1933 Act File No. 33-49701
1940 Act File No. 811-7065
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No.
Post-Effective Amendment No. 1 X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 1 X
THE PLANTERS FUNDS
(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:
X immediately upon filing pursuant to paragraph (b)
on _________________ pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)
on pursuant to paragraph (a) of Rule 485.
Registrant has filed with the Securities and Exchange Commission a
declaration pursuant to Rule 24f-2 under the Investment Company Act of
1940, and:
filed the Notice required by that Rule on _________________; or
X intends to file the Notice required by that Rule on or about
September 15, 1994; or
during the most recent fiscal year did not sell any securities
pursuant to Rule 24f-2 under the Investment Company Act of 1940, and,
pursuant to Rule 24f-2(b)(2), need not file the Notice.
Copies to:
Thomas J. Donnelly, Esquire Charles H. Morin, Esquire
Houston, Houston & Donnelly Dickstein, Shapiro & Morin
2510 Centre City Tower 2101 L Street, N.W.
650 Smithfield Street Washington, D.C. 20037
Pittsburgh, Pennsylvania 15222
CROSS REFERENCE SHEET
This Amendment to the Registration Statement of THE PLANTERS
FUNDS, which consists of one portfolio, Tennessee Tax-Free Bond Fund, is
comprised of the following:
PART A. INFORMATION REQUIRED IN A PROSPECTUS.
Prospectus Heading
(Rule 404(c) Cross Reference)
Item 1. Cover Page Cover Page.
Item 2. Synopsis Summary of Fund Expenses.
Item 3. Condensed Financial
Information Financial Highlights.
Item 4. General Description of
Registrant General Information; Investment
Information; Investment Objective;
Investment Policies; Investment
Limitations.
Item 5. Management of the Fund The Planters Funds Information;
Management of the Trust;
Distribution of Fund Shares;
Administration of the Fund; Expenses
of the Fund.
Item 6. Capital Stock and Other
Securities Dividends and Distributions;
Shareholder Information; Voting
Rights; Massachusetts Partnership
Law; Effect of Banking Laws; Tax
Information; Federal Income Tax;
State of Tennessee Taxes; Other
State and Local Taxes.
Item 7. Purchase of Securities Being
Offered Net Asset Value; Investing in the
Fund; Minimum Investment Required;
What Shares Cost; Purchases at Net
Asset Value; Dealer Concessions;
Share Purchases; Reducing the Sales
Charge.
Item 8. Redemption or Repurchase Redeeming Shares; By Telephone; By
Mail; Accounts With Low Balances.
Item 9. Pending Legal Proceedings None.
PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION.
Item 10. Cover Page Cover Page.
Item 11. Table of Contents Table of Contents.
Item 12. General Information and
History General Information About the Fund.
Item 13. Investment Objectives and
Policies Investment Objective and Policies.
Item 14. Management of the Fund Management of The Planters Funds.
Item 15. Control Persons and Principal
Holders of Securities Not Applicable.
Item 16. Investment Advisory and Other
Services Investment Advisory Services;
Administrative Services.
Item 17. Brokerage Allocation Brokerage Transactions.
Item 18. Capital Stock and Other
Securities Not Applicable.
Item 19. Purchase, Redemption and
Pricing of Securities Being
Offered Purchasing Shares; Determining Net
Asset Value; Redeeming Shares.
Item 20. Tax Status Tax Status.
Item 21. Underwriters Not Applicable.
Item 22. Calculation of Performance
Data Total Return; Yield; Tax-Equivalent
Yield; Performance Comparisons.
Item 23. Financial Statements Filed in Part A.
TENNESSEE TAX-FREE BOND FUND
(A PORTFOLIO OF THE PLANTERS FUNDS)
PROSPECTUS
The shares of Tennessee Tax-Free Bond Fund (the "Fund") offered by this
prospectus represent interests in a non-diversified portfolio of securities
which is an investment portfolio in The Planters Funds (the "Trust"), an
open-end management investment company (a mutual fund).
The investment objective of the Fund is to provide current income exempt from
federal income tax and personal income taxes imposed by the state of Tennessee
and Tennessee municipalities. The Fund invests primarily in a portfolio of
municipal securities which are exempt from federal income tax and personal
income taxes imposed by the state of Tennessee and Tennessee municipalities
("Tennessee Municipal Securities"). These securities include those issued by or
on behalf of the state of Tennessee and Tennessee municipalities as well as
those issued by states, territories and possessions of the United States that
are not issued by or on behalf of Tennessee and its political subdivisions, but
which are exempt from Tennessee state income tax.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF UNION
PLANTERS NATIONAL BANK, ARE NOT ENDORSED OR GUARANTEED BY UNION PLANTERS
NATIONAL BANK, AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION
("FDIC"), THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY. INVESTMENT
IN THESE SHARES INVOLVES INVESTMENT RISKS, INCLUDING THE 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 February 28,
1994 with the Securities and Exchange Commission. The information contained in
the Statement of Additional Information is incorporated by reference into this
prospectus. You may request a copy of the Statement of Additional Information
free of charge, obtain other information, or make inquiries about the Fund by
calling Federated Securities Corp. at 1-800-618-8573.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus dated February 28, 1994
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
SUMMARY OF FUND EXPENSES 1
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS 2
- ------------------------------------------------------
GENERAL INFORMATION 3
- ------------------------------------------------------
INVESTMENT INFORMATION 3
- ------------------------------------------------------
Investment Objective 3
Investment Policies 3
Acceptable Investments 3
Characteristics 3
Participation Interests 4
Variable Rate Municipal Securities 4
Municipal Leases 4
Restricted and Illiquid Securities 5
Investing in Securities of Other
Investment Companies 5
When-Issued and Delayed
Delivery Transactions 5
Temporary Investments 5
Tennessee Municipal Securities 6
Investment Risks 6
Non-Diversification 6
Investment Limitations 7
THE PLANTERS FUNDS INFORMATION 7
- ------------------------------------------------------
Management of the Trust 7
Board of Trustees 7
Investment Adviser 7
Advisory Fees 7
Adviser's Background 7
Portfolio Managers 8
Distribution of Fund Shares 8
Administrative Arrangements 8
Administration of the Fund 8
Administrative Services 8
Custodian 9
Transfer Agent, Dividend
Disbursing Agent and
Portfolio Accounting Services 9
Legal Counsel 9
Independent Auditors 9
Expenses of the Fund 9
NET ASSET VALUE 9
- ------------------------------------------------------
INVESTING IN THE FUND 9
- ------------------------------------------------------
Share Purchases 9
Minimum Investment Required 10
What Shares Cost 10
Purchases at Net Asset Value 10
Dealer Concessions 11
Reducing the Sales Charge 11
Quantity Discounts and Accumulated
Purchases 11
Letter of Intent 11
Reinvestment Privilege 12
Certificates and Confirmations 12
Dividends and Distributions 12
REDEEMING SHARES 12
- ------------------------------------------------------
By Telephone 12
By Mail 13
Signatures 13
Accounts with Low Balances 13
SHAREHOLDER INFORMATION 14
- ------------------------------------------------------
Voting Rights 14
Massachusetts Partnership Law 14
EFFECT OF BANKING LAWS 14
- ------------------------------------------------------
TAX INFORMATION 15
- ------------------------------------------------------
Federal Income Tax 15
State of Tennessee Taxes 15
Other State and Local Taxes 16
PERFORMANCE INFORMATION 16
- ------------------------------------------------------
FINANCIAL STATEMENTS 17
- ------------------------------------------------------
ADDRESSES Inside Back Cover
- ------------------------------------------------------
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ESTIMATED SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)............................. 4.00%*
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price)................................................................... None
Deferred Sales Load (as a percentage of the lesser of original purchase price
or redemption proceeds, as applicable)................................................................ None
Redemption Fees (as a percentage of amount redeemed, if applicable)..................................... None
Exchange Fee............................................................................................ None
ANNUAL FUND OPERATING EXPENSES**
(As a percentage of projected average net assets)
Management Fee (after waiver) (1)....................................................................... 0.13%
12b-1 Fees.............................................................................................. None
Other Expenses (after waiver and reimbursement) (1)..................................................... 0.62%
Total Fund Operating Expenses (2).............................................................. 0.75%
</TABLE>
(1) The estimated management fee and other expenses have been reduced to reflect
the anticipated voluntary waiver of the investment advisory fee by the
investment adviser and of the administrative personnel and services fee by
the administrator. The investment adviser and administrator can terminate
this voluntary waiver at any time at their sole discretion. The maximum
management fee is 0.75%.
(2) Total Fund operating expenses are estimated to be 1.37% absent the
anticipated voluntary waivers detailed in Note (1).
* During the period from February 1, 1994, through and including September 30,
1994, the maximum sales load imposed on the purchase of shares of the Fund
will be 2.00% of the offering price of the shares purchased.
** Expenses in this table are estimated based on expenses expected to be
incurred during the fiscal year ending July 31, 1994. During the course of
this period, expenses may be more or less than the average amount shown.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF THE FUND WILL BEAR, EITHER
DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE VARIOUS COSTS AND
EXPENSES, SEE "THE PLANTERS FUNDS INFORMATION," AND "INVESTING IN THE FUND."
Wire-transferred redemptions of less than $5,000 may be subject to additional
fees.
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years
<S> <C> <C>
You would pay the following expenses on a $1,000 investment assuming (1) 5% annual return; (2)
redemption at the end of each time period; and (3) payment of the maximum sales load........... $47 $63
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
TENNESSEE TAX-FREE BOND FUND
(A PORTFOLIO OF THE PLANTERS FUNDS)
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED
JULY 31,
1994*
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.50
- --------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS 0.19
- --------------------------------------------------------------------------------------------------
Net investment income
- --------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.30
- -------------------------------------------------------------------------------------------------- ---------------
Total from investment operations 0.49
- --------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
- --------------------------------------------------------------------------------------------------
Dividends to shareholders from net investment income (0.17)
- -------------------------------------------------------------------------------------------------- ---------------
NET ASSET VALUE, END OF PERIOD $ 10.82
- -------------------------------------------------------------------------------------------------- ---------------
TOTAL RETURN** 4.84%
- --------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------------------------------------------------------------
Expenses 0.60%(a)
- --------------------------------------------------------------------------------------------------
Net investment income 4.22%(a)
- --------------------------------------------------------------------------------------------------
Expense waiver/reimbursement (b) 0.98%(a)
- --------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $39,670
- --------------------------------------------------------------------------------------------------
Portfolio turnover rate 14 %
- --------------------------------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from August 30, 1993 (date of initial
public investment) to January 31, 1994.
** Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(a) Computed on an annualized basis.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 5).
(See Notes which are an integral part of the Financial Statements)
GENERAL INFORMATION
- --------------------------------------------------------------------------------
The Planters Funds (the "Trust") was established as a Massachusetts business
trust under a Declaration of Trust dated May 14, 1993. The Declaration of Trust
permits the Trust to offer separate series of shares of beneficial interest
representing interests in separate portfolios of securities. The shares in any
one portfolio may be offered in separate classes. With respect to this Fund, as
of the date of this prospectus, the Trustees have not established separate
classes of shares.
Shares of the Fund are designed for customers of financial institutions such as
broker/dealers, banks, fiduciaries, and investment advisers as a convenient
means of accumulating an interest in a professionally managed, non-diversified
portfolio investing primarily in Tennessee Municipal Securities. A minimum
initial investment of $1,000 is required. The Fund is not likely to be a
suitable investment for non-Tennessee taxpayers or retirement plans since the
Fund invests in Tennessee Municipal Securities.
Except as otherwise noted in this prospectus, shares of the Fund are sold at net
asset value plus a sales charge and are redeemed at net asset value.
INVESTMENT INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide current income exempt from
federal income tax and personal income taxes imposed by the state of Tennessee
and Tennessee municipalities. The investment objective cannot be changed without
approval of a majority of the Fund's shares. 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.
Interest income of the Fund that is exempt from the income tax described above
retains its exempt status when distributed to the Fund's shareholders. However,
income distributed by the Fund may not necessarily be exempt from state or
municipal taxes in states other than Tennessee.
INVESTMENT POLICIES
The Fund pursues its investment objective by investing primarily in a portfolio
of Tennessee Municipal Securities. As a matter of investment policy, which may
not be changed without shareholder approval, under normal market conditions at
least 80% of the Fund's income will be exempt from federal income tax (including
alternative minimum tax) and personal income tax imposed by the state of
Tennessee and Tennessee municipalities. Unless indicated otherwise, the other
investment policies of the Fund described below may be changed by the Trustees
without approval of shareholders. Shareholders will be notified before any
material changes in these policies become effective.
ACCEPTABLE INVESTMENTS. The Tennessee Municipal Securities in which the Fund
invests are:
obligations issued by or on behalf of the state of Tennessee, its
political subdivisions, or agencies;
debt obligations of any state, territory, or possession of the United
States, including the District of Columbia or any political subdivision
of any of these; and
participation interests, as described below, in any of the above
obligations,
the interest from which is, in the opinion of bond counsel for the issuers or in
the opinion of officers of the Fund and/or the investment adviser to the Fund,
exempt from both federal income tax and the personal income taxes imposed by the
state of Tennessee and Tennessee municipalities.
CHARACTERISTICS. The Tennessee Municipal Securities in which the Fund
invests are rated "investment grade," i.e., Baa or above by Moody's
Investor Service, Inc. ("Moody's") or BBB or above by Standard & Poor's
Corporation ("S&P") or Fitch Investors Service, Inc. ("Fitch"). A
description of the rating categories is contained in the Appendix to the
Statement of Additional Information. In certain cases, the Fund's adviser
may choose bonds that are unrated if it judges the bonds to be of
comparable quality to one of the foregoing rating categories. 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. If the Fund purchases an investment grade bond, and the rating of
such bond is subsequently downgraded so that the bond is no longer
classified as investment grade, the Fund is not required to sell the bond,
but will consider whether such action is appropriate. As a matter of
investment policy, under normal market conditions, the Fund will invest at
least 65% of its assets in bonds.
PARTICIPATION INTERESTS. The Fund may purchase participation interests in
Tennessee Municipal Securities from financial institutions such as commercial
banks, savings and loan associations and insurance companies. These
participation interests may take the form of participations, beneficial
interests in a trust, partnership interests or any other form of indirect
ownership that allows the Fund to treat the income from the investment as exempt
from federal income tax. The financial institutions from which the Fund
purchases participation interests frequently provide or secure irrevocable
letters of credit or guarantees to assure that the participation interests are
of high quality.
VARIABLE RATE MUNICIPAL SECURITIES. Some of the Tennessee Municipal Securities
which the Fund purchases may have variable interest rates. Variable interest
rates are ordinarily based on a published interest rate or interest rate index.
Many variable rate municipal securities are subject to payment of principal on
demand by the Fund in not more than seven days. All variable rate municipal
securities will meet the quality standards for the Fund. The Fund's investment
adviser has been instructed by the Trustees to monitor the pricing, quality, and
liquidity of the variable rate municipal securities, including participation
interests held by the Fund, on the basis of published financial information and
reports of the rating agencies and other analytical services.
MUNICIPAL LEASES. Municipal leases are obligations issued by state and local
governments or authorities to finance the acquisition of equipment and
facilities and may be considered to be illiquid. They may take the form of a
lease, an installment purchase contract, a conditional sales contract or a
participation certificate on any of the above. The lease payments and other
rights under the lease provide for and secure the payments on the certificates.
Lease obligations may be limited by municipal charter or the nature of the
appropriation for the lease. In particular, lease obligations may be subject to
periodic appropriation. If the entity does not appropriate funds for future
lease payments, the entity cannot be compelled to make such payments.
Furthermore, a lease may provide that the certificate trustee cannot accelerate
lease obligations upon default. The trustee would only be able to enforce lease
payments as they become due. In the event of a default or failure of
appropriation, it is unlikely that the trustee would be able to obtain an
acceptable substitute source of payment.
If the Fund purchases unrated municipal leases, the Trustees will be responsible
for determining on an ongoing basis, the credit quality of such leases and the
likelihood that a lease will not be cancelled.
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 restriction on resale under federal securities laws. To the extent
these securities are deemed to be illiquid, the Fund will limit its purchases,
together with other securities considered to be illiquid, to 15% of its net
assets.
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES. The Fund may invest in
the securities of other investment companies, but it will not own more than 3%
of the total outstanding voting stock of any investment company, 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 invest
in other investment companies primarily for the purpose of investing short-term
cash which has not yet been invested in other portfolio instruments. The adviser
will waive its investment advisory fee on assets invested in securities of
open-end investment companies.
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. In when-issued and delayed delivery transactions, the Fund relies
on the seller to complete the transaction. The seller's failure to complete the
transaction may cause the Fund to miss a price or yield considered to be
advantageous.
TEMPORARY INVESTMENTS. The Fund normally invests its assets so that at least
80% of its annual interest income is exempt from federal income tax and the
personal income taxes imposed by the state of Tennessee and Tennessee
municipalities and at least 65% of the value of its total assets will be
invested in bonds. From time to time, during periods of other than normal market
conditions, the Fund may invest in short-term tax exempt or taxable temporary
investments. These temporary investments include: notes issued by or on behalf
of municipal or corporate issuers; obligations issued or guaranteed by the U.S.
government, its agencies, or instrumentalities; other debt securities;
commercial paper; certificates of deposit of banks; and repurchase agreements
(arrangements in which the organization selling the Fund a bond or temporary
investment agrees at the time of sale to repurchase it at a mutually agreed upon
time and price).
The investment adviser will limit temporary investments to those rated within
the investment grade categories described under "Acceptable
Investments--Characteristics" (if rated) or of comparable quality (if unrated).
Although the Fund is permitted to make taxable, temporary investments, there is
no current intention of generating income subject to federal income tax or
personal income taxes imposed by the state of Tennessee or Tennessee
municipalities.
TENNESSEE MUNICIPAL SECURITIES
Tennessee Municipal Securities are generally issued to finance public works,
such as airports, bridges, highways, housing, hospitals, mass transportation
projects, schools, streets, and water and sewer works. They are also issued to
repay outstanding obligations, to raise funds for general operating expenses,
and to make loans to other public institutions and facilities.
Tennessee Municipal Securities include industrial development bonds issued by or
on behalf of public authorities to provide financing aid to acquire sites or
construct and equip facilities for privately or publicly owned corporations. The
availability of this financing encourages these corporations to locate within
the sponsoring communities and thereby increases local employment.
The two principal classifications of municipal securities are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its full faith and credit and taxing power for the payment of
principal and interest. However, interest on and principal of revenue bonds are
payable only from the revenue generated by the facility financed by the bond or
other specified sources of revenue. Revenue bonds do not represent a pledge of
credit or create any debt of or charge against the general revenues of a
municipality or public authority. Industrial development bonds are typically
classified as revenue bonds.
INVESTMENT RISKS
Yields on municipal securities depend on a variety of factors, including: the
general conditions of the short-term municipal bond market and the municipal
bond market; the size and maturity of the particular offering; and the rating of
the issue. Further, any adverse economic conditions or developments affecting
the issuer or its municipalities could impact the Fund's portfolio. The ability
of the Fund to achieve its investment objective also depends on the continuing
ability of the issuers of Tennessee Municipal Securities and participation
interests, or the credit enhancers of either, to meet their obligations for the
payment of interest and principal when due.
Investing in municipal securities which meet the Fund's quality standards may
not be possible if the issuer or its municipalities do not maintain their
current credit ratings. In addition, certain constitutional amendments,
legislative measures, executive orders, administrative regulations, and voter
initiatives could result in adverse consequences affecting municipal securities.
NON-DIVERSIFICATION
The Fund is a non-diversified investment portfolio. As such, there is no limit
on the percentage of assets which can be invested in any single issuer. An
investment in the Fund, therefore, will entail greater risk than investment in a
diversified portfolio of securities because the higher percentage of investments
among fewer issuers may result in greater fluctuation in the total market value
of the Fund's portfolio. Any economic, political, or regulatory developments
affecting the value of the securities in the Fund's portfolio will have a
greater impact on the total value of the portfolio than would be the case if the
portfolio were diversified among more issuers.
The Fund intends to comply with Subchapter M of the Internal Revenue Code. This
undertaking requires that at the end of each quarter of the taxable year: (a)
with regard to at least 50% of the Fund's
total assets, no more than 5% of its total assets are invested in the securities
of a single issuer; and
(b) no more than 25% of its total assets are invested in the securities of a
single issuer.
INVESTMENT LIMITATIONS
The Fund will not borrow money directly or through reverse repurchase agreements
(arrangements in which the Fund sells a 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 up to
one-third of the value of its total assets and pledge assets as necessary to
secure such borrowings.
The above investment limitation cannot be changed without shareholder approval.
THE PLANTERS FUNDS INFORMATION
- --------------------------------------------------------------------------------
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees ("Trustees").
The Trustees are responsible for managing the Trust's business affairs and for
exercising all the Trust's powers except those reserved for the shareholders.
The Executive Committee of the Board of Trustees handles the Board's
responsibilities between meetings of the Board.
INVESTMENT ADVISER. Pursuant to an investment advisory contract with the Trust,
investment decisions for the Fund are made by Union Planters National Bank
("Union Planters" or the "adviser"), the Fund's adviser, subject to direction by
the Trustees. The adviser continually conducts investment research and
supervision for the Fund and is responsible for the purchase or sale of
portfolio instruments, for which it receives an annual fee from the assets of
the Fund.
From time to time, to the extent consistent with the objective, policies and
restrictions of the Fund, the Fund may invest in securities of issuers with
which the adviser has a lending relationship.
ADVISORY FEES. The adviser receives an investment advisory fee at an
annual rate equal to 0.75% of the Fund's average daily net assets. The fee
paid by the Fund, while higher than the advisory fees paid by other mutual
funds in general, is comparable to fees paid by other mutual funds with
similar objectives and policies. The adviser has undertaken to reimburse
the Fund, up to the amount of the advisory fee, for operating expenses in
excess of limitations established by certain states. The adviser may
voluntarily choose to waive a portion of its fee or reimburse the Fund for
certain other expenses, but reserves the right to terminate such waiver or
reimbursement at any time at its sole discretion.
ADVISER'S BACKGROUND. Founded in 1869, Union Planters, a national banking
association, is a wholly-owned subsidiary of Union Planters Corporation
(the "Corporation") a multi-bank holding company headquartered in Memphis,
Tennessee. Union Planters is a commercial bank offering a wide range of
banking services to its customers. The adviser has been managing trust
assets for over 80 years. As of December 31, 1992, the Trust Group of Union
Planters had approximately $900 million under administration, of which it
had investment discretion over approximately $490 million. The adviser has
served as investment adviser to the Fund since its inception.
PORTFOLIO MANAGERS. The following individuals are primarily responsible
for the day-to-day management of the Fund's portfolio:
Robert G. L. Eason, Vice President and Senior Fixed Income Portfolio
Manager of Union Planters since 1989. From 1983-1989, Mr. Eason was
Portfolio Manager at First Tennessee National Bank.
P. Thomas Dorian, Senior Vice President of Union Planters since 1989. From
1987-1989, Mr. Dorian was Vice President of Union Planters. Mr. Dorian has
been a Chartered Financial Analyst since 1985.
DISTRIBUTION OF FUND SHARES
Federated Securities Corp. ("FSC") is the principal distributor for shares of
the Fund. FSC is a Pennsylvania corporation organized on November 14, 1969, and
is the principal distributor for a number of investment companies. FSC is a
subsidiary of Federated Investors.
ADMINISTRATIVE ARRANGEMENTS. The distributor may pay financial institutions
such as banks, fiduciaries, custodians for public funds, investment advisers and
broker-dealers a fee based upon the average net asset value of shares of their
customers invested in the Fund for providing administrative services.
Administrative services may include, but are not limited to, the following
functions: providing office space, equipment, telephone facilities, and various
personnel including clerical, supervisory, and computer 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 regarding the
Funds; assisting clients in changing dividend options, account designations, and
addresses; and providing such other services as the Fund reasonably requests.
This fee, if paid, will be reimbursed by the adviser and not the Fund.
The Glass-Steagall Act prohibits a depository institution (such as a commercial
bank or a savings and loan 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.
ADMINISTRATION OF THE FUND
ADMINISTRATIVE SERVICES. Federated Administrative Services ("FAS"), Pittsburgh,
Pennsylvania, a subsidiary of Federated Investors, provides the Fund with
certain administrative personnel and services necessary to operate the Fund,
such as legal and accounting services. FAS provides these at an annual rate as
specified below:
<TABLE>
<CAPTION>
MAXIMUM AVERAGE AGGREGATE DAILY
ADMINISTRATIVE FEE NET ASSETS OF THE TRUST
<C> <S>
.150 of 1% on the first $250 million
.125 of 1% on the next $250 million
.100 of 1% on the next $250 million
.075 of 1% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$120,000 per Fund. FAS may voluntarily choose to waive a portion of its fee.
CUSTODIAN. State Street Bank and Trust Company, Boston, Massachusetts ("State
Street"), is custodian for the securities and cash of the Fund.
TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND PORTFOLIO ACCOUNTING SERVICES.
Federated Services Company, Pittsburgh, Pennsylvania, a subsidiary of Federated
Investors, is transfer agent and dividend disbursing agent for the Fund. It also
provides certain accounting and recordkeeping services with respect to the
Fund's portfolio investments.
LEGAL COUNSEL. Legal counsel is provided by Houston, Houston & Donnelly,
Pittsburgh, Pennsylvania, and Dickstein, Shapiro & Morin, Washington, D.C.
INDEPENDENT AUDITORS. The independent auditors for the Fund are Price
Waterhouse, Boston, Massachusetts.
EXPENSES OF THE FUND
The Fund pays all of its own expenses and its allocable share of Trust expenses.
The expenses borne by the Fund include, but are not limited to, the costs of:
organizing the Trust and continuing its existence; Trustees' fees; investment
advisory and administrative services; printing prospectuses and other Fund
documents for shareholders; registering the Trust, the Fund and shares of the
Fund; taxes and commissions; issuing, purchasing, repurchasing, and redeeming
shares; fees for custodian, transfer agent, dividend disbursing agent,
shareholder servicing agents, and registrars; printing, mailing, auditing,
accounting, and legal expenses; reports to shareholders and government agencies;
meetings of Trustees and shareholders and proxy solicitations therefor;
insurance premiums; association membership dues; and such nonrecurring 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.
