1933 Act File No. 33-52149
1940 Act File No. 811-7141
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No. 1 . X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 1 X
WORLD INVESTMENT SERIES, INC.
(Exact name of Registrant as Specified in Charter)
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
John W. McGonigle, Esq., Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering As soon as possible after
the effectiveness of the Registration
Statement
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
Pursuant to the provisions of Rule 24f-2 of the Investment Company Act of
1940, Registrant hereby elects to register an indefinite number of shares.
Amendment Pursuant to Rule 473
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission acting
pursuant to said Section 8(a), may determine.
CROSS-REFERENCE SHEET
This Amendment to the Registration Statement of World Investment
Series, Inc., which consists of one portfolio, World Utility Fund,
consisting of two classes of shares (a) Class A Shares, and (b) Fortress
Shares, relates to both Class A Shares and Fortress Shares, and 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 (a,b).
Item 2. Synopsis Summary of Fund Expenses (a,b).
Item 3. Condensed Financial
Information Performance Information (a,b).
Item 4. General Description
of Registrant General Information (a,b); Liberty
Family of Funds (a); Fortress
Investment Program (b); Investment
Information (a,b); Investment
Objective (a,b); Investment Policies
(a,b); Investment Limitations (a,b);
Other Classes of Shares (a,b).
Item 5. Management of the Fund World Investment Series, Inc.
Information (a,b); Management of the
Corporation (a,b); Distribution of
Class A Shares (a); Distribution of
Fortress Shares (b); Administration of
the Fund (a,b); Expenses of the Fund
and Class A Shares (a); Expenses of
the Fund and Fortress Shares (b);
Brokerage Transactions (a,b).
Item 6. Capital Stock and
Other Securities Dividends and Distributions (a, b);
Shareholder Information (a,b); Voting
Rights (a,b); Tax Information (a,b);
Federal Income Tax (a,b); Pennsylvania
Corporate and Personal Property Taxes
(a,b).
Item 7. Purchase of Securities Being
Offered Net Asset Value (a,b); Investing in
Class A Shares (a); Investing in
Fortress Shares (b); Share Purchases
(a,b); Minimum Investment Required
(a,b); What Shares Cost (a,b);
Reducing the Sales Charge (a);
Eliminating the Sales Charge (b);
Systematic Investment Program (a,b);
Exchanging Securities for Fund Shares
(a, b); Certificates and Confirmations
(a,b); Retirement Plans (a); Exchange
Privileges (b); Exchange Privilege
(a); Reduced Sales Charge (a);
Requirements for Exchange (a); Tax
Consequences (a); Making an Exchange
(a).
Item 8. Redemption or Repurchase Redeeming Class A Shares (a);
Redeeming Fortress Shares (b); Through
a Financial Institution (a,b);
Directly From the Fund (a); Directly
by Mail (b); Contingent Deferred Sales
Charge (a,b); Systematic Withdrawl
Program (a,b); Accounts With Low
Balances (a,b).
Item 9. Pending Legal Proceedings None
PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION.
Item 10. Cover Page Cover Page (a,b).
Item 11. Table of Contents. Table of Contents (a,b).
Item 12. General Information
and History. General Information About the Fund
(a,b).
Item 13. Investment Objectives
and Policies. Investment Objective and Policies
(a,b).
Item 14. Management of the Corporation.See Part A - Management of the
Corporation (a,b).
Item 15. Control Persons and Principal
Holders of Securities. The Funds (a,b).
Item 16. Investment Advisory and Other
Services. Investment Advisory Services (a,b);
Administrative Services (a,b).
Item 17. Brokerage Allocation. Brokerage Transactions (a,b).
Item 18. Capital Stock and Other
Securities. Not applicable.
Item 19. Purchase, Redemption
and Pricing of Securities
Being Offered. Purchasing Shares (a,b); Determining
Net Asset Value (a,b); Exchange
Privilege (Fortress Shares Only) (b);
Redeeming Shares (a,b).
Item 20. Tax Status. Tax Status (a,b).
Item 21. Underwriters. See Part A - Distribution of (Class A
, or Fortress) Shares (a,b).
Item 22. Calculation of
Performance Data. Total Return (a,b); Yield (a,b);
Performance Comparisons (a,b);
Item 23. Financial Statements. (To be filed by amendment).
WORLD UTILITY FUND
(A PORTFOLIO OF WORLD INVESTMENT SERIES, INC.)
CLASS A SHARES
PROSPECTUS
The Class A Shares of World Utility Fund (the "Fund") offered by this prospectus
represent interests in the Fund, which is a diversified investment portfolio in
World Investment Series, Inc. (the "Corporation"), an open-end, management
investment company (a mutual fund).
The Fund's investment objective is to provide total return. The Fund invests
primarily in securities issued by domestic and foreign companies in the
utilities industries.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF ANY
BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK, AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
GOVERNMENT AGENCY. INVESTMENT IN THESE SHARES INVOLVES INVESTMENTS RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
This prospectus contains the information you should read and know before you
invest in Class A Shares of the Fund. Keep this prospectus for future reference.
The Fund has also filed a Combined Statement of Additional Information for Class
A Shares and Fortress Shares dated April , 1994, with the Securities and
Exchange Commission. The information contained in the Combined Statement of
Additional Information is incorporated by reference into this prospectus. You
may request a copy of the Combined Statement of Additional Information free of
charge by calling 1-800-235-4669. To obtain other information or make inquiries
about the Fund, contact your financial institution.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus dated April , 1994
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
SUMMARY OF FUND EXPENSES 1
- ------------------------------------------------------
GENERAL INFORMATION 2
- ------------------------------------------------------
LIBERTY FAMILY OF FUNDS 2
- ------------------------------------------------------
INVESTMENT INFORMATION 3
- ------------------------------------------------------
Investment Objective 3
Investment Policies 3
Investment Considerations 4
Considerations of Utility Securities 4
Electric 5
Telecommunications 6
Gas 6
Water 6
Exchange Rates 6
Foreign Companies 6
U.S. Government Policies 7
Other Investment Practices 7
Foreign Currency Transactions 7
Forward Foreign Currency Exchange
Contracts 7
Repurchase Agreements 7
Lending of Portfolio Securities 8
Restricted and Illiquid Securities 8
When-Issued and Delayed Delivery
Transactions 8
Covered Call Options 8
Investment Limitations 8
NET ASSET VALUE 9
- ------------------------------------------------------
INVESTING IN CLASS A SHARES 9
- ------------------------------------------------------
Share Purchases 9
Through a Financial Institution 9
Directly by Mail 9
Directly by Wire 10
Minimum Investment Required 10
What Shares Cost 10
Dealer Concession 11
Reducing the Sales Charge 11
Quantity Discounts and Accumulated
Purchases 11
Letter of Intent 11
Reinvestment Privilege 12
Purchases with Proceeds from Redemptions
of Unaffiliated Mutual Fund Shares 12
Concurrent Purchases 12
Systematic Investment Program 12
Exchanging Securities for Fund Shares 12
Certificates and Confirmations 13
Dividends and Distributions 13
Retirement Plans 13
EXCHANGE PRIVILEGE 13
- ------------------------------------------------------
Reduced Sales Charge 13
Requirements for Exchange 13
Tax Consequences 14
Making an Exchange 14
Telephone Instructions 14
REDEEMING CLASS A SHARES 14
- ------------------------------------------------------
Through a Financial Institution 15
Directly from the Fund 15
By Telephone 15
By Mail 15
Signatures 16
Contingent Deferred Sales Charge 16
Systematic Withdrawal Program 17
Accounts with Low Balances 17
WORLD INVESTMENT SERIES, INC. INFORMATION 17
- ------------------------------------------------------
Management of the Corporation 17
Board of Directors 17
Officers and Directors 18
Investment Adviser 21
Advisory Fees 21
Adviser's Background 21
Distribution of Class A Shares 22
Other Payments to Financial Institutions 22
Administration of the Fund 22
Administrative Services 22
Shareholder Services Plan 22
Custodian 23
Transfer Agent and Dividend
Disbursing Agent 23
Legal Counsel 23
Independent Auditors 23
Brokerage Transactions 23
Expenses of the Fund and Class A Shares 23
SHAREHOLDER INFORMATION 24
- ------------------------------------------------------
Voting Rights 24
TAX INFORMATION 24
- ------------------------------------------------------
Federal Income Tax 24
Pennsylvania Corporate and
Personal Property Taxes 25
OTHER CLASSES OF SHARES 25
- ------------------------------------------------------
PERFORMANCE INFORMATION 26
- ------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES 27
- ------------------------------------------------------
REPORT OF INDEPENDENT AUDITORS 28
- ------------------------------------------------------
ADDRESSES Inside Back Cover
- ------------------------------------------------------
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
CLASS A SHARES
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Maximum Sales Load Imposed on Purchases (as a percentage of offering price).............. 4.50%
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of offering price)... None
Contingent Deferred Sales Charge (as a percentage of original purchase price or
redemption proceeds as applicable)(1).................................................. 0.00%
Redemption Fees (as a percentage of amount redeemed, if applicable)...................... None
Exchange Fee............................................................................. None
ANNUAL CLASS A SHARES OPERATING EXPENSES
(As a percentage of projected average net assets)
Management Fee (after waiver)(2)......................................................... 0.75%
12b-1 Fees............................................................................... None
Total Other Expenses..................................................................... 0.52%
Shareholder Servicing Fees............................................................... 0.25%
Total Class A Shares Operating Expenses(3)........................................... 1.27%
</TABLE>
(1) A contingent deferred sales charge of 0.50% applies only to Shares which are
purchased with proceeds from redemptions of shares of an unaffiliated mutual
fund in which a sales load has been paid and which are redeemed within one year
of purchase. For a more complete description, see "Redeeming Class A Shares.'
(2) The estimated management fee has been reduced to reflect the anticipated
voluntary waiver of a portion of the management fee. The adviser can terminate
this voluntary waiver at any time at its sole discretion. The maximum management
fee is 1.00%.
(3) The Total Class A Shares Operating Expenses are estimated to be 1.52% absent
the anticipated voluntary waiver of a portion of the management fee.
* TOTAL CLASS A SHARES OPERATING EXPENSES ARE ESTIMATED BASED ON AVERAGE
EXPENSES EXPECTED TO BE INCURRED DURING THE FISCAL YEAR ENDING MARCH 31, 1995.
DURING THE COURSE OF THIS PERIOD, EXPENSES MAY BE MORE OR LESS THAN THE
AVERAGE AMOUNT SHOWN.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF CLASS A SHARES OF THE FUND WILL
BEAR, EITHER DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE
VARIOUS COSTS AND EXPENSES, SEE "INVESTING IN CLASS A SHARES" AND "WORLD
INVESTMENT SERIES, INC. INFORMATION." WIRE-TRANSFERRED REDEMPTIONS OF LESS THAN
$5,000 MAY BE SUBJECT TO ADDITIONAL FEES.
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS
- ------------------------------------------------------------------------------- ------ -------
<S> <C> <C>
You would pay the following expenses on a $1,000 investment assuming (1) 5%
annual return and (2) redemption at the end of each time period.............. $ 57 $83
You would pay the following expenses on the same investment, assuming no sales
load when purchasing Class A Shares with the proceeds from the redemption of
unaffiliated mutual fund shares and the imposition of a contingent deferred
sales charge under the circumstances described in footnote (1) above......... $ 18 $40
</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. THIS
EXAMPLE IS BASED ON ESTIMATED DATA FOR THE FUND'S FISCAL YEAR ENDING MARCH 31,
1995.
The information set forth in the foregoing table and example relates only to
Class A Shares of the Fund. The Fund also offers another class of shares called
Fortress Shares. Class A Shares and Fortress Shares are subject to certain of
the same expenses; however, Fortress Shares are subject to a maximum sales load
of 1.00%, a contingent deferred sales charge of 1.00%, and a 12b-1 fee of 0.25%.
See "Other Classes of Shares."
GENERAL INFORMATION
- --------------------------------------------------------------------------------
The Corporation was established as a corporation under the laws of the state of
Maryland on January 25, 1994. The Corporation's address is Liberty Center,
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779. The Articles of
Incorporation permit the Corporation to offer separate series of shares
representing interests in separate portfolios of securities. The shares in any
one portfolio may be offered in separate classes. With respect to this Fund, as
of the date of this prospectus, the Board of Directors ("Directors") have
established two classes of shares, known as Class A Shares and Fortress Shares.
This prospectus relates only to Class A Shares ("Shares") of the Corporation's
portfolio known as World Utility Fund.
Shares of the Fund are designed to give institutions and individuals a
convenient means of seeking total return without undue risk through a
professionally managed, diversified portfolio comprised primarily of foreign and
domestic utility securities. The Fund is not intended to provide a complete
investment program for an investor. A minimum initial investment of $500 is
required, unless the investment is in a retirement account, in which case the
minimum investment is $50.
In general, Shares are sold at net asset value plus an applicable sales charge
and are redeemed at net asset value. However, a contingent deferred sales charge
is imposed on certain Shares. For a more complete description, see "Redeeming
Class A Shares."
The Fund's current net asset value and offering price can be found in the mutual
funds section of local newspapers under "Liberty Family Funds."
LIBERTY FAMILY OF FUNDS
- --------------------------------------------------------------------------------
This class of shares is a member of a family of mutual funds, collectively known
as the Liberty Family of Funds. The other funds in the Liberty Family of Funds
are:
AMERICAN LEADERS FUND, INC., providing growth of capital and income through
high quality stocks;
CAPITAL GROWTH FUND ( LIBERTY SHARES ONLY), providing appreciation of
capital primarily through equity securities;
FUND FOR U.S. GOVERNMENT SECURITIES, INC., providing current income through
long-term U.S. government securities;
INTERNATIONAL EQUITY FUND, providing long-term capital growth and income
through international securities;
INTERNATIONAL INCOME FUND, providing a high level of current income
consistent with prudent investment risk through high-quality debt
securities denominated primarily in foreign currencies;
LIBERTY EQUITY INCOME FUND, INC., an equity fund investing primarily in
stocks which have a history of regular dividends;
LIBERTY HIGH INCOME BOND FUND, INC., providing high current income through
high-yielding, lower-rated, corporate bonds;
LIBERTY MUNICIPAL SECURITIES FUND, INC., providing a high level of current
income exempt from federal regular income tax through municipal bonds;
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST, providing current income
consistent with stability of principal through high-quality U.S. government
securities;
LIBERTY UTILITY FUND, INC., providing current income and long-term growth
of income, primarily through electric, gas, and communication utilities;
and
TAX-FREE INSTRUMENTS TRUST, providing current income consistent with
stability of principal and exempt from federal income tax, through
high-quality, short-term municipal securities.
Prospectuses for these funds are available by writing to Federated Securities
Corp.
Each of the funds may also invest in certain other types of securities as
described in each fund's prospectus.
The Liberty Family of Funds provides flexibility and diversification for an
investor's long-term investment planning. It enables an investor to meet the
challenges of changing market conditions by offering convenient exchange
privileges which give access to various investment vehicles and by providing the
investment services of proven, professional investment advisers.
Shareholders of Class A Shares participating in the Liberty Account are
designated as Liberty Life Members. Liberty Life Members are exempt from sales
charges on future purchases in and exchanges between the Class A Shares of any
funds in the Liberty Family of Funds, as long as they maintain a $500 balance in
one of the Liberty Funds.
INVESTMENT INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide total return. While there is
no assurance that the Fund will achieve its investment objective, it endeavors
to do so by following the policies described in this prospectus. Unless
indicated otherwise, the investment objective and policies may be changed by the
Directors without the approval of shareholders. Shareholders will be notified
before any material changes in these policies become effective.
INVESTMENT POLICIES
The Fund will seek to achieve its investment objective by investing at least 65%
of its total assets in securities issued by domestic and foreign companies in
the utilities industries. For these purposes, companies will be considered to be
in the utilities industries if, in the opinion of Federated Management ("the
Investment Adviser"), they are primarily engaged in the ownership or operation
of facilities used to generate, transmit, or distribute electricity, telephone
communications, cable and other pay television services, radio-telephone
communications, gas, or water.
The Fund's portfolio will at all times include issuers located in at least three
countries, although the Investment Adviser expects to invest in more than three
countries. It is expected that, under normal circumstances, the assets of the
Fund invested in U.S. securities will be higher than that invested in
securities of any other single country. At times, the Fund may have more than
65% of its total assets invested in foreign securities.
The Fund may invest up to 35% of its total assets in securities of issuers that
are outside the utilities industries. Such investments may consist of common
stocks, debt securities, preferred stocks, or other securities issued by either
U.S. or foreign companies, governments, or governmental instrumentalities. Some
of these issuers may be in industries related to the utilities industries and,
therefore, may be subject to similar considerations.
Debt obligations in the portfolio, at the time they are purchased, generally
will be limited to those which fall in one of the following categories: (i)
rated BBB or better by Standard & Poor's Corporation or Baa by Moody's Investors
Service, Inc., or (ii) determined by the Investment Adviser to be of investment
grade and not rated by either of the aforementioned rating services. (The
Directors do not consider this limitation to apply to debt securities of an
issuer convertible into stock of that issuer. The lowest acceptable rating for
the Fund's investment in convertible securities is CCC by Standard & Poor's
Corporation or Caa by Moody's Investors Service, Inc.) Bonds rated BBB by
Standard & Poor's Corporation or Baa by Moody's Investors Service, Inc. 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. However, the Fund may invest up to 5%
of its assets in lower-rated fixed income securities (commonly known as
"high-yield, high-risk" bonds) having a minimum rating no lower than CCC by
Standard & Poor's Corporation or Caa by Moody's Investors Service, Inc. In the
event the rating on an issue held in the Fund's portfolio is changed by the
ratings services (or, for an unrated issue, in the determination of the
Investment Adviser), such event will be considered by the Investment Adviser in
its evaluation of the overall investment merits of that security, but will not
necessarily result in the automatic sale of the security. A description of the
rating categories is contained in the Appendix to the Combined Statement of
Additional Information.
For temporary defensive purposes and to maintain liquidity, the Fund may invest
in short-term money market instruments including securities of other investment
companies, certificates of deposit, obligations issued or guaranteed by the
United States government or its agencies or instrumentalities, commercial paper
rated not lower than A-1 by Standard & Poor's Corporation, Prime-1 by Moody's
Investors Service, Inc. or repurchase agreements.
INVESTMENT CONSIDERATIONS
The Fund will attempt to meet its investment objective by being at least 65%
invested in securities issued by companies in the domestic and foreign utilities
industries. There exist certain risks associated with the utilities industries
and with foreign securities of which investors in the Fund should be aware.
CONSIDERATIONS OF UTILITY SECURITIES. There are certain risks and
considerations affecting utility companies, and the holders of utility company
securities, which an investor should take into account when investing in those
securities. Factors which may adversely affect utility companies include:
difficulty in financing large construction programs during inflationary periods;
technological innovations which may cause existing plants, equipment, or
products to become less competitive or obsolete; the impact of natural or
man-made disasters (especially on regional utilities); increased costs or
reductions in production due to the unavailability of appropriate types of fuel;
seasonally or occasionally reduced availability or higher cost of natural gas;
and reduced demand due to energy conservation
among consumers. Furthermore, the revenues of domestic and foreign utility
companies generally reflect the economic growth and developments in the
geographic areas in which they do business.
In addition, most utility companies in the United States and in foreign
countries are subject to government regulation. Generally, the purpose of such
regulation is to ensure desirable levels of service and adequate capacity to
meet public demand. To this end, prices are often regulated to enable consumers
to obtain service at what is perceived to be a fair price, while attempting to
provide utility companies with a rate of return sufficient to attract capital
investment necessary for continued operation and necessary growth. Recently,
utility regulators have permitted utilities to diversify outside of their
original geographic regions and their traditional lines of business. While the
Investment Adviser believes that these opportunities will permit certain utility
companies to earn more than their traditional regulated rates of return, other
companies may be forced to defend their core businesses and may be less
profitable. Of course, there can be no assurance that all of the regulatory
policies described in this paragraph will continue in the future.
In addition to the effects of regulation described in the previous paragraph,
utility companies may also be adversely affected by the following regulatory
considerations: the development and implementation of a national energy policy;
the differences between regulatory policies of different jurisdictions (or
different regulators which have concurrent jurisdiction); shifts in regulatory
policies; adequacy of rate increases; and future regulatory legislation.
Foreign utility companies may encounter different risks and opportunities than
those located in the United States. Foreign utility companies may be more
heavily regulated than their United States counterparts. Many foreign utility
companies currently use fuels which cause more pollution than fuels used by
United States utilities; in the future, it may be necessary for such foreign
utility companies to invest heavily in pollution control equipment or otherwise
meet pollution restrictions. Rapid growth in certain foreign economies may
encourage the growth of utility industries in those countries. Although many
foreign utility companies are currently government-owned, the Investment Adviser
believes that it is likely that some foreign governments will seek to
"privatize" their utility companies, i.e., transfer ownership to private
investors.
In addition to the foregoing considerations which affect most utility companies,
there are specific considerations which affect specific utility industries:
ELECTRIC. The electric utility industry is made up of companies that are
engaged in the generation, transmission, and sale of electric energy.
Domestic electric utility companies have generally been favorably affected
by lower fuel and financing costs and the completion of major construction
programs. Some electric utilities are able to sell power outside of their
traditional geographic areas. Electric utility companies have historically
been subject to increases in fuel and other operating costs, high interest
costs on borrowings needed for capital construction programs, compliance
with environmental and safety regulations, and changes in the regulatory
climate.
In the United States, the construction and operation of nuclear power
facilities is subject to a high degree of regulatory oversight by the
Nuclear Regulatory Commission and state agencies with concurrent
jurisdiction. In addition, the design, construction, licensing, and
operation of nuclear power facilities have been subject to lengthy delays
and unanticipated costs due to changes in regulatory policy, regional
political actions, and lawsuits. Furthermore, during rate authorizations,
utility regulators may disallow the inclusion in electric rates of the
higher operating costs and capital expenditures resulting from these delays
and unanticipated costs, including the costs of a nuclear facility which a
utility company may never be able to use.
TELECOMMUNICATIONS. The telephone industry is large and highly
concentrated. The greatest portion of this segment is comprised of
companies which distribute telephone services and provide access to the
telephone networks. While many telephone utility companies have diversified
into other businesses in recent years, the profitability of telephone
utility companies could be adversely affected by increasing competition,
technological innovations, and other structural changes in the industry.
Cable television companies are typically local monopolies, subject to
scrutiny by both utility regulators and municipal governments. Emerging
technologies and legislation encouraging local competition are combining to
threaten these monopolies and may slow future growth rates of these
companies. The radio telecommunications segment of this industry, including
cellular telephone, is in its early developmental phases and is
characterized by emerging, rapidly growing companies.
GAS. Gas transmission and distribution companies are undergoing
significant changes. In the United States, the Federal Energy Regulatory
Commission is reducing its regulation of interstate transmission of gas.
While gas utility companies have in the recent past been adversely affected
by disruptions in the oil industry, increased concentration, and increased
competition, the Investment Adviser believes that environmental
considerations should benefit the gas industry in the future.
WATER. Water utility companies purify, distribute, and sell water. This
industry is highly fragmented because most of the water supplies are owned
by local authorities. Water utility companies are generally mature and are
experiencing little or no per capita volume growth. The Investment Adviser
believes that favorable investment opportunities may result if anticipated
consolidation and foreign participation in this industry occur.
The Fund occasionally takes advantage of the unusual opportunities for higher
returns available from investing in developing countries. These investments,
however, carry considerably more volatility and risk because they are associated
with less mature economies and less stable political systems.
EXCHANGE RATES. Foreign securities are denominated in foreign currencies.
Therefore, the value in U.S. dollars of the Fund's assets and income may be
affected by changes in exchange rates and regulations. Although the Fund values
its assets daily in U.S. dollars, it will not convert its holding of foreign
currencies to U.S. dollars daily. When the Fund converts its holdings to another
currency, it may incur conversion costs. Foreign exchange dealers realize a
profit on the difference between the prices at which they buy and sell
currencies.
FOREIGN COMPANIES. Other differences between investing in foreign and U.S.
companies include: less publicly available information about foreign companies;
the lack of uniform financial accounting standards applicable to foreign
companies; less readily available market quotations on foreign companies;
differences in government regulation and supervision of foreign stock exchanges,
brokers, listed companies, and banks; generally lower foreign stock market
volume; the likelihood that foreign securities may be less liquid or more
volatile; foreign brokerage commissions may be higher; unreliable mail service
between countries; and political or financial changes which adversely affect
investments in
some countries; and difficulties which may be encountered in obtaining or
enforcing a court judgment abroad.
U.S. GOVERNMENT POLICIES. In the past, U.S. government policies have
discouraged or restricted certain investments abroad by investors such as the
Fund. Although the Fund is unaware of any current restrictions, investors are
advised that these policies could be reinstituted.
OTHER INVESTMENT PRACTICES
FOREIGN CURRENCY TRANSACTIONS. The Fund will enter into foreign currency
transactions to obtain the necessary currencies to settle securities
transactions. Currency transactions may be conducted either on a spot or cash
basis at prevailing rates or through forward foreign currency exchange
contracts.
The Fund may also enter into foreign currency transactions to protect Fund
assets against adverse changes in foreign currency exchange rates or exchange
control regulations. Such changes could unfavorably affect the value of Fund
assets which are denominated in foreign currencies, such as foreign securities
or funds deposited in foreign banks, as measured in U.S. dollars. Although
foreign currency transactions may be used by the Fund to protect against a
decline in the value of one or more currencies, such efforts may also limit any
potential gain that might result from a relative increase in the value of such
currencies and might, in certain cases, result in losses to the Fund.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. A forward foreign currency
exchange contract ("forward contract") is an obligation to purchase or sell an
amount of a particular currency at a specific price and on a future date agreed
upon by the parties.
Generally, no commission charges or deposits are involved. At the time the Fund
enters into a forward contract, Fund assets with a value equal to the Fund's
obligation under the forward contract are segregated on the Fund's records and
are maintained until the contract has been settled. The Fund will generally
enter into a forward contract to provide the proper currency to settle a
securities transaction at the time the transaction occurs ("trade date"). The
period between trade date and settlement date will vary between twenty-four
hours and thirty days, depending upon local custom.
The Fund may also protect against the decline of a particular foreign currency
by entering into a forward contract to sell an amount of that currency
approximating the value of all or a portion of the Fund's assets denominated in
that currency ("hedging"). The success of this type of short-term hedging
strategy is highly uncertain due to the difficulties of predicting short-term
currency market movements and of precisely matching forward contract amounts and
the constantly changing value of the securities involved. Although the
Investment Adviser will consider the likelihood of changes in currency values
when making investment decisions, the Investment Adviser believes that it is
important to be able to enter into forward contracts when it believes the
interests of the Fund will be served. The Fund will not enter into forward
contracts for hedging purposes in a particular currency in an amount in excess
of the Fund's assets denominated in that currency. No more than 30% of the
Fund's assets will be committed to forward contracts for hedging purposes at any
time. (This restriction does not include forward contracts entered into to
settle securities transactions.)
REPURCHASE AGREEMENTS. Certain securities in which the Fund invests may be
purchased pursuant to repurchase agreements. Repurchase agreements are
arrangements in which banks, broker/dealers, and other recognized financial
institutions sell U.S. government securities or other securities to the Fund
and agree at the time of sale to repurchase them at a mutually agreed upon time
and price. To the extent that the 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.
LENDING OF PORTFOLIO SECURITIES. In order to generate additional income, the
Fund may lend its portfolio securities to broker/dealers, banks, or other
institutional borrowers of securities. The Fund will limit the amount of
portfolio securities it may lend to not more than one-third of its total assets.
The Fund will only enter into loan arrangements with broker/dealers, banks, or
other institutions which the Investment Adviser has determined are creditworthy
under guidelines established by the Fund's Board of Directors and will receive
collateral in cash or United States government securities that will be
maintained in an amount equal to at least 100% of the current market value of
the securities loaned.
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 law. 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.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase securities
on a when-issued or delayed delivery basis. In when-issued and delayed delivery
transactions, the Fund relies on the seller to complete the transaction. The
seller's failure may cause the Fund to miss a price or yield considered to be
advantageous.
COVERED CALL OPTIONS. The Fund may also write call options on all or any
portion of its portfolio to generate income for the Fund. Call options written
by the Fund give the holder the right to buy the underlying securities of the
Fund at the stated exercise price. The Fund will write call options only on
securities either held in its portfolio or for which it has the right to obtain
without payment of further consideration or for which it has segregated cash in
the amount of any additional consideration. The call options which the Fund
writes and sells must be listed on a recognized options exchange. The Fund's
investment in call options shall not exceed 5% of the Fund's total assets.
INVESTMENT LIMITATIONS
The Fund will not:
- with respect to 75% of its total assets, invest more than 5% of its total
assets in the securities of any one issuer, except that this restriction
does not apply to cash and cash items, repurchase agreements, and
securities issued or guaranteed by the United States government or its
agencies or instrumentalities, or acquire more than 10% of the
outstanding voting securities of any one issuer;
- borrow money, issue senior securities, or pledge assets, except that
under certain circumstances the Fund may borrow money and engage in
reverse repurchase transactions in amounts up to one-third of the value
of its total assets, including the amounts borrowed, and pledge up to 10%
of the value of those assets to secure such borrowings.
The above investment limitations cannot be changed without shareholder approval.
The following limitations, however, may be changed by the Directors without the
approval of shareholders. Shareholders will be notified before any material
change in this limitation becomes effective.
The Fund will not invest more than 25% of its total assets in securities of
companies engaged principally in any one industry other than the utilities
industry, except that this restriction does not apply to cash or cash items and
securities issued or guaranteed by the United States government or its agencies
or instrumentalities.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The Fund's net asset value per Share fluctuates. The net asset value for Shares
is determined by adding the interest of the Class A Shares in the market value
of all securities and other assets of the Fund, subtracting the interest of the
Class A Shares in the liabilities of the Fund and those attributable to the
Class A Shares, and dividing the remainder by the number of Class A Shares
outstanding. The net asset value for Class A Shares may differ from that of
Fortress Shares due to the variance in daily net income realized by each class.
Such variance will reflect only accrued net income to which the shareholders of
a particular class are entitled.
INVESTING IN CLASS A SHARES
- --------------------------------------------------------------------------------
SHARE PURCHASES
Shares are sold on days on which the New York Stock Exchange is open. Shares may
be purchased through a financial institution which has a sales agreement with
the distributor or directly from the distributor, Federated Securities Corp.
once an account has been established. In connection with the sale of Shares,
Federated Securities Corp. may from time to time offer certain items of nominal
value to any shareholder or investor. The Fund reserves the right to reject any
purchase request.
THROUGH A FINANCIAL INSTITUTION. An investor may call his financial institution
(such as a bank or an investment dealer) to place an order to purchase Shares.
Orders through a financial institution are considered received when the Fund is
notified of the purchase order. It is the financial institution's responsibility
to transmit orders promptly. 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.
DIRECTLY BY MAIL. An investor may place an order to purchase Shares directly
from the distributor once an account has been established. To do so, mail a
check made payable to World Utility Fund - Class A Shares to Federated Services
Company, c/o State Street Bank and Trust Company, P.O. Box 8604, Boston, MA
02266-8604.
Orders by mail are considered received after payment by check is converted by
State Street Bank and Trust Company ("State Street Bank") into federal funds.
This is generally the next business day after State Street Bank receives the
check.
DIRECTLY BY WIRE. To purchase Shares directly from the distributor by wire once
an account has been established, call the Fund. All information needed will be
taken over the telephone, and the order is considered received when State Street
Bank receives payment by wire. Federal funds should be wired as follows: State
Street Bank and Trust Company, Boston, Massachusetts 02105; Attention: EDGEWIRE;
For Credit to: World Utility Fund - Class A Shares; Fund Number (this number can
be found on the account statement or by contacting the Fund); Group Number or
Order Number; Nominee or Institution Name; ABA Number . Shares cannot be
purchased by wire on Columbus Day, Veterans' Day, or Martin Luther King Day.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment in Shares is $500 unless the investment is in a
retirement plan, in which case the minimum initial investment is $50. Subsequent
investments must be in amounts of at least $10, except for retirement plans,
which must be in amounts of at least $50.
WHAT SHARES COST
Shares 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 OF A PERCENTAGE OF
AMOUNT OF TRANSACTION PUBLIC OFFERING PRICE NET AMOUNT INVESTED
- -------------------------------------------- ----------------------- --------------------
<S> <C> <C>
Less than $100,000.......................... 4.50% 4.71%
$100,000 but less than $250,000............. 3.75% 3.90%
$250,000 but less than $500,000............. 2.50% 2.56%
$500,000 but less than $750,000............. 2.00% 2.04%
$750,000 but less than $1 million........... 1.00% 1.01%
$1 million or more.......................... 0.00% 0.00%
</TABLE>
The net asset value is determined at 4:00 P.M. (Eastern time) or at the close of
the New York Stock Exchange, Monday through Friday, except on: (i) days on which
there are not sufficient changes in the value of the Fund's portfolio securities
that its net asset value might be materially affected; (ii) days during which no
Shares are tendered for redemption and no orders to purchase Shares are
received; or (iii) the following holidays: New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and
Christmas Day.
Shareholders designated as Liberty Life Members are exempt from sales charges.
No sales charge is imposed for Shares purchased through bank trust departments
or investment advisers registered under the Investment Advisers Act of 1940. In
addition, certain institutions such as insurance companies and certain
associations, are exempt from the sales charge for purchases of Shares. However,
investors who purchase Shares through a trust department or investment adviser
may be charged an additional service fee by that institution.
DEALER CONCESSION. For sales of Shares, a dealer will normally receive up to
90% 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 all dealers selling Shares,
all or a portion the sales charge it normally retains or any other source
available to it. Such additional payments, if accepted by the dealer, may be in
the form of cash or promotional incentives, and will be predicated upon the
amount of Shares or of the Liberty Family of Funds sold by the dealer.
The sales charge for Shares sold other than through registered broker/dealers
will be retained by Federated Securities Corp. Federated Securities Corp. 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 in
connection with the initiation of customer accounts and purchases of Shares.
REDUCING THE SALES CHARGE
The sales charge can be reduced on the purchase of Shares through:
- quantity discounts and accumulated purchases;
- signing a 13-month letter of intent;
- using the reinvestment privilege;
- purchases with proceeds from redemptions of unaffiliated mutual fund
shares; or
- concurrent purchases.
QUANTITY DISCOUNTS AND ACCUMULATED PURCHASES. As shown in the table above,
larger purchases reduce the sales charge paid. The Fund will combine purchases
of Shares made on the same day by the investor, the investor's spouse, and the
investor's children under age 21 when it calculates the sales charge. In
addition, the sales charge, if applicable, is reduced for purchases made at one
time by a trustee or fiduciary for a single trust estate or a single fiduciary
account.
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 $90,000 and he
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 3.75%,
not 4.50%.
To receive the sales charge reduction, Federated Securities Corp. must be
notified by the shareholder in writing or by his financial institution 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 of funds in the Liberty Family of Funds 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 4.5% of the total amount intended to be purchased in escrow
(in Shares) until such purchase is completed.
The 4.5% 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
toward 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 120 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
his financial institution of the reinvestment in order to eliminate a sales
charge. If the shareholder redeems his Shares in the Fund, there may be tax
consequences.
PURCHASES WITH PROCEEDS FROM REDEMPTIONS OF UNAFFILIATED MUTUAL FUND SHARES.
Investors may purchase Shares at net asset value, without a sales charge, with
the proceeds from the redemption of shares of a mutual fund which was sold with
a sales charge or commission and was not distributed by Federated Securities
Corp. (This does not include shares which were or would be subject to a
contingent deferred sales charge upon redemption.) The purchase must be made
within 60 days of the redemption, and Federated Securities Corp. must be
notified by the investor in writing, or by his financial institution, at the
time the purchase is made. Federated Securities Corp. will offer to pay dealers
an amount equal to .50 of 1% of the net asset value of Shares purchased by their
clients or customers in this manner.
CONCURRENT PURCHASES. For purposes of qualifying for a sales charge reduction,
a shareholder has the privilege of combining concurrent purchases of two or more
funds in the Liberty Family of Funds, the purchase price of which includes a
sales charge. For example, if a shareholder concurrently invested $30,000 in one
of the other Liberty Funds with a sales charge, and $70,000 in this Fund, the
sales charge would be reduced.
To receive this sales charge reduction, Federated Securities Corp. must be
notified by the shareholder in writing or by his financial institution at the
time the concurrent purchases are made. The Fund will reduce the sales charge
after it confirms the purchases.
SYSTEMATIC INVESTMENT PROGRAM
Once a Fund account has been opened, shareholders may add to their investment on
a regular basis in a minimum amount of $100. Under this program, funds may be
automatically withdrawn periodically from the shareholder's checking account and
invested in Shares at the net asset value next determined after an order is
received by State Street Bank, plus the applicable sales charge. A shareholder
may apply for participation in this program through his financial institution or
directly through the Fund.
EXCHANGING SECURITIES FOR FUND SHARES
Investors may exchange certain convertible securities or a combination of
securities and cash for Shares. The securities and any cash must have a market
value of at least $25,000. From time to time the Fund will prepare a list of
securities which may be eligible for acceptance and furnish this list to brokers
upon request. Securities accepted by the Fund are valued in the same manner as
the Fund values its portfolio securities. Investors wishing to exchange
securities should first contact their investment broker, who will contact
Federated Securities Corp.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Fund, Federated Services Company maintains a Share
account for each shareholder. Share certificates are not issued unless requested
on the application or by contacting the Fund.
Detailed confirmations of each purchase and redemption are sent to each
shareholder. Quarterly statements are sent to report dividends paid during the
year.
DIVIDENDS AND DISTRIBUTIONS
Dividends are declared and paid quarterly to all shareholders invested in the
Fund on the record date. Distributions of any net realized capital gains will be
made at least once every twelve months. Dividends and distributions are
automatically reinvested in additional Shares on the payment date, at the
ex-dividend date net asset value without a sales charge, unless shareholders
request cash payments on the new account form or by writing to the transfer
agent. All shareholders on the record date are entitled to the dividend. If
Shares are redeemed or exchanged prior to the record date or purchased after the
record date, those Shares are not entitled to that quarter's dividend.
RETIREMENT PLANS
Shares of the Fund can be purchased as an investment for retirement plans or for
IRA accounts. For further details, including prototype retirement plans, contact
the Fund and consult a tax adviser.
