1933 Act File No. 2-62285
1940 Act File No. 811-2550
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. 37 X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 26 X
MONEY MARKET TRUST
(Exact Name of Registrant as Specified in Charter)
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
John W. McGonigle, Esquire,
Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
X_ on September 30, 1995 pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a) (i)
on pursuant to paragraph (a) (i).
75 days after filing pursuant to paragraph (a)(ii)
on _________________ pursuant to paragraph (a)(ii) of Rule 485.
If appropriate, check the following box:
X_ This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has filed with the Securities and Exchange Commission a declaration
pursuant to Rule 24f-2 under the Investment Company Act of 1940, and:
X filed the Notice required by that Rule on September 15, 1995; or
intends to file the Notice required by that Rule on or about ____________;
or
during the most recent fiscal year did not sell any securities pursuant to
Rule 24f-2 under the Investment Company Act of 1940, and, pursuant to
Rule 24f-2(b)(2), need not file the Notice.
Copies to:
Thomas J. Donnelly, Esquire Charles H. Morin, Esquire
Houston, Houston & Donnelly Dickstein, Shapiro & Morin, L.L.P.
2510 Centre City Tower 2101 L Street, N.W.
650 Smithfield Street Washington, D.C. 20037
Pittsburgh, Pennsylvania 15222
CROSS-REFERENCE SHEET
This Amendment to the Registration Statement of Money Market Trust is
comprised of the following:
PART A. INFORMATION REQUIRED IN A PROSPECTUS.
Prospectus Heading
(Rule 404(c) Cross Reference)
Item 1. Cover Page Cover Page.
Item 2. Synopsis Summary of Trust Expenses.
Item 3. Condensed Financial
Information Financial Highlights.
Item 4. General Description of
Registrant General Information; Investment
Information; Investment Objective;
Investment Policies; Investment
Limitations; Regulatory Compliance;
Performance Information.
Item 5. Management of the Fund Trust Information; Management of the
Trust; Distribution of Shares;
Administration of the Trust.
Item 6. Capital Stock and Other
Securities Dividends; Capital Gains; Shareholder
Information; Voting Rights;
Massachusetts Partnership Law;
Tax Information; Federal
Income Tax; Pennsylvania Corporate and
Personal Property Taxes.
Item 7. Purchase of Securities Being
Offered Net Asset Value; Investing in the
Trust;
Share Purchases; Minimum Investment
Required; Subaccounting Services;
Certificates and Confirmations.
Item 8. Redemption or Repurchase Redeeming Shares; By Mail; Telephone
Redemption; Accounts With Low
Balances.
Item 9. Pending Legal Proceedings None.
PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION.
Item 10. Cover Page Cover Page.
Item 11. Table of Contents Table of Contents.
Item 12. General Information and
History Not Applicable.
Item 13. Investment Objectives and
Policies Investment Policies; Investment
Limitations.
Item 14. Management of the Fund Money Market Trust Management.
Item 15. Control Persons and Principal
Holders of Securities Trust Ownership.
Item 16. Investment Advisory and Other
Services Investment Advisory Services; Trust
Administration; Shareholder Services
Plan.
Item 17. Brokerage Allocation Brokerage Transactions.
Item 18. Capital Stock and Other
Securities Not Applicable.
Item 19. Purchase, Redemption and
Pricing of Securities
Being Offered Determining Net Asset Value;
Redemption in Kind.
Item 20. Tax Status The Trust's Tax Status.
Item 21. Underwriters Not Applicable.
Item 22. Calculation of Performance
Data Performance Information; Yield;
Effective Yield; Total Return;
Performance Comparisons.
Item 23. Financial Statements Filed in Part A.
MONEY MARKET TRUST
PROSPECTUS
The shares of Money Market Trust (the "Trust") offered by this prospectus
represent interests in an open-end diversified management investment company (a
mutual fund), investing in short-term money market securities to achieve
stability of principal and current income consistent with stability of
principal.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF ANY
BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK AND ARE NOT INSURED OR
GUARANTEED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY. INVESTMENT IN THESE
SHARES INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL. THE
TRUST ATTEMPTS TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE; THERE
CAN BE NO ASSURANCE THAT THE TRUST WILL BE ABLE TO DO SO.
This prospectus contains the information you should read and know before you
invest in the Trust. Keep this prospectus for future reference.
The Trust has also filed a Statement of Additional Information dated September
30, 1995, with the Securities and Exchange Commission. The information contained
in the Statement of Additional Information is incorporated by reference into
this prospectus. You may request a copy of the Statement of Additional
Information, which is in paper form only, or a paper copy of this prospectus, if
you have received your prospectus electronically, free of charge by calling
1-800-235-4669. To obtain other information, or make inquiries about the Trust,
contact the Trust at the address listed in the back of this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus dated September 30, 1995
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
SUMMARY OF TRUST EXPENSES 1
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS 2
- ------------------------------------------------------
GENERAL INFORMATION 3
- ------------------------------------------------------
INVESTMENT INFORMATION 3
- ------------------------------------------------------
Investment Objective 3
Investment Policies 3
Investment Limitations 6
Regulatory Compliance 6
TRUST INFORMATION 6
- ------------------------------------------------------
Management of the Trust 6
Distribution of Shares 8
Administration of the Trust 8
NET ASSET VALUE 9
- ------------------------------------------------------
INVESTING IN THE TRUST 9
- ------------------------------------------------------
Share Purchases 9
Minimum Investment Required 10
Subaccounting Services 10
Certificates and Confirmations 10
Dividends 10
Capital Gains 10
REDEEMING SHARES 10
- ------------------------------------------------------
By Mail 11
Telephone Redemption 11
Accounts with Low Balances 12
SHAREHOLDER INFORMATION 12
- ------------------------------------------------------
Voting Rights 12
Massachusetts Partnership Law 12
TAX INFORMATION 13
- ------------------------------------------------------
Federal Income Tax 13
Pennsylvania Corporate and Personal
Property Taxes 13
PERFORMANCE INFORMATION 13
- ------------------------------------------------------
FINANCIAL STATEMENTS 14
- ------------------------------------------------------
INDEPENDENT AUDITORS' REPORT 24
- ------------------------------------------------------
ADDRESSES 25
- ------------------------------------------------------
SUMMARY OF TRUST EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)......................................................... None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price)......................................................... None
Contingent Deferred Sales Charge (as a percentage of original purchase price or redemption
proceeds, as applicable).................................................................... None
Redemption Fees (as a percentage of amount redeemed, if applicable)........................... None
Exchange Fee.................................................................................. None
ANNUAL TRUST OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver) (1)............................................................. 0.25%
12b-1 Fee..................................................................................... None
Total Other Expenses.......................................................................... 0.21%
Shareholder Services Fee (after waiver) (2)................................................. 0.05%
Total Trust Operating Expenses (3).................................................. 0.46%
</TABLE>
(1) The management fee has been reduced to reflect the waiver of a portion of
the management fee. The maximum management fee is 0.40%.
(2) The shareholder services fee has been reduced to reflect the voluntary
waiver of a portion of the shareholder services fee. The shareholder service
provider can terminate this voluntary waiver at any time at its sole
discretion. The maximum shareholder services fee is 0.25%.
(3) The total Trust operating expenses would have been 0.81% absent the waiver
of a portion of the management fee and the voluntary waiver of a portion of
the shareholder services fee.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of the Trust will bear, either
directly or indirectly. For more complete descriptions of the various costs and
expenses, see "Trust Information." Wire-transferred redemptions of less than
$5,000 may be subject to additional fees.
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time
period................................................................ $5 $15 $26 $58
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
MONEY MARKET TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Independent Auditors' Report on page 24.
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------
INCOME FROM
INVESTMENT
OPERATIONS
- ---------------------
Net investment
income 0.05 0.03 0.03 0.04 0.07 0.08 0.09 0.07 0.06 0.07
- ---------------------
LESS DISTRIBUTIONS
- ---------------------
Distributions from
net investment
income (0.05) (0.03) (0.03) (0.04) (0.07) (0.08) (0.09) (0.07) (0.06) (0.07)
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
NET ASSET VALUE,
END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
TOTAL RETURN (A) 5.42% 3.18% 3.00% 4.49% 7.05% 8.43% 8.93% 6.94% 5.98% 7.42%
- ---------------------
RATIOS TO AVERAGE NET
ASSETS
- ---------------------
Expenses 0.46% 0.46% 0.46% 0.46% 0.46% 0.46% 0.45% 0.45% 0.45% 0.45%
- ---------------------
Net investment
income 5.32% 3.11% 2.98% 4.40% 6.88% 8.14% 8.58% 6.72% 5.80% 7.17%
- ---------------------
Expense waiver/
reimbursement (b) 0.20% -- -- -- -- -- -- -- -- --
- ---------------------
SUPPLEMENTAL DATA
- ---------------------
Net assets,
end of period
(000 omitted) $507,272 $539,983 $712,577 $943,893 $956,538 $1,189,023 $1,649,683 $1,685,914 $1,747,618 $1,904,972
- ---------------------
</TABLE>
(a) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease for the shareholder services fee is
reflected in both the expense and net investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
GENERAL INFORMATION
- --------------------------------------------------------------------------------
The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated July 24, 1978. The Trust is designed for institutional investors
such as banks, fiduciaries, custodians of public funds, and similar
institutional investors as a convenient means of accumulating an interest in a
professionally managed, diversified portfolio investing in short-term money
market securities. A minimum initial investment of $25,000 within a 90-day
period is required.
The Trust attempts to stabilize the value of a share at $1.00. Shares are
currently sold and redeemed at that price.
INVESTMENT INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The investment objective of the Trust is stability of principal and current
income consistent with stability of principal. This investment objective cannot
be changed without shareholder approval. While there is no assurance that the
Trust will achieve its investment objective, it endeavors to do so by following
the investment policies described in this prospectus. The investment policies
and limitations set forth below cannot be changed by the Board of Trustees
without shareholder approval.
INVESTMENT POLICIES
The Trust pursues its investment objective by investing in a portfolio of money
market securities maturing in one year or less. As a matter of operating policy,
which may be changed without shareholder approval, the Trust will limit the
average maturity of its portfolio to 90 days or less, in order to meet
regulatory requirements. The Trust may attempt to increase yield by trading
portfolio securities to take advantage of short-term market variations.
ACCEPTABLE INVESTMENTS. The Trust invests in high quality money market
instruments that are either rated in the highest short-term rating category by
one or more nationally recognized statistical rating organizations ("NRSROs") or
are of comparable quality to securities having such ratings. Examples of these
instruments include, but are not limited to:
domestic issues of corporate debt obligations, including variable rate
demand notes;
commercial paper (including Canadian Commercial Paper and Europaper);
certificates of deposit, demand and time deposits, bankers' acceptances
and other instruments of domestic and foreign banks and other deposit
institutions ("Bank Instruments");
short-term credit facilities;
asset-backed securities;
obligations issued or guaranteed as to payment of principal and interest
by the U.S. government or one of its agencies or instrumentalities; and
other money market instruments.
The Trust invests only in instruments denominated and payable in U.S. dollars.
VARIABLE RATE DEMAND NOTES. Variable rate demand notes are long-term debt
instruments that have variable or floating interest rates and provide the
Trust with the right to tender the security for repurchase at its stated
principal amount plus accrued interest. Such securities typically bear
interest at a rate that is intended to cause the securities to trade at
par. The interest rate may float or be adjusted at regular intervals
(ranging from daily to annually), and is normally based on a published
interest rate or interest rate index. Most variable rate demand notes allow
the Trust to demand the repurchase of the security on not more than seven
days prior notice. Other notes only permit the Trust to tender the security
at the time of each interest rate adjustment or at other fixed intervals.
See "Demand Features." The Trust treats variable rate demand notes as
maturing on the later of the date of the next interest rate adjustment or
the date on which the Trust may next tender the security for repurchase.
BANK INSTRUMENTS. The Trust only invests in Bank Instruments either issued
by an institution having capital, surplus and undivided profits over $100
million, or insured by the Bank Insurance Fund ("BIF") or the Savings
Association Insurance Fund ("SAIF"). Bank Instruments may include
Eurodollar Certificates of Deposit ("ECDs"), Yankee Certificates of Deposit
("Yankee CDs") and Eurodollar Time Deposits ("ETDs"). The Trust will treat
securities credit enhanced with a bank's letter of credit as Bank
Instruments.
ASSET-BACKED SECURITIES. Asset-backed securities are securities issued by
special purpose entities whose primary assets consist of a pool of loans or
accounts receivable. The securities may take the form of beneficial
interests in special purpose trusts, limited partnership interests, or
commercial paper or other debt securities issued by a special purpose
corporation. Although the securities often have some form of credit or
liquidity enhancement, payments on the securities depend predominantly upon
collections of the loans and receivables held by the issuer.
SHORT-TERM CREDIT FACILITIES. The Trust may enter into, or acquire
participations in, short-term borrowing arrangements with corporations,
consisting of either a short-term revolving credit facility or a master
note agreement payable upon demand. Under these arrangements, the borrower
may reborrow funds during the term of the facility. The Trust treats any
commitments to provide such advances as a standby commitment to purchase
the borrower's notes.
RATINGS. An NRSRO's highest rating category is determined without regard for
sub-categories and gradations. For example, securities rated A-1 or A-1+ by
Standard & Poor's Ratings Group ("S&P"), Prime-1 by Moody's Investors Service,
Inc. ("Moody's"), or F-1 (+ or -) by Fitch Investors Service, Inc. ("Fitch") are
all considered rated in the highest short-term rating category. The Trust will
follow applicable regulations in determining whether a security rated by more
than one NRSRO can be treated as being in the highest short-term rating
category; currently, such securities must be rated by two NRSROs in their
highest rating category. See "Regulatory Compliance."
REPURCHASE AGREEMENTS. Certain securities in which the Trust invests may be
purchased pursuant to repurchase agreements. Repurchase agreements are
arrangements in which banks, broker/dealers, and other recognized financial
institutions sell U.S. government securities or certificates of deposit to the
Trust and agree at the time of sale to repurchase them at a mutually agreed
upon time and price within one year from the date of acquisition. To the extent
that the seller does not repurchase the securities from the Trust, the Trust
could receive less than the repurchase price on any sale of such securities.
CREDIT ENHANCEMENT. Certain of the Trust's acceptable investments may be credit
enhanced by a guaranty, letter of credit, or insurance. The Trust typically
evaluates the credit quality and ratings of credit-enhanced securities based
upon the financial condition and ratings of the party providing the credit
enhancement (the "credit enhancer"), rather than the issuer. Generally, the
Trust will not treat credit-enhanced securities as having been issued by the
credit enhancer for diversification purposes. However, under certain
circumstances applicable regulations may require the Trust to treat the
securities as having been issued by both the issuer and the credit enhancer. The
bankruptcy, receivership, or default of the credit enhancer will adversely
affect the quality and market-
ability of the underlying security.
DEMAND FEATURES. The Trust may acquire securities that are subject to puts and
standby commitments ("demand features") to purchase the securities at their
principal amount (usually with accrued interest) within a fixed period (usually
seven days) following a demand by the Trust. The demand feature may be issued by
the issuer of the underlying securities, a dealer in the securities, or by
another third party, and may not be transferred separately from the underlying
security. The Trust uses these arrangements to provide the Trust with liquidity
and not to protect against changes in the market value of the underlying
securities. The bankruptcy, receivership, or default by the issuer of the demand
feature, or a default on the underlying security or other event that terminates
the demand feature before its exercise, will adversely affect the liquidity of
the underlying security. Demand features that are exercisable even after a
payment default on the underlying security may be treated as a form of credit
enhancement.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Trust may purchase U.S.
government securities on a when-issued or delayed delivery basis. These
transactions are arrangements in which the Trust purchases securities with
payment and delivery scheduled for a future time. The seller's failure to
complete these transactions may cause the Trust to miss a price or yield
considered to be advantageous. Settlement dates may be a month or more after
entering into these transactions, and the market values of the securities
purchased may vary from the purchase prices. Accordingly, the Trust may pay more
or less than the market value of the securities on the settlement date.
The Trust may dispose of a commitment prior to settlement if the adviser deems
it appropriate to do so. In addition, the Trust may enter into transactions to
sell its purchase commitments to third parties at current market values and
simultaneously acquire other commitments to purchase similar securities at later
dates. The Trust may realize short-term profits or losses upon the sale of such
commitments.
RESTRICTED AND ILLIQUID SECURITIES. The Trust may invest in restricted
securities. Restricted securities are any securities in which the Trust may
otherwise invest pursuant to its investment objective and policies but which are
subject to restrictions on resale under federal securities law. However, as a
matter of operating policy which can be changed without shareholder approval,
the Trust will
limit investments in illiquid securities, including restricted securities
(except for section 4(2) commercial paper), non-negotiable time deposits, and
repurchase agreements providing for settlement in more than seven days after
notice, to 10% of its net assets.
The Trust may invest in commercial paper issued in reliance on the exemption
from registration afforded by Section 4(2) of the Securities Act of 1933.
Section 4(2) commercial paper is restricted as to disposition under federal
securities law, and is generally sold to institutional investors, such as the
Trust, who agree that they are purchasing the paper for investment purposes and
not with a view to public distribution. Any resale by the purchaser must be in
an exempt transaction. Section 4(2) commercial paper is normally resold to other
institutional investors like the Trust through or with the assistance of the
issuer or investment dealers who make a market in Section 4(2) commercial paper,
thus providing liquidity. The Trust believes that Section 4(2) commercial paper
is quite liquid. The Trust intends, therefore, to treat Section 4(2) commercial
paper as liquid and not subject to the operating policy applicable to illiquid
securities. In addition, because Section 4(2) commercial paper is liquid, the
Trust intends to not subject such paper to the limitation applicable to
restricted securities.
INVESTMENT LIMITATIONS
The Trust will not borrow money or pledge securities except, under certain
circumstances, the Trust may borrow up to one-third of the value of its total
assets and pledge assets to secure such borrowings. This investment limitation
cannot be changed without shareholder approval.
REGULATORY COMPLIANCE
The Trust may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in this
prospectus and its Statement of Additional Information, in order to comply with
applicable laws and regulations, including the provisions of and regulations
under the Investment Company Act of 1940, as amended. In particular, the Trust
will comply with the various requirements of Rule 2a-7 which regulates money
market mutual funds. For example, with limited exceptions, Rule 2a-7 prohibits
the investment of more than 5% of the Fund's total assets in the securities of
any one issuer, although the Trust's investment limitation only requires such 5%
diversification with respect to 75% of its assets. The Trust will invest more
than 5% of its assets in any one issuer only under the circumstances permitted
by Rule 2a-7. The Trust will also determine the effective maturity of its
investments, as well as its ability to consider a security as having received
the requisite short-term ratings by NRSROs, according to Rule 2a-7. The Trust
may change these operational policies to reflect changes in the laws and
regulations without the approval of its shareholders.
TRUST INFORMATION
- --------------------------------------------------------------------------------
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees. The Trustees
are responsible for managing the Trust's business affairs and for exercising all
the Trust's powers except those reserved
for the shareholders. An Executive Committee of the Board of Trustees handles
the Board's responsibilities between meetings of the Board.
INVESTMENT ADVISER. Investment decisions for the Trust are made by Federated
Research, the Trust's investment adviser, subject to direction by the Trustees.
The adviser continually conducts investment research and supervision for the
Trust and is responsible for the purchase and sale of portfolio instruments.
ADVISORY FEES. The adviser receives an annual investment advisory fee
equal to 0.40 of 1% of the Trust's average daily net assets. Under the
investment advisory contract, the adviser will waive the amount, limited to
the amount of the advisory fee, by which the Trust's aggregate annual
operating expenses, including its investment advisory fee but excluding
interest, taxes, brokerage commissions, expenses of registering and
qualifying the Trust and its shares under federal and state laws and
regulations, expenses of withholding taxes, and extraordinary expenses,
exceed 0.45 of 1% of its average daily net assets. This does not include
reimbursement to the Trust of any expenses incurred by shareholders who use
the transfer agent's subaccounting facilities. The adviser has also
undertaken to reimburse the Trust for operating expenses in excess of
limitations established by certain states.
ADVISER'S BACKGROUND. Federated Research, a Delaware business trust,
organized on April 11, 1989, is a registered investment adviser under the
Investment Advisers Act of 1940. It is a subsidiary of Federated Investors.
All of the Class A (voting) shares of Federated Investors are owned by a
trust, the trustees of which are John F. Donahue, Chairman and Trustee of
Federated Investors, Mr. Donahue's wife, and Mr. Donahue's son, J.
Christopher Donahue, who is President and Trustee of Federated Investors.
Federated Research and other subsidiaries of Federated Investors serve as
investment advisers to a number of investment companies and private
accounts. Certain other subsidiaries also provide administrative services
to a number of investment companies. With over $72 billion invested across
more than 260 funds under management and/or administration by its
subsidiaries, as of December 31, 1994, Federated Investors is one of the
largest mutual fund investment managers in the United States. With more
than 1,750 employees, Federated continues to be led by the management who
founded the company in 1955. Federated funds are presently at work in and
through 4,000 financial institutions nationwide. More than 100,000
investment professionals have selected Federated funds for their clients.
Both the Trust and the Adviser have adopted strict codes of ethics governing the
conduct of all employees who manage the Trust and its portfolio securities.
These codes recognize that such persons owe a fiduciary duty to the Trust's
shareholders and must place the interests of shareholders ahead of the
employees' own interest. Among other things, the codes: require preclearance and
periodic reporting of personal securities transactions; prohibit personal
transactions in securities being purchased or sold, or being considered for
purchase or sale, by the Trust; prohibit purchasing securities in initial public
offerings; and prohibit taking profits on securities held for less than sixty
days. Violations of the codes are subject to review by the Board of Trustees,
and could result in severe penalties.
DISTRIBUTION OF SHARES
Federated Securities Corp. is the principal distributor for shares of the Trust.
It is a Pennsylvania corporation organized on November 14, 1969, and is the
principal distributor for a number of investment companies. Federated Securities
Corp. is a subsidiary of Federated Investors.
State securities laws may require certain financial institutions such as
depository institutions to register as dealers.
SHAREHOLDER SERVICES. The Trust has entered into a Shareholder Services
Agreement with Federated Shareholder Services, a subsidiary of Federated
Investors, under which the Trust may make payments up to 0.25 of 1% of the
average daily net asset value of the Trust, computed at an annual rate, to
obtain personal services for shareholders and provide maintenance of shareholder
accounts. From time to time and for such periods as deemed appropriate, the
amount stated above may be reduced voluntarily.
Under the Shareholder Services Agreement, Federated Shareholder Services will
either perform shareholder services directly or will select financial
institutions to perform shareholder services. Financial institutions will
receive fees based upon shares owned by their clients or customers. The
schedules of such fees and the basis upon which such fees will be paid will be
determined from time to time by the Trust and Federated Shareholder Services.
ADMINISTRATION OF THE TRUST
ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, provides administrative personnel and services (including
certain legal and financial reporting services) necessary to operate the Trust.
Federated Administrative Services provides these at an annual rate as specified
below:
<TABLE>
<CAPTION>
MAXIMUM FEE AVERAGE AGGREGATE DAILY NET ASSETS
<S> <C>
.15 of 1% on the first $250 million
.125 of 1% on the next $250 million
.10 of 1% on the next $250 million
.075 of 1% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares. Average
aggregate daily net assets include those of all mutual funds advised by
affiliates of Federated Investors. Federated Administrative Services may choose
voluntarily to waive a portion of its fee.
CUSTODIAN. State Street Bank and Trust Company, Boston, MA, is custodian for
the securities and cash of the Trust.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated Services Company,
Boston, Massachusetts, is transfer agent for the shares of the Trust, and
dividend disbursing agent for the Trust. Federated Services Company is a
subsidiary of Federated Investors.
INDEPENDENT AUDITORS. The independent auditors for the Trust are Deloitte &
Touche LLP, Pittsburgh, PA.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The Trust attempts to stabilize the net asset value of its shares at $1.00 by
valuing the portfolio securities using the amortized cost method. The net asset
value per share is determined by subtracting total liabilities from total assets
and dividing the remainder by the number of shares outstanding. The Trust cannot
guarantee that its net asset value will always remain at $1.00 per share.
The net asset value is determined at 12:00 noon, 3:00 p.m. (Eastern time), and
as of the close of trading (normally 4:00 p.m., Eastern time) of the New York
Stock Exchange, Monday through Friday, except on New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
and Christmas Day.
INVESTING IN THE TRUST
- --------------------------------------------------------------------------------
SHARE PURCHASES
Shares are sold at their net asset value, without a sales charge, next
determined after an order is received, on days on which the New York Stock
Exchange and the Federal Reserve Wire System are open for business. Shares may
be purchased either by wire or mail. The Trust reserves the right to reject any
purchase request.
To make a purchase, open an account by calling Federated Securities Corp.
Information needed to establish the account will be taken by telephone.
BY WIRE. To purchase by Federal Reserve wire, call the Trust before 3:00 p.m.
(Eastern time) to place an order. The order is considered received immediately.
Payment by federal funds must be received before 3:00 p.m. (Eastern time) that
day. Federal funds should be wired as follows: Federated Services Company, c/o
State Street Bank and Trust Company, Boston, MA; Attention: EDGEWIRE; For Credit
to: Money Market Trust; Fund Number (this number can be found on the account
statement or by contacting the Trust); Group Number or Order Number; Nominee or
Institution Name; and ABA Number 011000028.
BY MAIL. To purchase by mail, send a check made payable to Money Market Trust
to: Federated Services Company, Trust, P.O. Box 8600, Boston, MA 02266-8600.
Orders by mail are considered received when payment by check is converted into
federal funds. This is normally the next business day after the check is
received.
AUTOMATIC INVESTMENTS. Investors may establish accounts with their
financial institutions to have cash accumulations automatically invested in
the Trust. The investments may be made on predetermined dates or when the
investor's account reaches a certain level. Participating financial
institutions are responsible for prompt transmission of orders relating to
the program, and they may charge for their services. Investors should read
this prospectus along with the financial institution's agreement or
literature describing these services and fees.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment is $25,000. However, an account may be opened
with a smaller amount as long as the minimum is reached within 90 days. Minimum
investments will be calculated by combining all accounts maintained with the
Trust. Financial institutions may impose different minimum investment
requirements on their customers.