INVESTING IN THE FUND
- --------------------------------------------------------------------------------
SHARE PURCHASES
Shares are sold on days on which the New York Stock Exchange and the Federal
Reserve Wire System are open for business. An individual investor can purchase
shares of the Fund by telephoning Union Planters Brokerage Services at
1-800-238-7125 or by calling his financial institution (such as a bank or an
investment dealer). Orders through a financial institution are considered
received when the Fund is notified of the purchase order. Purchase orders
through a registered broker/dealer must be received by the broker before 4:00
p.m. (Eastern time) and must be transmitted by the broker to the Fund before
5:00 p.m. (Eastern time) in order for shares to be purchased at that day's
price. Purchase orders through other financial institutions must be received by
the financial institution and transmitted to the Fund before 4:00 p.m. (Eastern
time) in order for shares to be purchased at that day's price. It is the
financial institution's responsibilty to transmit orders promptly.
Financial institutions and investment advisers can purchase shares through FSC
by calling 1-800-618-8573, such purchase orders must be received by FSC before
4:00 p.m. (Eastern time) in order for shares to be purchased at that day's
public offering price. Texas residents must purchase shares of the Fund through
FSC at 1-800-618-8573. In connection with the sale of shares, the distributor
may, from time to time, offer certain items of nominal value to any shareholder
or investor. The Fund reserves the right to reject any purchase request.
Payment may be made by either check or federal funds. Payments should be made to
your financial institution, broker/dealer or FSC, as appropriate. 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 before shareholders begin to earn dividends.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment in the Fund is $1,000. Subsequent investments
must be in amounts of at least $100.
WHAT SHARES COST
Shares of the Fund are sold at their net asset value next determined after an
order is received plus a sales charge as follows:
<TABLE>
<CAPTION>
SALES CHARGE AS SALES CHARGE AS
A PERCENTAGE A PERCENTAGE
OF PUBLIC OF NET AMOUNT
AMOUNT OF TRANSACTION OFFERING PRICE INVESTED
<S> <C> <C>
Less than $50,000 4.00% 4.17%
$50,000 but less than $100,000 3.50% 3.63%
$100,000 but less than $250,000 3.00% 3.09%
$250,000 but less than $500,000 2.00% 2.04%
$500,000 but less than $750,000 1.50% 1.52%
$750,000 but less than $1,000,000 1.00% 1.01%
$1 million or more 0.00%
</TABLE>
The net asset value is determined at 4:00 p.m. (Eastern time), Monday through
Friday, except on:
(i) days on which there are not sufficient changes in the value of the Fund's
portfolio securities that its net asset value might be materially affected; (ii)
days during which no shares are tendered for redemption and no orders to
purchase shares are received; and (iii) the following holidays: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Columbus Day, Veterans' Day, Thanksgiving Day and Christmas Day.
During the period from February 1, 1994, through and including September 30,
1994, the maximum sales charge imposed on the purchase of shares of the Fund
will be 2.00% of the offering price of the shares purchased.
PURCHASES AT NET ASSET VALUE. Shares of the Fund may be purchased at net asset
value, without a sales charge, by Trust customers of Union Planters and
employees and retired employees of Union Planters and its affiliates and their
spouses and children under 21.
No sales charge is imposed for shares purchased through bank trust departments,
investment advisers registered under the Investment Advisers Act of 1940,
insurance companies and credit unions. However, investors who purchase shares
through a trust department or investment adviser may be charged an additional
service fee by that institution.
DEALER CONCESSIONS. For sales of shares of the Fund, a dealer will normally
receive up to 85% of the applicable sales charge. Any portion of the sales
charge which is not paid to a dealer will be retained by the distributor.
However, the distributor, in its sole discretion, may uniformly offer to pay to
all dealers selling shares of the Fund, all or a portion of the sales charge it
normally retains. If accepted by the dealer, such additional payments will be
predicated upon the amount of Fund shares sold.
The sales charge for shares sold other than through registered broker/dealers
will be retained by the distributor. The distributor may pay fees to banks out
of the sales charge in exchange for sales and/or administrative services
performed on behalf of the bank's customers including the initiation of customer
accounts and purchases of shares.
REDUCING THE SALES CHARGE
The sales charge can be reduced on the purchase of shares of the Fund through:
quantity discounts and accumulated purchases;
signing a 13-month letter of intent; or
using the reinvestment privilege.
QUANTITY DISCOUNTS AND ACCUMULATED PURCHASES. As shown in the table on the
previous page, larger purchases reduce the sales charge paid. The Fund will
combine purchases of shares made on the same day by the investor, his spouse,
and his children under age 21 when it calculates the sales charge.
If an additional purchase of shares is made, the Fund will consider the previous
purchases still invested in the Fund. For example, if a shareholder already owns
shares having a current value at the public offering price of $40,000 and
purchases $10,000 more at the current public offering price, the sales charge on
the additional purchase according to the schedule now in effect would be 3.50%,
not 4.00%.
To receive the sales charge reduction, Federated Securities Corp. must be
notified by the shareholder in writing at the time the purchase is made that
shares are already owned or that purchases are being combined. The Fund will
reduce the sales charge after it confirms the purchases.
LETTER OF INTENT. If a shareholder intends to purchase at least $100,000 of
shares in the Fund over the next 13 months, the sales charge may be reduced by
signing a letter of intent to that effect. This letter of intent includes a
provision for a sales charge adjustment depending on the amount actually
purchased within the 13-month period and a provision for the custodian to hold
up to 4.00% of the total amount intended to be purchased in escrow (in shares)
until such purchase is completed.
The amount held in escrow will be applied to the shareholder's account at the
end of the 13-month period unless the amount specified in the letter of intent
is not purchased. In this event, an appropriate number of escrowed shares may be
redeemed in order to realize the difference in the sales charge.
This letter of intent will not obligate the shareholder to purchase shares, but
if he does, each purchase during the period will be at the sales charge
applicable to the total amount intended to be purchased.
This letter may be dated as of a prior date to include any purchases made within
the past 90 days towards the dollar fulfillment of the letter of intent. Prior
trade prices will not be adjusted.
REINVESTMENT PRIVILEGE. If shares in the Fund have been redeemed, the
shareholder has a one-time right, within 30 days, to reinvest the redemption
proceeds at the next-determined net asset value without any sales charge.
Federated Securities Corp. must be notified by the shareholder in writing or by
the shareholder's financial institution of the reinvestment in order to
eliminate a sales charge. If the shareholder redeems shares in the Fund, there
may be tax consequences, and exercise of the reinvestment privilege may result
in additional tax considerations. Shareholders contemplating such transactions
should consult their own tax advisers.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Fund, Federated Services Company maintains a share
account for each shareholder of record. Share certificates are not issued unless
requested by contacting your financial institution, broker/dealer or FSC, as
appropriate.
Detailed statements that include account balances, information on each purchase
or redemption, and a report of dividends are sent to each shareholder.
DIVIDENDS AND DISTRIBUTIONS
Dividends are declared and paid monthly to all shareholders invested in the Fund
on the record date.
Dividends are declared just prior to determining net asset value. Capital gains
realized by the Fund, if any, will be distributed at least once every 12 months.
Dividends and capital gains will be reinvested in additional shares on payment
dates at the ex-dividend date's net asset value without a sales charge, unless
cash payments are requested by writing to your financial institution,
broker/dealer or FSC, as appropriate.
REDEEMING SHARES
- --------------------------------------------------------------------------------
The Fund redeems shares at their net asset value next determined after the Fund
receives the redemption request. Redemptions will be made on days on which the
Fund computes its net asset value. Telephone or written requests for redemption
must be received in proper form.
BY TELEPHONE. A shareholder may redeem shares by calling his financial
institution (such as a bank or an investment dealer) to request the redemption.
Shares will be redeemed at the net asset value next determined after the Fund
receives the redemption request from the financial institution. Redemption
requests through a registered broker/dealer must be received by the broker
before 4:00 p.m. (Eastern time) and must be transmitted by the broker to the
Fund before 5:00 p.m. (Eastern time) in order for shares to be redeemed at that
day's net asset value. Redemption requests through other financial institutions
must be received by the financial institution and transmitted to the Fund before
4:00 p.m. (Eastern time) in order for shares to be redeemed at that day's net
asset value. The financial institution is responsible for promptly submitting
redemption requests and providing proper written redemption instructions to the
Fund. The financial institution may charge customary fees and commissions for
this service.
For orders received before 4:00 p.m. (Eastern time), proceeds will normally be
wired the next day to the shareholder's account as instructed on the
shareholder's authorization form or a check will be sent to the address of
record. Proceeds delivered in the form of a check will be sent within seven days
after a proper request for redemption has been received, provided the transfer
agent has received the purchase price for the shares from the shareholder.
Before a financial institution may request redemption by telephone on behalf of
a shareholder, an authorization form permitting the Fund to accept redemption
requests by telephone must be completed.
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, it is
recommended that a redemption request be made in writing and be hand delivered
or sent by overnight mail to FSC. If, at any time, the Fund should determine it
necessary to terminate or modify this method of redemption, shareholders would
be promptly notified.
BY MAIL. Shareholders may redeem shares by sending a written request to FSC as
appropriate. The written request should include the shareholder's name, the Fund
name, the account number, and the share or dollar amount requested. If share
certificates have been issued, they must be properly endorsed and should be sent
by registered or certified mail with the written request. Shareholders should
call FSC at 1-800-618-8573 for assistance in redeeming by mail.
SIGNATURES. Shareholders requesting a redemption of $50,000 or more, a
redemption of any amount to be sent to an address other than that on record with
the Fund, or a redemption payable other than to the shareholder of record, must
have signatures on written redemption requests guaranteed by:
a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund, which is administered by the FDIC;
a member firm of the New York, American, Boston, Midwest, or Pacific
Stock Exchange;
a savings bank or savings and loan association whose deposits are insured
by the Savings Association Insurance Fund, which is administered by the
FDIC; or
any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and its transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Fund may elect in the future to
limit eligible signature guarantors to institutions that are members of a
signature guarantee program. The Fund and its transfer agent reserve the right
to amend these standards at any time without notice.
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 the required minimum of $1,000 due to shareholder
redemptions.
Before shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional shares to meet the minimum
requirement.
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS
Each share of the Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of all classes of
each portfolio in the Trust have equal voting rights except that in matters
affecting only a particular fund or class, only shares of that fund or class are
entitled to vote. As of February 10, 1994, Union Planters National Bank,
Memphis, Tennessee, acting in various capacities for numerous accounts, was the
owner of record of 3,535,067 shares (95.24%) of the Fund, and therefore, may,
for certain purposes, be deemed to control the Fund and be able to affect the
outcome of certain matters presented for a vote of shareholders.
As a Massachusetts business trust, the Trust is not required to hold annual
shareholder meetings. Shareholder approval will be sought only for certain
changes in the Trust's or the Fund's operation and for the election of Trustees
under certain circumstances. Trustees may be removed by the Trustees or by
shareholders at a special meeting. A special meeting of the shareholders for
this purpose shall be called by the Trustees upon the written request of
shareholders owning at least 10% of the outstanding shares of all series in the
Trust entitled to vote.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for acts or obligations of the Trust on behalf
of the Fund. To protect shareholders of the Fund, the Trust has filed legal
documents with Massachusetts that expressly disclaim the liability of
shareholders of the Fund for such acts or obligations of the Trust. These
documents require notice of this disclaimer to be given in each agreement,
obligation, or instrument that the Trust or its Trustees enter into or sign on
behalf of the Fund.
In the unlikely event that a shareholder of the Fund is held personally liable
for the Trust's obligations on behalf of the Fund, the Trust is required to use
the property of the Fund to protect or compensate the shareholder. On request,
the Trust will defend any claim made and pay any judgment against a shareholder
of the Fund for any act or obligation of the Trust on behalf of the Fund.
Therefore, financial loss resulting from liability as a shareholder of the Fund
will occur only if the Trust cannot meet its obligations to indemnify
shareholders and pay judgments against them from the assets of the Fund.
EFFECT OF BANKING LAWS
- --------------------------------------------------------------------------------
The Glass-Steagall Act and other banking laws and regulations presently prohibit
a bank holding company registered under the Federal Bank Holding Company Act of
1956 or any 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
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 customers. The Fund's adviser, Union Planters, is subject to such banking
laws and regulations.
Union Planters believes that it may perform the investment advisory services for
the Fund contemplated by its advisory agreement 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 Union Planters from continuing to
perform all or a part of the above services for its customers and/or the Fund.
In such event, changes in the operation of a Fund may occur, including the
possible alteration or termination of any automatic or other Fund share
investment or redemption services then being provided by Union Planters, and the
Trustees would consider alternative investment advisers and other means of
continuing available investment services. It is not expected that existing
Fund's shareholders would suffer any adverse financial consequences (if another
adviser with equivalent abilities to Union Planters is found) as a result of any
of these occurrences.
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Fund expects to pay no federal income tax because it expects to meet
requirements of the Internal Revenue Code ("the Code") applicable to regulated
investment companies and to receive the special tax treatment afforded to such
companies.
Dividends of the Fund representing net interest income earned on some temporary
investments and any realized net short-term gains are taxed as ordinary income.
Distributions representing net
long-term capital gains realized by the Fund, if any, will be taxable as
long-term capital gains regardless of the length of time shareholders have held
their shares.
These tax consequences apply whether dividends are received in cash or as
additional shares. Information on the tax status of dividends and distributions
is provided annually.
STATE OF TENNESSEE TAXES
Under existing Tennessee law, as long as the Fund qualifies as a separate
"regulated investment company" under the Code, then the dividends from the Fund
are exempt from the Tennessee Individual Income Tax also known as the Hall
Income Tax, pursuant to Tennessee Code Annotated Sec.
67-2-104(f) in proportion to the income attributable to interest on bonds or
securities of the United States government or any agency or instrumentality
thereof or to the bonds of the state of Tennessee, or any county or municipality
or political subdivision thereof, including any agency, board, authority or
commission of any of the foregoing.
OTHER STATE AND LOCAL TAXES
Income from the Fund is not necessarily free from state income taxes in states
other than Tennessee or from personal property taxes. State laws differ on this
issue, and shareholders are urged to consult their own tax advisers regarding
the status of their accounts under state and local tax laws.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time the Fund advertises total return, yield, and tax-equivalent
yield. Total return represents the change, over a specified period of time, in
the value of an investment in shares after reinvesting all income and capital
gains distributions. It is calculated by dividing that change by the initial
investment and is expressed as a percentage.
The yield of the Fund is calculated by dividing the net investment income per
share (as defined by the Securities and Exchange Commission) earned by shares
over a thirty-day period by the maximum offering price per share on the last day
of the period. This number is then annualized using semi-annual compounding. The
tax-equivalent yield of shares is calculated similarly to the yield, but is
adjusted to reflect the taxable yield that shares would have had to earn to
equal its actual yield, assuming a specific tax rate. The yield and the
tax-equivalent yield do not necessarily reflect income actually earned by shares
and, therefore, may not correlate to the dividends or other distributions paid
to shareholders.
The performance information reflects the effect of the sales load, which, if
excluded, would increase the total return, yield, and tax-equivalent yield.
From time to time, the Fund may advertise its performance using certain
financial publications and/or compare its performance to certain indices.
TENNESSEE TAX-FREE BOND FUND
PORTFOLIO OF INVESTMENTS
JANUARY 31, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
<C> <S> <C> <C>
- ------------- ------------------------------------------------------------------- ------------- --------------
MUNICIPAL SECURITIES--100.1%
- ----------------------------------------------------------------------------------
$ 500,000 Anderson County, TN, 6.30%, Refunding UT GO Bonds, (Rural High
School) Callable 1/1/97 @ 102, 7/1/2001 A $ 536,370
-------------------------------------------------------------------
250,000 Chattanooga--Hamilton County, TN Hospital Authority Revenue, 7.00%,
Refunding Bonds, (Enlarger Medical Center), Callable 10/1/96 @ 102,
(MBIA Insured),
10/1/97 AAA 278,470
-------------------------------------------------------------------
465,000 Chattanooga--Hamilton County, TN Hospital Authority Revenue, 5.50%,
Refunding Bonds, (Enlarger Medical Center)/(FSA Insured)/(Original
Issue Yield: 5.60%),
10/1/2006 AAA 496,499
-------------------------------------------------------------------
1,000,000 Chattanooga--Hamilton County, TN Hospital Authority Revenue, 5.50%,
Refunding Bonds, (Enlarger Medial Center), Callable 10/1/2003 @
102, (FSA Insured)/
(Original Issue Yield: 5.85%), 10/1/2013 AAA 1,020,650
-------------------------------------------------------------------
1,000,000 Clarksville, TN Electric System Revenue, 5.125%, Refunding and
Improvement Bonds, Callable 9/1/2003
@ 102, 9/1/2011 A 998,220
-------------------------------------------------------------------
735,000 Clarksville, TN Water, Sewer and Gas Systems, 6.125%,
Refunding and Improvement Revenue Bonds, Callable
2/1/2002 @ 102, (Original Issue Yield: 6.15%), 2/1/2007 AAA 812,748
-------------------------------------------------------------------
500,000 Clarksville, TN Water, Sewer and Gas Systems, 6.125%,
Refunding and Improvement Revenue Bonds, Callable
2/1/2002 @ 102, (MBIA Insured)/(Original Issue
Yield: 6.328%), 2/1/2012 AAA 542,760
-------------------------------------------------------------------
400,000 Hamblen County, TN Hospital Revenue, 4.90%, UT GO Bonds, Callable
5/1/99 @ 102, (AMBAC Insured),
5/1/2006 AAA 406,064
-------------------------------------------------------------------
</TABLE>
TENNESSEE TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
<C> <S> <C> <C>
- ------------- ------------------------------------------------------------------- ------------- --------------
MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------------------
$ 100,000 Hamblen County, TN Hospital Revenue, 5.00%, UT GO Bonds, Callable
5/1/99 @ 102, (AMBAC Insured),
5/1/2007 AAA $ 101,509
-------------------------------------------------------------------
400,000 Hamilton County, TN Industrial Development Revenue, 9.50%,
Refunding Bonds, (Series 1985), Callable 9/1/95
@ 102, 9/1/96 (Escrowed to Maturity) (AAA)** 448,460
-------------------------------------------------------------------
185,000 Jackson, TN Health, Educational and Housing Facilities Revenue,
5.70%, (Jackson--Madison County General
Hospital)/(MBIA Insured), 4/1/99 AAA 199,088
-------------------------------------------------------------------
1,000,000 Jackson, TN Health, Educational and Housing Facilities Revenue,
5.90%, (Jackson--Madison County General
Hospital)/(MBIA Insured), 4/1/2000 AAA 1,093,710
-------------------------------------------------------------------
1,250,000 Johnson City, TN Health and Educational Facilities, 6.75%,
Refunding and Improvement Revenue Bonds, (Johnson City Med),
Callable 7/1/2001 @ 102, (MBIA Insured)/(Original Issue Yield:
6.912%), 7/1/2006 AAA 1,426,538
-------------------------------------------------------------------
1,000,000 Knox County, TN Health, Educational and Housing Facilities Revenue,
7.00%, (Fort Sanders Alliance)/(Series C), Callable 1/1/2000 @ 102,
(MBIA Insured), 1/1/2008 AAA 1,171,280
-------------------------------------------------------------------
280,000 Knox County, TN Health, Educational and Housing Facilities Revenue,
4.85%, Refunding Bonds, (Mercy Health Care System)/(Series
B)/(AMBAC Insured)/(Original
Issue Yield: 5.00%), 9/1/2000 AAA 291,998
-------------------------------------------------------------------
650,000 Knox County, TN Health, Educational and Housing Facilities Revenue,
5.00%, Refunding Bonds, (Fort Sanders Medical Center)/(MBIA
Insured)/(Original Issue Yield: 5.05%), 1/1/2001 AAA 680,108
-------------------------------------------------------------------
745,000 Knox County, TN Health, Educational and Housing Facilities Revenue,
5.40%, Refunding Bonds, (Fort Sanders Medical Center), Callable
1/1/2002 @ 102, (MBIA
Insured)/(Original Issue Yield: 5.50%), 1/1/2005 AAA 786,526
-------------------------------------------------------------------
</TABLE>
TENNESSEE TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
<C> <S> <C> <C>
- ------------- ------------------------------------------------------------------- ------------- --------------
MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------------------
$ 805,000 Knox County, TN Health, Educational and Housing Facilities Revenue,
4.90%, Refunding Bonds, (Fort Sanders
Alliance)/(Series A), Callable 1/1/2004 @ 102, (MBIA
Insured)/(Original Issue Yield: 5.10%), 1/1/2005 AAA $ 820,657
-------------------------------------------------------------------
475,000 Knoxville, TN, 5.80%, UT GO Bonds, Refunding and
Improvements Revenue,(Series A), Callable 5/1/96
@ 102, 5/1/99 AA- 501,662
-------------------------------------------------------------------
1,000,000 Knoxville, TN Natural Gas Revenue, 5.05%, Refunding Bonds, Callable
3/1/2000 @ 102, (Original Issue Yield: 5.10%), 3/1/2008 AA 1,007,870
-------------------------------------------------------------------
250,000 Knoxville, TN Water Revenue, 5.20%, Refunding and Improvement
Bonds, Callable 3/1/2000 @ 102, (Original
Issue Yield: 5.45%), 3/1/2010 AA 251,133
-------------------------------------------------------------------
100,000 Madison County, TN, 5.35%, UT GO Bonds, (School
Improvements)/(Series A), 8/1/99 A 106,503
-------------------------------------------------------------------
1,200,000 Memphis-Shelby County, TN Airport, 6.75%, Refunding Revenue Bonds,
(Federal Express Corp.), Callable
9/1/2002 @ 102, 9/1/2012 BBB 1,308,372
-------------------------------------------------------------------
600,000 Memphis,TN, Zero Coupon, UT GO Bonds, (Recreational Facilities
Improvements)/(Series C), Callable 12/1/95
@ 102, 12/1/2004 AAA 1,288,902
-------------------------------------------------------------------
465,000 Memphis, TN Electric System Revenue, 5.00%, Refunding Bonds,
(Series A)/(Original Issue Yield: 5.05%), 1/1/99 AA 487,669
-------------------------------------------------------------------
490,000 Metropolitan Government Nashville and Davidson County, TN, 6.00%,
UT GO Bonds (Public and School Improvements), Callable 3/1/94 @ 102
1/2, 3/1/2000 AA 504,460
-------------------------------------------------------------------
100,000 Metropolitan Government Nashville and Davidson County, TN, 4.625%,
Refunding UT GO Bonds, (Original Issue Yield: 4.796%), 5/15/2000 AA 103,494
-------------------------------------------------------------------
</TABLE>
TENNESSEE TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
<C> <S> <C> <C>
- ------------- ------------------------------------------------------------------- ------------- --------------
MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------------------
$ 230,000 Metropolitan Government Nashville and Davidson County, TN, 5.25%,
Refunding UT GO Bonds, (Original Issue Yield: 5.45%), 5/15/2007 AA $ 241,912
-------------------------------------------------------------------
1,500,000 Metropolitan Government Nashville and Davidson County, TN Health
and Educational Facilities Revenue, 5.20%, Refunding Bonds,
(Vanderbilt University), Callable
7/1/2003 @ 102, (Original Issue Yield: 5.55%), 7/1/2018 AA 1,497,870
-------------------------------------------------------------------
770,000 Metropolitan Government Nashville and Davidson County, TN Water and
Sewer Revenue, 7.25%, Refunding Bonds, Callable 1/1/96 @ 102,
1/1/2006 A 835,573
-------------------------------------------------------------------
400,000 Metropolitan Government Nashville and Davidson County, TN Water and
Sewer Revenue, 7.30%, Refunding Bonds, Callable 1/1/96 @ 102,
1/1/2008 A 434,432
-------------------------------------------------------------------
535,000 Metropolitan Government Nashville and Davidson County, TN Water and
Sewer Revenue, 5.50%, Callable
1/1/2002 @ 102, (AMBAC Insured)/(Original Issue Yield: 5.55%),
1/1/2003 AAA 577,169
-------------------------------------------------------------------
250,000 Metropolitan Government Nashville and Davidson County, TN Water and
Sewer Revenue, 5.75%, Callable
1/1/2002 @ 102, (AMBAC Insured)/(Original Issue Yield:
6.15%), 1/1/2012 AAA 263,505
-------------------------------------------------------------------
230,000 Metropolitan Government Nashville and Davidson County, TN Water and
Sewer Revenue, 5.20%, Refunding Bonds, (FGIC Insured)/(Original
Issue Yield: 5.53%),
1/1/2013 AAA 233,315
-------------------------------------------------------------------
1,385,000 Montgomery County, TN Public Building Authority Revenue, 7.50%,
Callable 6/15/94 @ 100, (Prudential Insurance Company of America
Insured), 12/15/2000 AA+ 1,386,953
-------------------------------------------------------------------
800,000 Mt. Juliet, TN Public Building Authority Revenue, 7.00%, (Series
O), Callable 2/1/2001 @ 102, (MBIA Insured),
2/1/2006 AAA 926,472
-------------------------------------------------------------------
</TABLE>
TENNESSEE TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
<C> <S> <C> <C>
- ------------- ------------------------------------------------------------------- ------------- --------------
MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------------------
$ 1,500,000 Putram County, TN, 5.125%, UT GO Bonds, (Public Improvements),
Callable 4/1/2003 @ 102, (MBIA Insured)/ (Original Issue Yield:
5.35%), 4/1/2011 AAA $ 1,506,855
-------------------------------------------------------------------
250,000 Putram County, TN, 5.125%, UT GO Bonds, (Public Improvements),
Callable 4/1/2003 @ 102, (MBIA Insured)/ (Original Issue Yield:
5.35%), 4/1/2012 AAA 248,665
-------------------------------------------------------------------
220,000 Rutherford County, TN, 5.00%, UT GO Bonds, Cap.
Outlay Notes, (School Improvements), 6/1/2000 AA- 231,306
-------------------------------------------------------------------
460,000 Rutherford County, TN, 5.10%, UT GO Bonds, Cap.