EXCHANGE PRIVILEGE
- --------------------------------------------------------------------------------
Class A shareholders may exchange all or some of their Shares for Class A Shares
in other funds in the Liberty Family of Funds. Shareholders of Class A Shares
may also exchange into certain Federated Funds which are sold with a sales
charge different from that of the Fund's or with no sales charge and which are
advised by subsidiaries or affiliates of Federated Investors. These exchanges
are made at net asset value plus the difference between the Fund's sales and
contingent deferred sales charge already paid and any sales charge of the fund
into which the Shares are to be exchanged, if higher. Neither the Fund nor any
of the funds in the Liberty Family of Funds imposes any additional fees on
exchanges.
REDUCED SALES CHARGE
If a shareholder making such an exchange qualifies for a reduction of the sales
charge, Federated Securities Corp. must be notified in writing by the
shareholder or by his financial institution.
REQUIREMENTS FOR EXCHANGE
Shareholders using this privilege must exchange Shares having a net asset value
of at least $500. Before the exchange, the shareholder must receive a prospectus
of the fund for which the exchange is being made.
This privilege is available to shareholders resident in any state in which the
fund Shares being acquired may be sold. This privilege is not available where
redeemed shares are assessed a contingent deferred sales charge or other similar
charge. Upon receipt of proper instructions and required supporting documents,
Shares submitted for exchange are redeemed and the proceeds invested in Class A
shares of the other fund. The exchange privilege may be modified or terminated
at any time. Shareholders will be notified of the modification or termination of
the exchange privilege.
Further information on the exchange privilege and prospectuses for the Liberty
Family of Funds or certain Federated Funds are available by contacting the Fund.
TAX CONSEQUENCES
An exercise of the exchange privilege is treated as a sale for federal income
tax purposes. Depending on the circumstances, a short-term or long-term capital
gain or loss may be realized.
MAKING AN EXCHANGE
Instructions for exchanges for the Liberty Family of Funds and certain Federated
Funds may be given in writing or by telephone. Telephone exchange instructions
may be recorded. If reasonable procedures are not followed by the Fund, it may
be liable for losses due to unauthorized or fraudulent telephone instructions.
Written instructions may require a signature guarantee. Shareholders of the Fund
may have difficulty in making exchanges by telephone through brokers and other
financial institutions during times of drastic economic or market changes. If a
shareholder cannot contact his broker or financial institution by telephone, it
is recommended that an exchange request be made in writing and sent by overnight
mail to Boston Financial Data Services, Inc., Attention: Federated Division, Two
Heritage Drive, North Quincy, Massachusetts 02171.
TELEPHONE INSTRUCTIONS. Shares may be exchanged between two funds by telephone
only if the two funds have identical shareholder registrations.
Any Shares held in certificate form cannot be exchanged by telephone but must be
forwarded to Federated Services Company, in care of State Street Bank and
deposited to the shareholder's account before being exchanged. Telephone
exchange instructions are recorded and will be binding upon the shareholder.
Such instructions will be processed as of 4:00 P.M. (Eastern time) and must be
received by State Street Bank before that time for Shares to be exchanged the
same day. Shareholders exchanging into a fund will not receive any dividend that
is payable to shareholders of record on that date. This privilege may be
modified or terminated at any time.
REDEEMING CLASS A SHARES
- --------------------------------------------------------------------------------
The Fund redeems Shares at their net asset value less any applicable contingent
deferred sales charge next determined after State Street Bank receives the
redemption request. Redemptions will be made on days on which the Fund computes
its net asset value. Redemptions can be made through a financial institution or
directly from the Fund by written request. Redemption requests must be received
in proper form.
THROUGH A FINANCIAL INSTITUTION
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 less any applicable contingent deferred
sales charge. 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.
DIRECTLY FROM THE FUND
BY TELEPHONE. Shareholders who have not purchased through a financial
institution may redeem their Shares by telephoning the Fund. The proceeds will
be mailed to the shareholder's address of record or wire transferred to the
shareholder's account at a domestic commercial bank that is a member of the
Federal Reserve System, normally within one business day, but in no event longer
than seven days after the request. The minimum amount for a wire transfer is
$1,000. If at any time the Fund shall determine it necessary to terminate or
modify this method of redemption, shareholders would be promptly notified.
An authorization form permitting State Street Bank to accept telephone requests
must first be completed. Authorization forms and information on this service are
available from Federated Securities Corp. Telephone redemption instructions may
be recorded. If reasonable procedures are not followed by the Fund, it may be
liable for losses due to unauthorized or fraudulent telephone instructions.
In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If such a case should occur, another
method of redemption, such as redeeming by mail, should be considered.
BY MAIL. Any shareholder may redeem Shares by sending a written request to
Federated Services Company, c/o State Street Bank, P.O. Box 8604, Boston, MA
02266-8604. The written request should include the shareholder's name, the Fund
name and class of shares name, the account number, and the Share or dollar
amount requested and should be signed exactly as the Shares are registered.
If Share certificates have been issued, they must be properly endorsed and
should be sent by registered or certified mail with the written request.
Shareholders should call the Fund 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 ("BIF"), which is administered by the Federal Deposit
Insurance Corporation ("FDIC");
- a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchanges;
- a savings bank or savings and loan association whose deposits are insured
by the Savings Association Insurance Fund ("SAIF"), which is administered
by the FDIC; or
- any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and its transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Fund may elect in the future to
limit eligible signature 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.
Normally, a check for the proceeds is mailed within one business day, but in no
event more than seven days, after receipt of a proper written redemption
request.
CONTINGENT DEFERRED SALES CHARGE
Shareholders who purchased Shares at net asset value with the proceeds of a
redemption of shares of a mutual fund sold with a sales charge or commission and
not distributed by Federated Securities Corp. will be charged a contingent
deferred sales charge by the Fund's distributor of .50 of 1% for redemptions
made within one year from the date of purchase. The contingent deferred sales
charge will be calculated based upon the lesser of the original purchase price
of the Shares or the net asset value of the Shares when redeemed.
The contingent deferred sales charge will not be imposed on Shares acquired
through reinvestment of dividends or distributions of short-term or long-term
capital gains. Redemptions are deemed to have occurred in the following order:
1) Shares acquired through the reinvestment of dividends and long-term capital
gains, 2) purchases of Shares occurring more than one year before the date of
redemption, 3) purchases of Shares within the previous year without the use of
redemption proceeds as described above, and 4) purchases of Shares within the
previous year through the use of redemption proceeds as described above.
The contingent deferred sales charge will not be imposed when a redemption
results from a tax-free return under the following circumstances: (i) a total or
partial distribution from a qualified plan, other than an IRA, Keogh Plan, or a
custodial account, following retirement; (ii) a total or partial distribution
from an IRA, Keogh Plan, or a custodial account, after the beneficial owner
attains age 59-1/2; or (iii) from the death or total and permanent disability of
the beneficial owner. The exemption from the contingent deferred sales charge
for qualified plans, and IRA, Keogh Plan or a custodial account does not extend
to account transfers, rollovers, and other redemptions made for purposes of
reinvestment.
A contingent deferred sales charge will not be charged in connection with
exchanges of Shares for shares in other Liberty Family Funds or in connection
with redemptions by the Fund of accounts with low balances.
SYSTEMATIC WITHDRAWAL PROGRAM
Shareholders who desire to receive payments of a predetermined amount not less
than $100 may take advantage of the Systematic Withdrawal Program. Under this
program, Shares are redeemed to provide for periodic withdrawal payments in an
amount directed by the shareholder. Depending upon the amount of the withdrawal
payments, the amount of dividends paid and capital gains distributions with
respect to Shares, and the fluctuation of the net asset value of Shares redeemed
under this program, redemptions may reduce, and eventually deplete, the
shareholder's investment in Shares. For this reason, payments under this program
should not be considered as yield or income on the shareholder's investment in
Shares. To be eligible to participate in this program, a shareholder must have
an account value of at least $10,000. A shareholder may apply for participation
in this program through his financial institution. Due to the fact that Shares
are sold with a sales charge, it is not advisable for shareholders to be
purchasing Shares while participating in this program.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Fund may
redeem Shares in any account, except retirement plans, and pay the proceeds to
the shareholder if the account balance falls below the required minimum value of
$500. This requirement does not apply, however, if the balance falls below $500
because of changes in the Fund's net asset value.
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.
WORLD INVESTMENT SERIES, INC. INFORMATION
- --------------------------------------------------------------------------------
MANAGEMENT OF THE CORPORATION
BOARD OF DIRECTORS. The Corporation is managed by a Board of Directors. The
Directors are responsible for managing the Corporation's business affairs and
for exercising all the Corporation's powers except those reserved for the
shareholders. An Executive Committee of the Board of Directors handles the
Board's responsibilities between meetings of the Board.
OFFICERS AND DIRECTORS. Officers and Directors are listed with their addresses,
principal occupations and present positions, including any affiliation with
Federated Investors, Federated Management, Federated Securities Corp., Federated
Administrative Services, and the Funds described in the Statement of Additional
Information.
<TABLE>
<CAPTION>
POSITION WITH PRINCIPAL OCCUPATION
NAME AND ADDRESS THE CORPORATION DURING PAST FIVE YEARS
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
John F. Donahue+* Chairman and Chairman and Trustee, Federated Investors; Chairman and Trustee, Federated
Federated Investors Director Advisers, Federated Management, and Federated Research; Director, AEtna Life
Tower and Casualty Company; Chief Executive Officer and Director,Trustee, or
Pittsburgh, PA Managing General Partner of the Funds; formerly, Director, The Standard Fire
Insurance Company. Mr. Donahue is the father of J. Christopher Donahue,
Vice-President of the Corporation.
- ------------------------------------------------------------------------------------------------------------------
John T. Conroy, Jr. Director President, Investment Properties Corporation; Senior Vice-President, John R.
Wood/IPC Commercial Wood and Associates, Inc., Realtors; President, Northgate Village
Department and Associates, Development Corporation; John R. Wood Partner or Trustee in private real
Inc., Realtors estate ventures in Southwest Florida; Director, Trustee, or Managing General
3255 Tamiami Trail North Partner of the Funds; formerly, President, Naples Property Management, Inc.
Naples, FL
- ------------------------------------------------------------------------------------------------------------------
William J. Copeland Director Director and Member of the Executive Committee, Michael Baker, Inc.;
One PNC Plaza Director, Trustee, or Managing General Partner of the Funds; formerly, Vice
23rd Floor Chairman and Director, PNC Bank, N.A. and PNC Financial Corp and Director,
Pittsburgh, PA Ryan Homes, Inc.
- ------------------------------------------------------------------------------------------------------------------
James E. Dowd Director Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director,
571 Hayward Mill Road Trustee, or Managing General Partner of the Funds; formerly, Director, Blue
Concord, MA Cross of Massachusetts, Inc.
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
POSITION WITH PRINCIPAL OCCUPATION
NAME AND ADDRESS THE CORPORATION DURING PAST FIVE YEARS
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Lawrence D. Ellis, M.D. Director Hematologist, Oncologist, and Internist, Presbyterian and Montefiore
3471 Fifth Avenue Hospitals; Clinical Professor of Medicine and Trustee University of
Suite 1111 Pittsburgh; Director Trustee, or Managing General Partner of the Funds.
- ------------------------------------------------------------------------------------------------------------------
Edward L. Flaherty, Jr.+ Director Attorney-at-law; Partner, Meyer and Flaherty; Director, Eat'N Park
5916 Penn Mall Restaurants, Inc., and Statewide Settlement Agency, Inc.; Director, Trustee,
Pittsburgh, PA or Managing General Partner of the Funds; formerly, Counsel, Horizon
Financial, F.A., Western Region.
- ------------------------------------------------------------------------------------------------------------------
Peter E. Madden Director Consultant; State Representative, Commonwealth of Massachusetts; Director,
225 Franklin Street Trustee, or Managing General Partner of the Funds; formerly, President,
Boston, MA State Street Bank and Trust Company and State Street Boston Corporation and
Trustee, Lahey Clinic Foundation, Inc.
- ------------------------------------------------------------------------------------------------------------------
Gregor F. Meyer Director Attorney-at-law; Partner, Meyer and Flaherty; Chairman, Meritcare, Inc.;
5916 Penn Mall Director, Trustee, or Managing General Partner of the Funds; formerly, Vice
Pittsburgh, PA Chairman, Horizon Financial, F.A.
- ------------------------------------------------------------------------------------------------------------------
Wesley W. Posvar Director Professor, Foreign Policy and Management Consultant; Trustee, Carnegie
1202 Cathedral of Learning Endowment for International Peace, RAND Corporation, Online Computer Library
University of Pittsburgh Center, Inc., and U.S. Space Foundation; Chairman, National Advisory Council
Pittsburgh, PA for Environmental Policy and Technology; Chairman, Czecho Slovak Management
Center; Director, Trustee, or Managing General Partner of the Funds;
President Emeritus, University of Pittsburgh; formerly, Chairman, National
Advisory Council for Environmental Policy and Technology.
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
POSITION WITH PRINCIPAL OCCUPATION
NAME AND ADDRESS THE CORPORATION DURING PAST FIVE YEARS
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Marjorie P. Smuts Director Public relations/marketing consultant; Director, Trustee, or Managing
4905 Bayard Street General
Pittsburgh, PA Partner of the Funds.
- ------------------------------------------------------------------------------------------------------------------
Richard B. Fisher President and Executive Vice President and Trustee, Federated Investors; Chairman and
Federated Investors Director Director, Federated Securities Corp.; President or Vice President of the
Tower Funds; Director or Trustee of some of the Funds.
Pittsburgh, PA
- ------------------------------------------------------------------------------------------------------------------
J. Christopher Donahue Vice President President and Trustee, Federated Investors; Trustee, Federated Advisers,
Federated Investors Federated Management and Federated Research; President and Director,
Tower Federated Administrative Services; President or Vice President of the Funds;
Director, Trustee, or Managing General Partner of some of the Funds. Mr.
Donahue is the son of John F. Donahue, Chairman and Director of the
Corporation.
- ------------------------------------------------------------------------------------------------------------------
Edward C. Gonzales Vice President Vice President, Treasurer, and Trustee, Federated Investors; Vice President
Federated Investors and Treasurer and Treasurer, Federated Advisers, Federated Management, and Federated
Tower Research; Executive Vice President, Treasurer, and Director, Federated
Pittsburgh, PA Securities Corp.; Chairman, Treasurer, and Director, Federated
Administrative Services. Trustee or Director of some of the Funds; Vice
President and Treasurer of the Funds.
- ------------------------------------------------------------------------------------------------------------------
John W. McGonigle Vice President Vice President, Secretary, General Counsel, and Trustee, Federated
Federated Investors and Secretary Investors; Vice President, Secretary, and Trustee, Federated Advisers,
Tower Federated Management, and Federated Research; Executive Vice President,
Pittsburgh, PA Secretary, and Director, Federated Administrative Services; Director and
Executive Vice President, Federated Securities Corp.; Vice President and
Secretary of the Funds.
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
POSITION WITH PRINCIPAL OCCUPATION
NAME AND ADDRESS THE CORPORATION DURING PAST FIVE YEARS
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
John A. Staley, IV Vice President Vice President and Trustee, Federated Investors; Executive Vice President,
Federated Investors Federated Securities Corp.; President and Trustee, Federated Advisers,
Tower Federated Management, and Federated Research; Vice President of the Funds,
Pittsburgh, PA Director, Trustee, or Managing General Partner of the Funds; formerly, Vice
President, The Standard Fire Insurance Company and President of its
Federated Research Division.
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
* This Director is deemed to be an "interested person" of the Corporation as
defined in the Investment Company Act of 1940.
+ Members of the Corporation's Executive Committee. The Executive Committee of
the Board of Directors handles the responsibilities of the Board of Directors
between meetings of the Board.
Officers and Directors own less than 1% of the Fund's outstanding shares.
INVESTMENT ADVISER. Under the terms of an Advisory Agreement between the
Corporation and Federated Management, Federated Management will furnish to the
Fund such investment advice, statistical and other factual information as may
from time to time be reasonably requested by the Fund.
ADVISORY FEES. The Fund's adviser receives an annual investment advisory
fee equal to 1.00% of average daily net assets of the Fund. The fee paid by
the Fund, while higher than the advisory fee paid by other mutual funds in
general, is comparable to fees paid by other mutual funds with similar
objectives and policies. The adviser may voluntarily choose to waive a
portion of its fee or reimburse the Fund for certain operating expenses.
The adviser can terminate this voluntary reimbursement of expenses at any
time at its sole discretion. The adviser has also undertaken to reimburse
the Fund for operating expenses in excess of limitations established by
certain states.
ADVISER'S BACKGROUND. Federated Management, a Delaware business trust
organized on April 11, 1989, is a registered investment adviser under the
Investment Advisers Act of 1940. It is a subsidiary of Federated Investors.
All of the Class A (voting) shares of Federated Investors are owned by a
trust, the trustees of which are John F. Donahue, Chairman and Trustee of
Federated Investors, Mr. Donahue's wife, and Mr. Donahue's son, J.
Christopher Donahue, who is President and Trustee of Federated Investors.
Federated Management and other subsidiaries of Federated Investors serve as
investment advisers to a number of investment companies and private accounts
with combined assets of approximately $70 billion. Federated Investors, which
was founded in 1956 as Federated Investors, Inc., develops and manages mutual
funds primarily for the financial industry. Federated Investors' track record of
competitive performance and its disciplined, risk-averse investment philosophy
serve approximately 3,500 client institutions nationwide. Through these same
client institutions, individual shareholders also have access to this same level
of investment expertise.
Christopher H. Wiles has been the Fund's portfolio manager since its inception.
Mr. Wiles joined Federated Investors in 1990 and has been a Vice President of
the Investment Adviser since 1992. Mr. Wiles served as Assistant Vice President
of the Investment Adviser from 1990 until 1992. Mr. Wiles was a portfolio
manager at Mellon Bank from 1986 until 1990. Mr. Wiles is a Chartered Financial
Analyst and received his M.B.A. in Finance from Cleveland State University.
DISTRIBUTION OF CLASS A SHARES
Federated Securities Corp. is the principal distributor for Shares. Federated
Securities Corp. is located at Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779. It is a Pennsylvania corporation organized on November
14, 1969, and is the principal distributor for a number of investment companies.
Federated Securities Corp. is a subsidiary of Federated Investors.
OTHER PAYMENTS TO FINANCIAL INSTITUTIONS. Federated Securities Corp. will pay
dealers an amount equal to 0.25% of the net asset value of Shares for trades
over $1 million. These payments will be made directly by the distributor and
will not be made from the assets of the Fund by the assessment of a sales charge
on Shares. Any payments will be reimbursed by the adviser.
ADMINISTRATION OF THE FUND
ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, provides administrative personnel and services (including
certain legal and financial reporting services) necessary to operate the Fund.
Federated Administrative Services provides these at an annual rate as specified
below:
<TABLE>
<CAPTION>
MAXIMUM AVERAGE AGGREGATE DAILY
ADMINISTRATIVE FEE NET ASSETS OF THE FUND
- --------------------- -------------------------------------
<S> <C>
0.15 of 1% on the first $250 million
0.125 of 1% on the next $250 million
0.10 of 1% on the next $250 million
0.075 of 1% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
Federated Administrative Services may choose voluntarily to waive a portion of
its fee.
SHAREHOLDER SERVICES PLAN. The Fund has adopted a Shareholder Services Plan
(the "Services Plan") under which it may make payments up to 0.25 of 1% of the
average daily net asset value of the Shares to obtain certain personal services
for shareholders and the maintenance of shareholder accounts ("shareholder
services"). The Fund has entered into a Shareholder Services Agreement with
Federated Shareholder Services, a subsidiary of Federated Investors, under which
Federated Shareholder Services will either perform shareholder services directly
or will select Financial Institutions to perform shareholder services. Financial
Institutions will receive fees based upon shares owned by their clients or
customers. The schedules of such fees and the basis upon which such fees will be
paid will be determined from time to time by the Fund and Federated Shareholder
Services.
The Glass-Steagall Act limits the ability of a depository institution (such as a
commercial bank or a savings and loan association) to become an underwriter or
distributor of 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 Board of Directors will consider appropriate changes in the
administrative services.
State securities laws governing the ability of depository institutions to act as
underwriters or distributors of securities may differ from interpretations given
to the Glass-Steagall Act and, therefore, banks and financial institutions may
be required to register as dealers pursuant to state law.
CUSTODIAN. State Street Bank and Trust Company, P.O. Box 8604, Boston,
Massachusetts 02266-8604, is custodian for the securities and cash of the Fund.
Foreign instruments purchased by the Fund are held by foreign banks
participating in a network coordinated by State Street Bank.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated Services Company,
Federated Investors Tower, Pittsburgh, Pennsylvania, 15222-3779, is transfer
agent for Share and dividend disbursing agent for the Fund.
LEGAL COUNSEL. Legal counsel is provided by Houston, Houston & Donnelly, 2510
Centre City Tower, Pittsburgh, Pennsylvania 15222, and Dickstein, Shapiro &
Morin, 2101 L Street, N.W., Washington, D.C. 20037.
INDEPENDENT AUDITORS. The independent auditors for the Fund are Ernst & Young,
One Oxford Centre, Pittsburgh, Pennsylvania 15219.
BROKERAGE TRANSACTIONS
When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the Investment Adviser looks for prompt execution of the order at a
favorable price. In working with dealers, the adviser will generally utilize
those who are recognized dealers in specific portfolio instruments, except when
a better price and execution of the order can be obtained elsewhere. In
selecting among firms believed to meet this criteria, the adviser may give
consideration to those firms which have sold or are selling Shares of the Fund
and other funds distributed by Federated Securities Corp. The adviser makes
decisions on portfolio transactions and selects brokers and dealers subject to
review by the Board of Directors.
EXPENSES OF THE FUND AND CLASS A SHARES
Holders of each class of shares pay their allocable portion of Fund and
Corporation expenses.
The Corporation expenses for which holders of Shares pay their allocable portion
include, but are not limited to: the cost of organizing the Corporation and
continuing its existence; registering the Corporation with federal and state
securities authorities; Directors' fees; auditors' fees; the cost of meetings of
Directors; legal fees of the Corporation; association membership dues; and such
non-recurring and extraordinary items as may arise from time to time.
The Fund expenses for which holders of Shares pay their allocable portion
include, but are not limited to: registering the Fund and Shares of the Fund;
investment advisory services; taxes and commissions;
custodian fees; insurance premiums; auditors' fees; and such non-recurring and
extraordinary items as may arise from time to time.
At present, the only expenses which are allocated specifically to Shares as a
class are expenses under the Service Plan. However, the Directors reserve the
right to allocate certain other expenses to holders of Shares as it deems
appropriate ("Class Expenses"). In any case, Class Expenses would be limited to:
distribution fees; transfer agent fees as identified by the transfer agent as
attributable to holders of Shares; fees under the Service Plan; printing and
postage expenses related to preparing and distributing materials such as
shareholder reports, prospectuses and proxies to current shareholders;
registration fees paid to the Securities and Exchange Commission and
registration fees paid to state securities commissions; expenses related to
administrative personnel and services as required to support holders of Shares;
legal fees relating solely to Shares; and Directors' fees incurred as a result
of issues relating solely to Shares.
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS
Each Share gives the shareholder one vote in Director elections and other
matters submitted to shareholders for vote. All shares of each portfolio or
class in the Corporation have equal voting rights, except that only shares of
that particular Fund or class are entitled to vote in matters affecting that
Fund or class.
As a Maryland corporation, the Corporation is not required to hold annual
shareholder meetings. Shareholder approval will be sought only for certain
changes in the Fund's operation and for the election of Directors under certain
circumstances.
Directors may be removed by a two-thirds vote of the number of Directors prior
to such removal or by a two-thirds vote of the shareholders at a special
meeting. The Directors shall call a Special Meeting of Shareholders upon the
written request of shareholders owning at least 10% of the Corporation's
outstanding shares entitled to vote.
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects to meet requirements
of the Internal Revenue Code, as amended, applicable to regulated investment
companies and to receive the special tax treatment afforded to such companies.
However, the Fund may invest in the stock of certain foreign corporations which
would constitute a Passive Foreign Investment Company (PFIC). Federal income
taxes may be imposed on the Fund upon disposition of PFIC investments.
The Fund will be treated as a single, separate entity for federal income tax
purposes so that income (including capital gains) and losses realized by the
Corporation's other portfolios, if any, will not be combined for tax purposes
with those realized by the Fund.
24
Investment income received by the Fund from sources within foreign countries may
be subject to foreign taxes withheld at the source. The United States has
entered into tax treaties with many foreign countries that entitle the Fund to
reduced tax rates or exemptions on this income. The effective rate of foreign
tax cannot be predicted since the amount of Fund assets to be invested within
various countries is unknown. However, the Fund intends to operate so as to
qualify for treaty-reduced tax rates where applicable.
Unless otherwise exempt, shareholders are required to pay federal income tax on
any dividends and other distributions, including capital gains distributions,
received. This applies whether dividends and distributions are received in cash
or as additional Shares.
If more than 50% of the value of the Fund's assets at the end of the tax year is
represented by stock or securities of foreign corporations, the Fund intends to
qualify for certain Internal Revenue Code stipulations that would allow
shareholders to claim a foreign tax credit or deduction on their U.S. income tax
returns. The Internal Revenue Code may limit a shareholder's ability to claim a
foreign tax credit. Furthermore, shareholders who elect to deduct their portion
of the Fund's foreign taxes rather than take the foreign tax credit must itemize
deductions on their income tax returns.
PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES
In the opinion of Houston, Houston & Donnelly, counsel to the Fund:
- the Fund is subject to the Pennsylvania corporate franchise tax; and
- Fund Shares are exempt from personal property taxes imposed by counties,
municipalities, and school districts in Pennsylvania.
Shareholders are urged to consult their own tax advisers regarding the status of
their accounts under state and local tax laws.
OTHER CLASSES OF SHARES
- --------------------------------------------------------------------------------
Fortress Shares, the other class of shares offered by the Fund, are sold
primarily to customers of financial institutions with an initial sales charge of
1.00%. Fortress Shares are distributed pursuant to a Rule 12b-1 Plan adopted by
the Fund whereby the distributor is paid a fee of up to .25 of 1% and a
shareholder servicing fee of .25 of 1% of the Fortress Shares' average daily net
assets. Fortress Shares are subject to a contingent deferred sales charge of up
to 1.00% under certain circumstances. Investments in Fortress Shares are subject
to a minimum initial investment of $1,500, unless the investment is in a
retirement account, in which case the minimum investment is $50.
The amount of dividends payable to Class A Shares will generally exceed that of
Fortress Shares by the difference between Class Expenses and distribution
expenses borne by shares of each respective class.
The stated advisory fee is the same for both classes of shares.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time the Fund advertises the total return for Class A Shares.
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 gain
distributions. It is calculated by dividing that change by the initial
investment and is expressed as a percentage.
The performance information reflects the effect of the maximum sales load and
other similar non-recurring charges, such as the contingent deferred sales
charge, which, if excluded, would increase the total return.
From time to time, the Fund may advertise the performance of Class A Shares
using certain financial publications and/or compare its performance to certain
indices.
Total return will be calculated separately for Class A Shares and Fortress
Shares. Because Fortress Shares are subject to Rule 12b-1 fees, the total return
for Class A Shares, for the same period may exceed that of Fortress Shares.
WORLD UTILITY FUND
(A PORTFOLIO OF WORLD INVESTMENT SERIES, INC.)
STATEMENT OF ASSETS AND LIABILITIES
MARCH 17, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
- ----------------------------------------------------------------------------------
Cash $100,000
- ---------------------------------------------------------------------------------- --------
LIABILITIES:
- ----------------------------------------------------------------------------------
NET ASSETS for 10,000 Class A Shares of beneficial interest outstanding $100,000
- ---------------------------------------------------------------------------------- --------
NET ASSET VALUE ($100,000 / 10,000 Class A Shares of beneficial interest
outstanding) $ 10.00
- ---------------------------------------------------------------------------------- --------
Computation of Offering Price: Offering Price per Class A Share (100/95.5 of
$10.00)* 10.47
- ---------------------------------------------------------------------------------- --------
Computation of Redemption Proceeds: Redemption Proceeds per
Class A Share (99.5/100 of 10.00)** 9.95
- ---------------------------------------------------------------------------------- --------
</TABLE>
* See "What Shares Cost" in the prospectus.
** See "Redeeming Class A Shares" in the prospectus.
(1) World Investment Series, Inc. (the "Corporation") was established as a
Maryland corporation under Articles of Incorporation dated January 25, 1994,
and has had no operations since that date other than those relating to
organizational matters, including the issuance on March 17, 1994 of 10,000
Class A Shares of the World Utility Fund at $10.00 per Class A Share to
Federated Administrative Services, Inc., the Administrator to the Fund.
Expenses of organization incurred by the Corporation, estimated at $35,000
were borne initially by Administrator. The Corporation has agreed to
reimburse the Administrator for organizational expenses initially borne by
the Administrator during the five year period following the date the
Corporation's registration first became effective.
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
To the Board of Trustees and Shareholders of
WORLD INVESTMENT SERIES, INC.:
We have audited the accompanying statement of assets and liabilities of World
Utillity Fund as of March 17, 1994. This statement of assets and liabilities is
the responsibility of the Corporation's management. Our responsibility is to
express an opinion on this statement of assets and liabilities based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of assets and liabilities is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of assets and
liabilities. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
statement of assets and liabilities presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the statement of assets and liabilities presents fairly, in all
material respects, the net assets of the World Utility Fund as of March 17, 1994
in conformity with generally accepted accounting principles.
ERNST & YOUNG
Pittsburgh, Pennsylvania
March 18, 1994
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
World Utility Fund Federated Investors Tower
Class A Shares Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Investment Adviser
Federated Management Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Custodian
State Street Bank and P.O. Box 8604
Trust Company Boston, Massachusetts 02266-8604
- ------------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
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
Ernst & Young One Oxford Centre
Pittsburgh, Pennsylvania 15219
- ------------------------------------------------------------------------------------------------
</TABLE>
WORLD UTILITY FUND
CLASS A SHARES
PROSPECTUS
A Diversified Portfolio of
World Investment Series, Inc.,
An Open-End,
Management Investment Company
April , 1994
FEDERATED SECURITIES CORP.
(LOGO)
---------------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
4021404A-A (4/94)
WORLD UTILITY FUND
(A PORTFOLIO OF WORLD INVESTMENT SERIES, INC.)
FORTRESS SHARES
PROSPECTUS
The Fortress Shares of World Utility Fund (the "Fund") offered by this
prospectus represent interests in the Fund, which is a diversified investment
portfolio in World Investment Series, Inc. (the "Corporation"), an open-end,
management investment company (a mutual fund).
The Fund's investment objective is to provide total return. The Fund invests
primarily in securities issued by domestic and foreign companies in the
utilities industries.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF ANY
BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK, AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
GOVERNMENT AGENCY. INVESTMENT IN THESE SHARES INVOLVES INVESTMENTS RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
This prospectus contains the information you should read and know before you
invest in Fortress Shares of the Fund. Keep this prospectus for future
reference.
The Fund has also filed a Combined Statement of Additional Information for
Fortress Shares and Class A Shares dated April , 1994, with the Securities and
Exchange Commission. The information contained in the Combined Statement of
Additional Information is incorporated by reference into this prospectus. You
may request a copy of the Combined Statement of Additional Information free of
charge by calling 1-800-235-4669. To obtain other information or make inquiries
about the Fund, contact your financial institution.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus dated April , 1994
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
SUMMARY OF FUND EXPENSES 1
- ------------------------------------------------------
GENERAL INFORMATION 2
- ------------------------------------------------------
FORTRESS INVESTMENT PROGRAM 2
- ------------------------------------------------------
INVESTMENT INFORMATION 3
- ------------------------------------------------------
Investment Objective 3
Investment Policies 3
Investment Considerations 4
Considerations of Utility Securities 4
Electric 5
Telecommunications 6
Gas 6
Water 6
Exchange Rates 6
Foreign Companies 6
U.S. Government Policies 7
Other Investment Practices 7
Foreign Currency Transactions 7
Forward Foreign Currency Exchange
Contracts 7
Repurchase Agreements 7
Lending of Portfolio Securities 8
Restricted and Illiquid Securities 8
When-Issued and Delayed Delivery
Transactions 8
Covered Call Options 8
Investment Limitations 8
NET ASSET VALUE 9
- ------------------------------------------------------
INVESTING IN FORTRESS SHARES 9
- ------------------------------------------------------
Share Purchases 9
Through a Financial Institution 9
Directly By Mail 9
Directly By Wire 9
Minimum Investment Required 10
What Shares Cost 10
Dealer Concession 10
Eliminating the Sales Charge 11
Quantity Discounts and Accumulated
Purchases 11
Letter of Intent 11
Reinvestment Privilege 11
Concurrent Purchases 12
Systematic Investment Program 12
Exchanging Securities for Fund Shares 12
Exchange Privileges 12
Exchanges for Shares of Other Funds
Certificates and Confirmations 12
Dividends and Distributions 13
REDEEMING FORTRESS SHARES 13
- ------------------------------------------------------
Through a Financial Institution 13
Directly by Mail 14
Signatures 14
Receiving Payment 14
Contingent Deferred Sales Charge 14
Systematic Withdrawal Program 15
Accounts with Low Balances 15
WORLD INVESTMENT SERIES, INC. INFORMATION 16
- ------------------------------------------------------
Management of the Corporation 16
Board of Directors 16
Officers and Directors 16
Investment Adviser 19
Advisory Fees 20
Adviser's Background 20
Distribution of Fortress Shares 20
Distribution and Shareholder Services Plans 20
Administrative Arrangements 21
Administration of the Fund 21
Administrative Services 21
Shareholder Services Plan
Custodian 22
Transfer Agent and Dividend
Disbursing Agent 22
Legal Counsel 22
Independent Auditors 22
Brokerage Transactions 22
Expenses of the Fund and Fortress Shares 22
SHAREHOLDER INFORMATION 23
- ------------------------------------------------------
Voting Rights 23
TAX INFORMATION 23
- ------------------------------------------------------
Federal Income Tax 23
Pennsylvania Corporate and Personal
Property Taxes 24
OTHER CLASSES OF SHARES 24
- ------------------------------------------------------
PERFORMANCE INFORMATION 25
- ------------------------------------------------------
ADDRESSES Inside Back Cover
- ------------------------------------------------------
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
FORTRESS SHARES
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)................... 1.00%
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price)......................................................... None
Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds, as applicable)(1).................................... 1.00%
Redemption Fee (as a percentage of amount redeemed, if applicable)............................ None
Exchange Fee.................................................................................. None
ANNUAL FORTRESS SHARES OPERATING EXPENSES*
(As a percentage of projected average net assets)
Management Fee (after waiver)(2).............................................................. 0.75%
12b-1 Fee..................................................................................... 0.25%
Total Other Expenses.......................................................................... 0.52%
Shareholder Servicing Fees......................................................... 0.25%
Total Fortress Shares Operating Expenses(3)............................................... 1.52%
</TABLE>
(1) The contingent deferred sales charge assessed is 1.00% of the lesser of the
original purchase price or the net asset value of shares redeemed within four
years of their purchase date.
(2) The estimated management fee has been reduced to reflect the anticipated
voluntary waiver of a portion of the management fee. The adviser can terminate
this voluntary waiver at any time at its sole discretion. The maximum management
fee is 1.00%.
(3) The Total Fortress Shares Operating Expenses are estimated to be 1.77%
absent the anticipated voluntary waiver of a portion of the management fee.
* TOTAL FORTRESS SHARES OPERATING EXPENSES ARE ESTIMATED BASED ON AVERAGE
EXPENSES EXPECTED TO BE INCURRED DURING THE FISCAL YEAR ENDING MARCH 31, 1995.
DURING THE COURSE OF THIS PERIOD, EXPENSES MAY BE MORE OR LESS THAN THE AVERAGE
AMOUNT SHOWN.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF FORTRESS SHARES OF THE FUND
WILL BEAR, EITHER DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE
VARIOUS COSTS AND EXPENSES, SEE "INVESTING IN FORTRESS SHARES" AND "WORLD
INVESTMENT SERIES, INC. INFORMATION." Wire-transferred redemptions of less than
$5,000 may be subject to additional fees.
Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charge permitted under the rules of the National
Association of Securities Dealers, Inc.
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years
- ------------------------------------------------------------------------------------- ------ -------
<S> <C> <C>
You would pay the following expenses on a $1,000 investment assuming
(1) 5% annual return and (2) redemption at the end of each time period............. $ 36 $69
You would pay the following expenses on the same investment, assuming no
redemption......................................................................... $ 25 $58
</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. THIS
EXAMPLE IS BASED ON ESTIMATED DATA FOR THE FUND'S FISCAL YEAR ENDING MARCH 31,
1995.
The information set forth in the foregoing table and example relates only to
Fortress Shares of the Fund. The Fund also offers another class of shares called
Class A Shares. Fortress Shares and Class A Shares are subject to certain of the
same expenses; however, Class A Shares are subject to a maximum sales load of
4.50% and may be subject to a contingent deferred sales charge, but are not
subject to a 12b-1 fee. See "Other Classes of Shares".
GENERAL INFORMATION
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The Corporation was established as a corporation under the laws of the state of
Maryland on January 25, 1994. The Corporation's address is Liberty Center,
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779. The Articles of
Incorporation permit the Corporation to offer separate series of shares
representing interests in separate portfolios of securities. The shares in any
one portfolio may be offered in separate classes. With respect to this Fund, as
of the date of this prospectus, the Board of Directors ("Directors") have
established two classes of shares, known as Fortress Shares and Class A Shares.
This prospectus relates only to Fortress Shares ("Shares") of the Corporation's
portfolio known as World Utility Fund.
Shares of the Fund are designed to give institutions and individuals a
convenient means of seeking total return without undue risk through a
professionally managed, diversified portfolio comprised primarily of foreign and
domestic utility securities. The Fund is not intended to provide a complete
investment program for an investor. A minimum initial investment of $1,500 is
required, unless the investment is in a retirement account, in which case the
minimum investment is $50.
In general, Shares are sold at net asset value plus an applicable sales charge
and are redeemed at net asset value. However, a contingent deferred sales charge
is imposed on Shares, other than Shares purchased through reinvestment of
dividends, which are redeemed within one to four years of their purchase date.
