therefore, may not correlate to the
dividends or other distributions paid to shareholders.
To the extent investment professional's and broker/dealers charge fees in
connection with services provided in conjunction with an investment in Shares,
the Share performance is lower for shareholders paying those fees.
<PAGE>
PERFORMANCE COMPARISONS
Advertising and sales literature may include:
o references to ratings, rankings, and financial publications and/or performance
comparisons of Shares to certain indices; o charts, graphs and illustrations
using the Fund's returns, or returns in general, that demonstrate investment
concepts such as
tax-deferred compounding, dollar-cost averaging and systematic investment;
o discussions of economic, financial and political developments and their impact
on the securities market, including the portfolio manager's views on how such
developments could impact the Funds; and
o information about the mutual fund industry from sources such as the Investment
Company Institute.
The Fund may compare its performance, or performance for the types of securities
in which it invests, to a variety of other investments, including federally
insured bank products such as bank savings accounts, certificates of deposit,
and Treasury bills.
The Fund may quote information from reliable sources regarding individual
countries and regions, world stock exchanges, and economic and demographic
statistics.
You may use financial publications and/or indices to obtain a more complete view
of Share performance. When comparing performance, you should consider all
relevant factors such as the composition of the 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:
DOW JONES INDUSTRIAL AVERAGE (DJIA). Represents share prices of selected
blue-chip industrial corporations. The DJIA indicates daily changes in the
average price of stock of these corporations. Because it represents the top
corporations of America, the DJIA index is a leading economic indicator for the
stock market as a whole.
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 specified period of time.
MORNINGSTAR, INC. An independent rating service, is the publisher of the
bi-weekly MUTUAL FUND VALUES, which 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.
STANDARD & POOR'S DAILY STOCK PRICE INDEX OF 500 COMMON STOCKS (S&P 500).
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 S & P
500 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 the S & P figures.
<PAGE>
WHO IS FEDERATED INVESTORS, INC.?
Federated Investors, Inc. is dedicated to meeting investor needs by making
structured, straightforward and consistent investment decisions. Federated
investment products have a history of competitive performance and have gained
the confidence of thousands of financial institutions and individual investors.
Federated's disciplined investment selection process is rooted in sound
methodologies backed by fundamental and technical research. At Federated,
success in investment management does not depend solely on the skill of a single
portfolio manager. It is the result of a process that combines the talents of
many individuals with the resources and tools they need. Investment decisions
are made by teams of portfolio managers and analysts which are executed by
traders dedicated to specific market sectors and who handle trillions of dollars
in annual trading volume.
MUNICIPAL FUNDS. In the municipal sector, as of December 31, 1997, Federated
managed 11 bond funds with approximately $2.1 billion in assets and 22 money
market funds with approximately $10.9 billion in total assets. In 1976,
Federated introduced one of the first municipal bond mutual funds in the
industry and is now one of the largest institutional buyers of municipal
securities. The Funds may quote statistics from organizations including The Tax
Foundation and the National Taxpayers Union regarding the tax obligations of
Americans.
EQUITY FUNDS. In the equity sector, Federated has more than 27 years'
experience. As of December 31, 1997, Federated managed 29 equity funds totaling
approximately $11.7 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.
CORPORATE BOND FUNDS. In the corporate bond sector, as of December 31, 1997,
Federated managed 11 money market funds and 16 bond funds with assets
approximating $17.1 billion and $5.6 billion, respectively. Federated's
corporate bond decision making--based on intensive, diligent credit analysis--is
backed by over 22 years of experience in the corporate bond sector. In 1972,
Federated introduced one of the first high-yield bond funds in the industry. In
1983, Federated was one of the first fund managers to participate in the
asset-backed securities market, a market totaling more than $200 billion.
GOVERNMENT FUNDS. In the government sector, as of December 31, 1997, Federated
manages 9 mortgage-backed, 6 government/ agency and 18 government money market
mutual funds, with assets approximating $5.9 billion, $1.5 billion and $35
billion, respectively. Federated trades approximately $400 million in U.S.
government and mortgage-backed securities daily and places approximately $23
billion in repurchase agreements each day. Federated introduced the first U.S.
government fund to invest in U.S. government bond securities in 1969. Federated
has been a major force in the short- and intermediate-term government markets
since 1982 and currently manages approximately $36 billion in government funds
within these maturity ranges.
MONEY MARKET FUNDS. In the money market sector, Federated gained prominence in
the mutual fund industry in 1974 with the creation of the first institutional
money market fund. Simultaneously, the company pioneered the use of the
amortized cost method of accounting for valuing shares of money market funds, a
principal means used by money managers today to value money market fund shares.
Other innovations include the first institutional tax-free money market fund. As
of December 31, 1997, Federated managed more than $63.1 billion in assets across
51 money market funds, including 18 government, 11 prime and 22 municipal with
assets approximating $35 billion, $17.1 billion and $10.9 billion, respectively.
The Chief Investment Officers responsible for oversight of the various
investment sectors within Federated are: U.S. equity and high yield - J. Thomas
Madden; U.S. fixed income - William D. Dawson, III; and global equities and
fixed income - Henry A. Frantzen. The Chief Investment Officers are Executive
Vice Presidents of the Federated advisory companies.
MUTUAL FUND MARKET. Thirty-seven percent of American households are pursuing
their financial goals through mutual funds. These investors, as well as
businesses and institutions, have entrusted over $4 trillion to the more than
6,700 funds available, according to the Investment Company Institute.
Federated distributes mutual funds through its subsidiaries for a variety of
investment purposes. Specific markets include:
INSTITUTIONAL CLIENTS. Federated meets the needs of approximately 900
institutional clients nationwide by managing and servicing separate accounts and
mutual funds for a variety of purposes, 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
advisers. The marketing effort to these institutional clients is headed by John
B. Fisher, President, Institutional Sales Division, Federated Securities Corp.
BANK MARKETING. Other institutional clients include more than 1,600 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 Timothy C. Pillion, Senior Vice
President, Bank Marketing & Sales.
BROKER/DEALERS AND BANK BROKER/DEALER SUBSIDIARIES. Federated Funds are
available to consumers through major brokerage firms nationwide--we have over
2,200 broker/dealer and bank broker/dealer relationships across the
country--supported by more wholesalers than any other mutual fund distributor.
Federated's service to financial professionals and institutions has earned it
high ratings in several surveys performed by DALBAR, Inc. DALBAR is recognized
as the industry benchmark for service quality measurement. The marketing effort
to these firms is headed by James F. Getz, President, Broker/Dealer Sales
Division, Federated Securities Corp.
<PAGE>
ADDRESSES
FEDERATED STOCK TRUST
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7000
Distributor
FEDERATED SECURITIES CORP. Federated Investors Tower
1001 Liberty Avenue,
Pittsburgh, Pennsylvania 15222-3779
Investment Adviser
FEDERATED MANAGEMENT Federated Investors Tower
1001 Liberty Avenue,
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 SHAREHOLDER SERVICES COMPANY P.O. Box 8600
Boston, Massachusetts 02266-8600
Independent Auditors
ERNST & YOUNG LLP One Oxford Centre
Pittsburgh, PA 15219
PART C. OTHER INFORMATION
Item 23. EXHIBITS:
(a) Conformed copy of the Amended and Restated Declaration of Trust
of the Registrant; + (b) Copy of the Amended and Restated By-Laws of
the
Registrant; +
(i) Copy of Amendment No. 6 to the By-Laws of the
Registrant dated February 23, 1998; +
(ii) Copy of Amendment No. 7 to the By-Laws of the
Registrant dated February 27, 1998; +
(iii) Copy of Amendment No. 8 to the By-Laws of the
Registrant dated May 12, 1998; +
(c) Copy of Specimen Certificate for Shares of Beneficial Interest
of the Registrant; (13) (d) Conformed copy of Investment Advisory
Contract of the Registrant; (13)
(e) (i) Conformed copy of Distributor's contract of the Registrant
including Exhibit A and Schedule A (Class B Shares); + (ii)
The Registrant hereby incorporates the conformed copy of the
specimen Mutual Funds Sales and Service Agreement; Mutual
Funds Service Agreement; and Plan Trustee/Mutual Funds
Service Agreement from Item 24(b)(6) of the Cash Trust
Series II Registration Statement on Form N-1A, filed
with the Commission on July 24,1995. (File Number
33-38550 and 811-6269).
(f) Not applicable;
(g) (i) Conformed copy of the Custodian Agreement of the
Registrant; (12) (ii) Conformed copy of Custodian Fee
Schedule; (15)
(h) (i) Conformed copy of Amended and Restated Shareholder Services
Agreement; (15)
(ii) Conformed copy of Principal Shareholder Servicer's
Agreement including Exhibit 1 and Schedule A (Class B
Shares);+ (iii) Conformed copy of Shareholder Services
Agreement including Exhibit 1 and Schedule A (Class B
Shares);+ (iv) Conformed Copy of Agreement for Fund Accounting
Services, Administrative Services, Shareholder Transfer Agency
Services
and Custody Services Procurement; +
(v) The Registrant hereby incorporates by reference the
conformed copy of the Shareholder Services Sub-Contract
between Fidelity and Federated Shareholder Services from
Item 24(b)(9)(iii) of the Federated GNMA Trust
Registration Statement on Form N-1A, filed wit the
Commission on March 25, 1996 (File Nos. 2-75670 and
811-3375).
- ------
+ All exhibits have been filed electronically.
12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No 23 on Form N-1A filed on December 27, 1994. (File Nos. 2-75756
and 811-3385)
13. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 25 on Form N-1A filed on December 21, 1995. (File Nos.
2-75756 and 811-3385)
15. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed on October 24, 1997. (File Nos. 2-75756
and 811-3385)
<PAGE>
(vi) The response described in Item 23(e)(ii) are hereby
incorporated by reference.
(i) Conformed copy of the Opinion and Consent of Counsel
regarding legality of securities registered; (12) (j) Conformed copy
of Consent of Independent Auditors (To be
Filed by Amendment);
(k) Not applicable;
(l) Conformed Copy of the Initial Capital Understanding; (13) (m)
Not applicable; (n) Financial Data Schedules; (16) (o) Not
applicable; (p) Conformed copy of Power of Attorney; +
Item 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND:
None
Item 25. INDEMNIFICATION: (8)
Item 26. Business and Other Connections of the Investment Adviser:
For a description of the other business of Federated Management, the
investment adviser for Federated Stock Trust, see the section entitled
"Who Manages the Fund?" in Part A. The affiliations with the Registrant
of two of the Trustees of Federated Management are included in Part B
of this Registration Statement under "Who Manages and Provides Services
to the Fund? - Board of Trustees." The remaining Trustees of Federated
Management, their principal occupations and business addresses are:
Mark D. Olson (Partner, Wilson, Halbrook & Bayard), 107 W. Market
Street, Georgetown, Delaware 19947, and Arthur L. Cherry (President,
Chief Executive Officer, and Trustee, Federated Services Company;
Director, Edgewood Services, Inc.; Trustee, Advanced Information
Systems; President and Director, Federated Administrative Services,
Inc.; President, Federated Administrative Services; Trustee, Federated
Bank and Trust; President and Trustee, Federated Shareholder Services
Company; President and Director, FS Holdings, Inc.; Chairman and
Trustee, Retirement Plan Service Company of America), Federated
Investors Tower, Pittsburgh, Pennsylvania, 15222-3779. From 1994 to
January 27, 1997, Mr. Cherry was Managing Partner, AT&T Solutions.
- ------
+ All exhibits have been filed electronically.
8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 11 on Form N-1A filed on December 22, 1998. (File Nos.
2-75756 and 811-3385)
12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No 23 on Form N-1A filed on December 27, 1994. (File Nos. 2-75756
and 811-3385)
13. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 25 on Form N-1A filed on December 21, 1995. (File Nos.
2-75756 and 811-3385)
16. Response is incorporated by reference to Registrant's Post Effective
Amendment No. 29 on Form N-1A filed on December 23, 1997. (File Nos.
2-75756 and 811-3385)
<PAGE>
The remaining Officers of Federated Management are:
Executive Vice Presidents: William D. Dawson, III
Henry A. Frantzen
J. Thomas Madden
Senior Vice Presidents: Joseph M. Balestrino
Drew J. Collins
Jonathan C. Conley
Deborah A. Cunningham
Mark E. Durbiano
Snadra L. McInerney
Susan M. Nason
Mary Jo Ochson
Robert J. Ostrowski
Vice Presidents: Todd A. Abraham
J. Scott Albrecht
Arthur J. Barry
Randall S. Bauer
David A. Briggs
Micheal W. Casey
Kenneth J. Cody
Michael P. Donnelly
Alexandre de Bethmann
Linda A. Duessel
Donald T. Ellenberger
Kathleen M. Foody-Malus
Thomas M. Franks
Edward C. Gonzales
James E. Grefenstette
Susan R. Hill
Stephen A. Keen
Robert K. Kinsey
Robert M. Kowit
Jeff A. Kozemchak
Richard J. Lazarchic
Steven Lehman
Marian R. Marinack
Charles A. Ritter
Keith J. Sabol
Scott B. Schermerhorn
Frank Semack
Aash M. Shah
Christopher Smith
Tracy P. Stouffer
Edward J. Tiedge
Paige M. Wilhelm
Jolanta M. Wysocka
Assistant Vice Presidents: Nancy J. Belz
Robert E. Cauley
Lee R. Cunningham, II
B. Anthony Delserone, Jr.
Paul S. Drotch
Salvatore A. Esposito
Donna M. Fabiano
John T. Gentry
William R. Jamison
Constantine Kartsonsas
John C. Kerber
Grant K. McKay
Natalie F. Metz
Joseph M. Natoli
John Sheehy
Michael W. Sirianni
Leonardo A. Vila
Lori A. Wolff
Secretary: Stephen A. Keen
Treasurer: Thomas R. Donahue
Assistant Secretaries: Thomas R. Donahue
Richard B. Fisher
Christine Ita McGonigle
Assistant Treasurer: Richard B. Fisher
The business address of each of the Officers of the investment adviser is
Federated Investors Tower, 1001 Liberty Avenue, 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 27. PRINCIPAL UNDERWRITERS:
(a) Federated Securities Corp. the Distributor for shares of the
Registrant, acts as principal underwriter for the following open-end investment
companies, including the Registrant:
Automated Government Money Trust; Cash Trust Series II; Cash Trust Series,
Inc.; CCB Funds; DG Investor Series; Edward D. Jones & Co. Daily Passport Cash
Trust; Federated Adjustable Rate U.S. Government Fund, Inc.; Federated American
Leaders Fund, Inc.; Federated ARMs Fund; Federated Core Trust; Federated Equity
Funds; Federated Equity Income Fund, Inc.; Federated Fund for U.S. Government
Securities, Inc.; Federated GNMA Trust; Federated Government Income Securities,
Inc.; Federated Government Trust; Federated High Income Bond Fund, Inc.;
Federated High Yield Trust; Federated Income Securities Trust; Federated Income
Trust; Federated Index Trust; Federated Institutional Trust; Federated Insurance
Series; Federated Master Trust; Federated Municipal Opportunities Fund, Inc.;
Federated Municipal Securities Fund, Inc.; Federated Municipal Trust; Federated
Short-Term Municipal Trust; Federated Short-Term U.S. Government Trust;
Federated Stock and Bond Fund, Inc.; 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: 2-5 Years; Federated U.S. Government Securities Fund: 5-10
Years; Federated Utility Fund, Inc.; Fixed Income Securities, Inc.; Independence
One Mutual Funds; Intermediate Municipal Trust; International Series, Inc.;
Investment Series Funds, Inc.; Liberty U.S. Government Money Market Trust;
Liquid Cash Trust; Managed Series Trust; Marshall Funds, Inc.; Money Market
Management, Inc.; Money Market Obligations Trust; Money Market Obligations Trust
II; Money Market Trust; Municipal Securities Income Trust; Newpoint Funds;
Regions Funds; RIGGS Funds; SouthTrust Funds; Tax-Free Instruments Trust; The
Planters Funds; The Wachovia Funds; The Wachovia Municipal Funds; Tower Mutual
Funds; Trust for Government Cash Reserves; Trust for Short-Term U.S. Government
Securities; Trust for U.S. Treasury Obligations; Vision Group of Funds, Inc.;
World Investment Series, Inc.; Blanchard Funds; Blanchard Precious Metals Fund,
Inc.; High Yield Cash Trust; Investment Series Trust; Peachtree Funds; Star
Funds; Targeted Duration Trust; The Virtus Funds; Trust for Financial
Institutions;
Federated Securities Corp. also acts as principal underwriter for the
following closed-end investment company: Liberty Term Trust, Inc.- 1999.
<PAGE>
(b)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH FUND
Richard B. Fisher Director, Chairman, Chief Vice President
Federated Investors Tower Executive Officer, Chief
1001 Liberty Avenue Operating Officer, Asst.
Pittsburgh, PA 15222-3779 Secretary and Asst.
Treasurer, Federated
Securities Corp.
Edward C. Gonzales Director, Executive Vice Executive Vice
Federated Investors Tower President, Federated, President
1001 Liberty Avenue Securities Corp.
Pittsburgh, PA 15222-3779
Thomas R. Donahue Director, Assistant Secretary --
Federated Investors Tower and Assistant Treasurer
1001 Liberty Avenue
Pittsburgh, PA 15222-3779 Federated Securities Corp
James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
David M. Taylor Executive Vice President --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Richard W. Boyd Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Laura M. Deger Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
<PAGE>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH FUND
Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Ronald Petnuch Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Ernest G. Anderson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Teresa M. Antoszyk Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
John B. Bohnet Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
<PAGE>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH FUND
David J. Callahan Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
R. Leonard Corton, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Kevin J. Crenny Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Daniel T. Culbertson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
G. Michael Cullen Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Marc C. Danile Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
William C. Doyle Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
<PAGE>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH FUND
John K. Goettlicher Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Craig S. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Raymond Hanley Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Bruce E. Hastings Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Beth A. Hetzel Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
James E. Hickey Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Charlene H. Jennings Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
H. Joseph Kennedy Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Michael W. Koenig Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Michael R. Manning Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Richard C. Mihm Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
<PAGE>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH FUND
J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Alec H. Neilly Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Thomas A. Peters III Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Richard A. Recker Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
John Rogers Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Brian S. Ronayne Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Thomas S. Schinabeck Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Edward L. Smith Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
<PAGE>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH FUND
John A. Staley Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Colin B. Starks Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Paul A. Uhlman Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Miles J. Wallace Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
John F. Wallin Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Edward J. Wojnarowski Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Michael P. Wolff Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Edward R. Bozek Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Terri E. Bush Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
<PAGE>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH FUND
Beth C. Dell Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
David L. Immonen Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Renee L. Martin Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Robert M. Rossi Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Matthew S. Hardin Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Denis McAuley Treasurer, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Leslie K. Platt Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
<PAGE>
Item 28. 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 1001 Liberty
Avenue Pittsburgh, PA 15222-3779
(Notices should be sent to the Agent
for Service at above address)
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
Federated Shareholder Services Company Federated Investors Tower
("Transfer Agent and Dividend 1001 Liberty Avenue
Disbursing Agent") Pittsburgh, PA 15222-3779
Federated Services Company Federated Investors Tower
("Administrator") 1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Federated Management Federated Investors Tower
("Adviser") 1001 Liberty Avenue
Pittsburgh, PA 15222-3779
State Street Bank and Trust Company P.O. Box 8600
("Custodian") Boston, MA 02266-8600
Item 29. MANAGEMENT SERVICES: Not applicable.
Item 30. 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 meetings by
shareholders.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, FEDERATED STOCK TRUST, has duly
caused this 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 30th day of October, 1998.