Outlay Notes, (School Improvements), 6/1/2001 AA- 486,464
-------------------------------------------------------------------
480,000 Shelby County, TN, 6.20%, Refunding UT GO Bonds,
(Series A), Callable 3/1/2000 @ 101 1/2, (Original Issue
Yield: 6.30%), 3/1/2006 AA+ 522,312
-------------------------------------------------------------------
500,000 Shelby County, TN, 5.875%, Refunding UT GO Bonds,
(Series B), Callable 3/1/2001 @ 101 1/2, (Original Issue
Yield: 5.95%), 3/1/2007 AA+ 537,600
-------------------------------------------------------------------
500,000 Shelby County, TN, 5.10%, UT GO Bonds, (Public Improvements),
Callable 3/1/2001 @ 101, (Original Issue Yield: 5.25%), 3/1/2011 AA+ 504,185
-------------------------------------------------------------------
1,000,000 Shelby County, TN Health, Educational and Housing
Facilities Revenue, 6.00%, (St. Joseph Hospital East, Inc.),
Callable 3/1/2005 @ 100, 3/1/2005 AAA 1,116,750
-------------------------------------------------------------------
93,000 Shelby County, TN Health, Educational and Housing
Facilities Revenue, 6.20%, (Methodist Health System)/
(Series C), (MBIA Insured), 8/1/2013 AAA 93,353
-------------------------------------------------------------------
1,250,000 Shelby County, TN Health, Educational and Housing Facilities
Revenue, 7.40%, (Methodist Health System)/(Series A), Callable
6/1/98 @ 102, (MBIA Insured), 6/1/2003 AAA 1,427,725
-------------------------------------------------------------------
</TABLE>
TENNESSEE TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
<C> <S> <C> <C>
- ------------- ------------------------------------------------------------------- ------------- --------------
MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------------------
$ 465,000 Shelby County, TN Health, Educational and Housing
Facilities Revenue, 5.00%, Refunding Bonds, (Le Bonhuer Childrens
Medical Center)/(Series D)/(MBIA Insured)/ (Original Issue Yield:
5.10%, 8/15/2001 AAA $ 488,204
-------------------------------------------------------------------
425,000 Tennessee Housing Development Agency, 6.40%, Revenue Bonds,
(Homeownership Program--Issue U), 7/1/2000 A+ 457,053
-------------------------------------------------------------------
430,000 Tennessee Housing Development Agency, 6.90%, Revenue Bonds,
(Homeownership Program--Issue U), 7/1/2001 @ 102, 7/1/2005 A+ 468,128
-------------------------------------------------------------------
1,500,000 Tennessee Housing Development Agency Mortgage, 5.40%, Refunding
Revenue Bonds, (Series A), Callable
7/1/2003 @ 102, 7/1/2004 A+ 1,581,825
-------------------------------------------------------------------
235,000 Tennessee Housing Development Agency Mortgage, 5.65%, Refunding
Revenue Bonds, (Series A), Callable
7/1/2003 @ 102, 1/1/2007 A+ 236,556
-------------------------------------------------------------------
500,000 Tennessee Housing Development Agency Mortgage, 5.70%, Refunding
Revenue Bonds, (Series A), Callable
7/1/2003 @ 102, 1/1/2008 A+ 505,410
-------------------------------------------------------------------
500,000 Tennessee Housing Development Agency Mortgage, 5.70%, Refunding
Revenue Bonds, (Series A), Callable
7/1/2003 @ 102, 7/1/2008 A+ 505,410
-------------------------------------------------------------------
550,000 Tennessee Housing Development Agency Mortgage, 5.85%, Refunding
Revenue Bonds, (Series A), Callable
7/1/2003 @ 102, 7/1/2013 A+ 559,592
-------------------------------------------------------------------
1,000,000 Tennessee State, 6.60%, UT GO Bonds, (Miscellaneous
Improvements)/(Series B), Callable 6/1/2001 @ 101 1/2,
6/1/2004 AA+ 1,142,700
-------------------------------------------------------------------
300,000 Tennessee State, 6.10%, Refunding UT GO Bonds, (Series A), 6/1/2000 AA+ 335,988
-------------------------------------------------------------------
</TABLE>
TENNESSEE TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
<C> <S> <C> <C>
- ------------- ------------------------------------------------------------------- ------------- --------------
MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------------------
$ 265,000 Tennessee State, 5.375%, UT GO Bonds, (Public Improve-
ments)/(Series A), Callable 7/1/2002 @ 101 1/2, (Original Issue
Yield: 5.45%), 7/1/2003 AA+ $ 287,498
-------------------------------------------------------------------
500,000 Tennessee State, 5.50%, UT GO Bonds, (Public Improvements)/(Series
A), Callable 7/1/2002 @ 101 1/2, (Original Issue Yield: 5.65%),
7/1/2005 AA+ 540,210
-------------------------------------------------------------------
500,000 Tennessee State Local Development Authority, 5.65%,
Refunding Revenue Bonds, (Series A), Callable 3/1/2003
@ 102, 3/1/2007 AA- 526,930
-------------------------------------------------------------------
195,000 Tennessee State School Board Authority, 5.75%, Refunding Revenue
Bonds, Callable 9/13/93 @ 101 1/4, (GO of Auth Insured), 5/1/2006 AA 197,982
-------------------------------------------------------------------
1,035,000 Williamson County, TN, 6.00%, Refunding UT GO Bonds, 3/1/2008 AA 1,148,674
------------------------------------------------------------------- --------------
TOTAL MUNICIPAL SECURITIES (IDENTIFIED COST $38,803,581) $ 39,726,296
------------------------------------------------------------------- --------------
</TABLE>
* For explanations of credit ratings, see the Fund's Statement of Additional
Information.
** The issuer of this security has placed U.S. government securities in escrow
with a trustee. The proceeds from the government securities will be used to
pay principal and interest on the security. While this security is unrated,
the Fund's managers are of the opinion that it is comparable to the highest
quality ratings issued by Moody's or Standard & Poors.
\ The cost of investments for federal income tax purposes amounts to
$38,803,581. The net realized appreciation of investments on a federal income
tax basis amounts to $922,715 which is comprised of $929,391 appreciation and
$6,676 depreciation at January 31, 1994.
Note: The category of investments is shown as a percentage of net assets
($39,669,673) at January 31, 1994.
TENNESSEE TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
The following abbreviations are used in this portfolio:
AMBAC--American Municipal Bond Assurance Corporation
FGIC--Financial Guaranty Insurance Co.
FSA--Financial Security Assurance
GO--General Obligation
MBIA--Municipal Bond Investors Assurance
UT--Unlimited Tax
(See Notes which are an integral part of the Financial Statements)
TENNESSEE TAX-FREE BOND FUND
(A PORTFOLIO OF THE PLANTERS FUNDS)
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------------------------
Investments in securities, at value (Note 2A) (identified and tax cost, $38,803,581) $ 39,726,296
- --------------------------------------------------------------------------------------------------
Interest receivable 496,082
- --------------------------------------------------------------------------------------------------
Receivable for Investments sold 881,618
- --------------------------------------------------------------------------------------------------
Receivable for Funds shares sold 318,608
- --------------------------------------------------------------------------------------------------
Deferred expenses (Note 2E) 15,637
- -------------------------------------------------------------------------------------------------- --------------
Total assets 41,438,241
- --------------------------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------------------------
Payable for investments purchased $ 1,502,790
- -----------------------------------------------------------------------------------
Payable to bank 147,516
- -----------------------------------------------------------------------------------
Payable for Fund shares repurchased 50,339
- -----------------------------------------------------------------------------------
Accrued expenses 67,923
- ----------------------------------------------------------------------------------- -------------
Total liabilities 1,768,568
- -------------------------------------------------------------------------------------------------- --------------
NET ASSETS for 3,666,098 shares of beneficial interest outstanding $ 39,669,673
- -------------------------------------------------------------------------------------------------- --------------
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------------------------
Paid-in capital $ 38,703,331
- --------------------------------------------------------------------------------------------------
Unrealized appreciation of investments 922,715
- --------------------------------------------------------------------------------------------------
Net realized gain on investments 5,447
- --------------------------------------------------------------------------------------------------
Undistributed net investment income 38,180
- -------------------------------------------------------------------------------------------------- --------------
Total $ 39,669,673
- -------------------------------------------------------------------------------------------------- --------------
NET ASSET VALUE, and Redemption Price Per Share
($39,669,673 / 3,666,098 shares of beneficial interest outstanding) $10.82
- -------------------------------------------------------------------------------------------------- --------------
Computation of Offering Price: Offering price Per Share
(100/96 of 10.82)* $ 11.27
- -------------------------------------------------------------------------------------------------- --------------
</TABLE>
*On sales of $50,000 or more, the offering price is reduced as stated under
"What Shares Cost" in the prospectus. During the period from February 1, 1994,
through and including September 30, 1994, the maximum sales charge imposed on
the purchase of shares of the Fund will be 2% of the offering price of the
shares purchased.
(See Notes which are an integral part of the Financial Statements)
TENNESSEE TAX-FREE BOND FUND
(A PORTFOLIO OF THE PLANTERS FUNDS)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM AUGUST 5, 1993
(START OF BUSINESS) TO JANUARY 31, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- --------------------------------------------------------------------------------------------------
Interest income (Note 2B) $ 664,323
- --------------------------------------------------------------------------------------------------
EXPENSES--
- --------------------------------------------------------------------------------------------------
Investment advisory fee (Note 5) $ 103,304
- -------------------------------------------------------------------------------------
Administrative personnel and services (Note 5) 50,254
- -------------------------------------------------------------------------------------
Custodian expenses (Note 5) 14,088
- -------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees (Note 5) 16,833
- -------------------------------------------------------------------------------------
Recordkeeper fees (Note 5) 24,564
- -------------------------------------------------------------------------------------
Legal fees 3,426
- -------------------------------------------------------------------------------------
Insurance premiums 897
- -------------------------------------------------------------------------------------
Miscellaneous 4,088
- ------------------------------------------------------------------------------------- -----------
Total expenses 217,454
- -------------------------------------------------------------------------------------
Deduct--
- -------------------------------------------------------------------------------------
Waiver of investment advisory fee (Note 5) $ 90,600
- --------------------------------------------------------------------------
Waiver of administrative personnel and services (Note 5) 44,166 134,766
- -------------------------------------------------------------------------- --------- -----------
Net expenses 82,688
- -------------------------------------------------------------------------------------------------- -------------
Net investment income $ 581,635
- -------------------------------------------------------------------------------------------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--
- --------------------------------------------------------------------------------------------------
Net realized gain on investments (identified cost basis) 5,447
- --------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments 922,715
- -------------------------------------------------------------------------------------------------- -------------
Net realized and unrealized gain on investments 928,162
- -------------------------------------------------------------------------------------------------- -------------
Change in net assets resulting from operations $ 1,509,797
- -------------------------------------------------------------------------------------------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
TENNESSEE TAX-FREE BOND FUND
(A PORTFOLIO OF THE PLANTERS FUNDS)
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD ENDED
JANUARY 31, 1994*
(UNAUDITED)
<S> <C>
- ------------------------------------------------------------------------------------------- ---------------------
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------------------------------------------------------
OPERATIONS--
- -------------------------------------------------------------------------------------------
Net investment income $ 581,635
- -------------------------------------------------------------------------------------------
Net realized gain on investments transactions ($5,447 net gain
as computed for federal tax purposes) (Note 2C) 5,447
- -------------------------------------------------------------------------------------------
Change in unrealized appreciation of investments 922,715
- ------------------------------------------------------------------------------------------- ---------------------
Change in net assets resulting from operations 1,509,797
- ------------------------------------------------------------------------------------------- ---------------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3)--
- -------------------------------------------------------------------------------------------
Dividends to shareholders from net investment income (543,455)
- ------------------------------------------------------------------------------------------- ---------------------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 4)--
- -------------------------------------------------------------------------------------------
Proceeds from sale of shares 41,130,119
- -------------------------------------------------------------------------------------------
Net asset value on shares issued to shareholders in payment
of dividends declared 95,973
- -------------------------------------------------------------------------------------------
Cost of shares redeemed (2,522,761)
- ------------------------------------------------------------------------------------------- ---------------------
Change in net assets from Fund share transactions 38,703,331
- ------------------------------------------------------------------------------------------- ---------------------
Change in net assets 39,669,673
- -------------------------------------------------------------------------------------------
NET ASSETS--
- -------------------------------------------------------------------------------------------
Beginning of period --
- ------------------------------------------------------------------------------------------- ---------------------
End of period (including undistributed net investment income of $38,180) $ 39,669,673
- ------------------------------------------------------------------------------------------- ---------------------
</TABLE>
* For the period from August 5, 1993 (start of business) to January 31, 1994.
(See Notes which are an integral part of the Financial Statements)
TENNESSEE TAX-FREE BOND FUND
(A PORTFOLIO OF THE PLANTERS FUNDS)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD ENDED JANUARY 31, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
The Planters Funds (the "Trust") is registered under the Investment Company Act
of 1940, as amended, as an open-end management investment company. The financial
statements included herein are only those of Tennessee Tax-Free Bond Fund (the
"Fund"), a non-diversified portfolio of the Trust. At January 31, 1994 the Trust
did not have any other Portfolios effective.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles.
A. INVESTMENT VALUATIONS--Municipal bonds are valued at fair value. An
independent pricing service values the Fund's municipal bonds taking into
consideration yield, stability, risk, quality, coupon, maturity, type of
issue, trading characteristics, special circumstances of a security or
trading market, and any other factor or market data it deems relevant in
determining valuations for normal institutional size trading units of debt
securities and does not rely exclusively on quoted prices.
Since the Fund may invest a substantial portion of its assets in issuers
located in one state, it will be more susceptible to factors adversely
affecting issuers of that state, than would be a comparable general
tax-exempt mutual fund. In order to reduce the risk associated with such
factors, at January 31, 1994, 41.9% of the securities in the portfolio of
investments were backed by letters of credit or bond insurance of various
financial institutions and financial guaranty assurance agencies of various
financial institutions. The aggregate percentages by financial institutions
ranged from 0.5% to 29.4% of total investments.
B. INCOME--Interest income is recorded on the accrual basis. Interest income
includes interest earned net of premium, and original issue discount as
required by the Internal Revenue Code.
C. FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Internal Revenue Code (the "Code") applicable to investment companies and
distribute to shareholders each year all of its net income. Accordingly, no
provision for federal tax is necessary. Dividends paid by the Fund
representing net interest received on tax-exempt municipal securities are
not includable by shareholders as gross income for federal income tax
purposes, because the Fund intends to meet certain requirements of the Code
applicable to regulated investment companies which will enable the Fund to
pay tax-exempt interest dividends. The portion of such interest, if any,
earned on
private activity bonds issued after August 7, 1986, may be considered a tax
preference item to shareholders for the purpose of computing the
alternative minimum tax.
D. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. To the extent the Fund
engages in such transactions, it will do so for the purpose of acquiring
portfolio securities consistent with its investment objective and policies
and not for the purpose of investment leverage. The Fund will record a
when-issued security and the related liability on the trade date. Until the
securities are received and paid for, the Fund will maintain security
positions such that sufficient liquid assets will be available to make
payment for the securities purchased. Securities purchased on a when-issued
or delayed delivery basis are marked to market daily and begin earning
interest on the settlement date.
E. DEFERRED EXPENSES--The costs incurred by the Fund with respect to the
registration of its shares in its first fiscal year, excluding the initial
expense of registering the shares, have been deferred and are being
amortized using the straight-line method over a period of five years from
the Fund's commencement date.
F. OTHER--Investment transactions are accounted for on the date of the
transaction.
(3) DIVIDENDS
Dividends from net investment income are declared and paid monthly.
Distributions of any net realized capital gains will be made at least once every
twelve months. Dividends and capital gain distributions, if any, are recorded on
the ex-dividend date.
(4) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. At January 31, 1994 capital paid-in aggregated $38,703,331.
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
ENDED
1/31/94*
<S> <C>
- ----------------------------------------------------------------------------------------------------- -----------
Shares outstanding, beginning of period --
- -----------------------------------------------------------------------------------------------------
Shares sold 3,894,354
- -----------------------------------------------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 9,002
- -----------------------------------------------------------------------------------------------------
Shares redeemed (237,258)
- ----------------------------------------------------------------------------------------------------- -----------
Shares outstanding, end of period 3,666,098
- ----------------------------------------------------------------------------------------------------- -----------
</TABLE>
*The period from August 5, 1994 (start of business) to January 31, 1994.
(5) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Union Planters National Bank, the Fund's investment adviser ("Adviser"),
receives for its services an annual investment advisory fee equal to .75 of 1%
of the Fund's average daily net assets. The Adviser has voluntarily agreed to
waive a portion of its fee. The Adviser can modify or terminate this voluntary
waiver at any time at its sole discretion. For the period ended January 31,
1994, the investment advisor earned $103,304 of which $90,600 was voluntarily
waived.
Federated Administrative Services ("FAS") provides the Fund with certain
administrative personnel and services, and receives for its services an annual
fee equal to .150 of 1% on the first $250 million of average aggregate daily net
assets of the Trust; .125 of 1% on the next $250 million; .100 of 1% on the next
$250 million; and .075 of 1% on average aggregate daily net assets in excess of
$750 million. FAS may voluntarily choose to waive a portion of its fee. For the
period ended January 31, 1994, FAS earned $50,254, of which $44,166 was
voluntarily waived.
For the services to be provided to the Funds pursuant to the Custodian
Agreement, the Funds pays State Street Bank (the "Custodian") an annual fee
equal to .02 of 1% on the first $250 million of average aggregate daily net
assets of the Trust; .015 of 1% of average aggregate daily net assets from $250
million to $500 million; and .01 of 1% of average aggregate daily net assets
over $500 million.
Federated Services Company ("FSC") is transfer agent for the shares of the Funds
and dividend disbursing agent for the Funds. It also provides certain accounting
and recordkeeping services with respect to the Fund's portfolios of investments.
Certain of the Officers and Trustees of the Fund are Officers and Trustees of
the companies mentioned in this Note to the financial statements.
(6) INVESTMENT TRANSACTIONS
Purchases and sales and maturities of investments excluding short-term
securities, for the period ended January 31, 1994 were as follows:
<TABLE>
<S> <C>
PURCHASES $ 43,346,434
- -------------------------------------------------------------------------------------------------- --------------
SALES $ 4,445,003
- -------------------------------------------------------------------------------------------------- --------------
</TABLE>
<PAGE>
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<PAGE>
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<PAGE>
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ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Tennessee Tax-Free Bond Fund Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ---------------------------------------------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ---------------------------------------------------------------------------------------------------------------------
Investment Adviser
Union Planters National Bank P.O. Box 387
Memphis, Tennessee 38147
- ---------------------------------------------------------------------------------------------------------------------
Custodian
State Street Bank P.O. Box 8604
and Trust Company Boston, Massachusetts 02266-8604
- ---------------------------------------------------------------------------------------------------------------------
Transfer Agent, Dividend Disbursing Agent,
and Portfolio Accounting Services
Federated Services Company Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ---------------------------------------------------------------------------------------------------------------------
Legal Counsel
Houston, Houston & Donnelly 2510 Centre City Tower
Pittsburgh, Pennsylvania 15222
- ---------------------------------------------------------------------------------------------------------------------
Legal Counsel
Dickstein, Shapiro & Morin 2101 L Street, N.W.
Washington, D.C. 20037
- ---------------------------------------------------------------------------------------------------------------------
Independent Auditors
Price Waterhouse 160 Federal Street
Boston, Massachusetts 02110
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
TENNESSEE TAX-FREE
BOND FUND
PROSPECTUS
A Non-Diversified Portfolio
of The Planters Funds
An Open-End, Management
Investment Company
February 28, 1994
Union Planters National Bank
Investment Adviser
[LOGO] FEDERATED SECURITIES CORP.
---------------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
LIBERTY CENTER
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
3072709A (2/94)
TENNESSEE TAX-FREE BOND FUND
(A PORTFOLIO OF THE PLANTERS FUNDS)
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information should be read with the
prospectus of shares of Tennessee Tax-Free Bond Fund (the "Fund")
dated February 28, 1994. This Statement is not a prospectus itself. To
receive a copy of the prospectus write or call Federated Securities
Corp. at 1-800-618-8573.
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
Statement dated February 28, 1994
[LOGO] FEDERATED SECURITIES CORP.
---------------------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
GENERAL INFORMATION ABOUT THE FUND 1
- ---------------------------------------------------------------
INVESTMENT OBJECTIVE AND POLICIES 1
- ---------------------------------------------------------------
Acceptable Investments 1
When-Issued and Delayed Delivery
Transactions 2
Temporary Investments 2
Repurchase Agreements 2
Portfolio Turnover 2
Investment Limitations 2
Investment Risks 4
MANAGEMENT OF THE TRUST 4
- ---------------------------------------------------------------
Board of Trustees 4
Officers and Trustees 4
Fund Ownership 6
Trustee Liability 6
The Funds 6
INVESTMENT ADVISORY SERVICES 7
- ---------------------------------------------------------------
Adviser to the Fund 7
Advisory Fees 7
ADMINISTRATIVE SERVICES 7
- ---------------------------------------------------------------
Administrative Arrangements 8
BROKERAGE TRANSACTIONS 8
- ---------------------------------------------------------------
PURCHASING SHARES 8
- ---------------------------------------------------------------
DETERMINING NET ASSET VALUE 8
- ---------------------------------------------------------------
Valuing Municipal Bonds 8
Use of Amortized Cost 8
REDEEMING SHARES 9
- ---------------------------------------------------------------
Redemption in Kind 9
TAX STATUS 9
- ---------------------------------------------------------------
The Fund's Tax Status 9
Shareholder's Tax Status 9
TOTAL RETURN 9
- ---------------------------------------------------------------
YIELD 10
- ---------------------------------------------------------------
TAX-EQUIVALENT YIELD 10
- ---------------------------------------------------------------
Tax-Equivalency Table 10
PERFORMANCE COMPARISONS 11
- ---------------------------------------------------------------
APPENDIX 12
- ---------------------------------------------------------------
GENERAL INFORMATION ABOUT THE FUND
- --------------------------------------------------------------------------------
The Fund is a portfolio in The Planters Funds (the "Trust"). The Trust was
established as a Massachusetts business trust under a Declaration of Trust dated
May 14, 1993.
INVESTMENT OBJECTIVE AND POLICIES
- --------------------------------------------------------------------------------
The Fund's investment objective is to provide current income exempt from federal
income tax and personal income taxes imposed by the state of Tennessee and
Tennessee municipalities. The investment objective cannot be changed without the
approval of shareholders.
ACCEPTABLE INVESTMENTS
The Fund invests primarily in a portfolio of municipal securities which are
exempt from federal income tax and personal income taxes imposed by the state of
Tennessee and Tennessee municipalities ("Tennessee Municipal Securities"). The
municipal securities in which the Fund invests include those issued by or on
behalf of the state of Tennessee and Tennessee municipalities as well as those
issued by states, territories, and possessions of the United States which are
exempt from federal income tax and personal income taxes imposed by the state of
Tennessee and Tennessee municipalities.
CHARACTERISTICS
The Tennessee municipal securities in which the Fund invests have the
characteristics set forth in the prospectus. If ratings made by Moody's
Investors Service, Inc. ("Moody's"), Standard & Poor's Corporation
("S&P") or Fitch's Investors Service ("Fitch's") change because of
changes in those organizations or in their rating systems, the Fund will
try to use comparable ratings as standards in accordance with the
investment policies described in the Fund's prospectus.
TYPES OF ACCEPTABLE INVESTMENTS
Examples of Tennessee municipal securities include:
governmental lease certificates of participation issued by state or
municipal authorities where payment is secured by installment payments
for equipment, buildings, or other facilities being leased by the state
or municipality;
municipal notes and tax-exempt commercial paper;
serial bonds;
tax anticipation notes sold to finance working capital needs of
municipalities in anticipation of receiving taxes;
bond anticipation notes sold in anticipation of the issuance of
long-term bonds;
pre-refunded municipal bonds whose timely payment of interest and
principal is ensured by an escrow of U.S. government obligations; and
general obligation bonds.
PARTICIPATION INTERESTS
The financial institutions from which the Fund purchases participation
interests frequently provide or secure from another financial institution
irrevocable letters of credit or guarantees and give the Fund the right
to demand payment of the principal amounts of the participation interests
plus accrued interest on short notice (usually within seven days).
VARIABLE-RATE MUNICIPAL SECURITIES
Variable interest rates generally reduce changes in the market value of
municipal securities from their original purchase prices. Accordingly, as
interest rates decrease or increase, the potential for capital
appreciation or depreciation is less for variable-rate municipal
securities than for fixed-income obligations. Many municipal securities
with variable interest rates purchased by the Fund are subject to
repayment of principal (usually within seven days) on the Fund's demand.
The terms of these variable-rate demand instruments require payment of
principal and accrued interest from the issuer of the municipal
obligations, the issuer of the participation interests, or a guarantor of
either issuer.
MUNICIPAL LEASES
In determining the liquidity of municipal lease securities, the adviser,
under the authority delegated by the Board of Trustees, will base its
determination on the following factors: (a) whether the lease can be
terminated by the lessee; (b) the potential recovery, if any, from a sale
of the leased property upon termination of the lease; (c) the lessee's
general credit strength (e.g., its debt, administrative, economic and
financial characteristics, and prospects); (d) the likelihood that the
lessee will discontinue appropriating funding for the
leased property because the property is no longer deemed essential to its
operations (e.g., the potential for an event of nonappropriation); and
(e) any credit enhancement or legal recourse provided upon an event of
nonappropriation or other termination of the lease.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
These transactions are arrangements in which the Fund purchases securities with
payment and delivery scheduled for a future time. The Fund engages in
when-issued and delayed delivery transactions only for the purpose of acquiring
portfolio securities consistent with the Fund's investment objective and
policies, not for investment leverage. These transactions are made to secure
what is considered to be an advantageous price and yield for the Fund.
Settlement dates may be a month or more after entering into these transactions,
and the market values of the securities purchased may vary from the purchase
prices.
No fees or 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 maintained until the transaction is settled.
During the current year, the Fund does not anticipate investing more than 20% of
its total assets in when-issued and delayed delivery transactions.
TEMPORARY INVESTMENTS
From time to time, during periods of other than normal market conditions, the
Fund may invest in short-term tax-exempt or taxable temporary investments.
