1933 Act File No. 33-46431
1940 Act File No. 811-6607
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
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Pre-Effective Amendment No. ..................................
Post-Effective Amendment No. 13......................... X
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
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Amendment No. 16....................................... X
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DG INVESTOR SERIES
(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)
60 days after filing pursuant to paragraph (a) (i)
on pursuant to paragraph (a) (i)
X 75 days after filing pursuant to paragraph (a)(ii) on ______________
pursuant to paragraph (a)(ii) of Rule 485.
If appropriate, check the following box:
This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has filed with the Securities and Exchange Commission a declaration
pursuant to Rule 24f-2 under the Investment Company Act of 1940, and:
X filed the Notice required by that Rule on April 15, 1997; 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:
Matthew G. Maloney, Esquire
Dickstein Shapiro Morin & Oshinsky LLP
2101 L Street, N.W.
Washington, D.C. 20037
<PAGE>
CROSS-REFERENCE SHEET
This Amendment to the Registration Statement of DG INVESTOR SERIES
which consists of nine portfolios: (1) DG U.S. Government Money Market Fund, (2)
DG Limited Term Government Income Fund, (3) DG Government Income Fund, (4) DG
Equity Fund, (5) DG Municipal Income Fund, (6) DG Opportunity Fund, (7) DG Prime
Money Market Fund, (8) DG International Equity Fund and (9) DG Mid Cap Fund,
relates only to (9) DG Mid Cap Fund and is comprised of the following:
PART A. INFORMATION REQUIRED IN A PROSPECTUS.
Prospectus Heading
(Rule 404(c) Cross Reference)
Item 1. Cover Page..................................(1-9) Cover Page.
----------
Item 2. Synopsis...................(1-6) Synopsis; (7,8,9) General
Information; (1-9)
--------
Summary of Fund Expenses; (1-6) Financial
Highlights.
Item 3. Condensed Financial
Information (1-9) Performance Information.
Item 4. General Description of
Registrant..................................(1-6) Objectives
and Policies of
Each Fund;(7,8,9)
Investment
Information; (8,9)
Investment
Objective; (8,9)
Investment
Policies; (1-6)
Portfolio
Investments and
Strategies; (8)
Risks Associated
With Financial
Futures Contracts
And Options on
Financial Futures
Contracts; (8)
Non-Diversified;
(1-9) Investment
Limitations.
Item 5. Management of the Fund..............(1-6,9) DG Investor Series
Information;(7,8) Trust
----------------------
Information; (1-9) Management of the Trust; (1-9)
Distribution of Fund Shares; (1-6) Administration
of the Funds;(7,8,9) Administration of the Fund;
(8,9) Distribution and Shareholder Services Plans;
(8,9) Shareholder Servicing Arrangements; (6)
Shareholder Services Plan; (1-9) Brokerage
Transactions; (9) Expenses of the Fund.
Item 6. Capital Stock and Other
Securities...(1-6,9) Dividends and Distributions; (7, 8)
Dividends; (1,7,8,9) Capital Gains; (1-6,9)
Shareholder Information; (7,8) Account &
Shareholder Information; (1-9) Voting Rights; (1-9)
Tax Information; (1-9) Federal Income Tax; (5)
Additional Tax Information for Municipal Income
Fund; (5) Other State and Local Taxes; (9) State
and Local Taxes; (1-9) Effect of Banking Laws.
Item 7. Purchase of Securities Being
Offered.....................................(1-9) Net Asset
Value; (1-6)
Investing in the
Funds; (7,8,9)
Investing in the
Fund; (1-9) Share
Purchases; (1-9)
Minimum Investment
Required; (1-9)
What Shares Cost;
(2-6) Reducing the
Sales Charge;
(1-9) Systematic
Investment
Program; (1-9)
Certificates and
Confirmations;
(1-9) Exchanging
Shares; (1-9)
Exchange
Privilege.
Item 8. Redemption or Repurchase....................(1-9) Redeeming
Shares; (1-9) Through the Banks;
------------------------
(1-9) Systematic Withdrawal Program; (1-9) Accounts
With Low Balances.
Item 9. Pending Legal Proceedings...................None.
-------------------------
<PAGE>
PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION.
Item 10. Cover Page..................................(1-9) Cover Page.
----------
Item 11. Table of Contents.....................(1-9) Table of Contents.
-----------------
Item 12. General Information and
History ......(1-6) General Information About the Funds; (8,9)
General Information About the Fund.
Item 13. Investment Objectives and
Policies....................................(1-6,8,9)
Investment
Objective(s) and
Policies; (7)
Investment
Policies; (4,6)
Equity Fund and
Opportunity Fund;
(2,3) Limited Term
Fund and
Government Income
Fund; (5)
Municipal Income
Fund; (1) Money
Market Fund; (1-6)
Investment
Policies and
Strategies; (1-9)
Investment
Limitations;(1,7)
Regulatory
Compliance.
Item 14. Management of the Fund....(1-9) DG Investor Series Management.
----------------------
Item 15. Control Persons and Principal
Holders of Securities.....(1-6,9) Trust Ownership; (7,8) Share
Ownership; (1-9) Trustees'
Compensation; (1-9) Trustee
Liability.
Item 16. Investment Advisory and Other
Services....................................(1-9) Investment
Advisory Services;
(1-6) Adviser to
the Funds; (7,8,9)
Investment
Adviser; (8,9)
Sub-Adviser;(1-9)
Advisory Fees;
(2-6) Sub-Adviser
to the Funds;
(8,9) Sub-Adviser;
(2-6,8,9)
Sub-Advisory Fees;
(1-8) Other
Services; (1-6)
Administration of
the Trust; (8,9)
Fund
Administration;(1-6)
Custodian; (7,8,9)
Custodian &
Portfolio
Accountant; (1-6)
Transfer Agent,
Dividend
Disbursing Agent
and Shareholder
Servicing Agent;
(7,8,9) Transfer
Agent; (1-9)
Independent
Auditors.
Item 17. Brokerage Allocation........................(1-9) Brokerage
Transactions.
--------------------
Item 18. Capital Stock and Other
Securities Not Applicable.
Item 19. Purchase, Redemption and
Pricing of Securities Being
Offered.....................................(1-9) Purchasing
Shares; (1-9)
Conversion to
Federal Funds;
(1-9) Exchange
Privilege; (1-9)
Requirements for
Exchange; (1-9)
Making an
Exchange; (1-9)
Determining Net
Asset Value;
(2-4,6)
Determining Market
Value of
Securities; (5)
Valuing Municipal
Securities; (1)
Use of the
Amortized Cost
Method; (1-9)
Redeeming Shares;
(1-9) Redemption
in Kind; (1-9)
Massachusetts
Partnership Law.
Item 20. Tax Status..................................(1-9) Tax Status
(1-6) The Funds'
Tax Status;
----------
(7,8,9) The Fund's
Tax Status; (1-9)
Shareholders'
Tax Status;
Item 21. Underwriters................................(1-5,7)
Distribution Plan;
(6,8,9)
Distribution and
------------ Shareholder
Services Plans;
Item 22. Calculation of Performance
Data.......................................(1-9) Performance
Comparisons; (1-9)
Yield; (1,7)
Effective Yield;
(1-9) Total Return;
(5) Tax-Equivalent
Yield; (5) Tax-
Equivalency Table.
Item 23. Financial Statements........................(7,8,9) To be
filed by amendment.
--------------------
DG Mid Cap Fund
(A Portfolio of DG Investor Series)
Prospectus
The shares of DG Mid Cap Fund (the "Fund") offered by this prospectus represent
interests in a portfolio of DG Investor Series (the "Trust"), an open-end
management investment company (a mutual fund). The Fund's investment objective
is to provide capital appreciation by investing primarily in a portfolio of
equity securities comprising the mid-sized capitalization sector of the United
States equity market.
The shares offered by this prospectus are not deposits or obligations of Deposit
Guaranty National Bank, are not endorsed or guaranteed by Deposit Guaranty
National Bank, and are not insured or guaranteed by 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.
This prospectus contains the information you should read and know before you
invest in the Fund. Keep this prospectus for future reference.
The Fund has also filed a Statement of Additional Information dated September
__, 1997, with the Securities and Exchange Commission ("SEC"). The information
contained in the Statement of Additional Information is incorporated by
reference into this prospectus. You may request a copy of the Statement of
Additional Information or a paper copy of this prospectus, if you have received
your prospectus electronically, free of charge by calling 1-800-530-7377. To
obtain other information, or make inquiries about the Fund, contact the Fund at
the address listed in the back of this prospectus. The Statement of Additional
Information, material incorporated by reference into this document, and other
information regarding the Fund is maintained electronically with the SEC at
Internet Web site (http://www.sec.gov).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
Prospectus dated September __, 1997
<PAGE>
Table of Contents
Table of Contents will be generated by the typesetter.
<PAGE>
Table of Contents
Summary of Fund Expenses
<PAGE>
General Information
The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated February 7, 1992. The Declaration of Trust permits the Trust to
offer separate series of shares of beneficial interest representing interests in
separate portfolios of securities. The shares in any one portfolio may be
offered in separate classes. Shares of the Fund are designed for retail and
trust customers of Deposit Guaranty National Bank and its affiliates as a
convenient means of participating in a professionally managed portfolio. A
minimum initial investment of $250,000 is required.
Shares are sold and redeemed at net asset value without a sales charge imposed
by the Fund.
Investment Information
Investment Objective
The investment objective of the Fund is to provide capital appreciation. 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. This investment objective cannot be changed without shareholder
approval.
Investment Policies
The Fund pursues its investment objective by investing primarily in a portfolio
of equity securities comprising the mid-size capitalization ("mid-cap") sector
of the United States equity market. In the adviser's and sub-adviser's opinions,
mid-cap stocks have special value in the marketplace and (like small
capitalization stocks comprising the portfolio of the DG Opportunity Fund,
another fund which is offered by the Trust through a separate prospectus) can
provide greater growth of principal than large capitalization stocks, but will
not necessarily do so. The Fund attempts to select companies whose potential for
capital appreciation exceeds that of larger capitalization stocks commensurate
with increased risk. Under normal market conditions, the Fund intends to invest
at least 65% of its total assets in equity securities of companies that have a
market value capitalization ranging from $500 million to $5 billion. The Fund's
adviser and sub-adviser will invest primarily in equity securities of companies
with above-average earnings growth prospects or in companies where significant
fundamental changes are taking place. These changes could include significant
new products, services, or methods of distribution; restructuring or
reallocating business; or significant share price appreciation. Unless indicated
otherwise, the investment policies described below may be changed by the Board
of Trustees ("Trustees") without approval of shareholders. Shareholders will be
notified before any material change in these policies becomes effective.
Acceptable Investments. Consistent with the above, the Fund may invest in
the following:
o common stock of U.S. companies which are either listed on the New
York or American Stock Exchanges or traded in over-the-counter
markets, preferred stock of such companies, warrants, and preferred
stock convertible into common stock of such companies;
o investments in American Depositary Receipts ("ADRs") of foreign
companies traded on the New York Stock Exchange or in the
over-the-counter market;
o convertible securities rated at least BBB by Standard & Poor's
("S&P") or Fitch Investors Service, Inc. ("Fitch"), or at least Baa
by Moody's Investors Service, Inc. ("Moody's"), or, if not rated, are
determined by the adviser and sub-adviser to be of comparable quality;
o money market instruments rated A-1 or A-2 by S&P, Prime-1 or Prime-2
by Moody's, or F-1 or F-2 by Fitch;
o fixed rate notes and bonds and adjustable and variable rate notes of
companies whose common stock it may acquire rated BBB or better by
S&P or Baa or better by Moody's;
o zero coupon convertible securities; and
o obligations, including certificates of deposit and bankers'
acceptances, of banks or savings associations having at least $1
billion in deposits as of the date of their most recently published
financial statements and which are insured by the Bank Insurance
Fund ("BIF") or the Savings Association Insurance Fund ("SAIF"),
both of which are administered by the Federal Deposit Insurance
Corporation ("FDIC"), including U.S. branches of foreign banks and
foreign branches of U.S. banks.
Investment Risks. As with other mutual funds that invest primarily in equity
securities, the Fund is subject to market risks. That is, the possibility exists
that common stocks will decline over short or even extended periods of time. The
United States equity market tends to be cyclical, experiencing both periods when
stock prices generally increase and periods when stock prices generally
decrease. However, because the Fund invests primarily in mid-cap stocks, there
are some additional risk factors associated with investments in the Fund. In
particular, stocks in the mid-cap sector of the United States equity market have
historically been more volatile in price than larger capitalization stocks, such
as those included in the S&P 500 Composite Stock Price Index ("S&P 500 Index").
This is because, among other things, mid-companies have less certain growth
prospects than larger companies; have a lower degree of liquidity in the equity
market; and tend to have a greater sensitivity to changing economic conditions.
Further, in addition to exhibiting greater volatility, the stocks of
mid-companies may, to some degree, fluctuate independently of the stocks of
large companies. That is, the stocks of mid-companies may decline in price as
the prices of large company stocks rise or vice versa. Therefore, investors
should expect that the Fund will be more volatile than, and may fluctuate
independently of, broad stock market indices such as the S&P 500 Index.
Fixed Income Securities. The Fund may invest in fixed income securities. The
prices of fixed income securities fluctuate inversely in relation to the
direction of interest rates. The prices of longer-term fixed income securities
fluctuate more widely in response to market interest rate changes. Bonds rated
"BBB" by S&P or "Baa" by Moody's have speculative characteristics. Changes in
economic conditions or other circumstances are more likely to lead to weakened
capacity to make principal and interest payments than higher rated bonds.
Downgraded securities will be evaluated on a case by case basis by the adviser
and sub-adviser. The adviser and sub-adviser will determine whether or not the
security continues to be an acceptable investment. If not, the security may be
sold.
Convertible Securities. Convertible securities are fixed income securities which
may be exchanged or converted into a predetermined number of the issuer's
underlying common stock at the option of the holder during a specified time
period. Convertible securities may take the form of convertible preferred stock,
convertible bonds or debentures, units consisting of "usable" bonds and
warrants, or a combination of the features of several of these securities. The
investment characteristics of each convertible security vary widely, which
allows convertible securities to be employed for different investment
objectives.
The Fund will exchange or convert the convertible securities held in its
portfolio into shares of the underlying common stock in instances in which, in
the adviser's and sub-adviser's opinions, the investment characteristics of the
underlying common shares will assist the Fund in achieving its investment
objective. Otherwise, the Fund may hold or trade convertible securities. In
selecting convertible securities for the Fund, the adviser and sub-adviser
evaluate the investment characteristics of the convertible security as a fixed
income instrument and the investment potential of the underlying equity security
for capital appreciation. In evaluating these matters with respect to a
particular convertible security, the adviser and sub-adviser consider numerous
factors, including the economic and political outlook, the value of the security
relative to other investment alternatives, trends in the determinants of the
issuer's profits, and the issuer's management capability and practices.
Restricted and Illiquid Securities. The Fund may invest in restricted
securities. Restricted securities are any securities in which the Fund may
otherwise invest pursuant to its investment objective and policies but which are
subject to restrictions on resale under federal securities laws. However, the
Fund will not invest more than 15% of its net assets in illiquid securities,
including certain restricted securities not determined by the Trustees to be
liquid, over-the-counter options and repurchase agreements providing for
settlement in more than seven days after notice.
Securities of Foreign Issuers. The Fund may invest (up to 20% of its total
assets) in securities of foreign issuers traded on the New York or American
Stock Exchanges or in the over-the-counter market in the form of depositary
receipts. Securities of a foreign issuer may present greater risks in the form
of nationalization, confiscation, domestic marketability, or other national or
international restrictions. As a matter of practice, the Fund will not invest in
the securities of a foreign issuer if any such risk appears to the adviser or
sub-adviser to be substantial.
Other differences between investing in foreign and U.S. companies include:
o less publicly available information about foreign companies;
o the lack of uniform financial accounting standards applicable to
foreign companies;
o less readily available market quotations on foreign companies;
o differences in government regulation and supervision of foreign
securities exchanges, brokers, listed companies, and banks;
o generally lower foreign securities market volume;
o the likelihood that foreign securities may be less liquid or more
volatile;
o generally higher foreign brokerage commissions;
o possible difficulty in enforcing contractual obligations or
obtaining court judgments abroad because of differences in the legal
systems;
o unreliable mail service between countries; and
o political or financial changes which adversely affect investments in
some countries.
Investing in Securities of Other Investment Companies. The Fund may invest in
securities of other investment companies. The Fund will limit its investment in
other investment companies to no more than 3% of the total outstanding voting
stock of any investment company, will not invest more than 5% of its total
assets in any one investment company, or invest more than 10% of its total
assets in investment companies in general. The Fund will purchase securities of
closed-end investment companies only in open-market transactions involving only
customary broker's commissions. However, these limitations are not applicable if
the securities are acquired in a merger, consolidation, or acquisition of
assets. It should be noted that investment companies incur certain expenses,
such as management fees, and, therefore, any investment by a fund in shares of
another investment company would be subject to such duplicate expenses. The Fund
will invest in other investment companies primarily for the purpose of investing
short-term cash on a temporary basis.
Put and Call Options. The Fund may purchase and sell (write) put and call
options on its portfolio securities either as a hedge to attempt to protect
securities which the Fund holds, or will be purchasing, against decreases or
increases in value, or to generate income for the Fund. The Fund may write call
options on securities either held in its portfolio or which it has the right to
obtain without payment of further consideration or for which it has segregated
cash in the amount of any additional consideration. In the case of put options
written by the Fund, the Trust's custodian will segregate cash, U.S. Treasury
obligations, or highly liquid debt securities with a value equal to or greater
than the exercise price of the underlying securities.
The Fund is authorized to invest in put and call options that are traded on
securities exchanges. The Fund may also purchase and write over-the-counter
options ("OTC options") on portfolio securities in negotiated transactions with
the buyers or writers of the options when options on some of the portfolio
securities held by the Fund are not traded on an exchange. The Fund purchases
and writes OTC options only with investment dealers and other financial
institutions (such as commercial banks or savings associations) deemed
creditworthy by the adviser or sub-adviser.
OTC options are two-party contracts with prices and terms negotiated between
buyer and seller. In contrast, exchange-traded options are third-party contracts
with standardized strike prices and expiration dates and are purchased from a
clearing corporation. Exchange-traded options have a continuous liquid market,
while OTC options may not.
Financial Futures and Options on Futures. The Fund may purchase and sell
financial futures contracts and stock index futures contracts to hedge all or a
portion of its portfolio securities against changes in interest rates or
securities prices. Financial futures contracts on securities call for the
delivery of particular securities at a certain time in the future. The seller of
the contract agrees to make delivery of the type of instrument called for in the
contract, and the buyer agrees to take delivery of the instrument at the
specified future time. A financial futures contract on a securities index does
not involve the actual delivery of securities, but merely requires the payment
of a cash settlement based on changes in the securities index.
The Fund may also write call options and purchase put options on financial
futures contracts as a hedge to attempt to protect securities in its portfolio
against decreases in value resulting from anticipated increases in market
interest rates or broad declines in securities prices. When the Fund writes a
call option on a financial futures contract, it is undertaking the obligation of
selling the financial futures contract at a fixed price at any time during a
specified period if the option is exercised. Conversely, as a purchaser of a put
option on a financial futures contract, the Fund is entitled (but not obligated)
to sell a financial futures contract at the fixed price during the life of the
option.
The Fund may also write put options and purchase call options on financial
futures contracts as a hedge against rising purchase prices of securities
eligible for purchase by the Fund. The Fund will use these transactions to
attempt to protect its ability to purchase securities in the future at price
levels existing at the time it enters into the transactions. When the Fund
writes a put option on a futures contract, it is undertaking to buy a particular
futures contract at a fixed price at any time during a specified period if the
option is exercised. As a purchaser of a call option on a futures contract, the
Fund is entitled (but not obligated) to purchase a futures contract at a fixed
price at any time during the life of the option.
The Fund may not purchase or sell financial futures contracts or options on
financial futures contracts if, immediately thereafter, the sum of the amount of
initial margin deposits on the Fund's existing financial futures positions and
premiums paid for related options would exceed 5% of the fair market value of
the Fund's total assets, after taking into account the unrealized profits and
losses on those contracts it has entered into. When the Fund purchases financial
futures contracts, an amount of cash and cash equivalents, equal to the
underlying commodity value of the financial futures contracts (less any related
margin deposits), will be deposited in a segregated account with the Fund's
custodian to collateralize the position and, thereby, insure that the use of
such financial futures contracts is unleveraged.
Risks. When the Fund uses futures and options on futures as hedging
devices, there is a risk that the prices of the securities subject to the
futures contracts may not correlate perfectly with the prices of the
securities in the Fund's portfolio. This may cause the futures contract
and any related options to react differently than the portfolio
securities to market changes. In addition, the adviser and the
sub-adviser could be incorrect in their expectations about the direction
or extent of market factors, such as interest rate and stock price
movements. In these events, the Fund may lose money on the futures
contract or option.
It is not certain that a secondary market for positions in futures
contracts or options will exist at all times. Although the adviser and
sub-adviser will consider liquidity before entering into options
transactions, there is no assurance that a liquid secondary market will
exist for any particular futures contract or option at any particular
time. The Fund's ability to establish and close out futures and options
positions depends on this secondary market.
Repurchase Agreements. Certain securities in which the Fund invests may be
purchased pursuant to repurchase agreements. Repurchase agreements are
arrangements in which banks, broker/dealers, and other recognized financial
institutions sell U.S. government securities to the Fund and agrees at the time
of sale to repurchase them at a mutually agreed upon time and price. To the
extent that the seller does not repurchase the securities from the Fund, the
Fund could receive less than the repurchase price on any sale of such
securities.
When-Issued and Delayed Delivery Transactions. The Fund may purchase securities
on a when-issued or delayed delivery basis. These transactions are arrangements
in which the Fund purchases securities with payment and delivery scheduled for a
future time. The seller's failure to complete these transactions may cause the
Fund to miss a price or yield considered to be advantageous. Settlement dates
may be a month or more after entering into these transactions, and the market
values of the securities purchased may vary from the purchase prices.
The Fund may dispose of a commitment prior to settlement if the adviser and
sub-adviser deem it appropriate to do so. In addition, the Fund may enter into
transactions to sell its purchase commitments to third parties at current market
values and simultaneously acquire other commitments to purchase similar
securities at later dates. The Fund may realize short-term profits or losses
upon the sale of such commitments.
