1933 Act File No. 2-91090
1940 Act File No. 811-4017
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. 32 ............ X
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 27 ......................... X
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FEDERATED EQUITY FUNDS
(formerly, Federated Growth Trust)
(Exact Name of Registrant as Specified in Charter)
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
John W. McGonigle, Esquire,
Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
on pursuant to paragraph (b)
------------
60 days after filing pursuant to paragraph (a) (i)
on pursuant to paragraph (a) (i).
X 75 days after filing pursuant to paragraph (a)(ii)
on pursuant to paragraph (a)(ii) of Rule 485.
-----------------
If appropriate, check the following box:
This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has filed with the Securities and Exchange Commission a
declaration pursuant to Rule 24e-2 under the Investment Company Act of
1940, and:
X filed the Notice required by that Rule on December 15, 1995 ; or
- - -----
intends to file the Notice required by that Rule on or about
December 15, 1996; or
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during the most recent fiscal year did not sell any securities pursuant
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to Rule 24f-2 under the Investment Company Act of 1940, and, pursuant
to Rule 24f-2(b)(2), need not file the Notice.
Copy to:
Charles H. Morin, Esquire
Dickstein, Shapiro & Morin, L.L.P.
2101 L Street, N.W.
Washington, D.C. 20037
CROSS-REFERENCE SHEET
This amendment to the Registration Statement of Federated Equity Funds
(formerly, Federated Growth Trust), which is comprised of four portfolios:
(1) Federated Growth Strategies Fund consisting of three classes of shares,
(a) Class A Shares, (b) Class B Shares, and (c) Class C Shares; (2)
Federated Small Cap Strategies Fund consisting of three classes of shares,
(a) Class A Shares, (b) Class B Shares, and (c) Class C Shares; (3)
Federated Capital Appreciation Fund consisting of three classes of shares,
(a) Class A Shares, (b) Class B Shares, and (c) Class C Shares, and (4)
Federated Aggressive Growth Fund consisting of three classes of shares, (a)
Class A Shares, (b) Class B Shares, and (c) Class C Shares, relates only to
Federated Aggressive Growth Fund and is comprised of the following (with
the exception of Item 23, the remaining references to other portfolios have
been kept for easier cross- reference):
PART A. INFORMATION REQUIRED IN A PROSPECTUS.
Prospectus Heading
(Rule 404(c) Cross Reference)
Item 1. Cover Page...............(1-4) Cover Page.
Item 2. Synopsis.................(1-4) Summary of Fund Expenses.
Item 3. Condensed Financial
Information..............(1) Financial Highlights.
Item 4. General Description of
Registrant...............(1,3,4) General Information;
(2)Synopsis;(1-4) Investment
Information; (1-4) Investment Objective;
(1-4) Investment Policies; (1-4)
Investment Limitations; (1-4)
Performance Information; (1,4)Portfolio
Turnover.
Item 5. Management of the Fund...(1-4) Trust Information; (1-4)
Management of the Trust; (1-4)
Distribution of Shares; (1-4)
Administration of the Fund;
(1(a),(b),(c)-4) Expenses of the Fund
and Class A Shares, Class B Shares, and
Class C Shares; (1-4) Brokerage
Transactions.
Item 6. Capital Stock and Other
Securities...............(1-4) Shareholder Information; (1-4)
Voting Rights; (1-4) Tax Information;
(1-4) Federal Income Tax; (1-4) State
and Local Taxes; (1(a)) Other Classes of
Shares.
Item 7. Purchase of Securities Being
Offered..................(1-4) Net Asset Value; (1-4) Investing
in the Fund; (1(a),(b),(c)-3) How to
Purchase Shares; (1(a))What Shares Cost;
(1(a),(b),(c)-4) Investing in Class A
Shares; (1(a),(b),(c)-4) Investing in
Class B Shares; (1(a),(b),(c)-4)
Investing in Class C Shares; (1-4)
Special Purchase Features; (1-4)
Exchange Privilege.
Item 8. Redemption or Repurchase.(1-4) How to Redeem Shares; (1-4)
Special Redemption Features; (1-4)
Contingent Deferred Sales Charge; (1-4)
Elimination of Contingent Deferred Sales
Charge.
Item 9. Pending Legal Proceedings None.
PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION.
Item 10. Cover Page...............(1-4) Cover Page.
Item 11. Table of Contents........(1-4) Table of Contents.
Item 12. General Information and
History..................(1-4) General Information About the
Fund; (1-4) About Federated Investors;
(1,4) Massachusetts Partnership Law.
Item 13. Investment Objectives and
Policies.................(1-4) Investment Objective and Policies.
Item 14. Management of the Fund...(1-4) Federated Equity Funds Management.
Item 15. Control Persons and Principal
Holders of Securities....(1-4) Fund Ownership.
Item 16. Investment Advisory and Other
Services.................(1-4) Investment Advisory Services; (1-
4) Other Services (2-3) Administrative
Services; (2-3) Transfer Agent and
Dividend Disbursing Agent; (4) Transfer
Agent;(1-4) Distribution Plan and
Shareholder Services Agreement.
Item 17. Brokerage Allocation.....(1-4) Brokerage Transactions.
Item 18. Capital Stock and Other
Securities...............Not applicable.
Item 19. Purchase, Redemption and
Pricing of Securities Being
Offered .................(1-4) Purchasing Shares; (1-4)
Determining Net Asset Value; (1-4)
Redeeming Shares; (1-4) Exchanging
Securities for Shares; (3) Current
Distributions.
Item 20. Tax Status...............(1-4) Tax Status.
Item 21. Underwriters.............Not applicable.
Item 22. Calculation of Performance
Data.....................(1-4) Total Return; (1-4) Yield; (1-4)
Performance Comparisons; (1-4) Appendix.
Item 23. Financial Statements.....Not applicable
FEDERATED AGGRESSIVE GROWTH FUND
(A PORTFOLIO OF FEDERATED EQUITY FUNDS)
CLASS A SHARES
CLASS B SHARES
CLASS C SHARES
PROSPECTUS
The shares of Federated Aggressive Growth Fund (the "Fund") represent
interests in a diversified portfolio of Federated Equity Funds (the
"Trust"), an open-end management investment company (a mutual fund). The
Fund seeks appreciation of capital by investing primarily in equity
securities of companies with prospects for above-averge appreciation.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF
ANY BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK, AND ARE NOT INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR
ANY OTHER GOVERNMENT AGENCY. INVESTMENT IN CLASS A SHARES, CLASS B SHARES
OR CLASS C SHARES INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
This prospectus contains the information you should read and know before
you invest in the Fund. Keep this prospectus for future reference.
The Fund has also filed a Statement of Additional Information dated
November 15, 1996, with the Securities and Exchange Commission (`SEC'').
The information contained in the Statement of Additional Information is
incorporated by reference into this prospectus. You may request a copy of
the Statement of Additional Information or a paper copy of this prospectus,
if you have received your prospectus electronically, free of charge by
calling 1-800-341-7400. To obtain other information or to make inquiries
about the Fund, contact your financial intermediary. The Statement of
Additional Information, material incorporated by reference into this
document, and other information regarding the Fund is maintained
electronically with the SEC at Internet Web site (http://www.sec.gov).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus dated November 15, 1996
SUMMARY OF FUND EXPENSES
FEDERATED AGGRESSIVE GROWTH FUND
SUMMARY OF FUND EXPENSES
CLASS A SHARES
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases (as a percentage of offering
price)..................................
Maximum Sales Charge Imposed on Reinvested Dividends (as a percentage of
offering price)...............
Contingent Deferred Sales Charge (as a percentage of original purchase
price or redemption proceeds, as applicable) (1)....
Redemption Fee (as a percentage of amount redeemed, if applicable)
........................................
Exchange Fee........................................
ANNUAL OPERATING EXPENSES
(As a percentage of projected average net assets) *
Management Fee .....................................
12b-1 Fee (3)..................................... .
Total Other Expenses ...............................
Shareholder Services Fee ............
Total Operating Expenses (4)........................
(1) Class A Shares purchased with the proceeds of a redemption of shares
of an unaffiliated investment company purchased or redeemed with a sales
load and not distributed by Federated Securities Corp. may be charged a
contingent deferred sales charge of 0.50% for redemptions made within one
full year of purchase. See `Contingent Deferred Sales Charge''.
(2)
(3)
(4) The operating expenses are estimated to be absent the anticipated
voluntary waiver.
*Total operating expenses in the table above are estimated based on average
expenses expected to be incurred during the period ending October 31, 1997.
During the course of this period, expenses may be more or less than the
average amount shown.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of Class A Shares will bear,
either directly or indirectly. For more complete descriptions of the
various costs and expenses, see "Investing in Class A Shares" and "Fund
Information". Wire--transferred redemptions of less than $5,000 may be
subject to additional fees.
EXAMPLE 1 year 3 years
You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and
(2) redemption at the end of each time period.....
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
THIS EXAMPLE IS BASED ON ESTIMATED DATA FOR CLASS A SHARES' FISCAL YEAR
ENDING NOVEMBER 30, 1996.
FEDERATED AGGRESSIVE GROWTH FUND
SUMMARY OF FUND EXPENSES
CLASS B SHARES
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases (as a percentage of offering
price)..................................
Maximum Sales Charge Imposed on Reinvested Dividends (as a percentage of
offering price)...............
Contingent Deferred Sales Charge (as a percentage of original purchase
price or redemption proceeds, as applicable)(1) ....
Redemption Fee (as a percentage of amount redeemed, if applicable)
........................................
Exchange Fee........................................
ANNUAL SHARES OPERATING EXPENSES
(As a percentage of projected average net assets) *
Management Fee .....................................
12b-1 Fee......................................... .
Total Other Expenses ...............................
Shareholder Services Fee ............
Total Operating Expenses (3)(4) ....................
(1) The contingent deferred sales charge is
(2)
(3) Class B Shares convert to Class A Shares (which pay lower ongoing
expenses) approximately eight years after purchase.
(4) The operating expenses are estimated to be absent the anticipated
voluntary waiver
*Total Class B Shares operating expenses in the table above are estimated
based on average expenses expected to be incurred during the period ending
October 31, 1997. During the course of this period, expenses may be more
or less than the average amount shown.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of Class B Shares will bear,
either directly or indirectly. For more complete descriptions of the
various costs and expenses, see "Investing in Class B Shares" and "Fund
Information". Wire--transferred redemptions of less than $5,000 may be
subject to additional fees.
Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charges permitted under the rules of the National
Association of Securities Dealers, Inc.
EXAMPLE 1 year 3 years
You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and
(2) redemption at the end of each time period.....
You would pay the following expenses on the same
investment, assuming no redemption....
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
THIS EXAMPLE IS BASED ON ESTIMATED DATA FOR CLASS B SHARES' FISCAL YEAR
ENDING OCTOBER 31, 1997.
FEDERATED AGGRESSIVE GROWTH FUND
SUMMARY OF FUND EXPENSES
CLASS C SHARES
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases (as a percentage of offering
price)..................................
Maximum Sales Charge Imposed on Reinvested Dividends (as a percentage of
offering price)...............
Contingent Deferred Sales Charge (as a percentage of original purchase
price or redemption proceeds, as applicable)(1).....
Redemption Fee (as a percentage of amount redeemed, if applicable)
........................................
Exchange Fee........................................
ANNUAL OPERATING EXPENSES
(As a percentage of projected average net assets)*
Management Fee .....................................
12b-1 Fee......................................... .
Total Other Expenses ...............................
Shareholder Services Fee.............
Total Operating Expenses (3)........................
(1) The contingent deferred sales charge assessed is 1:00% of the lesser
of the original purchase price of the net asset value of Shares redeemed
within one year of their purchase date. For a more complete description,
see `Redeeming Class C Shares''
(2)
(3) *Total operating expenses in the table above are estimated based on
average expenses expected to be incurred during the period ending October
31, 1997. During the course of this period, expenses may be more or less
than the average amount shown.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of Class C Shares will bear,
either directly or indirectly. For more complete descriptions of the
various costs and expenses, see "Investing in Class C Shares" and "Fund
Information". Wire--transferred redemptions of less than $5,000 may be
subject to additional fees.
Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charges permitted under the rules of the National
Association of Securities Dealers, Inc.
EXAMPLE 1 year 3 years
You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and
(2) redemption at the end of each time period.....
You would pay the following expenses on the same
investment, assuming no redemption....
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
THIS EXAMPLE IS BASED ON ESTIMATED DATA FOR CLASS C SHARES' FISCAL YEAR
ENDING OCTOBER 31, 1997.
GENERAL INFORMATION
The Trust was established as a Massachusetts business trust under a
Declaration of Trust dated April 17, 1984. The Trust's address is
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779. The
Declaration of Trust permits the Trust to offer separate series of shares
of beneficial interest representing interests in separate portfolios of
securities. As of the date of this prospectus, the Board of Trustees has
established three classes of shares for the Fund, known as Class A Shares,
Class B Shares, and Class C Shares (individually and collectively as the
context requires, "Shares"). Shares of the Fund are designed for
individuals and intermediaries seeking appreciation of capital by investing
in a diversified portfolio primarily consisting of equity securities of
companies with prospects for above-average appreciation.
The Fund's current net asset value and offering price may be found in the
mutual funds section of local newspapers under "Federated Class A, Class B,
or Class C, as appropriate.
INVESTMENT INFORMATION
INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide appreciation of capital.
The investment objective cannot be changed without approval of
shareholders. While there is no assurance that the Fund will achieve its
investment objective, it endeavors to do so by following the investment
policies described in this prospectus.
INVESTMENT POLICIES
The Fund pursues its investment objective by investing in at least 65% of
its assets in equity securities of companies with prospects for above-
average appreciation. Equity securities include common stocks , preferred
stocks, and investment grade securities (including debt securities) that
are convertible into common stocks. Unless indicated otherwise, the
investment policies of the Fund may be changed by the Trustees without the
approval of shareholders. Shareholders will be notified before any material
changes in these policies become effective.
ACCEPTABLE INVESTMENTS. Federated Management, the Fund's investment
adviser (the `Adviser''), creates a universe of growing companies by using
proprietary software and research models that incorporate important
attributes of successful growth, such as upward earnings estimate
revisions, positive earnings surprises, accelerated sales and earnings
growth. Using fundamental research, the Adviser evaluates each company's
earnings quality and assesses the sustainability of the company's current
growth trends. Through this highly disciplined process, the Adviser seeks
to construct an investment portfolio that possesses strong growth
characteristics.
The Fund will not be restricted to specific market capitalization
requirements. Sector weightings will be restricted to no greater than 300%
of the Standard and Poor's 500 sector weightings or no more than 20% of the
total portfolio, whichever is greater. The Fund will diversify its holdings
across at least 100 companies, but generally will not exceed 200 company
holdings.
The securities in which the Fund invests include, but are not limited to:
. common stock of U.S. companies that are considered by the Adviser
to have potential for above-average appreciation;
. corporate securities;
. convertible securities;
. other corporate securities, including preferred stocks and
corporate debt obligations;
. securities of foreign issuers; and
. securities issued or guaranteed by the U.S. government, its
agencies, or instrumentalities.
COMMON STOCK. As described above, the Fund invests primarily in equity
securities. As with other mutual funds that invest primarily in equity
securities, the Fund is subject to market risks. That is, the possibility
exists that common stocks will decline over short or even extended periods
of time, and the United States equity market tends to be cyclical,
experiencing both periods when stock prices generally increase and periods
when stock prices generally decrease. However, since the Fund invests in
growth-oriented equity securities, there are some additional risk factors
associated with investment in the Fund. Growth-oriented stocks may include
issuers with smaller capitalization. Small and medium capitalization
stocks have historically been more volatile in price than larger
capitalization stocks, such as those included in the Standard & Poor's 500
Index. This is because, among other things, smaller companies have a lower
degree of liquidity in the equity market and tend to have a greater
sensitivity to changing economic conditions. That is, the stock of small
and medium capitalization companies may decline in price as the price of
large company stocks rise, or vice versa. Therefore, investors should
expect that the Fund will be more volatile than, and may fluctuate
independently of, broad market indices such as the Standard & Poor's 500
Index. Additionally, many small capitalization companies tend to have
operating histories of less than three years.
CONVERTIBLE SECURITIES. Convertible securities are fixed income securities
which may be exchanged or converted into a predetermined number of the
issuer's underlying common stock at the option of the holder during a
specified time period. The Fund considers convertible securities to be
equity securities. Convertible securities may take the form of convertible
preferred stock, convertible bonds or debentures, units consisting of
"usable" bonds and warrants, or a combination of the features of several of
these securities. The investment characteristics of each convertible
security vary widely, which allows convertible securities to be employed
for different investment objectives. The convertible securities in which
the Fund invests may be rated below investment grade and considered
speculative.
Convertible bonds and convertible preferred stocks generally retain the
investment characteristics of fixed income securities until they have been
converted, but also react to movements in the underlying equity securities.
The holder is entitled to receive the fixed income of a bond or the
dividend preference of a preferred stock until the holder elects to
exercise the conversion privilege. Usable bonds are corporate bonds that
can be used, in whole or in part, customarily at full face value, in lieu
of cash to purchase the issuer's common stock. When owned as part of a unit
along with warrants, which are options to buy the common stock, they
function as convertible bonds, except that the warrants generally will
expire before the bond's maturity. Convertible securities are senior to
equity securities and, therefore, have a claim to assets of the corporation
prior to the holders of common stock in the case of liquidation. However,
convertible securities are generally subordinated to similar nonconvertible
securities of the same company. The interest income and dividends from
convertible bonds and preferred stocks provide a stable stream of income
with generally higher yields than common stocks, but lower than
nonconvertible securities of similar quality. The Fund will exchange or
convert the convertible securities held in its portfolio into shares of the
underlying common stock when, in the Adviser's opinion, the investment
characteristics of the underlying common shares will assist the Fund in
achieving its investment objective. Otherwise, the Fund will hold or trade
the convertible securities. In selecting convertible securities for the
Fund, the Adviser evaluates the investment characteristics of the
convertible security as a fixed income instrument, and the investment
potential of the underlying equity security for capital appreciation. In
evaluating these matters with respect to a particular convertible security,
the Adviser considers numerous factors, including the economic and
political outlook, the value of the security relative to other investment
alternatives, trends in the determinants of the issuer's profits, and the
issuer's management capability and practices.
The prices of fixed income securities fluctuate inversely to the direction
of interest rates.
SECURITIES OF FOREIGN ISSUERS. The Fund may invest in the securities of
foreign issuers which are freely traded on United States securities
exchanges or in the over-the-counter market in the form of depositary
receipts. Securities of a foreign issuer may present greater risks in the
form of nationalization, confiscation, domestic marketability, or other
national or international restrictions. As a matter of practice, the Fund
will not invest in the securities of a foreign issuer if any such risk
appears to the Adviser to be substantial.
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES. The Fund may invest
in the securities of other investment companies, but it will not own more
than 3% of the total outstanding voting stock of any investment company,
invest more than 5% of its total assets in any one investment company, or
invest more than 10% of its total assets in investment companies in
general. The Fund will invest in other investment companies primarily for
the purpose of investing short-term cash which has not yet been invested in
other portfolio instruments. It should be noted that investment companies
incur certain expenses such as management fees and, therefore, any
investment by the Fund in shares of another investment company would be
subject to such duplicate expenses. The Adviser will waive its investment
advisory fee on assets invested in securities of open-end investment
companies.
U.S. GOVERNMENT SECURITIES. The types of U.S. government securities in
which the Fund may invest generally include direct obligations of the U.S.
Treasury (such as U.S. Treasury bills, notes, and bonds) and obligations
issued or guaranteed by U.S. government agencies or instrumentalities.
These securities are backed in a variety of ways by the U.S. government or
its agencies or instrumentalities. Some of these obligations, such as
Government National Mortgage Association mortgage-backed securities, are
backed by the full faith and credit of the U.S. Treasury. Obligations of
Federal Home Loan Banks are backed by the discretionary authority of the
U.S. government to purchase certain obligations of agencies or
instrumentalities. Obligations of Federal Home Loan Banks, Federal Farm
Credit System, including the National Bank for Cooperatives and Banks for
Cooperatives, Tennessee Valley Authority, Export-Import Bank of the United
States, Commodity Credit Corporation, Federal Financing Bank, Federal
National Mortgage Association, and Federal Home Loan Mortgage Corporation,
National Credit Union Administration, and Student Loan Marketing
Association are backed by the credit of the agency or instrumentality
issuing the obligations.
RESTRICTED AND ILLIQUID SECURITIES. The Fund may invest in restricted
securities. Restricted securities are any securities in which the Fund may
otherwise invest pursuant to its investment objective and policies, but
which are subject to restrictions on resale under federal securities law.
However, the Fund will limit investments in illiquid securities, including
certain restricted securities not determined by the Trustees to be liquid,
over-the-counter options, and repurchase agreements providing for
settlement in more than seven days after notice, to 15% of its net assets.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase
securities on a when-issued or delayed delivery basis. These transactions
are arrangements in which the Fund purchases securities with payment and
delivery scheduled for a future time. The seller's failure to complete
these transactions may cause the Fund to miss a price or yield considered
to be advantageous. Settlement dates may be a month or more after entering
into these transactions and the market values of the securities purchased
may vary from purchase prices. Accordingly, the Fund may pay more or less
than the market value of the securities on the settlement date.
The Fund may dispose of a commitment prior to settlement if the Adviser
deems it appropriate to do so. In addition, the Fund may enter into
transactions to sell its purchase commitments to third parties at current
market values and simultaneously acquire other commitments to purchase
similar securities at later dates. The Fund may realize short-term profits
or losses upon the sale of such commitments.
TEMPORARY INVESTMENTS. Under normal market conditions, the Fund will be
fully invested in its primary investments. However, for temporary
defensive purposes, when the Adviser determines that market conditions
warrant, the Fund may invest up to 100% of its assets in cash and money
market instruments.
Money market instruments may be:
o money market instruments;
. commercial paper;
. instruments of domestic banks and savings associations (such as
certificates of deposit, demand and time deposits, savings shares
and bankers' acceptances);
o securities issued and/or guaranteed as to payment of principal and
interest by the U.S. government, its agencies or
instrumentalities; and
o repurchase agreements.
REPURCHASE AGREEMENTS. Certain securities in which the Fund invests may be
purchased pursuant to repurchase agreements. Repurchase agreements are
arrangements in which banks, broker/dealers, and other recognized financial
intermediaries sell U.S. government securities or other securities to the
Fund and agree at the time of sale to repurchase them at a mutually agreed
upon time and price. To the extent that the original seller does not
repurchase the securities from the Fund, the Fund could receive less than
the repurchase price on any sale of such securities.
PUT AND CALL OPTIONS. The Fund may purchase put options on its portfolio
securities. A put option gives the Fund, in return for a premium, the right
to sell the underlying security to the writer (seller) at a specified price
during the time of the options. These options will be used only as a hedge
to attempt to protect securities which the Fund holds against decreases in
value. The Fund may purchase these put options as long as they are listed
on a recognized options exchange and the underlying securities are held in
its portfolio.
The Fund may also write covered call options on securities either held in
its portfolio, or which it has the right to obtain without payment of
further consideration, or for which it has segregated cash in the amount of
any additional consideration. As a writer of a call option, the Fund has
the obligation, upon exercise of the option during the option period, to
deliver the underlying security upon payment of the exercise price. The
call options which the Fund writes and sells must be listed on a recognized
options exchange. Writing of calls by the Fund is intended to seek to
generate income for the Fund and, thereby, protect against price movements
in particular securities in the Fund's portfolio.
Over-the-counter options are two party contracts with price and terms
negotiated between buyer and seller. In contrast, exchange-traded options
are third party contracts with standardized strike prices and expiration
dates and are purchased from a clearing corporation. Exchange-traded
options have a continuous liquid market while over-the-counter options may
not.
RISKS. Prior to exercise or expiration, an option position can only
be terminated by entering into a closing purchase or sale
transaction. This requires a secondary market on an exchange which
may or may not exist for any particular call or put option at any
specific time. The absence of a liquid secondary market also may
limit the Fund's ability to dispose of the securities underlying an
option. The inability to close options also could have an adverse
impact on the Fund's ability to effectively hedge its portfolio.
FINANCIAL FUTURES. The Fund may purchase and sell financial futures
contracts to hedge all or a portion of its portfolio against changes in
interest rates. Financial futures contracts call for the delivery of
particular debt instruments at a certain time in the future. The seller of
the contract agrees to make delivery of the type of instrument called for
in the contract and the buyer agrees to take delivery of the instrument at
the specified future time.
Stock index futures contracts are based on indexes that reflect the market
value of common stock of the firms included in the indexes. An index
futures contract is an agreement pursuant to which two parties agree to
take or make delivery of an amount of cash equal to the differences between
the value of the index at the close of the last trading day of the contract
and the price at which the index contract was originally written.
The Fund may not purchase or sell futures contracts if immediately
thereafter the sum of the amount of margin deposits on the Fund's existing
futures positions would exceed 5% of the market value of the Fund's total
assets. When the Fund purchases futures contracts, an amount of cash and
U.S. Treasury securities, equal to the underlying commodity value of the
futures contracts (less any related margin deposits), will be deposited in
a segregated account with the Fund's custodian (or the broker, if legally
permitted) to collateralize the position and thereby insure that the use of
such futures contract is unleveraged.
RISKS. When the Fund uses financial futures as hedging devices, much
depends on the ability of the Adviser to predict market conditions
based upon certain economic analysis and factors. There is a risk
that the prices of the securities subject to the futures contracts
may not correlate perfectly with the prices of the securities in the
Fund's portfolio. This may cause the futures contract to react
differently than the portfolio securities to market changes. In
addition, the Adviser could be incorrect in its expectations about
the direction or extent of market factors such as interest rate
movements. In these events, the Fund may lose money on the futures
contract.
It is not certain that a secondary market for positions in futures
contracts will exist at all times. The Fund's ability to establish
and close out futures and depends on this secondary market.
LENDING OF PORTFOLIO SECURITIES. In order to generate additional income,
the Fund may lend portfolio securities on a short-term or a long-term
basis, up to one-third of the value of its total assets to broker/dealers,
banks, or other institutional borrowers of securities. The Fund will only
enter into loan arrangements with broker/dealers, banks, or other
institutions which the Adviser has determined are creditworthy under
guidelines established by the Trustees and will receive collateral equal to
at least 100% of the value of the securities loaned.
There is the risk that when lending portfolio securities, the securities
may not be available to the Fund on a timely basis and the Fund may,
therefore, lose the opportunity to sell the securities at a desirable
price. In addition, in the event that a borrower of securities would file
for bankruptcy or become insolvent, disposition of the securities may be
delayed pending court action.
PORTFOLIO TURNOVER. Although the Fund does not intend to invest for the
purpose of seeking short-term profits, securities in its portfolio will be
sold whenever the Adviser believes it is appropriate to do so in light of
the Fund's investment objective, without regard to the length of time a
particular security may have been held. The Fund's rate of portfolio
turnover may exceed that of certain other mutual funds with the same
investment objective. A higher rate of portfolio turnover involves
correspondingly greater transaction expenses which must be borne directly
by the Fund and, thus, indirectly by its shareholders. In addition, a high
rate of portfolio turnover may result in the realization of larger amounts
of capital gains which, when distributed to the Fund's shareholders, are
taxable to them. (Further information is contained in the Fund's Statement
of Additional Information within the sections `Brokerage Transactions''
and `Tax Status''). Nevertheless, transactions for the Fund's portfolio
will be based only upon investment considerations and will not be limited
by any other considerations when the Adviser deems it appropriate to make
changes in the Fund's portfolio.
INVESTMENT LIMITATIONS
The Fund will not:
o borrow money directly or through reverse repurchase agreements
(arrangements in which the Fund sells a portfolio instrument for
a percentage of its cash value with an agreement to buy it back
on a set date) except, under certain circumstances, the Fund may
borrow up to one-third of the value of its net assets and pledge
up to 10% of the value of those assets to secure such borrowings;
o sell securities short except, under strict limitations, the Fund
may maintain open short positions so long as not more than 10% of
the value of its net assets is held as collateral for those
positions; or
o with respect to 75% of its total assets, invest more than 5% of
the value of its total assets in securities of any one issuer
(other than cash, cash items, or securities issued or guaranteed
by the U.S. government and its agencies or instrumentalities, and
repurchase agreements collateralized by such securities) or
acquire more than 10% of the outstanding voting securities of any
one issuer.
The above investment limitations cannot be changed without shareholder
approval. The following limitations, however, may be changed by the
Trustees without shareholder approval. Shareholders will be notified before
any material change in these limitations becomes effective.
The Fund will not:
o commit more than 5% of its total assets to premiums on open put
option positions; or
o invest more than 5% of its net assets in warrants.
HUB AND SPOKE(R) OPTION
If the Trustees determine it to be in the best interest of the Fund and its
shareholders, the Fund may in the future seek to achieve its investment
objective by investing all of its assets in another investment company
having the same investment objective and substantially the same investment
policies and restrictions as those applicable to the Fund. It is expected
that any such investment company would be managed in substantially the same
manner as the Fund.
The initial shareholder of the Fund (who is an affiliate of Federated
Investors) voted to vest authority to use this investment structure in the
sole discretion of the Trustees. No further approval of shareholders is
required. Shareholders will receive at least 30 days prior notice of any
such investment.
In making its determination, the Trustees will consider, among other
things, the benefits to shareholders and/or the opportunity to reduce costs
and achieve operational efficiencies. Although it is expected that the
Trustees will not approve an arrangement that is likely to result in higher
costs, no assurance is given that costs will remain the same or be
materially reduced if this investment structure is implemented.
NET ASSET VALUE
The Fund's net asset value per Share fluctuates. The net asset value for
Shares is determined by adding the interest of each class of Shares in the
market value of all securities and other assets of the Fund, subtracting
the interest of each class of Shares in the liabilities of the Fund and
those attributable to each class of Shares, and dividing the remainder by
the total number of each class of Shares outstanding. The net asset value
for each class of Shares may differ due to the variance in daily net income
realized by each class. Such variance will reflect only accrued net income
to which the shareholders of a particular class are entitled.
The net asset value of each class of Shares of the Fund is determined as of
the close of trading (normally 4:00 p.m., Eastern time) on the New York
Stock Exchange, Monday through Friday, except on: (i) days on which there
are not sufficient changes in the value of the Fund's portfolio securities
that its net asset value might be materially affected; (ii) days during
which no Shares are tendered for redemption and no orders to purchase
Shares are received; or (iii) the following holidays: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day.
INVESTING IN THE FUND
The Fund offers investors three classes of Shares that carry sales charges
and contingent deferred sales charges in different forms and amounts and
which bear different levels of expenses.
CLASS A SHARES. An investor who purchases Class A Shares pays a maximum
sales charge of 5.50% at the time of purchase. Certain purchases of Class A
Shares are not subject to a sales charge. See "Investing in Class A
Shares." As a result, Class A Shares are not subject to any charges when
they are redeemed (except for special programs offered under "Purchases
with Proceeds From Redemptions of Unaffiliated Investment Companies.")
Certain purchases of Class A Shares qualify for reduced sales charges. See
"Reducing or Eliminating the Sales Charge." Class A Shares have no
conversion feature.
CLASS B SHARES. Class B Shares are sold without an initial sales charge,
but are subject to a contingent deferred sales charge of up to 5.50% if
redeemed within six full years following purchase. Class B Shares also bear
a 12b-1 fee while Class A Shares do not bear such a fee. Class B Shares
will automatically convert into Class A Shares, based on relative net asset
value, on or around the fifteenth of the month eight full years after the
purchase date. Class B Shares provide an investor the benefit of putting
all of the investor's dollars to work from the time the investment is made,
but (until conversion) will have a expense ratio and pay lower dividends
than Class A Shares due to the 12b-1 fee.
CLASS C SHARES. Class C Shares are sold without an initial sales charge,
but are subject to a 1.00% contingent deferred sales charge on assets
redeemed within the first 12 months following purchase. Class C Shares
provide an investor the benefit of putting all of the investor's dollars to
work from the time the investment is made, but will have a higher expense
ratio and pay lower dividends than Class A Shares due to the 12b-1 fee.
Class C Shares have no conversion feature.
HOW TO PURCHASE SHARES
Shares of the Fund are sold on days on which the New York Stock Exchange is
open. Shares of the Fund may be purchased as described below, either
through a financial intermediary (such as a bank or broker/dealer which has
a sales agreement with the distributor) or by sending a wire or a check
directly to the Fund, with a minimum initial investment of $500 for Class A
Shares and $1500 for Class B Shares and Class C Shares. Additional
investments can be made for as little as $100. The minimum initial and
subsequent investment for retirement plans is only $50. (Financial
intermediaries may impose different minimum investment requirements on
their customers.)
In connection with any sale, Federated Securities Corp. may from time to
time offer certain items of nominal value to any shareholder or investor.
The Fund reserves the right to reject any purchase request. An account must
be established through a financial intermediary or by completing, signing,
and returning the new account form available from the Fund before Shares
can be purchased.
INVESTING IN CLASS A SHARES
Class A Shares are sold at their net asset value next determined after an
order is received, plus a sales charge as follows:
Sales Charge as Dealer
Sales Charge as a Percentage
Concession
a Percentage of Net as a Percentage
Amount of of Offering Amount of Public
Transaction Price Invested
Offering Price
Less than $50,000 5.50% 5.82% 5.00%
$50,000 but less than $100,000 4.50% 4.71% 4.00%
$100,000 but less than $250,000 3.75% 3.90% 3.25%
$250,000 but less than $500,000 2.50% 2.56% 2.25%
$500,000 but less than $1 million 2.00% 2.04% 1.80%
$1 million or greater 0.00% 0.00% 0.25%*
*See sub-section entitled "Dealer Concession."
No sales charge is imposed for Class A Shares purchased through financial
intermediaries that do not receive a reallowance of a sales charge. No
sales charge is imposed for Class A Shares purchased through bank trust
departments, investment advisers registered under the Investment Advisers
Act of 1940, as amended, or retirement plans where the third party
administrator has entered into certain arrangements with Federated
Securities Corp. or its affiliates, or to shareholders designated as
Liberty Life Members. However, investors who purchase Class A Shares
through a trust department, investment adviser, or retirement plan may be
charged an additional service fee by the financial intermediary.
Additionally, no sales charge is imposed for Class A Shares purchased
through "wrap accounts" or similar programs, under which clients pay a fee
or fees for services.
DEALER CONCESSION. For sales of Class A Shares, a dealer will normally
receive up to 90% of the applicable sales charge. Any portion of the sales
charge which is not paid to a dealer will be retained by the distributor.
However, the distributor may offer to pay dealers up to 100% of the sales
charge retained by it. Such payments may take the form of cash or
promotional incentives, such as reimbursement of certain expenses of
qualified employees and their spouses to attend informational meetings
about the Fund or other special events at recreational-type facilities, or
items of material value. In some instances, these incentives will be made
available only to dealers whose employees have sold or may sell a
significant amount of Shares. On purchases of $1 million or more, the
investor pays no sales charge; however, the distributor will make twelve
monthly payments to the dealer totaling 0.25% of the public offering price
over the first year following the purchase. Such payments are based on the
original purchase price of Shares outstanding at each month end.
The sales charge for Shares sold other than through registered
broker/dealers will be retained by Federated Securities Corp. Federated
Securities Corp. may pay fees to banks out of the sales charge in exchange
for sales and/or administrative services performed on behalf of the bank's
customers in connection with the initiation of customer accounts and
purchases of Shares.
REDUCING OR ELIMINATING THE SALES CHARGE. The sales charge can be reduced
or eliminated on the purchase of Class A Shares through:
o quantity discounts and accumulated purchases;
o concurrent purchases;
o signing a 13-month letter of intent;
o using the reinvestment privilege; or
o purchases with proceeds from redemptions of unaffiliated
investment company shares.
QUANTITY DISCOUNTS AND ACCUMULATED PURCHASES. As shown in the table above,
larger purchases reduce the sales charge paid. The Fund will combine
purchases of Class A Shares made on the same day by the investor, the
investor's spouse, and the investor's children under age 21 when it
calculates the sales charge. In addition, the sales charge, if applicable,
is reduced for purchases made at one time by a trustee or fiduciary for a
single trust estate or a single fiduciary account.
If an additional purchase of Class A Shares is made, the Fund will consider
the previous purchases still invested in the Fund. For example, if a
shareholder already owns Class A Shares having a current value at the
public offering price of $30,000 and he purchases $20,000 more at the
current public offering price, the sales charge on the additional purchase
according to the schedule now in effect would be 4.50%, not 5.50%.
To receive the sales charge reduction, Federated Securities Corp. must be
notified by the shareholder in writing or by his financial intermediary at
the time the purchase is made that Class A Shares are already owned or that
purchases are being combined. The Fund will reduce the sales charge after
it confirms the purchases.
CONCURRENT PURCHASES. For purposes of qualifying for a sales charge
reduction, a shareholder has the privilege of combining concurrent
purchases of Class A Shares of two or more funds for which affiliates of
Federated Investors serve as investment adviser or principal underwriter
(`Federated Funds''), the purchase price of which includes a sales charge.
For example, if a shareholder concurrently invested $30,000 in one of the
Class A Shares in the Federated Funds with a sales charge, and $20,000 in
this Fund, the sales charge would be reduced.
To receive this sales charge reduction, Federated Securities Corp. must be
notified by the shareholder in writing or by his financial intermediary at
the time the concurrent purchases are made. The Fund will reduce the sales
charge after it confirms the purchases.
LETTER OF INTENT. If a shareholder intends to purchase at least $50,000 of
Class A Shares of Federated Funds (excluding money market funds) over the
next 13 months, the sales charge may be reduced by signing a letter of
intent to that effect. This letter of intent includes a provision for a
sales charge adjustment depending on the amount actually purchased within
the 13-month period and a provision for the custodian to hold up to 5.50%
of the total amount intended to be purchased in escrow (in Shares) until
such purchase is completed.
The Shares held in escrow in the shareholder's account will be released
upon fulfillment of the letter of intent or the end of the 13-month period,
whichever comes first. If the amount specified in the letter of intent is
not purchased, an appropriate number of escrowed Shares may be redeemed in
order to realize the difference in the sales charge.
While this letter of intent will not obligate the shareholder to purchase
Shares, each purchase during the period will be at the sales charge
applicable to the total amount intended to be purchased. At the time a
letter of intent is established, current balances in accounts in any Shares
of any fund in the Federated Funds, excluding money market accounts, will
be aggregated to provide a purchase credit towards fulfillment of the
letter of intent. Prior trade prices will not be adjusted.