SUBACCOUNTING SERVICES
Financial institutions are encouraged to open single master accounts. However,
certain financial institutions may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent charges a fee based on the level of subaccounting services
rendered. Financial institutions may charge or pass through subaccounting fees
as part of or in addition to normal trust or agency account fees. They may also
charge fees for other services provided which may be related to the ownership of
Trust shares. This prospectus should, therefore, be read together with any
agreement between the customer and the financial institution with regard to the
services provided, the fees charged for those services, and any restrictions and
limitations imposed.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Trust, Federated Services Company maintains a share
account for each shareholder. Share certificates are not issued unless requested
by contacting the Trust or Federated Services Company in writing.
Monthly confirmations are sent to report transactions such as all purchases and
redemptions as well as dividends paid during the month.
DIVIDENDS
Dividends are declared daily and paid monthly. Dividends are automatically
reinvested on payment dates in additional shares of the Trust unless cash
payments are requested by writing to the Trust. Shares purchased by wire before
3:00 p.m. (Eastern time) begin earning dividends that day. Shares purchased by
check begin earning dividends the day after the check is converted into federal
funds.
CAPITAL GAINS
The Trust does not expect to realize any capital gains or losses. If capital
gains or losses were to occur, they could result in an increase or decrease in
dividends. The Trust will distribute in cash or additional shares any realized
net long-term capital gains at least once every 12 months.
REDEEMING SHARES
- --------------------------------------------------------------------------------
Shares are redeemed at their net asset value next determined after Federated
Services Company receives the redemption request. Redemptions will be made on
days on which the Trust computes its net asset value. Redemption requests must
be received in proper form and can be made as described below.
BY MAIL
Shares may be redeemed by sending a written request to: Money Market Trust, P.O.
Box 8600, Boston, MA 02266-8600. The written request should state: name of the
Trust; shareholder's name; the account number; and the share or dollar amount
requested. Sign the request exactly as the shares are registered. Shareholders
should call the Fund for assistance in redeeming by mail.
If share certificates have been issued, they must be properly endorsed and
should be sent by registered or certified mail with the written request.
Shareholders requesting a redemption of any amount to be sent to an address
other than that on record with the Trust, or a redemption payable other than to
the shareholder of record must have their signatures guaranteed by:
a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund which is administered by the Federal Deposit Insurance
Corporation ("FDIC");
a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchanges;
a savings bank or savings and loan association whose deposits are insured
by the Savings Association Insurance Fund, which is administered by the
FDIC; or
any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.
The Trust does not accept signatures guaranteed by a notary public.
The Trust and the transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Trust may elect in the future to
limit eligible signature guarantors to institutions that are members of the
signature guarantee program. The Trust and its transfer agent reserve the right
to amend these standards at any time without notice.
Normally, a check for the proceeds is mailed within one business day, but in no
event more than seven days, after receipt of a proper written redemption
request. Dividends are paid up to and including the day that a redemption
request is processed.
TELEPHONE REDEMPTION
Shares may be redeemed by telephoning the Trust. Telephone instructions may be
recorded and if reasonable procedures are not followed by the Trust, it may be
liable for losses due to unauthorized or fraudulent telephone instructions. An
authorization form permitting the Trust to accept telephone requests must first
be completed. Authorization forms and information on this service are available
from Federated Securities Corp.
If the redemption request is received before 3:00 p.m. (Eastern time), the
proceeds will be wired the same day to the shareholder's account at a domestic
commercial bank which is a member of the Federal Reserve System, and those
shares redeemed will not be entitled to that day's dividend. A daily dividend
will be paid on shares redeemed if the redemption request is received after 3:00
p.m. (Eastern time). However, the proceeds are not wired until the following
business day. Under limited circumstances, arrangements may be made with the
distributor for same-day payment of proceeds, without that day's dividend, for
redemption requests received before 3:00 p.m. (Eastern time).
In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If such a case should occur, another
method of redemption, such as "By Mail", should be considered. If at any time
the Trust shall determine it necessary to terminate or modify this method of
redemption, shareholders would be promptly notified.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Trust may
redeem shares in any account, except accounts maintained by retirement plans,
and pay the proceeds to the shareholder if the account balance falls below a
required minimum value of $25,000 due to shareholder redemptions.
Before shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional shares to meet the minimum
requirement.
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS
Each share of the Trust gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of each portfolio
in the Trust have equal voting rights, except that in matters affecting only a
particular portfolio, only shares of that portfolio are entitled to vote. As a
Massachusetts business trust, the Trust is not required to hold annual
shareholder meetings. Shareholder approval will be sought only for certain
changes in the Trust's operation and for the election of Trustees under certain
circumstances.
Trustees may be removed by the Trustees or by shareholders at a special meeting.
A special meeting of the shareholders for this purpose shall be called by the
Trustees upon the written request of shareholders owning at least 10% of the
outstanding shares of the Trust.
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.
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Trust will pay no federal income tax because it expects to meet requirements
of the Internal Revenue Code applicable to regulated investment companies and to
receive the special tax treatment afforded to such companies.
Unless otherwise exempt, shareholders are required to pay federal income tax on
any dividends and other distributions received. This applies whether dividends
and distributions are received in cash or as additional shares.
PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES
In the opinion of Houston, Houston & Donnelly, counsel to the Trust, shares may
be subject to personal property taxes imposed by counties, municipalities, and
school districts in Pennsylvania to the extent that the portfolio securities in
the Trust would be subject to such taxes if owned directly by residents of those
jurisdictions.
OTHER STATE AND LOCAL TAXES. Shareholder are urged to consult their own tax
advisers regarding the status of their accounts under state and local tax laws.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time the Trust advertises its yield and effective yield.
Yield represents the annualized rate of income earned on an investment over a
seven-day period. It is the annualized dividends earned during the period on an
investment shown as a percentage of the investment. The effective yield is
calculated similarly to the yield, but when annualized, the income earned by an
investment is assumed to be reinvested daily. The effective yield will be
slightly higher than the yield because of the compounding effect of this assumed
reinvestment.
Advertisements and sales literature may also refer to total return. Total return
represents the change, over a specified period of time, in the value of an
investment in the Trust after reinvesting all income distributions. It is
calculated by dividing that change by the initial investment and is expressed as
a percentage.
From time to time, advertisements for the Trust may refer to ratings, rankings,
and other information in certain financial publications and/or compare the
Trust's performance to certain indices.
MONEY MARKET TRUST
PORTFOLIO OF INVESTMENTS
JULY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- ---------------------------------------------------------------------------------- --------------
BANK NOTES--4.9%
- -------------------------------------------------------------------------------------------------
BANKING--4.9%
----------------------------------------------------------------------------------
$ 5,000,000 Bank One, Milwaukee, WI N.A., 5.960%, 9/11/1995 $ 5,000,330
----------------------------------------------------------------------------------
5,000,000 Mellon Bank N.A., Pittsburgh, PA, 6.240%, 11/14/1995 5,000,000
----------------------------------------------------------------------------------
15,000,000 State Street Bank and Trust Co., 5.980%, 9/6/1995 15,000,000
---------------------------------------------------------------------------------- --------------
TOTAL BANK NOTES 25,000,330
---------------------------------------------------------------------------------- --------------
BANKERS ACCEPTANCE--1.0%
- -------------------------------------------------------------------------------------------------
BANKING--1.0%
----------------------------------------------------------------------------------
5,000,000 Republic National Bank of New York, 5.661%, 1/8/1996 4,877,556
---------------------------------------------------------------------------------- --------------
TOTAL BANKERS ACCEPTANCE 4,877,556
---------------------------------------------------------------------------------- --------------
(A) COMMERCIAL PAPER--55.2%
- -------------------------------------------------------------------------------------------------
BANKING--1.9%
----------------------------------------------------------------------------------
10,000,000 Republic New York Corp., 5.717%, 1/25/1996 9,727,125
---------------------------------------------------------------------------------- --------------
FINANCE-COMMERCIAL--30.1%
----------------------------------------------------------------------------------
24,000,000 Asset Securitization Cooperative Corp., 5.739%-6.107%, 8/16/1995-
10/26/1995 23,788,193
----------------------------------------------------------------------------------
18,000,000 CIESCO, Inc., 5.727%-6.027%, 8/11/1995-10/13/1995 17,916,315
----------------------------------------------------------------------------------
13,000,000 CIT Group Holdings, Inc., 5.778%-6.270%, 8/1/1995-12/19/1995 12,830,656
----------------------------------------------------------------------------------
18,000,000 Corporate Asset Funding Co., Inc. (CAFCO), 5.766%-6.338%,
9/22/1995-11/7/1995 17,768,272
----------------------------------------------------------------------------------
20,000,000 Falcon Asset Securitization Corp., 5.794%-5.795%, 1/22/1996 19,455,767
----------------------------------------------------------------------------------
21,000,000 General Electric Capital Corp., 5.747%-6.453%, 8/8/1995-12/4/1995 20,792,591
----------------------------------------------------------------------------------
25,500,000 Preferred Receivables Funding Co. (PREFCO), 5.604%-5.873%,
9/14/1995-1/10/1996 25,054,477
----------------------------------------------------------------------------------
15,000,000 Sheffield Receivables Corp., 6.101%-6.108%, 8/10/1995-8/16/1995 14,967,500
---------------------------------------------------------------------------------- --------------
Total 152,573,771
---------------------------------------------------------------------------------- --------------
</TABLE>
MONEY MARKET TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- ---------------------------------------------------------------------------------- --------------
(A) COMMERCIAL PAPER--CONTINUED
- -------------------------------------------------------------------------------------------------
FINANCE-RETAIL--9.6%
----------------------------------------------------------------------------------
$ 10,000,000 Associates Corp. of North America, 6.018%, 8/8/1995 $ 9,988,469
----------------------------------------------------------------------------------
25,000,000 Ford Credit Receivables Funding, Inc., 5.720%-6.037%, 8/18/1995-
10/11/1995 24,895,826
----------------------------------------------------------------------------------
13,800,000 New Center Asset Trust, 6.227%-6.609%, 8/11/1995-10/24/1995 13,701,133
---------------------------------------------------------------------------------- --------------
Total 48,585,428
---------------------------------------------------------------------------------- --------------
INSURANCE--5.6%
----------------------------------------------------------------------------------
3,000,000 Marsh & McLennan Cos., Inc., 5.944%, 12/1/1995 2,941,338
----------------------------------------------------------------------------------
25,899,000 Prospect Street Senior Portfolio, L.P., (Guaranteed by Financial Security
Assurance, Inc.), 5.806%-6.461%, 8/18/1995-10/18/1995 25,698,791
---------------------------------------------------------------------------------- --------------
Total 28,640,129
---------------------------------------------------------------------------------- --------------
OIL & OIL FINANCE--4.1%
----------------------------------------------------------------------------------
11,000,000 Chevron Transport Corp., (Guaranteed by Chevron Corp.), 6.038%-6.115%,
8/7/1995-8/11/1995 10,982,471
----------------------------------------------------------------------------------
10,000,000 Koch Industries, Inc., 5.851%, 8/1/1995 10,000,000
---------------------------------------------------------------------------------- --------------
Total 20,982,471
---------------------------------------------------------------------------------- --------------
PHARMACEUTICALS AND HEALTH CARE--1.0%
----------------------------------------------------------------------------------
5,000,000 Schering Corp., (Guaranteed by Schering Plough Corp.), 6.455%,
8/11/1995 4,991,319
---------------------------------------------------------------------------------- --------------
TELECOMMUNICATIONS--2.9%
----------------------------------------------------------------------------------
15,000,000 Ameritech Capital Funding Corp., (Guaranteed by Ameritech Corp.), 5.781%-5.801%,
12/1/1995-1/22/1996 14,648,900
---------------------------------------------------------------------------------- --------------
TOTAL COMMERCIAL PAPER 280,149,143
---------------------------------------------------------------------------------- --------------
(B) VARIABLE RATE OBLIGATIONS--32.9%
- -------------------------------------------------------------------------------------------------
BANKING--14.7%
----------------------------------------------------------------------------------
21,615,000 Kenny, Donald R. and Cheryl A., (Huntington National Bank, Columbus, OH LOC),
5.890%, 8/3/1995 21,615,000
----------------------------------------------------------------------------------
5,100,000 Melberger, Clifford K. and Ruth B., (PNC Bank, Northeast, PA LOC), 5.869%,
8/7/1995 5,100,000
----------------------------------------------------------------------------------
</TABLE>
MONEY MARKET TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- ---------------------------------------------------------------------------------- --------------
(B) VARIABLE RATE OBLIGATIONS--CONTINUED
- -------------------------------------------------------------------------------------------------
BANKING--CONTINUED
----------------------------------------------------------------------------------
$ 7,450,000 Scranton Times, L.P., (PNC Bank, Northeast, PA LOC), 5.869%,
8/7/1995 $ 7,450,000
----------------------------------------------------------------------------------
7,300,000 Shamrock Communications, (PNC Bank, Northeast, PA LOC), 5.869%, 8/7/1995 7,300,000
----------------------------------------------------------------------------------
19,000,000 (+)SMM Trust, Series 1994-B, (Guaranteed by Morgan Guaranty Trust Co., New York),
6.205%, 8/11/1995 18,999,702
----------------------------------------------------------------------------------
8,000,000 (+)SMM Trust, Series 1995-I, (Guaranteed by Morgan Guaranty Trust Co., New York),
5.895%, 8/1/1995 7,998,078
----------------------------------------------------------------------------------
5,990,000 Westminster Village Terre Haute, Inc., (Huntington National Bank, Columbus, OH
LOC), 5.890%, 8/3/1995 5,990,000
---------------------------------------------------------------------------------- --------------
Total 74,452,780
---------------------------------------------------------------------------------- --------------
ELECTRICAL EQUIPMENT--4.5%
----------------------------------------------------------------------------------
4,765,830 Marta Leasing Ltd., (Guaranteed by General Electric Co.), 5.869%,
8/7/1995 4,765,830
----------------------------------------------------------------------------------
18,209,791 Northwest Airlines, Inc., (Guaranteed by General Electric Co.), 5.897%, 8/7/1995 18,209,791
---------------------------------------------------------------------------------- --------------
Total 22,975,621
---------------------------------------------------------------------------------- --------------
FINANCE-COMMERCIAL--3.9%
----------------------------------------------------------------------------------
19,800,000 Money Market Auto Loan Trust, (Guaranteed by Cap MAC), 6.015%, 8/15/1995 19,800,000
---------------------------------------------------------------------------------- --------------
FINANCE-RETAIL--4.9%
----------------------------------------------------------------------------------
25,000,000 Carco Auto Loan Master Trust, Series 1993-2, Class A1, 5.785%,
8/15/1995 25,000,000
---------------------------------------------------------------------------------- --------------
INSURANCE--4.9%
----------------------------------------------------------------------------------
25,000,000 (+)Peoples Security Life Insurance, 6.300%, 8/1/1995 25,000,000
---------------------------------------------------------------------------------- --------------
TOTAL VARIABLE RATE OBLIGATIONS 167,228,401
---------------------------------------------------------------------------------- --------------
</TABLE>
MONEY MARKET TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- ---------------------------------------------------------------------------------- --------------
(C) REPURCHASE AGREEMENTS--6.0%
- -------------------------------------------------------------------------------------------------
$ 22,000,000 Bear, Stearns and Co., Inc., 5.810%, dated 7/31/1995, due 8/1/1995 $ 22,000,000
----------------------------------------------------------------------------------
1,000,000 Nikko Securities Co. International, Inc., 5.950%, dated 7/31/1995, due 8/1/1995 1,000,000
----------------------------------------------------------------------------------
7,090,000 PaineWebber, Inc., 5.850%, dated 7/31/1995, due 8/1/1995 7,090,000
---------------------------------------------------------------------------------- --------------
TOTAL REPURCHASE AGREEMENTS 30,090,000
---------------------------------------------------------------------------------- --------------
TOTAL INVESTMENTS, AT AMORTIZED COST (D) $ 507,345,430
---------------------------------------------------------------------------------- --------------
</TABLE>
(+) Restricted Securities--Investment in securities not registered under the
Securities Act of 1933. At the end of the period, these securities had a
total value of $51,997,780 and amounted to 10.2% of net assets.
(a) Each issue shows the rate of discount at the time of purchase for discount
issues or the coupon for interest bearing issues.
(b) Current rate and next reset date shown.
(c) The repurchase agreements are fully collateralized by U.S. government
and/or agency obligations based on market prices at the date of the
portfolio. The investments in the repurchase agreements are through
participation in joint accounts with other Federated funds.
(d) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($507,271,695) at July 31, 1995.
The following acronym is used throughout this portfolio:
LOC--Letter of Credit
(See Notes which are an integral part of the Financial Statements)
MONEY MARKET TRUST
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------------------------
Investments in securities, at value $ 507,345,430
- -------------------------------------------------------------------------------------------------
Cash 1,050,488
- -------------------------------------------------------------------------------------------------
Income receivable 1,150,367
- -------------------------------------------------------------------------------------------------
Receivable for shares sold 28,450
- ------------------------------------------------------------------------------------------------- --------------
Total assets 509,574,735
- -------------------------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------------------------------------
Payable for shares redeemed $ 167,483
- -----------------------------------------------------------------------------------
Income distribution payable 2,024,425
- -----------------------------------------------------------------------------------
Accrued expenses 111,132
- ----------------------------------------------------------------------------------- ------------
Total liabilities 2,303,040
- ------------------------------------------------------------------------------------------------- --------------
NET ASSETS for 507,271,695 shares outstanding $ 507,271,695
- ------------------------------------------------------------------------------------------------- --------------
NET ASSET VALUE, Offering Price, and Redemption Proceeds per Share:
($507,271,695 / 507,271,695 shares outstanding) $1.00
- ------------------------------------------------------------------------------------------------- --------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MONEY MARKET TRUST
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- --------------------------------------------------------------------------------------------------
Interest $ 31,954,692
- --------------------------------------------------------------------------------------------------
EXPENSES:
- --------------------------------------------------------------------------------------------------
Investment advisory fee $ 2,213,807
- ------------------------------------------------------------------------------------
Administrative personnel and services fee 418,963
- ------------------------------------------------------------------------------------
Custodian fees 170,647
- ------------------------------------------------------------------------------------
Transfer agent fees and dividend disbursing agent fees and expenses 40,012
- ------------------------------------------------------------------------------------
Directors'/Trustees' fees 13,114
- ------------------------------------------------------------------------------------
Auditing fees 14,365
- ------------------------------------------------------------------------------------
Legal fees 9,385
- ------------------------------------------------------------------------------------
Portfolio accounting fees 87,745
- ------------------------------------------------------------------------------------
Shareholder services fee 1,383,631
- ------------------------------------------------------------------------------------
Share registration costs 35,626
- ------------------------------------------------------------------------------------
Printing and postage 10,031
- ------------------------------------------------------------------------------------
Insurance premiums 33,300
- ------------------------------------------------------------------------------------
Taxes 11,697
- ------------------------------------------------------------------------------------
Miscellaneous 5,196
- ------------------------------------------------------------------------------------ ------------
Total expenses 4,447,519
- ------------------------------------------------------------------------------------
Deduct--
- ----------------------------------------------------------------------
Waiver of investment advisory fee $ 803,723
- ----------------------------------------------------------------------
Waiver of shareholder services fee 1,106,903 1,910,626
- ---------------------------------------------------------------------- ------------ ------------
Net expenses 2,536,893
- -------------------------------------------------------------------------------------------------- -------------
Net investment income $ 29,417,799
- -------------------------------------------------------------------------------------------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MONEY MARKET TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
<S> <C> <C>
1995 1994
INCREASE (DECREASE) IN NET ASSETS:
- ----------------------------------------------------------------------------
OPERATIONS--
- ----------------------------------------------------------------------------
Net investment income $ 29,417,799 $ 19,609,778
- ---------------------------------------------------------------------------- ----------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ----------------------------------------------------------------------------
Distributions from net investment income (29,417,799) (19,609,778)
- ---------------------------------------------------------------------------- ----------------- -----------------
SHARE TRANSACTIONS--
- ----------------------------------------------------------------------------
Proceeds from sale of Shares 2,689,667,535 3,027,736,629
- ----------------------------------------------------------------------------
Net asset value of Shares issued to shareholders
in payment of distributions declared 4,510,492 3,874,627
- ----------------------------------------------------------------------------
Cost of Shares redeemed (2,726,889,637) (3,204,204,720)
- ---------------------------------------------------------------------------- ----------------- -----------------
Change in net assets resulting from share transactions (32,711,610) (172,593,464)
- ---------------------------------------------------------------------------- ----------------- -----------------
Change in net assets (32,711,610) (172,593,464)
- ----------------------------------------------------------------------------
NET ASSETS:
- ----------------------------------------------------------------------------
Beginning of period 539,983,305 712,576,769
- ---------------------------------------------------------------------------- ----------------- -----------------
End of period $ 507,271,695 $ 539,983,305
- ---------------------------------------------------------------------------- ----------------- -----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MONEY MARKET TRUST
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1995
- --------------------------------------------------------------------------------
(1) ORGANIZATION
The Trust is registered under the Investment Company Act of 1940, as amended
(the "Act"), as a diversified, open-end management investment company.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Trust's use of the amortized cost method to
value its portfolio securities is in accordance with Rule 2a-7 under the
Act.
REPURCHASE AGREEMENTS--It is the policy of the Trust to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Trust to monitor, on a daily basis, the market value of each repurchase
agreement's underlying collateral to ensure that the value of collateral at
least equals the repurchase price to be paid under the repurchase agreement
transaction.
The Trust will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Trust's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the
"Trustees"). Risks may arise from the potential inability of counterparties
to honor the terms of the repurchase agreement. Accordingly, the Trust
could receive less than the repurchase price on the sale of collateral
securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Trust's policy to comply with the provisions of
the Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Trust may engage in
when-issued or delayed delivery transactions. The Trust records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment
for the securities purchased. Securities purchased on a when-issued or
delayed delivery basis are marked to market daily and begin earning
interest on the settlement date.
RESTRICTED SECURITIES--Restricted securities are securities that may only
be resold upon registration under federal securities laws or in
transactions exempt from such registration. In some cases, the issuer of
restricted securities has agreed to register such securities for resale, at
the issuer's expense, either upon demand by the Trust or in connection with
another registered offering of the securities. Such restricted securities
may be determined to be liquid under criteria established by the Board of
Trustees. The Trust will not incur any registration costs upon such
resales. Restricted securities are valued at amortized cost in accordance
with Rule 2a-7 under the Investment Company Act of 1940. Additional
information on each restricted security held at July 31, 1995 is as
follows:
<TABLE>
<CAPTION>
Acquisition Acquisition
SECURITY Date Cost
<S> <C> <C>
SMM Trust Series 1994-B 9/7/94 $ 18,995,501
SMM Trust Series 1995-I 5/31/95 7,997,684
Peoples Security Life Insurance 7/6/95 25,000,000
</TABLE>
OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value). At July
31, 1995, capital paid-in aggregated $507,271,695. Transactions in shares were
as follows:
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
<S> <C> <C>
1995 1994
- --------------------------------------------------------------------------- ---------------- ----------------
Shares sold 2,689,667,535 3,027,736,629
- ---------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions
declared 4,510,492 3,874,627
- ---------------------------------------------------------------------------
Shares redeemed (2,726,889,637) (3,204,204,720)
- --------------------------------------------------------------------------- ---------------- ----------------
Net change resulting from share transactions (32,711,610) (172,593,464)
- --------------------------------------------------------------------------- ---------------- ----------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Research, the Trust's investment adviser (the
"Adviser"), receives for its services an annual investment advisory fee equal to
.40 of 1% of the Trust's average daily net assets. The Adviser will waive, to
the extent of its advisory fee, the amount, if any, by
which the Trust's aggregate annual operating expenses (excluding interest,
taxes, brokerage commissions, expenses of registering and qualifying the Trust
and its shares under federal and state law, expenses of withholding taxes, and
extraordinary expenses) exceed .45 of 1% of average daily net assets of the
Trust.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Trust with administrative
personnel and services. The FAS fee is based on the level of average aggregate
daily net assets of all funds advised by subsidiaries of Federated Investors for
the period. The administrative fee received during the period of the
Administrative Services Agreement shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Trust will pay FSS up to .25 of
1% of average daily net assets of the Trust for the period. This fee is to
obtain certain personal services for shareholders and to maintain the
shareholder accounts. FSS may voluntarily choose to waive a portion of this fee.
FSS can modify or terminate this voluntary waiver at any time at its sole
discretion.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated
Services Company ("FServ") serves as transfer and dividend disbursing agent for
the Trust. This fee is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Trust's accounting records for
which it receives a fee. The fee is based on the level of the Trust's average
daily net assets for the period plus out-of-pocket expenses.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
To the Board of Trustees and Shareholders of
MONEY MARKET TRUST:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Money Market Trust as of July 31, 1995, the
related statement of operations for the year then ended, the statement of
changes in net assets for the years ended July 31, 1995 and 1994, and the
financial highlights (see page 2 of the prospectus) for each of the years in the
ten-year period ended July 31, 1995. These financial statements and financial
highlights are the responsibility of the Trust's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned at July
31, 1995 by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe our
audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Money Market Trust
as of July 31, 1995, the results of its operations, the changes in its net
assets, and its financial highlights for the respective stated periods in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Pittsburgh, Pennsylvania
September 15, 1995
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Money Market Trust Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- -----------------------------------------------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, PA 15222-3779
- -----------------------------------------------------------------------------------------------------------------------
Investment Adviser
Federated Research Federated Investors Tower
Pittsburgh, PA 15222-3779
- -----------------------------------------------------------------------------------------------------------------------
Custodian
State Street Bank and Trust Company P.O. Box 8600
Boston, MA 02266-8600
- -----------------------------------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company P.O. Box 8600
Boston, MA 02266-8600
- -----------------------------------------------------------------------------------------------------------------------
Independent Auditors
Deloitte & Touche LLP 2500 One PPG Place
Pittsburgh, PA 15222-5401
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
MONEY MARKET TRUST
PROSPECTUS
An Open-End Management
Investment Company
September 30, 1995
609900105
8083102A (9/95)
Money Market Trust
Statement of Additional Information
This Statement of Additional Information should be read with the
prospectus of Money Market Trust (the "Trust") dated September 30, 1995.
This Statement is not a prospectus. To receive a copy of a prospectus,
write or call the Trust.
Federated Investors Tower
Pittsburgh, PA 15222-3779
Statement dated September 30, 1995
Federated Securities Corp.
