1933 Act File No. 2-98237
1940 Act File No. 811-4314
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. 20 X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF
1940 X
Amendment No. 18 X
INTERMEDIATE MUNICIPAL TRUST
(Exact Name of Registrant as Specified in Charter)
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
John W. McGonigle, Esquire,
Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
X on July 31, 1994, pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)
on pursuant to paragraph (a) of Rule 485.
Registrant has filed with the Securities and Exchange
Commission a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940, and:
X filed the Notice required by that Rule on July 15, 1994;
or
intends to file the Notice required by that Rule on or
about ____________; or
during the most recent fiscal year did not sell any
securities pursuant to Rule 24f-2 under the Investment
Company Act of 1940, and, pursuant to Rule 24f-2(b)(2), need
not file the Notice.
Copies to:
Thomas J. Donnelly, Esquire Charles H. Morin, Esquire
Houston, Houston & Donnelly Dickstein, Shapiro & Morin,
L.L.P.
2510 Centre City Tower 2101 L Street, N.W.
650 Smithfield Street Washington, D.C. 20037
Pittsburgh, Pennsylvania 15222
CROSS REFERENCE SHEET
This Amendment to the Registration Statement of
INTERMEDIATE MUNICIPAL TRUST which consists of three
portfolios: (1) Pennsylvania Intermediate Municipal Trust; (2)
Ohio Intermediate Municipal Trust; and (3) Intermediate
Municipal Trust consisting of two classes of shares (a)
Institutional Shares and (b) Institutional Service Shares, is
comprised of the following:
PART A. INFORMATION REQUIRED IN A PROSPECTUS.
Prospectus Heading
(Rule 404(c) Cross Reference)
Item 1. Cover Page Cover Page.
Item 2. Synopsis Summary of Fund Expenses
(1,2,3a,3b).
Item 3. Condensed Financial
Information Financial Highlights
(1,2,3a,3b); Performance
Information (1,2,3a, 3b).
Item 4. General Description of
Registrant General Information
(1,2,3a,3b); Investment
Information (1,2,3a,3b);
Investment Objective
(1,2,3a,3b); Investment
Policies (1,2,3a,3b); Municipal
Securities (1,2,3a,3b);
Investment Risks (1,2,3a,3b);
Investment Limitations
(1,2,3a,3b).
Item 5. Management of the Fund Trust Information (1,2,3a,3b);
Management of the Trust
(1,2,3a,3b); Distribution of
Fund Shares (1,2,3a,3b);
Distribution of Institutional
Shares (3a); Distribution of
Institutional Service Shares
(3b); Expenses of the Fund and
Institutional Shares (3a);
Expenses of the Fund and
Institutional Service Shares
(3b); Administration of the
Fund (1,2,3a,3b).
Item 6. Capital Stock and Other
Securities Dividends and Distributions
(1,2,3a,3b); Tax Information
(1,2,3a,3b); Federal Income Tax
(1,2,3a,3b); Pennsylvania Taxes
(1); State of Ohio Income Taxes
(2); Capital Gains(1,2,3a,3b);
Shareholder
Inforamtion(1,2,3a,3b); Voting
Rights(1,2,3a,3b);
Massachusetts Partnership
Law(1,2,3a,3b).
Item 7. Purchase of Securities Being
Offered Investing in the Fund
(1,2,3a,3b); Share Purchases
(1,2,3a,3b); Minimum Investment
Required (1,2,3a,3b); What
Shares Cost (1,2,3a,3b);
Exchanging Securities for Fund
Shares (1,2,3a,3b);
Subaccounting Services
(1,2,3a,3b); Certificates and
Confirmations (1,2,3a,3b); Net
Asset Value (1,2,3a,3b).
Item 8. Redemption or Repurchase Redeeming Shares (1,2,3a,3b);
Telephone Redemption
(1,2,3a,3b); Written Requests
(1,2,3a,3b); By Mail
(1,2,3a,3b); Accounts With Low
Balances (1,2,3a,3b).
Item 9. Pending Legal Proceedings None.
PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL
INFORMATION
Item 10. Cover Page Cover Page (1,2,3).
Item 11. Table of Contents Table of Contents (1,2,3).
Item 12. General Information and
History General Information (1,2,3).
Item 13. Investment Objectives and
Policies Investment Objective and
Policies (1,2,3).
Item 14. Management of the Fund Trust Management (1,2,3).
Item 15. Control Persons and Principal
Holders of Securities Not Applicable.
Item 16. Investment Advisory and Other
Services Investment Advisory Services
(1,2,3); Administrative
Services (1,2,3).
Item 17. Brokerage Allocation Brokerage Transactions (1,2,3).
Item 18. Capital Stock and Other
Securities Not Applicable.
Item 19. Purchase, Redemption and
Pricing of Securities Being
Offered Purchasing Shares (1,2,3);
Determining Net Asset Value
(1,2,3); Redeeming Shares
(1,2,3).
Item 20. Tax Status Tax Status (1,2,3).
Item 21. Underwriters Not applicable.
Item 22. Calculation of Yield
Total Return; (1) Yield
(1,2,3); Tax Equivalent Yield
(1,2,3); Performance
Comparisons (1,2,3).
Item 23. Financial Statements Filed in Part A.
OHIO INTERMEDIATE MUNICIPAL TRUST
(A PORTFOLIO OF INTERMEDIATE MUNICIPAL TRUST)
PROSPECTUS
The Shares of Ohio Intermediate Municipal Trust (the "Fund") offered by this
prospectus represent interests in a non-diversified portfolio of securities
which is one of a series of investment portfolios in Intermediate Municipal
Trust (the "Trust"), an open-end management investment company (a mutual fund).
The investment objective of the Fund is to provide current income which is
exempt from federal regular income tax and the personal income taxes imposed by
the State of Ohio. The Fund invests primarily in a portfolio of Ohio municipal
securities, including securities of states, territories and possessions of the
United States which are not issued by or on behalf of the State of Ohio or its
political subdivisions, but which are exempt from federal regular income tax and
Ohio state personal income taxes.
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 THESE 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 July 31,
1994, with the Securities and Exchange Commission. The information contained in
the Statement of Additional Information is incorporated by reference into this
prospectus. You may request a copy of the Statement of Additional Information
free of charge by calling 1-800-235-4669. To obtain other information or to make
inquiries about the Fund, contact the Fund at the address listed in the back of
this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus dated July 31, 1994
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
SUMMARY OF FUND EXPENSES 1
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS 2
- ------------------------------------------------------
GENERAL INFORMATION 3
- ------------------------------------------------------
INVESTMENT INFORMATION 3
- ------------------------------------------------------
Investment Objective 3
Investment Policies 3
Acceptable Investments 3
Average Maturity 4
Characteristics 4
Participation Interests 4
Variable Rate Municipal Securities 4
Municipal Leases 5
When-Issued and Delayed
Delivery Transactions 5
Temporary Investments 5
Ohio Municipal Securities 6
Investment Risks 6
Non-Diversification 6
Investment Limitations 7
INTERMEDIATE MUNICIPAL TRUST
INFORMATION 7
- ------------------------------------------------------
Management of the Trust 7
Board of Trustees 7
Investment Adviser 7
Advisory Fees 7
Adviser's Background 8
Distribution of Fund Shares 8
Administration of the Fund 8
Administrative Services 8
Shareholder Services Plan 9
Other Payments to Financial Institutions 9
Custodian 9
Transfer Agent and Dividend
Disbursing Agent 9
Legal Counsel 9
Independent Public Accountants 9
Expenses of the Fund 9
NET ASSET VALUE 10
- ------------------------------------------------------
INVESTING IN THE FUND 10
- ------------------------------------------------------
Share Purchases 10
By Wire 10
By Mail 10
Subaccounting Services 10
Minimum Investment Required 11
What Shares Cost 11
Exchanging Securities for Fund Shares 11
Certificates and Confirmations 11
Dividends and Distributions 12
Capital Gains 12
REDEEMING SHARES 12
- ------------------------------------------------------
By Telephone 12
By Mail 12
Signatures 13
Accounts with Low Balances 13
SHAREHOLDER INFORMATION 13
- ------------------------------------------------------
Voting Rights 13
Massachusetts Partnership Law 14
TAX INFORMATION 14
- ------------------------------------------------------
Federal Income Tax 14
Ohio Taxes 15
Other State and Local Taxes 15
PERFORMANCE INFORMATION 16
- ------------------------------------------------------
FINANCIAL STATEMENTS 17
- ------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 26
- ------------------------------------------------------
ADDRESSES Inside Back Cover
- ------------------------------------------------------
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)................................................. None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price)................................................. None
Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds as applicable)................................ None
Redemption Fee........................................................................ None
Exchange Fee.......................................................................... None
ANNUAL FUND OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver)(1)...................................................... 0.00%
12b-1 Fee............................................................................. None
Total Other Expenses (after expense reimbursement).................................... 0.45%
Shareholder Services Fee(2)............................................. 0.05%
Total Fund Operating Expenses(3)............................................ 0.45%
</TABLE>
(1) The management fee has been reduced to reflect the voluntary waiver of the
management fee. The adviser can terminate this voluntary waiver at any time at
its sole discretion. The maximum management fee is 0.50%.
(2) The maximum shareholder services fee is 0.25%.
(3) The Total Fund Operating Expenses in the table above are based on expenses
expected during the fiscal year ending May 31, 1995. The Total Fund Operating
Expenses were 0.24% for the fiscal year ended May 31, 1994 and were 3.31% absent
the voluntary waiver of the Management Fee and the voluntary reimbursement of
certain other operating expenses.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF THE FUND WILL BEAR, EITHER
DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE VARIOUS COSTS AND
EXPENSES, SEE "INVESTING IN THE FUND" AND "INTERMEDIATE MUNICIPAL TRUST
INFORMATION." WIRE-TRANSFERRED REDEMPTIONS OF LESS THAN $5,000 MAY BE SUBJECT TO
ADDITIONAL FEES.
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years
- --------------------------------------------------------------------------- ------ -------
<S> <C> <C>
You would pay the following expenses on a $1,000 investment assuming (1) 5%
annual return and (2) redemption at the end of each time period.......... $5 $14
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
OHIO INTERMEDIATE MUNICIPAL TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Reference is made to the Report of Independent Public Accountants on page 26.
<TABLE>
<CAPTION>
YEAR ENDED
MAY 31, 1994*
-------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
- -------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------------
Net investment income 0.22
- -------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.47)
- ------------------------------------------------------------------------- ---------
Total from investment operations (0.25)
- -------------------------------------------------------------------------
LESS DISTRIBUTIONS
- -------------------------------------------------------------------------
Dividends to shareholders from net investment income (0.22)
- ------------------------------------------------------------------------- ---------
NET ASSET VALUE, END OF PERIOD $ 9.53
- ------------------------------------------------------------------------- ---------
TOTAL RETURN** (2.52)%
- -------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------------------------------------------
Expenses 0.24%(a)
- -------------------------------------------------------------------------
Net investment income 4.69%(a)
- -------------------------------------------------------------------------
Expense waiver/reimbursement (b) 3.07%(a)
- -------------------------------------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------------------------------------
Net assets, end of period (000 omitted) $ 3,379
- -------------------------------------------------------------------------
Portfolio turnover rate 48%
- -------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from December 2, 1993 (date of initial
public investment) to May 31, 1994.
** Based on net asset value, which does not reflect the sales load or contingent
deferred sales charge, if applicable.
<TABLE>
<C> <S>
(a) Computed on an annualized basis.
(b) This voluntary expense decrease is reflected in both the expense and net investment
income ratios shown above (Note 4).
</TABLE>
(See Notes which are an integral part of the Financial Statements)
Further information about the Fund's performance is contained in the Fund's
annual report for the period ended May 31, 1994, which can be obtained free of
charge.
GENERAL INFORMATION
- --------------------------------------------------------------------------------
Intermediate Municipal Trust was established as a Massachusetts business trust
under a Declaration of Trust dated May 31, 1985. The Declaration of Trust
permits the Trust to offer separate series of shares of beneficial interest
representing interests in separate portfolios of securities. The shares in any
one portfolio may be offered in separate classes.
Shares of the Fund are designed for the investment of moneys generally held by
financial institutions in a fiduciary capacity. A minimum initial investment of
$25,000 over a 90-day period is required. The Fund is not likely to be a
suitable investment for non-Ohio taxpayers or retirement plans since it intends
to invest primarily in Ohio municipal securities which are not likely to produce
competitive after-tax yields for such persons and entities compared to other
investments.
Shares are sold and redeemed at net asset value without a sales charge imposed
by the Fund.
INVESTMENT INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide current income exempt from
federal regular income tax and the personal income taxes imposed by the State of
Ohio. Interest income of the Fund that is exempt from federal regular income tax
and Ohio state personal income tax retains its tax-free status when distributed
to the Fund's shareholders. The Fund pursues its investment objective by
investing at least 80% of its net assets in a diversified portfolio of Ohio
municipal securities. The portfolio has a dollar-weighted average maturity of
not less than three or more than ten years. 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. The investment objective
and the policy stated above cannot be changed without approval of shareholders.
INVESTMENT POLICIES
The investment policies described below may be changed by the Trustees without
shareholder approval. Shareholders will be notified before any material change
in these policies becomes effective.
ACCEPTABLE INVESTMENTS. The Ohio municipal securities in which the Fund invests
are:
- obligations issued by or on behalf of the state of Ohio, its political
subdivisions, or agencies;
- debt obligations of any state, territory, or possession of the United
States, including the District of Columbia, or any political subdivision
of any of these; and
- participation interests, as described below, in any of the above
obligations,
the interest from which is, in the opinion of bond counsel for the issuers or in
the opinion of officers of the Fund and/or the investment adviser to the Fund,
exempt from both federal regular income tax and the personal income taxes
imposed by the State of Ohio.
The prices of fixed income securities fluctuate inversely to the direction of
interest rates.
AVERAGE MATURITY. The dollar-weighted average maturity of the Fund's
portfolio of Ohio municipal securities will not be less than three years or
more than ten years. For purposes of determining the dollar-weighted
average portfolio maturity of the Fund's portfolio, the maturity of a
municipal security will be its ultimate maturity, unless it is probable
that the issuer of the security will take advantage of maturity-shortening
devices such as a call, refunding, or redemption provision, in which case
the maturity date will be the date on which it is probable that the
security will be called, refunded, or redeemed. If the municipal security
includes the right to demand payment, the maturity of the security for
purposes of determining the Fund's dollar-weighted average portfolio
maturity will be the period remaining until the principal amount of the
security can be recovered by exercising the right to demand payment.
CHARACTERISTICS. The municipal securities in which the Fund invests are:
- rated within the three highest ratings for municipal securities by
Moody's Investors Service, Inc. ("Moody's") (Aaa, Aa, or A), Standard &
Poor's Corporation ("Standard & Poor's") (AAA, AA, or A) or Fitch
Investors Service, Inc. ("Fitch") (AAA, AA, or A);
- guaranteed at the time of purchase by the U.S. government as to the
payment of principal and interest;
- fully collateralized by an escrow of U.S. government securities or other
securities acceptable to the Fund's adviser;
- rated at the time of purchase within Moody's highest short-term municipal
obligation rating (MIG1/VMIG1) or Moody's highest municipal commercial
paper rating (P-1) or Standard & Poor's highest municipal commercial
paper rating (SP-1);
- unrated if, at the time of purchase, other municipal securities of that
issuer are rated A or better by Moody's, Standard & Poor's or Fitch; or
- unrated if determined to be of equivalent quality to one of the foregoing
rating categories by the Fund's investment adviser.
If a security is subsequently downgraded, the adviser will determine
whether it continues to be an acceptable investment; if not, the security
will be sold. A description of the ratings categories is contained in the
Appendix to the Statement of Additional Information.
PARTICIPATION INTERESTS. The Fund may purchase participation interests from
financial institutions such as commercial banks, savings and loan
associations, and insurance companies. These participation interests give
the Fund an undivided interest in Ohio municipal securities. The financial
institutions from which the Fund purchases participation interests
frequently provide or secure irrevocable letters of credit or guarantees to
assure that the participation interests are of high quality. The Board of
Trustees (the "Trustees") of the Trust will determine that participation
interests meet the prescribed quality standards for the Fund.
VARIABLE RATE MUNICIPAL SECURITIES. Some of the Ohio municipal securities
which the Fund purchases may have variable interest rates. Variable
interest rates are ordinarily stated as a percentage of a published
interest rate, interest rate index, or a similar standard, such as the
91-day U.S. Treasury bill rate. Many variable rate municipal securities are
subject to payment of principal on demand by the Fund in not more than
seven days. All variable rate municipal securities will meet the quality
standards for the Fund. The Fund's investment adviser has been instructed
by the
Trustees to monitor the pricing, quality, and liquidity of the variable
rate municipal securities, including participation interests held by the
Fund on the basis of published financial information and reports of the
rating agencies and other analytical services.
MUNICIPAL LEASES. Also included within the general category of municipal
securities are certain lease obligations or installment purchase contract
obligations and participations therein (hereinafter collectively called
"lease obligations") of municipal authorities or entities. Although lease
obligations do not constitute general obligations of the municipality for
which the municipality's taxing power is pledged, a lease obligation is
ordinarily backed by the municipality's covenant to budget for, appropriate
and make the payments due under the lease obligation. Interest on lease
obligations is tax-exempt to the same extent as if the municipality had
issued debt obligations to finance the underlying project or purchase.
However, certain lease obligations contain "non-appropriation" clauses
which provide that the municipality has no obligation to make lease or
installment purchase payments in future years unless money is appropriated
for such purpose on a yearly basis. In addition to the "non-appropriation"
risk, these securities represent a relatively new type of financing that
has not yet developed the depth of marketability associated with more
conventional bonds and some lease obligations may be illiquid. Although
"non-appropriation" lease obligations are generally secured by the leased
property, disposition of the property in the event of foreclosure might
prove difficult. In addition, the tax treatment of such obligations in the
event of "non-appropriation" is unclear. The Fund does not invest more than
10% of its total assets in lease obligations that contain
"non-appropriation" clauses.
If the Fund purchases unrated municipal leases, the Trustees will be
responsible for determining, on an ongoing basis, the credit quality of
such leases and the likelihood that such lease will not be cancelled.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase Ohio
municipal securities on a when-issued or delayed delivery basis. In when-issued
and delayed delivery transactions, the Fund relies on the seller to complete the
transaction. The seller's failure to complete the transaction may cause the Fund
to miss a price or yield considered to be advantageous.
TEMPORARY INVESTMENTS. The Fund normally invests in Ohio municipal securities,
as described above. However, from time to time, when the investment adviser
determines that market conditions call for a temporary defensive posture, the
Fund may invest in short-term non-Ohio municipal tax-exempt obligations or
taxable temporary investments. These temporary investments include: notes issued
by or on behalf of municipal or corporate issuers; obligations issued or
guaranteed by the U.S. government, its agencies, or instrumentalities; other
debt securities; commercial paper; certificates of deposit of banks; and
repurchase agreements (arrangements in which the organization selling the Fund a
bond or temporary investment agrees at the time of sale to repurchase it at a
mutually agreed upon time and price).
There are no rating requirements applicable to temporary investments with the
exception of temporary municipal securities, which are subject to the same
rating requirements as all other municipal securities in which the Fund invests.
However, the investment adviser will limit temporary investments to those it
considers to be of comparable quality to the acceptable investments in the Fund.
Although the Fund is permitted to make taxable, temporary investments, there is
no current intention of generating income subject to federal regular income tax
or Ohio state personal income taxes.
OHIO MUNICIPAL SECURITIES
Ohio municipal securities are generally issued to finance public works, such as
airports, bridges, highways, housing, hospitals, mass transportation projects,
schools, streets, and water and sewer works. They are also issued to repay
outstanding obligations, to raise funds for general operating expenses, and to
make loans to other public institutions and facilities.
Ohio municipal securities include industrial development bonds issued by or on
behalf of public authorities to provide financing aid to acquire sites or
construct and equip facilities for privately or publicly owned corporations. The
availability of this financing encourages these corporations to locate within
the sponsoring communities and thereby increases local employment.
The two principal classifications of municipal securities are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its full faith and credit and taxing power for the payment of
principal and interest. However, interest on and principal of revenue bonds are
payable only from the revenue generated by the facility financed by the bond or
other specified sources of revenue. Revenue bonds do not represent a pledge of
credit or create any debt of or charge against the general revenues of a
municipality or public authority. Industrial development bonds are typically
classified as revenue bonds.
INVESTMENT RISKS
Yields on Ohio municipal securities depend on a variety of factors, including:
the general conditions of the municipal bond market; the size of the particular
offering; the maturity of the obligations; and the rating of the issue. Further,
any adverse economic conditions or developments affecting the state of Ohio or
its municipalities could impact the Fund's portfolio. The State of Ohio and
certain underlying municipalities face potential economic problems over the
longer term. The state economy has grown more slowly than that of the nation as
a whole, resulting in a gradual erosion of its relative economic affluence. The
causes of this relative decline are varied and complex, involving in many cases
national and international demographic and economic trends beyond the influence
of the state. The ability of the Fund to achieve its investment objective also
depends on the continuing ability of the issuers of Ohio municipal securities
and participation interests, or the guarantors of either, to meet their
obligations for the payment of interest and principal when due. Investing in
Ohio municipal securities which meet the Fund's quality standards may not be
possible if the State of Ohio or its municipalities do not maintain their
current credit ratings. In addition, certain Ohio constitutional amendments,
legislative measures, executive orders, administrative regulations, and voter
initiatives could result in adverse consequences affecting Ohio municipal
securities.
NON-DIVERSIFICATION
The Fund is a non-diversified investment portfolio. As such, there is no limit
on the percentage of assets which can be invested in any single issuer. An
investment in the Fund, therefore, will entail greater risk than would exist in
a diversified portfolio of securities because the higher percentage of
investments among fewer issuers may result in greater fluctuation in the total
market value of the Fund's portfolio. Any economic, political, or regulatory
developments affecting the value of the securities in the Fund's
portfolio will have a greater impact on the total value of the portfolio than
would be case if the portfolio were diversified among more issuers.
The Fund intends to comply with Subchapter M of the Internal Revenue Code, as
amended. This undertaking requires that at the end of each quarter of the
taxable year, with regard to at least 50% of the Fund's total assets, no more
than 5% of its total assets are invested in the securities of a single issuer;
beyond that no more than 25% of its total assets are invested in the securities
of a single issuer.
INVESTMENT LIMITATIONS
The Fund will not 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) or pledge
securities except, under certain circumstances, the Fund may borrow up to
one-third of the value of its total assets and pledge up to 10% of the value of
those assets to secure such borrowings. The Fund does not intend to make any
borrowings during the coming fiscal year.
The above investment limitation cannot be changed without shareholder approval.
The following limitation, however, can be changed by the Trustees without
shareholder approval. Shareholders will be notified before any material change
in this limitation becomes effective.
The Fund will not invest more than 15% of its net assets in securities which are
illiquid, including repurchase agreements providing for settlement in more than
seven days after notice, and restricted securities determined by the Trustees
not to be liquid.
INTERMEDIATE MUNICIPAL TRUST INFORMATION
- --------------------------------------------------------------------------------
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees. The Trustees are
responsible for managing the business affairs of the Trust and for exercising
all of the powers of the Trust, 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 (the "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 .50 of 1% of the Fund's average daily net assets. Under the investment
advisory contract, the Adviser may reimburse the Fund the amount, limited to
the amount of the advisory fee, by which the Fund's aggregate annual
operating expenses, including its investment advisory fee but excluding
interest, taxes, brokerage commissions, insurance premiums, expenses of
registering and qualifying the Fund and its shares under federal and state
laws, expenses of withholding taxes, and extraordinary expenses, exceed a
certain percentage of its average daily net assets. 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 reimbursement of expenses at
any time at 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.
Jonathan C. Conley has been the Fund's co-portfolio manager since the
Fund's inception. Mr. Conley joined Federated Investors in 1979 and has
been a Vice President of the Adviser since 1982. Mr. Conley is a Chartered
Financial Analyst and received his M.B.A. in Finance from the University of
Virginia.
J. Scott Albrecht has been the Fund's co-portfolio manager since the Fund's
inception. Mr. Albrecht joined Federated Investors in 1989 and has been an
Assistant Vice President of the Adviser since 1992. From 1989 until 1991,
Mr. Albrecht acted as an investment analyst. Mr. Albrecht was a municipal
credit analyst at Mellon Bank, N.A. from 1985 until 1989. Mr. Albrecht is a
Chartered Financial Analyst and received his M.S. in Management from
Carnegie Mellon University.
Federated Management and other subsidiaries of Federated Investors serve as
investment advisers to a number of investment companies and private
accounts. Certain other subsidiaries also provide administrative services
to a number of investment companies. Total assets under management or
administration by these and other subsidiaries of Federated Investors are
approximately $70 billion. Federated Investors, which was founded in 1956
as Federated Investors, Inc., develops and manages mutual funds primarily
for the financial industry. Federated Investors' track record of
competitive performance and its disciplined, risk averse investment
philosophy serve approximately 3,500 client institutions nationwide.
Through these same client institutions, individual shareholders also have
access to this same level of investment expertise.
DISTRIBUTION OF FUND SHARES
Federated Securities Corp. is the principal distributor for shares of the Fund.
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.
ADMINISTRATION OF THE FUND
ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, provides administrative personnel and services (including
certain legal and financial reporting services) necessary to operate the Fund.
Federated Administrative Services provides these at an annual
rate, which relates to the average aggregate daily net assets of all funds
advised by subsidiaries of Federated Investors (the "Federated Funds") as
specified below:
<TABLE>
<CAPTION>
AVERAGE AGGREGATE DAILY NET
MAXIMUM ADMINISTRATIVE FEE ASSETS OF THE FEDERATED FUNDS
- --------------------------------------------- ---------------------------------------------
<S> <C>
0.15 of 1% on the first $250 million
0.125 of 1% on the next $250 million
0.10 of 1% on the next $250 million
0.075 of 1% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
Federated Administrative Services may choose voluntarily to waive a portion of
its fee.
SHAREHOLDER SERVICES PLAN. The Trust has adopted a Shareholder Services Plan
(the "Services Plan"), under which it may make payments up to 0.25 of 1% of the
average daily net asset value of the Institutional Shares to obtain certain
personal services for shareholders and the maintenance of shareholder accounts
("shareholder services"). The Trust has entered into a Shareholder Services
Agreement with Federated Shareholder Services, a subsidiary of Federated
Investors, under which Federated Shareholder Services will either perform
shareholder services directly or will select financial institutions to perform
shareholder services. Financial institutions will receive fees based upon shares
owned by their clients or customers. The schedules of such fees and the basis
upon which such fees will be paid will be determined, from time to time, by the
Trust and Federated Shareholder Services.
OTHER PAYMENTS TO FINANCIAL INSTITUTIONS. In addition to periodic payments to
financial institutions under the Shareholder Services Plan, certain financial
institutions may be compensated by the Adviser or its affiliates for the
continuing investment of customers' assets in certain funds, including the Fund,
advised by those entities. These payments will be made directly by the
distributor or Adviser from their assets, and will not be made from the assets
of the Fund or by the assessment of a sales charge on shares.
CUSTODIAN. State Street Bank and Trust Company ("State Street Bank"), Boston,
Massachusetts, is custodian for the securities and cash of the Fund.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated Services Company,
Pittsburgh, Pennsylvania, with offices in Boston, Massachusetts, is transfer
agent for the shares of the Fund, and dividend disbursing agent for the Fund.
LEGAL COUNSEL. Legal counsel is provided by Houston, Houston & Donnelly,
Pittsburgh, Pennsylvania, and Dickstein, Shapiro & Morin, L.L.P., Washington,
D.C.
INDEPENDENT PUBLIC ACCOUNTANTS. The independent public accountants for the Fund
are Arthur Andersen & Co., Pittsburgh, Pennsylvania.
EXPENSES OF THE FUND
Holders of shares pay their allocable portion of Fund and Trust expenses.
The Trust expenses for which shareholders 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.
The Fund expenses for which shareholders pay their allocable portion include,
but are not limited to: registering the Fund and 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.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The Fund's net asset value per share fluctuates. It is determined by dividing
the sum of all securities and other assets, less liabilities, by the total
number of shares outstanding.
INVESTING IN THE FUND
- --------------------------------------------------------------------------------
SHARE PURCHASES
Shares of the Fund are sold on days on which the New York Stock Exchange is open
for business. Shares may be purchased either by wire or mail. The Fund reserves
the right to reject any purchase request.
To purchase shares of the Fund, open an account by calling Federated Securities
Corp. Information needed to establish the account will be taken over the
telephone.
BY WIRE. To purchase shares of the Fund by Federal Reserve wire, call the Fund
before 4:00 P.M. (Eastern time) to place an order. The order is considered
received immediately. Payment by federal funds must be received before 3:00 P.M.
(Eastern time) on the next business day following the order. Federal funds
should be wired as follows: State Street Bank and Trust Company, Boston,
Massachusetts; Attention: EDGEWIRE; For Credit to: Ohio Intermediate Municipal
Trust; Fund Number (this number can be found on the Account Statement or by
contacting the Fund); Group Number or Order Number; Nominee or Institution Name;
and ABA Number 011000028. Shares cannot be purchased on days on which the New
York Stock Exchange is closed and on federal holidays restricting wire
transfers.
BY MAIL. To purchase shares of the Fund by mail, send a check made payable to
Ohio Intermediate Municipal Trust to the Fund's transfer agent, Federated
Services Company, c/o State Street Bank and Trust Company, P.O. Box 8602,
Boston, Massachusetts 02266-8602. Orders by mail are considered received when
payment by check is converted by the transfer agent's bank, State Street Bank,
into federal funds. This is normally the next business day after State Street
Bank receives the check.
SUBACCOUNTING SERVICES
Financial institutions are encouraged to open single master accounts. However,
certain financial institutions may wish to use the transfer agent's
subaccounting system to minimize their internal
recordkeeping requirements. The transfer agent may charge a fee based on the
level of subaccounting services rendered. Financial institutions holding shares
in a fiduciary, agency, custodial, or similar capacity may charge or pass
through subaccounting fees as part of or in addition to normal trust or agency
account fees. They may also charge fees for other services provided which may be
related to the ownership of shares of the Fund. This prospectus should,
therefore, be read together with any agreement between the customer and the
institution with regard to the services provided, the fees charged for those
services, and any restrictions and limitations imposed.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment in the Fund is $25,000, plus any non-affiliated
bank or broker's fee, if applicable. However, an account may be opened with a
smaller amount as long as the $25,000 minimum is reached within 90 days. An
institutional investor's minimum investment will be calculated by combining all
accounts it maintains with the Fund.
Individual accounts established through a bank or broker may be subject to a
different minimum investment requirement.
WHAT SHARES COST
Shares are sold at their net asset value next determined after an order is
received. There is no sales charge imposed by the Fund. Investors who purchase
shares through a non-affiliated bank or broker may be charged an additional
service fee by that bank or broker.
The net asset value is determined at 4:00 P.M. (Eastern time), 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.
EXCHANGING SECURITIES FOR FUND SHARES
Investors may exchange certain municipal securities or a combination of
securities and cash for Fund shares. The securities and cash must have a market
value of at least $25,000. The Fund reserves the right to determine the
acceptability of the securities to be exchanged. Securities accepted by the Fund
are valued in the same manner as the Fund values its assets. Shareholders
wishing to exchange securities should first contact Federated Securities Corp.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Fund, Federated Services Company maintains a share
account for each shareholder. Share certificates are not issued unless requested
in writing.
Detailed confirmations of each purchase and redemption are sent to each
shareholder. Monthly confirmations are sent to report dividends paid during that
month.
DIVIDENDS AND DISTRIBUTIONS
Dividends are declared daily and paid monthly 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 [5~net asset value, unless shareholders request cash payments on the new
account form or by writing to Federated Services Company. All shareholders on
the record date are entitled to the dividend.
CAPITAL GAINS
Distributions of net realized long-term capital gains realized by the Fund, if
any, will be made at least once every twelve months.
REDEEMING SHARES
- --------------------------------------------------------------------------------
The Fund redeems shares at their net asset value next determined after State
Street Bank receives the redemption request. Redemptions will be made on days on
which the Fund computes its net asset value. Redemption requests must be
received in proper form and can be made by telephone request or by written
request.
In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If such a case should occur, another
method of redemption, such as "By Mail," should be considered.
BY TELEPHONE. Shareholders may redeem their shares by telephoning the Fund
before 4:00 P.M. (Eastern time). All proceeds will normally be wire transferred
the following business day, but in no event more than seven days, to the
shareholder's account at a domestic commercial bank that is a member of the
Federal Reserve System. If at any time, the Fund shall determine it necessary to
terminate or modify this method of redemption, shareholders would be promptly
notified. Telephone redemption instructions may be recorded. If reasonable
procedures are not followed by the Fund, it may be liable for losses due to
unauthorized or fraudulent telephone instructions.
An authorization form permitting the Fund to accept telephone redemption
requests must first be completed. It is recommended that investors request this
privilege at the time of their initial application. If not completed at the time
of initial application, authorization forms and information on this service can
be obtained through Federated Securities Corp.
BY MAIL. Shareholders may redeem shares by sending a written request to the
Fund. The written request should include the shareholder's name, the Fund name,
the account number, and the share or dollar amount requested. If share
certificates have been issued, they must be properly endorsed and should be sent
by registered or certified mail with the written request.
SIGNATURES. Shareholders requesting a redemption of $50,000 or more, 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 signatures on written redemption requests guaranteed by:
- a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund, which is administered by the Federal Deposit Insurance
Corporation ("FDIC");
- a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchanges;
- a savings bank or savings and loan association whose deposits are insured
by the Savings Association Insurance Fund, which is administered by the
FDIC; or
- any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.
The 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.
Normally, a check for the proceeds is mailed to the shareholder within one
business day, but in no event more than seven days, after receipt of a proper
written redemption request provided State Street Bank has received payment for
Shares from the shareholder.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Fund may
redeem shares in any account and pay the proceeds to the shareholder if the
account balance falls below the required minimum value of $25,000 due to
shareholder redemptions. This requirement does not apply, however, if the
balance falls below $25,000 because of changes in the Fund's net asset value.
Before shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional shares to meet the minimum
requirement.
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS
Each share of the Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of all classes of
each portfolio 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 the shareholders for
this purpose shall be called by the Trustees upon the written request of
shareholders owning at least 10% of the outstanding shares of all series in the
Trust entitled to vote.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for acts or obligations of the Trust on behalf
of the Fund. To protect shareholders of the Fund, the Trust has filed legal
documents with Massachusetts that expressly disclaim the liability of
shareholders of the Fund for such acts or obligations of the Trust. These
documents require notice of this disclaimer to be given in each agreement,
obligation, or instrument that the Trust or its Trustees enter into or sign on
behalf of the Fund.
In the unlikely event a shareholder of the Fund is held personally liable for
the Trust's obligations on behalf of the Fund, the Trust is required to use the
property of the Fund to protect or compensate the shareholder. On request, the
Trust will defend any claim made and pay any judgment against a shareholder of
the Fund for any act or obligation of the Trust on behalf of the Fund.
Therefore, financial loss resulting from liability as a shareholder of the Fund
will occur only if the Trust cannot meet its obligations to indemnify
shareholders and pay judgments against them from the assets of the Fund.
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Fund does not expect to pay federal income tax because it expects to meet
requirements of the Internal Revenue Code of 1986, as amended (the "Code"),
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.
Shareholders are not required to pay federal regular income tax on any dividends
received from the Fund that represent net interest on tax-exempt municipal
bonds. However, dividends representing net interest income earned on some
municipal bonds may be included in calculating the federal individual
alternative minimum tax or the federal alternative minimum tax for corporations.
The alternative minimum tax, up to 28% of alternative minimum taxable income for
individuals and 20% for corporations, applies when it exceeds the regular tax
for the taxable year. Alternative minimum taxable income is equal to the regular
taxable income of the taxpayer increased by certain "tax preference" items not
included in regular taxable income and reduced by only a portion of the
deductions allowed in the calculation of the regular tax.
Interest on certain "private activity" bonds issued after August 7, 1986, is
treated as a tax preference item for both individuals and corporations. Unlike
traditional governmental purpose municipal bonds, which finance roads, schools,
libraries, prisons, and other public facilities, private activity bonds provide
benefits to private parties. The Fund may purchase all types of municipal bonds,
including private activity bonds. Thus, should it purchase any such bonds, a
portion of the Fund's dividends may be treated as a tax preference item.
In addition, in the case of a corporate shareholder, dividends of the Fund which
represent interest on municipal bonds will become subject to the 20% corporate
alternative minimum tax because the
dividends are included in a corporation's "adjusted current earnings." The
corporate alternative minimum tax treats 75% of the excess of a taxpayer's
pre-tax "adjusted current earnings" over the taxpayer's alternative minimum
taxable income as a tax preference item. "Adjusted current earnings" is based
upon the concept of a corporation's "earnings and profits." Since "earnings and
profits" generally includes the full amount of any Fund dividend, and
alternative minimum taxable income does not include the portion of the Fund's
dividend attributable to municipal bonds which are not private activity bonds,
the difference will be included in the calculation of the corporation's
alternative minimum tax.
Dividends of the Fund representing net interest income earned on some temporary
investments and any realized net short-term gains are taxed as ordinary income.
These tax consequences apply whether dividends are received in cash or as
additional shares. Information on the tax status of dividends and distributions
is provided annually.
OHIO TAXES
Under existing Ohio laws, distributions made by the Fund will not be subject to
Ohio individual income tax if such distributions qualify as "exempt-interest
dividends" under the Code, and represent (i) interest from obligations of Ohio
or its subdivisions which is exempt from federal income tax; or (ii) interest or
dividends from obligations issued by the United States and its territories or
possessions or by any authority, commission or instrumentality of the United
States which are exempt from state income tax under federal laws. Conversely, to
the extent that distributions made by the Fund are derived from other types of
obligations, such dividends will be subject to Ohio individual income tax.
Distributions made by the Fund will not be subject to Ohio corporation franchise
tax if such distributions qualify as "exempt-interest dividends" under the Code,
and represent (i) interest from obligations of Ohio or its subdivisions which is
exempt from federal income tax; or (ii) net interest income from obligations
issued by the United States and its territories or possessions or by any
authority, commission or instrumentality of the United States, which is included
in federal taxable income and which the exempt from state income tax under
federal laws.
Exempt-interest dividends that represent interest from obligations held by the
Fund which are issued by the State of Ohio or its political subdivisions will be
exempt from any Ohio municipal income tax (even if the municipality is permitted
under Ohio law to levy a tax on intangible income).
OTHER STATE AND LOCAL TAXES
Income from the Fund is not necessarily free from state income taxes in states
other than Ohio or from personal property taxes. State laws differ on this
issue, and 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, yield and tax-equivalent
yield.
Total return represents the change, over a specific period of time, in the value
of an investment in the Fund 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 the Fund is calculated by dividing the net investment income per
share (as defined by the Securities and Exchange Commission) earned by the
shares of the Fund over a thirty-day period by the offering price per share of
the shares of the Fund on the last day of the period. This number is then
annualized using semi-annual compounding. The tax-equivalent yield of the shares
of the Fund is calculated similarly to the yield, but is adjusted to reflect the
taxable yield that the shares of the Fund would have had to earn to equal its
actual yield, assuming a specific tax rate. The yield and the tax-equivalent
yield do not necessarily reflect income actually earned by the shares of the
Fund and, therefore, may not correlate to the dividends or other distributions
paid to shareholders.
From time to time, the Fund may advertise its performance using certain
financial publications and/or compare its performance to certain indices.
OHIO INTERMEDIATE MUNICIPAL TRUST
PORTFOLIO OF INVESTMENTS
MAY 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- --------- ----------------------------------------------------------- ------- ----------
<C> <C> <S> <C> <C>
INTERMEDIATE-TERM MUNICIPAL SECURITIES--99.1%
- --------------------------------------------------------------------------
OHIO--99.1%
-----------------------------------------------------------
$150,000 Akron, OH, Waterworks System, 5.25% Mortgage Revenue
Improvement Bonds (FGIC Insured), 3/1/2002 AAA $ 150,936
-----------------------------------------------------------
100,000 Avon Lake, OH, 5.35% LT GO Bonds (Series 1994), 12/1/2003 A 99,926
-----------------------------------------------------------
200,000 Cincinnati Student Loan Funding Corp., 5.125% Revenue Bonds
(Subject to AMT)/(AMBAC Insured), 12/1/2005 AAA 192,024
-----------------------------------------------------------
150,000 Columbus, OH, 5.50% Various Purpose LT GO Bonds (Series
1994-1)/(Original Issue Yield: 5.583%), 5/15/2004 AA+ 152,292
-----------------------------------------------------------
100,000 Columbus, OH, Water System, 6.375% Refunding Revenue Bonds
(Series 1991)/(Original Issue Yield: 6.65%), 11/1/2010 A1 102,661
-----------------------------------------------------------
155,000 Cuyahoga County, OH, 4.90%, 10/1/2004 Aa 148,437
-----------------------------------------------------------
400,000 Cuyahoga County, OH, 5.00% Hospital Revenue Bonds (Fairview
General Hospital)/(Original Issue Yield: 5.10%), 8/15/2004 A 364,340
-----------------------------------------------------------
100,000 Franklin County, OH, 6.40% Hospital Revenue Bonds (Mt.
Carmel-Holy Cross Health System)/(Original Issue Yield:
6.49%), 6/1/2003 AA- 103,594
-----------------------------------------------------------
</TABLE>
<TABLE>
<C> <C> <S> <C> <C>
125,000 Fremont, OH, Water Treatment Plant Expansion, 4.95% GO
Bonds (Series 1994)/(MBIA Insured), 12/1/2003 AAA 121,857
-----------------------------------------------------------
100,000 Lakota (Butler County), OH, Local School District, 4.65% UT
School Improvement Revenue Bonds (Series 1994), 12/1/2003 A1 92,656
-----------------------------------------------------------
100,000 Loveland, OH, City School District, 6.20% UT GO Bonds,
12/1/2003 A 104,974
-----------------------------------------------------------
125,000 Massillon, OH, City School District, 4.50% UT GO Refunding
Bonds (Series 1994)/(Original Issue Yield: 4.55%)/ (AMBAC
Insured), 12/1/2003 AAA 114,629
-----------------------------------------------------------
</TABLE>
OHIO INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- --------- ----------------------------------------------------------- ------- ----------
<C> <C> <S> <C> <C>
INTERMEDIATE-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------
OHIO--CONTINUED
-----------------------------------------------------------
$100,000 Montgomery County, OH, 4.80% Refunding Revenue Bonds
(Series 1994)/(Sisters of Charity Health Care System,
Inc.)/ (Original Issue Yield: 4.90%), 5/15/2004 AA- $ 92,157
-----------------------------------------------------------
150,000 Mount Vernon, OH, City School District, 5.30% UT GO Bonds
(FGIC Insured), 12/1/2002 AAA 152,462
-----------------------------------------------------------
150,000 North Canton, OH, City School District, 5.50% LT GO Bonds,
12/1/2003 A 149,998
-----------------------------------------------------------
100,000 Ohio State HEFA, 4.70% Revenue Bonds (John Carroll
University), 11/15/2003 A 92,765
-----------------------------------------------------------
150,000 Ohio State Water Development Authority, 5.75% Refunding
Revenue Bonds (Pure Water)/(Original Issue Yield: 4.45%)/
(MBIA Insured), 6/1/2003 AAA 155,324
-----------------------------------------------------------
200,000 Ohio State, Infrastructure & Improvement, 6.50% GO Water
and Sewer Improvement Bonds, 8/1/2004 AA 219,648
-----------------------------------------------------------
200,000 Ohio University, OH, 4.50% General Receipt Bonds (Original
Issue Yield: 4.60%)/(FGIC Insured), 12/1/2003 AAA 186,618
-----------------------------------------------------------
100,000 Pickerington, OH, 4.70% UT GO School Building Construction
& Improvement Bonds (FGIC Insured), 12/1/2004 AAA 93,304
-----------------------------------------------------------
150,000 South Euclid, OH, 4.75% UT GO School Improvement Revenue
Bonds (Lyndhurst City School District)/(FGIC Insured),
12/1/2005 AAA 139,295
-----------------------------------------------------------
125,000 South-Western City School District, OH, 4.65% UT GO School
Facility Bonds (Original Issue Yield: 4.70%)/(MBIA
Insured), 12/1/2004 AAA 115,761
-----------------------------------------------------------
100,000 University of Cincinnati, OH, 7.00% General Receipt Bonds
(Original Issue Yield: 7.05%), 6/1/2011 A1 107,505
-----------------------------------------------------------
100,000 University of Toledo, OH, 4.70% General Receipt Bonds
(Series 1994)/(FGIC Insured), 6/1/2004 AAA 93,543
----------------------------------------------------------- ----------
TOTAL INTERMEDIATE-TERM MUNICIPAL SECURITIES
(IDENTIFIED COST, $3,513,596) $3,346,706+
----------------------------------------------------------- ----------
</TABLE>
OHIO INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
* Please refer to the Appendix of the Statement of Additional Information for an
explanation of the credit ratings. Current credit ratings are unaudited.
+ The cost of investments for federal tax purposes amounts to $3,513,596. The
net unrealized depreciation on a federal tax basis amounts to $166,890, which
is comprised of $173,527 depreciation and $6,637 appreciation at May 31, 1994.
Note: The categories of investments are shown as a percentage of net assets
($3,378,541) at May 31, 1994.
The following abbreviations are used in this portfolio.
<TABLE>
<S> <C>
AMBAC -- American Municipal Bond Assurance Corporation
AMT -- Alternative Minimum Tax
FGIC -- Financial Guaranty Insurance Company
GO -- General Obligation
HEFA -- Health and Education Facilities Authority
LT -- Limited Tax
MBIA -- Municipal Bond Investors Assurance
UT -- Unlimited Tax
</TABLE>
(See Notes which are an integral part of the Financial Statements)
OHIO INTERMEDIATE MUNICIPAL TRUST
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ---------------------------------------------------------------------------------
Investments in securities, at value (Note 2A) (identified and tax cost
$3,513,596) $3,346,706
- ---------------------------------------------------------------------------------
Cash 24,664
- ---------------------------------------------------------------------------------
Receivable for Fund shares sold 136,000
- ---------------------------------------------------------------------------------
Interest receivable 50,375
- --------------------------------------------------------------------------------- ----------
Total assets 3,557,745
- ---------------------------------------------------------------------------------
LIABILITIES:
- ----------------------------------------------------------------------
Payable for investments purchased $150,525
- ----------------------------------------------------------------------
Dividends payable (Note 2B) 10,194
- ----------------------------------------------------------------------
Accrued expenses 18,485
- ---------------------------------------------------------------------- --------
Total liabilities 179,204
- --------------------------------------------------------------------------------- ----------
NET ASSETS for 354,681 shares of beneficial interest outstanding $3,378,541
- --------------------------------------------------------------------------------- ----------
NET ASSETS CONSIST OF:
- ---------------------------------------------------------------------------------
Paid-in capital $3,601,916
- ---------------------------------------------------------------------------------
Unrealized depreciation of investments (166,890)
- ---------------------------------------------------------------------------------
Accumulated net realized loss on investments (56,485)
- --------------------------------------------------------------------------------- ----------
Total Net Assets $3,378,541
- --------------------------------------------------------------------------------- ----------
NET ASSET VALUE, Offering Price, and Redemption Price Per Share
($3,378,541 / 354,681 shares of beneficial interest outstanding) $ 9.53
- --------------------------------------------------------------------------------- ----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
OHIO INTERMEDIATE MUNICIPAL TRUST
STATEMENT OF OPERATIONS
YEAR ENDED MAY 31, 1994*
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ------------------------------------------------------------------------------------
Interest income (Note 2B) $ 68,266
- ------------------------------------------------------------------------------------
EXPENSES:
- ------------------------------------------------------------------------------------
Investment advisory fee (Note 4) $ 6,929
- -------------------------------------------------------------------------
Administrative personnel and services fee (Note 4) 1,225
- -------------------------------------------------------------------------
Custodian and portfolio accounting fees 30,354
- -------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses (Note 4) 344
- -------------------------------------------------------------------------
Shareholder services fee (Note 4) 437
- -------------------------------------------------------------------------
Fund share registration fees 3,814
- -------------------------------------------------------------------------
Legal fees 500
- -------------------------------------------------------------------------
Printing and postage 1,335
- -------------------------------------------------------------------------
Miscellaneous 931
- ------------------------------------------------------------------------- -------
Total expenses 45,869
- ------------------------------------------------------------------------- -------
Deduct--
- ---------------------------------------------------------------
Waiver of investment advisory fee (Note 4) $ 6,929
- ---------------------------------------------------------------
Reimbursement of other operating expenses (Note 4) 35,630 42,559
- --------------------------------------------------------------- ------- -------
Net expenses 3,310
- ------------------------------------------------------------------------------------ ---------
Net investment income 64,956
- ------------------------------------------------------------------------------------ ---------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- ------------------------------------------------------------------------------------
Net realized gain (loss) on investments (identified cost basis) (56,485)
- ------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments (166,890)
- ------------------------------------------------------------------------------------ ---------
Net realized and unrealized loss on investments (223,375)
- ------------------------------------------------------------------------------------ ---------
Change in net assets resulting from operations $(158,419)
- ------------------------------------------------------------------------------------ ---------
</TABLE>
* For the period from December 2, 1993 (date of initial public investment) to
May 31, 1994.
(See Notes which are an integral part of the Financial Statements)
OHIO INTERMEDIATE MUNICIPAL TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
MAY 31, 1994*
-------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ----------------------------------------------------------------------------
OPERATIONS--
- ----------------------------------------------------------------------------
Net investment income $ 64,956
- ----------------------------------------------------------------------------
Net realized gain (loss) on investment transactions ($56,485 net loss as
computed for federal tax purposes) (Note 2C) (56,485)
- ----------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) on investments (166,890)
- ---------------------------------------------------------------------------- -------------
Change in net assets resulting from operations (158,419)
- ---------------------------------------------------------------------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2B)--
- ----------------------------------------------------------------------------
Dividends to shareholders from net investment income (64,956)
- ---------------------------------------------------------------------------- -------------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)--
- ----------------------------------------------------------------------------
Proceeds from sale of shares 6,891,738
- ----------------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of dividends
declared 11,620
- ----------------------------------------------------------------------------
Cost of shares redeemed (3,301,442)
- ---------------------------------------------------------------------------- -------------
Change in net assets resulting from Fund share transactions 3,601,916
- ---------------------------------------------------------------------------- -------------
Change in net assets 3,378,541
- ----------------------------------------------------------------------------
NET ASSETS:
- ----------------------------------------------------------------------------
Beginning of period --
- ---------------------------------------------------------------------------- -------------
End of period $ 3,378,541
- ---------------------------------------------------------------------------- -------------
</TABLE>
* For the period from December 2, 1993 (date of initial public investment) to
May 31, 1994.
(See Notes which are an integral part of the Financial Statements)
OHIO INTERMEDIATE MUNICIPAL TRUST
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1994
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Intermediate Municipal Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as an open-end management
investment company. The Trust consists of three portfolios. The financial
statements included herein present only those of Ohio Intermediate Municipal
Trust (the "Fund"). The financial statements of the other portfolios are
presented separately. The assets of each portfolio are segregated and a
shareholder's interest is limited to the portfolio in which the shares are held.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
A. INVESTMENT VALUATIONS--Municipal bonds are valued by an independent pricing
service taking into consideration yield, liquidity, risk, credit, quality,
coupon, maturity, type of issue, and any other factors or market data it
deems relevant in determining valuations for normal institutional size
trading units of debt securities. The independent pricing service does not
rely exclusively on quoted prices. Short-term securities with remaining
maturities of sixty days or less may be stated at amortized cost, which
approximates value.
B. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized as
required by the Internal Revenue Code, as amended (the "Code"). Distributions
to shareholders are recorded on the ex-dividend date.
C. FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its tax-exempt income.
Accordingly, no provisions for federal income tax are necessary.
Additionally, net capital losses of $56,485 attributable to security
transactions incurred after October 31, 1993 are treated as arising on
December 2, 1993, the first day of the Fund's next taxable year.
D. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. A Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the securities
purchased. Securities purchased on a when-issued or delayed delivery basis
are marked to market daily and begin earning interest on the settlement date.
E. OTHER--Investment transactions are accounted for on the trade date.
OHIO INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED
MAY 31, 1994*
--------------
<S> <C>
- ---------------------------------------------------------------------------
Shares sold 690,481
- ---------------------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 1,203
- ---------------------------------------------------------------------------
Shares redeemed (337,003)
- --------------------------------------------------------------------------- ------------
Net change resulting from fund share transactions 354,681
- --------------------------------------------------------------------------- ------------
</TABLE>
* For the period from December 2, 1993 (date of initial public investment) to
May 31, 1994.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
ADVISORY FEE--Federated Management, the Fund's investment adviser (the
"Adviser"), receives for its services an annual investment advisory fee equal to
.50 of 1% of the Fund's average daily net assets. The Adviser may voluntarily
choose to waive its fee and reimburse certain operating expenses of the Fund.
The Adviser can modify or terminate this voluntary waiver and reimbursement at
any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
administrative personnel and services. Prior to March 1, 1994, these services
were provided at approximate cost. Effective March 1, 1994, the FAS fee is based
on the level of average aggregate daily net assets of all funds advised by
subsidiaries of Federated Investors for the period. The administrative fee
received during the period of the Administrative Services Agreement shall be at
least $125,000 per portfolio and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Service Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of average net assets for the Fund for the period. This fee is to obtain
certain personal services for shareholders and the maintenance of shareholder
accounts.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ") serves as transfer and dividend disbursing agent for the Fund. The
FServ fee is based on the size, type, and number of accounts and transactions
made by shareholders.
OHIO INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
ORGANIZATIONAL EXPENSES--Organizational expenses of $23,676 and start-up
administrative services expenses of $31,506 were borne initially by the Adviser.
The Fund has agreed to reimburse the Adviser for the organizational expenses and
start-up administrative expenses during the five year period following November
15, 1993 (date the Fund first became effective). For the period ended May 31,
1994, the Fund paid $921 and $1,225, respectively, pursuant to this agreement.
INTERFUND TRANSACTIONS--During the period ended May 31, 1994, the Fund engaged
in purchase and sale transactions with other affiliated funds pursuant to Rule
17A-7 of the Investment Company Act of 1940 amounting to $3,624,800 and
$3,250,000, respectively. These purchases and sales were conducted on an arms
length basis and transacted for cash consideration only, at independent current
market prices and without brokerage commissions, fees, or other remuneration.
Certain of the Officers and Trustees of the Fund are Officers and Directors or
Trustees of the above companies.
(5) CONCENTRATION OF CREDIT RISK
Since the Trust invests a substantial portion of its assets in issuers located
in one state, it will be more susceptible to factors adversely affecting issuers
of that state than would be a comparable general tax-exempt mutual fund. In
order to reduce the credit risk associated with such factors, at May 31, 1994,
45% of the securities in the portfolio of investments are backed by letters of
credit or bond insurance of various financial institutions and financial
guaranty assurance agencies. The aggregate percentages by financial institutions
and agencies ranged from 9% to 24% of total investments.
(6) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended May 31, 1994, were as follows:
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
PURCHASES $5,115,269
- -------------------------------------------------------------------------------- ----------
SALES $1,535,978
- -------------------------------------------------------------------------------- ----------
</TABLE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
INTERMEDIATE MUNICIPAL TRUST
(Ohio Intermediate Municipal Trust):
We have audited the accompanying statement of assets and liabilities of Ohio
Intermediate Municipal Trust (an investment portfolio of Intermediate Municipal
Trust, a Massachusetts business trust), including the schedule of portfolio
investments, as of May 31, 1994, and the related statement of operations for the
period then ended, and the statement of changes in net assets, and financial
highlights (see page 2 of the prospectus) for the period presented. These
financial statements and financial highlights are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of the securities owned as of May 31, 1994, by
correspondence with the custodian and brokers. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Ohio
Intermediate Municipal Trust, an investment portfolio of Intermediate Municipal
Trust, as of May 31, 1994, the results of its operations for the period then
ended, and changes in its net assets and the financial highlights for period
presented, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN & CO.
Pittsburgh, Pennsylvania
July 11, 1994
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Ohio Intermediate Municipal Trust Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Investment Adviser
Federated Management Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Custodian
State Street Bank and P.O. Box 8602
Trust Company Boston, Massachusetts 02266-8602
- ------------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Legal Counsel
Houston, Houston & Donnelly 2510 Centre City Tower
Pittsburgh, Pennsylvania 15222
- ------------------------------------------------------------------------------------------------
Legal Counsel
Dickstein, Shapiro & Morin, L.L.P. 2101 L Street, N.W.
Washington, D.C. 20037
- ------------------------------------------------------------------------------------------------
Independent Public Accountants
Arthur Andersen & Co. 2100 One PPG Place
Pittsburgh, Pennsylvania 15222
- ------------------------------------------------------------------------------------------------
</TABLE>
OHIO INTERMEDIATE
MUNICIPAL TRUST
PROSPECTUS
A Non-Diversified Portfolio of
Intermediate Municipal Trust
an Open-End, Management
Investment Company
July 31, 1994
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
458810405
3081602A (7/94)
OHIO INTERMEDIATE MUNICIPAL TRUST
(A PORTFOLIO OF INTERMEDIATE MUNICIPAL TRUST)
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information should be read with the prospectus of
Ohio Intermediate Municipal Trust (the "Fund") dated July 31, 1994. This
Statement is not a prospectus itself. To receive a copy of the prospectus write
or call the Fund.
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
Statement dated July 31, 1994
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
GENERAL INFORMATION ABOUT THE FUND 1
- ---------------------------------------------------------------
INVESTMENT OBJECTIVE AND POLICIES 1
- ---------------------------------------------------------------
Acceptable Investments 1
When-Issued and Delayed
Delivery Transactions 2
Temporary Investments 2
Portfolio Turnover 3
Investment Limitations 3
Investment Risks 4
MANAGEMENT OF INTERMEDIATE MUNICIPAL TRUST 5
- ---------------------------------------------------------------
Officers and Trustees 5
Fund Ownership 7
The Funds 7
Trustee Liability 7
INVESTMENT ADVISORY SERVICES 7
- ---------------------------------------------------------------
Adviser to the Fund 7
Advisory Fees 7
ADMINISTRATIVE SERVICES 8
- ---------------------------------------------------------------
SHAREHOLDER SERVICES PLAN 8
- ---------------------------------------------------------------
BROKERAGE TRANSACTIONS 8
- ---------------------------------------------------------------
PURCHASING SHARES 9
- ---------------------------------------------------------------
Conversion to Federal Funds 9
DETERMINING NET ASSET VALUE 9
- ---------------------------------------------------------------
Valuing Municipal Bonds 9
Use of Amortized Cost 9
REDEEMING SHARES 9
- ---------------------------------------------------------------
Redemption in Kind 9
TAX STATUS 10
- ---------------------------------------------------------------
The Fund's Tax Status 10
Shareholder's Tax Status 10
TOTAL RETURN 10
- ---------------------------------------------------------------
YIELD 10
- ---------------------------------------------------------------
TAX-EQUIVALENT YIELD 10
- ---------------------------------------------------------------
Tax-Equivalency Table 11
PERFORMANCE COMPARISONS 11
- ---------------------------------------------------------------
APPENDIX 13
- ---------------------------------------------------------------
GENERAL INFORMATION ABOUT THE FUND
- --------------------------------------------------------------------------------
The Fund is a portfolio in Intermediate Municipal Trust (the "Trust"). The Trust
was established as a Massachusetts business trust under a Declaration of Trust
dated May 31, 1985. On September 1, 1993, the name of the Trust was changed from
Federated Intermediate Municipal Trust to Intermediate Municipal Trust.
INVESTMENT OBJECTIVE AND POLICIES
- --------------------------------------------------------------------------------
The Fund's investment objective is to provide current income which is exempt
from federal regular income tax and personal income taxes imposed by the State
of Ohio. The investment objective cannot be changed without approval of
shareholders.
ACCEPTABLE INVESTMENTS
The Fund invests primarily in a portfolio of municipal securities which are
exempt from federal regular income tax and Ohio state personal income taxes .
These securities include those issued by or on behalf of the State of Ohio and
Ohio municipalities, and those issued by states, territories, and possessions of
the United States which are exempt from both federal regular income tax and Ohio
state personal income taxes.
CHARACTERISTICS
The Ohio municipal securities in which the Fund invests have the
characteristics set forth in the prospectus.
An Ohio municipal security will be determined by the Fund's adviser to
meet the quality standards established by the Trust's Board of Trustees
(the "Trustees") if it is of comparable quality to municipal securities
within the Fund's rating requirements. The Trustees consider the
creditworthiness of the issuer of a municipal security, the issuer of a
participation interest if the Fund has the right to demand payment from
the issuer of the interest, or the guarantor of payment by either of
those issuers. The Fund is not required to sell a municipal security if
the security's rating is reduced below the required minimum subsequent to
its purchase by the Fund. The investment adviser considers this event,
however, in its determination of whether the Fund should continue to hold
the security in its portfolio. If Moody's Investors Service, Inc.,
Standard & Poor's Corporation or Fitch Investor Services, Inc. ratings
change because of changes in those organizations or in their rating
systems, the Fund will try to use comparable ratings as standards in
accordance with the investment policies described in the Fund's
prospectus.
TYPES OF ACCEPTABLE INVESTMENTS
Examples of Ohio municipal securities are:
- municipal notes and municipal commercial paper;
- serial bonds sold with differing maturity dates;
- tax anticipation notes sold to finance working capital needs of
municipalities;
- bond anticipation notes sold prior to the issuance of long-term bonds;
- pre-refunded municipal bonds; and
- general obligation bonds secured by a municipality pledge of taxation.
PARTICIPATION INTERESTS
The financial institutions from which the Fund purchases participation
interests frequently provide or secure from another financial institution
irrevocable letters of credit or guarantees and give the Fund the right
to demand payment of the principal amounts of the participation interests
plus accrued interest on short notice (usually within seven days).
VARIABLE RATE MUNICIPAL SECURITIES
Variable interest rates generally reduce changes in the market value of
municipal securities from their original purchase prices. Accordingly, as
interest rates decrease or increase, the potential for capital
appreciation or depreciation is less for variable rate municipal
securities than for fixed income obligations. Many municipal securities
with variable interest rates purchased by the Fund are subject to
repayment of principal (usually within seven days) on the Fund's demand.
The terms of these variable rate demand instruments require payment of
principal and accrued interest from the issuer of the municipal
obligations, the issuer of the participation interests, or a guarantor of
either issuer.
MUNICIPAL LEASES
The Fund may purchase municipal securities in the form of participation
interests which represent undivided proportional interests in lease
payments by a governmental or non-profit entity. The lease payments and
other rights under the lease provide for and secure the payments on the
certificates. Lease obligations may be limited by municipal charter or
the nature of the appropriation for the lease. In particular, lease
obligations
- --------------------------------------------------------------------------------
may be subject to periodic appropriation. If the entity does not
appropriate funds for future lease payments, the entity cannot be
compelled to make such payments. Furthermore, a lease may provide that
the certificate trustee cannot accelerate lease obligations upon default.
