1933 Act File No. 33-
29838
1940 Act File No. 811-
5843
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. __13__
___X__
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF
1940 ___X__
Amendment No. ___11___
___X__
CASH TRUST SERIES, INC.
(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 September 30, 1995 pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a) (i)
on pursuant to paragraph (a) (i).
75 days after filing pursuant to paragraph (a)(ii)
on _________________ pursuant to paragraph (a)(ii) of
Rule 485.
If appropriate, check the following box:
This post-effective amendment designates a new effective
date for a previously filed post-effective amendment.
Registrant has filed with the Securities and Exchange
Commission a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940, and:
X filed the Notice required by that Rule on July 14, 1995;
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 Matthew G. Maloney,
Esquire
Houston, Houston & Donnelly Dickstein, Shapiro & Morin,
L.L.P. 2101 L Street, N.W. 20037
2510 Centre City Tower Washington, D.C. 20037
650 Smithfield Street
Pittsburgh, Pennsylvania 15222
CROSS-REFERENCE SHEET
This Amendment to the Registration Statement of CASH
TRUST SERIES, INC. (formerly Cash Trust Series), which is
comprised of four portfolios: (1) Government Cash Series;
(2) Municipal Cash Series: (3) Prime Cash Series; and
(4) Treasury Cash Series, is comprised of the following:
PART A. INFORMATION REQUIRED IN A PROSPECTUS.
Prospectus Heading
(Rule 404(c) Cross Reference)
Item 1. Cover Page (1-4) Cover
Page.
Item 2. Synopsis (1-4) Summary of
Fund Expenses;
Item 3. Condensed Financial
Information (1-4)
Performance Information; (1-4)
Financial Highlights.
Item 4. General Description of
Registrant (1-4) General
Information; (1-4) Investment
Information; (1-4) Investment
Objective; (1-4) Investment
Policies; (1-4) Investment
Limitations; (2,3) Investment
Risks; (2) Non-
Diversification; (1-4)
Regulatory Compliance.
Item 5. Management of the Fund (1-4)
Cash Trust Series, Inc.,
Information; (1-4) Management
of Cash Trust Series, Inc.; (1-
4) Distribution of Shares; (1-
4) Administration of the Fund.
Item 6. Capital Stock and Other
Securities (1-4)
Dividends; (1-4) Capital
Gains; (1-4) Shareholder
Information; (1-4) Voting
Rights; (1-4) Tax Information;
(1-4) Federal Income Tax; (1-
4) Pennsylvania Corporate and
Personal Property Taxes.
Item 7. Purchase of Securities Being
Offered (1-4) Net Asset
Value; (1-4)
Distribution and Shareholders
Services;
(1-4) Supplemental
Payments to Financial
Institutions;
(1-4) Investing in the
Fund; (1-4) Share
Purchases; (1-4)
Minimum Investment Required;
(1-4) Systematic Investment
Program; (1-4) Certificates
and Confirmations.
Item 8. Redemption or Repurchase (1-4)
Redeeming Shares; (1-4)
Through a Financial
Institution; (1-4) By Mail;
(1-4) Telephone Redemption;(1-
4) By a Systematic Withdrawal
Program; (1-4) Accounts with
Low Balances.
Item 9. Pending Legal Proceedings
None.
PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL
INFORMATION:
Item 10. Cover Page (1-4) Cover
Page.
Item 11. Table of Contents (1-4)
Table of Contents.
Item 12. General Information and
History (1-4) Fund History.
Item 13. Investment Objectives and
Policies (1-4) Investment
Policies; (1-4) Investment
Limitations.
Item 14. Management of the Fund (1-4)
Cash Trust Series, Inc.
Managemen;(1-4) Directors
Compensation.
Item 15. Control Persons and Principal
Holders of Securities Not
Applicable.
Item 16. Investment Advisory and Other
Services (1-4) Investment
Advisory Services; (1-4) Fund
Administration.
Item 17. Brokerage Allocation. (1-4)
Brokerage Transactions.
Item 18. Capital Stock and Other
Securities Not Applicable.
Item 19. Purchase, Redemption and
Pricing of Securities
Being Offered (1-4)
Determining Net Asset Value;
(1-4) Redemption in Kind.
Item 20. Tax Status (1-4) The
Fund's Tax Status.
Item 21. Underwriters (1-4)
Distribution Plan and
Shareholder Services
Agreement.
Item 22. Calculation of Performance
Data (1-4) Yield; (1-4)
Effective Yield; (2) Tax-
Equivalent Yield; (1-4) Total
Return; (1-4) Performance
Comparisons.
Item 23. Financial Statements
Incorporated by reference to
the Annual Reports to
Shareholders of the Funds
dated May 31, 1995 (File No.
811-5843).
CASH TRUST SERIES, INC.
PRIME CASH SERIES
TREASURY CASH SERIES
GOVERNMENT CASH SERIES
MUNICIPAL CASH SERIES
COMBINED PROSPECTUS
This combined prospectus offers shares in Prime Cash Series
(the "Prime Fund"),
Treasury Cash Series (the "Treasury Fund"), Government Cash
Series (the
"Government Fund"), and Municipal Cash Series (the
"Municipal Fund"). Each of
these Funds is a separate money-market portfolio of Cash
Trust Series, Inc. (the
"Company"). Except for the Municipal Fund, each Fund is
diversified and seeks
current income consistent with stability of principal and
liquidity. The
Municipal Fund is non-diversified and seeks current income
exempt from federal
regular income tax consistent with stability of principal.
THE SHARES OFFERED BY THIS COMBINED PROSPECTUS ARE NOT
DEPOSITS OR OBLIGATIONS
OF ANY BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK AND
ARE NOT INSURED OR
GUARANTEED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT
INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY.
INVESTMENT IN THESE
SHARES INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF
PRINCIPAL. EACH
FUND ATTEMPTS TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00
PER SHARE; THERE CAN
BE NO ASSURANCE THAT A FUND WILL BE ABLE TO DO SO.
This combined prospectus contains the information you should
read and know
before you invest in any of the Funds. Keep this prospectus
for future
reference.
Each Fund has also filed a Statement of Additional
Information dated September
30, 1995, with the Securities and Exchange Commission. The
information contained
in each Statement of Additional Information is incorporated
by reference into
this prospectus. You may request a copy of a Statement of
Additional
Information, which is in paper form only, or a paper copy of
this prospectus, if
you have received it electronically, free of charge by
calling 1-800-235-4669.
To obtain other information, or to make inquiries about a
Fund, contact your
financial institution.
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 September 30, 1995
- ------------------------------------------------------------
- --------------------
TABLE OF CONTENTS
Summary of Fund
Expenses....................................................
...1
Financial
Highlights..................................................
.........2
General
Information.................................................
...........4
Investment
Information.................................................
........4
Investment
Objective...................................................
......4
Investment
Policies....................................................
......4
More About the Municipal
Fund................................................8
Investment
Limitations.................................................
.....10
Regulatory
Compliance..................................................
.....10
Cash Trust Series, Inc.
Information...........................................11
Management of Cash Trust
Series,
Inc.........................................................
.....11
Distribution of
Shares......................................................
12
Administration of the
Company...............................................12
Net Asset
Value.......................................................
........13
How to Purchase
Shares......................................................
..14
Purchasing Shares Through a
Financial
Institution.................................................
...14
Purchasing Shares by
Wire...................................................14
Purchasing Shares by
Mail...................................................14
Special Purchase
Features...................................................1
4
Systematic Investment
Program...............................................14
How to Redeem
Shares......................................................
....15
Redeeming Through a Financial
Institution.................................................
.............15
Redeeming Shares by
Telephone...............................................15
Redeeming Shares by
Mail....................................................15
Special Redemption
Features.................................................16
Check
Writing.....................................................
..........16
Debit
Card........................................................
..........16
Systematic Withdrawal
Program...............................................16
Account and Share
Information.................................................
17
Dividends...................................................
................17
Capital
Gains.......................................................
........17
Certificates and
Confirmations..............................................1
7
Accounts with Low
Balances....................................................
17
Voting
Rights......................................................
.........17
Tax
Information.................................................
..............18
Federal Income
Tax.........................................................
.18
Performance
Information.................................................
......19
Addresses...................................................
..................20
- ------------------------------------------------------------
- --------------------
SUMMARY OF FUND EXPENSES
CASH TRUST SERIES, INC.
<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 (as a percentage of amount redeemed, if
applicable).........................................
None
Exchange
Fee.........................................................
...................................... None
</TABLE>
<TABLE>
<CAPTION>
ANNUAL FUND
OPERATING EXPENSES
(As a percentage
of average net assets)
TREASURY
GOVERNMENT MUNICIPAL PRIME
CASH
CASH
SERIES CASH SERIES CASH SERIES
SERIES
Management Fee
(after waiver) (1)...........................
0.42% 0.45% 0.30%
<S> <C>
<C> <C> <C> <C> <C> <C>
12b-1 Fee (2)..................................
0.10% 0.10% 0.10%
Total Other Expenses...........................
0.47% 0.44% 0.59%
Shareholder Services Fee.................. 0.25%
0.25% 0.25% 0.25%
Total Fund Operating Expenses (3)....
0.99% 0.99% 0.99%
<CAPTION>
(As a
Management Fee
(after waiver) (1)........................... 0.42%
<S> <C>
12b-1 Fee (2).................................. 0.10%
Total Other Expenses........................... 0.47%
Shareholder Services Fee..................
Total Fund Operating Expenses (3).... 0.99%
</TABLE>
(1) The management fees have been reduced to reflect the
voluntary waivers of a
portion of the management fees. The adviser can
terminate these voluntary
waivers at any time at its sole discretion. The maximum
management fees are
0.50%
(2) The maximum 12b-1 fees are 0.35%.
(3) The Total Fund Operating Expenses would have been
1.07%, 1.04%, 1.19%, and
1.07% absent the voluntary waivers of a portion of the
management fees for
Government Cash Series, Municipal Cash Series, Prime
Cash Series, and
Treasury Cash Series Funds, respectively.
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 "CASH TRUST SERIES, INC., INFORMATION." 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
on any Fund in
the Cash Trust Series, Inc., assuming (1) a 5% annual return
and (2)
redemption at the end of each time
period:................................ $10 $32
$55 $121
</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.
- ------------------------------------------------------------
- --------------------
FINANCIAL HIGHLIGHTS
CASH TRUST SERIES, INC.
- ------------------------------------------------------------
- --------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
The following table has been audited by Deloitte & Touche
LLP, the Fund's
independent auditors. Their report, dated July 14, 1995, on
the Fund's financial
statements for the year ended May 31, 1995, and on the
following table for each
of the periods presented, is included in the Annual Report,
which is
incorporated by reference. This table should be read in
conjunction with the
Fund's financial statements and notes thereto, which may be
obtained from the
Fund.
<TABLE>
<CAPTION>
PRIME CASH SERIES
<S> <C>
<C> <C> <C> <C> <C>
YEAR ENDED MAY 31,
<CAPTION>
1995
1994 1993 1992 1991 1990(A)
<S> <C>
<C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $
1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------------------------
Net investment income
0.05 0.02 0.03 0.04 0.07 0.06
- ---------------------------------------------------
LESS DISTRIBUTIONS
- ---------------------------------------------------
Distributions from net investment income
(0.05) (0.02) (0.03) (0.04) (0.07)
(0.06)
- --------------------------------------------------- -------
- -- --------- --------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $
1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------------------------- -------
- -- --------- --------- --------- --------- -----------
TOTAL RETURN (B)
4.60% 2.48% 2.61% 4.37% 6.99%
6.56%
- ---------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ---------------------------------------------------
Expenses
0.99% 0.99% 0.99% 0.98% 0.94%
0.73%(c)
- ---------------------------------------------------
Net investment income
4.57% 2.45% 2.58% 4.21% 6.50%
7.82%(c)
- ---------------------------------------------------
Expense waiver/reimbursement (d)
0.20% 0.18% 0.15% 0.22% 0.44%
0.46%(c)
- ---------------------------------------------------
SUPPLEMENTAL DATA
- ---------------------------------------------------
Net assets, end of period (000 omitted)
$1,027,083 $791,147 $796,832 $750,016 $562,465
$189,254
- ---------------------------------------------------
</TABLE>
(a) Reflects operations for the period from August 18, 1989
(date of initial
public investment) to May 31, 1990.
(b) Based on net asset value, which does not reflect the
sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the
expense and net
investment income ratios shown above.
<TABLE>
<CAPTION>
TREASURY CASH SERIES
<S> <C>
<C> <C> <C> <C> <C>
YEAR ENDED MAY 31,
<CAPTION>
1995
1994 1993 1992 1991 1990(A)
<S> <C>
<C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $
1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------------------------
Net investment income
0.04 0.02 0.02 0.04 0.07 0.02
- ---------------------------------------------------
LESS DISTRIBUTIONS
- ---------------------------------------------------
Distributions from net investment income
(0.04) (0.02) (0.02) (0.04) (0.07)
(0.02)
- --------------------------------------------------- -------
- -- --------- --------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $
1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------------------------- -------
- -- --------- --------- --------- --------- -----------
TOTAL RETURN (B)
4.34% 2.37% 2.47% 4.24% 6.83%
2.42%
- ---------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ---------------------------------------------------
Expenses
0.99% 0.99% 0.99% 0.98% 0.88%
0.60%(c)
- ---------------------------------------------------
Net investment income
4.26% 2.33% 2.46% 4.18% 6.39%
7.75%(c)
- ---------------------------------------------------
Expense waiver/reimbursement (d)
0.08% 0.10% 0.04% 0.04% 0.22%
0.44%(c)
- ---------------------------------------------------
SUPPLEMENTAL DATA
- ---------------------------------------------------
Net assets, end of period (000 omitted)
$424,091 $427,005 $532,334 $638,761 $713,430
$127,800
- ---------------------------------------------------
</TABLE>
(a) Reflects operations for the period from February 7, 1990
(date of initial
public investment) to May 31, 1990.
(b) Based on net asset value, which does not reflect the
sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the
expense and net
investment income ratios shown above.
Further information about the Fund's performance is
contained in the Fund's
Annual Report dated May 31, 1995, which can be obtained free
of charge.
- ------------------------------------------------------------
- --------------------
FINANCIAL HIGHLIGHTS
CASH TRUST SERIES, INC.
- ------------------------------------------------------------
- --------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
The following table has been audited by Deloitte & Touche
LLP, the Fund's
independent auditors. Their report, dated July 14, 1995, on
the Fund's financial
statements for the year ended May 31, 1995, and on the
following table for the
periods presented, is included in the Annual Report, which
is incorporated by
reference. This table should be read in conjunction with the
Fund's financial
statements and notes thereto, which may be obtained from the
Fund.
<TABLE>
<CAPTION>
GOVERNMENT CASH SERIES
<S> <C>
<C> <C> <C> <C> <C>
YEAR ENDED MAY 31,
<CAPTION>
1995
1994 1993 1992 1991 1990(A)
<S> <C>
<C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $
1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------------------------
Net investment income
0.04 0.02 0.03 0.04 0.07 0.06
- ---------------------------------------------------
LESS DISTRIBUTIONS
- ---------------------------------------------------
Distributions from net investment income
(0.04) (0.02) (0.03) (0.04) (0.07)
(0.06)
- --------------------------------------------------- -------
- -- --------- --------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $
1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------------------------- -------
- -- --------- --------- --------- --------- -----------
TOTAL RETURN (B)
4.43% 2.45% 2.54% 4.33% 6.80%
6.53%
- ---------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ---------------------------------------------------
Expenses
0.99% 0.99% 0.99% 0.98% 0.94%
0.73%(c)
- ---------------------------------------------------
Net investment income
4.35% 2.41% 2.53% 4.25% 6.48%
7.74%(c)
- ---------------------------------------------------
Expense waiver/reimbursement (d)
0.08% 0.09% 0.06% 0.06% 0.13%
0.32%(c)
- ---------------------------------------------------
SUPPLEMENTAL DATA
- ---------------------------------------------------
Net assets, end of period (000 omitted)
$453,096 $401,334 $400,231 $550,675 $631,718
$493,995
- ---------------------------------------------------
</TABLE>
(a) Reflects operations for the period from August 23, 1989,
(date of initial
public investment) to May 31, 1990.
(b) Based on net asset value, which does not reflect the
sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the
expense and net
investment income ratios shown above.
<TABLE>
<CAPTION>
MUNICIPAL CASH SERIES
<S> <C>
<C> <C> <C> <C> <C>
YEAR ENDED MAY 31,
<CAPTION>
1995
1994 1993 1992 1991 1990(A)
<S> <C>
<C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $
1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------
Net investment income
0.03 0.02 0.03 0.04 0.05 0.04
- ----------------------------------------------------
LESS DISTRIBUTIONS
- ----------------------------------------------------
Distribution from net investment income
(0.03) (0.02) (0.03) (0.04) (0.05)
(0.04)
- ---------------------------------------------------- ------
- --- --------- --------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $
1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------------------------------- ------
- --- --------- --------- --------- --------- -----------
TOTAL RETURN (B)
2.84% 1.83% 2.11% 3.53% 5.24%
4.68%
- ----------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------
Expenses
0.99% 0.99% 0.99% 0.98% 0.94%
0.73%(c)
- ----------------------------------------------------
Net investment income
2.76% 1.81% 2.10% 3.42% 5.02%
5.76%(c)
- ----------------------------------------------------
Expense waiver/reimbursement (d)
0.05% 0.06% 0.03% 0.03% 0.17%
0.45%(c)
- ----------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------
Net assets, end of period (000 omitted)
$445,164 $574,801 $456,205 $516,814 $403,151
$195,897
- ----------------------------------------------------
</TABLE>
(a) Reflects operations for the period from August 25, 1989
(date of initial
public investment) to May 30, 1990.
(b) Based on net asset value, which does not reflect the
sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the
expense and net
investment income ratios shown above.
Further information about the Fund's performance is
contained in the Fund's
Annual Report dated May 31, 1995, which can be obtained free
of charge.
GENERAL INFORMATION
The Company is an open-end management investment company
which was established
as a Maryland corporation under Articles of Incorporation
dated February 1,
1993. The Articles of Incorporation permit the Company to
offer separate series
of shares of beneficial interest representing interests in
separate portfolios
of securities. Each Fund is designed for customers of
financial institutions
such as banks, fiduciaries, custodians of public funds,
investment advisers, and
broker/dealers as a convenient means of accumulating an
interest in a
professionally managed portfolio investing only in short-
term money market
securities. A minimum initial investment of $10,000 is
required, except for
qualified retirement plans which have a minimum initial
investment of $1,000.
(The Municipal Fund may not be a suitable investment for
retirement plans
because it invests primarily in municipal securities.)
Subsequent investments
must be in amounts of at least $500.
Each Fund attempts to stabilize the value of a share at
$1.00. Shares are
currently sold and redeemed at that price.
INVESTMENT INFORMATION
INVESTMENT OBJECTIVE
Except for the Municipal Fund, the investment objective of
each Fund is current
income consistent with stability of principal and liquidity.
The investment
objective of the Municipal Fund is current income exempt
from federal regular
income tax consistent with stability of principal. An
investment objective
cannot be changed without shareholder approval. While there
is no assurance that
a Fund will achieve its investment objective, each endeavors
to do so by
following the investment policies described in this
prospectus.
INVESTMENT POLICIES
Each Fund pursues its investment objective by investing only
in money market
securities maturing in 13 months or less. All securities
must be denominated and
payable in U.S. dollars. The average maturity of the
securities in each Fund's
portfolio, computed on a dollar-weighted basis, will be 90
days or less. The
Municipal Fund has a fundamental policy that at least 80% of
its annual interest
income will be exempt from federal regular income tax.
(Federal regular income
tax does not include the federal individual alternative
minimum tax or the
alternative minimum tax for corporations.) Unless indicated
as fundamental,
investment policies may be changed by the Company's Board of
Directors without
shareholder approval, but shareholders would be notified
before any material
change was made.
The Treasury Fund will limit its investments to those which,
if owned directly,
pay interest exempt from state personal income tax.
Therefore, dividends paid by
the Treasury Fund may be exempt from state personal income
tax.
ACCEPTABLE INVESTMENTS
The Prime Fund invests in high quality money market
instruments that are either
rated in one of the two highest short-term rating categories
by one or more
nationally recognized statistical rating organizations
("NRSROs") or are of
comparable quality to securities having such ratings.
Examples of these
instruments include, but are not limited to: domestic issues
of corporate debt
obligations, including variable rate demand notes;
commercial paper (including
Canadian Commercial Paper and Europaper); certificates of
deposit, demand and
time deposits, bankers' acceptances and other instruments of
domestic and
foreign banks and other deposit institutions ("Bank
Instruments"); short-term
credit facilities; asset-backed securities; obligations
issued or guaranteed as
to payment of principal and interest by the U.S. government
or one of its
agencies or instrumentalities; and other money market
instruments.
The Treasury Fund invests only in U.S. Treasury bills,
notes, and bonds, which
are fully guaranteed as to principal and interest by the
United States.
The Government Fund invests only in U.S. government
securities. These
instruments are either issued or guaranteed by the U.S.
government, its agencies
or instrumentalities, and include: U.S. Treasury bills,
notes, and bonds;
discount notes of U.S. government agencies or
instrumentalities such as Farm
Credit Loan Banks; Federal Home Loan Mortgage Corporation;
Federal National
Mortgage Association; Government National Mortgage
Association; Financing Bank;
The Student Loan Marketing Association; National Credit
Union Administration;
and Tennessee Valley Authority. Some government agency
securities are backed by
the full faith and credit of the U.S. Treasury, while others
are supported by:
the agency's right to borrow an amount limited to a specific
line of credit from
the U.S. Treasury; the discretionary authority of the U.S.
government to
purchase certain of the agency's obligations; or the
agency's credit.
The Municipal Fund invests primarily in municipal securities
issued by or on
behalf of states, territories, and possessions of the United
States, including
the District of Columbia, and any political subdivision or
financing authority
of any of these, the income from which is, in the opinion of
qualified legal
counsel, exempt from federal regular income tax. These
securities must be rated
in one of the two highest short-term rating categories by
one or more NRSRO's or
be of comparable quality to securities having such ratings.
Examples of
municipal securities include, but are not limited to: tax
and revenue
anticipation notes issued to finance working capital needs
in anticipation of
receiving taxes or other revenues; bond anticipation notes
that are intended to
be refinanced through a later issuance of longer-term bonds;
municipal
commercial paper and other short-term notes; variable rate
demand notes;
municipal bonds (including bonds having serial maturities
and pre-refunded
bonds) and leases; and participation, trust, and partnership
interests in any of
the foregoing obligations.
RATINGS
An NRSRO's two highest rating categories are determined
without regard for
sub-categories and gradations. For example, securities rated
A-1+, A-1, A-2,
SP-1+, SP-1, or SP-2 by Standard & Poor's Ratings Group
("S&P"), Prime-1,
Prime-2, MIG-1, or MIG-2 by Moody's Investors Service, Inc.
("Moody's"), or F-1
(+ or_-) , F-2 (+ or_-), FIN-1+, FIN-1, or Fin-2 by Fitch
Investors Service,
Inc. ("Fitch") are all considered rated in one of the two
highest short-term
rating categories. The Prime Fund will limit its investments
in securities rated
in the second highest short-term rating category e.g., A-2
by S&P, Prime-2 by
Moody's, or F-2 (+ or_-) by Fitch, to not more than 5% of
its total assets, with
not more than 1% invested in the securities of any one
issuer.
The Prime and Municipal Funds will follow applicable
regulations in determining
whether a security rated by more than one NRSRO can be
treated as being in one
of the two highest short-term rating categories; currently,
such securities must
be rated by two NRSROs in one of their two highest rating
categories. See
"Regulatory Compliance."
VARIABLE RATE DEMAND NOTES
Variable rate demand notes are long-term debt instruments
that have variable or
floating interest rates and provide the Prime Fund or the
Municipal Fund with
the right to tender the security for repurchase at its
stated principal amount
plus accrued interest. Such securities typically bear
interest at a rate that is
intended to cause the securities to trade at par. The
interest rate may float or
be adjusted at regular intervals (ranging from daily to
annually), and is
normally based on a published interest rate or interest rate
index. Most
variable rate demand notes allow the Prime Fund and the
Municipal Fund to demand
the repurchase of the security on not more than seven days
prior notice. Other
notes only permit these Funds to tender the security at the
time of each
interest rate adjustment or at other fixed intervals. See
"Demand Features." The
Prime Fund and the Municipal Fund treat variable rate demand
notes as maturing
on the later of the date of the next interest rate
adjustment or the date on
which the Fund may next tender the security for repurchase.
BANK INSTRUMENTS
The Prime Fund only invests in Bank Instruments either
issued by an institution
having capital, surplus and undivided profits over $100
million, or insured by
the Bank Insurance Fund ("BIF") or the Savings Association
Insurance Fund
("SAIF"). Bank Instruments may include Eurodollar
Certificates of Deposit
("ECDs"), Yankee Certificates of Deposit ("Yankee CDs") and
Eurodollar Time
Deposits ("ETDs"). The Prime Fund will treat securities
credit enhanced with a
bank's letter of credit as Bank Instruments.
ECDs, ETDs, Yankee CDs, Canadian Commercial Paper and
Europaper are subject to
different risks than domestic obligations of domestic banks
or corporations.
Examples of these risks include international economic and
political
developments, foreign governmental restrictions that may
adversely affect the
payment of principal or interest, foreign withholding or
other taxes on interest
income, difficulties in obtaining or enforcing a judgment
against the issuing
entity, and the possible impact of interruptions in the flow
of international
currency transactions. Risks may also exist for ECDs, ETDs,
and Yankee CDs
because the banks issuing these instruments, or their
domestic or foreign
branches, are not necessarily subject to the same regulatory
requirements that
apply to domestic banks, such as reserve requirements, loan
limitations,
examinations, accounting, auditing, recordkeeping, and the
public availability
of information. These factors will be carefully considered
by the Prime Fund's
adviser in selecting investments for the Fund.
ASSET-BACKED SECURITIES
Asset-backed securities are securities issued by special
purpose entities whose
primary assets consist of a pool of loans or accounts
receivable. The securities
may take the form of beneficial interests in special purpose
trusts, limited
partnership interests, or commercial paper or other debt
securities issued by a
special purpose corporation. Although the securities often
have some form of
credit or liquidity enhancement, payments on the securities
depend predominantly
upon collections of the loans and receivables held by the
issuer.
SHORT-TERM CREDIT FACILITIES
The Prime Fund may enter into, or acquire participations in,
short-term
borrowing arrangements with corporations, consisting of
either a short-term
revolving credit facility or a master note agreement payable
upon demand. Under
these arrangements, the borrower may reborrow funds during
the term of the
facility. The Prime Fund treats any commitments to provide
such advances as a
standby commitment to purchase the borrower's notes.
REPURCHASE AGREEMENTS
Certain securities in which the Funds invest may be
purchased pursuant to
repurchase agreements. Repurchase agreements are
arrangements in which banks,
broker/dealers, and other recognized financial institutions
sell securities to
the Funds and agree at the time of sale to repurchase them
at a mutually agreed
upon time and price. To the extent that the seller does not
repurchase the
securities from a Fund, the Fund could receive less than the
repurchase price on
any sale of such securities.
CREDIT ENHANCEMENT
Certain of the Prime Fund's and the Municipal Fund's
acceptable investments may
be credit enhanced by a guaranty, letter of credit, or
insurance. The Funds
typically evaluate the credit quality and ratings of credit
enhanced securities
based upon the financial condition and ratings of the party
providing the credit
enhancement (the "credit enhancer"), rather than the issuer.
Generally, the
Funds will not treat credit enhanced securities as having
been issued by the
credit enhancer for diversification purposes. However, under
certain
circumstances applicable regulations may require the Funds
to treat the
securities as having been issued by both the issuer and the
credit enhancer. The
bankruptcy, receivership, or default of the credit enhancer
will adversely
affect the quality and marketability of the underlying
security.
DEMAND FEATURES
The Prime Fund and the Municipal Fund may acquire securities
that are subject to
puts and standby commitments ("demand features") to purchase
the securities at
their principal amount (usually with accrued interest)
within a fixed period
(usually seven days) following a demand by the Funds. The
demand feature may be
issued by the issuer of the underlying securities, a dealer
in the securities,
or by another third party, and may not be transferred
separately from the
underlying security. The Funds use these arrangements to
provide the Funds with
liquidity and not to protect against changes in the market
value of the
underlying securities. The bankruptcy, receivership, or
default by the issuer of
the demand feature, or a default on the underlying security
or other event that
terminates the demand feature before its exercise, will
adversely affect the
liquidity of the underlying security. Demand features that
are exercisable even
after a payment default on the underlying security may be
treated as a form of
credit enhancement.
