1933 Act File No. 33-32755
1940 Act File No. 811-5981
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. 14 _X___
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 15 X
FEDERATED GOVERNMENT TRUST
(Exact Name of Registrant as Specified in Charter)
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
John W. McGonigle, Esquire,
Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
on _________________ pursuant to paragraph (b)
X 60 days after filing pursuant to paragraph (a)
on pursuant to paragraph (a) of Rule 485.
Registrant has filed with the Securities and Exchange Commission a declaration
pursuant to Rule 24f-2 under the Investment Company Act of 1940, and:
X filed the Notice required by that Rule on June 15, 1994; or
intends to file the Notice required by that Rule on or about ____________;
or
during the most recent fiscal year did not sell any securities pursuant to
Rule 24f-2 under the Investment Company Act of 1940, and, pursuant to
Rule 24f-2(b)(2), need not file the Notice.
Copies to:
Thomas J. Donnelly, Esquire Charles H. Morin, Esquire
Houston, Houston & Donnelly Dickstein, Shapiro & Morin, L.L.P.
2510 Centre City Tower 2101 L Street, N.W.
650 Smithfield Street Washington, D.C. 20037
Pittsburgh, Pennsylvania 15222
CROSS-REFERENCE SHEET
This Amendment to the Registration Statement of FEDERATED GOVERNMENT
TRUST, which consists of three portfolios, (1) Automated Government Cash
Reserves, (2) U.S. Treasury Cash Reserves (Institutional Shares (IS) and
Institutional Service Shares(ISS)), and (3) Automated Treasury Cash Reserves,
relates only to U.S. Treasury Cash Reserves and is comprised of the following:
PART A. INFORMATION REQUIRED IN A PROSPECTUS.
Prospectus Heading
(Rule 404(c) Cross Reference)
Item 1. Cover Page (1-3) Cover Page.
Item 2. Synopsis (1-3) Summary of Fund Expenses.
Item 3. Condensed Financial
Information (1-3) Financial Highlights;
(1-3) Performance Information.
Item 4. General Description of
Registrant (1-3) General Information; (1-3)
Investment Information; (1-3)
Investment Objective; (1-3)
Investment Policies; (1-3)
Investment Limitations; (1-3)
Regulatory Compliance.
Item 5. Management of the Trust (1-3) Trust Information; (1-3)
Management of the Trust; (1-3)
Distribution of Fund Shares (2-ISS
Distribution of Shares); (1-3)
Administration of the Fund.
Item 6. Capital Stock and Other
Securities (1-3) Dividends; (1-3) Capital
Gains; (1-3) Shareholder
Information; (1-3) Voting Rights; (1-
3) Massachusetts Partnership Law; (1-
3) Tax Information; (1-3) Federal
Income Tax; (1-3) State and Local
Taxes.
Item 7. Purchase of Securities Being
Offered (1-3) Net Asset Value; (1-3)
Investing in the Fund; (1-3) Share
Purchases; (1-3) Minimum Investment
Required; (1-3) Cash Sweep Program;
(1-3) What Shares Cost; (1-3)
Subaccounting Services; (1-3)
Certificates and Confirmations.
Item 8. Redemption or Repurchase (1-3) Redeeming Shares; (1-3)
Telephone Redemption; (1-3) Written
Requests; (1-3) Accounts With Low
Balances; (1, 2-IS, 3) Redemption in
Kind.
Item 9. Pending Legal Proceedings None.
PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION.
Item 10. Cover Page (1-3) Cover Page.
Item 11. Table of Contents (1-3) Table of Contents.
Item 12. General Information and
History (1-3) General Information About the
Fund.
Item 13. Investment Objectives and
Policies (1-3) Investment Objective and
Policies.
Item 14. Management of the Fund (1-3) Federated Government Trust
Management.
Item 15. Control Persons and Principal
Holders of Securities Not applicable.
Item 16. Investment Advisory and Other
Services (1-3) Investment Advisory Services.
(1-3) Administrative Services.
(1-3) Shareholder Services Plan.
(2) Distribution Plan.
Item 17. Brokerage Allocation (1-3) Brokerage Transactions.
Item 18. Capital Stock and Other
Securities Not applicable.
Item 19. Purchase, Redemption and
Pricing of Securities Being
Offered (1-3) Purchasing Shares; (1-3)
Determining Net Asset Value; (1-3)
Redeeming Shares.
Item 20. Tax Status (1-3) Tax Status.
Item 21. Underwriters (1-3) Shareholder Servicing
Arrangements.
Item 22. Calculation of Performance
Data (1-3) Yield; (1-3) Effective Yield;
(1-3) Performance Comparisons.
Item 23. Financial Statements Included in Part A. Financial
Statements for U.S. Treasury Cash
Reserves, Institutional Service
Shares will be filed in Part A by
amendment.
U.S. TREASURY CASH RESERVES
(A PORTFOLIO OF FEDERATED GOVERNMENT TRUST)
INSTITUTIONAL SERVICE SHARES
PROSPECTUS
The Institutional Service Shares of U.S. Treasury Cash Reserves (the "Fund")
offered by this prospectus represent interests in a diversified portfolio of
Federated Government Trust (the "Trust"), an open-end management investment
company (a mutual fund) investing in short-term U.S. Treasury obligations to
achieve current income consistent with stability of principal and liquidity.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF ANY
BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK, AND ARE NOT INSURED BY THE U.S
GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD, OR ANY OTHER GOVERNMENT AGENCY. INVESTMENT IN THESE SHARES INVOLVES
INVESTMENT RISKS INCLUDING POSSIBLE LOSS OF PRINCIPAL. THE FUND ATTEMPTS TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE; THERE CAN BE NO ASSURANCE
THAT THE FUND WILL BE ABLE TO DO SO.
This prospectus contains the information you should read and know before you
invest in the Fund. Keep this prospectus for future reference.
The Fund has also filed a Statement of Additional Information dated October
, 1994, with the Securities and Exchange Commission. The information
contained in the Statement of Additional Information is incorporated by
reference into this prospectus. You may request a copy of the Statement of
Additional Information free of charge by calling 1-800-235-4669. To obtain other
information or make inquiries about the Fund, contact the Fund at the address
listed on the back of this prospectus.
The Fund aims to provide institutional investors with a cost-effective,
administratively convenient, highly liquid, cash equivalent vehicle that can be
integrated into an existing or contemplated cash management system. The Fund
will report changes in principal balances and monthly income distributions in a
format that is compatible with all major trust operations systems presently in
use.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus dated October , 1994
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
SUMMARY OF FUND EXPENSES 1
- ------------------------------------------------------
GENERAL INFORMATION 2
- ------------------------------------------------------
INVESTMENT INFORMATION 2
- ------------------------------------------------------
Investment Objective 2
Investment Policies 2
Acceptable Investments 2
When-Issued and Delayed
Delivery Transactions 2
Investment Limitations 3
Regulatory Compliance 3
TRUST INFORMATION 3
- ------------------------------------------------------
Management of the Trust 3
Board of Trustees 3
Investment Adviser 3
Advisory Fees 3
Adviser's Background 4
Distribution of Shares 4
Distribution and Shareholder
Services Plans 4
Other Payments to Financial
Institutions 5
Administration of the Fund 5
Administrative Services 5
Custodian 5
Transfer Agent and Dividend
Disbursing Agent 5
Legal Counsel 5
Independent Auditors 5
Expenses of the Fund and Institutional
Service Shares 5
NET ASSET VALUE 6
- ------------------------------------------------------
INVESTING IN THE FUND 6
- ------------------------------------------------------
Share Purchases 6
By Wire 6
By Mail 7
Minimum Investment Required 7
Cash Sweep Program 7
Participating Depository Institutions 7
What Shares Cost 7
Subaccounting Services 8
Certificates and Confirmations 8
Dividends 8
Capital Gains 8
REDEEMING SHARES 8
- ------------------------------------------------------
Telephone Redemption 8
Written Requests 9
Signatures 9
Receiving Payment 9
Accounts with Low Balances 10
SHAREHOLDER INFORMATION 10
- ------------------------------------------------------
Voting Rights 10
Massachusetts Partnership Law 10
TAX INFORMATION 10
- ------------------------------------------------------
Federal Income Tax 10
State and Local Taxes 11
Pennsylvania Corporate and
Personal Property Taxes 11
PERFORMANCE INFORMATION 11
- ------------------------------------------------------
OTHER CLASSES OF SHARES 12
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS 13
- ------------------------------------------------------
FINANCIAL STATEMENTS 14
- ------------------------------------------------------
REPORT OF ERNST & YOUNG,
INDEPENDENT AUDITORS 20
- ------------------------------------------------------
ADDRESSES Inside Back Cover
- ------------------------------------------------------
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INSTITUTIONAL SERVICE SHARES
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)........... None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price)................................................. None
Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds as applicable)................................ None
Redemption Fee (as a percentage of amount redeemed, if applicable).................... None
Exchange Fee.......................................................................... None
ANNUAL INSTITUTIONAL SERVICE SHARES OPERATING EXPENSES*
(As a percentage of projected average net assets)
Management Fee (after waiver)(1)...................................................... %
12b-1 Fee(2).......................................................................... %
Total Other Expenses (after expense reimbursement).................................... %
Shareholder Services Fee.......................................................... %
Total Institutional Service Shares Operating Expenses(3)..................... %
</TABLE>
(1) The estimated management fee has been reduced to reflect the anticipated
voluntary waiver of the management fee. The adviser can terminate this voluntary
waiver at any time at its sole discretion. The maximum management fee is %.
(2) The Institutional Service Shares have no present intention of paying or
accruing the 12b-1 fee during the period ending April 30, 1995. If the
Institutional Service Shares were paying or accruing the 12b-1 fee, the Class
would be able to pay up to % of its average daily net assets for the 12b-1
fee. See "Trust Information."
(3) The Total Institutional Service Shares Operating Expenses are estimated to
be % absent the anticipated voluntary waiver of the management fee and the
anticipated voluntary reimbursement of certain other operating expenses.
* Total Institutional Service Shares Operating Expenses are estimated based on
average expenses expected to be incurred during the period ending April 30,
1995. During the course of this period, expenses may be more or less than the
average amount shown.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF INSTITUTIONAL SERVICE SHARES OF
THE FUND WILL BEAR, EITHER DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE
DESCRIPTIONS OF THE VARIOUS COSTS AND EXPENSES, SEE "INVESTING IN THE FUND" AND
"TRUST INFORMATION." WIRE-TRANSFERRED REDEMPTIONS OF LESS THAN $5,000 MAY BE
SUBJECT TO ADDITIONAL FEES.
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years
- -------------------------------------------------------------------------------------- ------ -------
<S> <C> <C>
You would pay the following expenses on a $1,000 investment assuming (1) 5% annual
return and (2) redemption at the end of each time period.............................. $-- $--
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The information set forth in the foregoing table and example relates only to
Institutional Service Shares of the Fund. The Fund also offers another class of
shares called Institutional Shares. Institutional Service Shares and
Institutional Shares are subject to certain of the same expenses, however,
Institutional Shares are not subject to a 12b-1 fee. See "Other Classes of
Shares."
GENERAL INFORMATION
- --------------------------------------------------------------------------------
The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated December 7, 1989. The Declaration of Trust permits the Trust to
offer separate series of shares of beneficial interest representing interests in
separate portfolios of securities. The shares in any one portfolio may be
offered in separate classes. With respect to this Fund, as of the date of this
prospectus, the Trustees have established two classes of shares know as
Institutional Service Shares and Institutional Shares. This prospectus relates
only to Institutional Service Shares ("Shares") of the Fund. The Fund is
designed primarily for institutional investors, such as banks, fiduciaries,
custodians of public funds, and similar institutional investors, such as
corporations, unions, hospitals, insurance companies, and municipalities, as a
convenient means of participating in a professionally managed, diversified
portfolio limited to short-term U.S. Treasury obligations. The Fund is also
designed for customers of institutional investors. 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 consistent with stability
of principal and liquidity. This investment objective cannot be changed without
approval of shareholders. While there is no assurance that the Fund will achieve
its investment objective, it endeavors to do so by following the investment
policies described in this prospectus.
INVESTMENT POLICIES
The Fund pursues its investment objective by investing in a portfolio of only
short-term U.S. Treasury obligations which are issued by the U.S. government and
are fully guaranteed as to payment of principal and interest by the United
States. Unless indicated otherwise, the investment policies may be changed by
the Trustees without approval of shareholders. Shareholders will be notified
before any material changes in these policies become effective.
ACCEPTABLE INVESTMENTS. The Fund invests only in U.S. Treasury obligations
maturing in thirteen months or less. The average maturity of the U.S. Treasury
obligations in the Fund's portfolio, computed on a dollar-weighted basis, will
be 90 days or less.
The Fund will limit its investments to U.S. Treasury obligations, the interest
on which is exempt from personal income tax in the various states if owned
directly.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase U.S.
Treasury obligations 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 Fund engages in
when-issued and delayed delivery transactions only for the purpose of acquiring
portfolio
securities consistent with the Fund's investment objective and policies, not for
investment leverage. In when-issued and delayed delivery transactions, the Fund
relies on the seller to complete the transaction. The seller's failure to
complete the transaction may cause the Fund to miss a price or yield considered
to be advantageous.
INVESTMENT LIMITATIONS
The Fund will not borrow money or pledge securities except, under certain
circumstances, the Fund may borrow up to one-third of the value of its total
assets and pledge up to 10% of the value of its total assets to secure such
borrowings.
The above investment limitation cannot be changed without shareholder approval.
The following limitation, however, may be changed by the Trustees without
shareholder approval. Shareholders will be notified before any material change
in this limitation becomes effective.
