1933 Act File No. 33-
1940 Act File No. 811-3947
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FEDERATED U.S. GOVERNMENT SECURITIES FUND:1-3 YEARS
(formerly, Federated Short-Intermediate Government Trust)
(Exact Name of Registrant as Specified in Charter)
(412) 288-1900
(Area Code and Telephone Number)
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
(Address of Principal Executive Offices)
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 thirty days
after it is filed pursuant to Rule 488.
(Approximate Date of Proposed Public Offering)
Registrant has filed with the Securities and Exchange Commission a
declaration pursuant to Rule 24f-2 under the Investment Company Act of
1940 that it elects to register an indefinite amount of securities under
the Securities Act of 1933. During the most recent fiscal year ended
February 28, 1995, Registrant 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. This is reflected in
Registrant's Post-Effective Amendment No. 24 to its Registration
Statement on Form N-1A (1933 Act No. 2-89028) filed on April 13, 1995.
Therefore, a filing fee will not be submitted because of the
Registrant's reliance on Rule 24f-2.
CROSS-REFERENCE SHEET
Pursuant to Item 1(a) of Form N-14 Showing Location in
Prospectus of Information Required by Form N-14
Item of Part A of Form N-14 and Caption Caption or Location in
Prospectus
1. Beginning of Registration Statement
and Outside Front Cover Page
of Prospectus.......................... Cross-Reference Sheet;
Cover Page
2. Beginning and Outside Back Cover
Page of Prospectus.................... Table of Contents
3. Synopsis Information and Risk Factors. Summary; Comparison of
Investment Policies and
Risk Factors
4. Information About the Transaction..... Information About the
Reorganization
5. Information About the Registrant...... Information About the
Acquiring Fund, Federated
U.S. Government Securities
Fund: 1-3 Years
6. Information About the Company
Being Acquired........................ Information About the
Acquired Fund, Sunburst
Short-Intermediate
Government Bond Fund
7. Voting Information.................... Voting Information
8. Interest of Certain Persons
and Experts........................... Not Applicable
9. Additional Information Required
for Reoffering by Persons Deemed
to be Underwriters.................... Not Applicable
Item of Part B of Form N-14 and Caption Caption or Location in
Statement
of Additional Information
10. Cover Page .......................... Cover Page
11. Table of Contents ................... Table of Contents
12. Additional Information About the
Registrant.......................... Statement of Additional
Information of Federated
U.S. Government Securities
Fund: 1-3 Years, dated
April 30, 1995
13. Additional Information About the
Company Being Acquired............... Statement of Additional
Information of Sunburst
Short-Intermediate
Government Fund, dated
January 31, 1995
14. Financial Statements................. Annual Reports of
Registrant and Company
Being Acquired
SUNBURST FUNDS
Federated Investors
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS
OF SUNBURST SHORT-INTERMEDIATE GOVERNMENT BOND FUND
A Special Meeting of Shareholders of Sunburst Short-Intermediate
Government Bond Fund (the "Acquired Fund") will be held at 2:00 p.m. on
June 29, 1995, at the offices of the Acquired Fund, Federated Investors
Tower, 19th Floor, Pittsburgh, Pennsylvania 15222-3779 for the following
purposes:
1. To approve or disapprove a proposed Agreement and Plan of
Reorganization between the Acquired Fund and Federated U.S.
Government Securities Fund: 1-3 Years (formerly, Federated
Short-Intermediate Government Trust) ("Federated Fund"),
dated April 13, 1995, whereby Federated Fund would acquire
all of the assets of the Acquired Fund in exchange for
Institutional Shares of Federated Fund to be distributed pro
rata by the Acquired Fund to its shareholders in complete
liquidation and dissolution of the Acquired Fund; and
2. To transact such other business as may properly come before
the meeting or any adjournment thereof.
By Order of the Board of Trustees,
John W. McGonigle
Secretary
Dated: May 25, 1995
SHAREHOLDERS OF RECORD AT THE CLOSE OF BUSINESS ON MAY 16, 1995, ARE
ENTITLED TO VOTE AT THE MEETING. WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING, PLEASE SIGN AND RETURN THE ENCLOSED PROXY CARD. YOUR VOTE IS
IMPORTANT.
TO SECURE THE LARGEST POSSIBLE REPRESENTATION AND TO SAVE THE EXPENSE OF
FURTHER MAILINGS, PLEASE MARK YOUR PROXY CARD, SIGN IT, AND RETURN IT IN
THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES. YOU MAY REVOKE YOUR PROXY AT ANY TIME AT OR BEFORE THE MEETING
OR VOTE IN PERSON IF YOU ATTEND THE MEETING.
SUNBURST SHORT-INTERMEDIATE GOVERNMENT BOND FUND
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Dear Shareholder:
The Board of Trustees and management of Sunburst Funds (the "Trust"), on
behalf of its only portfolio, Sunburst Short-Intermediate Government
Bond Fund (the "Acquired Fund"), are pleased to submit for your vote a
proposal to transfer all of the Acquired Fund's assets to Federated U.S.
Government Securities Fund: 1-3 Years (formerly, Federated Short-
Intermediate Government Trust) ("Federated Fund"). The Federated Fund
has the same investment objective and substantially similar investment
policies as the Acquired Fund. As part of the transaction, shareholders
in the Acquired Fund would receive Institutional Shares in the Federated
Fund equal in value to their shares in the Acquired Fund and the
Acquired Fund would be dissolved.
The Board of Trustees of the Trust, as well as Sunburst Bank,
Mississippi, the Acquired Fund's investment adviser, believe the
proposed Agreement and Plan of Reorganization is in the best interests
of the Acquired Fund shareholders. Since the Acquired Fund began
operations in November 1993, two factors have worked against its
success: the bond market has experienced one of the worst periods for
total return, and the growth of the Acquired Fund's assets have not met
expectations. The Acquired Fund's net asset value per share has dropped
from an initial $10 per share to $9.41 on January 31, 1995, and the
total net assets were slightly under $10.5 million on January 31, 1995.
(As of March 31, 1995, the net asset value per share was $9.54, and net
assets were $8.6 million.) In addition, there are expectations of no
further growth and possibly continuing asset dissipation due to various
factors associated with the merger of Union Planters Corporation and
Grenada Sunburst System Corporation, the current and former parents of
the Acquired Fund's investment adviser. We believe the proposed
Agreement and Plan of Reorganization offers shareholders of the Acquired
Fund the opportunity to pursue the same investment objective under
substantially similar investment policies in the Federated Fund, which
has a lower expense ratio due to improved economies of scale, and does
not impose any sales charge on share investments.
We believe the transfer of the Acquired Fund's assets in this
transaction will present an excellent investment opportunity for our
shareholders. Your vote on the transaction is critical to its success.
The transfer will be effected only if approved by a majority of the
Acquired Fund's outstanding shares on the record date voted in person or
represented by proxy. We hope you share our enthusiasm and will
participate by casting your vote in person, or by proxy if you are
unable to attend the meeting. Please read the enclosed Prospectus/Proxy
Statement carefully before you vote. If you have any questions, please
feel free to call us at 1-800-467-2506.
Thank you for your prompt attention and participation.
Sincerely,
SUNBURST FUNDS
Edward C. Gonzales
Vice-President
PROSPECTUS/PROXY STATEMENT
MAY 25, 1995
Acquisition of the Assets of
SUNBURST SHORT-INTERMEDIATE GOVERNMENT BOND FUND,
a portfolio of Sunburst Funds
By and in exchange for Institutional Shares of
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 1-3 YEARS
(formerly, Federated Short-Intermediate Government Trust)
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
This Prospectus/Proxy Statement describes the proposed Agreement and Plan of
Reorganization ("Agreement"), dated April 13, 1995, whereby Federated U.S.
Government Securities Fund: 1-3 Years (formerly, Federated Short-Intermediate
Government Trust) ("Federated Fund"), would acquire all of the assets of
Sunburst Short-Intermediate Government Bond Fund ("Acquired Fund"), a
portfolio of Sunburst Funds ("Trust"), in exchange for Institutional Shares
("Shares") of Federated Fund to be distributed pro rata by the Acquired Fund
to its shareholders in complete liquidation and dissolution of the Acquired
Fund. As a result of the Agreement, each shareholder of the Acquired Fund
will become the owner of Institutional Shares having a total value equal to
the total value of his or her holdings in the Acquired Fund. The Acquired
Fund and Federated Fund may be individually or collectively referred to as a
"Fund" or the "Funds."
Each Fund is an open-end, management investment company, whose investment
objective is to provide current income. The Acquired Fund imposes a maximum
sales charge of 1.00% on share purchases, but waives such sales charge for
trust customers and employees of various affiliates of Sunburst Bank,
Mississippi. Subject to certain waivers, there is a minimum initial
investment in the Acquired Fund of $1,000. In comparison, Shares of the
Federated Fund are sold without any sales charge primarily to accounts for
which financial institutions act in a fiduciary or agency capacity, or other
accounts where the financial institution maintains master accounts with an
aggregate investment of at least $400 million in certain funds advised or
distributed by affiliates of Federated Investors. The minimum initial
investment of $25,000 for Shares of the Federated Fund may be lowered for
accounts established through a non-affiliated bank or broker. The investment
policies and restrictions of the Funds are substantially similar, although the
Acquired Fund reserves the right to invest in mortgage-backed and asset-backed
securities and warrants, and to engage in futures contracts, options, and
loans of its portfolio securities. For a comparison of the investment
policies of the Federated Fund and the Acquired Fund, see "Summary of the
Reorganization and the Funds."
This Prospectus/Proxy Statement should be retained for future reference. It
sets forth concisely the information about the Federated Fund that a
prospective investor should know before investing. The Prospectus of the
Federated Fund, dated April 30, 1995, and its Annual Report, dated February
28, 1995, are incorporated by reference, and are included as part of this
Prospectus/Proxy Statement. In addition, the Prospectus of the Acquired Fund,
dated January 31, 1995, as supplemented on March 2, 1995, and its Annual
Report, dated September 30, 1994, are incorporated by reference, and may be
obtained without charge by writing the Trust or the Federated Fund at the
address shown above or by calling 1-800-467-2506. Additional information
about the Funds is contained within the Statement of Additional Information,
dated May 25, 1995, to this Prospectus/Proxy Statement. The Statement of
Additional Information has been filed with the Securities and Exchange
Commission, is incorporated by reference, and may be obtained without charge
by writing the Federated Fund at the address shown above or by calling 1-800-
235-4669.
TABLE OF CONTENTS
Summary of Expenses.....................................................
..................2
Summary of the Reorganization and the Funds 4
Information About the Reorganization. 8
Additional Information About the Funds 11
Voting Information. 12
Agreement and Plan of Reorganization. Exhibit A
Prospectus of Federated U.S. Government Securities Fund: 1-3
Years......................................................Exhibit B
Annual Report of Federated U.S. Government Securities Fund: 1-3 Years
..............................................Exhibit C
THE SHARES OFFERED BY THIS PROSPECTUS/PROXY STATEMENT ARE NOT DEPOSITS OR
OBLIGATIONS OF ANY BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK, AND ARE
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD, OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN THE FUNDS INVOLVES
INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
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.
SUMMARY OF EXPENSES
Federated Fund
Institutional SharesAcquired Fund
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price)................... None 1.00%
Maximum Sales Charge Imposed on Reinvested Dividends
(as a percentage of offering price) None None
Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds, as applicable) None
None
Redemption Fees (as a percentage of amount redeemed,
if applicable) None None
Exchange Fee None None
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
Management Fees (after waiver) (1) 0.38% 0.00%
12b-1 Fees (2) None 0.00%
Other Expenses (after waiver) (3) 0.16% 0.95%
Shareholder Services Fee (after waiver) (4) ............... 0.00%
None
Total Operating Expenses (5) 0.54% 0.95%
(1) The management fees have been reduced to reflect voluntary waivers.
The advisers can terminate their voluntary waivers at any time at their
sole discretion. The maximum management fee is 0.40% for the Federated
Fund, and 0.74% for the Acquired Fund.
(2) The Acquired Fund can pay up to 0.25% as a 12b-1 Fee to the
distributor. However, the Acquired Fund is not paying or accruing 12b-1
Fees, nor will it pay or accrue such fees unless it were to create a
separate class of share for certain institutional investors.
(3) Other Expenses of the Acquired Fund have been reduced to reflect the
voluntary waiver of the administration fee and the voluntary reimbursement
of expenses by the adviser. The administrator and adviser can terminate
this voluntary waiver and reimbursement at any time at their sole
discretion.
(4) The maximum Shareholder Services Fee for the Federated Fund is 0.25%.