Distributor
A subsidiary of Federated
Investors
Table of Contents
Investment Policies 1
Bank Instruments 1
When-Issued And Delayed Delivery
Transactions 1
Repurchase Agreements 1
Investment Limitations 1
Selling Short and Buying on Margin 1
Borrowing Money 1
Pledging Assets 1
Investing in Commodities, Minerals,
or Real Estate 1
Underwriting 2
Lending Cash or Securities 2
Acquiring Securities 2
Diversification of Investments 2
Investing in Restricted Securities 2
Investing in New Issuers 2
Investing in Put and Call Options2
Investing in Foreign Securities 2
Investing in Issuers Whose
Securities Are Owned by Officers
of the Trust 2
Concentration of Investments 2
Issuing Senior Securities 2
Brokerage Transactions 3
Money Market Trust Management 3
Trustees Compensation 8
Trust Ownership 9
Trustee Liability 9
Investment Advisory Services 9
Investment Adviser 9
Advisory Fees 9
Trust Administration 10
Shareholder Services Agreement 10
Determining Net Asset Value 10
Redemption in Kind 11
The Trust's Tax Status 11
Performance Information 11
Yield 11
Effective Yield 11
Total Return 11
Performance Comparisons 12
About Federated Investors 12
Investment Policies
Unless indicated otherwise, the policies described below may not be changed by
the Board of Trustees without shareholder approval. Shareholders will be
notified before any material change in these policies becomes effective.
Bank Instruments
The instruments of banks and savings and loans whose deposits are insured by
the Bank Insurance Fund ("BIF") or the Savings Association Insurance Fund
("SAIF"), such as certificates of deposit, demand and time deposits, savings
shares, and bankers' acceptances, are not necessarily guaranteed by those
organizations.
When-Issued And Delayed Delivery Transactions
These transactions are made to secure what is considered to be an advantageous
price or yield for the Trust. No fees or other expenses, other than normal
transaction costs, are incurred. However, liquid assets of the Trust
sufficient to make payment for the securities to be purchased are segregated
on the Trust's records at the trade date. These assets are marked to market
daily and are maintained until the transaction has been settled. As a matter
of operating policy, which may be changed without shareholder approval, the
Trust does not intend to engage in when-issued and delayed delivery
transactions to an extent that would cause the segregation of more than 20% of
the total value of its assets.
Repurchase Agreements
The Trust or its custodian will take possession of the U.S. government
securities or certificates of deposit subject to repurchase agreements, and
these securities will be marked to market daily. In the event that a
defaulting seller filed for bankruptcy or became insolvent, disposition of
such securities by the Trust might be delayed pending court action. The Trust
believes that under the regular procedures normally in effect for custody of
the Trust's portfolio securities subject to repurchase agreements, a court of
competent jurisdiction would rule in favor of the Trust and allow retention or
disposition of such securities. The Trust will only enter into repurchase
agreements with banks and other recognized financial institutions, such as
broker/dealers, which are deemed by the Trust's adviser to be creditworthy
pursuant to guidelines established by the Trustees.
Investment Limitations
Selling Short and Buying on Margin
The Trust will not sell any securities short or purchase any securities on
margin but may obtain such short-term credits as may be necessary for
clearance of purchases and sales of securities.
Borrowing Money
The Trust will not borrow money except as a temporary measure for
extraordinary or emergency purposes and then only in amounts not in excess of
5% of the value of its total assets or in an amount up to one-third of the
value of its total assets, including the amount borrowed, in order to meet
redemption requests without immediately selling any portfolio securities (any
such borrowings under this section will not be collateralized).
Pledging Assets
The Trust will not pledge securities.
Investing in Commodities, Minerals, or Real Estate
The Trust will not invest in commodities, commodity contracts, oil, gas, or
other mineral programs or real estate, except that it may purchase money
market instruments issued by companies which invest in or sponsor interests
therein.
Underwriting
The Trust will not underwrite any issue of securities, except as it may be
deemed to be an underwriter under the Securities Act of 1933 in connection
with the sale of restricted securities which the Trust may purchase pursuant
to its investment objective, policies, and limitations.
Lending Cash or Securities
The Trust will not lend any assets of the Trust, except that it may purchase
or hold money market instruments, including repurchase agreements and variable
amount and variable rate notes, permitted by its investment objective and
policies.
Acquiring Securities
The Trust will not acquire the voting securities of any issuers. It will not
invest in securities issued by any other investment company, except as part of
a merger, consolidation, or other acquisition. It will not invest in
securities of a company for the purpose of exercising control or management.
Diversification of Investments
The Trust will not invest more than 5% of its total assets in the securities
of any one issuer (except cash or cash items, repurchase agreements, and
securities issued by the U.S. government, its agencies, or instrumentalities).
Investing in Restricted Securities
The Trust will not invest more than 10% of its total assets in securities
subject to restrictions on resale under the Federal securities laws (except
for commercial paper issued under Section 4(2) of the Securities Act of 1933).
Investing in New Issuers
The Trust will not invest more than 5% of the value of its total assets in
securities of unseasoned issuers which have records of less than three years
of continuous operations, including the operation of any predecessor.
Investing in Put and Call Options
The Trust will not invest in puts, calls, straddles, spreads, or any
combination thereof.
Investing in Foreign Securities
The Trust will not invest in foreign securities which are not publicly traded
in the United States.
Investing in Issuers Whose Securities Are Owned by Officers of the Trust
The Trust will not purchase or retain the securities issued by an issuer, any
of whose officers, directors, or security holders is an officer, Director, or
Trustee of the Trust or its investment adviser if, after the purchase of the
securities of such issuer by the Trust, one or more of those officers,
Directors, and Trustees owning individually more than 1/2 of 1% of the
issuer's securities, together own beneficially more than 5% of the issuer's
securities.
Concentration of Investments
The Fund will not purchase securities if as a result of such purchase more
than 25% of the value of its total assets would be invested in any one
industry. However, investing in bank instruments such as time and demand
deposits and certificates of deposit, U.S. Treasury Bills or securities issued
or guaranteed by the U.S. Government, its agencies or instrumentalities, or
instruments secured by these money market instruments, such as repurchase
agreements for Government securities, shall not be considered investments in
any one industry.
Issuing Senior Securities
The Trust will not issue senior securities.
The above limitations cannot be changed without shareholder approval.
For purposes of the above limitations, the Trust considers instruments issued
by a U.S. branch of a domestic bank or savings and loan having capital,
surplus, and undivided profits in excess of $100,000,000 at the time of
investment to be "cash items." Except with respect to borrowing money, if a
percentage limitation is adhered to at the time of investment, a later
increase or decrease in percentage resulting from any change in value or net
assets will not result in a violation of such limitation.
The Trust did not borrow money or pledge securities in excess of 5% of the
value of its net assets during the last fiscal year and has no present intent
to do so during the coming fiscal year.
Brokerage Transactions
When selecting brokers and dealers to handle the purchase and sale of
portfolio instruments, the adviser looks for prompt execution of the order at
a favorable price. In working with dealers, the adviser will generally use
those who are recognized dealers in specific portfolio instruments, except
when a better price and execution of the order can be obtained elsewhere. The
adviser makes decisions on portfolio transactions and selects brokers and
dealers subject to guidelines established by the Board of Trustees. The
adviser may select brokers and dealers who offer brokerage and research
services. These services may be furnished directly to the Trust or to the
adviser and may include: advice as to the advisability of investing in
securities; security analysis and reports; economic studies; industry studies;
receipt of quotations for portfolio evaluations; and similar services.
Research services provided by brokers and dealers may be used by the adviser
or its affiliates in advising the Trust and other accounts. To the extent
that receipt of these services may supplant services for which the adviser or
its affiliates might otherwise have paid, it would tend to reduce their
expenses. The adviser and its affiliates exercise reasonable business
judgment in selecting brokers who offer brokerage and research services to
execute securities transactions. They determine in good faith that
commissions charged by such persons are reasonable in relationship to the
value of the brokerage and research services provided. During the fiscal
years ended July 31, 1995, 1994, and 1993, the Trust paid no brokerage
commissions. Although investment decisions for the Trust are made
independently from those of the other accounts managed by the adviser,
investments of the type the Trust may make may also be made by those other
accounts. When the Trust and one or more other accounts managed by the
adviser are prepared to invest in, or desire to dispose of, the same security,
available investments or opportunities for sales will be allocated in a manner
believed by the adviser to be equitable to each. In some cases, this
procedure may adversely affect the price paid or received by the Trust or the
size of the position obtained or disposed of by the Trust. In other cases,
however, it is believed that coordination and the ability to participate in
volume transactions will be to the benefit of the Trust.
Money Market Trust Management
Officers and Trustees are listed with their addresses, birthdates, present
positions with Money Market Trust, and principal occupations.
John F. Donahue@*
Federated Investors Tower
Pittsburgh, PA
Birthdate: July 28, 1924
Chairman and Trustee
Chairman and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; Chairman and Director, Federated Research
Corp.; Chairman, Passport Research, Ltd.; Chief Executive Officer and
Director, Trustee, or Managing General Partner of the Funds. Mr. Donahue is
the father of J. Christopher Donahue, Executive Vice President of the Company.
Thomas G. Bigley
28th Floor, One Oxford Centre
Pittsburgh, PA
Birthdate: February 3, 1934
Trustee
Director, Oberg Manufacturing Co.; Chairman of the Board, Children's Hospital
of Pittsburgh; Director, Trustee, or Managing General Partner of the Funds;
formerly, Senior Partner, Ernst & Young LLP.
John T. Conroy, Jr.
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL
Birthdate: June 23, 1937
Trustee
President, Investment Properties Corporation; Senior Vice-President, John R.
Wood and Associates, Inc., Realtors; President, Northgate Village Development
Corporation; Partner or Trustee in private real estate ventures in Southwest
Florida; Director, Trustee, or Managing General Partner of the Funds;
formerly, President, Naples Property Management, Inc.
William J. Copeland
One PNC Plaza - 23rd Floor
Pittsburgh, PA
Birthdate: July 4, 1918
Trustee
Director and Member of the Executive Committee, Michael Baker, Inc.; Director,
Trustee, or Managing General Partner of the Funds; formerly, Vice Chairman and
Director, PNC Bank, N.A., and PNC Bank Corp. and Director, Ryan Homes, Inc.
James E. Dowd
571 Hayward Mill Road
Concord, MA
Birthdate: May 18, 1922
Trustee
Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director, Trustee,
or Managing General Partner of the Funds.
Lawrence D. Ellis, M.D.*
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA
Birthdate: October 11, 1932
Trustee
Professor of Medicine and Member, Board of Trustees, University of Pittsburgh;
Medical Director, University of Pittsburgh Medical Center - Downtown; Member,
Board of Directors, University of Pittsburgh Medical Center; formerly,
Hematologist, Oncologist, and Internist, Presbyterian and Montefiore
Hospitals; Director, Trustee, or Managing General Partner of the Funds.
Edward L. Flaherty, Jr.@
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: June 18, 1924
Trustee
Attorney-at-law; Shareholder, Henny, Kochuba, Meyer and Flaherty; Director,
Eat'N Park Restaurants, Inc., and Statewide Settlement Agency, Inc.; Director,
Trustee, or Managing General Partner of the Funds; formerly, Counsel, Horizon
Financial, F.A., Western Region.
Peter E. Madden
70 Westcliff Road
Westin, MA
Birthdate: March 16, 1942
Trustee
Consultant; State Representative, Commonwealth of Massachusetts; Director,
Trustee, or Managing General Partner of the Funds; formerly, President, State
Street Bank and Trust Company and State Street Boston Corporation.
Gregor F. Meyer
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: October 6, 1926
Trustee
Attorney-at-law; Shareholder, Henny, Kochuba, Meyer and Flaherty; Chairman,
Meritcare, Inc.; Director, Eat'N Park Restaurants, Inc.; Director, Trustee, or
Managing General Partner of the Funds.
John E. Murray, Jr., J.D., S.J.D.
President, Duquesne University
Pittsburgh, PA
Birthdate: December 20, 1932
Trustee
President, Law Professor, Duquesne University; Consulting Partner, Mollica,
Murray and Hogue; Director, Trustee or Managing General Partner of the Funds.
Wesley W. Posvar
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA
Birthdate: September 14, 1925
Trustee
Professor, International Politics and Management Consultant; Trustee, Carnegie
Endowment for International Peace, RAND Corporation, Online Computer Library
Center, Inc., and U.S. Space Foundation; Chairman, Czecho Management Center;
Director, Trustee, or Managing General Partner of the Funds; President
Emeritus, University of Pittsburgh; founding Chairman, National Advisory
Council for Environmental Policy and Technology and Federal Emergency
Management Advisory Board.
Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA
Birthdate: June 21, 1935
Trustee
Public relations/marketing consultant; Conference Coordinator, Non-profit
entities; Director, Trustee, or Managing General Partner of the Funds.
Glen R. Johnson
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 2, 1929
President
Trustee, Federated Investors; President and/or Trustee of some of the Funds;
staff member, Federated Securities Corp. and Federated Administrative
Services.
J. Christopher Donahue
Federated Investors Tower
Pittsburgh, PA
Birthdate: April 11, 1949
Executive Vice President
President and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; President and Director, Federated
Research Corp.; President, Passport Research, Ltd.; Trustee, Federated
Administrative Services, Federated Services Company, and Federated
Shareholder Services; President or Vice President of the Funds; Director,
Trustee, or Managing General Partner of some of the Funds. Mr. Donahue is the
son of John F. Donahue, Chairman and Trustee of the Trust.
Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
Executive Vice President
Vice President, Treasurer, and Trustee, Federated Investors; Vice President
and Treasurer, Federated Advisers, Federated Management, Federated Research,
Federated Research Corp., and Passport Research, Ltd.; Executive Vice
President, Treasurer, and Director, Federated Securities Corp.; Trustee,
Federated Services Company and Federated Shareholder Services; Chairman,
Treasurer, and Trustee, Federated Administrative Services; Trustee or Director
of some of the Funds; Vice President and Treasurer of the Funds.
John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 26, 1938
Executive Vice President and Secretary
Vice President, Secretary, General Counsel, and Trustee, Federated Investors;
Vice President, Secretary, and Trustee, Federated Advisers, Federated
Management, and Federated Research; Vice President and Secretary, Federated
Research Corp. and Passport Research, Ltd.; Trustee, Federated Services
Company; Executive Vice President, Secretary, and Trustee, Federated
Administrative Services; Secretary and Trustee, Federated Shareholder
Services; Executive Vice President and Director, Federated Securities Corp.;
Vice President and Secretary of the Funds.
Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 17, 1923
Vice President
Executive Vice President and Trustee, Federated Investors; Director, Federated
Research Corp.; Chairman and Director, Federated Securities Corp.; President
or Vice President of some of the Funds; Director or Trustee of some of the
Funds.
David M. Taylor *
Federated Investors Tower
Pittsburgh, PA
Birthdate: January 13, 1947
Treasurer
Senior Vice President, Controller, and Trustee, Federated Investors;
Controller, Federated Advisers, Federated Management, Federated Research,
Federated Research Corp., and Passport Research, Ltd.; Senior Vice President,
Federated Shareholder Services; Senior Vice President, Federated
Administrative Services; Treasurer of the Funds.
I
Investment Company Act of 1940, as amended.
@ Member of the Executive Committee. The Executive Committee of the
Board of Trustees handles the responsibilities of the Board of
Trustees between meetings of the Board.
As used in the table above, "The Funds" and "Funds" mean the following
investment companies: American Leaders Fund, Inc.; Annuity Management Series;
Arrow Funds; Automated Government Money Trust; Blanchard Funds; Blanchard
Precious Metals, Inc.; Cash Trust Series II; Cash Trust Series, Inc.; DG
Investor Series; Edward D. Jones & Co. Daily Passport Cash Trust; Federated
ARMs Fund; Federated Equity Funds; Federated Exchange Fund, Ltd.; Federated
GNMA Trust; Federated Government Trust; Federated High Yield Trust; Federated
Income Securities Trust; Federated Income Trust; Federated Index Trust;
Federated Institutional Trust; Federated Master Trust; Federated Municipal
Trust; Federated Short-Term Municipal Trust; Federated Short-Term U.S.
Government Trust; Federated Stock Trust; Federated Tax-Free Trust; Federated
Total Return Series, Inc.; Federated U.S. Government Bond Fund; Federated U.S.
Government Securities Fund: 1-3 Years; Federated U.S, Government Securities
Fund: 3-5 Years; First Priority Funds; Fixed Income Securities, Inc.; Fortress
Adjustable Rate U.S. Government Fund, Inc.; Fortress Municipal Income Fund,
Inc.; Fortress Utility Fund, Inc.; Fund for U.S. Government Securities, Inc.;
Government Income Securities, Inc.; High Yield Cash Trust;; Insurance
Management Series; Intermediate Municipal Trust; International Series, Inc.;
Investment Series Funds, Inc.; Investment Series Trust; Liberty Equity Income
Fund, Inc.; Liberty High Income Bond Fund, Inc.; Liberty Municipal Securities
Fund, Inc.; Liberty U.S. Government Money Market Trust; Liberty Term Trust,
Inc. - 1999; Liberty Utility Fund, Inc.; Liquid Cash Trust; Managed Series
Trust; Money Market Management, Inc.; Money Market Obligations Trust; Money
Market Trust; Municipal Securities Income Trust; Newpoint Funds; 111 Corcoran
Funds; Peachtree Funds; The Planters Funds; RIMCO Monument Funds; The Shawmut
Funds; Star Funds; The Starburst Funds; The Starburst Funds II; Stock and Bond
Fund, Inc.; Sunburst Funds; Targeted Duration Trust; Tax-Free Instruments
Trust; Trademark Funds; Trust for Financial Institutions; Trust For Government
Cash Reserves; Trust for Short-Term U.S. Government Securities; Trust for U.S.
Treasury Obligations; The Virtus Funds; World Investment Series, Inc.
<TABLE>
<CAPTION>
Trustees Compensation
AGGREGATE
NAME , COMPENSATION
POSITION WITH FROM TOTAL COMPENSATION PAID
TRUST* FROM FUND COMPLEX +
<S> <C> <C>
John F. Donahue, $ 0 $-0- for the Trust and
Chairman and Trustee 68 other investment companies in the Fund Complex
Thomas G. Bigley $ 1,169 $20,688 for the Trust and
Trustee 49 other investment companies in the Fund Complex
John T. Conroy $ 1,546 $117,202 for the Trust and
Trustee 64 other investment companies in the Fund Complex
William J. Copeland $ 1,546 $117,202 for the Trust and
Trustee 64 other investment companies in the Fund Complex
J. Christopher Donahue $ 0 $-0- for the Trust and
Executive Vice President 14 other investment companies in the Fund Complex
and Trustee
James E. Dowd $ 1,546 $117,202 for the Trust and
Trustee 64 other investment companies in the Fund Complex
Lawrence D. Ellis, M.D. $ 1,371 $106,460 for the Trust and
Trustee 64 other investment companies in the Fund Complex
Edward L. Flaherty, Jr. $ 1,546 $117,202 for the Trust and
Trustee 64 other investment companies in the Fund Complex
Peter E. Madden $ 1,137 $90,563 for the Trust and
Trustee 64 other investment companies in the Fund Complex
Gregor F. Meyer $ 1,371 $106,460 for the Trust and
Trustee 64 other investment companies in the Fund Complex
John E. Murray, Jr. $ 779 $0 for the Trust and
Trustee 64 other investment companies in the Fund Complex
Wesley W. Posvar $ 1,371 $106,460 for the Trust and
Trustee 64 other investment companies in the Fund Complex
Marjorie P. Smuts $ 1,371 $106,460 for the Trust and
Trustee 64 other investment companies in the Fund
Complex
</TABLE>
Information is furnished for the fiscal year ended July 31, 1995.
+The information is provided for the last calendar year.
Trust Ownership
Officers and Trustees as a group own less than 1% of the Trust's outstanding
shares.
As of September 7, 1995, the following shareholders of record owned 5% or more
of the outstanding shares of the Trust: Fiduciary Trust Co. International, New
York City, New York, owned approximately 48,945,800 shares (9.98%), Enele-Co.,
Portland, Oregon, owned approximately 25,788,161 shares (5.26%), and First
Source Bank, South Bend, Indiana, owned approximately 25,391,390 shares
(5.18%).
Trustee Liability
The Declaration of Trust provides that the Trustees will not be liable for
errors of judgment or mistakes of fact or law. However, they are not
protected against any liability to which they would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of their office.
Investment Advisory Services
Investment Adviser
The Trust's investment adviser is Federated Research. It is a subsidiary of
Federated Investors. All the voting securities of Federated Investors are
owned by a trust, the trustees of which are John F. Donahue, his wife and his
son, J. Christopher Donahue.
The adviser shall not be liable to the Trust or any shareholder of the Trust
for any losses that may be sustained in the purchase, holding, or sale of any
security or for anything done or omitted by it, except acts or omissions
involving willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties imposed upon it by its contract with the Trust.
Advisory Fees
For its advisory services, Federated Research receives an annual investment
advisory fee as described in the prospectus. For the fiscal years ended July
31, 1995, 1994 and 1993, the adviser earned $2,213,807, $2,520,096, and
$3,331,606, respectively, of which $803,723, $727,018, and $501,415
respectively, were waived.
State Expense Limitations
The adviser has undertaken to comply with the expense limitations
established by certain states for investment companies whose shares are
registered for sale in those states. If the Trust's normal operating
expenses (including the investment advisory fee, but not including
brokerage commissions, interest, taxes, and extraordinary expenses)
exceed 2-1/2% per year of the first $30 million of average net assets,
2% per year of the next $70 million of average net assets, and 1-1/2%
per year of the remaining average net assets, the adviser will reimburse
the Fund for its expenses over the limitation.
If the Trust's monthly projected operating expenses exceed this
limitation, the investment advisory fee paid will be reduced by the
amount of the excess, subject to an annual adjustment. If the expense
limitation is exceeded, the amount to be reimbursed by the adviser will
be limited, in any single fiscal year, by the amount of the investment
advisory fees.
This arrangement is not part of the advisory contract and may be amended
or rescinded in the future.
Trust Administration
Federated Administrative Services, a subsidiary of Federated Investors,
provides administrative personnel and services to the Trust for a fee as
described in the prospectus. For the fiscal years ended July 31, 1995, 1994,
and 1993, the Administrator earned $418,963, $488,553 and $516,405
respectively. Dr. Henry J. Gailliot, an officer of Federated Research, the
adviser to the Trust, holds approximately 20% of the outstanding common stock
and serves as a director of Commercial Data Services, Inc., a company which
provides computer processing services to Federated Administrative Services.
Shareholder Services Agreement
This arrangement permits the payment of fees to Federated Shareholder Services
and financial institutions to cause services to be provided which are
necessary for the maintenance of shareholder accounts and to encourage
personal services to shareholders by a representative who has knowledge of the
shareholder's particular circumstances and goals. These activities and
services may include, but are not limited to: providing office space,
equipment, telephone facilities, and various clerical, supervisory, computer,
and other personnel as necessary or beneficial to establish and maintain
shareholder accounts and records; processing purchase and redemption
transactions and automatic investments of client account cash balances;
answering routine client inquiries; and assisting clients in changing dividend
options, account designations, and addresses. By adopting the Shareholder
Services Agreement, the Board of Trustees expects that the Trust will benefit
by: (1) providing personal services to shareholders; (2) investing shareholder
assets with a minimum of delay and administrative detail; (3) enhancing
shareholder recordkeeping systems; and (4) responding promptly to
shareholders' requests and inquiries concerning their accounts. For the
fiscal period ending July 31, 1995, the Trust incurred shareholder service
fees in the amount of $1,383,631, $1,106,903 of which was paid to financial
institutions.
Custodian and Portfolio Recordkeeper. State Street Bank and Trust Company,
Boston, MA, is custodian for the securities and cash of the Trust. Federated
Services Company, Pittsburgh, PA, provides certain accounting and
recordkeeping services with respect to the Trust's portfolio investments.
Transfer Agent. As transfer agent, Federated Services Company maintains all
necessary shareholder records. For its services, the transfer agent receives
a fee based on the number of shareholder accounts.
Determining Net Asset Value
The Trustees have decided that the best method for determining the value of
portfolio instruments is amortized cost. Under this method, portfolio
instruments are valued at the acquisition cost as adjusted for amortization of
premium or accumulation of discount rather than at current market value.
Accordingly, neither the amount of daily income nor the net asset value is
affected by any unrealized appreciation or depreciation of the portfolio. In
periods of declining interest rates, the indicated daily yield on shares of
the Trust computed by dividing the annualized daily income on the Trust's
portfolio by the net asset value computed as above may tend to be higher than
a similar computation made by using a method of valuation based upon market
prices and estimates. In periods of rising interest rates, the opposite may be
true.
The Trust's use of the amortized cost method of valuing portfolio instruments
depends on its compliance with certain conditions in Rule 2a-7 (the "Rule")
promulgated by the Securities and Exchange Commission under the Investment
Company Act of 1940. Under the Rule, the Trustees must establish procedures
reasonably designed to stabilize the net asset value per share, as computed
for purposes of distribution and redemption, at $1.00 per share, taking into
account current market conditions and the Trust's investment objective. The
procedures include monitoring the relationship between the amortized cost
value per share and the net asset value per share based upon available
indications of market value. The Trustees will decide what, if any, steps
should be taken if there is a difference of more than 0.5 of 1% between the
two values. The Trustees will take any steps they consider appropriate (such
as redemption in kind or shortening the average portfolio maturity) to
minimize any material dilution or other unfair results arising from
differences between the two methods of determining net asset value.
Redemption in Kind
The Trust is obligated to redeem shares solely in cash up to $250,000 or 1% of
the Trust's net asset value, whichever is less, for any one shareholder within
a 90-day period. Any redemption beyond this amount will also be in cash
unless the Trustees determine that further payments should be in kind. In
such cases, the Trust will pay all or a portion of the remainder of the
redemption in portfolio instruments valued in the same way as the Trust
determines net asset value. The portfolio instruments will be selected in a
manner that the Trustees deem fair and equitable. Redemption in kind is not
as liquid as a cash redemption. If redemption is made in kind, shareholders
who sell these securities could receive less than the redemption value and
could incur certain transaction costs.