For a more complete description, see "Redeeming Fortress Shares."
FORTRESS INVESTMENT PROGRAM
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This class of shares is a member of a family of funds, collectively known as the
Fortress Investment Program. The other funds in the Program are:
AMERICAN LEADERS FUND, INC. (FORTRESS SHARES ONLY), providing growth of
capital and income through high-quality stocks;
CALIFORNIA MUNICIPAL INCOME FUND (FORTRESS SHARES ONLY), providing current
income exempt from federal regular income tax and California personal
income taxes;
FORTRESS ADJUSTABLE RATE U.S. GOVERNMENT FUND, INC., providing current
income consistent with lower volatility of principal through a diversified
portfolio of adjustable and floating rate mortgage securities which are
issued or guaranteed by the U.S. government, its agencies or
instrumentalities;
FORTRESS BOND FUND, providing current income primarily through high-quality
corporate debt;
FORTRESS MUNICIPAL INCOME FUND, providing a high level of current income
generally exempt from federal regular income tax by investing primarily in
a diversified portfolio of municipal bonds;
FORTRESS UTILITY FUND, providing high current income and moderate
appreciation primarily through equity and debt securities of utility
companies;
GOVERNMENT INCOME SECURITIES, INC., providing current income through
long-term U.S. government securities;
LIBERTY EQUITY INCOME FUND, INC. (FORTRESS SHARES ONLY), an equity fund
investing primarily in stocks which have a history of regular dividends;
LIMITED TERM FUND (FORTRESS SHARES ONLY), providing a high level of current
income consistent with minimum fluctuation in principal value;
LIMITED TERM MUNICIPAL FUND (FORTRESS SHARES ONLY), providing a high level
of current income which is exempt from federal regular income tax
consistent with the preservation of capital;
MONEY MARKET MANAGEMENT, INC., providing current income consistent with
stability of principal through high-quality money market instruments;
NEW YORK MUNICIPAL INCOME FUND (FORTRESS SHARES ONLY), providing current
income exempt from federal regular income tax, New York personal income
taxes, and New York City income taxes; and
OHIO MUNICIPAL INCOME FUND (FORTRESS SHARES ONLY), providing current income
exempt from federal regular income tax and Ohio personal taxes.
Each of the funds may also invest in certain other types of securities as
described in each fund's prospectus.
The Fortress Investment Program provides flexibility and diversification for
investor's long-term investment planning. It enables an investor to meet the
challenges of changing market conditions by offering convenient exchange
privileges which give access to various investment vehicles, and by providing
the investment services of proven, professional investment advisers.
INVESTMENT INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide total return. While there is
no assurance that the Fund will achieve its investment objective, it endeavors
to do so by following the policies described in this prospectus. Unless
indicated otherwise, the investment objective and policies may be changed by the
Directors without the approval of shareholders. Shareholders will be notified
before any material changes in these policies become effective.
INVESTMENT POLICIES
The Fund will seek to achieve its investment objective by investing at least 65%
of its total assets in securities issued by domestic and foreign companies in
the utilities industries. For these purposes, companies will be considered to be
in the utilities industries if, in the opinion of Federated Management ("the
Investment Adviser"), they are primarily engaged in the ownership or operation
of facilities used to generate, transmit, or distribute electricity, telephone
communications, cable and other pay television services, radio-telephone
communications, gas, or water.
The Fund's portfolio will at all times include issuers located in at least three
countries, although the Investment Adviser expects to invest in more than three
countries. It is expected that, under normal circumstances, the assets of the
Fund invested in U.S. securities will be higher than that invested in securities
of any other single country. At times, the Fund may have more than 65% of its
total assets invested in foreign securities.
The Fund may invest up to 35% of its total assets in securities of issuers that
are outside the utilities industries. Such investments may consist of common
stocks, debt securities, preferred stocks, or other securities issued by either
U.S. or foreign companies, governments, or governmental instrumentalities. Some
of these issuers may be in industries related to the utilities industries and,
therefore, may be subject to similar considerations.
Debt obligations in the portfolio, at the time they are purchased, generally
will be limited to those which fall in one of the following categories: (i)
rated BBB or better by Standard & Poor's Corporation or Baa by Moody's Investors
Service, Inc., or (ii) determined by the Investment Adviser to be of investment
grade and not rated by either of the aforementioned rating services. (The
Directors do not consider this limitation to apply to debt securities of an
issuer convertible into stock of that issuer. The lowest acceptable rating for
the Fund's investment in convertible securities is CCC by Standard & Poor's
Corporation or Caa by Moody's Investors Service, Inc.) Bonds rated BBB by
Standard & Poor's Corporation or Baa by Moody's Investors Service, Inc. 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. However, the Fund may invest up to 5%
of its assets in lower-rated fixed income securities (commonly known as
"high-yield, high-risk" bonds) having a minimum rating no lower than CCC by
Standard & Poor's Corporation or Caa by Moody's Investors Service, Inc. In the
event the rating on an issue held in the Fund's portfolio is changed by the
ratings services (or, for an unrated issue, in the determination of the
Investment Adviser), such event will be considered by the Investment Adviser in
its evaluation of the overall investment merits of that security, but will not
necessarily result in the automatic sale of the security. A description of the
rating categories is contained in the Appendix to the Combined Statement of
Additional Information.
For temporary defensive purposes and to maintain liquidity, the Fund may invest
in short-term money market instruments including securities of other investment
companies, certificates of deposit, obligations issued or guaranteed by the
United States government or its agencies or instrumentalities, commercial paper
rated not lower than A-1 by Standard & Poor's Corporation or Prime-1 by Moody's
Investors Service, Inc. or repurchase agreements.
INVESTMENT CONSIDERATIONS
The Fund will attempt to meet its investment objective by being at least 65%
invested in securities issued by companies in the domestic and foreign utilities
industries. There exist certain risks associated with the utilities industries
and with foreign securities of which investors in the Fund should be aware.
CONSIDERATIONS OF UTILITY SECURITIES. There are certain risks and
considerations affecting utility companies, and the holders of utility company
securities, which an investor should take into account when investing in those
securities. Factors which may adversely affect utility companies include:
difficulty in financing large construction programs during inflationary periods;
technological innovations which may cause existing plants, equipment, or
products to become less competitive or obsolete; the impact of natural or
man-made disasters (especially on regional utilities); increased costs or
reductions in production due to the unavailability of appropriate types of fuel;
seasonally or occasionally reduced availability or higher cost of natural gas;
and reduced demand due to energy conservation among consumers. Furthermore, the
revenues of domestic and foreign utility companies generally reflect the
economic growth and developments in the geographic areas in which they do
business.
In addition, most utility companies in the United States and in foreign
countries are subject to government regulation. Generally, the purpose of such
regulation is to ensure desirable levels of service and adequate capacity to
meet public demand. To this end, prices are often regulated to enable consumers
to obtain service at what is perceived to be a fair price, while attempting to
provide utility companies with a rate of return sufficient to attract capital
investment necessary for continued operation and necessary growth. Recently,
utility regulators have permitted utilities to diversify outside of their
original geographic regions and their traditional lines of business. While the
Investment Adviser believes that these opportunities will permit certain utility
companies to earn more than their traditional regulated rates of return, other
companies may be forced to defend their core businesses and may be less
profitable. Of course, there can be no assurance that all of the regulatory
policies described in this paragraph will continue in the future.
In addition to the effects of regulation described in the previous paragraph,
utility companies may also be adversely affected by the following regulatory
considerations: the development and implementation of a national energy policy;
the differences between regulatory policies of different jurisdictions (or
different regulators which have concurrent jurisdiction); shifts in regulatory
policies; adequacy of rate increases; and future regulatory legislation.
Foreign utility companies may encounter different risks and opportunities than
those located in the United States. Foreign utility companies may be more
heavily regulated than their United States counterparts. Many foreign utility
companies currently use fuels which cause more pollution than fuels used by
United States utilities; in the future, it may be necessary for such foreign
utility companies to invest heavily in pollution control equipment or otherwise
meet pollution restrictions. Rapid growth in certain foreign economies may
encourage the growth of utility industries in those countries. Although many
foreign utility companies are currently government-owned, the Investment Adviser
believes that it is likely that some foreign governments will seek to
"privatize" their utility companies, i.e., transfer ownership to private
investors.
In addition to the foregoing considerations which affect most utility companies,
there are specific considerations which affect specific utility industries:
ELECTRIC. The electric utility industry is made up of companies that are
engaged in the generation, transmission, and sale of electric energy.
Domestic electric utility companies have generally been favorably affected
by lower fuel and financing costs and the completion of major construction
programs. Some electric utilities are able to sell power outside of their
traditional geographic areas. Electric utility companies have historically
been subject to increases in fuel and other operating costs, high interest
costs on borrowings needed for capital construction programs, compliance
with environmental and safety regulations, and changes in the regulatory
climate.
In the United States, the construction and operation of nuclear power
facilities is subject to a high degree of regulatory oversight by the
Nuclear Regulatory Commission and state agencies with concurrent
jurisdiction. In addition, the design, construction, licensing, and
operation of nuclear power facilities have been subject to lengthy delays
and unanticipated costs due to changes in regulatory policy, regional
political actions, and lawsuits. Furthermore, during rate authorizations,
utility regulators may disallow the inclusion in electric rates of the
higher operating costs and
capital expenditures resulting from these delays and unanticipated costs,
including the costs of a nuclear facility which a utility company may never
be able to use.
TELECOMMUNICATIONS. The telephone industry is large and highly
concentrated. The greatest portion of this segment is comprised of
companies which distribute telephone services and provide access to the
telephone networks. While many telephone utility companies have diversified
into other businesses in recent years, the profitability of telephone
utility companies could be adversely affected by increasing competition,
technological innovations, and other structural changes in the industry.
Cable television companies are typically local monopolies, subject to
scrutiny by both utility regulators and municipal governments. Emerging
technologies and legislation encouraging local competition are combining to
threaten these monopolies and may slow future growth rates of these
companies. The radio telecommunications segment of this industry, including
cellular telephone, is in its early developmental phases and is
characterized by emerging, rapidly growing companies.
GAS. Gas transmission and distribution companies are undergoing
significant changes. In the United States, the Federal Energy Regulatory
Commission is reducing its regulation of interstate transmission of gas.
While gas utility companies have in the recent past been adversely affected
by disruptions in the oil industry, increased concentration, and increased
competition, the Investment Adviser believes that environmental
considerations should benefit the gas industry in the future.
WATER. Water utility companies purify, distribute, and sell water. This
industry is highly fragmented because most of the water supplies are owned
by local authorities. Water utility companies are generally mature and are
experiencing little or no per capita volume growth. The Investment Adviser
believes that favorable investment opportunities may result if anticipated
consolidation and foreign participation in this industry occur.
The Fund occasionally takes advantage of the unusual opportunities for higher
returns available from investing in developing countries. These investments,
however, carry considerably more volatility and risk because they are associated
with less mature economies and less stable political systems.
EXCHANGE RATES. Foreign securities are denominated in foreign currencies.
Therefore, the value in U.S. dollars of the Fund's assets and income may be
affected by changes in exchange rates and regulations. Although the Fund values
its assets daily in U.S. dollars, it will not convert its holding of foreign
currencies to U.S. dollars daily. When the Fund converts its holdings to another
currency, it may incur conversion costs. Foreign exchange dealers realize a
profit on the difference between the prices at which they buy and sell
currencies.
FOREIGN COMPANIES. Other differences between investing in foreign and U.S.
companies include: less publicly available information about foreign companies;
the lack of uniform financial accounting standards applicable to foreign
companies; less readily available market quotations on foreign companies;
differences in government regulation and supervision of foreign stock exchanges,
brokers, listed companies, and banks; generally lower foreign stock market
volume; the likelihood that foreign securities may be less liquid or more
volatile; foreign brokerage commissions may be higher; unreliable mail service
between countries; and political or financial changes which adversely affect
investments in some countries, and difficulties which may be encountered in
obtaining or enforcing a court judgment abroad.
U.S. GOVERNMENT POLICIES. In the past, U.S. government policies have
discouraged or restricted certain investments abroad by investors such as the
Fund. Although the Fund is unaware of any current restrictions, investors are
advised that these policies could be reinstituted.
OTHER INVESTMENT PRACTICES
FOREIGN CURRENCY TRANSACTIONS. The Fund will enter into foreign currency
transactions to obtain the necessary currencies to settle securities
transactions. Currency transactions may be conducted either on a spot or cash
basis at prevailing rates or through forward foreign currency exchange
contracts.
The Fund may also enter into foreign currency transactions to protect Fund
assets against adverse changes in foreign currency exchange rates or exchange
control regulations. Such changes could unfavorably affect the value of Fund
assets which are denominated in foreign currencies, such as foreign securities
or funds deposited in foreign banks, as measured in U.S. dollars. Although
foreign currency transactions may be used by the Fund to protect against a
decline in the value of one or more currencies, such efforts may also limit any
potential gain that might result from a relative increase in the value of such
currencies and might, in certain cases, result in losses to the Fund.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. A forward foreign currency
exchange contract ("forward contract") is an obligation to purchase or sell an
amount of a particular currency at a specific price and on a future date agreed
upon by the parties.
Generally, no commission charges or deposits are involved. At the time the Fund
enters into a forward contract, Fund assets with a value equal to the Fund's
obligation under the forward contract are segregated on the Fund's records and
are maintained until the contract has been settled. The Fund will generally
enter into a forward contract to provide the proper currency to settle a
securities transaction at the time the transaction occurs ("trade date"). The
period between trade date and settlement date will vary between twenty-four
hours and thirty days, depending upon local custom.
The Fund may also protect against the decline of a particular foreign currency
by entering into a forward contract to sell an amount of that currency
approximating the value of all or a portion of the Fund's assets denominated in
that currency ("hedging"). The success of this type of short-term hedging
strategy is highly uncertain due to the difficulties of predicting short-term
currency market movements and of precisely matching forward contract amounts and
the constantly changing value of the securities involved. Although the
Investment Adviser will consider the likelihood of changes in currency values
when making investment decisions, the Investment Adviser believes that it is
important to be able to enter into forward contracts when it believes the
interests of the Fund will be served. The Fund will not enter into forward
contracts for hedging purposes in a particular currency in an amount in excess
of the Fund's assets denominated in that currency. No more than 30% of the
Fund's assets will be committed to forward contracts for hedging purposes at any
time. (This restriction does not include forward contracts entered into to
settle securities transactions.)
REPURCHASE AGREEMENTS. Certain securities in which the Fund invests may be
purchased pursuant to repurchase agreements. Repurchase agreements are
arrangements in which banks, broker/dealers, and other recognized financial
institutions sell U.S. government securities or other securities to the Fund and
agree at the time of sale to repurchase them at a mutually agreed upon time and
price. To the
extent that the 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.
LENDING OF PORTFOLIO SECURITIES. In order to generate additional income, the
Fund may lend its portfolio securities to broker/dealers, banks, or other
institutional borrowers of securities. The Fund will limit the amount of
portfolio securities it may lend to not more than one-third of its total assets.
The Fund will only enter into loan arrangements with broker/dealers, banks, or
other institutions which the Investment Adviser has determined are creditworthy
under guidelines established by the Fund's Board of Directors and will receive
collateral in cash or United States government securities that will be
maintained in an amount equal to at least 100% of the current market value of
the securities loaned.
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 law. 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.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase securities
on a when-issued or delayed delivery basis. In when-issued and delayed delivery
transactions, the Fund relies on the seller to complete the transaction. The
seller's failure may cause the Fund to miss a price or yield considered to be
advantageous.
COVERED CALL OPTIONS. The Fund may also write call options on all or any
portion of its portfolio to generate income for the Fund. Call options written
by the Fund give the holder the right to buy the underlying securities of the
Fund at the stated exercise price. The Fund will write call options only on
securities either held in its portfolio or for which it has the right to obtain
without payment of further consideration or for which it has segregated cash in
the amount of any additional consideration. The call options which the Fund
writes and sells must be listed on a recognized options exchange. The Fund's
investment in call options shall not exceed 5% of the Fund's total assets.
INVESTMENT LIMITATIONS
The Fund will not:
- with respect to 75% of its total assets, invest more than 5% of its total
assets in the securities of any one issuer, except that this restriction
does not apply to cash and cash items, repurchase agreements, and
securities issued or guaranteed by the United States government or its
agencies or instrumentalities, or acquire more than 10% of the
outstanding voting securities of any one issuer;
- borrow money, issue senior securities, or pledge assets, except that
under certain circumstances the Fund may borrow money and engage in
reverse repurchase transactions in amounts up to one-third of the value
of its total assets, including the amounts borrowed, and pledge up to 10%
of the value of those assets to secure such borrowings.
The above investment limitations cannot be changed without shareholder approval.
The following limitations, however, may be changed by the Directors without the
approval of shareholders. Shareholders will be notified before any material
change in this limitation becomes effective.
The Fund will not invest more than 25% of its total assets in securities of
companies engaged principally in any one industry other than the utilities
industry, except that this restriction does not apply to cash or cash items and
securities issued or guaranteed by the United States government or its agencies
or instrumentalities.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The Fund's net asset value per Share fluctuates. The net asset value for Shares
is determined by adding the interest of the Fortress Shares in the market value
of all securities and other assets of the Fund, subtracting the interest of the
Fortress Shares in the liabilities of the Fund and those attributable to the
Fortress Shares, and dividing the remainder by the number of Fortress Shares
outstanding. The net asset value for Fortress Shares may differ from that of
Class A Shares due to the variance in daily net income realized by each class.
Such variance will reflect only accrued net income to which the shareholders of
a particular class are entitled.
INVESTING IN FORTRESS SHARES
- --------------------------------------------------------------------------------
SHARE PURCHASES
Shares are sold on days on which the New York Stock Exchange is open. Shares may
be purchased through a financial institution who has a sales agreement with the
distributor or directly from the distributor, Federated Securities Corp. either
by mail or by wire once an account has been established. The Fund reserves the
right to reject any purchase request.
THROUGH A FINANCIAL INSTITUTION. An investor may call his financial institution
(such as a bank or an investment dealer) to place an order to purchase Shares.
Orders through a financial institution are considered received when the Fund is
notified of the purchase order. It is the financial institution's responsibility
to transmit orders promptly. 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.
DIRECTLY BY MAIL. An investor may place an order to purchase Shares directly by
mail from the distributor once an account has been established. To do so, mail a
check made payable to World Utility Fund-Fortress Shares to Federated Services
Company, c/o State Street Bank and Trust Company, P.O. Box 8604, Boston, MA
02266-8604.
Purchases by mail are considered received after payment by check is converted by
State Street Bank and Trust Company ("State Street Bank") into federal funds.
This is generally the next business day after State Street Bank receives the
check.
BY WIRE. To purchase Shares directly from the distributor by wire once an
account has been established, call the Fund. All information needed will be
taken over the telephone, and the order is considered received when State
Street Bank receives payment by wire. Federal funds should be wired as
follows: State Street Bank and Trust Company, Boston, Massachusetts 02105;
Attention:
EDGEWIRE; For Credit to: World Utility Fund--Fortress Shares; Fund Number
(this number can be found on the account statement or by contacting the
Fund); Group Number or Order Number; Nominee or Institution Name; ABA
Number . Shares cannot be purchased by wire on Columbus Day, Veteran's
Day, or Martin Luther King Day.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment in Shares is $1,500 unless the investment is in a
retirement plan, in which case the minimum initial investment is $50. Subsequent
investments must be in amounts of at least $100, except for retirement plans,
which must be in amounts of at least $50.
WHAT SHARES COST
Shares are sold at their net asset value next determined after an order is
received, plus a sales charge of 1% of the offering price (which is 1.01% of the
net amount invested). There is no sales charge for purchases of $1 million or
more. In addition, no sales charge is imposed for Shares purchased through bank
trust departments or investment advisers registered under the Investment
Advisers Act of 1940 purchasing on behalf of their clients, or by sales
representatives, Directors, and employees of the Fund, Federated Management, and
Federated Securities Corp., or their affiliates, or any investment dealer who
has a sales agreement with Federated Securities Corp., their spouses and
children under age 21, or any trusts or pension or profit-sharing plans for
these persons. Unaffiliated institutions through whom Shares are purchased may
charge fees for services provided which may be related to the ownership of Fund
Shares. This prospectus should, therefore, be read together with any agreement
between the customer and the institution with regard to services provided, the
fees charges for these services, and any restriction and limitation imposed.
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; or (iii) the following
holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
Under certain circumstances, described under "Redeeming Fortress Shares,"
shareholders may be charged a contingent deferred sales charge by the
distributor at the time Shares are redeemed.
DEALER CONCESSION. For sales of Shares, broker/dealers will normally receive
100% of the applicable sales charge. Any portion of the sales charge which is
not paid to a broker/dealer will be retained by the distributor. However, from
time to time, and at the sole discretion of the distributor, all or a part of
that portion may be paid to a dealer. The sales charge for Shares sold other
than through registered broker/dealers will be retained by Federated Securities
Corp. Federated Securities Corp. 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 in connection with the initiation of customer accounts and
purchases of Shares.
ELIMINATING THE SALES CHARGE
The sales charge can be eliminated on the purchase of Shares through:
- quantity discounts and accumulated purchases;
- signing a 13-month letter of intent;
- using the reinvestment privilege; or
- concurrent purchases
QUANTITY DISCOUNTS AND ACCUMULATED PURCHASES. There is no sales charge for
purchases of $1 million or more. The Fund will combine purchases of Shares made
on the same day by the investor, the investor's spouse, and the investor's
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 $900,000 and he
purchases $100,000 more at the current public offering price, there will be no
charge on the additional purchase. The Fund will also combine purchases for the
purpose of reducing the contingent deferred sales charge imposed on some Shares
redemptions. For example, if a shareholder already owns Shares having a current
value at public offering price of $1 million and purchases an additional $1
million at the current public offering price, the applicable contingent deferred
sales charge would be reduced to 0.50% of those additional Shares. For more
information on the levels of contingent deferred sales charges and holding
periods, see the section entitled "Contingent Deferred Sales Charge."
To receive the sales charge elimination and/or the contingent deferred sales
charge reduction, Federated Securities Corp. must be notified by the shareholder
in writing or by his financial institution at the time the purchase is made that
Shares are already owned or that purchases are being combined. The Fund will
eliminate the sales charge after it confirms the purchases.
LETTER OF INTENT. If a shareholder intends to purchase at least $1 million of
Shares over the next 13 months, the sales charge may be eliminated by signing a
letter of intent to that effect. This letter of intent includes a provision for
a sales charge elimination depending on the amount actually purchased within the
13-month period and a provision for the Fund's custodian to hold 1.00% of the
total amount intended to be purchased in escrow (in Shares) until such purchase
is completed.
The 1.00% 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,
which must be $1 million or more Shares, is not purchased. In this event, an
appropriate number of escrowed Shares may be redeemed in order to realize the
1.00% sales charge.
This letter of intent will not obligate the shareholder to purchase Shares. This
letter may be dated as of a prior date to include any purchases made within the
past 90 days (purchases within the prior 90 days may be used to fulfill the
requirements of the letter of intent; however, the sales load on such purchases
will not be adjusted to reflect a lower sales load).
REINVESTMENT PRIVILEGE. If Shares in the Fund have been redeemed, the
shareholder has a one-time right, within 120 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 his financial institution of the reinvestment in order to receive this
elimination of the sales charge. If the shareholder redeems his Shares in the
Fund, there may be tax consequences.
CONCURRENT PURCHASES. For purposes of qualifying for a sales charge
elimination, a shareholder has the privilege of combining concurrent purchases
of two or more funds in the Fortress Investment Program, the purchase price of
which includes a sales charge. For example, if a shareholder concurrently
invested $400,000 in one of the other Fortress Funds, and $600,000 in Shares,
the sales charge would be eliminated.
To receive this sales charge elimination, Federated Securities Corp. must be
notified by the shareholder in writing or by his financial institution at the
time the concurrent purchases are made. The Fund will reduce the sales charge
after it confirms the purchases.
SYSTEMATIC INVESTMENT PROGRAM
Once a Fund account has been opened, shareholders may add to their investment on
a regular basis. Under this program, funds may be automatically withdrawn
periodically from the shareholder's checking account and invested in Shares at
the net asset value next determined after an order is received by State Street
Bank, plus the 1.00% sales charge for purchases under $1 million. A shareholder
may apply for participation in this program through Federated Securities Corp.
or his financial institution.
EXCHANGING SECURITIES FOR FUND SHARES
Investors may exchange certain securities or a combination of securities and
cash for Shares. The securities and any cash must have a market value of at
least $25,000. From time to time the Fund will prepare a list of securities
which may be eligible for acceptance and furnish this list to brokers upon
request. Securities accepted by the Fund are valued in the same manner as the
Fund values its portfolio securities. Investors wishing to exchange securities
should first contact their investment broker, who will contact Federated
Securities Corp.
EXCHANGE PRIVILEGES
Shares may be exchanged for shares in other Fortress Funds at net asset value
without a sales charge or a contingent deferred sales charge.
Shares may also be exchanged for shares in other Federated Funds which are
advised by subsidiaries or affiliates of Federated Investors. With the exception
of exchanges into other Fortress Funds, such exchanges will be subject to a
contingent deferred sales charge and possibly a sales charge.
Shareholders using this privilege must exchange Shares having a net asset value
which at least meets the minimum investment required for the fund into which the
exchange is being made. A shareholder may obtain information on the exchange
privilege, and may obtain prospectuses for other Fortress Funds and Federated
Funds by calling Federated Securities Corp. or his financial institution.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Fund, Federated Services Company maintains a Share
account for each shareholder. Share certificates are not issued unless requested
on the application or by contacting the Fund.
Detailed confirmations of each purchase or redemption are sent to each
shareholder. Quarterly statements are sent to report dividends paid during the
quarter.
DIVIDENDS AND DISTRIBUTIONS
Dividends are declared and paid quarterly to all shareholders invested in the
Fund on the record date. Distributions of any net realized capital gains will be
made at least once every twelve months. Dividends and distributions are
automatically reinvested in additional Shares on the payment date, at the
ex-dividend date net asset value without a sales charge, unless shareholders
request cash payments on the new account form or by writing to the transfer
agent. All shareholders on the record date are entitled to the dividend. If
Shares are redeemed or exchanged prior to the record date or purchased after the
record date, those Shares are not entitled to that quarter's dividend.
REDEEMING FORTRESS SHARES
- --------------------------------------------------------------------------------
The Fund redeems Shares at their net asset value next determined after State
Street Bank receives the redemption request. Redemptions will be made on days on
which the Fund computes its net asset value. Redemption requests must be
received in proper form and can be made through a financial institution or
directly from the Fund by written request.
THROUGH A FINANCIAL INSTITUTION
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. If at
any time the Fund shall determine it necessary to terminate or modify this
method of redemption, shareholders will be promptly notified.
Before a financial institution may request redemption by telephone on behalf of
a shareholder, an authorization form permitting the Fund to accept telephone
requests must first 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, another
method of redemption, such as "Directly by Mail," should be considered.
DIRECTLY BY MAIL
Shareholders may also redeem Shares by sending a written request to Federated
Services Company, c/o State Street Bank, P.O. Box 8604, Boston, MA 02266-8604.
The written request must include the shareholder's name, the Fund name and class
of shares name, the account number, the Share or dollar amount to be redeemed,
and should be signed exactly as Shares are registered.
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 the Fund 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 ("BIF"), which is administered by the Federal Deposit
Insurance Corporation ("FDIC");
- a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchanges;
- a savings bank or savings and loan association whose deposits are insured
by the Savings Association Insurance Fund ("SAIF"), which is administered
by the FDIC; or
- any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and its transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Fund may elect in the future to
limit eligible signature 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.
RECEIVING PAYMENT. A check for the proceeds is mailed within one business day,
but in no event more than seven days, after receipt of a proper written
redemption request.
CONTINGENT DEFERRED SALES CHARGE
Shareholders redeeming Shares from their Fund accounts within certain time
periods from the purchase dates of those Shares will be charged a contingent
deferred sales charge by the Fund's distributor of the lesser of the original
purchase price or the net asset value of the Shares redeemed as follows:
<TABLE>
<CAPTION>
CONTINGENT DEFERRED
AMOUNT OF PURCHASE SHARES HELD SALES CHARGE
- ------------------------- ------------------ -------------------
<S> <C> <C>
Up to $1,999,999 less than 4 years 1%
$2,000,000 to $4,999,999 less than 2 years .50%
$5,000,000 or more less than 1 year .25%
</TABLE>
In instances in which Shares have been acquired in exchange for shares in other
Fortress Funds, (i) the purchase price of the shares when originally purchased
and (ii) the time period which the shares are held will run from the date of the
original purchase. The contingent deferred sales charge will not be
imposed on Shares acquired through the reinvestment of dividends or
distributions of short-term or long-term capital gains. In computing the amount
of contingent deferred sales charge for accounts with shares subject to a single
holding period, if any, redemptions are deemed to have occurred in the following
order: 1) first of Shares acquired through the reinvestment of dividends and
long-term capital gains, 2) second of purchases of Shares occurring prior to the
number of years necessary to satisfy the applicable holding period, and 3)
finally of purchases of Shares occurring within the current holding period.
The contingent deferred sales charge will not be imposed when a redemption
results from a tax-free return under the following circumstances: (i) a total or
partial distribution from a qualified plan, other than an IRA, Keogh Plan, or a
custodial account, following retirement; (ii) a total or partial distribution
from an IRA, Keogh Plan, or a custodial account, after the beneficial owner
attains age 59 1/2; or (iii) from the death or total and permanent disability of
the beneficial owner. The exemption from the contingent deferred sales charge
for qualified plans, an IRA, Keogh Plan or a custodial account does not extend
to account transfers, rollovers, and other redemptions made for purposes of
reinvestment. Contingent deferred sales charges are not charges in connection
with exchanges of Shares for shares in other Fortress Funds, or in connection
with redemptions by the Fund of accounts with low balances. Shares of the Fund
originally purchased through a bank trust department or investment adviser
registered under the Investment Advisers Act of 1940 are not subject to the
contingent deferred sales charge, to the extent that no payment was advanced for
purchases made by such entities. For more information, see "Administrative
Arrangements."
SYSTEMATIC WITHDRAWAL PROGRAM
Shareholders who desire to receive monthly or quarterly payments of a
predetermined amount may take advantage of the Systematic Withdrawal Program.
Under this program, Shares are redeemed to provide for periodic withdrawal
payments in an amount directed by the shareholder; the minimum withdrawal amount
is $100. Depending upon the amount of the withdrawal payments, the amount of
dividends paid and capital gains distributions with respect to Shares, and the
fluctuation of the net asset value of Shares redeemed under this program,
redemptions may reduce, and eventually deplete, the shareholder's investment in
Shares. For this reason, payments under this program should not be considered as
yield or income on the shareholder's investment in Shares. To be eligible to
participate in this program, a shareholder must have an account value of at
least $10,000 at current offering price.
A shareholder may apply for participation in this program through Federated
Securities Corp. Due to the fact that Shares are sold with a sales charge, it is
not advisable for shareholders to be purchasing Shares while participating in
this program.
Contingent deferred sales charges are charged for Shares redeemed through this
program within four years of their purchase dates.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Fund may
redeem Shares in any account, except retirement plans, and pay the proceeds to
the shareholder if the account balance falls below the required minimum value of
$1,500. This requirement does not apply, however, if the balance falls below
$500 because of changes in the Fund's net asset value. 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.
WORLD INVESTMENT SERIES, INC. INFORMATION
- --------------------------------------------------------------------------------
MANAGEMENT OF THE CORPORATION
BOARD OF DIRECTORS. The Corporation is managed by a Board of Directors. The
Directors are responsible for managing the Corporation's business affairs and
for exercising all the Corporation's powers except those reserved for the
shareholders. An Executive Committee of the Board of Directors handles the
Board's responsibilities between meetings of the Board.
OFFICERS AND DIRECTORS. Officers and Directors are listed with their addresses,
principal occupations and present positions, including any affiliation with
Federated Investors, Federated Management, Federated Securities Corp., Federated
Administrative Services, and the Funds described in the Statement of Additional
Information.
<TABLE>
<CAPTION>
POSITION WITH PRINCIPAL OCCUPATION
NAME AND ADDRESS THE CORPORATION DURING PAST FIVE YEARS
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
John F. Donahue+* Chairman and Chairman and Trustee, Federated Investors; Chairman and Trustee, Federated
Federated Investors Director Advisers, Federated Management, and Federated Research; Director, AEtna Life
Tower and Casualty Company; Chief Executive Officer and Director, Trustee, or
Pittsburgh, PA Managing General Partner of the Funds; formerly, Director, The Standard Fire
Insurance Company. Mr. Donahue is the father of J. Christopher Donahue,
Vice-President of the Corporation.
- ------------------------------------------------------------------------------------------------------------------
John T. Conroy, Jr. Director President, Investment Properties Corporation; Senior Vice-President, John R.
Wood/IPC Commercial Wood and Associates, Inc., Realtors; President, Northgate Village Department
Department and Corporation; John R. Wood Partner or Trustee in private real estate ventures
Associates, Inc., Realtors; in Southwest Florida; Director, Trustee, or Managing General Partner of the
3255 Tamiami Trail North Funds; formerly, President, Naples Property Management, Inc.
Naples, FL
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
POSITION WITH PRINCIPAL OCCUPATION
NAME AND ADDRESS THE CORPORATION DURING PAST FIVE YEARS
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
William J. Copeland Director Director and Member of the Executive Committee, Michael Baker, Inc.;
One PNC Plaza-- Director, Trustee, or Managing General Partner of the Funds; formerly, Vice
23rd Floor Chairman and Director, PNC Bank, N.A. and PNC Financial Corp and Director,
Pittsburgh, PA Ryan Homes, Inc.
- ------------------------------------------------------------------------------------------------------------------
James E. Dowd Director Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director,
571 Hayward Mill Road Trustee, or Managing General Partner of the Funds; formerly, Director, Blue
Concord, MA Cross of Massachusetts, Inc.
- ------------------------------------------------------------------------------------------------------------------
Lawrence D. Ellis, M.D. Director Hematologist, Oncologist, and Internist, Presbyterian and Montefiore
3471 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.+ Director Attorney-at-law; Partner, Meyer and Flaherty; Director, Eat'N Park
5916 Penn Mall Restaurants, Inc., and Statewide Settlement Agency, Inc.; Director, Trustee,
Pittsburgh, PA or Managing General Partner of the Funds; formerly, Counsel, Horizon
Financial, F.A., Western Region.
- ------------------------------------------------------------------------------------------------------------------
Peter E. Madden Director Consultant; State Representative, Commonwealth of Massachusetts; Director,
225 Franklin Street Trustee, or Managing General Partner of the Funds; formerly, President,
Boston, MA State Street Bank and Trust Company and State Street Boston Corporation and
Trustee, Lahey Clinic Foundation, Inc.
- ------------------------------------------------------------------------------------------------------------------
Gregor F. Meyer Director Attorney-at-law; Partner, Meyer and Flaherty; Chairman, Meritcare, Inc.;
5916 Penn Mall Director, Trustee, or Managing General Partner of the Funds; formerly, Vice
Pittsburgh, PA Chairman, Horizon Financial, F.A.
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
POSITION WITH PRINCIPAL OCCUPATION
NAME AND ADDRESS THE CORPORATION DURING PAST FIVE YEARS
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Wesley W. Posvar Director Professor, Foreign Policy and Management Consultant; Trustee, Carnegie
1202 Cathedral of Endowment
Learning for International Peace, RAND Corporation, Online Computer Library Center,
University of Pittsburgh Inc., and U.S. Space Foundation; Chairman, National Advisory Council for
Pittsburgh, PA Environmental Policy and Technology; Chairman, Czecho Slovak Management
Center; Director, Trustee, or Managing General Partner of the Funds;
President Emeritus, University of Pittsburgh; formerly, Chairman, National
Advisory Council for Environmental Policy and Technology.
- ------------------------------------------------------------------------------------------------------------------
Marjorie P. Smuts Director Public relations/marketing consultant; Director, Trustee, or Managing
4905 Bayard Street General Partner of the Funds.
Pittsburgh, PA
- ------------------------------------------------------------------------------------------------------------------
Richard B. Fisher President and Executive Vice President and Trustee, Federated Investors; Chairman and
Federated Investors Director Director, Federated Securities Corp.; President or Vice President of the
Tower Funds; Director or Trustee of some of the Funds.
Pittsburgh, PA
- ------------------------------------------------------------------------------------------------------------------
J. Christopher Donahue Vice President President and Trustee, Federated Investors; Trustee, Federated Advisers,
Federated Investors Federated Management and Federated Research; President and Director,
Tower Federated Administrative Services; President or Vice President of the Funds;
Pittsburgh, PA Director, Trustee, or Managing General Partner of some of the Funds. Mr.
Donahue is the son of John F. Donahue, Chairman and Director of the
Corporation.
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
POSITION WITH PRINCIPAL OCCUPATION
NAME AND ADDRESS THE CORPORATION DURING PAST FIVE YEARS
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Edward C. Gonzales Vice President and Vice President, Treasurer, and Trustee, Federated Investors; Vice President
Federated Investors Treasurer and Treasurer, Federated Advisers, Federated Management, and Federated
Tower Research; Executive Vice President, Treasurer, and Director, Federated
Pittsburgh, PA Securities Corp.; Chairman, Treasurer, and Director, Federated
Administrative Services Trustee or Director of some of the Funds; Vice
President and Treasurer of the Funds.
- ------------------------------------------------------------------------------------------------------------------
John W. McGonigle Vice President and Vice President, Secretary, General Counsel, and Trustee, Federated
Federated Investors Secretary Investors; Vice President, Secretary, and Trustee, Federated Advisers,
Tower Federated Management, and Federated Research; Executive Vice President,
Pittsburgh, PA 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 President,
Federated Investors Federated Securities Corp.; President and Trustee, Federated Advisers,
Tower Federated Management, and Federated Research; Vice President of the Funds,
Pittsburgh, PA Director, Trustee, or Managing General Partner of the Funds; formerly, Vice
President, The Standard Fire Insurance Company and President of its
Federated Research Division.
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
* This Director is deemed to be an "interested person" of the Corporation as
defined in the Investment Company Act of 1940.
+ Members of the Corporation's Executive Committee. The Executive Committee of
the Board of Directors handles the responsibilities of the Board of Directors
between meetings of the Board.