The Fund will not invest more than 10% of its net assets in illiquid obligations
such as demand master notes, the demand for full or partial prepayment of which
may not occur within 7 days of notice.
REGULATORY COMPLIANCE
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in this
prospectus and its Statement of Additional Information, in order to comply with
applicable laws and regulations, including the provisions of and regulations
under the Investment Company Act of 1940, as amended. In particular, the Fund
will comply with the various requirements of Rule 2a-7, which regulates money
market mutual funds. The Fund will determine the effective maturity of its
investments according to Rule 2a-7. The Fund may change these operational
policies to reflect changes in the laws and regulations without the approval of
its shareholders.
TRUST INFORMATION
- --------------------------------------------------------------------------------
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees (the "Trustees").
The Trustees are responsible for managing the business affairs of the Trust and
for exercising all the powers of the Trust, except those reserved for the
shareholders. The Executive Committee of the Board of Trustees handles the
Board's responsibilities between meetings of the Board.
INVESTMENT ADVISER. Pursuant to an investment advisory contract with the Trust,
investment decisions for the Fund are made by Federated Management, the Fund's
investment adviser (the "Adviser"), subject to direction by the Trustees. The
Adviser continually conducts investment research and supervision for the Fund
and is responsible for the purchase or sale of portfolio instruments, for which
it receives an annual fee from the Fund.
ADVISORY FEES. The Adviser receives an annual investment advisory fee equal
to .40 of 1% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive a portion of its fee or reimburse the Fund for
certain operating expenses. The Adviser can terminate this voluntary waiver
of its advisory fee at any time at its sole discretion. This does not
include reimbursement to
the Fund of any expenses incurred by shareholders who use the transfer
agent's subaccounting facilities. The Adviser has also undertaken to
reimburse the Fund for operating expenses in excess of limitations
established by certain states.
ADVISER'S BACKGROUND. Federated Management, a Delaware business trust
organized on April 11, 1989, is a registered investment adviser under the
Investment Advisers Act of 1940. It is a subsidiary of Federated Investors.
All of the Class A (voting) shares of Federated Investors are owned by a
trust, the trustees of which are John F. Donahue, Chairman and Trustee of
Federated Investors, Mr. Donahue's wife, and Mr. Donahue's son, J.
Christopher Donahue, who is President and Trustee of Federated Investors.
Federated Management and other subsidiaries of Federated Investors serve as
investment advisers to a number of investment companies and private
accounts. Certain other subsidiaries also provide administrative services
to a number of investment companies. Total assets under management or
administration by these and other subsidiaries of Federated Investors are
approximately $70 billion. Federated Investors, which was founded in 1956
as Federated Investors, Inc., develops and manages mutual funds primarily
for the financial industry. Federated Investors' track record of
competitive performance and its disciplined, risk averse investment
philosophy serve approximately 3,500 client institutions nationwide.
Through these same client institutions, individual shareholders also have
access to this same level of investment expertise.
DISTRIBUTION OF 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.
DISTRIBUTION AND SHAREHOLDER SERVICES PLANS. Under a distribution plan adopted
in accordance with Investment Company Act Rule 12b-1 (the "Distribution Plan"),
the Fund may pay to the distributor an amount, computed at an annual rate of .25
of up to 1% of the average daily net asset value of the Institutional Service
Shares to finance any activity which is principally intended to result in the
sale of shares subject to the Distribution Plan. The distributor may select
financial institutions such as banks, fiduciaries, custodians for public funds,
investment advisers, and broker/dealers to provide sales support services as
agents for their clients or customers. In addition, the Fund has adopted a
Shareholder Services Plan (the "Services Plan") under which it will pay
financial institutions an amount not exceeding .25 of 1% of the average daily
net asset value of the Institutional Service Shares to provide administrative
support services to their customers who own shares of the Fund. From time to
time and for such periods as deemed appropriate, the amounts stated above may be
reduced voluntarily. Activities and services under these arrangements may
include, but are not limited to, providing advertising and marketing materials
to prospective shareholders, providing personal services to shareholders, and
maintaining shareholder accounts.
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 or the
distributor, as appropriate.
The Distribution Plan is a compensation-type plan. As such, the Fund makes no
payments to the distributor except as described above. Therefore, the Fund does
not pay for unreimbursed expenses of the distributor, including amounts expended
by the distributor in excess of amounts received by it from the Fund, interest,
carrying or other financing charges in connection with excess amounts expended,
or the distributor's overhead expenses. However, the distributor may be able to
recover such amounts or may earn a profit from future payments made by the Fund
under the Distribution Plan.
OTHER PAYMENTS TO FINANCIAL INSTITUTIONS. In addition to periodic payments to
financial institutions under the Shareholder Services Plan, certain financial
institutions may be compensated by the Adviser or its affiliates for the
continuing investment of customers' assets in certain funds, including the Fund,
advised by those entities. These payments will be made directly by the
distributor or Adviser from their assets, and will not be made from the assets
of the Fund or by the assessment of a sales charge on shares.
ADMINISTRATION OF THE FUND
ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, provides administrative personnel and services (including
certain legal and financial reporting services) necessary to operate the Fund.
Federated Administrative Services provides these at an annual rate which relates
to the average aggregate daily net assets of all funds advised by subsidiaries
of Federated Investors (the "Federated Funds") as specified below:
<TABLE>
<CAPTION>
AVERAGE AGGREGATE DAILY NET
MAXIMUM ADMINISTRATIVE FEE ASSETS OF THE FEDERATED FUNDS
- -------------------------- -----------------------------------
<S> <C>
0.15 of 1% on the first $250 million
0.125 of 1% on the next $250 million
0.10 of 1% on the next $250 million
0.075 of 1% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
Federated Administrative Services may choose voluntarily to waive a portion of
its fee.
CUSTODIAN. State Street Bank and Trust Company ("State Street Bank"), Boston,
Massachusetts, is custodian for the securities and cash of the Fund.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated Services Company,
Pittsburgh, Pennsylvania, is transfer agent for the shares of the Fund, and
dividend disbursing agent for the Fund.
LEGAL COUNSEL. Legal counsel is provided by Houston, Houston & Donnelly,
Pittsburgh, Pennsylvania, and Dickstein, Shapiro & Morin, L.L.P., Washington,
D.C.
INDEPENDENT AUDITORS. The independent auditors for the Fund are Ernst & Young,
Pittsburgh, Pennsylvania.
EXPENSES OF THE FUND AND INSTITUTIONAL SERVICE SHARES
Holders of Shares pay their allocable portion of Fund and Trust expenses.
The Trust expenses for which holders of Shares pay their allocable portion
include, but are not limited to: the cost of organizing the Trust and continuing
its existence; registering the Trust with federal and state securities
authorities; Trustees' fees; auditors' fees; the cost of meetings of Trustees;
legal fees of the Trust; association membership dues; and such non-recurring and
extraordinary items as may arise.
The Fund expenses for which holders of Shares pay their allocable portion
include, but are not limited to: registering the Fund and Shares of the Fund;
investment advisory services; taxes and commissions; custodian fees; insurance
premiums; auditors' fees; and such non-recurring and extraordinary items as may
arise.
At present, the only expenses allocated to the Shares as a class are expenses
under the Fund's Rule 12b-1 Plan which relate to the Shares. However, the Board
of Trustees reserves the right to allocate certain other expenses to holders of
Shares as it deems appropriate ("Class Expenses"). In any case, Class Expenses
would be limited to: transfer agent fees as identified by the transfer agent as
attributable to holders of Shares; printing and postage expenses related to
preparing and distributing materials such as shareholder reports, prospectuses
and proxies to current shareholders; registration fees paid to the Securities
and Exchange Commission and registration fees paid to state securities
commissions; expenses related to administrative personnel and services as
required to support holders of Shares; legal fees relating solely to Shares; and
Trustees' fees incurred as a result of issues relating solely to Shares.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The Fund 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 total liabilities from total assets, and
dividing the remainder by the total number of Shares outstanding. The Fund, of
course, cannot guarantee that its net asset value will always remain at $1.00
per Share.
INVESTING IN THE FUND
- --------------------------------------------------------------------------------
SHARE PURCHASES
Shares are sold on days on which the New York Stock Exchange is open for
business. Shares may be purchased either by wire or mail.
To purchase Shares, open an account by calling Federated Securities Corp.
Information needed to establish the account will be taken over the telephone.
The Fund reserves the right to reject any purchase request.
BY WIRE. To purchase Shares by Federal Reserve wire, call the Fund before
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 same day. Federal funds should be wired as
follows: State Street Bank and Trust Company, Boston, Massachusetts;
Attention: EDGEWIRE; For Credit to: U.S. Treasury Cash
Reserves--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; ABA Number 011000028.
BY MAIL. To purchase Shares by mail, send a check made payable to U.S.
Treasury Cash Reserves--Institutional Service Shares to the Fund's transfer
agent, Federated Services Company, c/o State Street Bank and Trust Company,
P.O. Box 8602, Boston, Massachusetts 02266-8602. Orders by mail are
considered received after payment by check is converted by the transfer
agent's bank, State Street Bank, into federal funds. This is normally the
next business day after State Street Bank receives the check.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment in Institutional Service Shares is $25,000.
However, an account may be opened with a smaller amount as long as the $25,000
minimum is reached within 90 days. An institutional investor's minimum
investment will be calculated by combining all accounts it maintains with the
Fund. Accounts established through a non-affiliated bank or broker may be
subject to a smaller minimum investment.
CASH SWEEP PROGRAM
Cash accumulations in demand deposit accounts with depository institutions such
as banks and savings and loan associations may be automatically invested in
Shares on a day selected by the depository institution and its customer, or when
the demand deposit account reaches a predetermined dollar amount (e.g., $5,000).
PARTICIPATING DEPOSITORY INSTITUTIONS. Participating depository
institutions are responsible for prompt transmission of orders relating to
the program. These depository institutions are the record owners of the
Shares. Depository institutions participating in this program may charge
their customers for their services relating to the program. This prospectus
should, therefore, be read together with any agreement between the customer
and the depository institution with regard to the services provided, the
fees charged for those services, and any restrictions and limitations
imposed.
WHAT SHARES COST
Shares are sold at their net asset value next determined after an order is
received. There is no sales charge imposed by the Fund. Investors who purchase
Shares through a non-affiliated bank or broker may be charged an additional
service fee by that bank or broker.
The net asset value is determined at 12:00 noon (Eastern time), 1:00 p.m.
(Eastern time), and 4:00 p.m. (Eastern time), Monday through Friday, except on:
(i) days on which there are not sufficient changes in the value of the Fund's
portfolio securities that its net asset value might be materially affected; (ii)
days during which no Shares are tendered for redemption and no orders to
purchase Shares are received; or (iii) the following holidays: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day.
SUBACCOUNTING SERVICES
Institutions are encouraged to open single master accounts. However, certain
institutions may wish to use the transfer agent's subaccounting system to
minimize their internal recordkeeping requirements. The transfer agent charges a
fee based on the level of subaccounting services rendered. Institutions holding
Shares in a fiduciary, agency, custodial, or similar capacity may charge or pass
through subaccounting fees as part of or in addition to normal trust or agency
account fees. They may also charge fees for other services provided which may be
related to the ownership of Shares. This prospectus should, therefore, be read
together with any agreement between the customer and the institution with regard
to the services provided, the fees charged for those services, and any
restrictions and limitations imposed.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Fund, Federated Services Company maintains a Share
account for each shareholder. Share certificates are not issued unless requested
by contacting the Fund.
Monthly confirmations are sent to report transactions such as purchases and
redemptions as well as dividends paid during the month.
DIVIDENDS
Dividends are declared daily and paid monthly. Shares purchased by wire before
1:00 p.m. (Eastern time) begin earning dividends that day. Shares purchased by
check begin earning dividends on the day after the check is converted, upon
instruction by the transfer agent, into federal funds. Dividends are
automatically reinvested on payment dates in additional Shares unless cash
payments are requested by contacting the Fund.
CAPITAL GAINS
Capital gains, if any, could result in an increase in dividends. Capital losses
could result in a decrease in dividends. If, for some extraordinary reason, the
Fund realizes net long-term capital gains, it will distribute them at least once
every 12 months.
REDEEMING SHARES
- --------------------------------------------------------------------------------
The Fund redeems Shares at their net asset value next determined after the Fund
receives the redemption request. Redemptions will be made on days on which the
Fund computes its net asset value. Redemption requests must be received in
proper form and can be made by telephone request or by written request.
TELEPHONE REDEMPTION
Shareholders may redeem their Shares by telephoning the Fund before 12:00 noon
(Eastern time). The proceeds will be wired the same day to the shareholder's
account at a domestic commercial bank that is a member of the Federal Reserve
System. If, at any time, the Fund shall determine it necessary to terminate or
modify this method of redemption, shareholders would be promptly notified.
A daily dividend will be paid on Shares redeemed if the redemption request is
received after 12:00 noon (Eastern time). However, the proceeds are not wired
until the following business day. Redemption requests received before 12:00 noon
(Eastern time) will be paid the same day but will not be entitled to that day's
dividend.
An authorization form permitting the Fund to accept telephone requests must
first be completed. Authorization forms and information on this service are
available from Federated Securities Corp. Telephone redemption instructions may
be recorded.
In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If such a case should occur, another
method of redemption, such as Written Requests, should be considered.
If reasonable procedures are not followed by the Fund, it may be liable for
losses due to unauthorized or fraudulent telephone instructions.
WRITTEN REQUESTS
Shares may also be redeemed by sending a written request to the Fund. Call the
Fund for specific instructions before redeeming by letter. The shareholder will
be asked to provide in the request his name, the Fund name, his account number,
and the share or dollar amount requested. If share certificates have been
issued, they must be properly endorsed and should be sent by registered or
certified mail with the written request.