The trustee would only be able to enforce lease payments as they became
due. In the event of a default or failure of appropriation, it is
unlikely that the trustee would be able to obtain an acceptable
substitute source of payment.
In determining the liquidity of municipal lease securities, the Fund's
investment adviser, under the authority delegated by the Trustees, will
base its determination on the following factors;
- whether the lease can be terminated by the lessee;
- the potential recovery, if any, from a sale of the leased property upon
termination of the lease;
- the lessee's general credit strength (e.g., its debt, administrative,
economic and financial characteristics and prospects);
- the likelihood that the lessee will discontinue appropriating funding
for the leased property because the property is no longer deemed
essential to its operations (e.g., the potential for an "event of non-
appropriation"); and
- any credit enhancement or legal recourse provided upon an event of
non-appropriation or other termination of the lease.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
These transactions are arrangements in which the Fund purchases securities with
payment and delivery scheduled for a future time. The Fund engages in
when-issued and delayed delivery transactions only for the purpose of acquiring
portfolio securities consistent with the Fund's investment objective and
policies, not for investment leverage. These transactions are made to secure
what is considered to be an advantageous price and yield for the Fund.
Settlement dates may be a month or more after entering into these transactions,
and the market values of the securities purchased may vary from the purchase
prices.
No fees or 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 maintained until the transaction is settled.
The Fund does not intend to engage in these transactions to an extent that would
cause the segregation of more than 20% of the value of its total assets.
TEMPORARY INVESTMENTS
The Fund may also invest in temporary investments during times of unusual market
conditions for defensive purposes.
REPURCHASE AGREEMENTS
Repurchase agreements are arrangements in which banks, broker/dealers,
and other recognized financial institutions sell U.S. government
securities or certificates of deposit to the Fund and agree at the time
of sale to repurchase them at a mutually agreed upon time and price
within one year from the date of acquisition. The Fund or its custodian
will take possession of the securities subject to repurchase agreements.
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. In the event that such 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 may 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 Trustees.
REVERSE REPURCHASE AGREEMENTS
The Fund may also enter into reverse repurchase agreements. This
transaction is 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 on the Fund's records at the trade date. These
assets are marked to market daily and are maintained until the
transaction is settled.
PORTFOLIO TURNOVER
The Fund may trade or dispose of portfolio securities as considered necessary to
meet its investment objective. For the period from December 2, 1993 (date of
initial public investment) to May 31, 1994, the portfolio turnover rate for the
Fund was 48%.
INVESTMENT LIMITATIONS
SELLING SHORT AND BUYING ON MARGIN
The Fund will not sell any securities short or purchase any securities on
margin, but may obtain such short-term credits as may be necessary for
clearance of purchases and sales of securities.
ISSUING SENIOR SECURITIES AND BORROWING MONEY
The Fund will not issue senior securities except that the Fund may borrow
money and engage in reverse repurchase agreements in amounts up to
one-third of the value of its total 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 when the liquidation of
portfolio securities is deemed to be inconvenient or disadvantageous. The
Fund will not purchase any securities while borrowings in excess of 5% of
its total assets are outstanding.
PLEDGING ASSETS
The Fund will not mortgage, pledge, or hypothecate its assets except to
secure permitted borrowings. In those cases, it may mortgage, pledge, or
hypothecate assets having a market value not exceeding 10% of the value
of its total assets at the time of the pledge.
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 REAL ESTATE
The Fund will not purchase or sell real estate or invest in real estate
limited partnerships, although it may invest in municipal bonds secured
by real estate or interests in real estate.
INVESTING IN COMMODITIES
The Fund will not buy or sell commodities, commodity contracts, or
commodities futures contracts.
LENDING CASH OR SECURITIES
The Fund will not lend any of its assets except that it may acquire
publicly or non-publicly issued municipal bonds or temporary investments
or enter into repurchase agreements in accordance with its investment
objective, policies, and limitations or its Declaration of Trust.
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 or in industrial development bonds or other securities, the
interest upon which is paid from revenues of similar types of projects.
However, the Fund may invest as temporary investments more than 25% of
the value of its assets in cash or cash items, securities issued or
guaranteed by the U.S. government, its agencies or instrumentalities, or
instruments secured by these money market instruments, i.e., repurchase
agreements.
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.
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
The Fund will not purchase securities of other investment companies
except as part of a merger, consolidation, or other acquisition.
- --------------------------------------------------------------------------------
INVESTING IN ISSUERS WHOSE SECURITIES ARE OWNED BY OFFICERS AND TRUSTEES OF
THE FUND
The Fund will not purchase or retain the securities of any issuer if the
officers and Trustees of the Fund or its investment adviser, owning
individually more than 1/2 of 1% of the issuer's securities, together own
more than 5% of the issuer's securities.
INVESTING IN ILLIQUID SECURITIES
The Fund will not invest more than 15% of its net assets in securities
which are illiquid, including repurchase agreements providing for
settlement in more than seven days after notice, and certain restricted
securities not determined by the Trustees to be liquid.
INVESTING IN NEW ISSUERS
The Fund will not invest more than 5% of the value of its total assets in
industrial development bonds where the principal and interest are the
responsibility of companies (or guarantors, where applicable) with less
than three years of continuous operations, including the operation of any
predecessor.
INVESTING IN MINERALS
The Fund will not purchase interests in oil, gas, or other mineral
exploration or development programs or leases, although it may invest in
securities of issuers which invest in or sponsor such programs.
In addition, to comply with investment restrictions of a certain state, the Fund
will not invest in real estate limited partnerships.
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.
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 and loan having capital, surplus, and undivided profits in excess of
$100,000,000 at the time of investment to be "cash items."
INVESTMENT RISKS
The economy of the State of Ohio is reliant in part on durable goods
manufacturing, largely concentrated in motor vehicles and equipment, steel,
rubber products and household appliances. During the past decade, competition in
various industries in the State of Ohio has changed from being domestic to
international in nature. In addition, these industries may be characterized as
having excess capacity in particular product segments. The steel industry, in
particular, and the automobile industry, to a lesser extent, share these
characteristics. Because the State of Ohio and certain underlying municipalities
have large exposure to these industries and their respective aftermarkets,
trends in these industries may, over the long term, impact the demographic and
financial position of the State of Ohio and its municipalities. To the degree
that domestic manufacturers in industries to which Ohio municipalities have
exposure fail to make competitive adjustments, employment statistics and
disposable income of residents in Ohio may deteriorate, possibly leading to
population declines and erosion of municipality tax bases.
Both the economic trends above and the political climate in various
municipalities may have contributed to the decisions of various businesses and
individuals to relocate outside the State. A municipality's political climate in
particular may affect its own credit standing. For both the State of Ohio and
underlying Ohio municipalities, adjustment of credit ratings by the rating
agencies may affect the ability to issue securities and thereby affect the
supply of obligations meeting the quality standards for investment by the Fund.
The State ended fiscal year 1993 with a positive budgetary fund balance of over
$100 million. The 1994-1995 biennial budget was formulated with reasonable
revenue assumptions. The State implemented a revenue enhancement package in
January of 1993 that increased the cigarette tax and the income tax bracket for
incomes over $200,000, broadened the sales tax base and capped tax distributions
to local governments. These and other minor revenue enhancements are budgeted to
add $912 million of additional revenue to the 1994-1995 biennial budget. The
State's fund balance reserve levels continue to be minimal but the State has
demonstrated its ability to manage with limited financial flexibility.
The State has established procedures for municipal fiscal emergencies under
which joint state/local commissions are established to monitor the fiscal
affairs of a financially troubled municipality. When these procedures are
invoked, the municipality must develop a financial plan to eliminate deficits
and cure any defaults. Since their adoption in 1979, these procedures have been
applied to approximately twenty-one cities and villages, including the City of
Cleveland; in sixteen of these communities, the fiscal situation has been
resolved and the procedures terminated.
The foregoing discussion only highlights some of the significant financial
trends and problems affecting the State of Ohio and underlying municipalities.
MANAGEMENT OF INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
OFFICERS AND TRUSTEES
Officers and Trustees are listed with their addresses, principal occupations,
and present positions, including any affiliation with Federated Management,
Federated Investors, Federated Securities Corp., Federated Services Company,
Federated Administrative Services and the Funds (as defined below).
<TABLE>
<CAPTION>
POSITIONS WITH PRINCIPAL OCCUPATIONS
NAME AND ADDRESS THE TRUST DURING PAST FIVE YEARS
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
John F. Donahue*+ Chairman and Chairman and Trustee, Federated Investors; Chairman and Trustee, Federated
Federated Investors Trustee Advisers, Federated Management, and Federated Research; Director, Aetna Life
Tower and Casualty Company; Chief Executive Officer and Director, Trustee, or
Pittsburgh, PA Managing General Partner of the Funds; formerly, Director, The Standard Fire
Insurance Company. Mr. Donahue is the father of J. Christopher Donahue, Vice
President of the Trust.
- --------------------------------------------------------------------------------------------------------------------------------
John T. Conroy, Jr. Trustee President, Investment Properties Corporation; Senior Vice-President, John R.
Wood/IPC Commercial Wood and Associates, Inc., Realtors; President, Northgate Village
Department Development Corporation; General Partner or Trustee in private real estate
John R. Wood and ventures in Southwest Florida; Director, Trustee, or Managing General
Associates, Inc., Partner of the Funds; formerly, President, Naples Property Management, Inc.
Realtors
3255 Tamiami Trail North
Naples, FL
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
William J. Copeland Trustee Director and Member of the Executive Committee, Michael Baker, Inc.;
One PNC Plaza-23rd Floor Director, Trustee, or Managing General Partner of the Funds; formerly, Vice
Pittsburgh, PA Chairman and Director, PNC Bank, N.A., and PNC Bank Corp.; and Director,
Ryan Homes, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
James E. Dowd Trustee Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director,
571 Hayward Mill Road Trustee, or Managing General Partner of the Funds; formerly, Director, Blue
Concord, MA Cross of Massachusetts, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
Lawrence D. Ellis, M.D. Trustee Hematologist, Oncologist, and Internist, Presbyterian and Montefiore
3471 Fifth Avenue Hospitals; Clinical Professor of Medicine and Trustee, University of
Suite 1111 Pittsburgh; Director, Trustee, or Managing General Partner of the Funds.
Pittsburgh, PA
- --------------------------------------------------------------------------------------------------------------------------------
Edward L. Flaherty, Jr.+ Trustee Attorney-at-law; Partner, Meyer and Flaherty; Director, Eat'N Park
5916 Penn Mall Restaurants, Inc., and Statewide Settlement Agency, Inc.; Director, Trustee,
Pittsburgh, PA or Managing General Partner of the Funds; formerly, Counsel, Horizon
Financial, F.A., Western Region.
- --------------------------------------------------------------------------------------------------------------------------------
Glen R. Johnson* President and Trustee, Federated Investors; President and/or Trustee of some of the Funds;
Federated Investors Trustee staff member, Federated Securities Corp. and Federated Administrative
Tower Services.
Pittsburgh, PA
- --------------------------------------------------------------------------------------------------------------------------------
Peter E. Madden Trustee Consultant; State Representative, Commonwealth of Massachusetts; Director,
225 Franklin Street Trustee, or Managing General Partner of the Funds; formerly, President,
Boston, MA State Street Bank and Trust Company and State Street Boston Corporation; and
Trustee, Lahey Clinic Foundation, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
Gregor F. Meyer Trustee Attorney-at-law; Partner, Meyer and Flaherty; Chairman, Meritcare, Inc.;
5916 Penn Mall Director, Eat 'N Park Restaurants, Inc.; Director, Trustee, or Managing
Pittsburgh, PA General Partner of the Funds; formerly, Vice Chairman, Horizon Financial,
F.A.
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITIONS WITH PRINCIPAL OCCUPATIONS
NAME AND ADDRESS THE TRUST DURING PAST FIVE YEARS
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
Wesley W. Posvar Trustee Professor, Foreign Policy and Management Consultant; Trustee, Carnegie
1202 Cathedral of Endowment for International Peace, RAND Corporation, Online Computer Library
Learning Center, Inc., and U.S. Space Foundation; Chairman, Czecho Slovak Management
University of Pittsburgh Center; Director, Trustee, or Managing General Partner of the Funds;
Pittsburgh, PA President Emeritus, University of Pittsburgh; formerly, Chairman, National
Advisory Council for Environmental Policy and Technology.
- --------------------------------------------------------------------------------------------------------------------------------
Marjorie P. Smuts Trustee Public relations/marketing consultant; Director, Trustee, or Managing
4905 Bayard Street General Partner of the Funds.
Pittsburgh, PA
- --------------------------------------------------------------------------------------------------------------------------------
J. Christopher Donahue* Vice President President and Trustee, Federated Investors; President and Trustee, Federated
Federated Investors Advisers, Federated Management, and Federated Research; Director and
Tower President, Federated Research Corp.; President, Passport Research, Ltd.;
Pittsburgh, PA Trustee, Federated Administrative Services, Federated Services Company,and
Federated Shareholder Services; President or Vice President of the Funds;
Director, Trustee, or Managing General Partner of some of the Funds. Mr.
Donahue is the son of John F. Donahue, Chairman and Trustee of the Trust.
- --------------------------------------------------------------------------------------------------------------------------------
Richard B. Fisher Vice President Executive Vice President and Trustee, Federated Investors; Chairman and
Federated Investors Director, Federated Securities Corp.; President or Vice President of the
Tower Funds; Director or Trustee of some of the Funds.
Pittsburgh, PA
- --------------------------------------------------------------------------------------------------------------------------------
Edward C. Gonzales Vice President Vice President, Treasurer, and Trustee, Federated Investors; Vice President
Federated Investors and Treasurer and Treasurer, Federated Advisers, Federated Management, and Federated
Tower Research; Executive Vice President, Treasurer, and Director, Federated
Pittsburgh, PA Securities Corp.; Trustee, Federated Services Company; Chairman, Treasurer,
and Trustee, Federated Administrative Services; Trustee or Director of some
of the Funds; Vice President and Treasurer of the Funds.
- --------------------------------------------------------------------------------------------------------------------------------
John W. McGonigle Vice President Vice President, Secretary, General Counsel, and Trustee, Federated
Federated Investors and Secretary Investors; Vice President, Secretary, and Trustee, Federated Advisers,
Tower Federated Management, and Federated Research; Trustee, Federated Services
Pittsburgh, PA Company; Executive Vice President, Secretary, and Trustee, Federated
Administrative Services; Director and Executive Vice President, Federated
Securities Corp.; Vice President and Secretary of the Funds.
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* This Trustee is deemed to be an "interested person" of the Trust as defined in
the Investment Company Act of 1940, as amended.
+ Members of the Trust's Executive Committee. The Executive Committee of the
Board of Trustees handles the responsibilities of the Trustees between
meetings of the Board.
- --------------------------------------------------------------------------------
FUND OWNERSHIP
Officers and Trustees own less than 1% of the outstanding shares of the Fund.
As of July 12, 1994, the following shareholders of record owned 5% or more of
the outstanding shares of the Fund: SNBSO & Co., Springfield, OH, owned
approximately 68,132 shares 15.72%; Parcol & Co., Akron, OH, owned approximately
37,297 shares 8.60%; Grand Old Company, Zanesville, OH, owned approximately
42,314 shares 9.76%; Lorban & Company, Elvira, OH, owned approximately 30,066
shares 6.94%; MAHCO, Youngstown, OH, owned approximately 24,267 shares 5.60%;
Federated Disbursing Corp., Pittsburgh, PA, owned approximately 97,935 shares
22.59%; Holdon, Findlay, OH, owned approximately 31,641 shares 7.30%; and
Holdon, Findlay, OH, owned approximately 61,853 shares 14.27%.
THE FUNDS
"The Funds" and "Funds" mean the following investment companies: American
Leaders Fund, Inc.; Annuity Management Series; Automated Cash Management Trust;
Automated Government Money Trust; California Municipal Cash Trust; Cash Trust
Series II; Cash Trust Series, Inc.; DG Investor Series; Edward D. Jones & Co.
Daily Passport Cash Trust; Federated ARMs Fund; Federated Exchange Fund, Ltd.;
Federated GNMA Trust; Federated Government Trust; Federated Growth Trust;
Federated High Yield Trust; Federated Income Securities Trust; Federated Income
Trust; Federated Index Trust; Federated Intermediate Government Trust; Federated
Master Trust; Federated Municipal Trust; Federated Short-Intermediate Government
Trust; Federated Short-Term U.S. Government Trust; Federated Stock Trust;
Federated Tax-Free Trust; Federated U.S. Government Bond Fund; First Priority
Funds; Fixed Income Securities, Inc.; Fortress Adjustable Rate U.S. Government
Fund, Inc.; Fortress Municipal Income Fund, Inc.; Fortress Utility Fund, Inc.;
Fund for U.S. Government Securities, Inc.; Government Income Securities, Inc.;
High Yield Cash Trust; Insight Institutional Series, Inc.; Insurance Management
Series; Intermediate Municipal Trust; International Series, Inc.; Investment
Series Funds, Inc.; Investment Series Trust; Liberty Equity Income Fund, Inc.;
Liberty High Income Bond Fund, Inc.; Liberty Municipal Securities Fund, Inc.;
Liberty U.S. Government Money Market Trust; Liberty Term Trust, Inc.-1999;
Liberty Utility Fund, Inc.; Liquid Cash Trust; Managed Series Trust; Mark Twain
Funds; Money Market Management, Inc.; Money Market Obligations Trust; Money
Market Trust; Municipal Securities Income Trust; New York Municipal Cash Trust;
111 Corcoran Funds; Peachtree Funds; The Planters Funds; Portage Funds; RIMCO
Monument Funds; The Shawmut Funds; Short-Term Municipal Trust; Signet Select
Funds; Star Funds; The Starburst Funds; The Starburst Funds II; Stock and Bond
Fund, Inc.; Sunburst Funds; Targeted Duration Trust; Tax-Free Instruments Trust;
Trademark Funds; Trust for Financial Institutions; Trust for Government Cash
Reserves; Trust for Short-Term U.S. Government Securities; Trust for U.S.
Treasury Obligations; and World Investment Series, Inc.
TRUSTEE LIABILITY
The Trust's Declaration of Trust provides that the Trustees will not be liable
for errors of judgement 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 of the Class A (voting) shares of
Federated Investors are owned by a trust, the Trustees of which are John F.
Donahue, his wife, and his son, J. Christopher Donahue. John F. Donahue is
Chairman and Trustee of Federated Management, Federated Investors, and the
Trust. J. Christopher Donahue is President and Trustee of Federated Management
and Federated Investors; Trustee, Federated Administrative Services and
Federated Services Company; and Vice President of the Trust. John W. McGonigle
is Vice President, Secretary, and Trustee, Federated Management; Vice President
and Secretary of Federated Research Corp.; Vice President, Secretary, Trustee,
and General Counsel, Federated Investors; Executive Vice President, Secretary,
and Trustee, Federated Administrative Services; Executive Vice President and
Director, Federated Securities Corp.; Trustee of Federated Services Company; and
Vice President and Secretary of the Trust.
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 Fund.
- --------------------------------------------------------------------------------
ADVISORY FEES
For its advisory services, Federated Management receives an annual investment
ad[5~visory fee as described in the prospectus.
For the period from December 2, 1993 (date of initial public investment) to May
31, 1994, the Adviser earned advisory fees of $6,929, all of which was
voluntarily waived. In addition, the Adviser reimbursed other operating expenses
of $35,630.
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 2.5% per year of the first $30 million of average net assets, 2%
per year of the next $70 million of average net assets, and 1.5% per year
of the remaining average net assets, the Adviser will reimburse the Trust
for its expenses over the limitation.
If the Fund's monthly projected operating expenses exceed this expense
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.
ADMINISTRATIVE SERVICES
- --------------------------------------------------------------------------------
Federated Administrative Services, a subsidiary of Federated Investors, provides
administrative personnel and services to the Fund for a fee as described in the
prospectus. Prior to March 1, 1994, Federated Administrative Services, Inc.,
also a subsidiary of Federated Investors, served as the Fund's administrator.
(For purposes of this Statement of Additional Information, Federated
Administrative Services and Federated Administrative Services, Inc. may,
hereinafter, collectively be referred to as the "Administrators.") For the
period from December 2, 1993 (date of initial public investment) to May 31,
1994, the Administrators collectively earned $1,225, none of which was waived.
Dr. Henry Gailliot, an officer of Federated Management, the Adviser to the Fund,
holds approximately 20% of the outstanding common stock and serves as director
of Commercial Data Services, Inc., a company which provides computer processing
services to the Administrators.
SHAREHOLDER SERVICES PLAN
- --------------------------------------------------------------------------------
This arrangement permits the payment of fees to Federated Shareholder Services
and, indirectly, to financial institutions 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: 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 changing dividend options, account designations, and addresses.
For the fiscal period ending May 31, 1994, payments in the amount of $437 were
made pursuant to the Shareholder Services Plan, all of which were paid to
financial institutions.
BROKERAGE TRANSACTIONS
- --------------------------------------------------------------------------------
When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the Adviser looks for prompt execution of the order at a favorable
price. In working with dealers, the Adviser will generally use those who are
recognized dealers in specific portfolio instruments, except when a better price
and execution of the order can be obtained elsewhere. 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 Federated
Funds. The Adviser makes decisions on portfolio transactions and selects brokers
and dealers subject to review by the Trustees. 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.
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.
Research services provided by brokers may be used by the Adviser or by
affiliates of Federated Investors in advising Federated Funds 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.
PURCHASING SHARES
- --------------------------------------------------------------------------------
Except under certain circumstances described in the prospectus, shares are sold
at their net asset value on days the New York Stock Exchange is open for
business. The procedure for purchasing shares is explained in the prospectus
under "Investing in the Fund."
CONVERSION TO FEDERAL FUNDS
It is the Fund's policy to be as fully invested as possible so that maximum
interest may be earned. State Street Bank and Trust Company ("State Street
Bank") acts as the shareholder's agent in depositing checks and converting them
to federal funds.
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 the prospectus. Net asset value will not
be calculated on the following holidays: New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and
Christmas Day.
VALUING MUNICIPAL BONDS
The Trustees use an independent pricing service to value municipal bonds. The
independent pricing service takes into consideration yield, stability, risk,
quality, coupon rate, maturity, type of issue, trading characteristics, special
circumstances of a security or trading market, and any other factors or market
data it considers relevant in determining valuations for normal institutional
size trading units of debt securities, and does not rely exclusively on quoted
prices.
USE OF AMORTIZED COST
The Trustees have decided that the fair value of debt securities authorized to
be purchased by the Fund with remaining maturities of 60 days or less, at the
time of purchase, shall be their amortized cost value, unless the particular
circumstances of the security indicate otherwise. Under this method, portfolio
instruments and assets are valued at the acquisition cost as adjusted for
amortization of premium or accumulation of discount rather than at current
market value. The Executive Committee continually assesses this method of
valuation and recommends changes where necessary to assure that the Fund's
portfolio instruments are valued at their fair value as determined in good faith
by the Trustees.
REDEEMING SHARES
- --------------------------------------------------------------------------------
The Fund redeems shares at the next computed net asset value after the Fund
receives the redemption request. Redemption procedures are explained in the
prospectus under "Redeeming Shares." Although State Street Bank 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.
REDEMPTION IN KIND
The Trust is obligated to redeem shares solely in cash up to $250,000 or 1% of
the net asset value of the Fund, whichever is less, for any one shareholder
within a 90-day period.
Any redemption beyond this amount will also be in cash unless the Trustees
determine that further cash payments will have a material adverse effect on
remaining shareholders. In such a case, the Trust will pay all or a portion of
the remainder of the redemption in portfolio instruments, valued in the same way
that net asset value is determined. The portfolio instruments will be selected
in a manner that the Trustees deem fair and equitable. Such securities will be
readily marketable, to the extent available.
- --------------------------------------------------------------------------------
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.
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:
- - derive at least 90% of its gross income from dividends, interest, and gains
from the sale of securities;
- - derive less than 30% of its gross income from the sale of securities held less
than three months;
- - invest in securities within certain statutory limits; and
- - distribute to its shareholders at least 90% of its net income earned during
the year.
SHAREHOLDERS' TAX STATUS
CAPITAL GAINS
Capital gains or losses may be realized by the Fund on the sale of
portfolio securities and as a result of discounts from par value on
securities held to maturity. Sales would generally be made because of:
- the availability of higher relative yields;
- differentials in market values;
- new investment opportunities;
- changes in creditworthiness of an issuer; or
- an attempt to preserve gains or limit losses.
Distributions of long-term capital gains are taxed as such, whether they
are taken in cash or reinvested, and regardless of the length of time the
shareholder has owned shares. Any loss by a shareholder on Fund shares
held for less than six months and sold after a capital gains distribution
will be treated as a long-term capital loss to the extent of the capital
gains distribution.
TOTAL RETURN
- --------------------------------------------------------------------------------
The Fund's cumulative total return for the period from December 2, 1993 (date of
initial public investment) to May 31, 1994 was (2.52%). Cumulative total return
reflects the Fund's total performance over a specific period of time. The Fund's
total return is representative of only five months of investment activity since
the Fund's effective date.
The average annual total return for 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 maximum offering price per share at the end of the period. The number of
shares owned at the end of the period is based on the number of shares purchased
at the beginning of the period with $1,000, adjusted over the period by any
additional shares, assuming the monthly reinvestment of all dividends and
distributions.
YIELD
- --------------------------------------------------------------------------------
The Fund's yield for the thirty-day period ended May 31, 1994, was 4.96%.
The yield of the Fund is determined by dividing the net investment income per
share (as defined by the Securities and Exchange Commission) earned by the Fund
over a thirty-day period by the maximum offering price per share on the last day
of the period. This value is then 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 twelve-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 shareholders.
To the extent that financial institutions and broker/dealers charge fees in
connection with services provided in conjunction with an investment in the Fund,
performance will be reduced for those shareholders paying those fees.
TAX-EQUIVALENT YIELD
- --------------------------------------------------------------------------------
The Fund's tax-equivalent yield for the thirty-day period ended May 31, 1994,
was 9.38%.
The tax-equivalent yield for the Fund is calculated similarly to the yield, but
is adjusted to reflect the taxable yield that the Fund would have had to earn to
equal its actual yield, assuming a 39.60% Federal tax rate and assuming that
income is 100% tax-exempt.
TAX-EQUIVALENCY TABLE
The Fund may also use a tax-equivalency table in advertising and sales
literature. The interest earned by the municipal obligations in the Fund's
portfolio generally remains free from federal regular income tax and is free
from the income taxes imposed by the State of Ohio (some portion of the Fund's
income may be subject to the federal alternative minimum tax and state and local
taxes.) As the table below indicates, a "tax-free" investment is an attractive
choice for investors, particularly in times of narrow spreads between "tax-free"
and taxable yields.
<TABLE>
<S> <C> <C> <C> <C> <C>
TAXABLE YIELD EQUIVALENT FOR 1994
STATE OF OHIO
- -----------------------------------------------------------------------------------------------------------
TAX BRACKET:
- -----------------------------------------------------------------------------------------------------------
FEDERAL 15.00% 28.00% 31.00% 36.00% 39.60%
- -----------------------------------------------------------------------------------------------------------
COMBINED
FEDERAL AND
STATE 20.201% 34.900% 37.900% 43.500% 47.100%
- -----------------------------------------------------------------------------------------------------------
JOINT RETURN: $1-22,100 $22,101-53,500 $53,501-115,000 $115,001-250,000 OVER 250,000
SINGLE RETURN: $1-22,100 $22,101-53,500 $53,501-115,000 $115,001-250,000 OVER 250,000
- -----------------------------------------------------------------------------------------------------------
TAX-EXEMPT
YIELD TAXABLE YIELD EQUIVALENT
- -----------------------------------------------------------------------------------------------------------
1.50% 1.88% 2.30% 2.42% 2.65% 2.84%
2.00% 2.51% 3.07% 3.22% 3.54% 3.78%
2.50% 3.13% 3.84% 4.03% 4.42% 4.73%
3.00% 3.76% 4.61% 4.83% 5.31% 5.67%
3.50% 4.39% 5.38% 5.64% 6.19% 6.62%
4.00% 5.01% 6.14% 6.44% 7.08% 7.56%
4.50% 5.64% 6.91% 7.25% 7.96% 8.51%
5.00% 6.27% 7.68% 8.05% 8.85% 9.45%
5.50% 6.89% 8.45% 8.86% 9.73% 10.40%
6.00% 7.52% 9.22% 9.66% 10.62% 11.34%
</TABLE>
Note: The maximum marginal tax rate for each bracket was used in calculating the
taxable yield equivalent. Furthermore, additional state and local taxes paid on
comparable taxable investments were not used to increase federal deductions.
The charts above are for illustrative purposes only. They are not an indicator
of past or future performance of the Fund.
PERFORMANCE COMPARISONS
- --------------------------------------------------------------------------------
The performance of the Fund depends upon such variables as:
- - portfolio quality;
- - average portfolio maturity;
- - type of instruments in which the portfolio is invested;
- - changes in interest rates and market value of portfolio securities;
- - changes in the Fund's expenses; and
- - 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 as
described above.
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:
- - 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 specific period of time.
From time to time, the Fund will quote its Lipper ranking in the "other states
intermediate municipal debt funds" category in advertising and sales
literature.
- - 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 two
weeks.
- - LEHMAN BROTHERS FIVE-YEAR STATE GENERAL OBLIGATION BONDS is an index comprised
of all state general obligation debt issues with maturities between four and
six years. These bonds are rated A or better and represent a variety of coupon
ranges. Index figures are total returns calculated for one, three and twelve
month periods as well as year-to-date. Total returns are also calculated as of
the index inception December 31, 1979.
- - LEHMAN BROTHERS TEN-YEAR STATE GENERAL OBLIGATION BONDS is an index comprised
of the same issues noted above except that the maturities range between nine
and eleven years. Index figures are total returns calculated for the same
periods as listed above.
Advertisements and other sales literature for the Fund may quote total returns
which are calculated on non-standardized base periods. The total returns
represent the historic change in the value of an investment in the Fund based on
monthly reinvestment of dividends over a specified period of time.
APPENDIX
- --------------------------------------------------------------------------------
STANDARD AND POOR'S CORPORATION MUNICIPAL BOND RATINGS
AAA--Debt rated "AAA" has the highest rating assigned by Standard & Poor's
Corporation. 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.
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.
Plus (+) or minus (-): The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
MOODY'S INVESTORS SERVICE, INC. MUNICIPAL BOND RATINGS
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 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.
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 or municipal 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.
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 strong, but
may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
NR--NR indicates that Fitch does not rate the specific issue.
Plus (+) or Minus (-): Plus and minus signs are used with a rating symbol to
indicate the relative position of a credit within the rating category. Plus and
minus signs, however, are not used in the "AAA" category.
STANDARD AND POOR'S CORPORATION MUNICIPAL NOTE RATINGS
SP-1--Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a plus
sign (+) designation.
SP-2--Satisfactory capacity to pay principal and interest.
MOODY'S INVESTORS SERVICE, INC. SHORT-TERM LOAN RATINGS
MIG1/VMIG1--This designation denotes best quality. There is a present strong
protection by established cash flows, superior liquidity support or demonstrated
broad based access to the market for refinancing.
MIG2/VMIG2--This designation denotes high quality. Margins of protection are
ample although not so large as in the preceding group.
- --------------------------------------------------------------------------------
STANDARD AND POOR'S CORPORATION COMMERCIAL PAPER RATINGS
A-1--This highest category indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong safety
characteristics are denoted with a plus sign (+) designation.
A-2--Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high for issues
designated A-1.
MOODY'S INVESTORS SERVICE, INC. COMMERCIAL PAPER RATINGS
PRIME-1--Issuers rated PRIME-1 (or related supporting institutions) have a
superior capacity for repayment of short-term promissory obligations. PRIME-1
repayment capacity will normally be evidenced by the following characteristics:
- - Leading market positions in well-established industries.
- - High rates of return on funds employed.
- - Conservative capitalization structure with moderate reliance on debt and ample
asset protection.
- - Broad margins in earning coverage of fixed financial charges and high internal
cash generation.
- - Well-established access to a range of financial markets and assured sources of
alternative liquidity.
PRIME-2--Issuers rated PRIME-2 (or related supporting institutions) have a
strong capacity for repayment of short-term promissory 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, will be more subject
to variation. Capitalization characteristics, while still appropriate, may be
more affected by external conditions. Ample alternate liquidity is maintained.
458810405
3081602B (7/94)
PENNSYLVANIA INTERMEDIATE MUNICIPAL TRUST
(A PORTFOLIO OF INTERMEDIATE MUNICIPAL TRUST)
PROSPECTUS
The Shares of Pennsylvania Intermediate Municipal Trust (the "Fund") offered by
this prospectus represent interests in a non-diversified portfolio of securities
which is one of a series of investment portfolios in Intermediate Municipal
Trust (the "Trust"), an open-end management investment company (a mutual fund).
The investment objective of the Fund is to provide current income which is
exempt from federal regular income tax and the personal income taxes imposed by
the Commonwealth of Pennsylvania. The Fund invests primarily in a portfolio of
Pennsylvania municipal securities including securities of states, territories
and possessions of the United States which are not issued by or on behalf of the
Commonwealth of Pennsylvania or its political subdivisions, but which are exempt
from federal regular income tax and Pennsylvania state personal income taxes.
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
GOVERNMENTAL AGENCY. INVESTMENT IN THESE 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 July 31,
1994, with the Securities and Exchange Commission. The information contained in
the Statement of Additional Information is incorporated by reference into this
prospectus. You may request a copy of the Statement of Additional Information
free of charge by calling 1-800-235-4669. To obtain other information or to make
inquiries about the Fund, contact the Fund at the address listed in the back of
this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus dated July 31, 1994
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
SUMMARY OF FUND EXPENSES 1
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS 2
- ------------------------------------------------------
GENERAL INFORMATION 3
- ------------------------------------------------------
INVESTMENT INFORMATION 3
- ------------------------------------------------------
Investment Objective 3
Investment Policies 3
Acceptable Investments 3
Average Maturity 4
Characteristics 4
Participation Interests 4
Variable Rate Municipal Securities 4
Municipal Leases 5
When-Issued and Delayed
Delivery Transactions 5
Temporary Investments 5
Pennsylvania Municipal Securities 6
Investment Risks 6
Non-Diversification 6
Investment Limitations 7
INTERMEDIATE MUNICIPAL TRUST
INFORMATION 7
- ------------------------------------------------------
Management of the Trust 7
Board of Trustees 7
Investment Adviser 7
Advisory Fees 8
Adviser's Background 8
Distribution of Fund Shares 8
Administration of the Fund 9
Administrative Services 9
Shareholder Services Plan 9
Other Payments to Financial Institutions 9
Custodian 9
Transfer Agent and Dividend
Disbursing Agent 9
Legal Counsel 9
Independent Public Accountants 9
Expenses of the Fund 10
NET ASSET VALUE 10
- ------------------------------------------------------
INVESTING IN THE FUND 10
- ------------------------------------------------------
Share Purchases 10
By Wire 10
By Mail 10
Subaccounting Services 11
Minimum Investment Required 11
What Shares Cost 11
Exchanging Securities for Fund Shares 11
Certificates and Confirmations 11
Dividends and Distributions 12
Capital Gains 12
REDEEMING SHARES 12
- ------------------------------------------------------
By Telephone 12
By Mail 12
Signatures 13
Accounts with Low Balances 13
SHAREHOLDER INFORMATION 13
- ------------------------------------------------------
Voting Rights 13
Massachusetts Partnership Law 14
TAX INFORMATION 14
- ------------------------------------------------------
Federal Income Tax 14
Pennsylvania Taxes 15
Other State and Local Taxes 15
PERFORMANCE INFORMATION 16
- ------------------------------------------------------
FINANCIAL STATEMENTS 17
- ------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 27
- ------------------------------------------------------
ADDRESSES Inside Back Cover
- ------------------------------------------------------
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)........... None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price)................................................. None
Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds as applicable)................................ None
Redemption Fee........................................................................ None
Exchange Fee.......................................................................... None
ANNUAL FUND OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver)(1)...................................................... 0.00%
12b-1 Fee............................................................................. None
Total Other Expenses (after expense reimbursement).................................... 0.45%
Shareholder Services Fee(2)............................................. 0.05%
Total Fund Operating Expenses(3)............................................ 0.45%
</TABLE>
(1) The management fee has been reduced to reflect the voluntary waiver of the
management fee. The adviser can terminate this voluntary waiver at any time at
its sole discretion. The maximum management fee is 0.50%.
(2) The maximum shareholder services fee is 0.25%.
(3) The Total Fund Operating Expenses in the table above are based on expenses
expected during the fiscal year ending May 31, 1995. The Total Fund Operating
Expenses were 0.25% for the fiscal year ended May 31, 1994 and were 5.31% absent
the voluntary waiver of the management fee and the voluntary reimbursement of
certain other operating expenses.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF THE FUND WILL BEAR, EITHER
DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE VARIOUS COSTS AND
EXPENSES, SEE "INVESTING IN THE FUND" AND "INTERMEDIATE MUNICIPAL TRUST
INFORMATION." WIRE-TRANSFERRED REDEMPTIONS OF LESS THAN $5,000 MAY BE SUBJECT TO
ADDITIONAL FEES.
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years
- --------------------------------------------------------------------------- ------ -------
<S> <C> <C>
You would pay the following expenses on a $1,000 investment assuming
(1) 5% annual return and (2) redemption at the end of each time
period................................................................... $5 $14
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
PENNSYLVANIA INTERMEDIATE MUNICIPAL TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Reference is made to the Report of Independent Public Accountants on page 27.
<TABLE>
<CAPTION>
YEAR ENDED
MAY 31, 1994*
--------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.00
- -----------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------------
Net investment income 0.23
- -----------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.15)
- ----------------------------------------------------------------------- ----------
Total from investment operations 0.08
- -----------------------------------------------------------------------
LESS DISTRIBUTIONS
- -----------------------------------------------------------------------
Dividends to shareholders from net investment income (0.23)
- ----------------------------------------------------------------------- ----------
NET ASSET VALUE, END OF PERIOD $9.85
- ----------------------------------------------------------------------- ----------
TOTAL RETURN** 0.76%
- -----------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------------------------------------------------
Expenses 0.25%(a)
- -----------------------------------------------------------------------
Net investment income 4.76%(a)
- -----------------------------------------------------------------------
Expense waiver/reimbursement (b) 5.06%(a)
- -----------------------------------------------------------------------
SUPPLEMENTAL DATA
- -----------------------------------------------------------------------
Net assets, end of period (000 omitted) $2,881
- -----------------------------------------------------------------------
Portfolio turnover rate 39%
- -----------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from December 5, 1993 (date of initial
public investment) to May 31, 1994.
** Based on net asset value which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(a) Computed on an annualized basis.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(See Notes which are an integral part of the Financial Statements)
Further information about the Fund's performance is contained in the Fund's
annual report for the period ended May 31, 1994, which can be obtained free of
charge.
GENERAL INFORMATION
- --------------------------------------------------------------------------------
Intermediate Municipal Trust (the "Trust") was established as a Massachusetts
business trust under a Declaration of Trust dated May 31, 1985. The Declaration
of Trust permits the Trust to offer separate series of shares of beneficial
interest representing interests in separate portfolios of securities. The shares
in any one portfolio may be offered in separate classes.
Shares of the Fund are designed for the investment of moneys generally held by
financial institutions in a fiduciary capacity. A minimum initial investment of
$25,000 over a 90-day period is required. The Fund is not likely to be a
suitable investment for non-Pennsylvania taxpayers or retirement plans since
Pennsylvania municipal securities are not likely to produce competitive
after-tax yields for such persons and entities when compared to other
investments.
Shares are sold and redeemed at net asset value without a sales charge imposed
by the Fund.
INVESTMENT INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide current income exempt from
federal regular income tax and the personal income taxes imposed by the
Commonwealth of Pennsylvania. Interest income of the Fund that is exempt from
federal regular income tax and Pennsylvania state personal income tax retains
its tax-free status when distributed to the Fund's shareholders. The Fund
pursues its investment objective by investing at least 80% of its net assets in
a diversified portfolio of Pennsylvania municipal securities. The portfolio has
a dollar-weighted average maturity of not less than three or more than ten
years. 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. The investment objective and the policy stated above cannot
be changed without approval of shareholders.
INVESTMENT POLICIES
The investment policies described below may be changed by the Trustees without
shareholder approval. Shareholders will be notified before any material change
in these policies becomes effective.
ACCEPTABLE INVESTMENTS. The Pennsylvania municipal securities in which the Fund
invests are:
- obligations issued by or on behalf of the Commonwealth of Pennsylvania,
its political subdivisions, or agencies;
- debt obligations of any state, territory, or possession of the United
States, or any political subdivision of any of these; and
- participation interests, as described below, in any of the above
obligations,
the interest from which is, in the opinion of bond counsel for the issuers or in
the opinion of officers of the Fund and/or the investment adviser to the Fund,
exempt from both federal regular income tax and the personal income taxes
imposed by the Commonwealth of Pennsylvania.
The prices of fixed income securities fluctuate inversely to the direction of
interest rates.
AVERAGE MATURITY. The dollar-weighted average maturity of the Fund's
portfolio of Pennsylvania municipal securities will not be less than three
years or more than ten years. For purposes of determining the
dollar-weighted average maturity of the Fund's portfolio, the maturity of a
municipal security will be its ultimate maturity, unless it is probable
that the issuer of the security will take advantage of maturity-shortening
devices such as a call, refunding, or redemption provision, in which case
the maturity date will be the date on which it is probable that the
security will be called, refunded, or redeemed. If the municipal security
includes the right to demand payment, the maturity of the security for
purposes of determining the Fund's dollar-weighted average portfolio
maturity will be the period remaining until the principal amount of the
security can be recovered by exercising the right to demand payment.
CHARACTERISTICS. The municipal securities in which the Fund invests are:
- rated within the three highest ratings for municipal securities by
Moody's Investors Service, Inc. ("Moody's") (Aaa, Aa, or A), Standard &
Poor's Corporation ("Standard & Poor's") (AAA, AA, or A) or Fitch
Investors Service, Inc. ("Fitch") (AAA, AA or A);
- guaranteed at the time of purchase by the U.S. government as to the
payment of principal and interest;
- fully collateralized by an escrow of U.S. government securities or other
securities acceptable to the Fund's adviser;
- rated at the time of purchase within Moody's highest short-term municipal
obligation rating (MIG1/VMIG1) or Moody's highest municipal commercial
paper rating (P-1) or Standard & Poor's highest municipal commercial
paper rating (SP-1);
- unrated if, at the time of purchase, other municipal securities of that
issuer are rated A or better by Moody's, Standard & Poor's or Fitch; or
- unrated if determined to be of equivalent quality to one of the foregoing
rating categories by the Fund's investment adviser.
If a security is subsequently downgraded, the adviser will determine
whether it continues to be an acceptable investment; if not, the security
will be sold. A description of the ratings categories is contained in the
Appendix to the Statement of Additional Information.
PARTICIPATION INTERESTS. The Fund may purchase participation interests
from financial institutions such as commercial banks, savings and loan
associations, and insurance companies. These participation interests give
the Fund an undivided interest in Pennsylvania municipal securities. The
financial institutions from which the Fund purchases participation
interests frequently provide or secure irrevocable letters of credit or
guarantees to assure that the participation interests are of high quality.
The Board of Trustees (the "Trustees") will determine that participation
interests meet the prescribed quality standards for the Fund.
VARIABLE RATE MUNICIPAL SECURITIES. Some of the Pennsylvania municipal
securities which the Fund purchases may have variable interest rates.
Variable interest rates are ordinarily stated as a percentage of a
published interest rate, interest rate index, or a similar standard, such
as the 91-day U.S. Treasury bill rate. Many variable rate municipal
securities are subject to payment of principal on demand by the Fund in not
more than seven days. All variable rate municipal
securities will meet the quality standards for the Fund. The Fund's
investment adviser has been instructed by the Trustees to monitor the
pricing, quality, and liquidity of the variable rate municipal securities,
including participation interests held by the Fund on the basis of
published financial information and reports of the rating agencies and
other analytical services.
MUNICIPAL LEASES. Also included within the general category of municipal
securities are certain lease obligations or installment purchase contract
obligations and participations therein (hereinafter collectively called
"lease obligations") of municipal authorities or entities. Although lease
obligations do not constitute general obligations of the municipality for
which the municipality's taxing power is pledged, a lease obligation is
ordinarily backed by the municipality's covenant to budget for, appropriate
and make the payments due under the lease obligation. Interest on lease
obligations is tax-exempt to the same extent as if the municipality had
issued debt obligations to finance the underlying project or purchase.
However, certain lease obligations contain "non-appropriation" clauses
which provide that the municipality has no obligation to make lease or
installment purchase payments in future years unless money is appropriated
for such purpose on a yearly basis. In addition to the "non-appropriation"
risk, these securities represent a relatively new type of financing that
has not yet developed the depth of marketability associated with more
conventional bonds, and some lease obligations may be illiquid. Although
"non-appropriation" lease obligations are generally secured by the leased
property, disposition of the property in the event of foreclosure might
prove difficult. In addition, the tax treatment of such obligations in the
event of "non-appropriation" is unclear. The Fund does not intend to invest
more than 10% of its total assets in lease obligations that contain
"non-appropriation" clauses.
If the Fund purchases unrated municipal leases, the Trustees will be
responsible for determining, on an ongoing basis, the credit quality of
such leases and the likelihood that such lease will not be cancelled.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase
Pennsylvania municipal securities on a when-issued or delayed delivery basis. In
when-issued and delayed delivery transactions, the Fund relies on the seller to
complete the transaction. The seller's failure to complete the transaction may
cause the Fund to miss a price or yield considered to be advantageous.
TEMPORARY INVESTMENTS. The Fund normally invests its assets in Pennsylvania
municipal securities, as described above. However, from time to time, when the
investment adviser determines that market conditions call for a temporary
defensive posture, the Fund may invest in short-term non-Pennsylvania municipal
tax-exempt obligations or taxable temporary investments. These temporary
investments include: notes issued by or on behalf of municipal or corporate
issuers; obligations issued or guaranteed by the U.S. government, its agencies,
or instrumentalities; other debt securities; commercial paper; certificates of
deposit of banks; and repurchase agreements (arrangements in which the
organization selling the Fund a bond or temporary investment agrees at the time
of sale to repurchase it at a mutually agreed upon time and price).
There are no rating requirements applicable to temporary investments with the
exception of temporary municipal securities which are subject to the same rating
requirements as all other municipal securities in which the Fund invests.
However, the investment adviser will limit temporary investments to those it
considers to be of comparable quality to the acceptable investments in the Fund.
Although the Fund is permitted to make taxable, temporary investments, there is
no current intention of generating income subject to federal regular income tax
or Pennsylvania state personal income tax.
PENNSYLVANIA MUNICIPAL SECURITIES
Pennsylvania municipal securities are generally issued to finance public works,
such as airports, bridges, highways, housing, hospitals, mass transportation
projects, schools, streets, and water and sewer works. They are also issued to
repay outstanding obligations, to raise funds for general operating expenses,
and to make loans to other public institutions and facilities.
Pennsylvania municipal securities include industrial development bonds issued by
or on behalf of public authorities to provide financing aid to acquire sites or
construct and equip facilities for privately or publicly owned corporations. The
availability of this financing encourages these corporations to locate within
the sponsoring communities and thereby increases local employment.
The two principal classifications of municipal securities are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its full faith and credit and taxing power for the payment of
principal and interest. However, interest on and principal of revenue bonds are
payable only from the revenue generated by the facility financed by the bond or
other specified sources of revenue. Revenue bonds do not represent a pledge of
credit or create any debt of or charge against the general revenues of a
municipality or public authority. Industrial development bonds are typically
classified as revenue bonds.
INVESTMENT RISKS
Yields on Pennsylvania municipal securities depend on a variety of factors,
including, but not limited to: the general conditions of the municipal bond
market; the size of the particular offering; the maturity of the obligations;
and the rating of the issue. Further, any adverse economic conditions or
developments affecting the Commonwealth of Pennsylvania or its municipalities
could impact the Fund's portfolio. The ability of the Fund to achieve its
investment objective also depends on the continuing ability of the issuers of
Pennsylvania municipal securities and participation interests, or the guarantors
of either, to meet their obligations for the payment of interest and principal
when due. Investing in Pennsylvania municipal securities which meet the Fund's
quality standards may not be possible if the Commonwealth of Pennsylvania or its
municipalities do not maintain their current credit ratings. In addition, any
Pennsylvania constitutional amendments, legislative measures, executive orders,
administrative regulations, and voter initiatives could result in adverse
consequences affecting Pennsylvania municipal securities.
NON-DIVERSIFICATION
The Fund is a non-diversified investment portfolio. As such, there is no limit
on the percentage of assets which can be invested in any single issuer. An
investment in the Fund, therefore, will entail greater risk than would exist in
a diversified portfolio of securities because the higher percentage of
investments among fewer issuers may result in greater fluctuation in the total
market value of the Fund's portfolio. Any economic, political, or regulatory
developments affecting the value of the securities in the Fund's portfolio will
have a greater impact on the total value of the portfolio than would be the case
if the portfolio were diversified among more issuers.
The Fund intends to comply with Subchapter M of the Internal Revenue Code, as
amended. This undertaking requires that at the end of each quarter of the
taxable year, with regard to at least 50% of the Fund's total assets, no more
than 5% of its total assets are invested in the securities of a single issuer;
beyond that, no more than 25% of its total assets are invested in the securities
of a single issuer.
INVESTMENT LIMITATIONS
The Fund will not 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 arrangement to buy it back on a set date) or pledge
securities except, under certain circumstances, the Fund may borrow up to
one-third of the value of its total assets and pledge up to 10% of the value of
total assets to secure such borrowings. The Fund does not intend to make any
borrowing during the coming fiscal year.
The above investment limitations cannot be changed without shareholder approval.
The following limitations, however, can be changed by the Trustees without
shareholder approval. Shareholders will be notified before any material change
in these limitations becomes effective.
In order to pass-through to investors the tax-free income from the Fund for
purposes of Pennsylvania state personal income taxes, the Fund will invest in
securities for income earnings rather than trading for profit. The Fund will not
vary its investments, except to: (i) eliminate unsafe investments and
investments not consistent with the preservation of the capital or the tax
status of the investments of the Fund; (ii) honor redemption orders, meet
anticipated redemption requirements, and negate gains from discount purchases;
(iii) reinvest the earnings from securities in like securities; or (iv) defray
normal administrative expenses (the "Pennsylvania Investment Restrictions").
Legislation enacted in December, 1993, eliminates the necessity of the
Pennsylvania Investment Restrictions. Consequently, the Trustees may vote to
eliminate the Pennsylvania Investment Restrictions.
The Fund will not invest more than 15% of its net assets in securities which are
illiquid, including repurchase agreements providing for settlement in more than
seven days after notice, and restricted securities determined by the Trustees
not to be liquid.
INTERMEDIATE MUNICIPAL TRUST INFORMATION
- --------------------------------------------------------------------------------
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees. The Trustees
are responsible for managing the business affairs of the Trust and for
exercising all of the powers of the Trust except those reserved for the
shareholders. The Executive Committee of the Board of Trustees handles the
Board's responsibilities between meetings of the Board.
INVESTMENT ADVISER. Pursuant to an investment advisory contract with the Trust,
investment decisions for the Fund are made by Federated Management, the Fund's
investment adviser (the "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 Fund's Adviser receives an annual investment advisory
fee equal to .50 of 1% of the Fund's average daily net assets. Under the
investment advisory contract, the Adviser may reimburse the Fund the
amount, limited to the amount of the advisory fee, by which the Fund's
aggregate annual operating expenses, including its investment advisory fee,
but excluding interest, taxes, brokerage commissions, insurance premiums,
expenses of registering and qualifying the Fund and its shares under
federal and state laws, expenses of withholding taxes, and extraordinary
expenses, exceed a certain percentage of its average daily net assets. This
does not include reimbursement to the Fund of any expenses incurred by
shareholders who use the transfer agent's sub-accounting facilities. The
Adviser can terminate this voluntary reimbursement of expenses at any time
at 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.
Jonathan C. Conley has been the Fund's co-portfolio manager since the
Fund's inception. Mr. Conley joined Federated Investors in 1979 and has
been a Vice President of the Adviser since 1982. Mr. Conley is a Chartered
Financial Analyst and received his M.B.A. in Finance from the University of
Virginia.
J. Scott Albrecht has been the Fund's co-portfolio manager since the Fund's
inception. Mr. Albrecht joined Federated Investors in 1989 and has been an
Assistant Vice President of the Adviser since 1992. From 1989 until 1991,
Mr. Albrecht acted as an investment analyst. Mr. Albrecht was a municipal
credit analyst at Mellon Bank, N.A. from 1985 until 1989. Mr. Albrecht is a
Chartered Financial Analyst and received his M.S. in Management from
Carnegie Mellon University.
Federated Management and other subsidiaries of Federated Investors serve as
investment advisers to a number of investment companies and private
accounts. Certain other subsidiaries also provide administrative services
to a number of investment companies. Total assets under management or
administration by these and other subsidiaries of Federated Investors are
approximately $70 billion. Federated Investors, which was founded in 1956
as Federated Investors, Inc., develops and manages mutual funds primarily
for the financial industry. Federated Investors' track record of
competitive performance and its disciplined, risk averse investment
philosophy serve approximately 3,500 client institutions nationwide.
Through these same client institutions, individual shareholders also have
access to this same level of investment expertise.
DISTRIBUTION OF FUND SHARES
Federated Securities Corp. is the principal distributor for shares of the Fund.
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.
ADMINISTRATION OF THE FUND
ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, provides administrative personnel and services (including
certain legal and financial reporting services) necessary to operate the Fund.
Federated Administrative Services provides these at an annual rate, which
relates to the average aggregate daily net assets of all funds advised by
subsidiaries of Federated Investors (the "Federated Funds") as specified below:
<TABLE>
<CAPTION>
MAXIMUM AVERAGE AGGREGATE DAILY NET
ADMINISTRATIVE FEE ASSETS OF THE FEDERATED FUNDS
- --------------------- ------------------------------------
<S> <C>
0.15 of 1% on the first $250 million
0.125 of 1% on the next $250 million
0.10 of 1% on the next $250 million
0.075 of 1% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
Federated Administrative Services may choose voluntarily to waive a portion of
its fee.
SHAREHOLDER SERVICES PLAN. The Trust has adopted a Shareholder Services Plan
(the "Services Plan"), under which it may make payments up to 0.25 of 1% of the
average daily net asset value of the Institutional Shares to obtain certain
personal services for shareholders and the maintenance of shareholder accounts
("shareholder services"). The Trust has entered into a Shareholder Services
Agreement with Federated Shareholder Services, a subsidiary of Federated
Investors, under which Federated Shareholder Services will either perform
shareholder services directly or will select financial institutions to perform
shareholder services. Financial institutions will receive fees based upon shares
owned by their clients or customers. The schedules of such fees and the basis
upon which such fees will be paid will be determined, from time to time, by the
Trust and Federated Shareholder Services.
OTHER PAYMENTS TO FINANCIAL INSTITUTIONS. In addition to periodic payments to
financial institutions under the Shareholder Services Plan, certain financial
institutions may be compensated by the Adviser or its affiliates for the
continuing investment of customers' assets in certain funds, including the Fund,
advised by those entities. These payments will be made directly by the
distributor or Adviser from their assets, and will not be made from the assets
of the Fund or by the assessment of a sales charge on shares.
CUSTODIAN. State Street Bank and Trust Company ("State Street Bank"), Boston,
Massachusetts, is custodian for the securities and cash of the Fund.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated Services Company,
Pittsburgh, Pennsylvania, with offices in Boston, Massachusetts, is transfer
agent for the Shares of the Fund, and dividend disbursing agent for the Fund.
LEGAL COUNSEL. Legal counsel is provided by Houston, Houston & Donnelly,
Pittsburgh, Pennsylvania, and Dickstein, Shapiro & Morin, L.L.P., Washington,
D.C.
INDEPENDENT PUBLIC ACCOUNTANTS. The independent public accountants for the Fund
are Arthur Andersen & Co., Pittsburgh, Pennsylvania.
EXPENSES OF THE FUND
Holders of shares pay their allocable portion of Fund and Trust expenses.
The Trust expenses for which shareholders 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 shareholders pay their allocable portion include,
but are not limited to: registering the Fund and 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.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The Fund's net asset value per share fluctuates. It is determined by dividing
the sum of all securities and other assets, less liabilities, by the number of
shares outstanding.
INVESTING IN THE FUND
- --------------------------------------------------------------------------------
SHARE PURCHASES
Shares of the Fund are sold on days on which the New York Stock Exchange is open
for business. Shares may be purchased either by wire or mail. The Fund reserves
the right to reject any purchase request.
To purchase shares of the Fund, open an account by calling Federated Securities
Corp. Information needed to establish the account will be taken over the
telephone.
BY WIRE. To purchase shares of the Fund by Federal Reserve wire, call the Fund
before 4:00 P.M. (Eastern time) to place an order. The order is considered
received immediately. Payment by federal funds must be received before 3:00 P.M.
(Eastern time) on the next business day following the order. Federal funds
should be wired as follows: State Street Bank and Trust Company, Boston,
Massachusetts, Attention: EDGEWIRE: For Credit to: Pennsylvania Intermediate
Municipal Trust; Fund Number (this number can be found on the Account Statement
or by contacting the Fund); Group Number or Order Number; Nominee or Institution
Name; and ABA Number 011000028. Shares cannot be purchased on days on which the
New York Stock Exchange is closed and on federal holidays restricting wire
transfers.
BY MAIL. To purchase shares of the Fund by mail, send a check made payable to
Pennsylvania Intermediate Municipal Trust to the Fund's transfer agent,
Federated Services Company, c/o State Street Bank and Trust Company, P.O. Box
8602, Boston, Massachusetts 02266-8602. Orders by mail are considered received
when payment by check is converted by the transfer agent's bank, State Street
Bank, into federal funds. This is normally the next business day after State
Street Bank receives the check.
SUBACCOUNTING SERVICES
Financial institutions are encouraged to open single master accounts. However,
certain financial institutions may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent may charge a fee based on the level of subaccounting services
rendered. Financial institutions holding shares in a fiduciary, agency,
custodial, or similar capacity may charge or pass through subaccounting fees as
part of or in addition to normal trust or agency account fees. They may also
charge fees for other services provided which may be related to the ownership of
shares. This prospectus should, therefore, be read together with any agreement
between the customer and the institution with regard to the services provided,
the fees charged for those services, and any restrictions and limitations
imposed.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment in the Fund is $25,000, plus any non-affiliated
bank or broker's fee, if applicable. However, an account may be opened with a
smaller amount as long as the $25,000 minimum is reached within 90 days. An
institutional investor's minimum investment will be calculated by combining all
accounts it maintains with the Fund.
Individual accounts established through a bank or broker may be subject to a
different minimum investment requirement.
WHAT SHARES COST
Shares of the Fund are sold at their net asset value next determined after an
order is received. There is no sales charge imposed by the Fund. Investors who
purchase shares through a non-affiliated bank or broker may be charged an
additional service fee by that bank or broker.
The net asset value is determined at 4:00 P.M. (Eastern time), 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.
EXCHANGING SECURITIES FOR FUND SHARES
Investors may exchange certain municipal securities or a combination of
securities and cash for Fund shares. The securities and cash must have a market
value of at least $25,000. The Fund reserves the right to determine the
acceptability of the securities to be exchanged. Securities accepted by the Fund
are valued in the same manner as the Fund values its assets. Shareholders
wishing to exchange securities should first contact Federated Securities Corp.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Fund, Federated Services Company maintains a share
account for each shareholder. Share certificates are not issued unless requested
in writing.
Detailed confirmations of each purchase and redemption are sent to each
shareholder. Monthly confirmations are sent to report dividends paid during that
month.
DIVIDENDS AND DISTRIBUTIONS
Dividends are declared daily and paid monthly 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, unless shareholders request cash payments on the new
account form or by writing to Federated Services Company. All shareholders on
the record date are entitled to the dividend.
CAPITAL GAINS
Distributions of net realized long term capital gains realized by the Fund, if
any, will be made at least once every twelve months.
REDEEMING SHARES
- --------------------------------------------------------------------------------
The Fund redeems shares at their net asset value next determined after State
Street Bank receives the redemption request. Redemptions will be made on days on
which the Fund computes its net asset value. Redemption requests must be
received in proper form and can be made by telephone request or by written
request.
In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If such a case should occur, another
method of redemption, such as "By Mail," should be considered.
BY TELEPHONE. Shareholders may redeem their shares by telephoning the Fund
before 4:00 P.M. (Eastern time). All proceeds will normally be wire transferred
the following business day, but in no event more than seven days, to the
shareholder's account at a domestic commercial bank that is a member of the
Federal Reserve System. If at any time the Fund shall determine it necessary to
terminate or modify this method of redemption, shareholders would be promptly
notified.
An authorization form permitting the Fund to accept telephone redemption
requests must first be completed. It is recommended that investors request this
privilege at the time of their initial application. If not completed at the time
of initial application, authorization forms and information on this service can
be obtained through Federated Securities Corp. Telephone redemption instructions
may be recorded. If reasonable procedures are not followed by the Fund, it may
be liable for losses due to unauthorized or fraudulent telephone instructions.
BY MAIL. Shareholders may redeem shares by sending a written request to the
Fund. The written request should include the shareholder's name, the Fund name
the account number, and the share or dollar amount requested. If share
certificates have been issued, they must be properly endorsed and should be sent
by registered or certified mail with the written request.
SIGNATURES. Shareholders requesting a redemption of $50,000 or more, 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 signatures on written redemption requests guaranteed by:
- a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund, which is administered by the Federal Deposit Insurance
Corporation ("FDIC");
- a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchange;
- a savings bank or savings and loan association whose deposits are insured
by the Savings Association Insurance Fund, which is administered by the
FDIC; or
- any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.
The 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.
Normally, a check for the proceeds is mailed to the shareholder within one
business day, but in no event more than seven days, after receipt of a proper
written redemption request provided State Street Bank has received payment for
shares from the shareholder.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Fund may
redeem shares in any account and pay the proceeds to the shareholder if the
account balance falls below the required minimum value of $25,000 due to
shareholder redemptions. This requirement does not apply, however, if the
balance falls below $25,000 because of changes in the Fund's net asset value.
Before shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional shares to meet the minimum
requirement.
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS
Each share of the Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of all classes of
each portfolio 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 of July 1, 1994, Univest & Company, Souderton, PA, owned
42.66% of the voting securities of the Fund, and, therefore, may, for certain
purposes, be deemed to control the Fund and be able to affect the outcome of
certain matters presented for a vote of shareholders.
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 for this
purpose shall be called by
the Trustees upon the written request of shareholders owning at least 10% of the
outstanding shares of all series in the Trust entitled to vote.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for acts or obligations of the Trust. To
protect shareholders of the Fund, the Trust has filed legal documents with
Massachusetts that expressly disclaim the liability of shareholders for such
acts or obligations of the Trust. These documents require notice of this
disclaimer to be given in each agreement, obligation, or instrument that the
Trust or its Trustees enter into or sign.