Officers and Directors own less than 1% of the Fund's outstanding shares.
INVESTMENT ADVISER. Under the terms of an Advisory Agreement between the
Corporation and Federated Management, Federated Management will furnish to the
Fund such investment advice, statistical and other factual information as may
from time to time be reasonably requested by the Fund.
ADVISORY FEES. The Fund's adviser receives an annual investment advisory
fee equal to 1.00% of average daily net assets of the Fund. The fee paid by
the Fund, while higher than the advisory fee paid by other mutual funds in
general, is comparable to fees paid by other mutual funds with similar
objectives and policies. The adviser may voluntarily choose to waive a
portion of its fee or reimburse the Fund for certain operating expenses.
The adviser can terminate this voluntary reimbursement of expenses at any
time at its sole discretion. The adviser has also undertaken to reimburse
the Fund for operating expenses in excess of limitations established by
certain states.
ADVISER'S BACKGROUND. Federated Management, a Delaware business trust
organized on April 11, 1989, is a registered investment adviser under the
Investment Advisers Act of 1940. It is a subsidiary of Federated Investors.
All of the Class A (voting) shares of Federated Investors are owned by a
trust, the trustees of which are John F. Donahue, Chairman and Trustee of
Federated Investors, Mr. Donahue's wife, and Mr. Donahue's son, J.
Christopher Donahue, who is President and Trustee of Federated Investors.
Federated Management and other subsidiaries of Federated Investors serve as
investment advisers to a number of investment companies and private
accounts with combined assets of approximately $70 billion. Federated
Investors, which was founded in 1956 as Federated Investors, Inc., develops
and manages mutual funds primarily for the financial industry. Federated
Investors' track record of competitive performance and its disciplined,
risk-averse investment philosophy serve approximately 3,500 client
institutions nationwide. Through these same client institutions, individual
shareholders also have access to this same level of investment expertise.
Christopher H. Wiles has been the Fund's portfolio manager since its
inception. Mr. Wiles joined Federated Investors in 1990 and has been a Vice
President of the Investment Adviser since 1992. Mr. Wiles served as
Assistant Vice President of the Fund's investment adviser from 1990 until
1992. Mr. Wiles was a portfolio manager at Mellon Bank from 1986 until
1990. Mr. Wiles is a Chartered Financial Analyst and received his M.B.A. in
Finance from Cleveland State University.
DISTRIBUTION OF FORTRESS SHARES
Federated Securities Corp. is the principal distributor for Shares. Federated
Securities Corp. is located at Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779. It is a Pennsylvania corporation organized on November
14, 1969, and is the principal distributor for a number of investment companies.
Federated Securities Corp. is a subsidiary of Federated Investors.
DISTRIBUTION AND SHAREHOLDER SERVICES PLANS. Under a distribution plan adopted
in accordance with Investment Company Act Rule 12b-1 (the "Distribution Plan"),
the Fund will pay to the distributor an amount, computed at an annual rate of
.25 of 1% of the average daily net asset value of Shares to finance any activity
which is principally intended to result in the sale of shares subject to the
Distribution Plan. The distributor may select Financial Institutions such as
banks, fiduciaries, custodians for public funds, investment advisers, and
broker/dealers to provide sales support services as agents for their clients or
customers.
The Distribution Plan is a compensation-type plan. As such, the Fund makes no
payments to the distributor except as described above. Therefore, the Fund does
not pay for unreimbursed expenses of the distributor, including amounts expended
by the distributor in excess of amounts received by it from
the Fund, interest, carrying or other financing charges in connection with
excess amounts expended, or the distributor's overhead expenses. However, the
distributor may be able to recover such amount or may earn a profit from future
payments made by the Fund under the Distribution Plan.
In addition, the Fund has adopted a Shareholder Services Plan (the "Services
Plan") under which it may make payments up to 0.25 of 1% of the average daily
net asset value of the Shares to obtain certain personal services for
shareholders and the maintenance of shareholder accounts ("shareholder
services"). The Fund has entered into a Shareholder Services Agreement with
Federated Shareholder Services, a subsidiary of Federated Investors, under which
Federated Shareholder Services will either perform shareholder services directly
or will select Financial Institutions to perform shareholder services. Financial
Institutions will receive fees based upon shares owned by their clients or
customers. The schedules of such fees and the basis upon which such fees will be
paid will be determined from time to time by the Fund and Federated Shareholder
Services.
ADMINISTRATIVE ARRANGEMENTS. In addition, the distributor will pay financial
institutions, for distribution and/or administrative services, an amount equal
to 1.00% of the offering price of the Shares acquired by their clients or
customers on purchases up to $1,999,999, .50% of the offering price on purchases
of $2,000,000 to $4,999,999, and .25% of the offering price on purchases of
$5,000,000 or more. (This fee is in addition to the 1.00% sales charge on
purchases of less than $1 million.) The financial institutions may elect to
receive amounts less than those stated, which would reduce the stated contingent
deferred sales charge and/or the holding period used to calculate the fee.
The Glass-Steagall Act limits the ability of a depository institution (such as a
commercial bank or a savings and loan association) to become an underwriter or
distributor of 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 Board of Directors will consider appropriate changes in the
administrative services.
State securities laws governing the ability of depository institutions to act as
underwriters or distributors of securities may differ from interpretations given
to the Glass-Steagall Act and, therefore, banks and financial institutions may
be required to register as dealers pursuant to state law.
ADMINISTRATION OF THE FUND
ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, provides administrative personnel and services (including
certain legal and financial reporting services) necessary to operate the Fund.
Federated Administrative Services provides these at an annual rate as specified
below.
<TABLE>
<CAPTION>
MAXIMUM AVERAGE AGGREGATE DAILY
ADMINISTRATIVE FEE NET ASSETS OF THE FUND
- --------------------------- ---------------------------------------
<S> <C>
0.15 of 1% on the first $250 million
0.125 of 1% on the next $250 million
0.10 of 1% on the next $250 million
0.075 of 1% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
Federated Administrative Services may choose voluntarily to waive a portion of
its fee.
CUSTODIAN. State Street Bank and Trust Company, P.O. Box 8604, Boston,
Massachusetts 02266-8604, is custodian for the securities and cash of the Fund.
Foreign instruments purchased by the Fund are held by foreign banks
participating in a network coordinated by State Street Bank.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated Services Company,
Federated Investors Tower, Pittsburgh, Pennsylvania, 15222-3779, is transfer
agent for Shares and dividend disbursing agent for the Fund.
LEGAL COUNSEL. Legal counsel is provided by Houston, Houston & Donnelly, 2510
Centre City Tower, Pittsburgh, Pennsylvania 15222, and Dickstein, Shapiro &
Morin, 2101 L Street, N.W., Washington, D.C. 20037.
INDEPENDENT AUDITORS. The independent auditors for the Fund are Ernst & Young,
One Oxford Centre, Pittsburgh, Pennsylvania 15219.
BROKERAGE TRANSACTIONS
When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the Investment Adviser looks for prompt execution of the order at a
favorable price. In working with dealers, the adviser will generally utilize
those who are recognized dealers in specific portfolio instruments, except when
a better price and execution of the order can be obtained elsewhere. In
selecting among firms believed to meet this criteria, the adviser may give
consideration to those firms which have sold or are selling Shares of the Fund
and other funds distributed by Federated Securities Corp. The adviser makes
decisions on portfolio transactions and selects brokers and dealers subject to
review by the Board of Directors.
EXPENSES OF THE FUND AND FORTRESS SHARES
Holders of each class of shares pay their allocable portion of Fund and
Corporation expenses.
The Corporation expenses for which holders of Shares pay their allocable portion
include, but are not limited to: the cost of organizing the Corporation and
continuing its existence; registering the Corporation with federal and state
securities authorities; Directors' fees; auditors' fees; the cost of meetings of
Directors; legal fees of the Corporation; association membership dues; and such
non-recurring and extraordinary items as may arise from time to time.
The Fund expenses for which holders of Shares pay their allocable portion
include, but are not limited to: registering the Fund and Shares of the Fund;
investment advisory services; taxes and commissions; custodian fees; insurance
premiums; auditors' fees; and such non-recurring and extraordinary items as may
arise from time to time.
At present, the only expenses which are allocated specifically to Shares as a
class are expenses under the Service Plan and Distribution Plan. However, the
Directors reserve the right to allocate certain other expenses to holders of
Shares as it deems appropriate ("Class Expenses"). In any case, Class Expenses
would be limited to: distribution fees; transfer agent fees as identified by
the transfer agent as attributable to holders of Shares; fees under the Service
Plan; printing and postage expenses related to preparing and distributing
materials such as shareholder reports, prospectuses and proxies to current
shareholders; registration fees paid to the Securities and Exchange Commission
and registration fees paid to state securities commissions; expenses related to
administrative personnel and services as required to support holders of Shares;
legal fees relating solely to Shares; and Directors' fees incurred as a result
of issues relating solely to Shares.
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS
Each Share gives the shareholder one vote in Director elections and other
matters submitted to shareholders for vote. All shares of each portfolio or
class in the Corporation have equal voting rights, except that only shares of
that particular Fund or class are entitled to vote in matters affecting that
Fund or class.
As a Maryland corporation, the Corporation is not required to hold annual
shareholder meetings. Shareholder approval will be sought only for certain
changes in the Fund's operation and for the election of Directors under certain
circumstances.
Directors may be removed by a two-thirds vote of the number of Directors prior
to such removal or by a two-thirds vote of the shareholders at a special
meeting. The Directors shall call a Special Meeting of Shareholders upon the
written request of shareholders owning at least 10% of the Corporation's
outstanding shares entitled to vote.
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects to meet requirements
of the Internal Revenue Code, as amended, applicable to regulated investment
companies and to receive the special tax treatment afforded to such companies.
However, the Fund may invest in the stock of certain foreign corporations which
would constitute a Passive Foreign Investment Company (PFIC). Federal income
taxes may be imposed on the Fund upon disposition of PFIC investments.
The Fund will be treated as a single, separate entity for federal income tax
purposes so that income (including capital gains) and losses realized by the
Corporation's other portfolios, if any, will not be combined for tax purposes
with those realized by the Fund.
Investment income received by the Fund from sources within foreign countries may
be subject to foreign taxes withheld at the source. The United States has
entered into tax treaties with many foreign countries that entitle the Fund to
reduced tax rates or exemptions on this income. The effective rate of foreign
tax cannot be predicted since the amount of Fund assets to be invested within
various countries is unknown. However, the Fund intends to operate so as to
qualify for treaty-reduced tax rates where applicable.
Unless otherwise exempt, shareholders are required to pay federal income tax on
any dividends and other distributions, including capital gains distributions,
received. This applies whether dividends and distributions are received in cash
or as additional Shares.
If more than 50% of the value of the Fund's assets at the end of the tax year is
represented by stock or securities of foreign corporations, the Fund intends to
qualify for certain Internal Revenue Code stipulations that would allow
shareholders to claim a foreign tax credit or deduction on their U.S. income tax
returns. The Internal Revenue Code may limit a shareholder's ability to claim a
foreign tax credit. Furthermore, shareholders who elect to deduct their portion
of the Fund's foreign taxes rather than take the foreign tax credit must itemize
deductions on their income tax returns.
PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES
In the opinion of Houston, Houston & Donnelly, counsel to the Fund:
- the Fund is subject to the Pennsylvania corporate franchise tax; and
- Fund Shares are exempt from personal property taxes imposed by counties,
municipalities, and school districts in Pennsylvania.
Shareholders are urged to consult their own tax advisers regarding the status of
their accounts under state and local tax laws.
OTHER CLASSES OF SHARES
- --------------------------------------------------------------------------------
Class A Shares, the other class of shares offered by the Fund, are sold
primarily to customers of financial institutions with a maximum sales charge of
4.50%. Investments in Class A Shares are subject to a minimum initial investment
of $500, unless the investment is in a retirement account, in which case the
minimum investment is $50.
The amount of dividends payable to Class A Shares will generally exceed that of
Fortress Shares by the difference between Class Expenses and distribution
expenses borne by shares of each respective class.
The stated advisory fee is the same for both classes of shares.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time the Fund advertises the total return for Fortress Shares.
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 gain
distributions. It is calculated by dividing that change by the initial
investment and is expressed as a percentage.
The performance information reflects the effect of the maximum sales load and
other similar non-recurring charges, such as the contingent deferred sales
charge, which, if excluded, would increase the total return.
From time to time, the Fund may advertise the performance of Fortress Shares
using certain financial publications and/or compare its performance to certain
indices.
Total return will be calculated separately for Fortress Shares and Class A
Shares. Because Fortress Shares are subject to Rule 12b-1 fees, the total return
for Class A Shares, for the same period may exceed that of Fortress Shares.
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
World Utility Fund Federated Investors Tower
Fortress Shares Pittsburgh, Pennsylvania 15222-3779
- ----------------------------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
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Investment Adviser
Federated Management Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
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Custodian
State Street Bank and P.O. Box 8604
Trust Company Boston, Massachusetts 02266-8604
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Transfer Agent and Dividend Disbursing Agent
Federated Services Company Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
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Legal Counsel
Houston, Houston & Donnelly 2510 Centre City Tower
Pittsburgh, Pennsylvania 15222
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Legal Counsel
Dickstein, Shapiro & Morin 2101 L Street, N.W.
Washington, D.C. 20037
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Independent Auditors
Ernst & Young One Oxford Centre
Pittsburgh, Pennsylvania 15219
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</TABLE>
WORLD UTILITY FUND
FORTRESS SHARES
PROSPECTUS
A Diversified Portfolio of
World Investment Series, Inc.,
An Open-End, Management
Investment Company
April , 1994
FEDERATED SECURITIES CORP.
(LOGO)
---------------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
4021404A-FS (4/94)
WORLD UTILITY FUND
(A PORTFOLIO OF WORLD INVESTMENT SERIES, INC.)
CLASS A SHARES
FORTRESS SHARES
COMBINED STATEMENT OF ADDITIONAL INFORMATION
This Combined Statement of Additional Information should be read with the
respective prospectuses for Class A Shares and Fortress Shares of World Utility
Fund (the "Fund") dated April , 1994. This Combined Statement is not a
prospectus itself. To receive a copy of either prospectus, write or call the
Fund.
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3776
Statement dated April , 1994
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
GENERAL INFORMATION ABOUT THE FUND 1
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INVESTMENT OBJECTIVE AND POLICIES 1
- ----------------------------------------------------------------
Types of Investments 1
When-Issued and Delayed
Delivery Transactions 1
Repurchase Agreements 1
Lending Portfolio Securities 1
Portfolio Turnover 1
Investment Limitations 2
THE FUNDS 4
- ----------------------------------------------------------------
INVESTMENT ADVISORY SERVICES 4
- ----------------------------------------------------------------
Adviser to the Fund 4
Advisory Fees 4
ADMINISTRATIVE SERVICES 5
- ----------------------------------------------------------------
SHAREHOLDER SERVICES PLAN (CLASS A SHARES ONLY) 5
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BROKERAGE TRANSACTIONS 5
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PURCHASING SHARES 5
- ----------------------------------------------------------------
Distribution of Shares 5
Distribution and Shareholder Services Plans
(Fortress Shares Only) 5
Conversion to Federal Funds 6
Purchases by Sales Representatives, Directors
of the Corporation, and Employees 6
Tax Consequences 6
Exchanging Securities for Fund Shares 6
DETERMINING NET ASSET VALUE 6
- ----------------------------------------------------------------
Determining Market Value of Securities 6
Trading in Foreign Securities 7
EXCHANGE PRIVILEGE (FORTRESS SHARES ONLY) 7
- ----------------------------------------------------------------
Reduced Sales Charge 7
Requirements for Exchange 7
Tax Consequences 7
Making an Exchange 7
REDEEMING SHARES 8
- ----------------------------------------------------------------
Redemption in Kind 8
TAX STATUS 8
- ----------------------------------------------------------------
The Fund's Tax Status 8
Shareholders' Tax Status 8
TOTAL RETURN 8
- ----------------------------------------------------------------
YIELD 9
- ----------------------------------------------------------------
PERFORMANCE COMPARISONS 9
- ----------------------------------------------------------------
APPENDIX 11
- ----------------------------------------------------------------
GENERAL INFORMATION ABOUT THE FUND
- --------------------------------------------------------------------------------
The Fund is a portfolio in World Investment Series, Inc. (the "Corporation")
which was established as a corporation under the laws of the state of Maryland
on January 25, 1994.
Shares of the Fund are offered in two classes, known as Class A Shares and
Fortress Shares (individually and collectively referred to as "Shares," as the
context may require). This combined statement of additional information relates
to both classes of the above mentioned Shares.
INVESTMENT OBJECTIVE AND POLICIES
- --------------------------------------------------------------------------------
The Fund's investment objective is to provide total return.
TYPES OF INVESTMENTS
The Fund will seek to achieve its investment objective by investing at least 65%
of its total assets in securities issued by domestic and foreign companies in
the utilities industries. The Fund may also purchase fixed income securities and
foreign government securities; enter into forward commitments, repurchase
agreements, and, without limit, foreign currency transactions; and maintain
reserves in foreign or U.S. money market instruments.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
These transactions are made to secure what is considered to be an advantageous
price and yield for the Fund. Settlement dates may be a month or more after
entering into these transactions, and the market values of the securities
purchased may vary from the purchase prices.
No fees or other expenses, other than normal transaction costs, are incurred.
However, liquid assets of the Fund sufficient to make payment for the securities
to be purchased are segregated on the Fund's records at the trade date. These
assets are marked to market daily and maintained until the transaction is
settled. As a matter of policy, the Fund does not intend to engage in
when-issued and delayed delivery transactions to an extent that would cause the
segregation of more than 20% of the total value of its assets.
REPURCHASE AGREEMENTS
The Fund or its custodian will take possession of the securities subject to
repurchase agreements, and these securities will be marked to market daily. To
the extent that the original seller does not repurchase the securities from the
Fund, the Fund could receive less than the repurchase price on any sale of such
securities. In the event that such a defaulting seller filed for bankruptcy or
became insolvent, disposition of such securities by the Fund might be delayed
pending court action. The Fund believes that under the regular procedures
normally in effect for custody of the Fund's portfolio securities subject to
repurchase agreements, a court of competent jurisdiction would rule in favor of
the Fund and allow retention or disposition of such securities. The Fund will
only enter into repurchase agreements with banks and other recognized financial
institutions, such as broker/dealers which are deemed by the Fund's adviser or
sub-adviser to be creditworthy.
LENDING PORTFOLIO SECURITIES
In order to generate additional income, the Fund may lend its portfolio
securities to broker-dealers, banks, or other institutional borrowers of
securities. The Fund will only enter into loan arrangements with broker-dealers,
banks, or other institutions which the investment adviser or sub-adviser have
determined are creditworthy under guidelines established by the Corporation's
Board of Directors and will receive collateral equal to at least 100% of the
value of the securities loaned. The Fund does not intend to lend portfolio
securities in the current fiscal year.
The collateral received when the Fund lends portfolio securities must be valued
daily and, should the market value of the loaned securities increase, the
borrower must furnish additional collateral to the Fund. During the time
portfolio securities are on loan, the borrower pays the Fund any dividends or
interest paid on such securities. Loans are subject to termination at the option
of the Fund or the borrower. The Fund may pay reasonable administrative and
custodial fees in connection with a loan and may pay a negotiated portion of the
interest earned on the cash or equivalent collateral to the borrower or placing
broker. The Fund does not have the right to vote securities on loan, but would
terminate the loan and regain the right to vote if that were considered
important with respect to the investment.
PORTFOLIO TURNOVER
It is not anticipated that the portfolio trading engaged in by the Fund will
result in its annual rate of portfolio turnover exceeding 100%. The Fund's
Investment Adviser does not anticipate that portfolio turnover will result in
adverse tax consequences. However, relatively high portfolio turnover may result
in high transaction costs to the Fund.
- --------------------------------------------------------------------------------
INVESTMENT LIMITATIONS
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. This shall not prevent the
purchase or holding of corporate bonds, debentures, notes, certificates
of indebtedness or other debt securities of an issuer, repurchase
agreements, or other transactions which are permitted by the Fund's
investment objective and policies.
DIVERSIFICATION OF INVESTMENTS
With respect to 75% of the value of its total assets, the Fund will not
purchase securities of any one issuer (other than cash, cash items, or
securities issued or guaranteed by the government of the United States or
its agencies or instrumentalities) if as a result more than 5% of the
value of its total assets would be invested in the securities of that
issuer, and the Fund will not acquire more than 10% of the outstanding
voting securities of any one issuer.
CONCENTRATION OF INVESTMENTS
The Fund will not invest more than 25% of its total assets in securities
of issuers having their principal business activities in one industry,
except the utilities industry.
ISSUING SENIOR SECURITIES AND BORROWING MONEY
The Fund will not issue senior securities except that the Fund may borrow
money and engage in reverse repurchase agreements in amounts up to
one-third of the value of its total assets, including the amount
borrowed. The Fund will not borrow money or engage in reverse repurchase
agreements for investment leverage, but rather as a temporary,
extraordinary, or emergency measure 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 exceed 5% of the value of its total assets are outstanding.
PLEDGING SECURITIES
The Fund will not mortgage, pledge, or hypothecate securities, except
when necessary for permissible borrowings. In those cases, it may pledge
assets having a value of 15% of its assets taken at cost.
BUYING ON MARGIN
The Fund will not purchase any securities on margin but may obtain such
short-term credits as may be necessary for clearance of purchases and
sales of securities.
UNDERWRITING
The Fund will not underwrite or participate in the marketing of
securities of other issuers, except as it may be deemed to be an
underwriter under federal securities law in connection with the
disposition of its portfolio securities.
INVESTING IN REAL ESTATE
The Fund will not invest in real estate or real estate limited
partnerships, although it may invest in securities secured by real estate
or interests in real estate or issued by companies, including real estate
investment trusts, which invest in real estate or interests therein.
INVESTING IN COMMODITIES
The Fund will not purchase or sell commodities, commodity contracts, or
commodity futures contracts except that the Fund may purchase or sell
forward contracts with respect to foreign securities or currencies.
LENDING CASH OR SECURITIES
The Fund will not lend any assets except portfolio securities in an
amount up to one-third of the value of its total assets. This shall not
prevent the purchase or holding of bonds, debentures, notes, certificates
of indebtedness, or other debt securities of an issuer, repurchase
agreements or other transactions which are permitted by the Fund's
investment objective and policies or its Articles of Incorporation.
Except as noted, the above investment limitations cannot be changed without
shareholder approval. The following limitations, however, may be changed by the
Directors without shareholder approval. Except as noted, shareholders will be
notified before any material change in these limitations becomes effective.
- --------------------------------------------------------------------------------
INVESTING IN MINERALS
The Fund will not invest in interests in oil, gas, or other mineral
exploration or development programs or leases, other than debentures or
equity stock interests.
PURCHASING SECURITIES TO EXERCISE CONTROL
The Fund will not purchase securities of a company for purpose of
exercising control or management.
INVESTING IN WARRANTS
The Fund will not invest more than 5% of its assets in warrants,
including those acquired in units or attached to other securities. To
comply with certain state restrictions, the Fund will limit its
investment in such warrants not listed on recognized stock exchanges to
2% of its total assets. (If state restrictions change, this latter
restriction may be revised without notice to shareholders.) For purposes
of this investment restriction, warrants acquired by the Fund in units or
attached to securities may be deemed to be without value.
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
The Fund 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
investment company, or invest more than 10% of its total assets in
investment companies in general. The Fund will purchase securities of
closed-end investment companies only in open-market transactions
involving only customary broker's commissions. However, these limitations
are not applicable if the securities are acquired in a merger,
consolidation, reorganization, or acquisition of assets.
The Fund will limit its investment in other investment companies to those
with a sales charge of less than 1% that have investment objectives and
policies similar to its own. While it is the Fund's policy to waive its
investment advisory fee on assets invested in securities of open-end
investment companies, it should be noted that investment companies incur
certain expenses such as custodian and transfer agent fees, and,
therefore, any investment by the Fund in shares of another investment
company would be subject to such duplicate expenses.
The Fund's portfolio may, notwithstanding any fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the same
fundamental investment objectives, policies and limitations as the Fund.
INVESTING IN NEW ISSUERS
The Fund will not invest more than 5% of the value of its total assets in
securities of issuers which have records of less than three years of
continuous operations, including the operation of any predecessor.
INVESTING IN ILLIQUID SECURITIES
The Fund will not invest more than 15% of the value of its net assets in
illiquid securities, including securities not determined by the Board of
Directors to be liquid, and repurchase agreements with maturities longer
than seven days after notice.
INVESTING IN RESTRICTED SECURITIES
The Fund will not invest more than 5% of its net assets in securities
subject to restriction on resale under federal securities law, except for
Section 4(2) commercial paper and other restricted securities deemed to
be liquid under criteria established by the Board of Directors.
WRITING COVERED CALL OPTIONS
The Fund will not write call options on securities unless the securities
are held in the Fund's portfolio or unless the Fund is entitled to them
in deliverable form without further payment or after segregating cash in
the amount of any further payment. The Fund's investment in put or call
options, straddles, spreads, or any combination thereof shall not exceed
5% of the Fund's total assets.
INVESTING IN ISSUERS WHOSE SECURITIES ARE OWNED BY OFFICERS AND DIRECTORS OF
THE CORPORATION
The Fund will not purchase or retain the securities of any issuer if the
officers and Directors of the Corporation 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.
Except with respect to borrowing money, if a percentage limitation is adhered to
at the time of investment, a later increase or decrease in percentage resulting
from any change in value or net assets will not result in a violation of such
restriction. For 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 individual
profits in excess of $100,000,000 at the time of investment to be "cash items."
- --------------------------------------------------------------------------------
The Fund does not intend to borrow money, pledge securities, or invest in
securities of other investment companies in excess of 5% of the value of its
total assets during the coming fiscal year.
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 II; Cash Trust Series, Inc.; 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
U.S. Government Money Market Trust; Liberty Term Trust, Inc.-1999; 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; The
Planters 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.; Sunburst Funds;
Targeted Duration Trust; Tax-Free Instruments Trust; Trademark Funds; Trust for
Financial Institutions; Trust For Government Cash Reserves; Trust for Short-Term
U.S. Government Securities; Trust for U.S. Treasury Obligations.
INVESTMENT ADVISORY SERVICES
- --------------------------------------------------------------------------------
ADVISER TO THE FUND
The Fund's investment adviser is Federated Management. It is a subsidiary of
Federated Investors. All of the Class A (voting) shares of Federated Investors
are owned by a trust, the trustees of which are John F. Donahue, his wife, and
his son, J. Christopher Donahue. John F. Donahue, is Chairman and Trustee,
Federated Management, Chairman and Trustee, Federated Investors, and Chairman
and Director of the Corporation. John A. Staley, IV, is President and Trustee,
Federated Management, Vice President and Trustee, Federated Investors, Executive
Vice President, Federated Securities Corp., and Vice President of the
Corporation. J. Christopher Donahue, is Trustee, Federated Management, President
and Trustee, Federated Investors, President and Director, Federated
Administrative Services, and Vice President of the Corporation. John W.
McGonigle, is Vice President, Secretary, and Trustee, Federated Management, Vice
President, Secretary, General Counsel, and Trustee, Federated Investors,
Executive Vice President, Secretary, and Director, Federated Administrative
Services, Executive Vice President and Director, Federated Securities Corp., and
Vice President and Secretary of the Corporation.
The adviser shall not be liable to the Fund, the Corporation 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
Corporation.
ADVISORY FEES
For its advisory services, Federated Management receives an annual investment
advisory fee as described in the prospectus.
STATE EXPENSE LIMITATION
The adviser has undertaken to comply with the expense limitation
established by certain states for investment companies whose shares are
registered for sale in those states. If the Fund's normal operating
expenses (including the investment advisory fee, but not including
brokerage commissions, interest, taxes, and extraordinary expenses)
exceed 2 1/2% per year of the first $30 million of average net assets, 2%
per year of the next $70 million of average net assets, and 1 1/2% per
year of the remaining average net assets, the adviser will reimburse the
Fund for its expenses over the limitation.
If the Fund's monthly projected operating expenses exceed this
limitation, the investment advisory fee paid will be reduced by the
amount of the excess, subject to an annual adjustment. If the expense
limitation is exceeded,
- --------------------------------------------------------------------------------
the amount to be reimbursed by the adviser will be limited, in any fiscal
year, by the amount of the in nvestment 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 a fee as described in the
prospectus. John A. Staley, IV, an officer of the Corporation and Dr. Henry J.
Gailliot, an officer of Federated Management, the adviser to the Fund, each hold
approximately 15% and 20%, respectively, of the outstanding common stock and
serve as directors of Commercial Data Services, Inc., a company which provides
computer processing services to Federated Administrative Services. For the
fiscal years ended December 31, , , and , Federated Adminstrative
Services paid approximately $ , $ , and $ , respectively, for
services provided by Commercial Data Services, Inc. to the Funds.
SHAREHOLDER SERVICES PLAN (CLASS A SHARES ONLY)
- --------------------------------------------------------------------------------
This arrangement permits the payment of fees to Federated Shareholder Services
and, indirectly, to Financial Institutions to cause services to be provided to
shareholders by a representative who has knowledge of the shareholder's
particular circumstances and goals. These activities and services may include,
but are not limited to, providing office space, equipment, telephone facilities,
and various clerical, supervisory, computer, and other personnel as necessary or
beneficial to establish and maintain shareholder accounts and records;
processing purchase and redemption transactions and automatic investments of
client account cash balances; answering routine client inquiries; and assisting
clients in changing dividend options, account designations, and addresses.
BROKERAGE TRANSACTIONS
- --------------------------------------------------------------------------------
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 person are reasonable in relationship to the value of the brokerage and
research services provided.
Research services provided by brokers may be used by the adviser or by
affiliates of Federated Investors in advising Federated Funds and other
accounts. To the extent that receipt of these services may supplant services for
which the adviser or its affiliates might otherwise have paid, it would tend to
reduce their expenses.
PURCHASING SHARES
- --------------------------------------------------------------------------------
Except under certain circumstances described in the prospectus, Shares are sold
at their net asset value plus a sales charge on days the New York Stock Exchange
is open for business. The procedure for purchasing Shares is explained in the
respective prospectus under "Investing in Class A Shares" or "Investing in
Fortress Shares."
DISTRIBUTION OF SHARES
Federated Securities Corp. is the principal distributor for Shares of the Fund.
DISTRIBUTION AND SHAREHOLDER SERVICES PLANS (Fortress Shares Only)
These arrangements permit the payment of fees to Financial Institutions, the
distributor, and Federated Shareholder Services, to stimulate distribution
activities and to cause services to be provided to shareholders by a
representative who has knowledge of the shareholder's particular circumstances
and goals. These activities and services may include, but are not limited to,
marketing efforts; providing office space, equipment, telephone facilities, and
various clerical, supervisory, computer, and other personnel as necessary or
beneficial to establish and maintain shareholder accounts and records;
processing purchase and redemption transactions and automatic investments of
client account cash
- --------------------------------------------------------------------------------
balances; answering routine client inquiries; and assisting clients in changing
dividend options, account designations, and addresses.
With respect to Fortress Shares of the Fund, adopting the Distribution Plan, the
Board of Directors expects that the Fund will be able to achieve a more
predictable flow of cash for investment purposes and to meet redemptions. This
will facilitate more efficient portfolio management and assist the Fund in
pursuing its investment objectives. By identifying potential investors whose
needs are served by the Fund's objectives, and properly servicing these
accounts, it may be possible to curb sharp fluctuations in rates of redemptions
and sales.
Other benefits, which may be realized under either arrangement, may include: (1)
providing personal services to shareholders; (2) investing shareholder assets
with a minimum of delay and administrative detail; and (3) enhancing shareholder
recordkeeping systems; and (4) responding promptly to shareholders' requests and
inquiries concerning their accounts.
CONVERSION TO FEDERAL FUNDS
It is the Fund's policy to be as fully invested as possible so that maximum
interest may be earned. To this end, all payments from shareholders must be in
federal funds or be converted into federal funds before shareholders begin to
earn dividends. State Street Bank acts as the shareholder's agent in depositing
checks and converting them to federal funds.
PURCHASES BY SALES REPRESENTATIVES, DIRECTORS OF THE CORPORATION, AND EMPLOYEES
Directors, employees, and sales representatives of the Fund, Federated
Management, and Federated Securities Corp. or their affiliates, or any
investment dealer who has a sales agreement with Federated Securities Corp., and
their spouses and children under 21, may buy Shares at net asset value without a
sales charge or redemption fees. Shares may also be sold without a sales charge
to trusts or pension or profit-sharing plans for these persons.
These sales are made with the purchaser's written assurance that the purchase is
for investment purposes and that the securities will not be resold except
through redemption by the Fund.
EXCHANGING SECURITIES FOR FUND SHARES
Investors may exchange securities they already own for Shares, or they may
exchange a combination of securities and cash for Shares. Any securities to be
exchanged must meet the investment objective and policies of the Fund, must have
readily ascertainable market value, must be liquid, and must not be subject to
restrictions on resale.
The Fund will prepare a list of securities which are eligible for acceptance and
furnish this list to brokers upon request. The Fund reserves the right to reject
any security, even though it appears on the list, and the right to amend the
list of acceptable securities at any time without notice to brokers or
investors.
An investment broker acting for an investor should forward the securities in
negotiable form with an authorized letter of transmittal to Federated Securities
Corp. Federated Securities Corp. will determine that transmittal papers are in
good order and forward to the Fund's custodian, State Street Bank. The Fund will
notify the broker of its acceptance and valuation of the securities within five
business days of their receipt by State Street Bank.
The Fund values such securities in the same manner as the Fund values its
portfolio securities. The basis of the exchange will depend upon the net asset
value of Shares on the day the securities are valued. One Share will be issued
for each equivalent amount of securities accepted.
Any interest earned on the securities prior to the exchange will be considered
in valuing the securities. All interest, dividends, subscription, conversion, or
other rights attached to the securities become the property of the Fund, along
with the securities.
TAX CONSEQUENCES
Exercise of this exchange privilege is treated as a sale for federal income tax
purposes. Depending upon the cost basis of the securities exchanged for Shares,
a gain or loss may be realized by the investor.
DETERMINING NET ASSET VALUE
- --------------------------------------------------------------------------------
Net asset value generally changes each day. The days on which net asset value is
calculated by the Fund are described in the respective prospectuses.
DETERMINING MARKET VALUE OF SECURITIES
Market or fair values of the Fund's portfolio securities are determined as
follows:
- - according to the last reported sale price on a recognized securities exchange,
if available. (If a security is traded on more than one exchange, the price on
the primary market for that security, as determined by the adviser, is used.);
- --------------------------------------------------------------------------------
- - according to the last reported bid price, if no sale on the recognized
exchange is reported or if the security is traded over-the-counter;
- - at fair value as determined in good faith by the Corporation's Board of
Directors; or
- - for short-term obligations with remaining maturities of less than 60 days at
the time of purchase, at amortized cost, which approximates value.
Prices provided by independent pricing services may be determined without
relying exclusively on quoted prices and may consider: institutional trading in
similar groups of securities; yield; quality; coupon rate; maturity; type of
issue; trading characteristics; and other market data.
TRADING IN FOREIGN SECURITIES
Trading in foreign securities may be completed at times which vary from the
closing of the New York Stock Exchange. In computing the net asset value, the
Fund values foreign securities at the latest closing price on the exchange on
which they are traded immediately prior to the closing of the New York Stock
Exchange. Certain foreign currency exchange rates may also be determined at the
latest rate prior to the closing of the New York Stock Exchange. Foreign
securities quoted in foreign currencies are translated into U.S. dollars at
current rates. Occasionally, events that affect these values and exchange rates
may occur between the times at which they are determined and the closing of the
New York Stock Exchange. If such events materially affect the value of portfolio
securities, these securities may be valued at their fair value as determined in
good faith by the Board of Directors, although the actual calculation may be
done by others.
EXCHANGE PRIVILEGE (FORTRESS SHARES ONLY)
- --------------------------------------------------------------------------------
This section relates only to Fortress Shares of the Fund. For information
regarding the Exchange Privilege for Class A Shares of the Fund, please see the
prospectus for Class A Shares.
The Securities and Exchange Commission has issued an order exempting the Fund
from certain provisions of the Investment Company Act of 1940. As a result, Fund
shareholders are allowed to exchange all or some of their shares for shares in
other Fortress Funds or certain Federated Funds which are sold with a sales
charge different from that of the fund or with no sales charge and which are
advised by subsidiaries or affiliates of Federated Investors. These exchanges
are made at net asset value plus the difference between the Fund's sales charge
already paid and any sales charge of the fund into which the shares are to be
exchanged, if higher.
The order also allows certain other funds, including funds that are not advised
by subsidiaries or affiliates of Federated Investors, which do not have a sales
charge, to exchange their shares for Fund shares on a basis other than the
current offering price. These exchanges may be made to the extent that such
shares were acquired in a prior exchange, at net asset value, for share of a
Federated Fund carrying a sales charge.
REDUCED SALES CHARGE
If a shareholder making such an exchange qualifies for a reduction or
elimination of the sales charge, the shareholder must notify Federated
Securities Corp.
REQUIREMENTS FOR EXCHANGE
Shareholders using this privilege must exchange shares having a net asset value
of at least $1,500. Before the exchange, the shareholder must receive a
prospectus of the fund for which the exchange is being made.
This privilege is available to shareholders resident in any state in which the
fund shares being acquired may be sold. Upon receipt of proper instructions and
required supporting documents, shares submitted for exchange are redeemed and
the proceeds invested in shares of the other fund.
Further information on the exchange privilege and prospectuses for Fortress
Funds or certain Federated Funds are available by calling the Fund.
TAX CONSEQUENCES
Exercise of this exchange privilege is treated as a sale for federal income tax
purposes. Depending on the circumstances, a short-term or long-term capital gain
or loss may be realized.
MAKING AN EXCHANGE
Instructions for exchanges for Fortress Funds or certain Federated Funds may be
given in writing or by telephone. Written instructions may require a signature
guarantee.
REDEEMING SHARES
- --------------------------------------------------------------------------------
The Fund redeems Shares at the next computed net asset value after the Fund
receives the redemption request. Shareholder redemptions may be subject to a
contingent deferred sales charge. Redemption procedures are explained in the
respective prospectuses under "Redeeming Class A Shares" and "Redeeming Fortress
Shares." Although the transfer agent 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.