FEDERATED STOCK TRUST
BY: /s/ Karen M. Brownlee
Karen M. Brownlee, Assistant Secretary
Attorney in Fact for John F. Donahue
October 30, 1998
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/ Karen M. Brownlee Attorney In Fact October 30, 1998
Karen M. Brownlee For the Persons
ASSISTANT SECRETARY Listed Below
NAME TITLE
John F. Donahue* Chairman and Trustee
(Chief Executive Officer)
Glen R. Johnson* President
John W. McGonigle* Executive Vice President,
Secretary and Treasurer
(Principal Financial and
Accounting Officer)
Thomas G. Bigley* Trustee
John T. Conroy, Jr.* Trustee
Nicholas P. Constantakis * Trustee
William J. Copeland* Trustee
James E. Dowd, Esq.* Trustee
Lawrence D. Ellis, M.D.* Trustee
Edward L. Flaherty, Jr., Esq.* Trustee
Peter E. Madden* Trustee
John E. Murray, Jr., J.D., S.J.D.* Trustee
Wesley W. Posvar* Trustee
Marjorie P. Smuts* Trustee
* By Power of Attorney
Exhibit (a) under Form N-1A
Exhibit 3(i) under Item 601/Reg. S-K
FEDERATED STOCK TRUST
Amended and Restated
Declaration of Trust
TABLE OF CONTENTS
Page
ARTICLE I. .....................................NAMES AND DEFINITIONS 1
- ---------- ---------------------
Section 1......................................................Name 1
Section 2...............................................Definitions 1
ARTICLE II. .........................................PURPOSE OF TRUST 2
- ----------- ----------------
ARTICLE III. .......................................BENEFICIAL INTEREST 2
Section 1.............................Shares of Beneficial Interest 2
Section 2.......................................Ownership of Shares 2
Section 3...................................Investment in the Trust 2
Section 4.....................................No Pre-emptive Rights 3
Section 5..........Establishment and Designation of Series or Class 3
ARTICLE IV. THE TRUSTEES .............................................4
Section 1...................................Management of the Trust 4
Section 2............Election of Trustees at Meeting of Shareholders 5
Section 3................................Term of Office of Trustees 5
Section 4........Termination of Service and Appointment of Trustees 5
Section 5..............................Temporary Absence of Trustees 5
Section 6........................................Number of Trustees 5
Section 7...........Effect of Death, Resignation, etc. of a Trustee 6
Section 8.......................................Ownership of Assets 6
ARTICLE V. ....................................POWERS OF THE TRUSTEES 6
- ---------- ----------------------
Section 1....................................................Powers 6
Section 2....................................Principal Transactions 8
Section 3......................Trustees and Officers as Shareholders 8
Section 4.......................................Parties to Contract 8
ARTICLE VI. TRUSTEES' EXPENSES AND COMPENSATION .................... 9
- ----------- -----------------------------------
Section 1.....................................Trustee Reimbursement 9
Section 2......................................Trustee Compensation 9
ARTICLE VII. .............INVESTMENT ADVISER, ADMINISTRATIVE SERVICES,
PRINCIPAL UNDERWRITER AND TRANSFER AGENT .............. 10
Section 1........................................Investment Adviser 10
Section 2...................................Administrative Services 10
Section 3.....................................Principal Underwriter 11
Section 4............................................Transfer Agent 11
Section 5.............Provisions and Amendments..................... 11
ARTICLE VIII. ............... SHAREHOLDERS' VOTING POWERS AND MEETINGS 11
- ------------- ----------------------------------------
Section 1.............................................Voting Powers 11
Section 2..................................................Meetings 11
Section 3..................................Quorum and Required Vote 11
Section 4.....................................Additional Provisions 12
ARTICLE IX. CUSTODIAN ............................................. 12
Section 1.............Appointment and Duties........................ 12
Section 2.............Control Certificate System.................... 12
ARTICLE X. DISTRIBUTIONS AND REDEMPTIONS ......................... 13
- ---------- -----------------------------
Section 1.............................................Distributions 13
Section 2...............................Redemptions and Repurchases 14
Section 3.............Determination of Accumulated Net Income....... 14
Section 4.................................Net Asset Value of Shares 15
Section 5......................Suspension of the Right of Redemption 15
Section 6............................Trust's Right to Redeem Shares 15
ARTICLE XI. LIMITATION OF LIABILITY AND INDEMNIFICATION ........... 15
- ----------- -------------------------------------------
Section 1.Limitation of Personal Liability andIndemnification of
Shareholders 15
Section 2.Limitation of Personal Liability of Trustees, Officers,
Employees or Agents of the Trust ............................. 16
Section 3...............Express Exculpatory Clauses and Instruments 16
Section 4.Indemnification of Trustees, Officers, Employees and Agents
ARTICLE XII. MISCELLANEOUS........................................ 17
Section 1.................................Trust is not a Partnership 17
Section 2.Trustee's Good Faith Action, Expert Advice, No Bond or Surety 17
Section 3.............................Establishment of Record Dates 18
Section 4......................................Termination of Trust 18
Section 5.Offices of the Trust, Filing of Copies, References, Headings 19
Section 6............................................Applicable Law 19
Section 7.....................................Amendments -- General 19
Section 8...........................Amendments -- Series and Classes 19
Section 9...............................................Use of Name 21
<PAGE>
1
AMENDED AND RESTATED OF
DECLARATION OF TRUST
FEDERATED STOCK TRUST
Dated December 16, 1997
THIS AMENDED AND RESTATED DECLARATION OF TRUST made December 16, 1997, by
John F. Donahue, Thomas G. Bigley, John T. Conroy, Jr., William J. Copeland,
James E. Dowd, Lawrence D. Ellis, M.D., Edward L. Flaherty, Jr., Peter E.
Madden, John E. Murray, Jr., Wesley W. Posvar, and Marjorie P. Smuts.
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 known 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
Section 2(a)(42) of the 1940 Act, whichever may be applicable) and
"Principal Underwriter" shall have the meanings given them in the 1940
Act, as amended from time to time;
(b) The "Trust" refers to the FEDERATED STOCK TRUST;
(c) "Class" refers to a class of Shares established and designated under
or in accordance with the provisions of Article III;
(d) "Series" refers to a series of Shares established and designated under
or in accordance with the provisions of Article III;
(e) "Series Company" refers to the form of a registered open-end
investment company described in Section 18(f)(2) of the 1940 Act or in any
successor statutory provision;
(f) "Shareholder" means a record owner of Shares of any Series or Class;
(g) 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;
(h) "Shares" means the equal proportionate units of interest into which
the beneficial interest in the Trust shall be divided from time to time,
or if more than one Series or Class of Shares is authorized by the
Trustees, the equal proportionate units into which each Series or Class of
Shares shall be divided from time to time and includes fractions of Shares
as well as whole Shares; and
(i) 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. Subject to the provisions of Section 5
of this Article III, each Share shall have voting rights as provided in Article
VIII hereof, and holders of the Shares of any Series shall be entitled to
receive dividends, when and as declared with respect thereto in the manner
provided in Article X, Section 1 hereof. The Shares of any Series may be issued
in two or more Classes, as the Trustees may authorize pursuant to Article XII,
Section 8 hereof. Unless the Trustees have authorized the issuance of Shares of
a Series in two or more Classes, each Share of a Series shall represent an equal
proportionate interest in the assets and liabilities of the Series with each
other Share of the same Series, none having priority or preference over another.
If the Trustees have authorized the issuance of Shares of a Series in two or
more Classes, then the Classes may have such variations as to dividend,
redemption, and voting rights, net asset values, expenses borne by the Classes,
and other matters as the Trustees have authorized provided that each Share of a
Class shall represent an equal proportionate interest in the assets and
liabilities of the Class with each other Share of the same Class, none having
priority or preference over another. The number of Shares authorized shall be
unlimited. The Trustees may from time to time divide or combine the Shares of
any Series or Class into a greater or lesser number without thereby changing the
proportionate beneficial interests in the Series or Class. 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 which books shall be maintained separately for the Shares of each
Series or Class. 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
Shareholders of each Series or Class and as to the number of Shares of each
Series or Class 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), 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 to be
allocated among any Series or Classes in the manner described in Section 5(a) of
this Article. 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 relevant Series or Class, as the
case may be, 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.
SECTION 5. ESTABLISHMENT AND DESIGNATION OF SERIES OR CLASS.
Without limiting the authority of the Trustees set forth in Article XII,
Section 8, inter alia, to establish and designate any additional series or class
or to modify the rights and preferences of any existing Series or Class, the
initial series shall be, and is established without class designation as,
Federated Stock Trust.
Shares of any Series or Class established in this Section 5 shall have the
following relative rights and preferences:
(a) ASSETS BELONGING TO SERIES OR CLASS. All consideration received by the
Trust for the issue or sale of Shares of a particular Series or Class,
together with all assets in which such consideration is invested or
reinvested, all income, earnings, profits, and proceeds thereof from
whatever source derived, including, without limitation, any proceeds
derived from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to that Series or
Class for all purposes, subject only to the rights of creditors, and shall
be so recorded upon the books of account of the Trust. Such consideration,
assets, income, earnings, profits and proceeds thereof, from whatever
source derived, including, without limitation, any proceeds derived from
the sale, exchange or liquidation of such assets, and any funds or
payments derived from any reinvestment of such proceeds, in whatever form
the same may be, are herein referred to as "assets belonging to" that
Series or Class. In the event that there are any assets, income, earnings,
profits and proceeds thereof, funds or payments which are not readily
identifiable as belonging to any particular Series or Class (collectively
"General Assets"), the Trustees shall allocate such General Assets to,
between or among any one or more of the Series or Classes established and
designated from time to time in such manner and on such basis as they, in
their sole discretion, deem fair and equitable, and any General Assets so
allocated to a particular Series or Class shall belong to that Series or
Class. Each such allocation by the Trustees shall be conclusive and
binding upon the Shareholders of all Series or Classes for all purposes.
(b) LIABILITIES BELONGING TO SERIES OR CLASS. The assets belonging to each
particular Series or Class shall be charged with the liabilities of the
Trust in respect to that Series or Class and all expenses, costs, charges
and reserves attributable to that Series or Class, and any general
liabilities of the Trust which are not readily identifiable as belonging
to any particular Series or Class shall be allocated and charged by the
Trustees to and among any one or more of the Series or Classes established
and designated from time to time in such manner and on such basis as the
Trustees in their sole discretion deem fair and equitable. The
liabilities, expenses, costs, charges and reserves so charged to a Series
or Class are herein referred to as "liabilities belonging to" that Series
or Class. Each allocation of liabilities belonging to a Series or class by
the Trustees shall be conclusive and binding upon the Shareholders of all
Series or Classes for all purposes.
(c) DIVIDENDS, DISTRIBUTIONS, REDEMPTIONS, REPURCHASES AND
INDEMNIFICATION. Notwithstanding any other provisions of this Declaration,
including, without limitation, Article X, no dividend or distribution
(including, without limitation, any distribution paid upon termination of
the Trust or of any Series or Class) with respect to, nor any redemption
or repurchase of the Shares of any Series or Class shall be effected by
the Trust other than from the assets belonging to such Series or Class,
nor except as specifically provided in Section 1 of Article XI hereof,
shall any Shareholder of any particular Series or Class otherwise have any
right or claim against the assets belonging to any other Series or Class
except to the extent that such Shareholder has such a right or claim
hereunder as a Shareholder of such other Series or Class.
(d) VOTING. Notwithstanding any of the other provisions of this
Declaration, including, without limitation, Section 1 of Article VIII,
only Shareholders of a particular Series or Class shall be entitled to
vote on any matters affecting such Series or Class. Except with respect to
matters as to which any particular Series or Class is affected, all of the
Shares of each Series or Class shall, on matters as to which such Series
or Class is entitled to vote, vote with other Series or Classes so
entitled as a single class. Notwithstanding the foregoing, with respect to
matters which would otherwise be voted on by two or more Series or Classes
as a single class, the Trustees may, in their sole discretion, submit such
matters to the Shareholders of any or all such Series or Classes,
separately.
(e) FRACTION. Any fractional Share of a Series or Class shall carry
proportionately all the rights and obligations of a whole Share of that
Series or Class, including rights with respect to voting, receipt of
dividends and distributions, redemption of Shares and termination of the
Trust or of any Series or Class.
(f) EXCHANGE PRIVILEGE. The Trustees shall have the authority to provide
that the holders of Shares of any Series or Class shall have the right to
exchange said Shares for Shares of one or more other Series or Classes in
accordance with such requirements and procedures as may be established by
the Trustees.
(g) COMBINATION OF SERIES OR CLASSES. The Trustees shall have the
authority, without the approval of the Shareholders of any Series or
Class, unless otherwise required by applicable law, to combine the assets
and liabilities belonging to a single Series or Class with the assets and
liabilities of one or more other Series or Classes.
(h) ELIMINATION OF SERIES OR CLASSES. At any time that there are no Shares
outstanding of any particular Series or Class previously established and
designated, the Trustees may amend this Declaration of Trust to abolish
that Series or Class and to rescind the establishment and designation
thereof.
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
desirable to carry out that responsibility. The Trustees who shall serve until
the election of Trustees at the Meeting of Shareholders subsequent to the
initial public offering of Shares shall be John F. Donahue, John T. Conroy, Jr.,
William J. Copeland, James E. Dowd, Lawrence D. Ellis, M.D., Edward L. Flaherty,
Jr., Peter E. Madden, John E. Murray, Jr., Wesley W. Posvar, and Marjorie P.
Smuts.
SECTION 2. ELECTION OF TRUSTEES AT MEETING OF SHAREHOLDERS.
On a date fixed by the Trustees, which shall be subsequent to the initial
public offering of Shares, 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 office at any time 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 such other person as they in
their discretion shall see fit. Such appointment 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 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
exeeding six months at any one time to any other Trustee or Trustees, provided
that in no case shall fewer 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 ASSETS.
The assets belonging to each Series or Class 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
belonging to each Series or Class or owned by the Trust shall at all times be
considered as vested in the Trustees. No Shareholder shall be deemed to have a
severable ownership interest in any individual asset belonging to any Series or
Class or owned by the Trust or any right of partition or possession thereof, but
each Shareholder shall have a proportionate undivided beneficial interest in a
Series or Class.
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 or a Series or Class. 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, options, certificates of
beneficial interest, money market instruments, notes or other evidences of
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 to retain assets belonging to each and every Series or
Class in cash, and from time to time to change the investments of the
assets belonging to each Series or Class;
(b) To adopt By-Laws of the Trust 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 of the Trust and appoint and
terminate such agents of the Trust as they consider appropriate;
(d) To appoint or otherwise engage a bank or trust company as custodian of
any assets belonging to any Series or Class 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 any Shares of any Series or Class
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 belonging to one or more
Series or Classes, 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 belongs to any Series or Class; 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 which
belongs to any Series or Class;
(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 belonging to any Series or Class to pay, or to satisfy, any
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 meed
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 less of the dollar amounts borrowed or 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 any Series or Class
either for cash or for property whenever and in such amounts as the
Trustees 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 dealing with the Trustees shall be under any obligation to made an
inquiry concerning the authority of the Trustees, or to see the
application of any payments made or property transferred to the Trustees
or upon their order. The Trustees shall have all of the powers set forth
in this Section 1 with respect to all assets and liabilities of each
Series and Class.
SECTION 2. PRINCIPAL TRANSACTIONS.
The Trustees shall not cause the Trust on behalf of any Series or Class to
buy any securities (other than Shares) from or sell any securities (other than
Shares) to, or lend any assets belonging to any Series or Class 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 or any Series or Class
may acquire, own and dispose of Shares of any Series or Class 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 any Series or Class 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 any Series or Class 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 or any Series or Class 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, or 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 assets belonging to each
particular Series or Class for all their expenses and disbursements as such
expenses are allocated to and among any one or more of the Series or Classes
pursuant to Article III, Section 5(b), including, without limitation, expenses
of organizing the Trust or any Series or Class and continuing its or their
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 Registration Statements under the Securities Act of 1933
and the 1940 Act and any amendments thereto; expenses of registering and
qualifying the Trust and any Series or Class and the Shares of any Series or
Class under federal and state laws and regulations; expenses of preparing,
printing and distributing prospectuses and any amendments thereto 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 or any Series or Class as a broker-dealer and of its
or their officers as agents and salesmen under federal and state laws and
regulations; interest expenses, taxes, fees and commissions of every kind;
expenses of issue (including cost of share certificates), purchases, repurchases
and redemptions 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 incurred in administering the Trust and any Series or Class, 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 on the assets belonging to each Series or Class prior to any
rights or interests of the Shareholders of any Series or Class. 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 from the
assets belonging to any Series or Class 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 out of the assets
belonging to any Series or Class any Trustee or any corporation, firm, trust or
other entity of which a Trustee is an interested person for services rendered in
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 by the relevant Series or Class,
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 for such Series or Class upon
such terms and conditions and for such compensation as the Trustees may in their
discretion determine. Subject to a Majority Shareholder Vote by the relevant
Series or Class, 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 for such Series or Class upon such terms and
conditions and for 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 instructions as the Trustees
may from time to time adopt) to effect purchases, sales or exchanges of
portfolio securities belonging to a Series or Class 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 a Series or Class 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
or a Series or Class on a daily basis, 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 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 a Series or Class to net such Series or Class not less than the amount
provided in Article III, Section 3 hereof, whereby a Series or Class 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 a Series or Class 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 a
Series or Class.
<PAGE>
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 a 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 Section 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.
Subject to the provisions set forth in Article III, Section 5(d), 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 or 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 of a Series or Class are issued, the
Trustees may exercise all rights of Shareholders of such Series or Class with
respect to matters affecting such Series or Class, and may take any action with
respect to the Trust or such Series or Class 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 of all Series and Classes 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
outstanding Shares of all Series and Classes entitled to vote at such meeting.
When any one or more Series or Classes is entitled to vote as a single Series or
Class, one-fourth of the shares of each such Series or Class entitled to vote
shall constitute a quorum at a Shareholder's meeting of that Series or Class. If
a quorum, as defined above, 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 by 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 cast 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
meetings 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 any Series or Class and
to deliver the same upon written order;
(2) To receive and receipt for any moneys due to the Trust or any Series
or Class thereof and deposit the same in its own banking department or
elsewhere as the Trustees may direct;
(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; and
(5) To compute, if authorized to do so by the Trustees, the Accumulated
Net Income of the Trust or any Series or Class thereof 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 or any Series or Class
thereof held by it as specified in such vote.
The Trustees may also authorize the custoidan 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 or any Series or Class thereof 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 to the
Shareholders of any Series or Class, 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
devined 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 any Series or Class to qualify 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 any Series or Class 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 any Series or Class.
(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 dvidend consisting of
Shares of the Trust.
(g) All dividends and distributions on Shares of a particular Series or
Class shall be distributed pro rata to the holders of that Series or Class
in proportion to the number of Shares of that Series or Class held by such
holders and recorded on the books of the Trust or its transfer agent at
the date and time of record established for that payment.
<PAGE>
SECTION 2. REDEMPTIONS AND REPURCHASES.
(a) In case any Shareholder of record of any Series or Class at any time
desires to dispose of Shares of such Series or Class 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 Shares out of assets belonging to such Series or Class. The purchase
price shall be the net asset value of his shares reduced by any redemption
charge as the Trustees from time to time may determine.
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 (reduced by any redemption charge)
and payment therefor shall be made within seven days thereafter.
(b) The Trust may purchase Shares of a Series or Class by agreement with
the owner thereof (1) at a price not exceeding the net asset value per
Share (reduced by any redemption charge) 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 or times 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, to the custodian, or to a
transfer agent.
<PAGE>
SECTION 4. NET ASSET VALUE OF SHARES.
The net asset value of each Share of a Series or Class 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, to the custodian, or to a transfer agent.
The net asset value of each Share of a Series or Class 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 belonging to such Series
or Class (i.e., the value of the assets belonging to such Series or Class less
the liabilities belonging to such Series or Class exclusive of capital and
surplus) by the total number of Shares outstanding of the Series or Class
(exclusive of treasury Shares) at such time in accordance with the requirements
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 of any
Series or Class in any Shareholder's account for their then current net asset
value (which will be promptly paid to the Shareholder in cash) (which payment
may be reduced by any applicable redemption charge), 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 any Series or
Class are redeemable at the option of the Trust if, in the opinion of the
Trustees, ownership of Shares has or may become concentrated to an extent which
would cause any Series or Class 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 of any Series or Class personally or to call upon
such 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 any Series or Class 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 of any kind, against, or with respect to the Trust or any Series or
Class arising out of any action taken or omitted for or on behalf of the Trust
or such Series or Class, and the Trust or such Series or Class shall be solely
liable therefor and resort shall be had solely to the property of the relevant
Series or Class of the Trust for the payment or performance thereof.