The Trust's Tax Status
To qualify for the special tax treatment afforded to regulated investment
companies, the Trust must, among other requirements: derive at least 90% of
its gross income from dividends, interest, and gains from the sale of
securities; derive less than 30% of its gross income from the sale of
securities held less than three months; invest in securities within certain
statutory limits; and distribute to its shareholders at least 90% of its net
income earned during the year.
Performance Information
Performance depends upon such variables as: portfolio quality; average
portfolio maturity; type of instruments in which the portfolio is invested;
changes in interest rates; changes in expenses; and the relative amount of
cash flow. To the extent that financial institutions and broker/dealers charge
fees in connection with services provided in conjunction with an investment in
shares of the Trust, the performance will be reduced for those shareholders
paying those fees.
Yield
The yield is calculated based upon the seven days ending on the day of the
calculation, called the "base period." This yield is computed by: determining
the net change in the value of a hypothetical account with a balance of one
share at the beginning of the base period, with the net change excluding
capital changes but including the value of any additional shares purchased
with dividends earned from the original one share and all dividends declared
on the original and any purchased shares; dividing the net change in the
account's value by the value of the account at the beginning of the base
period to determine the base period return; and multiplying the base period
return by 365/7.
The Trust's yield for the seven-day period ended July 31, 1995, was 5.56%.
Effective Yield
The effective yield is calculated by compounding the unannualized base period
return by: adding 1 to the base period return; raising the sum to the 365/7th
power; and subtracting 1 from the result.
The Trust's effective yield for the seven-day period ended July 31, 1995, was
5.71%.
Total Return
Average annual total return 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 net
asset value per share at the end of the period. The number of shares owned at
the end of the period is based on the number of shares purchased at the
beginning of the period with $1,000, adjusted over the period by any
additional shares, assuming the monthly reinvestment of all dividends and
distributions.
The Trust's average annual total returns for the one-, five- and ten-year
periods ended July 31, 1995, were 5.42%, 4.62% and 6.07%, respectively.
Performance Comparisons
Investors may use financial publications and/or indices to obtain a more
complete view of the Trust's performance. When comparing performance,
investors should consider all relevant factors such as the composition of any
index used, prevailing market conditions, portfolio compositions of other
funds, and methods used to value portfolio securities and compute net asset
value. The financial publications and/or indices which the Trust uses in
advertising may include:
o Lipper Analytical Services, Inc., ranks funds in various fund categories
based on total return, which assumes the reinvestment of all income
dividends and capital gains distributions, if any.
o Donoghue's Money Fund Report publishes annualized yields of money market
funds weekly. Donoghue's Money Market Insight publication reports
monthly and 12-month-to-date investment results for the same money
funds.
o Money, a monthly magazine, regularly ranks money market funds in various
categories based on the latest available seven-day effective yield.
o Salomon 30-Day CD Index compares rate levels of 30-day certificates of
deposit from the top ten prime representative banks.
About Federated Investors
Federated is dedicated to meeting investor needs which is reflected in its
investment decision making structured, straightforward, and consistent. This
has resulted in a history of competitive performance with a range of
competitive investment products that have gained the confidence of thousands
of clients and their customers.
The company's disciplined security selection process is firmly rooted in sound
methodologies backed by fundamental and technical research. Investment
decisions are made and executed by teams of portfolio managers, analysts, and
traders dedicated to specific market sectors.
In the money market sector, Federated gained prominence in the mutual fund
industry in 1974 with the creation of the first institutional money market
fund. Simultaneously, the company pioneered the use of the amortized cost
method of accounting for valuing shares of money market funds, a principal
means used by money managers today to value money market fund shares. Other
innovations include the first institutional tax-free money market fund. As of
December 31, 1994, Federated managed more than $31 billion in assets across
approximately 43 money market funds, including 17 government, 8 prime and 18
municipal with assets approximating $17 billion, $7.4 billion and $6.6
billion, respectively.
J. Thomas Madden, Executive Vice President, oversees Federated's equity and
high yield corporate bond management while William D. Dawson, Executive Vice
President, oversees Federated's domestic fixed income management. Henry A.
Frantzen, Executive Vice President, oversees the management of Federated's
international portfolios.
Mutual Fund Market
Twenty-seven percent of American households are pursuing their financial goals
through mutual funds. These investors, as well as businesses and institutions,
have entrusted over $2 trillion to the more than 5,500 funds available.*
Federated Investors, through its subsidiaries, distributes mutual funds for a
variety of investment applications. Specific markets include:
Institutional
Federated meets the needs of more than 4,000 institutional clients nationwide
by managing and servicing separate accounts and mutual funds for a variety of
applications, including defined benefit and defined contribution programs,
cash management, and asset/liability management. Institutional clients
include corporations, pension funds, tax-exempt entities,
foundations/endowments, insurance companies, and investment and financial
advisors. The marketing effort to these institutional clients is headed by
John B. Fisher, President, Institutional Sales Division.
Trust Organizations
Other institutional clients include close relationships with more than 1,500
banks and trust organizations. Virtually all of the trust divisions of the
top 100 bank holding companies use Federated funds in their clients'
portfolios. The marketing effort to trust clients is headed by Mark R.
Gensheimer, Executive Vice President, Bank Marketing & Sales.
Broker/Dealers and Bank Broker/Dealer Subsidiaries
Federated mutual funds are available to consumers through major brokerage
firms nationwide--including 200 New York Stock Exchange firms--supported by
more wholesalers than any other mutual fund distributor. The marketing effort
to these firms is headed by James F. Getz, President, Broker/Dealer Division.
*source: Investment Company Institute
Cusip 609900105
8083102B (9/95)
PART C. OTHER INFORMATION.
Item 24. Financial Statements and Exhibits:
(a) Financial Statements (filed in Part A)
(b) Exhibits:
(1) Conformed copy of Declaration of Trust of the
Registrant; +
(2) (i) Copy of By-Laws of the Registrant; (1)
(ii) Copy of Amendment to By-Laws of Registrant; (1)
(3) Not applicable;
(4) Copy of Specimen Certificate for Shares of Beneficial
Interest of the Registrant; (1)
(5) Conformed copy of Investment Advisory Contract of the
Registrant; (9)
(6) (i)Conformed copy of Distributor's Agreement;(9)
(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 Nos. 33-38550 and 811-6269).
(7) Not applicable;
(8) Conformed copy of Custodian Agreement of the
Registrant; +
(9) Conformed copy of Agreement for Fund Accounting,
Shareholder Recordkeeping, and Custody Services
Procurement;+
(ii) The responses described in Item 24(b)6 are hereby
incorporated by reference.
(10) Not applicable;
(11) Conformed copy of Consent of Independent Auditors; +
(12) Not Applicable;
(13) Copy of Initial Capital Understanding; (1)
(14) Not applicable;
(15) Not applicable;
(16) Schedule for Computation of Fund Performance Yield
Calculation; (8)
(17) Financial Data Schedule; +
(18) Not applicable;
(19) Conformed copy of Power of Attorney; +
Item 25. Persons Controlled by or Under Common Control with Registrant
None
+ All exhibits have been filed electronically.
1. Response is incorporated by reference to Registrant's Initial Registration
Statement on Form S-E filed July 31, 1978. (File No. 2-62285)
7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 20 on Form N-1A filed September 22, 1987.(File No. 2-62285)
8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A filed September 23, 1988. (File No.2-62285)
9. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 25 on Form N-1A filed September 22, 1989. (File No.2-62285)
10. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 31 on Form N-1A filed September 24, 1992. (File No.2-62285)
11. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 33 on Form N-1A filed September 23, 1993. (File No.2-62285)
12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 35 on Form N-1A filed September 27, 1994.
(File No. 2-62285)
Item 26. Number of Holders of Securities:
Number of Record Holders
Title of Class as of September 7, 1995
Shares of beneficial interest 4,196
(no par value)
Item 27. Indemnification: (2.)
Item 28. Business and Other Connections of Investment Adviser:
(a) For a description of the other business of the investment adviser,
see the section entitled "Trust Information - Management of the
Trust" in Part A. The affiliations with the Registrant of four of
the Trustees and one of the Officers of the investment adviser are
included in Part B of this Registration Statement under "Money
Market Trust Management - Officers and Trustees." The remaining
Trustee of the investment adviser, his position with the
investment adviser, and, in parentheses, his principal occupation
is: Mark D. Olson, (Partner, Wilson, Halbrook & Bayard,) 107 W.
Market Street, Georgetown, Delaware 19947.
The remaining Officers of the investment adviser are: Mark L.
Mallon, William D. Dawson, III and J. Thomas Madden, Executive
Vice President; Henry J. Gailliot, Senior Vice President-
Economist; Peter R. Anderson, Gary J. Madich, and J. Alan Minteer,
Senior Vice Presidents; Randall A. Bauer, Jonathan C. Conley,
Deborah A. Cunningham, Mark E. Durbiano, Kathy Foody-Malus, Thomas
M. Franks, Edward C. Gonzales, Jeff A. Kozemchak, Marian R.
Marinack, John W. McGonigle, Gregory M. Melvin, Susan M. Nason,
Mary Jo Ochson, Robert J. Ostrowski, Charles A. Ritter, and
Christopher H. Wiles, Vice Presidents, Edward C. Gonzales,
Treasurer, and John W. McGonigle, Secretary. The business address
of each of the Officers of the investment adviser is Federated
Investors Tower, Pittsburgh, PA 15222-3779. These individuals are
also officers of a majority of the investment advisers to the
Funds listed in Part B of this Registration Statement under "The
Funds."
2. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 4 on Form N-1 filed November 20, 1980. (File No. 2-
62285)
Item 29. Principal Underwriters:
(a) Federated Securities Corp., the Distributor for shares of the
Registrant, also acts as principal underwriter for the following
open-end investment companies: Alexander Hamilton Funds; American
Leaders Fund, Inc.; Annuity Management Series; Arrow Funds;
Automated Government Money Trust; BayFunds; The Biltmore Funds;
The Biltmore Municipal Funds; Blanchard Funds; Blanchard Precious
Metals, Inc.; Cash Trust Series, Inc.; Cash Trust Series II; DG
Investor Series; Edward D. Jones & Co. Daily Passport Cash Trust;
Federated ARMs Fund; Federated Equity Funds; Federated Exchange
Fund, Ltd.; Federated GNMA Trust; Federated Government Trust;
Federated High Yield Trust; Federated Income Securities Trust;
Federated Income Trust; Federated Index Trust; Federated
Institutional Trust; Federated Master Trust; Federated Municipal
Trust; Federated Short-Term Municipal Trust; Federated Short-Term
U.S. Government Trust; Federated Stock Trust; Federated Tax-Free
Trust; Federated Total Return Series, Inc.; Federated U.S.
Government Bond Fund; Federated U.S. Government Securities Fund: 1-
3 Years; Federated U.S. Government Securities Fund: 3-5
Years;First Priority Funds; First Union Funds; Fixed Income
Securities, Inc.; Fortress Adjustable Rate U.S. Government Fund,
Inc.; Fortress Municipal Income Fund, Inc.; Fortress Utility Fund,
Inc.; Fountain Square Funds; Fund for U.S. Government Securities,
Inc.; Government Income Securities, Inc.; High Yield Cash Trust;
Independence One Mutual Funds; Insurance Management Series;
Intermediate Municipal Trust; International Series Inc.;
Investment Series Funds, Inc.; Investment Series Trust; Liberty
Equity Income Fund, Inc.; Liberty High Income Bond Fund, Inc.;
Liberty Municipal Securities Fund, Inc.; Liberty U.S. Government
Money Market Trust; Liberty Utility Fund, Inc.; Liquid Cash Trust;
Managed Series Trust; Marshall Funds, Inc.; Money Market
Management, Inc.; Money Market Obligations Trust; Money Market
Trust; The Monitor Funds; Municipal Securities Income Trust;
Newpoint Funds; 111 Corcoran Funds; Peachtree Funds; The Planters
Funds; RIMCO Monument Funds; The Shawmut Funds; SouthTrust Vulcan
Funds; Star Funds; The Starburst Funds; The Starburst Funds II;
Stock and Bond Fund, Inc.; Sunburst Funds; Targeted Duration
Trust; Tax-Free Instruments Trust; Tower Mutual Funds; Trademark
Funds; Trust for Financial Institutions; Trust for Government Cash
Reserves; Trust for Short-Term U.S. Government Securities; Trust
for U.S. Treasury Obligations; The Virtus Funds; Vision Fiduciary
Funds, Inc.; Vision Group of Funds, Inc.; and World Investment
Series, Inc.
Federated Securities Corp. also acts as principal underwriter for
the following closed-end investment company: Liberty Term Trust,
Inc.- 1999.
(b)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Richard B. Fisher Director, Chairman, Chief Vice President
Federated Investors Tower Executive Officer, Chief
Pittsburgh, PA 15222-3779 Operating Officer, and
Asst. Treasurer, Federated
Securities Corp.
Edward C. Gonzales Director, Executive Vice Executive Vice
Federated Investors Tower President, and Treasurer, President
Pittsburgh, PA 15222-3779 Federated Securities
Corp.
John W. McGonigle Director, Executive Vice Executive Vice
Federated Investors Tower President, and Assistant President and
Pittsburgh, PA 15222-3779 Secretary, Federated Secretary
Securities Corp.
John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark R. Gensheimer Executive Vice President of --
Federated Investors Tower Bank/Trust
Pittsburgh, PA 15222-3779 Federated Securities Corp.
Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
H. Joseph Kennedy Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John B. Bohnet Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard W. Boyd Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Kevin J. Crenny Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Daniel T. Culbertson Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Laura M. Deger Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Joseph L. Epstein Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael D. Fitzgerald Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David C. Glabicki Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Craig S. Gonzales Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Scott A. Hutton Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William J. Kerns Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William E. Kugler Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Dennis M. Laffey Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Stephen A. LaVersa Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Francis J. Matten, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Mihm Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Jeffrey Niss Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael P. O'Brien Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert D. Oehlschlager Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Charles A. Robison Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John C. Shelar, Jr. Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jamie M. Teschner Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul A. Uhlman Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael P. Wolff Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Philip C. Hetzel Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Charlene H. Jennings Assistant Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Ernest L. Linane Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
S. Elliott Cohan Secretary, Assistant
Federated Investors Tower Federated Securities Corp. Secretary
Pittsburgh, PA 15222-3779
(c) Not applicable.
Item 30. Location of Accounts and Records:
All accounts and records required to be maintained by Section 31(a) of
the Investment Company Act of 1940 and Rules 31a-1 through 31a-3 promulgated
thereunder are maintained at one of the following locations:
Registrant Federated Investors Tower
Federated Services Company Pittsburgh, PA 15222-3779
("Transfer Agent and Dividend
Disbursing Agent)
Federated Administrative Services
("Administrator")
Federated Management
("Advisor")
State Street Bank and Trust Company P.O. Box 8602
("Custodian") Boston, Massachusetts
02266-8602
Item 31. Management Services: Not applicable.
Item 32. Undertakings:
Registrant hereby undertakes to comply with the provisions of
Section 16(c) of the 1940 Act with respect to the removal of
Trustees and the calling of special shareholder meetings by
shareholders.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, MONEY MARKET TRUST, certifies
that it meets all of the requirements for effectiveness of this Amendment to
its Registration Statement pursuant to Rule 485(b) under the securities Act of
1933 and has duly caused this Amendment to its Registration Statement to be
signed on its behalf by the udnersigned, thereunto duly authorized, all in the
City of Pittsburgh and Commonwealth of Pennsylvania, on the 28th day of
September, 1995.
MONEY MARKET TRUST
BY: /s/ J. Crilley Kelly
J. Crilley Kelly, Assistant Secretary
Attorney in Fact for John F. Donahue
September 28, 1995
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to its Registration Statement has been signed below by the following person in
the capacity and on the date indicated:
NAME TITLE DATE
By: /s/J. Crilley Kelly
J. Crilley Kelly Attorney In Fact September 28, 1995
ASSISTANT SECRETARY For the Persons
Listed Below
NAME TITLE
John F. Donahue* Chairman and Trustee
(Chief Executive Officer)
Glen R. Johnson* President
Edward C. Gonzales* Executive Vice President
David M. Taylor Treasurer
(Principal Financial and
Accounting Officer)
Thomas G. Bigley Trustee
John T. Conroy, Jr.* Trustee
William J. Copeland* Trustee
James E. Dowd* Trustee
Lawrence D. Ellis, M.D.* Trustee
Edward L. Flaherty, Jr.* Trustee
Peter E. Madden* Trustee
Gregor F. Meyer* Trustee
Wesley W. Posvar* Trustee
Marjorie P. Smuts* Trustee
* By Power of Attorney
Exhibit 11 under Form N-1A
Exhibit 23 under 601/Reg.S-K
INDEPENDENT AUDITORS' CONSENT
To the Board of Trustees and Shareholders of
Money Market Trust
We consent to the use in Post-Effective Amendment No. 37 to Registration
Statement (No. 2-62285) of Money Market Trust of our report dated
September 9, 1995, appearing in the Preospectus, which is a part of such
Registration Statement, and to the reference to us under the heading
"Financial Highlights" in such Prospectus.
By: DELOITTE & TOUCHE LLP
Deloitte & Touche LLP
Certified Public Accountants
Pittsburgh, Pennsylvania
September 25, 1995
Exhibit 1 under Form N-1A
Exhibit 3b under 601 Reg/S-K
EXHIBIT 1
MONEY MARKET TRUST
DECLARATION OF TRUST
Page
Article I. Names and Definitions
1. Name
2. Definitions -
(a) Affiliated Person Assignment,
Commission, Interested Person,
Majority Shareholder Vote, Principal
Underwriter
(b) Trust
(c) Accumulated Net income
(d) Shareholder
(e) Trustees
(f) Shares
(g) 1940 Act
Article II. Purpose of Trust
Article III. Beneficial interest
1. Shares of Beneficial interest
2. Ownership of Shares
3. Investment in the Trust
4. No Pre-Emptive Rights
Article IV the Trustees
1. Management of the Trust
2. Election of Trustees at 1979 Meeting of
Shareholders
3. Terms of office of Trustees
4. Termination of Service and
Appointment of Trustees
5. Number of Trustees
6. Temporary Absence of Trustees
7. Effect of Death, Resignation,
Etc. of a Trustee
8. Ownership of Assets
Article V. Powers of the Trustees
1. Powers
2. Principal Transactions
3. Trustees and officers as Shareholders
4. Parties to Contract
Page
Article VI Trustees' Expenses and Compensation
1. Trustee Reimbursement
2. Trustee Compensation
Article VII Investment Adviser, Administrative Services, Principal
Underwriter and Transfer Agent
1. Investment Adviser
2. Administrative Services
3. Principal Underwriter
4. Transfer Agent
5. Provisions and Amendments
Article VIII. Shareholders' Voting Powers and Meetings
1. Voting Powers
2. Meetings
3. Quorum and Required Vote
4. Additional Provisions
Article IX Custodian
1. Appointment and Duties
2. Central Certificate System
Article X. Distributions and Redemptions
1. Distributions
2. Redemptions and Repurchases
3. Determination of Accumulated Net income
4. Net Asset Value of Shares
5. Suspension of the Right of Redemption
6. Trust's Right to Redeem Shares
Article XI. Limitation of Liability and indemnification
1. Limitation of Personal Liability and
Indemnification of Shareholders
2. Limitation of Personal Liability and
Indemnification of Trustees, officers,
Employees Or Agents of the Trust
3. Express Exculpatory Clauses and
Instruments
Page
Article XII. Miscellaneous
1. Trust is not a Partnership
2. Trustee's Good Faith Action, Expert Advice,
No Bond or Surety
3. Establishment of Record Dates
4. Termination of Trust
5. offices of the Trust, Filing of Copies,
Headings, Counterparts
6. Applicable Law
7. Amendments
MONEY MARKET TRUST
DECLARATION OF TRUST
Dated July 24, 1978
DECLARATION OF TRUST made this 24th day of July, 1978 by John F.
Donahue, Richard B. Fisher, J. Joseph Maloney, Jr., Wesley W. Posvar,
Edward E. Smuts, Thomas J. Donnelly, Glen R. Johnson, Gregor F. Meyer,
and Edward L. Flaherty, Jr.
WHEREAS the Trustees desire to establish a trust fund for the
investment and reinvestment of funds contributed thereto;
NOW, THEREFORE, The Trustees declare that all money and property
contributed to the trust fund hereunder shall be held and managed under
this Declaration of Trust IN TRUST as herein set forth below.
ARTICLE I
NAMES AND DEFINITIONS
Section 1. Name. This Trust shall be known as the "Money Market
Trust".
Section 2. Definitions. Wherever used herein, unless otherwise
required by the context or specifically provided:
(a) The terms "Affiliated Person," "Assignment," "Commission,"
"Interested Person," "Majority Shareholder Vote" (the 67% or 50%
requirement of the third sentence of Section 2(a)(42) of the 1940 Act,
meanings given them in the Investment Company Act of 1940, as amended
from time to time;
(b) The "Trust" refers to Money Market Trust;
(c) "Accumulated Net Income" means the accumulated net income of
the Trust determined in the manner provided or authorized in Article X,
Section 3;
(d) "Shareholder" means a record owner of Shares of the Trust;
(e) The "Trustees" refer to the individual Trustees in their
capacity as Trustees hereunder of the Trust and their successor or
successors for the time being in office as such Trustees;
(f) "Shares" means the equal proportionate units of interest into
which the beneficial interest in the Trust shall be divided from time to
time and includes fractions of Shares as well as whole Shares; and
(g) The "1940 Act" refers to the Investment Company Act of 1940,
as amended from time to time.
ARTICLE II
PURPOSE OF TRUST
The purpose of this Trust is to provide investors a continuous
source of managed investments primarily in securities.
ARTICLE III
BENEFICIAL INTEREST
Section 1. Shares of Beneficial Interest. The beneficial
interest in the Trust shall at all times be divided into transferable
Shares, without par value each of which shall represent an equal
proportionate interest in the Trust with each other Share outstanding,
none having priority or preference over another. The number of Shares
which may be issued is unlimited. The Trustees may from time to time
divide or combine the outstanding Shares into a greater or lesser number
without thereby changing the proportionate beneficial interest in the
Trust. Contributions to the Trust may be accepted for, and Shares shall
be redeemed as, whole Shares and/or fractions.
Section 2. Ownership of Shares. The ownership of Shares shall be
recorded in the books of the Trust or a transfer agent. The Trustees
may make such rules as they consider appropriate for the transfer of
shares and similar matter. The record books of the Trust or any
transfer agent, as the case may be, shall be conclusive as to who are
the holders of Shares and as to the number of Shares held from time to
time by each.
Section 3. Investment in the Trust. The Trustees shall accept
investments in the Trust from such persons and on such terms as they may
from time to time authorize. After the date of the initial contribution
of capital (which shall occur prior to the initial public offering of
Shares of the Trust), the number of Shares to represent the initial
contribution shall be considered as outstanding and the amount received
by the Trustees on account of the contribution shall be treated as an
asset of the Trust. Subsequent to such initial contribution of capital,
Shares (including Shares which may have been redeemed or repurchased by
the Trust) may be issued or sold at a price which will net the Trust,
before paying any taxes in connection with such issue or sale, not less
than the net asset value (as defined in Article X, Section 4) thereof;
provided, however, that the Trustees may in their discretion impose a
sales charge upon investments in the Trust.
Section 4. No Pre-exemptive Rights. Shareholders shall have no
pre-exemptive or other right to subscribe to any additional Shares or
other securities issued by the Trust or the Trustees.
ARTICLE IV
THE TRUSTEES'
Section 1. Management of the Trust. The business and affairs of
the Trust shall be managed by the Trustees, and they shall have all
powers necessary and desirable to carry out that responsibility. The
Trustees who shall serve until the election of Trustees at the 1979
Meeting of Shareholders shall be John F. Donahue, Richard B. Fisher, J.
Joseph Maloney, Jr., Wesley W. Posvar, Edward E. Smuts, Thomas J.
Donnelly, Glen R. Johnson, Gregor F. Meyer, and Edward L. Flaherty, Jr.
Section 2. Election of Trustees at 1979 Meeting of Shareholders.
In the year 1979, on a date fixed by the Trustees, which shall be
subsequent to the initial public offering of Shares of the Trust, the
Shareholders shall elect Trustees. The number of Trustees shall be
determined by the Trustees pursuant to Article IV, Section 6.
Section 3. Term of Office of Trustees. The Trustees shall hold
office during the lifetime of this Trust, and until its termination as
hereinafter provided; except (a) that any Trustee may resign his trust
by written instrument signed by him and delivered to 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 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 singing of a written instrument by a majority of the Trustees in
office. Within three months of such appointment to be mailed to each
Shareholder at his address as recorded on the books of the Trust. An
appointment of a Trustee may be made by the Trustees then in office and
notice thereof mailed to Shareholders as a foresaid in anticipation of a
vacancy to occur by random 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 new Trustee or Trustees, together with the
continuing Trustees, without any further act or conveyance, and he shall
be deemed a Trustee hereunder. Any appointment authorized by this
Section 4 is subject to the provisions of Section 16(a) of the 1940 Act.
Section 5. Temporary Absence of Trustee. Any Trustee may, by
power of attorney, delegate his power for a period not exceeding six
months at any one time to any other Trustee or Trustees, provided that
in no case shall less than two of the Trustees personally exercise the
other power hereunder except as herein otherwise expressly provided.
Section 6. Number of Trustees. The number of Trustees, not less
than three (3) nor more than twenty (20) serving hereunder at any time
shall be determined by the Trustees themselves.
Whenever a vacancy in the Board of Trustees shall occur, until
such vacancy is filled or while any Trustee is physically or mentally
incapacitated, the other Trustees shall have all the powers hereunder
and the certificate signed by a majority of the other Trustees of such
vacancy, absence or incapacity, shall be conclusive, provided, however,
that no vacancy which reduces the number of Trustees below three (3)
shall remain unfilled for a period longer than six calendar months.
Section 7. Effect of Death, Resignation, ect. of at Trustee. The
death, resignation, retirement, removal, or mental or physical
incapacity of the Trustees, or any one of them, shall not operate to
annul the Trust or to revoke any existing agency created pursuant to the
terms of this Declaration of Trust.
Section 8. Ownership of the Trust. The assets of the Trust shall
be held separate and apart from any assets now or hereafter held in any
capacity other than as Trustee hereunder by the Trustees or any
successor Trustee. All of the assets of the Trust shall at all times be
considered as vested in the Trustees. No Shareholder shall be deemed to
have a several ownership in any individual asset of the Trust or any
right of partition or possession thereof, but each Shareholder shall
have a proportionate undivided beneficial interest in the Trust.