Lending of Portfolio Securities. In order to generate additional income, the
Fund may lend portfolio securities on a short-term or long-term basis, or both,
to broker/dealers, banks, or other institutional borrowers of securities. The
Fund will only enter into loan arrangements with broker/dealers, banks, or other
institutions which the adviser or sub-adviser has determined are creditworthy
under guidelines established by the Trustees, and will receive collateral in the
form of cash or U.S. government securities equal to at least 100% of the value
of the securities loaned at all times.
There is the risk when lending portfolio securities, the securities may not be
available to the Fund on a timely basis and the Fund may, therefore, lose the
opportunity to sell the securities at a desirable price. In addition, in the
event that a borrower of securities would file for bankruptcy or become
insolvent, disposition of the securities may be delayed pending court action.
Temporary Investments. For defensive purposes only, the Fund may invest
temporarily in cash and cash items during times of unusual market conditions and
to maintain liquidity. Cash items may include short-term obligations such as:
o commercial paper rated A-1 or A-2 by S&P, Prime-1 or Prime-2 by
Moody's, or F-1 or F-2 by Fitch;
o obligations of the U.S. government or its agencies or
instrumentalities; and
o repurchase agreements.
Portfolio Turnover. Although the Fund does not intend to invest for the purpose
of seeking short-term profits, securities in the portfolio will be sold whenever
the adviser and sub-adviser believe it is appropriate to do so in light of the
Fund's investment objective, without regard to the length of time a particular
security may have been held. A high portfolio turnover rate may lead to
increased costs and may also result in higher taxes paid by the Fund's
shareholders.
See "Tax Information" in this Prospectus.
Investment Limitations
As a matter of fundamental investment policy, which cannot be changed without
shareholder approval, the Fund will not borrow money directly or through reverse
repurchase agreements (arrangements in which a Fund sells a portfolio instrument
for a percentage of its cash value with an agreement to buy it back on a set
date) or pledge securities except, under certain circumstances, the Fund may
borrow money and engage in reverse repurchase agreements in amounts up to
one-third of the value of their respective total assets and pledge up to 15% of
the value of their respective total assets to secure such borrowings.
DG Investor Series Information
Management of the Trust
Board of Trustees. The Trust is managed by a Board of Trustees. The Trustees are
responsible for managing the Fund's business affairs and for exercising all the
Trust's powers except those reserved for the shareholders. An Executive
Committee of the Board of Trustees handles the Board's responsibilities between
meetings of the Board.
Investment Adviser. Pursuant to an investment advisory contract with the Trust,
investment decisions for the Fund are made by the Fund's investment adviser,
ParkSouth Corporation (the "Adviser"), subject to direction by the Trustees. The
adviser, in consultation with Bennett Lawrence Management, LLC (the
"Sub-Adviser"), continually conducts investment research and supervision for the
Fund and is responsible for the purchase and sale of portfolio instruments.
Advisory Fees. The Fund's Adviser receives an annual investment advisory
fee equal to 1.00% 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 fees at any time at its sole discretion.
Adviser's Background. ParkSouth Corporation is a registered investment
adviser providing investment management services to individuals and
institutional clients. ParkSouth Corporation is a subsidiary of Deposit
Guaranty National Bank (the "Bank"), a national banking association
founded in 1925 which, in turn, is a subsidiary of Deposit Guaranty Corp.
("DGC"). Through its subsidiaries and affiliates, DGC offers a full range
of financial services to the public, including commercial lending,
depository services, cash management, brokerage services, retail banking,
mortgage banking, investment advisory services and trust services. DGC is
listed on the New York Stock Exchange under the symbol "DEP."
The Adviser manages, in addition to the Funds in the DG Investor Series,
$630 million in common trust fund assets. The Adviser (which succeeded to
the investment advisory business of the Bank in 1997), or the Bank, have
served as the adviser to the Trust since May 5, 1992.
As part of its regular banking operations, the Bank may make loans to
public companies. Thus, it may be possible, from time to time, for the
Fund to hold or acquire the securities of issuers which are also lending
clients of the Bank. The lending relationships will not be a factor in the
selection of securities.
Sub-Adviser. Under the terms of a sub-advisory agreement between ParkSouth
Corporation and Bennett Lawrence Management, LLC, the Sub-Adviser will make all
determinations with respect to the investment of assets of the Fund, and shall
take such steps as may be necessary to implement the same, including the
placement of purchase and sale orders on behalf of the Fund.
Sub-Advisory Fees. For its services under the sub-advisory agreement, the
Sub-Adviser receives an annual fee from the Adviser equal to the following:
Maximum Average Aggregate
Sub-Advisory Fee Daily Net Assets of the Fund
.75% on the first $5 million
.65% on the next $5 million
.55% on assets in excess of $10 million
The sub-advisory fee is accrued daily and paid monthly.
Sub-Adviser's Background. Bennett Lawrence Management, LLC, a New York
limited liability company, is registered as an investment adviser with the
SEC. Bennett Lawrence Management, LLC provides investment management
services to client discretionary accounts with assets totalling
approximately $634 million as of December 31, 1996. Its clients are both
individuals and institutions.
S. Van Zandt Schreiber is Chief Portfolio Manager of Bennett Lawrence
Management, LLC and has been with the Bennett Lawrence Management, LLC since the
inception of Bennett Lawrence Management, LLC on August 25, 1995, during which
time he has managed various client discretionary accounts. Prior thereto, Mr.
Schreiber was Managing Director and Senior Growth Portfolio Manager with
Deutsche Morgan Grenfell/C.J. Lawrence, Inc. (1965-1995). Mr. Schreiber has
managed the Fund since September __, 1997 (the Fund's inception date).
Robert W. Deaton is Associate Portfolio Manager of Bennett Lawrence
Management, LLC and has been with the Bennett Lawrence Management, LLC since the
inception of Bennett Lawrence Management, LLC on August 25, 1995, during which
time he has managed various client discretionary accounts. Prior thereto, Mr.
Deaton was a Portfolio Manager and Research Analyst with Deutsche Morgan
Grenfell/C.J. Lawrence, Inc. (1994-1995). Prior to joining Deutsche Morgan
Grenfell/C.J. Lawrence, Inc., Mr. Deaton was the Manager of the Long-Term Growth
Fund for the Tennessee Consolidated Retirement System and in 1993-1994 served as
a Director and the Education Chairman of the Nashville Financial Analysts
Society. Mr. Deaton has managed the Fund since September __, 1997 (the Fund's
inception date).
Distribution of Fund Shares
Federated Securities Corp. is the principal distributor for 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 the Investment Company Act Rule 12b-1 (the "Plan"), the Fund
may pay to the distributor an amount computed at an annual rate of .25% of the
average daily net asset value of the Fund to finance any activity which is
principally intended to result in the sale of shares subject to the Plan. The
distributor may select financial institutions such as banks, fiduciaries,
custodians for public funds, investment advisers, and broker/dealers ("brokers")
to provide distribution and/or administrative services as agents for their
clients or customers.
The distributor may from time to time and for such periods as it deems
appropriate, voluntarily reduce its compensation under the Plan to the extent
the expenses attributable to the shares exceed such lower expense limitations as
the distributor may, by notice to the Trust, voluntarily declare to be
effective.
The distributor will pay financial institutions a fee based upon the shares
subject to the Plan and 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 distributor.
The 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 Plan.
In addition, the Fund has adopted a Shareholder Services Plan (the "Services
Plan") with respect to its shares. Under the Services Plan, financial
institutions will enter into shareholder service agreements with the Fund to
provide administrative support services to their customers who from time to time
may be owners of record or beneficial owners of the shares. In return for
providing these support services, a financial institution may receive payments
from the Fund at a rate not exceeding .15% of the average daily net assets of
the shares beneficially owned by the financial institution's customers for whom
it is holder of record or with whom it has a servicing relationship. These
administrative services may include, but are not limited to, the provision of
personal services and maintenance of shareholder accounts.
The Glass-Steagall Act prohibits a depository institution (such as a commercial
bank or a savings association) from being an underwriter or distributor of most
securities. In the event the Glass-Steagall Act is deemed to prohibit depository
institutions from acting in the administrative capacities described above or
should Congress relax current restrictions on depository institutions, the
Trustees will consider appropriate changes in the services.
Shareholder Servicing Arrangements. The distributor may pay financial
institutions a fee with respect to the average net asset value of shares held by
their customers for providing administrative services. This fee, if paid, will
be reimbursed by the Adviser and not the Fund.
Administration of the Fund
Administrative Services. Federated Administrative Services, which is a
subsidiary of Federated Investors, provides the Fund with the administrative
personnel and services necessary to operate the Fund. Such services include
shareholder servicing and certain legal and accounting services. Federated
Administrative Services provides these at an annual rate as specified below:
Maximum Average Aggregate
Administrative Fee Daily Net Assets of the Trust
.15% on the first $250 million
.125% on the next $250 million
.10% on the next $250 million
.075% on assets in excess of $750 million
The administrative fee received during any fiscal year shall be at least
$100,000 per portfolio. Federated Administrative Services may choose voluntarily
to waive a portion of its fee at any time.
Brokerage Transactions
When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the Sub-Adviser looks for prompt execution of the order at a
favorable price. In working with dealers, the Sub-Adviser will generally utilize
those who are recognized dealers in specific portfolio instruments, except when
a better price and execution of the order can be obtained elsewhere. The
Sub-Adviser makes decisions on portfolio transactions and selects brokers and
dealers subject to review by the Trustees.
Expenses of the Fund
The Fund pays all of its own expenses and its allocable share of Trust expenses.
These expenses include, but are not limited to the cost of: organizing the Trust
and continuing its existence; registering the Trust and its shares; Trustees
fees; meetings of Trustees and shareholders and proxy solicitations therefor;
auditing, accounting, and legal services; investment advisory and administrative
services; custodians, transfer agents, dividend disbursing agents, shareholder
servicing agents, and registrars; issuing, purchasing, repurchasing, and
redeeming shares; reports to government agencies; preparing, printing and
mailing documents to shareholders such as financial statements, prospectuses and
proxies; taxes and commissions; insurance premiums; association membership dues;
and such non-recurring and extraordinary items as may arise.
Net Asset Value
The Fund's net asset value per share fluctuates. It is determined by dividing
the sum of the market value of all securities and all other assets, less
liabilities, by the number of shares outstanding.
The net asset value is determined as of the close of trading (normally 4:00
p.m., Eastern time) on the New York Stock Exchange, 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, Martin Luther King Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Columbus Day, Veterans' Day, Thanksgiving Day, and
Christmas Day.
Investing in the Fund
Share Purchases
Fund shares are sold on days on which the New York Stock Exchange and the
Federal Reserve Wire System are open for business. Fund shares may be ordered by
telephone through procedures established with the Bank in connection with
qualified account relationships. Such procedures may include arrangements under
which certain accounts are swept periodically and amounts exceeding an agreed
upon minimum are invested automatically in Fund shares. The Fund reserves the
right to reject any purchase request.
Through the Bank. To place an order to purchase shares of the Fund, open an
account by calling Deposit Guaranty National Bank at (800) 748-8500. Information
needed to establish the account will be taken over the telephone.
Payment may be made by either check, federal funds or by debiting a customer's
account at the Bank.
Purchase orders must be received by 4:00 p.m. (Eastern time). Payment is
required before 4:00 p.m. (Eastern time) on the next business day in order to
earn dividends for that day.
Minimum Investment Required
The minimum initial investment in the Fund is $250,000. The Fund may waive the
initial minimum investment for employees of Deposit Guaranty Corp. and its
affiliates from time to time. Subsequent minimum investments must be in the
amount of at least $1,000.
Systematic Investment Program
Once an account has been opened, shareholders may add to their investment on a
regular basis in a minimum amount of $1,000. Under this program, funds may be
automatically withdrawn periodically from the shareholder's checking account and
invested in Fund shares. A shareholder may apply for participation in this
program through the Bank.
Certificates and Confirmations
As transfer agent for the Fund, Federated Shareholder Services Company maintains
a share account for each shareholder. Share certificates are not issued unless
requested by contacting the Fund or Federated Shareholder Services Company in
writing.
Detailed confirmations of each purchase and redemption are sent to each
shareholder. Quarterly confirmations are sent to report dividends paid during
the year.
Dividends and Distributions
Dividends are declared quarterly and paid quarterly to all shareholders
invested in the Fund on the record date. All shareholders on the record date are
entitled to the dividend. If shares are redeemed or exchanged prior to the
record date, or purchased after the record date, those shares are not entitled
to that year's dividend.
Distribution of any realized net long-term capital gains will be made at least
once every 12 months. Dividends are automatically reinvested in additional
shares of the Fund on payment dates at the ex-dividend date's net asset value
without a sales charge, unless cash payments are requested by writing to the
Fund or the Bank, as appropriate.
Exchange Privilege
All shareholders of the Fund are shareholders of DG Investor Series, which, in
addition to the Fund, is composed of the following eight portfolios: DG Equity
Fund, DG Opportunity Fund, DG Limited Term Government Income Fund, DG Government
Income Fund, DG Municipal Income Fund, DG International Equity Fund, DG U.S.
Government Money Market Fund and DG Prime Money Market Fund.
Shareholders in any of the Funds have easy access to all of the other Funds.
Exchanging Shares
Shareholders of any Fund in DG Investor Series may exchange shares for the
shares of any other Fund in DG Investor Series. Prior to any exchange, the
shareholder must receive a copy of the current prospectus of the fund into which
an exchange is to be effected. Shares may be exchanged at net asset value, plus
the difference between the sales charge (if any) already paid and any sales
charge of the Fund into which shares are to be exchanged, if higher.
When an exchange is made from a Fund with a sales charge to a Fund with no sales
charge, the shares exchanged and additional shares which have been purchased by
reinvesting dividends on such shares retain the character of the exchanged
shares for purposes of exercising further exchange privileges; thus, an exchange
of such shares for shares of a Fund with a sales charge would be at net asset
value.
Upon receipt of proper instructions and all necessary supporting documents,
shares submitted for exchange will be redeemed at the next-determined net asset
value. Written exchange instructions may require a signature guarantee. Exercise
of this privilege is treated as a sale for federal income tax purposes and,
depending on the circumstances, a short or long-term capital gain or loss may be
realized. The exchange privilege may be terminated at any time. Shareholders
will be notified of the termination of the exchange privilege. A shareholder may
obtain further information on the exchange privilege by calling the Bank.
Telephone exchange instructions may be recorded. If reasonable procedures are
not followed by the Fund, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.
Redeeming Shares
Shares are redeemed at their net asset value next determined after the Bank
receives the redemption request. Redemptions will be made on days on which the
Fund computes its net asset value. Redemption requests cannot be executed on
days on which the New York Stock Exchange is closed or on federal holidays when
wire transfers are restricted. Requests for redemption can be made by telephone
or by mail.
Through the Bank By Telephone. A shareholder who is a customer of the Bank
may redeem shares of the Fund by calling Deposit Guaranty National Bank at (800)
748-8500.
For orders received before 4:00 p.m. (Eastern time), proceeds will normally be
wired the next day to the shareholder's account at the Bank or a check will be
sent to the address of record.
Proceeds from redemption requests received on holidays when wire transfers are
restricted will be wired the following business day. In no event will proceeds
be sent more than seven days after a proper request for redemption has been
received. An authorization form permitting the Fund to accept telephone requests
must first be completed. Authorization forms and information on this service are
available from the Bank. Telephone redemption instructions may be recorded. If
reasonable procedures are not followed by the Fund, it may be liable for losses
due to unauthorized or fraudulent telephone instructions.
In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If such a case should occur, another
method of redemption should be utilized, such as a written request to Federated
Shareholder Services Company or the Bank.
If at any time the Fund determines it necessary to terminate or modify this
method of redemption, shareholders would be promptly notified.
By Mail. Any shareholder may redeem Fund shares by sending a written request to
the Bank. The written request should include the shareholder's name, the Fund
name, the account number, and the share or dollar amount requested, and should
be signed exactly as the shares are registered. If share certificates have been
issued, they should be sent unendorsed with the written request by registered or
certified mail. Shareholders should call the Bank for assistance in redeeming by
mail.
Signatures. Shareholders requesting a redemption of any amount to be sent to an
address other than 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:
o a trust company or commercial bank whose deposits are insured by the
Bank Insurance Fund, which is administered by the Federal Deposit
Insurance Corporation ("FDIC");
o a member of the New York, American, Boston, Midwest, or Pacific
Stock Exchange;
o a savings bank or savings association whose deposits are insured by
the Savings Association Insurance Fund, which is administered by the
FDIC; or
o 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 Federated Shareholder Services Company have adopted standards for
accepting signature guarantees from the above institutions. The Fund may elect
in the future to limit eligible signature guarantors to institutions that are
members of a signature guarantee program. The Fund and Federated Shareholder
Services Company reserve the right to amend these standards at any time without
notice.
Normally, a check for the proceeds is mailed within one business day, but in no
event more than seven days, after receipt of a proper written redemption
request.
Systematic Withdrawal Program
Shareholders who desire to receive payments of a predetermined amount may take
advantage of the Systematic Withdrawal Program. Under this program, Fund shares
are redeemed to provide for periodic withdrawal payments in an amount directed
by the shareholder. Depending upon the amount of the withdrawal payments and the
amount of dividends paid with respect to Fund shares, redemptions may reduce,
and eventually deplete, the shareholder's investment in the Fund. For this
reason, payments under this program should not be considered as yield or income
on the shareholder's investment in the Fund. To be eligible to participate in
this program, a shareholder must have an account value of at least $10,000,
other than retirement accounts subject to required minimum distributions. A
shareholder may apply for participation in this program through the Bank. Due to
the fact that some of the Trust's other portfolios are sold with a sales charge,
it is not advisable for shareholders to be purchasing shares of those portfolios
while participating in this program.
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 $250,000 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 Trust owned by a shareholder gives that shareholder one vote
in Trustee elections and other matters submitted to shareholders for vote. All
shares of each portfolio in the Trust have equal voting rights, except that in
matters affecting only a particular portfolio, only shareholders of that
portfolio are entitled to vote. The Trust is not required to hold annual
shareholder meetings. Shareholder approval will be sought only for certain
changes in the Trust's or the Fund's operation and for election of Trustees
under certain circumstances.
Trustees may be removed by the Trustees or by shareholders at a special meeting.
A special meeting shall be called by the Trustees upon the written request of
shareholders owning at least 10% of the outstanding shares of the Trust entitled
to vote.
Effect Of Banking Laws
The Glass-Steagall Act and other banking laws and regulations presently prohibit
a bank holding company registered under the Bank Holding Company Act of 1956 or
any bank or non-bank affiliate thereof from sponsoring, organizing or
controlling a registered, open-end investment company continuously engaged in
the issuance of its shares, and from issuing, underwriting, selling or
distributing securities in general. Such laws and regulations do not prohibit
such a holding company or bank or non-bank affiliate from acting as investment
adviser, transfer agent or custodian to such an investment company or from
purchasing shares of such a company as agent for and upon the order of their
customer.
Some entities providing services to the Fund are subject to such banking laws
and regulations. They believe, based on the advice of counsel, that they may
perform those services for the Fund contemplated by any agreement entered into
with the Trust without violating the Glass-Steagall Act or other applicable
banking laws or regulations. Changes in either federal or state statutes and
regulations relating to the permissible activities of banks and their
subsidiaries or affiliates, as well as further judicial or administrative
decisions or interpretations of present or future statutes and regulations,
could prevent these entities from continuing to perform all or a part of the
above services. If this happens, the Trustees would consider alternative means
of continuing available investment services. It is not expected that Fund
shareholders would suffer any adverse financial consequences as a result of any
of these occurrences.
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 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
and distributions are received in cash or as additional shares. The Fund will
provide detailed tax information for reporting purposes.
State and Local Taxes
Shareholders are urged to consult their own tax advisers regarding the status of
their accounts under state and local tax laws.
Performance Information
From time to time, the Fund advertises its yield, effective yield and total
return.
Yield represents the annualized rate of income earned on an investment over a
seven-day period. It is the annualized dividends earned during the period on an
investment shown as a percentage of the investment. The effective yield is
calculated similarly to the yield, but when annualized, the income earned by an
investment is assumed to be reinvested daily. The effective yield will be
slightly higher than the yield because of the compounding effect of this assumed
reinvestment.
Advertisements and sales literature may also refer to total return. Total return
represents the change, over a specified period of time, in the value of an
investment in the shares after reinvesting all income distributions. It is
calculated by dividing that change by the initial investment and is expressed as
a percentage.
From time to time, advertisements for the Fund may refer to ratings, rankings,
and other information in certain financial publications and/or compare the
Fund's performance to certain indices.
<PAGE>
Addresses
DG Investor Series
DG Mid Cap Fund Federated Investors Tower
Pittsburgh, PA 15222-3779
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, PA 15222-3779
Investment Adviser
ParkSouth Corporation P.O. Box 1200
Jackson, MS 39215-1200
Sub- Adviser
Bennett Lawrence Management, LLC 757 Third Avenue, 19th Floor
New York, NY 10017
Custodian
State Street Bank and P.O. Box 1713
Trust Company Boston, MA 02266-8600
Transfer Agent and Dividend Disbursing Agent
Federated Shareholder Services Company Federated Investors Tower
Pittsburgh, PA 15222-3779
Independent Auditors
KPMG Peat Marwick LLP One Mellon Bank Center
Pittsburgh, PA 15219
<PAGE>
DG Mid Cap Fund
(A Portfolio of DG Investor Series)
Prospectus
A Portfolio of
DG Investor Series,
An Open-End Management
Investment Company
Prospectus dated September __, 1997
Cusip
G00499-14 (8/97)
DG Mid Cap Fund
(A Portfolio of DG Investor Series)
Statement of Additional Information
This Statement of Additional Information should be read with the
prospectus of DG Mid Cap Fund (the "Fund"), a portfolio of DG Investor
Series (the "Trust"), dated September __, 1997. This Statement is not a
prospectus. You may request a copy of a prospectus or a paper copy of this
Statement, if you have received it electronically, free of charge by
calling 1-800-530-7377.
Federated Investors Tower
Pittsburgh, PA 15222-3779
Statement dated September __, 1997
[GRAPHIC OMITTED]
Federated Securities Corp. is the distributor of the Funds
and is a subsidiary of Federated Investors.
