TELEPHONE CALL SCRIPT
THE STARBURST MUNICIPAL INCOME FUND PROXY
Caller: Hello this is . Am I speaking to [insert
-----------------------
name of shareholder]? Good. I am a representative of Compass
Brokerage, Inc. Our records indicate that you are a shareholder of
the Starburst Municipal Income Fund. I am calling to check to make
sure that you have received the package containing the proxy
statement relating to the proposed transfer of the assets of the
Starburst Municipal Income Fund to the Federated Intermediate
Municipal Trust and to encourage you to send in your vote. Did you
receive your package?
MANDATORY DISCLAIMER: The following disclosure should be made to all
customers during the course of the call.
In order to avoid any confusion regarding the nature of your present
investment in The Starburst Municipal Income Fund or regarding an investment
in the Federated Intermediate Municipal Trust, please note the following:
Shares of The Starburst Municipal Income Fund and shares of the
Federated Intermediate Municipal Trust are not deposits or obligations
of, or guaranteed or endorsed by, Compass Brokerage, Compass Bank,
Compass Bancshares or their affiliates or any other bank or financial
institution.
Shares of The Starburst Municipal Income Fund and shares of the
Federated Intermediate Municipal Trust are not insured by the FDIC, the
Federal Reserve Board, or any federal agency.
Shares of The Starburst Municipal Income Fund and shares of the
Federated Intermediate Municipal Trust involve risks, including the
possible loss of the principal amount invested.
Investment products are made available through Compass Brokerage, Inc.
and not Compass Bank or any of the other banking affiliates of Compass
Bancshares.
Alternative One (if customer has not received the proxy):
Customer: No.
Caller: Well, you should be receiving the package within the next few
days. The materials relate to a proposed opportunity for the
Starburst Municipal Income Fund to transfer its assets to a
larger fund, the Federated Intermediate Municipal Trust. [We
want to encourage you to read the materials and to submit
your vote on the proposed transaction at your earliest
convenience. Proxy cards must be received in time for the
October 22, 1996 shareholders meeting in order to be
counted.] Let me leave you my name and number so that you
can call if you have any questions.
At this point, read the DISCLAIMER to the customer and terminate the
call.
Alternative Two (if the customer has received the proxy):
Customer: Yes
Caller: Good. My reason for calling is to see if you have any
questions regarding the materials you have received and to
encourage you to read the materials and submit your vote at
your earliest convenience. Before we discuss any questions
you might have, I need to read an important disclosure to
you. Thanks for your patience. [read the DISCLAIMER]
In responding to the Caller's questions, the Caller should look for a
Question below that corresponds to the Customer's question, and should give
the Customer the corresponding Answer below. If the Caller is asked any
question pertaining to the proxy that is not covered by the Questions and
Answers appearing below, the Caller should NOT attempt to answer the
question. Simply take down the Customer's question and tell the customer
that you will call them back with an answer.
POSSIBLE QUESTIONS AND ANSWERS
What is this document that I received in the mail?
You have received a proxy statement which discusses a proposal to transfer
all of the assets of The Starburst Municipal Income Fund to the Federated
Intermediate Municipal Trust. The proxy ballot which was also included in
the mailing enables you to vote for or against the proposed transaction.
What is the purpose of the proposed transaction?
Since the Starburst Municipal Income Fund was organized, it has gathered a
relatively small amount of total assets and has sustained a relatively high
level of operating expenses. The Board of Trustees of Starburst Funds
concluded economies of scale and potentially lower expense rates are likely
to be realized by transferring the assets of The Starburst Municipal Income
Fund to the Federated Intermediate Municipal Trust. Currently, the projected
annual expenses of Federated Intermediate Municipal Trust are at 0.57%, which
is lower than the 0.92% currently applicable to The Starburst Municipal
Income Fund.
Does the Federated Intermediate Municipal Trust make the same kinds of
investments that The Starburst Municipal Income Fund makes?
The investment objective of both The Starburst Municipal Income Fund and the
Federated Intermediate Municipal Trust is current income exempt from federal
regular income tax, and the two funds pursue their investment objectives by
investing at least 80% of its net assets in a diversified portfolio of
municipal securities. There are some differences in the investment policies
and strategies of the two funds, which differences are described in the proxy
statement and fund prospectuses.
What is Compass' role with the new Fund?
Compass Bank, the parent company of Compass Brokerage, Inc., serves as the
investment adviser and custodian of The Starburst Municipal Income Fund. The
investment adviser of the Federated Intermediate Municipal Trust is Federated
Management, a subsidiary of Federated Investors based in Pittsburgh,
Pennsylvania, and the custodian of the Federated Intermediate Municipal Trust
is State Street Bank and Trust Company of Boston, Massachusetts. Federated
Securities Corp., also an affiliate of Federated Investors, is the
distributor of both The Starburst Municipal Income Fund and the Federated
Intermediate Municipal Trust. Federated Management, Federated Investors,
Federated Securities Corp. and State Street Bank are not affiliated with
Compass Bank or Compass Brokerage. If the transaction is approved by the
shareholders and consummated, Compass Brokerage, Inc. will receive periodic
compensation from the Federated Intermediate Municipal Trust for various
shareholder services with respect to accounts of Compass Brokerage's
customers invested in the Federated Intermediate Municipal Trust.
Will Compass Brokerage receive any fees in connection with the proposed
transfer of assets?
If the transaction is approved by the shareholders and consummated, Compass
Brokerage, Inc. will receive periodic compensation from the Federated
Intermediate Municipal Trust for various shareholder services with respect to
accounts of Compass Brokerage's customers invested in the Federated
Intermediate Municipal Trust.
When will changes occur?
A special meeting of shareholders of The Starburst Municipal Income Fund has
been called for October 22, 1996 to vote on the proposed transfer of assets
to the Federated Intermediate Municipal Trust. If shareholders vote in favor
of the proposed transfer of assets, your shares of The Starburst Municipal
Income Fund will be exchanged for shares of the Federated Intermediate
Municipal Trust a few days after the shareholder meeting.
How much will my new shares be worth.
On the day that you become a shareholder of the Federated Intermediate
Municipal Trust, you will receive shares of the Federated Intermediate
Municipal Trust equal in value to your shares of The Starburst Municipal
Income Fund. It's possible that you won't own the same number of shares that
you owned in The Starburst Municipal Income Fund, but the value of those
shares will be the same on the date of the transfer of assets.
How does the performance of the Federated Intermediate Municipal Trust
compare with the performance of The Starburst Municipal Income Fund?
The average annual total return for The Starburst Municipal Income Fund was
3.18% for the one-year period ended August 31, 1996, 3.73% for the three-year
period ended August 31, 1996, and 5.85% since the inception of the Fund.
The average annual total return for the Federated Intermediate Municipal
Trust was 3.85% for the one-year period ended August 31, 1996, 3.58% for the
three-year period ended August 31, 1996, 5.95% for the five-year period ended
August 31, 1996, and 6.03% for the ten-year period ended August 31, 1996.
What [does Compass Brokerage][do you] recommend that I do?
The Board of Trustees of The Starburst Funds has recommended the transaction
to the shareholders of The Starburst Municipal Income Fund. This
recommendation is based on the determination by the Board of Trustees that
the proposed transfer of assets from The Starburst Municipal Income Fund to
the Federated Intermediate Municipal Trust will be in the best interests of
the shareholders of The Starburst Municipal Income Fund. Compass Brokerage
cannot make a recommendation to you concerning how you should vote on the
proposed transfer of assets. however, Compass Brokerage believes that if The
Starburst Municipal Income Fund is a suitable investment for you at the time
of the transaction based on your current financial situation, time horizon,
investment objectives and risk tolerance, then the Federated Intermediate
Municipal Trust should also be suitable for you. If you would like for us to
make a recommendation regarding the suitability of the Federated Intermediate
Municipal Trust, please allow me to discuss with you your current
circumstances in more detail.
Will I continue to enjoy exchange privileges?
You will be able to exchange your shares in the Federated Intermediate
Municipal Trust for shares in The Starburst Funds. Otherwise, the Federated
Intermediate Municipal Trust does not offer exchange privileges.
Will the transfer of assets result in taxes to me?
No. The transfer of assets will be tax free, and there will be no taxable
consequences to the shareholders of The Starburst Municipal Income Fund.
What happens if I don't vote.
Your vote is important, no matter how you decide to vote. If a majority of
shareholders do not return their vote, additional proxy statements will have
to be sent out, at considerable cost in dollars and time.
When is my vote due?
You should return your signed proxy in the envelope provided for this purpose
so that it will be received in time for the October 22 meeting.
IMPORTANT NOTE: IF THE CUSTOMER INDICATES AT ANY POINT IN THE CALL THAT HE
OR SHE DOES NOT WANT TO RECEIVE CALLS FROM COMPASS BROKERAGE OR COMPASS
GENERALLY, THE CALLER SHOULD SIMPLY THANK THE CUSTOMER AND TERMINATE THE
CALL. THE CALLER SHOULD THEN PROMPTLY TRANSMIT THE CUSTOMER'S REQUEST TO BOB
ETHERIDGE.
FOR BROKER-DEALER USE ONLY. NOT TO BE DISTRIBUTED TO THE PUBLIC OR USED IN
WRITTEN FORM AS SALES LITERATURE.
FEDERATED SECURITIES CORP., DISTRIBUTOR