SIGNATURES. Shareholders requesting a redemption of $50,000 or more, a
redemption of any amount to be sent to an address other than that on record with
the Fund, or a redemption payable other than to the shareholder of record must
have signatures on written redemption requests guaranteed by:
- a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund ("BIF"), which is administered by the Federal Deposit
Insurance Corporation ("FDIC");
- a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchange;
- a savings bank or savings and loan association whose deposits are insured
by the Savings Association Insurance Fund ("SAIF"), which is administered
by the FDIC; or
- any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and its transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Fund may elect in the future to
limit eligible signature guarantees to institutions that are members of a
signature guarantee program. The Fund and its transfer agent reserve the right
to amend these standards at any time without notice.
RECEIVING PAYMENT. Normally, a check for the proceeds is mailed within one
business day, but in no event more than seven days, after receipt of a proper
written redemption request.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Fund may
redeem Shares in any account and pay the proceeds to the shareholder 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.
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS
Each share of the Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of all classes of
each portfolio of the Trust have equal voting rights except that in matters
affecting only a particular portfolio or class, only shares of that portfolio or
class are entitled to vote. As a Massachusetts business trust, the Trust is not
required to hold annual shareholder meetings. Shareholder approval will be
sought only for certain changes in the Trust's or the Fund's operation and for
the election of Trustees under certain circumstances.
Trustees may be removed by the Trustees or by shareholders at a special meeting.
A special meeting of the shareholders shall be called by the Trustees upon the
written request of shareholders owning at least 10% of the outstanding shares of
the Trust.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust on behalf of the
Fund. To protect shareholders of the Fund, the Trust has filed legal documents
with Massachusetts that expressly disclaim the liability of its shareholders of
the Fund for such acts or obligations of the Trust. These documents require
notice of this disclaimer to be given in each agreement, obligation, or
instrument the Trust or its Trustees enter into or sign on behalf of the Fund.
In the unlikely event a shareholder is held personally liable for the Trust's
obligations, the Trust is required to use property of the Fund to protect or
compensate the shareholder. On request, the Trust will defend any claim made and
pay any judgment against a shareholder 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 from its assets.
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects to meet requirements
of the Internal Revenue Code applicable to regulated investment companies and to
receive the special tax treatment afforded to such companies.
The Fund will be treated as a single, separate entity for federal income tax
purposes so that income (including capital gains) and losses realized by the
Trust's other portfolios will not be combined for tax purposes with those
realized by the Fund.
Unless otherwise exempt, shareholders are required to pay federal income tax on
any dividends and other distributions received. This applies whether dividends
are received in cash or as additional Shares.
STATE AND LOCAL TAXES
The Fund intends to limit its investments to U.S. Treasury obligations paying
interest which, if owned directly by shareholders of the Fund, would be exempt
from state personal income tax. However, under the laws of some states, the net
investment income distributed by the Fund may be taxable to shareholders. State
laws differ on this issue, and shareholders are urged to consult their own tax
advisers regarding the status of their accounts under state and local tax laws.
PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES. In the opinion of Houston,
Houston & Donnelly, counsel to the Fund:
- the Fund is not subject to Pennsylvania corporate or personal property
taxes; and
- Shares may be subject to personal property taxes imposed by counties,
municipalities, and school districts in Pennsylvania to the extent that
the portfolio securities in the Fund would be subject to such taxes if
owned directly by residents of those jurisdictions.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time the Fund advertises its yield and effective yield for Shares.
The yield represents the annualized rate of income earned on an investment in
Shares over a seven-day period. It is the annualized dividends earned during the
period on the 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 in Shares is assumed to be reinvested daily. The
effective yield will be slightly higher than the yield because of the
compounding effect of this assumed reinvestment.
Advertisements and other sales literature may also refer to total return. Total
return represents the change, over a specified period of time, in the value of
an investment in Shares after reinvesting all income distributions. It is
calculated by dividing that change by the initial investment and is expressed as
a percentage.
Performance figures will be calculated separately for each class of shares.
Because each class of shares is subject to different expenses, the performance
of Institutional Shares will exceed the yield and effective yield of
Institutional Service Shares for the same period.
From time to time, the Fund may advertise its performance using certain
financial publications and/or compare its performance to certain indices.
OTHER CLASSES OF SHARES
- --------------------------------------------------------------------------------
Institutional Shares are sold at net asset value to accounts for which financial
institutions act in an agency or fiduciary capacity. Investments in
Institutional Shares are subject to a minimum initial investment of $25,000 over
a 90-day period. Institutional Shares are not sold pursuant to a 12b-1 Plan.
Financial institutions providing distribution or administrative services may
receive different compensation depending upon which class of shares of the Fund
is sold. The distributor may pay a financial institution for administrative
services related to the Institutional Shares class and may make such payments
with respect to the Institutional Service Shares class, in addition to fees paid
by the Institutional Service Shares pursuant to the 12b-1 Plan. The amount of
dividends payable to shareholders of Institutional Shares will exceed that
payable to the shareholders of Institutional Service Shares by the difference
between Class Expenses and 12b-1 Plan expenses borne by Institutional Service
Shares. The stated advisory fee is the same for both classes of shares.
U.S. TREASURY CASH RESERVES
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Report of Ernst & Young, Independent Auditors, on page
20.
Institutional Service Shares were not being offered as of April 30, 1994.
Accordingly, there are no Financial Highlights for such shares. The Financial
Highlights presented below are historical information for Institutional Shares.
<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
-------------------------------------
1994 1993 1992**
- ---------------------------------------------------- -------- -------- -------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00
- ----------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------
Net investment income 0.03 0.03 0.04
- ---------------------------------------------------- ----- ----- -----
LESS DISTRIBUTIONS
- ----------------------------------------------------
Dividends to shareholders from
net investment income (0.03) (0.03) (0.04)
- ---------------------------------------------------- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00
- ---------------------------------------------------- ----- ----- -----
TOTAL RETURN* 2.95% 3.13% 4.24%
- ----------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------
Expenses 0.20% 0.20% 0.16%(a)
- ----------------------------------------------------
Net investment income 2.93% 3.03% 4.42%(a)
- ----------------------------------------------------
Expense waiver/reimbursement(b) 0.43% 0.50% 0.62%(a)
- ----------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------
Net assets, end of period (000 omitted) $265,030 $177,471 $83,244
- ----------------------------------------------------
</TABLE>
* Based on net asset value which does not reflect the sales load or contingent
deferred sales charge, if applicable.
** Reflects operations for the period from June 11, 1991 (date of initial public
investment) to April 30, 1992.
(a) Computed on an annualized basis.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(See Notes which are an integral part of the Financial Statements)
U.S. TREASURY CASH RESERVES
PORTFOLIO OF INVESTMENTS
APRIL 30, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ------------
<C> <S> <C>
U.S. TREASURY OBLIGATIONS--89.9%
- ---------------------------------------------------------------------------------
* U.S. TREASURY BILLS--71.0%
------------------------------------------------------------------
$31,000,000 3.14% - 3.32%, 5/5/94 $ 30,989,023
------------------------------------------------------------------
9,750,000 3.25%, 5/12/94 9,740,318
------------------------------------------------------------------
6,450,000 3.36%, 5/26/94 6,434,972
------------------------------------------------------------------
14,900,000 3.47% - 3.59%, 6/2/94 14,853,777
------------------------------------------------------------------
14,400,000 3.41% - 3.49%, 6/9/94 14,346,358
------------------------------------------------------------------
17,200,000 3.65%, 6/16/94 17,119,781
------------------------------------------------------------------
24,650,000 3.44% - 3.50%, 6/23/94 24,524,912
------------------------------------------------------------------
10,000,000 3.64%, 6/30/94 9,939,417
------------------------------------------------------------------
35,400,000 3.53% - 3.55%, 7/7/94 35,167,705
------------------------------------------------------------------
19,050,000 3.55% - 3.79%, 7/14/94 18,908,997
------------------------------------------------------------------
6,250,000 3.74%, 7/21/94 6,197,476
------------------------------------------------------------------ ------------
Total 188,222,736
------------------------------------------------------------------ ------------
U.S. TREASURY NOTES -- 18.9%
------------------------------------------------------------------
20,000,000 9.50%, 5/15/94 20,043,750
------------------------------------------------------------------
30,000,000 5.125%, 5/31/94 30,032,227
------------------------------------------------------------------ ------------
Total 50,075,977
------------------------------------------------------------------ ------------
TOTAL INVESTMENTS, AT AMORTIZED COST $238,298,713+
------------------------------------------------------------------ ------------
</TABLE>
* Each issue shows the rate of discount at the time of purchase.
+ Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($265,030,040) at April 30, 1994.
(See Notes which are an integral part of the Financial Statements)
U.S. TREASURY CASH RESERVES
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Investments, at amortized cost and value (Note 2A) $238,298,713
- --------------------------------------------------------------------------------
Cash 23,262
- --------------------------------------------------------------------------------
Receivable for investments sold 40,250,000
- --------------------------------------------------------------------------------
Interest receivable 2,599,618
- --------------------------------------------------------------------------------
Deferred expenses (Note 2E) 19,444
- -------------------------------------------------------------------------------- ------------
Total assets 281,191,037
- --------------------------------------------------------------------------------
LIABILITIES:
- ------------------------------------------------------------------
Payable for investments purchased $15,338,949
- ------------------------------------------------------------------
Dividends payable 709,985
- ------------------------------------------------------------------
Payable to administrator (Note 4) 4,910
- ------------------------------------------------------------------
Payable to transfer and dividend disbursing agent (Note 4) 5,262
- ------------------------------------------------------------------
Payable for Fund shares redeemed 56
- ------------------------------------------------------------------
Accrued expenses and other liabilities 101,835
- ------------------------------------------------------------------ -----------
Total liabilities 16,160,997
- -------------------------------------------------------------------------------- ------------
NET ASSETS FOR 265,030,040 shares of beneficial interest outstanding $265,030,040
- -------------------------------------------------------------------------------- ------------
NET ASSET VALUE, Offering Price and Redemption Price Per Share
($265,030,040 / 265,030,040 shares of beneficial interest outstanding) $1.00
- -------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
U.S. TREASURY CASH RESERVES
STATEMENT OF OPERATIONS
YEAR ENDED APRIL 30, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ------------------------------------------------------------------------------------
Interest income (Note 2B) $7,665,260
- ------------------------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------
Investment advisory fee (Note 4) $ 981,067
- ----------------------------------------------------------------------
Trustees' fees 5,113
- ----------------------------------------------------------------------
Administrative personnel and service fee (Note 4) 295,386
- ----------------------------------------------------------------------
Custodian and record keeping fees and expenses 108,127
- ----------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses (Note 4) 21,498
- ----------------------------------------------------------------------
Fund share registration costs 66,035
- ----------------------------------------------------------------------
Legal fees 8,879
- ----------------------------------------------------------------------
Auditing fees 14,933
- ----------------------------------------------------------------------
Printing and postage 6,788
- ----------------------------------------------------------------------
Insurance premiums 8,587
- ----------------------------------------------------------------------
Taxes 35
- ----------------------------------------------------------------------
Shareholder services fee (Note 4) 23,515
- ----------------------------------------------------------------------
Miscellaneous 14,158
- ---------------------------------------------------------------------- ----------
Total expenses 1,554,121
- ----------------------------------------------------------------------
Deduct--
- ----------------------------------------------------------------------
Waiver of investment advisory fee (Note 4) $981,067
- -----------------------------------------------------------
Reimbursement of other operating expenses (Note 4) 82,521 1,063,588
- ----------------------------------------------------------- -------- ----------
Net expenses 490,533
- ------------------------------------------------------------------------------------ ----------
Net investment income $7,174,727
- ------------------------------------------------------------------------------------ ----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
U.S. TREASURY CASH RESERVES
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
------------------------------
1994 1993
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ---------------------------------------------------------------
OPERATIONS--
- ---------------------------------------------------------------
Net investment income $ 7,174,727 $ 4,087,405
- --------------------------------------------------------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2B)--
- ---------------------------------------------------------------
Dividends to shareholders from net investment income (7,174,727) (4,087,405)
- --------------------------------------------------------------- ------------- -------------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)--
- ---------------------------------------------------------------
Proceeds from sale of shares 885,678,265 415,811,738
- ---------------------------------------------------------------
Net asset value of shares issued to shareholders in
payment of dividends declared 163,079 87,318
- ---------------------------------------------------------------
Cost of shares redeemed (798,282,485) (321,671,827)
- --------------------------------------------------------------- ------------- -------------
Change in net assets from Fund share transactions 87,558,859 94,227,229
- --------------------------------------------------------------- ------------- -------------
Change in net assets 87,558,859 94,227,229
- ---------------------------------------------------------------
NET ASSETS:
- ---------------------------------------------------------------
Beginning of period 177,471,181 83,243,952
- --------------------------------------------------------------- ------------- -------------
End of period $ 265,030,040 $ 177,471,181
- --------------------------------------------------------------- ------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
U.S. TREASURY CASH RESERVES
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1994
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Federated Government Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended, as an open-end, management investment company.
The Trust consists of three, diversified portfolios. The financial statements
included herein present only those of U.S. Treasury Cash Reserves (the "Fund").
The financial statements of the other portfolios are presented separately. The
assets of each portfolio are segregated and a shareholder's interest is limited
to the portfolio in which shares are held.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles (GAAP).
<TABLE>
<S> <C>
A. 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 Investment Company Act of 1940.
B. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses are accrued
daily. Bond premium and discount are amortized as required by the Internal Revenue Code,
as amended (the "Code"). Distributions to shareholders are recorded on the ex-dividend
date.
C. FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the Code,
applicable to regulated investment companies and to distribute to shareholders each year
all of its taxable income. Accordingly, no provision for federal tax is necessary.
D. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in when-issued or
delayed delivery transactions. The Fund records when-issued securities and maintains
security positions such that sufficient liquid assets will be available to make payment
for the securities purchased. Securities purchased on a when-issued or delayed delivery
basis are marked to market daily and begin earning interest on the settlement date.
E. DEFERRED EXPENSES--The costs incurred by the Fund with respect to registration of its
shares in its first fiscal year, excluding the initial expense of registering the shares,
have been deferred and are being amortized using the straight-line method over a period
of five years from the Fund's commencement date.
F. OTHER--Investment transactions are accounted for on the trade date.
</TABLE>
U.S. TREASURY CASH RESERVES
- --------------------------------------------------------------------------------
(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). At April
30, 1994, capital paid in aggregated $265,030,040. Transactions in Fund shares
were as follows:
<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
----------------------------
1994 1993
- ----------------------------------------------------------------- ------------ ------------
<S> <C> <C>
Shares sold 885,678,265 415,811,738
- -----------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 163,079 87,318
- -----------------------------------------------------------------
Shares redeemed (798,282,485) (321,671,827)
- ----------------------------------------------------------------- ------------ ------------
Net change resulting from Fund share transactions 87,558,859 94,227,229
- ----------------------------------------------------------------- ------------ ------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser
("Adviser"), receives for its services an annual investment advisory fee equal
to 0.40 of 1% of the Fund's average daily net assets. Adviser may voluntarily
choose to waive a portion of its fee and reimburse certain operating expenses of
the Fund. Adviser can modify or terminate this voluntary waiver and
reimbursement at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services and Federated
Administrative Services, Inc. collectively provided the Fund administrative and
personnel services. Prior to March 1, 1994, these services were provided at
approximate cost. Effective March 1, 1994, the fee is based on the level of
average aggregate daily net assets of all funds advised by subsidiaries of
Federated Investors for the period. The administrative fee received during any
fiscal year 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 .25 of
1% of average net assets of the Fund for the period. This fee is to obtain
certain personal services for shareholders and the maintenance of shareholder
accounts.
TRANSFER AND DIVIDEND DISBURSING AGENT FEE--Federated Services Company ("FServ")
serves as transfer and dividend disbursing agent for the Fund. The fee is based
on the size, type and number of accounts and transactions made by shareholders.
Certain of the Officers and Trustees of the Trust are Officers and Directors of
the above companies.
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
To the Trustees and Shareholders of
U.S. TREASURY CASH RESERVES:
We have audited the accompanying statement of assets and liabilities of U.S.
Treasury Cash Reserves (a portfolio of Federated Government Trust), including
the portfolio of investments, as of April 30, 1994, and the related statement of
operations for the year then ended and the statement of changes in net assets
for each of the two years in the period then ended, and the financial highlights
(see page 2 of the Prospectus) for each of the three years in the period then
ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of April
30, 1994, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of U.S.
Treasury Cash Reserves at April 30, 1994, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended, and the financial highlights for each of the three years in
the period then ended, in conformity with generally accepted accounting
principles.
ERNST & YOUNG
Pittsburgh, Pennsylvania
June 9, 1994
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
U.S. Treasury Cash Reserves
Institutional Service Shares Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Investment Adviser
Federated Management Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Custodian
State Street Bank and P.O. Box 8602
Trust Company Boston, Massachusetts 02266-8602
- ------------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company P.O. Box 8602
Boston, Massachusetts 02266-8602
- ------------------------------------------------------------------------------------------------
Legal Counsel
Houston, Houston & Donnelly 2510 Centre City Tower
Pittsburgh, Pennsylvania 15222
- ------------------------------------------------------------------------------------------------
Legal Counsel
Dickstein, Shapiro & Morin, L.L.P. 2101 L Street, N.W.
Washington, D.C. 20037
- ------------------------------------------------------------------------------------------------
Independent Auditors
Ernst & Young One Oxford Centre
Pittsburgh, Pennsylvania 15219
- ------------------------------------------------------------------------------------------------
</TABLE>
U.S. TREASURY
CASH RESERVES
INSTITUTIONAL SERVICE SHARES
PROSPECTUS
A Diversified Portfolio of Federated
Government Trust, An Open-End,
Management Investment Company
October , 1994
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
1022103A (10/94)
U.S. TREASURY CASH RESERVES
(A PORTFOLIO OF FEDERATED GOVERNMENT TRUST)
INSTITUTIONAL SHARES
INSTITUTIONAL SERVICE SHARES
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information should be read with the prospectus(es)
for U.S. Treasury Cash Reserves (the "Fund") dated June 30, 1994 and October ,
1994. This Statement is not a prospectus itself. To receive a copy of the
prospectus, write or call the Fund.
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
Statement dated October , 1994
FEDERATED SECURITIES CORP.
(LOGO)
- --------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
GENERAL INFORMATION ABOUT THE FUND 1
- ---------------------------------------------------------------
INVESTMENT OBJECTIVE AND POLICIES 1
- ---------------------------------------------------------------
Types of Investments 1
When-Issued and
Delayed Delivery Transactions 1
Investment Limitations 1
FEDERATED GOVERNMENT TRUST MANAGEMENT 2
- ---------------------------------------------------------------
The Funds 4
Trust Ownership 5
Trustee Liability 5
INVESTMENT ADVISORY SERVICES 5
- ---------------------------------------------------------------
Adviser to the Fund 5
Advisory Fees 5
Other Advisory Services 6
ADMINISTRATIVE SERVICES 6
- ---------------------------------------------------------------
SHAREHOLDER SERVICES PLAN 6
- ---------------------------------------------------------------
DISTRIBUTION PLAN 6
- ---------------------------------------------------------------
BROKERAGE TRANSACTIONS 6
- ---------------------------------------------------------------
PURCHASING SHARES 7
- ---------------------------------------------------------------
Conversion to Federal Funds 7
DETERMINING NET ASSET VALUE 7
- ---------------------------------------------------------------
Use of the Amortized Cost Method 7
REDEEMING SHARES 8
- ---------------------------------------------------------------
Redemption in Kind 8
TAX STATUS 8
- ---------------------------------------------------------------
The Fund's Tax Status 8
Shareholders' Tax Status 8
YIELD 8
- ---------------------------------------------------------------
EFFECTIVE YIELD 9
- ---------------------------------------------------------------
PERFORMANCE COMPARISONS 9
- ---------------------------------------------------------------
GENERAL INFORMATION ABOUT THE FUND
- --------------------------------------------------------------------------------
The Fund is a portfolio in Federated Government Trust (the "Trust"), which was
established as a Massachusetts business trust under a Declaration of Trust dated
December 7, 1989.
INVESTMENT OBJECTIVE AND POLICIES
- --------------------------------------------------------------------------------
The Fund's investment objective is to provide current income consistent with
stability of principal and liquidity. The investment objective cannot be changed
without approval of shareholders.
TYPES OF INVESTMENTS
The Fund invests only in short-term U.S. Treasury obligations.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
These transactions are made to secure what is considered to be an advantageous
price and yield for the Fund. Settlement dates may be a month or more after
entering into these transactions, and the market values of the securities
purchased may vary from the purchase prices.
No fees or other expenses, other than normal transaction costs, are incurred.
However, liquid assets of the Fund sufficient to make payment for the securities
to be purchased are segregated at the trade date. These securities are marked to
market daily and are maintained until the transaction is settled. The Fund may
engage in these transactions to an extent that would cause the segregation of an
amount up to 20% of the total value of its assets.
INVESTMENT LIMITATIONS
SELLING SHORT AND BUYING ON MARGIN
The Fund will not sell any securities short or purchase any securities on
margin but may obtain such short-term credits as may be necessary for
clearance of transactions.
ISSUING SENIOR SECURITIES AND BORROWING MONEY
The Fund will not issue senior securities except that the Fund may borrow
money in amounts up to one-third of the value of its total assets,
including the amounts borrowed.
The Fund will not borrow money except 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 to
secure permitted borrowings. In those cases, it may pledge assets having
a market value not exceeding the lesser of the dollar amounts borrowed or
10% of the value of total assets at the time of the pledge.
LENDING CASH OR SECURITIES
The Fund will not lend any of its assets, except that it may purchase or
hold U.S. Treasury obligations, permitted by its investment objective,
policies and limitations or its Declaration of Trust.
INVESTING IN REAL ESTATE
The Fund will not purchase or sell real estate including limited
partnership interests, although it may invest in the securities of
companies whose business involves the purchase or sale of real estate or
in securities which are secured by real estate or which represent
interests in real estate.
The above investment limitations cannot be changed without shareholder approval.
The following limitations, however, may be changed by the Trustees without
shareholder approval. Shareholders will be notified before any material change
in those limitations becomes effective.
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
The Fund will not purchase securities of other investment companies
except as part of a merger, consolidation, or other acquisition.
INVESTING IN ILLIQUID SECURITIES
The Fund will not invest more than 10% of the value of its net assets in
illiquid securities.
INVESTING IN WARRANTS
The Fund will not invest in warrants.
INVESTING IN MINERALS
The Fund will not purchase or sell oil, gas, or other mineral exploration
or development programs, or leases.
- --------------------------------------------------------------------------------
Except with respect to borrowing money, if a percentage limitation is adhered to
at the time of investment, a later increase or decrease in percentage resulting
from any change in value or net assets will not result in a violation of such
restriction.
FEDERATED GOVERNMENT TRUST MANAGEMENT
- --------------------------------------------------------------------------------
Officers and Trustees are listed with their addresses, present positions with
Federated Government Trust, and principal occupations.
- --------------------------------------------------------------------------------
John F. Donahue*+
Federated Investors Tower
Pittsburgh, PA
Chairman and Trustee
Chairman and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; Chairman and Director, Federated Research
Corp.; Chairman, Passport Research, Ltd.; Director, AEtna Life and Casualty
Company; Chief Executive Officer and Director, Trustee, or Managing General
Partner of the Funds. Mr. Donahue is the father of J. Christopher Donahue, Vice
President and Trustee of the Trust.
- --------------------------------------------------------------------------------
John T. Conroy, Jr.
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL
Trustee
President, Investment Properties Corporation; Senior Vice-President, John R.
Wood and Associates, Inc., Realtors; President, Northgate Village Development
Corporation; Partner or Trustee in private real estate ventures in
Southwest Florida; Director, Trustee, or Managing General Partner of the Funds;
formerly, President, Naples Property Management, Inc.
- --------------------------------------------------------------------------------
William J. Copeland
One PNC Plaza - 23rd Floor
Pittsburgh, PA
Trustee
Director and Member of the Executive Committee, Michael Baker, Inc.; Director,
Trustee, or Managing General Partner of the Funds; formerly, Vice Chairman and
Director, PNC Bank, N.A. and PNC Bank Corp. and Director, Ryan Homes, Inc.
- --------------------------------------------------------------------------------
James E. Dowd
571 Hayward Mill Road
Concord, MA
Trustee
Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director, Trustee,
or Managing General Partner of the Funds; formerly, Director, Blue Cross of
Massachusetts, Inc.
- --------------------------------------------------------------------------------
Lawrence D. Ellis, M.D.
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA
Trustee
Hematologist, Oncologist, and Internist, Presbyterian and Montefiore Hospitals;
Professor of Medicine and Trustee, University of Pittsburgh; Director of
Corporate Health, University of Pittsburgh Medical Center; Director, Trustee, or
Managing General Partner of the Funds.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Edward L. Flaherty, Jr.+
5916 Penn Mall
Pittsburgh, PA
Trustee
Attorney-at-law; Partner, Meyer and Flaherty; Director, Eat'N Park Restaurants,
Inc., and Statewide Settlement Agency, Inc.; Director, Trustee, or Managing
General Partner of the Funds; formerly, Counsel, Horizon Financial, F.A.,
Western Region.
- --------------------------------------------------------------------------------
Glen R. Johnson*
Federated Investors Tower
Pittsburgh, PA
President and Trustee
Trustee, Federated Investors; President and/or Trustee of some of the Funds;
staff member, Federated Securities Corp. and Federated Administrative Services.
- --------------------------------------------------------------------------------
Peter E. Madden
225 Franklin Street
Boston, MA
Trustee
Consultant; State Representative, Commonwealth of Massachusetts; Director,
Trustee, or Managing General Partner of the Funds; formerly, President, State
Street Bank and Trust Company and State Street Boston Corporation and Trustee,
Lahey Clinic Foundation, Inc.
- --------------------------------------------------------------------------------
Gregor F. Meyer
5916 Penn Mall
Pittsburgh, PA
Trustee
Attorney-at-law; Partner, Meyer and Flaherty; Chairman, Meritcare, Inc.;
Director, Eat'N Park Restaurants, Inc.; Director, Trustee, or Managing General
Partner of the Funds; formerly, Vice Chairman, Horizon Financial, F.A.
- --------------------------------------------------------------------------------
Wesley W. Posvar
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA
Trustee
Professor, Foreign Policy and Management Consultant; Trustee, Carnegie Endowment
for International Peace, RAND Corporation, Online Computer Library Center, Inc.,
and U.S. Space Foundation; Chairman, Czecho Slovak Management Center; Director,
Trustee, or Managing General Partner of the Funds; President Emeritus,
University of Pittsburgh; formerly, Chairman, National Advisory Council for
Environmental Policy and Technology.