Cusip ______________
G00499-15(8/97)
<PAGE>
1
I
Table of Contents
<PAGE>
General Information About the Fund 1
Investment Objective and Policies 1
Types of Investments 1
Corporate Debt Securities 1
Zero Coupon Convertible Securities 1
Convertible Securities 1
Money Market Instruments 1
Warrants 2
Futures and Options Transactions 2
Repurchase Agreements 4
Reverse Repurchase Agreements 4
When-Issued and Delayed Delivery Transactions 4
Lending of Portfolio Securities 5
Portfolio Turnover 5
Investment Limitations 5
DG Investor Series Management 6
Trust Ownership 10
Trustees' Compensation 10
Trustee Liability 11
Investment Advisory Services 11
Investment Adviser 11
Advisory Fees 11
Sub-Adviser 11
Sub-Advisory Fees 11
Brokerage Transactions 12
Other Services 12
Fund Administration 12
Custodian and Portfolio Accountant 12
Transfer Agent 12
Independent Auditors 12
Purchasing Shares 12
Distribution Plan and Shareholder Services 13
Conversion to Federal Funds 13
Determining Net Asset Value 13
Determining Market Value of Securities 13
Exchange Privilege 13
Requirements for Exchange 13
Making an Exchange 14
Redeeming Shares 14
Redemption in Kind 14
Massachusetts Partnership Law 14
Tax Status 14
The Fund's Tax Status 14
Shareholders' Tax Status 14
Total Return 15
Yield 15
Performance Comparisons 15
Economic and Market Information 15
Appendix 16
<PAGE>
General Information About the Fund
The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated February 7, 1992. The Fund is advised by ParkSouth Corporation
(the "Adviser") and is sub-advised by Bennett Lawrence Management, LLC (the
"Sub-Adviser").
Investment Objective and Policies
The Fund's investment objective is to provide capital appreciation.
Types of Investments
Acceptable investments for the Fund include but are not limited to: convertible
securities, money market instruments, common stocks, preferred stocks, corporate
bonds, notes and put options on stocks.
Corporate Debt Securities
Corporate debt securities may bear fixed, fixed and contingent, or variable
rates of interest. They may involve equity features such as conversion or
exchange rights, warrants for the acquisition of common stock of the same or
different issuer, participations based on revenues, sales, or profits, or the
purchase of common stock in a unit transaction (where corporate debt securities
and common stock are offered as a unit).
Zero Coupon Convertible Securities
Zero coupon convertible securities are debt securities which are issued at a
discount to their face amount and do not entitle the holder to any periodic
payments of interest prior to maturity. Rather, interest earned on zero coupon
convertible securities accretes at a stated yield until the security reaches its
face amount at maturity. Zero coupon convertible securities are convertible into
a specific number of shares of the issuer's common stock. In addition, zero
coupon convertible securities usually have put features that provide the holder
with the opportunity to put the bonds back to the issuer at a stated price
before maturity. Generally, the prices of zero coupon convertible securities may
be more sensitive to market interest rate fluctuations than conventional
convertible securities.
Federal income tax law requires the holder of a zero coupon convertible security
to recognize income with respect to the security prior to the receipt of cash
payments. To maintain its qualification as a regulated investment company and
avoid liability of federal income taxes, the Fund will be required to distribute
income accrued with respect to zero coupon convertible securities which it owns,
and may have to sell portfolio securities (perhaps at disadvantageous times) in
order to generate cash to satisfy these distribution requirements.
Convertible Securities
Convertible securities are fixed income securities which may be exchanged or
converted into a predetermined number of the issuer's underlying common stock at
the option of the holder during a specified time period. Convertible securities
may take the form of convertible preferred stock, convertible bonds or
debentures, units consisting of "usable" bonds and warrants, or a combination of
the features of several of these securities. The investment characteristics of
each convertible security vary widely, which allows convertible securities to be
employed for different investment objectives.
The Fund will exchange or convert the convertible securities held in its
portfolio into shares of the underlying common stock in instances in which, in
the Adviser's or Sub-Adviser's opinions, the investment characteristics of the
underlying common shares will assist the Fund in achieving its investment
objective. Otherwise, the Fund may hold or trade convertible securities. In
selecting convertible securities for the Funds, the Adviser or the Sub-Adviser
evaluate the investment characteristics of the convertible security as a fixed
income instrument and the investment potential of the underlying equity security
for capital appreciation. In evaluating these matters with respect to a
particular convertible security, the Adviser or Sub-Adviser consider numerous
factors, including the economic and political outlook, the value of the security
relative to other investment alternatives, trends in the determinants of the
issuer's profits, and the issuer's management capability and practices.
Money Market Instruments
The Fund may invest in money market instruments of domestic and foreign banks
and savings associations if they have capital, surplus, and undivided profits of
over $100,000,000, or if the principal amount of the instrument is insured in
full by the Bank Insurance Fund or the Savings Association Insurance Fund, both
of which are administered by the Federal Deposit Insurance Corporation.
Warrants
Warrants are basically options to purchase common stock at a specific price
(usually at a premium above the market value of the optioned common stock at
issuance) valid for a specific period of time. Warrants may have a life ranging
from less than a year to twenty years or may be perpetual. However, most
warrants have expiration dates after which they are worthless. In addition, if
the market price of the common stock does not exceed the warrant's exercise
price during the life of the warrant, the warrant will expire as worthless.
Warrants have no voting rights, pay no dividends, and have no rights with
respect to the assets of the corporation issuing them. The percentage increase
or decrease in the market price of the warrant may tend to be greater than the
percentage increase or decrease in the market price of the optioned common
stock.
Futures and Options Transactions
As a means of reducing fluctuations in the net asset value of shares of the Fund
by hedging all or a portion of its portfolio, and in the case of put and call
options on portfolio securities, to increase its current income, the Fund may
buy and sell financial futures and stock index futures contracts, buy and write
put options on portfolio securities and listed put options on futures contracts,
and write and buy call options on portfolio securities and on futures contracts.
The Fund will maintain its position in securities, option rights, and segregated
cash subject to puts and calls until the options are exercised, closed, or have
expired. An option position on financial futures contracts may be closed out
only on an exchange which provides a secondary market from options of the same
series.
Futures Contracts
A futures contract is a firm commitment between the seller, who agrees to
make delivery of the specific type of security called for in the contract
("going short"), and the buyer, who agrees to take delivery of the
security ("going long") at a certain time in the future.
When the Fund purchases futures contracts, an amount of cash and cash
equivalents, equal to the underlying commodity value of the futures
contracts (less any related margin deposits), will be deposited in a
segregated account with the Fund's custodian (or the broker, if legally
permitted) to collateralize the position and thereby insure that the use
of such futures contract is unleveraged.
Financial futures contracts call for the delivery of particular debt
instruments at a certain time in the future. The seller of the contract
agrees to make delivery of the type of instrument called for in the
contract and the buyer agrees to take delivery of the instrument at the
specified future time.
Stock index futures contracts are based on indexes that reflect the market
value of common stock of the firms included in the indexes. An index
futures contract is an agreement pursuant to which two parties agree to
take or make delivery of an amount of cash equal to the differences
between the value of the index at the close of the last trading day of the
contract and the price at which the index contract was originally written.
Put Options on Financial Futures Contracts
The Fund may purchase listed put options on financial futures contracts.
Unlike entering directly into a futures contract, which requires the
purchaser to buy a financial instrument on a set date at a specified
price, the purchase of a put option on a futures contract entitles (but
does not obligate) its purchaser to decide on or before a future date
whether to assume a short position at the specified price.
Generally, if the hedged portfolio securities decrease in value during the
term of an option, the related futures contracts will also decrease in
value and the option will increase in value. In such an event, the Fund
will normally close out its option by selling identical options. If the
hedge is successful, the proceeds received by the Fund upon the sale of
the second option will be large enough to offset both the premiums paid by
the Fund for the original option plus the decrease in value of the hedged
securities.
Alternatively, the Fund may exercise its put options to close out the
position. To do so, they would simultaneously enter into a futures
contract of the type underlying the option (for a price less than the
strike price of the option) and exercise the option. The Fund would then
deliver the futures contract in return for payment of the strike price. If
the Fund neither closes out nor exercise an option, the option will expire
on the date provided in the option contract, and only the premium paid for
the contract will be lost.
When the Fund sells a put on a futures contract, it receives a cash
premium which can be used in whatever way is deemed most advantageous to
the Fund. In exchange for such premium, the Fund grants to the purchaser
of the put the right to receive from the Fund, at the strike price, a
short position in such futures contract, even though the strike price upon
exercise of the option is greater than the value of the futures position
received by such holder. If the value of the underlying futures position
is not such that exercise of the option would be profitable to the option
holder, the option will generally expire without being exercised. The Fund
has no obligation to return premiums paid to it whether or not the option
is exercised. It will generally be the policy of the Fund, in order to
avoid the exercise of an option sold by it, to cancel its obligation under
the option by entering into a closing purchase transaction, if available,
unless it is determined to be in the Fund's interest to deliver the
underlying futures position. A closing purchase transaction consists of
the purchase by the Fund of an option having the same term as the option
sold by the Fund, and has the effect of canceling the Fund's position as a
seller. The premium which the Fund will pay in executing a closing
purchase transaction may be higher than the premium received when the
option was sold, depending in large part upon the relative price of the
underlying futures position at the time of each transaction.
Call Options on Financial Futures Contracts
In addition to purchasing put options on futures, the Funds may write
listed call options on futures contracts to hedge their portfolios. When
the Fund writes a call option on a futures contract, they are undertaking
the obligation of assuming a short futures position (selling a futures
contract) at the fixed strike price at any time during the life of the
option if the option is exercised. As stock prices fall, causing the
prices of futures to go down, the Fund's obligations under a call option
on a future (to sell a futures contract) costs less to fulfill, causing
the value of the Fund's call option positions to increase.
In other words, as the underlying futures price goes down below the strike
price, the buyer of the option has no reason to exercise the call, so that
the Fund keeps the premium received for the options. This premium can
substantially offset the drop in value of the Fund's fixed income or
indexed portfolio which are occurring as interest rates rise.
Prior to the expiration of a call written by the Fund, or exercise of it
by the buyer, the Fund may close out the option by buying an identical
option. If the hedge is successful, the cost of the second option will be
less than the premium received by the Fund for the initial option. The net
premium income of the Fund will then substantially offset the decrease in
value of the hedged securities.
When the Fund purchases a call on a financial futures contract, it
receives in exchange for the payment of a cash premium the right, but not
the obligation, to enter into the underlying futures contract at a strike
price determined at the time the call was purchased, regardless of the
comparative market value of such futures position at the time the option
is exercised. The holder of a call option has the right to receive a long
(or buyer's) position in the underlying futures contract.
The Fund will not maintain open positions in futures contracts it has sold
or call options they have written on futures contracts if, in the
aggregate, the value of the open positions (marked to market) exceeds the
current market value of its securities portfolio plus or minus the
unrealized gain or loss on those open positions, adjusted for the
correlation of volatility between the hedged securities and the futures
contracts. If this limitation is exceeded at any time, the Fund will take
prompt action to close out a sufficient number of open contracts to bring
their open futures and options positions within this limitation.
"Margin" in Futures Transactions
Unlike the purchase or sale of a security, the Fund does not pay or
receive money upon the purchase or sale of a futures contract. Rather, the
Fund is required to deposit an amount of "initial margin" in cash or U.S.
Treasury bills with the custodian (or the broker, if legally permitted).
The nature of initial margin in futures transactions is different from
that of margin in securities transactions in that initial margin in
futures transactions does not involve the borrowing of funds by the Fund
to finance the transactions. Initial margin is in the nature of a
performance bond or good faith deposit on the contract which is returned
to the Fund upon termination of the futures contract, assuming all
contractual obligations have been satisfied.
A futures contract held by the Fund is valued daily at the official
settlement price of the exchange on which it is traded. Each day the Fund
pays or receives cash, called "variation margin," equal to the daily
change in value of the futures contract. This process is known as "marking
to market." Variation margin does not represent a borrowing or loan by the
Fund but is instead settlement between the Fund and the broker of the
amount one would owe the other if the futures contract expired. In
computing its daily net asset value, the Fund will mark to market their
open futures positions.
The Fund is also required to deposit and maintain margin when they write
call options on futures contracts.
Purchasing and Writing Put Options on Portfolio Securities
The Fund may purchase and write put options on portfolio securities. The
purchase of a put option gives the Fund, in return for a premium, the
right to sell the underlying security to the writer (seller) at a
specified price during the term of the option. When the Fund writes a put,
it receives a premium and give the purchaser of the put the right to sell
the underlying security to the Fund at the exercise price at any time
during the option period.
Writing and Purchasing Covered Call Options on Portfolio Securities
The Fund may write and purchase call options. As writer of a call option,
the Fund has the obligation upon exercise of the option during the option
period to deliver the underlying security upon payment of the exercise
price. The Fund may only sell call options either on securities held in
its portfolio or on securities which they have the right to obtain without
payment of further consideration (or has segregated cash in the amount of
any additional consideration). As the purchaser of a call option, the Fund
has the right to purchase common stock at a specific price (usually at a
premium above the market value of the optioned security at the date the
option is issued) valid for a specified period of time. If the market
price of the security does not exceed the option's exercise price during
the life of the option, the option will expire as worthless. The
percentage increase or decrease in the market price of the option may tend
to be greater than the percentage increase or decrease of the market price
of the optioned security.
Repurchase Agreements
The Fund or its custodian will take possession of the securities subject to
repurchase agreements and these securities will be marked to market daily. To
the extent that the original seller does not repurchase the securities from the
Fund, the Fund could receive less than the repurchase price on any sale of such
securities. In the event that such a defaulting seller filed for bankruptcy or
became insolvent, disposition of such securities by the Fund might be delayed
pending court action. The Fund believes that under the regular procedures
normally in effect for custody of the Fund's portfolio securities subject to
repurchase agreements, a court of competent jurisdiction would rule in favor of
the Fund and allow retention or disposition of such securities. The Fund will
only enter into repurchase agreements with banks and other recognized financial
institutions, such as broker/dealers, which are found by the Adviser or
Sub-Adviser to be creditworthy pursuant to guidelines established by the
Trustees.
Reverse Repurchase Agreements
The Fund may also enter into reverse repurchase agreements. These transactions
are similar to borrowing cash. In reverse repurchase agreements, the Fund
transfers possession of a portfolio instrument to another person, such as a
financial institution, broker, or dealer, in return for a percentage of the
instrument's market value in cash, and agree that on a stipulated date in the
future the Fund will repurchase the portfolio instrument by remitting the
original consideration plus interest at an agreed upon rate.
When effecting reverse repurchase agreements, liquid assets of the Fund, in a
dollar amount sufficient to make payment for the obligations to be purchased,
are segregated at the trade date. These securities are marked to market daily
and are maintained until the transaction is settled.
The use of reverse repurchase agreements may enable the Fund to avoid selling
portfolio instruments at a time when a sale may be deemed to be disadvantageous,
but the ability to enter into reverse repurchase agreements does not ensure that
the Fund will be able to avoid selling portfolio instruments at a
disadvantageous time.
When-Issued and Delayed Delivery Transactions
These transactions are made to secure what is considered to be an advantageous
price or yield for the Fund. No fees or other expenses, other than normal
transaction costs, are incurred. However, liquid assets of the Fund sufficient
to make payment for the securities to be purchased are segregated on the Fund's
records at the trade date. These assets are marked to market daily and are
maintained until the transaction has been settled. The Fund does not intend to
engage in when-issued and delayed delivery transactions to an extent that would
cause the segregation of more than 20% of the total value of their respective
assets.
<PAGE>
Lending of Portfolio Securities
The collateral received when the Fund lend portfolio securities must be valued
daily and, should the market value of the loaned securities increase, the
borrower must furnish additional collateral to the Fund. During the time
portfolio securities are on loan, the borrower pays the Fund any dividends or
interest paid on such securities. Loans are subject to termination at the option
of the Fund or the borrower. The Fund may pay reasonable administrative and
custodial fees in connection with a loan and may pay a negotiated portion of the
interest earned on the cash or equivalent collateral to the borrower or placing
broker.
Portfolio Turnover
The Fund does not intend to invest for the purpose of seeking short-term
profits. Securities in the portfolio will be sold whenever the Adviser or
Sub-Adviser believe it is appropriate to do so in light of the Fund's investment
objective, without regard to the length of time a particular security may have
been held. The Adviser or Sub-Adviser does not anticipate that the Fund's
portfolio turnover rate will exceed 100%.
Investment Limitations
Selling Short and Buying on Margin
The Fund will not sell any securities short or purchase any securities on
margin, but may obtain such short-term credits as may be necessary for
clearance of purchases and sales of portfolio securities. The deposit or
payment by the Fund of initial or variation margin in connection with
financial futures contracts or related options transactions is not
considered the purchase of a security on margin.
Issuing Senior Securities and Borrowing Money
The Fund will not issue senior securities except that it may borrow money
directly or through reverse repurchase agreements as a temporary measure
for extraordinary or emergency purposes and then only in amounts not in
excess of one-third of the value of its total assets; provided that, while
borrowings exceed 5% of each Fund's total assets, any such borrowings will
be repaid before additional investments are made. The Fund will not borrow
money or engage in reverse repurchase agreements for investment leverage
purposes.
Concentration of Investments
The Fund will not purchase securities if, as a result of such purchase,
25% or more of the value of its total assets would be invested in any one
industry. The Fund may at times invest 25% or more of the value of its
total assets in securities issued or guaranteed by the U.S. government,
its agencies or instrumentalities.
Investing in Commodities
The Fund will not purchase or sell commodity contracts, or commodity
futures contracts except that it may purchase and sell financial futures
and stock index futures contracts and related options.
Investing in Real Estate
The Fund will not purchase or sell real estate, including limited
partnership interests in real estate, although it may invest in securities
secured by real estate or interests in real estate.
Lending Cash or Securities
The Fund will not lend any of its assets except portfolio securities
except that it may purchase or hold corporate or government bonds,
debentures, notes, certificates of indebtedness or other debt securities
of an issuer, repurchase agreements, or other transactions which are
permitted by the Fund's investment objective and policies or the Trust's
Declaration of Trust.
Underwriting
The Fund will not underwrite any issue of securities or participate in the
marketing of securities of other issuers, except as the Fund may be deemed
to be an underwriter under the Securities Act of 1933 in connection with
the sale of securities in accordance with the Fund's investment objective,
policies, and limitations.
Pledging Assets
The Fund will not mortgage, pledge, or hypothecate any assets except to
secure permitted borrowings. In those cases, the Fund may pledge assets
having a market value not exceeding the lesser of the dollar amounts
borrowed or 15% of the value of total assets at the time of the pledge.
For purposes of this limitation, the following are not deemed to be
pledges: margin deposits for the purchase and sale of financial futures
contracts and related options, and segregation or collateral arrangements
made in connection with options activities or the purchase of securities
on a when-issued basis.
Diversification of Investments
With respect to 75% of the value of its assets, the Fund will not purchase
the securities of any issuer (other than cash, cash items, or securities
issued or guaranteed by U.S. government, its agencies or
instrumentalities) if, as a result, more than 5% of the value of the
Fund's its total assets would be invested in the securities of that
issuer. Also, the Fund will not purchase more than 10% of the outstanding
voting securities of any one issuer.
Except as noted, 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 changes in these limitations become effective.
Investing in Illiquid Securities
The Fund will not invest more than 15% of the value of its net assets in
illiquid securities, including repurchase agreements providing for
settlement in more than seven days after notice; over-the-counter options;
and certain restricted securities not determined by the Trustees to be
liquid.
Investing in Securities of Other Investment Companies
The Fund will limit their investments in other investment companies to no
more than 3% of the total outstanding voting stock of any investment
company, will not invest more than 5% of its total assets in any one
investment company, or invest more than 10% of its total assets in
investment companies in general. The Funds will purchase securities of
closed end investment companies only in open-market transactions involving
only customary broker's commissions. However, these limitations are not
applicable if the securities are acquired in a merger, consolidation, or
acquisition of assets. The Fund will invest in other investment companies
primarily for the purpose of investing its short-term cash on a temporary
basis.
Except with respect to borrowing money, if a percentage limitation is adhered to
at the time of investment, a later increase or decrease in percentage resulting
from any change in value or net assets will not result in a violation of such
restriction.
For the purposes of its policies and limitations, the Fund considers
certificates of deposit and demand and time deposits issued by a U.S. branch of
a domestic bank or savings association having capital, surplus, and undivided
profits in excess of $100,000,000 at the time of investment to be "cash items."
DG Investor Series Management
Officers and Trustees are listed with their addresses, birthdates, present
positions with DG Investor Series, and principal occupations.
John F. Donahue@*
Federated Investors Tower
Pittsburgh, PA
Birthdate: July 28, 1924
Chairman and Trustee
Chairman and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; Chairman and Director, Federated Research
Corp. and Federated Global Research Corp.; Chairman, Passport Research, Ltd.;
Chief Executive Officer and Director or Trustee of the Funds.
<PAGE>
Thomas G. Bigley
15 Old Timber Trail
Pittsburgh, PA
Birthdate: February 3, 1934
Trustee
Chairman of the Board, Children's Hospital of Pittsburgh; formerly, Senior
Partner, Ernst & Young LLP; Director, MED 3000 Group, Inc.; Director, Member of
Executive Committee, University of Pittsburgh; Director or Trustee of the Funds.
John T. Conroy, Jr.
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL
Birthdate: June 23, 1937
Trustee
President, Investment Properties Corporation; Senior Vice-President, John
R. Wood and Associates, Inc., Realtors; Partner or Trustee in private real
estate ventures in Southwest Florida; formerly, President, Naples Property
Management, Inc. and Northgate Village Development Corporation; Director or
Trustee of the Funds.
William J. Copeland
One PNC Plaza - 23rd Floor
Pittsburgh, PA
Birthdate: July 4, 1918
Trustee
Director and Member of the Executive Committee, Michael Baker, Inc.; formerly,
Vice Chairman and Director, PNC Bank, N.A., and PNC Bank Corp.; Director, Ryan
Homes, Inc.; Director or Trustee of the Funds.
James E. Dowd
571 Hayward Mill Road
Concord, MA
Birthdate: May 18, 1922
Trustee
Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director of the
Funds.
Lawrence D. Ellis, M.D.*
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA
Birthdate: October 11, 1932
Trustee
Professor of Medicine, University of Pittsburgh; Medical Director, University of
Pittsburgh Medical Center - Downtown; Member, Board of Directors, University of
Pittsburgh Medical Center; formerly, Hematologist, Oncologist, and Internist,
Presbyterian and Montefiore Hospitals; Director or Trustee of the Funds.
<PAGE>
Edward L. Flaherty, Jr.@
Miller, Ament, Henny & Kochuba
205 Ross Street
Pittsburgh, PA
Birthdate: June 18, 1924
Trustee
Attorney of Counsel, Miller, Ament, Henny & Kochuba; Director, Eat'N Park
Restaurants, Inc.; formerly, Counsel, Horizon Financial, F.A., Western Region;
Director or Trustee of the Funds.
