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. 39 ........ X
--
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 27 ....................... 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, 1996 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 16, 1996; 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; 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; Tax
Information; Federal Income Tax; State
and Local 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...............Massachusetts Partnership Law.
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, management investment company (a mutual
fund). The Trust invests 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, 1996, with the Securities and Exchange Commission ("SEC"). The
information contained in the Statement of Additional Information is
incorporated by reference into this prospectus. You may request a copy of
the Statement of Additional Information or a paper copy of this prospectus,
if you have received your prospectus electronically, free of charge by
calling 1-800-341-7400. To obtain other information, or make inquiries about
the Trust, contact the Trust at the address listed in the back of this
prospectus. The Statement of Additional Information, material incorporated
by reference into this document, and other information regarding the Trust
is maintained electronically with the SEC at Internet Web site
(http://www.sec.gov).
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, 1996
Table of Contents
<TABLE>
<S> <C>
SUMMARY OF TRUST EXPENSES 1
FINANCIAL HIGHLIGHTS 2
GENERAL INFORMATION 3
INVESTMENT INFORMATION 3
Investment Objective 3
Investment Policies 3
Investment Limitations 5
TRUST INFORMATION 6
Management of the Trust 6
Distribution of Shares 7
Administration of the Trust 7
NET ASSET VALUE 7
HOW TO PURCHASE SHARES 8
HOW TO REDEEM SHARES 9
ACCOUNT AND SHARE INFORMATION 10
TAX INFORMATION 10
Federal Income Tax 10
State and Local Taxes 10
PERFORMANCE INFORMATION 11
FINANCIAL STATEMENTS 12
INDEPENDENT AUDITORS' REPORT 22
ADDRESSES 23
</TABLE>
SUMMARY OF TRUST EXPENSES
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C> <C>
Maximum Sales Charge Imposed on Purchases (as a percentage of offering price) None
Maximum Sales Charge Imposed on Reinvested Dividends (as a percentage of offering price) None
Contingent Deferred Sales Charge (as a percentage of original purchase
price or redemption proceeds, as applicable) None
Redemption Fee (as a percentage of amount redeemed, if applicable) None
Exchange Fee None
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver)(1) 0.26%
12b-1 Fee None
Total Other Expenses 0.20%
Shareholder Services Fee (after waiver)(2) 0.05%
Total Operating Expenses(3) 0.46%
</TABLE>
(1) The management fee has been reduced to reflect the voluntary 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 operating expenses would have been 0.80% absent the voluntary
waiver of a portion of the management fee and 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 22.
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING
OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM
INVESTMENT
OPERATIONS
Net investment
income 0.05 0.05 0.03 0.03 0.04
LESS DISTRIBUTIONS
Distributions
from net
investment
income (0.05) (0.05) (0.03) (0.03) (0.04))
NET ASSET
VALUE, END
OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(A) 5.31% 5.42% 3.18% 3.00% 4.49%
RATIOS TO AVERAGE
NET ASSETS
Expenses 0.46% 0.46% 0.46% 0.46% 0.46%
Net investment
income 5.22% 5.32% 3.11% 2.98% 4.40%
Net assets, end
of period
(000 omitted) $513,687 $507,272 $539,983 $712,577 $943,893
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING
OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM
INVESTMENT
OPERATIONS
Net investment
income 0.07 0.08 0.09 0.07 0.06
LESS DISTRIBUTIONS
Distributions
from net
investment
income (0.07) (0.08) (0.09) (0.07) (0.06)
NET ASSET
VALUE, END
OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(A) 7.05% 8.43% 8.93% 6.94% 5.98%
RATIOS TO AVERAGE
NET ASSETS
Expenses 0.46% 0.46% 0.45% 0.45% 0.45%
Net investment
income 6.88% 8.14% 8.58% 6.72% 5.80%
Net assets, end
of period
(000 omitted) $956,538 $1,189,023 $1,649,683 $1,685,914 $1,747,618
</TABLE>
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(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 over 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 complying with the diversification and other requirements of Rule 2a-7
under the Investment Company Act of 1940 which regulates money market mutual
funds and 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 or the Savings Association
Insurance Fund. Bank Instruments may include Eurodollar Certificates of
Deposit, Yankee Certificates of Deposit and Eurodollar Time Deposits. 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.
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 securities to the Trust and agree at the time of sale to
repurchase them at a mutually agreed upon time and price. 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. Any
bankruptcy, receivership, or default of the party providing the credit
enhancement will adversely affect the quality and marketability 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
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
invest pursuant to its investment objective and policies but which are
subject to restrictions on resale under federal securities law. However, the
Trust will limit investments in illiquid securities, including certain
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 and possibly certain other restricted
securities which meet the criteria for liquidity established by the Trustees
of the Trust are quite liquid. The Trust intends, therefore, to treat the
restricted securities which meet the criteria for liquidity established by
the Trustees, including Section 4(2) commercial paper, as determined by the
Trust's investment adviser, as liquid and not subject to the investment
limitation 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. These investment
limitations cannot be changed without shareholder approval.
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 .40% of the Trust's average daily net assets. The adviser has undertaken
to reimburse the Trust up to the amount of the advisory fee for operating
expenses in excess of limitations established by certain states. In
addition, under the investment advisory contract, the advisor will waive the
amount, limited to the amount of the advisory fee, by which the Trust's
aggregate annual operating expenses, including the investment advisory fee
but excluding interest, taxes, brokerage commissions, expenses of
registering and qualifying the Trust and its shares under federal and state
laws and regulations, expenses of withholding taxes, and extraordinary
expenses, exceed .45% of its average daily net assets.
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 $80 billion invested across more
than 250 funds under management and/or administration by its subsidiaries,
as of December 31, 1995, Federated Investors is one of the largest mutual
fund investment managers in the United States. With more than 1,800
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 interests. 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 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.
SHAREHOLDER SERVICES. The Trust has entered into a Shareholder Services
Agreement with Federated Shareholder Services, a subsidiary of Federated
Investors, under which the Trust may make payments up to .25% of 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 Services Company, a subsidiary of
Federated Investors, provides administrative personnel and services
(including certain legal and financial reporting services) necessary to
operate the Trust at an annual rate as which relates to the average
aggregate daily net assets of all funds advised by affiliates of Federated
Investors specified below:
<TABLE>
<CAPTION>
MAXIMUM AVERAGE AGGREGATE
ADMINISTRATIVE FEE DAILY NET ASSETS
<C> <S>
.15% on the first $250 million
.125% on the next $250 million
.10% on the next $250 million
.075% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares
Federated Services Company may choose voluntarily to waive a portion of its
fee.
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) on 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.
HOW TO PURCHASE SHARES
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 is open for business. Shares may be purchased either by wire or by
check. 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. 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.
PURCHASING SHARES BY WIRE. Shares may be purchased by Federal Reserve wire
by calling 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 Shareholder 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. Shares cannot be purchased by
wire on holidays when wire transfers are restricted. Questions on wire
purchases should be directed to your shareholder services representative at
the telephone number listed on your account statement.
PURCHASING SHARES BY CHECK. Shares may be purchased by sending a check to
Federated Shareholder Services Company, P.O. Box 8600, Boston, MA
02266-8600. The check should be made payable to Money Market Trust. Orders
by mail are considered received when payment by check is converted into
federal funds (normally the business day after the check is received), and
shares begin earning dividends the next day.
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.
SUBACCOUNTING SERVICES. Financial institutions are encouraged to open single
master accounts. A subaccounting system is available through the transfer
agent to minimize 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. State securities
laws may require certain financial institutions such as depository
institutions to register as dealers.
HOW TO REDEEM SHARES
Shares are redeemed at their net asset value next determined after Federated
Shareholder 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.
REDEEMING SHARES BY TELEPHONE. Redemptions in any amount may be made by
calling the Trust provided the Trust has a properly completed authorization
form. These forms can be obtained from Federated Securities Corp. Proceeds
from redemption requests received before 3:00 p.m. (Eastern time) will be
wired the same day to the shareholder's account at a domestic commercial
bank which is a member of the Federal Reserve System, but will not include
that day's dividend. Proceeds from redemption requests received after that
time include that day's dividend but will be wired the following business
day. Proceeds from redemption requests on holidays when wire transfers are
restricted will be wired the following business day. Questions about
telephone redemptions on days when wire transfers are restricted should be
directed to your shareholder services representative at the telephone number
listed on your account statement.
Telephone instructions may be recorded and if reasonable procedures are not
followed by the Trust, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.
In the event of drastic economic or market changes, a shareholder may
experience difficulty in redeeming by telephone. If this occurs, "Redeeming
Shares By Mail" should be considered. If at any time the Trust shall
determine it necessary to terminate or modify the telephone redemption
privilege, shareholders would be promptly notified.
REDEEMING SHARES BY MAIL. Shares may be redeemed in any amount by mailing a
written request to: Federated Shareholder Services Company, P.O. Box 8600,
Boston, MA 02266-8600. If share certificates have been issued, they should
be sent unendorsed with the written request by registered or certified mail
to the address noted above.
The written request should state: the Trust name; the account name as
registered with the Trust; the account number; and the number of shares to
be redeemed or the dollar amount requested. All owners of the account must
sign the request exactly as the shares are registered. Normally, a check for
the proceeds is mailed within one business day, but in no event more than
seven days, after the receipt of a proper written redemption request.
Dividends are paid up to and including the day that a redemption request is
processed.
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
commercial or savings bank, trust company or savings association whose
deposits are insured by an organization which is administered by the Federal
Deposit Insurance Corporation; a member firm of a domestic stock exchange;
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.
ACCOUNT AND SHARE INFORMATION
DIVIDENDS. Dividends are declared daily and paid monthly. Dividends are
automatically reinvested on payment dates in additional shares of the Trust
unless cash payments are requested by writing to the Trust. 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.
CERTIFICATES AND CONFIRMATIONS. As transfer agent for the Trust, Federated
Shareholder Services Company maintains a share account for each shareholder.
Share certificates are not issued unless requested by contacting the Trust
or Federated Shareholder Services Company in writing. Monthly confirmations
are sent to report all transactions as well as dividends paid during the
month.
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.
VOTING RIGHTS. Each share of the Trust owned by a shareholder gives that
shareholder one vote in Trustee elections and other matters submitted to
shareholders for vote. 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 election of Trustees under certain
circumstances.
Trustees may be removed by the Trustees or by shareholders at a special
meeting. A special meeting shall be called by the Trustees upon the written
request of shareholders owning at least 10% of the outstanding shares of the
Trust.
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.
STATE AND LOCAL TAXES
In the opinion of Houston, Houston, & Donnelly, counsel to the Trust, Trust
shares may be subject to personal property taxes imposed by counties,
municipalities, and school districts in Pennsylvania to the extent that the
portfolio securities in the Trust would be subject to such taxes if owned
directly by residents of those jurisdictions.
Shareholders are urged to consult their own tax advisers regarding the
status of their accounts under state and local tax laws.
PERFORMANCE INFORMATION
From time to time, the Trust advertises its total return, 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.
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, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
BANK NOTES -- 1.0%
BANKING -- 1.0%
$ 2,000,000 Commercial Bank, Detroit, MI, 5.700%, 9/3/1996 $ 1,999,976
3,000,000 Mellon Bank NA, Pittsburgh, PA, 5.750% - 5.780%, 9/26/1996 - 10/16/1996 2,999,883
TOTAL BANK NOTES 4,999,859
CERTIFICATE OF DEPOSIT -- 1.9%
BANKING -- 1.9%
10,000,000 Mellon Bank NA, Pittsburgh, PA, 5.680% - 5.750%, 12/10/1996 - 1/28/1997 10,000,000
(A)COMMERCIAL PAPER -- 36.1%
FINANCE - COMMERCIAL -- 17.3%
19,000,000 Asset Securitization Cooperative Corp., 5.445% - 5.494%,
9/19/1996 - 10/16/1996 18,833,939
2,000,000 CIESCO, Inc., 5.476%, 9/19/1996 1,985,300
21,000,000 Corporate Asset Funding Co., Inc. (CAFCO), 5.359% - 5.783%,
8/2/1996 - 1/15/1997 20,854,671
15,000,000 (b)Falcon Asset Securitization Corp., 5.435% - 5.750%,
10/29/1996 - 1/22/1997 14,634,752
20,000,000 General Electric Capital Corp., 5.453% - 5.768%, 11/8/1996 - 1/13/1997 19,610,659
13,000,000 Preferred Receivables Funding Co., (PREFCO), 4.972% - 5.731%,
8/14/1996 - 1/23/1997 12,850,203
Total 88,769,524
FINANCE - RETAIL -- 9.1%
24,000,000 Associates Corp. of North America, 5.321% - 5.691%,
8/1/1996 - 9/24/1996 23,969,010
18,000,000 New Center Asset Trust, A1+/P1 Series, 5.412% - 5.525%,
9/23/1996 - 11/15/1996 17,795,878
5,000,000 Norwest Financial, Inc., 5.314%, 9/17/1996 4,966,578
Total 46,731,466
</TABLE>
MONEY MARKET TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)COMMERCIAL PAPER -- CONTINUED
INSURANCE -- 1.1%
$ 5,900,000 Marsh & McLennan Cos., Inc., 5.797%, 1/10/1997 $ 5,750,524
OIL & OIL FINANCE -- 7.6%
16,000,000 Chevron Transport Corp., (Guaranteed by Chevron Corp.),
5.435% - 5.476%, 9/11/1996 - 10/15/1996 15,860,561
23,000,000 Koch Industries, Inc., 5.681%, 8/1/1996 23,000,000
Total 38,860,561
TELECOMMUNICATIONS -- 1.0%
5,000,000 Ameritech Capital Funding Corp., (Guaranteed by Ameritech Corp.),
5.671%, 12/2/1996 4,905,188
TOTAL COMMERCIAL PAPER 185,017,263
CORPORATE NOTES -- 2.1%
FINANCE - EQUIPMENT -- 0.9%
4,459,897 Case Equipment Loan Trust 1996-A, 5.000%, 2/15/1997 4,458,926
FOOD & BEVERAGE --1.2%
2,000,000 PepsiCo, Inc., 5.750%, 9/6/1996 1,999,851
4,000,000 PepsiCo, Inc., 5.830%, 8/27/1996 4,000,169
Total 6,000,020
TOTAL CORPORATE NOTES 10,458,946
(C)VARIABLE RATE OBLIGATIONS -- 30.5%
BANKING -- 18.4%
10,000,000 Bank One, Columbus, N.A., 5.380%, 8/1/1996 9,991,215
20,000,000 Beverly Hills Nursing Center, Inc., Medilodge Project Series 1996,
(KeyBank, N.A. LOC), 5.630%, 8/8/1996 20,000,000
21,235,000 Kenny, Donald R. and Cheryl A., (Huntington National Bank,
Columbus, OH LOC), 5.580%, 8/8/1996 21,235,000
4,900,000 Melberger, Clifford K. and Ruth B., (PNC Bank, N.A. LOC), 5.559%,
8/5/1996 4,900,000
6,200,000 Scranton Times, L.P., (PNC Bank, N.A. LOC), 5.559%, 8/5/1996 6,200,000
6,300,000 Shamrock Communications, (PNC Bank, N.A. LOC), 5.559%, 8/5/1996 6,300,000
5,000,000 (b)SMM Trust, (Series 1995-B), (Morgan Guaranty Trust Co., New York
Swap Agreement), 5.465%, 8/2/1996 5,000,000
</TABLE>
MONEY MARKET TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(C)VARIABLE RATE OBLIGATIONS -- CONTINUED
BANKING -- CONTINUED
$ 5,000,000 (b)SMM Trust, (Series 1995-N), (Morgan Guaranty Trust Co., New York
Swap Agreement), 5.530%, 8/15/1996 $ 5,000,218
7,000,000 (b)SMM Trust, Series 1996-I, (Morgan Guaranty Trust Co., New York
Swap Agreement), 5.500%, 9/1/1996 7,000,000
3,000,000 (b)SMM Trust, Series 1996-L, (Morgan Guaranty Trust Co., New York
Swap Agreement), 5.465%, 8/15/1996 3,000,000
5,990,000 Westminster Village Terre Haute, Inc., (Huntington National Bank,
Columbus, OH LOC), 5.580%, 8/8/1996 5,990,000
Total 94,616,433
ELECTRICAL EQUIPMENT -- 4.2%
4,382,651 Marta Leasing Ltd., (Guaranteed by General Electric Co.), 5.559%,
8/5/1996 4,382,651
17,422,897 Northwest Airlines, Inc., (Guaranteed by General Electric Co.), 5.585%,
8/5/1996 17,422,897
Total 21,805,548
FINANCE - RETAIL -- 3.9%
20,000,000 Carco Auto Loan Master Trust Series 1993-2, Class A1, 5.550%,
8/15/1996 20,000,000
INSURANCE -- 3.9%
20,000,000 (b)Peoples Security Life Insurance, 5.730%, 9/1/1996 20,000,000
TOTAL VARIABLE RATE OBLIGATIONS 156,421,981
U.S. TREASURY -- 4.9%
U.S. TREASURY NOTES -- 4.9%
25,000,000 7.500%, 1/31/1997 25,284,809
(D)REPURCHASE AGREEMENTS -- 23.5%
24,000,000 BA Securities, Inc., 5.680%, dated 7/31/1996, due 8/1/1996 24,000,000
49,700,000 Goldman Sachs & Company, 5.750%, dated 7/31/1996, due 8/1/1996 49,700,000
24,000,000 PaineWebber, Inc., 5.670%, dated 7/31/1996, due 8/1/1996 24,000,000
23,000,000 UBS Securities, Inc., 5.650%, dated 7/31/1996, due 8/1/1996 23,000,000
TOTAL REPURCHASE AGREEMENTS 120,700,000
TOTAL INVESTMENTS, AT AMORTIZED COST(E) $ 512,882,858
</TABLE>
(a) Each issue shows the rate of discount at the time of purchase for
discount issues, or the coupon for interest bearing issues.