In the unlikely event a shareholder of the Fund 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 cannot meet its obligations to indemnify shareholders and pay
judgments against them from its assets.
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects to meet requirements
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. 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.
Shareholders are not required to pay federal regular income tax on any dividends
received from the Fund that represent net interest on tax-exempt municipal
bonds. However, dividends representing net interest income earned on some
municipal bonds may be included in calculating the federal individual
alternative minimum tax or the federal alternative minimum tax for corporations.
The alternative minimum tax, up to 28% of alternative minimum taxable income for
individuals and 20% for corporations, applies when it exceeds the regular tax
for the taxable year. Alternative minimum taxable income is equal to the regular
taxable income of the taxpayer increased by certain "tax preference" items not
included in regular taxable income and reduced by only a portion of the
deductions allowed in the calculation of the regular tax.
Interest on certain "private activity" bonds issued after August 7, 1986, is
treated as a tax preference item for both individuals and corporations. Unlike
traditional governmental purpose municipal bonds, which finance roads, schools,
libraries, prisons, and other public facilities, private activity bonds provide
benefits to private parties. The Fund may purchase all types of municipal bonds,
including private activity bonds. Thus, should it purchase any such bonds, a
portion of the Fund's dividends may be treated as a tax preference item.
In addition, in the case of a corporate shareholder, dividends of the Fund which
represent interest on municipal bonds will become subject to the 20% corporate
alternative minimum tax because the
dividends are included in a corporation's "adjusted current earnings." The
corporate alternative minimum tax treats 75% of the excess of a taxpayer's
pre-tax "adjusted current earnings" over the taxpayer's alternative minimum
taxable income as a tax preference item. "Adjusted current earnings" is based
upon the concept of a corporation's "earnings and profits." Since "earnings and
profits" generally includes the full amount of any Fund dividend, and
alternative minimum taxable income does not include the portion of the Fund's
dividend attributable to municipal bonds which are not private activity bonds,
the difference will be included in the calculation of the corporation's
alternative minimum tax.
Dividends of the Fund representing net interest income earned on some temporary
investments and any realized net short-term gains are taxed as ordinary income.
These tax consequences apply whether dividends are received in cash or as
additional shares. Information on the tax status of dividends and distributions
is provided annually.
PENNSYLVANIA TAXES
The Fund has received a ruling from the Commonwealth of Pennsylvania Department
of Revenue that interest or gain derived by the Fund from obligations free from
state taxation in Pennsylvania is not taxable on pass-through to Fund
shareholders for purposes of Pennsylvania personal income taxes. This is based
upon the existence of the Pennsylvania Investment Restrictions (see "Investment
Limitations"). However, legislation enacted in December, 1993, eliminates the
necessity of the Pennsylvania Investment Restrictions. That legislation also
generally repeals the Pennsylvania personal income tax exemption for gains from
the sale of tax-exempt obligations, including the exemption for distributions
from the Fund to the extent they are derived from gains from tax-exempt
obligations.
In the opinion of Houston, Houston & Donnelly, counsel to the Fund:
- the Fund would not be liable to pay Pennsylvania corporate or personal
property taxes; and
- Fund shares are exempt from personal property taxes imposed by counties
in Pennsylvania to the extent that the the Fund invests in obligations
that are exempt from such taxes.
OTHER STATE AND LOCAL TAXES
Income from the Fund is not necessarily free from state income taxes in states
other than Pennsylvania or from personal property taxes. State laws differ on
this issue, and 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, yield, and
tax-equivalent yield.
Total return represents the change, over a specific period of time, in the value
of an investment in the Fund 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 the Fund is calculated by dividing the net investment income per
share (as defined by the Securities and Exchange Commission) earned by the Fund
over a thirty-day period by the maximum offering price per share of the Fund on
the last day of the period. This number is then annualized using semi-annual
compounding. The tax-equivalent yield of the Fund is calculated similarly to the
yield, but is adjusted to reflect the taxable yield that the Fund would have had
to earn to equal its actual yield, assuming a specific tax rate. The yield and
the tax-equivalent yield do not necessarily reflect income actually earned by
the Fund and, therefore, may not correlate to the dividends or other
distributions paid to shareholders.
From time to time, the Fund may advertise its performance using certain
financial publications and/or compare its performance to certain indices.
PENNSYLVANIA INTERMEDIATE MUNICIPAL TRUST
PORTFOLIO OF INVESTMENTS
MAY 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- --------- ----------------------------------------------------------- ------- ----------
<C> <C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--22.6%
- --------------------------------------------------------------------------
$100,000 Government Development Bank of Puerto Rico, Weekly VRDNs,
(Credit Suisse and Sumitomo Bank Ltd. LOCs) VMIG1 $ 100,000
-----------------------------------------------------------
100,000 Government Development Bank of Puerto Rico, Weekly VRDNs,
(Credit Suisse and Sumitomo Bank Ltd. LOCs) VMIG1 100,000
-----------------------------------------------------------
300,000 Government Development Bank of Puerto Rico, Weekly VRDNs,
(Credit Suisse and Sumitomo Bank Ltd. LOCs) VMIG1 300,000
-----------------------------------------------------------
150,000 Government Development Bank of Puerto Rico, Weekly VRDNs,
(Credit Suisse and Sumitomo Bank Ltd. LOCs) VMIG1 150,000
----------------------------------------------------------- ----------
TOTAL SHORT-TERM MUNICIPAL SECURITIES
(AT AMORTIZED COST) 650,000
----------------------------------------------------------- ----------
INTERMEDIATE-TERM MUNICIPAL SECURITIES--97.1%
- --------------------------------------------------------------------------
100,000 Allegheny County, PA, 6.00% UT GO Bonds (Series C-39)/
(AMBAC Insured)/(Original Issue Yield: 6.098%), 5/1/2012 Aaa 100,141
-----------------------------------------------------------
</TABLE>
<TABLE>
<C> <C> <S> <C> <C>
100,000 Altoona Area School District, PA, 5.35% GO Bonds
(Series 1994), 1/15/2004 AAA 97,971
-----------------------------------------------------------
125,000 Bedford Area School District, Bedford County, PA, 5.45% GO
Bonds (Series A-1994)/(MBIA Insured), 4/15/2003 AAA 126,658
-----------------------------------------------------------
125,000 Borough of Franklin Park, PA, 5.50% GO Bonds (Series
1994)/(AMBAC Insured), 11/1/2004 AAA 126,376
-----------------------------------------------------------
100,000 Central Bucks School District, Bucks County, PA, 5.40% GO
Bonds (Series 1994)/(FGIC Insured), 5/15/2003 AAA 100,104
-----------------------------------------------------------
100,000 Chester County, PA, Health and Education Facilities
Authority, 4.80% Revenue Bonds (Main Line Health System)/
(Series A-1994)/(Original Issue Yield: 4.90%), 5/15/2003 AA- 92,513
-----------------------------------------------------------
100,000 City of Allentown School District, Lehigh County, PA, 5.35%
GO Bonds (Series B-1994)/(AMBAC Insured), 8/15/2003 Aaa 100,396
-----------------------------------------------------------
100,000 Dauphin County, PA, 5.20% UT GO Bonds (Series B)/
(MBIA Insured)/(Original Issue Yield: 5.30%), 3/15/2004 Aaa 97,817
-----------------------------------------------------------
</TABLE>
PENNSYLVANIA INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
[6~
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- --------- ----------------------------------------------------------- ------- ----------
<C> <C> <S> <C> <C>
INTERMEDIATE-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------
$100,000 Delaware County, PA, Authority Hospital, 4.50% Revenue
Bonds (Crozer-Chester Medical Center)/(MBIA Insured)/
(Original Issue Yield: 4.60%), 12/15/2001 Aaa $ 94,780
-----------------------------------------------------------
125,000 Eastern York School District, PA, 5.55% GO Bonds, 6/1/2003 Aaa 127,573
-----------------------------------------------------------
100,000 Easton, PA, Area Joint Sewer Authority, 6.00% Refunding
Revenue Bonds (Asset Guaranty Insured), 4/1/2006 AA 102,722
-----------------------------------------------------------
100,000 Lancaster, PA, Industrial Development Authority, 6.50%
Refunding Revenue Bonds (Union Camp Corporation Project),
3/1/2004 A 108,085
-----------------------------------------------------------
100,000 Norristown Area School District, Montgomery County, PA,
4.45% GO Bonds (Series 1994), 9/1/2003 Aa 91,371
-----------------------------------------------------------
100,000 Pennsylvania HFA, 5.30% SFM Revenue Bonds (Series 38),
4/1/2003 Aa 97,178
-----------------------------------------------------------
125,000 Pennsylvania Higher Educations Facilities Authority, 6.00%
Health Services Revenue Bonds (University of
Pennsylvania)/(Series A-1994), 1/1/2003 AA- 128,277
-----------------------------------------------------------
100,000 Pennsylvania Infrastructure Investment Authority, 5.45%
Revenue Bonds (Pennvest Loan Pool), 9/1/2003 AA 99,638
-----------------------------------------------------------
100,000 Pennsylvania State, 6.50% UT GO Bonds (Series A)/
(Original Issue Yield: 6.60%), 11/15/2010 A1 103,838
-----------------------------------------------------------
125,000 Pennsylvania Turnpike Commission, 5.45% Revenue Bonds
(Series P), 12/1/2002 A1 126,014
-----------------------------------------------------------
125,000 Pennsylvania State University, PA, 5.20% Revenue Bonds,
8/15/2002 AA- 124,906
-----------------------------------------------------------
125,000 Perkiomen Valley School District, (Montgomery County), PA,
5.50% GO Bonds (Series-1994), 2/1/2004 A1 125,234
-----------------------------------------------------------
100,000 Philadelphia, PA, IDA, 4.90% Refunding Revenue Bonds (PGH/
CHDC Parking Facility)/(Original Issue Yield: 5.04%),
7/1/2002 AA 97,735
-----------------------------------------------------------
100,000 Philadelphia, PA, Hospital and Higher Education Facilities
Authority, 5.25% Revenue Bonds (Willis Eye Hospital)/
(Series 1994)/(Original Issue Yield: 5.40%), 7/1/2003 A 95,339
-----------------------------------------------------------
</TABLE>
PENNSYLVANIA INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- --------- ----------------------------------------------------------- ------- ----------
<C> <C> <S> <C> <C>
INTERMEDIATE-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------
$100,000 Richland School District, (Cambria County), PA, 5.30% GO
Bonds (Series 1994)/(MBIA Insured), 11/1/2003 AAA $ 99,446
-----------------------------------------------------------
125,000 Solanco School District, (Lancaster County), PA, 5.60% UT
GO Bonds (Series 1994)/(FGIC Insured), 2/15/2004 AAA 126,199
-----------------------------------------------------------
110,000 University of Pittsburgh, PA Higher Education, 5.75%
Refunding Revenue Bonds (Series B)/(MBIA Insured), 6/1/2002 Aaa 114,282
-----------------------------------------------------------
100,000 Upper Darby, PA School District, 4.60% UT GO Bonds (Series
1994)/(AMBAC Insured), 2/15/2004 Aaa 92,406
----------------------------------------------------------- ----------
TOTAL INTERMEDIATE-TERM MUNICIPAL SECURITIES
(IDENTIFIED COST, $2,846,530) 2,796,999
----------------------------------------------------------- ----------
TOTAL INVESTMENTS (IDENTIFIED COST $3,496,530) $3,446,999+
----------------------------------------------------------- ----------
</TABLE>
* Please refer to the appendix of the Statement of Additional Information for an
explanation of the credit ratings. Current credit ratings are unaudited.
+ The cost of investments for federal tax purposes amounts to $3,496,530. The
net unrealized depreciation on a federal tax basis amounts to $49,531, which
is comprised of $12,122 appreciation and $61,653 depreciation at May 31, 1994.
Note: The categories of investments are shown as a percentage of net assets
($2,880,594) at
May 31, 1994.
PENNSYLVANIA INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
The following abbreviations are used in this portfolio.
<TABLE>
<S> <C>
AMBAC --American Municipal Bond Assurance Corporation
GO --General Obligation
FGIC --Financial Guaranty Insurance Company
HFA --Housing Finance Authority/Agency
IDA --Industrial Development Authority
LOCs --Letters of Credit
MBIA --Municipal Bond Investors Assurance
SFM --Single Family Mortgage
UT --Unlimited Tax
VRDNs --Variable Rate Demand Notes
</TABLE>
(See Notes which are an integral part of the Financial Statements)
PENNSYLVANIA INTERMEDIATE MUNICIPAL TRUST
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ---------------------------------------------------------------------------------
Investments in securities, at value (Note 2A) (identified and tax cost
$3,496,530) $3,446,999
- ---------------------------------------------------------------------------------
Cash 77,180
- ---------------------------------------------------------------------------------
Receivable for Fund shares sold 43,143
- ---------------------------------------------------------------------------------
Interest receivable 29,591
- --------------------------------------------------------------------------------- ----------
Total assets 3,596,913
- ---------------------------------------------------------------------------------
LIABILITIES:
- ----------------------------------------------------------------------
Payable for investments purchased $627,155
- ----------------------------------------------------------------------
Payable for Fund shares repurchased 63,000
- ----------------------------------------------------------------------
Dividends payable (Note 2B) 8,056
- ----------------------------------------------------------------------
Shareholder services fee payable (Note 4) 230
- ----------------------------------------------------------------------
Accrued expenses 17,878
- ---------------------------------------------------------------------- --------
Total liabilities 716,319
- --------------------------------------------------------------------------------- ----------
NET ASSETS for 292,404 shares of beneficial interest outstanding $2,880,594
- --------------------------------------------------------------------------------- ----------
NET ASSETS CONSISTS OF:
- ---------------------------------------------------------------------------------
Paid in capital $2,968,200
- ---------------------------------------------------------------------------------
Unrealized depreciation of investments (49,531)
- ---------------------------------------------------------------------------------
Accumulated net realized loss on investments (38,075)
- --------------------------------------------------------------------------------- ----------
Total Net Assets $2,880,594
- --------------------------------------------------------------------------------- ----------
NET ASSET VALUE, Offering Price, and Redemption Price Per Share
($2,880,594 / 292,404 shares of beneficial interest outstanding) $ 9.85
- --------------------------------------------------------------------------------- ----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
PENNSYLVANIA INTERMEDIATE MUNICIPAL TRUST
STATEMENT OF OPERATIONS
YEAR ENDED MAY 31, 1994*
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -------------------------------------------------------------------------------------
Interest income (Note 2B) $ 37,680
- -------------------------------------------------------------------------------------
EXPENSES:
- -------------------------------------------------------------------------------------
Investment advisory fee (Note 4) $ 3,767
- --------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses (Note 4) 246
- --------------------------------------------------------------------------
Custodian and portfolio accounting fees 29,122
- --------------------------------------------------------------------------
Shareholder services fee (Note 4) 230
- --------------------------------------------------------------------------
Legal fees 500
- --------------------------------------------------------------------------
Printing and postage 1,135
- --------------------------------------------------------------------------
Registration fees 2,734
- --------------------------------------------------------------------------
Taxes 10
- --------------------------------------------------------------------------
Administrative personnel and services fee (Note 4) 1,225
- --------------------------------------------------------------------------
Miscellaneous 1,050
- -------------------------------------------------------------------------- -------
Total expenses 40,019
- --------------------------------------------------------------------------
Deduct--
- ----------------------------------------------------------------
Waiver of investment advisory fee (Note 4) $ 3,767
- ----------------------------------------------------------------
Reimbursement of other operating expenses (Note 4) 34,400 38,167
- ---------------------------------------------------------------- ------- -------
Net expenses 1,852
- ------------------------------------------------------------------------------------- --------
Net investment income 35,828
- ------------------------------------------------------------------------------------- --------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- -------------------------------------------------------------------------------------
Net realized gain (loss) on investments (identified cost basis) (38,075)
- -------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments (49,531)
- ------------------------------------------------------------------------------------- --------
Net realized and unrealized loss on investments (87,606)
- ------------------------------------------------------------------------------------- --------
Change in net assets resulting from operations $(51,778)
- ------------------------------------------------------------------------------------- --------
</TABLE>
* For the period from December 5, 1993 (date of initial public investment) to
May 31, 1994.
(See Notes which are an integral part of the Financial Statements)
PENNSYLVANIA INTERMEDIATE MUNICIPAL TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
MAY 31, 1994*
-------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------------------------------
OPERATIONS--
- -----------------------------------------------------------------------
Net investment income $ 35,828
- -----------------------------------------------------------------------
Net realized gain (loss) on investment transactions ($38,075 net loss
as computed for federal tax purposes) (Note 2C) (38,075)
- -----------------------------------------------------------------------
Change in unrealized appreciation on investments (49,531)
- ----------------------------------------------------------------------- ----------------
Change in net assets resulting from operations (51,778)
- ----------------------------------------------------------------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2B)--
- -----------------------------------------------------------------------
Dividends to shareholders from net investment income (35,828)
- ----------------------------------------------------------------------- ----------------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)--
- -----------------------------------------------------------------------
Proceeds from sale of shares 6,080,600
- -----------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
dividends declared 1,841
- -----------------------------------------------------------------------
Cost of shares redeemed (3,114,241)
- ----------------------------------------------------------------------- ----------------
Change in net assets from fund share transactions 2,968,200
- ----------------------------------------------------------------------- ----------------
Change in net assets 2,880,594
- -----------------------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------------------
Beginning of period --
- ----------------------------------------------------------------------- ----------------
End of period $ 2,880,594
- ----------------------------------------------------------------------- ----------------
</TABLE>
* For the period from December 5, 1993 (date of initial public investment) to
May 31, 1994.
(See Notes which are an integral part of the Financial Statements)
PENNSYLVANIA INTERMEDIATE MUNICIPAL TRUST
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1994
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Intermediate Municipal Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as an open-end, management
investment company. The Trust consists of three portfolios. The financial
statements included herein present only those of Pennsylvania Intermediate
Municipal Trust (the "Fund"). The financial statements of the other portfolios
are presented separately. The assets of each portfolio are segregated and a
shareholder's interest is limited to the portfolio in which shares are held.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
A. INVESTMENT VALUATIONS--Municipal bonds are valued by an independent pricing
service taking into consideration yield, liquidity, risk, credit, quality,
coupon, maturity, type of issue, and any other factors or market data it
deems relevant in determining valuations for normal institutional size
trading units of debt securities. The independent pricing service does not
rely exclusively on quoted prices. Short-term securities with remaining
maturities of sixty days or less may be stated at amortized cost, which
approximates value.
B. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized as
required by the Internal Revenue Code, as amended (the "Code"). Distributions
to shareholders are recorded on the ex-dividend date.
C. FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its tax-exempt income.
Accordingly, no provisions for federal tax are necessary. Additionally, net
capital losses of ($38,075) attributable to security transactions incurred
after October 31, 1993 are treated as arising on June 1, 1994, the first day
of the Fund's next taxable year.
D. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. A Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the securities
purchased. Securities purchased on a when-issued or delayed delivery basis
are marked to market daily and begin earning interest on the settlement date.
E. OTHER--Investment transactions are accounted for on the trade date.
PENNSYLVANIA INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED
MAY 31, 1994*
- --------------------------------------------------------------------------- --------------
<S> <C>
Shares sold 603,068
- ---------------------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 183
- ---------------------------------------------------------------------------
Shares redeemed (310,847)
- --------------------------------------------------------------------------- ------------
Net change resulting from Fund share transactions 292,404
- --------------------------------------------------------------------------- ------------
</TABLE>
* For the period from December 5, 1993 (date of initial public investment) to
May 31, 1994.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
ADVISORY FEE--Federated Management, the Fund's investment adviser (the
"Adviser"), receives for its services an annual investment advisory fee equal to
.50% of the Fund's average daily net assets. The Adviser may voluntarily choose
to waive its fee and reimburse certain operating expenses of the Fund. The
Adviser can modify or terminate this voluntary waiver and reimbursement at any
time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
administrative personnel and services. Prior to March 1, 1994, these services
were provided at approximate cost. Effective March 1, 1994, the FAS fee is based
on the level of average aggregate daily net assets of all funds advised by
subsidiaries of Federated Investors for the period. The administrative fee
received during the period of the Administrative Services Agreement shall be at
least $125,000 per portfolio and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Service Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of average net assets for the Fund for the period. This fee is to obtain
certain personal services for shareholders and the maintenance of shareholder
accounts.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ") serves as transfer agent and dividend disbursing agent for the Fund.
The FServ fee is based on the size, type and number of accounts and transactions
made by shareholders.
ORGANIZATIONAL EXPENSES--Organizational expenses of $24,690 and start-up
administrative service expenses of $31,506 were borne initially by the Adviser.
The Fund has agreed to reimburse the Adviser for the organizational expenses and
start-up administrative service expenses during the five year period following
November 15, 1993 (date the Fund first became effective). For the period ended
May 31, 1994, the Fund paid $960 and $1,225, respectively, pursuant to this
agreement.
PENNSYLVANIA INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
INTERFUND TRANSACTIONS--During the period ended May 31, 1994, the Fund engaged
in purchase and sale transactions with other affiliated funds pursuant to the
Rule 17a-7 of the Investment Company Act of 1940 amounting to $3,586,657 and
$2,000,000, respectively. These purchases and sales were conducted on an arms
length basis and transacted for cash consideration only, at independent current
market prices and without brokerage commissions, fees, or other remuneration.
Certain Officers and Trustees of the Fund are Officers and Directors or Trustees
of the above companies.
(5) CONCENTRATION OF CREDIT RISK
Since the Fund invests a substantial portion of its assets in issuers located in
one state, it will be more susceptible to factors adversely affecting issuers of
that state than would be a comparable general tax-exempt mutual fund. In order
to reduce the credit risk associated with such factors, at May 31, 1994, 56% of
the securities in the portfolio of investments are backed by letters of credit
or bond insurance of various financial institutions and financial guaranty
assurance agencies. The aggregate percentages by financial institutions and
agencies ranged from 3% to 19% of total investments.
(6) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended May 31, 1994, were as follows:
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
PURCHASES $3,570,108
- -------------------------------------------------------------------------------- ----------
SALES $ 683,773
- -------------------------------------------------------------------------------- ----------
</TABLE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
INTERMEDIATE MUNICIPAL TRUST
(Pennsylvania Intermediate Municipal Trust):
We have audited the accompanying statement of assets and liabilities of
Pennsylvania Intermediate Municipal Trust (an investment portfolio of
Intermediate Municipal Trust, a Massachusetts business trust), including the
schedule of portfolio investments, as of May 31, 1994, and the related statement
of operations for the period then ended, and the statement of changes in net
assets, and financial highlights (see page 2 of the prospectus) for the period
presented. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of the securities owned as of May 31, 1994, by
correspondence with the custodian and brokers. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Pennsylvania Intermediate Municipal Trust, an investment portfolio of
Intermediate Municipal Trust as of May 31, 1994, the results of its operations
for the period then ended, and changes in its net assets and financial
highlights for the period presented, in conformity with generally accepted
accounting principles.
ARTHUR ANDERSEN & CO.
Pittsburgh, Pennsylvania
July 11, 1994
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Fund
Pennsylvania Intermediate Federated Investors Tower
Municipal Trust Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Investment Adviser
Federated Management Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Custodian
State Street Bank and P.O. Box 8602
Trust Company Boston, Massachusetts 02266-8602
- ------------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Legal Counsel
Houston, Houston & Donnelly 2510 Centre City Tower
Pittsburgh, Pennsylvania 15222
- ------------------------------------------------------------------------------------------------
Legal Counsel
Dickstein, Shapiro & Morin, L.L.P. 2101 L Street, N.W.
Washington, D.C. 20037
- ------------------------------------------------------------------------------------------------
Independent Public Accountants
Arthur Andersen & Co. 2100 One PPG Place
Pittsburgh, Pennsylvania 15222
- ------------------------------------------------------------------------------------------------
</TABLE>
PENNSYLVANIA
INTERMEDIATE MUNICIPAL
TRUST
PROSPECTUS
A Non-Diversified Portfolio of
Intermediate Municipal Trust
An Open-End, Management
Investment Company
July 31, 1994
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
458810306
3081603A (7/94)
PENNSYLVANIA INTERMEDIATE MUNICIPAL TRUST
(A PORTFOLIO OF INTERMEDIATE MUNICIPAL TRUST)
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information should be read with the prospectus of
Pennsylvania Intermediate Municipal Trust (the "Fund") dated July 31, 1994. This
Statement is not a prospectus itself. To receive a copy of the prospectus, write
or call the Fund.
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
Statement dated July 31, 1994
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
GENERAL INFORMATION ABOUT THE FUND 1
- ---------------------------------------------------------------
INVESTMENT OBJECTIVE AND POLICIES 1
- ---------------------------------------------------------------
Acceptable Investments 1
When-Issued and Delayed
Delivery Transactions 2
Temporary Investments 2
Portfolio Turnover 3
Investment Limitations 3
Investment Risks 4
MANAGEMENT OF INTERMEDIATE MUNICIPAL TRUST 5
- ---------------------------------------------------------------
Officers and Trustees 5
>Fund Ownership
The Funds 7
Trustee Liability 7
INVESTMENT ADVISORY SERVICES 7
- ---------------------------------------------------------------
Adviser to the Fund 7
Advisory Fees 8
ADMINISTRATIVE SERVICES 8
- ---------------------------------------------------------------
SHAREHOLDER SERVICES PLAN 8
- ---------------------------------------------------------------
BROKERAGE TRANSACTIONS 8
- ---------------------------------------------------------------
PURCHASING SHARES 9
- ---------------------------------------------------------------
Conversion to Federal Funds 9
DETERMINING NET ASSET VALUE 9
- ---------------------------------------------------------------
Valuing Municipal Bonds 9
Use of Amortized Cost 9
REDEEMING SHARES 9
- ---------------------------------------------------------------
Redemption in Kind 10
TAX STATUS 10
- ---------------------------------------------------------------
The Fund's Tax Status 10
Shareholders' Tax Status 10
TOTAL RETURN 10
- ---------------------------------------------------------------
YIELD 10
- ---------------------------------------------------------------
TAX-EQUIVALENT YIELD 11
- ---------------------------------------------------------------
Tax-Equivalency Table 11
PERFORMANCE COMPARISONS 12
- ---------------------------------------------------------------
APPENDIX 13
- ---------------------------------------------------------------
GENERAL INFORMATION ABOUT THE FUND
- --------------------------------------------------------------------------------
The Fund is a portfolio in Intermediate Municipal Trust (the "Trust"). The Trust
was established as a Massachusetts business trust under a Declaration of Trust
dated May 31, 1985. On September 1, 1993, the name of the Trust was changed from
Federated Intermediate Municipal Trust to Intermediate Municipal Trust.
INVESTMENT OBJECTIVE AND POLICIES
- --------------------------------------------------------------------------------
The Fund's investment objective is to provide current income which is exempt
from federal regular income tax and the personal income taxes imposed by the
Commonwealth of Pennsylvania. The investment objective cannot be changed without
approval of shareholders.
ACCEPTABLE INVESTMENTS
The Fund invests primarily in a portfolio of municipal securities which are
exempt from federal regular income tax and Pennsylvania state personal income
taxes. These securities include those issued by or on behalf of the Commonwealth
of Pennsylvania and Pennsylvania municipalities, and those issued by states,
territories and possessions of the United States which are exempt from federal
regular income tax and the Pennsylvania state personal income taxes.
CHARACTERISTICS
The Pennsylvania municipal securities in which the Fund invests have the
characteristics set forth in the prospectus.
A Pennsylvania municipal security will be determined by the Fund's
adviser to meet the quality standards established by the Trust's Board of
Trustees (the "Trustees") if it is of comparable quality to municipal
securities within the Fund's rating requirements. The Trustees consider
the creditworthiness of the issuer of a municipal security, the issuer of
a participation interest if the Fund has the right to demand payment from
the issuer of the interest, or the guarantor of payment by either of
those issuers. The Fund is not required to sell a municipal security if
the security's rating is reduced below the required minimum subsequent to
its purchase by the Fund. The investment adviser considers this event,
however, in its determination of whether the Fund should continue to hold
the security in its portfolio. If Moody's Investors Service, Inc.,
Standard & Poor's Corporation or Fitch Investors Services, Inc. ratings
change because of changes in those organizations or in their rating
systems, the Fund will try to use comparable ratings as standards in
accordance with the investment policies described in the Fund's
prospectus.
TYPES OF ACCEPTABLE INVESTMENTS
Examples of Pennsylvania municipal securities are:
- municipal notes and municipal commercial paper;
- serial bonds sold with differing maturity dates;
- tax anticipation notes sold to finance working capital needs of
municipalities;
- bond anticipation notes sold prior to the issuance of longer-term
bonds;
- pre-refunded municipal bonds; and
- general obligation bonds secured by a municipality pledge of taxation.
PARTICIPATION INTERESTS
The financial institutions from which the Fund purchases participation
interests frequently provide or secure from another financial institution
irrevocable letters of credit or guarantees and give the Fund the right
to demand payment of the principal amounts of the participation interests
plus accrued interest on short notice (usually within seven days).
VARIABLE RATE MUNICIPAL SECURITIES
Variable interest rates generally reduce changes in the market value of
municipal securities from their original purchase prices. Accordingly, as
interest rates decrease or increase, the potential for capital
appreciation or depreciation is less for variable rate municipal
securities than for fixed income obligations. Many municipal securities
with variable interest rates purchased by the Fund are subject to
repayment of principal (usually within seven days) on the Fund's demand.
The terms of these variable rate demand instruments require payment of
principal and accrued interest from the issuer of the municipal
obligations, the issuer of the participation interests, or a guarantor of
either issuer.
MUNICIPAL LEASES
The Fund may purchase municipal securities in the form of participation
interests which represent undivided proportional interests in lease
payments by a governmental or non-profit entity. The lease payments and
other rights under the lease provide for and secure the payments on the
certificates. Lease obligations may be limited
- --------------------------------------------------------------------------------
by municipal charter or the nature of the appropriation for the lease. In
particular, lease obligations may be subject to periodic appropriation.
If the entity does not appropriate funds for future lease payments, the
entity cannot be compelled to make such payments. Furthermore, a lease
may provide that the certificate trustee cannot accelerate lease
obligations upon default. The trustee would only be able to enforce lease
payments as they became due. In the event of default or failure of
appropriation, it is unlikely that the trustee would be able to obtain an
acceptable substitute source of payment.
In determining the liquidity of municipal lease securities, the Fund's
investment adviser, under the authority delegated by the Trustees, will
base its determination on the following factors:
- whether the lease can be terminated by the lessee;
- the potential recovery, if any, from a sale of the leased property
upon termination of the lease;
- the lessee's general credit strength (e.g., its debt, administrative,
economic and financial characteristics and prospects);
- the likelihood that the lessee will discontinue appropriating funding
for the leased property because the property is no longer deemed
essential to its operations (e.g., the potential for an "event of non-
appropriation"); and
- any credit enhancement or legal recourse provided upon an event of
non-appropriation or other termination of the lease.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
These transactions are arrangements in which the Fund purchases securities with
payment and delivery scheduled for a future time. The Fund engages in
when-issued and delayed delivery transactions only for the purpose of acquiring
portfolio securities consistent with the Fund's investment objective and
policies, not for investment leverage. These transactions are made to secure
what is considered to be an advantageous price and yield for the Fund.
Settlement dates may be a month or more after entering into these transactions,
and the market values of the securities purchased may vary from the purchase
prices.
No fees or 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
securities are marked to market daily and maintained until the transaction is
settled.
The Fund does not intend to engage in these transactions to an extent that would
cause the segregation of more than 20% of the total value of its assets.
TEMPORARY INVESTMENTS
The Fund may also invest in temporary investments during times of unusual market
conditions for defensive purposes.
REPURCHASE AGREEMENTS
Repurchase agreements are arrangements in which banks, broker/dealers,
and other recognized financial institutions sell U.S. government
securities or certificates of deposit to the Fund and agree at the time
of sale to repurchase them at a mutually agreed upon time and price
within one year from the date of acquisition. The Fund or its custodian
will take possession of the securities subject to repurchase agreements.
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. In the event that such 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 deemed by the Fund's
adviser to be creditworthy pursuant to guidelines established by the
Trustees.
REVERSE REPURCHASE AGREEMENTS
The Fund may also enter into reverse repurchase agreements. This
transaction is 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 maintained until the transaction is settled.
PORTFOLIO TURNOVER
The Fund may trade or dispose of portfolio securities as considered necessary to
meet its investment objective. For the period from December 5, 1993 (date of
initial public investment) to May 31, 1994, the portfolio turnover rate for the
Fund was 39%.
INVESTMENT LIMITATIONS
SELLING SHORT AND BUYING ON MARGIN
The Fund will not sell any securities short or purchase any securities on
margin, but may obtain such short-term credits as may be necessary for
clearance of purchases and sales of securities.
ISSUING SENIOR SECURITIES AND BORROWING MONEY
The Fund will not issue senior securities except that the Fund may borrow
money and engage in reverse repurchase agreements in amounts up to
one-third of the value of its total 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 when the liquidation of
portfolio securities is deemed to be inconvenient or disadvantageous. The
Fund will not purchase any securities while borrowings in excess of 5% of
its total assets are outstanding.
PLEDGING ASSETS
The Fund will not mortgage, pledge, or hypothecate its assets except to
secure permitted borrowings. In those cases, it may mortgage, pledge, or
hypothecate assets having a market value not exceeding 10% of the value
of its total assets at the time of the pledge.
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 REAL ESTATE
The Fund will not purchase or sell real estate or invest in real estate
limited partnerships, although it may invest in municipal bonds secured
by real estate or interests in real estate.
INVESTING IN COMMODITIES
The Fund will not buy or sell commodities, commodity contracts, or
commodities futures contracts.
LENDING CASH OR SECURITIES
The Fund will not lend any of its assets except that it may acquire
publicly or non-publicly issued municipal bonds or temporary investments
or enter into repurchase agreements in accordance with its investment
objective, policies, and limitations or its Declaration of Trust.
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 or in industrial development bonds or other securities, the
interest upon which is paid from revenues of similar types of projects.
However, the Fund may invest as temporary investments more than 25% of
the value of its assets in cash or cash items, securities issued or
guaranteed by the U.S. government, its agencies, or instrumentalities, or
instruments secured by these money market instruments, i.e., repurchase
agreements.
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.
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
The Fund will not purchase securities of other investment companies
except as part of a merger, consolidation, or other acquisition.
- --------------------------------------------------------------------------------
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 its investment adviser owning
individually more than 1/2 of 1% of the issuer's securities together own
more than 5% of the issuer's securities.
INVESTING IN ILLIQUID SECURITIES
The Fund will not invest more than 15% of its net assets in securities
which are illiquid, including repurchase agreements providing for
settlement in more than seven days after notice, and certain restricted
securities not determined by the Trustees to be liquid.
INVESTING IN NEW ISSUERS
The Fund will not invest more than 5% of the value of its total assets in
industrial development bonds where the principal and interest are the
responsibility of companies (or guarantors, where applicable) with less
than three years of continuous operations, including the operation of any
predecessor.
INVESTING IN MINERALS
The Fund will not purchase interests in oil, gas, or other mineral
exploration or development programs or leases, although it may invest in
the securities of issuers which invest in or sponsor such programs.
In addition, to comply with investment restrictions of a certain state, the Fund
will not invest in real estate limited partnerships.
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.
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 and loan having capital, surplus, and undivided profits in excess of
$100,000,000 at the time of investment to be "cash items."
INVESTMENT RISKS
Yields on Pennsylvania municipal securities depend on a variety of factors,
including: the general conditions of the municipal bond market; the size of the
particular offering; the maturity of the obligations; and the rating of the
issue. Further, any adverse economic conditions or developments affecting the
Commonwealth of Pennsylvania or its county and local governments could impact
the Fund's portfolio. The Fund's concentration in securities issued by the
Commonwealth of Pennsylvania and its political subdivisions provides a greater
level of risk than a fund which is diversified across numerous states and
municipal entities. The ability of the Commonwealth or its municipalities to
meet their obligations will depend on the availability of tax and other
revenues; economic, political and demographic conditions within Pennsylvania;
and their underlying fiscal condition.
The Commonwealth of Pennsylvania's budget stability depends largely upon
expenditure controls which keep spending in line with what is considered a
relatively limited revenue base. The Commonwealth maintains reasonable debt
levels and has a sound economic position which has shifted over time from very
heavy reliance on manufacturing and mining industries to a more stable
employment base. The Commonwealth restored structural balance to its budget in
fiscal year 1993 through tax increases, spending controls and conservative debt
management. Recurring budgetary pressures which will exist into fiscal year 1994
and beyond include rapid growth in Medicaid spending and social service
programs, and expenditures for additional correctional facilities. Spending was
increased by 5.8% for fiscal year 1994 based on continued modest improvement in
the economy, adherence to debt control policies and spendable reserves from the
prior year. The 1995 budget includes an estimated $267 million surplus from
fiscal year 1994, reductions in the corporate net income tax, and continued
growth in Medicaid expenditures of approximately 13%. The Commonwealth has
restored the Tax Stabilization Reserve Fund to approximately $30 million and
general fund receipts were on target through fiscal year 1994, reflecting an
improving regional economy and reasonable revenue projections. Reductions in
state assistance and increased social service demands have made it more
difficult for local governments (counties, cities, towns) to operate with
balanced budgets. School districts in the Commonwealth are provided additional
credit support through Pennsylvania's Act 150 which provides subsidized debt
service for qualified projects and an intercept mechanism of state aid payments
which would be used to pay bondholders in the case of a missed debt service
payment.
Concerning the constitutional provisions pertaining to debt, the Commonwealth
may issue tax anticipation notes for its General Fund and/or Motor License Fund.
However, the aggregate amount of newly issued and outstanding tax anticipation
notes is limited to a maximum of 20% of the estimated revenues of the
appropriate fund for the fiscal year in which the notes are issued. The notes
must mature within the fiscal year of issuance. The Commonwealth of Pennsylvania
may also issue bond anticipation notes with a term not to exceed three years.
The bond anticipation notes
- --------------------------------------------------------------------------------
are subject to applicable statutory limitations pertaining to the issuance of
bonds. The ability of the Fund to achieve its investment objective depends on
the continuing ability of the issuers of Pennsylvania Municipal Securities and
participation interests, or the guarantors of either, to meet their obligations
for the payment of interest and principal when due. Investing in Pennsylvania
Municipal Securities which meet the Fund's quality standards may not be possible
if the Commonwealth of Pennsylvania and its municipalities do not maintain their
current credit rating.
MANAGEMENT OF INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
OFFICERS AND TRUSTEES
Officers and Trustees are listed with their addresses, principal occupations,
and present positions, including any affiliation with Federated Management,
Federated Investors, Federated Securities Corp., Federated Services Company,
Federated Administrative Services and the Funds (as defined below).
<TABLE>
<CAPTION>
POSITIONS WITH PRINCIPAL OCCUPATIONS
NAME AND ADDRESS THE TRUST DURING PAST FIVE YEARS
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
John F. Donahue*+ Chairman and Chairman and Trustee, Federated Investors; Chairman and Trustee, Federated
Federated Investors Trustee Advisers, Federated Management, and Federated Research; Director, Aetna Life
Tower and Casualty Company; Chief Executive Officer and Director, Trustee, or
Pittsburgh, PA Managing General Partner of the Funds; formerly, Director, The Standard Fire
Insurance Company. Mr. Donahue is the father of J. Christopher Donahue, Vice
President of the Trust.
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
John T. Conroy, Jr. Trustee President, Investment Properties Corporation; Senior Vice-President, John R.
Wood/IPC Commercial Wood and Associates, Inc., Realtors; President, Northgate Village
Department Development Corporation; General Partner or Trustee in private real estate
John R. Wood and ventures in Southwest Florida; Director, Trustee, or Managing General
Associates, Inc., Partner of the Funds; formerly, President, Naples Property Management, Inc.
Realtors
3255 Tamiami Trail North
Naples, FL
- --------------------------------------------------------------------------------------------------------------------------------
William J. Copeland Trustee Director and Member of the Executive Committee, Michael Baker, Inc.;
One PNC Plaza-23rd Floor Director, Trustee, or Managing General Partner of the Funds; formerly, Vice
Pittsburgh, PA Chairman and Director, PNC Bank, N.A., and PNC Bank Corp.; and Director,
Ryan Homes, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
James E. Dowd Trustee Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director,
571 Hayward Mill Road Trustee, or Managing General Partner of the Funds; formerly, Director, Blue
Concord, MA Cross of Massachusetts, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
Lawrence D. Ellis, M.D. Trustee Hematologist, Oncologist, and Internist, Presbyterian and Montefiore
3471 Fifth Avenue Hospitals; Clinical Professor of Medicine and Trustee, University of
Suite 1111 Pittsburgh; Director, Trustee, or Managing General Partner of the Funds.
Pittsburgh, PA
- --------------------------------------------------------------------------------------------------------------------------------
Edward L. Flaherty, Jr.+ Trustee Attorney-at-law; Partner, Meyer and Flaherty; Director, Eat'N Park
5916 Penn Mall Restaurants, Inc., and Statewide Settlement Agency, Inc.; Director, Trustee,
Pittsburgh, PA or Managing General Partner of the Funds; formerly, Counsel, Horizon
Financial, F.A., Western Region.
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITIONS WITH PRINCIPAL OCCUPATIONS
NAME AND ADDRESS THE TRUST DURING PAST FIVE YEARS
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
Glen R. Johnson* President and Trustee, Federated Investors; President and/or Trustee of some of the Funds;
Federated Investors Trustee staff member, Federated Securities Corp. and Federated Administrative
Tower Services.
Pittsburgh, PA
- --------------------------------------------------------------------------------------------------------------------------------
Peter E. Madden Trustee Consultant; State Representative, Commonwealth of Massachusetts; Director,
225 Franklin Street Trustee, or Managing General Partner of the Funds; formerly, President,
Boston, MA State Street Bank and Trust Company and State Street Boston Corporation; and
Trustee, Lahey Clinic Foundation, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
Gregor F. Meyer Trustee Attorney-at-law; Partner, Meyer and Flaherty; Chairman, Meritcare, Inc.;
5916 Penn Mall Director, Eat 'N Park Restaurants, Inc.; Director, Trustee, or Managing
Pittsburgh, PA General Partner of the Funds; formerly, Vice Chairman, Horizon Financial,
F.A.
- --------------------------------------------------------------------------------------------------------------------------------
Wesley W. Posvar Trustee Professor, Foreign Policy and Management Consultant; Trustee, Carnegie
1202 Cathedral of Endowment for International Peace, RAND Corporation, Online Computer Library
Learning Center, Inc., and U.S. Space Foundation; Chairman, Czecho Slovak Management
University of Pittsburgh Center; Director, Trustee, or Managing General Partner of the Funds;
Pittsburgh, PA President Emeritus, University of Pittsburgh; formerly, Chairman, National
Advisory Council for Environmental Policy and Technology.
- --------------------------------------------------------------------------------------------------------------------------------
Marjorie P. Smuts Trustee Public relations/marketing consultant; Director, Trustee, or Managing
4905 Bayard Street General Partner of the Funds.
Pittsburgh, PA
- --------------------------------------------------------------------------------------------------------------------------------
J. Christopher Donahue* Vice President President and Trustee, Federated Investors; President and Trustee, Federated
Federated Investors Advisers, Federated Management, and Federated Research; Director and
Tower President, Federated Research Corp.; President, Passport Research, Ltd.;
Pittsburgh, PA Trustee, Federated Administrative Services, Federated Services Company, and
Federated Shareholder Services; President or Vice President of the Funds;
Director, Trustee, or Managing General Partner of some of the Funds. Mr.
Donahue is the son of John F. Donahue, Chairman and Trustee of the Trust.
- --------------------------------------------------------------------------------------------------------------------------------
Richard B. Fisher Vice President Executive Vice President and Trustee, Federated Investors; Chairman and
Federated Investors Director, Federated Securities Corp.; President or Vice President of the
Tower Funds; Director or Trustee of some of the Funds.
Pittsburgh, PA
- --------------------------------------------------------------------------------------------------------------------------------
Edward C. Gonzales Vice President Vice President, Treasurer, and Trustee, Federated Investors; Vice President
Federated Investors and Treasurer and Treasurer, Federated Advisers, Federated Management, and Federated
Tower Research; Executive Vice President, Treasurer, and Director, Federated
Pittsburgh, PA Securities Corp.; Trustee, Federated Services Company; Chairman, Treasurer,
and Trustee, Federated Administrative Services; Trustee or Director of some
of the Funds; Vice President and Treasurer of the Funds.
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITIONS WITH PRINCIPAL OCCUPATIONS
NAME AND ADDRESS THE TRUST DURING PAST FIVE YEARS
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
John W. McGonigle Vice President Vice President, Secretary, General Counsel, and Trustee, Federated
Federated Investors and Secretary Investors; Vice President, Secretary, and Trustee, Federated Advisers,
Tower Federated Management, and Federated Research; Trustee, Federated Services
Pittsburgh, PA Company; Executive Vice President, Secretary, and Trustee, Federated
Administrative Services; Director and Executive Vice President, Federated
Securities Corp.; Vice President and Secretary of the Funds.
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* This Trustee is deemed to be an "interested person" of the Trust as defined in
the Investment Company Act of 1940, as amended.
+ Members of the Trust's Executive Committee. The Executive Committee of the
Board of Trustees handles the responsibilities of the Trustees between
meetings of the Board.
FUND OWNERSHIP
Officers and Trustees own less than 1% of the outstanding shares of the Fund.
As of July 1, 1994, the following shareholders of record owned 5% or more of the
outstanding shares of the Fund: Firstnat Co., West Chester, PA, owned
approximately 71,424 shares 19.72%; Univest & Company, Souderton, PA, owned
approximately 154,505 shares 42.66%; Harmony Co., Carlisle, PA, owned
approximately 27,378 shares 7.56%; and Federated Disbursing Corp., Pittsburgh,
PA, owned approximately 27,031 shares 7.46%.
THE FUNDS
"The Funds" and "Funds" mean the following investment companies: American
Leaders Fund, Inc.; Annuity Management Series; Automated Cash Management Trust;
Automated Government Money Trust; California Municipal Cash Trust; Cash Trust
Series II; Cash Trust Series, Inc.; DG Investor Series; Edward D. Jones & Co.
Daily Passport Cash Trust; Federated ARMs Fund; Federated Exchange Fund, Ltd.;
Federated GNMA Trust; Federated Government Trust; Federated Growth Trust;
Federated High Yield Trust; Federated Income Securities Trust; Federated Income
Trust; Federated Index Trust; Federated Intermediate Government Trust; Federated
Master Trust; Federated Municipal Trust; Federated Short-Intermediate Government
Trust; Federated Short-Term U.S. Government Trust; Federated Stock Trust;
Federated Tax-Free Trust; Federated U.S. Government Bond Fund; First Priority
Funds; Fixed Income Securities, Inc.; Fortress Adjustable Rate U.S. Government
Fund, Inc.; Fortress Municipal Income Fund, Inc.; Fortress Utility Fund, Inc.;
Fund for U.S. Government Securities, Inc.; Government Income Securities, Inc.;
High Yield Cash Trust; Insight Institutional Series, Inc.; Insurance Management
Series; Intermediate Municipal Trust; International Series, Inc.; Investment
Series Funds, Inc.; Investment Series Trust; Liberty Equity Income Fund, Inc.;
Liberty High Income Bond Fund, Inc.; Liberty Municipal Securities Fund, Inc.;
Liberty U.S. Government Money Market Trust; Liberty Term Trust, Inc.-1999;
Liberty Utility Fund, Inc.; Liquid Cash Trust; Managed Series Trust; Mark Twain
Funds; Money Market Management, Inc.; Money Market Obligations Trust; Money
Market Trust; Municipal Securities Income Trust; New York Municipal Cash Trust;
111 Corcoran Funds; Peachtree Funds; The Planters Funds; Portage Funds; RIMCO
Monument Funds; The Shawmut Funds; Short-Term Municipal Trust; Signet Select
Funds; Star Funds; The Starburst Funds; The Starburst Funds II; Stock and Bond
Fund, Inc.; Sunburst Funds; Targeted Duration Trust; Tax-Free Instruments Trust;
Trademark Funds; Trust for Financial Institutions, Trust for Government Cash
Reserves; Trust for Short-Term U.S. Government Securities; Trust for U.S.
Treasury Obligations; and World Investment Series, Inc.
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 Class A (voting) shares of Federated
Investors are owned by a trust, the trustees of which are John F. Donahue, his
wife, and his son, J. Christopher Donahue. John F. Donahue is Chairman and
Trustee of Federated Management, Federated Investors, and the Trust. J.
Christopher Donahue is President and Trustee of Federated Management and
Federated Investors; Trustee, Federated Administrative Services and Federated
Services Company; and Vice President of
- --------------------------------------------------------------------------------
the Trust. John W. McGonigle is Vice President, Secretary, and Trustee of
Federated Management; Vice President and Secretary, Federated Research Corp.;
Vice President, Secretary, Trustee, and General Counsel, Federated Investors;
Executive Vice President, Secretary and Trustee, Federated Administrative
Services; Executive Vice President and Director, Federated Securities Corp.;
Trustee of Federated Services Company; and Vice President and Secretary of the
Trust.
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 Fund.
ADVISORY FEES
For its advisory services, Federated Management receives an annual investment
advisory fee as described in the prospectus.
During the period from December 5, 1993 (date of initial public investment) to
May 31, 1994, the Adviser earned $3,767, all of which was voluntarily waived. In
addition, the Adviser reimbursed other operating expenses of $34,400.
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 2.5% per year of the first $30 million of average net assets, 2%
per year of the next $70 million of average net assets, and 1.5% per year
of the remaining average net assets, the Adviser will reimburse the Trust
for its expenses over the limitation.
If the Fund's monthly projected operating expenses exceed this expense
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.
ADMINISTRATIVE SERVICES
- --------------------------------------------------------------------------------
Federated Administrative Services, a subsidiary of Federated Investors, provides
administrative personnel and services to the Fund for a fee as described in the
prospectus. Prior to March 1, 1994, Federated Administrative Services, Inc.,
also a subsidiary of Federated Investors, served as the Fund's administrator.
(For purposes of this statement of Additional Information, Federated
Administrative Services and Federated Administrative Services, Inc. may,
hereinafter, collectively be referred to as the "Administrators.") For the
period from December 5, 1993 (date of initial public investment) to May 31,
1994, the Administrators earned $1,225, none of which was waived. Dr. Henry
Gailliot, an officer of Federated Management, the Adviser to the Fund, holds
approximately 20% of the outstanding common stock and serves as director of
Commercial Data Services, Inc., a company which provides computer processing
services to the Administrators.
SHAREHOLDER SERVICES PLAN
- --------------------------------------------------------------------------------
This arrangement permits the payment of fees to Federated Shareholder Services
and, indirectly, to financial institutions, 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: 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.
For the fiscal period ending May 31, 1994, payments in the amount of $230 were
made pursuant to the Shareholder Services Plan, all of which were paid to
financial institutions.
BROKERAGE TRANSACTIONS
- --------------------------------------------------------------------------------
When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the Adviser looks for prompt execution of the order at a favorable
price. In working with dealers, the Adviser will generally use those that 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 Federated
Funds. The Adviser makes decisions on portfolio transactions and selects brokers
and dealers subject to review by the Trustees. 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.
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.
Research services provided by brokers may be used by the Adviser or by
affiliates of Federated Investors in advising 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.
PURCHASING SHARES
- --------------------------------------------------------------------------------
Except under certain circumstances described in the respective prospectuses,
shares are sold at their net asset value on days the New York Stock Exchange is
open for business. The procedure for purchasing shares is explained in the
prospectus under "Investing in the Fund".
CONVERSION TO FEDERAL FUNDS
It is the Fund's policy to be as fully invested as possible so that the maximum
interest may be earned. State Street Bank and Trust Company ("State Street
Bank") acts as the shareholder's agent in depositing checks and converting them
into federal funds.
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 the prospectus. Net asset value will not
be calculated on the following holidays: New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and
Christmas Day.
VALUING MUNICIPAL BONDS
The Trustees use an independent pricing service to value municipal bonds. The
independent pricing service takes into consideration yield, stability, risk,
quality, coupon rate, maturity, type of issue, trading characteristics, special
circumstances of a security or trading market, and any other factors or market
data it considers relevant in determining valuations for normal institutional
size trading units of debt securities, and does not rely exclusively on quoted
prices.
USE OF AMORTIZED COST
The Trustees have decided that the fair value of debt securities authorized to
be purchased by the Fund with remaining maturities of 60 days or less, at the
time of purchase, shall be their amortized cost value, unless the particular
circumstances of the security indicate otherwise. Under this method, portfolio
instruments and assets are valued at the acquisition cost as adjusted for
amortization of premium or accumulation of discount rather than at current
market value. The Executive Committee continually assesses this method of
valuation and recommends changes where necessary to assure that the Fund's
portfolio instruments are valued at their fair value as determined in good faith
by the Trustees.
REDEEMING SHARES
- --------------------------------------------------------------------------------
The Fund redeems shares at the next computed net asset value after the Fund
receives the redemption request. Redemption procedures are explained in the
prospectus under "Redeeming Shares." Although State Street Bank 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.
- --------------------------------------------------------------------------------
REDEMPTION IN KIND
The Trust is obligated to redeem shares solely in cash up to $250,000 or 1% of
the net asset value of the Fund, whichever is less, for any one shareholder
within a 90-day period.
Any redemption beyond this amount will also be in cash unless the Trustees
determine that further cash payments will have a material adverse effect on
remaining shareholders. 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
that net asset value is determined. The portfolio instruments will be selected
in a manner that the Trustees deem fair and equitable. Such securities will be
readily marketable, to the extent available.
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 transactions costs.
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:
- - derive at least 90% of its gross income from dividends, interest, and gains
from the sale of securities;
- - derive less than 30% of its gross income from the sale of securities held less
than three months;
- - invest in securities within certain statutory limits; and
- - distribute to its shareholders at least 90% of its net income earned during
the year.
SHAREHOLDERS' TAX STATUS
CAPITAL GAINS
Capital gains or losses may be realized by the Fund on the sale of
portfolio securities and as a result of discounts from par value on
securities held to maturity. Sales would generally be made because of:
- the availability of higher relative yields;
- differentials in market values;
[5~
- new investment opportunities;
- changes in creditworthiness of an issuer; or
- an attempt to preserve gains or limit losses.
Distributions of long-term capital gains are taxed as such, whether they
are taken in cash or reinvested, and regardless of the length of time the
shareholder has owned the shares. Any loss by a shareholder on Fund
shares held for less than six months and sold after a capital gains
distribution will be treated as a long-term capital loss to the extent of
the capital gains distribution.
TOTAL RETURN
- --------------------------------------------------------------------------------
The Fund's cumulative total return for the period from December 5, 1993 (date of
initial public investment) to May 31, 1994 was 0.76%. Cumulative total return
reflects the Fund's total performance over a specific period of time. The Fund's
total return is representative of only five months of investment activity since
the Fund's effective date.
The average annual total return for 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 maximum offering price per share at the end of the period. The number of
shares owned at the end of the period is based on the number of shares purchased
at the beginning of the period with $1,000, adjusted over the period by any
additional shares assuming the monthly reinvestment of all dividends and
distributions.
YIELD
- --------------------------------------------------------------------------------
The Fund's yield for the thirty-day period ended May 31, 1994, was 4.78%.
The yield for shares of the Fund is determined by dividing the net investment
income per share (as defined by the Securities and Exchange Commission) earned
by the Fund over a thirty-day period by the maximum offering price per share on
the last day of the period. This value is then 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 twelve-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 shareholders.
To the extent that financial institutions and broker/dealers charge fees in
connection with services provided in conjunction with an investment in the Fund,
performance will be reduced for those shareholders paying those fees.
TAX-EQUIVALENT YIELD
- --------------------------------------------------------------------------------
The tax-equivalent yield for the Fund is calculated similarly to the yield, but
is adjusted to reflect the taxable yield that the Fund would have had to earn to
equal its actual yield, assuming a 39.60% federal tax rate and assuming that
income is 100% tax-exempt.
The Fund's tax-equivalent yield for the thirty-day period ended May 31, 1994,
was 8.30%.
TAX-EQUIVALENCY TABLE
The Fund may also use a tax-equivalency table in advertising and sales
literature. The interest earned by the municipal bonds in the Fund's portfolio
generally remains free from federal regular income tax, Pennsylvania personal
income tax and certain local taxes. (Some portion of the Fund's income may be
subject to the federal alternative minimum tax and state and local taxes.) As
the table below indicates, a "tax-free" investment is an attractive choice for
investors, particularly in times of narrow spreads between tax-free and taxable
yields.
<TABLE>
<S> <C> <C> <C> <C> <C>
TAXABLE YIELD EQUIVALENT FOR 1994
COMMONWEALTH OF PENNSYLVANIA
- ------------------------------------------------------------------------------------------------------------
TAX BRACKET:
- ------------------------------------------------------------------------------------------------------------
FEDERAL 15.00% 28.00% 31.00% 36.00% 39.60%
- ------------------------------------------------------------------------------------------------------------
COMBINED FEDERAL
AND STATE 17.80% 30.80% 33.80% 38.80% 42.40%
- ------------------------------------------------------------------------------------------------------------
JOINT RETURN: $1-38,000 $38,001-91,850 $91,851-140,000 $140,001-250,000 OVER 250,000
SINGLE RETURN: $1-22,750 $22,751-55,100 $55,101-140,000 $140,001-250,000 OVER 250,000
- ------------------------------------------------------------------------------------------------------------
TAX-EXEMPT
YIELD TAXABLE YIELD EQUIVALENT
- ------------------------------------------------------------------------------------------------------------
1.50% 1.82% 2.17% 2.27% 2.45% 2.60%
2.00% 2.43% 2.89% 3.02% 3.27% 3.47%
2.50% 3.04% 3.61% 3.78% 4.08% 4.34%
3.00% 3.65% 4.34% 4.53% 4.90% 5.21%
3.50% 4.26% 5.06% 5.29% 5.72% 6.08%
4.00% 4.87% 5.78% 6.04% 6.54% 6.94%
4.50% 5.47% 6.50% 6.80% 7.35% 7.81%
5.00% 6.08% 7.23% 7.55% 8.17% 8.68%
5.50% 6.69% 7.95% 8.31% 8.99% 9.55%
6.00% 7.30% 8.67% 9.06% 9.80% 10.42%
</TABLE>
Note: The maximum marginal tax rate for each bracket was used in calculating the
taxable yield equivalent. Furthermore, additional state and local taxes paid on
comparable taxable investments were not used to increase federal deductions.
The chart above is for illustrative purposes only. It is not an indicator of
past or future performance of the Fund.
PERFORMANCE COMPARISONS
- --------------------------------------------------------------------------------
The performance of the Fund depends upon such variables as:
- - portfolio quality;
- - average portfolio maturity;
- - type of instruments in which the portfolio is invested;
- - changes in interest rates and market value of portfolio securities;
- - changes in the Fund's expenses; and
- - 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 as
described above.
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 composition 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:
- - 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 specific period of time.
From time to time, the Fund will quote its Lipper ranking in the "other states
intermediate municipal debt funds" category in advertising and sales
literature.
- - 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 two
weeks.
- - LEHMAN BROTHERS FIVE-YEAR STATE GENERAL OBLIGATION BONDS is an index comprised
of all state general obligation debt issues with maturities between four and
six years. These bonds are rated A or better and represent a variety of coupon
ranges. Index figures are total returns calculated for one, three and twelve
month periods as well as year-to-date. Total returns are also calculated as of
the index inception December 31, 1979.
- - LEHMAN BROTHERS TEN-YEAR STATE GENERAL OBLIGATION BONDS is an index comprised
of the same issues noted above except that the maturities range between nine
and eleven years. Index figures are total returns calculated for the same
periods as listed above.
Advertisements and other sales literature for the Fund may quote total returns
which are calculated on non-standardized base periods. The total returns
represent the historic change in the value of an investment in the Fund based on
monthly reinvestment of dividends over a specific period of time.
APPENDIX
- --------------------------------------------------------------------------------
STANDARD AND POOR'S CORPORATION MUNICIPAL BOND RATINGS
AAA--Debt rated "AAA" has the highest rating assigned by Standard & Poor's
Corporation. 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.
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.
Plus (+) or minus (-): The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
MOODY'S INVESTORS SERVICE, INC. MUNICIPAL BOND RATINGS
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 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.
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 or municipal 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.
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 strong, but
may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
NR--NR indicates that Fitch does not rate the specific issue.
Plus (+) or Minus (-): Plus and minus signs are used with a rating symbol to
indicate the relative position of a credit within the rating category. Plus and
minus signs, however, are not used in the "AAA" category.
STANDARD AND POOR'S CORPORATION MUNICIPAL NOTE RATINGS
SP-1--Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a plus
sign (+) designation.
SP-2--Satisfactory capacity to pay principal and interest.
MOODY'S INVESTORS SERVICE, INC. SHORT-TERM LOAN RATINGS
MIG1/VMIG1--This designation denotes best quality. There is a present strong
protection by established cash flows, superior liquidity support or demonstrated
broad based access to the market for refinancing.
MIG2/VMIG2--This designation denotes high quality. Margins of protection are
ample although not so large as in the preceding group.
- --------------------------------------------------------------------------------
STANDARD AND POOR'S CORPORATION COMMERCIAL PAPER RATINGS
A-1--This highest category indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong safety
characteristics are denoted with a plus sign (+) designation.
A-2--Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high for issues
designated A-1.
MOODY'S INVESTORS SERVICE, INC. COMMERCIAL PAPER RATINGS
PRIME-1--Issuers rated PRIME-1 (or related supporting institutions) have a
superior capacity for repayment of short-term promissory obligations. PRIME-1
repayment capacity will normally be evidenced by the following characteristics:
- - Leading market positions in well-established industries.
- - High rates of return on funds employed.
- - Conservative capitalization structure with moderate reliance on debt and ample
asset protection.
- - Broad margins in earning coverage of fixed financial charges and high internal
cash generation.
- - Well-established access to a range of financial markets and assured sources of
alternative liquidity.
PRIME-2--Issuers rated PRIME-2 (or related supporting institutions) have a
strong capacity for repayment of short-term promissory 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, will be more subject
to variation. Capitalization characteristics, while still appropriate, may be
more affected by external conditions. Ample alternate liquidity is maintained.
458810306
3081603B (7/94)
INTERMEDIATE MUNICIPAL TRUST
[FORMERLY, FEDERATED INTERMEDIATE MUNICIPAL TRUST]
INSTITUTIONAL SERVICE SHARES
PROSPECTUS
The Institutional Service Shares offered by this prospectus represent interests
in a diversified portfolio of securities (the "Fund") of Intermediate Municipal
Trust (the "Trust"). The Trust is an open-end, diversified management investment
company (a mutual fund).
The objective of the Fund is to provide current income exempt from federal
regular income tax. The Fund pursues this investment objective by investing in a
portfolio of municipal securities with a dollar-weighted average portfolio
maturity of not less than three or more than ten years.