(5) The Total Operating Expenses of 0.54% for Institutional Shares of the
Federated Fund are based on expenses expected during the fiscal year ending
February 29, 1996; the Total Operating Expenses were 0.54% for the fiscal
year ended February 28, 1995 and would have been 0.56% absent the voluntary
waiver of a portion of the management fee. Total Operating Expenses for
the Acquired Fund were 2.72% for the fiscal year ended September 30, 1994,
absent the voluntary waiver and reimbursement by the adviser and the
voluntary waiver by the administrator described in notes (1) and (3) above.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder will bear, either directly or
indirectly. For more complete descriptions of the various costs and expenses,
see "Trust Information" and "Investing in Institutional Shares" in the
Federated Fund's prospectus and ""Fund Information" and "Investing in the
Fund" in the Acquired Fund's prospectus. Wire-transferred redemptions of less
than $5,000 may be subject to additional fees.
EXAMPLE
You would pay the following expenses on a $1,000 investment
assuming (1) 5% annual return and (2) redemption at the end Federated
Fund
of each time period. Institutional Shares Acquired
Fund
1 Year $6 $20
3 Years $17 $40
5 Years $30 $62
10 Years $68 $125
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
THE EXAMPLE FOR THE ACQUIRED FUND IS BASED ON DATA FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1994. THE EXAMPLE FOR THE FEDERATED FUND IS BASED ON DATA FOR
THE FISCAL YEAR ENDED FEBRUARY 28, 1995.
The information set forth in the foregoing table and example relates only to
the Institutional Shares of Federated Fund. The Federated Fund also offers
another class of shares called Institutional Service Shares. Institutional
Shares and Institutional Service Shares are subject to the same expenses;
however, Institutional Service Shares are subject to a 12b-1 Fee of up to
0.25%.
SUMMARY OF THE REORGANIZATION AND THE FUNDS
About the Proposed Reorganization
The Boards of Trustees of Sunburst Funds (the "Trust") has voted to
recommend to the shareholders of Sunburst Short-Intermediate Government
Bond Fund (the "Acquired Fund"), a portfolio of the Trust, the approval
of an Agreement and Plan of Reorganization (the "Agreement"), dated
April 13, 1995, whereby the Federated U.S. Government Securities Fund: 1-
3 Years (the "Federated Fund") would acquire all of the assets of the
Acquired Fund in exchange for Institutional Shares ("Shares") of the
Federated Fund to be distributed pro rata by the Acquired Fund to its
shareholders in complete liquidation and dissolution of the Acquired
Fund (the "Reorganization"). A copy of the Agreement is attached to
this Prospectus/Proxy Statement and designated as Exhibit A. As a
result of the Reorganization, each shareholder of the Acquired Fund will
become the owner of Shares of the Federated Fund having a total value
equal to the total value of his or her holdings in the Acquired Fund on
the closing date of the Reorganization, which is currently scheduled for
June 30, 1995.
As a condition to the Reorganization, the Trust and the Federated Fund
will receive an opinion of counsel that the Reorganization will be
considered a tax-free "reorganization" under applicable provisions of
the Internal Revenue Code of 1986, as amended, so that no gain or loss
will be recognized by the Acquired Fund or its shareholders. The tax
cost basis of the Federated Fund Shares received by the Acquired Fund
shareholders will be the same as the tax cost basis of their shares in
the Acquired Fund.
After the Reorganization is completed, the Acquired Fund will dissolve
as a portfolio of the Trust. The Trust will then deregister as an
investment company under the Investment Company Act of 1940.
Investment Objective and Policies
The Funds have the same investment objective of current income which
they pursue by investing in a portfolio of U.S. government securities
with comparable maturity ratings. While the Acquired Fund holds a
portfolio of U.S. government securities with a dollar-weighted average
maturity of two to five years, the Federated Fund acquires U.S.
government securities with remaining maturities of no more than three
and one-half years, and maintains an overall dollar-weighted average
portfolio maturity of one to three years. Unlike the Federated Fund,
the Acquired Fund reserves the right to invest in mortgage-backed and
asset-backed securities and warrants, can engage in futures contracts
and options, and may lend its portfolio securities. For additional
information, see "Comparison of Investment Policies and Risk Factors"
below.
Advisory Fees and Expense Ratios
The investment adviser to the Federated Fund is Federated Management, a
subsidiary of Federated Investors, which currently makes investment
decisions for various investment companies in the Federated Investors
complex. Federated Management is a Delaware business trust and is a
registered investment adviser under the Investment Advisers Act of 1940.
Federated Management and other subsidiaries of Federated Investors serve
as investment advisers to a number of investment companies and private
accounts. Certain other subsidiaries also provide administrative
services to a number of investment companies. Total assets under
management or administration by these and other subsidiaries of
Federated Investors are approximately $70 billion. Federated Investors
was founded in 1956 and develops and manages mutual funds primarily for
the financial industry. Federated Management is entitled to receive an
annual investment advisory fee equal to 0.40% of the Federated Fund's
average daily net assets, which may be voluntarily waived in whole or
part.
The investment adviser to the Acquired Fund is Sunburst Bank,
Mississippi, a wholly-owned subsidiary of Union Planters Corporation, a
bank holding company and savings and loan holding company. Sunburst
Bank, Mississippi, may receive an annual investment advisory fee of up
to 0.74% of the Acquired Fund's average daily net assets. Sunburst
Bank, Mississippi, may voluntarily choose to waive all or a portion of
its fee or reimburse the Acquired Fund for certain other expenses of the
Acquired Fund, but reserves the right to terminate such waiver or
reimbursement at any time at its sole discretion.
The Federated Fund's total operating expenses for its fiscal year ended
February 28, 1995, were 0.54%, which also is the estimated expenses for
its fiscal year ending February 29, 1996. These expenses include a
0.38% management (advisory) fee, which reflects a voluntary reduction of
0.02% from the maximum 0.40% fee, and total other expenses of 0.16%.
See the "Summary of Expenses" table above for more information.
In comparison, the Acquired Fund's total operating expenses are 0.95%
for its fiscal year ended September 30, 1994, which reflects a complete
waiver of the management (advisory) fee, a waiver of certain other fees
and a reimbursement of certain expenses. Absent the waivers and
reimbursements, the Acquired Fund's total operating expenses would have
equaled 2.72%. See the "Summary of Expenses" table above for more
information.
Distribution Arrangements
Federated Securities Corp. ("FSC" or "distributor"), a subsidiary of
Federated Investors, is the principal distributor of shares of the
Funds.
As mentioned above, the Acquired Fund has established a distribution
plan ("12b-1 Plan") adopted in accordance with Rule 12b-1 under the
Investment Company Act of 1940 ("1940 Act"), which permits the Acquired
Fund to pay FSC an amount computed at an annual rate of 0.25% of its
average daily net asset value of shares to finance any activity which is
principally intended to result in the sale of shares, although the
Acquired Fund has no present intention of paying or accruing such fees
for its fiscal year ending September 30, 1995.
The Institutional Shares of Federated Fund are not subject to a
12b-1 Plan, although the Federated Fund has established a distribution
plan for its Institutional Service Shares. However, any fees paid under
this distribution plan are incurred only by Institutional Services
Shares and NOT by Institutional Shares.
Administrative Services
Federated Administrative Services ("FAS"), a subsidiary of Federated
Investors, provides certain administrative personnel and services
necessary to operate the Funds. FAS provides substantially identical
services to the Funds at the same annual rate of 0.15% of the first $250
million of average daily net assets, 0.125% on the next $250 million,
0.10% on the next $250 million, and 0.075% on assets in excess of $750
million. However, the annual FAS fee charged to the Federated Fund is
based on the average aggregate daily net assets of all funds advised by
subsidiaries of Federated Investors, and is a minimum of $125,000 per
portfolio and $30,000 per each additional class. In comparison, the
annual FAS fee charged to the Acquired Fund is based on the Acquired
Fund's average aggregate daily net assets, and is a minimum of $120,000.
See the "Administrative Services" section in each Fund's respective
prospectus.
Shareholder Services
The Federated Fund has adopted a Shareholder Services Plan (the
"Services Plan") under which it may make payments of up to 0.25% of the
average daily net asset value of the Federated Fund to obtain certain
personal services for shareholders and the maintenance of shareholder
accounts ("shareholder services"). The Federated Fund has entered into
a Shareholder Services Agreement with Federated Shareholder Services, a
subsidiary of Federated Investors, under which Federated Shareholder
Services will either perform shareholder services directly or will
select financial institutions to perform shareholder services. See the
"Shareholder Services Plan" in the Federated Fund prospectus.
The Acquired Fund has no shareholder services plan.
Custodian
State Street Bank and Trust Company, Boston Massachusetts, is custodian
for the securities and cash of the Federated Fund. The Fifth Third
Bank, Cincinnati, Ohio, is custodian for the securities and cash of the
Acquired Fund.
Transfer and Dividend Disbursing Agent
Federated Services Company, a subsidiary of Federated Investors, is
transfer agent and dividend disbursing agent for both Funds.
Independent Auditors
Ernst & Young LLP, Pittsburgh, Pennsylvania is the independent auditor
for the Federated Fund. KPMG Peat Marwick LLP, Pittsburgh, Pennsylvania
is the independent auditor for the Acquired Fund.
Purchase and Redemption Procedures
Shares of the Federated Fund are sold on days when the New York Stock
Exchange is open for business. Shares may be purchased either by wire
or mail. Shares are sold at their net asset value next determined
after an order is received. The Federated Fund imposes no sales charge
on purchases of Shares.
Shares of the Federated Fund are redeemed at their net asset value next
determined after the Federated Fund receives the redemption request.
Redemptions will be made on days on which the Federated Fund computes
its net asset value. Redemption requests must be received in proper
form and can be made by telephone request or written request.
Reference is made to the Federated Fund-Institutional Shares' Prospectus
dated April 30, 1995, for a complete description of the purchase and
redemption procedures applicable to Shares of the Federated Fund.
Shares of the Acquired Fund are sold on days when the New York Stock
Exchange, the Federal Reserve Wire System and Sunburst Bank,
Mississippi, are open for business. Shares may be purchased through the
Trust Divisions of Sunburst Bank, Mississippi, or Sunburst Bank,
Louisiana, (collectively "Sunburst Banks"), or through Sunburst
Financial Group, Inc. Shares are sold at their next net asset value
determined after an order is received, plus a sales charge of 1% of the
public offering price. However, trust and fiduciary customers of
Sunburst Banks may purchase shares of the Acquired Fund at net asset
value, without any sales charge. In addition, shares of the Acquired
Fund may be purchased without any sales charge by certain investors who
are using the redemption proceeds from shares of another mutual fund for
which a sales charge was incurred.
Shares of the Acquired Fund are redeemed at their net asset value next
determined after Sunburst Banks, Sunburst Financial Group, Inc. or the
distributor receives the redemption request. Redemptions will be made
on days when the Acquired Fund computes its net asset value. Redemption
requests must be received in proper form, and can be made by a
shareholder in person, by telephone, or by writing.
Reference is made to the Acquired Fund's Prospectus dated January 31,
1995, as supplemented March 2, 1995, for a complete description of the
purchase and redemption procedures applicable to the Acquired Fund.
Exchange Privileges
Neither Fund offers exchange privileges.
Comparison of Investment Policies and Risk Factors
Both Funds have the same investment objective: to provide current
income. Their investment objective cannot be changed without approval
of their respective shareholders. Both Funds are fluctuating net asset
value, open-end, management investment companies (mutual funds).
The Federated Fund pursues its investment objective by investing in U.S.
government securities with remaining maturities of three and one-half
years or less. This investment policy cannot be changed without
shareholder approval. However, as a matter of investment practice,
which can be changed without shareholder approval, the Federated Fund
will maintain an overall dollar-weighted average portfolio maturity of
one to three years. Specifically, the Federated Fund is permitted to
invest in direct obligations of the U.S. Treasury such as U.S. Treasury
bills, notes and bonds; and obligations of various U.S. government
agencies or instrumentalities. In addition, the Federated Fund may
purchase securities subject to repurchase agreements or on a when-issued
or delayed-delivery basis.
The Acquired Fund pursues its investment objective by investing
primarily in a diversified portfolio of U.S. government securities.
