1933 Act File No. 33-31259
1940 Act File No. 811-5911
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. 43 ........... X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 43 .......................... X
FEDERATED MUNICIPAL TRUST
(Exact Name of Registrant as Specified in Charter)
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
John W. McGonigle, Esquire,
Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
--
X on December 29, 1996 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:
filed the Notice required by that Rule on ; or
X intends to file the Notice required by that Rule on or about December
13, 1996; 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:
Matthew G. Maloney, Esquire
Dickstein Shapiro Morin & Oshinsky LLP
2101 L Street, N.W.
Washington, D.C. 20037
CROSS-REFERENCE SHEET
This Amendment to the Registration Statement of FEDERATED MUNICIPAL
TRUST, which consists of sixteen portfolios: (1) Connecticut Municipal
Cash Trust, (a) Institutional Service Shares; (2) Pennsylvania Municipal
Cash Trust, (a) Cash Series Shares and (b) Institutional Service Shares;
(c) Institutional Shares (3) Minnesota Municipal Cash Trust, (a) Cash
Series Shares and (b) Institutional Shares; (4) New Jersey Municipal Cash
Trust, (a) Institutional Shares and (b) Institutional Service Shares; (5)
Ohio Municipal Cash Trust, (a) Cash II Shares (b) Institutional Shares, and
(c) Institutional Service Shares; (6) Virginia Municipal Cash Trust, (a)
Institutional Shares and (b) Institutional Service Shares; (7) Alabama
Municipal Cash Trust; (8) North Carolina Municipal Cash Trust; (9) Maryland
Municipal Cash Trust; (10) California Municipal Cash Trust, (a)
Institutional Shares and (b) Institutional Service Shares; (11) New York
Municipal Cash Trust, (a) Cash II Shares and (b) Institutional Service
Shares; (12) Florida Municipal Cash Trust, (a) Institutional Shares and (b)
Cash II Shares; (13) Massachusetts Municipal Cash Trust, (a) Institutional
Service Shares and (b) 1784 Fund Shares; (14) Michigan Municipal Cash
Trust, (a) Institutional Shares and (b) Institutional Service Shares; (15)
Georgia Municipal Cash; and (16) Tennessee Municipal Cash Trust, (a)
Institutional Shares and (b) Institutional Service Shares, relates only to
(16) Tennessee Municipal Cash Trust and is comprised of the following:
PART A. INFORMATION REQUIRED IN A PROSPECTUS.
Prospectus Heading
(Rule 404(c) Cross Reference)
Item 1. Cover Page...............(1-16) Cover Page.
Item 2. Synopsis.................(1-16) Summary of Fund Expenses.
Item 3. Condensed Financial
Information..............(1-16) Financial Highlights; (1-16)
Performance Information.
Item 4. General Description of
Registrant...............(1-16) General Information; (1-13a, 14-
16) Investment Information; (1-13a, 14-
16) Investment Objective; (13b)
Investment Objective and Policies; (1-
13a, 14-16) Investment Policies; (13b)
Acceptable Investments; (1) Connecticut
Municipal Securities; (2) Pennsylvania
Municipal Securities; (3) Minnesota
Municipal Securities; (4) New Jersey
Municipal Securities; (5) Ohio Municipal
Securities; (6) Virginia Municipal
Securities; (7) Alabama Municipal
Securities; (8) North Carolina Municipal
Securities; (9) Maryland Municipal
Securities; (10) California Municipal
Securities; (11) New York Municipal
Securities; (12) Florida Municipal
Securities; (13) Massachusetts Municipal
Securities; (14) Michigan Municipal
Securities; (15) Georgia Municipal
Securities; (16) Tennessee Municipal
Securities; (1-16) Investment Risks; (1-
16) Investment Limitations; (16) Special
Information Concerning Hub and Spoke;
(1-16) Non-Diversification; (2-6, 10-14,
16) Other Classes of Shares.
Item 5. Management of the Fund...(1-16) Fund Information; (1-16)
Management of the Fund; (13b)
Management, Distribution, and
Administration; (1-13a, 14-16)
Distribution of Cash Series,
Institutional, Institutional Service, or
Cash II Shares; (1-16) Administration
of the Fund; (5b,10a,16) Expenses of the
Fund and Institutional Shares or
Institutional Shares.
Item 6. Capital Stock and Other
Securities...............(1-13a,14-16) Account and Share
Information; (13b) Dividends and
Distributions; (1-13a, 14-16)Dividends;
(1-13a, 14-16)Capital Gains; (1-13a, 14-
16) Voting Rights;(1-16) Tax
Information; (1-16) Federal Income Tax;
(1-16) State and Local Taxes.
Item 7. Purchase of Securities Being
Offered..................(1-16) Net Asset Value; (13b) Pricing of
Shares; (13b) How to Buy Shares; (1-13a,
14-16) How to Purchase Shares; (1, 2a,
2b, 3a, 4b, 5a, 6b, 7-9, 10b, 11, 12,
13a, 14b, 15, 16b) Special Purchase
Features; (13b) Automatic Investment
Program; (13b) How to Exchange Shares.
Item 8. Redemption or Repurchase.(1-16) How to Redeem Shares; (1a, 2a,
2b, 3a, 4b, 5a, 6b, 7-9, 10b, 11, 12,
13a, 14b, 15, 16b) Special Redemption
Features.
Item 9. Pending Legal Proceedings None.
PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION.
Item 10. Cover Page...............(1-16) Cover Page.
Item 11. Table of Contents........(1-16) Table of Contents.
Item 12. General Information and
History..................(1-16) About Federated Investors; (1-16)
Appendix.
Item 13. Investment Objectives and
Policies................. (2, 3, 5-11, 13-16) Investment
Policies; (1, 4, 12) Investment
Objective and Policies;(1-13a, 14-16)
Investment Limitations.
Item 14. Management of the Fund...(1-16) Federated Municipal Trust
Management.
Item 15. Control Persons and Principal
Holders of Securities....Not applicable.
Item 16. Investment Advisory and Other
Services.................(1-16) Investment Advisory Services; (1-
16) Other Services; (13b) Shareholder
Servicing Agent; (1, 4, 12, 16)
Shareholder Services; (6-11, 13a, 14,15)
Shareholder Services Agreement; (2,3,5)
Distribution Plan and Shareholder
Services Agreement.
Item 17. Brokerage Allocation.....(1-16) Brokerage Transactions.
Item 18. Capital Stock and Other
Securities...............(1-16) Massachusetts Partnership Law.
Item 19. Purchase, Redemption and Pricing
of Securities Being Offered (1-16) Determining Net Asset
Value; (1-16) Redemption in Kind.
Item 20. Tax Status............... (1-16) The Fund's Tax Status.
Item 21. Underwriters.............Not applicable.
Item 22. Calculation of Performance
Data.....................(1-16) Yield; (1-16) Effective Yield;
(1-13a,14-16) Tax-Equivalent Yield; (1-
16) Performance Comparisons; (1-16)
Performance Information, (1-13a,14-16)
Tax-Equivalency Table, (1-16) Total
Return.
Item 23. Financial Statements (1-16) Filed in Part A.
TENNESSEE MUNICIPAL CASH TRUST
(A PORTFOLIO OF FEDERATED MUNICIPAL CASH TRUST)
INSTITUTIONAL SHARES
PROSPECTUS
The Institutional Shares of Tennessee Municipal Cash Trust (the "Fund")
offered by this prospectus represent interests in a portfolio of Federated
Municipal Trust (the "Trust"), an open-end management investment company (a
mutual fund). The Fund invests primarily in short-term Tennessee municipal
securities, including securities of states, territories, and possessions of
the United States which are not issued by or on behalf of Tennessee, or its
political subdivisions and financing authorities, but which provide current
income exempt from federal regular income tax and the personal income tax
imposed by the State of Tennessee 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. BECAUSE THE FUND MAY INVEST A SIGNIFICANT PORTION OF ITS ASSETS IN
SECURITIES OF A SINGLE ISSUER, AN INVESTMENT IN THE FUND MAY INVOLVE
ADDITIONAL RISKS COMPARED TO A FULLY DIVERSIFIED MONEY MARKET FUND.
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 December
31, 1996, with the Securities and Exchange Commission ("SEC"). The
information contained in the Statement of Additional Information is
incorporated by reference into this prospectus. You may request a copy of
the Statement of Additional Information or a paper copy of this prospectus,
if you have received your prospectus electronically, free of charge by
calling 1-800-341-7400. To obtain other information, or make inquiries about
the Fund, contact the Fund at the address listed in the back of this
prospectus. The Statement of Additional Information, material incorporated
by reference into this document, and other information regarding the Fund is
maintained electronically with the SEC at Internet Web site
(http://www.sec.gov).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
Prospectus dated December 31, 1996
TABLE OF CONTENTS
<TABLE>
<S> <C>
SUMMARY OF FUND EXPENSES 1
FINANCIAL HIGHLIGHTS --
INSTITUTIONAL SHARES 2
GENERAL INFORMATION 3
INVESTMENT INFORMATION 3
Investment Objective 3
Investment Policies 3
Tennessee Municipal Securities 6
Investment Risks 6
Investment Limitations 7
Hub and Spoke(R) Option 7
FUND INFORMATION 7
Management of the Fund 7
Distribution of Institutional Shares 8
Administration of the Fund 8
NET ASSET VALUE 9
HOW TO PURCHASE SHARES 9
HOW TO REDEEM SHARES 10
ACCOUNT AND SHARE INFORMATION 11
TAX INFORMATION 12
Federal Income Tax 12
State and Local Taxes 12
OTHER CLASSES OF SHARES 13
PERFORMANCE INFORMATION 13
FINANCIAL HIGHLIGHTS --
INSTITUTIONAL SERVICE SHARES 14
FINANCIAL STATEMENTS 15
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
25
ADDRESSES 26
</TABLE>
SUMMARY OF FUND EXPENSES
INSTITUTIONAL SHARES
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<CAPTION>
<S> <C>
Maximum Sales Charge Imposed on Purchases (as a percentage of offering price) None
Maximum Sales Charge 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>
ANNUAL OPERATING EXPENSES
(As a percentage of projected average net assets)
<TABLE>
<CAPTION>
<S> <C> <C>
Management Fee (after waiver)(1) 0.00%
12b-1 Fee None
Total Other Expenses (after expense reimbursement) 0.35%
Shareholder Services Fee (after waiver)(2) 0.00%
Total Operating Expenses(3) 0.35%
</TABLE>
(1) The estimated management fee has been reduced to reflect the anticipated
voluntary waiver of the management fee. The adviser can terminate this
anticipated voluntary waiver at any time at its sole discretion. The
maximum management fee is 0.50%.
(2) The shareholder services fee has been reduced to reflect the voluntary
waiver of the shareholder services fee. The shareholder service provider
can terminate this voluntary waiver at any time at its sole discretion.
The maximum shareholder services fee is 0.25%.
(3) The Total Operating Expenses in the table above are based on expenses
expected during the fiscal year ending October 31, 1997. The Total
Operating Expenses were 0.10% for fiscal year ended October 31, 1996
and would have been 1.72% absent the voluntary waivers of the management
fee and the shareholder services fee and the voluntary reimbursement of
certain other operating expenses.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of the Institutional Shares of
the Trust will bear, either directly or indirectly. For more complete
descriptions of the various costs and expenses, see "Fund 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) redemption at the end of each time period $4 $11 $20 $44
</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.
TENNESSEE MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS -- INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Reference is made to the Report of Independent Public Accountants
on page 25.
<TABLE>
<CAPTION>
PERIOD
ENDED
OCTOBER 31,
1996(a)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.01
LESS DISTRIBUTIONS
Distributions from net investment income (0.01)
NET ASSET VALUE, END OF PERIOD $ 1.00
TOTAL RETURN(b) 1.59%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.10%*
Net investment income 3.57%*
Expense waiver/reimbursement(c) 1.62%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $17,824
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from May 22, 1996 (date of initial
public investment) to October 31, 1996.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
GENERAL INFORMATION
The Trust was established as a Massachusetts business trust under a
Declaration of Trust dated September 1, 1989. The Declaration of Trust
permits the Trust to offer separate series of shares representing interests
in separate portfolios of securities. The shares in any one portfolio may be
offered in separate classes. With respect to this Fund, as of the date of
this prospectus, the Board of Trustees have established two classes of
shares known as Institutional Shares and Institutional Service Shares. This
prospectus relates only to Institutional Shares of the Fund, which are
designed primarily for financial institutions acting in a fiduciary capacity
as a convenient means of accumulating an interest in a professionally
managed portfolio investing in short-term municipal securities. The Fund
may not be a suitable investment for retirement plans or for non-Tennessee
taxpayers because it invests in municipal securities of that state. A
minimum initial investment of $25,000 over a 90-day period is required.
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 and the personal income taxes imposed by the State of
Tennessee 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 complying with the diversification and other
requirements of Rule 2a-7 under the Investment Company Act of 1940 which
regulates money market mutual funds and 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 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. 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 and the
personal income taxes imposed by the State of Tennessee. (Federal regular
income tax does not include the federal individual alternative minimum tax
or the federal alternative minimum tax for corporations.) Unless indicated
otherwise, the investment policies may be changed by the Board of Trustees
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 Tennessee and its political subdivisions and
financing authorities, and obligations of other 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 and the personal income taxes imposed by the
State of Tennessee ("Tennessee Municipal Securities"). Examples of Tennessee
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.
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 Tennessee
Municipal Securities from financial institutions such as commercial and
investment banks, savings 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 Tennessee 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. Lease obligations may be subject to periodic appropriation.
Municipal leases are subject to certain specific risks in the event of
default or failure of appropriation.
CREDIT ENHANCEMENT. Certain of the Fund's acceptable investments may be
credit-enhanced by a guaranty, letter of credit, or insurance. Any
bankruptcy, receivership, default, or change in the credit quality of the
party providing the credit enhancement will adversely affect the quality and
marketability of the underlying security and could cause losses to the Fund
and affect its share price. The Fund may have more than 25% of its total
assets invested in securities credit-enhanced by banks.
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.
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 law. Under
criteria established by the Trustees, 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, all of comparable
quality to other securities in which the Fund invests, such as: obligations
issued by or on behalf of municipal or corporate issuers; 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 depository
institutions having capital, surplus, and undivided profits in excess of
$100,000,000 at the time 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
Tennessee Municipal Securities is subject to the federal alternative minimum
tax.
TENNESSEE MUNICIPAL SECURITIES
Tennessee 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.
Tennessee 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 Tennessee 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 Tennessee 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 Tennessee 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 Tennessee Municipal Securities acceptable for purchase
by the Fund could become limited.
The Fund may invest in Tennessee 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 Tennessee 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 Tennessee 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. Due to these risk
considerations, the Fund's concentration in Tennessee Municipal Securities
may entail a greater level of risk than other types of money market funds.
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 assets to
secure such borrowings. These investment limitations cannot be changed
without shareholder approval.
HUB AND SPOKE* OPTION
If the Trustees determine it to be in the best interest of the Fund and its
shareholders, the Fund may in the future seek to achieve its objective by
investing all of its assets in another investment company having the same
investment objective and substantially the same investment policies and
restrictions as those applicable to the Fund. It is expected that any such
investment company would be managed in substantially the same manner as the
Fund.
The initial shareholder of the Fund voted to vest authority to use this
investment structure in the sole discretion of the Trustees. No further
approval of shareholders is required. Shareholders will receive at least
30 days notice prior to any such investment.
In making its determination, the Trustees will consider, among other things,
the benefits to shareholders and/or the opportunity to reduce costs and
achieve operational efficiencies. Although it is expected that the Trustees
will not approve an arrangement that is likely to result in higher costs, no
assurance is given that costs will remain the same or be materially reduced if
this investment structure is implemented.
FUND INFORMATION
MANAGEMENT OF THE FUND
BOARD OF TRUSTEES. The Fund is managed by a Board of Trustees. The Trustees
are responsible for managing the Fund's business affairs and for exercising
all the Trust's powers except those reserved for the shareholders. An
Executive Committee of the Board of Trustees handles the Board's
responsibilities between meetings of the Board.
INVESTMENT ADVISER. Investment decisions for the Fund are made by Federated
Management, the Fund's investment adviser, subject to direction by the
Trustees. The adviser continually conducts investment research and
supervision for the Fund and is responsible for the purchase and sale of
portfolio instruments.
ADVISORY FEES. The adviser receives an annual investment advisory fee equal
to .50% of the Fund's average daily net assets. The adviser 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 Management, a Delaware business trust,
organized on April 11, 1989, is a registered investment adviser under the
Investment Advisers Act of 1940. It is a subsidiary of Federated Investors.
All of the Class A (voting) Shares of Federated Investors are owned by a
trust, the trustees of which are John F. Donahue, Chairman and Trustee of
Federated Investors, Mr. Donahue's wife, and Mr. Donahue's son, J.
Christopher Donahue, who is President and Trustee of Federated Investors.
Federated Management and other subsidiaries of Federated Investors serve as
investment advisers to a number of investment companies and private
accounts. Certain other subsidiaries also provide administrative services to
a number of investment companies. With over $80 billion invested across more
than 250 funds under management and/or administration by its subsidiaries,
as of December 31, 1995, Federated Investors is one of the largest mutual
fund investment managers in the United States. With more than 1,800
employees, Federated continues to be led by the management who founded the
company in 1955. Federated funds are presently at work in and through 4,000
financial institutions nationwide. More than 100,000 investment
professionals have selected Federated funds for their clients.
Both the Trust and the adviser have adopted strict codes of ethics governing
the conduct of all employees who manage the Fund and its portfolio
securities. These codes recognize that such persons owe a fiduciary duty to
the Fund's shareholders and must place the interests of shareholders ahead
of the employees' own interests. 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 Trustees, and could result in severe penalties.
DISTRIBUTION OF INSTITUTIONAL SHARES
Federated Securities Corp. is the principal distributor for Institutional
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.
SHAREHOLDER SERVICES. 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
the average daily net asset value of the Institutional Shares, computed at
an annual rate, to obtain certain personal services for shareholders and
to maintain shareholder accounts. From time to time and for such periods
as deemed appropriate, the amount stated above may be reduced voluntarily.
Under the Shareholder Services Agreement, Federated Shareholder Services
will either perform shareholder services directly or will select financial
institutions to perform shareholder services. Financial institutions will
receive fees based upon shares owned by their clients or customers. The
schedules of such fees and the basis upon which such fees will be paid will
be determined from time to time by the Fund and Federated Shareholder Services.
SUPPLEMENTAL PAYMENTS TO FINANCIAL INSTITUTIONS. In addition to payments made
pursuant to the Shareholder Services Agreement, Federated Securities Corp.
and Federated Shareholder Services, from their own assets, may pay financial
institutions supplemental fees for the performance of substantial sales
services, distribution-related support services, or shareholder services. The
support may include sponsoring sales, educational and training seminars for
their employees, providing sales literature and engineering computer software
programs that emphasize the attributes of the Fund. Such assistance may be
predicated upon the amount of shares 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 by the distributor may be
reimbursed by the Fund's investment adviser or its affiliates.
ADMINISTRATION OF THE FUND
ADMINISTRATIVE SERVICES. Federated Services Company, a subsidiary of
Federated Investors, provides administrative personnel and services
(including certain legal and financial reporting services) necessary to
operate the Fund at an annual rate which relates to the average aggregate
daily net assets of all funds advised by affiliates of Federated Investors
specified below:
<TABLE>
<CAPTION>
<C> <S>
MAXIMUM AVERAGE AGGREGATE
ADMINISTRATIVE FEE DAILY NET ASSETS
.15% on the first $250 million
.125% on the next $250 million
.10% on the next $250 million
.075% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
Federated Services Company may choose voluntarily to waive a portion of its
fee.
NET ASSET VALUE
The Fund attempts to stabilize the net asset value of shares at $1.00 by
valuing the portfolio securities using the amortized cost method. The net
asset value per share is determined by subtracting liabilities attributable
to Institutional Shares from the value of Fund assets attributable to
Institutional Shares, and dividing the remainder by the number of
Institutional 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, 1:00 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 charge, next
determined after an order is received, on days on which the New York Stock
Exchange is open for business. Shares may be purchased either by wire or by
check. The Fund reserves the right to reject any purchase request.
To make a purchase, open an account by calling Federated Securities Corp.
Information needed to establish the account will be taken by telephone. The
minimum initial investment is $25,000. However, an account may be opened
with a smaller amount as long as the minimum is reached within 90 days.
Minimum investments will be calculated by combining all accounts maintained
with the Fund. Financial institutions may impose different minimum
investment requirements on their customers.
PURCHASING SHARES BY WIRE. Shares may be purchased by Federal Reserve wire
by calling the Fund before 1:00 p.m. (Eastern time) to place an order. The
order is considered received immediately. Payment by federal funds must be
received before 3:00 p.m. (Eastern time) that day. Federal funds should be
wired as follows: Federated Shareholder Services Company, c/o State Street
Bank and Trust Company, Boston, MA; Attention: EDGEWIRE; For Credit to:
Tennessee Municipal Cash Trust -- Institutional Shares; Fund Number (this
number can be found on the account statement or by contacting the Fund);
Group Number or Order Number; Nominee or Institution Name; and ABA Number
011000028. Shares cannot be purchased by wire on holidays when wire
transfers are restricted. Questions on wire purchases should be directed to
your shareholder services representative at the telephone number listed on
your account statement.
PURCHASING SHARES BY CHECK. Shares may be purchased by sending a check to
Federated Shareholder Services Company, P.O. Box 8600, Boston, MA
02266-8600. The check should be made payable to: Tennessee Municipal Cash
Trust -- Institutional Shares. 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.
HOW TO REDEEM SHARES
Shares are redeemed at their net asset value next determined after Federated
Shareholder Services Company 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.
REDEEMING SHARES BY TELEPHONE. Redemptions in any amount may be made by
calling the Fund provided the Fund has a properly completed authorization
form. These forms can be obtained from Federated Securities Corp. Proceeds
from redemption requests 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 include
that day's dividend but will be wired the following business day. Proceeds
from redemption requests on holidays when wire transfers are restricted will
be wired the following business day. Questions about telephone redemptions on
days when wire transfers are restricted should be directed to your shareholder
services representative at the telephone number listed on your account
statement.
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.
In the event of drastic economic or market changes, a shareholder may
experience difficulty in redeeming by telephone. If this occurs, "Redeeming
Shares By Mail" should be considered. If at any time the Fund shall
determine it necessary to terminate or modify the telephone redemption
privilege, shareholders would be promptly notified.
REDEEMING SHARES BY MAIL. Shares may be redeemed in any amount by mailing a
written request to: Federated Shareholder Services Company, P.O. Box 8600,
Boston, MA 02266-8600. If share certificates have been issued, they should
be sent unendorsed with the written request by registered or certified mail
to the address noted above.
The written request should state: the Fund name and the class designation;
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 the receipt of a proper written
redemption request. Dividends are paid up to and including the day that a
redemption request is processed.
Shareholders requesting a redemption of any amount to be sent to an address
other than that on record with the Fund or a redemption payable other than
to the shareholder of record must have their signatures guaranteed by a
commercial or savings bank, trust company, or savings association whose
deposits are insured by an organization which is administered by the Federal
Deposit Insurance Corporation; a member firm of a domestic stock exchange;
or any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934. The Fund does not accept signatures guaranteed by a
notary public.
ACCOUNT AND SHARE INFORMATION
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 1:00 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.
CERTIFICATES AND CONFIRMATIONS. As transfer agent for the Fund, Federated
Shareholder Services Company maintains a share account for each shareholder.
Share certificates are not issued unless requested by contacting the Fund or
Federated Shareholder Services Company in writing. Monthly confirmations are
sent to report all transactions as well as dividends paid during the month.
ACCOUNTS WITH LOW BALANCES. Due to the high cost of maintaining accounts
with low balances, the Fund may redeem shares in any account and pay the
proceeds to the shareholder if the account balance falls below a required
minimum value of $25,000 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.
VOTING RIGHTS. Each share of the Trust owned by a shareholder gives that
shareholder one vote in Trustee elections and other matters submitted to
shareholders for vote. All shares of all classes of each portfolio in the
Trust have equal voting rights; except that in matters affecting only a
particular portfolio or class, only shareholders of that portfolio or class
are entitled to vote. The Trust is not required to hold annual shareholder
meetings. Shareholder approval will be sought only for certain changes in
the Trust's or the Fund's operation and for election of Trustees under
certain circumstances.
Trustees may be removed by the Trustees or by shareholders at a special
meeting. A special meeting shall be called by the Trustees upon the written
request of shareholders owning at least 10% of the outstanding shares of the
Trust.
As of November 5, 1996, Trust Company of Knoxville, organized in the State
of Tennessee owned 34.10% of the voting securities of the Institutional
Shares of the Fund, and Berman Family Investment LP owned 37.52% of the
voting securities of the Institutional Service Shares of the Fund.
Therefore, they may, for certain purposes, be deemed to control the Fund and
be able to affect the outcome of certain matters presented for a vote of
shareholders.
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 Trust's other portfolios will not be combined for tax
purposes with those realized by the Fund.
Shareholders are not required to pay the federal regular income tax on any
dividends received from the Fund that represent net interest on tax-exempt
municipal bonds. However, 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, within the limits of its investment
policies, 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
Income from the Fund is not necessarily free from taxes in states other than
Tennessee. Shareholders are urged to consult their own tax advisers
regarding the status of their accounts under state and local tax laws.
TENNESSEE TAXES. Under existing Tennessee law, distributions made by the
Fund will not be subject to Tennessee personal income taxes to the extent
that such distributions qualify as "exempt-interest dividends" under the
Internal Revenue Code, and represent (i) interest on obligations of the
state of Tennessee or its political subdivisions; or (ii) interest on
certain obligations of the United States, or any agency or instrumentality
thereof. To the extent that distributions by the Fund are derived from
distributions on other types of obligations, such distributions will be
subject to Tennessee personal income taxes.
Distributions made by the Fund will be subject to the excise taxes imposed
on corporations.
OTHER CLASSES OF SHARES
The Fund also offers another class of shares called Institutional Service
Shares. Institutional Service Shares are sold primarily to financial
institutions acting in an agency capacity. Institutional Service Shares are
sold at net asset value and are subject to a Shareholder Services Agreement.
Investments in Institutional Service Shares are subject to a minimum initial
investment of $10,000 over a 90-day period.
Institutional Shares and Institutional Service Shares are subject to certain
of the same expenses. Expense differences between classes may affect the
performance of each class.
To obtain more information and a prospectus for any other class, investors
may call 1-800-341-7400.
PERFORMANCE INFORMATION
From time to time, the Fund advertises its yield, effective yield,
tax-equivalent yield, and total return. The performance figures will be
calculated separately for each class of shares.
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.
Total return represents the change, over a specified period of time, in the
value of an investment in the shares 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.
TENNESSEE MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS -- INSTITUTIONAL SERVICE SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Reference is made to the Report of Independent Public Accountants
on page 25.
<TABLE>
<CAPTION>
PERIOD
ENDED
OCTOBER 31,
1996(a)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.01
LESS DISTRIBUTIONS
Distributions from net investment income (0.01)
NET ASSET VALUE, END OF PERIOD $ 1.00
TOTAL RETURN(b) 1.48%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.39%*
Net investment income 3.26%*
Expense waiver/reimbursement(c) 1.33%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $29,824
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from May 22, 1996 (date of initial
public investment) to October 31, 1996.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
TENNESSEE MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(a)SHORT-TERM MUNICIPALS -- 103.0%
TENNESSEE -- 98.8%
$ 2,200,000 Benton County, TN IDB, (Series 1996) Weekly VRDNs (Jones Plastic
and Engineering Corp.)/(National City Bank, Kentucky LOC) $ 2,200,000
1,300,000 Chattanooga, TN HEFA Weekly VRDNs (Mccallie School)/(SunTrust
Bank, Atlanta LOC) 1,300,000
1,100,000 Chattanooga, TN HEFA Weekly VRDNs (Sisken Hospital)/(Sumitomo
Bank Ltd., Osaka LOC) 1,100,000
1,000,000 Cocke County, TN IDB Weekly VRDNs (GLI, Inc.)/(Great Lakes
Chemical Corp. GTD) 1,000,000
510,000 Cocke County, TN IDB, (Series 1988) Weekly VRDNs (GLI, Inc.)/
(Great Lakes Chemical Corp. GTD) 510,000
2,000,000 Dickson County, TN IDB, (Series 1996) Weekly VRDNs (Tennessee
Bun Company, LLC Project)/(PNC Bank, Ohio, N.A. LOC) 2,000,000
1,550,000 Greenfield, TN IDB, IDRB, (Series 1995) Weekly VRDNs (Plastic
Products Company Project)/(Norwest Bank Minnesota, Minneapolis
LOC) 1,550,000
4,200,000 Hawkins County, TN IDB, (Series 1995) Weekly VRDNs (Sekisui Ta
Industries, Inc. Project)/(Bank of Tokyo-Mitsubishi Ltd. LOC) 4,200,000
2,900,000 Hendersonville, TN IDB, (Series 1996) Weekly VRDNs (Betty Machine
Co. Project)/(First Union National Bank, Charlotte, N.C. LOC) 2,900,000
1,800,000 Jackson County, TN IDB, (Series B) Daily VRDNs (Esselte AB)/(Bank
of America, Illinois LOC) 1,800,000
1,000,000 Jackson, TN IDB , Solid Waste Facility Bonds (Series 1995) Weekly
VRDNs (Florida Steel Corp.)/(NationsBank, South LOC) 1,000,000
1,325,000 Knox County, TN IDB, (Series 1996) Weekly VRDNs (Health Ventures,
Inc. Project)/(SunTrust Bank, Nashville LOC) 1,325,000
400,000 Maury County, TN HEFA, (Series 1996E) Weekly VRDNs (Southern
Healthcare Systems, Inc.)/(Bank One, Texas, N.A. LOC) 400,000
2,400,000 McMinn County, TN IDB, Industrial Development Bonds, (Series
1995) Weekly VRDNs (Creative Fabrication Corp.)/(NBD Bank,
Michigan LOC) 2,400,000
</TABLE>
TENNESSEE MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(a)SHORT-TERM MUNICIPALS -- CONTINUED
TENNESSEE -- CONTINUED
$ 770,000 Memphis, TN, (Series 1996), 5.00% Bonds, 7/1/1997 $ 775,446
1,000,000 Metropolitan Government Nashville & Davidson County, TN HEFA,
(Series 1989 A), 3.65% CP (Vanderbilt University), Mandatory Tender
1/10/1997 1,000,000
2,500,000 Metropolitan Government Nashville & Davidson County, TN HEFA,
Hospital Revenue Bonds, (Series 1992), 3.60% CP (Baptist Hospital,
Inc. (TN)/(NationsBank, South LIQ), Mandatory Tender 1/21/1997 2,500,000
1,000,000 Metropolitan Government Nashville & Davidson County, TN HEFA,
Hospital Revenue Bonds, (Series 1992), 3.65% CP (Baptist Hospital,
Inc. (TN)/(NationsBank, South LIQ), Mandatory Tender 1/8/1997 1,000,000
2,300,000 Metropolitan Government Nashville & Davidson County, TN IDB,
Metropolitan Government Revenue Bonds, (Series 1995) Weekly
VRDNs (YMCA Projects)/(Nationsbank of Tennessee LOC) 2,300,000
1,700,000 Oak Ridge, TN IDB, Solid Waste Facility Bonds, (Series 1996) Weekly
VRDNs (M4 Environmental L.P. Project)/(SunTrust Bank, Atlanta LOC) 1,700,000
300,000 Paris, TN IDB Weekly VRDNs (Plumley - Marugo Limited)/(PNC
Bank, Kentucky LOC) 300,000
700,000 Roane, TN IDB, (Series 1982), 3.50% (Fortafil Fibers, Inc.
Project)/(ABN AMRO Bank N.V., Amsterdam LOC), 11/15/96 700,000
1,000,000 Shelby County, TN Health Education & Housing Facilities Board,
4.05% TOBs (Methodist Health System, Inc.)/(MBIA INS)/(Sanwa
Bank Ltd, Osaka LIQ), Optional Tender 8/1/1997 1,000,000
1,130,000 Shelby County, TN Health Education & Housing Facilities Board,
9.625% Bonds, (Lebonheur Children's Medical Center)/(United States
Treasury PRF), 7/1/1997 (@100) 1,173,395
1,000,000 Shelby County, TN Health Education & Housing Facilities Board,
Multifamily Housing Revenue Bonds, (Series 1988) Weekly VRDNs
(Arbor Lake Project)/(PNC Bank, N.A. LOC) 1,000,000
800,000 South Pittsburg, TN IDB, (Series 1996) Weekly VRDNs (Lodge
Manufacturing Co. Project)/(SunTrust Bank, Nashville LOC) 800,000
1,000,000 Tennessee Housing Development Agency, (Series 1996-5), 4.00% TOBs,
Mandatory Tender 8/21/1997 1,000,000
</TABLE>
TENNESSEE MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(a)SHORT-TERM MUNICIPALS -- CONTINUED
TENNESSEE -- CONTINUED
$ 1,500,000 Tennessee Housing Development Agency, Homeownership Program
Bonds (Issue 1996-3), 3.85% TOBs, Optional Tender 5/29/1997 $ 1,500,000
2,385,000 Tennessee State School Board Authority, (Series 1996 B), 5.00% Bonds,
5/1/1997 2,398,419
2,000,000 Union City, TN IDB, (Series 1995) Weekly VRDNs (Kohler Co.)/
(Wachovia Bank of Georgia NA, Atlanta LOC) 2,000,000
1,500,000 Union County, TN IDB, (Series 1995) Weekly VRDNs (Cooper
Container Corporation Project)/(SunTrust Bank, Nashville LOC) 1,500,000
735,000 Williamson County, TN, General Obligation Capital Outlay Notes
(Series 1996), 4.60% Bonds, 10/1/1997 740,432
Total 47,072,692
PUERTO RICO -- 2.1%
1,000,000 Puerto Rico Industrial, Tourist, Education, Medical & Environmental
Control Finance Authority, (Series 1994A), 3.80% CP (Inter American
University of Puerto Rico)/(Banque Paribas, Paris LOC), Mandatory
Tender 1/14/1997 1,000,000
GUAM -- 2.1%
1,000,000 Guam Water System Revenue Bonds, (Series 1989), 6.70% Bonds
(Capital Guaranty Corp. INS), 7/1/1997 1,018,234
TOTAL INVESTMENTS (AT AMORTIZED COST)(b) $ 49,090,926
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 58.8% of
the portfolio as calculated based upon total market value.
(a) The Fund may only invest in securities rated in one of the two highest
short-term rating categories by nationally recognized statistical rating
organizations ("NRSROs") or unrated securities of comparable quality. 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 Corporation, MIG-1 or MIG-2 by Moody's
Investors Service, Inc., or FIN-1+, FIN-1 and FIN-2 by Fitch Investors
Service, Inc. are all considered rated one of the two highest short-term
rating securities.
Securities rated in the highest short-term rating category (and unrated
securities of comparable quality) are identified as First Tier securities.
Securities rated in the second highest short-term rating category (and
unrated securities of comparable quality) are identified as Second Tier
securities. The Fund follows application regulations in determining whether
a security is rated and whether a security rated by multiple NRSROs in
different rating categories should be identified as a First or Second Tier
security. At October 31, 1996, the portfolio securities were rated as
follows:
<TABLE>
<CAPTION>
FIRST TIER SECOND TIER
<S> <C> <C>
Tier rating percentage based on total market value (unaudited) 100% 0.00%
</TABLE>
(b) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($47,647,706) at October 31, 1996.
The following acronyms are used throughout this portfolio:
CP -- Commercial Paper
GTD -- Guaranty
HEFA -- Health and Education Facilities Authority
IDB -- Industrial Development Bond
IDRB -- Industrial Development Revenue Bond
INS -- Insured
LIQ -- Liquidity Agreement
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance
PRF -- Prerefunded
TOBs -- Tender Option Bonds
VRDNs -- Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
TENNESSEE MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1996
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $49,090,926
Cash 169,351
Income receivable 260,093
Total assets 49,520,370
LIABILITIES:
Payable for investments purchased $ 1,743,907
Payable for shares redeemed 29,682
Income distribution payable 61,845
Accrued expenses 37,230
Total liabilities 1,872,664
NET ASSETS for 47,647,706 shares outstanding $47,647,706
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SHARES:
$17,823,803 / 17,823,803 shares outstanding $1.00
INSTITUTIONAL SERVICE SHARES:
$29,823,903 / 29,823,903 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
TENNESSEE MUNICIPAL CASH TRUST
STATEMENT OF OPERATIONS
PERIOD ENDED OCTOBER 31, 1996*
<TABLE>
<CAPTION>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $525,612
EXPENSES:
Investment advisory fee $ 71,830
Administrative personnel and services fee 71,571
Custodian fees 10,324
Transfer and dividend disbursing agent fees and expenses 6,199
Directors'/Trustees' fees 1,379
Legal fees 200
Portfolio accounting fees 26,665
Shareholder services fee -- Institutional Shares 15,852
Shareholder services fee -- Institutional Service Shares 20,063
Share registration costs 14,119
Printing and postage 5,000
Insurance premiums 3,265
Miscellaneous 686
Total expenses 247,153
Waivers and reimbursements --
Waiver of investment advisory fee $ (71,830)
Waiver of shareholder services fee -- Institutional Shares (15,852)
Reimbursement of other operating expenses (121,760)
Total waivers and reimbursements (209,442)
Net expenses 37,711
Net investment income $487,901
</TABLE>
* For the period from May 22, 1996 (date of initial investment) to
October 31, 1996.
(See Notes which are an integral part of the Financial Statements)
TENNESSEE MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PERIOD ENDED
OCTOBER 31,
1996*
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 487,901
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment income
Institutional Shares (226,076)
Institutional Service Shares (261,825)
Change in net assets resulting from distributions to shareholders (487,901)
SHARE TRANSACTIONS--
Proceeds from sale of shares 165,734,867
Net asset value of shares issued to shareholders in payment of
distributions declared 209,339
Cost of shares redeemed 118,296,500)
Change in net assets resulting from share transactions 47,647,706
Change in net assets 47,647,706
NET ASSETS:
Beginning of period -
End of period $ 47,647,706
</TABLE>
* For the period from May 22, 1996 (date of initial public investment) to
October 31, 1996.
(See Notes which are an integral part of the Financial Statements)
TENNESSEE MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1996
1. ORGANIZATION
Federated Municipal Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "Act") as an open-end, management
investment company. The Trust consists of sixteen portfolios. The financial
statements included herein are only those of Tennessee Municipal Cash Trust
(the "Fund'). The financial statements of the other portfolios are presented
separately. The assets of each portfolio are segregated and a shareholder's
interest is limited to the portfolio in which shares are held.
The Fund offers two classes of shares: Institutional Shares and
Institutional Service Shares.
The investment objective of the Fund is current income exempt from federal
regular income tax and the personal income tax imposed by the State of
Tennessee consistent with stability of principal and liquidity.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS -- The Fund's use of the amortized cost method to
value its portfolio securities is in accordance with Rule 2a-7 under the
Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS -- Interest income and
expenses are accrued daily. Bond premium and discount, if applicable, are
amortized as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES -- It is the Fund's policy to comply with the provisions of
the Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS -- The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
USE OF ESTIMATES -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses, and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER -- Investment transactions are accounted for on the trade date.
3. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number
of full and fractional shares of beneficial interest (without par value) for
each class of shares. At October 31, 1996, capital paid-in aggregated
$47,647,706.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
PERIOD ENDED
OCTOBER 31,
1996
<S> <C>
INSTITUTIONAL SHARES SHARES
Shares sold 34,644,791
Shares issued to shareholders in payment of distributions declared 3,455
Shares redeemed (16,824,443)
Net change resulting from Institutional Share transactions 17,823,803
</TABLE>
For the period from May 22, 1996 (date of initial public investment) to
October 31, 1996.
<TABLE>
<CAPTION>
PERIOD ENDED
OCTOBER 31,
1996
INSTITUTIONAL SERVICE SHARES SHARES
<S> <C>
Shares sold 131,090,076
Shares issued to shareholders in payment of distributions declared 205,884
Shares redeemed (101,472,057)
Net change resulting from Institutional Service Share transactions 29,823,903
Net change resulting from share transactions 47,647,706
</TABLE>
For the period from May 22, 1996 (date of initial public investment) to
October 31, 1996.
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE -- Federated Management, the Fund's investment
adviser (the "Adviser"), receives for its services an annual investment
advisory fee equal to 0.50% of the Fund's average daily net assets.
The Adviser may voluntarily choose to waive any portion of its fee and/or
reimburse certain operating expenses of the Fund. The Adviser can modify or
terminate this voluntary waiver and/or reimbursement at any time at its sole
discretion.
ADMINISTRATIVE FEE -- Federated Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The fee paid to FServ is based on the level of
average aggregate daily net assets of all funds advised by subsidiaries of
Federated Investors for the period. The administrative fee received during
the period of the Administrative Services Agreement shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE -- Under the terms of a Shareholder Services
Agreement with Federated Shareholder Services ("FSS"), the Fund will pay FSS
up to 0.25% of average daily net assets of the Fund shares for the
period. The fee paid to FSS is used to finance certain services for
shareholders and to maintain shareholder accounts. FSS may voluntarily
choose to waive any portion of its fee. FSS can modify or terminate this
voluntary waiver at any time at its sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES -- FServ, through
its subsidiary, Federated Shareholder Services Company ("FSSC") serves as
transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is
based on the size, type, and number of accounts and transactions made by
shareholders.
PORTFOLIO ACCOUNTING FEES -- FServ maintains the Fund's accounting records
for which it receives a fee. The fee is based on the level of the Fund's
average daily net assets for the period, plus out-of-pocket expenses.
INTERFUND TRANSACTIONS -- During the period ended October 31, 1996, the Fund
engaged in purchase and sale transactions with funds that have a common
investment adviser (or affiliated investment advisers), common
Directors/Trustees, and/or common Officers. These purchase and sale
transactions were made at current market value pursuant to Rule 17a-7 under
the Act amounting to $142,770,000 and $116,525,000, respectively.
GENERAL -- Certain of the Officers and Trustees of the Trust are Officers
and Directors or Trustees of the above companies.
5. CONCENTRATION OF CREDIT RISK
Since the Fund invests a substantial portion of its assets in issuers
located in one state, it will be more susceptible to factors adversely
affecting issuers of that state than would be a comparable tax-exempt
mutual fund that invests nationally. In order to reduce the credit risk
associated with such factors, at October 31, 1996, 16% of the securities
in the portfolio of investments are backed by letters of credit or bond
insurance of various financial institutions and financial guaranty
assurance agencies. The percentage of investments insured by or supported
(backed) by a letter of credit from any one institution or agency
did not exceed 14% of total investments.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees of
FEDERATED MUNICIPAL TRUST
(Tennessee Municipal Cash Trust):
We have audited the accompanying statement of assets and liabilities of
Tennessee Municipal Cash Trust (an investment portfolio of Federated
Municipal Trust, a Massachusetts business trust), including the schedule of
portfolio of investments, as of October 31, 1996 and the related statements of
operations and changes in net assets and the financial
highlights (see pages 2 and 14 of the prospectus) for the period from May
22, 1996 to October 31, 1996. These financial statements and financial
highlights are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of October 31, 1996, by correspondence with the
custodian and broker. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Tennessee Municipal Cash Trust (an investment portfolio of Federated
Municipal Trust) as of October 31, 1996 and the results of its operations,
changes in its net assets, and the financial highlights for the period, from
May 22, 1996 to October 31, 1996, in conformity with generally accepted
accounting principles.
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania
November 20, 1996
ADDRESSES
Tennessee Municipal Cash Trust
Institutional Shares Federated Investors Tower
Pittsburgh, PA 15222-3779
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, PA 15222-3779
Investment Adviser
Federated Management Federated Investors Tower
Pittsburgh, PA 15222-3779
Custodian
State Street Bank and P.O. Box 8600
Trust Company Boston, MA 02266-8600
Transfer Agent and Dividend Disbursing Agent
Federated Shareholder P.O. Box 8600
Services Company Boston, MA 02266-8600
Independent Public Accountants
Arthur Andersen LLP 2100 One PPG Place
Pittsburgh, PA 15222
Tennessee Municipal
Cash Trust
(A Portfolio of Federated Municipal Cash Trust)
Institutional Shares
Prospectus
A Portfolio of
Federated Municipal Trust,
an Open-End, Management
Investment Company
Prospectus dated December 31, 1996
Federated Investors
[Graphic]
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the fund
and is a subsidiary of Federated Investors.
[Graphic]
Cusip 314229642
G01682-01 (12/96)
TENNESSEE MUNICIPAL CASH TRUST
(A PORTFOLIO OF FEDERATED MUNICIPAL CASH TRUST)
INSTITUTIONAL SERVICE SHARES
PROSPECTUS
The Institutional Service Shares of Tennessee Municipal Cash Trust (the
"Fund") offered by this prospectus represent interests in a portfolio of
Federated Municipal Trust (the "Trust"), an open-end management investment
company (a mutual fund). The Fund invests primarily in short-term Tennessee
municipal securities, including securities of states, territories, and
possessions of the United States which are not issued by or on behalf of
Tennessee, or its political subdivisions and financing authorities, but
which provide current income exempt from federal regular income tax and the
personal income taxes imposed by the State of Tennessee 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. BECAUSE THE FUND MAY INVEST A SIGNIFICANT PORTION OF ITS ASSETS IN
SECURITIES OF A SINGLE ISSUER, AN INVESTMENT IN THE FUND MAY INVOLVE
ADDITIONAL RISKS COMPARED TO A FULLY DIVERSIFIED MONEY MARKET FUND.
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 December
31, 1996, with the Securities and Exchange Commission ("SEC"). The
information contained in the Statement of Additional Information is
incorporated by reference into this prospectus. You may request a copy of
the Statement of Additional Information or a paper copy of this prospectus,
if you have received your prospectus electronically, free of charge by
calling 1-800-341-7400. To obtain other information, or make inquiries about
the Fund, contact the Fund at the address listed in the back of this
prospectus. The Statement of Additional Information, material incorporated
by reference into this document, and other information regarding the Fund is
maintained electronically with the SEC at Internet Web site
(http://www.sec.gov).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
Prospectus dated December 31, 1996
TABLE OF CONTENTS
<TABLE>
<S> <C>
SUMMARY OF FUND EXPENSES 1
FINANCIAL HIGHLIGHTS --
INSTITUTIONAL SERVICE SHARES 2
GENERAL INFORMATION 3
INVESTMENT INFORMATION 3
Investment Objective 3
Investment Policies 3
Tennessee Municipal Securities 6
Investment Risks 6
Investment Limitations 7
Hub and Spoke* Option 7
FUND INFORMATION 7
Management of the Fund 7
Distribution of Institutional Service Shares 8
Administration of the Fund 9
NET ASSET VALUE 9
HOW TO PURCHASE SHARES 9
Special Purchase Features 10
HOW TO REDEEM SHARES 10
Special Redemption Features 11
ACCOUNT AND SHARE INFORMATION 12
TAX INFORMATION 13
Federal Income Tax 13
State and Local Taxes 13
OTHER CLASSES OF SHARES 14
PERFORMANCE INFORMATION 14
FINANCIAL HIGHLIGHTS --
INSTITUTIONAL SHARES 15
FINANCIAL STATEMENTS 16
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 26
ADDRESSES 27
</TABLE>
SUMMARY OF FUND EXPENSES
INSTITUTIONAL SERVICE SHARES
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<CAPTION>
<S> <C>
Maximum Sales Charge Imposed on Purchases (as a percentage of offering price) None
Maximum Sales Charge 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>
ANNUAL OPERATING EXPENSES
(As a percentage of projected average net assets)
<TABLE>
<CAPTION>
<S> <C> <C>
Management Fee (after waiver)(1) 0.00%
12b-1 Fee None
Total Other Expenses (after expense reimbursement) 0.60%
Shareholder Services Fee 0.25%
Total Operating Expenses(2) 0.60%
</TABLE>
(1) The estimated management fee has been reduced to reflect the anticipated
voluntary waiver of the management fee. The adviser can terminate this
anticipated voluntary waiver at any time at its sole discretion. The
maximum management fee is 0.50%.
(2) The Total Operating Expenses in the table above are based on expenses
expected during the fiscal year ending October 31, 1997. The Total
Operating Expenses were 0.39% for fiscal year ended October 31, 1996 and
would have been 1.72% absent the voluntary waiver of the management fee
and the voluntary reimbursement of certain other operating expenses.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of the Institutional Service
Shares of the Trust will bear, either directly or indirectly. For more complete
descriptions of the various costs and expenses, see "Fund 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) redemption at the end of
each time period $6 $19 $33 $75
</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.
TENNESSEE MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS -- INSTITUTIONAL SERVICE SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Reference is made to the Report of Independent Public Accountants
on page 26.
<TABLE>
<CAPTION>
PERIOD
ENDED
OCTOBER 31,
1996(a)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.01
LESS DISTRIBUTIONS
Distributions from net investment income (0.01)
NET ASSET VALUE, END OF PERIOD $ 1.00
TOTAL RETURN(b) 1.48%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.39%*
Net investment income 3.26%*
Expense waiver/reimbursement(c) 1.33%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $29,824
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from May 22, 1996 (date of initial
public investment) to October 31, 1996.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
GENERAL INFORMATION
The Trust was established as a Massachusetts business trust under a
Declaration of Trust dated September 1, 1989. The Declaration of Trust
permits the Trust to offer separate series of shares representing interests
in separate portfolios of securities. The shares in any one portfolio may be
offered in separate classes. With respect to this Fund, as of the date of
this prospectus, the Board of Trustees has established two classes of shares
known as Institutional Service Shares and Institutional Shares. This
prospectus relates only to Institutional Service Shares of the Fund, which
are designed primarily for financial institutions acting in an agency
capacity as a convenient means of accumulating an interest in a
professionally managed portfolio investing in short-term municipal
securities. The Fund may not be a suitable investment for retirement plans
or for non-Tennessee taxpayers because it invests in municipal securities of
that state. A minimum initial investment of $10,000 over a 90-day period is
required.
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 and the personal income taxes imposed by the State of
Tennessee 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 complying with the diversification and other
requirements of Rule 2a-7 under the Investment Company Act of 1940 which
regulates money market mutual funds and 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 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. 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 and the
personal income taxes imposed by the State of Tennessee. (Federal regular
income tax does not include the federal individual alternative minimum tax
or the federal alternative minimum tax for corporations.) Unless indicated
otherwise, the investment policies may be changed by the Board of Trustees
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 Tennessee and its political subdivisions and
financing authorities, and obligations of other 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 and the personal income taxes imposed by the
State of Tennessee ("Tennessee Municipal Securities"). Examples of Tennessee
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.
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 Tennessee
Municipal Securities from financial institutions such as commercial and
investment banks, savings 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 Tennessee 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. Lease obligations may be subject to periodic appropriation.
Municipal leases are subject to certain specific risks in the event of
default or failure of appropriation.
CREDIT ENHANCEMENT. Certain of the Fund's acceptable investments may be
credit-enhanced by a guaranty, letter of credit, or insurance. Any
bankruptcy, receivership, default, or change in the credit quality of the
party providing the credit enhancement will adversely affect the quality and
marketability of the underlying security and could cause losses to the Fund
and affect its share price. The Fund may have more than 25% of its total
assets invested in securities credit-enhanced by banks.
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.
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 law. Under
criteria established by the Trustees, 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, all of comparable
quality to other securities in which the Fund invests, such as: obligations
issued by or on behalf of municipal or corporate issuers; 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 depository
institutions having capital, surplus, and undivided profits in excess of
$100,000,000 at the time 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
Tennessee Municipal Securities is subject to the federal alternative minimum
tax.
TENNESSEE MUNICIPAL SECURITIES
Tennessee 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.
Tennessee 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 Tennessee 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 Tennessee 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 Tennessee 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 Tennessee Municipal Securities acceptable for purchase
by the Fund could become limited.
The Fund may invest in Tennessee 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 Tennessee 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 Tennessee 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. Due to these risk
considerations, the Fund's concentration in Tennessee Municipal Securities
may entail a greater level of risk than other types of money market funds.
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 assets to
secure such borrowings. These investment limitations cannot be changed
without shareholder approval.
HUB AND SPOKE(R) OPTION
If the Trustees determine it to be in the best interest of the Fund and its
shareholders, the Fund may in the future seek to achieve its objective by
investing all of its assets in another investment company having the same
investment objective and substantially the same investment policies and
restrictions as those applicable to the Fund. It is expected that any such
investment company would be managed in substantially the same manner as the
Fund.
The initial shareholder of the Fund voted to vest authority to use this
investment structure in the sole discretion of the Trustees. No further
approval of shareholders is required. Shareholders will receive at least
30 days notice prior to any such investment.
In making its determination, the Trustees will consider, among other things,
the benefits to shareholders and/or the opportunity to reduce costs and
achieve operational efficiencies. Although it is expected that the Trustees
will not approve an arrangement that is likely to result in higher costs, no
assurance is given that costs will remain the same or be materially reduced if
this investment structure is implemented.
FUND INFORMATION
MANAGEMENT OF THE FUND
BOARD OF TRUSTEES. The Fund is managed by a Board of Trustees. The Trustees
are responsible for managing the Fund's business affairs and for exercising
all the Trust's powers except those reserved for the shareholders. An
Executive Committee of the Board of Trustees handles the Board's
responsibilities between meetings of the Board.
INVESTMENT ADVISER. Investment decisions for the Fund are made by Federated
Management, the Fund's investment adviser, subject to direction by the
Trustees. The adviser continually conducts investment research and
supervision for the Fund and is responsible for the purchase and sale of
portfolio instruments.
ADVISORY FEES. The adviser receives an annual investment advisory fee equal
to .50% of the Fund's average daily net assets. The adviser 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 Management, a Delaware business trust,
organized on April 11, 1989, is a registered investment adviser under the
Investment Advisers Act of 1940. It is a subsidiary of Federated Investors.
All of the Class A (voting) Shares of Federated Investors are owned by a
trust, the trustees of which are John F. Donahue, Chairman and Trustee of
Federated Investors, Mr. Donahue's wife, and Mr. Donahue's son, J.
Christopher Donahue, who is President and Trustee of Federated Investors.
Federated Management and other subsidiaries of Federated Investors serve as
investment advisers to a number of investment companies and private
accounts. Certain other subsidiaries also provide administrative services to
a number of investment companies. With over $80 billion invested across more
than 250 funds under management and/or administration by its subsidiaries,
as of December 31, 1995, Federated Investors is one of the largest mutual
fund investment managers in the United States. With more than 1,800
employees, Federated continues to be led by the management who founded the
company in 1955. Federated funds are presently at work in and through 4,000
financial institutions nationwide. More than 100,000 investment
professionals have selected Federated funds for their clients.
Both the Trust and the adviser have adopted strict codes of ethics governing
the conduct of all employees who manage the Fund and its portfolio
securities. These codes recognize that such persons owe a fiduciary duty to
the Fund's shareholders and must place the interests of shareholders ahead
of the employees' own interests. 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 Trustees, and could result in severe penalties.
DISTRIBUTION OF INSTITUTIONAL SERVICE SHARES
Federated Securities Corp. is the principal distributor for Institutional
Service 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.
SHAREHOLDER SERVICES. 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
the average daily net asset value of the Institutional Shares, computed at
an annual rate, to obtain certain personal services for shareholders and
to maintain shareholder accounts. From time to time and for such periods
as deemed appropriate, the amount stated above may be reduced voluntarily.
Under the Shareholder Services Agreement, Federated Shareholder Services
will either perform shareholder services directly or will select financial
institutions to perform shareholder services. Financial institutions
will receive fees based upon shares owned by their clients or customers.
The schedules of such fees and the basis upon which such fees will be
paid will be determined from time to time by the Fund and Federated
Shareholder Services.
SUPPLEMENTAL PAYMENTS TO FINANCIAL INSTITUTIONS. In addition to payments made
pursuant to the Shareholder Services Agreement, Federated Securities Corp.
and Federated Shareholder Services, from their own assets, may pay financial
institutions supplemental fees for the performance of substantial sales
services, distribution-related support services, or shareholder services. The
support may include sponsoring sales, educational and training seminars for
their employees, providing sales literature and engineering computer software
programs that emphasize the attributes of the Fund. Such assistance may be
predicated upon the amount of shares 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 by the distributor may be
reimbursed by the Fund's investment adviser or its affiliates.
ADMINISTRATION OF THE FUND
ADMINISTRATIVE SERVICES. Federated Services Company, a subsidiary of
Federated Investors, provides administrative personnel and services
(including certain legal and financial reporting services) necessary to
operate the Fund at an annual rate which relates to the average aggregate
daily net assets of all funds advised by affiliates of Federated Investors
specified below:
<TABLE>
<CAPTION>
MAXIMUM AVERAGE AGGREGATE
ADMINISTRATIVE FEE DAILY NET ASSETS
<C> <S>
.15% on the first $250 million
.125% on the next $250 million
.10% on the next $250 million
.075% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
Federated Services Company may choose voluntarily to waive a portion of its
fee.
NET ASSET VALUE
The Fund attempts to stabilize the net asset value of shares at $1.00 by
valuing the portfolio securities using the amortized cost method. The net
asset value per share is determined by subtracting liabilities attributable
to Institutional Service Shares from the value of Fund assets attributable
to Institutional Service Shares, and dividing the remainder by the number of
Institutional Service 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, 1:00 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 charge, next
determined after an order is received, on days which the New York Stock
Exchange is 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 from the Fund, with a minimum initial
investment of $10,000 or more over a 90-day period. 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 Fund reserves 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 Fund 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 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.
PURCHASING SHARES BY WIRE. Shares may be purchased by Federal Reserve wire
by calling the Fund before 1:00 p.m. (Eastern time) to place an order. The
order is considered received immediately. Payment by federal funds must be
received before 3:00 p.m. (Eastern time) that day. Federal funds should be
wired as follows: Federated Shareholder Services Company, c/o State Street
Bank and Trust Company, Boston, MA; Attention: EDGEWIRE; For Credit to:
Tennessee Municipal Cash Trust -- Institutional Service Shares; Fund Number
(this number can be found on the account statement or by contacting the
Fund); Group Number or Order Number; Nominee or Institution Name; and ABA
Number 011000028. Shares cannot be purchased by wire on holidays when wire
transfers are restricted. Questions on wire purchases should be directed to
your shareholder services representative at the telephone number listed on
your account statement.
PURCHASING SHARES BY CHECK. Shares may be purchased by sending a check to
Federated Shareholder Services Company, P.O. Box 8600, Boston, MA
02266-8600. The check should be made payable to: Tennessee Municipal Cash
Trust -- Institutional Service Shares. 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 $100 can be automatically
withdrawn periodically from the shareholder's checking account at an
Automated Clearing House ("ACH") member and invested in Fund shares.
Shareholders should contact their financial institution or the Fund to
participate in this program.
HOW TO REDEEM SHARES
Shares are redeemed at their net asset value next determined after Federated
Shareholder Services Company 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.
REDEEMING SHARES 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 Shareholder 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 Fund provided the Fund has a properly completed authorization
form. These forms can be obtained from Federated Securities Corp. Proceeds
from redemption requests 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 include
that day's dividend 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 ACH will not be wired until that method
of payment has cleared. Proceeds from redemption requests on holidays when
wire transfers are restricted will be wired the following business day.
Questions about telephone redemptions on days when wire transfers are
restricted should be directed to your shareholder services representative at
the telephone number listed on your account statement.
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.
In the event of drastic economic or market changes, a shareholder may
experience difficulty in redeeming by telephone. If this occurs, "Redeeming
Shares By Mail" should be considered. If at any time the Fund shall
determine it necessary to terminate or modify the telephone redemption
privilege, shareholders would be promptly notified.
REDEEMING SHARES BY MAIL. Shares may be redeemed in any amount by mailing a
written request to: Federated Shareholder Services Company, P.O. Box 8600,
Boston, MA 02266-8600. If share certificates have been issued, they should
be sent unendorsed with the written request by registered or certified mail
to the address noted above.
The written request should state: the Fund name and the class designation;
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 the receipt of a proper written
redemption request. Dividends are paid up to and including the day that a
redemption request is processed.
Shareholders requesting a redemption of any amount to be sent to an address
other than that on record with the Fund or a redemption payable other than
to the shareholder of record must have their signatures guaranteed by a
commercial or savings bank, trust company, or savings association whose
deposits are insured by an organization which is administered by the Federal
Deposit Insurance Corporation; a member firm of a domestic stock exchange;
or any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934. The Fund does 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. Shareholder accounts will continue
to receive the daily dividend declared on the shares to be redeemed until
the check is presented to UMB Bank, N.A., the bank responsible for
administering the check writing program, for payment. However, checks should
never be made payable or sent to UMB Bank, N.A. or the Fund to redeem
shares, and a check may not be written to close an account.
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 institutions or the Fund.
ACCOUNT AND SHARE INFORMATION
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 1:00 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.
CERTIFICATES AND CONFIRMATIONS. As transfer agent for the Fund, Federated
Shareholder Services Company maintains a share account for each shareholder.
Share certificates are not issued unless requested by contacting the Fund or
Federated Shareholder Services Company in writing. Monthly confirmations are
sent to report all transactions as well as dividends paid during the month.
ACCOUNTS WITH LOW BALANCES. Due to the high cost of maintaining accounts
with low balances, the Fund may redeem shares in any account and pay the
proceeds to the shareholder if the account balance falls below 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.
VOTING RIGHTS. Each share of the Trust owned by a shareholder gives that
shareholder one vote in Trustee elections and other matters submitted to
shareholders for vote. All shares of all classes of each portfolio in the
Trust have equal voting rights; except that in matters affecting only a
particular portfolio or class, only shareholders of that portfolio or class
are entitled to vote. The Trust is not required to hold annual shareholder
meetings. Shareholder approval will be sought only for certain changes in
the Trust's or the Fund's operation and for election of Trustees under
certain circumstances.
Trustees may be removed by the Trustees or by shareholders at a special
meeting. A special meeting shall be called by the Trustees upon the written
request of shareholders owning at least 10% of the outstanding shares of the
Trust.
As of November 5, 1996, Berman Family Investment LP owned 37.52% of the
voting securities of the Institutional Service Shares of the Fund, and, Trust
Company of Knoxville, organized in the State of Tennessee, owned 34.10% of
the voting securities of the Institutional Shares of the Fund. Therefore,
they may, for certain purposes, be deemed to control shares of the Fund and
be able to affect the outcome of certain matters presented for a vote of
shareholders.
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 Trust's other portfolios will not be combined for tax
purposes with those realized by the Fund.
Shareholders are not required to pay the federal regular income tax on any
dividends received from the Fund that represent net interest on tax-exempt
municipal bonds. However, 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, within the limits of its investment
policies, 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
Income from the Fund is not necessarily free from taxes in states other than
Tennessee. Shareholders are urged to consult their own tax advisers
regarding the status of their accounts under state and local tax laws.
TENNESSEE TAXES. Under existing Tennessee law, distributions made by the
Fund will not be subject to Tennessee personal income taxes to the extent
that such distributions qualify as "exempt-interest dividends" under the
Internal Revenue Code, and represent (i) interest on obligations of the
state of Tennessee or its political subdivisions; or (ii) interest on
certain obligations of the United States, or any agency or instrumentality
thereof. To the extent that distributions by the Fund are derived from
distributions on other types of obligations, such distributions will be
subject to Tennessee personal income taxes.
Distributions made by the Fund will be subject to the excise taxes imposed
on corporations.
OTHER CLASSES OF SHARES
The Fund also offers another class of shares called Institutional Shares
that are sold primarily to financial institutions acting in a fiduciary
capacity. Institutional Shares are sold at net asset value and are sold
pursuant to a Shareholder Services Agreement. Investments in Institutional
Shares are subject to a minimum initial investment of $25,000 within a
90-day period.
Institutional Service Shares and Institutional Shares are subject to certain
of the same expenses. Expense differences, however, between Institutional
Service Shares and Institutional Shares may affect the performance of each
class.
To obtain more information and a prospectus for any other class, investors
may call 1-800-341-7400.
PERFORMANCE INFORMATION
From time to time, the Fund advertises its yield, effective yield,
tax-equivalent yield, and total return. The performance figures will be
calculated separately for each class of shares.
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.
Total return represents the change, over a specified period of time, in the
value of an investment in the shares 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.
TENNESSEE MUNICIPAL CASH TRUST
FINANCIAL HIGHLIGHTS -- INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Reference is made to the Report of Independent Public Accountants
on page 26.
<TABLE>
<CAPTION>
PERIOD
ENDED
OCTOBER 31,
1996(a)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.01
LESS DISTRIBUTIONS
Distributions from net investment income (0.01)
NET ASSET VALUE, END OF PERIOD $ 1.00
TOTAL RETURN(b) 1.59%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.10%*
Net investment income 3.57%*
Expense waiver/reimbursement(c) 1.62%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $17,824
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from May 22, 1996 (date of initial
public investment) to October 31, 1996.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
TENNESSEE MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(a)SHORT-TERM MUNICIPALS -- 103.0%
TENNESSEE -- 98.8%
$ 2,200,000 Benton County, TN IDB, (Series 1996) Weekly VRDNs (Jones Plastic
and Engineering Corp.)/(National City Bank, Kentucky LOC) $ 2,200,000
1,300,000 Chattanooga, TN HEFA Weekly VRDNs (Mccallie School)/(SunTrust
Bank, Atlanta LOC) 1,300,000
1,100,000 Chattanooga, TN HEFA Weekly VRDNs (Sisken Hospital)/(Sumitomo
Bank Ltd., Osaka LOC) 1,100,000
1,000,000 Cocke County, TN IDB Weekly VRDNs (GLI, Inc.)/(Great Lakes
Chemical Corp. GTD) 1,000,000
510,000 Cocke County, TN IDB, (Series 1988) Weekly VRDNs (GLI, Inc.)/
(Great Lakes Chemical Corp. GTD) 510,000
2,000,000 Dickson County, TN IDB, (Series 1996) Weekly VRDNs (Tennessee
Bun Company, LLC Project)/(PNC Bank, Ohio, N.A. LOC) 2,000,000
1,550,000 Greenfield, TN IDB, IDRB, (Series 1995) Weekly VRDNs (Plastic
Products Company Project)/(Norwest Bank Minnesota, Minneapolis
LOC) 1,550,000
4,200,000 Hawkins County, TN IDB, (Series 1995) Weekly VRDNs (Sekisui Ta
Industries, Inc. Project)/(Bank of Tokyo-Mitsubishi Ltd. LOC) 4,200,000
2,900,000 Hendersonville, TN IDB, (Series 1996) Weekly VRDNs (Betty Machine
Co. Project)/(First Union National Bank, Charlotte, N.C. LOC) 2,900,000
1,800,000 Jackson County, TN IDB, (Series B) Daily VRDNs (Esselte AB)/(Bank
of America, Illinois LOC) 1,800,000
1,000,000 Jackson, TN IDB , Solid Waste Facility Bonds (Series 1995) Weekly
VRDNs (Florida Steel Corp.)/(NationsBank, South LOC) 1,000,000
1,325,000 Knox County, TN IDB, (Series 1996) Weekly VRDNs (Health Ventures,
Inc. Project)/(SunTrust Bank, Nashville LOC) 1,325,000
400,000 Maury County, TN HEFA, (Series 1996E) Weekly VRDNs (Southern
Healthcare Systems, Inc.)/(Bank One, Texas, N.A. LOC) 400,000
2,400,000 McMinn County, TN IDB, Industrial Development Bonds, (Series
1995) Weekly VRDNs (Creative Fabrication Corp.)/(NBD Bank,
Michigan LOC) 2,400,000
</TABLE>
TENNESSEE MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(a)SHORT-TERM MUNICIPALS -- CONTINUED
TENNESSEE -- CONTINUED
$ 770,000 Memphis, TN, (Series 1996), 5.00% Bonds, 7/1/1997 $ 775,446
1,000,000 Metropolitan Government Nashville & Davidson County, TN HEFA,
(Series 1989 A), 3.65% CP (Vanderbilt University), Mandatory Tender
1/10/1997 1,000,000
2,500,000 Metropolitan Government Nashville & Davidson County, TN HEFA,
Hospital Revenue Bonds, (Series 1992), 3.60% CP (Baptist Hospital,
Inc. (TN)/(NationsBank, South LIQ), Mandatory Tender 1/21/1997 2,500,000
1,000,000 Metropolitan Government Nashville & Davidson County, TN HEFA,
Hospital Revenue Bonds, (Series 1992), 3.65% CP (Baptist Hospital,
Inc. (TN)/(NationsBank, South LIQ), Mandatory Tender 1/8/1997 1,000,000
2,300,000 Metropolitan Government Nashville & Davidson County, TN IDB,
Metropolitan Government Revenue Bonds, (Series 1995) Weekly
VRDNs (YMCA Projects)/(Nationsbank of Tennessee LOC) 2,300,000
1,700,000 Oak Ridge, TN IDB, Solid Waste Facility Bonds, (Series 1996) Weekly
VRDNs (M4 Environmental L.P. Project)/(SunTrust Bank, Atlanta LOC) 1,700,000
300,000 Paris, TN IDB Weekly VRDNs (Plumley - Marugo Limited)/(PNC
Bank, Kentucky LOC) 300,000
700,000 Roane, TN IDB, (Series 1982), 3.50% (Fortafil Fibers, Inc.
Project)/(ABN AMRO Bank N.V., Amsterdam LOC), 11/15/96 700,000
1,000,000 Shelby County, TN Health Education & Housing Facilities Board,
4.05% TOBs (Methodist Health System, Inc.)/(MBIA INS)/(Sanwa
Bank Ltd, Osaka LIQ), Optional Tender 8/1/1997 1,000,000
1,130,000 Shelby County, TN Health Education & Housing Facilities Board,
9.625% Bonds, (Lebonheur Children's Medical Center)/(United States
Treasury PRF), 7/1/1997 (@100) 1,173,395
1,000,000 Shelby County, TN Health Education & Housing Facilities Board,
Multifamily Housing Revenue Bonds, (Series 1988) Weekly VRDNs
(Arbor Lake Project)/(PNC Bank, N.A. LOC) 1,000,000
800,000 South Pittsburg, TN IDB, (Series 1996) Weekly VRDNs (Lodge
Manufacturing Co. Project)/(SunTrust Bank, Nashville LOC) 800,000
1,000,000 Tennessee Housing Development Agency, (Series 1996-5), 4.00% TOBs,
Mandatory Tender 8/21/1997 1,000,000
</TABLE>
TENNESSEE MUNICIPAL CASH TRUST
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(a)SHORT-TERM MUNICIPALS -- CONTINUED
TENNESSEE -- CONTINUED
$ 1,500,000 Tennessee Housing Development Agency, Homeownership Program
Bonds (Issue 1996-3), 3.85% TOBs, Optional Tender 5/29/1997 $ 1,500,000
2,385,000 Tennessee State School Board Authority, (Series 1996 B), 5.00% Bonds,
5/1/1997 2,398,419
2,000,000 Union City, TN IDB, (Series 1995) Weekly VRDNs (Kohler Co.)/
(Wachovia Bank of Georgia NA, Atlanta LOC) 2,000,000
1,500,000 Union County, TN IDB, (Series 1995) Weekly VRDNs (Cooper
Container Corporation Project)/(SunTrust Bank, Nashville LOC) 1,500,000
735,000 Williamson County, TN, General Obligation Capital Outlay Notes
(Series 1996), 4.60% Bonds, 10/1/1997 740,432
Total 47,072,692
PUERTO RICO -- 2.1%
1,000,000 Puerto Rico Industrial, Tourist, Education, Medical & Environmental
Control Finance Authority, (Series 1994A), 3.80% CP (Inter American
University of Puerto Rico)/(Banque Paribas, Paris LOC), Mandatory
Tender 1/14/1997 1,000,000
GUAM -- 2.1%
1,000,000 Guam Water System Revenue Bonds, (Series 1989), 6.70% Bonds
(Capital Guaranty Corp. INS), 7/1/1997 1,018,234
TOTAL INVESTMENTS (AT AMORTIZED COST)(b) $ 49,090,926
</TABLE>
Securities that are subject to Alternative Minimum Tax represent 58.8% of
the portfolio as calculated based upon total market value.
(a) The Fund may only invest in securities rated in one of the two highest
short-term rating categories by nationally recognized statistical rating
organizations ("NRSROs") or unrated securities of comparable quality. 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 Corporation, MIG-1 or MIG-2 by Moody's
Investors Service, Inc., or FIN-1+, FIN-1 and FIN-2 by Fitch Investors
Service, Inc. are all considered rated one of the two highest short-term
rating securities.
Securities rated in the highest short-term rating category (and unrated
securities of comparable quality) are identified as First Tier securities.
Securities rated in the second highest short-term rating category (and
unrated securities of comparable quality) are identified as Second Tier
securities. The Fund follows application regulations in determining whether
a security is rated and whether a security rated by multiple NRSROs in
different rating categories should be identified as a First or Second Tier
security. At October 31, 1996, the portfolio securities were rated as
follows:
Tier rating percentage based on total market value (unaudited)
<TABLE>
<CAPTION>
FIRST TIER SECOND TIER
<S> <C>
100% 0.00%
</TABLE>
(b) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($47,647,706) at October 31, 1996.
The following acronyms are used throughout this portfolio:
CP -- Commercial Paper
GTD -- Guaranty
HEFA -- Health and Education Facilities Authority
IDB -- Industrial Development Bond
IDRB -- Industrial Development Revenue Bond
INS -- Insured
LIQ -- Liquidity Agreement
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance
PRF -- Prerefunded
TOBs -- Tender Option Bonds
VRDNs -- Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
TENNESSEE MUNICIPAL CASH TRUST
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1996
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $49,090,926
Cash 169,351
Income receivable 260,093
Total assets 49,520,370
LIABILITIES:
Payable for investments purchased $ 1,743,907
Payable for shares redeemed 29,682
Income distribution payable 61,845
Accrued expenses 37,230
Total liabilities 1,872,664
NET ASSETS for 47,647,706 shares outstanding $47,647,706
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SHARES:
$17,823,803 / 17,823,803 shares outstanding $1.00
INSTITUTIONAL SERVICE SHARES:
$29,823,903 / 29,823,903 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
TENNESSEE MUNICIPAL CASH TRUST
STATEMENT OF OPERATIONS
PERIOD ENDED OCTOBER 31, 1996*
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $525,612
EXPENSES:
Investment advisory fee $ 71,830
Administrative personnel and services fee 71,571
Custodian fees 10,324
Transfer and dividend disbursing agent fees and expenses 6,199
Directors'/Trustees' fees 1,379
Legal fees 200
Portfolio accounting fees 26,665
Shareholder services fee -- Institutional Shares 15,852
Shareholder services fee -- Institutional Service Shares 20,063
Share registration costs 14,119
Printing and postage 5,000
Insurance premiums 3,265
Miscellaneous 686
Total expenses 247,153
Waivers and reimbursements --
Waiver of investment advisory fee $ (71,830)
Waiver of shareholder services fee -- Institutional Shares (15,852)
Reimbursement of other operating expenses (121,760)
Total waivers and reimbursements (209,442)
Net expenses 37,711
Net investment income $487,901
</TABLE>
* For the period from May 22, 1996 (date of initial public investment) to
October 31, 1996.
(See Notes which are an integral part of the Financial Statements)
TENNESSEE MUNICIPAL CASH TRUST
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PERIOD ENDED
OCTOBER 31,
1996*
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 487,901
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment income
Institutional Shares (226,076)
Institutional Service Shares (261,825)
Change in net assets resulting from distributions to shareholders (487,901)
SHARE TRANSACTIONS--
Proceeds from sale of shares 165,734,867
Net asset value of shares issued to shareholders in payment of
distributions declared 209,339
Cost of shares redeemed (118,296,500)
Change in net assets resulting from share transactions 47,647,706
Change in net assets 47,647,706
NET ASSETS:
Beginning of period --
End of period $ 47,647,706
</TABLE>
* For the period from May 22, 1996 (date of initial public investment) to
October 31, 1996.
(See Notes which are an integral part of the Financial Statements)
TENNESSEE MUNICIPAL CASH TRUST
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1996
1. ORGANIZATION
Federated Municipal Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "Act") as an open-end, management
investment company. The Trust consists of sixteen portfolios. The financial
statements included herein are only those of Tennessee Municipal Cash Trust
(the "Fund"). The financial statements of the other portfolios are
presented separately. The assets of each portfolio are segregated
and a shareholder's interest is limited to the portfolio in which
shares are held.
The Fund offers two classes of shares: Institutional Shares and
Institutional Service Shares.
The investment objective of the Fund is current income exempt from federal
regular income tax and the personal income tax imposed by the State of
Tennessee consistent with stability of principal and liquidity.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS -- The Fund's use of the amortized cost method to
value its portfolio securities is in accordance with Rule 2a-7 under the
Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS -- Interest income and
expenses are accrued daily. Bond premium and discount, if applicable, are
amortized as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES -- It is the Fund's policy to comply with the provisions of
the Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS -- The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
USE OF ESTIMATES -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses, and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER -- Investment transactions are accounted for on the trade date.
3. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number
of full and fractional shares of beneficial interest (without par value) for
each class of shares. At October 31, 1996, capital paid-in aggregated
$47,647,706.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
PERIOD ENDED
OCTOBER 31,
1996
INSTITUTIONAL SHARES SHARES
<S> <C>
Shares sold 34,644,791
Shares issued to shareholders in payment of distributions declared 3,455
Shares redeemed (16,824,443)
Net change resulting from Institutional Share transactions 17,823,803
</TABLE>
For the period from May 22, 1996 (date of initial public investment) to
October 31, 1996.
<TABLE>
<CAPTION>
PERIOD ENDED
OCTOBER 31,
1996
INSTITUTIONAL SERVICE SHARES SHARES
<S> <C>
Shares sold 131,090,076
Shares issued to shareholders in payment of distributions declared 205,884
Shares redeemed (101,472,057)
Net change resulting from Institutional Service Share transactions 29,823,903
Net change resulting from share transactions 47,647,706
</TABLE>
For the period from May 22, 1996 (date of initial public investment) to
October 31, 1996.
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE -- Federated Management, the Fund's investment
adviser (the "Adviser"), receives for its services an annual investment
advisory fee equal to 0.50% of the Fund's average daily net assets.
The Adviser may voluntarily choose to waive any portion of its fee and/or
reimburse certain operating expenses of the Fund. The Adviser can modify or
terminate this voluntary waiver and/or reimbursement at any time at its sole
discretion.