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 THESE 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 Combined Statement of Additional Information for
Institutional Service Shares and Institutional Shares dated July 31, 1994 with
the Securities and Exchange Commission. The information contained in the
Combined Statement of Additional Information is incorporated by reference in
this prospectus. You may request a copy of the Combined Statement of Additional
Information free of charge by calling 1-800-235-4669. To obtain other
information or to make inquiries about the Fund, contact the Fund at the address
listed in the back of this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus dated July 31, 1994
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
SUMMARY OF FUND EXPENSES 1
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS--
INSTITUTIONAL SERVICE SHARES 2
- ------------------------------------------------------
GENERAL INFORMATION 3
- ------------------------------------------------------
INVESTMENT INFORMATION 3
- ------------------------------------------------------
Investment Objective 3
Investment Policies 3
Acceptable Investments 3
Average Maturity 4
Characteristics 4
Participation Interests 4
Variable Rate Municipal Securities 4
When-Issued and Delayed
Delivery Transactions 5
Temporary Investments 5
Municipal Securities 5
Investment Risks 6
Investment Limitations 6
TRUST INFORMATION 6
- ------------------------------------------------------
Management of the Trust 6
Board of Trustees 6
Investment Adviser 6
Advisory Fees 6
Adviser's Background 7
Distribution of Institutional
Service Shares
7
Distribution and Shareholder
Services Plans
7
Other Payments to Financial Institutions 8
Administration of the Fund 8
Administrative Services
8
Custodian 9
Transfer Agent and Dividend
Disbursing Agent 9
Legal Counsel 9
Independent Public Accountants 9
Expenses of the Fund and
Institutional Service Shares 9
NET ASSET VALUE 10
- ------------------------------------------------------
INVESTING IN INSTITUTIONAL SERVICE SHARES 10
- ------------------------------------------------------
Share Purchases 10
By Wire 10
By Mail 10
Minimum Investment Required 10
What Shares Cost 11
Exchanging Securities for Fund Shares 11
Subaccounting Services 11
Certificates and Confirmations 11
Dividends 11
Capital Gains 12
REDEEMING INSTITUTIONAL SERVICE SHARES 12
- ------------------------------------------------------
Telephone Redemption 12
Written Requests 12
Signatures 13
Receiving Payment 13
Accounts with Low Balances 13
SHAREHOLDER INFORMATION 13
- ------------------------------------------------------
Voting Rights 13
Massachusetts Partnership Law 14
TAX INFORMATION 14
- ------------------------------------------------------
Federal Income Tax 14
Pennsylvania Corporate and Personal
Property Taxes 15
Other State and Local Taxes 15
PERFORMANCE INFORMATION 15
- ------------------------------------------------------
OTHER CLASSES OF SHARES 16
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS--
INSTITUTIONAL SHARES 17
- ------------------------------------------------------
FINANCIAL STATEMENTS 18
- ------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 34
- ------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 38
- ------------------------------------------------------
ADDRESSES Inside Back Cover
- ------------------------------------------------------
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
INSTITUTIONAL SERVICE SHARES
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price).......................................................... None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price).......................................................... None
Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds as applicable)......................................... None
Redemption Fee (as a percentage of amount redeemed, if applicable)............................. None
Exchange Fee................................................................................... None
ANNUAL INSTITUTIONAL SERVICE SHARES OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fee (after waiver)(1)............................................................... 0.39%
12b-1 Fee (after waiver)(2).................................................................... 0.01%
Total Other Expenses........................................................................... 0.46%
Shareholder Services Fee(3)...................................................... 0.24%
Total Institutional Service Shares Operating Expenses(4).............................. 0.86%
</TABLE>
(1) The management fee has been reduced to reflect the voluntary waiver of a
portion of the management fee. The adviser can terminate this voluntary waiver
at any time at its sole discretion. The maximum management fee is 0.40%.
(2) The maximum 12b-1 Fee is 0.25%.
(3) The maximum Shareholder Services Fee is 0.25%.
(4) The Total Institutional Service Shares Operating Expenses in the table above
are based on expenses expected during the fiscal year ending May 31, 1995. The
Total Institutional Service Share Operating Expenses were 0.89% for the fiscal
year ended May 31, 1994, and were 1.03% absent the voluntary waivers of a
portion of the management fee and a portion of the 12b-1 Fee.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF INSTITUTIONAL SERVICE SHARES
WILL BEAR, EITHER DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE
VARIOUS COSTS AND EXPENSES, SEE "TRUST INFORMATION" AND "INVESTING IN
INSTITUTIONAL SERVICE SHARES." 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 charge permitted under the rules of the National
Association of Securities Dealers, Inc.
<TABLE>
<CAPTION>
EXAMPLE 1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment
assuming (1) 5% annual return and (2) redemption at the end
of each time period........................................ $9 $27 $48 $106
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The information set forth in the foregoing table and example relates only to
Institutional Service Shares of the Fund. The Fund also offers another class of
shares called Institutional Shares. Institutional Service Shares and
Institutional Shares are subject to certain of the same expenses; however,
Institutional Shares are not subject to a 12b-1 fee. See "Other Classes of
Shares."
INTERMEDIATE MUNICIPAL TRUST
INSTITUTIONAL SERVICE SHARES
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Reference is made to the Report of Independent Public Accountants on page 38.
<TABLE>
<CAPTION>
YEAR ENDED
MAY 31,
1994*
-----------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.00
- --------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------
Net investment income 0.36
- --------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.48)
- -------------------------------------------------------------------------------- --------
Total from investment operations (0.12)
- --------------------------------------------------------------------------------
LESS DISTRIBUTIONS
- --------------------------------------------------------------------------------
Dividends to shareholders from net investment income (0.36)
- -------------------------------------------------------------------------------- --------
NET ASSET VALUE, END OF PERIOD $ 10.52
- -------------------------------------------------------------------------------- --------
TOTAL RETURN** (1.10%)
- --------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------------------------------------------
Expenses 0.89%(a)
- --------------------------------------------------------------------------------
Net investment income 4.66%(a)
- --------------------------------------------------------------------------------
Expense waiver/reimbursement(b) 0.14%(a)
- --------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $1,715
- --------------------------------------------------------------------------------
Portfolio turnover rate(c) 7%
- --------------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from September 6, 1993 (date of initial
public offering) to May 31, 1994.
** Based on net asset value which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(a) Computed on an annualized basis.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(c) Represents portfolio turnover for the entire Fund.
(See Notes which are an integral part of the Financial Statements)
Further information about the Fund's performance is contained in the Fund's
annual report for the fiscal year ended May 31, 1994, which can be obtained free
of charge.
GENERAL INFORMATION
- --------------------------------------------------------------------------------
The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated May 31, 1985. The Declaration of Trust permits the Trust to offer
separate series of shares of beneficial interest representing interests in
separate portfolios of securities. The shares in any one portfolio may be
offered in separate classes. As of the date of this prospectus, the Board of
Trustees (the "Trustees") have established two classes of shares of the Fund,
known as Institutional Service Shares and Institutional Shares. This prospectus
relates only to Institutional Service Shares of the Fund.
Institutional Service Shares ("Shares") of the Fund are sold primarily to retail
and private banking customers of financial institutions as a convenient means of
accumulating an interest in a professionally managed, diversified portfolio of
municipal securities. A minimum initial investment of $25,000 over a 90-day
period is required. The Fund may not be a suitable investment for retirement
plans since it invests in municipal securities.
Shares are currently sold and redeemed at net asset value without a sales charge
imposed by the Fund.
INVESTMENT INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide current income exempt from
federal regular income tax. Interest income of the Fund that is exempt from
federal income tax retains its tax-free status when distributed to the Fund's
shareholders. The Fund pursues this investment objective by investing at least
80% of its net assets in a diversified portfolio of municipal securities with a
dollar-weighted average portfolio maturity of not less than three or more than
ten years. 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. The investment objective and the policy stated above cannot
be changed without approval of shareholders.
INVESTMENT POLICIES
The investment policies described below may be changed by the Trustees without
shareholder approval. Shareholders will be notified before any material change
in these policies becomes effective.
ACCEPTABLE INVESTMENTS. The municipal securities in which the Fund invests are:
- debt obligations, including industrial development bonds, issued by or on
behalf of any state, territory, or possession of the United States,
including the District of Columbia, or any political subdivision of any
of these; and
- participation interests, as described below, in any of the above
obligations,
the interest from which is, in the opinion of bond counsel for the issuers or in
the opinion of officers of the Fund and/or the investment adviser to the Fund,
exempt from federal regular income tax.
The prices of fixed income securities fluctuate inversely to the direction of
interest rates.
AVERAGE MATURITY. The dollar-weighted average maturity of the Fund's portfolio
of municipal securities will not be less than three years or more than ten
years. For purposes of determining the dollar-weighted average portfolio
maturity of the Fund's portfolio, the maturity of a municipal security will be
its ultimate maturity, unless it is probable that the issuer of the security
will take advantage of maturity-shortening devices such as a call, refunding, or
redemption provision, in which case the maturity date will be the date on which
it is probable that the security will be called, refunded, or redeemed. If the
municipal security includes the right to demand payment, the maturity of the
security for purposes of determining the Fund's dollar-weighted average
portfolio maturity will be the period remaining until the principal amount of
the security can be recovered by exercising the right to demand payment.
CHARACTERISTICS. The municipal securities in which the Fund invests are:
- rated within the three highest ratings for municipal securities by
Moody's Investors Service, Inc. ("Moody's") (Aaa, Aa, or A) or by
Standard & Poor's Corporation ("Standard & Poor's") (AAA, AA, or A);
- guaranteed at the time of purchase by the U.S. government as to the
payment of principal and interest;
- fully collateralized by an escrow of U.S. government securities or other
securities acceptable to the Fund's adviser;
- rated at the time of purchase within Moody's highest short-term municipal
obligation rating (MIG1/VMIG1) or Moody's highest municipal commercial
paper rating (P-1) or Standard & Poor's highest municipal commercial
paper rating (SP-1);
- unrated if, at the time of purchase, other municipal securities of that
issuer are rated A or better by Moody's or Standard & Poor's; or
- unrated if determined to be of equivalent quality to one of the foregoing
rating categories by the Fund's investment adviser.
A description of the ratings categories is contained in the Appendix to the
Combined Statement of Additional Information.
PARTICIPATION INTERESTS. The Fund may purchase participation interests
from financial institutions such as commercial banks, savings and loan
associations and insurance companies. These participation interests give
the Fund an undivided interest in one or more underlying municipal
securities. The financial institutions from which the Fund purchases
participation interests frequently provide or obtain irrevocable letters of
credit or guarantees to attempt to assure that the participation interests
are of high quality. The Trustees of the Fund will evaluate whether
participation interests meet the prescribed quality standards for the Fund.
VARIABLE RATE MUNICIPAL SECURITIES. Some of the municipal securities which
the Fund purchases may have variable interest rates. Variable interest
rates are ordinarily stated as a percentage of a published interest rate,
interest rate index, or some similar standard, such as the 91-day U.S.
Treasury bill rate. Variable interest rates are adjusted on a periodic
basis, e.g., every 30 days. The Fund will consider this adjustment period
to be the maturity of the security for purposes of determining the weighted
average maturity of the portfolio.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase and sell
municipal securities on a when-issued or delayed delivery basis. These
transactions are arrangements in which the Fund purchases or sells securities
with payment and delivery scheduled for a future time. The Fund engages in
when-issued and delayed delivery transactions only for the purpose of acquiring
portfolio securities consistent with the Fund's investment objective and
policies, not for investment leverage. In when-issued and delayed delivery
transactions, the Fund relies on the buyer or seller to complete the
transaction. The seller's failure to complete the transaction may cause the Fund
to miss a price or yield considered to be advantageous.
TEMPORARY INVESTMENTS. From time to time on a temporary basis, or when the
investment adviser determines that market conditions call for a temporary
defensive posture, the Fund may invest in short-term temporary investments which
may or may not be exempt from federal income tax. Temporary investments include:
tax-exempt variable and floating rate demand notes; tax-free commercial paper;
other temporary municipal securities; obligations issued or guaranteed by the
U.S. government, its agencies or instrumentalities; other debt securities;
commercial paper; certificates of deposit of domestic branches of U.S. banks;
and repurchase agreements (arrangements in which the organization selling the
Fund a security agrees at the time of sale to repurchase it at a mutually agreed
upon time and price).
There are no rating requirements applicable to temporary investments with the
exception of temporary municipal securities which are subject to the same rating
requirements as all other municipal securities in which the Fund invests.
However, the investment adviser will limit temporary investments to those it
considers to be of comparable quality to the acceptable investments in the Fund.
Although the Fund is permitted to make taxable, temporary investments, there is
no current intention of generating income subject to federal regular income tax.
MUNICIPAL SECURITIES
Municipal securities are generally issued to finance public works, such as
airports, bridges, highways, housing, hospitals, mass transportation projects,
schools, streets, and water and sewer works. They are also issued to repay
outstanding obligations, to raise funds for general operating expenses, and to
make loans to other public institutions and facilities.
Municipal securities include industrial development bonds issued by or on behalf
of public authorities to provide financing aid to acquire sites or construct and
equip facilities for privately or publicly owned corporations. The availability
of this financing encourages these corporations to locate within the sponsoring
communities and thereby increases local employment.
The two principal classifications of municipal securities are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its full faith and credit and taxing power for the payment of
principal and interest. Interest on and principal of revenue bonds, however, are
payable only from the revenue generated by the facility financed by the bond or
other specified sources of revenue. Revenue bonds do not represent a pledge of
credit or create any debt of or charge against the general revenues of a
municipality or public authority. Industrial development bonds are typically
classified as revenue bonds.
INVESTMENT RISKS
Yields on municipal securities depend on a variety of factors, including: the
general conditions of the municipal note market and of the municipal bond
market; the size of the particular offering; the maturity of the obligations;
and the rating of the issue. The ability of the Fund to achieve its investment
objective also depends on the continuing ability of the issuers of municipal
securities and participation interests, or the guarantors of either, to meet
their obligations for the payment of interest and principal when due.
INVESTMENT LIMITATIONS
The Fund will not:
- borrow money or pledge securities except, under certain circumstances,
the Fund may borrow up to one-third of the value of its total assets and
pledge up to 10% of the value of those assets to secure such borrowings;
- invest more than 5% of its total assets in purchases of industrial
development bonds, the principal and interest of which are paid by a
company which has an operating history of less than three years; or
- with respect to securities comprising 75% of its assets, invest more than
5% of its total assets in securities of one issuer (except cash and cash
items, and U.S. government obligations).
The above investment limitations cannot be changed without shareholder approval.
The following limitation, however, may be changed by the Trustees without
shareholder approval. Shareholders will be notified before any material change
in this limitation becomes effective.
The Fund will not:
- invest more than 15% of its net assets in securities which are illiquid,
including repurchase agreements providing for settlement in more than
seven days after notice, and restricted securities determined by the
Board of Trustees to be illiquid.
TRUST INFORMATION
- --------------------------------------------------------------------------------
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees. The Trustees
are responsible for managing the Trust's business affairs and for exercising all
the Trust's powers, except those reserved for the shareholders. The 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 (the "Adviser"), subject to direction
by the Trustees. The Adviser continually conducts investment research and
supervision for the Fund and is responsible for the purchase and 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 .40 of 1% of the Fund's average daily net assets. Under the
investment advisory contract, the Adviser will
reimburse the Fund the amount, limited to the amount of the advisory fee,
by which the Fund's aggregate annual operating expenses, including its
investment advisory fee, but excluding interest, taxes, brokerage
commissions, insurance premiums, expenses of registering and qualifying the
Fund and its shares under federal and state laws and regulations, expenses
of withholding taxes, and extraordinary expenses, exceed .45 of 1% of its
average daily net assets. This does not include reimbursement to the Fund
of any expenses incurred by shareholders who use the transfer agent's
subaccounting facilities. Because of this undertaking, the Adviser receives
less than its calculated gross investment advisory fee. 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.
Jonathan C. Conley has been the Fund's portfolio manager since the Fund's
inception. Mr. Conley joined Federated Investors in 1979 and has been a
Vice President of the Adviser since 1982. Mr. Conley is a Chartered
Financial Analyst and received his M.B.A. in Finance from the University of
Virginia.
Federated Management and other subsidiaries of Federated Investors serve as
investment advisers to a number of investment companies and private
accounts. Certain other subsidiaries also provide administrative services
to a number of investment companies. Total assets under management or
administration by these and other subsidiaries of Federated Investors are
approximately $70 billion. Federated Investors, which was founded in 1956
as Federated Investors, Inc., develops and manages mutual funds primarily
for the financial industry. Federated Investors' track record of
competitive performance and its disciplined, risk averse investment
philosophy serve approximately 3,500 client institutions nationwide.
Through these same client institutions, individual shareholders also have
access to this same level of investment expertise.
DISTRIBUTION OF INSTITUTIONAL SERVICE SHARES
Federated Securities Corp. is the principal distributor for Institutional
Services Shares. 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.
DISTRIBUTION AND SHAREHOLDER SERVICES PLANS. Under a distribution plan adopted
in accordance with Investment Company Act Rule 12b-1 (the "Distribution Plan"),
the Fund may pay to the distributor an amount, computed at an annual rate of .25
of 1% of the average daily net asset value of the Institutional Service Shares,
to finance any activity which is principally intended to result in the sale of
Shares subject to the Distribution Plan. The distributor may select financial
institutions such as banks, fiduciaries, custodians for public funds, investment
advisers, and broker/dealers to provide sales support services as agents for
their clients or customers.
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 amount or may earn a profit from future payments made by the Fund
under the Distribution Plan.
In addition, the Trust has adopted a Shareholder Services Plan (the "Services
Plan"), under which it may make payments up to 0.25 of 1% of the average daily
net asset value of the Institutional Service Shares to obtain certain personal
services for shareholders and the maintenance of shareholder accounts
("shareholder services"). The Trust has entered into a Shareholder Services
Agreement with Federated Shareholder Services, a subsidiary of Federated
Investors, under which Federated Shareholder Services will either perform
shareholder services directly or will select financial institutions to perform
shareholder services. Financial institutions will receive fees based upon shares
owned by their clients or customers. The schedules of such fees and the basis
upon which such fees will be paid will be determined, from time to time, by the
Trust and Federated Shareholder Services.
OTHER PAYMENTS TO FINANCIAL INSTITUTIONS. In addition to periodic payments to
financial institutions under the Distribution and Shareholder Services Plans,
certain financial institutions may be compensated by the Adviser or its
affiliates for the continuing investment of customers' assets in certain funds,
including the Fund, advised by those entities. These payments will be made
directly by the distributor or Adviser from their assets, and will not be made
from the assets of the Fund or by the assessment of a sales charge on Shares.
The Glass-Steagall Act prohibits a depository institution (such as a commercial
bank or savings and loan association) from being an underwriter or distributor
of most securities. In the event that the Glass Steagall Act is deemed to
prohibit depository institutions from acting in the capacities described above
or should Congress relax current restrictions on depository institutions, the
Trustees will consider appropriate changes in the services.
State securities laws governing the ability of depository institutions to act as
underwriters or distributors of securities may differ from interpretations given
to the Glass-Steagall Act and, therefore, banks and financial institutions may
be required to register as dealers pursuant to state laws.
The distributor may, from time to time, and for such periods as it deems
appropriate, voluntarily reduce its compensation under the Plan.
ADMINISTRATION OF THE FUND
ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, provides administrative personnel and services (including
certain legal and financial reporting services) necessary to operate the Fund.
Federated Administrative Services provides these at an annual
rate, which relates to the average aggregate daily net assets of all funds
advised by subsidiaries of Federated Investors (the "Federated Funds") as
specified below:
<TABLE>
<CAPTION>
MAXIMUM AVERAGE AGGREGATE DAILY NET
ADMINISTRATIVE FEE ASSETS OF THE FEDERATED FUNDS
- --------------------- ------------------------------------
<S> <C>
0.15 of 1% on the first $250 million
0.125 of 1% on the next $250 million
0.10 of 1% on the next $250 million
0.075 of 1% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
Federated Administrative Services may choose voluntarily to waive a portion of
its fee.
CUSTODIAN. State Street Bank and Trust Company ("State Street Bank"), Boston,
Massachusetts, is custodian for the securities and cash of the Fund.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated Services Company,
Pittsburgh, Pennsylvania, with offices in Boston, Massachusetts, is transfer
agent for the Shares of the Fund and dividend disbursing agent for the Fund.
LEGAL COUNSEL. Legal counsel is provided by Houston, Houston & Donnelly,
Pittsburgh, Pennsylvania, and Dickstein, Shapiro & Morin, L.L.P., Washington,
D.C.
INDEPENDENT PUBLIC ACCOUNTANTS. The independent public accountants for the Fund
are Arthur Andersen & Co., Pittsburgh, Pennsylvania.
EXPENSES OF THE FUND AND INSTITUTIONAL SERVICE SHARES
Holders of Shares pay their allocable portion of Fund and Trust expenses.
The Trust expenses for which holders of 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.
The Fund expenses for which holders of Shares pay their allocable portion
include, but are not limited to: registering the Fund and 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.
At present, the only expenses allocated to the Shares as a class are expenses
under the Fund's Distribution Plan. However, the Trustees reserve the right to
allocate certain other expenses to the holders of 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 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 state securities commissions; expenses related to
administra-
tive personnel and services as required to support holders of Shares; legal fees
relating solely to Shares; and Trustees' fees incurred as a result of issues
relating solely to Shares.
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 the Shares in the value of all
securities and other assets of the Fund, subtracting the interest of the Shares
in the liabilities of the Fund and those attributable to Shares, and dividing
the remainder by the number of Shares outstanding. The net asset value for
Institutional Shares may differ from that of Shares 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.
INVESTING IN INSTITUTIONAL SERVICE SHARES
- --------------------------------------------------------------------------------
SHARE PURCHASES
Shares are sold on days on which the New York Stock Exchange and the Federal
Reserve Wire System are open for business. Shares may be purchased either by
wire or mail.
To purchase Shares, open an account by calling Federated Securities Corp. and
obtain a master account number. Information needed to establish the account will
be taken over the telephone. The Fund reserves the right to reject any purchase
request.
BY WIRE. To purchase Shares by Federal Reserve wire, call the Fund before 4:00
p.m. (Eastern time) to place an order. The order is considered received
immediately. Payment by federal funds must be received before 3:00 p.m. (Eastern
time) on the next business day following the order. Federal funds should be
wired as follows: State Street Bank and Trust Company, Boston, Massachusetts;
Attention: EDGEWIRE; For Credit to: Intermediate Municipal Trust--Institutional
Service Shares; Fund Number (this number can be found on the account Statement
or by contacting the Fund); Group Number or Wire Order Number; Nominee or
Institution Name; and ABA 011000028. Shares cannot be purchased on days on which
the New York Stock Exchange is closed and federal holidays restricting wire
transfers.
BY MAIL. To purchase Shares by mail, send a check made payable to Intermediate
Municipal Trust-- Institutional Service Shares to the Fund's transfer agent,
Federated Services Company, c/o State Street Bank and Trust Company, P.O. Box
8602, Boston, Massachusetts 02266-8602. Orders by mail are considered received
after payment by check is converted by the transfer agent's bank, State Street
Bank, into federal funds. This is normally the next business day after State
Street Bank receives the check.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment in Shares is $25,000, plus any non-affiliated
bank or broker's fee, if applicable. However, an account may be opened with a
smaller amount as long as the $25,000 minimum is reached within 90 days. The
minimum investment for an institutional investor will be
calculated by combining all accounts it maintains with the Fund. Accounts
established through a non-affiliated bank or broker may be subject to a smaller
minimum investment.
WHAT SHARES COST
Shares are sold at their net asset value next determined after an order is
received. There is no sales charge imposed by the Fund. Investors who purchase
Shares through a nonaffiliated bank or broker may be charged an additional
service fee by that bank or broker.
The net asset value is determined at 4:00 p.m. (Eastern time), 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.
EXCHANGING SECURITIES FOR FUND SHARES
Investors may exchange certain municipal securities or a combination of
securities and cash for Shares. The securities and any cash must have a market
value of at least $25,000. The Fund reserves the right to determine the
acceptability of securities to be exchanged. Securities accepted by the Fund are
valued in the same manner as the Fund values its assets. Shareholders wishing to
exchange securities should first contact Federated Securities Corp.
SUBACCOUNTING SERVICES
Institutions are encouraged to open single master accounts. However, certain
institutions may wish to use the transfer agent's subaccounting system to
minimize their internal recordkeeping requirements. The transfer agent charges a
fee based on the level of subaccounting services rendered. Institutions holding
Shares in a fiduciary, agency, custodial, or similar capacity may charge or pass
through subaccounting fees to beneficial owners as part of or in addition to
normal trust or agency account fees. They may also charge fees for other
services provided which may be related to the ownership of Shares. This
prospectus should, therefore, be read together with any agreement between the
customer and the institution with regard to the services provided, the fees
charged for those services, and any restrictions and limitations imposed.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Fund, Federated Services Company maintains a share
account for each shareholder of record. Share certificates are not issued unless
requested by contacting the Fund.
Detailed confirmations of each purchase or redemption are sent to each
shareholder. Monthly confirmations are sent to report dividends paid during the
month.
DIVIDENDS
Dividends are declared daily and paid monthly. Dividends are declared just prior
to determining net asset value. If an order for shares is placed on the
preceding business day, shares purchased by wire begin earning dividends on the
business day wire payment is received by State Street Bank. If the order for
Shares and payment by wire are received on the same day, Shares begin earning
dividends on the
next business day. Shares purchased by check begin earning dividends on the
business day after the check is converted, upon instruction of the transfer
agent, into federal funds. Dividends are automatically reinvested on payment
dates in additional Shares unless cash payments are requested by contacting the
Fund.
CAPITAL GAINS
Distributions of net realized long-term capital gains realized by the Fund, if
any, will be made at least once every twelve months.
REDEEMING INSTITUTIONAL SERVICE SHARES
- --------------------------------------------------------------------------------
The Fund redeems Shares at their net asset value next determined after the Fund
receives the redemption request. Redemptions will be made on days on which the
Fund computes its net asset value. Redemption requests must be received in
proper form and can be made by telephone request or by written request.
TELEPHONE REDEMPTION
Shareholders may redeem their Shares by telephoning the Fund before 4:00 p.m.
(Eastern time). The proceeds will normally be wired the following business day,
but in no event more than seven days, to the shareholder's account at a domestic
commercial bank that is a member of the Federal Reserve System. If at any time,
the Fund shall determine it necessary to terminate or modify this method of
redemption, shareholders would be promptly notified.
An authorization form permitting the Fund to accept telephone requests must
first be completed. Authorization forms and information on this service are
available from Federated Securities Corp. Telephone redemption instructions may
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 such a case should occur, another
method of redemption, such as "Written Requests," should be considered.
WRITTEN REQUESTS
Shares may also be redeemed by sending a written request to the Fund. Call the
Fund for specific instructions before redeeming by letter. The shareholder will
be asked to provide in the request his name, the Fund and class of shares' name,
his account number, and the share or dollar amount requested. If share
certificates have been issued, they must be properly endorsed and should be sent
by registered or certified mail with the written request.
SIGNATURES. Shareholders requesting a redemption of $50,000 or more, 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 signatures on written redemption requests guaranteed by:
- a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund, which is administered by the Federal Deposit Insurance
Corporation ("FDIC");
- a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchange;
- a savings bank or savings and loan association whose deposits are insured
by Savings Association Insurance Fund, which is administered by the FDIC;
or
- any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.
The 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.
RECEIVING PAYMENT. Normally, a check for the proceeds is mailed within one
business day, but in no event more than 7 days, after receipt of a proper
written redemption request.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Fund may
redeem Shares in any account and pay the proceeds to the shareholder of record
if the account balance falls below a required minimum value of $25,000 due to
Shareholder redemptions. This requirement does not apply, however, if the
balance falls below $25,000 because of changes in the Fund's net asset value.
Before Shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional Shares to meet the minimum
requirement.
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS
Each share of the Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of all classes of
each portfolio 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 the Trust shall be called by the Trustees upon the written
request of shareholders owning at least 10% of the outstanding shares of the
Trust entitled to vote.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect
shareholders of the Fund, 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 that the Trust or its
Trustees enter into or sign on behalf of the Fund.
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 on behalf
of the Fund. Therefore, financial loss resulting from liability as a shareholder
of the Fund will occur only if the Trust itself cannot meet its obligations to
indemnify shareholders and pay judgments against them from the assets of the
Fund.
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects to meet requirements
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. 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.
Shareholders are not required to pay the federal regular income tax on any
dividends received from the Fund that represent net interest on tax-exempt
municipal bonds. However, dividends representing net interest earned on some
municipal bonds are included in calculating the federal individual alternative
minimum tax or the federal alternative minimum tax for corporations.
The alternative minimum tax, up to 28% of alternative minimum taxable income for
individuals and 20% for corporations, applies when it exceeds the regular tax
for the taxable year. Alternative minimum taxable income is equal to the regular
taxable income of the taxpayer increased by certain "tax preference" items not
included in regular taxable income and reduced by only a portion of the
deductions allowed in the calculation of the regular tax.
Interest on certain "private activity" bonds issued after August 7, 1986, is
treated as a tax preference item for both individuals and corporations. Unlike
traditional governmental purpose municipal bonds, which finance roads, schools,
libraries, prisons and other public facilities, private activity bonds provide
benefits to private parties. The Fund may purchase all types of municipal bonds,
including private activity bonds. Thus, while the Fund has no present intention
of purchasing any private activity bonds, should it purchase any such bonds, a
portion of the Fund's dividends may be treated as a tax preference item.
In addition, in the case of a corporate shareholder, dividends of the Fund which
represent interest on municipal bonds may be subject to the 20% corporate
alternative minimum tax because the dividends
are included in a corporation's "adjusted current earnings." The corporate
alternative minimum tax treats 75% of the excess of a taxpayer's pre-tax
"adjusted current earnings" over the taxpayer's alternative minimum taxable
income as a tax preference item. "Adjusted current earnings" is based upon the
concept of a corporation's "earnings and profits." Since "earnings and profits"
generally includes the full amount of any Fund dividend, and alternative minimum
taxable income does not include the portion of the Fund's dividend attributable
to municipal bonds which are not private activity bonds, the difference will be
included in the calculation of the corporation's alternative minimum tax.
Dividends of the Fund representing net interest income earned on some temporary
investments and any realized net short-term gains are taxed as ordinary income.
These tax consequences apply whether dividends are received in cash or as
additional shares. Information on the tax status of dividends and distributions
is provided annually.
PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES
In the opinion of Houston, Houston & Donnelly, counsel to the Fund:
- the Fund is not subject to Pennsylvania corporate or personal property
taxes; and
- Fund 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 Fund would be subject to such
taxes if owned directly by residents of those jurisdictions.
OTHER STATE AND LOCAL TAXES
Distributions representing net interest received on tax-exempt municipal
securities are not necessarily free from income taxes of any state or local
taxing authority. State laws differ on this issue and shareholders are urged to
consult their own tax advisers.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time the Fund advertises its total return, yield and tax-equivalent
yield.
Total return represents the change, over a specified period of time, in the
value of an investment in Shares of the Fund 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 Shares of the Fund is calculated by dividing the net investment
income per share (as defined by the Securities and Exchange Commission) earned
by Shares over a thirty-day period by the offering price per share of Shares on
the last day of the period. This number is then annualized using semi-annual
compounding. The tax-equivalent yield of Shares is calculated similarly to the
yield, but is adjusted to reflect the taxable yield that Shares would have had
to earn to equal its actual yield, assuming a specific tax rate. The yield and
the tax-equivalent yield do not necessarily reflect income actually earned by
Shares and, therefore, may not correlate to the dividends or other distributions
paid to shareholders.
Total return, yield, and tax-equivalent yield will be calculated separately for
Institutional Service Shares and Institutional Shares. Because Institutional
Service Shares are subject to a 12b-1 fee, the total return, yield, and
tax-equivalent yield for Institutional Shares, for the same period, will exceed
that of Institutional Service Shares.
Institutional Service Shares are sold without any sales load or other similar
non-recurring charges.
From time to time, the Fund may advertise the performance of Shares using
certain financial publications and/or compare its performance to certain
indices.
OTHER CLASSES OF SHARES
- --------------------------------------------------------------------------------
Institutional Shares are sold to accounts for which financial institutions act
in a fiduciary advisory, agency, custodial or similar capacity. Institutional
Shares are also designed for funds held by savings and other institutions,
corporations, trusts, brokers, investment counselors, and insurance companies.
Institutional Shares are sold at net asset value, distributed without a 12b-1
Plan, and are subject to a minimum initial investment of $25,000.
Financial institutions and brokers providing sales and/or administrative
services may receive different compensation depending upon which class of shares
of the Fund is sold.
The amount of dividends payable to Institutional Shares may exceed that of
Institutional Services Shares by the difference between Class Expenses and
distribution and shareholder services expenses borne by shares of each
respective class.
The stated advisory fee is the same for both classes of shares.
INTERMEDIATE MUNICIPAL TRUST
INSTITUTIONAL SHARES
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Report of Independent Public Accountants on page 38.
<TABLE>
<CAPTION>
YEAR ENDED MAY 31,
----------------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988 1987 1986*
------ ------ ------ ------- ------ ------ ------ ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $10.74 $10.31 $10.09 $ 9.84 $ 9.81 $ 9.81 $ 9.83 $ 9.97 $10.00
- -----------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -----------------------------------
Net investment income 0.52 0.56 0.59 0.63 0.64 0.64 0.62 0.58 0.29
- -----------------------------------
Net realized and unrealized gain
(loss) on investments (0.22) 0.43 0.22 0.25 0.03 -- (0.02) (0.14) (0.03)
- ----------------------------------- ----- ----- ----- ------ ----- ----- ----- ------ -----
Total from investment operations 0.30 0.99 0.81 0.88 0.67 0.64 0.60 0.44 0.26
- -----------------------------------
LESS DISTRIBUTIONS
- -----------------------------------
Dividends to shareholders from net
investment income (0.52) (0.56) (0.59) (0.63) (0.64) (0.64) (0.62) (0.58) (0.29)
- ----------------------------------- ----- ----- ----- ------ ----- ----- ----- ------ -----
NET ASSET VALUE, END OF
PERIOD $10.52 $10.74 $10.31 $ 10.09 $ 9.84 $ 9.81 $ 9.81 $ 9.83 $ 9.97
- ----------------------------------- ----- ----- ----- ------ ----- ----- ----- ------ -----
TOTAL RETURN** 2.79% 9.80% 8.19% 9.22% 7.02% 6.77% 6.34% 4.25% 2.60%
- -----------------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------------
Expenses 0.61% 0.48% 0.47% 0.49% 0.50% 0.48% 0.49% 0.47% .003%(a)
- -----------------------------------
Net investment income 4.82% 5.27% 5.73% 6.32% 6.49% 6.56% 6.25% 5.63% 6.46%(a)
- -----------------------------------
Expense waiver/reimbursement(b) 0.01% 0.14% 0.22% 0.30% 0.38% 0.39% 0.31% 0.27% 0.57%(a)
- -----------------------------------
SUPPLEMENTAL DATA
- -----------------------------------
Net assets, end of period
(000 omitted) $302,663 $263,283 $173,702 $116,577 $95,738 $82,211 $91,195 $120,162 $3,450
- -----------------------------------
Portfolio turnover rate(c) 7% 3% 9% 43% 14% 25% 119% 81% 23%
- -----------------------------------
</TABLE>
* Reflects operations for the period from December 26, 1985 (date of initial
public offering) through May 31, 1986. For the period from the start of
business, October 15, 1985 to December 25, 1985, net investment income per
share aggregating $0.108424 ($1,084) was distributed to an affiliate of the
Trust's adviser. Such distribution represented the net income of the Trust
prior to the initial public offering of the Trust shares which commenced
December 26, 1985.
** Based on net asset value which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(a) Computed on an annualized basis.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above
(Note 4).
(c) Represents portfolio turnover for the entire Fund.
(See Notes which are an integral part of the Financial Statements)
Further information about the Fund's performance is contained in the Fund's
annual report for the fiscal year ended May 31, 1994, which can be obtained free
of charge.
INTERMEDIATE MUNICIPAL TRUST
PORTFOLIO OF INVESTMENTS
MAY 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ----------- ------------------------------------------------------ --------- ------------
<C> <S> <C> <C>
INTERMEDIATE-TERM MUNICIPAL SECURITIES--98.2%
- ---------------------------------------------------------------------
ALABAMA--2.1%
------------------------------------------------------
$ 2,500,000 Alabama Public School & College Authority, 4.625%
Refunding Bonds (Series 1993)/(Original Issue Yield:
4.77%), 12/1/2002 Aa $ 2,380,775
------------------------------------------------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
1,500,000 Alabama Water Pollution Control Authority, 6.35% State
Revolving Fund Loan Bonds (Series 1991)/(AMBAC
Insured), 8/15/2001 AAA 1,602,420
------------------------------------------------------
2,250,000 Birmingham, AL, Medical Center, 10.00% Hospital
Revenue Bonds (Prerefunded), 7/1/95 (@102) AAA 2,437,223
------------------------------------------------------ ------------
Total 6,420,418
------------------------------------------------------ ------------
ARIZONA--8.5%
------------------------------------------------------
1,000,000 Arizona State Department of Transportation, 5.50%
Revenue Bonds (Series 1992B)/(Original Issue Yield:
5.60%)/(AMBAC Insured), 7/1/2002 Aaa 1,022,190
------------------------------------------------------
1,500,000 Maricopa County, AZ, 8.20% Revenue Bonds
(MBIA Insured), 12/1/96 Aaa 1,616,130
------------------------------------------------------
1,000,000 Mesa, AZ, 7.125% GO Bonds, 7/1/99 A1 1,072,720
------------------------------------------------------
5,000,000 Phoenix, AZ, 4.90% GO Bonds (Series 1993A)/(Original
Issue Yield: 4.95%), 7/1/2002 AA+ 4,921,200
------------------------------------------------------
1,500,000 Phoenix, AZ, 7.40% GO Bonds (Series A), 7/1/2000 AA+ 1,689,240
------------------------------------------------------
2,900,000 Pima County, AZ, Tucson Unified School District #1,
4.80% School Improvement Bonds (Series
1993E)/(Original Issue Yield: 4.90%)/(FGIC Insured),
7/1/2003 AAA 2,781,245
------------------------------------------------------
3,000,000 Salt River Project, AZ, 4.75% Electric System Revenue
Bonds (Original Issue Yield: 4.85%), 1/1/2003 AA 2,849,520
------------------------------------------------------
2,500,000 Salt River Project, AZ, 5.20% Power Supply Revenue
Bonds (Original Issue Yield: 5.25%), 1/1/2002 Aa 2,490,600
------------------------------------------------------
</TABLE>
INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ----------- ------------------------------------------------------ --------- ------------
<C> <S> <C> <C>
INTERMEDIATE-TERM MUNICIPAL SECURITIES--CONTINUED
- ---------------------------------------------------------------------
ARIZONA--CONTINUED
------------------------------------------------------
$ 2,000,000 Salt River Project, AZ, 5.30% Power Supply Revenue
Bonds (Original Issue Yield: 5.35%), 1/1/2003 Aa $ 1,993,080
------------------------------------------------------
5,000,000 Salt River Project, AZ, 7.10% Electric System Revenue
Bonds, 1/1/2000 AA 5,415,450
------------------------------------------------------ ------------
Total 25,851,375
------------------------------------------------------ ------------
ARKANSAS--2.2%
------------------------------------------------------
4,000,000 North Little Rock, AR, 9.50% Hydro-Electric Revenue
Bonds (Prerefunded), 7/1/95 (@103) Aaa 4,350,640
------------------------------------------------------
2,300,000 Pulaski County, AR, Health Facility Board, 5.60%
Revenue Bonds (St. Vincent Infirmary, Sisters of
Charity of Nazareth Health)/(Original Issue Yield:
5.70%)/(MBIA Insured), 11/1/2002 Aaa 2,354,073
------------------------------------------------------ ------------
Total 6,704,713
------------------------------------------------------ ------------
CALIFORNIA--4.0%
------------------------------------------------------
2,250,000 California State Veterans Affairs, 7.80% GO Bonds
(Series AV), 10/1/2000 A 2,563,290
------------------------------------------------------
2,000,000 Los Angeles, CA, Department of Water & Power, 9.00%
Electric Plant Revenue Bonds, 2/1/2001 AA 2,404,580
------------------------------------------------------
1,800,000 Los Angeles, CA, Department of Water & Power, 9.00%
Electric Plant Revenue Bonds, 6/1/2000 AA 2,144,610
------------------------------------------------------
1,875,000 Los Angeles, CA, Department of Water & Power, 9.00%
Electric Plant Revenue Bonds, 6/1/2001 AA 2,270,231
------------------------------------------------------
2,500,000 Northern California Power Agency, 9.50% Revenue Bonds
(Prerefunded), 7/1/95 (@102) Aaa 2,696,575
------------------------------------------------------ ------------
Total 12,079,286
------------------------------------------------------ ------------
DELAWARE--0.3%
------------------------------------------------------
1,000,000 Delaware State, 5.20% GO Bonds (Series 1992B),
7/1/2002 Aa 1,008,480
------------------------------------------------------ ------------
</TABLE>
INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ----------- ------------------------------------------------------ --------- ------------
<C> <S> <C> <C>
INTERMEDIATE-TERM MUNICIPAL SECURITIES--CONTINUED
- ---------------------------------------------------------------------
FLORIDA--5.9%
------------------------------------------------------
$ 3,000,000 Dade County, FL, 10.00% Solid Waste Revenue Bonds
(Prerefunded), 10/1/95 (@102) Aaa $ 3,290,100
------------------------------------------------------
3,000,000 Florida State Board of Education, 6.00% UT GO Capital
Outlay Bonds (Series 1991B), 6/1/2001 AA 3,178,980
------------------------------------------------------
2,000,000 Florida State Board of Education, 6.25% Public
Education Capital Outlay Bonds (Series 1991C),
6/1/2001 AA 2,147,340
------------------------------------------------------
5,500,000 Jacksonville, FL, Electric Authority, 6.70% Electric
Revenue Bonds (St. John's River Park Power Project),
10/1/99 AA 5,768,785
------------------------------------------------------
1,000,000 Miami Beach, FL, HFDA, 5.60% Revenue Bonds (Mount
Sinai Medical Center)/(Original Issue Yield: 5.65%)/
(Capital Guaranty), 11/15/2002 Aaa 1,037,440
------------------------------------------------------
1,500,000 Orlando, FL, Utilities Commission, 5.40% Revenue Bonds
(Series 1992)/(Original Issue Yield: 5.50%), 10/1/2002 Aa1 1,525,035
------------------------------------------------------
1,050,000 Plantation, FL, Water & Sewer Authority, 8.70% Revenue
Bonds (MBIA Insured)/(ETM), 3/1/96 Aaa 1,130,462
------------------------------------------------------ ------------
Total 18,078,142
------------------------------------------------------ ------------
GEORGIA--4.3%
------------------------------------------------------
2,000,000 Georgia Municipal Electric Authority, 6.50% Power
Supply Revenue Bonds (Series U), 1/1/2000 AA 2,131,440
------------------------------------------------------
1,000,000 Georgia Municipal Electric Authority, 6.60% Power
Supply Revenue Bonds (Series U), 1/1/2001 AA 1,075,420
------------------------------------------------------
4,095,000 Georgia Private Colleges & Universities Authority,
5.60% Revenue Bonds (Series 1992C)/(Emory University
Project), 10/1/2001 AA 4,228,743
------------------------------------------------------
5,000,000 Georgia State, 7.70% GO Bonds, 2/1/2001 AA+ 5,769,100
------------------------------------------------------ ------------
Total 13,204,703
------------------------------------------------------ ------------
</TABLE>
INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ----------- ------------------------------------------------------ --------- ------------
<C> <S> <C> <C>
INTERMEDIATE-TERM MUNICIPAL SECURITIES--CONTINUED
- ---------------------------------------------------------------------
HAWAII--4.7%
------------------------------------------------------
$ 3,000,000 City & County of Honolulu, HI, 6.30% GO Bonds
(Series 1991A), 8/1/2001 AA $ 3,206,160
------------------------------------------------------
2,000,000 Hawaii State, 5.00% GO Bonds (Series CC), 2/1/2003 Aa 1,970,860
------------------------------------------------------
1,000,000 Hawaii State, 5.85% GO Bonds (Series 1991BU)/
(Original Issue Yield: 5.95%), 11/1/2001 AA 1,049,560
------------------------------------------------------
2,000,000 Hawaii State, 6.25% GO Bonds (Series 1992BZ),
10/1/2002 AA 2,148,760
------------------------------------------------------
5,000,000 Hawaii State, 8.00% GO Bonds (Series 1991BT), 2/1/2001 AA 5,828,700
------------------------------------------------------ ------------
Total 14,204,040
------------------------------------------------------ ------------
ILLINOIS--6.4%
------------------------------------------------------
1,930,000 Chicago, IL, 5.00% GO Bonds (Series 1993A)/(Original
Issue Yield: 5.05%)/(MBIA Insured), 1/1/2003 AAA 1,878,720
------------------------------------------------------
2,000,000 Chicago, IL, School Finance Authority, 8.00% Revenue
Bonds (FGIC Insured), 6/1/97 Aaa 2,118,140
------------------------------------------------------
3,000,000 Du Page, IL, Water Commission, 6.05% GO Water
Refunding Bonds (Du Page, Cook & Will Counties)/
(Series 1992), 3/1/2002 Aaa 3,166,530
------------------------------------------------------
3,000,000 Illinois Municipal Electric Agency, Power Supply
System, 6.20% Revenue Bonds (Series 1991A)/(AMBAC
Insured), 2/1/2001 AAA 3,173,850
------------------------------------------------------
1,840,000 Illinois State Highway Authority, 9.125% Revenue Bonds
(Northern Illinois Toll Highway)/(Prerefunded),
1/1/96 (@102) AAA 2,014,432
------------------------------------------------------
4,000,000 Illinois State Sales Tax Revenue Bonds, 4.75%
(Original Issue Yield: 5.05%), 6/15/2002 AAA 3,834,640
------------------------------------------------------
1,300,000 Illinois State Toll Highway Authority, 4.75% Priority
Revenue Bonds (Series A)/(Original Issue Yield:
5.00%), 1/1/2003 A 1,224,600
------------------------------------------------------
</TABLE>
INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ----------- ------------------------------------------------------ --------- ------------
<C> <S> <C> <C>
INTERMEDIATE-TERM MUNICIPAL SECURITIES--CONTINUED
- ---------------------------------------------------------------------
ILLINOIS--CONTINUED
------------------------------------------------------
$ 2,000,000 University Of Illinois Board of Trustees, 6.40%
Auxiliary Facilities System, Revenue Bonds, (Series
1991), 4/1/2001 AA $ 2,148,240
------------------------------------------------------ ------------
Total 19,559,152
------------------------------------------------------ ------------
MARYLAND--0.3%
------------------------------------------------------
1,000,000 University of Maryland, 5.80% Tuition Revenue Bonds
(Series A)/(System Auxiliary Facility), 2/1/2002 Aa 1,045,810
------------------------------------------------------ ------------
MICHIGAN--4.5%
------------------------------------------------------
4,500,000 Detroit, MI, School District, 4.85% UT GO Bonds
(Q-SBLF Program)/(Original Issue Yield: 4.95%),
5/1/2004 AA 4,216,275
------------------------------------------------------
1,250,000 Jackson County, MI, Hospital Finance Authority, 4.80%
Revenue Bonds (Series A)/(Original Issue Yield:
4.90%)/ (FGIC Insured), 6/1/2005 AAA 1,159,950
------------------------------------------------------
5,750,000 Michigan Municipal Bond Authority, Zero Coupon Capital
Appreciation Revenue Bonds (Series 1991A)/(Local
Government Loan Program)/(Original Issue Yield:
6.35%)/(FGIC Insured), 12/1/2000 AAA 4,071,920
------------------------------------------------------
2,000,000 Michigan State Building Authority, 6.25% Revenue Bonds
(Series II)/(AMBAC Insured), 10/1/2000 AAA 2,137,460
------------------------------------------------------
1,000,000 Michigan State Hospital Finance Authority, 5.50%
Revenue Bonds (Series 1992A)/(Henry Ford Health
System)/ (Original Issue Yield: 5.55%), 9/1/2001 Aa 1,016,630
------------------------------------------------------
1,000,000 Royal Oak, MI, Hospital Finance Authority, 7.40%
Hospital Revenue Bonds (William Beaumont Hospital),
1/1/2000 Aa 1,081,510
------------------------------------------------------ ------------
Total 13,683,745
------------------------------------------------------ ------------
</TABLE>
INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ----------- ------------------------------------------------------ --------- ------------
<C> <S> <C> <C>
INTERMEDIATE-TERM MUNICIPAL SECURITIES--CONTINUED
- ---------------------------------------------------------------------
NEBRASKA--1.1%
------------------------------------------------------
$ 2,500,000 Omaha, NE, Public Power District Electric System,
5.00% Revenue Bonds (Series 1993), 2/1/2003 AA $ 2,451,625
------------------------------------------------------
1,000,000 Omaha, NE, Public Power District Nebraska Electric,
4.70% Revenue Bonds (Series D), 2/1/2003 AA 949,990
------------------------------------------------------ ------------
Total 3,401,615
------------------------------------------------------ ------------
NEVADA--0.4%
------------------------------------------------------
1,000,000 Clark County, NV, 9.75% LT GO School Improvement Bonds
(MBIA Insured), 6/1/2000 AAA 1,240,690
------------------------------------------------------ ------------
NEW HAMPSHIRE--0.9%
------------------------------------------------------
2,555,000 New Hampshire State, 6.40% GO Bonds
(Series 1991A), 6/15/2001 AA 2,768,138
------------------------------------------------------ ------------
NEW YORK--3.5%
------------------------------------------------------
1,500,000 Municipal Assistance Corp. of New York, 6.60% Revenue
Bonds (Series 62), 7/1/2000 AA- 1,607,280
------------------------------------------------------
2,000,000 Municipal Assistance Corp. of New York, 7.00%
Resolution Revenue Bonds, 7/1/97 AA- 2,143,540
------------------------------------------------------
2,000,000 New York City, NY, Water & Sewer Finance Authority,
5.00% Revenue Bonds (Series B)/(Original Issue Yield:
5.10%), 6/15/2003 A- 1,934,980
------------------------------------------------------
2,550,000 New York State Power Authority, 5.90% Revenue and
General Purpose Bonds, 1/1/2002 Aa 2,675,205
------------------------------------------------------
1,000,000 New York State Urban Development Corp., 9.20% Revenue
Bonds (Prerefunded), 1/1/96 (@102) Aaa 1,097,570
------------------------------------------------------
1,000,000 Triborough Bridge & Tunnel Authority, NY, 6.625%
General Purpose Revenue Bonds, (Series S), 1/1/2001 A+ 1,084,900
------------------------------------------------------ ------------
Total 10,543,475
------------------------------------------------------ ------------
</TABLE>
INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ----------- ------------------------------------------------------ --------- ------------
<C> <S> <C> <C>
INTERMEDIATE-TERM MUNICIPAL SECURITIES--CONTINUED
- ---------------------------------------------------------------------
NORTH CAROLINA--6.5%
------------------------------------------------------
$ 3,355,000 Charlotte-Mecklenburg Hospital Authority, NC, 5.90%
Health Care System Revenue Bonds (Original Issue
Yield: 5.95%), 1/1/2002 Aa $ 3,422,536
------------------------------------------------------
4,225,000 North Carolina Eastern Municipal Power, 5.125% Revenue
Bonds (Series C)/(Original Issue Yield: 5.25%),
1/1/2003 A- 4,086,673
------------------------------------------------------
2,000,000 North Carolina Eastern Municipal Power, 5.25% Revenue
Bonds (Series C)/(Original Issue Yield: 5.40%),
1/1/2004 A- 1,931,280
------------------------------------------------------
5,000,000 North Carolina Municipal Power Agency, 5.90% Revenue
Bonds (Catawba Electric)/(Original Issue Yield:
5.95%), 1/1/2003 A 5,090,600
------------------------------------------------------
5,020,000 North Carolina Municipal Power Agency, 6.00% Revenue
Bonds (Catawba Electric)/(Original Issue Yield:
6.05%), 1/1/2004 A 5,216,081
------------------------------------------------------ ------------
Total 19,747,170
------------------------------------------------------ ------------
OHIO--3.4%
------------------------------------------------------
1,450,000 Columbus, OH, 5.00% GO Various Purpose UT Bonds
(Series 1993I), 9/15/2002 Aa1 1,443,083
------------------------------------------------------
1,330,000 Franklin County, OH, 5.30% Hospital Facility Revenue
Bonds (Series 1993A)/(Riverside United Methodist
Hospital)/(Original Issue Yield: 5.40%), 5/15/2002 NR 1,291,350
------------------------------------------------------
2,500,000 Hamilton County, OH, Sewer System, 6.20%
Improvement & Refunding Revenue Bonds
(Series 1991A)/(Metropolitan Sewer District of
Greater Cincinnati), 12/1/2000 AA- 2,666,150
------------------------------------------------------
1,400,000 Montgomery County, OH, 6.20% Revenue Bonds
(Series 1991A)/(Sisters of Charity Healthcare
Systems, Inc.)/(MBIA Insured), 5/15/2001 AAA 1,493,394
------------------------------------------------------
</TABLE>
INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ----------- ------------------------------------------------------ --------- ------------
<C> <S> <C> <C>
INTERMEDIATE-TERM MUNICIPAL SECURITIES--CONTINUED
- ---------------------------------------------------------------------
OHIO--CONTINUED
------------------------------------------------------
$ 3,000,000 Ohio State Building Authority, 9.625% Revenue Bonds,
(Prerefunded), 10/1/95 (@103) Aaa $ 3,304,530
------------------------------------------------------ ------------
Total 10,198,507
------------------------------------------------------ ------------
OKLAHOMA--0.7%
------------------------------------------------------
2,000,000 Tulsa, OK, 5.15% GO Refunding Bonds, 6/1/2003 AA 1,984,380
------------------------------------------------------ ------------
PENNSYLVANIA--4.8%
------------------------------------------------------
1,000,000 Allegheny County, PA, HDA, 5.50% Revenue Bonds
(Presbyterian University Health System)/(Original
Issue Yield: 5.60%)/(MBIA Insured), 11/1/2002 Aaa 1,016,100
------------------------------------------------------
1,500,000 Allegheny County, PA, HDA, 6.875% Revenue Bonds (Mercy
Hospital of Pittsburgh)/(BIGI Insured), 10/1/99 Aaa 1,595,340
------------------------------------------------------
1,500,000 Pennsylvania Infrastructure Investment Authority,
6.15% Revenue Bonds (Series 1990B)/(Pennvest Loan Pool
Program), 9/1/2001 AA 1,590,030
------------------------------------------------------
8,000,000 Philadelphia, PA, 5.00% Water and Wastewater Revenue
Bonds (Original Issue Yield: 5.25%)/
(CGIC Insured), 6/15/2002 AAA 7,890,560
------------------------------------------------------
1,475,000 Washington County, PA, Hospital Authority, 5.50%
Revenue Bonds (Shadyside Hospital)/(Original Issue
Yield: 5.60%)/(AMBAC Insured), 12/15/2001 Aaa 1,516,153
------------------------------------------------------
1,155,000 Westmoreland County, PA, 4.70% GO Refunding Bonds
(Series D)/(MBIA Insured), 8/1/2002 AAA 1,127,384
------------------------------------------------------ ------------
Total 14,735,567
------------------------------------------------------ ------------
SOUTH CAROLINA--3.3%
------------------------------------------------------
1,290,000 Charleston, SC, Waterworks & Sewer System, 9.625%
Revenue Bonds (Prerefunded), 1/1/96 (@102) AAA 1,422,083
------------------------------------------------------
730,000 Columbia, SC, Waterworks & Sewer System, 6.40%
Revenue Bonds, 2/1/2001 AA 782,998
------------------------------------------------------
</TABLE>
INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ----------- ------------------------------------------------------ --------- ------------
<C> <S> <C> <C>
INTERMEDIATE-TERM MUNICIPAL SECURITIES--CONTINUED
- ---------------------------------------------------------------------
SOUTH CAROLINA--CONTINUED
------------------------------------------------------
$ 4,270,000 Columbia, SC, Waterworks & Sewer System, 6.40%
Revenue Bonds, 2/1/2001 AA $ 4,587,474
------------------------------------------------------
3,000,000 South Carolina Public Service Authority, 9.50%
Electric Revenue Bonds (Prerefunded), 7/1/95 (@103) Aaa 3,262,980
------------------------------------------------------ ------------
Total 10,055,535
------------------------------------------------------ ------------
TENNESSEE--2.7%
------------------------------------------------------
2,000,000 Knox County, TN, 4.80% UT GO Bonds (Original Issue
Yield: 4.85%), 3/1/2003 AA 1,920,380
------------------------------------------------------
2,000,000 Memphis, TN, 4.90% Water Division Revenue Refunding
Bonds (Series 1993), 1/1/2003 AA 1,943,960
------------------------------------------------------
3,000,000 Memphis, TN, 5.625% Electric System Revenue Bonds,
1/1/2002 Aa 3,107,400
------------------------------------------------------
1,065,000 Metropolitan Government of Nashville & Davidson
County, TN, 5.85% Health & Educational Facilities
Board Revenue Bonds (Series 1991B)/(The Vanderbilt
University)/(Original Issue Yield: 5.95%), 10/1/2001 AA 1,116,589
------------------------------------------------------ ------------
Total 8,088,329
------------------------------------------------------ ------------
TEXAS--16.4%
------------------------------------------------------
1,000,000 Canyon, TX, ISD, 8.20% GO Bonds (MBIA Insured),
2/15/96 Aaa 1,066,600
------------------------------------------------------
5,000,000 Central Texas Higher Education Authority, 4.85%
(Series C), 12/1/2002 Aa 4,778,400
------------------------------------------------------
2,000,000 Dallas County, TX, 8.75% UT GO Bonds, 1/10/96 Aaa 2,146,080
------------------------------------------------------
1,755,000 Dallas, Denton & Collins Townships, TX, Waterworks &
Sewer System, 6.60% Revenue Bonds, 4/1/2000 Aa 1,872,655
------------------------------------------------------
1,000,000 Dallas, Denton & Collins Townships, TX, Waterworks &
Sewer System, 9.50% Revenue Bonds, 10/1/98 Aa 1,119,430
------------------------------------------------------
</TABLE>
INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ----------- ------------------------------------------------------ --------- ------------
<C> <S> <C> <C>
INTERMEDIATE-TERM MUNICIPAL SECURITIES--CONTINUED
- ---------------------------------------------------------------------
TEXAS--CONTINUED
------------------------------------------------------
$ 4,000,000 Garland, TX, 5.80% UT GO Bonds (Dallas
County)/(Original Issue Yield: 5.90%), 8/15/2001 Aa $ 4,149,640
------------------------------------------------------
3,000,000 Houston, TX, ISD, 5.40% LT Schoolhouse Refunding Bonds
(Permanent School Fund Guaranty), 8/15/2001 Aaa 3,062,520
------------------------------------------------------
4,500,000 Houston, TX, ISD, 8.375% LT Schoolhouse Bonds
(Series 1991), 8/15/2000 Aaa 5,274,990
------------------------------------------------------
2,500,000 San Antonio, TX, 6.00% Water System Revenue Refunding
Bonds (Series 1992)/(Original Issue Yield:
6.15%)/(FGIC Insured), 5/15/2001 Aaa 2,619,850
------------------------------------------------------
1,475,000 San Antonio, TX, 8.625% GO Bonds, 8/1/2000 AA 1,752,123
------------------------------------------------------
2,000,000 San Antonio, TX, Electric & Gas System, 5.30% Revenue
Bonds, 2/1/2002 Aa 2,008,580
------------------------------------------------------
2,000,000 San Antonio, TX, Electric & Gas System, 7.00% Revenue
Bonds, 2/1/99 Aa 2,157,560
------------------------------------------------------
1,650,000 San Antonio, TX, Electric & Gas System, 9.90% Revenue
Bonds, 2/1/98 Aa 1,924,213
------------------------------------------------------
6,370,000 Socorro, TX, ISD, 6.25% UT GO Refunding Bonds (Series
1991A)/(Permanent School Fund Guaranty)/ (Original
Issue Yield: 6.30%), 8/15/2001 AAA 6,770,992
------------------------------------------------------
3,000,000 Texas State Public Property Finance Corp., 5.10%
Acquisition and Refunding Revenue Bonds (Series
1993)/(Mental Health and Mental Retardation
Center)/(CGIC Insured), 9/1/2003 AAA 2,919,990
------------------------------------------------------
6,000,000 Texas Water Development Board, 5.80% Revenue Bonds
(Series 1992)/(Original Issue Yield: 5.90%), 7/15/2002 Aa 6,223,560
------------------------------------------------------ ------------
Total 49,847,183
------------------------------------------------------ ------------
</TABLE>
INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ----------- ------------------------------------------------------ --------- ------------
<C> <S> <C> <C>
INTERMEDIATE-TERM MUNICIPAL SECURITIES--CONTINUED
- ---------------------------------------------------------------------
UTAH--2.3%
------------------------------------------------------
$ 5,000,000 Intermountain Power Agency, 4.80% Power Supply Revenue
Bonds (Series 1993C), 7/1/2003 AA $ 4,793,500
------------------------------------------------------
2,000,000 Intermountain Power Agency, 7.20% Power Supply Revenue
Bonds, 7/1/99 AA 2,185,500
------------------------------------------------------ ------------
Total 6,979,000
------------------------------------------------------ ------------
VERMONT--0.4%
------------------------------------------------------
1,000,000 Vermont State, 5.80% GO Bonds, (Series 1992A)
(Original Issue Yield: 5.934%), 2/1/2002 Aa 1,050,350
------------------------------------------------------ ------------
VIRGINIA--4.0%
------------------------------------------------------
2,025,000 Newport News, VA, 5.40% General Improvement GO
Refunding Bonds (Series 1992B), 7/1/2002 Aa 2,060,701
------------------------------------------------------
6,000,000 Norfolk, VA, 5.00% GO Capital Improvement and
Refunding Bonds, 2/1/2003 Aa 5,904,360
------------------------------------------------------
1,995,000 Virginia Beach, VA, 6.30% GO Bonds, 3/1/2000 AA 2,131,239
------------------------------------------------------
1,995,000 Virginia Beach, VA, 6.30% GO Bonds, 3/1/2001 AA 2,141,832
------------------------------------------------------ ------------
Total 12,238,132
------------------------------------------------------ ------------
WASHINGTON--3.8%
------------------------------------------------------
1,020,000 Seattle, WA, 6.00% LT GO Refunding Bonds (Series B),
3/1/2002 AA+ 1,074,733
------------------------------------------------------
2,000,000 Snohomish County, WA, School District #6, 5.45% GO
Bonds (FGIC Insured), 12/1/2005 AAA 1,981,480
------------------------------------------------------
4,000,000 Washington State Suburban Sanitation District, 4.40%
GO Bonds (Original Issue Yield: 4.50%), 6/1/2004 AA 3,613,440
------------------------------------------------------
2,000,000 Washington State, 5.60% GO Motor Vehicle Fuel Tax
Refund Bonds (Series D), 9/1/2001 Aa 2,067,140
------------------------------------------------------
</TABLE>
INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ----------- ------------------------------------------------------ --------- ------------
<C> <S> <C> <C>
INTERMEDIATE-TERM MUNICIPAL SECURITIES--CONTINUED
- ---------------------------------------------------------------------
WASHINGTON--CONTINUED
------------------------------------------------------
$ 2,570,000 Washington State, 6.60% UT GO Bonds (Series A),
2/1/2002 Aa $ 2,799,938
------------------------------------------------------ ------------
Total 11,536,731
------------------------------------------------------ ------------
WISCONSIN--0.8%
------------------------------------------------------
2,500,000 Wisconsin State, 5.20% GO Bonds (Original Issue Yield:
5.30%), 11/1/2002 Aa 2,521,925
------------------------------------------------------ ------------
TOTAL INTERMEDIATE-TERM MUNICIPAL SECURITIES
(IDENTIFIED COST, $292,646,721) 298,776,591
------------------------------------------------------ ------------
SHORT-TERM MUNICIPAL SECURITIES--0.2%
- ---------------------------------------------------------------------
PUERTO RICO--0.0%
------------------------------------------------------
150,000 Government Development Bank of Puerto Rico Weekly
VRDNs (Credit Suisse and Sumitomo Bank Ltd. LOCs) A-1 150,000
------------------------------------------------------ ------------
TEXAS--0.2%
------------------------------------------------------
500,000 Houston, TX, HFDC Daily VRDNs (Methodist Hospital
Guaranty) A-1+ 500,000
------------------------------------------------------ ------------
TOTAL SHORT-TERM MUNICIPAL SECURITIES 650,000
------------------------------------------------------ ------------
TOTAL MUNICIPAL SECURITIES
(IDENTIFIED COST, $293,296,721) $299,426,591+
------------------------------------------------------ ------------
</TABLE>
* Please refer to the appendix of Statement of Additional Information for an
explanation of the credit ratings. Current credit ratings are unaudited.