Each Shareholder or former Shareholder of any Series or Class (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 such Series or Class shall be held to be
personally liable. Such indemnification and reimbursement shall come exclusively
from the assets of the relevant Series or Class.
The Trust shall, upon request by a Shareholder or former Shareholder,
assume the defense of any claim made against any Shareholder for any act or
obligation of the Trust or any Series or Class and satisfy any judgment thereon.
SECTION 2. LIMITATION OF PERSONAL LIABILITY OF TRUSTEES, OFFICERS,
EMPLOYEES OR AGENTS OF THE TRUST.
No Trustee, 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, invetment 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
wuld 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 or any Series or Class shall be informed that the
property of the Shareholders and the Trustees, officers, employees and agents of
the Trust or any Series or Class shall not be subject to claims against or
obligations of the Trust or any other Series or Class to any extent whatsoever.
The Trustees shall cause to be inserted in any written agreement, undertaking or
obligation made or issued on behalf of the Trust or any Series or Class
(including certificates for Shares of any Series or Class) an appropriate
reference to the provisions of this Declaration, providing that neither the
Shareholders, the Trustees, the officers, the employees nor any agent of the
Trust or any Series or Class shall be liable thereunder, and that the other
parties to such instrument shall look solely to the assets belonging to the
relevant Series or Class 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 or
any Series or Class 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 indemnified and reimbursed 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
obligaiton 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, invetigative 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 Sharesholders
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 Trustees, 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 a 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 discretions 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
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 maintained
with respect to any Series or Class for a period not exceeding sixty (60) days
preceding the date of any meeting of Shareholders of the Trust or any Series or
Class, 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 of any Series or Class
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 of the Trust or any Series or
Class, or the date for the payment of any dividend or the making of any
distribution to Shareholders of any Series or Class, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
Shares of any Series or Class shall go into effect, or the last day on which the
consent or dissent of Shareholders of any Series or Class 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 Shareholders and
only such Shareholders 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
aforesiad, maintained with respect to any Series or Class. Nothing in the
foregoing sentence shall be construed as precluding the Trustees from setting
different record dates for different Series or Classes.
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 a majority 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 an investment company as defined in
the 1940 Act, for an adequate consideration which may include assumption
of all outstanding obligations 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 by such Series or Class, the
Trustees may at any time sell and convert into money all the assets of the
Trust or any Series or Class. Upon making provision for the payment of all
outstanding obligations, taxes and other liabilities, accrued or
contingent, belonging to each Series or Class, the Trustees shall
distribute the remaining assets belonging to each Series or Class ratably
among the holders of the outstanding Shares of that Series or Class.
(d) Upon completion of the distribution of the remaining proceeds of the
remaining assets as provided in paragraphs (b) and (c), the Trust or the
applicable Series or Class shall terminate and the Trustees shall be
discharged of any and all further liabilities and duties hereunder or with
respect thereto and the right, title and interest of all parties shall be
canceled and discharged.
SECTION 5. OFFICES OF THE TRUST, FILING OF COPIES, REFERENCES, HEADINGS.
The Trust shall maintain a usual place of business in Massachusetts,
which, initially, shall be c/o Donnelly, Conroy, Gelhaar, One Post Office
Square, Boston, Massachusetts, 02109-2105, 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" or
"hereunder," shall be deemed to refer to this instrument as amended or affected
by any 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 -- GENERAL.
Prior to the initial issuance of Shares pursuant to 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, amendments or supplements to this instrument may be authorized by a
majority of the Trustees then in office and by the holders of a majority of the
Shares of all Series and classes then outstanding and entitled to vote thereon
or by any larger vote which may be required by applicable law or this
Declaration of Trust in any particular case, which thereafter shall form a part
hereof. Any such supplement Declaration of Trust shall be signed by at least a
majority of the Trustees then in office. Copies of the supplemental Declaration
of Trust or the certificate of the President and Secretary, as the case may be,
shall be filed as specified in Section 5 of this Article XII.
SECTION 8. AMENDMENTS -- SERIES AND CLASSES.
The establishment and designation of any Series or Class of Shares in
addition to those established and designated in Section 5 of Article III hereof
shall be effective upon the execution by a majority of the then Trustees of an
amendment to this Declaration of Trust, taking the form of a complete
restatement or otherwise, setting forth such establishment and designation and
the relative rights and preferences of any such Series or Class, or as otherwise
provided in such instrument.
Without limiting the generality of the foregoing, the Declaration of the
Trust may be amended to:
(a) create one or more Series or Classes of Shares (in addition to any
Series or Classes already existing or otherwise) with such rights and
preferences and such eligibility requirements for investment therein as
the Trustees shall determine and reclassify any or all outstanding Shares
as Shares of particular Series or Classes in accordance with such
eligibility requirements;
(b) combine two or more Series or Classes of Shares into a single Series
or Class on such terms and conditions as the Trustees shall determine;
(c) change or eliminate any eligibility requirements for investment in
Shares of any Series or Class, including without limitation the power to
provide for the issue of Shares of any Series or Class in connection with
any merger or consolidation of the Trust with another trust or company or
any acquisition by the Trust of part or all of the assets of another trust
or company;
(d) change the designation of any Series or Class of Shares;
(e) change the method of allocating dividends among the various Series and
Classes of Shares;
(f) allocate any specific assets or liabilities of the Trust or any
specific items of income or expense of the Trust to one or more Series and
Classes of Shares;
(g) specifically allocate assets to any or all Series or Classes of Shares
or create one or more additional Series or Classes of Shares which are
preferred over all other Series or Classes of Shares in respect of assets
specifically allocated thereto or any dividends paid by the Trust with
respect to any net income, however determined, earned from the investment
and reinvestment of any assets so allocated or otherwise and provide for
any special voting or other rights with respect to such Series or Classes.
<PAGE>
SECTION 9. USE OF NAME.
The Trust acknowledges 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 company portfolio, investment adviser,
distributor, or other business enterprise, and to withdraw from the Trust or one
or more Series or Classes any right to 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/ LAWRENCE D. ELLIS, M.D.
John F. Donahue Lawrence D. Ellis, M.D.
/S/ THOMAS G. BIGLEY /S/ EDWARD L. FLAHERTY, JR.
Thomas G. Bigley Edward L. Flaherty, Jr.
/S/ JOHN T. CONROY, JR. /S/ PETER E. MADDEN
John T. Conroy, Jr. Peter E. Madden
/S/ WILLIAM J. COPELAND /S/ JOHN E. MURRAY, JR.
William J. Copeland John E. Murray, Jr.
/S/ JAMES E. DOWD /S/ WESLEY W. POSVAR
James E. Dowd Wesley W. Posvar
/S/ MARJORIE P. SMUTS
Marjorie P. Smuts
<PAGE>
COMMONWEALTH OF PENNSYLVANIA )
: ss:
COUNTY OF ALLEGHENY )
I hereby certify that on December 16, 1997, before me, the subscriber, a
Notary Public of the Commonwealth of Pennsylvania, in for the County of
Allegheny, personally appeared JOHN F. DONAHUE, THOMAS G. BIGLEY, JOHN T.
CONROY, JR., WILLIAM J. COPELAND, JAMES E. DOWD, LAWRENCE D. ELLIS, M.D., EDWARD
L. FLAHERTY, JR., PETER E. MADDEN, WESLEY W. POSVAR, and MARJORIE P. SMUTS who
acknowledged the foregoing Declaration of Trust to be their act.
Witness my hand and notarial seal the day and year above written.
/S/ NANCY H. BEATTY
Notary Public
Exhibit (b) under Form N-1A
Exhibit 3(ii) under Item 601/Reg. S-K
FEDERATED STOCK TRUST
AMENDED & RESTATED BY-LAWS
DATED DECEMBER 16, 1997
TABLE OF CONTENTS
PAGE
ARTICLE I: OFFICERS AND THEIR ELECTION..............................1
Section 1 Officers.................................................1
Section 2 Election of Officers.....................................1
Section 3 Resignations and Removals and Vacancies..................1
ARTICLE II: POWERS AND DUTIES OF TRUSTEES AND OFFICERS.................1
Section 1 Trustees.................................................1
Section 2 Chairman of the Trustees ("Chairman") ...................1
Section 3 President ...............................................1
Section 4 Vice President ..........................................2
Section 5 Secretary ...............................................2
Section 6 Treasurer ...............................................2
Section 7 Assistant Vice President ................................2
Section 8 Assistant Secretaries and Assistant Treasurers ..........2
Section 9 Salaries ................................................2
ARTICLE III: POWERS AND DUTIES OF THE EXECUTIVE AND OTHER COMMITTEES..3
Section 1 Executive and Other Committees ..........................3
Section 2 Vacancies in Executive Committee ........................3
Section 3 Executive Committee to Report to Trustees................3
Section 4 Procedure of Executive Committee ........................3
Section 5 Powers of Executive Committee ...........................3
Section 6 Compensation ............................................3
Section 7 Action by Consent of the Board of Trustees, Executive
Committee or Other Committee 3
ARTICLE IV: SHAREHOLDERS' MEETINGS...................................4
Section 1 Special Meetings ........................................4
Section 2 Notices .................................................4
Section 3 Place of Meeting ........................................4
Section 4 Action by Consent .......................................4
Section 5 Proxies .................................................4
<PAGE>
PAGE
ARTICLE V: TRUSTEES' MEETINGS.......................................4
Section 1 Number and Qualifications of Trustees ...................4
Section 2 Special Meetings ........................................5
Section 3 Regular Meetings ........................................5
Section 4 Quorum and Vote .........................................5
Section 5 Notices .................................................5
Section 6 Place of Meeting ........................................5
Section 7 Teleconference Meetings; Action by Consent ..............5
Section 8 Special Action ..........................................5
Section 9 Compensation of Trustees ................................6
ARTICLE VI: SHARES...................................................6
Section 1 Certificates ............................................6
Section 2 Transfer of Shares ......................................6
Section 3 Equitable Interest Not Recognized .......................6
Section 4 Lost, Destroyed or Mutilated Certificates................6
Section 5 Transfer Agent and Registrar: Regulations................7
ARTICLE VII: INSPECTION OF BOOKS......................................7
ARTICLE VIII: AGREEMENTS, CHECKS, DRAFTS,
ENDORSEMENTS, ETC........................................7
Section 1 Agreements, Etc .........................................7
Section 2 Checks, Drafts, Etc .....................................7
Section 3 Endorsements, Assignments and Transfer of Securities ....7
Section 4 Evidence of Authority ...................................8
ARTICLE IX: INDEMNIFICATION OF TRUSTEES AND OFFICERS.................8
Section 1 General .................................................8
Section 2 Compromise Payment ......................................8
Section 3 Indemnification Not Exclusive; Definitions ..............8
ARTICLE X: SEAL.....................................................9
ARTICLE XI: FISCAL YEAR..............................................9
ARTICLE XII: AMENDMENTS...............................................9
ARTICLE XIII: WAIVERS OF NOTICE........................................9
ARTICLE XIV: REPORT TO SHAREHOLDERS...................................9
ARTICLE XV: BOOKS AND RECORDS........................................10
ARTICLE XVI: TERMS....................................................10
<PAGE>
FEDERATED STOCK TRUST
AMENDED & RESTATED BY-LAWS
DATED DECEMBER 16, 1997
ARTICLE I
OFFICERS AND THEIR ELECTION
Section 1. OFFICERS. The officers of the Trust shall be elected by the
Board of Trustees, and shall be a President, one or more Vice Presidents, a
Treasurer, a Secretary and such other officers as the Trustees may from time to
time elect. The Board of Trustees, in its discretion, may also elect a Chairman
of the Board of Trustees (who must be a Trustee). It shall not be necessary for
any Trustee or other officer to be a holder of shares in any Series or Class of
the Trust.
Section 2. ELECTION OF OFFICERS. The President, Vice President(s),
Treasurer and Secretary shall be elected annually by the Trustees, and serve
until a successor is so elected and qualified, or until earlier resignation or
removal. The Chairman of the Trustees,if there is one, shall be elected annually
by and from the Trustees, and serve until a successor is so elected and
qualified, or until earlier resignation or removal.
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 elected and qualified.
Section 3. RESIGNATIONS AND REMOVALS AND VACANCIES. Any officer of the
Trust may resign by filing a written resignation with the President (or
Chairman, if there is one) 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, subject to
the limitations of the Investment Company Act of 1940.
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, if there
be a Chairman, shall preside at the meetings of Shareholders and of the Board of
Trustees. 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. The Chairman
shall appoint a Trustee or officer to preside at such meetings in his absence.
Section 3. PRESIDENT. The President shall be the chief executive officer
of the Trust. The President, in the absence of the Chairman, or if there is no
Chairman, shall perform all duties and may exercise any of the powers of the
Chairman subject to the control of the Trustees. He shall counsel and advise the
Chairman and shall perform such other duties as may be assigned to him from time
to time by the Trustees, the Chairman or the Executive Committee. The President
shall have the power to appoint one or more Assistant Secretaries or other
junior officers, subject to ratification of such appointments by the Board. The
President shall have the power to sign, in the name of and on behalf of the
Trust, powers of attorney, proxies, waivers of notice of meeting, consents and
other instruments relating to securities or other property owned by the Trust,
and may, in the name of and on behalf of the Trust, take all such action as the
President may deem advisable in entering into agreements to purchase securities
or other property in the ordinary course of business, and to sign representation
letters in the course of buying securities or other property.
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, the President,
or the Executive Committee. Each Vice President shall be authorized to sign
documents on behalf of the Trust. The Vice President shall have the power to
sign, in the name of and on behalf of the Trust and subject to Article VIII,
Section 1, powers of attorney, proxies, waivers of notice of meeting, consents
and other instruments relating to securities or other property owned by the
Trust, and may, in the name of and on behalf of the Trust, take all such action
as the Vice President may deem advisable in entering into agreements to purchase
securities or other property in the ordinary course of business, and to sign
representation letters in the course of buying securities or other property.
Section 5. SECRETARY. The Secretary shall keep or cause to be kept in
books provided for that 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 (if there be a Seal) 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 the post office address of each shareholder of each Series
or Class of the Trust, and make all proper changes in such register, retaining
and filing his authority for such entries; shall see that the books, reports,
statements, certificates and all other documents and records required by law are
properly kept and filed; and in general shall perform all duties incident to the
Office of Secretary and such other duties as may from time to time be assigned
to him by the Trustees, Chairman, the President, or the Executive Committee.
Section 6. TREASURER. The Treasurer shall be the principal financial and
accounting officer of the Trust responsible for the preparation and maintenance
of the financial books and records of the Trust. He shall deliver all funds and
securities belonging to any Series or Class to such custodian or sub-custodian
as may be employed by the Trust for any Series or Class. The Treasurer shall
perform such duties additional to the foregoing as the Trustees, Chairman, the
President or the Executive Committee may from time to time designate.
Section 7. ASSISTANT VICE PRESIDENT. The Assistant Vice President 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, the President, 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, the President, 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.
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. Any committee may make rules for the conduct of its business.
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 to be in the best interests of the Trust, and
shall have power to authorize the Seal of the Trust (if there is one) to be
affixed to all instruments and documents requiring same. Notwithstanding the
foregoing, the Executive Committee shall not have the power to elect or remove
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. ACTION BY CONSENT OF THE BOARD OF TRUSTEES, EXECUTIVE COMMITTEE
OR OTHER COMMITTEE. Subject to Article V, Section 2 of these By-Laws, any action
required or permitted to be taken at any meeting of the Trustees, Executive
Committee or any other duly appointed Committee may be taken without a meeting
if consents in writing setting forth such action are signed by all members of
the Board or such committee and such consents are filed with the records of the
Trust. In the event of the death, removal, resignation or incapacity of any
Board or committee member prior to that Trustee signing such consent, the
remaining Board or committee members may re-constitute themselves as the entire
Board or committee until such time as the vacancy is filled in order to fulfill
the requirement that such consents be signed by all members of the Board or
committee.
ARTICLE IV
SHAREHOLDERS' MEETINGS
Section 1. SPECIAL MEETINGS. A special meeting of the shareholders of the
Trust or of a particular Series or Class 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 of the Trust
or of the relevant Series or Class, 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 name of the Secretary, call the meeting by giving notice thereof 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 of the Trust or a particular Series or Class, 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 seven business days before the meeting, to such
address as may be registered with the Trust by the shareholder. No notice of any
meeting to shareholders need be given to a shareholder if a written waiver of
notice, executed before or after the meeting by such shareholder or his or her
attorney that is duly authorized, is filed with the records of the meeting.
Notice may be waived as provided in Article XIII of these By-Laws.
Section 3. PLACE OF MEETING. Meetings of the shareholders of the Trust or
a particular Series or Class, 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 a majority of 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, by telephone, by electronic means
including facsimile, or by proxy. Every written proxy shall be 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 and verified by the
Secretary or an Assistant Secretary of the Trust or, the person acting as
Secretary of the Meeting.
ARTICLE V
TRUSTEES' MEETINGS
Section 1. NUMBER AND QUALIFICATIONS OF TRUSTEES. The number of Trustees
can be changed from time to time by a majority of the Trustees to not less than
three nor more than twenty. 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. Each Trustee shall hold office for the life of
the Trust, or as otherwise provided in the Declaration of Trust.
Section 2. SPECIAL MEETINGS. Special meetings of the Trustees shall be
called by the Secretary at the written request of the Chairman, the President,
or any Trustee, and if the Secretary when so requested refuses or fails for more
than twenty-four hours to call such meeting, the Chairman, the President, 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. The Secretary or any Assistant Secretary shall give,
at least two days before the meeting, notice of each meeting of the Board of
Trustees, whether Annual, Regular or Special, to each member of the Board by
mail, telegram, telephone or electronic facsimile to his last known address. It
shall not be necessary to state the purpose or business to be transacted in the
notice of any meeting unless otherwise required by law. Personal attendance at
any meeting by a Trustee other than to protest the validity of said meeting
shall constitute a waiver of the foregoing requirement of notice. In addition,
notice of a meeting need not be given if a written waiver of notice executed by
such Trustee before or after the meeting is filed with the records of the
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. TELECONFERENCE MEETINGS; ACTION BY CONSENT. Except as otherwise
provided herein or from time to time in the 1940 Act or in the Declaration of
Trust, any action to be taken by the Trustees may be taken by a majority of the
Trustees within or without Massachusetts, including any meeting held by means of
a conference telephone or other communications equipment by means of which all
persons participating in the meeting can communicate with each other
simultaneously, and participation by such means shall constitute presence in
person at a meeting. 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.Written consents may be executed in counterparts,
which when taken together, constitute a validly executed consent of the
Trustees.
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. 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
Section 1. CERTIFICATES. If certificates for shares are issued, 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, if the Trust has a
seal. The signatures may be either manual or facsimile signatures and the seal,
if there is one, 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 of each Series or Class 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 2. TRANSFER OF SHARES. The shares of each Series and Class of the
Trust shall be transferable, so as to affect the rights of the Trust or any
Series or Class, only by transfer recorded on the books of the Trust or its
transfer agent, in person or by attorney.
Section 3. EQUITABLE INTEREST NOT RECOGNIZED. The Trust shall be entitled
to treat the holder of record of any share or shares of a Series or Class as the
absolute owner thereof and shall not be bound to recognize any equitable or
other claim or interest in such share or shares of a Series or Class on the part
of any other person except as may be otherwise expressly provided by law.
Section 4. 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 relevant Series or Class
against loss and upon such other terms and conditions as the Trustees may deem
advisable.
Section 5. 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 of each Series or Class, 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 at what times and places, and under what conditions and regulations the
accounts and books of the Trust maintained on behalf of each Series and Class or
any of them shall be open to the inspection of the shareholders of any Series or
Class; and no shareholder shall have any right of inspecting any account or book
or document of the Trust except that, to the extent such account or book or
document relates to the Series or Class in which he is a Shareholder or the
Trust generally, such Shareholder shall have such right of inspection as
conferred by laws or authorized by the Trustees or by resolution of the
Shareholders of the relevant Series or Class.
ARTICLE VIII
AGREEMENTS, CHECKS, DRAFTS, ENDORSEMENTS, ETC.