Under normal circumstances, the Acquired Fund invests at least 65% of
its total assets in U.S. government bonds. In addition, the Acquired
Fund maintains a dollar-weighted average portfolio maturity between two
and five years. Specifically, the Acquired Fund is permitted to invest
in U.S. government securities, including zero coupon bonds; certain
mortgage-backed securities, including adjustable rate mortgage-backed
securities and collateralized mortgage obligations; asset-backed
securities; domestic issues of corporate debt obligations, including
zero coupon bonds; and money market instruments. The Acquired Fund's
corporate investments are rated in the top three ratings (A or better)
by Moody's Investors Services, Inc., Standard & Poor's Ratings Group, or
Fitch Investors Services, Inc., or if unrated will be of comparable
quality as determined by the Acquired Fund's investment adviser. In
addition, the Acquired Fund may purchase securities subject to
repurchase agreements or on a when-issued or delayed-delivery basis,
lend portfolio securities on a long-term or short-term basis, invest in
securities of other investment companies, invest in restricted
securities, write covered call options, invest in warrants, and engage
in futures contracts.
The principal difference between the Federated Fund and the Acquired
Fund (other than the shorter maturity range of investments of the
Federated Fund) is that the Acquired Fund's investment may include
corporate investments, and mortgage-backed and asset-backed securities.
These securities entail credit risk, which is the risk that the issuer
of the securities may not be able to repay principal and interest. This
type of risk is generally less for securities issued or guaranteed by
the U.S. government, its agencies and instrumentalities. In addition,
mortgage-backed and asset-backed securities entail the additional risk
of prepayment. When interest rates decrease, the mortgage and assets
underlying the outstanding securities owned by the Acquired Fund may be
prepaid faster. As a result, the Acquired Fund receives its principal
back sooner and must reinvest the principal at a time when market
interest rates are lower. Conversely, when interest rates increase, the
principal may be prepaid more slowly. As a result, the Acquired Fund
may not receive its principal back on the expected schedule and lose the
opportunity to reinvest it when the market interest rates are higher.
In addition, certain of the Acquired Fund's other permissible
investments (such as options, futures, securities loans and warrants)
traditionally entail greater risks. However, historically, the Acquired
Fund has not engaged or invested in options, futures, securities loans,
or warrants.
Both the Federated Fund's and the Acquired Fund's investment objective,
policies and restrictions are more fully described in their respective
Prospectuses and Statements of Additional Information. See Exhibit B
for the Federated Fund-Institutional Shares' Prospectus. Copies of the
Acquired Fund's Prospectus and the Statement of Additional Information
to this Prospectus/Proxy Statement (which includes and incorporates by
reference the Statement of Additional Information of each Fund) are
available upon request by shareholders at no charge. See "Additional
Information About the Funds" below.
INFORMATION ABOUT THE REORGANIZATION
Background and Reasons for the Proposed Acquisition
The Acquired Fund was organized in 1993 in order to provide an
investment vehicle that pursues current income. Since that time the
bond market has experienced one of the worst historical periods for
total return. Because of this, the Acquired Fund's net asset value per
share has dropped from an initial net asset value of $10 per share to
$9.41 per share on January 31, 1995. (As of March 31, 1995, the net
asset value per share was $9.54.) Both the Board of Trustees of the
Trust and the Acquired Fund's investment adviser are concerned about the
relatively small amount of total assets invested in the Acquired Fund
and the relatively high level of operating expenses sustained by it. As
of January 31, 1995, the Acquired Fund's net assets were just under
$10.5 million. (As of March 31, 1995, the Acquired Fund's net assets
were $8.6 million.) In addition, there are expectations of no immediate
further growth and possible further asset dissipation due to factors
associated with the January 1, 1995 merger of Union Planters Corporation
and Grenada Sunburst Systems Corporation, the current and former parents
of the Acquired Fund's investment adviser. In addition, the voluntary
waiver of advisory, administrative and other fees, and the voluntary
reimbursement of expenses to maintain a competitive expense ratio and
yield for the Acquired Fund has been a financial burden on the various
service providers to the Acquired Fund.
In this setting, the Trustees of the Trust are proposing the transfer of
all of the Acquired Fund's assets to the Federated Fund. In connection
with this proposal, the Trustees of the Trust considered the
comparatively larger asset size of the Federated Fund, and determined
that the combination of the Acquired Fund and the Federated Fund could
enable shareholders of the Acquired Fund to benefit from certain
economies of scale due to the larger asset base. The Trustees of the
Trust also considered the lower expense ratio (both before and after any
waivers and reimbursements) of the Federated Fund as compared to the
Acquired Fund, and the fact that the Reorganization is conditioned upon
obtaining an opinion of counsel that it would be a tax-free transaction.
On February 16, 1995, the Trustees of the Trust and of Federated Fund
each met to discuss the above information, as well as the terms and
conditions of the proposed Reorganization and Agreement. Since the
Trust and the Federated Fund may be deemed affiliates of one another
because they have a common board of trustees and certain of the same
officers, the Trustees of each Fund unanimously approved the proposed
Reorganization under Rule 17a-8 under the 1940 Act. In accordance with
this Rule, each Board determined that participation in the transaction
is in the best interests of their respective Fund and that the interests
of existing shareholders of the respective Fund will not be diluted as a
result of the reorganization. Both Boards also approved the Agreement,
as described below.
Description of the Agreement and Plan of Reorganization
The Agreement provides that the Acquired Fund will discharge all of its
liabilities and the Federated Fund will acquire all of the assets of the
Acquired Fund in exchange for Shares of the Federated Fund to be
distributed PRO RATA by the Acquired Fund to its shareholders in
complete liquidation and dissolution of the Acquired Fund, on or about
June 30, 1995 (the scheduled closing date).
Consummation of the Reorganization is subject to the conditions set
forth in the Agreement, including receipt of an opinion of counsel in
form and substance satisfactory to the Trust and the Federated Fund, as
described under the caption "Federal Income Tax Consequences" below.
The Agreement may be terminated and the Reorganization may be abandoned
at any time before or after approval of shareholders of the Acquired
Fund, but prior to the closing date, by either party if it believes that
consummation of the Reorganization would not be in the best interests of
shareholders.
The investment adviser of the Acquired Fund is responsible for the
payment of all expenses of the Reorganization incurred by either party,
whether or not the Reorganization is consummated. Such expenses
include, but are not limited to, legal fees, registration fees, transfer
taxes (if any), the fees of banks and transfer agents and the costs of
preparing, printing, copying, and mailing proxy solicitation materials
to the Acquired Fund's shareholders and the costs of holding the Special
Meeting of Shareholders.
The foregoing description of the Agreement entered into between the
Federated Fund and the Trust, on behalf of the Acquired Fund, is
qualified in its entirety by terms and provisions of the Agreement, a
copy of which is attached hereto as Exhibit A and is incorporated by
reference.
Description of Shares of Federated Fund
Shares of the Federated Fund to be issued to shareholders of the
Acquired Fund under the Agreement will be fully paid and nonassessable
when issued and transferable without restrictions and will have no
preemptive or conversion rights. The Declaration of Trust of the
Federated Fund permits it to offer separate series of shares
representing interests in separate portfolios of securities. The shares
in any one portfolio may be offered in separate classes. Currently, the
Trustees of the Federated Fund have established two classes of shares:
Institutional Shares and Institutional Service Shares. Institutional
Shares are sold primarily to accounts for which financial institutions
act in a fiduciary or agency capacity, or other accounts where the
financial institution maintains master accounts with an aggregate
investment of at least $400 million in certain funds which are advised
or distributed by affiliates of Federated Investors. Institutional
Shares are also made available to financial intermediaries, public, and
private organizations. Shareholders of the Acquired Fund are to receive
Institutional Shares of the Federated Fund if the Reorganization is
consummated.
Federal Income Tax Consequences
As a condition to the Reorganization, the Federated Fund and the Trust
will receive an opinion from their counsel, Dickstein, Shapiro & Morin,
L.L.P., to the effect that, on the basis of the existing provisions of
the Internal Revenue Code of 1986, as amended (the "Code"), current
administrative rules and court decisions, for federal income tax
purposes: (1) the Reorganization as set forth in the Plan will
constitute a tax-free reorganization under section 368(a)(1)(C) of the
Code; (2) no gain or loss will be recognized by the Federated Fund upon
its receipt of the Acquired Fund's assets solely in exchange for the
Federated Fund Shares; (3) no gain or loss will be recognized by the
Acquired Fund upon the transfer of its assets to the Federated Fund in
exchange for the Federated Fund Shares or upon the distribution (whether
actual or constructive) of the Federated Fund Shares to the Acquired
Fund shareholders in exchange for their shares of the Acquired Fund; (4)
no gain or loss will be recognized by shareholders of the Acquired Fund
upon the exchange of their Acquired Fund shares for the Federated Fund
Shares; (5) the tax basis of the Acquired Fund's assets acquired by the
Federated Fund will be the same as the tax basis of such assets to the
Acquired Fund immediately prior to the Reorganization; (6) the tax basis
of the Federated Fund Shares received by each shareholder of the
Acquired Fund pursuant to the Plan will be the same as the tax basis of
the Acquired Fund shares held by such shareholder immediately prior to
the Reorganization; (7) the holding period of the assets of the Acquired
Fund in the hands of the Federated Fund will include the period during
which those assets were held by the Acquired Fund; and (8) the holding
period of the Federated Fund Shares received by each shareholder of the
Acquired Fund pursuant to the Plan will include the period during which
the Acquired Fund shares exchanged therefor were held by such
shareholder, provided the Acquired Fund shares were held as capital
assets on the date of the Reorganization.
Comparative Information on Shareholder Rights and Obligations
The Federated Fund was established as a Massachusetts business trust
under a Declaration of Trust dated January 3, 1984, as Amended and
Restated on May 22, 1992, under the laws of the Commonwealth of
Massachusetts. The Acquired Fund is a portfolio of the Trust, which was
established as a Massachusetts business trust under a Declaration of
Trust dated July 12, 1993, under the laws of the Commonwealth of
Massachusetts.
The material differences in shareholder rights between the Federated
Fund and the Acquired Fund relate to the "Quorum and Required Vote" and
"General Amendments" sections of their respective Declaration of Trust.
The Declaration of Trust of the Federated Fund requires that at any
meeting of shareholders there must be present, in person or by proxy,
holders of more than one-fourth of the total number of outstanding
shares of all series and classes entitled to vote at such meeting. In
comparison, the Acquired Fund requires that at any meeting of
shareholders there must be present, in person or by proxy, holders of
more than fifty percent of the total number of outstanding shares of all
series and classes entitled to vote at such meeting.
The Declaration of Trust of the Federated Fund states that it may be
amended, except in certain circumstances, by a majority vote of Trustees
and a "Majority Shareholder Vote" of all series and classes then
outstanding and entitled to vote. A "Majority Shareholder Vote" means
the lesser of: (a) 67% or more of the voting securities present at a
shareholder meeting, if the holders of more than 50% of the outstanding
voting securities are present or represented by proxy; or (b) more than
50% of the outstanding voting securities. In comparison, the
Declaration of the Trust of the Trust states that it may be amended,
except in certain circumstances, by a majority vote of Trustees and the
vote of a holders of a majority of the shares of all series and classes
then outstanding and entitled to vote.
In addition, in accordance with Rule 18f-2 under the 1940 Act, holders
of Institutional Shares of the Federated Fund do not have the right to
vote on matters affecting only Institutional Service Shares, such as the
distribution plan; only the Institutional Services Shares may vote on
such matters.
Capitalization
The following table sets forth the capitalization of the Federated Fund
and the Acquired Fund as of May 16, 1995, and on a pro forma basis as of
that date:
Pro Forma
Federated Fund* Acquired Fund Combined*
Net Assets $____________ (IS) $___________ $_________ (IS)
$___________ (ISS) _________ (ISS)
$___________ $__________
Net Asset Value
Per Share $_____ $____ $___
Shares
Outstanding ____________ (IS) ____________ ____________
(IS)
____________ (ISS) ____________
(ISS)
Shares AuthorizedIndefinite Indefinite Indefinite
* The figures for Federated Fund are shown for Institutional Shares
(IS) and Institutional Service Shares (ISS) where different, although
the Reorganization only involves issuance of Institutional Shares of the
Federated Fund to the Acquired Fund shareholders.
ADDITIONAL INFORMATION ABOUT THE FUNDS
Federated Fund
Additional information about the Federated Fund is contained within its
Annual Report dated February 28, 1995, and its Prospectus dated April
30, 1995, copies of which are included with this Prospectus/Proxy
Statement and incorporated by reference. Additional information about
the Federated Fund is included in its Statement of Additional
Information, which is incorporated by reference, which has been filed
with the Securities and Exchange Commission, and may be obtained without
charge by calling 1-800-235-4669 or by writing to the Federated Fund,
Federated Investors Tower, Pittsburgh, Pennsylvania, 15222-3779. The
Federated Fund is subject to the informational requirements of the
Securities Act of 1933, the Securities Exchange Act of 1934, and the
Investment Company Act of 1940, and accordingly files reports and other
information with the Securities and Exchange Commission. Reports, proxy
and information statements, and other information filed by the Federated
Fund can be obtained by calling or writing the Federated Fund and can
also be inspected and copied by the public at the public reference
facilities maintained by the Securities and Exchange Commission in
Washington, D.C. located at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the following SEC regional offices:
Northeast Regional Office, 7 World Trade Center, Suite 1300, New York,
New York 10048; and the Midwest Regional Office, Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60611.