+ The cost of investments for federal tax purposes amounts to $293,296,721. The
net unrealized appreciation of investments on a federal tax basis amounts to
$6,129,870 which is comprised of $9,540,662 appreciation and $3,410,792
depreciation at May 31, 1994.
Note: The categories of investments are shown as a percentage of net assets
($304,378,407) at May 31, 1994.
INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
The following abbreviations are used in this portfolio:
<TABLE>
<S> <C>
AMBAC -- American Municipal Bond Assurance Corporation
BIGI -- Bond Investors Guaranty Inc.
CGIC -- Capital Guaranty Insurance Corporation
ETM -- Escrowed to Maturity
FGIC -- Financial Guaranty Insurance Company
GO -- General Obligation
HDA -- Housing Development Authority
HFDA -- Health Facility Development Authority
HFDC -- Health Facility Development Corporation
ISD -- Independent School District
LOCs -- Letters of Credit
LT -- Limited Tax
MBIA -- Municipal Bond Investors Assurance
Q-SBLF -- Qualified State Bond Loan Fund
UT -- Unlimited Tax
VRDNs -- Variable Rate Demand Notes
</TABLE>
(See Notes which are an integral part of the Financial Statements)
INTERMEDIATE MUNICIPAL TRUST
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Investments in securities, at value (Note 2A)
(identified and tax cost $293,296,721) $299,426,591
- --------------------------------------------------------------------------------
Cash 51,192
- --------------------------------------------------------------------------------
Interest receivable 6,146,492
- --------------------------------------------------------------------------------
Receivable for Fund shares sold 145,691
- -------------------------------------------------------------------------------- ------------
Total assets 305,769,966
- --------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------
Dividends payable (Note 2B) $1,040,815
- -------------------------------------------------------------------
Payable for Fund shares redeemed 290,969
- -------------------------------------------------------------------
Accrued expenses 59,775
- ------------------------------------------------------------------- ----------
Total liabilities 1,391,559
- -------------------------------------------------------------------------------- ------------
NET ASSETS for 28,944,792 shares of beneficial interest outstanding $304,378,407
- -------------------------------------------------------------------------------- ------------
NET ASSETS CONSISTS OF:
- --------------------------------------------------------------------------------
Paid in capital $306,287,925
- --------------------------------------------------------------------------------
Unrealized appreciation of investments 6,129,870
- --------------------------------------------------------------------------------
Accumulated net realized loss on investments (8,039,388)
- -------------------------------------------------------------------------------- ------------
Total Net Assets $304,378,407
- -------------------------------------------------------------------------------- ------------
NET ASSET VALUE, Offering Price, and Redemption Price Per Share
Institutional Shares ($302,663,253 / 28,781,697 shares of beneficial interest
outstanding) $10.52
- -------------------------------------------------------------------------------- ------------
Institutional Service Shares ($1,715,154 / 163,095 shares of beneficial interest
outstanding) $10.52
- -------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
INTERMEDIATE MUNICIPAL TRUST
STATEMENT OF OPERATIONS
YEAR ENDED MAY 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -----------------------------------------------------------------------------------
Interest income (Note 2B) $16,884,773
- -----------------------------------------------------------------------------------
EXPENSES--
- -----------------------------------------------------------------------------------
Investment advisory fee (Note 4) $1,244,249
- ---------------------------------------------------------------------
Trustees' fees 8,465
- ---------------------------------------------------------------------
Administrative personnel and services fee (Note 4) 303,207
- ---------------------------------------------------------------------
Custodian and portfolio accounting fees 170,421
- ---------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses
(Note 4) 19,955
- ---------------------------------------------------------------------
Fund share registration costs 74,236
- ---------------------------------------------------------------------
Auditing fees 17,545
- ---------------------------------------------------------------------
Legal fees 11,623
- ---------------------------------------------------------------------
Printing and postage 22,602
- ---------------------------------------------------------------------
Insurance premiums 9,436
- ---------------------------------------------------------------------
Distribution services fees (Note 4)--Institutional Service
Shares 1,574
- ---------------------------------------------------------------------
Shareholder services fee (Note 4)--Institutional Service
Shares 833
- ---------------------------------------------------------------------
Taxes 9,594
- ---------------------------------------------------------------------
Miscellaneous 8,163
- --------------------------------------------------------------------- ----------
Total expenses 1,901,903
- ---------------------------------------------------------------------
DEDUCT--
- ---------------------------------------------------------------------
Waiver of investment advisory fee (Note 4) $6,917
- ------------------------------------------------------------
Waiver of distribution services fees (Note 4) 833 7,750
- ------------------------------------------------------------ ------ ----------
Net expenses 1,894,153
- ----------------------------------------------------------------------------------- -----------
Net investment income 14,990,620
- ----------------------------------------------------------------------------------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- -----------------------------------------------------------------------------------
Net realized gain (loss) on investments (identified cost
basis) (760,854)
- -----------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments (7,198,457)
- ----------------------------------------------------------------------------------- -----------
Net realized and unrealized (loss) on investments (7,959,311)
- ----------------------------------------------------------------------------------- -----------
Change in net assets resulting from
operations $ 7,031,309
- ----------------------------------------------------------------------------------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
INTERMEDIATE MUNICIPAL TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED MAY 31,
<S> <C> <C>
1994 1993
------------ ------------
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------------------------
OPERATIONS--
- -------------------------------------------------------------
Net investment income $ 14,990,620 $ 11,109,442
- -------------------------------------------------------------
Net realized gain (loss) on investment transactions ($760,854
and $242,740 net loss, respectively, as computed for
federal tax purposes) (Note 2C) (760,854) (242,740)
- -------------------------------------------------------------
Change in unrealized (depreciation) appreciation of
investments (7,198,457) 7,725,575
- ------------------------------------------------------------- ------------ ------------
Change in net assets resulting from operations 7,031,309 18,592,277
- ------------------------------------------------------------- ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2B)--
- -------------------------------------------------------------
Dividends to shareholders from net investment income:
- -------------------------------------------------------------
Institutional Shares (14,961,284) (11,109,442)
- -------------------------------------------------------------
Institutional Service Shares (29,336) --
- ------------------------------------------------------------- ------------ ------------
Change in net assets from distributions to shareholders (14,990,620) (11,109,442)
- ------------------------------------------------------------- ------------ ------------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)--
- -------------------------------------------------------------
Proceeds from sale of shares 204,983,560 165,053,543
- -------------------------------------------------------------
Net asset value of shares issued to shareholders
in payment of dividends declared 2,548,104 1,634,529
- -------------------------------------------------------------
Cost of shares redeemed (158,476,788) (84,589,739)
- ------------------------------------------------------------- ------------ ------------
Change in net assets resulting from Fund share
transactions 49,054,876 82,098,333
- ------------------------------------------------------------- ------------ ------------
Change in net assets 41,095,565 89,581,168
- -------------------------------------------------------------
NET ASSETS:
- -------------------------------------------------------------
Beginning of period 263,282,842 173,701,674
- ------------------------------------------------------------- ------------ ------------
End of period $304,378,407 $263,282,842
- ------------------------------------------------------------- ------------ ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
INTERMEDIATE MUNICIPAL TRUST
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1994
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Intermediate Municipal Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended, (the "Act") as an open-end, management
investment company. The Trust consists of three portfolios. The financial
statements included herein present only those of Intermediate Municipal Trust
(the "Fund"). The financial statements of the other portfolios are presented
separately. The assets of each portfolio are segregated and a shareholder's
interest is limited to the portfolio in which shares are held.
The Fund offers two classes of shares Institutional Shares and Institutional
Service Shares. Institutional Service Shares are identical in all respects to
Institutional Shares except that Institutional Service Shares are sold pursuant
to a distribution plan (the "Plan") adopted in accordance with the Act's Rule
12b-1.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
A. INVESTMENT VALUATIONS--Municipal bonds are valued by an independent pricing
service taking into consideration yield, liquidity, risk, credit, quality,
coupon, maturity, type of issue, and any other factors or market data it
deems relevant in determining valuations for normal institutional size
trading units of debt securities. The independent pricing service does not
rely exclusively on quoted prices. Short-term securities with remaining
maturities of sixty days or less may be stated at amortized cost, which
approximates value.
B. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized as
required by the Internal Revenue Code, as amended (the "Code"). Distributions
to shareholders are recorded on the ex-dividend date.
C. FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its tax-exempt income.
Accordingly, no provisions for federal tax are necessary. At May 31, 1994,
the Fund for federal tax purposes had a capital loss carryfoward of
$7,278,604, which will reduce the Fund's taxable income arising from future
net realized gain on investments, if any, to the extent permitted by the
Code, and thus will reduce the amount of the distributions to shareholders
which would otherwise be necessary to relieve the Fund of any liability for
federal tax. Pursuant to the Code, such capital loss carryfoward will expire
in 1995 ($2,674,980), 1996 ($3,974,606), 1997 ($215,810), 1998 ($170,468),
and 2001, ($242,740). Additionally, net capital losses of $760,854
attributable to security transactions incurred after October 31, 1993 are
treated as arising on June 1, 1994, the first day of the Fund's next taxable
year.
INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
D. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. A Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the securities
purchased. Securities purchased on a when-issued or delayed delivery basis
are marked to market daily and begin earning interest on the settlement date.
E. OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED MAY 31,
-----------------------------------------------------------
1994 1993
----------------------------- --------------------------
INSTITUTIONAL SHARES SHARES DOLLARS SHARES DOLLARS
- -------------------------------------- ----------- ------------- ---------- ------------
<S> <C> <C> <C> <C>
Shares sold 18,798,999 $ 203,167,923 15,482,627 $165,053,543
- --------------------------------------
Shares issued to shareholders electing
to receive payment of dividends in
Trust shares 233,762 2,527,875 153,583 1,634,529
- --------------------------------------
Shares redeemed (14,769,157) (158,406,508) (7,968,625) (84,589,739)
- -------------------------------------- ----------- ------------- ---------- ------------
Net change resulting from
Institutional Shares Transactions 4,263,604 $ 47,289,290 7,667,585 $ 82,098,333
- -------------------------------------- ----------- ------------- ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED
MAY 31, 1994*
-------------------------
INSTITUTIONAL SERVICE SHARES SHARES DOLLARS
- ---------------------------------------- --------- -----------
<S> <C> <C>
Shares sold 167,890 $ 1,815,637
- ----------------------------------------
Shares issued to shareholders electing
to receive payment of dividends in
Trust shares 1,896 20,229
- ----------------------------------------
Shares redeemed (6,691) (70,280)
- ---------------------------------------- --------- -----------
Net change resulting from Institutional
Service Share Transactions 163,095 1,765,586
- ---------------------------------------- --------- -----------
Total net change resulting from Fund
Share Transactions 4,426,699 $49,054,876
- ---------------------------------------- --------- -----------
</TABLE>
* For the period from September 6, 1993 (date of initial public offering) to May
31, 1994.
INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
ADVISORY FEE--Federated Management, the Fund's investment adviser (the
"Adviser"), receives for its services an annual investment advisory fee equal to
.40% of the Fund's average daily net assets. The Adviser may voluntarily choose
to waive its fee. The Adviser can modify or terminate this voluntary waiver at
any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
administrative personnel and services. Prior to March 1, 1994, these services
were provided at approximate cost. Effective March 1, 1994, the FAS fee is based
on the level of average aggregate daily net assets of all funds advised by
subsidiaries of Federated Investors for the period. The administrative fee
received during the period of the Administrative Services Agreement shall be at
least $125,000 per portfolio and $30,000 per each additional class of shares.
DISTRIBUTION AND SHAREHOLDER SERVICES FEES--The Fund has adopted a Distribution
Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the
Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal
distributor, from the net assets of the Fund to finance activities intended to
result in the sale of the Fund's Institutional Service Shares. The Plan provides
that the Fund may incur distribution expenses up to .25 of 1% of the average
daily net assets of the Institutional Service Shares, annually, to compensate
FSC.
Under the terms of a shareholder services agreement with Federated Shareholder
Services ("FSS"), the Fund will pay FSS up to .25 of 1% of average net assets
for the Fund for the period. This fee is to obtain certain personal services for
shareholders and the maintenance of shareholder accounts. For the period ended
May 31, 1994, Institutional Shares did not incur a shareholder services fee.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ") serves as transfer agent and dividend disbursing for the Fund. The
FServ fee is based on the size, type and number of accounts and transactions
made by shareholders.
INTERFUND TRANSACTIONS--During the period ended May 31, 1994, the Fund engaged
in purchase and sale transactions with other affiliated funds pursuant to Rule
17a-7 of the Investment Company Act of 1940 amounting to $83,650,000 and
$86,250,000, respectively. These purchases and sales were conducted on an arms
length basis and transacted for cash consideration only, at independent current
market prices and without brokerage commissions, fees or other remuneration.
Certain Officers and Trustees of the Fund are Officers and Directors or Trustees
of the above companies.
INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
fiscal year ended May 31, 1994 were as follows:
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------
PURCHASES $75,083,665
- ------------------------------------------------------------------------------- -----------
SALES $20,359,093
- ------------------------------------------------------------------------------- -----------
</TABLE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
INTERMEDIATE MUNICIPAL TRUST
(Intermediate Municipal Trust):
We have audited the accompanying statement of assets and liabilities of
Intermediate Municipal Trust (an investment portfolio of Intermediate Municipal
Trust, a Massachusetts business trust), including the schedule of portfolio
investments, as of May 31, 1994, and the related statement of operations for the
year then ended, and the statements of changes in net assets, and the financial
highlights (see pages 2 and 17 of the prospectus) for the periods presented.
These financial statements and financial highlights are the responsibility of
the Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned as of
May 31, 1994, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Intermediate Municipal Trust, an investment portfolio of Intermediate Municipal
Trust, as of May 31, 1994, the results of its operations for the year then
ended, and changes in its net assets and the financial highlights for the
periods presented, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN & CO.
Pittsburgh, Pennsylvania
July 11, 1994
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Intermediate Municipal Trust Federated Investors Tower
Institutional Service Shares Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Investment Adviser
Federated Management Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Custodian
State Street Bank and P.O. Box 8602
Trust Company Boston, Massachusetts 02266-8602
- ------------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Legal Counsel
Houston, Houston & Donnelly 2510 Centre City Tower
Pittsburgh, Pennsylvania 15222
- ------------------------------------------------------------------------------------------------
Legal Counsel
Dickstein, Shapiro & Morin, L.L.P. 2101 L Street, N.W.
Washington, D.C. 20037
- ------------------------------------------------------------------------------------------------
Independent Public Accountants
Arthur Andersen & Co. 2100 One PPG Place
Pittsburgh, Pennsylvania 15222
- ------------------------------------------------------------------------------------------------
</TABLE>
INTERMEDIATE MUNICIPAL TRUST
Institutional Service Shares
Prospectus
A No-Load, Open-End, Diversified
Management Investment Company
July 31, 1994
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
458810207
8061702A-ISS (7/94)
INTERMEDIATE MUNICIPAL TRUST
[FORMERLY, FEDERATED INTERMEDIATE MUNICIPAL TRUST]
INSTITUTIONAL SHARES
PROSPECTUS
The Institutional Shares offered by this prospectus represent interests in a
diversified portfolio of securities (the "Fund") of Intermediate Municipal Trust
(the "Trust"). The Trust is an open-end, diversified management investment
company (a mutual fund).
The objective of the Fund is to provide current income exempt from federal
regular income tax. The Fund pursues this investment objective by investing in a
portfolio of municipal securities with a dollar-weighted average portfolio
maturity of not less than three or more than ten years.
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 THESE 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 Combined Statement of Additional Information for
Institutional Shares and Institutional Service Shares dated July 31, 1994 with
the Securities and Exchange Commission. The information contained in the
Combined Statement of Additional Information is incorporated by reference in
this prospectus. You may request a copy of the Combined Statement of Additional
Information free of charge by calling 1-800-235-4669. To obtain other
information or to make inquiries about the Fund, contact the Fund at the address
listed in the back of this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus dated July 31, 1994
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
SUMMARY OF FUND EXPENSES 1
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS--
INSTITUTIONAL SHARES 2
- ------------------------------------------------------
GENERAL INFORMATION 3
- ------------------------------------------------------
INVESTMENT INFORMATION 3
- ------------------------------------------------------
Investment Objective 3
Investment Policies 3
Acceptable Investments 3
Average Maturity 4
Characteristics 4
Participation Interests 4
Variable Rate Municipal Securities 4
When-Issued and Delayed
Delivery Transactions 5
Temporary Investments 5
Municipal Securities 5
Investment Risks 6
Investment Limitations 6
TRUST INFORMATION 6
- ------------------------------------------------------
Management of the Trust 6
Board of Trustees 6
Investment Adviser 6
Advisory Fees 7
Adviser's Background 7
Distribution of Institutional Shares 7
Administration of the Fund 7
Administrative Services 7
Shareholder Services Plan 8
Other Payments to Financial Institutions 8
Custodian 8
Transfer Agent and
Dividend Disbursing Agent 8
Legal Counsel 8
Independent Public Accountants 8
Expenses of the Fund and
Institutional Shares 8
NET ASSET VALUE 9
- ------------------------------------------------------
INVESTING IN INSTITUTIONAL SHARES 9
- ------------------------------------------------------
Share Purchases 9
By Wire 9
By Mail 10
Minimum Investment Required 10
What Shares Cost 10
Exchanging Securities for Fund Shares 10
Subaccounting Services 10
Certificates and Confirmations 11
Dividends 11
Capital Gains 11
REDEEMING INSTITUTIONAL SHARES 11
- ------------------------------------------------------
Telephone Redemption 11
Written Requests 12
Signatures 12
Receiving Payment 12
Accounts With Low Balances 12
SHAREHOLDER INFORMATION 13
- ------------------------------------------------------
Voting Rights 13
Massachusetts Partnership Law 13
TAX INFORMATION 13
- ------------------------------------------------------
Federal Income Tax 13
Pennsylvania Corporate and Personal
Property Taxes 14
Other State and Local Taxes 14
PERFORMANCE INFORMATION 15
- ------------------------------------------------------
OTHER CLASSES OF SHARES 15
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS--
INSTITUTIONAL SERVICE SHARES 16
- ------------------------------------------------------
FINANCIAL STATEMENTS 17
- ------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 34
- ------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 38
- ------------------------------------------------------
ADDRESSES Inside Back Cover
- ------------------------------------------------------
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INSTITUTIONAL SHARES
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)...................................................... None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price)...................................................... None
Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds as applicable)..................................... None
Redemption Fees (as a percentage of amount redeemed, if applicable)........................ None
Exchange Fee............................................................................... None
ANNUAL INSTITUTIONAL SHARES OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver)(1)........................................................... 0.39%
12b-1 Fee.................................................................................. None
Total Other Expenses....................................................................... 0.22%
Shareholder Services Fee(2)................................................... 0.00%
Total Institutional Shares Operating Expenses(3).................................. 0.61%
</TABLE>
(1) The management fee has been reduced to reflect the voluntary waiver of a
portion of the management fee. The adviser can terminate this voluntary waiver
at any time at its sole discretion. The maximum management fee is 0.40%.
(2) The maximum shareholder services fee is 0.25%.
(3) The Total Institutional Shares Operating Expenses would have been 0.62%
absent the voluntary waiver of a portion of the management fee.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF INSTITUTIONAL SHARES WILL BEAR,
EITHER DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE VARIOUS
COSTS AND EXPENSES, SEE " TRUST INFORMATION" AND "INVESTING IN INSTITUTIONAL
SHARES." WIRE-TRANSFERRED REDEMPTIONS OF LESS THAN $5,000 MAY BE SUBJECT TO
ADDITIONAL FEES.
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years 5 years 10 years
------ ------- -------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment
assuming (1) 5% annual return and (2) redemption at the end
of each time period. ........................................ $ 6 $20 $34 $ 76
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The information set forth in the foregoing table and Example relates only to
Institutional Shares of the Fund. The Fund also offers another class of shares
called Institutional Service Shares. Institutional Service Shares and
Institutional Shares are subject to certain of the same expenses; however,
Institutional Service Shares are subject to a 12b-1 fee of up to .25%. See
"Other Classes of Shares."
INTERMEDIATE MUNICIPAL TRUST
INSTITUTIONAL SHARES
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Report of Independent Public Accountants on page 38.
<TABLE>
<CAPTION>
YEAR ENDED MAY 31,
------------------------------------------------------------------------------------------------
1994** 1993 1992 1991 1990 1989 1988 1987 1986*
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $ 10.74 $ 10.31 $ 10.09 $ 9.84 $ 9.81 $ 9.81 $ 9.83 $ 9.97 $ 10.00
- -----------------------------
INCOME FROM INVESTMENT
OPERATIONS
- -----------------------------
Net investment income 0.52 0.56 0.59 0.63 0.64 0.64 0.62 0.58 0.29
- -----------------------------
Net realized and unrealized
gain (loss) on investments (0.22) 0.43 0.22 0.25 0.03 -- (0.02) (0.14) (0.03)
- ----------------------------- ------ ------ ------ ------ ------ ------ ------ ------ ------
Total from investment
operations 0.30 0.99 0.81 0.88 0.67 0.64 0.60 0.44 0.26
- -----------------------------
LESS DISTRIBUTIONS
- -----------------------------
Dividends to shareholders
from net
investment income (0.52) (0.56) (0.59) (0.63) (0.64) (0.64) (0.62) (0.58) (0.29)
- ----------------------------- ------ ------ ------ ------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF
PERIOD $ 10.52 $ 10.74 $ 10.31 $ 10.09 $ 9.84 $ 9.81 $ 9.81 $ 9.83 $ 9.97
- ----------------------------- ------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL RETURN*** 2.79% 9.80% 8.19% 9.22% 7.02% 6.77% 6.34% 4.25% 2.60%
- -----------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------
Expenses 0.61% 0.48% 0.47% 0.49% 0.50% 0.48% 0.49% 0.47% .003%(a)
- -----------------------------
Net investment income 4.82% 5.27% 5.73% 6.32% 6.49% 6.56% 6.25% 5.63% 6.46%(a)
- -----------------------------
Expense
waiver/reimbursement(b) 0.01% 0.14% 0.22% 0.30% 0.38% 0.39% 0.31% 0.27% 0.57%(a)
- -----------------------------
SUPPLEMENTAL DATA
- -----------------------------
Net assets, end of period
(000 omitted) $302,663 $263,283 $173,702 $116,577 $95,738 $82,211 $91,195 $120,162 $3,450
- -----------------------------
Portfolio turnover rate(c) 7% 3% 9% 43% 14% 25% 119% 81% 23%
- -----------------------------
</TABLE>
* Reflects operations for the period from December 26, 1985 (date of initial
public offering) through May 31, 1986. For the period from the start of
business, October 15, 1985 to December 25, 1985, net investment income per
share aggregating $0.108424 ($1,084) was distributed to an affiliate of the
Trust's adviser. Such distribution represented the net income of the Trust
prior to the initial public offering of the Trust shares which commenced
December 26, 1985.
** Based on net asset value which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(a) Computed on an annualized basis.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(c) Represents portfolio turnover for the entire Fund.
(See Notes which are an integral part of the Financial Statements)
Further information about the Fund's performance is contained in the Fund's
annual report for the fiscal year ended May 31, 1994, which can be obtained free
of charge.
GENERAL INFORMATION
- --------------------------------------------------------------------------------
The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated May 31, 1985. The Declaration of Trust permits the Trust to offer
separate series of shares of beneficial interest representing interests in
separate portfolios of securities. The shares in any one portfolio may be
offered in separate classes. As of the date of this prospectus, the Board of
Trustees (the "Trustees") have established two classes of shares of the Fund,
known as Institutional Shares and Institutional Service Shares. This prospectus
relates only to Institutional Shares of the Fund.
Institutional Shares ("Shares") of the Fund are sold primarily to accounts for
which financial institutions act in a fiduciary, advisory, agency, custodial or
similar capacity as a convenient means of accumulating an interest in a
professionally managed, diversified portfolio of municipal securities. Shares
are also designed for funds held by savings and other institutions,
corporations, trusts, brokers, investment counselors and insurance companies. A
minimum initial investment of $25,000 over a 90-day period is required. The Fund
may not be a suitable investment for retirement plans since it invests in
municipal securities.
Shares are currently sold and redeemed at net asset value without a sales charge
imposed by the Fund.
INVESTMENT INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide current income exempt from
federal regular income tax. Interest income of the Fund that is exempt from
federal income tax retains its tax-free status when distributed to the Fund's
shareholders. The Fund pursues this investment objective by investing at least
80% of its net assets in a diversified portfolio of municipal securities with a
dollar-weighted average portfolio maturity of not less than three or more than
ten years. 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. The investment objective and the policy stated above cannot
be changed without approval of shareholders.
INVESTMENT POLICIES
The investment policies described below may be changed by the Trustees without
shareholder approval. Shareholders will be notified before any material change
in these policies becomes effective.
ACCEPTABLE INVESTMENTS. The municipal securities in which the Fund invests are:
- debt obligations, including industrial development bonds, issued by or on
behalf of any state, territory, or possession of the United States,
including the District of Columbia, or any political subdivision of any
of these; and
- participation interests, as described below, in any of the above
obligations,
the interest from which is, in the opinion of bond counsel for the issuers or in
the opinion of officers of the Fund and/or the investment adviser to the Fund,
exempt from federal regular income tax.
The prices of fixed income securities fluctuate inversely to the direction of
interest rates.
AVERAGE MATURITY. The dollar-weighted average portfolio maturity of the Fund's
portfolio of municipal securities will not be less than three years or more than
ten years. For purposes of determining the dollar-weighted average portfolio
maturity of the Fund's portfolio, the maturity of a municipal security will be
its ultimate maturity, unless it is probable that the issuer of the security
will take advantage of maturity-shortening devices such as a call, refunding, or
redemption provision, in which case the maturity date will be the date on which
it is probable that the security will be called, refunded, or redeemed. If the
municipal security includes the right to demand payment, the maturity of the
security for purposes of determining the Fund's dollar-weighted average
portfolio maturity will be the period remaining until the principal amount of
the security can be recovered by exercising the right to demand payment.
CHARACTERISTICS. The municipal securities in which the Fund invests are:
- rated within the three highest ratings for municipal securities by
Moody's Investors Service, Inc. ("Moody's") (Aaa, Aa, or A) or by
Standard & Poor's Corporation ("Standard & Poor's") (AAA, AA, or A);
- guaranteed at the time of purchase by the U.S. government as to the
payment of principal and interest;
- fully collateralized by an escrow of U.S. government securities or other
securities acceptable to the Fund's adviser;
- rated at the time of purchase within Moody's highest short-term municipal
obligation rating (MIG1/VMIG1) or Moody's highest municipal commercial
paper rating (P-1) or Standard & Poor's highest municipal commercial
paper rating (SP-1);
- unrated if, at the time of purchase, other municipal securities of that
issuer are rated A or better by Moody's or Standard & Poor's; or
- unrated if determined to be of equivalent quality to one of the foregoing
rating categories by the Fund's investment adviser.
A description of the ratings categories is contained in the Appendix to the
Combined Statement of Additional Information.
PARTICIPATION INTERESTS. The Fund may purchase participation interests from
financial institutions such as commercial banks, savings and loan
associations and insurance companies. These participation interests give
the Fund an undivided interest in one or more underlying municipal
securities. The financial institutions from which the Fund purchases
participation interests frequently provide or obtain irrevocable letters of
credit or guarantees to attempt to assure that the participation interests
are of high quality. The Trustees of the Fund will evaluate whether
participation interests meet the prescribed quality standards for the Fund.
VARIABLE RATE MUNICIPAL SECURITIES. Some of the municipal securities which
the Fund purchases may have variable interest rates. Variable interest
rates are ordinarily stated as a percentage of a published interest rate,
interest rate index, or some similar standard, such as the 91-day U.S.
Treasury bill rate. Variable interest rates are adjusted on a periodic
basis, e.g., every 30
days. The Fund will consider this adjustment period to be the maturity of
the security for purposes of determining the weighted average maturity of
the portfolio.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase and sell
municipal securities on a when-issued or delayed delivery basis. These
transactions are arrangements in which the Fund purchases or sells securities
with payment and delivery scheduled for a future time. The Fund engages in
when-issued and delayed delivery transactions only for the purpose of acquiring
portfolio securities consistent with the Fund's investment objective and
policies, not for investment leverage. In when-issued and delayed delivery
transactions, the Fund relies on the buyer or seller to complete the
transaction. The seller's failure to complete the transaction may cause the Fund
to miss a price or yield considered to be advantageous.
TEMPORARY INVESTMENTS. From time to time on a temporary basis, or when the
investment adviser determines that market conditions call for a temporary
defensive posture, the Fund may invest in short-term temporary investments which
may or may not be exempt from federal income tax. Temporary investments include:
tax-exempt variable and floating rate demand notes; tax-free commercial paper;
other temporary municipal securities; obligations issued or guaranteed by the
U.S. government, its agencies or instrumentalities; other debt securities;
commercial paper; certificates of deposit of domestic branches of U.S. banks;
and repurchase agreements (arrangements in which the organization selling the
Fund a security agrees at the time of sale to repurchase it at a mutually agreed
upon time and price).
There are no rating requirements applicable to temporary investments with the
exception of temporary municipal securities which are subject to the same rating
requirements as all other municipal securities in which the Fund invests.
However, the investment adviser will limit temporary investments to those it
considers to be of comparable quality to the acceptable investments in the Fund.
Although the Fund is permitted to make taxable, temporary investments, there is
no current intention of generating income subject to federal regular income tax.
MUNICIPAL SECURITIES
Municipal securities are generally issued to finance public works, such as
airports, bridges, highways, housing, hospitals, mass transportation projects,
schools, streets, and water and sewer works. They are also issued to repay
outstanding obligations, to raise funds for general operating expenses, and to
make loans to other public institutions and facilities.
Municipal securities include industrial development bonds issued by or on behalf
of public authorities to provide financing aid to acquire sites or construct and
equip facilities for privately or publicly owned corporations. The availability
of this financing encourages these corporations to locate within the sponsoring
communities and thereby increases local employment.
The two principal classifications of municipal securities are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its full faith and credit and taxing power for the payment of
principal and interest. Interest on and principal of revenue bonds, however, are
payable only from the revenue generated by the facility financed by the bond or
other specified sources of revenue. Revenue bonds do not represent a pledge of
credit or create any debt of or charge against
the general revenues of a municipality or public authority. Industrial
development bonds are typically classified as revenue bonds.
INVESTMENT RISKS
Yields on municipal securities depend on a variety of factors, including: the
general conditions of the municipal note market and of the municipal bond
market; the size of the particular offering; the maturity of the obligations;
and the rating of the issue. The ability of the Fund to achieve its investment
objective also depends on the continuing ability of the issuers of municipal
securities and participation interests, or the guarantors of either, to meet
their obligations for the payment of interest and principal when due.
INVESTMENT LIMITATIONS
The Fund will not:
- borrow money or pledge securities except, under certain circumstances,
the Fund may borrow up to one-third of the value of its total assets and
pledge up to 10% of the value of those assets to secure such borrowings;
- invest more than 5% of its total assets in purchases of industrial
development bonds, the principal and interest of which are paid by a
company which has an operating history of less than three years; or
- with respect to securities comprising 75% of its assets, invest more than
5% of its total assets in securities of one issuer (except cash and cash
items, and U.S. government obligations).
The above investment limitations cannot be changed without shareholder approval.
The following limitation, however, may be changed by the Trustees without
shareholder approval. Shareholders will be notified before any material change
in this limitation becomes effective.
The Fund will not:
- invest more than 15% of its net assets in securities which are illiquid,
including repurchase agreements providing for settlement in more than
seven days after notice, and restricted securities determined by the
Board of Trustees to be illiquid.
TRUST INFORMATION
- --------------------------------------------------------------------------------
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees. The Trustees are
responsible for managing the Trust's business affairs and for exercising all the
Trust's powers except those reserved for the shareholders. The 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 (the "Adviser"), subject to direction
by the Trustees. The Adviser continually conducts investment research and
supervision for the Fund and is responsible for the purchase and 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 .40 of 1% of the Fund's average daily net assets. Under the investment
advisory contract, the Adviser will reimburse the Fund the amount, limited
to the amount of the advisory fee, by which the Fund's aggregate annual
operating expenses, including its investment advisory fee, but excluding
interest, taxes, brokerage commissions, insurance premiums, expenses of
registering and qualifying the Fund and its shares under federal and state
laws and regulations, expenses of withholding taxes, and extraordinary
expenses, exceed .45 of 1% of its average daily net assets. This does not
include reimbursement to the Fund of any expenses incurred by shareholders
who use the transfer agent's subaccounting facilities. Because of this
undertaking, the Adviser receives less than its calculated gross investment
advisory fee. 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.
Jonathan C. Conley has been the Fund's portfolio manager since the Fund's
inception. Mr. Conley joined Federated Investors in 1979 and has been a
Vice President of the Fund's Adviser since 1982. Mr. Conley is a Chartered
Financial Analyst and received his M.B.A. in Finance from the University of
Virginia.
Federated Management and other subsidiaries of Federated Investors serve as
investment advisers to a number of investment companies and private
accounts. Certain other subsidiaries also provide administrative services
to a number of investment companies. Total assets under management or
administration by these and other subsidiaries of Federated Investors are
approximately $70 billion. Federated Investors, which was founded in 1956
as Federated Investors, Inc., develops and manages mutual funds primarily
for the financial industry. Federated Investors' track record of
competitive performance and its disciplined, risk averse investment
philosophy serve approximately 3,500 client institutions nationwide.
Through these same client institutions, individual shareholders also have
access to this same level of investment expertise.
DISTRIBUTION OF INSTITUTIONAL SHARES
Federated Securities Corp. is the principal distributor for Institutional
Shares. 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.
ADMINISTRATION OF THE FUND
ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, provides administrative personnel and services (including
certain legal and financial reporting services) necessary to operate the Fund.
Federated Administrative Services provides these at an annual
rate, which relates to the average aggregate daily net assets of all Funds
advised by subsidiaries of Federated Investors (the "Federated Funds") as
specified below:
<TABLE>
<CAPTION>
MAXIMUM AVERAGE AGGREGATE DAILY NET
ADMINISTRATIVE FEE ASSETS OF THE FEDERATED FUNDS
- ------------------------------ ------------------------------------
<S> <C>
0.15 of 1% on the first $250 million
0.125 of 1% on the next $250 million
0.10 of 1% on the next $250 million
0.075 of 1% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
Federated Administrative Services may choose voluntarily to waive a portion of
its fee.
SHAREHOLDER SERVICES PLAN. The Trust has adopted a Shareholder Services Plan
(the "Services Plan"), under which it may make payments up to 0.25 of 1% of the
average daily net asset value of the Institutional Shares to obtain certain
personal services for shareholders and the maintenance of shareholder accounts
("shareholder services"). The Trust has entered into a Shareholder Services
Agreement with Federated Shareholder Services, a subsidiary of Federated
Investors, under which Federated Shareholder Services will either perform
shareholder services directly or will select financial institutions to perform
shareholder services. Financial institutions will receive fees based upon shares
owned by their clients or customers. The schedules of such fees and the basis
upon which such fees will be paid will be determined, from time to time, by the
Trust and Federated Shareholder Services.
OTHER PAYMENTS TO FINANCIAL INSTITUTIONS. In addition to periodic payments to
financial institutions under the Shareholder Services Plan, certain financial
institutions may be compensated by the Adviser or its affiliates for the
continuing investment of customers' assets in certain funds, including the Fund,
advised by those entities. These payments will be made directly by the
distributor or Adviser from their assets, and will not be made from the assets
of the Fund or by the assessment of a sales charge on shares.
CUSTODIAN. State Street Bank and Trust Company ("State Street Bank"), Boston,
Massachusetts, is custodian for the securities and cash of the Fund.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated Services Company,
Pittsburgh Pennsylvania, with offices in Boston, Massachusetts, is transfer
agent for the Shares of the Fund and dividend disbursing agent for the Fund.
LEGAL COUNSEL. Legal counsel is provided by Houston, Houston & Donnelly,
Pittsburgh, Pennsylvania, and Dickstein, Shapiro & Morin, L.L.P., Washington,
D.C.
INDEPENDENT PUBLIC ACCOUNTANTS. The independent public accountants for the Fund
are Arthur Andersen & Co., Pittsburgh, Pennsylvania.
EXPENSES OF THE FUND AND INSTITUTIONAL SHARES
Holders of Shares pay their allocable portion of Fund and Trust expenses.
The Trust expenses for which holders of 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.
The Fund expenses for which holders of Shares pay their allocable portion
include, but are not limited to: registering the Fund and 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.
At present, no expenses are allocated to the Shares as a class. However, the
Trustees reserve the right to allocate certain other expenses to the holders of
Shares as it deems 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 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 state securities commissions;
expenses related to administrative personnel and services as required to support
holders of Shares; legal fees relating solely to Shares; and Trustees' fees
incurred as a result of issues relating solely to Shares.
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 the Shares in the value of all
securities and other assets of the Fund, subtracting the interest of the Shares
in the liabilities of the Fund and those attributable to Shares, and dividing
the remainder by the number of Shares outstanding. The net asset value for
Shares may differ from that of Institutional Service Shares 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.
INVESTING IN INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
SHARE PURCHASES
Shares are sold on days on which the New York Stock Exchange and the Federal
Reserve Wire System are open for business. Shares may be purchased either by
wire or mail.
To purchase Shares, open an account by calling Federated Securities Corp. and
obtain a master account number. Information needed to establish the account will
be taken over the telephone. The Fund reserves the right to reject any purchase
request.
BY WIRE. To purchase Shares by Federal Reserve wire, call the Fund before 4:00
p.m. (Eastern time) to place an order. The order is considered received
immediately. Payment by federal funds must be received before 3:00 p.m. (Eastern
time) on the next business day following the order. Federal funds should be
wired as follows: State Street Bank and Trust Company, Boston, Massachusetts;
Attention: EDGEWIRE; For Credit to: Intermediate Municipal Trust - Institutional
Shares; Fund Number (this
number can be found on the account statement or by contacting the Fund); Group
Number or Wire Order Number; Nominee or Institution Name; and ABA 011000028.
Shares cannot be purchased on days on which the New York Stock Exchange is
closed and federal holidays restricting wire transfers.
BY MAIL. To purchase Shares by mail, send a check made payable to Intermediate
Municipal Trust - Institutional Shares to the Fund's transfer agent, Federated
Services Company, c/o State Street Bank and Trust Company, P.O. Box 8602,
Boston, Massachusetts 02266-8602. Orders by mail are considered received after
payment by check is converted by the transfer agent's bank, State Street Bank,
into federal funds. This is normally the next business day after State Street
Bank receives the check.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment in Shares is $25,000, plus any non-affiliated
bank or broker's fee, if applicable. However, an account may be opened with a
smaller amount as long as the $25,000 minimum is reached within 90 days. The
minimum investment for an institutional investor will be calculated by combining
all accounts it maintains with the Fund. Accounts established through a non-
affiliated bank or broker may be subject to a smaller minimum investment.
WHAT SHARES COST
Shares are sold at their net asset value next determined after an order is
received. There is no sales charge imposed by the Fund. Investors who purchase
Shares through a nonaffiliated bank or broker may be charged an additional
service fee by that bank or broker.
The net asset value is determined at 4:00 p.m. (Eastern time), 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.
EXCHANGING SECURITIES FOR FUND SHARES
Investors may exchange certain municipal securities or a combination of
securities and cash for Shares. The securities and any cash must have a market
value of at least $25,000. The Fund reserves the right to determine the
acceptability of securities to be exchanged. Securities accepted by the Fund are
valued in the same manner as the Fund values its assets. Shareholders wishing to
exchange securities should first contact Federated Securities Corp.
SUBACCOUNTING SERVICES
Institutions are encouraged to open single master accounts. However, certain
institutions may wish to use the transfer agent's subaccounting system to
minimize their internal recordkeeping requirements. The transfer agent charges a
fee based on the level of subaccounting services rendered. Institutions holding
Shares in a fiduciary, agency, custodial, or similar capacity may charge or pass
through subaccounting fees to beneficial owners as part of or in addition to
normal trust or agency account fees. They may also charge fees for other
services provided which may be related to the ownership of Shares. This
prospectus should, therefore, be read together with any agreement between the
customer
and the institution with regard to the services provided, the fees charged for
those services, and any restrictions and limitations imposed.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Fund, Federated Services Company maintains a share
account for each shareholder of record. Share certificates are not issued unless
requested by contacting the Fund.
Detailed confirmations of each purchase or redemption are sent to each
shareholder. Monthly confirmations are sent to report dividends paid during the
month.
DIVIDENDS
Dividends are declared daily and paid monthly. Dividends are declared just prior
to determining net asset value. If an order for shares is placed on the
preceding business day, Shares purchased by wire begin earning dividends on the
business day wire payment is received by State Street Bank. If the order for
Shares and payment by wire are received on the same day, Shares begin earning
dividends on the next business day. Shares purchased by check begin earning
dividends on the business day after the check is converted, upon instruction of
the transfer agent, into federal funds. Dividends are automatically reinvested
on payment dates in additional Shares unless cash payments are requested by
contacting the Fund.
CAPITAL GAINS
Distributions of net realized long-term capital gains realized by the Fund, if
any, will be made at least once every twelve months.
REDEEMING INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
The Fund redeems Shares at their net asset value next determined after the Fund
receives the redemption request. Redemptions will be made on days on which the
Fund computes its net asset value. Redemption requests must be received in
proper form and can be made by telephone request or by written request.
TELEPHONE REDEMPTION
Shareholders may redeem their Shares by telephoning the Fund before 4:00 p.m.
(Eastern time). The proceeds will normally be wired the following business day,
but in no event more than seven days, to the shareholder's account at a domestic
commercial bank that is a member of the Federal Reserve System. If at any time,
the Fund shall determine it necessary to terminate or modify this method of
redemption, shareholders would be promptly notified.
An authorization form permitting the Fund to accept telephone requests must
first be completed. Authorization forms and information on this service are
available from Federated Securities Corp. Telephone redemption instructions may
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 such a case should occur, another
method of redemption, such as "Written Requests," should be considered.
WRITTEN REQUESTS
Shares may also be redeemed by sending a written request to the Fund. Call the
Fund for specific instructions before redeeming by letter. The shareholder will
be asked to provide in the request his name, the Fund and class of shares' name,
his account number, and the share or dollar amount requested. If share
certificates have been issued, they must be properly endorsed and should be sent
by registered or certified mail with the written request.
SIGNATURES. Shareholders requesting a redemption of $50,000 or more, 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 signatures on written redemption requests guaranteed by:
- a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund , which is administered by the Federal Deposit Insurance
Corporation ("FDIC");
- a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchange;
- a savings bank or savings and loan association whose deposits are insured
by Savings Association Insurance Fund, which is administered by the FDIC;
or
- any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.
The 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.
RECEIVING PAYMENT. Normally, a check for the proceeds is mailed within one
business day, but in no event more than 7 days, after receipt of a proper
written redemption request.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Fund may
redeem shares in any account and pay the proceeds to the shareholder of record
if the account balance falls below a required minimum value of $25,000 due to
Shareholder redemptions. This requirement does not apply, however, if the
balance falls below $25,000 because of changes in the Fund's net asset value.
Before Shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional Shares to meet the minimum
requirement.
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS
Each share of the Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of all classes of
each portfolio 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 the Trust shall be called by the Trustees upon the written
request of shareholders owning at least 10% of the outstanding shares of the
Trust entitled to vote.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect
shareholders of the Fund, 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 that the Trust or its
Trustees enter into or sign on behalf of the Fund.
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 on behalf
of the Fund. Therefore, financial loss resulting from liability as a shareholder
of the Fund will occur only if the Trust itself cannot meet its obligations to
indemnify shareholders and pay judgments against them from the assets of the
Fund.
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects to meet requirements
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. 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.
Shareholders are not required to pay the federal regular income tax on any
dividends received from the Fund that represent net interest on tax-exempt
municipal bonds. However dividends representing net interest earned on some
municipal bonds are included in calculating the federal individual alternative
minimum tax or the federal alternative minimum tax for corporations.
The alternative minimum tax, up to 28% of alternative minimum taxable income for
individuals and 20% for corporations, applies when it exceeds the regular tax
for the taxable year. Alternative minimum taxable income is equal to the regular
taxable income of the taxpayer increased by certain "tax preference" items not
included in regular taxable income and reduced by only a portion of the
deductions allowed in the calculation of the regular tax.
Interest on certain "private activity" bonds issued after August 7, 1986, is
treated as a tax preference item for both individuals and corporations. Unlike
traditional governmental purpose municipal bonds, which finance roads, schools,
libraries, prisons and other public facilities, private activity bonds provide
benefits to private parties. The Fund may purchase all types of municipal bonds,
including private activity bonds. Thus, while the Fund has no present intention
of purchasing any private activity bonds, should it purchase any such bonds, a
portion of the Fund's dividends may be treated as a tax preference item.
In addition, in the case of a corporate shareholder, dividends of the Fund which
represent interest on municipal bonds may be subject to the 20% corporate
alternative minimum tax because the dividends are included in a corporation's
"adjusted current earnings." The corporate alternative minimum tax treats 75% of
the excess of a taxpayer's pre-tax "adjusted current earnings" over the
taxpayer's alternative minimum taxable income as a tax preference item.
"Adjusted current earnings" is based upon the concept of a corporation's
"earnings and profits." Since "earnings and profits" generally includes the full
amount of any Fund dividend, and alternative minimum taxable income does not
include the portion of the Fund's dividend attributable to municipal bonds which
are not private activity bonds, the difference will be included in the
calculation of the corporation's alternative minimum tax.
Dividends of the Fund representing net interest income earned on some temporary
investments and any realized net short-term gains are taxed as ordinary income.
These tax consequences apply whether dividends are received in cash or as
additional shares. Information on the tax status of dividends and distributions
is provided annually.
PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES
In the opinion of Houston, Houston & Donnelly, counsel to the Fund:
- the Fund is not subject to Pennsylvania corporate or personal property
taxes; and
- Fund 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 Fund would be subject to such
taxes if owned directly by residents of those jurisdictions.
OTHER STATE AND LOCAL TAXES
Distributions representing net interest received on tax-exempt municipal
securities are not necessarily free from income taxes of any state or local
taxing authority. State laws differ on this issue and shareholders are urged to
consult their own tax advisers.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time the Fund advertises its total return, yield and tax-equivalent
yield.
Total return represents the change, over a specified period of time, in the
value of an investment in shares of the Fund 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 Shares of the Fund is calculated by dividing the net investment
income per share (as defined by the Securities and Exchange Commission) earned
by Shares over a thirty-day period by the offering price per share of Shares on
the last day of the period. This number is then annualized using semi-annual
compounding. The tax-equivalent yield of Shares is calculated similarly to the
yield, but is adjusted to reflect the taxable yield that Shares would have had
to earn to equal its actual yield, assuming a specific tax rate. The yield and
the tax-equivalent yield do not necessarily reflect income actually earned by
Shares and, therefore, may not correlate to the dividends or other distributions
paid to shareholders.
Total return, yield and tax-equivalent yield will be calculated separately for
Institutional Shares and Institutional Service Shares. Because Institutional
Service Shares are subject to a 12b-1 fee, the total return, yield and
tax-equivalent yield for Institutional Shares, for the same period, will exceed
that of Institutional Service Shares.
Institutional Shares are sold without any sales load or other similar
non-recurring charges.
From time to time, the Fund may advertise the performance of shares using
certain financial publications and/or compare its performance to certain
indices.
OTHER CLASSES OF SHARES
- --------------------------------------------------------------------------------
Institutional Service Shares are sold primarily to retail and private banking
customers of financial institutions. Institutional Service Shares are sold at
net asset value and are subject to a minimum initial investment of $25,000.
Institutional Service Shares are distributed pursuant to 12b-1 Plan adopted by
the Trust whereby the distributor is paid a fee of up to 0.25 of 1% of the
Institutional Service Shares' average daily net assets.
Financial institutions and brokers providing sales and/or administrative
services may receive different compensation depending upon which class of shares
of the Fund is sold.
The amount of dividends payable to Institutional Shares will generally exceed
that of Institutional Service Shares by the difference between Class Expenses
and distribution and shareholder services expenses borne by shares of each
respective class.
The stated advisory fee is the same for both classes of shares.
INTERMEDIATE MUNICIPAL TRUST
INSTITUTIONAL SERVICE SHARES
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Reference is made to the Report of Independent Public Accountants on page 38.
<TABLE>
<CAPTION>
YEAR ENDED
MAY 31,
1994*
-----------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.00
- ---------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------------------
Net investment income 0.36
- ---------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.48)
- --------------------------------------------------------------------------------- --------
Total from investment operations (0.12)
- ---------------------------------------------------------------------------------
LESS DISTRIBUTIONS
- ---------------------------------------------------------------------------------
Dividends to shareholders from net investment income (0.36)
- --------------------------------------------------------------------------------- --------
NET ASSET VALUE, END OF PERIOD $ 10.52
- --------------------------------------------------------------------------------- --------
TOTAL RETURN** (1.10%)
- ---------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ---------------------------------------------------------------------------------
Expenses 0.89%(a)
- ---------------------------------------------------------------------------------
Net investment income 4.66%(a)
- ---------------------------------------------------------------------------------
Expense waiver/reimbursement (b) 0.14%(a)
- ---------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $1,715
- ---------------------------------------------------------------------------------
Portfolio turnover rate (c) 7%
- ---------------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from September 6, 1993 (date of initial
public offering) to
May 31, 1994.
** Based on net asset value which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(a) Computed on an annualized basis.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(c) Represents portfolio turnover for the entire Fund.
(See Notes which are an integral part of the Financial Statements)
Further information about the Fund's performance is contained in the Fund's
annual report for the fiscal year ended May 31, 1994, which can be obtained free
of charge.