WHEN-ISSUED AND DELAYED DELIVERY
TRANSACTIONS
Each of the Funds may purchase securities on a when-issued
or delayed delivery
basis. These transactions are arrangements in which a Fund
purchases securities
with payment and delivery scheduled for a future time. The
seller's failure to
complete these transactions may cause a Fund to miss a price
or yield considered
to be advantageous. Settlement dates may be a month or more
after entering into
these transactions, and the market values of the securities
purchased may vary
from the purchase prices. Accordingly, a Fund may pay more
or less than
the market value of the securities on the settlement date. A
Fund may dispose of
a commitment prior to settlement if the adviser deems it
appropriate to do so.
In addition, a Fund may enter into transactions to sell its
purchase commitments
to third parties at current market values and simultaneously
acquire other
commitments to purchase similar securities at later dates. A
Fund may realize
short-term profits or losses upon the sale of such
commitments.
LENDING OF PORTFOLIO SECURITIES
As a matter of fundamental policy, in order to generate
additional income, the
Prime Fund and the Government Fund may lend their portfolio
securities on a
short-term or long-term basis, or both, to broker/dealers,
banks, or other
institutional borrowers of securities. The Funds will only
enter into loan
arrangements with broker/dealers, banks, or other
institutions which the adviser
has determined are creditworthy under guidelines established
by the Funds'
Directors and will receive collateral at all times equal to
at least 100% of the
value of the securities loaned.
There is the risk that when lending portfolio securities,
the securities may not
be available to a Fund on a timely basis and the Fund may,
therefore, lose the
opportunity to sell the securities at a desirable price. In
addition, in the
event that a borrower of securities would file for
bankruptcy or become
insolvent, disposition of the securities may be delayed
pending court action.
CONCENTRATION OF INVESTMENTS
As a matter of fundamental policy, the Prime Fund may invest
25% or more of its
total assets in commercial paper issued by finance
companies. The finance
companies in which the Prime Fund intends to invest can be
divided into two
categories, commercial finance companies and consumer
finance companies.
Commercial finance companies are principally engaged in
lending to corporations
or other businesses. Consumer finance companies are
primarily engaged in lending
to individuals. Captive finance companies or finance
subsidiaries which exist to
facilitate the marketing and financial activities of their
parent will, for
purposes of industry concentration, be classified in the
industry of their
parent's corporation. In addition, the Prime Fund may invest
25% or more of the
value of its total assets in instruments 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.
MORE ABOUT THE MUNICIPAL FUND
PARTICIPATION INTERESTS
The Municipal Fund may purchase interests in municipal
securities from financial
institutions such as commercial and investment banks,
savings and loan
associations, and insurance companies. These interests may
take the form of
participations, beneficial interests in a trust, partnership
interests or any
other form of indirect ownership that allows the Fund to
treat the income from
the investment as exempt from federal income tax. The
Municipal Fund invests in
these participation interests in order to obtain credit
enhancement or demand
features that would not be available through direct
ownership of the underlying
municipal securities.
MUNICIPAL LEASES
Municipal leases are obligations issued by state and local
governments or
authorities to finance the acquisition of equipment and
facilities. They may
take the form of a lease, an installment purchase contract,
a conditional sales
contract, or a participation interest in any of the above.
TEMPORARY INVESTMENTS
From time to time, when the investment adviser determines
that market conditions
call for a
temporary defensive posture, the Municipal Fund may invest
in tax-exempt or
taxable securities such as: obligations issued by or on
behalf of municipal or
corporate issuers having the same quality characteristics as
described above;
obligations issued or guaranteed by the U.S. government, its
agencies, or
instrumentalities; instruments issued by a U.S. branch of a
domestic bank or
other deposit institution having capital, surplus, and
undivided profits in
excess of $100,000,000 at the time of investment; and
repurchase agreements.
Although the Fund is permitted to make taxable, temporary
investments, there is
no current intention to do so. However, the interest from
certain municipal
securities is subject to the federal alternative minimum
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.
Yields on municipal securities depend on a variety of
factors, including: the
general conditions of the short-term 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
credit enhancers of
either, to meet their obligations for the payment of
interest and principal when
due. In addition, from time to time, the supply of municipal
securities
acceptable for purchase by the Fund could become limited.
The Municipal Fund may invest in municipal securities which
are repayable out of
revenue streams generated from economically related projects
or facilities
and/or whose issuers are located in the same state. Sizable
investments in these
municipal securities could involve an increased risk to the
Fund should any of
these related projects or facilities experience financial
difficulties.
Obligations of issuers of municipal securities are subject
to the provisions of
bankruptcy, insolvency, and other laws affecting the rights
and remedies of
creditors. In addition, the obligations of such issuers may
become subject to
laws enacted in the future by Congress, state legislators,
or referenda
extending the time for payment of principal and/or interest,
or imposing other
constraints upon enforcement of such obligations or upon the
ability of states
or municipalities to levy taxes. There is also the
possibility that, as a result
of litigation or other conditions, the power or ability of
any issuer to pay,
when due, the principal of and interest on its municipal
securities may be
materially affected.
NON-DIVERSIFICATION
The Municipal Fund is non-diversified. An investment in the
Fund, therefore,
will entail greater risk than would exist if it were
diversified 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. However, the Municipal Fund intends to comply with
Subchapter M of the
Internal Revenue Code. This undertaking requires that, at
the end of each
quarter of each 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 and that with respect to the remainder of the
Fund's total assets,
no more than 25% of its total assets are invested in the
securities of a single
issuer.
INVESTMENT LIMITATIONS
Each Fund may borrow money directly or through reverse
repurchase agreements
(arrangements in which a Fund sells a security for a
percentage of its cash
value with an agreement to buy it back on a set date) in
amounts of up to
one-third of the value of its total assets, and may pledge
up to 10% of its
total assets to secure such borrowings.
The Prime Fund and the Municipal Fund may invest in
restricted securities.
However, neither Fund may invest more than 10% of its total
assets in these
securities, except for Section 4(2) commercial paper in the
case of the Prime
Fund, and except for restricted securities determined to be
liquid under
criteria established by the Directors in the case of the
Municipal Fund.
The above investment limitations cannot be changed without
shareholder approval.
The following limitation, however, may be changed by the
Directors without
shareholder approval. Shareholders would be notified before
any material change
was made.
None of the Funds will invest more than 10% of its net
assets in illiquid
securities, including repurchase agreements providing for
settlement in more
than seven days after notice.
REGULATORY COMPLIANCE
Each Fund may follow non-fundamental operational policies
that are more
restrictive than its fundamental investment limitations, as
set forth in this
prospectus and each Statement of Additional Information, in
order to comply with
applicable laws and regulations, including the provisions of
and regulations
under the Investment Company Act of 1940, as amended. In
particular, each Fund
will comply with the various requirements of Rule 2a-7 which
regulates money
market mutual funds. For example, with limited exceptions,
Rule 2a-7 prohibits
the investment of more than 5% of the Prime Fund's total
assets in the
securities of any one issuer, although the Fund's investment
limitation only
requires such 5% diversification with respect to 75% of its
assets. A Fund will
invest more than 5% of its assets in any one issuer only
under the circumstances
permitted by Rule 2a-7. Also, each Fund will determine the
effective maturity of
its investments, and the Prime and Municipal Funds will
determine their ability
to consider a security as having received the requisite
short-term ratings by
NRSROs, according to Rule 2a-7. Each Fund may change these
operational policies
to reflect changes in the laws and regulations without the
approval of its
shareholders.
CASH TRUST SERIES, INC.
INFORMATION
MANAGEMENT OF CASH TRUST
SERIES, INC.
BOARD OF DIRECTORS
The Company is managed by a Board of Directors. The
Directors are responsible
for managing each Fund's business affairs and for exercising
all the Company's
powers except those reserved for the shareholders. The
Executive Committee of
the Board of Directors handles the Board's responsibilities
between meetings of
the Board.
INVESTMENT ADVISER
Investment decisions for each Fund are made by Federated
Advisers, the
investment adviser, subject to direction by the Directors.
The adviser
continually conducts investment research and supervision for
each Fund and is
responsible for the purchase and sale of portfolio
instruments.
ADVISORY FEES
The adviser receives an annual investment advisory fee equal
to .50 of 1% of
each Fund's average daily net assets. The adviser has
undertaken to reimburse
each Fund up to the amount of the advisory fee for operating
expenses in excess
of limitations established by certain states. The adviser
also may voluntarily
choose to waive a portion of its fee or reimburse other
expenses of a Fund, but
reserves the right to terminate such waiver or reimbursement
at any time at its
sole discretion.
ADVISER'S BACKGROUND
Federated Advisers is a subsidiary of Federated Investors.
All of the voting
securities of Federated Investors are owned by a trust, the
trustees of which
are John F. Donahue, his wife, and his son, J. Christopher
Donahue, who is
President and Trustee of Federated Investors.
Federated Advisers and other subsidiaries of Federated
Investors serve as
investment advisers to a number of investment companies and
private accounts.
Certain other subsidiaries also provide administrative
services to a number of
investment companies. With over $72 billion invested across
more than 260 funds
under management and/or administration by its subsidiaries,
as of December 31,
1994, Federated Investors is one of the largest mutual fund
investment managers
in the United States. With more than 1,750 employees,
Federated continues to be
led by the management who founded the company in 1955.
Federated funds are
presently at work in and through 4,000 financial
institutions nationwide. More
than 100,000 investment professionals have selected
Federated funds for their
clients.
Both the Company and the adviser have adopted strict codes
of ethics governing
the conduct of all employees who manage the Funds and their
portfolio
securities. These codes recognize that such persons owe a
fiduciary duty to the
Funds' shareholders and must place the interests of
shareholders ahead of the
employees' own interest. Among other things, the codes:
require preclearance and
periodic reporting of personal securities transactions;
prohibit personal
transactions in securities being purchased or sold, or being
considered for
purchase or sale, by the Funds; prohibit purchasing
securities in initial public
offerings; and prohibit taking profits on securities held
for less than sixty
days. Violations of the codes are subject to review by the
Directors, and could
result in severe penalties.
DISTRIBUTION OF SHARES
Federated Securities Corp. is the principal distributor for
shares of each 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.
DISTRIBUTION AND SHAREHOLDER
SERVICES
Under a distribution plan adopted in accordance with
Investment Company Act Rule
12b-1 (the "Distribution Plan"), each Fund may pay to the
distributor an amount,
computed at an annual rate of .35 of 1% of the average daily
net asset value of
the Fund 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
services or
distribution-related support as agents for their clients or
customers.
The Distribution Plan is a compensation-type plan. As such,
no Fund makes no
payments to the distributor except as described above.
Therefore, a Fund does
not pay for unreimbursed expenses of the distributor,
including amounts expended
by the distributor in excess of amounts received by it from
a Fund, interest,
carrying or other financing charges in connection with
excess amounts expended,
or the distributor's overhead expenses. However, the
distributor may be able to
recover such amounts or may earn a profit from future
payments made by a Fund
under the Distribution Plan.
In addition, each Fund has entered into a Shareholder
Services Agreement with
Federated Shareholder Services, a subsidiary of Federated
Investors, under which
a Fund may make payments up to .25 of 1% of the average
daily net asset value of
a Fund to obtain personal services for shareholders and for
the maintenance of
shareholder accounts. Under the Shareholder Services
Agreement, Federated
Shareholders Services will either perform shareholder
services directly or will
select financial institutions to perform shareholder
services. From time to time
and for such periods as deemed appropriate, the amounts
stated above may be
reduced voluntarily. 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 each
Fund, the distributor, or Federated Shareholder Services, as
appropriate.
SUPPLEMENTAL PAYMENTS TO
FINANCIAL INSTITUTIONS
The distributor may also pay financial institutions a fee
for providing certain
services to shareholders or as financial assistance for
providing substantial
marketing and sales support. The support may include
sponsoring sales,
educational, and training seminars for employees of the
financial institution,
providing sales literature, and engineering computer
software programs that
emphasize the attributes of the Funds. Such financial
assistance will be
predicated upon the amount of shares of the Funds the
financial institution
sells or may sell and/or upon the type and nature of sales
or marketing support
furnished by the financial institution. Any payments made in
addition to the
amounts paid under the Plan(s) may be reimbursed by the
adviser or its
affiliates, and not the Funds.
ADMINISTRATION OF THE COMPANY
ADMINISTRATIVE SERVICES
Federated Administrative Services, a subsidiary of Federated
Investors, provides
administrative personnel and services (including certain
legal and accounting
services) necessary to operate the Funds. Federated
Administrative Services
provides these at an annual rate as specified below:
<TABLE>
<CAPTION>
AVERAGE AGGREGATE
MAXIMUM FEE DAILY NET ASSETS
<C> <S>
.15 of 1% on the first $250 million
.125 of 1% on the next $250 million
.10 of 1% on the next $250 million
.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. Average
aggregate daily net assets include those of all mutual funds
advised by
affiliates of Federated Investors. Federated Administrative
Services may choose
voluntarily to waive a portion of its fee.
CUSTODIAN
State Street Bank and Trust Company, Boston, MA is custodian
for the securities
and cash of each Fund.
TRANSFER AGENT AND DIVIDEND
DISBURSING AGENT
Federated Services Company, Boston, MA is transfer agent for
the shares of, and
dividend disbursing agent for, each Fund.
INDEPENDENT AUDITORS
The independent auditors for each Fund are Deloitte & Touche
LLP, Pittsburgh,
PA.
NET ASSET VALUE
Each Fund attempts to stabilize the net asset value of its
shares at $1.00 by
valuing its portfolio securities using the amortized cost
method. The net asset
value per share is determined by subtracting total
liabilities from total assets
and dividing the remainder by the number of shares
outstanding. The Funds cannot
guarantee that their net asset values will always remain at
$1.00 per share.
The net asset value is determined at 12:00 noon, 3:00 p.m.,
and 4:00 p.m.
(Eastern time) and as of the close of trading (normally 4:00
p.m., Eastern time)
on the New York Stock Exchange, Monday through Friday except
on New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day,
Thanksgiving Day, and Christmas Day.
HOW TO PURCHASE SHARES
Shares are sold at their net asset value, without a sales
load, next determined
after an order is received, on days on which the New York
Stock Exchange and the
Federal Reserve Wire System are open for business. Shares
may be purchased as
described below either through a financial institution (such
as a bank or
broker/dealer) or by wire or by check directly to the Funds,
with a minimum
initial investment of $10,000 or more and additional
investments of as little as
$500. The minimum initial investment for retirement plans is
only $1,000.
(Financial institutions may impose different minimum
investment requirements on
their customers.)
In connection with any sale, Federated Securities Corp. may
from time to time
offer certain items of nominal value to any shareholder or
investor. The Funds
reserve the right to reject any purchase request. An account
must be established
at a financial institution or by completing, signing, and
returning the new
account form available from the Funds before shares can be
purchased.
PURCHASING SHARES THROUGH A FINANCIAL INSTITUTION
Investors may purchase shares through a financial
institution which has a sales
agreement with the distributor. Orders are considered
received when a Fund
receives payment by wire or
converts payment by check from the financial institution
into federal funds. It
is the financial institution's responsibility to transmit
orders promptly.
Financial institutions may charge additional fees for their
services.
PURCHASING SHARES BY WIRE
Shares may be purchased by wire by calling the appropriate
Fund before 3:00 p.m.
(Eastern time). The order is considered received
immediately. Payment by federal
funds must be received before 3:00 p.m. (Eastern time) in
order to begin earning
dividends that same day. Federal funds should be wired as
follows: Federated
Services Company, c/o State Street Bank and Trust Company,
Boston, MA;
Attention; EDGEWIRE; For Credit to: (Fund Name); (Fund
Number) (this number can
be found on the account statement or by contacting the
Funds) Group Number or
Order Number; Nominee or Institution Name; and ABA Number
011000028. Shares
cannot be purchased by wire on holidays when wire transfers
are restricted.
PURCHASING SHARES BY MAIL
Shares may be purchased by sending a check made payable to
the name of the
appropriate Fund to: Federated Services Company P.O. Box
8600, Boston, MA
02266-8600. Orders by mail are considered received when
payment by check is
converted into federal funds (normally the business day
after the check is
received) and shares begin earning dividends the next day.
SPECIAL PURCHASE FEATURES
SYSTEMATIC INVESTMENT PROGRAM
A minimum of $500 can be automatically withdrawn
periodically from the
shareholder's checking account at an Automated Clearing
House ("ACH") member and
invested in a Fund's shares. Shareholders should contact
their financial
institution or the Funds to participate in this program.
HOW TO REDEEM SHARES
Shares are redeemed at their net asset value next determined
after a Fund
receives the redemption request. Redemptions will be made on
days on which the
Funds compute their net asset values. Redemption requests
must be received in
proper form and can be made as described below.
REDEEMING THROUGH A FINANCIAL INSTITUTION
Shares may be redeemed by contacting the shareholder's
financial institution.
Shares will be redeemed at the net asset value next
determined after Federated
Services Company receives the redemption request. According
to the shareholder's
instructions, redemption proceeds can be sent to the
financial institution or to
the shareholder by check or by wire. The financial
institution is responsible
for promptly submitting redemption requests and providing
proper written
redemption instructions. Customary fees and commissions may
be charged by the
financial institution for this service.
REDEEMING SHARES BY TELEPHONE
Redemptions in any amount may be made by calling the Funds
provided the Funds
have a properly completed authorization form. These forms
can be obtained from
Federated Securities Corp. Proceeds from redemption requests
received before
12:00 noon (Eastern time) will be wired the same day to the
shareholder's
account at a domestic commercial bank which is a member of
the Federal Reserve
System, but will not include that day's dividend. Proceeds
from redemption
requests received after that time will include that day's
dividends but will be
wired the following business day. Under limited
circumstances, arrangements may
be made with the distributor for same-day payment of
proceeds, without that
day's dividend, for redemption requests received before 2:00
p.m. (Eastern
time). Proceeds from redeemed shares purchased by check or
through an ACH member
will not be wired until that method of payment has cleared.
Telephone instructions will be recorded and, if reasonable
procedures are not
followed by the Funds, they may be liable for losses due to
unauthorized or
fraudulent telephone instructions. In the event of drastic
economic or market
changes, a shareholder may experience difficulty in
redeeming by telephone. If
this occurs, "Redeeming Shares By Mail" should be
considered. If at any time the
Funds shall determine it necessary to terminate or modify
the telephone
redemption privilege, shareholders would be promptly
notified.
REDEEMING SHARES BY MAIL
Shares may be redeemed in any amount by mailing a written
request together with
certificates, if issued, to: Fund Name, Federated Services
Company, P.O. Box
8600, Boston, MA 02266-8600.
The written request should state: Fund Name; the account
name as registered with
the Fund; the account number; and the number of shares to be
redeemed or the
dollar amount requested. All owners of the account must sign
the request exactly
as the shares are registered. Normally, a check for the
proceeds is mailed
within one business day, but in no event more than seven
days, after receipt of
a proper written redemption request. Dividends are paid up
to and including the
day that a redemption request is processed.
If share certificates have been issued, they should be sent
by insured mail with
the written request to: Federated Services Company, 500
Victory Road-2nd Floor,
North Quincy, MA 02171.
Shareholders requesting a redemption of any amount to be
sent to an address
other than that on record with the Funds, or a redemption
payable other than to
the shareholder of record must have their signatures
guaranteed by: a commercial
or savings bank, trust company or savings and loan
association whose deposits
are insured by an organization which is administered by the
Federal Deposit
Insurance Corporation; a member firm of a domestic stock
exchange; or any other
"eligible guarantor institution," as defined in the
Securities Exchange Act of
1934. The Funds do not accept signatures guaranteed by a
notary public.
SPECIAL REDEMPTION FEATURES
CHECK WRITING
Upon request, a checking account will be established to
allow shareholders to
redeem their Fund shares. A fee will be charged for this
service. The check
writing service allows the shareholder to receive the daily
dividend declared on
the shares to be redeemed until the check is presented to
State Street Bank for
payment. However, checks should never be made payable or
sent to State Street
Bank or a Fund to redeem shares, and a check may not be
written to close an
account. Canceled checks are sent to the shareholder each
month.
DEBIT CARD
Upon request, a debit account will be established. This
account allows
shareholders to redeem shares by using a debit card. A fee
will be charged to
the account for this service.
SYSTEMATIC WITHDRAWAL PROGRAM
If a shareholder's account has a value of at least $10,000,
a systematic
withdrawal program may be established whereby automatic
redemptions are made
from the account and transferred electronically to any
commercial bank, savings
bank, or credit union that is an ACH member. Shareholders
may apply for
participation in this program through their financial
institution or the Funds.
ACCOUNT AND SHARE
INFORMATION
DIVIDENDS
Dividends are declared daily and paid monthly. Dividends are
automatically
reinvested on payment dates in additional shares of the
Funds unless cash
payments are requested by writing to the Funds.
CAPITAL GAINS
The Funds do not expect to realize any capital gains or
losses. If capital gains
or losses were to occur, they could result in an increase or
decrease in
dividends. The Funds will distribute in cash or additional
shares any realized
net long-term capital gains at least once every 12 months.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Funds, Federated Services Company
maintains a share
account for each shareholder. Share certificates are not
issued unless requested
by contacting the Funds or Federated Services Company in
writing. Monthly
confirmations are sent to report transactions such as all
purchases and
redemptions as well as dividends paid during the month.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low
balances, if an account
balance falls below $10,000 due to shareholder redemptions,
the Funds may redeem
all of the remaining shares in that account (except accounts
maintained by
retirement plans) and pay the proceeds to the shareholder.
Before shares are
redeemed to close an account, the shareholder will be
notified in writing and
allowed 30 days to purchase additional shares to meet the
minimum requirement.
VOTING RIGHTS
Each share of the Company gives the shareholder one vote in
Director elections
and other matters submitted to shareholders for vote. All
shares of all classes
of each portfolio in the Company have equal voting rights,
except that in
matters affecting only a particular portfolio or class, only
shares of that
portfolio or class are entitled to vote. As a Maryland
corporation, the Company
is not required to hold annual shareholder meetings.
Shareholder approval will
be sought only for certain changes in the Company's or a
Fund's operation and
for the election of Directors under certain circumstances.
As of September 8,
1995, McDonald & Co. Securities, Inc., Cincinnati, Ohio, may
for certain
purposes be deemed to control the Municipal Fund because it
is owner of record,
in nominee name accounts for the benefit of their customers,
of certain shares
of the Municipal Fund.
Directors may be removed by the Directors or by shareholders
at a special
meeting. A special meeting of the shareholders for this
purpose shall be called
by the Directors upon the written request of shareholders
owning at least 10% of
the outstanding shares of the Company.
TAX INFORMATION
FEDERAL INCOME TAX
The Funds will pay no federal income tax because they expect
to meet
requirements of the Internal Revenue Code applicable to
regulated investment
companies and to receive the special tax treatment afforded
to such companies.
Each Fund will be treated as a single, separate entity for
federal income tax
purposes so that income (including capital gains) and losses
realized by one
Fund will not be combined for tax purposes with those
realized by any other
Fund.
Except for shareholders of the Municipal Fund, shareholders
not otherwise exempt
are required to pay federal income tax on any dividends and
other distributions
received. This applies whether dividends and distributions
are received in cash
or as additional shares.
Shareholders of the Municipal Fund are not required to pay
the federal regular
income tax on any dividends received from the Municipal Fund
that represent net
interest on tax-exempt municipal bonds. However, under the
Tax Reform Act of
1986, dividends representing net interest earned on certain
"private activity"
bonds issued after August 7, 1986, may be included in
calculating the federal
individual alternative minimum tax or the federal
alternative minimum tax for
corporations. The Municipal Fund may purchase all types of
municipal bonds,
including private activity bonds. The alternative minimum
tax 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.
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.
STATE AND LOCAL TAXES
Shareholders are urged to consult their own tax advisers
regarding the status of
their accounts under state and local tax laws.
The Funds are subject to Pennsylvania corporate franchise
taxes, but Fund shares
are exempt from personal property taxes imposed by counties,
municipalities, and
school districts in Pennsylvania.
OTHER STATE AND LOCAL TAXES
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 Funds advertise their yield and
effective yield, and the
Municipal Fund also advertises its tax-equivalent yield.
Yield represents the annualized rate of income earned on an
investment over a
seven-day period. It is the annualized dividends earned
during the period on an
investment shown as a percentage of the investment. The
effective yield is
calculated similarly to the yield, but when annualized, the
income earned by an
investment is assumed to be reinvested daily. The effective
yield will be
slightly higher than the yield because of the compounding
effect of this assumed
reinvestment. The tax-equivalent yield is calculated
similarly to the yield, but
it is adjusted to reflect the taxable yield that would have
to be earned to
equal the Municipal Fund's tax exempt yield, assuming a
specified tax rate.
Advertisements and sales literature may also refer to total
return. Total return
represents the change, over a specified period of time, in
the value of an
investment in a Fund after reinvesting all income
distributions. It is
calculated by dividing that change by the initial investment
and is expressed as
a percentage.
From time to time, the Funds may refer to ratings, rankings,
and other
information in certain financial publications and/or compare
the Funds'
performance to certain indices.
ADDRESSES
Cash Trust Series, Inc.
Federated Investors Tower
Pittsburgh, Pennsylvania 15222
DISTRIBUTOR
Federated Securities Corporation
Federated Investors Tower
Pittsburgh, PA 15222
INVESTMENT ADVISER
Federated Advisers
Federated Investors Tower
Pittsburgh, PA 15222
CUSTODIAN
State Street Bank and Trust Company
P.O. Box 8600
Boston, MA 02266-8600
TRANSFER AGENT AND DIVIDEND
DISBURSING AGENT
Federated Services Company
P.O. Box 8600
Boston, MA 02266-8600
INDEPENDENT AUDITORS
Deloitte & Touche LLP
One PPG Place
Pittsburgh, PA 15222
CASH TRUST
SERIES, INC.
PRIME CASH
SERIES
TREASURY CASH
SERIES
GOVERNMENT CASH
SERIES
MUNICIPAL CASH
SERIES
COMBINED
PROSPECTUS
Portfolios of
Cash Trust Series,
Inc.,
An Open-End
Management
Investment
Company
September 30,
1995
[LOGO] FEDERATED SECURITIES CORP.
DISTRIBUTOR
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Cusip 147551105
Cusip 147551402
Cusip 147551204
Cusip 147551303
G00861-01 (9/95)
<PAGE>
GOVERNMENT CASH SERIES
(A PORTFOLIO OF CASH TRUST SERIES, INC.)
PROSPECTUS
The shares of Government Cash Series (the "Fund") offered by
this prospectus
represent interests in a diversified portfolio of Cash Trust
Series, Inc. (the
"Company"), an open-end management investment company (a
mutual fund). The
Fund invests in short-term U.S. government securities to
achieve current
income consistent with stability of principal and liquidity.
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 OR
GUARANTEED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT
INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY.
INVESTMENT IN THESE
SHARES INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF
PRINCIPAL. THE
FUND ATTEMPTS TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00
PER SHARE; THERE
CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO DO SO.
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 September
30, 1995, 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, which is in paper form only, or a
paper copy of this
prospectus, if you have received your prospectus
electronically, free of
charge by calling 1-800-235-4669. To obtain other
information, or make
inquiries about the Fund, contact your financial
institution.
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 September 30, 1995
<PAGE>
TABLE OF CONTENTS
- ------------------------------------------------------------
- --------------------
INVESTING IN THE
FUND 8
-------------------
- -----------------
SUMMARY OF FUND EXPENSES 1
- ------------------------------------
Share Purchases
8
Through a
Financial Institution 8
FINANCIAL HIGHLIGHTS-- GOVERNMENT
CASH SERIES 2
- ------------------------------------ By Wire
8
By Mail
8
Systematic
Investment Program 8
GENERAL INFORMATION 3
- ------------------------------------
Minimum Investment
Required 9
Certificates and
Confirmations 9
INVESTMENT INFORMATION 3
- ------------------------------------
Dividends
9
Capital Gains
9
Investment Objective 3
Investment Policies 3 REDEEMING SHARES
9
-------------------
- -----------------
Acceptable Investments 3
Repurchase Agreements 4
When-Issued and Delayed Delivery Through a
Financial Institution 9
Transactions 4
Lending of Portfolio Securities 4 Receiving Payment
10
By Wire
10
Investment Limitations 4 By Mail
10
Regulatory Compliance 5 By Writing a
Check 10
By VISA Card
11
FUND INFORMATION 5
- ------------------------------------ Telephone
Redemption 11
By a Systematic
Withdrawal
Program
11
Management of the Fund 5 Accounts with Low
Balances 11
Board of Directors 5
Investment Adviser 5 SHAREHOLDER
INFORMATION 11
-------------------
- -----------------
Advisory Fees 5
Adviser's Background 5
Distribution of Shares 6 Voting Rights
11
Distribution and Shareholder
Services 6 TAX INFORMATION
12
-------------------
- -----------------
Supplemental Payments to
Financial Institutions 7
Administration of the Fund 7 Federal Income Tax
12
Administrative Services 7 Pennsylvania
Corporate and
Personal
Property Taxes 12
Custodian 7
Transfer Agent and Dividend Other State and
Local Taxes 12
Disbursing Agent 7
Independent Auditors 7
PERFORMANCE
INFORMATION 12
-------------------
- -----------------
NET ASSET VALUE 8
- ------------------------------------
ADDRESSES
13
-------------------
- -----------------
<PAGE>
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 pur-
chase price
or redemption proceeds, as
applicable)............................ None
Redemption Fee (as a percentage of amount redeemed, if
applicable). None
Exchange
Fee.......................................................