- --------------------------------------------------------------------------------
Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA
Trustee
Public relations/marketing consultant; Director, Trustee, or Managing General
Partner of the Funds.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
J. Christopher Donahue
Federated Investors Tower
Pittsburgh, PA
Vice President
President and Trustee, Federated Investors; Federated Advisers, Federated
Management, and Federated Research; President and Director, Federated Research
Corp.; President, Passport Research, Ltd.; Trustee, Federated Administrative
Services, Federated Services Company, and Federated Shareholder Services;
President or Vice President of the Funds; Director, Trustee, or Managing General
Partner of some of the Funds. Mr. Donahue is the son of John F. Donahue,
Chairman and Trustee of the Trust.
- --------------------------------------------------------------------------------
Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Vice President
Executive Vice President and Trustee, Federated Investors; Chairman and
Director, Federated Securities Corp.; President or Vice President of the Funds;
Director or Trustee of some of the Funds.
- --------------------------------------------------------------------------------
Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
Vice President and Treasurer
Vice President, Treasurer, and Trustee, Federated Investors; Vice President and
Treasurer, Federated Advisers, Federated Management, Federated Research,
Federated Research Corp., and Passport Research, Ltd.; Executive Vice President,
Treasurer, and Director, Federated Securities Corp.; Trustee, Federated Services
Company and Federated Shareholder Services; Chairman, Treasurer, and Trustee,
Federated Administrative Services; Trustee or Director of some of the Funds;
Vice President and Treasurer of the Funds.
- --------------------------------------------------------------------------------
John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Vice President and Secretary
Vice President, Secretary, General Counsel, and Trustee, Federated Investors;
Vice President, Secretary, and Trustee, Federated Advisers, Federated
Management, and Federated Research; Vice President and Secretary, Federated
Research Corp. and Passport Research, Ltd.; Trustee, Federated Services Company;
Executive Vice President, Secretary, and Trustee, Federated Administrative
Services; Secretary and Trustee, Federated Shareholder Services; Executive Vice
President and Director, Federated Securities Corp.; Vice President and Secretary
of the Funds.
- --------------------------------------------------------------------------------
* This Trustee is deemed to be an "interested person" as defined in the
Investment Company Act of 1940, as amended.
+ Member of the Executive Committee. The Executive Committee of the Board of
Trustees handles the responsibilities of the Board of Trustees between
meetings of the Board.
THE FUNDS
"The Funds" and "Funds" mean the following investment companies: American
Leaders Fund, Inc.; Annuity Management Series; Automated Cash Management Trust;
Automated Government Money Trust; California Municipal Cash Trust; Cash Trust
Series II; Cash Trust Series, Inc.; DG Investor Series; Edward D. Jones & Co.
Daily Passport Cash Trust; Federated ARMs Fund; Federated Exchange Fund, Ltd.;
Federated GNMA Trust; Federated Government Trust; Federated Growth Trust;
Federated High Yield Trust; Federated Income Securities Trust; Federated Income
Trust; Federated Index Trust; Federated Intermediate Government Trust; Federated
Master Trust; Federated Municipal Trust; Federated Short-Intermediate Government
Trust; Federated Short-Term U.S. Government Trust; Federated Stock Trust;
Federated Tax-Free Trust; Federated U.S. Government Bond Fund; First Priority
Funds; Fixed Income Securities, Inc.; Fortress Adjustable Rate U.S. Government
Fund, Inc.; Fortress Municipal Income Fund, Inc.; Fortress Utility Fund, Inc.;
Fund for U.S. Government Securities, Inc.; Government Income Securities, Inc.;
High Yield Cash Trust; Insight Institutional Series, Inc.; Insurance Management
Series; Intermediate Municipal Trust; International Series, Inc.; Investment
Series Funds, Inc.; Investment Series Trust; Liberty Equity Income Fund, Inc.;
Liberty High Income Bond Fund, Inc.; Liberty Municipal Securities Fund, Inc.;
Liberty U.S. Government Money Market Trust; Liberty Term Trust,
- --------------------------------------------------------------------------------
Inc.-1999; Liberty Utility Fund, Inc.; Liquid Cash Trust; Managed Series Trust;
Mark Twain Funds; The Medalist Funds; Money Market Management, Inc.; Money
Market Obligations Trust; Money Market Trust; Municipal Securities Income Trust;
New York Municipal Cash Trust; 111 Corcoran Funds; Peachtree Funds; The Planters
Funds; Portage Funds; RIMCO Monument Funds; The Shawmut Funds; Short-Term
Municipal Trust; Star Funds; The Starburst Funds; The Starburst Funds II; Stock
and Bond Fund, Inc.; Sunburst Funds; Targeted Duration Trust; Tax-Free
Instruments Trust; Trademark Funds; Trust for Financial Institutions; Trust For
Government Cash Reserves; Trust for Short-Term U.S. Government Securities; Trust
for U.S. Treasury Obligations; World Investment Series, Inc.
TRUST OWNERSHIP
Officers and Trustees own less than 1% of the Fund's outstanding shares.
As of August 17, 1994, the following shareholders of record owned 5% or more of
the outstanding shares of Institutional Shares of Fund: First Security Bank of
Utah, NA of Salt Lake City, Utah owned approximately 34,113,669 shares (10.7%);
Old Stone Trust Company of Providence, Rhode Island owned approximately
16,849,236 shares (5.3%); National City Bank Minneapolis of Minneapolis,
Minnesota owned approximately 20,897,189 shares (6.5%); and Trans Financial Bank
of Bowling Green, Kentucky owned approximately 48,871,986 shares (15.4%).
As of August 17, 1994, there were no shareholders of record who owned 5% or more
of the outstanding Institutional Service Shares of the Fund.
TRUSTEE LIABILITY
The Trust's Declaration of Trust provides that the Trustees will not be liable
for errors of judgment or mistakes of fact or law. However, they are not
protected against any liability to which they would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of their office.
INVESTMENT ADVISORY SERVICES
- --------------------------------------------------------------------------------
ADVISER TO THE FUND
The Fund's investment adviser is Federated Management (the "Adviser"). It is a
subsidiary of Federated Investors. All of the 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, the Adviser receives an annual investment advisory
fee as described in the prospectus. During the fiscal years ended April 30,
1994, 1993, and the period from June 11, 1991 (date of initial public
investment) to April 30, 1992, the Adviser earned $981,067, $538,993, and
$166,536, respectively, for services provided on behalf of Institutional Shares,
all of which was voluntarily waived because of undertakings to limit the Fund's
expenses. In addition, the Fund's Adviser reimbursed $82,521, $138,240, and
$90,200, respectively, of other operating expenses incurred on behalf of
Institutional Shares.
STATE EXPENSE LIMITATION
The Adviser has undertaken to comply with the expense limitations
established by certain states for investment companies whose shares are
registered for sale in those states. If the Fund's normal operating
expenses (including the investment advisory fee, but not including
brokerage commissions, interest, taxes,
and extraordinary expenses) exceed 2 1/2% per year of the first $30
million of average net assets, 2% per year
of the next $70 million of average net assets, and 1 1/2% per year of the
remaining average net assets, the
Adviser will reimburse the Fund for its expenses over the limitation.
If the Fund's monthly projected operating expenses exceed this
limitation, the investment advisory fee paid will be reduced by the
amount of the excess, subject to an annual adjustment. If the expense
limitation is exceeded, the amount to be reimbursed by the Adviser will
be limited, in any single fiscal year, by the amount of the investment
advisory fee.
This arrangement is not part of the advisory contract and may be amended
or rescinded in the future.
OTHER ADVISORY SERVICES
Federated Research Corp., a subsidiary of Federated Investors, receives fees
from certain depository institutions for providing consulting and portfolio
advisory services relating to each institution's program of asset management.
Federated Research Corp. may advise such clients to purchase or redeem shares of
investment companies which are
- --------------------------------------------------------------------------------
managed, for a fee, by Federated Research Corp. or other affiliates of Federated
Investors, such as the Adviser, and may advise such clients to purchase and sell
securities in the direct markets.
ADMINISTRATIVE SERVICES
- --------------------------------------------------------------------------------
Federated Administrative Services, a subsidiary of Federated Investors, provides
administrative personnel and services to the Fund for a fee as described in the
prospectus. Prior to March 1, 1994, Federated Administrative Services, Inc.,
also a subsidiary of Federated Investors, served as the Fund's administrator.
(For purposes of this Statement of Additional Information, Federated
Administrative Services and Federated Administrative Services, Inc., may
hereinafter collectively be referred to as the "Administrators.") For the fiscal
years ended April 30, 1994, 1993, and the period from June 11, 1991 (date of
initial public investment) to April 30, 1992, the Administrators collectively
earned $295,386, $228,288 and $105,653, respectively. Dr. Henry J. Gailliot, an
officer of the Adviser, holds approximately 20% of the outstanding common stock
and serves as director of Commercial Data Services, Inc., a company which
provides computer processing services to the Administrators.
SHAREHOLDER SERVICES PLAN
- --------------------------------------------------------------------------------
This arrangement permits the payment of fees to Federated Shareholder Services
and, indirectly, to financial institutions to cause services to be provided to
shareholders by a representative who has knowledge of the shareholder's
particular circumstances and goals. These activities and services may include,
but are not limited to, providing office space, equipment, telephone facilities,
and various clerical, supervisory, computer, and other personnel as necessary or
beneficial to establish and maintain shareholder accounts and records;
processing purchase and redemption transactions and automatic investments of
client account cash balances; answering routine client inquiries; and assisting
clients in changing dividend options, account designations, and addresses. For
the fiscal period ended April 30, 1994, payments in the amount of $23,515 were
made pursuant to the Shareholder Services Plan on behalf of Institutional
Shares.
DISTRIBUTION PLAN
- --------------------------------------------------------------------------------
With respect to Institutional Service Shares, the Fund has adopted a Plan
pursuant to Rule 12b-1 which was promulgated by the Securities and Exchange
Commission pursuant to the Investment Company Act of 1940. The Plan permits the
payment of fees to brokers for distribution and administrative services and to
administrators for administrative services. The Plan is designed to (i)
stimulate brokers to provide distribution and administrative support services to
shareholders and (ii) stimulate administrators to render administrative support
services to shareholders. The administrative services are provided by a
representative who has knowledge of the shareholder's particular circumstances
and goals. By adopting the Plan, the Board of Trustees expects that the Fund
will be able to achieve a more predictable flow of cash for investment purposes
and to meet redemptions. This will facilitate more efficient portfolio
management and assist the Fund in seeking to achieve its investment objectives.
By identifying potential investors whose needs are served by the Fund's
objectives, and properly servicing these accounts, it may be possible to curb
sharp fluctuations in rates of redemptions and sales. Other benefits may
include: (1) an efficient and effective administrative system; (2) a more
efficient use of shareholder assets by having them rapidly invested with a
minimum of delay and administrative detail; and (3) an efficient and reliable
shareholder records system and prompt responses to shareholder requests and
inquiries concerning their accounts.
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
review by the Board of Trustees.
The Adviser may select brokers and dealers who offer brokerage and research
services. These services may be furnished directly to the Fund or to the Adviser
and may include:
- - advice as to the advisability of investing in securities;
- - security analysis and reports;
- - economic studies;
- - industry studies;
- - receipt of quotations for portfolio evaluations; and
- --------------------------------------------------------------------------------
- - similar services.
The Adviser and its affiliates exercise reasonable business judgment in
selecting brokers who offer brokerage and research services to execute
securities transactions. They determine in good faith that commissions charged
by such persons are reasonable in relationship to the value of the brokerage and
research services provided.
Research services provided by brokers may be used by the Adviser or by
affiliates of Federated Investors in advising The Funds and other accounts. To
the extent that receipt of these services may supplant services for which the
Adviser or its affiliates might otherwise have paid, it would tend to reduce
their expenses.
PURCHASING SHARES
- --------------------------------------------------------------------------------
Shares are sold at their net asset value without a sales charge on days the New
York Stock Exchange and the Federal Reserve Wire System are open for business.
The procedure for purchasing shares of the Fund is explained in the prospectus
under "Investing in the Fund."
CONVERSION TO FEDERAL FUNDS
It is the Fund's policy to be as fully invested as possible so that maximum
interest may be earned. To this end, all payments from shareholders must be in
federal funds or be converted into federal funds. State Street Bank acts as the
shareholder's agent in depositing checks and converting them to federal funds.
DETERMINING NET ASSET VALUE
- --------------------------------------------------------------------------------
The Fund attempts to stabilize the value of a share at $1.00. The days on which
net asset value is calculated by the Fund are described in the prospectus.
USE OF THE AMORTIZED COST METHOD
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.
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, as amended. 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.
Under the Rule, a fund is permitted to purchase instruments which are subject to
demand features or standby commitments. As defined by the Rule, a demand feature
entitles a fund to receive the principal amount of the instrument from the
issuer or a third party on (1) no more than 30 days' notice or (2) at specified
intervals not exceeding one year on no more than 30 days' notice. A standby
commitment entitles a fund to achieve same day settlement and to receive an
exercise price equal to the amortized cost of the underlying instrument plus
accrued interest at the time of exercise.
MONITORING PROCEDURES
The Trustees' 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
.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.
INVESTMENT RESTRICTIONS
The Rule requires that a fund limit its investments to instruments that,
in the opinion of the Trustees, present minimal credit risk and have
received the requisite ratings from one or more nationally recognized
statistical rating organizations. If the instruments are not rated, the
Trustees must determine that they are of comparable quality. The Rule
also requires a fund to maintain a dollar weighted average portfolio
maturity (not more than 90 days) appropriate to the objective of
maintaining a stable net asset value of $1.00 per share. In addition, no
instrument with a remaining maturity of more than thirteen months can be
purchased by a fund.
Should the disposition of a portfolio security result in a dollar
weighted average portfolio maturity of more than 90 days, the Fund will
invest its available cash to reduce the average maturity to 90 days or
less as soon as possible.