REINVESTMENT PRIVILEGE. If Class A Shares in the Fund have been redeemed,
the shareholder has the privilege, within 120 days, to reinvest the
redemption proceeds at the next-determined net asset value without any
sales charge. Federated Securities Corp. must be notified by the
shareholder in writing or by his financial intermediary of the reinvestment
in order to eliminate a sales charge. If the shareholder redeems his Class
A Shares in the Fund, there may be tax consequences.
PURCHASES WITH PROCEEDS FROM REDEMPTIONS OF UNAFFILIATED INVESTMENT
COMPANIES. Investors may purchase Class A Shares at net asset value,
without a sales charge, with the proceeds from the redemption of shares of
an unaffiliated investment company that were purchased or sold with a sales
charge or commission and were not distributed by Federated Securities Corp.
The purchase must be made within 60 days of the redemption, and Federated
Securities Corp. must be notified by the investor in writing, or by his
financial intermediary, at the time the purchase is made. From time to
time, the Fund may offer dealers a payment of .50% for Shares purchased
under this program. If Shares are purchased in this manner, redemptions of
these Shares will be subject to a contingent deferred sales charge for one
year from the date of purchase. Shareholders will be notified prior to the
implementation of any special offering as described above.
INVESTING IN CLASS B SHARES
Class B Shares are sold at their net asset value next determined after an
order is received. While Class B Shares are sold without an initial sales
charge, under certain circumstances described under "Contingent Deferred
Sales Charge--Class B Shares," a contingent deferred sales charge may be
applied by the distributor at the time Class B Shares are redeemed.
CONVERSION OF CLASS B SHARES. Class B Shares will automatically convert
into Class A Shares on or around the fifteenth of the month eight full
years after the purchase date, except as noted below, and may no longer be
subject to a fee under the Fund's distribution plan (see "Distribution of
Shares"). Such conversion will be on the basis of the relative net asset
values per share, without the imposition of any sales charge, fee, or other
charge. Class B Shares acquired by exchange from Class B Shares of another
fund in the Federated Funds will convert into Class A Shares based on the
time of the initial purchase. For purposes of conversion to Class A Shares,
Shares purchased through the reinvestment of dividends and distributions
paid on Class B Shares will be considered to be held in a separate sub-
account. Each time any Class B Shares in the shareholder's account (other
than those in the sub-account) convert to Class A Shares, an equal pro rata
portion of the Class B Shares in the sub-account will also convert to Class
A Shares. The conversion of Class B Shares to Class A Shares is subject to
the continuing availability of a ruling from the Internal Revenue Service
or an opinion of counsel that such conversions will not constitute taxable
events for federal tax purposes. There can be no assurance that such ruling
or opinion will be available, and the conversion of Class B Shares to Class
A Shares will not occur if such ruling or opinion is not available. In such
event, Class B Shares would continue to be subject to higher expenses than
Class A Shares for an indefinite period.
Orders for $250,000 or more of Class B Shares will automatically be
invested in Class A Shares.
INVESTING IN CLASS C SHARES
Class C Shares are sold at net asset value next determined after an order
is received. A contingent deferred sales charge of 1.00% will be charged on
assets redeemed within the first full 12 months following purchase. For a
complete description of this charge, see "Contingent Deferred Sales Charge-
- -Class C Shares."
PURCHASING SHARES THROUGH A FINANCIAL INTERMEDIARY. An investor may call
his financial intermediary (such as a bank or an investment dealer) to
place an order to purchase Shares. Orders placed through a financial
intermediary are considered received when the Fund is notified of the
purchase order or when payment is converted into federal funds. Purchase
orders through a registered broker/dealer must be received by the broker
before 4:00 p.m. (Eastern time) and must be transmitted by the broker to
the Fund before 5:00 p.m. (Eastern time) in order for Shares to be
purchased at that day's price. Purchase orders through other financial
intermediaries must be received by the financial intermediary and
transmitted to the Fund before 4:00 p.m. (Eastern time) in order for Shares
to be purchased at that day's price. It is the financial intermediary's
responsibility to transmit orders promptly. Financial intermediaries may
charge additional fees for their services.
The financial intermediary which maintains investor accounts in Class B
Shares or Class C Shares with the Fund must do so on a fully disclosed
basis unless it accounts for share ownership periods used in calculating
the contingent deferred sales charge (see "Contingent Deferred Sales
Charge"). In addition, advance payments made to financial intermediaries
may be subject to reclaim by the distributor for accounts transferred to
financial intermediaries which do not maintain investor accounts on a fully
disclosed basis and do not account for share ownership periods.
PURCHASING SHARES BY WIRE. Once an account has been established, Shares may
be purchased by Federal Reserve wire by calling the Fund. All information
needed will be taken over the telephone, and the order is considered
received when State Street Bank receives payment by wire. Federal funds
should be wired as follows: State Street Bank and Trust Company, Boston,
Massachusetts; Attn: EDGEWIRE; For Credit to: (Fund Name) (Fund Class);
(Fund Number, this number can be found on the account statement or by
contacting the Fund); Account Number; Trade Date and Order Number; Group
Number or Dealer Number; Nominee or Institution Name; and ABA Number
011000028. Shares cannot be purchased by wire on holidays when wire
transfers are restricted.
PURCHASING SHARES BY CHECK. Once an account has been established, Shares
may be purchased by sending a check made payable to the name of the Fund
(designate class of Shares and account number) to: Federated Shareholder
Services Company, P.O. Box 8600, Boston, Massachusetts 02266-8600. Orders
by mail are considered received when payment by check is converted into
federal funds (normally the business day after the check is received).
SPECIAL PURCHASE FEATURES
SYSTEMATIC INVESTMENT PROGRAM. Once a Fund account has been opened,
shareholders may add to their investment on a regular basis in a minimum
amount of $100. Under this program, funds may be automatically withdrawn
periodically from the shareholder's checking account at an Automated
Clearing House ("ACH") member and invested in the Fund at the net asset
value next determined after an order is received by the Fund, plus the
sales charge, if applicable. Shareholders should contact their financial
intermediary or the Fund to participate in this program.
RETIREMENT PLANS. Fund Shares can be purchased as an investment for
retirement plans or IRA accounts. For further details, contact the Fund and
consult a tax adviser.
EXCHANGE PRIVILEGE
CLASS A SHARES. Class A shareholders may exchange all or some of their
Shares for Class A Shares of other funds in the Federated Funds at net
asset value. Neither the Fund nor any of the Federated Funds imposes any
additional fees on exchanges. Shareholders in certain other Federated Funds
may exchange all or some of their shares for Class A Shares.
Shareholders of Class A Shares who have been designated Liberty Life
Members are exempt from sales charges on future purchases in and exchanges
between the Class A Shares of any Federated Fund, as long as they maintain
a $500 balance in one of the Federated Funds.
CLASS B SHARES. Class B shareholders may exchange all or some of their
Shares for Class B Shares of the Federated Funds. (Not all Federated Funds
currently offer Class B Shares. Contact your financial intermediary
regarding the availability of other Class B Shares in the Federated Funds.)
Exchanges are made at net asset value without being assessed a contingent
deferred sales charge on the exchanged Shares. To the extent that a
shareholder exchanges Shares for Class B Shares of other Federated Funds,
the time for which the exchanged-for Shares are to be held will be added to
the time for which exchanged-from Shares were held for purposes of
satisfying the applicable holding period. For more information, see
"Contingent Deferred Sales Charge."
CLASS C SHARES. Class C shareholders may exchange all or some of their
Shares for Class C Shares of Federated Funds at net asset value without a
contingent deferred sales charge. (Not all funds in the Federated Funds
currently offer Class C Shares. Contact your financial intermediary
regarding the availability of Class C Shares in the Federated Funds.) To
the extent that a shareholder exchanges Shares for Class C Shares of other
Federated Funds, the time for which the exchanged-for Shares are to be held
will be added to the time for which exchanged-from Shares were held for
purposes of satisfying the applicable holding period. For more information,
see "Contingent Deferred Sales Charge."
Please contact your financial intermediary directly or Federated
Securities Corp. at 1-800-341-7400 for information on and prospectuses
for the Federated Funds into which your Shares may be exchanged free
of charge.
REQUIREMENTS FOR EXCHANGE. Shareholders using this privilege must exchange
Shares having a net asset value equal to the minimum investment
requirements of the fund into which the exchange is being made. Before the
exchange, the shareholder must receive a prospectus of the fund for which
the exchange is being made.
This privilege is available to shareholders resident in any state in which
the Shares being acquired may be sold. Upon receipt of proper instructions
and required supporting documents, Shares submitted for exchange are
redeemed and proceeds invested in the same class of Shares of the other
fund. The exchange privilege may be modified or terminated at any time.
Shareholders will be notified of the modification or termination of the
exchange privilege.
TAX CONSEQUENCES. An exercise of the exchange privilege is treated as a
sale for federal income tax purposes. Depending upon the circumstances, a
capital gain or loss may be realized.
MAKING AN EXCHANGE. Instructions for exchanging may be given in writing or
by telephone. Written instructions may require a signature guarantee.
Shareholders of the Fund may have difficulty in making exchanges by
telephone through brokers and other financial intermediaries during times
of drastic economic or market changes. If a shareholder cannot contact his
broker or financial intermediary by telephone, it is recommended that an
exchange request be made in writing and sent by overnight mail to Federated
Shareholder Services Company, 1099 Hingham Street, Rockland, Massachusetts
02370-3317.
TELEPHONE INSTRUCTIONS. Telephone instructions made by the investor may be
carried out only if a telephone authorization form completed by the
investor is on file with the Fund. If the instructions are given by a
broker, a telephone authorization form completed by the broker must be on
file with the Fund. If reasonable procedures are not followed by the Fund,
it may be liable for losses due to unauthorized or fraudulent telephone
instructions. Shares may be exchanged between two funds by telephone only
if the two funds have identical shareholder registrations.
Any Shares held in certificate form cannot be exchanged by telephone but
must be forwarded to Federated Shareholder Services Company, P.O. Box 8600,
Boston, Massachusetts 02266-8600 and deposited to the shareholder's account
before being exchanged. Telephone exchange instructions are recorded and
will be binding upon the shareholder. Such instructions will be processed
as of 4:00 p.m. (Eastern time) and must be received by the Fund before that
time for Shares to be exchanged the same day. Shareholders exchanging into
a fund will begin receiving dividends the following business day. This
privilege may be modified or terminated at any time.
HOW TO REDEEM SHARES
Shares are redeemed at their net asset value, less any applicable
contingent deferred sales charge, next determined after the Fund receives
the redemption request. Redemptions will be made on days on which the Fund
computes its net asset value. Investors who redeem Shares through a
financial intermediary may be charged a service fee by that financial
intermediary. Redemption requests must be received in proper form and can
be made as described below.
REDEEMING SHARES THROUGH A FINANCIAL INTERMEDIARY. Shares of the Fund may
be redeemed by calling your financial intermediary to request the
redemption. Shares will be redeemed at the net asset value, less any
applicable contingent deferred sales charge next determined after the Fund
receives the redemption request from the financial intermediary. Redemption
requests through a registered broker/dealer must be received by the broker
before 4:00 p.m. (Eastern time) and must be transmitted by the broker to
the Fund before 5:00 p.m. (Eastern time) in order for Shares to be redeemed
at that day's net asset value. Redemption requests through other financial
intermediaries (such as banks) must be received by the financial
intermediary and transmitted to the Fund before 4:00 p.m. (Eastern time) in
order for Shares to be redeemed at that day's net asset value. The
financial intermediary is responsible for promptly submitting redemption
requests and providing proper written redemption instructions. Customary
fees and commissions may be charged by the financial intermediary for this
service.
REDEEMING SHARES BY TELEPHONE. Shares may be redeemed in any amount by
calling the Fund provided the Fund has received a properly completed
authorization form. These forms can be obtained from Federated Securities
Corp. Proceeds will be mailed in the form of a check, to the shareholder's
address of record or by wire transfer to the shareholder's account at a
domestic commercial bank that is a member of the Federal Reserve System.
The minimum amount for a wire transfer is $1,000. Proceeds from redeemed
Shares purchased by check or through ACH will not be wired until that
method of payment has cleared. Proceeds from redemption requests received
on holidays when wire transfers are restricted will be wired the following
business day.
Telephone instructions will be recorded. If reasonable procedures are not
followed by the Fund, it may be liable for losses due to unauthorized or
fraudulent telephone instructions. In the event of drastic economic or
market changes, a shareholder may experience difficulty in redeeming by
telephone. If this occurs, "Redeeming Shares By Mail" should be considered.
If at any time the Fund shall determine it necessary to terminate or modify
the telephone redemption privilege, shareholders would be promptly
notified.
REDEEMING SHARES BY MAIL. Shares may be redeemed in any amount by mailing a
written request to: Federated Shareholder Services Company, Fund Name, Fund
Class, P.O. Box 8600, Boston, Massachusetts 02266-8600. If share
certificates have been issued, they should be sent unendorsed with the
written request by registered or certified mail to the address noted above.
The written request should state: Fund Name and the Share Class name; the
account name as registered with the Fund; the account number; and the
number of Shares to be redeemed or the dollar amount requested. All owners
of the account must sign the request exactly as the Shares are registered.
Normally, a check for the proceeds os mailed within one business day, but
in no event more than seven days after receipt of a proper written
redemption request. Dividends are paid up to and including the day that a
redemption request is processed.
Shareholders requesting a redemption of any amount to be sent to an address
other than that on record with the Fund, or a redemption payable other than
to the shareholder of record must have their signatures guaranteed by a
commercial or savings bank, trust company or savings association whose
deposits are insured by an organization which is administered by the
Federal Deposit Insurance Corporation; a member firm of a domestic stock
exchange; or any other "eligible guarantor institution," as defined by the
Securities and Exchange Act of 1934, as amended. The Fund does not accept
signatures guaranteed by a notary public.
The Fund and its transfer agent have adopted standards for accepting
signature guarantees from the above institutions. The Fund may elect in the
future to limit eligible signature guarantors to institutions that are
members of a signature guarantee program. The Fund and its transfer agent
reserve the right to amend these standards at any time without notice.
SPECIAL REDEMPTION FEATURES
SYSTEMATIC WITHDRAWAL PROGRAM. Shareholders who desire to receive payments
of a predetermined amount not less than $100 may take advantage of the
Systematic Withdrawal Program. Under this program, Shares are redeemed to
provide for periodic withdrawal payments in an amount directed by the
shareholder.
Depending upon the amount of the withdrawal payments, the amount of
dividends paid and capital gains distributions with respect to Shares, and
the fluctuation of the net asset value of Shares redeemed under this
program, redemptions may reduce, and eventually deplete, the shareholder's
investment in the Fund. For this reason, payments under this program should
not be considered as yield or income on the shareholder's investment in the
Fund. To be eligible to participate in this program, a shareholder must
have an account value of at least $10,000. A shareholder may apply for
participation in this program through his financial intermediary. Due to
the fact that Class A Shares are sold with a sales charge, it is not
advisable for shareholders to continue to purchase Class A Shares while
participating in this program. A contingent deferred sales charge may be
imposed on Class B Shares and Class C Shares.
CONTINGENT DEFERRED SALES CHARGE
Shareholders may be subject to a contingent deferred sales charge upon
redemption of their Shares under the following circumstances:
CLASS A SHARES. Class A Shares purchased under a periodic special offering
with the proceeds of a redemption of Shares of an unaffiliated investment
company purchased or redeemed with a sales charge and not distributed by
Federated Securities Corp. may be charged a contingent deferred sales
charge of .50% for redemptions made within one full year of purchase. Any
applicable contingent deferred sales charge will be imposed on the lesser
of the net asset value of the redeemed Shares at the time of purchase or
the net asset value of the redeemed Shares at the time of redemption.
CLASS B SHARES. Shareholders redeeming Class B Shares from their Fund
accounts within six full years of the purchase date of those Shares will be
charged a contingent deferred sales charge by the Fund's distributor. Any
applicable contingent deferred sales charge will be imposed on the lesser
of the net asset value of the redeemed Shares at the time of purchase or
the net asset value of the redeemed Shares at the time of redemption in
accordance with the following schedule:
Contingent
Year of Redemption Deferred
After Purchase Sales Charge
First 5.50%
Second 4.75%
Third 4%
Fourth 3%
Fifth 2%
Sixth 1%
Seventh and thereafter 0%
CLASS C SHARES. Shareholders redeeming Class C Shares from their Fund
accounts within one full year of the purchase date of those Shares will be
charged a contingent deferred sales charge by the Fund's distributor of
1.00%. Any applicable contingent deferred sales charge will be imposed on
the lesser of the net asset value of the redeemed Shares at the time of
purchase or the net asset value of the redeemed Shares at the time of
redemption.
CLASS A SHARES, CLASS B SHARES, AND CLASS C SHARES. The contingent deferred
sales charge will be deducted from the redemption proceeds otherwise
payable to the shareholder and will be retained by the distributor. The
contingent deferred sales charge will not be imposed with respect to: (1)
Shares acquired through the reinvestment of dividends or distributions of
long-term capital gains; and (2) Shares held for more than six full years
from the date of purchase with respect to Class B Shares and one full year
from the date of purchase with respect to Class C Shares and applicable
Class A Shares. Redemptions will be processed in a manner intended to
maximize the amount of redemption which will not be subject to a contingent
deferred sales charge. In computing the amount of the applicable contingent
deferred sales charge, redemptions are deemed to have occurred in the
following order: (1) Shares acquired through the reinvestment of dividends
and long-term capital gains; (2) Shares held for more than six full years
from the date of purchase with respect to Class B Shares and one full year
from the date of purchase with respect to Class C Shares and applicable
Class A Shares; (3) Shares held for fewer than six years with respect to
Class B Shares and one full year from the date of purchase with respect to
Class C Shares and applicable Class A Shares on a first-in, first-out
basis. A contingent deferred sales charge is not assessed in connection
with an exchange of Fund Shares for shares of other funds in the Federated
Funds in the same class (see "Exchange Privilege"). Any contingent deferred
sales charge imposed at the time the exchanged-for shares are redeemed is
calculated as if the shareholder had held the shares from the date on which
he became a shareholder of the exchanged-from Shares. Moreover, the
contingent deferred sales charge will be eliminated with respect to certain
redemptions (see "Elimination of Contingent Deferred Sales Charge").
ELIMINATION OF CONTINGENT DEFERRED SALES CHARGE
A contingent deferred sales charge will not be charged in connection with
exchanges of Shares for Class A Shares in other Federated Funds.
The contingent deferred sales charge will be eliminated with respect to the
following redemptions: (1) redemptions following the death or disability,
as defined in Section 72(m)(7) of the Internal Revenue Code of 1986, as
amended, of a shareholder; (2) redemptions representing minimum required
distributions from an Individual Retirement Account or other retirement
plan to a shareholder who has attained the age of 70 1/2; and (3)
involuntary redemptions by the Fund of Shares in shareholder accounts that
do not comply with the minimum balance requirements. No contingent deferred
sales charge will be imposed on redemptions of Shares held by Trustees,
employees and sales representatives of the Fund, the distributor, or
affiliates of the Fund or distributor; employees of any financial
intermediary that sells Shares of the Fund pursuant to a sales agreement
with the distributor; and spouses and children under the age of 21 of the
aforementioned persons. Finally, no contingent deferred sales charge will
be imposed on the redemption of Shares originally purchased through a bank
trust department, an investment adviser registered under the Investment
Advisers Act of 1940, or retirement plans where the third party
administrator has entered into certain arrangements with Federated
Securities Corp. or its affiliates, or any other financial intermediary, to
the extent that no payments were advanced for purchases made through such
entities. The Trustees reserve the right to discontinue elimination of the
contingent deferred sales charge. Shareholders will be notified of such
elimination. Any Shares purchased prior to the termination of such waiver
would have the contingent deferred sales charge eliminated as provided in
the Fund's prospectus at the time of the purchase of the Shares. If a
shareholder making a redemption qualifies for an elimination of the
contingent deferred sales charge, the shareholder must notify Federated
Securities Corp. or the transfer agent in writing that he is entitled to
such elimination.
ACCOUNT AND SHARE INFORMATION
CERTIFICATES AND CONFIRMATIONS. As transfer agent for the Fund, Federated
Shareholder Services Company maintains a Share account for each
shareholder. Share certificates are not issued unless requested in writing
to Federated Shareholder Services Company.
Detailed confirmations of each purchase and redemption are sent to each
shareholder. Monthly confirmations are sent to report dividends paid during
that month.
DIVIDENDS. Dividends are declared and paid annually to all shareholders
invested in the Fund on the record date. Dividends and distributions are
automatically reinvested in additional Shares of the Fund on payment dates
at the ex-dividend date net asset value without a sales charge, unless
shareholders request cash payments on the new account form or by contacting
the transfer agent. All shareholders on the record date are entitled to the
dividend. If Shares are redeemed or exchanged prior to the record date or
purchased after the record date, those Shares are not entitled to the
dividend.
CAPITAL GAINS. Net long-term capital gains realized by the Fund, if any,
will be distributed at least once every twelve months.
ACCOUNTS WITH LOW BALANCES. Due to the high cost of maintaining accounts
with low balances, the Fund may redeem Shares in any account, except
retirement plans, and pay the proceeds to the shareholder if the account
balance falls below the Class A Share required minimum value of $500 or the
required minimum value of $1,500 for Class B Shares and Class C Shares.
This requirement does not apply, however, if the balance falls below the
required minimum value because of changes in the net asset value of the
respective Share Class. Before Shares are redeemed to close an account, the
shareholder is notified in writing and allowed 30 days to purchase
additional Shares to meet the minimum requirement.
TRUST INFORMATION
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Fund is managed by a Board of Trustees. The Trustees
are responsible for managing the Trust's business affairs and for
exercising all the Trust's powers except those reserved for the
shareholders. An Executive Committee of the Board of Trustees handles the
Board's responsibilities between meetings of the Board.
INVESTMENT ADVISER. Investment decisions for the Fund are made by Federated
Management, the Fund's investment adviser, subject to direction by the
Trustees. The Adviser continually conducts investment research and
supervision for the Fund and is responsible for the purchase or sale of
portfolio instruments, for which it receives an annual fee from the Fund.
ADVISORY FEES. The Adviser receives an annual investment advisory fee equal
to 1% of the Fund's average daily net assets. The fee paid by the Fund,
while higher than the advisory fee paid by other mutual funds in general,
is comparable to fees paid by other mutual funds with similar objectives
and policies. Under the investment advisory contract, which provides for
the voluntary waiver of the advisory fee by the Adviser, the Adviser may
voluntarily waive some or all of its fee. This does not include
reimbursement to the Fund of any expenses incurred by shareholders who use
the transfer agent's subaccounting facilities. The Adviser can terminate
this voluntary waiver at any time in its sole discretion. The Adviser has
also undertaken to reimburse the Fund for operating expenses in excess of
limitations established by certain states.
ADVISER'S BACKGROUND. Federated Management, a Delaware business trust
organized on April 11, 1989, is a registered investment adviser under the
Investment Advisers Act of 1940. It is a subsidiary of Federated Investors.
All of the Class A (voting) Shares of Federated Investors are owned by a
trust, the Trustees of which are John F. Donahue, Chairman and Trustee of
Federated Investors, Mr. Donahue's wife, and Mr. Donahue's son, J.
Christopher Donahue, who is President and Trustee of Federated Investors.
Federated 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. With over $80 billion invested across
more than 250 funds under management and/or administration by its
subsidiaries, as of December 31, 1994, Federated Investors is one of the
largest mutual fund investment managers in the United States. With more
than 1,800 employees, Federated continues to be led by the management who
founded the company in 1955. Federated funds are presently at work in and
through 4,000 financial institutions nationwide. More than 100,000
investment professionals have selected Federated funds for their clients.
Keith J. Sabol has been the Fund's portfolio manager since inception. Mr.
Sabol joined Federated Investors in 1994 and has been the Equity Research
Coordinator of the Fund's investment adviser since 1996. Mr. Sabol was an
Investment Analyst for the Fund's investment adviser from 1994 to 1996.
Following his graduation from the U.S. Military Academy, Mr. Sabol was
commissioned as an officer in the U.S. Army where he served until 1992.
Mr. Sabol earned his Masters in Industrial Administration from Carnegie
Mellon University with a concentration in Finance and Operations Research.
Aash M. Shah has been the Fund's portfolio manager since inception. Mr.
Shah joined Federated Investors in 1993 as an Investment Analyst and has
been an Assistant Vice President of the Fund's investment adviser since
1995. Mr. Shah was employed at Westinghouse Credit Corp. from 1990 to
1993 as an Investment Analyst. Mr. Shah received his Masters in Industrial
Administration from Carnegie Mellon University with a concentration in
finance and accounting. Mr. Shah is a Chartered Financial Analyst.
Both the Trust and the Adviser have adopted strict codes of ethics
governing the conduct of all employees who manage the Fund and its
portfolio securities. These codes recognize that such persons owe a
fiduciary duty to the Fund's shareholders and must place the interests of
shareholders ahead of the employees' own interest. Among other things, the
codes: require preclearance and periodic reporting of personal securities
transactions; prohibit personal transactions in securities being purchased
or sold, or being considered for purchase or sale, by the Fund; prohibit
purchasing securities in initial public offerings; and prohibit taking
profits on securities held for less than sixty days. Violations of the
codes are subject to review by the Board of Trustees, and could result in
severe penalties.
DISTRIBUTION OF SHARES
Federated Securities Corp. is the principal distributor for Shares of the
Fund. Federated Securities Corp. is located at Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779. It is a Pennsylvania corporation
organized on November 14, 1969, and is the principal distributor for a
number of investment companies. Federated Securities Corp. is a subsidiary
of Federated Investors.
State securities laws may require certain financial intermediaries such as
depository institutions to register as dealers.
The distributor may offer to pay financial intermediaries an amount equal
to 1% of the net asset value of Class C Shares purchased by their clients
or customers at the time of purchase. These payments will be made directly
by the distributor from its assets, and will not be made from assets of the
Fund. Financial intermediaries may elect to waive the initial payment
described above; such waiver will result in the waiver by the Fund of the
otherwise applicable contingent deferred sales charge.
The distributor will pay dealers an amount equal to 5.5% of the net asset
value of Class B Shares purchased by their clients or customers. These
payments will be made directly by the distributor from its assets, and will
not be made from the assets of the Fund. Dealers may voluntarily waive
receipt of all or any portion of these payments. The distributor may pay a
portion of the distribution fee discussed below to financial intermediaries
that waive all or any portion of the advance payments.
DISTRIBUTION PLAN (CLASS B SHARES AND CLASS C SHARES ONLY) AND SHAREHOLDER
SERVICES. Under a distribution plan adopted in accordance with Investment
Company Act Rule 12b-1 (the "Distribution Plan"), Class B Shares and Class
C Shares will pay a fee to the distributor in an amount computed at an
annual rate of .75% of the average daily net assets of each class of Shares
to finance any activity which is principally intended to result in the sale
of Shares subject to the Distribution Plan. For Class C Shares, the
distributor may select financial intermediaries such as banks, fiduciaries,
custodians for public funds, investment advisers, and broker/dealers to
provide sales services or distribution-related support services as agents
for their clients or customers. With respect to Class B Shares, because
distribution fees to be paid by the Fund to the distributor may not exceed
an annual rate of .75% of each class of Shares' average daily net assets,
it will take the distributor a number of years to recoup the expenses it
has incurred for its sales services and distribution-related support
services pursuant to the Plan.
The Distribution Plan is a compensation type plan. As such, the Fund makes
no payments to the distributor except as described above. Therefore, the
Fund does not pay for unreimbursed expenses of the distributor, including
amounts expended by the distributor in excess of amounts received by it
from the Fund, interest, carrying or other financing charges in connection
with excess amounts expended, or the distributor's overhead expenses.
However, the distributor may be able to recover such amounts or may earn a
profit from future payments made by Shares under the Plan.
In addition, the Fund has entered into a Shareholder Services Agreement
with Federated Shareholder Services, a subsidiary of Federated Investors,
under which the Fund may make payments up to 0.25% of the average daily net
asset value of Class A Shares, Class B Shares, and Class C Shares to obtain
certain personal services for shareholders and for the maintenance of
shareholder accounts ("Shareholder Services"). Under the Shareholder
Services Agreement, Federated Shareholder Services will either perform
shareholder services directly or will select financial intermediaries to
perform shareholder services. Financial intermediaries will receive fees
based upon Shares owned by their clients or customers. The schedules of
such fees and the basis upon which such fees will be paid will be
determined from time to time by the Fund and Federated Shareholder
Services.
SUPPLEMENTAL PAYMENTS TO FINANCIAL INTERMEDIARIES. In addition to payments
made pursuant to the Distribution Plan and Shareholder Services Agreement,
Federated Securities Corp. and Federated Shareholder Services, from their
own assets, may pay financial intermediaries supplemental fees for the
performance of sales services, distribution-related support services, or
shareholder services.
Federated Securities Corp. will pay financial intermediaries, at the time
of purchase of Class A Shares, an amount equal to .50% of the net asset
value of Class A Shares purchased by their clients or customers under
certain qualified retirement plans as approved by Federated Securities
Corp. (Such payments are subject to a reclaim from the financial
intermediary should the assets leave the program within 12 months after
purchase.)
Furthermore, with respect to Class A Shares, Class B Shares, and Class C
Shares, the distributor may offer to pay a fee from its own assets to
financial intermediaries as financial assistance for providing substantial
sales services, distribution related support services, or shareholder
services. The support may include sponsoring sales, educational and
training seminars for their employees, providing sales literature, and
engineering computer software programs that emphasize the attributes of the
Fund. Such assistance will be predicated upon the amount of Shares the
financial intermediary sells or may sell, and/or upon the type and nature
of sales or marketing support furnished by the financial intermediary. Any
payments made by the distributor may be reimbursed by the Fund's investment
adviser or its affiliates.
ADMINISTRATION OF THE FUND
ADMINISTRATIVE SERVICES. Federated Services Company, a subsidiary of
Federated Investors, provides administrative personnel and services
(including certain legal and financial reporting services) necessary to
operate the Fund. Federated Services Company provides these at an annual
rate which relates to the average aggregate daily net assets of all
Federated Funds as specified below:
MAXIMUM AVERAGE AGGREGATE
ADMINISTRATIVE FEE DAILY NET ASSETS
0.15% on the first $250 million
0.125% on the next $250 million
0.10% on the next $250 million
0.075% on assets in excess of $750 million
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of Shares.
Federated Services Company may choose voluntarily to waive a portion of its
fee.
EXPENSES OF THE FUND AND CLASS A SHARES, CLASS B SHARES, AND CLASS C
SHARES
Holders of Class A Shares, Class B Shares, and Class C Shares pay their
allocable portion of Trust and portfolio expenses.
The Trust expenses for which holders of Class A Shares, Class B Shares, and
Class C Shares pay their allocable portion include, but are not limited to:
the cost of organizing the Trust and continuing its existence; registering
the Trust with federal and state securities authorities; Trustees' fees;
auditors' fees; the cost of meetings of Trustees; legal fees of the Trust;
association membership dues; and such non-recurring and extraordinary items
as may arise from time to time.
The Fund expenses for which holders of Class A Shares, Class B Shares, and
Class C Shares pay their allocable portion include, but are not limited to:
registering the Fund and Class A Shares, Class B Shares, and Class C Shares
of the Fund; investment advisory services; taxes and commissions; custodian
fees; insurance premiums; auditors' fees; and such non-recurring and
extraordinary items as may arise from time to time.
At present, the only expenses which are allocated specifically to Class A
Shares, Class B Shares, and Class C Shares as classes are expenses under
the Trust's Distribution Plan and fees for Shareholder Services. However,
the Trustees reserve the right to allocate certain other expenses to
holders of Class A Shares, Class B Shares and Class C Shares as they deem
appropriate ("Class Expenses"). In any case, Class Expenses would be
limited to: distribution fees; transfer agent fees as identified by the
transfer agent as attributable to holders of Class A Shares, Class B
Shares, and Class C Shares; printing and postage expenses related to
preparing and distributing materials such as shareholder reports,
prospectuses and proxies to current shareholders; registration fees paid to
the Securities and Exchange Commission and to state securities commissions;
expenses related to administrative personnel and services as required to
support holders of Class A Shares, Class B Shares, and Class C Shares;
legal fees relating solely to Class A Shares, Class B Shares, or Class C
Shares; and Trustees' fees incurred as a result of issues related solely to
Class A Shares, Class B Shares, or Class C Shares.
BROKERAGE TRANSACTIONS
When selecting brokers and dealers to handle the purchase and sale of
portfolio instruments, the Adviser looks for prompt execution of the order
at a favorable price. In working with dealers, the Adviser will generally
utilize those who are recognized dealers in specific portfolio instruments,
except when a better price and execution of the order can be obtained
elsewhere. In selecting among firms believed to meet these criteria, the
Adviser may give consideration to those firms which have sold or are
selling Shares of the Fund and other funds distributed by Federated
Securities Corp. The Adviser makes decisions on portfolio transactions and
selects brokers and dealers subject to review by the Trustees.
SHAREHOLDER INFORMATION
VOTING RIGHTS
Each share of the Fund gives the shareholder one vote in Trustee elections
and other matters submitted to shareholders for vote. All Shares of each
Fund or class in the Trust have equal voting rights, except that in matters
affecting only a particular Fund or class, only Shares of that Fund or
class are entitled to vote.
As a Massachusetts business trust, the Trust is not required to hold annual
shareholder meetings. Shareholder approval will be sought only for certain
changes in the Trust's or the Fund's operation and for the election of
Trustees under certain circumstances.
Trustees may be removed by the Trustees or by shareholders at a special
meeting. A special meeting of shareholders shall be called by the Trustees
upon the written request of shareholders owning at least 10% of the Trust's
outstanding shares of all series entitled to vote.
TAX INFORMATION
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects to meet
requirements of the Internal Revenue Code, as amended, applicable to
regulated investment companies and to receive the special tax treatment
afforded to such companies.
The Fund will be treated as a single, separate entity for federal income
tax purposes so that income (including capital gains) and losses realized
by the Trust's other portfolios will not be combined for tax purposes with
those realized by the Fund.
Unless otherwise exempt, shareholders are required to pay federal income
tax on any dividends and other distributions, including capital gains
distributions, received. This applies whether dividends and distributions
are received in cash or as additional Shares. Distributions representing
long-term capital gains, if any, will be taxable to shareholders as long-
term capital gains no matter how long the shareholders have held the
Shares. No federal income tax is due on any dividends earned in an IRA or
qualified retirement plan until distributed.
STATE AND LOCAL TAXES
In the opinion of Houston, Houston & Donnelley, counsel to the Trust, Trust
shares may be subject to personal property taxes imposed by counties,
municipalities, and school districts in Pennsylvania to the extent that the
portfolio securities in the Trust would be subject to such taxes if owned
directly by residents of those jurisdictions.
Shareholders are urged to consult their own tax advisers regarding the
status of their accounts under state and local tax laws.
PERFORMANCE INFORMATION
From time to time, the Fund advertises its total return and yield for each
class of Shares.
Total return represents the change, over a specific period of time, in the
value of an investment in each class of Shares after reinvesting all income
and capital gains distributions. It is calculated by dividing that change
by the initial investment and is expressed as a percentage.
The yield of each class of Shares is calculated by dividing the net
investment income per share (as defined by the Securities and Exchange
Commission) earned by each class of Shares over a thirty-day period by the
maximum offering price per share of each class on the last day of the
period. This number is then annualized using semi-annual compounding. The
yield does not necessarily reflect income actually earned by each class of
Shares and, therefore, may not correlate to the dividends or other
distributions paid to shareholders.
The performance information reflects the effect of non-recurring charges,
such as the maximum sales charge or contingent deferred sales charges,
which, if excluded, would increase the total return and yield.
Total return and yield will be calculated separately for Class A Shares,
Class B Shares, and Class C Shares. Expense differences among Class A
Shares, Class B Shares, and Class C Shares may affect the performance of
each class.
From time to time, advertisements for Class A Shares, Class B Shares, and
Class C Shares of the Fund may refer to ratings, rankings, and other
information in certain financial publications and/or compare the
performance of Class A Shares, Class B Shares, and Class C Shares to
certain indices.
FEDERATED AGGRESSIVE GROWTH FUND
(A PORTFOLIO OF FEDERATED EQUITY FUNDS)
CLASS A SHARES
CLASS B SHARES
CLASS C SHARES
Prospectus
An Open-End, Diversified
Management Investment Company
November 15, 1996
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
Federated Investors Tower
Pittsburgh, PA 15222-3779
Cusip
Cusip
Cusip
G0 (11/96)
FEDERATED AGGRESSIVE GROWTH FUND
(A PORTFOLIO OF FEDERATED EQUITY FUNDS)
CLASS A SHARES
CLASS B SHARES
CLASS C SHARES
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information should be read with the
prospectus for Class A Shares, Class B Shares, and Class C Shares, and
the stand-alone prospectus for Class A Shares of Federated Aggressive
Growth Fund (the "Fund") dated November 15, 1996. This Statement is not
a prospectus itself. You may request a copy of a prospectus or a paper
copy of this Statement of Additional Information, if you have received
it electronically, free of charge by calling 1-800-341-7400.
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
Statement dated November 15, 1996
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
GENERAL INFORMATION ABOUT THE FUND1
INVESTMENT OBJECTIVE AND POLICIES 1
Types of Investments 1
Temporary Investments 2
When-Issued and Delayed Delivery
Transactions 2
Lending of Portfolio Securities 2
Repurchase Agreements 3
Reverse Repurchase Agreements 3
Portfolio Turnover 3
Investment Limitations 3
FEDERATED EQUITY FUNDS MANAGEMENT 6
Fund Ownership 10
Trustees Compensation 11
Trustee Liability 11
INVESTMENT ADVISORY SERVICES 11
Adviser to the Fund 11
Advisory Fees 12
Other Related Services 12
BROKERAGE TRANSACTIONS 12
OTHER SERVICES 13
Fund Administration 13
Custodian 13
Transfer Agent 13
Independent Auditors 13
PURCHASING SHARES 13
Distribution Plan (Class B Shares
and Class C Shares Only) and
Shareholder Services Agreement13
Conversion to Federal Funds 14
Purchases by Sales Representatives,
Trustees, and Employees of the
Fund 14
DETERMINING NET ASSET VALUE 14
Determining Market Value of
Securities 14
REDEEMING SHARES 14
Redemption in Kind 14
MASSACHUSETTS PARTNERSHIP LAW 15
EXCHANGING SECURITIES FOR SHARES 15
Tax Consequences 15
TAX STATUS 15
The Fund's Tax Status 15
Shareholders' Tax Status 16
TOTAL RETURN 16
YIELD 16
PERFORMANCE COMPARISONS 16
ABOUT FEDERATED INVESTORS 18
Mutual Fund Market 18
Institutional 18
Trust Organizations 18
Broker/Dealers and Bank Broker/Dealer
Subsidiaries 19
FINANCIAL STATEMENTS 19
APPENDIX 20
GENERAL INFORMATION ABOUT THE FUND
The Fund is a portfolio of Federated Equity Funds (the "Trust"). The Trust
was established as a Massachusetts business trust under a Declaration of
Trust dated April 17, 1984, under the name `Federated Growth Trust.'' The
Trust later changed its name to `Federated Equity Funds.'' The Declaration
of Trust permits the Trust to offer separate series and classes of shares.