REPURCHASE AGREEMENTS
The Fund requires its custodian to take possession of the securities subject to
repurchase agreements. 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 may only enter into repurchase agreements with
banks and other recognized financial institutions such as broker/dealers which
are found by the Fund's adviser to be creditworthy pursuant to guidelines
established by the Trustees.
From time to time, such as when suitable Tennessee municipal securities are not
available, the Fund may invest a portion of its assets in cash. Any portion of
the Fund's assets maintained in cash will reduce the amount of assets in
Tennessee municipal securities and thereby reduce the Fund's yield.
PORTFOLIO TURNOVER
The Fund may trade or dispose of portfolio securities as considered necessary to
meet its investment objective. It is not anticipated that the portfolio trading
engaged in by the Fund will result in its annual rate of portfolio turnover
exceeding 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 securities.
ISSUING SENIOR SECURITIES AND BORROWING MONEY
The Fund will not issue senior securities except that the Fund may borrow
money in amounts up to one-third of the value of its total assets,
including the amounts borrowed. The Fund will not borrow money for
investment leverage, but rather as a temporary extraordinary, or
emergency measure to facilitate management of the portfolio by enabling
the Fund to meet redemption requests when the liquidation of portfolio
securities is deemed to be inconvenient or disadvantageous. The Fund will
not purchase any securities while borrowings in excess of 5% of its total
assets are outstanding.
PLEDGING ASSETS
The Fund will not mortgage, pledge, or hypothecate its assets except to
secure permitted borrowings. In those cases, it may mortgage, pledge, or
hypothecate assets having a market value not exceeding 10% of the value
of its total assets at the time of the pledge.
UNDERWRITING
The Fund will not underwrite any issue of securities except as it may be
deemed to be an underwriter under the Securities Act of 1933 in
connection with the sale of securities in accordance with its investment
objective, policies and limitations.
INVESTING IN COMMODITIES
The Fund will not buy or sell commodities, commodity contracts, or
commodity futures contracts.
INVESTING IN REAL ESTATE
The Fund will not purchase or sell real estate, including limited
partnership interests, although it may invest in municipal bonds 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 up
to one-third of the value of its total assets. The Fund may, however,
acquire publicly or non-publicly issued municipal bonds or temporary
investments or enter into repurchase agreements in accordance with its
investment objective, policies and limitations.
DEALING IN PUTS AND CALLS
The Fund will not buy or sell puts, calls, straddles, spreads, or any
combination of these.
CONCENTRATION OF INVESTMENTS
The Fund will not purchase securities if, as a result of such purchase,
25% or more of the value of its total assets would be invested in any one
industry or in industrial development bonds or other securities, the
interest upon which is paid from revenues of similar types of projects.
However, under other than normal market conditions, the Fund may invest
more than 25% of the value of its assets in cash or cash items,
securities issued or guaranteed by the U.S. government, its agencies or
instrumentalities, or instruments secured by these money market
instruments, i.e., repurchase agreements.
The above investment limitations cannot be changed without shareholder approval.
The following limitations, however, may be changed by the Trustees without
shareholder approval. Shareholders will be notified before any material change
in these limitations becomes effective.
INVESTING IN ISSUERS WHOSE SECURITIES ARE OWNED BY OFFICERS AND TRUSTEES OF
THE FUND
The Fund will not purchase or retain the securities of any issuer if the
officers and Trustees of the Fund or its investment adviser, owning
individually more than 1/2 of 1% of the issuer's securities, together own
more than 5% of the issuer's securities.
INVESTING IN RESTRICTED SECURITIES
The Fund will not invest more than 10% of its total assets in securities
subject to restrictions on resale under the Securities Act of 1933,
except for commercial paper issued under Section 4(2) of the Securities
Act of 1933 and certain other restricted securities which meet the
criteria for liquidity as established by the Board of Trustees.
INVESTING IN ILLIQUID SECURITIES
The Fund will not invest more than 15% of its net assets in illiquid
obligations, including repurchase agreements providing for settlement in
more than seven days after notice, and certain restricted securities not
determined by the Trustees to be liquid, including certain municipal
leases.
INVESTING IN NEW ISSUERS
The Fund will not invest more than 5% of the value of its total assets in
industrial development bonds where the principal and interest are the
responsibility of companies (or guarantors, where applicable) with less
than three years of continuous operations, including the operation of any
predecessor.
INVESTING IN MINERALS
The Fund will not purchase interests in oil, gas, or other mineral
exploration or development programs or leases, although it may invest in
securities of issuers which invest in or sponsor such programs.
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.
The Fund does not expect to borrow money or pledge securities in excess
of 5% of the value of its net assets during the coming fiscal year.
For 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 and loan having capital, surplus,
and undivided profits in excess of $100,000,000 at the time of investment
to be cash items.
INVESTMENT RISKS
The Fund's performance can be expected to be closely tied to the prevailing
economic conditions of the state of Tennessee as a whole, its particular
geographic regions, and the industries located within state.
Traditionally divided into three geographic regions, the State's economy has
historically been dominated by agriculture in the west, manufacturing in the
east, and government in the middle region. Though trade and services have
replaced agriculture in terms of total output, manufacturing continues to be the
largest single sector of the economy. While the Gross State Product of Tennessee
was in excess of $100 billion in 1991 and the state placed 20th in national
rank, manufacturing comprised 24% of total production in that year. The recent
decision by Saturn and Nissan to locate automobile production facilities in the
state suggests that manufacturing, with its inherent susceptibility to economic
downturns, will continue to dominate.
Tennessee's economy experienced many of the problems associated with the
national economy during the past recession. Though it consistently remained
below the national average, the state's unemployment rate rose significantly
during the prior recessionary period. Also, overbuilding of commercial and
residential properties in prior years caused the state to experience some
difficulties with declining real estate values.
Along with the national economy, Tennessee has recently experienced a slow
recovery. Although moderate rates of economic growth in past recoveries along
with a steady influx of transplant corporations have helped the state avoid the
dramatic "boom and bust" cycle experienced by many sunbelt states, the recent
recession did put pressure on governmental receipts and outlays.
The constitution of the state requires a balanced budget. This constraint along
with relatively low debt and expenditure per capita ratios has helped the state
maintain its current long term bond rating of AAA by S&P and Aaa by Moody's.
While Tennessee is one of only nine states which have such ratings, the ability
of the state to maintain this rating given the current economic and political
environment is by no means certain. Additionally, the ability of the Fund to
achieve its investment objective also depends on the continuing ability of the
issuers of Tennessee municipal securities and participation interests, or the
credit enhancers of either, to meet their obligations for the payment of
interest and principal when due.
MANAGEMENT OF THE TRUST
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BOARD OF TRUSTEES
The Trust is managed by a Board of Trustees ("Trustees"). The Trustees are
responsible for managing the business affairs of the Trust and for exercising
all of the powers of Trust except those reserved for the shareholders. The
Executive Committee of the Board of Trustees handles the Board's
responsibilities between meetings of the Board.
OFFICERS AND TRUSTEES
Officers and Trustees are listed with their addresses, principal occupations,
and present positions, including any affiliation with Union Planters National
Bank, Federated Investors, Federated Securities Corp., Federated Services
Company, and Federated Administrative Services, and the Funds (as defined
below).
<TABLE>
<CAPTION>
POSITIONS WITH PRINCIPAL OCCUPATIONS
NAME THE TRUST DURING PAST FIVE YEARS
<S> <C> <C>
John F. Donahue\* Chairman Chairman and Trustee, Federated Investors; Chairman and Trustee,
Federated Investors Tower and Trustee Federated Advisers, Federated Management, and Federated Research;
Pittsburgh, PA Director, AEtna Life and Casualty Company; Chief Executive Officer and
Director, Trustee, or Managing General Partner of the Funds; formerly,
Director, The Standard Fire Insurance Company. Mr. Donahue is the father
of J. Christopher Donahue, Vice President and Trustee of the Trust.
John T. Conroy, Jr. Trustee President, Investment Properties Corporaton; Senior Vice President, John
Wood/IPC Commercial R. Wood and Associates, Inc., Realtors; President, Northgate Village
Development Development Corporation; General Partner or Trustee in private real
John R. Wood and estate ventures in Southwest Florida; Director, Trustee, or Managing
Associates, Inc., Realtors General Partner of the Funds; formerly, President, Naples Property
3255 Tamiami Trail North Management, Inc.
Naples, FL
William J. Copeland Trustee Director and Member of the Executive Committee, Michael Baker, Inc.;
One PNC Plaza-23rd Floor Director, Trustee, or Managing General Partner of the Funds; formerly
Pittsburgh, PA Vice Chairman and Director, PNC Bank, N.A., and PNC Bank Corp. and
Director, Ryan Homes, Inc.
James E. Dowd Trustee Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director,
571 Hayward Mill Road Trustee, or Managing General Partner of the Funds; formerly, Director,
Concord, MA Blue Cross of Massachusetts, Inc.
Lawrence D. Ellis, M.D. 3471 Trustee Hematologist, Oncologist, and Internist, Presbyterian and Montefiore
Fifth Avenue Hospitals; Clinical Professor of Medicine and Trustee, University of
Suite 1111 Pittsburgh; Director, Trustee, or Managing General Partner of the Funds.
Pittsburgh, PA
Edward L. Flaherty, Jr.\ Trustee Attorney-at-law; Partner, Meyer and Flaherty; Director, Eat'N Park
5916 Penn Mall Restaurants, Inc., and Statewide Settlement Agency, Inc.; Director,
Pittsburgh, PA Trustee, or Managing General Partner of the Funds; formerly, Counsel,
Horizon Financial, F.A., Western Region.
Edward C. Gonzales* President, Vice President, Treasurer, and Trustee, Federated Investors; Vice
Federated Investors Tower Treasurer President and Treasurer, Federated Advisers, Federated Management and
Pittsburgh, PA and Trustee Federated Research; Trustee, Federated Services Company; Executive Vice
President, Treasurer, and Director, Federated Securities Corp; Chairman,
Treasurer, and Trustee, Federated Administrative Services; Trustee of
some of the Funds; Vice President and Treasurer of the Funds.
Peter E. Madden Trustee Consultant; Trustee, Lahey Clinic Foundation, Inc.; Director, Trustee,
225 Franklin Street or Managing General Partner of the Funds; formerly, President, State
Boston, MA Street Bank & Trust Company and State Street Boston Corporation and
Trustee, Lahey Clinic Foundation, Inc.
Gregor F. Meyer Trustee Attorney-at-law; Partner, Meyer and Flaherty; Chairman, Meritcare, Inc.;
5916 Penn Mall Director, Trustee, or Managing General Partner of the Funds; formerly,
Pittsburgh, PA Vice Chairman, Horizon Financial, F.A.
Wesley W. Posvar Trustee Professor, Foreign Policy and Management Consultant; Trustee, Carnegie
1202 Cathedral of Endowment for International Peace, RAND Corporation, Online Computer
Learning Library Center, Inc. and U.S. Space Foundation; Chairman, Czecho Slovak
University of Pittsburgh Management Center; Director, Trustee, or Managing General Partner of the
Pittsburgh, PA Funds; President Emeritus, University of Pittsburgh; formerly, Chairman,
National Advisory Council for Environmental Policy and Technology.
Marjorie P. Smuts Trustee Public relations/marketing consultant; Director, Trustee, or Managing
4905 Bayard Street General Partner of the Funds.
Pittsburgh, PA
J. Christopher Donahue* Federated Vice President President and Trustee, Federated Investors; Trustee, Federated Advisers,
Investors Tower Federated Management, and Federated Research; President and Trustee,
Pittsburgh, PA Federated Administrative Services; Trustee, Federated Services Company;
President or Vice President of the Funds; Director, Trustee or Managing
General Partner of some of the Funds. Mr. Donahue is the son of John F.
Donahue, Chairman and Trustee of the Trust.
Richard B. Fisher Vice President Executive Vice President and Trustee, Federated Investors; Chairman and
Federated Investors Tower Director, Federated Securities Corp.; President or Vice President of the
Pittsburgh, PA Funds; Director or Trustee of some of the Funds.
John W. McGonigle Vice President Vice President, Secretary, General Counsel, and Trustee, Federated
Federated Investors Tower and Assistant Investors; Vice President, Secretary and Trustee, Federated Advisers,
Pittsburgh, PA Treasurer Federated Management, and Federated Research; Trustee, Federated
Services Company; Executive Vice President, Secretary, and Director,
Federated Administrative Services; Director and Executive Vice
President, Federated Securities Corp.; Vice President and Secretary of
the Funds.
John A. Staley, IV Vice President Vice President and Trustee, Federated Investors; Executive Vice
Federated Investors Tower President, Federated Securities Corp.; President and Trustee, Federated
Pittsburgh, PA Advisers, Federated Management, and Federated Research; Vice President
of the Funds; Director, Trustee, or Managing General Partner of some of
the Funds; formerly, Vice President, The Standard Fire Insurance Com-
pany and President of its Federated Research Division.
Judy Mackin Vice President Vice President, Federated Administrative Services; Vice President and
Federated Investors Tower Assistant Treasurer of some of the Funds.
Pittsburgh, PA
</TABLE>
* This Trustee is deemed to be an "interested person" of the Trust as defined in
the Investment Company Act of 1940.
\ Members of the Trust's Executive Committee. The Executive Committee of the
Board of Trustees handles the responsibilities of the Board of Trustees
between meetings of the Board.
FUND OWNERSHIP
Officers and Trustees own less than 1% of the Fund's outstanding shares.
TRUSTEE LIABILITY
The Trust's Declaration of Trust provides that the Trustees will not be liable
for errors of judgment or mistakes of fact or law. However, they are not
protected against any liability to which they would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of their office.
THE FUNDS
"The Funds" and "Funds" mean the following investment companies: A.T. Ohio
Tax-Free Money Fund; American Leaders Fund, Inc.; Annuity Management Series;
Automated Cash Management Trust; Automated Government Money Trust; BankSouth
Select Funds; The Boulevard Funds; California Municipal Cash Trust; Cash Trust
Series
Inc.; Cash Trust Series II; DG Investor Series; Edward D. Jones & Co. Daily
Passport Cash Trust; FT Series, Inc.; Federated ARMs Fund; Federated Exchange
Fund, Ltd.; Federated GNMA Trust; Federated Government Trust; Federated Growth
Trust; Federated High Yield Trust; Federated Income Securities Trust; Federated
Income Trust; Federated Index Trust; Federated Intermediate Government Trust;
Federated Master Trust; Federated Municipal Trust; Federated Short-Intermediate
Government Trust; Federated Short-Term U.S. Government Trust; Federated Stock
Trust; Federated Tax-Free Trust; Federated U.S. Government Bond Fund; First
Priority Funds; Fixed Income Securities, Inc.; Fortress Adjustable Rate U.S.
Government Fund, Inc.; Fortress Municipal Income Fund, Inc.; Fortress Utility
Fund, Inc.; Fund for U.S. Government Securities, Inc.; Government Income
Securities, Inc.; High Yield Cash Trust; Insight Institutional Series, Inc.;
Insurance Management Series; Intermediate Municipal Trust; Investment Series
Funds, Inc.; Investment Series Trust; Liberty Equity Income Fund, Inc; Liberty
High Income Bond Fund, Inc.; Liberty Municipal Securities Fund, Inc.; Liberty
Term Trust, Inc.--1999; Liberty U.S. Government Money Market Trust; Liberty
Utility Fund, Inc.; Liquid Cash Trust; Mark Twain Funds; Money Market
Management, Inc.; Money Market Obligations Trust; Money Market Trust; Municipal
Securities Income Trust; New York Municipal Cash Trust; 111 Corcoran Funds;
Portage Funds; RIMCO Monument Funds; The Shawmut Funds; Short Term Municipal
Trust; Signet Select Funds; Star Funds; The Starburst Funds; The Starburst Funds
II; Stock and Bond Fund, Inc.; Targeted Duration Trust; Tax-Free Instruments
Trust; Trademark Funds; Trust for Government Cash Reserves; Trust for Short-Term
U.S. Government Securities; and Trust for U.S. Treasury Obligations.
INVESTMENT ADVISORY SERVICES
- --------------------------------------------------------------------------------
ADVISER TO THE FUND
The Fund's investment adviser is Union Planters National Bank ("Union Planters"
or the "adviser"). Union Planters is a wholly-owned subsidiary of Union Planters
Corporation, a multi-bank holding company headquartered in Memphis, Tennessee.
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 Fund.
From time to time, to the extent consistent with the objective, policies and
restrictions of the Fund, the Fund may invest in securities of issuers with
which the adviser has a lending relationship.
ADVISORY FEES
For its advisory services, Union Planters receives an annual investment advisory
fee as described in the prospectus.
For the period from August 5, 1993 (start of business) to January 31, 1994, the
adviser earned advisory fees of $103,304, of which $90,600 was voluntarily
waived.
STATE EXPENSE LIMITATIONS
The adviser has undertaken to comply with the expense limitations
established by certain states for investment companies whose shares are
registered for sale in those states. If the Fund's normal operating
expenses (including the investment advisory fee, but not including
brokerage commissions, interest, taxes, and extraordinary expenses)
exceed 2.5% per year of the first $30 million of average net assets, 2%
per year of the next $70 million of average net assets, and 1.5% per year
of the remaining average net assets, the adviser will reimburse the Trust
for its expenses over the limitation.
If the Fund's monthly projected operating expenses exceed this expense
limitation, the investment advisory fee paid will be reduced by the
amount of the excess, subject to an annual adjustment. If the expense
limitation is exceeded, the amount to be reimbursed by the adviser will
be limited, in any single fiscal year, by the amount of the investment
advisory fee. This arrangement is not part of the advisory contract and
may be amended or rescinded in the future.
ADMINISTRATIVE SERVICES
- --------------------------------------------------------------------------------
Federated Administrative Services, a subsidiary of Federated Investors, provides
administrative personnel and
services to the Fund for the fees set forth in the prospectus. John A. Staley,
IV, an officer of the Fund, holds approximately 15%, of the outstanding common
stock and serves as a director of Commercial Data Services, Inc., a company
which provides computer processing services to Federated Administrative
Services.
For the period from August 5, 1993, (start of business) to January 31, 1994, the
administrator earned $50,254 in administrative costs of which $44,166 was
voluntarily waived.
ADMINISTRATIVE ARRANGEMENTS
The distributor may pay financial institutions a fee based upon the average net
asset value of shares of their customers for providing administrative services.
This fee, if paid, will be reimbursed by the adviser and not the Fund.
CUSTODIAN
State Street Bank and Trust company, Boston, Massachusetts, is custodian
for the securities and cash of the Fund.
BROKERAGE TRANSACTIONS
- --------------------------------------------------------------------------------
When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the adviser looks for prompt execution of the order at a favorable
price. In working with dealers, the adviser will generally use those which are
recognized dealers in specific portfolio instruments, except when a better price
and execution of the order can be obtained elsewhere. The adviser makes
decisions on portfolio transactions and selects brokers and dealers subject to
review by the Board of Trustees.
The adviser may select brokers and dealers who offer brokerage and research
services. These services may be furnished directly to the Fund or to the adviser
and may include:
advice as to the advisability of investing in securities;
security analysis and reports;
economic studies;
industry studies;
receipt of quotations for portfolio evaluations; and
similar services.
The adviser and its affiliates exercise reasonable business judgment in
selecting brokers who offer brokerage and research services to execute
securities transactions. They determine in good faith that commissions charged
by such persons are reasonable in relationship to the value of the brokerage and
research services provided.
Research services provided by brokers may be used by the adviser and other
accounts. To the extent that receipt of these services may supplant services for
which the adviser or its affiliates might otherwise have paid, it would tend to
reduce their expenses.
From August 5, 1993, (start of business) to January 31, 1994, the Fund paid no
commissions on brokerage transactions .
PURCHASING SHARES
- --------------------------------------------------------------------------------
Shares of the Fund are sold at their net asset value with a sales charge 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."
DETERMINING NET ASSET VALUE
- --------------------------------------------------------------------------------
Net asset value generally changes each day. The days on which net asset value is
calculated for the Fund are described in the prospectus.
VALUING MUNICIPAL BONDS
The Trustees use an independent pricing service to value municipal bonds. The
independent pricing service takes into consideration yield, stability, risk,
quality, coupon rate, maturity, type of issue, trading characteristics, special
circumstances of a security or trading market, and any other factors or market
data it considers relevant in determining valuations for normal institutional
size trading units of debt securities, and does not rely exclusively on quoted
prices.
USE OF AMORTIZED COST
The Trustees have decided that the fair value of debt securities authorized to
be purchased by the Fund with remaining maturities of 60 days or less at the
time of purchase shall be their amortized cost value, unless the particular
circumstances of the security indicate otherwise. Under this method, portfolio
instruments and assets are valued at the acquisition cost as adjusted for
amortization of premium or accumulation of discount rather than at current
market value. The Executive Committee continually assesses this method of
valuation and recommends
changes where necessary to assure that the Fund's portfolio instruments are
valued at their fair value as determined in good faith by the Trustees.
REDEEMING SHARES
- --------------------------------------------------------------------------------
Shares are redeemed at the next computed net asset value after the Fund receives
the redemption request. Redemption procedures are explained in the prospectus
under "Redeeming Shares." Although Union Planters 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
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.
Any redemption beyond this amount will also be in cash unless the Trustees
determine that payments should be in kind. In such a case, the Fund will pay all
or a portion of the remainder of the redemption in portfolio instruments, valued
in the same way as the Fund determines net asset value. The portfolio
instruments will be selected in a manner that the Trustees deem fair and
equitable. To the extent available, such securities will be readily marketable.
Redemption in kind is not as liquid as a cash redemption. If redemption is made
in kind, shareholders receiving their securities and selling them before their
maturity could receive less than the redemption value of their securities and
could incur certain transactions costs.
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:
derive at least 90% of its gross income from dividends, interest, and gains from
the sale of securities;
derive less than 30% of its gross income from the sale of securities held less
than three months;
invest in securities within certain statutory limits; and
distribute to its shareholders at least 90% of its net income earned during the
year.
SHAREHOLDER'S TAX STATUS
No portion of any income dividend paid by the Fund is eligible for the dividends
received deduction available to corporations.
CAPITAL GAINS
Capital gains or losses may be realized by the Fund on the sale of
portfolio securities and as a result of discounts from par value on
securities held to maturity. Sales would generally be made because of:
the availability of higher relative yields;
differentials in market values;
new investment opportunities;
changes in creditworthiness of an issuer; or
an attempt to preserve gains or limit losses.
Distributions of long-term capital gains are taxed as such, whether they are
taken in cash or reinvested, and regardless of the length of time that the
shareholder has owned shares. Any loss by a shareholder on shares held for less
than six months and sold after a capital gains distribution will be treated as a
long-term capital loss to the extent of the capital gains distribution.
TOTAL RETURN
- --------------------------------------------------------------------------------
Cumulative total return reflects the Fund's total performance over a specific
period of time. The cumulative total return for the Fund for the period from
August 30, 1993, (date of initial public investment) to January 31, 1994 was
4.84%.This total return is representative of only five months of activity since
the date of initial public investment.
The average annual total return for the Fund 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, less any applicable sales load, adjusted
over the period by any additional shares, assuming the monthly reinvestment of
all dividends and distributions.
YIELD
- --------------------------------------------------------------------------------
The Funds' yield for the thirty-day period ended January 31, 1994, was 4.06%
based on offer price.
The yield for the Fund is determined by dividing the net investment income per
share (as defined by the Securities and Exchange Commission) earned by the Fund
over a thirty-day period by the maximum offering price per share of the Fund on
the last day of the period. This value is then 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 twelve-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 shareholders.
To the extent that financial institutions and broker/dealers charge fees in
connection with services provided in conjunction with an investment in the Fund,
performance will be reduced for those shareholders paying those fees.
TAX-EQUIVALENT YIELD
- --------------------------------------------------------------------------------
The Funds' tax-equivalent yield for the thirty-day period ended January 31, 1994
was 6.15%.
The tax-equivalent yield of the Fund is calculated similarly to the yield, but
is adjusted to reflect the taxable yield that the Fund would have had to earn to
equal its actual yield, assuming a state and federal combined tax rate of 34%,
and assuming that income is 100% tax-exempt.
TAX-EQUIVALENCY TABLE
The Fund may also use a tax-equivalency table in advertising and sales
literature. The interest earned by the municipal obligations in the Fund's
portfolio generally remains free from federal regular income tax, and often is
free from taxes imposed by the state of Tennessee and Tennessee municipalities.*
As the table below indicates, a "tax-free" investment is an attractive choice
for investors, particularly in times of narrow spreads between tax-free and
taxable yields.
* Some portion of the Fund's income may be subject to the federal alternative
minimum tax and state and local taxes. However, the Fund has no current
intention to generate taxable income.
<TABLE>
<S> <C> <C> <C> <C> <C>
TAXABLE YIELD EQUIVALENT FOR 1994
STATE OF TENNESSEE
- -----------------------------------------------------------------------------------------------------------------------
TAX BRACKET:
FEDERAL: 15.00% 28.00% 31.00% 36.00% 39.60%
COMBINED FEDERAL
AND STATE: 21.00% 34.00% 37.00% 42.00% 45.60%
- -----------------------------------------------------------------------------------------------------------------------
JOINT RETURN: $1-38,000 $38,001-91,850 $91,851-140,000 $140,001-250,000 OVER $250,000
SINGLE RETURN: $1-22,175 $22,751-55,100 $55,101-140,000 $140,001-250,000 OVER $250,000
- -----------------------------------------------------------------------------------------------------------------------
TAX-EXEMPT YIELD TAXABLE YIELD EQUIVALENT
- -----------------------------------------------------------------------------------------------------------------------
1.50% 1.90% 2.27% 2.38% 2.59% 2.76%
2.00 2.53 3.03 3.17 3.45 3.68
2.50 3.16 3.79 3.97 4.31 4.60
3.00 3.80 4.55 4.76 5.17 5.51
3.50 4.43 5.30 5.56 6.03 6.43
4.00 5.06 6.06 6.35 6.90 7.35
4.50 5.70 6.82 7.14 7.76 8.27
5.00 6.33 7.58 7.94 8.62 9.19
5.50 6.96 8.33 8.73 9.48 10.11
6.00 7.59 9.09 9.52 10.34 11.03
</TABLE>
Note: The maximum marginal tax rate for each bracket was used in calculating the
taxable yield equivalent. Furthermore, additional state and local taxes
paid on comparable taxable investments were not used to increase federal
deductions. If you itemize deductions, your taxable yield equivalent will
be lower.