ADMINISTRATIVE FEE -- Federated Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The fee paid to FServ is based on the level of
average aggregate daily net assets of all funds advised by subsidiaries of
Federated Investors for the period. The administrative fee received during
the period of the Administrative Services Agreement shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE -- Under the terms of a Shareholder Services
Agreement with Federated Shareholder Services ("FSS"), the Fund will pay FSS
up to 0.25% of average daily net assets of the Fund shares for the
period. The fee paid to FSS is used to finance certain services for
shareholders and to maintain shareholder accounts. FSS may voluntarily
choose to waive any portion of its fee. FSS can modify or terminate this
voluntary waiver at any time at its sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES -- FServ, through
its subsidiary, Federated Shareholder Services Company ("FSSC") serves as
transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is
based on the size, type, and number of accounts and transactions made by
shareholders.
PORTFOLIO ACCOUNTING FEES -- FServ maintains the Fund's accounting records
for which it receives a fee. The fee is based on the level of the Fund's
average daily net assets for the period, plus out-of-pocket expenses.
INTERFUND TRANSACTIONS -- During the period ended October 31, 1996, the Fund
engaged in purchase and sale transactions with funds that have a common
investment adviser (or affiliated investment advisers), common
Directors/Trustees, and/or common Officers. These purchase and sale
transactions were made at current market value pursuant to Rule 17a-7 under
the Act amounting to $142,770,000 and $116,525,000, respectively.
GENERAL -- Certain of the Officers and Trustees of the Trust are Officers
and Directors or Trustees of the above companies.
5. CONCENTRATION OF CREDIT RISK
Since the Fund invests a substantial portion of its assets in issuers
located in one state, it will be more susceptible to factors adversely
affecting issuers of that state than would be a comparable tax-exempt
mutual fund that invests nationally. In order to reduce the credit risk
associated with such factors, at October 31, 1996, 16% of the securities
in the portfolio of investments are backed by letters of credit or
bond insurance of various financial institutions and financial
guaranty assurance agencies. The percentage of investments insured by or
supported (backed) by a letter of credit from any one institution or agency
did not exceed 14% of total investments.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees of
FEDERATED MUNICIPAL TRUST
(Tennessee Municipal Cash Trust):
We have audited the accompanying statement of assets and liabilities of
Tennessee Municipal Cash Trust (an investment portfolio of Federated
Municipal Trust, a Massachusetts business trust), including the schedule of
portfolio of investments, as of October 31, 1996 and the related statements of
operations and changes in net assets, and the financial
highlights (see pages 2 and 15 of the prospectus) for the period from May
22, 1996 to October 31, 1996. These financial statements and financial
highlights are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of October 31, 1996, by correspondence with the
custodian and broker. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Tennessee Municipal Cash Trust (an investment portfolio of Federated
Municipal Trust) as of October 31, 1996 and the results of its operations,
changes in its net assets, and the financial highlights for the period, from
May 22, 1996 to October 31, 1996, in conformity with generally accepted
accounting principles.
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania
November 20, 1996
ADDRESSES
Tennessee Municipal Cash Trust
Institutional Service Shares Federated Investors Tower
Pittsburgh, PA 15222-3779
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, PA 15222-3779
Investment Adviser
Federated Management Federated Investors Tower
Pittsburgh, PA 15222-3779
Custodian
State Street Bank and P.O. Box 8600
Trust Company Boston, MA 02266-8600
Transfer Agent and Dividend Disbursing Agent
Federated Shareholder P.O. Box 8600
Services Company Boston, MA 02266-8600
Independent Public Accountants
Arthur Andersen LLP 2100 One PPG Place
Pittsburgh, PA 15222
Tennessee Municipal Cash Trust
(A Portfolio of Federated Municipal Cash Trust)
Institutional Service Shares
Prospectus
A Portfolio of
Federated Municipal Trust,
an Open-End, Management
Investment Company
Prospectus dated December 31, 1996
[Graphic]
Federated Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the fund
and is a subsidiary of Federated Investors.
[Graphic]
Cusip 314229634
G01682-02 (12/96)
TENNESSEE MUNICIPAL CASH TRUST
(A PORTFOLIO OF FEDERATED MUNICIPAL TRUST)
INSTITUTIONAL SHARES
INSTITUTIONAL SERVICE SHARES
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information should be read with the
prospectuses of Tennessee Municipal Cash Trust (the ``Fund'), a
portfolio of Federated Municipal Trust (the ``Trust') dated December
31, 1996. This Statement is not a prospectus. You may request a copy of
a prospectus or a paper copy of this Statement, if you have received it
electronically, free of charge by calling 1-800-341-7400.
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Statement dated December 31, 1996
Federated Securities Corp. is the distributor of the Funds
and is a subsidiary of Federated Investors.
Cusip 314229634
Cusip 314229642
G01682-03 (12/96)
TABLE OF CONTENTS 1
INVESTMENT POLICIES 2
Acceptable Investments 2
Participation Interests 2
Municipal Leases 2
Ratings 2
When-Issued and Delayed Delivery Transactions 2
Repurchase Agreements 3
Reverse Repurchase Agreements 3
Credit Enhancement 3
TENNESSEE INVESTMENT RISKS 3
INVESTMENT LIMITATIONS 4
FEDERATED MUNICIPAL TRUST MANAGEMENT 5
Share Ownership 9
Trustees Compensation 10
Trustee Liability 11
INVESTMENT ADVISORY SERVICES 11
Investment Adviser 11
Advisory Fees 11
BROKERAGE TRANSACTIONS 11
OTHER SERVICES 11
Fund Administration 11
Custodian and Portfolio Accountant 12
Transfer Agent 12
Independent Public Accountants 12
DETERMINING NET ASSET VALUE 12
REDEMPTION IN KIND 13
MASSACHUSETTS PARTNERSHIP LAW 13
THE FUND'S TAX STATUS 13
PERFORMANCE INFORMATION 13
Yield 13
Effective Yield 13
Tax-Equivalent Yield 14
Tax-Equivalency Table 14
Total Return 15
Performance Comparisons 15
Economic and Market Information 15
ABOUT FEDERATED INVESTORS 15
Mutual Fund Market 16
Institutional Clients 16
Trust Organizations 16
Broker/Dealers and Bank Broker/Dealer Subsidiaries 16
APPENDIX 17
INVESTMENT POLICIES
Unless indicated otherwise, the policies described below may be changed by
the Board of Trustees without shareholder approval. Shareholders will be
notified before any material change in these policies becomes effective.
ACCEPTABLE INVESTMENTS
When determining whether a security presents minimal credit risks, the
investment adviser will consider the creditworthiness of: the issuer of the
security; the issuer of any demand feature applicable to the security; or
any guarantor of either the security or any demand feature.
PARTICIPATION INTERESTS
The financial institutions from which the Fund purchases participation
interests frequently provide or secure from another financial institution
irrevocable letters of credit or guarantees and give the Fund the right to
demand payment of the principal amounts of the participation interests plus
accrued interest on short notice (usually within seven days). The municipal
securities subject to the participation interests are not limited to the
Fund's maximum maturity requirements so long as the participation interests
include the right to demand payment from the issuers of those interests. By
purchasing these participation interests, the Fund is buying a security
meeting the maturity and quality requirements of the Fund and also is
receiving the tax-free benefits of the underlying securities.
MUNICIPAL LEASES
The Fund may purchase municipal securities in the form of participation
interests that represent an undivided proportional interest in lease
payments by a governmental or nonprofit entity. The lease payments and
other rights under the lease provide for and secure payments on the
certificates. Lease obligations may be limited by municipal charter or the
nature of the appropriation for the lease. Furthermore, a lease may provide
that the participants cannot accelerate lease obligations upon default. The
participants would only be able to enforce lease payments as they became
due. In the event of a default or failure of appropriation, unless the
participation interests are credit enhanced, it is unlikely that the
participants would be able to obtain an acceptable substitute source of
payment.
In determining the liquidity of municipal lease securities, the investment
adviser, under the authority delegated by the Trustees, will base its
determination on the following factors: whether the lease can be terminated
by the lessee; the potential recovery, if any, from a sale of the leased
property upon termination of the lease; the lessee's general credit
strength (e.g., its debt, administrative, economic and financial
characteristics and prospects); the likelihood that the lessee will
discontinue appropriating funding for the leased property because the
property is no longer deemed essential to its operations (e.g., the
potential for an `event of non-appropriation''); and any credit
enhancement or legal recourse provided upon an event of non-appropriation
or other termination of the lease.
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 F-1+, F-1, or F-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.''
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
These transactions are made to secure what is considered to be an
advantageous price or yield for the Fund. No fees or other expenses, other
than normal transaction costs, are incurred. However, liquid assets of the
Fund in a dollar amount sufficient to make payment for the securities to be
purchased are: segregated on the Fund`s records at the trade date; marked
to market daily; and maintained until the transaction is settled. The Fund
does not intend to engage in when-issued and delayed delivery transactions
to an extent that would cause the segregation of more than 20% of the total
value of its assets.
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. The Fund or its
custodian will take possession of the securities subject to repurchase
agreements, and these securities will be marked to market daily. In the
event that a defaulting seller filed for bankruptcy or became insolvent,
disposition of such securities by the Fund might be delayed pending court
action. The Fund believes that under the regular procedures normally in
effect for custody of the Fund's portfolio securities subject to repurchase
agreements, a court of competent jurisdiction would rule in favor of the
Fund and allow retention or disposition of such securities. The Fund will
only enter into repurchase agreements with banks and other recognized
financial institutions, such as broker/dealers, which are deemed by the
Fund's adviser to be creditworthy pursuant to guidelines established by the
Trustees.
REVERSE REPURCHASE AGREEMENTS
The Fund may also enter into reverse repurchase agreements. These
transactions are similar to borrowing cash. In a reverse repurchase
agreement, the Fund transfers possession of a portfolio instrument in
return for a percentage of the instrument's market value in cash and agrees
that on a stipulated date in the future the Fund will repurchase the
portfolio instrument by remitting the original consideration plus interest
at an agreed upon rate. The use of reverse repurchase agreements may enable
the Fund to avoid selling portfolio instruments at a time when a sale may
be deemed to be disadvantageous, but does not ensure this result. However,
liquid assets of the Fund, in a dollar amount sufficient to make payment
for the securities to be purchased, are: segregated on the Fund's records
at the trade date; marked to market daily; and maintained until the
transaction is settled.
CREDIT ENHANCEMENT
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. 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 Fund may have more than 25% of its total assets invested in securities
credit enhanced by banks.
TENNESSEE INVESTMENT RISKS
Traditionally divided into three geographic regions, the State's economy
has historically been dominated by agriculture in the west, manufacturing
in the east, and government in the middle region. While trade and services
have replaced agriculture in terms of total output, manufacturing continues
to be the largest single sector of the economy. The decision by Nissan and
Daikin Drivetrain to build automobile production facilities in the state
suggests that manufacturing, with its inherent susceptibility to economic
downturns, will continue to dominate.
The state's attention to educational reform and transportation
infrastructure have led to statewide business development. Total
employment in 1995 grew by 2.9% following a health 4% in 1994. Projections
indicate that employment will continue to grow by 1.7% through 1997.
The constitution of the state requires a balanced budget. This constrain
along with relatively low debt and expenditure per capita ratios has helped
the state maintain its current high quality long term bond rating of AA+ by
Standard and Poor's Rating Agency and Aaa by Moody's Inverstors Service
Inc.
The Fund's concentration in securities issued by the state and its
political subdivisions provide a greter level of risk than a fund which is
deiversified across a number of states and municipal entities. The ability
of the state or its municipalities to meet their obligations will depend on
the availability of tax and other revenues; economic, political, and
demographic conditions within the state; and the underlying fiscal
condition of the state, its counties, and its municipalities.
INVESTMENT LIMITATIONS
The following investment limitations are fundamental (except that no
investment limitation of the Fund shall prevent the Fund from investing
substantially all of its assets (except for assets which are not considered
`investment securities'' under the Investment Company Act of 1940, or
assets exempted by the SEC) in an open-end investment company with
substantially the same investment objectives):
SELLING SHORT AND BUYING ON MARGIN
The Fund will not sell any securities short or purchase any securities
on margin but may obtain such short-term credits as are necessary for
clearance of transactions.
ISSUING SENIOR SECURITIES AND BORROWING MONEY
The Fund will not issue senior securities except that the Fund may
borrow money directly or through reverse repurchase agreements in
amounts up to one-third of the value of its total assets, including
the amounts borrowed.
The Fund will not borrow money or engage in reverse repurchase
agreements for investment leverage, but rather as a temporary,
extraordinary, or emergency measure or to facilitate management of the
portfolio by enabling the Fund to meet redemption requests when the
liquidation of portfolio securities is deemed to be inconvenient or
disadvantageous. The Fund will not purchase any securities while
borrowings in excess of 5% of its total assets are outstanding.
PLEDGING ASSETS
The Fund will not mortgage, pledge, or hypothecate any assets except
as necessary to secure permitted borrowings. In those cases, it may
pledge assets having a market value not exceeding the lesser of the
dollar amounts borrowed or 15% of the value of total assets at the
time of the pledge.
LENDING CASH OR SECURITIES
The Fund will not lend any of its assets, except that it may acquire
publicly or nonpublicly issued Tennessee municipal securities or
temporary investments or enter into repurchase agreements, in
accordance with its investment objective, policies and limitations or
the Trust's Declaration of Trust.
INVESTING IN COMMODITIES
The Fund will not purchase or sell commodities, commodity contracts,
or commodity futures contracts.
INVESTING IN RESTRICTED SECURITIES
The Fund will not invest more than 10% of its net assets in securities
subject to restrictions on resale under the Securities Act of 1933,
except for certain restricted securities which meet the criteria for
liquidity as established by the Board of Trustees.
INVESTING IN REAL ESTATE
The Fund will not purchase or sell real estate, or real estate limited
partnerships, although it may invest in securities of issuers whose
business involves the purchase or sale of real estate or in securities
which are secured by real estate or interests in real estate.
UNDERWRITING
The Fund will not underwrite any issue of securities, except as it may
be deemed to be an underwriter under the Securities Act of 1933 in
connection with the sale of securities in accordance with its
investment objective, policies, and limitations.
CONCENTRATION OF INVESTMENTS
The Fund will not purchase securities if, as a result of such
purchase, 25% or more of the value of its total assets would be
invested in any one industry or in industrial development bonds or
other securities the interest upon which is paid from revenues of
similar types of projects. However, the Fund may invest as temporary
investments more than 25% of the value of its assets in cash or cash
items, securities issued or guaranteed by the U.S. government, its
agencies or instrumentalities, or instruments secured by these money
market instruments, such as repurchase agreements.
The above investment limitations cannot be changed without shareholder
approval. The following limitations, however, may be changed by the
Trustees without shareholder approval (except that no investment limitation
of the Fund shall prevent the Fund from investing substantially all of its
assets (except for assets which are not considered `investment
securities''under the Investment Company Act of 1940, or assets exempted
by the SEC) in an open-end investment company with substantially the same
investment objectives). Shareholders will be notified before any material
change in these limitations becomes effective.
INVESTING IN ILLIQUID SECURITIES
The Fund will not invest more than 10% of the value of its net assets
in illiquid securities including repurchase agreements providing for
settlement in more than seven days notice.
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
The Fund will not purchase securities of other investment companies,
except as part of a merger, consolidation, or other acquisition.
INVESTING FOR CONTROL
The Fund will not invest in securities of a company for the purpose of
exercising control or management.
INVESTING IN OPTIONS
The Fund will not invest in puts, calls, straddles, spreads, or any
combination of them.
For purposes of the above limitations, the Fund considers certificates of
deposit and demand and time deposits issued by a U.S. branch of a domestic
bank or savings association having capital, surplus, and undivided profits
in excess of $100,000,000 at the time of investment to be `cash items.''
Except with respect to borrowing money, if a percentage limitation is
adhered to at the time of investment, a later increase or decrease in
percentage resulting from any change in value or net assets will not result
in a violation of such limitation.
The Fund did not borrow money or pledge securities in excess of 5% of the
value of its net assets during the last fiscal year and has no present
intent to do so during the coming fiscal year.
REGULATORY COMPLIANCE
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in
the prospectus and this 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. 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.
FEDERATED MUNICIPAL TRUST MANAGEMENT
Officers and Trustees are listed with their addresses, birthdates, present
positions with Federated Municipal Trust, and principal occupations.
John F. Donahue@*
Federated Investors Tower
Pittsburgh, PA
Birthdate: July 28, 1924
Chairman and Trustee
Chairman and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; Chairman and Director, Federated
Research Corp. and Federated Global Research Corp.; Chairman, Passport
Research, Ltd.; Chief Executive Officer and Director or Trustee of the
Funds.
Thomas G. Bigley
28th Floor, One Oxford Centre
Pittsburgh, PA
Birthdate: February 3, 1934
Trustee
Chairman of the Board, Children's Hospital of Pittsburgh; formerly, Senior
Partner, Ernst & Young LLP; Director, MED 3000 Group, Inc.; Trustee,
University of Pittsburgh; Director or Trustee of the Funds.
John T. Conroy, Jr.
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL
Birthdate: June 23, 1937
Trustee
President, Investment Properties Corporation; Senior Vice-President, John
R. Wood and Associates, Inc., Realtors; Partner or Trustee in private real
estate ventures in Southwest Florida; formerly, President, Naples Property
Management, Inc. and Northgate Village Development Corporation; Director or
Trustee of the Funds.
William J. Copeland
One PNC Plaza - 23rd Floor
Pittsburgh, PA
Birthdate: July 4, 1918
Trustee
Director and Member of the Executive Committee, Michael Baker, Inc.;
formerly, Vice Chairman and Director, PNC Bank, N.A., and PNC Bank Corp.;
Director, Ryan Homes, Inc.; Director or Trustee of the Funds.
James E. Dowd
571 Hayward Mill Road
Concord, MA
Birthdate: May 18, 1922
Trustee
Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director or
Trustee of the Funds.
Lawrence D. Ellis, M.D.*
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA
Birthdate: October 11, 1932
Trustee
Professor of Medicine, University of Pittsburgh; Medical Director,
University of Pittsburgh Medical Center - Downtown; Member, Board of
Directors, University of Pittsburgh Medical Center; formerly, Hematologist,
Oncologist, and Internist, Presbyterian and Montefiore Hospitals; Director
or Trustee of the Funds.
Edward L. Flaherty, Jr.@
Miller, Ament, Henny & Kochuba
205 Ross Street
Pittsburgh, PA
Birthdate: June 18, 1924
Trustee
Attorney of Counsel, Miller, Ament, Henny & Kochuba; Director, Eat'N Park
Restaurants, Inc.; formerly, Counsel, Horizon Financial, F.A., Western
Region; Director or Trustee of the Funds.
Glen R. Johnson*
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 2, 1929
President and Trustee
Trustee, Federated Investors; President and/or Trustee of some of the
Funds; staff member, Federated Securities Corp.
Peter E. Madden
One Royal Palm Way
100 Royal Palm Way
Palm Beach, FL
Birthdate: March 16, 1942
Trustee
Consultant; Former State Representative, Commonwealth of Massachusetts;
formerly, President, State Street Bank and Trust Company and State Street
Boston Corporation; Director or Trustee of the Funds.
Gregor F. Meyer
Miller, Ament, Henny & Kochuba
205 Ross Street
Pittsburgh, PA
Birthdate: October 6, 1926
Trustee
Attorney, Member of Miller, Ament, Henny & Kochuba; Chairman, Meritcare,
Inc.; Director, Eat'N Park Restaurants, Inc.; Director or Trustee of the
Funds.
John E. Murray, Jr., J.D., S.J.D.
President, Duquesne University
Pittsburgh, PA
Birthdate: December 20, 1932
Trustee
President, Law Professor, Duquesne University; Consulting Partner, Mollica,
Murray and Hogue; Director or Trustee of the Funds.
Wesley W. Posvar
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA
Birthdate: September 14, 1925
Trustee
Professor, International Politics; Management Consultant; Trustee, Carnegie
Endowment for International Peace, RAND Corporation, Online Computer
Library Center, Inc., National Defense University, U.S. Space Foundation
and Czech Management Center; President Emeritus, University of Pittsburgh;
Founding Chairman, National Advisory Council for Environmental Policy and
Technology, Federal Emergency Management Advisory Board and Czech
Management Center; Director or Trustee of the Funds.
Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA
Birthdate: June 21, 1935
Trustee
Public relations/Marketing/Conference Planning, Manchester Craftsmen's
Guild; Restaurant Consultant, Frick Art & History Center; Conference
Coordinator, University of Pittsburgh Art History Department; Director or
Trustee of the Funds.
J. Christopher Donahue
Federated Investors Tower
Pittsburgh, PA
Birthdate: April 11, 1949
Executive Vice President
President and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; President and Director, Federated
Research Corp. and Federated Global Research Corp.; President, Passport
Research, Ltd.; Trustee, Federated Shareholder Services Company, and
Federated Shareholder Services; Director, Federated Services Company;
President or Executive Vice President of the Funds; Director or Trustee of
some of the Funds. Mr. Donahue is the son of John F. Donahue, Chairman and
Trustee of the Company.
Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
Executive Vice President
Vice Chairman, Treasurer, and Trustee, Federated Investors; Vice President,
Federated Advisers, Federated Management, Federated Research, Federated
Research Corp., Federated Global Research Corp. and Passport Research,
Ltd.; Executive Vice President and Director, Federated Securities Corp.;
Trustee, Federated Shareholder Services Company; Trustee or Director of
some of the Funds; President, Executive Vice President and Treasurer of
some of the Funds.
John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 26, 1938
Executive Vice President , Secretary and Treasurer
Executive Vice President, Secretary, and Trustee, Federated Investors;
Trustee, Federated Advisers, Federated Management, and Federated Research;
Director, Federated Research Corp. and Federated Global Research Corp.;
Trustee, Federated Shareholder Services Company; Director, Federated
Services Company; President and Trustee, Federated Shareholder Services;
Director, Federated Securities Corp.; Executive Vice President and
Secretary of the Funds; Treasurer of some of the Funds.
Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 17, 1923
Vice President
Executive Vice President and Trustee, Federated Investors; Chairman and
Director, Federated Securities Corp.; President or Vice President of some
of the Funds; Director or Trustee of some of the Funds.
*This Trustee is deemed to be an ``interested person'' as defined in
the Investment Company Act of 1940.
@Member of the Executive Committee. The Executive Committee of the
Board of Trustees handles the responsibilities of the Board between
meetings of the Board.
As referred to in the list of Trustees and Officers, `Funds'' includes the
following investment companies: 111 Corcoran Funds; Annuity Management
Series; Arrow Funds; Automated Government Money Trust; Blanchard Funds;
Blanchard Precious Metals Fund, Inc.; Cash Trust Series II; Cash Trust
Series, Inc. ; DG Investor Series; Edward D. Jones & Co. Daily Passport
Cash Trust; Federated Adjustable Rate U.S. Government Fund, Inc.; Federated
American Leaders Fund, Inc.; Federated ARMs Fund; Federated Equity Funds;
Federated Equity Income Fund, Inc.; Federated Fund for U.S. Government
Securities, Inc.; Federated GNMA Trust; Federated Government Income
Securities, Inc.; Federated Government Trust; Federated High Income Bond
Fund, Inc.; Federated High Yield Trust; Federated Income Securities Trust;
Federated Income Trust; Federated Index Trust; Federated Institutional
Trust; Federated Insurance Series; Federated Investment Portfolios;
Federated Investment Trust; Federated Master Trust; Federated Municipal
Opportunities Fund, Inc.; Federated Municipal Securities Fund, Inc.;
Federated Municipal Trust; Federated Short-Term Municipal Trust; Federated
Short-Term U.S. Government Trust; Federated Stock and Bond Fund, Inc.;
Federated Stock Trust; Federated Tax-Free Trust; Federated Total Return
Series, Inc.; Federated U.S. Government Bond Fund; Federated U.S.
Government Securities Fund: 1-3 Years; Federated U.S. Government Securities
Fund: 2-5 Years; Federated U.S. Government Securities Fund: 5-10 Years;
Federated Utility Fund, Inc.; First Priority Funds; Fixed Income
Securities, Inc.; High Yield Cash Trust; Intermediate Municipal Trust;
International Series, Inc.; Investment Series Funds, Inc.; Investment
Series Trust; Liberty Term Trust, Inc. - 1999; Liberty U.S. Government
Money Market Trust; Liquid Cash Trust; Managed Series Trust; Money Market
Management, Inc.; Money Market Obligations Trust; Money Market Trust;
Municipal Securities Income Trust; Newpoint Funds; Peachtree Funds; RIMCO
Monument Funds; Targeted Duration Trust; Tax-Free Instruments Trust; The
Planters Funds; The Starburst Funds; The Starburst Funds II; The Virtus
Funds; Trust for Financial Institutions; Trust for Government Cash
Reserves; Trust for Short-Term U.S. Government Securities; Trust for U.S.
Treasury Obligations; and World Investment Series, Inc.
SHARE OWNERSHIP
Officers and Trustees as a group own less than 1% of the Fund`s outstanding
shares.
As of November 5, 1996, the following shareholders of record owned 5% or
more of the outstanding Institutional Shares of the Tennessee Municipal
Cash Trust: Union Planters National Bank owned approximately 3,036,954
shares (22.92%); Reep & Co. owned approximately 713,944 shares (5.39%);
Senabco owned approximately 742,635 shares (5.60%); Sharp Market & Company
owned approximately 2,423,400 shares (18.29%); Trust Company of Knoxville
owned approximately 4,519,396 shares (34.10%); David & Co. owned
approximately 962,698 shares (7.26%); and The Nichols Family Partnership LP
owned approximately 765,637 shares (5.78%).
As of November 5, 1996, the following shareholders of record owned 5% or
more of the outstanding Institutional Service Shares of Tennessee Municipal
Cash Trust: Berman Family Investment Corp. owned approximately 12,997,052
shares (37.52%); Union Planters National Bank owned approximately 4,465,767
shares (12.89%); Okeena & Co. owned approximately 3,357,834 shares (9.69%);
Dent, Thompson owned approximately 1,941,080 shares (5.60%); Derril Reeves
owned approximately 2,047,520 shares (5.91%); and BHC Securities, Inc.
owned approximately 2,561,401 shares (7.40%).
TRUSTEES COMPENSATION
AGGREGATE
NAME , COMPENSATION
POSITION WITH FROM TOTAL COMPENSATION PAID
TRUST TRUST*# FROM FUND COMPLEX +
John F. Donahue $0 $0 for the Trust and
Chairman and Trustee 54 other investment companies in the
Fund Complex
Thomas G. Bigley++ $3,611 $86,331 for the Trust and
Trustee 54 other investment companies in the
Fund Complex
John T. Conroy, Jr. $3,934 $115,760 for the Trust and
Trustee 54 other investment companies in the
Fund Complex
William J. Copeland $3,934 $115,760 for the Trust and
Trustee 54 other investment companies in the
Fund Complex
Glen R. Johnson $0 $0 for the Trust and
President and Trustee 14 other investment companies in the
Fund Complex
James E. Dowd $3,934 $115,760 for the Trust and
Trustee 54 other investment companies in the
Fund Complex
Lawrence D. Ellis, M.D. $3,611 $104,898 for the Trust and
Trustee 54 other investment companies in the
Fund Complex
Edward L. Flaherty, Jr. $3,934 $115,760 for the Trust and
Trustee 54 other investment companies in the
Fund Complex
Peter E. Madden $3,611 $104,898 for the Trust and
Trustee 54 other investment companies in the
Fund Complex
Gregor F. Meyer $3,611 $104,898 for the Trust and
Trustee 54 other investment companies in the
Fund Complex
John E. Murray, Jr., $3,611 $104,898 for the Trust and
Trustee 54 other investment companies in the
Fund Complex
Wesley W. Posvar $3,611 $104,898 for the Trust and
Trustee 54 other investment companies in the
Fund Complex
Marjorie P. Smuts $3,611 $104,898 for the Trust and
Trustee 54 other investment companies in the
Fund Complex
*Information is furnished for the fiscal year ended October 31, 1996.
#The aggregate compensation is provided for the Trust which is comprised of
16 portfolios.
+The information is provided for the last calendar year.
++ Mr. Bigley served on 39 investment companies in the Federated Funds
complex from January 1 through September 30, 1995. On October 1, 1995, he
was appointed a Trustee on 15 additional Federated Funds.
TRUSTEE LIABILITY
The Declaration of Trust provides that the Trustees will not be liable for
errors of judgment or mistakes of fact or law. However, they are not
protected against any liability to which they would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of their office.
INVESTMENT ADVISORY SERVICES
INVESTMENT ADVISER
The Fund's investment adviser is Federated Management. It is a subsidiary
of Federated Investors. All the voting securities of Federated Investors
are owned by a trust, the trustees of which are John F. Donahue, his wife
and his son, J. Christopher Donahue.
The adviser shall not be liable to the Trust, the Fund, or any shareholder
of the Fund for any losses that may be sustained in the purchase, holding,
or sale of any security or for anything done or omitted by it, except acts
or omissions involving willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties imposed upon it by its contract with the
Trust.
ADVISORY FEES
For its advisory services, Federated Management receives an annual
investment advisory fee as described in the prospectus. For the period from
May 22, 1996 (date of initial public investment) through October 31, 1996,
the adviser earned $71, 830 all of which was waived.
BROKERAGE TRANSACTIONS
When selecting brokers and dealers to handle the purchase and sale of
portfolio instruments, the adviser looks for prompt execution of the order
at a favorable price. In working with dealers, the adviser will generally
use those who are recognized dealers in specific portfolio instruments,
except when a better price and execution of the order can be obtained
elsewhere. The adviser makes decisions on portfolio transactions and
selects brokers and dealers subject to guidelines established by the
Trustees. The adviser may select brokers and dealers who offer brokerage
and research services. These services may be furnished directly to the Fund
or to the adviser and may include: advice as to the advisability of
investing in securities; security analysis and reports; economic studies;
industry studies; receipt of quotations for portfolio evaluations; and
similar services. Research services provided by brokers and dealers may be
used by the adviser or its affiliates in advising the Fund and other
accounts. To the extent that receipt of these services may supplant
services for which the adviser or its affiliates might otherwise have paid,
it would tend to reduce their expenses. The adviser and its affiliates
exercise reasonable business judgment in selecting brokers who offer
brokerage and research services to execute securities transactions. They
determine in good faith that commissions charged by such persons are
reasonable in relationship to the value of the brokerage and research
services provided. For the period from May 22, 1996 (date of initial public
investment) through October 31, 1996, the Fund paid no brokerage
commissions.
Although investment decisions for the Fund are made independently from
those of the other accounts managed by the adviser, investments of the type
the Fund may make may also be made by those other accounts. When the Fund
and one or more other accounts managed by the adviser are prepared to
invest in, or desire to dispose of, the same security, available
investments or opportunities for sales will be allocated in a manner
believed by the adviser to be equitable to each. In some cases, this
procedure may adversely affect the price paid or received by the Fund or
the size of the position obtained or disposed of by the Fund. In other
cases, however, it is believed that coordination and the ability to
participate in volume transactions will be to the benefit of the Fund.
OTHER SERVICES
FUND ADMINISTRATION
Federated Services Company, a subsidiary of Federated Investors, provides
administrative personnel and services to the Fund for a fee as described in
the prospectus. From March 1, 1994 to March 1, 1996, Federated
Administrative Services served as the Fund's Administrator. Prior to March
1, 1994, Federated Administrative Services, Inc. served as the Fund's
Administrator. Both former Administrators are subsidiaries of Federated
Investors. For purposes of this Statement of Additional Information,
Federated Services Company and Federated Administrative Services, Inc. may
hereinafter collectively be referred to as the `Administrators.'' For the
period from May 22, 1996 (date of initial public investment) through
October 31, 1996, the Administrators earned $71,571.
CUSTODIAN AND PORTFOLIO ACCOUNTANT
State Street Bank and Trust Company, Boston, MA, is custodian for the
securities and cash of the Fund. Federated Services Company, Pittsburgh,
PA, provides certain accounting and recordkeeping services with respect to
the Fund's portfolio investments. The fee paid for this service is based
upon the level of the Fund's average net assets for the period plus out-of-
pocket expenses.
TRANSFER AGENT
Federated Services Company, through its registered transfer agent,
Federated Shareholder Services Company, maintains all necessary shareholder
records. For its services, the transfer agent receives a fee based on the
size, type, and number of accounts and transactions made by shareholders.
INDEPENDENT PUBLIC ACCOUNTANTS
The independent public accountants for the Fund are Arthur Andersen LLP,
Pittsburgh, PA.
SHAREHOLDER SERVICES
This arrangement permits the payment of fees to Federated Shareholder
Services to cause services to be provided which are necessary for the
maintenance of shareholder accounts and to encourage personal services to
shareholders by a representative who has knowledge of the shareholder's
particular circumstances and goals. These activities and services may
include, but are not limited to: providing office space, equipment,
telephone facilities, and various clerical, supervisory, computer, and
other personnel as necessary or beneficial to establish and maintain
shareholder accounts and records; processing purchase and redemption
transactions and automatic investments of client account cash balances;
answering routine client inquiries; and assisting clients in changing
dividend options, account designations, and addresses. By adopting the
Shareholder Services Agreement, the Trustees expect that the Fund will
benefit by: (1) providing personal services to shareholders; (2) investing
shareholder assets with a minimum of delay and administrative detail;
(3) enhancing shareholder recordkeeping systems; and (4) responding
promptly to shareholders' requests and inquiries concerning their accounts.
For the fiscal year ending October 31, 1996, payments in the amount of
$15,852 and $20,063 were made pursuant to the Shareholder Services
Agreement for Institutional Shares and Institutional Service Shares,
respectively, of which $15,852 was waived for Institutional Shares.
DETERMINING NET ASSET VALUE
The Trustees have decided that the best method for determining the value of
portfolio instruments is amortized cost. Under this method, portfolio
instruments are valued at the acquisition cost as adjusted for amortization
of premium or accumulation of discount rather than at current market value.
Accordingly, neither the amount of daily income nor the net asset value is
affected by any unrealized appreciation or depreciation of the portfolio.
In periods of declining interest rates, the indicated daily yield on shares
of the Fund computed by dividing the annualized daily income on the Fund's
portfolio by the net asset value computed as above may tend to be higher
than a similar computation made by using a method of valuation based upon
market prices and estimates. In periods of rising interest rates, the
opposite may be true.
The Fund's use of the amortized cost method of valuing portfolio
instruments depends on its compliance with certain conditions in Rule 2a-7
(the `Rule'') promulgated by the Securities and Exchange Commission under
the Investment Company Act of 1940. Under the Rule, the Trustees must
establish procedures reasonably designed to stabilize the net asset value
per share, as computed for purposes of distribution and redemption, at
$1.00 per share, taking into account current market conditions and the
Fund's investment objective. The procedures include monitoring the
relationship between the amortized cost value per share and the net asset
value per share based upon available indications of market value. The
Trustees will decide what, if any, steps should be taken if there is a
difference of more than 0.5 of 1% between the two values. The Trustees will
take any steps they consider appropriate (such as redemption in kind or
shortening the average portfolio maturity) to minimize any material
dilution or other unfair results arising from differences between the two
methods of determining net asset value.
REDEMPTION IN KIND
The Fund is obligated to redeem shares solely in cash up to $250,000 or 1%
of the Fund's net asset value, whichever is less, for any one shareholder
within a 90-day period. Any redemption beyond this amount will also be in
cash unless the Trustees determine that further payments should be in kind.
In such cases, the Fund will pay all or a portion of the remainder of the
redemption in portfolio instruments valued in the same way as the Fund
determines net asset value. The portfolio instruments will be selected in a
manner that the Trustees deem fair and equitable. Redemption in kind is
not as liquid as a cash redemption. If redemption is made in kind,
shareholders who sell these securities could receive less than the
redemption value and could incur certain transaction costs.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect
its shareholders, the Trust has filed legal documents with Massachusetts
that expressly disclaim the liability of its shareholders for acts or
obligations of the Trust. These documents require notice of this disclaimer
to be given in each agreement, obligation, or instrument the Trust or its
Trustees enter into or sign.
In the unlikely event a shareholder is held personally liable for the
Trust's obligations, the Trust is required by the Declaration of Trust to
use its property to protect or compensate the shareholder. On request, the
Trust will defend any claim made and pay any judgment against a shareholder
for any act or obligation of the Trust. Therefore, financial loss resulting
from liability as a shareholder will occur only if the Trust itself cannot
meet its obligations to indemnify shareholders and pay judgments against
them.
THE FUND'S TAX STATUS
To qualify for the special tax treatment afforded to regulated investment
companies, the Fund must, among other requirements: derive at least 90%
of its gross income from dividends, interest, and gains from the sale of
securities; derive less than 30% of its gross income from the sale of
securities held less than three months; invest in securities within certain
statutory limits; and distribute to its shareholders at least 90% of its
net income earned during the year.
PERFORMANCE INFORMATION
Performance depends upon such variables as: portfolio quality; average
portfolio maturity; type of instruments in which the portfolio is invested;
changes in interest rates; changes in expenses; and the relative amount of
cash flow. To the extent that financial institutions and broker/dealers
charge fees in connection with services provided in conjunction with an
investment in shares of the Fund, the performance will be reduced for those
shareholders paying those fees.
YIELD
The yield is calculated based upon the seven days ending on the day of the
calculation, called the `base period.'' This yield is computed by:
determining the net change in the value of a hypothetical account with a
balance of one share at the beginning of the base period, with the net
change excluding capital changes but including the value of any additional
shares purchased with dividends earned from the original one share and all
dividends declared on the original and any purchased shares; dividing the
net change in the account's value by the value of the account at the
beginning of the base period to determine the base period return; and
multiplying the base period return by 365/7.
For the seven-day period ended October 31, 1996, the yields for
Institutional Shares and Institutional Service Shares were 3.30% and 3.05%,
respectively.
EFFECTIVE YIELD
The effective yield is calculated by compounding the unannualized base
period return by: adding 1 to the base period return; raising the sum to
the 365/7th power; and subtracting 1 from the result.
For the seven-day period ended October 31, 1996, the effective yield for
Institutional Shares and Institutional Service Shares were 3.35% and 3.10%,
respectively.
TAX-EQUIVALENT YIELD
The tax-equivalent yield of the Fund is calculated similarly to the yield
but is adjusted to reflect the taxable yield that the Fund would have had
to earn to equal its actual yield, assuming 45.60% tax rate (the maximum
combined effective federal and state rate for individuals) and assuming
that the income is 100% tax exempt.
For the seven-day period ended October 31, 1996, the tax-equivalent yield
for Institutional Shares and Institutional Service Shares were 6.07% and
5.60%, respectively.
TAX-EQUIVALENCY TABLE
A tax-equivalency table may be used in advertising and sales literature.
The interest earned by the municipal securities in the Fund's portfolio
generally remains free from federal regular income tax,* and is often free
from state and local taxes as well. As the table below indicates, a `tax-
free''investment can be an attractive choice for investors, particularly
in times of narrow spreads between tax-free and taxable yields.