Shares of the Fund are offered in three classes known as Class A Shares,
Class B Shares, and Class C Shares (individually and collectively referred
to as "Shares" as the context may require). This Statement of Additional
Information relates to all three classes of Shares.
INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective is to provide appreciation of capital.
TYPES OF INVESTMENTS
The Fund may invest in common stocks, preferred stocks, corporate bonds,
debentures, notes, warrants, and put options on stocks.
CORPORATE DEBT SECURITIES
Corporate debt securities may bear fixed, fixed and contingent, or
variable rates of interest. They may involve equity features such as
conversion or exchange rights, warrants for the acquisition of common
stock of the same or a different issuer, participations based on
revenues, sales, or profits, or the purchase of common stock in a unit
transaction (where corporate debt securities and common stock are
offered as a unit).
The corporate debt securities (excluding convertible securities) in
which the Fund may invest will be rated investment grade, i.e., Baa or
better by Moody's Investors Service, Inc. ("Moody's"), or BBB or
better by Standard & Poor's Ratings Group ("S&P") or Fitch Investors
Service, Inc. ("Fitch") (or, if unrated, are deemed to be of
comparable quality by the Fund's investment adviser). It should be
noted that securities receiving the lowest investment grade rating are
considered to have some speculative characteristics. Changes in
economic conditions or other circumstances are more likely to lead to
weakened capacity to make principal and interest payments than higher
rated securities. In the event that a security which had an eligible
rating when purchased is downgraded below Baa or BBB, the investment
adviser will promptly reassess whether continued holding of the
security is consistent with the Fund's objective.
OTHER CORPORATE SECURITIES. The Fund may invest in preferred stocks,
convertible securities, notes or debentures rated investment grade,
i.e., Baa or better by Moody's Investor Service, Inc. (`Moody's''),
or BBB or better by Standard & Poor's ratings Group (S&P) or Fitch
Investor's Services, Inc. (`Fitch'') (or, if unrated, are deemed to
be of comparable quality by the Adviser), and warrants of these
companies. Corporate fixed income securities are subject to market
and credit risks. The prices of fixed income securities fluctuate
inversely to the direction of interest rates. In the event that a
security which had an eligible rating when purchased is downgraded
below Baa or BBB, the Adviser will promptly reassess whether continued
holding of the security is consistent with the Fund's objective. The
Fund may invest in corporate debt obligations that are not investment
grade bonds or are not rated but are determined by the Adviser to be
of comparable quality.
Securities which are rated BBB or lower by Standard & Poor's or Baa
or lower by Moody's either have speculative characteristics or are
speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligations. A
description of the rating categories is contained in the Appendix to
the Statement of Additional Information. There is no lower limit with
respect to rating categories for securities in which the Fund may
invest.
Corporate debt obligations that are not determined to be investment
grade are high-yield, high-risk bonds, typically subject to greater
market fluctuations and greater risk of loss of income and principal
due to an issuer's default. Lower-rated bonds or unrated bonds are
commonly referred to as `junk bonds.'' To a greater extent than
investment grade bonds, lower rated bonds tend to reflect short-term
corporate, economic and market developments, as well as investor
perceptions of the issuer's credit quality. In addition, lower rated
bonds may be more difficult to dispose of or to value than high-rated,
lower-yielding bonds. The Fund does not intend to invest more than 5%
of its assets in corporate debt obligations that are not investment-
grade bonds (excluding securities convertible into equity securities)
during the current fiscal year.
The Adviser attempts to reduce the risks described above through
diversification of the portfolio and by credit analysis of each issuer
as well as by monitoring broad economic trends and corporate and
legislative developments.
RESTRICTED SECURITIES
The Fund expects that any restricted securities would be acquired
either from institutional investors who originally acquired the
securities in private placements or directly from the issuers of the
securities in private placements. Restricted securities and
securities that are not readily marketable may sell at a discount from
the price they would bring if freely marketable.
The ability of the Trustees to determine the liquidity of certain
restricted securities is permitted under a Securities and Exchange
Commission (``SEC'') Staff position set forth in the adopting
release for Rule 144A under the Securities Act of 1933 (the
``Rule''). The Rule is a non-exclusive safe-harbor for certain
secondary market transactions involving securities subject to
restrictions on resale under federal securities laws. The Rule
provides an exemption from registration for resales of otherwise
restricted securities to qualified institutional buyers. The Rule
was expected to further enhance the liquidity of the secondary
market for securities eligible for resale under the Rule. The
Staff of the SEC has left the question of determining the
liquidity of all restricted securities to the Trustees. The
Trustees may consider the following criteria in determining the
liquidity of certain restricted securities:
. the frequency of trades and quotes for the security;
. the number of dealers willing to purchase or sell the security
and the number of other potential buyers;
. dealer undertakings to make a market in the security; and
. the nature of the security and the nature of the marketplace
trades.
TEMPORARY INVESTMENTS
The Fund may also invest in temporary investments from time to time for
defensive purposes.
MONEY MARKET INSTRUMENTS
The Fund may invest in the following money market instruments:
oinstruments of domestic and foreign banks and savings associations
if they have capital, surplus, and undivided profits of over
$100,000,000, or if the principal amount of the instrument is
insured in full by the Bank Insurance Fund, which is administered by
the Federal Deposit Insurance Corporation ("FDIC"), or the Savings
Association Insurance Fund, which is administered by the FDIC; and
oprime commercial paper (rated A-1 by S&P , Prime-1 by Moody's, or
F-1 by Fitch).
U.S. GOVERNMENT OBLIGATIONS
The types of U.S. government obligations in which the Fund may invest
generally include direct obligations of the U.S. Treasury (such as
U.S. Treasury bills, notes, and bonds) and obligations issued or
guaranteed by U.S. government agencies or instrumentalities. These
securities are backed by:
othe full faith and credit of the U.S. Treasury;
othe issuer's right to borrow from the U.S. Treasury;
othe discretionary authority of the U.S. government to purchase
certain obligations of agencies or instrumentalities; or
othe credit of the agency or instrumentality issuing the obligations.
Examples of agencies and instrumentalities which may not always
receive financial support from the U.S. government are:
oFederal Home Loan Banks;
oFederal National Mortgage Association;
oStudent Loan Marketing Association; and
oFederal Home Loan Mortgage Corporation.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
These transactions are made to secure what is considered to be an
advantageous price or yield for the Fund. No fees or other expenses, other
than normal transaction costs, are incurred. However, liquid assets of the
Fund sufficient to make payment for the securities to be purchased are
segregated on the Fund's records at the trade date. These assets are marked
to market daily and are maintained until the transaction has been settled.
The Fund does not intend to engage in when-issued and delayed delivery
transactions to an extent that would cause the segregation of more than 20%
of the total value of its assets.
LENDING OF PORTFOLIO SECURITIES
The collateral received when the Fund lends portfolio securities must be
valued daily and, should the market value of the loaned securities
increase, the borrower must furnish additional collateral to the Fund.
During the time portfolio securities are on loan, the borrower pays the
Fund any dividends or interest paid on such securities. Loans are subject
to termination at the option of the Fund or the borrower. The Fund may pay
reasonable administrative and custodial fees in connection with a loan and
may pay a negotiated portion of the interest earned on the cash or
equivalent collateral to the borrower or placing broker. The Fund does not
have the right to vote securities on loan, but would terminate the loan and
regain the right to vote if that were considered important with respect to
the investment.
REPURCHASE AGREEMENTS
The Fund or its custodian will take possession of the securities subject to
repurchase agreements, and these securities will be marked to market daily.
In the event that a defaulting seller filed for bankruptcy or became
insolvent, disposition of such securities by the Fund might be delayed
pending court action. The Fund believes that under the regular procedures
normally in effect for custody of the Fund's portfolio securities subject
to repurchase agreements, a court of competent jurisdiction would rule in
favor of the Fund and allow retention or disposition of such securities.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are found
by the Fund's Adviser to be creditworthy pursuant to guidelines established
by the Board of Trustees.
REVERSE REPURCHASE AGREEMENTS
The Fund may also enter into reverse repurchase agreements. These
transactions are similar to borrowing cash. In a reverse repurchase
agreement, the Fund transfers possession of a portfolio instrument to
another person, such as a financial institution, broker, or dealer, in
return for a percentage of the instrument's market value in cash, and
agrees that on a stipulated date in the future, the Fund will repurchase
the portfolio instrument by remitting the original consideration plus
interest at an agreed upon rate. The use of reverse repurchase agreements
may enable the Fund to avoid selling portfolio instruments at a time when a
sale may be deemed to be disadvantageous, but the ability to enter into
reverse repurchase agreements does not ensure that the Fund will be able to
avoid selling portfolio instruments at a disadvantageous time.
When effecting reverse repurchase agreements, liquid assets of the Fund, in
a dollar amount sufficient to make payment for the obligations to be
purchased, are segregated at the trade date. These securities are marked to
market daily and are maintained until the transaction is settled.
PUT AND CALL OPTIONS
The Fund may purchase listed put options on stocks or write covered
call options to protect against price movements in particular
securities in its portfolio and generate income. A put option gives
the Fund, in return for a premium, the right to sell the underlying
security to the writer (seller) at a specified price during the term
of the option. As writer of a call option, the Fund has the obligation
upon exercise of the option during the option period to deliver the
underlying security upon payment of the exercise price.
The Fund may only: (1) buy put options which are listed on a
recognized options exchange and which are on securities held in its
portfolio; and (2) sell listed call options either on securities held
in its portfolio or on securities which it has the right to obtain
without payment of further consideration (or has segregated cash in
the amount of any such additional consideration). The Fund will
maintain its positions in securities, option rights, and segregated
cash subject to puts and calls until the options are exercised,
closed, or expire. An option position may be closed out only on an
exchange which provides a secondary market for an option of the same
series. Although the Adviser will consider liquidity before entering
into option transactions, there is no assurance that a liquid
secondary market on an exchange will exist for any particular option
or at any particular time. The Fund reserves the right to hedge the
portfolio by buying financial futures and put options on stock index
futures and financial futures.
FUTURES TRANSACTIONS
The Fund may purchase and sell financial futures contracts to hedge
against the effects of changes in the value of portfolio securities due to
anticipated changes in interest rates and market conditions without
necessarily buying or selling the securities. The Fund also may purchase
and sell stock index futures to hedge against changes in prices. the Fund
will not engage in futures transactions for speculative purposes.
FINANCIAL FUTURES CONTRACTS
A futures contract is a firm commitment by two parties: the seller who
agrees to make delivery of the specific type of security called for in
the contract ("going short") and the buyer who agrees to take delivery
of the security ("going long") at a certain time in the future.
In the fixed-income securities market, price moves inversely to
interest rates. A rise in rates means a drop in price. Conversely, a
drop in rates means a rise in price. In order to hedge its holdings of
fixed-income securities against a rise in market interest rates, the
Fund could enter into contracts to deliver securities at a
predetermined price (i.e., "go short") to protect itself against the
possibility that the prices of its fixed-income securities may decline
during the Fund's anticipated holding period. The Fund would "go long"
(agree to purchase securities in the future at a predetermined price)
to hedge against a decline in market interest rates.
Stock index futures contracts are based on indices that reflect the
market value of common stock of the firms included in the indices. An
index futures contract is an agreement pursuant to which two parties
agree to take or make delivery of an amount of cash equal to the
differences between the value of the index at the close of the last
trading day of the contract and the price at which the index contract
was originally written.
"MARGIN" IN FUTURES TRANSACTIONS
Unlike the purchase or sale of a security, the Fund does not pay or
receive money upon the purchase or sale of a futures contract. Rather,
the Fund is required to deposit an amount of "initial margin" in cash
or U.S. Treasury bills with its custodian (or the broker, if legally
permitted). The nature of initial margin in futures transactions is
different from that of margin in securities transactions in that
futures contract initial margin does not involve the borrowing of
funds by the Fund to finance the transactions. Initial margin is in
the nature of a performance bond or good-faith deposit on the contract
which is returned to the Fund upon termination of the futures
contract, assuming all contractual obligations have been satisfied.
A futures contract held by the Fund is valued daily at the official
settlement price of the exchange on which it is traded. Each day the
Fund pays or receives cash, called "variation margin," equal to the
daily change in value of the futures contract. This process is known
as "marking to market." Variation margin does not represent a
borrowing or loan by the Fund but is instead settlement between the
Fund and the broker of the amount one would owe the other if the
futures contract expired. In computing its daily net asset value, the
Fund will mark to market its open futures positions.
The Fund is also required to deposit and maintain margin when it writes
call options on futures contracts.
PORTFOLIO TURNOVER
The Fund will not attempt to set or meet a portfolio turnover rate since
any turnover would be incidental to transactions undertaken in an attempt
to achieve the Fund's investment objective. Portfolio turnover will tend
to rise during periods of economic turbulence and decline during periods of
stable growth. A higher turnover rate (100% or more) increases transaction
costs (e.g. brokerage commissions) and increases realized gains and losses.
It is estimated the rate of portfolio turnover will, generally, not exceed
250 %.
INVESTMENT LIMITATIONS
The following limitations are fundamental, except that no investment
limitation of the Fund shall prevent the Fund from investing substantially
all of its assets (except for assets which are not considered `investment
securities''under the Investment Company Act of 1940, or assets exempted
by the Securities and Exchange Commission) in an open-end investment
company with substantially the same investment objectives:
CONCENTRATION OF INVESTMENTS
The Fund will not purchase securities if, as a result of such
purchase, 25% or more of the value of its total assets would be
invested in any one industry. However, the Fund may at times invest
25% or more of the value of its total assets in cash or cash items
(not including certificates of deposit), securities issued or
guaranteed by the U.S. government, its agencies or instrumentalities,
or repurchase agreements secured by such instruments.
INVESTING IN COMMODITIES
The Fund will not purchase or sell commodities. The Fund reserves the
right to purchase financial futures and put options on stock index
futures and on financial futures.
INVESTING IN REAL ESTATE
The Fund will not purchase or sell real estate, although it may invest
in the securities of companies whose business involves the purchase or
sale of real estate, or in securities which are secured by real estate
or interests in real estate.
BUYING ON MARGIN
The Fund will not purchase any securities on margin but may obtain
such short-term credits as may be necessary for the clearance of
transactions and may make margin payments in connection with buying
financial futures, put options on stock index futures, and put options
on financial futures.
SELLING SHORT
The Fund will not sell securities short unless at all times when a
short position is open, it owns an equal amount of such securities or
securities convertible into or exchangeable, without payment of any
further consideration, for securities of the same issuer as, and equal
in amount to, the securities sold short; and unless not more than 10%
of the value of the Fund's net assets (taken at current value) is held
as collateral for such sales at any one time.
ISSUING SENIOR SECURITIES AND BORROWING MONEY
The Fund will not issue senior securities, except as permitted by its
investment objective and policies, and except that the Fund may borrow
money and engage in reverse repurchase agreements only in amounts up
to one-third of the value of its net assets, including the amounts
borrowed. The Fund will not borrow money or engage in reverse
repurchase agreements for investment leverage, but rather as a
temporary, extraordinary, or emergency measure, or to facilitate
management of the portfolio by enabling the Fund to meet redemption
requests where the liquidation of portfolio securities is deemed to be
inconvenient or disadvantageous. The Fund will not purchase any
securities while any such borrowings (including reverse repurchase
agreements) are outstanding.
LENDING CASH OR SECURITIES
The Fund will not lend any of its assets except portfolio securities.
This shall not prevent the purchase or holding of corporate or
government bonds, debentures, notes, certificates of indebtedness, or
other debt securities of an issuer, repurchase agreements, or other
transactions which are permitted by the Fund's investment objective
and policies or Declaration of Trust.
UNDERWRITING
The Fund will not underwrite any issue of securities, except as it may
be deemed to be an underwriter under the Securities Act of 1933 in
connection with the sale of securities in accordance with its
investment objective, policies, and limitations.
INVESTING IN MINERALS
The Fund will not purchase interests in oil, gas, or other mineral
exploration or development programs, although it may purchase the
securities of issuers which invest in or sponsor such programs.
DIVERSIFICATION OF INVESTMENTS
With respect to securities comprising 75% of the value of its total
assets, the Fund will not purchase the securities of any issuer (other
than cash, cash items, or securities issued or guaranteed by the U.S.
government, its agencies, or instrumentalities, and repurchase
agreements collateralized by such securities) if, as a result, more
than 5% of the value of its total assets would be invested in the
securities of such issuer and will not acquire more than 10% of the
outstanding voting securities of any issuer. For these purposes, the
Fund takes all common stock and all preferred stock of an issuer each
as a single class, regardless of priorities, series, designations, or
other differences.
The above investment limitations cannot be changed without shareholder
approval. The following limitations, however, may be changed by the
Trustees without shareholder approval, except that no investment limitation
of the Fund shall prevent the Fund from investing substantially all of its
assets (except for assets which are not considered `investment
securities''under the Investment Company Act of 1940, or assets exempted
by the Securities and Exchange Commission) in an open-end investment
company with substantially the same investment objective. Shareholders will
be notified before any material changes in these limitations become
effective.
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
The Fund will not purchase securities of other investment companies,
except by purchases in the open market involving only customary
brokerage commissions and as a result of which not more than 10% of
the value of its total assets would be invested in such securities, or
except as part of a merger, consolidation, or other acquisition. (It
should be noted that investment companies incur certain expenses such
as management fees and, therefore, any investment by the Fund in
shares of another investment company would be subject to such
duplicate expenses.)
INVESTING IN ILLIQUID SECURITIES
The Fund will not invest more than 15% of the value of its net
assets in illiquid securities, including certain restricted
securities not determined by the Trustees to be liquid, over-the-
counter options, and repurchase agreements providing for
settlement in more than seven days after notice.
INVESTING IN NEW ISSUERS
The Fund will not invest more than 50% of the value of its total
assets in securities of issuers which have records of less than three
years of continuous operations, including the operation of any
predecessor.
INVESTING IN ISSUERS WHOSE SECURITIES ARE OWNED BY OFFICERS AND
TRUSTEES OF THE TRUST
The Fund will not purchase or retain the securities of any issuer if
the Officers and Trustees of the Trust or the Fund's Adviser, owning
individually more than 1/2 of 1% of the issuer's securities, together
own more than 5% of the issuer's securities.
PLEDGING ASSETS
The Fund will not mortgage, pledge, or hypothecate any assets, except
to secure permitted borrowings. In those cases, it may pledge assets
having a market value not exceeding the lesser of the dollar amounts
borrowed or 10% of the value of total assets at the time of the
borrowing.
PURCHASING PUT OPTIONS
The Fund will not purchase put options on securities unless the
securities are held in the Fund's portfolio and not more than 5% of
the value of the Fund's total assets would be invested in premiums on
open put options.
WRITING COVERED CALL OPTIONS
The Fund will not write call options on securities unless the
securities are held in the Fund's portfolio or unless the Fund is
entitled to them in deliverable form without further payment or after
segregating cash in the amount of any further payment.
ACQUIRING SECURITIES
The Fund will not purchase securities of a company for the purpose of
exercising control or management. However, the Fund may invest in up
to 10% of the voting securities of any one issuer and may exercise its
voting powers consistent with the best interests of the Fund. In
addition, the Fund, other companies advised by the Fund's Adviser, and
other affiliated companies may together buy and hold substantial
amounts of voting stock of a company and may vote together in regard
to such company's affairs. In some such cases, the Fund and its
affiliates might collectively be considered to be in control of such
company. In some cases, Trustees and other persons associated with the
Fund and its affiliates might possibly become directors of companies
in which the Fund holds stock.
INVESTING IN WARRANTS
The Fund will not invest more than 5% of its net assets in warrants.
No more than 2% of the Fund's net assets, to be included within the
overall 5% limit on investments in warrants, may be warrants which are
not listed on the New York or American Stock Exchanges. Warrants
acquired in units or attached to securities may be deemed to be
without value for purposes of this policy.
For purposes of its policies and limitations, the Fund considers
certificates of deposit and demand and time deposits issued by a U.S.
branch of a domestic bank or savings association having capital, surplus,
and undivided profits in excess of $100,000,000 at the time of investment
to be "cash items."
Except with respect to borrowing money, if a percentage limitation is
adhered to at the time of investment, a later increase or decrease in
percentage resulting from any change in value or net assets will not result
in a violation of such restriction. The Fund has no intent to borrow money,
sell securities short, invest in reverse repurchase agreements or corporate
securities.in excess of 5% of the value of its total assets in the coming
fiscal year.
In addition to the limitations set forth above, the Fund will not purchase
or sell real estate limited partnership interests or oil, gas, or other
mineral leases, except that the Fund may purchase or sell securities of
companies which invest in or hold the foregoing.
FEDERATED EQUITY FUNDS MANAGEMENT
Officers and Trustees are listed with their addresses, birthdates, present
positions with Federated Equity Funds, and principal occupations.
John F. Donahue@*
Federated Investors Tower
Pittsburgh, PA
Birthdate: July 28, 1924
Chairman
Chairman and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; Chairman and Director, Federated
Research Corp. and Federated Global Research Corp.; Chairman, Passport
Research, Ltd.; Chief Executive Officer and Director or Trustee of the
Funds. Mr. Donahue is the father of J. Christopher Donahue, Executive vice
President of the Fund.
Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 17, 1923
Vice President
Executive Vice President and Trustee, Federated Investors; Chairman and
Director, Federated Securities Corp.; President or Vice President of some
of the Funds; Director or Trustee of some of the Funds.
Thomas G. Bigley
28th Floor, One Oxford Centre
Pittsburgh, PA
Birthdate: February 3, 1934
Trustee
Chairman of the Board, Children's Hospital of Pittsburgh; formerly, Senior
Partner, Ernst & Young LLP; Director, MED 3000 Group, Inc.; Trustee,
University of Pittsburgh; Director or Trustee of the Funds.
John T. Conroy, Jr.
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL
Birthdate: June 23, 1937
Trustee
President, Investment Properties Corporation; Senior Vice-President, John
R. Wood and Associates, Inc., Realtors; Partner or Trustee in private real
estate ventures in Southwest Florida; formerly, President, Naples Property
Management, Inc. and Northgate Village Development Corporation; Director or
Trustee of the Funds.
William J. Copeland
One PNC Plaza - 23rd Floor
Pittsburgh, PA
Birthdate: July 4, 1918
Trustee
Director and Member of the Executive Committee, Michael Baker, Inc.;
formerly, Vice Chairman and Director, PNC Bank, N.A., and PNC Bank Corp.;
Director, Ryan Homes, Inc.; Director or Trustee of the Funds.
James E. Dowd
571 Hayward Mill Road
Concord, MA
Birthdate: May 18, 1922
Trustee
Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Directoror or
Trustee of the Funds.
Lawrence D. Ellis, M.D.*
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA
Birthdate: October 11, 1932
Trustee
Professor of Medicine, University of Pittsburgh; Medical Director,
University of Pittsburgh Medical Center - Downtown; Member, Board of
Directors, University of Pittsburgh Medical Center; formerly, Hematologist,
Oncologist, and Internist, Presbyterian and Montefiore Hospitals; Director
or Trustee of the Funds.
Edward L. Flaherty, Jr.@
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: June 18, 1924
Trustee
Attorney of Counsel, Miller, Ament, Henny & Kochuba; Director, Eat'N Park
Restaurants, Inc.; formerly, Counsel, Horizon Financial, F.A., Western
Region; Director or Trustee of the Funds.
Peter E. Madden
Seacliff
562 Bellevue Avenue
Newport, RI
Birthdate: March 16, 1942
Trustee
Consultant; Former State Representative, Commonwealth of Massachusetts;
formerly, President, State Street Bank and Trust Company and State Street
Boston Corporation; Director or Trustee of the Funds.
Gregor F. Meyer
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: October 6, 1926
Trustee
Attorney, Member of Miller, Ament, Henny & Kochuba; Chairman, Meritcare,
Inc.; Director, Eat'N Park Restaurants, Inc.; Director or Trustee of the
Funds.
John E. Murray, Jr., J.D., S.J.D.
President, Duquesne University
Pittsburgh, PA
Birthdate: December 20, 1932
Trustee
President, Law Professor, Duquesne University; Consulting Partner, Mollica,
Murray and Hogue; Director or Trustee of the Funds.
Wesley W. Posvar
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA
Birthdate: September 14, 1925
Trustee
Professor, International Politics; Management Consultant; Trustee, Carnegie
Endowment for International Peace, RAND Corporation, Online Computer
Library Center, Inc., National Defense University, U.S. Space Foundation
and Czech Management Center; President Emeritus, University of Pittsburgh;
Founding Chairman, National Advisory Council for Environmental Policy and
Technology, Federal Emergency Management Advisory Board and Czech
Management Center; Director or Trustee of the Funds.
Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA
Birthdate: June 21, 1935
Trustee
Public relations/Marketing/Conference Planning, Manchester Craftsmen's
Guild; Restaurant Consultant, Frick Art & History Center; Conference
Coordinator, University of Pittsburgh Art History Department; Director or
Trustee of the Funds.
J. Christopher Donahue
Federated Investors Tower
Pittsburgh, PA
Birthdate: April 11, 1949
Executive Vice President
President and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; President and Director, Federated
Research Corp. and Federated Global Research Corp.; President, Passport
Research, Ltd.; Trustee, Federated Shareholder Services Company, and
Federated Shareholder Services; Director, Federated Services Company;
President or Executive Vice President of the Funds; Director or Trustee of
some of the Funds. Mr. Donahue is the son of John F. Donahue, Chairman of
the Trust.
Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
Executive Vice President
Vice Chairman, Treasurer, and Trustee, Federated Investors; Vice President,
Federated Advisers, Federated Management, Federated Research, Federated
Research Corp., Federated Global Research Corp. and Passport Research,
Ltd.; Executive Vice President and Director, Federated Securities Corp.;
Trustee, Federated Shareholder Services Company; Trustee or Director of
some of the Funds; President, Executive Vice President and Treasurer of
some of the Funds.
Glen R. Johnson
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 2, 1929
President
Trustee, Federated Investors; President and/or Trustee of some of the
Funds; staff member, Federated Securities Corp. and Federated Shareholder
Services.
John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 26, 1938
Executive Vice President , Secretary and Treasurer
Executive Vice President, Secretary, and Trustee, Federated Investors;
Trustee, Federated Advisers, Federated Management, and Federated Research;
Director, Federated Research Corp. and Federated Global Research Corp.;
Trustee, Federated Shareholder Services Company; Director, Federated
Services Company; President and Trustee, Federated Shareholder Services;
Director, Federated Securities Corp.; Executive Vice President and
Secretary of the Funds; Treasurer of some of the Funds.
*This Trustee is deemed to be an `interested person'' as defined in the
Investment Company Act of 1940.
@ Member of the Executive Committee. The Executive Committee of the Board
of Trustees handles the responsibilities of the Board between meetings of
the Board.
As used in the table above, "The Funds" and "Funds" mean the following
investment companies: 111 Corcoran Funds; Annuity Management Series; Arrow
Funds; Automated Government Money Trust; Blanchard Funds; Blanchard
Precious Metals Fund, Inc.; Cash Trust Series II; Cash Trust Series, Inc. ;
DG Investor Series; Edward D. Jones & Co. Daily Passport Cash Trust;
Federated Adjustable Rate U.S. Government Fund, Inc.; Federated American
Leaders Fund, Inc.; Federated ARMs Fund; Federated Equity Funds; Federated
Equity Income Fund, Inc.; Federated Fund for U.S. Government Securities,
Inc.; Federated GNMA Trust; Federated Government Income Securities, Inc.;
Federated Government Trust; Federated High Income Bond Fund, Inc.;
Federated High Yield Trust; Federated Income Securities Trust; Federated
Income Trust; Federated Index Trust; Federated Institutional Trust;
Federated Insurance Series; Federated Master Trust; Federated Municipal
Opportunities Fund, Inc.; Federated Municipal Securities Fund, Inc.;
Federated Municipal Trust; Federated Short-Term Municipal Trust; Federated
Short-Term U.S. Government Trust; Federated Stock and Bond Fund, Inc.;
Federated Stock Trust; Federated Tax-Free Trust; Federated Total Return
Series, Inc.; Federated U.S. Government Bond Fund; Federated U.S.
Government Securities Fund: 1-3 Years; Federated U.S. Government Securities
Fund: 2-5 Years; Federated U.S. Government Securities Fund: 5-10 Years;
Federated Utility Fund, Inc.; First Priority Funds; Fixed Income
Securities, Inc.; High Yield Cash Trust; Intermediate Municipal Trust;
International Series, Inc.; Investment Series Funds, Inc.; Investment
Series Trust; Liberty Term Trust, Inc. - 1999; Liberty U.S. Government
Money Market Trust; Liquid Cash Trust; Managed Series Trust; Money Market
Management, Inc.; Money Market Obligations Trust; Money Market Trust;
Municipal Securities Income Trust; Newpoint Funds; Peachtree Funds; RIMCO
Monument Funds; Targeted Duration Trust; Tax-Free Instruments Trust; The
Planters Funds; The Starburst Funds; The Starburst Funds II; The Virtus
Funds; Trust for Financial Institutions; Trust for Government Cash
Reserves; Trust for Short-Term U.S. Government Securities; Trust for U.S.
Treasury Obligations; and World Investment Series, Inc.
FUND OWNERSHIP
Officers and Trustees own less than 1% of the Fund's outstanding Shares.
TRUSTEES COMPENSATION
AGGREGATE
NAME , COMPENSATION
POSITION WITH FROM TOTAL COMPENSATION PAID
TRUST TRUST* FROM FUND COMPLEX +
John F. Donahue $0 $0 for the Trust and
Chairman and Trustee 68 other investment companies in the Fund
Complex
Thomas G. Bigley $0 $20,688 for the Trust and
Trustee 49 other investment companies in the Fund
Complex
John T. Conroy, Jr. $1472 $117,202 for the Trust and
Trustee 64 other investment companies in the Fund
Complex
William J. Copeland $1472 $117,202 for the Trust and
Trustee 64 other investment companies in the Fund
Complex
James E. Dowd $1472 $117,202 for the Trust and
Trustee 64 other investment companies in the Fund
Complex
Lawrence D. Ellis, M.D. $1342 $106,460 for the Trust and
Trustee 64 other investment companies in the Fund
Complex
Edward L. Flaherty, Jr. $1472 $117,202 for the Trust and
Trustee 64 other investment companies in the Fund
Complex
Peter E. Madden $1131 $90,563 for the Trust and
Trustee 64 other investment companies in the Fund
Complex
Gregor F. Meyer $1342 $106,460 for the Trust and
Trustee 64 other investment companies in the Fund
Complex
John E. Murray $777 $0 for the Trust and
Trustee 69 other investment companies in the Fund
Complex
Wesley W. Posvar $1342 $106,460 for the Trust and
Trustee 64 other investment companies in the Fund
Complex
Marjorie P. Smuts$1342 $106,460 for the Trust and
Trustee 64 other investment companies in the Fund
Complex
*Information is furnished for the fiscal year ended October 31, 1995.
+The information is provided for the last calendar year.
TRUSTEE LIABILITY
The Trust's Declaration of Trust provides that the Trustees will not be
liable for errors of judgment or mistakes of fact or law. However, they are
not protected against any liability to which they would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of their office.
INVESTMENT ADVISORY SERVICES
ADVISER TO THE FUND
The Fund's investment adviser is Federated Management (the "Adviser"). It
is a subsidiary of Federated Investors. All the voting securities of
Federated Investors are owned by a trust, the trustees of which are John F.
Donahue, his wife, and his son, J. Christopher Donahue.
The Adviser shall not be liable to the Trust, the Fund, or any shareholder
of the Fund for any losses that may be sustained in the purchase, holding,
or sale of any security or for anything done or omitted by it, except acts
or omissions involving willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties imposed upon it by its contract with the
Trust.
ADVISORY FEES
For its advisory services, Federated Management receives an annual
investment advisory fee as described in the prospectus.
STATE EXPENSE LIMITATIONS
The Adviser has undertaken to comply with the expense limitations
established by certain states for investment companies whose shares
are registered for sale in those states. If the Fund's normal
operating expenses (including the investment advisory fee, but not
including brokerage commissions, interest, taxes, and extraordinary
expenses) exceed 2-1/2% per year of the first $30 million of average
net assets, 2% per year of the next $70 million of average net assets,
and 1-1/2% per year of the remaining average net assets, the Adviser
will reimburse the Fund for its expenses over the limitation.
If the Fund's monthly projected operating expenses exceed this
limitation, the investment advisory fee paid will be reduced by the
amount of the excess, subject to an annual adjustment. If the expense
limitation is exceeded, the amount to be reimbursed by the Adviser
will be limited, in any single fiscal year, by the amount of the
investment advisory fee.
This arrangement is not part of the advisory contract and may be
amended or rescinded in the future.
OTHER RELATED SERVICES
Affiliates of the Adviser may, from time to time, provide certain
electronic equipment and software to institutional customers in order to
facilitate the purchase of shares of funds offered by Federated Securities
Corp.
BROKERAGE TRANSACTIONS
The Adviser may select brokers and dealers who offer brokerage and research
services. These services may be furnished directly to the Fund or to the
Adviser and may include: advice as to the advisability of investing in
securities; security analysis and reports; economic studies; industry
studies; receipt of quotations for portfolio evaluations; and similar
services. Research services provided by brokers and dealers may be used by
the Adviser or its affiliates in advising the Fund and other accounts. To
the extent that receipt of these services may supplant services for which
the Adviser or its affiliates might otherwise have paid, it would tend to
reduce their expenses. The Adviser and its affiliates exercise reasonable
business judgment in selecting brokers who offer brokerage and research
services to execute securities transactions. They determine in good faith
that commissions charged by such persons are reasonable in relationship to
the value of the brokerage and research services provided.
Although investment decisions for the Fund are made independently from
those of the other accounts managed by the Adviser, investments of the type
the Fund may make may also be made by those other accounts. When the Fund
and one or more other accounts managed by the Adviser are prepared to
invest in, or desire to dispose of , the same security, available
investments or opportunities for sales will be allocated in a manner
believed by the Adviser to be equitable to each. In some cases, this
procedure may adversely affect the price paid or received by the Fund or
the size of the position obtained or disposed of by the Fund. In other
cases, however, it is believed that coordination and the ability to
participate in volume transactions will be to the benefit of the Fund.
OTHER SERVICES
FUND ADMINISTRATION
Federated Services Company, a subsidiary of Federated Investors, provides
administrative personnel and services to the Fund for a fee as described in
the prospectus. Dr. Henry J. Gailliot, an officer of Federated Management,
the Adviser to the Fund, holds approximately 20% of the outstanding common
stock and serves as a director of Commercial Data Services, Inc., a company
which provides computer processing services to Federated Services Company.
CUSTODIAN
State Street Bank and Trust Company, P.O. Box 8600, Boston, Massachusetts
02266-8600, is custodian for the securities and cash of the Fund.
Federated Services Company, Pittsburgh, PA, provides certain accounting and
recordkeeping services with respect to the Fund's portfolio investments.
The fee paid for this service is based upon the level of the Fund's average
net assets for the period, plus out-of-pocket expenses.
TRANSFER AGENT
Federated Services Company, P.O. Box 8600, Boston, Massachusetts 02266-
8600, through its registered transfer agent, Federated Shareholder
Services Company, maintains all necessary shareholder records and serves as
transfer agent for the Fund. For its services, the transfer agent receives
a fee based upon the size, type, and number of accounts and transactions
made by shareholders. Federated Services Company also maintains the Fund's
accounting records. The fee paid for this service is based upon the level
of the Fund's average net assets for the period plus out-of-pocket
expenses.
INDEPENDENT AUDITORS
The independent auditors for the Fund are Ernst & Young LLP, One Oxford
Centre, Pittsburgh, Pennsylvania 15219.
PURCHASING SHARES
Except under certain circumstances described in the prospectus, Shares are
sold at their net asset value (plus a sales charge on Class A Shares only)
on days the New York Stock Exchange is open for business. The procedure for
purchasing Shares is explained in each prospectus under "How To Purchase
Shares."
DISTRIBUTION PLAN (CLASS B SHARES AND CLASS C SHARES ONLY) AND
SHAREHOLDER SERVICES AGREEMENT
These arrangements permit the payment of fees to financial institutions,
the distributor, and Federated Shareholder Services as appropriate, to
stimulate distribution activities and to cause services to be provided to
shareholders by a representative who has knowledge of the shareholder's
particular circumstances and goals. These activities and services may
include, but are not limited to, marketing efforts; providing office space,
equipment, telephone facilities, and various clerical, supervisory,
computer, and other personnel as necessary or beneficial to establish and
maintain shareholder accounts and records; processing purchase and
redemption transactions and automatic investments of client account cash
balances; answering routine client inquiries; and assisting clients in
changing dividend options, account designations, and addresses.
By adopting the Distribution Plan (Class B Shares and Class C Shares only),
the Trustees expect that the Class B Shares and Class C Shares of the Fund
will be able to achieve a more predictable flow of cash for investment
purposes and to meet redemptions. This will facilitate more efficient
portfolio management and assist the Fund in pursuing its investment
objective. By identifying potential investors whose needs are served by the
Fund's objective, and properly servicing these accounts, it may be possible
to curb sharp fluctuations in rates of redemptions and sales.
Other benefits, which may be realized under either arrangement, may
include: (1) providing personal services to shareholders; (2) investing
shareholder assets with a minimum of delay and administrative detail; (3)
enhancing shareholder recordkeeping systems; and (4) responding promptly to
shareholders' requests and inquiries concerning their accounts.
CONVERSION TO FEDERAL FUNDS
It is the Fund's policy to be as fully invested as possible so that maximum
interest may be earned. To this end, all payments from shareholders must be
in federal funds or be converted into federal funds before shareholders
begin to earn dividends. Federated Services Company acts as the
shareholder's agent in depositing checks and converting them to federal
funds.