ARTICLE V
POWERS OF THE TRUSTEES
Section 1. Powers. The Trustees in all instances shall act as
principals, and are and shall be free from the control of the
Shareholders. The Trustees shall have full power and authority to do
any and all acts and to make and execute any and all contracts and
instruments that they may consider necessary or appropriate in
connection with the management of the Trust. The Trustees shall not be
bound or limited by present or future laws or customs in regard to trust
investments, but shall have full authority and power to make any and all
investment which they, in their uncontrolled discretion, shall deem
proper to accomplish the purpose of this Trust. Without limiting the
foregoing, the Trustees shall have the following specific powers and
authority, subject to any applicable limitation in this Declaration of
Trust or in the By-Laws of the Trust.
(a) To buy, and invest funds in their hands in, securities
including, but not limited to, common stocks, preferred stocks,
bonds, debentures, warrants and rights to purchase securities,
certificates of beneficial interest, money market instruments,
notes or other evidences or indebtedness issued by any corporate,
trust or association, domestic or foreign, or issued or guaranteed
by the United States of America or any agency or instrumentality
thereof, by government of any foreign country, by any State of the
United States, or by any political subdivision or agency or
instrumentality of any State or foreign country, or in "when-
issued" or "delayed-delivery" contracts for any such securities,
or in any repurchase agreement (agreements under which the seller
agrees at the time of sale to repurchase the security at an agreed
time and price), or retain Trust assets in cash, and from time to
time change the investments of the assets of the Trust;
(b) To adopt By-Laws not inconsistent with the Declaration
of Trust providing for the conduct of the business of the Trust
and to amend and repeal them to the extent that they do not
reserve that right to the Shareholders;
(c) To Elect and remove such officers and appoint and
terminate such agents as they consider appropriate;
(d) To appoint or otherwise engage a bank or trust company
as custodian of any assets of the Trust subject to any conditions
set forth in this Declaration of Trust or in the By-Laws;
(e) To appoint or otherwise engage transfer agents,
dividend disbursing agents, Shareholder servicing agents,
investment advisers, sub-investment adviser, principal
underwriters, administrative service agents, and such other agents
as the Trustees may from time to time appoint or otherwise engage;
(f) To provide for the distribution of interests of the
Trust either through a principal underwriter in the manner
hereinafter provided for or by the Trust itself, or both;
(g) To set record dates in the manner hereinafter provided
for;
(h) To delegate such authority as they consider desirable
to a committee or committees composed of Trustees, including
without limitation, an Executive Committee, or to any officers of
the Trust and to any agent, custodian or underwriter;
(i) To sell or exchange any or all of the assets of the
Trust, subject to the provisions of Article XII, Section 4(b)
hereof;
(j) To vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities or property;
and to execute and deliver powers of attorney to such person or
persons as the Trustees shall deem proper, granting to such person
or persons such power and discretion with relation to securities
or property as the Trustees shall deem proper;
(k) To exercise powers and rights of subscription or
otherwise which in any manner arise out of ownership of
securities;
(l) To hold any security or property in a form not
indicating any trust, whether in bearer, unregistered or other
negotiable form; or either in its own name or in the name of a
custodian or a nominee or nominees, subject in either case to
proper safeguards according to the usual practice of Massachusetts
trust companies or investment companies;
(m) To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporate or
concern, any security of which is held in the Trust; to consent to
any contract, lease, mortgage, purchase, or sale of property by
such corporation or concern, and to paycalls or subscriptions with
respect to any security held in the Trust;
(n) To engage in and to prosecute, compound, comprise,
abandon, or adjust, by arbitration, or otherwise, and actions,
suits, proceedings, disputes, claims, demands, and other things
relating to the Trust, and out of the assets of the Trust to pay,
or to satisfy, and debts, claims or expenses incurred in
connection therewith, including those of litigation, upon any
evidence that the Trustees may deem sufficient (such powers shall
include without limitation any actions, suits, proceedings,
disputes, claims demands and things relating to the Trust wherein
any of the Trustees may be named individually and the subject
matter of which arises by reason of business for or on behalf of
the Trust);
(o) To make distributions of income and of capital gains to
Shareholders in the manner hereinafter provided for;
(p) To borrow money but only as a temporary measure for
extra ordinary or emergency purposes and then (a) only in amounts
not in excess of 5% of the value of its total assets or (b) in any
amount up to one-third of the value of its total assets, including
the amount borrowed, in order to meet redemption requests without
immediately selling any portfolio securities. The Trust may also
enter into reverse repurchase agreement in amounts not in excess
of one-third of its total assets in order to meet redemption
requests without immediately selling any portfolio instruments.
The Trustees shall not pledge, mortgage or hypothecate the assets
of the Trust, except in connection with any borrowing described in
(a) and (b) herein and in amounts not in excess of the lesser 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 issue and sell the Shares of the
Trust either for cash or for property whenever and in such amounts
as the Trustee may deem desirable, but subject to the limitation
set forth in Section 3 of Article III.
(r) To purchase insurance of any kind, including, without
limitation, insurance on behalf of any person who is or was a
Trustee, Officer, employee or agent of the Trust, or is or was
serving at the request of the Trust as a Trustee, Director,
Officer, agent or employee of another corporation, partnership,
joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity or
arising out of his status as such.
No one dealing with the Trustees shall be under any
obligation to make any inquiry concerning the authority of the
Trustees, or to see to the application of any payments made or
property transferred to the Trustees or upon their order.
Section 2. Principal Transactions. The Trustees shall not on
behalf of the Trust buy any securities (other than Shares of the Trust),
to or lend any assets of the Trust to, any Trustee or officer or
employee of the Trust or any firm of which any such Trustee or officer
is a member acting as principal unless permitted by the 1940 Act, but
the Trust may employ any such other party or any such person or firm or
company in which any such person is an interested person in any capacity
not prohibited by the 1940 Act.
Section 3. Trustees and officers as Shareholders. Any Trustee,
officer or other agent of the Trust may acquire, own and dispose of
shares of the Trust to the same extent as if he were not a Trustee,
officer or agent; and the Trustees may issue and sell or cause to be
issued or sold Shares of the Trust to and buy such Shares from any such
person or any firm or company in which he is an interested person
subject only to the general limitations herein contained as to the sale
and purchase of such Shares; and all subject to any restrictions which
may be contained in the By-Laws.
Section 4. Parties to Contract. The Trustees may enter into any
contract of the character described in Section 1,2,3, or 4 of Article
VII or in Article IX hereof or any other capacity not prohibited by the
1940 Act with any corporation, firm, trust or association, although one
or more of the shareholders, Trustees, officers, employees or agents of
the Trust or their affiliates may be an officer, director, Trustee,
shareholder or interested person of such other party to the contract,
and no such contract shall be invalidated or rendered voidable by reason
of the existence of any such relationship be liable merely by reason of
such relationship for any loss or expense to the Trust under to 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 Sections 1,2,3 and 4
of Article VII or Article IX or any other capacity deemed legal under
the 1940 Act, and any individual may be financially interested or
otherwise an interested person of persons who are parties to any or all
of the contracts mentioned in this Section 4.
ARTICLE VI
TRUSTEES' EXPENSES AND COMPENSATION
Section 1. Trustee Reimbursement. The Trustees shall be
reimbursed from the Trust estate for all of their expenses and
disbursements, including, without limitation, expenses of organizing the
Trust and continuing its existence; fees and expenses of Trustees and
officers of the Trust; fees for investment advisory services,
administrative services and principal underwriting services provided for
in Article VII, Sections 1,2 and 3; fees and expenses of preparing and
printing its Registration Statements under the Securities Act of 1933
and the Investment Company Act of 1940 and any amendments thereto;
expenses of registering and qualifying the Trust and its shares under
federal and state laws and regulations; expenses of preparing, printing
and distributing prospectuses and any amendments thereof sent to
shareholders, underwriters, broker-dealers and to investors who may be
considering the purchase of shares; expenses of registering, licensing
or other authorization of the Trust as a broker-dealer and of its
Officers as agents and salesmen under federal and state laws and
regulations; interest expense, taxes, fees and commissions of every
kind; expenses of issue (including cost of share certificates),
purchase, repurchase and redemption of shares, including expenses
attributable to a program of periodic issues; 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, 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 Trustee
state prior to any rights or interests of the Shareholders thereto.
This section shall not preclude the Trust from directly paying any of
the aforementioned fees and expenses.
Section 2. Trustee Compensation. The Trustees shall be entitled
to compensation from the Trust for their respective services as
Trustees, to be determined from time to time by vote of the Trustees,
and the Trustees shall also determine the compensation of all Officers,
consultants and agents whom they may elect or appoint. The Trust may
pay any Trustee or any corporation, firm, trust or association of which
a Trustee is an interested person for services rendered to the Trust 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,
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 to the
extent such vote is required by law, 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, in their discretion, may agree.
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,
employee 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 on a daily
basis, on such terms and conditions as the Trustees may in their
discretion determine. Such services may be provided by one or more
entities.
Section 3. Principal Underwriter. The Trustees may in their
discretion from time to time enter into an exclusive or nonexclusive
contract or contracts providing for the sale of the Shares of the Trust
to net the Trust not less than the amount provided in Article III,
Section 3 hereof, whereby the Trust may either agree to sell the Shares
to the other party to the contract or appoint such other party its sales
agent for such shares. In either case, the contract shall be on such
terms and conditions (including indemnification of principal
underwriters allowable under applicable law and regulation) as the
Trustees may in their discretion determine not inconsistent with the
provisions of this Article VII; and such contract may also provide for
the repurchase or sale of Shares of the Trust by such other party as
principal or as agent of the Trust and may provide that the other party
may maintain a market for shares of the Trust.
Section 4. Transfer Agent. The Trustees may in their discretion
from time to time enter into transfer agency and shareholder services
contracts whereby the other party shall undertake to furnish the
Trustees transfer agency and shareholder services. The contracts shall
be on such terms and conditions as the Trustees may in their discretion
determine not inconsistent with the provisions of this Declaration of
Trust or of the By-Laws. Such services may be provided by one or more
entities.
Section 5. Provisions and Amendments. Any contract entered into
pursuant to Sections 1 or 3 of this Article VII shall be consistent with
and subject to the requirements of Section 15 of the 1940 Act (including
any amendments thereof or other applicable Act of Congress hereafter
enacted) with respect to its continuance in effect, its termination and
the method of authorization and approval of such contract or renewal
thereof.
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 1. 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; and (v) to
the same extent as the shareholders of a Massachusetts business
corporate as to whether or not a court action, proceeding or claim
should be brought or 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 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 appropriate fractional vote. There shall be no
cumulative voting in the election of Trustees. Shares may be voted in
person or by proxy. Until Shares are issued, the Trustees may exercise
all rights of Shareholders and may take any action required or permitted
by law, this Declaration of Trust or any By-Laws of the Trust to be
taken by Shareholders.
Section 2. Meetings. A 1979 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 of the Chief
Executive Officer of the Trust and shall be called by the Trustees upon
the written request of Shareholders owning at least one-tenth of the
outstanding Shares entitled to vote. Shareholders shall be entitled to
at least fifteen days' notice of any meeting.
Section 3. Quorum and Required Vote. Except as otherwise
provided by law, to constitute a quorum for the transaction of any
business at any meeting of Shareholders there must be present, in person
or by proxy, holders of one-fourth of the total number of Shares of the
Trust then outstanding and entitled to vote at such meeting. If a
quorum, as above defined, shall not be present for the purpose of any
vote that may properly come before the meeting, the Shareholders present
in person or by proxy and entitled to vote at such meeting on such
matter holding a majority of the Shares present entitled to vote on such
matter may 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 meeting and related
matters.
ARTICLE IX
CUSTODIAN
Section 1. Appointment and Duties. The Trustees shall appoint or
otherwise engage a bank or trust company having an aggregate capital,
surplus and undivided profits (as shown in its last published report) of
at least two million dollars ($2,000,000) as custodian with authority as
its agent, but subject to such restrictions, limitations and other
requirements, if any, as may be contained in the By-Laws of the Trust:
(1) To receive and hold the securities owned by the Trust
and deliver the same upon written order;
(2) To receive and receipt for any moneys due to the Trust
and deposit the same in its own banking department or elsewhere as
the Trustees may direct; and
(3) To disburse such funds upon orders or vouchers;
and may also employ such custodian as the agent of the Trust:
(4) To keep the books and accounts of the Trust and furnish
clerical and accounting services;
(5) To compute, if authorized to do so by the Trustees, the
Accumulated Net Income of the Trust and the net asset value of the
Shares in accordance with the provisions hereof;
all upon such basis of compensation as may be agreed upon between the
Trustees and the custodian. If so directed by a Majority Shareholder
Vote, the custodian shall deliver and pay over all property of the Trust
held by it as specified in such vote.
The Trustees may also authorize the custodian to employ one or
more sub-custodians from time to time to perform such of the acts and
services of the custodian and upon such terms and conditions, as may be
agreed upon between the custodian and such sub-custodian and approved by
the Trustees, provided that in every case such sub-custodian shall be a
bank or trust company organized under the laws of the United States or
one of the states thereof and having an aggregate capital, surplus and
undivided profits (as shown in its last published report) of at least
two million dollars ($2,000,000).
Section 2. Central Certificate System. Subject to such rules,
regulations and orders as the Commission may adopt, the Trustees may
direct the custodian to deposit all or any part of the securities owned
by the Trust in a system for the central handling of securities
established by a national securities exchange or a national securities
association registered with the Commission under the Securities Exchange
Act of 1934, or such other person as may be permitted by the commission
or otherwise in accordance with the 1940 Act as from time to time
amended, pursuant to which system all securities of any particular class
or series of any issuer deposited within the system are treated as
fungible and may be transferred or pledged by bookkeeping entry without
physical delivery of such securities, provided that all such deposits
shall b subject to withdrawal only upon the order of the custodian at
the director of the Trustees.
ARTICLE X
DISTRIBUTIONS AND REDEMPTIONS
Section 1. Distributions.
(a) The Trustees may from time to time declare and pay dividends,
and the amount of such dividends and the payment of them shall be wholly
in the discretion of the Trustees.
(b) The Trustees may, on each day Accumulated Net Income of the
Trust (as defined in Section 3 of this Article X) is determined and is
positive, declare such Accumulated Net Income as a dividend to
Shareholders of record at such time as the Trustees shall designate,
payable in addition full and fractional Shares or in cash.
(c) The Trustees may distribute in respect of any fiscal year as
ordinary dividends and as capital gains distributions, respectively,
amounts sufficient to enable the Trust as a regulated investment company
to avoid any liability for federal income taxes in respect of that year.
(d) The decision of the Trustees as to what, in accordance with
good accounting practices, is income and what is principal shall be
final, and except as specifically provided herein the decision of the
Trustees as to what expenses and charges of the Trust shall be charged
against principal and what against the income shall be final. Any
income not distributed in any year may be permitted to accumulate and as
long as not distributed in any year may be permitted to accumulate and
as long as not distributed may be invested from time to time in the same
manner as the principal funds of the Trust.
(e) The Trustees shall have power, to the fullest extent
permitted by the laws of Massachusetts, at any time, or from time to
time, to declare and cause to be paid dividends, which dividends, at the
election of the Trustees, may be accrued, automatically reinvested in
additional Shares (or fractions thereof) of the Trust or paid in cash or
additional Shares, all upon such terms and conditions as the Trustees
may prescribe.
(f) Anything in this instrument to the contrary notwithstanding,
the Trustees may at any time declare and distribute a dividend
consisting of shares of the Trust.
Section 2. Redemptions and Repurchases.
(a) In case any Shareholder of record of the Trust at any time
desires to dispose of Shares recorded in his name, he may deposit a
written request (or such other form of request as the Trustees may from
time to time authorize) requesting that the Trust purchase his Shares,
together with such other instruments or authorizations to effect the
transfer as the Trustees may from time to time require, at the office of
the Custodian, and the Trust shall purchase his said Shares, but only at
the net asset value of such Shares (as defined in Section 4 of this
Article X) determined by or on behalf of the Trustees next after said
deposit.
Payment for such Shares shall be made by the Trust to the
Shareholder of record within seven (7) days after the date upon which
the request (and, if required, such other instruments or authorizations
of transfer) is deposited, subject to the right of the Trustees to
postpone the date of payment pursuant to Section 5 of this Article X.
If the redemption is postponed beyond the date on which it would
normally occur by reason of a declaration by the Trustees suspending the
right of redemption pursuant to Section 5 of this Article X, the right
of the Shareholder to have his Shares purchased by the Trust shall be
similarly suspended, and he may withdraw his request (or such other
instruments or authorizations of transfer) from deposit if he so elects;
or, if he does not so elect, the purchase price shall be the net asset
value of his Shares, determined next after termination of such
suspension and payment therefor shall be made within seven (7) days
thereafter.
(b) The Trust may purchase Shares of the Trust by agreement with
the owner thereof (1) at a price not exceeding the net asset value per
Share 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 daily or more frequently at the discretion of the
Trustees, on each business day (which term shall, whenever it appears in
this Declaration of Trust, be deemed to mean each day when the New York
Stock Exchange is open for trading) 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, or to the custodian or to a
transfer agent.
Section 4. Net Asset Value of Shares. The net asset value of
each Share of the Trust outstanding shall be determined at least once on
each business day by or on behalf of the Trustees. The power and duty
to determine net asset value may be delegated by the Trustees from time
to time to one or more of the Trustees or Officers of the Trust, to the
other party to any contract entered into pursuant to Section 1 or 2 of
Article VII or to the custodian or to a transfer agent.
The net asset value of each Share of the Trust as of any
particular time shall be the quotient (adjusted to the nearer cent)
obtained by dividing the value, as of such time, of the net assets of
the Trust (i.e., the value of the assets of the Trust less its
liabilities exclusive of capital and surplus) by the total number of
Shares outstanding (exclusive of treasury Shares) at such time in
accordance with the 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 (a) during which the
New York Stock Exchange is closed other than customary weekend and
holiday closings, (b) during which trading on the New York Stock
Exchange is restricted, (c) during which an emergency exists as a result
of which disposal by the Trust of securities owned by it is not
reasonably practicable, or it is not reasonably practicable for the
Trust fairly to determine the value of its net assets, or (d) during
such other periods as the Commission (or any succeeding governmental
authority) may by order permit for the protection of security holders of
the Trust; provided that the applicable rules and regulations of the
Commission (or any succeeding governmental authority) shall govern as to
whether the conditions prescribed in (b) or (c) exist. Such suspension
shall take effect at such times as the Trustees shall specify but not
later than the close of business on a business day next following the
declaration, and thereafter there shall be no determination of net asset
value until the Trustees shall declare the suspension at an end, except
that the suspension shall terminate in any event on the first day on
which said stock exchange shall have reopened or the period specified
(b) or (c) shall have expired (as to which in the absence of an official
ruling by said Commission or succeeding authority, the determination of
the Trustees shall be conclusive).
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 (i) during which the
New York Stock Exchange is closed other than customary weekend and
holiday closings, (ii) during which trading on the New York Stock
Exchange is restricted, (iii) during which an emergency exists as a
result of which disposal by the Trust of securities owned by it is not
reasonably practicable, or it is not reasonably practicable for the
Trust fairly to determine the value of its net assets, or (iv) during
any other period when the Commission (or any succeeding governmental
authority) may for the protection of security holders of the Trust by
order permit suspension of the right of redemption or postponement of
the date of payment on redemption; provided that applicable rules and
regulations of the Commission (or any succeeding governmental authority)
shall govern as to whether the conditions prescribed in (ii) or (iii)
exist. Such suspension shall take effect at such time as the Trustees
shall specify but not later than the close of business on the business
day next following the declaration of suspension, and thereafter there
shall be no right of redemption or payment until the Trustees shall
declare the suspension at an end, except that the suspension shall
terminate in any event on the first day on which said stock exchange
shall have reopened or the period specified in (ii) or (iii) shall have
expired (as to which in the absence of an official ruling by said
Commission or succeeding authority, the determination of the Trustees
shall be conclusive).
Section 6. Trust's Right to Redeem Shares. The Trust shall have
the right to cause the redemption of Shares in any Shareholder's account
for their then current net asset value (which will be promptly paid to
the Shareholder in cash), if at any time the total investment in the
account does not have a minimum dollar value determined from time to
time by the Trustees in their sole discretion. Shares of the trust are
redeemable at the option of the Trust if, in the opinion of the
Trustees, ownership of Trust Shares has or may become concentrated to an
extent which would cause the Trust to be a personal holding company
within the meaning of the Federal Internal Revenue Code (and thereby
disqualified under Sub-chapter M of said Code); in such circumstances
the Trust may compel the redemption of Shares, reject any order for the
purchase of Shares or refuse to give effect to the transfer of Shares.
ARTICLE XI
LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 1. Limitation of Personal Liability and Indemnification
of Shareholders. The Trustees, officers, employees and agents of the
Trust shall have no power to bind any Shareholder personally or to call
upon any Shareholder for the payment of any sum of money or assessment
whatsoever, other than such as the Shareholder may at any time agree to
pay by way of subscription to any Shares or otherwise.
No Shareholder or former Shareholder of the Trust shall be liable
solely by reason of his being or having been a Shareholder for any debt,
claim, action, demand, suit, proceeding, judgment, decree, liability or
obligation of any kind against, or with respect to the Trust arising out
of any action taken or omitted for or on behalf of the Trust, and the
Trust shall be solely liable therefor and resort shall be had solely to
the Trust property for the payment or performance thereof.
Each Shareholder or former Shareholder of the Trust (or their
heirs, executors, administrators or other legal representatives or, in
case of a corporate entity, its corporate or general successor) shall be
entitled to indemnity and reimbursement out of the Trust property to the
full extent of such liability and the costs of any litigation or other
proceedings in which
such liability shall have been determined, including, without
limitation, the fees and disbursements of counsel if, contrary to the
provisions hereof, such Shareholder or former Shareholder of the Trust
shall be held to personal liability.
The Trust shall, upon request by the Shareholder or former
Shareholder, assume the defense of any claim made against any
Shareholder for any act or obligation of the Trust and satisfy any
judgment thereon.
Section 2. Limitation of Personal Liability of Trustees,
Officers, Employees or Agents of the Trust. No 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 wrong doing by
them or any officer, agent, employee, investment adviser or principal
underwriter of the Trust or of any entity providing administrative
services for the Trust, but nothing herein contained shall protect any
Trustee or officer against any liability to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office.
Section 3. Express Exculpatory Clauses and Instruments. The
Trustees shall use every reasonable means to assure that all persons
having dealings with the Trust shall be informed that the property of
the Shareholders and the Trustees, officers, employees and agents of the
Trust shall not be subject to claims against or obligations of the Trust
to any extent whatsoever. The Trustees shall cause to be inserted in
any written agreement, undertaking or obligation made or issued on
behalf of the Trust (including certificates for Shares of the Trust) an
appropriate reference to this Declaration, providing that neither the
Shareholders, the Trustees, the officers, the employees nor any agent of
the Trust shall be liable thereunder, and that the other parties to such
instrument shall look solely to the Trust property for the payment of
any claim thereunder or for the performance thereof; but the omission of
such provisions from any such instrument shall not render any
Shareholder, Trustee, officer, employee or agent liable, nor shall the
Trustee, or any officer, employee of the Trust be liable to anyone for
such omission. If, notwithstanding this provision, any Shareholder,
Trustee, officer, employee or agent shall be held liable to any other
person by reason of the omission of such provision from any such
agreement, undertaking or obligation, the Shareholder, Trustee, officer,
employee or agent shall be entitled to indemnity and reimbursement out
of the Trust property, as provided in this Article XI.
Section 4. Indemnification of Trustees, Officers, Employees and
Agents.
(a) Every person who is or has been a Trustee, officer, employee
or agent of the Trust and persons who serve at the Trust's request as
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise shall be
indemnified by the Trust to the fullest extent permitted by law against
liability and against all expenses reasonably incurred or paid by him in
connection with any debt, claim, action, demand, suit, proceeding,
judgment, decree, liability or obligation of any kind in which he
becomes involved as a party or otherwise by virtue of his being or
having been a Trustee, officer, employee or agent of the Trust or of
another corporation, partnership, joint venture, trust or other
enterprise at the request of the Trust and against amounts paid or
incurred by him in the settlement thereof.
(b) The words "claim," "action," "suit," or "proceeding" shall
apply to all claims, actions, suits or proceedings (civil, criminal,
administrative, investigative or other, including appeals), actual or
threatened, and the words "liability" and "expenses" shall include
without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
(c) No indemnification shall be provided hereunder to a Trustee,
officer, employee or agent against any liability to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct
of his office.
(d) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall
not affect any other rights to which any Trustee, officer, employee or
agent may now or hereafter be entitled, shall continue as to a person
who has ceased to be such Trustee, officer, employee, or agent and shall
inure to the benefit of the heirs, executors and administrators of such
a person.
(e) Expenses in connection with the preparation and presentation
of a defense to any claim, action, suit or proceeding of the character
described in paragraph (a) of this Section 4 may be paid by the Trust
prior to final disposition thereof upon receipt of an undertaking by or
on behalf of the Trustee, officer, employee or agent secured by a surety
bond or other suitable insurance that such amount will be paid over by
him to the Trust if it is ultimately determined that he is not entitled
to indemnification under this Section 4.
ARTICLE XII
MISCELLANEOUS
Section 1. Trust is not a Partnership. It is hereby expressly
declared that a trust and not a partnership is created hereby.
Section 2. Trustee's Good Faith Action, Expert Advice, No Bond or
Surety. The exercise by the Trustees of their powers and 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 mistakes of fat or law. The Trustees may take advice
of counsel or other experts with respect to the provisions of Article
XI, shall be under no liability for any act or omission in accordance
with such advice or for failing to follow such advice. The Trustees
shall not be required to give any bond as such, nor any surety if a bond
is required.