- --------------------------------------------------------------------------------
The Fund may attempt to increase yield by trading portfolio securities to take
advantage of short-term market variations. This policy may, from time to time,
result in high portfolio turnover. Under the amortized cost method of valuation,
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 both
classes of shares of the Fund computed by dividing the annualized daily income
on the Fund's portfolio for each class by the net asset value for each class
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 indicated daily yield on either class
of shares of the Fund computed the same way may tend to be lower than similar
computations made by using a method of calculation based upon market prices and
estimates.
REDEEMING SHARES
- --------------------------------------------------------------------------------
The Fund redeems shares at the next computed net asset value after the Fund
receives the redemption request. Redemption procedures are explained in the
prospectus under "Redeeming Shares." Although State Street Bank does not charge
for telephone redemptions it reserves the right to charge a fee for the cost of
wire-transferred redemptions of less than $5,000.
REDEMPTION IN KIND
Although the Trust intends to redeem shares in cash, it reserves the right under
certain circumstances to pay the redemption price in whole or in part by a
distribution of securities from the Fund's portfolio.
Redemption in kind will be made in conformity with applicable Securities and
Exchange Commission rules, taking such securities at the same value employed in
determining net asset value and selecting the securities in a manner the
Trustees determine to be fair and equitable.
The Trust has elected to be governed by Rule 18f-1 of the Investment Company Act
of 1940, as amended, under which the Trust is obligated to redeem shares for any
one shareholder in cash only up to the lesser of $250,000 or 1% of the Fund's
net asset value during any 90-day period.
TAX STATUS
- --------------------------------------------------------------------------------
THE FUND'S TAX STATUS
The Fund will pay no federal income tax because it expects to meet the
requirements of Subchapter M of the Internal Revenue Code, as amended,
applicable to regulated investment companies and to receive the special tax
treatment afforded to such companies. To qualify for this treatment, the Fund
must, among other requirements:
- - derive at least 90% of its gross income from dividends, interest, and gains
from the sale of securities;
- - derive less than 30% of its gross income from the sale of securities held less
than three months;
- - invest in securities within certain statutory limits; and
- - distribute to its shareholders at least 90% of its net income earned during
the year.
SHAREHOLDERS' TAX STATUS
Shareholders are subject to federal income tax on dividends received as cash or
additional shares. No portion of any income dividend paid by the Fund is
eligible for the dividends received deduction available to corporations. These
dividends, and any short-term capital gains, are taxable as ordinary income.
CAPITAL GAINS
Capital gains experienced by the Fund could result in an increase in
dividends. Capital losses could result in a decrease in dividends. If,
for some extraordinary reason, the Fund realizes net long-term capital
gains, it will distribute them once every 12 months.
YIELD
- --------------------------------------------------------------------------------
The Fund's yield for Institutional Shares the seven-day period ended April 30,
1994, was 3.28%.
The Fund calculates its yield daily, 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).
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.
EFFECTIVE YIELD
- --------------------------------------------------------------------------------
The Fund's effective yield for Institutional Shares the seven-day period ended
April 30, 1994, was 3.33%.
The Fund's effective yield is computed 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.
PERFORMANCE COMPARISONS
- --------------------------------------------------------------------------------
The Fund's performance depends upon such variables as:
- - portfolio quality;
- - average portfolio maturity;
- - type of instruments in which the portfolio is invested;
- - changes in interest rates on money market instruments;
- - changes in Fund expenses; and
- - the relative amount of Fund cash flow.
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 offering price. The financial
publications and/or indices which the Fund uses in advertising may include:
- - SALOMON 30-DAY TREASURY BILL INDEX is a weekly quote of the most
representative yields for selected securities, issued by the U.S. Treasury,
maturing in 30 days.
- - LIPPER ANALYTICAL SERVICES, INC. ranks funds in various fund categories by
making comparative calculations using total return. Total return assumes the
reinvestment of all income dividends, and capital gains distributions, if any.
From time to time, the Fund will quote its Lipper ranking in the "U.S. treasury
money market funds" category in advertising and sales literature.
- - IBC/DONOGHUE'S MONEY FUND REPORT (100% U.S. Treasury category) publishes
annualized yields of hundreds of money market on a weekly basis and through
its Money Market Insight publication, reports monthly and 12-month-to-date
investment result for the same money funds.
Advertisements and other sales literature for the Fund may refer to total
return. Total return is the historic change in the value of an investment in the
Fund based on the monthly reinvestment of dividends over a specified period of
time.
1022103B (6/94)
PART C. OTHER INFORMATION.
Item 24. Financial Statements and Exhibits:
(a) Financial Statements (Filed in Part A for Institutional
Shares; to be filed in Part A by amendment for
Institutional Service Shares.)
(b) Exhibits:
(1) (i)
Copy of Declaration of Trust of the Registrant
(1.);
(ii)
Amendment No. 1 to the Declaration of Trust
(6.);
(iii)
Amendment No. 2 to the Declaration of Trust
(9.);
(iv)
Amendment No. 3 to the Declaration of Trust
(11);
(v)
Amendment No. 4 to the Declaration of Trust;+
(2) Copy of By-Laws of the Registrant (1.);
(3) Not applicable;
_______________
+ All exhibits have been filed electronically.
1. Response is incorporated by reference to Registrant's Initial
Registration Statement on Form N-1A filed December 21, 1989. (File
Nos. 33-32755 and 811-5981.)
4. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 2 on Form N-1A filed on March 14, 1991. (File Nos. 33-
32755 and 811-5981).
5. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 4 on Form N-1A filed on April 11, 1991. (File Nos. 33-
32755 and 811-5981).
6. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 5 on Form N-1A filed on May 14, 1991. (File Nos. 33-
32755 and 811-5981).
7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 6 on Form N-1A filed on June 5, 1991. (File Nos. 33-
32755 and 811-5981).
9. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 8 on Form N-1A filed on November 29, 1991. (File
Nos. 33-32755 and 811-5981).
10. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 9 on Form N-1A filed on December 23, 1991.
(File Nos. 33-32755 and 811-5981).
11. Response is incorporated by reference to Registrant's Post-Effective
No. 10 on Form N-1A filed on April 27, 1992. (File Nos. 33-32755 and
811-5981).
13. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 12 on Form N-1A filed on June 25, 1993. (File Nos. 33-
32755 and 811-5981).
(4) (i)
Copy of Specimen Certificate for Shares of
Beneficial Interest of Automated Treasury Cash
Reserves (7.);
(ii)
Copy of Specimen Certificate for Shares of
Beneficial Interest of U.S. Treasury Cash
Reserves-Institutional Shares;+
(iii)
Copy of Specimen Certificate for Shares of
Beneficial Interest of U.S. Treasury Cash
Reserves-Institutional Service Shares;+
(5) (i)
Copy of Investment Advisory Contract of the
Registrant (13.);
(ii)
Copy of Exhibit A to Advisory Contract (4.);
(iii)
Copy of Exhibit B to Advisory Contract (5.);
(iv)
Copy of Exhibit C to Advisory Contract (7.);
(6) Copy of new Distributor's Contract of the Registrant
(10.);
(i)
Form of Exhibit E to Distributor's Contract;+
(ii)
Form of Exhibit F to Distributor's Contract;+
(7)
Not applicable;
(8) (i)
Conformed copy of Custodian Contract of the
Registrant (14.);
(ii)
Conformed copy of Agreement for Fund
Accounting, Shareholder Recordkeeping and
Custody Services Procurement of the Registrant
(14.);
2. Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 1 on Form N-1A filed on February 1, 1990. (File Nos. 33-
32755 and 811-5981).
4. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 2 on Form N-1A filed on March 14, 1991. (File Nos. 33-
32755 and 811-5981).
5. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 4 on Form N-1A filed on April 11, 1991. (File Nos. 33-
32755 and 811-5981).
7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 6 on Form N-1A filed on June 5, 1991. (File Nos. 33-
32755 and 811-5981).
10. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 9 on Form N-1A filed on December 23, 1991.
(File Nos. 33-32755 and 811-5981).
10. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 9 on Form N-1A filed on December 23, 1991. (File Nos. 33-
32755 and 811-5981).
12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 11 on Form N-1A filed on June 23, 1992. (File Nos. 33-
32755 and 811-5981).
14. Response if incorporated by reference to Registrant's Post-Effective
Amendment No. 13 on Form N-1A filed on June 23, 1994. (File Nos. 33-
32755 and 811-5981).
(9) (i)
Conformed copy of Shareholder Services Plan
(14.);
(ii)
Conformed copy of Shareholder Services Sub-
contract (14.);
(iii)
Form of Amendment 1 to Exhibit A to Shareholder
Services Plan;+
(10) Copy of Opinion and Consent of Counsel as to legality
of shares being registered (2.);
(11) Copy of Consent of Independent Auditors;+
(12) Not applicable;
(13) Copy of Initial Capital Understanding (2.);
(14) Not applicable;
(15) (i)
Conformed copy of Rule 12b-1 Agreement;+
(ii)
Form of Distribution Plan (including Forms of
Exhibits A and B);+
(16) Schedule for Computation of Performance Data (10.);
(17) Power of Attorney (12.);
Item 25. Persons Controlled by or Under Common Control with Registrant:
None
Item 26. Number of Holders of Securities:
Number of Record Holders
Title of Class as of August 17, 1994
Shares of beneficial
interest (no par value)
Automated Government Cash Reserves 287
U.S. Treasury Cash Reserves
Institutional Shares 211
Institutional Service Shares 0
Automated Treasury Cash Reserves 87
Item 27. Indemnification: (2.)
2. Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 1 on Form N-1A filed on February 1, 1990. (File Nos. 33-
32755 and 811-5981).
10. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 9 on Form N-1A filed on December 23, 1991. (File Nos. 33-
32755 and 811-5981).
12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 11 on Form N-1A filed on June 23, 1992. (File Nos. 33-
32755 and 811-5981).
Item 28. Business and Other Connections of Investment Adviser:
For a description of the other business of the investment
adviser, see the section entitled "Trust Information - Management
of the Trust" in Part A. The affiliations with the Registrant of
four of the Trustees and one of the Officers of the investment
adviser are included in Part B of this Registration Statement
under "Trust Management - Officers and Trustees." The remaining
Trustee of the investment adviser, his position with the
investment adviser, and, in parentheses, his principal occupation
is: Mark D. Olson, (Partner, Wilson, Halbrook & Bayard), 107 W.
Market Street, Georgetown, Delaware 19947.
The remaining Officers of the investment adviser are: William D.
Dawson, III, J. Thomas Madden, and Mark L. Mallon, Executive Vice
Presidents; Henry J. Gailliot, Senior Vice President-Economist;
Peter R. Anderson, Gary J. Madich, and J. Alan Minteer, Senior
Vice Presidents; Randall A. Bauer, Jonathan C. Conley, Deborah A.
Cunningham, Mark E. Durbiano, Kathleen M. Foody-Malus, David C.
Francis, Thomas M. Franks, Edward C. Gonzales, Jeff A. Kozemchak,
Marian R. Marinack, John W. McGonigle, Gregory M. Melvin, Susan
M. Nason, Mary Jo Ochson, Robert J. Ostrowski, Charles A. Ritter
and Christopher H. Wiles, Vice Presidents; Edward C. Gonzales,
Treasurer; and John W. McGonigle, Secretary. The business
address of each of the Officers of the investment adviser is
Federated Investors Tower, Pittsburgh, PA 15222-3779. These
individuals are also officers of a majority of the investment
advisers to the Funds listed in Part B of this Registration
Statement under "The Funds."
Item 29. Principal Underwriters:
(a) Federated Securities Corp., the Distributor for shares of the
Registrant, also acts as principal underwriter for the following
open-end investment companies: Alexander Hamilton Funds;
American Leaders Fund, Inc.; Annuity Management Series; Automated
Cash Management Trust; Automated Government Money Trust;
BayFunds; The Biltmore Funds; The Biltmore Municipal Funds; The
Boulevard Funds; California Municipal Cash Trust; Cambridge
Series Trust; Cash Trust Series, Inc.; Cash Trust Series II; DG
Investor Series; Edward D. Jones & Co. Daily Passport Cash Trust;
Federated ARMs Fund; Federated Exchange Fund, Ltd.; Federated
GNMA Trust; Federated Growth Trust; Federated High Yield Trust;
Federated Income Securities Trust; Federated Income Trust;
Federated Index Trust; Federated Intermediate Government Trust;
Federated Master Trust; Federated Municipal Trust; Federated
Short-Intermediate Government Trust; Federated Short-Term U.S.
Government Trust; Federated Stock Trust; Federated Tax-Free
Trust; Federated U.S. Government Bond Fund; First Priority Funds;
First Union Funds; Fixed Income Securities, Inc.; Fortress
Adjustable Rate U.S. Government Fund, Inc.; Fortress Municipal
Income Fund, Inc.; Fortress Utility Fund, Inc.; Fountain Square
Funds; Fund for U.S. Government Securities, Inc.; Government
Income Securities, Inc.; High Yield Cash Trust; Independence One
Mutual Funds; Insight Institutional Series, Inc.; Insurance
Management Series; Intermediate Municipal Trust; International
Series, Inc.; Investment Series Funds, Inc.; Investment Series
Trust; Liberty Equity Income Fund, Inc.; Liberty High Income Bond
Fund, Inc.; Liberty Municipal Securities Fund, Inc.; Liberty U.S.