INTERMEDIATE MUNICIPAL TRUST
PORTFOLIO OF INVESTMENTS
MAY 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ---------- ------------------------------------------------------ -------- ------------
<C> <S> <C> <C>
INTERMEDIATE-TERM MUNICIPAL SECURITIES--98.2%
- ---------------------------------------------------------------------
ALABAMA--2.1%
------------------------------------------------------
$2,500,000 Alabama Public School & College Authority, 4.625%
Refunding Bonds (Series 1993)/(Original Issue Yield:
4.77%), 12/1/2002 Aa $ 2,380,775
------------------------------------------------------
1,500,000 Alabama Water Pollution Control Authority, 6.35% State
Revolving Fund Loan Bonds (Series 1991)/ (AMBAC
Insured), 8/15/2001 AAA 1,602,420
------------------------------------------------------
2,250,000 Birmingham, AL, Medical Center, 10.00% Hospital
Revenue Bonds (Prerefunded), 7/1/95 (@102) AAA 2,437,223
------------------------------------------------------ ------------
Total 6,420,418
------------------------------------------------------ ------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
ARIZONA--8.5%
------------------------------------------------------
1,000,000 Arizona State Department of Transportation, 5.50%
Revenue Bonds (Series 1992B)/(Original Issue Yield:
5.60%)/(AMBAC Insured), 7/1/2002 Aaa 1,022,190
------------------------------------------------------
1,500,000 Maricopa County, AZ, 8.20% Revenue Bonds
(MBIA Insured), 12/1/96 Aaa 1,616,130
------------------------------------------------------
1,000,000 Mesa, AZ, 7.125% GO Bonds, 7/1/99 A1 1,072,720
------------------------------------------------------
5,000,000 Phoenix, AZ, 4.90% GO Bonds (Series 1993A)/(Original
Issue Yield: 4.95%), 7/1/2002 AA+ 4,921,200
------------------------------------------------------
1,500,000 Phoenix, AZ, 7.40% GO Bonds (Series A), 7/1/2000 AA+ 1,689,240
------------------------------------------------------
2,900,000 Pima County, AZ, Tucson Unified School District #1,
4.80% School Improvement Bonds (Series
1993E)/(Original Issue Yield: 4.90%)/(FGIC Insured),
7/1/2003 AAA 2,781,245
------------------------------------------------------
3,000,000 Salt River Project, AZ, 4.75% Electric System Revenue
Bonds (Original Issue Yield: 4.85%), 1/1/2003 AA 2,849,520
------------------------------------------------------
2,500,000 Salt River Project, AZ, 5.20% Power Supply Revenue
Bonds (Original Issue Yield: 5.25%), 1/1/2002 AA 2,490,600
------------------------------------------------------
</TABLE>
INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ---------- ------------------------------------------------------ -------- ------------
<C> <S> <C> <C>
INTERMEDIATE-TERM MUNICIPAL SECURITIES--CONTINUED
- ---------------------------------------------------------------------
ARIZONA--CONTINUED
------------------------------------------------------
$2,000,000 Salt River Project, AZ, 5.30% Power Supply Revenue
Bonds (Original Issue Yield: 5.35%), 1/1/2003 AA $ 1,993,080
------------------------------------------------------
5,000,000 Salt River Project, AZ, 7.10% Electric System Revenue
Bonds, 1/1/2000 AA 5,415,450
------------------------------------------------------ ------------
Total 25,851,375
------------------------------------------------------ ------------
ARKANSAS--2.2%
------------------------------------------------------
4,000,000 North Little Rock, AR, 9.50% Hydro-Electric Revenue
Bonds (Prerefunded), 7/1/95 (@103) Aaa 4,350,640
------------------------------------------------------
2,300,000 Pulaski County, AR, Health Facility Board, 5.60%
Revenue Bonds (St. Vincent Infirmary, Sisters of
Charity of Nazareth Health)/(Original Issue Yield:
5.70%)/ (MBIA Insured), 11/1/2002 Aaa 2,354,073
------------------------------------------------------ ------------
Total 6,704,713
------------------------------------------------------ ------------
CALIFORNIA--4.0%
------------------------------------------------------
2,250,000 California State Veterans Affairs, 7.80% GO Bonds
(Series AV), 10/1/2000 A 2,563,290
------------------------------------------------------
2,000,000 Los Angeles, CA, Department of Water & Power, 9.00%
Electric Plant Revenue Bonds, 2/1/2001 AA 2,404,580
------------------------------------------------------
1,800,000 Los Angeles, CA, Department of Water & Power, 9.00%
Electric Plant Revenue Bonds, 6/1/2000 AA 2,144,610
------------------------------------------------------
1,875,000 Los Angeles, CA, Department of Water & Power, 9.00%
Electric Plant Revenue Bonds, 6/1/2001 AA 2,270,231
------------------------------------------------------
2,500,000 Northern California Power Agency, 9.50% Revenue Bonds
(Prerefunded), 7/1/95 (@102) Aaa 2,696,575
------------------------------------------------------ ------------
Total 12,079,286
------------------------------------------------------ ------------
DELAWARE--0.3%
------------------------------------------------------
1,000,000 Delaware State, 5.20% GO Bonds (Series 1992B),
7/1/2002 Aa 1,008,480
------------------------------------------------------ ------------
</TABLE>
INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ---------- ------------------------------------------------------ -------- ------------
<C> <S> <C> <C>
INTERMEDIATE-TERM MUNICIPAL SECURITIES--CONTINUED
- ---------------------------------------------------------------------
FLORIDA--5.9%
------------------------------------------------------
$3,000,000 Dade County, FL, 10.00% Solid Waste Revenue Bonds
(Prerefunded), 10/1/95 (@102) Aaa $ 3,290,100
------------------------------------------------------
3,000,000 Florida State Board of Education, 6.00% UT GO Capital
Outlay Bonds (Series 1991B), 6/1/2001 AA 3,178,980
------------------------------------------------------
2,000,000 Florida State Board of Education, 6.25% Public
Education Capital Outlay Bonds (Series 1991C),
6/1/2001 AA 2,147,340
------------------------------------------------------
5,500,000 Jacksonville, FL, Electric Authority, 6.70% Electric
Revenue Bonds (St. John's River Park Power Project),
10/1/99 AA 5,768,785
------------------------------------------------------
1,000,000 Miami Beach, FL, HFDA, 5.60% Revenue Bonds (Mount
Sinai Medical Center)/(Original Issue Yield: 5.65%)/
(Capital Guaranty), 11/15/2002 Aaa 1,037,440
------------------------------------------------------
1,500,000 Orlando, FL, Utilities Commission, 5.40% Revenue Bonds
(Series 1992)/(Original Issue Yield: 5.50%), 10/1/2002 Aa1 1,525,035
------------------------------------------------------
1,050,000 Plantation, FL, Water & Sewer Authority, 8.70% Revenue
Bonds (MBIA Insured)/(ETM), 3/1/96 Aaa 1,130,462
------------------------------------------------------ ------------
Total 18,078,142
------------------------------------------------------ ------------
GEORGIA--4.3%
------------------------------------------------------
2,000,000 Georgia Municipal Electric Authority, 6.50% Power
Supply Revenue Bonds (Series U), 1/1/2000 AA 2,131,440
------------------------------------------------------
1,000,000 Georgia Municipal Electric Authority, 6.60% Power
Supply Revenue Bonds (Series U), 1/1/2001 AA 1,075,420
------------------------------------------------------
4,095,000 Georgia Private Colleges & Universities Authority,
5.60% Revenue Bonds (Series 1992C)/(Emory University
Project), 10/1/2001 AA 4,228,743
------------------------------------------------------
5,000,000 Georgia State, 7.70% GO Bonds, 2/1/2001 AA+ 5,769,100
------------------------------------------------------ ------------
Total 13,204,703
------------------------------------------------------ ------------
</TABLE>
INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ---------- ------------------------------------------------------ -------- ------------
<C> <S> <C> <C>
INTERMEDIATE-TERM MUNICIPAL SECURITIES--CONTINUED
- ---------------------------------------------------------------------
HAWAII--4.7%
------------------------------------------------------
$3,000,000 City & County of Honolulu, HI, 6.30% GO Bonds
(Series 1991A), 8/1/2001 AA $ 3,206,160
------------------------------------------------------
2,000,000 Hawaii State, 5.00% GO Bonds (Series CC), 2/1/2003 AA 1,970,860
------------------------------------------------------
1,000,000 Hawaii State, 5.85% GO Bonds (Series 1991BU)/
(Original Issue Yield: 5.95%), 11/1/2001 AA 1,049,560
------------------------------------------------------
2,000,000 Hawaii State, 6.25% GO Bonds (Series 1992BZ),
10/1/2002 AA 2,148,760
------------------------------------------------------
5,000,000 Hawaii State, 8.00% GO Bonds (Series 1991BT), 2/1/2001 AA 5,828,700
------------------------------------------------------ ------------
Total 14,204,040
------------------------------------------------------ ------------
ILLINOIS--6.4%
------------------------------------------------------
1,930,000 Chicago, IL, 5.00% GO Bonds (Series 1993A)/(Original
Issue Yield: 5.05%)/(MBIA Insured), 1/1/2003 AAA 1,878,720
------------------------------------------------------
2,000,000 Chicago, IL, School Finance Authority, 8.00% Revenue
Bonds (FGIC Insured), 6/1/97 Aaa 2,118,140
------------------------------------------------------
3,000,000 Du Page, IL, Water Commission, 6.05% GO Water
Refunding Bonds (Du Page, Cook & Will Counties)/
(Series 1992), 3/1/2002 Aaa 3,166,530
------------------------------------------------------
3,000,000 Illinois Municipal Electric Agency, Power Supply
System, 6.20% Revenue Bonds (Series 1991A)/(AMBAC
Insured), 2/1/2001 AAA 3,173,850
------------------------------------------------------
1,840,000 Illinois State Highway Authority, 9.125% Revenue Bonds
(Northern Illinois Toll Highway)/(Prerefunded), 1/1/96
(@102) AAA 2,014,432
------------------------------------------------------
4,000,000 Illinois State Sales Tax Revenue Bonds, 4.75%
(Original Issue Yield: 5.05%), 6/15/2002 AAA 3,834,640
------------------------------------------------------
</TABLE>
INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ---------- ------------------------------------------------------ -------- ------------
<C> <S> <C> <C>
INTERMEDIATE-TERM MUNICIPAL SECURITIES--CONTINUED
- ---------------------------------------------------------------------
ILLINOIS--CONTINUED
------------------------------------------------------
$1,300,000 Illinois State Toll Highway Authority, 4.75% Priority
Revenue Bonds (Series A)/(Original Issue Yield:
5.00%), 1/1/2003 A $ 1,224,600
------------------------------------------------------
2,000,000 University of Illinois Board of Trustees, 6.40%
Auxiliary Facilities System, Revenue Bonds, (Series
1991), 4/1/2001 AA 2,148,240
------------------------------------------------------ ------------
Total 19,559,152
------------------------------------------------------ ------------
MARYLAND--0.3%
------------------------------------------------------
1,000,000 University of Maryland, 5.80% Tuition Revenue Bonds
(Series A)/(System Auxiliary Facility), 2/1/2002 Aa 1,045,810
------------------------------------------------------ ------------
MICHIGAN--4.5%
------------------------------------------------------
4,500,000 Detroit, MI, School District, 4.85% UT GO Bonds
(Q-SBLF Program)/(Original Issue Yield: 4.95%),
5/1/2004 AA- 4,216,275
------------------------------------------------------
1,250,000 Jackson County, MI, Hospital Finance Authority, 4.80%
Revenue Bonds (Series A)/(Original Issue Yield:
4.90%)/ (FGIC Insured), 6/1/2005 AAA 1,159,950
------------------------------------------------------
5,750,000 Michigan Municipal Bond Authority, Zero Coupon Capital
Appreciation Revenue Bonds (Series 1991A)/(Local
Government Loan Program)/(Original Issue Yield:
6.35%)/ (FGIC Insured), 12/1/2000 AAA 4,071,920
------------------------------------------------------
2,000,000 Michigan State Building Authority, 6.25% Revenue Bonds
(Series II)/(AMBAC Insured), 10/1/2000 AAA 2,137,460
------------------------------------------------------
1,000,000 Michigan State Hospital Finance Authority, 5.50%
Revenue Bonds (Series 1992A)/(Henry Ford Health
System)/ (Original Issue Yield: 5.55%), 9/1/2001 Aa 1,016,630
------------------------------------------------------
1,000,000 Royal Oak, MI, Hospital Finance Authority, 7.40%
Hospital Revenue Bonds (William Beaumont Hospital),
1/1/2000 Aa 1,081,510
------------------------------------------------------ ------------
Total 13,683,745
------------------------------------------------------ ------------
</TABLE>
INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ---------- ------------------------------------------------------ -------- ------------
<C> <S> <C> <C>
INTERMEDIATE-TERM MUNICIPAL SECURITIES--CONTINUED
- ---------------------------------------------------------------------
NEBRASKA--1.1%
------------------------------------------------------
$2,500,000 Omaha, NE, Public Power District Electric System,
5.00% Revenue Bonds (Series 1993), 2/1/2003 AA $ 2,451,625
------------------------------------------------------
1,000,000 Omaha, NE, Public Power District Nebraska Electric,
4.70% Revenue Bonds (Series D), 2/1/2003 AA 949,990
------------------------------------------------------ ------------
Total 3,401,615
------------------------------------------------------ ------------
NEVADA--0.4%
------------------------------------------------------
1,000,000 Clark County, NV, 9.75% LT GO School Improvement Bonds
(MBIA Insured), 6/1/2000 AAA 1,240,690
------------------------------------------------------ ------------
NEW HAMPSHIRE--0.9%
------------------------------------------------------
2,555,000 New Hampshire State, 6.40% GO Bonds
(Series 1991A), 6/15/2001 AA 2,768,138
------------------------------------------------------ ------------
NEW YORK--3.5%
------------------------------------------------------
1,500,000 Municipal Assistance Corp. of New York, 6.60% Revenue
Bonds (Series 62), 7/1/2000 AA- 1,607,280
------------------------------------------------------
2,000,000 Municipal Assistance Corp. of New York, 7.00%
Resolution Revenue Bonds, 7/1/97 AA- 2,143,540
------------------------------------------------------
2,000,000 New York City, NY, Water & Sewer Finance Authority,
5.00% Revenue Bonds (Series B)/(Original Issue Yield:
5.10%), 6/15/2003 A- 1,934,980
------------------------------------------------------
2,550,000 New York State Power Authority, 5.90% Revenue and
General Purpose Bonds, 1/1/2002 Aa 2,675,205
------------------------------------------------------
1,000,000 New York State Urban Development Corp., 9.20% Revenue
Bonds (Prerefunded), 1/1/96 (@102) Aaa 1,097,570
------------------------------------------------------
1,000,000 Triborough Bridge & Tunnel Authority, NY, 6.625%
General Purpose Revenue Bonds (Series S), 1/1/2001 A+ 1,084,900
------------------------------------------------------ ------------
Total 10,543,475
------------------------------------------------------ ------------
</TABLE>
INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ---------- ------------------------------------------------------ -------- ------------
<C> <S> <C> <C>
INTERMEDIATE-TERM MUNICIPAL SECURITIES--CONTINUED
- ---------------------------------------------------------------------
NORTH CAROLINA--6.5%
------------------------------------------------------
$3,355,000 Charlotte-Mecklenburg Hospital Authority, NC, 5.90%
Health Care System Revenue Bonds (Original Issue
Yield: 5.95%), 1/1/2002 Aa $ 3,422,536
------------------------------------------------------
4,225,000 North Carolina Eastern Municipal Power, 5.125% Revenue
Bonds (Series C)/(Original Issue Yield: 5.25%),
1/1/2003 A- 4,086,673
------------------------------------------------------
2,000,000 North Carolina Eastern Municipal Power, 5.25% Revenue
Bonds (Series C)/(Original Issue Yield: 5.40%),
1/1/2004 A- 1,931,280
------------------------------------------------------
5,000,000 North Carolina Municipal Power Agency, 5.90% Revenue
Bonds (Catawba Electric)/(Original Issue Yield:
5.95%), 1/1/2003 A 5,090,600
------------------------------------------------------
5,020,000 North Carolina Municipal Power Agency, 6.00% Revenue
Bonds (Catawba Electric)/(Original Issue Yield:
6.05%), 1/1/2004 A 5,216,081
------------------------------------------------------ ------------
Total 19,747,170
------------------------------------------------------ ------------
OHIO--3.4%
------------------------------------------------------
1,450,000 Columbus, OH, 5.00% GO Various Purpose UT Bonds
(Series 1993I), 9/15/2002 Aa1 1,443,083
------------------------------------------------------
1,330,000 Franklin County, OH, 5.30% Hospital Facility Revenue
Bonds (Series 1993A)/(Riverside United Methodist
Hospital)/(Original Issue Yield: 5.40%), 5/15/2002 NR 1,291,350
------------------------------------------------------
2,500,000 Hamilton County, OH, Sewer System, 6.20%
Improvement & Refunding Revenue Bonds
(Series 1991A)/(Metropolitan Sewer District of
Greater Cincinnati), 12/1/2000 AA- 2,666,150
------------------------------------------------------
</TABLE>
INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ---------- ------------------------------------------------------ -------- ------------
<C> <S> <C> <C>
INTERMEDIATE-TERM MUNICIPAL SECURITIES--CONTINUED
- ---------------------------------------------------------------------
OHIO--CONTINUED
------------------------------------------------------
$1,400,000 Montgomery County, OH, 6.20% Revenue Bonds
(Series 1991A)/(Sisters of Charity Healthcare
Systems, Inc.)/(MBIA Insured), 5/15/2001 AAA $ 1,493,394
------------------------------------------------------
3,000,000 Ohio State Building Authority, 9.625% Revenue Bonds
(Prerefunded), 10/1/95 (@103) Aaa 3,304,530
------------------------------------------------------ ------------
Total 10,198,507
------------------------------------------------------ ------------
OKLAHOMA--0.7%
------------------------------------------------------
2,000,000 Tulsa, OK, 5.15% GO Refunding Bonds, 6/1/2003 AA 1,984,380
------------------------------------------------------ ------------
PENNSYLVANIA--4.8%
------------------------------------------------------
1,000,000 Allegheny County, PA, HDA, 5.50% Revenue Bonds
(Presbyterian University Health System)/(Original
Issue Yield: 5.60%)/(MBIA Insured), 11/1/2002 Aaa 1,016,100
------------------------------------------------------
1,500,000 Allegheny County, PA, HDA, 6.875% Revenue Bonds (Mercy
Hospital of Pittsburgh)/(BIGI Insured), 10/1/99 Aaa 1,595,340
------------------------------------------------------
1,500,000 Pennsylvania Infrastructure Investment Authority,
6.15% Revenue Bonds (Series 1990B)/(Pennvest Loan Pool
Program), 9/1/2001 AA 1,590,030
------------------------------------------------------
8,000,000 Philadelphia, PA, 5.00% Water and Wastewater
Revenue Bonds (Original Issue Yield: 5.25%)/
(CGIC Insured), 6/15/2002 AAA 7,890,560
------------------------------------------------------
1,475,000 Washington County, PA, Hospital Authority, 5.50%
Revenue Bonds (Shadyside Hospital)/(Original Issue
Yield: 5.60%)/(AMBAC Insured), 12/15/2001 Aaa 1,516,153
------------------------------------------------------
1,155,000 Westmoreland County, PA, 4.70% GO Refunding Bonds
(Series D)/(MBIA Insured), 8/1/2002 AAA 1,127,384
------------------------------------------------------ ------------
Total 14,735,567
------------------------------------------------------ ------------
</TABLE>
INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ---------- ------------------------------------------------------ -------- ------------
<C> <S> <C> <C>
INTERMEDIATE-TERM MUNICIPAL SECURITIES--CONTINUED
- ---------------------------------------------------------------------
SOUTH CAROLINA--3.3%
------------------------------------------------------
$1,290,000 Charleston, SC, Waterworks & Sewer System, 9.625%
Revenue Bonds, (Prerefunded), 1/1/96 (@102) AAA $ 1,422,083
------------------------------------------------------
730,000 Columbia, SC, Waterworks & Sewer System, 6.40%
Revenue Bonds, 2/1/2001 AA 782,998
------------------------------------------------------
4,270,000 Columbia, SC, Waterworks & Sewer System, 6.40%
Revenue Bonds, 2/2/2001 AA 4,587,474
------------------------------------------------------
3,000,000 South Carolina Public Service Authority, 9.50%
Electric Revenue Bonds (Prerefunded), 7/1/95 (@103) Aaa 3,262,980
------------------------------------------------------ ------------
Total 10,055,535
------------------------------------------------------ ------------
TENNESSEE--2.7%
------------------------------------------------------
2,000,000 Knox County, TN, 4.80% UT GO Bonds (Original Issue
Yield: 4.85%), 3/1/2003 AA 1,920,380
------------------------------------------------------
2,000,000 Memphis, TN, 4.90% Water Division Revenue Refunding
Bonds (Series 1993), 1/1/2003 AA 1,943,960
------------------------------------------------------
3,000,000 Memphis, TN, 5.625% Electric System Revenue Bonds,
1/1/2002 Aa 3,107,400
------------------------------------------------------
1,065,000 Metropolitan Government of Nashville & Davidson
County, TN, 5.85% Health & Educational Facilities
Board Revenue Bonds (Series 1991B)/(The Vanderbilt
University)/(Original Issue Yield: 5.95%), 10/1/2001 AA 1,116,589
------------------------------------------------------ ------------
Total 8,088,329
------------------------------------------------------ ------------
TEXAS--16.4%
------------------------------------------------------
1,000,000 Canyon, TX, ISD, 8.20% GO Bonds (MBIA Insured),
2/15/96 Aaa 1,066,600
------------------------------------------------------
5,000,000 Central Texas Higher Education Authority, 4.85%
(Series C), 12/1/2002 Aa 4,778,400
------------------------------------------------------
2,000,000 Dallas County, TX, 8.75% UT GO Bonds, 1/10/96 Aaa 2,146,080
------------------------------------------------------
</TABLE>
INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ---------- ------------------------------------------------------ -------- ------------
<C> <S> <C> <C>
INTERMEDIATE-TERM MUNICIPAL SECURITIES--CONTINUED
- ---------------------------------------------------------------------
TEXAS--CONTINUED
------------------------------------------------------
$1,755,000 Dallas, Denton & Collins Townships, TX, Waterworks &
Sewer System, 6.60% Revenue Bonds, 4/1/2000 Aa $ 1,872,655
------------------------------------------------------
1,000,000 Dallas, Denton & Collins Townships, TX, Waterworks &
Sewer System, 9.50% Revenue Bonds, 10/1/98 Aa 1,119,430
------------------------------------------------------
4,000,000 Garland, TX, 5.80% UT GO Bonds (Dallas County)/
(Original Issue Yield: 5.90%), 8/15/2001 Aa 4,149,640
------------------------------------------------------
3,000,000 Houston, TX, ISD, 5.40% LT Schoolhouse Refunding Bonds
(Permanent School Fund Guaranty), 8/15/2001 Aaa 3,062,520
------------------------------------------------------
4,500,000 Houston, TX, ISD, 8.375% LT Schoolhouse Bonds
(Series 1991), 8/15/2000 AAA 5,274,990
------------------------------------------------------
2,500,000 San Antonio, TX, 6.00% Water System Revenue Refunding
Bonds (Series 1992)/(Original Issue Yield: 6.15%)/
(FGIC Insured), 5/15/2001 Aaa 2,619,850
------------------------------------------------------
1,475,000 San Antonio, TX, 8.625% GO Bonds, 8/1/2000 AA 1,752,123
------------------------------------------------------
2,000,000 San Antonio, TX, Electric & Gas System, 5.30% Revenue
Bonds, 2/1/2002 Aa 2,008,580
------------------------------------------------------
2,000,000 San Antonio, TX, Electric & Gas System, 7.00% Revenue
Bonds, 2/1/99 Aa 2,157,560
------------------------------------------------------
1,650,000 San Antonio, TX, Electric & Gas System, 9.90% Revenue
Bonds, 2/1/98 Aa 1,924,213
------------------------------------------------------
6,370,000 Socorro, TX, ISD, 6.25% UT GO Refunding Bonds (Series
1991A)/(Permanent School Fund Guaranty)/ (Original
Issue Yield: 6.30%), 8/15/2001 AAA 6,770,992
------------------------------------------------------
</TABLE>
INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ---------- ------------------------------------------------------ -------- ------------
<C> <S> <C> <C>
INTERMEDIATE-TERM MUNICIPAL SECURITIES--CONTINUED
- ---------------------------------------------------------------------
TEXAS--CONTINUED
------------------------------------------------------
$3,000,000 Texas State Public Property Finance Corp., 5.10%
Acquisition and Refunding Revenue Bonds (Series 1993)/
(Mental Health and Mental Retardation Center)/ (CGIC
Insured), 9/1/2003 AAA $ 2,919,990
------------------------------------------------------
6,000,000 Texas Water Development Board, 5.80% Revenue Bonds
(Series 1992)/(Original Issue Yield: 5.90%), 7/15/2002 Aa 6,223,560
------------------------------------------------------ ------------
Total 49,847,183
------------------------------------------------------ ------------
UTAH--2.3%
------------------------------------------------------
5,000,000 Intermountain Power Agency, 4.80% Power Supply Revenue
Bonds (Series 1993C), 7/1/2003 AA 4,793,500
------------------------------------------------------
2,000,000 Intermountain Power Agency, 7.20% Power Supply Revenue
Bonds, 7/1/99 AA 2,185,500
------------------------------------------------------ ------------
Total 6,979,000
------------------------------------------------------ ------------
VERMONT--0.4%
------------------------------------------------------
1,000,000 Vermont State, 5.80% GO Bonds (Series 1992A)/(Original
Issue Yield: 5.934%), 2/1/2002 Aa 1,050,350
------------------------------------------------------ ------------
VIRGINIA--4.0%
------------------------------------------------------
2,025,000 Newport News, VA, 5.40% General Improvement GO
Refunding Bonds (Series 1992B), 7/1/2002 Aa 2,060,701
------------------------------------------------------
6,000,000 Norfolk, VA, 5.00% GO Capital Improvement and
Refunding Bonds, 2/1/2003 Aa 5,904,360
------------------------------------------------------
1,995,000 Virginia Beach, VA, 6.30% GO Bonds, 3/1/2000 AA 2,131,239
------------------------------------------------------
1,995,000 Virginia Beach, VA, 6.30% GO Bonds, 3/1/2001 AA 2,141,832
------------------------------------------------------ ------------
Total 12,238,132
------------------------------------------------------ ------------
</TABLE>
INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ---------- ------------------------------------------------------ -------- ------------
<C> <S> <C> <C>
INTERMEDIATE-TERM MUNICIPAL SECURITIES--CONTINUED
- ---------------------------------------------------------------------
WASHINGTON--3.8%
------------------------------------------------------
$1,020,000 Seattle, WA, 6.00% LT GO Refunding Bonds (Series B),
3/1/2002 AA+ $ 1,074,733
------------------------------------------------------
2,000,000 Snohomish County, WA, School District #6, 5.45% GO
Bonds (FGIC Insured), 12/1/2005 AAA 1,981,480
------------------------------------------------------
4,000,000 Washington State Suburban Sanitation District, 4.40%
GO Bonds (Original Issue Yield: 4.50%), 6/1/2004 AA 3,613,440
------------------------------------------------------
2,000,000 Washington State, 5.60% GO Motor Vehicle Fuel Tax
Refund Bonds (Series D), 9/1/2001 Aa 2,067,140
------------------------------------------------------
2,570,000 Washington State, 6.60% UT GO Bonds (Series A),
2/1/2002 Aa 2,799,938
------------------------------------------------------ ------------
Total 11,536,731
------------------------------------------------------ ------------
WISCONSIN--0.8%
------------------------------------------------------
2,500,000 Wisconsin State, 5.20% GO Bonds (Original Issue Yield:
5.30%), 11/1/2002 Aa 2,521,925
------------------------------------------------------ ------------
TOTAL INTERMEDIATE-TERM MUNICIPAL SECURITIES
(IDENTIFIED COST $292,646,721) 298,776,591
------------------------------------------------------ ------------
</TABLE>
INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ---------- ------------------------------------------------------ -------- ------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--0.2%
- ---------------------------------------------------------------------
PUERTO RICO--0.0%
------------------------------------------------------
$ 150,000 Government Development Bank of Puerto Rico Weekly
VRDNs (Credit Suisse and Sumitomo Bank Ltd. LOCs) A-1 $ 150,000
------------------------------------------------------
TEXAS--0.2%
------------------------------------------------------
500,000 Houston, TX, HFDC Daily VRDNs (Methodist Hospital
Guaranty) A-1+ 500,000
------------------------------------------------------ ------------
TOTAL SHORT-TERM MUNICIPAL SECURITIES $ 650,000
------------------------------------------------------ ------------
TOTAL MUNICIPAL SECURITIES
(IDENTIFIED COST $293,296,721) $299,426,591+
------------------------------------------------------ ------------
</TABLE>
* Please refer to the appendix of Statement of Additional Information for an
explanation of the credit ratings. Current credit ratings are unaudited.
+ The cost of investments for federal tax purposes amounts to $293,296,721. The
net unrealized appreciation of investments on a federal tax basis amounts to
$6,129,870 which is comprised of $9,540,662 appreciation and $3,410,792
depreciation at May 31, 1994.
Note: The categories of investments are shown as a percentage of net assets
($304,378,407) at
May 31, 1994.
INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
The following abbreviations are used in this portfolio:
<TABLE>
<S> <C>
AMBAC -- American Municipal Bond Assurance Corporation
BIGI -- Bond Investors Guaranty Inc.
CGIC -- Capital Guaranty Insurance Corporation
ETM -- Escrowed to Maturity
FGIC -- Financial Guaranty Insurance Company
GO -- General Obligation
HDA -- Hospital Development Authority
HFDA -- Health Facility Development Authority
HFDC -- Health Facility Development Corporation
ISD -- Independent School District
LOCs -- Letters of Credit
LT -- Limited Tax
MBIA -- Municipal Bond Investors Assurance
Q-SBLF -- Qualified State Bond Loan Fund
UT -- Unlimited Tax
VRDNs -- Variable Rate Demand Notes
</TABLE>
(See Notes which are an integral part of the Financial Statements)
INTERMEDIATE MUNICIPAL TRUST
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Investments in securities, at value (Note 2A)
(identified and tax cost $293,296,721) $299,426,591
- --------------------------------------------------------------------------------
Cash 51,192
- --------------------------------------------------------------------------------
Interest receivable 6,146,492
- --------------------------------------------------------------------------------
Receivable for Fund shares sold 145,691
- -------------------------------------------------------------------------------- ------------
Total assets 305,769,966
- --------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------
Dividends payable (Note 2B) $1,040,815
- -------------------------------------------------------------------
Payable for Fund shares redeemed 290,969
- -------------------------------------------------------------------
Accrued expenses 59,775
- ------------------------------------------------------------------- ----------
Total liabilities 1,391,559
- -------------------------------------------------------------------------------- ------------
NET ASSETS for 28,944,792 shares of beneficial interest outstanding $304,378,407
- -------------------------------------------------------------------------------- ------------
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
Paid in capital $306,287,925
- --------------------------------------------------------------------------------
Unrealized appreciation of investments 6,129,870
- --------------------------------------------------------------------------------
Accumulated net realized loss on investments (8,039,388)
- -------------------------------------------------------------------------------- ------------
Total Net Assets $304,378,407
- -------------------------------------------------------------------------------- ------------
NET ASSET VALUE, Offering Price, and Redemption Price Per Share
Institutional Shares ($302,663,253 / 28,781,697 shares of beneficial interest
outstanding) $10.52
- -------------------------------------------------------------------------------- ------------
Institutional Service Shares ($1,715,154 / 163,095 shares of beneficial interest
outstanding) $10.52
- -------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
INTERMEDIATE MUNICIPAL TRUST
STATEMENT OF OPERATIONS
YEAR ENDED MAY 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -----------------------------------------------------------------------------------
Interest income (Note 2B) $16,884,773
- -----------------------------------------------------------------------------------
EXPENSES--
- ---------------------------------------------------------------------
Investment advisory fee (Note 4) $1,244,249
- ---------------------------------------------------------------------
Trustees' fees 8,465
- ---------------------------------------------------------------------
Administrative personnel and services fee (Note 4) 303,207
- ---------------------------------------------------------------------
Custodian and portfolio accounting fees 170,421
- ---------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses (Note 4) 19,955
- ---------------------------------------------------------------------
Fund share registration costs 74,236
- ---------------------------------------------------------------------
Auditing fees 17,545
- ---------------------------------------------------------------------
Legal fees 11,623
- ---------------------------------------------------------------------
Printing and postage 22,602
- ---------------------------------------------------------------------
Insurance premiums 9,436
- ---------------------------------------------------------------------
Distribution services fees (Note 4)--Institutional Service Shares 1,574
- ---------------------------------------------------------------------
Shareholder services fee (Note 4)--Institutional Service Shares 833
- ---------------------------------------------------------------------
Taxes 9,594
- ---------------------------------------------------------------------
Miscellaneous 8,163
- --------------------------------------------------------------------- ----------
Total expenses 1,901,903
- ---------------------------------------------------------------------
Deduct--
- ---------------------------------------------------------------------
Waiver of investment advisory fee (Note 4) $6,917
- ------------------------------------------------------------
Waiver of distribution services fees (Note 4) 833 7,750
- ------------------------------------------------------------ ------ ----------
Net expenses 1,894,153
- ----------------------------------------------------------------------------------- -----------
Net investment income 14,990,620
- ----------------------------------------------------------------------------------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- -----------------------------------------------------------------------------------
Net realized gain (loss) on investments (identified cost basis) (760,854)
- -----------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments (7,198,457)
- ----------------------------------------------------------------------------------- -----------
Net realized and unrealized loss on investments (7,959,311)
- ----------------------------------------------------------------------------------- -----------
Change in net assets resulting from operations $ 7,031,309
- ----------------------------------------------------------------------------------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
INTERMEDIATE MUNICIPAL TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED MAY 31,
<S> <C> <C>
1994 1993
------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
- ------------------------------------------------------------
OPERATIONS--
- ------------------------------------------------------------
Net investment income $ 14,990,620 $ 11,109,442
- ------------------------------------------------------------
Net realized gain (loss) on investment transactions
($760,854 and $242,740 net loss, respectively, as computed
for federal tax purposes) (Note 2C) (760,854) (242,740)
- ------------------------------------------------------------
Change in unrealized (depreciation) appreciation on
investments (7,198,457) 7,725,575
- ------------------------------------------------------------ ------------- ------------
Change in net assets resulting from operations 7,031,309 18,592,277
- ------------------------------------------------------------ ------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2B)--
- ------------------------------------------------------------
Dividends to shareholders from net investment income:
- ------------------------------------------------------------
Institutional Shares (14,961,284) (11,109,442)
- ------------------------------------------------------------
Institutional Service Shares (29,336) --
- ------------------------------------------------------------ ------------- ------------
Change in net assets from distributions to shareholders (14,990,620) (11,109,442)
- ------------------------------------------------------------ ------------- ------------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)--
- ------------------------------------------------------------
Proceeds from sale of shares 204,983,560 165,053,543
- ------------------------------------------------------------
Net asset value of shares issued to shareholders in payment
of dividends declared 2,548,104 1,634,529
- ------------------------------------------------------------
Cost of shares redeemed (158,476,788) (84,589,739)
- ------------------------------------------------------------ ------------- ------------
Change in net assets resulting from Fund share
transactions 49,054,876 82,098,333
- ------------------------------------------------------------ ------------- ------------
Change in net assets 41,095,565 89,581,168
- ------------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------------
Beginning of period 263,282,842 173,701,674
- ------------------------------------------------------------ ------------- ------------
End of period $ 304,378,407 $263,282,842
- ------------------------------------------------------------ ------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
INTERMEDIATE MUNICIPAL TRUST
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1994
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Intermediate Municipal Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as an open-end, management
investment company. The Trust consists of three portfolios. The financial
statements included herein present only those of Intermediate Municipal Trust
(the "Fund"). The financial statements of the other portfolios are presented
separately. The assets of each portfolio are segregated and a shareholder's
interest is limited to the portfolio in which shares are held.
The Fund offers two classes of shares, Institutional Shares and Institutional
Service Shares. Institutional Service Shares are identical in all respects to
Institutional Shares except that Institutional Service Shares are sold pursuant
to a distribution plan (the "Plan") adopted in accordance with the Act's Rule
12b-1.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
A. INVESTMENT VALUATIONS--Municipal bonds are valued by an independent pricing
service taking into consideration yield, liquidity, risk, credit, quality,
coupon, maturity, type of issue, and any other factors or market data it
deems relevant in determining valuations for normal institutional size
trading units of debt securities. The independent pricing service does not
rely exclusively on quoted prices. Short-term securities with remaining
maturities of sixty days or less may be stated at amortized cost, which
approximates value.
B. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized as
required by the Internal Revenue Code, as amended (the "Code"). Distributions
to shareholders are recorded on the ex-dividend date.
C. FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its tax-exempt income.
Accordingly, no provisions for federal tax are necessary. At May 31, 1994,
the Fund for federal tax purposes, had a capital loss carryforward of
$7,278,604 which will reduce the Fund's taxable income arising from future
net realized gain on investments, if any, to the extent permitted by the
Code, and thus will reduce the amount of the distributions to shareholders
which would otherwise be necessary to relieve the Fund of any liability for
federal tax. Pursuant to the Code, such capital loss carryforward will expire
in 1995 ($2,674,980), 1996 ($3,974,606), 1997 ($215,810), 1998 ($170,468) and
2001 ($242,740). Additionally, net capital losses of $760,854 attributable to
security transactions incurred after October 31, 1993 are treated as arising
on June 1, 1994, the first day of the Fund's next taxable year.
INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
D. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. A Fund records a when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the securities
purchased. Securities purchased on a when-issued or delayed delivery basis
are marked to market daily and begin earning interest on the settlement date.
E. OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED MAY 31,
-----------------------------------------------------------
1994 1993
----------------------------- --------------------------
INSTITUTIONAL SHARES SHARES DOLLARS SHARES DOLLARS
- -------------------------------------- ----------- ------------- ---------- ------------
<S> <C> <C> <C> <C>
Shares sold 18,798,999 $ 203,167,923 15,482,627 $165,053,543
- --------------------------------------
Shares issued to shareholders electing
to receive payment of dividends in
Trust shares 233,762 2,527,875 153,583 1,634,529
- --------------------------------------
Shares redeemed (14,769,157) (158,406,508) (7,968,625) (84,589,739)
- -------------------------------------- ----------- ------------- ---------- ------------
Net change resulting from
Institutional Shares Transactions 4,263,604 $ 47,289,290 7,667,585 $ 82,098,333
- -------------------------------------- ----------- ------------- ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED
MAY 31, 1994*
---------------------------
INSTITUTIONAL SERVICE SHARES SHARES DOLLARS
- ---------------------------------------- --------- -----------
<S> <C> <C>
Shares sold 167,890 $ 1,815,637
- ----------------------------------------
Shares issued to shareholders electing
to receive payment of dividends in
Trust shares 1,896 20,229
- ----------------------------------------
Shares redeemed (6,691) (70,280)
- ---------------------------------------- --------- -----------
Net change resulting from Institutional
Service Share Transactions 163,095 1,765,586
- ---------------------------------------- --------- -----------
Total net change resulting from Fund
Share Transactions 4,426,699 $49,054,876
- ---------------------------------------- --------- -----------
</TABLE>
* For the period from September 6, 1993 (date of initial public offering) to May
31, 1994.
INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
ADVISORY FEE--Federated Management, the Fund's investment adviser (the
"Adviser"), receives for its services an annual investment advisory fee equal to
.40% of the Fund's average daily net assets. The Adviser may voluntarily choose
to waive its fee. The Adviser can modify or terminate this voluntary waiver at
any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
administrative personnel and services. Prior to March 1, 1994, these services
were provided at approximate cost. Effective March 1, 1994, the FAS fee is based
on the level of average aggregate daily net assets of all funds advised by
subsidiaries of Federated Investors for the period. The administrative fee
received during the period of the Administrative Services Agreement shall be at
least $125,000 per portfolio and $30,000 per each additional class of shares.
DISTRIBUTION AND SHAREHOLDER SERVICES FEES--The Fund has adopted a Distribution
Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the
Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal
distributor, from the net assets of the Fund to finance activities intended to
result in the sale of the Fund's Institutional Service Shares. The Plan provides
that the Fund may incur distribution expenses up to .25 of 1% of the average
daily net assets of the Institutional Service Shares, annually, to compensate
FSC.
Under the terms of a shareholder services agreement with Federated Shareholder
Services ("FSS"), the Fund will pay FSS up to .25 of 1% of average net assets
for the Fund for the period. This fee is to obtain certain personal services for
shareholders and the maintenance of shareholder accounts. For the period ended
May 31, 1994, Institutional Shares did not incur a shareholder services fee.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ") serves as transfer agent and dividend disbursing agent for the Fund.
The FServ fee is based on the size, type and number of accounts and transactions
made by shareholders.
INTERFUND TRANSACTIONS--During the period ended May 31, 1994, the Fund engaged
in purchase and sale transactions with other affiliated funds pursuant to Rule
17a-7 of the Investment Company Act of 1940 amounting to $83,650,000 and
$86,250,000, respectively. These purchases and sales were conducted on an arms
length basis and transacted for cash consideration only, at independent current
market prices and without brokerage commissions, fees or other remuneration.
Certain Officers and Trustees of the Fund are Officers and Directors or Trustees
of the above companies.
INTERMEDIATE MUNICIPAL TRUST
- --------------------------------------------------------------------------------
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
fiscal year ended May 31, 1994, were as follows:
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------
PURCHASES $75,083,665
- ------------------------------------------------------------------------------- -----------
SALES $20,359,093
- ------------------------------------------------------------------------------- -----------
</TABLE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
INTERMEDIATE MUNICIPAL TRUST
(Intermediate Municipal Trust):
We have audited the accompanying statement of assets and liabilities of
Intermediate Municipal Trust (an investment portfolio of Intermediate Municipal
Trust, a Massachusetts business trust), including the schedule of portfolio
investments, as of May 31, 1994, and the related statement of operations for the
year then ended, and the statements of changes in net assets, and the financial
highlights (see pages 2 and 16 of the prospectus) for the periods presented.
These financial statements and financial highlights are the responsibility of
the Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned as of
May 31, 1994, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Intermediate Municipal Trust, an investment portfolio of Intermediate Municipal
Trust, as of May 31, 1994, the results of its operations for the year then
ended, and changes in its net assets and the financial highlights for the
periods presented, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN & CO.
Pittsburgh, Pennsylvania
July 11, 1994
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Intermediate Municipal Trust
Institutional Shares Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Investment Adviser
Federated Management Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Custodian
State Street Bank and P.O. Box 8602
Trust Company Boston, Massachusetts 02266-8602
- ------------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Legal Counsel
Houston, Houston & Donnelly 2510 Centre City Tower
Pittsburgh, Pennsylvania 15222
- ------------------------------------------------------------------------------------------------
Legal Counsel
Dickstein, Shapiro & Morin, L.L.P. 2101 L Street, N.W.
Washington, D.C. 20037
- ------------------------------------------------------------------------------------------------
Independent Public Accountants
Arthur Andersen & Co. 2100 One PPG Place
Pittsburgh, Pennsylvania 15222
- ------------------------------------------------------------------------------------------------
</TABLE>
INTERMEDIATE
MUNICIPAL TRUST
INSTITUTIONAL SHARES
PROSPECTUS
A No-Load, Open-End, Diversified
Management Investment Company
July 31, 1994
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
458810108
8061702A-IS (7/94)
INTERMEDIATE MUNICIPAL TRUST
(FORMERLY, FEDERATED INTERMEDIATE MUNICIPAL TRUST)
INSTITUTIONAL SHARES
INSTITUTIONAL SERVICE SHARES
COMBINED STATEMENT OF ADDITIONAL INFORMATION
The Institutional Shares and Institutional Service Shares represent interests in
a diversified portfolio of securities (the "Fund") of Intermediate Municipal
Trust (the "Trust"). This Combined Statement of Additional Information should be
read with the respective prospectuses for Institutional Shares and Institutional
Service Shares dated July 31, 1994. This Statement is not a prospectus itself.
To receive a copy of either prospectus, write or call Intermediate Municipal
Trust.
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
Statement dated July 31, 1994
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
GENERAL INFORMATION ABOUT THE TRUST 1
- ----------------------------------------------------------------
INVESTMENT OBJECTIVE AND POLICIES 1
- ----------------------------------------------------------------
Acceptable Investments 1
When-Issued and Delayed
Delivery Transactions 2
Temporary Investments 2
Portfolio Turnover 2
Investment Limitations 3
TRUST MANAGEMENT 5
- ----------------------------------------------------------------
Officers and Trustees 5
The Funds 6
Fund Ownership 7
Trustee Liability 7
INVESTMENT ADVISORY SERVICES 7
- ----------------------------------------------------------------
Adviser to the Fund 7
Advisory Fees 7
Other Related Services 8
ADMINISTRATIVE SERVICES 8
- ----------------------------------------------------------------
BROKERAGE TRANSACTIONS 8
- ----------------------------------------------------------------
PURCHASING SHARES 8
- ----------------------------------------------------------------
Distribution and Shareholder Services Plans 8
Conversion to Federal Funds 9
DETERMINING NET ASSET VALUE 9
- ----------------------------------------------------------------
Determining Value of Securities 9
REDEEMING SHARES 9
- ----------------------------------------------------------------
Redemption in Kind 9
EXCHANGING SECURITIES FOR FUND SHARES 10
- ----------------------------------------------------------------
Tax Consequences 10
TAX STATUS 10
- ----------------------------------------------------------------
The Fund's Tax Status 10
TOTAL RETURN 10
- ----------------------------------------------------------------
YIELD 10
- ----------------------------------------------------------------
TAX-EQUIVALENT YIELD 11
- ----------------------------------------------------------------
PERFORMANCE COMPARISONS 11
- ----------------------------------------------------------------
APPENDIX 13
- ----------------------------------------------------------------
GENERAL INFORMATION ABOUT THE TRUST
- --------------------------------------------------------------------------------
Intermediate Municipal Trust was established as a Massachusetts business trust
under a Declaration of Trust dated May 31, 1985. On September 1, 1993, the name
of the Trust was changed from Federated Intermediate Municipal Trust to
Intermediate Municipal Trust.
Shares of the Fund are offered in two classes known as Institutional Shares and
Institutional Service Shares (individually and collectively referred to as
"Shares," as the context may require). This combined statement of additional
information relates to the above mentioned Shares of the Fund.
INVESTMENT OBJECTIVE AND POLICIES
- --------------------------------------------------------------------------------
The Fund's investment objective is to provide current income exempt from federal
regular income tax.
ACCEPTABLE INVESTMENTS
The Fund invests at least 80% of its net assets in a diversified portfolio of
municipal securities with an average weighted maturity of not less than three or
more than ten years. The investment objective stated above cannot be changed
without the approval of shareholders. The following investment policies may be
changed without shareholder approval.
CHARACTERISTICS
The municipal securities in which the Fund invests have the
characteristics set forth in the prospectus.
A municipal security will be determined by the Fund's adviser to meet the
quality standards established by the Trust's Board of Trustees (the
"Trustees") if it is of comparable quality to municipal securities within
the Fund's rating requirements. The Trustees consider the
creditworthiness of the issuer of a municipal security, the issuer of a
participation interest if the Fund has the right to demand payment from
the issuer of the interest, or the guarantor of payment by either of
those issuers. The Fund is not required to sell a municipal security if
the security's rating is reduced below the required minimum subsequent to
its purchase by the Fund. The investment adviser considers this event,
however, in its determination of whether the Fund should continue to hold
the security in its portfolio. If Moody's Investors Service, Inc. or
Standard & Poor's Corporation ratings change because of changes in those
organizations or in their rating systems, the Fund will try to use
comparable ratings as standards in accordance with the investment
policies described in the Fund's prospectus.
TYPES OF ACCEPTABLE INVESTMENTS
Examples of municipal securities are:
- municipal notes and tax-exempt commercial paper;
- serial bonds sold with a series of maturity dates;
- tax anticipation notes sold to finance working capital needs of
municipalities in anticipation of receiving taxes;
- bond anticipation notes sold in anticipation of the issuance of
longer-term bonds;
- prerefunded municipal bonds refundable at a later date (payment of
principal and interest on prerefunded bonds are assured through the
first call date by the deposit in escrow of U.S. government
securities); or
- general obligation bonds secured by a municipality's pledge of
taxation.
PARTICIPATION INTERESTS
The financial institutions from which the Fund purchases participation
interests frequently provide or secure from other financial institutions
irrevocable letters of credit or guarantees and give the Fund the right
to demand payment on specified notice (normally within thirty days) from
the issuer of the letter of credit or guarantee. These financial
institutions may charge certain fees in connection with their repurchase
commitments, including a fee equal to the excess of the interest paid on
the municipal securities over the negotiated yield at which the
participation interests were purchased by the Fund. By purchasing
participation interests, the Fund is buying a security meeting the
maturity and quality requirements of the Fund and is also receiving the
tax-free benefits of the underlying securities.
In the acquisition of participation interests, the Fund's investment
adviser will consider the following quality factors:
- a high-quality underlying municipal security (of which the Trust takes
possession);
- a high-quality issuer of the participation interest; or
- a guarantee or letter of credit from a high-quality financial
institution supporting the participation interest.
VARIABLE RATE MUNICIPAL SECURITIES
Variable interest rates generally reduce changes in the market value of
municipal securities from their original purchase prices. Accordingly, as
interest rates decrease or increase, the potential for capital
appreciation or depreciation is less for variable rate municipal
securities than for fixed income obligations.
- --------------------------------------------------------------------------------
Many municipal securities with variable interest rates purchased by the
Fund are subject to repayment of principal (usually within seven days) on
the Fund's demand. The terms of these variable rate demand instruments
require payment of principal and accrued interest from the issuer of the
municipal obligations, the issuer of the participation interests, or a
guarantor of either issuer.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
These transactions are made to secure what is considered to be an advantageous
price and yield for the Fund. Settlement ordinarily occurs within a month before
delivery is due and the market values of the securities purchased may vary from
the purchase prices.
The Fund may also sell municipal securities on a delayed delivery basis with
settlement taking place more than five days after the sale as a normal form of
portfolio transaction. It is the investment adviser's experience that it is not
unusual in the municipal securities market for settlement periods to be slightly
longer than this period.
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
securities are marked to market daily and maintained until the transaction is
settled. The Fund may engage in these transactions to an extent that would cause
the segregation of an amount up to 20% of the total value of its assets.
TEMPORARY INVESTMENTS
The Fund may also invest in temporary investments, from time to time, for
temporary, defensive purposes. The Fund does not presently intend to invest in
taxable temporary investments in the coming year. The Fund might invest in
temporary investments:
- - while waiting to invest proceeds of sales of portfolio securities, although
generally such proceeds will be invested in municipal securities as quickly as
possible;
- - in anticipation of redemption requests; or
- - for temporary defensive purposes, in which case the Fund may invest more than
20% of the value of its net assets in cash or cash items, U.S. Treasury bills
or securities issued or guaranteed by the U.S. government, its agencies or
instrumentalities, or repurchase agreements.
The Fund will not purchase temporary investments (other than securities of the
U.S. government, its agencies or instrumentalities) if, as a result of the
purchase, 25% or more of the value of its total assets would be invested in any
one industry.
REPURCHASE AGREEMENTS
Repurchase agreements are arrangements in which banks, broker/dealers,
and other recognized financial institutions sell U.S. government or
agency 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
within one year from the date of acquisition. The Fund or its custodian
will take possession of the securities subject to repurchase agreements.
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. In the event that such 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 may 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 Trustees.
The Fund's adviser will also monitor the creditworthiness of the seller.
From time to time, such as when suitable municipal securities are not available,
the Fund may invest a portion of its assets in cash. Any portion of the Fund's
assets maintained in cash will reduce the amount of assets in municipal
securities and thereby reduce the Fund's yield.
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. During the fiscal years ended May 31, 1994 and
1993, the portfolio turnover rates were 7% and 3%, respectively.
- --------------------------------------------------------------------------------
INVESTMENT LIMITATIONS
DIVERSIFICATION OF INVESTMENTS
With respect to 75% of the value of the Fund's total assets, the Fund
will not purchase securities of any one issuer (other than securities
issued or guaranteed by the government of the United States or its
agencies or instrumentalities) if as a result more than 5% of the value
of its total assets would be invested in the securities of that issuer.
Under this limitation, each governmental subdivision, including states
and the District of Columbia, territories, possessions of the United
States, or their political subdivisions, agencies, authorities,
instrumentalities, or similar entities, will be considered a separate
issuer if its assets and revenues are separate from those of the
governmental body creating it and the security is backed only by its own
assets and revenues.
Industrial development bonds backed only by the assets and revenues of a
nongovernmental user are considered to be issued solely by that user. If
in the case of an industrial development bond or government-issued
security, a governmental or some other entity guarantees the security,
such guarantee would be considered a separate security issued by the
guarantor, subject to a limit on investments in the guarantor of 10% of
total assets.
ACQUIRING SECURITIES
The Fund will not acquire the voting securities of any issuer, except as
part of a merger, consolidation, reorganization, or acquisition of
assets. It will not invest in securities issued by any other investment
company or investment trust.
CONCENTRATION OF INVESTMENTS
The Fund does not intend to purchase securities (other than pre-refunded
municipal bonds prior to the termination of the escrow arrangement,
securities guaranteed by the U.S. government or its agencies or direct
obligations of the U.S. government) if, as a result of such purchases,
25% or more of the value of its total assets would be invested in a
governmental subdivision in any one state, territory, or possession of
the United States.
This policy applies to securities which are related in such a way that an
economic, business, or political development affecting one security would
also affect the other securities (such as securities paid from revenues
from selected projects in transportation, public works, education, or
housing).
BORROWING
The Fund will not borrow money except as a temporary measure for
extraordinary or emergency purposes and then only in amounts not in
excess of 5% of the value of its total assets or in an amount up to
one-third of the value of its total assets, including the amount
borrowed, in order to meet redemption requests without immediately
selling portfolio securities. This borrowing provision is not for
investment leverage but solely to facilitate management of the portfolio
by enabling the Fund to meet redemption requests when the liquidation of
portfolio securities would be inconvenient or disadvantageous. Interest
paid on borrowed funds will serve to reduce the Fund's income. The Fund
will liquidate any such borrowings as soon as possible and may not
purchase any portfolio securities while any borrowings are outstanding.
PLEDGING ASSETS
The Fund will not mortgage, pledge, or hypothecate any assets except to
secure permitted borrowings. In those cases, it may mortgage, pledge or
hypothecate assets having a market value not exceeding 10% of the value
of total assets at the time of the borrowing.
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.
ISSUING SENIOR SECURITIES
The Fund will not issue senior securities except for delayed-delivery and
when-issued transactions and futures contracts, each of which might be
considered senior securities. In addition, the Fund reserves the right to
purchase municipal securities which the Fund has the right or obligation
to sell to a third party (including the issuer of a participation
interest).
INVESTING IN REAL ESTATE
The Fund will not purchase or sell real estate, although it may invest in
municipal securities secured by real estate or interests in real estate.
- --------------------------------------------------------------------------------
INVESTING IN COMMODITIES AND MINERALS
The Fund will not purchase or sell commodities, commodity contracts, or
oil, gas, or other mineral exploration or development programs or leases.
LENDING CASH OR SECURITIES
The Fund will not lend any of its assets, except that it may acquire
publicly or nonpublicly issued municipal securities as permitted by its
investment objective and policies.
DEALING IN PUTS AND CALLS
The Fund will not purchase or sell puts, calls, straddles, spreads, or
any combination of them, except that the Fund may purchase put options on
municipal securities in an amount up to 10% of its total assets or may
purchase municipal securities accompanied by agreements of sellers to
repurchase them at the Fund's option.
INVESTING IN NEW ISSUERS
The Fund will not invest more than 5% of the value of its total assets in
industrial development bonds where the payment of principal and interest
are the responsibility of a company with a record of less than three
years of continuous operation, including the operation of any
predecessor.
Except as noted, the above investment limitations cannot be changed without
shareholder approval. The following restrictions, however, may be changed by the
Trustees without shareholder approval. Except as noted, shareholders will be
notified before any material change in these limitations becomes effective.
SELLING SHORT AND BUYING ON MARGIN
The Fund will not sell any securities short or purchase any securities on
margin, but may obtain such short-term credits as may be necessary for
clearance of purchases and sales of securities.
INVESTING IN ISSUERS WHOSE SECURITIES ARE OWNED BY OFFICERS OF THE TRUST
The Fund will not purchase or retain the securities of any issuer if the
officers and Trustees of the Trust or its investment adviser owning
individually more than 1/2 of 1% of the issuer's securities together own
more than 5% of the issuer's securities.
INVESTING IN ILLIQUID SECURITIES
The Fund will not invest more than 15% of its net assets in securities
which are illiquid, including repurchase agreements providing for
settlement in more than seven days after notice, and restricted
securities not determined by the Trustees to be liquid.
In addition, to comply with investment restrictions of a certain state, the Fund
will not invest in real estate limited partnerships.
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 present intent to borrow money, pledge securities,
or purchase put options during the coming year.
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 and loan having capital, surplus, and undivided profits in excess of
$100,000,000 at the time of investment to be "cash items."
TRUST MANAGEMENT
- --------------------------------------------------------------------------------
OFFICERS AND TRUSTEES
Officers and Trustees are listed with their addresses, principal occupations,
and present positions, including any affiliation with Federated Management,
Federated Investors, Federated Securities Corp., Federated Administrative
Services, Federated Services Company and the Funds (as defined below).
<TABLE>
<CAPTION>
POSITIONS WITH PRINCIPAL OCCUPATIONS
NAME AND ADDRESS THE TRUST DURING PAST FIVE YEARS
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
John F. Donahue*+ Chairman and Chairman and Trustee, Federated Investors; Chairman and
Federated Investors Trustee Trustee, Federated Advisers, Federated Management, and
Tower Federated Research; Director, AEtna Life and Casualty
Pittsburgh, PA Company; Chief Executive Officer and Director, Trustee, or
Managing General Partner of the Funds; formerly, Director,
The Standard Fire Insurance Company. Mr. Donahue is the
father of J. Christopher Donahue, Vice President of the
Trust.
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
John T. Conroy, Jr. Trustee President, Investment Properties Corporation; Senior Vice-
Wood/IPC Commercial President, John R. Wood and Associates, Inc., Realtors;
Department President, Northgate Village Development Corporation;
John R. Wood and General Partner or Trustee in private real estate ventures
Associates, Inc., in Southwest Florida; Director, Trustee, or Managing
Realtors General Partner of the Funds, formerly, President, Naples
3255 Tamiami Trail North Property Management, Inc.
Naples, FL
- -----------------------------------------------------------------------------------------------------------------
William J. Copeland Trustee Director and Member of the Executive Committee, Michael
One PNC Plaza Baker, Inc.; Director, Trustee, or Managing General Partner
23rd Floor of the Funds; formerly, Vice Chairman and Director, PNC
Pittsburgh, PA Bank N.A., and PNC Bank Corp.; and Director, Ryan Homes,
Inc.
- -----------------------------------------------------------------------------------------------------------------
James E. Dowd Trustee Attorney-at-law; Director, The Emerging Germany Fund, Inc.;
571 Hayward Mill Road Director, Trustee, or Managing General Partner of the
Concord, MA Funds; formerly, Director, Blue Cross of Massachusetts,
Inc.
- -----------------------------------------------------------------------------------------------------------------
Lawrence D. Ellis, M.D. Trustee Hematologist, Oncologist, and Internist, Presbyterian and
3471 Fifth Avenue Montefiore Hospitals; Clinical Professor of Medicine and
Suite 1111 Trustee, University of Pittsburgh; Director, Trustee, or
Pittsburgh, PA Managing General Partner of the Funds.
- -----------------------------------------------------------------------------------------------------------------
Edward L. Flaherty, Jr.+ Trustee Attorney-at-law; Partner, Meyer and Flaherty; Director, Eat
5916 Penn Mall 'N Park Restaurants, Inc., and Statewide Settlement Agency,
Pittsburgh, PA Inc.; Director, Trustee, or Managing General Partner of the
Funds; formerly, Counsel, Horizon Financial, F.A., Western
Region.
- -----------------------------------------------------------------------------------------------------------------
Glen R. Johnson* President and Trustee Federated Investors; President and/or Trustee of
Federated Investors Trustee some of the Funds; staff member, Federated Securities Corp.
Tower and Federated Administrative Services.
Pittsburgh, PA
- -----------------------------------------------------------------------------------------------------------------
Peter E. Madden Trustee Consultant; State Representative, Commonwealth of
225 Franklin Street Massachusetts; Director, Trustee, or Managing General
Boston, MA Partner of the Funds; formerly President, State Street Bank
& Trust Company and State Street Boston Corporation; and
Trustee, Lahey Clinic Foundation, Inc.
- -----------------------------------------------------------------------------------------------------------------
Gregor F. Meyer Trustee Attorney-at-law; Partner, Meyer and Flaherty; Chairman,
5916 Penn Mall Meritcare, Inc.; Director, Eat 'N Park Restaurants, Inc.;
Pittsburgh, PA Director, Trustee, or Managing General Partner of the
Funds; formerly, Vice Chairman, Horizon Financial, F.A.
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITIONS WITH PRINCIPAL OCCUPATIONS
NAME AND ADDRESS THE TRUST DURING PAST FIVE YEARS
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
Wesley W. Posvar Trustee Professor, Foreign Policy and Management Consultant;
1202 Cathedral of Trustee, Carnegie Endowment for International Peace, RAND
Learning Corporation, Online Computer Library Center, Inc., and U.S.
University of Pittsburgh Space Foundation; Chairman, Czecho Slovak Management
Pittsburgh, PA Center; Director, Trustee, or Managing General Partner of
the Funds; President Emeritus, University of Pittsburgh;
formerly, Chairman, National Advisory Council for
Environmental Policy and Technology.
- -----------------------------------------------------------------------------------------------------------------
Marjorie P. Smuts Trustee Public relations/marketing consultant; Director, Trustee,
4905 Bayard Street or Managing General Partner of the Funds.
Pittsburgh, PA
- -----------------------------------------------------------------------------------------------------------------
J. Christopher Donahue Vice President President and Trustee, Federated Investors; President and
Federated Investors Trustee, Federated Advisers, Federated Management, and
Tower Federated Research; Director and President, Federated
Pittsburgh, PA Research Corp.; President, Passport Research, Ltd.;
Trustee, Federated Administrative Services, Federated
Services Company, and Federated Shareholder Services;
President or Vice President of the Funds; Director,
Trustee, or Managing General Partner of some of the Funds.
Mr. Donahue is the son of John F. Donahue, Chairman and
Trustee of the Trust.
- -----------------------------------------------------------------------------------------------------------------
Richard B. Fisher Vice President Executive Vice President and Trustee, Federated Investors;
Federated Investors Chairman and Director, Federated Securities Corp.;
Tower President or Vice President of the Funds; Director or
Pittsburgh, PA Trustee of some of the Funds.
- -----------------------------------------------------------------------------------------------------------------
Edward C. Gonzales Vice President Vice President, Treasurer and Trustee, Federated Investors;
Federated Investors and Treasurer Vice President and Treasurer, Federated Advisers, Federated
Tower Management, and Federated Research; Executive Vice
Pittsburgh, PA President, Treasurer, and Director, Federated Securities
Corp.; Trustee, Federated Services Company; Chairman,
Treasurer, and Trustee, Federated Administrative Services;
Trustee or Director of some of the Funds; Vice President
and Treasurer of the Funds.
- -----------------------------------------------------------------------------------------------------------------
John W. McGonigle Vice President Vice President, Secretary, General Counsel, and Trustee,
Federated Investors and Secretary Federated Investors; Vice President, Secretary, and
Tower Trustee, Federated Advisers, Federated Management, and
Pittsburgh, PA Federated Research; Trustee, Federated Services Company;
Executive Vice President, Secretary, and Trustee, Federated
Administrative Services; Director and Executive Vice
President, Federated Securities Corp.; Vice President and
Secretary of the Funds.
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
* This Trustee is deemed to be an "interested person" of the Trust as defined in
the Investment Company Act of 1940.
+ Members of Executive Committee. The Executive Committee of the Board of
Trustees handles the responsibilities of the Trustees between meetings of the
Board.
THE FUNDS
"The Funds" and "Funds" mean the following investment companies: American
Leaders Fund, Inc.; Annuity Management Series; Automated Cash Management Trust;
Automated Government Money Trust; California Municipal Cash Trust; Cash Trust
Series II; Cash Trust Series, Inc.; DG Investor Series; Edward D. Jones & Co.
Daily Passport Cash Trust; Federated ARMs Fund; Federated Exchange Fund, Ltd.;
Federated GNMA Trust; Federated Government Trust; Federated Growth Trust;
Federated High Yield Trust; Federated Income Securities Trust; Federated Income
Trust; Federated Index Trust; Federated Intermediate Government Trust; Federated
Master Trust; Federated Municipal Trust; Federated Short-Intermediate Government
Trust; Federated Short-Term U.S. Government Trust; Federated Stock Trust;
Federated Tax-Free Trust; Federated U.S. Government Bond Fund; First Priority
Funds; Fixed Income Securities, Inc.; Fortress Adjustable Rate U.S. Government
Fund, Inc.; Fortress Municipal Income Fund, Inc.; Fortress
- --------------------------------------------------------------------------------
Utility Fund, Inc.; Fund for U.S. Government Securities, Inc.; Government Income
Securities, Inc.; High Yield Cash Trust; Insight Institutional Series, Inc.;
Insurance Management Series; Intermediate Municipal Trust; International Series,
Inc.; Investment Series Funds, Inc.; Investment Series Trust; Liberty Equity
Income Fund, Inc.; Liberty High Income Bond Fund, Inc.; Liberty Municipal
Securities Fund, Inc.; Liberty U.S. Government Money Market Trust; Liberty Term
Trust, Inc.-1999; Liberty Utility Fund, Inc.; Liquid Cash Trust; Managed Series
Trust; Mark Twain Funds; Money Market Management, Inc.; Money Market Obligations
Trust; Money Market Trust; Municipal Securities Income Trust; New York Municipal
Cash Trust; 111 Corcoran Funds; Peachtree Funds; The Planters Funds; Portage
Funds; RIMCO Monument Funds; The Shawmut Funds; Short-Term Municipal Trust;
Signet Select Funds; Star Funds; The Starburst Funds; The Starburst Funds II;
Stock and Bond Fund, Inc.; Sunburst Funds; Targeted Duration Trust; Tax-Free
Instruments Trust; Trademark Funds; Trust for Financial Institutions; Trust for
Government Cash Reserves; Trust for Short-Term U.S. Government Securities; Trust
for U.S. Treasury Obligations; and World Investment Series, Inc.
FUND OWNERSHIP
Officers and Trustees own less than 1% of the Fund's outstanding shares.
As of July 1, 1994, the following shareholders of record owned 5% or more of the
outstanding Institutional Service Shares of the Fund: Centrusco, Geneseo, IL,
owned approximately 21,639 Shares 13.10%; Murray Stone and Elaine Stone, St.
Louis, MO, owned approximately 9,098 Shares 5.51%; Rose Marie Schneller,
Trustee, FBO The Rose Marie Schneller Trust, Smithton, IL, owned approximately
14,762 Shares 8.94%; Robert Petrofsky and Eileen Petrofsky, St. Louis, MO, owned
approximately 14,484 Shares 8.77%; David Petrofsky and Claudette Petrofsky,
Trustees, Claudette Petrofsky Living Trust, St. Louis, MO, owned approximately
9,361 Shares 5.67%; and Leonard Petrofsky or Marlene Petrofsky, Trustees,
Marlene Petrofsky Living Trust, St. Louis, MO, owned approximately 9,361 Shares
5.67%.
As of July 1, 1994, the following shareholders of record owned 5% or more of the
outstanding Institutional Shares of the Fund: United Jersey Bank, Hackensack,
NJ, owned approximately 2,633,620 Shares 9.40%.
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 of the Class A (voting) shares of
Federated Investors are owned by a trust, the trustees of which are John F.
Donahue, his wife, and his son, J. Christopher Donahue. John F. Donahue, is
Chairman and Trustee of Federated Management, Federated Investors, and the
Trust. J. Christopher Donahue, President and Trustee of Federated Management and
Federated Investors; Trustee of Federated Administrative Services and Federated
Services Company; and Vice President of the Trust. John W. McGonigle is Vice
President, Secretary, and Trustee of Federated Management; Vice President and
Secretary of Federated Research Corp.; Vice President, Secretary, Trustee, and
General Counsel of Federated Investors, Trustee, Executive Vice President,
Secretary, and Trustee of Federated Administrative Services; Executive Vice
President and Director of Federated Securities Corp.; Trustee of Federated
Services Company; and Vice President and Secretary of the Trust. The Adviser
shall not be liable to the Trust, the Fund, or any shareholder for any losses
that may be sustained in the purchase, holding, or sale of any security, or for
anything done or omitted by it, except acts or omissions involving willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
imposed upon it by its contract with the Trust.
ADVISORY FEES
For its advisory services, the Adviser receives an annual investment advisory
fee as described in the prospectus. During the fiscal years ended May 31, 1994,
1993, and 1992, the Adviser earned $1,244,249, $842,542, and $578,960,
respectively, which were reduced by $6,917, $308,350, and $324,118,
respectively, because of undertakings to limit the Fund's expenses.
STATE EXPENSE LIMITATIONS
The Adviser has undertaken to comply with the expense limitation
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 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.
ADMINISTRATIVE SERVICES
- --------------------------------------------------------------------------------
Federated Administrative Services, a subsidiary of Federated Investors, provides
administrative personnel and services to the Fund for a fee as described in the
prospectus. Prior to March 1, 1994, Federated Administrative Services, Inc.,
also a subsidiary of Federated Investors, served as the Fund's administrator.
(For purposes of this statement of Additional Information, Federated
Administrative Services and Federated Administrative Services, Inc. may,
hereinafter, collectively be referred to as the "Administrators.") For the
fiscal year ended May 31, 1994, the Administrators collectively earned $303,207,
none of which was waived. For the fiscal years ended May 31, 1993, and 1992,
Federated Administrative Services, Inc., earned $271,801 and $237,198,
respectively, none of which was waived. Dr. Henry Gailliot, an officer of
Federated Management, the Adviser to the Fund, holds approximately 20% of the
outstanding common stock and serves as director of Commercial Data Services,
Inc., a company which provides computer processing services to the
Administrators.
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 Federated
Funds. The Adviser makes decisions on portfolio transactions and selects brokers
and dealers subject to review by the Trustees.
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.
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.
Research services provided by brokers may be used by the Adviser or by
affiliates of Federated Investors in advising Federated Funds 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.
PURCHASING SHARES
- -------------------------------------------------------------------------------
Shares are sold at their net asset value without a sales charge on days the New
York Stock Exchange is open for business. The procedure for purchasing Shares is
explained in the respective prospectus under "Investing in Institutional Shares"
or "Investing in Institutional Service Shares."
DISTRIBUTION AND SHAREHOLDER SERVICES PLANS
These arrangements permit the payment of fees to financial institutions, the
distributor, and Federated Shareholder Services, 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 (Institutional Service Shares only), the
Trustees expect that 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
objectives. By identifying potential investors whose needs are served by the
Fund's objectives, 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.
For the fiscal period ending May 31, 1994, payments in the amount of $1,574 were
made pursuant to the Distribution Plan, $741 of which was paid to financial
institutions. In addition, for this period, payments in the amount of $833 were
made pursuant to the Shareholder Services Plan.
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. This conversion must be made
before shares are purchased. State Street Bank and Trust Company ("State Street
Bank") acts as the shareholder's agent in depositing checks and converting them
to federal funds.
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 the respective prospectus.
DETERMINING VALUE OF SECURITIES
The values of the Fund's portfolio securities are determined as follows:
- - according to prices provided by independent pricing services, which do not
include market prices for the Fund's specific portfolio securities and may be
determined without exclusive reliance on quoted prices, and which may take
into account appropriate factors such as yield, quality, coupon rate,
maturity, type of issue, trading characteristics and other market data
employed in determining valuations for such securities; or
- - for short-term obligations with remaining maturities of 60 days or less, at
the time of purchase, at amortized cost unless the Trustees determine that
particular circumstances of the security indicate otherwise.
REDEEMING SHARES
- --------------------------------------------------------------------------------
The Fund redeems Shares at the next computed net asset value after State Street
Bank receives the redemption request. Redemption procedures are explained in the
respective prospectus under "Redeeming Institutional Shares" or "Redeeming
Institutional Service Shares." Although State Street Bank 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.
REDEMPTION IN KIND
Although the Fund 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 Fund's portfolio.
Redemption in kind will be made in conformity with applicable Securities and
Exchange Commission rules, taking such securities at the same value employed in
determining net asset value and selecting the securities in a manner the
Trustees determine to be fair and equitable.
The Fund has elected to be governed by Rule 18f-1 of the Investment Company Act
of 1940, under which the Trust is obligated to redeem shares for any one
shareholder in cash only up to the lesser of $250,000 or 1% of a class's net
asset value during any 90-day period.
EXCHANGING SECURITIES FOR FUND SHARES
- --------------------------------------------------------------------------------
Investors may exchange municipal securities they already own for Shares or they
may exchange a combination of municipal securities and cash for Shares. An
investor should forward the securities in negotiable form with a letter of
transmittal and authorization 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 Fund 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 Trust, 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:
- - derive at least 90% of its gross income from dividends, interest, and gains
from the sale of securities;
- - derive less than 30% of its gross income from gains on the sale of securities
held less than three months;
- - invest in securities within certain statutory limits; and
- - distribute to its shareholders at least 90% of its net income earned during
the year.
TOTAL RETURN
- --------------------------------------------------------------------------------
The Fund's average annual total return for Institutional Shares for the one-year
and five-year periods ended May 31, 1994, and for the period from December 26,
1985 (effective date of the Trust's registration statement) to May 31, 1994,
were 2.79%, 7.37% and 6.74%, respectively.
The Fund's cumulative total return for Institutional Service Shares for the
period from September 6, 1993 (date of initial public offering) to May 31, 1994,
was (1.10%).