(b) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At July 31, 1996, these securities amounted
to $54,634,970 which represents 10.64% of net assets.
(c) Current rate and next reset date shown.
(d) 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.
(e) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($513,687,208) at July 31, 1996.
The following acronyms are used throughout this portfolio:
LOC -- Letter of Credit
LP -- Limited Partnership
(See Notes which are an integral part of the Financial Statements)
MONEY MARKET TRUST
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1996
<TABLE>
<S> <C> <C>
ASSETS:
Investment in repurchase agreements $120,700,000
Investments in other securities 392,182,858
Total investments in securities, at amortized cost $ 512,882,858
Income receivable 1,396,302
Receivable for shares sold 3,432,097
Total assets 517,711,257
LIABILITIES:
Payable for shares redeemed $ 2,103,245
Income distribution payable 1,708,218
Payable to Bank 131,938
Accrued expenses 80,648
Total liabilities 4,024,049
NET ASSETS for 513,687,208 shares outstanding $ 513,687,208
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
($513,687,208 O 513,687,208 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, 1996
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $27,315,673
EXPENSES:
Investment advisory fee $ 1,925,061
Administrative personnel and services fee 364,005
Custodian fees 92,691
Transfer and dividend disbursing agent fees and expenses 53,735
Directors'/Trustees' fees 14,018
Auditing fees 13,050
Legal fees 8,752
Portfolio accounting fees 84,953
Shareholder services fee 1,203,163
Share registration costs 21,042
Printing and postage 11,175
Insurance premiums 19,798
Taxes 13,978
Miscellaneous 4,052
Total expenses 3,829,473
Waivers --
Waiver of investment advisory fee $(666,410)
Waiver of shareholder services fee (962,531)
Total waivers (1,628,941)
Net expenses 2,200,532
Net investment income $25,115,141
</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,
1996 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 25,115,141 $ 29,417,799
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment income (25,115,141) (29,417,799)
SHARE TRANSACTIONS--
Proceeds from sale of shares 2,528,203,824 2,689,667,535
Net asset value of shares issued to shareholders in payment of
distributions declared 4,299,023 4,510,492
Cost of shares redeemed (2,526,087,334) (2,726,889,637)
Change in net assets resulting from share transactions 6,415,513 (32,711,610)
Change in net assets 6,415,513 (32,711,610)
NET ASSETS:
Beginning of period 507,271,695 539,983,305
End of period $ 513,687,208 $ 507,271,695
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MONEY MARKET TRUST
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1996
1. ORGANIZATION
Money Market Trust (the "Trust") is registered under the Investment Company
Act of 1940, as amended (the "Act"), as a diversified, open-end management
investment company. The investment objective of the Trust is stability of
principal and current income consistent with stability of principal
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
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. Many restricted securities may be resold in
the secondary market in transactions exempt from registration. In some
cases, the restricted securities may be resold without registration upon
exercise of a demand feature. 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, 1996 is
as follows:
<TABLE>
<CAPTION>
SECURITY ACQUISITION DATE ACQUISITION COST
<S> <S> <C>
Peoples Security Life Insurance 7/8/96 $20,000,000
SMM Trust Series 1995-B 8/4/95 $ 5,000,000
SMM Trust Series 1995-N 1/31/96 $ 5,000,000
SMM Trust Series 1996-I 5/23/96 $ 7,000,000
SMM Trust Series 1996-L 6/12/96 $ 3,000,000
Falcon Asset Securitization Corp. 4/30/96-7/24/96 $14,634,752
</TABLE>
USE OF ESTIMATES -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
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, 1996, capital paid-in aggregated $513,687,208. Transactions in
shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
1996 1995
<S> <C> <C>
Shares sold 2,528,203,824 2,689,667,535
Shares issued to shareholders in payment of distributions declared 4,299,023 4,510,492
Shares redeemed (2,526,087,334) (2,726,889,637)
Net change resulting from share transactions 6,415,513 (32,711,610)
</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 0.40% of the Trust's average daily net assets. The
Adviser will waiver, 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 0.45% of average daily
net assets of the Trust.
ADMINISTRATIVE FEE -- Federated Services Company ("FServ"), under the
Administrative Services Agreement, provides the Trust with administrative
personnel and services. The fee paid to FServ is based on the level of
average aggregate daily net assets of all funds advised by subsidiaries of
Federated Investors for the period. The administrative fee received during
the period of the Administrative Services Agreement shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE -- Under the terms of a Shareholder Services
Agreement with Federated Shareholder Services, ("FSS") the Trust will pay
Federated Shareholder Services up to 0.25% of daily average net assets of
the Trust for the period. The fee paid to FSS is used to finance certain
services for shareholders and to maintain shareholder accounts. FSS may
voluntarily choose to waive any portion of its fee. Federated Shareholder
Services can modify or terminate this voluntary waiver at any time at its
sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES -- FServ, through
its subsidiary, Federated Shareholder Services Company ("FSSC") serves as
transfer and dividend disbursing agent for the Trust. The fee paid to FSSC
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,
1996, the related statement of operations for the year then ended, the
statements of changes in net assets for the years ended July 31, 1996 and
1995, and the financial highlights for the periods presented. These
financial statements and financial highlights are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of the
securities owned at July 31, 1996 by correspondence with the custodian and
brokers; where replies were not received from brokers, we performed other
auditing procedures. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Money Market
Trust as of July 31, 1996, 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
August 30, 1996
ADDRESSES
Money Market Trust Federated Investors Tower
Pittsburgh, PA 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 P.O. Box 8600
Trust Company Boston, MA 02105-8600
Transfer Agent and Dividend Disbursing Agent
Federated Shareholder P.O. Box 8600
Services Company Boston, MA 02266-8600
Independent Auditors
Deloitte & Touche LLP 2500 One PPG Place
Pittsburgh, PA 15222-5401
MONEY MARKET TRUST
PROSPECTUS
An Open-End, Management
Investment Company
Prospectus dated September 30, 1996
[Graphic]
Federated Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the fund
and is a subsidiary of Federated Investors.
[Graphic]
Cusip 609900105
8083102A (9/96)
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,
1996. This Statement is not a prospectus. You may request a copy of a
prospectus or a paper copy of this Statement, if you have received it
electronically, free of charge by calling 1-800-341-7400.
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Statement dated September 30, 1996.
Federated Securities Corp. is the distributor of the Funds
and is a subsidiary of Federated Investors.
Cusip 609900105
8083102B (9/96)
TABLE OF CONTENTS
INVESTMENT POLICIES 1
Acceptable Investments 1
U.S. Government Securities 1
Bank Instruments 1
Ratings 1
When-Issued and Delayed Delivery
Transactions 1
Repurchase Agreements 1
Credit Enhancement 2
Investment Risks 2
INVESTMENT LIMITATIONS 2
Regulatory Compliance 3
MONEY MARKET TRUST MANAGEMENT 4
Share Ownership 8
Trustees' Compensation 9
Trustee Liability 9
INVESTMENT ADVISORY SERVICES 9
Investment Adviser 9
Advisory Fees 10
BROKERAGE TRANSACTIONS 10
OTHER SERVICES 10
Trust Administration 10
Custodian and Portfolio Accountant 11
Transfer Agent 11
Independent Auditors 11
SHAREHOLDER SERVICES AGREEMENT 11
DETERMINING NET ASSET VALUE 11
REDEMPTION IN KIND 12
MASSACHUSETTS PARTNERSHIP LAW 12
THE TRUST'S TAX STATUS 12
PERFORMANCE INFORMATION 12
Yield 12
Effective Yield 12
Total Return 12
Performance Comparisons 13
Economic and Market Information 13
ABOUT FEDERATED INVESTORS 13
INVESTMENT POLICIES
Unless indicated otherwise, the policies described below may not be changed
by the Board of Trustees without shareholder approval.
ACCEPTABLE INVESTMENTS
When determining whether a security presents minimal credit risks, the
investment adviser will consider the creditworthiness of: the issuer of the
security; the issuer of any demand feature applicable to the security; or
any guarantor of either the security or any demand feature.
U.S. GOVERNMENT SECURITIES
The types of U.S. government securities in which the Trust may invest
generally include direct obligations of the U.S. Treasury (such as U.S.
Treasury bills, notes, and bonds) and obligations issued or guaranteed by
U.S. government agencies or instrumentalities. These securities are backed
by:
othe full faith and credit of the U.S. Treasury;
othe issuer's right to borrow from the U.S. Treasury;
othe discretionary authority of the U.S. government to purchase
certain obligations of agencies or instrumentalities; or
othe credit of the agency or instrumentality issuing the obligations.
BANK INSTRUMENTS
The instruments of banks and savings associations 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. In addition to domestic bank
instruments, the Trust may invest in: Eurodollar Certificates of Deposit
issued by foreign branches of U.S. or foreign banks; Eurodollar Time
Deposits, which are U.S. dollar-denominated deposits in foreign branches of
U.S. or foreign banks; Canadian Time Deposits, which are U.S. dollar-
denominated deposits issued by branches of major Canadian banks located in
the United States; and Yankee Certificates of Deposit, which are U.S.
dollar-denominated certificates of deposit issued by U.S. branches of
foreign banks and held in the United States.
RATINGS
The securities in which the the Trust invests must be rated in the highest
short-term rating category by one or more nationally recognized statistical
rating organizations (`NRSROs'') or be of comparable quality to securities
having such 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.''
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 in a dollar amount sufficient to make payment for the securities to
be purchased are: segregated on the Trust`s records at the trade date;
marked to market daily; and maintained until the transaction is settled.
The Trust does not intend to engage in when-issued and delayed delivery
transactions to an extent that would cause the segregation of more than 20%
of the total value of its assets.
REPURCHASE AGREEMENTS
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.
CREDIT ENHANCEMENT
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 being issued by the credit enhancer for diversification
purposes. However, under certain circumstances applicable regulations may
require the Trust to treat securities as having been issued by both the
issuer and the credit enhancer.
INVESTMENT RISKS
ECDs, ETDs, Yankee CDs, Canadian Commercial Paper, and Europaper are
subject to different risks than domestic obligations of domestic banks or
corporations. Examples of these risks include international economic and
political developments, foreign governmental restrictions that may
adversely affect the payment of principal or interest, foreign withholding
or other taxes on interest income, difficulties in obtaining or enforcing a
judgment against the issuing entity, and the possible impact of
interruptions in the flow of international currency transactions. Risks may
also exist for ECDs, ETDs, and Yankee CDs because the banks issuing these
instruments, or their domestic or foreign branches, are not necessarily
subject to the same regulatory requirements that apply to domestic banks,
such as reserve requirements, loan limitations, examinations, accounting,
auditing, recordkeeping, and the public availability of information. These
factors will be carefully considered by the Trust's adviser in selecting
investments for the Trust.
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.
REGULATORY COMPLIANCE
The Trust may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in
the prospectus and this 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. In particular,
the Trust will comply with the various requirements of Rule 2a-7, which
regulates money market mutual funds. For example, the Trust will 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.
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. and Federated Global Research Corp.; Chairman, Passport
Research, Ltd.; Chief Executive Officer and Director or Trustee of the
Funds. .
Thomas G. Bigley
28th Floor, One Oxford Centre
Pittsburgh, PA
Birthdate: February 3, 1934
Trustee
Chairman of the Board, Children's Hospital of Pittsburgh; formerly, Senior
Partner, Ernst & Young LLP; Director, MED 3000 Group, Inc.; Trustee,
University of Pittsburgh; Director or Trustee of the Funds.