Government Money Market Trust; Liberty Utility Fund, Inc.; Liquid
Cash Trust; Managed Series Trust; Mark Twain Funds; Marshall
Funds, Inc.; The Medalist Funds; Money Market Management, Inc.;
Money Market Obligations Trust; Money Market Trust; The Monitor
Funds; Municipal Securities Income Trust; New York Municipal Cash
Trust; 111 Corcoran Funds; Peachtree Funds; The Planters Funds;
Portage Funds; RIMCO Monument Funds; The Shawmut Funds; Short-
Term Municipal Trust; SouthTrust Vulcan Funds; Star Funds; The
Starburst Funds; The Starburst Funds II; Stock and Bond Fund,
Inc.; Sunburst Funds; Targeted Duration Trust; Tax-Free
Instruments Trust; Tower Mutual Funds; Trademark Funds; Trust for
Financial Institutions; Trust for Government Cash Reserves; Trust
for Short-Term U.S. Government Securities; Trust for U.S.
Treasury Obligations; Vision Fiduciary Funds, Inc.; Vision Group
of Funds Inc.; and World Investment Series, Inc.
Federated Securities Corp. also acts as principal underwriter for
the following closed-end investment company: Liberty Term Trust,
Inc. - 1999.
(b)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Richard B. Fisher Director, Chairman, Vice President
Federated Investors Tower Chief Executive Officer,
Pittsburgh, PA 15222-3779 Chief Operating Officer,
and Asst. Treasurer,
Federated Securities Corp.
Edward C. Gonzales Director, Executive Vice Vice President
Federated Investors Tower President, and Treasurer, and Treasurer
Pittsburgh, PA 15222-3779 Federated Securities
Corp.
John W. McGonigle Director, Executive Vice Vice President
Federated Investors Tower President, and Assistant and Secretary
Pittsburgh, PA 15222-3779 Secretary, Federated
Securities Corp.
John A. Staley, IV Executive Vice President --
Federated Investors Tower and Assistant Secretary,
Pittsburgh, PA 15222-3779 Federated Securities Corp.
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
John B. Fisher President - Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James F. Getz President - Broker/Dealer --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark R. Gensheimer Executive Vice President of --
Federated Investors Tower Bank/Trust,
Pittsburgh, PA 15222-3779 Federated Securities Corp.
Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James M. Heaton Senior Vice President --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
H. Joseph Kennedy Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, Pa 15222-3779
Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James R. Ball Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard W. Boyd Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Laura M. Deger Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David C. Glabicki Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Scott A. Hutton Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William J. Kerns Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William E. Kugler Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Dennis M. Laffey Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Francis J. Matten, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Jeffrey Niss Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael P. O'Brien Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Solon A. Person, IV Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Charles A. Robinson Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas E. Territ Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Philip C. Hetzel Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Ernest L. Linane Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
S. Elliott Cohan Secretary, Federated Assistant
Secretary
Federated Investors Tower Securities Corp.
Pittsburgh, PA 15222-3779
(c) Not applicable.
Item 30. Location of Accounts and Records:
All accounts and records required to be maintained by Section 31(a) of
the Investment Company Act of 1940 and Rules 31a-1 through 31a-3
promulgated thereunder are maintained at one of the following
locations:
Registrant Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Services Company Federated Investors Tower
("Transfer Agent, Dividend Pittsburgh, PA 15222-3779
Disbursing Agent and Portfolio
Recordkeeper")
Federated Administrative 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 8602
("Custodian") Boston, MA 12266-8602
Item 31. Management Services: Not applicable.
Item 32. Undertakings:
Registrant hereby undertakes to comply with the provisions of
Section 16(c) of the 1940 Act with respect to the removal of
Trustees and the calling of special shareholder meetings by
shareholders.
Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.
BF 14918.4
06/21/94:5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, FEDERATED GOVERNMENT TRUST,
certifies that it meets all of the requirements for effectiveness of this
Amendment to its Registration Statement pursuant to Rule 485(a) under the
Securities Act of 1933 and has duly caused this Amendment to its Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Pittsburgh and Commonwealth of Pennsylvania,
on the 31st day of August, 1994.
FEDERATED GOVERNMENT TRUST
BY: /s/Robert C. Rosselot
Robert C. Rosselot, Assistant Secretary
Attorney in Fact for John F. Donahue
August 31, 1994
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to its Registration Statement has been signed below by the
following person in the capacity and on the date indicated:
NAME TITLE DATE
By: /s/Robert C. Rosselot
Robert C. Rosselot Attorney In Fact August 31, 1994
ASSISTANT SECRETARY For the Persons
Listed Below
NAME TITLE
John F. Donahue* Chairman and Trustee
(Chief Executive Officer)
Glen R. Johnson* President and Trustee
Edward C. Gonzales* Vice President and Treasurer
(Principal Financial and
Accounting Officer)
John T. Conroy, Jr.* Trustee
William J. Copeland* Trustee
James E. Dowd* Trustee
Lawrence D. Ellis, M.D.* Trustee
Edward L. Flaherty, Jr.* Trustee
Peter E. Madden* Trustee
Gregor F. Meyer* Trustee
Wesley W. Posvar* Trustee
Marjorie P. Smuts* Trustee
* By Power of Attorney
Exhibit (11) under N-1A
Exhibit 23 under Item 601/Reg SK
Consent of Ernst & Young LLP, Independent Auditors
We consent to the reference to our firm under the captions "Financial
Highlights" and "Independent Auditors" and to the use of our report dated
June 9, 1994, in Post-Effective Amendment Number 14 to the Registration
Statement (Form N-1A Number 33-32755) and the related Prospectus of the
Institutional Service Shares of the U.S. Treasury Cash Reserves (a
portfolio of FEDERATED GOVERNMENT TRUST).
August 31, 1994
Exhibit (1)(v) under Form N-1A
Exhibit (99) under Item 601/Reg. S-K
FEDERATED GOVERNMENT TRUST
Amendment No. 4
DECLARATION OF TRUST
dated December 7, 1989
THIS Declaration of Trust is amended as follows:
Strike 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 of the Trust are established and designated as:
Automated Government Cash Reserves
Automated Treasury Cash Reserves
U.S. Treasury Cash Reserves
Institutional Shares
Institutional Service Shares"
The undersigned Assistant Secretary of Federated Government Trust
hereby certifies that the above stated Amendment is a true and correct
Amendment of the Declaration of Trust, as adopted by the Board of
Trustees on the 18th day of May, 1994.
WITNESS the due execution hereof this 27th day of May, 1994.
/s/Robert C. Rosselot
Robert C. Rosselot
Assistant Secretary
Exhibit (4)(ii) on Form N-1A
Exhibit 99 under Item 601/Reg S-K
U.S. TREASURY CASH RESERVES
Institutional Shares
Number Shares
_____ _____
Account No. Alpha Code See Reverse Side For
Certain Definitions
THIS IS TO CERTIFY THAT is the owner of
CUSIP_____________
Fully Paid and Non-Assessable Shares of Beneficial Interest of U.S. TREASURY
CASH RESERVES, a portfolio of FEDERATED GOVERNMENT TRUST, hereafter called
the Trust, transferable on the books of the Trust by the owner in person or
by duly authorized attorney upon surrender of this certificate properly
endorsed.
The shares represented hereby are issued and shall be held subject to
the provisions of the Declaration of Trust and By-Laws of the Trust and all
amendments thereto, all of which the holder by acceptance hereof assents.
This Certificate is not valid unless countersigned by the Transfer
Agent.
IN WITNESS WHEREOF, the Trust has caused this Certificate to be signed
in its name by its proper officers and to be sealed with its seal.
Dated: FEDERATED GOVERNMENT TRUST
Corporate Seal
1989
Massachusetts
/s/ Edward C. Gonzales /s/ John F. Donahue
Treasurer Chairman
Countersigned: Federated Services
Company (Boston)
Transfer Agent
By:
Authorized Signature
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations;
TEN COM - as tenants in common UNIF GIFT MIN ACT-...Custodian...
TEN ENT - as tenants by the entireties (Cust) (Minors)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act.............................
in common (State)
Additional abbreviations may also be used though not in the above list.
For value received__________ hereby sell, assign, and transfer unto
Please insert social security or other identifying number of assignee
______________________________________
_____________________________________________________________________________
(Please print or typewrite name and address, including zip code, of assignee)
_____________________________________________________________________________
_____________________________________________________________________________
______________________________________________________________________ shares
of beneficial interest represented by the within Certificate, and do hereby
irrevocably constitute and appoint __________________________________________
_____________________________________________________________________________
to transfer the said shares on the books of the within named Trust with full
power of substitution in the premises.
Dated______________________
NOTICE:______________________________
The signature to this assignment must
correspond with the name as written upon
the face of the certificate in every
particular, without alteration or
enlargement or any change whatever.
All persons dealing with U.S. TREASURY CASH RESERVES, a Massachusetts
business trust, must look solely to the Trust property for the enforcement of
any claim against the Trust, as the Trustees, officers, agents or
shareholders of the Trust assume no personal liability whatsoever for
obligations entered into on behalf of the Trust.
THIS SPACE MUST NOT BE COVERED IN ANY WAY
DOCUMENT DESCRIPTION - SPECIMEN STOCK CERTIFICATE
Page One
A. The Certificate is outlined by an (color) one-half inch border.
B. The number in the upper left-hand corner and the number of shares in
the upper right-hand corner are outlined by octagonal boxes.
C. The cusip number in the middle right-hand area of the page is boxed.
D. The Massachusetts corporate seal appears in the bottom middle of the
page.
Page Two
The social security or other identifying number of the assignee
appears in a box in the top-third upper-left area of the page.
Exhibit (4)(iii) on Form N-1A
Exhibit 99 under Item 601/Reg S-K
U.S.TREASURY CASH RESERVES
Institutional Service Shares
Number Shares
_____ _____
Account No. Alpha Code See Reverse Side For
Certain Definitions
THIS IS TO CERTIFY THAT is the owner of
CUSIP_____________
Fully Paid and Non-Assessable Shares of Beneficial Interest of U.S.TREASURY
CASH RESERVES, a portfolio of FEDERATED GOVERNMENT TRUST, hereafter called
the Trust, transferable on the books of the Trust by the owner in person or
by duly authorized attorney upon surrender of this certificate properly
endorsed.
The shares represented hereby are issued and shall be held subject to
the provisions of the Declaration of Trust and By-Laws of the Trust and all
amendments thereto, all of which the holder by acceptance hereof assents.
This Certificate is not valid unless countersigned by the Transfer
Agent.
IN WITNESS WHEREOF, the Trust has caused this Certificate to be signed
in its name by its proper officers and to be sealed with its seal.
Dated: FEDERATED GOVERNMENT TRUST
Corporate Seal
1989
Massachusetts
/s/ Edward C. Gonzales /s/ John F. Donahue
Treasurer Chairman
Countersigned: Federated Services
Company (Boston)
Transfer Agent
By:
Authorized Signature
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations;
TEN COM - as tenants in common UNIF GIFT MIN ACT-...Custodian...
TEN ENT - as tenants by the entireties (Cust) (Minors)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act.............................
in common (State)
Additional abbreviations may also be used though not in the above list.
For value received__________ hereby sell, assign, and transfer unto
Please insert social security or other
identifying number of assignee
______________________________________
_____________________________________________________________________________
(Please print or typewrite name and address, including zip code, of assignee)
_____________________________________________________________________________
_____________________________________________________________________________
______________________________________________________________________ shares
of beneficial interest represented by the within Certificate, and do hereby
irrevocably constitute and appoint __________________________________________
_____________________________________________________________________________
to transfer the said shares on the books of the within named Trust with full
power of substitution in the premises.
Dated______________________
NOTICE:______________________________
The signature to this assignment must
correspond with the name as written upon
the face of the certificate in every
particular, without alteration or
enlargement or any change whatever.
All persons dealing with FEDERATED GOVERNMENT TRUST, a Massachusetts business
trust, must look solely to the Trust property for the enforcement of any
claim against the Trust, as the Trustees, officers, agents or shareholders of
the Trust assume no personal liability whatsoever for obligations entered
into on behalf of the Trust.
THIS SPACE MUST NOT BE COVERED IN ANY WAY
DOCUMENT DESCRIPTION - SPECIMEN STOCK CERTIFICATE
Page One
A. The Certificate is outlined by an (color) one-half inch border.
B. The number in the upper left-hand corner and the number of shares in
the upper right-hand corner are outlined by octagonal boxes.
C. The cusip number in the middle right-hand area of the page is boxed.
D. The Massachusetts corporate seal appears in the bottom middle of the
page.
Page Two
The social security or other identifying number of the assignee
appears in a box in the top-third upper-left area of the page.
Exhibit (6)(i) under Form N-1A
Exhibit (10) under Item 601/Reg. S-K
Exhibit E
FEDERATED GOVERNMENT TRUST
U.S. Treasury Cash Reserves
Institutional Shares
In consideration of the mutual covenants set forth in the
Distributor's Contract dated December 9, 1991 between Federated
Government Trust and Federated Securities Corp., Federated Government
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 ____ day of ________, 1994.
ATTEST: FEDERATED GOVERNMENT TRUST
By:
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
By:
Secretary President
(SEAL)
Exhibit (6)(ii) under Form N-1A
Exhibit (10) under Item 601/Reg. S-K
Exhibit F
FEDERATED GOVERNMENT TRUST
U.S. Treasury Cash Reserves
Institutional Service Shares
The following provisions are hereby incorporated and made part of
the Distributor's Contract dated the 9th day of December, 1991, between
Federated Government 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
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
Institutional Service Shares of U.S. Treasury Cash Reserves 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 December 9, 1991 between Federated
Government Trust and Federated Securities Corp., Federated Government
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 ___ day of ________, 1994.