The chart above is for illustrative purposes only. It is not an indicator of
past or future performance of Fund shares.
* Some portion of the Fund's income may be subject to the federal alternative
minimum tax and state and local income taxes.
PERFORMANCE COMPARISONS
- --------------------------------------------------------------------------------
The performance of the Fund depends upon such variables as:
portfolio quality;
average portfolio maturity;
type of instruments in which the portfolio is invested;
changes in interest rates and market value of portfolio securities;
changes in the Fund's expenses; and
various other factors.
The Fund's performance fluctuates on a daily basis largely because net earnings
and net asset value per share fluctuate daily. Both net earnings and net asset
value per share are factors in the computation of yield and total return as
described above.
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 comparisons 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:
LIPPER ANALYTICAL SERVICES, INC. ranks funds in various fund categories by
making comparative calculations using total return. Total return assumes the
reinvestment of all capital gains distributions and income dividends and takes
into account any change in net asset value over a specific period of time.
MORNINGSTAR, INC., an independent rating service, is the publisher of the
bi-weekly Mutual Fund Values. Mutual Fund Values rates more than 1,000
NASDAQ-listed mutual funds of all types, according to their risk-adjusted
returns. The maximum rating is five stars, and ratings are effective for two
weeks.
Advertisements and other sales literature for the Fund may quote total returns
which are calculated on non-standardized base periods. The 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.
Advertisements may quote performance information which does not reflect the
effect of the sales load.
APPENDIX
- --------------------------------------------------------------------------------
STANDARD AND POOR'S CORPORATION MUNICIPAL BOND RATINGS
AAA--Debt rated "AAA" has the highest rating assigned by Standard & Poor's
Corporation. 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 S&P does not rate a
particular type of obligation as a matter of policy.
Plus (+) or minus (-): The ratings from AA to CCC 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., MUNICIPAL 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
edged." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa--Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the AAA group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than in AAA securities.
A--Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
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.
Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa through B in its generic rating category; the modifier 1
indicates that the security ranks in the higher end of its generic rating
category; the modifier 2 indicates a mid-range ranking; and the modifier 3
indicates that the issue ranks in the lower end of its generic rating category.
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 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.
Plus (+) or minus (-): Plus and minus signs are used with a rating symbol to
indicate the relative position of a credit within the rating category. Plus and
minus signs, however, are not used in the "AAA" category.
STANDARD AND POOR'S MUNICIPAL NOTE RATINGS
SP-1--Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety charactertics will be given a plus (+)
designation.
SP-2--Satisfactory capacity to pay principal and interest.
MOODY'S INVESTORS SERVICE, INC., SHORT-TERM LOAN RATINGS
MIG1/VMIG1--This designation denotes best quality. There is a present strong
protection by established cash flows, superior liquidity support or demonstrated
broadbased access to the market for refinancing.
MIG2/VMIG2--This designation denotes high quality. Margins of protection are
ample although not so large as in the preceding group.
FITCH INVESTORS SERVICE, INC. SHORT-TERM DEBT 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 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.
STANDARD AND POOR'S CORPORATION COMMERCIAL PAPER RATINGS
A-1--This highest category designation indicates that the degree of safety
regarding timely payment is either overwhelming or very strong. Those issues
determined to possess extremely strong safety characteristics are denoted with a
plus sign (+) designation.
A-2--Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated A-1.
MOODY'S INVESTORS SERVICE, INC., COMMERCIAL PAPER RATINGS
PRIME-1--Issuers rated PRIME-1 (or related supporting institutions) have a
superior capacity for repayment of short-term promissory obligations. PRIME-1
repayment capacity will normally be evidenced by the following characteristics:
Leading market positions in well established industries.
High rates of return on funds employed.
Conservative capitalization structure with moderate reliance on debt and ample
asset protection.
Broad margins in earning coverage of fixed financial charges and high internal
cash generation.
Well-established access to a range of financial markets and assured sources of
alternate liquidity.
PRIME-2--Issuers rated PRIME-2 (or related supporting institutions) have a
strong capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above, but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternate liquidity is
maintained.
3072709B (2/94)
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits:
(a) Financial Statements. (Filed in Part A)
(b) Exhibits:
(1) Copy of Declaration of Trust of the Registrant (2);
(2) Copy of By-Laws of the Registrant (2);
(3) Not applicable;
(4) Copy of Specimen Certificate for Shares of Beneficial
Interest of the Registrant (2);
(5) Conformed Copy of Investment Advisory Contract of the
Registrant;+
(6) (i) Conformed Copy of the Distributor's
Contract/ Administrative Support and
Distributor's Contract of the Registrant;+
(ii) Conformed Copy of Administrative Services
Agreement;+
(7) Not applicable;
(8) Conformed Copy of Custodian Agreement of the
Registrant;+
(9) Copy of Transfer Agency and Service Agreement of the
Registrant;+
(10) Copy of Opinion and Consent of Counsel as
to legality of shares being registered (2);
(11) Opinion and Consent of Special Counsel (2);
(12) Not applicable;
(13) Copy of Initial Capital Understanding (2);
(14) Copy of Retirement Plan;
(15) (i) Copy of Distribution Plan;
(ii) Copy of Dealer Agreement;
(iii) Copy of 12b-1 Agreement;
(16) Schedule for Computation of Fund
Performance Data;+
(17) Power of Attorney (1).
(18) Opinion and Consent of Counsel as to
Availability of Rule 485 (b).+
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 February 10, 1994
Tennesse Tax-Free Bond Fund 10
Shares of Beneficial Interest
(no par value)
___________________
+ All exhibits have been filed electronically.
(1) Response is incorporated by reference to Registrant's Initial
Registration Statement on Form N-1A filed June 22, 1993.
(File No. 33-49701)
(2) Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 1 on Form N-1A filed August 11, 1993. (File No. 33-49701)
Item 27. Indemnification: (2)
Item 28. Business and Other Connections of Investment Adviser:
(a) Founded in 1869, Union Planters National Bank, a national
banking association, is a wholly-owned subsidiary of Union
Planters Corporation (the "Corporation") a multi-bank holding
company headquartered in Memphis, Tennessee. Union Planters
is a commercial bank offering a wide range of banking
services to its customers. The adviser has been managing
trust assets for over 80 years. As of December 31, 1993, the
Trust Group of Union Planters had approximately $900 million
under administration, of which it had investment discretion
over approximately $490 million.
(b)
Other Substantial
Position with Business, Profession,
Name the Adviser Vocation or Employment
Benjamin W. Rawlins, Jr. Chairman of the
Board, Chief Executive
Officer and Director
J. Armistead Smith Vice Chairman and
Director
Jackson W. Moore President and Director
Robert L. Booth, Jr. Executive Vice President
James A. Gurley Executive Vice President
Jack W. Parker Executive Vice President
and Chief Financial Officer
Kenneth W. Plunk Executive Vice President
M. Kirk Walters Senior Vice President,
Treasurer, and Chief
Accounting Officer
J. F. Springfield Secretary and General
Counsel
Albert M. Austin Director Chairman, Cannon,
Austin and Cannon, Inc.
Marvin E. Bruce Director Chairman and Chief
Executive Officer, TBC
Corporation
George W. Bryan Director Senior Vice President,
Sara Lee Corporation
2. Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 1 on Form N-1A filed on August 11, 1993.
(File No. 33-49701)
Robert B. Colbert, Jr.* Director Chairman, Signal Apparel
Co., Inc.
Hanford F. Farrell, Jr. Director Chairman, Farrell-Cooper
Mining Company
James L. Harper** Director Partner, Harper-Maes and
Associates
C. J. Lowrence, III Director President, Lowrence
Brothers & Co., Inc.
R. Brad Martin Director Chairman and Chief
Executive Officer,
Proffitts, Inc.
Stanley D. Overton Director Vice Chairman, Union
Planters National Bank
C. Penn Owen, Jr. Director Managing Partner, Bowdre
Place
Dr. V. Lane Rawlins Director President, Memphis State
University
Leslie M. Stratton, III Director President, Leslie M.
Stratton Company
Mike P. Sturdivant* Director President, Due West Gin
Co., Inc.
Richard A. Trippeer, Jr. Director President, R.A.
Trippeer, Inc.
John M. Tully Director President,
Anderson-Tully Company
* Director of Union Planters Corporation only.
** Director Union Planters National Bank only.
Item 29. Principal Underwriters:
(a) Federated Securities Corp., the Distributor for shares of the
Registrant, also acts as principal underwriter for the
following open-end investment companies: A.T. Ohio Tax-Free
Money Fund; Alexander Hamilton Funds; American Leaders Fund,
Inc.; Annuity Management Series; Automated Cash Management
Trust; Automated Government Money Trust; BankSouth Select
Funds; BayFunds; The Biltmore Funds; The Biltmore Municipal
Funds; The Boulevard Funds; California Municipal Cash Trust;
Cambridge Series Trust; Cash Trust Series, Inc.; Cash Trust
Series II; DG Investor Series; Edward D. Jones & Co. Daily
Passport Cash Trust; FT Series, Inc.; Federated ARMs Fund;
Federated Exchange Fund, Ltd.; Federated GNMA Trust; Federated
Government Trust; Federated Growth Trust; Federated High Yield
Trust; Federated Income Securities Trust; Federated Income
Trust; Federated Index Trust; Federated Intermediate Government
Trust; Federated Master Trust; Federated Municipal Trust;
Federated Short-Intermediate Government Trust; Federated
Short-Term U.S. Government Trust; Federated Stock Trust;
Federated Tax-Free Trust; Federated U.S. Government Bond Fund;
Financial Reserves Fund; First Priority Funds; First Union
Funds; Fixed Income Securities, Inc.; Fortress Adjustable Rate
U.S. Government Fund, Inc.; Fortress Municipal Income Fund,
Inc.; Fortress Utility Fund, Inc.; Fountain Square Funds; Fund
for U.S. Government Securities, Inc.; Government Income
Securities, Inc.; High Yield Cash Trust; Independence One
Mutual Funds; Insight Institutional Series, Inc.; Insurance
Management Series; Intermediate Municipal Trust; Investment
Series Funds, Inc.; Investment Series Trust; Liberty Equity
Income Fund, Inc.; Liberty High Income Bond Fund, Inc.; Liberty
Municipal Securities Fund, Inc.; Liberty U.S. Government Money
Market Trust; Liberty Utility Fund, Inc.; Liquid Cash Trust;
Mark Twain Funds; Marshall Funds, Inc.; Money Market
Management, Inc.; Money Market Obligations Trust; Money Market
Trust; The Monitor Funds; Municipal Securities Income Trust;
New York Municipal Cash Trust; 111 Corcoran Funds; The Planters
Funds; Portage Funds; RIMCO Monument Funds; The Shawmut Funds;
Short-Term Municipal Trust; Signet Select Funds; SouthTrust
Vulcan Funds; Star Funds; The Starburst Funds; The Starburst
Funds II; Stock and Bond Fund, Inc.; Sunburst Funds; Targeted
Duration Trust; Tax-Free Instruments Trust; Tower Mutual Funds;
Trademark Funds; Trust for Financial Institutions; Trust for
Government Cash Reserves; Trust for Short-Term U.S. Government
Securities; Trust for U.S. Treasury Obligations; Vision
Fiduciary Funds, Inc.; and Vision Group of Funds, Inc.
Federated Securities Corp. also acts as principal underwriter
for the following closed-end investment company: Liberty Term
Trust, Inc.- 1999.
(b)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Richard B. Fisher Director, Chairman, Chief Vice President
Federated Investors Tower Executive Officer, Chief
Pittsburgh, PA 15222-3779 Operating Officer, and
Asst. Treasurer, Federated
Securities Corp.
Edward C. Gonzales Director, Executive Vice President and
Federated Investors Tower President, and Treasurer, Treasurer
Pittsburgh, PA 15222-3779 Federated Securities
Corp.
John W. McGonigle Director, Executive Vice Vice President and
Federated Investors Tower President, and Assistant Secretary
Pittsburgh, PA 15222-3779 Secretary, Federated
Securities Corp.
John A. Staley, IV Executive Vice President Vice President
Federated Investors Tower and Assistant Secretary,
Pittsburgh, PA 15222-3779 Federated Securities Corp.
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark R. Gensheimer Executive Vice President of --
Federated Investors Tower Bank/Trust
Pittsburgh, PA 15222-3779 Federated Securities Corp.
Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
H. Joseph Kennedy Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James R. Ball Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard W. Boyd Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Laura M. Deger Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David C. Glabicki Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Scott A. Hutton Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William J. Kerns Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William E. Kugler Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Dennis M. Laffey Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Francis J. Matten, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Jeffrey Niss Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael P. O'Brien Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Solon A. Person, IV Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Charles A. Robison Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas E. Territ Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Philip C. Hetzel Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Ernest L. Linane Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
S. Elliott Cohan Secretary, Federated Assistant
Federated Investors Tower Securities Corp. Secretary
Pittsburgh, PA 15222-3779
Item 30. Location of Accounts and Records:
All accounts and records required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and Rules 31a-1
through 31a-3 promulgated thereunder are maintained at one of the
following locations:
Registrant
Federated Services Company Federated Investors Tower
("Transfer Agent, Dividend Pittsburgh, PA 15222-3779
Disbursing Agent, and Portfolio
Recordkeeper")
Federated Administrative Services
("Administrator")
State Street Bank and Trust Company P.O. Box 8604
("Custodian") Boston, MA 02266-8604
Union Planters National Bank P.O. Box 387
("Adviser") Memphis, Tennessee 38101
Item 31. Management Services: Not applicable.
Item 32. Undertakings:
Registrant hereby undertakes to comply with the provisions of
Section 16(c) of the 1940 Act with respect to the removal of
Trustees and the calling of special shareholder meetings by
shareholders.
Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, THE PLANTERS FUNDS,
certifies that it meets all of the requirements for effectiveness of
this Amendment to its Registration Statement pursuant to Rule 485(b)
under the Securities Act of 1933 and has duly caused this Amendment to
its Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Pittsburgh
and Commonwealth of Pennsylvania, on the 1st day of March, 1994.
THE PLANTERS FUNDS
BY: /s/Gail Cagney
Gail Cagney, Assistant Secretary
Attorney in Fact for John F. Donahue
March 1, 1994
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to its Registration Statement has been signed below by the
following person in the capacity and on the date indicated:
NAME TITLE DATE
By: /s/Gail Cagney
Gail Cagney Attorney In Fact March 1,
1994
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)
John T. Conroy, Jr.* Trustee
William J. Copeland* Trustee
James E. Dowd* Trustee
Lawrence D. Ellis, M.D.* Trustee
Edward L. Flaherty, Jr.* Trustee
Peter E. Madden* Trustee
Gregor F. Meyer* Trustee
Wesley W. Posvar* Trustee
Marjorie P. Smuts* Trustee
* By Power of Attorney
HOUSTON, HOUSTON & DONNELLY
ATTORNEYS AT LAW
2510 CENTRE CITY TOWER
WILLIAM McC. HOUSTON PITTSBURGH, PA. 15222
FRED CHALMERS HOUSTON, JR. __________
THOMAS J. DONNELLY
JOHN F. MECK (412) 471-5828 FRED CHALMERS HOUSTON
FAX (412) 471-0736 (1914 - 1971)
MARIO SANTILLI, JR.
THEODORE M. HAMMER
February 22, 1994
The Planters Funds
Federated Investors Tower
Pittsburgh, PA 15222-3779
Gentlemen:
As counsel to The Planters Funds ("Trust") we have reviewed
Post-effective Amendment No. 1 to the Trust's Registration
Statement to be filed with the Securities and Exchange Commission
under the Securities Act of 1933 (File No. 33-49701). The
subject Post-effective Amendment will be filed pursuant to
Paragraph (b) of Rule 485 and become effective pursuant to said
Rule immediately upon filing.
Our review also included an examination of other relevant
portions of the amended 1933 Act Registration Statement of the
Trust and such other documents and records deemed appropriate.
On the basis of this review we are of the opinion that
Post-effective Amendment No. 1 does not contain disclosures which
would render it ineligible to become effective pursuant to
Paragraph (b) of Rule 485.
We hereby consent to the filing of this representation
letter as a part of the Trust's Registration Statement filed with
the Securities and Exchange Commission under the Securities Act
of 1933 and as part of any application or registration statement
filed under the Securities Laws of the States of the United
States.
Very truly yours,
Houston, Houston & Donnelly
By: Thomas J. Donnelly
TJD:heh
Exhibit 6(ii) under Form N-1A
Exhibit 10 under Item 601/Reg S-K
The Planters Funds
ADMINISTRATIVE SERVICES AGREEMENT
This Administrative Services Agreement is made as of this 1st day of
June, 1993, between The Planters Funds, a Massachusetts business trust
(herein called the "Fund"), and Federated Administrative Services, a
Delaware business trust (herein called "FAS").
WHEREAS, the Fund is a Massachusetts business trust, consisting of
one or more portfolios, which operates as an open-end management investment
company and will so register under the Investment Company Act of 1940; and
WHEREAS, the Fund desires to retain FAS as its Administrator to
provide it with administrative services, and FAS is willing to render such
services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein, the parties hereto agree as follows:
1. Appointment of Administrator. The Fund hereby appoints FAS as
Administrator of the Fund on the terms and conditions set forth in this
agreement; and FAS hereby accepts such appointment and agrees to perform
the services and duties set forth in Section 2 of this Agreement in
consideration of the compensation provided for in Section 4 hereof.
2. Services and Duties. As Administrator, and subject to the
supervision and control of the Fund's Board of Trustees, FAS will provide
facilities, equipment, and personnel to carry out the following
administrative services for operation of the business and affairs of the
Fund and each of its portfolios:
(a) prepare, file, and maintain the Fund's governing documents,
including the Declaration of Trust (which has already been
prepared and filed), the By-laws and minutes of meetings of
Trustees and shareholders;
(b) prepare and file with the Securities and Exchange Commission
and the appropriate state securities authorities the registration
statements for the Fund and the Fund's shares and all amendments
thereto, reports to regulatory authorities and shareholders,
prospectuses, proxy statements, and such other documents, all as
may be necessary to enable the Fund to make a continuous offering
of its shares;
(c) prepare, negotiate, and administer contracts on behalf of
the Fund with, among others, the Fund's investment adviser,
distributor, custodian, and transfer agent;
(d) supervise the Fund's custodian in the maintenance of the
Fund's general ledger and in the preparation of the Fund's
financial statements, including oversight of expense accruals and
payments, of the determination of the net asset value of the
Fund, and of the declaration and payment of dividends and other
distributions to shareholders;
(e) calculate performance data of the Fund for dissemination to
information services covering the investment company industry;
(f) prepare and file the Fund's tax returns;
(g) examine and review the operations of the Fund's custodian
and transfer agent;
(h) coordinate the layout and printing of publicly disseminated
prospectuses and reports;
(i) perform internal audit examinations in accordance with a
charter to be adopted by FAS and the Fund;
(j) assist with the design, development, and operation of the
Fund;
(k) provide individuals reasonably acceptable to the Fund's
Board of Trustees for nomination, appointment, or election as
officers of the Fund, who will be responsible for the management
of certain of the Fund's affairs as determined by the Fund's
Board of Trustees; and
(l) consult with the Fund and its Board of Trustees on matters
concerning the Fund and its affairs.
The foregoing, along with any additional services that FAS shall
agree in writing to perform for the Fund hereunder, shall hereafter be
referred to as "Administrative Services." Administrative Services shall
not include any duties, functions, or services to be performed for the Fund
by the Fund's investment adviser, distributor, custodian, or transfer agent
pursuant to their agreements with the Fund.
3. Expenses. FAS shall be responsible for expenses incurred in
providing office space, equipment, and personnel as may be necessary or
convenient to provide the Administrative Services to the Fund, including
the compensation of FAS employees who serve as Trustees or Officers of the
Fund. The Fund shall be responsible for all other expenses incurred by FAS
on behalf of the Fund, including without limitation postage and courier
expenses, printing expenses, travel expenses, registration fees, filing
fees, fees of outside counsel and independent auditors, insurance premiums,
fees payable to trustees who are not FAS employees, and trade association
dues.
4. Compensation. For the Administrative Services provided, the Fund
hereby agrees to pay and FAS hereby agrees to accept as full compensation
for its services rendered hereunder an administrative fee at an annual rate
per portfolio of the Fund's shares, payable daily, as specified below:
Maximum Administrative Average Daily Net Assets
Fee of the Portfolios
.15% on the first $250 million
.125% on the next $250 million
.100% on the next $250 million
.075% on assets in excess of
$750 million
However, in no event shall the administrative fee received during any
year of this contract be less than, or be paid at a rate less than would
aggregate, $120,000,per portfolio and $25,000 for any class of shares added to
any portfolio after the date of this Agreement.
5. Responsibility of Administrator.
(a) FAS shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Fund 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, director, partner, employee
or agent of FAS, who may be or become an officer, trustee,
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, director, partner,
employee or agent or one under the control or direction of FAS
even though paid by FAS.
(b) FAS shall be kept indemnified by the Fund and be without
liability for any action taken or thing done by it in performing
the Administrative Services in accordance with the above
standards. In order that the indemnification provisions
contained in this Section 5 shall apply, however, it is
understood that if in any case the Fund may be asked to
indemnify or save FAS harmless, the Fund shall be fully and
promptly advised of all pertinent facts concerning the situation
in questions, and it is further understood that FAS will use all
reasonable care to identify and notify the Fund promptly
concerning any situation which presents or appears likely to
present the probability of such a claim for indemnification
against the Fund. The Fund shall have the option to defend FAS
against any claim which may be the subject of this
indemnification. In the event that the Fund so elects it will so
notify FAS and thereupon the Fund shall take over complete
defense of the claim, and FAS shall in such situation initiate
no further legal or other expenses for which it shall seek
indemnification under this Section. FAS shall in no case
confess any claim or make any compromise in any case in which
the Fund will be asked to indemnify FAS except with the Fund's
written consent.
6. Duration and Termination.
(a) The initial term of this Agreement shall commence on the
date hereof, and extend for a period of five years following the
first date upon upon which each of the Fund's Existing
Portfolios has sufficient average daily net assets, in each
case, such that FAS will begin to earn a sum not less than its
minimum ("annualized") administrative fee per Existing
Portfolio, pursuant to Section 4(a) of this Agreement ("Initial
Term").
(b) During any term of this Agreement, each time the Fund adds
a New Portfolio, an additional term shall commence on the first
date upon which the New Portfolio has sufficient average daily
net asset such that FAS will begin to earn a sum not less than
its minimum ("annualized") administrative fee in connection
with the New Portfolio pursuant to Section 4(b) of this
Agreement ("Additional Term"). Such Additional Term shall
extend to the later to occur of (i) the third anniversary of
the commence of the additional Term or (ii) the expiration of
the Initial Term.
(c) During any term of this Agreement, each time the Fund
adds a class of shares to any portfolio, an additional term
shall commence on the later to occur of (i) the first date upon
which the relevant portfolio has sufficient average daily net
assets such that FAS will begin to earn a sum not less than its
minimum ("annualized") administrative fee (in the case of an
existing to later registration statement or post effective
amendment registering the date class ("Class Term"). Such
Class Term shall extend to the later or occur of (i) the third
anniversary of the commencement of the Class Term, or (ii) the
expiration of the Initial Term.
(d) Upon the expiration of any term, this Agreement shall
be automatically renewed each year for an additional term of
one year, unless notice termination has been delivered by
either party to the other no less than one year before the
beginning of any such additional term.
7. Amendment. 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. Limitations of Liability of Trustees, Officers, Employees, Agents
and Shareholders of the Fund. FAS is expressly put on notice of the
limitation of liability as set forth in the Declaration of Trust 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. Limitations of Liability of Trustees and Shareholders of FAS. 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 the Trust as provided in the Declaration of
Trust.
10. Notices. Notices of any kind to be given in writing (including
facsimile communication) and shall be duly given if delivered to the Fund
and to its investment adviser at the following address: Union Planters
Naitonal Bank, P.O. Box 387, Memphis, TN 38101, Attention: Executive Vice
President, Trust Group. Notices of any kind to be given to FAS hereunder
by the Fund shall be in writing and shall be duly given if delivered to FAS
at Federated Investors Tower, Pittsburgh, PA 15222-3779, Attention:
President.
11. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. 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 Section
5, 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. Counterparts. 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.
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.