Copies of such material can be obtained at prescribed rates from the
Public Reference Branch, Office of Consumer Affairs and Information
Services, Securities and Exchange Commission, Washington, D.C. 20549.
This Prospectus/Proxy Statement, which constitutes part of a
registration statement filed by the Federated Fund with the Securities
and Exchange Commission under the Securities Act of 1933, omits certain
of the information contained in the Registration Statement. Reference
is hereby made to the registration statement and its exhibits for
further information with respect to the Federated Fund and the Shares it
offers. Statements made concerning the provisions of documents are
necessarily summaries of such documents, and each such statement is
qualified in its entirety by reference to the copy of the applicable
documents filed with the Securities and Exchange Commission.
Acquired Fund
Additional information about the Acquired Fund is contained in the
Acquired Fund's Prospectus dated January 31, 1995, as supplemented March
2, 1995, its Annual Report dated September 30, 1994, and its Statement
of Additional Information dated January 31, 1995, all of which are
incorporated by reference. Copies of the Prospectus, Annual Report, and
Statement of Additional Information of the Acquired Fund, have been
filed with the Securities and Exchange Commission, and may be obtained
without charge by contacting the Trust at 1-800-467-2506 or by writing
the Trust at Federated Investors Tower, Pittsburgh, Pennsylvania, 15222-
3779. The Trust is subject to the informational requirements of the
Securities Act of 1933, the Securities Exchange Act of 1934, and the
Investment Company Act of 1940, and accordingly files reports and other
information with the Securities and Exchange Commission. Reports, proxy
and information statements, and other information filed by the Trust, on
behalf of the Acquired Fund, can be obtained by calling or writing the
Trust and can also be inspected and copied by the public at the public
reference facilities maintained by the Securities and Exchange
Commission at the addresses and its regional offices listed above.
VOTING INFORMATION
This Prospectus/Proxy Statement is furnished in connection with the
solicitation by the Board of Trustees of the Trust of proxies for use at
the Special Meeting of Shareholders of the Acquired Fund (the "Meeting")
to be held on June 29, 1995, and at any adjournment. The proxy confers
discretionary authority on the designated persons to vote on other
business not currently contemplated which may properly come before the
Meeting. A proxy, if properly executed, duly returned and not revoked,
will be voted in accordance with the specifications made in it. If no
instructions are given, such proxy will be voted in favor of the
Reorganization. A shareholder may revoke a proxy at any time prior to
use by filing with the Secretary of the Acquired Fund an instrument
revoking the proxy, or by submitting a proxy bearing a later date, or by
attending and voting at the Meeting.
The cost of the solicitation, including the printing and mailing of
proxy materials, will be borne by Sunburst Bank, Mississippi, the
investment adviser of the Acquired Fund. In addition to solicitations
through the mails, proxies may be solicited by officers, employees and
agents of the Acquired Fund and its investment adviser at no additional
cost to the Acquired Fund. Such solicitations may be by telephone,
telegraph or otherwise. The Acquired Fund's investment adviser will
reimburse custodians, nominees and fiduciaries for the reasonable costs
incurred by them in connection with forwarding solicitation materials to
the beneficial owners of shares held of record by such persons.
Outstanding Shares and Voting Requirements
The Trustees of the Trust have fixed the close of business on May 16,
1995, as the record date for the determination of shareholders entitled
to notice of and to vote at the Special Meeting of Shareholders of the
Acquired Fund and at any adjournment. As of the record date, there were
___________ shares of the Acquired Fund outstanding. Each Acquired Fund
share is entitled to one vote, and fractional shares have proportionate
voting rights. On the record date, [name, address], beneficially owned
__________ shares, or approximately _______% of the Acquired Fund's
outstanding shares. On such date, no other person owned of record, or
to the knowledge of FSC, beneficially owned, 5% or more of the Acquired
Fund's outstanding shares. On the record date, the Trustees and
officers of the Trust as a group owned less than 1% of the outstanding
shares of the Acquired Fund.
On the record date the following persons of record owned 5% or more of
the outstanding Institutional Shares or Institutional Service Shares of
the Federated Fund: [name, address, percentage of share class]. On the
record date, the Trustees and officers of the Federated Fund as a group
owned less than 1% of the outstanding shares of the Federated Fund. On
the record date, no other person owned of record, or to the knowledge of
FSC, beneficially owned, 5% or more of a class of shares of the
Federated Fund. After giving effect to the Reorganization, the
following persons of record on the record date would own 5% or more of
the outstanding shares of Institutional Shares or Institutional Services
Shares, as indicated: [name, address, percentage of share class].
Approval of the Agreement requires the affirmative vote of a majority of
the Acquired Fund's outstanding shares. The Acquired Fund requires that
at any meeting of Shareholders there must be present, in person or by
proxy, holders of more than fifty percent of the total number of
outstanding shares entitled to vote at such meeting. For purposes of
determining the presence of a quorum and counting votes on the matter
presented, shares represented by abstentions and broker non-votes will
be counted as present, but not as votes cast, at the meeting. The votes
of shareholders of the Federated Fund are not being solicited since
their approval is not required in order to effect the Reorganization.
Other Matters
Management of the Acquired Fund knows of no other matters that may
properly be, or which are likely to be, brought before the Meeting.
However, if any other business shall properly come before the Meeting,
the persons named in the proxy intend to vote on such business in
accordance with their best judgment. Whether or not shareholders expect
to attend the meeting, all shareholders are urged to sign, fill in, and
return the enclosed proxy form promptly.
Exhibit A
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated April 13, 1995 (the
"Agreement"), between FEDERATED U.S. GOVERNMENT SECURITIES FUND: 1-3
YEARS (formerly, Federated Short-Intermediate Government Trust)
(hereinafter called the "Acquiring Fund"), a Massachusetts business
trust, and SUNBURST FUNDS, a Massachusetts business trust (hereinafter
called the "Trust"), on behalf of its only portfolio, SUNBURST SHORT-
INTERMEDIATE GOVERNMENT BOND FUND (hereinafter called the "Acquired
Fund").
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section
368(a)(1)(C) of the United States Internal Revenue Code of 1986, as
amended (the "Code"). The reorganization (the "Reorganization") will
consist of the transfer of all of the assets of the Acquired Fund in
exchange solely for shares of beneficial interest of the Institutional
Shares of the Acquiring Fund (the "Acquiring Fund Shares") and the
distribution, after the Closing Date hereinafter referred to, of the
Acquiring Fund Shares to the shareholders of the Acquired Fund in
liquidation of the Acquired Fund as provided herein, all upon the terms
and conditions hereinafter set forth in this Agreement.
WHEREAS, the Trust and the Acquiring Fund are registered open-end
management investment companies and the Acquired Fund owns securities in
which the Acquiring Fund is permitted to invest;
WHEREAS, both the Trust and the Acquiring Fund are authorized to issue
their shares of beneficial interest;
WHEREAS, the Board of Trustees, including a majority of the Trustees who
are not "interested persons" (as defined under the Investment Company
Act of 1940, as amended (the "1940 Act")), of the Acquiring Fund has
determined that the exchange of all of the assets of the Acquired Fund
for Acquiring Fund Shares is in the best interests of the Acquiring Fund
shareholders and that the interests of the existing shareholders of the
Acquiring Fund would not be diluted as a result of this transaction; and
WHEREAS, the Board of Trustees, including a majority of the Trustees who
are not "interested persons" (as defined under the 1940 Act), of the
Trust has determined that the exchange of all of the assets of the
Acquired Fund for Acquiring Fund Shares is in the best interests of the
Acquired Fund shareholders and that the interests of the existing
shareholders of the Acquired Fund would not be diluted as a result of
this transaction;
NOW THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties agree as follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR THE
ACQUIRING FUND SHARES AND LIQUIDATION OF THE ACQUIRED FUND.
1.1 Subject to the terms and conditions contained herein, the Acquired
Fund agrees to assign, transfer and convey to the Acquiring Fund all of
the assets of the Acquired Fund, including all securities and cash, and
the Acquiring Fund agrees in exchange therefor to deliver to the
Acquired Fund the number of Acquiring Fund Shares, including fractional
Acquiring Fund Shares, determined as set forth in paragraph 2.3. Such
transaction shall take place at the closing (the "Closing") on the
closing date (the "Closing Date") provided for in paragraph 3.1. In
lieu of delivering certificates for the Acquiring Fund Shares, the
Acquiring Fund shall credit the Acquiring Fund Shares to the Acquired
Fund's account on the stock record books of the Acquiring Fund and shall
deliver a confirmation thereof to the Acquired Fund.
1.2 The Acquired Fund will discharge all of its liabilities and
obligations prior to the Closing Date.
1.3 Delivery of the assets of the Acquired Fund to be transferred
shall be made on the Closing Date and shall be delivered to State Street
Bank and Trust Company, Boston, Massachusetts, the Acquiring Fund's
custodian (the "Custodian"), for the account of the Acquiring Fund,
together with proper instructions and all necessary documents to
transfer to the account of the Acquiring Fund, free and clear of all
liens, encumbrances, rights, restrictions and claims. All cash
delivered shall be in the form of currency and immediately available
funds payable to the order of the Custodian for the account of the
Acquiring Fund.
1.4 The Acquired Fund will pay or cause to be paid to the Acquiring
Fund any dividends or interest received on or after the Closing Date
with respect to assets transferred to the Acquiring Fund hereunder. The
Acquired Fund will transfer to the Acquiring Fund any distributions,
rights or other assets received by the Acquired Fund after the Closing
Date as distributions on or with respect to the securities transferred.
Such assets shall be deemed included in assets transferred to the
Acquiring Fund on the Closing Date and shall not be separately valued.
1.5 As soon after the Closing Date as is conveniently practicable, the
Acquired Fund will liquidate and distribute pro rata to the Acquired
Fund's shareholders of record, determined as of the close of business on
the Closing Date (the "Acquired Fund Shareholders"), the Acquiring Fund
Shares received by the Acquired Fund pursuant to paragraph 1.1. Such
liquidation and distribution will be accomplished by the transfer of the
Acquiring Fund Shares then credited to the account of the Acquired Fund
on the books of the Acquiring Fund to open accounts on the share record
books of the Acquiring Fund in the names of the Acquired Fund
Shareholders and representing the respective pro rata number of the
Acquiring Fund Shares due such shareholders. All issued and outstanding
shares of the Acquired Fund will simultaneously be canceled on the books
of the Acquired Fund. Share certificates representing interests in the
Acquired Fund will represent a number of Acquiring Fund Shares after the
Closing Date as determined in accordance with Section 2.3. The
Acquiring Fund shall not issue certificates representing the Acquiring
Fund Shares in connection with such exchange.
1.6 Ownership of Acquiring Fund Shares will be shown on the books of
the Acquiring Fund's transfer agent. Acquiring Fund Shares will be
issued in the manner described in the Acquiring Fund's current
prospectus and statement of additional information.
1.7 Any transfer taxes payable upon issuance of the Acquiring Fund
Shares in a name other than the registered holder of the Acquired Fund
shares on the books of the Acquired Fund as of that time shall, as a
condition of such issuance and transfer, be paid by the person to whom
such Acquiring Fund Shares are to be issued and transferred.
1.8 Any reporting responsibility of the Acquired Fund is and shall
remain the responsibility of the Acquired Fund up to and including the
Closing Date and such later dates, with respect to liquidation and
termination of the Acquired Fund, on which the Acquired Fund is
liquidated and terminated.
1.9 The Trust shall be deregistered as an investment company under the
1940 Act and dissolved as a Massachusetts business trust promptly
following the Closing Date and the making of all distributions pursuant
to paragraph 1.5.
2. VALUATION
2.1 The value of the Acquired Fund's net assets to be acquired by the
Acquiring Fund hereunder shall be the value of such assets computed as
of 4:00 p.m. (Eastern time) on the Closing Date (such time and date
being hereinafter called the "Valuation Date"), using the valuation
procedures set forth in the Acquiring Fund's then-current prospectus or
statement of additional information.