ATTEST: FEDERATED GOVERNMENT TRUST
By:
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
By:
Secretary President
(SEAL)
Exhibit 9(iii) under Form N-1A
Exhibit (10) under Item 601/Reg. S-K
AMENDMENT 1 to
EXHIBIT A
to the
Plan
FEDERATED GOVERNMENT TRUST
Automated Government Cash Reserves
Automated Treasury Cash Reserves
U.S. Treasury Cash Reserves-Institutional Shares
U.S. Treasury Cash Reserves-Institutional Service Shares
This Plan is adopted by Federated Government Trust with respect to
the separate Classes of Shares, if any, of the portfolios of the Fund
set forth.
In compensation for the services provided pursuant to this Plan,
Providers will be paid a monthly fee computed at the annual rate of .25
of 1% of the average aggregate net asset value of each Portfolio.
Witness the due execution hereof this ___ day of _________, 1994.
FEDERATED GOVERNMENT TRUST
By:
President
Exhibit (15)(i) under Form N-1A
Exhibit (10) under Item 601/Reg. S-K
RULE 12b-1 AGREEMENT
This Agreement is made between the Financial Institution executing this
Agreement ("Administrator") and Federated Securities Corp. ("FSC") for the
mutual funds (the "mutual funds") for which FSC serves as Distributor of
shares of beneficial interest or capital stock ("Shares") which Shares may be
offered in one or more series (the "Funds") and one or more classes thereof
(the "Class") and which have adopted a Rule 12b-1 Plan ("Plan") in relation
to such Funds and Classes and approved this form of agreement pursuant to
Rule 12b-1 under the Investment Company Act of 1940. In consideration of the
mutual covenants hereinafter contained, it is hereby agreed by and between
the parties hereto as follows:
1. FSC hereby appoints Administrator to render or cause to be
rendered sales and administrative support services to the Funds with respect
to the Classes thereof and their shareholders.
2. The services to be provided under Paragraph 1 may include, but
are not limited to, the following:
(a) communicating account openings through computer terminals
located on the Administrator's premises ("computer terminals"),
through a toll-free telephone number or otherwise;
(b) communicating account closings via the computer terminals,
through a toll-free telephone number or otherwise;
(c) entering purchase transactions through the computer terminals,
through a toll-free telephone number or otherwise;
(d) entering redemption transactions through the computer terminals,
through a toll-free telephone number or otherwise;
(e) electronically transferring and receiving funds for Fund Share
purchases and redemptions, and confirming and reconciling all
such transactions;
(f) reviewing the activity in Fund accounts;
(g) providing training and supervision of its personnel;
(h) maintaining and distributing current copies of prospectuses and
shareholder reports;
(i) advertising the availability of its services and products;
(j) providing assistance and review in designing materials to send to
customers and potential customers and developing methods of
making such materials accessible to customers and potential
customers; and
(k) responding to customers' and potential customers' questions about
the Funds.
The services listed above are illustrative. The Administrator is not
required to perform each service and may at any time perform either more or
fewer services than described above.
3. During the term of this Agreement, FSC will pay the Administrator
fees for ach Fund or Class thereof as set forth in a written schedule
delivered to the Administrator pursuant to this Agreement. FSC's fee
schedule for Administrator may be changed by FSC sending a new fee schedule
to the Administrator pursuant to Paragraph 12 of this Agreement. For the
payment period in which this Agreement becomes effective or terminates, there
shall be an appropriate proration of the fee on the basis of the number of
days that the Rule 12b-1 Agreement is in effect during the period.
4. The Administrator will not perform or provide any duties which
would cause it to be a fiduciary under Section 4975 of the Internal Revenue
Code, as amended. For purposes of that Section, the Administrator
understands that any person who exercises any discretionary authority or
discretionary control with respect to any individual retirement account or
its assets, or who renders investment advice for a fee, or has any authority
or responsibility to do so, or has any discretionary authority or
discretionary responsibility in the administration of such an account, is a
fiduciary.
5. The Administrator understands that the Department of Labor views
ERISA as prohibiting fiduciaries of discretionary ERISA assets from receiving
administrative service fees or other compensation from funds in which the
fiduciary's discretionary ERISA assets are invested. To date, the Department
of Labor has not issued any exemptive order or advisory opinion that would
exempt fiduciaries from this interpretation. Without specific authorization
from the Department of Labor, fiduciaries should carefully avoid investing
discretionary assets in any fund pursuant to an arrangement where the
fiduciary is to be compensated by the fund for such investment. Receipt of
such compensation could violate ERISA provisions against fiduciary self-
dealing and conflict of interest and could subject the fiduciary to
substantial penalties.
6. The Administrator agrees not to solicit or cause to be solicited
directly, or indirectly, at any time in the future, any proxies from the
shareholders of any or all of the Funds in opposition to proxies solicited by
management of the mutual fund or funds, unless a court of competent
jurisdiction shall have determined that the conduct of a majority of the
Board of Directors or Trustees of the mutual fund or funds constitutes
willful misfeasance, bad faith, gross negligence or reckless disregard of
their duties. This Paragraph 6 will survive the term of this Agreement.
7. With respect to each Fund or Class thereof, this Agreement shall
continue in effect for one year from the date of its execution, and
thereafter for successive periods of one year if the form of this Agreement
is approved at least annually by the Directors or Trustees of the mutual
fund, including a majority of the members of the Board of Directors or
Trustees of the mutual fund who are not interested persons of the mutual fund
and have no direct or indirect financial interest in the operation of the
mutual fund's Plan or in any related documents to the Plan ("Disinterested
Directors or Trustees") cast in person at a meeting for that purpose.
8. Notwithstanding Paragraph 7, this Agreement may be terminated as
follows:
(a) at any time, without the payment of any penalty, by the vote of a
majority of the Disinterested Directors or Trustees of the mutual
fund or by a vote of a majority of the outstanding voting
securities of the Fund or any Class thereof as defined in the
Investment Company Act of 1940 on not more than sixty (60) days'
written notice to the parties to this Agreement;
(b) automatically in the event of the Agreement's assignment as
defined in the Investment Company Act of 1940 or upon the
termination of the "Distributor's Contract" between the mutual
fund or funds and FSC; and
(c) by either party to the Agreement without cause by giving the
other party at least sixty (60) days' written notice of its
intention to terminate.
9. The termination of this Agreement with respect to any one Fund or
Class thereof will not cause the Agreement's termination with respect to any
other Fund or Class thereof.
10. The Administrator agrees to obtain any taxpayer identification
number certification from its customers required under Section 3406 of the
Internal Revenue Code, and any applicable Treasury regulations, and to
provide FSC or its designee with timely written notice of any failure to
obtain such taxpayer identification number certification in order to enable
the implementation of any required backup withholding.
11. This Agreement supersedes any prior service agreements between
the parties for the mutual funds.
12. This Agreement may be amended by FSC from time to time by the
following procedure. FSC will mail a copy of the amendment to the
Administrator's address, as shown below. If the Administrator does not
object to the amendment within thirty (30) days after its receipt, the
amendment will become part of the Agreement. The Administrator's objection
must be in writing and be received by FSC within such thirty days.
13. This Agreement shall be construed in accordance with the Laws of
the Commonwealth of Pennsylvania.
Administrator
Address
City State Zip Code
Dated: By:
Authorized Signature
Title
Print Name of Authorized Signature
FEDERATED SECURITIES CORP.
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
By:/s/Richard B. Fisher
Richard B. Fisher, President
FEE SCHEDULE FOR RULE 12b-1 AGREEMENT WITH
FEDERATED SECURITIES CORP.
May 14, 1991
FSC will pay the Administrator a periodic fee for the following Funds
or Classes thereof computed at an annual rate of the average net asset value
of Shares held in each of these Funds during the period in accounts for which
the Administrator provides services under the Rule 12b-1 Agreement, so long
as the average net asset value of the Shares in a Class of the Fund during
the period is at least $100,000.
Funds Fee Rate Period
Automated Government Cash Reserves
Cash II Shares .15 of 1% Monthly
AMENDMENT NO. 1 TO
FEE SCHEDULE FOR RULE 12b-1 AGREEMENT WITH
FEDERATED SECURITIES CORP.
September 1, 1994
FSC will pay the Administrator a periodic fee for the following Funds
or Classes thereof computed at an annual rate of the average net asset value
of Shares held in each of these Funds during the period in accounts for which
the Administrator provides services under the Rule 12b-1 Agreement, so long
as the average net asset value of the Shares in a Class of the Fund during
the period is at least $100,000.
Funds Fee Rate Period
Automated Government Cash Reserves
Cash II Shares .15 of 1% Monthly
U.S. Treasury Cash Reserves
Institutional Service Shares .25 of 1% Monthly
Exhibit 15(ii) under Form N-1A
Exhibit (10) under 601/Reg. S-K
FEDERATED GOVERNMENT TRUST
PLAN
This Plan ("Plan") is adopted as of May 14, 1991, by the Board of
Trustees of FEDERATED GOVERNMENT TRUST (the "Trust"), a Massachusetts
business trust, with respect to certain classes of shares ("Classes") of
the portfolios of the Trust (the "Funds") set forth in exhibits hereto.
1. This Plan is adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940 ("Act"), so as to allow the Trust to make
payments as contemplated herein, in conjunction with the distribution of
Classes of the Funds ("Shares").
2. This Plan is designed to finance activities of Federated
Securities Corp. ("FSC") principally intended to result in the sale of
Shares to include: (a) providing incentive to broker/dealers ("Brokers")
to sell Shares and to provide administrative support services to the
Funds and their shareholders; (b) compensating other participating
financial institutions and other persons ("Administrators") for
providing administrative support services to the Funds and their
shareholders; (c) paying for the costs incurred in conjunction with
advertising and marketing of Shares to include expenses of preparing,
printing and distributing prospectuses and sales literature to
prospective shareholders, Brokers or Administrators; and (d) other costs
incurred in the implementation and operation of the Plan. In
compensation for services provided pursuant to this plan FSC will be
paid a fee in respect of the Classes set forth in the applicable
exhibit.
3. Any payment to FSC in accordance with this Plan will be made
pursuant to the "Distributor's Contract" entered into by the Trust and
FSC. Any payments made by FSC to Brokers and Administrators with funds
received as compensation under this Plan will be made pursuant to the
"Rule 12b-1 Agreement" entered into by FSC and the Broker or
Administrator.
4. FSC has the right (i) to select, in its sole discretion, the
Brokers and Administrators to participate in the Plan and (ii) to
terminate without cause and in its sole discretion any Rule 12b-1
Agreement.
5. Quarterly in each year that this Plan remains in effect, FSC
shall prepare and furnish to the Board of Trustees of the Trust, and the
Board of Trustees shall review, a written report of the amounts expended
under the Plan and the purpose for which such expenditures were made.
6. This Plan shall become effective with respect to each Class
(i) after approval by majority votes of: (a) the Trust's Board of
Trustees; (b) the Disinterested Trustees of the Trust, cast in person at
a meeting called for the purpose of voting on the Plan; and (c) the
outstanding voting securities of the particular Class, as defined in
Section 2(a)(42) of the Act and (ii) upon execution of an exhibit
adopting this Plan with respect to such Class.
7. This Plan shall remain in effect with respect to each Class
presently set forth on an exhibit and any subsequent Classes added
pursuant to an exhibit during the initial year of this Plan for the
period of one year from the date set forth above and may be continued
thereafter if this Plan is approved with respect to each Class at least
annually by a majority of the Trust's Board of Trustees and a majority
of the Disinterested Trustees, cast in person at a meeting called for
the purpose of voting on such Plan. If this Plan is adopted with
respect to a Class after the first annual approval by the Trustees as
described above, this Plan will be effective as to that Class upon
execution of the applicable exhibit pursuant to the provisions of
paragraph 6(ii) above and will continue in effect until the next annual
approval of this Plan by the Trustees and thereafter for successive
periods of one year subject to approval as described above.
8. All material amendments to this Plan must be approved by a
vote of the Board of Trustees of the Trust and of the Disinterested
Trustees, cast in person at a meeting called for the purpose of voting
on it.
9. This Plan may not be amended in order to increase materially
the costs which the Classes may bear for distribution pursuant to the
Plan without being approved by a majority vote of the outstanding voting
securities of the Classes as defined in Section 2(a)(42) of the Act.
10. This Plan may be terminated with respect to a particular
Class at any time by: (a) a majority vote of the Disinterested Trustees;
or (b) a vote of a majority of the outstanding voting securities of the
particular Class as defined in Section 2(a)(42) of the Act; or (c) by
FSC on 60 days notice to the Trust.
11. While this Plan shall be in effect, the selection and
nomination of Disinterested Trustees of the Trust shall be committed to
the discretion of the Disinterested Trustees then in office.
12. All agreements with any person relating to the
implementation of this Plan shall be in writing and any agreement
related to this Plan shall be subject to termination, without penalty,
pursuant to the provisions of Paragraph 10 herein.
13. This Plan shall be construed in accordance with and governed
by the laws of the Commonwealth of Pennsylvania.
EXHIBIT A
FEDERATED GOVERNMENT TRUST
Automated Government Cash Reserves
Cash II Shares
The Plan is adopted by Federated Government 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 .15 of l%
of the average aggregate net asset value of the Cash II Shares of
Automated Government Cash Reserves during the month.
Witness the due execution hereof this 14th day of May, 1991.
FEDERATED GOVERNMENT TRUST
By:
EXHIBIT B
FEDERATED GOVERNMENT TRUST
U.S. Treasury Cash Reserves
Institutional Service Shares
The Plan is adopted by Federated Government 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 .25 of l%
of the average aggregate net asset value of the Institutional Services
Shares of U.S. Treasury Cash Reserves during the month.
Witness the due execution hereof this ____ day of ________, 1994.
FEDERATED GOVERNMENT TRUST
By:
Title:
