Federated Equity Funds (ICA No. 811-4017)
Federated American Leaders Fund, Inc. (ICA No. 811-1704)
Federated International Series, Inc. (ICA No. 811-3984)
Federated Investment Series Funds, Inc. (ICA No. 811-07021)
Federated Stock and Bond Fund, Inc. (ICA No. 811-1)
Money Market Obligations Trust (ICA No. 811-5950)
INITIAL SHAREHOLDER LETTER
Date
Dear IAI Mutual Fund Shareholder:
We are pleased to announce that Federated Investors, Inc. and Investment
Advisers, Inc. have agreed to a transaction merging the IAI Mutual Funds into
Federated Mutual Funds. Upon your approval, Federated will be responsible for
portfolio management and shareholder servicing of the funds.
With $125 billion in assets and 45 years of investment management
experience, Federated offers the economy of scale we believe is necessary to
succeed in today's increasingly competitive financial marketplace. Based on
managed assets, Federated ranks in the top 5% of equity managers and the top 6%
of fixed income managers.* It is the 10th largest mutual fund company in the
country** and has made a significant commitment to the development of superior
portfolio management strategies and world-class shareholder services.
Federated has considerable experience in smoothly managing transitions such
as this. Federated has won customer service awards from DALBAR, a research and
publishing firm that monitors the mutual fund business. In their 1999 Bank
Study, Federated earned high honors for the eighth consecutive year by capturing
#1 rankings in 18 out of 53 categories.
Following this merger, Investment Advisers, Inc. will continue as an
institutional money manager, managing large accounts for corporate and
non-profit clients.
IMPORTANT POINTS CONCERNING THE MERGER
o If approved, it will be completed during September 2000.
o It is designed to be a tax-free event for shareholders.
o The Federated Funds have substantially similar investment objectives and
management styles when compared with the corresponding IAI Funds.
WHAT TO EXPECT
During the month of July, you will receive a proxy statement asking for your
approval of this merger. The proxy will provide you with details of the proposed
merger so that you can make an informed decision. The Board of Directors of the
IAI Mutual Funds has carefully considered this proposal and unanimously
recommends that you vote to approve the merger. We would like to highlight what
we believe are the most important benefits to you as a shareholder:
o COMPETITIVE PERFORMANCE HISTORY
While past performance is no guarantee of future performance, we are
impressed with the quality of intensive, bottom-up research and
fundamental analysis that characterizes Federated's world-class investment
process. We believe that you can look forward to the continued opportunity
for competitive performance with Federated's team.
o COMPETITIVE FUND EXPENSES
All Federated Funds have expense ratios competitive with industry
averages.
O A DIVERSIFIED PRODUCT LINE
Federated manages and distributes funds that span the full spectrum of
investment objectives and asset classes, allowing investors to construct
well-diversified portfolios to suit their individual risk tolerance.
PURCHASE AND EXCHANGE INTO PRODUCTS AT NAV
IAI shareholders of record at the time of the acquisition will be allowed to
purchase or exchange into any other Federated Fund on a NO-LOAD BASIS, provided
the amount invested meets the fund's minimum dollar amount. You will not pay a
sales charge to become a shareholder of the Federated funds, nor will you have
to pay any sales charge in the future if you wish to make additional purchases
or exchanges into other Federated funds. This is of great benefit because most
of Federated's funds have a front-end load, which is being waived for IAI
shareholders.
YOU SOON WILL BE RECEIVING DETAILED PROXY INFORMATION ABOUT THE ACQUISITION. WE
ENCOURAGE YOU TO READ THE MATERIAL CAREFULLY BECAUSE IT CONTAINS IMPORTANT
INFORMATION. IN ADDITION, YOU CAN OBTAIN A FREE COPY OF THE PROXY FROM THE SEC
BY ACCESSING THEIR WEB SITE AT WWW.SEC.GOV. For your own information, the
attached supplement includes a list of the IAI and Federated funds affected by
this merger. In all cases, except for the money market fund, reference the Class
A shares of the Federated fund. IAI Investor Services has set up a hotline to
field questions regarding the merger - you can call 1-800-945-3863 or visit the
IAI Web site at WWW.IAIFUNDS.COM. You may also call 1-800-245-5777 to speak
directly with an IAI representative. For more complete information about the
Federated funds, including charges and expenses, call for a prospectus, check
your local paper or access their Web site at WWW.FEDERATEDINVESTORS.COM.
Investors should read the prospectus carefully before investing.
We believe this is a good opportunity for our shareholders and trust you will
too. Again, we sincerely appreciate your business and thank you for your
confidence in our firm and products. It has been a privilege to serve each
shareholder in the IAI mutual funds.
Sincerely,
J. Peter Thompson Keith Wirtz
Chairman President
IAI Mutual Funds Board of Directors IAI Mutual Funds
Federated Securities Corp., distributor of the Federated funds.
*Strategic Insight, 4/28/00
**Investment Company Institute 4/28/00
IAI Investment Funds II, Inc.
File No. 33-61834
IAI Investment Funds IV, Inc.
File No. 2-66885
IAI Investment Funds VI, Inc.
File No. 33-40496
IAI Investment Funds VII, Inc.
File No. 2-39560
IAI Investment Funds VIII, Inc.
File No. 2-84589
SUPPLEMENT DATED JUNE 19, 2000
TO THE JOINT PROSPECTUS DATED AUGUST 1, 1999
OF
IAI CAPITAL APPRECIATION FUND (a portfolio of IAI Investment Funds VI, Inc.) IAI
EMERGING GROWTH FUND (a portfolio of IAI Investment Funds VI, Inc.) IAI GROWTH
FUND (a portfolio of IAI Investment Funds II, Inc.) IAI GROWTH AND INCOME FUND
(a portfolio of IAI Investment Funds VII, Inc.) IAI MIDCAP GROWTH FUND (a
portfolio of IAI Investment Funds VI, Inc.) IAI REGIONAL FUND (a portfolio of
IAI Investment Funds IV, Inc.) IAI LONG TERM GROWTH FUND (formerly known as IAI
Value Fund) (a portfolio of IAI Investment Funds VIII, Inc.)
Proposed Combinations with Federated Funds
On June 12, 2000, the Board of Directors of the Funds named above approved
certain transactions (the "Reorganizations") in which the Funds will be combined
into certain funds (the "Federated Funds") which are advised by subsidiaries of
Federated Investors, Inc. ("Federated") and which have investment objectives and
policies substantially similar to those of the Funds. The Reorganizations were
proposed in conjunction with the sale by Investment Advisers, Inc. ("IAI"), the
investment adviser to the Funds, of its mutual fund advisory business to
Federated. On June 16, 2000 IAI and Federated reached a definitive agreement
covering such a sale.
In the Reorganizations, Fund shareholders will receive, in exchange for their
Fund shares, Class A shares of the corresponding Federated Funds which have an
equivalent net asset value at the closing date. The Federated Funds into which
the respective Funds are proposed to be combined are as follows:
IAI Capital Appreciation Fund Federated Aggressive Growth Fund IAI
Emerging Growth Fund Federated Aggressive Growth Fund IAI Growth Fund
Federated Large Cap Growth Fund IAI Growth and Income Fund Federated
American Leaders Fund IAI Midcap Growth Fund Federated Growth Strategies
Fund IAI Regional Fund Federated Capital Appreciation Fund IAI Long Term
Growth Fund (formerly Federated Aggressive Growth Fund
known as IAI Value Fund)
The Reorganizations are expected to be tax-free to Fund shareholders. In
addition, Fund shareholders will not bear any of the expenses of the
Reorganizations. After the Reorganizations, Fund shareholders will be permitted
to purchase additional shares of the Federated Funds and of other funds advised
by subsidiaries of Federated without paying any front-end sales loads.
The Reorganizations will take place only if Fund shareholders approve them. The
Funds' Board of Directors has called a special meeting of Fund shareholders to
be held on September 8, 2000, at which shareholders will vote on the
Reorganizations. Proxy materials for the special meeting will be mailed to
shareholders in July. These proxy materials will contain more complete
information concerning the Reorganizations, and you should review them carefully
before casting your vote on the Reorganizations. You do not need to take any
action regarding the Reorganizations before you receive these proxy materials.
If shareholders approve the Reorganizations, the Reorganizations are expected to
be completed shortly thereafter, assuming that other customary closing
conditions are satisfied.
Federated is one of the largest mutual fund companies in the United States,
managing over $125 billion in approximately 175 mutual funds and separate
accounts as of March 31, 2000. Federated, a publicly held company, was founded
in 1955 and is headquartered in Pittsburgh, Pennsylvania.
Change in Name of Former IAI Value Fund
Also on June 12, 2000, the Board of Directors approved changing the name of IAI
Value Fund to IAI Long Term Growth Fund. The Board also approved changes in
certain of this Fund's non-fundamental investment policies. As a result of these
changes, the Principal Investment Strategies and Principal Risks of the IAI Long
Term Growth Fund are the same as those for the IAI Capital Appreciation Fund set
forth at page 3 of the August 1, 1999 Prospectus.
IAI Investment Funds VI, Inc.
File No. 33-40496
SUPPLEMENT DATED JUNE 19, 2000
TO THE PROSPECTUS DATED AUGUST 1, 1999
OF
IAI BALANCED FUND (a portfolio of IAI Investment Funds VI, Inc.)
Proposed Combination with Federated Stock and Bond Fund, Inc.