None
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fee (after waiver)
(1).................................. 0.42%
12b-1 Fee (after waiver)
(2)....................................... 0.10%
Total Other
Expenses...............................................
0.47%
Shareholder Services
Fee......................................... 0.25%
Total Fund Operating Expenses
(3).............................. 0.99%
</TABLE>
(1) The management fee has been reduced to reflect the
voluntary waiver of a
portion of the management fee. The adviser can terminate
its voluntary
waiver at any time at its sole discretion. The maximum
management fee is
0.50%.
(2) The maximum 12b-1 fee is 0.35%.
(3) The total Fund operating expenses would have been 1.07%
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 THE FUND
WILL BEAR, EITHER
DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF
THE VARIOUS COSTS
AND EXPENSES, SEE "CASH TRUST SERIES, INC. INFORMATION."
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) redemp-
tion at the end
of each time period............................ $10 $32
$55 $121
</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.
<PAGE>
GOVERNMENT CASH SERIES
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------
- -------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
The following table has been audited by Deloitte & Touche
LLP, the Fund's
independent auditors. Their report, dated July 14, 1995, on
the Fund's
financial statements for the year ended May 31, 1995, and on
the following
table for the periods presented, is included in the Annual
Report, which is
incorporated by reference. This table should be read in
conjunction with the
Fund's financial statements and notes thereto, which may be
obtained from the
Fund.
<TABLE>
<CAPTION>
YEAR ENDED MAY 31,
-----------------------------------
- ------------------
1995 1994 1993 1992
1991 1990(A)
- ----------------------- -------- -------- -------- --------
- -------- --------
<S> <C> <C> <C> <C>
<C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
$ 1.00 $ 1.00
- -----------------------
INCOME FROM INVESTMENT
OPERATIONS
- -----------------------
Net investment income 0.04 0.02 0.03 0.04
0.07 0.06
- -----------------------
LESS DISTRIBUTIONS
- -----------------------
Distributions from net
investment income (0.04) (0.02) (0.03) (0.04)
(0.07) (0.06)
- ----------------------- ------ ------ ------ ------
- ------ ------
NET ASSET VALUE, END OF $ 1.00 $ 1.00 $ 1.00 $ 1.00
$ 1.00 $ 1.00
PERIOD ------ ------ ------ ------
- ------ ------
- -----------------------
TOTAL RETURN (B) 4.43% 2.45% 2.54% 4.33%
6.80% 6.53%
- -----------------------
RATIOS TO AVERAGE NET
ASSETS
- -----------------------
Expenses 0.99% 0.99% 0.99% 0.98%
0.94% 0.73%(c)
- -----------------------
Net investment income 4.35% 2.41% 2.53% 4.25%
6.48% 7.74%(c)
- -----------------------
Expense
waiver/reimbursement
(d) 0.08% 0.09% 0.06% 0.06%
0.13% 0.32%(c)
- -----------------------
SUPPLEMENTAL DATA
- -----------------------
<CAPTION>
Net assets, end of
period (000 omitted)
- ----------------------- $453,096 $401,334 $400,231 $550,675
$631,718 $493,995
</TABLE>
(a) Reflects operations for the period from August 23, 1989,
(date of initial
public investment) to May 31, 1990.
(b) Based on net asset value, which does not reflect the
sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the
expense and net
investment income ratios shown above.
Further information about the Fund's performance is
contained in the Fund's
Annual Report dated May 31, 1995, which can be obtained free
of charge.
<PAGE>
GENERAL INFORMATION
- ------------------------------------------------------------
- -------------------
The Company was established as a Maryland corporation under
Articles of
Incorporation dated February 1, 1993. The Articles of
Incorporation permit the
Company to offer separate series of shares representing
interests in separate
portfolios of securities. The Fund is designed for customers
of financial
institutions such as banks, fiduciaries, custodians of
public funds,
investment advisers, and broker/dealers as a convenient
means of accumulating
an interest in a professionally managed, diversified
portfolio investing only
in short-term U.S. government securities. A minimum initial
investment of
$10,000 is required, except for retirement plans which have
a minimum initial
investment of $1,000. Subsequent investments must be in
amounts of at least
$500.
The Fund attempts to stabilize the value of a share at
$1.00. Shares are
currently sold and redeemed at that price.
INVESTMENT INFORMATION
- ------------------------------------------------------------
- -------------------
INVESTMENT OBJECTIVE
The investment objective of the Fund is current income
consistent with
stability of principal and liquidity. This investment
objective cannot be
changed without shareholder approval. While there is no
assurance that the
Fund will achieve its investment objective, it endeavors to
do so by following
the investment policies described in this prospectus.
INVESTMENT POLICIES
The Fund pursues its investment objective by investing only
in a portfolio of
U.S. government securities maturing in 13 months or less.
The average maturity
of the securities in the Fund's portfolio, computed on a
dollar-weighted
basis, will be 90 days or less. Unless indicated otherwise,
the investment
policies may be changed by the Directors without shareholder
approval.
Shareholders will be notified before any material change in
these policies
becomes effective.
ACCEPTABLE INVESTMENTS. The Fund invests only in U.S.
government securities.
These instruments are either issued or guaranteed by the
U.S. government, its
agencies, or instrumentalities. These securities include,
but are not limited
to:
. direct obligations of the U.S. Treasury, such as U.S.
Treasury bills,
notes, and bonds; and
. notes, bonds, and discount notes of U.S. government
agencies or
instrumentalities, such as the: Farm Credit System,
including the
National Bank for Cooperatives, Farm Credit Banks, and
Banks for
Cooperatives; Farmers Home Administration; Federal Home
Loan Banks;
Federal Home Loan Mortgage Corporation; Federal
National Mortgage
Association; Government National Mortgage Association;
and Student Loan
Marketing Association.
Some obligations issued or guaranteed by agencies or
instrumentalities of
the U.S. government, such as Government National Mortgage
Association
participation certificates, are backed by the full faith
and credit of the
U.S. Treasury. No assurances can be given that the U.S.
government
<PAGE>
will provide financial support to other agencies or
instrumentalities,
since it is not obligated to do so. These
instrumentalities are supported
by:
. the issuer's right to borrow an amount limited to a
specific line of
credit from the U.S. Treasury;
. discretionary authority of the U.S. government to
purchase certain
obligations of an agency or instrumentality; or
. the credit of the agency or instrumentality.
REPURCHASE AGREEMENTS. Certain securities in which the Fund
invests may be
purchased pursuant to repurchase agreements. Repurchase
agreements are
arrangements in which banks, broker/dealers, and other
recognized financial
institutions sell securities to the Fund and agree at the
time of sale to
repurchase them at a mutually agreed upon time and price. To
the extent that
the seller does not repurchase the securities from the Fund,
the Fund could
receive less than the repurchase price on any sale of such
securities.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may
purchase
securities on a when-issued or delayed delivery basis. These
transactions are
arrangements in which the Fund purchases securities with
payment and delivery
scheduled for a future time. The seller's failure to
complete these
transactions may cause the Fund to miss a price or yield
considered to be
advantageous. Settlement dates may be a month or more after
entering into
these transactions, and the market values of the securities
purchased may vary
from the purchase prices. Accordingly, the Fund may pay more
or less than the
market value of the securities on the settlement date.
The Fund may dispose of a commitment prior to settlement if
the adviser deems
it appropriate to do so. In addition, the Fund may enter
into transactions to
sell its purchase commitments to third parties at current
market values and
simultaneously acquire other commitments to purchase similar
securities at
later dates. The Fund may realize short-term profits or
losses upon the sale
of such commitments.
LENDING OF PORTFOLIO SECURITIES. In order to generate
additional income, the
Fund may lend its portfolio securities on a short-term or
long-term basis, or
both, to broker/dealers, banks, or other institutional
borrowers of
securities. The Fund will only enter into loan arrangements
with
broker/dealers, banks, or other institutions which the
adviser has determined
are creditworthy under guidelines established by the Fund's
Directors and will
receive collateral at all times equal to at least 100% of
the value of the
securities loaned. There is the risk that when lending
portfolio securities,
the securities may not be available to the Fund on a timely
basis and the Fund
may, therefore, lose the opportunity to sell the securities
at a desirable
price. In addition, in the event that a borrower of
securities would file for
bankruptcy or become insolvent, disposition of the
securities may be delayed
pending court action.
INVESTMENT LIMITATIONS
The Fund will not borrow money directly or through reverse
repurchase
agreements (arrangements in which the Fund sells a money
market 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 its
total assets to secure such borrowings.
<PAGE>
The above investment limitation cannot be changed without
shareholder
approval. The following limitation, however, may be changed
by the Directors
without shareholder approval. Shareholders will be notified
before any
material change in this limitation becomes effective.
The Fund will not invest more than 10% of its net assets in
illiquid
securities, including repurchase agreements providing for
settlement in more
than seven days after notice.
REGULATORY COMPLIANCE
The Fund may follow non-fundamental operational policies
that are more
restrictive than its fundamental investment limitations, as
set forth in this
prospectus and its Statement of Additional Information, in
order to comply
with applicable laws and regulations, including the
provisions of and
regulations under the Investment Company Act of 1940, as
amended. In
particular, the Fund will comply with the various
requirements of Rule 2a-7,
which regulates money market mutual funds. The Fund will
determine the
effective maturity of its investments according to Rule 2a-
7. The Fund may
change these operational policies to reflect changes in the
laws and
regulations without the approval of its shareholders.
CASH TRUST SERIES, INC. INFORMATION
- ------------------------------------------------------------
- -------------------
MANAGEMENT OF CASH TRUST SERIES, INC.
BOARD OF DIRECTORS. The Company is managed by a Board of
Directors. The
Directors are responsible for managing the Fund's business
affairs and for
exercising all the Company's powers except those reserved
for the
shareholders. An Executive Committee of the Board of
Directors handles the
Board's responsibilities between meetings of the Board.
INVESTMENT ADVISER. Investment decisions for the Fund are
made by Federated
Advisers, the Fund's investment adviser, subject to
direction by the
Directors. The adviser continually conducts investment
research and
supervision for the Fund and is responsible for the purchase
and sale of
portfolio instruments.
ADVISORY FEES. The adviser receives an annual investment
advisory fee
equal to .50 of 1% of the Fund's average daily net assets.
The adviser has
undertaken to reimburse the Fund up to the amount of the
advisory fee for
operating expenses in excess of limitations established by
certain states.
The adviser also may voluntarily choose to waive a portion
of its fee or
reimburse other expenses of the Fund, but reserves the
right to terminate
such waiver or reimbursement at any time at its sole
discretion.
ADVISER'S BACKGROUND. Federated Advisers, a Delaware
business trust,
organized on April 11, 1989, is a registered investment
adviser under the
Investment Advisers Act of 1940. It is a subsidiary of
Federated
Investors. All of the Class A (voting) shares of Federated
Investors are
owned by a trust, the trustees of which are John F.
Donahue, Chairman and
Trustee of Federated Investors, Mr. Donahue's wife, and
Mr. Donahue's son,
J. Christopher Donahue, who is President and Trustee of
Federated
Investors.
Federated Advisers and other subsidiaries of Federated
Investors serve as
investment advisers to a number of investment companies
and private
accounts. Certain other subsidiaries also provide
<PAGE>
administrative services to a number of investment
companies. With over $72
billion invested across more than 260 funds under
management and/or
administration by its subsidiaries, as of December 31,
1994, Federated
Investors is one of the largest mutual fund investment
managers in the
United States. With more than 1,750 employees, Federated
continues to be
led by the management who founded the company in 1955.
Federated funds are
presently at work in and through 4,000 financial
institutions nationwide.
More than 100,000 investment professionals have selected
Federated funds
for their clients.
Both the Company and the adviser have adopted strict codes
of ethics governing
the conduct of all employees who manage the Fund and its
portfolio securities.
These codes recognize that such persons owe a fiduciary duty
to the Fund's
shareholders and must place the interests of shareholders
ahead of the
employees' own interest. Among other things, the codes:
require preclearance
and periodic reporting of personal securities transactions;
prohibit personal
transactions in securities being purchased or sold, or being
considered for
purchase or sale, by the Fund; prohibit purchasing
securities in initial
public offerings; and prohibit taking profits on securities
held for less than
sixty days. Violations of the codes are subject to review by
the Directors,
and could result in severe penalties.
DISTRIBUTION OF 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.
State securities laws may require certain financial
institutions such as
depository institutions to register as dealers.
DISTRIBUTION AND SHAREHOLDER SERVICES. 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
.35 of 1% of the average daily net asset value of the Fund
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 services or distribution-
related support
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 amounts or may earn
a profit from
future payments made by the Fund under the Distribution
Plan.
In addition the Fund has entered into a Shareholder Services
Agreement with
Federated Shareholder Services, a subsidiary of Federated
Investors, under
which the Fund may make payments up to .25 of 1% of the
average daily net
asset value of the Fund to obtain personal services for
shareholders and for
the maintenance of shareholder accounts. Under the
Shareholder Services
Agreement, Federated
<PAGE>
Shareholders Services will either perform shareholder
services directly or
will select financial institutions to perform shareholder
services. From time
to time and for such periods as deemed appropriate, the
amounts stated above
may be reduced voluntarily. 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 Fund, the distributor, or Federated
Shareholder Services, as
appropriate.
SUPPLEMENTAL PAYMENTS TO FINANCIAL INSTITUTIONS. The
distributor may also pay
financial institutions a fee for providing certain services
to shareholders or
as financial assistance for providing substantial marketing
and sales support.
The support may include sponsoring sales, educational, and
training seminars
for employees of the financial institution, providing sales
literature, and
engineering computer software programs that emphasize the
attributes of the
Fund. Such financial assistance will be predicated upon the
amount of shares
of the Fund the financial institution sells or may sell
and/or upon the type
and nature of sales or marketing support furnished by the
financial
institution. Any payments made in addition to the amounts
paid under the
Plan(s) may be reimbursed by the adviser or its affiliates,
and not the Fund.
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 as
specified below:
<TABLE>
<CAPTION>
AVERAGE
AGGREGATE
MAXIMUM FEE DAILY
NET ASSETS
----------- -----------------
- ------------------
<S> <C>
.15 of 1% on the first $250
million
.125 of 1% on the next $250
million
.10 of 1% on the next $250
million
.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.
Average aggregate daily net assets include those of all
mutual funds advised
by affiliates of Federated Investors. Federated
Administrative Services may
choose voluntarily to waive a portion of its fee.
CUSTODIAN. State Street Bank and Trust Company, Boston, MA,
is custodian for
the securities and cash of the Fund.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated
Services Company,
Boston, MA, is transfer agent for the shares of, and
dividend disbursing agent
for, the Fund.
INDEPENDENT AUDITORS. The independent auditors for the Fund
are Deloitte &
Touche LLP, Pittsburgh, PA.
<PAGE>
NET ASSET VALUE
- ------------------------------------------------------------
- -------------------
The Fund attempts to stabilize the net asset value of its
shares at $1.00 by
valuing the portfolio securities using the amortized cost
method. The net
asset value per share is determined by subtracting total
liabilities from
total assets and dividing the remainder by the number of
shares outstanding.
The Fund cannot guarantee that its net asset value will
always remain at $1.00
per share.
The net asset value is determined at 12:00 noon, 3:00 p.m.
(Eastern time), and
as of the close of trading (normally 4:00 p.m., Eastern
time) on the New York
Stock Exchange, Monday through Friday, except on New Year's
Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day,
and Christmas Day.
INVESTING IN THE FUND
- ------------------------------------------------------------
- -------------------
SHARE PURCHASES
Shares are sold at their net asset value, without a sales
charge, next
determined after an order is received, on days on which the
New York Stock
Exchange and the Federal Reserve Wire System are open for
business. Shares may
be purchased as described below. Accounts may be opened
through a financial
institution (such as a bank or broker/dealer) or by
completing, signing, and
returning the new account form available from the Fund. In
connection with any
sale, Federated Securities Corp. may from time to time offer
certain items of
nominal value to any shareholder or investor. The Fund
reserves the right to
reject any purchase request.
THROUGH A FINANCIAL INSTITUTION. Investors may call their
financial
institutions to place an order. Orders through a financial
institution are
considered received when the Fund receives payment by wire
or converts payment
by check from the financial institution into federal funds.
It is the
financial institution's responsibility to transmit orders
promptly. Financial
institutions may charge additional fees for their services.
BY WIRE. To purchase by wire, call the Fund before 3:00 p.m.
(Eastern time) to
place an order. All information needed will be taken over
the telephone, and
the order is considered received immediately. Payment by
federal funds must be
received before 3:00 p.m. (Eastern time) that same day.
Federal funds should
be wired as follows: Federated Services Company, c/o State
Street Bank and
Trust Company, Boston, MA; Attention; EDGEWIRE; For Credit
to: Government Cash
Series; 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.
BY MAIL. To purchase by mail, send a check made payable to
Government Cash
Series to: Federated Services Company, Government Cash
Series, P.O. Box 8600,
Boston, MA 02266-8600. Orders by mail are considered
received when payment by
check is converted into federal funds. This is normally the
next business day
after the check is received.
SYSTEMATIC INVESTMENT PROGRAM. Under this program, funds in
a minimum of $500
are automatically withdrawn periodically from the
shareholder's checking
account at any Automated Clearing House member institution
and invested in
Fund shares.
<PAGE>
Shareholders should contact their financial institution
and/or the Fund to
participate in this program.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment is $10,000. The minimum
initial investment for
retirement plans is $1,000. Minimum subsequent investments
must be $500.
Minimum investments will be calculated by combining all
accounts maintained
with the Fund. The Fund may from time to time waive the
minimum investment
requirements.
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 by contacting the Fund or Federated Services
Company in writing.
Monthly confirmations are sent to report transactions such
as all purchases
and redemptions as well as dividends paid during the month.
DIVIDENDS
Dividends are declared daily and paid monthly. Dividends are
automatically
reinvested on payment dates in additional shares of the Fund
unless cash
payments are requested by writing to the Fund. Shares
purchased by wire before
3:00 p.m. (Eastern time) begin earning dividends that day.
Shares purchased by
check begin earning dividends the day after the check is
converted into
federal funds.
CAPITAL GAINS
The Fund does not expect to realize any capital gains or
losses. If capital
gains or losses were to occur, they could result in an
increase or decrease in
dividends. The Fund will distribute in cash or additional
shares any realized
net long-term capital gains at least once every 12 months.
REDEEMING SHARES
- ------------------------------------------------------------
- -------------------
Shares are redeemed 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 as described below.
THROUGH A FINANCIAL INSTITUTION
Shares may be redeemed by calling the shareholder's
financial institution.
Shares will be redeemed at the net asset value next
determined after Federated
Services Company receives the redemption request from the
financial
institution. The financial institution is responsible for
promptly submitting
redemption requests and providing proper written redemption
instructions. The
financial institution may charge customary fees and
commissions for this
service.
An authorization form permitting redemption requests by
telephone must first
be completed. Authorization forms and information on this
service are
available from Federated Securities Corp.
In the event of drastic economic or market changes, a
shareholder may
experience difficulty in redeeming by telephone. If this
occurs, another
method of redemption, such as "By Mail," should be
considered.
<PAGE>
RECEIVING PAYMENT. Pursuant to instructions from the
financial institution,
redemptions will be made by check or by wire.
BY WIRE. Proceeds for redemption requests received before
12:00 noon,
(Eastern time) will be wired the same day but will not be
entitled to that
day's dividend. Redemption requests received after 12:00
noon, (Eastern
time) will receive that day's dividends and will be wired
the following
business day.
BY MAIL
Shares may be redeemed by sending a written request to:
Government Cash
Series, P.O. Box 8600, Boston, MA 02266-8600. The written
request should
state: Government Cash Series; shareholder's name; the
account number; and the
share or dollar amount requested. Sign the request exactly
as the shares are
registered. Shareholders should call the Fund for assistance
in redeeming by
mail.
If share certificates have been issued, they should be sent
by insured mail
with the written request to: Federated Services Company, 500
Victory Road-2nd
Floor, North Quincy, MA 02171.
Shareholders requesting a redemption of any amount to be
sent to an address
other than that on record with the Fund, or a redemption
payable other than to
the shareholder of record must have their signatures
guaranteed by:
. a 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 the 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 the
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 within one
business day, but in
no event more than seven days, after receipt of a proper
written redemption
request. Dividends are paid up to and including the day that
a redemption
request is processed.
BY WRITING A CHECK. At the shareholder's request, a checking
account for
redeeming shares will be established. For further
information, contact State
Street Bank and Trust Company.
With this checking account, shares may be redeemed by
writing a check for $100
or more. The redemption will be made at the net asset value
on the date that
the check is presented to the Fund. A check may not be
written to close an
account. A shareholder may obtain cash by negotiating the
check through the
shareholder's local bank. Checks should never be made
payable or sent to State
Street Bank and Trust Company to redeem shares. Cancelled
checks are sent to
the shareholder each month.
<PAGE>
BY VISA CARD. At the shareholder's request, State Street
Bank and Trust
Company will establish a VISA account. This account allows a
shareholder to
redeem shares by using a VISA card. A fee, determined by
State Street Bank and
Trust Company, will be charged to the account for this
service. For further
information, contact the Fund.
TELEPHONE REDEMPTION
Shares may be redeemed by telephoning the Fund. Telephone
instructions may be
recorded and 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
requests must first
be completed. Authorization forms and information on this
service are
available from Federated Securities Corp.
If the redemption request is received before 12:00 noon
(Eastern time), the
proceeds will be wired the same day to the shareholder's
account at a domestic
commercial bank which is a member of the Federal Reserve
System, and those
shares redeemed will not be entitled to that day's dividend.
A daily dividend
will be paid on shares redeemed if the redemption request is
received after
12:00 noon (Eastern time). However, the proceeds are not
wired until the
following business day. Under limited circumstances,
arrangements may be made
with the distributor for same-day payment of proceeds,
without that day's
dividend, for redemption requests received before 12:00 noon
(Eastern time).
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. If at
any time the Fund shall determine it necessary to terminate
or modify this
method of redemption, shareholders would be promptly
notified.
BY A SYSTEMATIC WITHDRAWAL PROGRAM
If a shareholder's account has a value of at least $10,000,
a systematic
withdrawal program may be established whereby automatic
redemptions are made
from the account and transferred electronically to any
commercial bank,
savings bank, or credit union that is an Automated Clearing
House member.
Shareholders may apply for participation in this program
through their
financial institution.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low
balances, the Fund may
redeem shares in any account, except accounts maintained by
retirement plans,
and pay the proceeds to the shareholder if the account
balance falls below a
required minimum value of $10,000 due to shareholder
redemptions.
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
Director elections
and other matters submitted to shareholders for vote. All
shares of each
portfolio in the Company have equal voting
<PAGE>
rights, except that in matters affecting only a particular
portfolio, only
shares of that portfolio are entitled to vote. As a Maryland
corporation, the
Company is not required to hold annual shareholder meetings.
Shareholder
approval will be sought only for certain changes in the
Company's or the
Fund's operation and for the election of Directors, under
certain
circumstances.
Directors may be removed by the Directors or by shareholders
at a special
meeting. A special meeting of the shareholders for this
purpose shall be
called by the Directors upon the written request of
shareholders owning at
least 10% of the outstanding shares of the Company.
TAX INFORMATION
- ------------------------------------------------------------
- -------------------
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects
to meet
requirements of the Internal Revenue 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
Company's other portfolios will not be combined for tax
purposes with those
realized by the Fund.
Unless otherwise exempt, shareholders are required to pay
federal income tax
on any dividends and other distributions received. This
applies whether
dividends and distributions are received in cash or as
additional shares.
PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES
Shares are exempt from personal property taxes imposed by
counties,
municipalities, and school districts in Pennsylvania.
OTHER STATE AND LOCAL TAXES. 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 yield and
effective yield.
Yield represents the annualized rate of income earned on an
investment over a
seven-day period. It is the annualized dividends earned
during the period on
an investment shown as a percentage of the investment. The
effective yield is
calculated similarly to the yield, but when annualized, the
income earned by
an investment is assumed to be reinvested daily. The
effective yield will be
slightly higher than the yield because of the compounding
effect of this
assumed reinvestment.
Advertisements and sales literature may also refer to total
return. Total
return represents the change, over a specified period of
time, in the value of
an investment in the Fund after reinvesting all income
distributions. It is
calculated by dividing that change by the initial investment
and is expressed
as a percentage.
From time to time, advertisements for the Fund may refer to
ratings, rankings,
and other information in certain financial publications
and/or compare the
Fund's performance to certain indices.
<PAGE>
ADDRESSES
- ------------------------------------------------------------
- --------------------
Cash Trust Series, Inc. Federated
Investors Tower
Pittsburgh, PA 15222-3779
- ------------------------------------------------------------
- --------------------
Distributor
Federated Securities Corporation Federated
Investors Tower
Pittsburgh, PA 15222-3779
- ------------------------------------------------------------
- --------------------
Investment Adviser
Federated Advisers Federated
Investors Tower
Pittsburgh, PA 15222-3779
- ------------------------------------------------------------
- --------------------
Custodian
State Street Bank and Trust Company
P.O. Box
8600 Boston, MA
02266-8600
- ------------------------------------------------------------
- --------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company
P.O. Box
8600 Boston, MA
02266-8600
- ------------------------------------------------------------
- --------------------
Independent Public Accountants
Deloitte & Touche LLP 2500 One
PPG Place
Pittsburgh, PA 15222
- ------------------------------------------------------------
- --------------------
<PAGE>
GOVERNMENT CASH
SERIES
PROSPECTUS
A Diversified
Portfolio of
Cash Trust Series,
Inc., an Open-End
Management
Investment Company
September 30, 1995
[LOGO] FEDERATED SECURITIES CORP.
DISTRIBUTOR
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Cusip 147551204
9080103A (9/95)
<PAGE>
MUNICIPAL CASH SERIES
(A PORTFOLIO OF CASH TRUST SERIES, INC.)
PROSPECTUS
The shares of Municipal Cash Series (the "Fund") offered by
this prospectus
represent interests in a non-diversified portfolio of Cash
Trust Series, Inc.
(the "Company"), an open-end management investment company
(a mutual fund).
The Fund invests in short-term municipal securities to
achieve current income
exempt from federal regular income tax consistent with
stability of principal.
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 OR
GUARANTEED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT
INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY.
INVESTMENT IN THESE
SHARES INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF
PRINCIPAL. THE
FUND ATTEMPTS TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00
PER SHARE; THERE
CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO DO SO.
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 September
30, 1995, 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, which is in paper form only, or a
paper copy of this
prospectus, if you have received your prospectus
electronically, free of
charge by calling 1-800-235-4669. To obtain other
information, or make
inquiries about the Fund, contact your financial
institution.
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 September 30, 1995
<PAGE>
TABLE OF CONTENTS
- ------------------------------------------------------------
- --------------------
SUMMARY OF FUND EXPENSES 1 Custodian
10
- -------------------------------------
Transfer Agent
and Dividend
Disbursing
Agent 10
FINANCIAL HIGHLIGHTS-- MUNICIPAL Independent
Auditors 10
CASH SERIES 2
- -------------------------------------
NET ASSET VALUE
10
------------------
- -------------------
GENERAL INFORMATION 3
- -------------------------------------
INVESTING IN THE
FUND 10
------------------
- -------------------
INVESTMENT INFORMATION 3
- -------------------------------------
Share Purchases
10
Through a
Financial Institution 11
Investment Objective 3
Investment Policies 3
By Wire
11
Acceptable Investments 3
By Mail
11
Variable Rate Demand Notes 4
Systematic
Investment Program 11
Participation Interests 4
Municipal Leases 4
Minimum
Investment Required 11
Ratings 4
Certificates and
Confirmations 11
Credit Enhancement 4
Demand Features 5 Dividends
11
When-Issued and Delayed Capital Gains
12
Delivery
Transactions 5 REDEEMING SHARES
12
------------------
- -------------------
Restricted and Illiquid
Securities 5
Through a
Financial Institution 12
Temporary Investments 5
Municipal Securities 6
Receiving
Payment 12
Investment Risks 6
By Wire
12
Non-Diversification 7
By Mail
12
Investment Limitations 7
By Writing a
Check 13
Regulatory Compliance 7
By VISA Card
13
FUND INFORMATION 7 Telephone
Redemption 13
- -------------------------------------
By a Systematic
Withdrawal
Program
14
Management of the Fund 7 Accounts with Low
Balances 14
Board of Directors 7
SHAREHOLDER
INFORMATION 14
Investment Adviser 8 ------------------
- -------------------
Advisory Fees 8
Adviser's Background 8
Voting Rights
14
Distribution of Shares 8
Distribution and Shareholder
Services 9 TAX INFORMATION
14
------------------
- -------------------
Supplemental Payments to Financial
Institutions 9
Administration of the Fund 9 Federal Income
Tax 14
Administrative Services 9 Pennsylvania
Corporate and
Personal
Property Taxes 15
Other State and
Local Taxes 15
PERFORMANCE
INFORMATION 15
------------------
- -------------------
ADDRESSES
16
------------------
- -------------------
<PAGE>
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 pur-
chase price
or redemption proceeds, as
applicable)............................ None
Redemption Fee (as a percentage of amount redeemed, if
applicable). None
Exchange
Fee.......................................................