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; Partner or Trustee in private real
estate ventures in Southwest Florida; formerly, President, Naples Property
Management, Inc. and Northgate Village Development Corporation; Director or
Trustee of the Funds.
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.;
formerly, Vice Chairman and Director, PNC Bank, N.A., and PNC Bank Corp.;
Director, Ryan Homes, Inc.; Director or Trustee of the Funds.
James E. Dowd
571 Hayward Mill Road
Concord, MA
Birthdate: May 18, 1922
Trustee
Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Trustee of the
Funds.
Lawrence D. Ellis, M.D.*
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA
Birthdate: October 11, 1932
Trustee
Professor of Medicine, 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
or Trustee of the Funds.
Edward L. Flaherty, Jr.@
Miller, Ament, Henny, & Kochuba
205 Ross Street
Pittsburgh, PA
Birthdate: June 18, 1924
Trustee
Attorney of Counsel, Miller, Ament, Henny & Kochuba; Director, Eat'N Park
Restaurants, Inc.; formerly, Counsel, Horizon Financial, F.A., Western
Region; Director or Trustee of the Funds.
Peter E. Madden
Seacliff
562 Bellevue Avenue
Newport, RI
Birthdate: March 16, 1942
Trustee
Consultant; Former State Representative, Commonwealth of Massachusetts;
formerly, President, State Street Bank and Trust Company and State Street
Boston Corporation; Director or Trustee of the Funds.
Gregor F. Meyer
Miller, Ament, Henny, & Kochuba
205 Ross Street
Pittsburgh, PA
Birthdate: October 6, 1926
Trustee
Attorney, Member of Miller, Ament, Henny & Kochuba; Chairman, Meritcare,
Inc.; Director, Eat'N Park Restaurants, Inc.; Director or Trustee 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 or Trustee of the Funds.
Wesley W. Posvar
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA
Birthdate: September 14, 1925
Trustee
Professor, International Politics; Management Consultant; Trustee, Carnegie
Endowment for International Peace, RAND Corporation, Online Computer
Library Center, Inc., National Defense University, U.S. Space Foundation
and Czech Management Center; President Emeritus, University of Pittsburgh;
Founding Chairman, National Advisory Council for Environmental Policy and
Technology, Federal Emergency Management Advisory Board and Czech
Management Center; Director or Trustee of the Funds.
Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA
Birthdate: June 21, 1935
Trustee
Public relations/Marketing/Conference Planning, Manchester Craftsmen's
Guild; Restaurant Consultant, Frick Art & History Center; Conference
Coordinator, University of Pittsburgh Art History Department; Director or
Trustee 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.
J. Christopher Donahue
Federated Investors Tower
Pittsburgh, PA
Birthdate: April 11, 1949
Executive Vice President
President and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; President and Director, Federated
Research Corp. and Federated Global Research Corp.; President, Passport
Research, Ltd.; Trustee, Federated Shareholder Services Company, and
Federated Shareholder Services; Director, Federated Services Company;
President or Executive Vice President of the Funds; Director or Trustee of
some of the Funds. Mr. Donahue is the son of John F. Donahue, Chairman and
Trustee of the Company.
Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
Executive Vice President
Vice Chairman, Treasurer, and Trustee, Federated Investors; Vice President,
Federated Advisers, Federated Management, Federated Research, Federated
Research Corp., Federated Global Research Corp. and Passport Research,
Ltd.; Executive Vice President and Director, Federated Securities Corp.;
Trustee, Federated Shareholder Services Company; Trustee or Director of
some of the Funds; President, Executive Vice President and Treasurer of
some of the Funds.
John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 26, 1938
Executive Vice President , Secretary and Treasurer
Executive Vice President, Secretary, and Trustee, Federated Investors;
Trustee, Federated Advisers, Federated Management, and Federated Research;
Director, Federated Research Corp. and Federated Global Research Corp.;
Trustee, Federated Shareholder Services Company; Director, Federated
Services Company; President and Trustee, Federated Shareholder Services;
Director, Federated Securities Corp.; Executive Vice President and
Secretary of the Funds; Treasurer of some of the Funds.
Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 17, 1923
Vice President
Executive Vice President and Trustee, Federated Investors; Chairman and
Director, Federated Securities Corp.; President or Vice President of some
of the Funds; Director or Trustee of some of the Funds.
*This Trustee is deemed to be an ``interested person'' as defined in
the Investment Company Act of 1940.
@Member of the Executive Committee. The Executive Committee of the
Board of Trustees handles the responsibilities of the Board between
meetings of the Board.
As referred to in the list of Trustees and Officers, `Funds'' includes the
following investment companies:
111 Corcoran Funds; Annuity Management Series; Arrow Funds; Automated
Government Money Trust; Blanchard Funds; Blanchard Precious Metals Fund,
Inc.; Cash Trust Series II; Cash Trust Series, Inc. ; DG Investor Series;
Edward D. Jones & Co. Daily Passport Cash Trust; Federated Adjustable Rate
U.S. Government Fund, Inc.; Federated American Leaders Fund, Inc.;
Federated ARMs Fund; Federated Equity Funds; Federated Equity Income Fund,
Inc.; Federated Fund for U.S. Government Securities, Inc.; Federated GNMA
Trust; Federated Government Income Securities, Inc.; Federated Government
Trust; Federated High Income Bond Fund, Inc.; Federated High Yield Trust;
Federated Income Securities Trust; Federated Income Trust; Federated Index
Trust; Federated Institutional Trust; Federated Insurance Series; Federated
Master Trust; Federated Municipal Opportunities Fund, Inc.; Federated
Municipal Securities Fund, Inc.; Federated Municipal Trust; Federated
Short-Term Municipal Trust; Federated Short-Term U.S. Government Trust;
Federated Stock and Bond Fund, Inc.; Federated Stock Trust; Federated Tax-
Free Trust; Federated Total Return Series, Inc.; Federated U.S. Government
Bond Fund; Federated U.S. Government Securities Fund: 1-3 Years; Federated
U.S. Government Securities Fund: 2-5 Years; Federated U.S. Government
Securities Fund: 5-10 Years; Federated Utility Fund, Inc.; First Priority
Funds; Fixed Income Securities, Inc.; Fortress Utility Fund, Inc.; High
Yield Cash Trust; Intermediate Municipal Trust; International Series, Inc.;
Investment Series Funds, Inc.; Investment Series Trust; Liberty Term
Trust, Inc. - 1999; Liberty U.S. Government Money Market Trust; Liquid Cash
Trust; Managed Series Trust; Money Market Management, Inc.; Money Market
Obligations Trust; Money Market Trust; Municipal Securities Income Trust;
Newpoint Funds; Peachtree Funds; RIMCO Monument Funds; Targeted Duration
Trust; Tax-Free Instruments Trust; The Planters Funds; The Starburst Funds;
The Starburst Funds II; The Virtus Funds; Trust for Financial Institutions;
Trust for Government Cash Reserves; Trust for Short-Term U.S. Government
Securities; Trust for U.S. Treasury Obligations; and World Investment
Series, Inc.
SHARE OWNERSHIP
Officers and Trustees as a group own less than 1% of the Trust`s
outstanding shares. [If this group owns 1% or more, you must disclose the
total shares owned and the actual percentage of the outstanding shares
represented by that ownership as a group.]
As of September 3, 1996, the following shareholders of record owned 5% or
more of the outstanding shares of the Trust: Fiduciary Trust Company
International, New York, NY, owned approximately 68,200,800 shares
(13.53%); and The Brotherhood Bank & Trust Company, Kansas City, KS, owned
approximately 30,726,008 shares (6.10%).
TRUSTEES' COMPENSATION
AGGREGATE
NAME , COMPENSATION
POSITION WITH FROM
TRUST TRUST*#
John F. Donahue, $ 0 $-0- for the Trust and
Chairman and Trustee 54 other investment companies in
the Fund Complex
Thomas G. Bigley++ $ 1,490.01 $86,331 for the Trust and
Trustee 54 other investment companies in the Fund
Complex
John T. Conroy $ 1,619.63 $115,760 for the Trust and
Trustee 54 other investment companies in the Fund
Complex
William J. Copeland $ 1,619.63 $115,760 for the Trust and
Trustee 54 other investment companies in the Fund
Complex
James E. Dowd $ 1,619.63 $115,760 for the Trust and
Trustee 54 other investment companies in the Fund
Complex
Lawrence D. Ellis, M.D. $ 1,490.01 $104,898 for the Trust and
Trustee 54 other investment companies in the Fund
Complex
Edward L. Flaherty, Jr. $ 1,619.63 $115,760 for the Trust and
Trustee 54 other investment companies in the Fund
Complex
Peter E. Madden $ 1,490.01 $104,898 for the Trust and
Trustee 54 other investment companies in the Fund
Complex
Gregor F. Meyer $ 1,490.01 $104,898 for the Trust and
Trustee 54 other investment companies in the Fund
Complex
John E. Murray, Jr. $ 1,490.01 $104,898 for the Trust and
Trustee 54 other investment companies in the Fund
Complex
Wesley W. Posvar $ 1,490.01 $104,898 for the Trust and
Trustee 54 other investment companies in the Fund
Complex
Marjorie P. Smuts$ 1,490.01 $104,898 for the Trust and
Trustee 54 other investment companies in the Fund
Complex
*Information is furnished for the fiscal year ended July 31, 1996.
#The aggregate compensation is provided for the Trust.
++Mr. Bigley served on 39 investment companies in the Federated Funds
Complex from January 1 through
September 30, 1995. On October, 1995, he was appointed a Trustee on 15
additional Federated Funds.
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 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, 1996, 1995, and 1994, the adviser earned $1,925,061, $2,213,807,
and $2,520,096, respectively, of which $666,410, $803,723, and $727,018,
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 Trust for its expenses over the limitation.
If the Trust's monthly projected operating expenses exceed this
limitation, the investment advisory fee paid will be reduced by the
amount of the excess, subject to an annual adjustment. If the expense
limitation is exceeded, the amount to be reimbursed by the adviser
will be limited, in any single fiscal year, by the amount of the
investment advisory fees.
This arrangement is not part of the advisory contract and may be
amended or rescinded in the future.
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
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.
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.
OTHER SERVICES
TRUST ADMINISTRATION
Federated Services Company, a subsidiary of Federated Investors, provides
administrative personnel and services to the Trust for a fee as described
in the prospectus. From March 1, 1994 to March 1, 1996, Federated
Administrative Services served as the Trust's Administrator. Prior to March
1, 1994, Federated Services Company served as the Trust's Administrator.
Both former Administrators are subsidiaries of Federated Investors. For
purposes of this Statement of Additional Information, Federated Services
Company, Federated Administrative Services and Federated Administrative
Services, Inc. may hereinafter collectively be referred to as the
`Administrators.'' For the fiscal years ended July 31, 1996, 1995 and
1994, the Administrators earned $364,005, $418,963, and $516,405,
respectively.
CUSTODIAN AND PORTFOLIO ACCOUNTANT
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. The fee paid for this service is based
upon the level of the Trust's average net assets for the period plus out-
of-pocket expenses.
TRANSFER AGENT
Federated Services Company, through its registered transfer agent,
Federated Shareholder Services Company, maintains all necessary shareholder
records. For its services, the transfer agent receives a fee based on the
number of shareholder accounts.
INDEPENDENT AUDITORS
The independent auditors for the Trust are Deloitte & Touche LLP,
Pittsburgh, PA.
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, 1996, the Trust
incurred shareholder service fees in the amount of $1,203,163, $962,531 of
which was paid to financial institutions.
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.
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.
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, 1996, was 5.04%.
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, 1996, was 5.17%.
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, 1996, were 5.31%, 4.28% and 5.86%, 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
offering price. The financial publications and/or indices which the Trust
uses in advertising may include:
OLIPPER 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.
oDONOGHUE'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.
oMONEY, a monthly magazine, regularly ranks money market funds in
various categories based on the latest available seven-day effective
yield.
oSALOMON 30-DAY CD INDEX compares rate levels of 30-day certificates
of deposit from the top ten prime representative banks.
Advertisements and other sales literature for the Trust may quote total
returns which are calculated on nonstandardized base periods. These total
returns represent the historic change in the value of an investment in the
Trust based on monthly reinvestment of dividends over a specific period of
time.
Advertising and other promotional literature may include charts, graphs and
other illustrations using the Trust's returns, or returns in general, that
demonstrate basic investment concepts such as tax-deferred compounding,
dollar-cost averaging and systematic investment. In addition, the Trust
can compare its performance, or performance for the types of securities in
which it invests, to a variety of other investments, such as bank savings
accounts, certificates of deposit, and Treasury bills.
ECONOMIC AND MARKET INFORMATION
Advertising and sales literature for the Trust may include discussions of
economic, financial and political developments and their effect on the
securities market. Such discussions may take the form of commentary on
these developments by Trust portfolio managers and their views and analysis
on how such developments could affect the Funds. In addition, advertising
and sales literature may quote statistics and give general information
about the mutual fund industry, including the growth of the industry, from
sources such as the Investment Company Institute.
ABOUT FEDERATED INVESTORS
Federated Investors 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. These traders
handle trillions of dollars in annual trading volume.
In the money market sector, Federated Investors 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, 1995, Federated Investors managed
more than $40.2 billion in assets across approximately 47 money market
funds, including 17 government, 10 prime and 20 municipal with assets
approximating $20.9 billion, $11.5 billion and $7.8 billion, respectively.
J. Thomas Madden, Executive Vice President, oversees Federated Investors'
equity and high yield corporate bond management while William D. Dawson,
Executive Vice President, oversees Federated Investors' domestic fixed
income management. Henry A. Frantzen, Executive Vice President, oversees
the management of Federated Investors' 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 $3 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 CLIENTS
Federated Investors 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 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. Federated's service to
financial professionals and institutions has earned it high ranking in
several DALBAR Surveys. The marketing effort to these firms is headed by
James F. Getz, President, Broker/Dealer Division.
*Source: Investment Company Institute
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; +
(ii) Copy of Amendment to By-Laws of Registrant; +
(3) Not applicable;
(4) Copy of Specimen Certificate for Shares of Beneficial
Interest of the Registrant; +
(5) Conformed copy of Investment Advisory Contract of the
Registrant; +
(6) (i)Conformed copy of Distributor's Agreement; (13)
(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; (13)
(9) Conformed copy of Agreement for Fund Accounting,
Shareholder Recordkeeping, and Custody Services
Procurement; (13)
(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; +
(14) Not applicable;
(15) Not applicable;
(16) Schedule for Computation of Fund Performance Yield
Calculation; +
(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.
13. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 37 on Form N-1A filed September 29, 1995.