PURCHASES BY SALES REPRESENTATIVES, TRUSTEES, AND EMPLOYEES OF THE
FUND
Trustees, employees, and sales representatives of the Fund, Federated
Management, and Federated Securities Corp., or their affiliates, or any
investment dealer who has a sales agreement with Federated Securities
Corp., and their spouses and children under 21, may buy Class A Shares at
net asset value without a sales charge. Shares may also be sold without a
sales charge to trusts or pension or profit-sharing plans for these
persons.
These sales are made with the purchaser's written assurance that the
purchase is for investment purposes and that the securities will not be
resold except through redemption by the Fund.
DETERMINING NET ASSET VALUE
Net asset value generally changes each day. The days on which net asset
value is calculated by the Fund are described in each prospectus.
DETERMINING MARKET VALUE OF SECURITIES
Market values of the Fund's portfolio securities, other than options, are
determined as follows:
o according to the last sale price on a national securities
exchange, if available;
o in the absence of recorded sales for equity securities, according
to the mean between the last closing bid and asked prices and for
bonds and other fixed income securities as determined by an
independent pricing service for unlisted equity securities, the
latest bid prices; or
o for short-term obligations, according to the mean between bid and
asked prices as furnished by an independent pricing service or at
fair value as determined in good faith by the Trustees.
Options are valued at the market values established by the exchanges at the
close of option trading unless the Trustees determine in good faith that
another method of valuing option positions is necessary.
REDEEMING SHARES
The Fund redeems Shares at the next computed net asset value, less any
applicable contingent deferred sales charge, after the Fund receives the
redemption request. Redemption procedures are explained in each prospectus
under "How To Redeem Shares." Although the transfer agent does not charge
for telephone redemptions, it reserves the right to charge a fee for the
cost of wire-transferred redemptions of less than $5,000.
Class B Shares redeemed within one to six years of purchase and Class C
Shares and applicable Class A Shares redeemed within one year of purchase
may be subject to a contingent deferred sales charge. The amount of the
contingent deferred sales charge is based upon the amount of the
administrative fee paid at the time of purchase by the distributor to the
financial institution for services rendered, and the length of time the
investor remains a shareholder in the Fund. Should financial institutions
elect to receive an amount less than the administrative fee that is stated
in the prospectus for servicing a particular shareholder, the contingent
deferred sales charge and/or holding period for that particular shareholder
will be reduced accordingly.
REDEMPTION IN KIND
Although the Trust intends to redeem Shares in cash, it reserves the right
under certain circumstances to pay the redemption price in whole or in part
by a distribution of securities from the respective Fund's portfolio. To
the extent available, such securities will be readily marketable.
The Trust has elected to be governed by Rule 18f-1 of the Investment
Company Act of 1940, as amended, under which the Fund is obligated to
redeem Shares for any one shareholder in cash only up to the lesser of
$250,000 or 1% of the respective class's net asset value during any 90-day
period.
Any redemption beyond this amount will also be in cash unless the Trustees
determine that payments should be in kind. In such a case, the Fund will
pay all or a portion of the remainder of the redemption in portfolio
instruments, valued in the same way as the Fund determines net asset value.
The portfolio instruments will be selected in a manner that the Trustees
deem fair and equitable.
Redemption in kind is not as liquid as a cash redemption. If redemption is
made in kind, shareholders receiving their securities and selling them
before their maturity could receive less than the redemption value of their
securities and could incur certain transaction costs.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect
its shareholders, the Trust has filed legal documents with Massachusetts
that expressly disclaim the liability of its shareholders for acts or
obligations of the Trust. These documents require notice of this disclaimer
to be given in each agreement, obligation, or instrument the Trust or its
Trustees enter into or sign.
In the unlikely event a shareholder is held personally liable for the
Trust's obligations, the Trust is required to use its property to protect
or compensate the shareholder. On request, the Trust will defend any claim
made and pay any judgment against a shareholder for any act or obligation
of the Trust. Therefore, financial loss resulting from liability as a
shareholder will occur only if the Trust itself cannot meet its obligations
to indemnify shareholders and pay judgments against them.
EXCHANGING SECURITIES FOR SHARES
Investors may exchange securities they already own for Shares, or they may
exchange a combination of securities and cash for Shares. An investor
should forward the securities in negotiable form with an authorized letter
of transmittal to Federated Securities Corp. The Fund will notify the
investor of its acceptance and valuation of the securities within five
business days of their receipt by State Street Bank.
The Fund values securities in the same manner as the Fund values its
assets. The basis of the exchange will depend upon the net asset value of
Shares on the day the securities are valued. One Share of the Fund will be
issued for each equivalent amount of securities accepted.
Any interest earned on the securities prior to the exchange will be
considered in valuing the securities. All interest, dividends,
subscription, or other rights attached to the securities become the
property of the Fund, along with the securities.
TAX CONSEQUENCES
Exercise of this exchange privilege is treated as a sale for federal income
tax purposes. Depending upon the cost basis of the securities exchanged for
Shares, a gain or loss may be realized by the investor.
TAX STATUS
THE FUND'S TAX STATUS
The Fund will pay no federal income tax because it expects to meet the
requirements of Subchapter M of the Internal Revenue Code of 1986, as
amended, applicable to regulated investment companies and to receive the
special tax treatment afforded to such companies. To qualify for this
treatment, the Fund must, among other requirements:
o derive at least 90% of its gross income from dividends, interest,
and gains from the sale of securities;
o derive less than 30% of its gross income from the sale of
securities held less than three months;
o invest in securities within certain statutory limits; and
o distribute to its shareholders at least 90% of its net income
earned during the year.
SHAREHOLDERS' TAX STATUS
Shareholders are subject to federal income tax on dividends and capital
gains received as cash or additional Shares. No portion of any income
dividend paid by the Fund is eligible for the dividends received deduction
available to corporations. These dividends, and any short-term capital
gains, are taxable as ordinary income.
CAPITAL GAINS
Shareholders will pay federal tax at capital gains rates on long-term
capital gains distributed to them regardless of how long they have
held the Fund Shares.
TOTAL RETURN
The average annual total return for each class of Shares of the Fund is the
average compounded rate of return for a given period that would equate a
$1,000 initial investment to the ending redeemable value of that
investment. The ending redeemable value is computed by multiplying the
number of Shares owned at the end of the period by the net asset value per
share at the end of the period. The number of Shares owned at the end of
the period is based on the number of Shares purchased at the beginning of
the period with $1,000, less any applicable sales charge adjusted over the
period by any additional Shares, assuming the quarterly reinvestment of all
dividends and distributions. Any applicable contingent deferred sales
charge is deducted from the ending value of the investment based on the
lesser of the original purchase price or the net asset value of Shares
redeemed.
Cumulative total return reflects total performance over a specified period
of time. This total return assumes and is reduced by the payment of the
maximum sales charge and/or the contingent deferred sales charge, if
applicable.
YIELD
The yield for each class of Shares of the Fund is determined by dividing
the net investment income per share (as defined by the Securities and
Exchange Commission) earned by any class of Shares over a thirty-day period
by the maximum offering price per share of the respective class on the last
day of the period. This value is annualized using semi-annual compounding.
This means that the amount of income generated during the thirty-day period
is assumed to be generated each month over a 12-month period and is
reinvested every six months. The yield does not necessarily reflect income
actually earned by the Fund because of certain adjustments required by the
Securities and Exchange Commission and, therefore, may not correlate to the
dividends or other distributions paid to the shareholders.
To the extent that financial institutions and broker/dealers charge fees in
connection with services provided in conjunction with an investment in any
class of Shares, the performance will be reduced for those shareholders
paying those fees.
PERFORMANCE COMPARISONS
The performance of each of the classes of Shares depends upon such
variables as:
o portfolio quality;
o average portfolio maturity;
o type of instruments in which the portfolio is invested;
o changes in interest rates and market value of portfolio
securities;
o changes in the Fund's or any class of Shares' expenses; and
o various other factors.
The Fund's performance fluctuates on a daily basis largely because net
earnings and offering price per Share fluctuate daily. Both net earnings
and offering price per Share are factors in the computation of yield and
total return. Investors may use financial publications and/or indices to
obtain a more complete view of the Fund's performance. When comparing
performance, investors should consider all relevant factors such as the
composition of any index used, prevailing market conditions, portfolio
compositions of other funds, and methods used to value portfolio securities
and compute offering price. The financial publications and/or indices which
the Fund uses in advertising may include:
O LIPPER ANALYTICAL SERVICES, INC., ranks funds in various fund
categories by making comparative calculations using total return.
Total return assumes the reinvestment of all capital gains
distributions and income dividends and takes into account any
change in net asset value over a specified period of time. From
time to time, the Fund will quote its Lipper ranking in
advertising and sales literature.
O DOW JONES INDUSTRIAL AVERAGE ("DJIA") is an unmanaged index
representing share prices of major industrial corporations,
public utilities, and transportation companies. Produced by the
Dow Jones & Company, it is cited as a principal indicator of
market conditions.
O STANDARD & POOR'S LOW-PRICED INDEX compares a group of
approximately twenty actively traded stocks priced under $25 for
one month periods and year-to-date.
O STANDARD & POOR'S DAILY STOCK PRICE INDEX OF 500 COMMON STOCKS
(S&P 500), a composite index of common stocks in industry,
transportation, and financial and public utility companies, can
be used to compare to the total returns of funds whose portfolios
are invested primarily in common stocks. In addition, the S&P 500
assumes reinvestments of all dividends paid by stocks listed on
its index. Taxes due on any of these distributions are not
included, nor are brokerage or other fees calculated in the
Standard & Poor's figures.
O MORNINGSTAR, INC., an independent rating service, is the publisher
of the bi-weekly Mutual Fund Values. Mutual Fund Values rates more
than 1,000 NASDAQ-listed mutual funds of all types, according to
their risk-adjusted returns. The maximum rating is five stars, and
ratings are effective for one month.
O VALUE LINE MUTUAL FUND SURVEY, published by Value Line Publishing,
Inc., analyzes price, yield, risk, and total return for equity and
fixed income mutual funds. The highest rating is One, and ratings
are effective for one month.
O CDA MUTUAL FUND REPORT, published by CDA Investment Technologies,
Inc., analyzes price, current yield, risk, total return, and
average rate of return (average annual compounded growth rate)
over specified time periods for the mutual fund industry.
O STRATEGIC INSIGHT MUTUAL FUND RESEARCH AND CONSULTING, ranks funds
in various fund categories by making comparative calculations
using total return. Total return assumes the reinvestment of all
capital gains distributions and income dividends and takes into
account any change in net asset value over a specified period of
time. From time to time, the Fund will quote its Strategic Insight
ranking in the "growth funds" category in advertising and sales
literature.
O MUTUAL FUND SOURCE BOOK, published by Morningstar, Inc., analyzes
price, yield, risk, and total return for equity and fixed income
funds.
O VALUE LINE COMPOSITE INDEX consists of approximately 1,700 common
equity securities. It is based on a geometric average of relative
price changes of the component stocks and does not include income.
O FINANCIAL PUBLICATIONS: The Wall Street Journal, Business Week,
Changing Times, Financial World, Forbes, Fortune, and Money
Magazines, among others--provide performance statistics over
specified time periods.
Advertisements and other sales literature for any class of Shares may quote
total returns which are calculated on non-standardized base periods. These
total returns also represent the historic change in the value of an
investment in any class of Shares based on quarterly reinvestment of
dividends over a specified period of time.
Advertisements may quote performance information which does not reflect the
effect of the sales charge on Class A Shares.
Advertising and other promotional literature may include charts, graphs and
other illustrations using the Fund's returns, or returns in general, that
demonstrate basic investment concepts such as tax-deferred compounding,
dollar-cost averaging and systematic investment. In addition, the Fund can
compare its performance, or performance for the types of securities in
which it invests, to a variety of other investments, such as bank savings
accounts, certificates of deposit, and Treasury bills.
ECONOMIC AND MARKET INFORMATION
Advertising and sales literature for the Fund may include discussions of
economic, financial and political developments and their effect on the
securities market. Such discussions may take the form of commentary on
these developments by Fund portfolio managers and their views and analysis
on how such developments could affect the Funds. In addition, advertising
and sales literature may quote statistics and give general information
about the mutual fund industry, including the growth of the industry, from
sources such as the Investment Company Institute.
ABOUT FEDERATED INVESTORS
Federated Investors is dedicated to meeting investor needs which is
reflected in its investment decision making-structured, straightforward,
and consistent. This has resulted in a history of competitive performance
with a range of competitive investment products that have gained the
confidence of thousands of clients and their customers.
The company's disciplined security selection process is firmly rooted in
sound methodologies backed by fundamental
and technical research. Investment decisions are made and executed by
teams of portfolio managers, analysts, and
traders dedicated to specific market sectors. These traders handle
trillions of dollars in annual trading volume.
In the equity sector, Federated Investors has more than 25 years'
experience. As of December 31, 1995, Federated managed 22 equity funds
totaling approximately $5.4 billion in assets across growth, value, equity
income, international, index and sector (i.e. utility) styles. Federated's
equity management combines quantitative and qualitative analysis and
features a structured, computer-assisted composite modeling system that was
developed in the 1970s.
J. Thomas Madden, Executive Vice President, oversees Federated's equity and
high yield corporate bond management while William D. Dawson, Executive
Vice President, oversees Federated's domestic fixed income management.
Henry A. Frantzen, Executive Vice President, oversees the management of
Federated's international portfolios.
MUTUAL FUND MARKET
Twenty-seven percent of American households are pursuing their financial
goals through mutual funds. These investors, as well as businesses and
institutions, have entrusted over $3 trillion to the more than 5,500 funds
available.*
Federated Investors, through its subsidiaries, distributes mutual funds for
a variety of investment applications. Specific markets include:
INSTITUTIONAL CLIENTS
Federated Investors meets the needs of more than 4,000 institutional
clients nationwide by managing and servicing separate accounts and mutual
funds for a variety of applications, including defined benefit and defined
contribution programs, cash management, and asset/liability management.
Institutional clients include corporations, pension funds, tax-exempt
entities, foundations/endowments, insurance companies, and investment and
financial advisors. The marketing effort to these institutional clients
is headed by John B. Fisher, President, Institutional Sales Division.
TRUST ORGANIZATIONS
Other institutional clients include close relationships with more than
1,500 banks and trust organizations. Virtually all of the trust divisions
of the top 100 bank holding companies use Federated funds in their clients'
portfolios. The marketing effort to trust clients is headed by Mark R.
Gensheimer, Executive Vice President, Bank Marketing & Sales.
BROKER/DEALERS AND BANK BROKER/DEALER SUBSIDIARIES
Federated funds are available to consumers through major brokerage firms
nationwide--including 200 New York Stock Exchange firms--supported by more
wholesalers than any other mutual fund distributor. Federated's service
to financial professionals and institutions has earned it high rankings in
several DALBAR Surveys. The marketing effort to these firms is headed by
James F. Getz, President, Broker/Dealer Division.
*source: Investment Company Institute
APPENDIX
STANDARD & POOR'S RATINGS GROUP CORPORATE AND MUNICIPAL BOND RATING
DEFINITIONS
AAA--Debt rated AAA has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.
AA--Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.
A--Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions than debt in higher rated
categories.
BBB--Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher rated
categories.
NR--NR indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not
rate a particular type of obligation as a matter of policy. S&P's may apply
a plus (+) or minus (-) to the above rating classifications to show
relative standing within the classifications.
MOODY'S INVESTORS SERVICE, INC. CORPORATE AND MUNICIPAL BOND RATING
DEFINITIONS
AAA--Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
AA--Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group, they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long term risks appear somewhat
larger than in Aaa securities.
A--Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may
be present which suggest a susceptibility to impairment sometime in the
future.
BAA--Bonds which are rated Baa are considered as medium grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest
payments and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
NR--Not rated by Moody's. Moody's applies numerical modifiers, 1, 2 and 3
in each generic rating classification from Aa through B in its corporate
bond rating system. The modifier 1 indicates that the security ranks in the
higher end of its generic rating category; the modifier 2 indicates a mid-
range ranking; and the modifier 3 indicates that the issue ranks in the
lower end of its generic rating category.
FITCH INVESTORS SERVICE, INC. LONG-TERM DEBT RATINGS
AAA--Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest
and repay principal, which is unlikely to be affected by reasonably
foreseeable events.
AA--Bonds considered to be investment grade and of very high credit
quality. The obligor's ability to pay interest and repay principal is very
strong, although not quite as strong as bonds rated 'AAA'. Because bonds
rated in the 'AAA' and 'AA' categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these issuers is
generally rated 'F-1+'.
A--Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic
conditions and circumstances than bonds with higher ratings.
BBB--Bonds considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is
considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have adverse impact on these
bonds, and therefore, impair timely
payment. The likelihood that the ratings of these bonds will fall below
investment grade is higher than for bonds with
higher ratings.
FITCH INVESTORS SERVICE, INC. SHORT-TERM DEBT RATINGS
F-1+--Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1--Very Strong Credit Quality. Issues assigned this rating reflect an
assurance for timely payment only slightly less in degree than issues rated
"F-1+".
STANDARD AND POOR'S RATINGS GROUP COMMERCIAL PAPER RATING DEFINITIONS
A-1--This highest category indicates that the degree of safety regarding
timely payment is strong. Those issues determined to have extremely strong
safety characteristics are denoted with a plus sign (+).
A-2--Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated "A-1".
MOODY'S INVESTORS SERVICE, INC. COMMERCIAL PAPER RATING DEFINITIONS
P-1--Issuers (or supporting institutions) rated Prime-1 (P-1) have a
superior capacity for repayment of senior short-term promissory
obligations. P-1 repayment capacity will often be evidenced by many of the
following characteristics:
o Leading market positions in well-established industries.
o High rates of return on funds employed.
o Conservative capitalization structure with moderate reliance on
debt and ample asset protection.
o Broad margins in earnings coverage of fixed financial charges and
high internal cash generation.
Well-established access to a range of financial markets and assured sources
of alternate liquidity.
P-2--Issuers (or supporting institutions) rated Prime-2 (P-2) have a strong
capacity for repayment of senior short-term debt obligations. This will
normally be evidenced by many of the characteristics cited above, but to a
lesser degree. Earnings trends and coverage ratios, while sound, may be
more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
Cusip
Cusip
Cusip
G0 (11/96)
PART C. OTHER INFORMATION.
Item 24. Financial Statements and Exhibits:
(a) Not applicable
(b) Exhibits:
(1) Conformed copy of Declaration of Trust of the
Registrant; (11)
(i) Conformed copy of Amended and Restated
Declaration of Trust(+);
(2) Copy of By-Laws of the Registrant as amended ; (11)
(i)................Copy of Amendment No. 2 to By-Laws
effective February 2, 1987 ; (11)
(ii)................Copy of Amendment No. 3 to By-Laws
effective August 25, 1988; (11)
(iii) Copy of Amended and Restated By-Laws effective August
15, 1995(+);
(3) Not applicable;
(4) (i)................Copy of Specimen Certificate for
Shares of Beneficial Interest of the Registrant
(Federated Small Cap Strategies Fund) ;(7.)
(ii)................Copy of Specimen Certificate for
Shares of Beneficial Interest of the Registrant
(Federated Growth Strategies Fund); (8.)
(iii)................Copy of Specimen Certificate for
Shares of Beneficial Interest of the Registrant
(Federated Capital Appreciation Fund); (9.)
(iv) Copy of Specimen Certificate for Shares of Beneficial
Interest of the Registrant (Federated Aggressive Growth
Fund)(+);
(5) (i)................Conformed copy of Investment Advisory
Contract on behalf of Federated Growth Trust; (6)
(ii)................Conformed copy of Investment Advisory
Contract on behalf of Federated Equity Funds, which
includes exhibits for Federated Small Cap Strategies
Fund and Federated Capital Appreciation Fund; (10.)
+ All exhibits have been filed electronically.
7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 21 on Form N-1A filed June 30, 1995. (File Nos. 2-91090
and 811-4017)
8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A filed July 17, 1995. (File Nos. 2-91090
and 811-4017)
9. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 25 on Form N-1A filed August 31, 1995. (File Nos. 2-
91090 and 811-4017)
10. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 26 on Form N-1A filed September 12, 1995. (File Nos. 2-
91090 and 811-4017)
11. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 31 on Form N-1A filed June 11, 1996. (File Nos. 2-91090
and 811-4017)
(iii)................Form of Investment Advisory Contract
which includes an exhibit for Federated Aggressive
Growth Fund (+);
(6) (i)................Conformed copy of Distributor's
Contract on behalf of Federated Growth Trust; (11)
(ii) Conformed copy of Distributor's Contract on behalf of
Federated Equity Funds, which includes exhibits for
Federated Small Cap Strategies Fund and Federated
Capital Appreciation Fund; (10.)
(iii) Form of Distributor's Contract on behalf of Federated
Aggressive Growth Fund (+);
(iv) The Registrant hereby incorporates the conformed copy
of the specimen Mutual Funds Sales and Service
Agreement; Mutual Funds Service Agreement; and Plan
Trustee/Mutual Funds Service Agreement from Item
24(b)(6) of the Cash Trust Series II Registration
Statement on Form N-1A, filed with the Commission on
July 24, 1995. (File No. 33-38550 and 811-6269).
(7) Not applicable;
(8) Conformed Copy of the Custodian Agreement of the Registrant;
(6.)
(9) (i)................Conformed copy of Shareholder Services
Agreement of the Registrant; (6.)
(ii)................Conformed copy of Administrative
Services Agreement of the Registrant; (6.)
(iii)................Conformed Copy of Agreement for Fund
Accounting, Shareholder Recordkeeping, and Custody
Services Procurement; (6.)
(iv)................The responses and exhibits described
in Item 24(6) are hereby incorporated by reference.
(10) Conformed copy of the Opinion and Consent of Counsel
regarding legality of shares being registered; (6.)
(11) Not applicable;
(12) Not applicable;
(13) Conformed copy of Initial Capital Understanding; (2.)
(14) Not applicable;
(15) Conformed Copy of Distribution Plan; (10.)
(i) Form of Distribution Plan incorporating
Federated Aggressive Growth Fund (+);
(16) Copy of Schedule for Computation of Fund Performance Data
for Federated Growth Trust, the predecessor to
Federated Growth Strategies Fund; (6.)
(17) Not applicable
(18) Multiple Class Plan; (to be filed by amendment)
(19) Conformed copy of Power of Attorney(+);
2. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 1 on Form N-1A filed February 28, 1985. (File Nos. 2-
91090 and 811-4017)
6. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 20 on Form N-1A filed December 29, 1994. (File Nos. 2-
91090 and 811-4017)
10. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 26 on Form N-1A filed September 12, 1995. (File Nos. 2-
91090 and 811-4017)
11. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 31 on Form N-1A filed June 11, 1996. (File Nos. 2-91090
and 811-4017)
Item 25. Persons Controlled by or Under Common Control with Registrant:
None
Item 26. Number of Holders of Securities:
Number of Record Holders
Title of Class as of August 23, 1996
Shares of Beneficial Interest
(no par value)
Federated Growth Strategies Fund
Class A Shares 10,242
Class B Shares 1,102
Class C Shares 669
Federated Small Cap Strategies Fund
Class A Shares 1,573
Class B Shares 2,270
Class C Shares 497
Federated Capital Appreciation Fund
Class A Shares 720
Class B Shares 839
Class C Shares 342
Federated Agressive Growth Fund
Class A Shares 0
Class B Shares 0
Class C Shares 0
Item 27. Indemnification: (1.)
Item 28. Business and Other Connections of Investment Adviser:
For a description of the other business of the investment
adviser, see the section entitled "Trust Information - Management
of the Trust" in Part A. The affiliations with the Registrant of
four of the Trustees and one of the Officers of the investment
adviser are included in Part B of this Registration Statement
under "Federated Equity Funds Management - Officers and
Trustees." The remaining Trustee of the investment adviser, his
position with the investment adviser, and, in parentheses, his
principal occupation is: Mark D. Olson (Partner, Wilson,
Halbrook & Bayard), 107 West Market Street, Georgetown, Delaware
19947.
1. Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 1 on Form N-1A filed July 9, 1984. (File Nos. 2-91090
and 811-4017)
The remaining Officers of the investment adviser are: William D.
Dawson, Henry A. Frantzen, J. Thomas Madden, and Mark L. Mallon,
Executive Vice Presidents; Henry J. Gailliot, Senior Vice
President-Economist; Peter R. Anderson, Drew J. Collins, Jonathan
C. Conley, and J. Alan Minteer, Senior Vice Presidents; J. Scott
Albrecht, Joseph M. Balestrino, Randall A. Bauer, David A.
Briggs, Kenneth J. Cody, Deborah A. Cunningham, Michael P.
Donnelly, Linda A. Duessel, Mark E. Durbiano, Kathleen M. Foody-
Malus, Thomas M. Franks, Edward C. Gonzales, Timothy E. Keefe,
Stephen A. Keen, Mark S. Kopinski, Jeff A. Kozemchak, Marian R.
Marinack, Susan M. Nason, Mary Jo Ochson, Robert J. Ostrowski,
Frederick L. Plautz, Jr., Charles A. Ritter, James D. Roberge,
Frank Semack, William F. Stotz, Sandra L. Weber, and Christopher
H. Wiles, Vice Presidents; Thomas R. Donahue, Treasurer; and
Stephen A. Keen, Secretary. The business address of each of the
Officers of the investment adviser is Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779 or 175 Water street, New
York, New York 10038-4965, as applicable. These individuals are
also officers of a majority of the investment advisers to the
Funds listed in Part B of this Registration Statement.
Item 29. Principal Underwriters:
(a) 111 Corcoran Funds; Annuity Management Series; Arrow Funds;
Automated Government Money Trust; BayFunds; Blanchard Funds; Blanchard
Precious Metals Fund, Inc.; Cash Trust Series II; Cash Trust Series, Inc.;
DG Investor Series; Edward D. Jones & Co. Daily Passport Cash Trust;
Federated Adjustable Rate U.S. Government Fund, Inc.; Federated American
Leaders Fund, Inc.; Federated ARMs Fund; Federated Equity Funds; Federated
Equity Income Fund, Inc.; Federated Fund for U.S. Government Securities,
Inc.; Federated GNMA Trust; Federated Government Income Securities, Inc.;
Federated Government Trust; Federated High Income Bond Fund, Inc.;
Federated High Yield Trust; Federated Income Securities Trust; Federated
Income Trust; Federated Index Trust; Federated Institutional Trust;
Federated Insurance Series; Federated Investment Portfolios; Federated
Investment Trust; Federated Master Trust; Federated Municipal Opportunities
Fund, Inc.; Federated Municipal Securities Fund, Inc.; Federated Municipal
Trust; Federated Short-Term Municipal Trust; Federated Short-Term U.S.
Government Trust; Federated Stock and Bond Fund, Inc.; Federated Stock
Trust; Federated Tax-Free Trust; Federated Total Return Series, Inc.;
Federated U.S. Government Bond Fund; Federated U.S. Government Securities
Fund: 1-3 Years; Federated U.S. Government Securities Fund: 2-5 Years;
Federated U.S. Government Securities Fund: 5-10 Years; Federated Utility
Fund, Inc.; First Priority Funds; Fixed Income Securities, Inc.; High Yield
Cash Trust; Independence One Mutual Funds; Intermediate Municipal Trust;
International Series, Inc.; Investment Series Funds, Inc.; Investment
Series Trust; Liberty U.S. Government Money Market Trust; Liquid Cash
Trust; Managed Series Trust; Marshall Funds, Inc.; Money Market Management,
Inc.; Money Market Obligations Trust; Money Market Trust; Municipal
Securities Income Trust; Newpoint Funds; Peachtree Funds; RIMCO Monument
Funds; SouthTrust Vulcan Funds; Star Funds; Targeted Duration Trust; Tax-
Free Instruments Trust; The Biltmore Funds; The Biltmore Municipal Funds;
The Monitor Funds; The Planters Funds; The Starburst Funds; The Starburst
Funds II; The Virtus Funds; Tower Mutual Funds; Trust for Financial
Institutions; Trust for Government Cash Reserves; Trust for Short-Term U.S.
Government Securities; Trust for U.S. Treasury Obligations; Vision Group of
Funds, Inc.; andWorld Investment Series, Inc.
Federated Securities Corp. also acts as principal underwriter for the
following closed-end investment company: Liberty Term Trust, Inc.- 1999.
(b)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Richard B. Fisher Director, Chairman, Chief Vice President
Federated Investors Tower Executive Officer, Chief
Pittsburgh, PA 15222-3779 Operating Officer, Asst.
Secretary, and Asst.
Treasurer, Federated
Securities Corp.
Edward C. Gonzales Director, Executive ViceExecutive Vice
Federated Investors Tower President, Federated, President
Pittsburgh, PA 15222-3779 Securities Corp.
John W. McGonigle Director, Federated Executive Vice
Federated Investors Tower Securities Corp. President and
Pittsburgh, PA 15222-3779 Secretary
John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark R. Gensheimer Executive Vice President of --
Federated Investors Tower Bank/Trust, Federated
Pittsburgh, PA 15222-3779 Securities Corp.
Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Richard W. Boyd Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp
Pittsburgh, PA 15222-3779
John B. Bohnet Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Byron F. Bowman Vice President, Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Kevin J. Crenny Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Daniel T. Culbertson Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
G. Michael Cullen Vice President, --
Federated Investors Tower Federated Securites Corp.
Pittsburgh, PA 15222-3779
Laura M. Deger Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael D. Fitzgerald Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Craig S. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Scott A. Hutton Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
H. Joeseph Kenedy Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William E. Kugler Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Steven A. La Versa Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Mihm Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael P. O'Brien Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert D. Oehlschlager Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John C. Shelar, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jamie M. Teschner Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul A. Uhlman Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael P. Wolff Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Charlene H. Jennings Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
J. Timothy Radcliff Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Denis McAuley Treasurer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas R. Donahue Asstistant Secretary, --
Federated Investors Tower Assistant Treasurer,
Pittsburgh, PA 15222-3779 Federated Securities Corp.
Joseph M. Huber Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David M. Taylor Assistant Secretary, Treasurer
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Item 30. Location of Accounts and Records:
All accounts and records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and Rules 31a-1 through 31a-3 promulgated
thereunder are maintained at one of the following locations:
Registrant Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Administrative Services
(`Administrator'')
Federated Management
(`Adviser'')
Federated Services Company P.O. Box 8600
(`Transfer Agent and Dividend Boston, MA 02266-8600
Disbursing Agent')
State Street Bank and Trust Company P.O. Box 8600
(`Custodian'') Boston, MA 02266-8600
Item 31. Management Services: Not applicable.
Item 32. Undertakings:
Registrant hereby undertakes to file a post-effective amendment,
using financial statements which need not be certified, within
four to six months from effective date of Registrant's 1933 Act
Registration Statement, Post-Effective Amendment Number 32.
Registrant hereby undertakes to comply with the provisions of
Section 16(c) of the 1940 Act with respect to the removal of
Trustees and the calling of special shareholder meetings by
shareholders.
Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, the Registrant, FEDERATED EQUITY
FUNDS (formerly, Federated Growth Trust), has duly caused this Amendment to
its Registration Statement to be signed on its behalf by the undersigned,
thereto duly authorized, in the City of Pittsburgh and Commonwealth of
Pennsylvania, on the 3rd day of September, 1996.
FEDERATED EQUITY FUNDS
(formerly, Federated Growth Trust)
BY: /s/S. Elliott Cohen
S. Elliott Cohen, Assistant Secretary
Attorney in Fact for John F. Donahue
September 3, 1996
Pursuant to the requirements of the Securities Act of 1933, as amended,
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/S. Elliott Cohen Attorney In Fact September 3, 1996
S. Elliott Cohen For the Persons
ASSISTANT SECRETARY Listed Below
John F. Donahue* Chairman and Trustee
(Chief Executive Officer)
Glen R. Johnson* President
John W. McGonigle* Executive Vice President and
Treasurer(Prinicipal 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 1(i) under Form N-1A
Exhibit 3(a) under Item 601/Reg. S-K
FEDERATED EQUITY FUNDS
(FORMERLY, FEDERATED GROWTH TRUST)
AMENDED AND RESTATED DECLARATION OF TRUST
TABLE OF CONTENTS
Page
ARTICLE I. NAMES AND DEFINITIONS ................ 1
Section 1. Name .............................. 1
Section 2. Definitions ....................... 1
ARTICLE II. PURPOSE OF TRUST ..................... 2
ARTICLE III.BENEFICIAL INTEREST .................. 2
Section 1. Shares of Beneficial Interest...... 2
Section 2. Ownership of Shares ............... 3
Section 3. Investment in the Trust............ 3
Section 4. No Pre-emptive Rights;
Action by Shareholder.............. 4
Section 5. Establishment and Designation
of Series or Class ................ 4
ARTICLE IV. THE TRUSTEES ........................ 6
Section 1. Management of the Trust ........... 6
Section 2. Election of Trustees by Shareholders 6
Section 3. Term of Office of Trustees ........ 7
Section 4. Termination of Service and
Appointment of Trustees ........... 7
Section 5. Temporary Absence of Trustees...... 7
Section 6. Number of Trustees ................ 7
Section 7. Effect of Death, Resignation, etc. of a Trustee 8
Section 8. Ownership of Trust ................ 8
ARTICLE V. POWERS OF THE TRUSTEES .............. 8
Section 1. Powers............................. 8
Section 2. Principal Transactions ............ 12
Section 3. Trustees and Officers as Shareholders 12
Section 4. Parties to Contract............... 12
ARTICLE VI. TRUSTEES' EXPENSES AND COMPENSATION 13
Section 1. Trustee Reimbursement.............. 13
Section 2. Trustee Compensation .............. 14
ARTICLE VII.INVESTMENT ADVISER, ADMINISTRATIVE
SERVICES, PRINCIPAL UNDERWRITER AND
TRANSFER AGENT ...................... 14
Section 1. Investment Adviser ................ 14
Section 2. Administrative Services ........... 15
Section 3. Principal Underwriter.............. 15
Section 4. Transfer Agent .................... 15
Section 5. Provisions and Amendments.......... 16
ARTICLE VIII. SHAREHOLDERS' VOTING POWERS
AND MEETINGS ........................ 16
Section 1. Voting Powers ..................... 16
Section 2. Meetings........................... 17
Section 3. Quorum and Required Vote .......... 17
Section 4. Action by Written Consent ......... 18
Section 5. Additional Provisions ............. 18
ARTICLE IX. CUSTODIAN ........................... 18
Section 1. Appointment and Duties............. 18
Section 2. Central Certificate System......... 19
ARTICLE X. DISTRIBUTIONS AND REDEMPTIONS ....... 19
Section 1. Distributions ..................... 19
Section 2. Redemptions and Repurchases ....... 20
Section 3. Determination of Accumulated Net Income 22
Section 4. Net Asset Value of Shares.......... 22
Section 5. Suspension of the Right of Redemption 22
Section 6. Trust's Right to Redeem Shares .... 22
ARTICLE XI. LIMITATION OF LIABILITY AND
INDEMNIFICATION ..................... 23
Section 1. Limitation of Personal Liability and
Indemnification of Shareholders ... 23
Section 2. Limitation of Personal Liability and
Indemnification of Trustees, Officers,
Employees or Agents of the Trust .. 24
Section 3. Express Exculpatory Clauses and
Instruments ....................... 24
Section 4. Indemnification of Trustees, Officers,
Employees, and Agents.............. 25
ARTICLE XII.MISCELLANEOUS ........................ 26
Section 1. Trust is not a Partnership ........ 26
Section 2. Trustee Action Binding, Expert Advice,
No Bond or Surety ................. 26
Section 3. Establishment of Record Dates ..... 26
Section 4. Termination of Trust .............. 27
Section 5. Offices of the Trust, Filing of Copies,
References, Headings, Counterparts 28
Section 6. Applicable Law .................... 29
Section 7. Amendments -- General ............. 29
Section 8. Amendments -- Series and Classes... 29
Section 9. Use of Name ....................... 31
FEDERATED EQUITY FUNDS
(FORMERLY, FEDERATED GROWTH TRUST)
AMENDED AND RESTATED DECLARATION OF TRUST
Dated August 15, 1995
AMENDED AND RESTATED DECLARATION OF TRUST made August 15, 1995, to the
original Declaration of Trust dated April 17, 1984, by the
undersigned, and by the holders of shares of beneficial interest to be
issued hereunder as hereinafter provided.
WHEREAS, the Trustees desire to establish a trust fund for the investment
and reinvestment of funds contributed thereto;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust fund hereunder shall be held and managed
under this Declaration of Trust IN TRUST as herein set forth below.
ARTICLE I
NAMES AND DEFINITIONS
Section 1. Name. This Trust shall be known as the Federated Equity Funds,
and the Trustees may conduct the business of the Trust under that name
or any other name as they may determine from time to time.
Section 2. Definitions. Wherever used herein, unless otherwise required
by the context or specifically provided:
(a) The terms "Affiliated Person," "Assignment," "Commission,"
"Interested Person," "Majority Shareholder Vote" (the 67% or 50%
requirement of Section 2(a)(42) of the 1940 Act, whichever may be
applicable) and "Principal Underwriter" shall have the meanings
given them in the Investment Company Act of 1940, as amended from
time to time;
(b) The "Trust" refers to the Massachusetts Business Trust
established by this Declaration of Trust, as amended from time to
time, inclusive of each and every Series and Class established
hereunder;
(c) `Accumulated Net Income'' means the accumulated net income of
the Trust determined in the manner provided or authorized in
Article X, Section 3;
(d) "Class" refers to a class of Shares established and designated
under or in accordance with the provisions of Article III;
(e) "Series" refers to a series of Shares established and designated
under or in accordance with the provisions of Article III;
(f) "Series Company" refers to the form of a registered open-end
investment company described in Section 18(f)(2) of the 1940 Act
or in any successor statutory provision;
(g) "Shareholder" means a record owner of Shares of any Series or
Class of the Trust;
(h) "Trustees" refer to the individual Trustees in their capacity as
Trustees hereunder of the Trust and their successor or successors
for the time being in office as such Trustees;
(i) "Shares" means the equal proportionate units of interest into
which the beneficial interest in the Trust shall be divided from
time to time, or if more than one Series or Class of Shares is
authorized by the Trustees, the equal proportionate units into
which each Series or Class of Shares shall be divided from time
to time and includes fractions of Shares as well as whole Shares;
(j) The "1940 Act" refers to the Investment Company Act of 1940, and
the Rules and Regulations thereunder, (including any exemptions
granted thereunder) as amended from time to time; and
(k) "By-Laws" shall mean the By-Laws of the Trust as amended from
time to time.