Since portfolio securities of the Fund may be traded on foreign exchanges which
trade on Saturdays or on holidays on which the Fund will not make redemptions,
the net asset value each class of Shares of the Fund may be significantly
affected on days when shareholders do not have an opportunity to redeem their
Shares.
Fortress Shares redeemed within one to four years of purchase may be subject to
a contingent deferred sales charge. The amount of the contingent deferred sales
charge is based upon the amount of the administrative fee paid at the time of
purchase by the distributor to the financial institution for services rendered,
and the length of time the investor remains a shareholder in the Fund. Should
financial institutions elect to receive an amount less than the administrative
fee that is stated in the prospectus for servicing a particular shareholder, the
contingent deferred sales charge and/or holding period for that particular
shareholder will be reduced accordingly.
REDEMPTION IN KIND
Although the Corporation intends to redeem Shares in cash, it reserves the right
under certain circumstances to pay the redemption price in whole or in part by a
distribution of securities from the Fund's portfolio.
Redemption in kind will be made in conformity with applicable Securities and
Exchange Commission rules, taking such securities at the same value employed in
determining net asset value and selecting the securities in a manner the
Directors determine to be fair and equitable.
The Corporation has elected to be governed by Rule 18f-1 of the Investment
Company Act of 1940 under which the Corporation is obligated to redeem Shares
for any one shareholder in cash only up to the lesser of $250,000 or 1% of the
Corporation's net asset value during any 90-day period.
TAX STATUS
- --------------------------------------------------------------------------------
THE FUND'S TAX STATUS
The Fund will pay no federal income tax because it expects to meet the
requirements of Subchapter M of the Internal Revenue Code 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.
However, the Fund may invest in the stock of certain foreign corporations which
would constitute a Passive Foreign Investment Company (PFIC). Federal income
taxes may be imposed on the Fund upon disposition of PFIC investments.
UNITED KINGDOM TAXES
The adviser currently understands that an investment company such as the
Fund is not taxable under the laws of the United Kingdom as long as the
adviser follows certain operating procedures. To comply with these
procedures, the adviser will make all investment decisions for the Fund
and execute all portfolio transactions outside the United Kingdom.
SHAREHOLDERS' TAX STATUS
Shareholders are subject to federal income tax on dividends and capital gains
received as cash or additional Shares. The Fund's dividends, and any short-term
capital gains, are taxable as ordinary income.
CAPITAL GAINS
Shareholders will pay federal tax at capital gains rates on long-term
capital gains distributed to them regardless of how long they have held
the Fund Shares.
TOTAL RETURN
- --------------------------------------------------------------------------------
The average annual total return for both classes of shares of 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 annual reinvestment of all dividends and distributions. Any
applicable contingent deferred sales charge is deducted from the ending value of
the investment based on the lesser of the original purchase price or the net
asset value of Shares redeemed. Occasionally, total return which does not
reflect the effect of the sales load may be quoted in advertising.
YIELD
- --------------------------------------------------------------------------------
The yield for both classes of Shares of the Fund is determined each day by
dividing the net investment income per share (as defined by the Securities and
Exchange Commission) earned by either class of Shares over a thirty-day period
by the maximum offering price per share of the respective class on the last day
of the period. This value is 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 12-month period and is reinvested every
six months. The yield does not necessarily reflect income actually earned by the
Fund because of certain adjustments required by the Securities and Exchange
Commission and therefore, may not correlate to the dividends or other
distributions paid to the shareholders.
To the extent that financial institutions and broker/dealers charge fees in
connection with services provided in conjunction with an investment in either
class of Shares, the performance will be reduced for those shareholders paying
those fees.
PERFORMANCE COMPARISONS
- --------------------------------------------------------------------------------
The Fund's performance of both classes of Shares depends upon such variables as:
- - portfolio quality;
- - average portfolio maturity;
- - type of instruments in which the portfolio is invested;
- - changes in interest rates on money market instruments;
- - changes in the Fund's or either class of Shares' expenses; and
- - various other factors.
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 net asset value. 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.
- - EUROPE, AUSTRALIA, AND FAR EAST (EAFE) is a market capitalization weighted
foreign securities index, which is widely used to measure the performance of
European, Australian, New Zealand and Far Eastern stock markets. The index
covers approximately 1,020 companies drawn from 18 countries in the above
regions. The index values its securities daily in both U.S. dollars and local
currency and calculates total returns monthly. EAFE U.S. dollar total return
is a net dividend figure less Luxembourg withholding tax. The EAFE is
monitored by Capital International, S.A., Geneva, Switzerland.
- - STANDARD & POOR'S DAILY STOCK PRICE INDEX OF 500 COMMON STOCKS, a composite
index of common stocks in industry, transportation, and financial and public
utility companies, can be used to compare to the total returns of funds whose
portfolios are invested primarily in common stocks. In addition, the Standard
& Poor's index assumes reinvestments of all dividends paid by stocks listed on
its index. Taxes due on any of these distributions are not included, nor are
brokerage or other fees calculated in Standard & Poor's figures.
- - MORNINGSTAR, INC., an independent rating service, is the publisher of the
bi-weekly Mutual Fund Values. Mutual Fund Values rates more than 1,000
NASDQ-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.
- - DOW JONES COMPOSITE AVERAGE or its component averages--an unmanaged index
composed of 30 blue-chip industrial corporation stocks (Dow Jones Industrial
Average), 15 utilities company stocks (Dow Jones Utilities Average), and 20
transportation company stocks. Comparisons of performance assume reinvestment
of dividends.
- - DOW JONES WORLD INDUSTRY INDEX or its component indices, including, among
others, the utility sector.
- --------------------------------------------------------------------------------
- - STANDARD & POOR'S 500 STOCK INDEX or its component indices--an unmanaged index
composed of 400 industrial stocks, 40 financial stocks, 40 utilities stocks,
and 20 transportation stocks. Comparisons of performance assume reinvestment
of dividends.
- - THE NEW YORK STOCK EXCHANGE composite or component indices--unmanaged indices
of all industrial, utilities, transportation, and finance stocks listed on the
New York Stock Exchange.
- - FINANCIAL TIMES ACTUARIES INDICES--including the FTA-World Index (and
components thereof), which are based on stocks in major world equity markets.
- - LIPPER-MUTUAL FUND PERFORMANCE ANALYSIS AND LIPPER-FIXED INCOME FUND
PERFORMANCE ANALYSIS--measure of total return and average current yield for
the mutual fund industry. Rank individual mutual fund performance over
specified time periods, assuming reinvestment of all distributions, exclusive
of any applicable sales charges.
- - VALUE LINE MUTUAL FUND SURVEY, published by Value Line Publishing,
Inc.--analyzes price, yield, risk, and total return for equity and fixed
income mutual funds.
- - MUTUAL FUND SOURCE BOOK, published by Morningstar, Inc.--analyzes price,
yield, risk, and total return for equity and fixed income funds.
- - CDA MUTUAL FUND REPORT, published by CDA Investment Technologies,
Inc.--analyzes price, current yield, risk, total return, and average rate of
return (average annual compounded growth rate) over specified time periods for
the mutual fund industry.
- - VALUELINE INDEX--an unmanaged index which follows the stocks of approximately
1,700 companies.
- - WILSHIRE 5000 EQUITY INDEX--represents the return on the market value of all
common equity securities for which daily pricing is available. Comparisons of
performance assume reinvestment of dividends.
- - HISTORICAL DATA supplied by the research departments of First Boston
Corporation, the J. P. Morgan companies, Salomon Brothers, Merrill Lynch,
Pierce, Fenner & Smith, Smith Barney Shearson and Bloomberg L.P.
- - FINANCIAL PUBLICATIONS: The Wall Street Journal and Business Week, Changing
Times, Financial World, Forbes, Fortune and Money magazines--provide
performance statistics over specified time periods.
- - MORGAN STANLEY CAPITAL INTERNATIONAL WORLD INDICES, including, among others,
the Morgan Stanley Capital International Europe, Australia, Far East Index
("EAFE Index"). The EAFE index is an unmanaged index of more than 1,000
companies of Europe, Australia and the Far East.
- - CONSUMER PRICE INDEX (OR COST OF LIVING INDEX), published by the U.S. Bureau
of Labor Statistics--a statistical measure of change, over time, in the price
of goods and services in major expenditure groups.
Advertisements and sales literature for both classes of shares may quote total
returns which are calculated on non-standardized base periods. These total
returns also represent the historic change in the value of an investment in
either class of shares based on annual reinvestment of dividends over a
specified period of time.
Advertisements may quote performance information which does reflect the effect
of the sales load.
APPENDIX
- --------------------------------------------------------------------------------
STANDARD & POOR'S CORPORATION ("STANDARD & POOR'S") CORPORATE BOND RATINGS
DEFINITIONS
AAA--Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA--Debt rated AA has a very strong capacity to pay interest and repay principal
and differs from the higher rated issues only in small degree.
A--Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
BBB--Debt rated BBB is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protections
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.
BB, B, CCC--Debt rated BB, B, and CCC is regarded, on balance, as predominantly
speculative with respect to capacity to pay interest and repay principal in
accordance with the terms of the obligation. BB indicates the lowest degree of
speculation and CC the highest degree of speculation. While such debt will
likely have some quality and protective characteristics, they are outweighed by
large uncertainties of major risk exposures to adverse conditions.
MOODY'S INVESTORS SERVICE, INC. ("MOODY'S") CORPORATE BOND RATINGS
AAA--Bonds which are rated Aaa are judged to be of best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt edge."
Interest payments are protected by a large or by an exceptionally stable margin
and principal is secure. While the various protective elements are likely to
change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
AA--Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuations 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
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.
BA--Bonds which are rated Ba are judged top have speculative elements; their
future cannot be considered as well-assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B--Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
CAA--Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal of
interest.
STANDARD & POOR'S COMMERCIAL PAPER RATINGS
A-1--This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted with a plus (+) sign
designation.
MOODY'S COMMERCIAL PAPER RATINGS
P-1--Issuers rated Prime-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1 repayment
capacity will normally be evidenced by the following characteristics:
conservative capitalization structures with moderate reliance on debt and ample
asset protection; broad margins in earning coverage of fixed financial changes
and high internal cash generation; well-established access to a range of
financial markets and assured sources of alternate liquidity.
4021404B (4/94)
PART C. OTHER INFORMATION.
Item 24. Financial Statements and Exhibits:
(a) Financial Statements (Filed in Part A)
(b) Exhibits:
(1) Copy of Articles of Incorporation of the
Registrant; (1)
(2) Copy of By-Laws of the Registrant; (1)
(3) Not applicable;
(4) Copy of Specimen Certificate for Shares of Capital
Stock of the Registrant; +
(5) Copy of Investment Advisory Contract of the
Registrant; +
(6) (i) Copy of Distributor's Contract of
the Registrant; +
(ii) Copy of Shareholder Services Agreement; +
(7) Not applicable;
(8) 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; +
(11) Copy of Consent of Independent (Public)
Accountants; +
(12) Not applicable;
(13) Copy of Initial Capital Understanding; +
(14) Not applicable;
(15) (i) Copy of Distribution Plan; +
(ii) Copy of Dealer Agreement; (to be filed with 4-6
month update)
(16) Schedule for Computation of Fund
Performance Data; (to be filed with 4-6 month
update)
(17) Power of Attorney; (1)
+All exhibits have been filed electronically.
1. Response is incorporated by reference to Registrant's Intitial
Registration Statement on Form N-1A filed February 4, 1994. (File Nos.
33-52149 and 811-7141).
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
Shares of capital stock __
($0.001 per Share par value)
Item 27. Indemnification (1).
Item 28. Business and Other Connections of Investment Adviser:
For a description of the other business of the investment adviser,
see the section entitled "World Investment Series, Inc.
Information - Management of the Corporation" in Part A. The
affiliations with the Registrant of four of the Trustees and one
of the Officers of the investment adviser are included in Part A
of this Registration Statement under "Management of the
Corporation- Officers and Directors." The remaining Trustee of
the investment adviser, his position with the investment adviser,
and, in parentheses, his principal occupation is: Mark D. Olson,
Partner, Halbrook & Bayard, 107 West Market Street, Georgetown,
Delaware 19947.
The remaining Officers of the investment adviser are: William D.
Dawson, III, J. Thomas Madden, and Mark L. Mallon, Executive Vice
Presidents; Henry J. Gailliot, Senior Vice President-Economist;
Peter R. Anderson, Gary J. Madich, and J. Alan Minteer, Senior
Vice Presidents; Randall A Bauer, Jonathan C. Conley, Deborah A.
Cunningham, Mark Durbiano, Roger A. Early, Kathleen M.
Foody-Malus, David C. Francis, Thomas M. Franks, Edward C.
Gonzales, Jeff A. Kozemchak, Marian Marinack, Gregory M. Melvin,
Susan M. Nason, Mary Jo Ochson, Robert J. Ostrowski, Charles A.
Ritter, Christopher Wiles and John W. McGonigle, Vice Presidents;
Edward C. Gonzales, Treasurer, and John W. McGonigle, Secretary.
The business address of each of the Officers of the Federated
Research Division of the investment adviser is Federated Investors
Tower, Pittsburgh, PA 15222-3779. These individuals are also
officers of a majority of the investment advisers to the Funds
listed in Part B of this Registration Statement under "The Funds."
Item 29. Principal Underwriters:
(a) Federated Securities Corp., the Distributor for shares of the
Registrant, also acts as principal underwriter for the
following open-end investment companies: 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; 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.;
1. Response is incorporated by reference to Registrant's Intitial
Registration Statement on Form N-1A filed February 4, 1994. (File Nos.
33-52149 and 811-7141).
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 President and
Federated Investors Tower Executive Officer, Chief Director
Pittsburgh, PA 15222-3779 Operating Officer, and
Asst. Treasurer, Federated
Securities Corp.
Edward C. Gonzales Director, Executive Vice 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.
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
John A. Staley, IV Executive Vice President Vice President
Federated Investors Tower and Assistant Secretary,
Pittsburgh, PA 15222-3779 Federated Securities Corp.
John B. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James F. Getz 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 R. Ball Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark W. Bloss 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
Mary J. Combs 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
Theodore Fadool, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Bryant R. Fisher 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
Christopher T. Fives Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and
Offices
Business Address With Underwriter With Registrant
Joseph T. Gibbons 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
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
Keith Nixon 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
Timothy C. Pillion 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
(1) (2) (3)
Name and Principal Positions and Offices Positions and
Offices
Business Address With Underwriter With Registrant
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
Brian L. Sullivan 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
Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Edmond Connell, Jr. Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Philip C. Hetzel Assistant Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
H. Joseph Kennedy 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
(c) Not applicable.
Item 30. Location of Accounts and Records (1).
Item 31. Management Services: Not applicable.
Item 32. Undertakings:
Registrant hereby undertakes to file a post-effective amendment,
using financial statements which need not be certified, within
four to six months from the effective date of Registrant's 1933
Act Registration Statement.
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.
1. Response is incorporated by reference to Registrant's Intitial
Registration Statement on Form N-1A filed February 4, 1994. (File Nos.
33-52149 and 811-7141).
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, WORLD INVESTMENT SERIES,
INC., has duly caused this Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, and its seal to be hereunto
affixed and attested, all in the City of Pittsburgh and Commonwealth of
Pennsylvania, on the 24th day of March, 1994.
WORLD INVESTMENT SERIES, INC.
BY: /s/Bryon F. Bowman
Bryon F. Bowman, Assistant Secretary
Attorney in Fact for John F. Donahue
March 24, 1994
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following person in the
capacity and on the date indicated:
NAME TITLE DATE
By: /s/Bryon F. Bowman
Bryon F. Bowman Attorney In Fact March 24, 1994
ASSISTANT SECRETARY Listed Below
NAME TITLE
John F. Donahue* Chairman and Director
(Chief Executive Officer)
Richard B. Fisher* President and Director
Edward C. Gonzales* Vice President and Treasurer
(Principal Financial and
Accounting Officer)
John T. Conroy, Jr.* Director
William J. Copeland* Director
James E. Dowd* Director
Lawrence D. Ellis, M.D.* Director
Edward L. Flaherty, Jr.* Director
Peter E. Madden* Director
Gregor F. Meyer* Director
Wesley W. Posvar* Director
Marjorie P. Smuts* Director
* By Power of Attorney
Exhibit 11 Under Form N-1A
Exhibit 23 Under Item 601/Reg S-K
Consent Of Ernst & Young, Independent Auditors
We consent to the reference to our firm under the caption "Independent
Auditors" and to the use of our report dated March 18, 1994 on the
statement of assets and liabilities in Pre-Effective Amendment Number 1 to
the Registration Statement (Form N-1A No. 33-52149) and the related
Prospectus of World Utility Fund ( a Portfolio of World Investment Series,
Inc.).
By: ERNST & YOUNG
Ernst & Young
March 23, 1994
Exhibit 10 Under Form N-1A
Exhibit 5 Under Item 601/Reg. S-K
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
March 23, 1994
The Board of Directors of
World Investment Series, Inc.
Federated Investors Tower
Pittsburgh, PA 15222-3779
Gentlemen:
World Investment Series, Inc. ("Corporation") proposes to
offer and sell shares of its common stock in a separate series known as
World Utility Fund consisting of two classes of shares, Class A Shares
and Fortress Shares, ("Fund") pursuant to the Corporation's registration
statement filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended.
As counsel we have participated in the organization of the
Corporation and the preparation of its amended registration statement
under the Securities Act of 1933 and the Investment Company Act of 1940.
Further, we have examined and are familiar with the Charter
of the Corporation, its Bylaws and other corporate records and documents
deemed relevant.
On the basis of the foregoing, it is our opinion that:
1. The Corporation has been duly organized and it is
legally existing under the laws of the State of Maryland.
2. The Corporation is authorized to issue 3,000,000,000
shares of common stock of a par value of $0.001 per share.
The Board of Directors of
World Investment Series, Inc.
Page 2
March 23, 1994
3. The authorized and unissued common stock of the
Corporation when issued in the manner described in the prospectus
comprising a part of the Corporation's registration statement under the
Securities Act of 1933 for consideration equal to or exceeding its par
value and not less than its net asset value as required by the Charter
of the Corporation will be legally issued and outstanding common stock
of the Corporation and will be fully paid and non-assessable.
We hereby consent to the filing of this opinion as a part of
the Corporation'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.
We further consent to the reference to this opinion and the
reference to us as Legal Counsel to the Corporation in the prospectus,
registration statements and applications.
Very truly yours,
HOUSTON, HOUSTON & DONNELLY
By: /s/ Thomas J. Donnelly
TJD/heh
Exhibit 5 under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
World Investment Series, Inc.
INVESTMENT ADVISORY CONTRACT
This Contract is made this 1st day of March, 1994, between
FEDERATED MANAGEMENT, a Delaware business trust having its principal
place of business in Pittsburgh, Pennsylvania (the "Adviser"), and WORLD
INVESTMENT SERIES, INC., a Maryland corporation having its principal
place of business in Pittsburgh, Pennsylvania (the "Corporation").
WHEREAS the Corporation is an open-end management investment
company as that term is defined in the Investment Company Act of
1940, as amended, and is registered as such with the Securities and
Exchange Commission; and
WHEREAS Adviser is engaged in the business of rendering investment
advisory and management services.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. The Corporation hereby appoints Adviser as Investment
Adviser for each of the portfolios ("Funds") of the Corporation which
executes an exhibit to this Contract, and Adviser accepts the
appointments. Subject to the direction of the Directors of the
Corporation, 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 Articles
of Incorporation and By-Laws of the Corporation 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 Corporation expenses, including,
without limitation, the expenses of organizing the Corporation and
continuing its existence; fees and expenses of Directors and officers of
the Corporation; fees for investment advisory services and
administrative personnel and services; expenses incurred in the
distribution of its shares ("Shares"), including expenses of
administrative support services; fees and expenses of preparing and
printing its Registration Statements under the Securities Act of 1933
and the Investment Company Act of 1940, as amended, and any amendments
thereto; expenses of registering and qualifying the Corporation, the
Funds, and Shares of the Funds under federal and state laws and
regulations; expenses of preparing, printing, and distributing
prospectuses (and any amendments thereto) to shareholders; interest
expense, taxes, fees, and commissions of every kind; expenses of issue
(including cost of Share certificates), purchase, repurchase, and
redemption of Shares, including expenses attributable to a program of
periodic issue; charges and expenses of custodians, transfer agents,
dividend disbursing agents, shareholder servicing agents, and
registrars; printing and mailing costs, auditing, accounting, and legal
expenses; reports to shareholders and governmental officers and
commissions; expenses of meetings of Directors 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 Corporation 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
Corporation to indemnify its officers and Directors 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 Directors of the
Corporation, including a majority of the Directors who are not parties
to this Contract or interested persons of any such party cast in person
at a meeting called for that purpose; and (b) Adviser shall not have
notified a Fund in writing at least sixty (60) days prior to the
anniversary date of this Contract in any year thereafter that it does
not desire such continuation with respect to that Fund. If a Fund is
added after the first approval by the Directors 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 Directors 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 Directors of the Corporation 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
Corporation 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 Directors of the Corporation, including a majority
of the Directors who are not parties to this Contract or interested
persons of any such party to this Contract (other than as Directors of
the Corporation) 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 Corporation and the Funds are hereby expressly put on
notice of the limitation of liability as set forth in the Articles of
Incorporation of the Adviser and agree that the obligations assumed by
the Adviser pursuant to this Contract shall be limited in any case to
the Adviser and its assets and, except to the extent expressly permitted
by the Investment Company Act of 1940, as amended, the Corporation and
the Funds shall not seek satisfaction of any such obligation from the
shareholders of the Adviser, the Directors, officers, employees, or
agents of the Adviser, or any of them.
13. The parties hereto acknowledge that Federated Investors, has
reserved the right to grant the non-exclusive use of the name
"Federated" or any derivative thereof to any other investment company,
investment company portfolio, investment adviser, distributor or other
business enterprise, and to withdraw from the Corporation and one or
more of the Funds the use of the name "Federated". The name "Federated"
will continue to be used by the Corporation and each Fund so long as
such use is mutually agreeable to Federated Investors and the
Corporation.
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.
EXHIBIT A
to the
Investment Advisory Contract
World Investment Series, Inc.
World Utility Fund
For all services rendered by Adviser hereunder, the above-named
Fund of the Corporation shall pay to Adviser and Adviser agrees to
accept as full compensation for all services rendered hereunder, an
annual investment advisory fee equal to 1.00 of 1% of the average daily
net assets of the Fund.
The portion of the fee based upon the average daily net assets of
the Fund shall be accrued daily at the rate of 1/365th of 1.00 of 1%
applied to the daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this 1st day of March, 1994.
Attest: FEDERATED MANAGEMENT
/s/ John W. McGonigle By:/s/ J. Thomas Madden
Secretary Executive Vice President
Attest: WORLD INVESTMENT SERIES, INC.
/s/ Byron F. Bowman By:/s/ J. Christopher
Donahue
Assistant Secretary Vice President
Exhibit 6(i) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
WORLD INVESTMENT SERIES, INC.
DISTRIBUTOR'S CONTRACT
AGREEMENT made this 1st day of March, 1994, by and between WORLD
INVESTMENT SERIES, INC. (the "Corporation"), a Maryland Corporation, 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 Corporation hereby appoints FSC as its agent to sell and
distribute shares of the Corporation 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 Corporation.
FSC hereby accepts such appointment and agrees to provide such other
services for the Corporation, if any, and accept such compensation from
the Corporation, 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 Corporation it is in its best interest
to do so.
3. Neither FSC nor any other person is authorized by the
Corporation 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 Corporation. 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 Corporation.
No person or dealer, other than FSC, is authorized to act as agent for
the Corporation for any purpose. FSC agrees that in offering or selling
Shares as agent of the Corporation, 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
Corporation copies of all sales literature before using the same and
will not use such sales literature if disapproved by the Corporation.
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 Directors of the Corporation including
a majority of the members of the Board of Directors of the Corporation
who are not interested persons of the Corporation and have no direct or
indirect financial interest in the operation of any Distribution Plan
relating to the Corporation or in any related documents to such Plan
(Directors) cast in person at a meeting called for that purpose. If a
Class is added after the first annual approval by the Directors 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 Directors 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 Directors 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
Corporation.
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, as amended, 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 Corporation 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 Directors of the Corporation including a
majority of the Disinterested Directors of the Corporation 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
Corporation 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 Corporation
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 Corporation pursuant to the foregoing paragraph, FSC shall
promptly notify the Corporation in writing of the institution of such
action and the Corporation shall assume the defense of such action,
including the employment of counsel selected by the Corporation 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 Corporation in connection with the defense
of such action or the Corporation 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 Corporation. Anything in this
paragraph to the contrary notwithstanding, the Corporation shall not be
liable for any settlement of any such claim of action effected without
its written consent. The Corporation agrees promptly to notify FSC of
the commencement of any litigation or proceedings against the
Corporation or any of its officers or Directors or controlling persons
in connection with the issue and sale of Shares or in connection with
the Registration Statement, Prospectuses, or SAIs.
(b) FSC agrees to indemnify and hold harmless the
Corporation, each of its Directors, each of its officers who have signed
the Registration Statement and each other person, if any, who controls
the Corporation 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 Corporation 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 Corporation 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
Corporation, and the Corporation 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 Corporation 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, as amended, for Directors, officers, FSC and controlling persons
of the Corporation by the Corporation pursuant to this Agreement, the
Corporation 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 Corporation 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 Directors, 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 Corporation 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/Director, FSC or controlling person of the Corporation 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 Corporation is insured against losses arising by reason of any
lawful advances; or (iii) a majority of a quorum of non-party
Disinterested Directors 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. 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.
12. 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
World Investment Series, Inc.
World Utility Fund - Class A Shares
In consideration of the mutual covenants set forth in the
Distributor's Contract dated March 1, 1994, between World Investment
Series, Inc. and Federated Securities Corp., World Investment Series,
Inc. executes and delivers this Exhibit on behalf of the Class A Shares
of World Utility Fund, first set forth in this Exhibit.
Witness the due execution hereof this 1st day of March, 1994.
ATTEST: WORLD INVESTMENT SERIES, INC.
/s/ John W. McGonigle By: /s/ Richard B. Fisher
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
/s/ S. Elliott Cohan By: /s/ John A. Staley, IV
Secretary Executive Vice President
(SEAL)
Exhibit B
to the
Distributor's Contract
World Investment Series, Inc.
World Utility Fund - Fortress Shares
The following provisions are hereby incorporated and made part of
the Distributor's Contract dated the 1st day of March, 1994, between
World Investment Series, Inc. and Federated Securities Corp. with
respect to Classes of the Funds set forth above.
1. The Corporation hereby appoints FSC to engage in activities
principally intended to result in the sale of shares of the above-listed
Classes ("Shares"). Pursuant to this appointment, FSC is authorized to
select a group of brokers ("Brokers") to sell Shares at the current
offering price thereof as described and set forth in the respective
prospectuses of the Corporation, and to render administrative support
services to the Corporation and its shareholders. In addition, FSC is
authorized to select a group of administrators ("Administrators") to
render administrative support services to the Corporation and its
shareholders.
2. Administrative support services may include, but are not
limited to, the following functions: 1) account openings: the Broker
or Administrator communicates account openings via computer terminals
located on the Broker's or Administrator's premises; 2) account
closings: the Broker or Administrator communicates account closings via
computer terminals; 3) enter purchase transactions: purchase
transactions are entered through the Broker's or Administrator's own
personal computer or through the use of a toll-free telephone number; 4)
enter redemption transactions: Broker or Administrator enters
redemption transactions in the same manner as purchases; 5) account
maintenance: Broker or Administrator provides or arranges to provide
accounting support for all transactions. Broker or Administrator also
wires funds and receives funds for Corporation share purchases and
redemptions, confirms and reconciles all transactions, reviews the
activity in the Corporation's accounts, and provides training and
supervision of its personnel; 6) interest posting: Broker or
Administrator posts and reinvests dividends to the Corporation's
accounts; 7) prospectus and shareholder reports: Broker or
Administrator maintains and distributes current copies of prospectuses
and shareholder reports; 8) advertisements: the Broker or Administrator
continuously advertises the availability of its services and products;
9) customer lists: the Broker or Administrator continuously provides
names of potential customers; 10) design services: the Broker or
Administrator continuously designs material to send to customers and
develops methods of making such materials accessible to customers; and
11) consultation services: the Broker or Administrator continuously
provides information about the product needs of customers.
3. During the term of this Agreement, the Corporation will pay
FSC for services pursuant to this Agreement, a monthly fee computed at
the annual rate of .25 of 1% of the average aggregate net asset value of
the shares of the World Utilty Fund - Fortress Shares held during the
month. For the month in which this Agreement becomes effective or
terminates, there shall be an appropriate proration of any fee payable
on the basis of the number of days that the Agreement is in effect
during the month.
4. FSC may from time-to-time and for such periods as it deems
appropriate reduce its compensation to the extent any Classes' expenses
exceed such lower expense limitation as FSC may, by notice to the
Corporation, voluntarily declare to be effective.
5. FSC will enter into separate written agreements with various
firms to provide certain of the services set forth in Paragraph 1
herein. FSC, in its sole discretion, may pay Brokers and Administrators
a periodic fee in respect of Shares owned from time to time by their
clients or customers. The schedules of such fees and the basis upon
which such fees will be paid shall be determined from time to time by
FSC in its sole discretion.
6. FSC will prepare reports to the Board of Directors of the
Corporation on a quarterly basis showing amounts expended hereunder
including amounts paid to Brokers and Administrators and the purpose for
such payments.
In consideration of the mutual covenants set forth in the
Distributor's Contract dated March 1, 1994, between World Investment
Series, Inc. and Federated Securities Corp., World Investment Series,
Inc. executes and delivers this Exhibit on behalf of the Funds, and with
respect to the separate Classes of Shares thereof, first set forth in
this Exhibit.
Witness the due execution hereof this 1st day of March, 1994.
ATTEST: World Investment Series, Inc.
/s/ John W. McGonigle By: /s/ Richard B. Fisher
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
/s/ S. Elliott Cohan By: /s/ John A. Staley, IV
Secretary Executive Vice President
(SEAL)
Exhibit 6(ii) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
WORLD INVESTMENT SERIES, INC.
SHAREHOLDER SERVICES PLAN
This Shareholder Services Plan ("Plan") is adopted as of this 1st
day of March, 1994, by the Board of Directors of WORLD INVESTMENT
SERIES, INC. (the "Fund"), a Maryland corporation with respect to
certain classes of shares ("Classes") of the portfolios of the
Corporation ("the Portfolios") set forth in exhibits hereto.
1. This Plan is adopted to allow the Fund to make payments as
contemplated herein to obtain certain personal services for shareholders
and/or the maintenance of shareholder accounts ("Services").
2. This Plan is designed to compensate broker/dealers and other
participating financial institutions and other persons ("Providers") for
providing services to the Fund and its shareholders. The Plan will be
administered by Federated Administrative Services, Inc. ("FAS"). In
compensation for the services provided pursuant to this Plan, Providers
will be paid a monthly fee computed at the annual rate not to exceed .25
of 1% of the average aggregate net asset value of the shares of the Fund
held during the month.
3. Any payments made by the Portfolios to any Provider pursuant
to this Plan will be made pursuant to the "Shareholder Services
Agreement" entered into by FAS on behalf of the Fund and the Provider.
Providers which have previously entered into "Administrative Agreements"
or "Rule 12b-1 Agreements" with Federated Securities Corp. may be
compensated under this Plan for Services performed pursuant to those
Agreements until the Providers have executed a "Shareholder Services
Agreement" hereunder.
4. The Fund has the right (i) to select, in its sole
discretion, the Providers to participate in the Plan and (ii) to
terminate without cause and in its sole discretion any Shareholder
Services Agreement.
5. Quarterly in each year that this Plan remains in effect, FAS
shall prepare and furnish to the Board of Directors of the Fund, and the
Board of Directors shall review, a written report of the amounts
expended under the Plan.
6. This Plan shall become effective (i) after approval by
majority votes of: (a) the Fund's Board of Directors; and (b) the
members of the Board of the Corporation who are not interested persons
of the Corporation and have no direct or indirect financial interest in
the operation of the Corporation's Plan or in any related documents to
the Plan ("Disinterested Directors"), cast in person at a meeting called
for the purpose of voting on the Plan; and (ii) upon execution of an
exhibit adopting this Plan.
7. This Plan shall remain in effect with respect to each Class
presently set forth on an exhibit and any subsequent Classes added
pursuant to an exhibit during the initial year of this Plan for the
period of one year from the date set forth above and may be continued
thereafter if this Plan is approved with respect to each Class at least
annually by a majority of the Corporation's Board of Directors and a
majority of the Disinterested Directors, cast in person at a meeting
called for the purpose of voting on such Plan. If this Plan is adopted
with respect to a class after the first annual approval by the Directors
as described above, this Plan will be effective as to that Class upon
execution of the applicable exhibit pursuant to the provisions of
paragraph 6(ii) above and will continue in effect until the next annual
approval of this Plan by the Directors and thereafter for successive
periods of one year subject to approval as described above.
8. All material amendments to this Plan must be approved by a
vote of the Board of Directors of the Fund and of the Disinterested
Directors, cast in person at a meeting called for the purpose of voting
on it.
9. This Plan may be terminated at any time by: (a) a majority
vote of the Disinterested Directors; or (b) a vote of a majority of the
outstanding voting securities of the Fund as defined in Section 2(a)(42)
of the Act.
10. While this Plan shall be in effect, the selection and
nomination of Disinterested Directors of the Fund shall be committed to
the discretion of the Disinterested Directors then in office.
11. All agreements with any person relating to the
implementation of this Plan shall be in writing and any agreement
related to this Plan shall be subject to termination, without penalty,
pursuant to the provisions of Paragraph 9 herein.
12. This Plan shall be construed in accordance with and governed
by the laws of the Commonwealth of Pennsylvania.
Witness the due execution hereof this 1st day of March, 1994.
WORLD INVESTMENT SERIES, INC.
By:/s/ Richard B. Fisher
President
EXHIBIT A
to the
Shareholder Services Plan
WORLD INVESTMENT SERIES, INC.
World Utilty Fund - Class A Shares
This Plan is adopted by World Investment Series, Inc. with respect
to the Shares of the Portfolio set forth above.
In compensation for the services provided pursuant to this Plan,
Providers will be paid a monthly fee computed at the annual rate of .25
of 1% of the average aggregate net asset value of the World Utility Fund
- Class A Shares held during the month.
Witness the due execution hereof this 1st day of March, 1994.
WORLD INVESTMENT SERIES, INC.
By:/s/ Richard B. Fisher
President
EXHIBIT B
to the
Shareholder Services Plan
WORLD INVESTMENT SERIES, INC.
Wold Utility Fund - Fortress Shares
This Plan is adopted by World Investment Series, Inc. with respect
to the Shares of the Portfolio set forth above.
In compensation for the services provided pursuant to this Plan,
Providers will be paid a monthly fee computed at the annual rate of .25
of 1% of the average aggregate net asset value of the Fortress Shares of
World Utility Fund held during the month.
Witness the due execution hereof this 1st day of March, 1994.
WORLD INVESTMENT SERIES, INC.
By:/s/ Richard B. Fisher
President
Exhibit 15(i) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
WORLD INVESTMENT SERIES, INC.
RULE 12b-1 PLAN
This Plan ("Plan") is adopted as of this 1st day of March, 1994,
by the Board of Directors of World Investment Series, Inc. (the
"Corporation"), a Maryland corporation with respect to certain classes
of shares ("Classes") of the portfolios of the Corporation (the "Funds")
set forth in exhibits hereto.
1. This Plan is adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended ("Act"), so as to allow the
Corporation to make payments as contemplated herein, in conjunction with
the distribution of Classes of the Funds ("Shares").
2. This Plan is designed to finance activities of Federated
Securities Corp. ("FSC") principally intended to result in the sale of
Shares to include: (a) providing incentives to financial institutions
("Institutions") to sell Shares; (b) advertising and marketing of Shares
to include preparing, printing and distributing prospectuses and sales
literature to prospective shareholders and with Institutions; and (c)
implementing and operating the Plan. In compensation for services
provided pursuant to this Plan, FSC will be paid a fee in respect of the
following Classes set forth on the applicable exhibit.
3. Any payment to FSC in accordance with this Plan will be made
pursuant to the "Distributor's Contract" entered into by the Corporation
and FSC. Any payments made by FSC to Institutions with funds received
as compensation under this Plan will be made pursuant to the "Rule 12b-1
Agreement" entered into by FSC and the Institution.
4. FSC has the right (i) to select, in its sole discretion, the
Institutions to participate in the Plan and (ii) to terminate without
cause and in its sole discretion any Rule 12b-1 Agreement.
5. Quarterly in each year that this Plan remains in effect, FSC
shall prepare and furnish to the Board of Directors of the Corporation,
and the Board of Directors shall review, a written report of the amounts
expended under the Plan and the purpose for which such expenditures were
made.
6. This Plan shall become effective with respect to each Class
(i) after approval by majority votes of: (a) the Corporation's Board of
Directors; (b) the members of the Board of the Corporation who are not
interested persons of the Corporation and have no direct or indirect
financial interest in the operation of the Corporation's Plan or in any
related documents to the Plan ("Disinterested Directors"), cast in
person at a meeting called for the purpose of voting on the Plan; and
(c) the outstanding voting securities of the particular Class, as
defined in Section 2(a)(42) of the Act and (ii) upon execution of an
exhibit adopting this Plan with respect to such Class.
7. This Plan shall remain in effect with respect to each Class
presently set forth on an exhibit and any subsequent Classes added
pursuant to an exhibit during the initial year of this Plan for the
period of one year from the date set forth above and may be continued
thereafter if this Plan is approved with respect to each Class at least
annually by a majority of the Corporation's Board of Directors and a
majority of the Disinterested Directors, cast in person at a meeting
called for the purpose of voting on such Plan. If this Plan is adopted
with respect to a Class after the first annual approval by the Directors
as described above, this Plan will be effective as to that Class upon
execution of the applicable exhibit pursuant to the provisions of
paragraph 6(ii) above and will continue in effect until the next annual
approval of this Plan by the Directors and thereafter for successive
periods of one year subject to approval as described above.
8. All material amendments to this Plan must be approved by a
vote of the Board of Directors of the Corporation and of the
Disinterested Directors, cast in person at a meeting called for the
purpose of voting on it.