None
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fee (after waiver)
(1).................................. 0.45%
12b-1 Fee (after waiver)
(2)....................................... 0.10%
Total Other
Expenses...............................................
0.44%
Shareholder Services
Fee......................................... 0.25%
Total Fund Operating Expenses
(3).............................. 0.99%
</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
0.50%.
(2) The maximum 12b-1 fee is 0.35%.
(3) The total Fund operating expenses would have been 1.04%
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 THE FUND
WILL BEAR, EITHER
DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF
THE VARIOUS COSTS
AND EXPENSES, SEE "CASH TRUST SERIES, INC. INFORMATION."
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) redemp-
tion at the end of each time period............ $10 $32
$55 $121
</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.
<PAGE>
MUNICIPAL CASH SERIES
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------
- -------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
The following table has been audited by Deloitte & Touche
LLP, the Fund's
independent auditors. Their report, dated July 14, 1995, on
the Fund's
financial statements for the year ended May 31, 1995, and on
the following
table for the periods presented, is included in the Annual
Report, which is
incorporated by reference. This table should be read in
conjunction with the
Fund's financial statements and notes thereto, which may be
obtained from the
Fund.
<TABLE>
<CAPTION>
YEAR ENDED MAY 31,
-----------------------------------
- ------------------
1995 1994 1993 1992
1991 1990(A)
- ----------------------- -------- -------- -------- --------
- -------- --------
<S> <C> <C> <C> <C>
<C> <C>
NET ASSET VALUE, BEGIN-
NING OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
$ 1.00 $ 1.00
- -----------------------
INCOME FROM INVESTMENT
OPERATIONS
- -----------------------
Net investment income 0.03 0.02 0.03 0.04
0.05 0.04
- -----------------------
LESS DISTRIBUTIONS
- -----------------------
Distribution from net
investment income (0.03) (0.02) (0.03) (0.04)
(0.05) (0.04)
- ----------------------- ------ ------ ------ ------
- ------ ------
NET ASSET VALUE, END OF $ 1.00 $ 1.00 $ 1.00 $ 1.00
$ 1.00 $ 1.00
PERIOD ------ ------ ------ ------
- ------ ------
- -----------------------
TOTAL RETURN (B) 2.84% 1.83% 2.11% 3.53%
5.24% 4.68%
- -----------------------
RATIOS TO AVERAGE NET
ASSETS
- -----------------------
Expenses 0.99% 0.99% 0.99% 0.98%
0.94% 0.73%(c)
- -----------------------
Net investment income 2.76% 1.81% 2.10% 3.42%
5.02% 5.76%(c)
- -----------------------
Expense waiver/
reimbursement (d) 0.05% 0.06% 0.03% 0.03%
0.17% 0.45%(c)
- -----------------------
SUPPLEMENTAL DATA
- -----------------------
<CAPTION>
Net assets, end of pe-
riod
(000 omitted)
- ----------------------- $445,164 $574,801 $456,205 $516,814
$403,151 $195,897
</TABLE>
(a) Reflects operations for the period from August 25, 1989
(date of initial
public investment) to May 30, 1990.
(b) Based on net asset value, which does not reflect the
sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the
expense and net
investment income ratios shown above.
Further information about the Fund's performance is
contained in the Fund's
Annual Report dated May 31, 1995, which can be obtained free
of charge.
<PAGE>
GENERAL INFORMATION
- ------------------------------------------------------------
- -------------------
The Company was established as a Maryland corporation under
Articles of
Incorporation dated February 1, 1993. The Articles of
Incorporation permit the
Company to offer separate series of shares representing
interests in separate
portfolios of securities. The Fund is designed for customers
of financial
institutions such as banks, fiduciaries, custodians of
public funds,
investment advisers, and broker/dealers as a convenient
means of accumulating
an interest in a professionally managed, non-diversified
portfolio investing
primarily in short-term municipal securities. The Company
may not be a
suitable investment for retirement plans because it invests
in municipal
securities. A minimum initial investment of $10,000 is
required. Subsequent
investments must be in amounts of at least $500.
The Fund attempts to stabilize the value of a share at
$1.00. Shares are
currently sold and redeemed at that price.
INVESTMENT INFORMATION
- ------------------------------------------------------------
- -------------------
INVESTMENT OBJECTIVE
The investment objective of the Fund is current income
exempt from federal
regular income tax consistent with stability of principal.
This investment
objective cannot be changed without shareholder approval.
While there is no
assurance that the Fund will achieve its investment
objective, it endeavors to
do so by following the investment policies described in this
prospectus.
INVESTMENT POLICIES
The Fund pursues its investment objective by investing in a
portfolio of
municipal securities (as defined below) maturing in 13
months or less. As a
matter of investment policy, which cannot be changed without
shareholder
approval, at least 80% of the Fund's annual interest income
will be exempt
from federal regular income tax. (Federal regular income tax
does not include
the federal individual alternative minimum tax or the
federal alternative
minimum tax for corporations.) The average maturity of the
securities in the
Fund's portfolio, computed on a dollar-weighted basis, will
be 90 days or
less. Unless indicated otherwise, the investment policies
may be changed by
the Directors without shareholder approval. Shareholders
will be notified
before any material change in these policies becomes
effective.
ACCEPTABLE INVESTMENTS. The Fund invests primarily in debt
obligations issued
by or on behalf of states, territories, and possessions of
the United States,
including the District of Columbia, and any political
subdivision or financing
authority of any of these, the income from which is, in the
opinion of
qualified legal counsel, exempt from federal regular income
tax ("Municipal
Securities"). Examples of Municipal Securities include, but
are not limited
to:
. tax and revenue anticipation notes ("TRANs") issued to
finance working
capital needs in anticipation of receiving taxes or other
revenues;
. bond anticipation notes ("BANs") that are intended to be
refinanced
through a later issuance of longer-term bonds;
<PAGE>
. municipal commercial paper and other short-term notes;
. variable rate demand notes;
. municipal bonds (including bonds having serial
maturities and pre-
refunded bonds) and leases; and
. participation, trust, and partnership interests in any
of the foregoing
obligations.
VARIABLE RATE DEMAND NOTES. Variable rate demand notes are
long-term debt
instruments that have variable or floating interest rates
and provide the
Fund with the right to tender the security for repurchase
at its stated
principal amount plus accrued interest. Such securities
typically bear
interest at a rate that is intended to cause the
securities to trade at
par. The interest rate may float or be adjusted at regular
intervals
(ranging from daily to annually), and is normally based on
a published
interest rate or interest rate index. Most variable rate
demand notes
allow the Fund to demand the repurchase of the security on
not more than
seven days prior notice. Other notes only permit the Fund
to tender the
security at the time of each interest rate adjustment or
at other fixed
intervals. See "Demand Features." The Fund treats variable
rate demand
notes as maturing on the later of the date of the next
interest rate
adjustment or the date on which the Fund may next tender
the security for
repurchase.
PARTICIPATION INTERESTS. The Fund may purchase interests
in Municipal
Securities from financial institutions such as commercial
and investment
banks, savings and loan associations, and insurance
companies. These
interests may take the form of participations, beneficial
interests in a
trust, partnership interests or any other form of indirect
ownership that
allows the Fund to treat the income from the investment as
exempt from
federal income tax. The Fund invests in these
participation interests in
order to obtain credit enhancement or demand features that
would not be
available through direct ownership of the underlying
Municipal Securities.
MUNICIPAL LEASES. Municipal leases are obligations issued
by state and
local governments or authorities to finance the
acquisition of equipment
and facilities. They may take the form of a lease, an
installment purchase
contract, a conditional sales contract, or a participation
interest in any
of the above.
RATINGS. The securities in which the Fund invests must be
rated in one of the
two highest short-term rating categories by one or more
nationally recognized
statistical rating organizations ("NRSROs") or be of
comparable quality to
securities having such ratings. An NRSRO's two highest
rating categories are
determined without regard for sub-categories and gradations.
For example,
securities rated SP-1+, SP-1, or SP-2 by Standard & Poor's
Ratings Group
("S&P"), MIG-1 or MIG-2 by Moody's Investors Service, Inc.
("Moody's"), or
FIN-1+, FIN-1, or FIN-2 by Fitch Investors Service, Inc.
("Fitch") are all
considered rated in one of the two highest short-term rating
categories. The
Fund will follow applicable regulations in determining
whether a security
rated by more than one NRSRO can be treated as being in one
of the two highest
short-term rating categories; currently, such securities
must be rated by two
NRSROs in one of their two highest rating categories. See
"Regulatory
Compliance."
CREDIT ENHANCEMENT. Certain of the Fund's acceptable
investments may be credit
enhanced by a guaranty, letter of credit, or insurance. The
Fund typically
evaluates the credit quality and ratings of credit-enhanced
securities based
upon the financial condition and ratings of the party
providing the
<PAGE>
credit enhancement (the "credit enhancer"), rather than the
issuer. However,
credit-enhanced securities will not be treated as having
been issued by the
credit enhancer for diversification purposes, unless the
Fund has invested
more than 10% of its assets in securities issued, guaranteed
or otherwise
credit enhanced by the credit enhancer, in which case the
securities will be
treated as having been issued by both the issuer and the
credit enhancer. The
bankruptcy, receivership, or default of the credit enhancer
will adversely
affect the quality and marketability of the underlying
security.
DEMAND FEATURES. The Fund may acquire securities that are
subject to puts and
standby commitments ("demand features") to purchase the
securities at their
principal amount (usually with accrued interest) within a
fixed period
(usually seven days) following a demand by the Fund. The
demand feature may be
issued by the issuer of the underlying securities, a dealer
in the securities,
or by another third party, and may not be transferred
separately from the
underlying security. The Fund uses these arrangements to
provide the Fund with
liquidity and not to protect against changes in the market
value of the
underlying securities. The bankruptcy, receivership, or
default by the issuer
of the demand feature, or a default on the underlying
security or other event
that terminates the demand feature before its exercise, will
adversely affect
the liquidity of the underlying security. Demand features
that are exercisable
even after a payment default on the underlying security may
be treated as a
form of credit enhancement.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may
purchase
securities on a when-issued or delayed delivery basis. These
transactions are
arrangements in which the Fund purchases securities with
payment and delivery
scheduled for a future time. The seller's failure to
complete these
transactions may cause the Fund to miss a price or yield
considered to be
advantageous. Settlement dates may be a month or more after
entering into
these transactions, and the market values of the securities
purchased may vary
from the purchase prices. Accordingly, the Fund may pay more
or less than the
market value of the securities on the settlement date.
The Fund may dispose of a commitment prior to settlement if
the adviser deems
it appropriate to do so. In addition, the Fund may enter
into transactions to
sell its purchase commitments to third parties at current
market values and
simultaneously acquire other commitments to purchase similar
securities at
later dates. The Fund may realize short-term profits or
losses upon the sale
of such commitments.
RESTRICTED AND ILLIQUID SECURITIES. The Fund may invest in
restricted
securities. Restricted securities are any securities in
which the Fund may
invest pursuant to its investment objective and policies but
which are subject
to restrictions on resale under federal securities laws.
Under criteria
established by the Directors, certain restricted securities
are determined to
be liquid. To the extent that restricted securities are not
determined to be
liquid, the Fund will limit their purchase, together with
other illiquid
securities, to 10% of its net assets.
TEMPORARY INVESTMENTS. From time to time, when the
investment adviser
determines that market conditions call for a temporary
defensive posture, the
Fund may invest in tax-exempt or taxable securities such as:
obligations
issued by or on behalf of municipal or corporate issuers
having the same
quality characteristics as described above; obligations
issued or guaranteed
by the U.S. government, its agencies, or instrumentalities;
instruments issued
by a U.S. branch of a domestic bank or other deposit
institution having
capital, surplus, and undivided profits in excess of
$100,000,000 at the time
<PAGE>
of investment; and repurchase agreements (arrangements in
which the
organization selling the Fund a temporary investment agrees
at the time of
sale to repurchase it at a mutually agreed upon time and
price).
Although the Fund is permitted to make taxable, temporary
investments, there
is no current intention to do so. However, the interest from
certain Municipal
Securities is subject to the federal alternative minimum
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 short-term 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 credit
enhancers of either, to meet their obligations for the
payment of interest and
principal when due. In addition, from time to time, the
supply of Municipal
Securities acceptable for purchase by the Fund could become
limited.
The Fund may invest in Municipal Securities which are
repayable out of revenue
streams generated from economically related projects or
facilities and/or
whose issuers are located in the same state. Sizable
investments in these
Municipal Securities could involve an increased risk to the
Fund should any of
these related projects or facilities experience financial
difficulties.
Obligations of issuers of Municipal Securities are subject
to the provisions
of bankruptcy, insolvency, and other laws affecting the
rights and remedies of
creditors. In addition, the obligations of such issuers may
become subject to
laws enacted in the future by Congress, state legislators,
or referenda
extending the time for payment of principal and/or interest,
or imposing other
constraints upon enforcement of such obligations or upon the
ability of states
or municipalities to levy taxes. There is
<PAGE>
also the possibility that, as a result of litigation or
other conditions, the
power or ability of any issuer to pay, when due, the
principal of and interest
on its municipal securities may be materially affected.
NON-DIVERSIFICATION
The Fund is non-diversified. An investment in the Fund,
therefore, will entail
greater risk than would exist if it were diversified 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.
However, the Fund intends to comply with Subchapter M of the
Internal Revenue
Code. This undertaking requires that, at the end of each
quarter of each
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
and that with respect to the remainder of the Fund's total
assets, 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 money
market 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 its
total assets to secure such borrowings. This investment
limitation cannot be
changed without shareholder approval.
REGULATORY COMPLIANCE
The Fund may follow non-fundamental operational policies
that are more
restrictive than its fundamental investment limitations, as
set forth in this
prospectus and its Statement of Additional Information, in
order to comply
with applicable laws and regulations, including the
provisions of and
regulations under the Investment Company Act of 1940, as
amended. In
particular, the Fund will comply with the various
requirements of Rule 2a-7,
which regulates money market mutual funds. The Fund will
determine the
effective maturity of its investments, as well as its
ability to consider a
security as having received the requisite short-term ratings
by NRSROs,
according to Rule 2a-7. The Fund may change these
operational policies to
reflect changes in the laws and regulations without the
approval of its
shareholders.
CASH TRUST SERIES, INC. INFORMATION
- ------------------------------------------------------------
- -------------------
MANAGEMENT OF CASH TRUST SERIES, INC.
BOARD OF DIRECTORS. The Company is managed by a Board of
Directors. The
Directors are responsible for managing the Fund's business
affairs and for
exercising all the Company's powers except those reserved
for the
shareholders. An Executive Committee of the Board of
Directors handles the
Board's responsibilities between meetings of the Board.
<PAGE>
INVESTMENT ADVISER. Investment decisions for the Fund are
made by Federated
Advisers, the Fund's investment adviser, subject to
direction by the
Directors. The adviser continually conducts investment
research and
supervision for the Fund and is responsible for the purchase
and sale of
portfolio instruments.
ADVISORY FEES. The adviser receives an annual investment
advisory fee
equal to.50 of 1% of the Fund's average daily net assets.
The adviser has
undertaken to reimburse the Fund up to the amount of the
advisory fee for
operating expenses in excess of limitations established by
certain states.
The adviser also may voluntarily choose to waive a portion
of its fee or
reimburse other expenses of the Fund, but reserves the
right to terminate
such waiver or reimbursement at any time at its sole
discretion.
ADVISER'S BACKGROUND. Federated Advisers, a Delaware
business trust,
organized on April 11, 1989, is a registered investment
adviser under the
Investment Advisers Act of 1940. It is a subsidiary of
Federated
Investors. All of the Class A (voting) shares of Federated
Investors are
owned by a trust, the trustees of which are John F.
Donahue, Chairman and
Trustee of Federated Investors, Mr. Donahue's wife, and
Mr. Donahue's son,
J. Christopher Donahue, who is President and Trustee of
Federated
Investors.
Federated Advisers and other subsidiaries of Federated
Investors serve as
investment advisers to a number of investment companies
and private
accounts. Certain other subsidiaries also provide
administrative services
to a number of investment companies. With over $72 billion
invested across
more than 260 funds under management and/or administration
by its
subsidiaries, as of December 31, 1994, Federated Investors
is one of the
largest mutual fund investment managers in the United
States. With more
than 1,750 employees, Federated continues to be led by the
management who
founded the company in 1955. Federated funds are presently
at work in and
through 4,000 financial institutions nationwide. More than
100,000
investment professionals have selected Federated funds for
their clients.
Both the Company and the adviser have adopted strict codes
of ethics governing
the conduct of all employees who manage the Fund and its
portfolio securities.
These codes recognize that such persons owe a fiduciary duty
to the Fund's
shareholders and must place the interests of shareholders
ahead of the
employees' own interest. Among other things, the codes:
require preclearance
and periodic reporting of personal securities transactions;
prohibit personal
transactions in securities being purchased or sold, or being
considered for
purchase or sale, by the Fund; prohibit purchasing
securities in initial
public offerings; and prohibit taking profits on securities
held for less than
sixty days. Violations of the codes are subject to review by
the Directors,
and could result in severe penalties.
DISTRIBUTION OF 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.
State securities laws may require certain financial
institutions such as
depository institutions to register as dealers.
<PAGE>
DISTRIBUTION AND SHAREHOLDER SERVICES. 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
.35 of 1% of the average daily net asset value of the Fund
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 services or distribution-
related support
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 amounts or may earn
a profit from
future payments made by the Fund under the Distribution
Plan.
In addition, the Fund has entered into a Shareholder
Services Agreement with
Federated Shareholder Services, a subsidiary of Federated
Investors, under
which the Fund may make payments up to .25 of 1% of the
average daily net
asset value of the Fund to obtain personal services for
shareholders and for
the maintenance of shareholder accounts. Under the
Shareholder Services
Agreement, Federated Shareholders Services with either
perform shareholder
services directly or will select financial institutions to
perform shareholder
services. From time to time and for such periods as deemed
appropriate, the
amounts stated above may be reduced voluntarily. 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 Fund, the distributor,
or Federated
Shareholder Services, as appropriate.
SUPPLEMENTAL PAYMENTS TO FINANCIAL INSTITUTIONS. The
distributor may also pay
financial institutions a fee for providing certain services
to shareholders or
as financial assistance for providing substantial marketing
and sales support.
The support may include sponsoring sales, educational, and
training seminars
for employees of the financial institution, providing sales
literature, and
engineering computer software programs that emphasize the
attributes of the
Fund. Such financial assistance will be predicated upon the
amount of shares
of the Fund the financial institution sells or may sell
and/or upon the type
and nature of sales or marketing support furnished by the
financial
institution. Any payments made in addition to the amounts
paid under the
Plan(s) may be reimbursed by the adviser or its affiliates,
and not the Fund.
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 as
specified below:
<PAGE>
<TABLE>
<CAPTION>
MAXIMUM FEE AVERAGE AGGREGATE
DAILY NET ASSETS
----------- -----------------
- ------------------
<S> <C>
.15 of 1% on the first $250
million
.125 of 1% on the next $250
million
.10 of 1% on the next $250
million
.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.
Average aggregate daily net assets include those of all
mutual funds advised
by affiliates of Federated Investors. Federated
Administrative Services may
choose voluntarily to waive a portion of its fee.
CUSTODIAN. State Street Bank and Trust Company, Boston, MA,
is custodian for
the securities and cash of the Fund.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated
Services Company,
Boston, MA, is transfer agent for the shares of, and
dividend disbursing agent
for, the Fund.
INDEPENDENT AUDITORS. The independent auditors for the Fund
are Deloitte &
Touche LLP, Pittsburgh, PA.
NET ASSET VALUE
- ------------------------------------------------------------
- -------------------
The Fund attempts to stabilize the net asset value of its
shares at $1.00 by
valuing the portfolio securities using the amortized cost
method. The net
asset value per share is determined by subtracting total
liabilities from
total assets and dividing the remainder by the number of
shares outstanding.
The Fund cannot guarantee that its net asset value will
always remain at $1.00
per share.
The net asset value is determined at 12:00 noon, 3:00 p.m.
(Eastern time), and
as of the close of trading (normally 4:00 p.m., Eastern
time) on the New York
Stock Exchange, Monday through Friday, except on New Year's
Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day,
and Christmas Day.
INVESTING IN THE FUND
- ------------------------------------------------------------
- -------------------
SHARE PURCHASES
Shares are sold at their net asset value, without a sales
charge, next
determined after an order is received, on days on which the
New York Stock
Exchange and the Federal Reserve Wire System are open for
business. Shares may
be purchased as described below. Accounts may be opened
through a financial
institution (such as a bank or broker/dealer) or by
completing, signing, and
returning the new account form available from the Fund. In
connection with any
sale, Federated Securities Corp. may from time to time offer
certain items of
nominal value to any shareholder or investor. The Fund
reserves the right to
reject any purchase request.
<PAGE>
THROUGH A FINANCIAL INSTITUTION. Investors may call their
financial
institutions to place an order. Orders through a financial
institution are
considered received when the Fund receives payment by wire
or converts payment
by check from the financial institution into federal funds.
It is the
financial institution's responsibility to transmit orders
promptly. Financial
institutions may charge additional fees for their services.
BY WIRE. To purchase by wire, call the Fund before 3:00 p.m.
(Eastern time) to
place an order. All information needed will be taken over
the telephone, and
the order is considered received immediately. Payment by
federal funds must be
received before 3:00 p.m. (Eastern time) that same day.
Federal funds should
be wired as follows: Federated Services Company, c/o State
Street Bank and
Trust Company, Boston, MA; Attention; EDGEWIRE; For Credit
to: Municipal Cash
Series; 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.
BY MAIL. To purchase by mail, send a check made payable to
Municipal Cash
Series to: Federated Services Company, Municipal Cash
Series, P.O. Box 8600,
Boston, MA 02266-8600. Orders by mail are considered
received when payment by
check is converted into federal funds. This is normally the
next business day
after the check is received.
SYSTEMATIC INVESTMENT PROGRAM. Under this program, funds in
a minimum of $500
are automatically withdrawn periodically from the
shareholder's checking
account at any Automated Clearing House member institution
and invested in
Fund shares.
Shareholders should contact their financial institution
and/or the Fund to
participate in this program.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment is $10,000. Minimum
subsequent investments must
be $500. Minimum investments will be calculated by combining
all accounts
maintained with the Fund. The Fund may from time to time
waive the minimum
investment requirements.
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 by contacting the Fund or Federated Services
Company in writing.
Monthly confirmations are sent to report transactions such
as all purchases
and redemptions as well as dividends paid during the month.
DIVIDENDS
Dividends are declared daily and paid monthly. Dividends are
automatically
reinvested on payment dates in additional shares of the Fund
unless cash
payments are requested by writing to the Fund. Shares
purchased by wire before
3:00 p.m. (Eastern time) begin earning dividends that day.
Shares purchased by
check begin earning dividends the day after the check is
converted into
federal funds.
[[1]]FINEDG:[14686P.TX]00012.PIP PAG: 19-SEP-1995
21:12 EDG: 00-000-0000 00:00 BLK: 05-SEP-1995 00:01
[[1]]Federated MCS PRO R.
R. Donnelley (412) 321-0440 AOG 3.4.1,p04
<PAGE>
CAPITAL GAINS
The Fund does not expect to realize any capital gains or
losses. If capital
gains or losses were to occur, they could result in an
increase or decrease in
dividends. The Fund will distribute in cash or additional
shares any realized
net long-term capital gains at least once every 12 months.
REDEEMING SHARES
- ------------------------------------------------------------
- -------------------
Shares are redeemed 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 as described below.
THROUGH A FINANCIAL INSTITUTION
Shares may be redeemed by calling the shareholder's
financial institution.
Shares will be redeemed at the net asset value next
determined after Federated
Services Company receives the redemption request from the
financial
institution. The financial institution is responsible for
promptly submitting
redemption requests and providing proper written redemption
instructions. The
financial institution may charge customary fees and
commissions for this
service.
An authorization form permitting redemption requests by
telephone must first
be completed. Authorization forms and information on this
service are
available from Federated Securities Corp.
In the event of drastic economic or market changes, a
shareholder may
experience difficulty in redeeming by telephone. If this
occurs, another
method of redemption, such as "By Mail," should be
considered.
RECEIVING PAYMENT. Pursuant to instructions from the
financial institution,
redemptions will be made by check or by wire.
BY WIRE. Proceeds for redemption requests received before
12:00 noon,
(Eastern time) will be wired the same day but will not be
entitled to that
day's dividend. Redemption requests received after 12:00
noon, (Eastern
time) will receive that day's dividends and will be wired
the following
business day.
BY MAIL
Shares may be redeemed by sending a written request to:
Municipal Cash Series,
P.O. Box 8600, Boston, MA 02266-8600. The written request
should state:
Municipal Cash Series; shareholder's name; the account
number; and the share
or dollar amount requested. Sign the request exactly as the
shares are
registered. Shareholders should call the Fund for assistance
in redeeming by
mail.
If share certificates have been issued, they should be sent
by insured mail
with the written request to: Federated Services Company, 500
Victory Road-2nd
Floor, North Quincy, MA 02171.
Shareholders requesting a redemption of any amount to be
sent to an address
other than that on record with the Fund, or a redemption
payable other than to
the shareholder of record must have their signatures
guaranteed by:
<PAGE>
. 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 the 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 the
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 within one
business day, but in
no event more than seven days, after receipt of a proper
written redemption
request. Dividends are paid up to and including the day that
a redemption
request is processed.
BY WRITING A CHECK. At the shareholder's request, a checking
account for
redeeming shares will be established. For further
information, contact State
Street Bank and Trust Company.
With this checking account, shares may be redeemed by
writing a check for $100
or more. The redemption will be made at the net asset value
on the date that
the check is presented to the Fund. A check may not be
written to close an
account. A shareholder may obtain cash by negotiating the
check through the
shareholder's local bank. Checks should never be made
payable or sent to State
Street Bank and Trust Company to redeem shares. Cancelled
checks are sent to
the shareholder each month.
BY VISA CARD. At the shareholder's request, State Street
Bank and Trust
Company will establish a VISA account. This account allows a
shareholder to
redeem shares by using a VISA card. A fee, determined by
State Street Bank and
Trust Company, will be charged to the account for this
service. For further
information, contact the Fund.
TELEPHONE REDEMPTION
Shares may be redeemed by telephoning the Fund. Telephone
instructions may be
recorded and 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
requests must first
be completed. Authorization forms and information on this
service are
available from Federated Securities Corp.
If the redemption request is received before 12:00 noon
(Eastern time), the
proceeds will be wired the same day to the shareholder's
account at a domestic
commercial bank which is a member of the Federal Reserve
System, and those
shares redeemed will not be entitled to that day's dividend.
A daily dividend
will be paid on shares redeemed if the redemption request is
received after
12:00 noon (Eastern time). However, the proceeds are not
wired until the
following business day.
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
<PAGE>
Mail," should be considered. If at any time the Fund shall
determine it
necessary to terminate or modify this method of redemption,
shareholders would
be promptly notified.
BY A SYSTEMATIC WITHDRAWAL PROGRAM
If a shareholder's account has a value of at least $10,000,
a systematic
withdrawal program may be established whereby automatic
redemptions are made
from the account and transferred electronically to any
commercial bank,
savings bank, or credit union that is an Automated Clearing
House member.
Shareholders may apply for participation in this program
through their
financial institution.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low
balances, the Fund may
redeem shares in any account, except accounts maintained by
retirement plans,
and pay the proceeds to the shareholder if the account
balance falls below a
required minimum value of $10,000 due to shareholder
redemptions.
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
Director elections
and other matters submitted to shareholders for vote. All
shares of each
portfolio in the Company have equal voting rights, except
that in matters
affecting only a particular portfolio, only shares of that
portfolio are
entitled to vote. As a Maryland corporation, the Company is
not required to
hold annual shareholder meetings. Shareholder approval will
be sought only for
certain changes in the Company's or the Fund's operation and
for the election
of Directors, under certain circumstances. As of September
8, 1995, McDonald &
Co. Securities, Inc., Cincinnati, Ohio, may for certain
purposes be deemed to
control the Fund because it is owner of record, in nominee
name accounts for
the benefit of their customers, of certain shares of the
Fund.
Directors may be removed by the Directors or by shareholders
at a special
meeting. A special meeting of the shareholders for this
purpose shall be
called by the Directors upon the written request of
shareholders owning at
least 10% of the outstanding shares of the Company.
TAX INFORMATION
- ------------------------------------------------------------
- -------------------
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects
to meet
requirements of the Internal Revenue 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
Company's other portfolios will not be combined for tax
purposes with those
realized by the Fund.
<PAGE>
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, under the Tax Reform Act of 1986,
dividends
representing net interest earned on certain "private
activity" bonds issued
after August 7, 1986, may be included in calculating the
federal individual
alternative minimum tax or the federal alternative minimum
tax for
corporations. The Fund may purchase all types of municipal
bonds, including
private activity bonds.
The alternative minimum tax 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.
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.
PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES
Shares are exempt from personal property taxes imposed by
counties,
municipalities, and school districts in Pennsylvania.
OTHER STATE AND LOCAL TAXES. Because interest received by
the Fund may not be
exempt from all state and local income taxes, shareholders
may be required to
pay state and local taxes on dividends received from the
Fund. 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 yield, effective
yield, and tax-
equivalent yield.
Yield represents the annualized rate of income earned on an
investment over a
seven-day period. It is the annualized dividends earned
during the period on
an investment shown as a percentage of the investment. The
effective yield is
calculated similarly to the yield, but when annualized, the
income earned by
an investment is assumed to be reinvested daily. The
effective yield will be
slightly higher than the yield because of the compounding
effect of this
assumed reinvestment. The tax-equivalent yield is calculated
similarly to the
yield, but is adjusted to reflect the taxable yield that
would have to be
earned to equal the Fund's tax exempt yield, assuming a
specific tax rate.
Advertisements and sales literature may also refer to total
return. Total
return represents the change, over a specified period of
time, in the value of
an investment in the Fund after reinvesting all income
distributions. It is
calculated by dividing that change by the initial investment
and is expressed
as a percentage.
From time to time, advertisements for the Fund may refer to
ratings, rankings,
and other information in certain financial publications
and/or compare the
Fund's performance to certain indices.
<PAGE>
ADDRESSES
- ------------------------------------------------------------
- --------------------
Cash Trust Series, Inc. Federated
Investors Tower
Pittsburgh, PA 15222-3779
- ------------------------------------------------------------
- --------------------
Distributor
Federated Securities Corporation Federated
Investors Tower
Pittsburgh, PA 15222-3779
- ------------------------------------------------------------
- --------------------
Investment Adviser
Federated Advisers Federated
Investors Tower
Pittsburgh, PA 15222-3779
- ------------------------------------------------------------
- --------------------
Custodian
State Street Bank and Trust Company
P.O. Box
8600 Boston, MA
02266-8600
- ------------------------------------------------------------
- --------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company
P.O. Box
8600 Boston, MA
02266-8600
- ------------------------------------------------------------
- --------------------
Independent Public Accountants
Deloitte & Touche LLP 2500 One
PPG Place
Pittsburgh, PA 15222
- ------------------------------------------------------------
- --------------------
<PAGE>
MUNICIPAL CASH SERIES
PROSPECTUS
A Non-Diversified
Portfolio of Cash Trust
Series, Inc.,
an Open-End Management
Investment Company
Prospectus dated
September 30, 1995
[LOGO] FEDERATED SECURITIES CORP.
DISTRIBUTOR
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
CUSIP 147551303
9080102A (9/95)
<PAGE>
PRIME CASH SERIES
(A PORTFOLIO OF CASH TRUST SERIES, INC.)
PROSPECTUS
The shares of Prime Cash Series (the "Fund") offered by this
prospectus
represent interests in a diversified portfolio of Cash Trust
Series, Inc. (the
"Company"), an open-end management investment company (a
mutual fund). The
Fund invests in short-term money market securities to
achieve current income
consistent with stability of principal and liquidity.
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 OR
GUARANTEED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT
INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY.
INVESTMENT IN THESE
SHARES INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF
PRINCIPAL. THE
FUND ATTEMPTS TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00
PER SHARE; THERE
CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO DO SO.
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 September
30, 1995, 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, which is in paper form only, or a
paper copy of this
prospectus, if you have received your prospectus
electronically, free of
charge by calling 1-800-235-4669. To obtain other
information, or make
inquiries about the Fund, contact your financial
institution.
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 September 30, 1995
<PAGE>
TABLE OF CONTENTS
- ------------------------------------------------------------
- --------------------
SUMMARY OF FUND EXPENSES 1 Transfer Agent
and Dividend
- ------------------------------------- Disbursing
Agent 10
Independent
Auditors 10
FINANCIAL HIGHLIGHTS--PRIME CASH
SERIES 2
- ------------------------------------- NET ASSET VALUE
10
------------------
- -------------------
GENERAL INFORMATION 3 INVESTING IN THE
FUND 10
- ------------------------------------- ------------------
- -------------------
INVESTMENT INFORMATION 3 Share Purchases
10
- -------------------------------------
Through a
Financial Institution 10
Investment Objective 3 By Wire
10
Investment Policies 3 By Mail
11
Acceptable Investments 3 Systematic
Investment Program 11
Variable Rate Demand Notes 4
Bank Instruments 4 Minimum
Investment Required 11
Asset-Backed Securities 4 Certificates and
Confirmations 11
Short-Term Credit Facilities 4
Dividends
11
Ratings 4 Capital Gains
11
Repurchase Agreements 5
Credit Enhancement 5 REDEEMING SHARES
11
------------------
- -------------------
Demand Features 5
When-Issued and Delayed
Delivery Through a
Financial Institution 12
Transactions 5
Receiving
Payment 12
Lending of Portfolio Securities 5
By Wire
12
Restricted and Illiquid By Mail
12
Securities 6
By Writing a
Check 13
Concentration of Investments 6 By VISA Card
13
Investment Risks 6 Telephone
Redemption 13
Investment Limitations 7 By a Systematic
Withdrawal
Program
13
Regulatory Compliance 7
Accounts with Low
Balances 14
CASH TRUST SERIES, INC. INFORMATION 7
- ------------------------------------- SHAREHOLDER
INFORMATION 14
------------------
- -------------------
Management of the Cash Trust Voting Rights
14
Series, Inc. 7
Board of Directors 7 TAX INFORMATION
14
------------------
- -------------------
Investment Adviser 7
Advisory Fees 8
Adviser's Background 8 Federal Income
Tax 14
Distribution of Shares 8 Pennsylvania
Corporate Personal
Property Taxes
14
Distribution and Shareholder
Services 8 Other State and
Local Taxes 14
Supplemental Payments to Financial
Institutions 9
PERFORMANCE
INFORMATION 15
------------------
- -------------------
Administration of the Fund 9
Administrative Services 9
ADDRESSES
16
Custodian 10 ------------------
- -------------------
<PAGE>
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 pur-
chase price
or redemption proceeds, as
applicable)............................ None
Redemption Fee (as a percentage of amount redeemed, if
applicable). None
Exchange
Fee.......................................................
None
ANNUAL FUND OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver)
(1).................................. 0.30%
12b-1 Fee (after waiver)
(2)....................................... 0.10%
Total Other
Expenses...............................................
0.59%
Shareholder Services
Fee......................................... 0.25%
Total Fund Operating Expenses
(3).............................. 0.99%
</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
0.50%.
(2) The maximum 12b-1 fee is 0.35%.
(3) The total Fund operating expenses in the table above are
based on expenses
expected during the fiscal year ending May 31, 1996. The
total Fund
operating expenses were 0.99% for the fiscal year ended
May 31, 1995, and
would have been 1.19% 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 THE FUND
WILL BEAR, EITHER
DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF
THE VARIOUS COSTS
AND EXPENSES, SEE "CASH TRUST SERIES, INC. INFORMATION."
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) redemp-
tion at the end of each time period............ $10 $32
$55 $121
</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.
<PAGE>
PRIME CASH SERIES
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------
- -------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
The following table has been audited by Deloitte & Touche
LLP, the Fund's
independent auditors. Their report, dated July 14, 1995, on
the Fund's
financial statements for the year ended May 31, 1995, and on
the following
table for each of the periods presented, is included in the
Annual Report,
which is incorporated by reference. This table should be
read in conjunction
with the Fund's financial statements and notes thereto,
which may be obtained
from the Fund.
<TABLE>
<CAPTION>
YEAR ENDED MAY 31,
-------------------------------
- ----------------
1995 1994 1993 1992
1991 1990(A)
- --------------------------- ------ ------ ------ ------
- ------ -------
<S> <C> <C> <C> <C>
<C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
$ 1.00 $ 1.00
- ---------------------------
INCOME FROM INVESTMENT OP-
ERATIONS
- ---------------------------
Net investment income 0.05 0.02 0.03 0.04
0.07 0.06
- ---------------------------
LESS DISTRIBUTIONS
- ---------------------------
Distributions from net
investment income (0.05) (0.02) (0.03) (0.04)
(0.07) (0.06)
- --------------------------- ------ ------ ------ ------
- ------ ------
NET ASSET VALUE, END OF PE-
RIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
$ 1.00 $ 1.00
- --------------------------- ------ ------ ------ ------
- ------ ------
TOTAL RETURN (B) 4.60% 2.48% 2.61% 4.37%
6.99% 6.56%
- ---------------------------
RATIOS TO AVERAGE NET AS-
SETS
- ---------------------------
Expenses 0.99% 0.99% 0.99% 0.98%
0.94% 0.73%(c)
- ---------------------------
Net investment income 4.57% 2.45% 2.58% 4.21%
6.50% 7.82%(c)
- ---------------------------
Expense
waiver/reimbursement (d) 0.20% 0.18% 0.15% 0.22%
0.44% 0.46%(c)
- ---------------------------
SUPPLEMENTAL DATA
- ---------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
<C> <C>
Net assets, end of pe-
riod
(000 omitted) $1,027,083 $791,147 $796,832
$750,016 $562,465 $189,254
- -----------------------
</TABLE>
(a) Reflects operations for the period from August 18, 1989
(date of initial
public investment) to May 31, 1990.
(b) Based on net asset value, which does not reflect the
sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the
expense and net
investment income ratios shown above.
Further information about the Fund's performance is
contained in the Fund's
Annual Report dated May 31, 1995, which can be obtained free
of charge.
<PAGE>
GENERAL INFORMATION
- ------------------------------------------------------------
- -------------------
The Company was established as a Maryland corporation under
Articles of
Incorporation dated February 1, 1993. The Articles of
Incorporation permit the
Company to offer separate series of shares representing
interests in separate
portfolios of securities. The Fund is designed for customers
of financial
institutions such as banks, fiduciaries, custodians of
public funds,
investment advisers, and broker/dealers as a convenient
means of accumulating
an interest in a professionally managed, diversified
portfolio investing in
short-term money market securities. A minimum initial
investment of $10,000 is
required, except for retirement plans which have a minimum
initial investment
of $1,000. Subsequent investments must be in amounts of at
least $500.
The Fund attempts to stabilize the value of a share at
$1.00. Shares are
currently sold and redeemed at that price.
INVESTMENT INFORMATION
- ------------------------------------------------------------
- -------------------
INVESTMENT OBJECTIVE
The investment objective of the Fund is current income
consistent with
stability of principal and liquidity. This investment
objective cannot be
changed without shareholder approval. While there is no
assurance that the
Fund will achieve its investment objective, it endeavors to
do so by following
the investment policies described in this prospectus.
INVESTMENT POLICIES
The Fund pursues its investment objective by investing in a
portfolio of money
market securities maturing in 13 months or less. The average
maturity of the
securities in the Fund's portfolio, computed on a dollar-
weighted basis, will
be 90 days or less. Unless indicated otherwise, the
investment policies may be
changed by the Directors without shareholder approval.
Shareholders will be
notified before any material change in these policies
becomes effective.
ACCEPTABLE INVESTMENTS. The Fund invests in high quality
money market
instruments that are either rated in one of the two highest
short-term rating
categories by one or more nationally recognized statistical
rating
organizations ("NRSROs") or are of comparable quality to
securities having
such ratings. Examples of these instruments include, but are
not limited to:
. domestic issues of corporate debt obligations, including
variable rate
demand notes;
. commercial paper (including Canadian Commercial Paper
and Europaper);
. certificates of deposit, demand and time deposits,
bankers' acceptances
and other instruments of domestic and foreign banks and
other deposit
institutions ("Bank Instruments");
. short-term credit facilities;
. asset-backed securities;
. obligations issued or guaranteed as to payment of
principal and interest
by the U.S. government or one of its agencies or
instrumentalities; and
. other money market instruments.
<PAGE>
The Fund invests only in instruments denominated and payable
in U.S. dollars.
VARIABLE RATE DEMAND NOTES. Variable rate demand notes are
long-term debt
instruments that have variable or floating interest rates
and provide the
Fund with the right to tender the security for repurchase
at its stated
principal amount plus accrued interest. Such securities
typically bear
interest at a rate that is intended to cause the
securities to trade at
par. The interest rate may float or be adjusted at regular
intervals
(ranging from daily to annually), and is normally based on
a published
interest rate or interest rate index. Most variable rate
demand notes
allow the Fund to demand the repurchase of the security on
not more than
seven days prior notice. Other notes only permit the Fund
to tender the
security at the time of each interest rate adjustment or
at other fixed
intervals. See "Demand Features." The Fund treats variable
rate demand
notes as maturing on the later of the date of the next
interest rate
adjustment or the date on which the Fund may next tender
the security for
repurchase.
BANK INSTRUMENTS. The Fund only invests in Bank
Instruments either issued
by an institution having capital, surplus and undivided
profits over $100
million, or insured by the Bank Insurance Fund ("BIF") or
the Savings
Association Insurance Fund ("SAIF"). Bank Instruments may
include
Eurodollar Certificates of Deposit ("ECDs"), Yankee
Certificates of
Deposit ("Yankee CDs") and Eurodollar Time Deposits
("ETDs"). The Fund
will treat securities credit enhanced with a bank's letter
of credit as
Bank Instruments.
ASSET-BACKED SECURITIES. Asset-backed securities are
securities issued by
special purpose entities whose primary assets consist of a
pool of loans
or accounts receivable. The securities may take the form
of beneficial
interests in special purpose trusts, limited partnership
interests, or
commercial paper or other debt securities issued by a
special purpose
corporation. Although the securities often have some form
of credit or
liquidity enhancement, payments on the securities depend
predominantly
upon collections of the loans and receivables held by the
issuer.
SHORT-TERM CREDIT FACILITIES. The Fund may enter into, or
acquire
participations in, short-term borrowing arrangements with
corporations,
consisting of either a short-term revolving credit
facility or a master
note agreement payable upon demand. Under these
arrangements, the borrower
may reborrow funds during the term of the facility. The
Fund treats any
commitments to provide such advances as a standby
commitment to purchase
the borrower's notes.
RATINGS. An NRSRO's two highest rating categories are
determined without
regard for sub-categories and gradations. For example,
securities rated A-1+,
A-1, or A-2 by Standard & Poor's Ratings Group ("S&P"),
Prime-1 or Prime-2 by
Moody's Investors Service, Inc. ("Moody's"), or F-1 (+ or -)
or F-2 (+ or -)
by Fitch Investors Service, Inc. ("Fitch") are all
considered rated in one of
the two highest short-term rating categories. The Fund will
limit its
investments in securities rated in the second highest short-
term rating
category e.g., A-2 by S&P, Prime-2 by Moody's, or F-2 (+ or
- -) by Fitch, to
not more than 5% of its total assets, with not more than 1%
invested in the
securities of any one issuer. The Fund will follow
applicable regulations in
determining whether a security rated by more than one NRSRO
can be treated as
being in one of the two highest short-term rating
categories; currently, such
securities must be rated by two NRSROs in one of their two
highest rating
categories. See "Regulatory Compliance."
<PAGE>
REPURCHASE AGREEMENTS. Certain securities in which the Fund
invests may be
purchased pursuant to repurchase agreements. Repurchase
agreements are
arrangements in which banks, broker/dealers, and other
recognized financial
institutions sell securities to the Fund and agree at the
time of sale to
repurchase them at a mutually agreed upon time and price. To
the extent that
the seller does not repurchase the securities from the Fund,
the Fund could
receive less than the repurchase price on any sale of such
securities.
CREDIT ENHANCEMENT. Certain of the Fund's acceptable
investments may be credit
enhanced by a guaranty, letter of credit, or insurance. The
Fund typically
evaluates the credit quality and ratings of credit-enhanced
securities based
upon the financial condition and ratings of the party
providing the credit
enhancement (the "credit enhancer"), rather than the issuer.
Generally, the
Fund will not treat credit-enhanced securities as having
been issued by the
credit enhancer for diversification purposes. However, under
certain
circumstances applicable regulations may require the Fund to
treat the
securities as having been issued by both the issuer and the
credit enhancer.
The bankruptcy, receivership, or default of the credit
enhancer will adversely
affect the quality and marketability of the underlying
security.
DEMAND FEATURES. The Fund may acquire securities that are
subject to puts and
standby commitments ("demand features") to purchase the
securities at their
principal amount (usually with accrued interest) within a
fixed period
(usually seven days) following a demand by the Fund. The
demand feature may be
issued by the issuer of the underlying securities, a dealer
in the securities,
or by another third party, and may not be transferred
separately from the
underlying security. The Fund uses these arrangements to
provide the Fund with
liquidity and not to protect against changes in the market
value of the
underlying securities. The bankruptcy, receivership, or
default by the issuer
of the demand feature, or a default on the underlying
security or other event
that terminates the demand feature before its exercise, will
adversely affect
the liquidity of the underlying security. Demand features
that are exercisable
even after a payment default on the underlying security may
be treated as a
form of credit enhancement.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may
purchase
securities on a when-issued or delayed delivery basis. These
transactions are
arrangements in which the Fund purchases securities with
payment and delivery
scheduled for a future time. The seller's failure to
complete these
transactions may cause the Fund to miss a price or yield
considered to be
advantageous. Settlement dates may be a month or more after
entering into
these transactions, and the market values of the securities
purchased may vary
from the purchase prices. Accordingly, the Fund may pay more
or less than the
market value of the securities on the settlement date.
The Fund may dispose of a commitment prior to settlement if
the adviser deems
it appropriate to do so. In addition, the Fund may enter
into transactions to
sell its purchase commitments to third parties at current
market values and
simultaneously acquire other commitments to purchase similar
securities at
later dates. The Fund may realize short-term profits or
losses upon the sale
of such commitments.
LENDING OF PORTFOLIO SECURITIES. In order to generate
additional income, the
Fund may lend its portfolio securities on a short-term or
long-term basis, or
both, to broker/dealers, banks, or other institutional
borrowers of
securities. The Fund will only enter into loan arrangements
with
broker/dealers, banks, or other institutions which the
adviser has determined
are creditworthy under
<PAGE>
guidelines established by the Fund's Directors and will
receive collateral at
all times equal to at least 100% of the value of the
securities loaned. There
is the risk that when lending portfolio securities, the
securities may not be
available to the Fund on a timely basis and the Fund may,
therefore, lose the
opportunity to sell the securities at a desirable price. In
addition, in the
event that a borrower of securities would file for
bankruptcy or become
insolvent, disposition of the securities may be delayed
pending court action.
RESTRICTED AND ILLIQUID SECURITIES. The Fund may invest in
restricted
securities. Restricted securities are any securities in
which the Fund may
otherwise invest pursuant to its investment objective and
policies but which
are subject to restrictions on resale under federal
securities law. However,
the Fund will limit investments in illiquid securities,
including certain
restricted securities not determined by the Directors to be
liquid, non-
negotiable time deposits, and repurchase agreements
providing for settlement
in more than seven days after notice, to 10% of its net
assets.
The Fund may invest in commercial paper issued in reliance
on the exemption
from registration afforded by Section 4(2) of the Securities
Act of 1933.
Section 4(2) commercial paper is restricted as to
disposition under federal
securities law, and is generally sold to institutional
investors, such as the
Fund, who agree that they are purchasing the paper for
investment purposes and
not with a view to public distribution. Any resale by the
purchaser must be in
an exempt transaction. Section 4(2) commercial paper is
normally resold to
other institutional investors like the Fund through or with
the assistance of
the issuer or investment dealers who make a market in
Section 4(2) commercial
paper, thus providing liquidity. The Fund believes that
Section 4(2)
commercial paper and possibly certain other restricted
securities which meet
the criteria for liquidity established by the Directors of
the Fund are quite
liquid. The Fund intends, therefore, to treat the restricted
securities which
meet the criteria for liquidity established by the
Directors, including
Section 4(2) commercial paper, as determined by the Fund's
investment adviser,
as liquid and not subject to the investment limitation
applicable to illiquid
securities. In addition, because Section 4(2) commercial
paper is liquid, the
Fund intends to not subject such paper to the limitation
applicable to
restricted securities.
CONCENTRATION OF INVESTMENTS. The Fund will invest 25% or
more of its total
assets in commercial paper issued by finance companies. The
finance companies
in which the Fund intends to invest can be divided into two
categories,
commercial finance companies and consumer finance companies.
Commercial
finance companies are principally engaged in lending to
corporations or other
businesses. Consumer finance companies are primarily engaged
in lending to
individuals. Captive finance companies or finance
subsidiaries which exist to
facilitate the marketing and financial activities of their
parent will, for
purposes of industry concentration, be classified in the
industry of their
parent's corporation. In addition, the Fund may invest 25%
or more of the
value of its total assets in instruments 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.
Concentrating investments in
one industry may subject the Fund to more risk than if it
did not concentrate.
INVESTMENT RISKS
ECDs, ETDs, Yankee CDs, Canadian Commercial Paper, and
Europaper are subject
to different risks than domestic obligations of domestic
banks or
corporations. Examples of these risks include international
economic and
political developments, foreign governmental restrictions
that may
<PAGE>
adversely affect the payment of principal or interest,
foreign withholding or
other taxes on interest income, difficulties in obtaining or
enforcing a
judgment against the issuing entity, and the possible impact
of interruptions
in the flow of international currency transactions. Risks
may also exist for
ECDs, ETDs, and Yankee CDs because the banks issuing these
instruments, or
their domestic or foreign branches, are not necessarily
subject to the same
regulatory requirements that apply to domestic banks, such
as reserve
requirements, loan limitations, examinations, accounting,
auditing,
recordkeeping, and the public availability of information.
These factors will
be carefully considered by the Fund's adviser in selecting
investments for the
Fund.
INVESTMENT LIMITATIONS
The Fund will not borrow money directly or through reverse
repurchase
agreements (arrangements in which the Fund sells a money
market 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 its
total assets to secure such borrowings. This investment
limitation cannot be
changed without shareholder approval.
REGULATORY COMPLIANCE
The Fund may follow non-fundamental operational policies
that are more
restrictive than its fundamental investment limitations, as
set forth in this
prospectus and its Statement of Additional Information, in
order to comply
with applicable laws and regulations, including the
provisions of and
regulations under the Investment Company Act of 1940, as
amended. In
particular, the Fund will comply with the various
requirements of Rule 2a-7
which regulates money market mutual funds. For example, with
limited
exceptions, Rule 2a-7 prohibits the investment of more than
5% of the Fund's
total assets in the securities of any one issuer, although
the Fund's
investment limitation only requires such 5% diversification
with respect to
75% of its assets. The Fund will invest more than 5% of its
assets in any one
issuer only under the circumstances permitted by Rule 2a-7.
The Fund will also
determine the effective maturity of its investments, as well
as its ability to
consider a security as having received the requisite short-
term ratings by
NRSROs, according to Rule 2a-7. The Fund may change these
operational policies
to reflect changes in the laws and regulations without the
approval of its
shareholders.
CASH TRUST SERIES, INC. INFORMATION
- ------------------------------------------------------------
- -------------------
MANAGEMENT OF CASH TRUST SERIES, INC.
BOARD OF DIRECTORS. The Company is managed by a Board of
Directors. The
Directors are responsible for managing the Fund's business
affairs and for
exercising all the Company's powers except those reserved
for the
shareholders. An Executive Committee of the Board of
Directors handles the
Board's responsibilities between meetings of the Board.
INVESTMENT ADVISER. Investment decisions for the Fund are
made by Federated
Advisers, the Fund's investment adviser, subject to
direction by the
Directors. The adviser continually conducts investment
research and
supervision for the Fund and is responsible for the purchase
and sale of
portfolio instruments.
<PAGE>
ADVISORY FEES. The adviser receives an annual investment
advisory fee
equal to .50 of 1% of the Fund's average daily net assets.
The adviser has
undertaken to reimburse the Fund up to the amount of the
advisory fee for
operating expenses in excess of limitations established by
certain states.
The adviser also may voluntarily choose to waive a portion
of its fee or
reimburse other expenses of the Fund, but reserves the
right to terminate
such waiver or reimbursement at any time at its sole
discretion.
ADVISER'S BACKGROUND. Federated Advisers, a Delaware
business trust,
organized on April 11, 1989, is a registered investment
adviser under the
Investment Advisers Act of 1940. It is a subsidiary of
Federated
Investors. All of the Class A (voting) shares of Federated
Investors are
owned by a trust, the trustees of which are John F.
Donahue, Chairman and
Trustee of Federated Investors, Mr. Donahue's wife, and
Mr. Donahue's son,
J. Christopher Donahue, who is President and Trustee of
Federated
Investors.
Federated Advisers and other subsidiaries of Federated
Investors serve as
investment advisers to a number of investment companies
and private
accounts. Certain other subsidiaries also provide
administrative services
to a number of investment companies. With over $72 billion
invested across
more than 260 funds under management and/or administration
by its
subsidiaries, as of December 31, 1994, Federated Investors
is one of the
largest mutual fund investment managers in the United
States. With more
than 1,750 employees, Federated continues to be led by the
management who
founded the company in 1955. Federated funds are presently
at work in and
through 4,000 financial institutions nationwide. More than
100,000
investment professionals have selected Federated funds for
their clients.
Both the Company and the adviser have adopted strict codes
of ethics governing
the conduct of all employees who manage the Fund and its
portfolio securities.
These codes recognize that such persons owe a fiduciary duty
to the Fund's
shareholders and must place the interests of shareholders
ahead of the
employees' own interest. Among other things, the codes:
require preclearance
and periodic reporting of personal securities transactions;
prohibit personal
transactions in securities being purchased or sold, or being
considered for
purchase or sale, by the Fund; prohibit purchasing
securities in initial
public offerings; and prohibit taking profits on securities
held for less than
sixty days. Violations of the codes are subject to review by
the Directors,
and could result in severe penalties.
DISTRIBUTION OF 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.
State securities laws may require certain financial
institutions such as
depository institutions to register as dealers.
DISTRIBUTION AND SHAREHOLDER SERVICES. 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
.35 of 1% of the average daily net asset value of the Fund
to finance any
activity which is principally intended to result in the sale
of shares subject
to the
<PAGE>
Distribution Plan. The distributor may select financial
institutions such as
banks, fiduciaries, custodians for public funds, investment
advisers, and
broker/dealers to provide sales services or distribution-
related support 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 amounts or may earn
a profit from
future payments made by the Fund under the Distribution
Plan.
In addition, the Fund has entered into a Shareholder
Services Agreement with
Federated Shareholder Services, a subsidiary of Federated
Investors, under
which the Fund may make payments up to .25 of 1% of the
average daily net
asset value of the Fund to obtain personal services for
shareholders and for
the maintenance of shareholder accounts. Under the
Shareholder Services
Agreement, Federated Shareholders Services will either
perform shareholder
services directly or will select financial institutions to
perform shareholder
services. From time to time and for such periods as deemed
appropriate, the
amounts stated above may be reduced voluntarily. 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 Fund, the distributor,
or Federated
Shareholder Services, as appropriate.
SUPPLEMENTAL PAYMENTS TO FINANCIAL INSTITUTIONS. The
distributor may also pay
financial institutions a fee for providing certain services
to shareholders or
as financial assistance for providing substantial marketing
and sales support.
The support may include sponsoring sales, educational, and
training seminars
for employees of the financial institution, providing sales
literature, and
engineering computer software programs that emphasize the
attributes of the
Fund. Such financial assistance will be predicated upon the
amount of shares
of the Fund the financial institution sells or may sell
and/or upon the type
and nature of sales or marketing support furnished by the
financial
institution. Any payments made in addition to the amounts
paid under the
Plan(s) may be reimbursed by the adviser or its affiliates,
and not the Fund.
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 as
specified below:
<TABLE>
<CAPTION>
MAXIMUM FEE AVERAGE AGGREGATE
DAILY NET ASSETS
----------- -----------------
- ------------------
<S> <C>
.15 of 1% on the first $250
million
.125 of 1% on the next $250
million
.10 of 1% on the next $250
million
.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.
Average aggregate daily net assets include those of all
<PAGE>
mutual funds advised by affiliates of Federated Investors.
Federated
Administrative Services may choose voluntarily to waive a
portion of its fee.
CUSTODIAN. State Street Bank and Trust Company, Boston, MA
is custodian for
the securities and cash of the Fund.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated
Services Company,
Boston, MA is transfer agent for the shares of, and dividend
disbursing agent
for, the Fund.
INDEPENDENT AUDITORS. The independent auditors for the Fund
are Deloitte &
Touche LLP, Pittsburgh, PA.
NET ASSET VALUE
- ------------------------------------------------------------
- -------------------
The Fund attempts to stabilize the net asset value of its
shares at $1.00 by
valuing the portfolio securities using the amortized cost
method. The net
asset value per share is determined by subtracting total
liabilities from
total assets and dividing the remainder by the number of
shares outstanding.
The Fund cannot guarantee that its net asset value will
always remain at $1.00
per share.
The net asset value is determined at 12:00 noon, 3:00 p.m.
(Eastern time), and
as of the close of trading (normally 4:00 p.m., Eastern
time) on the New York
Stock Exchange, Monday through Friday, except on New Year's
Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day,
and Christmas Day.
INVESTING IN THE FUND
- ------------------------------------------------------------
- -------------------
SHARE PURCHASES
Shares are sold at their net asset value, without a sales
charge, next
determined after an order is received, on days on which the
New York Stock
Exchange and the Federal Reserve Wire System are open for
business. Shares may
be purchased as described below. Accounts may be opened
through a financial
institution (such as a bank or broker/dealer) or by
completing, signing, and
returning the new account form available from the Fund. In
connection with any
sale, Federated Securities Corp. may from time to time offer
certain items of
nominal value to any shareholder or investor. The Fund
reserves the right to
reject any purchase request.
THROUGH A FINANCIAL INSTITUTION. Investors may call their
financial
institutions to place an order. Orders through a financial
institution are
considered received when the Fund receives payment by wire
or converts payment
by check from the financial institution into federal funds.
It is the
financial institution's responsibility to transmit orders
promptly. Financial
institutions may charge additional fees for their services.
BY WIRE. To purchase by wire, call the Fund before 3:00 p.m.
(Eastern time) to
place an order. All information needed will be taken over
the telephone, and
the order is considered received immediately. Payment by
federal funds must be
received before 3:00 p.m. (Eastern time) that same day.
Federal funds should
be wired as follows: Federated Services Company, c/o State
Street Bank and
Trust Company, Boston, MA; Attention; EDGEWIRE; For Credit
to: Prime Cash
Series; Fund
<PAGE>
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.
BY MAIL. To purchase by mail, send a check made payable to
Prime Cash Series
to: Federated Services Company, Prime Cash Series, P.O. Box
8600, Boston, MA
02266-8600. Orders by mail are considered received when
payment by check is
converted into federal funds. This is normally the next
business day after the
check is received.
SYSTEMATIC INVESTMENT PROGRAM. Under this program, funds in
a minimum of $500
are automatically withdrawn periodically from the
shareholder's checking
account at any Automated Clearing House member institution
and invested in
Fund shares.
Shareholders should contact their financial institution
and/or the Fund to
participate in this program.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment is $10,000. The minimum
initial investment for
retirement plans is $1,000. Minimum subsequent investments
must be $500.
Minimum investments will be calculated by combining all
accounts maintained
with the Fund. The Fund may from time to time waive the
minimum investment
requirements.
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 by contacting the Fund or Federated Services
Company in writing.
Monthly confirmations are sent to report transactions such
as all purchases
and redemptions as well as dividends paid during the month.
DIVIDENDS
Dividends are declared daily and paid monthly. Dividends are
automatically
reinvested on payment dates in additional shares of the Fund
unless cash
payments are requested by writing to the Fund. Shares
purchased by wire before
3:00 p.m. (Eastern time) begin earning dividends that day.
Shares purchased by
check begin earning dividends the day after the check is
converted into
federal funds.
CAPITAL GAINS
The Fund does not expect to realize any capital gains or
losses. If capital
gains or losses were to occur, they could result in an
increase or decrease in
dividends. The Fund will distribute in cash or additional
shares any realized
net long-term capital gains at least once every 12 months.
REDEEMING SHARES
- ------------------------------------------------------------
- -------------------
Shares are redeemed 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 as described below.
<PAGE>
THROUGH A FINANCIAL INSTITUTION
Shares may be redeemed by calling the shareholder's
financial institution.
Shares will be redeemed at the net asset value next
determined after Federated
Services Company receives the redemption request from the
financial
institution. The financial institution is responsible for
promptly submitting
redemption requests and providing proper written redemption
instructions. The
financial institution may charge customary fees and
commissions for this
service.
An authorization form permitting redemption requests by
telephone must first
be completed. Authorization forms and information on this
service are
available from Federated Securities Corp.
In the event of drastic economic or market changes, a
shareholder may
experience difficulty in redeeming by telephone. If this
occurs, another
method of redemption, such as "By Mail," should be
considered.
RECEIVING PAYMENT. Pursuant to instructions from the
financial institution,
redemptions will be made by check or by wire.
BY WIRE. Proceeds for redemption requests received before
12:00 noon,
(Eastern time) will be wired the same day but will not be
entitled to that
day's dividend. Redemption requests received after 12:00
noon, (Eastern
time) will receive that day's dividends and will be wired
the following
business day.
BY MAIL
Shares may be redeemed by sending a written request to:
Prime Cash Series,
P.O. Box 8600 Boston, MA 02266-8600. The written request
should state: Prime
Cash Series; shareholder's name; the account number; and the
share or dollar
amount requested. Sign the request exactly as the shares are
registered.
Shareholders should call the Fund for assistance in
redeeming by mail.
If share certificates have been issued, they should be sent
by insured mail
with the written request to: Federated Services Company, 500
Victory Road-2nd
Floor, North Quincy, MA 02171.
Shareholders requesting a redemption of any amount to be
sent to an address
other than that on record with the Fund, or a redemption
payable other than to
the shareholder of record must have their signatures
guaranteed by:
. a 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 the 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 the
signature guarantee program. The Fund and its transfer agent
reserve the right
to amend these standards at any time without notice.
<PAGE>
Normally, a check for the proceeds is mailed within one
business day, but in
no event more than seven days, after receipt of a proper
written redemption
request. Dividends are paid up to and including the day that
a redemption
request is processed.
BY WRITING A CHECK. At the shareholder's request, a checking
account for
redeeming shares will be established. For further
information, contact State
Street Bank and Trust Company.
With this checking account, shares may be redeemed by
writing a check for $100
or more. The redemption will be made at the net asset value
on the date that
the check is presented to the Fund. A check may not be
written to close an
account. A shareholder may obtain cash by negotiating the
check through the
shareholder's local bank. Checks should never be made
payable or sent to State
Street Bank and Trust Company to redeem shares. Cancelled
checks are sent to
the shareholder each month.
BY VISA CARD. At the shareholder's request, State Street
Bank and Trust
Company will establish a VISA account. This account allows a
shareholder to
redeem shares by using a VISA card. A fee, determined by
State Street Bank and
Trust Company, will be charged to the account for this
service. For further
information, contact the Fund.
TELEPHONE REDEMPTION
Shares may be redeemed by telephoning the Fund. Telephone
instructions may be
recorded and 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
requests must first
be completed. Authorization forms and information on this
service are
available from Federated Securities Corp.
If the redemption request is received before 12:00 noon
(Eastern time), the
proceeds will be wired the same day to the shareholder's
account at a domestic
commercial bank which is a member of the Federal Reserve
System, and those
shares redeemed will not be entitled to that day's dividend.
A daily dividend
will be paid on shares redeemed if the redemption request is
received after
12:00 noon (Eastern time). However, the proceeds are not
wired until the
following business day. Under limited circumstances,
arrangements may be made
with the distributor for same-day payment of proceeds,
without that day's
dividend, for redemption requests received before 12:00 noon
(Eastern time).
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. If at
any time the Fund shall determine it necessary to terminate
or modify this
method of redemption, shareholders would be promptly
notified.
BY A SYSTEMATIC WITHDRAWAL PROGRAM
If a shareholder's account has a value of at least $10,000,
a systematic
withdrawal program may be established whereby automatic
redemptions are made
from the account and transferred electronically to any
commercial bank,
savings bank, or credit union that is an Automated Clearing
House member.
Shareholders may apply for participation in this program
through their
financial institution.
<PAGE>
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low
balances, the Fund may
redeem shares in any account, except accounts maintained by
retirement plans,
and pay the proceeds to the shareholder if the account
balance falls below a
required minimum value of $10,000 due to shareholder
redemptions.
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
Director elections
and other matters submitted to shareholders for vote. All
shares of each
portfolio in the Company have equal voting rights, except
that in matters
affecting only a particular portfolio, only shares of that
portfolio are
entitled to vote. As a Maryland corporation, the Company is
not required to
hold annual shareholder meetings. Shareholder approval will
be sought only for
certain changes in the Company's or the Fund's operation and
for the election
of Directors, under certain circumstances.
Directors may be removed by the Directors or by shareholders
at a special
meeting. A special meeting of the shareholders for this
purpose shall be
called by the Directors upon the written request of
shareholders owning at
least 10% of the outstanding shares of the Company.
TAX INFORMATION
- ------------------------------------------------------------
- -------------------
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects
to meet
requirements of the Internal Revenue 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
Company's other portfolios will not be combined for tax
purposes with those
realized by the Fund.
Unless otherwise exempt, shareholders are required to pay
federal income tax
on any dividends and other distributions received. This
applies whether
dividends and distributions are received in cash or as
additional shares.
PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES
Shares are exempt from personal property taxes imposed by
counties,
municipalities, and school districts in Pennsylvania.
OTHER STATE AND LOCAL TAXES Shareholders are urged to
consult their own tax
advisers regarding the status of their accounts under state
and local tax
laws.
<PAGE>
PERFORMANCE INFORMATION
- ------------------------------------------------------------
- -------------------
From time to time, the Fund advertises its yield and
effective yield.
Yield represents the annualized rate of income earned on an
investment over a
seven-day period. It is the annualized dividends earned
during the period on
an investment shown as a percentage of the investment. The
effective yield is
calculated similarly to the yield, but when annualized, the
income earned by
an investment is assumed to be reinvested daily. The
effective yield will be
slightly higher than the yield because of the compounding
effect of this
assumed reinvestment.
Advertisements and sales literature may also refer to total
return. Total
return represents the change, over a specified period of
time, in the value of
an investment in the Fund after reinvesting all income
distributions. It is
calculated by dividing that change by the initial investment
and is expressed
as a percentage.
From time to time, advertisements for the Fund may refer to
ratings, rankings,
and other information in certain financial publications
and/or compare the
Fund's performance to certain indices.
<PAGE>
PRIME CASH SERIES
PROSPECTUS
A Diversified Portfolio
of Cash Trust
Series, Inc., an Open-
End Management
Investment Company
Prospectus dated
September 30, 1995
[LOGO] Federated Securities Corp.
Distributor
A subsidiary of Federated Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
CUSIP 147551105
9080101A (9/95)
<PAGE>
TREASURY CASH SERIES
(A PORTFOLIO OF CASH TRUST SERIES, INC.)
PROSPECTUS
The shares of Treasury Cash Series (the "Fund") offered by
this prospectus
represent interests in a diversified portfolio of Cash Trust
Series, Inc. (the
"Company"), an open-end management investment company (a
mutual fund). The
Fund invests in short-term U.S. Treasury securities to
achieve current income
consistent with stability of principal and liquidity.
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 OR
GUARANTEED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT
INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY.
INVESTMENT IN THESE
SHARES INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF
PRINCIPAL. THE
FUND ATTEMPTS TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00
PER SHARE; THERE
CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO DO SO.
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 September
30, 1995, 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, which is in paper form only, or a
paper copy of this
prospectus, if you have received your prospectus
electronically, free of
charge by calling 1-800-235-4669. To obtain other
information, or make
inquiries about the Fund, contact your financial
institution.
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 September 30, 1995
<PAGE>
TABLE OF CONTENTS
- ------------------------------------------------------------
- --------------------
SUMMARY OF FUND EXPENSES 1 INVESTING IN THE
FUND 7
- ------------------------------------- ------------------
- -------------------
FINANCIAL HIGHLIGHTS--TREASURY CASH Share Purchases
7
SERIES 2 Through a
Financial Institution 7
- ------------------------------------- By Wire
7
By Mail
8
GENERAL INFORMATION 3 Systematic
Investment Program 8
- ------------------------------------- Minimum
Investment Required 8
Certificates and
Confirmations 8
INVESTMENT INFORMATION 3 Dividends
8
- ------------------------------------- Capital Gains
8
Investment Objective 3 REDEEMING SHARES
8
Investment Policies 3 ------------------
- -------------------
Acceptable Investments 3
Repurchase Agreements 3 Through a
Financial Institution 9
When-Issued and Delayed Delivery Receiving
Payment 9
Transactions 3 By Wire
9
Investment Limitations 4 By Mail
9
Regulatory Compliance 4 By Writing a
Check 10
By VISA Card
10
FUND INFORMATION 4
- ------------------------------------- Telephone
Redemption 10
By a Systematic
Withdrawal
Program
10
Accounts with Low
Balances 11
Management of the Fund 4
Board of Directors 4
Investment Adviser 4 SHAREHOLDER
INFORMATION 11
Advisory Fees 5 ------------------
- -------------------
Adviser's Background 5
Distribution of Shares 5 Voting Rights
11
Distribution and Shareholder
Services 5
TAX INFORMATION
11
------------------
- -------------------
Supplemental Payments to
Financial Institutions 6
Federal Income
Tax 11
Administration of the Fund 6
Administrative Services 6 Pennsylvania
Corporate and
Custodian 7 Personal
Property Taxes 11
Transfer Agent and Dividend Other State and
Local Taxes 12
Disbursing Agent 7
Independent Auditors 7 PERFORMANCE
INFORMATION 12
------------------
- -------------------
NET ASSET VALUE 7
- ------------------------------------- ADDRESSES
13
------------------
- -------------------
<PAGE>
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 pur-
chase price
or redemption proceeds, as
applicable)............................ None
Redemption Fee (as a percentage of amount redeemed, if
applicable). None
Exchange
Fee.......................................................
None
ANNUAL FUND OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver)
(1).................................. 0.42%
12b-1 Fee (after waiver)
(2)....................................... 0.10%
Total Other
Expenses...............................................
0.47%
Shareholder Services
Fee......................................... 0.25%
Total Fund Operating Expenses
(3).............................. 0.99%
</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
0.50%.
(2) The maximum 12b-1 fee is 0.35%.
(3) The total Fund operating expenses would have been 1.07%
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 THE FUND
WILL BEAR, EITHER
DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF
THE VARIOUS COSTS
AND EXPENSES, SEE "CASH TRUST SERIES, INC. INFORMATION."
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) redemp-
tion at the end
of each time period............................ $10 $32
$55 $121
</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.
<PAGE>
TREASURY CASH SERIES
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------
- -------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
The following table has been audited by Deloitte & Touche
LLP, the Fund's
independent auditors. Their report, dated July 14, 1995, on
the Fund's
financial statements for the year ended May 31, 1995, and on
the following
table for each of the periods presented, is included in the
Annual Report,
which is incorporated by reference. This table should be
read in conjunction
with the Fund's financial statements and notes thereto,
which may be obtained
from the Fund.
<TABLE>
<CAPTION>
YEAR ENDED MAY 31,
-----------------------------------
- ------------------
1995 1994 1993 1992
1991 1990(A)
- ----------------------- -------- -------- -------- --------
- -------- --------
<S> <C> <C> <C> <C>
<C> <C>
NET ASSET VALUE, BEGIN-
NING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
$ 1.00 $ 1.00
- -----------------------
INCOME FROM INVESTMENT
OPERATIONS
- -----------------------
Net investment income 0.04 0.02 0.02 0.04
0.07 0.02
- -----------------------
LESS DISTRIBUTIONS
- -----------------------
Distributions from net
investment
income (0.04) (0.02) (0.02) (0.04)
(0.07) (0.02)
- ----------------------- ------ ------ ------ ------
- ------ ------
NET ASSET VALUE, END OF $ 1.00 $ 1.00 $ 1.00 $ 1.00
$ 1.00 $ 1.00
PERIOD ------ ------ ------ ------
- ------ ------
- -----------------------
TOTAL RETURN (B) 4.34% 2.37% 2.47% 4.24%
6.83% 2.42%
- -----------------------
RATIOS TO AVERAGE NET
ASSETS
- -----------------------
Expenses 0.99% 0.99% 0.99% 0.98%
0.88% 0.60%(c)
- -----------------------
Net investment income 4.26% 2.33% 2.46% 4.18%
6.39% 7.75%(c)
- -----------------------
Expense waiver/
reimbursement (d) 0.08% 0.10% 0.04% 0.04%
0.22% 0.44%(c)
- -----------------------
SUPPLEMENTAL DATA
- -----------------------
<CAPTION>
Net assets, end of pe-
riod
(000 omitted)
- ----------------------- $424,091 $427,005 $532,334 $638,761
$713,430 $127,800
</TABLE>
(a) Reflects operations for the period from February 7, 1990
(date of initial
public investment) to May 31, 1990.
(b) Based on net asset value, which does not reflect the
sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the
expense and net
investment income ratios shown above.
Further information about the Fund's performance is
contained in the Fund's
Annual Report dated May 31, 1995, which can be obtained free
of charge.
<PAGE>
GENERAL INFORMATION
- ------------------------------------------------------------
- -------------------
The Company was established as a Maryland corporation under
Articles of
Incorporation dated February 1, 1993. The Articles of
Incorporation permit the
Company to offer separate series of shares representing
interests in separate
portfolios of securities. The Fund is designed for customers
of financial
institutions such as banks, fiduciaries, custodians of
public funds,
investment advisers, and broker/dealers as a convenient
means of accumulating
an interest in a professionally managed, diversified
portfolio investing only
in short-term U.S. Treasury securities. A minimum initial
investment of
$10,000 is required, except for retirement plans which have
a minimum initial
investment of $1,000. Subsequent investments must be in
amounts of at least
$500.
The Fund attempts to stabilize the value of a share at
$1.00. Shares are
currently sold and redeemed at that price.
INVESTMENT INFORMATION
- ------------------------------------------------------------
- -------------------
INVESTMENT OBJECTIVE
The investment objective of the Fund is current income
consistent with
stability of principal and liquidity. This investment
objective cannot be
changed without shareholder approval. While there is no
assurance that the
Fund will achieve its investment objective, it endeavors to
do so by following
the investment policies described in this prospectus.
INVESTMENT POLICIES
The Fund pursues its investment objective by investing only
in U.S. Treasury
securities maturing in 13 months or less. The average
maturity of the
securities in the Fund's portfolio, computed on a dollar-
weighted basis, will
be 90 days or less. Unless indicated otherwise, the
investment policies may be
changed by the Directors without shareholder approval.
Shareholders will be
notified before any material change in these policies
becomes effective.
The Fund will limit its investments to investments which, if
owned directly,
pay interest exempt from state personal income tax.
Therefore, dividends paid
by the Fund may be exempt from state personal income tax.
ACCEPTABLE INVESTMENTS. The Fund invests only in U.S.
Treasury securities,
which are fully guaranteed as to principal and interest by
the United States.
REPURCHASE AGREEMENTS. Certain securities in which the Fund
invests may be
purchased pursuant to repurchase agreements. Repurchase
agreements are
arrangements in which banks, broker/dealers, and other
recognized financial
institutions sell securities to the Fund and agree at the
time of sale to
repurchase them at a mutually agreed upon time and price. To
the extent that
the seller does not repurchase the securities from the Fund,
the Fund could
receive less than the repurchase price on any sale of such
securities.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may
purchase
securities on a when-issued or delayed delivery basis. These
transactions are
arrangements in which the Fund purchases securities with
payment and delivery
scheduled for a future time. The seller's failure to
complete these
<PAGE>
transactions may cause the Fund to miss a price or yield
considered to be
advantageous. Settlement dates may be a month or more after
entering into
these transactions, and the market values of the securities
purchased may vary
from the purchase prices. Accordingly, the Fund may pay more
or less than the
market value of the securities on the settlement date.
The Fund may dispose of a commitment prior to settlement if
the adviser deems
it appropriate to do so. In addition, the Fund may enter
into transactions to
sell its purchase commitments to third parties at current
market values and
simultaneously acquire other commitments to purchase similar
securities at
later dates. The Fund may realize short-term profits or
losses upon the sale
of such commitments.
INVESTMENT LIMITATIONS
The Fund will not borrow money directly or through reverse
repurchase
agreements (arrangements in which the Fund sells a money
market 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 its
total assets to secure such borrowings.
The above investment limitation cannot be changed without
shareholder
approval. The following limitation, however, may be changed
by the Directors
without shareholder approval. Shareholders will be notified
before any
material change in this limitation becomes effective.
The Fund will not invest more than 10% of its net assets in
illiquid
securities, including repurchase agreements providing for
settlement in more
than seven days after notice.
REGULATORY COMPLIANCE
The Fund may follow non-fundamental operational policies
that are more
restrictive than its fundamental investment limitations, as
set forth in this
prospectus and its Statement of Additional Information, in
order to comply
with applicable laws and regulations, including the
provisions of and
regulations under the Investment Company Act of 1940, as
amended. In
particular, the Fund will comply with the various
requirements of Rule 2a-7,
which regulates money market mutual funds. The Fund will
determine the
effective maturity of its investments according to Rule 2a-
7. The Fund may
change these operational policies to reflect changes in the
laws and
regulations without the approval of its shareholders.
CASH TRUST SERIES, INC. INFORMATION
- ------------------------------------------------------------
- -------------------
MANAGEMENT OF CASH TRUST SERIES, INC.
BOARD OF DIRECTORS. The Company is managed by a Board of
Directors. The
Directors are responsible for managing the Fund's business
affairs and for
exercising all the Company's powers except those reserved
for the
shareholders. An Executive Committee of the Board of
Directors handles the
Board's responsibilities between meetings of the Board.
INVESTMENT ADVISER. Investment decisions for the Fund are
made by Federated
Advisers, the Fund's investment adviser, subject to
direction by the
Directors. The adviser continually conducts investment
research and
supervision for the Fund and is responsible for the purchase
and sale of
portfolio instruments.
<PAGE>
ADVISORY FEES. The adviser receives an annual investment
advisory fee
equal to .50 of 1% of the Fund's average daily net assets.
The adviser has
undertaken to reimburse the Fund up to the amount of the
advisory fee for
operating expenses in excess of limitations established by
certain states.
The adviser also may voluntarily choose to waive a portion
of its fee or
reimburse other expenses of the Fund, but reserves the
right to terminate
such waiver or reimbursement at any time at its sole
discretion.
ADVISER'S BACKGROUND. Federated Advisers, a Delaware
business trust,
organized on April 11, 1989, is a registered investment
adviser under the
Investment Advisers Act of 1940. It is a subsidiary of
Federated
Investors. All of the Class A (voting) shares of Federated
Investors are
owned by a trust, the trustees of which are John F.
Donahue, Chairman and
Trustee of Federated Investors, Mr. Donahue's wife, and
Mr. Donahue's son,
J. Christopher Donahue, who is President and Trustee of
Federated
Investors.
Federated Advisers and other subsidiaries of Federated
Investors serve as
investment advisers to a number of investment companies
and private
accounts. Certain other subsidiaries also provide
administrative services
to a number of investment companies. With over $72 billion
invested across
more than 260 funds under management and/or administration
by its
subsidiaries, as of December 31, 1994, Federated Investors
is one of the
largest mutual fund investment managers in the United
States. With more
than 1,750 employees, Federated continues to be led by the
management who
founded the company in 1955. Federated funds are presently
at work in and
through 4,000 financial institutions nationwide. More than
100,000
investment professionals have selected Federated funds for
their clients.
Both the Company and the adviser have adopted strict codes
of ethics governing
the conduct of all employees who manage the Fund and its
portfolio securities.
These codes recognize that such persons owe a fiduciary duty
to the Fund's
shareholders and must place the interests of shareholders
ahead of the
employees' own interest. Among other things, the codes:
require preclearance
and periodic reporting of personal securities transactions;
prohibit personal
transactions in securities being purchased or sold, or being
considered for
purchase or sale, by the Fund; prohibit purchasing
securities in initial
public offerings; and prohibit taking profits on securities
held for less than
sixty days. Violations of the codes are subject to review by
the Directors,
and could result in severe penalties.
DISTRIBUTION OF 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.
State securities laws may require certain financial
institutions such as
depository institutions to register as dealers.
DISTRIBUTION AND SHAREHOLDER SERVICES. 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
.35 of 1% of the average daily net asset value of the Fund
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,
<PAGE>
custodians for public funds, investment advisers, and
broker/dealers to
provide sales services or distribution-related support 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 amounts or may earn
a profit from
future payments made by the Fund under the Distribution
Plan.
In addition, the Fund has entered into a Shareholder
Services Agreement with
Federated Shareholder Services, a subsidiary of Federated
Investors, under
which the Fund may make payments up to .25 of 1% of the
average daily net
asset value of the Fund to obtain personal services for
shareholders and for
the maintenance of shareholder accounts. Under the
Shareholder Services
Agreement, Federated Shareholders Services will either
perform shareholder
services directly or will select financial institutions to
perform shareholder
services. From time to time and for such periods as deemed
appropriate, the
amounts stated above may be reduced voluntarily. 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 Fund, the distributor,
or Federated
Shareholder Services, as appropriate.
SUPPLEMENTAL PAYMENTS TO FINANCIAL INSTITUTIONS. The
distributor may also pay
financial institutions a fee for providing certain services
to shareholders or
as financial assistance for providing substantial marketing
and sales support.
The support may include sponsoring sales, educational, and
training seminars
for employees of the financial institution, providing sales
literature, and
engineering computer software programs that emphasize the
attributes of the
Fund. Such financial assistance will be predicated upon the
amount of shares
of the Fund the financial institution sells or may sell
and/or upon the type
and nature of sales or marketing support furnished by the
financial
institution. Any payments made in addition to the amounts
paid under the
Plan(s) may be reimbursed by the adviser or its affiliates,
and not the Fund.
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 as
specified below:
<TABLE>
<CAPTION>
MAXIMUM FEE AVERAGE AGGREGATE
DAILY NET ASSETS
----------- -----------------
- ------------------
<S> <C>
.15 of 1% on the first $250
million
.125 of 1% on the next $250
million
.10 of 1% on the next $250
million
.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.
Average aggregate daily net assets include those of all
<PAGE>
mutual funds advised by affiliates of Federated Investors.
Federated
Administrative Services may choose voluntarily to waive a
portion of its fee.
CUSTODIAN. State Street Bank and Trust Company, MA, is
custodian for the
securities and cash of the Fund.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated
Services Company,
Boston, MA, is transfer agent for the shares of, and
dividend disbursing agent
for, the Fund.
INDEPENDENT AUDITORS. The independent auditors for the Fund
are Deloitte &
Touche LLP, Pittsburgh, PA.
NET ASSET VALUE
- ------------------------------------------------------------
- -------------------
The Fund attempts to stabilize the net asset value of its
shares at $1.00 by
valuing the portfolio securities using the amortized cost
method. The net
asset value per share is determined by subtracting total
liabilities from
total assets and dividing the remainder by the number of
shares outstanding.
The Fund cannot guarantee that its net asset value will
always remain at $1.00
per share.
The net asset value is determined at 12:00 noon, 3:00 p.m.
(Eastern time), and
as of the close of trading (normally 4:00 p.m., Eastern
time) on the New York
Stock Exchange, Monday through Friday, except on New Year's
Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day,
and Christmas Day.
INVESTING IN THE FUND
- ------------------------------------------------------------
- -------------------
SHARE PURCHASES
Shares are sold at their net asset value, without a sales
charge, next
determined after an order is received, on days on which the
New York Stock
Exchange and the Federal Reserve Wire System are open for
business. Shares may
be purchased as described below. Accounts may be opened
through a financial
institution (such as a bank or broker/dealer) or by
completing, signing, and
returning the new account form available from the Fund. In
connection with any
sale, Federated Securities Corp. may from time to time offer
certain items of
nominal value to any shareholder or investor. The Fund
reserves the right to
reject any purchase request.
THROUGH A FINANCIAL INSTITUTION. Investors may call their
financial
institutions to place an order. Orders through a financial
institution are
considered received when the Fund receives payment by wire
or converts payment
by check from the financial institution into federal funds.
It is the
financial institution's responsibility to transmit orders
promptly. Financial
institutions may charge additional fees for their services.
BY WIRE. To purchase by wire, call the Fund before 3:00 p.m.
(Eastern time) to
place an order. All information needed will be taken over
the telephone, and
the order is considered received immediately. Payment by
federal funds must be
received before 3:00 p.m. (Eastern time) that same day.
Federal funds should
be wired as follows: Federated Services Company, c/o State
Street Bank
<PAGE>
and Trust Company, Boston, MA; Attention; EDGEWIRE; For
Credit to: Treasury
Cash Series; 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.
BY MAIL. To purchase by mail, send a check made payable to
Treasury Cash
Series to: Federated Services Company, Treasury Cash Series,
P.O. Box 8600,
Boston, MA 02266-8600. Orders by mail are considered
received when payment by
check is converted into federal funds. This is normally the
next business day
after the check is received.
SYSTEMATIC INVESTMENT PROGRAM. Under this program, funds in
a minimum of $500
are automatically withdrawn periodically from the
shareholder's checking
account at any Automated Clearing House member institution
and invested in
Fund shares.
Shareholders should contact their financial institution
and/or the Fund to
participate in this program.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment is $10,000. The minimum
initial investment for
retirement plans is $1,000. Minimum subsequent investments
must be $500.