Edward C. Gonzales*
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
President, Treasurer and Trustee
Vice Chairman, Treasurer, and Trustee, Federated Investors; Vice President,
Federated Advisers, Federated Management, Federated Research, Federated Research
Corp., Federated Global Research Corp. and Passport Research, Ltd.; Executive
Vice President and Director, Federated Securities Corp.; Trustee, Federated
Shareholder Services Company; Trustee or Director of some of the Funds;
President, Executive Vice President and Treasurer of some of the Funds.
Peter E. Madden
One Royal Palm Way
100 Royal Palm Way
Palm Beach, FL
Birthdate: March 16, 1942
Trustee
Consultant; Former State Representative, Commonwealth of Massachusetts;
formerly, President, State Street Bank and Trust Company and State Street Boston
Corporation; Director or Trustee of the Funds.
Gregor F. Meyer
203 Kensington Ct.
Pittsburgh, PA
Birthdate: October 6, 1926
Trustee
Former Attorney, Member of Miller, Ament, Henny & Kochuba; Chairman, Meritcare,
Inc.; Director, Eat'N Park Restaurants, Inc.; Director or Trustee of the Funds.
John E. Murray, Jr., J.D., S.J.D.
President, Duquesne University
Pittsburgh, PA
Birthdate: December 20, 1932
Trustee
President, Law Professor, Duquesne University; Consulting Partner, Mollica and
Murray; Director or Trustee of the Funds.
<PAGE>
Wesley W. Posvar
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA
Birthdate: September 14, 1925
Trustee
Professor, International Politics; Management Consultant; Trustee, Carnegie
Endowment for International Peace, RAND Corporation, Online Computer Library
Center, Inc., National Defense University and U.S. Space Foundation; President
Emeritus, University of Pittsburgh; Founding Chairman, National Advisory Council
for Environmental Policy and Technology, Federal Emergency Management Advisory
Board and Czech Management Center, Prague; Director or Trustee of the Funds.
Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA
Birthdate: June 21, 1935
Trustee
Public Relations/Marketing/Conference Planning; Director or Trustee of the
Funds.
J. Christopher Donahue
Federated Investors Tower
Pittsburgh, PA
Birthdate: April 11, 1949
Executive Vice President
President and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; President and Director, Federated Research
Corp. and Federated Global Research Corp.; President, Passport Research, Ltd.;
Trustee, Federated Shareholder Services Company, and Federated Shareholder
Services; Director, Federated Services Company; President or Executive Vice
President of the Funds; Director or Trustee of some of the Funds. Mr. Donahue is
the son of John F. Donahue, Chairman and Trustee of the Company.
John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 26, 1938
Executive Vice President , Secretary and Treasurer
Executive Vice President, Secretary, and Trustee, Federated Investors; Trustee,
Federated Advisers, Federated Management, and Federated Research; Director,
Federated Research Corp. and Federated Global Research Corp.; Trustee, Federated
Shareholder Services Company; Director, Federated Services Company; President
and Trustee, Federated Shareholder Services; Director, Federated Securities
Corp.; Executive Vice President and Secretary of the Funds; Treasurer of some of
the Funds.
Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 17, 1923
Vice President
Executive Vice President and Trustee, Federated Investors; Chairman and
Director, Federated Securities Corp.; President or Vice President of some of the
Funds; Director or Trustee of some of the Funds.
<PAGE>
Charles L. Davis, Jr.
Federated Investors Tower
Pittsburgh, PA
Birthdate: March 23, 1960
Vice President and Assistant Treasurer
Vice President and Assistant Treasurer of some of the Funds.
* This Trustee is deemed to be an "interested person" as defined in the
Investment Company Act of 1940.
@ Member of the Executive Committee. The Executive Committee of the
Board of Trustees handles the responsibilities of the Board between
meetings of the Board.
As referred to in the list of Trustees and Officers, "Funds" includes the
following investment companies:
111 Corcoran Funds; Arrow Funds; Automated Government Money Trust;
Blanchard Funds; Blanchard Precious Metals Fund, Inc.; Cash Trust Series II;
Cash Trust Series, Inc. ; DG Investor Series; Edward D. Jones & Co. Daily
Passport Cash Trust; Federated Adjustable Rate U.S. Government Fund, Inc.;
Federated American Leaders Fund, Inc.; Federated ARMs Fund; Federated Equity
Funds; Federated Equity Income Fund, Inc.; Federated Fund for U.S. Government
Securities, Inc.; Federated GNMA Trust; Federated Government Income Securities,
Inc.; Federated Government Trust; Federated High Income Bond Fund, Inc.;
Federated High Yield Trust; Federated Income Securities Trust; Federated Income
Trust; Federated Index Trust; Federated Institutional Trust; Federated Insurance
Series; Federated Investment Portfolios; Federated Investment Trust; Federated
Master Trust; Federated Municipal Opportunities Fund, Inc.; Federated Municipal
Securities Fund, Inc.; Federated Municipal Trust; Federated Short-Term Municipal
Trust; Federated Short-Term U.S. Government Trust; Federated Stock and Bond
Fund, Inc.; Federated Stock Trust; Federated Tax-Free Trust; Federated Total
Return Series, Inc.; Federated U.S. Government Bond Fund; Federated U.S.
Government Securities Fund: 1-3 Years; Federated U.S. Government Securities
Fund: 2-5 Years; Federated U.S. Government Securities Fund: 5-10 Years;
Federated Utility Fund, Inc.; First Priority Funds; Fixed Income Securities,
Inc.; High Yield Cash Trust; Intermediate Municipal Trust; International Series,
Inc.; Investment Series Funds, Inc.; Investment Series Trust; Liberty Term
Trust, Inc. - 1999; Liberty U.S. Government Money Market Trust; Liquid Cash
Trust; Managed Series Trust; Money Market Management, Inc.; Money Market
Obligations Trust; Money Market Obligations Trust II; Money Market Trust;
Municipal Securities Income Trust; Newpoint Funds; Peachtree Funds; RIMCO
Monument Funds; Targeted Duration Trust; Tax-Free Instruments Trust; The
Planters Funds; The Starburst Funds; The Starburst Funds II; The Virtus Funds;
Trust for Financial Institutions; Trust for Government Cash Reserves; Trust for
Short-Term U.S. Government Securities; Trust for U.S. Treasury Obligations;
Wesmark Funds; and World Investment Series, Inc. Trust Ownership
Officers and Trustees as a group own less than 1% of the Fund`s outstanding
shares.
Trustees' Compensation
Name , Aggregate
Position With Compensation From
Trust Trust+
John F. Donahue, $0
Chairman and Trustee
Thomas G. Bigley, $_____
Trustee
John T. Conroy, Jr., $_____
Trustee
William J. Copeland, $_____
Trustee
James E. Dowd, $_____
Trustee
<PAGE>
Lawrence D. Ellis, M.D., $_____
Trustee
Edward L. Flaherty, Jr., $_____
Trustee
Edward C. Gonzales, $0
President, Treasurer and Trustee
Peter E. Madden, $_____
Trustee
Gregor F. Meyer, $_____
Trustee
John E. Murray, Jr., $_____
Trustee
Wesley W. Posvar, $_____
Trustee
Marjorie P. Smuts, $_____
Trustee
+The aggregate compensation is provided for the Trust which is comprised of
nine portfolios. Information is furnished for the fiscal year ended
February 28, 1997, and the seven portfolios that were effective as of that
date.
Trustee Liability
The Trust's Declaration of Trust provides that the Trustees will only be liable
for their own willful defaults. If reasonable care has been exercised in the
selection of officers, agents, employees, or investment advisers, a Trustee
shall not be liable for any neglect or wrong doing of any such person. However,
they are not protected against any liability to which they would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of their office.
Investment Advisory Services
Investment Adviser
The Fund's investment adviser is ParkSouth Corporation (the "Adviser"), a
subsidiary of Deposit Guaranty National Bank, a national banking association
founded in 1925 which, in turn, is a subsidiary of Deposit Guaranty Corp. 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. Because
of the internal controls maintained by Deposit Guaranty National Bank to
restrict the flow of non-public information, Fund investments are typically made
without any knowledge of Deposit Guaranty National Bank's or its affiliates'
lending relationships with an issuer. Advisory Fees
For its advisory services, the Adviser receives an annual investment advisory
fee as described in the prospectus.
Sub-Adviser
The Fund's sub-adviser is Bennett Lawrence Management, LLC (the "Sub-Adviser"),
a New York limited liability company.
Sub-Advisory Fees
For its sub-advisory services, the Sub-Adviser receives an annual sub-advisory
fee as described in the prospectus.
<PAGE>
Brokerage Transactions
When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the Sub-Adviser looks for prompt execution of the order at a
favorable price. In working with dealers, the Sub-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
Sub-Adviser makes decisions on portfolio transactions and selects brokers and
dealers subject to guidelines established by the Trustees. The Sub-Adviser may
select brokers and dealers who offer brokerage and research services. These
services may be furnished directly to the Fund or to the Sub-Adviser and may
include: advice as to the advisability of investing in securities; security
analysis and reports; economic studies; industry studies; receipt of quotations
for portfolio evaluations; and similar services. Research services provided by
brokers and dealers may be used by the Sub-Adviser or its affiliates in advising
the Fund and other accounts. To the extent that receipt of these services may
supplant services for which the Sub-Adviser or its affiliates might otherwise
have paid, it would tend to reduce their expenses. The Sub-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.
The Fund has adopted certain procedures incorporating the standards of Rule
17e-1 of the Investment Company Act of 1940, which require that the commissions
paid to affiliated broker-dealers of the Sub-Adviser must be reasonable and fair
compared to the commission, fee, or other remuneration received, or to be
received by other brokers in connection with comparable transactions involving
similar securities during a comparable period of time.
Although investment decisions for the Fund are made independently from those of
the other accounts managed by the Sub-Adviser, investments of the type the Fund
may make may also be made by those other accounts. When the Fund and one or more
other accounts managed by the Sub-Adviser are prepared to invest in, or desire
to dispose of, the same security, available investments or opportunities for
sales will be allocated in a manner believed by the Sub-Adviser to be equitable
to each. In some cases, this procedure may adversely affect the price paid or
received by the Fund or the size of the position obtained or disposed of by the
Fund. In other cases, however, it is believed that coordination and the ability
to participate in volume transactions will be to the benefit of the Fund.
Other Services
Fund Administration
Federated Administrative Services, a subsidiary of Federated Investors, provides
administrative personnel and services to the Fund for a fee as described in the
prospectus.
Custodian and Portfolio Accountant
State Street Bank and Trust Company, Boston, Massachusetts, is custodian for the
securities and cash of the Fund. Federated Services Company, Pittsburgh,
Pennsylvania, provides certain accounting and recordkeeping services with
respect to the Fund's portfolio investments. The fee paid for this service is
based upon the level of the Fund's average net assets for the period plus
out-of-pocket expenses.
Transfer Agent
Federated Services Company, through its registered transfer agent, Federated
Shareholder Services Company, maintains all necessary shareholder records. For
its services, the transfer agent receives a fee based on the size, type and
number of accounts and transactions made by shareholders.
Independent Auditors
The independent auditors for the Fund are KPMG Peat Marwick LLP, Pittsburgh,
Pennsylvania.
Purchasing Shares
Shares of the Fund are sold at their net asset value next determined after an
order is received on days the New York Stock Exchange and Federal Reserve Wire
System are open for business. The procedure for purchasing shares is explained
in the prospectus under "Investing in the Fund."
<PAGE>
Distribution and Shareholder Services Plans
These arrangements permit the payment of fees to financial institutions, the
distributor, and Federated Shareholder Services, to stimulate distribution
activities and to cause services to be provided to shareholders by a
representative who has knowledge of the shareholder's particular circumstances
and goals. These activities and services may include, but are not limited to:
marketing efforts; providing office space, equipment, telephone facilities, and
various clerical, supervisory, computer, and other personnel as necessary or
beneficial to establish and maintain shareholder accounts and records;
processing purchase and redemption transactions and automatic investments of
client account cash balances; answering routine client inquiries; and assisting
clients in changing dividend options, account designations and addresses. By
adopting the Plan, the Trustees expect that the Fund will be able to achieve a
more predictable flow of cash for investment purposes and to meet redemptions.
This will facilitate more efficient portfolio management and assist the Fund in
pursuing its investment objectives. By identifying potential investors whose
needs are served by the Fund's objectives, and properly servicing these
accounts, it may be possible to curb sharp fluctuations in rates of redemptions
and sales. Other benefits, which may be realized under either arrangement, may
include: (1) providing personal services to shareholders; (2) investing
shareholder assets with a minimum of delay and administrative detail; (3)
enhancing shareholder recordkeeping systems; and (4) responding promptly to
shareholders' requests and inquiries concerning their accounts.
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. Deposit Guaranty National Bank
(the "Bank"), as well as Federated Shareholder Services Company, act as the
shareholder's agent in depositing checks and converting them to federal funds.
Determining Net Asset Value
Net asset value generally changes each day. The days on which net asset value is
calculated by the Fund are described in the prospectus.
Determining Market Value of Securities
Market values of the Fund's securities, other than options, are determined as
follows:
o for equity securities, according to the last sale price in the market
in which they are primarily traded (either national securities exchange
or the OTC market), if available;
o in the absence of recorded sales for equity securities, according to
the mean between the last closing bid and asked prices;
o according to the prices provided by an independent pricing service if
available, or at fairmarket value as determined in good faith by the
Trustees; or
o for short-term obligations with remaining maturities of 60 days or less
at the time of purchase, at amortized cost, unless the Trustees
determine that particular circumstances of the security indicate
otherwise.
Prices provided by independent pricing services may be determined without
relying exclusively on quoted prices and may consider: institutional trading in
similar groups of securities, yield, quality, coupon rate, maturity, type of
issue, trading characteristics, and other market data. Exchange Privilege
Requirements for Exchange
Before the exchange, the shareholder must receive a prospectus of the fund for
which the exchange is being made. This privilege is available to shareholders
resident in any state in which the fund shares being acquired may be sold. Upon
receipt of proper instructions and required supporting documents, shares
submitted for exchange are redeemed and the proceeds invested in shares of the
other fund. Further information on the exchange privilege may be obtained by
calling the Fund.
<PAGE>
Making an Exchange
Instructions for exchanges may be given in writing. Written instructions may
require a signature guarantee. Redeeming Shares Shares of the Fund are redeemed
at the next computed net asset value after the Bank receive the redemption
request. Redemption procedures are explained in the prospectus under "Redeeming
Shares." Redemption requests cannot be executed on days on which the New York
Stock Exchange is closed or on federal holidays when wire transfers are
restricted. Although State Street Bank does not charge for telephone
redemptions, it reserves the right to charge a fee for the cost of
wire-transferred redemptions of less than $5,000.
Redemption in Kind
Although the Fund intends to redeem shares in cash, it reserves the right under
certain circumstances to pay the redemption price in whole or in part by a
distribution of securities from the Fund's portfolio. Redemption in kind will be
made in conformity with applicable Securities and Exchange Commission rules,
taking such securities at the same value employed in determining net asset value
and selecting the securities in a manner the Trustees determine to be fair and
equitable. The Fund has elected to be governed by Rule 18f-1 of the Investment
Company Act of 1940 under which the Fund 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. Massachusetts Partnership Law
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect its
shareholders, the Trust has filed legal documents with Massachusetts that
expressly disclaim the liability of its shareholders for acts or obligations of
the Trust. These documents require notice of this disclaimer to be given in each
agreement, obligation, or instrument the Trust or its Trustees enter into or
sign.
In the unlikely event a shareholder is held personally liable for the Trust's
obligations, the Trust is required by the Declaration of Trust to use its
property to protect or compensate the shareholder. On request, the Trust will
defend any claim made and pay any judgment against a shareholder for any act or
obligation of the Trust. Therefore, financial loss resulting from liability as a
shareholder will occur only if the Trust itself cannot meet its obligations to
indemnify shareholders and pay judgments against them.
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 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:
o derive at least 90% of its gross income from dividends, interest, and
gains from the sale of securities; o derive less than 30% of its gross
income from the sale of securities held less than three months; o invest
in securities within certain statutory limits; and o distribute to its
shareholders at least 90% of its net income earned during the year.
Shareholders' Tax Status
Shareholders of the Fund are subject to federal income tax on dividends received
as cash or additional shares. These dividends, and any short-term capital gains,
are taxable as ordinary income. No portion of any income dividend paid by the
Fund is eligible for the dividends received deduction available to corporations.
<PAGE>
Total Return
Average annual total return is the average compounded rate of return for a given
period that would equate a $1,000 initial investment to the ending redeemable
value of that investment. The ending redeemable value is computed by multiplying
the number of shares owned at the end of the period by the net asset value per
share at the end of the period. The number of shares owned at the end of the
period is based on the number of shares purchased at the beginning of the period
with $1,000, adjusted over the period by any additional shares, assuming the
monthly reinvestment of all dividends and distributions.
Yield
The yield for the shares of the Fund is determined by dividing the net
investment income per share (as defined by the Securities and Exchange
Commission) earned by shares of the Fund over a thirty-day period by the maximum
offering price per share of the respective class on the last day of the period.
This value is annualized using semi-annual compounding. This means that the
amount of income generated during the thirty-day period is assumed to be
generated each month over a 12-month period and is reinvested every six months.
The yield does not necessarily reflect income actually earned by the Fund
because of certain adjustments required by the Securities and Exchange
Commission and, therefore, may not correlate to the dividends or other
distributions paid to the shareholders.
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.
Performance Comparisons
Investors may use financial publications and/or indices to obtain a more
complete view of the Fund's performance. When comparing performance, investors
should consider all relevant factors such as the composition of any index used,
prevailing market conditions, portfolio compositions of other funds, and methods
used to value portfolio securities and compute offering price. The financial
publications and/or indices which the Fund uses in advertising may include:
o Russell Mid Cap Growth Index contains stocks from the Russell Midcap
Index with a greater-than-average growth orientation. The stocks are
also members of the Russell 1000 Growth Index.
o S&P 500 is an unmanaged capitalization weighted index of 500 stocks
designed to measure performance of the broad domestic economy
through changes in the aggregate market value of 500 stocks
representing all major industries.
Advertisements and other sales literature for the Fund may quote total returns
which are calculated on non-standardized base periods. These total returns
represent the historic change in the value of an investment in the Fund based on
monthly reinvestment of dividends over a specified period of time. Advertising
and other promotional literature may include charts, graphs and other
illustrations using the Fund's returns in general, that demonstrate basic
investment concepts such as tax-deferred compounding, dollar-cost averaging and
systematic investment. In addition, the Fund can compare its performance, or
performance for the types of securities in which it invests, to a variety of
other investments, such as bank savings accounts, certificates of deposit, and
Treasury bills.
Economic and Market Information
Advertising and sales literature for the Fund may include discussions of
economic, financial and political developments and their effect on the
securities market. Such discussions may take the form of commentary on these
developments by Fund portfolio managers and their views and analysis on how such
developments could affect the Fund. In addition, advertising and sales
literature may quote statistics and give general information about the mutual
fund industry, including the growth of the industry, from sources such as the
Investment Company Institute ("ICI"). For example, according to the ICI,
thirty-seven percent of American households are pursuing their financial goals
through mutual funds. These investors, as well as businesses and institutions,
have entrusted over $3.5 trillion to the more than 6,000 funds available.
<PAGE>
Appendix
Standard and Poor's Bond Ratings
AAA--Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong. AA--Debt rated
AA has a very strong capacity to pay interest and repay principal and differs
from the higher rated issues only in small degree. A--Debt rated A has a strong
capacity to pay interest and repay principal although it is somewhat more
susceptible to the adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories. BBB--Debt rated BBB is regarded
as having an adequate capacity to pay interest and repay principal. Whereas it
normally exhibits adequate protection parameters, adverse economic conditions or
changing circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher rated
categories. NR--Indicates that no public rating has been requested, that there
is insufficient information on which to base a rating, or that Standard & Poor's
does not rate a particular type of obligation as a matter of policy. PLUS (+) OR
MINUS (-):--The ratings from AA to BBB may be modified by the addition of a plus
or minus sign to show relative standing within the major rating categories.
Moody's Investors Service, Inc. Corporate Bond Ratings AAA--Bonds which are
rated Aaa are judged to be of the best quality. They carry the smallest degree
of investment risk and are generally referred to as "gilt edge." Interest
payments are protected by a large or by an exceptionally stable margin and
principal is secure. While the various protective elements are likely to change,
such changes as can be visualized are most unlikely to impair the fundamentally
strong position of such issues. Aa--Bonds which are rated Aa are judged to be of
high quality by all standards. Together with the Aaa group, they comprise what
are generally known as high-grade bonds. They are rated lower than the best
bonds because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may be
other elements present which make the long term risks appear somewhat larger
than in Aaa securities. A--Bonds which are rated A possess many favorable
investment attributes and are to be considered as upper medium-grade
obligations. Factors giving security to principal and interest are considered
adequate but elements may be present which suggest a susceptibility to
impairment sometime in the future. Baa--Bonds which are rated Baa are considered
as medium-grade obligations, i.e., they are neither highly protected nor poorly
secured. Interest payments and principal security appear adequate for the
present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds lack
outstanding investment characteristics and, in fact, have speculative
characteristics as well. NR--Not rated by Moody's. Fitch Investors Service, Inc.
Long-Term Debt Ratings AAA--Bonds considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability to pay
interest and repay principal, which is unlikely to be affected by reasonably
foreseeable events. AA--Bonds considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay principal is
very strong, although not quite as strong as bonds rated AAA. Because bonds
rated in the AAA and AA categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these issuers is generally
rated F-1+. A--Bonds considered to be investment grade and of high credit
quality. The obligor's ability to pay interest and repay principal is considered
to be strong, but may be more vulnerable to adverse changes in economic
conditions and circumstances than bonds with higher ratings. BBB--Bonds
considered to be investment grade and of satisfactory credit quality. The
obligor's ability to pay interest and repay principal is considered to be
adequate. Adverse changes in economic conditions and circumstances, however, are
more likely to have adverse impact on these bonds, and therefore, impair timely
payment. NR--NR indicates that Fitch does not rate the specific issue. Standard
and Poor's Commercial Paper Ratings A-1--This designation indicates that the
degree of safety regarding timely payment is either overwhelming or very strong.
The issues determined to possess overwhelming safety characteristics are denoted
with a plus (+) sign designation. A-2--Capacity for timely payment on issues
with this designation is strong. However, the relative degree of safety is not
as high as for issues designated A-1. Moody's Investors Services, Inc.