TAXABLE YIELD EQUIVALENT FOR 1996
STATE OF TENNESSEE
TAX BRACKET:
FEDERAL 15.00% 28.00% 31.00% 36.00% 39.60%
COMBINED FEDERAL
AND STATE 21.00% 34.00% 37.00% 42.00% 45.60%
JOINT $1- $40,101- $96,901- $147,701- OVER
RETURN 40,100 96,900 147,700 263,750 $263,750
SINGLE $1- $24,001- $58,151- $121,301- OVER
RETURN 24,000 58,150 121,300 263,750 $263,750
TAX-EXEMPT
YIELD TAXABLE YIELD EQUIVALENT
1.50% 1.90% 2.27% 2.38% 2.59% 2.76%
2.00% 2.53% 3.03% 3.17% 3.45% 3.68%
2.50% 3.16% 3.79% 3.97% 4.31% 4.60%
3.00% 3.80% 4.55% 4.76% 5.17% 5.51%
3.50% 4.43% 5.30% 5.56% 6.03% 6.43%
4.00% 5.06% 6.06% 6.35% 6.90% 7.35%
4.50% 5.70% 6.82% 7.14% 7.76% 8.27%
5.00% 6.33% 7.58% 7.94% 8.62% 9.19%
5.50% 6.96% 8.33% 8.73% 9.48% 10.11%
6.00% 7.59% 9.09% 9.52% 10.34% 11.03%
Note: The maximum marginal tax rate for each bracket was used in
calculating the taxable yield equivalent. Furthermore, additional
state and local taxes paid on comparable taxable investments were not
used to increase federal deductions.
The chart above is for illustrative purposes only. It is not an indicator
of past or future performance of the Fund.
* Some portion of the Fund's income may be subject to the federal
alternative minimum tax and state and local taxes.
TOTAL RETURN
Average annual total return is the average compounded rate of return for a
given period that would equate a $1,000 initial investment to the ending
redeemable value of that investment. The ending redeemable value is
computed by multiplying the number of shares owned at the end of the period
by the net asset value per share at the end of the period. The number of
shares owned at the end of the period is based on the number of shares
purchased at the beginning of the period with $1,000, adjusted over the
period by any additional shares, assuming the monthly reinvestment of all
dividends and distributions.
Cumulative total return reflects the total performance over a specific
period of time. For the period from May 22, 1996 (date of initial public
investment) through October 31, 1996, the cumulative total return for
Institutional Shares was 1.59% and for Institutional Service Shares was
1.48%. These total returns are representative of only five months of
activity since the date of initial public investment.
PERFORMANCE COMPARISONS
Investors may use financial publications and/or indices to obtain a more
complete view of the Fund's performance. When comparing performance,
investors should consider all relevant factors such as the composition of
any index used, prevailing market conditions, portfolio compositions of
other funds, and methods used to value portfolio securities and compute
offering price. The financial publications and/or indices which the Fund
uses in advertising may include:
OLIPPER ANALYTICAL SERVICES, INC., ranks funds in various fund
categories based on total return, which assumes the reinvestment of
all income dividends and capital gains distributions, if any.
oIBC/DONOGHUE'S MONEY FUND REPORT publishes annualized yields of
money market funds weekly. Donoghue's Money Market Insight
publication reports monthly and 12-month-to-date investment results
for the same money funds.
oMONEY, a monthly magazine, regularly ranks money market funds in
various categories based on the latest available seven-day effective
yield.
Advertising and other promotional literature may include charts, graphs and
other illustrations using the Fund`s returns, or returns in general, that
demonstrate basic investment concepts such as tax-deferred compounding,
dollar-cost averaging and systematic investment. In addition, the Fund can
compare its performance, or performance for the types of securities in
which it invests, to a variety of other investments, such as bank savings
accounts, certificates of deposit, and Treasury bills.
ECONOMIC AND MARKET INFORMATION
Advertising and sales literature for the Fund may include discussions of
economic, financial and political developments and their effect on the
securities market. Such discussions may take the form of commentary on
these developments by the Fund portfolio mangers and their views and
analysis on how such developments could affect the Funds. In addition,
advertising and sales literature may quote statistics and give general
information about the mutual fund industry, including growth of the
industry, from sources such as the Investment Company Institute.
ABOUT FEDERATED INVESTORS
Federated Investors is dedicated to meeting investor needs which is
reflected in its investment decision making-structured, straightforward,
and consistent. This has resulted in a history of competitive performance
with a range of competitive investment products that have gained the
confidence of thousands of clients and their customers.
The company's disciplined security selection process is firmly rooted in
sound methodologies backed by fundamental and technical research.
Investment decisions are made and executed by teams of portfolio managers,
analysts, and traders dedicated to specific market sectors. These traders
handle trillions of dollars in annual trading volume.
In the money market sector, Federated Investors gained prominence in the
mutual fund industry in 1974 with the creation of the first institutional
money market fund. Simultaneously, the company pioneered the use of the
amortized cost method of accounting for valuing shares of money market
funds, a principal means used by money managers today to value money market
fund shares. Other innovations include the first institutional tax-free
money market fund. As of December 31, 1995, Federated Investors managed
more than $40.2 billion in assets across approximately 47 money market
funds, including 17 government, 10 prime and 20 municipal with assets
approximating $20.9 billion, $11.5 billion and $7.8 billion, respectively.
J. Thomas Madden, Executive Vice President, oversees Federated Investors'
equity and high yield corporate bond management while William D. Dawson,
Executive Vice President, oversees Federated Investors' domestic fixed
income management. Henry A. Frantzen, Executive Vice President, oversees
the management of Federated Investors' international portfolios.
MUTUAL FUND MARKET
Twenty-seven percent of American households are pursuing their financial
goals through mutual funds. These investors, as well as businesses and
institutions, have entrusted over $3 trillion to the more than 5,500 funds
available.*
Federated Investors, through its subsidiaries, distributes mutual funds for
a variety of investment applications. Specific markets include:
INSTITUTIONAL CLIENTS
Federated Investors meets the needs of more than 4,000 institutional
clients nationwide by managing and servicing separate accounts and mutual
funds for a variety of applications, including defined benefit and defined
contribution programs, cash management, and asset/liability management.
Institutional clients include corporations, pension funds, tax-exempt
entities, foundations/endowments, insurance companies, and investment and
financial advisors. The marketing effort to these institutional clients is
headed by John B. Fisher, President, Institutional Sales Division.
TRUST ORGANIZATIONS
Other institutional clients include close relationships with more than
1,500 banks and trust organizations. Virtually all of the trust divisions
of the top 100 bank holding companies use Federated funds in their clients'
portfolios. The marketing effort to trust clients is headed by Mark R.
Gensheimer, Executive Vice President, Bank Marketing & Sales.
BROKER/DEALERS AND BANK BROKER/DEALER SUBSIDIARIES
Federated funds are available to consumers through major brokerage firms
nationwide--including 200 New York Stock Exchange firms--supported by more
wholesalers than any other mutual fund distributor. Federated's service to
financial professionals and institutions has earned it high ratings in
several surveys performed by DALBAR, Inc. DALBAR is recognized as the
industry benchmark for service quality measurement. The marketing effort to
these firms is headed by James F. Getz, President, Broker/Dealer Division.
*Source: Investment Company Institute
APPENDIX
STANDARD & POOR'S RATINGS GROUP
SHORT-TERM MUNICIPAL OBLIGATION RATINGS
A Standard & Poor's Ratings Group (S&P) note rating reflects the liquidity
concerns and market access risks unique to notes.
SP-1 Very strong or strong capacity to pay principal and interest. Those
issues determined to possess overwhelming safety characteristics will
be given a plus sign (+) designation.
SP-2 Satisfactory capacity to pay principal and interest.
VARIABLE RATE DEMAND NOTES (VRDNS) AND TENDER OPTION BONDS (TOBS) RATINGS
S&P assigns dual ratings to all long-term debt issues that have as part of
their provisions a variable rate demand feature. The first rating (long-
term rating) addresses the likelihood of repayment of principal and
interest when due, and the second rating (short-term rating) describes the
demand characteristics. Several examples are AAA/A-l+, AA/A-I+, A/A-1. (The
definitions for the long-term and the short-term ratings are provided
below.)
COMMERCIAL PAPER (CP) RATINGS
An S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365
days.
A-1 This highest category indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess extremely
strong safety characteristics are denoted with a plus sign (+)
designation.
A-2 Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as
for issues designated A-1.
LONG-TERM DEBT RATINGS
AAA Debt rated `AAA'' has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA Debt rate `AA'' has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in small
degree.
A Debt rated `A'' has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than debt
in higher rated categories.
MOODYS INVESTORS SERVICE, INC.,
SHORT-TERM MUNICIPAL OBLIGATION RATINGS
Moody's Investor Service, Inc. (Moody's) short-term ratings are designated
Moody's Investment Grade (MIG or VMIG) (see below). The purpose of the MIG
or VMIG ratings is to provide investors with a simple system by which the
relative investment qualities of short-term obligations may be evaluated.
MIG1 This designation denotes best quality. There is present strong
protection by established cash flows, superior liquidity support or
demonstrated broad based access to the market for refinancing.
MIG2 This designation denotes high quality. Margins of protection are ample
although not so large as in the preceding group.
VARIABLE RATE DEMAND NOTES (VRDNS) AND TENDER OPTION BONDS (TOBS) RATINGS
Short-term ratings on issues with demand features are differentiated by the
use of the VMIG symbol to reflect such characteristics as payment upon
periodic demand rather than fixed maturity dates and payment relying on
external liquidity. In this case, two ratings are usually assigned, (for
example, AAA/VMIG-1); the first representing an evaluation of the degree of
risk associated with scheduled principal and interest payments, and the
second representing an evaluation of the degree of risk associated with the
demand feature. The VMIG rating can be assigned a 1 or 2 designation using
the same definitions described above for the MIG rating.
COMMERCIAL PAPER (CP) RATINGS
P-1 Issuers rated PRIME-1 (or related supporting institutions) have a
superior capacity for repayment of short-term promissory obligations.
PRIME-1 repayment capacity will normally be evidenced by the following
characteristics: leading market positions in well established
industries, high rates of return on funds employed, conservative
capitalization structure with moderate reliance on debt and ample
asset protection, broad margins in earning coverage of fixed financial
charges and high internal cash generation, well-established access to
a range of financial markets and assured sources of alternate
liquidity.
P-2 Issuers rated PRIME-2 (or related supporting institutions) have a
strong capacity for repayment of short-term promissory obligations.
This will normally be evidenced by many of the characteristics cited
above, but to a lesser degree. Earnings trends and coverage ratios,
while sound, will be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by
external conditions. Ample alternate liquidity is maintained.
LONG-TERM DEBT RATINGS
AAA Bonds which are rated AAA are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally
referred to as `gilt edged.'' Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure.
While the various protective elements are likely to change, such
changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
AA Bonds which are rated AA are judged to be of high quality by all
standards. Together with the AAA group, they comprise what are
generally known as high grade bonds. They are rated lower than the
best bonds because margins of protection may not be as large as in AAA
securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the long-
term risks appear somewhat larger than in AAA securities.
A Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate but
elements may be present which suggest a susceptibility to impairment
sometime in the future.
NR Indicates that both the bonds and the obligor or credit enhancer are
not currently rated by S&P or Moody's with respect to short-term
indebtedness. However, management considers them to be of comparable
quality to securities rated A-1 or P-1.
NR(1) The underlying issuer/obligor/guarantor has other outstanding
debt rated `AAA'' by S&P or ``AAA'' by Moody's.
NR(2) The underlying issuer/obligor/guarantor has other outstanding
debt rated `AA'' by S&P or ``AA'' by Moody's.
NR(3) The underlying issuer/obligor/guarantor has other outstanding
debt rated `A'' by S&P or Moody's.
FITCH INVESTORS SERVICES, INC.
SHORT-TERM DEBT RATING DEFINITIONS
F-1+ Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely
payment.
F-1 Very Strong Credit Quality. Issues assigned this rating reflect an
assurance for timely payment, only slightly less in degree than issues
rated F-1+.
F-2 Good Credit Quality. Issues carrying this rating have a satisfactory
degree of assurance for timely payment, but the margin of safety is
not as great as for issues assigned F-1+ and F-1 ratings.
PART C. OTHER INFORMATION.
Item 24. Financial Statements and Exhibits:
(a) Financial Statements: (1-16) Filed in Part A.
(b) Exhibits:
(1) Conformed Copy of Declaration of Trust of the
Registrant (Amendment No. 1 does not exist); +
(i) Conformed copy of Amendment No. 2 dated March 16,
1990; +
(ii) Conformed copy of Amendment No. 3 dated August 1,
1990; +
(iii)Conformed copy of Amendment No. 4, dated
September 1, 1989, to the Declaration of Trust
(7);
(iv) Conformed copy of Amendment No. 5 dated December
12, 1990; +
(v) Conformed copy of Amendment No. 6 dated March 21,
1991; +
(vi) Conformed copy of Amendment No. 7. dated August
26, 1991; +
(vii)Conformed copy of Amendment No. 8 dated February
13, 1992; +
(viii)..........Conformed copy of Amendment No. 9
dated November 9, 1992; +
(ix) Conformed copy of Amendment No. 10, dated
November 18, 1992, to the Declaration of Trust
(12);
(x) Conformed copy of Amendment No. 11 dated May 24,
1993; +
(xi) Conformed copy of Amendment No. 12, dated Nov.
22, 1993, to the Declaration of Trust (17);
(xii)Conformed copy of Amendment No. 13, dated
February 24, 1994, to the Declaration of Trust
(17);
(xiii)..........Conformed copy of Amendment No. 14,
dated August 25, 1994 (20);
(xiv)Conformed copy of Amendment No. 15 dated August
25, 1994; +
(xv) Conformed copy of Amendment No. 16 dated May 18,
1995; +
+ All exhibits have been filed electronically.
7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 6 on Form N-1A filed on November 6, 1990 (File Nos. 33-
31259 and 811-5911).
12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 14 on Form N-1A filed on December 23, 1992 (File Nos.
33-31251 and 811-5911).
17. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A filed on March 2, 1994 (File Nos. 33-
31251 and 811-5911).
20. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 30 on Form N-1A filed on September 19, 1994 (File Nos.
33-31251 and 811-5911)
(xvi)Conformed copy of Amendment No. 17 dated November
14, 1995 (28);
(xvii)Conformed copy of Amendment No. 18 dated February
29, 1996; +
(2) Copy of By-Laws of the Registrant (7);
(3) Not applicable;
(4) (i) Copy of Specimen Certificates for Shares of
Beneficial Interest of Alabama Municipal Cash Trust,
Minnesota Municipal Cash Trust (Cash Series Shares and
Institutional Shares), Pennsylvania Municipal Cash
Trust (Cash Series Shares and Institutional Service
Shares), Virginia Municipal Cash Trust (Institutional
Service Shares and Institutional Shares), North
Carolina Municipal Cash Trust, Ohio Municipal Cash
Trust (Cash II Shares and Institutional Shares),
Massachusetts Municipal Cash Trust (Institutional
Service Shares and BayFunds Shares), and New Jersey
Municipal Cash Trust (Institutional Shares and
Institutional Service Shares) (16);
(ii) Copy of Specimen Certificate for Maryland
Municipal Cash Trust (17);
(iii)Copy of Specimen Certificate for Florida
Municipal Cash Trust (20)
(iv) Copy of Specimen Certificate for Michigan
Municipal Cash Trust (24);
(v) Copy of Specimen Certificate for Pennsylvania
Municipal Cash Trust- Institutional Shares (25);
(vi) Copy of Specimen Certificate for Georgia
Municipal Cash Trust (26);
+ All exhibits have been filed electronically.
7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 6 on Form N-1A filed on November 6, 1990 (File Nos. 33-
31259 and 811-5911).
16. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 21 on Form N-1A filed on December 29, 1993 (File Nos.
33-31259 and 811-5911).
17. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A filed on March 2, 1994 (File Nos. 33-
31251 and 811-5911).
20. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 30 on Form N-1A filed on September 19, 1994 (File Nos.
33-31251 and 811-5911)
24. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 34 on Form N-1A filed on April 13, 1995 (File Nos. 33-
31251 and 811-5911).
25. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 35 on Form N-1A filed on May 19, 1995 (File Nos. 33-
31251 and 811-5911)
26. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 36 on Form N-1A filed on May 31, 1995 (File Nos. 33-
31251 and 811-5911)
28. Response is incorporated by reference to Registrant's Post- Effective
Amendment No. 39 on Form N-1A filed on December 22, 1995 (File Nos.
33-31259 and 811-5911)
(vii)Copy of Specimen Certificates for Tennessee
Municipal Cash Trust (Institutional Shares and
Institutional Service Shares)(30);
(viii)..........Copy of Specimen Certificates for
Pennsylvania Municipal Cash Trust and Connecticut
Municipal Cash Trust (2);
(ix) Copy of Specimen Certificate for Ohio Municipal
Cash Trust (Institutional Service Shares) (9);
(5) Conformed Copy of Investment Advisory Contract of the
Registrant through and including Exhibit F (7);
(i) Conformed copy of Exhibit G to Investment
Advisory Contract for Virginia Municipal Cash
Trust (18);
(ii) Conformed copy of Exhibit H to Investment
Advisory Contract for Alabama Municipal Cash
Trust (19);
(iii)Conformed copy of Exhibit I to Investment
Advisory Contract for North Carolina Municipal
Cash Trust (19);
(iv) Conformed copy of Exhibit J to Investment
Advisory Contract for Maryland Municipal Cash
Trust (19);
(v) Conformed copy of Exhibit K to Investment
Advisory Contract for New York Municipal Cash
Trust; (22)
(vi) Conformed copy of Exhibit L to Investment
Advisory Contract for California Municipal Cash
Trust; (22)
(vii)Conformed copy of Exhibit M to Investment
Advisory Contract; +
+ All exhibits have been filed electronically.
2. Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 1 on Form N-1A filed on October 31, 1989 (File Nos. 33-
31259 and 811-5911).
7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 6 on Form N-1A filed on November 6, 1990 (File Nos. 33-
31259 and 811-5911).
9. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 10 on Form N-1A filed on January 24, 1991 (File Nos. 33-
31259 and 811-5911).
18. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 26 on Form N-1A filed on June 1, 1994 (File Nos. 33-
31259 and 811-5911).
19. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed on June 28, 1994 (File Nos. 33-
31259 and 811-5911).
22. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 32 on Form N-1A filed on December 28, 1994 (File Nos.
33-31259 and 811-5911).
30. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 42 on Form N-1A filed on February 2, 1996 (File Nos. 33-
31251 and 811-5911)
(viii)..........Conformed copy of Exhibit N to the
Investment Advisory Contract for Georgia
Municipal Cash Trust (27);
(ix) Conformed copy of Exhibit O to the Investment
Advisory Contract for Michigan Municipal Cash
Trust (27);
(x) Conformed Copy of Exhibit P to the Investment
Advisory Contract for Tennessee Municipal Cash
Trust ; +
(6) Conformed Copy of Distributor's Contract of the
Registrant(7);
(i) Conformed Copy of Exhibit A to the Distributor's
Contract for Massachusetts Municipal Cash Trust
(Institutional Service Shares) (9);
(ii) Conformed copy of Exhibit B to the Distributor's
Contract for Pennsylvania Municipal Cash Trust
(Institutional Service Shares) (9);
(iii)Conformed copy of Exhibit C to the Distributor's
Contract for Connecticut Municipal Cash Trust
(Institutional Service Shares) (9);
(iv) Conformed copy of Exhibit D to the Distributor's
Contract for Minnesota Municipal Cash Trust
(Institutional Shares) (9);
(v) Conformed Copy of Exhibit E to the Distributor's
Contract for New Jersey Municipal Cash Trust
(Institutional Shares); +
(vi) Conformed Copy of Exhibit F to the Distributor's
Contract for New Jersey Municipal Cash Trust
(Institutional Service Shares); +
(vii)Conformed Copy of Exhibit G to the Distributor's
Contract for Pennsylvania Municipal Cash Trust
(Cash Series Shares); +
(viii)..........Exhibit H to the Distributor's
Contract does not exist;
(ix) Conformed Copy of Exhibit I to the Distributor's
Contract for Minnesota Municipal Cash Trust (Cash
Series Shares); +
(x) Exhibit J to the Distributor's Contract does not
exist;
+ All exhibits have been filed electronically.
7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 6 on Form N-1A filed on November 6, 1990 (File Nos. 33-
31259 and 811-5911).
9. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 10 on Form N-1A filed on January 24, 1991 (File Nos. 33-
31259 and 811-5911).
27. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 37 on Form N-1A filed on July 18, 1995 (File Nos. 33-
31259 and 811-5911).
(xi) Conformed Copy of Exhibit K to the Distributor's
Contract for Ohio Municipal Cash Trust
(Institutional Service Shares); +
(xii)Conformed Copy of Exhibit L to the Distributor's
Contract for Ohio Municipal Cash Trust (Cash II
Shares); +
(xiii)..........Conformed copy of Exhibit M to
Distributor's Contract; (22)
(xiv)Conformed copy of Exhibit N to the Distributor's
Contract for Virginia Municipal Cash Trust (19);
(xv) Conformed copy of Exhibit O to the Distributor's
Contract for Alabama Municipal Cash Trust (19);
(xvi)Conformed copy of Exhibit P to the Distributor's
Contract for North Carolina Municipal Cash Trust
(19);
(xvii)..........Conformed copy of Exhibit Q to the
Distributor's Contract for Maryland Municipal
Cash Trust (19);
(xviii)Conformed copy of Exhibit R to the Distributor's
Contract for New York Municipal Cash Trust, Cash
II Shares (21);
(xix)Conformed copy of Exhibit S to the Distributor's
Contract for New York Municipal Cash Trust,
Institutional Service Shares (21);
(xx) Conformed copy of Exhibit T to the Distributor's
Contract for California Municipal Cash Trust
(21);
(xxi)Conformed copy of Exhibit U to the Distributor's
Contract for Florida Municipal Cash Trust; (22)
+ All exhibits have been filed electronically.
19. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed on June 28, 1994 (File Nos. 33-
31259 and 811-5911).
20. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 30 on Form N-1A filed on September 19, 1994 (File Nos.
33-31251 and 811-5911)
21. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 31 on Form N-1A filed on October 24, 1994 (File Nos. 33-
31259 and 811-5911).
22. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 32 on Form N-1A filed on December 28, 1994 (File Nos.
33-31259 and 811-5911).
(xxii)..........Conformed copy of Exhibit V to the
Distributor's Contract for Georgia Municipal Cash
Trust (27);
(xxiii)Conformed copy of Exhibit W to the Distributor's
Contract for Michigan Municipal Cash Trust (27);
(xxiv)..........Conformed copy of Exhibit X to the
Distributor's Contract for Pennsylvania Municipal
Cash Trust- Institutional Shares (27);
(xxv)Conformed copy of Exhibit Y to the Distributor's
Contract for Florida Municipal Cash Trust-Cash II
Shares (29)
(xxvi)..........Conformed copy of Exhibit Z to the
Distributor's Contract for California Municipal
Cash Trust (Institutional Shares); +
(xxvii)Conformed copy of Exhibit AA to the
Distributor's Contract for Michigan Municipal
Cash Trust (Institutional Shares); +
(xxviii)Conformed copy of Exhibit BB to the
Distributor's Contract for Ohio Municipal Cash
Trust (Institutional Shares); +
(xxix)..........Conformed Copy of Exhibit CC
(Institutional Shares) and Exhibit DD
(Institutional Service Shares) to the
Distributor's Contract for Tennessee Municipal
Cash Trust; +
(xxx)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) (i) Conformed copy of Custodian Agreement of the
Registrant (22);
(ii) Copy of Exhibit 1 to the Custodian Agreement (27);
+ All exhibits have been filed electronically.
22. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 32 on Form N-1A filed on December 28, 1994 (File Nos.
33-31259 and 811-5911).
27. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 37 on Form N-1A filed on July 18, 1995 (File Nos. 33-
31259 and 811-5911).
29 Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 40 on Form N-1A filed on January 30, 1996. (File Nos.
33-31259 and 811-5911).
(9) (i) Conformed copy of Agreement for Fund Accounting,
Shareholder Recordkeeeping, and Custody Services
Procurement; +
(ii) Conformed copy of Sub-Transfer Agency Agreement
of the Registrant (Massachusetts Municipal Cash
Trust--1784 Fund Shares only)(to be filed by
amendment);
(iii)Conformed copy of Shareholder Services Agreement
of the Registrant (Massachusetts Municipal Cash
Trust--1784 Fund Shares only); (15)
(iv) Conformed copy of Shareholder Services Agreement
of the Registrant; (22)
(v) The response and exhibits described in Item
24(b)(6) are hereby incorporated by reference;
(vi) Conformed copy of Administrative Services
Agreement of the Registrant; (22)
(vii)Form of Schwab Master Services Agreement (Ohio
Municipal Cash Trust-Cash II Shares only); +
(10) Conformed Copy of Opinion and Consent of Counsel as to
the legality of shares (5);
(11) Conformed Copy of Report of Independent Auditors;+
(12) Not applicable;
(13) Conformed Copy of Initial Capital Understanding (2);
(14) Not applicable.
+ All exhibits have been filed electronically.
2. Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 1 on Form N-1A filed on October 31, 1989 (File Nos. 33-
31259 and 811-5911).
5. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 3 on Form N-1A filed August 3, 1990 (File Nos. 33-31259
and 811-5911).
15. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 18 on Form N-1A filed on October 1, 1993 (File Nos. 33-
31259 and 811-5911).
22. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 32 on Form N-1A filed on December 28, 1994 (File Nos.
33-31259 and 811-5911).
(15) (i) Copy of Rule 12b-1 Plan of the Registrant through
and including Exhibit F (7); Additional Exhibits
to the Rule 12b-1 Plan have been executed to
reflect the coverage of subsequently created
portfolios and/or classes under these documents.
Because these exhibits are substantially
identical but differ only as to the Fund name,
dates, and any other Fund - specific information,
pursuant to Rule 8b-31 of the Investment Company
Act they need not be filed.
(ii) Conformed copy of Exhibit G to 12b-1 Plan for
Ohio Municipal Cash Trust Cash II Shares; +
(iii)Conformed copy of Exhibit H to 12b-1 Plan for New
York Municipal Cash Trust, Cash II Shares (21);
(iv) Conformed copy of Exhibit I to 12b-1 Plan for New
York Municipal Cash Trust, Institutional Service
Shares (21);
(v) Conformed copy of Exhibit J to 12b-1 Plan for
Florida Municipal Cash Trust; (22)
(vi) Conformed copy of Exhibit K to 12b-1 Plan for
Florida Municipal Cash Trust-Cash II Shares (29);
(vii)The response and exhibits described in Item 24
(b) (6) are hereby incorporated by reference.
(16) Copy of Schedules for Computation of Performance Data;
(i) New Jersey Municipal Cash Trust (Institutional
Shares and Institutional Service Shares) (23);
(ii) Ohio Municipal Cash Trust (23);
+ All exhibits have been filed electronically.
7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 6 on Form N-1A filed on November 6, 1990 (File Nos. 33-
31259 and 811-5911).
21. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 31 on Form N-1A filed on October 24, 1994 (File Nos. 33-
31259 and 811-5911).
22. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 32 on Form N-1A filed on December 28, 1994 (File Nos.
33-31259 and 811-5911).
23. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 33 on Form N-1A filed on February 13, 1995 (File Nos.
33-31259 and 811-5911).
29 Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 40 on Form N-1A filed on January 30, 1996. (File Nos.
33-31259 and 811-5911).
(iii)Virginia Municipal Cash Trust (Institutional
Share and Institutional Service Shares) (16);
(iv) Alabama Municipal Cash Trust (18);
(v) North Carolina Municipal Cash Trust (18);
(vi) Maryland Municipal Cash Trust (21);
(vii)Florida Municipal Cash Trust (23);
(viii)..........Michigan Municipal Cash Trust (29);
(ix) Georgia Municipal Cash Trust (29);
(x) Pennsylvania Municipal Cash Trust, Connecticut
Municipal Cash Trust, Minnesota Municipal Cash
Trust, and Massachusetts Municipal Cash Trust
(2);
(xi) Tennessee Municipal Cash Trust;+
(17) Financial Data Schedules;+
(18) The Registrant hereby incorporates the conformed copy
of the specimen Multiple Class Plan from Item 24(b)(18)
of the World Investment Series, Inc. Registration
Statement on Form N-1A, filed with the Commission on
January 26, 1996. (File Nos. 33-52149 and 811-07141);
(19) Conformed copy of Power of Attorney of the Registrant;
+
+ All exhibits have been filed electronically.
2. Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 1 on Form N-1A filed on October 31, 1989 (File Nos. 33-
31259 and 811-5911).
16. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 21 on Form N-1A filed on December 29, 1993 (File Nos.
33-31259 and 811-5911).
18. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 26 on Form N-1A filed on June 1, 1994 (File Nos. 33-
31259 and 811-5911).
21. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 31 on Form N-1A filed on October 24, 1994 (File Nos. 33-
31259 and 811-5911).
23. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 33 on Form N-1A filed on February 13, 1995 (File Nos.
33-31259 and 811-5911).
29 Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 40 on Form N-1A filed on January 30, 1996. (File Nos.
33-31259 and 811-5911).
Item 25. Persons Controlled by or Under Common Control with Registrant:
None
Item 26. Number of Holders of Securities:
Number of Record Holders as of
Title of Class November 5, 1996
Shares of beneficial
interest (no par value)
Connecticut Municipal Cash Trust
Institutional Service Shares 1,617
Pennsylvania Municipal Cash Trust
Cash Series Shares 894
Institutional Service Shares 380
Institutional Shares 52
Minnesota Municipal Cash Trust
Cash Series Shares 4,897
Institutional Shares 55
New Jersey Municipal Cash Trust
Institutional Service Shares 338
Institutional Shares 36
Ohio Municipal Cash Trust
Cash II Shares 214
Institutional Shares 24
Institutional Service Shares 71
Virginia Municipal Cash Trust
Institutional Service Shares 975
Institutional Shares 26
Alabama Municipal Cash Trust 668
North Carolina Municipal Cash Trust 660
Maryland Municipal Cash Trust 306
California Municipal Cash Trust
Institutional Shares 15
Institutional Service Shares 12
New York Municipal Cash Trust
Cash II Shares 3
Institutional Service Shares 577
Florida Municipal Cash Trust
Institutional Shares 4
Cash II Shares 9
Massachusetts Municipal Cash Trust
Institutional Service Shares 523
BayFunds Shares 5
Michigan Municipal Cash Trust
Institutional Shares 14
Institutional Service Shares 115
Georgia Municipal Cash Trust 159
Tennessee Municipal Cash Trust
Institutional Shares 19
Institutional Service Shares 62
Item 27. Indemnification: (3.)
3. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 1 on Form N-1A filed on March 22, 1990 (File Nos. 33-
31259 and 811-5911).
Item 28. Business and Other Connections of Investment Adviser:
For a description of the other business of the investment
adviser, see the section entitled `Fund Information - Management
of the Fund''in Part A. The affiliations with the Registrant of
four of the Trustees and one of the Officers of the investment adviser are
included in Part B of this Registration Statement under `Federated
Municipal Trust Management'' 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 W. Market Street,
Georgetown, Delaware 19947.
The remaining Officers of the investment adviser are: William D.
Dawson, III, Henry A. Frantzen J. Thomas Madden, and Mark L.
Mallon, Executive Vice Presidents; Henry J. Gailliot, Senior Vice
President-Economist; Peter R. Anderson, Drew J. Collins, Jonathan
C. Conley, Mark E. Durbiano, J. Alan Minteer and Mary Jo Ochson,
Senior Vice Presidents; J. Scott Albrecht, Joseph M. Balestrino,
Randall A. Bauer, David F. Belton, David A. Briggs, Kenneth J.
Cody, Deborah A. Cunningham, Michael P. Donnelly, Alexandre de
Bethmann, Linda A. Duessel, Kathleen M. Foody-Malus, Thomas M.
Franks, Edward C. Gonzales, James E. Grefenstette, Stephen A.
Keen, Mark S. Kopinski, Robert M. Kowit, Jeff A. Kozemchak,
Marian R. Marinack, Sandra L. McInerney, Susan M. Nason, Robert
J. Ostrowski, Charles A. Ritter, Frank Semack, William F. Stotz,
Tracy P. Stouffer, Edward J. Tiedge, Christopher H. Wiles, and
Jolanta M Wysocka, Vice Presidents; Thomas R. Donahue, Treasurer;
Stephen A. Keen, 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.
Item 29. Principal Underwriters:
(a) 111 Corcoran Funds; Annuity Management Series; Arrow Funds; Automated
Government Money Trust; BayFunds; Blanchard Funds; Blanchard Precious
Metals Fund, Inc.; Cash Trust Series II; Cash Trust Series, Inc.; DG
Investor Series; Edward D. Jones & Co. Daily Passport Cash Trust;
Federated Adjustable Rate U.S. Government Fund, Inc.; Federated American
Leaders Fund, Inc.; Federated ARMs Fund; Federated Equity Funds; Federated
Equity Income Fund, Inc.; Federated Fund for U.S. Government Securities,
Inc.; Federated GNMA Trust; Federated Government Income Securities, Inc.;
Federated Government Trust; Federated High Income Bond Fund, Inc.;
Federated High Yield Trust; Federated Income Securities Trust; Federated
Income Trust; Federated Index Trust; Federated Institutional Trust;
Federated Insurance Series; Federated Investment Portfolios; Federated
Investment Trust; Federated Master Trust; Federated Municipal Opportunities
Fund, Inc.; Federated Municipal Securities Fund, Inc.; Federated Municipal
Trust; Federated Short-Term Municipal Trust; Federated Short-Term U.S.
Government Trust; Federated Stock and Bond Fund, Inc.; Federated Stock
Trust; Federated Tax-Free Trust; Federated Total Return Series, Inc.;
Federated U.S. Government Bond Fund; Federated U.S. Government Securities
Fund: 1-3 Years; Federated U.S. Government Securities Fund: 2-5 Years;
Federated U.S. Government Securities Fund: 5-10 Years; Federated Utility
Fund, Inc.; First Priority Funds; Fixed Income Securities, Inc.; High Yield
Cash Trust; Independence One Mutual Funds; Intermediate Municipal Trust;
International Series, Inc.; Investment Series Funds, Inc.; Investment
Series Trust; Liberty U.S. Government Money Market Trust; Liquid Cash
Trust; Managed Series Trust; Marshall Funds, Inc.; Money Market Management,
Inc.; Money Market Obligations Trust; Money Market Trust; Municipal
Securities Income Trust; Newpoint Funds; Peachtree Funds; RIMCO Monument
Funds; SouthTrust Vulcan Funds; Star Funds; Targeted Duration Trust; Tax-
Free Instruments Trust; The Biltmore Funds; The Biltmore Municipal Funds;
The Monitor Funds; The Planters Funds; The Starburst Funds; The Starburst
Funds II; The Virtus Funds; Tower Mutual Funds; Trust for Financial
Institutions; Trust for Government Cash Reserves; Trust for Short-Term U.S.
Government Securities; Trust for U.S. Treasury Obligations; Vision Group of
Funds, Inc.; 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 ViceExecutive Vice
Federated Investors Tower President, Federated, President
Pittsburgh, PA 15222-3779 Securities Corp.
Thomas R. Donahue Director, Assistant Secretary, --
Federated Investors Tower Assistant Treasurer
Pittsburgh, PA 15222-3779 Federated Securities Corp
John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark R. Gensheimer Executive Vice President of --
Federated Investors Tower Bank/Trust, 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
Dale R. Browne 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
R. Leonard Corton, 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
Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John K. Goettlicher 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
James E. Hickey Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
H. Joseph Kennedy 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
Thomas A. Peters III 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
Edward L. Smith 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
Richard Suder 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
Miles J. Wallace 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
Edward J. Wojnarowski 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
Edward R. Bozek Assistant 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
Leslie K. Platt Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Item 30. Location of Accounts and Records:
Registrant Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Shareholder Services Company P.O. Box 8600
(`Transfer Agent, Dividend Boston, MA 02266-8600
Disbursing Agent and Portfolio
Recordkeeper")
Federated Administrative Services Federated Investors Tower
(`Administrator'') Pittsburgh, PA 15222-3779
Federated Management Federated Investors Tower
(`Adviser'') Pittsburgh, PA 15222-3779
State Street Bank and Trust Company P.O. Box 8600
(`Custodian'') Boston, MA 02266-8600
Item 31. Management Services: Not applicable.
Item 32. Undertakings:
Registrant hereby undertakes to comply with the provisions of
Section 16(c) of the 1940 Act with respect to the removal of
Trustees and the calling of special shareholder meetings by
shareholders.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, FEDERATED MUNICIPAL TRUST,
certifies that it meets all of the requirements for effectiveness of this
Amendment to its Registration Statement pursuant to Rule 485(b) under the
Securutues Act of 1933 and has duly caused this 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 29th day of
November, 1996.
FEDERATED MUNICIPAL TRUST
BY: /s/ S. Elliott Cohan
S. Elliott Cohan, Assistant Secretary
Attorney in Fact for John F. Donahue
November 29, 1996
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/ S. Elliott Cohan
S. Elliott Cohan Attorney In Fact November 29, 1996
ASSISTANT SECRETARY For the Persons
Listed Below
NAME TITLE
John F. Donahue* Chairman and Trustee
(Chief Executive Officer)
Glen R. Johnson* President and Trustee
John W. McGonigle* Secretary and Treasurer (Principal
Financial and Accounting
Officer)
Thomas G. Bigley* Trustee
John T. Conroy, Jr.* Trustee
William J. Copeland* Trustee
James E. Dowd* Trustee
Lawrence D. Ellis, M.D.* Trustee
Edward L. Flaherty, Jr.* Trustee
Peter E. Madden* Trustee
Gregor F. Meyer* Trustee
John E. Murray, Jr.* Trustee
Wesley W. Posvar* Trustee
Marjorie P. Smuts* Trustee
* By Power of Attorney
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use in Post-
Effective Amendment No. 43 to Form N-1A Registration Statement of Tennessee
Municipal Cash Trust (a portfolio of Federated Municipal Trust) of our report
dated November 20, 1996, on the financial statements as of October 31, 1996,
included in or made a part of this registration statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania
November 27, 1996
Exhibit 1 under Form N-1A
Exhibit 3(a) under Item 601/Reg. S-K
FEDERATED MUNICIPAL TRUST
Declaration of Trust
TABLE OF CONTENTS
Page
ARTICLE I. NAMES AND DEFINITIONS ............................. 1
Section 1. Name ......................................... 1
Section 2. Definitions .................................. 1
ARTICLE II. PURPOSE OF TRUST .................................. 2
ARTICLE III. BENEFICIAL INTEREST................................ 2
-
Section 1. Shares of Beneficial Interest ................ 2
Section 2. Ownership of Shares .......................... 2
Section 3. Investment in the Trust ...................... 3
Section 4. No Pre-emptive Rights ........................ 3
Section 5. Establishment and Designation of Series
or Class ................................... 3
ARTICLE IV. THE TRUSTEES ...................................... 5
Section 1. Management of the Trust ...................... 5
Section 2. Election of Trustees at Meeting of
Shareholders ............................... 5
Section 3. Term of Office of Trustees ................... 5
Section 4. Termination of Service and Appointment
of Trustees ................................ 5
Section 5. Number of Trustees ........................... 6
Section 6. Effect of Death, Resignation, etc. of a
Trustee .................................... 6
Section 7. Ownership of Assets .......................... 6
ARTICLE V. POWERS OF THE TRUSTEES ............................ 6
Section 1. Powers ....................................... 6
Section 2. Principal Transactions ....................... 8
Section 3. Trustees and Officers as Shareholders......... 9
Section 4. Parties to Contract .......................... 9
-i-
Page
ARTICLE VI. TRUSTEES' EXPENSES AND COMPENSATION ............... 9
Section 1. Trustee Reimbursement ........................ 9
Section 2. Trustee Compensation ......................... 10
ARTICLE VII. INVESTMENT ADVISER, ADMINISTRATIVE SERVICES,
PRINCIPAL UNDERWRITER AND
TRANSFER AGENT ......................... 10
Section 1. Investment Adviser ........................... 10
Section 2. Administrative Services ...................... 11
Section 3. Principal Underwriter ........................ 11
Section 4. Transfer Agent ............................... 11
ARTICLE VIII. SHAREHOLDERS' VOTING POWERS AND MEETINGS .......... 11
Section 1. Voting Powers ................................ 11
Section 2. Meetings ..................................... 12
Section 3. Quorum and Required Vote ..................... 12
Section 4. Additional Provisions ........................ 12
ARTICLE IX. CUSTODIAN ......................................... 12
ARTICLE X. DISTRIBUTIONS AND REDEMPTIONS ..................... 13
Section 1. Distributions ................................ 13
Section 2. Redemptions and Repurchases .................. 13
Section 3. Net Asset Value of Shares .................... 14
Section 4. Suspension of the Right of Redemption......... 14
Section 5. Trust's Right to Redeem Shares ............... 14
ARTICLE XI. LIMITATION OF LIABILITY AND INDEMNIFICATION ....... 15
Section 1. Limitation of Personal Liability and
Indemnification of Shareholders ............ 15
Section 2. Limitation of Personal Liability of
Trustees, Officers, Employees or
-3-
Agents of the Trust ........................ 15
Section 3. Express Exculpatory Clauses and
Instruments ................................ 16
-ii-
Page
ARTICLE XII. MISCELLANEOUS...................................... 16
Section 1. Trust is not a Partnership ................... 16
Section 2. Trustee Action Binding, Expert Advice,
No Bond or Surety .......................... 16
Section 3. Establishment of Record Dates ................ 16
Section 4. Termination of Trust ......................... 17
Section 5. Offices of the Trust, Filing of Copies,
Headings, Counterparts ..................... 17
Section 6. Applicable Law ............................... 18
Section 7. Amendments -- General ........................ 18
Section 8. Amendments -- Series ......................... 18
-4-
DECLARATION OF TRUST
FEDERATED MUNICIPAL TRUST
Dated September 1, 1989
DECLARATION OF TRUST made September 1, 1989 by John F. Donahue,
William J. Copeland, James F. Dowd, Lawrence D. Ellis, M.D., Edward L.