Minimum investments will be calculated by combining all
accounts maintained
with the Fund. The Fund may from time to time waive the
minimum investment
requirements.
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 by contacting the Fund or Federated Services
Company in writing.
Monthly confirmations are sent to report transactions such
as all purchases
and redemptions as well as dividends paid during the month.
DIVIDENDS
Dividends are declared daily and paid monthly. Dividends are
automatically
reinvested on payment dates in additional shares of the Fund
unless cash
payments are requested by writing to the Fund. Shares
purchased by wire before
3:00 p.m. (Eastern time) begin earning dividends that day.
Shares purchased by
check begin earning dividends the day after the check is
converted into
federal funds.
CAPITAL GAINS
The Fund does not expect to realize any capital gains or
losses. If capital
gains or losses were to occur, they could result in an
increase or decrease in
dividends. The Fund will distribute in cash or additional
shares any realized
net long-term capital gains at least once every 12 months.
REDEEMING SHARES
- ------------------------------------------------------------
- -------------------
Shares are redeemed 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 as described below.
<PAGE>
THROUGH A FINANCIAL INSTITUTION
Shares may be redeemed by calling the shareholder's
financial institution.
Shares will be redeemed at the net asset value next
determined after Federated
Services Company receives the redemption request from the
financial
institution. The financial institution is responsible for
promptly submitting
redemption requests and providing proper written redemption
instructions. The
financial institution may charge customary fees and
commissions for this
service.
An authorization form permitting redemption requests by
telephone must first
be completed. Authorization forms and information on this
service are
available from Federated Securities Corp.
In the event of drastic economic or market changes, a
shareholder may
experience difficulty in redeeming by telephone. If this
occurs, another
method of redemption, such as "By Mail," should be
considered.
RECEIVING PAYMENT. Pursuant to instructions from the
financial institution,
redemptions will be made by check or by wire.
BY WIRE. Proceeds for redemption requests received before
12:00 noon,
(Eastern time) will be wired the same day but will not be
entitled to that
day's dividend. Redemption requests received after 12:00
noon, (Eastern
time) will receive that day's dividends and will be wired
the following
business day.
BY MAIL
Shares may be redeemed by sending a written request to:
Treasury Cash Series,
P.O. Box 8600, Boston, MA 02266-8600. The written request
should state:
Treasury Cash Series; shareholder's name; the account
number; and the share or
dollar amount requested. Sign the request exactly as the
shares are
registered. Shareholders should call the Fund for assistance
in redeeming by
mail.
If share certificates have been issued, they should be sent
by insured mail
with the written request to: Federated Services Company, 500
Victory Road-2nd
Floor, North Quincy, MA, 02171.
Shareholders requesting a redemption of any amount to be
sent to an address
other than that on record with the Fund, or a redemption
payable other than to
the shareholder of record must have their signatures
guaranteed by:
. 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 the 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
<PAGE>
institutions that are members of the 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 within one
business day, but in
no event more than seven days, after receipt of a proper
written redemption
request. Dividends are paid up to and including the day that
a redemption
request is processed.
BY WRITING A CHECK. At the shareholder's request, a checking
account for
redeeming shares will be established. For further
information, contact State
Street Bank and Trust Company.
With this checking account, shares may be redeemed by
writing a check for
$100.00 or more. The redemption will be made at the net
asset value on the
date that the check is presented to the Fund. A check may
not be written to
close an account. A shareholder may obtain cash by
negotiating the check
through the shareholder's local bank. Checks should never be
made payable or
sent to State Street Bank and Trust Company to redeem
shares. Cancelled checks
are sent to the shareholder each month.
BY VISA CARD. At the shareholder's request, State Street
Bank and Trust
Company will establish a VISA account. This account allows a
shareholder to
redeem shares by using a VISA card. A fee, determined by
State Street Bank and
Trust Company, will be charged to the account for this
service. For further
information, contact the Fund.
TELEPHONE REDEMPTION
Shares may be redeemed by telephoning the Fund. Telephone
instructions may be
recorded and 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
requests must first
be completed. Authorization forms and information on this
service are
available from Federated Securities Corp.
If the redemption request is received before 12:00 noon
(Eastern time), the
proceeds will be wired the same day to the shareholder's
account at a domestic
commercial bank which is a member of the Federal Reserve
System, and those
shares redeemed will not be entitled to that day's dividend.
A daily dividend
will be paid on shares redeemed if the redemption request is
received after
12:00 noon (Eastern time). However, the proceeds are not
wired until the
following business day. Under limited circumstances,
arrangements may be made
with the distributor for same-day payment of proceeds,
without that day's
dividend, for redemption requests received before 12:00 noon
(Eastern time).
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. If at
any time the Fund shall determine it necessary to terminate
or modify this
method of redemption, shareholders would be promptly
notified.
BY A SYSTEMATIC WITHDRAWAL PROGRAM
If a shareholder's account has a value of at least $10,000,
a systematic
withdrawal program may be established whereby automatic
redemptions are made
from the account and transferred electronically to any
commercial bank,
savings bank, or credit union that is an Automated Clearing
House member.
Shareholders may apply for participation in this program
through their
financial institution.
<PAGE>
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low
balances, the Fund may
redeem shares in any account, except accounts maintained by
retirement plans,
and pay the proceeds to the shareholder if the account
balance falls below a
required minimum value of $10,000 due to shareholder
redemptions.
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
Director elections
and other matters submitted to shareholders for vote. All
shares of each
portfolio in the Company have equal voting rights, except
that in matters
affecting only a particular portfolio, only shares of that
portfolio are
entitled to vote. As a Maryland corporation, the Company is
not required to
hold annual shareholder meetings. Shareholder approval will
be sought only for
certain changes in the Company's or the Fund's operation and
for the election
of Directors, under certain circumstances.
Directors may be removed by the Directors or by shareholders
at a special
meeting. A special meeting of the shareholders for this
purpose shall be
called by the Directors upon the written request of
shareholders owning at
least 10% of the outstanding shares of the Company.
TAX INFORMATION
- ------------------------------------------------------------
- -------------------
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects
to meet
requirements of the Internal Revenue 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
Company's other portfolios will not be combined for tax
purposes with those
realized by the Fund.
Unless otherwise exempt, shareholders are required to pay
federal income tax
on any dividends and other distributions received. This
applies whether
dividends and distributions are received in cash or as
additional shares.
PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES
Shares are exempt from personal property taxes imposed by
counties,
municipalities, and school districts in Pennsylvania.
<PAGE>
OTHER STATE AND LOCAL TAXES. The Fund will limit its
investments to those
which, if owned directly, pay interest exempt from state
personal income tax.
However, under the laws of some states, the net investment
income distributed
by the Fund may be taxable to shareholders. 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 yield and
effective yield.
Yield represents the annualized rate of income earned on an
investment over a
seven-day period. It is the annualized dividends earned
during the period on
an investment shown as a percentage of the investment. The
effective yield is
calculated similarly to the yield, but when annualized, the
income earned by
an investment is assumed to be reinvested daily. The
effective yield will be
slightly higher than the yield because of the compounding
effect of this
assumed reinvestment.
Advertisements and sales literature may also refer to total
return. Total
return represents the change, over a specified period of
time, in the value of
an investment in the Fund after reinvesting all income
distributions. It is
calculated by dividing that change by the initial investment
and is expressed
as a percentage.
From time to time, advertisements for the Fund may refer to
ratings, rankings,
and other information in certain financial publications
and/or compare the
Fund's performance to certain indices.
<PAGE>
ADDRESSES
- ------------------------------------------------------------
- --------------------
Cash Trust Series, Inc. Federated
Investors Tower
Pittsburgh, PA 15222-3779
- ------------------------------------------------------------
- --------------------
Distributor
Federated Securities Corp. Federated
Investors Tower
Pittsburgh, PA 15222-3779
- ------------------------------------------------------------
- --------------------
Investment Adviser
Federated Advisers Federated
Investors Tower
Pittsburgh, PA 15222-3779
- ------------------------------------------------------------
- --------------------
Custodian
State Street Bank and Trust Company
P.O. Box
8600 Boston, MA
02266-8600
- ------------------------------------------------------------
- --------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company
P.O. Box
8600 Boston, MA
02266-8600
- ------------------------------------------------------------
- --------------------
Independent Public Accountants
Deloitte & Touche LLP 2500 One
PPG Place
Pittsburgh, PA 15222
- ------------------------------------------------------------
- --------------------
<PAGE>
TREASURY CASH SERIES
PROSPECTUS
A Diversified
Portfolio of
Cash Trust Series,
Inc., an Open-End
Management
Investment Company
Prospectus dated
September 30, 1995
[LOGO] FEDERATED SECURITIES CORP.
DISTRIBUTOR
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
CUSIP 147551402
0010801A (9/95)
PART C. OTHER INFORMATION.
Item 24. Financial Statements and
Exhibits:
(a) Financial Statements:
Incorporated by reference to
the Annual Reports to
Shareholders of the Funds dated
May 31, 1995 (File No. 811-
5843).
(b) Exhibits:
(1) Conformed copy of
Articles of Incorporation of the Registrant
(7.);
(2) By-Laws of the Registrant as a
Maryland corporation;+
(3) Not applicable;
(4) Copy of Specimen
Certificate for Shares of Beneficial Interest
of the Registrant (2.);
(5) Conformed copy of
Investment Advisory Contract of the
Registrant (7.);
(6) (i) Copy of Administrative
Support and Distributor's Contract
of the Registrant(3);
(ii) The Registrant
hereby incorporates the conformed copy
of the specimen Mutual Funds Sales and
Service Agreement; Mutual Funds Service
Agreement and Plan Trustee/Mutual Funds
Service Agreement from Item 24(b)6 of
the Cash Trust Series II Registration
Statement on Form N-1A, filed with the
Commission on July 24, 1995. (File Nos.
33-38550 and 811-6269);
(7) Not applicable;
(8) Conformed copy of
Custodian Contract of the Registrant; +
(9) (i) Conformed copy of Fund
Accounting, Shareholder Recordkeeping,
and Custody Services Procurement
Agreement of the Registrant; +
(ii) Conformed copy of
Administrative Services Agreement of
the Registrant(8);
(iii) Conformed copy of
Shareholder Services Agreement (8);
(iv) The responses described
in Item 24(b)6 are hereby incorporated
by reference;
(10) Copy of Opinion and Consent of
Counsel as to legality of shares being
registered (2, 3.);
+ Exhibits have been filed electronically.
2.Response is incorporated by reference to Registrant's
Registration Pre-Effective Amendment No. 1 on Form N-1A filed
August 14, 1989 (File No. 3329838).
3.Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 1 on Form N-1A filed December 6, 1989
(File No. 33-29838).
7.Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 9 on Form N-1A filed September 23,
1993 (File No. 33-29838).
8.Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 11 filed September 29, 1994 (File No.
33-29838).
(11) Conformed copy of Consent of the
Independent Auditors; +
(12) Not applicable;
(13) Copy of Initial Capital
Understanding (2.);
(14) Not applicable;
(15)The responses described
in Item 24(b) are hereby
incorporated by
reference;
(16) Schedule for Computation of Fund
Performance Data (4.);
(17) Financial data schedules; +
(18) Conformed copy of Power of
Attorney.+
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_September 18,
1995__
Shares of Beneficial Interest
Municipal Cash Series 10,139
Prime Cash Series 145,018
Treasury Cash Series 11,148
Government Cash Series 8,033
Item 27. Indemnification: (1.)
+ Exhibits have been filed electronically.
2.Response is incorporated by reference to Registrant's
Registration Pre-Effective Amendment No. 1 on Form N-1A filed
August 14, 1989 (File No. 3329838).
3.Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 1 on Form N-1A filed December 6, 1989
(File No. 33-29838).
4.Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 3 on Form N-1A filed July 23, 1990
(File No. 33-29838).
7.Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 9 on Form N-1A filed September 23,
1993 (File No. 33-29838).
Item 28. Business and Other Connections
of Investment Adviser:
(a) For a description of the other business of
the investment adviser, see the section entitled
"Cash Series Trust, Inc., Information - Management
of Cash Trust Series, Inc." in Part A. The
affiliations with the Registrant of four of the
Trustees and one of the Officers of the investment
adviser are included in Part B of this Registration
Statement under "Cash Trust Series, Inc.,
Management - Officers and Directors." The
remaining Trustee of the investment adviser, his
position with the investment adviser, and, in
parentheses, his principal occupation is: Mark D.
Olson (Partner, Wilson, Halbrook & Bayard), 107
West Market Street, Georgetown, Delaware 19947.
The remaining Officers of the investment
adviser are: William D. Dawson, III, J. Thomas
Madden, Mark L. Mallon, Executive Vice Presidents;
Henry J. Gailliot, Senior Vice President-Economist;
Peter R. Anderson, Gary J. Madich, and J. Alan
Minteer, Senior Vice Presidents; Randall A. Bauer,
Jonathan C. Conley, Deborah A. Cunningham, Mark E.
Durbiano, Kathleen M. Foody-Malus, Thomas M.
Franks, Edward C. Gonzales, Jeff A. Kozemchak,
Marian R. Marinack, John W. McGonigle, Gregory M.
Melvin, Susan M. Nason, Mary Jo Ochson, Robert J.
Ostrowski, Charles A. Ritter, and Christopher H.
Wiles, Vice Presidents; Edward C. Gonzales,
Treasurer; and John W. McGonigle, Secretary. The
business address of each of the Officers of the
investment adviser is Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779. These
individuals are also officers of a majority of the
investment advisers to the Funds listed in Part B
of this Registration Statement under "The Funds."
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; Arrow Funds; Automated Government Money
Trust; BayFunds; The Biltmore Funds; The Biltmore
Municipal Funds; Blanchard Funds; Blanchard
Precious Metals, Inc.; Cash Trust Series II; DG
Investor Series; Edward D. Jones & Co. Daily
Passport Cash Trust; Federated ARMs Fund; Federated
Equity Funds; Federated Exchange Fund, Ltd.;
Federated GNMA Trust; Federated Government Trust;
Federated High Yield Trust; Federated Income
Securities Trust; Federated Income Trust; Federated
Index Trust; Federated Institutional Trust;
Federated Master Trust; Federated Municipal Trust;
Federated Short-Term Municipal Trust; Federated
Short-Term U.S. Government Trust; Federated Stock
Trust; Federated Tax-Free Trust; Federated Total
Return Series, Inc.; Federated U.S. Government Bond
Fund; Federated U.S. Government Securities Fund: 1-
3 Years; Federated U.S. Government Securities Fund:
3-5 Years;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; 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; Marshall Funds, Inc.; Money Market
Management, Inc.; Money Market Obligations Trust;
Money Market Trust; The Monitor Funds; Municipal
Securities Income Trust; Newpoint Funds; 111
Corcoran Funds; Peachtree Funds; The Planters
Funds; RIMCO Monument Funds; The Shawmut 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; The Virtus Funds; 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, Asst.
Secretary, and Asst.
Treasurer, Federated
Securities Corp.
Edward C. Gonzales Director, Executive Vice Executive Vice
Federated Investors Tower President, Federated, President
Pittsburgh, PA 15222-3779 Securities Corp.
John W. McGonigle Director, Federated Executive Vice
Federated Investors Tower Securities Corp. President and
Pittsburgh, PA 15222-3779 Secretary
John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark R. Gensheimer Executive Vice President of --
Federated Investors Tower Bank/Trust, Federated
Pittsburgh, PA 15222-3779 Securities Corp.
Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard W. Boyd Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp
Pittsburgh, PA 15222-3779
John B. Bohnet Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Byron F. Bowman Vice President, Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mary J. Combs Vice President, --
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Kevin J. Crenny Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Daniel T. Culbertson Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
G. Michael Cullen Vice President, --
Federated Investors Tower Federated Securites Corp.
Pittsburgh, PA 15222-3779
Laura M. Deger Vice President, --
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael D. Fitzherald Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Craig S. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Scott A. Hutton Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
H. Joeseph Kenedy Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William E. Kugler Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Steven A. La Versa Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Mihm Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael P. O'Brien Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert D. Oehlschlager Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert F. Phillips Vice President, --
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John C. Shelar, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jamie M. Teschner Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul A. Uhlman Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael P. Wolff Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Charlene H. Jennings Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
J. Timothy Radcliff Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Denis McAuley Treasurer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas R. Donahue Asstistant Secretary, --
Federated Investors Tower Assistant Treasurer,
Pittsburgh, PA 15222-3779 Federated Securities Corp.
Joseph M. Huber Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David M. Taylor Assistant Secretary, Treasurer
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(c) Not applicable.
Item 30. Location of Accounts and
Records:
All accounts and records required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and
Rules 31a-1 through 31a-3 promulgated thereunder are
maintained at one of the following locations:
Registrant Federated Investors
Tower
Pittsburgh, PA 15222-
3779
Federated Services Company Federated Investors
Tower
Transfer Agent, Dividend Pittsburgh, PA 15222-
3779
Disbursing Agent and
Portfolio Recordkeeper
Federated Administrative Federated Investors
Tower
Services Pittsburgh, PA 15222-
3779
Administrator
Federated Advisers Federated Investors
Tower
Investment Adviser Pittsburgh, PA 15222-
3779
State Street Bank and P.O. Box 8600
Trust Company Boston, Massachusetts
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 Directors 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,
CASH TRUST SERIES, INC., certifies that it meets all of the
requirements for effectiveness of this Amendent to its
Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this Amendment to
its Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of
Pittsburgh and Commonwealth of Pennsylvania, on the 27st
day of September, 1995.
CASH TRUST SERIES, INC.
BY: /s/ Charles Field
Charles Field, Assistant Secretary
Attorney in Fact for John F. Donahue
September 27, 1995
Pursuant to the requirements of the Securities Act of
1933, this Amendment to its Registration Statement has been
signed below by the following person in the capacity and on
the date indicated:
NAME TITLE DATE
By: /s/ Charles Field
Charles Field Attorney In Fact September 27, 1995
ASSISTANT SECRETARY For the Persons
Listed Below
NAME TITLE
John F. Donahue* Chairman and Trustee
(Chief Executive Officer)
Richard B. Fisher* President
J. Christopher Donahue* Executive Vice President
and Director
David M. Taylor* Treasurer
(Principal Financial and
Accounting Officer)
John T. Conroy, Jr.* Director
William J. Copeland* Director
James E. Dowd* Director
Lawrence D. Ellis, M.D.* Director
Edward L. Flaherty, Jr.* Director
Peter E. Madden* Director
Gregor F. Meyer* Director
Wesley W. Posvar* Director
Marjorie P. Smuts* Director
* By Power of Attorney
Exhibit 11 under Form N-1A
Exhibit 23 under Item 601/Reg.S/K
INDEPENDENT AUDITORS' CONSENT
To the Board of Trustees and Shareholders of
Cash Series Trust, Inc.:
We consent to the use in Post-Effective Amendment No. 13 to Registration
Statement (No 33-29838) of Cash Series Trust, Inc. (Comprising the following
portfolios; Municipal Cash Series, Treasury Cash Series, Government Cash
Series and Prime Cash Series) of our report dated July 14, 1995, appearing
in the Prospectuses, which is a part of such Registration Statement, and to
the reference to us under the heading "Financial Highlights" in such
Prospectuses.
/s/ Deloitte & Touche
Pittsburgh, Pennsylvania
September 21, 1995
--
Exhibit 2 under Form N-1A
Exhibit 3(b) under Item 609/Reg.S/K
CASH TRUST SERIES, INC.
BY-LAWS
ARTICLE I
MEETING OF SHAREHOLDERS
Section 1. ANNUAL MEETINGS. The Corporation is not
required to hold an annual meeting of Shareholders in any
year in which the election of Directors is not required to
be acted upon under the Investment Company Act of 1940. If
the Corporation is required to hold a meeting of
Shareholders to elect Directors, the meeting shall be
designated the annual meeting of Shareholders for that year.
If an annual meeting of Shareholders is held, it shall be
held at a date and time determined by the Board of Directors
within 120 days after the occurrence of the event requiring
the meeting. Any other business may be considered at the
meeting.
Section 2. SPECIAL MEETINGS. Special Meetings of
Shareholders of the Company or of a particular Series or
Class may be called by the Chairman, or by the Board of
Directors; and shall be called by the Secretary whenever
ordered by the Chairman, any Director, or as requested in
writing by shareholders entitled to cast at least 10% of the
voter shares entitled to be cast at the meetings. Such
request shall state the purpose of such meeting and the
matters proposed to be acted on thereat, and no other
business shall be transacted at any such special meeting.
The Secretary shall inform such Shareholders of the
reasonably estimated costs of preparing and mailing the
notice of the meeting, and upon payment to the Corporation
of such costs, the Secretary shall give not less than ten
nor more than 90 days' notice of the meeting. Unless
required by Shareholders entitled to cast a majority of all
the votes entitled to be cast at the meeting, a special
meeting need not be called to consider any matter which is
substantially the same as a matter voted on at by special
meeting of the Shareholders held during the preceding 12
months.
Section 3. PLACE OF MEETINGS. All meetings of the
Shareholders of the Corporation or a particular Series or
Class, shall be held at the office of the Corporation in
Pittsburgh, Pennsylvania, or at such other place within or
without the State of Maryland as may be fixed by the Board
of Directors.
Section 4. NOTICE. Not less than ten nor more than
ninety days before the date of every Annual or Special
Meeting of Shareholders the Secretary or an Assistant
Secretary shall give to each Shareholder of record of the
Corporation or of the relevant Series or Class written
notice of such meeting. Such notice shall be deemed to have
been given when mailed to the Shareholder at his address
appearing on the books of the Corporation, which shall be
maintained separately for the shares of each Series or
Class. It shall not be necessary to set forth the business
proposed to be transacted in the notice of any Annual
Meeting except that any proposal to amend the Charter of the
Corporation shall be set forth in such notice. Notice of a
Special Meeting shall state the purpose or purposes for
which it is called.
Section 5. QUORUM. The presence in person or by proxy
of holders of one-third of the shares of stock of the
Corporation entitled to vote without regard to class shall
constitute a quorum at any meeting of the shareholders,
except with respect to any matter which by law requires the
approval of one or more classes of stock, in which case the
presence in person or by proxy of the holders of one-third
of the shares of stock of each class entitled to vote on the
matter shall constitute a quorum.
In the absence of a quorum at any meeting, a majority
of those Shareholders present in person or by proxy may
adjourn the meeting from time to time to a date not later
than 120 days after the original record date without further
notice than by announcement to be given at the meeting until
a quorum, as above defined, shall be present. Any business
may be transacted at the adjourned meeting which might have
been transacted at the meeting originally called had the
same been held at the time so called.
Section 6. VOTING. At all meetings of Shareholders
each Shareholder shall be entitled to one vote or fraction
thereof for each Share or fraction thereof standing in his
name on the books of the Corporation on the date for the
determination of Shareholders entitled to vote at such
meeting.
Section 7. PROXIES. Any Shareholder entitled to vote
at any meeting of Shareholders may vote either in person or
by proxy, but no proxy which is dated more than eleven
months before the meeting named therein shall be accepted.
Every proxy shall be in writing and signed by the
Shareholder or his duly authorized attorney in fact and
dated, but need not be sealed, witnessed or acknowledged.
Section 8. INFORMAL ACTION BY SHAREHOLDERS. Any
action required or permitted to be taken at any meeting of
Shareholders may be taken without a meeting, if a consent in
writing, setting forth such action, is signed by all the
Shareholders entitled to vote on the subject matter thereof,
and such consent is filed with the records of the
Corporation.
ARTICLE II
BOARD OF DIRECTORS
Section 1. POWERS. The business and affairs of the
Corporation shall be managed under the direction of its
Board of Directors. All powers of the Corporation may be
exercised by or under the authority of the Board of
Directors except as conferred on or reserved to the
Shareholders by law, by the Charter or by these By-Laws.
Section 2. NUMBER, QUALIFICATIONS, MANNER OF ELECTION
AND TERM OF OFFICE. The number of Directors of the
Corporation can be changed from time to time to not less
than three or the number of Shareholders, whichever is less,
nor more than twenty. Directors need not be Shareholders.
The term of office of a Director shall not be affected by
any decrease in the number of Directors made by the Board
pursuant to the foregoing authorization. Each Director
shall hold office until the Annual Meeting next held after
he becomes a director and until the election and
qualification of his successor.
Section 3. PLACE OF MEETING. The Board of Directors
may hold its meetings at such place or places within or
without the State of Maryland as the Board or as the person
or persons requesting said meeting to be called may from
time to time determine.
Section 4. ANNUAL MEETINGS. The Board of Directors
shall meet annually for the election of Officers and any
other business.
Section 5. REGULAR MEETINGS. Regular meetings of the
Board of Directors shall be held at such intervals and on
such dates as the Board may from time to time designate,
provided that any Director who is absent when such
designation is made shall be given notice of the
designation.
Section 6. SPECIAL MEETINGS. Special meetings of the
Board of Directors may be held at such times and at such
places as may be designated at the call of such meeting.
Special meetings shall be called by the Secretary or
Assistant Secretary at the request of the Chairman or any
Director. If the Secretary when so requested refuses or
fails for more than twenty-four hours to call such meeting,
the Chairman or such Director may in the name of the
Secretary call such meeting by giving due notice in the
manner required when notice is given by the Secretary.
Section 7. NOTICE. The Secretary or Assistant
Secretary shall give, at least two days before the meeting,
notice of each meeting of the Board of Directors, whether
Annual, Regular or Special, to each member of the Board by
mail, telegram or telephone to his last known address. It
shall not be necessary to state the purpose or business to
be transacted in the notice of any meeting. Personal
attendance at any meeting by a Director other than to
protest the validity of said meeting shall constitute a
waiver of the foregoing requirement of notice. In addition,
notice of a meeting need not be given if a written waiver of
notice executed by such Director before or after the Meeting
is filed with the records of the meeting.
Section 8. CONDUCT OF MEETINGS AND BUSINESS. The
Board of Directors may adopt such rules and regulations for
the conduct of their meetings and the management of the
affairs of the Corporation as they may deem proper and not
inconsistent with applicable law, the Charter of the
Corporation or these By-Laws.
Section 9. QUORUM. One-third of the entire Board of
Directors but not less than two directors shall constitute a
quorum at any meeting of the Board of Directors. The action
of a majority of Directors present at any meeting at which a
quorum is present shall be the action of the Board of
Directors unless the concurrence of a greater proportion is
required for such action by statute, the Charter of the
Corporation, or these By-Laws. In the absence of a quorum
at any meeting a majority of Directors present may adjourn
the meeting from day to day or for such longer periods as
they may designate until a quorum shall be present. Notice
of any adjourned meeting need not be given other than by
announcement at the meeting.
Section 10. RESIGNATIONS. Any Director of the
Corporation may resign at any time by written notice to the
Chairman of the Board of Directors or to the Secretary of
the Corporation. The resignation of any Director shall take
effect at the time specified therein or, if no time is
specified, when received by the Corporation. Unless
otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
Section 11. REMOVAL. At any meeting of Shareholders
duly called for the purpose, any Director may by the vote of
a majority of all of the Shares entitled to vote be removed
from office. At the same meeting, the vacancy in the Board
of Directors may be filled by the election of a Director to
serve until the next annual meeting of Shareholders and the
election and qualification of his successor.
Section 12. VACANCIES. Except as otherwise provided
by law, any vacancy occurring in the Board of Directors for
any cause other than by reason of an increase in the number
of Directors may be filled by a majority of the remaining
members of the Board of Directors although such majority is
less than a quorum and any vacancy occurring by reason of an
increase in the number of Directors may be filled by action
of a majority of the entire Board of Directors. A Director
elected by the Board to fill a vacancy shall be elected to
hold office until the next Annual Meeting of Shareholders
and until his successor is duly elected and qualifies.
Section 13. COMPENSATION OF DIRECTORS. The Directors
may receive compensation for their services as Directors as
determined by the Board of Directors and expenses of
attendance at each Meeting. Nothing herein contained shall
be construed to preclude any Director from serving the
Corporation in any other capacity, as an Officer, Agent or
otherwise, and receiving compensation therefor.
Section 14. INFORMAL ACTION BY DIRECTORS. Any action
required or permitted to be taken at any Annual, Regular or
Special Meeting of the Board of Directors may be taken
without a meeting if a written consent to such action is
signed by all members of the Board and such written consent
is filed with the minutes of proceedings of the Board.
Section 15. TELEPHONE CONFERENCE. Members of the
Board of Directors or any committee thereof may participate
in a meeting of the Board or such committee by means of a
conference telephone or similar communications equipment by
means of which all persons participating in the meeting can
hear each other at the same time and participation by such
means shall constitute presence in person at the meeting.
ARTICLE III
EXECUTIVE AND OTHER COMMITTEES
Section 1. APPOINTMENT AND TERM OF OFFICE OF EXECUTIVE
COMMITTEE. The Board of Directors may appoint an Executive
Committee, which shall consist of two (2) or more Directors.
Section 2. VACANCIES IN EXECUTIVE COMMITTEE.
Vacancies occurring in the Executive Committee from any
cause may be filled by the Board of Directors.
Section 3. EXECUTIVE COMMITTEE TO REPORT TO BOARD.