Commercial Paper Ratings P-1--Issuers rated PRIME-1 (for related supporting
institutions) have a superior capacity for repayment of short-term promissory
obligations. PRIME-1 repayment capacity will normally be evidenced by the
following characteristics: conservative capitalization structures with moderate
reliance on debt and ample asset protection; broad margins in earning coverage
of fixed financial charges and high internal cash generation; and
well-established access to a range of financial markets and assured sources of
alternate liquidity. P-2--Issuers rated PRIME-2 (for related supporting
institutions) have a strong capacity for repayment of short-term promissory
obligations. This will normally be evidenced by many of the characteristics
cited above but to a lesser degree. Earnings trends and coverage ratios, while
sound, will be more subject to variation. Capitalization characteristics, while
still appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained. Fitch Investors Service, Inc. Short-Term Ratings
F-1+--(Exceptionally Strong Credit Quality). Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1--(Very Strong Credit Quality). Issues assigned to this rating reflect an
assurance of timely payment only slightly less in degree than issues rated F-1+.
F-2--(Good Credit Quality). Issues carrying this rating have a satisfactory
degree of assurance for timely payment but the margin of safety is not as great
as the F-1+ and F-1 categories.
PART C. OTHER INFORMATION.
Item 24. Financial Statements and Exhibits:
(a) Financial Statements: (7,8,9) To be filed by amendment.
(b) Exhibits:
(1) Conformed copy of Declaration of Trust of
the Registrant (1.);
(i) Conformed copy of Amendment No. 1
of Declaration of Trust of the
Registrant (2.);
(ii) Conformed copy of Amendment No. 3 of Declaration of
Trust of the Registrant (4.);
(iii) Conformed copy of Amendment to the Declaration of
Trust of the Registrant dated May 17, 1994 (8.);
(2) Copy of By-Laws of the Registrant (1.);
(3) Not applicable;
(4) (i) Copy of Specimen Certificate for Shares of
Beneficial Interest of DG U.S.
Government Money Market Fund (3.);
(ii) Copy of Specimen Certificate for Shares of
Beneficial Interest of DG Limited Term
Government Income Fund (3.);
(iii) Copy of Specimen Certificate for Shares of
Beneficial Interest of DG Government Income
Fund (3.);
(iv) Copy of Specimen Certificate for Shares of
Beneficial Interest of DG Equity Fund (3.);
(v) Copy of Specimen Certificate for Shares of
Beneficial Interest of DG Municipal Income (6.);
(vi) Copy of Specimen Certificate for Shares of
Beneficial Interest of DG Opportunity Fund (8.);
(vii) Copy of Specimen Certificate for Shares of
Beneficial Interest of DG Prime Money Market
Fund (12.);
+ All exhibits have been filed electronically.
1. Response is incorporated by reference to Registrant's Initial
Registration Statement on Form N-1A filed March 18, 1992.
(File Nos. 33-46431 and 811-6607)
2. Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 1 on Form N-1A filed April 29, 1992. (File
Nos. 33-46431 and 811-6607)
3. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 1 on Form N-1A filed May 22, 1992. (File
Nos. 33-46431 and 811-6607)
4. Response is incorporated by reference to Registrant's Post-Effective
Amendment No.2 on Form N-1A filed October 14, 1992.
(File Nos. 33-46431 and 811-6607)
6. Response is incorporated by Reference to Registrant's Post-Effective
Amendment No. 4 on Form N-1A filed April 23, 1993. (File
Nos. 33-46431 and 811-6607)
7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 5 on Form N-1A filed April 27, 1994. (File
Nos. 33-46431 and 811-6607)
8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 6 on Form N-1A filed May 26, 1994. (File
Nos. 33-46431 and 811-6607)
12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 11 on Form N-1A filed November 15, 1996.
(File Nos. 33-46431 and 811-6607)
<PAGE>
(viii) Copy of Specimen Certificate for Shares of Beneficial Interest
of DG Mid Cap Fund;+
(ix) Copy of Specimen Certificate for Shares of Beneficial Interest
of DG International
Equity Fund;+
(5) (i) Conformed copy of Investment Advisory Contract of Registrant;+
(ii) Conformed copy of Sub-Advisory
Agreement between Deposit Guaranty
National Bank and Commercial
National Bank (6.); (a) Conformed
copy of Exhibit A for DG Equity
Fund (8.); (b) Conformed copy of
Exhibit B for DG Government Income
Fund (8.); (c) Conformed copy of
Exhibit C for DG Limited Term
Government Income Fund (8.); (d)
Conformed copy of Exhibit D for DG
Municipal Income Fund (8.); (e)
Conformed copy of Exhibit E for DG
Opportunity Fund; (9.)
(iii) Conformed copy of Sub-Advisory Agreement between ParkSouth
Corporation and Lazard Frere
Asset Management;+
(iv) Form of Sub-Advisory Agreement between ParkSouth Corporation
and Bennett Lawrence
Management, Inc.;+
(6) Conformed copy of Distributor's Contract of the Registrant (3.);
(i) Conformed copy of Exhibit A for DG vs
Government Money Market Fund (8.); (ii)
Copy of Exhibit B for DG Limited Term
Government Income Fund (8.);
(iii) Conformed copy of Exhibit C for DG
Government Income Fund (8.); (iv) Conformed
copy of Exhibit D for DG Equity Income Fund
(8.);
(v) Conformed copy of Exhibit E for DG
Municipal Income Fund (8.); (vi) Conformed
copy of Exhibit F for DG Opportunity
Fund;(9.)
+ All exhibits have been filed electronically.
3. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 1 on Form N-1A filed May 22, 1992. (File
Nos. 33-46431 and 811-6607)
6. Response is incorporated by Reference to Registrant's Post-Effective
Amendment No. 4 on Form N-1A filed April 23, 1993. (File
Nos. 33-46431 and 811-6607)
7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 5 on Form N-1A filed April 27, 1994. (File
Nos. 33-46431 and 811-6607)
8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 6 on Form N-1A filed May 26, 1994. (File
Nos. 33-46431 and 811-6607)
9. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 8 on Form N-1A filed February 10, 1995.
(File Nos. 33-46431 and 811-6607)
12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 11 on Form N-1A filed November 15, 1996.
(File Nos. 33-46431 and 811-6607)
<PAGE>
(vii) Conformed copy of Exhibit G for DG
Prime Money Market Fund; + (vii) Conformed
copy of Exhibit H for DG International
Equity Fund; +
(7) Not applicable
(8) Conformed copy of Custodian Agreement of the
Registrant (6.);
(9) (i) Conformed copy of Transfer Agency
and Service Agreement of Registrant
(6.);
(ii)...Conformed copy of Administrative
Services Agreement (7.);
(iii) Conformed copy of Shareholder Services
Agreement;+ (iv) Conformed copy of
Shareholder Services Plan; (9.)
(v) Conformed copy of Exhibit A to
Shareholder Services Plan; (9.)
(v) Conformed copy of Exhibits B, C, D, E,
F, G, H, and I to Shareholder Services Plan; + (10)
Conformed copy of Opinion and Consent of Counsel as
to legality of shares being
registered;(11)
(11) Not applicable;
(12) Not applicable;
(13) Conformed copy of Initial Capital
Understanding (2.);.
(14) Not applicable;
(15) (i) Copy of Distribution Plan of the
Registrant (2.);
(a) Conformed copy of Exhibit A for
D.G. U.S. Government Money Market
Fund (8.); (b) Conformed copy of
Exhibit B for DG Limited Term
Government Income Fund (8.); (c)
Conformed copy of Exhibit C for DG
Government Income Fund (8.); (d)
Conformed copy of Exhibit D for DG
Equity Fund (8.); (e) Conformed
copy of Exhibit E for DG Municipal
Income Fund (8.); (f) Conformed
copy of Exhibit F for DG
Opportunity Fund; (9.)
+ All exhibits have been filed electronically.
2. Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 1 on Form N-1A filed April 29, 1992. (File
Nos. 33-46431 and 811-6607)
5. Response is incorporated by reference to Registrant's Post-Effective
Amendment No.3 on Form N-1A filed October 28, 1992.
(File Nos. 33-46431 and 811-6607)
6. Response is incorporated by Reference to Registrant's Post-Effective
Amendment No. 4 on Form N-1A filed April 23, 1993. (File
Nos. 33-46431 and 811-6607)
8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 6 on Form N-1A filed May 26, 1994. (File
Nos. 33-46431 and 811-6607)
9. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 8 on Form N-1A filed February 10, 1995.
(File Nos. 33-46431 and 811-6607);
11. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 10 on Form N-1A filed June 24, 1996. (File
Nos. 33-46431 and 811-6607)
12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 11 on Form N-1A filed November 15, 1996.
(File Nos. 33-46431 and 811-6607)
<PAGE>
(g) Conformed copyof Exhibit G for
DG Prime Money Market Fund; + (g)
Conformed copyof Exhibit H for DG
International Equity Fund; + (g)
Conformed copyof Exhibit I for DG
Mid Cap Fund; +
(ii) Copy of Rule 12b-1 Agreement of the Registrant (8.);
(16) Schedule for Computation of Fund Performance Data;
(i) DG Equity Fund(5.);
(ii) DG Government Income Fund(5.);
(iii) DG Limited Term Government Income Fund(5.);
(iv) DG U.S. Government Money Market Fund(5.);
(v) DG Municipal Income Fund (6.); (vi) DG
Opportunity Fund; (9.)
(17) Not applicable;
(18) Conformed copy of Power of Attorney; (10.)
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 May 28, 1997
-------------- -------------------
Shares of beneficial interest
(no par value)
DG U.S. Government Money
Market Fund 79
DG Limited Term Government
Income Fund 161
DG Government Income Fund 168
DG Equity Fund 999
DG Municipal Income Fund 79
DG Opportunity Fund 677
DG Prime Money Market Fund 9
DG International Equity Fund 6
DG Mid Cap Fund.................... Not currently effective
Item 27. Indemnification: (4)
+ All exhibits have been filed electronically.
4. Response is incorporated by reference to Registrant's Post-Effective
Amendment No.2 on Form N-1A filed October 14, 1992.
(File Nos. 33-46431 and 811-6607)
10. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 9 on Form N-1A filed April 25, 1995. (File
Nos. 33-46431 and 811-6607)
<PAGE>
Item 28. Business and Other Connections of Investment Adviser:
(a) ParkSouth Corporation is a registered investment
adviser providing investment management services to
individuals and institutional clients. ParkSouth
Corporation is a subsidiary of Deposit Guaranty
National Bank, a national banking association formed in
1925, which, in turn, is a subsidiary of Deposit
Guaranty Corp ("DGC"). Through its subsidiaries and
affiliates, DGC offers a full range of financial
services to the public, including commercial lending,
depository services, cash management, brokerage
services, retail banking, mortgage banking, investment
advisory services and trust services.
ParkSouth Corporation manages, in addition to the Funds
in the DG Investor Series, $630 million in common trust
fund assets. ParkSouth Corporation (which suceeded to
the investment advisory business of Deposit Guaranty
National Bank in 1997) or Deposit Guaranty National
Bank have served as the Trust's investment adviser
since May 5, 1992.
The principal executive officers of the Fund's
Investment Adviser, and the Directors of the Fund's
Adviser, are set forth in the following tables. Unless
otherwise noted, the position listed under Other
Substantial Business, Profession, Vocation or
Employment is with Deposit Guaranty National Bank.
Other Substantial
Position With Business,Profession,
Name the Adviser Vocation or Employment
E.B. Robinson, Jr. Chairman of the Board
and Chief Executive
Howard L. McMillan, Jr. President and Chief
Operating Officer
William R. Boone Executive Vice President
Thomas M. Hontzas Executive Vice President
W. Parks Johnson Executive Vice President
James S. Lenoir Executive Vice President
W. Stanley Pratt Executive Vice President
Arlen L. McDonald Executive Vice President
and Chief Financial Officer
DIRECTORS
Haley R. Barbour Warren A. Hood, Jr. W.R. Newman, III
Michael B. Bemis Charles L. Irby John N. Palmer
W. Randolph James E.B. Robinson, Jr. Sharon S. Greener
Booker T. Jones Robert D. Robinson Robert L.T. Smith, Jr.
Howard L. McMillan, Jr. Douglas A. Herring Richard McRae,Jr.
J. Kelley Williams
(b) Commercial National Bank, a national banking
association which received its charter in 1886, is a
subsidiary of DGC and serves as Investment Sub-Adviser
to DG Limited Term Government Income Fund, DG
Government Income Fund, DG Equity Fund, DG Municipal
Income Fund and DG Opportunity Fund. As of December 31,
1995, the Trust Division at Commercial National Bank
had approximately $1.5 billion in trust assets under
administration, of which it had investment discretion
over $1.1 billion. Commercial National Bank has served
as sub-adviser to DG Limited Term Government Income
Fund, DG Government Income Fund, DG Equity Fund and DG
Municipal Income Fund since July 20, 1992 and for DG
Opportunity Fund since May 25, 1994.
The principal executive officers of the Investment
Sub-Adviser, and the Directors of the Investment
Sub-Adviser, are set forth in the following tables.
Unless otherwise noted, the position listed under Other
Substantial Business, Profession, Vocation or
Employment is with Commercial National Bank.
Other Substantial
Position With Business, Profession,
Name the Sub-Adviser Vocation or Employment
Steven C. Walker President and Chief
Executive Officer
P. Michael Adkins Executive Vice President
C. David Barrentine, Jr. Executive Vice President
David H. Nordyke Executive Vice President
Robert H. Boehmler, Jr. Executive Vice President
Richard H. Sale Senior Vice President
Ronald E. Yrjanson Vice President
DIRECTORS
Willis L. Meadows Dewey W. Corley C. W. Holtsclaw, Jr.
William C. Peatross E. B. Robinson, Jr. Steven C. Walker
N. H. Wheless, Jr. Richard H. Bremer L. Michael Ashbrook
Darrell Finney Peggy R. Newell Chris Gabriel
Dr. Kenneth L. Schwab Robert B. Hamm Ivan I. Smith, Jr.
(c) Lazard Freres Asset Management, a division of Lazard
Freres & Co. LLC, a New York limited liability company,
which is registered as an investment adviser with the
Securities and Exchange Commission and is a member of the
New York, American and Midwest Stock Exchanges. Lazard
Freres Asset Management provides investment management
services to client discretionary accounts with assets
totalling approximately $30.7 billion as of December 31,
1995. Lazard Freres Asset Management serves as Sub-Adviser
to DG International Equity Fund.
Lazard Freres Asset Management is managed by members who are referred to as
Managing Directors and are as follows: Norman Eig; Herbert W. Gullquist; Thomas
F. Dunn; Robert P. Morgenthau; John R. Reese; John R. Reinsberg; Michael S.
Rome; Alexander E. Zagoreos; Larry Kohn; and Eileen Alexanderson.
(d) Bennett Lawrence Management, LLC, a New York limited
liability company, which is registered as an investment
adviser with the Securities and Exchange Commission.
Bennett Lawrence Management, LLC provides investment
management services to client discretionary accounts with
assets totalling approximately $634 million as of December
31, 1996. Bennett Lawrence Management, LLC serves as
Sub-Adviser to DG Mid Cap Fund.
Bennett Lawrence Management, LLC is managed by S. Van Zandt Schreiber,
Managing Member and Chief Portfolio Manager, Robert W. Deaton, Member and
Associate Portfolio Manager, Brendan J. Contant, Member and Marketing Director
and Jane H. Fisher, Member and Operations Director.
Item 29. Principal Underwriters:
(a) 111 Corcoran Funds; Arrow Funds; Automated Government Money Trust;
BayFunds; Blanchard Funds; Blanchard Precious Metals Fund, Inc.; Cash Trust
Series II; Cash Trust Series, Inc.; DG Investor Series; Edward D. Jones & Co.
Daily Passport Cash Trust; Federated Adjustable Rate U.S. Government Fund, Inc.;
Federated American Leaders Fund, Inc.; Federated ARMs Fund; Federated Equity
Funds; Federated Equity Income Fund, Inc.; Federated Fund for U.S. Government
Securities, Inc.; Federated GNMA Trust; Federated Government Income Securities,
Inc.; Federated Government Trust; Federated High Income Bond Fund, Inc.;
Federated High Yield Trust; Federated Income Securities Trust; Federated Income
Trust; Federated Index Trust; Federated Institutional Trust; Federated Insurance
Series; Federated Investment Portfolios; Federated Investment Trust; Federated
Master Trust; Federated Municipal Opportunities Fund, Inc.; Federated Municipal
Securities Fund, Inc.; Federated Municipal Trust; Federated Short-Term Municipal
Trust; Federated Short-Term U.S. Government Trust; Federated Stock and Bond
Fund, Inc.; Federated Stock Trust; Federated Tax-Free Trust; Federated Total
Return Series, Inc.; Federated U.S. Government Bond Fund; Federated U.S.
Government Securities Fund: 1-3 Years; Federated U.S. Government Securities
Fund: 2-5 Years; Federated U.S. Government Securities Fund: 5-10 Years;
Federated Utility Fund, Inc.; First Priority Funds; Fixed Income Securities,
Inc.; High Yield Cash Trust; Independence One Mutual Funds; Intermediate
Municipal Trust; International Series, Inc.; Investment Series Funds, Inc.;
Investment Series Trust; Liberty U.S. Government Money Market Trust; Liquid Cash
Trust; Managed Series Trust; Marshall Funds, Inc.; Money Market Management,
Inc.; Money Market Obligations Trust; Money Market Obligations Trust II; Money
Market Trust; Municipal Securities Income Trust; Newpoint Funds; Peachtree
Funds; RIMCO Monument Funds; SouthTrust Vulcan Funds; Star Funds; Targeted
Duration Trust; Tax-Free Instruments Trust; The Biltmore Funds; The Biltmore
Municipal Funds; The Monitor Funds; The Planters Funds; The Starburst Funds; The
Starburst Funds II; The Virtus Funds; Tower Mutual Funds; Trust for Financial
Institutions; Trust for Government Cash Reserves; Trust for Short-Term U.S.
Government Securities; Trust for U.S. Treasury Obligations; Vision Group of
Funds, Inc.; Wesmark Funds; 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.
<TABLE>
<CAPTION>
(b)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
<S> <C> <C>
Richard B. Fisher Director, Chairman, Chief Vice President
Federated Investors Tower Executive Officer, Chief
Pittsburgh, PA 15222-3779 Operating Officer, Asst.
Secretary, and Asst.
Treasurer, Federated
Securities Corp.
Edward C. Gonzales Director, Executive Vice President, Treasurer
Federated Investors Tower President, Federated, and Trustee
Pittsburgh, PA 15222-3779 Securities Corp.
Thomas R. Donahue Director, Assistant Secretary,
Federated Investors Tower Assistant Treasurer
Pittsburgh, PA 15222-3779 Federated Securities Corp
John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark R. Gensheimer Executive Vice President of --
Federated Investors Tower Bank/Trust, Federated
Pittsburgh, PA 15222-3779 Securities Corp.
David M. Taylor Executive Vice President --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard W. Boyd Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Laura M. Deger 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
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Teresa M. Antoszyk Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John B. Bohnet Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Byron F. Bowman Vice President, Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Dale R. Browne Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Leonard Corton, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
<PAGE>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Kevin J. Crenny Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Daniel T. Culbertson Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
G. Michael Cullen Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William C. Doyle Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John K. Goettlicher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Craig S. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Bruce E. Hastings Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Beth A. Hetzel Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James E. Hickey Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Brian G. Kelly Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
H. Joseph Kennedy Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
<PAGE>
(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
Richard C. Mihm Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert D. Oehlschlager Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas A. Peters III Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard A. Recker 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
George D. Riedel Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John Rogers Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Brian S. Ronayne Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas S. Schinabeck Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Edward L. Smith Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
<PAGE>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
John A. Staley Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard Suder Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul A. Uhlman Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Miles J. Wallace Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John F. Wallin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Edward J. Wojnarowski Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael P. Wolff Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Edward R. Bozek Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Terri E. Bush Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Charlene H. Jennings Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Matthew S. Propelka Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Denis McAuley Treasurer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
<PAGE>
Leslie K. Platt Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
</TABLE>
(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:
DG Investor Series Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Services Company P.O. Box 8600
Transfer Agent, Dividend Boston, MA 02266-8600
Disbursing Agent and
Shareholder Servicing Agent
Federated Administrative Services Federated Investors Tower
Administrator Pittsburgh, PA 15222-3779
Deposit Guaranty National Bank P.O. Box 1200
Adviser Jackson,MS 39215-1200
Commercial National Bank P.O. Box 21119
Sub-Adviser Shreveport, LA 71152
(except DG U.S. Government Money
Market Fund, DG Prime Money
Market Fund, DG International Equity
Fund and DG Mid Cap Fund)
Lazard Freres Asset Management 30 Rockefeller Plaza
Sub-Adviser to DG International New York, NY 10020
Equity Fund only
Bennett Lawrence Management, LLC 757 Third Avenue, 19th Floor
Sub-Adviser to DG Mid Cap New York, NY 10017
Fund only
State Street Bank and Trust Company P.O. Box 8600
Custodian Boston, MA 02266-8600
Item 31. Management Services: Not applicable.
Item 32. Undertakings:
Registrant hereby undertakes to comply with the provisions of
Section 16(c) of the 1940 Act with respect to the removal of
Trustees and the calling of special shareholder meetings by
shareholders.
Registrant hereby undertakes to file a post-effective
amendment on behalf of DG Mid Cap Fund, using financial
statments for DG Mid Cap Fund, which need not be certified,
within four to six months from the effective date of this
Post-Effective Amendment No. 13.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, DG INVESTOR SERIES, has duly
caused this Amendment to its Registration Statement to be signed on its behalf
by the undersigned, thereto duly authorized, in the City of Pittsburgh and
Commonwealth of Pennsylvania, on the 20th day of June, 1997.
DG INVESTOR SERIES
BY: /s/C. Grant Anderson
C. Grant Anderson, Assistant Secretary
Attorney in Fact for John F. Donahue
June 20, 1997
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/C. Grant Anderson
C. Grant Anderson Attorney In Fact June 20, 1997
ASSISTANT SECRETARY For the Persons
Listed Below
NAME TITLE
John F. Donahue* Chairman and Trustee
(Chief Executive Officer)
Edward C. Gonzales* President, Treasurer and Trustee
(Principal Financial and
Accounting Officer)
Thomas G. Bigley* Trustee
John T. Conroy, Jr.* Trustee
William J. Copeland* Trustee
James E. Dowd* Trustee
Lawrence D. Ellis, M.D.* Trustee
Edward L. Flaherty, Jr.* Trustee
Peter E. Madden* Trustee
Gregor F. Meyer* Trustee
John E. Murray, Jr.* Trustee
Wesley W. Posvar* Trustee
Marjorie P. Smuts* Trustee
* By Power of Attorney
DG INVESTOR SERIES
SUB-ADVISORY AGREEMENT
THIS AGREEMENT is made between ParkSouth Corporation, a Mississippi
corporation (hereinafter referred to as "Adviser") and Bennett Lawrence
Management, LLC, a New York limited liability company (hereinafter referred to
as the "Sub-Adviser").