The average annual total return for both classes of Shares 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 offering price per Share at the end of the period. The
number of Shares owned at the end of the period is based on the number of Shares
purchased at the beginning of the period with $1,000, adjusted over the period
by any additional Shares, assuming the monthly reinvestment of all dividends and
distributions.
YIELD
- --------------------------------------------------------------------------------
The Funds' yields for the thirty-day period ended May 31, 1994, for
Institutional Shares and Institutional Service Shares were 4.45% and 4.20%,
respectively.
The yield for both classes of Shares of the Fund is determined by dividing the
offering price per Share (as defined by the Securities and Exchange Commission)
earned by either class of Shares over a thirty-day period by the offering price
per Share of either class of Shares on the last day of the period. This value is
then 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 twelve-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
shareholders.
To the extent that financial institutions and brokers/dealers charge fees in
connection with services provided in conjunction with an investment in either
class of Shares, performance will be reduced for those shareholders paying those
fees.
TAX-EQUIVALENT YIELD
- --------------------------------------------------------------------------------
The Funds' tax-equivalent yields for the thirty-day period ended May 31, 1994,
for Institutional Shares and Institutional Service Shares were 6.18% and 5.83%,
respectively.
The tax-equivalent yield of the Fund is calculated similarly to the yield, but
is adjusted to reflect the taxable yield that the Fund would have had to earn to
equal its actual yield, assuming a 28% tax rate and assuming that income is 100%
tax-exempt.
TAX-EQUIVALENCY TABLE
The Fund may also use a tax-equivalency table in advertising and sales
literature. The interest earned by the municipal bonds in the Fund's
portfolio generally remains free from federal regular income tax,* and is
often free from state and local taxes as well. As the table below
indicates, a "tax-free" investment is an attractive choice for investors,
particularly in times of narrow spreads between tax-free and taxable
yields.
TAXABLE YIELD EQUIVALENT FOR 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
FEDERAL INCOME TAX BRACKET:
15.00% 28.00% 31.00% 36.00% 39.60%
- --------------------------------------------------------------------------------------------------------------
Joint Return: $1-38,000 $38,001-91,850 $91,851-140,000 $140,001-250,000 Over $250,000
Single Return: $1-22,750 $22,751-55,100 $55,101-115,000 $115,001-250,000 Over $250,000
- --------------------------------------------------------------------------------------------------------------
TAX-EXEMPT
YIELD TAXABLE YIELD EQUIVALENT
- --------------------------------------------------------------------------------------------------------------
2.50% 2.94% 3.47% 3.62% 3.91% 4.14%
3.00 3.53 4.17 4.35 4.69 4.97
3.50 4.12 4.86 5.07 5.47 5.79
4.00 4.71 5.56 5.80 6.25 6.62
4.50 5.29 6.25 6.52 7.03 7.45
5.00 5.88 6.94 7.25 7.81 8.28
5.50 6.47 7.64 7.97 8.59 9.11
6.00 7.06 8.33 8.70 9.38 9.93
6.50 7.65 9.03 9.42 10.16 10.76
7.00 8.24 9.72 10.14 10.94 11.59
7.50 8.82 10.42 10.87 11.72 12.42
8.00 9.41 11.11 11.59 12.50 13.25
</TABLE>
Note: The maximum marginal tax rate for each bracket was used in calculating the
taxable yield equivalent.
The chart above is for illustrative purposes only. It is not an indicator of
past or future performance of the Trust.
* Some portion of the Fund's income may be subject to the federal alternative
minimum tax and state and local taxes.
PERFORMANCE COMPARISONS
- --------------------------------------------------------------------------------
The performance of both classes of shares depends on such variables as:
- - portfolio quality;
- - average portfolio maturity;
- - type of instruments in which the portfolio is invested;
- - changes in interest rates and market value of portfolio securities;
- - changes in the Fund's expenses or either class of share's expenses; and
- - various other factors.
Either class of Shares' 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:
- - 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 offering price over a specific period of time. From
time to time, the Fund will quote its Lipper ranking in the intermediate
municipal bond funds category in advertising and sales literature.
- --------------------------------------------------------------------------------
- - 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 two weeks.
- - LEHMAN BROTHERS FIVE-YEAR STATE GENERAL OBLIGATION BONDS is an index comprised
of all state general obligation debt issues with maturities between four and
six years. These bonds are rated A or better and represent a variety of coupon
ranges. Index figures are total returns calculated for one, three, and twelve
month periods as well as year-to-date. Total returns are also calculated as of
the index inception, December 31, 1979.
- - LEHMAN BROTHERS TEN-YEAR STATE GENERAL OBLIGATION BONDS is an index comprised
of the same issues noted above except that the maturities range between nine
and eleven years. Index figures are total returns calculated for the same
periods as listed above.
Advertisements and other sales literature for the Fund may quote total returns
which are calculated on non-standardized base periods. These total returns
represent the historic change in the value of an investment in either class of
shares based on monthly reinvestment of dividends over a specified period of
time.
APPENDIX
- --------------------------------------------------------------------------------
STANDARD AND POOR'S CORPORATION MUNICIPAL BOND RATING DEFINITIONS
AAA--Debt rated AAA has the highest rating assigned by Standard & Poor's.
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 effect 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.
MOODY'S INVESTORS SERVICE, INC. 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
edge." 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 some time 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.
MOODY'S INVESTORS SERVICE, INC. SHORT-TERM MUNICIPAL OBLIGATION RATING
DEFINITIONS
MIG1/VMIG1--This designation denotes best quality. There is present strong
protection by established cash flows, superior liquidity support, or
demonstrated broad-based access to the market for refinancing.
MIG2/VMIG2--This designation denotes high quality. Margins of protection are
ample although not so large as in the preceding group.
458810108
458810207
8061702B (7/94)
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits:
(a) Financial Statements Filed in Part A
(b) Exhibits:
(1) Conformed copy of Declaration of Trust of the
Registrant (12.);
(2) (i) Copy of By-Laws of the Registrant
(1.);
(ii) Copy of Amendment to By-Laws of
Registrant (6.);
(3) Not applicable;
(4) Copy of Specimen Certificate for Shares of
Beneficial Interest of the Registrant (2.);
(i) Copy of Specimen Certificates for
Shares of Beneficial Interest of the
Registrant for Ohio Intermediate
Municipal Trust and Pennsylvania Municipal
Trust (12.);
(5)(i) Copy of Investment Advisory Contract of
the Registrant;+
(a) Conformed copy of Exhibit A to
the Investment Advisory Contract of the
Registrant to add Pennsylvania
Intermediate Municipal Trust and Ohio
Intermediate Municipal Trust to the
present Investment Advisory Contract;+
(6) (i) Copy of Distributor's Contract of the
Registrant;+
(ii) Form of Exhibit A to Distributor's
Contract;+
(iii) Form of Exhibit B to Distributor's
Contract;+
(iv) Form of Exhibit C to Distributor's
Contract;+
(v) Form of Exhibit D to Distributor's
Contract;+
(7) Not applicable;
(8) Conformed copy of the Custodian
Agreement;+
+ All exhibits have been filed electronically.
1. Response is incorporated by reference to Registrant's
Initial Registration Statement on Form N-1A filed June 4,
1985 (File Nos. 2-98237 and 811-4314).
2. Response is incorporated by reference to Registrant's Pre-
Effective Amendment No. 1 on Form N-1A filed October 22,
1985 (File Nos. 2-98237 and 811-4314).
6. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 4 on Form N-1A filed July 26, 1988
(File Nos. 2-98237 and 811-4314).
12. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 17 on Form N-1A filed February 17,
1994 (File Nos. 2-98237 and 811-4314).
(9) Conformed copy of Agreement
for Fund Accounting, Shareholder
Recordkeeping, and Custody Services
Procurement;+
(i) Conformed copy of Shareholder Services
Plan of the Registrant;+
(ii) Copy of Shareholder Services Sub-
Contract of the Registrant;+
(iii) Conformed copy of Shareholder Services
Agreement of the Registrant;+
(iv) Conformed copy of Administrative
Services Agreement of the Registrant;+
(10) Not applicable;
(11) Conformed copy of the Consent of
Independent Public Accountants;+
(12) Not applicable;
(13) Copy of Initial Capital Understanding
(3.);
(14) Not applicable;
(15) (i) Copy of 12b-1 Plan;+
(ii) Conformed copy of Exhibit A to the
12b-1 Plan;+
(iii) Copy of Rule 12b-1 Agreement
(12.);
(iv) Copy of Exhibit A to 12b-1
Agreement (12.);
(16) Copy of Schedule for Computation of Fund
Performance Data (13.);
(17) Power of Attorney (10.);
(18) Opinion and Consent of Counsel as to
availability of Rule 485(b)+.
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 July 1, 1994
Shares of Beneficial Interest
Pennsylvania Intermediate 19
Municipal Trust
Intermediate Municipal Trust
Institutional Shares 1,235
Intermediate Municipal Trust
Institutional Service Shares 44
+ All exhibits have been filed electronically.
3. Response is incorporated by reference to Registrant's Pre-
Effective Amendment No. 2 on Form N-1A filed December 19,
1985 (File Nos. 2-98237 and 811-4314).
10. Response is incorporated by reference to Registrants' Post-
Effective Amendment No. 13 on Form N-1A filed July 7, 1993,
(File Nos. 2-98237 and 811-4314).
12. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 17 on Form N-1A filed February 17,
1994 (File Nos. 2-98237 and 811-4314).
13. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 19 on Form N-1A filed May 27, 1994
(File Nos. 2-98237 and 811-4314).
Number of Record Holders
as of July 12, 1994
Ohio Intermediate Municipal Trust 27
Item 27. Indemnification: (1.)
Item 28. Business and Other Connections of Investment Adviser:
(1.)
Item 29. Principal Underwriters:
(a) Federated Securities Corp., the Distributor
for shares of the Registrant, also acts as
principal underwriter for the following open-end
investment companies: Alexander Hamilton Funds;
American Leaders Fund, Inc.; Annuity Management
Series; Automated Cash Management Trust; Automated
Government Money Trust; BayFunds; The Biltmore
Funds; The Biltmore Municipal Funds; The Boulevard
Funds; California Municipal Cash Trust; Cambridge
Series Trust; Cash Trust Series, Inc.; Cash Trust
Series II; DG Investor Series; Edward D. Jones &
Co. Daily Passport Cash Trust; Federated ARMs Fund;
Federated Exchange Fund, Ltd.; Federated GNMA
Trust; Federated Government Trust; Federated Growth
Trust; Federated High Yield Trust; Federated Income
Securities Trust; Federated Income Trust; Federated
Index Trust; Federated Intermediate Government
Trust; Federated Master Trust; Federated Municipal
Trust; Federated Short-Intermediate Government
Trust; Federated Short-Term U.S. Government Trust;
Federated Stock Trust; Federated Tax-Free Trust;
Federated U.S. Government Bond Fund; First Priority
Funds; First Union Funds; Fixed Income Securities,
Inc.; Fortress Adjustable Rate U.S. Government
Fund, Inc.; Fortress Municipal Income Fund, Inc.;
Fortress Utility Fund, Inc.; Fountain Square Funds;
Fund for U.S. Government Securities, Inc.;
Government Income Securities, Inc.; High Yield Cash
Trust; Independence One Mutual Funds; Insight
Institutional Series, Inc.; Insurance Management
Series; Intermediate Municipal Trust; International
Series Inc.; Investment Series Funds, Inc.;
Investment Series Trust; Liberty Equity Income
Fund, Inc.; Liberty High Income Bond Fund, Inc.;
Liberty Municipal Securities Fund, Inc.; Liberty
U.S. Government Money Market Trust; Liberty Utility
Fund, Inc.; Liquid Cash Trust; Managed Series
Trust; Mark Twain Funds; Marshall Funds, Inc.;
Money Market Management, Inc.; Money Market
Obligations Trust; Money Market Trust; The Monitor
Funds; Municipal Securities Income Trust; New York
Municipal Cash Trust; 111 Corcoran Funds; Peachtree
Funds; The Planters Funds; Portage Funds; RIMCO
Monument Funds; The Shawmut Funds; Short-Term
Municipal Trust; Signet Select Funds; SouthTrust
Vulcan Funds; Star Funds; The Starburst Funds; The
Starburst Funds II; Stock and Bond Fund, Inc.;
Sunburst Funds; Targeted Duration Trust; Tax-Free
Instruments Trust; Tower Mutual Funds; Trademark
Funds; Trust for Financial Institutions; Trust for
Government Cash Reserves; Trust for Short-Term U.S.
Government Securities; Trust for U.S. Treasury
Obligations; Vision Fiduciary Funds, Inc.; Vision
Group of Funds, Inc.; and World Investment Series,
Inc.
Federated Securities Corp. also acts as principal
underwriter for the following closed-end investment
company: Liberty Term Trust, Inc.- 1999.
(b)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Richard B. Fisher Director, Chairman, Chief Vice President
Federated Investors Tower Executive Officer, Chief
Pittsburgh, PA 15222-3779 Operating Officer, and
Asst. Treasurer, Federated
Securities Corp.
Edward C. Gonzales Director, Executive Vice Vice President and
Federated Investors Tower President, and Treasurer, Treasurer
Pittsburgh, PA 15222-3779 Federated Securities
Corp.
John W. McGonigle Director, Executive Vice Vice President and
Federated Investors Tower President, and Assistant Secretary
Pittsburgh, PA 15222-3779 Secretary, Federated
Securities Corp.
John A. Staley,IV Executive Vice President
Federated Investors Tower and Assistant Secretary,
Pittsburgh, PA 15222-3779 Federated Securities Corp.
John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark R. Gensheimer Executive Vice President of --
Federated Investors Tower Bank/Trust
Pittsburgh, PA 15222-3779 Federated Securities Corp.
Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
H. Joseph Kennedy Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James R. Ball Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard W. Boyd Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
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
Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David C. Glabicki Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Scott A. Hutton Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William J. Kerns Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William E. Kugler Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Dennis M. Laffey Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Francis J. Matten, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Jeffrey Niss Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael P. O'Brien Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Solon A. Person, IV Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Charles A. Robison Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas E. Territ 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
Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Philip C. Hetzel Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Ernest L. Linane Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
S. Elliott Cohan Secretary, Federated Assistant
Federated Investors Tower Securities Corp. Secretary
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 the following locations:
Registrant Federated Investors Tower
Federated Services Company Pittsburgh, PA 15222-
3779
("Transfer Agent and
Dividend Disbursing Agent")
Federated Administrative
Services
("Administrator")
Federated Management
("Adviser")
State Street Bank and Trust P.O. Box 8604
Company Boston, MA 02266-8604
("Custodian")
Item 31. Management Services: Not applicable.
Item 32. Undertakings:
Registrant hereby undertakes to comply with the
provisions of Section 16(c) of the 1940 Act with
respect to the removal of Trustees and the calling of
special shareholder meetings by shareholders.
Registrant hereby undertakes to furnish each person to
whom a prospectus is delivered 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 and the Investment Company Act of 1940, the Registrant,
INTERMEDIATE MUNICIPAL TRUST, has duly caused this Amendment
to its Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, all in the City
of Pittsburgh and Commonwealth of Pennsylvania, on the 27th
day of July, 1994.
INTERMEDIATE MUNICIPAL TRUST
BY: /s/G. Andrew Bonnewell
G. Andrew Bonnewell, Assistant Secretary
Attorney in Fact for John F. Donahue
July 27, 1994
Pursuant to the requirements of the Securities Act of
1933, this Amendment to its Registration Statement has been
signed below by the following person in the capacity and on
the date indicated:
NAME TITLE DATE
By: /s/G. Andrew Bonnewell
G. Andrew Bonnewell Attorney In Fact July 27, 1994
ASSISTANT SECRETARY For the Persons
Listed Below
NAME TITLE
John F. Donahue* Chairman and Trustee
(Chief Executive Officer)
Glen R. Johnson* President
Edward C. Gonzales* Vice President and Treasurer
(Principal Financial and
Accounting Officer)
John T. Conroy, Jr.* Trustee
William J. Copeland* Trustee
James E. Dowd* Trustee
Lawrence D. Ellis, M.D.* Trustee
Edward L. Flaherty, Jr.* Trustee
Peter E. Madden* Trustee
Gregor F. Meyer* Trustee
Wesley W. Posvar* Trustee
Marjorie P. Smuts* Trustee
* By Power of Attorney
Exhibit 11 under Form N-1A
Exhibit 23 under Item 601/Reg S-K
ARTHUR ANDERSEN & CO.
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
use in Post-Effective Amendment No. 20 to Form N-1A
Registration Statement of the Intermediate Municipal Trust of
our report dated July 11, 1994, on the financial statements of
Intermediate Municipal Trust, Ohio Intermediate Municipal
Trust, and Pennsylvania Intermediate Municipal Trust (the
three portfolios comprising the Intermediate Municipal Trust),
included in or made a part of this registration statement.
By: ARTHUR ANDERSEN & CO.
ARTHUR ANDERSEN & CO.
Pittsburgh, Pennsylvania,
July 25, 1994
Exhibit 18 under Form N-1A
Exhibit 99 under Item 601/Reg.S-K
HOUSTON, HOUSTON & DONNELLY
ATTORNEYS AT LAW
2510 CENTRE CITY TOWER
WILLIAM McC. HOUSTONPITTSBURGH, PA. 15222
FRED CHALMERS HOUSTON, JR.__________
THOMAS J. DONNELLY
JOHN F. MECK (412) 471-5828 FRED CHALMERS HOUSTON
FAX (412) 471-0736 (1914 - 1971)
MARIO SANTILLI, JR.
THEODORE M. HAMMER
July 20, 1994
Intermediate Municipal Trust
Federated Investors Tower
Pittsburgh, PA 15222-3779
Gentlemen:
As counsel to Intermediate Municipal Trust ("Trust") we have
reviewed Post-effective Amendment No. 20 to the Trust's
Registration Statement to be filed with the Securities and
Exchange Commission under the Securities Act of 1933 (File No. 2-
98237). The subject Post-effective Amendment will be filed
pursuant to Paragraph (b) of Rule 485 and become effective
pursuant to said Rule on July 31, 1994.
Our review also included an examination of other relevant
portions of the amended 1933 Act Registration Statement of the
Trust and such other documents and records deemed appropriate.
On the basis of this review we are of the opinion that Post-
effective Amendment No. 20 does not contain disclosures which
would render it ineligible to become effective pursuant to
Paragraph (b) of Rule 485.
We hereby consent to the filing of this representation
letter as a part of the Trust's Registration Statement filed with
the Securities and Exchange Commission under the Securities Act
of 1933 and as part of any application or registration statement
filed under the Securities Laws of the States of the United
States.
Very truly yours,
Houston, Houston & Donnelly
By: Thomas J. Donnelly
TJD:smg
Exhibit 5(i) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
INTERMEDIATE MUNICIPAL TRUST
INVESTMENT ADVISORY CONTRACT
This Contract is made this 18th day of November, 1993,
between FEDERATED MANAGEMENT, a Delaware business trust, having
its principal place of business in Pittsburgh, Pennsylvania (the
"Adviser"), and INTERMEDIATE MUNICIPAL 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 Trust and the Funds are hereby expressly put on
notice of the limitation of liability as set forth in the
Declaration of Trust of the Adviser and agree that the
obligations assumed by the Adviser pursuant to this Contract
shall be limited in any case to the Adviser and its assets and,
except to the extent expressly permitted by the Investment
Company Act of 1940, as amended, the Trust and the Funds shall
not seek satisfaction of any such obligation from the
shareholders of the Adviser, the Trustees, officers, employees,
or agents of the Adviser, or any of them.
14. The parties hereto acknowledge that Federated
Investors, has reserved the right to grant the non-exclusive use
of the name "INTERMEDIATE MUNICIPAL TRUST" 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 "INTERMEDIATE MUNICIPAL TRUST".
The name "INTERMEDIATE MUNICIPAL TRUST" 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.
16. This Contract shall be construed in accordance with
and governed by the laws of the Commonwealth of Pennsylvania.
17. This Contract will become binding on the parties
hereto upon their execution of the attached exhibits to this
Contract.
Exhibit 5(i)(a) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
EXHIBIT A
to the
Investment Advisory Contract
Ohio Intermediate Municipal Trust
Pennsylvania Intermediate Municipal Trust
For all services rendered by Adviser hereunder, the above-
named Funds 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 .50 of 1%
of the average daily net assets of the Funds.
The portion of the fee based upon the average daily net
assets of the Funds shall be accrued daily at the rate of
1/365th of .50 of 1% applied to the daily net assets of the
Funds.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this 18th day of November,
1993.
Attest:
FEDERATED MANAGEMENT
/s/ John W. McGonigle By:/s/ William D. Dawson
Secretary Senior Vice President
Attest:
INTERMEDIATE MUNICIPAL TRUST
/s/ G. Andrew Bonnewell By:/s/ J. Christopher
Donahue
Assistant Secretary
Vice President
Exhibit 6(i) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
FEDERATED INTERMEDIATE MUNICIPAL TRUST
DISTRIBUTOR'S CONTRACT
AGREEMENT made this 1st day of June, 1993, by and
between FEDERATED INTERMEDIATE MUNICIPAL 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 exhibit 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 Article XI of
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 6(ii) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
Exhibit A
to the
Distributor's Contract
FEDERATED INTERMEDIATE MUNICIPAL TRUST
Federated Intermediate Municipal Trust
Institutional Service Shares
The following provisions are hereby incorporated and
made part of the Distributor's Contract dated the 1st day of
June, 1993, between FEDERATED INTERMEDIATE MUNICIPAL TRUST
and Federated Securities Corp. with respect to Classes of
the Funds 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 Classes ("Shares"). Pursuant to
this appointment, FSC is authorized to select a group of
brokers ("Brokers") to sell Shares at the current offering
price thereof as described and set forth in the respective
prospectuses of the Trust, and to render administrative
support services to the Trust and its shareholders. In
addition, FSC is authorized to select a group of
administrators ("Administrators") to render administrative
support services to the Trust and its shareholders.
2. Administrative support services may include, but
are not limited to, the following functions: 1) account
openings: the Broker or Administrator communicates account
openings via computer terminals located on the Broker's or
Administrator's premises; 2) account closings: the Broker
or Administrator communicates account closings via computer
terminals; 3) enter purchase transactions: purchase
transactions are entered through the Broker's or
Administrator's own personal computer or through the use of
a toll-free telephone number; 4) enter redemption
transactions: Broker or Administrator enters redemption
transactions in the same manner as purchases; 5) account
maintenance: Broker or Administrator provides or arranges
to provide accounting support for all transactions. Broker
or Administrator also wires funds and receives funds for
Trust share purchases and redemptions, confirms and
reconciles all transactions, reviews the activity in the
Trust's accounts, and provides training and supervision of
its personnel; 6) interest posting: Broker or Administrator
posts and reinvests dividends to the Trust's accounts; 7)
prospectus and shareholder reports: Broker or Administrator
maintains and distributes current copies of prospectuses and
shareholder reports; 8) advertisements: the Broker or
Administrator continuously advertises the availability of
its services and products; 9) customer lists: the Broker or
Administrator continuously provides names of potential
customers; 10) design services: the Broker or Administrator
continuously designs material to send to customers and
develops methods of making such materials accessible to
customers; and 11) consultation services: the Broker or
Administrator continuously provides information about the
product needs of customers.
3. 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 0.25 of the average
aggregate net asset value of the Institutional Service
Shares of the FEDERATED INTERMEDIATE MUNICIPAL TRUST 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.
4. FSC may from time-to-time and for such
periods as it deems appropriate reduce its compensation to
the extent any Classes' expenses exceed such lower expense
limitation as FSC may, by notice to the Trust, voluntarily
declare to be effective.
5. 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 Brokers and Administrators 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.
6. FSC will prepare reports to the Board of
Trustees of the Trust on a quarterly basis showing amounts
expended hereunder including amounts paid to Brokers and
Administrators and the purpose for such payments.
In consideration of the mutual covenants set forth in
the Distributor's Contract dated June 1, 1993 between
FEDERATED INTERMEDIATE MUNICIPAL TRUST and Federated
Securities Corp., FEDERATED INTERMEDIATE MUNICIPAL TRUST
executes and delivers this Exhibit on behalf of the Funds,
and with respect to the separate Classes of Shares thereof,
first set forth in this Exhibit.
Witness the due execution hereof this 1st day of June,
1993.
ATTEST: FEDERATED INTERMEDIATE
MUNICIPAL TRUST
By:
Secretary
President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
By:
Secretary Executive Vice
President
(SEAL)
Exhibit 6(iii) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
Exhibit B
to the
Distributor's Contract
FEDERATED INTERMEDIATE MUNICIPAL TRUST
Federated Intermediate Municipal Trust
Institutional Shares
In consideration of the mutual covenants set forth in
the Distributor's Contract dated June 1, 1993 between
FEDERATED INTERMEDIATE MUNICIPAL TRUST and Federated
Securities Corp., FEDERATED INTERMEDIATE MUNICIPAL TRUST
executes and delivers this Exhibit on behalf of the Funds,
and with respect to the separate Classes of Shares thereof,
first set forth in this Exhibit.
Witness the due execution hereof this 1st day of June,
1993.
ATTEST: FEDERATED INTERMEDIATE
MUNICIPAL TRUST
By:
Secretary
President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
By:
Secretary Executive Vice
President
(SEAL)
Exhibit 6(iv) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
Exhibit C
to the
Distributor's Contract
INTERMEDIATE MUNICIPAL TRUST
Ohio Intermediate Municipal Trust
In consideration of the mutual covenants set forth in
the Distributor's Contract dated June 1, 1993 between
FEDERATED INTERMEDIATE MUNICIPAL TRUST and Federated
Securities Corp., INTERMEDIATE MUNICIPAL TRUST executes and
delivers this Exhibit on behalf of the Funds, and with
respect to the separate Classes of Shares thereof, first set
forth in this Exhibit.
Witness the due execution hereof this 25th day of
August, 1993.
ATTEST: INTERMEDIATE MUNICIPAL TRUST
By:
Secretary
President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
By:
Secretary Executive Vice
President
(SEAL)
Exhibit 6(v) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
Exhibit D
to the
Distributor's Contract
INTERMEDIATE MUNICIPAL TRUST
Pennsylvania Intermediate Municipal Trust
In consideration of the mutual covenants set forth in
the Distributor's Contract dated June 1, 1993 between
FEDERATED INTERMEDIATE MUNICIPAL TRUST and Federated
Securities Corp., INTERMEDIATE MUNICIPAL TRUST executes and
delivers this Exhibit on behalf of the Funds, and with
respect to the separate Classes of Shares thereof, first set
forth in this Exhibit.
Witness the due execution hereof this 25th day of
August, 1993.
ATTEST: INTERMEDIATE MUNICIPAL TRUST
By:
Secretary
President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
By:
Secretary Executive Vice
President
(SEAL)
Exhibit 8 under Form N-1A
Exhibit 10
under Item 601/Reg. S-K
CUSTODIAN CONTRACT
Between
FEDERATED INVESTMENT COMPANIES
and
STATE STREET BANK AND TRUST COMPANY
and
FEDERATED SERVICES COMPANY
TABLE OF CONTENTS
Page
1. Employment of Custodian and Property to be Held by It1
2. Duties of the Custodian With Respect to Property
of the Funds Held by the Custodian 2
2.1 Holding Securities
2
2.2 Delivery of Securities
2
2.3 Registration of Securities
5
2.4 Bank Accounts
6
2.5 Payments for Shares
7
2.6 Availability of Federal Funds
7
2.7 Collection of Income
7
2.8 Payment of Fund Moneys
8
2.9 Liability for Payment in Advance of
Receipt of Securities Purchased.
9
2.10 Payments for Repurchases or Redemptions
of Shares of a Fund
9
2.11 Appointment of Agents
10
2.12 Deposit of Fund Assets in Securities System
10
2.13 Segregated Account
12
2.14 Joint Repurchase Agreements
13
2.15 Ownership Certificates for Tax Purposes
13
2.16 Proxies
13
2.17Communications Relating to Fund Portfolio Securitie
s 13
2.18 Proper Instructions
14
2.19 Actions Permitted Without Express Authority
14
2.20 Evidence of Authority
15
2.21Notice to Trust by Custodian Regarding Cash Movemen
t. 15
3. Duties of Custodian With Respect to the Books of Account
and Calculation of Net Asset Value and Net Income 15
4. Records
16
5. Opinion of Funds' Independent Public Accountants/Auditors
16
6.Reports to Trust by Independent Public Accountants/Auditor
s 17
7. Compensation of Custodian
17
8. Responsibility of Custodian
17
9. Effective Period, Termination and Amendment
19
10. Successor Custodian
20
11. Interpretive and Additional Provisions
21
12. Massachusetts Law to Apply
22
13. Notices
22
14. Counterparts
22
15. Limitations of Liability
22
CUSTODIAN CONTRACT
This Contract between those INVESTMENT COMPANIES listed on
Exhibit 1, as it may be amended from time to time, (the
"Trust"), which may be Massachusetts business trusts or
Maryland corporations or have such other form of
organization as may be indicated, on behalf of the
portfolios (hereinafter collectively called the "Funds" and
individually referred to as a "Fund") of the Trust, having
its principal place of business at Federated Investors
Tower, Pittsburgh, Pennsylvania, 15222-3779, and STATE
STREET BANK AND TRUST COMPANY, a Massachusetts trust
company, having its principal place of business at 225
Franklin Street, Boston, Massachusetts, 02110, hereinafter
called the "Custodian", and FEDERATED SERVICES COMPANY, a
Delaware Business trust company, having its principal place
of business at Federated Investors Tower, Pittsburgh,
Pennsylvania, 15222-3779, hereinafter called ("Company").
WITNESSETH: That in consideration of the mutual covenants a
nd agreements hereinafter contained, the parties hereto
agree as follows:
1. Employment of Custodian and Property to be Held by It
The Trust hereby employs the Custodian as the custodian
of the assets of each of the Funds of the Trust. Except
as otherwise expressly provided herein, the securities
and other assets of each of the Funds shall be segregated
from the assets of each of the other Funds and from all
other persons and entities. The Trust will deliver to
the Custodian all securities and cash owned by the Funds
and all payments of income, payments of principal or
capital distributions received by them with respect to
all securities owned by the Funds from time to time, and
the cash consideration received by them for shares
("Shares") of beneficial interest/capital stock of the
Funds as may be issued or sold from time to time. The
Custodian shall not be responsible for any property of
the Funds held or received by the Funds and not delivered
to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning
of Section 2.18), the Custodian shall from time to time
employ one or more sub-custodians upon the terms
specified in the Proper Instructions, provided that the
Custodian shall have no more or less responsibility or
liability to the Trust or any of the Funds on account of
any actions or omissions of any sub-custodian so employed
than any such sub-custodian has to the Custodian.
2.Duties of the Custodian With Respect to Property of the Fu
nds Held by the Custodian
2.1Holding Securities. The Custodian shall hold and phys
ically segregate for the account of each Fund all non-
cash property, including all securities owned by each
Fund, other than securities which are maintained
pursuant to Section 2.12 in a clearing agency which
acts as a securities depository or in a book-entry
system authorized by the U.S. Department of the
Treasury, collectively referred to herein as
"Securities System", or securities which are subject
to a joint repurchase agreement with affiliated funds
pursuant to Section 2.14. The Custodian shall
maintain records of all receipts, deliveries and
locations of such securities, together with a current
inventory thereof, and shall conduct periodic
physical inspections of certificates representing
stocks, bonds and other securities held by it under
this Contract in such manner as the Custodian shall
determine from time to time to be advisable in order
to verify the accuracy of such inventory. With
respect to securities held by any agent appointed
pursuant to Section 2.11 hereof, and with respect to
securities held by any sub-custodian appointed
pursuant to Section 1 hereof, the Custodian may rely
upon certificates from such agent as to the holdings
of such agent and from such sub-custodian as to the
holdings of such sub-custodian, it being understood
that such reliance in no way relieves the Custodian
of its responsibilities under this Contract. The
Custodian will promptly report to the Trust the
results of such inspections, indicating any shortages
or discrepancies uncovered thereby, and take
appropriate action to remedy any such shortages or
discrepancies.
2.2Delivery of Securities. The Custodian shall release a
nd deliver securities owned by a Fund held by the
Custodian or in a Securities System account of the
Custodian only upon receipt of Proper Instructions,
which may be continuing instructions when deemed
appropriate by the parties, and only in the following
cases:
(1)Upon sale of such securities for the account of a
Fund and receipt of payment therefor;
(2)Upon the receipt of payment in connection with any
repurchase agreement related to such securities
entered into by the Trust;
(3)In the case of a sale effected through a Securitie
s System, in accordance with the provisions of
Section 2.12 hereof;
(4)To the depository agent in connection with tender
or other similar offers for portfolio securities
of a Fund, in accordance with the provisions of
Section 2.17 hereof;
(5)To the issuer thereof or its agent when such secur
ities are called, redeemed, retired or otherwise
become payable; provided that, in any such case,
the cash or other consideration is to be
delivered to the Custodian;
(6)To the issuer thereof, or its agent, for transfer
into the name of a Fund or into the name of any
nominee or nominees of the Custodian or into the
name or nominee name of any agent appointed
pursuant to Section 2.11 or into the name or
nominee name of any sub-custodian appointed
pursuant to Section 1; or for exchange for a
different number of bonds, certificates or other
evidence representing the same aggregate face
amount or number of units; provided that, in any
such case, the new securities are to be delivered
to the Custodian;
(7)Upon the sale of such securities for the account o
f a Fund, to the broker or its clearing agent,
against a receipt, for examination in accordance
with "street delivery custom"; provided that in
any such case, the Custodian shall have no
responsibility or liability for any loss arising
from the delivery of such securities prior to
receiving payment for such securities except as
may arise from the Custodian's own failure to act
in accordance with the standard of reasonable
care or any higher standard of care imposed upon
the Custodian by any applicable law or regulation
if such above-stated standard of reasonable care
were not part of this Contract;
(8)For exchange or conversion pursuant to any plan of
merger, consolidation, recapitalization,
reorganization or readjustment of the securities
of the issuer of such securities, or pursuant to
provisions for conversion contained in such
securities, or pursuant to any deposit agreement;
provided that, in any such case, the new
securities and cash, if any, are to be delivered
to the Custodian;
(9)In the case of warrants, rights or similar securit
ies, the surrender thereof in the exercise of
such warrants, rights or similar securities or
the surrender of interim receipts or temporary
securities for definitive securities; provided
that, in any such case, the new securities and
cash, if any, are to be delivered to the
Custodian;
(10)For delivery in connection with any loans of port
folio securities of a Fund, but only against
receipt of adequate collateral in the form of (a)
cash, in an amount specified by the Trust, (b)
certificated securities of a description
specified by the Trust, registered in the name of
the Fund or in the name of a nominee of the
Custodian referred to in Section 2.3 hereof or in
proper form for transfer, or (c) securities of a
description specified by the Trust, transferred
through a Securities System in accordance with
Section 2.12 hereof;
(11)For delivery as security in connection with any b
orrowings requiring a pledge of assets by a Fund,
but only against receipt of amounts borrowed,
except that in cases where additional collateral
is required to secure a borrowing already made,
further securities may be released for the
purpose;
(12)For delivery in accordance with the provisions of
any agreement among the Trust or a Fund, the
Custodian and a broker-dealer registered under
the Securities Exchange Act of 1934, as amended,
(the "Exchange Act") and a member of The National
Association of Securities Dealers, Inc. ("NASD"),
relating to compliance with the rules of The
Options Clearing Corporation and of any
registered national securities exchange, or of
any similar organization or organizations,
regarding escrow or other arrangements in
connection with transactions for a Fund;
(13)For delivery in accordance with the provisions of
any agreement among the Trust or a Fund, the
Custodian, and a Futures Commission Merchant
registered under the Commodity Exchange Act,
relating to compliance with the rules of the
Commodity Futures Trading Commission and/or any
Contract Market, or any similar organization or
organizations, regarding account deposits in
connection with transaction for a Fund;
(14)Upon receipt of instructions from the transfer ag
ent ("Transfer Agent") for a Fund, for delivery
to such Transfer Agent or to the holders of
shares in connection with distributions in kind,
in satisfaction of requests by holders of Shares
for repurchase or redemption; and
(15)For any other proper corporate purpose, but only
upon receipt of, in addition to Proper
Instructions, a certified copy of a resolution of
the Executive Committee of the Trust on behalf of
a Fund signed by an officer of the Trust and
certified by its Secretary or an Assistant
Secretary, specifying the securities to be
delivered, setting forth the purpose for which
such delivery is to be made, declaring such
purpose to be a proper corporate purpose, and
naming the person or persons to whom delivery of
such securities shall be made.
2.3 Registration of Securities. Securities held by the C
ustodian (other than bearer securities) shall be
registered in the name of a particular Fund or in the
name of any nominee of the Fund or of any nominee of
the Custodian which nominee shall be assigned
exclusively to the Fund, unless the Trust has
authorized in writing the appointment of a nominee to
be used in common with other registered investment
companies affiliated with the Fund, or in the name or
nominee name of any agent appointed pursuant to
Section 2.11 or in the name or nominee name of any
sub-custodian appointed pursuant to Section 1. All
securities accepted by the Custodian on behalf of a
Fund under the terms of this Contract shall be in
"street name" or other good delivery form.
2.4 Bank Accounts. The Custodian shall open and maintain
a separate bank account or accounts in the name of
each Fund, subject only to draft or order by the
Custodian acting pursuant to the terms of this
Contract, and shall hold in such account or accounts,
subject to the provisions hereof, all cash received
by it from or for the account of each Fund, other
than cash maintained in a joint repurchase account
with other affiliated funds pursuant to Section 2.14
of this Contract or by a particular Fund in a bank
account established and used in accordance with
Rule 17f-3 under the Investment Company Act of 1940,
as amended, (the "1940 Act"). Funds held by the
Custodian for a Fund may be deposited by it to its
credit as Custodian in the Banking Department of the
Custodian or in such other banks or trust companies
as it may in its discretion deem necessary or
desirable; provided, however, that every such bank or
trust company shall be qualified to act as a
custodian under the 1940 Act and that each such bank
or trust company and the funds to be deposited with
each such bank or trust company shall be approved by
vote of a majority of the Board of Trustees/Directors
("Board") of the Trust. Such funds shall be
deposited by the Custodian in its capacity as
Custodian for the Fund and shall be withdrawable by
the Custodian only in that capacity. If requested by
the Trust, the Custodian shall furnish the Trust, not
later than twenty (20) days after the last business
day of each month, an internal reconciliation of the
closing balance as of that day in all accounts
described in this section to the balance shown on the
daily cash report for that day rendered to the Trust.
2.5Payments for Shares. The Custodian shall make such ar
rangements with the Transfer Agent of each Fund, as
will enable the Custodian to receive the cash
consideration due to each Fund and will deposit into
each Fund's account such payments as are received
from the Transfer Agent. The Custodian will provide
timely notification to the Trust and the Transfer
Agent of any receipt by it of payments for Shares of
the respective Fund.
2.6Availability of Federal Funds. Upon mutual agreement
between the Trust and the Custodian, the Custodian
shall make federal funds available to the Funds as of
specified times agreed upon from time to time by the
Trust and the Custodian in the amount of checks,
clearing house funds, and other non-federal funds
received in payment for Shares of the Funds which are
deposited into the Funds' accounts.
2.7 Collection of Income.
(1)The Custodian shall collect on a timely basis all
income and other payments with respect to
registered securities held hereunder to which
each Fund shall be entitled either by law or
pursuant to custom in the securities business,
and shall collect on a timely basis all income
and other payments with respect to bearer
securities if, on the date of payment by the
issuer, such securities are held by the Custodian
or its agent thereof and shall credit such
income, as collected, to each Fund's custodian
account. Without limiting the generality of the
foregoing, the Custodian shall detach and present
for payment all coupons and other income items
requiring presentation as and when they become
due and shall collect interest when due on
securities held hereunder. The collection of
income due the Funds on securities loaned
pursuant to the provisions of Section 2.2 (10)
shall be the responsibility of the Trust. The
Custodian will have no duty or responsibility in
connection therewith, other than to provide the
Trust with such information or data as may be
necessary to assist the Trust in arranging for
the timely delivery to the Custodian of the
income to which each Fund is properly entitled.
(2)The Custodian shall promptly notify the Trust when
ever income due on securities is not collected in
due course and will provide the Trust with
monthly reports of the status of past due income
unless the parties otherwise agree.
2.8Payment of Fund Moneys. Upon receipt of Proper Instru
ctions, which may be continuing instructions when
deemed appropriate by the parties, the Custodian
shall pay out moneys of each Fund in the following
cases only:
(1)Upon the purchase of securities, futures contracts
or options on futures contracts for the account
of a Fund but only (a) against the delivery of
such securities, or evidence of title to futures
contracts, to the Custodian (or any bank, banking
firm or trust company doing business in the
United States or abroad which is qualified under
the 1940 Act to act as a custodian and has been
designated by the Custodian as its agent for this
purpose) registered in the name of the Fund or in
the name of a nominee of the Custodian referred
to in Section 2.3 hereof or in proper form for
transfer, (b) in the case of a purchase effected
through a Securities System, in accordance with
the conditions set forth in Section 2.12 hereof
or (c) in the case of repurchase agreements
entered into between the Trust and any other
party, (i) against delivery of the securities
either in certificate form or through an entry
crediting the Custodian's account at the Federal
Reserve Bank with such securities or (ii) against
delivery of the receipt evidencing purchase for
the account of the Fund of securities owned by
the Custodian along with written evidence of the
agreement by the Custodian to repurchase such
securities from the Fund;
(2)In connection with conversion, exchange or surrend
er of securities owned by a Fund as set forth in
Section 2.2 hereof;
(3)For the redemption or repurchase of Shares of a Fu
nd issued by the Trust as set forth in Section
2.10 hereof;
(4)For the payment of any expense or liability incurr
ed by a Fund, including but not limited to the
following payments for the account of the Fund:
interest; taxes; management, accounting, transfer
agent and legal fees; and operating expenses of
the Fund, whether or not such expenses are to be
in whole or part capitalized or treated as
deferred expenses;
(5)For the payment of any dividends on Shares of a Fu
nd declared pursuant to the governing documents
of the Trust;
(6)For payment of the amount of dividends received in
respect of securities sold short;
(7)For any other proper purpose, but only upon receip
t of, in addition to Proper Instructions, a
certified copy of a resolution of the Executive
Committee of the Trust on behalf of a Fund
signed by an officer of the Trust and certified
by its Secretary or an Assistant Secretary,
specifying the amount of such payment, setting
forth the purpose for which such payment is to be
made, declaring such purpose to be a proper
purpose, and naming the person or persons to whom
such payment is to be made.
2.9Liability for Payment in Advance of Receipt of Securit
ies Purchased. In any and every case where payment
for purchase of securities for the account of a Fund
is made by the Custodian in advance of receipt of the
securities purchased, in the absence of specific
written instructions from the Trust to so pay in
advance, the Custodian shall be absolutely liable to
the Fund for such securities to the same extent as if
the securities had been received by the Custodian.
2.10Payments for Repurchases or Redemptions of Shares of
a Fund. From such funds as may be available for the
purpose of repurchasing or redeeming Shares of a
Fund, but subject to the limitations of the
Declaration of Trust/Articles of Incorporation and
any applicable votes of the Board of the Trust
pursuant thereto, the Custodian shall, upon receipt
of instructions from the Transfer Agent, make funds
available for payment to holders of shares of such
Fund who have delivered to the Transfer Agent a
request for redemption or repurchase of their shares
including without limitation through bank drafts,
automated clearinghouse facilities, or by other
means. In connection with the redemption or
repurchase of Shares of the Funds, the Custodian is
authorized upon receipt of instructions from the
Transfer Agent to wire funds to or through a
commercial bank designated by the redeeming
shareholders.
2.11Appointment of Agents. The Custodian may at any time
or times in its discretion appoint (and may at any
time remove) any other bank or trust company which is
itself qualified under the 1940 Act and any
applicable state law or regulation, to act as a
custodian, as its agent to carry out such of the
provisions of this Section 2 as the Custodian may
from time to time direct; provided, however, that the
appointment of any agent shall not relieve the
Custodian of its responsibilities or liabilities
hereunder.
2.12Deposit of Fund Assets in Securities System. The Cus
todian may deposit and/or maintain securities owned
by the Funds in a clearing agency registered with the
Securities and Exchange Commission ("SEC") under
Section 17A of the Exchange Act, which acts as a
securities depository, or in the book-entry system
authorized by the U.S. Department of the Treasury and
certain federal agencies, collectively referred to
herein as "Securities System" in accordance with
applicable Federal Reserve Board and SEC rules and
regulations, if any, and subject to the following
provisions:
(1)The Custodian may keep securities of each Fund in a Securities System
provided that such securities are represented in an account
("Account")
of the Custodian in the Securities System which shall not include any
assets of the Custodian other than assets held as a fiduciary,
custodian or otherwise for customers;
(2)The records of the Custodian with respect to securities of the Funds
which are maintained in a Securities System shall identify by book-
entry those securities belonging to each Fund;
(3)The Custodian shall pay for securities purchased for the account of
each
Fund upon (i) receipt of advice from the Securities System that such
securities have been transferred to the Account, and (ii) the
making of
an entry on the records of the Custodian to reflect such payment and
transfer for the account of the Fund. The Custodian shall transfer
securities sold for the account of a Fund upon (i) receipt of advice
from the Securities System that payment for such securities has been
transferred to the Account, and (ii) the making of an entry on the
records of the Custodian to reflect such transfer and payment for the
account of the Fund. Copies of all advices from the Securities
System
of transfers of securities for the account of a Fund shall identify
the
Fund, be maintained for the Fund by the Custodian and be provided to
the Trust at its request. Upon request, the Custodian shall furnish
the Trust confirmation of each transfer to or from the account of a
Fund in the form of a written advice or notice and shall furnish to
the
Trust copies of daily transaction sheets reflecting each day's
transactions in the Securities System for the account of a Fund.
(4)The Custodian shall provide the Trust with any report obtained by the
Custodian on the Securities System's accounting system, internal
accounting control and procedures for safeguarding securities
deposited
in the Securities System;
(5)The Custodian shall have received the initial certificate, required by
Section 9 hereof;
(6)Anything to the contrary in this Contract notwithstanding, the
Custodian
shall be liable to the Trust for any loss or damage to a Fund
resulting
from use of the Securities System by reason of any negligence,
misfeasance or misconduct of the Custodian or any of its agents or of
any of its or their employees or from failure of the Custodian or any
such agent to enforce effectively such rights as it may have against
the Securities System; at the election of the Trust, it shall be
entitled to be subrogated to the rights of the Custodian with respect
to any claim against the Securities System or any other person which
the Custodian may have as a consequence of any such loss or damage if
and to the extent that a Fund has not been made whole for any such
loss
or damage.
(7)The authorization contained in this Section 2.12 shall not relieve the
Custodian from using reasonable care and diligence in making use of
any
Securities System.
2.13Segregated Account. The Custodian shall upon receipt
of Proper Instructions establish and maintain a
segregated account or accounts for and on behalf of
each Fund, into which account or accounts may be
transferred cash and/or securities, including
securities maintained in an account by the Custodian
pursuant to Section 2.12 hereof, (i) in accordance
with the provisions of any agreement among the Trust,
the Custodian and a broker-dealer registered under
the Exchange Act and a member of the NASD (or any
futures commission merchant registered under the
Commodity Exchange Act), relating to compliance with
the rules of The Options Clearing Corporation and of
any registered national securities exchange (or the
Commodity Futures Trading Commission or any
registered contract market), or of any similar
organization or organizations, regarding escrow or
other arrangements in connection with transactions
for a Fund, (ii) for purpose of segregating cash or
government securities in connection with options
purchased, sold or written for a Fund or commodity
futures contracts or options thereon purchased or
sold for a Fund, (iii) for the purpose of compliance
by the Trust or a Fund with the procedures required
by any release or releases of the SEC relating to the
maintenance of segregated accounts by registered
investment companies and (iv) for other proper
corporate purposes, but only, in the case of clause
(iv), upon receipt of, in addition to Proper
Instructions, a certified copy of a resolution of the
Board or of the Executive Committee signed by an
officer of the Trust and certified by the Secretary
or an Assistant Secretary, setting forth the purpose
or purposes of such segregated account and declaring
such purposes to be proper corporate purposes.
2.14Joint Repurchase Agreements. Upon the receipt of Pro
per Instructions, the Custodian shall deposit and/or
maintain any assets of a Fund and any affiliated
funds which are subject to joint repurchase
transactions in an account established solely for
such transactions for the Fund and its affiliated
funds. For purposes of this Section 2.14,
"affiliated funds" shall include all investment
companies and their portfolios for which subsidiaries
or affiliates of Federated Investors serve as
investment advisers, distributors or administrators
in accordance with applicable exemptive orders from
the SEC. The requirements of segregation set forth
in Section 2.1 shall be deemed to be waived with
respect to such assets.
2.15Ownership Certificates for Tax Purposes. The Custodi
an shall execute ownership and other certificates and
affidavits for all federal and state tax purposes in
connection with receipt of income or other payments
with respect to securities of a Fund held by it and
in connection with transfers of securities.
2.16Proxies. The Custodian shall, with respect to the se
curities held hereunder, cause to be promptly
executed by the registered holder of such securities,
if the securities are registered otherwise than in
the name of a Fund or a nominee of a Fund, all
proxies, without indication of the manner in which
such proxies are to be voted, and shall promptly
deliver to the Trust such proxies, all proxy
soliciting materials and all notices relating to such
securities.
2.17Communications Relating to Fund Portfolio Securities.
The Custodian shall transmit promptly to the Trust
all written information (including, without
limitation, pendency of calls and maturities of
securities and expirations of rights in connection
therewith and notices of exercise of call and put
options written by the Fund and the maturity of
futures contracts purchased or sold by the Fund)
received by the Custodian from issuers of the
securities being held for the Fund. With respect to
tender or exchange offers, the Custodian shall
transmit promptly to the Trust all written
information received by the Custodian from issuers of
the securities whose tender or exchange is sought and
from the party (or his agents) making the tender or
exchange offer. If the Trust desires to take action
with respect to any tender offer, exchange offer or
any other similar transaction, the Trust shall notify
the Custodian in writing at least three business days
prior to the date on which the Custodian is to take
such action. However, the Custodian shall
nevertheless exercise its best efforts to take such
action in the event that notification is received
three business days or less prior to the date on
which action is required.
2.18Proper Instructions. Proper Instructions as used thr
oughout this Section 2 means a writing signed or
initialed by one or more person or persons as the
Board shall have from time to time authorized. Each
such writing shall set forth the specific transaction
or type of transaction involved. Oral instructions
will be deemed to be Proper Instructions if (a) the
Custodian reasonably believes them to have been given
by a person previously authorized in Proper
Instructions to give such instructions with respect
to the transaction involved, and (b) the Trust
promptly causes such oral instructions to be
confirmed in writing. Upon receipt of a certificate
of the Secretary or an Assistant Secretary as to the
authorization by the Board of the Trust accompanied
by a detailed description of procedures approved by
the Board, Proper Instructions may include
communications effected directly between electro-
mechanical or electronic devices provided that the
Board and the Custodian are satisfied that such
procedures afford adequate safeguards for a Fund's
assets.
2.19Actions Permitted Without Express Authority. The Cus
todian may in its discretion, without express
authority from the Trust:
(1)make payments to itself or others for minor expens
es of handling securities or other similar items
relating to its duties under this Contract,
provided that all such payments shall be
accounted for to the Trust in such form that it
may be allocated to the affected Fund;
(2)surrender securities in temporary form for securit
ies in definitive form;
(3)endorse for collection, in the name of a Fund, che
cks, drafts and other negotiable instruments; and
(4)in general, attend to all non-discretionary detail
s in connection with the sale, exchange,
substitution, purchase, transfer and other
dealings with the securities and property of each
Fund except as otherwise directed by the Trust.
2.20Evidence of Authority. The Custodian shall be protec
ted in acting upon any instructions, notice, request,
consent, certificate or other instrument or paper
reasonably believed by it to be genuine and to have
been properly executed on behalf of a Fund. The
Custodian may receive and accept a certified copy of
a vote of the Board of the Trust as conclusive
evidence (a) of the authority of any person to act in
accordance with such vote or (b) of any determination
of or any action by the Board pursuant to the
Declaration of Trust/Articles of Incorporation as
described in such vote, and such vote may be
considered as in full force and effect until receipt
by the Custodian of written notice to the contrary.
2.21Notice to Trust by Custodian Regarding Cash Movement.
The Custodian will provide timely notification to the
Trust of any receipt of cash, income or payments to
the Trust and the release of cash or payment by the
Trust.
3.Duties of Custodian With Respect to the Books of Account a
nd Calculation of Net Asset Value and Net Income.
The Custodian shall cooperate with and supply necessary info
rmation to the entity or entities appointed by the Board
of the Trust to keep the books of account of each Fund
and/or compute the net asset value per share of the
outstanding Shares of each Fund or, if directed in
writing to do so by the Trust, shall itself keep such
books of account and/or compute such net asset value per
share. If so directed, the Custodian shall also
calculate daily the net income of a Fund as described in
the Fund's currently effective prospectus and Statement
of Additional Information ("Prospectus") and shall advise
the Trust and the Transfer Agent daily of the total
amounts of such net income and, if instructed in writing
by an officer of the Trust to do so, shall advise the
Transfer Agent periodically of the division of such net
income among its various components. The calculations of
the net asset value per share and the daily income of a
Fund shall be made at the time or times described from
time to time in the Fund's currently effective
Prospectus.
4. Records.
The Custodian shall create and maintain all records
relating to its activities and obligations under this
Contract in such manner as will meet the obligations of
the Trust and the Funds under the 1940 Act, with
particular attention to Section 31 thereof and Rules 31a-
1 and 31a-2 thereunder, and specifically including
identified cost records used for tax purposes. All such
records shall be the property of the Trust and shall at
all times during the regular business hours of the
Custodian be open for inspection by duly authorized
officers, employees or agents of the Trust and employees
and agents of the SEC. In the event of termination of
this Contract, the Custodian will deliver all such
records to the Trust, to a successor Custodian, or to
such other person as the Trust may direct. The Custodian
shall supply daily to the Trust a tabulation of
securities owned by a Fund and held by the Custodian and
shall, when requested to do so by the Trust and for such
compensation as shall be agreed upon between the Trust
and the Custodian, include certificate numbers in such
tabulations.
5. Opinion of Funds' Independent Public
Accountants/Auditors.
The Custodian shall take all reasonable action, as the
Trust may from time to time request, to obtain from year
to year favorable opinions from each Fund's independent
public accountants/auditors with respect to its
activities hereunder in connection with the preparation
of the Fund's registration statement, periodic reports,
or any other reports to the SEC and with respect to any
other requirements of such Commission.
6. Reports to Trust by Independent Public
Accountants/Auditors.
The Custodian shall provide the Trust, at such times as
the Trust may reasonably require, with reports by
independent public accountants/auditors for each Fund on
the accounting system, internal accounting control and
procedures for safeguarding securities, futures contracts
and options on futures contracts, including securities
deposited and/or maintained in a Securities System,
relating to the services provided by the Custodian for
the Fund under this Contract; such reports shall be of
sufficient scope and in sufficient detail, as may
reasonably be required by the Trust, to provide
reasonable assurance that any material inadequacies would
be disclosed by such examination and, if there are no
such inadequacies, the reports shall so state.
7. Compensation of Custodian.
The Custodian shall be entitled to reasonable
compensation for its services and expenses as Custodian,
as agreed upon from time to time between Company and the
Custodian.
8. Responsibility of Custodian.
The Custodian shall be held to a standard of reasonable
care in carrying out the provisions of this Contract;
provided, however, that the Custodian shall be held to
any higher standard of care which would be imposed upon
the Custodian by any applicable law or regulation if such
above stated standard of reasonable care was not part of
this Contract. The Custodian shall be entitled to rely
on and may act upon advice of counsel (who may be counsel
for the Trust) on all matters, and shall be without
liability for any action reasonably taken or omitted
pursuant to such advice, provided that such action is not
in violation of applicable federal or state laws or
regulations, and is in good faith and without negligence.
Subject to the limitations set forth in Section 15
hereof, the Custodian shall be kept indemnified by the
Trust but only from the assets of the Fund involved in
the issue at hand and be without liability for any action
taken or thing done by it in carrying out the terms and
provisions of this Contract in accordance with the above
standards.
In order that the indemnification provisions contained in
this Section 8 shall apply, however, it is understood
that if in any case the Trust may be asked to indemnify
or save the Custodian harmless, the Trust shall be fully
and promptly advised of all pertinent facts concerning
the situation in question, and it is further understood
that the Custodian will use all reasonable care to
identify and notify the Trust promptly concerning any
situation which presents or appears likely to present the
probability of such a claim for indemnification. The
Trust shall have the option to defend the Custodian
against any claim which may be the subject of this
indemnification, and in the event that the Trust so
elects it will so notify the Custodian and thereupon the
Trust shall take over complete defense of the claim, and
the Custodian shall in such situation initiate no further
legal or other expenses for which it shall seek
indemnification under this Section. The Custodian shall
in no case confess any claim or make any compromise in
any case in which the Trust will be asked to indemnify
the Custodian except with the Trust's prior written
consent.
Notwithstanding the foregoing, the responsibility of the
Custodian with respect to redemptions effected by check
shall be in accordance with a separate Agreement entered
into between the Custodian and the Trust.
If the Trust requires the Custodian to take any action
with respect to securities, which action involves the
payment of money or which action may, in the reasonable
opinion of the Custodian, result in the Custodian or its
nominee assigned to a Fund being liable for the payment
of money or incurring liability of some other form, the
Custodian may request the Trust, as a prerequisite to
requiring the Custodian to take such action, to provide
indemnity to the Custodian in an amount and form
satisfactory to the Custodian.
Subject to the limitations set forth in Section 15
hereof, the Trust agrees to indemnify and hold harmless
the Custodian and its nominee from and against all taxes,
charges, expenses, assessments, claims and liabilities
(including counsel fees) (referred to herein as
authorized charges) incurred or assessed against it or
its nominee in connection with the performance of this
Contract, except such as may arise from it or its
nominee's own failure to act in accordance with the
standard of reasonable care or any higher standard of
care which would be imposed upon the Custodian by any
applicable law or regulation if such above-stated
standard of reasonable care were not part of this
Contract. To secure any authorized charges and any
advances of cash or securities made by the Custodian to
or for the benefit of a Fund for any purpose which
results in the Fund incurring an overdraft at the end of
any business day or for extraordinary or emergency
purposes during any business day, the Trust hereby grants
to the Custodian a security interest in and pledges to
the Custodian securities held for the Fund by the
Custodian, in an amount not to exceed 10 percent of the
Fund's gross assets, the specific securities to be
designated in writing from time to time by the Trust or
the Fund's investment adviser. Should the Trust fail to
make such designation, or should it instruct the
Custodian to make advances exceeding the percentage
amount set forth above and should the Custodian do so,
the Trust hereby agrees that the Custodian shall have a
security interest in all securities or other property
purchased for a Fund with the advances by the Custodian,
which securities or property shall be deemed to be
pledged to the Custodian, and the written instructions of
the Trust instructing their purchase shall be considered
the requisite description and designation of the property
so pledged for purposes of the requirements of the
Uniform Commercial Code. Should the Trust fail to cause
a Fund to repay promptly any authorized charges or
advances of cash or securities, subject to the provision
of the second paragraph of this Section 8 regarding
indemnification, the Custodian shall be entitled to use
available cash and to dispose of pledged securities and
property as is necessary to repay any such advances.
9. Effective Period, Termination and Amendment.
This Contract shall become effective as of its execution,
shall continue in full force and effect until terminated
as hereinafter provided, may be amended at any time by
mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing
delivered or mailed, postage prepaid to the other party,
such termination to take effect not sooner than sixty
(60) days after the date of such delivery or mailing;
provided, however that the Custodian shall not act under
Section 2.12 hereof in the absence of receipt of an
initial certificate of the Secretary or an Assistant
Secretary that the Board of the Trust has approved the
initial use of a particular Securities System as required
in each case by Rule 17f-4 under the 1940 Act; provided
further, however, that the Trust shall not amend or
terminate this Contract in contravention of any
applicable federal or state regulations, or any provision
of the Declaration of Trust/Articles of Incorporation,
and further provided, that the Trust may at any time by
action of its Board (i) substitute another bank or trust
company for the Custodian by giving notice as described
above to the Custodian, or (ii) immediately terminate
this Contract in the event of the appointment of a
conservator or receiver for the Custodian by the
appropriate banking regulatory agency or upon the
happening of a like event at the direction of an
appropriate regulatory agency or court of competent
jurisdiction.
Upon termination of the Contract, the Trust shall pay to
the Custodian such compensation as may be due as of the
date of such termination and shall likewise reimburse the
Custodian for its costs, expenses and disbursements.
10. Successor Custodian.
If a successor custodian shall be appointed by the Board
of the Trust, the Custodian shall, upon termination,
deliver to such successor custodian at the office of the
Custodian, duly endorsed and in the form for transfer,
all securities then held by it hereunder for each Fund
and shall transfer to separate accounts of the successor
custodian all of each Fund's securities held in a
Securities System.
If no such successor custodian shall be appointed, the
Custodian shall, in like manner, upon receipt of a
certified copy of a vote of the Board of the Trust,
deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with
such vote.
In the event that no written order designating a
successor custodian or certified copy of a vote of the
Board shall have been delivered to the Custodian on or
before the date when such termination shall become
effective, then the Custodian shall have the right to
deliver to a bank or trust company, which is a "bank" as
defined in the 1940 Act, (delete "doing business ...
Massachusetts" unless SSBT is the Custodian) doing
business in Boston, Massachusetts, of its own selection,
having an aggregate capital, surplus, and undivided
profits, as shown by its last published report, of not
less than $100,000,000, all securities, funds and other
properties held by the Custodian and all instruments held
by the Custodian relative thereto and all other property
held by it under this Contract for each Fund and to
transfer to separate accounts of such successor
custodian all of each Fund's securities held in any
Securities System. Thereafter, such bank or trust
company shall be the successor of the Custodian under
this Contract.
In the event that securities, funds and other properties
remain in the possession of the Custodian after the date
of termination hereof owing to failure of the Trust to
procure the certified copy of the vote referred to or of
the Board to appoint a successor custodian, the Custodian
shall be entitled to fair compensation for its services
during such period as the Custodian retains possession of
such securities, funds and other properties and the
provisions of this Contract relating to the duties and
obligations of the Custodian shall remain in full force
and effect.
11. Interpretive and Additional Provisions.
In connection with the operation of this Contract, the
Custodian and the Trust may from time to time agree on
such provisions interpretive of or in addition to the
provisions of this Contract as may in their joint opinion
be consistent with the general tenor of this Contract.
Any such interpretive or additional provisions shall be
in a writing signed by both parties and shall be annexed
hereto, provided that no such interpretive or additional
provisions shall contravene any applicable federal or
state regulations or any provision of the Declaration of
Trust/Articles of Incorporation. No interpretive or
additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this
Contract.
12. Massachusetts Law to Apply.
This Contract shall be construed and the provisions
thereof interpreted under and in accordance with laws of
The Commonwealth of Massachusetts.