On June 12, 2000, the Board of Directors of IAI Investment Funds VI, Inc.
approved a transaction (the "Reorganization") in which IAI Balanced Fund (the
"Fund") will be combined into Federated Stock and Bond Fund, Inc. (the
"Federated Fund"), which is advised by a subsidiary of Federated Investors, Inc.
("Federated") and which has investment objectives and policies substantially
similar to those of the Fund. The Reorganization was proposed in conjunction
with the sale by Investment Advisers, Inc. ("IAI"), the investment adviser to
the Fund, of its mutual fund advisory business to Federated. On June 16, 2000
IAI and Federated reached a definitive agreement covering such a sale.
In the Reorganization, Fund shareholders will receive, in exchange for their
Fund shares, Class A shares of the Federated Fund which have an equivalent net
asset value at the closing date. The Reorganization is expected to be tax-free
to Fund shareholders. In addition, Fund shareholders will not bear any of the
expenses of the Reorganization. After the Reorganization, Fund shareholders will
be permitted to purchase additional shares of the Federated Fund and of other
funds advised by subsidiaries of Federated without paying any front-end sales
loads.
The Reorganization will take place only if Fund shareholders approve it. The
Fund's Board of Directors has called a special meeting of Fund shareholders to
be held on September 8, 2000, at which shareholders will vote on the
Reorganization. Proxy materials for the special meeting will be mailed to
shareholders in July. These proxy materials will contain more complete
information concerning the Reorganization, and you should review them carefully
before casting your vote on the Reorganization. You do not need to take any
action regarding the Reorganization before you receive these proxy materials. If
shareholders approve the Reorganization, the Reorganization is expected to be
completed shortly thereafter, assuming that other customary closing conditions
are satisfied.
Federated is one of the largest mutual fund companies in the United States,
managing over $125 billion in approximately 175 mutual funds and separate
accounts as of March 31, 2000. Federated, a publicly held company, was founded
in 1955 and is headquartered in Pittsburgh, Pennsylvania.
IAI Investment Funds I, Inc.
File No. 2-59115
SUPPLEMENT DATED JUNE 19, 2000
TO THE PROSPECTUS DATED APRIL 1, 2000
OF
IAI BOND FUND (a portfolio of IAI Investment Funds I, Inc.)
Proposed Combination with Federated Bond Fund (a portfolio of Federated
Investment Series Funds, Inc.)
On June 12, 2000, the Board of Directors of IAI Investment Funds I, Inc.
approved a transaction (the "Reorganization") in which IAI Bond Fund (the
"Fund") will be combined into Federated Bond Fund (the "Federated Fund"), a
portfolio of Federated Investment Series Funds, Inc. which is advised by a
subsidiary of Federated Investors, Inc. ("Federated") and which has investment
objectives and policies substantially similar to those of the Fund. The
Reorganization was proposed in conjunction with the sale by Investment Advisers,
Inc. ("IAI"), the investment adviser to the Fund, of its mutual fund advisory
business to Federated. On June 16, 2000 IAI and Federated reached a definitive
agreement covering such a sale.
In the Reorganization, Fund shareholders will receive, in exchange for their
Fund shares, Class A shares of the Federated Fund which have an equivalent net
asset value at the closing date. The Reorganization is expected to be tax-free
to Fund shareholders. In addition, Fund shareholders will not bear any of the
expenses of the Reorganization. After the Reorganization, Fund shareholders will
be permitted to purchase additional shares of the Federated Fund and of other
funds advised by subsidiaries of Federated without paying any front-end sales
loads.
The Reorganization will take place only if Fund shareholders approve it. The
Fund's Board of Directors has called a special meeting of Fund shareholders to
be held on September 8, 2000, at which shareholders will vote on the
Reorganization. Proxy materials for the special meeting will be mailed to
shareholders in July. These proxy materials will contain more complete
information concerning the Reorganization, and you should review them carefully
before casting your vote on the Reorganization. You do not need to take any
action regarding the Reorganization before you receive these proxy materials. If
shareholders approve the Reorganization, the Reorganization is expected to be
completed shortly thereafter, assuming that other customary closing conditions
are satisfied.
Federated is one of the largest mutual fund companies in the United States,
managing over $125 billion in approximately 175 mutual funds and separate
accounts as of March 31, 2000. Federated, a publicly held company, was founded
in 1955 and is headquartered in Pittsburgh, Pennsylvania.
IAI Investment Funds III, Inc.
File No. 33-10207
SUPPLEMENT DATED JUNE 19, 2000
TO THE PROSPECTUS DATED MARCH 1, 2000
OF
IAI INTERNATIONAL FUND (a portfolio of IAI Investment Funds III, Inc.)
Proposed Combination with Federated International Equity Fund (a portfolio of
Federated International Series Inc.)