WITNESSETH
That the parties hereto, intending to be legally bound, hereby agree as
follows:
1. The Adviser in its capacity as investment adviser to DG Mid-Cap Fund
(the "Fund"), a portfolio of DG Investor Series ("Trust"), under the Investment
Advisory Contract dated as of March 31, 1997, appoints the Sub-Adviser as a
discretionary investment sub-adviser to the Fund pursuant to the terms set forth
in this Agreement.
2. (a) The Sub-Adviser will deal in good faith and with due diligence
and will use professional skill, care and judgment in the performance of its
duties under this Agreement. In so doing, the Sub-Adviser shall formulate and
implement a continuing program for the management of the assets of the Fund. The
Sub-Adviser shall amend and update such program from time to time as financial
and other economic conditions warrant. The Sub-Adviser shall make all
determinations with respect to the investment of the assets of the Fund and
shall take such steps as may be necessary to implement the same, including the
placement of purchase and sale orders on behalf of the Fund. The Adviser shall
be responsible for the administration of the investment activities of the Fund,
including compliance with the requirements of the Investment Company Act of
1940, except for the investment management activities specifically delegated to
the Sub-Adviser pursuant to this Agreement. The Sub-Adviser's activities
hereunder shall comply with: (i) the Declaration and By-Laws of the Trust; (ii)
the Registration Statement of the Trust, as it may be amended from time to time,
including the investment objectives and policies set forth therein; (iii) the
Investment Company of 1940 and the Investment Advisers Act of 1940 and the
regulations thereunder; (iv) the Internal Revenue Code and the regulations
thereunder applicable to regulated investment companies; (v) any other
applicable laws or regulations; and (vi) such other limitations as the Adviser
or the Board of Trustees of the Trust may adopt.
(b) The Sub-Adviser will adopt or has adopted a written code
of ethics complying with the requirements of Rule 17j-1 under the Investment
Company Act of 1940, will provide the Adviser with a copy of the code of ethics
and evidence of its adoption, and will make such reports to the Trust or other
persons as required by Rule 17j-1. The Sub-Adviser will also adopt or has
adopted policies and procedures sufficient to enable the Sub-Adviser to detect
and prevent the misuse of material, nonpublic information by the Sub-Adviser or
any person associated with the Sub-Adviser, in compliance with federal and state
securities laws.
<PAGE>
1
1
(c) The Sub-Adviser will prepare, maintain, keep current and
preserve on behalf of the Trust and the Adviser all records concerning the
Sub-Adviser's activities in connection with the Fund that the Fund is required
by law to maintain, including, but not limited to, records required under
paragraphs (b)(5), (b)(6), (b)(9), (b)(10), and (f) of rule 31a-1 under the
Investment Company Act. Any records required to be maintained and preserved
pursuant to the provisions of Rule 31a-l and Rule 31a-2 under the Investment
Company Act of 1940 that are prepared by the Sub-Adviser on behalf of the Fund
are the property of the Fund and will be surrendered promptly on request to the
Fund or any person acting on behalf of the Trust during the term of this
Agreement and at any time after the termination of this Agreement; provided,
however, that the Sub-Adviser has the right to make and retain copies. The
Sub-Adviser will comply with all reasonable requests for information by the
Adviser or the Trust's officers or Board of Trustees, including information
required for the Fund's filings with the Securities and Exchange Commission and
state securities commissions.
(d) The Sub-Adviser will promptly after filing with the
Securities and Exchange Commission an amendment to its Form ADV furnish a copy
of such amendment to the Trust and the Adviser.
(e) The Sub-Adviser will immediately notify the Adviser of the
occurrence of any event which would disqualify the Sub-Adviser from serving as
an investment adviser of an investment company pursuant to Section 9(a) of the
Investment Company Act of 1940 or otherwise.
3. (a) The Sub-Adviser's power to direct the investment and
reinvestment of the assets of the Fund shall be exercised in accordance with
applicable law, the Fund's governing documents and the investment objectives,
policies and restrictions set forth in the then-current Prospectus and Statement
of Additional Information (collectively the "Prospectus") relating to the Fund
contained in the Trust's Registration Statement under the Investment Company Act
of 1940 and the Securities Act of 1933, as amended. The Adviser may also place
additional limitations on the Sub-Adviser's investment decisions by written
notice to the Sub-Adviser. The Adviser agrees to provide promptly, or cause to
be provided promptly, to the Sub-Adviser a copy of the documents mentioned above
and all changes made to such documents.
(b) While the Sub-Adviser will have day-to-day responsibility
for the discretionary investment decisions to be made on behalf of the Fund, the
Sub-Adviser will be subject to oversight by the Adviser. Such oversight,
however, shall not require prior approval of discretionary investment decisions
made by the Sub-Adviser by the Adviser pursuant to the preceding sentence.
(c) The Trust retains the right, on reasonable prior written
notice to the Adviser and the Sub-Adviser, to amend the Fund's investment
objectives, policies and restrictions placed on the Sub-Adviser's investment
decisions. Similarly, the Adviser retains the right, on reasonable prior written
notice to the Sub-Adviser, to amend any additional limitations, if any, that
have been placed on the Sub-Adviser's investment decisions with respect to the
Fund. Upon receipt of such prior notice from either the Trust or the Adviser,
the Sub-Adviser will promptly notify both the Fund and the Adviser if adoption
of such amendment would interfere with the completion of any transaction
commenced on behalf of the Fund prior to the Sub-Adviser's receipt of the
notice. In the event that the Trust or the Adviser proceeds to amend the Fund's
investment objectives, policies and restrictions or any additional limitations
after being notified by the Sub-Adviser of the pending transaction commenced on
behalf of the Fund, or in the event that the Trust or the Adviser amends the
Fund's investment objectives, policies and restrictions or any additional
limitations without providing reasonable prior notice to the Sub-Adviser, the
Sub-Adviser may complete such transaction unless doing so would violate any
applicable law, rule or regulation. In such an event, the Sub-Adviser will not
be responsible for any loss that may result from the completion of the
transaction.
(d) Except as may be qualified elsewhere in this Agreement, the Sub-Adviser
is hereby authorized, for and on behalf of the Fund, in its discretion, to:
(i) exercise any conversion and/or subscription
rights available in connection with any securities or other investments held in
the Fund;
(ii) maintain all or part of the Fund's assets
uninvested in short-term income-producing instruments for such periods of time
as shall be deemed reasonable and prudent by the Sub-Adviser;
(iii) instruct the Custodian, to deliver for cash
received, securities or other cash and/or securities instruments sold,
exchanged, redeemed or otherwise disposed of from the Fund, and to pay cash for
securities or other cash and/or securities instruments delivered to the
Custodian and/or credited to the Fund upon acquisition of the same for the
Fund;
(iv) determine how to vote all proxies received
with respect to securities held in the Fund and direct the Custodian as to the
voting of such proxies; and
(v) generally, perform any other act necessary
to enable the Sub-Adviser to carry out its obligations under the Agreement.
4. (a) The Sub-Adviser shall select the brokers and dealers through
which transactions on behalf of the Fund will be executed and the markets on or
in which such transactions will be executed. The Sub-Adviser shall place, in the
name of the Fund or its nominee (or appropriate foreign equivalent), all such
orders for the purchase or sale or of securities due to or from the Fund with
any broker and/or dealer that deals in such securities, all in the manner as set
forth below and in accordance with such operational procedures as may be agreed
to from time to time by the Adviser and the Sub-Adviser.
(b) In placing orders with brokers and/or dealers, the
Sub-Adviser shall use its best efforts to obtain the best net price and the most
favorable execution of its orders, after taking into account all factors it
deems relevant, including the breadth of the market in the security, the price
of the security, the financial condition and execution capability of the broker
and/or dealer, and the reasonableness of the commission, if any, both for the
specific transaction and on a continuing basis. Consistent with this obligation,
the Sub-Adviser may, to the extent permitted by law, purchase and sell portfolio
securities using brokers that provide brokerage and research services (within
the meaning of Section 28(e) of the Securities and Exchange Act of 1934) to or
for the benefit of the Fund and/or other accounts over which the Sub-Adviser or
the Adviser exercises investment discretion. The Sub-Adviser is authorized to
pay a broker that provides such brokerage and research services a commission for
effecting a securities transaction which is in excess of the amount of
commission another broker would have charged for effecting that transaction, if
the Sub-Adviser determines in good faith that such commission was reasonable in
relation to the value of brokerage and research services provided by such
broker. This determination may be viewed in terms of either that particular
transaction or of the overall responsibilities of the Sub-Adviser with respect
to the accounts as to which it exercises investment discretion.
(c) Notwithstanding the foregoing, the Board of Trustees and
the Adviser periodically shall review the commissions paid by the Fund and
determine whether those commissions were reasonable in relation to the brokerage
and research services received.
5. It is understood that certain other clients (including other funds,
portfolios and accounts) of the Sub-Adviser may have investment objectives and
policies similar to those of the Fund and that the Sub-Adviser may, from time to
time, make recommendations that result in the purchase (or sale) of a particular
security by its other clients and the Fund during the same period of time. If
transactions on behalf of more than one client during the same period increase
the demand for securities being purchased or the supply of securities being
sold, there may be an adverse effect on price or quantity. In such event, the
Sub-Adviser shall allocate the securities or investments to be purchased or
sold, as well as the expense incurred in the transactions (including price) in a
manner the Sub-Adviser considers equitable and consistent with its obligations
to the Fund and the Sub-Adviser's other clients.
6. The Sub-Adviser agrees that it will only enter into transactions
that are covered by Section 10 (f) or Section 17 (e) of the Investment Company
Act of 1940 if it has (i) complied with Rule 10f-3 or Rule 17e-1 thereunder,
respectively, or the terms of an appropriate exemptive order issued to the Fund
by the SEC, and (ii) has compiled with the procedures adopted thereunder by the
Board of Trustees of the Trust, which may, pursuant to authority granted by the
Trust, be supplemented by interpretive guidelines of the Adviser. Aside from
parties that are known or should be known by the Sub-Adviser, the Adviser shall
promptly notify the Sub-Adviser of any additional parties with whom engaging in
a transaction for the Fund would result in a violation of the Investment Company
Act of 1940.
7. For its services under this Agreement, Sub-Adviser shall receive
from Adviser an annual fee ("the Sub-Advisory Fee"), as set forth in Exhibit A
hereto.
8. This Agreement shall take effect on the date that the parties
execute the exhibit to this Agreement relating to such Fund and shall continue
in effect for the Fund for two years from the date of its execution and from
year to year thereafter, subject to the provisions for termination and all of
the other terms and conditions hereof if: (a) such continuation shall be
specifically approved at least annually by the vote of a majority of the
Trustees of the Trust, including a majority of the Trustees who are not parties
to this Agreement or interested persons of any such party (other than as
Trustees of the Trust) cast in person at a meeting called for that purpose; and
(b) the Adviser shall not have notified the Trust in writing at least sixty (60)
days prior to the anniversary date of this Agreement in any year thereafter that
it does not desire such continuation with respect to the Fund.
9. Notwithstanding any provision in this Agreement, it may be
terminated at any time without the payment of any penalty: (a) by the Trustees
of the Trust or by a vote of a majority of the outstanding voting securities (as
defined in Section 2(a)(42) of the Act) of the Fund on sixty (60) days' written
notice to the Adviser; (b) by the Sub-Adviser or the Adviser upon sixty (60)
days' written notice to the other party to the Agreement. Termination of this
Agreement will not affect (i) the validity of any action previously taken by the
Adviser or the Sub-Adviser under this Agreement or (ii) liabilities or
obligations of the parties from transactions initiated before termination of
this Agreement.
10. This Agreement shall automatically terminate:
(a) in the event of its assignment (as defined in the
Investment Company Act of 1940); or
(b) in the event of termination of the Investment
Advisory Contact for any reason whatsoever.
11. So long as both the Adviser and the Sub-Adviser shall be legally
qualified to act as an investment adviser to the Fund, neither the Adviser nor
the Sub-Adviser shall act as an investment adviser (as such term is defined in
the Investment Company Act of 1940) to the Fund except as provided herein and in
the Investment Advisory Contract or in such other manner as may be expressly
agreed between the Adviser and the Sub-Adviser.
Provided, however, that if the Adviser or Sub-Adviser shall resign
prior to the end of any term of this Agreement or for any reason be unable or
unwilling to serve for a successive term which has been approved by the Trustees
of the Trust pursuant to the provisions of Paragraph 8 of this Agreement or
Paragraph 6 of the Investment Advisory Contract, the remaining party, the
Sub-Adviser or the Adviser as the case may be, shall not be prohibited from
serving as an investment adviser to such Fund by reason of the provisions of
this Paragraph 11.
12. This Agreement may be amended from time to time by agreement of the
parties hereto provided that such amendment shall be approved both by the vote
of a majority of Trustees of the Trust, including a majority of Trustees who are
not parties to this Agreement or interested persons, as defined in Section
2(a)(19) of the Investment Company Act of 1940, of any such party at a meeting
called for that purpose, and, where required by Section 15(a)(2) of the
Investment Company Act of 1940, by the holders of a majority of the outstanding
voting securities (as defined in Section 2(a)(42) of the Investment Company Act
of 1940) of the Fund.
13. This Agreement shall be construed in accordance with the laws of
the Commonwealth of Pennsylvania without giving effect to the choice of law
provisions thereof, to the extent that such laws are consistent with provisions
of the Investment Company Act of 1940 and the regulations thereunder. The
failure of either party to insist, in one or more instances, upon strict
performance of the obligations of this Agreement, or to exercise any rights
contained herein, shall not be construed as a waiver, or relinquishment for the
future of such obligation or right, which shall remain and continue in full
force and effect. Should any part of this Agreement be held or made invalid by a
court decision, statute, regulation, or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
<PAGE>
Exhibit A
DG Investor Series
DG Mid-Cap Fund
Sub-Advisory Agreement
For all services rendered by Sub-Adviser hereunder, the Adviser shall
pay the Sub-Adviser a Sub-Advisory Fee based on the average daily net assets of
the Fund, as follows:
Fund Assets Annual Rate
Any assets up to and including $5 million 0.75%
Any assets over $5 million up to and including $10 million 0.65%
Any assets over $10 million 0.55%
The Sub-Advisory Fee shall be accrued daily, and paid quarterly, as set forth in
the Investment Advisory Contract dated March 31, 1997.
This Exhibit incorporates by reference the Sub-Advisory Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Exhibit to be
executed on their behalf by their duly authorized officers, and their corporate
seals to be affixed hereto this day of
, 1997.
ATTEST: ParkSouth Corporation
By:
Secretary Chief Executive Officer
Bennett Lawrence Management, LLC
By:
Secretary Managing Director
Exhibit (4)(viii)
DG MID CAP FUND
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 DG MID CAP FUND
of DG INVESTOR SERIES 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: DG INVESTOR SERIES
Corporate Seal
(1992)
Massachusetts
/s/ Edward C. Gonzales /s/ John F. Donahue
Treasurer Chairman
Countersigned: Federated Shareholder
Services Company (Boston)
Transfer Agent
By:
Authorized Signature
<PAGE>
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 DG Investor Series, 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
<PAGE>
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.
<PAGE>
Exhibit (4)(ix)
DG INTERNATIONAL EQUITY FUND
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 DG INTERNATIONAL
EQUITY FUND of DG INVESTOR SERIES 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: DG INVESTOR SERIES
Corporate Seal
(1992)
Massachusetts
/s/ Edward C. Gonzales /s/ John F. Donahue
Treasurer Chairman
Countersigned: Federated Shareholder
Services Company (Boston)
Transfer Agent
By:
Authorized Signature
<PAGE>
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 DG Investor Series, 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
<PAGE>
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.
Page 1
DG Investor Series 3/1/97
Exhibit 5(i)
INVESTMENT ADVISORY CONTRACT
This Contract is made this 1st day of March, 1997, between ParkSouth
Corporation, a adviser_org_form = corporation "adviser_state " "" Mississippi
corporation having its principal place of business in Jackson, Mississippi (the
"Adviser"), and DG Investor Series, aError! Reference source not found.=
corporation "NULL" "" Massachusetts business trust having its principal place of
business in Pittsburgh, Pennsylvania (the "Trust").
WHEREAS the Trust is an open-end management investment company as that
term is defined in the Investment Company Act of 1940, as amended, and is
registered as such with the Securities and Exchange Commission; and
WHEREAS Adviser is engaged in the business of rendering investment
advisory and management services.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. The Trust hereby appoints Adviser as Investment Adviser for each of
the portfolios ("Funds") of the Trust which executes an exhibit to this
Contract, and Adviser accepts the appointments. Subject to the direction of the
Trustees, Adviser shall provide investment research and supervision of the
investments of the Funds and conduct a continuous program of investment
evaluation and of appropriate sale or other disposition and reinvestment of each
Fund's assets.
2. Adviser, in its supervision of the investments of each of the Funds
will be guided by each of the Fund's investment objective and policies and the
provisions and restrictions contained in the org_form=corporation "Articles of
Incorporation" "Declaration of Trust" Declaration of Trust and By-Laws of the
Trust and as set forth in the Registration Statements and exhibits as may be on
file with the Securities and Exchange Commission.
3. Each Fund shall pay or cause to be paid all of its own expenses and
its allocable share of Trust expenses, including, without limitation, the
expenses of organizing the Trust and continuing its existence; fees and expenses
of Trustees and officers of the Trust; fees for investment advisory services and
administrative personnel and services; expenses incurred in the distribution of
its shares ("Shares"), including expenses of administrative support services;
fees and expenses of preparing and printing its Registration Statements under
the Securities Act of 1933 and the Investment Company Act of 1940, as amended,
and any amendments thereto; expenses of registering and qualifying the Trust,
the Funds, and Shares of the Funds under federal and state laws and regulations;
expenses of preparing, printing, and distributing prospectuses (and any
amendments thereto) to shareholders; interest expense, taxes, fees, and
commissions of every kind; expenses of issue (including cost of Share
certificates), purchase, repurchase, and redemption of Shares, including
expenses attributable to a program of periodic issue; charges and expenses of
custodians, transfer agents, dividend disbursing agents, shareholder servicing
agents, and registrars; printing and mailing costs, auditing, accounting, and
legal expenses; reports to shareholders and governmental officers and
commissions; expenses of meetings of Trustees and shareholders and proxy
solicitations therefor; insurance expenses; association membership dues and such
nonrecurring items as may arise, including all losses and liabilities incurred
in administering the Trust and the Funds. Each Fund will also pay its allocable
share of such extraordinary expenses as may arise including expenses incurred in
connection with litigation, proceedings, and claims and the legal obligations of
the Trust to indemnify its officers and Trustees and agents with respect
thereto.
4. Each of the Funds shall pay to Adviser, for all services
rendered to each Fund by Adviser hereunder, the fees set forth in the exhibits
attached hereto.
5. The net asset value of each Fund's Shares as used herein will
be calculated to the nearest 1/10th of one cent.
6. The Adviser may from time to time and for such periods as it deems
appropriate reduce its compensation (and, if appropriate, assume expenses of one
or more of the Funds) to the extent that any Fund's expenses exceed such lower
expense limitation as the Adviser may, by notice to the Fund, voluntarily
declare to be effective.
7. This Contract shall begin for each Fund as of the date of execution
of the applicable exhibit and shall continue in effect with respect to each Fund
presently set forth on an exhibit (and any subsequent Funds added pursuant to an
exhibit during the initial term of this Contract) for two years from the date of
this Contract set forth above and thereafter for successive periods of one year,
subject to the provisions for termination and all of the other terms and
conditions hereof if: (a) such continuation shall be specifically approved at
least annually by the vote of a majority of the Trustees of the Trust, including
a majority of the Trustees who are not parties to this Contract or interested
persons of any such party cast in person at a meeting called for that purpose;
and (b) Adviser shall not have notified a Fund in writing at least sixty (60)
days prior to the anniversary date of this Contract in any year thereafter that
it does not desire such continuation with respect to that Fund. If a Fund is
added after the first approval by the Trustees as described above, this Contract
will be effective as to that Fund upon execution of the applicable exhibit and
will continue in effect until the next annual approval of this Contract by the
Trustees and thereafter for successive periods of one year, subject to approval
as described above.
8. Notwithstanding any provision in this Contract, it may be terminated
at any time with respect to any Fund, without the payment of any penalty, by the
Trustees of the Trust or by a vote of the shareholders of that Fund on sixty
(60) days' written notice to Adviser.
9. This Contract may not be assigned by Adviser and shall automatically
terminate in the event of any assignment. Adviser may employ or contract with
such other person, persons, corporation, or corporations at its own cost and
expense as it shall determine in order to assist it in carrying out this
Contract.
10. In the absence of willful misfeasance, bad faith, gross negligence,
or reckless disregard of the obligations or duties under this Contract on the
part of Adviser, Adviser shall not be liable to the Trust or to any of the Funds
or to any shareholder for any act or omission in the course of or connected in
any way with rendering services or for any losses that may be sustained in the
purchase, holding, or sale of any security.
11. This Contract may be amended at any time by agreement of the
parties provided that the amendment shall be approved both by the vote of a
majority of the Trustees of the Trust including a majority of the Trustees who
are not parties to this Contract or interested persons of any such party to this
Contract (other than as Trustees of the Trust) cast in person at a meeting
called for that purpose, and, where required by Section 15(a)(2) of the Act, on
behalf of a Fund by a majority of the outstanding voting securities of such Fund
as defined in Section 2(a)(42) of the Act.
12. The Adviser acknowledges that all sales literature for investment
companies (such as the Trust) are subject to strict regulatory oversight. The
Adviser agrees to submit any proposed sales literature for the Trust (or any
Fund) or for itself or its affiliates which mentions the Trust (or any Fund) to
the Trust's distributor for review and filing with the appropriate regulatory
authorities prior to the public release of any such sales literature, provided,
however, that nothing herein shall be construed so as to create any obligation
or duty on the part of the Adviser to produce sales literature for the Trust (or
any Fund). The Trust agrees to cause its distributor to promptly review all such
sales literature to ensure compliance with relevant requirements, to promptly
advise Adviser of any deficiencies contained in such sales literature, to
promptly file complying sales literature with the relevant authorities, and to
cause such sales literature to be distributed to prospective investors in the
Trust.