9. This Plan may not be amended in order to increase materially
the costs which the Classes may bear for distribution pursuant to the
Plan without being approved by a majority vote of the outstanding voting
securities of the Classes as defined in Section 2(a)(42) of the Act.
10. This Plan may be terminated with respect to a particular
Class at any time by: (a) a majority vote of the Disinterested
Directors; or (b) a vote of a majority of the outstanding voting
securities of the particular Class as defined in Section 2(a)(42) of the
Act; or (c) by FSC on 60 days' notice to the Corporation.
11. While this Plan shall be in effect, the selection and
nomination of Disinterested Directors of the Corporation shall be
committed to the discretion of the Disinterested Directors then in
office.
12. All agreements with any person relating to the
implementation of this Plan shall be in writing and any agreement
related to this Plan shall be subject to termination, without penalty,
pursuant to the provisions of Paragraph 10 herein.
13. This Plan shall be construed in accordance with and governed
by the laws of the Commonwealth of Pennsylvania.
EXHIBIT A
to the
Rule 12b-1 Plan
WORLD INVESTMENT SERIES, INC.
World Utility Fund - Fortress Shares
This Plan is adopted by World Investment Series, Inc. with respect
to the Class of Shares of the Corporation set forth above.
In compensation for the services provided pursuant to this Plan,
FSC will be paid a monthly fee computed at the annual rate of .25 of 1%
of the average aggregate net asset value of the Fortress Shares of World
Utility Fund held during the month.
Witness the due execution hereof this 1st day of March, 1994.
WORLD INVESTMENT SERIES, INC.
By:/s/ Richard B. Fisher
President
Exhibit 8 under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
CUSTODIAN CONTRACT
Between
FEDERATED INVESTMENT COMPANIES
and
STATE STREET BANK AND TRUST COMPANY
and
FEDERATED SERVICES COMPANY
TABLE OF CONTENTS
Page
1. Employment of Custodian and Property to be Held by It
1
2. Duties of the Custodian With Respect to Property
of the Funds Held by the Custodian
2
2.1
Holding Securities
2
2.2
Delivery of Securities
2
2.3
Registration of Securities
5
2.4
Bank Accounts
6
2.5
Payments for Shares
7
2.6
Availability of Federal Funds
7
2.7
Collection of Income
7
2.8
Payment of Fund Moneys
8
2.9
Liability for Payment in Advance of
Receipt of Securities Purchased.
9
2.10
Payments for Repurchases or Redemptions
of Shares of a Fund
9
2.11
Appointment of Agents
10
2.12
Deposit of Fund Assets in Securities System
10
2.13
Segregated Account
12
2.14
Joint Repurchase Agreements
13
2.15
Ownership Certificates for Tax Purposes
13
2.16
Proxies
13
2.17
Communications Relating to Fund Portfolio Securities
13
2.18
Proper Instructions
14
2.19
Actions Permitted Without Express Authority
14
2.20
Evidence of Authority
15
2.21
Notice to Trust by Custodian Regarding Cash Movement.
15
3. Duties of Custodian With Respect to the Books of
Account and
Calculation of Net Asset Value and Net Income
15
4. Records
16
5. Opinion of Funds' Independent Public
Accountants/Auditors
16
6. Reports to Trust by Independent Public
Accountants/Auditors
17
7. Compensation of Custodian
17
8. Responsibility of Custodian
17
9. Effective Period, Termination and Amendment
19
10. Successor Custodian
20
11. Interpretive and Additional Provisions
21
12. Massachusetts Law to Apply
22
13. Notices
22
14. Counterparts
22
15. Limitations of Liability
22
CUSTODIAN CONTRACT
This Contract between those INVESTMENT COMPANIES listed on
Exhibit 1, as it may be amended from time to time, (the
"Trust"), which may be Massachusetts business trusts or
Maryland corporations or have such other form of
organization as may be indicated, on behalf of the
portfolios (hereinafter collectively called the "Funds" and
individually referred to as a "Fund") of the Trust, having
its principal place of business at Federated Investors
Tower, Pittsburgh, Pennsylvania, 15222-3779, and STATE
STREET BANK AND TRUST COMPANY, a Massachusetts trust
company, having its principal place of business at 225
Franklin Street, Boston, Massachusetts, 02110, hereinafter
called the "Custodian", and FEDERATED SERVICES COMPANY, a
Delaware Fusiness trust company, having its principal place
of business at Federated Investors Tower, Pittsburgh,
Pennsylvania, 15222-3779, hereinafter called ("Company").
WITNESSETH: That in consideration of the mutual covenants
and agreements hereinafter contained, the parties hereto
agree as follows:
1. Employment of Custodian and Property to be Held by It
The Trust hereby employs the Custodian as the custodian
of the assets of each of the Funds of the Trust. Except
as otherwise expressly provided herein, the securities
and other assets of each of the Funds shall be segregated
from the assets of each of the other Funds and from all
other persons and entities. The Trust will deliver to
the Custodian all securities and cash owned by the Funds
and all payments of income, payments of principal or
capital distributions received by them with respect to
all securities owned by the Funds from time to time, and
the cash consideration received by them for shares
("Shares") of beneficial interest/capital stock of the
Funds as may be issued or sold from time to time. The
Custodian shall not be responsible for any property of
the Funds held or received by the Funds and not delivered
to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning
of Section 2.18), the Custodian shall from time to time
employ one or more sub-custodians upon the terms
specified in the Proper Instructions, provided that the
Custodian shall have no more or less responsibility or
liability to the Trust or any of the Funds on account of
any actions or omissions of any sub-custodian so employed
than any such sub-custodian has to the Custodian.
2.
Duties of the Custodian With Respect to Property of the
Funds Held by the Custodian
2.1 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/Directors
("Board") of the Trust. Such funds shall be
deposited by the Custodian in its capacity as
Custodian for the Fund and shall be withdrawable by
the Custodian only in that capacity. If requested by
the Trust, the Custodian shall furnish the Trust, not
later than twenty (20) days after the last business
day of each month, an internal reconciliation of the
closing balance as of that day in all accounts
described in this section to the balance shown on the
daily cash report for that day rendered to the Trust.
2.5 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/Articles of Incorporation and
any applicable votes of the Board of the Trust
pursuant thereto, the Custodian shall, upon receipt
of instructions from the Transfer Agent, make funds
available for payment to holders of shares of such
Fund who have delivered to the Transfer Agent a
request for redemption or repurchase of their shares
including without limitation through bank drafts,
automated clearinghouse facilities, or by other
means. In connection with the redemption or
repurchase of Shares of the Funds, the Custodian is
authorized upon receipt of instructions from the
Transfer Agent to wire funds to or through a
commercial bank designated by the redeeming
shareholders.
2.11
Appointment of Agents. The Custodian may at any time
or times in its discretion appoint (and may at any
time remove) any other bank or trust company which is
itself qualified under the 1940 Act and any
applicable state law or regulation, to act as a
custodian, as its agent to carry out such of the
provisions of this Section 2 as the Custodian may
from time to time direct; provided, however, that the
appointment of any agent shall not relieve the
Custodian of its responsibilities or liabilities
hereunder.
2.12
Deposit of Fund Assets in Securities System. The
Custodian may deposit and/or maintain securities
owned by the Funds in a clearing agency registered
with the Securities and Exchange Commission ("SEC")
under Section 17A of the Exchange Act, which acts as
a securities depository, or in the book-entry system
authorized by the U.S. Department of the Treasury and
certain federal agencies, collectively referred to
herein as "Securities System" in accordance with
applicable Federal Reserve Board and SEC rules and
regulations, if any, and subject to the following
provisions:
(1) The Custodian may keep securities of each Fund in
a Securities System provided that such securities
are represented in an account ("Account") of the
Custodian in the Securities System which shall
not include any assets of the Custodian other
than assets held as a fiduciary, custodian or
otherwise for customers;
(2) The records of the Custodian with respect to
securities of the Funds which are maintained in a
Securities System shall identify by book-entry
those securities belonging to each Fund;
(3) The Custodian shall pay for securities purchased
for the account of each Fund upon (i) receipt of
advice from the Securities System that such
securities have been transferred to the Account,
and (ii) the making of an entry on the records of
the Custodian to reflect such payment and
transfer for the account of the Fund. The
Custodian shall transfer securities sold for the
account of a Fund upon (i) receipt of advice from
the Securities System that payment for such
securities has been transferred to the Account,
and (ii) the making of an entry on the records of
the Custodian to reflect such transfer and
payment for the account of the Fund. Copies of
all advices from the Securities System of
transfers of securities for the account of a Fund
shall identify the Fund, be maintained for the
Fund by the Custodian and be provided to the
Trust at its request. Upon request, the
Custodian shall furnish the Trust confirmation of
each transfer to or from the account of a Fund in
the form of a written advice or notice and shall
furnish to the Trust copies of daily transaction
sheets reflecting each day's transactions in the
Securities System for the account of a Fund.
(4) The Custodian shall provide the Trust with any
report obtained by the Custodian on the
Securities System's accounting system, internal
accounting control and procedures for
safeguarding securities deposited in the
Securities System;
(5) The Custodian shall have received the initial
certificate, required by Section 9 hereof;
(6) Anything to the contrary in this Contract
notwithstanding, the Custodian shall be liable to
the Trust for any loss or damage to a Fund
resulting from use of the Securities System by
reason of any negligence, misfeasance or
misconduct of the Custodian or any of its agents
or of any of its or their employees or from
failure of the Custodian or any such agent to
enforce effectively such rights as it may have
against the Securities System; at the election of
the Trust, it shall be entitled to be subrogated
to the rights of the Custodian with respect to
any claim against the Securities System or any
other person which the Custodian may have as a
consequence of any such loss or damage if and to
the extent that a Fund has not been made whole
for any such loss or damage.
(7) The authorization contained in this Section 2.12
shall not relieve the Custodian from using
reasonable care and diligence in making use of
any Securities System.
2.13
Segregated Account. The Custodian shall upon receipt
of Proper Instructions establish and maintain a
segregated account or accounts for and on behalf of
each Fund, into which account or accounts may be
transferred cash and/or securities, including
securities maintained in an account by the Custodian
pursuant to Section 2.12 hereof, (i) in accordance
with the provisions of any agreement among the Trust,
the Custodian and a broker-dealer registered under
the Exchange Act and a member of the NASD (or any
futures commission merchant registered under the
Commodity Exchange Act), relating to compliance with
the rules of The Options Clearing Corporation and of
any registered national securities exchange (or the
Commodity Futures Trading Commission or any
registered contract market), or of any similar
organization or organizations, regarding escrow or
other arrangements in connection with transactions
for a Fund, (ii) for purpose of segregating cash or
government securities in connection with options
purchased, sold or written for a Fund or commodity
futures contracts or options thereon purchased or
sold for a Fund, (iii) for the purpose of compliance
by the Trust or a Fund with the procedures required
by any release or releases of the SEC relating to the
maintenance of segregated accounts by registered
investment companies and (iv) for other proper
corporate purposes, but only, in the case of clause
(iv), upon receipt of, in addition to Proper
Instructions, a certified copy of a resolution of the
Board or of the Executive Committee signed by an
officer of the Trust and certified by the Secretary
or an Assistant Secretary, setting forth the purpose
or purposes of such segregated account and declaring
such purposes to be proper corporate purposes.
2.14
Joint Repurchase Agreements. Upon the receipt of
Proper Instructions, the Custodian shall deposit
and/or maintain any assets of a Fund and any
affiliated funds which are subject to joint
repurchase transactions in an account established
solely for such transactions for the Fund and its
affiliated funds. For purposes of this Section 2.14,
"affiliated funds" shall include all investment
companies and their portfolios for which subsidiaries
or affiliates of Federated Investors serve as
investment advisers, distributors or administrators
in accordance with applicable exemptive orders from
the SEC. The requirements of segregation set forth
in Section 2.1 shall be deemed to be waived with
respect to such assets.
2.15
Ownership Certificates for Tax Purposes. The
Custodian shall execute ownership and other
certificates and affidavits for all federal and state
tax purposes in connection with receipt of income or
other payments with respect to securities of a Fund
held by it and in connection with transfers of
securities.
2.16
Proxies. The Custodian shall, with respect to the
securities held hereunder, cause to be promptly
executed by the registered holder of such securities,
if the securities are registered otherwise than in
the name of a Fund or a nominee of a Fund, all
proxies, without indication of the manner in which
such proxies are to be voted, and shall promptly
deliver to the Trust such proxies, all proxy
soliciting materials and all notices relating to such
securities.
2.17
Communications Relating to Fund Portfolio Securities.
The Custodian shall transmit promptly to the Trust
all written information (including, without
limitation, pendency of calls and maturities of
securities and expirations of rights in connection
therewith and notices of exercise of call and put
options written by the Fund and the maturity of
futures contracts purchased or sold by the Fund)
received by the Custodian from issuers of the
securities being held for the Fund. With respect to
tender or exchange offers, the Custodian shall
transmit promptly to the Trust all written
information received by the Custodian from issuers of
the securities whose tender or exchange is sought and
from the party (or his agents) making the tender or
exchange offer. If the Trust desires to take action
with respect to any tender offer, exchange offer or
any other similar transaction, the Trust shall notify
the Custodian in writing at least three business days
prior to the date on which the Custodian is to take
such action. However, the Custodian shall
nevertheless exercise its best efforts to take such
action in the event that notification is received
three business days or less prior to the date on
which action is required.
2.18
Proper Instructions. Proper Instructions as used
throughout this Section 2 means a writing signed or
initialed by one or more person or persons as the
Board shall have from time to time authorized. Each
such writing shall set forth the specific transaction
or type of transaction involved. Oral instructions
will be deemed to be Proper Instructions if (a) the
Custodian reasonably believes them to have been given
by a person previously authorized in Proper
Instructions to give such instructions with respect
to the transaction involved, and (b) the Trust
promptly causes such oral instructions to be
confirmed in writing. Upon receipt of a certificate
of the Secretary or an Assistant Secretary as to the
authorization by the Board of the Trust accompanied
by a detailed description of procedures approved by
the Board, Proper Instructions may include
communications effected directly between
electro-mechanical or electronic devices provided
that the Board and the Custodian are satisfied that
such procedures afford adequate safeguards for a
Fund's assets.
2.19
Actions Permitted Without Express Authority. The
Custodian may in its discretion, without express
authority from the Trust:
(1) make payments to itself or others for minor
expenses of handling securities or other similar
items relating to its duties under this Contract,
provided that all such payments shall be
accounted for to the Trust in such form that it
may be allocated to the affected Fund;
(2) surrender securities in temporary form for
securities in definitive form;
(3) endorse for collection, in the name of a Fund,
checks, drafts and other negotiable instruments;
and
(4) in general, attend to all non-discretionary
details in connection with the sale, exchange,
substitution, purchase, transfer and other
dealings with the securities and property of each
Fund except as otherwise directed by the Trust.
2.20
Evidence of Authority. The Custodian shall be
protected in acting upon any instructions, notice,
request, consent, certificate or other instrument or
paper reasonably believed by it to be genuine and to
have been properly executed on behalf of a Fund. The
Custodian may receive and accept a certified copy of
a vote of the Board of the Trust as conclusive
evidence (a) of the authority of any person to act in
accordance with such vote or (b) of any determination
of or any action by the Board pursuant to the
Declaration of Trust/Articles of Incorporation as
described in such vote, and such vote may be
considered as in full force and effect until receipt
by the Custodian of written notice to the contrary.
2.21
Notice to Trust by Custodian Regarding Cash Movement.
The Custodian will provide timely notification to the
Trust of any receipt of cash, income or payments to
the Trust and the release of cash or payment by the
Trust.
3.
Duties of Custodian With Respect to the Books of Account
and Calculation of Net Asset Value and Net Income.
The Custodian shall cooperate with and supply necessary
information to the entity or entities appointed by the
Board of the Trust to keep the books of account of each
Fund and/or compute the net asset value per share of the
outstanding Shares of each Fund or, if directed in
writing to do so by the Trust, shall itself keep such
books of account and/or compute such net asset value per
share. If so directed, the Custodian shall also
calculate daily the net income of a Fund as described in
the Fund's currently effective prospectus and Statement
of Additional Information ("Prospectus") and shall advise
the Trust and the Transfer Agent daily of the total
amounts of such net income and, if instructed in writing
by an officer of the Trust to do so, shall advise the
Transfer Agent periodically of the division of such net
income among its various components. The calculations of
the net asset value per share and the daily income of a
Fund shall be made at the time or times described from
time to time in the Fund's currently effective
Prospectus.
4. Records.
The Custodian shall create and maintain all records
relating to its activities and obligations under this
Contract in such manner as will meet the obligations of
the Trust and the Funds under the 1940 Act, with
particular attention to Section 31 thereof and Rules
31a-1 and 31a-2 thereunder, and specifically including
identified cost records used for tax purposes. All such
records shall be the property of the Trust and shall at
all times during the regular business hours of the
Custodian be open for inspection by duly authorized
officers, employees or agents of the Trust and employees
and agents of the SEC. In the event of termination of
this Contract, the Custodian will deliver all such
records to the Trust, to a successor Custodian, or to
such other person as the Trust may direct. The Custodian
shall supply daily to the Trust a tabulation of
securities owned by a Fund and held by the Custodian and
shall, when requested to do so by the Trust and for such
compensation as shall be agreed upon between the Trust
and the Custodian, include certificate numbers in such
tabulations.
5. Opinion of Funds' Independent Public
Accountants/Auditors.
The Custodian shall take all reasonable action, as the
Trust may from time to time request, to obtain from year
to year favorable opinions from each Fund's independent
public accountants/auditors with respect to its
activities hereunder in connection with the preparation
of the Fund's registration statement, periodic reports,
or any other reports to the SEC and with respect to any
other requirements of such Commission.
6. Reports to Trust by Independent Public
Accountants/Auditors.
The Custodian shall provide the Trust, at such times as
the Trust may reasonably require, with reports by
independent public accountants/auditors for each Fund on
the accounting system, internal accounting control and
procedures for safeguarding securities, futures contracts
and options on futures contracts, including securities
deposited and/or maintained in a Securities System,
relating to the services provided by the Custodian for
the Fund under this Contract; such reports shall be of
sufficient scope and in sufficient detail, as may
reasonably be required by the Trust, to provide
reasonable assurance that any material inadequacies would
be disclosed by such examination and, if there are no
such inadequacies, the reports shall so state.
7. Compensation of Custodian.
The Custodian shall be entitled to reasonable
compensation for its services and expenses as Custodian,
as agreed upon from time to time between Company and the
Custodian.
8. Responsibility of Custodian.
The Custodian shall be held to a standard of reasonable
care in carrying out the provisions of this Contract;
provided, however, that the Custodian shall be held to
any higher standard of care which would be imposed upon
the Custodian by any applicable law or regulation if such
above stated standard of reasonable care was not part of
this Contract. The Custodian shall be entitled to rely
on and may act upon advice of counsel (who may be counsel
for the Trust) on all matters, and shall be without
liability for any action reasonably taken or omitted
pursuant to such advice, provided that such action is not
in violation of applicable federal or state laws or
regulations, and is in good faith and without negligence.
Subject to the limitations set forth in Section 15
hereof, the Custodian shall be kept indemnified by the
Trust but only from the assets of the Fund involved in
the issue at hand and be without liability for any action
taken or thing done by it in carrying out the terms and
provisions of this Contract in accordance with the above
standards.
In order that the indemnification provisions contained in
this Section 8 shall apply, however, it is understood
that if in any case the Trust may be asked to indemnify
or save the Custodian harmless, the Trust shall be fully
and promptly advised of all pertinent facts concerning
the situation in question, and it is further understood
that the Custodian will use all reasonable care to
identify and notify the Trust promptly concerning any
situation which presents or appears likely to present the
probability of such a claim for indemnification. The
Trust shall have the option to defend the Custodian
against any claim which may be the subject of this
indemnification, and in the event that the Trust so
elects it will so notify the Custodian and thereupon the
Trust shall take over complete defense of the claim, and
the Custodian shall in such situation initiate no further
legal or other expenses for which it shall seek
indemnification under this Section. The Custodian shall
in no case confess any claim or make any compromise in
any case in which the Trust will be asked to indemnify
the Custodian except with the Trust's prior written
consent.
Notwithstanding the foregoing, the responsibility of the
Custodian with respect to redemptions effected by check
shall be in accordance with a separate Agreement entered
into between the Custodian and the Trust.
If the Trust requires the Custodian to take any action
with respect to securities, which action involves the
payment of money or which action may, in the reasonable
opinion of the Custodian, result in the Custodian or its
nominee assigned to a Fund being liable for the payment
of money or incurring liability of some other form, the
Custodian may request the Trust, as a prerequisite to
requiring the Custodian to take such action, to provide
indemnity to the Custodian in an amount and form
satisfactory to the Custodian.
Subject to the limitations set forth in Section 15
hereof, the Trust agrees to indemnify and hold harmless
the Custodian and its nominee from and against all taxes,
charges, expenses, assessments, claims and liabilities
(including counsel fees) (referred to herein as
authorized charges) incurred or assessed against it or
its nominee in connection with the performance of this
Contract, except such as may arise from it or its
nominee's own failure to act in accordance with the
standard of reasonable care or any higher standard of
care which would be imposed upon the Custodian by any
applicable law or regulation if such above-stated
standard of reasonable care were not part of this
Contract. To secure any authorized charges and any
advances of cash or securities made by the Custodian to
or for the benefit of a Fund for any purpose which
results in the Fund incurring an overdraft at the end of
any business day or for extraordinary or emergency
purposes during any business day, the Trust hereby grants
to the Custodian a security interest in and pledges to
the Custodian securities held for the Fund by the
Custodian, in an amount not to exceed 10 percent of the
Fund's gross assets, the specific securities to be
designated in writing from time to time by the Trust or
the Fund's investment adviser. Should the Trust fail to
make such designation, or should it instruct the
Custodian to make advances exceeding the percentage
amount set forth above and should the Custodian do so,
the Trust hereby agrees that the Custodian shall have a
security interest in all securities or other property
purchased for a Fund with the advances by the Custodian,
which securities or property shall be deemed to be
pledged to the Custodian, and the written instructions of
the Trust instructing their purchase shall be considered
the requisite description and designation of the property
so pledged for purposes of the requirements of the
Uniform Commercial Code. Should the Trust fail to cause
a Fund to repay promptly any authorized charges or
advances of cash or securities, subject to the provision
of the second paragraph of this Section 8 regarding
indemnification, the Custodian shall be entitled to use
available cash and to dispose of pledged securities and
property as is necessary to repay any such advances.
9. Effective Period, Termination and Amendment.
This Contract shall become effective as of its execution,
shall continue in full force and effect until terminated
as hereinafter provided, may be amended at any time by
mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing
delivered or mailed, postage prepaid to the other party,
such termination to take effect not sooner than sixty
(60) days after the date of such delivery or mailing;
provided, however that the Custodian shall not act under
Section 2.12 hereof in the absence of receipt of an
initial certificate of the Secretary or an Assistant
Secretary that the Board of the Trust has approved the
initial use of a particular Securities System as required
in each case by Rule 17f-4 under the 1940 Act; provided
further, however, that the Trust shall not amend or
terminate this Contract in contravention of any
applicable federal or state regulations, or any provision
of the Declaration of Trust/Articles of Incorporation,
and further provided, that the Trust may at any time by
action of its Board (i) substitute another bank or trust
company for the Custodian by giving notice as described
above to the Custodian, or (ii) immediately terminate
this Contract in the event of the appointment of a
conservator or receiver for the Custodian by the
appropriate banking regulatory agency or upon the
happening of a like event at the direction of an
appropriate regulatory agency or court of competent
jurisdiction.
Upon termination of the Contract, the Trust shall pay to
the Custodian such compensation as may be due as of the
date of such termination and shall likewise reimburse the
Custodian for its costs, expenses and disbursements.
10. Successor Custodian.
If a successor custodian shall be appointed by the Board
of the Trust, the Custodian shall, upon termination,
deliver to such successor custodian at the office of the
Custodian, duly endorsed and in the form for transfer,
all securities then held by it hereunder for each Fund
and shall transfer to separate accounts of the successor
custodian all of each Fund's securities held in a
Securities System.
If no such successor custodian shall be appointed, the
Custodian shall, in like manner, upon receipt of a
certified copy of a vote of the Board of the Trust,
deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with
such vote.
In the event that no written order designating a
successor custodian or certified copy of a vote of the
Board shall have been delivered to the Custodian on or
before the date when such termination shall become
effective, then the Custodian shall have the right to
deliver to a bank or trust company, which is a "bank" as
defined in the 1940 Act, (delete "doing business ...
Massachusetts" unless SSBT is the Custodian) doing
business in Boston, Massachusetts, of its own selection,
having an aggregate capital, surplus, and undivided
profits, as shown by its last published report, of not
less than $100,000,000, all securities, funds and other
properties held by the Custodian and all instruments held
by the Custodian relative thereto and all other property
held by it under this Contract for each Fund and to
transfer to separate accounts of such successor
custodian all of each Fund's securities held in any
Securities System. Thereafter, such bank or trust
company shall be the successor of the Custodian under
this Contract.
In the event that securities, funds and other properties
remain in the possession of the Custodian after the date
of termination hereof owing to failure of the Trust to
procure the certified copy of the vote referred to or of
the Board to appoint a successor custodian, the Custodian
shall be entitled to fair compensation for its services
during such period as the Custodian retains possession of
such securities, funds and other properties and the
provisions of this Contract relating to the duties and
obligations of the Custodian shall remain in full force
and effect.
11. Interpretive and Additional Provisions.
In connection with the operation of this Contract, the
Custodian and the Trust may from time to time agree on
such provisions interpretive of or in addition to the
provisions of this Contract as may in their joint opinion
be consistent with the general tenor of this Contract.
Any such interpretive or additional provisions shall be
in a writing signed by both parties and shall be annexed
hereto, provided that no such interpretive or additional
provisions shall contravene any applicable federal or
state regulations or any provision of the Declaration of
Trust/Articles of Incorporation. No interpretive or
additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this
Contract.
12. Massachusetts Law to Apply.
This Contract shall be construed and the provisions
thereof interpreted under and in accordance with laws of
The Commonwealth of Massachusetts.
13. Notices.
Except as otherwise specifically provided herein, Notices
and other writings delivered or mailed postage prepaid to
the Trust at Federated Investors Tower, Pittsburgh,
Pennsylvania, 15222-3779, or to the Custodian at address
for SSBT only: 225 Franklin Street, Boston,
Massachusetts, 02110, or to such other address as the
Trust or the Custodian may hereafter specify, shall be
deemed to have been properly delivered or given hereunder
to the respective address.
14. Counterparts.
This Contract may be executed simultaneously in two or
more counterparts, each of which shall be deemed an
original.
15. Limitations of Liability.
The Custodian is expressly put on notice of the
limitation of liability as set forth in Article XI of the
Declaration of Trust of those Trusts which are business
trusts and agrees that the obligations and liabilities
assumed by the Trust and any Fund pursuant to this
Contract, including, without limitation, any obligation
or liability to indemnify the Custodian pursuant to
Section 8 hereof, shall be limited in any case to the
relevant Fund and its assets and that the Custodian shall
not seek satisfaction of any such obligation from the
shareholders of the relevant Fund, from any other Fund or
its shareholders or from the Trustees, Officers,
employees or agents of the Trust, or any of them. In
addition, in connection with the discharge and
satisfaction of any claim made by the Custodian against
the Trust, for whatever reasons, involving more than one
Fund, the Trust shall have the exclusive right to
determine the appropriate allocations of liability for
any such claim between or among the Funds.
IN WITNESS WHEREOF, each of the parties has caused this
instrument to be executed in its name and behalf by its duly
authorized representative and its seal to be hereunder
affixed effective as of the 1st day of December, 1993.
ATTEST: INVESTMENT COMPANIES (Except those
listed below)
/s/John W. McGonigle_________ By /s/John F. Donahue_____________
John W. McGonigle John F. Donahue
Secretary Chairman
ATTEST: STATE STREET BANK AND TRUST
COMPANY
/s/ Ed McKenzie______________ By /s/ F. J. Sidoti,
Jr._________________
(Assistant) Secretary Typed Name: Frank J. Sidoti, Jr.
Typed Name: Ed McKenzie Title: Vice President
ATTEST: FEDERATED SERVICES COMPANIY
/s/ Jeannette Fisher-Garber______ By /s/ James J.
Dolan________________
Jeannette Fisher-Garber James J. Dolan
Secretary President
EXHIBIT 1
Table
s c c
CONTRACT FEE
DATE INVESTMENT COMPANY
SCHEDULE
12/1/93 111 Corcoran Funds 2
12/1/93 111 Corcoran Bond Fund 2
12/1/93 111 Corcoran North Carolina Municipal Securities Fund 2
12/13/93 Alexander Hamilton Funds 2
12/13/93 Alexander Hamilton Government Income Fund 2
12/13/93 Alexander Hamilton Equity Growth and Income Fund 2
12/13/93 Alexander Hamilton Fund 2
12/1/93 American Leaders Fund, Inc. 1
12/1/93 Class A Shares 1
12/1/93 Class C Shares 1
12/1/93 Fortress Shares 1
12/1/93 Automated Cash Management Trust 1
12/1/93 Automated Government Money Trust 1
12/1/93 California Municipal Cash Trust 1
Cambridge Series Trust 1
Has a separate Cambridge Capital Growth Portfolio 1
contract with Class A 1
SSB - included Class B 1
for fee infor- Cambridge Government Income Portfolio 1
mation purposes Class A 1
only Class B 1
Cambridge Growth Portfolio 1
Class A 1
Class B 1
Cambridge Income and Growth Portfolio 1
Class A 1
Class B 1
Cambridge Municipal Income Portfolio 1
Class A 1
Class B 1
12/1/93 Cash Trust Series, Inc. 1
12/1/93 Government Cash Series 1
12/1/93 Municipal Cash Series 1
12/1/93 Prime Cash Series 1
12/1/93 Treasury Cash Series 1
12/1/93 Cash Trust Series II 1
12/1/93 Municipal Cash Series II 1
12/1/93 Treasury Cash Series II 1
12/1/93 DG Investor Series 2
12/1/93 DG Equity Fund 2
12/1/93 DG Government Income Fund 2
12/1/93 DG Limited Term Government Income Fund 2
12/1/93 DG Municipal Income Fund 2
12/1/93 DG U.S. Government Money Market Fund 2
12/1/93 Edward D. Jones & Co. Daily Passport Cash Trust 1
12/1/93 Federated ARMs Fund 1
12/1/93 Institutional Service Shares 1
12/1/93 Institutional Shares 1
12/1/93 Federated Bond Fund 1
12/1/93 Federated Exchange Fund, Ltd. 1
12/1/93 Federated GNMA Trust 1
12/1/93 Institutional Service Shares 1
12/1/93 Institutional Shares 1
12/1/93 Federated Government Trust 1
12/1/93 Automated Government Cash Reserves 1
12/1/93 Automated Treasury Cash Reserves 1
12/1/93 U.S. Treasury Cash Reserves 1
12/1/93 Federated Growth Trust 1
12/1/93 Federated High Yield Trust 1
12/1/93 Federated Income Securities Trust 1
12/1/93 Federated Short-Term Income Fund 1
12/1/93 Institutional Service Shares 1
12/1/93 Institutional Shares 1
12/1/93 Federated Income Trust 1
12/1/93 Institutional Service Shares 1
12/1/93 Institutional Shares 1
12/1/93 Federated Index Trust 1
12/1/93 Max-Cap Fund 1
12/1/93 Institutional Service Shares 1
12/1/93 Institutional Shares 1
12/1/93 Mid-Cap Fund 1
12/1/93 Mini-Cap Fund 1
12/1/93 Federated Intermediate Government Trust 1
12/1/93 Institutional Service Shares 1
12/1/93 Institutional Shares 1
12/1/93 Federated Investment Funds 1
12/1/93 Growth Portfolio 1
12/1/93 High Quality Bond Portfolio 1
12/1/93 Pennsylvania Intermediate Municipal Income Portfolio 1
12/1/93 Value Equity Portfolio 1
12/1/93 Federated Master Trust 1
12/1/93 Federated Municipal Trust 1
12/1/93 Alabama Municipal Cash Trust 1
12/1/93 Connecticut Municipal Cash Trust 1
12/1/93 Institutional Service Shares 1
3/2/94 Maryland Municipal Cash Trust 1
12/1/93 Massachusetts Municipal Cash Trust 1
12/1/93 BayFund Shares 1
12/1/93 Institutional Service Shares 1
12/1/93 Minnesota Municipal Cash Trust 1
12/1/93 Cash Series Shares 1
12/1/93 Institutional Shares 1
12/1/93 New Jersey Municipal Cash Trust 1
12/1/93 Cash Series Shares 1
12/1/93 Institutional Shares 1
12/1/93 Institutional Service Shares 1
12/1/93 Ohio Municipal Cash Trust 1
12/1/93 Cash II Shares 1
12/1/93 Institutional Shares 1
12/1/93 Pennsylvania Municipal Cash Trust 1
12/1/93 Cash Series Shares 1
12/1/93 Institutional Service Shares 1
12/1/93 Virginia Municipal Cash Trust 1
12/1/93 Institutional Service Shares 1
12/1/93 Institutional Shares 1
12/1/93 Federated Short-Intermediate Government Trust 1
12/1/93 Institutional Service Shares 1
12/1/93 Institutional Shares 1
12/1/93 Federated Short-Intermediate Municipal Trust 1
12/1/93 Institutional Service Shares 1
12/1/93 Institutional Shares 1
12/1/93 Federated Short-Term U.S. Government Trust 1
12/1/93 Federated Stock Trust 1
12/1/93 Federated Tax-Free Trust 1
12/1/93 Financial Reserves Fund 1
Has a separate First Union Funds
contract with (*Not effective or currently not being offered) 1
SSB - included First Union Balanced Portfolio 1
for fee infor- Class B Investment Shares 1
mation purposes Class C Investment Shares 1
only Trust Shares 1
First Union Fixed Income Portfolio 1
Class B Investment Shares 1
Class C Investment Shares 1
Trust Shares 1
First Union Florida Municipal Bond Portfolio 1
Class B Investment Shares 1
Class C Investment Shares 1
Trust Shares 1
First Union Georgia Municipal Bond Portfolio 1
Class B Investment Shares 1
Class C Investment Shares 1
Trust Shares 1
First Union High Grade Tax Free Portfolio (2/28/94
formerly First Union Insured Tax-Free Portfolio) 1
Class B Investment Shares 1
Class C Investment Shares 1
Trust Shares 1
First Union Managed Bond Portfolio 1
Class B Investment Shares 1
Class C Investment Shares 1
Trust Shares* 1
First Union Maryland Municipal Bond Portfolio* 1
Class B Investment Shares 1
Class C Investment Shares 1
Trust Shares 1
First Union Money Market Portfolio 1
Class B Investment Shares 1
Class C Investment Shares 1
Trust Shares 1
First Union North Carolina Municipal Bond Portfolio 1
Class B Investment Shares 1
Class C Investment Shares 1
Trust Shares* 1
First Union South Carolina Municipal Bond Portfolio 1
Class B Investment Shares 1
Class C Investment Shares 1
Trust Shares 1
First Union Tax-Free Money Market Portfolio 1
Class B Investment Shares 1
Class C Investment Shares* 1
Trust Shares 1
First Union Tennessee Municipal Bond Portfolio* 1
Class B Investment Shares 1
Class C Investment Shares 1
Trust Shares 1
First Union Treasury Money Market Portfolio 1
Class B Investment Shares 1
Class C Investment Shares* 1
Trust Shares 1
First Union U.S. Government Portfolio 1
Class B Investment Shares 1
Class C Investment Shares 1
Trust Shares 1
First Union Utility Portfolio 1
Class B Investment Shares 1
Class C Investment Shares 1
Trust Shares 1
First Union Value Portfolio 1
Class B Investment Shares 1
Class C Investment Shares 1
Trust Shares 1
First Union Virginia Municipal Bond Portfolio 1
Class B Investment Shares 1
Class C Investment Shares 1
Trust Shares 1
12/1/93 Fixed Income Securities, Inc. 1
12/1/93 Limited Term Fund 1
12/1/93 Fortress Shares 1
12/1/93 Investment Shares 1
12/1/93 Limited Term Municipal Fund 1
12/1/93 Fortress Shares 1
12/1/93 Investment Shares 1
12/1/93 Multi-State Municipal Income Fund 1
12/1/93 Limited Maturity Government Fund 1
12/1/93 Fortress Adjustable Rate U.S. Government Fund, Inc. 1
12/1/93 Fortress Municipal Income Fund, Inc. 1
12/1/93 Fortress Utility Fund, Inc. 1
12/1/93 FT Series, Inc. 1
12/1/93 International Equity Fund 1
12/1/93 Class A Shares 1
12/1/93 Class C Shares 1
12/1/93 International Income Fund 1
12/1/93 Class A Shares 1
12/1/93 Class C Shares 1
12/1/93 Fund for U.S. Government Securities, Inc. 1
12/1/93 Class A Shares 1
12/1/93 Class C Shares 1
12/1/93 Government Income Securities, Inc. 1
Separate contract Independence One Mutual Funds
with SSB - (*Fund not effective or currently on hold). 1
included for Independence One Equity Fund* 1
fee information Investment Shares 1
purposes only Trust Shares 1
Independence One Michigan Municipal Cash Fund 1
Investment Shares 1
Trust Shares* 1
Independence One Prime Money Market Fund 1
Investment Shares 1
Trust Shares* 1
Independence One U.S. Government Securities Fund 1
Investment Shares 1
Trust Shares 1
Independence One U.S. Treasury Money Market
Fund 1
1/11/94 Insight Institutional Series, Inc.