Section 1. AGREEMENTS, ETC. The Trustees or the Executive Committee may
authorize any Officer or Agent of the Trust to enter into any Agreement or
execute and deliver any instrument in the name of the Trust on behalf of any
Series or Class, and such authority may be general or confined to specific
instances; and, unless so authorized by the Trustees or by the Executive
Committee or by the Declaration of Trust or 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 for 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 Officers, Employees, 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 on behalf of any Series or Class and the
custodian appointed, pursuant to the provisions of the Declaration of Trust.
Section 3. ENDORSEMENTS, ASSIGNMENTS AND TRANSFER OF SECURITIES. All
endorsements, assignments, stock powers, other instruments of transfer or
directions for the transfer of portfolio securities or other property, whether
or not registered in nominee form, shall be made by such Officers, Employees, or
Agents 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
INDEMNIFICATION OF TRUSTEES AND OFFICERS
Section 1. GENERAL. The Trust shall indemnify each of its Trustees and
officers (including persons who serve at the Trust's request as directors,
officers or trustees of another organization in which the Trust has any interest
as a shareholder, creditor or otherwise) (hereinafter referred to as a "Covered
Person") against all liabilities and expenses, including but not limited to
amounts paid in satisfaction of judgments, in compromise or as fines and
penalties, and counsel fees reasonably incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil, criminal, administrative, or investigative, and any
appeal therefrom, before any court or administrative or legislative body, in
which such Covered Person may be or may have been involved as a party or
otherwise or with which such person may be or may have been threatened, while in
office or thereafter, by reason of being or having been such a Covered Person,
except that no Covered Person shall be indemnified against any liability to the
Trust or its Shareholders to which such Covered Person would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such Covered
Person's office.
Expenses, including counsel fees so incurred by any such Covered Person
(but excluding amounts paid in satisfaction of judgments, in compromise or as
fines or penalities), may be paid from time to time by the Trust in advance of
the final disposition of any such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Covered Person to repay amounts so paid to
the Trust if it is ultimately determined that indemnification of such expenses
is not authorized under this Article, provided that (a) such Covered Person
shall provide security for his undertaking, (b) the Trust shall be insured
against losses arising by reason of such Covered Person's failure to fulfill his
undertaking or (c) a majority of the non-party Trustees who are not interested
persons of the Trust (provided that a majority of such Trustees then in office
act on the matter), or independent legal counsel in a written opinion, shall
determine, based on a review of readily available facts (but not a full
trial-type inquiry), that there is reason to believe such Covered Person
ultimately will be entitled to indemnification.
Section 2. COMPROMISE PAYMENT. As to any matter disposed of (whether by a
compromise payment, pursuant to a consent decree or otherwise) without an
adjudication in a decision on the merits by a court, or by any other body before
which the proceeding was brought, that such Covered Person is liable to the
Trust or its Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disreagrd of the duties involved in the conduct of such
Covered Person's office, indemnification shall be provided if (a) approved as in
the best interest of the Trust, after notice that it involves such
indemnification, by at least a majority of non-party Trustees who are not
interested persons of the Trust (provided that a majority of such Trustees then
in office act on the matter), upon a determination, based upon a review of
readily available facts (but not a full trial-type inquiry) that such Covered
Person is not liable 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 such Covered Person's office, or (b) there has been
obtained an opinion in writing of independent legal counsel, based upon a review
of readily available facts (but not a full trial-type inquiry) to the effect
that such indemnification would not protect such Covered Person against any
liability to the Trust to which such Covered Person would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office.
Any approval pursuant to this Section shall not prevent the recovery from
any Covered Person of any amount paid to such Covered Person in accordance with
this Section as indemnification if such Covered Person is subsequently
adjudicated by a court of competent jurisdiction to have been liabile to the
Trust or its Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved inthe conduct of such
Covered Person's office.
Section 3. INDEMNIFICATION NOT EXCLUSIVE; DEFINITIONS. The right of
indemnification hereby provided shall not be exclusive of or affect any other
rights to which any such Covered Person may be entitled. As used in this Article
IX, the term "Covered Person" shall include such person's heirs, executors and
administrators. For purposes of this Article IX, the term "non-party Trustee" is
a Trustee against whom none of the actions, suits or other proceedings in
question or another action, suit or other proceeding on the same or similar
grounds is then or has been pending. Nothing contained in this Article IX shall
affect any rights to indemnification to which personnel of the Trust, other than
Trustees and officers, and other persons may be entitled by contract or
otherwise under law, nor the power of the Trust to purchase and maintain
liability insurance on behalf of such persons.
ARTICLE X
SEAL
The seal of the Trust, if there is one, shall consist either of a
flat-faced die with the word "Massachusetts", together with the name of the
Trust and the year of its organization cut or engraved thereon, or any other
indication that the Trust has a seal that has been approved by the Trustees,
but, unless otherwise required by the Trustees, the seal shall not be necessary
to be placed on, and its absence shall not impair the validity of, any document,
instrument or other paper executed and delivered by or on behalf of the Trust.
ARTICLE XI
FISCAL YEAR
The fiscal year of the Trust and each Series or Class shall be as
designated from time to time by the Trustees.
ARTICLE XII
AMENDMENTS
These By-Laws may be amended by a majority vote of all of the Trustees.
ARTICLE XIII
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 provisons 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, or presence at a meeting to which such person was entitled
notice of, 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, cabled, 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 XIV
REPORT TO SHAREHOLDERS
The Trustees, so long as required by applicable law, shall at least
semi-annually submit to the shareholders of each Series or Class a written
financial report of the transactions of that Series or Class including financial
statements which shall at least annually be certified by independent public
accountants.
ARTICLE XV
BOOKS AND RECORDS
The books and records of the Trust and any Series or Class, 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 from time to time be
determined by the Secretary of the Trust, as set forth in Article II, Section 5
of these By-Laws.
ARTICLE XVI
TERMS
Terms defined in the Declaration of Trust and not otherwise defined herein
are used herein with the meanings set forth or referred to in the Declaration of
Trust.
Exhibit (b)(i) under Form N-1A
Exhibit 3(ii) under Item 601/Reg. S-K
FEDERATED STOCK TRUST
AMENDMENT #6
TO THE BY-LAWS
(EFFECTIVE FEBRUARY 23, 1998)
Delete Sections 1, 2 and 3 of Article I, OFFICERS AND THEIR ELECTION, and
replace with:
Section 1. OFFICERS. The Officers of the Trust shall be a President, one
or more Vice Presidents, a Treasurer, and a Secretary. The Board of
Trustees, in its discretion, may also elect or appoint a Chairman of the
Board of Trustees (who must be a Trustee) and other Officers or agents,
including one or more Assistant Vice Presidents, one or more Assistant
Secretaries, and one or more Assistant Treasurers. A Vice President, the
Secretary or the Treasurer may appoint an Assistant Vice President, an
Assistant Secretary or an Assistant Treasurer, respectively, to serve
until the next election of Officers. Two or more offices may be held by a
single person except the offices of President and Vice President may not
be held by the same person concurrently. It shall not be necessary for any
Trustee or any Officer to be a holder of shares in any Series or Class of
the Trust.
Section 2. ELECTION OF OFFICERS. The Officers shall be elected annually by
the Trustees. Each Officer shall hold office for one year and until the
election and qualification of his successor, or until earlier resignation
or removal. The Chairman of the Board of Trustees, if there is one, shall
be elected annually by and from the Trustees, and serve until a successor
is so elected and qualified, or until earlier resignation or removal.
Section 3. RESIGNATIONS AND REMOVALS AND VACANCIES. Any Officer of the
Trust may resign at any time by filing a written resignation with the
Board of Trustees (or Chairman of the Trustees, if there is one), with the
President, or with the Secretary. Any such resignation shall take effect
at the time specified therein or, if no time is specified, at the time of
receipt. Unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective. Any Officer
elected by the Board of Trustees or whose appointment has been ratified by
the Board of Trustees may be removed with or without cause at any time by
a majority vote of all of the Trustees. Any other employee of the Trust
may be removed or dismissed at any time by the President. Any vacancy in
any of the offices, whether by resignation, removal or otherwise, may be
filled for the unexpired portion of the term by the President. A vacancy
in the office of Assistant Vice President may be filled by a Vice
President; in the office of Assistant Secretary by the Secretary; or in
the office of Assistant Treasurer by the Treasurer. Any appointment to
fill any vacancy shall serve subject to ratification by the Board of
Trustees at its next regular meeting.
Exhibit (b)(ii) under Form N-1A
Exhibit 3(ii) under Item 601/Reg. S-K
FEDERATED STOCK TRUST
AMENDMENT #7
TO THE BY-LAWS
(EFFECTIVE FEBRUARY 27, 1998)
Delete Section 5 PROXIES of Article IV SHAREHOLDERS' MEETINGS, and replace with
the following:
Section 5. PROXIES. Any shareholder entitled to vote at any meeting of
shareholders may vote either in person, by telephone, by electronic means
including facsimile, or by proxy, but no proxy which is dated more than
six months before the meeting named therein shall be accepted unless
otherwise provided in the proxy. Every proxy shall be in writing,
subscribed by the shareholder or his duly authorized agent or be in such
other form as may be permitted by law, including documents conveyed by
electronic transmission. Every proxy shall be dated, but need not be
sealed, witnessed or acknowledged. The placing of a shareholder's name on
a proxy or authorizing another to act as the shareholder's agent, pursuant
to telephone or electronically transmitted instructions obtained in
accordance with procedures reasonably designed to verify that such
instructions have been authorized by such shareholder, shall constitute
execution of a proxy by or on behalf of such shareholder. Where Shares are
held of record by more than one person, any co-owner or co-fiduciary may
execute the proxy or give authority to an agent, unless the Secretary of
the Trust is notified in writing by any co-owner or co-fiduciary that the
joinder of more than one is to be required. All proxies shall be filed
with and verified by the Secretary or an Assistant Secretary of the Trust,
or the person acting as Secretary of the Meeting. Unless otherwise
specifically limited by their term, all proxies shall entitle the holders
thereof to vote at any adjournment of such meeting but shall not be valid
after the final adjournment of such meeting.
Exhibit (b)(iii) under Form N-1A
Exhibit 3(ii) under Item 601/Reg. S-K
FEDERATED STOCK TRUST
AMENDMENT #8
TO THE BY-LAWS
(EFFECTIVE MAY 12, 1998)
Strike Section 3 - Place of Meeting of Article IV - Shareholders' Meetings and
replace it with the following:
Section 3. PLACE OF MEETING. Meetings of the shareholders of the Trust or
a particular Series or Class shall be held at such place within or without
The Commonwealth of Massachusetts as may be fixed from time to time by
resolution of the Trustees.
Strike Section 6 - Place of Meeting of Article V - Trustees' Meetings and
replace it with the following:
Section 6. PLACE OF MEETING. Meetings of the Trustees shall be held 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.
Exhibit (e)(i) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
Federated Stock Trust
DISTRIBUTOR'S CONTRACT
AGREEMENT made this 1st day of March, 1998, by and between Federated Stock
Trust (the "Trust"), a Massachusetts business trust, and FEDERATED SECURITIES
CORP. ("FSC"), a Pennsylvania Corporation.
In consideration of the mutual covenants hereinafter contained, it is
hereby agreed by and between the parties hereto as follows:
1. The Trust hereby appoints FSC as its agent to sell and distribute
shares of the Trust which may be offered in one or more series (the "Funds")
consisting of one or more classes (the "Classes") of shares (the "Shares"), as
described and set forth on one or more exhibits to this Agreement, at the
current offering price thereof as described and set forth in the current
Prospectuses of the Trust FSC hereby accepts such appointment and agrees to
provide such other services for the Trust, if any, and accept such compensation
from the Trust, if any, as set forth in the applicable exhibits to this
Agreement.
2. The sale of any Shares may be suspended without prior notice whenever in
the judgment of the Trust it is in its best interest to do so.
3. Neither FSC nor any other person is authorized by the Trust to give any
information or to make any representation relative to any Shares other than
those contained in the Registration Statement, Prospectuses, or Statements of
Additional Information ("SAIs") filed with the Securities and Exchange
Commission, as the same may be amended from time to time, or in any supplemental
information to said Prospectuses or SAIs approved by the Trust. FSC agrees that
any other information or representations other than those specified above which
it or any dealer or other person who purchases Shares through FSC may make in
connection with the offer or sale of Shares, shall be made entirely without
liability on the part of the Trust. No person or dealer, other than FSC, is
authorized to act as agent for the Trust for any purpose. FSC agrees that in
offering or selling Shares as agent of the Trust, it will, in all respects, duly
conform to all applicable state and federal laws and the rules and regulations
of the National Association of Securities Dealers, Inc., including its Rules of
Fair Practice. FSC will submit to the Trust copies of all sales literature
before using the same and will not use such sales literature if disapproved by
the Trust.
4. This Agreement is effective with respect to each Class as of the date
of execution of the applicable exhibit and shall continue in effect with respect
to each Class presently set forth on an exhibit and any subsequent Classes added
pursuant to an exhibit during the initial term of this Agreement for one year
from the date set forth above, and thereafter for successive periods of one year
if such continuance is approved at least annually by the Trustees of the Trust
including a majority of the members of the Board of Trustees of the Trust who
are not interested persons of the Trust and have no direct or indirect financial
interest in the operation of any Distribution Plan relating to the Trust or in
any related documents to such Plan ("Disinterested Trustees") cast in person at
a meeting called for that purpose. If a Class is added after the first annual
approval by the Trustees as described above, this Agreement will be effective as
to that Class upon execution of the applicable exhibit and will continue in
effect until the next annual approval of this Agreement by the Trustees and
thereafter for successive periods of one year, subject to approval as described
above.
5. This Agreement may be terminated with regard to a particular Fund or
Class at any time, without the payment of any penalty, by the vote of a majority
of the DisinterestedTrustees or by a majority of the outstanding voting
securities of the particular Fund or Class on not more than sixty (60) days'
written notice to any other party to this Agreement. This Agreement may be
terminated with regard to a particular Fund or Class by FSC on sixty (60) days'
written notice to the Trust.
6. This Agreement may not be assigned by FSC and shall automatically
terminate in the event of an assignment by FSC as defined in the Investment
Company Act of 1940, as amended, provided, however, that FSC may employ such
other person, persons, corporation or corporations as it shall determine in
order to assist it in carrying out its duties under this Agreement.
7. FSC shall not be liable to the Trust for anything done or omitted by
it, except acts or omissions involving willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties imposed by this Agreement.
8. This Agreement may be amended at any time by mutual agreement in
writing of all the parties hereto, provided that such amendment is approved by
the Trustees of the Trust including a majority of the Disinterested Trustees of
the Trust cast in person at a meeting called for that purpose.
9. This Agreement shall be construed in accordance with and governed by
the laws of the Commonwealth of Pennsylvania.
10. (a) Subject to the conditions set forth below, the Trust agrees to
indemnify and hold harmless FSC and each person, if any, who controls FSC within
the meaning of Section 15 of the Securities Act of 1933 and Section 20 of the
Securities Act of 1934, as amended, against any and all loss, liability, claim,
damage and expense whatsoever (including but not limited to any and all expenses
whatsoever reasonably incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever) arising out of
or based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, any Prospectuses or SAIs (as from
time to time amended and supplemented) or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to make
the statements therein not misleading, unless such statement or omission was
made in reliance upon and in conformity with written information furnished to
the Trust about FSC by or on behalf of FSC expressly for use in the Registration
Statement, any Prospectuses and SAIs or any amendment or supplement thereof.
If any action is brought against FSC or any controlling person thereof
with respect to which indemnity may be sought against the Trust pursuant to the
foregoing paragraph, FSC shall promptly notify the Trust in writing of the
institution of such action and the Trust shall assume the defense of such
action, including the employment of counsel selected by the Trust and payment of
expenses. FSC or any such controlling person thereof shall have the right to
employ separate counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of FSC or such controlling person unless the
employment of such counsel shall have been authorized in writing by the Trust in
connection with the defense of such action or the Trust shall not have employed
counsel to have charge of the defense of such action, in any of which events
such fees and expenses shall be borne by the Trust. Anything in this paragraph
to the contrary notwithstanding, the Trust shall not be liable for any
settlement of any such claim of action effected without its written consent. The
Trust agrees promptly to notify FSC of the commencement of any litigation or
proceedings against the Trust or any of its officers or Trustees or controlling
persons in connection with the issue and sale of Shares or in connection with
the Registration Statement, Prospectuses, or SAIs.
(b) FSC agrees to indemnify and hold harmless the Trust, each of its
Trustees, each of its officers who have signed the Registration Statement and
each other person, if any, who controls the Trust within the meaning of Section
15 of the Securities Act of 1933, but only with respect to statements or
omissions, if any, made in the Registration Statement or any Prospectus, SAI, or
any amendment or supplement thereof in reliance upon, and in conformity with,
information furnished to the Trust about FSC by or on behalf of FSC expressly
for use in the Registration Statement or any Prospectus, SAI, or any amendment
or supplement thereof. In case any action shall be brought against the Trust or
any other person so indemnified based on the Registration Statement or any
Prospectus, SAI, or any amendment or supplement thereof, and with respect to
which indemnity may be sought against FSC, FSC shall have the rights and duties
given to the Trust, and the Trust and each other person so indemnified shall
have the rights and duties given to FSC by the provisions of subsection (a)
above.
(c) Nothing herein contained shall be deemed to protect any person
against liability to the Trust or its shareholders to which such person would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of the duties of such person or by reason of the
reckless disregard by such person of the obligations and duties of such person
under this Agreement.
(d) Insofar as indemnification for liabilities may be permitted
pursuant to Section 17 of the Investment Company Act of 1940, as amended, for
Trustees, officers, FSC and controlling persons of the Trust by the Trustees
pursuant to this Agreement, the Trust is aware of the position of the Securities
and Exchange Commission as set forth in the Investment Company Act Release No.
IC-11330. Therefore, the Trust undertakes that in addition to complying with the
applicable provisions of this Agreement, in the absence of a final decision on
the merits by a court or other body before which the proceeding was brought,
that an indemnification payment will not be made unless in the absence of such a
decision, a reasonable determination based upon factual review has been made (i)
by a majority vote of a quorum of non-party Disinterested Trustees, or (ii) by
independent legal counsel in a written opinion that the indemnitee was not
liable for an act of willful misfeasance, bad faith, gross negligence or
reckless disregard of duties. The Trust further undertakes that advancement of
expenses incurred in the defense of a proceeding (upon undertaking for repayment
unless it is ultimately determined that indemnification is appropriate) against
an officer, Trustees, FSC or controlling person of the Trust will not be made
absent the fulfillment of at least one of the following conditions: (i) the
indemnitee provides security for his undertaking; (ii) the Trust is insured
against losses arising by reason of any lawful advances; or (iii) a majority of
a quorum of non-party Disinterested Trustees or independent legal counsel in a
written opinion makes a factual determination that there is reason to believe
the indemnitee will be entitled to indemnification.
12. This Agreement will become binding on the parties hereto upon the
execution of the attached exhibits to the Agreement.
<PAGE>
Exhibit A
to the
Distributor's Contract
FEDERATED STOCK TRUST
Class C Shares
The following provisions are hereby incorporated and made part of the
Distributor's Contract dated March 1, 1998, between Federated Stock Trust and
Federated Securities Corp. with respect to the Class of shares set forth above.
1. The Trust hereby appoints FSC to engage in activities principally
intended to result in the sale of shares of the above-listed Class ("Shares").
Pursuant to this appointment, FSC is authorized to select a group of financial
institutions ("Financial Institutions") to sell Shares at the current offering
price thereof as described and set forth in the respective prospectuses of the
Trust.
2. During the term of this Agreement, the Trust will pay FSC for services
pursuant to this Agreement, a monthly fee computed at the annual rate of 0.75%
of the average aggregate net asset value of the Shares held during the month.
For the month in which this Agreement becomes effective or terminates, there
shall be an appropriate proration of any fee payable on the basis of the number
of days that the Agreement is in effect during the month.
3. FSC may from time-to-time and for such periods as it deems appropriate
reduce its compensation to the extent any Class' expenses exceed such lower
expense limitation as FSC may, by notice to the Trust, voluntarily declare to be
effective.
4. FSC will enter into separate written agreements with various firms to
provide certain of the services set forth in Paragraph 1 herein. FSC, in its
sole discretion, may pay Financial Institutions a periodic fee in respect of
Shares owned from time to time by their clients or customers. The schedules of
such fees and the basis upon which such fees will be paid shall be determined
from time to time by FSC in its sole discretion.
5. FSC will prepare reports to the Board of Trustees of the Trust on a
quarterly basis showing amounts expended hereunder including amounts paid to
Financial Institutions and the purpose for such expenditures.
In consideration of the mutual covenants set forth in the Distributor's
Contract dated March 1, 1998 between Federated Stock Trust and Federated
Securities Corp., Federated Stock Trust executes and delivers this Exhibit on
behalf of the Class C Shares thereof, first set forth in this Exhibit.
Witness the due execution hereof this 1st day of March, 1998.
Federated Stock Trust
By: /S/ J. CHRISTOPHER DONAHUE
Name: J. Christopher Donahue
Title: Executive Vice President
FEDERATED SECURITIES CORP.
By: /S/ BYRON F. BOWMAN
Name: Byron F. Bowman
Title: Vice President
<PAGE>
Schedule A
Date: 10/24/97 DISTRIBUTOR'S CONTRACT
As revised: 9/1/98
FEDERATED AMERICAN LEADERS FUND, INC.
Class B Shares
FEDERATED EQUITY FUNDS
Federated Aggressive Growth Fund
Class B Shares
Federated Growth Strategies Fund
Class B Shares
Federated Small Cap Strategies Fund
Class B Shares
Federated Capital Appreciation Fund
Class B Shares
FEDERATED EQUITY INCOME FUND, INC.
Class B Shares
FEDERATED FUND FOR U.S. GOVERNMENT SECURITIES, INC.
Class B Shares
FEDERATED GOVERNMENT INCOME SECURITIES, INC.
Class B Shares
FEDERATED HIGH INCOME BOND FUND, INC.
Class B Shares
FEDERATED MUNICIPAL OPPORTUNITIES FUND, INC.
Class B Shares
FEDERATED MUNICIPAL SECURITIES FUND, INC.
Class B Shares
FEDERATED STOCK AND BOND FUND, INC.
Class B Shares
FEDERATED UTILITY FUND, INC.
Class B Shares
FIXED INCOME SECURITIES, INC.
Federated Strategic Income Fund
Class B Shares
INTERNATIONAL SERIES, INC.
Federated International Equity Fund
Class B Shares
Federated International Income Fund
Class B Shares
<PAGE>
INVESTMENT SERIES FUNDS, INC.
Federated Bond Fund
Class B Shares
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
Class B Shares
MUNICIPAL SECURITIES INCOME TRUST
Federated Pennsylvania Municipal Income Fund
Class B Shares
WORLD INVESTMENT SERIES, INC.
Federated World Utility Fund
Class B Shares
Federated Asia Pacific Growth Fund
Class B Shares
Federated Emerging Markets Fund
Class B Shares
Federated European Growth Fund
Class B Shares
Federated International Small Company Fund
Class B Shares
Federated Latin American Growth Fund
Class B Shares
Federated International High Income Fund
Class B Shares
Federated International Growth Fund
Class B Shares
The following Funds were added as of December 1, 1997:
MUNICIPAL SECURITIES INCOME TRUST
Federated California Municipal Income Fund
Class B Shares
WORLD INVESTMENT SERIES, INC.
Federated Global Equity Income Fund
Class B Shares
The following Funds were added as of MARCH 1, 1998 (and rescinded on September
1, 1998):
FEDERATED STOCK TRUST
Class B Shares
<PAGE>
The following Funds were added as of JUNE 1, 1998:
WORLD INVESTMENT SERIES, INC.
Federated Global Financial Services Fund
Class B Shares
The following Funds were rescinded as of SEPTEMBER 1, 1998:
FEDERATED STOCK TRUST
Class B Shares
Exhibit (h)(ii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
PRINCIPAL SHAREHOLDER SERVICER'S AGREEMENT
THIS AGREEMENT, is made as of the 24th day of October, 1997, by and between
those Investment Companies on behalf of the Portfolios (individually referred to
herein as a "Fund" and collectively as "Funds") and Classes of Shares
("Classes") listed on Schedule A to Exhibit 1, as may be amended from time to
time, having their principal office and place of business at Federated Investors
Tower, Pittsburgh, Pennsylvania 15222-3779, and who have approved this form of
Agreement and Federated Securities Corp. as the principal shareholder servicer
(the "Principal Servicer"). Each of the Exhibits hereto is incorporated herein
in its entirety and made a part hereof. In the event of any inconsistency
between the terms of this Agreement and the terms of any applicable Exhibit, the
terms of the applicable Exhibit shall govern.
In consideration of the mutual covenants hereinafter contained it is hereby
agreed by and between the parties hereto as follows.
1. The Investment Companies hereby appoint the Principal Servicer as their
agent to select, negotiate and contract for the performance of and arrange
for the rendition of personal services to shareholders and/or the
maintenance of accounts of shareholders of each Class of the Funds as to
which this Agreement is made applicable (The Principal Servicer's duties
hereunder are referred to as "Services"). The Principal Servicer hereby
accepts such appointment and agrees to perform or cause to be performed the
Services in respect of the Classes of the Funds to which this Agreement has
been made applicable by an Exhibit. The Principal Servicer agrees to cause
to be provided shareholder services which, in its best judgment (subject to
supervision and control of the Investment Companies' Boards of Trustees or
Directors, as applicable), are necessary or desirable for shareholders of
the Funds. The Principal Servicer further agrees to provide the Investment
Companies, upon request, a written description of the shareholder services
for which the Principal Servicer is arranging hereunder.
2. During the term of this Agreement, each Investment Company will pay the
Principal Servicer and the Principal Servicer agrees to accept as full
compensation for its services rendered hereunder a fee as set forth on the
Exhibit applicable to the Class of each Fund subject to this Agreement.
For the payment period in which this Agreement becomes effective or
terminates with respect to any Class of a Fund, there shall be an
appropriate proration of the monthly fee on the basis of the number of
days that this Agreement is in effect with respect to such Class of the
Fund during the month.
3. This Agreement is effective with respect to each Class of a Fund as of the
date of execution of the applicable Exhibit and shall continue in effect
for one year from the date of its execution, and thereafter for successive
periods of one year only if the form of this Agreement is approved at
least annually by the Board of each Investment Company, including a
majority of the members of the Board of the Investment Company who are not
interested persons of the Investment Company ("Independent Board Members")
cast in person at a meeting called for that purpose.
4. Notwithstanding paragraph 3, this Agreement may be terminated with regard to
a particular Class of a Fund as follows:
(a) at any time, without the payment of any penalty, by the vote of a
majority of the Independent Board Members of any Investment Company
or by a vote of a majority of the outstanding voting securities of
any Fund as defined in the Investment Company Act of 1940 on sixty
(60) days' written notice to the parties to this Agreement;
(b) automatically in the event of the Agreement's assignment as defined in
the Investment Company Act of 1940; and
5. The Principal Servicer agrees to arrange to obtain any taxpayer
identification number certification from each shareholder of the Funds to
which it provides Services that is required under Section 3406 of the
Internal Revenue Code, and any applicable Treasury regulations, and to
provide each Fund or its designee with timely written notice of any
failure to obtain such taxpayer identification number certification in
order to enable the implementation of any required backup withholding.
6. The Principal Servicer shall not be liable for any error of judgment or
mistake of law or for any loss suffered by any Investment Company in
connection with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on its
part in the performance of its duties or from reckless disregard by it of
its obligations and duties under this Agreement. the Principal Servicer
shall be entitled to rely on and may act upon advice of counsel (who may be
counsel for such Investment Company) on all matters, and shall be without
liability for any action reasonably taken or omitted pursuant to such
advice. Any person, even though also an officer, trustee, partner, employee
or agent of the Principal Servicer, who may be or become a member of such
Investment Company's Board, officer, employee or agent of any Fund, shall
be deemed, when rendering services to such Fund or acting on any business
of such Fund (other than services or business in connection with the duties
of the Principal Servicer hereunder) to be rendering such services to or
acting solely for such Fund and not as an officer, trustee, partner,
employee or agent or one under the control or direction of the Principal
Servicer even though paid by the Principal Servicer.
This Section 6 shall survive termination of this Agreement.
7. No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the
party against which an enforcement of the change, waiver, discharge or
termination is sought.
8. The Principal Servicer is expressly put on notice of the limitation of
liability as set forth in the Declaration of Trust of each Investment
Company that is a Massachusetts business trust and agrees that the
obligations assumed by each such Investment Company pursuant to this
Agreement shall be limited in any case to such Investment Company and its
assets and that the Principal Servicer shall not seek satisfaction of any
such obligations from the shareholders of such Investment Company, the
Trustees, Officers, Employees or Agents of such Investment Company, or any
of them.
9. The execution and delivery of this Agreement have been authorized by the
Directors of the Principal Servicer and signed by an authorized officer of
the Principal Servicer, acting as such, and neither such authorization by
such Directors nor such execution and delivery by such officer shall be
deemed to have been made by any of them individually or to impose any
liability on any of them personally, and the obligations of this Agreement
are not binding upon any of the Directors or shareholders of the Principal
Servicer, but bind only the property of the Principal Servicer as provided
in the Articles of Incorporation of the Principal Servicer.
10. Notices of any kind to be given hereunder shall be in writing (including
facsimile communication) and shall be duly given if delivered to any
Investment Company at the following address: Federated Investors Tower,
Pittsburgh, PA 15222-3779, Attention: President and if delivered to the
Principal Servicer at Federated Investors Tower, Pittsburgh, PA
15222-3779, Attention: President.
11. This Agreement constitutes the entire agreement between the parties hereto
and supersedes any prior agreement with respect to the subject hereof
whether oral or written. If any provision of this Agreement shall be held
or made invalid by a court or regulatory agency decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby.
Subject to the provisions of Sections 3 and 4, hereof, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto
and their respective successors and shall be governed by Pennsylvania law;
provided, however, that nothing herein shall be construed in a manner
inconsistent with the Investment Company Act of 1940 or any rule or
regulation promulgated by the Securities and Exchange Commission
thereunder.
12. This Agreement may be executed by different parties on separate
counterparts, each of which, when so executed and delivered, shall be an
original, and all such counterparts shall together constitute one and the
same instrument.
13. This Agreement shall not be assigned by any party without the prior
written consent of the Principal Servicer in the case of assignment by any
Investment Company, or of the Investment Companies in the case of
assignment by the Principal Servicer, except that any party may assign to
a successor all of or a substantial portion of its business to a party
controlling, controlled by, or under common control with such party.
Nothing in this Section 13 shall prevent the Principal Servicer from
delegating its responsibilities to another entity to the extent provided
herein.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
Investment Companies (listed on Schedule
A)
Attest: /S/ S. ELLIOTT COHAN By: /S/ JOHN W. MCGONIGLE
Title: ASSISTANT SECRETARY Title: EXECUTIVE VICE PRESIDENT
Federated Securities Corp.
Attest: /S/ LESLIE K. PLATT By: /S/ BYRON F. BOWMAN
Title: ASSISTANT SECRETARY Title: VICE PRESIDENT
<PAGE>
Exhibit 1
to the
Principal Shareholder Servicer's Agreement
Related to Class B Shares of
the Funds
The following provisions are hereby incorporated and made part of the
Principal Shareholder Servicer's Agreement (the "Principal Shareholder
Servicer's Agreement") as of the 24th day of October, 1997, by and between those
Investment Companies on behalf of the Portfolios (individually referred to
herein as a "Fund" and collectively as "Funds") and Classes of Shares
("Classes") listed on Schedule A to Exhibit 1, as may be amended from time to
time, having their principal office and place of business at Federated Investors
Tower, Pittsburgh, Pennsylvania 15222-3779, and who have approved this form of
Agreement and Federated Securities Corp. as the principal shareholder servicer
(the "Principal Servicer"). Each of the Exhibits hereto is incorporated herein
in its entirety and made a part hereof. In the event of any inconsistency
between the terms of this Exhibit and the terms of the Principal Shareholder
Servicer's Agreement, the terms of this Exhibit shall govern.
1. Each Investment Company hereby appoints the Principal Servicer to arrange
for the rendition of the shareholder services in respect of Class B Shares
("Class B Shares") of each Fund. Pursuant to this appointment, the
Principal Servicer is authorized to select various companies including but
not limited to Federated Shareholder Services ("Companies or a Company ")
to provide such services.
2. (a) In consideration of the Principal Servicer's Services under this
Agreement in respect of the Class B Shares each Fund agrees to pay the
Principal Servicer or at its direction its "Allocable Portion" (as
hereinafter defined) of a fee (the "Servicing Fee") equal to 0.25 of 1%
per annum of the average daily net asset value of the Class B Shares of
the Fund outstanding from time to time, PROVIDED HOWEVER, that in the
event the Fund operates as a fund of funds (a "FOF Fund") by investing
the proceeds of the issuance of its Class B Shares in Class A Shares of
another fund (the "Other Fund") and the Principal Shareholder Servicer
receives a servicing fee in respect of the Class A Shares of the Other
Fund so acquired by the FOF Fund, the Servicing Fee payable in respect
of such Class B Shares of the FOF Fund will be reduced by the amount of
the servicing fee actually received by the Principal Shareholder
Servicer or its assign from the Other Fund in respect of the Class A
Shares of the Other Fund acquired with the proceeds of such Class B
Shares of the FOF Fund.
(b)(i) The Principal Servicer will be deemed to have fully earned its
Allocable Portion (computed as of any date) of the Servicing Fee
payable in respect of the Class B Shares of a Fund (and to have
satisfied its obligation to arrange for shareholder services in respect
of such Class B Shares) on the date it has arranged for shareholder
services to be performed by Federated Shareholder Services by payment
of the lump sum contemplated by Alternative A to Exhibit 1 to the
Shareholder Services Agreement among the Principal Servicer, Federated
Shareholder Services and the Fund dated as of the date hereof (the
"Shareholder Services Agreement") to Federated Shareholder Services
(whose obligations are fully supported by its parent company) in
respect of each "Commission Share" (as defined in the Allocation
Schedule attached hereto in Schedule B) of the Fund, taken into account
in determining such Principal Servicer's Allocable Portion of such
Servicing Fees as of such date. The Principal Servicer shall not be
deemed to have any other duties in respect of the Shares and its
Allocable Portion of the Servicing Fees to which the preceding sentence
applies and such arrangements shall be deemed a separate and distinct
contractual arrangement from that described in clause (ii).
(ii) The Principal Servicer will be deemed to have fully earned any
Servicing Fees not included in its Allocable Portion (i.e., those
attributable to Shares in respect of which Alternative A under Exhibit
1 to the Shareholder Services Agreement is not applicable) as such
services are performed in respect of such Shares.
(c)Notwithstanding anything to the contrary set forth in this Exhibit,
the Principal Shareholder Agreement, or (to the extent waiver thereof
is permitted thereby) applicable law, each Investment Company's
obligation to pay the Principal Servicer's Allocable Portion of the
Servicing Fees payable in respect of the Class B Shares of a Fund shall
not be terminated or modified for any reason (including a termination
of this Principal Shareholder Servicer's Agreement as it relates to the
Fund) except to the extent required by a change in the Investment
Company Act of 1940 (the "Act") or the Conduct Rules of the National
Association of Securities Dealers, Inc., in either case enacted or
promulgated after May 1, 1997, or in connection with a "Complete
Termination" (as hereinafter defined) in respect of the Class B Shares
of such Fund.
(d)Notwithstanding anything to the contrary in this Exhibit, the
Principal Shareholder Agreement, or (to the extent waiver thereof is
permitted thereby) applicable law, the Principal Servicer may assign,
sell or pledge (collectively, "Transfer") its rights to its Allocable
Portion of the Servicing Fees (but not its obligations to the
Investment Companies under this Principal Shareholder Servicer's
Agreement) in respect of the Class B Shares of a Fund to raise funds to
make the expenditures related to the Services and in connection
therewith upon receipt of notice of such Transfer, the Investment
Company shall pay to the assignee, purchaser or pledgee (collectively
with their subsequent transferees, "Transferees") such portion of the
Principal Servicer's Allocable Portion of the Servicing Fees in respect
of the Class B Shares of the Fund so Transferred. Except as provided in
(c) above and notwithstanding anything to the contrary set forth
elsewhere in this Exhibit, the Principal Shareholder Agreement, or (to
the extent waiver thereof is permitted thereby) applicable law, to the
extent the Principal Servicer has Transferred its rights thereto to
raise funds as aforesaid, the Investment Companies' obligation to pay
to the Principal Servicer's Transferees the Principal Servicer's
Allocable Portion of the Servicing Fees payable in respect of the Class
B Shares of each Fund shall be absolute and unconditional and shall not
be subject to dispute, offset, counterclaim or any defense whatsoever,
including without limitation, any of the foregoing based on the
insolvency or bankruptcy of the Principal Servicer, Federated
Shareholder Services (or its parent) or the failure of Federated
Shareholder Services (or its parent) to perform its Irrevocable Service
Commitment (it being understood that such provision is not a waiver of
the Investment Companies' right to pursue such Principal Servicer and
enforce such claims against the assets of such Principal Servicer other
than the Principal Servicer's right to the Distribution Fees, Servicing
Fees and CDSCs in respect of the Class B Shares of the Fund which have
been so transferred in connection with such Transfer). The Fund agrees
that each such Transferee is a third party beneficiary of the
provisions of this clause (d) but only insofar as those provisions
relate to Servicing Fees transferred to such Transferee.
(e)For purposes of this Principal Shareholder Servicer's Agreement, the
term Allocable Portion of Servicing Fees payable in respect of the
Class B Shares of any Fund shall mean the portion of such Servicing
Fees allocated to such Principal Servicer in accordance with the
Allocation Schedule attached hereto as Schedule B.
(f)For purposes of this Principal Shareholder Servicer's Contract, the
term "Complete Termination" of shareholder servicing arrangements in
respect of Class B Shares of a Fund means a termination of shareholder
servicing arrangements involving the complete cessation of payments of
Servicing Fees in respect of all Class B Shares, and the complete
cessation of payments of servicing fees for every existing and future
class of shares of the Fund and any successor Fund or any Fund
acquiring a substantial portion of the assets of the Fund ,which has
substantially similar characteristics to the Class B Shares taking into
account the manner and amount of sales charge, servicing fee,
contingent deferred sales charge or other similar charge borne directly
or indirectly by the holders of such shares.
3. The Principal Servicer may enter into separate written agreements with
Companies to provide the services set forth in Paragraph 1 herein. The
schedules of fees to be paid such Companies and the basis upon which such
fees will be paid shall be determined from time to time by the Principal
Servicer in its sole discretion.
4. The Principal Servicer will prepare reports to the Board of
Trustees/Directors of the Investment Companies on a quarterly basis
showing amounts expended hereunder including amounts paid to Companies and
the purpose for such expenditures.
In consideration of the mutual covenants set forth in the Principal
Shareholder Servicer's Contract, the Principal Servicer and the Investment
Companies hereby execute and deliver this Exhibit with respect to the Class B
Shares of each Fund.
<PAGE>
Witness the due execution hereof this 24th day of October, 1997.
ATTEST: INVESTMENT COMPANIES (listed on Schedule A)
By: /S/ S. ELLIOTT COHAN By: /S/ JOHN W. MCGONIGLE
Title: ASSISTANT SECRETARY Title: EXECUTIVE VICE PRESIDENT
ATTEST: FEDERATED SECURITIES CORP.
By: /S/ LESLIE K. PLATT By: /S/ BYRON F. BOWMAN
Title: ASSISTANT SECRETARY Title: VICE PRESIDENT
<PAGE>
Schedule A
Date: 10/24/97 PRINCIPAL SHAREHOLDER SERVICER'S AGREEMENT
Revised: 9/1/98
FEDERATED AMERICAN LEADERS FUND, INC.
Class B Shares
FEDERATED EQUITY FUNDS
Federated Aggressive Growth Fund
Class B Shares
Federated Growth Strategies Fund
Class B Shares
Federated Small Cap Strategies Fund
Class B Shares
Federated Capital Appreciation Fund
Class B Shares
FEDERATED EQUITY INCOME FUND, INC.
Class B Shares
FEDERATED FUND FOR U.S. GOVERNMENT SECURITIES, INC.
Class B Shares
FEDERATED GOVERNMENT INCOME SECURITIES, INC.
Class B Shares
FEDERATED HIGH INCOME BOND FUND, INC.
Class B Shares
FEDERATED MUNICIPAL OPPORTUNITIES FUND, INC.
Class B Shares
FEDERATED MUNICIPAL SECURITIES FUND, INC.
Class B Shares
FEDERATED STOCK AND BOND FUND, INC.
Class B Shares
FEDERATED UTILITY FUND, INC.
Class B Shares
FIXED INCOME SECURITIES, INC.
Federated Strategic Income Fund
Class B Shares
INTERNATIONAL SERIES, INC.
Federated International Equity Fund
Class B Shares
Federated International Income Fund
Class B Shares
<PAGE>
INVESTMENT SERIES FUNDS, INC.
Federated Bond Fund
Class B Shares
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
Class B Shares
MUNICIPAL SECURITIES INCOME TRUST
Federated Pennsylvania Municipal Income Fund
Class B Shares
WORLD INVESTMENT SERIES, INC.
Federated World Utility Fund
Class B Shares
Federated Asia Pacific Growth Fund
Class B Shares
Federated Emerging Markets Fund
Class B Shares
Federated European Growth Fund
Class B Shares
Federated International Small Company Fund
Class B Shares
Federated Latin American Growth Fund
Class B Shares
Federated International High Income Fund
Class B Shares
Federated International Growth Fund
Class B Shares
The following Funds were added as of December 1, 1997:
MUNICIPAL SECURITIES INCOME TRUST
Federated California Municipal Income Fund
Class B Shares
WORLD INVESTMENT SERIES, INC.
Federated Global Equity Income Fund
Class B Shares
The following Funds were added as of MARCH 1, 1998 (and rescinded on September
1, 1998):
FEDERATED STOCK TRUST
Class B Shares
<PAGE>
The following Funds were added as of JUNE 1, 1998:
WORLD INVESTMENT SERIES, INC.
Federated Global Financial Services Fund
Class B Shares
The following Funds were rescinded as of SEPTEMBER 1, 1998:
FEDERATED STOCK TRUST
Class B Shares
Exhibit (h)(iii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
SHAREHOLDER SERVICES AGREEMENT
THIS AGREEMENT, is made as of the 24th day of October, 1997, by and between
those Investment Companies on behalf of the Portfolios (individually referred to
herein as a "Fund" and collectively as "Funds") and Classes of Shares
("Classes") listed on Schedule A to Exhibit 1, as it may be amended from time to
time, having their principal office and place of business at Federated Investors
Tower, Pittsburgh, PA 15222-3779 and who have approved this form of Agreement
and Federated Securities Corp.("FSC"), a Pennsylvania Corporation, having its
principal office and place of business at Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779 and Federated Shareholder Services, a Delaware business
trust, having its principal office and place of business at Federated Investors
Tower, Pittsburgh, Pennsylvania 15222-3779 ("FSS"). Each of the Exhibits hereto
is incorporated herein in its entirety and made a part hereof. In the event of
any inconsistency between the terms of this Agreement and the terms of any
applicable Exhibit, the terms of the applicable Exhibit shall govern.
1. FSC as Principal Servicer (Principal Servicer") hereby contracts with FSS
to render or cause to be rendered personal services to shareholders and/or
the maintenance of accounts of shareholders of each Class of the Funds to
which this Agreement is made applicable by an Exhibit hereto ("Services").
In addition to providing Services directly to shareholders of the Funds,
FSS is hereby appointed the Investment Companies' agent to select,
negotiate and subcontract for the performance of Services. FSS hereby
accepts such appointment. FSS agrees to provide or cause to be provided
Services which, in its best judgment (subject to supervision and control of
the Investment Companies' Boards of Trustees or Directors, as applicable),
are necessary or desirable for shareholders of the Funds. FSS further
agrees to provide the Investment Companies, upon request, a written
description of the Services which FSS is providing hereunder. The
Investment Companies, on behalf of the Funds and each Class subject hereto
consents to the appointment of FSS to act in its capacity as described
herein and agrees to look solely to FSS for performance of the Services.
2. The term of the undertaking of FSS to render services hereunder in respect
of any Class of any Fund and the manner and amount of compensation to be
paid in respect thereof shall be specified in respect of each Class of the
Funds to which this Agreement is made applicable by an Exhibit hereto. FSS
agrees to look solely to the Principal Servicer for its compensation
hereunder.
3. This Agreement shall become effective in respect of any Class of Shares of
a Fund upon execution of an Exhibit relating to such Class of the Fund.
Once effective in respect of any Class of shares, this Agreement shall
continue in effect for one year from the date of its execution, and
thereafter for successive periods of one year only if the form of this
Agreement is approved at least annually by the Board of each Investment
Company, including a majority of the members of the Board of the
Investment Company who are not interested persons of the Investment
Company ("Independent Board Members") cast in person at a meeting called
for that purpose.
4. Notwithstanding paragraph 3, this Agreement may be terminated as follows:
(a) By any Investment Company as to any Fund at any time, without the
payment of any penalty, by the vote of a majority of the Independent
Board Members of any Investment Company or by a vote of a majority of
the outstanding voting securities of any Fund as defined in the
Investment Company Act of 1940 on sixty (60) days' written notice to
the parties to this Agreement;
(b) automatically in the event of the Agreement's assignment as defined in
the Investment Company Act of 1940; and
5. FSS agrees to obtain any taxpayer identification number certification from
each shareholder of the Funds to which it provides Services that is
required under Section 3406 of the Internal Revenue Code, and any
applicable Treasury regulations, and to provide each Investment Company or
its designee with timely written notice of any failure to obtain such
taxpayer identification number certification in order to enable the
implementation of any required backup withholding.
6. FSS shall not be liable for any error of judgment or mistake of law or for
any loss suffered by any Investment Company in connection with the matters
to which this Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance
of its duties or from reckless disregard by it of its obligations and
duties under this Agreement. FSS shall be entitled to rely on and may act
upon advice of counsel (who may be counsel for such Investment Company) on
all matters, and shall be without liability for any action reasonably taken
or omitted pursuant to such advice. Any person, even though also an
officer, trustee, partner, employee or agent of FSS, who may be or become a
member of such Investment Company's Board, officer, employee or agent of
any Investment Company, shall be deemed, when rendering services to such
Investment Company or acting on any business of such Investment Company
(other than services or business in connection with the duties of FSS
hereunder) to be rendering such services to or acting solely for such
Investment Company and not as an officer, trustee, partner, employee or
agent or one under the control or direction of FSS even though paid by FSS.
This Section 6 shall survive termination of this Agreement.
7. No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the
party against which an enforcement of the change, waiver, discharge or
termination is sought.
8. FSS is expressly put on notice of the limitation of liability as set forth
in the Declaration of Trust of each Investment Company that is a
Massachusetts business trust and agrees that the obligations assumed by
each such Investment Company pursuant to this Agreement shall be limited
in any case to such Investment Company and its assets and that FSS shall
not seek satisfaction of any such obligations from the shareholders of
such Investment Company, the Trustees, Officers, Employees or Agents of
such Investment Company, or any of them.
9. The execution and delivery of this Agreement have been authorized by the
Trustees of FSS and signed by an authorized officer of FSS, acting as
such, and neither such authorization by such Trustees nor such execution
and delivery by such officer shall be deemed to have been made by any of
them individually or to impose any liability on any of them personally,
and the obligations of this Agreement are not binding upon any of the
Trustees or shareholders of FSS, but bind only the trust property of FSS
as provided in the Declaration of Trust of FSS.
<PAGE>
10. Notices of any kind to be given hereunder shall be in writing (including
facsimile communication) and shall be duly given if delivered to any
Investment Company at the following address: Federated Investors Tower,
Pittsburgh, PA 15222-3779, Attention: President and if delivered to FSS at
Federated Investors Tower, Pittsburgh, PA 15222-3779, Attention:
President.
11. This Agreement constitutes the entire agreement between the parties hereto
and supersedes any prior agreement with respect to the subject hereof
whether oral or written. If any provision of this Agreement shall be held
or made invalid by a court or regulatory agency decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby.
Subject to the provisions of Sections 3 and 4, hereof, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto
and their respective successors and shall be governed by Pennsylvania law;
provided, however, that nothing herein shall be construed in a manner
inconsistent with the Investment Company Act of 1940 or any rule or
regulation promulgated by the Securities and Exchange Commission
thereunder.
12. This Agreement may be executed by different parties on separate
counterparts, each of which, when so executed and delivered, shall be an
original, and all such counterparts shall together constitute one and the
same instrument.
13. This Agreement shall not be assigned by any party without the prior
written consent of the parties hereto. Nothing in this Section 13 shall
prevent FSS from delegating its responsibilities to another entity to the
extent provided herein.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
Investment Companies (listed on Schedule
A)
Attest: /S/ S. ELLIOTT COHAN By: /S/ JOHN W. MCGONIGLE
Title: ASSISTANT SECRETARY Title: EXECUTIVE VICE PRESIDENT
Federated Shareholder Services
Attest:/S/ LESLIE K. PLATT By: /S/ BYRON F. BOWMAN
Title: ASSISTANT SECRETARY Title: VICE PRESIDENT
Federated Securities Corp.
Attest: /S/ LESLIE K. PLATT By: /S/ BYRON F. BOWMAN
Title: ASSISTANT SECRETARY Title: VICE PRESIDENT
<PAGE>
EXHIBIT 1
TO SHAREHOLDER SERVICES AGREEMENT
FOR CLASS B SHARES OF
THE INVESTMENT COMPANIES
1. The Shareholder Services Agreement for Shares of the Investment
Companies on behalf of the portfolios (individually referred to as a "Fund" and
collectively as "Funds") and the classes of shares ("Classes") listed on the
attached Schedule A dated October 24, 1997 among Federated Securities Corp.
("Principal Servicer"), Federated Shareholder Services ("Class Servicer") and
the Investment Companies is hereby made applicable on the terms set forth herein
to the Class B Shares of the above-referenced Funds. In the event of any
inconsistency between the terms of this Exhibit and the Shareholder Services
Agreement, the terms of this Exhibit shall govern.
2. In connection with the Services to be rendered to holders of Class B
Shares of each Fund, the Principal Servicer and Class Servicer agree that the
Principal Servicer shall retain and compensate the Class Servicer for its
Services in respect of the Class B Shares of the Fund on one of the following
alternative basis as the Principal Servicer shall elect:
ALTERNATIVE A3: The Principal Servicer shall pay the Class Servicer
a dollar amount as set forth on Schedule A per Class B Commission Share
(as defined in the Principal Shareholder Servicer's Agreement) of the
Fund. Class Servicer agrees that upon receipt of such payment (which shall
be deemed to be full and adequate consideration for an irrevocable service
commitment (the "Irrevocable Service Commitment") of Class Servicer
hereunder), Class Servicer shall be unconditionally bound and obligated to
either: (1) provide the Services in respect of such Commission Share and
all other Shares derived therefrom via reinvestment of dividends, free
exchanges or otherwise for so long as the same is outstanding or (2) in
the event the Class Servicer for the Class B Shares is terminated by the
Investment Company, to arrange for a replacement Class Servicer
satisfactory to the Investment Company to perform such services, at no
additional cost to the Fund.
ALTERNATIVE B4: If Alternative A is not elected, the Principal
Servicer shall pay the Class Servicer twenty five basis points (0.25%) per
annum on the average daily net asset value of each Class B Share of the
Fund monthly in arrears. The Class Servicer agrees that such payment is
full and adequate consideration for the Services to be rendered by it to
the holder of such Class B Share.
3. In the event pursuant to paragraph 2 above, Alternative A has been
elected and the Class Servicer is terminated as Class Servicer for the Class B
Shares of the Fund, the Class Servicer agrees to pay to any successor Class
Servicer for the Class B Shares of the Fund any portion of the excess, if any,
of (A) the Servicing Fees received by it hereunder in respect of Class B Shares
of the Fund plus interest thereon at the percent as set forth on Schedule A per
annum minus (B) the costs it incurred hereunder in respect of the Class B Shares
of the Fund prior to such termination.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their officers designated below as of the day and year first
above written.
Attest: FEDERATED SECURITIES CORP.
By: /S/ LESLIE K. PLATT By: /S/ BYRON F. BOWMAN
Title: ASSISTANT SECRETARY Title: VICE PRESIDENT
Attest: FEDERATED SHAREHOLDER SERVICES
By:/S/ LESLIE K. PLATT By: /S/ BYRON F. BOWMAN
Title: ASSISTANT SECRETARY Title: VICE PRESIDENT
Attest: INVESTMENT COMPANIES
(listed on Schedule A)
By: /S/ S. ELLIOTT COHAN By: /S/ JOHN W. MCGONIGLE
Title: ASSISTANT SECRETARY Title: EXECUTIVE VICE PRESIDENT
<PAGE>
Schedule A
Date: 10/24/97 SHAREHOLDER SERVICES AGREEMENT
Revised: 9/1/98
FEDERATED AMERICAN LEADERS FUND, INC.
Class B Shares
FEDERATED EQUITY FUNDS
Federated Aggressive Growth Fund
Class B Shares
Federated Growth Strategies Fund
Class B Shares
Federated Small Cap Strategies Fund
Class B Shares
Federated Capital Appreciation Fund
Class B Shares
FEDERATED EQUITY INCOME FUND, INC.
Class B Shares
FEDERATED FUND FOR U.S. GOVERNMENT SECURITIES, INC.
Class B Shares
FEDERATED GOVERNMENT INCOME SECURITIES, INC.
Class B Shares
FEDERATED HIGH INCOME BOND FUND, INC.
Class B Shares
FEDERATED MUNICIPAL OPPORTUNITIES FUND, INC.
Class B Shares
FEDERATED MUNICIPAL SECURITIES FUND, INC.
Class B Shares
FEDERATED STOCK AND BOND FUND, INC.
Class B Shares
FEDERATED UTILITY FUND, INC.
Class B Shares
FIXED INCOME SECURITIES, INC.
Federated Strategic Income Fund
Class B Shares
INTERNATIONAL SERIES, INC.
Federated International Equity Fund
Class B Shares
Federated International Income Fund
Class B Shares
<PAGE>
INVESTMENT SERIES FUNDS, INC.
Federated Bond Fund
Class B Shares
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
Class B Shares
MUNICIPAL SECURITIES INCOME TRUST
Federated Pennsylvania Municipal Income Fund
Class B Shares
WORLD INVESTMENT SERIES, INC.
Federated World Utility Fund
Class B Shares
Federated Asia Pacific Growth Fund
Class B Shares
Federated Emerging Markets Fund
Class B Shares
Federated European Growth Fund
Class B Shares
Federated International Small Company Fund
Class B Shares
Federated Latin American Growth Fund
Class B Shares
Federated International High Income Fund
Class B Shares
Federated International Growth Fund
Class B Shares
The following Funds were added as of December 1, 1997:
MUNICIPAL SECURITIES INCOME TRUST
Federated California Municipal Income Fund
Class B Shares
WORLD INVESTMENT SERIES, INC.
Federated Global Equity Income Fund
Class B Shares
The following Funds were added as of MARCH 1, 1998 (and rescinded on September
1, 1998):
FEDERATED STOCK TRUST
Class B Shares
<PAGE>
The following Funds were added as of JUNE 1, 1998:
WORLD INVESTMENT SERIES, INC.
Federated Global Financial Services Fund
Class B Shares
The following Funds were rescinded as of SEPTEMBER 1, 1998:
FEDERATED STOCK TRUST
Class B Shares
Exhibit (h)(iv) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
AMENDED & RESTATED
AGREEMENT
FOR
FUND ACCOUNTING SERVICES,
ADMINISTRATIVE SERVICES,
TRANSFER AGENCY SERVICES
AND
CUSTODY SERVICES PROCUREMENT
AGREEMENT made as of March 1, 1996, and amended and restated as of
September 1, 1997, by and between those investment companies listed on
Exhibit 1 as may be amended from time to time, having their principal
office and place of business at
(the "Investment Company"), on behalf of the portfolios (individually
referred to herein as a "Fund" and collectively as "Funds") of the
Investment Company, and FEDERATED SERVICES COMPANY, a Pennsylvania
corporation, having its principal office and place of business at
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779 on behalf
of itself and its subsidiaries (the "Company").
WHEREAS, the Investment Company is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended
(the "1940 Act"), with authorized and issued shares of capital stock or
beneficial interest ("Shares");
WHEREAS, the Investment Company may desire to retain the Company as
fund accountant to provide fund accounting services (as herein defined)
including certain pricing, accounting and recordkeeping services for each
of the Funds, including any classes of shares issued by any Fund
("Classes") if so indicated on Exhibit 1, and the Company desires to
accept such appointment;
WHEREAS, the Investment Company may desire to appoint the Company as
its administrator to provide it with administrative services (as herein
defined), if so indicated on Exhibit, and the Company desires to accept
such appointment;
WHEREAS, the Investment Company may desire to appoint the Company as
its transfer agent and dividend disbursing agent to provide it with
transfer agency services (as herein defined) if so indicated on Exhibit 1,
and agent in connection with certain other activities, and the Company
desires to accept such appointment; and
WHEREAS, the Investment Company may desire to appoint the Company as
its agent to select, negotiate and subcontract for custodian services from
an approved list of qualified banks if so indicated on Exhibit 1, and the
Company desires to accept such appointment; and
NOW THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties
hereto agree as follows:
SECTION ONE: FUND ACCOUNTING.
ARTICLE 1. APPOINTMENT.
The Investment Company hereby appoints the Company to provide certain
pricing and accounting services to the Funds, and/or the Classes, for the
period and on the terms set forth in this Agreement. The Company accepts
such appointment and agrees to furnish the services herein set forth in
return for the compensation as provided in Article 3 of this Section.
ARTICLE 2. THE COMPANY'S DUTIES.
Subject to the supervision and control of the Investment Company's
Board of Trustees or Directors ("Board"), the Company will assist the
Investment Company with regard to fund accounting for the Investment
Company, and/or the Funds, and/or the Classes, and in connection therewith
undertakes to perform the following specific services;
A. Value the assets of the Funds using: primarily, market quotations,
including the use of matrix pricing, supplied by the independent
pricing services selected by the Company in consultation with the
adviser, or sources selected by the adviser, and reviewed by the
board; secondarily, if a designated pricing service does not provide a
price for a security which the Company believes should be available by
market quotation, the Company may obtain a price by calling brokers
designated by the investment adviser of the fund holding the security,
or if the adviser does not supply the names of such brokers, the
Company will attempt on its own to find brokers to price those
securities; thirdly, for securities for which no market price is
available, the Pricing Committee of the Board will determine a fair
value in good faith. Consistent with Rule 2a-4 of the 40 Act,
estimates may be used where necessary or appropriate. The Company's
obligations with regard to the prices received from outside pricing
services and designated brokers or other outside sources, is to
exercise reasonable care in the supervision of the pricing agent. The
Company is not the guarantor of the securities prices received from
such agents and the Company is not liable to the Fund for potential
errors in valuing a Fund's assets or calculating the net asset value
per share of such Fund or Class when the calculations are based upon
such prices. All of the above sources of prices used as described are
deemed by the Company to be authorized sources of security prices. The
Company provides daily to the adviser the securities prices used in
calculating the net asset value of the fund, for its use in preparing
exception reports for those prices on which the adviser has comment.
Further, upon receipt of the exception reports generated by the
adviser, the Company diligently pursues communication regarding
exception reports with the designated pricing agents;
B. Determine the net asset value per share of each Fund and/or Class, at
the time and in the manner from time to time determined by the Board and
as set forth in the Prospectus and Statement of Additional Information
("Prospectus") of each Fund;
C. Calculate the net income of each of the Funds, if any;
D. Calculate realized capital gains or losses of each of the Funds resulting
from sale or disposition of assets, if any;
E. Maintain the general ledger and other accounts, books and financial
records of the Investment Company, including for each Fund, and/or
Class, as required under Section 31(a) of the 1940 Act and the Rules
thereunder in connection with the services provided by the Company;
F. Preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the
records to be maintained by Rule 31a-1 under the 1940 Act in connection
with the services provided by the Company. The Company further agrees
that all such records it maintains for the Investment Company are the
property of the Investment Company and further agrees to surrender
promptly to the Investment Company such records upon the Investment
Company's request;
G. At the request of the Investment Company, prepare various reports or
other financial documents in accordance with generally accepted
accounting principles as required by federal, state and other applicable
laws and regulations; and
H. Such other similar services as may be reasonably requested by the
Investment Company.
The foregoing, along with any additional services that the Company shall
agree in writing to perform for the Investment Company under this Section One,
shall hereafter be referred to as "Fund Accounting Services."
ARTICLE 3. COMPENSATION AND ALLOCATION OF EXPENSES.
A. The Funds will compensate the Company for Fund Accounting Services in
accordance with the fees agreed upon from time to time between the
parties hereto. Such fees do not include out-of-pocket disbursements of
the Company for which the Funds shall reimburse the Company.
Out-of-pocket disbursements shall include, but shall not be limited to,
the items agreed upon between the parties from time to time.
B. The Fund and/or the Class, and not the Company, shall bear the cost of:
custodial expenses; membership dues in the Investment Company Institute
or any similar organization; transfer agency expenses; investment
advisory expenses; Prospectuses, reports and notices; administrative
expenses; interest on borrowed money; brokerage commissions; taxes and
fees payable to federal, state and other governmental agencies; fees of
Trustees or Directors of the Investment Company; independent auditors
expenses; legal and audit department expenses billed to the Company for
work performed related to the Investment Company, the Funds, or the
Classes; law firm expenses; organizational expenses; or other expenses
not specified in this Article 3 which may be properly payable by the
Funds and/or Classes.
C. The compensation and out-of-pocket expenses attributable to the Fund
shall be accrued by the Fund and shall be paid to the Company no less
frequently than monthly, and shall be paid daily upon request of the
Company. The Company will maintain detailed information about the
compensation and out-of-pocket expenses by Fund and Class.
D. Any schedule of compensation agreed to hereunder, as may be adjusted
from time to time, shall be dated and signed by a duly authorized
officer of the Investment Company and/or the Funds and a duly authorized
officer of the Company.
E. The fee for the period from the effective date of this Agreement with
respect to a Fund or a Class to the end of the initial month shall be
prorated according to the proportion that such period bears to the full
month period. Upon any termination of this Agreement before the end of
any month, the fee for such period shall be prorated according to the
proportion which such period bears to the full month period. For
purposes of determining fees payable to the Company, the value of the
Fund's net assets shall be computed at the time and in the manner
specified in the Fund's Prospectus.
F. The Company, in its sole discretion, may from time to time subcontract
to, employ or associate with itself such person or persons as the
Company may believe to be particularly suited to assist it in performing
Fund Accounting Services. Such person or persons may be affiliates of
the Company, third-party service providers, or they may be officers and
employees who are employed by both the Company and the Investment
Company; provided, however, that the Company shall be as fully
responsible to each Fund for the acts and omissions of any such
subcontractor as it is for its own acts and omissions. The compensation
of such person or persons shall be paid by the Company and no obligation
shall be incurred on behalf of the Investment Company, the Funds, or the
Classes in such respect.
SECTION TWO: ADMINISTRATIVE SERVICES.
ARTICLE 4. APPOINTMENT.
The Investment Company hereby appoints the Company as Administrator for the
period on the terms and conditions set forth in this Agreement. The Company
hereby accepts such appointment and agrees to furnish the services set forth in
Article 5 of this Agreement in return for the compensation set forth in Article
9 of this Agreement.
ARTICLE 5. THE COMPANY'S DUTIES.
As Administrator, and subject to the supervision and control of the Board and
in accordance with Proper Instructions (as defined hereafter) from the
Investment Company, the Company will provide facilities, equipment, and
personnel to carry out the following administrative services for operation of
the business and affairs of the Investment Company and each of its portfolios:
A. prepare, file, and maintain the Investment Company's governing documents
and any amendments thereto, including the Charter (which has already
been prepared and filed), the By-laws and minutes of meetings of the
Board and Shareholders;
B. prepare and file with the Securities and Exchange Commission and the
appropriate state securities authorities the registration statements for
the Investment Company and the Investment Company's shares and all
amendments thereto, reports to regulatory authorities and shareholders,
prospectuses, proxy statements, and such other documents all as may be
necessary to enable the Investment Company to make a continuous offering
of its shares;
C. prepare, negotiate, and administer contracts (if any) on behalf of the
Investment Company with, among others, the Investment Company's
investment advisers and distributors, subject to any applicable
restrictions of the Board or the 1940 Act;
D. calculate performance data of the Investment Company for dissemination
to information services covering the investment company industry;
E. prepare and file the Investment Company's tax returns;
F. coordinate the layout and printing of publicly disseminated
prospectuses and reports;
G. perform internal audit examinations in accordance with a charter to be
adopted by the Company and the Investment Company;
H. assist with the design, development, and operation of the Investment
Company and the Funds;
I. provide individuals reasonably acceptable to the Board for nomination,
appointment, or election as officers of the Investment Company, who will
be responsible for the management of certain of the Investment Company's
affairs as determined by the Investment Company's Board; and
J. consult with the Investment Company and its Board on matters concerning
the Investment Company and its affairs.
The foregoing, along with any additional services that the Company shall
agree in writing to perform for the Investment Company under this Section Two,
shall hereafter be referred to as "Administrative Services."
ARTICLE 6. RECORDS.
The Company shall create and maintain all necessary books and records in
accordance with all applicable laws, rules and regulations, including but not
limited to records required by Section 31(a) of the Investment Company act of
1940 and the rules thereunder, as the same may be amended from time to time,
pertaining to the Administrative Services performed by it and not otherwise
created and maintained by another party pursuant to contract with the Investment
Company. Where applicable, such records shall be maintained by the Company for
the periods and in the places required by Rule 31a-2 under the 1940 Act. The
books and records pertaining to the Investment Company which are in the
possession of the Company shall be the property of the Investment Company. The
Investment Company, or the Investment Company's authorized representatives,
shall have access to such books and records at all times during the Company's
normal business hours. Upon the reasonable request of the Investment Company,
copies of any such books and records shall be provided promptly by the Company
to the Investment Company or the Investment Company's authorized
representatives.
ARTICLE 7. DUTIES OF THE FUND.
The Fund assumes full responsibility for the preparation, contents and
distribution of its own offering document and for complying with all applicable
requirements the 1940 Act, the Internal Revenue Code, and any other laws, rules
and regulations of government authorities having jurisdiction.
ARTICLE 8. EXPENSES.
The Company shall be responsible for expenses incurred in providing office
space, equipment, and personnel as may be necessary or convenient to provide the
Administrative Services to the Investment Company, including the compensation of
the Company employees who serve as trustees or directors or officers of the
Investment Company. The Investment Company shall be responsible for all other
expenses incurred by the Company on behalf of the Investment Company, including
without limitation postage and courier expenses, printing expenses, travel
expenses, registration fees, filing fees, fees of outside counsel and
independent auditors, or other professional services, organizational expenses,
insurance premiums, fees payable to persons who are not the Company's employees,
trade association dues, and other expenses properly payable by the Funds and/or
the Classes.
ARTICLE 9. COMPENSATION.
For the Administrative Services provided, the Investment Company hereby
agrees to pay and the Company hereby agrees to accept as full compensation for
its services rendered hereunder an administrative fee at an annual rate per
Fund, as specified below.
The compensation and out of pocket expenses attributable to the Fund shall be
accrued by the Fund and paid to the Company no less frequently than monthly, and
shall be paid daily upon request of the Company. The Company will maintain
detailed information about the compensation and out of pocket expenses by the
Fund.
MAX. ADMIN. AVERAGE DAILY NET ASSETS
FEE OF THE FUNDS
.150% on the first $250 million
.125% on the next $250 million
.100% on the next $250 million
.075% on assets in excess of $750 million
(Average Daily Net Asset break-points are on a complex-wide basis)
However, in no event shall the administrative fee received during any year of
the Agreement be less than, or be paid at a rate less than would aggregate
$125,000 per Fund and $30,000 per Class. The minimum fee set forth above in this
Article 9 may increase annually upon each March 1 anniversary of this Agreement
over the minimum fee during the prior 12 months, as calculated under this
agreement, in an amount equal to the increase in Pennsylvania Consumer Price
Index (not to exceed 6% annually) as last reported by the U.S. Bureau of Labor
Statistics for the twelve months immediately preceding such anniversary.
ARTICLE 10. RESPONSIBILITY OF ADMINISTRATOR.
A. The Company shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Investment Company in
connection with the matters to which this Agreement relates, except a
loss resulting from willful misfeasance, bad faith or gross negligence
on its part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement.
The Company shall be entitled to rely on and may act upon advice of
counsel (who may be counsel for the Investment Company) on all
matters, and shall be without liability for any action reasonably
taken or omitted pursuant to such advice. Any person, even though also
an officer, director, trustee, partner, employee or agent of the
Company, who may be or become an officer, director, trustee, partner,
employee or agent of the Investment Company, shall be deemed, when
rendering services to the Investment Company or acting on any business
of the Investment Company (other than services or business in
connection with the duties of the Company hereunder) to be rendering
such services to or acting solely for the Investment Company and not
as an officer, director, trustee, partner, employee or agent or one
under the control or direction of the Company even though paid by the
Company.
B. The Company shall be kept indemnified by the Investment Company and be
without liability for any action taken or thing done by it in
performing the Administrative Services in accordance with the above
standards. In order that the indemnification provisions contained in
this Article 10 shall apply, however, it is understood that if in any
case the Investment Company may be asked to indemnify or hold the
Company harmless, the Investment Company shall be fully and promptly
advised of all pertinent facts concerning the situation in question,
and it is further understood that the Company will use all reasonable
care to identify and notify the Investment Company promptly concerning
any situation which presents or appears likely to present the
probability of such a claim for indemnification against the Investment
Company. The Investment Company shall have the option to defend the
Company against any claim which may be the subject of this
indemnification. In the event that the Investment Company so elects,
it will so notify the Company and thereupon the Investment Company
shall take over complete defense of the claim, and the Company shall
in such situation initiate no further legal or other expenses for
which it shall seek indemnification under this Article. The Company
shall in no case confess any claim or make any compromise in any case
in which the Investment Company will be asked to indemnify the Company
except with the Investment Company's written consent.
SECTION THREE: TRANSFER AGENCY SERVICES.
ARTICLE 11. TERMS OF APPOINTMENT.
Subject to the terms and conditions set forth in this Agreement, the
Investment Company hereby appoints the Company to act as, and the Company
agrees to act as, transfer agent and dividend disbursing agent for each
Fund's Shares, and agent in connection with any accumulation, open-account
or similar plans provided to the shareholders of any Fund
("Shareholder(s)"), including without limitation any periodic investment
plan or periodic withdrawal program.
ARTICLE 12. DUTIES OF THE COMPANY.
The Company shall perform the following services in accordance with
Proper Instructions as may be provided from time to time by the Investment
Company as to any Fund:
A. Purchases
(1) The Company shall receive orders and payment for the purchase of
shares and promptly deliver payment and appropriate documentation
therefore to the custodian of the relevant Fund, (the
"Custodian"). The Company shall notify the Fund and the Custodian
on a daily basis of the total amount of orders and payments so
delivered.
(2) Pursuant to purchase orders and in accordance with the Fund's
current Prospectus, the Company shall compute and issue the
appropriate number of Shares of each Fund and/or Class and hold
such Shares in the appropriate Shareholder accounts.
(3) In the event that any check or other order for the purchase of
Shares of the Fund and/or Class is returned unpaid for any reason,
the Company shall debit the Share account of the Shareholder by
the number of Shares that had been credited to its account upon
receipt of the check or other order, promptly mail a debit advice
to the Shareholder, and notify the Fund and/or Class of its
action. In the event that the amount paid for such Shares exceeds
proceeds of the redemption of such Shares plus the amount of any
dividends paid with respect to such Shares, the Fund and/the Class
or its distributor will reimburse the Company on the amount of
such excess.
B. Distribution
(1) Upon notification by the Funds of the declaration of any
distribution to Shareholders, the Company shall act as Dividend
Disbursing Agent for the Funds in accordance with the provisions
of its governing document and the then-current Prospectus of the
Fund. The Company shall prepare and mail or credit income, capital
gain, or any other payments to Shareholders. As the Dividend
Disbursing Agent, the Company shall, on or before the payment date
of any such distribution, notify the Custodian of the estimated
amount required to pay any portion of said distribution which is
payable in cash and request the Custodian to make available
sufficient funds for the cash amount to be paid out. The Company
shall reconcile the amounts so requested and the amounts actually
received with the Custodian on a daily basis. If a Shareholder is
entitled to receive additional Shares by virtue of any such
distribution or dividend, appropriate credits shall be made to the
Shareholder's account; and
(2) The Company shall maintain records of account for each Fund and
Class and advise the Investment Company, each Fund and Class and
its Shareholders as to the foregoing.
C. Redemptions and Transfers
(1) The Company shall receive redemption requests and redemption
directions and, if such redemption requests comply with the
procedures as may be described in the Fund Prospectus or set forth
in Proper Instructions, deliver the appropriate instructions
therefor to the Custodian. The Company shall notify the Funds on a
daily basis of the total amount of redemption requests processed
and monies paid to the Company by the Custodian for redemptions.
(2) At the appropriate time upon receiving redemption proceeds from
the Custodian with respect to any redemption, the Company shall
pay or cause to be paid the redemption proceeds in the manner
instructed by the redeeming Shareholders, pursuant to procedures
described in the then-current Prospectus of the Fund.
(3) If any certificate returned for redemption or other request for
redemption does not comply with the procedures for redemption
approved by the Fund, the Company shall promptly notify the
Shareholder of such fact, together with the reason therefor, and
shall effect such redemption at the price applicable to the date
and time of receipt of documents complying with said procedures.
(4) The Company shall effect transfers of Shares by the registered
owners thereof.
(5) The Company shall identify and process abandoned accounts and
uncashed checks for state escheat requirements on an annual basis
and report such actions to the Fund.
D. Recordkeeping
(1) The Company shall record the issuance of Shares of each Fund,
and/or Class, and maintain pursuant to applicable rules of the
Securities and Exchange Commission ("SEC") a record of the total
number of Shares of the Fund and/or Class which are authorized,
based upon data provided to it by the Fund, and issued and
outstanding. The Company shall also provide the Fund on a regular
basis or upon reasonable request with the total number of Shares
which are authorized and issued and outstanding, but shall have no
obligation when recording the issuance of Shares, except as
otherwise set forth herein, to monitor the issuance of such Shares
or to take cognizance of any laws relating to the issue or sale of
such Shares, which functions shall be the sole responsibility of
the Funds.
(2) The Company shall establish and maintain records pursuant to
applicable rules of the SEC relating to the services to be
performed hereunder in the form and manner as agreed to by the
Investment Company or the Fund to include a record for each
Shareholder's account of the following:
(a) Name, address and tax identification number (and whether such
number has been certified);
(b) Number of Shares held;
(c) Historical information regarding the account, including
dividends paid and date and price for all transactions;
(d) Any stop or restraining order placed against the account;
(e) Information with respect to withholding in the case of a
foreign account or an account for which withholding is
required by the Internal Revenue Code;
(f) Any dividend reinvestment order, plan application, dividend
address and correspondence relating to the current
maintenance of the account;
(g) Certificate numbers and denominations for any Shareholder
holding certificates;
(h) Any information required in order for the Company to perform
the calculations contemplated or required by this Agreement.
(3) The Company shall preserve any such records required to be
maintained pursuant to the rules of the SEC for the periods
prescribed in said rules as specifically noted below. Such record
retention shall be at the expense of the Company, and such records
may be inspected by the Fund at reasonable times. The Company may,
at its option at any time, and shall forthwith upon the Fund's
demand, turn over to the Fund and cease to retain in the Company's
files, records and documents created and maintained by the Company
pursuant to this Agreement, which are no longer needed by the
Company in performance of its services or for its protection. If
not so turned over to the Fund, such records and documents will be
retained by the Company for six years from the year of creation,
during the first two of which such documents will be in readily
accessible form. At the end of the six year period, such records
and documents will either be turned over to the Fund or destroyed
in accordance with Proper Instructions.
E. Confirmations/Reports
(1) The Company shall furnish to the Fund periodically the following
information:
(a) A copy of the transaction register;
(b) Dividend and reinvestment blotters;
(c) The total number of Shares issued and outstanding in each
state for "blue sky" purposes as determined according to
Proper Instructions delivered from time to time by the Fund
to the Company;
(d) Shareholder lists and statistical information;
(e) Payments to third parties relating to distribution
agreements, allocations of sales loads, redemption fees, or
other transaction- or sales-related payments;
(f) Such other information as may be agreed upon from time to
time.
(2) The Company shall prepare in the appropriate form, file with the
Internal Revenue Service and appropriate state agencies, and, if
required, mail to Shareholders, such notices for reporting
dividends and distributions paid as are required to be so filed
and mailed and shall withhold such sums as are required to be
withheld under applicable federal and state income tax laws, rules
and regulations.
(3) In addition to and not in lieu of the services set forth above,
the Company shall:
(a) Perform all of the customary services of a transfer agent,
dividend disbursing agent and, as relevant, agent in
connection with accumulation, open-account or similar plans
(including without limitation any periodic investment plan
or periodic withdrawal program), including but not limited
to: maintaining all Shareholder accounts, mailing
Shareholder reports and Prospectuses to current
Shareholders, withholding taxes on accounts subject to
back-up or other withholding (including non-resident alien
accounts), preparing and filing reports on U.S. Treasury
Department Form 1099 and other appropriate forms required
with respect to dividends and distributions by federal
authorities for all Shareholders, preparing and mailing
confirmation forms and statements of account to Shareholders
for all purchases and redemptions of Shares and other
conformable transactions in Shareholder accounts, preparing
and mailing activity statements for Shareholders, and
providing Shareholder account information; and
(b) provide a system which will enable the Fund to monitor the
total number of Shares of each Fund (and/or Class) sold in
each state ("blue sky reporting"). The Fund shall by Proper
Instructions (i) identify to the Company those transactions
and assets to be treated as exempt from the blue sky
reporting for each state and (ii) verify the classification
of transactions for each state on the system prior to
activation and thereafter monitor the daily activity for
each state. The responsibility of the Company for each
Fund's (and/or Class's) state blue sky registration status
is limited solely to the recording of the initial
classification of transactions or accounts with regard to
blue sky compliance and the reporting of such transactions
and accounts to the Fund as provided above.
F. Other Duties
(1) The Company shall answer correspondence from Shareholders relating
to their Share accounts and such other correspondence as may from
time to time be addressed to the Company;
(2) The Company shall prepare Shareholder meeting lists, mail proxy
cards and other material supplied to it by the Fund in connection
with Shareholder meetings of each Fund; receive, examine and
tabulate returned proxies, and certify the vote of the
Shareholders;
(3) The Company shall establish and maintain faclities and procedures
for safekeeping of check forms and facsimile signature imprinting
devices, if any; and for the preparation or use, and for keeping
account of, such forms and devices.
The foregoing, along with any additional services that the Company shall
agree in writing to perform for the Investment Company under this Section Three,
shall hereafter be referred to as "Transfer Agency Services."
ARTICLE 13. DUTIES OF THE INVESTMENT COMPANY.
A. Compliance
The Investment Company or Fund assume full responsibility for the
preparation, contents and distribution of their own and/or their
classes' Prospectus and for complying with all applicable requirements
of the Securities Act of 1933, as amended (the "1933 Act"), the 1940 Act
and any laws, rules and regulations of government authorities having
jurisdiction.
Distributions
The Fund shall promptly inform the Company of the declaration of any
dividend or distribution on account of any Fund's shares.
ARTICLE 14. COMPENSATION AND EXPENSES.