Flaherty, Jr., Glen R. Johnson, J. Joseph Maloney, Jr., Gregor F. Meyer,
Wesley W. Posvar, Marjorie P. Smuts, and John A. Staley, IV.
WHEREAS, the Trustees desire to establish a trust fund for the
investment and reinvestment of funds contributed thereto;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust fund hereunder shall be held and managed under
this Declaration of Trust IN TRUST as herein set forth below.
ARTICLE I
NAMES AND DEFINITIONS
Section 1. Name.
-5-
This Trust shall be known as Federated Municipal Trust.
Section 2. Definitions.
Wherever used herein, unless otherwise required by the context or
specifically provided:
(a) The terms "Affiliated Person," "Assignment," "Commission,"
"Interested Person," "Majority Shareholder Vote" (the 67% or 50%
requirement of Section 2(a)(42) of the 1940 Act, whichever may be
applicable) and "Principal Underwriter" shall have the meanings given
them in the 1940 Act, as amended from time to time;
(b) The "Trust" refers to Federated Municipal Trust;
(c) "Class" refers to a class of Shares established and
designated under or in accordance with the provisions of Article III;
(d) "Series" refers to a series of Shares established and
designated under or in accordance with the provisions of Article III;
(e) "Series Company" refers to the form of a registered open-end
investment company described in Section 18(f)(2) of the 1940 Act or in
any successor statutory provision;
(f) "Shareholder" means a record owner of Shares of any Series or
Class;
-6-
(g) The "Trustees" refer to the individual Trustees in their
capacity as Trustees hereunder of the Trust and their successor or
successors for the time being in office as such Trustees;
(h) "Shares" means the equal proportionate units of interest into
which the beneficial interest in the Trust shall be divided from time
to time, or if more than one Series or Class of Shares is authorized
by the Trustees, the equal proportionate units into which each
Series or Class of Shares shall be divided from time to time and
includes fractions of Shares as well as whole Shares; and
(i) The "1940 Act" refers to the Investment Company Act of 1940,
and the Rules and Regulations thereunder (including any exemptions
granted thereunder), as amended from time to time.
ARTICLE II
PURPOSE OF TRUST
The purpose of this Trust is to provide investors a continuous source
of managed investments by investing primarily in securities (including
options) and also in debt instruments, commodities, commodity contracts and
options thereon.
ARTICLE III
BENEFICIAL INTEREST
Section 1. Shares of Beneficial Interest.
The beneficial interest in the Trust shall at all times be divided
into transferable Shares, without par value. Subject to the
provisions of Section 5 of this Article III, each Share shall have
-7-
voting rights as provided in Article VIII hereof, and holders of the
Shares of any Series shall be entitled to receive dividends, when and
as declared with respect thereto in the manner provided in Article X,
Section 1 hereof. The Shares of any Series may be issued in two or
more Classes, as the Trustees may authorize pursuant to Article XII,
Section 8 hereof. Unless the Trustees have authorized the issuance of
Shares of a Series in two or more Classes, each Share of a Series
shall represent an equal proportionate interest in the assets and
liabilities of the Series with each other Share of the same Series,
none having priority or preference over another. If the Trustees have
authorized the issuance of Shares of a Series in two or more Classes,
then the Classes may have such variations as to dividend, redemption,
and voting rights, net asset values, expenses borne by the Classes,
and other matters as the Trustees have authorized provided that each
Share of a Class shall represent an equal proportionate interest in
the assets and liabilities of the Class with each other Share of the
same Class, none having priority or preference over another. The
number of Shares authorized shall be unlimited. The Trustees may from
time to time divide or combine the Shares of any Series or Class into
a greater or lesser number without thereby changing the proportionate
beneficial interests in the Series or Class.
Section 2. Ownership of Shares.
The ownership of Shares shall be recorded in the books of the
Trust or a transfer agent, which books shall be maintained separately
for the Shares of each Series or Class. The Trustees may make such
rules as they consider appropriate for the transfer of Shares and
similar matters. The record books of the Trust or any transfer agent,
as the case may be, shall be conclusive as to who are the Shareholders
-8-
of each Series or Class and as to the number of Shares of each Series
or Class held from time to time by each.
Section 3. Investment in the Trust.
The Trustees shall accept investments in the Trust from such
persons and on such terms as they may from time to time authorize.
After the date of the initial contribution of capital (which shall
occur prior to the initial public offering of Shares), the number of
Shares to represent the initial contribution shall be considered as
outstanding and the amount received by the Trustees on account of the
contribution shall be treated as an asset of the Trust to be allocated
among any Series or Classes in the manner described in Section 5(a) of
this Article. Subsequent to such initial contribution of capital,
Shares (including Shares which may have been redeemed or repurchased
by the Trust) may be issued or sold at a price which will net the
relevant Series or Class, as the case may be, before paying any taxes
in connection with such issue or sale, not less than the net asset
value (as defined in Article X, Section 3) thereof; provided, however,
that the Trustees may in their discretion impose a sales charge upon
investments in the Trust.
Section 4. No Pre-emptive Rights.
Shareholders shall have no pre-emptive or other right to subscribe
to any additional Shares or other securities issued by the Trust.
Section 5. Establishment and Designation of Series or Class.
Without limiting the authority of the Trustees set forth in
Article XII, Section 8, inter alia, to establish and designate any
-9-
additional Series or Class or to modify the rights and preferences of
any existing Series or Class, Prime Cash Series, Government Cash
Series and Municipal Cash Series shall be, and are established and
designated as, a Series of the Trust.
Shares of any Series or Class established in this Section 5 shall
have the following relative rights and preferences:
(a) Assets belonging to Series or Class. All consideration
received by the Trust for the issue or sale of Shares of a
particular Series or Class, together with all assets in which such
consideration is invested or reinvested, all income, earnings,
profits, and proceeds thereof from whatever source derived,
including, without limitation, any proceeds derived from the sale,
exchange or liquidation of such assets, and any funds or payments
derived from any reinvestment of such proceeds in whatever form the
same may be, shall irrevocably belong to that Series or Class for
all purposes, subject only to the rights of creditors, and shall be
so recorded upon the books of account of the Trust. Such
consideration, assets, income, earnings, profits and proceeds
thereof, from whatever source derived, including, without
limitation, any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from
any reinvestment of such proceeds, in whatever form the same may
be, are herein referred to as "assets belonging to" that Series or
Class. In the event that there are any assets, income, earnings,
profits and proceeds thereof, funds or payments which are not
readily identifiable as belonging to any particular Series or Class
(collectively "General Assets"), the Trustees shall allocate such
General Assets to, between or among any one or more of the Series
or Classes established and designated from time to time in such
-10-
manner and on such basis as they, in their sole discretion, deem
fair and equitable, and any General Assets so allocated to a
particular Series or Class shall belong to that Series or Class.
Each such allocation by the Trustees shall be conclusive and
binding upon the Shareholders of all Series or Classes for all
purposes.
(b) Liabilities Belonging to Series or Class. The assets
belonging to each particular Series or Class shall be charged with
the liabilities of the Trust in respect to that Series or Class and
all expenses, costs, charges and reserves attributable to that
Series or Class, and any general liabilities of the Trust which are
not readily identifiable as belonging to any particular Series or
Class shall be allocated and charged by the Trustees to and among
any one or more of the Series or Classes established and designated
from time to time in such manner and on such basis as the Trustees
in their sole discretion deem fair and equitable. The liabilities,
expenses, costs, charges and reserves so charged to a Series or
Class are herein referred to as "liabilities belonging to" that
Series or Class. Each allocation of liabilities belonging to a
Series or Class by the Trustees shall be conclusive and binding
upon the Shareholders of all Series or Classes for all purposes.
(c) Dividends, Distributions, Redemptions, Repurchases
and Indemnification. Notwithstanding any other provisions of this
Declaration, including, without limitation, Article X, no dividend
or distribution (including, without limitation, any distribution
paid upon termination of the Trust or of any Series or Class) with
respect to, nor any redemption or repurchase of, the Shares of any
Series or Class shall be affected by the Trust other than from the
assets belonging to such Series or Class, nor except as
-11-
specifically provided in Section 1 of Article XI hereof, shall any
Shareholder of any particular Series or Class otherwise have any
right or claim against the assets belonging to any other Series or
Class except to the extent that such Shareholder has such a right
or claim hereunder as a Shareholder of such other Series or Class.
(d) Voting. Notwithstanding any of the other provisions of
this Declaration, including, without limitation, Section 1 of
Article VIII, only Shareholders of a particular Series or Class
shall be entitled to vote on any matters affecting such Series or
Class. Except with respect to matters as to which any particular
Series or Class is affected, all of the Shares of each Series or
Class shall, on matters as to which such Series or Class is
entitled to vote, vote with other Series or Classes so entitled as
a single class. Notwithstanding the foregoing, with respect to
matters which would otherwise be voted on by two or more Series or
Classes as a single class, the Trustees may, in their sole
discretion, submit such matters to the Shareholders of any or all
such Series or Classes, separately.
(e) Fraction. Any fractional Share of a Series or Class
shall carry proportionately all the rights and obligations of a
whole Share of that Series or Class, including rights with respect
to voting, receipt of dividends and distributions, redemption of
Shares and termination of the Trust or of any Series or Class.
(f) Exchange Privilege. The Trustees shall have the
authority to provide that the holders of Shares of any Series or
Class shall have the right to exchange said Shares for Shares of
one or more other Series or Classes in accordance with such
requirements and procedures as may be established by the Trustees.
-12-
(g) Combination of Series or Classes. The Trustees shall
have the authority, without the approval of the Shareholders of any
Series or Class, unless otherwise required by applicable law, to
combine the assets and liabilities belonging to a single Series or
Class with the assets and liabilities of one or more other Series
or Classes.
(h) Elimination of Series or Classes. At any time that
there are no Shares outstanding of any particular Series or Class
previously established and designated, the Trustees may amend this
Declaration of Trust to abolish that Series or Class and to rescind
the establishment and designation thereof.
ARTICLE IV
THE TRUSTEES
Section 1. Management of the Trust.
The business and affairs of the Trust shall be managed by the
Trustees, and they shall have all powers necessary and desirable to
carry out that responsibility. The Trustees who shall serve until the
election of Trustees at the Meeting of Shareholders subsequent to the
initial public offering of Shares shall be John F. Donahue, William J.
Copeland, Glen R. Johnson, James E. Dowd, Lawrence D. Ellis, M.D.,
Edward L. Flaherty, Jr., J. Joseph Maloney, Jr., Gregor F. Meyer,
Wesley W. Posvar, Marjorie P. Smuts, and John A. Staley, IV.
Section 2. Election of Trustees at Meeting of Shareholders.
-13-
On a date fixed by the Trustees, which shall be subsequent to the
initial public offering of Shares, the Shareholders shall elect
Trustees. The number of Trustees shall be determined by the Trustees
pursuant to Article IV, Section 5.
Section 3. Term of Office of Trustees.
The Trustees shall hold office during the lifetime of this Trust,
and until its termination as hereinafter provided; except (a) that any
Trustee may resign his office at any time by written instrument signed
by him and delivered to the other Trustees, which shall take effect
upon such delivery or upon such later date as is specified therein;
(b) that any Trustee may be removed at any time by written instrument
signed by at least two-thirds of the number of Trustees prior to such
removal, specifying the date when such removal shall become effective;
(c) that any Trustee who requests in writing to be retired or who has
become mentally or physically incapacitated may be retired by written
instrument signed by a majority of the other Trustees, specifying the
date of his retirement; and (d) a Trustee may be removed at any
special meeting of Shareholders of the Trust by a vote of two-thirds
of the outstanding Shares.
Section 4. Termination of Service and Appointment of Trustees.
In case of the death, resignation, retirement, removal or mental
or physical incapacity of any of the Trustees, or in case a vacancy
shall, by reason of an increase in number, or for any other reason,
exist, the remaining Trustees shall fill such vacancy by appointing
such other person as they in their discretion shall see fit. Such
appointment shall be effected by the signing of a written instrument
by a majority of the Trustees in office. An appointment of a Trustee
-14-
may be made by the Trustees then in office in anticipation of a
vacancy to occur by reason of retirement, resignation or increase in
number of Trustees effective at a later date, provided that said
appointment shall become effective only at or after the effective date
of said retirement, resignation or increase in number of Trustees. As
soon as any Trustee so appointed shall have accepted this Trust, the
trust estate shall vest in the new Trustee or Trustees, together with
the continuing Trustees, without any further act or conveyance, and he
shall be deemed a Trustee hereunder. Any appointment authorized by
this Section 4 is subject to the provisions of Section 16(a) of the
1940 Act.
Section 5. Number of Trustees.
The number of Trustees, not less than three (3) nor more than
twenty (20) serving hereunder at any time, shall be determined by the
Trustees themselves.
Whenever a vacancy in the Board of Trustees shall occur, until
such vacancy is filled or while any Trustee is physically or mentally
incapacitated, the other Trustees shall have all the powers hereunder
and the certificate signed by a majority of the other Trustees of such
vacancy, absence or incapacity, shall be conclusive, provided,
however, that no vacancy which reduces the number of Trustees below
three (3) shall remain unfilled for a period longer than six calendar
months.
Section 6. Effect of Death, Resignation, etc. of a Trustee.
The death, resignation, retirement, removal, or mental or physical
incapacity of the Trustees, or any one of them, shall not operate to
-15-
annul the Trust or to revoke any existing agency created pursuant to
the terms of this Declaration of Trust.
Section 7. Ownership of Assets.
The assets belonging to each Series or Class shall be held
separate and apart from any assets now or hereafter held in any
capacity other than as Trustee hereunder by the Trustees or any
successor Trustee. All of the assets belonging to each Series or
Class or owned by the Trust shall at all times be considered as vested
in the Trustees. No Shareholder shall be deemed to have a severable
ownership interest in any individual asset belonging to any Series or
Class or owned by the Trust or any right of partition or possession
thereof, but each Shareholder shall have a proportionate undivided
beneficial interest in a Series or Class.
ARTICLE V
POWERS OF THE TRUSTEES
Section 1. Powers.
The Trustees in all instances shall act as principals, and are and
shall be free from the control of the Shareholders. The Trustees
shall have full power and authority to do any and all acts and to make
and execute any and all contracts and instruments that they may
consider necessary or appropriate in connection with the management of
the Trust or a Series or Class. The Trustees shall not be bound or
limited by present or future laws or customs in regard to trust
investments, but shall have full authority and power to make any and
all investments which they, in their uncontrolled discretion, shall
deem proper to accomplish the purpose of this Trust. Without limiting
-16-
the foregoing, the Trustees shall have the following specific powers
and authority, subject to any applicable limitation in this
Declaration of Trust or in the By-Laws of the Trust:
(a) To buy, and invest funds in their hands in securities
including, but not limited to, common stocks, preferred stocks,
bonds, debentures, warrants and rights to purchase securities,
options, certificates of beneficial interest, money market
instruments, notes or other evidences of indebtedness issued by any
corporation, trust or association, domestic or foreign, or issued
or guaranteed by the United States of America or any agency or
instrumentality thereof, by the government of any foreign country,
by any State of the United States, or by any political subdivision
or agency or instrumentality of any State or foreign country, or in
"when-issued" or "delayed-delivery" contracts for any such
securities, or in any repurchase agreement or reverse repurchase
agreement, or in debt instruments, commodities, commodity contracts
and options thereon, or to retain assets belonging to each and
every Series or Class in cash, and from time to time to change the
investments of the assets belonging to each Series or Class;
(b) To adopt By-Laws of the Trust not inconsistent with the
Declaration of Trust providing for the conduct of the business of
the Trust and to amend and repeal them to the extent that they do
not reserve that right to the Shareholders;
(c) To elect and remove such officers of the Trust and
appoint and terminate such agents of the Trust as they consider
appropriate;
-17-
(d) To appoint or otherwise engage a bank or trust company
as custodian of any assets belonging to any Series or Class subject
to any conditions set forth in this Declaration of Trust or in the
By-Laws;
(e) To appoint or otherwise engage transfer agents, dividend
disbursing agents, Shareholder servicing agents, investment
advisers, sub-investment advisers, principal underwriters,
administrative service agents, and such other agents as the
Trustees may from time to time appoint or otherwise engage;
(f) To provide for the distribution of any Shares of any
Series or Class either through a principal underwriter in the
manner hereinafter provided for or by the Trust itself, or both;
(g) To set record dates in the manner hereinafter provided
for;
(h) To delegate such authority as they consider desirable to
a committee or committees composed of Trustees, including without
limitation, an Executive Committee, or to any officers of the Trust
and to any agent, custodian or underwriter;
(i) To sell or exchange any or all of the assets belonging
to one or more Series or Classes, subject to the provisions of
Article XII, Section 4(b) hereof;
(j) To vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities or property;
and to execute and deliver powers of attorney to such person or
persons as the Trustees shall deem proper, granting to such person
-18-
or persons such power and discretion with relation to securities or
property as the Trustees shall deem proper;
(k) To exercise powers and rights of subscription or
otherwise which in any manner arise out of ownership of securities;
(l) To hold any security or property in a form not
indicating any trust, whether in bearer, unregistered or other
negotiable form; or either in its own name or in the name of a
custodian or a nominee or nominees, subject in either case to
proper safeguards according to the usual practice of Massachusetts
trust companies or investment companies;
(m) To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or
concern, any security of which belongs to any Series or Class; to
consent to any contract, lease, mortgage, purchase, or sale of
property by such corporation or concern, and to pay calls or
subscriptions with respect to any security which belongs to any
Series or Class;
(n) To engage in and to prosecute, compound, compromise,
abandon, or adjust, by arbitration, or otherwise, any actions,
suits, proceedings, disputes, claims, demands, and things relating
to the Trust, and out of the assets belonging to any Series or
Class to pay, or to satisfy, any debts, claims or expenses incurred
in connection therewith, including those of litigation, upon any
evidence that the Trustees may deem sufficient (such powers shall
include without limitation any actions, suits, proceedings,
disputes, claims, demands and things relating to the Trust wherein
any of the Trustees may be named individually and the subject
-19-
matter of which arises by reason of business for or on behalf of
the Trust);
(o) To make distributions of income and of capital gains to
Shareholders;
(p) To borrow money;
(q) From time to time to issue and sell the Shares of any
Series or Class either for cash or for property whenever and in
such amounts as the Trustees may deem desirable, but subject to the
limitation set forth in Section 3 of Article III.
(r) To purchase insurance of any kind, including, without
limitation, insurance on behalf of any person who is or was a
Trustee, officer, employee or agent of the Trust, or is or was
serving at the request of the Trust as a trustee, director,
officer, agent or employee of another corporation, partnership,
joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity or
arising out of his status as such.
(s) To sell, exchange, lend, pledge, mortgage, hypothecate,
lease, or write options with respect to or otherwise deal in any
property rights relating to any or all of the assets belonging to
any Series or Class.
The Trustees shall have all of the powers set forth in this
Section 1 with respect to all assets and liabilities of each Series
and Class.
-20-
Section 2. Principal Transactions.
The Trustees shall not cause the Trust on behalf of any Series or
Class to buy any securities (other than Shares) from or sell any
securities (other than Shares) to, or lend any assets belonging to any
Series or Class to any Trustee or officer or employee of the Trust or
any firm of which any such Trustee or officer is a member acting as
principal unless permitted by the 1940 Act, but the Trust may employ
any such other party or any such person or firm or company in which
any such person is an Interested Person in any capacity not prohibited
by the 1940 Act.
Section 3. Trustees and Officers as Shareholders.
Any Trustee, officer or other agent of the Trust or any Series or
Class may acquire, own and dispose of Shares of any Series or Class to
the same extent as if he were not a Trustee, officer or agent; and the
Trustees may issue and sell or cause to be issued or sold Shares of
any Series or Class to and buy such Shares from any such person or any
firm or company in which he is an interested person subject only to
the general limitations herein contained as to the sale and purchase
of such Shares; and all subject to any restrictions which may be
contained in the By-Laws.
Section 4. Parties to Contract.
The Trustees may enter into any contract of the character
described in Article VII or in Article IX hereof or any other capacity
not prohibited by the 1940 Act with any corporation, firm, trust or
association, although one or more of the Shareholders, Trustees,
officers, employees or agents of the Trust or any Series or Class or
-21-
their affiliates may be an officer, Director, Trustee, Shareholder or
Interested Person of such other party to the contract, and no such
contract shall be invalidated or rendered voidable by reason of the
existence of any such relationship, nor shall any person holding such
relationship be liable merely by reason of such relationship for any
loss or expense to the Trust or any Series or Class under or by reason
of said contract or accountable for any profit realized directly or
indirectly therefrom, in the absence of actual fraud. The same person
(including a firm, corporation, trust or association) may be the other
party to contracts entered into pursuant to Article VII or Article IX
or any other capacity not prohibited by the 1940 Act, and any
individual may be financially interested or otherwise an Interested
Person of persons who are parties to any or all of the contracts
mentioned in this Section 4.
ARTICLE VI
TRUSTEES' EXPENSES AND COMPENSATION
Section 1. Trustee Reimbursement.
The Trustees shall be reimbursed from the assets belonging to each
particular Series or Class for all of such Trustees' expenses as such
expenses are allocated to and among any one or more of the Series or
Classes pursuant to Article III, Section 5(b), including, without
limitation, expenses of organizing the Trust or any Series or Class
and continuing its or their existence; fees and expenses of Trustees
and officers of the Trust; fees for investment advisory services,
administrative services and principal underwriting services provided
for in Article VII, Sections 1, 2 and 3; fees and expenses of
preparing and printing Registration Statements under the Securities
Act of 1933 and the 1940 Act and any amendments thereto; expenses of
-22-
registering and qualifying the Trust and any Series or Class and the
Shares of any Series or Class under federal and state laws and
regulations; expenses of preparing, printing and distributing
prospectuses and any amendments thereto sent to Shareholders,
underwriters, broker-dealers and to investors who may be considering
the purchase of Shares; expenses of registering, licensing or other
authorization of the Trust or any Series or Class as a broker-dealer
and of its or their officers as agents and salesmen under federal and
state laws and regulations; interest expense, taxes, fees and
commissions of every kind; expenses of issue (including cost of share
certificates), purchases, repurchases and redemptions of Shares,
including expenses attributable to a program of periodic issue;
charges and expenses of custodians, transfer agents, dividend
disbursing agents, Shareholder servicing agents and registrars;
printing and mailing costs; auditing, accounting and legal expenses;
reports to Shareholders and governmental officers and commissions;
expenses of meetings of Shareholders and proxy solicitations therefor;
insurance expenses; association membership dues and nonrecurring items
as may arise, including all losses and liabilities by them incurred in
administering the Trust and any Series or Class, including expenses
incurred in connection with litigation, proceedings and claims and the
obligations of the Trust under Article XI hereof and the By-Laws to
indemnify its Trustees, officers, employees, Shareholders and agents,
and any contract obligation to indemnify principal underwriters under
Section 3 of Article VII; and for the payment of such expenses,
disbursements, losses and liabilities, the Trustees shall have a lien
on the assets belonging to each Series or Class prior to any rights or
interests of the Shareholders of any Series or Class. This section
shall not preclude the Trust from directly paying any of the
aforementioned fees and expenses.
-23-
Section 2. Trustee Compensation.
The Trustees shall be entitled to compensation from the Trust from
the assets belonging to any Series or Class for their respective
services as Trustees, to be determined from time to time by vote of
the Trustees, and the Trustees shall also determine the compensation
of all officers, consultants and agents whom they may elect or
appoint. The Trust may pay out of the assets belonging to any Series
or Class any Trustee or any corporation, firm, trust or other entity
of which a Trustee is an Interested Person for services rendered in
any capacity not prohibited by the 1940 Act, and such payments shall
not be deemed compensation for services as a Trustee under the first
sentence of this Section 2 of Article VI.
ARTICLE VII
INVESTMENT ADVISER, ADMINISTRATIVE SERVICES,
PRINCIPAL UNDERWRITER AND TRANSFER AGENT
Section 1. Investment Adviser.
Subject to a Majority Shareholder Vote by the relevant Series or
Class, the Trustees may in their discretion from time to time enter
into an investment advisory contract whereby the other party to such
contract shall undertake to furnish the Trustees investment advisory
services for such Series or Class upon such terms and conditions and
for such compensation as the Trustees may in their discretion
determine. Subject to a Majority Shareholder Vote by the relevant
Series or Class, the investment adviser may enter into a sub-
investment advisory contract to receive investment advice and/or
statistical and factual information from the sub-investment adviser
for such Series or Class upon such terms and conditions and for such
-24-
compensation as the Trustees, in their discretion, may agree.
Notwithstanding any provisions of this Declaration of Trust, the
Trustees may authorize the investment adviser or sub-investment
adviser or any person furnishing administrative personnel and services
as set forth in Article VII, Section 2 (subject to such general or
specific instructions as the Trustees may from time to time adopt) to
effect purchases, sales or exchanges of portfolio securities belonging
to a Series or Class on behalf of the Trustees or may authorize any
officer or Trustee to effect such purchases, sales, or exchanges
pursuant to recommendations of the investment adviser (and all without
further action by the Trustees). Any such purchases, sales and
exchanges shall be deemed to have been authorized by the Trustees.
The Trustees may also authorize the investment adviser to determine
what firms shall be employed to effect transactions in securities for
the account of a Series or Class and to determine what firms shall
participate in any such transactions or shall share in commissions or
fees charged in connection with such transactions.
Section 2. Administrative Services.
The Trustees may in their discretion from time to time contract
for administrative personnel and services whereby the other party
shall agree to provide the Trustees administrative personnel and
services to operate the Trust or a Series or Class on a daily basis,
on such terms and conditions as the Trustees may in their discretion
determine. Such services may be provided by one or more entities.
Section 3. Principal Underwriter.
The Trustees may in their discretion from time to time enter into
an exclusive or nonexclusive contract or contracts providing for the
-25-
sale of the Shares of a Series or Class to net such Series or Class
not less than the amount provided in Article III, Section 3 hereof,
whereby a Series or Class may either agree to sell the Shares to the
other party to the contract or appoint such other party its sales
agent for such shares. In either case, the contract shall be on such
terms and conditions (including indemnification of principal
underwriters allowable under applicable law and regulation) as the
Trustees may in their discretion determine not inconsistent with the
provisions of this Article VII; and such contract may also provide for
the repurchase or sale of Shares of a Series or Class by such other
party as principal or as agent of the Trust and may provide that the
other party may maintain a market for shares of a Series or Class.
Section 4. Transfer Agent.
The Trustees may in their discretion from time to time enter into
transfer agency and shareholder services contracts whereby the other
party shall undertake to furnish a transfer agency and shareholder
services. The contracts shall be on such terms and conditions as the
Trustees may in their discretion determine not inconsistent with the
provisions of this Declaration of Trust or of the By-Laws. Such
services may be provided by one or more entities.
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 1. Voting Powers.
Subject to the provisions set forth in Article III, Section 5(d),
the Shareholders shall have power to vote, (i) for the election of
Trustees as provided in Article IV, Section 2; (ii) for the removal of
-26-
Trustees as provided in Article IV, Section 3(d); (iii) with respect
to any investment adviser or sub-investment adviser as provided in
Article VII, Section 1; (iv) with respect to the amendment of this
Declaration of Trust as provided in Article XII, Section 7; (v) to the
same extent as the shareholders of a Massachusetts business
corporation as to whether or not a court action, proceeding or claim
should be brought or maintained derivatively or as a class action on
behalf of the Trust or the Shareholders; and (vi) with respect to such
additional matters relating to the Trust as may be required by law, by
this Declaration of Trust, or the By-Laws of the Trust or any
regulation of the Trust or the Commission or any State, or as the
Trustees may consider desirable. Each whole Share shall be entitled
to one vote as to any matter on which it is entitled to vote, and each
fractional Share shall be entitled to a proportionate fractional vote.
There shall be no cumulative voting in the election of Trustees.
Shares may be voted in person or by proxy. Until Shares of a Series
or Class are issued, the Trustees may exercise all rights of
Shareholders of such Series or Class with respect to matters affecting
such Series or Class, and may take any action with respect to the
Trust or such Series or Class required or permitted by law, this
Declaration of Trust or any By-Laws of the Trust to be taken by
Shareholders.
Section 2. Meetings.
A Shareholders meeting shall be held as specified in Section 2 of
Article IV at the principal office of the Trust or such other place as
the Trustees may designate. Special meetings of the Shareholders may
be called by the Trustees or the Chief Executive Officer of the Trust
and shall be called by the Trustees upon the written request of
Shareholders owning at least one-tenth of the outstanding Shares of
-27-
all Series and Classes entitled to vote. Shareholders shall be
entitled to at least fifteen days' notice of any meeting.
Section 3. Quorum and Required Vote.
Except as otherwise provided by law, to constitute a quorum for
the transaction of any business at any meeting of Shareholders there
must be present, in person or by proxy, holders of more than fifty
percent of the total number of outstanding Shares of all Series and
Classes entitled to vote at such meeting. When any one or more Series
or Classes is entitled to vote as a single Series or Class, more than
fifty percent of the shares of each such Series or Class entitled to
vote shall constitute a quorum at a Shareholder's meeting of that
Series or Class. If a quorum shall not be present for the purpose of
any vote that may properly come before the meeting, the Shares present
in person or by proxy and entitled to vote at such meeting on such
matter may, by plurality vote, adjourn the meeting from time to time
to such place and time without further notice than by announcement to
be given at the meeting until a quorum entitled to vote on such matter
shall be present, whereupon any such matter may be voted upon at the
meeting as though held when originally convened. Subject to any
applicable requirement of law or of this Declaration of Trust or the
By-Laws, a plurality of the votes cast shall elect a Trustee, and all
other matters shall be decided by a majority of the votes cast and
entitled to vote thereon.
Section 4. Additional Provisions.
The By-Laws may include further provisions for Shareholders' votes
and meetings and related matters.
-28-
ARTICLE IX
CUSTODIAN
The Trustees may, in their discretion, from time to time enter into
contracts providing for custodial and accounting services to the Trust or
any Series or Class. The contracts shall be on the terms and conditions as
the Trustees may in their discretion determine not inconsistent with the
provisions of this Declaration of Trust or of the By-Laws. Such services
may be provided by one or more entities, including one or more sub-
custodians.
ARTICLE X
DISTRIBUTIONS AND REDEMPTIONS
Section 1. Distributions.
(a) The Trustees may from time to time declare and pay
dividends to the Shareholders of any Series or Class, and the
amount of such dividends and the payment of them shall be wholly in
the discretion of the Trustees. Such dividends may be accrued and
automatically reinvested in additional Shares (or fractions
thereof) of the relevant Series or Class or paid in cash or
additional Shares of such Series or Class, all upon such terms and
conditions as the Trustees may prescribe.
(b) The Trustees may distribute in respect of any fiscal
year as dividends and as capital gains distributions, respectively,
amounts sufficient to enable any Series or Class to qualify as a
regulated investment company to avoid any liability for federal
income taxes in respect of that year.
-29-
(c) The decision of the Trustees as to what constitutes
income and what constitutes principal shall be final, and except as
specifically provided herein the decision of the Trustees as to
what expenses and charges of any Series or Class shall be charged
against principal and what against the income shall be final. Any
income not distributed in any year may be permitted to accumulate
and as long as not distributed may be invested from time to time in
the same manner as the principal funds of any Series or Class.
(d) All dividends and distributions on Shares of a
particular Series or Class shall be distributed pro rata to the
holders of that Series or Class in proportion to the number of
Shares of that Series or Class held by such holders and recorded on
the books of the Trust or its transfer agent at the date and time
of record established for that payment.
Section 2. Redemptions and Repurchases.
(a) In case any Shareholder of record of any Series or Class
at any time desires to dispose of Shares of such Series or Class
recorded in his name, he may deposit a written request (or such
other form of request as the Trustees may from time to time
authorize) requesting that the Trust purchase his Shares, together
with such other instruments or authorizations to effect the
transfer as the Trustees may from time to time require, at the
office of the Transfer Agent, and the Trust shall purchase his
Shares out of assets belonging to such Series or Class. The
purchase price shall be the net asset value of his shares reduced
by any redemption charge as the Trustees from time to time may
determine.
-30-
Payment for such Shares shall be made by the Trust to the
Shareholder of record within that time period required under the
1940 Act after the request (and, if required, such other
instruments or authorizations of transfer) is deposited, subject to
the right of the Trustees to postpone the date of payment pursuant
to Section 4 of this Article X. If the redemption is postponed
beyond the date on which it would normally occur by reason of a
declaration by the Trustees suspending the right of redemption
pursuant to Section 4 of this Article X, the right of the
Shareholder to have his Shares purchased by the Trust shall be
similarly suspended, and he may withdraw his request (or such other
instruments or authorizations of transfer) from deposit if he so
elects; or, if he does not so elect, the purchase price shall be
the net asset value of his Shares determined next after termination
of such suspension (reduced by any redemption charge), and payment
therefor shall be made within the time period required under the
1940 Act.
(b) The Trust may purchase Shares of a Series or Class by
agreement with the owner thereof at a purchase price not exceeding
the net asset value per Share (reduced by any redemption charge)
determined (1) next after the purchase or contract of purchase is
made or (2) at some later time.
(c) The Trust may pay the purchase price (reduced by any
redemption charge) in whole or in part by a distribution in kind of
securities from the portfolio of the relevant Series or Class,
taking such securities at the same value employed in determining
net asset value, and selecting the securities in such manner as the
Trustees may deem fair and equitable.
-31-
Section 3. Net Asset Value of Shares.
The net asset value of each Share of a Series or Class outstanding
shall be determined at such time or times as may be determined by or
on behalf of the Trustees. The power and duty to determine net asset
value may be delegated by the Trustees from time to time to one or
more of the Trustees or officers of the Trust, to the other party to
any contract entered into pursuant to Section 1 or 2 of Article VII or
to the custodian or to a transfer agent or other person designated by
the Trustees.
The net asset value of each Share of a Series or Class as of any
particular time shall be the quotient (adjusted to the nearer cent)
obtained by dividing the value, as of such time, of the net assets
belonging to such Series or Class (i.e., the value of the assets
belonging to such Series or Class less the liabilities belonging to
such Series or Class exclusive of capital and surplus) by the total
number of Shares outstanding of the Series or Class at such time in
accordance with the requirements of the 1940 Act and applicable
provisions of the By-Laws of the Trust in conformity with generally
accepted accounting practices and principles.
The Trustees may declare a suspension of the determination of net
asset value for the whole or any part of any period in accordance with
the 1940 Act.
Section 4. Suspension of the Right of Redemption.
The Trustees may declare a suspension of the right of redemption
or postpone the date of payment for the whole or any part of any
period in accordance with the 1940 Act.
-32-
Section 5. Trust's Right to Redeem Shares.
The Trust shall have the right to cause the redemption of Shares
of any Series or Class in any Shareholder's account for their then
current net asset value and promptly make payment to the shareholder
(which payment may be reduced by any applicable redemption charge), if
at any time the total investment in the account does not have a
minimum dollar value determined from time to time by the Trustees in
their sole discretion.
ARTICLE XI
LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 1. Limitation of Personal Liability and Indemnification of
Shareholders.
The Trustees, officers, employees or agents of the Trust shall
have no power to bind any Shareholder of any Series or Class
personally or to call upon such Shareholder for the payment of any sum
of money or assessment whatsoever, other than such as the Shareholder
may at any time agree to pay by way of subscription to any Shares or
otherwise.
No Shareholder or former Shareholder of any Series or Class shall
be liable solely by reason of his being or having been a Shareholder
for any debt, claim, action, demand, suit, proceeding, judgment,
decree, liability or obligation of any kind, against, or with respect
to the Trust or any Series or Class arising out of any action taken or
omitted for or on behalf of the Trust or such Series or Class, and the
Trust or such Series or Class shall be solely liable therefor and
-33-
resort shall be had solely to the property of the relevant Series or
Class of the Trust for the payment or performance thereof.
Each Shareholder or former Shareholder of any Series or Class (or
their heirs, executors, administrators or other legal representatives
or, in case of a corporate entity, its corporate or general successor)
shall be entitled to be indemnified and reimbursed by the Trust to the
full extent of such liability and the costs of any litigation or other
proceedings in which such liability shall have been determined,
including, without limitation, the fees and disbursements of counsel
if, contrary to the provisions hereof, such Shareholder or former
Shareholder of such Series or Class shall be held to be personally
liable. Such indemnification and reimbursement shall come exclusively
from the assets of the relevant Series or Class.
The Trust shall, upon request by a Shareholder or former
Shareholder, assume the defense of any claim made against any
Shareholder for any act or obligation of the Trust or any Series or
Class and satisfy any judgment thereon.
Section 2. Limitation of Personal Liability of Trustees,
Officers, Employees or Agents of the Trust.
No Trustee, officer, employee or agent of the Trust shall have the
power to bind any other Trustee, officer, employee or agent of the
Trust personally. The Trustees, officers, employees or agents of the
Trust incurring any debts, liabilities or obligations, or in taking or
omitting any other actions for or in connection with the Trust are,
and each shall be deemed to be, acting as Trustee, officer, employee
or agent of the Trust and not in his own individual capacity.
-34-
Trustees and officers of the Trust shall be liable for their
willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of the office of Trustee or
officer, as the case may be, and for nothing else.
Section 3. Express Exculpatory Clauses and Instruments.