13. Adviser is hereby expressly put on notice of the limitation of
liability as set forth in Article XI of the Declaration of Trust and agrees that
the obligations pursuant to this Contract of a particular Fund and of the Trust
with respect to that particular Fund be limited solely to the assets of that
particular Fund, and Adviser shall not seek satisfaction of any such obligation
from any other Fund, the shareholders of any Fund, the Trustees, officers,
employees or agents of the Trust, or any of them.
14. The Trust and the Funds are hereby expressly put on notice of the
limitation of liability as set forth in the Declaration of Trust of the Adviser
and agree that the obligations assumed by the Adviser pursuant to this Contract
shall be limited in any case to the Adviser and its assets and, except to the
extent expressly permitted by the Investment Company Act of 1940, as amended,
the Trust and the Funds shall not seek satisfaction of any such obligation from
the shareholders of the Adviser, the Trustees, officers, employees, or agents of
the Adviser, or any of them.
15. This Contract shall be construed in accordance with and
governed by the laws of the Commonwealth of Pennsylvania.
16. This Contract will become binding on the parties hereto upon
their execution of the attached exhibits to this Contract.
<PAGE>
EXHIBIT A
to the
Investment Advisory Contract
DG INVESTOR SERIES
DG U.S. Goverment Money Market Fund
For all services rendered by Adviser hereunder, the above-named Fund of
the DG Investor Series shall pay to Adviser and Adviser agrees to accept as full
compensation for all services rendered hereunder, an annual investment advisory
fee equal to .50 of 1% of the average daily net assets of the Fund.
The portion of the fee based upon the average daily net assets of the
Fund shall be accrued daily at the rate of 1/365th of .50 of 1% applied to the
daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this March 1, 1997.
Attest: ParkSouth Corporation
/s/ J. Clifford Harrison By: /s/ Raymond F. Thompson
Secretary President
Attest: DG Investor Series
/s/ John W. McGonigle By: /s/ J. Christopher Donahue
Secretary Executive Vice President
<PAGE>
EXHIBIT B
to the
Investment Advisory Contract
DG INVESTOR SERIES
DG Limited Term Government Income Fund
For all services rendered by Adviser hereunder, the above-named Fund of
the DG Investor Series shall pay to Adviser and Adviser agrees to accept as full
compensation for all services rendered hereunder, an annual investment advisory
fee equal to 0.60 of 1% of the average daily net assets of the Fund.
The portion of the fee based upon the average daily net assets of the
Fund shall be accrued daily at the rate of 1/365th of 0.60 of 1% applied to the
daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this March 1, 1997.
Attest: ParkSouth Corporation
/s/ J. Clifford Harrison By: /s/ Raymond F. Thompson
Secretary President
Attest: DG Investor Series
/s/ John W. McGonigle By: /s/ J. Christopher Donahue
Secretary Executive Vice President
<PAGE>
EXHIBIT C
to the
Investment Advisory Contract
DG INVESTOR SERIES
DG Government Income Fund
For all services rendered by Adviser hereunder, the above-named Fund of
the DG Investor Series shall pay to Adviser and Adviser agrees to accept as full
compensation for all services rendered hereunder, an annual investment advisory
fee equal to 0.60 of 1% of the average daily net assets of the Fund.
The portion of the fee based upon the average daily net assets of the
Fund shall be accrued daily at the rate of 1/365th of 0.60 of 1% applied to the
daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this March 1, 1997.
Attest: ParkSouth Corporation
/s/ J. Clifford Harrison By: /s/ Raymond F. Thompson
Secretary President
Attest: DG Investor Series
/s/ John W. McGonigle By: /s/ J. Christopher Donahue
Secretary Executive Vice President
<PAGE>
EXHIBIT D
to the
Investment Advisory Contract
DG INVESTOR SERIES
DG Equity Fund
For all services rendered by Adviser hereunder, the above-named Fund of
the DG Investor Series shall pay to Adviser and Adviser agrees to accept as full
compensation for all services rendered hereunder, an annual investment advisory
fee equal to 0.75 of 1% of the average daily net assets of the Fund.
The portion of the fee based upon the average daily net assets of the
Fund shall be accrued daily at the rate of 1/365th of 0.75 of 1% applied to the
daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this March 1, 1997.
Attest: ParkSouth Corporation
/s/ J. Clifford Harrison By: /s/ Raymond F. Thompson
Secretary President
Attest: DG Investor Series
/s/ John W. McGonigle By: /s/ J. Christopher Donahue
Secretary Executive Vice President
<PAGE>
EXHIBIT E
to the
Investment Advisory Contract
DG INVESTOR SERIES
DG Municipal Income Fund
For all services rendered by Adviser hereunder, the above-named Fund of
the DG Investor Series shall pay to Adviser and Adviser agrees to accept as full
compensation for all services rendered hereunder, an annual investment advisory
fee equal to 0.60 of 1% of the average daily net assets of the Fund.
The portion of the fee based upon the average daily net assets of the
Fund shall be accrued daily at the rate of 1/365th of 0.60 of 1% applied to the
daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this March 1, 1997.
Attest: ParkSouth Corporation
/s/ J. Clifford Harrison By: /s/ Raymond F. Thompson
Secretary President
Attest: DG Investor Series
/s/ John W. McGonigle By: /s/ J. Christopher Donahue
Secretary Executive Vice President
<PAGE>
EXHIBIT F
to the
Investment Advisory Contract
DG INVESTOR SERIES
DG Opportunity Fund
For all services rendered by Adviser hereunder, the above-named Fund of
the DG Investor Series shall pay to Adviser and Adviser agrees to accept as full
compensation for all services rendered hereunder, an annual investment advisory
fee equal to 0.95 of 1% of the average daily net assets of the Fund.
The portion of the fee based upon the average daily net assets of the
Fund shall be accrued daily at the rate of 1/365th of 0.95 of 1% applied to the
daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this March 1, 1997.
Attest: ParkSouth Corporation
/s/ J. Clifford Harrison By: /s/ Raymond F. Thompson
Secretary President
Attest: DG Investor Series
/s/ John W. McGonigle By: /s/ J. Christopher Donahue
Secretary Executive Vice President
<PAGE>
EXHIBIT G
to the
Investment Advisory Contract
DG INVESTOR SERIES
DG Prime Money Market Fund
For all services rendered by Adviser hereunder, the above-named Fund of
the DG Investor Series shall pay to Adviser and Adviser agrees to accept as full
compensation for all services rendered hereunder, an annual investment advisory
fee equal to 0.50% of 1% of the average daily net assets of the Fund.
The portion of the fee based upon the average daily net assets of the
Fund shall be accrued daily at the rate of 1/365th of 0.50 of 1% applied to the
daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this March 1, 1997.
Attest: ParkSouth Corporation
/s/ J. Clifford Harrison By: /s/ Raymond F. Thompson
Secretary President
Attest: DG Investor Series
/s/ John W. McGonigle By: /s/ J. Christopher Donahue
Secretary Executive Vice President
<PAGE>
EXHIBIT H
to the
Investment Advisory Contract
DG INVESTOR SERIES
DG International Equity Fund
For all services rendered by Adviser hereunder, the above-named Fund of
the DG Investor Series shall pay to Adviser and Adviser agrees to accept as full
compensation for all services rendered hereunder, an annual investment advisory
fee equal to 1% of the average daily net assets of the Fund.
The portion of the fee based upon the average daily net assets of the
Fund shall be accrued daily at the rate of 1/365th of 1% applied to the daily
net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this March 1, 1997.
Attest: ParkSouth Corporation
/s/ J. Clifford Harrison By: /s/ Raymond F. Thompson
Secretary President
Attest: DG Investor Series
/s/ John W. McGonigle By: /s/ J. Christopher Donahue
Secretary Executive Vice President
1
Exhibit 6(vii)
DISTRIBUTOR'S CONTRACT
Exhibit G
DG Investor Series
DG Prime Money Market Fund
The following provisions are hereby incorporated and made part of the
Distributor's Contract dated the 20th day of July, 1992, between DG Investor
Series and Federated Securities Corp. ("FSC") with respect to the Class of the
Fund set forth above.
1. The Trust hereby appoints FSC to engage in activities principally
intended to result in the sale of shares of the Class. Pursuant to this
appointment FSC is authorized to select a group of brokers ("Brokers") to sell
shares of the above-listed Class ("Shares"), at the current offering price
thereof as described and set forth in the respective prospectuses of the Trust,
and to render administrative support services to the Trust and its shareholders.
In addition, FSC is authorized to select a group of Administrators
("Administrators") to render administrative support services to the Trust and
its shareholders.
2. Administrative support services may include, but are not limited to, the
following eleven functions: (1) account openings: the Broker or Administrator
communicates account openings via computer terminals located on the Broker or
Administrator's premises; 2) account closings: the Broker or Administrator
communicates account closings via computer terminals; 3) enter purchase
transactions: purchase transactions are entered through the Broker or
Administrator's own personal computer or through the use of a toll-free
telephone number; 4) enter redemption transactions: Broker or Administrator
enters redemption transactions in the same manner as purchases; 5) account
maintenance: Broker or Administrator provides or arranges to provide accounting
support for all transactions. Broker or Administrator also wires funds and
receives funds for Trust share purchases and redemptions, confirms and
reconciles all transactions, reviews the activity in the Trust's accounts, and
provides training and supervision of its personnel; 6) interest posting: Broker
or Administrator posts and reinvests dividends to the Trust's accounts; 7)
prospectus and shareholder reports: Broker or Administrator maintains and
distributes current copies of prospectuses and shareholder reports; 8)
advertisements: the Broker or Administrator continuously advertises the
availability of its services and products; 9) customer lists: the Broker or
Administrator continuously provides names of potential customers; 10) design
services: the Broker or Administrator continuously designs material to send to
customers and develops methods of making such materials accessible to customers;
and 11) consultation services: the Broker or Administrator continuously provides
information about the product needs of customers.
3. During the term of this Agreement, the Trust will pay FSC for
services pursuant to this Agreement, a monthly fee computed at the annual rate
of .25% of the average aggregate net asset value of the Shares held during the
month. For the month in which this Agreement becomes effective or terminates,
there shall be an appropriate proration of any fee payable on the basis of the
number of days that the Agreement is in effect during the month.
4. FSC may from time-to-time and for such periods as it deems
appropriate reduce its compensation to the extent any Classes' expenses exceed
such lower expense limitation as FSC may, by notice to the Trust, voluntarily
declare to be effective.
5. FSC will enter into separate written agreements with various firms
to provide certain of the services set forth in Paragraph 1 herein. FSC, in its
sole discretion, may pay Brokers and Administrators a periodic fee in respect of
Shares owned from time to time by their clients or customers. The schedules of
such fees and the basis upon which such fees will be paid shall be determined
from time to time by FSC in its sole discretion.
6. FSC will prepare reports to the Board of Trustees of the Trust on a
quarterly basis showing amounts expended hereunder including amounts paid to
Brokers and Administrators and the purpose for such payments.
In consideration of the mutual covenants set forth in the Distributor's
Contract dated July 20, 1992 between DG Investor Series and Federated Securities
Corp., DG Investor Series executes and delivers this Exhibit on behalf of the
Funds, and with respect to the separate Classes of Shares thereof, set forth in
this Exhibit.
Witness the due execution hereof this 1st day of December, 1996.
ATTEST: DG INVESTOR SERIES
/s/ John W. McGonigle By: /s/ Edward C. Gonzales
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
/s/ Byron F. Bowman By:/s/ Edward C. Gonzales
Secretary Executive Vice President
(SEAL)
<PAGE>
Exhibit 6(viii)
Exhibit H
to the
Distributor's Contract
DG INVESTOR SERIES
DG International Equity Fund
The following provisions are hereby incorporated and made part of the
Distributor's Contract dated July 20, 1992, between DG Investor Series and
Federated Securities Corp. with respect to the Class of shares set forth above.
1. The Trust hereby appoints FSC to engage in activities principally
intended to result in the sale of shares of the above-listed Class
("Shares"). Pursuant to this appointment, FSC is authorized to select a
group of financial institutions ("Financial Institutions") to sell
Shares at the current offering price thereof as described and set forth
in the respective prospectuses of the Trust.
2. During the term of this Agreement, the Trust will pay FSC for services
pursuant to this Agreement, a monthly fee computed at the annual rate
of .25% of the average aggregate net asset value of the Shares held
during the month. For the month in which this Agreement becomes
effective or terminates, there shall be an appropriate proration of any
fee payable on the basis of the number of days that the Agreement is in
effect during the month.
3. 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.
4. 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 Financial Institutions 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.
5. FSC will prepare reports to the Board of Trustees of the Trust on a quarterly
basis showing amounts expended hereunder including amounts paid to Financial
Institutions and the purpose for such expenditures.
In consideration of the mutual covenants set forth in the Distributor's
Contract dated July 20, 1992 between DG Investor Series and Federated Securities
Corp., DG Investor Series executes and delivers this Exhibit on behalf of DG
International Equity Fund, first set forth in this Exhibit.
<PAGE>
Witness the due execution hereof this 1st day of March, 1997.
ATTEST: DG Investor Series
/s/ John W. McGonigle By: /s/ Edward C. Gonzales
Secretary President
ATTEST: FEDERATED SECURITIES CORP.
/s/ Byron F. Bowman By:/s/ David M. Taylor
Secretary Executive Vice President
Exhibit 9(vi)
Exhibit B
to the Shareholder Services Plan of
DG INVESTOR SERIES
DG International Equity Fund
This Plan is adopted by DG Investor Series with respect to the Class of Shares
of the Portfolio of the Trust as set forth above.
In compensation for the services provided pursuant to this Plan,
Providers will be paid a monthly fee computed at the annual rate of 0.15 of 1%
of the average aggregate net asset value of the Class of Shares of the Portfolio
of the Trust held during the month.
Witness the due execution hereof this 1st day of March, 1997.
DG INVESTOR SERIES
By:/s/ Edward C. Gonzales
President
<PAGE>
Exhibit C
to the Shareholder Services Plan of
DG INVESTOR SERIES
DG U.S. Government Money Market Fund
This Plan is adopted by DG Investor Series with respect to the Class of Shares
of the Portfolio of the Trust as set forth above.
In compensation for the services provided pursuant to this Plan,
Providers will be paid a monthly fee computed at the annual rate of 0.15 of 1%
of the average aggregate net asset value of the Class of Shares of the Portfolio
of the Trust held during the month.
Witness the due execution hereof this 1st day of March, 1997.
DG INVESTOR SERIES
By:/s/ Edward C. Gonzales
President
<PAGE>
Exhibit D
to the Shareholder Services Plan of
DG INVESTOR SERIES
DG Limited Term Government Income Fund
This Plan is adopted by DG Investor Series with respect to the Class of Shares
of the Portfolio of the Trust as set forth above.
In compensation for the services provided pursuant to this Plan,
Providers will be paid a monthly fee computed at the annual rate of 0.15 of 1%
of the average aggregate net asset value of the Class of Shares of the Portfolio
of the Trust held during the month.
Witness the due execution hereof this 1st day of March, 1997.
DG INVESTOR SERIES
By:/s/ Edward C. Gonzales
President
<PAGE>
Exhibit E
to the Shareholder Services Plan of
DG INVESTOR SERIES
DG Government Income Fund
This Plan is adopted by DG Investor Series with respect to the Class of Shares
of the Portfolio of the Trust as set forth above.
In compensation for the services provided pursuant to this Plan,
Providers will be paid a monthly fee computed at the annual rate of 0.15 of 1%
of the average aggregate net asset value of the Class of Shares of the Portfolio
of the Trust held during the month.
Witness the due execution hereof this 1st day of March, 1997.
DG INVESTOR SERIES
By:/s/ Edward C. Gonzales
President
<PAGE>
Exhibit F
to the Shareholder Services Plan of
DG INVESTOR SERIES
DG Equity Fund
This Plan is adopted by DG Investor Series with respect to the Class of Shares
of the Portfolio of the Trust as set forth above.
In compensation for the services provided pursuant to this Plan,
Providers will be paid a monthly fee computed at the annual rate of 0.15 of 1%
of the average aggregate net asset value of the Class of Shares of the Portfolio
of the Trust held during the month.
Witness the due execution hereof this 1st day of March, 1997.
DG INVESTOR SERIES
By:/s/ Edward C. Gonzales
President
<PAGE>
Exhibit G
to the Shareholder Services Plan of
DG INVESTOR SERIES
DG Municipal Income Fund
This Plan is adopted by DG Investor Series with respect to the Class of Shares
of the Portfolio of the Trust as set forth above.
In compensation for the services provided pursuant to this Plan,
Providers will be paid a monthly fee computed at the annual rate of 0.15 of 1%
of the average aggregate net asset value of the Class of Shares of the Portfolio
of the Trust held during the month.
Witness the due execution hereof this 1st day of March, 1997.
DG INVESTOR SERIES
By:/s/ Edward C. Gonzales
President
<PAGE>
Exhibit H
to the Shareholder Services Plan of
DG INVESTOR SERIES
DG Prime Money Market Fund
This Plan is adopted by DG Investor Series with respect to the Class of Shares
of the Portfolio of the Trust as set forth above.
In compensation for the services provided pursuant to this Plan,
Providers will be paid a monthly fee computed at the annual rate of 0.15 of 1%
of the average aggregate net asset value of the Class of Shares of the Portfolio
of the Trust held during the month.
Witness the due execution hereof this 1st day of March, 1997.
DG INVESTOR SERIES
By:/s/ Edward C. Gonzales
President
<PAGE>
Exhibit I
to the Shareholder Services Plan of
DG INVESTOR SERIES
DG Mid Cap Fund
This Plan is adopted by DG Investor Series with respect to the Class of Shares
of the Portfolio of the Trust as set forth above.
In compensation for the services provided pursuant to this Plan,
Providers will be paid a monthly fee computed at the annual rate of 0.15 of 1%
of the average aggregate net asset value of the Class of Shares of the Portfolio
of the Trust held during the month.
Witness the due execution hereof this 1st day of June, 1997.
DG INVESTOR SERIES
By: /s/ Edward C. Gonzales
President
-1-
Exhibit 9(iii)
SHAREHOLDER SERVICES AGREEMENT
AGREEMENT made as of the 1st day of March, 1997, by and between DG
Investor Series (the "Fund"), a Massachusetts business trust, having its
principal office and place of business at Federated Investors Tower, Pittsburgh,
PA 15222-3779, with respect to certain classes of shares of portfolios of the
Fund (individually, a "class" and collectively, "classes") set forth in exhibits
hereto and Federated Administrative Services, a Delaware business trust, having
its principal office and place of business at Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779 ("FAS").
1. The Fund hereby appoints FAS to render or cause to be rendered
personal services to shareholders of the classes and/or the maintenance of
accounts of shareholders of the classes ("Services"). In addition to providing
Services directly to shareholders of the classes, FAS is hereby appointed the
Fund's agent to select, negotiate and subcontract for the performance of
Services. FAS hereby accepts such appointments. FAS agrees to provide or cause
to be provided Services which, in its best judgment (subject to supervision and
control of the Fund's Board of Trustees), are necessary or desirable for
shareholders of the classes. FAS further agrees to provide the Fund, upon
request, a written description of the Services which FAS is providing hereunder.
2. During the term of this Agreement, the Fund will pay FAS and FAS
agrees to accept as full compensation for its services rendered hereunder a fee
at an annual rate, calculated daily and payable monthly, up to 0.15% of 1% of
average net assets of each class.
For the payment period in which this Agreement becomes effective or
terminates with respect to any class, there shall be an appropriate proration of
the monthly fee on the basis of the number of days that this Agreement is in
effect with respect to such class during the month. To enable the Fund to comply
with an applicable exemptive order, FAS represents that the fees received
pursuant to this Agreement will be disclosed to and authorized by any person or
entity receiving Services, and will not result in an excessive fee to FAS.
3. This Agreement shall continue in effect for one year from the date
of its execution, and thereafter for successive periods of one year only if the
form of this Agreement is approved at least annually by the Board of the Fund,
including a majority of the members of the Board of the Fund who are not
interested persons of the Fund and have no direct or indirect financial interest
in the operation of the Fund's Plan or in any related documents to the Plan
("Independent Board Members") cast in person at a meeting called for that
purpose.
4. Notwithstanding paragraph 3, this Agreement may be terminated
as follows:
(a) at any time, without the payment of any penalty, by the
vote of a majority of the Independent Board Members of the Fund or
by a vote of a majority of the outstanding voting securities of the
Fund as defined in the Investment Company Act of 1940 on sixty (60)
days' written notice to the parties to this Agreement;
(b) automatically in the event of the Agreement's
assignment as defined in the Investment Company Act of 1940; and
(c) by any party to the Agreement without cause by giving the
other party at least sixty (60) days' written notice of its
intention to terminate.
5. FAS agrees to obtain any taxpayer identification number
certification from each shareholder of the class to which it provides Services
that is required under Section 3406 of the Internal Revenue Code, and any
applicable Treasury regulations, and to provide the Fund or its designee with
timely written notice of any failure to obtain such taxpayer identification
number certification in order to enable the implementation of any required
backup withholding.
6. FAS shall not be liable for any error of judgment or mistake of law
or for any loss suffered by any class in connection with the matters to which
this Agreement relates, except a loss resulting from willful misfeasance, bad
faith or gross negligence on its part in the performance of its duties or from
reckless disregard by it of its obligations and duties under this Agreement. FAS
shall be entitled to rely on and may act upon advice of counsel (who may be
counsel for the Fund) on all matters, and shall be without liability for any
action reasonably taken or omitted pursuant to such advice. Any person, even
though also an officer, trustee, partner, employee or agent of FAS, who may be
or become a member of the Fund's Board, officer, employee or agent of the Fund,
shall be deemed, when rendering services to the Fund or acting on any business
of the Fund (other than services or business in connection with the duties of
FAS hereunder) to be rendering such services to or acting solely for the Fund
and not as an officer, trustee, partner, employee or agent or one under the
control or direction of FAS even though paid by FAS.
This Section 6 shall survive termination of this Agreement.
7. No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which an enforcement of the change, waiver, discharge or termination is
sought.
8. FAS is expressly put on notice of the limitation of liability as set
forth in the Declaration of Trust of the Fund and agrees that the obligations
assumed by the Fund pursuant to this Agreement shall be limited in any case to
the Fund and its assets and that FAS shall not seek satisfaction of any such
obligations from the shareholders of the Fund, the Trustees, Officers, Employees
or Agents of the Fund, or any of them.