A. Annual Fee
For performance by the Company pursuant to Section Three of this
Agreement, the Investment Company and/or the Fund agree to pay the
Company an annual maintenance fee for each Shareholder account as agreed
upon between the parties and as may be added to or amended from time to
time. Such fees may be changed from time to time subject to written
agreement between the Investment Company and the Company. Pursuant to
information in the Fund Prospectus or other information or instructions
from the Fund, the Company may sub-divide any Fund into Classes or other
sub-components for recordkeeping purposes. The Company will charge the
Fund the same fees for each such Class or sub-component the same as if
each were a Fund.
B. Reimbursements
In addition to the fee paid under Article 7A above, the Investment
Company and/or Fund agree to reimburse the Company for out-of-pocket
expenses or advances incurred by the Company for the items agreed upon
between the parties, as may be added to or amended from time to time. In
addition, any other expenses incurred by the Company at the request or
with the consent of the Investment Company and/or the Fund, will be
reimbursed by the appropriate Fund.
C. Payment
The compensation and out-of-pocket expenses shall be accrued by the Fund
and shall be paid to the Company no less frequently than monthly, and
shall be paid daily upon request of the Company. The Company will
maintain detailed information about the compensation and out-of-pocket
expenses by Fund and Class.
D. Any schedule of compensation agreed to hereunder, as may be adjusted
from time to time, shall be dated and signed by a duly authorized
officer of the Investment Company and/or the Funds and a duly authorized
officer of the Company.
SECTION FOUR: CUSTODY SERVICES PROCUREMENT.
ARTICLE 15. APPOINTMENT.
The Investment Company hereby appoints Company as its agent to evaluate
and obtain custody services from a financial institution that (i) meets
the criteria established in Section 17(f) of the 1940 Act and (ii) has
been approved by the Board as eligible for selection by the Company as a
custodian (the "Eligible Custodian"). The Company accepts such
appointment.
ARTICLE 16. THE COMPANY AND ITS DUTIES.
Subject to the review, supervision and control of the Board, the
Company shall:
A. evaluate and obtain custody services from a financial institution that
meets the criteria established in Section 17(f) of the 1940 Act and
has been approved by the Board as being eligible for selection by the
Company as an Eligible Custodian;
B. negotiate and enter into agreements with Eligible Custodians for the
benefit of the Investment Company, with the Investment Company as a
party to each such agreement. The Company may, as paying agent, be a
party to any agreement with any such Eligible Custodian;
C. establish procedures to monitor the nature and the quality of the
services provided by Eligible Custodians;
D. monitor and evaluate the nature and the quality of services provided
by Eligible Custodians;
E. periodically provide to the Investment Company (i) written reports on
the activities and services of Eligible Custodians; (ii) the nature
and amount of disbursements made on account of the each Fund with
respect to each custodial agreement; and (iii) such other information
as the Board shall reasonably request to enable it to fulfill its
duties and obligations under Sections 17(f) and 36(b) of the 1940 Act
and other duties and obligations thereof;
F. periodically provide recommendations to the Board to enhance Eligible
Custodian's customer services capabilities and improve upon fees being
charged to the Fund by Eligible Custodian; and
The foregoing, along with any additional services that Company shall
agree in writing to perform for the Fund under this Section Four, shall
hereafter be referred to as "Custody Services Procurement."
ARTICLE 17. FEES AND EXPENSES.
A. Annual Fee
For the performance of Custody Services Procurement by the Company
pursuant to Section Four of this Agreement, the Investment Company
and/or the Fund agree to compensate the Company in accordance with the
fees agreed upon from time to time.
B. Reimbursements
In addition to the fee paid under Section 11A above, the Investment
Company and/or Fund agree to reimburse the Company for out-of-pocket
expenses or advances incurred by the Company for the items agreed upon
between the parties, as may be added to or amended from time to time. In
addition, any other expenses incurred by the Company at the request or
with the consent of the Investment Company and/or the Fund, will be
reimbursed by the appropriate Fund.
C. Payment
The compensation and out-of-pocket expenses shall be accrued by the Fund
and shall be paid to the Company no less frequently than monthly, and
shall be paid daily upon request of the Company. The Company will
maintain detailed information about the compensation and out-of-pocket
expenses by Fund.
D. Any schedule of compensation agreed to hereunder, as may be adjusted
from time to time, shall be dated and signed by a duly authorized
officer of the Investment Company and/or the Funds and a duly authorized
officer of the Company.
ARTICLE 18. REPRESENTATIONS.
The Company represents and warrants that it has obtained all required
approvals from all government or regulatory authorities necessary to enter
into this arrangement and to provide the services contemplated in Section
Four of this Agreement.
SECTION FIVE: GENERAL PROVISIONS.
ARTICLE 19. PROPER INSTRUCTIONS.
As used throughout this Agreement, a "Proper Instruction" means a
writing signed or initialed by one or more person or persons as the Board
shall have from time to time authorized. Each such writing shall set forth
the specific transaction or type of transaction involved. Oral
instructions will be deemed to be Proper Instructions if (a) the Company
reasonably believes them to have been given by a person previously
authorized in Proper Instructions to give such instructions with respect
to the transaction involved, and (b) the Investment Company, or the Fund,
and the Company promptly cause such oral instructions to be confirmed in
writing. Proper Instructions may include communications effected directly
between electro-mechanical or electronic devices provided that the
Investment Company, or the Fund, and the Company are satisfied that such
procedures afford adequate safeguards for the Fund's assets. Proper
Instructions may only be amended in writing.
ARTICLE 20. ASSIGNMENT.
Except as provided below, neither this Agreement nor any of the rights
or obligations under this Agreement may be assigned by either party
without the written consent of the other party.
A. This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
B. With regard to Transfer Agency Services, the Company may without further
consent on the part of the Investment Company subcontract for the
performance of Transfer Agency Services with
(1) its subsidiary, Federated Shareholder Service Company, a Delaware
business trust, which is duly registered as a transfer agent
pursuant to Section 17A(c)(1) of the Securities Exchange Act of
1934, as amended, or any succeeding statute ("Section 17A(c)(1)");
or
(2) such other provider of services duly registered as a transfer
agent under Section 17A(c)(1) as Company shall select.
The Company shall be as fully responsible to the Investment Company for
the acts and omissions of any subcontractor as it is for its own acts
and omissions.
C. With regard to Fund Accounting Services, Administrative Services and
Custody Procurement Services, the Company may without further consent on
the part of the Investment Company subcontract for the performance of
such services with Federated Administrative Services, a wholly-owned
subsidiary of the Company.
D. The Company shall upon instruction from the Investment Company
subcontract for the performance of services under this Agreement with an
Agent selected by the Investment Company, other than as described in B.
and C. above; provided, however, that the Company shall in no way be
responsible to the Investment Company for the acts and omissions of the
Agent.
ARTICLE 21. DOCUMENTS.
A. In connection with the appointment of the Company under this Agreement,
the Investment Company shall file with the Company the following
documents:
(1) A copy of the Charter and By-Laws of the Investment Company and
all amendments thereto;
(2) A copy of the resolution of the Board of the Investment Company
authorizing this Agreement;
(3) Printed documentation from the recordkeeping system representing
outstanding Share certificates of the Investment Company or the
Funds;
(4) All account application forms and other documents relating to
Shareholders accounts; and
(5) A copy of the current Prospectus for each Fund.
B. The Fund will also furnish from time to time the following documents:
(1) Each resolution of the Board of the Investment Company
authorizing the original issuance of each Fund's, and/or Class's
Shares;
(2) Each Registration Statement filed with the SEC and amendments
thereof and orders relating thereto in effect with respect to the
sale of Shares of any Fund, and/or Class;
(3) A certified copy of each amendment to the governing document and
the By-Laws of the Investment Company;
(4) Certified copies of each vote of the Board authorizing officers to
give Proper Instructions to the Custodian and agents for fund
accountant, custody services procurement, and shareholder
recordkeeping or transfer agency services;
(5) Such other certifications, documents or opinions which the Company
may, in its discretion, deem necessary or appropriate in the
proper performance of its duties; and
(6) Revisions to the Prospectus of each Fund.
ARTICLE 22. REPRESENTATIONS AND WARRANTIES.
A. Representations and Warranties of the Company
The Company represents and warrants to the Fund that:
(1) it is a corporation duly organized and existing and in good
standing under the laws of the Commonwealth of Pennsylvania;
(2) It is duly qualified to carry on its business in each jurisdiction
where the nature of its business requires such qualification, and
in the Commonwealth of Pennsylvania;
(3) it is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this
Agreement;
(4) all requisite corporate proceedings have been taken to
authorize it to enter into and perform its obligations under
this Agreement;
(5) it has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement;
(6) it is in compliance with federal securities law requirements and
in good standing as an administrator and fund accountant; and
B. Representations and Warranties of the Investment Company
The Investment Company represents and warrants to the Company that:
(1) It is an investment company duly organized and existing and in
good standing under the laws of its state of organization;
(2) It is empowered under applicable laws and by its Charter and
By-Laws to enter into and perform its obligations under this
Agreement;
(3) All corporate proceedings required by said Charter and By-Laws
have been taken to authorize it to enter into and perform
its obligations under this Agreement;
(4) The Investment Company is an open-end investment company
registered under the 1940 Act; and
(5) A registration statement under the 1933 Act will be effective, and
appropriate state securities law filings have been made and will
continue to be made, with respect to all Shares of each Fund being
offered for sale.
ARTICLE 23. STANDARD OF CARE AND INDEMNIFICATION.
A. Standard of Care
With regard to Sections One, Three and Four, the Company shall be held
to a standard of reasonable care in carrying out the provisions of this
Contract. The Company shall be entitled to rely on and may act upon
advice of counsel (who may be counsel for the Investment Company) on all
matters, and shall be without liability for any action reasonably taken
or omitted pursuant to such advice, provided that such action is not in
violation of applicable federal or state laws or regulations, and is in
good faith and without negligence.
B. Indemnification by Investment Company
The Company shall not be responsible for and the Investment Company or
Fund shall indemnify and hold the Company, including its officers,
directors, shareholders and their agents, employees and affiliates,
harmless against any and all losses, damages, costs, charges, counsel
fees, payments, expenses and liabilities arising out of or attributable
to:
(1) The acts or omissions of any Custodian, Adviser, Sub-adviser or
other party contracted by or approved by the Investment
Company or Fund,
(2) The reliance on or use by the Company or its agents or
subcontractors of information, records and documents in proper
form which
(a) are received by the Company or its agents or subcontractors
and furnished to it by or on behalf of the Fund, its
Shareholders or investors regarding the purchase, redemption
or transfer of Shares and Shareholder account information;
(b) are received by the Company from independent pricing
services or sources for use in valuing the assets of the
Funds; or
(c) are received by the Company or its agents or subcontractors
from Advisers, Sub-advisers or other third parties
contracted by or approved by the Investment Company of Fund
for use in the performance of services under this Agreement;
(d) have been prepared and/or maintained by the Fund or its
affiliates or any other person or firm on behalf of the
Investment Company.
(3) The reliance on, or the carrying out by the Company or its agents
or subcontractors of Proper Instructions of the
Investment Company or the Fund.
(4) The offer or sale of Shares in violation of any requirement under
the federal securities laws or regulations or the securities laws
or regulations of any state that such Shares be registered in such
state or in violation of any stop order or other determination or
ruling by any federal agency or any state with respect to the
offer or sale of such Shares in such state.
Provided, however, that the Company shall not be protected by this
Article 23.B. from liability for any act or omission resulting
from the Company's willful misfeasance, bad faith, negligence or
reckless disregard of its duties or failure to meet the standard
of care set forth in 23.A. above.
C. Reliance
At any time the Company may apply to any officer of the Investment
Company or Fund for instructions, and may consult with legal counsel
with respect to any matter arising in connection with the services to be
performed by the Company under this Agreement, and the Company and its
agents or subcontractors shall not be liable and shall be indemnified by
the Investment Company or the appropriate Fund for any action reasonably
taken or omitted by it in reliance upon such instructions or upon the
opinion of such counsel provided such action is not in violation of
applicable federal or state laws or regulations. The Company, its agents
and subcontractors shall be protected and indemnified in recognizing
stock certificates which are reasonably believed to bear the proper
manual or facsimile signatures of the officers of the Investment Company
or the Fund, and the proper countersignature of any former transfer
agent or registrar, or of a co-transfer agent or co-registrar.
D. Notification
In order that the indemnification provisions contained in this Article
23 shall apply, upon the assertion of a claim for which either party may
be required to indemnify the other, the party seeking indemnification
shall promptly notify the other party of such assertion, and shall keep
the other party advised with respect to all developments concerning such
claim. The party who may be required to indemnify shall have the option
to participate with the party seeking indemnification in the defense of
such claim. The party seeking indemnification shall in no case confess
any claim or make any compromise in any case in which the other party
may be required to indemnify it except with the other party's prior
written consent.
ARTICLE 24. TERM AND TERMINATION OF AGREEMENT.
This Agreement shall be effective from September 1, 1997, and shall
continue until February 28, 2003 (`Term"). Thereafter, the Agreement will
continue for 18 month terms. The Agreement can be terminated by either
party upon 18 months notice to be effective as of the end of such 18 month
period. In the event, however, of willful misfeasance, bad faith,
negligence or reckless disregard of its duties by the Company, the
Investment Company has the right to terminate the Agreement upon 60 days
written notice, if Company has not cured such willful misfeasance, bad
faith, negligence or reckless disregard of its duties within 60 days. The
termination date for all original or after-added Investment companies
which are, or become, a party to this Agreement. shall be coterminous.
Investment Companies that merge or dissolve during the Term, shall cease
to be a party on the effective date of such merger or dissolution.
Should the Investment Company exercise its rights to terminate, all
out-of-pocket expenses associated with the movement of records and
materials will be borne by the Investment Company or the appropriate Fund.
Additionally, the Company reserves the right to charge for any other
reasonable expenses associated with such termination. The provisions of
Articles 10 and 23 shall survive the termination of this Agreement.
ARTICLE 25. AMENDMENT.
This Agreement may be amended or modified by a written agreement
executed by both parties.
ARTICLE 26. INTERPRETIVE AND ADDITIONAL PROVISIONS.
In connection with the operation of this Agreement, the Company and the
Investment Company may from time to time agree on such provisions
interpretive of or in addition to the provisions of this Agreement as may
in their joint opinion be consistent with the general tenor of this
Agreement. Any such interpretive or additional provisions shall be in a
writing signed by both parties and shall be annexed hereto, PROVIDED that
no such interpretive or additional provisions shall contravene any
applicable federal or state regulations or any provision of the Charter.
No interpretive or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Agreement.
ARTICLE 27. GOVERNING LAW.
This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the Commonwealth of Massachusetts
ARTICLE 28. NOTICES.
Except as otherwise specifically provided herein, Notices and other
writings delivered or mailed postage prepaid to the Investment Company at
, , or to the Company at Federated Investors Tower, Pittsburgh,
Pennsylvania, 15222-3779, or to such other address as the Investment
Company or the Company may hereafter specify, shall be deemed to have been
properly delivered or given hereunder to the respective address.
ARTICLE 29. COUNTERPARTS.
This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original.
ARTICLE 30. LIMITATIONS OF LIABILITY OF TRUSTEES AND SHAREHOLDERS OF THE
COMPANY.
The execution and delivery of this Agreement have been authorized by
the Trustees of the Company and signed by an authorized officer of the
Company, acting as such, and neither such authorization by such Trustees
nor such execution and delivery by such officer shall be deemed to have
been made by any of them individually or to impose any liability on any of
them personally, and the obligations of this Agreement are not binding
upon any of the Trustees or Shareholders of the Company, but bind only the
appropriate property of the Fund, or Class, as provided in the Declaration
of Trust.
ARTICLE 31. MERGER OF AGREEMENT.
This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject
hereof whether oral or written.
ARTICLE 32. SUCCESSOR AGENT.
If a successor agent for the Investment Company shall be appointed by
the Investment Company, the Company shall upon termination of this
Agreement deliver to such successor agent at the office of the Company all
properties of the Investment Company held by it hereunder. If no such
successor agent shall be appointed, the Company shall at its office upon
receipt of Proper Instructions deliver such properties in accordance with
such instructions.
In the event that no written order designating a successor agent or
Proper Instructions shall have been delivered to the Company on or before
the date when such termination shall become effective, then the Company
shall have the right to deliver to a bank or trust company, which is a
"bank" as defined in the 1940 Act, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $2,000,000, all properties held by the
Company under this Agreement. Thereafter, such bank or trust company shall
be the successor of the Company under this Agreement.
ARTICLE 33. FORCE MAJEURE.
The Company shall have no liability for cessation of services hereunder
or any damages resulting therefrom to the Fund as a result of work
stoppage, power or other mechanical failure, natural disaster,
governmental action, communication disruption or other impossibility of
performance.
ARTICLE 34. ASSIGNMENT; SUCCESSORS.
This Agreement shall not be assigned by either party without the prior
written consent of the other party, except that either party may assign
all of or a substantial portion of its business to a successor, or to a
party controlling, controlled by, or under common control with such party.
Nothing in this Article 34 shall prevent the Company from delegating its
responsibilities to another entity to the extent provided herein.
ARTICLE 35. SEVERABILITY.
In the event any provision of this Agreement is held illegal, void or
unenforceable, the balance shall remain in effect.
ARTICLE 36. LIMITATIONS OF LIABILITY OF TRUSTEES AND SHAREHOLDERS OF THE
INVESTMENT COMPANY.
The execution and delivery of this Agreement have been authorized by
the Trustees of the Investment Company and signed by an authorized officer
of the Investment Company, acting as such, and neither such authorization
by such Trustees nor such execution and delivery by such officer shall be
deemed to have been made by any of them individually or to impose any
liability on any of them personally, and the obligations of this Agreement
are not binding upon any of the Trustees or Shareholders of the Investment
Company, but bind only the property of the Fund, or Class, as provided in
the Declaration of Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf under their seals by and
through their duly authorized officers, as of the day and year first above
written.
INVESTMENT COMPANIES
(LISTED ON EXHIBIT 1)
By: /S/ S. ELLIOTT COHAN
Name: S. Elliott Cohan
Title: Assistant Secretary
FEDERATED SERVICES COMPANY
By: /S/ THOMAS J. WARD
Name: Thomas J. Ward
Title: Secretary
Exhibit (p) 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 Services Company, and each of them, their true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution for them and in their names, place and stead, in any and all
capacities, to sign any and all documents to be filed with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940, by means of the
Securities and Exchange Commission's electronic disclosure system known as
EDGAR; and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
sign and perform each and every act and thing requisite and necessary to be done
in connection therewith, as fully to all intents and purposes as each of them
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
SIGNATURES TITLE DATE
/s/John F. Donahue Chairman and Trustee March 20, 1998
John F. Donahue (Chief Executive Officer)
/s/Glen R. Johnson President March 20, 1998
Glen R. Johnson
/s/John W. McGonigle Treasurer, Executive Vice March 20, 1998
John W. McGonigle President and Secretary
(Principal Financial and
Accounting Office)
/s/Thomas G. Bigley Trustee March 20, 1998
Thomas G. Bigley
/s/Nicholas P. Constantakis Trustee March 20, 1998
Nicholas P. Constantakis
/s/ John T. Conroy, Jr. Trustee March 20, 1998
John T. Conroy, Jr.
/s/ William J. Copeland Trustee March 20, 1998
William J. Copeland
/s/ James E. Dowd Trustee March 20, 1998
James E. Dowd
/s/ Lawrence D. Ellis, M.D. Trustee March 20, 1998
Lawrence D. Ellis, M.D.
<PAGE>
SIGNATURES TITLE DATE
/s/ Edward L. Flaherty, Jr. Trustee March 20, 1998
Edward L. Flaherty, Jr.
/s/ Peter E. Madden Trustee March 20, 1998
Peter E. Madden
/s/ John E. Murray, Jr. Trustee March 20, 1998
John E. Murray, Jr.
/s/ Wesley W. Posvar Trustee March 20, 1998
Wesley W. Posvar
/s/ Marjorie P. Smuts Trustee March 20, 1998
Marjorie P. Smuts
Sworn to and subscribed before me this 20th day of March, 1998.
/s/ Cheri S. Good
Cheri S. Good