The Trustees shall use every reasonable means to assure that all
persons having dealings with the Trust or any Series or Class shall be
informed that the property of the Shareholders and the Trustees,
officers, employees and agents of the Trust or any Series or Class
shall not be subject to claims against or obligations of the Trust or
any other Series or Class to any extent whatsoever. The Trustees
shall cause to be inserted in any written agreement, undertaking or
obligation made or issued on behalf of the Trust or any Series or
Class (including certificates for Shares of any Series or Class) an
appropriate reference to the provisions of this Declaration, providing
that neither the Shareholders, the Trustees, the officers, the
employees nor any agent of the Trust or any Series or Class shall be
liable thereunder, and that the other parties to such instrument shall
look solely to the assets belonging to the relevant Series or Class
for the payment of any claim thereunder or for the performance
thereof; but the omission of such provisions from any such instrument
shall not render any Shareholder, Trustee, officer, employee or agent
liable, nor shall the Trustee, or any officer, agent or employee of
the Trust or any Series or Class be liable to anyone for such
omission. If, notwithstanding this provision, any Shareholder,
Trustee, officer, employee or agent shall be held liable to any other
person by reason of the omission of such provision from any such
agreement, undertaking or obligation, the Shareholder, Trustee,
-35-
officer, employee or agent shall be indemnified and reimbursed by the
Trust.
ARTICLE XII
MISCELLANEOUS
Section 1. Trust is not a Partnership.
It is hereby expressly declared that a trust and not a partnership
is created hereby.
Section 2. Trustee Action Binding, Expert Advice, No Bond or Surety.
The exercise by the Trustees of their powers and discretions
hereunder shall be binding upon everyone interested. Subject to the
provisions of Article XI, the Trustees shall not be liable for errors
of judgment or mistakes of fact or law. The Trustees may take advice
of counsel or other experts with respect to the meaning and operation
of this Declaration of Trust, and subject to the provisions of Article
XI, shall be under no liability for any act or omission in accordance
with such advice or for failing to follow such advice. The Trustees
shall not be required to give any bond as such, nor any surety if a
bond is required.
Section 3. Establishment of Record Dates.
The Trustees may close the Share transfer books of the Trust
maintained with respect to any Series or Class for a period not
exceeding sixty (60) days preceding the date of any meeting of
Shareholders of the Trust or any Series or Class, or the date for the
payment of any dividend or the making of any distribution to
-36-
Shareholders, or the date for the allotment of rights, or the date
when any change or conversion or exchange of Shares of any Series or
Class shall go into effect; or in lieu of closing the Share transfer
books as aforesaid, the Trustees may fix in advance a date, not
exceeding sixty (60) days preceding the date of any meeting of
Shareholders of the Trust or any Series or Class, or the date for the
payment of any dividend or the making of any distribution to
Shareholders of any Series or Class, or the date for the
allotment of rights, or the date when any change or conversion or
exchange of Shares of any Series or Class shall go into effect, or the
last day on which the consent or dissent of Shareholders of any Series
or Class may be effectively expressed for any purpose, as a record
date for the determination of the Shareholders entitled to notice of,
and, to vote at, any such meeting and any adjournment thereof, or
entitled to receive payment of any such dividend or distribution, or
to any such allotment of rights, or to exercise the rights in respect
of any such change, conversion or exchange of shares, or to exercise
the right to give such consent or dissent, and in such case such
Shareholders and only such Shareholders as shall be Shareholders of
record on the date so fixed shall be entitled to such notice of, and
to vote at, such meeting, or to receive payment of such dividend or
distribution, or to receive such allotment or rights, or to exercise
such rights, as the case may be, notwithstanding, after such date
fixed aforesaid, any transfer of any Shares on the books of the Trust
maintained with respect to any Series or Class. Nothing in the
foregoing sentence shall be construed as precluding the Trustees from
setting different record dates for different Series or Classes.
Section 4. Termination of Trust.
-37-
(a) This Trust shall continue without limitation of time but
subject to the provisions of paragraphs (b), (c) and (d) of this
Section 4.
(b) The Trustees may, by majority action, with the approval
of the holders of more than fifty percent of the outstanding Shares
of each Series or Class entitled to vote and voting separately by
Series or Class, sell and convey the assets of the Trust or any
Series or Class to another trust or corporation. Upon making
provision for the payment of all liabilities, by assumption or
otherwise, the Trustees shall distribute the remaining proceeds
belonging to each Series or Class ratably among the holders of the
Shares of that Series or Class then outstanding.
(c) Subject to a Majority Shareholder Vote by such Series or
Class, the Trustees may at any time sell and convert into money all
the assets of the Trust or any Series or Class. Upon making
provision for the payment of all outstanding obligations, taxes and
other liabilities, accrued or contingent, belonging to each Series
or Class, the Trustees shall distribute the remaining assets
belonging to each Series or Class ratably among the holders of the
outstanding Shares of that Series or Class.
(d) Upon completion of the distribution of the remaining
proceeds of the remaining assets as provided in paragraphs (b) and
(c), the Trust or the applicable Series or Class shall terminate
and the Trustees shall be discharged of any and all further
liabilities and duties hereunder or with respect thereto and the
right, title and interest of all parties shall be canceled and
discharged.
-38-
Section 5. Offices of the Trust, Filing of Copies,
Headings, Counterparts.
The Trust shall maintain a usual place of business in
Massachusetts, which, initially, shall be 50 Congress Street, Boston,
Massachusetts, and shall continue to maintain an office at such
address unless changed by the Trustees to another location in
Massachusetts. The Trust may maintain other offices as the Trustees
may from time to time determine.
The original or a copy of this instrument and of each Declaration of
Trust supplemental hereto shall be kept at the office of the Trust
where it may be inspected by any Shareholder. A copy of this
instrument and of each supplemental declaration of trust shall be
filed by the Trustees with the Massachusetts Secretary of State and
the Boston City Clerk, as well as any other governmental office where
such filing may from time to time be required. Headings are placed
herein for convenience of reference only and in case of any conflict,
the text of this instrument, rather than the headings shall control.
This instrument may be executed in any number of counterparts each of
which shall be deemed an original.
Section 6. Applicable Law.
The Trust set forth in this instrument is created under and is to
be governed by and construed and administered according to the laws of
The Commonwealth of Massachusetts. The Trust shall be of the type
commonly called a Massachusetts business trust, and without limiting
the provisions hereof, the Trust may exercise all powers which are
ordinarily exercised by such a trust.
-39-
Section 7. Amendments -- General.
Prior to the initial issuance of Shares pursuant to Section 3 of
Article III, a majority of the Trustees then in office may amend or
otherwise supplement this instrument by making a Declaration of Trust
supplemental hereto, which thereafter shall form a part hereof.
Subsequent to such initial issuance of Shares, amendments or
supplements to this instrument may be authorized by a majority of the
Trustees then in office and by a Majority Shareholder Vote of all
Series and Classes then outstanding and entitled to vote thereon
(except that any amendments or supplements changing the name of the
Trust or pursuant to Section 8 hereunder may be made without
shareholder approval), or by any larger vote which may be required by
applicable law or this Declaration of Trust in any particular case,
which amendment or supplement thereafter shall form a part hereof.
Any such amendment or supplement (which may be in the form of a
complete restatement) may be evidenced by either (i) a supplemental
Declaration of Trust signed by at least a majority of the Trustees
then in office or (ii) by a certificate of the President and Secretary
of the Trust setting forth such amendment or supplement and certifying
that such amendment or supplement has been duly authorized by the
Trustees, and if required, by the shareholders. Copies of the
supplemental Declaration of Trust or the certificate of the President
and Secretary, as the case may be, shall be filed as specified in
Section 5 of this Article XII.
Section 8. Amendments -- Series.
The establishment and designation of any series or class of Shares
in addition to those established and designated in Section 5 of
Article III hereof shall be effective upon the execution by a majority
-40-
of the then Trustees of an amendment to this Declaration of Trust,
taking the form of a complete restatement or otherwise, setting forth
such establishment and designation and the relative rights and
preferences of any such Series or Class, or as otherwise provided in
such instrument.
Without limiting the generality of the foregoing, the Declaration
of the Trust may be amended to:
(a) create one or more Series or Classes of Shares (in addition
to any Series or Classes already existing or otherwise) with such
rights and preferences and such eligibility requirements for
investment therein as the Trustees shall determine and reclassify
any or all outstanding Shares as Shares of particular Series or
Classes in accordance with such eligibility requirements;
(b) combine two or more Series or Classes of Shares into a single
Series or Class on such terms and conditions as the Trustees shall
determine;
(c) change or eliminate any eligibility requirements for
investment in Shares of any Series or Class, including without
limitation the power to provide for the issue of Shares of any
Series or Class in connection with any merger or consolidation of
the Trust with another trust or company or any acquisition by the
Trust of part or all of the assets of another trust or company;
(d) change the designation of any Series or Class of Shares;
(e) change the method of allocating dividends among the various
Series and Classes of Shares;
-41-
(f) allocate any specific assets or liabilities of the Trust or
any specific items of income or expense of the Trust to one or more
Series and Classes of Shares;
(g) specifically allocate assets to any or all Series or Classes
of Shares or create one or more additional Series or Classes of
Shares which are preferred over all other Series or Classes of
Shares in respect of assets specifically allocated thereto or any
dividends paid by the Trust with respect to any net income, however
determined, earned from the investment and reinvestment of any
assets so allocated or otherwise and provide for any special voting
or other rights with respect to such Series or Classes.
IN WITNESS WHEREOF, the undersigned have executed this instrument the
day and year first above written.
/s/ John F. Donahue /s/Edward L. Flaherty, Jr.
John F. Donahue Edward L. Flaherty, Jr.
/s/ William J. Copeland /s/ J. Joseph Maloney, Jr.
William J. Copeland J. Joseph Maloney, Jr.
/s/ Glen R. Johnson /s/ Gregor F. Meyer
Glen R. Johnson Gregor F. Meyer
-42-
/s/ James E. Dowd /s/ Wesley W. Posvar
James E. Dowd Wesley W. Posvar
/s/ Lawrence D. Ellis, M.D. /s/ Marjorie P. Smuts
Lawrence D. Ellis, M.D. Marjorie P. Smuts
/s/ John A. Staley, IV
John A. Staley, IV
COMMONWEALTH OF PENNSYLVANIA )
) ss:
COUNTY OF ALLEGHENY )
I hereby certify that on September 1, 1989, before me, the subscriber,
a Notary Public of the Commonwealth of Pennsylvania, in the County of
Allegheny, personally appeared JOHN F. DONAHUE, WILLIAM J. COPELAND,
LAWRENCE D. ELLIS, M.D., EDWARD L. FLAHERTY, JR., GLEN R. JOHNSON, GREGOR
F. MEYER, WESLEY W. POSVAR, MARJORIE P. SMUTS, AND JOHN A. STALEY, IV., who
acknowledged the foregoing Declaration of Trust to be their act.
Witness my hand and notarial seal the day and year above written.
/s/ Loretta Y. Crum
Notary Public
-43-
COMMONWEALTH OF MASSACHUSETTS )
) ss:
COUNTY OF SUFFOLK )
I hereby certify that on September 1, 1989, before me, the subscriber, a
Notary Public of the Commonwealth of Massachusetts, in the County of
Suffolk, personally appeared JAMES E. DOWD and J. JOSEPH MALONEY, JR., who
acknowledged the foregoing Declaration of Trust to be their act.
Witness my hand and notarial seal the day and year above written.
/s/ Martha M. Campbell
Notary Public
Exhibit 1(i) under Form N-1A
Exhibit 3(a) under Item 601/Reg. S-K
FEDERATED MUNICIPAL TRUST
Amendment No. 2
to
DECLARATION OF TRUST
Dated September 1, 1989
THIS Declaration of Trust is amended as follows:
A. Strike the first paragraph of Section 5 of Article III in its
entirety from the Declaration of Trust and substitute in its place the
following:
`Section 5. Establishment and Designation of Series or Class.
Without limiting the authority of the Trustees set forth in
Article XII, Section 8, inter alia, to establish and designate
any additional Series of Class or to modify the rights and
preferences of any existing Series or Class, Connecticut
Municipal Cash Trust, Massachusetts Municipal Cash Trust, and
Pennsylvania Municipal Cash Trust shall be, and are established
and designated as, Series of the Trust.''
The undersigned Assistant Secretary of Federated Municipal trust
hereby certifies that the above stated amendment is a true and correct
Amendment to the Declaration of Trust, as adopted by the Trustees of the
Trust by unanimous consent on the 16th day of March, 1990.
WITNESS the due execution hereof this 16th day of March 1990.
/s/ Charles C. Torie
Charles C. Torie
Assistant Secretary
Exhibit 1(ii) under Form N-1A
Exhibit 3(a) under Item 601/Reg. S-K
FEDERATED MUNICIPAL TRUST
Amendment No. 3
to
DECLARATION OF TRUST
Dated September 1, 1989
THIS Declaration of Trust is amended as follows:
A. Strike the first paragraph of Section 5 of Article III in its
entirety from the Declaration of Trust and substitute in its place the
following:
`Section 5. Establishment and Designation of Series or Class.
Without limiting the authority of the Trustees set forth in
Article XII, Section 8, inter alia, to establish and designate
any additional Series of Class or to modify the rights and
preferences of any existing Series or Class, Connecticut
Municipal Cash Trust, Massachusetts Municipal Cash Trust, and
Pennsylvania Municipal Cash Trust shall be, and are established
and designated as, Series of the Trust.''
The undersigned Assistant Secretary of Federated Municipal Trust
hereby certifies that the above stated amendment is a true and correct
Amendment to the Declaration of Trust, as adopted by the Trustees of the
Trust by unanimous consent on the 19th day of June, 1990.
WITNESS the due execution hereof this 1st day of August 1990.
/s/ G. Andrew Bonnewell
G. Andrew Bonnewell
Assistant Secretary
Exhibit 1(iv) under Form N-1A
Exhibit 3(a) under Item 601/Reg. S-K
FEDERATED MUNICIPAL TRUST
Amendment No. 5
to
DECLARATION OF TRUST
Dated September 1, 1989
THIS Declaration of Trust is amended as follows:
A. Strike the first paragraph of Section 5 of Article III in its
entirety from the Declaration of Trust and substitute in its place the
following:
`Section 5. Establishment and Designation of Series or Class.
Without limiting the authority of the Trustees set forth in
Article XII, Section 8, inter alia, to establish and designate
any additional Series of Class or to modify the rights and
preferences of any existing Series or Class, the Series and
Classes of the Trust shall be and are established and designated
as, Connecticut Municipal Cash Trust Institutional Service
Shares, Connecticut Municipal Cash Trust Cash Series Shares,
Massachusetts Municipal Cash Trust Institutional Service Shares,
Massachusetts Municipal Cash Trust Cash Series Shares, Minnesota
Municipal Cash Trust Institutional Shares, Minnesota Municipal
Cash Trust Series Shares, New Jersey Municipal Cash Trust
Institutional Service Shares, new Jersey Municipal Cash Trust
Cash Series Shares, Ohio Municipal Cash Trust Institutional
Shares, Ohio Municipal Cash Trust Institutional Service Shares,
Pennsylvania Municipal Cash Trust Institutional Service Shares,
and Pennsylvania Municipal Cash Trust Cash Series Shares.''
The undersigned Assistant Secretary of Federated Municipal Trust
hereby certifies that the above stated amendment is a true and correct
Amendment to the Declaration of Trust, as adopted by the Trustees of the
Trust by unanimous consent on the 15th day of November, 1990.
WITNESS the due execution hereof this 12th day of December 1990.
/s/ G. Andrew Bonnewell
G. Andrew Bonnewell
Assistant Secretary
Exhibit 1(v) under Form N-1A
Exhibit 3(a) under Item 601/Reg. S-K
FEDERATED MUNICIPAL TRUST
Amendment No. 6
to
DECLARATION OF TRUST
Dated September 1, 1989
THIS Declaration of Trust is amended as follows:
A. Strike the first paragraph of Section 5 of Article III in its
entirety from the Declaration of Trust and substitute in its place the
following:
`Section 5. Establishment and Designation of Series or Class.
Without limiting the authority of the Trustees set forth in
Article XII, Section 8, inter alia, to establish and designate
any additional Series of Class or to modify the rights and
preferences of any existing Series or Class, the Series and
Classes of the Trust shall be and are established and designated
as, Connecticut Municipal Cash Trust Institutional Service
Shares, Connecticut Municipal Cash Trust Cash Series Shares,
Massachusetts Municipal Cash Trust Institutional Service Shares,
Massachusetts Municipal Cash Trust Cash Series Shares, Minnesota
Municipal Cash Trust Institutional Shares, Minnesota Municipal
Cash Trust Series Shares, New Jersey Municipal Cash Trust
Institutional Service Shares, new Jersey Municipal Cash Trust
Cash Series Shares, Ohio Municipal Cash Trust Institutional
Shares, Ohio Municipal Cash Trust Institutional Service Shares,
Pennsylvania Municipal Cash Trust Institutional Service Shares,
and Pennsylvania Municipal Cash Trust Cash Series Shares.''
The undersigned Assistant Secretary of Federated Municipal Trust
hereby certifies that the above stated amendment is a true and correct
Amendment to the Declaration of Trust, as adopted by the Trustees of the
Trust by unanimous consent on the 21st day of March, 1991.
WITNESS the due execution hereof this 21st day of March 1991.
/s/ Jay S. Neuman
Jay S. Neuman
Assistant Secretary
Exhibit 1(vi) under Form N-1A
Exhibit 3(a) under Item 601/Reg. S-K
FEDERATED MUNICIPAL TRUST
Amendment No. 7
to
DECLARATION OF TRUST
Dated September 1, 1989
THIS Declaration of Trust is amended as follows:
A. Strike the first paragraph of Section 5 of Article III in its
entirety from the Declaration of Trust and substitute in its place the
following:
`Section 5. Establishment and Designation of Series or Class.
Without limiting the authority of the Trustees set forth in
Article XII, Section 8, inter alia, to establish and designate
any additional Series of Class or to modify the rights and
preferences of any existing Series or Class, the Series and
Classes of the Trust shall be and are established and designated
as:
Connecticut Municipal Cash Trust Institutional Service Shares,
Connecticut Municipal Cash Trust Cash Series Shares,
Massachusetts Municipal Cash Trust Institutional Service
Shares,
Massachusetts Municipal Cash Trust BayFunds Shares,
Minnesota Municipal Cash Trust Institutional Shares,
Minnesota Municipal Cash Trust Series Shares,
New Jersey Municipal Cash Trust Institutional Service Shares,
New Jersey Municipal Cash Trust Cash Series Shares,
Ohio Municipal Cash Trust Institutional Shares,
Ohio Municipal Cash Trust Cash II Shares
Pennsylvania Municipal Cash Trust Institutional Service
Shares,
Pennsylvania Municipal Cash Trust Cash Series Shares.
The undersigned Assistant Secretary of Federated Municipal Trust
hereby certifies that the above stated amendment is a true and correct
Amendment to the Declaration of Trust, as adopted by the Trustees of the
Trust by unanimous consent on the 22nd day of August, 1991.
WITNESS the due execution hereof this 22nd day of August 1991.
/s/ James E. Banks
James E. Banks
Assistant Secretary
Exhibit 1(vii) under Form N-1A
Exhibit 3(a) under Item 601/Reg. S-K
FEDERATED MUNICIPAL TRUST
Amendment No. 8
to
DECLARATION OF TRUST
Dated September 1, 1989
THIS Declaration of Trust is amended as follows:
A. Strike the first paragraph of Section 5 of Article III and
substitute in its place the following:
`Section 5. Establishment and Designation of Series or Class.
Without limiting the authority of the Trustees set forth in
Article XII, Section 8, inter alia, to establish and designate
any additional Series of Class or to modify the rights and
preferences of any existing Series or Class, the Series and
Classes of the Trust shall be and are established and designated
as:
Connecticut Municipal Cash Trust
Institutional Service Shares
Cash Series Shares
Massachusetts Municipal Cash Trust
Institutional Service Shares
Minnesota Municipal Cash Trust
Institutional Shares
Cash Series Shares
New Jersey Municipal Cash Trust
Institutional Service Shares
Cash Series Shares
Ohio Municipal Cash Trust
Institutional Shares
Cash II Shares
Pennsylvania Municipal Cash Trust
Institutional Service Shares
Cash Series Shares
The undersigned Assistant Secretary of Federated Municipal Trust
hereby certifies that the above stated amendment is a true and correct
Amendment to the Declaration of Trust, as adopted by the Trustees of the
Trust by unanimous consent on the 11th day of February, 1992.
WITNESS the due execution hereof this 13th day of February 1992.
/s/ G. Andrew Bonnewell
G. Andrew Bonnewell
Assistant Secretary
Exhibit 1(viii) under Form N-1A
Exhibit 3(a) under Item 601/Reg. S-K
FEDERATED MUNICIPAL TRUST
Amendment No. 9
to
DECLARATION OF TRUST
Dated September 1, 1989
THIS Declaration of Trust is amended as follows:
A. Strike the first paragraph of Section 5 of Article III and
substitute in its place the following:
`Section 5. Establishment and Designation of Series or Class.
Without limiting the authority of the Trustees set forth in
Article XII, Section 8, inter alia, to establish and designate
any additional Series of Class or to modify the rights and
preferences of any existing Series or Class, the Series and
Classes shall be and are established and designated as:
Connecticut Municipal Cash Trust
Institutional Service Shares
Massachusetts Municipal Cash Trust
Institutional Service Shares
Minnesota Municipal Cash Trust
Institutional Shares
Cash Series Shares
New Jersey Municipal Cash Trust
Institutional Shares
Institutional Service Shares
Cash Series Shares
Ohio Municipal Cash Trust
Institutional Shares
Cash II Shares
Pennsylvania Municipal Cash Trust
Institutional Service Shares
Cash Series Shares
The undersigned Assistant Secretary of Federated Municipal Trust
hereby certifies that the above stated Amendment is a true and correct
Amendment to the Declaration of Trust, effective as of November 9, 1992,
as adopted by the Trustees of the Trust on the 27th day of August, 1992.
WITNESS the due execution hereof this 9th day of November, 1992.
/s/ G. Andrew Bonnewell
G. Andrew Bonnewell
Assistant Secretary
Exhibit 1(x) under Form N-1A
Exhibit 3(a) under Item 601/Reg. S-K
FEDERATED MUNICIPAL TRUST
Amendment No. 11
to
DECLARATION OF TRUST
Dated September 1, 1989
THIS Declaration of Trust is amended as follows:
Delete the first paragraph of Section 5 of Article III and substitute
in its place the following:
`Section 5. Establishment and Designation of Series or Class.
Without limiting the authority of the Trustees set forth in
Article XII, Section 8, inter alia, to establish and designate
any additional Series of Class or to modify the rights and
preferences of any existing Series or Class, the Series and
Classes shall be and are established and designated as:
Connecticut Municipal Cash Trust
Institutional Service Shares
Massachusetts Municipal Cash Trust
BayFunds Shares
Institutional Service Shares
Minnesota Municipal Cash Trust
Institutional Shares
Cash Series Shares
New Jersey Municipal Cash Trust
Institutional Shares
Institutional Service Shares
Cash Series Shares
Ohio Municipal Cash Trust
Institutional Shares
Cash II Shares
Pennsylvania Municipal Cash Trust
Institutional Service Shares
Cash Series Shares
Virginia Municipal Cash Trust
Institutional Shares
Institutional Service Shares
The undersigned Assistant Secretary of Federated Municipal Trust
hereby certifies that the above stated Amendment is a true and correct
Amendment to the Declaration of Trust as adopted by the Trustees of the
Trust on the 21st day of May, 1993.
WITNESS the due execution hereof this 24th day of May, 1993.
/s/ G. Andrew Bonnewell
G. Andrew Bonnewell
Assistant Secretary
Exhibit 1(xiv) under Form N-1A
Exhibit 3(a) under Item 601/Reg. S-K
FEDERATED MUNICIPAL TRUST
Amendment No. 15
to
DECLARATION OF TRUST
Dated September 1, 1989
THIS Declaration of Trust is amended as follows:
Delete the first paragraph of Section 5 of Article III and substitute in
its place the following:
`Section 5. Establishment and Designation of Series or Class.
Without limiting the authority of the Trustees set forth in Article
XII, Section 8, inter alia, to establish and designate any additional
Series or Class or to modify the rights and preferences of any
existing Series or Class, the Series and Classes shall be and are
established and designated as:
Alabama Municipal Cash Trust
California Municipal Cash Trust
Institutional Service Shares
Connecticut Municipal Cash Trust
Institutional Service Shares
Florida Municipal Cash Trust
Maryland Municipal Cash Trust
Massachusetts Municipal Cash Trust
BayFunds Shares
Institutional Service Shares
Minnesota Municipal Cash Trust
Cash Series Shares
Institutional Shares
New Jersey Municipal Cash Trust
Institutional Shares
Institutional Service Shares
New York Municipal Cash Trust
Cash II Shares
Institutional Service Shares
North Carolina Municipal Cash Trust
Ohio Municipal Cash Trust
Institutional Shares
Cash II Shares
Pennsylvania Municipal Cash Trust
Cash Series Shares
Institutional Service Shares
Virginia Municipal Cash Trust
Institutional Service Shares
Institutional Shares
The undersigned Assistant Secretary of Federated Municipal Trust hereby
certifies that the above stated Amendment is a true and correct Amendment to the
Declaration of Trust as adopted by the Trustees of the Trust on the 25th day of
August, 1994.
WITNESS the due execution hereof this 25th day of August, 1994.
/s/ G. Andrew Bonnewell
G. Andrew Bonnewell
Assistant Secretary
Exhibit 1(xv) under Form N-1A
Exhibit 3(a) under Item 601/Reg. S-K
FEDERATED MUNICIPAL TRUST
Amendment No. 16
to
DECLARATION OF TRUST
Dated September 1, 1989
THIS Declaration of Trust is amended as follows:
Delete the first paragraph of Section 5 of Article III and substitute
in its place the following:
`Section 5. Establishment and Designation of Series or Class.
Without limiting the authority of the Trustees set forth in
Article XII, Section 8, inter alia, to establish and designate
any additional Series or Class or to modify the rights and
preferences of any existing Series or Class, the Series and
Classes shall be and are established and designated as:
Alabama Municipal Cash Trust
California Municipal Cash Trust
Connecticut Municipal Cash Trust
Institutional Service Shares
Florida Municipal Cash Trust
Georgia Municipal Cash Trust
Maryland Municipal Cash Trust
Massachusetts Municipal Cash Trust
BayFunds Shares
Institutional Service Shares
Michigan Municipal Cash Trust
Minnesota Municipal Cash Trust
Cash Series Shares
Institutional Shares
New Jersey Municipal Cash Trust
Institutional Service Shares
Institutional Shares
New York Municipal Cash Trust
Cash II Shares
Institutional Service Shares
North Carolina Municipal Cash Trust
Ohio Municipal Cash Trust
Cash II Shares
Institutional Shares
Pennsylvania Municipal Cash Trust
Cash Series Shares
Institutional Service Shares
Institutional Shares
Virginia Municipal Cash Trust
Institutional Service Shares
Institutional Shares''
The undersigned Assistant Secretary of Federated Municipal Trust
hereby certifies that the above stated Amendment is a true and correct
Amendment to the Declaration of Trust, as adopted by the Trustees on the
18th day of May, 1995.
WITNESS the due execution hereof this 18th day of May, 1995.
/s/ G. Andrew Bonnewell
G. Andrew Bonnewell
Assistant Secretary
Exhibit 1(xvii) under Form N-1A
Exhibit 3(a) under Item 601/Reg. S-K
FEDERATED MUNICIPAL TRUST
Amendment No. 18
to
DECLARATION OF TRUST
Dated September 1, 1989
THIS Declaration of Trust is amended as follows:
Delete the first paragraph of Section 5 of Article III from the
Declaration of Trust and substitute in its place the following:
`Section 5. Establishment and Designation of Series or Class.
Without limiting the authority of the Trustees set forth in
Article XII, Section 8, inter alia, to establish and designate
any additional Series or Class or to modify the rights and
preferences of any existing Series or Class, the Series and
Classes shall be and are established and designated as:
Alabama Municipal Cash Trust
California Municipal Cash Trust
Institutional Service Shares
Institutional Shares
Connecticut Municipal Cash Trust
Institutional Service Shares
Florida Municipal Cash Trust
Cash II Shares
institutional Shares
Georgia Municipal Cash Trust
Maryland Municipal Cash Trust
Massachusetts Municipal Cash Trust
BayFunds Shares
Institutional Service Shares
Michigan Municipal Cash Trust
Institutional Service Shares
Institutional Shares
Minnesota Municipal Cash Trust
Cash Series Shares
Institutional Shares
New Jersey Municipal Cash Trust
Institutional Service Shares
Institutional Shares
New York Municipal Cash Trust
Cash II Shares
Institutional Service Shares
North Carolina Municipal Cash Trust
Ohio Municipal Cash Trust
Institutional Service Shares
Institutional Shares
Cash II Shares
Pennsylvania Municipal Cash Trust
Cash Series Shares
Institutional Service Shares
Institutional Shares
Tennessee Municipal Cash Trust
Institutional Service Shares
Institutional Shares
Virginia Municipal Cash Trust
Institutional Service Shares
Institutional Shares''
The undersigned Assistant Secretary of Federated Municipal Trust
hereby certifies that the above stated Amendment is a true and correct
Amendment to the Declaration of Trust, as adopted by the Board of Trustees
on the 29th day of February, 1996.
WITNESS the due execution hereof this 29th day of February, 1996.
/s/ Charles H. Field
Charles H. Field
Assistant Secretary
Exhibit 5(vii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
EXHIBIT M
to the
Investment Advisory Contract
FLORIDA MUNICIPAL CASH TRUST
For all services rendered by Adviser hereunder, the above-named Fund
of the Trust shall pay to Adviser and Adviser agrees to accept as full
compensation for all services rendered hereunder, an annual investment
advisory fee equal to .40 of 1% of the average daily net assets of the
Fund.
The portion of the fee based upon the average daily net assets of the
Fund shall be accrued daily at the rate of 1/365th of .40 of 1% applied to
the daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this 1st day of September, 1994.
Attest: FEDERATED MANAGEMENT
/s/ John W. McGonigle By:/s/ William D. Dawson, III
Secretary Executive Vice President
Attest: FEDERATED MUNICIPAL TRUST
/s/ S. Elliott Cohan By:/s/ J. Christopher Donahue
Assistant Secretary Vice President
Exhibit 5(x) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
EXHIBIT P
to the
Investment Advisory Contract
TENNESSEE MUNICIPAL CASH TRUST
For all services rendered by Adviser hereunder, the above-named Fund
of the Trust shall pay to Adviser and Adviser agrees to accept as full
compensation for all services rendered hereunder, an annual investment
advisory fee equal to .50 OF 1% of the average daily net assets of the
Fund.
The portion of the fee based upon the average daily net assets of the
Fund shall be accrued daily at the rate of 1/365TH OF .50 OF 1% applied to
the daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this 1st day of March, 1996.
Attest: FEDERATED MANAGEMENT
/s/ Stephen A. Keen /s/ William D. Dawson, III
By:
Stephen A. Keen William D. Dawson, III
Secretary Executive Vice President
Attest: FEDERATED MUNICIPAL TRUST
/s/ S. Elliott Cohan /s/ Richard B. Fisher
By:
S. Elliott Cohan Richard B. Fisher
Assistant Secretary Vice President
Exhibit 6(v) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
Exhibit E
FEDERATED MUNICIPAL TRUST
New Jersey Municipal Cash Trust
Institutional Shares
In consideration of the mutual convenants set forth in the
Distributor's Contract dated August 31, 1990, between Federated Municipal
Trust Federated Securities Corp., Federated Municipal Trust executes and
delivers this Exhibit on behalf of the Funds, and with respect to the
separate Classes of Shares thereof, first set forth in this Exhibit.
Witness the due execution hereof this 10th day of December, 1990.
ATTEST: FEDERATED MUNICIPAL TRUST
/s/ John W. McGonigle By: /s/ Glen R.
Johnson
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
/s/ S. Elliott Cohan By: /s/ Richard B.
Fisher
Secretary President
(SEAL)
Exhibit 6(vi) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
Exhibit F
FEDERATED MUNICIPAL TRUST
New Jersey Municipal Cash Trust
Institutional Service Shares
The following provisions are hereby incorporated and made part of the
Distributor's Contract dated the 31st day of August, 1990, between
Federated Municipal Trust and Federated Securities Corp. with respect to
the separate Classes of Shares thereof, first set forth in this Exhibit.
1. The Trust hereby appoints FSC to engage in activities principally
intended to result in the sale of shares of the Classes. Pursuant to this
appointment FSC is authorized to select a group of brokers (`Brokers'') to
sell shares of the above-listed Classes (`Shares''), at the current
offering price thereof as described and set forth in the respective
prospectuses of the Trust, and to render administrative support services to
the Trust and its shareholders. In addition, FSC is authorized to select a
group of Administrators (`Administrators'') to render administrative
support services to the Trust and its shareholders.
2. Administrative support services may include, but are not limited
to, the following eleven functions: (1)account openings: the Broker or
Administrator communicates account openings via computer terminals located
on the Broker or Administrator's premises; 2) account closings: the Broker
or Administrator communicates account closings via computer terminals; 3)
enter purchase transactions: purchase transactions are entered through the
Broker or Administrator's own personal computer or through the use of a
toll-free telephone number; 4) enter redemption transactions: Broker or
Administrator enters redemption transactions in the same manner as
purchases; 5) account maintenance: Broker or Administrator provides or
arranges to provide funds and receives funds for Trust share purchases and
redemptions, confirms and reconciles all transactions, reviews the activity
in the Trust's accounts, and provides training and supervision of its
personnel; 6) interest posting: Broker or Administrator posts and
reinvests dividends to the trust's accounts; 7) prospectus and shareholder
reports: Broker or Administrator maintains and distributes current copies
of prospectuses and shareholder reports;
8) advertisements: the Broker or Administrator continuously advertises the
availability of its services and products; 9) customer lists: the Broker
or Administrator continuously provides names of potential customers; 10)
design services: the Broker or Administrator continuously designs material
to send to customer and develops methods of making such materials
accessible to customers; and 11) consultation services: the Broker or
Administrator continuously provides information about the product needs of
customers.
3. During the term of this Agreement, the Trust will pay FSC for
services pursuant to this Agreement, a monthly fee computed at the annual
rate of .10% of the average aggregate net asset value of the Institutional
Services Shares and .50% of the average aggregate net asset value of the
Cash Series Shares of the New Jersey Municipal Cash Trust held during the
month. For the month in which this Agreement becomes effective or
terminates, there shall be an appropriate proportion of any fee payable on
the basis of the number of days that the Agreement is in effect during the
month.
4. FSC may from time-to-time and for such periods as it deems
appropriate reduce its compensation to the extent any Class expenses exceed
such lower expense limitation as FSC may, by notice to the Trust,
voluntarily declare to be effective.
5. FSC will enter into separate written agreements with various
firms to provide certain of the services set forth in paragraph 1 herein.
FSC, in its sole discretion, may pay Brokers and Administrators a periodic
fee in respect of Shares owned from time to time by their clients or
customers. The schedules of such fees and the basis upon which such fees
will be paid shall be determined from time to time by FSC in its sole
discretion.
6. FSC will prepare reports to the Board of Trustees of the Trust on
a quarterly basis showing amounts expensed hereunder including amounts paid
to Brokers and Administrators and the purpose for such payments.
In consideration of the mutual covenants set forth in the
Distributor's Contract dated August 31, 1990 between Federated Municipal
Trust and Federated Securities Corp., Federated Municipal Trust executes
and delivers this Exhibit thereof, first set forth in this Exhibit.
Witness the due execution hereof this 10th day of December, 1990.
ATTEST: FEDERATED MUNICIPAL TRUST
/s/ John W. McGonigle By: /s/ Glen R.
Johnson
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
/s/ S. Elliott Cohan By: /s/ Richard B. Fisher
Secretary President
(SEAL)
Exhibit 6(vii) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
Exhibit G
FEDERATED MUNICIPAL TRUST
Pennsylvania Municipal Cash Trust
Cash Series Shares
The following provisions are hereby incorporated and made part of the
Distributor's Contract dated the 31st day of August, 1990, between
Federated Municipal Trust and Federated Securities Corp. with respect to
separate Classes of Shares thereof, first set forth in this Exhibit.
1. The Trust hereby appoints FSC to engage in activities principally
intended to result in the sale of shares of the Classes. Pursuant to this
appointment FSC is authorized to select a group of brokers (`Brokers'') to
sell shares of the above-listed Classes (`Shares''), at the current
offering price thereof as described and set forth in the respective
prospectuses of the Trust, and to render administrative support services to
the Trust and its shareholders. In addition, FSC is authorized to select a
group of Administrators (`Administrators'') to render administrative
support services to the Trust and its shareholders.
2. Administrative support services may include, but are not limited
to, the following eleven functions: (1)account openings: the Broker or
Administrator communicates account openings via computer terminals located
on the Broker or Administrator's premises; 2) account closings: the Broker
or Administrator communicates account closings via computer terminals; 3)
enter purchase transactions: purchase transactions are entered through the
Broker or Administrator's own personal computer or through the use of a
toll-free telephone number; 4) enter redemption transactions: Broker or
Administrator enters redemption transactions in the same manner as
purchases; 5) account maintenance: Broker or Administrator provides or
arranges to provide funds and receives funds for Trust share purchases and
redemptions, confirms and reconciles all transactions, reviews the activity
in the Trust's accounts, and provides training and supervision of its
personnel; 6) interest posting: Broker or Administrator posts and
reinvests dividends to the trust's accounts; 7) prospectus and shareholder
reports: Broker or Administrator maintains and distributes current copies
of prospectuses and shareholder reports;
8) advertisements: the Broker or Administrator continuously advertises the
availability of its services and products; 9) customer lists: the Broker
or Administrator continuously provides names of potential customers; 10)
design services: the Broker or Administrator continuously designs material
to send to customer and develops methods of making such materials
accessible to customers; and 11) consultation services: the Broker or
Administrator continuously provides information about the product needs of
customers.
3. During the term of this Agreement, the Trust will pay FSC for
services pursuant to this Agreement, a monthly fee computed at the annual
rate of .40% of the average aggregate net asset value of the Cash Series
Shares of the Pennsylvania Municipal Cash Trust held during the month. For
the month in which this Agreement becomes effective or terminates, there
shall be an appropriate proportion of any fee payable on the basis of the
number of days that the Agreement is in effect during the month.
4. FSC may from time-to-time and for such periods as it deems
appropriate reduce its compensation to the extent any Class expenses exceed
such lower expense limitation as FSC may, by notice to the Trust,
voluntarily declare to be effective.
5. FSC will enter into separate written agreements with various
firms to provide certain of the services set forth in paragraph 1 herein.
FSC, in its sole discretion, may pay Brokers and Administrators a periodic
fee in respect of Shares owned from time to time by their clients or
customers. The schedules of such fees and the basis upon which such fees
will be paid shall be determined from time to time by FSC in its sole
discretion.
6. FSC will prepare reports to the Board of Trustees of the Trust on
a quarterly basis showing amounts expensed hereunder including amounts paid
to Brokers and Administrators and the purpose for such payments.
In consideration of the mutual covenants set forth in the
Distributor's Contract dated August 31, 1990 between Federated Municipal
Trust and Federated Securities Corp., Federated Municipal Trust executes
and delivers this Exhibit on behalf of the Funds, and with respect to the
separate Classes of Shares thereof, first set forth in this Exhibit.
Witness the due execution hereof this 31st day of December, 1990.