1/11/94 Insight Adjustable Rate Mortgage Fund 1
1/11/94 Insight Limited Term Income Fund 1
1/11/94 Insight Limited Term Municipal Fund 1
1/11/94 Insight U.S. Government Fund 1
12/1/93 Intermediate Municipal Trust 1
12/1/93 Intermediate Municipal Trust 1
12/1/93 Institutional Service Shares 1
12/1/93 Institutional Shares 1
12/1/93 Ohio Intermediate Municipal Trust 1
12/1/93 Pennsylvania Intermediate Municipal Trust 1
2/16/94 California Intermediate Municipal Trust 1
12/1/93 Investment Series Fund, Inc. 1
12/1/93 Capital Growth Fund 1
12/1/93 Investment Shares 1
12/1/93 Class A Shares 1
12/1/93 Class C Shares 1
12/1/93 Fortress Bond Fund 1
12/1/93 Investment Series Trust 1
12/1/93 High Quality Stock Fund 1
12/1/93 Municipal Securities Income Fund 1
12/1/93 U.S. Government Bond Fund 1
12/1/93 Liberty Equity Income Fund, Inc. 1
12/1/93 Class A Shares 1
12/1/93 Class C Shares 1
12/1/93 Fortress Shares 1
12/1/93 Liberty High Income Bond Fund, Inc. 1
12/1/93 Class A Shares 1
12/1/93 Class C Shares 1
12/1/93 Liberty Municipal Securities Fund, Inc. 1
12/1/93 Class A Shares 1
12/1/93 Class C Shares 1
12/1/93 Liberty Term Trust, Inc. - 1999 1
12/1/93 Liberty U.S. Government Money Market Trust 1
12/1/93 Liberty Utility Fund, Inc. 1
12/1/93 Class A Shares 1
12/1/93 Class C Shares 1
12/1/93 Liquid Cash Trust 1
12/1/93 Money Market Management, Inc. 1
12/1/93 Money Market Trust 1
12/1/93 Money Market Obligations Trust 1
12/1/93 Government Obligations Fund 1
12/1/93 Prime Obligations Fund 1
12/1/93 Tax-Free Obligations Fund 1
12/1/93 Treasury Obligations Fund 1
12/1/93 Municipal Securities Income Trust 1
12/1/93 California Municipal Income Fund 1
12/1/93 Fortress Shares 1
12/1/93 Florida Municipal Income Fund 1
12/1/93 Maryland Municipal Income Fund 1
12/1/93 Michigan Municipal Income Fund 1
12/1/93 New Jersey Municipal Income Fund 1
12/1/93 New York Municipal Income Fund 1
12/1/93 Fortress Shares 1
12/1/93 Ohio Municipal Income Fund 1
12/1/93 Fortress Shares 1
12/1/93 Trust Shares 1
12/1/93 Pennsylvania Municipal Income Fund 1
12/1/93 Investment Shares 1
12/1/93 Trust Shares 1
12/1/93 Income shares 1
12/1/93 Texas Municipal Income Fund 1
12/1/93 Virginia Municipal Income Fund 1
12/1/93 New York Municipal Cash Trust 1
12/1/93 Cash II Shares 1
12/1/93 Institutional Service Shares 1
12/1/93 Portage Funds 2
12/1/93 Portage Government Money Market Fund 2
12/1/93 Investment Shares 2
12/1/93 Trust Shares 2
12/1/93 SouthTrust Vulcan Funds 2
12/1/93 Bond Fund 2
12/1/93 Stock Fund 2
12/1/93 Treasury Obligations Money Market Fund 2
12/1/93 Stock and Bond Fund, Inc. 1
12/1/93 Class A Shares 1
12/1/93 Class C Shares 1
12/1/93 Tax-Free Instruments Trust 1
12/1/93 Institutional Service Shares 1
12/1/93 Institutional Shares 1
12/1/93 The Boulevard Funds 2
12/1/93 Boulevard Blue Chip Growth Fund 2
12/1/93 Boulevard Managed Income Fund 2
12/1/93 Boulevard Managed Municipal Fund 2
12/1/93 Boulevard Strategic Balanced Fund 2
12/1/93 The Planters Funds 2
12/1/93 Tennessee Tax-Free Bond Fund 2
Has a separate Tower Mutual Funds 1
contract with Tower U.S. Government Income Fund 1
SSB - included Tower Capital Appreciation Fund 1
for fee infor- Tower Cash Reserve Fund 1
mation purposes Tower Louisiana Municipal Income Fund 1
only Tower Total Return Bond Fund 1
Tower U.S. Treasury Money Market Fund 1
12/1/93 Trademark Funds 2
12/1/93 Trademark Equity Fund 2
12/1/93 Trademark Government Income Fund 2
12/1/93 Trademark Kentucky Municipal Bond Fund 2
12/1/93 Trademark Short-Intermediate Government Fund 2
12/1/93 Trust for Financial Institutions 1
12/1/93 Government Qualifying Liquidity Fund 1
12/1/93 Institutional Service Shares 1
12/1/93 Institutional Shares 1
12/1/93 Short-Term Government Qualifying Liquidity Fund 1
12/1/93 Institutional Service Shares 1
12/1/93 Institutional Shares 1
12/1/93 Government Money Market Fund 1
12/1/93 Institutional Service Shares 1
12/1/93 Institutional Shares 1
12/1/93 Trust for Government Cash Reserves 1
12/1/93 Trust for Short-Term U.S. Government Securities 1
12/1/93 Trust for U.S. Treasury Obligations 1
Has separate Vision Fiduciary Funds, Inc. 1
contracts with Vision Fiduciary Money Market Fund 1
SSB - included Vision Group of Funds, Inc. 1
for fee informa- Vision Growth and Income Fund 1
tion purposes Vision Money Market Fund 1
only Vision New York Tax-Free Fund 1
Vision New York Tax-Free Money Market Fund 1
Vision Treasury Money Market Fund 1
Vision U.S. Government Securities Fund 1
2/24/94 World Investment Series, Inc. 1
2/24/94 World Utility Fund 1
2/24/94 Class A Shares 1
2/24/94 Fortress Shares 1
Schedule 1
STATE STREET BANK
CUSTODY /
PORTFOLIO RECORD KEEPING
FEE SCHEDULE
Federated Investors
_ Federated Funds _
I. Custody Services
Maintain Custody of fund assets. Settle portfolio purchases and sales.
Report buy and sell fails. Determine and collect portfolio income.
Make cash disbursements and report cash transactions. Monitor corporate
actions.
ANNUAL FEES
<TABLE>
<CAPTION>
ASSET
<S> <C>
First $500 Million 1.0
Basis Point
Excess .5
Basis Point
Minimum fee per year $15,000
Maximum fee per year $90,000
Wire Fees $2.70 per wire
Settlements:
Each DTC Commercial Paper $9.00
Each DTC Transaction $9.00
Each Federal Reserve Book Entry Transaction (Repo) $4.50
Each Repo with Banks Other than State Street Bank $7.50
Each Physical Transaction (NY/Boston, Private Placement) $21.75
Each Option Written/Exercised/Expired $18.75
Each Stock Loan Transaction $12.00
Each Book Entry Muni (Sub-custody) Transaction $15.00
Index Fund/ETD Cost + 15%
II. Portfolio Record keeping / Fund Accounting Services
Maintain investment ledgers, provide selected portfolio transactions,
position and income reports. Maintain general ledger and capital stock
accounts. Prepare daily trial balance. Provide selected general ledger
reports. Calculate net asset value daily. Securities yield or market
value quotations will be provided to State Street by the fund or via
State Street Bank automated pricing services.
ANNUAL FEES
ASSET
First $250 Million 2.0
Basis Points
Next $250 Million 1.5
Basis Points
Next $250 Million 1.0
Basis Point
Excess .5
Basis Point
Minimum fee per year $39,000
Maximum fee per year $120,000
Additional class of shares per year $12,000
III. Multicurrency Horizon Remote Service
July 1, 1993 - July 1, 1995
No Charge
Post July 1, 1995
$5,000 per portfolio per year
$500 per portfolio per year
for
each additional
class
IV. Out-Of-Pocket Expenses
Pricing Fees
Telephone
Postage & Insurance
Armored carrier costs
Legal fees
Supplies related to fund records
Processing validation certificates
Forms, envelopes, Xerox copies, supplies, etc.
Travel and setup expenses related to Horizon Remote
Lease and multiplex switching lines related to Horizon Remote
V. Special Services
Fees for activities of a non-recurring nature such as fund consolidation
or reorganization, extraordinary security shipments and the preparation
of special reports will be subject to negotiation.
VI. Coupon Clipping
Monitoring for calls and processing for each monthly issue held
Monthly Charge $5.00
</TABLE>
VII. Balance Credit
A balance credit equal to 75% of the average balance in the custodian
account for the month billed times the 30-day T-Bill Rate on the last
Monday of the month billed will be applied against Section I through V
above.
VIII. Term of the Contract
The parties agree that this fee schedule shall become effective June 1,
1993 and will remain in effect until it is revised as a result of
negotiations initiated by either party.
FEDERATED SERVICES CO. STATE STREET BANK & TRUST CO.
By James J. Dolan By: Frank J. Sidoti, Jr.
President Vice President
January 24, 1994 December 15, 1993
Schedule 2
STATE STREET BANK
CUSTODY FEE SCHEDULE
Federated Investors
_ Bank Proprietary Funds _
I. Custody Services
Maintain Custody of fund assets. Settle portfolio purchases and sales.
Report buy and sell fails. Determine and collect portfolio income. Make
cash disbursements and report cash transactions. Monitor corporate
actions.
ANNUAL FEES
<TABLE>
<CAPTION>
ASSET
<S> <C>
First $500 Million 1.0 Basis Point
Excess .5 Basis Point
Minimum fee per year $15,000
Wire Fees $2.70 per wire
Settlements:
Each DTC Commercial Paper $9.00
Each DTC Transaction $9.00
Each Federal Reserve Book Entry Transaction (Repo) $4.50
Each Repo with Banks Other than State Street Bank $7.50
Each Physical Transaction (NY/Boston, Private Placement) $21.75
Each Option Written/Exercised/Expired $18.75
Each Stock LoanTransaction $12.00
Each Book Entry Muni (Sub-custody) Transaction $15.00
Index Fund/ETD
Cost + 15%
</TABLE>
II. Multicurrency Horizon Remote Service
July 1, 1993 - July 1, 1995
No Charge
Post July 1, 1995
$5,000 per portfolio per year
$ 500 per portfolio per year
for
each additional
class
III. Out-Of-Pocket Expenses
Telephone
Postage & Insurance
Armored carrier costs
Legal fees
Supplies related to fund records
Processing validation certificates
Forms, envelopes, Xerox copies, supplies, etc.
IV. Special Services
Fees for activities of a non-recurring nature such as fund consolidation
or reorganization, extraordinary security shipments and the preparation
of special reports will be subject to negotiation.
V. Coupon Clipping
Monitoring for calls and processing for each monthly issue held
Monthly Charge
$5.00
VI. Balance Credit
A balance credit equal to 75% of the average balance in the custodian
account for the month billed times the 30-day T-Bill Rate on the last
Monday of the month billed will be applied against Section I through IV
above.
VII. Term of the Contract
The parties agree that this fee schedule shall become effective June 1,
1993 and will remain in effect until it is revised as a result of
negotiations initiated by either party.
FEDERATED SERVICES CO. STATE STREET BANK & TRUST CO.
By James J. Dolan By: Frank J. Sidoti, Jr.
President Vice President
January 24, 1994 December 15, 1993
Exhibit 9 under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
AGREEMENT
for
FUND ACCOUNTING,
SHAREHOLDER RECORDKEEPING,
and
CUSTODY SERVICES PROCUREMENT
AGREEMENT made as of the 1st day of December, 1993, by and between
those investment companies listed on Exhibit 1 as may be amended
from time to time, having their principal office and place of
business at Federated Investors Tower, Pittsburgh, PA 15222-3779
(the "Trust"), on behalf of the portfolios (individually referred to
herein as a "Fund" and collectively as "Funds") of the Trust, and
FEDERATED SERVICES COMPANY, a Delaware business trust, having its
principal office and place of business at Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779 (the "Company").
WHEREAS, the Trust is registered as an open-end management
investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), with authorized and issued shares of
capital stock or beneficial interest ("Shares"); and
WHEREAS, the Trust 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, the Trust desires to appoint the Company as its agent to
select, negotiate and subcontract for custodian services from an
approved list of qualified banks and the Company desires to accept
such appointment; and
WHEREAS, from time to time the Trust may desire and may instruct the
Company to subcontract for the performance of certain of its duties
and responsibilities hereunder to State Street Bank and Trust
Company or another agent (the "Agent"); and
WHEREAS, the words Trust and Fund may be used interchangeably for
those investment companies consisting of only one portfolio;
NOW THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the
parties hereto agree as follows:
SECTION ONE: Fund Accounting.
Article 1. Appointment.
The Trust hereby appoints the Company to provide certain pricing and
accounting services to the Funds, and/or the Classes, for the period
and on the terms set forth in this Agreement. The Company accepts
such appointment and agrees to furnish the services herein set forth
in return for the compensation as provided in Article 3 of this
Section.
Article 2. The Company and Duties.
Subject to the supervision and control of the Trust's Board of
Trustees or Directors ("Board"), the Company will assist the Trust
with regard to fund accounting for the Trust, and/or the Funds,
and/or the Classes, and in connection therewith undertakes to
perform the following specific services;
A. Value the assets of the Funds and determine the net asset value
per share of each Fund and/or Class, at the time and in the manner
from time to time determined by the Board and as set forth in the
Prospectus and Statement of Additional Information ("Prospectus")
of each Fund;
B. Calculate the net income of each of the Funds, if any;
C. Calculate capital gains or losses of each of the Funds
resulting from sale or disposition of assets, if any;
D. Maintain the general ledger and other accounts, books and
financial records of the Trust, including for each Fund, and/or
Class, as required under Section 31(a) of the 1940 Act and the
Rules thereunder in connection with the services provided by the
Company;
E. Preserve for the periods prescribed by Rule 31a-2 under the
1940 Act the records to be maintained by Rule 31a-1 under the 1940
Act in connection with the services provided by the Company. The
Company further agrees that all such records it maintains for the
Trust are the property of the Trust and further agrees to surrender
promptly to the Trust such records upon the Trust's request;
F. At the request of the Trust, prepare 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 Schedules A ("A1, A2, A3 etc..."), annexed
hereto and incorporated herein, as may be added or amended from
time to time. Such fees do not include out-of-pocket disbursements
of the Company for which the Funds shall reimburse the Company upon
receipt of a separate invoice. Out-of-pocket disbursements shall
include, but shall not be limited to, the items specified in
Schedules B ("B1, B2, B3, etc..."), annexed hereto and incorporated
herein, as may be added or amended from time to time. Schedules B
may be modified by the Company upon not less than thirty days'
prior written notice to the Trust.
B. The Fund and/or the Class, and not the Company, shall bear the
cost of: custodial expenses; membership dues in the Investment
Company Institute or any similar organization; transfer agency
expenses; investment advisory expenses; costs of printing and
mailing stock certificates, Prospectuses, reports and notices;
administrative expenses; interest on borrowed money; brokerage
commissions; taxes and fees payable to federal, state and other
governmental agencies; fees of Trustees or Directors of the Trust;
independent auditors expenses; Federated Administrative Services
and/or Federated Administrative Services, Inc. legal and audit
department expenses billed to Federated Services Company for work
performed related to the Trust, the Funds, or the Classes; law firm
expenses; or other expenses not specified in this Article 3 which
may be properly payable by the Funds and/or classes.
C. The Company will send an invoice to each of the Funds as soon
as practicable after the end of each month. Each invoice will
provide detailed information about the compensation and
out-of-pocket expenses in accordance with Schedules A and Schedules
B. The Funds and or the Classes will pay to the Company the amount
of such invoice within 30 days of receipt of the invoices.
D. Any compensation agreed to hereunder may be adjusted from time
to time by attaching to Schedules A revised Schedules dated and
signed by a duly authorized officer of the Trust and/or the Funds
and a duly authorized officer of the Company.
E. The fee for the period from the effective date of this
Agreement with respect to a Fund or a Class to the end of the
initial month shall be prorated according to the proportion that
such period bears to the full month period. Upon any termination
of this Agreement before the end of any month, the fee for such
period shall be prorated according to the proportion which such
period bears to the full month period. For purposes of determining
fees payable to the Company, the value of the Fund's net assets
shall be computed at the time and in the manner specified in the
Fund's Prospectus.
F. The Company, in its sole discretion, may from time to time
subcontract to, employ or associate with itself such person or
persons as the Company may believe to be particularly suited to
assist it in performing services under this Section One. Such
person or persons may be third-party service providers, or they may
be officers and employees who are employed by both the Company and
the Funds. The compensation of such person or persons shall be
paid by the Company and no obligation shall be incurred on behalf
of the Trust, the Funds, or the Classes in such respect.
SECTION TWO: Shareholder Recordkeeping.
Article 4. Terms of Appointment.
Subject to the terms and conditions set forth in this Agreement, the
Trust hereby appoints the Company to act as, and the Company agrees
to act as, transfer agent and dividend disbursing agent for each
Fund's Shares, and agent in connection with any accumulation,
open-account or similar plans provided to the shareholders of any
Fund ("Shareholder(s)"), including without limitation any periodic
investment plan or periodic withdrawal program.
As used throughout this Agreement, a "Proper Instruction" means a
writing signed or initialed by one or more person or persons as the
Board shall have from time to time authorized. Each such writing
shall set forth the specific transaction or type of transaction
involved. Oral instructions will be deemed to be Proper
Instructions if (a) the Company reasonably believes them to have
been given by a person previously authorized in Proper Instructions
to give such instructions with respect to the transaction involved,
and (b) the Trust, or the Fund, and the Company promptly cause such
oral instructions to be confirmed in writing. Proper Instructions
may include communications effected directly between
electro-mechanical or electronic devices provided that the Trust, or
the Fund, and the Company are satisfied that such procedures afford
adequate safeguards for the Fund's assets. Proper Instructions may
only be amended in writing.
Article 5. Duties of the Company.
The Company shall perform the following services in accordance with
Proper Instructions as may be provided from time to time by the
Trust as to any Fund:
A. Purchases
(1) The Company shall receive orders and payment for the purchase
of shares and promptly deliver payment and appropriate
documentation therefore to the custodian of the relevant Fund,
(the "Custodian"). The Company shall notify the Fund and the
Custodian on a daily basis of the total amount of orders and
payments so delivered.
(2) Pursuant to purchase orders and in accordance with the Fund's
current Prospectus, the Company shall compute and issue the
appropriate number of Shares of each Fund and/or Class and
hold such Shares in the appropriate Shareholder accounts.
(3) For certificated Funds and/or Classes, if a Shareholder or its
agent requests a certificate, the Company, as Transfer Agent,
shall countersign and mail by first class mail, a certificate
to the Shareholder at its address as set forth on the transfer
books of the Funds, and/or Classes, subject to any Proper
Instructions regarding the delivery of certificates.
(4) In the event that any check or other order for the purchase of
Shares of the Fund and/or Class is returned unpaid for any
reason, the Company shall debit the Share account of the
Shareholder by the number of Shares that had been credited to
its account upon receipt of the check or other order, promptly
mail a debit advice to the Shareholder, and notify the Fund
and/or Class of its action. In the event that the amount paid
for such Shares exceeds proceeds of the redemption of such
Shares plus the amount of any dividends paid with respect to
such Shares, the Fund and/the Class or its distributor will
reimburse the Company on the amount of such excess.
B. Distribution
(1) Upon notification by the Funds of the declaration of any
distribution to Shareholders, the Company shall act as
Dividend Disbursing Agent for the Funds in accordance with the
provisions of its governing document and the then-current
Prospectus of the Fund. The Company shall prepare and mail or
credit income, capital gain, or any other payments to
Shareholders. As the Dividend Disbursing Agent, the Company
shall, on or before the payment date of any such distribution,
notify the Custodian of the estimated amount required to pay
any portion of said distribution which is payable in cash and
request the Custodian to make available sufficient funds for
the cash amount to be paid out. The Company shall reconcile
the amounts so requested and the amounts actually received
with the Custodian on a daily basis. If a Shareholder is
entitled to receive additional Shares by virtue of any such
distribution or dividend, appropriate credits shall be made to
the Shareholder's account, for certificated Funds and/or
Classes, delivered where requested; and
(2) The Company shall maintain records of account for each Fund
and Class and advise the Trust, each Fund and Class and its
Shareholders as to the foregoing.
C. Redemptions and Transfers
(1) The Company shall receive redemption requests and redemption
directions and, if such redemption requests comply with the
procedures as may be described in the Fund Prospectus or set
forth in Proper Instructions, deliver the appropriate
instructions therefor to the Custodian. The Company shall
notify the Funds on a daily basis of the total amount of
redemption requests processed and monies paid to the Company
by the Custodian for redemptions.
(2) At the appropriate time upon receiving redemption proceeds
from the Custodian with respect to any redemption, the Company
shall pay or cause to be paid the redemption proceeds in the
manner instructed by the redeeming Shareholders, pursuant to
procedures described in the then-current Prospectus of the
Fund.
(3) If any certificate returned for redemption or other request
for redemption does not comply with the procedures for
redemption approved by the Fund, the Company shall promptly
notify the Shareholder of such fact, together with the reason
therefor, and shall effect such redemption at the price
applicable to the date and time of receipt of documents
complying with said procedures.
(4) The Company shall effect transfers of Shares by the registered
owners thereof.
(5) The Company shall identify and process abandoned accounts and
uncashed checks for state escheat requirements on an annual
basis and report such actions to the Fund.
D. Recordkeeping
(1) The Company shall record the issuance of Shares of each Fund,
and/or Class, and maintain pursuant to applicable rules of the
Securities and Exchange Commission ("SEC") a record of the
total number of Shares of the Fund and/or Class which are
authorized, based upon data provided to it by the Fund, and
issued and outstanding. The Company shall also provide the
Fund on a regular basis or upon reasonable request with the
total number of Shares which are authorized and issued and
outstanding, but shall have no obligation when recording the
issuance of Shares, except as otherwise set forth herein, to
monitor the issuance of such Shares or to take cognizance of
any laws relating to the issue or sale of such Shares, which
functions shall be the sole responsibility of the Funds.
(2) The Company shall establish and maintain records pursuant to
applicable rules of the SEC relating to the services to be
performed hereunder in the form and manner as agreed to by the
Trust or the Fund to include a record for each Shareholder's
account of the following:
(a) Name, address and tax identification number (and whether
such number has been certified);
(b) Number of Shares held;
(c) Historical information regarding the account, including
dividends paid and date and price for all transactions;
(d) Any stop or restraining order placed against the account;
(e) Information with respect to withholding in the case of a
foreign account or an account for which withholding is
required by the Internal Revenue Code;
(f) Any dividend reinvestment order, plan application,
dividend address and correspondence relating to the
current maintenance of the account;
(g) Certificate numbers and denominations for any Shareholder
holding certificates;
(h) Any information required in order for the Company to
perform the calculations contemplated or required by this
Agreement.
(3) The Company shall preserve any such records required to be
maintained pursuant to the rules of the SEC for the periods
prescribed in said rules as specifically noted below. Such
record retention shall be at the expense of the Company, and
such records may be inspected by the Fund at reasonable times.
The Company may, at its option at any time, and shall
forthwith upon the Fund's demand, turn over to the Fund and
cease to retain in the Company's files, records and documents
created and maintained by the Company pursuant to this
Agreement, which are no longer needed by the Company in
performance of its services or for its protection. If not so
turned over to the Fund, such records and documents will be
retained by the Company for six years from the year of
creation, during the first two of which such documents will be
in readily accessible form. At the end of the six year
period, such records and documents will either be turned over
to the Fund or destroyed in accordance with Proper
Instructions.
E. Confirmations/Reports
(1) The Company shall furnish to the Fund periodically the
following information:
(a) A copy of the transaction register;
(b) Dividend and reinvestment blotters;
(c) The total number of Shares issued and outstanding in each
state for "blue sky" purposes as determined according to
Proper Instructions delivered from time to time by the
Fund to the Company;
(d) Shareholder lists and statistical information;
(e) Payments to third parties relating to distribution
agreements, allocations of sales loads, redemption fees,
or other transaction- or sales-related payments;
(f) Such other information as may be agreed upon from time to
time.
(2) The Company shall prepare in the appropriate form, file with
the Internal Revenue Service and appropriate state agencies,
and, if required, mail to Shareholders, such notices for
reporting dividends and distributions paid as are required to
be so filed and mailed and shall withhold such sums as are
required to be withheld under applicable federal and state
income tax laws, rules and regulations.
(3) In addition to and not in lieu of the services set forth
above, the Company shall:
(a) Perform all of the customary services of a transfer
agent, dividend disbursing agent and, as relevant, agent
in connection with accumulation, open-account or similar
plans (including without limitation any periodic
investment plan or periodic withdrawal program),
including but not limited to: maintaining all
Shareholder accounts, mailing Shareholder reports and
Prospectuses to current Shareholders, withholding taxes
on accounts subject to back-up or other withholding
(including non-resident alien accounts), preparing and
filing reports on U.S. Treasury Department Form 1099 and
other appropriate forms required with respect to
dividends and distributions by federal authorities for
all Shareholders, preparing and mailing confirmation
forms and statements of account to Shareholders for all
purchases and redemptions of Shares and other 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 Fund to monitor
the total number of Shares of each Fund and/or Class sold
in each state ("blue sky reporting"). The Fund shall by
Proper Instructions (i) identify to the Company those
transactions and assets to be treated as exempt from the
blue sky reporting for each state and (ii) verify the
classification of transactions for each state on the
system prior to activation and thereafter monitor the
daily activity for each state. The responsibility of the
Company for each Fund's and/or Class's state blue sky
registration status is limited solely to the recording of
the initial classification of transactions or accounts
with regard to blue sky compliance and the reporting of
such transactions and accounts to the Fund as provided
above.
F. Other Duties
(1) The Company shall answer correspondence from Shareholders
relating to their Share accounts and such other correspondence
as may from time to time be addressed to the Company;
(2) The Company shall prepare Shareholder meeting lists, mail
proxy cards and other material supplied to it by the Fund in
connection with Shareholder Meetings of each Fund; receive,
examine and tabulate returned proxies, and certify the vote of
the Shareholders;
(3) The Company shall establish and maintain facilities and
procedures for safekeeping of stock certificates, check forms
and facsimile signature imprinting devices, if any; and for
the preparation or use, and for keeping account of, such
certificates, forms and devices.
Article 6. Duties of the Trust.
A. Compliance
The Trust or Fund assume full responsibility for the preparation,
contents and distribution of their own and/or their classes'
Prospectus and for complying with all applicable requirements of
the Securities Act of 1933, as amended (the "1933 Act"), the 1940
Act and any laws, rules and regulations of government authorities
having jurisdiction.
B. Share Certificates
The Trust shall supply the Company with a sufficient supply of
blank Share certificates and from time to time shall renew such
supply upon request of the Company. Such blank Share certificates
shall be properly signed, manually or by facsimile, if authorized
by the Trust and shall bear the seal of the Trust or facsimile
thereof; and notwithstanding the death, resignation or removal of
any officer of the Trust authorized to sign certificates, the
Company may continue to countersign certificates which bear the
manual or facsimile signature of such officer until otherwise
directed by the Trust.
C. Distributions
The Fund shall promptly inform the Company of the declaration of
any dividend or distribution on account of any Fund's shares.
Article 7. Compensation and Expenses.
A. Annual Fee
For performance by the Company pursuant to Section Two of this
Agreement, the Trust and/or the Fund agree to pay the Company an
annual maintenance fee for each Shareholder account as set out in
Schedules C ("C1, C2, C3 etc..."), attached hereto, as may be added
or amended from time to time. Such fees may be changed from time
to time subject to written agreement between the Trust and the
Company. Pursuant to information in the Fund Prospectus or other
information or instructions from the Fund, the Company may
sub-divide any Fund into Classes or other sub-components for
recordkeeping purposes. The Company will charge the Fund the 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
and/or Fund agree to reimburse the Company for out-of-pocket
expenses or advances incurred by the Company for the items set out
in Schedules D ("D1, D2, D3 etc..."), attached hereto, as may be
added or amended from time to time. In addition, any other
expenses incurred by the Company at the request or with the consent
of the Trust and/or the Fund, will be reimbursed by the appropriate
Fund.
C. Payment
The Company shall send an invoice with respect to fees and
reimbursable expenses to the Trust or each of the Funds as soon as
practicable at the end of each month. Each invoice will provide
detailed information about the Compensation and out-of-pocket
expenses in accordance with Schedules C and Schedules D. The Trust
or the Funds will pay to the Company the amount of such invoice
within 30 days following the receipt of the invoices.
Article 8. Assignment of Shareholder Recordkeeping.
Except as provided below, no right or obligation under this Section
Two may be assigned by either party without the written consent of
the other party.
(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) State
Street Bank and its subsidiary, Boston Financial Data
Services, Inc., a Massachusetts Trust ("BFDS"), which is duly
registered as a transfer agent pursuant to Section 17A(c)(1)
of the Securities Exchange Act of 1934, as amended, or any
succeeding statute ("Section 17A(c)(1)"), or (B) a BFDS
subsidiary duly registered as a transfer agent pursuant to
Section 17A(c)(1), or (C) a BFDS affiliate, or (D) such other
provider of services duly registered as a transfer agent under
Section 17A(c)(1) as Company shall select; provided, however,
that the Company shall be as fully responsible to the Trust
for the acts and omissions of any subcontractor as it is for
its own acts and omissions; or
(3) The Company shall upon instruction from the Trust subcontract
for the performance hereof with an Agent selected by the
Trust, other than BFDS or a provider of services selected by
Company, as described in (2) above; provided, however, that
the Company shall in no way be responsible to the Trust for
the acts and omissions of the Agent.
SECTION THREE: Custody Services Procurement
Article 9. Appointment.
The Trust hereby appoints Company as its agent to evaluate and
obtain custody services from a financial institution that (i) meets
the criteria established in Section 17(f) of the 1940 Act and (ii)
has been approved by the Board as eligible for selection by the
Company as a custodian (the "Eligible Custodian"). The Company
accepts such appointment.
Article 10. The Company and Its Duties.
Subject to the review, supervision and control of the Board, the
Company shall:
(1) evaluate the nature and the quality of the custodial services
provided by the Eligible Custodian;
(2) employ the Eligible Custodian to serve on behalf of the Trust
as Custodian of the Trust's assets substantially on the terms
set forth as the form of agreement in Exhibit 2;
(3) negotiate and enter into agreements with the Custodians for
the benefit of the Trust, with the Trust as a party to each
such agreement. The Company shall not be a party to any
agreement with any such Custodian;
(4) establish procedures to monitor the nature and the quality of
the services provided by the Custodians;
(5) continuously monitor the nature and the quality of services
provided by the Custodians; and
(6) periodically provide to the Trust (i) written reports on the
activities and services of the Custodians; (ii) the nature and
amount of disbursement made on account of the Trust with
respect to each custodial agreement; and (iii) such other
information as the Board shall reasonably request to enable it
to fulfill its duties and obligations under Sections 17(f) and
36(b) of the 1940 Act and other duties and obligations
thereof.
Article 11. Fees and Expenses.
A. Annual Fee
For the performance by the Company pursuant to Section Three of
this Agreement, the Trust and/or the Fund agree to pay the Company
an annual fee as set forth in Schedule E, attached hereto.
B. Payment
The Company shall send an invoice with respect to fees and
reimbursable expenses to each of the Trust/or Fund as soon as
practicable at the end of each month. Each invoice will provide
detailed information about the Compensation and out-of-pocket
expenses in occurrence with Schedule E. The Trust and/or Fund will
pay to the Company the amount of such invoice within 30 days
following the receipt of the invoice.
Article 12. Representations.
The Company represents and warrants that it has obtained all
required approvals from all government or regulatory authorities
necessary to enter into this arrangement and to provide the
services contemplated in Section Three of this Agreement.
SECTION FOUR: General Provisions.
Article 13. Documents.
A. In connection with the appointment of the Company under this
Agreement, the Trust shall file with the Company the following
documents:
(1) A copy of the Charter and By-Laws of the Trust and all
amendments thereto;
(2) A copy of the resolution of the Board of the Trust authorizing
this Agreement;
(3) Specimens of all forms of outstanding Share certificates of
the Trust or the Funds in the forms approved by the Board of
the Trust with a certificate of the Secretary of the Trust as
to such approval;
(4) All account application forms and other documents relating to
Shareholders accounts; and
(5) A copy of the current Prospectus for each Fund.
B. The Fund will also furnish from time to time the following
documents:
(1) Each resolution of the Board of the Trust authorizing the
original issuance of each Fund's, and/or Class's Shares;
(2) Each Registration Statement filed with the SEC and amendments
thereof and orders relating thereto in effect with respect to
the sale of Shares of any Fund, and/or Class;
(3) A certified copy of each amendment to the governing document
and the By-Laws of the Trust;
(4) Certified copies of each vote of the Board authorizing
officers to give Proper Instructions to the Custodian and
agents for fund accountant, custody services procurement, and
shareholder recordkeeping or transfer agency services;
(5) Specimens of all new Share certificates representing Shares of
any Fund, accompanied by Board resolutions approving such
forms;
(6) Such other certificates, documents or opinions which the
Company may, in its discretion, deem necessary or appropriate
in the proper performance of its duties; and
(7) Revisions to the Prospectus of each Fund.
Article 14. Representations and Warranties.
A. Representations and Warranties of the Company
The Company represents and warrants to the Trust that:
(1) It is a business trust duly organized and existing and in good
standing under the laws of the State of Delaware.
(2) It is duly qualified to carry on its business in the State of
Delaware.
(3) It is empowered under applicable laws and by its charter and
by-laws to enter into and perform this Agreement.
(4) All requisite corporate proceedings have been taken to
authorize it to enter into and perform its obligations under
this Agreement.
(5) It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
(6) It is in compliance with federal securities law requirements
and in good standing as a transfer agent.
B. Representations and Warranties of the Trust
The Trust represents and warrants to the Company that:
(1) It is an investment company duly organized and existing and in
good standing under the laws of its state of organization;
(2) It is empowered under applicable laws and by its Charter and
By-Laws to enter into and perform its obligations under this
Agreement;
(3) All corporate proceedings required by said Charter and By-Laws
have been taken to authorize it to enter into and perform its
obligations under this Agreement;
(4) The Trust is an open-end investment company registered under
the 1940 Act; and
(5) A registration statement under the 1933 Act will be effective,
and appropriate state securities law filings have been made
and will continue to be made, with respect to all Shares of
each Fund being offered for sale.
Article 15. Indemnification.
A. Indemnification by Trust
The Company shall not be responsible for and the Trust or Fund
shall indemnify and hold the Company, including its officers,
directors, shareholders and their agents employees and affiliates,
harmless against any and all losses, damages, costs, charges,
counsel fees, payments, expenses and liabilities arising out of or
attributable to:
(1) The acts or omissions of any Custodian,
(2) The Trust's or Fund's refusal or failure to comply with the
terms of this Agreement, or which arise out of the Trust's or
The Fund's lack of good faith, negligence or willful
misconduct or which arise out of the breach of any
representation or warranty of the Trust or Fund hereunder or
otherwise.
(3) The reliance on or use by the Company or its agents or
subcontractors of information, records and documents in proper
form which
(a) are received by the Company or its agents or
subcontractors and furnished to it by or on behalf of the
Fund, its Shareholders or investors regarding the
purchase, redemption or transfer of Shares and
Shareholder account information; or
(b) have been prepared and/or maintained by the Fund or its
affiliates or any other person or firm on behalf of the
Trust.
(4) The reliance on, or the carrying out by the Company or its
agents or subcontractors of Proper Instructions of the Trust
or the Fund.
(5) The offer or sale of Shares in violation of any requirement
under the federal securities laws or regulations or the
securities laws or regulations of any state that such Shares
be registered in such state or in violation of any stop order
or other determination or ruling by any federal agency or any
state with respect to the offer or sale of such Shares in such
state.
Provided, however, that the Company shall not be protected by
this Article 15.A. from liability for any act or omission
resulting from the Company's willful misfeasance, bad faith,
gross negligence or reckless disregard of its duties.
B. Indemnification by the Company
The Company shall indemnify and hold the Trust or 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 willful misfeasance,
bad faith, gross negligence or reckless disregard of its duties.
C. Reliance
At any time the Company may apply to any officer of the Trust or
Fund for instructions, and may consult with legal counsel with
respect to any matter arising in connection with the services to be
performed by the Company under this Agreement, and the Company and
its agents or subcontractors shall not be liable and shall be
indemnified by the Trust or the appropriate Fund for any action
reasonably taken or omitted by it in reliance upon such
instructions or upon the opinion of such counsel provided such
action is not in violation of applicable federal or state laws or
regulations. The Company, its agents and subcontractors shall be
protected and indemnified in recognizing stock certificates which
are reasonably believed to bear the proper manual or facsimile
signatures of the officers of the Trust or the Fund, and the proper
countersignature of any former transfer agent or registrar, or of a
co-transfer agent or co-registrar.
D. Notification
In order that the indemnification provisions contained in this
Article 15 shall apply, upon the assertion of a claim for which
either party may be required to indemnify the other, the party
seeking indemnification shall promptly notify the other party of
such assertion, and shall keep the other party advised with respect
to all developments concerning such claim. The party who may be
required to indemnify shall have the option to participate with the
party seeking indemnification in the defense of such claim. The
party seeking indemnification shall in no case confess any claim or
make any compromise in any case in which the other party may be
required to indemnify it except with the other party's prior
written consent.
Article 16. Termination of Agreement.
This Agreement may be terminated by either party upon one hundred
twenty (120) days written notice to the other. Should the Trust
exercise its rights to terminate, all out-of-pocket expenses
associated with the movement of records and materials will be borne
by the Trust or the appropriate Fund. Additionally, the Company
reserves the right to charge for any other reasonable expenses
associated with such termination. The provisions of Article 15
shall survive the termination of this Agreement.
Article 17. Amendment.
This Agreement may be amended or modified by a written agreement
executed by both parties.
Article 18. Interpretive and Additional Provisions.
In connection with the operation of this Agreement, the Company and
the Trust may from time to time agree on such provisions
interpretive of or in addition to the provisions of this Agreement
as may in their joint opinion be consistent with the general tenor
of this Agreement. Any such interpretive or additional provisions
shall be in a writing signed by both parties and shall be annexed
hereto, provided that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any
provision of the Charter. No interpretive or additional provisions
made as provided in the preceding sentence shall be deemed to be an
amendment of this Agreement.
Article 19. Governing Law.
This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the
Commonwealth of Massachusetts
Article 20. Notices.
Except as otherwise specifically provided herein, Notices and other
writings delivered or mailed postage prepaid to the Trust at
Federated Investors Tower, Pittsburgh, Pennsylvania, 15222-3779, or
to the Company at Federated Investors Tower, Pittsburgh,
Pennsylvania, 15222-3779, or to such other address as the Trust or
the Company may hereafter specify, shall be deemed to have been
properly delivered or given hereunder to the respective address.