Section 3. Establishment of Record Dates. The Trustees may close
the Share transfer books of the Trust for a period not exceeding sixty
(60) days preceding the date of any meeting of Shareholders, or the date
for the payment of any dividend or the making of any distribution to
Shareholders, or the date for the allotment of rights, or the date when
any change or conversion or exchange of Shares shall go into effect; or
in lieu of closing the Shares transfer books aforesaid, the Trustees may
fix in advance a date, not exceeding sixty (60) days preceding the date
of any meeting of Shareholders, or the date for the payment of any
dividend or the making of any distribution to Shareholders, or the date
for the allotment of rights, or the last day on which the consent or
dissent of Shareholders may be effectively expressed for any purpose, as
a record date for the determination of the Shareholders entitled to
notice of, and, to vote at, any such meeting and any adjournment
thereof, or entitled to receive payment of any such dividend or
distribution, or to any such allotment of rights, or to exercise the
rights in respect of any such change, conversion or exchange of shares,
or to exercise the right to give such consent or dissent, and in such
case such Shareholder and only such Shareholder as shall be Shareholders
of record on the date so fixed shall be entitled to such notice of, and
to vote at, such meeting, or to receive payment of such dividend or
distribution, or to receive such allotment or rights, or to exercise
such rights, as the case may be, notwithstanding any transfer of any
Shares on the books of the Trust after any such date fixed as aforesaid.
Section 4. Termination of Trust.
(a) This Trust shall continue without limitation of time but
subject to the provisions of paragraphs (b), (c), and (d) of this
Section 4.
(b) The Trustees, with the approval of the holders of at least
two-thirds of the outstanding Shares, may by unanimous action sell and
convey the assets of the Trust to another trust or corporation organized
under the laws of any state of the United States, which is a diversified
open-end management company as defined in the 1940 Act, for an adequate
consideration which may include the assumption of all outstanding
obligations, taxes and other liabilities, accrued or contingent, of the
Trust and which may include shares of beneficial interest or stock of
such trust or corporation. Upon making provision for the payment of all
such liabilities, by such assumption or otherwise, the Trustees shall
distribute the remaining proceeds ratably among the holders of the
Shares of the Trust then outstanding.
(c) Subject to a Majority Shareholder Vote, the Trustees may at
any time sell and convert into money all the assets of the Trust. Upon
making provision for the payment of all outstanding obligations, taxes
and other liabilities, accrued or contingent, of the Trust, the Trustees
shall distribute the remaining assets of the Trust ratably among the
holders of the outstanding Shares.
(d) Upon completion of the distribution of the remaining proceeds
of the remaining assets as provided in paragraphs (b) and (c), the Trust
shall terminate and the Trustees shall be discharged of any and all
further liabilities and duties hereunder and the right, title and
interest of all parties shall be canceled and discharged.
Section 5. Offices of the Trust, Filing of Copies, References,
Heading. The Trust shall maintain a usual place of business in
Massachusetts, which, initially, shall be 31 Milk Street, Boston,
Massachusetts, and shall continue to maintain an office at such address
unless changed by the Trustees to another location in Massachusetts.
The Trust may maintain other offices as the Trustees may from time to
time determine. The original or a copy of this instrument and of each
declaration of trust supplemental hereto shall be kept at the office of
the Trust where it may be inspected by any Shareholder. A copy of this
instrument and of each supplemental declaration of trust shall be filed
by the Trustees with the Massachusetts Secretary of State and the Boston
City Clerk, as well as any other governmental office where such filing
may from time to time be required. Anyone dealing with the Trust may
rely on a certificate by an officer of the Trust as to whether or not
any such supplemental declaration of trust has been made and as to any
matters in connection with the Trust hereunder, and with the same effect
as if it were the original, may rely on a copy certified by an officer
of the Trust to be a copy of this instrument or of any such supplemental
declaration of trust, references to this instrument, and all expressions
like "herein," " hereof" and "hereunder," shall be deemed to refer to
this instrument as amended or affected by an such supplemental
declaration of trust. Headings are placed herein for convenience of
reference only and in case of any conflict, the text of this instrument,
rather than the headings, shall control. This instrument may be
executed in any number of counterparts each of which shall be deemed an
original.
Section 6. Applicable Law. The Trust set forth in this
instrument is created under and is to be governed by and construed and
administered according to the laws of the Commonwealth of Massachusetts.
The Trust shall be of the type commonly called a Massachusetts business
trust, and without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust.
Section 7. Amendments. Prior to the initial issuance of Shares
pursuant to the second sentence of Section 3 of Article III, a majority
of the Trustees then in office may amend or otherwise supplement this
instrument by making a Declaration of Trust supplemental hereto, which
thereafter shall form a part hereof. Subsequent to such initial
issuance of Shares, if authorized by a majority of the Trustees then in
office and by a Majority Shareholder Vote, or by any larger vote which
may be required by applicable law or this Declaration of Trust in any
particular case, the Trustees shall amend or otherwise supplement this
instrument, by making a Declaration of Trust supplemental hereto, which
thereafter shall form a part hereof. Any such supplemental Declaration
of Trust shall be signed by at least a majority of the Trustees then in
office. Copies of the supplemental Declaration of Trust shall be filed
as specified in Section 5 of this Article XII.
IN WITNESS WHEREOF, the undersigned have executed this instrument
this 24th day of July 1978.
/s/ John F. Donahue /s/Richard B. Fisher
John F. Donahue Richard B. Fisher
/s/ J. Joseph Maloney, Jr. /s/ Wesley W. Posvar
J. Joseph Maloney, Jr. Wesley W. Posvar
/s/ Edward E. Smuts /s/ Thomas J. Donnelly
Edward E. Smuts Thomas J. Donnelly
/s/Glen R. Johnson /s/ Gregor F. Meyer
Glen R. Johnson Gregor F. Meyer
/s/Edward L. Flaherty,Jr.
Edward L. Flaherty, Jr.
COMMONWEALTH OF PENNSYLVANIA )
: ss:
COUNTY OF ALLEGHENY )
I hereby certify that on July 24, 1978, before me, the subscriber,
a Notary Public of the Commonwealth of Pennsylvania, in for the County
of Allegheny, personally appeared JOHN F. DONAHUE, RICHARD B. FISHER, J.
JOSPEH MALONEY, JR., WESLEY W. POSVAR, EDWARD E. SMUTS, THOMAS J.
DONNELLY, GLEN R. JOHNSON, GREGOR F. MEYER, and EDWARD L. FLAHERTY, JR.,
who acknowledged the foregoing Declaration of Trust to be there act.
Witness my hand and the notarial deal the day and year last above
written.
/s/ Mary Anne Miller
Notary Public
Exhibit 8 of Form N-1A
Exhibit 10 under 601/Reg S-K
CUSTODIAN CONTRACT
Between
FEDERATED INVESTMENT COMPANIES
and
STATE STREET BANK AND TRUST COMPANY
and
FEDERATED SERVICES COMPANY
TABLE OF CONTENTS
Page
1. Employment of Custodian and Property to be Held by It 1
2. Duties of the Custodian With Respect to Property of the Funds Held by
the Custodian 2
2.1 Holding Securities 2
2.2 Delivery of Securities 2
2.3 Registration of Securities 5
2.4 Bank Accounts 6
2.5 Payments for Shares 7
2.6 Availability of Federal Funds 7
2.7 Collection of Income 7
2.8 Payment of Fund Moneys 8
2.9 Liability for Payment in Advance of Receipt of Securities
Purchased. 9
2.10 Payments for Repurchases or Redemptions of Shares of a Fund 9
2.11 Appointment of Agents 10
2.12 Deposit of Fund Assets in Securities System 10
2.13 Segregated Account 12
2.14 Joint Repurchase Agreements 13
2.15 Ownership Certificates for Tax Purposes 13
2.16 Proxies 13
2.17 Communications Relating to Fund Portfolio Securities 13
2.18 Proper Instructions 14
2.19 Actions Permitted Without Express Authority 14
2.20 Evidence of Authority 15
2.21 Notice to Trust by Custodian Regarding Cash Movement. 15
3. Duties of Custodian With Respect to the Books of Account and
Calculation of Net Asset Value and Net Income 15
4. Records 16
5. Opinion of Funds' Independent Public Accountants/Auditors 16
6. Reports to Trust by Independent Public Accountants/Auditors 17
7. Compensation of Custodian 17
8. Responsibility of Custodian 17
9. Effective Period, Termination and Amendment 19
10. Successor Custodian 20
11. Interpretive and Additional Provisions 21
12. Massachusetts Law to Apply 22
13. Notices 22
14. Counterparts 22
15. Limitations of Liability 22
CUSTODIAN CONTRACT
This Contract between those INVESTMENT COMPANIES listed on Exhibit 1, as it
may be amended from time to time, (the "Trust"), which may be Massachusetts
business trusts or Maryland corporations or have such other form of
organization as may be indicated, on behalf of the portfolios (hereinafter
collectively called the "Funds" and individually referred to as a "Fund") of
the Trust, having its principal place of business at Federated Investors
Tower, Pittsburgh, Pennsylvania, 15222-3779, and STATE STREET BANK AND TRUST
COMPANY, a Massachusetts trust company, having its principal place of business
at 225 Franklin Street, Boston, Massachusetts, 02110, hereinafter called the
"Custodian", and FEDERATED SERVICES COMPANY, a Delaware business trust
company, having its principal place of business at Federated Investors Tower,
Pittsburgh, Pennsylvania, 15222-3779, hereinafter called ("Company").
WITNESSETH: That in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
The Trust hereby employs the Custodian as the custodian of the assets of
each of the Funds of the Trust. Except as otherwise expressly provided
herein, the securities and other assets of each of the Funds shall be
segregated from the assets of each of the other Funds and from all other
persons and entities. The Trust will deliver to the Custodian all
securities and cash owned by the Funds and all payments of income,
payments of principal or capital distributions received by them with
respect to all securities owned by the Funds from time to time, and the
cash consideration received by them for shares ("Shares") of beneficial
interest/capital stock of the Funds as may be issued or sold from time
to time. The Custodian shall not be responsible for any property of the
Funds held or received by the Funds and not delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Section
2.18), the Custodian shall from time to time employ one or more sub-
custodians upon the terms specified in the Proper Instructions, provided
that the Custodian shall have no more or less responsibility or
liability to the Trust or any of the Funds on account of any actions or
omissions of any sub-custodian so employed than any such sub-custodian
has to the Custodian.
2. Duties of the Custodian With Respect to Property of the Funds Held
by the Custodian
2.1 Holding Securities. The Custodian shall hold and physically
segregate for the account of each Fund all non-cash property,
including all securities owned by each Fund, other than securities
which are maintained pursuant to Section 2.12 in a clearing agency
which acts as a securities depository or in a book-entry system
authorized by the U.S. Department of the Treasury, collectively
referred to herein as "Securities System", or securities which are
subject to a joint repurchase agreement with affiliated funds
pursuant to Section 2.14. The Custodian shall maintain records of
all receipts, deliveries and locations of such securities, together
with a current inventory thereof, and shall conduct periodic
physical inspections of certificates representing stocks, bonds and
other securities held by it under this Contract in such manner as
the Custodian shall determine from time to time to be advisable in
order to verify the accuracy of such inventory. With respect to
securities held by any agent appointed pursuant to Section 2.11
hereof, and with respect to securities held by any sub-custodian
appointed pursuant to Section 1 hereof, the Custodian may rely upon
certificates from such agent as to the holdings of such agent and
from such sub-custodian as to the holdings of such sub-custodian,
it being understood that such reliance in no way relieves the
Custodian of its responsibilities under this Contract. The
Custodian will promptly report to the Trust the results of such
inspections, indicating any shortages or discrepancies uncovered
thereby, and take appropriate action to remedy any such shortages
or discrepancies.
2.2 Delivery of Securities. The Custodian shall release and deliver
securities owned by a Fund held by the Custodian or in a Securities
System account of the Custodian only upon receipt of Proper
Instructions, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
(1) Upon sale of such securities for the account of a Fund and
receipt of payment therefor;
(2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Trust;
(3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.12 hereof;
(4) To the depository agent in connection with tender or other
similar offers for portfolio securities of a Fund, in
accordance with the provisions of Section 2.17 hereof;
(5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable; provided
that, in any such case, the cash or other consideration is to
be delivered to the Custodian;
(6) To the issuer thereof, or its agent, for transfer into the name
of a Fund or into the name of any nominee or nominees of the
Custodian or into the name or nominee name of any agent
appointed pursuant to Section 2.11 or into the name or nominee
name of any sub-custodian appointed pursuant to Section 1; or
for exchange for a different number of bonds, certificates or
other evidence representing the same aggregate face amount or
number of units; provided that, in any such case, the new
securities are to be delivered to the Custodian;
(7) Upon the sale of such securities for the account of a Fund, to
the broker or its clearing agent, against a receipt, for
examination in accordance with "street delivery custom";
provided that in any such case, the Custodian shall have no
responsibility or liability for any loss arising from the
delivery of such securities prior to receiving payment for such
securities except as may arise from the Custodian's own failure
to act in accordance with the standard of reasonable care or
any higher standard of care imposed upon the Custodian by any
applicable law or regulation if such above-stated standard of
reasonable care were not part of this Contract;
(8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment
of the securities of the issuer of such securities, or pursuant
to provisions for conversion contained in such securities, or
pursuant to any deposit agreement; provided that, in any such
case, the new securities and cash, if any, are to be delivered
to the Custodian;
(9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities; provided that,
in any such case, the new securities and cash, if any, are to
be delivered to the Custodian;
(10)For delivery in connection with any loans of portfolio
securities of a Fund, but only against receipt of adequate
collateral in the form of (a) cash, in an amount specified by
the Trust, (b) certificated securities of a description
specified by the Trust, registered in the name of the Fund or
in the name of a nominee of the Custodian referred to in
Section 2.3 hereof or in proper form for transfer, or (c)
securities of a description specified by the Trust, transferred
through a Securities System in accordance with Section 2.12
hereof;
(11)For delivery as security in connection with any borrowings
requiring a pledge of assets by a Fund, but only against
receipt of amounts borrowed, except that in cases where
additional collateral is required to secure a borrowing already
made, further securities may be released for the purpose;
(12)For delivery in accordance with the provisions of any agreement
among the Trust or a Fund, the Custodian and a broker-dealer
registered under the Securities Exchange Act of 1934, as
amended, (the "Exchange Act") and a member of The National
Association of Securities Dealers, Inc. ("NASD"), relating to
compliance with the rules of The Options Clearing Corporation
and of any registered national securities exchange, or of any
similar organization or organizations, regarding escrow or
other arrangements in connection with transactions for a Fund;
(13)For delivery in accordance with the provisions of any agreement
among the Trust or a Fund, the Custodian, and a Futures
Commission Merchant registered under the Commodity Exchange
Act, relating to compliance with the rules of the Commodity
Futures Trading Commission and/or any Contract Market, or any
similar organization or organizations, regarding account
deposits in connection with transaction for a Fund;
(14)Upon receipt of instructions from the transfer agent ("Transfer
Agent") for a Fund, for delivery to such Transfer Agent or to
the holders of shares in connection with distributions in kind,
in satisfaction of requests by holders of Shares for repurchase
or redemption; and
(15)For any other proper corporate purpose, but only upon receipt
of, in addition to Proper Instructions, a certified copy of a
resolution of the Executive Committee of the Trust on behalf of
a Fund signed by an officer of the Trust and certified by its
Secretary or an Assistant Secretary, specifying the securities
to be delivered, setting forth the purpose for which such
delivery is to be made, declaring such purpose to be a proper
corporate purpose, and naming the person or persons to whom
delivery of such securities shall be made.
2.3 Registration of Securities. Securities held by the Custodian
(other than bearer securities) shall be registered in the name of a
particular Fund or in the name of any nominee of the Fund or of any
nominee of the Custodian which nominee shall be assigned
exclusively to the Fund, unless the Trust has authorized in writing
the appointment of a nominee to be used in common with other
registered investment companies affiliated with the Fund, or in the
name or nominee name of any agent appointed pursuant to Section
2.11 or in the name or nominee name of any sub-custodian appointed
pursuant to Section 1. All securities accepted by the Custodian on
behalf of a Fund under the terms of this Contract shall be in
"street name" or other good delivery form.
2.4 Bank Accounts. The Custodian shall open and maintain a separate
bank account or accounts in the name of each Fund, subject only to
draft or order by the Custodian acting pursuant to the terms of
this Contract, and shall hold in such account or accounts, subject
to the provisions hereof, all cash received by it from or for the
account of each Fund, other than cash maintained in a joint
repurchase account with other affiliated funds pursuant to Section
2.14 of this Contract or by a particular Fund in a bank account
established and used in accordance with Rule 17f-3 under the
Investment Company Act of 1940, as amended, (the "1940 Act").
Funds held by the Custodian for a Fund may be deposited by it to
its credit as Custodian in the Banking Department of the Custodian
or in such other banks or trust companies as it may in its
discretion deem necessary or desirable; provided, however, that
every such bank or trust company shall be qualified to act as a
custodian under the 1940 Act and that each such bank or trust
company and the funds to be deposited with each such bank or trust
company shall be approved by vote of a majority of the Board of
Trustees/Directors ("Board") of the Trust. Such funds shall be
deposited by the Custodian in its capacity as Custodian for the
Fund and shall be withdrawable by the Custodian only in that
capacity. If requested by the Trust, the Custodian shall furnish
the Trust, not later than twenty (20) days after the last business
day of each month, an internal reconciliation of the closing
balance as of that day in all accounts described in this section to
the balance shown on the daily cash report for that day rendered to
the Trust.
2.5 Payments for Shares. The Custodian shall make such arrangements
with the Transfer Agent of each Fund, as will enable the Custodian
to receive the cash consideration due to each Fund and will deposit
into each Fund's account such payments as are received from the
Transfer Agent. The Custodian will provide timely notification to
the Trust and the Transfer Agent of any receipt by it of payments
for Shares of the respective Fund.
2.6 Availability of Federal Funds. Upon mutual agreement between the
Trust and the Custodian, the Custodian shall make federal funds
available to the Funds as of specified times agreed upon from time
to time by the Trust and the Custodian in the amount of checks,
clearing house funds, and other non-federal funds received in
payment for Shares of the Funds which are deposited into the Funds'
accounts.
2.7 Collection of Income.
(1) The Custodian shall collect on a timely basis all income and
other payments with respect to registered securities held
hereunder to which each Fund shall be entitled either by law or
pursuant to custom in the securities business, and shall
collect on a timely basis all income and other payments with
respect to bearer securities if, on the date of payment by the
issuer, such securities are held by the Custodian or its agent
thereof and shall credit such income, as collected, to each
Fund's custodian account. Without limiting the generality of
the foregoing, the Custodian shall detach and present for
payment all coupons and other income items requiring
presentation as and when they become due and shall collect
interest when due on securities held hereunder. The collection
of income due the Funds on securities loaned pursuant to the
provisions of Section 2.2 (10) shall be the responsibility of
the Trust. The Custodian will have no duty or responsibility
in connection therewith, other than to provide the Trust with
such information or data as may be necessary to assist the
Trust in arranging for the timely delivery to the Custodian of
the income to which each Fund is properly entitled.
(2) The Custodian shall promptly notify the Trust whenever income
due on securities is not collected in due course and will
provide the Trust with monthly reports of the status of past
due income unless the parties otherwise agree.
2.8 Payment of Fund Moneys. Upon receipt of Proper Instructions, which
may be continuing instructions when deemed appropriate by the
parties, the Custodian shall pay out moneys of each Fund in the
following cases only:
(1) Upon the purchase of securities, futures contracts or options
on futures contracts for the account of a Fund but only (a)
against the delivery of such securities, or evidence of title
to futures contracts, to the Custodian (or any bank, banking
firm or trust company doing business in the United States or
abroad which is qualified under the 1940 Act to act as a
custodian and has been designated by the Custodian as its agent
for this purpose) registered in the name of the Fund or in the
name of a nominee of the Custodian referred to in Section 2.3
hereof or in proper form for transfer, (b) in the case of a
purchase effected through a Securities System, in accordance
with the conditions set forth in Section 2.12 hereof or (c) in
the case of repurchase agreements entered into between the
Trust and any other party, (i) against delivery of the
securities either in certificate form or through an entry
crediting the Custodian's account at the Federal Reserve Bank
with such securities or (ii) against delivery of the receipt
evidencing purchase for the account of the Fund of securities
owned by the Custodian along with written evidence of the
agreement by the Custodian to repurchase such securities from
the Fund;
(2) In connection with conversion, exchange or surrender of
securities owned by a Fund as set forth in Section 2.2 hereof;
(3) For the redemption or repurchase of Shares of a Fund issued by
the Trust as set forth in Section 2.10 hereof;
(4) For the payment of any expense or liability incurred by a Fund,
including but not limited to the following payments for the
account of the Fund: interest; taxes; management, accounting,
transfer agent and legal fees; and operating expenses of the
Fund, whether or not such expenses are to be in whole or part
capitalized or treated as deferred expenses;
(5) For the payment of any dividends on Shares of a Fund declared
pursuant to the governing documents of the Trust;
(6) For payment of the amount of dividends received in respect of
securities sold short;
(7) For any other proper purpose, but only upon receipt of, in
addition to Proper Instructions, a certified copy of a
resolution of the Executive Committee of the Trust on behalf of
a Fund signed by an officer of the Trust and certified by its
Secretary or an Assistant Secretary, specifying the amount of
such payment, setting forth the purpose for which such payment
is to be made, declaring such purpose to be a proper purpose,
and naming the person or persons to whom such payment is to be
made.
2.9 Liability for Payment in Advance of Receipt of Securities
Purchased. In any and every case where payment for purchase of
securities for the account of a Fund is made by the Custodian in
advance of receipt of the securities purchased, in the absence of
specific written instructions from the Trust to so pay in advance,
the Custodian shall be absolutely liable to the Fund for such
securities to the same extent as if the securities had been
received by the Custodian.
2.10Payments for Repurchases or Redemptions of Shares of a Fund. From
such funds as may be available for the purpose of repurchasing or
redeeming Shares of a Fund, but subject to the limitations of the
Declaration of Trust/Articles of Incorporation and any applicable
votes of the Board of the Trust pursuant thereto, the Custodian
shall, upon receipt of instructions from the Transfer Agent, make
funds available for payment to holders of shares of such Fund who
have delivered to the Transfer Agent a request for redemption or
repurchase of their shares including without limitation through
bank drafts, automated clearinghouse facilities, or by other means.
In connection with the redemption or repurchase of Shares of the
Funds, the Custodian is authorized upon receipt of instructions
from the Transfer Agent to wire funds to or through a commercial
bank designated by the redeeming shareholders.
2.11Appointment of Agents. The Custodian may at any time or times in
its discretion appoint (and may at any time remove) any other bank
or trust company which is itself qualified under the 1940 Act and
any applicable state law or regulation, to act as a custodian, as
its agent to carry out such of the provisions of this Section 2 as
the Custodian may from time to time direct; provided, however, that
the appointment of any agent shall not relieve the Custodian of its
responsibilities or liabilities hereunder.
2.12Deposit of Fund Assets in Securities System. The Custodian may
deposit and/or maintain securities owned by the Funds in a clearing
agency registered with the Securities and Exchange Commission
("SEC") under Section 17A of the Exchange Act, which acts as a
securities depository, or in the book-entry system authorized by
the U.S. Department of the Treasury and certain federal agencies,
collectively referred to herein as "Securities System" in
accordance with applicable Federal Reserve Board and SEC rules and
regulations, if any, and subject to the following provisions:
(1) The Custodian may keep securities of each Fund in a Securities
System provided that such securities are represented in an
account ("Account") of the Custodian in the Securities System
which shall not include any assets of the Custodian other than
assets held as a fiduciary, custodian or otherwise for
customers;
(2) The records of the Custodian with respect to securities of the
Funds which are maintained in a Securities System shall
identify by book-entry those securities belonging to each Fund;
(3) The Custodian shall pay for securities purchased for the
account of each Fund upon (i) receipt of advice from the
Securities System that such securities have been transferred to
the Account, and (ii) the making of an entry on the records of
the Custodian to reflect such payment and transfer for the
account of the Fund. The Custodian shall transfer securities
sold for the account of a Fund upon (i) receipt of advice from
the Securities System that payment for such securities has been
transferred to the Account, and (ii) the making of an entry on
the records of the Custodian to reflect such transfer and
payment for the account of the Fund. Copies of all advices
from the Securities System of transfers of securities for the
account of a Fund shall identify the Fund, be maintained for
the Fund by the Custodian and be provided to the Trust at its
request. Upon request, the Custodian shall furnish the Trust
confirmation of each transfer to or from the account of a Fund
in the form of a written advice or notice and shall furnish to
the Trust copies of daily transaction sheets reflecting each
day's transactions in the Securities System for the account of
a Fund.
(4) The Custodian shall provide the Trust with any report obtained
by the Custodian on the Securities System's accounting system,
internal accounting control and procedures for safeguarding
securities deposited in the Securities System;
(5) The Custodian shall have received the initial certificate,
required by Section 9 hereof;
(6) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Trust for any loss or damage
to a Fund resulting from use of the Securities System by reason
of any negligence, misfeasance or misconduct of the Custodian
or any of its agents or of any of its or their employees or
from failure of the Custodian or any such agent to enforce
effectively such rights as it may have against the Securities
System; at the election of the Trust, it shall be entitled to
be subrogated to the rights of the Custodian with respect to
any claim against the Securities System or any other person
which the Custodian may have as a consequence of any such loss
or damage if and to the extent that a Fund has not been made
whole for any such loss or damage.
(7) The authorization contained in this Section 2.12 shall not
relieve the Custodian from using reasonable care and diligence
in making use of any Securities System.
2.13Segregated Account. The Custodian shall upon receipt of Proper
Instructions establish and maintain a segregated account or
accounts for and on behalf of each Fund, into which account or
accounts may be transferred cash and/or securities, including
securities maintained in an account by the Custodian pursuant to
Section 2.12 hereof, (i) in accordance with the provisions of any
agreement among the Trust, the Custodian and a broker-dealer
registered under the Exchange Act and a member of the NASD (or any
futures commission merchant registered under the Commodity Exchange
Act), relating to compliance with the rules of The Options Clearing
Corporation and of any registered national securities exchange (or
the Commodity Futures Trading Commission or any registered contract
market), or of any similar organization or organizations, regarding
escrow or other arrangements in connection with transactions for a
Fund, (ii) for purpose of segregating cash or government securities
in connection with options purchased, sold or written for a Fund or
commodity futures contracts or options thereon purchased or sold
for a Fund, (iii) for the purpose of compliance by the Trust or a
Fund with the procedures required by any release or releases of the
SEC relating to the maintenance of segregated accounts by
registered investment companies and (iv) for other proper corporate
purposes, but only, in the case of clause (iv), upon receipt of, in
addition to Proper Instructions, a certified copy of a resolution
of the Board or of the Executive Committee signed by an officer of
the Trust and certified by the Secretary or an Assistant Secretary,
setting forth the purpose or purposes of such segregated account
and declaring such purposes to be proper corporate purposes.