ATTEST: FEDERATED MUNICIPAL TRUST
/s/ John W. McGonigle By: /s/ Glen R.
Johnson
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
/s/ S. Elliott Cohan By: /s/ Richard B. Fisher
Secretary President
(SEAL)
Exhibit 6(ix) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
Exhibit I
FEDERATED MUNICIPAL TRUST
Minnesota Municipal Cash Trust
Cash Series Shares
The following provisions are hereby incorporated and made part of the
Distributor's Contract dated the 31st day of August, 1990, between
Federated Municipal Trust and Federated Securities Corp. with respect to
separate Classes of Shares thereof, first set forth in this Exhibit.
1. The Trust hereby appoints FSC to engage in activities principally
intended to result in the sale of shares of the Classes. Pursuant to this
appointment FSC is authorized to select a group of brokers (`Brokers'') to
sell shares of the above-listed Classes (`Shares''), at the current
offering price thereof as described and set forth in the respective
prospectuses of the Trust, and to render administrative support services to
the Trust and its shareholders. In addition, FSC is authorized to select a
group of Administrators (`Administrators'') to render administrative
support services to the Trust and its shareholders.
2. Administrative support services may include, but are not limited
to, the following eleven functions: (1)account openings: the Broker or
Administrator communicates account openings via computer terminals located
on the Broker or Administrator's premises; 2) account closings: the Broker
or Administrator communicates account closings via computer terminals; 3)
enter purchase transactions: purchase transactions are entered through the
Broker or Administrator's own personal computer or through the use of a
toll-free telephone number; 4) enter redemption transactions: Broker or
Administrator enters redemption transactions in the same manner as
purchases; 5) account maintenance: Broker or Administrator provides or
arranges to provide funds and receives funds for Trust share purchases and
redemptions, confirms and reconciles all transactions, reviews the activity
in the Trust's accounts, and provides training and supervision of its
personnel; 6) interest posting: Broker or Administrator posts and
reinvests dividends to the trust's accounts; 7) prospectus and shareholder
reports: Broker or Administrator maintains and distributes current copies
of prospectuses and shareholder reports;
8) advertisements: the Broker or Administrator continuously advertises the
availability of its services and products; 9) customer lists: the Broker
or Administrator continuously provides names of potential customers; 10)
design services: the Broker or Administrator continuously designs material
to send to customer and develops methods of making such materials
accessible to customers; and 11) consultation services: the Broker or
Administrator continuously provides information about the product needs of
customers.
3. During the term of this Agreement, the Trust will pay FSC for
services pursuant to this Agreement, a monthly fee computed at the annual
rate of .50% of the average aggregate net asset value of the Cash Series
Shares of the Minnesota Municipal Cash Trust held during the month. For
the month in which this Agreement becomes effective or terminates, there
shall be an appropriate proportion of any fee payable on the basis of the
number of days that the Agreement is in effect during the month.
4. FSC may from time-to-time and for such periods as it deems
appropriate reduce its compensation to the extent any Class expenses exceed
such lower expense limitation as FSC may, by notice to the Trust,
voluntarily declare to be effective.
5. FSC will enter into separate written agreements with various
firms to provide certain of the services set forth in paragraph 1 herein.
FSC, in its sole discretion, may pay Brokers and Administrators a periodic
fee in respect of Shares owned from time to time by their clients or
customers. The schedules of such fees and the basis upon which such fees
will be paid shall be determined from time to time by FSC in its sole
discretion.
6. FSC will prepare reports to the Board of Trustees of the Trust on
a quarterly basis showing amounts expensed hereunder including amounts paid
to Brokers and Administrators and the purpose for such payments.
In consideration of the mutual covenants set forth in the
Distributor's Contract dated August 31, 1990 between Federated Municipal
Trust and Federated Securities Corp., Federated Municipal Trust executes
and delivers this Exhibit on behalf of the Funds, and with respect to the
separate Classes of Shares thereof, first set forth in this Exhibit.
Witness the due execution hereof this 31st day of December, 1990.
ATTEST: FEDERATED MUNICIPAL TRUST
/s/ John W. McGonigle By: /s/ Glen R.
Johnson
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
/s/ S. Elliott Cohan By: /s/ Richard B.
Fisher
Secretary President
(SEAL)
Exhibit 6(xi) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
Exhibit K
FEDERATED MUNICIPAL TRUST
Ohio Municipal Cash Trust
Institutional Shares
In consideration of the mutual convenants set forth in the
Distributor's Contract dated August 31, 1990, between Federated Municipal
Trust and Federated Securities Corp., Federated Municipal Trust executes
and delivers this Exhibit on behalf of the Funds, and with respect to the
separate Classes of Shares thereof, first set forth in this Exhibit.
Witness the due execution hereof this 26th day of March, 1991.
ATTEST: FEDERATED MUNICIPAL TRUST
/s/ John W. McGonigle By: /s/ Glen R.
Johnson
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
/s/ S. Elliott Cohan By: /s/ Richard B.
Fisher
Secretary President
(SEAL)
Exhibit 6(xii) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
Exhibit L
FEDERATED MUNICIPAL TRUST
Ohio Municipal Cash Trust
Cash II Shares
The following provisions are hereby incorporated and made part of the
Distributor's Contract dated the 31st day of August, 1990, between
Federated Municipal Trust and Federated Securities Corp. with respect to
separate Classes of Shares thereof, first set forth in this Exhibit.
1. The Trust hereby appoints FSC to engage in activities principally
intended to result in the sale of shares of the Classes. Pursuant to this
appointment FSC is authorized to select a group of brokers (`Brokers'') to
sell shares of the above-listed Classes (`Shares''), at the current
offering price thereof as described and set forth in the respective
prospectuses of the Trust, and to render administrative support services to
the Trust and its shareholders. In addition, FSC is authorized to select a
group of Administrators (`Administrators'') to render administrative
support services to the Trust and its shareholders.
2. Administrative support services may include, but are not limited
to, the following eleven functions: (1)account openings: the Broker or
Administrator communicates account openings via computer terminals located
on the Broker or Administrator's premises; 2) account closings: the Broker
or Administrator communicates account closings via computer terminals; 3)
enter purchase transactions: purchase transactions are entered through the
Broker or Administrator's own personal computer or through the use of a
toll-free telephone number; 4) enter redemption transactions: Broker or
Administrator enters redemption transactions in the same manner as
purchases; 5) account maintenance: Broker or Administrator provides or
arranges to provide funds and receives funds for Trust share purchases and
redemptions, confirms and reconciles all transactions, reviews the activity
in the Trust's accounts, and provides training and supervision of its
personnel; 6) interest posting: Broker or Administrator posts and
reinvests dividends to the trust's accounts; 7) prospectus and shareholder
reports: Broker or Administrator maintains and distributes current copies
of prospectuses and shareholder reports;
8) advertisements: the Broker or Administrator continuously advertises the
availability of its services and products; 9) customer lists: the Broker
or Administrator continuously provides names of potential customers; 10)
design services: the Broker or Administrator continuously designs material
to send to customer and develops methods of making such materials
accessible to customers; and 11) consultation services: the Broker or
Administrator continuously provides information about the product needs of
customers.
3. During the term of this Agreement, the Trust will pay FSC for
services pursuant to this Agreement, a monthly fee computed at the annual
rate of .30% of the average aggregate net asset value of the Cash II Shares
of the Ohio Municipal Cash Trust held during the month. For the month in
which this Agreement becomes effective or terminates, there shall be an
appropriate proportion of any fee payable on the basis of the number of
days that the Agreement is in effect during the month.
4. FSC may from time-to-time and for such periods as it deems
appropriate reduce its compensation to the extent any Class expenses exceed
such lower expense limitation as FSC may, by notice to the Trust,
voluntarily declare to be effective.
5. FSC will enter into separate written agreements with various
firms to provide certain of the services set forth in paragraph 1 herein.
FSC, in its sole discretion, may pay Brokers and Administrators a periodic
fee in respect of Shares owned from time to time by their clients or
customers. The schedules of such fees and the basis upon which such fees
will be paid shall be determined from time to time by FSC in its sole
discretion.
6. FSC will prepare reports to the Board of Trustees of the Trust on
a quarterly basis showing amounts expensed hereunder including amounts paid
to Brokers and Administrators and the purpose for such payments.
In consideration of the mutual covenants set forth in the
Distributor's Contract dated August 31, 1990 between Federated Municipal
Trust and Federated Securities Corp., Federated Municipal Trust executes
and delivers this Exhibit on behalf of the Funds, and with respect to the
separate Class of Shares thereof, first set forth in this Exhibit.
Witness the due execution hereof this 26th day of March, 1991.
ATTEST: FEDERATED MUNICIPAL TRUST
/s/ John W. McGonigle By: /s/ Glen R. Johnson
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
/s/ S. Elliott Cohan By: /s/ Richard B. Fisher
Secretary President
(SEAL)
Exhibit 6(xxvi) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
Exhibit Z
to the
Distributor's Contract
FEDERATED MUNICIPAL TRUST
CALIFORNIA MUNICIPAL CASH TRUST
INSTITUTIONAL SHARES
The following provisions are hereby incorporated and made part of the
Distributor's Contract dated the 31st day of August, 1990, between
Federated Municipal Trust and Federated Securities Corp. with respect to
Classes of the Funds set forth above.
1. The Trust hereby appoints FSC to engage in activities principally
intended to result in the sale of shares of the above-listed Portfolio
(`Shares''). Pursuant to this appointment, FSC is authorized to select a
group of brokers (`Brokers'') to sell Shares at the current offering price
thereof as described and set forth in the respective prospectuses of the
Trust, and to render administrative support services to the Trust and its
shareholders. In addition, FSC is authorized to select a group of
administrators (`Administrators'') to render administrative support
services to the Trust and its shareholders.
2. Administrative support services may include, but are not limited
to, the following functions: 1) account openings: the Broker or
Administrator communicates account openings via computer terminals located
on the Broker's or Administrator's premises; 2) account closings: the
Broker or Administrator communicates account closings via computer
terminals; 3) enter purchase transactions: purchase transactions are
entered through the Broker's or Administrator's own personal computer or
through the use of a toll-free telephone number; 4) enter redemption
transactions: Broker or Administrator enters redemption transactions in
the same manner as purchases; 5) account maintenance: Broker or
Administrator provides or arranges to provide accounting support for all
transactions. Broker or Administrator also wires funds and receives funds
for Trust share purchases and redemptions, confirms and reconciles all
transactions, reviews the activity in the Trust's accounts, and provides
training and supervision of its personnel; 6) interest posting: Broker or
Administrator posts and reinvests dividends to the Trust's accounts; 7)
prospectus and shareholder reports: Broker or Administrator maintains and
distributes current copies of prospectuses and shareholder reports; 8)
advertisements: the Broker or Administrator continuously advertises the
availability of its services and products; 9) customer lists: the Broker
or Administrator continuously provides names of potential customers; 10)
design services: the Broker or Administrator continuously designs material
to send to customers and develops methods of making such materials
accessible to customers; and 11) consultation services: the Broker or
Administrator continuously provides information about the product needs of
customers.
3. During the term of this Agreement, the Trust will pay FSC for
services pursuant to this Agreement, a monthly fee computed at the annual
rate of .25% of the average aggregate net asset value of the Shares held
during the month. For the month in which this Agreement becomes effective
or terminates, there shall be an appropriate proration of any fee payable
on the basis of the number of days that the Agreement is in effect during
the month.
4. FSC may from time-to-time and for such periods as it deems
appropriate reduce its compensation to the extent any Classes' expenses
exceed such lower expense limitation as FSC may, by notice to the Trust,
voluntarily declare to be effective.
5. FSC will enter into separate written agreements with various
firms to provide certain of the services set forth in Paragraph 1 herein.
FSC, in its sole discretion, may pay Brokers and Administrators a periodic
fee in respect of Shares owned from time to time by their clients or
customers. The schedules of such fees and the basis upon which such fees
will be paid shall be determined from time to time by FSC in its sole
discretion.
6. FSC will prepare reports to the Board of Trustees of the
Trust on a quarterly basis showing amounts expended hereunder including
amounts paid to Brokers and Administrators and the purpose for such
payments.
In consideration of the mutual covenants set forth in the
Distributor's Contract dated August 31, 1990 between Federated Municipal
Trust and Federated Securities Corp., Federated Municipal Trust executes
and delivers this Exhibit on behalf of the Funds, and with respect to the
separate Classes of Shares thereof, first set forth in this Exhibit.
Witness the due execution hereof this 1st day of March, 1996.
ATTEST: FEDERATED MUNICIPAL TRUST
/s/ John W. McGonigle /s/ Glen R. Johnson
By:
John W. McGonigle Glen R. Johnson
Secretary President
ATTEST: FEDERATED SECURITIES CORP.
/s/ Byron F. Bowman /s/ Edward C. Gonzales
By:
Byron F. Bowman Edward C. Gonzales
President Executive Vice President
Exhibit 6(xxvii) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
Exhibit AA
to the
Distributor's Contract
FEDERATED MUNICIPAL TRUST
MICHIGAN MUNICIPAL CASH TRUST
INSTITUTIONAL SHARES
The following provisions are hereby incorporated and made part of the
Distributor's Contract dated the 31st day of August, 1990, between
Federated Municipal Trust and Federated Securities Corp. with respect to
Classes of the Funds set forth above.
1. The Trust hereby appoints FSC to engage in activities principally
intended to result in the sale of shares of the above-listed Portfolio
(`Shares''). Pursuant to this appointment, FSC is authorized to select a
group of brokers (`Brokers'') to sell Shares at the current offering price
thereof as described and set forth in the respective prospectuses of the
Trust, and to render administrative support services to the Trust and its
shareholders. In addition, FSC is authorized to select a group of
administrators (`Administrators'') to render administrative support
services to the Trust and its shareholders.
2. Administrative support services may include, but are not limited
to, the following functions: 1) account openings: the Broker or
Administrator communicates account openings via computer terminals located
on the Broker's or Administrator's premises; 2) account closings: the
Broker or Administrator communicates account closings via computer
terminals; 3) enter purchase transactions: purchase transactions are
entered through the Broker's or Administrator's own personal computer or
through the use of a toll-free telephone number; 4) enter redemption
transactions: Broker or Administrator enters redemption transactions in
the same manner as purchases; 5) account maintenance: Broker or
Administrator provides or arranges to provide accounting support for all
transactions. Broker or Administrator also wires funds and receives funds
for Trust share purchases and redemptions, confirms and reconciles all
transactions, reviews the activity in the Trust's accounts, and provides
training and supervision of its personnel; 6) interest posting: Broker or
Administrator posts and reinvests dividends to the Trust's accounts; 7)
prospectus and shareholder reports: Broker or Administrator maintains and
distributes current copies of prospectuses and shareholder reports; 8)
advertisements: the Broker or Administrator continuously advertises the
availability of its services and products; 9) customer lists: the Broker
or Administrator continuously provides names of potential customers; 10)
design services: the Broker or Administrator continuously designs material
to send to customers and develops methods of making such materials
accessible to customers; and 11) consultation services: the Broker or
Administrator continuously provides information about the product needs of
customers.
3. During the term of this Agreement, the Trust will pay FSC for
services pursuant to this Agreement, a monthly fee computed at the annual
rate of .25% of the average aggregate net asset value of the Shares held
during the month. For the month in which this Agreement becomes effective
or terminates, there shall be an appropriate proration of any fee payable
on the basis of the number of days that the Agreement is in effect during
the month.
4. FSC may from time-to-time and for such periods as it deems
appropriate reduce its compensation to the extent any Classes' expenses
exceed such lower expense limitation as FSC may, by notice to the Trust,
voluntarily declare to be effective.
5. FSC will enter into separate written agreements with various
firms to provide certain of the services set forth in Paragraph 1 herein.
FSC, in its sole discretion, may pay Brokers and Administrators a periodic
fee in respect of Shares owned from time to time by their clients or
customers. The schedules of such fees and the basis upon which such fees
will be paid shall be determined from time to time by FSC in its sole
discretion.
6. FSC will prepare reports to the Board of Trustees of the
Trust on a quarterly basis showing amounts expended hereunder including
amounts paid to Brokers and Administrators and the purpose for such
payments.
In consideration of the mutual covenants set forth in the
Distributor's Contract dated August 31, 1990 between Federated Municipal
Trust and Federated Securities Corp., Federated Municipal Trust executes
and delivers this Exhibit on behalf of the Funds, and with respect to the
separate Classes of Shares thereof, first set forth in this Exhibit.
Witness the due execution hereof this 1st day of March, 1996.
ATTEST: FEDERATED MUNICIPAL TRUST
/s/ John W. McGonigle /s/ Glen R. Johnson
By:
John W. McGonigle Glen R. Johnson
Secretary President
ATTEST: FEDERATED SECURITIES CORP.
/s/ Byron F. Bowman /s/ Edward C. Gonzales
By:
Byron F. Bowman Edward C. Gonzales
Secretary Executive Vice President
Exhibit 6(xxviii) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
Exhibit BB
to the
Distributor's Contract
FEDERATED MUNICIPAL TRUST
OHIO MUNICIPAL CASH TRUST
INSTITUTIONAL SHARES
The following provisions are hereby incorporated and made part of the
Distributor's Contract dated the 31st day of August, 1990, between
Federated Municipal Trust and Federated Securities Corp. with respect to
Classes of the Funds set forth above.
1. The Trust hereby appoints FSC to engage in activities principally
intended to result in the sale of shares of the above-listed Portfolio
(`Shares''). Pursuant to this appointment, FSC is authorized to select a
group of brokers (`Brokers'') to sell Shares at the current offering price
thereof as described and set forth in the respective prospectuses of the
Trust, and to render administrative support services to the Trust and its
shareholders. In addition, FSC is authorized to select a group of
administrators (`Administrators'') to render administrative support
services to the Trust and its shareholders.
2. Administrative support services may include, but are not limited
to, the following functions: 1) account openings: the Broker or
Administrator communicates account openings via computer terminals located
on the Broker's or Administrator's premises; 2) account closings: the
Broker or Administrator communicates account closings via computer
terminals; 3) enter purchase transactions: purchase transactions are
entered through the Broker's or Administrator's own personal computer or
through the use of a toll-free telephone number; 4) enter redemption
transactions: Broker or Administrator enters redemption transactions in
the same manner as purchases; 5) account maintenance: Broker or
Administrator provides or arranges to provide accounting support for all
transactions. Broker or Administrator also wires funds and receives funds
for Trust share purchases and redemptions, confirms and reconciles all
transactions, reviews the activity in the Trust's accounts, and provides
training and supervision of its personnel; 6) interest posting: Broker or
Administrator posts and reinvests dividends to the Trust's accounts; 7)
prospectus and shareholder reports: Broker or Administrator maintains and
distributes current copies of prospectuses and shareholder reports; 8)
advertisements: the Broker or Administrator continuously advertises the
availability of its services and products; 9) customer lists: the Broker
or Administrator continuously provides names of potential customers; 10)
design services: the Broker or Administrator continuously designs material
to send to customers and develops methods of making such materials
accessible to customers; and 11) consultation services: the Broker or
Administrator continuously provides information about the product needs of
customers.
3. During the term of this Agreement, the Trust will pay FSC for
services pursuant to this Agreement, a monthly fee computed at the annual
rate of .25% of the average aggregate net asset value of the Shares held
during the month. For the month in which this Agreement becomes effective
or terminates, there shall be an appropriate proration of any fee payable
on the basis of the number of days that the Agreement is in effect during
the month.
4. FSC may from time-to-time and for such periods as it deems
appropriate reduce its compensation to the extent any Classes' expenses
exceed such lower expense limitation as FSC may, by notice to the Trust,
voluntarily declare to be effective.
5. FSC will enter into separate written agreements with various
firms to provide certain of the services set forth in Paragraph 1 herein.
FSC, in its sole discretion, may pay Brokers and Administrators a periodic
fee in respect of Shares owned from time to time by their clients or
customers. The schedules of such fees and the basis upon which such fees
will be paid shall be determined from time to time by FSC in its sole
discretion.
6. FSC will prepare reports to the Board of Trustees of the
Trust on a quarterly basis showing amounts expended hereunder including
amounts paid to Brokers and Administrators and the purpose for such
payments.
In consideration of the mutual covenants set forth in the
Distributor's Contract dated August 31, 1990 between Federated Municipal
Trust and Federated Securities Corp., Federated Municipal Trust executes
and delivers this Exhibit on behalf of the Funds, and with respect to the
separate Classes of Shares thereof, first set forth in this Exhibit.
Witness the due execution hereof this 1st day of March, 1996.
ATTEST: FEDERATED MUNICIPAL TRUST
/s/ John W. McGonigle /s/ Glen R. Johnson
By:
John W. McGonigle Glen R. Johnson
Secretary President
ATTEST: FEDERATED SECURITIES CORP.
/s/ Byron F. Bowman /s/ Edward C. Gonzales
By:
Byron F. Bowman Edward C. Gonzales
Secretary Executive Vice President
Exhibit 6(xxix) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
Exhibit CC
to the
Distributor's Contract
FEDERATED MUNICIPAL TRUST
TENNESSEE MUNICIPAL CASH TRUST
INSTITUTIONAL SHARES
The following provisions are hereby incorporated and made part of the
Distributor's Contract dated the 31st day of August, 1990, between
Federated Municipal Trust and Federated Securities Corp. with respect to
Classes of the Funds set forth above.
1. The Trust hereby appoints FSC to engage in activities principally
intended to result in the sale of shares of the above-listed Portfolio
(`Shares''). Pursuant to this appointment, FSC is authorized to select a
group of brokers (`Brokers'') to sell Shares at the current offering price
thereof as described and set forth in the respective prospectuses of the
Trust, and to render administrative support services to the Trust and its
shareholders. In addition, FSC is authorized to select a group of
administrators (`Administrators'') to render administrative support
services to the Trust and its shareholders.
2. Administrative support services may include, but are not limited
to, the following functions: 1) account openings: the Broker or
Administrator communicates account openings via computer terminals located
on the Broker's or Administrator's premises; 2) account closings: the
Broker or Administrator communicates account closings via computer
terminals; 3) enter purchase transactions: purchase transactions are
entered through the Broker's or Administrator's own personal computer or
through the use of a toll-free telephone number; 4) enter redemption
transactions: Broker or Administrator enters redemption transactions in
the same manner as purchases; 5) account maintenance: Broker or
Administrator provides or arranges to provide accounting support for all
transactions. Broker or Administrator also wires funds and receives funds
for Trust share purchases and redemptions, confirms and reconciles all
transactions, reviews the activity in the Trust's accounts, and provides
training and supervision of its personnel; 6) interest posting: Broker or
Administrator posts and reinvests dividends to the Trust's accounts; 7)
prospectus and shareholder reports: Broker or Administrator maintains and
distributes current copies of prospectuses and shareholder reports; 8)
advertisements: the Broker or Administrator continuously advertises the
availability of its services and products; 9) customer lists: the Broker
or Administrator continuously provides names of potential customers; 10)
design services: the Broker or Administrator continuously designs material
to send to customers and develops methods of making such materials
accessible to customers; and 11) consultation services: the Broker or
Administrator continuously provides information about the product needs of
customers.
3. During the term of this Agreement, the Trust will pay FSC for
services pursuant to this Agreement, a monthly fee computed at the annual
rate of .25% of the average aggregate net asset value of the Shares held
during the month. For the month in which this Agreement becomes effective
or terminates, there shall be an appropriate proration of any fee payable
on the basis of the number of days that the Agreement is in effect during
the month.
4. FSC may from time-to-time and for such periods as it deems
appropriate reduce its compensation to the extent any Classes' expenses
exceed such lower expense limitation as FSC may, by notice to the Trust,
voluntarily declare to be effective.
5. FSC will enter into separate written agreements with various
firms to provide certain of the services set forth in Paragraph 1 herein.
FSC, in its sole discretion, may pay Brokers and Administrators a periodic
fee in respect of Shares owned from time to time by their clients or
customers. The schedules of such fees and the basis upon which such fees
will be paid shall be determined from time to time by FSC in its sole
discretion.
6. FSC will prepare reports to the Board of Trustees of the
Trust on a quarterly basis showing amounts expended hereunder including
amounts paid to Brokers and Administrators and the purpose for such
payments.
In consideration of the mutual covenants set forth in the
Distributor's Contract dated August 31, 1990 between Federated Municipal
Trust and Federated Securities Corp., Federated Municipal Trust executes
and delivers this Exhibit on behalf of the Funds, and with respect to the
separate Classes of Shares thereof, first set forth in this Exhibit.
Witness the due execution hereof this 1st day of March, 1996.
ATTEST: FEDERATED MUNICIPAL TRUST
/s/ John W. McGonigle /s/ Glen R. Johnson
By:
John W. McGonigle Glen R. Johnson
Secretary President
ATTEST: FEDERATED SECURITIES CORP.
/s/ Byron F. Bowman /s/ Edward C. Gonzales
By:
Byron F. Bowman Edward C. Gonzales
Secretary Executive Vice President
Exhibit DD
FEDERATED MUNICIPAL TRUST
Tennessee Municipal Cash Trust
Institutional Service Shares
The following provisions are hereby incorporated and made part of the
Distributor's Contract dated the 31st day of August, 1990, between
Federated Municipal Trust and Federated Securities Corp. with respect to
the separate Class of Shares thereof, first set forth in this Exhibit.
1. The Trust hereby appoints FSC to engage in activities principally
intended to result in the sale of shares of the Class. Pursuant to this
appointment FSC is authorized to select a group of brokers ("Brokers") to
sell shares of the above-listed Class ("Shares"), at the current offering
price thereof as described and set forth in the respective prospectuses of
the Trust, and to render administrative support services to the Trust and
its shareholders. In addition, FSC is authorized to select a group of
Administrators ("Administrators") to render administrative support services
to the Trust and its shareholders.
2. Administrative support services may include, but are not limited
to, the following eleven functions: (1) account openings: the Broker or
Administrator communicates account openings via computer terminals located
on the Broker or Administrator's premises; 2) account closings: the Broker
or Administrator communicates account closings via computer terminals; 3)
enter purchase transactions: purchase transactions are entered through the
Broker or Administrator's own personal computer or through the use of a
toll-free telephone number; 4) enter redemption transactions: Broker or
Administrator enters redemption transactions in the same manner as
purchases; 5) account maintenance: Broker or Administrator provides or
arranges to provide accounting support for all transactions. Broker or
Administrator also wires funds and receives funds for Trust share purchases
and redemptions, confirms and reconciles all transactions, reviews the
activity in the Trust's accounts, and provides training and supervision of
its personnel; 6) interest posting: Broker or Administrator posts and
reinvests dividends to the Trust's accounts; 7) prospectus and shareholder
reports: Broker or Administrator maintains and distributes current copies
of prospectuses and shareholder reports; 8) advertisements: the Broker or
Administrator continuously advertises the availability of its services and
products; 9) customer lists: the Broker or Administrator continuously
provides names of potential customers; 10) design services: the Broker or
Administrator continuously designs material to send to customers and
develops methods of making such materials accessible to customers; and 11)
consultation services: the Broker or Administrator continuously provides
information about the product needs of customers.
3. During the term of this Agreement, the Trust will pay FSC for
services pursuant to this Agreement, a monthly fee computed at the annual
rate of up to .25% of the average aggregate net asset value of the
Institutional Service Shares of New York Municipal Cash Trust held during
the month. For the month in which this Agreement becomes effective or
terminates, there shall be an appropriate proration of any fee payable on
the basis of the number of days that the Agreement is in effect during the
month.
4. FSC may from time-to-time and for such periods as it deems
appropriate reduce its compensation to the extent any Class expenses exceed
such lower expense limitation as FSC may, by notice to the Trust,
voluntarily declare to be effective.
5. FSC will enter into separate written agreements with various firms
to provide certain of the services set forth in Paragraph 1 herein. FSC,
in its sole discretion, may pay Brokers and Administrators a periodic fee
in respect of Shares owned from time to time by their clients or customers.
The schedules of such fees and the basis upon which such fees will be paid
shall be determined from time to time by FSC in its sole discretion.
6. FSC will prepare reports to the Board of Trustees of the Trust on
a quarterly basis showing amounts expended hereunder including amounts paid
to Brokers and Administrators and the purpose for such payments.
In consideration of the mutual covenants set forth in the
Distributor's Contract dated August 31, 1990 between Federated Municipal
Trust and Federated Securities Corp., Federated Municipal Trust executes
and delivers this Exhibit on behalf of the Funds, and with respect to the
separate Class of Shares thereof, first set forth in this Exhibit.
Witness the due execution hereof this 1st day of March, 1996.
Attest: FEDERATED MUNICIPAL TRUST
/s/ John W. McGonigle /s/ Glen R. Johnson
By:
Secretary President
Attest: FEDERATED SECURITIES CORP.
/s/ Byron F. Bowman /s/ Edward C. Gonzales
By:
Secretary President
Exhibit 9(I) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
AGREEMENT
FOR
FUND ACCOUNTING SERVICES,
ADMINISTRATIVE SERVICES,
TRANSFER AGENCY SERVICES
AND
CUSTODY SERVICES PROCUREMENT
AGREEMENT made as of March 1, 1996, 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 `Investment Company''), on behalf of the
portfolios (individually referred to herein as a `Fund'' and collectively
as `Funds'') of the Investment Company, and FEDERATED SERVICES COMPANY, a
Pennsylvania corporation, having its principal office and place of business
at Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779 on behalf
of itself and its subsidiaries (the `Company'').
WHEREAS, the Investment Company 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'');
WHEREAS, the Investment Company may desire to retain the Company as fund
accountant to provide fund accounting services (as herein defined)
including 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 desires to
accept such appointment;
WHEREAS, the Investment Company may desire to appoint the Company as its
administrator to provide it with administrative services (as herein
defined), if so indicated on Exhibit, and the Company desires to accept
such appointment;
WHEREAS, the Investment Company may desire to appoint the Company as its
transfer agent and dividend disbursing agent to provide it with transfer
agency services (as herein defined) 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 Investment Company 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
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 Investment Company 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 Investment Company's Board
of Trustees or Directors (`Board''), the Company will assist the
Investment Company with regard to fund accounting for the Investment
Company, 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 realized 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 Investment Company, 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 Investment
Company are the property of the Investment Company and further
agrees to surrender promptly to the Investment Company such records
upon the Investment Company's request;
G. At the request of the Investment Company, prepare various reports or
other financial documents in accordance with generally accepted
accounting principles as required by federal, state and other
applicable laws and regulations; and
H. Such other similar services as may be reasonably requested by the
Investment Company.
The foregoing, along with any additional services that the Company shall
agree in writing to perform for the Investment Company under this Section
One, shall hereafter be referred to as `Fund Accounting Services.''
ARTICLE 3. COMPENSATION AND ALLOCATION OF EXPENSES.
A. The Funds will compensate the Company for Fund Accounting Services
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. 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 Investment Company; independent
auditors expenses; legal and audit department expenses billed to the
Company for work performed related to the Investment Company, the
Funds, or the Classes; law firm expenses; organizational 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 attributable to the Fund
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 Investment Company 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 Fund Accounting Services. Such person or
persons may be affiliates of the Company, third-party service
providers, or they may be officers and employees who are employed by
both the Company and the Investment Company; provided, however, that
the Company shall be as fully responsible to each Fund for the acts
and omissions of any such subcontractor as it is for its own acts
and omissions. The compensation of such person or persons shall be
paid by the Company and no obligation shall be incurred on behalf of
the Investment Company, the Funds, or the Classes in such respect.
SECTION TWO: ADMINISTRATIVE SERVICES.
ARTICLE 4. APPOINTMENT.
The Investment Company hereby appoints the Company as Administrator for
the period on the terms and conditions set forth in this Agreement. The
Company hereby accepts such appointment and agrees to furnish the services
set forth in Article 5 of this Agreement in return for the compensation set
forth in Article 9 of this Agreement.
ARTICLE 5. THE COMPANY'S DUTIES.
As Administrator, and subject to the supervision and control of the
Board and in accordance with Proper Instructions (as defined hereafter)
from the Investment Company the Company will provide facilities, equipment,
and personnel to carry out the following administrative services for
operation of the business and affairs of the Investment Company and each of
its portfolios:
A. prepare, file, and maintain the Investment Company's governing
documents and any amendments thereto, including the Charter (which
has already been prepared and filed), the By-laws and minutes of
meetings of the Board and Shareholders;
B. prepare and file with the Securities and Exchange Commission and the
appropriate state securities authorities the registration statements
for the Investment Company and the Investment Company's shares and
all amendments thereto, reports to regulatory authorities and
shareholders, prospectuses, proxy statements, and such other
documents all as may be necessary to enable the Investment Company
to make a continuous offering of its shares;
C. prepare, negotiate, and administer contracts (if any) on behalf of
the Investment Company with, among others, the Investment Company's
investment advisers and distributors, subject to any applicable
restrictions of the Board or the 1940 Act;
D. calculate performance data of the Investment Company for
dissemination to information services covering the investment
company industry;
E. prepare and file the Investment Company's tax returns;
F. coordinate the layout and printing of publicly disseminated
prospectuses and reports;
G. perform internal audit examinations in accordance with a charter to
be adopted by the Company and the Investment Company;
H. assist with the design, development, and operation of the Investment
Company and the Funds;
I. provide individuals reasonably acceptable to the Board for
nomination, appointment, or election as officers of the Investment
Company, who will be responsible for the management of certain of
the Investment Company's affairs as determined by the Investment
Company's Board; and
J. consult with the Investment Company and its Board on matters
concerning the Investment Company and its affairs.
The foregoing, along with any additional services that the Company shall
agree in writing to perform for the Investment Company under this Section
4, shall hereafter be referred to as "Administrative Services."
ARTICLE 6. RECORDS.
The Company shall create and maintain all necessary books and records in
accordance with all applicable laws, rules and regulations, including but
not limited to records required by Section 31(a) of the Investment Company
act of 1940 and the rules thereunder, as the same may be amended from time
to time, pertaining to the Administrative Services performed by it and not
otherwise created and maintained by another party pursuant to contract with
the Investment Company. Where applicable, such records shall be maintained
by the Company for the periods and in the places required by Rule 31a-2
under the 1940 Act. The books and records pertaining to the Investment
Company which are in the possession of the Company shall be the property of
the Investment Company. The Investment Company, or the Investment
Company's authorized representatives, shall have access to such books and
records at all times during the Company's normal business hours. Upon the
reasonable request of the Investment Company, copies of any such books and
records shall be provided promptly by the Company to the Investment Company
or the Investment Company's authorized representatives.
ARTICLE 7. DUTIES OF THE FUND.
The Fund assumes full responsibility for the preparation, contents and
distribution of its own offering document and for complying with all
applicable requirements the 1940 Act, the Internal Revenue Code, and any
other laws, rules and regulations of government authorities having
jurisdiction.
ARTICLE 8. EXPENSES.
The Company shall be responsible for expenses incurred in providing
office space, equipment, and personnel as may be necessary or convenient to
provide the Administrative Services to the Investment Company, including
the compensation of the Company employees who serve as trustees or
directors or officers of the Investment Company. The Investment Company
shall be responsible for all other expenses incurred by the Company on
behalf of the Investment Company, including without limitation postage and
courier expenses, printing expenses, travel expenses, registration fees,
filing fees, fees of outside counsel and independent auditors, or other
professional services, organizational expenses, insurance premiums, fees
payable to persons who are not the Company's employees, trade association
dues, and other expenses properly payable by the Funds and/or the Classes.
ARTICLE 9. COMPENSATION.
For the Administrative Services provided, the Investment Company hereby
agrees to pay and the Company hereby agrees to accept as full compensation
for its services rendered hereunder an administrative fee at an annual rate
per Fund, as specified below.
The compensation and out of pocket expenses attributable to the Fund
shall be accrued by the Fund and 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 the Fund.
MAX. ADMIN. AVERAGE DAILY NET ASSETS
FEE OF THE FUNDS
.150% on the first $250 million
.125% on the next $250 million
.100% on the next $250 million
.075% on assets in excess of $750 million
(Average Daily Net Asset break-points are on a complex-wide basis)
However, in no event shall the administrative fee received during any
year of the Agreement be less than, or be paid at a rate less than would
aggregate $125,000 per Fund and $30,000 per Class. The minimum fee set
forth above in this Article 9 may increase annually upon each March 1
anniversary of this Agreement over the minimum fee during the prior 12
months, as calculated under this agreement, in an amount equal to the
increase in Pennsylvania Consumer Price Index (not to exceed 6% annually)
as last reported by the U.S. Bureau of Labor Statistics for the twelve
months immediately preceding such anniversary.
ARTICLE 10. RESPONSIBILITY OF ADMINISTRATOR.
A. The Company shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Investment Company in
connection with the matters to which this Agreement relates, except
a loss resulting from willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from
reckless disregard by it of its obligations and duties under this
Agreement. The Company shall be entitled to rely on and may act
upon advice of counsel (who may be counsel for the Investment
Company) on all matters, and shall be without liability for any
action reasonably taken or omitted pursuant to such advice. Any
person, even though also an officer, director, trustee, partner,
employee or agent of the Company, who may be or become an officer,
director, trustee, partner, employee or agent of the Investment
Company, shall be deemed, when rendering services to the Investment
Company or acting on any business of the Investment Company (other
than services or business in connection with the duties of the
Company hereunder) to be rendering such services to or acting solely
for the Investment Company and not as an officer, director, trustee,
partner, employee or agent or one under the control or direction of
the Company even though paid by the Company.
B. The Company shall be kept indemnified by the Investment Company and
be without liability for any action taken or thing done by it in
performing the Administrative Services in accordance with the above
standards. In order that the indemnification provisions contained
in this Article 10 shall apply, however, it is understood that if in
any case the Investment Company may be asked to indemnify or hold
the Company harmless, the Investment Company shall be fully and
promptly advised of all pertinent facts concerning the situation in
question, and it is further understood that the Company will use all
reasonable care to identify and notify the Investment Company
promptly concerning any situation which presents or appears likely
to present the probability of such a claim for indemnification
against the Investment Company. The Investment Company shall have
the option to defend the Company against any claim which may be the
subject of this indemnification. In the event that the Investment
Company so elects, it will so notify the Company and thereupon the
Investment Company shall take over complete defense of the claim,
and the Company shall in such situation initiate no further legal or
other expenses for which it shall seek indemnification under this
Article. the Company shall in no case confess any claim or make any
compromise in any case in which the Investment Company will be asked
to indemnify the Company except with the Investment Company's
written consent.
SECTION THREE: TRANSFER AGENCY SERVICES.
ARTICLE 11. TERMS OF APPOINTMENT.
Subject to the terms and conditions set forth in this Agreement, the
Investment Company 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.
ARTICLE 12. 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 Investment
Company 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 Investment Company, 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
Investment Company 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 13. DUTIES OF THE INVESTMENT COMPANY.
A. Compliance
The Investment Company 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 Investment Company 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 Investment Company and shall bear the seal of the
Investment Company or facsimile thereof; and notwithstanding the
death, resignation or removal of any officer of the Investment
Company 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 Investment
Company.
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 14. COMPENSATION AND EXPENSES.
A. Annual Fee
For performance by the Company pursuant to Section Three of this
Agreement, the Investment Company 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 Investment Company 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 Investment
Company 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 Investment Company 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 Investment Company and/or the Funds and a duly
authorized officer of the Company.
SECTION FOUR: CUSTODY SERVICES PROCUREMENT.
ARTICLE 15. APPOINTMENT.
The Investment Company 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 16. THE COMPANY AND ITS DUTIES.