(File No. 2-62285)
Item 26. Number of Holders of Securities:
Number of Record Holders
Title of Class as of September 3, 1996
Shares of beneficial interest 2,395
(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; 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: 111 Corcoran Funds;
Annuity Management Series; Arrow Funds; Automated Government
Money Trust; BayFunds; Blanchard Funds; Blanchard Precious
Metals Fund, Inc.; Cash Trust Series II; Cash Trust Series,
Inc.; DG Investor Series; Edward D. Jones & Co. Daily
Passport Cash Trust; Federated Adjustable Rate U.S.
Government Fund, Inc.; Federated American Leaders Fund, Inc.;
Federated ARMs Fund; Federated Equity Funds; Federated Equity
Income Fund, Inc.; Federated Fund for U.S. Government
Securities, Inc.; Federated GNMA Trust; Federated Government
Income Securities, Inc.; Federated Government Trust;
Federated High Income Bond Fund, Inc.; Federated High Yield
Trust; Federated Income Securities Trust; Federated Income
Trust; Federated Index Trust; Federated Institutional Trust;
Federated Insurance Series; Federated Investment Portfolios;
Federated Investment Trust; Federated Master Trust; Federated
Municipal Opportunities Fund, Inc.; Federated Municipal
Securities Fund, Inc.; Federated Municipal Trust; Federated
Short-Term Municipal Trust; Federated Short-Term U.S.
Government Trust; Federated Stock and Bond Fund, Inc.;
Federated Stock Trust; Federated Tax-Free Trust; Federated
Total Return Series, Inc.; Federated U.S. Government Bond
Fund; Federated U.S. Government Securities Fund: 1-3 Years;
Federated U.S. Government Securities Fund: 2-5 Years;
Federated U.S. Government Securities Fund: 5-10 Years;
Federated Utility Fund, Inc.; First Priority Funds; Fixed
Income Securities, Inc.; High Yield Cash Trust; Independence
One Mutual Funds; Intermediate Municipal Trust; International
Series, Inc.; Investment Series Funds, Inc.; Investment
Series Trust; Liberty U.S. Government Money Market Trust;
Liquid Cash Trust; Managed Series Trust; Marshall Funds,
Inc.; Money Market Management, Inc.; Money Market Obligations
Trust; Money Market Trust; Municipal Securities Income Trust;
Newpoint Funds; Peachtree Funds; RIMCO Monument Funds;
SouthTrust Vulcan Funds; Star Funds; Targeted Duration Trust;
Tax-Free Instruments Trust; The Biltmore Funds; The Biltmore
Municipal Funds; The Monitor Funds; The Planters Funds; The
Starburst Funds; The Starburst Funds II; The Virtus Funds;
Tower Mutual Funds; Trust for Financial Institutions; Trust
for Government Cash Reserves; Trust for Short-Term U.S.
Government Securities; Trust for U.S. Treasury Obligations;
Vision Group of Funds, Inc.; andWorld Investment Series, Inc.
Federated Securities Corp. also acts as principal underwriter
for the following closed-end investment company: Liberty Term
Trust, Inc.- 1999.
(b)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Richard B. Fisher Director, Chairman, Chief Vice President
Federated Investors Tower Executive Officer, Chief
Pittsburgh, PA 15222-3779 Operating Officer, Asst.
Secretary, and Asst.
Treasurer, Federated
Securities Corp.
Edward C. Gonzales Director, Executive ViceExecutive Vice
Federated Investors Tower President, Federated, President
Pittsburgh, PA 15222-3779 Securities Corp.
Thomas R. Donahue Director, Assistant Secretary,
Federated Investors Tower Assistant Treasurer
Pittsburgh, PA 15222-3779 Federated Securities Corp
John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark R. Gensheimer Executive Vice President of --
Federated Investors Tower Bank/Trust, Federated
Pittsburgh, PA 15222-3779 Securities Corp.
Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard W. Boyd Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
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
John B. Bohnet Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Byron F. Bowman Vice President, Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Dale R. Browne 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
R. Leonard Corton, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Kevin J. Crenny Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Daniel T. Culbertson Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
G. Michael Cullen Vice President, --
Federated Investors Tower Federated Securites Corp.
Pittsburgh, PA 15222-3779
Laura M. Deger Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
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
John K. Goettlicher 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
James E. Hickey Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
H. Joeseph Kennedy Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Steven A. La Versa Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Mihm Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael P. O'Brien Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert D. Oehlschlager Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas A. Peters III Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Edward L. Smith Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard Suder 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
Miles J. Wallace 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
Edward J. Wojnarowski 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
Edward R. Bozek Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Charlene H. Jennings Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Denis McAuley Treasurer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Leslie K. Platt Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David M. Taylor Assistant Secretary,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(c) Not applicable.
Item 30. Location of Accounts and Records:
All accounts and records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and Rules 31a-1 through 31a-3 promulgated
thereunder are maintained at one of the following locations:
Registrant Federated Investors Tower
Federated Services Company Pittsburgh, PA 15222-3779
(`Transfer Agent and Dividend
Disbursing Agent)
Federated Administrative Services
(`Administrator'')
Federated Management
(`Advisor'')
State Street Bank and Trust Company P.O. Box 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 26th day of September, 1996.
MONEY MARKET TRUST
BY: /s/ J. Crilley Kelly
J. Crilley Kelly, Assistant Secretary
Attorney in Fact for John F. Donahue
September 26, 1996
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 26, 1996
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
John W. McGonigle* Executive Vice President, Secretary
and Treasurer
(Principal Financial and
Accounting Officer)
Thomas G. Bigley Trustee
John T. Conroy, Jr.* Trustee
William J. Copeland* Trustee
James E. Dowd* Trustee
Lawrence D. Ellis, M.D.* Trustee
Edward L. Flaherty, Jr.* Trustee
Peter E. Madden* Trustee
Gregor F. Meyer* Trustee
Wesley W. Posvar* Trustee
Marjorie P. Smuts* Trustee
* By Power of Attorney
Exhibit (11) under N-1A
Exhibit 23 under 601/Reg SK
INDEPENDENT AUDITOR'S CONSENT
To the Board of Trustees and Shareholders of
Money Market Trust
We consent to the use in Post-Effective Amendment No. 39 to
Registration Statement (No. 2-65585) of Money Market Trust of our report
dated August 30, 1996, appearing in the Prospectus, 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
Pittsburgh, Pennsylvania
September 26, 1996
EXHIBIT 17 UNDER FORM N-1A
EXHIBIT 24 UNDER ITEM 601/REG. S-K
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints the Secretary and Assistant Secretary of MONEY MARKET TRUST
and the Assistant
- ------------------------------------------------------
General Counsel of Federated Investors, and each of them, their true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution for them and in their names, place and stead, in any and all
capacities, to sign any and all documents to be filed with the Securities
and Exchange Commission pursuant to the Securities Act of 1933, the
Securities Exchange Act of 1934 and the Investment Company Act of 1940, by
means of the Securities and Exchange Commission's electronic disclosure
system known as EDGAR; and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to sign and perform each and every act and
thing requisite and necessary to be done in connection therewith, as fully
to all intents and purposes as each of them might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents,
or any of them, or their or his substitute or substitutes, may lawfully do
or cause to be done by virtue thereof.
SIGNATURES TITLE DATE
/s/ John F. Donahue Chairman and Trustee
September 3, 1996
John F. Donahue (Chief Executive Officer)
/s/ Glen R. Johnson President September 3,
1996
Glen R. Johnson
/s/ John W. McGonigle Treasurer and
John W. McGonigle Executive Vice President September 3, 1996
(Principal Financial and
Accounting Officer)
/s/ Thomas G. Bigley Trustee September 3,
1996
Thomas G. Bigley
/s/ John T. Conroy, Jr. Trustee September 3,
1996
John T. Conroy, Jr.
/s/ William J. Copeland Trustee September 3,
1996
William J. Copeland
/s/ James E. Dowd Trustee September 3,
1996
James E. Dowd
/s/ Lawrence D. Ellis, M.D. Trustee September 3,
1996
Lawrence D. Ellis, M.D.
/s/ Edward L. Flaherty, Jr. Trustee September 3,
1996
Edward L. Flaherty, Jr.
/s/ Peter E. Madden Trustee September 3,
1996
Peter E. Madden
/s/ Gregor F. Meyer Trustee September 3,
1996
Gregor F. Meyer
/s/ John E. Murray, Jr. Trustee September 3,
1996
John E. Murray, Jr.
/s/ Wesley W. Posvar Trustee September 3,
1996
Wesley W. Posvar
/s/ Marjorie P. Smuts Trustee September 3,
1996
Marjorie P. Smuts
Sworn to and subscribed before me this 3rd day of September, 1996.
Notary Public
Exhibit 1 under Form N-1A
Exhibit EX-3(a) under Item 601/Reg. S-K
MONEY MARKET TRUST
DECLARATION OF TRUST
Page
Article I Name and Definitions 1
1. Name 1
2. Definitions -- 1
(a)Affiliated Person, Assignment,
Commission, Interested Person,
Majority Shareholder Vote, Principal
Underwriter 1
(b)Trust 1
(c)Accumulated Net Income 2
(d)Shareholder 2
(e)Trustees 2
(f)Shares 2
(g)1940 Act 2
Article II Purpose of Trust 2
Article III Beneficial Interest 2
1. Shares of Beneficial 2
2. Ownership of Shares 3
3. Investment in the Trust 3
4. No Pre-emptive Rights 3
Article IV The Trustees 4
1. Management of the Trust 4
2. Election of Trustees at 1979 Meeting of
Shareholders 4
3. Term of Office of Trustees 4
4. Termination of Service and Appointment
of Trustees 5
5. Temporary Absence of Trustee 5
6. Number of Trustees 5
7. Effect of Death, Resignation, Etc. of a Trustee 6
8. Ownership of the Trust 6
Article V Powers of the Trustees 6
1. Powers 6
2. Principal Transactions 10
3. Trustees and Officers as Shareholders 11
4. Parties to Contract 11
Article VI Trustees' Expenses and Compensation 12
1. Trustee Reimbursement 12
2. Trustee Compensation 13
Article VII Investment Adviser, Administrative Services,
Principal Underwriter and Transfer Agent 13
2
1. Investment Adviser 13
2. Administrative Services 14
3. Principal Underwriter 14
4. Transfer Agent 15
5. Provisions and Amendments 15
Article VIII Shareholders' Voting Powers and Meetings 16
1. Voting Powers 16
2. Meetings 16
3. Quorum and Required Vote 17
4. Additional Provisions 17
Article IX Custodian 18
1. Appointment and Duties 18
2. Central Certificate System 19
Article X Distributions and Redemptions 19
1. Distributions 19
2. Redemptions and Repurchases 20
3. Determination of Accummulated Net Income 20
4. Net Asset Value of Shares 22
5. Suspension of the Right of Redemption 24
6. Trust's Right to Redeem Shares 25
Article XI Limitation of Liability and Indemnification 25
3
1. Limitation of Personal Liability and
Indemnification of Shareholders 25
2. Limitation of Personal Liability of
Trustees, Officers, Employees or Agents of
the Trust 26
3. Express Exculpatory Clauses and Instruments27
4. Indemnification of Trustees, Officers,
Employees and Agents 28
Article XII Miscellaneous 29
1. Trust is not a partnership 29
2. Trustee's Good Faith Action, Expert Advice, No
Bond or Surety 29
3. Establishment of Record Dates 29
4. Termination of Trust 30
5. Offices of the Trust, Filing of Copies,
References, headings 31
6. Applicable Law 32
7. Amendments 32
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.
4
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 ``oney Market
Trust.''
Section 2. Definitions. Wherever used herein, unless otherwise
required by the context or specifically provided:
(a) The terms ``ffiliated Person,'' ``Assignment,''
``ommission,'' ``Interested Person,'' ``ajority Shareholder Vote'' (the
67% or 50% requirement of the third sentence of Section 2(a)(42) of the
1940 Act, whichever may be applicable) and ``rincipal Underwriter'' shall
have the meanings given them in the Investment Company Act of 1940, as
amended from time to time;
(b) The `Trust'' refers to Money Market Trust;
(c) ``ccumulated Net Income'' means the accumulated net income
of the Trust determined in the manner provided or authorized in Article X,
Section 3;
(d) ``hareholder'' 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.
5
ARTICLE II
PURPOSE OF TRUST
The purpose of this Trust is to provide investors a continuous source
of managed investments primarily in securities.
ARTICLE III
BENEFICIAL INTEREST
Section 1. Shares of Beneficial Interest. The beneficial interest in
the Trust shall at all times be divided into transferable Shares, without
par value, each of which shall represent an equal proportionate interest in
the Trust with each other Share outstanding, none having priority or
preference over another. The number of Shares which may be issued is
unlimited. The Trustees may from time to time divide or combine the
outstanding Shares into a greater or lesser number without thereby changing
the proportionate beneficial interest in the Trust. Contributions to the
Trust may be accepted for, and Shares shall be redeemed as, whole Shares
and/or fractions.
Section 2. Ownership of Shares. The ownership of Shares shall be
recorded in the books of the Trust or a transfer agent. The Trustees may
make such rules as they consider appropriate for the transfer of shares and
similar matters. The record books of the Trust or any transfer agent, as
the case may be, shall be conclusive as to who are the holders of Shares
and as to the number of Shares held from time to time by each.
Section 3. Investment in the Trust. The Trustees shall accept
investments in the Trust from such persons and on such terms as they may
from time to time authorize. After the date of the initial contribution of
capital (which shall occur prior to the initial public offering of Shares
to 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
6
Shares which may have been redeemed or repurchased by the Trust) may be
issued or sold at a price which will net the Trust, before paying any taxes
in connection with such issue or sale, not less than the net asset value
(as defined in Article X, Section 4) thereof; provided, however, that the
Trustees may in their discretion impose a sales charge upon investments in
the Trust.
Section 4. No Pre-emptive Rights. Shareholders shall have no pre-
emptive or other right to subscribe to any additional Shares or other
securities issued by the Trust or the Trustees.
ARTICLE IV
THE TRUSTEES
Section 1. Management of the Trust. The business and affairs of the
Trust shall be managed by the Trustees, and they shall have all powers
necessary and 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 the other Trustees, which
shall take effect upon such delivery or upon such later date as is
specified therein; (b) that any Trustee may be removed at any time by
written instrument signed by at least two-thirds of the number of Trustees
7
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 mental or physically incapacitated may be retired by written
instrument signed by a majority of the other Trustees, specifying the date
of his retirement; and (d) a Trustee may be removed at any special meeting
of Shareholders of the Trust by a vote of two-thirds of the outstanding
Shares.
Section 4. Termination of Service and Appointment of Trustees. In
case of the death, resignation, retirement, removal or mental or physical
incapacity of any of the Trustees, or in case a vacancy shall, by reason of
an increase in number, or for any other reason, exist, the remaining
Trustees shall fill such vacancy by appointing such other person as they in
their discretion shall see fit. Such appointment shall be effected by the
signing of a written instrument by a majority of the Trustees in office.
Within three months of such appointment, the Trustees shall cause notice of
such appointment to be mailed to each Shareholder at his address as
recorded on the books of the Trust. An appointment of a Trustee may be
made by the Trustees then in office and notice thereof mailed to
Shareholders as aforesaid in anticipation of a vacancy to occur by reason
of retirement, resignation or increase in number of Trustees effective at a
later date, provided that said appointment shall become effective only at
or after the effective date of said retirement, resignation or increase in
number of Trustees. As soon as any Trustee so appointed shall have
accepted this Trust, the trust estate shall vest in the new Trustee or
Trustees, together with the continuing Trustees, without any further act or
conveyance, and he shall be deemed a Trustee hereunder. Any appointment
authorized by this Section 4 is subject to the provisions of Section 16(a)
of the 1940 Act.
Section 5. Temporary Absence of Trustee. Any Trustee may, by power
of attorney, delegate his power for a period not exceeding six months at
any one time to any other Trustee or Trustees, provided that in no case
8
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
absent from the Commonwealth of Massachusetts or, if not a domiciliary of
Massachusetts, is absent from his state of domicile, or 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. Effective of Death, Resignation, etc. of a Trustee. The
death, resignation, retirement, removal, or mental or physical incapacity
of the Trustees, or any one of them, shall not operate to annul the Trust
or to revoke any existing agency created pursuant to the terms of this
Declaration of Trust.
Section 8. Ownership of the Trust. The assets of the Trust shall be
held separate and apart from any assets now or hereafter held in any
capacity other than as Trustee hereunder by the Trustees or any successor
Trustee. All of the assets of the Trust shall at all times be considered
as vested in the Trustees. No Shareholder shall be deemed to have a
severable ownership in any individual asset of the Trust or any right of
partition or possession thereof, but each Shareholder shall have a
proportionate undivided beneficial interest in the Trust.
ARTICLE V
POWER 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.
9
The Trustees shall have full power and authority to do any and all acts and
to make and execute any and all contracts and instruments that they may
consider necessary or appropriate in connection with the management of the
Trust. The Trustees shall not be bound or limited by present or future
laws or customs in regard to trust investments, but shall have full
authority and power to make any and all investments which they, in their
uncontrolled discretion, shall deem proper to accomplish the purpose of
this Trust. Without limiting the foregoing, the Trustees shall have the
following specific powers and authority, subject to any applicable
limitation in this Declaration of Trust or in the By-Laws of the Trust.
(a) To buy, and invest funds in their hands in, securities
including, but not limited to , common stocks, preferred stocks,
bonds, debentures, warrants and rights to purchase securities,
certificates of beneficial interest, money market instruments, notes
or other evidences of indebtedness issued by corporations, trusts or
associations, domestic or foreign, or issued or guaranteed by the
United States of America or any agency or instrumentality thereof, by
the government of any foreign country, by any State of the United
States, or by any political subdivision or agency or instrumentality
of any State or foreign country, or in ``hen-issued'' or ``delayed-
delivery''contracts for any such securities, or in any repurchase
agreement (agreements under which the seller agrees at the time of the
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;
10
(d) To appoint or otherwise engage a bank or trust company as
custodian of any assets of the Trust subject to any conditions set
forth in this Declaration of Trust or in the By-Laws;
(e) To appoint or otherwise engage transfer agents, dividend
disbursing agents, Shareholder servicing agents, investment advisers,
sub-investment advisers, principal underwriters, administrative
service agents, and such other agents as the Trustees may from time to
time appoint or otherwise engage;
(f) To provide for the distribution of interests of the Trust
either through a principal underwriter in the manner hereinafter
provided for or by the Trust itself, or both;
(g) To set record dates in the manner hereinafter provided for;
(h) To delegate such authority as they consider desirable to a
committee or committees composed of Trustees, including without
limitation, an Executive Committee, or to any officers of the Trust
and to any agent, custodian or underwriter;
(i) To sell or exchange any or all of the assets of the Trust,
subject to the provisions of Article XII, Section 4(b) hereof;
(j) To vote or give assent, or exercise any rights of ownership,
with respect to stock or other securities or property; and to execute
and deliver powers of attorney to such person or persons as the
Trustees shall deem proper, granting to such person or persons such
power and discretion with relation to securities or property as the
Trustees shall deem proper;
(k) To exercise powers and rights of subscription or otherwise
which in any manner arise out of ownership of securities;
(l) To hold any security or property in a form not indicating
any trust, whether in bearer, unregistered or other negotiable form;
or either in its own name or in the name of a custodian or a nominee
or nominees, subject in either case to proper safeguards according to
11
the usual practice of Massachusetts trust companies or investment
companies;
(m) To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or concern,
any security of which is held in the Trust; to consent to any
contract, lease, mortgage, purchase, or sale of property by such
corporation or concern, and to pay calls or subscriptions with respect
to any security held in the Trust;
(n) To engage in and to prosecute, compound, compromise,
abandon, or adjust, by arbitration, or otherwise, any actions, suits,
proceedings, disputes, claims, demands, and things relating to the
Trust, and out of the assets of the Trust to pay, or to satisfy, and
debts, claims or expenses incurred in connection therewith, including
those of litigation, upon any evidence that the Trustees may deem
sufficient (such powers shall include without limitation any actions,
suits, proceedings, disputes, claims, demands and things relating to
the Trust wherein any of the Trustees may be named individually and
the subject matter of which arises by reason of business for or on
behalf of the Trust);
(o) To make distributions of income and of capital gains to
Shareholders in the manner hereinafter provided for;
(p) To borrow money but only as a temporary measure for
extraordinary or emergency purposes and then (a) only in amounts not
in excess of 5% of the value of its total assets or (b) in any amount
up to one-third of the value of its total assets, including the amount
borrowed, in order to meet redemption requests without immediately
selling any portfolio securities. The Trustees shall not pledge,
mortgage or hypothecate the assets of the Trust.
(q) From time to time to issue and sell the Shares of the Trust
either for cash or for property whenever and in such amounts as the
12
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) from or
sell any securities (other than Shares of the Trust) to, or lend any assets
of the Trust to, any Trustee or officer or employee of the Trust or any
firm of which any such Trustee or officer is a member acting as principal
unless permitted by the 1940 Act, but the Trust may employ any such other
party or any such person or firm or company in which any such person is an
interested person in any capacity not prohibited by the 1940 Act.
Section 3. Trustees and Officers as Shareholders. Any Trustee,
officer or other agent of the Trust may acquire, own and dispose of shares
of the Trust to the same extent as if he were not a Trustee, officer or
agent; and the Trustees may issue and sell or cause to be issued or sold
Shares of the Trust to and buy such Shares form 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.
13
Section 4. Parties to Contract. The Trustee may enter into any
contract of the character described in Section 1,2,3, or 4 of Article VII
or in Article IX hereof or any other capacity not prohibited by the 1940
Act with any corporation, firm, trust or association, although one or more
of the shareholders, Trustees, officers, employees or agents of the Trust
or their affiliates may be an officer, director, Trustee, shareholder or
interested person of such other party to the contract, and no such contract
shall be invalidated or rendered voidable by reason of the existence of any
such relationship, nor shall any person holding such relationship be liable
merely by reason of such relationship for any loss or expense to the Trust
under or by reason of said contract or accountable for any profit realized
directly or indirectly therefrom, in the absence of actual fraud. The same
person (including a firm, corporation, trust or association) may be the
other party to contracts entered into pursuant to Sections 1,2,3 and 4 or
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;
14
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 commission of every
kind; expenses of issue (including cost of share certificates), repurchase
and redemption of shares, including expenses attributable to a program of
periodic issue; charges and expenses of custodians, transfer agents,
dividend disbursing agents, shareholder servicing agents and registrars;
printing and mailing costs; auditing, accounting and legal expenses;
reports to shareholders and governmental officers and commissions; expenses
of meetings of shareholders and proxy solicitations therefor; insurance
expenses; association membership dues and nonrecurring items as they 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 for the payment of such expenses, disbursements, losses and
liabilities, the Trustees shall have a lien on the Trust estate prior to
any rights or interests of the Shareholders thereto. This section shall
not preclude the Trust from directly paying any of the aforementioned fees
and expenses.
Section 2. Trustee Compensation. The Trustees shall be entitled to
compensation from the Trust for their respective services as Trustees, to
be determined from time to time by vote of the Trustees, and the Trustees
shall also determine the compensation of all Officers, consultants and
agents whom they may elect or appoint. The Trust may pay any Trustee or
any corporation, firm, trust or association of which a Trustee is an
interested person for services rendered to the Trust in any capacity not
prohibited by the 1940 Act, and such payments shall not be deemed
15
compensation for services as a Trustee under the first sentence of this
Section 2 of Article VI.
ARTICLE VII
INVESTMENT ADVISER, ADMINISTRATIVE SERVICES,
PRINCIPAL UNDERWRITER AND TRANSFER AGENT
Section 1. Investment Adviser. Subject to a Majority Shareholder
Vote, the Trustees may in their discretion from time to time enter into an
investment advisory contract whereby the other party to such contract shall
undertake to furnish the Trustees investment advisory services upon such
terms and conditions and for such compensation as the Trustees may in their
discretion determine. Subject to a Majority Shareholder Vote, the
investment adviser may enter into a sub-investment advisory contract to
receive investment advice, statistical and factual information from the
sub-investment adviser upon such terms and conditions and for such
compensation as the Trustees may in their discretion agree to.
Notwithstanding any provisions of this Declaration of Trust, the Trustees
may authorize the investment adviser or sub-investment adviser or any
person furnishing administrative personnel and services as set forth in
Article VII, Section 2 (subject to such general or specific instructions as
the Trustees may from time to time adopt) to effect purchases, sales or
exchanges pursuant to recommendations of the investment adviser (and all
without further action by the Trustees). Any such purchase, sales and
exchanges shall be deemed to have been authorized by the Trustees. The
Trustees may also authorize the investment adviser to determine what firms
shall be employed to effect transactions in securities for the account of
the Trust and to determine what firms shall participate in any such
transactions or shall share in commissions or fees charged in connection
with such transactions.
Section 2. Administrative Services. The Trustees may in their
discretion from time to time contract for administrative personnel and
16
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
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.
17
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 1. Voting Powers. The Shareholders shall have power to vote
(i) for the election of Trustees as provided in Article IV, Section 2; (ii)
for the removal of Trustees as provided in Article IV, Section 3(d); (iii)
with respect to any investment adviser or sub-investment adviser as
provided in Article VII, Section 1; (iv) with respect to the amendment of
this Declaration of Trust as provided in Article XII, Section 7; (v) to the
same extent as the shareholders of a Massachusetts business corporation as
to whether or not a court action, proceeding or claim should be brought or
maintained derivatively or as a class action on behalf of the Trust or the
Shareholders; and (vi) with respect to such additional matters relating to
the Trust as may be required by law, by this Declaration of Trust, or the
By-Laws of the Trust or any regulation of the Trust with the Commission or
any State, or as the Trustees may consider desirable. Each whole Share
shall be entitled to one vote as to any matter on which it is entitled to
vote, and each fractional Share shall be entitled to a proportionate
fractional vote. There shall be no cumulative voting in the election of
Trustees. Shares may be voted in person or by proxy. Until Shares are
issued, the Trustees may exercise all rights of Shareholders and may take
any action required or permitted by law, this Declaration of Trust or any
By-Laws of the Trust to be taken by Shareholders.
Section 2. Meetings. A 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 or the Chief Executive Officer
of the Trust and shall be called by the Trustees upon the written request
of Shareholders owning at least one-tenth of the outstanding Shares
entitled to vote. Shareholders shall be entitled to at least fifteen days'
notice of any meeting.
18
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 in 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 tow 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;
19
(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
20
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 deposits shall be subject to withdrawal only
upon the order of the custodian at the direction of the Trustees.
ARTICLE X
DISTRIBUTIONS AND REDEMPTIONS
Section 1. Distributions.
(a) The Trustees may from time to time declare and pay dividends, and
the amount of such dividends and the payment of them shall be wholly in the
discretion of the Trustees.
(b) The Trustees may, on each day Accumulated Net Income of the Trust
(as defined in Section 3 of this Article X) is determined and is positive,
declare such Accumulated Net Income as a dividend to Shareholders of record
at such time as the Trustees shall designate, payable in 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 practice, is income and what is principal shall be final, and
except as specifically provided herein the decision of the Trustees as to
what expenses and charges of the Trust shall be charged against principal
and what against the income shall be final. Any income not distributed in
any year may be permitted to accumulate and as long as not distributed may
be invested from time to time in the same manner as the principal funds of
the Trust.
(e) The Trustees shall have power, to the fullest extent permitted by
the laws of Massachusetts, at any time, or from time to time, to declare
21
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.
22
(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.
23
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
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
24
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 (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).
25
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 or agents of the Trust
shall have no power to bind any Shareholder personally or to call upon any
Shareholder for the payment of any sum of money or assessment whatsoever,
other than such as the Shareholder may at any time agree to pay by way of
subscription to any Shares or otherwise.
No Shareholder or former Shareholder of the Trust shall be liable
solely by reason of his being or having been a Shareholder for any debt,
claim, action, demand, suit, proceeding, judgment, decree, liability or
obligation 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
26
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 wrongdoing by them or
any officer, agent, employee, investment adviser or principal underwriter
of the Trust or of any entity providing administrative services for the
Trust, but nothing herein contained shall protect any Trustee or officer
against any liability to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his office.
Section 3. Express Exculpatory Clauses and Instruments. The Trustees
shall use every reasonable means to assure that all persons having dealing
with the Trust shall be informed that the property of the Shareholders and
27
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, agent or employee of
the Trust be liable to anyone for such omission. If, notwithstanding this
provision, any Shareholder, Trustee, officer, employee or agent shall be
held liable to any other person by reason of the omission of such provision
from any such agreement, undertaking or obligation, the Shareholder,
Trustee, officer, employee or agent shall be entitled to indemnity and
reimbursement out of the Trust property, as provided in this Article XI.
Section 4. Indemnification of Trustees, Officers, Employees and
Agents.
(a) Every person who is or has been a Trustee, officer, employee or
agent of the Trust and persons who serve at the Trust's request as
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise shall be indemnified by the Trust
to fullest extent permitted by law against liability and against all
expenses reasonably incurred or paid by him in connection with any debt,
claim, action, demand, suit, proceeding, judgment, decree, liability or
obligation of any kind in which he becomes involved as a party or otherwise
by virtue of his being or having been a Trustee, officer, employee or agent
of the Trust or of another corporation, partnership, joint venture, trust
28
or other enterprise at the request of the Trust and against amounts paid or
incurred by him in the settlement thereof.
(b) The words ``laim,'' ``action,'' ``uit'' or ``proceeding'' shall
apply to all claims, actions, suits or proceedings (civil, criminal,
administrative, legislative, investigative or other, including appeals),
actual or threatened, and the words ``iability'' 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 on hereafter be entitled, shall continue as a person who has ceased
to be a 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.
29
Section 2. Trustee's Good Faith Action, Expert Advice, No Bond or
Surety. The exercise by the Trustees of their powers and discretions
hereunder in good faith and with reasonable care under the circumstances
then prevailing, shall be binding upon everyone interested. Subject to the
provisions of Article XI, the Trustees shall not be liable for errors of
judgment or mistakes of fact or law. The Trustees may take advice of
counsel or other experts with respect to the meaning and operation of this
Declaration of Trust, and subject to the provisions of Article XI, shall be
under no liability for any act or omission in accordance with such advice
or for failing to follow such advice. The Trustees shall not be required
to give any bond as such, nor any surety if a bond is required.
Section 3. Establishment of Record Dates. The Trustees may close the
Share transfer books of the Trust for a period not exceeding sixty (60)
days preceding the date of any meeting of Shareholders, or the date for the
payment of any dividend or the making of any distribution to Shareholders,
or the date for the allotment of rights, or the date when any change or
conversion or exchange of Shares shall go into effect; or in lieu of
closing the Share transfer books as aforesaid, the Trustees may fix in
advance a date, not exceeding sixty (60) days preceding the date of any
meeting of Shareholders, or the date for the payment of any dividend or the
making of any distribution to Shareholders, or the date for the allotment
of rights, or the date when any change or conversion or exchange of Shares
shall go into effect, or the last day on which the consent or dissent of
Shareholders may be effectively expressed for any purpose, as a record date
for the determination of the Shareholders entitled to notice of, and, to
vote at, any such meeting and any adjournment thereof, or entitled to
receive payment of any such dividend or distribution, or to any such
allotment of rights, or to exercise the right to give such assent 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
30
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 under the laws of
any state of the United States, which is a diversified open-end management
investment company as defined in the 1940 Act, for an adequate
consideration which may include the assumption of all outstanding
obligations, taxes and other liabilities, accrued or contingent, of the
Trust and which may include shares of beneficial interest or stock of such
trust or corporation. Upon making provision for the payment of all such
liabilities, by such assumption or otherwise, the Trustees shall distribute
the remaining proceeds ratably among the holders of the Shares of the Trust
then outstanding.
(c) Subject to a Majority Shareholder Vote, the Trustees may at any
time sell and convert into money all the assets of the Trust. Upon making
provision for the payment of all outstanding obligations, taxes and other
liabilities, accrued or contingent, of the Trust, the Trustees shall
distribute the remaining assets of the Trust ratably among the holders of
the outstanding Shares.
(d) Upon completion of the distribution of the remaining proceeds of
the remaining assets as provided in paragraphs (b) and (c), the Trust shall
terminate and the Trustees shall be discharged of any and all further
liabilities and duties hereunder and the right, title and interest of all
parties shall be canceled and discharged.
31
Section 5. Offices of the Trust, Filing of Copies, References,
Headings. The Trust shall maintain a usual place of business in
Massachusetts, which, initially, shall be 31 Milk Street, Boston,
Massachusetts, and shall continue to maintain an office at such address
unless changed by the Trustees to another location in Massachusetts. The
Trust may maintain other offices as the Trustees may from time to time
determine. The original or a copy of this instrument and of each
declaration of trust supplemental hereto shall be kept at the office of the
Trust where it may be inspected by any Shareholder. A copy of this
instrument and of each supplemental declaration of trust shall be filed by
the Trustees with the Massachusetts Secretary of State and the Boston City
Clerk, as well as any other governmental office where such filing may from
time to time be required. Anyone dealing with the Trust may rely on a
certificate by an officer of the Trust as to whether or not any such
supplemental declaration of trust has been made and as to any matters in
connection with the Trust hereunder, and with the same effect as if it were
the original, may rely on a copy certified by an officer of the Trust to be
a copy of this instrument or of any such supplemental declaration of trust.
In this instrument or in any such supplemental declaration of trust,
references to this instrument, and all expressions like ``erein,''
``ereof'' 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
32
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 /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
33
/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. JOSEPH
MALONEY, JR., WESLEY W. POSVAR, EDWARD E. SMUTS, THOMAS J. DONNELLY, GLEN
R. JOHNSON, GREGOR F. MEYER and EDWARD L. FLAHERTY, JR., who acknowledged
the foregoing Declaration of Trust to be their act.
Witness my hand and notarial seal the day and year last above written.
/s/ Mary Anne Miller
Notary Public
Exhibit 2 under Form N-1A
Exhibit 3(b) under Item 601/Reg. S-K
MONEY MARKET TRUST
OUTLINE OF BY-LAWS
Page
Article I Officers and Their Election 1
1. Officers 1
2. Election of Officers 1
3. Resignations and Removals and Vacancies1
Article II Powers and Duties of Trustees and Officers1
1. Trustees 1
2. Chairman of the Trustees 1
3. President 2
4. Vice President 2
5. Secretary 2
6. Treasurer 2
7. Assistant Vice President 2
8. Assistant Secretaries and Assistant
Treasurers 3
9. Salaries 3
Article III Powers and Duties of the Executive and Other Committees
3
1. Executive and Other Committees 3
2. Vacancies in Executive Committee 3
3. Executive Committee to Report to Trustees 3
4. Procedure of Executive Committee 3
5. Powers of Executive Committee 3
6. Compensation 4
7. Informal Action by Executive Committee or
Other Committees 4
Article IV Shareholders' Meetings 4
1. Special Meetings 4
2. Notices 4
3. Place of Meetings 4
4. Action by Consent 4
5. Proxies 4
Article V Trustees Meetings 5
1. Number and Qualifications of Trustees 5
2. Special Meetings 5
3. Regular Meetings 5
4. Quorum and Vote 5
5. Notices 5
6. Place of Meeting 5
7. Telephonic Meeting 6
8. Special Action 6
9. Action by Consent 6
10. Compensation of Trustees 6
Page
Article VI Shares of Beneficial Interest 6
1. Beneficial Interest 6
2. Certificates 6
3. Transfer of Shares 7
4. Equitable Interest not Recognized 7
5. Lost, Destroyed or Mutilated Certificates 7
6. Transfer Agent and Registrant: Regulations 7
Article VII Inspection of Books 7
Article VIII Agreements, Checks, Drafts, Endorsements, Etc. 7
1. Agreements, Etc. 7
2. Checks, Drafts, Etc. 8
3. Endorsements, Assignments and Transfer of Securities
8
4. Evidence of Authority 8
Article IX Seal 8
Article X Fiscal Year 8
Article XI Amendments 8
Article XII Waivers of Notice 8
Article XIII Reports to Shareholders 9
Article XIV Books and Records 9
BY-LAWS
of
MONEY MARKET TRUST
ARTICLE I
OFFICERS AND THEIR ELECTION
Section 1. Officers. The officers of the Trust shall be a Chairman
of the Trustees, a President, one or more Vice Presidents, a Treasurer, a
Secretary and such other officers as the Trustees may from time to time
elect. It shall not be necessary for any Trustee or other officer to be a
holder of shares in the Trust.
Section 2. Election of Officers. The President, Vice President,
Treasurer and Secretary shall be chosen by the Trustees. The Chairman of
the Trustees shall be chosen annually by and from the Trustees.
Two or more offices may be held by a single person except
the offices of President and Secretary. The officers shall hold office
until their successors are chosen and qualified.
Section 3. Resignations and Removals and Vacancies. Any officer of
the Trust may resign by filing a written resignation with the Chairman of
the Trustees or with the Chairman of the Trustees or with the Trustees or
with the Secretary, which shall take effect on being so filed or at such
time as may be therein specified. The Trustees may remove any officers,
with or without cause, by a majority vote of all of the Trustees. The
Trustees may fill any vacancy created in any office whether by resignation,
removal or otherwise.
ARTICLE II
POWERS AND DUTIES OF TRUSTEES AND OFFICERS
Section 1. Trustees. The business and affairs of the Trust shall be
managed by the Trustees, and they shall have all powers necessary and
desirable to carry out that responsibility.
Section 2. Chairman of the Trustees (`Chairman''). The Chairman
shall be the chief executive officer of the Trust. He shall have general
supervision over the business of the Trust and policies of the Trust. He
shall employ and define the duties of all employees of the Trust, shall
have power to discharge any such employees, shall exercise general
supervision over the affairs of the Trust and shall perform such other
duties as may be assigned to him from time to time by the Trustees. He
shall preside at the meetings of shareholders and of the Trustees. The
Chairman shall appoint a Trustee to preside at such meetings in his
absence, with the approval of the Trustees.
Section 3. President. The President, in the absence of the Chairman,
shall perform all duties and may exercise any of the powers of the Chairman
subject to the control of the other Trustees. He shall counsel and advise
the Chairman on matters of major importance and shall perform such other
duties as may be assigned to him from time to time by the Trustees, the
Chairman or the Executive Committee.
Section 4. Vice President. The Vice President (or if more than one,
the senior Vice President) in the absence of the President shall perform
all duties any may exercise any of the powers of the President subject to
the control of the Trustees. Each Vice President shall perform such other
duties as may be assigned to him from time to time by the Trustees, the
Chairman or the Executive Committee.
Section 5. Secretary. The Secretary shall keep or cause to be kept
in books provided for the purpose the Minutes of the Meetings of
Shareholders and of the Trustees; shall see that all Notices are duly given
in accordance with the provisions of these By-Laws and as required by law;
shall be custodian of the records and of the Seal of the Trust and see that
the Seal is affixed to all documents, the execution of which on behalf of
the Trust under its Seal is duly authorized; shall keep directly or through
a transfer agent a register of the post office address of each shareholder,
and make all proper changes in such register, retaining and filing his
authority for such entries; shall see that the books, reports, statements,
certificates and all other documents and records required by law are
properly kept and filed; and in general shall perform all duties incident
to the Office of Secretary and such other duties as may from time to time
be assigned to him by the Trustees, Chairman or the Executive Committee.
Section 6. Treasurer. The Treasurer shall be the principal financial
and accounting officer of the Trust. He shall deliver all funds and
securities of the Trust which may come into his hands to such bank or trust
company as the Trustees shall employ as custodian or sub-custodian in
accordance with Article IX of the Declaration of Trust. The Treasurer
shall perform such duties additional to the foregoing as the Trustees,
Chairman or the Executive Committee may from time to time designate.
Section 7. Assistant Vice President. The Assistant Vice or Vice
Presidents of the Trust shall have such authority and perform such duties
as may be assigned to them by the Trustees, the Executive Committee or the
Chairman.
Section 8. Assistant Secretaries and Assistant Treasurers. The
Assistant Secretary or Secretaries and the Assistant Treasurer or
Treasurers shall perform the duties of the Secretary and of the Treasurer,
respectively, in the absence of those Officers and shall have such further
powers and perform such other duties as may be assigned to them
respectively by the Trustees or the Executive Committee or the Chairman.
Section 9. Salaries. The salaries of the Officers shall be fixed
from time to time by the Trustees. No officer shall be prevented from
receiving such salary by reason of the fact that he is also a Trustee.
ARTICLE III
POWERS AND DUTIES OF THE
EXECUTIVE AND OTHER COMMITTEES
Section 1. Executive and Other Committees. The Trustees may elect
from their own number an executive committee to consist of not less than
two members, which number shall include the Chairman of the Trustees, who
shall, ex officio, be a member thereof. The executive committee shall be
elected by a resolution passed by a vote of at least a majority of the
Trustees then in office. The Trustees may also elect from their own number
other committees from time to time, the number composing such committees
and the powers conferred upon the same to be determined by vote of the
Trustees.
Section 2. Vacancies in Executive Committee. Vacancies occurring in
the Executive Committee from any cause shall be filled by the Trustees by a
resolution passed by the vote of at least a majority of the Trustees then
in office.
Section 3. Executive Committee to Report to Trustees. All action by
the Executive Committee shall be reported to the Trustees at their meeting
next succeeding such action.
Section 4. Procedure of Executive Committee. The Executive Committee
shall fix its own rules of procedure not inconsistent with these By-Laws or
with any directions of the Trustees. It shall meet at such times and
places and upon such notice as shall be provided by such rules or by
resolution of the Trustees. The presence of a majority shall constitute a
quorum for the transaction of business, and in every case an affirmative
vote of a majority of all the members of the Committee present shall be
necessary for the taking of any action.
Section 5. Powers of Executive Committee. During the intervals
between the Meetings of the Trustees, the Executive Committee, except as
limited by the By-Laws of the Trust or by specific directions of the
Trustees, shall possess any may exercise all the powers of the Trustees in
the management and direction of the business and conduct of the affairs of
the Trust in such manner as the Executive Committee shall deem for the best
interests of the Trust, and shall have power to authorize the Seal of the
Trust to be affixed to all instruments and documents required same.
Notwithstanding the foregoing, the Executive Committee shall not have the
power to elect Trustees, increase or decrease the number of Trustees, elect
or remove any Officer, declare dividends, issue shares or recommend to
shareholders any action requiring shareholder approval.
Section 6. Compensation. The members of any duly appointed committee
shall receive such compensation and/or fees as from time to time may be
fixed by the Trustees.
Section 7. Informal Action by Executive Committee or Other Committee.
Any action required or permitted to be taken at any meeting of the
Executive Committee or any other duly appointed Committee may be taken
without a meeting if a consent in writing setting forth such action is
signed by all members of such committee and such consent is filed with the
records of the Trust.
ARTICLE IV
SHAREHOLDERS' MEETINGS
Section 1. Special Meetings. A special meeting of the shareholders
shall be called by the Secretary whenever ordered by the Trustees, the
Chairman or requested in writing by the holder or holders of at least one-
tenth of the outstanding shares entitled to vote. If the Secretary, when
so ordered or requested, refuses or neglects for more than two days to call
such special meeting, the Trustees, Chairman or the shareholders so
requesting may, in the name of the Secretary, call the meeting by giving
notice thereof in the manner required when notice is given by the
Secretary.
Section 2. Notices. Except as above provided, notices of any special
meeting of the shareholders shall be given by the Secretary be delivering
or mailing, postage prepaid, to each shareholder entitled to vote at said
meeting, a written or printed notification of such meeting, at least
fifteen days before the meeting, to such address as may be registered with
the Trust by the shareholder.
Section 3. Place of Meeting. Meetings of the Shareholders shall be
held at the principal place of business of the Trust in Pittsburgh,
Pennsylvania, or time to time by resolution of the Trustees.
Section 4. Action by Consent. Any action required or permitted to be
taken at any meeting of shareholders may be taken without a meeting, if a
consent in writing, setting forth such action, is signed by all the
shareholders entitled to vote on the subject matter thereof, and such
consent is filed with the records of the Trust.
Section 5. Proxies. Any shareholder entitled to vote at any meeting
of shareholders may vote either in person or by proxy. Every proxy shall
be in writing subscribed by the shareholder or his duly authorized attorney
and dated, but need not be sealed, witnessed or acknowledged. All proxies
shall be filed with and verified by the Secretary or an Assistant Secretary
of the Corporation or, if the meeting shall so decide, by the Secretary of
the Meeting.
ARTICLE V
TRUSTEES' MEETINGS
Section 1. Number and Qualifications of Trustees. The number of
Trustees shall be as fixed from time to time by a majority of the Trustees
but shall be no less than three nor more than twenty. The Trustees may
from time to time increase or decrease the number of Trustees to such
number as they deem expedient, not to be less than three nor more than
twenty, however, and fill the vacancies so created. The term of office of
a Trustee shall not be affected by any decrease in the number of Trustees
made by the Trustees pursuant to the foregoing authorization.
Section 2. Special Meetings. Special meetings of the Trustees shall
be called by the Secretary at the written request of the Chairman or any
Trustee, and if the Secretary when so requested refuses or fails for more
than twenty-four hours to call such meeting, the Chairman or such Trustee
may in the name of the Secretary call such meeting by giving due notice in
the manner required when notice is given by the Secretary.
Section 3. Regular Meetings. Regular meetings of the Trustees may be
held without call or notice at such places and at such times as the
Trustees may from time to time determine, provided that any Trustee who is
absent when such determination is made shall be given notice of
determination.
Section 4. Quorum and Vote. A majority of the Trustees shall
constitute a quorum for the transaction of business. The act of a majority
of the trustees present at any meeting at which a quorum is present shall
be the act of the Trustees unless a greater proportion is required by the
Declaration of Trust or these By-Laws or applicable law. In the absence of
a quorum, a majority of the Trustees present may adjourn the meeting from
time to time until a quorum shall be present. Notice of any adjourned
meeting need not be given.
Section 5. Notices. Except as otherwise provided, notice of any
special meeting of the Trustees shall be given by the Secretary to each
Trustee, by mailing to him, postage prepaid, addressed to him at his
address as registered on the books of the Trust or, if not so registered,
at his last know address, a written or printed notification of such meeting
at least four days before the meeting or by sending to him at his said
registered address, if any, or if he has no such registered address, at his
last know address, notice of such meeting. Subject to compliance with
Section 15(c) of the Investment Company Act of 1940. Subject to compliance
with Section 15(c) of the Investment Company Act of 1940, notice or waiver
of notice need not specify the purpose of any special meeting.
Section 6. Place of Meeting. Meetings of the Trustees shall be held
at the principal place of business of the Trust in Pittsburgh,
Pennsylvania, or at such place within or without the Commonwealth of
Massachusetts as fixed from time to time by resolution of the Trustees, or
as the person or persons requesting said meeting to be called may
designate, but any meeting may adjourn to any other place.
Section 7. Telephonic Meeting. Subject to compliance with Sections
15(c) and 32(a) of the Investment Company Act of 1940, if it is impractical
for the Trustees to meet in person, the Trustees may meet by means of a
telephone conference circuit to which all Trustees are connected or of
which all Trustees shall have waived notice which meeting shall be deemed
to have been held at a place designated by the Trustees at the meeting.
Section 8. Special Action. When all the Trustees shall be present at
any meeting, however called, or whenever held, or shall assent to the
holding of the meeting without notice, or after the meeting shall sign a
written assent thereto on the record of such meeting, the acts of such
meeting shall be valid as if such meeting had been regularly held.
Section 9. Action by Consent. Any action by the Trustees may be
taken without a meeting if a written consent thereto is signed by all the
Trustees and filed with the records of the Trustees' meetings. Such
consent shall be treated as a vote of the Trustees for all purposes.
Section 10. Compensation of Trustees. The Trustees may receive a
stated salary for their services as Trustees, and by Resolution of Trustees
a fixed fee and expenses of attendance may be allowed for attendance at
each Meeting. Nothing herein contained shall be construed to preclude any
Trustee from serving the Trust in any other capacity, as an officer, agent
or otherwise, and receiving compensation therefor.
ARTICLE VI
SHARES OF BENEFICIAL INTEREST
Section 1. Beneficial Interest. The beneficial interest in the Trust
shall at all times be divided into an unlimited number of shares without
par value. The shares of beneficial interest shall have one vote per share
at any meeting of the shareholders and a fractional vote for each fraction
of a share.
Section 2. Certificates. All certificates for shares shall be signed
by the Chairman, President or any Vice President and by the treasurer or
Secretary of any Assistant Treasurer or Assistant Secretary and sealed with
the seal of the Trust. The signatures may be either manual or facsimile
signatures and the seal may be either facsimile or any other form of seal.
certificates for shares for which the Trust has appointed an independent
Transfer Agent and Registrar shall not be valid unless countersigned by
such Transfer Agent and registered by such Registrar. In case any officer
who has signed any certificate ceases to be an officer of the Trust before
the certificate is issued, the certificate may nevertheless be issued by
the Trust with the same effect as if the officer had not ceased to be such
officer as of the date of its issuance. Share certificates shall be in
such for not inconsistent with law or the Declaration of Trust or these By-
Laws as may be determined by the Trustees.
Section 3. Transfer of Shares. The shares of the Trust shall be
transferable, so as to affect the rights of the Trust, only by transfer
recorded on the books of the Trust, in person or by attorney.
Section 4. Equitable Interest not Recognized. The Trust shall be
entitled to treat the holder or record of any share or shares as the
absolute owner thereof and shall not be bound to recognize any equitable or
other claim or interest in such share or shares on the part of any other
person except as may be otherwise expressly provided by law.
Section 5. Lost, Destroyed or Mutilated Certificates. In case any
certificate for shares is lost, mutilated or destroyed, the Trustees may
issue a new certificate in place thereof upon indemnity to the Trustees may
deem advisable.
Section 6. Transfer Agent and Registrar: Regulations. The Trustees
shall have power and authority to make all such rules and regulations as
they may deem expedient concerning the issuance, transfer and registration
of certificates for shares and may appoint a Transfer Agent and/or
Registrar of certificates for shares, any may require all such share
certificates to bear the signature of such Transfer Agent and/or of such
Registrar.
ARTICLE VII
INSPECTION OF BOOKS
The Trustees shall from time to time determine whether and to what
extent, and at what times and places, and under what conditions and
regulations the accounts and books of the Trust or any of them shall be
open to the inspection of the shareholders; and no shareholder shall have
any right of inspecting any account or book or document of the Trust except
as conferred by laws or authorized by the Trustees or by resolution of the
shareholders.
ARTICLE VIII
AGREEMENTS, CHECKS, DRAFTS, ENDORSEMENTS, ETC.
Section 1. Agreements, Etc. The Trustees or the Executive Committee
may authorize any Officer or Officers, or Agent or Agents of the Trust to
enter into any Agreement or execute and deliver any instrument in the name
of and on behalf of the Trust, and such authority may be general or
confined to specific instances; and, unless so authorized by the Trustees
or by the Executive Committee or by these By-laws, no Officer, Agent or
Employee shall have any power or authority to bind the Trust by any
Agreement or engagement or to pledge its credit or to render it liable
pecuniarily for any purpose or to any amount.
Section 2. Checks, Drafts, Etc. All checks, drafts, or orders for
the payment of money, notes and other evidences of indebtedness shall be
signed by such Officer or Officers, Employee or Employees, or Agent or
Agents, as shall from time to time be designated by the Trustees or the
Executive Committee, or as may be specified in or pursuant to the agreement
between the Trust and the Bank or Trust Company appointed as custodian,
pursuant to the provisions of the Declaration of Trust.
Section 3. Endorsements, Assignments and Transfer of Securities. All
endorsements, assignments, stock powers or other instruments of transfer of
securities standing in the name of the Trust or its nominee or directions
for the transfer of securities belonging to the Trust shall be made by such
Officer or Officers, Employee or Employees, or Agent or Agents as may be
authorized by the Trustees or the Executive Committee.
Section 4. Evidence of Authority. Anyone dealing with the Trust
shall be fully justified in relying on a copy of a resolution of the
Trustees or of any committee thereof empowered to act in the premises which
is certified as true by the Secretary or an Assistant Secretary under the
seal of the Trust.
ARTICLE IX
SEAL
The seal of the Trust shall be circular in form, bearing the
inscriptions:
MONEY MARKET TRUST - 1978 - MASSACHUSETTS
ARTICLE X
FISCAL YEAR
The fiscal year of the Trust shall be the period of twelve months
ending on the last day of July 31 in each calendar year.
ARTICLE XI
AMENDMENTS
These By-Laws may be amended by a majority vote of all of the
Trustees.
ARTICLE XII
WAIVERS OF NOTICE
Whenever any notice whatever is required to be given under the
provisions of any statute of the Commonwealth of Massachusetts, or under
the provisions of the Declaration of Trust or these By-Laws, a waiver
thereof in writing signed by the person or persons entitled to said notice,
whether before or after the time stated therein, shall be deemed equivalent
thereto. A notice shall be deemed to have been given if telegraphed,
cabled, or sent by wireless when it has been delivered to a representative
of any telegraph, cabled or sent by wireless. Any notice shall be deemed
to be given if mailed at the time when the same shall be deposited in the
mail.
ARTICLE XIII
REPORT TO SHAREHOLDERS
The trustees shall at least semi-annually submit to the shareholders a
written financial report of the transactions of the Trust, including
financial statements which shall at least annually be certified by
independent public accountants.
ARTICLE XIV
BOOKS AND RECORDS
The books and records of the Trust, including the stock ledgers, may
be kept in or outside the Commonwealth of Massachusetts at such office or
agency of the Trust as maybe from time to time determined by the Trustees.
Exhibit 99 under Form N-1A
Exhibit 18 under Item 601/Reg. S-K
NUMBER
MONEY MARKET TRUST
ACCOUNT NO. ALPHA CODE SEE REVERSE FOR
CERTAIN DEFINITIONS
THIS IS TO CERTIFY that is the owner of
FULLY-PAID AND NON-ASSESSABLE SHARES OF BENEFICIAL INTEREST OF
MONEY MARKET TRUST
hereinafter called the Trust, transferable on the books of the Trust by the
owner in person or by duly authorized attorney upon surrender of this
certificate properly endorsed.
The shares represented hereby are issued and shall be held subject to
the provisions of the Declaration of Trust and By-Laws of the Trust and all
amendments thereto, to all of which the holder by acceptance hereof
assents.
This Certificate is not valid unless countersigned by the Transfer
Agent.
IN WITNESS WHEREOF, the Trust has caused this Certificate to be signed
in its name by its proper officers and to be sealed with its Seal.
Dated: [seal]
Money Market Trust
Seal
1978
Massachusetts
TREASURER CHAIRMAN
ALL PERSONS DEALING WITH MONEY MARKET TRUST A MASSACHUSETTS BUSINESS TRUST,
MUST LOOK SOLELY TO THE TRUST PROPERTY FOR THE ENFORCEMENT OF ANY CLAIM
AGAINST THE TRUST, AS THE TRUSTEES, OFFICERS, AGENTS OF SHAREHOLDERS OF
THE TRUST ASSUME NO PERSONAL LIABILITY WHATSOEVER FOR OBLIGATIONS ENTERED
INTO ON BEHALF OF THE TRUST
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM -- as tenants in common UNIF GIFI MIN ACT Custodian
TEN ENT -- as tenants by the entireties (Cust) (Minor)
JT TEN -- as joint tenants with the
right of survivorship and not
as tenants in common under Uniform Gifts to
Minors
Act
(State)
Additional abbreviations may also be used though not in the above
list.
For value received, hereby sell, assign and transfer
-----------------
unto
Please insert Social Security or other
identifying number of Assignee.
(Please print or typewrite name and address, including zip code, of
Assignee)
shares
of beneficial interest represented by the within Certificate, and do hereby
to transfer the said shares on the books of the within named Trust with
full power of substitution in the premises
Dated
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT
MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE
CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERNATION OR ENLARGEMENT OR
ANY CHANGE WHATEVER.
PAGE 1
Exhibit 5 under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
MONEY MARKET TRUST
INVESTMENT ADVISORY CONTRACT
This Contract is made between FEDERATED RESEARCH, a Delaware business
trust having its principal place of business in Pittsburgh, Pennsylvania
(hereinafter referred to as `Adviser'), and MONEY MARKET TRUST, a
Massachusetts business trust having its principal place of business in
Pittsburgh, Pennsylvania (hereinafter referred to as the `Trust'), and is
based on the following premises:
(a) That the Trust is an open-end management investment company as
that term is defined in the Investment Company Act of 1940 and is
registered as such with the Securities and Exchange Commission.
(b) That Adviser is engaged in the business of rendering investment
advisory services.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follow:
1. The Trust hereby appoints Adviser as investment adviser and
Adviser accepts the appointment. Subject to the direction of the Trustees
of the Trust, Adviser shall provide investment research and supervision of
the investments of the Trust and conduct a continuous program of
investment, evaluation and of appropriate sale or other disposition and
reinvestment of the Trust portfolio.
2. Adviser, in its supervision of the investments of the Trust, will
be guided by the Trust's fundamental investment policies and the provisions
and restrictions contained in the Declaration of Trust and By-Laws of the
Trust and as set forth in the Registration Statements and exhibits as may
be on file with the Securities and Exchange Commission.
3. The Trust shall pay all of its expenses, including, without
limitation, the expenses of organizing the Trust and continuing its
existence; fees and expenses of Trustees and officers of the Trust; fees
for investment advisory services and administrative personnel and services;
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 amendment sent
to shareholders; expenses of registering, licensing, or other authorization
of the Trust as a broker-dealer and of its officers as agents and salesmen
under Federal and State laws and regulations; interest expense; taxes,
fees, and commissions of every kind; expenses of issue (including cost of
share certificates), purchase, repurchase and redemption of shares,
including expenses attributable to a program of periodic issue; charges and
expenses of custodians, transfer agents, dividend disbursing agents,
shareholder servicing agents and registrars; printing and mailing costs;
auditing, accounting and legal expenses; report to shareholders and
governmental officers and commissions; expenses of meetings of Trustees and
shareholders and proxy solicitations therefor; insurance expenses;
association membership dues and such nonrecurring items as may arise,
including all losses and liabilities incurred in administering the Trust.
The Trust will also pay such extraordinary expenses as may arise, including
expenses incurred in connection with litigation, proceedings and claims and
the legal obligations of the Trust to indemnify its Trustees, Officers,
employees, shareholders, distributors and agents with respect thereto.
4. For all services rendered by Adviser hereunder, the Trust shall
pay to Adviser and Adviser agrees to accept as full compensation for all
services rendered hereunder, a net investment advisory fee equal to the
gross investment advisory fee computed in accordance with subparagraph (a)
hereof, less the reimbursement computed in accordance with subparagraph (b)
hereof:
(a) The annual gross investment advisory fee shall be equal to 0.40%
of the average daily net assets of the Trust. Such fee shall be
accrued daily at the rate of 1/365th of 0.40% of the daily net assets
of the Trust.
(b) Adviser shall reimburse the Trust (limited to the amount of gross
investment advisory fee computed in accordance with the provisions of
subparagraph (a) of this paragraph 4) in any fiscal year or portion
thereof, the amount, if any, by which the aggregate normal operating
expenses of the Trust, including the gross investment advisory fee but
excluding interest, taxes, brokerage commissions, expenses of
registering and qualifying the Trust and its shares under Federal and
State laws, expenses of withholding taxes, and extraordinary expenses
for such fiscal year or portion thereof exceed .45 or 1% (or in the
case of a portion of a fiscal year, .0375 of 1% multiplied by the
number of calendar months in such period) of the average daily net
assets of the Trust for such period. This obligation does not include
any expenses incurred by shareholders who choose to avail themselves
of the Transfer Agent's sub-accounting facilities. Such reimbursement
will be accounted for and adjusted annually in accordance with
generally accepted accounting principles and any Rules and Regulations
of the Securities and Exchange Commission applicable thereto.
(c) The net advisory fee so accrued during each calendar month shall
be paid to Adviser on the last day of each month.
5. The term of this Contract shall begin on the date of its
execution and shall continue in effect for two years from its execution and
from year to year thereafter, subject to the provisions for termination and
all of the other terms and conditions hereof if: (a) such continuation
shall be specifically approved at least annually by the vote of a majority
of Trustees of the Trust, including a majority of the Trustees who are not
parties of this Contract or interested persons of any such party (other
than as Trustees of the Trust) cast in person at a meeting called for that
purpose; and (b) Adviser shall not have notified the Trust in writing at
least sixty (60) days prior to the anniversary date of this Contract in any
year thereafter that it does not desire such continuation.
6. Notwithstanding any provision in this Contract, it may be
terminated at any time, without the payment of any penalty, by the Trustees
of the Trust or by a vote of a majority of the outstanding voting
securities of the Trust on sixty (60) days' written notice to Adviser.
7. This Contract may not be assigned by Adviser and shall
automatically terminate in the event of any assignment. Adviser may employ
or contract with such other person, persons, corporation or corporations at
it's own cost and expense as it shall determine in order to assist it in
carrying out this Contract.
8. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of the obligations or duties under this
Contract on the part of the Adviser, Adviser shall not be liable to the
Trust or any shareholder for any act or omission in the course of or
connected in any way with rendering services or for any losses that may be
sustained in the purchase, holding or sale of any security.
9. This Contract may be amended at any time by agreement of the
parties, provided that the amendment shall be approved both by the vote of
a majority of the Trustees of the Trust, including a majority of the
Trustees who are not parties to this Contract or interested persons of any
such party to this Contract (other than as Trustees of the Trust) cast in
person at a meeting called for that purpose, and by the holders of a
majority of the outstanding voting securities of the Trust.
10. Adviser is hereby expressly put on notice of the limitation of
liability as set forth in Article XI of the Declaration of Trust and agrees
that liability as set forth in Article XI of the Declaration of Trust and
agrees that the obligations assumed by the Trust pursuant to this Contract
be limited in any case to the Trust and its assets and Adviser shall not
seek satisfaction of any such obligation from the shareholders of the
Trust, the Trustees, Officers, employees or agents of the Trust, or any of
them.
11. The Trust is hereby expressly put on notice of the limitation of
liability as set forth in the Declaration of Trust of the Adviser and
agrees that the obligations assumed by the Adviser pursuant to this
Contract shall be limited in any case to the Adviser and its assets and,
except to the extent expressly permitted by the Investment Company Act of
1940, the Trust shall not seek satisfaction of any such obligation from the
shareholders of the Adviser, the Trustees, officers, employees or agents of
the Adviser, or any of them.
12. This Contract shall be construed in accordance with and governed
by the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties have caused this Contract to be
executed on their behalf by their duly authorized officers and their seals
to be affixed hereto this 1st day of August, 1989.
Attest: FEDERATED RESEARCH
/s/ John W. McGonigle By: /s/ Mark L. Mallon
Secretary Vice President
Attest: FEDERATED RESEARCH
/s/ John W. McGonigle By: /s/ Edward C. Gonzales
Secretary Vice President
Exhibit 6 under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
MONEY MARKET TRUST
DISTRIBUTOR'S CONTRACT
This Agreement is entered into this 1st day of August, 1989, between
Money Market Trust (the `Fund''), an Massachusetts business trust, and
FEDERATED SECURITIES CORP. (`FSC''), a Pennsylvania corporation.
In consideration of the mutual covenants hereinafter contained, it is
hereby agreed by and among the parties hereto as follows:
1. The Fund hereby appoints FSC its agent to sell and distribute
shares of the Fund (`Shares'') at the current offering price thereof as
described and set forth in the current prospectus of the Fund.
2. The sale of Shares may be suspended with or without prior notice
whenever in the judgment of the Fund it is in its best interest to do so.
3. Neither FSC nor any other person is authorized by the Fund to
give any information or to make any representation relative to the Shares
other than those contained in the Registration Statement or Prospectus and
Statement of Additional Information filed with the Securities and Exchange
Commissions the same may be amended from time to time or in any
supplemental information to said Prospectus or Statement of Additional
Information approved by the Fund. FSC agrees that any other information or
representations, other than Shares through FSC may make in connection with
the offer or sale of Shares, shall be made entirely without liability on
the part of the Fund. FSC agrees that in offering or selling Shares as
agent of the Fund, it will, in all respects, duly conform to all applicable
state and Federal laws and the rules and regulations of the National
Association of Securities Dealers, Inc., including its Rules of Fair
Practice. FSC will submit to the Fund copies of all sales literature
before using the same and will not use much sales literature if disapproved
by the Fund.
4. This Agreement shall continue in effect for two years from the
date of its execution and thereafter for successive periods of one year if
such continuance is approved at least annually by the Trustees of the Fund
including a majority of the Trustees of the Fund who are not parties to
this Agreement or interested persons of any such party (other than as
Trustees of the Fund) cast in person at a meeting called for that purpose.
This Agreement may be terminated at any time by mutual consent of the Fund
and FSC.
5. This Agreement may not be assigned by FSC shall automatically
terminate in the event of any assignment as defined in the Investment
Company Act of 1940, provided, however, that FSC may employ such other
person, persons, corporation or corporations as it shall determine in order
to assist in it carrying out its duties under this Agreement.
6. FSC shall not be liable to the Fund or any shareholder of the
Fund for anything done or omitted by it, except acts or omissions involving
willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties imposed by this Agreement.
7. This Agreement may be amended at any time by mutual agreement in
writing of all the parties hereto, provided that such amendment is approved
by the Trustees of the Fund including a majority of the Trustees of the
Fund who are not parties to this Agreement or interested persons of any
2
such party (other than as Trustees of the Fund) cast in person at a meeting
called for that purpose.
8. This Agreement shall be construed in accordance with and governed
by the laws of the Commonwealth of Pennsylvania.
9. (a) Subject to the conditions set forth below, the Fund agrees
to indemnify and hold FSC and each person, if any, who controls FSC within
the meaning of Section 15 of the Securities Act of 1933 and Section 20 of
the Securities Exchange Act of 1934, as amended, against any and all loss,
liability, claim, damage and expense whatsoever (including but not limited
to any and all expenses whatsoever reasonably incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or
any claim whatsoever) arising out of or based upon any untrue statement or
alleged untrue statement of a material fact required to be stated therein
or necessary to make the statements therein not misleading, unless such
statement or omission was made in reliance upon and in conformity with
written information furnished to the Fund with respect to FSC by or on
behalf of FSC expressly for use in the Registration Statement or Prospectus
and Statement of Additional Information, or any amendment or supplement
thereof.
(b) If any action is brought against FSC or any controlling
person thereof in respect of which indemnity may be sought against the Fund
pursuant to subsection (a), FSC shall promptly notify the Fund in writing
of the institution of such action and the Fund shall assume the defense of
such action, including the employment of counsel selected by the Fund and
payment of expenses. FSC or any such controlling person thereof shall have
the right to employ separate counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of FSC or such controlling
person unless the employment of such counsel shall have been authorized in
3
writing by the Fund in connection with the defense of such action or the
Fund shall not have employed counsel to have charge of the defense of such
action, in any of which events such fees and expenses shall be borne by the
Fund. Anything in this paragraph to the contrary notwithstanding, the Fund
shall not be liable for any settlement of any such claim or action effected
without its written consent. The Fund agrees promptly to notify FSC of the
commencement of any litigation or proceedings against the Fund or any of
its officers or Trustees or controlling persons in connection with the
issue and sale of Shares or in connection with such Registration Statement
or Prospectus and Statement of Additional Information.
(c) FSC agrees to indemnify and hold harmless the Fund, each of
its Trustees, each of its officers who have signed the Registration
Statement and each other person, if any, who controls the Fund within the
meaning of Section 15 of the Securities Act of 1933, but only with respect
to statements or omissions, if any, made in the Registration Statement or
Prospectus and Statement of Additional Information or any amendment or
supplement thereof in reliance upon, and in conformity with, information
furnished to the Fund with respect to FSC by or on behalf of FSC expressly
for use in the Registration Statement or Prospectus and Statement of
Additional Information or any amendment or supplement thereof. In case any
action shall be brought against the Fund or any other person so indemnified
based on the Registration Statement or Prospectus and Statement of
Additional Information, or any amendment or supplement thereof, and in
respect of which indemnity may be sought against FSC, FSC shall have the
rights and duties given to the Fund, and the Fund and each other person so
indemnified shall have the rights and duties given to FSC by the provisions
of subsection (b) above.
(d) Nothing herein contained shall be deemed to protect any
person against liability to the Fund or its shareholders to which such
4
person would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of the duties of such person
or by reason of the reckless disregard by such person of the obligations
and duties of such person under this Agreement.
(e) Insofar as indemnification for liabilities may be permitted
pursuant to Section 17 of the Investment Company Act of 1940 for FSC or
Trustees, officers and controlling persons of the Fund by the Fund pursuant
to this Agreement, the Fund is aware of the position of the Securities and
Exchange Commission as set forth in the Investment Company Act Release No.
IC-11330. Therefore, the Fund undertakes that in addition to complying
with the applicable provisions of this Agreement, in the absence of a final
decision on the merits by a court or other body before which the proceeding
was brought, that an indemnification payment will not be made unless in the
absence of such a decision, a reasonable determination based upon factual
review has been made (i) by a majority vote of a quorum of non-party
Trustees who are not interested persons of the Fund or (ii) by independent
legal counsel in a written opinion that the indemnitee was not liable for
an act of willful misfeasance, bad faith, gross negligence or reckless
disregard of duties. The Fund further undertakes that advancement of
expenses incurred in the defense of a proceeding (upon undertaking for
repayment unless it is ultimately determined that indemnification is
appropriate) against FSC or an officer, Trustee or controlling person of
the Fund will not be made absent the fulfillment of at least one of the
following conditions: (i) the indemnitee provides security for his
undertaking; (ii) the Fund is insured against losses arising by reason of
any lawful advances; or (iii) a majority of a quorum of disinterested non-
party Trustees or independent legal counsel in a written opinion makes a
factual determination that there is reason to believe the indemnitee will
be entitled to indemnification.
5
10. FSC is hereby expressly put on notice of the limitation of
liability as set forth in Article XI of the Declaration of Trust of the
Fund and agrees that the obligations assumed by the Fund pursuant to this
Agreement shall be limited in any case to the Fund and its assets and FSC
shall not seek satisfaction of any such obligation from the shareholders of
the Fund, the Trustees, officers, advisers, employees or agents of the
Fund, or any of them.
IN WITNESS WHEREOF, this Agreement has been duly executed on the day
and year first above written.
ATTEST: FEDERATED SECURITIES CORP.
/s/ S. Elliot Cohan By: /s/ Richard B. Fisher
Secretary President
(SEAL)
ATTEST: MONEY MARKET TRUST
/s/ John W. McGonigle By: /s/ J. Christopher Donahue
Secretary Vice President
(SEAL)
Exhibit 99 under Form N-1A
Exhibit 16 under Item 601/Reg. S-K
SCHEDULE FOR COMPUTATION OF YIELD CALCULATION
This example illustrates the yield quotation for the seven-day period ended
July 31, 1988:
Value of a hypothetical pre-existing
account with exactly one share at
the beginning of the base period $1.000000000
Value of same account (excluding
capital changes) at end of the
seven-day base period* 1.001383932
Net change in account value 0.001383932
Base Period Return:
Net change in account value
divided by the beginning account
value ($0.001383932 / $1.000000000) 0.001383932
Annualized Current Net Yield
[0.001383932 x (365/7)] 7.22%
This value includes the value of additional shares purchased with
dividends from the original share, and dividends declared on both the
original share and any such additional shares.
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 001
<NAME> Money Market Trust
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Jul-31-1996
<PERIOD-END> Jul-31-1996
<INVESTMENTS-AT-COST> 512,882,858
<INVESTMENTS-AT-VALUE> 512,882,858
<RECEIVABLES> 4,828,399
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 517,711,257
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,024,049
<TOTAL-LIABILITIES> 4,024,049
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 513,687,208
<SHARES-COMMON-STOCK> 513,687,208
<SHARES-COMMON-PRIOR> 507,271,695
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 513,687,208
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 27,315,673
<OTHER-INCOME> 0
<EXPENSES-NET> 2,200,532
<NET-INVESTMENT-INCOME> 25,115,141
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 25,115,141
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 25,115,141
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,528,203,824
<NUMBER-OF-SHARES-REDEEMED> 2,526,087,334
<SHARES-REINVESTED> 4,299,023
<NET-CHANGE-IN-ASSETS> 6,415,513
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,925,061
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,829,473
<AVERAGE-NET-ASSETS> 481,265,392
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.050
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> 0.050
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 0.46
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