2.2 The net asset value of an Acquiring Fund Share shall be the net
asset value per share computed as of 4:00 p.m. (Eastern time) on the
Valuation Date, using the valuation procedures set forth in the
Acquiring Fund's then-current prospectus or statement of additional
information.
2.3 The number of the Acquiring Fund Shares to be issued (including
fractional shares, if any) in exchange for the Acquired Fund's net
assets shall be determined by dividing the value of the net assets of
the Acquired Fund determined using the same valuation procedures
referred to in paragraph 2.1 by the net asset value of one Acquiring
Fund Share determined in accordance with paragraph 2.2.
2.4 All computations of value shall be made in accordance with the
regular practices of the Acquiring Fund.
3. CLOSING AND CLOSING DATE.
3.1 The Closing Date shall be June 30, 1995, or such later date as the
parties may mutually agree. All acts taking place at the Closing Date
shall be deemed to take place simultaneously as of the close of business
on the Closing Date unless otherwise provided. The Closing shall be
held at 4:00 p.m. (Eastern time) at the offices of the Acquiring Fund,
Federated Investors Tower, Pittsburgh, PA 15222-3779, or such other time
and/or place as the parties may mutually agree.
3.2 If on the Valuation Date (a) the primary trading market for
portfolio securities of the Acquiring Fund or the Acquired Fund shall be
closed to trading or trading thereon shall be restricted; or (b) trading
or the reporting of trading shall be disrupted so that accurate
appraisal of the value of the net assets of the Acquiring Fund or the
Acquired Fund is impracticable, the Closing Date shall be postponed
until the first business day after the day when trading shall have been
fully resumed and reporting shall have been restored.
3.3 Federated Services Company, as transfer agent for each of the
Acquired Fund and Acquiring Fund, shall deliver at the Closing a
certificate of an authorized officer stating that its records contain
the names and addresses of the Acquired Fund Shareholders and the number
and percentage ownership of outstanding shares owned by each such
shareholder immediately prior to the Closing. The Acquiring Fund shall
issue and deliver a confirmation evidencing the Acquiring Fund Shares to
be credited on the Closing Date to the Secretary of the Acquired Fund,
or provide evidence satisfactory to the Acquired Fund that such
Acquiring Fund Shares have been credited to the Acquired Fund's account
on the books of the Acquiring Fund. At the Closing, each party shall
deliver to the other such bills of sale, checks, assignments, assumption
agreements, share certificates, if any, receipts or other documents as
such other party or its counsel may reasonably request.
4. REPRESENTATIONS AND WARRANTIES.
4.1 The Trust represents and warrants to the Acquiring Fund as
follows:
(a) The Acquired Fund is a portfolio of the Trust, which is duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts and has power to own all of its properties
and assets and to carry out this Agreement.
(b) The Trust is registered under the 1940 Act, as an open-end,
diversified, management investment company, and such registration has
not been revoked or rescinded and is in full force and effect.
(c) The Trust is not, and the execution, delivery and performance of
this Agreement will not result, in material violation of its Declaration
of Trust or By-Laws or of any agreement, indenture, instrument,
contract, lease or other undertaking to which the Acquired Fund is a
party or by which it is bound.
(d) The Acquired Fund has no material contracts or other commitments
outstanding (other than this Agreement) which will result in liability
to it after the Closing Date.
(e) No litigation or administrative proceeding or investigation of or
before any court or governmental body is currently pending or to its
knowledge threatened against the Acquired Fund or any of its properties
or assets which, if adversely determined, would materially and adversely
affect its financial condition or the conduct of its business. The
Acquired Fund knows of no facts which might form the basis for the
institution of such proceedings, and is not a party to or subject to the
provisions of any order, decree or judgment of any court or governmental
body which materially and adversely affects its business or its ability
to consummate the transactions herein contemplated.
(f) The current prospectus and statement of additional information of
the Acquired Fund conform in all material respects to the applicable
requirements of the Securities Act of 1933, as amended (the "1933 Act"),
and the 1940 Act and the rules and regulations of the Securities and
Exchange Commission (the "Commission") thereunder and do not include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein as necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(g) The Statement of Assets and Liabilities of the Acquired Fund at
September 30, 1994, has been audited by KPMG Peat Marwick LLP,
independent auditors, and has been prepared in accordance with generally
accepted accounting principles, consistently applied, and such statement
(a copy of which has been furnished to the Acquiring Fund) fairly
reflects the financial condition of the Acquired Fund as of such date,
and there are no known contingent liabilities of the Acquired Fund as of
such date not disclosed therein.
(h) Since September 30, 1994, there has not been any material adverse
change in the Acquired Fund's financial condition, assets, liabilities
or business other than changes occurring in the ordinary course of
business, or any incurrence by the Acquired Fund of indebtedness
maturing more than one year from the date such indebtedness was
incurred, except as otherwise disclosed to and accepted by the Acquiring
Fund.
(i) At the Closing Date, all Federal and other tax returns and reports
of the Acquired Fund required by law to have been filed by such dates
shall have been filed, and all Federal and other taxes shall have been
paid so far as due, or provision shall have been made for the payment
thereof, and to the best of the Acquired Fund's knowledge no such return
is currently under audit and no assessment has been asserted with
respect to such returns.
(j) For each fiscal year of its operation, the Acquired Fund has met
the requirements of Subchapter M of the Code for qualification and
treatment as a regulated investment company.
(k) All issued and outstanding shares of the Acquired Fund are, and at
the Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable. All of the issued and outstanding shares of
the Acquired Fund will, at the time of the Closing, be held by the
persons and in the amounts set forth in the records of the transfer
agent as provided in paragraph 3.3. The Acquired Fund does not have
outstanding any options, warrants or other rights to subscribe for or
purchase any of the Acquired Fund shares, nor is there outstanding any
security convertible into any of the Acquired Fund shares.
(l) On the Closing Date, the Acquired Fund will have full right, power
and authority to sell, assign, transfer and deliver the assets to be
transferred by it hereunder.
(m) The execution, delivery and performance of this Agreement will
have been duly authorized prior to the Closing Date by all necessary
action on the part of the Trust's Trustees and, subject to the approval
of the Acquired Fund Shareholders, this Agreement will constitute the
valid and legally binding obligation of the Acquired Fund enforceable in
accordance with its terms, subject to the effect of bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and other
similar laws relating to or affecting creditors' rights generally and
court decisions with respect thereto, and to general principles of
equity and the discretion of the court (regardless of whether the
enforceability is considered in a proceeding in equity or at law).
(n) The prospectus/proxy statement of the Acquired Fund (the
"Prospectus/Proxy Statement") to be included in the Registration
Statement referred to in paragraph 5.5 (other than information therein
that relates to the Acquiring Fund) will, on the effective date of the
Registration Statement and on the Closing Date, not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which such statements were made, not
misleading.
(o) The Acquired Fund has entered into an agreement under which
Sunburst Bank, Mississippi, will assume the expenses of the
reorganization including accountants' fees, legal fees, registration
fees, transfer taxes (if any), the fees of banks and transfer agents and
the costs of preparing, printing, copying and mailing proxy solicitation
materials to the Acquired Fund's shareholders and the costs of holding
the Special Meeting of Shareholders.
4.2 The Acquiring Fund represents and warrants to the Trust as
follows:
(a) The Acquiring Fund is a business trust duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts and the Acquiring Fund has the power to carry on its
business as it is now being conducted and to carry out this Agreement.
(b) The Acquiring Fund is registered under the 1940 Act as an open-
end, diversified, management investment company, and such registration
has not been revoked or rescinded and is in full force and effect.
(c) The Acquiring Fund is not, and the execution, delivery and
performance of this Agreement will not result, in material violation of
the Acquiring Fund's Declaration of Trust or By-Laws or of any
agreement, indenture, instrument, contract, lease or other undertaking
to which the Acquiring Fund is a party or by which it is bound.
(d) No litigation or administrative proceeding or investigation of or
before any court or governmental body is currently pending or to its
knowledge threatened against the Acquiring Fund or any of its properties
or assets which, if adversely determined, would materially and adversely
affect its financial condition or the conduct of its business. The
Acquiring Fund knows of no facts which might form the basis for the
institution of such proceedings, and is not a party to or subject to the
provisions of any order, decree or judgment of any court or governmental
body which materially and adversely affects its business or its ability
to consummate the transactions contemplated herein.
(e) The current prospectus and statement of additional information of
the Acquiring Fund conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and
regulations of the Commission thereunder and do not include any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(f) The financial statements of the Acquiring Fund at February 28,
1995, have been audited by Ernst & Young LLP, independent public
accountants, and have been prepared in accordance with generally
accepted accounting principles, and such statements (copies of which
have been furnished to the Acquired Fund) fairly reflect the financial
condition of the Acquiring Fund as of such date.
(g) Since February 28, 1995, there has not been any material adverse
change in the Acquiring Fund's financial condition, assets, liabilities
or business other than changes occurring in the ordinary course of
business, or any incurrence by the Acquiring Fund of any indebtedness,
except as otherwise disclosed to and accepted by the Acquiring Fund.
(h) At the Closing Date, all Federal and other tax returns and reports
of the Acquiring Fund required by law then to be filed shall have been
filed, and all Federal and other taxes shown as due on said returns and
reports shall have been paid or provision shall have been made for the
payment thereof.
(i) For each fiscal year of its operation, the Acquiring Fund has met
the requirements of Subchapter M of the Code for qualification and
treatment as a regulated investment company.
(j) All issued and outstanding shares of the Acquiring Fund are, and
at the Closing Date will be, duly and validly issued and outstanding,
fully paid and non-assessable. The Acquiring Fund does not have
outstanding any options, warrants or other rights to subscribe for or
purchase any of the Acquiring Fund Shares, nor is there outstanding any
security convertible into any Acquiring Fund Shares.
(k) The execution, delivery and performance of this Agreement will
have been duly authorized prior to the Closing Date by all necessary
action, if any, on the part of the Acquiring Fund's Trustees, and this
Agreement will constitute the valid and legally binding obligation of
the Acquiring Fund enforceable in accordance with its terms, subject to
the effect of bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance and other similar laws relating to or affecting
creditors' rights generally and court decisions with respect thereto,
and to general principles of equity and the discretion of the court
(regardless of whether the enforceability is considered in a proceeding
in equity or at law).
(l) The Prospectus/Proxy Statement to be included in the Registration
Statement (only insofar as it relates to the Acquiring Fund) will, on
the effective date of the Registration Statement and on the Closing
Date, not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which such
statements were made, not misleading.
(m) The Acquiring Fund has entered into an agreement under which
Sunburst Bank, Mississippi, will assume the expenses of the
reorganization including accountants' fees, legal fees, registration
fees, transfer taxes (if any), the fees of banks and transfer agents and
the costs of preparing, printing, copying and mailing proxy solicitation
materials to the Acquired Fund's shareholders and the costs of holding
the Special Meeting of Shareholders.
5. COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND.
5.1 The Acquiring Fund and the Acquired Fund each will operate its
business in the ordinary course between the date hereof and the Closing
Date, it being understood that such ordinary course of business will
include customary dividends and distributions.
5.2 The Acquired Fund will call a meeting of the Acquired Fund
Shareholders to consider and act upon this Agreement and to take all
other action necessary to obtain approval of the transactions
contemplated herein.
5.3 Subject to the provisions of this Agreement, the Acquiring Fund
and the Acquired Fund will each take, or cause to be taken, all action,
and do or cause to be done, all things reasonably necessary, proper or
advisable to consummate and make effective the transactions contemplated
by this Agreement.
5.4 As promptly as practicable, but in any case within sixty days
after the Closing Date, the Acquired Fund shall furnish the Acquiring
Fund, in such form as is reasonably satisfactory to the Acquiring Fund,
a statement of the earnings and profits of the Acquired Fund for Federal
income tax purposes which will be carried over to the Acquiring Fund as
a result of Section 381 of the Code and which will be certified by the
Acquired Fund's President or Vice President and its Treasurer or
Assistant Treasurer.
5.5 The Acquired Fund will provide the Acquiring Fund with information
reasonably necessary for the preparation of a prospectus (the
"Prospectus") which will include the Proxy Statement, referred to in
paragraph 4.1(n), all to be included in a Registration Statement on Form
N-14 of the Acquiring Fund (the "Registration Statement"), in compliance
with the 1933 Act, the Securities Exchange Act of 1934, as amended, and
the 1940 Act in connection with the meeting of the Acquired Fund
Shareholders to consider approval of this Agreement and the transactions
contemplated herein.
5.6 The Acquiring Fund agrees to use all reasonable efforts to obtain
the approvals and authorizations required by the 1933 Act, the 1940 Act
and such of the state Blue Sky or securities laws as it may deem
appropriate in order to continue its operations after the Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND.