All action by the Executive Committee shall be reported to
the Board of Directors at its Meeting next succeeding such
action.
Section 4. PROCEDURE OF EXECUTIVE COMMITTEE. The
Executive Committee shall fix its own rules of procedure not
inconsistent with these By-Laws or with any directions of
the Board of Directors. It shall meet at such times and
places and upon such notice as shall be provided by such
rules or by resolution of the Board of Directors. The
presence of a majority shall constitute a quorum for the
transaction of business, and in every case the affirmative
vote of a majority of the members of the Committee present
shall be necessary for the taking of any action.
Section 5. POWERS OF EXECUTIVE COMMITTEE. During the
intervals between the Meetings of the Board of Directors the
Executive Committee, except as limited by law or by specific
directions of the Board of Directors, shall possess and may
exercise all the powers of the Board of Directors in the
management and direction of the business and conduct of the
affairs of the Corporation.
Section 6. OTHER COMMITTEES. From time to time the
Board of Directors may appoint any other Committee or
Committees which shall have such powers as shall be
specified in the resolution of appointment and may be
delegated by law.
Section 7. COMPENSATION. The members of any duly
appointed Committee shall receive such compensation as from
time to time may be fixed by the Board of Directors and
reimbursement of expenses.
Section 8. INFORMAL ACTION BY EXECUTIVE COMMITTEE OR
OTHER COMMITTEES. Any action required or permitted to be
taken at any meeting of the Executive Committee or any other
duly appointed Committee may be taken without a meeting if
written consent to such action is signed by all Members of
such Committee and such written consent is filed with the
minutes of the proceedings of such Committee.
Section 9. ADVISORY BOARD. The Directors may appoint
an Advisory Board to consist in the first instance of not
less than three (3) members. Members of such Advisory Board
shall not be Directors or Officers and need not be
Shareholders. Members of this Board shall hold office for
such period as the Directors may by resolution provide. Any
Member of such Board may resign therefrom by written
instrument signed by him which shall take effect upon
delivery to the Directors. The Advisory Board shall have no
legal powers and shall not perform functions of Directors in
any manner, said Board being intended to act merely in an
advisory capacity. Such Advisory Board shall meet at such
times and upon such notice as the Board of Directors may by
resolution provide. The compensation of the Members of the
Advisory Board, if any, shall be determined by the Board of
Directors.
ARTICLE IV
OFFICERS
Section 1. GENERAL PROVISIONS. The Officers of the
Corporation shall be a Chairman, a President, one or more
Vice Presidents, a Treasurer, and a Secretary. The Board of
Directors may elect or appoint other Officers or agents,
including one or more Assistant Vice Presidents, one or more
Assistant Secretaries and one or more Assistant Treasurers.
The same person may hold any two offices except those of
President and Vice President.
Section 2. ELECTION, TERM OF OFFICE AND
QUALIFICATIONS. The Officers shall be elected annually by
the Board of Directors at its Annual Meeting. Each Officer
shall hold office for one year and until the election and
qualification of his successor. Any vacancy in any of the
offices may be filled for the unexpired portion of the term
by the Board of Directors at any Regular or Special Meeting
of the Board. The Board of Directors may elect or appoint
additional Officers or agents at any Regular or Special
Meeting of the Board.
Section 3. REMOVAL. Any Officer elected by the Board
of Directors may be removed with or without cause at any
time by the Board of Directors. Any other employee of the
Corporation may be removed or dismissed at any time by the
President.
Section 4. RESIGNATIONS. Any Officer may resign at
any time by giving written notice to the Board of Directors.
Any such resignation shall take effect at the time specified
therein or, if no time is specified, at the time of receipt.
Unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
Section 5. VACANCIES. A vacancy in any Office because
of death, resignation, removal, disqualification or any
other cause shall be filled for the unexpired portion of the
term in the manner prescribed in these By-Laws for regular
election or appointment to such Office.
Section 6. CHAIRMAN OF THE BOARD OF DIRECTORS. The
Chairman of the Board of Directors, if there be a Chairman,
shall preside at the meetings of Shareholders and of the
Board of Directors. He shall receive such information and
reports as he may request from the Officers of the
Corporation. He shall counsel and advise the President on
matters of major importance.
Section 7. PRESIDENT. The Chairman for Cash Trust
Series, Inc. shall be the chief executive officer of the
Corporation. He shall, unless other provisions are made
therefor by the Board or Executive Committee, employ and
define the duties of all employees of the Corporation, shall
have the power to discharge any such employees, shall
exercise general supervision over the affairs of the
Corporation and shall perform such other duties as may be
assigned to him from time to time by the Board of Directors.
In the absence of the Chairman of the Board of Directors,
the President or an officer or Director appointed by the
President, shall preside at all meetings of Shareholders.
Section 8. VICE PRESIDENT. The Vice President (or if
more than one, the senior Vice President) in the absence of
the President shall perform all duties and may exercise any
of the powers of the President subject to the control of the
Board. Each Vice President shall perform such other duties
as may be assigned to him from time to time by the Board of
Directors, the Executive Committee, or the President.
Section 9. SECRETARY. The Secretary shall keep or
cause to be kept in books provided for the purpose the
Minutes of the Meetings of the Shareholders, and of the
Board of Directors; shall see that all Notices are duly
given in accordance with the provisions of these By-Laws and
as required by Law; shall be custodian of the records and of
the Seal of the Corporation and see that the Seal is affixed
to all documents the execution of which on behalf of the
Corporation under its seal is duly authorized; shall keep
directly or through a transfer agent a register of the post
office address of each Shareholder, and make all proper
changes in such register, retaining and filing his authority
for such entries; shall see that the books, reports,
statements, certificates and all other documents and records
required by law are properly kept and filed; and in general
shall perform all duties incident to the Office of Secretary
and such other duties as may, from time to time, be assigned
to him by the Board of Directors, the Executive Committee,
or the President.
Section 10. TREASURER. The Treasurer shall have
supervision of the custody of all funds and securities of
the Corporation, subject to applicable law. He shall
perform such other duties as may be from time to time
assigned to him by the Board of Directors, the Executive
Committee, or the President.
Section 11. ASSISTANT VICE PRESIDENT. The Assistant
Vice President or Vice Presidents of the Corporation shall
have such authority and perform such duties as may be
assigned to them by the Board of Directors, the Executive
Committee, or the President of the Corporation.
Section 12. ASSISTANT SECRETARIES AND ASSISTANT
TREASURERS. The Assistant Secretary or Secretaries and the
Assistant Treasurer or Treasurers shall perform the duties
of the Secretary and of the Treasurer respectively, in the
absence of those Officers and shall have such further powers
and perform such other duties as may be assigned to them
respectively by the Board of Directors or the Executive
Committee or by the President.
Section 13. SALARIES. The salaries of the Officers
shall be fixed from time to time by the Board of Directors.
No Officer shall be prevented from receiving such salary by
reason of the fact that he is also a Director of the
Corporation.
ARTICLE V
SHARES AND THEIR TRANSFER
Section 1. CERTIFICATES. All share certificates shall
be signed by the Chairman, the President, or any Vice
President and by the Treasurer or Secretary or any Assistant
Treasurer or Assistant Secretary and may be sealed with the
seal of the Corporation. The signatures may be either
manual or facsimile signatures and the seal may be either
facsimile or any other form of Seal. Certificates for
shares for which the Corporation has appointed an
independent Transfer Agent and Registrar shall not be valid
unless countersigned by such Transfer Agent and registered
by such Registrar. In case any Officer who has signed any
certificate ceases to be an Officer of the Corporation
before the certificate is issued, the certificate may
nevertheless be issued by the Corporation with the same
effect as if the Officer had not ceased to be such Officer
as of the date of its issuance. Share certificates shall be
in such form not inconsistent with law and these By-Laws as
may be determined by the Board of Directors.
Section 2. TRANSFER OF SHARES. Shares of each Series
and Class shall be transferable on the books of the
Corporation by the holder thereof in person or by duly
authorized attorney upon surrender of the certificate
representing the shares to be transferred properly endorsed.
Section 3. CLOSING OF TRANSFER BOOKS AND FIXING RECORD
DATE. The Board of Directors may fix in advance a date as
the record date for the purpose of determining Shareholders
of a Series or Class entitled to notice of or to vote at any
Meeting of Shareholders or Shareholders to receive payment
of any dividend. Such date shall in any case not be more
than 90 days and in case of a Meeting of Shareholders not
less than l0 days prior to the date on which the particular
action requiring such determination of Shareholders is to be
taken. Only Shareholders of record on the record date shall
be entitled to notice of and to vote at such meeting or to
receive such dividends or rights, as the case may be. In
lieu of fixing a record date the Board of Directors may
provide that the share transfer books of the Corporation
shall be closed for a stated period not to exceed in any
case 20 days. If the share transfer books are closed for
the purpose of determining Shareholders entitled to notice
of or to vote at a Meeting of Shareholders such books shall
be closed for at least l0 days immediately preceding such
meeting.
Section 4. LOST, DESTROYED OR MUTILATED CERTIFICATES.
In case any Share certificate is lost, mutilated or
destroyed the Board of Directors may issue a new certificate
in place thereof upon indemnity to the relevant Series or
Class against loss and upon such other terms and conditions
as the Board may deem advisable.
Section 5. TRANSFER AGENT AND REGISTRAR: REGULATIONS.
The Board of Directors shall have power and authority to
make all such rules and regulations as they may deem
expedient concerning the issuance, transfer and registration
of Share certificates and may appoint a Transfer Agent
and/or Registrar of Share certificates of each Series or
Class, and may require all such Share certificates to bear
the signature of such Transfer Agent and/or of such
Registrar.
ARTICLE VI
AGREEMENTS, CHECKS, DRAFTS, ENDORSEMENTS, ETC.
Section 1. AGREEMENTS, ETC. The Board of Directors or
the Executive Committee may authorize any Officer or
Officers, or Agent or Agents of the Corporation to enter
into any Agreement or execute and deliver any instrument in
the name of the Corporation and such authority may be
general or confined to specific instances; and, unless so
authorized by the Board of Directors or by the Executive
Committee or by these By-Laws, no Officer, Agent or Employee
shall have any power or authority to bind the Corporation by
any Agreement or engagement or to pledge its credit or to
render it liable pecuniarily for any purpose or to any
amount.
Section 2. CHECKS, DRAFTS, ETC. All checks, drafts,
or orders for the payment of money, notes and other
evidences of indebtedness shall be signed by such Officer or
Officers, Employee or Employees, or Agent or Agents as shall
be from time to time designated by the Board of Directors or
the Executive Committee, or as may be specified in or
pursuant to the agreement between the Corporation on behalf
of any Series or Class and the Bank or Trust Company
appointed as custodian.
Section 3. ENDORSEMENTS, ASSIGNMENTS AND TRANSFER OF
SECURITIES. All endorsements, assignments, stock powers or
other instruments of transfer of securities standing in the
name of the Corporation or its nominee or directions for the
transfer of securities belonging to the Corporation shall be
made by such Officer or Officers, Employee or Employees, or
Agent or Agents as may be authorized by the Board of
Directors or the Executive Committee.
ARTICLE VII
BOOKS AND RECORDS
Section 1. LOCATION. The books and records of the
Corporation, including the Stock ledger or ledgers, may be
kept in or outside the State of Maryland at such office or
agency of the Corporation as may be from time to time
determined by the Board of Directors.
ARTICLE VIII
MISCELLANEOUS
Section 1. SEAL. The Seal of the Corporation shall
consist of a flat-faced die with the word "Maryland,"
together with the name of the Corporation and the year of
its organization cut or engraved thereon, but unless
otherwise required by the Directors, the Seal shall not be
necessary to be placed on, and its absence shall not impair
the validity of, any document, instrument or other paper
executed and delivered by or on behalf of the Corporation.
Section 2. FISCAL YEAR. The Fiscal Year of the
Corporation shall be designated from time to time by the
Board of Directors.
ARTICLE IX
INDEMNIFICATION
Section 1. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Corporation shall indemnify its directors to the fullest
extent that indemnification of directors is permitted by the
Maryland General Corporation Law. The Corporation shall
indemnify its officers to the same extent as its directors
and to such further extent as is consistent with law. The
Corporation shall indemnify its directors and officers who
while serving as directors or officers also serve at the
request of the Corporation as a director, officer, partner,
trustee, employee, agent or fiduciary of another
corporation, partnership joint venture, trust, other
enterprise or employee benefit plan to the fullest extent
consistent with law. The indemnification and other rights
provided by this Article shall continue as to a person who
has ceased to be a director of officer and shall inure to
the benefit of the heirs, executors and administrators of
such a person. This Article shall not protect any such
person against any liability to the Corporation or any
Shareholder thereof to which such person would otherwise be
subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in
the conduct of his office ("disabling conduct").
Section 2. ADVANCES. Any current or former director
or officer of the Corporation seeking indemnification within
the scope of this Article shall be entitled to advances from
the Corporation for payment of the reasonable expenses
incurred by him in connection with the matter as to which he
is seeking indemnification in the manner and to fullest
extent permissible under the Maryland General Corporation
Law. The person seeking indemnification shall provide to
the Corporation a written affirmation of his good faith
belief that the standard of conduct necessary for
indemnification by the Corporation has been met and a
written undertaking to repay any such advance if it should
ultimately be determined that the standard of conduct has
not been met. In addition, at least one of the following
additional conditions shall be met: (a) the person seeking
indemnification shall provide a security in form and amount
acceptable to the Corporation for his undertaking; (b) the
Corporation is insured against losses arising by reason of
the advance, or (c) a majority of a quorum of directors of
the Corporation who are neither 'interested persons' as
defined in Section 2(a)(19) of the Investment Company Act of
1940, as amended, nor parties to the proceeding
("disinterested non-party directors"), or independent legal
counsel, in a written opinion, shall be determined, based on
a review of facts readily available to the Corporation at
the time the advance is proposed to be made, that there is
reason to believe that the person seeking indemnification
will ultimately be found to be entitled to indemnification.
Section 3. PROCEDURE. At the request of any person
claiming indemnification under this Article, the Board of
Directors shall determine, or cause to be determined, in a
manner consistent with the Maryland General Corporation Law,
whether the standards required by this Article have been
met. Indemnification shall be made only following: (a) a
final decision on the merits by a court or other body before
whom the proceeding was brought that the person to be
indemnified was not liable by reason of disabling conduct or
(b) in the absence of such a decision, a reasonable
determination, based upon a review of the facts, that the
person to be indemnified was not liable by reason of
disabling conduct by (i) the vote of a majority of a quorum
of disinterested non-party directors or (ii) an independent
legal counsel in a written opinion.
Section 4. INDEMNIFICATION OF EMPLOYEES AND AGENTS.
Employees and agents who are not officers or directors of
the Corporation may be indemnified, and reasonable expenses
may be advanced to such employees or agents, as may be
provided by action of the Board of Directors or by contract,
subject to any limitations imposed by the Investment Company
Act of 1940.
Section 5. OTHER RIGHTS. The Board of Directors may
make further provisions consistent with law for
indemnification and advance of expenses to directors,
officers, employees and agents by resolution, agreement or
otherwise. The indemnification provided by this Article IX
shall not be deemed exclusive of any other right, with
respect to indemnification or otherwise, to which those
seeking indemnification may be entitled under any insurance
or other agreement or resolution of Shareholders or
disinterested directors or otherwise.
Section 6. AMENDMENTS. References in this Article are
to the Maryland General Corporation Law and to the
Investment Company Act of 1940, as from time to time
amended. No amendment of these By-Laws shall affect any
right of any person under this Article based on any event,
omission or proceeding prior to the amendment.
ARTICLE X
AMENDMENTS
Section 1. The Board of Directors shall have the power
to alter, amend or repeal any By-Laws of the Corporation and
to make new By-Laws.
--
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, 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 (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 may desire 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") if so indicated on
Exhibit 1, and the Company is willing to furnish such
services; and
WHEREAS, the Trust may desire to appoint the Company as
its transfer agent, dividend disbursing agent if so
indicated on Exhibit 1, and agent in connection with certain
other activities, and the Company desires to accept such
appointment; and
WHEREAS, the Trust may desire to appoint the Company as
its agent to select, negotiate and subcontract for custodian
services from an approved list of qualified banks if so
indicated on Exhibit 1, 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's 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 using: primarily, market
quotations, including the use of matrix pricing,
supplied by the independent pricing services selected
by the Company in consultation with the adviser, or
sources selected by the adviser, and reviewed by the
board; secondarily, if a designated pricing service
does not provide a price for a security which the
Company believes should be available by market
quotation, the Company may obtain a price by calling
brokers designated by the investment adviser of the
fund holding the security, or if the adviser does not
supply the names of such brokers, the Company will
attempt on its own to find brokers to price those
securities; thirdly, for securities for which no
market price is available, the Pricing Committee of
the Board will determine a fair value in good faith.
Consistent with Rule 2a-4 of the 40 Act, estimates may
be used where necessary or appropriate. The Company's
obligations with regard to the prices received from
outside pricing services and designated brokers or
other outside sources, is to exercise reasonable care
in the supervision of the pricing agent. The Company
is not the guarantor of the securities prices received
from such agents and the Company is not liable to the
Fund for potential errors in valuing a Fund's assets
or calculating the net asset value per share of such
Fund or Class when the calculations are based upon
such prices. All of the above sources of prices used
as described are deemed by the Company to be
authorized sources of security prices. The Company
provides daily to the adviser the securities prices
used in calculating the net asset value of the fund,
for its use in preparing exception reports for those
prices on which the adviser has comment. Further,
upon receipt of the exception reports generated by the
adviser, the Company diligently pursues communication
regarding exception reports with the designated
pricing agents.
B. 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;
C. Calculate the net income of each of the Funds, if any;
D. Calculate capital gains or losses of each of the Funds
resulting from sale or disposition of assets, if any;
E. 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;
F. 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;
G. At the request of the Trust, prepare various reports
or other financial documents required by federal,
state and other applicable laws and regulations; and
H. 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 agreed upon from time to time
between the parties hereto. 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 agreed
upon between the parties from time to time.
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 compensation and out-of-pocket expenses shall be
accrued by the Fund and shall be paid to the Company
no less frequently than monthly, and shall be paid
daily upon request of the Company. The Company will
maintain detailed information about the compensation
and out-of-pocket expenses by Fund and Class.
D. Any schedule of compensation agreed to hereunder, as
may be adjusted from time to time, shall be 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 conformable 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 agreed upon between the parties
and as may be added to 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 same fees 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 agreed upon between the parties,
as may be added to 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 compensation and out-of-pocket expenses shall be
accrued by the Fund and shall be paid to the Company
no less frequently than monthly, and shall be paid
daily upon request of the Company. The Company will
maintain detailed information about the compensation
and out-of-pocket expenses by Fund and Class.
D. Any schedule of compensation agreed to hereunder, as
may be adjusted from time to time, shall be dated and
signed by a duly authorized officer of the Trust
and/or the Funds and a duly authorized officer of the
Company.
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.
A. This Agreement shall inure to the benefit of and be
binding upon the parties and their respective
permitted successors and assigns.
B. 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
C. 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:
A. evaluate the nature and the quality of the custodial
services provided by the Eligible Custodian;
B. 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;
C. 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;
D. establish procedures to monitor the nature and the
quality of the services provided by the Custodians;
E. continuously monitor the nature and the quality of
services provided by the Custodians; and
F. 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 agreed upon
between the parties.
B. Reimbursements
In addition to the fee paid under Section 11A 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 agreed upon between the parties,
as may be added to 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 compensation and out-of-pocket expenses shall be
accrued by the Fund and shall be paid to the Company
no less frequently than monthly, and shall be paid
daily upon request of the Company. The Company will
maintain detailed information about the compensation
and out-of-pocket expenses by Fund.
D. Any schedule of compensation agreed to hereunder, as
may be adjusted from time to time, shall be dated and
signed by a duly authorized officer of the Trust
and/or the Funds and a duly authorized officer of the
Company.
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. Standard of Care and Indemnification.
A. Standard of Care
The Company shall be held to a standard of reasonable
care in carrying out the provisions of this Contract.
The Company 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.
B. 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, Adviser,
Sub-adviser or other party contracted by or
approved by the Trust or Fund,
(2) 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;
(b) are received by the Company from independent
pricing services or sources for use in
valuing the assets of the Funds; or
(c) are received by the Company or its agents or
subcontractors from Advisers, Sub-advisers
or other third parties contracted by or
approved by the Trust of Fund for use in the
performance of services under this
Agreement;
(d) have been prepared and/or maintained by the
Fund or its affiliates or any other person
or firm on behalf of the Trust.
(3) The reliance on, or the carrying out by the
Company or its agents or subcontractors of Proper
Instructions of the Trust or the Fund.
(4) 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,
negligence or reckless disregard of its duties of
failure to meet the standard of care set forth in
15.A. above.
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
Cash Trust Series, Inc.
Exhibit 8 under Form N-1A
Exhibit 10A 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 It 1
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
2.17 Communications Relating to Fund Portfolio Securities 13
2.18 Proper Instructions 14
2.19 Actions Permitted Without Express Authority 14
2.20 Evidence of Authority 15
2.21 Notice to Trust by Custodian Regarding Cash Movement.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/Auditors17
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 and
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 Funds
Held by the Custodian
2.1Holding Securities. The Custodian shall hold and physically
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 and
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 Securities
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 securities
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 of 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 securities,
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
portfolio 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
borrowings 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 agent
("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
Custodian (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
arrangements 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.
2.7Collection 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 whenever
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 Instructions,
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 surrender of
securities owned by a Fund as set forth in Section 2.2
hereof;
(3)For the redemption or repurchase of Shares of a Fund
issued by the Trust as set forth in Section 2.10 hereof;
(4)For the payment of any expense or liability incurred 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 Fund
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 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 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 Securities
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.
2.10 Payments 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.
2.11 Appointment 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.
2.12 Deposit of Fund Assets in Securities System. The
Custodian 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.
2.13 Segregated 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.
2.14 Joint Repurchase Agreements. Upon the receipt of Proper
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.
2.15 Ownership Certificates for Tax Purposes. The Custodian
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.
2.16 Proxies. The Custodian shall, with respect to the
securities 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.
2.17 Communications 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.
2.18 Proper Instructions. Proper Instructions as used
throughout 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.
2.19 Actions Permitted Without Express Authority. The
Custodian may in its discretion, without express authority
from the Trust:
(1)make payments to itself or others for minor expenses 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 securities in
definitive form;
(3)endorse for collection, in the name of a Fund, checks,
drafts and other negotiable instruments; and
(4)in general, attend to all non-discretionary details 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.
2.20 Evidence of Authority. The Custodian shall be protected
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.
2.21 Notice 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 and
Calculation of Net Asset Value and Net Income.
The Custodian shall cooperate with and supply necessary
information 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
/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 COMPANY
/s/ Jeannette Fisher-Garber______ By /s/ James J. Dolan____________
Jeannette Fisher-Garber James J. Dolan
Secretary President
EXHIBIT 1
<TABLE>
<S> <C>
CONTRACT
DATE INVESTMENT COMPANY
12/01/94 Cash Trust Series, Inc.
</TABLE>
Exhibit 18 under Form N-1A
Exhibit 24 under Item 601/Reg. S-K
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes
and appoints the Secretary and Assistant Secretary of CASH TRUST
SERIES, INC. and the Deputy General Counsel of Federated
Investors, and each of them, their true and lawful attorneys-in-
fact and agents, with full power of substitution and
resubstitution for them and in their names, place and stead, in
any and all capacities, to sign any and all documents to be filed
with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, by means of the Securities
and Exchange Commission's electronic disclosure system known as
EDGAR; and to file the same, with all exhibits thereto and other
documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to sign and
perform each and every act and thing requisite and necessary to
be done in connection therewith, as fully to all intents and
purposes as each of them might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue
thereof.
SIGNATURES TITLE DATE
/s/ John F. Donahue Chairman September 11, 1995
John F. Donahue (Chief Executive Officer)
/s/ Richard B. Fisher President September 11, 1995
Richard B. Fisher
/s/ J. Christopher Donahue Executive Vice PresidentSeptember 11, 1995
J. Christopher Donahue and Director
/s/ David M. Taylor Treasurer September 11, 1995
David M. Taylor (Principal Financial and
Accounting Officer)
/s/ Thomas G. Bigley Director September 11, 1995
Thomas G. Bigley
/s/ John T. Conroy, Jr. Director September 11, 1995
John T. Conroy, Jr.
SIGNATURES TITLE DATE
/s/ William J. Copeland Driector September 11, 1995
William J. Copeland
/s/ James E. Dowd Director September 11, 1995
James E. Dowd
/s/ Lawrence D. Ellis, M.D. Director September 11, 1995
Lawrence D. Ellis, M.D.
/s/ Edward L. Flaherty, Jr. Director September 11, 1995
Edward L. Flaherty, Jr.
/s/ Peter E. Madden Director September 11, 1995
Peter E. Madden
/s/ Gregor F. Meyer Director September 11, 1995
Gregor F. Meyer
/s/ John E. Murray, Jr. Director September 11, 1995
John E. Murray, Jr.
/s/ Wesley NW. Posvar Director September 11, 1995
Wesley W. Posvar
/s/ Marjorie P. Smuts Director September 11, 1995
Marjorie P. Smuts
Sworn to and subscribed before me this 11th day of September,
1995
Marie M. Hamm
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> Cash Trust Series
Government Cash Series
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> May-31-1995
<PERIOD-END> May-31-1995
<INVESTMENTS-AT-COST> 466,457,561
<INVESTMENTS-AT-VALUE> 466,457,561
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<OVERDISTRIBUTION-GAINS> 0
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<NET-ASSETS> 453,095,757
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 21,804,067
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<NET-INVESTMENT-INCOME> 17,758,338
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<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,457,947,749
<NUMBER-OF-SHARES-REDEEMED> 3,419,213,014
<SHARES-REINVESTED> 13,027,588
<NET-CHANGE-IN-ASSETS> 51,762,053
<ACCUMULATED-NII-PRIOR> 0
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<OVERDISTRIB-NII-PRIOR> 0
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,357,706
<AVERAGE-NET-ASSETS> 408,278,448
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.040
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</TABLE>
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> Cash Trust Series, Inc.
Municipal Cash Series
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> May-31-1995
<PERIOD-END> May-31-1995
<INVESTMENTS-AT-COST> 441,236,314
<INVESTMENTS-AT-VALUE> 441,236,314
<RECEIVABLES> 7,840,966
<ASSETS-OTHER> 2,527,405
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 451,604,685
<PAYABLE-FOR-SECURITIES> 5,500,000
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<OTHER-ITEMS-LIABILITIES> 940,885
<TOTAL-LIABILITIES> 6,440,885
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<PAID-IN-CAPITAL-COMMON> 445,163,800
<SHARES-COMMON-STOCK> 445,163,800
<SHARES-COMMON-PRIOR> 574,801,275
<ACCUMULATED-NII-CURRENT> 0
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<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 445,163,800
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 19,662,320
<OTHER-INCOME> 0
<EXPENSES-NET> 5,190,792
<NET-INVESTMENT-INCOME> 14,471,528
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 14,471,528
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 14,471,528
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,187,590,706
<NUMBER-OF-SHARES-REDEEMED> 2,329,820,910
<SHARES-REINVESTED> 12,592,729
<NET-CHANGE-IN-ASSETS> (129,637,475)
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<GROSS-EXPENSE> 5,454,936
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<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.030
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<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 99
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 3
<NAME> Cash Trust Series
Prime Cash Series
<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> May-31-1995
<PERIOD-END> May-31-1995
<INVESTMENTS-AT-COST> 1,028,861,427
<INVESTMENTS-AT-VALUE> 1,028,861,427
<RECEIVABLES> 1,943,921
<ASSETS-OTHER> 1,543,033
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,032,348,381
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5,265,103
<TOTAL-LIABILITIES> 5,265,103
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,027,083,278
<SHARES-COMMON-STOCK> 1,027,083,278
<SHARES-COMMON-PRIOR> 791,147,071
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,027,083,278
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 49,216,813
<OTHER-INCOME> 0
<EXPENSES-NET> 8,730,373
<NET-INVESTMENT-INCOME> 40,486,440
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 40,486,440
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 40,486,440
<DISTRIBUTIONS-OF-GAINS> 0
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<NUMBER-OF-SHARES-SOLD> 4,556,300,176
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<OVERDISTRIB-NII-PRIOR> 0
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<GROSS-EXPENSE> 10,533,745
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<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.050
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<EXPENSE-RATIO> 99
<AVG-DEBT-OUTSTANDING> 0
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</TABLE>
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 4
<NAME> Cash Trust Series
Treasury Cash Series
<PERIOD-TYPE> 12-mos
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<PERIOD-END> May-31-1995
<INVESTMENTS-AT-COST> 427,112,551
<INVESTMENTS-AT-VALUE> 427,112,551
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<SHARES-COMMON-PRIOR> 427,005,384
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<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
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<NET-INVESTMENT-INCOME> 18,450,054
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<DISTRIBUTIONS-OF-GAINS> 0
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</TABLE>