The Planters Funds
By:/s/ John W. McGonigle
Title: Vice President
Attest: /s/ David M. Taylor
Secretary
Federated Administrative Services
By:/s/ James J. Dolan
Title: President
Attest: /s/ John W. McGonigle
Secretary
Exhibit 8 under Form N-1A
Exhibit 10 under Item 601/Reg
S-K
CUSTODIAN CONTRACT
Between
THE PLANTERS FUNDS
and
STATE STREET BANK AND TRUST COMPANY
TABLE OF CONTENTS
Page
1. Employment of Custodian and Property to be Held by It............ 1
2. Duties of the Custodian With Respect to Property
of the Funds Held by the Custodian............................... 1
2.1 Holding Securities........................................ 1
2.2 Delivery of Securities.................................... 2
2.3 Registration of Securities................................ 4
2.4 Bank Accounts............................................. 4
2.5 Payments for Shares....................................... 4
2.6 Availability of Federal Funds............................. 4
2.7 Collection of Income...................................... 5
2.8 Payment of Fund Moneys.................................... 5
2.9 Liability for Payment in Advance of
Receipt of Securities Purchased........................... 6
2.10 Payments for Repurchases or Redemptions
of Shares of a Fund....................................... 6
2.11 Appointment of Agents..................................... 6
2.12 Deposit of Fund Assets in Securities System............... 7
2.13 Segregated Account........................................ 8
2.14 Joint Repurchase Agreements............................... 8
2.15 Ownership Certificates for Tax Purposes................... 8
2.16 Proxies................................................... 9
2.17 Communications Relating to Fund Portfolio Securities...... 9
2.18 Proper Instructions....................................... 9
2.19 Actions Permitted Without Express Authority............... 9
2.20 Evidence of Authority.....................................10
2.21 Reserved..................................................10
3. Duties of Custodian With Respect to the Books of Account and
Calculation of Net Asset Value and Net Income....................10
4. Records..........................................................10
5. Opinion of Funds' Independent Auditors...........................11
6. Reports to Trust by Independent Auditors.........................11
7. Compensation of Custodian........................................11
8. Responsibility of Custodian......................................11
9. Effective Period, Termination and Amendment......................13
10. Successor Custodian..............................................13
11. Interpretive and Additional Provisions...........................14
12. Massachusetts Law to Apply.......................................14
13. Notices..........................................................14
14. Counterparts.....................................................14
15. Limitations of Liability.........................................15
CUSTODIAN CONTRACT
This Contract between THE PLANTERS FUNDS, (the "Trust"), a
Massachusetts business trust, on behalf of the portfolios (hereinafter
collectively called the "Funds" and individually referred to as a "Fund")
of the Trust, organized and existing under the laws of the Commonwealth of
Massachusetts, having its principal place of business at Federated
Investors Tower, Pittsburgh, Pennsylvania, 15222-3779, and STATE STREET
BANK AND TRUST COMPANY, a Massachusetts trust company, having its
principal place of business at 225 Franklin Street, Boston, Massachusetts,
02110, hereinafter called the "Custodian",
WITNESSETH: That in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
The Trust hereby employs the Custodian as the custodian of the assets
of each of the Funds of the Trust. Except as otherwise expressly provided
herein, the securities and other assets of each of the Funds shall be
segregated from the assets of each of the other Funds and from all other
persons and entities. The Trust will deliver to the Custodian all
securities and cash owned by the Funds and all payments of income,
payments of principal or capital distributions received by them with
respect to all securities owned by the Funds from time to time, and the
cash consideration received by them for shares ("Shares") of beneficial
interest of the Funds as may be issued or sold from time to time. The
Custodian shall not be responsible for any property of the Funds held or
received by the Funds and not delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Section
2.18), the Custodian shall from time to time employ one or more
sub-custodians upon the terms specified in the Proper Instructions,
provided that the Custodian shall have no more or less responsibility or
liability to the Trust or any of the Funds on account of any actions or
omissions of any sub-custodian so employed than any such sub-custodian has
to the Custodian.
2. Duties of the Custodian With Respect to Property of the Funds Held
by the Custodian
2.1 Holding Securities. The Custodian shall hold and physically
segregate for the account of each Fund all non-cash property,
including all securities owned by each Fund, other than securities
which are maintained pursuant to Section 2.12 in a clearing agency
which acts as a securities depository or in a book-entry system
authorized by the U.S. Department of the Treasury, collectively
referred to herein as "Securities System", or securities which are
subject to a joint repurchase agreement with affiliated funds
pursuant to Section 2.14. The Custodian shall maintain records of
all receipts, deliveries and locations of such securities, together
with a current inventory thereof, and shall conduct periodic physical
inspections of certificates representing stocks, bonds and other
securities held by it under this Contract in such manner as the
Custodian shall determine from time to time to be advisable in order
to verify the accuracy of such inventory. With respect to securities
held by any agent appointed pursuant to Section 2.11 hereof, and with
respect to securities held by any sub-custodian appointed pursuant to
Section 1 hereof, the Custodian may rely upon certificates from such
agent as to the holdings of such agent and from such sub-custodian as
to the holdings of such sub-custodian, it being understood that such
reliance
in no way relieves the Custodian of its responsibilities under this
Contract. The Custodian will promptly report to the Trust the
results of such inspections, indicating any shortages or
discrepancies uncovered thereby, and take appropriate action to
remedy any such shortages or discrepancies.
2.2 Delivery of Securities. The Custodian shall release and deliver
securities owned by a Fund held by the Custodian or in a Securities
System account of the Custodian only upon receipt of Proper
Instructions, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
(1) Upon sale of such securities for the account of a Fund and
receipt of payment therefor;
(2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Trust;
(3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.12 hereof;
(4) To the depository agent in connection with tender or other
similar offers for portfolio securities of a Fund, in accordance
with the provisions of Section 2.17 hereof;
(5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable; provided
that, in any such case, the cash or other consideration is to be
delivered to the Custodian;
(6) To the issuer thereof, or its agent, for transfer into the name
of a Fund or into the name of any nominee or nominees of the
Custodian or into the name or nominee name of any agent
appointed pursuant to Section 2.11 or into the name or nominee
name of any sub-custodian appointed pursuant to Section 1; or
for exchange for a different number of bonds, certificates or
other evidence representing the same aggregate face amount or
number of units; provided that, in any such case, the new
securities are to be delivered to the Custodian;
(7) Upon the sale of such securities for the account of a Fund, to
the broker or its clearing agent, against a receipt, for
examination in accordance with "street delivery custom";
provided that in any such case, the Custodian shall have no
responsibility or liability for any loss arising from the
delivery of such securities prior to receiving payment for such
securities except as may arise from the Custodian's own failure
to act in accordance with the standard of reasonable care or any
higher standard of care imposed upon the Custodian by any
applicable law or regulation if such above-stated standard of
reasonable care were not part of this Contract;
(8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment
of the securities of the issuer of such securities, or pursuant
to provisions for conversion contained in such securities, or
pursuant to any deposit agreement; provided that, in any such
case, the new securities and cash, if any, are to be delivered
to the Custodian;
(9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities; provided that,
in any such case, the new securities and cash, if any, are to be
delivered to the Custodian;
(10) For delivery in connection with any loans of portfolio
securities of a Fund, but only against receipt of adequate
collateral in the form of (a) cash, in an amount specified by
the Trust, (b) certificated securities of a description
specified by the Trust, registered in the name of the Fund or in
the name of a nominee of the Custodian referred to in Section
2.3 hereof or in proper form for transfer, or (c) securities of
a description specified by the Trust, transferred through a
Securities System in accordance with Section 2.12 hereof;
(11) For delivery as security in connection with any borrowings
requiring a pledge of assets by a Fund, but only against receipt
of amounts borrowed, except that in cases where additional
collateral is required to secure a borrowing already made,
further securities may be released for the purpose;
(12) For delivery in accordance with the provisions of any agreement
among the Trust or a Fund, the Custodian and a broker-dealer
registered under the Securities Exchange Act of 1934, as
amended, (the "Exchange Act") and a member of The National
Association of Securities Dealers, Inc. ("NASD"), relating to
compliance with the rules of The Options Clearing Corporation
and of any registered national securities exchange, or of any
similar organization or organizations, regarding escrow or other
arrangements in connection with transactions for a Fund;
(13) For delivery in accordance with the provisions of any agreement
among the Trust or a Fund, the Custodian, and a Futures
Commission Merchant registered under the Commodity Exchange Act,
relating to compliance with the rules of the Commodity Futures
Trading Commission and/or any Contract Market, or any similar
organization or organizations, regarding account deposits in
connection with transaction for a Fund;
(14) Upon receipt of instructions from the transfer agent ("Transfer
Agent") for a Fund, for delivery to such Transfer Agent or to
the holders of shares in connection with distributions in kind,
in satisfaction of requests by holders of Shares for repurchase
or redemption; and
(15) For any other proper corporate purpose, but only upon receipt
of, in addition to Proper Instructions, a certified copy of a
resolution of the Executive Committee of the Trust on behalf of
a Fund signed by an officer of the Trust and certified by its
Secretary or an Assistant Secretary, specifying the securities
to be delivered, setting forth the purpose for which such
delivery is to be made, declaring such purpose to be a proper
corporate purpose, and naming the person or persons to whom
delivery of such securities shall be made.
2.3 Registration of Securities. Securities held by the Custodian (other
than bearer securities) shall be registered in the name of a
particular Fund or in the name of any nominee of the Fund or of any
nominee of the Custodian which nominee shall be assigned exclusively
to the Fund, unless the Trust has authorized in writing the
appointment of a nominee to be used in common with other registered
investment companies affiliated with the Fund, or in the name or
nominee name of any agent appointed pursuant to Section 2.11 or in
the name or nominee name of any sub-custodian appointed pursuant to
Section 1. All securities accepted by the Custodian on behalf of a
Fund under the terms of this Contract shall be in "street name" or
other good delivery form.
2.4 Bank Accounts. The Custodian shall open and maintain a separate bank
account or accounts in the name of each Fund, subject only to draft
or order by the Custodian acting pursuant to the terms of this
Contract, and shall hold in such account or accounts, subject to the
provisions hereof, all cash received by it from or for the account of
each Fund, other than cash maintained in a joint repurchase account
with other affiliated funds pursuant to Section 2.14 of this Contract
or by a particular Fund in a bank account established and used in
accordance with Rule 17f-3 under the Investment Company Act of 1940,
as amended, (the "1940 Act"). Funds held by the Custodian for a Fund
may be deposited by it to its credit as Custodian in the Banking
Department of the Custodian or in such other banks or trust companies
as it may in its discretion deem necessary or desirable; provided,
however, that every such bank or trust company shall be qualified to
act as a custodian under the 1940 Act and that each such bank or
trust company and the funds to be deposited with each such bank or
trust company shall be approved by vote of a majority of the Board of
Trustees ("Board") of the Trust. Such funds shall be deposited by
the Custodian in its capacity as Custodian for the Fund and shall be
withdrawable by the Custodian only in that capacity. If requested by
the Trust, the Custodian shall furnish the Trust, not later than
twenty (20) days after the last business day of each month, an
internal reconciliation of the closing balance as of that day in all
accounts described in this section to the balance shown on the daily
cash report for that day rendered to the Trust.
2.5 Payments for Shares. The Custodian shall make such arrangements
with the Transfer Agent of each Fund, as will enable the Custodian to
receive the cash consideration due to each Fund and will deposit into
each Fund's account such payments as are received from the Transfer
Agent. The Custodian will provide timely notification to the Trust
and the Transfer Agent of any receipt by it of payments for Shares of
the respective Fund.
2.6 Availability of Federal Funds. Upon mutual agreement between the
Trust and the Custodian, the Custodian shall make federal funds
available to the Funds as of specified times agreed upon from time to
time by the Trust and the Custodian in the amount of checks, clearing
house funds, and other non-federal funds received in payment for
Shares of the Funds which are deposited into the Funds' accounts.
2.7 Collection of Income.
(1) The Custodian shall collect on a timely basis all income and
other payments with respect to registered securities held
hereunder to which each Fund shall be entitled either by law or
pursuant to custom in the securities business, and shall collect
on a timely basis all income and other payments with respect to
bearer securities if, on the date of payment by the issuer, such
securities are held by the Custodian or its agent thereof and
shall credit such income, as collected, to each Fund's custodian
account. Without limiting the generality of the foregoing, the
Custodian shall detach and present for payment all coupons and
other income items requiring presentation as and when they
become due and shall collect interest when due on securities
held hereunder. The collection of income due the Funds on
securities loaned pursuant to the provisions of Section 2.2 (10)
shall be the responsibility of the Trust. The Custodian will
have no duty or responsibility in connection therewith, other
than to provide the Trust with such information or data as may
be necessary to assist the Trust in arranging for the timely
delivery to the Custodian of the income to which each Fund is
properly entitled.
(2) The Custodian shall promptly notify the Trust whenever income
due on securities is not collected in due course and will
provide the Trust with monthly reports of the status of past due
income unless the parties otherwise agree.
2.8 Payment of Fund Moneys. Upon receipt of Proper Instructions, which
may be continuing instructions when deemed appropriate by the
parties, the Custodian shall pay out moneys of each Fund in the
following cases only:
(1) Upon the purchase of securities, futures contracts or options
on futures contracts for the account of a Fund but only (a)
against the delivery of such securities, or evidence of title to
futures contracts, to the Custodian (or any bank, banking firm
or trust company doing business in the United States or abroad
which is qualified under the 1940 Act to act as a custodian and
has been designated by the Custodian as its agent for this
purpose) registered in the name of the Fund or in the name of a
nominee of the Custodian referred to in Section 2.3 hereof or in
proper form for transfer, (b) in the case of a purchase effected
through a Securities System, in accordance with the conditions
set forth in Section 2.12 hereof or (c) in the case of
repurchase agreements entered into between the Trust and any
other party, (i) against delivery of the securities either in
certificate form or through an entry crediting the Custodian's
account at the Federal Reserve Bank with such securities or (ii)
against delivery of the receipt evidencing purchase for the
account of the Fund of securities owned by the Custodian along
with written evidence of the agreement by the Custodian to
repurchase such securities from the Fund;
(2) In connection with conversion, exchange or surrender of
securities owned by a Fund as set forth in Section 2.2 hereof;
(3) For the redemption or repurchase of Shares of a Fund issued by
the Trust as set forth in Section 2.10 hereof;
(4) For the payment of any expense or liability incurred by a Fund,
including but not limited to the following payments for the
account of the Fund: interest; taxes; management, accounting,
transfer agent and legal fees; and operating expenses of the
Fund, whether or not such expenses are to be in whole or part
capitalized or treated as deferred expenses;
(5) For the payment of any dividends on Shares of a Fund declared
pursuant to the governing documents of the Trust;
(6) For payment of the amount of dividends received in respect of
securities sold short;
(7) For any other proper purpose, but only upon receipt of, in
addition to Proper Instructions, a certified copy of a
resolution of the Executive Committee of the Trust on behalf of
a Fund signed by an officer of the Trust and certified by its
Secretary or an Assistant Secretary, specifying the amount of
such payment, setting forth the purpose for which such payment
is to be made, declaring such purpose to be a proper purpose,
and naming the person or persons to whom such payment is to be
made.
2.9 Liability for Payment in Advance of Receipt of Securities Purchased.
In any and every case where payment for purchase of securities for
the account of a Fund is made by the Custodian in advance of receipt
of the securities purchased, in the absence of specific written
instructions from the Trust to so pay in advance, the Custodian shall
be absolutely liable to the Fund for such securities to the same
extent as if the securities had been received by the Custodian.
2.10 Payments for Repurchases or Redemptions of Shares of a Fund. From
such funds as may be available for the purpose of repurchasing or
redeeming Shares of a Fund, but subject to the limitations of the
Declaration of Trust and any applicable votes of the Board of the
Trust pursuant thereto, the Custodian shall, upon receipt of
instructions from the Transfer Agent, make funds available for
payment to holders of shares of such Fund who have delivered to the
Transfer Agent a request for redemption or repurchase of their shares
including without limitation through bank drafts, automated
clearinghouse facilities, or by other means. In connection with the
redemption or repurchase of Shares of the Funds, the Custodian is
authorized upon receipt of instructions from the Transfer Agent to
wire funds to or through a commercial bank designated by the
redeeming shareholders.
2.11 Appointment of Agents. The Custodian may at any time or times
in its discretion appoint (and may at any time remove) any other bank
or trust company which is itself qualified under the 1940 Act and any
applicable state law or regulation, to act as a custodian, as its
agent to carry out such of the provisions of this Section 2 as the
Custodian may from time to time direct; provided, however, that the
appointment of any agent shall not relieve the Custodian of its
responsibilities or liabilities hereunder.
2.12 Deposit of Fund Assets in Securities System. The Custodian may
deposit and/or maintain securities owned by the Funds in a clearing
agency registered with the Securities and Exchange Commission ("SEC")
under Section 17A of the Exchange Act, which acts as a securities
depository, or in the book-entry system authorized by the U.S.
Department of the Treasury and certain federal agencies, collectively
referred to herein as "Securities System" in accordance with
applicable Federal Reserve Board and SEC rules and regulations, if
any, and subject to the following provisions:
(1) The Custodian may keep securities of each Fund in a Securities
System provided that such securities are represented in an
account ("Account") of the Custodian in the Securities System
which shall not include any assets of the Custodian other than
assets held as a fiduciary, custodian or otherwise for
customers;
(2) The records of the Custodian with respect to securities of the
Funds which are maintained in a Securities System shall identify
by book-entry those securities belonging to each Fund;
(3) The Custodian shall pay for securities purchased for the
account of each Fund upon (i) receipt of advice from the
Securities System that such securities have been transferred to
the Account, and (ii) the making of an entry on the records of
the Custodian to reflect such payment and transfer for the
account of the Fund. The Custodian shall transfer securities
sold for the account of a Fund upon (i) receipt of advice from
the Securities System that payment for such securities has been
transferred to the Account, and (ii) the making of an entry on
the records of the Custodian to reflect such transfer and
payment for the account of the Fund. Copies of all advices from
the Securities System of transfers of securities for the account
of a Fund shall identify the Fund, be maintained for the Fund by
the Custodian and be provided to the Trust at its request. Upon
request, the Custodian shall furnish the Trust confirmation of
each transfer to or from the account of a Fund in the form of a
written advice or notice and shall furnish to the Trust copies
of daily transaction sheets reflecting each day's transactions
in the Securities System for the account of a Fund.
(4) The Custodian shall provide the Trust with any report obtained
by the Custodian on the Securities System's accounting system,
internal accounting control and procedures for safeguarding
securities deposited in the Securities System;
(5) The Custodian shall have received the initial certificate,
required by Section 9 hereof;
(6) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Trust for any loss or damage to
a Fund resulting from use of the Securities System by reason of
any negligence, misfeasance or misconduct of the Custodian or
any of its agents or of any of its or their employees or from
failure of the Custodian or any such agent to enforce
effectively such rights as it may have against the Securities
System; at the election of the Trust, it shall be entitled to be
subrogated to the rights of the Custodian with respect to any
claim against the Securities System or any other person which
the Custodian may have as a consequence of any such loss or
damage if and to the extent that a Fund has not been made whole
for any such loss or damage.
(7) The authorization contained in this Section 2.12 shall not
relieve the Custodian from using reasonable care and diligence
in making use of any Securities System.
2.13 Segregated Account. The Custodian shall upon receipt of Proper
Instructions establish and maintain a segregated account or accounts
for and on behalf of each Fund, into which account or accounts may be
transferred cash and/or securities, including securities maintained
in an account by the Custodian pursuant to Section 2.12 hereof, (i)
in accordance with the provisions of any agreement among the Trust,
the Custodian and a broker-dealer registered under the Exchange Act
and a member of the NASD (or any futures commission merchant
registered under the Commodity Exchange Act), relating to compliance
with the rules of The Options Clearing Corporation and of any
registered national securities exchange (or the Commodity Futures
Trading Commission or any registered contract market), or of any
similar organization or organizations, regarding escrow or other
arrangements in connection with transactions for a Fund, (ii) for
purpose of segregating cash or government securities in connection
with options purchased, sold or written for a Fund or commodity
futures contracts or options thereon purchased or sold for a Fund,
(iii) for the purpose of compliance by the Trust or a Fund with the
procedures required by any release or releases of the SEC relating to
the maintenance of segregated accounts by registered investment
companies and (iv) for other proper corporate purposes, but only, in
the case of clause (iv), upon receipt of, in addition to Proper
Instructions, a certified copy of a resolution of the Board or of the
Executive Committee signed by an officer of the Trust and certified
by the Secretary or an Assistant Secretary, setting forth the purpose
or purposes of such segregated account and declaring such purposes to
be proper corporate purposes.
2.14 Joint Repurchase Agreements. Upon the receipt of Proper
Instructions, the Custodian shall deposit and/or maintain any assets
of a Fund and any affiliated funds which are subject to joint
repurchase transactions in an account established solely for such
transactions for the Fund and its affiliated funds. For purposes of
this Section 2.14, "affiliated funds" shall include all investment
companies and their portfolios for which subsidiaries or affiliates
of Federated Investors serve as investment advisers, distributors or
administrators in accordance with applicable exemptive orders from
the SEC. The requirements of segregation set forth in Section 2.1
shall be deemed to be waived with respect to such assets.
2.15 Ownership Certificates for Tax Purposes. The Custodian shall
execute ownership and other certificates and affidavits for all
federal and state tax purposes in connection with receipt of income
or other payments with respect to securities of a Fund held by it and
in connection with transfers of securities.
2.16 Proxies. The Custodian shall, with respect to the securities
held hereunder, cause to be promptly executed by the registered
holder of such securities, if the securities are registered otherwise
than in the name of a Fund or a nominee of a Fund, all proxies,
without indication of the manner in which such proxies are to be
voted, and shall promptly deliver to the Trust such proxies, all
proxy soliciting materials and all notices relating to such
securities.
2.17 Communications Relating to Fund Portfolio Securities. The
Custodian shall transmit promptly to the Trust all written
information (including, without limitation, pendency of calls and
maturities of securities and expirations of rights in connection
therewith and notices of exercise of call and put options written by
the Fund and the maturity of futures contracts purchased or sold by
the Fund) received by the Custodian from issuers of the securities
being held for the Fund. With respect to tender or exchange offers,
the Custodian shall transmit promptly to the Trust all written
information received by the Custodian from issuers of the securities
whose tender or exchange is sought and from the party (or his agents)
making the tender or exchange offer. If the Trust desires to take
action with respect to any tender offer, exchange offer or any other
similar transaction, the Trust shall notify the Custodian in writing
at least three business days prior to the date on which the Custodian
is to take such action. However, the Custodian shall nevertheless
exercise its best efforts to take such action in the event that
notification is received three business days or less prior to the
date on which action is required.
2.18 Proper Instructions. Proper Instructions as used throughout this
Section 2 means a writing signed or initialed by one or more person
or persons as the Board shall have from time to time authorized.
Each such writing shall set forth the specific transaction or type of
transaction involved. Oral instructions will be considered Proper
Instructions if the Custodian reasonably believes them to have been
given by a person previously authorized in Proper Instructions to
give such instructions with respect to the transaction involved. The
Trust shall cause all oral instructions to be confirmed in writing.
Upon receipt of a certificate of the Secretary or an Assistant
Secretary as to the authorization by the Board of the Trust
accompanied by a detailed description of procedures approved by the
Board, Proper Instructions may include communications effected
directly between electro-mechanical or electronic devices provided
that the Board and the Custodian are satisfied that such procedures
afford adequate safeguards for a Fund's assets.
2.19 Actions Permitted Without Express Authority. The Custodian may
in its discretion, without express authority from the Trust:
(1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under
this Contract, provided that all such payments shall be
accounted for to the Trust in such form that it may be allocated
to the affected Fund;
(2) surrender securities in temporary form for securities in
definitive form;
(3) endorse for collection, in the name of a Fund, checks, drafts
and other negotiable instruments; and
(4) in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with the securities and property of
each Fund except as otherwise directed by the Trust.
2.20 Evidence of Authority. The Custodian shall be protected in acting
upon any instructions, notice, request, consent, certificate or other
instrument or paper reasonably believed by it to be genuine and to
have been properly executed on behalf of a Fund. The Custodian may
receive and accept a certified copy of a vote of the Board of the
Trust as conclusive evidence (a) of the authority of any person to
act in accordance with such vote or (b) of any determination of or
any action by the Board pursuant to the Declaration of Trust as
described in such vote, and such vote may be considered as in full
force and effect until receipt by the Custodian of written notice to
the contrary.
2.21 Reserved.
3. Duties of Custodian With Respect to the Books of Account and
Calculation of Net Asset Value and Net Income.
The Custodian shall cooperate with and supply necessary information
to the entity or entities appointed by the Board of the Trust to keep the
books of account of each Fund and/or compute the net asset value per share
of the outstanding Shares of each Fund or, if directed in writing to do so
by the Trust, shall itself keep such books of account and/or compute such
net asset value per share. If so directed, the Custodian shall also
calculate daily the net income of a Fund as described in the Fund's
currently effective prospectus and Statement of Additional Information
("Prospectus") and shall advise the Trust and the Transfer Agent daily of
the total amounts of such net income and, if instructed in writing by an
officer of the Trust to do so, shall advise the Transfer Agent
periodically of the division of such net income among its various
components. The calculations of the net asset value per share and the
daily income of a Fund shall be made at the time or times described from
time to time in the Fund's currently effective Prospectus.
4. Records.
The Custodian shall create and maintain all records relating to its
activities and obligations under this Contract in such manner as will meet
the obligations of the Trust and the Funds under the 1940 Act, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2
thereunder, and specifically including identified cost records used for
tax purposes. All such records shall be the property of the Trust and
shall at all times during the regular business hours of the Custodian be
open for inspection by duly authorized officers, employees or agents of
the Trust and employees and agents of the SEC. In the event of
termination of this Contract, the Custodian will deliver all such records
to the Trust, to a successor Custodian, or to such other person as the
Trust may direct. The Custodian shall supply daily to the Trust a
tabulation of securities owned by a Fund and held by the Custodian and
shall, when requested to do so by the Trust and for such compensation as
shall be agreed upon between the Trust and the Custodian, include
certificate numbers in such tabulations.
5. Opinion of Funds' Independent Auditors.
The Custodian shall take all reasonable action, as the Trust may from
time to time request, to obtain from year to year favorable opinions from
each Fund's independent auditors with respect to its activities hereunder
in connection with the preparation of the Fund's registration statement,
periodic reports, or any other reports to the SEC and with respect to any
other requirements of such Commission.
6. Reports to Trust by Independent Auditors.
The Custodian shall provide the Trust, at such times as the Trust may
reasonably require, with reports by independent auditors for each Fund on
the accounting system, internal accounting control and procedures for
safeguarding securities, futures contracts and options on futures
contracts, including securities deposited and/or maintained in a
Securities System, relating to the services provided by the Custodian for
the Fund under this Contract; such reports shall be of sufficient scope
and in sufficient detail, as may reasonably be required by the Trust, to
provide reasonable assurance that any material inadequacies would be
disclosed by such examination and, if there are no such inadequacies, the
reports shall so state.
7. Compensation of Custodian.
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time
between the Trust and the Custodian.
8. Responsibility of Custodian.
The Custodian shall be held to a standard of reasonable care in
carrying out the provisions of this Contract; provided, however, that the
Custodian shall be held to any higher standard of care which would be
imposed upon the Custodian by any applicable law or regulation if such
above stated standard of reasonable care was not part of this Contract.
The Custodian shall be entitled to rely on and may act upon advice of
counsel (who may be counsel for the Trust) on all matters, and shall be
without liability for any action reasonably taken or omitted pursuant to
such advice, provided that such action is not in violation of applicable
federal or state laws or regulations, and is in good faith and without
negligence. Subject to the limitations set forth in Section 15 hereof,
the Custodian shall be kept indemnified by the Trust but only from the
assets of the Fund involved in the issue at hand and be without liability
for any action taken or thing done by it in carrying out the terms and
provisions of this Contract in accordance with the above standards.