Subject to the review, supervision and control of the Board, the Company
shall:
A. evaluate and obtain custody services from a financial institution
that meets the criteria established in Section 17(f) of the 1940 Act
and has been approved by the Board as being eligible for selection by
the Company as an Eligible Custodian;
B. negotiate and enter into agreements with Eligible Custodians for the
benefit of the Investment Company, with the Investment Company as a
party to each such agreement. The Company may, as paying agent, be a
party to any agreement with any such Eligible Custodian;
C. establish procedures to monitor the nature and the quality of the
services provided by Eligible Custodians;
D. monitor and evaluate the nature and the quality of services provided
by Eligible Custodians;
E. periodically provide to the Investment Company (i) written reports
on the activities and services of Eligible Custodians; (ii) the
nature and amount of disbursements made on account of the each Fund
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;
F. periodically provide recommendations to the Board to enhance
Eligible Custodian's customer services capabilities and improve upon
fees being charged to the Fund by Eligible Custodian; and
The foregoing, along with any additional services that Company shall
agree in writing to perform for the Fund under this Section Four, shall
hereafter be referred to as "Custody Services Procurement."
ARTICLE 17. FEES AND EXPENSES.
A. Annual Fee
For the performance of Custody Services Procurement by the Company
pursuant to Section Four of this Agreement, the Investment Company
and/or the Fund agree to compensate the Company in accordance with
the fees agreed upon from time to time.
B. Reimbursements
In addition to the fee paid under Section 11A above, the Investment
Company 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 Investment Company 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 Investment Company and/or the Funds and a duly
authorized officer of the Company.
ARTICLE 18. 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
Four of this Agreement.
SECTION FIVE: GENERAL PROVISIONS.
ARTICLE 19. PROPER INSTRUCTIONS.
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 Investment Company, 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 Investment
Company, 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 20. ASSIGNMENT.
Except as provided below, neither this Agreement nor any of the rights
or obligations under this Agreement 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. With regard to Transfer Agency Services, the Company may without
further consent on the part of the Investment Company subcontract
for the performance of Transfer Agency Services with
(1) its subsidiary, Federated Shareholder Service Company, a
Delaware business trust, 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
(2) such other provider of services duly registered as a transfer
agent under Section 17A(c)(1) as Company shall select.
The Company shall be as fully responsible to the Investment Company
for the acts and omissions of any subcontractor as it is for its own
acts and omissions.
C. With regard to Fund Accounting Services, Administrative Services and
Custody Procurement Services, the Company may without further
consent on the part of the Investment Company subcontract for the
performance of such services with Federated Administrative Services,
a wholly-owned subsidiary of the Company.
D. The Company shall upon instruction from the Investment Company
subcontract for the performance of services under this Agreement
with an Agent selected by the Investment Company, other than as
described in B. and C. above; provided, however, that the Company
shall in no way be responsible to the Investment Company for the
acts and omissions of the Agent.
ARTICLE 21. DOCUMENTS.
A. In connection with the appointment of the Company under this
Agreement, the Investment Company shall file with the Company the
following documents:
(1) A copy of the Charter and By-Laws of the Investment Company and
all amendments thereto;
(2) A copy of the resolution of the Board of the Investment Company
authorizing this Agreement;
(3) Specimens of all forms of outstanding Share certificates of the
Investment Company or the Funds in the forms approved by the
Board of the Investment Company with a certificate of the
Secretary of the Investment Company 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 Investment Company
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 Investment Company;
(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 22. REPRESENTATIONS AND WARRANTIES.
A. Representations and Warranties of the Company
The Company represents and warrants to the Fund that:
(1) it is a corporation duly organized and existing and in good
standing under the laws of the Commonwealth of Pennsylvania;
(2) It is duly qualified to carry on its business in each
jurisdiction where the nature of its business requires such
qualification, and in the Commonwealth of Pennsylvania;
(3) it is empowered under applicable laws and by its Articles of
Incorporation 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 an administrator and fund accountant;
and
B. Representations and Warranties of the Investment Company
The Investment Company 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 Investment Company 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 23. STANDARD OF CARE AND INDEMNIFICATION.
A. Standard of Care
With regard to Sections One, Three and Four, 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 Investment
Company) 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 Investment Company
The Company shall not be responsible for and the Investment Company
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 Investment Company
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 Investment
Company 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
Investment Company.
(3) The reliance on, or the carrying out by the Company or its
agents or subcontractors of Proper Instructions of the
Investment Company 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 23.B. from liability for any act or omission
resulting from the Company's willful misfeasance, bad faith,
negligence or reckless disregard of its duties or failure to
meet the standard of care set forth in 23.A. above.
C. Reliance
At any time the Company may apply to any officer of the Investment
Company 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 Investment Company 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 Investment Company 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 23 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 24. TERM AND TERMINATION OF AGREEMENT.
This Agreement shall be effective from March 1, 1996 and shall continue
until February 28, 2003 (`Term'). Thereafter, the Agreement will continue
for 18 month terms. The Agreement can be terminated by either party upon
18 months notice to be effective as of the end of such 18 month period. In
the event, however, of willful misfeasance, bad faith, negligence or
reckless disregard of its duties by the Company, the Investment Company has
the right to terminate the Agreement upon 60 days written notice, if
Company has not cured such willful misfeasance, bad faith, negligence or
reckless disregard of its duties within 60 days. The termination date for
all original or after-added Investment companies which are, or become, a
party to this Agreement. shall be coterminous. Investment Companies that
merge or dissolve during the Term, shall cease to be a party on the
effective date of such merger or dissolution.
Should the Investment Company exercise its rights to terminate, all out-
of-pocket expenses associated with the movement of records and materials
will be borne by the Investment Company or the appropriate Fund.
Additionally, the Company reserves the right to charge for any other
reasonable expenses associated with such termination. The provisions of
Articles 10 and 23 shall survive the termination of this Agreement.
ARTICLE 25. AMENDMENT.
This Agreement may be amended or modified by a written agreement
executed by both parties.
ARTICLE 26. INTERPRETIVE AND ADDITIONAL PROVISIONS.
In connection with the operation of this Agreement, the Company and the
Investment Company 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 27. 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 28. NOTICES.
Except as otherwise specifically provided herein, Notices and other
writings delivered or mailed postage prepaid to the Investment Company 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 Investment Company or the Company may
hereafter specify, shall be deemed to have been properly delivered or given
hereunder to the respective address.
ARTICLE 29. COUNTERPARTS.
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original.
ARTICLE 30. 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
appropriate property of the Fund, or Class, as provided in the Declaration
of Trust.
ARTICLE 31. 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 32. SUCCESSOR AGENT.
If a successor agent for the Investment Company shall be appointed by
the Investment Company, the Company shall upon termination of this
Agreement deliver to such successor agent at the office of the Company all
properties of the Investment Company 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 33. 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 34. 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 all
of or a substantial portion of its business to a successor, or to a party
controlling, controlled by, or under common control with such party.
Nothing in this Article 34 shall prevent the Company from delegating its
responsibilities to another entity to the extent provided herein.
ARTICLE 35. SEVERABILITY.
In the event any provision of this Agreement is held illegal, void or
unenforceable, the balance shall remain in effect.
ARTICLE 36. LIMITATIONS OF LIABILITY OF TRUSTEES AND SHAREHOLDERS OF
THE INVESTMENT COMPANY.
The execution and delivery of this Agreement have been authorized by the
Trustees of the Investment Company and signed by an authorized officer of
the Investment 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 Investment
Company, but bind only the property of the Fund, or Class, as provided in
the Declaration of Trust.
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.
INVESTMENT COMPANIES
(LISTED ON EXHIBIT 1)
By: /s/ S. Elliott Cohan
S. Elliott Cohan
Assistant Secretary
FEDERATED SERVICES COMPANY
By: /s/ Thomas J. Ward
Thomas J. Ward
Secretary
EXHIBIT 1
CONTRACT
DATE INVESTMENT COMPANY
Portfolios
Classes
March 1, 1996 FEDERATED MUNICIPAL TRUST
CONNECTICUT MUNICIPAL CASH TRUST
INSTITUTIONAL SERVICE SHARES
PENNSYLVANIA MUNICIPAL CASH TRUST
CASH SERIES SHARES
INSTITUTIONAL SERVICE SHARES
INSTITUTIONAL SHARES
MINNESOTA MUNICIPAL CASH TRUST
CASH SERIES SHARES
INSTITUTIONAL SHARES
NEW JERSEY MUNICIPAL CASH TRUST
INSTITUTIONAL SHARES
INSTITUTIONAL SERVICE SHARES
OHIO MUNICIPAL CASH TRUST
CASH II SHARES
INSTITUTIONAL SHARES
INSTITUTIONAL SERVICE SHARES
VIRGINIA MUNICIPAL CASH TRUST
INSTITUTIONAL SHARES
INSTITUTIONAL SERVICE SHARES
ALABAMA MUNICIPAL CASH TRUST
NORTH CAROLINA MUNICIPAL CASH TRUST
MARYLAND MUNICIPAL CASH TRUST
CALIFORNIA MUNICIPAL CASH TRUST
INSTITUTIONAL SHARES
INSTITUTIONAL SERVICE SHARES
NEW YORK MUNICIPAL CASH TRUST
CASH II SHARES
INSTITUTIONAL SERVICE SHARES
FLORIDA MUNICIPAL CASH TRUST
INSTITUTIONAL SHARES
CASH II SHARES
MASSACHUSETTS MUNICIPAL CASH TRUST
INSTITUTIONAL SERVICE SHARES
BAYFUNDS SHARES
MICHIGAN MUNICIPAL CASH TRUST
INSTITUTIONAL SHARES
INSTITUTIONAL SERVICE SHARES
GEORGIA MUNICIPAL CASH TRUST
TENNESSEE MUNICIPAL CASH TRUST
INSTITUTIONAL SHARES
INSTITUTIONAL SERVICE SHARES
FEDERATED SERVICES COMPANY provides the following services:
Administrative Services
Fund Accounting Services
Shareholder Recordkeeping Services
Custody Services Procurement
Exhibit 9(vii) under Form N-1A
Exhibit 10 Under Item 601/Reg. S-K
SERVICES AGREEMENT
This Agreement is made as of the day of , 199
between (i) the undersigned entity identified in the signature block below
under the heading `Fund Party'', and (ii) Charles Schwab & Co., Inc.
(`Schwab''), a California corporation.
RECITALS
A. Fund Party is the principal underwriter or distributor for an
open-end investment company with one or more series or classes of shares
(each such series or class of shares identified on Schedule I hereto, as
amended from time to time, being referred to as a `Fund'').
B. Fund Party wishes to have Schwab perform certain recordkeeping,
shareholder communication, and other services for each Fund.
C. Schwab is willing to perform such services on the terms and
conditions set forth herein.
AGREEMENT
THEREFORE, in consideration of the foregoing and the mutual promises
set forth below, the parties agree as follows:
1. Services. During the term of this Agreement, Schwab shall
perform the services set forth on Exhibit A hereto, as such exhibit may be
amended from time to time (the `Services'').
2. Fees. For the Services, Schwab shall receive a fee (the `Fee'')
based on the percentage per annum on Exhibit C applied to the average daily
value of the shares of Fund held in the Schwab accounts of Schwab's
customers. The Fee shall be calculated and paid in accordance with Exhibit
B hereto. Should Exhibit A be amended to revise the Services, the parties
shall also amend Exhibits B and C, if necessary, in order to reflect any
changes in the Fee.
3. Effectiveness of Agreement; Term.
a. This Agreement will become effective as to any particular
Fund as of the later of (i) the date set forth on Schedule I opposite the
name of such Fund or (ii) such later date as Schwab may, in its discretion,
designate.
b. This Agreement may be terminated by either party as to any
Fund upon 60 days' written notice or upon such shorter notice as is
required by law, order, or instruction by a court of competent jurisdiction
or a regulatory body or self-regulatory organization with jurisdiction over
the terminating party or immediately upon written notice from Schwab if
such termination is due to a change in the policies or operating procedures
of such Fund in a manner that is inconsistent with the Operating Agreement,
as contemplated in Section 4, below. After the date of such a termination
as to any Fund, Fund Party will not be obligated to pay the Fee with
respect to any shares of such Fund that are first placed or purchased in
Schwab customer accounts after the date of such termination. However,
notwithstanding any such termination, for so long as any shares of such
Fund that was considered in the calculation of the Fee as of the date of
such termination (a `Pre-Termination Share'') is held in any Schwab
account (x) except as set forth in the next following sentence, Fund Party
will remain obligated to pay Schwab the Fee as to each Pre-Termination
Share, and (y) for so long as Fund Party or some other person or entity
continues to pay the Fee or, in accordance with the next following
sentence, such Fund continues to pay a portion of the Fee, Schwab will
continue to perform the Services hereunder with respect to each such Pre-
Termination Share. If at any time, as to any particular Fund, neither Fund
Party nor any person controlling, controlled by, or under common control
with Fund Party continues to be engaged by a Fund in any capacity, then
Fund Party shall be relieved of its obligation to continue to pay the Fee
beginning at the time that (A) this Agreement is assigned to and Fund
Party's obligations hereunder are assumed by a successor approved by Schwab
in accordance with Section 14 or (B) such Fund agrees to pay such portion
of the Fee as to such Pre-Termination Shares as such Fund is legally
permitted to pay, but in no event less than % per annum of the average
daily value of such Pre-Termination Shares. Further, for so long as Schwab
continues to perform the Services as to any Pre-Termination Share, the
agreements regarding operational matters set forth in Section 4, the
representations and warranties in Section 6, and all of the agreements,
acknowledgments, and undertakings set forth in Sections 6 through 17,
inclusive, will remain in full force and effect as to such Pre-Termination
Shares. Fund Party shall reimburse Schwab promptly for any reasonable
expenses Schwab incurs in effecting any termination of this Agreement,
including delivery to any Fund or Fund Party of any records, instruments,
or documents required by Fund Party.
4. Operational Matters. In processing purchase, redemption and
exchange orders placed by Schwab on behalf of its customers, and in order
to facilitate Schwab's performance of the Services, Fund Party agrees to
follow and comply with, and to use its best efforts to cause each Fund to
follow and comply with, the procedures, terms and conditions set forth in
Schwab's standard form of Operating Agreement governing operational matters
in Schwab's Mutual Fund Marketplace, as that standard form may be
supplemented or amended from time (the `Operating Agreement''). Fund
Party's undertaking to cause a Fund to follow and comply with the
procedures, terms, and conditions of the Operating Agreement are subject to
the right of the Board of Trustees of any Fund to change any policies or
operating procedures of such Fund as in its sole judgment are necessary or
appropriate. However, Fund Party shall use its best efforts to convince
each such Board of Trustees not the change such policies or operating
procedures in a manner that would be inconsistent with the Operating
Agreement, and Fund Party will notify Schwab in writing as soon as
practicable after becoming aware of any such change or proposed change in
order that Schwab may either make any adjustments necessitated by such
changes or proposed changes or terminate this Agreement.
5. Transaction Charges. Schwab shall not, during the term of this
Agreement, assess against or collect from its brokerage customers any
transaction fee upon the purchase or redemption of any Fund's shares that
are considered in calculating the Fee. The parties acknowledge and agree
that Schwab may collect such transaction fees from certain customers
(including `Active Traders,'' as Schwab may define that term) for certain
special trading services and from other customers upon such other
customers' redemption of certain shares. The value of shares as to which
such transaction fees are charged will not be included in the calculation
of the Fee.
6. Representations and Warranties.
a. Fund Party represents and warrants to Schwab that Fund Party
and the persons executing this Agreement on its behalf, including on behalf
of any Fund, are duly authorized and empowered to execute and deliver this
Agreement on behalf of Fund Party.
b. Schwab represents and warrants that it and the persons
executing this Agreement on its behalf are duly authorized and empowered to
enter into this Agreement and that Schwab is a member of the National
Association of Securities Dealers, Inc.
7. Compliance Responsibilities; Uncontrollable Events;
Indemnification.
a. Fund Party acknowledges and agrees that it, the Funds, and
certain `Affiliates'' (as defined below) are, and Schwab is not,
responsible for (i) the compliance of all prospectuses, annual reports,
proxy statements, and items of advertising or marketing material of or
relating to any Fund, and of the tabulation of returned proxies, with all
applicable laws, rules, or regulations (ii) the registration or
qualification of all shares of each Fund under all federal and applicable
state laws and (iii) the compliance by each Fund, Fund Party, and
`affiliated person'' (as that term is defined in the rules under the
Investment Company Act of 1940, as amended (the `Company Act'')) of any of
them (each, an `Affiliate''), with all applicable federal and state laws,
rules and regulations, (including the Company Act, the Investment Advisers
Act of 1940, as amended, and the rules and regulations thereunder) and the
rules and regulations of all self-regulatory organizations with
jurisdiction over such Fund, Fund Party or Affiliate.
b. Schwab acknowledges and agrees that it, and not Fund Party,
any Fund, or any Affiliate, is responsible for Schwab's compliance with all
laws, rules, regulations and rules and regulations of self-regulatory
organizations with jurisdiction over Schwab, in each case governing
Schwab's performance of the Services (including those governing the
registration and business practices of broker-dealers), except to the
extent that Schwab's compliance with any such law, rule, or regulation is
dependent on the compliance by Fund Party or such Fund or Affiliate with
any law, rule, or regulation applicable to such Fund or Affiliate, or
satisfaction by Fund Party or such Fund or Affiliate of all or any
obligations or requirements under this Agreement applicable to Fund Party
or such Fund or Affiliate.
c. In providing the Services, each party to this Agreement is
entitled to rely on any written records or instructions provided to it by
any other party to this Agreement, by its employees, officers or agents, or
by its customers.
d. Neither party to this Agreement assumes any responsibility
hereunder to the other, and neither will be liable to the other, for any
damage, loss of data, delay, or any other loss whatsoever caused by fires,
earthquakes, floods, acts of war, civil insurrection, or other similar
catastrophic events beyond its reasonable control.
e. Fund Party shall indemnify, defend and protect Schwab and
each officer, employee and agent of Schwab and hold Schwab and each such
officer, employee, and agent harmless from and against any and all claims,
demands, actions, losses, damages, liabilities, or costs, charges, counsel
fees, and expenses of any nature (`Losses'') arising out of (i) any
inaccuracy or omission in any prospectus, registration statement, annual
report or proxy statement, of any Fund or Fund Party or any advertising or
promotional material generated by any Fund or Fund Party, (ii) any breach
by Fund Party of any representation, warranty, covenant, or agreement
contained in this Agreement or any applicable Operating Agreement, and
(iii) any action taken or omitted to be taken by Schwab pursuant to this
Agreement, except to the extent such Losses result from Schwab's breach of
this Agreement, willful misconduct, or gross negligence.
f. Schwab shall indemnify, defend, and protect Fund Party and
each director, officer, employee, and agent of Fund Party and hold Fund
Party and each such director, officer, employee, and agent harmless from
and against any and all Losses arising out of: (i) Schwab's dissemination
of information regarding Fund Party or a Fund that is materially incorrect
and that was not provided to Schwab by Fund Party, a Fund, or an affiliate,
derived accurately from materials published or provided to Schwab by any of
them, or approved by Fund Party or such Fund; or (ii) Schwab's willful
misconduct or negligence in the performance of, or failure to perform, its
obligations under this Agreement, except in each case to the extent such
Losses result from Fund Party's breach of this Agreement or Fund Party's or
any Fund's willful misconduct or negligence.
8. Role and Relationship of Schwab. The parties acknowledge and
agree that the Services are recordkeeping, shareholder communication and
related services only and are not the services of an underwriter or a
principal underwriter of any Fund within the meaning of the Securities Act
of 1933 or the Company Act. This Agreement does not grant Schwab any right
to purchase shares from any Fund (although it does not preclude Schwab from
purchasing any such shares), nor does it constitute Schwab an agent of any
Fund or Fund Party for purposes of selling shares of any Fund to any dealer
or the public. To the extent Schwab is involved in any Schwab customer's
purchase of shares of any Fund, such involvement will be made as agent of
such customer only and such purchases will be made through the principal
underwriter of such Fund.
9. Use of Schwab's Name. Without Schwab's prior written consent,
Fund Party will not, nor will Fund Party cause or permit any Fund to,
describe or refer to Schwab or the Services or relationship contemplated by
this Agreement in any advertisement or promotional materials or activities.
10. Proprietary Information. Fund Party acknowledges that the
identifies of Schwab's customers, information maintained by Schwab
regarding those customers, and all computer programs and procedures
developed by Schwab or Schwab's agents in connection with Schwab's
performance of its duties hereunder constitute the valuable property of
Schwab. Fund Party agrees that should it come into possession of any list
or compilation of the identities of or other information about Schwab's
customers, or any other property of Schwab, Fund Party will hold such
information or property in confidence and refrain from using, disclosing,
or distributing any of such information or other property except (i) with
Schwab's prior written consent, or (ii) as required by law or judicial
process. Fund Party acknowledges that any breach of the foregoing
agreements would result in immediate and irreparable harm to Schwab for
which there would be no adequate remedy at law and agrees that in the event
of such a breach Schwab would be entitled to equitable relief by way of
temporary and permanent injunctions, as well as such other relief as any
court of competent jurisdiction deems appropriate.
11. Information to be Provided. Fund Party has provided to Schwab
and, as to each Fund, shall provide to Schwab prior to the effectiveness of
this Agreement as to such Fund, the following information and documents:
a. Evidence reasonably acceptable to Schwab of the
authorization of Fund Party to enter into this Agreement as to each Fund;
b. A list of the officers of Fund Party who are authorized to
instruct Schwab in connection with the Services with respect to such Fund,
together with specimen signatures of those officers; and
c. Two copies of the then-current Prospectus and Statement of
Additional Information for each such Fund.
Fund Party shall furnish Schwab with written copies of any amendments to or
changes in any of the documents referred to in this Section as soon as
practicable after such amendments or changes become available.
12. Multi-Class Funds. Notwithstanding anything in this Agreement to
the contrary, as to any Fund that offers to the public more than one class
of shares, (i) this Agreement shall not become effective until the
effective date of any agreement or document containing such
representations, warranties, covenants, and agreements as may be both
required by any order of the Securities and Exchange Commission relating to
the offer and sale of such multiple classes of shares and acceptable to
Schwab and (ii) this Agreement shall be terminable under the terms set
forth in Section 3.b. of this Agreement at such times and upon such events
as are required in any such order.
13. Nonexclusivity. Fund Party acknowledges that Schwab may perform
services similar to those to be provided under this Agreement to other
investment companies, investment company sponsors, or service providers to
investment companies. Schwab acknowledges that Fund Party may obtain
services similar to those provided by Schwab under this Agreement from
other brokers, dealers, or providers of services to investment companies.
14. Assignability. This Agreement is not assignable by either party
without the other party's prior written consent; provided that Schway may,
without Fund Party's consent, assign its rights and obligations under this
Agreement to any corporation that (i) controls, is controlled by, or is
under common control with Schwab and (ii) is registered as a transfer agent
under Section 17A(c) of the Securities Exchange Act of 1934, as amended.
In the event of an `assignment'' of this Agreement, within the meaning of
the Company Act and the rules of the Securities and Exchange commission
promulgated thereunder, this Agreement shall terminate in accordance with
and subject to the terms of Section 3.b. of this Agreement. If any event
is proposed (x) for which the consents, if any, required by the first
sentence of this Section 14 have been obtained, and (y) that would
constitute such an `assignment,'' then Schwab and Fund Party shall each
use its best efforts to cause a new agreement, in form and substance as
nearly identical to this Agreement as possible, to be executed and
delivered by the appropriate parties and made effective prior to the time
of such proposed event. If such a new agreement cannot be executed,
delivered, and made effective prior to the termination of this Agreement,
Schwab and Fund Party shall each use its best efforts to obtain such
ratifications or approvals and take such other steps as may be necessary to
reinstate this Agreement, or to cause the effectiveness of anew agreement
in form and substance as nearly identical to this Agreement as possible,
all as soon after such termination as practicable.
15. Notices. All notices required by this Agreement shall be in
writing and delivered personally or sent by first class mail. All notices
and other communications concerning this Agreement will be deemed to have
been received as of the earlier of actual physical receipt or three days
after deposit, first class postage prepaid, in the United States Mail. All
such notices and other communication shall be made:
if to Schwab, to:
Charles Schwab & Co., Inc.
101 Montgomery Street
San Francisco, CA 94104
Attention: John McGonigle
With a copy to: General Counsel, at same address
if to Fund Party, to the address given below in the signature block
16. Exhibits. All Exhibits and Schedules attached to this Agreement,
as they may be amended from time to time , are by this reference
incorporated into and made a part of this Agreement.
17. Amendment. this Agreement and the Exhibits and Schedules hereto
may be amended only by a writing executed by each party hereto that is to
be bound by such amendment.
18. Governing Law. This Agreement will be governed by and
interpreted under the laws of the State of California as applied to
contracts entered into and to be performed entirely within that state.
19. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CHARLES SCHWAB & CO., INC.
By:
Its:
FUND PARTY
(name)
By:
Its:
Address:
Attn.:
SCHEDULE I
(List of Funds/Portfolios/Classes to which fees are applicable)
Fund Date
EXHIBIT A
SERVICES
Capitalized terms used in this Exhibit have the meanings given them in the
agreement to which this Exhibit is attached (the `Agreement'').
Record Maintenance.
Schwab shall maintain records for each Schwab customer who holds
shares of any Fund in a Schwab account and for each Fund, which
records shall include:
A. Number of shares;
B. Date and price of purchases and redemptions (including dividend
reinvestments) and dates and amounts of dividends paid for at
least the current year to date;
C. Name and address of each such Schwab customer, including zip
codes and tax identification numbers;
D. Records of distributions and dividends payments;
E. Any transfers of shares; and
F. Overall control records.
Fund Communications.
Schwab shall, on a daily basis and for each Fund, report the number of
shares on which the Fee is to be paid pursuant to the Agreement and
the number of shares on which no such Fee is to be paid. Schwab shall
also provide each Fund with monthly summaries of reports. Such
summaries shall be expressed in both shares and dollar amounts.
Shareholder Communications. Schwab shall:
A. Mail Fund prospectuses upon customer request and, as applicable,
with confirmation statements and in accordance with applicable
law, including;
B. As to each Fund, provide to a shareholder mailing agent employed
by such Fund for the purpose of mailing certain Fund-related
materials the names and addresses of all Schwab customers who
hold shares of such Fund in their Schwab accounts. Such
shareholder mailing agent shall be a person or entity engaged by
such Fund in accordance with the Operating Agreement referred to
in Section 4 of the Agreement and the Fund-related materials to
be sent by such agent shall consist of updated prospectuses,
annual and semi-annual reports, proxy statements, and other
appropriate shareholder communications. Schwab shall provide
such customer names and addresses as of any time reasonably
requested by such Fund;
C. Mail statements to customers on a monthly basis, (or, as to
accounts in which there has been no activity in a particular
money, no less frequently than quarterly) showing, among other
things, the number of shares of each Fund owned by such customer
and the net asset values of such Funds as of a recent date;
D. With respect to each Fund, produce and mail to customers and to
the appropriate Federal taxing authority statement indicating,
for Federal tax purposes, the amounts of dividend income and
capital gains attributable to such customers from such Fund;
E. Produce and mail to customers confirmation statements reflecting
purchases and redemptions of shares of each Fund in Schwab
brokerage accounts; and
F. Respond to customer inquiries regarding, among other things,
share prices, account balances, dividend amounts, and dividend
payment dates.
Transactional Services.
Schwab shall communicate, as to shares of each Fund, purchase,
redemption and exchange orders reflecting the orders it receives from
its customers, in accordance with the procedures contemplated in the
Agreement.
EXHIBIT B
CALCULATION OF FEE
Capitalized terms used in this Exhibit have the meanings given them in the
agreement to which this Exhibit is attached (the `Agreement'').
1. Fund Party shall pay to Schwab, for each Fund, a fee, computed
daily and paid monthly in arrears, equal to the percentage per annum
specified on Exhibit C to the Agreement applied to the average daily value
of the total number of shares of such Fund held in accounts at Schwab
(subject to the exclusion in the next sentence). Notwithstanding the
preceding sentence there shall be excluded from the computation of such
amount the value of (i) shares as to which a broker customer paid Schwab a
transaction fee upon such customer's purchase of such shares, (ii) shares
held in a Schwab brokerage account prior to the effective date of the
Agreement as to the Fund issuing such shares, and (iii) shares first placed
or purchased in a Schwab brokerage account after the termination of the
Agreement as to the Fund issuing such shares.
2. As soon as practicable after the end of each month, for each
Fund, Schwab shall send Fund Party, in the manner called for in the
Agreement, a statement of the average daily value for the preceding month
of shares of such Fund as to which the fee called for in Section 1 of this
Exhibit are calculated, together with a statement of the amount of such
fee. In the calculation of fee, Schwab's records shall govern unless an
error can be shown in the number of shares used in such calculation.
3. Fund Party shall pay Schwab such fee within 30 days after Fund
Party's receipt (in accordance with the Agreement) of such statement. Such
payment shall be by wire transfer unless the amount thereof is less than
$500. Wire transfers shall be sent to Citibank Account No. 4055-8865 or
such other account as Schwab may designate from time to time. Such wire
transfers shall be separate from wire transfers of redemption proceeds and
distributions. Amounts less than $500 may, at Fund Party's discretion, be
paid by check,
4. for purposes of this Exhibit, the average daily value of the
shares of each Fund will be based on the net asset values reported by such
Fund to the National Association of Securities Dealers, Inc. Automated
Quotation System. No adjustments will be made to such net asset values to
correct errors in the net asset values so reported for any day unless such
error is corrected and the correct net asset value per share is reported to
Schwab before 5 o'clock p.m., San Francisco time, on the first business day
after the day to which the error relates.
EXHIBIT C
AMOUNT OF FEE
Percentage Per Annum
of Average Daily
FUND PARTY Value of Fund Shares
(name) %
Exhibit 15(ii) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
EXHIBIT G
FEDERATED MUNICIPAL TRUST
Ohio Municipal Cash Trust
Cash II Shares
The Plan is adopted by Federated Municipal trust with respect to the
Class of Shares of the Fund set forth above.
In compensation for the services provided pursuant to this Plan, FSC
will be paid a monthly fee computed at the annual rate of .30 of 1% of the
average aggregate net asset value of the Cash II Shares of the Ohio
Municipal Cash Trust during the month.
Witness the due execution hereof this 26th day of March, 1991.
FEDERATED MUNICIPAL TRUST
By: /s/ Richard B. Fisher
<TABLE>
<CAPTION>
<S> <C>
Exhibit 16 16(xi) under Form N-1A
Exhibit 99 under Item 601/Reg. S-K
Schedule for computation of Yield Calculation
Tennessee Municipal Cash Trust (Institutional Shares)
This example illustrates the yield quotation for the seven-day period 31-Oct-96
ended:
Value of a hypothetical pre-existing account with exactly $1.000000000
one share at the beginning of the base period
Value of same account (excluding capital changes) at end $1.000632774
of the seven-day base period*
$0.000632774
Net change in account value
Base Period Return:
Net change in account value divided by the beginning account value $0.000632774
($ .000632774 / $1.000000000)
Annualized Current Net Yield ( .000632774 x 365/7) 3.30%
Effective Yield ** (.000632774 + 1 ) ^ (365/7) - 1 3.35%
* This value includes the value of additional shares purchased with
dividends from the original share, and dividends declared on both the
original share and any such additional shares.
** This value may change to include shares purchased with dividends
reinvested on a less frequent basis.
Tax Equivalent Yield (Assumes individual does not itemize on Federal
Return)
100% minus the Federal and Tennessee taxable %'s (100% - 28% - 6% = 66%)
7 Day Net Yield / by the tax eqivalent % (3.30% / 66%) = 5.00%
100
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Schedule for computation of Yield Calculation
Tennessee Municipal Cash Trust (Institutional Service Shares)
This example illustrates the yield quotation for the seven-day period ended: 31-Oct-96
Value of a hypothetical pre-existing account with exactly $1.000000000
one share at the beginning of the base period
Value of same account (excluding capital changes) at end $1.000584831
of the seven-day base period*
$0.000584831
Net change in account value
Base Period Return:
Net change in account value divided by the beginning account value $0.000584831
($ .000584831 / $1.000000000)
Annualized Current Net Yield ( .000584831 x 365/7) 3.05%
Effective Yield ** (.000584831 + 1 ) ^ (365/7) - 1 3.10%
* This value includes the value of additional shares purchased with
dividends from the original share, and dividends declared on both the
original share and any such additional shares.
** This value may change to include shares purchased with dividends
reinvested on a less frequent basis.
Tax Equivalent Yield (Assumes individual does not itemize on Federal Return)
100% minus the Federal and Michigan taxable %'s (100% - 28% - 6% = 66%)
7 Day Net Yield / by the tax eqivalent % (3.05% / 66%) = 4.62%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Schedule for Computation of Initial
Fund Performance Data Invest of: $1,000
Tennessee Municipal Cash Trust
Institutional Shares Initial
Offering
Price/Share= $1.00
Return Since Inception 5/22/95NAV= $1.00
ending 10/31/96
FYE: October 31, 1996
Beginning Capital Reinvest Ending Total
DECLARED: Daily Reinvest Period Dividend Gain Price Period Ending Investment
PAID: Monthly Dates Shares /Share /Share /Share Shares Price Value
5/31/96 1000.000 0.001119240 0.00000 $1.00 1001.11 $1.00 $1,001.12
9
6/30/96 1001.119 0.002987905 0.00000 $1.00 1004.11 $1.00 $1,004.11
0
7/31/96 1004.110 0.002770331 0.00000 $1.00 1006.89 $1.00 $1,006.89
2
8/31/96 1006.892 0.003135774 0.00000 $1.00 1010.05 $1.00 $1,010.05
0
9/30/96 1010.050 0.002928798 0.00000 $1.00 1013.00 $1.00 $1,013.01
8
10/31/96 1013.008 0.002855103 0.00000 $1.00 1015.90 $1.00 $1,015.90
0
Note: The Fund has not paid any income or ST capital gain dividends in FYE 10/31/96.
$1,000 (1+T) = Ending Value
T =
1.59%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Schedule for Computation of Initial
Fund Performance Data Invest of: $1,000
Tennessee Municipal Cash Trust
Institutional Service Shares Initial
Offering
Price/Share= $1.00
Return Since Inception 5/22/95NAV= $1.00
ending 10/31/96
FYE: October 31, 1996
Beginning Capital Reinvest Ending Total
DECLARED: Daily Reinvest Period Dividend Gain Price Period Ending Investment
PAID: Monthly Dates Shares /Share /Share /Share Shares Price Value
5/31/96 1000.000 0.001050959 0.00000 $1.00 1001.05 $1.00 $1,001.05
1
6/30/96 1001.051 0.002782435 0.00000 $1.00 1003.83 $1.00 $1,003.84
6
7/31/96 1003.836 0.002558012 0.00000 $1.00 1006.40 $1.00 $1,006.40
4
8/31/96 1006.404 0.002923455 0.00000 $1.00 1009.34 $1.00 $1,009.35
6
9/30/96 1009.346 0.002723328 0.00000 $1.00 1012.09 $1.00 $1,012.10
5
10/31/96 1012.095 0.002642784 0.00000 $1.00 1014.77 $1.00 $1,014.77
0
Note: The Fund has not paid any income or ST capital gain dividends in FYE 10/31/96.
$1,000 (1+T) = Ending Value
T =
1.48%
</TABLE>
Exhibit 19 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 FEDERATED MUNICIPAL TRUST
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 and Trustee June 5, 1996
John F. Donahue (Chief Executive Officer)
/s/ Glen R. Johnson President and Trustee June 5, 1996
Glen R. Johnson
/s/ John W. McGonigle Treasurer and Executive ViceJune 5, 1996
John W. McGonigle President
(Principal Financial and
Accounting Officer)
/s/ Thomas G. Bigley Trustee June 5, 1996
Thomas G. Bigley
/s/ John T. Conroy, Jr. Trustee June 5, 1996
John T. Conroy, Jr.
SIGNATURES TITLE DATE
/s/ William J. Copeland Trustee June 5, 1996
William J. Copeland
/s/ James E. Dowd Trustee June 5, 1996
James E. Dowd
/s/ Lawrence D. Ellis, M.D. Trustee June 5, 1996
Lawrence D. Ellis, M.D.
/s/ Edward L Flaherty, Jr. Trustee June 5, 1996
Edward L. Flaherty, Jr.
/s/ Peter E. Madden Trustee June 5, 1996
Peter E. Madden
/s/ Gregor F. Meyer Trustee June 5, 1996
Gregor F. Meyer
/s/ John E. Murray, Jr. Trustee June 5, 1996
John E. Murray, Jr.
/s/ Wesley W. Posvar Trustee June 5, 1996
Wesley W. Posvar
/s/ Marjorie P. Smuts Trustee June 5, 1996
Marjorie P. Smuts
Sworn to and subscribed before me this 5th day of June, 1996
/s/ Marie M. Hamm
Notarial Seal
Marie M. Hamm, Notary Public
Plum Boro, Allegheny County
My Commission Expires Sept. 16, 1996
Member Pennsylvania Association of Notaries
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 161
<NAME> Federated Municipal Trust
Tennessee Municipal Cash Trust
Institutional Shares
<PERIOD-TYPE> 5-mos
<FISCAL-YEAR-END> Oct-31-1996
<PERIOD-END> Oct-31-1996
<INVESTMENTS-AT-COST> 49,090,926
<INVESTMENTS-AT-VALUE> 49,090,926
<RECEIVABLES> 260,093
<ASSETS-OTHER> 169,351
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 49,520,370
<PAYABLE-FOR-SECURITIES> 1,743,907
<SENIOR-LONG-TERM-DEBT> 128,757
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 1,872,664
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 47,647,706
<SHARES-COMMON-STOCK> 17,823,803
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 17,823,803
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 525,612
<OTHER-INCOME> 0
<EXPENSES-NET> 37,711
<NET-INVESTMENT-INCOME> 487,901
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 487,901
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 226,076
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 34,644,791
<NUMBER-OF-SHARES-REDEEMED> 16,824,443
<SHARES-REINVESTED> 3,455
<NET-CHANGE-IN-ASSETS> 47,647,706
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 71,830
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 247,153
<AVERAGE-NET-ASSETS> 32,257,381
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.010
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> 0.010
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 0.10
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 162
<NAME> Federated Municipal Trust
Tennessee Municipal Cash Trust
Institutional Service Shares
<PERIOD-TYPE> 5-mos
<FISCAL-YEAR-END> Oct-31-1996
<PERIOD-END> Oct-31-1996
<INVESTMENTS-AT-COST> 49,090,926
<INVESTMENTS-AT-VALUE> 49,090,926
<RECEIVABLES> 260,093
<ASSETS-OTHER> 169,351
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 49,520,370
<PAYABLE-FOR-SECURITIES> 1,743,907
<SENIOR-LONG-TERM-DEBT> 128,757
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 1,872,664
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 47,647,706
<SHARES-COMMON-STOCK> 29,823,903
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 29,823,903
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 525,612
<OTHER-INCOME> 0
<EXPENSES-NET> 37,711
<NET-INVESTMENT-INCOME> 487,901
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 487,901
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 261,825
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 131,090,076
<NUMBER-OF-SHARES-REDEEMED> 101,472,057
<SHARES-REINVESTED> 205,884
<NET-CHANGE-IN-ASSETS> 47,647,706
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 71,830
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 247,153
<AVERAGE-NET-ASSETS> 32,257,381
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.010
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> 0.010
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 0.37
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