9. The execution and delivery of this Agreement have been authorized by
the Trustees of FAS and signed by an authorized officer of FAS, acting as such,
and neither such authorization by such Trustees nor such execution and delivery
by such officer shall be deemed to have been made by any of them individually or
to impose any liability on any of them personally, and the obligations of this
Agreement are not binding upon any of the Trustees or shareholders of FAS, but
bind only the trust property of FAS as provided in the Declaration of Trust of
FAS.
10. Notices of any kind to be given hereunder shall be in writing
(including facsimile communication) and shall be duly given if delivered to the
Fund at the following address: Federated Investors Tower, Pittsburgh, PA
15222-3779, Attention: President and if delivered to FAS at Federated Investors
Tower, Pittsburgh, PA 15222-3779, Attention: President.
11. This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject hereof
whether oral or written. If any provision of this Agreement shall be held or
made invalid by a court or regulatory agency decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby.
Subject to the provisions of Sections 3 and 4, hereof, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and shall be governed by Pennsylvania law; provided,
however, that nothing herein shall be construed in a manner inconsistent with
the Investment Company Act of 1940 or any rule or regulation promulgated by the
Securities and Exchange Commission thereunder.
12. This Agreement may be executed by different parties on separate
counterparts, each of which, when so executed and delivered, shall be an
original, and all such counterparts shall together constitute one and the same
instrument.
13. This Agreement shall not be assigned by any party without the prior
written consent of FAS in the case of assignment by any Fund, or of the Funds in
the case of assignment by FAS, except that any party may assign to a successor
all of or a substantial portion of its business to a party controlling,
controlled by, or under common control with such party. Nothing in this Section
14 shall prevent FAS from delegating its responsibilities to another entity to
the extent provided herein.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
DG Investor Series
By: /s/ Charles L. Davis, Jr.
Title: Vice President
Attest: /s/ C. Grant Anderson
Title: Assistant Secretary
Federated Administrative Services
By: /s/ Thomas J. Ward
Title: Sr. Vice President
Attest: /s/ S. Elliott Cohan
Title: Assistant Secretary
<PAGE>
EXHIBIT A
to the
Shareholder Services Agreement
DG Investor Series
DG Equity Fund
This Shareholder Services Agreement is adopted by DG Investor Series
with respect to the class(es) of the Trust set forth above.
In compensation for the services provided pursuant to this Shareholder
Services Agreement, Federated Administrative Services will be paid a monthly fee
computed at the annual rate of .15 of 1% of the average aggregate net asset
value of the DG Equity Fund held during the month.
Witness the due execution hereof this 1st day of March, 1997.
DG Investor Series
By: /s/ Charles L. Davis, Jr.
Title: Vice President
<PAGE>
EXHIBIT B
to the
Shareholder Services Agreement
DG Investor Series
DG Government Income Fund
This Shareholder Services Agreement is adopted by DG Investor Series
with respect to the class(es) of the Trust set forth above.
In compensation for the services provided pursuant to this Shareholder
Services Agreement, Federated Administrative Services will be paid a monthly fee
computed at the annual rate of .15 of 1% of the average aggregate net asset
value of the DG Government Income Fund held during the month.
Witness the due execution hereof this 1st day of March, 1997.
DG Investor Series
By: /s/ Charles L. Davis, Jr.
Title: Vice President
<PAGE>
EXHIBIT C
to the
Shareholder Services Agreement
DG Investor Series
DG Limited Term Govenment Income Fund
This Shareholder Services Agreement is adopted by DG Investor Series
with respect to the class(es) of the Trust set forth above.
In compensation for the services provided pursuant to this Shareholder
Services Agreement, Federated Administrative Services will be paid a monthly fee
computed at the annual rate of .15 of 1% of the average aggregate net asset
value of the DG Limited Term Government Income Fund held during the month.
Witness the due execution hereof this 1st day of March, 1997.
DG Investor Series
By: /s/ Charles L. Davis, Jr.
Title: Vice President
<PAGE>
EXHIBIT D
to the
Shareholder Services Agreement
DG Investor Series
DG U.S. Government Money Market Fund
This Shareholder Services Agreement is adopted by DG Investor Series
with respect to the class(es) of the Trust set forth above.
In compensation for the services provided pursuant to this Shareholder
Services Agreement, Federated Administrative Services will be paid a monthly fee
computed at the annual rate of .15 of 1% of the average aggregate net asset
value of the DG U.S. Government Money Market Fund held during the month.
Witness the due execution hereof this 1st day of March, 1997.
DG Investor Series
By: /s/ Charles L. Davis, Jr.
Title: Vice President
<PAGE>
EXHIBIT E
to the
Shareholder Services Agreement
DG Investor Series
DG Municipal Income Fund
This Shareholder Services Agreement is adopted by DG Investor Series
with respect to the class(es) of the Trust set forth above.
In compensation for the services provided pursuant to this Shareholder
Services Agreement, Federated Administrative Services will be paid a monthly fee
computed at the annual rate of .15 of 1% of the average aggregate net asset
value of the DG Municipal Income Fund held during the month.
Witness the due execution hereof this 1st day of March, 1997.
DG Investor Series
By: /s/ Charles L. Davis, Jr.
Title: Vice President
<PAGE>
EXHIBIT F
to the
Shareholder Services Agreement
DG Investor Series
DG Prime Money Market Fund
This Shareholder Services Agreement is adopted by DG Investor Series
with respect to the class(es) of the Trust set forth above.
In compensation for the services provided pursuant to this Shareholder
Services Agreement, Federated Administrative Services will be paid a monthly fee
computed at the annual rate of .15 of 1% of the average aggregate net asset
value of the DG Prime Money Market Fund held during the month.
Witness the due execution hereof this 1st day of March, 1997.
DG Investor Series
By: /s/ Charles L. Davis, Jr.
Title: Vice President
<PAGE>
EXHIBIT G
to the
Shareholder Services Agreement
DG Investor Series
DG International Equity Fund
This Shareholder Services Agreement is adopted by DG Investor Series
with respect to the class(es) of the Trust set forth above.
In compensation for the services provided pursuant to this Shareholder
Services Agreement, Federated Administrative Services will be paid a monthly fee
computed at the annual rate of .15 of 1% of the average aggregate net asset
value of the DG International Equity Fund held during the month.
Witness the due execution hereof this 1st day of March, 1997.
DG Investor Series
By: /s/ Charles L. Davis, Jr.
Title: Vice President
<PAGE>
EXHIBIT H
to the
Shareholder Services Agreement
DG Investor Series
DG Mid Cap Fund
This Shareholder Services Agreement is adopted by DG Investor Series
with respect to the class(es) of the Trust set forth above.
In compensation for the services provided pursuant to this Shareholder
Services Agreement, Federated Administrative Services will be paid a monthly fee
computed at the annual rate of .15 of 1% of the average aggregate net asset
value of the DG Mid Cap Fund held during the month.
Witness the due execution hereof this 1st day of June, 1997.
DG Investor Series
By: /s/ Edward C. Gonzales
Title: President
DG Investor Series 3/1/97
Exhibit 5(iii)
DG INVESTOR SERIES
SUB-ADVISORY AGREEMENT
THIS AGREEMENT is made between ParkSouth Corporation, a Mississippi
corporation, (hereinafter referred to as "Advisor") and Lazard Freres Asset
Management, a division of Lazard Freres & Co. L.L.C., a New York limited
liability company, (hereinafter referred to as the "Sub-Adviser").
WITNESSETH:
That the parties hereto, intending to be legally bound hereby agree as
follows:
1. The Adviser in its capacity as investment adviser to the DG
International Equity Fund (the "Fund"), a portfolio of DG Investor Series
("Trust"), appoints the Sub-Adviser as a discretionary investment sub-adviser to
the Fund pursuant to the terms set forth in this Agreement.
2. (a) The Sub-Adviser will deal in good faith and with due diligence
and will use professional skills, care and judgment in the performance of its
duties under this Agreement. In so doing, the Sub-Adviser shall formulate and
implement a continuing program for the management of the assets of the Fund. The
Sub-Adviser shall amend and update such program from time to time as financial
and other economic conditions warrant. The Sub-Adviser shall make all
determinations with respect to the investment of the assets of the Fund and
shall take such steps as may be necessary to implement the same, including the
placement of purchase and sale orders on behalf of the Fund. The Adviser shall
be responsible for the administration of the investment activities of the Fund,
including compliance with the requirements of the Investment Company Act of
1940, except for the investment management activities specifically delegated to
the Sub-Adviser to this Agreement.
(b) The Sub-Adviser will adopt or has adopted a written code
of ethics complying with the requirements of Rule 17j-1 under the Investment
Company Act of 1940, will provide the Adviser with a copy of the code of ethics
and evidence of its adoption, and will make such reports to the Trust as
required by Rule 17j-1. The Sub-Adviser will also adopt or has adopted policies
and procedures sufficient to enable the Sub-Adviser to detect and prevent the
misuse of material, nonpublic information by the Sub-Adviser or any person
associated with the Sub-Adviser, in compliance with federal and state securities
laws.
(c) The Sub-Adviser will prepare, maintain, keep current and
preserve on behalf of the Trust and the Adviser all records concerning the
Sub-Adviser's activities in connection with the Fund that the Fund is required
by law to maintain, including, but not limited to, records required under
paragraphs (b)(5), (b)(6), (b)(9), (b)(10), and (f) of rule 31a-1 under the
Investment Company Act. Any records required to be maintained and preserved
pursuant to
<PAGE>
the provisions of Rule 13a-1 and Rule 31a-2 under the Investment Company Act of
1940 that are prepared by the Sub-Adviser on behalf of the Fund are the property
of the Fund and will be surrendered promptly on request to the Fund or any
person acting on behalf of the Trust during the term of this Agreement and at
any time after the termination of this Agreement; provided, however, that the
Sub-Adviser has the right to make and retain copies. The Sub-Adviser will comply
with all reasonable requests for information by the Adviser or the Trust's
officers or Board of Trustees, including information required for the Fund's
filings with the Securities and Exchange commission and state securities
commissions.
(d) The Sub-Adviser will promptly after filing with the
Securities and Exchange Commission an amendment to its Form ADV furnish a copy
of such amendment to the Trust and the Adviser.
(e) The Sub-Adviser will immediately notify the Adviser of the
occurrence of any event which would disqualify the Sub-Adviser from serving as
an investment adviser of an investment company pursuant to Section 9(a) of the
Investment Company Act of 1940 or otherwise.
3. (a) The Sub-Adviser's power to direct the investment and
reinvestment of the assets of the Fund shall be exercised in accordance with
applicable law, the Fund's governing documents and the investment objectives,
policies and restrictions set forth in the then-current Prospectus and Statement
of Additional Information (collectively the "Prospectus") relating to the Fund
contained in the Trust's Registration Statement under the Investment Company Act
of 1940 and the Securities Act of 1933, as amended. The Adviser may also place
additional limitations on the Sub-Adviser's investment decisions by written
notices to the Sub-Adviser. The Adviser agrees to provide promptly, or cause to
be provided promptly, to the Sub-Adviser a copy of the documents mentioned above
and all changes made to such documents.
(b) While the Sub-Adviser will have day-to-day responsibility
for the discretionary investment decisions to be made on behalf of the Fund, the
Sub-Adviser will be subject to oversight by the Adviser. Such oversight,
however, shall not require prior approval of discretionary investment decisions
made by the Sub-Adviser by the Adviser pursuant to the preceding sentence.
(c) The Trust retains the right, on reasonable prior written
notice to the Adviser and the Sub-Adviser, to amend the Fund's investment
objectives, policies and restrictions placed on the Sub-Adviser's investment
decisions. Similarly, the Adviser retains the right, on reasonable prior written
notice to the Sub-Adviser, to amend any additional limitations, if any, that
have been placed on the Sub-Adviser's investment decisions with respect to the
Fund. Upon receipt of such prior notice from either the Trust or the Adviser,
the Sub-Adviser will promptly notify both the Fund and the Adviser if adoption
of such amendment would interfere with the completion of any transaction
commenced on behalf of the Fund prior to the Sub- Adviser's receipt of the
notice. In the event that the Trust or the Adviser proceeds to amend the
<PAGE>
Fund's investment objectives, policies and restrictions or any additional
limitations after being notified by the Sub-Adviser of the pending transaction
commenced on behalf of the Fund, or in the event that the Trust or the Adviser
amends the Fund's investment objectives, policies and restrictions or any
additional limitations without providing reasonable prior notice to the Sub-
Adviser, the Sub-Adviser may complete such transaction unless doing so would
violate any applicable law, rule or regulations. In such an event, the
Sub-Adviser will not be responsible for any loss that may result from the
completion of the transaction.
(d) Except as may be qualified elsewhere in this Agreement, the Sub-Adviser
is hereby authorized, for and on behalf of the Fund, in its discretion, to:
(i) exercise any conversion and/or subscription rights available in
connection with any securities or other investments held in the Fund;
(ii) maintain all or part of the Fund's assets uninvested in short-term
income-producing instruments for such periods of time as shall be deemed
responsible and prudent by the Sub-Adviser;
(iii) instruct the Custodian, to deliver for cash received, securities or
other cash and/or securities instruments sold, exchanged, redeemed or otherwise
disposed of from the Fund, and to pay cash for securities or other cash and/or
securities instruments delivered to the Custodian and/or credited to the Fund
upon acquisition of the same for the Fund;
(iv) determine how to vote all proxies received with respect to securities
held in the Fund and direct the Custodian as to the voting of such proxies; and
(v) generally, perform any other act necessary to enable the Sub-Adviser to
carry out its obligations under the Agreement.
4. (a) The Sub-Adviser shall select the brokers and dealers through
whom transactions on behalf of the Fund will be executed and the markets on or
in which such transactions will be executed. The Sub-Adviser shall place, in the
name of the Fund or its nominee (or appropriate foreign equivalent), all such
orders for the purchase or sale or of securities due to or from the Fund with
any broker and/or dealer who deals in such securities, all in the manner as set
forth below and in accordance with such operational procedures as may be agreed
to from time to time by the Adviser and the Sub-Adviser.
(b) In placing orders with brokers and/or dealers, the
Sub-Adviser shall use its best efforts to obtain the best net price and the most
favorable execution of its orders, after taking into account all factors it
deems relevant, including the breadth of the market in the security, the price
of the security, the financial condition and execution capability of the broker
and/or dealer, and the reasonableness of the commission, if any, both for the
specific transaction and on a continuing basis. Consistent with this obligation,
the Sub-Adviser may, to the extent permitted
<PAGE>
by law, purchase and sell portfolio securities using brokers who provide
brokerage and research services (within the meaning of Section 28(e) of the
Securities and Exchange Act of 1934) to or for the benefit of the Fund Account
and/or other accounts over which the Sub-Adviser or the Adviser exercises
investment discretion. The Sub-Adviser is authorized to pay a broker who
provides such brokerage and research services a commission for effecting a
securities transaction which is in excess of the amount of commission another
broker would have charged for effecting that transaction, if the Sub-Adviser
determines in good faith that such commission was reasonable in relation to the
value of brokerage and research services provided by such broker. This
determination may be viewed in terms of either that particular transactions or
of the overall responsibilities of the Sub-Adviser with respect to the account
as to which it exercises investment discretion.
(c) Notwithstanding the foregoing, the Board of Trustees and
the Adviser periodically shall review the commissions paid by the Fund and
determine whether those commissions were reasonable in relation to the brokerage
and research services received. In addition, the Board of Trustees of the Trust,
in its discretion, may instruct the Sub-Adviser to effect all or a portion of
its securities transactions with one or more brokers and/or dealers selected by
the Board of Trustees, if it determines that the use of such brokers and/or
dealers is in the best interest of the Fund.
5. It is understood that certain other clients (including other funds,
portfolios and accounts) of the Sub-Adviser may have investment objectives and
policies similar to those of the Fund and that the Sub-Adviser may, from time to
time, make recommendations that result in the purchase (or sale) of a particular
security by its other clients and the Fund during the same period of time. If
transactions on behalf of more than one client during the same period increase
the demand for securities being purchased or the supply of securities being
sold, there may be an adverse effect on price or quantity. In such event, the
Sub-Adviser shall allocate the securities or investments to be purchased or
sold, as well as the expense incurred in the transactions (including price) in a
manner the Sub-Adviser considers equitable and consistent with its obligations
to the Fund and the Sub-Adviser's other clients.
6. The Sub-Adviser agrees that it will only enter into transactions
that are covered by Section 10(f) or Section 17(e) of the Investment Company Act
of 1940 if it has (i) complied with Rule 10f-3 or Rule 17e-1 thereunder,
respectively, or the terms of an appropriate exemptive order issued to the Fund
by the SEC, and (ii) has compiled with the procedures adopted thereunder by the
Board of Directors of the Fund which may, pursuant to authority granted by the
Fund, by supplemented by interpretive guidelines of the Adviser. Aside from
parties that are known or should be known by the Sub-Adviser, the Adviser shall
promptly notify the Sub- Adviser of any additional parties with whom engaging in
a transaction for the Fund would result in a violation of the Investment Company
Act of 1940.
7. For its services under this Agreement, Sub-Adviser shall receive
from Adviser an annual fee (the "Sub-Advisory Fee"), as set forth in the exhibit
hereto.
<PAGE>
8. This Agreement shall begin for the Fund on the date that the parties
execute the exhibit to this Agreement relating to such Fund and shall continue
in effect for the Fund for two years from the date of its execution and from
year to year thereafter, subject to the provisions for termination and all of
the other terms and conditions hereof if: (a) such continuation shall be
specifically approved at least annually by the vote of a majority of the
Trustees of the Trust, including a majority of the Trustees who are not parties
to this Agreement or interested persons of any such party (other than as
Trustees of the Trust) cast in person at a meeting called for that purpose; and
(b) the Adviser shall not have notified the Trust in writing at least sixty (60)
days prior to the anniversary date of this Agreement in any year thereafter that
it does not desire such continuation with respect to the Fund.
9. Notwithstanding any provision in this Agreement, it may be
terminated at any time without the payment of any penalty: (a) by the Trustees
of the Trust or by a vote of a majority of the outstanding voting securities (as
defined in Section 2(a)(42) of the Act) of the Fund on sixty (60) days' written
notice to the Adviser; (b) by the Sub-Adviser or the Adviser upon 60 days'
written notice to the other party to the Agreement. Termination of this
Agreement will not affect (i) the validity of any action previously taken by the
Adviser or the Sub-Adviser under this Agreement or (ii) liabilities or
obligations of the parties from transactions initiated before termination of
this Agreement.
10. This Agreement shall automatically terminate:
(a) in the event of its assignment (as defined in the Investment Company
Act of 1940); or
(b) in the event of termination of the Investment Advisory Contract for any
reason whatsoever.
11. So long as both the Adviser and the Sub-Adviser shall be legally
qualified to act as an investment adviser to the Fund, neither the Adviser nor
the Sub-Adviser shall act as an investment adviser (as such term is defined in
the Investment Company Act of 1940) to the Fund except as provided herein and in
the Investment Advisory Contract or in such other manner as may be expressly
agreed between the Adviser and the Sub-Adviser.
Provided, however, that if the Adviser or Sub-Adviser shall resign
prior to the end of any term of this Agreement or for any reason be unable or
unwilling to serve for a successive term which has been approved by the Trustees
of the Trust pursuant to the provisions of Paragraph 8 of this Agreement or
Paragraph 6 of the Investment Advisory Contract, the remaining party, the
Sub-Adviser or the Adviser as the case may be, shall not be prohibited from
serving as an investment adviser to such Fund by reason of the provisions of
this Paragraph 11.
12. This Agreement may be amended from time to time by agreement of the
parties hereto provided that such amendment shall be approved both by the vote
of a majority of
<PAGE>
Trustees of the Trust, including a majority of Trustees who are not parties to
this Agreement or interested persons, as defined in Section 2(a)(19) of the
Investment Company Act of 1940, of any such party at a meeting called for that
purpose, and, where required by Section 15(a)(2) of the Investment Company Act
of 1940, by the holders of a majority of the outstanding voting securities (as
defined in Section 2(a)(42) of the Investment Company Act of 1940) of the Fund.
13. This Agreement shall be construed in accordance with the laws of
the Commonwealth of Pennsylvania without giving effect to the choice of law
provisions thereof, to the extent that such laws are consistent with provisions
of the Investment Company Act of 1940 and the regulations thereunder. The
failure of either party to insist, in one or more instances, upon strict
performance of the obligations of this Agreement, or to exercise any rights
contained herein, shall not be construed as a waiver, or relinquishment for the
future of such obligation of right, which shall remain and continue in full
force and effect. Should any part of this Agreement be held or made invalid by a
court decision, statute, regulation, or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
<PAGE>
Exhibit A
DG Investor Series
DG International Equity Fund
Sub-Advisory Agreement
For all services rendered by Sub-Adviser hereunder, Adviser shall pay
Sub-Adviser a Sub-Advisory Fee equal to .50% (one-half of one percent) of
the average daily net assets of the above-mentioned portfolio. The Sub-Advisory
Fee shall be accrued daily, and paid Monthly as set forth in the Primary
Advisory Contract dated March 1, 1997.
This Exhibit duly incorporates by reference the Sub-Advisory Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Exhibit to be
executed on their behalf by their duly authorized officers, and their corporate
seals to be affixed hereto this 1st day of March, 1997.
ATTEST: ParkSouth Corporation
/s/ J. Clifford Harrison By: /s/ Raymond F. Thompson
Secretary Chief Executive Officer
Lazard Freres Asset Management
/s/ William G. Butterly By: /s/ John R. Reese
Vice President, Legal Affairs Managing Director
DG Investor Series 3/1/97
Exhibit 15(h)
EXHIBIT H
to the
Distribution Plan
DG Investor Series
DG International Equity Fund
This Distribution Plan is adopted by between DG Investor Series
with respect to the Shares of the DG International Equity 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
the average aggregate net asset value of the DG International Equity
Fund held during the month.
Witness the due execution hereof this 1st day of March, 1997.
DG Investor Series
By:/s/ Edward C. Gonzales
President
<PAGE>
Exhibit 15(i)
EXHIBIT I
to the
Distribution Plan
DG Investor Series
DG Mid Cap Fund
This Distribution Plan is adopted by between DG Investor Series
with respect to the Shares of the DG Mid Cap 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
the average aggregate net asset value of the DG Mid Cap Fund held
during the month.
Witness the due execution hereof this 1st day of June, 1997.
DG Investor Series
By: /s/ Edward C. Gonzales
President