The obligations of the Acquiring Fund to complete the transactions
provided for herein shall be subject, at its election, to the
performance by the Acquired Fund of all the obligations to be performed
by it hereunder on or before the Closing Date and, in addition thereto,
the following conditions:
6.1 All representations and warranties of the Trust contained in this
Agreement shall be true and correct in all material respects as of the
date hereof and, except as they may be affected by the transactions
contemplated by this Agreement, as of the Closing Date with the same
force and effect as if made on and as of the Closing Date.
6.2 The Acquired Fund shall have delivered to the Acquiring Fund a
statement of the Acquired Fund's assets, together with a list of the
Acquired Fund's portfolio securities showing the tax costs of such
securities by lot and the holding periods of such securities, as of the
Closing Date, certified by the Treasurer or Assistant Treasurer of the
Acquired Fund.
6.3 The Acquired Fund shall have delivered to the Acquiring Fund on
the Closing Date a certificate executed in its name by its President or
Vice President and its Treasurer or Assistant Treasurer, in form and
substance satisfactory to the Acquiring Fund, to the effect that the
representations and warranties of the Acquired Fund made in this
Agreement are true and correct at and as of the Closing Date, except as
they may be affected by the transactions contemplated by this Agreement,
and as to such other matters as the Acquiring Fund shall reasonably
request.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND.
The obligations of the Acquired Fund to consummate the
transactions provided herein shall be subject, at its election, to the
performance by the Acquiring Fund of all the obligations to be performed
by it hereunder on or before the Closing Date and, in addition thereto,
the following conditions:
7.1 All representations and warranties of the Acquiring Fund contained
in this Agreement shall be true and correct in all material respects as
of the date hereof and, except as they may be affected by the
transactions contemplated by this Agreement, as of the Closing Date with
the same force and effect as if made on and as of the Closing Date.
7.2 The Acquiring Fund shall have delivered to the Acquired Fund on
the Closing Date a certificate executed in its name by its President or
Vice President and its Treasurer or Assistant Treasurer, in form and
substance satisfactory to the Acquired Fund, to the effect that the
representations and warranties of the Acquiring Fund made in this
Agreement are true and correct at and as of the Closing Date, except as
they may be affected by the transactions contemplated by this Agreement,
and as to such other matters as the Acquired Fund shall reasonably
request.
7.3 The Acquiring Fund shall have delivered to the Acquired Fund
before the Closing Date the Statement of Assets and Liabilities referred
to in Section 4.2(f).
7.4 There shall not have been any material adverse change in the
Acquiring Fund's financial condition, assets, liabilities or business
since the date of such Statement of Assets and Liabilities other than
changes occurring in the ordinary course of business, or any incurrence
by the Acquiring Fund of any indebtedness, except as otherwise disclosed
to and accepted by the Acquired Fund.
8. FURTHER CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE ACQUIRING
FUND AND THE ACQUIRED FUND.
If any of the conditions set forth below do not exist on or before
the Closing Date with respect to the Acquired Fund or the Acquiring
Fund, the other party to this Agreement shall, at its option, not be
required to consummate the transactions contemplated by this Agreement.
8.1 The Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of the holders of the outstanding
shares of the Acquired Fund in accordance with the provisions of the
Acquired Fund's Declaration of Trust.
8.2 On the Closing Date no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection
with, this Agreement or the transactions contemplated herein.
8.3 All consents of other parties and all other consents, orders and
permits of Federal, state and local regulatory authorities (including
those of the Commission and of state Blue Sky and securities
authorities) deemed necessary by the Acquiring Fund or the Acquired Fund
to permit consummation, in all material respects, of the transactions
contemplated hereby shall have been obtained, except where failure to
obtain any such consent, order or permit would not involve a risk of a
material adverse effect on the assets or properties of the Acquiring
Fund or the Acquired Fund, provided that either party hereto may for
itself waive any of such conditions.
8.4 The Registration Statement shall have become effective under the
1933 Act and no stop orders suspending the effectiveness thereof shall
have been issued and, to the best knowledge of the parties hereto, no
investigation or proceeding for that purpose shall have been instituted
or be pending, threatened or contemplated under the 1933 Act.
8.5 The Acquiring Fund and the Trust shall have received an opinion of
Dickstein, Shapiro & Morin, L.L.P. substantially to the effect that for
Federal income tax purposes:
(a) The transfer of all of the Acquired Fund assets in exchange for
the Acquiring Fund Shares and the distribution of the Acquiring Fund
Shares to the shareholders of the Acquired Fund in liquidation of the
Acquired Fund will constitute a "reorganization" within the meaning of
Section 368(a)(1)(C) of the Code; (b) No gain or loss will be recognized
by the Acquiring Fund upon the receipt of the assets of the Acquired
Fund solely in exchange for the Acquiring Fund Shares; (c) No gain or
loss will be recognized by the Acquired Fund upon the transfer of the
Acquired Fund assets to the Acquiring Fund in exchange for the Acquiring
Fund Shares or upon the distribution (whether actual or constructive) of
the Acquiring Fund Shares to Acquired Fund Shareholders in exchange for
their shares of the Acquired Fund; (d) No gain or loss will be
recognized by the Acquired Fund Shareholders upon the exchange of their
Acquired Fund shares for the Acquiring Fund Shares; (e) The tax basis of
the Acquired Fund assets acquired by the Acquiring Fund will be the same
as the tax basis of such assets to the Acquired Fund immediately prior
to the Reorganization; (f) The tax basis of the Acquiring Fund Shares
received by each of the Acquired Fund Shareholders pursuant to the
Reorganization will be the same as the tax basis of the Acquired Fund
shares held by such shareholder immediately prior to the Reorganization;
(g) The holding period of the assets of the Acquired Fund in the hands
of the Acquiring Fund will include the period during which those assets
were held by the Acquired Fund; and (h) The holding period of the
Acquiring Fund Shares to be received by each Acquired Fund Shareholder
will include the period during which the Acquired Fund shares exchanged
therefor were held by such shareholder (provided the Acquired Fund
shares were held as capital assets on the date of the Reorganization).
9. TERMINATION OF AGREEMENT.
9.1 This Agreement and the transactions contemplated hereby may be
terminated and abandoned by resolution of the Board of Trustees of the
Trust or the Acquiring Fund at any time prior to the Closing Date if
circumstances should develop that, in the opinion of either of the
parties' Board of Trustees, make proceeding with the Agreement
inadvisable.
9.2 If this Agreement is terminated and the exchange contemplated
hereby is abandoned pursuant to the provisions of this Section 9, this
Agreement shall become void and have no effect, without any liability on
the part of any party hereto or the trustees, officers or shareholders
of the Acquiring Fund or of the Acquired Fund, in respect of this
Agreement.
10. WAIVER.
At any time prior to the Closing Date, any of the foregoing
conditions may be waived by the Board of Trustees of the Acquiring Fund
or of the Trust, if, in the judgment of either, such waiver will not
have a material adverse effect on the benefits intended under this
Agreement to the shareholders of the Acquiring Fund or of the Acquired
Fund, as the case may be.
11. MISCELLANEOUS.
11.1 None of the representations and warranties included or provided
for herein shall survive consummation of the transactions contemplated
hereby.
11.2 This Agreement contains the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof,
and merges and supersedes all prior discussions, agreements, and
understandings of every kind and nature between them relating to the
subject matter hereof. Neither party shall be bound by any condition,
definition, warranty or representation, other than as set forth or
provided in this Agreement or as may be set forth in a later writing
signed by the party to be bound thereby.
11.3 This Agreement shall be governed and construed in accordance with
the internal laws of the Commonwealth of Massachusetts, without giving
effect to principles of conflict of laws.
11.4 This Agreement may be executed in any number of counterparts, each
of which, when executed and delivered, shall be deemed to be an
original.
11.5 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof of any rights or obligations hereunder shall be made by
any party without the written consent of the other party. Nothing
herein expressed or implied is intended or shall be construed to confer
upon or give any person, firm or corporation, other than the parties
hereto and their respective successors and assigns, any rights or
remedies under or by reason of this Agreement.
11.6 The Acquired Fund is hereby expressly put on notice of the
limitation of liability as set forth in Article XI of the Amended and
Restated Declaration of Trust of the Acquiring Fund and agrees that the
obligations assumed by the Acquiring Fund pursuant to this Agreement
shall be limited in any case to the Acquiring Fund and its assets and
the Acquired Fund shall not seek satisfaction of any such obligation
from the shareholders of the Acquiring Fund, the trustees, officers,
employees or agents of the Acquiring Fund or any of them.
11.7 The Acquiring Fund is hereby expressly put on notice of the
limitation of liability as set forth in Article XI of the Declaration of
Trust of the Trust and agrees that the obligations assumed by the
Acquired Fund pursuant to this Agreement shall be limited in any case to
the Acquired Fund and its assets and the Acquiring Fund shall not seek
satisfaction of any such obligation from the shareholders of the
Acquired Fund, the trustees, officers, employees or agents of the Trust
or any of them.
IN WITNESS WHEREOF, the Trust, on behalf of the Acquired Fund, and the
Acquiring Fund have caused this Agreement and Plan of Reorganization to
be executed and attested on its behalf by its duly authorized
representatives as of the date first above written.
Acquired Fund:
SUNBURST FUNDS, on behalf of
its portfolio, SUNBURST SHORT-
INTERMEDIATE GOVERNMENT
BOND FUND
Attest:
By: /s/ John W. McGonigle
/s/ Victor R. Siclari
Assistant Secretary Name: John W. McGonigle
Title: Vice President
Acquiring Fund:
FEDERATED U.S. GOVERNMENT
SECURITIES FUND: 1-3 YEARS
(formerly, Federated Short-
Intermediate
Government Trust)
Attest:
By: /s/ John W. McGonigle
/s/G. Andrew Bonnewell
Assistant Secretary Name: John W. McGonigle
Title: Vice President
STATEMENT OF ADDITIONAL INFORMATION
DATED MAY 25, 1995
ACQUISITION OF THE ASSETS OF
SUNBURST SHORT-INTERMEDIATE GOVERNMENT BOND FUND,
A PORTFOLIO OF SUNBURST FUNDS
BY AND IN EXCHANGE FOR INSTITUTIONAL SHARES OF
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 1-3 YEARS
(FORMERLY, FEDERATED SHORT-INTERMEDIATE GOVERNMENT TRUST)
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
TELEPHONE NUMBER: 1-800-235-4669
This Statement of Additional Information dated May 25, 1995, is not a
prospectus. A Prospectus/Proxy Statement dated May 25, 1995, related to
the above-referenced matter may be obtained from the Federated U.S.
Government Securities Fund: 1-3 Years, Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779. This Statement of Additional
Information should be read in conjunction with such Prospectus/Proxy
Statement.
TABLE OF CONTENTS
1. Statement of Additional Information of Federated U.S. Government
Securities Fund: 1-3 Years (formerly, Federated Short-Intermediate
Government Trust), dated April 30, 1995.
2. Annual Report of Federated U.S. Government Securities Fund: 1-3
Years (formerly, Federated Short-Intermediate Government Trust), dated
February 28, 1995.
3. Statement of Additional Information for Sunburst Short-
Intermediate Government Bond Fund, dated January 31, 1995.
4. Annual Report of Sunburst Short-Intermediate Government Bond Fund,
dated September 30, 1994.
The Statement of Additional Information of Federated U.S. Government
Securities Fund: 1-3 Years (formerly, Federated Short-Intermediate
Government Trust) ("Federated Fund"), dated April 30, 1995, is
incorporated herein by reference to Post-Effective Amendment No. 25 to
the Federated Fund's Registration Statement on Form N-1A (1933 Act File
No. 2-89028; 1940 Act File No. 811- 3947), which was filed with the
Securities and Exchange Commission on April 17, 1995. The Annual Report
of Federated Fund and the report of Ernst & Young LLP are incorporated
herein by reference. The Annual Report was filed with the Securities
and Exchange Commission on April 17, 1995. Copies of these documents
may be obtained free of charge from the Federated Fund at Federated
Investors Tower, Pittsburgh, Pennsylvania 15222-3779, Telephone Number:
1-800-235-4669.
The Statement of Additional Information of Sunburst Short-Intermediate
Government Bond Fund ("Acquired Fund") dated January 31, 1995, is
incorporated herein by reference to Post-Effective Amendment No. 5 to
the Registration Statement of Sunburst Funds ("Trust") on Form N-1A
(1933 Act File No. 33-49883; 1940 Act File No. 811-7073), which was
filed with the Securities and Exchange Commission on January 26, 1995.
The Annual Report of the Acquired Fund and the report of KPMG Peat
Marwick LLP are incorporated herein by reference. The Annual Report
was filed with the Securities and Exchange Commission on November 14,
1994. Copies of these documents may be obtained free of charge from the
Trust at Federated Investors Tower, Pittsburgh, Pennsylvania, 15222-
3779, Telephone Number: 1-800-467-2506.
PART C - OTHER INFORMATION
ITEM 15. INDEMNIFICATION
Indemnification is provided to officers and trustees of the
Registrant pursuant to the Registrant's Declaration of Trust, except
where such indemnification is not permitted by law. However, the
Declaration of Trust does not protect the trustees from liabilities
based on willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of their office.
Trustees and officers of the Registrant are insured against
certain liabilities, including liabilities arising under the Securities
Act of 1933 (the "Act").
Insofar as indemnification for liabilities arising under the Act
may be permitted to trustees, officers, and controlling persons of the
Registrant by the Registrant pursuant to the Declaration of Trust or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission, such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid
by trustees, officers, or controlling persons of the Registrant in
connection with the successful defense of any act, suit, or proceeding)
is asserted by such trustees, officers, or controlling persons in
connection with the shares being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed
in the Act and will be governed by the final adjudication of such issue.
Insofar as indemnification for liabilities may be permitted
pursuant to Section 17 of the Investment Company Act of 1940 for
trustees, officers, and controlling persons of the Registrant by the
Registrant pursuant to the Declaration of Trust or otherwise, the
Registrant is aware of the position of the Securities and Exchange
Commission as set forth in Investment Company Act Release No. IC-11330.
Therefore, the Registrant undertakes that in addition to complying with
the applicable provisions of the Declaration of Trust or otherwise, 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 Registrant; 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 Registrant further undertakes that advancement of expenses
incurred in the defense of a proceeding (upon undertaking for repayment
unless it is ultimately determined that indemnification is appropriate)
against an officer, trustee, or controlling person of the Registrant
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 Registrant 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.
ITEM 16. EXHIBITS
1.1 Conformed copy of Declaration of Trust of the Registrant(1)
1.2 Conformed copy of Amended and Restated Declaration of Trust of the
Registrant(3)
2. Copy of Bylaws of the Registrant(3)
3. Not Applicable
4. Agreement and Plan of Reorganization is included as Exhibit A to
Proxy/Prospectus Statement (Part A of this Registration
Statement).
5. Copy of Specimen Certificate for Shares of Baneficial Interest of
the Registrant (3)
6. Conformed copy of Investment Advisory Contract of the
Registrant(2)
7.1 Copy of Distributor's Contract of the Registrant (1)
7.2 Conformed copy of Exhibits A and B of Distributor's Contract (3)
8. Not Applicable
9. Conformed Copy of Custody Agreement of the Registrant(3)
10.1 Copy of Distribution Plan (1)
10.2 Conformed copy of Exhibit A of Distribution Plan (3)
11. Conformed copy of Opinion regarding legality of shares being
issued *
12. Conformed copy of Opinion and Consent regarding tax consequences
of Reorganization *
13. Conformed copy of Portfolio Accounting and Shareholder
Recordkeeping Agreement of the Registrant (3)
13.1 Conformed copy of Shareholder Services Plan(3)
13.2 Conformed copy of Shareholder Services Agreement(3)
14.1 Conformed copy of Consent of Independent Accountants -
Ernst & Young LLP *
14.2 Conformed copy of Consent of Independent Accountants -
KPMG Peat Marwick LLP *
15. Not Applicable
16. Conformed copy of Power of Attorney*
17.1 Declaration under Rule 24f-2 *
17.2 Conformed copy of Post-Effective Amendment No. 24 on Form N-1A
filed April 13, 1995 (1933 Act File No. 2-89208) -- Registration
of Additional Shares pursuant to Section 24(e)(1) and Rule 24e-2
of the Investment Company Act of 1940 *
17.3 Form of Proxy *
__________________
* Filed electronically.
(1) Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 19 on Form N-1A filed February 26, 1993 (File
No. 811-3947).
(2) Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 23 on Form N-1A filed April 26, 1994 (File No.
811-3947).
(3) Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 25 on Form N-1A filed April 17, 1995 (File No.
811-3947).
ITEM 17. UNDERTAKINGS
(1) The undersigned Registrant agrees that prior to any public
reofferring of the securities registered through the use of a prospectus
which is a part of this Registration Statement by any person or party
who is deemed to be an underwriter within the meaning of Rule 145(c) of
the Securities Act of 1933, the reofferring prospectus will contain the
information called for by the applicable registration form for
reofferings by persons who may be deemed underwriters, in addition to
the information called for by the other items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that
is filed under paragraph (1) above will be filed as part of an amendment
to the Registration Statement and will not be used until the amendment
is effective, and that, in determining any liability under the
Securities Act of 1933, each post-effective amendment shall be deemed to
be a new Registration Statement for the securities offered therein, and
the offering of the securities at that time shall be deemed to be the
initial bona fide offering of them.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Federated U.S. Government Securities Fund: 1-3 Years, has
duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Pittsburgh,
Commonwealth of Pennsylvania, on April 17, 1995.
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 1-3 YEARS
(formerly, Federated Short-Intermediate Government Trust)
(Registrant)
By:/s/
G. Andrew Bonnewell, Assistant Secretary
Attorney in Fact for John F. Donahue
April 17, 1995
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the date indicated:
NAME TITLE DATE
By: /s/
G. Andrew Bonnewell Attorney In Fact April 17,
1995
ASSISTANT SECRETARY For the Persons
Listed Below
NAME TITLE
John F. Donahue* Chairman and Trustee
(Chief Executive Officer)
Glen R. Johnson* President
Edward C. Gonzales* Vice President and Treasurer
(Principal Financial and
Accounting Officer)
John T. Conroy, Jr.* Trustee
William J. Copeland* Trustee
James E. Dowd* Trustee
Lawrence D. Ellis, M.D.* Trustee
Edward L. Flaherty, Jr.* Trustee
Peter E. Madden* Trustee
Gregor F. Meyer* Trustee
John E. Murray, Jr.* Trustee
Wesley W. Posvar* Trustee
Marjorie P. Smuts* Trustee
* By Power of Attorney
Exhibit 17.3
SUNBURST FUNDS
FEDERATED INVESTORS TOWER
PITTSBURGH PA 15222-3779
SUNBURST SHORT-INTERMEDIATE GOVERNMENT BOND FUND
CUSIP NO. 867094104
FOR SPECIAL MEETING OF SHAREHOLDERS JUNE 29, 1995
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned shareholders of
Sunburst Short-Intermediate Government Bond Fund hereby appoint Patricia
F. Conner, Maureen Ferguson, Stephen R. Newcamp, Victor R. Siclari, John
H. Cummings, Jr., and Scott Tretter, or any of them true and lawful
attorneys, with power of substitution of each, to vote all shares of
Sunburst Short-Intermediate Government Bond Fund , which the undersigned
is entitled to vote, at the Special Meeting of Shareholders to be held
on June 29, 1995, at Federated Investors Tower, Pittsburgh,
Pennsylvania, at 2:00 p.m. (Eastern Time) and at any adjournment
thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES. The
attorneys named will vote the shares represented by this proxy in
accordance with the choices made on this card. IF NO CHOICE IS
INDICATED AS TO ANY ITEM, THIS PROXY WILL BE VOTED AFFIRMATIVELY ON THAT
MATTER.
Discretionary authority is hereby conferred as to all other matters as
may properly come before the Special Meeting.
PROPOSAL
1. TO APPROVE OR DISAPPROVE AN AGREEMENT AND PLAN OF REORGANIZATION FOR
THE ACQUISITION OF SUNBURST SHORT-INTERMEDIATE GOVERNMENT BOND FUND
BY FEDERATED U.S. GOVERNMENT SECURITIES FUND: 1-3 YEARS.
PLEASE RETURN BOTTOM PORTION WITH YOUR VOTE IN THE ENCLOSED ENVELOPE AND
RETAIN THE TOP PORTION.
SUNBURST SHORT-INTERMEDIATE GOVERNMENT BOND FUND PROXY VOTING MAIL-IN
STUB
RECORD DATE SHARES
PROPOSAL 1: TO APPROVE OR DISAPPROVE AN
AGREEMENT AND PLAN OF
REORGANIZATION
o FOR the Agreement and Plan of
Reorganization
o AGAINST the Agreement and
Plan of Reorganization
o ABSTAIN
Please sign EXACTLY as your name(s) appear above. When signing as
attorney, executor, administrator, guardian, trustee, custodian, etc.,
please give your full title as such. If a corporation or partnership,
please sign the full name by an authorized officer or partner. If stock
is owned jointly, all owners should sign.
_______________________________________________________
_______________________________________________________
Signature(s) of Shareholder(s)
Date:___________________________________________________
Exhibit 11
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 1-3 YEARS
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Phone: 412-288-1900
April 13, 1995
The Trustees of
Federated U.S. Government Securities Fund: 1-3 Years
(formerly, Federated Short-Intermediate Government Trust)
Federated Investors Tower
Pittsburgh, PA 15222-3779
Gentlemen:
Federated U.S. Government Securities Fund: 1-3 Years
(formerly, Federated Short-Intermediate Government Trust) (the "Trust")
proposes to issue shares of beneficial interest (such shares of
beneficial interest being herein referred to as the "Shares") in
connection with the acquisition of the assets of Sunburst Short-
Intermediate Government Bond Fund, a portfolio of Sunburst Funds,
pursuant to the Agreement and Plan of Reorganization dated April 13,
1995 (the "Agreement"), filed as an exhibit to the registration
statement of the Trust filed on Form N-14 (Securities Act of 1933 No. to
be assigned) under the Securities Act of 1933 as amended (the "N-14
Registration").
As counsel, I have participated in the organization of the
Trust, its registration under the Investment Company Act of 1940, as
amended, the registration of its securities on Form N-1A under the
Securities Act of 1933, and its N-14 Registration. I have examined and
am familiar with the written Declaration of Trust dated January 3, 1984,
(as Amended and Restated on May 22, 1992), (the "Declaration of Trust"),
the Bylaws of the Trust, the Agreement and such other documents and
records deemed relevant. I have also reviewed questions of law and
consulted with counsel thereon as deemed necessary or appropriate by me
for the purposes of this opinion.
Based upon the foregoing, it is my opinion that:
1. The Trust is duly organized and validly existing
pursuant to the Declaration of Trust.
2. The Shares which are currently being registered by the
N-14 Registration may be legally and validly issued in accordance with
the provisions of the Agreement and the Declaration of Trust upon
receipt of consideration sufficient to comply with the provisions of
Article III, Section 3, of the Declaration of Trust and subject to
compliance with the Securities Act of 1933, as amended, the Investment
Company Act of 1940, as amended, and applicable state laws regulating
the sale of securities. Such Shares, when so issued, will be fully paid
and non-assessable.
I consent to your filing this opinion as an exhibit to the N-
14 Registration referred to above and to any application or registration
statement filed under the securities laws of any of the states of the
United States.
Very truly yours,
By: /s/ G. Andrew Bonnewell
G. Andrew Bonnewell
Fund Attorney
Exhibit 12
Dickstein, Shapiro & Morin, L.L.P.
2101 L Street, N.W.
Washington, D.C. 20037-1526
202 785-9700
April 17, 1995
Sunburst Funds, on behalf of its portfolio,
Sunburst Short-Intermediate Government Bond Fund
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Federated U.S. Government Securities Fund: 1-3 Years
(formerly Federated Short-Intermediate Government Trust)
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Dear Ladies and Gentlemen:
We have acted as special counsel in connection with, and
you have requested our opinion concerning the federal income tax
consequences of, a transaction (the "Reorganization") in which all of
the assets of Sunburst Short-Intermediate Government Bond Fund (the
"Acquired Fund"), the only portfolio of Sunburst Funds, a Massachusetts
business trust (the "Trust"), will be acquired by Federated U.S.
Government Securities Fund: 1-3 Years (formerly Federated Short-
Intermediate Government Trust), a Massachusetts business trust (the
"Acquiring Fund"), in exchange solely for Institutional Shares of
Acquiring Fund (the "Acquiring Fund Shares"). The terms and conditions
of this transaction are set forth in an Agreement and Plan of
Reorganization dated April 13, 1995, between the Trust, on behalf of
the Acquired Fund, and the Acquiring Fund (the "Reorganization
Agreement"). This opinion is rendered to you pursuant to paragraph 8.5
of the Reorganization Agreement, and all terms used herein have the
meanings assigned to them in the Reorganization Agreement.
Both the Trust and the Acquiring Fund are open-end,
management investment companies which qualify as regulated investment
companies described in Section 851(a) of the Internal Revenue Code of
1986, as amended (the "Code"). The Acquired Fund and the Acquiring Fund
are engaged in the business of investing in professionally managed
portfolios of U.S. government securities.
On the Closing Date under the Reorganization Agreement,
the Acquired Fund will transfer its entire investment portfolio to the
Acquiring Fund. In exchange, the Acquiring Fund will transfer, to the
Acquired Fund, Acquiring Fund Shares in an amount equal in value to the
assets transferred by the Acquired Fund to the Acquiring Fund. The
Acquired Fund will thereupon liquidate and distribute its Acquiring Fund
Shares pro rata to its shareholders ("Acquired Fund Shareholders").
We have reviewed and relied upon the representations
contained in the Reorganization Agreement and in such other documents
and instruments as we have deemed necessary for the purposes of this
opinion, and have reviewed the applicable provisions of the Code,
current regulations and administrative rules thereunder and pertinent
case law.
Based upon the foregoing, and assuming that the
Reorganization and related transactions will take place as described in
the Reorganization Agreement, we are of the opinion that, for federal
income tax purposes:
(a) The transfer of all of the Acquired Fund
assets in exchange for the Acquiring Fund Shares and
the distribution of the Acquiring Fund Shares to the
Acquired Fund Shareholders in liquidation of the
Acquired Fund will constitute a "reorganization"
within the meaning of Section 368(a)(1)(C) of the
Code;
(b) No gain or loss will be recognized by the
Acquiring Fund upon the receipt of the assets of the
Acquired Fund solely in exchange for the Acquiring
Fund Shares;
(c) No gain or loss will be recognized by the
Acquired Fund upon the transfer of the Acquired Fund
assets to the Acquiring Fund in exchange for the
Acquiring Fund Shares or upon the distribution
(whether actual or constructive) of the Acquiring Fund
Shares to Acquired Fund Shareholders in exchange for
their shares of the Acquired Fund;
(d) No gain or loss will be recognized by the
Acquired Fund Shareholders upon the exchange of their
Acquired Fund shares for the Acquiring Fund Shares;
(e) The tax basis of the Acquired Fund assets
acquired by the Acquiring Fund will be the same as the
tax basis of such assets to the Acquired Fund
immediately prior to the Reorganization;
(f) The tax basis of the Acquiring Fund Shares
received by each of the Acquired Fund Shareholders
pursuant to the Reorganization will be the same as the
tax basis of the Acquired Fund shares held by such
shareholder immediately prior to the Reorganization;
(g) The holding period of the assets of the
Acquired Fund in the hands of the Acquiring Fund will
include the period during which those assets were held
by the Acquired Fund; and
(h) The holding period of the Acquiring Fund
Shares received by each Acquired Fund Shareholder will
include the period during which the Acquired Fund
shares exchanged therefor were held by such
shareholder (provided the Acquired Fund shares were
held as capital assets on the date of the
Reorganization).
We hereby consent to the filing of a copy of this opinion
with the Securities and Exchange Commission as an exhibit to the
Registration Statement on Form N-14 filed by the Acquiring Fund in
connection with the Reorganization, and to the references to this firm
and this opinion in the Prospectus/Proxy Statement which is contained in
such Registration Statement.
Very truly yours,
/s/ Dickstein, Shapiro & Morin, L.L.P.
Exhibit 14.1
Consent of Independent Accountants
We consent to the reference to our firm under the caption "Independent
Auditors" and to the use of our report dated April 6, 1995, with respect
to the financial statements of Federated U.S. Government Securities
Fund:1-3 Years (formerly, Federated Short Intermediate Government
Trust), incorporated by reference to the Registration Statement on Form
N-14 and related Combined Prospectus/Proxy Statement dated May 25, 1995.
Ernst & Young LLP
Ernst & Young LLP
Pittsburgh, Pennsylvania
April 11, 1995
Exhibit 14.2
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the
Prospectus/Proxy Statement and the Statement of Additional Information
constituting part of the Registration Statement on Form N-14 (the
"Registration Statement") of Federated U.S. Government Securities Fund:
1-3 Years (formerly Federated Short-Intermediate Government Trust) of
our report dated October 14, 1994, relating to the financial statements
and financial highlights appearing in the September 30, 1994, Sunburst
Short-Intermediate Government Bond Fund Annual Report, which financial
statements and financial highlights are also incorporated by reference
into the Registration Statement. We also consent to the reference to us
in the Statement of Additional Information.
KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Pittsburgh, Pennsylvania
April 14, 1995
Exhibit 16 under Form N-14
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints the Secretary and Assistant Secretary of FEDERATED U. S. GOVERNMENT
SECURITIES FUND:1-3 YEARS 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 thterewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full
power and authority to sign and perform each and every act and
thing requisite and necessary to be
done in connection thereiwth, as fully to all intents and purposes as
each of them might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and
agents, or any of them, or their or his substitute or substitutes,
may lawfully do or cause to be done by virtue thereof.
SIGNATURES TITLE DATE
/s/ John F. Donahue Chairman April 13, 1995
John F. Donahue (Chief Executive Officer)
and Trustee
/s/ Glen R. Johnson President April 13, 1995
Glen R. Johnson
/s/ Edward C. Gonzales Vice President & Treasurer April 13, 1995
Edward C. Gonzales (Principal Financial and
Accounting Officer)
/s/ John T. Conroy, Jr. Trustee April 13, 1995
John T. Conroy, Jr.
/s/ William J. Copeland Trustee April 13, 1995
William J. Copeland
/s/ James E. Dowd Trustee April 13, 1995
James E. Dowd
/s/ Lawrence D. Ellis, M.D. Trustee April 13, 1995
Lawrence D. Ellis, M.D.
/s/ Edward L. Flaherty, Jr. Trustee April 13, 1995
Edward L. Flaherty, Jr.
/s/ Peter E. Madden Trustee April 13, 1995
Peter E. Madden
/s/ Gregor F. Meyer Trustee April 13, 1995
Gregor F. Meyer
/s/ John E. Murray Trustee April 13, 1995
John E. Murray
/s/ Wesley W. Posvar Trustee April 13, 1995
Wesley W. Posvar
/s/ Marjorie P. Smuts Trustee April 13, 1995
Marjorie P. Smuts
Sworn to and subscribed before me this 13th day of April , 1995.
/s/ Marie M. Hamm
Notary Public
Rule 24f-2 Notice
FEDERATED SHORT-INTERMEDIATE GOVERNMENT TRUST
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
1933 Act No. 2-89028
(i) fiscal period for which notice is filed February 29, 1988
(ii) The number or amount of securities of the
same class or series, if any, which had
been registered under the Securities Act
of 1933, other than pursuant to Rule 24f-2
but which remained unsold at March 1, 1987,
the beginning of the Registrant's fiscal
period 0
(iii) The number or amount of securities, if
any, registered during the fiscal period
of this notice other than pursuant to
Rule 24f-2 0 0
(iv) The number or amount of securities
sold during the fiscal period of this
notice
148,277,229
(v) The number or amount of securities sold
during the fiscal period of this notice
in reliance upon registration pursuant
to Rule 24f-2 (see attached Computation
of Fee) -0-
WITNESS the due execution hereof this 15th day of April, 1988.
By: /s/John W. McGonigle
John W. McGonigle
Secretary
COMPUTATION OF FEE
1. Actual aggregate sale price of Registrant's
securities sold pursuant to Rule 24f-2 during
the fiscal period for which the 24f-2 notice
is filed (see Section v)
$1,517,179,100
2. Reduced by the difference between:
(a) actual aggregate redemption price
of such securities redeemed by the
issuer during the fiscal period for
which the 24f-2 notice is filed $2,817,699,919
(b) actual aggregate redemption price
of such redeemed securities
previously applied by the issuer
pursuant to Section 24e(2)(a) for
the fiscal period for which the
24f-2 notice is filed -0-
2,817,699,919
Total amount upon which the fee calculation specified
in Section 6(b) of the Securities Act of 1933 is
based
$(1,300,520,819)
FEE SUBMITTED (1/50 of 1% of Total amount) $ - 0
- -
CONVERSION OF NET REDEMPTIONS ON
RULE 24f-2 NOTICE TO FILING
UNDER RULE 24e-2
When a negative amount appears on the line captioned "Total amount
upon which the fee calculated specified in Section 6(b) of the
Securities Act of 1933 is based", the following calculation should be
made to determine the share information needed to file under Rule 24e-
2:
Total redemptions (per annual report) 276,677,623
Less: Line (v) - Rule 24f-2 Notice 148,277,229
Shares available to register under
Rule 24e-2 128,400,394(a)
Fund's Current Net Asset Value $
10.13(b)
Multiply: Shares available to register
under Rule 24e-2 by the fund's current
net asset value (a x b) to obtain Proposed
Maximum Aggregate Offering Price $1,300,695,991.22
1933 Act File No. 2-89028
1940 Act File No. 811-3947
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. 24 X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No.
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 1-3 YEARS
(FORMERLY FEDERATED SHORT-INTERMEDIATE GOVERNMENT 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:
X immediately upon filing pursuant to paragraph (b)
on _________________ pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)
on pursuant to paragraph (a) of Rule 485.
Registrant has filed with the Securities and Exchange Commission a
declaration pursuant to Rule 24f-2 under the Investment Company Act of
1940, and:
filed the Notice required by that Rule on _________________; or
intends to file the Notice required by that Rule on or about
___________; or
X 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:
Charles H. Morin, Esquire
Dickstein, Shapiro & Morin
2101 L Street, N.W.
Washington, D.C. 20037
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
Proposed
Title of Proposed Maximum
Securities Amount Maximum Aggregate Amount
of
Being Being Offering Price Offering
Registration
Registered Registered Per Unit Price* Fee
Shares of 43,976,568 $10.26 $451,199,690.28
$100.00
Beneficial Interest
(No Par Value)
*Registrant has elected to calculate its filing fee in the manner
described in Rule 24e-2 of the Investment Company Act of 1940. The
total amount of securities redeemed during the previous fiscal year was
43,976,568. The total amount of redeemed securities used for reductions
pursuant to paragraph (a) of Rule 24e-2 or paragraph (c) of Rule 24f-2
during the current year was -0-. The amount of redeemed securities
being used for reduction of the registration fee in this Amendment is
43,976,568.
CONTENTS OF AMENDMENT
This Post-Effective Amendment No. 24 to the Registration Statement of
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 1-3 YEARS (FORMERLY FEDERATED
SHORT-INTERMEDIATE GOVERNMENT TRUST) is comprised of the following
papers and documents:
1. The facing sheet to register a definite
number of shares of beneficial interest,
no par value, of FEDERATED U.S. GOVERNMENT SECURITIES FUND: 1-3
YEARS (FORMERLY FEDERATED SHORT-INTERMEDIATE GOVERNMENT TRUST);
2. The legal opinion of counsel for the Registrant, as
to the legality of shares being offered; and as to
the eligibility to become effective pursuant to
Paragraph (b) of Rule 485; and
3. Signature page.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, FEDERATED U.S.
GOVERNMENT SECURITIES FUND: 1-3 YEARS (FORMERLY FEDERATED SHORT-
INTERMEDIATE GOVERNMENT TRUST), certifies that it meets all of the
requirements for effectiveness of this Amendment to its Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and
has duly caused this Amendment to its Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Pittsburgh and Commonwealth of Pennsylvania on the 13th day
of April, 1995.
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 1-3 YEARS
(FORMERLY FEDERATED SHORT-INTERMEDIATE GOVERNMENT TRUST)
BY: /s/G. Andrew Bonnewell
G. Andrew Bonnewell, Assistant Secretary
Attorney in Fact for John F. Donahue
April 13, 1995
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to its Registration Statement has been signed below by the
following person in the capacity and on the date indicated:
NAME TITLE DATE
By: /s/G. Andrew Bonnewell
G. Andrew Bonnewell Attorney In Fact April 13, 1995
Assistant Secretary For the Persons
Listed Below
NAME TITLE
John F. Donahue* Chairman and Trustee
(Chief Executive Officer)
Glen R. Johnson* President
Edward C. Gonzales* Vice President and Treasurer
(Principal Financial and
Accounting Officer)
Edward L. Flaherty, Jr.* Trustee
Gregor F. Meyer* Trustee
Marjorie P. Smuts* Trustee
William J. Copeland* Trustee
James E. Dowd* Trustee
Lawrence D. Ellis, M.D.* Trustee
Wesley W. Posvar* Trustee
Peter E. Madden* Trustee
John T. Conroy, Jr.* Trustee
* By Power of Attorney