On June 12, 2000, the Board of Directors of IAI Investment Funds III, Inc.
approved a transaction (the "Reorganization") in which IAI International Fund
(the "Fund") will be combined into Federated International Equity Fund (the
"Federated Fund"), a portfolio of Federated International Series Inc. which is
advised by a subsidiary of Federated Investors, Inc. ("Federated") and which has
investment objectives and policies substantially similar to those of the Fund.
The Reorganization was proposed in conjunction with the sale by Investment
Advisers, Inc. ("IAI"), the investment adviser to the Fund, of its mutual fund
advisory business to Federated. On June 16, 2000 IAI and Federated reached a
definitive agreement covering such a sale.
In the Reorganization, Fund shareholders will receive, in exchange for their
Fund shares, Class A shares of the Federated Fund which have an equivalent net
asset value at the closing date. The Reorganization is expected to be tax-free
to Fund shareholders. In addition, Fund shareholders will not bear any of the
expenses of the Reorganization. After the Reorganization, Fund shareholders will
be permitted to purchase additional shares of the Federated Fund and of other
funds advised by subsidiaries of Federated without paying any front-end sales
loads.
The Reorganization will take place only if Fund shareholders approve it. The
Fund's Board of Directors has called a special meeting of Fund shareholders to
be held on September 8, 2000, at which shareholders will vote on the
Reorganization. Proxy materials for the special meeting will be mailed to
shareholders in July. These proxy materials will contain more complete
information concerning the Reorganization, and you should review them carefully
before casting your vote on the Reorganization. You do not need to take any
action regarding the Reorganization before you receive these proxy materials. If
shareholders approve the Reorganization, the Reorganization is expected to be
completed shortly thereafter, assuming that other customary closing conditions
are satisfied.
Federated is one of the largest mutual fund companies in the United States,
managing over $125 billion in approximately 175 mutual funds and separate
accounts as of March 31, 2000. Federated, a publicly held company, was founded
in 1955 and is headquartered in Pittsburgh, Pennsylvania.
IAI Investment Funds VI, Inc.
File No. 33-40496
SUPPLEMENT DATED JUNE 19, 2000
TO THE PROSPECTUS DATED JUNE 1, 2000
OF
IAI MONEY MARKET FUND (a portfolio of IAI Investment Funds VI, Inc.)
Proposed Combination with Automated Cash Management Trust
(a portfolio of Money Market Obligations Trust)
On June 12, 2000, the Board of Directors of IAI Investment Funds VI, Inc.
approved a transaction (the "Reorganization") in which IAI Money Market Fund
(the "Fund") will be combined into Automated Cash Management Trust (the
"Federated Fund"), a portfolio of Money Market Obligations Trust which is
advised by a subsidiary of Federated Investors, Inc. ("Federated") and which has
investment objectives and policies substantially similar to those of the Fund.
The Reorganization was proposed in conjunction with the sale by Investment
Advisers, Inc. ("IAI"), the investment adviser to the Fund, of its mutual fund
advisory business to Federated. On June 16, 2000 IAI and Federated reached a
definitive agreement covering such a sale.
In the Reorganization, Fund shareholders will receive, in exchange for their
Fund shares, Institutional Service Shares of the Federated Fund which have an
equivalent net asset value at the closing date. The Reorganization is expected
to be tax-free to Fund shareholders. In addition, Fund shareholders will not
bear any of the expenses of the Reorganization. After the Reorganization, Fund
shareholders will be permitted to purchase additional shares of the Federated
Fund and of other funds advised by subsidiaries of Federated without paying any
front-end sales loads.
The Reorganization will take place only if Fund shareholders approve it. The
Fund's Board of Directors has called a special meeting of Fund shareholders to
be held on September 8, 2000, at which shareholders will vote on the
Reorganization. Proxy materials for the special meeting will be mailed to
shareholders in July. These proxy materials will contain more complete
information concerning the Reorganization, and you should review them carefully
before casting your vote on the Reorganization. You do not need to take any
action regarding the Reorganization before you receive these proxy materials. If
shareholders approve the Reorganization, the Reorganization is expected to be
completed shortly thereafter, assuming that other customary closing conditions
are satisfied.
Federated is one of the largest mutual fund companies in the United States,
managing over $125 billion in approximately 175 mutual funds and separate
accounts as of March 31, 2000. Federated, a publicly held company, was founded
in 1955 and is headquartered in Pittsburgh, Pennsylvania.
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment
No.______)
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ X ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or
Sec. 240.14a-12
Federated International Series, Inc.
..............................................................................
(Name of Registrant as Specified In Its Charter)
Federated Investors, Inc.
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ]No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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5. Total fee paid:
[ ] Fee paid previously with preliminary proxy materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
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