In order that the indemnification provisions contained in this
Section 8 shall apply, however, it is understood that if in any case the
Trust may be asked to indemnify or save the Custodian harmless, the Trust
shall be fully and promptly advised of all pertinent facts concerning the
situation in question, and it is further understood that the Custodian
will use all reasonable care to identify and notify the Trust promptly
concerning any situation which presents or appears likely to present the
probability of such a claim for indemnification. The Trust shall have the
option to defend the Custodian against any claim which may be the subject
of this indemnification, and in the event that the Trust so elects it will
so notify the Custodian and thereupon the Trust shall take over complete
defense of the claim, and the Custodian shall in such situation initiate
no further legal or other expenses for which it shall seek indemnification
under this Section. The Custodian shall in no case confess any claim or
make any compromise in any case in which the Trust will be asked to
indemnify the Custodian except with the Trust's prior written consent.
Notwithstanding the foregoing, the responsibility of the Custodian
with respect to redemptions effected by check shall be in accordance with
a separate Agreement entered into between the Custodian and the Trust.
If the Trust requires the Custodian to take any action with respect
to securities, which action involves the payment of money or which action
may, in the reasonable opinion of the Custodian, result in the Custodian
or its nominee assigned to a Fund being liable for the payment of money or
incurring liability of some other form, the Custodian may request the
Trust, as a prerequisite to requiring the Custodian to take such action,
to provide indemnity to the Custodian in an amount and form satisfactory
to the Custodian.
Subject to the limitations set forth in Section 15 hereof, the Trust
agrees to indemnify and hold harmless the Custodian and its nominee from
and against all taxes, charges, expenses, assessments, claims and
liabilities (including counsel fees) (referred to herein as authorized
charges) incurred or assessed against it or its nominee in connection with
the performance of this Contract, except such as may arise from it or its
nominee's own failure to act in accordance with the standard of reasonable
care or any higher standard of care which would be imposed upon the
Custodian by any applicable law or regulation if such above-stated
standard of reasonable care were not part of this Contract. To secure any
authorized charges and any advances of cash or securities made by the
Custodian to or for the benefit of a Fund for any purpose which results in
the Fund incurring an overdraft at the end of any business day or for
extraordinary or emergency purposes during any business day, the Trust
hereby grants to the Custodian a security interest in and pledges to the
Custodian securities held for the Fund by the Custodian, in an amount not
to exceed 10 percent of the Fund's gross assets, the specific securities
to be designated in writing from time to time by the Trust or the Fund's
investment adviser. Should the Trust fail to make such designation, or
should it instruct the Custodian to make advances exceeding the percentage
amount set forth above and should the Custodian do so, the Trust hereby
agrees that the Custodian shall have a security interest in all securities
or other property purchased for a Fund with the advances by the Custodian,
which securities or property shall be deemed to be pledged to the
Custodian, and the written instructions of the Trust instructing their
purchase shall be considered the requisite description and designation of
the property so pledged for purposes of the requirements of the Uniform
Commercial Code. Should the Trust fail to cause a Fund to repay promptly
any authorized charges or advances of cash or securities, subject to the
provision of the second paragraph of this Section 8 regarding
indemnification, the Custodian shall be entitled to use available cash and
to dispose of pledged securities and property as is necessary to repay any
such advances.
9. Effective Period, Termination and Amendment.
This Contract shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter
provided, may be amended at any time by mutual agreement of the parties
hereto and may be terminated by either party by an instrument in writing
delivered or mailed, postage prepaid to the other party, such termination
to take effect not sooner than sixty (60) days after the date of such
delivery or mailing; provided, however that the Custodian shall not act
under Section 2.12 hereof in the absence of receipt of an initial
certificate of the Secretary or an Assistant Secretary that the Board of
the Trust has approved the initial use of a particular Securities System
as required in each case by Rule 17f-4 under the 1940 Act; provided
further, however, that the Trust shall not amend or terminate this
Contract in contravention of any applicable federal or state regulations,
or any provision of the Declaration of Trust, and further provided, that
the Trust may at any time by action of its Board (i) substitute another
bank or trust company for the Custodian by giving notice as described
above to the Custodian, or (ii) immediately terminate this Contract in the
event of the appointment of a conservator or receiver for the Custodian by
the Comptroller of the Currency or upon the happening of a like event at
the direction of an appropriate regulatory agency or court of competent
jurisdiction.
Upon termination of the Contract, the Trust shall pay to the
Custodian such compensation as may be due as of the date of such
termination and shall likewise reimburse the Custodian for its costs,
expenses and disbursements.
10. Successor Custodian.
If a successor custodian shall be appointed by the Board of the
Trust, the Custodian shall, upon termination, deliver to such successor
custodian at the office of the Custodian, duly endorsed and in the form
for transfer, all securities then held by it hereunder for each Fund and
shall transfer to separate accounts of the successor custodian all of each
Fund's securities held in a Securities System.
If no such successor custodian shall be appointed, the Custodian
shall, in like manner, upon receipt of a certified copy of a vote of the
Board of the Trust, deliver at the office of the Custodian and transfer
such securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian
or certified copy of a vote of the Board shall have been delivered to the
Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or
trust company, which is a "bank" as defined in the 1940 Act, doing
business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $100,000,000, all securities, funds and
other properties held by the Custodian and all instruments held by the
Custodian relative thereto and all other property held by it under this
Contract for each Fund and to transfer to separate accounts of such
successor custodian all of each Fund's securities held in any Securities
System. Thereafter, such bank or trust company shall be the successor of
the Custodian under this Contract.
In the event that securities, funds and other properties remain in
the possession of the Custodian after the date of termination hereof owing
to
failure of the Trust to procure the certified copy of the vote referred to
or of the Board to appoint a successor custodian, the Custodian shall be
entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other
properties and the provisions of this Contract relating to the duties and
obligations of the Custodian shall remain in full force and effect.
11. Interpretive and Additional Provisions.
In connection with the operation of this Contract, the Custodian and
the Trust may from time to time agree on such provisions interpretive of
or in addition to the provisions of this Contract as may in their joint
opinion be consistent with the general tenor of this Contract. Any such
interpretive or additional provisions shall be in a writing signed by both
parties and shall be annexed hereto, provided that no such interpretive or
additional provisions shall contravene any applicable federal or state
regulations or any provision of the Declaration of Trust. No interpretive
or additional provisions made as provided in the preceding sentence shall
be deemed to be an amendment of this Contract.
12. Massachusetts Law to Apply.
This Contract shall be construed and the provisions thereof
interpreted under and in accordance with laws of The Commonwealth of
Massachusetts.
13. Notices.
Except as otherwise specifically provided herein, Notices and other
writings delivered or mailed postage prepaid to the Trust at Federated
Investors Tower, Pittsburgh, Pennsylvania, 15222-3779, or to the Custodian
at 225 Franklin Street, Boston, Massachusetts, 02110, or to such other
address as the Trust or the Custodian may hereafter specify, shall be
deemed to have been properly delivered or given hereunder to the
respective address.
14. Counterparts.
This Contract may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original.
15. Limitations of Liability.
The Custodian is expressly put on notice of the limitation of
liability as set forth in Article XI of the Declaration of Trust and
agrees that the obligations and liabilities assumed by the Trust and any
Fund pursuant to this Contract, including, without limitation, any
obligation or liability to indemnify the Custodian pursuant to Section 8
hereof, shall be limited in any case to the relevant Fund and its assets
and that the Custodian shall not seek satisfaction of any such obligation
from the shareholders of the relevant Fund, from any other Fund or its
shareholders or from the Trustees, Officers, employees or agents of the
Trust, or any of them. In addition, in connection with the discharge and
satisfaction of any claim made by the Custodian against the Trust, for
whatever reasons, involving more than one Fund, the Trust shall have the
exclusive right to determine the appropriate allocations of liability for
any such claim between or among the Funds.
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and behalf by its duly authorized representative
as of the 1st day June, 1993.
ATTEST: THE PLANTERS FUNDS
/s/ Gail Cagney By /s/ Richard B. Fisher
Assistant Secretary Vice President
ATTEST STATE STREET BANK AND TRUST COMPANY
/s/ Edward J. McKenzie By /s/ Ronald E. Logue
Assistant Secretary Executive Vice President
Exhibit 9 under Form N-1A
Exhibit 10 under Item 601/Reg
S-K
FUND ACCOUNTING
AND
SHAREHOLDER RECORDKEEPING AGREEMENT
AGREEMENT made as of the 1st day of June, 1993, by and between THE
PLANTERS FUNDS, a Massachusetts business trust, having its principal
office and place of business at Federated Investors Tower, Pittsburgh,
PA 15222-3779 (the "Trust"), on behalf of the portfolios (individually
referred to herein as a "Fund" and collectively as "Funds") of the
Trust, and FEDERATED SERVICES COMPANY, a Delaware business trust having
its principal office and place of business at Federated Investors
Tower, Pittsburgh, Pennsylvania 15222-3779 (the "Company").
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended
(the "1940 Act"), with authorized and issued shares of beneficial
interest ("Shares"); and
WHEREAS, the Trust wishes to retain the Company to provide certain
pricing, accounting and recordkeeping services for each of the Funds,
including any classes of shares issued by any Fund ("Classes"), and the
Company is willing to furnish such services; and
WHEREAS, the Trust desires to appoint the Company as its transfer
agent, dividend disbursing agent, and agent in connection with certain
other activities, and the Company desires to accept such appointment;
and
WHEREAS, from time to time the Trust may desire and may instruct the
Company to subcontract for the performance of its duties and
responsibilities hereunder with State Street Bank and Trust Company or
another agent (the "Agent");
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, the parties hereto agree as follows:
SECTION ONE: Fund Accounting.
Article 1. Appointment.
The Trust hereby appoints the Company to provide certain pricing and
accounting services to the Funds for the period and on the terms set
forth in this Agreement. The Company accepts such appointment and
agrees to furnish the services herein set forth in return for the
compensation as provided in Article 3 of this Section.
Article 2. The Company and Duties.
Subject to the supervision and control of the Trust's Board of
Trustees ("Board"), the Company will assist the Trust with regard to
portfolio accounting for the Trust and the Funds, and/or the Classes,
and in connection therewith undertakes to do the following specific
services;
A. Valuing the assets of the Funds and determining the net asset
value per share of the outstanding Shares of the Funds and the Classes,
at the time and in the manner from time to time determined by the Board
of the Trust and as set forth in the prospectus and Statement of
Additional Information ("Prospectus");
B. Calculating the net income of the Funds, if any;
C. Calculating capital gains or losses for the Funds from sale or
disposition of assets, if any;
D. Maintaining the general ledger and other accounts, books and
financial records of the Trust, including for each Fund and Class, as
required under Section 31(a) of the 1940 Act and the Rules thereunder
in connection with the services provided by the Company;
E. Preserving for the periods prescribed by Rule 31a-2 under the 1940
Act the records to be maintained by Rule 31a-1 under said Act in
connection with the services provided by the Company. The Company
further agrees that all such records which it maintains for the Trust
are the property of the Trust and further agrees to surrender promptly
to the Trust such records upon the Trust's request.
F. At the request of the Trust, drafting various reports or other
financial documents required by federal, state and other applicable
laws and regulations; and
G. Such other similar services as may be reasonably requested by the
Trust.
Article 3. Compensation and Allocation of Expenses.
A. The Funds will compensate the Company for its services rendered
pursuant to Section One of this Agreement in accordance with the fees
set forth on Fee Schedule A, annexed hereto and incorporated herein.
Such fees do not include out-of-pocket disbursements of the Company for
which the Company shall be entitled to bill separately. Out-of-pocket
disbursements shall include, but shall not be limited to, the items
specified in Schedule B, annexed hereto and incorporated herein, which
Schedule may be modified by the Company upon not less than thirty days'
prior written notice to the Trust.
B. The Company shall not be required to pay any of the following
expenses incurred by the Trust, the Funds, or the Classes: custodial
expenses; membership dues in the Investment Company Institute or any
similar organization; transfer agency expenses; investment advisory
expenses; costs of printing and mailing stock certificates,
Prospectuses, reports and notices; administrative expenses; interest on
borrowed money; brokerage commissions; taxes and fees payable to
Federal, state and other governmental agencies; fees of Trustees of the
Trust; outside auditing expenses; outside legal expenses; or other
expenses not specified in this Article 3 which may be properly payable
by the Trust.
C. The Company will invoice the Funds as soon as practicable after
the end of each calendar month, and said invoices will be detailed in
accordance with Schedule A and Schedule B. The Trust will promptly pay
to the Company the amount of such invoice.
D. Any compensation agreed to hereunder may be adjusted from time to
time by attaching to Schedule A a revised Schedule A dated and signed
by a duly authorized officer of the Trust and a duly authorized officer
of the Company.
E. The fee for the period from the effective date of application of
this Agreement with respect to a Fund or a Class to the end of the
initial month shall be prorated according to the proportion that such
period bears to the full month period. Upon any termination of this
Agreement before the end of any month, the fee for such period shall be
prorated according to the proportion which such period bears to the
full month period. For purposes of determining fees payable to the
Company, the value of the Fund's net assets shall be computed at the
time and in the manner specified in the Fund's Prospectus.
F. The Company in its sole discretion may from time to time employ or
associate with itself such person or persons as the Company may believe
to be particularly suited to assist it in performing services under
this Agreement. Such person or persons may be officers and employees
who are employed by both the Company and the Trust. The compensation
of such person or persons shall be paid by the Company and no
obligation shall be incurred on behalf of the Trust, the Funds, or the
Classes in such respect.
SECTION TWO: Shareholder Recordkeeping.
Article 4. Terms of Appointment.
Subject to the terms and conditions set forth in this Agreement, the
Trust hereby employs and appoints the Company to act as, and the
Company agrees to act as, transfer agent for each Fund's Shares,
dividend disbursing agent, and agent in connection with any
accumulation, open-account or similar plans provided to the
shareholders of any Fund ("Shareholders"), including without limitation
any periodic investment plan or periodic withdrawal program.
Proper Instructions as used throughout Section Two of this Agreement
means a writing signed or initialed by one or more person or persons as
the Board shall have from time to time authorized. Each such writing
shall set forth the specific transaction or type of transaction
involved. Oral instructions will be considered Proper Instructions if
the Company reasonably believes them to have been given by a person
previously authorized in Proper Instructions to give such instructions
with respect to the transaction involved. The Trust and the Company
shall cause all oral instructions to be confirmed in writing. Proper
Instructions may include communications effected directly between
electro-mechanical or electronic devices provided that the Trust and
the Company are satisfied that such procedures afford adequate
safeguards for a Fund's assets. Proper Instructions may only be
amended in writing.
Article 5. Duties of the Company.
The Company agrees that it will perform the following services in
accordance with Proper Instructions as may be provided from time to
time by the Trust as to any Fund:
A. Purchases
(1) The Company shall receive orders and payment for the purchase
of shares and promptly deliver payment and appropriate
documentation therefore to the safekeeping custodian of the
relevant Fund, (the "Custodian"). The Company shall notify the
Trust and the Custodian on a daily basis of the total amount of
orders and payments so delivered.
(2) Pursuant to purchase orders and in accordance with the Fund's
current Prospectus, the Company shall compute and issue the
appropriate number of shares and hold such shares in the
appropriate Shareholder accounts.
(3) If a Shareholder or its agent requests a certificate, the
Company, as Transfer Agent, shall countersign and mail by first
class mail, a certificate to the Shareholder at his address as set
forth on the transfer books of the Fund, subject to any Proper
Instructions regarding the delivery of certificates.
(4) In the event that any check or other order for the purchase of
Shares of the Fund is returned unpaid for any reason, the Company
shall debit the Share account of the Shareholder by the number of
Shares that had been credited to his account upon receipt of the
check or other order, promptly mail a debit advice to the
Shareholder, and notify the Trust of its action. In the event that
the amount paid for such Shares exceeds proceeds of the redemption
of such Shares plus the amount of any dividends paid with respect
to such Shares, the Company will receive reimbursement of such
excess from the Fund or its distributor.
B. Distribution
(1) Upon notification by the Trust of the declaration of any
distribution to Shareholders, the Company shall act as Dividend
Disbursing Agent for the Fund in accordance with the provisions of
its governing document and the then current Prospectus of the Fund
and as such shall prepare and mail or credit income, capital gain,
or any other payments to Shareholders. As the Dividend Disbursing
Agent, the Company shall, on or before the payment date of any such
distribution, notify the Custodian of the estimated amount required
to pay any portion of said distribution which is payable in cash
and request the Custodian to make available sufficient funds for
the cash amount to be paid out. The Company shall reconcile the
amounts so requested and the amounts actually received with the
Custodian on a daily basis. If a Shareholder is entitled to
receive additional Shares by virtue of any such distribution or
dividend, appropriate credits shall be made to the Shareholder's
account and certificates delivered where requested; and
(2) The Company shall maintain records of account for each Fund
and advise the Trust and its Shareholders as to the foregoing.
C. Redemptions and Transfers
(1) The Company shall receive redemption requests and redemption
directions and, if such redemption requests comply with the
procedures as may be described in the Fund Prospectus or set forth
in Proper Instructions, deliver the appropriate instructions
therefore to the Custodian. The Company shall notify the Trust on
a daily basis of the total amount of redemption requests processed
and monies paid to the Company by the Custodian for redemptions.
(2) At the appropriate time as and when it receives monies paid to
it by the Custodian with respect to any redemption, the Company
shall pay over or cause to be paid over in the appropriate manner
such monies as instructed by the redeeming Shareholders, pursuant
to procedures described in the then current Prospectus of the Fund.
(3) If any such certificate or request for redemption does not
comply with the procedures for redemption approved by the Trust,
the Company shall promptly notify the Shareholder of such fact,
together with the reason therefor, and shall effect such redemption
at the price applicable to the date and time of receipt of
documents complying with said procedures.
(4) The Company shall effect transfers of Shares by the registered
owners thereof.
(5) The Company shall identify and process abandoned accounts and
uncashed checks for state escheat requirements on an annual basis
and report such actions to the Trust.
D. Recordkeeping
(1) The Company shall record the issuance of shares of the Fund
and maintain pursuant to applicable rules of the Securities and
Exchange Commission ("SEC") a record of the total number of shares
of the Fund which are authorized, based upon data provided to it by
the Trust, and issued and outstanding. The Company shall also
provide the Trust on a regular basis or upon reasonable request
with the total number of Shares which are authorized and issued and
outstanding, but shall have no obligation when recording the
issuance of Shares, except as otherwise set forth herein, to
monitor the issuance of such shares or to take cognizance of any
laws relating to the issue or sale of such Shares, which functions
shall be the sole responsibility of the Trust.
(2) The Company shall establish and maintain records pursuant to
applicable rules of the SEC relating to the services to be
performed hereunder in the form and manner as agreed to by the
Trust to include a record for each Shareholder's account of the
following:
(a) Name, address and tax identifying number (and whether such
number has been certified);
(b) Number of Shares held;
(c) Historical information regarding the account, including
dividends paid and date and price for all transactions;
(d) Any stop or restraining order placed against the account;
(e) Information with respect to withholdings in the case of a
foreign account or an account for which withholding is required
by the Internal Revenue Code;
(f) Any dividend reinvestment order, plan application, dividend
address and correspondence relating to the current maintenance
of the account;
(g) Certificate numbers and denominations for any Shareholder
holding certificates;
(h) Any information required in order for the Company to
perform the calculations contemplated or required by this
Agreement.
(3) The Company shall preserve any such records required to be
maintained pursuant to the rules of the SEC for the periods
prescribed in said rules as specifically noted below. Such record
retention shall be at the expense of the Fund, and such records may
be inspected by the Trust at reasonable times. The Company may, at
its option at any time, and shall forthwith upon the Trust's
demand, turn over to the Trust and cease to retain in the Company's
files, records and documents created and maintained by the Company
pursuant to this Agreement, which are no longer needed by the
Company in performance of its services or for its protection. If
not so turned over to the Trust, such records and documents will be
retained by the Company for six years from the year of creation,
during the first two of which such documents will be in readily
accessible form. At the end of the six year period, such records
and documents will either be turned over to the Trust or destroyed
in accordance with Proper Instructions.
E. Confirmations/Reports
(1) The Company shall furnish to the Trust periodically the
following information:
(a) A copy of the transaction register;
(b) Dividend and reinvestment blotters;
(c) The total number of Shares issued and outstanding in each
state for "blue sky" purposes as determined according to Proper
Instructions delivered from time to time by the Trust to the
Company;
(d) Shareholder lists and statistical information;
(e) Payments to third parties relating to distribution
agreement, allocations of sales loads, redemption fees, or other
transaction-or sales-related payments;
(f) Such other information as may be agreed upon from time to
time.
(2) The Company shall prepare in the appropriate form, file with the
Internal Revenue Service and appropriate state agencies, and, if
required, mail to Shareholders, such notices for reporting dividends
and distributions paid as are required to be so filed and mailed and
shall withhold such sums as are required to be withheld under
applicable federal and state income tax laws, rules and regulations.
(3) In addition to and not in lieu of the services set forth above,
the Company shall:
(a) Perform all of the customary services of a transfer agent,
dividend disbursing agent and, as relevant, agent in connection
with accumulation, open-account or similar plans (including
without limitation any periodic investment plan or periodic
withdrawal program), including but not limited to: maintaining
all Shareholder accounts, mailing Shareholder reports and
Prospectuses to current Shareholders, withholding taxes on
accounts subject to back-up or other withholding (including
non-resident alien accounts), preparing and filing reports on
U.S. Treasury Department Form 1099 and other appropriate forms
required with respect to dividends and distributions by federal
authorities for all Shareholders, preparing and mailing
confirmation forms and statements of account to Shareholders for
all purchases and redemptions of Shares and other confirmable
transactions in Shareholder accounts, preparing and mailing
activity statements for Shareholders, and providing Shareholder
account information; and
(b) provide a system which will enable the Trust to monitor the
total number of Shares of each Fund sold in each state ("blue
sky reporting"). The Trust shall by Proper Instructions
(i) identify to the Company those transactions and assets to be
treated as exempt from the blue sky reporting for each state and
(ii) verify the classification of transactions for each state on
the system prior to activation and thereafter monitor the daily
activity for each state. The responsibility of the Company for
each Fund's state blue sky registration status is limited solely
to the recording of the initial classification of transactions
or accounts with regard to blue sky compliance and the reporting
of such transactions and accounts to the Trust as provided
above.
F. Other Duties
(1) The Company shall answer correspondence from Shareholders
relating to their Share accounts and such other correspondence as may
from time to time be addressed to the Company;
(2) The Company shall prepare Shareholder meeting lists, mail proxy
cards and other material supplied to it by the Trust in connection with
Shareholder Meetings of each Fund; receive, examine and tabulate
returned proxies; and certify the vote of the Shareholders;
(3) The Company shall establish and maintain facilities and
procedures for safekeeping of stock certificates, check forms and
facsimile signature imprinting devices, if any; and for the preparation
or use, and for keeping account of, such certificates, forms and
devices.
Article 6. Duties of the Trust.
A. Compliance
The Trust assumes full responsibility for the preparation, contents
and distribution of each Prospectus of the Fund and for complying with
all applicable requirements of the Securities Act of 1933, as amended
(the "1933 Act"), the 1940 Act and any laws, rules and regulations of
government authorities having jurisdiction.
B. Share Certificates
The Trust shall supply the Company with a sufficient supply of blank
Share certificates and from time to time shall renew such supply upon
request of the Company. Such blank Share certificates shall be
properly signed, manually or by facsimile, if authorized by the Trust
and shall bear the seal of the Trust or facsimile thereof; and
notwithstanding the death, resignation or removal of any officer of the
Trust authorized to sign certificates, the Company may continue to
countersign certificates which bear the manual or facsimile signature
of such officer until otherwise directed by the Trust.
C. Distributions
The Trust shall promptly inform the Company of the declaration of any
dividend or distribution on account of any Fund's shares.
Article 7. Fees and Expenses.
A. Annual Fee
For performance by the Company pursuant to Section Two of this
Agreement, the Trust agrees to pay the Company an annual maintenance
fee for each Shareholder account as set out in the fee schedule,
Schedule C, attached hereto. Such fees may be changed from time to
time subject to mutual written agreement between the Trust and the
Company. Pursuant to information in the Trust Prospectus or other
information or instructions from the Trust, the Company may sub-divide
any Fund into Classes or other sub-components for recordkeeping
purposes. The Company will charge the Fund the fees set forth on
Schedule C for each such Class or sub-component the same as if each
were a Fund.
B. Reimbursements
In addition to the fee paid under Article 7A above, the Trust agrees
to reimburse the Company for out-of-pocket expenses or advances
incurred by the Company for the items set out in Schedule D attached
hereto. In addition, any other expenses incurred by the Company at the
request or with the consent of the Trust, will be reimbursed by the
appropriate Fund.
C. Payment
The Company shall issue billing notices with respect to fees and
reimbursable expenses on a timely basis, generally within 15 days
following the end of the month in which the fees and expenses have been
incurred. The Trust agrees to pay all fees and reimbursable expenses
within 30 days following the receipt of the respective billing notices.
Article 8. Assignment of Shareholder Recordkeeping.
Except as provided below, neither this Agreement nor any rights or
obligations hereunder may be assigned by either party without the
written consent of the other party.
(1) This Agreement shall inure to the benefit of and be binding upon
the parties and their respective permitted successors and assigns.
(2) The Company may without further consent on the part of the Trust
subcontract for the performance hereof with (A) Boston Financial Data
Services, Inc., a Massachusetts Trust ("BFDS"), which is duly
registered as a transfer agent pursuant to Section 17A(c)(1) of the
Securities Exchange Act of 1934, as amended, or any succeeding statute
("Section 17A(c)(1)"), or (B) a BFDS subsidiary duly registered as a
transfer agent pursuant to Section 17A(c)(1), or (C) a BFDS affiliate;
provided, however, that the Company shall be as fully responsible to
the Trust for the acts and omissions of any subcontractor as it is for
its own acts and omissions; or
(3) The Company shall upon instruction from the Trust subcontract for
the performance hereof with an Agent, other than BFDS as described in
(2) above, which is duly registered as a transfer agent pursuant to
Section 17A(c)(1) or any succeeding statutes; provided, however, that
the Company shall in no way be responsible to the Trust for the acts
and omissions of the Agent.
SECTION THREE: General Provisions.