13. Notices.
Except as otherwise specifically provided herein, Notices
and other writings delivered or mailed postage prepaid to
the Trust at Federated Investors Tower, Pittsburgh,
Pennsylvania, 15222-3779, or to the Custodian at address
for SSBT only: 225 Franklin Street, Boston,
Massachusetts, 02110, or to such other address as the
Trust or the Custodian may hereafter specify, shall be
deemed to have been properly delivered or given hereunder
to the respective address.
14. Counterparts.
This Contract may be executed simultaneously in two or
more counterparts, each of which shall be deemed an
original.
15. Limitations of Liability.
The Custodian is expressly put on notice of the
limitation of liability as set forth in Article XI of the
Declaration of Trust of those Trusts which are business
trusts and agrees that the obligations and liabilities
assumed by the Trust and any Fund pursuant to this
Contract, including, without limitation, any obligation
or liability to indemnify the Custodian pursuant to
Section 8 hereof, shall be limited in any case to the
relevant Fund and its assets and that the Custodian shall
not seek satisfaction of any such obligation from the
shareholders of the relevant Fund, from any other Fund or
its shareholders or from the Trustees, Officers,
employees or agents of the Trust, or any of them. In
addition, in connection with the discharge and
satisfaction of any claim made by the Custodian against
the Trust, for whatever reasons, involving more than one
Fund, the Trust shall have the exclusive right to
determine the appropriate allocations of liability for
any such claim between or among the Funds.
IN WITNESS WHEREOF, each of the parties has caused this
instrument to be executed in its name and behalf by its duly
authorized representative and its seal to be hereunder
affixed effective as of the 1st day of December, 1993.
ATTEST: INVESTMENT COMPANIES (Except those
listed below)
/s/John G. McGonigle_________ By /s/John G. Donahue_____________
John G. McGonigle John F. Donahue
Secretary Chairman
ATTEST: STATE STREET BANK AND TRUST
COMPANY
/s/ Ed McKenzie______________ By /s/ F. J. Sidoti,
Jr._________________
(Assistant) Secretary Typed Name: Frank J. Sidoti, Jr.
Typed Name: Ed McKenzie Title: Vice President
ATTEST: FEDERATED SERVICES COMPANIY
/s/ Jeannette Fisher-Garber______ By /s/ James J.
Dolan________________
Jeannette Fisher-Garber James J. Dolan
Secretary President
EXHIBIT 1
Intermediate Municipal Trust
Intermediate Municipal Trust
Institutional Service Shares
Institutional Shares
Ohio Intermediate Municipal Trust
Pennsylvania Intermediate Municipal Trust
Exhibit 9 under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
AGREEMENT
for
FUND ACCOUNTING,
SHAREHOLDER RECORDKEEPING,
and
CUSTODY SERVICES PROCUREMENT
AGREEMENT made as of the 1st day of December, 1993, by and between
those investment companies listed on Exhibit 1 as may be amended from
time to time, having their principal office and place of business at
Federated Investors Tower, Pittsburgh, PA 15222-3779 (the "Trust"), on
behalf of the portfolios (individually referred to herein as a "Fund" and
collectively as "Funds") of the Trust, and FEDERATED SERVICES COMPANY, a
Delaware business trust, having its principal office and place of
business at Federated Investors Tower, Pittsburgh, Pennsylvania 15222-
3779 (the "Company").
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended
(the "1940 Act"), with authorized and issued shares of capital stock or
beneficial interest ("Shares"); and
WHEREAS, the Trust wishes to retain the Company to provide certain
pricing, accounting and recordkeeping services for each of the Funds,
including any classes of shares issued by any Fund ("Classes"), and the
Company is willing to furnish such services; and
WHEREAS, the Trust desires to appoint the Company as its transfer
agent, dividend disbursing agent, and agent in connection with certain
other activities, and the Company desires to accept such appointment; and
WHEREAS, the Trust desires to appoint the Company as its agent to
select, negotiate and subcontract for custodian services from an approved
list of qualified banks and the Company desires to accept such
appointment; and
WHEREAS, from time to time the Trust may desire and may instruct the
Company to subcontract for the performance of certain of its duties and
responsibilities hereunder to State Street Bank and Trust Company or
another agent (the "Agent"); and
WHEREAS, the words Trust and Fund may be used interchangeably for
those investment companies consisting of only one portfolio;
NOW THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties
hereto agree as follows:
SECTION ONE: Fund Accounting.
Article 1. Appointment.
The Trust hereby appoints the Company to provide certain pricing and
accounting services to the Funds, and/or the Classes, for the period and
on the terms set forth in this Agreement. The Company accepts such
appointment and agrees to furnish the services herein set forth in return
for the compensation as provided in Article 3 of this Section.
Article 2. The Company and Duties.
Subject to the supervision and control of the Trust's Board of
Trustees or Directors ("Board"), the Company will assist the Trust with
regard to fund accounting for the Trust, and/or the Funds, and/or the
Classes, and in connection therewith undertakes to perform the following
specific services;
A. Value the assets of the Funds and determine the net asset value per
share of each Fund and/or Class, at the time and in the manner from
time to time determined by the Board and as set forth in the
Prospectus and Statement of Additional Information ("Prospectus")
of each Fund;
B. Calculate the net income of each of the Funds, if any;
C. Calculate capital gains or losses of each of the Funds resulting
from sale or disposition of assets, if any;
D. Maintain the general ledger and other accounts, books and financial
records of the Trust, including for each Fund, and/or Class, as
required under Section 31(a) of the 1940 Act and the Rules
thereunder in connection with the services provided by the Company;
E. Preserve for the periods prescribed by Rule 31a-2 under the 1940
Act the records to be maintained by Rule 31a-1 under the 1940 Act
in connection with the services provided by the Company. The
Company further agrees that all such records it maintains for the
Trust are the property of the Trust and further agrees to surrender
promptly to the Trust such records upon the Trust's request;
F. At the request of the Trust, prepare various reports or other
financial documents required by federal, state and other applicable
laws and regulations; and
G. Such other similar services as may be reasonably requested by the
Trust.
Article 3. Compensation and Allocation of Expenses.
A. The Funds will compensate the Company for its services rendered
pursuant to Section One of this Agreement in accordance with the
fees set forth on Fee Schedules A ("A1, A2, A3 etc..."), annexed
hereto and incorporated herein, as may be added or amended from
time to time. Such fees do not include out-of-pocket disbursements
of the Company for which the Funds shall reimburse the Company upon
receipt of a separate invoice. Out-of-pocket disbursements shall
include, but shall not be limited to, the items specified in
Schedules B ("B1, B2, B3, etc..."), annexed hereto and incorporated
herein, as may be added or amended from time to time. Schedules B
may be modified by the Company upon not less than thirty days'
prior written notice to the Trust.
B. The Fund and/or the Class, and not the Company, shall bear the cost
of: custodial expenses; membership dues in the Investment Company
Institute or any similar organization; transfer agency expenses;
investment advisory expenses; costs of printing and mailing stock
certificates, Prospectuses, reports and notices; administrative
expenses; interest on borrowed money; brokerage commissions; taxes
and fees payable to federal, state and other governmental agencies;
fees of Trustees or Directors of the Trust; independent auditors
expenses; Federated Administrative Services and/or Federated
Administrative Services, Inc. legal and audit department expenses
billed to Federated Services Company for work performed related to
the Trust, the Funds, or the Classes; law firm expenses; or other
expenses not specified in this Article 3 which may be properly
payable by the Funds and/or classes.
C. The Company will send an invoice to each of the Funds as soon as
practicable after the end of each month. Each invoice will provide
detailed information about the compensation and out-of-pocket
expenses in accordance with Schedules A and Schedules B. The Funds
and or the Classes will pay to the Company the amount of such
invoice within 30 days of receipt of the invoices.
D. Any compensation agreed to hereunder may be adjusted from time to
time by attaching to Schedules A revised Schedules dated and signed
by a duly authorized officer of the Trust and/or the Funds and a
duly authorized officer of the Company.
E. The fee for the period from the effective date of this Agreement
with respect to a Fund or a Class to the end of the initial month
shall be prorated according to the proportion that such period
bears to the full month period. Upon any termination of this
Agreement before the end of any month, the fee for such period
shall be prorated according to the proportion which such period
bears to the full month period. For purposes of determining fees
payable to the Company, the value of the Fund's net assets shall be
computed at the time and in the manner specified in the Fund's
Prospectus.
F. The Company, in its sole discretion, may from time to time
subcontract to, employ or associate with itself such person or
persons as the Company may believe to be particularly suited to
assist it in performing services under this Section One. Such
person or persons may be third-party service providers, or they may
be officers and employees who are employed by both the Company and
the Funds. The compensation of such person or persons shall be
paid by the Company and no obligation shall be incurred on behalf
of the Trust, the Funds, or the Classes in such respect.
SECTION TWO: Shareholder Recordkeeping.
Article 4. Terms of Appointment.
Subject to the terms and conditions set forth in this Agreement, the
Trust hereby appoints the Company to act as, and the Company agrees to
act as, transfer agent and dividend disbursing agent for each Fund's
Shares, and agent in connection with any accumulation, open-account or
similar plans provided to the shareholders of any Fund
("Shareholder(s)"), including without limitation any periodic investment
plan or periodic withdrawal program.
As used throughout this Agreement, a "Proper Instruction" means a
writing signed or initialed by one or more person or persons as the Board
shall have from time to time authorized. Each such writing shall set
forth the specific transaction or type of transaction involved. Oral
instructions will be deemed to be Proper Instructions if (a) the Company
reasonably believes them to have been given by a person previously
authorized in Proper Instructions to give such instructions with respect
to the transaction involved, and (b) the Trust, or the Fund, and the
Company promptly cause such oral instructions to be confirmed in writing.
Proper Instructions may include communications effected directly between
electro-mechanical or electronic devices provided that the Trust, or the
Fund, and the Company are satisfied that such procedures afford adequate
safeguards for the Fund's assets. Proper Instructions may only be
amended in writing.
Article 5. Duties of the Company.
The Company shall perform the following services in accordance with
Proper Instructions as may be provided from time to time by the Trust as
to any Fund:
A. Purchases
(1) The Company shall receive orders and payment for the purchase
of shares and promptly deliver payment and appropriate
documentation therefore to the custodian of the relevant Fund,
(the "Custodian"). The Company shall notify the Fund and the
Custodian on a daily basis of the total amount of orders and
payments so delivered.
(2) Pursuant to purchase orders and in accordance with the Fund's
current Prospectus, the Company shall compute and issue the
appropriate number of Shares of each Fund and/or Class and
hold such Shares in the appropriate Shareholder accounts.
(3) For certificated Funds and/or Classes, if a Shareholder or its
agent requests a certificate, the Company, as Transfer Agent,
shall countersign and mail by first class mail, a certificate
to the Shareholder at its address as set forth on the transfer
books of the Funds, and/or Classes, subject to any Proper
Instructions regarding the delivery of certificates.
(4) In the event that any check or other order for the purchase of
Shares of the Fund and/or Class is returned unpaid for any
reason, the Company shall debit the Share account of the
Shareholder by the number of Shares that had been credited to
its account upon receipt of the check or other order, promptly
mail a debit advice to the Shareholder, and notify the Fund
and/or Class of its action. In the event that the amount paid
for such Shares exceeds proceeds of the redemption of such
Shares plus the amount of any dividends paid with respect to
such Shares, the Fund and/the Class or its distributor will
reimburse the Company on the amount of such excess.
B. Distribution
(1) Upon notification by the Funds of the declaration of any
distribution to Shareholders, the Company shall act as
Dividend Disbursing Agent for the Funds in accordance with the
provisions of its governing document and the then-current
Prospectus of the Fund. The Company shall prepare and mail or
credit income, capital gain, or any other payments to
Shareholders. As the Dividend Disbursing Agent, the Company
shall, on or before the payment date of any such distribution,
notify the Custodian of the estimated amount required to pay
any portion of said distribution which is payable in cash and
request the Custodian to make available sufficient funds for
the cash amount to be paid out. The Company shall reconcile
the amounts so requested and the amounts actually received
with the Custodian on a daily basis. If a Shareholder is
entitled to receive additional Shares by virtue of any such
distribution or dividend, appropriate credits shall be made to
the Shareholder's account, for certificated Funds and/or
Classes, delivered where requested; and
(2) The Company shall maintain records of account for each Fund
and Class and advise the Trust, each Fund and Class and its
Shareholders as to the foregoing.
C. Redemptions and Transfers
(1) The Company shall receive redemption requests and redemption
directions and, if such redemption requests comply with the
procedures as may be described in the Fund Prospectus or set
forth in Proper Instructions, deliver the appropriate
instructions therefor to the Custodian. The Company shall
notify the Funds on a daily basis of the total amount of
redemption requests processed and monies paid to the Company
by the Custodian for redemptions.
(2) At the appropriate time upon receiving redemption proceeds
from the Custodian with respect to any redemption, the Company
shall pay or cause to be paid the redemption proceeds in the
manner instructed by the redeeming Shareholders, pursuant to
procedures described in the then-current Prospectus of the
Fund.
(3) If any certificate returned for redemption or other request
for redemption does not comply with the procedures for
redemption approved by the Fund, the Company shall promptly
notify the Shareholder of such fact, together with the reason
therefor, and shall effect such redemption at the price
applicable to the date and time of receipt of documents
complying with said procedures.
(4) The Company shall effect transfers of Shares by the registered
owners thereof.
(5) The Company shall identify and process abandoned accounts and
uncashed checks for state escheat requirements on an annual
basis and report such actions to the Fund.
D. Recordkeeping
(1) The Company shall record the issuance of Shares of each Fund,
and/or Class, and maintain pursuant to applicable rules of the
Securities and Exchange Commission ("SEC") a record of the
total number of Shares of the Fund and/or Class which are
authorized, based upon data provided to it by the Fund, and
issued and outstanding. The Company shall also provide the
Fund on a regular basis or upon reasonable request with the
total number of Shares which are authorized and issued and
outstanding, but shall have no obligation when recording the
issuance of Shares, except as otherwise set forth herein, to
monitor the issuance of such Shares or to take cognizance of
any laws relating to the issue or sale of such Shares, which
functions shall be the sole responsibility of the Funds.
(2) The Company shall establish and maintain records pursuant to
applicable rules of the SEC relating to the services to be
performed hereunder in the form and manner as agreed to by the
Trust or the Fund to include a record for each Shareholder's
account of the following:
(a) Name, address and tax identification number (and whether
such number has been certified);
(b) Number of Shares held;
(c) Historical information regarding the account, including
dividends paid and date and price for all transactions;
(d) Any stop or restraining order placed against the account;
(e) Information with respect to withholding in the case of a
foreign account or an account for which withholding is
required by the Internal Revenue Code;
(f) Any dividend reinvestment order, plan application,
dividend address and correspondence relating to the
current maintenance of the account;
(g) Certificate numbers and denominations for any Shareholder
holding certificates;
(h) Any information required in order for the Company to
perform the calculations contemplated or required by this
Agreement.
(3) The Company shall preserve any such records required to be
maintained pursuant to the rules of the SEC for the periods
prescribed in said rules as specifically noted below. Such
record retention shall be at the expense of the Company, and
such records may be inspected by the Fund at reasonable times.
The Company may, at its option at any time, and shall
forthwith upon the Fund's demand, turn over to the Fund and
cease to retain in the Company's files, records and documents
created and maintained by the Company pursuant to this
Agreement, which are no longer needed by the Company in
performance of its services or for its protection. If not so
turned over to the Fund, such records and documents will be
retained by the Company for six years from the year of
creation, during the first two of which such documents will be
in readily accessible form. At the end of the six year
period, such records and documents will either be turned over
to the Fund or destroyed in accordance with Proper
Instructions.
E. Confirmations/Reports
(1) The Company shall furnish to the Fund periodically the
following information:
(a) A copy of the transaction register;
(b) Dividend and reinvestment blotters;
(c) The total number of Shares issued and outstanding in each
state for "blue sky" purposes as determined according to
Proper Instructions delivered from time to time by the
Fund to the Company;
(d) Shareholder lists and statistical information;
(e) Payments to third parties relating to distribution
agreements, allocations of sales loads, redemption fees,
or other transaction- or sales-related payments;
(f) Such other information as may be agreed upon from time to
time.
(2) The Company shall prepare in the appropriate form, file with
the Internal Revenue Service and appropriate state agencies,
and, if required, mail to Shareholders, such notices for
reporting dividends and distributions paid as are required to
be so filed and mailed and shall withhold such sums as are
required to be withheld under applicable federal and state
income tax laws, rules and regulations.
(3) In addition to and not in lieu of the services set forth
above, the Company shall:
(a) Perform all of the customary services of a transfer
agent, dividend disbursing agent and, as relevant, agent
in connection with accumulation, open-account or similar
plans (including without limitation any periodic
investment plan or periodic withdrawal program),
including but not limited to: maintaining all
Shareholder accounts, mailing Shareholder reports and
Prospectuses to current Shareholders, withholding taxes
on accounts subject to back-up or other withholding
(including non-resident alien accounts), preparing and
filing reports on U.S. Treasury Department Form 1099 and
other appropriate forms required with respect to
dividends and distributions by federal authorities for
all Shareholders, preparing and mailing confirmation
forms and statements of account to Shareholders for all
purchases and redemptions of Shares and other confirmable
transactions in Shareholder accounts, preparing and
mailing activity statements for Shareholders, and
providing Shareholder account information; and
(b) provide a system which will enable the Fund to monitor
the total number of Shares of each Fund and/or Class sold
in each state ("blue sky reporting"). The Fund shall by
Proper Instructions (i) identify to the Company those
transactions and assets to be treated as exempt from the
blue sky reporting for each state and (ii) verify the
classification of transactions for each state on the
system prior to activation and thereafter monitor the
daily activity for each state. The responsibility of the
Company for each Fund's and/or Class's state blue sky
registration status is limited solely to the recording of
the initial classification of transactions or accounts
with regard to blue sky compliance and the reporting of
such transactions and accounts to the Fund as provided
above.
F. Other Duties
(1) The Company shall answer correspondence from Shareholders
relating to their Share accounts and such other correspondence
as may from time to time be addressed to the Company;
(2) The Company shall prepare Shareholder meeting lists, mail
proxy cards and other material supplied to it by the Fund in
connection with Shareholder Meetings of each Fund; receive,
examine and tabulate returned proxies, and certify the vote of
the Shareholders;
(3) The Company shall establish and maintain facilities and
procedures for safekeeping of stock certificates, check forms
and facsimile signature imprinting devices, if any; and for
the preparation or use, and for keeping account of, such
certificates, forms and devices.
Article 6. Duties of the Trust.
A. Compliance
The Trust or Fund assume full responsibility for the preparation,
contents and distribution of their own and/or their classes'
Prospectus and for complying with all applicable requirements of
the Securities Act of 1933, as amended (the "1933 Act"), the 1940
Act and any laws, rules and regulations of government authorities
having jurisdiction.
B. Share Certificates
The Trust shall supply the Company with a sufficient supply of
blank Share certificates and from time to time shall renew such
supply upon request of the Company. Such blank Share certificates
shall be properly signed, manually or by facsimile, if authorized
by the Trust and shall bear the seal of the Trust or facsimile
thereof; and notwithstanding the death, resignation or removal of
any officer of the Trust authorized to sign certificates, the
Company may continue to countersign certificates which bear the
manual or facsimile signature of such officer until otherwise
directed by the Trust.
C. Distributions
The Fund shall promptly inform the Company of the declaration of
any dividend or distribution on account of any Fund's shares.
Article 7. Compensation and Expenses.
A. Annual Fee
For performance by the Company pursuant to Section Two of this
Agreement, the Trust and/or the Fund agree to pay the Company an
annual maintenance fee for each Shareholder account as set out in
Schedules C ("C1, C2, C3 etc..."), attached hereto, as may be added
or amended from time to time. Such fees may be changed from time
to time subject to written agreement between the Trust and the
Company. Pursuant to information in the Fund Prospectus or other
information or instructions from the Fund, the Company may sub-
divide any Fund into Classes or other sub-components for
recordkeeping purposes. The Company will charge the Fund the fees
set forth on Schedule C for each such Class or sub-component the
same as if each were a Fund.
B. Reimbursements
In addition to the fee paid under Article 7A above, the Trust
and/or Fund agree to reimburse the Company for out-of-pocket
expenses or advances incurred by the Company for the items set out
in Schedules D ("D1, D2, D3 etc..."), attached hereto, as may be
added or amended from time to time. In addition, any other
expenses incurred by the Company at the request or with the consent
of the Trust and/or the Fund, will be reimbursed by the appropriate
Fund.
C. Payment
The Company shall send an invoice with respect to fees and
reimbursable expenses to the Trust or each of the Funds as soon as
practicable at the end of each month. Each invoice will provide
detailed information about the Compensation and out-of-pocket
expenses in accordance with Schedules C and Schedules D. The Trust
or the Funds will pay to the Company the amount of such invoice
within 30 days following the receipt of the invoices.
Article 8. Assignment of Shareholder Recordkeeping.
Except as provided below, no right or obligation under this Section
Two may be assigned by either party without the written consent of
the other party.
(1) This Agreement shall inure to the benefit of and be binding
upon the parties and their respective permitted successors and
assigns.
(2) The Company may without further consent on the part of the
Trust subcontract for the performance hereof with (A) State
Street Bank and its subsidiary, Boston Financial Data
Services, Inc., a Massachusetts Trust ("BFDS"), which is duly
registered as a transfer agent pursuant to Section 17A(c)(1)
of the Securities Exchange Act of 1934, as amended, or any
succeeding statute ("Section 17A(c)(1)"), or (B) a BFDS
subsidiary duly registered as a transfer agent pursuant to
Section 17A(c)(1), or (C) a BFDS affiliate, or (D) such other
provider of services duly registered as a transfer agent under
Section 17A(c)(1) as Company shall select; provided, however,
that the Company shall be as fully responsible to the Trust
for the acts and omissions of any subcontractor as it is for
its own acts and omissions; or
(3) The Company shall upon instruction from the Trust subcontract
for the performance hereof with an Agent selected by the
Trust, other than BFDS or a provider of services selected by
Company, as described in (2) above; provided, however, that
the Company shall in no way be responsible to the Trust for
the acts and omissions of the Agent.
SECTION THREE: Custody Services Procurement
Article 9. Appointment.
The Trust hereby appoints Company as its agent to evaluate and
obtain custody services from a financial institution that (i) meets
the criteria established in Section 17(f) of the 1940 Act and (ii)
has been approved by the Board as eligible for selection by the
Company as a custodian (the "Eligible Custodian"). The Company
accepts such appointment.
Article 10. The Company and Its Duties.
Subject to the review, supervision and control of the Board, the
Company shall:
(1) evaluate the nature and the quality of the custodial services
provided by the Eligible Custodian;
(2) employ the Eligible Custodian to serve on behalf of the Trust
as Custodian of the Trust's assets substantially on the terms
set forth as the form of agreement in Exhibit 2;
(3) negotiate and enter into agreements with the Custodians for
the benefit of the Trust, with the Trust as a party to each
such agreement. The Company shall not be a party to any
agreement with any such Custodian;
(4) establish procedures to monitor the nature and the quality of
the services provided by the Custodians;
(5) continuously monitor the nature and the quality of services
provided by the Custodians; and
(6) periodically provide to the Trust (i) written reports on the
activities and services of the Custodians; (ii) the nature and
amount of disbursement made on account of the Trust with
respect to each custodial agreement; and (iii) such other
information as the Board shall reasonably request to enable it
to fulfill its duties and obligations under Sections 17(f) and
36(b) of the 1940 Act and other duties and obligations
thereof.
Article 11. Fees and Expenses.
A. Annual Fee
For the performance by the Company pursuant to Section Three of
this Agreement, the Trust and/or the Fund agree to pay the Company
an annual fee as set forth in Schedule E, attached hereto.
B. Payment
The Company shall send an invoice with respect to fees and
reimbursable expenses to each of the Trust/or Fund as soon as
practicable at the end of each month. Each invoice will provide
detailed information about the Compensation and out-of-pocket
expenses in occurrence with Schedule E. The Trust and/or Fund will
pay to the Company the amount of such invoice within 30 days
following the receipt of the invoice.
Article 12. Representations.
The Company represents and warrants that it has obtained all
required approvals from all government or regulatory authorities
necessary to enter into this arrangement and to provide the
services contemplated in Section Three of this Agreement.
SECTION FOUR: General Provisions.
Article 13. Documents.
A. In connection with the appointment of the Company under this
Agreement, the Trust shall file with the Company the following
documents:
(1) A copy of the Charter and By-Laws of the Trust and all
amendments thereto;
(2) A copy of the resolution of the Board of the Trust authorizing
this Agreement;
(3) Specimens of all forms of outstanding Share certificates of
the Trust or the Funds in the forms approved by the Board of
the Trust with a certificate of the Secretary of the Trust as
to such approval;
(4) All account application forms and other documents relating to
Shareholders accounts; and
(5) A copy of the current Prospectus for each Fund.
B. The Fund will also furnish from time to time the following
documents:
(1) Each resolution of the Board of the Trust authorizing the
original issuance of each Fund's, and/or Class's Shares;
(2) Each Registration Statement filed with the SEC and amendments
thereof and orders relating thereto in effect with respect to
the sale of Shares of any Fund, and/or Class;
(3) A certified copy of each amendment to the governing document
and the By-Laws of the Trust;
(4) Certified copies of each vote of the Board authorizing
officers to give Proper Instructions to the Custodian and
agents for fund accountant, custody services procurement, and
shareholder recordkeeping or transfer agency services;
(5) Specimens of all new Share certificates representing Shares of
any Fund, accompanied by Board resolutions approving such
forms;
(6) Such other certificates, documents or opinions which the
Company may, in its discretion, deem necessary or appropriate
in the proper performance of its duties; and
(7) Revisions to the Prospectus of each Fund.
Article 14. Representations and Warranties.
A. Representations and Warranties of the Company
The Company represents and warrants to the Trust that:
(1) It is a business trust duly organized and existing and in good
standing under the laws of the State of Delaware.
(2) It is duly qualified to carry on its business in the State of
Delaware.
(3) It is empowered under applicable laws and by its charter and
by-laws to enter into and perform this Agreement.
(4) All requisite corporate proceedings have been taken to
authorize it to enter into and perform its obligations under
this Agreement.
(5) It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
(6) It is in compliance with federal securities law requirements
and in good standing as a transfer agent.
B. Representations and Warranties of the Trust
The Trust represents and warrants to the Company that:
(1) It is an investment company duly organized and existing and in
good standing under the laws of its state of organization;
(2) It is empowered under applicable laws and by its Charter and
By-Laws to enter into and perform its obligations under this
Agreement;
(3) All corporate proceedings required by said Charter and By-Laws
have been taken to authorize it to enter into and perform its
obligations under this Agreement;
(4) The Trust is an open-end investment company registered under
the 1940 Act; and
(5) A registration statement under the 1933 Act will be effective,
and appropriate state securities law filings have been made
and will continue to be made, with respect to all Shares of
each Fund being offered for sale.
Article 15. Indemnification.
A. Indemnification by Trust
The Company shall not be responsible for and the Trust or Fund
shall indemnify and hold the Company, including its officers,
directors, shareholders and their agents employees and affiliates,
harmless against any and all losses, damages, costs, charges,
counsel fees, payments, expenses and liabilities arising out of or
attributable to:
(1) The acts or omissions of any Custodian,
(2) The Trust's or Fund's refusal or failure to comply with the
terms of this Agreement, or which arise out of the Trust's or
The Fund's lack of good faith, negligence or willful
misconduct or which arise out of the breach of any
representation or warranty of the Trust or Fund hereunder or
otherwise.
(3) The reliance on or use by the Company or its agents or
subcontractors of information, records and documents in proper
form which
(a) are received by the Company or its agents or
subcontractors and furnished to it by or on behalf of the
Fund, its Shareholders or investors regarding the
purchase, redemption or transfer of Shares and
Shareholder account information; or
(b) have been prepared and/or maintained by the Fund or its
affiliates or any other person or firm on behalf of the
Trust.
(4) The reliance on, or the carrying out by the Company or its
agents or subcontractors of Proper Instructions of the Trust
or the Fund.
(5) The offer or sale of Shares in violation of any requirement
under the federal securities laws or regulations or the
securities laws or regulations of any state that such Shares
be registered in such state or in violation of any stop order
or other determination or ruling by any federal agency or any
state with respect to the offer or sale of such Shares in such
state.
Provided, however, that the Company shall not be protected by
this Article 15.A. from liability for any act or omission
resulting from the Company's willful misfeasance, bad faith,
gross negligence or reckless disregard of its duties.
B. Indemnification by the Company
The Company shall indemnify and hold the Trust or each Fund
harmless from and against any and all losses, damages, costs,
charges, counsel fees, payments, expenses and liabilities arising
out of or attributable to any action or failure or omission to act
by the Company as a result of the Company's willful misfeasance,
bad faith, gross negligence or reckless disregard of its duties.
C. Reliance
At any time the Company may apply to any officer of the Trust or
Fund for instructions, and may consult with legal counsel with
respect to any matter arising in connection with the services to be
performed by the Company under this Agreement, and the Company and
its agents or subcontractors shall not be liable and shall be
indemnified by the Trust or the appropriate Fund for any action
reasonably taken or omitted by it in reliance upon such
instructions or upon the opinion of such counsel provided such
action is not in violation of applicable federal or state laws or
regulations. The Company, its agents and subcontractors shall be
protected and indemnified in recognizing stock certificates which
are reasonably believed to bear the proper manual or facsimile
signatures of the officers of the Trust or the Fund, and the proper
countersignature of any former transfer agent or registrar, or of a
co-transfer agent or co-registrar.
D. Notification
In order that the indemnification provisions contained in this
Article 15 shall apply, upon the assertion of a claim for which
either party may be required to indemnify the other, the party
seeking indemnification shall promptly notify the other party of
such assertion, and shall keep the other party advised with respect
to all developments concerning such claim. The party who may be
required to indemnify shall have the option to participate with the
party seeking indemnification in the defense of such claim. The
party seeking indemnification shall in no case confess any claim or
make any compromise in any case in which the other party may be
required to indemnify it except with the other party's prior
written consent.
Article 16. Termination of Agreement.
This Agreement may be terminated by either party upon one hundred
twenty (120) days written notice to the other. Should the Trust
exercise its rights to terminate, all out-of-pocket expenses
associated with the movement of records and materials will be borne
by the Trust or the appropriate Fund. Additionally, the Company
reserves the right to charge for any other reasonable expenses
associated with such termination. The provisions of Article 15
shall survive the termination of this Agreement.
Article 17. Amendment.
This Agreement may be amended or modified by a written agreement
executed by both parties.
Article 18. Interpretive and Additional Provisions.
In connection with the operation of this Agreement, the Company and
the Trust may from time to time agree on such provisions
interpretive of or in addition to the provisions of this Agreement
as may in their joint opinion be consistent with the general tenor
of this Agreement. Any such interpretive or additional provisions
shall be in a writing signed by both parties and shall be annexed
hereto, provided that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any
provision of the Charter. No interpretive or additional provisions
made as provided in the preceding sentence shall be deemed to be an
amendment of this Agreement.
Article 19. Governing Law.
This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the
Commonwealth of Massachusetts
Article 20. Notices.
Except as otherwise specifically provided herein, Notices and other
writings delivered or mailed postage prepaid to the Trust at
Federated Investors Tower, Pittsburgh, Pennsylvania, 15222-3779, or
to the Company at Federated Investors Tower, Pittsburgh,
Pennsylvania, 15222-3779, or to such other address as the Trust or
the Company may hereafter specify, shall be deemed to have been
properly delivered or given hereunder to the respective address.
Article 21. Counterparts.
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original.
Article 22. Limitations of Liability of Trustees and Shareholders of
the Trust.
The execution and delivery of this Agreement have been authorized
by the Trustees of the Trust and signed by an authorized officer of
the Trust, acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officer shall be
deemed to have been made by any of them individually or to impose
any liability on any of them personally, and the obligations of
this Agreement are not binding upon any of the Trustees or
Shareholders of the Trust, but bind only the appropriate property
of the Fund, or Class, as provided in the Declaration of Trust.
Article 23. Limitations of Liability of Trustees and Shareholders of
the Company.
The execution and delivery of this Agreement have been authorized
by the Trustees of the Company and signed by an authorized officer
of the Company, acting as such, and neither such authorization by
such Trustees nor such execution and delivery by such officer shall
be deemed to have been made by any of them individually or to
impose any liability on any of them personally, and the obligations
of this Agreement are not binding upon any of the Trustees or
Shareholders of the Company, but bind only the property of the
Company as provided in the Declaration of Trust.
Article 24. Assignment.
This Agreement and the rights and duties hereunder shall not be
assignable with respect to the Trust or the Funds by either of the
parties hereto except by the specific written consent of the other
party.
Article 25. Merger of Agreement.
This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the
subject hereof whether oral or written.
Article 26. Successor Agent.
If a successor agent for the Trust shall be appointed by the Trust,
the Company shall upon termination of this Agreement deliver to
such successor agent at the office of the Company all properties of
the Trust held by it hereunder. If no such successor agent shall
be appointed, the Company shall at its office upon receipt of
Proper Instructions deliver such properties in accordance with such
instructions.
In the event that no written order designating a successor agent or
Proper Instructions shall have been delivered to the Company on or
before the date when such termination shall become effective, then
the Company shall have the right to deliver to a bank or trust
company, which is a "bank" as defined in the 1940 Act, of its own
selection, having an aggregate capital, surplus, and undivided
profits, as shown by its last published report, of not less than
$2,000,000, all properties held by the Company under this
Agreement. Thereafter, such bank or trust company shall be the
successor of the Company under this Agreement.
Article 27. Force Majeure.
The Company shall have no liability for cessation of services
hereunder or any damages resulting therefrom to the Fund as a
result of work stoppage, power or other mechanical failure, natural
disaster, governmental action, communication disruption or other
impossibility of performance.
Article 28. Assignment; Successors.
This Agreement shall not be assigned by either party without the
prior written consent of the other party, except that either party
may assign to a successor all of or a substantial portion of its
business, or to a party controlling, controlled by, or under common
control with such party. Nothing in this Article 28 shall prevent
the Company from delegating its responsibilities to another entity
to the extent provided herein.
Article 29. Severability.
In the event any provision of this Agreement is held illegal, void
or unenforceable, the balance shall remain in effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their names and on their behalf under their seals by and
through their duly authorized officers, as of the day and year first
above written.
ATTEST: INVESTMENT COMPANIES (listed on Exhibit 1)
/s/ John W. McGonigle_______ By:__/s/ John F. Donahue___
John W. McGonigle John F. Donahue
Secretary Chairman
ATTEST: FEDERATED SERVICES COMPANY
/s/ Jeannette Fisher-Garber By:_/s/ James J. Dolan_____
Jeannette Fisher-Garber James J. Dolan
Secretary President
EXHIBIT 1
Intermediate Municipal Trust
Institutional Service Shares
Institutional Shares
Ohio Intermediate Municipal Trust
Pennsylvania Intermediate Municipal Trust
-1-
Exhibit 9(i) under Form N-
1A
Exhibit 10 under Item 601/Reg.
S-K
SHAREHOLDER SERVICES PLAN
This Shareholder Services Plan ("Plan") is adopted as
of this 1st day of March, 1994, by the Boards of Directors
or Trustees, as applicable (the "Boards"), of those
investment companies listed on Exhibit 1 hereto as may be
amended from time to time, having their principal office and
place of business at Federated Investors Tower, Pittsburgh,
PA 15222-3779 (individually referred to herein as a "Fund"
and collectively as "Funds").
1. This Plan is adopted to allow the Funds to
make payments as contemplated herein to obtain certain
personal services for shareholders and/or the maintenance of
shareholder accounts ("Services").
2. This Plan is designed to compensate Federated
Shareholder Services ("FSS") for providing personal services
and/or the maintenance of shareholder accounts to the Funds
and their shareholders. In compensation for the services
provided pursuant to this Plan, FSS may be paid a monthly
fee computed at the annual rate not to exceed .25 of 1% of
the average aggregate net asset value of the shares of each
Fund held during the month.
3. Any payments made by the Funds to FSS
pursuant to this Plan will be made pursuant to a
"Shareholder Services Agreement" between FSS and each of the
Funds.
4. Quarterly in each year that this Plan remains
in effect, FSS shall prepare and furnish to the Boards of
the Funds, and the Boards shall review, a written report of
the amounts expended under the Plan.
5. This Plan shall become effective with regard
to each Fund (i) after approval by majority votes of: (a)
such Fund's Board; and (b) the members of the Board of such
Fund who are not interested persons of such Fund and have no
direct or indirect financial interest in the operation of
such Fund's Plan or in any related documents to the Plan
("Independent Trustees or Directors"), cast in person at a
meeting called for the purpose of voting on the Plan.
6. This Plan shall remain in effect with respect
to each Fund presently set forth on an exhibit and any
subsequent Fund 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 Fund at least
annually by a majority of the relevant Fund's Board and a
majority of the Independent Trustees or
Directors, of such Fund as applicable, cast in person at a
meeting called for the purpose of voting on the renewal of
such Plan. If this Plan is adopted with respect to a fund
after the first annual approval by the Trustees or Directors
as described above, this Plan will be effective as to that
Fund at such time as Exhibit 1 hereto is amended to add such
Fund and will continue in effect until the next annual
approval of this Plan by the Funds' Boards and thereafter
for successive periods of one year subject to approval as
described above.
7. All material amendments to this Plan must be
approved by a vote of the Board of each Fund and of the
Independent Directors or Trustees of such Fund, cast in
person at a meeting called for such purpose.
8. This Plan may be terminated as follows:
(a) at any time, without the payment of any
penalty, by the vote of a majority of the Independent
Board Members of any Fund or by a vote of a majority
of the outstanding voting securities of any Fund as
defined in the Investment Company Act of 1940 on
sixty (60) days' written notice to the parties to
this Agreement; or
(b) by any party to the Agreement without cause
by giving the other party at least sixty (60) days'
written notice of its intention to terminate.
9. While this Plan shall be in effect, the
selection and nomination of Independent Directors or
Trustees of each Fund shall be committed to the discretion
of the Independent Directors or Trustees then in office.
10. 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 8 herein.
11. This Plan shall be construed in
accordance with and governed by the laws of the Commonwealth
of Pennsylvania.
Witness the due execution hereof this as of the
date set forth above.
Investment Companies (listed
on Exhibit 1)
By: /s/ John F. Donahue
John F. Donahue
Chairman
Attest: /s/ John W. McGonigle
John W. McGonigle
Federated Shareholder Services
By: /s/ James J. Dolan
Title: President
Attest: /s/ John W. McGonigle
John W. McGonigle
FSS subcontract 1
Exhibit 9(ii) under Form N-1A
Exhibit 10 under Item 601/Reg S-K
SHAREHOLDER SERVICES SUB-CONTRACT
This Agreement is made between the Financial
Institution executing this Agreement ("Provider") and
Federated Shareholder Services ("FSS") on behalf of the
investment companies listed in Exhibit A hereto (the
"Funds"), for whom FSS administers the Shareholder Services
Plan ("Plan") and who have approved this form of Agreement.
In consideration of the mutual covenants hereinafter
contained, it is hereby agreed by and between the parties
hereto as follows:
1. FSS hereby appoints Provider to render or cause to
be rendered personal services to shareholders of the Funds
and/or the maintenance of accounts of shareholders of the
Funds ("Services"). Provider agrees to provide Services
which, in its best judgment, are necessary or desirable for
its customers who are investors in the Funds. Provider
further agrees to provide FSS, upon request, a written
description of the Services which Provider is providing
hereunder.
2. During the term of this Agreement, the Funds will
pay the Provider fees as set forth in a written schedule
delivered to the Provider pursuant to this Agreement. The
fee schedule for Provider may be changed by FSS sending a
new fee schedule to Provider pursuant to Paragraph 9 of this
Agreement. For the payment period in which this Agreement
becomes effective or terminates, there shall be an
appropriate proration of the fee on the basis of the number
of days that this Agreement is in effect during the quarter.
To enable the Funds to comply with an applicable exemptive
order, Provider represents that the fees received pursuant
to this Agreement will be disclosed to its customers, will
be authorized by its customers, and will not result in an
excessive fee to the Provider.
3. The Provider understands that the Department of
Labor views ERISA as prohibiting fiduciaries of
discretionary ERISA assets from receiving shareholder
service fees or other compensation from funds in which the
fiduciary's discretionary ERISA assets are invested. To
date, the Department of Labor has not issued any exemptive
order or advisory opinion that would exempt fiduciaries from
this interpretation. Without specific authorization from
the Department of Labor, fiduciaries should carefully avoid
investing discretionary assets in any fund pursuant to an
arrangement where the fiduciary is to be compensated by the
fund for such investment. Receipt of such compensation
could violate ERISA provisions against fiduciary self-
dealing and conflict of interest and could subject the
fiduciary to substantial penalties.
4. The Provider agrees not to solicit or cause to be
solicited directly, or indirectly at any time in the future,
any proxies from the shareholders of a Fund in opposition to
proxies solicited by management of the Fund, unless a court
of competent jurisdiction shall have determined that the
conduct of a majority of the Board of Trustees or Directors
of the Fund constitutes willful misfeasance, bad faith,
gross negligence or reckless disregard of their duties.
This paragraph 4 will survive the term of this Agreement.
5. This Agreement shall continue in effect for one
year from the date of its execution, and thereafter for
successive periods of one year if the form of this Agreement
is approved at least annually by the Board of each Fund,
including a majority of the members of the Board of the Fund
who are not interested persons of the Fund and have no
direct or indirect financial interest in the operation of
the Fund's Plan or in any related documents to the Plan
("Disinterested Board Members") cast in person at a meeting
called for that purpose.
6. Notwithstanding paragraph 5, this Agreement may be
terminated as follows:
(a) at any time, without the payment of any
penalty, by the vote of a majority of the
Disinterested Board Members of the Fund or by a vote
of a majority of the outstanding voting securities of
the Fund as defined in the Investment Company Act of
1940 on not more than sixty (60) days' written notice
to the parties to this Agreement;
(b) automatically in the event of the
Agreement's assignment as defined in the Investment
Company Act of 1940; and
(c) by either party to the Agreement without
cause by giving the other party at least sixty (60)
days' written notice of its intention to terminate.
7. The Provider agrees to obtain any taxpayer
identification number certification from its customers
required under Section 3406 of the Internal Revenue Code,
and any applicable Treasury regulations, and to provide the
Fund or its designee with timely written notice of any
failure to obtain such taxpayer identification number
certification in order to enable the implementation of any
required backup withholding.
8. The execution and delivery of this Agreement have
been authorized by the Trustees of FSS and signed by an
authorized officer of FSS, acting as such, and neither such
authorization by such Trustees nor such execution and
delivery by such officer shall be deemed to have been made
by any of them individually or to impose any liability on
any of them personally, and the obligations of this
Agreement are not binding upon any of the Trustees or
shareholders of FSS, but bind only the trust property of FSS
as provided in the Declaration of Trust of FSS.
9. Notices of any kind to be given hereunder shall be
in writing (including facsimile communication) and shall be
duly given if delivered to Provider at the address set forth
below and if delivered to FSS at Federated Investors Tower,
Pittsburgh, PA 15222-3779, Attention: President.
10. This Agreement constitutes the entire agreement
between the parties hereto and supersedes any prior
agreement with respect to the subject hereof whether oral or
written. If any provision of this Agreement shall be held
or made invalid by a court or regulatory agency decision,
statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby. Subject to the provisions of
Sections 5 and 6, hereof, this Agreement shall be binding
upon and shall inure to the benefit of the parties hereto
and their respective successors and shall be governed by
Pennsylvania law; provided, however, that nothing herein
shall be construed in a manner inconsistent with the
Investment Company Act of 1940 or any rule or regulation
promulgated by the Securities and Exchange Commission
thereunder.
11. This Agreement may be executed by different
parties on separate counterparts, each of which, when so
executed and delivered, shall be an original, and all such
counterparts shall together constitute one and the same
instrument.
12. This Agreement shall not be assigned by any party
without the prior written consent of FSS in the case of
assignment by Provider, or of Provider in the case of
assignment by FSS, except that any party may assign to a
successor all of or a substantial portion of its business to
a party controlling, controlled by, or under common control
with such party.
13. This Agreement may be amended by FSS from time to
time by the following procedure. FSS will mail a copy of
the amendment to the Provider's address, as shown below. If
the Provider does not object to the amendment within thirty
(30) days after its receipt, the amendment will become part
of the Agreement. The Provider's objection must be in
writing and be received by FSS within such thirty days.
14. This Agreement may be terminated with regard to a
particular Fund or Class at any time, without the payment of
any penalty, by FSS or by the vote of a majority of the
Disinterested Trustees or Directors, as applicable, 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 the Provider. This Agreement may be
terminated by Provider on sixty (60) days' written notice
to FSS.
15. The Provider acknowledges and agrees that FSS has
entered into this Agreement solely in the capacity of agent
for the Funds and administrator of the Plan. The Provider
agrees not to claim that FSS is liable for any
responsibilities or amounts due by the Funds hereunder.
[Provider]
Address
City State Zip Code
Dated: By:
Authoried Signature
Title
Print Name of Authorized
Signature
FEDERATED SHAREHOLDER SERVICES
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
By:
Vice President
EXHIBIT A to Shareholder Services Sub-Contract with
Funds covered by this Agreement:
Shareholder Service Fees
1. During the term of this Agreement, FSS will pay
Provider a quarterly fee. This fee will be computed at the
annual rate of ______ of the average net asset value of
shares of the Funds held during the quarter in accounts for
which the Provider provides Services under this Agreement,
so long as the average net asset value of Shares in the
Funds during the quarter equals or exceeds such minimum
amount as FSS shall from time to time determine and
communicate in writing to the Provider.
2. For the quarterly period in which the 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
quarter.
-1-
Exhibit 9(iii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
SHAREHOLDER SERVICES AGREEMENT
AGREEMENT made as of the first day of March, 1994, by
and between those investment companies listed on Exhibit 1,
as may be amended from time to time, having their principal
office and place of business at Federated Investors Tower,
Pittsburgh, PA 15222-3779 and who have approved a
Shareholder Services Plan (the "Plan") and this form of
Agreement (individually referred to herein as a "Fund" and
collectively as "Funds") and Federated Shareholder Services,
a Delaware business trust, having its principal office and
place of business at Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779 ("FSS").
1. The Funds hereby appoint FSS to render or cause to
be rendered personal services to shareholders of the Funds
and/or the maintenance of accounts of shareholders of the
Funds ("Services"). In addition to providing Services
directly to shareholders of the Funds, FSS is hereby
appointed the Funds' agent to select, negotiate and
subcontract for the performance of Services. FSS hereby
accepts such appointments. FSS agrees to provide or cause
to be provided Services which, in its best judgment (subject
to supervision and control of the Funds' Boards of Trustees
or Directors, as applicable), are necessary or desirable for
shareholders of the Funds. FSS further agrees to provide
the Funds, upon request, a written description of the
Services which FSS is providing hereunder.
2. During the term of this Agreement, each Fund will
pay FSS and FSS agrees to accept as full compensation for
its services rendered hereunder a fee at an annual rate,
calculated daily and payable monthly, up to 0.25% of 1% of
average net assets of each Fund.
For the payment period in which this Agreement becomes
effective or terminates with respect to any Fund, there
shall be an appropriate proration of the monthly fee on the
basis of the number of days that this Agreement is in effect
with respect to such Fund during the month. To enable the
Funds to comply with an applicable exemptive order, FSS
represents that the fees received pursuant to this Agreement
will be disclosed to and authorized by any person or entity
receiving Services, and will not result in an excessive fee
to FSS.
3. This Agreement shall continue in effect for one
year from the date of its execution, and thereafter for
successive periods of one year only if the form of this
Agreement is approved at least annually by the Board of each
Fund, including a majority of the members of the Board of
the Fund who are not interested persons of the Fund and have
no direct or indirect financial interest in the operation of
the Funds' Plan or in any related documents to the Plan
("Independent Board Members") cast in person at a meeting
called for that purpose.
4. Notwithstanding paragraph 3, this Agreement may be
terminated as follows:
(a) at any time, without the payment of any
penalty, by the vote of a majority of the Independent
Board Members of any Fund or by a vote of a majority
of the outstanding voting securities of any Fund as
defined in the Investment Company Act of 1940 on
sixty (60) days' written notice to the parties to
this Agreement;
(b) automatically in the event of the
Agreement's assignment as defined in the Investment
Company Act of 1940; and
(c) by any party to the Agreement without cause
by giving the other party at least sixty (60) days'
written notice of its intention to terminate.
5. FSS agrees to obtain any taxpayer identification
number certification from each shareholder of the Funds to
which it provides Services that is required under Section
3406 of the Internal Revenue Code, and any applicable
Treasury regulations, and to provide each Fund or its
designee with timely written notice of any failure to obtain
such taxpayer identification number certification in order
to enable the implementation of any required backup
withholding.
6. FSS shall not be liable for any error of judgment
or mistake of law or for any loss suffered by any Fund in
connection with the matters to which this Agreement relates,
except a loss resulting from willful misfeasance, bad faith
or gross negligence on its part in the performance of its
duties or from reckless disregard by it of its obligations
and duties under this Agreement. FSS shall be entitled to
rely on and may act upon advice of counsel (who may be
counsel for such Fund) on all matters, and shall be without
liability for any action reasonably taken or omitted
pursuant to such advice. Any person, even though also an
officer, trustee, partner, employee or agent of FSS, who may
be or become a member of such Fund's Board, officer,
employee or agent of any Fund, shall be deemed, when
rendering services to such Fund or acting on any business of
such Fund (other than services or business in connection
with the duties of FSS hereunder) to be rendering such
services to or acting solely for such Fund and not as an
officer, trustee, partner, employee or agent or one under
the control or direction of FSS even though paid by FSS.
This Section 6 shall survive termination of this
Agreement.
7. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against which an
enforcement of the change, waiver, discharge or termination
is sought.
8. FSS is expressly put on notice of the limitation
of liability as set forth in the Declaration of Trust of
each Fund that is a Massachusetts business trust and agrees
that the obligations assumed by each such Fund pursuant to
this Agreement shall be limited in any case to such Fund and
its assets and that FSS shall not seek satisfaction of any
such obligations from the shareholders of such Fund, the
Trustees, Officers, Employees or Agents of such Fund, or any
of them.
9. The execution and delivery of this Agreement have
been authorized by the Trustees of FSS and signed by an
authorized officer of FSS, acting as such, and neither such
authorization by such Trustees nor such execution and
delivery by such officer shall be deemed to have been made
by any of them individually or to impose any liability on
any of them personally, and the obligations of this
Agreement are not binding upon any of the Trustees or
shareholders of FSS, but bind only the trust property of FSS
as provided in the Declaration of Trust of FSS.
10. Notices of any kind to be given hereunder shall be
in writing (including facsimile communication) and shall be
duly given if delivered to any Fund and to such Fund at the
following address: Federated Investors Tower, Pittsburgh,
PA 15222-3779, Attention: President and if delivered to
FSS at Federated Investors Tower, Pittsburgh, PA 15222-
3779, Attention: President.
11. This Agreement constitutes the entire agreement
between the parties hereto and supersedes any prior
agreement with respect to the subject hereof whether oral or
written. If any provision of this Agreement shall be held
or made invalid by a court or regulatory agency decision,
statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby. Subject to the provisions of
Sections 3 and 4, hereof, this Agreement shall be binding
upon and shall inure to the benefit of the parties hereto
and their respective successors and shall be governed by
Pennsylvania law; provided, however, that nothing herein
shall be construed in a manner inconsistent with the
Investment Company Act of 1940 or any rule or regulation
promulgated by the Securities and Exchange Commission
thereunder.
12. This Agreement may be executed by different
parties on separate counterparts, each of which, when so
executed and delivered, shall be an original, and all such
counterparts shall together constitute one and the same
instrument.
13. This Agreement shall not be assigned by any party
without the prior written consent of FSS in the case of
assignment by any Fund, or of the Funds in the case of
assignment by FSS, except that any party may assign to a
successor all of or a substantial portion of its business to
a party controlling, controlled by, or under common control
with such party. Nothing in this Section 14 shall prevent
FSS from delegating its responsibilities to another entity
to the extent provided herein.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below
as of the day and year first above written.
Investment Companies (listed
on Exhibit 1)
By: /s/ John F. Donahue
John F. Donahue
Chairman
Attest: /s/ John W. McGonigle
John W. McGonigle
Federated Shareholder Services
By: /s/ James J. Dolan
Title: President
Attest: /s/ John W. McGonigle
John W. McGonigle
-1-
Exhibit 9(iv) under Form N-1A
Exhibit 10 under Item
601/Reg. S-K
ADMINISTRATIVE SERVICES AGREEMENT
This Administrative Services Agreement is made as of this
first day of March, 1994, between those investment companies
listed on Exhibit 1, as may be amended from time to time, having
their principal office and place of business at Federated
Investors Tower, Pittsburgh PA 15222-3779 (individually
referred to herein as "Fund" and collectively referred to as
"Funds), on behalf of the portfolios of the Funds, and Federated
Administrative Services, a Delaware business trust (herein
called "FAS").
WHEREAS, the Funds desire to retain FAS as their
Administrator to provide them with Administrative Services (as
herein defined), and FAS is willing to render such services;
WHEREAS, the Funds are registered as open-end management
investment companies under the Investment Company Act of 1940,
as amended (the "1940 Act"), with authorized and issued shares
of capital stock or beneficial interest ("Shares"); and
NOW, THEREFORE, in consideration of the premises and mutual
covenants set forth herein, the parties hereto agree as follows:
1. Appointment of Administrator. The Funds hereby
appoint FAS as Administrator of the Funds on the terms and
conditions set forth in this Agreement; and FAS hereby accepts
such appointment and agrees to perform the services and duties
set forth in Section 2 of this Agreement in consideration of the
compensation provided for in Section 4 hereof.
2. Services and Duties. As Administrator, and subject to
the supervision and control of the Funds' Boards of Trustees or
Directors, as applicable (the "Boards"), FAS will provide
facilities, equipment, and personnel to carry out the following
administrative services for operation of the business and
affairs of the Funds and each of their portfolios:
(a) prepare, file, and maintain the
Funds' governing documents and any amendments
thereto, including the Declaration of Trust or
Articles of Incorporation, as appropriate,(which has
already been prepared and filed), the By-laws and
minutes of meetings of their Boards, Committees, and
shareholders;
(b) prepare and file with the
Securities and Exchange Commission and the
appropriate state securities authorities the
registration statements for the Funds and the Funds'
shares and all amendments thereto, reports to
regulatory authorities and shareholders,
prospectuses, proxy statements, and such other
documents all as may be necessary to enable the Funds
to make continuous offerings of their shares, as
applicable;
(c) prepare, negotiate, and
administer contracts on behalf of the Funds with,
among others, each Fund's investment adviser,
distributor, custodian, and transfer agent, subject
to any applicable restrictions of the Boards or the
1940 Act;
(d) supervise the Funds' custodians
in the maintenance of the Funds' general ledgers and
in the preparation of the Funds' financial
statements, including oversight of expense accruals
and payments, the determination of the net asset
value of the Funds and the declaration and payment of
dividends and other distributions to shareholders;
(e) calculate performance data of
the Funds for dissemination to information services
covering the investment company industry;
(f) prepare and file the Funds' tax
returns;
(g) examine and review the
operations of the Funds' custodians and transfer
agents;
(h) coordinate the layout and
printing of publicly disseminated prospectuses and
reports;
(i) perform internal audit
examinations in accordance with a charter to be
adopted by FAS and the Funds;
(j) assist with the design,
development, and operation of the Funds;
(k) provide individuals reasonably
acceptable to the Funds' Boards for nomination,
appointment, or election as officers of the Funds,
who will be responsible for the management of certain
of the Funds' affairs as determined by the Funds'
Boards; and
(l) consult with the Funds and their
Boards of Trustees or Directors, as appropriate, on
matters concerning the Funds and their affairs.
The foregoing, along with any additional services that FAS
shall agree in writing to perform for the Funds hereunder, shall
hereafter be referred to as "Administrative Services."
Administrative Services shall not include any duties, functions,
or services to be performed for any Fund by such Fund's
investment adviser, distributor, custodian, transfer agent, or
shareholder service agent, pursuant to their respective
agreements with such Fund.
3. Expenses. FAS shall be responsible for expenses
incurred in providing office space, equipment, and personnel as
may be necessary or convenient to provide the Administrative
Services to the Fund, including the compensation of FAS
employees who serve on the Funds' Boards, or as officers of the
Funds. Each Fund shall be responsible for all other expenses
incurred by FAS on behalf of such Fund, including without
limitation postage and courier expenses, printing expenses,
travel expenses, registration fees, filing fees, fees of outside
counsel and independent auditors, insurance premiums, fees
payable to members of such Fund's Board who are not FAS
employees, and trade association dues.
4. Compensation. For the Administrative Services
provided, each Fund hereby agrees to pay and FAS hereby agrees
to accept as full compensation for its services rendered
hereunder an administrative fee at an annual rate, payable
daily, as specified below, based upon the total assets of all of
the Funds:
Maximum Administrative Average Daily Net Assets
Fee of the Funds
.150% on the first $250 million
.125% on the next $250 million
.100% on the next $250
million
.075% on assets in excess of
$750 million
However, in no event shall the administrative fee received
during any year of this Agreement be less than, or be paid at a
rate less than would aggregate, $125,000, per individual Fund,
with an additional $30,000 for each class of shares added to any
such Fund after the date hereof.
5. Standard of Care.
(a) FAS shall not be liable for any
error of judgment or mistake of law or for any loss
suffered by any Fund in connection with the matters
to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or
gross negligence on its part in the performance of
its duties or from reckless disregard by it of its
obligations and duties under this Agreement. FAS
shall be entitled to rely on and may act upon advice
of counsel (who may be counsel for such Fund) on all
matters, and shall be without liability for any
action reasonably taken or omitted pursuant to such
advice. Any person, even though also an officer,
trustee, partner, employee or agent of FAS, who may
be or become a member of such Fund's Board, officer,
employee or agent of any Fund, shall be deemed, when
rendering services to such Fund or acting on any
business of such Fund (other than services or
business in connection with the duties of FAS
hereunder) to be rendering such services to or acting
solely for such Fund and not as an officer, trustee,
partner, employee or agent or one under the control
or direction of FAS even though paid by FAS.
(b) This Section 5 shall survive
termination of this Agreement.
6. Duration and Termination. The initial term of this
Agreement with respect to each Fund shall commence on the date
hereof, and extend for a period of one year, renewable annually
by the approval of the Board of Directors/Trustees of each Fund.
7. Amendment. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against which an
enforcement of the change, waiver, discharge or termination is
sought.
8. Limitations of Liability of Trustees or Officers,
Employees, Agents and Shareholders of the Funds. FAS is
expressly put on notice of the limitation of liability as set
forth in the Declaration of Trust of each Fund that is a
Massachusetts business trust and agrees that the obligations
assumed by each such Fund pursuant to this Agreement shall be
limited in any case to such Fund and its assets and that FAS
shall not seek satisfaction of any such obligations from the
shareholders of such Fund, the Trustees, Officers, Employees or
Agents of such Fund, or any of them.
9. Limitations of Liability of Trustees and Shareholders
of FAS. The execution and delivery of this Agreement have been
authorized by the Trustees of FAS and signed by an authorized
officer of FAS, acting as such, and neither such authorization
by such Trustees nor such execution and delivery by such officer
shall be deemed to have been made by any of them individually or
to impose any liability on any of them personally, and the
obligations of this Agreement are not binding upon any of the
Trustees or shareholders of FAS, but bind only the trust
property of FAS as provided in the Declaration of Trust of FAS.
10. Notices. Notices of any kind to be given hereunder
shall be in writing (including facsimile communication) and
shall be duly given if delivered to any Fund at the following
address: Federated Investors Tower, Pittsburgh, PA 15222-3779,
Attention: President and if delivered to FAS at Federated
Investors Tower, Pittsburgh, PA 15222-3779, Attention:
President.
11. Miscellaneous. This Agreement constitutes the entire
agreement between the parties hereto and supersedes any prior
agreement with respect to the subject hereof whether oral or
written. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit
any of the provisions hereof or otherwise affect their
construction or effect. If any provision of this Agreement
shall be held or made invalid by a court or regulatory agency
decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. Subject to the
provisions of Section 5, hereof, this Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and
their respective successors and shall be governed by
Pennsylvania law; provided, however, that nothing herein shall
be construed in a manner inconsistent with the Investment
Company Act of 1940 or any rule or regulation promulgated by the
Securities and Exchange Commission thereunder.
12. Counterparts. This Agreement may be executed by
different parties on separate counterparts, each of which, when
so executed and delivered, shall be an original, and all such
counterparts shall together constitute one and the same
instrument.
13. Assignment; Successors. This Agreement shall not be
assigned by any party without the prior written consent of FAS,
in the case of assignment by any Fund, or of the Funds, in the
case of assignment by FAS, except that any party may assign to a
successor all of or a substantial portion of its business to a
party controlling, controlled by, or under common control with
such party. Nothing in this Section 14 shall prevent FAS from
delegating its responsibilities to another entity to the extent
provided herein.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as
of the day and year first above written.
Investment Companies (listed
on Exhibit 1)
By: /s/ John F. Donahue
John F. Donahue
Chairman
Attest: /s/ John W. McGonigle
John W. McGonigle
Federated Administrative Services
By: /s/ Edward C. Gonzales
Edward C. Gonzales
Chairman
Attest: /s/ John W. McGonigle
John W. McGonigle
-1-
Exhibit 15(i) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
INTERMEDIATE MUNICIPAL TRUST
RULE 12b-1 PLAN
This Plan ("Plan") is adopted as of this 1st day
of June, 1993, by the Board of Trustees of INTERMEDIATE
MUNICIPAL TRUST (the "Trust"), a Massachusetts business
trust with respect to certain 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
Shares 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 ("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
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 Funds 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 Institutions with funds received as compensation under
this Plan will be made pursuant to the "Rule 12b-1
Agreement" entered into by FSC and the Institution.
4. FSC has the right (i) to select, in its sole
discretion, the Institutions to participate in the Plan and
(ii) to terminate without cause and in its sole discretion
any Rule 12b-1 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 Fund (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
Fund, as defined in Section 2(a)(42) of the Act and
(ii) upon execution of an exhibit adopting this Plan with
respect to such Fund.
7. This Plan shall remain 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 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 Fund 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 Fund after the first
annual approval by the Trustees as described above, this
Plan will be effective as to that Fund 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 Funds 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 Fund 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 Fund 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 15(ii) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
EXHIBIT A
to the
Plan
INTERMEDIATE MUNICIPAL TRUST
Intermediate Municipal Trust
Institutional Service Shares
This Plan is adopted by INTERMEDIATE MUNICIPAL
TRUST with respect to the Shares of the Fund 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 Institutional Service Shares of Intermediate
Municipal Trust held during the month.
Witness the due execution hereof this 1st day of
June, 1993.
INTERMEDIATE MUNICIPAL TRUST
By: /s/ Glen R. Johnson
President