2.14Joint Repurchase Agreements. Upon the receipt of Proper
Instructions, the Custodian shall deposit and/or maintain any
assets of a Fund and any affiliated funds which are subject to
joint repurchase transactions in an account established solely for
such transactions for the Fund and its affiliated funds. For
purposes of this Section 2.14, "affiliated funds" shall include all
investment companies and their portfolios for which subsidiaries or
affiliates of Federated Investors serve as investment advisers,
distributors or administrators in accordance with applicable
exemptive orders from the SEC. The requirements of segregation set
forth in Section 2.1 shall be deemed to be waived with respect to
such assets.
2.15Ownership Certificates for Tax Purposes. The Custodian shall
execute ownership and other certificates and affidavits for all
federal and state tax purposes in connection with receipt of income
or other payments with respect to securities of a Fund held by it
and in connection with transfers of securities.
2.16Proxies. The Custodian shall, with respect to the securities held
hereunder, cause to be promptly executed by the registered holder
of such securities, if the securities are registered otherwise than
in the name of a Fund or a nominee of a Fund, all proxies, without
indication of the manner in which such proxies are to be voted, and
shall promptly deliver to the Trust such proxies, all proxy
soliciting materials and all notices relating to such securities.
2.17Communications Relating to Fund Portfolio Securities. The
Custodian shall transmit promptly to the Trust all written
information (including, without limitation, pendency of calls and
maturities of securities and expirations of rights in connection
therewith and notices of exercise of call and put options written
by the Fund and the maturity of futures contracts purchased or sold
by the Fund) received by the Custodian from issuers of the
securities being held for the Fund. With respect to tender or
exchange offers, the Custodian shall transmit promptly to the Trust
all written information received by the Custodian from issuers of
the securities whose tender or exchange is sought and from the
party (or his agents) making the tender or exchange offer. If the
Trust desires to take action with respect to any tender offer,
exchange offer or any other similar transaction, the Trust shall
notify the Custodian in writing at least three business days prior
to the date on which the Custodian is to take such action.
However, the Custodian shall nevertheless exercise its best efforts
to take such action in the event that notification is received
three business days or less prior to the date on which action is
required.
2.18Proper Instructions. Proper Instructions as used throughout this
Section 2 means a writing signed or initialed by one or more person
or persons as the Board shall have from time to time authorized.
Each such writing shall set forth the specific transaction or type
of transaction involved. Oral instructions will be deemed to be
Proper Instructions if (a) the Custodian reasonably believes them
to have been given by a person previously authorized in Proper
Instructions to give such instructions with respect to the
transaction involved, and (b) the Trust promptly causes such oral
instructions to be confirmed in writing. Upon receipt of a
certificate of the Secretary or an Assistant Secretary as to the
authorization by the Board of the Trust accompanied by a detailed
description of procedures approved by the Board, Proper
Instructions may include communications effected directly between
electro-mechanical or electronic devices provided that the Board
and the Custodian are satisfied that such procedures afford
adequate safeguards for a Fund's assets.
2.19Actions Permitted Without Express Authority. The Custodian may in
its discretion, without express authority from the Trust:
(1) make payments to itself or others for minor expenses of
handling securities or other similar items relating to its
duties under this Contract, provided that all such payments
shall be accounted for to the Trust in such form that it may be
allocated to the affected Fund;
(2) surrender securities in temporary form for securities in
definitive form;
(3) endorse for collection, in the name of a Fund, checks, drafts
and other negotiable instruments; and
(4) in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with the securities and property of
each Fund except as otherwise directed by the Trust.
2.20Evidence of Authority. The Custodian shall be protected in acting
upon any instructions, notice, request, consent, certificate or
other instrument or paper reasonably believed by it to be genuine
and to have been properly executed on behalf of a Fund. The
Custodian may receive and accept a certified copy of a vote of the
Board of the Trust as conclusive evidence (a) of the authority of
any person to act in accordance with such vote or (b) of any
determination of or any action by the Board pursuant to the
Declaration of Trust/Articles of Incorporation as described in such
vote, and such vote may be considered as in full force and effect
until receipt by the Custodian of written notice to the contrary.
2.21Notice to Trust by Custodian Regarding Cash Movement. The
Custodian will provide timely notification to the Trust of any
receipt of cash, income or payments to the Trust and the release of
cash or payment by the Trust.
3. Duties of Custodian With Respect to the Books of Account and Calculation
of Net Asset Value and Net Income.
The Custodian shall cooperate with and supply necessary information to
the entity or entities appointed by the Board of the Trust to keep the
books of account of each Fund and/or compute the net asset value per
share of the outstanding Shares of each Fund or, if directed in writing
to do so by the Trust, shall itself keep such books of account and/or
compute such net asset value per share. If so directed, the Custodian
shall also calculate daily the net income of a Fund as described in the
Fund's currently effective prospectus and Statement of Additional
Information ("Prospectus") and shall advise the Trust and the Transfer
Agent daily of the total amounts of such net income and, if instructed
in writing by an officer of the Trust to do so, shall advise the
Transfer Agent periodically of the division of such net income among its
various components. The calculations of the net asset value per share
and the daily income of a Fund shall be made at the time or times
described from time to time in the Fund's currently effective
Prospectus.
4. Records.
The Custodian shall create and maintain all records relating to its
activities and obligations under this Contract in such manner as will
meet the obligations of the Trust and the Funds under the 1940 Act, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2
thereunder, and specifically including identified cost records used for
tax purposes. All such records shall be the property of the Trust and
shall at all times during the regular business hours of the Custodian be
open for inspection by duly authorized officers, employees or agents of
the Trust and employees and agents of the SEC. In the event of
termination of this Contract, the Custodian will deliver all such
records to the Trust, to a successor Custodian, or to such other person
as the Trust may direct. The Custodian shall supply daily to the Trust
a tabulation of securities owned by a Fund and held by the Custodian and
shall, when requested to do so by the Trust and for such compensation as
shall be agreed upon between the Trust and the Custodian, include
certificate numbers in such tabulations.
5. Opinion of Funds' Independent Public Accountants/Auditors.
The Custodian shall take all reasonable action, as the Trust may from
time to time request, to obtain from year to year favorable opinions
from each Fund's independent public accountants/auditors with respect to
its activities hereunder in connection with the preparation of the
Fund's registration statement, periodic reports, or any other reports to
the SEC and with respect to any other requirements of such Commission.
6. Reports to Trust by Independent Public Accountants/Auditors.
The Custodian shall provide the Trust, at such times as the Trust may
reasonably require, with reports by independent public
accountants/auditors for each Fund on the accounting system, internal
accounting control and procedures for safeguarding securities, futures
contracts and options on futures contracts, including securities
deposited and/or maintained in a Securities System, relating to the
services provided by the Custodian for the Fund under this Contract;
such reports shall be of sufficient scope and in sufficient detail, as
may reasonably be required by the Trust, to provide reasonable assurance
that any material inadequacies would be disclosed by such examination
and, if there are no such inadequacies, the reports shall so state.
7. Compensation of Custodian.
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time
between Company and the Custodian.
8. Responsibility of Custodian.
The Custodian shall be held to a standard of reasonable care in carrying
out the provisions of this Contract; provided, however, that the
Custodian shall be held to any higher standard of care which would be
imposed upon the Custodian by any applicable law or regulation if such
above stated standard of reasonable care was not part of this Contract.
The Custodian shall be entitled to rely on and may act upon advice of
counsel (who may be counsel for the Trust) on all matters, and shall be
without liability for any action reasonably taken or omitted pursuant to
such advice, provided that such action is not in violation of applicable
federal or state laws or regulations, and is in good faith and without
negligence. Subject to the limitations set forth in Section 15 hereof,
the Custodian shall be kept indemnified by the Trust but only from the
assets of the Fund involved in the issue at hand and be without
liability for any action taken or thing done by it in carrying out the
terms and provisions of this Contract in accordance with the above
standards.
In order that the indemnification provisions contained in this Section 8
shall apply, however, it is understood that if in any case the Trust may
be asked to indemnify or save the Custodian harmless, the Trust shall be
fully and promptly advised of all pertinent facts concerning the
situation in question, and it is further understood that the Custodian
will use all reasonable care to identify and notify the Trust promptly
concerning any situation which presents or appears likely to present the
probability of such a claim for indemnification. The Trust shall have
the option to defend the Custodian against any claim which may be the
subject of this indemnification, and in the event that the Trust so
elects it will so notify the Custodian and thereupon the Trust shall
take over complete defense of the claim, and the Custodian shall in such
situation initiate no further legal or other expenses for which it shall
seek indemnification under this Section. The Custodian shall in no case
confess any claim or make any compromise in any case in which the Trust
will be asked to indemnify the Custodian except with the Trust's prior
written consent.
Notwithstanding the foregoing, the responsibility of the Custodian with
respect to redemptions effected by check shall be in accordance with a
separate Agreement entered into between the Custodian and the Trust.
If the Trust requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action
may, in the reasonable opinion of the Custodian, result in the Custodian
or its nominee assigned to a Fund being liable for the payment of money
or incurring liability of some other form, the Custodian may request the
Trust, as a prerequisite to requiring the Custodian to take such action,
to provide indemnity to the Custodian in an amount and form satisfactory
to the Custodian.
Subject to the limitations set forth in Section 15 hereof, the Trust
agrees to indemnify and hold harmless the Custodian and its nominee from
and against all taxes, charges, expenses, assessments, claims and
liabilities (including counsel fees) (referred to herein as authorized
charges) incurred or assessed against it or its nominee in connection
with the performance of this Contract, except such as may arise from it
or its nominee's own failure to act in accordance with the standard of
reasonable care or any higher standard of care which would be imposed
upon the Custodian by any applicable law or regulation if such above-
stated standard of reasonable care were not part of this Contract. To
secure any authorized charges and any advances of cash or securities
made by the Custodian to or for the benefit of a Fund for any purpose
which results in the Fund incurring an overdraft at the end of any
business day or for extraordinary or emergency purposes during any
business day, the Trust hereby grants to the Custodian a security
interest in and pledges to the Custodian securities held for the Fund by
the Custodian, in an amount not to exceed 10 percent of the Fund's gross
assets, the specific securities to be designated in writing from time to
time by the Trust or the Fund's investment adviser. Should the Trust
fail to make such designation, or should it instruct the Custodian to
make advances exceeding the percentage amount set forth above and should
the Custodian do so, the Trust hereby agrees that the Custodian shall
have a security interest in all securities or other property purchased
for a Fund with the advances by the Custodian, which securities or
property shall be deemed to be pledged to the Custodian, and the written
instructions of the Trust instructing their purchase shall be considered
the requisite description and designation of the property so pledged for
purposes of the requirements of the Uniform Commercial Code. Should the
Trust fail to cause a Fund to repay promptly any authorized charges or
advances of cash or securities, subject to the provision of the second
paragraph of this Section 8 regarding indemnification, the Custodian
shall be entitled to use available cash and to dispose of pledged
securities and property as is necessary to repay any such advances.
9. Effective Period, Termination and Amendment.
This Contract shall become effective as of its execution, shall continue
in full force and effect until terminated as hereinafter provided, may
be amended at any time by mutual agreement of the parties hereto and may
be terminated by either party by an instrument in writing delivered or
mailed, postage prepaid to the other party, such termination to take
effect not sooner than sixty (60) days after the date of such delivery
or mailing; provided, however that the Custodian shall not act under
Section 2.12 hereof in the absence of receipt of an initial certificate
of the Secretary or an Assistant Secretary that the Board of the Trust
has approved the initial use of a particular Securities System as
required in each case by Rule 17f-4 under the 1940 Act; provided
further, however, that the Trust shall not amend or terminate this
Contract in contravention of any applicable federal or state
regulations, or any provision of the Declaration of Trust/Articles of
Incorporation, and further provided, that the Trust may at any time by
action of its Board (i) substitute another bank or trust company for the
Custodian by giving notice as described above to the Custodian, or (ii)
immediately terminate this Contract in the event of the appointment of a
conservator or receiver for the Custodian by the appropriate banking
regulatory agency or upon the happening of a like event at the direction
of an appropriate regulatory agency or court of competent jurisdiction.
Upon termination of the Contract, the Trust shall pay to the Custodian
such compensation as may be due as of the date of such termination and
shall likewise reimburse the Custodian for its costs, expenses and
disbursements.
10. Successor Custodian.
If a successor custodian shall be appointed by the Board of the Trust,
the Custodian shall, upon termination, deliver to such successor
custodian at the office of the Custodian, duly endorsed and in the form
for transfer, all securities then held by it hereunder for each Fund and
shall transfer to separate accounts of the successor custodian all of
each Fund's securities held in a Securities System.
If no such successor custodian shall be appointed, the Custodian shall,
in like manner, upon receipt of a certified copy of a vote of the Board
of the Trust, deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board shall have been delivered to the
Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank
or trust company, which is a "bank" as defined in the 1940 Act, (delete
"doing business ... Massachusetts" unless SSBT is the Custodian) doing
business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $100,000,000, all securities, funds
and other properties held by the Custodian and all instruments held by
the Custodian relative thereto and all other property held by it under
this Contract for each Fund and to transfer to separate accounts of
such successor custodian all of each Fund's securities held in any
Securities System. Thereafter, such bank or trust company shall be the
successor of the Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing
to failure of the Trust to procure the certified copy of the vote
referred to or of the Board to appoint a successor custodian, the
Custodian shall be entitled to fair compensation for its services during
such period as the Custodian retains possession of such securities,
funds and other properties and the provisions of this Contract relating
to the duties and obligations of the Custodian shall remain in full
force and effect.
11. Interpretive and Additional Provisions.
In connection with the operation of this Contract, the Custodian and the
Trust may from time to time agree on such provisions interpretive of or
in addition to the provisions of this Contract as may in their joint
opinion be consistent with the general tenor of this Contract. Any such
interpretive or additional provisions shall be in a writing signed by
both parties and shall be annexed hereto, provided that no such
interpretive or additional provisions shall contravene any applicable
federal or state regulations or any provision of the Declaration of
Trust/Articles of Incorporation. No interpretive or additional
provisions made as provided in the preceding sentence shall be deemed to
be an amendment of this Contract.
12. Massachusetts Law to Apply.
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts.
13. Notices.
Except as otherwise specifically provided herein, Notices and other
writings delivered or mailed postage prepaid to the Trust at Federated
Investors Tower, Pittsburgh, Pennsylvania, 15222-3779, or to the
Custodian at address for SSBT only: 225 Franklin Street, Boston,
Massachusetts, 02110, or to such other address as the Trust or the
Custodian may hereafter specify, shall be deemed to have been properly
delivered or given hereunder to the respective address.
14. Counterparts.
This Contract may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original.
15. Limitations of Liability.
The Custodian is expressly put on notice of the limitation of liability
as set forth in Article XI of the Declaration of Trust of those Trusts
which are business trusts and agrees that the obligations and
liabilities assumed by the Trust and any Fund pursuant to this Contract,
including, without limitation, any obligation or liability to indemnify
the Custodian pursuant to Section 8 hereof, shall be limited in any case
to the relevant Fund and its assets and that the Custodian shall not
seek satisfaction of any such obligation from the shareholders of the
relevant Fund, from any other Fund or its shareholders or from the
Trustees, Officers, employees or agents of the Trust, or any of them.
In addition, in connection with the discharge and satisfaction of any
claim made by the Custodian against the Trust, for whatever reasons,
involving more than one Fund, the Trust shall have the exclusive right
to determine the appropriate allocations of liability for any such claim
between or among the Funds.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed effective as of the 1st day of December, 1993.
ATTEST: INVESTMENT COMPANIES
/s/John G. McGonigle_________ By /s/John G. Donahue__________
John G. McGonigle John F. Donahue
Secretary Chairman
ATTEST: STATE STREET BANK AND TRUST
COMPANY
/s/ Ed McKenzie______________ By /s/ F. J. Sidoti,
Jr._____________
(Assistant) Secretary Typed Name: Frank J. Sidoti, Jr.
Typed Name: Ed McKenzie Title: Vice President
ATTEST: FEDERATED SERVICES COMPANY
/s/ Jeannette Fisher-Garber______ By /s/ James J. Dolan____________
Jeannette Fisher-Garber James J. Dolan
Secretary President
EXHIBIT 1
<TABLE>
<S> <C>
CONTRACT
DATE INVESTMENT COMPANY
12/01/94 Money Market Trust
</TABLE>
Exhibit 9 under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
AGREEMENT
for
FUND ACCOUNTING,
SHAREHOLDER RECORDKEEPING,
and
CUSTODY SERVICES PROCUREMENT
AGREEMENT made as of December 1, 1994, by and between those investment
companies listed on Exhibit 1 as may be amended from time to time, having
their principal office and place of business at Federated Investors Tower,
Pittsburgh, PA 15222-3779 (the "Trust"), on behalf of the portfolios
(individually referred to herein as a "Fund" and collectively as "Funds") of
the Trust, and FEDERATED SERVICES COMPANY, a Delaware business trust, having
its principal office and place of business at Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779 (the "Company").
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
with authorized and issued shares of capital stock or beneficial interest
("Shares"); and
WHEREAS, the Trust may desire to retain the Company to provide certain
pricing, accounting and recordkeeping services for each of the Funds,
including any classes of shares issued by any Fund ("Classes") if so indicated
on Exhibit 1, and the Company is willing to furnish such services; and
WHEREAS, the Trust may desire to appoint the Company as its transfer agent,
dividend disbursing agent if so indicated on Exhibit 1, and agent in
connection with certain other activities, and the Company desires to accept
such appointment; and
WHEREAS, the Trust may desire to appoint the Company as its agent to
select, negotiate and subcontract for custodian services from an approved list
of qualified banks if so indicated on Exhibit 1, and the Company desires to
accept such appointment; and
WHEREAS, from time to time the Trust may desire and may instruct the
Company to subcontract for the performance of certain of its duties and
responsibilities hereunder to State Street Bank and Trust Company or another
agent (the "Agent"); and
WHEREAS, the words Trust and Fund may be used interchangeably for those
investment companies consisting of only one portfolio;
NOW THEREFORE, in consideration of the premises and mutual covenants herein
contained, and intending to be legally bound hereby, the parties hereto agree
as follows:
SECTION ONE: Fund Accounting.
Article 1. Appointment.
The Trust hereby appoints the Company to provide certain pricing and
accounting services to the Funds, and/or the Classes, for the period and on
the terms set forth in this Agreement. The Company accepts such appointment
and agrees to furnish the services herein set forth in return for the
compensation as provided in Article 3 of this Section.
Article 2. The Company's Duties.
Subject to the supervision and control of the Trust's Board of Trustees or
Directors ("Board"), the Company will assist the Trust with regard to fund
accounting for the Trust, and/or the Funds, and/or the Classes, and in
connection therewith undertakes to perform the following specific services;
A. Value the assets of the Funds using: primarily, market quotations,
including the use of matrix pricing, supplied by the independent
pricing services selected by the Company in consultation with the
adviser, or sources selected by the adviser, and reviewed by the
board; secondarily, if a designated pricing service does not provide a
price for a security which the Company believes should be available by
market quotation, the Company may obtain a price by calling brokers
designated by the investment adviser of the fund holding the security,
or if the adviser does not supply the names of such brokers, the
Company will attempt on its own to find brokers to price those
securities; thirdly, for securities for which no market price is
available, the Pricing Committee of the Board will determine a fair
value in good faith. Consistent with Rule 2a-4 of the 40 Act,
estimates may be used where necessary or appropriate. The Company's
obligations with regard to the prices received from outside pricing
services and designated brokers or other outside sources, is to
exercise reasonable care in the supervision of the pricing agent. The
Company is not the guarantor of the securities prices received from
such agents and the Company is not liable to the Fund for potential
errors in valuing a Fund's assets or calculating the net asset value
per share of such Fund or Class when the calculations are based upon
such prices. All of the above sources of prices used as described are
deemed by the Company to be authorized sources of security prices. The
Company provides daily to the adviser the securities prices used in
calculating the net asset value of the fund, for its use in preparing
exception reports for those prices on which the adviser has comment.
Further, upon receipt of the exception reports generated by the
adviser, the Company diligently pursues communication regarding
exception reports with the designated pricing agents.
B. Determine the net asset value per share of each Fund and/or Class, at
the time and in the manner from time to time determined by the Board
and as set forth in the Prospectus and Statement of Additional
Information ("Prospectus") of each Fund;
C. Calculate the net income of each of the Funds, if any;
D. Calculate capital gains or losses of each of the Funds resulting from
sale or disposition of assets, if any;
E. Maintain the general ledger and other accounts, books and financial
records of the Trust, including for each Fund, and/or Class, as
required under Section 31(a) of the 1940 Act and the Rules thereunder
in connection with the services provided by the Company;
F. Preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
the records to be maintained by Rule 31a-1 under the 1940 Act in
connection with the services provided by the Company. The Company
further agrees that all such records it maintains for the Trust are
the property of the Trust and further agrees to surrender promptly to
the Trust such records upon the Trust's request;
G. At the request of the Trust, prepare various reports or other financial
documents required by federal, state and other applicable laws and
regulations; and
H. Such other similar services as may be reasonably requested by the
Trust.
Article 3. Compensation and Allocation of Expenses.
A. The Funds will compensate the Company for its services rendered
pursuant to Section One of this Agreement in accordance with the fees
agreed upon from time to time between the parties hereto. Such fees do
not include out-of-pocket disbursements of the Company for which the
Funds shall reimburse the Company upon receipt of a separate invoice.
Out-of-pocket disbursements shall include, but shall not be limited
to, the items agreed upon between the parties from time to time.
B. The Fund and/or the Class, and not the Company, shall bear the cost of:
custodial expenses; membership dues in the Investment Company
Institute or any similar organization; transfer agency expenses;
investment advisory expenses; costs of printing and mailing stock
certificates, Prospectuses, reports and notices; administrative
expenses; interest on borrowed money; brokerage commissions; taxes and
fees payable to federal, state and other governmental agencies; fees
of Trustees or Directors of the Trust; independent auditors expenses;
Federated Administrative Services and/or Federated Administrative
Services, Inc. legal and audit department expenses billed to Federated
Services Company for work performed related to the Trust, the Funds,
or the Classes; law firm expenses; or other expenses not specified in
this Article 3 which may be properly payable by the Funds and/or
classes.
C. The compensation and out-of-pocket expenses shall be accrued by the
Fund and shall be paid to the Company no less frequently than monthly,
and shall be paid daily upon request of the Company. The Company will
maintain detailed information about the compensation and out-of-pocket
expenses by Fund and Class.
D. Any schedule of compensation agreed to hereunder, as may be adjusted
from time to time, shall be dated and signed by a duly authorized
officer of the Trust and/or the Funds and a duly authorized officer of
the Company.
E. The fee for the period from the effective date of this Agreement with
respect to a Fund or a Class to the end of the initial month shall be
prorated according to the proportion that such period bears to the
full month period. Upon any termination of this Agreement before the
end of any month, the fee for such period shall be prorated according
to the proportion which such period bears to the full month period.
For purposes of determining fees payable to the Company, the value of
the Fund's net assets shall be computed at the time and in the manner
specified in the Fund's Prospectus.
F. The Company, in its sole discretion, may from time to time subcontract
to, employ or associate with itself such person or persons as the
Company may believe to be particularly suited to assist it in
performing services under this Section One. Such person or persons may
be third-party service providers, or they may be officers and
employees who are employed by both the Company and the Funds. The
compensation of such person or persons shall be paid by the Company
and no obligation shall be incurred on behalf of the Trust, the Funds,
or the Classes in such respect.
SECTION TWO: Shareholder Recordkeeping.
Article 4. Terms of Appointment.
Subject to the terms and conditions set forth in this Agreement, the Trust
hereby appoints the Company to act as, and the Company agrees to act as,
transfer agent and dividend disbursing agent for each Fund's Shares, and agent
in connection with any accumulation, open-account or similar plans provided to
the shareholders of any Fund ("Shareholder(s)"), including without limitation
any periodic investment plan or periodic withdrawal program.
As used throughout this Agreement, a "Proper Instruction" means a writing
signed or initialed by one or more person or persons as the Board shall have
from time to time authorized. Each such writing shall set forth the specific
transaction or type of transaction involved. Oral instructions will be deemed
to be Proper Instructions if (a) the Company reasonably believes them to have
been given by a person previously authorized in Proper Instructions to give
such instructions with respect to the transaction involved, and (b) the Trust,
or the Fund, and the Company promptly cause such oral instructions to be
confirmed in writing. Proper Instructions may include communications effected
directly between electro-mechanical or electronic devices provided that the
Trust, or the Fund, and the Company are satisfied that such procedures afford
adequate safeguards for the Fund's assets. Proper Instructions may only be
amended in writing.
Article 5. Duties of the Company.
The Company shall perform the following services in accordance with Proper
Instructions as may be provided from time to time by the Trust as to any Fund:
A. Purchases
(1) The Company shall receive orders and payment for the purchase of
shares and promptly deliver payment and appropriate
documentation therefore to the custodian of the relevant Fund,
(the "Custodian"). The Company shall notify the Fund and the
Custodian on a daily basis of the total amount of orders and
payments so delivered.
(2) Pursuant to purchase orders and in accordance with the Fund's
current Prospectus, the Company shall compute and issue the
appropriate number of Shares of each Fund and/or Class and hold
such Shares in the appropriate Shareholder accounts.
(3) For certificated Funds and/or Classes, if a Shareholder or its
agent requests a certificate, the Company, as Transfer Agent,
shall countersign and mail by first class mail, a certificate to
the Shareholder at its address as set forth on the transfer
books of the Funds, and/or Classes, subject to any Proper
Instructions regarding the delivery of certificates.
(4) In the event that any check or other order for the purchase of
Shares of the Fund and/or Class is returned unpaid for any
reason, the Company shall debit the Share account of the
Shareholder by the number of Shares that had been credited to
its account upon receipt of the check or other order, promptly
mail a debit advice to the Shareholder, and notify the Fund
and/or Class of its action. In the event that the amount paid
for such Shares exceeds proceeds of the redemption of such
Shares plus the amount of any dividends paid with respect to
such Shares, the Fund and/the Class or its distributor will
reimburse the Company on the amount of such excess.