Article 9. Documents.
A. In connection with the appointment of the Company under this
Agreement, the Trust shall file with the Company the following
documents:
(1) A copy of the Declaration of Trust and By-Laws of the Trust and
all amendments thereto;
(2) A copy of the resolution of the Board of the Trust authorizing
this Agreement;
(3) Specimens of all forms of outstanding Share certificates of the
Funds in the forms approved by the Board of the Trust with a
certificate of the Secretary of the Trust as to such approval;
(4) All account application forms and other documents relating to
Shareholders accounts; and
(5) A copy of the current Prospectus for each Fund.
B. The Trust will also furnish from time to time the following
documents:
(1) Each resolution of the Board of the Trust authorizing the
original issuance of each Fund's Shares;
(2) Each Registration Statement filed with the SEC and amendments
thereof and orders relating thereto in effect with respect to the sale
of Shares of any Fund;
(3) A certified copy of each amendment to the governing document and
the By-Laws of the Trust;
(4) Certified copies of each vote of the Board authorizing officers
to give Proper Instructions to the Fund Accountant and Shareholder
Recordkeeper;
(5) Specimens of all new Share certificates representing Shares of
any Fund, accompanied by Board resolutions approving such forms;
(6) Such other certificates, documents or opinions which the Company
may, in its discretion, deem necessary or appropriate in the proper
performance of its duties; and
(7) Revisions to the Prospectus of any Fund.
Article 10. Representations and Warranties.
A. Representations and Warranties of the Company
The Company represents and warrants to the Trust that:
(1) It is a business trust duly organized and existing and in good
standing under the laws of the State of Delaware.
(2) It is duly qualified to carry on its business in the State of
Delaware.
(3) It is empowered under applicable laws and by its charter and
by-laws to enter into and perform this Agreement.
(4) All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement.
(5) It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
(6) It is in compliance with federal securities law requirements and
in good standing as a transfer agent.
B. Representations and Warranties of the Trust
The Trust represents and warrants to the Company that:
(1) It is a business trust duly organized and existing and in good
standing under the laws of the Commonwealth of Massachusetts.
(2) It is empowered under applicable laws and by its Declaration of
Trust and By-Laws to enter into and perform this Agreement.
(3) All corporate proceedings required by said Declaration of Trust
and By-Laws have been taken to authorize it to enter into and perform
this Agreement.
(4) The Trust is an open-end investment company registered under the
1940 Act.
(5) A registration statement under the 1933 Act will be effective,
and appropriate state securities law filings have been made and will
continue to be made, with respect to all Shares of each Fund being
offered for sale.
Article 11. Standard of Care/Indemnification.
A. Standard of Care
The Company shall be held to a standard of reasonable care in carrying
out the provisions of this Agreement; provided, however that the
Company shall be held to any higher standard of care which would be
imposed upon the Company by any applicable law or regulation even
though such stated standard of care was not part of this Agreement.
B. Indemnification by Trust
The Company shall not be responsible for and the Trust shall indemnify
and hold the Company harmless against any and all losses, damages,
costs, charges, counsel fees, payments, expenses and liabilities
arising out of or attributable to:
(1) The Trust's refusal or failure to comply with the terms of this
Agreement, or which arise out of the Trust's lack of good faith,
negligence or willful misconduct or which arise out of the breach of
any representation or warranty of the Trust hereunder.
(2) The reliance on or use by the Company or its agents or
subcontractors of information, records and documents in proper form
which
(a) are received by the Company or its agents or subcontractors and
furnished to it by or on behalf of the Trust, its Shareholders or
investors regarding the purchase, redemption or transfer of shares and
Shareholder account information, or
(b) have been prepared and/or maintained by the Trust or its
affiliates or any other person or firm on behalf of the Trust.
(3) The reliance on, or the carrying out by the Company or its agents
or subcontractors of Proper Instructions of the Trust.
(4) The offer or sale of Shares in violation of any requirement under
the federal securities laws or regulations or the securities laws or
regulations of any state that such Shares be registered in such state
or in violation of any stop order or other determination or ruling by
any federal agency or any state with respect to the offer or sale of
such Shares in such state.
Provided, however, that the Company shall not be protected by this
Article 11.B. from liability for any act or omission resulting from the
Company's lack of good faith, negligence, willful misconduct, or
failure to meet the standard of care set forth in Article 11.A., above.
C. Indemnification by the Company
The Company shall indemnify and hold each Fund harmless from and
against any and all losses, damages, costs, charges, counsel fees,
payments, expenses and liabilities arising out of or attributable to
any action or failure or omission to act by the Company as a result of
the Company's lack of good faith, negligence, willful misconduct, or
failure to meet the standard of care set forth in Article 11.A above.
D. Reliance
At any time the Company may apply to any officer of the Trust for
instructions, and may consult with legal counsel with respect to any
matter arising in connection with the services to be performed by the
Company under this Agreement, and the Company and its agents or
subcontractors shall not be liable and shall be indemnified by the
appropriate Fund for any action reasonably taken or omitted by it in
reliance upon such instructions or upon the opinion of such counsel
provided such action is not in violation of applicable Federal or state
laws or regulations. The Company, its agents and subcontractors shall
be protected and indemnified in recognizing stock certificates which
are reasonably believed to bear the proper manual or facsimile
signatures of the officers of the Trust, and the proper
countersignature of any former transfer agent or registrar, or of a
co-transfer agent or co-registrar.
E. Notification
In order that the indemnification provisions contained in this
Article 11 shall apply, upon the assertion of a claim for which either
party may be required to indemnify the other, the party seeking
indemnification shall promptly notify the other party of such
assertion, and shall keep the other party advised with respect to all
developments concerning such claim. The party who may be required to
indemnify shall have the option to participate with the party seeking
indemnification in the defense of such claim. The party seeking
indemnification shall in no case confess any claim or make any
compromise in any case in which the other party may be required to
indemnify it except with the other party's prior written consent.
Article 12. Termination of Agreement.
This Agreement may be terminated by either party upon one hundred
twenty (120) days written notice to the other. Should the Trust
exercise its rights to terminate, all out-of-pocket expenses associated
with the movement of records and materials will be borne by the
appropriate Fund. Additionally, the Company reserves the right to
charge for any other reasonable expenses associated with such
termination.
Article 13. Amendment.
This Agreement may be amended or modified by a written agreement
executed by both parties.
Article 14. Interpretive and Additional Provisions.
In connection with the operation of this Agreement, the Company and
the Trust may from time to time agree on such provisions interpretive
of or in addition to the provisions of this Agreement as may in their
joint opinion be consistent with the general tenor of this Agreement.
Any such interpretive or additional provisions shall be in a writing
signed by both parties and shall be annexed hereto, provided that no
such interpretive or additional provisions shall contravene any
applicable Federal or state regulations or any provision of the
Declaration of Trust. No interpretive or additional provisions made as
provided in the preceding sentence shall be deemed to be an amendment
of this Agreement.
Article 15. Governing Law. Massachusetts Law to Apply
This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the Commonwealth
of Massachusetts.
Article 16. Notices.
Except as otherwise specifically provided herein, Notices and other
writings delivered or mailed postage prepaid to the Trust at Federated
Investors Tower, Pittsburgh, Pennsylvania, 15222-3779, or to the
Company at Federated Investors Tower, Pittsburgh, Pennsylvania,
15222-3779, or to such other address as the Trust or the Company may
hereafter specify, shall be deemed to have been properly delivered or
given hereunder to the respective address.
Article 17. Counterparts.
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original.
Article 18. Limitations of Liability of Trustees and Shareholders of
the Trust.
The execution and delivery of this Agreement have been authorized by
the Trustees of the Trust and signed by an authorized officer of the
Trust, acting as such, and neither such authorization by such Trustees
nor such execution and delivery by such officer shall be deemed to have
been made by any of them individually or to impose any liability on any
of them personally, and the obligations of this Agreement are not
binding upon any of the Trustees or Shareholders of the Trust, but bind
only the appropriate property of a Fund or Class as provided in the
Declaration of Trust.
Article 19. Limitations of Liability of Trustees and Shareholders of
the Company.
The execution and delivery of this Agreement have been authorized by
the Trustees of the Company and signed by an authorized officer of the
Company, acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officer shall be
deemed to have been made by any of them individually or to impose any
liability on any of them personally, and the obligations of this
Agreement are not binding upon any of the Trustees or Shareholders of
the Company, but bind only the trust property of the Trust as provided
in the Declaration of Trust.
Article 20. Assignment.
This Agreement and the rights and duties hereunder shall not be
assignable with respect to a Fund by either of the parties hereto
except by the specific written consent of the other party.
Article 21. Merger of Agreement.
This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject
hereof whether oral or written.
Article 22. Successor Agent.
If a successor agent for the Trust shall be appointed by the Trust,
the Company shall upon termination of this Agreement deliver to such
successor agent at the office of the Company all properties of the
Trust held by it hereunder. If no such successor agent shall be
appointed, the Company shall at its office upon receipt of Proper
Instructions deliver such properties in accordance with such
instructions.
In the event that no written order designating a successor agent or
Proper Instructions shall have been delivered to the Company on or
before the date when such termination shall become effective, then the
Company shall have the right to deliver to a bank or trust company,
which is a "bank" as defined in the Investment Company Act of 1940, as
amended, of its own selection, having an aggregate capital, surplus,
and undivided profits, as shown by its last published report, of not
less than $2,000,000, all properties held by the Company under this
Agreement. Thereafter, such bank or trust company shall be the
successor of the Company under this Agreement.
Article 23. Force Majeure.
The Company shall have no liability for cessation of services
hereunder or any damages resulting therefrom to the Trust as a result
of work stoppage, power or other mechanical failure, natural disaster,
governmental action, communication disruption or other impossibility of
performance.
Article 24. Assignment; Successors.
This Agreement shall not be assigned by either party without the prior
written consent of the other party, except that either party may assign
to a successor all of or a substantial portion of its business, or to a
party controlling, controlled by, or under common control with such
party.
Article 25. Severability.
In the event any provision of this Agreement is held illegal, void or
unenforceable, the balance shall remain in effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their names and on their behalf under their seals by and
through their duly authorized officers, as of the day and year first
above written.
ATTEST: THE PLANTERS FUNDS
/s/ Gail Cagney By: /s/ John W. McGonigle
Assistant Secretary Vice President
ATTEST: FEDERATED SERVICES COMPANY
/s/ Joseph M. Huber By: /s/ Ronald L. Cavanagh
Assistant Secretary Vice President
Schedule A
Fund Accounting and Shareholder Recordkeeping Agreement
Compensation for Fund Accounting
Annual Fees per Fund
$30,000
plus 2.0 basis points on average net assets of the Fund from $100
million but less than $250 million.
plus 1.5 basis points on average net assets of the Fund from $250
million but less than $500 million.
plus 1.0 basis points on average net assets of the Fund from and over
$500 million.
plus $1,000.00 per month for each Class beyond the first Class.
The monthly fee will be $ 1,000.00 per Class with no asset charge
for those months where Federated is the only Shareholder in that
Class, due to its seeding of the Fund.
Schedule B
Out-of-Pocket Expenses
Fund Accounting
I. Out-of-pocket expense include, but are not limited to, the
following:
- Postage (including overnight courier service)
- Statement Stock
- Envelopes
- Telephones
- Telecommunication Charges (including FAX)
- Travel
- Duplicating
- Forms
- Supplies
- Microfiche
- Computer Access Charges
- Client Specific System Enhancements
- Access to the Shareholder Recordkeeping System
- Security Pricing Services
- Variable Rate Change Notification Services
- Paydown Factor Notification Services
Schedule C
Fund Accounting and Shareholder Recordkeeping Agreement
between
FEDERATED SERVICES COMPANY
and
THE PLANTERS FUNDS
Fee Schedule
Base Fee* Annual fee per fund, class or other subdivision.
$24,000
Account Fee* Annual account charge (includes system access and
funds control and reconcilement)
-Daily dividend fund $16.00
-Monthly dividend fund $10.00
-Quarterly dividend fund $10.00
Other Account Fees* Services or features not covered above.
-Account Activity Processing
(includes account establishment,
transaction and maintenance
processing) $3.50
-Account Servicing (includes
shareholder servicing and
correspondence) $4.50
-Contingent deferred sales change
(monthly and quarterly funds only) $5.00
-Closed accounts $1.20
Termination Fee One time charge. $20,000
* All fees are annualized and will be prorated on a monthly
basis for billing purposes. Out of pocket expenses are not
covered by these fees.
SCHEDULE D
Fund Accounting and Shareholder Recordkeeping Agreement
between
FEDERATED SERVICES COMPANY
and
THE PLANTERS FUNDS
Out-of-Pocket Expenses Schedule
- Postage (including overnight courier service)
- Statement Stock
- Envelopes
- Telecommunication Charges (including FAX)
- Travel
- Duplicating
- Forms
- Supplies
- Microfiche
- Computer Access Charges
- Client Specific Enhancements
- Disaster Recovery
Exhibit 5 under Form N-1A
Exhibit 6 under Item 601/Reg S-K
The Planters Funds
INVESTMENT ADVISORY CONTRACT
This Contract is made this 1st day of June, 1993, between Union
Planters National Bank, a national banking association having its principal
place of business in Memphis, Tennessee (the "Adviser"), and The Planters
Funds, a 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 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 of the Trust, 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 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; fees and expenses of
preparing and printing its Registration Statements under the Securities Act
of 1933 and the Investment Company Act of 1940 and any amendments thereto;
expenses of registering and qualifying the Trust, the Funds, and shares
("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 (other than
as Trustees of the Trust), 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 on behalf of a Fund by a majority of the
outstanding voting securities of such Fund.
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. This Contract shall be construed in accordance with and governed
by the laws of the Commonwealth of Pennsylvania.
15. This Contract will become binding on the parties hereto upon their
execution of the attached exhibits to this Contract.
16. The parties hereto acknowledge that Union Planters National Bank
has reserved the right to grant the non-exclusive use of the name "The
Planters Funds" or any derivative thereof to any other investment company,
investment company portfolio, investment adviser, distributor or other
business enterprise, and to withdraw from the Trust and one or more of the
Funds the use of the name "The Planters Funds." The name "The Planters
Funds" will continue to be used by the Trust and each Fund so long as such
use is mutually agreeable to Union Planters National Bank and the Trust.
EXHIBIT A
to the
Investment Advisory Contract
Tennessee Tax-Free Bond Fund
For all services rendered by Adviser hereunder, the above-named Fund(s)
of the Trust shall pay to Adviser and Adviser agrees to accept as full
compensation for all services rendered hereunder, an annual investment
advisory fee equal to .75 of 1% of the average daily net assets of the
Fund(s).
The portion of the fee based upon the average daily net assets of the
Fund(s) shall be accrued daily at the rate of 1/365th of 75. of 1% applied to
the daily net assets of the Fund(s).
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this 1st day of June, 1993.
Attest: Union Planters National Bank
/s/ Paul T. Dorian By: /s/ E. James House, Jr.
Senior Vice President Vice President
Attest: The Planters Funds
/s/ David M. Taylor By:/s/ Richard B. Fisher
Secretary Vice President
Exhibit 6(i) under Form N-1A
Exhibit 1 under Item 601/Reg S-K
The Planters Funds
DISTRIBUTOR'S CONTRACT
AGREEMENT made this 1st day of June, 1993, by and between The Planters
Funds (the "Trust"), a Massachusetts business trust, and FEDERATED SECURITIES
CORP. ("FSC"), a Pennsylvania Corporation.
In consideration of the mutual covenants hereinafter contained, it is
hereby agreed by and between the parties hereto as follows:
1. The Trust hereby appoints FSC as its agent to sell and distribute
shares of the Trust which may be offered in one or more series (the "Funds")
consisting of one or more classes (the "Classes") of shares (the "Shares"),
as described and set forth on one or more exhibits to this Agreement, at the
current offering price thereof as described and set forth in the current
Prospectuses of the Trust. FSC hereby accepts such appointment and agrees to
provide such other services for the Trust, if any, and accept such
compensation from the Trust, if any, as set forth in the applicable exhibit
to this Agreement.
2. The sale of any Shares may be suspended without prior notice
whenever in the judgment of the Trust it is in its best interest to do so.
3. Neither FSC nor any other person is authorized by the Trust to give
any information or to make any representation relative to any Shares other
than those contained in the Registration Statement, Prospectuses, or
Statements of Additional Information ("SAIs") filed with the Securities and
Exchange Commission, as the same may be amended from time to time, or in any
supplemental information to said Prospectuses or SAIs approved by the Trust.
FSC agrees that any other information or representations other than those
specified above which it or any dealer or other person who purchases Shares
through FSC may make in connection with the offer or sale of Shares, shall be
made entirely without liability on the part of the Trust. No person or
dealer, other than FSC, is authorized to act as agent for the Trust for any
purpose. FSC agrees that in offering or selling Shares as agent of the
Trust, it will, in all respects, duly conform to all applicable state and
federal laws and the rules and regulations of the National Association of
Securities Dealers, Inc., including its Rules of Fair Practice. FSC will
submit to the Trust copies of all sales literature before using the same and
will not use such sales literature if disapproved by the Trust.
4. This Agreement is effective with respect to each Class as of the
date of execution of the applicable exhibit and shall continue in effect with
respect to each Class presently set forth on an exhibit and any subsequent
Classes added pursuant to an exhibit during the initial term of this
Agreement for one year from the date set forth above, and thereafter for
successive periods of one year if such continuance is approved at least
annually by the Trustees of the Trust including a majority of the members of
the Board of Trustees of the Trust who are not interested persons of the
Trust and have no direct or indirect financial interest in the operation of
any Distribution Plan relating to the Trust or in any related documents to
such Plan ("Disinterested Trustees") cast in person at a meeting called for
that purpose. If a Class is added after the first annual approval by the
Trustees as described above, this Agreement will be effective as to that
Class upon execution of the applicable exhibit and will continue in effect
until the next annual approval of this Agreement by the Trustees and
thereafter for successive periods of one year, subject to approval as
described above.
5. This Agreement may be terminated with regard to a particular Fund
or Class at any time, without the payment of any penalty, by the vote of a
majority of the Disinterested Trustees or by a majority of the outstanding
voting securities of the particular Fund or Class on not more than sixty (60)
days' written notice to any other party to this Agreement. This Agreement
may be terminated with regard to a particular Fund or Class by FSC on sixty
(60) days' written notice to the Trust.
6. This Agreement may not be assigned by FSC and shall automatically
terminate in the event of an assignment by FSC as defined in the Investment
Company Act of 1940, provided, however, that FSC may employ such other
person, persons, corporation or corporations as it shall determine in order
to assist it in carrying out its duties under this Agreement.
7. FSC shall not be liable to the Trust 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 by this
Agreement.
8. This Agreement may be amended at any time by mutual agreement in
writing of all the parties hereto, provided that such amendment is approved
by the Trustees of the Trust including a majority of the Disinterested
Trustees of the Trust cast in person at a meeting called for that purpose.
9. This Agreement shall be construed in accordance with and governed
by the laws of the Commonwealth of Pennsylvania.
10. (a) Subject to the conditions set forth below, the Trust agrees to
indemnify and hold harmless FSC and each person, if any, who controls FSC
within the meaning of Section 15 of the Securities Act of 1933 and Section 20
of the Securities Act of 1934, as amended, against any and all loss,
liability, claim, damage and expense whatsoever (including but not limited to
any and all expenses whatsoever reasonably incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or
any claim whatsoever) arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, any Prospectuses or SAIs (as from time to time amended and
supplemented) or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements
therein not misleading, unless such statement or omission was made in
reliance upon and in conformity with written information furnished to the
Trust about FSC by or on behalf of FSC expressly for use in the Registration
Statement, any Prospectuses and SAIs or any amendment or supplement thereof.
If any action is brought against FSC or any controlling person thereof
with respect to which indemnity may be sought against the Trust pursuant to
the foregoing paragraph, FSC shall promptly notify the Trust in writing of
the institution of such action and the Trust shall assume the defense of such
action, including the employment of counsel selected by the Trust and payment
of expenses. FSC or any such controlling person thereof shall have the right
to employ separate counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of FSC or such controlling person unless
the employment of such counsel shall have been authorized in writing by the
Trust in connection with the defense of such action or the Trust shall not
have employed counsel to have charge of the defense of such action, in any of
which events such fees and expenses shall be borne by the Trust. Anything in
this paragraph to the contrary notwithstanding, the Trust shall not be liable
for any settlement of any such claim of action effected without its written
consent. The Trust agrees promptly to notify FSC of the commencement of any
litigation or proceedings against the Trust or any of its officers or
Trustees or controlling persons in connection with the issue and sale of
Shares or in connection with the Registration Statement, Prospectuses, or
SAI's.
(b) FSC agrees to indemnify and hold harmless the Trust, each of its
Trustees, each of its officers who have signed the Registration Statement and
each other person, if any, who controls the Trust within the meaning of
Section 15 of the Securities Act of 1933, but only with respect to statements
or omissions, if any, made in the Registration Statement or any Prospectus,
SAI, or any amendment or supplement thereof in reliance upon, and in
conformity with, information furnished to the Trust about FSC by or on behalf
of FSC expressly for use in the Registration Statement or any Prospectus,
SAI, or any amendment or supplement thereof. In case any action shall be
brought against the Trust or any other person so indemnified based on the
Registration Statement or any Prospectus, SAI, or any amendment or supplement
thereof, and with respect to which indemnity may be sought against FSC, FSC
shall have the rights and duties given to the Trust, and the Trust and each
other person so indemnified shall have the rights and duties given to FSC by
the provisions of subsection (a) above.
(c) Nothing herein contained shall be deemed to protect any person
against liability to the Trust or its shareholders to which such person would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of the duties of such person or by reason of
the reckless disregard by such person of the obligations and duties of such
person under this Agreement.
(d) Insofar as indemnification for liabilities may be permitted
pursuant to Section 17 of the Investment Company Act of 1940 for Trustees,
officers, FSC and controlling persons of the Trust by the Trust pursuant to
this Agreement, the Trust is aware of the position of the Securities and
Exchange Commission as set forth in the Investment Company Act Release
No. IC-11330. Therefore, the Trust undertakes that in addition to complying
with the applicable provisions of this Agreement, in the absence of a final
decision on the merits by a court or other body before which the proceeding
was brought, that an indemnification payment will not be made unless in the
absence of such a decision, a reasonable determination based upon factual
review has been made (i) by a majority vote of a quorum of non-party
Disinterested Trustees, or (ii) by independent legal counsel in a written
opinion that the indemnitee was not liable for an act of willful misfeasance,
bad faith, gross negligence or reckless disregard of duties. The Trust
further undertakes that advancement of expenses incurred in the defense of a
proceeding (upon undertaking for repayment unless it is ultimately determined
that indemnification is appropriate) against an officer, Trustee, FSC or
controlling person of the Trust will not be made absent the fulfillment of at
least one of the following conditions: (i) the indemnitee provides security
for his undertaking; (ii) the Trust is insured against losses arising by
reason of any lawful advances; or (iii) a majority of a quorum of non-party
Disinterested Trustees or independent legal counsel in a written opinion
makes a factual determination that there is reason to believe the indemnitee
will be entitled to indemnification.
11. FSC 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 assumed by the Trust pursuant to this agreement shall be
limited in any case to the Trust and its assets and FSC shall not seek
satisfaction of any such obligation from the shareholders of the Trust, the
Trustees, officers, employees or agents of the Trust, or any of them.
12. If at any time the Shares of any Fund are offered in two or more
Classes, FSC agrees to adopt compliance standards as to when a class of
shares may be sold to particular investors.
13. This Agreement will become binding on the parties hereto upon the
execution of the attached exhibits to the Agreement.
Exhibit A
to the
Distributor's Contract
The Planters Funds
Tennessee Tax-Free Bond Fund
In consideration of the mutual covenants set forth in the Distributor's
Contract dated June 1, 1993 between The Planters Funds and Federated
Securities Corp., The Planters Funds executes and delivers this Exhibit on
behalf of the Funds, and with respect to the separate Classes of Shares
thereof, first set forth in this Exhibit.
Witness the due execution hereof this 1st day of June, 1993
ATTEST: The Planters Funds
/s/ David M. Taylor By: /s/ E. C. Gonzales
Secretary President
ATTEST: FEDERATED SECURITIES CORP.
/s/ S. E. Cohan By: /s/ John W. McGonigle
Secretary President
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Schedule for Computation Initial
of Fund Performance Data Invest of: $1,000
Offering
TN Tax-Free Bond Fund Price/
Share= $10.94
Return Since Inception
ending 1/31/94 NAV= $10.50
FYE: July 31
Begin Capital Reinvest Ending Total
DECLARED: MONTHLY Reinvest Period Dividend Gain Price Period Ending Invest
PAID: MONTHLY Dates Shares /Share /Share /Share Shares Price Value
8/27/93 91.408 0.000000000 0.00000 $10.50 91.408 $10.50 $959.78
9/23/93 91.408 0.030000000 0.00000 $10.66 91.665 $10.66 $977.15
10/22/93 91.665 0.036000000 0.00000 $10.70 91.973 $10.70 $984.11
11/23/93 91.973 0.036000000 0.00000 $10.53 92.288 $10.53 $971.79
12/23/93 92.288 0.036000000 0.00000 $10.69 92.599 $10.69 $989.88
1/21/94 92.599 0.036000000 0.00000 $10.75 92.909 $10.75 $998.77
1/31/94 92.909 0.000000000 0.00000 $10.83 92.909 $10.83 $1,006.20
$1,000 (1+T) = End Value
T = 0.62%
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C>
TN Tax-Free Bond Fund Yield = 2{( $149,042.73 - $15,332.63 )+1)^6-1}=
Computation of SEC Yield 3,540,175 * $11.28 - 0.01130 )
As of: January 31, 1994
SEC Yield = 4.06%
Dividend and/or Interest
Inc for the 30 days ended $149,042.73
Net Expenses for $15,332.63
the Period
Avg Daily Shares
Outstanding and entitled
to receive dividends 3,540,175
Maxium offering price $11.28
per share as of 1-31-94
Undistributed net income 0.01130
Tax Equivalent Yield
(assumes individual
does not itemize
on Federal Return)
100 % minus the Federal
taxable % (100%-28%=72%)
30 SEC yield / by the tax
</TABLE>