ARTICLE II
PURPOSE OF TRUST
The purpose of this Trust is to provide investors a continuous source of
managed investments by investing primarily in securities.
ARTICLE III
BENEFICIAL INTEREST
Section 1. Shares of Beneficial Interest. The beneficial interest in the
Trust shall at all times be divided into transferable Shares, without
par value. Subject to the provisions of Section 5 of this Article
III, each Share shall have voting rights as provided in Article VIII
hereof, and holders of the Shares of any Series shall be entitled to
receive dividends, when and as declared with respect thereto in the
manner provided in Article X, Section 1 hereof. The Shares of the
Trust or any Series may be issued in one or more Classes, as the
Trustees may authorize pursuant to Article XII, Section 8 hereof.
Unless the Trustees have authorized the issuance of Shares of a Series
in two or more Classes, each Share of a Series shall represent an
equal proportionate interest in the assets and liabilities and the
income and the expenses of the Series with each other Share of the
same Series, none having priority or preference over another. If the
Trustees have authorized the issuance of Shares of a Series in two or
more Classes, then the Classes may have such variations as to
dividend, redemption, and voting rights, net asset values, expenses
borne by the Classes, and other matters as the Trustees have
authorized provided that each Share of a Class shall represent an
equal proportionate interest in the assets and liabilities and the
income and the expenses of the Class with each other Share of the
same Class, none having priority or preference over another. The
number of Shares authorized shall be unlimited. The Trustees may from
time to time divide or combine the Shares of any Series or Class into
a greater or lesser number without thereby changing the proportionate
beneficial interests in the Trust or Series or Class. Contributions
to the Trust may be accepted for, and shares shall be redeemed as,
whole Shares and/or fractions.
Section 2. Ownership of Shares. The ownership of Shares shall be recorded
in the books of the Trust or a transfer agent which books shall be
maintained separately for the Shares of the Trust or each Series or
Class. The Trustees may make such rules as they consider appropriate
for the transfer of Shares and similar matters. The record books of
the Trust or any transfer agent, as the case may be, shall be
conclusive as to who are the Shareholders of each Series or Class and
as to the number of Shares of each Series or Class held from time to
time by each.
Section 3. Investment in the Trust. The Trustees shall accept investments
in the Trust from such persons and on such terms as they may from time
to time authorize. After the date of the initial contribution of
capital (which shall occur prior to the initial public offering of
Shares), the number of Shares to represent the initial contribution
shall be considered as outstanding and the amount received by the
Trustees on account of the contribution shall be treated as an asset
of the Trust to be allocated among any Series or Classes in the manner
described in Section 5(a) of this Article. Subsequent to such initial
contribution of capital, Shares (including Shares which may have been
redeemed or repurchased by the Trust) may be issued or sold at a price
which will net the relevant Series or Class, as the case may be,
before paying any taxes in connection with such issue or sale, not
less than the net asset value (as defined in Article X, Section 3)
thereof; provided, however, that the Trustees may in their discretion
impose a sales charge upon investments in or redemptions from the
Trust, and upon reinvestments of dividends and capital gains in
Shares.
Section 4. No Pre-emptive Right; Action by Shareholder. Shareholders
shall have no pre-emptive or other right to subscribe to any
additional Shares or other securities issued by the Trust.
Section 5. Establishment and Designation of Series or Class. Without
limiting the authority of the Trustees set forth in Article XII,
Section 8, inter alia, to establish and designate any additional
Series or Class or to modify the rights and preferences of any
existing Series or Class, the initial Series shall be, and is
established and designated as, Federated Growth Strategies Fund, Class
A Shares.
Shares of any Series or Class established in this Section 5 shall have
the following relative rights and preferences:
(a) Assets belonging to Series or Class. All consideration received
by the Trust for the issue or sale of Shares of a particular
Series or Class, together with all assets in which such
consideration is invested or reinvested, all income, earnings,
profits, and proceeds thereof from whatever source derived,
including, without limitation, any proceeds derived from the
sale, exchange or liquidation of such assets, and any funds or
payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to that
Series or Class for all purposes, subject only to the rights of
creditors, and shall be so recorded upon the books of account of
the Trust. Such consideration, assets, income, earnings, profits
and proceeds thereof, from whatever source derived, including,
without limitation, any proceeds derived from the sale, exchange
or liquidation of such assets, and any funds or payments derived
from any reinvestment of such proceeds, in whatever form the same
may be, are herein referred to as "assets belonging to" that
Series or Class. In the event that there are any assets, income,
earnings, profits and proceeds thereof, funds or payments which
are not readily identifiable as belonging to any particular
Series or Class (collectively "General Assets"), the Trustees
shall allocate such General Assets to, between or among any one
or more of the Series or Classes established and designated from
time to time in such manner and on such basis as they, in their
sole discretion, deem fair and equitable, and any General Assets
so allocated to a particular Series or Class shall belong to that
Series or Class. Each such allocation by the Trustees shall be
conclusive and binding upon the Shareholders of all Series or
Classes for all purposes.
(b) Liabilities Belonging to Series or Class. The assets belonging
to each particular Series or Class may be charged with the
liabilities of the Trust in respect to that Series or Class and,
as determined by the Trustees, expenses, costs, charges and
reserves attributable to that Series or Class, and any general
liabilities of the Trust which are not readily identifiable as
belonging to any particular Series or Class shall be allocated
and charged by the Trustees to and among any one or more of the
Series or Classes established and designated from time to time in
such manner and on such basis as the Trustees in their sole
discretion deem fair and equitable. The liabilities, expenses,
costs, charges, and reserves so charged to a Series or Class are
herein referred to as "liabilities belonging to" that Series or
Class. Each allocation of liabilities belonging to a Series or
Class by the Trustees shall be conclusive and binding upon the
Shareholders of all Series or Classes for all purposes.
(c) Dividends, Distributions, Redemptions, Repurchases and
Indemnification. Notwithstanding any other provisions of this
Declaration of Trust, including, without limitation, Article X,
no dividend or distribution (including, without limitation, any
distribution paid upon termination of the Trust or of any Series
or Class) with respect to, nor any redemption or repurchase of
the Shares of any Series or Class shall be effected by the Trust
other than from the assets belonging to such Series or Class, nor
except as specifically provided in Section 1 of Article XI
hereof, shall any Shareholder of any particular Series or Class
otherwise have any right or claim against the assets belonging to
any other Series or Class except to the extent that such
Shareholder has such a right or claim hereunder as a Shareholder
of such other Series or Class.
(d) Voting. Notwithstanding any of the other provisions of this
Declaration of Trust, including, without limitation, Section 1 of
Article VIII, only Shareholders of a particular Series or Class
shall be entitled to vote on any matters affecting such Series or
Class. Except with respect to matters as to which any particular
Series or Class is affected materially, differently, or as
otherwise required by applicable law, all of the Shares of each
Series or Class shall, on matters as to which such Series or
Class is entitled to vote, vote with other Series or Classes so
entitled as a single class. Notwithstanding the foregoing, with
respect to matters which would otherwise be voted on by two or
more Series or Classes as a single class, the Trustees may, in
their sole discretion, submit such matters to the Shareholders of
any or all such Series or Classes, separately.
(e) Fraction. Any fractional Share of a Series or Class shall carry
proportionately all the rights and obligations of a whole Share
of that Series or Class, including rights with respect to voting,
receipt of dividends and distributions, redemption of Shares, and
termination of the Trust or of any Series or Class.
(f) Exchange Privilege. The Trustees shall have the authority to
provide that the holders of Shares of any Series or Class shall
have the right to exchange said Shares for Shares of one or more
other Series or Classes in accordance with such requirements and
procedures, as may be established by the Trustees.
(g) Combination of Series or Classes. The Trustees shall have the
authority, without the approval of the Shareholders of any Series
or Class, unless otherwise required by applicable law, to combine
the assets and liabilities belonging to a single Series or Class
with the assets and liabilities of one or more other Series or
Classes.
(h) Elimination of Series or Classes. The Trustees shall have the
authority, without the approval of Shareholders of any Series or
Class, unless otherwise required by applicable law, to amend this
Declaration of Trust to abolish that Series or Class and to
rescind the establishment and designation thereof.
ARTICLE IV
THE TRUSTEES
Section 1. Management of the Trust. The business and affairs of the Trust
shall be managed by the Trustees, and they shall have all powers
necessary and desirable to carry out that responsibility. The
Trustees who shall serve as Trustees are the undersigned.
Section 2. Election of Trustees by Shareholders. Subject to Article IV,
Sections 4 and 6, the Shareholders shall elect Trustees. The number
of Trustees shall be determined by the Trustees pursuant to Article
IV, Section 6.
Section 3. Term of Office of Trustees. The Trustees shall hold office
during the lifetime of this Trust, and until its termination as
hereinafter provided; except (a) that any Trustee may resign his
office at any time by written instrument signed by him and delivered
to the other Trustees, which shall take effect upon such delivery or
upon such later date as is specified therein; (b) that any Trustee may
be removed at any time by written instrument signed by at least two-
thirds of the number of Trustees prior to such removal, specifying the
date when such removal shall become effective; (c) that any Trustee
who requests in writing to be retired or who has become mentally or
physically incapacitated may be retired by written instrument signed
by a majority of the other Trustees, specifying the date of his
retirement; and (d) a Trustee may be removed at any special meeting of
Shareholders of the Trust by a vote of two-thirds of the outstanding
Shares. Any removals shall be effective as to the Trust and each
Series and Class hereunder.
Section 4. Termination of Service and Appointment of Trustees. In case of
the death, resignation, retirement, removal or mental or physical
incapacity of any of the Trustees, or in case a vacancy shall, by
reason of an increase in number, or for any other reason, exist, the
remaining Trustees shall fill such vacancy by appointing such other
person as they in their discretion shall see fit. An appointment of a
Trustee may be made by the Trustees then in office in anticipation of
a vacancy to occur by reason of retirement, resignation or increase in
number of Trustees effective at a later date, provided that said
appointment shall become effective only at or after the effective date
of said retirement, resignation or increase in number of Trustees. As
soon as any Trustee so appointed shall have accepted this Trust, the
trust estate shall vest in the new Trustee or Trustees, together with
the continuing Trustees, without any further act or conveyance, and he
shall be deemed a Trustee hereunder. Any appointment authorized by
this Section 4 is subject to the provisions of Section 16(a) of the
1940 Act.
Section 5. Temporary Absence of Trustee. Any Trustee may, by power of
attorney, delegate his power for a period not exceeding six months at
any one time to any other Trustee or Trustees, provided that in no
case shall less than two of the Trustees personally exercise the other
power hereunder except as herein otherwise expressly provided.
Section 6. Number of Trustees. The number of Trustees, not less than
three (3) nor more than twenty (20) serving hereunder at any time,
shall be determined by the Trustees themselves.
Whenever a vacancy in the Board of Trustees shall occur, until such
vacancy is filled or while any Trustee is physically or mentally
incapacitated, the other Trustees shall have all the powers hereunder
and the certificate signed by a majority of the other Trustees of such
vacancy, absence or incapacity, shall be conclusive, provided,
however, that no vacancy which reduces the number of Trustees below
three (3) shall remain unfilled for a period longer than six calendar
months.
Section 7. Effect of Death, Resignation, etc. of a Trustee. The death,
resignation, retirement, removal, or mental or physical incapacity of
the Trustees, or any one or more of them, shall not operate to annul
the Trust or to revoke any existing agency created pursuant to the
terms of this Declaration of Trust.
Section 8. Ownership of Assets. The assets belonging to the Trust or each
Series or Class shall be held separate and apart from any assets now
or hereafter held in any capacity other than as Trustee hereunder by
the Trustees or any successor Trustee. All of the assets belonging to
the Trust or each Series or Class or owned by the Trust shall at all
times be considered as vested in the Trustees. No Shareholder shall
be deemed to have a severable ownership interest in any individual
asset belonging to the Trust or any Series or Class or owned by the
Trust or any right of partition or possession thereof, but each
Shareholder shall have a proportionate undivided beneficial interest
in the Trust or a Series or Class.
ARTICLE V
POWERS OF THE TRUSTEES
Section 1. Powers. The Trustees in all instances shall act as
principals, and are and shall be free from the control of the
Shareholders. The Trustees shall have full power and authority to do
any and all acts and to make and execute any and all contracts and
instruments that they may consider necessary or appropriate in
connection with the management of the Trust or a Series or Class. The
Trustees shall not be bound or limited by present or future laws or
customs in regard to trust investments, but shall have full authority
and power to make any and all investments which they, in their
uncontrolled discretion, shall deem proper to accomplish the purpose
of this Trust. Without limiting the foregoing, the Trustees shall
have the following specific powers and authority, subject to any
applicable limitation in the 1940 Act or in this Declaration of Trust
or in the By-Laws of the Trust:
(a) To buy, and invest funds in their hands in securities and other
property, including, but not limited to, common stocks, preferred
stocks, bonds, debentures, warrants and rights to purchase
securities, options, certificates of beneficial interest,
investment companies, money market instruments, notes or other
evidences of indebtedness issued by any corporation, trust or
association, domestic or foreign, or issued or guaranteed by the
United States of America or any agency or instrumentality
thereof, by the government of any foreign country, by any State
of the United States, or by any political subdivision or agency
or instrumentality of any State or foreign country, or "when-
issued" or "delayed-delivery" contracts for any such securities,
or any repurchase agreement (agreements under which the seller
agrees at the time of sale to repurchase the security at an
agreed time and price), or to retain assets belonging to the
Trust or each and every Series or Class in cash, and from time to
time to change the investments of the assets belonging to the
Trust or each Series or Class;
(b) To adopt By-Laws of the Trust not inconsistent with the
Declaration of Trust providing for the conduct of the business of
the Trust and to amend and repeal them to the extent that they do
not reserve that right to the Shareholders;
(c) To elect and remove such officers of the Trust and appoint and
terminate such agents of the Trust as they consider appropriate;
(d) To appoint or otherwise engage a bank or other entity permitted
by the 1940 Act, as custodian of any assets belonging to any
Series or Class subject to any conditions set forth in this
Declaration of Trust or in the By-Laws;
(e) To appoint or otherwise engage transfer agents, dividend
disbursing agents, Shareholder servicing agents, investment
advisers, sub-investment advisers, principal underwriters,
administrative service agents, and such other agents as the
Trustees may from time to time appoint or otherwise engage;
(f) To provide for the distribution of any Shares of the Trust or any
Series or Class either through a Principal Underwriter in the
manner hereinafter provided for or by the Trust itself, or both;
(g) To set record dates in the manner hereinafter provided for;
(h) To delegate such authority as they consider desirable to a
committee or committees composed of Trustees, including without
limitation, an Executive Committee, or to any officers of the
Trust and to any agent, custodian or underwriter;
(i) To sell or exchange any or all of the assets belonging to the
Trust or one or more Series or Classes, subject to the provisions
of Article XII, Section 4(b) hereof;
(j) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute
and deliver powers of attorney to such person or persons as the
Trustees shall deem proper, granting to such person or persons
such power and discretion with relation to securities or property
as the Trustees shall deem proper;
(k) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities;
(l) To hold any security or property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form;
or either in its own name or in the name of a custodian or a
nominee or nominees, subject in either case to proper safeguards
according to the usual business practice of Massachusetts
business trusts or investment companies;
(m) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern, any
security of which belongs to the Trust or any Series or Class; to
consent to any contract, lease, mortgage, purchase, or sale of
property by such corporation or concern, and to pay calls or
subscriptions with respect to any security which belongs to the
Trust or any Series or Class;
(n) To engage in and to prosecute, compound, compromise, abandon, or
adjust, by arbitration or otherwise, any actions, suits,
proceedings, disputes, claims, demands, and things relating to
the Trust, and out of the assets belonging to the Trust or any
Series or Class to pay, or to satisfy, any debts, claims or
expenses incurred in connection therewith, including those of
litigation, upon any evidence that the Trustees may deem
sufficient (such powers shall include without limitation any
actions, suits, proceedings, disputes, claims, demands and things
relating to the Trust wherein any of the Trustees may be named
individually and the subject matter of which arises by reason of
business for or on behalf of the Trust);
(o) To make distributions of income and of capital gains to
Shareholders;
(p) To borrow money but only as a temporary measure for extraordinary
or emergency purposes and then (a) only in amounts not in excess
of 5% of the value of its total assets or (b) in any amount up to
one-third of the value of its total assets, including the amount
borrowed, in order to meet redemption requests without
immediately selling any portfolio securities. The Trust may also
enter into reverse repurchase agreements in amounts not in excess
of one-third of its total assets in order to meet redemption
requests without immediately selling any portfolio instruments.
The Trustees shall not pledge, mortgage or hypothecate the assets
of the Trust, except in connection with any borrowing described
in (a) and (b) herein and in amounts not in excess of the lesser
of the dollar amounts borrowed or 10% of the value of the Trust's
total assets at the time of such borrowing;
(q) From time to time to issue and sell the Shares of the Trust or
any Series or Class either for cash or for property whenever and
in such amounts as the Trustees may deem desirable, but subject
to the limitation set forth in Section 3 of Article III.
(r) To purchase insurance of any kind, including, without limitation,
insurance on behalf of any person who is or was a Trustee,
Officer, employee or agent of the Trust, or is or was serving at
the request of the Trust as a Trustee, Director, Officer, agent
or employee of another corporation, partnership, joint venture,
trust or other enterprise, against any liability asserted against
him or incurred by him in any such capacity or arising out of
his status as such;
(s) To pay pensions or other compensation for faithful service, as
deemed appropriate by the Trustees, and to adopt, establish and
carry out pension, profit-sharing, share bonus, share purchase,
deferred compensation, savings, thrift and other retirement,
incentive and benefit plans, including the purchase of life
insurance and annuity contracts as a means of providing such
retirement and other benefits, for any or all of the Trustees,
officers, employees and agents of the Trust;
(t) To establish any retirement policies for Trustees including,
inter alia, a mandatory retirement age;
(u) To establish an Emeritus status for Trustees, and procedures by
which Trustees achieve Emeritus status, as well as provide for
compensation for a Trustee Emeritus at a rate that may be
determined by approval of a majority of Trustees; and
(v) To take action by written consent and teleconference, as provided
in the By-Laws.
No one dealing with the Trustees shall be under any obligation to make
any inquiry concerning the authority of the Trustees, or to see to the
application of any payments made or property transferred to the
Trustees or upon their order.
The Trustees shall have all of the powers set forth in this Section 1
with respect to all assets and liabilities of the Trust or each Series
and Class.
Section 2. Principal Transactions. The Trustees shall not cause the Trust
on behalf of any Series or Class to buy any securities (other than
Shares) from or sell any securities (other than Shares) to, or lend
any assets belonging to the Trust or any Series or Class to any
Trustee or officer or employee of the Trust or any firm of which any
such Trustee or officer is a member acting as principal unless
permitted by the 1940 Act, but the Trust may employ any such other
party or any such person or firm or company in which any such person
is an interested person in any capacity not prohibited by the 1940
Act.
Section 3. Trustees and Officers as Shareholders. Any Trustee, officer,
employee or other agent of the Trust may acquire, own and dispose of
Shares of the Trust or any Series or Class to the same extent as if he
were not a Trustee, officer, employee or agent; and the Trustees may
issue and sell or cause to be issued or sold Shares of the Trust or
any Series or Class to and buy such Shares from any such person or any
firm or company in which he is an interested person subject only to
the general limitations herein contained as to the sale and purchase
of such Shares; and all subject to any restrictions which may be
contained in the By-Laws.
Section 4. Parties to Contract. The Trustees may enter into any contract
of the character described in Article VII or in Article IX hereof or
any other capacity not prohibited by the 1940 Act with any
corporation, firm, partnership, trust or association, although one or
more of the shareholders, Trustees, officers, employees or agents of
the Trust or their affiliates may be an officer, director, trustee,
partner, shareholder or interested person of such other party to the
contract, and no such contract shall be invalidated or rendered
voidable by reason of the existence of any such relationship, nor
shall any person holding such relationship be liable merely by reason
of such relationship for any loss or expense to the Trust or any
Series or Class under or by reason of said contract or accountable for
any profit realized directly or indirectly therefrom, in the absence
of actual fraud. The same person (including a firm, corporation,
partnership, trust or association) may be the other party to contracts
entered into pursuant to Article VII or Article IX or any other
capacity not prohibited by the 1940 Act, and any individual may be
financially interested or otherwise an interested person of persons
who are parties to any or all of the contracts mentioned in this
Section 4.
ARTICLE VI
TRUSTEES' EXPENSES AND COMPENSATION
Section 1. Trustee Reimbursement. The Trustees shall be reimbursed from
the assets belonging to the Trust or each particular Series or Class
for all of such Trustees' expenses as such expenses are allocated to
and among any one or more of the Series or Classes pursuant to Article
III, Section 5(b), including, without limitation, expenses of
organizing the Trust or any Series or Class and continuing its or
their existence; fees and expenses of Trustees and Officers of the
Trust; fees for investment advisory services, administrative services
and principal underwriting services provided for in Article VII,
Sections 1, 2 and 3; fees and expenses of preparing and printing
Registration Statements under the Securities Act of 1933 and the 1940
Act and any amendments thereto; expenses of registering and qualifying
the Trust and any Series or Class and the Shares of any Series or
Class under federal and state laws and regulations; expenses of
preparing, printing and distributing prospectuses and any amendments
thereto sent to shareholders, underwriters, broker-dealers and to
investors who may be considering the purchase of Shares; expenses of
registering, licensing or other authorization of the Trust or any
Series or Class as a broker-dealer and of its or their officers as
agents and salesmen under federal and state laws and regulations;
interest expenses, taxes, fees and commissions of every kind; expenses
of issue (including cost of share certificates), purchases,
repurchases and redemptions of Shares, including expenses attributable
to a program of periodic issue; charges and expenses of custodians,
transfer agents, dividend disbursing agents, shareholder servicing
agents and registrars; printing and mailing costs; auditing,
accounting and legal expenses; reports to Shareholders and
governmental officers and commissions; expenses of meetings of
Shareholders and proxy solicitations therefor; insurance expenses;
association membership dues and nonrecurring items as may arise,
including all losses and liabilities by them incurred in administering
the Trust and any Series or Class, including expenses incurred in
connection with litigation, proceedings and claims and the obligations
of the Trust under Article XI hereof and the By-Laws to indemnify its
Trustees, officers, employees, shareholders and agents, and any
contract obligation to indemnify Principal Underwriters under Section
3 of Article VII; and for the payment of such expenses, disbursements,
losses and liabilities, the Trustees shall have a lien on the assets
belonging to each Series or Class prior to any rights or interests of
the Shareholders of any Series or Class. This section shall not
preclude the Trust from directly paying any of the aforementioned fees
and expenses.
Section 2. Trustee Compensation. The Trustees shall be entitled to
compensation from the Trust from the assets belonging to the Trust or
any Series or Class for their respective services as Trustees, to be
determined from time to time by vote of the Trustees, and the Trustees
shall also determine the compensation of all Officers, employees,
consultants and agents whom they may elect or appoint. The Trust may
pay out of the assets belonging to the Trust or any Series or Class
any Trustee or any corporation, firm, partnership, trust or other
entity of which a Trustee is an interested person for services
rendered in any capacity not prohibited by the 1940 Act, and such
payments shall not be deemed compensation for services as a Trustee
under the first sentence of this Section 2 of Article VI.
ARTICLE VII
INVESTMENT ADVISER, ADMINISTRATIVE SERVICES,
PRINCIPAL UNDERWRITER AND TRANSFER AGENT
Section 1. Investment Adviser. Subject to a Majority Shareholder Vote by
the Trust or the relevant Series or Class to the extent such vote is
required by law, the Trustees may in their discretion from time to
time enter into an investment advisory contract whereby the other
party to such contract shall undertake to furnish the Trustees
investment advisory services for such Series or Class upon such terms
and conditions and for such compensation as the Trustees may in their
discretion determine. Subject to a Majority Shareholder Vote by the
Trust or the relevant Series or Class to the extent such vote is
required by law, the investment adviser may enter into a sub-
investment advisory contract to receive investment advice and/or
statistical and factual information from the sub-investment adviser
for such Series or Class upon such terms and conditions and for such
compensation as the Trustees, in their discretion, may agree.
Notwithstanding any provisions of this Declaration of Trust, the
Trustees may authorize the investment adviser or sub-investment
adviser or any person furnishing administrative personnel and services
as set forth in Article VII, Section 2 (subject to such general or
specific instructions as the Trustees may from time to time adopt) to
effect purchases, sales or exchanges of portfolio securities belonging
to the Trust or a Series or Class on behalf of the Trustees or may
authorize any officer, employee or Trustee to effect such purchases,
sales, or exchanges pursuant to recommendations of the investment
adviser (and all without further action by the Trustees). Any such
purchases, sales and exchanges shall be deemed to have been authorized
by the Trustees. The Trustees may also authorize the investment
adviser to determine what firms shall be employed to effect
transactions in securities for the account of the Trust or a Series or
Class and to determine what firms shall participate in any such
transactions or shall share in commissions or fees charged in
connection with such transactions.
Section 2. Administrative Services. The Trustees may in their discretion
from time to time contract for administrative personnel and services
whereby the other party shall agree to provide the Trustees
administrative personnel and services to operate the Trust or a Series
or Class on a daily basis, on such terms and conditions as the
Trustees may in their discretion determine. Such services may be
provided by one or more entities.
Section 3. Principal Underwriter. The Trustees may in their discretion
from time to time enter into an exclusive or nonexclusive contract or
contracts providing for the sale of the Shares of the Trust or a
Series or Class to net such Series or Class not less than the amount
provided in Article III, Section 3 hereof, whereby the Trust or a
Series or Class may either agree to sell the Shares to the other party
to the contract or appoint such other party its sales agent for such
shares. In either case, the contract shall be on such terms and
conditions (including indemnification of Principal Underwriters
allowable under applicable law and regulation) as the Trustees may in
their discretion determine not inconsistent with the provisions of
this Article VII; and such contract may also provide for the
repurchase or sale of Shares of the Trust or a Series or Class by such
other party as principal or as agent of the Trust and may provide that
the other party may maintain a market for shares of the Trust or a
Series or Class.
Section 4. Transfer Agent. The Trustees may in their discretion from
time to time enter into transfer agency and Shareholder services
contracts whereby the other party shall undertake to furnish transfer
agency and Shareholder services. The contracts shall be on such terms
and conditions as the Trustees may in their discretion determine not
inconsistent with the provisions of this Declaration of Trust or of
the By-Laws. Such services may be provided by one or more entities
.
Section 5. Provisions and Amendments. Any contract entered into pursuant
to Sections 1 and 3 of this Article VII shall be consistent with and
subject to the requirements of Section 15 of the 1940 Act (including
any amendments thereof or other applicable Act of Congress hereafter
enacted) with respect to its continuance in effect, its termination
and the method of authorization and approval of such contract or
renewal thereof.
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 1. Voting Powers. Subject to the provisions set forth in Article
III, Section 5(d), the Shareholders shall have power to vote, (i) for
the election of Trustees as provided in Article IV, Section 2; (ii)
for the removal of Trustees as provided in Article IV, Section 3(d);
(iii) with respect to any investment adviser or sub-investment adviser
as provided in Article VII, Section 1; (iv) with respect to the
amendment of this Declaration of Trust as provided in Article XII,
Section 7; (v) to the same extent as the shareholders of a
Massachusetts business corporation as to whether or not a court
action, proceeding, or claim should be brought or maintained
derivatively or as a class action on behalf of the Trust or
Shareholders; and (vi) with respect to such additional matters
relating to the Trust as may be required by law, by this Declaration
of Trust, or the By-Laws of the Trust or any regulation of the Trust
or the Securities and Exchange Commission or any State, or as the
Trustees may consider desirable. Each whole Share shall be entitled
to one vote as to any matter on which it is entitled to vote, and each
fractional Share shall be entitled to a proportionate fractional vote.
There shall be no cumulative voting in the election of Trustees.
Shares may be voted in person or by proxy. A proxy with respect to
Shares held in the name of two or more persons shall be valid if
executed by any one of them unless at or prior to exercise of the
proxy the Trust receives a specific written notice to the contrary
from any one of them. A proxy purporting to be executed by or on
behalf of a Shareholder shall be deemed valid unless challenged at or
prior to its exercise and the burden of proving invalidity shall rest
on the challenger. At all meetings of Shareholders, unless inspectors
of election have been appointed, all questions relating to the
qualification of votes and the validity of proxies and the acceptance
or rejection of votes shall be decided by the chairman of the meeting.
Unless otherwise specified in the proxy, the proxy shall apply to all
shares of the Trust (or each Series or Class) owned by the
Shareholder. Any proxy may be in written form, telephonic or
electronic form, including facsimile, and all such forms shall be
valid when in conformance with procedures established and implemented
by the Officers of the Trust. Until Shares of the Trust or a Series
or Class are issued, the Trustees may exercise all rights of
Shareholders of such Series or Class with respect to matters affecting
such Series or Class, and may take any action with respect to the
Trust or such Series or Class required or permitted by law, this
Declaration of Trust or any By-Laws of the Trust to be taken by
Shareholders.
Section 2. Meetings. A Shareholders' meeting shall be held as specified
in Section 2 of Article IV at the principal office of the Trust or
such other place as the Trustees may designate. Special meetings of
the Shareholders may be called by the Trustees or the Chief Executive
Officer of the Trust and shall be called by the Trustees upon the
written request of Shareholders owning at least one-tenth of the
outstanding Shares of all Series and Classes entitled to vote.
Shareholders shall be entitled to at least fifteen days' notice of any
meeting.
Section 3. Quorum and Required Vote. Except as otherwise provided by law,
to constitute a quorum for the transaction of any business at any
meeting of Shareholders there must be present, in person or by proxy,
holders of one-fourth of the total number of Shares of the Trust
outstanding and entitled to vote at such meeting without regard to
Class except with respect to any matter which by law requires the
separate approval of one or more Series or Classes, in which case the
presence in person or by proxy of the holders of one-fourth, as set
forth above, of the Shares of each Series or Class entitled to vote
separately on the matter shall constitute a quorum. When any one or
more Series or Class is entitled to vote as a single Series or Class,
more than one-fourth of the Shares of each such Series or Class
entitled to vote shall constitute a quorum at a Shareholders' meeting
of that Series or Class. If a quorum, as defined above, shall not be
present for the purpose of any vote that may properly come before the
meeting, the Shareholders present in person or by proxy and entitled
to vote at such meeting on such matter holding a majority of Shares
present entitled to vote on such matter may by vote adjourn the
meeting from time to time to be held at the same place without
further notice than by announcement to be given at the meeting until a
quorum, as defined above, entitled to vote on such matter shall be
present, whereupon any such matter may be voted upon at the meeting as
though held when originally convened. Subject to any applicable
requirement of law or of this Declaration of Trust or the By-Laws, a
plurality of the votes cast shall elect a Trustee, and all other
matters shall be decided by a majority of the votes cast entitled to
vote thereon.
Section 4. Action by Written Consent. Subject to the provisions of the
1940 Act and other applicable law, any action taken by Shareholders
may be taken without a meeting if a majority of Shareholders entitled
to vote on the matter (or such larger proportion thereof as shall be
required by applicable law or by any express provision of this
Declaration of Trust or the By-Laws) consents to the action in
writing. Such consents shall be treated for all purposes as a vote
taken at a meeting of Shareholders.
Section 5. Additional Provisions. The By-Laws may include further
provisions for Shareholders' votes and meetings and related matters.
ARTICLE IX
CUSTODIAN
The Trustees may, in their discretion, from time to time enter into
contracts providing for custodial and accounting services to the Trust
or any Series or Class. The contracts shall be on the terms and
conditions as the Trustees may in their discretion determine not
inconsistent with the provisions of this Declaration of Trust or of
the By-Laws. Such services may be provided by one or more entities,
including one or more sub-custodians
.
Section 1. Appointment and Duties. The Trustees shall appoint or
otherwise engage a bank or trust company having an aggregate capital,
surplus and undivided profits (as shown in its last published report)
of at least two million dollars ($2,000,000) as custodian with
authority as its agent, but subject to such restrictions, limitations,
and other requirements, if any, as may be contained in the By-Laws of
the Trust:
(1) To receive and hold the securities owned by the Trust and deliver
the same upon written order;
(2) To receive and receipt for any moneys due to the Trust and
deposit the same in its own banking department or elsewhere as
the Trustees may direct; and
(3) To disburse such funds upon orders or vouchers;
(4) To keep the books and account of the Trust and furnish clerical
and accounting services;
(5) To compute, if authorized to do so by the Trustees, the
Accumulated Net Income of the Trust and the net asset value of
the Shares in accordance with the provisions hereof;
all upon such basis of compensation as may be agreed upon between the
Trustees and the custodian. If so directed by a Majority Shareholder
Vote, the custodian shall deliver and pay over all property of the
Trust held by it as specified in such vote.
The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and
services of the custodian and upon such terms and conditions, as may
be agreed upon between the custodian and such sub-custodian and
approved by the Trustees, provided that in every case such sub-
custodian shall be a bank or trust company organized under the laws of
the United States or one of the states thereof and having an aggregate
capital, surplus and undivided profits (as shown in its last published
report) of at least two million dollars ($2,000,000).
Section 2. Central Certificate System. Subject to such rules,
regulations, and orders as the Commission may adopt, the Trustees may
direct the custodian to deposit all or any part of the securities
owned by the Trust in a system for the central handling of securities
established by a national securities exchange or a national
securities association registered with the Commission under the
Securities Exchange Act of 1934, or such other person as may be
permitted by the Commission or otherwise in accordance with the 1940
Act as from time to time amended, pursuant to which system all
securities of any particular class or series of any issuer deposited
within the system are treated as fungible and may be transferred or
pledged by bookkeeping entry without physical delivery of such
securities, provided that all such deposits shall be subject to
withdrawal only upon the order of the custodian at the direction of
the Trustees.
ARTICLE X
DISTRIBUTIONS AND REDEMPTIONS
Section 1. Distributions.
(a) To the fullest extent permitted under Massachusetts law, the
Trustees may from time to time declare and pay dividends to the
Shareholders of any Series or Class, and the amount of such
dividends and the payment of them shall be wholly in the
discretion of the Trustees. The frequency of dividends and
distributions to Shareholders may be determined by the Trustees
pursuant to a standing resolution, or otherwise. Such dividends
may be accrued and automatically reinvested in additional Shares
(or fractions thereof) of the relevant Series or Class or another
Series or Class, or paid in cash or additional Shares of the
relevant Series or Class, all upon such terms and conditions as
the Trustees may prescribe.
(b) The Trustees may, on each day Accumulated Net Income of the Trust
(as defined in Section 3 of this Article X) is determined and is
positive, declare such Accumulated Net Income as a dividend to
Shareholders of record at such time as the Trustees shall
designate, payable in additional full and fractional Shares or in
cash.
(c) The Trustees may distribute in respect of any fiscal year as
ordinary dividends and as capital gains distributions,
respectively, amounts sufficient to enable any Series or Class to
qualify as a regulated investment company and to avoid any
liability for federal income or excise taxes in respect of that
year.
(d) The decision of the Trustees as to what, in accordance with good
accounting practice, is income and what is principal shall be
final, and except as specifically provided herein the decision of
the Trustees as to what expenses and charges of any Series or
Class shall be charged against principal and what against the
income shall be final. Any income not distributed in any year
may be permitted to accumulate and as long as not distributed may
be invested from time to time in the same manner as the principal
funds of any Series or Class.
(e) All dividends and distributions on Shares of a particular
Series or Class shall be distributed pro rata to the holders of
that Series or Class in proportion to the number of Shares of
that Series or Class held by such holders and recorded on the
books of the Trust or its transfer agent at the date and time of
record established for that payment.
Section 2. Redemptions and Repurchases.
(a) In case any Shareholder of record of any Series or Class at
any time desires to dispose of Shares of such Series or Class
recorded in his name, he may deposit a written request (or such
other form of request as the Trustees may from time to time
authorize) requesting that the Trust purchase his Shares,
together with such other instruments or authorizations to effect
the transfer as the Trustees may from time to time require, at
the office of the transfer agent, or as otherwise provided by the
Trustees and the Trust shall purchase his Shares out of assets
belonging to such Series or Class. The purchase price shall be
the net asset value of his shares reduced by any redemption
charge or deferred sales charge as the Trustees from time to time
may determine.
Payment for such Shares shall be made by the Trust to the
Shareholder of record within that time period required under the
1940 Act after the request (and, if required, such other
instruments or authorizations of transfer) is received, subject
to the right of the Trustees to postpone the date of payment
pursuant to Section 5 of this Article X. If the redemption is
postponed beyond the date on which it would normally occur by
reason of a declaration by the Trustees suspending the right of
redemption pursuant to Section 5 of this Article X, the right of
the Shareholder to have his Shares purchased by the Trust shall
be similarly suspended, and he may withdraw his request (or such
other instruments or authorizations of transfer) from deposit if
he so elects; or, if he does not so elect, the purchase price
shall be the net asset value of his Shares determined next after
termination of such suspension (reduced by any redemption charge
or deferred sales charge), and payment therefor shall be made
within the time period required under the 1940 Act.
(b) The Trust may purchase Shares of the Trust or a Series or
Class by agreement with the owner thereof at a purchase price not
exceeding the net asset value per Share (reduced by any
redemption charge or deferred sales charge) determined (1) next
after the purchase or contract of purchase is made or (2) at some
later time.
(c) The Trust may pay the purchase price (reduced by any
redemption charge or deferred sales charge) in whole or in part
by a distribution in kind of securities from the portfolio of the
Trust or the relevant Series or Class, taking such securities at
the same value employed in determining net asset value, and
selecting the securities in such manner as the Trustees may deem
fair and equitable.
(d) The Trust may pay the redemption price in whole or in part by a
distribution in kind of securities from the portfolio of the
Trust, taking such securities at the same value employed in
determining net asset value, and selecting the securities in such
manner as the Trustees may deem fair and equitable.
Section 3. Determination of Accumulated Net Income. The Accumulated Net
Income of the Trust shall be determined by or on behalf of the
Trustees at such time or times as the Trustees shall in their
discretion determine. Such determination shall be made in accordance
with generally accepted accounting principles and practices and may
include realized and/or unrealized gains from the sale or other
disposition of securities or other property of the Trust. The power
and duty to determine Accumulated Net Income may be delegated by the
Trustees from time to time to one or more of the Trustees or officers
of the Trust, to the other party to any contract entered into pursuant
to Section 1 or 2 of Article VII, or to the custodian or to a transfer
agent.
Section 4. Net Asset Value of Shares. The net asset value of each Share
of the Trust or a Series or Class outstanding shall be determined at
such time or times as may be determined by or on behalf of the
Trustees. The power and duty to determine net asset value may be
delegated by the Trustees from time to time to one or more of the
Trustees or officers of the Trust, to the other party to any contract
entered into pursuant to Section 1 or 2 of Article VII or to the
custodian or to a transfer agent or other person designated by the
Trustees.
The net asset value of each Share of the Trust or a Series or Class as
of any particular time shall be the quotient (adjusted to the nearer
cent) obtained by dividing the value, as of such time, of the net
assets belonging to such Series or Class (i.e., the value of the
assets belonging to such Series or Class less the liabilities
belonging to such Series or Class exclusive of capital and surplus) by
the total number of Shares outstanding of the Trust or the Series or
Class at such time in accordance with the requirements of the 1940 Act
and applicable provisions of the By-Laws of the Trust in conformity
with generally accepted accounting practices and principles.
The Trustees may declare a suspension of the determination of net
asset value for the whole or any part of any period in accordance with
the 1940 Act.
Section 5. Suspension of the Right of Redemption. The Trustees may
declare a suspension of the right of redemption or postpone the date
of payment for the whole or any part of any period in accordance with
the 1940 Act.
Section 6. Trust's Right to Redeem Shares. The Trust shall have the right
to cause the redemption of Shares of the Trust or any Series or Class
in any Shareholder's account for their then current net asset value
and promptly make cash payment to the shareholder (which payment may
be reduced by any applicable redemption charge or deferred sales
charge), if at any time the total investment in the account does not
have a minimum dollar value determined from time to time by the
Trustees in their sole discretion. Shares of the Trust are redeemable
at the option of the Trust if, in the opinion of the Trustees,
ownership of Trust Shares has or may become concentrated to an extent
which would cause the Trust to be a personal holding company within
the meaning of the Federal Internal Revenue Code (and thereby
disqualified under Sub-chapter M of said Code); in such circumstances
the Trust may compel the redemption of Shares, reject any order for
the purchase of Shares or refuse to give effect to the transfer of
Shares.
ARTICLE XI
LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 1. Limitation of Personal Liability and Indemnification of
Shareholders. The Trustees, officers, employees or agents of the
Trust shall have no power to bind any Shareholder of the Trust or any
Series or Class personally or to call upon such Shareholder for the
payment of any sum of money or assessment whatsoever, other than such
as the Shareholder may at any time agree to pay by way of subscription
for any Shares or otherwise.
No Shareholder or former Shareholder of the Trust or any Series or
Class shall be liable solely by reason of his being or having been a
Shareholder for any debt, claim, action, demand, suit, proceeding,
judgment, decree, liability or obligation of any kind, against or with
respect to the Trust or any Series or Class arising out of any action
taken or omitted for or on behalf of the Trust or such Series or
Class, and the Trust or such Series or Class shall be solely liable
therefor and resort shall be had solely to the property of the
relevant Series or Class of the Trust for the payment or performance
thereof.
Each Shareholder or former Shareholder of the Trust or any Series or
Class (or their heirs, executors, administrators or other legal
representatives or, in case of a corporation or other entity, its
corporate or other general successor) shall be entitled to be held
harmless from and indemnified against to the full extent of such
liability and the costs of any litigation or other proceedings in
which such liability shall have been determined, including, without
limitation, the fees and disbursements of counsel if, contrary to the
provisions hereof, such Shareholder or former Shareholder of the Trust
or such Series or Class shall be held to be personally liable. Such
indemnification shall come exclusively from the assets of the Trust or
relevant Series or Class.
The Trust shall, upon request by a Shareholder or former Shareholder,
assume the defense of any claim made against any Shareholder for any
act or obligation of the Trust or any Series or Class and satisfy any
judgment thereon.
Section 2. Limitation of Personal Liability and Indemnification
of Trustees, Officers, Employees or Agents of the Trust. No Trustee,
officer, employee or agent of the Trust shall have the power to bind
any other Trustee, officer, employee or agent of the Trust personally.
The Trustees, officers, employees or agents of the Trust in incurring
any debts, liabilities or obligations, or in taking or omitting any
other actions for or in connection with the Trust, are, and each shall
be deemed to be, acting as Trustee, officer, employee or agent of the
Trust and not in his own individual capacity.
Provided they have acted under the belief that their actions are in
the best interest of the Trust, the Trustees and officers shall not be
responsible for or liable in any event for neglect or wrongdoing by
them or any officer, agent, employee, investment adviser or principal
underwriter of the Trust or of any entity providing administrative
services for the Trust, but nothing herein contained shall protect any
Trustee or officer against any liability to which he would otherwise
be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his office.
Section 3. Express Exculpatory Clauses and Instruments.
(a) All persons extending credit to, contracting with or having any
claim against the Trust or a particular Series or Class shall
only look to the assets of the Trust or the assets of that
particular Series or Class for payment under such credit,
contract or claim; and neither the Shareholders nor the Trustees,
nor any of the Trust's officers, employees or agents, whether
past, present or future, shall be liable therefor.
(b) The Trustees shall use every reasonable means to assure that all
persons having dealings with the Trust or any Series or Class
shall be informed that the property of the Shareholders and the
Trustees, officers, employees and agents of the Trust or any
Series or Class shall not be subject to claims against or
obligations of the Trust or any other Series or Class to any
extent whatsoever. The Trustees shall cause to be inserted in
any written agreement, undertaking or obligation made or issued
on behalf of the Trust or any Series or Class (including
certificates for Shares of any Series or Class) an appropriate
reference to the provisions of this Declaration of Trust,
providing that neither the Shareholders, the Trustees, the
officers, the employees nor any agent of the Trust or any Series
or Class shall be liable thereunder, and that the other parties
to such instrument shall look solely to the assets belonging to
the Trust or the relevant Series or Class for the payment of any
claim thereunder or for the performance thereof; but the omission
of such provisions from any such instrument shall not render any
Shareholder, Trustee, officer, employee or agent liable, nor
shall the Trustee, or any officer, agent or employee of the Trust
or any Series or Class be liable to anyone for such omission.
If, notwithstanding this provision, any Shareholder, Trustee,
officer, employee or agent shall be held liable to any other
person by reason of the omission of such provision from any such
agreement, undertaking or obligation, the Shareholder, Trustee,
officer, employee or agent shall be indemnified and reimbursed
out of the Trust property, as provided in this Article XI.
Section 4. Indemnification of Trustees, Officers, Employees, and Agents.
(a) Every person who is or has been a Trustee, officer, employee or
agent of the Trust and persons who serve at the Trust's request
as director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise shall be
indemnified by the Trust to the fullest extent permitted by law
against liability and against all expenses reasonably incurred or
paid by him in connection with any debt, claim, action, demand,
suit, proceeding, judgment, decree, liability or obligation of
any kind in which he becomes involved as a party or otherwise by
virtue of his being or having been a Trustee, officer, employee
or agent of the Trust or of another corporation, partnership,
joint venture, trust or other enterprise at the request of the
Trust and against amounts paid or incurred by him in the
settlement thereof.
(b) The words `claim,'' ``action,'' `suit'' or ``proceeding'' shall
apply to all claims, actions, suits or proceedings (civil,
criminal, administrative, legislative, investigative or other,
including appeals), actual or threatened, and the words
`liability'' and ``expenses'' shall include, without limitation,
attorneys' fees, costs, judgments, amounts paid in settlement,
fines, penalties and other liabilities.
(c) No indemnification shall be provided hereunder to a Trustee,
officer, employee or agent against any liability to the Trust or
its Shareholders by reason of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in
the conduct of his office.
(d) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable,
shall not affect any other rights to which any Trustee, officer,
employee or agent may now or hereafter be entitled, shall
continue as to a person who has ceased to be such Trustee,
officer, employee, or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
(e) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit or proceeding of the character
described in paragraph (a) of this Section 4 may be paid by the
Trust prior to final disposition thereof upon receipt of an
undertaking by or on behalf of the Trustee, officer, employee or
agent secured by a surety bond or other suitable insurance that
such amount will be paid over by him to the Trust if it is
ultimately determined that he is not entitled to indemnification
under this Section 4.
ARTICLE XII
MISCELLANEOUS
Section 1. Trust is not a Partnership. It is hereby expressly declared
that a trust and not a partnership is created hereby.
Section 2. Trustee's Good Faith Action, Expert Advice, No Bond or Surety.
The exercise by the Trustees of their powers and discretions hereunder
shall be binding upon everyone interested. Subject to the provisions
of Article XI, the Trustees shall not be liable for errors of judgment
or mistakes of fact or law. The Trustees may take advice of counsel
or other experts with respect to the meaning and operation of this
Declaration of Trust, and subject to the provisions of Article XI,
shall be under no liability for any act or omission in accordance with
such advice or for failing to follow such advice. The Trustees shall
not be required to give any bond as such, nor any surety if a bond is
required.
Section 3. Establishment of Record Dates. The Trustees may close the
Share transfer books of the Trust maintained with respect to the Trust
or any Series or Class for a period not exceeding sixty (60) days
preceding the date of any meeting of Shareholders of the Trust or any
Series or Class, or the date for the payment of any dividend or the
making of any distribution to Shareholders, or the date for the
allotment of rights, or the date when any change or conversion or
exchange of Shares of the Trust or any Series or Class shall go into
effect or the last day on which the consent or dissent of Shareholders
of the Trust or any Series or Class may be effectively expressed for
any purpose; or in lieu of closing the Share transfer books as
aforesaid, the Trustees may fix in advance a date, not exceeding sixty
(60) days preceding the date of any meeting of Shareholders of the
Trust or any Series or Class, or the date for the payment of any
dividend or the making of any distribution to Shareholders of the
Trust or any Series or Class, or the date for the allotment of rights,
or the date when any change or conversion or exchange of Shares of the
Trust or any Series or Class shall go into effect, or the last day on
which the consent or dissent of Shareholders of the Trust or any
Series or Class may be effectively expressed for any purpose, as a
record date for the determination of the Shareholders entitled to
notice of, and, to vote at, any such meeting and any adjournment
thereof, or entitled to receive payment of any such dividend or
distribution, or to any such allotment of rights, or to exercise the
rights in respect of any such change, conversion or exchange of
shares, or to exercise the right to give such consent or dissent, and
in such case such Shareholders and only such Shareholders as shall be
Shareholders of record on the date so fixed shall be entitled to such
notice of, and to vote at, such meeting, or to receive payment of such
dividend or distribution, or to receive such allotment or rights, or
to change, convert or exchange Shares of the Trust or any Series or
Class, or to exercise such rights, as the case may be,
notwithstanding, after such date fixed aforesaid, any transfer of any
Shares on the books of the Trust maintained with respect to the Trust
or any Series or Class. Nothing in the foregoing sentence shall be
construed as precluding the Trustees from setting different record
dates for the Trust or different Series or Classes.
Section 4. Termination of Trust.
(a) This Trust shall continue without limitation of time but
subject to the provisions of paragraphs (b), (c) and (d) of this
Section 4.
(b) The Trustees, with the approval of the holders of a majority
of the outstanding Shares, may by unanimous action sell and
convey the assets of the Trust to another trust or corporation
organized under the laws of any State of the United States, which
is an investment company as defined in the 1940 Act, for an
adequate consideration which may include the assumption of all
outstanding obligations, taxes and other liabilities, accrued or
contingent, of the Trust and which may include Shares of
beneficial interest or stock of such trust or corporation. Upon
making provision for the payment of all such liabilities, by such
assumption or otherwise, the Trustees shall distribute the
remaining proceeds ratably among the holders of the Shares of the
Trust then outstanding.
(c) The Trustees may at any time sell and convert into money all
the assets of the Trust or any Series or Class without
Shareholder approval, unless otherwise required by applicable
law. Upon making provision for the payment of all outstanding
obligations, taxes and other liabilities, accrued or contingent,
belonging to each Series or Class, the Trustees shall distribute
the remaining assets belonging to each Series or Class ratably
among the holders of the outstanding Shares of that Series or
Class.
(d) Upon completion of the distribution of the remaining
proceeds of the remaining assets as provided in paragraphs (b)
and (c), the Trust or the applicable Series or Class shall
terminate and the Trustees shall be discharged of any and all
further liabilities and duties hereunder or with respect thereto
and the right, title and interest of all parties shall be
canceled and discharged.
Section 5. Offices of the Trust, Filing of Copies, Headings, Counterparts.
The Trust shall maintain a usual place of business in Massachusetts,
which, initially, shall be c/o Donnelly, Conroy & Gelhaar, One Post
Office Square, Boston, Massachusetts 02109-2105, and shall continue to
maintain an office at such address unless changed by the Trustees to
another location in Massachusetts. The Trust may maintain other
offices as the Trustees may from time to time determine. The original
or a copy of this instrument and of each declaration of trust
supplemental hereto shall be kept at the office of the Trust where it
may be inspected by any Shareholder. A copy of this instrument and of
each supplemental declaration of trust shall be filed by the Trustees
with the Massachusetts Secretary of State and the Boston City Clerk,
as well as any other governmental office where such filing may from
time to time be required. Headings are placed herein for convenience
of reference only and in case of any conflict, the text of this
instrument, rather than the headings shall control. This instrument
may be executed in any number of counterparts each of which shall be
deemed an original.
Section 6. Applicable Law. The Trust set forth in this instrument is
created under and is to be governed by and construed and administered
according to the laws of The Commonwealth of Massachusetts. The Trust
shall be of the type commonly called a Massachusetts business trust,
and without limiting the provisions hereof, the Trust may exercise all
powers which are ordinarily exercised by such a trust.
Section 7. Amendments -- General. All rights granted to the Shareholders
under this Declaration of Trust are granted subject to the reservation
of the right to amend this Declaration of Trust as herein provided,
except that no amendment shall repeal the limitations on personal
liability of any Shareholder or Trustee or repeal the prohibition of
assessment upon the Shareholders without the express consent of each
Shareholder or Trustee involved. Subject to the foregoing, the
provisions of this Declaration of Trust (whether or not related to the
rights of Shareholders) may be amended at any time, so long as such
amendment does not adversely affect the rights of any Shareholder with
respect to which such amendment is or purports to be applicable and so
long as such amendment is not in contravention of applicable law,
including the 1940 Act, by an instrument in writing signed by a
majority of the then Trustees (or by an officer of the Trust pursuant
to the vote of a majority of such Trustees). Any amendment to this
Declaration of Trust that adversely affects the rights of Shareholders
may be adopted at any time by an instrument signed in writing by a
majority of the then Trustees (or by any officer of the Trust pursuant
to the vote of a majority of such Trustees) when authorized to do so
by the vote of the Shareholders holding a majority of the Shares
entitled to vote. Subject to the foregoing, any such amendment shall
be effective as provided in the instrument containing the terms of
such amendment or, if there is no provision therein with respect to
effectiveness, upon the execution of such instrument and of a
certificate (which may be a part of such instrument) executed by a
Trustee or officer to the effect that such amendment has been duly
adopted. Copies of the amendment to this Declaration of Trust shall
be filed as specified in Section 5 of this Article XII. A restated
Declaration of Trust, integrating into a single instrument all of the
provisions of the Declaration of Trust which are then in effect and
operative, may be executed from time to time by a majority of the
Trustees and shall be effective upon filing as specified in Section 5.
Section 8. Amendments -- Series and Classes. The establishment and
designation of any Series or Class of Shares in addition to those
established and designated in Section 5 of Article III hereof shall be
effective upon the execution by a majority of the then Trustees,
without the need for Shareholder approval, of an amendment to this
Declaration of Trust, taking the form of a complete restatement or
otherwise, setting forth such establishment and designation and the
relative rights and preferences of any such Series or Class, or as
otherwise provided in such instrument.
Without limiting the generality of the foregoing, the Declaration of
the Trust may be amended without the need for Shareholder approval to:
(a) create one or more Series or Classes of Shares (in addition
to any Series or Classes already existing or otherwise) with such
rights and preferences and such eligibility requirements for
investment therein as the Trustees shall determine and reclassify
any or all outstanding Shares as Shares of particular Series or
Classes in accordance with such eligibility requirements;
(b) combine two or more Series or Classes of Shares into a
single Series or Class on such terms and conditions as the
Trustees shall determine;
(c) change or eliminate any eligibility requirements for
investment in Shares of any Series or Class, including without
limitation the power to provide for the issue of Shares of any
Series or Class in connection with any merger or consolidation of
the Trust with another trust or company or any acquisition by the
Trust of part or all of the assets of another trust or company;
(d) change the designation of any Series or Class of Shares;
(e) change the method of allocating dividends among the various
Series and Classes of Shares;
(f) allocate any specific assets or liabilities of the Trust or
any specific items of income or expense of the Trust to one or
more Series and Classes of Shares; and
(g) specifically allocate assets to any or all Series or Classes
of Shares or create one or more additional Series or Classes of
Shares which are preferred over all other Series or Classes of
Shares in respect of assets specifically allocated thereto or any
dividends paid by the Trust with respect to any net income,
however determined, earned from the investment and reinvestment
of any assets so allocated or otherwise and provide for any
special voting or other rights with respect to such Series or
Classes.
Section 9. Use of Name. The Trust acknowledges that Federated Investors
has reserved the right to grant the non-exclusive use of the name
"Federated Equity Funds''or any derivative thereof to any other
investment company, investment company portfolio, investment adviser,
distributor, or other business enterprise, and to withdraw from the
Trust or one or more Series or Classes any right to the use of the
name `Federated Equity Funds.''
The undersigned Assistant Secretary of Federated Equity Funds hereby
certifies that the above stated Amendment is a true and correct Amendment
to the Declaration of Trust, as adopted by the Board of Trustees on the
19th day of May, 1995.
WITNESS the due execution hereof this 15th day of August, 1995.
/s/S. Elliott Cohan
S. Elliott Cohan
Assistant Secretary
COMMONWEALTH OF PENNSYLVANIA )
: ss:
COUNTY OF ALLEGHENY )
I hereby certify that on August 15, 1995, before me, the subscriber, a
Notary Public of the Commonwealth of Pennsylvania, in for the County of
Allegheny, personally appeared S. Elliott Cohan, who acknowledged the
foregoing to be his act.
Witness my hand and notarial seal the day and year above written.
/s/Marie H. Hamm
Notary Public
My Commission expires: September 16, 1996
Exhibit 2(iii) under Form N-1A
Exhibit 3(b) under Item 601/Reg. S-K
AMENDED AND RESTATED BY-LAWS
OF
FEDERATED EQUITY FUNDS
(FORMERLY, FEDERATED GROWTH TRUST)
TABLE OF CONTENTS
Page
ARTICLE I: OFFICERS AND THEIR ELECTION ...................1
Section 1 .......................................Officers 1
Section 2 ...........................Election of Officers 1
Section 3 ........Resignations and Removals and Vacancies 1
ARTICLE II: POWERS AND DUTIES OF TRUSTEES AND OFFICERS ....2
Section 1 .......................................Trustees 2
Section 2 ..........Chairman of the Trustees ("Chairman") 2
Section 3 ......................................President 2
Section 4 .................................Vice President 2
Section 5 ....................................Secretary . 3
Section 6 ......................................Treasurer 3
Section 7 .......................Assistant Vice President 3
Section 8 .Assistant Secretaries and Assistant Treasurers 3
Section 9 .......................................Salaries 3
ARTICLE III:POWERS AND DUTIES OF THE EXECUTIVE
AND OTHER COMMITTEES ..........................4
Section 1 .................Executive and Other Committees 4
Section 2 ...............Vacancies in Executive Committee 4
Section 3 ......Executive Committee to Report to Trustees 4
Section 4 ...............Procedure of Executive Committee 4
Section 5 ..................Powers of Executive Committee 4
Section 6 ...................................Compensation 5
Section 7Action by Consent of the Board of Trustees, Executive
Committee or Other Committee ..................5
ARTICLE IV: SHAREHOLDERS' MEETINGS ........................5
Section 1 ...............................Special Meetings 5
Section 2 ........................................Notices 5
Section 3 ...............................Place of Meeting 6
Section 4 ..............................Action by Consent 6
Section 5 ........................................Proxies 6
ARTICLE V: TRUSTEES' MEETINGS ............................6
Section 1 ..........Number and Qualifications of Trustees 6
Section 2 ...............................Special Meetings 6
Section 3 ...............................Regular Meetings 6
Section 4 ................................Quorum and Vote 6
Section 5 ........................................Notices 7
Section 6 ...............................Place of Meeting 7
Section 7 .....Teleconference Meetings; Action by Consent 7
Section 8 .................................Special Action 7
Section 9 .......................Compensation of Trustees 8
ARTICLE VI: SHARES ........................................8
Section 1 ...................................Certificates 8
Section 2 .............................Transfer of Shares 8
Section 3 ..............Equitable Interest Not Recognized 8
Section 4 ......Lost, Destroyed or Mutilated Certificates 8
Section 5 ......Transfer Agent and Registrar: Regulations 9
ARTICLE VII:INSPECTION OF BOOKS ...........................9
ARTICLE VIII:....................AGREEMENTS, CHECKS, DRAFTS,
ENDORSEMENTS, ETC .............................9
Section 1 ................................Agreements, Etc 9
Section 2 ............................Checks, Drafts, Etc 9
Section 3Endorsements, Assignments and Transfer of Securities 10
Section 4 ..........................Evidence of Authority 10
ARTICLE IX: INDEMNIFICATION OF TRUSTEES AND OFFICERS .....10
Section 1 ........................................General 10
Section 2 .............................Compromise Payment 11
Section 3 .....Indemnification Not Exclusive; Definitions 11
ARTICLE X: SEAL .........................................12
ARTICLE XI: FISCAL YEAR ..................................12
ARTICLE XII:AMENDMENTS ...................................12
ARTICLE XIII:..............................WAIVERS OF NOTICE 13
ARTICLE XIV:REPORT TO SHAREHOLDERS .......................13
ARTICLE XV: BOOKS AND RECORDS ............................13
ARTICLE XVI:TERMS ........................................14
AMENDED AND RESTATED BY-LAWS
OF
FEDERATED EQUITY FUNDS
(FORMERLY, FEDERATED GROWTH TRUST)
DATED AUGUST 16, 1995
ARTICLE I
OFFICERS AND THEIR ELECTION
Section 1. Officers. The officers of the Trust shall be elected by the
Board of Trustees, and shall be a President, one or more Vice
Presidents, a Treasurer, a Secretary and such other officers as the
Trustees may from time to time elect. The Board of Trustees, in its
discretion, may also elect a Chairman of the Board of Trustees (who
must be a Trustee). It shall not be necessary for any Trustee or
other officer to be a holder of shares in any Series or Class of the
Trust.
Section 2. Election of Officers. The President, Vice President(s),
Treasurer and Secretary shall be elected annually by the Trustees, and
serve until a successor is so elected and qualified, or until earlier
resignation or removal. The Chairman of the Trustees,if there is one,
shall be elected annually by and from the Trustees, and serve until a
successor is so elected and qualified, or until earlier resignation or
removal.
Two or more offices may be held by a single person except the offices
of President and Secretary. The officers shall hold office until
their successors are elected and qualified.
Section 3. Resignations and Removals and Vacancies. Any officer of the
Trust may resign by filing a written resignation with the President
(or Chairman, if there is one) of the Trustees or with the Trustees or
with the Secretary, which shall take effect on being so filed or at
such time as may be therein specified. The Trustees may remove any
officer, with or without cause, by a majority vote of all of the
Trustees. The Trustees may fill any vacancy created in any office
whether by resignation, removal or otherwise, subject to the
limitations of the Investment Company Act of 1940.
ARTICLE II
POWERS AND DUTIES OF TRUSTEES AND OFFICERS
Section 1. Trustees. The business and affairs of the Trust shall be
managed by the Trustees, and they shall have all powers necessary and
desirable to carry out that responsibility.
Section 2. Chairman of the Trustees ("Chairman"). The Chairman, if there
be a Chairman, shall preside at the meetings of Shareholders and of
the Board of Trustees. He shall have general supervision over the
business of the Trust and policies of the Trust. He shall employ and
define the duties of all employees of the Trust, shall have power to
discharge any such employees, shall exercise general supervision over
the affairs of the Trust and shall perform such other duties as may be
assigned to him from time to time by the Trustees. The Chairman shall
appoint a Trustee or officer to preside at such meetings in his
absence.
Section 3. President. The President shall be the chief executive officer
of the Trust. The President, in the absence of the Chairman, or if
there is no Chairman, shall perform all duties and may exercise any
of the powers of the Chairman subject to the control of the Trustees.
He shall counsel and advise the Chairman and shall perform such other
duties as may be assigned to him from time to time by the Trustees,
the Chairman or the Executive Committee. The President shall have the
power to appoint one or more Assistant Secretaries or other junior
officers, subject to ratification of such appointments by the Board.
The President shall have the power to sign, in the name of and on
behalf of the Trust, powers of attorney, proxies, waivers of notice of
meeting, consents and other instruments relating to securities or
other property owned by the Trust, and may, in the name of and on
behalf of the Trust, take all such action as the President may deem
advisable in entering into agreements to purchase securities or other
property in the ordinary course of business, and to sign
representation letters in the course of buying securities or other
property.
Section 4. Vice President. The Vice President (or if more than one, the
senior Vice President) in the absence of the President shall perform
all duties and may exercise any of the powers of the President subject
to the control of the Trustees. Each Vice President shall perform
such other duties as may be assigned to him from time to time by the
Trustees, the Chairman, the President, or the Executive Committee.
Each Vice President shall be authorized to sign documents on behalf of
the Trust. The Vice President shall have the power to sign, in the
name of and on behalf of the Trust and subject to Article VIII,
Section 1, powers of attorney, proxies, waivers of notice of meeting,
consents and other instruments relating to securities or other
property owned by the Trust, and may, in the name of and on behalf of
the Trust, take all such action as the Vice President may deem
advisable in entering into agreements to purchase securities or other
property in the ordinary course of business, and to sign
representation letters in the course of buying securities or other
property.
Section 5. Secretary. The Secretary shall keep or cause to be kept in
books provided for that purpose the Minutes of the Meetings of
Shareholders and of the Trustees; shall see that all Notices are duly
given in accordance with the provisions of these By-Laws and as
required by law; shall be custodian of the records and of the Seal of
the Trust (if there be a Seal) and see that the Seal is affixed to all
documents, the execution of which on behalf of the Trust under its
Seal is duly authorized; shall keep directly or through a transfer
agent a register of the post office address of each shareholder of
each Series or Class of the Trust, and make all proper changes in such
register, retaining and filing his authority for such entries; shall
see that the books, reports, statements, certificates and all other
documents and records required by law are properly kept and filed; and
in general shall perform all duties incident to the Office of
Secretary and such other duties as may from time to time be assigned
to him by the Trustees, Chairman, the President, or the Executive
Committee.
Section 6. Treasurer. The Treasurer shall be the principal financial and
accounting officer of the Trust responsible for the preparation and
maintenance of the financial books and records of the Trust. He shall
deliver all funds and securities which may come into his hands
belonging to any Series or Class to such custodian or sub-custodian as
may be employed by the Trust for any Series or Class. The Treasurer
shall perform such duties additional to the foregoing as the Trustees,
Chairman, the President or the Executive Committee may from time to
time designate.
Section 7. Assistant Vice President. The Assistant Vice President or Vice
Presidents of the Trust shall have such authority and perform such
duties as may be assigned to them by the Trustees, the Executive
Committee, the President, or the Chairman.
Section 8. Assistant Secretaries and Assistant Treasurers. The Assistant
Secretary or Secretaries and the Assistant Treasurer or Treasurers
shall perform the duties of the Secretary and of the Treasurer,
respectively, in the absence of those Officers and shall have such
further powers and perform such other duties as may be assigned to
them respectively by the Trustees or the Executive Committee, the
President, or the Chairman.
Section 9. Salaries. The salaries of the Officers shall be fixed from
time to time by the Trustees. No officer shall be prevented from
receiving such salary by reason of the fact that he is also a Trustee.
ARTICLE III
POWERS AND DUTIES OF THE EXECUTIVE AND OTHER COMMITTEES
Section 1. Executive and Other Committees. The Trustees may elect from
their own number an Executive Committee to consist of not less than
two members. The Executive Committee shall be elected by a resolution
passed by a vote of at least a majority of the Trustees then in
office. The Trustees may also elect from their own number other
committees from time to time, the number composing such committees and
the powers conferred upon the same to be determined by vote of the
Trustees. Any committee may make rules for the conduct of its
business.
Section 2. Vacancies in Executive Committee. Vacancies occurring in the
Executive Committee from any cause shall be filled by the Trustees by
a resolution passed by the vote of at least a majority of the Trustees
then in office.
Section 3. Executive Committee to Report to Trustees. All action by the
Executive Committee shall be reported to the Trustees at their meeting
next succeeding such action.
Section 4. Procedure of Executive Committee. The Executive Committee
shall fix its own rules of procedure not inconsistent with these By-
Laws or with any directions of the Trustees. It shall meet at such
times and places and upon such notice as shall be provided by such
rules or by resolution of the Trustees. The presence of a majority
shall constitute a quorum for the transaction of business, and in
every case an affirmative vote of a majority of all the members of the
Committee present shall be necessary for the taking of any action.
Section 5. Powers of Executive Committee. During the intervals between
the Meetings of the Trustees, the Executive Committee, except as
limited by the By-Laws of the Trust or by specific directions of the
Trustees, shall possess and may exercise all the powers of the
Trustees in the management and direction of the business and conduct
of the affairs of the Trust in such manner as the Executive Committee
shall deem to be in the best interests of the Trust, and shall have
power to authorize the Seal of the Trust (if there is one) to be
affixed to all instruments and documents requiring same.
Notwithstanding the foregoing, the Executive Committee shall not have
the power to elect or remove Trustees, increase or decrease the number
of Trustees, elect or remove any Officer, declare dividends, issue
shares or recommend to shareholders any action requiring shareholder
approval.
Section 6. Compensation. The members of any duly appointed committee
shall receive such compensation and/or fees as from time to time may
be fixed by the Trustees.
Section 7. Action by Consent of the Board of Trustees, Executive
Committee or Other Committee. Subject to Article V, Section 2 of
these By-Laws, any action required or permitted to be taken at any
meeting of the Trustees, Executive Committee or any other duly
appointed Committee may be taken without a meeting if consents in
writing setting forth such action are signed by all members of the
Board or such committee and such consents are filed with the records
of the Trust. In the event of the death, removal, resignation or
incapacity of any Board or committee member prior to that Trustee
signing such consent, the remaining Board or committee members may re-
constitute themselves as the entire Board or committee until such time
as the vacancy is filled in order to fulfill the requirement that such
consents be signed by all members of the Board or committee.
ARTICLE IV
SHAREHOLDERS' MEETINGS
Section 1. Special Meetings. A special meeting of the shareholders of the
Trust or of a particular Series or Class shall be called by the
Secretary whenever ordered by the Trustees, the Chairman or requested
in writing by the holder or holders of at least one-tenth of the
outstanding shares of the Trust or of the relevant Series or Class,
entitled to vote. If the Secretary, when so ordered or requested,
refuses or neglects for more than two days to call such special
meeting, the Trustees, Chairman or the shareholders so requesting may,
in the name of the Secretary, call the meeting by giving notice
thereof in the manner required when notice is given by the Secretary.
Section 2. Notices. Except as above provided, notices of any special
meeting of the shareholders of the Trust or a particular Series or
Class, shall be given by the Secretary by delivering or mailing,
postage prepaid, to each shareholder entitled to vote at said meeting,
a written or printed notification of such meeting, at least seven
business days before the meeting, to such address as may be registered
with the Trust by the shareholder. No notice of any meeting to
shareholders need be given to a shareholder if a written waiver of
notice, executed before or after the meeting by such shareholder or
his or her attorney that is duly authorized, is filed with the records
of the meeting. Notice may be waived as provided in Article XIII of
these By-Laws.
Section 3. Place of Meeting. Meetings of the shareholders of the Trust or
a particular Series or Class, shall be held at the principal place of
business of the Trust in Pittsburgh, Pennsylvania, or at such place
within or without The Commonwealth of Massachusetts as fixed from time
to time by resolution of the Trustees.
Section 4. Action by Consent. Any action required or permitted to be
taken at any meeting of shareholders may be taken without a meeting,
if a consent in writing, setting forth such action, is signed by a
majority of the shareholders entitled to vote on the subject matter
thereof, and such consent is filed with the records of the Trust.
Section 5. Proxies. Any shareholder entitled to vote at any meeting of
shareholders may vote either in person, by telephone, by electronic
means including facsimile, or by proxy. Every written proxy shall be
subscribed by the shareholder or his duly authorized attorney and
dated, but need not be sealed, witnessed or acknowledged. All proxies
shall be filed with and verified by the Secretary or an Assistant
Secretary of the Trust or, the person acting as Secretary of the
Meeting.
ARTICLE V
TRUSTEES' MEETINGS
Section 1. Number and Qualifications of Trustees. The number of Trustees
can be changed from time to time by a majority of the Trustees to not
less than three nor more than twenty. The term of office of a Trustee
shall not be affected by any decrease in the number of Trustees made
by the Trustees pursuant to the foregoing authorization. Each Trustee
shall hold office for the life of the Trust, or as otherwise provided
in the Declaration of Trust.
Section 2. Special Meetings. Special meetings of the Trustees shall be
called by the Secretary at the written request of the Chairman, the
President, or any Trustee, and if the Secretary when so requested
refuses or fails for more than twenty-four hours to call such meeting,
the Chairman, the President, or such Trustee may in the name of the
Secretary call such meeting by giving due notice in the manner
required when notice is given by the Secretary.
Section 3. Regular Meetings. Regular meetings of the Trustees may be held
without call or notice at such places and at such times as the
Trustees may from time to time determine, provided that any Trustee
who is absent when such determination is made shall be given notice of
the determination.
Section 4. Quorum and Vote. A majority of the Trustees shall constitute a
quorum for the transaction of business. The act of a majority of the
Trustees present at any meeting at which a quorum is present shall be
the act of the Trustees unless a greater proportion is required by the
Declaration of Trust or these By-Laws or applicable law. In the
absence of a quorum, a majority of the Trustees present may adjourn
the meeting from time to time until a quorum shall be present. Notice
of any adjourned meeting need not be given.
Section 5. Notices. The Secretary or any Assistant Secretary shall give,
at least two days before the meeting, notice of each meeting of the
Board of Trustees, whether Annual, Regular or Special, to each member
of the Board by mail, telegram, telephone or electronic facsimile to
his last known address. It shall not be necessary to state the
purpose or business to be transacted in the notice of any meeting
unless otherwise required by law. Personal attendance at any meeting
by a Trustee other than to protest the validity of said meeting shall
constitute a waiver of the foregoing requirement of notice. In
addition, notice of a meeting need not be given if a written waiver of
notice executed by such Trustee before or after the meeting is filed
with the records of the meeting.
Section 6. Place of Meeting. Meetings of the Trustees shall be held at
the principal place of business of the Trust in Pittsburgh,
Pennsylvania, or at such place within or without The Commonwealth of
Massachusetts as fixed from time to time by resolution of the
Trustees, or as the person or persons requesting said meeting to be
called may designate, but any meeting may adjourn to any other place.
Section 7. Teleconference Meetings; Action by Consent. Except as
otherwise provided herein or from time to time in the 1940 Act or in
the Declaration of Trust, any action to be taken by the Trustees may
be taken by a majority of the Trustees within or without
Massachusetts, including any meeting held by means of a conference
telephone or other communications equipment by means of which all
persons participating in the meeting can communicate with each other
simultaneously, and participation by such means shall constitute
presence in person at a meeting. Any action by the Trustees may be
taken without a meeting if a written consent thereto is signed by all
the Trustees and filed with the records of the Trustees' meetings.
Such consent shall be treated as a vote of the Trustees for all
purposes.Written consents may be executed in counterparts, which when
taken together, constitute a validly executed consent of the Trustees.
Section 8. Special Action. When all the Trustees shall be present at any
meeting, however called, or whenever held, or shall assent to the
holding of the meeting without notice, or after the meeting shall sign
a written assent thereto on the record of such meeting, the acts of
such meeting shall be valid as if such meeting had been regularly
held.
Section 9. Compensation of Trustees. The Trustees may receive a stated
salary for their services as Trustees, and by resolution of Trustees a
fixed fee and expenses of attendance may be allowed for attendance at
each Meeting. Nothing herein contained shall be construed to preclude
any Trustee from serving the Trust in any other capacity, as an
officer, agent or otherwise, and receiving compensation therefor.
ARTICLE VI
SHARES
Section 1. Certificates. If certificates for shares are issued, all
certificates for shares shall be signed by the Chairman, President or
any Vice President and by the Treasurer or Secretary or any Assistant
Treasurer or Assistant Secretary and sealed with the seal of the
Trust, if the Trust has a seal. The signatures may be either manual
or facsimile signatures and the seal, if there is one, may be either
facsimile or any other form of seal. Certificates for shares for
which the Trust has appointed an independent Transfer Agent and
Registrar shall not be valid unless countersigned by such Transfer
Agent and registered by such Registrar. In case any officer who has
signed any certificate ceases to be an officer of the Trust before the
certificate is issued, the certificate may nevertheless be issued by
the Trust with the same effect as if the officer had not ceased to be
such officer as of the date of its issuance. Share certificates of
each Series or Class shall be in such form not inconsistent with law
or the Declaration of Trust or these By-Laws as may be determined by
the Trustees.
Section 2. Transfer of Shares. The shares of each Series and Class of the
Trust shall be transferable, so as to affect the rights of the Trust
or any Series or Class, only by transfer recorded on the books of the
Trust or its transfer agent, in person or by attorney.
Section 3. Equitable Interest Not Recognized. The Trust shall be entitled
to treat the holder of record of any share or shares of a Series or
Class as the absolute owner thereof and shall not be bound to
recognize any equitable or other claim or interest in such share or
shares of a Series or Class on the part of any other person except as
may be otherwise expressly provided by law.
Section 4. Lost, Destroyed or Mutilated Certificates. In case any
certificate for shares is lost, mutilated or destroyed, the Trustees
may issue a new certificate in place thereof upon indemnity to the
relevant Series or Class against loss and upon such other terms and
conditions as the Trustees may deem advisable.
Section 5. Transfer Agent and Registrar: Regulations. The Trustees shall
have power and authority to make all such rules and regulations as
they may deem expedient concerning the issuance, transfer and
registration of certificates for shares and may appoint a Transfer
Agent and/or Registrar of certificates for shares of each Series or
Class, and may require all such share certificates to bear the
signature of such Transfer Agent and/or of such Registrar.
ARTICLE VII
INSPECTION OF BOOKS
The Trustees shall from time to time determine whether and to what extent,
and at what times and places, and under what conditions and
regulations the accounts and books of the Trust maintained on behalf
of each Series and Class or any of them shall be open to the
inspection of the shareholders of any Series or Class; and no
shareholder shall have any right of inspecting any account or book or
document of the Trust except that, to the extent such account or book
or document relates to the Series or Class in which he is a
Shareholder or the Trust generally, such Shareholder shall have such
right of inspection as conferred by laws or authorized by the Trustees
or by resolution of the Shareholders of the relevant Series or Class.
ARTICLE VIII
AGREEMENTS, CHECKS, DRAFTS, ENDORSEMENTS, ETC.
Section 1. Agreements, Etc. The Trustees or the Executive Committee may
authorize any Officer or Agent of the Trust to enter into any
Agreement or execute and deliver any instrument in the name of the
Trust on behalf of any Series or Class, and such authority may be
general or confined to specific instances; and, unless so authorized
by the Trustees or by the Executive Committee or by the Declaration of
Trust or these By-Laws, no Officer, Agent or Employee shall have any
power or authority to bind the Trust by any Agreement or engagement or
to pledge its credit or to render it liable pecuniarily for any
purpose or for any amount.
Section 2. Checks, Drafts, Etc. All checks, drafts, or orders for the
payment of money, notes and other evidences of indebtedness shall be
signed by such Officers, Employees, or Agents, as shall from time to
time be designated by the Trustees or the Executive Committee, or as
may be specified in or pursuant to the agreement between the Trust on
behalf of any Series or Class and the custodian appointed, pursuant to
the provisions of the Declaration of Trust.
Section 3. Endorsements, Assignments and Transfer of Securities. All
endorsements, assignments, stock powers, other instruments of transfer
or directions for the transfer of portfolio securities or other
property, whether or not registered in nominee form, shall be made by
such Officers, Employees, or Agents as may be authorized by the
Trustees or the Executive Committee.
Section 4. Evidence of Authority. Anyone dealing with the Trust shall be
fully justified in relying on a copy of a resolution of the Trustees
or of any committee thereof empowered to act in the premises which is
certified as true by the Secretary or an Assistant Secretary under the
seal of the Trust.
ARTICLE IX
INDEMNIFICATION OF TRUSTEES AND OFFICERS
Section 1. General. The Trust shall indemnify each of its Trustees and
officers (including persons who serve at the Trust's request as
directors, officers or trustees of another organization in which the
Trust has any interest as a shareholder, creditor or otherwise)
(hereinafter referred to as a "Covered Person") against all
liabilities and expenses, including but not limited to amounts paid in
satisfaction of judgments, in compromise or as fines and penalties,
and counsel fees reasonably incurred by any Covered Person in
connection with the defense or disposition of any action, suit or
other proceeding, whether civil, criminal, administrative, or
investigative, and any appeal therefrom, before any court or
administrative or legislative body, in which such Covered Person may
be or may have been involved as a party or otherwise or with which
such person may be or may have been threatened, while in office or
thereafter, by reason of being or having been such a Covered Person,
except that no Covered Person shall be indemnified against any
liability to the Trust or its Shareholders to which such Covered
Person would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of such Covered Person's office.
Expenses, including counsel fees so incurred by any such Covered
Person (but excluding amounts paid in satisfaction of judgments, in
compromise or as fines or penalities), may be paid from time to time
by the Trust in advance of the final disposition of any such action,
suit or proceeding upon receipt of an undertaking by or on behalf of
such Covered Person to repay amounts so paid to the Trust if it is
ultimately determined that indemnification of such expenses is not
authorized under this Article, provided that (a) such Covered Person
shall provide security for his undertaking, (b) the Trust shall be
insured against losses arising by reason of such Covered Person's
failure to fulfill his undertaking or (c) a majority of the non-party
Trustees who are not interested persons of the Trust (provided that a
majority of such Trustees then in office act on the matter), or
independent legal counsel in a written opinion, shall determine, based
on a review of readily available facts (but not a full trial-type
inquiry), that there is reason to believe such Covered Person
ultimately will be entitled to indemnification.
Section 2. Compromise Payment. As to any matter disposed of (whether by a
compromise payment, pursuant to a consent decree or otherwise) without
an adjudication in a decision on the merits by a court, or by any
other body before which the proceeding was brought, that such Covered
Person is liable to the Trust or its Shareholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disreagrd of the
duties involved in the conduct of such Covered Person's office,
indemnification shall be provided if (a) approved as in the best
interest of the Trust, after notice that it involves such
indemnification, by at least a majority of non-party Trustees who are
not interested persons of the Trust (provided that a majority of such
Trustees then in office act on the matter), upon a determination,
based upon a review of readily available facts (but not a full trial-
type inquiry) that such Covered Person is not liable to the Trust or
its Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of such Covered Person's office, or (b) there has been obtained an
opinion in writing of independent legal counsel, based upon a review
of readily available facts (but not a full trial-type inquiry) to the
effect that such indemnification would not protect such Covered Person
against any liability to the Trust to which such Covered Person would
otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the
conduct of his office.
Any approval pursuant to this Section shall not prevent the recovery
from any Covered Person of any amount paid to such Covered Person in
accordance with this Section as indemnification if such Covered Person
is subsequently adjudicated by a court of competent jurisdiction to
have been liabile to the Trust or its Shareholders by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved inthe conduct of such Covered Person's office.
Section 3. Indemnification Not Exclusive; Definitions. The right of
indemnification hereby provided shall not be exclusive of or affect
any other rights to which any such Covered Person may be entitled. As
used in this Article IX, the term "Covered Person" shall include such
person's heirs, executors and administrators. For purposes of this
Article IX, the term "non-party Trustee" is a Trustee against whom
none of the actions, suits or other proceedings in question or another
action, suit or other proceeding on the same or similar grounds is
then or has been pending. Nothing contained in this Article IX shall
affect any rights to indemnification to which personnel of the Trust,
other than Trustees and officers, and other persons may be entitled by
contract or otherwise under law, nor the power of the Trust to
purchase and maintain liability insurance on behalf of such persons.
ARTICLE X
SEAL
The seal of the Trust, if there is one, shall consist either of a flat-
faced die with the word "Massachusetts", together with the name of the
Trust and the year of its organization cut or engraved thereon, or any
other indication that the Trust has a seal that has been approved by
the Trustees, but, unless otherwise required by the Trustees, the seal
shall not be necessary to be placed on, and its absence shall not
impair the validity of, any document, instrument or other paper
executed and delivered by or on behalf of the Trust.
ARTICLE XI
FISCAL YEAR
The fiscal year of the Trust and each Series or Class shall be as
designated from time to time by the Trustees.
ARTICLE XII
AMENDMENTS
These By-Laws may be amended by a majority vote of all of the Trustees.
ARTICLE XIII
WAIVERS OF NOTICE
Whenever any notice whatever is required to be given under the provisions
of any statute of The Commonwealth of Massachusetts, or under the
provisons of the Declaration of Trust or these By-Laws, a waiver
thereof in writing, signed by the person or persons entitled to said
notice, whether before or after the time stated therein, or presence
at a meeting to which such person was entitled notice of, shall be
deemed equivalent thereto. A notice shall be deemed to have been
given if telegraphed, cabled, or sent by wireless when it has been
delivered to a representative of any telegraph, cable or wireless
company with instructions that it be telegraphed, cabled, or sent by
wireless. Any notice shall be deemed to be given if mailed at the
time when the same shall be deposited in the mail.
ARTICLE XIV
REPORT TO SHAREHOLDERS
The Trustees, so long as required by applicable law, shall at least semi-
annually submit to the shareholders of each Series or Class a written
financial report of the transactions of that Series or Class including
financial statements which shall at least annually be certified by
independent public accountants.
ARTICLE XV
BOOKS AND RECORDS
The books and records of the Trust and any Series or Class, including the
stock ledger or ledgers, may be kept in or outside the Commonwealth of
Massachusetts at such office or agency of the Trust as may from time
to time be determined by the Secretary of the Trust, as set forth in
Article II, Section 5 of these By-Laws.
ARTICLE XVI
TERMS
Terms defined in the Declaration of Trust and not otherwise defined herein
are used herein with the meanings set forth or referred to in the Declaration
of Trust.
Exhibit 4 (iv) under Form N-1A
Exhibit 3(c) under Item 601/Reg. S-K
Federated Equity Funds
Federated Aggressive Growth Fund
(Class A Shares)
Number Shares
Account No. Alpha Code Organized Under theSee Reverse Side For
Laws of the Certain Definitions
Commonwealth of
Massachusetts
THIS IS TO CERTIFY THAT is the owner of
CUSIP (to be applied for)
Fully Paid and Non-Assessable Shares of Beneficial Interest of the
Federated Aggressive Growth Fund (Class A Shares) Portfolio of the
Federated Equity Funds hereafter called the `Trust,'' transferable on the
books of the Trust by the owner, in person or by duly authorized attorney,
upon surrender of this Certificate properly endorsed.
The shares represented hereby are issued and shall be held subject to
the provisions of the Declaration of Trust and By-Laws of the Trust, and
all amendments thereto, to all of which the holder by acceptance hereof
assents.
This Certificate is not valid unless countersigned by the Transfer
Agent.
IN WITNESS WHEREOF, the Trust has caused this Certificate to be signed
in its name by its proper officers and to be sealed with its Seal.
Dated: Federated Equity Funds
Corporate Seal
(1984)
Massachusetts
/s/Edward C. Gonzales /s/ John F. Donahue
Vice President and Treasurer Chairman
Countersigned:
Federated Services Company
(Pittsburgh) Transfer Agent
By:
Authorized Signature
The following abbreviations, when used in the inscription on the face of
this Certificate, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN
ACT-...Custodian...
TEN ENT - as tenants by the entirety
(Cust) (Minor)
JT TEN - as joint tenants with right of under
Uniform Gifts to Minors
survivorship and not as tenants Act.............................
in common (State)
Additional abbreviations may also be used though not in the above
list.
For value received hereby sell, assign, and transfer unto
----------
Please insert social security or other
identifying number of assignee
===========================================================================
(Please print or typewrite name and address, including zip code, of
assignee)
==
==
shares
of the beneficial interest represented by the within Certificate, and do
hereby irrevocably constitute and appoint
Attorn
- ---------------------------------------------------------------------
ey
to transfer the said shares on the books of the within named Trust with
full power of substitution in the premises.
Dated
----------------------
NOTICE:
------------------------------
The signature to this assignment must
correspond with the name as written upon the
face of the certificate in every particular,
without alteration or enlargement or any
change whatever.
All persons dealing with Federated Equity Funds, a Massachusetts business
trust, must look solely to the Trust property for the enforcement of any
claim against the Trust, as the Trustees, officers, agents or shareholders
of the Trust assume no personal liability whatsoever for obligations
entered into on behalf of the Trust.
THIS SPACE MUST NOT BE COVERED IN ANY WAY
DOCUMENT DESCRIPTION - SPECIMEN STOCK CERTIFICATE
Page One
A. The Certificate is outlined by an (color) one-half inch border.
B. The number in the upper left-hand corner and the number of shares in
the upper right-hand corner are outlined by octagonal boxes.
C. The cusip number in the middle right-hand area of the page is boxed.
D. The Massachusetts corporate seal appears in the bottom middle of the
page.
Page Two
The social security or other identifying number of the assignee
appears in a box in the top-third upper-left area of the page.
Federated Equity Funds
Federated Aggressive Growth Fund
(Class B Shares)
Number Shares
Account No. Alpha Code Organized Under theSee Reverse Side For
Laws of the Certain Definitions
Commonwealth of
Massachusetts
THIS IS TO CERTIFY THAT is the owner of
CUSIP (to be applied for)
Fully Paid and Non-Assessable Shares of Beneficial Interest of the
Federated Aggressive Growth Fund (Class B Shares) Portfolio of the
Federated Equity Funds hereafter called the `Trust,'' transferable on the
books of the Trust by the owner, in person or by duly authorized attorney,
upon surrender of this Certificate properly endorsed.
The shares represented hereby are issued and shall be held subject to
the provisions of the Declaration of Trust and By-Laws of the Trust, and
all amendments thereto, to all of which the holder by acceptance hereof
assents.
This Certificate is not valid unless countersigned by the Transfer
Agent.
IN WITNESS WHEREOF, the Trust has caused this Certificate to be signed
in its name by its proper officers and to be sealed with its Seal.
Dated: Federated Equity Funds
Corporate Seal
(1984)
Massachusetts
/s/Edward C. Gonzales /s/ John F. Donahue
Vice President and Treasurer Chairman
Countersigned:
Federated Services Company
(Pittsburgh) Transfer Agent
By:
Authorized Signature
The following abbreviations, when used in the inscription on the face of
this Certificate, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN
ACT-...Custodian...
TEN ENT - as tenants by the entirety
(Cust) (Minor)
JT TEN - as joint tenants with right of under
Uniform Gifts to Minors
survivorship and not as tenants Act.............................
in common (State)
Additional abbreviations may also be used though not in the above
list.
For value received hereby sell, assign, and transfer unto
----------
Please insert social security or other
identifying number of assignee
===========================================================================
(Please print or typewrite name and address, including zip code, of
assignee)
==
==
shares
of the beneficial interest represented by the within Certificate, and do
hereby irrevocably constitute and appoint
Attorn
- ---------------------------------------------------------------------
ey
to transfer the said shares on the books of the within named Trust with
full power of substitution in the premises.
Dated
----------------------
NOTICE:
------------------------------
The signature to this assignment must
correspond with the name as written upon the
face of the certificate in every particular,
without alteration or enlargement or any
change whatever.
All persons dealing with Federated Equity Funds, a Massachusetts business
trust, must look solely to the Trust property for the enforcement of any
claim against the Trust, as the Trustees, officers, agents or shareholders
of the Trust assume no personal liability whatsoever for obligations
entered into on behalf of the Trust.
THIS SPACE MUST NOT BE COVERED IN ANY WAY
DOCUMENT DESCRIPTION - SPECIMEN STOCK CERTIFICATE
Page One
A. The Certificate is outlined by an (color) one-half inch border.
B. The number in the upper left-hand corner and the number of shares in
the upper right-hand corner are outlined by octagonal boxes.
C. The cusip number in the middle right-hand area of the page is boxed.
D. The Massachusetts corporate seal appears in the bottom middle of the
page.
Page Two
The social security or other identifying number of the assignee
appears in a box in the top-third upper-left area of the page.
Federated Equity Funds
Federated Aggressive Growth Fund
(Class C Shares)
Number Shares
Account No. Alpha Code Organized Under theSee Reverse Side For
Laws of the Certain Definitions
Commonwealth of
Massachusetts
THIS IS TO CERTIFY THAT is the owner of
CUSIP (to be applied for)
Fully Paid and Non-Assessable Shares of Beneficial Interest of the
Federated Aggressive Growth Fund (Class C Shares) Portfolio of the
Federated Equity Funds hereafter called the `Trust,'' transferable on the
books of the Trust by the owner, in person or by duly authorized attorney,
upon surrender of this Certificate properly endorsed.
The shares represented hereby are issued and shall be held subject to
the provisions of the Declaration of Trust and By-Laws of the Trust, and
all amendments thereto, to all of which the holder by acceptance hereof
assents.
This Certificate is not valid unless countersigned by the Transfer
Agent.
IN WITNESS WHEREOF, the Trust has caused this Certificate to be signed
in its name by its proper officers and to be sealed with its Seal.
Dated: Federated Equity Funds
Corporate Seal
(1984)
Massachusetts
/s/Edward C. Gonzales /s/ John F. Donahue
Vice President and Treasurer Chairman
Countersigned:
Federated Services Company
(Pittsburgh) Transfer Agent
By:
Authorized Signature
The following abbreviations, when used in the inscription on the face of
this Certificate, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN
ACT-...Custodian...
TEN ENT - as tenants by the entirety
(Cust) (Minor)
JT TEN - as joint tenants with right of under
Uniform Gifts to Minors
survivorship and not as tenants Act.............................
in common (State)
Additional abbreviations may also be used though not in the above
list.
For value received hereby sell, assign, and transfer unto
----------
Please insert social security or other
identifying number of assignee
===========================================================================
(Please print or typewrite name and address, including zip code, of
assignee)
==
==
shares
of the beneficial interest represented by the within Certificate, and do
hereby irrevocably constitute and appoint
Attorn
- ---------------------------------------------------------------------
ey
to transfer the said shares on the books of the within named Trust with
full power of substitution in the premises.
Dated
----------------------
NOTICE:
------------------------------
The signature to this assignment must
correspond with the name as written upon the
face of the certificate in every particular,
without alteration or enlargement or any
change whatever.
All persons dealing with Federated Equity Funds, a Massachusetts business
trust, must look solely to the Trust property for the enforcement of any
claim against the Trust, as the Trustees, officers, agents or shareholders
of the Trust assume no personal liability whatsoever for obligations
entered into on behalf of the Trust.
THIS SPACE MUST NOT BE COVERED IN ANY WAY
DOCUMENT DESCRIPTION - SPECIMEN STOCK CERTIFICATE
Page One
A. The Certificate is outlined by an (color) one-half inch border.
B. The number in the upper left-hand corner and the number of shares in
the upper right-hand corner are outlined by octagonal boxes.
C. The cusip number in the middle right-hand area of the page is boxed.
D. The Massachusetts corporate seal appears in the bottom middle of the
page.
Page Two
The social security or other identifying number of the assignee
appears in a box in the top-third upper-left area of the page.
Exhibit 5(iii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
FEDERATED EQUITY FUNDS
(FORMERLY, FEDERATED GROWTH TRUST)
INVESTMENT ADVISORY CONTRACT
This Contract is made this June 1, 1995, between Federated Management,
a Delaware business trust having its principal place of business in
Pittsburgh, Pennsylvania (the "Adviser"), and Federated Equity Funds
(formerly, Federated Growth Trust), a Massachusetts business trust having
its principal place of business in Pittsburgh, Pennsylvania (the
`Trust'').
WHEREAS the Trust is an open-end management investment company as that
term is defined in the Investment Company Act of 1940, as amended, and
is registered as such with the Securities and Exchange Commission; and
WHEREAS Adviser is engaged in the business of rendering investment
advisory and management services.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. The Trust hereby appoints Adviser as Investment Adviser for each
of the portfolios ("Funds") of the Trust which executes an exhibit to this
Contract, and Adviser accepts the appointments. Subject to the direction of
the Trustees of the Trust, Adviser shall provide investment research and
supervision of the investments of the Funds and conduct a continuous
program of investment evaluation and of appropriate sale or other
disposition and reinvestment of each Fund's assets.
2. Adviser, in its supervision of the investments of each of the
Funds will be guided by each of the Fund's investment objective and
policies and the provisions and restrictions contained in the Declaration
of Trust and By-Laws of the Trust and as set forth in the Registration
Statements and exhibits as may be on file with the Securities and Exchange
Commission.
3. Each Fund shall pay or cause to be paid all of its own expenses
and its allocable share of Trust expenses, including, without limitation,
the expenses of organizing the Trust and continuing its existence; fees and
expenses of Trustees and officers of the Trust; fees for investment
advisory services and administrative personnel and services; expenses
incurred in the distribution of its shares ("Shares"), including expenses
of administrative support services; fees and expenses of preparing and
printing its Registration Statements under the Securities Act of 1933 and
the Investment Company Act of 1940, as amended, and any amendments thereto;
expenses of registering and qualifying the Trust, the Funds, and Shares of
the Funds under federal and state laws and regulations; expenses of
preparing, printing, and distributing prospectuses (and any amendments
thereto) to shareholders; interest expense, taxes, fees, and commissions of
every kind; expenses of issue (including cost of Share certificates),
purchase, repurchase, and redemption of Shares, including expenses
attributable to a program of periodic issue; charges and expenses of
custodians, transfer agents, dividend disbursing agents, shareholder
servicing agents, and registrars; printing and mailing costs, auditing,
accounting, and legal expenses; reports to shareholders and governmental
officers and commissions; expenses of meetings of Trustees and shareholders
and proxy solicitations therefor; insurance expenses; association
membership dues and such nonrecurring items as may arise, including all
losses and liabilities incurred in administering the Trust and the Funds.
Each Fund will also pay its allocable share of such extraordinary expenses
as may arise including expenses incurred in connection with litigation,
proceedings, and claims and the legal obligations of the Trust to indemnify
its officers and Trustees and agents with respect thereto.
4. Each of the Funds shall pay to Adviser, for all services rendered
to each Fund by Adviser hereunder, the fees set forth in the exhibits
attached hereto.
5. The net asset value of each Fund's Shares as used herein will be
calculated to the nearest 1/10th of one cent.
6. The Adviser may from time to time and for such periods as it
deems appropriate reduce its compensation (and, if appropriate, assume
expenses of one or more of the Funds) to the extent that any Fund's
expenses exceed such lower expense limitation as the Adviser may, by notice
to the Fund, voluntarily declare to be effective.
7. This Contract shall begin for each Fund as of the date of
execution of the applicable exhibit and shall continue in effect with
respect to each Fund presently set forth on an exhibit (and any subsequent
Funds added pursuant to an exhibit during the initial term of this
Contract) for two years from the date of this Contract set forth above and
thereafter for successive periods of one year, subject to the provisions
for termination and all of the other terms and conditions hereof if: (a)
such continuation shall be specifically approved at least annually by the
vote of a majority of the Trustees of the Trust, including a majority of
the Trustees who are not parties to this Contract or interested persons of
any such party cast in person at a meeting called for that purpose; and (b)
Adviser shall not have notified a Fund in writing at least sixty (60) days
prior to the anniversary date of this Contract in any year thereafter that
it does not desire such continuation with respect to that Fund. If a Fund
is added after the first approval by the Trustees as described above, this
Contract will be effective as to that Fund upon execution of the applicable
exhibit and will continue in effect until the next annual approval of this
Contract by the Trustees and thereafter for successive periods of one year,
subject to approval as described above.
8. Notwithstanding any provision in this Contract, it may be
terminated at any time with respect to any Fund, without the payment of any
penalty, by the Trustees of the Trust or by a vote of the shareholders of
that Fund on sixty (60) days' written notice to Adviser.
9. This Contract may not be assigned by Adviser and shall
automatically terminate in the event of any assignment. Adviser may employ
or contract with such other person, persons, corporation, or corporations
at its own cost and expense as it shall determine in order to assist it in
carrying out this Contract.
10. In the absence of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the obligations or duties under this
Contract on the part of Adviser, Adviser shall not be liable to the Trust
or to any of the Funds or to any shareholder for any act or omission in the
course of or connected in any way with rendering services or for any losses
that may be sustained in the purchase, holding, or sale of any security.
11. This Contract may be amended at any time by agreement of the
parties provided that the amendment shall be approved both by the vote of a
majority of the Trustees of the Trust, including a majority of the Trustees
who are not parties to this Contract or interested persons of any such
party to this Contract (other than as Trustees of the Trust) cast in person
at a meeting called for that purpose, and, where required by Section
15(a)(2) of the Act, on behalf of a Fund by a majority of the outstanding
voting securities of such Fund as defined in Section 2(a)(42) of the Act.
12. Adviser is hereby expressly put on notice of the limitation of
liability as set forth in Article XI of the Declaration of Trust and agrees
that the obligations pursuant to this Contract of a particular Fund and of
the Trust with respect to that particular Fund be limited solely to the
assets of that particular Fund, and Adviser shall not seek satisfaction of
any such obligation from any other Fund, the shareholders of any Fund, the
Trustees, officers, employees or agents of the Trust, or any of them.
13. The parties hereto acknowledge that Federated Investors, has
reserved the right to grant the non-exclusive use of the name "Federated"
or any derivative thereof to any other investment company, investment
company portfolio, investment adviser, distributor or other business
enterprise, and to withdraw from the Trust and one or more of the Funds the
use of the name "Federated". The name "Federated" will continue to be used
by the Trust and each Fund so long as such use is mutually agreeable to
Federated Investors and the Trust.
14. This Contract shall be construed in accordance with and governed
by the laws of the Commonwealth of Pennsylvania.
15. This Contract will become binding on the parties hereto upon
their execution of the attached exhibits to this Contract.
EXHIBIT A
to the
Investment Advisory Contract
FEDERATED SMALL CAP STRATEGIES FUND
For all services rendered by Adviser hereunder, the above-named Fund
of the Trust shall pay to Adviser and Adviser agrees to accept as full
compensation for all services rendered hereunder, an annual investment
advisory fee equal to .75 of 1% of the average daily net assets of the
Fund.
The portion of the fee based upon the average daily net assets of the
Fund shall be accrued daily at the rate of 1/365th of .75 of 1% applied to
the daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this June 1, 1995.
Attest: FEDERATED MANAGEMENT
/s/Stephen A. Keen By: /s/J. Thomas Madden
Secretary Executive Vice President
Attest: FEDERATED EQUITY FUNDS
(FORMERLY, FEDERATED GROWTH TRUST)
/s/Robert C. Rosselot By: /s/Richard B. Fisher
Assistant Secretary Vice President
EXHIBIT B
to the
Investment Advisory Contract
FEDERATED CAPITAL APPRECIATION FUND
For all services rendered by Adviser hereunder, the above-named Fund
of the Trust shall pay to Adviser and Adviser agrees to accept as full
compensation for all services rendered hereunder, an annual investment
advisory fee equal to .75 of 1% of the average daily net assets of the
Fund.
The portion of the fee based upon the average daily net assets of the
Fund shall be accrued daily at the rate of 1/365th of .75 of 1% applied to
the daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this September 1, 1995.
Attest: FEDERATED MANAGEMENT
/s/Stephen A. Keen By: /s/J. Thomas Madden
Secretary Executive Vice President
Attest: FEDERATED EQUITY FUNDS
(FORMERLY, FEDERATED GROWTH TRUST)
/s/Robert C. Rosselot By: /s/Richard B. Fisher
Assistant Secretary Vice President:
EXHIBIT C
to the
Investment Advisory Contract
FEDERATED AGGRESSIVE GROWTH FUND
For all services rendered by Adviser hereunder, the above-named Fund
of the Trust shall pay to Adviser and Adviser agrees to accept as full
compensation for all services rendered hereunder, an annual investment
advisory fee equal to .75 of 1% of the average daily net assets of the
Fund.
The portion of the fee based upon the average daily net assets of the
Fund shall be accrued daily at the rate of 1/365th of .75 of 1% applied to
the daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this , 199.
Attest: FEDERATED MANAGEMENT
By:
Secretary Executive Vice President
Attest: FEDERATED EQUITY FUNDS
(FORMERLY, FEDERATED GROWTH TRUST)
By:
Assistant Secretary Vice President
Exhibit 6(iii) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
FEDERATED EQUITY FUNDS
(FORMERLY, FEDERATED GROWTH TRUST)
DISTRIBUTOR'S CONTRACT
AGREEMENT made this June 1, 1995 by and between Federated Equity Funds
(formerly, Federated Growth Trust) (the "Trust"), a Massachusetts business
trust, and FEDERATED SECURITIES CORP. ("FSC"), a Pennsylvania Corporation.
In consideration of the mutual covenants hereinafter contained, it is
hereby agreed by and between the parties hereto as follows:
1. The Trust hereby appoints FSC as its agent to sell and distribute
shares of the Trust which may be offered in one or more series (the
"Funds") consisting of one or more classes (the "Classes") of shares
(the "Shares"), as described and set forth on one or more exhibits
to this Agreement, at the current offering price thereof as
described and set forth in the current Prospectuses of the Trust.
FSC hereby accepts such appointment and agrees to provide such other
services for the Trust, if any, and accept such compensation from
the Trust, if any, as set forth in the applicable exhibits to this
Agreement.
2. The sale of any Shares may be suspended without prior notice
whenever in the judgment of the Trust it is in its best interest to
do so.
3. Neither FSC nor any other person is authorized by the Trust to give
any information or to make any representation relative to any Shares
other than those contained in the Registration Statement,
Prospectuses, or Statements of Additional Information ("SAIs") filed
with the Securities and Exchange Commission, as the same may be
amended from time to time, or in any supplemental information to
said Prospectuses or SAIs approved by the Trust. FSC agrees that any
other information or representations other than those specified
above which it or any dealer or other person who purchases Shares
through FSC may make in connection with the offer or sale of Shares,
shall be made entirely without liability on the part of the Trust.
No person or dealer, other than FSC, is authorized to act as agent
for the Trust for any purpose. FSC agrees that in offering or
selling Shares as agent of the Trust, it will, in all respects, duly
conform to all applicable state and federal laws and the rules and
regulations of the National Association of Securities Dealers, Inc.,
including its Rules of Fair Practice. FSC will submit to the Trust
copies of all sales literature before using the same and will not
use such sales literature if disapproved by the Trust.
4. This Agreement is effective with respect to each Class as of the
date of execution of the applicable exhibit and shall continue in
effect with respect to each Class presently set forth on an exhibit
and any subsequent Classes added pursuant to an exhibit during the
initial term of this Agreement for one year from the date set forth
above, and thereafter for successive periods of one year if such
continuance is approved at least annually by the Trustees of the
Trust including a majority of the members of the Board of Trustees
of the Trust who are not interested persons of the Trust and have no
direct or indirect financial interest in the operation of any
Distribution Plan relating to the Trust or in any related documents
to such Plan ("Disinterested Trustees") cast in person at a meeting
called for that purpose. If a Class is added after the first annual
approval by the Trustees as described above, this Agreement will be
effective as to that Class upon execution of the applicable exhibit
and will continue in effect until the next annual approval of this
Agreement by the Trustees and thereafter for successive periods of
one year, subject to approval as described above.
5. This Agreement may be terminated with regard to a particular Fund or
Class at any time, without the payment of any penalty, by the vote
of a majority of the Disinterested Trustees or by a majority of the
outstanding voting securities of the particular Fund or Class on not
more than sixty (60) days' written notice to any other party to this
Agreement. This Agreement may be terminated with regard to a
particular Fund or Class by FSC on sixty (60) days' written notice
to the Trust.
6. This Agreement may not be assigned by FSC and shall automatically
terminate in the event of an assignment by FSC as defined in the
Investment Company Act of 1940, as amended, provided, however, that
FSC may employ such other person, persons, corporation or
corporations as it shall determine in order to assist it in carrying
out its duties under this Agreement.
7. FSC shall not be liable to the Trust for anything done or omitted by
it, except acts or omissions involving willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties imposed
by this Agreement.
8. This Agreement may be amended at any time by mutual agreement in
writing of all the parties hereto, provided that such amendment is
approved by the Trustees of the Trust including a majority of the
Disinterested Trustees of the Trust cast in person at a meeting
called for that purpose.
9. This Agreement shall be construed in accordance with and governed by
the laws of the Commonwealth of Pennsylvania.
10. (a) Subject to the conditions set forth below, the Trust agrees to
indemnify and hold harmless FSC and each person, if any, who
controls FSC within the meaning of Section 15 of the Securities
Act of 1933 and Section 20 of the Securities Act of 1934, as
amended, against any and all loss, liability, claim, damage and
expense whatsoever (including but not limited to any and all
expenses whatsoever reasonably incurred in investigating,
preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever) arising out of or based
upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, any
Prospectuses or SAIs (as from time to time amended and
supplemented) or the omission or alleged omission therefrom of
a material fact required to be stated therein or necessary to
make the statements therein not misleading, unless such
statement or omission was made in reliance upon and in
conformity with written information furnished to the Trust
about FSC by or on behalf of FSC expressly for use in the
Registration Statement, any Prospectuses and SAIs or any
amendment or supplement thereof.
If any action is brought against FSC or any controlling person
thereof with respect to which indemnity may be sought against
the Trust pursuant to the foregoing paragraph, FSC shall
promptly notify the Trust in writing of the institution of such
action and the Trust shall assume the defense of such action,
including the employment of counsel selected by the Trust and
payment of expenses. FSC or any such controlling person thereof
shall have the right to employ separate counsel in any such
case, but the fees and expenses of such counsel shall be at the
expense of FSC or such controlling person unless the employment
of such counsel shall have been authorized in writing by the
Trust in connection with the defense of such action or the
Trust shall not have employed counsel to have charge of the
defense of such action, in any of which events such fees and
expenses shall be borne by the Trust. Anything in this
paragraph to the contrary notwithstanding, the Trust shall not
be liable for any settlement of any such claim of action
effected without its written consent. The Trust agrees promptly
to notify FSC of the commencement of any litigation or
proceedings against the Trust or any of its officers or
Trustees or controlling persons in connection with the issue
and sale of Shares or in connection with the Registration
Statement, Prospectuses, or SAIs.
(b) FSC agrees to indemnify and hold harmless the Trust, each of
its Trustees, each of its officers who have signed the
Registration Statement and each other person, if any, who
controls the Trust within the meaning of Section 15 of the
Securities Act of 1933, but only with respect to statements or
omissions, if any, made in the Registration Statement or any
Prospectus, SAI, or any amendment or supplement thereof in
reliance upon, and in conformity with, information furnished to
the Trust about FSC by or on behalf of FSC expressly for use in
the Registration Statement or any Prospectus, SAI, or any
amendment or supplement thereof. In case any action shall be
brought against the Trust or any other person so indemnified
based on the Registration Statement or any Prospectus, SAI, or
any amendment or supplement thereof, and with respect to which
indemnity may be sought against FSC, FSC shall have the rights
and duties given to the Trust, and the Trust and each other
person so indemnified shall have the rights and duties given to
FSC by the provisions of subsection (a) above.
(c) Nothing herein contained shall be deemed to protect any person
against liability to the Trust or its shareholders to which
such person would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance
of the duties of such person or by reason of the reckless
disregard by such person of the obligations and duties of such
person under this Agreement.
(d) Insofar as indemnification for liabilities may be permitted
pursuant to Section 17 of the Investment Company Act of 1940,
as amended, for Trustees, officers, FSC and controlling persons
of the Trust by the Trust pursuant to this Agreement, the Trust
is aware of the position of the Securities and Exchange
Commission as set forth in the Investment Company Act Release
No. IC-11330. Therefore, the Trust undertakes that in addition
to complying with the applicable provisions of this Agreement,
in the absence of a final decision on the merits by a court or
other body before which the proceeding was brought, that an
indemnification payment will not be made unless in the absence
of such a decision, a reasonable determination based upon
factual review has been made (i) by a majority vote of a quorum
of non-party Disinterested Trustees, or (ii) by independent
legal counsel in a written opinion that the indemnitee was not
liable for an act of willful misfeasance, bad faith, gross
negligence or reckless disregard of duties. The Trust further
undertakes that advancement of expenses incurred in the defense
of a proceeding (upon undertaking for repayment unless it is
ultimately determined that indemnification is appropriate)
against an officer, Trustee, FSC or controlling person of the
Trust will not be made absent the fulfillment of at least one
of the following conditions: (i) the indemnitee provides
security for his undertaking; (ii) the Trust is insured against
losses arising by reason of any lawful advances; or (iii) a
majority of a quorum of non-party Disinterested Trustees or
independent legal counsel in a written opinion makes a factual
determination that there is reason to believe the indemnitee
will be entitled to indemnification.
11. FSC is hereby expressly put on notice of the limitation of liability
as set forth in the Declaration of Trust and agrees that the
obligations assumed by the Trust pursuant to this Agreement shall be
limited in any case to the Trust and its assets and FSC shall not
seek satisfaction of any such obligation from the shareholders of
the Trust, the Trustees, officers, employees or agents of the Trust,
or any of them.
12. If at any time the Shares of any Fund are offered in two or more
Classes, FSC agrees to adopt compliance standards as to when a class
of shares may be sold to particular investors.
13. This Agreement will become binding on the parties hereto upon the
execution of the attached exhibits to the Agreement.
Exhibit A
to the
Distributor's Contract
FEDERATED EQUITY FUNDS
(Formerly, Federated Growth Trust)
FEDERATED SMALL CAP STRATEGIES FUND
CLASS A SHARES
The following provisions are hereby incorporated and made part of the
Distributor's Contract dated June 1, 1995, between Federated Equity Funds
(formerly, Federated Growth Trust) and Federated Securities Corp. with
respect to the Class of shares set forth above.
1. The Trust hereby appoints FSC to engage in activities principally
intended to result in the sale of shares of the above-listed Class
("Shares"). Pursuant to this appointment, FSC is authorized to
select a group of financial institutions ("Financial
Institutions") to sell Shares at the current offering price
thereof as described and set forth in the respective prospectuses
of the Trust.
2. During the term of this Agreement, the Trust will pay FSC for
services pursuant to this Agreement, a monthly fee computed at the
annual rate of .25 of 1% of the average aggregate net asset value
of the Shares held during the month. For the month in which this
Agreement becomes effective or terminates, there shall be an
appropriate proration of any fee payable on the basis of the
number of days that the Agreement is in effect during the month.
3. FSC may from time-to-time and for such periods as it deems
appropriate reduce its compensation to the extent any Class'
expenses exceed such lower expense limitation as FSC may, by
notice to the Trust, voluntarily declare to be effective.
4. FSC will enter into separate written agreements with various firms
to provide certain of the services set forth in Paragraph 1
herein. FSC, in its sole discretion, may pay Financial
Institutions a periodic fee in respect of Shares owned from time
to time by their clients or customers. The schedules of such fees
and the basis upon which such fees will be paid shall be
determined from time to time by FSC in its sole discretion.
5. FSC will prepare reports to the Board of Trustees of the Trust on
a quarterly basis showing amounts expended hereunder including
amounts paid to Financial Institutions and the purpose for such
expenditures.
In consideration of the mutual covenants set forth in the
Distributor's Contract dated June 1, 1995 between Federated Equity Funds
(formerly, Federated Growth Trust) and Federated Securities Corp.,
Federated Equity Funds (formerly, Federated Growth Trust) executes and
delivers this Exhibit on behalf of the Federated Small Cap Strategies Fund,
and with respect to the Class A Shares thereof, first set forth in this
Exhibit.
Witness the due execution hereof this 1st day of June, 1995.
ATTEST: FEDERATED EQUITY FUNDS
(FORMERLY, FEDERATED GROWTH TRUST)
/s/John W. McGonigle By:/s/Glen R. Johnson
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
/s/Byron F. Bowman By:/s/Edward C. Gonzales
Secretary Executive Vice President
(SEAL)
Exhibit B
to the
Distributor's Contract
FEDERATED EQUITY FUNDS
(Formerly, Federated Growth Trust)
FEDERATED SMALL CAP STRATEGIES FUND
CLASS B SHARES
The following provisions are hereby incorporated and made part of the
Distributor's Contract dated June 1, 1995, between Federated Equity Funds
(formerly, Federated Growth Trust) and Federated Securities Corp. with
respect to the Class of shares set forth above.
1. The Trust hereby appoints FSC to engage in activities principally
intended to result in the sale of shares of the above-listed
Class ("Shares"). Pursuant to this appointment, FSC is authorized
to select a group of financial institutions ("Financial
Institutions") to sell Shares at the current offering price
thereof as described and set forth in the respective prospectuses
of the Trust.
2. During the term of this Agreement, the Trust will pay FSC for
services pursuant to this Agreement, a monthly fee computed at
the annual rate of .75 of 1% of the average aggregate net asset
value of the Shares held during the month. For the month in which
this Agreement becomes effective or terminates, there shall be an
appropriate proration of any fee payable on the basis of the
number of days that the Agreement is in effect during the month.
3. FSC may from time-to-time and for such periods as it deems
appropriate reduce its compensation to the extent any Class'
expenses exceed such lower expense limitation as FSC may, by
notice to the Trust, voluntarily declare to be effective.
4. FSC will enter into separate written agreements with various
firms to provide certain of the services set forth in Paragraph 1
herein. FSC, in its sole discretion, may pay Financial
Institutions a periodic fee in respect of Shares owned from time
to time by their clients or customers. The schedules of such fees
and the basis upon which such fees will be paid shall be
determined from time to time by FSC in its sole discretion.
5. FSC will prepare reports to the Board of Trustees of the Trust on
a quarterly basis showing amounts expended hereunder including
amounts paid to Financial Institutions and the purpose for such
expenditures.
In consideration of the mutual covenants set forth in the
Distributor's Contract dated June 1, 1995 between Federated Equity Funds
(formerly, Federated Growth Trust) and Federated Securities Corp.,
Federated Equity Funds (formerly, Federated Growth Trust) executes and
delivers this Exhibit on behalf of the Federated Small Cap Strategies Fund,
and with respect to the Class B Shares thereof, first set forth in this
Exhibit.
Witness the due execution hereof this 1st day of June, 1995.
ATTEST: FEDERATED EQUITY FUNDS
(FORMERLY, FEDERATED GROWTH TRUST)
/s/John W. McGonigle By:/s/Glen R. Johnson
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
/s/Byron F. Bowman By:/s/Edward C. Gonzales
Secretary Executive Vice President
(SEAL)
Exhibit C
to the
Distributor's Contract
FEDERATED EQUITY FUNDS
(Formerly, Federated Growth Trust)
FEDERATED SMALL CAP STRATEGIES FUND
CLASS C SHARES
The following provisions are hereby incorporated and made part of the
Distributor's Contract dated June 1, 1995, between Federated Equity Funds
(formerly, Federated Growth Trust) and Federated Securities Corp. with
respect to the Class of shares set forth above.
1. The Trust hereby appoints FSC to engage in activities principally
intended to result in the sale of shares of the above-listed
Class ("Shares"). Pursuant to this appointment, FSC is authorized
to select a group of financial institutions ("Financial
Institutions") to sell Shares at the current offering price
thereof as described and set forth in the respective prospectuses
of the Trust.
2. During the term of this Agreement, the Trust will pay FSC for
services pursuant to this Agreement, a monthly fee computed at
the annual rate of .75 of 1% of the average aggregate net asset
value of the Shares held during the month. For the month in which
this Agreement becomes effective or terminates, there shall be an
appropriate proration of any fee payable on the basis of the
number of days that the Agreement is in effect during the month.
3. FSC may from time-to-time and for such periods as it deems
appropriate reduce its compensation to the extent any Class'
expenses exceed such lower expense limitation as FSC may, by
notice to the Trust, voluntarily declare to be effective.
4. FSC will enter into separate written agreements with various
firms to provide certain of the services set forth in Paragraph 1
herein. FSC, in its sole discretion, may pay Financial
Institutions a periodic fee in respect of Shares owned from time
to time by their clients or customers. The schedules of such fees
and the basis upon which such fees will be paid shall be
determined from time to time by FSC in its sole discretion.
5. FSC will prepare reports to the Board of Trustees of the Trust on
a quarterly basis showing amounts expended hereunder including
amounts paid to Financial Institutions and the purpose for such
expenditures.
In consideration of the mutual covenants set forth in the
Distributor's Contract dated June 1, 1995 between Federated Equity Funds
(formerly, Federated Growth Trust) and Federated Securities Corp.,
Federated Equity Funds (formerly, Federated Growth Trust) executes and
delivers this Exhibit on behalf of the Federated Small Cap Strategies Fund,
and with respect to the Class C Shares thereof, first set forth in this
Exhibit.
Witness the due execution hereof this 1st day of June, 1995.
ATTEST: FEDERATED EQUITY FUNDS
(FORMERLY, FEDERATED GROWTH TRUST)
/s/John W. McGonigle By: /s/Glen R. Johnson
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
/s/Byron F. Bowman By: /s/Edward C. Gonzales
Secretary Executive Vice President
(SEAL)
Exhibit D
to the
Distributor's Contract
FEDERATED EQUITY FUNDS
(Formerly, Federated Growth Trust)
FEDERATED GROWTH STRATEGIES FUND
CLASS A SHARES
In consideration of the mutual covenants set forth in the
Distributor's Contract dated June 1, 1995 between Federated Equity Funds
(formerly, Federated Growth Trust) and Federated Securities Corp.,
Federated Equity Funds (formerly, Federated Growth Trust) executes and
delivers this Exhibit with respect to the Class A Shares thereof, first set
forth in this Exhibit.
Witness the due execution hereof this 1st day of June, 1995.
ATTEST: FEDERATED EQUITY FUNDS
(FORMERLY, FEDERATED GROWTH TRUST)
/s/John W. McGonigle By:/s/Glen R. Johnson
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
/s/Byron F. Bowman By:/s/Edward C. Gonzales
Secretary Executive Vice President
(SEAL)
Exhibit E
to the
Distributor's Contract
FEDERATED EQUITY FUNDS
(Formerly, Federated Growth Trust)
FEDERATED GROWTH STRATEGIES FUND
CLASS B SHARES
The following provisions are hereby incorporated and made part of the
Distributor's Contract dated June 1, 1995, between Federated Equity Funds
(formerly, Federated Growth Trust) and Federated Securities Corp. with
respect to the Class of shares set forth above.
1. The Trust hereby appoints FSC to engage in activities principally
intended to result in the sale of shares of the above-listed
Class ("Shares"). Pursuant to this appointment, FSC is authorized
to select a group of financial institutions ("Financial
Institutions") to sell Shares at the current offering price
thereof as described and set forth in the respective prospectuses
of the Trust.
2. During the term of this Agreement, the Trust will pay FSC for
services pursuant to this Agreement, a monthly fee computed at
the annual rate of .75 of 1% of the average aggregate net asset
value of the Shares held during the month. For the month in which
this Agreement becomes effective or terminates, there shall be an
appropriate proration of any fee payable on the basis of the
number of days that the Agreement is in effect during the month.
3. FSC may from time-to-time and for such periods as it deems
appropriate reduce its compensation to the extent any Class'
expenses exceed such lower expense limitation as FSC may, by
notice to the Trust, voluntarily declare to be effective.
4. FSC will enter into separate written agreements with various
firms to provide certain of the services set forth in Paragraph 1
herein. FSC, in its sole discretion, may pay Financial
Institutions a periodic fee in respect of Shares owned from time
to time by their clients or customers. The schedules of such fees
and the basis upon which such fees will be paid shall be
determined from time to time by FSC in its sole discretion.
5. FSC will prepare reports to the Board of Trustees of the Trust on
a quarterly basis showing amounts expended hereunder including
amounts paid to Financial Institutions and the purpose for such
expenditures.
In consideration of the mutual covenants set forth in the
Distributor's Contract dated June 1, 1995 between Federated Equity Funds
(formerly, Federated Growth Trust) and Federated Securities Corp.,
Federated Equity Funds (formerly, Federated Growth Trust) executes and
delivers this Exhibit with respect to the Class B Shares thereof, first set
forth in this Exhibit.
Witness the due execution hereof this 1st day of June, 1995.
ATTEST: FEDERATED EQUITY FUNDS
(FORMERLY, FEDERATED GROWTH TRUST)
/s/John W. McGonigle By: /s/Glen R. Johnson
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
/s/Byron F. Bowman By: /s/Edward C. Gonzales
Secretary Executive Vice President
(SEAL)
Exhibit F
to the
Distributor's Contract
FEDERATED EQUITY FUNDS
(Formerly, Federated Growth Trust)
FEDERATED GROWTH STRATEGIES FUND
CLASS C SHARES
The following provisions are hereby incorporated and made part of the
Distributor's Contract dated June 1, 1995, between Federated Equity Funds
(formerly, Federated Growth Trust) and Federated Securities Corp. with
respect to the Class of shares set forth above.
1. The Trust hereby appoints FSC to engage in activities principally
intended to result in the sale of shares of the above-listed
Class ("Shares"). Pursuant to this appointment, FSC is authorized
to select a group of financial institutions ("Financial
Institutions") to sell Shares at the current offering price
thereof as described and set forth in the respective prospectuses
of the Trust.
2. During the term of this Agreement, the Trust will pay FSC for
services pursuant to this Agreement, a monthly fee computed at
the annual rate of .75 of 1% of the average aggregate net asset
value of the Shares held during the month. For the month in which
this Agreement becomes effective or terminates, there shall be an
appropriate proration of any fee payable on the basis of the
number of days that the Agreement is in effect during the month.
3. FSC may from time-to-time and for such periods as it deems
appropriate reduce its compensation to the extent any Class'
expenses exceed such lower expense limitation as FSC may, by
notice to the Trust, voluntarily declare to be effective.
4. FSC will enter into separate written agreements with various
firms to provide certain of the services set forth in Paragraph 1
herein. FSC, in its sole discretion, may pay Financial
Institutions a periodic fee in respect of Shares owned from time
to time by their clients or customers. The schedules of such fees
and the basis upon which such fees will be paid shall be
determined from time to time by FSC in its sole discretion.
5. FSC will prepare reports to the Board of Trustees of the Trust on
a quarterly basis showing amounts expended hereunder including
amounts paid to Financial Institutions and the purpose for such
expenditures.
In consideration of the mutual covenants set forth in the
Distributor's Contract dated June 1, 1995 between Federated Equity Funds
(formerly, Federated Growth Trust) and Federated Securities Corp.,
Federated Equity Funds (formerly, Federated Growth Trust) executes and
delivers this Exhibit with respect to the Class C Shares thereof, first set
forth in this Exhibit.
Witness the due execution hereof this 1st day of June, 1995.
ATTEST: FEDERATED EQUITY FUNDS
(FORMERLY, FEDERATED GROWTH TRUST)
/s/John W. McGonigle By: /s/Glen R. Johnson
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
/s/Byron F. Bowman By:/s/Edward C. Gonzales
Secretary Executive Vice President
(SEAL)
Exhibit G
to the
Distributor's Contract
FEDERATED EQUITY FUNDS
FEDERATED CAPITAL APPRECIATION STRATEGIES FUND
CLASS A SHARES
The following provisions are hereby incorporated and made part of the
Distributor's Contract dated June 1, 1995, between Federated Equity Funds
and Federated Securities Corp. with respect to the Class of shares set
forth above.
1. The Trust hereby appoints FSC to engage in activities principally
intended to result in the sale of shares of the above-listed
Class ("Shares"). Pursuant to this appointment, FSC is authorized
to select a group of financial institutions ("Financial
Institutions") to sell Shares at the current offering price
thereof as described and set forth in the respective prospectuses
of the Trust.
2. During the term of this Agreement, the Trust will pay FSC for
services pursuant to this Agreement, a monthly fee computed at
the annual rate of .25 of 1% of the average aggregate net asset
value of the Shares held during the month. For the month in which
this Agreement becomes effective or terminates, there shall be an
appropriate proration of any fee payable on the basis of the
number of days that the Agreement is in effect during the month.
3. FSC may from time-to-time and for such periods as it deems
appropriate reduce its compensation to the extent any Class'
expenses exceed such lower expense limitation as FSC may, by
notice to the Trust, voluntarily declare to be effective.
4. FSC will enter into separate written agreements with various
firms to provide certain of the services set forth in Paragraph 1
herein. FSC, in its sole discretion, may pay Financial
Institutions a periodic fee in respect of Shares owned from time
to time by their clients or customers. The schedules of such fees
and the basis upon which such fees will be paid shall be
determined from time to time by FSC in its sole discretion.
5. FSC will prepare reports to the Board of Trustees of the Trust on
a quarterly basis showing amounts expended hereunder including
amounts paid to Financial Institutions and the purpose for such
expenditures.
In consideration of the mutual covenants set forth in the
Distributor's Contract dated June 1, 1995 between Federated Equity Funds
and Federated Securities Corp., Federated Equity Funds executes and
delivers this Exhibit with respect to the Class A Shares thereof, first set
forth in this Exhibit.
Witness the due execution hereof this 1st day of September, 1995.
ATTEST: FEDERATED EQUITY FUNDS
/s/John W. McGonigle By: /s/Glen R. Johnson
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
/s/Byron F. Bowman By:/s/Edward C. Gonzales
Secretary Executive Vice President
(SEAL)
Exhibit H
to the
Distributor's Contract
FEDERATED EQUITY FUNDS
FEDERATED CAPITAL APPRECIATION STRATEGIES FUND
CLASS B SHARES
The following provisions are hereby incorporated and made part of the
Distributor's Contract dated June 1, 1995, between Federated Equity Funds
and Federated Securities Corp. with respect to the Class of shares set
forth above.
1. The Trust hereby appoints FSC to engage in activities principally
intended to result in the sale of shares of the above-listed
Class ("Shares"). Pursuant to this appointment, FSC is authorized
to select a group of financial institutions ("Financial
Institutions") to sell Shares at the current offering price
thereof as described and set forth in the respective prospectuses
of the Trust.
2. During the term of this Agreement, the Trust will pay FSC for
services pursuant to this Agreement, a monthly fee computed at
the annual rate of .75 of 1% of the average aggregate net asset
value of the Shares held during the month. For the month in which
this Agreement becomes effective or terminates, there shall be an
appropriate proration of any fee payable on the basis of the
number of days that the Agreement is in effect during the month.
3. FSC may from time-to-time and for such periods as it deems
appropriate reduce its compensation to the extent any Class'
expenses exceed such lower expense limitation as FSC may, by
notice to the Trust, voluntarily declare to be effective.
4. FSC will enter into separate written agreements with various
firms to provide certain of the services set forth in Paragraph 1
herein. FSC, in its sole discretion, may pay Financial
Institutions a periodic fee in respect of Shares owned from time
to time by their clients or customers. The schedules of such fees
and the basis upon which such fees will be paid shall be
determined from time to time by FSC in its sole discretion.
5. FSC will prepare reports to the Board of Trustees of the Trust on
a quarterly basis showing amounts expended hereunder including
amounts paid to Financial Institutions and the purpose for such
expenditures.
In consideration of the mutual covenants set forth in the
Distributor's Contract dated June 1, 1995 between Federated Equity Funds
and Federated Securities Corp., Federated Equity Funds executes and
delivers this Exhibit with respect to the Class B Shares thereof, first set
forth in this Exhibit.
Witness the due execution hereof this 1st day of September, 1995.
ATTEST: FEDERATED EQUITY FUNDS
/s/John W. McGonigle By: /s/Glen R. Johnson
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
/s/Byron F. Bowman By:/s/Edward C. Gonzales
Secretary Executive Vice President
(SEAL)
Exhibit I
to the
Distributor's Contract
FEDERATED EQUITY FUNDS
FEDERATED CAPITAL APPRECIATION STRATEGIES FUND
CLASS C SHARES
The following provisions are hereby incorporated and made part of the
Distributor's Contract dated June 1, 1995, between Federated Equity Funds
and Federated Securities Corp. with respect to the Class of shares set
forth above.
1. The Trust hereby appoints FSC to engage in activities principally
intended to result in the sale of shares of the above-listed
Class ("Shares"). Pursuant to this appointment, FSC is authorized
to select a group of financial institutions ("Financial
Institutions") to sell Shares at the current offering price
thereof as described and set forth in the respective prospectuses
of the Trust.
2. During the term of this Agreement, the Trust will pay FSC for
services pursuant to this Agreement, a monthly fee computed at
the annual rate of .75 of 1% of the average aggregate net asset
value of the Shares held during the month. For the month in which
this Agreement becomes effective or terminates, there shall be an
appropriate proration of any fee payable on the basis of the
number of days that the Agreement is in effect during the month.
3. FSC may from time-to-time and for such periods as it deems
appropriate reduce its compensation to the extent any Class'
expenses exceed such lower expense limitation as FSC may, by
notice to the Trust, voluntarily declare to be effective.
4. FSC will enter into separate written agreements with various
firms to provide certain of the services set forth in Paragraph 1
herein. FSC, in its sole discretion, may pay Financial
Institutions a periodic fee in respect of Shares owned from time
to time by their clients or customers. The schedules of such fees
and the basis upon which such fees will be paid shall be
determined from time to time by FSC in its sole discretion.
5. FSC will prepare reports to the Board of Trustees of the Trust on
a quarterly basis showing amounts expended hereunder including
amounts paid to Financial Institutions and the purpose for such
expenditures.
In consideration of the mutual covenants set forth in the
Distributor's Contract dated June 1, 1995 between Federated Equity Funds
and Federated Securities Corp., Federated Equity Funds executes and
delivers this Exhibit with respect to the Class C Shares thereof, first set
forth in this Exhibit.
Witness the due execution hereof this 1st day of September, 1995.
ATTEST: FEDERATED EQUITY FUNDS
/s/John W. McGonigle By: /s/Glen R. Johnson
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
/s/Byron F. Bowman By:/s/Edward C. Gonzales
Secretary Executive Vice President
(SEAL)
Exhibit J
to the
Distributor's Contract
FEDERATED EQUITY FUNDS
FEDERATED AGGRESSIVE GROWTH FUND
CLASS A SHARES
The following provisions are hereby incorporated and made part of the
Distributor's Contract dated June 1, 1995, between Federated Equity Funds
and Federated Securities Corp. with respect to the Class of shares set
forth above.
1. The Trust hereby appoints FSC to engage in activities principally
intended to result in the sale of shares of the above-listed
Class ("Shares"). Pursuant to this appointment, FSC is authorized
to select a group of financial institutions ("Financial
Institutions") to sell Shares at the current offering price
thereof as described and set forth in the respective prospectuses
of the Trust.
2. During the term of this Agreement, the Trust will pay FSC for
services pursuant to this Agreement, a monthly fee computed at
the annual rate of .25 of 1% of the average aggregate net asset
value of the Shares held during the month. For the month in which
this Agreement becomes effective or terminates, there shall be an
appropriate proration of any fee payable on the basis of the
number of days that the Agreement is in effect during the month.
3. FSC may from time-to-time and for such periods as it deems
appropriate reduce its compensation to the extent any Class'
expenses exceed such lower expense limitation as FSC may, by
notice to the Trust, voluntarily declare to be effective.
4. FSC will enter into separate written agreements with various
firms to provide certain of the services set forth in Paragraph 1
herein. FSC, in its sole discretion, may pay Financial
Institutions a periodic fee in respect of Shares owned from time
to time by their clients or customers. The schedules of such fees
and the basis upon which such fees will be paid shall be
determined from time to time by FSC in its sole discretion.
5. FSC will prepare reports to the Board of Trustees of the Trust on
a quarterly basis showing amounts expended hereunder including
amounts paid to Financial Institutions and the purpose for such
expenditures.
In consideration of the mutual covenants set forth in the
Distributor's Contract dated June 1, 1995 between Federated Equity Funds
and Federated Securities Corp., Federated Equity Funds executes and
delivers this Exhibit with respect to the Class A Shares thereof, first set
forth in this Exhibit.
Witness the due execution hereof this day of , 199.
ATTEST: FEDERATED EQUITY FUNDS
By:
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
By:
Secretary Executive Vice President
(SEAL)
Exhibit K
to the
Distributor's Contract
FEDERATED EQUITY FUNDS
FEDERATED AGGRESSIVE GROWTH FUND
CLASS B SHARES
The following provisions are hereby incorporated and made part of the
Distributor's Contract dated June 1, 1995, between Federated Equity Funds
and Federated Securities Corp. with respect to the Class of shares set
forth above.
1. The Trust hereby appoints FSC to engage in activities principally
intended to result in the sale of shares of the above-listed
Class ("Shares"). Pursuant to this appointment, FSC is authorized
to select a group of financial institutions ("Financial
Institutions") to sell Shares at the current offering price
thereof as described and set forth in the respective prospectuses
of the Trust.
2. During the term of this Agreement, the Trust will pay FSC for
services pursuant to this Agreement, a monthly fee computed at
the annual rate of .75 of 1% of the average aggregate net asset
value of the Shares held during the month. For the month in which
this Agreement becomes effective or terminates, there shall be an
appropriate proration of any fee payable on the basis of the
number of days that the Agreement is in effect during the month.
3. FSC may from time-to-time and for such periods as it deems
appropriate reduce its compensation to the extent any Class'
expenses exceed such lower expense limitation as FSC may, by
notice to the Trust, voluntarily declare to be effective.
4. FSC will enter into separate written agreements with various
firms to provide certain of the services set forth in Paragraph 1
herein. FSC, in its sole discretion, may pay Financial
Institutions a periodic fee in respect of Shares owned from time
to time by their clients or customers. The schedules of such fees
and the basis upon which such fees will be paid shall be
determined from time to time by FSC in its sole discretion.
5. FSC will prepare reports to the Board of Trustees of the Trust on
a quarterly basis showing amounts expended hereunder including
amounts paid to Financial Institutions and the purpose for such
expenditures.
In consideration of the mutual covenants set forth in the
Distributor's Contract dated June 1, 1995 between Federated Equity Funds
and Federated Securities Corp., Federated Equity Funds executes and
delivers this Exhibit with respect to the Class B Shares thereof, first set
forth in this Exhibit.
Witness the due execution hereof this day of , 199.
ATTEST: FEDERATED EQUITY FUNDS
By:
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
By:
Secretary Executive Vice President
(SEAL)
Exhibit I
to the
Distributor's Contract
FEDERATED EQUITY FUNDS
FEDERATED AGGRESSIVE GROWTH FUND
CLASS C SHARES
The following provisions are hereby incorporated and made part of the
Distributor's Contract dated June 1, 1995, between Federated Equity Funds
and Federated Securities Corp. with respect to the Class of shares set
forth above.
1. The Trust hereby appoints FSC to engage in activities principally
intended to result in the sale of shares of the above-listed
Class ("Shares"). Pursuant to this appointment, FSC is authorized
to select a group of financial institutions ("Financial
Institutions") to sell Shares at the current offering price
thereof as described and set forth in the respective prospectuses
of the Trust.
2. During the term of this Agreement, the Trust will pay FSC for
services pursuant to this Agreement, a monthly fee computed at
the annual rate of .75 of 1% of the average aggregate net asset
value of the Shares held during the month. For the month in which
this Agreement becomes effective or terminates, there shall be an
appropriate proration of any fee payable on the basis of the
number of days that the Agreement is in effect during the month.
3. FSC may from time-to-time and for such periods as it deems
appropriate reduce its compensation to the extent any Class'
expenses exceed such lower expense limitation as FSC may, by
notice to the Trust, voluntarily declare to be effective.
4. FSC will enter into separate written agreements with various
firms to provide certain of the services set forth in Paragraph 1
herein. FSC, in its sole discretion, may pay Financial
Institutions a periodic fee in respect of Shares owned from time
to time by their clients or customers. The schedules of such fees
and the basis upon which such fees will be paid shall be
determined from time to time by FSC in its sole discretion.
5. FSC will prepare reports to the Board of Trustees of the Trust on
a quarterly basis showing amounts expended hereunder including
amounts paid to Financial Institutions and the purpose for such
expenditures.
In consideration of the mutual covenants set forth in the
Distributor's Contract dated June 1, 1995 between Federated Equity Funds
and Federated Securities Corp., Federated Equity Funds executes and
delivers this Exhibit with respect to the Class C Shares thereof, first set
forth in this Exhibit.
Witness the due execution hereof this day of , 199.
ATTEST: FEDERATED EQUITY FUNDS
By:
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
By:
Secretary Executive Vice President
(SEAL)
Exhibit 15(i) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
FEDERATED EQUITY FUNDS
(FORMERLY, FEDERATED GROWTH TRUST)
DISTRIBUTION PLAN
This Distribution Plan ("Plan") is adopted as of June 1, 1995, by the
Board of Trustees of Federated Equity Funds (formerly, Federated Growth
Trust), (the "Trust"), a Massachusetts business trust with respect to
certain classes of shares ("Classes") of the portfolios of the Trust (the
"Funds") set forth in exhibits hereto.
1. This Plan is adopted pursuant to Rule 12b-1 under the Investment
Company Act of 1940, as amended ("Act"), so as to allow the Trust to
make payments as contemplated herein, in conjunction with the
distribution of Classes of the Funds ("Shares").
2. This Plan is designed to finance activities of Federated Securities
Corp. ("FSC") principally intended to result in the sale of Shares
to include: (a) providing incentives to financial institutions
("Financial Institutions") to sell Shares; (b) advertising and
marketing of Shares to include preparing, printing and distributing
prospectuses and sales literature to prospective shareholders and
with Financial Institutions; and (c) implementing and operating the
Plan. In compensation for services provided pursuant to this Plan,
FSC will be paid a fee in respect of the following Classes set forth
on the applicable exhibit.
3. Any payment to FSC in accordance with this Plan will be made
pursuant to the "Distributor's Contract" entered into by the Trust
and FSC. Any payments made by FSC to Financial Institutions with
funds received as compensation under this Plan will be made pursuant
to the "Financial Institution Agreement" entered into by FSC and the
Institution.
4. FSC has the right (i) to select, in its sole discretion, the
Financial Institutions to participate in the Plan and (ii) to
terminate without cause and in its sole discretion any Financial
Institution Agreement.
5. Quarterly in each year that this Plan remains in effect, FSC shall
prepare and furnish to the Board of Trustees of the Trust, and the
Board of Trustees shall review, a written report of the amounts
expended under the Plan and the purpose for which such expenditures
were made.
6. This Plan shall become effective with respect to each Class
(i) after approval by majority votes of: (a) the Trust's Board of
Trustees; (b) the members of the Board of the Trust who are not
interested persons of the Trust and have no direct or indirect
financial interest in the operation of the Trust's Plan or in any
related documents to the Plan ("Disinterested Trustees"), cast in
person at a meeting called for the purpose of voting on the Plan;
and (c) the outstanding voting securities of the particular Class ,
as defined in Section 2(a)(42) of the Act and (ii) upon execution of
an exhibit adopting this Plan with respect to such Class.
7. This Plan shall remain in effect with respect to each Class
presently set forth on an exhibit and any subsequent Classes added
pursuant to an exhibit during the initial year of this Plan for the
period of one year from the date set forth above and may be
continued thereafter if this Plan is approved with respect to each
Class at least annually by a majority of the Trust's Board of
Trustees and a majority of the Disinterested Trustees, cast in
person at a meeting called for the purpose of voting on such Plan.
If this Plan is adopted with respect to a Class after the first
annual approval by the Trustees as described above, this Plan will
be effective as to that Class upon execution of the applicable
exhibit pursuant to the provisions of paragraph 6(ii) above and will
continue in effect until the next annual approval of this Plan by
the Trustees and thereafter for successive periods of one year
subject to approval as described above.
8. All material amendments to this Plan must be approved by a vote of
the Board of Trustees of the Trust and of the Disinterested
Trustees, cast in person at a meeting called for the purpose of
voting on it.
9. This Plan may not be amended in order to increase materially the
costs which the Classes may bear for distribution pursuant to the
Plan without being approved by a majority vote of the outstanding
voting securities of the Classes as defined in Section 2(a)(42) of
the Act.
10. This Plan may be terminated with respect to a particular Class at
any time by: (a) a majority vote of the Disinterested Trustees; or
(b) a vote of a majority of the outstanding voting securities of the
particular Class as defined in Section 2(a)(42) of the Act; or (c)
by FSC on 60 days' notice to the Trust.
11. While this Plan shall be in effect, the selection and nomination of
Disinterested Trustees of the Trust shall be committed to the
discretion of the Disinterested Trustees then in office.
12. All agreements with any person relating to the implementation of
this Plan shall be in writing and any agreement related to this Plan
shall be subject to termination, without penalty, pursuant to the
provisions of Paragraph 10 herein.
13. This Plan shall be construed in accordance with and governed by the
laws of the Commonwealth of Pennsylvania.
EXHIBIT A
to the
Distribution Plan
FEDERATED EQUITY FUNDS
(formerly, Federated Growth Trust)
FEDERATED SMALL CAP STRATEGIES FUND
CLASS A SHARES
This Distribution Plan is adopted by Federated Equity Funds (formerly,
Federated Growth Trust) with respect to the Class of Shares of the
portfolio of the Trust set forth above.
In compensation for the services provided pursuant to this Plan, FSC
will be paid a monthly fee computed at the annual rate of .25 of 1% of the
average aggregate net asset value of the Class A Shares of Federated Small
Cap Strategies Fund held during the month.
Witness the due execution hereof this 1st day of June, 1995.
FEDERATED EQUITY FUNDS
(formerly, Federated Growth Trust)
By: /s/Glen R. Johnson
President
EXHIBIT B
to the
Distribution Plan
FEDERATED EQUITY FUNDS
(formerly, Federated Growth Trust)
FEDERATED SMALL CAP STRATEGIES FUND
CLASS B SHARES
This Distribution Plan is adopted by Federated Equity Funds (formerly,
Federated Growth Trust) with respect to the Class of Shares of the
portfolio of the Trust set forth above.
In compensation for the services provided pursuant to this Plan, FSC
will be paid a monthly fee computed at the annual rate of .75 of 1% of the
average aggregate net asset value of the Class B Shares of Federated Small
Cap Strategies Fund held during the month.
Witness the due execution hereof this 1st day of June, 1995.
FEDERATED EQUITY FUNDS
(formerly, Federated Growth Trust)
By: /s/Glen R. Johnson
President
EXHIBIT C
to the
Distribution Plan
FEDERATED EQUITY FUNDS
(formerly, Federated Growth Trust)
FEDERATED SMALL CAP STRATEGIES FUND
CLASS C SHARES
This Distribution Plan is adopted by Federated Equity Funds (formerly,
Federated Growth Trust) with respect to the Class of Shares of the
portfolio of the Trust set forth above.
In compensation for the services provided pursuant to this Plan, FSC
will be paid a monthly fee computed at the annual rate of .75 of 1% of the
average aggregate net asset value of the Class C Shares of Federated Small
Cap Strategies Fund held during the month.
Witness the due execution hereof this 1st day of June, 1995.
FEDERATED EQUITY FUNDS
(formerly, Federated Growth Trust)
By: /s/Glen R. Johnson
President
EXHIBIT D
to the
Distribution Plan
FEDERATED EQUITY FUNDS
(formerly, Federated Growth Trust)
FEDERATED GROWTH STRATEGIES FUND
CLASS B SHARES
This Distribution Plan is adopted by Federated Equity Funds (formerly,
Federated Growth Trust) with respect to the Class of Shares of the Trust
set forth above.
In compensation for the services provided pursuant to this Plan, FSC
will be paid a monthly fee computed at the annual rate of .75 of 1% of the
average aggregate net asset value of the Class B Shares of Federated Growth
Strategies Fund held during the month.
Witness the due execution hereof this 1st day of June, 1995.
FEDERATED EQUITY FUNDS
(formerly, Federated Growth Trust)
By: /s/Glen R. Johnson
President
EXHIBIT E
to the
Distribution Plan
FEDERATED EQUITY FUNDS
(formerly, Federated Growth Trust)
FEDERATED GROWTH STRATEGIES FUND
CLASS C SHARES
This Distribution Plan is adopted by Federated Equity Funds (formerly,
Federated Growth Trust) with respect to the Class of Shares of the Trust
set forth above.
In compensation for the services provided pursuant to this Plan, FSC
will be paid a monthly fee computed at the annual rate of .75 of 1% of the
average aggregate net asset value of the Class C Shares of Federated Growth
Strategies Fund held during the month.
Witness the due execution hereof this 1st day of June, 1995.
FEDERATED EQUITY FUNDS
(formerly, Federated Growth Trust)
By: /s/Glen R. Johnson
President
EXHIBIT F
to the
Distribution Plan
FEDERATED EQUITY FUNDS
(formerly, Federated Growth Trust)
FEDERATED CAPITAL APPRECIATION FUND
CLASS A SHARES
This Distribution Plan is adopted by Federated Equity Funds with
respect to the Class of Shares of the Trust set forth above.
In compensation for the services provided pursuant to this Plan, FSC
will be paid a monthly fee computed at the annual rate of .25 of 1% of the
average aggregate net asset value of the Class A Shares of Federated
Capital Appreciation Fund held during the month.
Witness the due execution hereof this 1st day of September, 1995.
FEDERATED EQUITY FUNDS
(formerly, Federated Growth Trust)
By: /s/Glen R. Johnson
President
EXHIBIT G
to the
Distribution Plan
FEDERATED EQUITY FUNDS
(formerly, Federated Growth Trust)
FEDERATED CAPITAL APPRECIATION FUND
CLASS B SHARES
This Distribution Plan is adopted by Federated Equity Funds with
respect to the Class of Shares of the Trust set forth above.
In compensation for the services provided pursuant to this Plan, FSC
will be paid a monthly fee computed at the annual rate of .75 of 1% of the
average aggregate net asset value of the Class B Shares of Federated
Capital Appreciation Fund held during the month.
Witness the due execution hereof this 1st day of September, 1995.
FEDERATED EQUITY FUNDS
(formerly, Federated Growth Trust)
By: /s/Glen R. Johnson
President
EXHIBIT H
to the
Distribution Plan
FEDERATED EQUITY FUNDS
(formerly, Federated Growth Trust)
FEDERATED CAPITAL APPRECIATION FUND
CLASS C SHARES
This Distribution Plan is adopted by Federated Equity Funds with
respect to the Class of Shares of the Trust set forth above.
In compensation for the services provided pursuant to this Plan, FSC
will be paid a monthly fee computed at the annual rate of .75 of 1% of the
average aggregate net asset value of the Class C Shares of Federated
Capital Appreciation Fund held during the month.
Witness the due execution hereof this 1st day of September, 1995.
FEDERATED EQUITY FUNDS
(formerly, Federated Growth Trust)
By: /s/Glen R. Johnson
President
EXHIBIT I
to the
Distribution Plan
FEDERATED EQUITY FUNDS
(formerly, Federated Growth Trust)
FEDERATED AGGRESSIVE GROWTH FUND
CLASS A SHARES
This Distribution Plan is adopted by Federated Equity Funds with
respect to the Class of Shares of the Trust set forth above.
In compensation for the services provided pursuant to this Plan, FSC
will be paid a monthly fee computed at the annual rate of .25 of 1% of the
average aggregate net asset value of the Class A Shares of Federated
Capital Appreciation Fund held during the month.
Witness the due execution hereof this day of , 199.
FEDERATED EQUITY FUNDS
(formerly, Federated Growth Trust)
By:
President
EXHIBIT J
to the
Distribution Plan
FEDERATED EQUITY FUNDS
(formerly, Federated Growth Trust)
FEDERATED AGGRESSIVE GROWTH FUND
CLASS B SHARES
This Distribution Plan is adopted by Federated Equity Funds with
respect to the Class of Shares of the Trust set forth above.
In compensation for the services provided pursuant to this Plan, FSC
will be paid a monthly fee computed at the annual rate of .75 of 1% of the
average aggregate net asset value of the Class B Shares of Federated
Capital Appreciation Fund held during the month.
Witness the due execution hereof this day of , 199.
FEDERATED EQUITY FUNDS
(formerly, Federated Growth Trust)
By:
President
EXHIBIT K
to the
Distribution Plan
FEDERATED EQUITY FUNDS
(formerly, Federated Growth Trust)
FEDERATED AGGRESSIVE GROWTH FUND
CLASS C SHARES
This Distribution Plan is adopted by Federated Equity Funds with
respect to the Class of Shares of the Trust set forth above.
In compensation for the services provided pursuant to this Plan, FSC
will be paid a monthly fee computed at the annual rate of .75 of 1% of the
average aggregate net asset value of the Class C Shares of Federated
Capital Appreciation Fund held during the month.
Witness the due execution hereof this day of , 199.
FEDERATED EQUITY FUNDS
(formerly, Federated Growth Trust)
By:
President
Exbibit 19 under Rule N-1A
Exhibit 24 under Item 601/Reg.S/K
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints the Secretary and Assistant Secretary of FEDERATED EQUITY FUNDS
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 EDGAR; and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorney-in-fact and agents,
and each of them, full power and authority to sign and perform each and
every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as each of them might or
could do in person, hereby ratifying and confirming all that said attorney-
in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
SIGNATURES TITLE DATE
/s/ John F. Donahue Chairman and Director August 20, 1996
John F. Donahue (Chief Executive Officer)
/s/ Glen R. Johnson President August 20, 1996
Glen R. Johnson
/s/ John W. McGonigle Treasurer and ExecutiveAugust 20, 1996
John W. McGonigle Vice President
(Principal Financial and
Accounting Officer)
/s/ Thomas G. Bigley Trustee August 20, 1996
April 28, 1995
Thomas G. Bigley
/s/ John T. Conroy Trustee August 20, 1996
John T. Conroy, Jr.
/s/ William J. Copeland Trustee August 20, 1996
William J. Copeland
SIGNATURES TITLE DATE
/s/ James E. Dowd Trustee August 20, 1996
James E. Dowd
/s/ Lawrence D. Ellis, M.D. Trustee August 20, 1996
Lawrence D. Ellis, M.D.
/s/ Edward L. Flaherty, Jr. Trustee August 20, 1996
Edward L. Flaherty, Jr.
/s/ Peter E. Madden Trustee August 20, 1996
Peter E. Madden
/s/ Gregor F. Meyer Trustee August 20, 1996
Gregor F. Meyer
/s/ John E. Murray, Jr. Trustee August 20, 1996
John E. Murray, Jr.
/s/ Wesley W. Posvar Trustee August 20, 1996
Wesley W. Posvar
/s/ Marjorie P. Smuts Trustee August 20, 1996
Marjorie P. Smuts
Sworn to and subscribed before me this 20th day of August, 1996
/s/ Marie M. Hamm
Notary Public
Notarial Seal
Marie M. Hamm, Notary Public
Plum Boro, Allegheny County
My Commission Expires Sept, 16, 1996
Member, Pennsylvania Association of Notaries