B. Distribution
(1) Upon notification by the Funds of the declaration of any
distribution to Shareholders, the Company shall act as Dividend
Disbursing Agent for the Funds in accordance with the provisions
of its governing document and the then-current Prospectus of the
Fund. The Company shall prepare and mail or credit income,
capital gain, or any other payments to Shareholders. As the
Dividend Disbursing Agent, the Company shall, on or before the
payment date of any such distribution, notify the Custodian of
the estimated amount required to pay any portion of said
distribution which is payable in cash and request the Custodian
to make available sufficient funds for the cash amount to be
paid out. The Company shall reconcile the amounts so requested
and the amounts actually received with the Custodian on a daily
basis. If a Shareholder is entitled to receive additional Shares
by virtue of any such distribution or dividend, appropriate
credits shall be made to the Shareholder's account, for
certificated Funds and/or Classes, delivered where requested;
and
(2) The Company shall maintain records of account for each Fund and
Class and advise the Trust, each Fund and Class and its
Shareholders as to the foregoing.
C. Redemptions and Transfers
(1) The Company shall receive redemption requests and redemption
directions and, if such redemption requests comply with the
procedures as may be described in the Fund Prospectus or set
forth in Proper Instructions, deliver the appropriate
instructions therefor to the Custodian. The Company shall notify
the Funds on a daily basis of the total amount of redemption
requests processed and monies paid to the Company by the
Custodian for redemptions.
(2) At the appropriate time upon receiving redemption proceeds from
the Custodian with respect to any redemption, the Company shall
pay or cause to be paid the redemption proceeds in the manner
instructed by the redeeming Shareholders, pursuant to procedures
described in the then-current Prospectus of the Fund.
(3) If any certificate returned for redemption or other request for
redemption does not comply with the procedures for redemption
approved by the Fund, the Company shall promptly notify the
Shareholder of such fact, together with the reason therefor, and
shall effect such redemption at the price applicable to the date
and time of receipt of documents complying with said procedures.
(4) The Company shall effect transfers of Shares by the registered
owners thereof.
(5) The Company shall identify and process abandoned accounts and
uncashed checks for state escheat requirements on an annual
basis and report such actions to the Fund.
D. Recordkeeping
(1) The Company shall record the issuance of Shares of each Fund,
and/or Class, and maintain pursuant to applicable rules of the
Securities and Exchange Commission ("SEC") a record of the total
number of Shares of the Fund and/or Class which are authorized,
based upon data provided to it by the Fund, and issued and
outstanding. The Company shall also provide the Fund on a
regular basis or upon reasonable request with the total number
of Shares which are authorized and issued and outstanding, but
shall have no obligation when recording the issuance of Shares,
except as otherwise set forth herein, to monitor the issuance of
such Shares or to take cognizance of any laws relating to the
issue or sale of such Shares, which functions shall be the sole
responsibility of the Funds.
(2) The Company shall establish and maintain records pursuant to
applicable rules of the SEC relating to the services to be
performed hereunder in the form and manner as agreed to by the
Trust or the Fund to include a record for each Shareholder's
account of the following:
(a) Name, address and tax identification number (and whether
such number has been certified);
(b) Number of Shares held;
(c) Historical information regarding the account, including
dividends paid and date and price for all transactions;
(d) Any stop or restraining order placed against the account;
(e) Information with respect to withholding in the case of a
foreign account or an account for which withholding is
required by the Internal Revenue Code;
(f) Any dividend reinvestment order, plan application, dividend
address and correspondence relating to the current
maintenance of the account;
(g) Certificate numbers and denominations for any Shareholder
holding certificates;
(h) Any information required in order for the Company to
perform the calculations contemplated or required by this
Agreement.
(3) The Company shall preserve any such records required to be
maintained pursuant to the rules of the SEC for the periods
prescribed in said rules as specifically noted below. Such
record retention shall be at the expense of the Company, and
such records may be inspected by the Fund at reasonable times.
The Company may, at its option at any time, and shall forthwith
upon the Fund's demand, turn over to the Fund and cease to
retain in the Company's files, records and documents created and
maintained by the Company pursuant to this Agreement, which are
no longer needed by the Company in performance of its services
or for its protection. If not so turned over to the Fund, such
records and documents will be retained by the Company for six
years from the year of creation, during the first two of which
such documents will be in readily accessible form. At the end of
the six year period, such records and documents will either be
turned over to the Fund or destroyed in accordance with Proper
Instructions.
E. Confirmations/Reports
(1) The Company shall furnish to the Fund periodically the following
information:
(a) A copy of the transaction register;
(b) Dividend and reinvestment blotters;
(c) The total number of Shares issued and outstanding in each
state for "blue sky" purposes as determined according to
Proper Instructions delivered from time to time by the
Fund to the Company;
(d) Shareholder lists and statistical information;
(e) Payments to third parties relating to distribution
agreements, allocations of sales loads, redemption fees,
or other transaction- or sales-related payments;
(f) Such other information as may be agreed upon from time to
time.
(2) The Company shall prepare in the appropriate form, file with the
Internal Revenue Service and appropriate state agencies, and, if
required, mail to Shareholders, such notices for reporting
dividends and distributions paid as are required to be so filed
and mailed and shall withhold such sums as are required to be
withheld under applicable federal and state income tax laws,
rules and regulations.
(3) In addition to and not in lieu of the services set forth above,
the Company shall:
(a) Perform all of the customary services of a transfer agent,
dividend disbursing agent and, as relevant, agent in
connection with accumulation, open-account or similar
plans (including without limitation any periodic
investment plan or periodic withdrawal program), including
but not limited to: maintaining all Shareholder accounts,
mailing Shareholder reports and Prospectuses to current
Shareholders, withholding taxes on accounts subject to
back-up or other withholding (including non-resident alien
accounts), preparing and filing reports on U.S. Treasury
Department Form 1099 and other appropriate forms required
with respect to dividends and distributions by federal
authorities for all Shareholders, preparing and mailing
confirmation forms and statements of account to
Shareholders for all purchases and redemptions of Shares
and other conformable transactions in Shareholder
accounts, preparing and mailing activity statements for
Shareholders, and providing Shareholder account
information; and
(b) provide a system which will enable the Fund to monitor the
total number of Shares of each Fund and/or Class sold in
each state ("blue sky reporting"). The Fund shall by
Proper Instructions (i) identify to the Company those
transactions and assets to be treated as exempt from the
blue sky reporting for each state and (ii) verify the
classification of transactions for each state on the
system prior to activation and thereafter monitor the
daily activity for each state. The responsibility of the
Company for each Fund's and/or Class's state blue sky
registration status is limited solely to the recording of
the initial classification of transactions or accounts
with regard to blue sky compliance and the reporting of
such transactions and accounts to the Fund as provided
above.
F. Other Duties
(1) The Company shall answer correspondence from Shareholders
relating to their Share accounts and such other correspondence
as may from time to time be addressed to the Company;
(2) The Company shall prepare Shareholder meeting lists, mail proxy
cards and other material supplied to it by the Fund in
connection with Shareholder Meetings of each Fund; receive,
examine and tabulate returned proxies, and certify the vote of
the Shareholders;
(3) The Company shall establish and maintain facilities and
procedures for safekeeping of stock certificates, check forms
and facsimile signature imprinting devices, if any; and for the
preparation or use, and for keeping account of, such
certificates, forms and devices.
Article 6. Duties of the Trust.
A. Compliance
The Trust or Fund assume full responsibility for the preparation,
contents and distribution of their own and/or their classes'
Prospectus and for complying with all applicable requirements of the
Securities Act of 1933, as amended (the "1933 Act"), the 1940 Act and
any laws, rules and regulations of government authorities having
jurisdiction.
B. Share Certificates
The Trust shall supply the Company with a sufficient supply of blank
Share certificates and from time to time shall renew such supply upon
request of the Company. Such blank Share certificates shall be
properly signed, manually or by facsimile, if authorized by the Trust
and shall bear the seal of the Trust or facsimile thereof; and
notwithstanding the death, resignation or removal of any officer of
the Trust authorized to sign certificates, the Company may continue to
countersign certificates which bear the manual or facsimile signature
of such officer until otherwise directed by the Trust.
C. Distributions
The Fund shall promptly inform the Company of the declaration of any
dividend or distribution on account of any Fund's shares.
Article 7. Compensation and Expenses.
A. Annual Fee
For performance by the Company pursuant to Section Two of this
Agreement, the Trust and/or the Fund agree to pay the Company an
annual maintenance fee for each Shareholder account as agreed upon
between the parties and as may be added to or amended from time to
time. Such fees may be changed from time to time subject to written
agreement between the Trust and the Company. Pursuant to information
in the Fund Prospectus or other information or instructions from the
Fund, the Company may sub-divide any Fund into Classes or other sub-
components for recordkeeping purposes. The Company will charge the
Fund the same fees for each such Class or sub-component the same as if
each were a Fund.
B. Reimbursements
In addition to the fee paid under Article 7A above, the Trust and/or
Fund agree to reimburse the Company for out-of-pocket expenses or
advances incurred by the Company for the items agreed upon between the
parties, as may be added to or amended from time to time. In addition,
any other expenses incurred by the Company at the request or with the
consent of the Trust and/or the Fund, will be reimbursed by the
appropriate Fund.
C. Payment
The compensation and out-of-pocket expenses shall be accrued by the
Fund and shall be paid to the Company no less frequently than monthly,
and shall be paid daily upon request of the Company. The Company will
maintain detailed information about the compensation and out-of-pocket
expenses by Fund and Class.
D. Any schedule of compensation agreed to hereunder, as may be adjusted
from time to time, shall be dated and signed by a duly authorized
officer of the Trust and/or the Funds and a duly authorized officer of
the Company.
Article 8. Assignment of Shareholder Recordkeeping.
Except as provided below, no right or obligation under this Section Two may
be assigned by either party without the written consent of the other party.
A. This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
B. The Company may without further consent on the part of the Trust
subcontract for the performance hereof with (A) State Street Bank and
its subsidiary, Boston Financial Data Services, Inc., a Massachusetts
Trust ("BFDS"), which is duly registered as a transfer agent pursuant
to Section 17A(c)(1) of the Securities Exchange Act of 1934, as
amended, or any succeeding statute ("Section 17A(c)(1)"), or (B) a
BFDS subsidiary duly registered as a transfer agent pursuant to
Section 17A(c)(1), or (C) a BFDS affiliate, or (D) such other provider
of services duly registered as a transfer agent under Section
17A(c)(1) as Company shall select; provided, however, that the Company
shall be as fully responsible to the Trust for the acts and omissions
of any subcontractor as it is for its own acts and omissions; or
C. The Company shall upon instruction from the Trust subcontract for the
performance hereof with an Agent selected by the Trust, other than
BFDS or a provider of services selected by Company, as described in
(2) above; provided, however, that the Company shall in no way be
responsible to the Trust for the acts and omissions of the Agent.
SECTION THREE: Custody Services Procurement.
Article 9. Appointment.
The Trust hereby appoints Company as its agent to evaluate and obtain
custody services from a financial institution that (i) meets the criteria
established in Section 17(f) of the 1940 Act and (ii) has been approved by the
Board as eligible for selection by the Company as a custodian (the "Eligible
Custodian"). The Company accepts such appointment.
Article 10. The Company and Its Duties.
Subject to the review, supervision and control of the Board, the Company
shall:
A. evaluate the nature and the quality of the custodial services provided
by the Eligible Custodian;
B. employ the Eligible Custodian to serve on behalf of the Trust as
Custodian of the Trust's assets substantially on the terms set forth
as the form of agreement in Exhibit 2;
C. negotiate and enter into agreements with the Custodians for the benefit
of the Trust, with the Trust as a party to each such agreement. The
Company shall not be a party to any agreement with any such Custodian;
D. establish procedures to monitor the nature and the quality of the
services provided by the Custodians;
E. continuously monitor the nature and the quality of services provided by
the Custodians; and
F. periodically provide to the Trust (i) written reports on the activities
and services of the Custodians; (ii) the nature and amount of
disbursement made on account of the Trust with respect to each
custodial agreement; and (iii) such other information as the Board
shall reasonably request to enable it to fulfill its duties and
obligations under Sections 17(f) and 36(b) of the 1940 Act and other
duties and obligations thereof.
Article 11. Fees and Expenses.
A. Annual Fee
For the performance by the Company pursuant to Section Three of this
Agreement, the Trust and/or the Fund agree to pay the Company an
annual fee as agreed upon between the parties.
B. Reimbursements
In addition to the fee paid under Section 11A above, the Trust and/or
Fund agree to reimburse the Company for out-of-pocket expenses or
advances incurred by the Company for the items agreed upon between the
parties, as may be added to or amended from time to time. In addition,
any other expenses incurred by the Company at the request or with the
consent of the Trust and/or the Fund, will be reimbursed by the
appropriate Fund.
C. Payment
The compensation and out-of-pocket expenses shall be accrued by the
Fund and shall be paid to the Company no less frequently than monthly,
and shall be paid daily upon request of the Company. The Company will
maintain detailed information about the compensation and out-of-pocket
expenses by Fund.
D. Any schedule of compensation agreed to hereunder, as may be adjusted
from time to time, shall be dated and signed by a duly authorized
officer of the Trust and/or the Funds and a duly authorized officer of
the Company.
Article 12. Representations.
The Company represents and warrants that it has obtained all required
approvals from all government or regulatory authorities necessary to enter
into this arrangement and to provide the services contemplated in Section
Three of this Agreement.
SECTION FOUR: General Provisions.
Article 13. Documents.
A. In connection with the appointment of the Company under this Agreement,
the Trust shall file with the Company the following documents:
(1) A copy of the Charter and By-Laws of the Trust and all amendments
thereto;
(2) A copy of the resolution of the Board of the Trust authorizing
this Agreement;
(3) Specimens of all forms of outstanding Share certificates of the
Trust or the Funds in the forms approved by the Board of the
Trust with a certificate of the Secretary of the Trust as to
such approval;
(4) All account application forms and other documents relating to
Shareholders accounts; and
(5) A copy of the current Prospectus for each Fund.
B. The Fund will also furnish from time to time the following documents:
(1) Each resolution of the Board of the Trust authorizing the
original issuance of each Fund's, and/or Class's Shares;
(2) Each Registration Statement filed with the SEC and amendments
thereof and orders relating thereto in effect with respect to
the sale of Shares of any Fund, and/or Class;
(3) A certified copy of each amendment to the governing document and
the By-Laws of the Trust;
(4) Certified copies of each vote of the Board authorizing officers
to give Proper Instructions to the Custodian and agents for fund
accountant, custody services procurement, and shareholder
recordkeeping or transfer agency services;
(5) Specimens of all new Share certificates representing Shares of
any Fund, accompanied by Board resolutions approving such forms;
(6) Such other certificates, documents or opinions which the Company
may, in its discretion, deem necessary or appropriate in the
proper performance of its duties; and
(7) Revisions to the Prospectus of each Fund.
Article 14. Representations and Warranties.
A. Representations and Warranties of the Company
The Company represents and warrants to the Trust that:
(1) It is a business trust duly organized and existing and in good
standing under the laws of the State of Delaware.
(2) It is duly qualified to carry on its business in the State of
Delaware.
(3) It is empowered under applicable laws and by its charter and by-
laws to enter into and perform this Agreement.
(4) All requisite corporate proceedings have been taken to authorize
it to enter into and perform its obligations under this
Agreement.
(5) It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
(6) It is in compliance with federal securities law requirements and
in good standing as a transfer agent.
B. Representations and Warranties of the Trust
The Trust represents and warrants to the Company that:
(1) It is an investment company duly organized and existing and in
good standing under the laws of its state of organization;
(2) It is empowered under applicable laws and by its Charter and By-
Laws to enter into and perform its obligations under this
Agreement;
(3) All corporate proceedings required by said Charter and By-Laws
have been taken to authorize it to enter into and perform its
obligations under this Agreement;
(4) The Trust is an open-end investment company registered under the
1940 Act; and
(5) A registration statement under the 1933 Act will be effective,
and appropriate state securities law filings have been made and
will continue to be made, with respect to all Shares of each
Fund being offered for sale.
Article 15. Standard of Care and Indemnification.
A. Standard of Care
The Company shall be held to a standard of reasonable care in carrying
out the provisions of this Contract. The Company shall be entitled to
rely on and may act upon advice of counsel (who may be counsel for the
Trust) on all matters, and shall be without liability for any action
reasonably taken or omitted pursuant to such advice, provided that
such action is not in violation of applicable federal or state laws or
regulations, and is in good faith and without negligence.
B. Indemnification by Trust
The Company shall not be responsible for and the Trust or Fund shall
indemnify and hold the Company, including its officers, directors,
shareholders and their agents employees and affiliates, harmless
against any and all losses, damages, costs, charges, counsel fees,
payments, expenses and liabilities arising out of or attributable to:
(1) The acts or omissions of any Custodian, Adviser, Sub-adviser or
other party contracted by or approved by the Trust or Fund,
(2) The reliance on or use by the Company or its agents or
subcontractors of information, records and documents in proper
form which
(a) are received by the Company or its agents or subcontractors
and furnished to it by or on behalf of the Fund, its
Shareholders or investors regarding the purchase,
redemption or transfer of Shares and Shareholder account
information;
(b) are received by the Company from independent pricing
services or sources for use in valuing the assets of the
Funds; or
(c) are received by the Company or its agents or subcontractors
from Advisers, Sub-advisers or other third parties
contracted by or approved by the Trust of Fund for use in
the performance of services under this Agreement;
(d) have been prepared and/or maintained by the Fund or its
affiliates or any other person or firm on behalf of the
Trust.
(3) The reliance on, or the carrying out by the Company or its agents
or subcontractors of Proper Instructions of the Trust or the
Fund.
(4) The offer or sale of Shares in violation of any requirement under
the federal securities laws or regulations or the securities
laws or regulations of any state that such Shares be registered
in such state or in violation of any stop order or other
determination or ruling by any federal agency or any state with
respect to the offer or sale of such Shares in such state.
Provided, however, that the Company shall not be protected by
this Article 15.A. from liability for any act or omission
resulting from the Company's willful misfeasance, bad faith,
negligence or reckless disregard of its duties of failure to
meet the standard of care set forth in 15.A. above.
C. Reliance
At any time the Company may apply to any officer of the Trust or Fund
for instructions, and may consult with legal counsel with respect to
any matter arising in connection with the services to be performed by
the Company under this Agreement, and the Company and its agents or
subcontractors shall not be liable and shall be indemnified by the
Trust or the appropriate Fund for any action reasonably taken or
omitted by it in reliance upon such instructions or upon the opinion
of such counsel provided such action is not in violation of applicable
federal or state laws or regulations. The Company, its agents and
subcontractors shall be protected and indemnified in recognizing stock
certificates which are reasonably believed to bear the proper manual
or facsimile signatures of the officers of the Trust or the Fund, and
the proper countersignature of any former transfer agent or registrar,
or of a co-transfer agent or co-registrar.
D. Notification
In order that the indemnification provisions contained in this
Article 15 shall apply, upon the assertion of a claim for which either
party may be required to indemnify the other, the party seeking
indemnification shall promptly notify the other party of such
assertion, and shall keep the other party advised with respect to all
developments concerning such claim. The party who may be required to
indemnify shall have the option to participate with the party seeking
indemnification in the defense of such claim. The party seeking
indemnification shall in no case confess any claim or make any
compromise in any case in which the other party may be required to
indemnify it except with the other party's prior written consent.
Article 16. Termination of Agreement.
This Agreement may be terminated by either party upon one hundred twenty
(120) days written notice to the other. Should the Trust exercise its rights
to terminate, all out-of-pocket expenses associated with the movement of
records and materials will be borne by the Trust or the appropriate Fund.
Additionally, the Company reserves the right to charge for any other
reasonable expenses associated with such termination. The provisions of
Article 15 shall survive the termination of this Agreement.
Article 17. Amendment.
This Agreement may be amended or modified by a written agreement executed
by both parties.
Article 18. Interpretive and Additional Provisions.
In connection with the operation of this Agreement, the Company and the
Trust may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Agreement as may in their joint opinion be
consistent with the general tenor of this Agreement. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall
be annexed hereto, provided that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision
of the Charter. No interpretive or additional provisions made as provided in
the preceding sentence shall be deemed to be an amendment of this Agreement.
Article 19. Governing Law.
This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the Commonwealth of Massachusetts
Article 20. Notices.
Except as otherwise specifically provided herein, Notices and other
writings delivered or mailed postage prepaid to the Trust at Federated
Investors Tower, Pittsburgh, Pennsylvania, 15222-3779, or to the Company at
Federated Investors Tower, Pittsburgh, Pennsylvania, 15222-3779, or to such
other address as the Trust or the Company may hereafter specify, shall be
deemed to have been properly delivered or given hereunder to the respective
address.
Article 21. Counterparts.
This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original.
Article 22. Limitations of Liability of Trustees and Shareholders of the Trust.
The execution and delivery of this Agreement have been authorized by the
Trustees of the Trust and signed by an authorized officer of the Trust, acting
as such, and neither such authorization by such Trustees nor such execution
and delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, and the
obligations of this Agreement are not binding upon any of the Trustees or
Shareholders of the Trust, but bind only the appropriate property of the Fund,
or Class, as provided in the Declaration of Trust.
Article 23. Limitations of Liability of Trustees and Shareholders of
the Company.
The execution and delivery of this Agreement have been authorized by the
Trustees of the Company and signed by an authorized officer of the Company,
acting as such, and neither such authorization by such Trustees nor such
execution and delivery by such officer shall be deemed to have been made by
any of them individually or to impose any liability on any of them personally,
and the obligations of this Agreement are not binding upon any of the Trustees
or Shareholders of the Company, but bind only the property of the Company as
provided in the Declaration of Trust.
Article 24. Assignment.
This Agreement and the rights and duties hereunder shall not be assignable
with respect to the Trust or the Funds by either of the parties hereto except
by the specific written consent of the other party.
Article 25. Merger of Agreement.
This Agreement constitutes the entire agreement between the parties hereto
and supersedes any prior agreement with respect to the subject hereof whether
oral or written.
Article 26. Successor Agent.
If a successor agent for the Trust shall be appointed by the Trust, the
Company shall upon termination of this Agreement deliver to such successor
agent at the office of the Company all properties of the Trust held by it
hereunder. If no such successor agent shall be appointed, the Company shall at
its office upon receipt of Proper Instructions deliver such properties in
accordance with such instructions.
In the event that no written order designating a successor agent or Proper
Instructions shall have been delivered to the Company on or before the date
when such termination shall become effective, then the Company shall have the
right to deliver to a bank or trust company, which is a "bank" as defined in
the 1940 Act, of its own selection, having an aggregate capital, surplus, and
undivided profits, as shown by its last published report, of not less than
$2,000,000, all properties held by the Company under this Agreement.
Thereafter, such bank or trust company shall be the successor of the Company
under this Agreement.
Article 27. Force Majeure.
The Company shall have no liability for cessation of services hereunder or
any damages resulting therefrom to the Fund as a result of work stoppage,
power or other mechanical failure, natural disaster, governmental action,
communication disruption or other impossibility of performance.
Article 28. Assignment; Successors.
This Agreement shall not be assigned by either party without the prior
written consent of the other party, except that either party may assign to a
successor all of or a substantial portion of its business, or to a party
controlling, controlled by, or under common control with such party. Nothing
in this Article 28 shall prevent the Company from delegating its
responsibilities to another entity to the extent provided herein.
Article 29. Severability.
In the event any provision of this Agreement is held illegal, void or
unenforceable, the balance shall remain in effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf under their seals by and through
their duly authorized officers, as of the day and year first above written.
ATTEST: INVESTMENT COMPANIES
(listed on Exhibit 1)
/s/ John W. McGonigle_______ By:__/s/ John F. Donahue___
John W. McGonigle John F. Donahue
Secretary Chairman
ATTEST: FEDERATED SERVICES COMPANY
/s/ Jeannette Fisher-Garber By:_/s/ James J. Dolan_____
Jeannette Fisher-Garber James J. Dolan
Secretary President
EXHIBIT 1
12/01/94 MONEY MARKET TRUST
FEDERATED SERVICES COMPANY provides the following services:
Fund Accounting
Shareholder Recordkeeping
Exhibit 19 under Form N-1A
Exhibit 24 under 601/Reg S-K
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints the Secretary and Assistant Secretary of MONEY MARKET TRUST
and the Deputy General Counsel of Federated Investors, and each of them, their
true and lawful attorneys-in-fact and agents, with full power of substitution
and resubstitution for them and in their names, place and stead, in any and
all capacities, to sign any and all documents to be filed with the Securities
and Exchange Commission pursuant to the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940, by means of the
Securities and Exchange Commission's electronic disclosure system known as
EDGAR; and to file the same, with all exhibits thereto and other documents in
connection 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 September 11, 1995
John F. Donahue (Chief Executive Officer)
/s/ Glen R. Johnson President September 11, 1995
Glen R. Johnson
/s/ David M. Taylor Treasurer September 11, 1995
David M. Taylor (Principal Financial and
Accounting Officer)
/s/ Thomas G. Bigley September 11, 1995
Thomas G. Bigley
/s/ John T. Conroy, Jr. September 11, 1995
John T. Conroy, Jr.
SIGNATURES TITLE DATE
/s/ William J. Copeland September 11, 1995
William J. Copeland
/s/ James E. Dowd September 11, 1995
James E. Dowd
/s/ Lawrence D. Ellis, M.D. September 11, 1995
Lawrence D. Ellis, M.D.
/s/ Edward L. Flaherty, Jr. September 11, 1995
Edward L. Flaherty, Jr.
/s/ Peter E. Madden September 11, 1995
Peter E. Madden
/s/ Gregor F. Meyer September 11, 1995
Gregor F. Meyer
/s/ John E. Murray, Jr. September 11, 1995
John E. Murray, Jr.
/s/ Wesley W. Posvar September 11, 1995
Wesley W. Posvar
/s/ Marjorie P. Smuts September 11, 1995
Marjorie P. Smuts
Sworn to and subscribed before me this 11th day of September, 1995
Marie M. Hamm
Notorial Seal
Marie M. Hamm, Notary Public
Plum Boro, Alleghany County
My Commission Expires Sept. 16, 1996
Member, Pennsylvania Association of Notaries
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<NAME> Money Market Trust
<PERIOD-TYPE> 12-MOS
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<PERIOD-END> Jul-31-1995
<INVESTMENTS-AT-COST> 507,345,430
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