Article 21. Counterparts.
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original.
Article 22. Limitations of Liability of Trustees and Shareholders
of the Trust.
The execution and delivery of this Agreement have been authorized
by the Trustees of the Trust and signed by an authorized officer of
the Trust, acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officer shall be
deemed to have been made by any of them individually or to impose
any liability on any of them personally, and the obligations of
this Agreement are not binding upon any of the Trustees or
Shareholders of the Trust, but bind only the appropriate property
of the Fund, or Class, as provided in the Declaration of Trust.
Article 23. Limitations of Liability of Trustees and Shareholders
of the Company.
The execution and delivery of this Agreement have been authorized
by the Trustees of the Company and signed by an authorized officer
of the Company, acting as such, and neither such authorization by
such Trustees nor such execution and delivery by such officer shall
be deemed to have been made by any of them individually or to
impose any liability on any of them personally, and the obligations
of this Agreement are not binding upon any of the Trustees or
Shareholders of the Company, but bind only the property of the
Company as provided in the Declaration of Trust.
Article 24. Assignment.
This Agreement and the rights and duties hereunder shall not be
assignable with respect to the Trust or the Funds by either of the
parties hereto except by the specific written consent of the other
party.
Article 25. Merger of Agreement.
This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the
subject hereof whether oral or written.
Article 26. Successor Agent.
If a successor agent for the Trust shall be appointed by the Trust,
the Company shall upon termination of this Agreement deliver to
such successor agent at the office of the Company all properties of
the Trust held by it hereunder. If no such successor agent shall
be appointed, the Company shall at its office upon receipt of
Proper Instructions deliver such properties in accordance with such
instructions.
In the event that no written order designating a successor agent or
Proper Instructions shall have been delivered to the Company on or
before the date when such termination shall become effective, then
the Company shall have the right to deliver to a bank or trust
company, which is a "bank" as defined in the 1940 Act, of its own
selection, having an aggregate capital, surplus, and undivided
profits, as shown by its last published report, of not less than
$2,000,000, all properties held by the Company under this
Agreement. Thereafter, such bank or trust company shall be the
successor of the Company under this Agreement.
Article 27. Force Majeure.
The Company shall have no liability for cessation of services
hereunder or any damages resulting therefrom to the Fund as a
result of work stoppage, power or other mechanical failure, natural
disaster, governmental action, communication disruption or other
impossibility of performance.
Article 28. Assignment; Successors.
This Agreement shall not be assigned by either party without the
prior written consent of the other party, except that either party
may assign to a successor all of or a substantial portion of its
business, or to a party controlling, controlled by, or under common
control with such party. Nothing in this Article 28 shall prevent
the Company from delegating its responsibilities to another entity
to the extent provided herein.
Article 29. Severability.
In the event any provision of this Agreement is held illegal, void
or unenforceable, the balance shall remain in effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their names and on their behalf under their seals by
and through their duly authorized officers, as of the day and year
first above written.
ATTEST: INVESTMENT COMPANIES (listed on Exhibit 1)
/s/ John W. McGonigle_______ By:__/s/ John F. Donahue___
John W. McGonigle John F. Donahue
Secretary Chairman
ATTEST: FEDERATED SERVICES COMPANY
/s/ Jeannette Fisher-Garber By:_/s/ James J. Dolan_____
Jeannette Fisher-Garber James J. Dolan
Secretary President
Schedule A
Fund Accounting
Fee Schedule
I. Portfolio Record Keeping/Fund Accounting Services
Maintain investment ledgers, provide selected portfolio
transactions, position and income reports. Maintain general ledger
and capital stock accounts. Prepare daily trial balance. Provide
selected general ledger reports. Calculate net asset value daily.
Securities yield or market value quotations will be provided to
State Street by the fund or via State Street Bank automated pricing
services.
ANNUAL FEES
ASSET
First $250 Million 2.0 Basis Points
Next $250 Million 1.5 Basis Points
Next $250 Million 1.0 Basis Point
Excess .5 Basis Point
Minimum fee per year $39,000
Additional class of shares per year $12,000
II. Special Services
Fees for activities of a non-recurring nature such as fund
consolidation or reorganization, extraordinary security shipments
and the preparation of special reports will be subject to
negotiation.
III. Term of the Contract
The parties agree that this fee schedule shall become effective June
1, 1993 and will remain in effect until it is revised as a result of
negotiations initiated by either party.
Schedule A1
Fund Accounting
Fee Schedule
Annual
First $100 Million 3.0 Basis Points
$100 Million - $300 Million 2.0 Basis Points
$300 Million - $500 Million 1.0 Basis Points
Over $500 Million 0.5 Basis Points
Fund Minimum $39,000
Additional Class of Shares $12,000
(Plus pricing charges and other out-of-pocket expenses)
Schedule B
Out-of-Pocket Expenses
Fund Accounting
Out-of-pocket expenses 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
_ Federated Funds _
Fees and Expenses
Shareholder Recordkeeping
I. Annual Maintenance
Charge
The annual maintenance charge includes the processing of all
transactions and correspondence. The fee is billable on a monthly
basis at the rate of 1/12 of the annual fee. A charge is made for
an account in the month that an account opens or closes.
Basic Annual per Account Fee
The individual per account charges will be billed as follows:
- Money Market Fund/Daily Accrual $16.65
- Money Market Fund/Sweep Account $10.00
- Fluctuating NAV/Daily Accrual
Non FundServe $16.65
Non Networked FundServe
$14.65
- CDSC/Declared Dividend
Non FundServe $13.75
Non Networked
FundServe $11.75
Networking Levels
1, 2, and 4 $11.75
Networking Level 3
$9.00
- Declared Dividend
Non FundServe
$8.75
Non Networked
FundServe $6.75
Networked
FundServe Levels 1, 2, 3, and 4 $6.75
Taxpayer Identification Processing (TIN)
The charge for TIN solicitation includes maintenance and
certification and complies to all known government regulations
regarding TIN processing.
- Maintenance $.25 per item
- Certification $.10 per item
I. Annual Maintenance Charge (con't.)
Closed Account Fee $.10 per account per
month
(No fee assessed for $0 balance open accounts)
Minimum Charges
- The monthly maintenance charge for each fund will be the actual
account fees or $1000, whichever is greater.
- All funds will be subject to the minimum monthly fee of $1,000
except that the minimum will be waived for the initial six months or
until the fund's net assets exceed $50,000,000, whichever occurs
first.
- The "clone" funds will be subject to a monthly minimum fee of
$600.
II. Out-of-Pocket Expenses
Out-of-pocket expenses include but are not limited to: postage,
forms, telephone, microfilm, microfiche, and expenses incurred at
the specific direction of the fund. Postage for mass mailings is
due seven days in advance of the mailing date.
III. Payment
Payment is due thirty days after the date of the invoice.
Schedule C1
_ Bank Proprietary Funds _
Fees and Expenses
Shareholder Recordkeeping
I. Annual Maintenance Charge
The annual maintenance charge includes the processing of all
transactions and correspondence. The fee is billable on a monthly
basis at the rate of 1/12 of the annual fee. A charge is made for
an account in the month that an account opens or closes.
Basic Annual per Account Fee
The individual per account charges will be billed as follows:
- Money Market Fund/Daily Accrual $16.65
- Money Market Fund/Sweep Account $10.00
- Fluctuating NAV/Daily Accrual
_ Non FundServe
$16.65
_ Non Networked
FundServe $14.65
- CDSC/Declared Dividend
_ Non FundServe
$13.75
_ Non Networked
FundServe $11.75
_ Networking Levels 1,
2, and 4 $11.75
_ Networking Level 3
$9.00
- Declared Dividend
_ Non FundServe
$8.75
_ Non Networked
FundServe $6.75
_ Networked FundServe
Levels 1, 2, 3, and 4 $6.75
Taxpayer Identification Processing (TIN)
The charge for TIN solicitation includes maintenance and
certification and complies to all known government regulations
regarding TIN processing.
- Maintenance $.25 per item
- Certification $.10 per item
I. Annual Maintenance Charge (con't.)
Closed Account Fee $.10 per account per
month
(No fee assessed for $0 balance open accounts)
Minimum Charges
- The monthly maintenance charge for each fund will be the actual
account fees or $2000, whichever is greater.
II. Out-of-Pocket Expenses
Out-of-pocket expenses include but are not limited to: postage,
forms, telephone, microfilm, microfiche, and expenses incurred at
the specific direction of the fund. Postage for mass mailings is
due seven days in advance of the mailing date.
III. Payment
Payment is due thirty days after the date of the invoice.
Schedule C2
_ Bank Proprietary Funds _
Fees and Expenses
Shareholder Recordkeeping
I. Group I Services
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
- Contingent
Deferred Sales Charge (Additionally) $5.00
(monthly and quarterly funds only)
- Closed
Accounts* $1.20
Termination Fee (One time charge per fund, class or other subdivision)
$20,000
II. Group II Services
Other Account Fees* (Annual account charge - Services or features not
covered above)
- Account
Activity Processing $3.50
(includes
account establishment, transaction and maintenance processing)
- Account
Servicing $4.50
(includes
shareholder servicing and correspondence)
* 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
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
SCHEDULE E
Fee Schedule
I. Custody Services
Maintain Custody of fund assets. Settle portfolio purchases and
sales. Report buy and sell fails. Determine and collect portfolio
income. Make cash disbursements and report cash transactions.
Monitor corporate actions.
ANNUAL FEES
ASSET
First $500 Million 1.0
Basis Point
Excess .5
Basis Point
Minimum fee per year
$15,000
Wire Fees $2.70
per wire
Settlements:
Each
DTC Commercial Paper $9.00
Each
DTC Transaction $9.00
Each
Federal Reserve Book Entry Transaction (Repo) $4.50
Each
Repo with Banks Other than State Street Bank $7.50
Each
Physical Transaction (NY/Boston, Private Placement)
$21.75
Each
Option Written/Exercised/Expired
$18.75
Each
Stock Load Transaction
$12.00
Each
Book Entry Muni (Sub-custody) Transaction
$15.00
Index
Fund/ETD Cost
+ 15%
II. Out-Of-Pocket Expenses
Telephone
Postage & Insurance
Armored carrier costs
Legal fees
Supplies related to fund records
Processing validation certificates
Forms, envelopes, Xerox copies, supplies, etc.
III. Special Services
Fees for activities of a non-recurring nature such as fund
consolidation or reorganization, extraordinary security shipments and
the preparation of special reports will be subject to negotiation.
IV. Coupon Clipping
Monitoring for calls and processing for each monthly issue held
Monthly Charge $5.00
V. Balance Credit
A balance credit equal to 75% of the average balance in the custodian
account for the monthly billed times the 30-day T-Bill Rate on the
last Monday of the month billed will be applied against Section I
through IV above.
VI. Term of the Contract
The parties agree that this fee schedule shall become effective June
1, 1993 and will remain in effect until it is revised as a result of
negotiations initiated by either party.
EXHIBIT 1
FA=Fund Accounting
SR=Shareholder Recordkeeping
CSP=Custody Services Procurement
<TABLE>
<CAPTION>
CONTRACT SERVICES
RELEVANT
DATE INVESTMENT COMPANY PROVIDED SCHEDULES
<S> <C> <C> <C>
12/1/93 111 Corcoran Fund
12/1/93 111 Corcoran Bond Fund FA, SR A,B,C1
12/1/93 111 Corcoran North
Carolina Municipal Securities Fund FA, SR A,B,C1
12/13/93 Alexander Hamilton Funds
12/13/93 Alexander Hamilton Government Income Fund FA,SR,CSP A,B,C2,D,E
12/13/93 Alexander Hamilton Equity Growth
and Income Fund FA,SR,CSP A,B,C2,D,E
12/13/94 Alexander Hamilton Municipal Income Fund FA,SR,CSP A,B,C2,D,E
12/1/93 American Leaders Fund, Inc.
12/1/93 Class A Shares FA,SR,CSP A,B,C,E
12/1/93 Class C Shares FA,SR,CSP A,B,C,E
12/1/93 Fortress Shares FA,SR,CSP A,B,C,E
12/1/93 Automated Cash Management Trust FA,SR,CSP A,B,C,E
12/1/93 Automated Government Money Trust FA,SR,CSP A,B,C,E
01/07/94 Peachtree Funds (2/11/94
effective/formerly BankSouth Select Funds)
01/07/94 BankSouth
Select Georgia Tax-Free Income Fund FA,SR C2,D
01/07/94 BankSouth
Select Government Money Market Fund FA,SR C2,D
01/07/94 BankSouth
Select Prime Money Market Fund FA,SR C2,D
01/07/94 BankSouth
Select Bond Fund FA,SR C2,D
01/07/94 BankSouth
Select Equity Fund FA,SR C2,D
12/1/93 BayFunds
12/1/93 BayFunds Money Market Portfolio
Investment Shares FA A1,B
12/1/93 Trust Shares FA A1,B
12/1/93 BayFunds Bond Portfolio
12/1/93 Investment Shares FA A1,B
12/1/93 Trust Shares FA A1,B
12/1/93 BayFunds Equity Portfolio
12/1/93 Investment Shares FA A1,B
12/1/93 Trust Shares FA A1,B
12/1/93 BayFunds Short-Term Yield Portfolio
12/1/93 Investment Shares FA A1,B
12/1/93 Trust Shares FA A1,B
12/1/93 BayFunds U.S. Treasury Money Market Portfolio
12/1/93 Investment Shares FA A1,B
12/1/93 Trust Shares FA A1,B
12/1/93 The Biltmore Funds
12/1/93 Biltmore Balanced Fund FA,SR A1,B,C2,D
12/1/93 Biltmore Equity Fund FA,SR A1,B,C2,D
12/1/93 Biltmore Fixed Income Fund FA,SR A1,B,C
12/1/93 Biltmore Equity Index Fund FA,SR A1,B,C2,D
12/1/93 Biltmore Money Market Fund
12/1/93 Institutional Shares FA,SR A1,B,C2,D
12/1/93 Investment Shares FA,SR A1,B,C2,D
12/1/93 Biltmore Prime Cash Management Fund
12/1/93 Institutional Shares
12/1/93 Biltmore Equity Fund FA,SR A1,B,C2,D
12/1/93 Biltmore Short-Term Fixed Income Fund FA,SR A1,B,C2,D
12/1/93 Biltmore Special Values Fund FA,SR A1,B,C2,D
12/1/93 Biltmore Tax-Free Money Market Fund
12/1/93 Institutional Shares FA,SR A1,B,C2,D
12/1/93 Investment Shares FA,SR A1,B,C2,D
12/1/93 Biltmore U.S. Treasury Money Market Fund
12/1/93 Institutional Shares FA,SR A1,B,C2,D
12/1/93 Investment Shares FA,SR A1,B,C2,D
12/1/93 The Biltmore Municipal Funds
12/1/93 South Carolina Municipal Bond Fund FA,SR A1,B,C2,D
12/1/93 The Boulevard Funds
12/1/93 Boulevard Blue Chip Growth Fund FA,SR A1,B,C1
12/1/93 Boulevard Managed Income Fund FA,SR A1,B,C1
12/1/93 Boulevard Managed Municipal Fund FA,SR A1,B,C1
12/1/93 Boulevard Strategic Balanced Fund FA,SR A1,B,C1
12/1/93 California Municipal Cash Trust FA,SR,CSP A,B,C,E
12/1/93 Cash Trust Series, Inc.
12/1/93 Government Cash Series FA,SR,CSP A,B,C,E
12/1/93 Municipal Cash Series FA,SR,CSP A,B,C,E
12/1/93 Prime Cash Series FA,SR,CSP A,B,C,E
12/1/93 Treasury Cash Series FA,SR,CSP A,B,C,E
12/1/93 Cash Trust Series II
12/1/93 Municipal Cash Series II FA,SR,CSP A,B,C,E
12/1/93 Treasury Cash Series II FA,SR,CSP A,B,C,E
12/1/93 DG Investor Series
12/1/93 DG Equity Fund FA,SR A1,B,C2,D
12/1/93 DG Government Income Fund FA,SR A1,B,C2,D
12/1/93 DG Limited Term Government Income Fund FA,SR A1,B,C2,D
12/1/93 DG Municipal Income Fund FA,SR A1,B,C2,D
12/1/93 DG U.S. Government Money Market Fund FA,SR A1,B,C2,D
12/1/93 Federated ARMs Fund
12/1/93 Institutional Service Shares FA,SR,CSP A,B,C,E
12/1/93 Institutional Shares FA,SR,CSP A,B,C,E
12/1/93 Federated Bond Fund FA,SR,CSP A,B,C,E
12/1/93 Federated Exchange Fund, Ltd. FA,SR,CSP A,B,C,E
12/1/93 Federated GNMA Trust
12/1/93 Institutional Service Shares FA,SR,CSP A,B,C,E
12/1/93 Institutional Shares FA,SR,CSP A,B,C,E
12/1/93 Federated Government Trust
12/1/93 Automated Government Cash Reserves FA,SR,CSP A,B,C,E
12/1/93 Automated Treasury Cash Reserves FA,SR,CSP A,B,C,E
12/1/93 U.S. Treasury Cash Reserves FA,SR,CSP A,B,C,E
12/1/93 Federated Growth Trust FA,SR,CSP A,B,C,E
12/1/93 Federated High Yield Trust FA,SR,CSP A,B,C,E
12/1/93 Federated Income Securities Trust
12/1/93 Federated Short-Term Income Fund
12/1/93 Institutional Service Shares FA,SR,CSP A,B,C,E
12/1/93 Institutional Shares
12/1/93 Intermediate Income Fund
12/1/93 Institutional Service Shares
12/1/93 Institutional Shares
12/1/93 Federated Income Trust
12/1/93 Institutional Service Shares FA,SR,CSP A,B,C,E
12/1/93 Institutional Shares FA,SR,CSP A,B,C,E
12/1/93 Federated Index Trust
12/1/93 Max-Cap Fund
12/1/93 Institutional Service Shares FA,SR,CSP A,B,C,E
12/1/93 Institutional Shares
12/1/93 Mid-Cap Fund FA,SR,CSP A,B,C,E
12/1/93 Mini-Cap Fund FA,SR,CSP A,B,C,E
12/1/93 Federated Intermediate Government Trust
12/1/93 Institutional Service Shares FA,SR,CSP A,B,C,E
12/1/93 Institutional Shares FA,SR,CSP A,B,C,E
12/1/93 Federated Investment Funds
12/1/93 Growth Portfolio FA,SR,CSP A,B,C,E
12/1/93 High Quality Bond Portfolio FA,SR,CSP A,B,C,E
12/1/93 Pennsylvania Intermediate Municipal
Income Portfolio FA,SR,CSP A,B,C,E
12/1/93 Value Equity Portfolio FA,SR,CSP A,B,C,E
12/1/93 Federated Master Trust FA,SR,CSP A,B,C,E
12/1/93 Federated Municipal Trust
12/1/93 Alabama Municipal Cash Trust FA,SR,CSP A,B,C,E
12/1/93 Connecticut Municipal Cash Trust
12/1/93 Institutional Service Shares
3/2/94 Maryland Municipal Cash Trust FA,SR,SCP A,B,C,E
12/1/93 Massachusetts Municipal Cash Trust
12/1/93 BayFund Shares FA,SR,CSP A,B,C,E
12/1/93 Institutional Service Shares
12/1/93 Minnesota Municipal Cash Trust
12/1/93 Cash Series Shares FA,SR,CSP A,B,C,E
12/1/93 Institutional Shares
12/1/93 New Jersey Municipal Cash Trust
12/1/93 Cash Series Shares FA,SR,CSP A,B,C,E
12/1/93 Institutional Shares
12/1/93 Institutional Service Shares
12/1/93 Ohio Municipal Cash Trust
12/1/93 Cash II Shares FA,SR,CSP A,B,C,E
12/1/93 Institutional Shares
12/1/93 Pennsylvania Municipal Cash Trust
12/1/93 Cash Series Shares FA,SR,CSP A,B,C,E
12/1/93 Institutional Service Shares
12/1/93 Virginia Municipal Cash Trust
12/1/93 Institutional Service Shares
12/1/93 Institutional Shares FA,SR,CSP A,B,C,E
12/1/93 Federated Short-Intermediate Government Trust
12/1/93 Institutional Service Shares FA,SR,CSP A,B,C,E
12/1/93 Institutional Shares FA,SR,CSP A,B,C,E
12/1/93 Federated Short-Intermediate Municipal Trust
12/1/93 Institutional Service Shares FA,SR,CSP A,B,C,E
12/1/93 Institutional Shares FA,SR,CSP A,B,C,E
12/1/93 Federated Short-Term U.S. Government Trust FA,SR,CSP A,B,C,E
12/1/93 Stock and Bond Fund, Inc.
12/1/93 Class A Shares FA,SR,CSP A,B,C,E
12/1/93 Class C Shares FA,SR,CSP A,B,C,E
12/1/93 Federated Stock Trust FA,SR,CSP A,B,C,E
12/1/93 Federated Tax-Free Trust FA,SR,CSP A,B,C,E
12/1/93 Financial Reserves Fund FA A1,B
12/1/93 First Priority Funds
12/1/93 First Priority Equity Fund
12/1/93 Investment Shares FA,SR A1,B,C2,D
12/1/93 Trust Shares FA,SR A1,B,C2,D
12/1/93 First Priority Fixed Income Fund
12/1/93 Investment Shares FA,SR A1,B,C2,D
12/1/93 Trust Shares FA,SR A1,B,C2,D
12/1/93 First Priority Treasury Money Market Fund
12/1/93 Investment Shares FA,SR A1,B,C2,D
12/1/93 Trust Shares FA,SR A1,B,C2,D
12/1/93 First Priority Limited Maturity Government Fund FA,SR A1,B,C2,D
12/1/93 Fixed Income Securities, Inc.
12/1/93 Limited Term Fund
12/1/93 Fortress Shares FA,SR,CSP A,B,C,E
12/1/93 Investment Shares FA,SR,CSP A,B,C,E
12/1/93 Limited Term Municipal Fund
12/1/93 Fortress Shares FA,SR,CSP A,B,C,E
12/1/93 Investment Shares FA,SR,CSP A,B,C,E
12/1/93 Multi-State Municipal Income Fund FA,SR,CSP A,B,C,E
12/1/93 Limited Maturity Government Fund FA,SR,CSP A,B,C,E
12/1/93 Fortress Adjustable Rate U.S. Government Fund,
Inc. FA,SR,CSP A,B,C,E
12/1/93 Fortress Municipal Income Fund, Inc. FA,SR,CSP A,B,C,E
12/1/93 Fortress Utility Fund, Inc. FA,SR,CSP A,B,C,E
12/1/93 FT Series, Inc.
12/1/93 International Equity Fund
12/1/93 Class A Shares FA,SR,CSP A,B,C,E
12/1/93 Class C Shares FA,SR,CSP A,B,C,E
12/1/93 International Income Fund
12/1/93 Class A Shares FA,SR,CSP A,B,C,E
12/1/93 Class C Shares FA,SR,CSP A,B,C,E
12/1/93 Fund for U.S. Government Securities, Inc.
12/1/93 Class A Shares FA,SR,CSP A,B,C,E
12/1/93 Class C Shares FA,SR,CSP A,B,C,E
12/1/93 Government Income Securities, Inc. FA,SR,CSP A,B,C,E
4/8/94 Independence One Mutual Funds
Independence One Michigan Municipal Cash Fund SR C1,D
Independence One Prime Money Market Fund SR C1,D
Independence One U.S. Government Securities Fund
Investment Shares SR C1,D
Trust Shares SR C1,D
Independence One U.S. Treasury Money Market Fund SR C1,D
1/11/94 Insight Institutional Series, Inc.
1/11/94 Insight Adjustable Rate
Mortgage Fund FA,SR,CSP A,B,C,E
1/11/94 Insight Limited Term Income Fund
FA,SR,CSP A,B,C,E
1/11/94 Insight Limited Term Municipal Fund
FA,SR,CSP A,B,C,E
1/11/94 Insight U.S. Government Fund FA,SR,CSP A,B,C,E
12/1/93 Intermediate Municipal Trust
12/1/93 Institutional Service Shares FA,SR,CSP A,B,C,E
12/1/93 Institutional Shares
12/1/93 Ohio Intermediate Municipal Trust FA,SR,CSP A,B,C,E
12/1/93 Pennsylvania Intermediate Municipal Trust FA,SR,CSP A,B,C,E
2/16/94 California Intermediate Municipal Trust FA,SR,CSP A,B,C,E
12/1/93 Investment Series Fund, Inc.
12/1/93 Capital Growth Fund
12/1/93 Investment Shares (Schedules C2 & D are
for IRM) FA,SR,CSP A,B,C,C2,D,E
12/1/93 Class A Shares FA,SR,CSP
12/1/93 Class Shares FA,SR,CSP A,B,C,E
12/1/93 Fortress Bond Fund FA,SR,CSP A,B,C,E
12/1/93 Investment Series Trust
12/1/93 High Quality Stock Fund(Schedules C2 & D
are for IRM) FA,SR,CSP A,B,C,C2,D,E
12/1/93 Municipal Securities Income Fund FA,SR,CSP A,B,C,E
12/1/93 U.S. Government Bond Fund(Schedules C2 & D
are for IRM) FA,SR,CSP A,B,C,C2,D,E
12/1/93 Edward D. Jones & Co. Daily Passport
Cash Trust FA,SR,CSP A,B,C,E
12/1/93 Liberty Equity Income Fund, Inc.
12/1/93 Class A Shares FA,SR,CSP A,B,C,E
12/1/93 Class C Shares FA,SR,CSP A,B,C,E
12/1/93 Fortress Shares FA,SR,CSP A,B,C,E
12/1/93 Liberty High Income Bond Fund, Inc.
12/1/93 Class A Shares FA,SR,CSP A,B,C,E
12/1/93 Class C Shares FA,SR,CSP A,B,C,E
12/1/93 Liberty Municipal Securities Fund, Inc.
12/1/93 Class A Shares FA,SR,CSP A,B,C,E
12/1/93 Class C Shares FA,SR,CSP A,B,C,E
12/1/93 Liberty Term Trust, Inc. - 1999 FA,SR,CSP A,B,C,E
12/1/93 Liberty U.S. Government Money Market Trust FA,SR,CSP A,B,C,E
12/1/93 Liberty Utility Fund, Inc.
12/1/93 Class A Shares FA,SR,CSP A,B,C,E
12/1/93 Class C Shares FA,SR,CSP A,B,C,E
12/1/93 Liquid Cash Trust FA,SR,CSP A,B,C,E
12/1/93 Mark Twain Funds
12/1/93 Mark Twain Equity Portfolio FA,SR A,B,C2,D
12/1/93 Mark Twain Fixed Income Portfolio FA,SR A,B,C2,D
12/1/93 Mark Twain Government Money Market Portfolio
12/1/93 Shares FA,SR
12/1/93 FA,SR A,B,C2,D
12/1/93 Mark Twain Municipal Income Portfolio FA,SR A,B,C2,D
12/1/93 Marshall Funds, Inc.
12/1/93 Marshall Government Income Fund FA,SR A1,B,C2,D
12/1/93 Marshall Intermediate Bond Fund
FA,SR A1,B,C2,D
12/1/93 Marshall Money Market Fund
12/1/93 Investment Shares FA,SR A1,B,C2,D
12/1/93 Trust Shares FA,SR A1,B,C2,D
12/1/93 Marshall Short-Term Income Fund
FA,SR A1,B,C2,D
12/1/93 Marshall Stock Fund FA,SR A1,B,C2,D
12/1/93 Marshall Tax-Free Money Market Fund
FA,SR A1,B,C2,D
12/1/93 Marshall Balanced Fund FA,SR A1,B,C2,D
12/1/93 Marshall Equity Income Fund FA,SR A1,B,C2,D
12/1/93 Marshall Mid-Cap Stock Fund FA,SR A1,B,C2,D
12/1/93 Marshall Value Equity Fund FA,SR A1,B,C2,D
12/1/93 Marshall Short-Intermediate Tax-free Fund FA,SR A1,B,C2,D
12/1/93 Money Market Management, Inc.(Schedules
C2 & D are for IRM) FA,SR,CSP A,B,C,C2,D,E
12/1/93 Money Market Trust FA,SR,CSP A,B,C,E
12/1/93 Money Market Obligations Trust
12/1/93 Government Obligations Fund FA,SR,CSP A1,B,C,E
12/1/93 Prime Obligations Fund FA,SR,CSP A1,B,C,E
12/1/93 Tax-Free Obligations Fund FA,SR,CSP A1,B,C,E
12/1/93 Treasury Obligations Fund FA,SR,CSP A1,B,C,E
12/1/93 Municipal Securities Income Trust
12/1/93 California Municipal Income Fund
12/1/93 Fortress Shares FA,SR,CSP A,B,C,E
12/1/93 Florida Municipal Income Fund FA,SR,CSP A,B,C,E
12/1/93 Maryland Municipal Income Fund
FA,SR,CSP A,B,C,E
12/1/93 Michigan Municipal Income Fund
FA,SR,CSP A,B,C,E
12/1/93 New Jersey Municipal Income Fund
FA,SR,CSP A,B,C,E
12/1/93 New York Municipal Income Fund
12/1/93 Fortress Shares FA,SR,CSP A,B,C,E
12/1/93 Ohio Municipal Income Fund
12/1/93 Fortress Shares FA,SR,CSP A,B,C,E
12/1/93 Trust Shares FA,SR,CSP A,B,C,E
12/1/93 Pennsylvania Municipal Income Fund
12/1/93 Investment Shares FA,SR,CSP
12/1/93 Trust Shares FA,SR,CSP A,B,C,E
12/1/93 Income shares FA,SR,CSP A,B,C,E
12/1/93 Texas Municipal Income Fund FA,SR,CSP A,B,C,E
12/1/93 Virginia Municipal Income Fund FA,SR,CSP A,B,C,E
12/1/93 New York Municipal Cash Trust
12/1/93 Cash II Shares FA,SR,CSP A,B,C,E
12/1/93 Institutional Service Shares FA,SR,CSP A,B,C,E
12/1/93 The Planters Funds
12/1/93 Tennessee Tax-Free Bond Fund FA,SR A1,B,C2,D
12/1/93 Portage Funds
12/1/93 Portage Government Money Market Fund
12/1/93 Investment Shares [INV.SH. MERGED INTO
TRUST SH. 2/1/94]
12/1/93 Trust Shares SR C2,D
12/1/93 RIMCO Monument Funds
12/1/93 RIMCO Monument Bond Fund FA,SR A,B,C2,D
12/1/93 RIMCO Monument Prime Money Market Fund FA,SR A,B,C2,D
12/1/93 RIMCO Monument Stock Fund FA,SR A,B,C2,D
12/1/93 RIMCO Monument U.S. Treasury Money Market Fund FA,SR A,B,C2,D
12/1/93 Signet Select Funds
12/1/93 Maryland Municipal Bond Fund
12/1/93 Investment Shares FA,SR A,B,C1
12/1/93 Trust Shares FA,SR A,B,C1
12/1/93 Money Market Fund
12/1/93 Investment Shares FA,SR A,B,C1
12/1/93 Trust Shares FA,SR A,B,C1
12/1/93 Treasury Money Market Fund
12/1/93 Investment Shares FA,SR A,B,C1
12/1/93 Trust Shares FA,SR A,B,C1
12/1/93 U.S. Government Income Fund
12/1/93 Investment Shares FA,SR A,B,C1
12/1/93 Trust Shares FA,SR A,B,C1
12/1/93 Value Equity Fund
12/1/93 Investment Shares FA,SR A,B,C1
12/1/93 Trust Shares FA,SR A,B,C1
12/1/93 Virginia Municipal Bond Fund
12/1/93 Investment Shares FA,SR A,C112/1/
12/1/93 The Shawmut Funds
12/1/93 The Shawmut Fixed Income Fund
12/1/93 Investment Shares FA,SR A,B,C2,D
12/1/93 Trust Shares FA,SR A,B,C2,D
12/1/93 The Shawmut Growth Equity Fund
12/1/93 Investment Shares FA,SR A,B,C2,D
12/1/93 Trust Shares FA,SR A,B,C2,D
12/1/93 The Shawmut Growth and Income Equity Fund In Shares FA,SR
A,B,C2,D
12/1/93 Trust Shares FA,SR A,B,C2,D
12/1/93 The Shawmut Intermediate Government Income Fund
12/1/93 Shares FA,SR A,B,C2,D
12/1/93 Trust Shares FA,SR A,B,C2,D
12/1/93 The Shawmut Limited Term Income Fund
12/1/93 In Shares FA,SR A,B,C2,D
12/1/93 Trust Shares FA,SR A,B,C2,D
12/1/93 The Shawmut Prime Money Market Fund
12/1/93 Shares FA,SR A,B,C2,D
12/1/93 Trust Shares FA,SR A,B,C2,D
12/1/93 The Shawmut Small Capitalization Equity Fund
12/1/93 Investment Shares FA,SR A,B,C2,D
12/1/93 Trust Shares FA,SR A,B,C2,D
12/1/93 The Shawmut Connecticut Municipal Money Market Fund
12/1/93 Investment Shares FA,SR
12/1/93 Trust Shares FA,SR A,B,C2,D
12/1/93 The Shawmut Connecticut Intermediate Municipal Income Fund
FA,SR A,B,C2,D
12/1/93 The Shawmut Massachusetts Municipal Money Market Fund
FA,SR A,B,C2,D
12/1/93 The Shawmut Massachusetts Intermediate Municipal Income Fund
FA,SR
12/1/93 Star Funds
12/1/93 Star Prime Obligations Fund FA,SR A,B,C2,D
12/1/93 Star Relative Value Fund FA,SR A,B,C2,D
12/1/93 Star Tax-Free Money Market Fund FA,SR A,B,C2,D
12/1/93 Star Treasury Fund FA,SR A,B,C2,D
12/1/93 Star U.S. Government Income Fund FA,SR A,B,C2,D
12/1/93 The Stellar Fund FA,SR A,B,C2,D
12/1/93 Sunburst Funds
12/1/93 Sunburst Short-Intermediate Government Bond Fund
FA,ST A,B,C2,D
12/1/93 Tax-Free Instruments Trust
12/1/93 Institutional Service Shares FA,SR,CSP A,B,C,E
12/1/93 Institutional Shares FA,SR,CSP A,B,C,E
12/1/93 The Monitor Funds
12/1/93 The Monitor Fixed Income Securities Fund
12/1/93 Investment Shares SR C1
12/1/93 Trust Shares SR C1
12/1/93 The Monitor Growth Fund
12/1/93 Investment Shares SR C1
12/1/93 Trust Shares SR C1
12/1/93 The Monitor Income Equity Fund SR C1
12/1/93 The Monitor Money Market Fund
12/1/93 Investment Shares SR C1
12/1/93 Trust Shares SR C1
12/1/93 The Monitor Mortgage Securities Fund
12/1/93 Investment Shares SR C1
12/1/93 Trust Shares SR C1
12/1/93 The Monitor Ohio Municipal Money Market Fund
12/1/93 Investment Shares SR C1
12/1/93 Trust Shares SR C1
12/1/93 The Monitor Ohio Tax-Free Fund
12/1/93 Investment Shares SR C1
12/1/93 Trust Shares SR C1
12/1/93 The Monitor Short/Intermediate Fixed Income
12/1/93 Securities Fund SR C1
12/1/93 The Monitor U.S. Treasury Money Market Fund
12/1/93 Investment Shares SR C1
12/1/93 Trust Shares SR C1
12/1/93 The Starburst Funds
12/1/93 The Starburst Government Income Fund FA,SR A,B,C2,D
12/1/93 The Starburst Government Money Market Fund
12/1/93 Investment Shares FA,SR A,B,C2,D
12/1/93 Trust Shares FA,SR A,B,C2,D
12/1/93 The Starburst Money Market Fund
12/1/93 Investment Shares FA,SR A,B,C2,D
12/1/93 Trust Shares FA,SR A,B,C2,D
12/1/93 The Starburst Municipal Income Fund FA,SR A,B,C2,D
12/1/93 The Starburst Funds II
12/1/93 The Starburst Quality Income Fund FA,SR A,B,C2,D
12/1/93 Trademark Funds
12/1/93 Trademark Equity Fund FA,SR A,B,C2,D
12/1/93 Trademark Government Income Fund FA,SR A,B,C2,D
12/1/93 Trademark Kentucky Municipal Bond Fund FA,SR A,B,C2,D
12/1/93 Trademark Short-Intermediate Government Fund FA,SR A,B,C2,D
12/1/93 Trust for Financial Institutions
12/1/93 Government Qualifying Liquidity Fund
12/1/93 Institutional Service Shares FA,SR,CSP A,B,C,E
12/1/93 Institutional Shares FA,SR,CSP A,B,C,E
12/1/93 Short-Term Government Qualifying Liquidity Fund
12/1/93 Institutional Service Shares FA,SR,CSP A,B,C,E
12/1/93 Institutional Shares FA,SR,CSP A,B,C,E
12/1/93 Government Money Market Fund
12/1/93 Institutional Service Shares FA,SR,CSP A,B,C,E
12/1/93 Institutional Shares FA,SR,CSP A,B,C,E
12/1/93 Trust for Government Cash Reserves FA,SR,CSP A,B,C,E
12/1/93 Trust for Short-Term U.S. Government Securities
FA,SR,CSP A,B,C,E
12/1/93 Trust for U.S. Treasury Obligations FA,SR,CSP A,B,C,E
12/1/93 Vulcan Funds
12/1/93 Vulcan Bond Fund FA,SR A1,B,C2,D
12/1/93 Vulcan Stock Fund FA,SR A1,B,C2,D
12/1/93 Vulcan Treasury Obligations Money Market Fund FA,SR A1,B,C2,D
2/24/94 World Investment Series, Inc.
World Utility Fund Class A Shares
FA,SR,CSP A,B,C,E
Fortress Shares FA,SR,CSP A,B,C,E
</TABLE>
Exhibit 4 Under Form N-1A
Exhibit 3(c) Under Item 601/Reg. S-K
WORLD INVESTMENT SERIES INC.
WORLD UTILITY FUND
CLASS A SHARES
Number
Shares
_____
_____
Account No. Alpha Code Incorporated Under the See Reverse Side For
Laws of the Certain Definitions
State of
Maryland
THIS IS TO CERTIFY THAT is
the owner of
CUSIP 981487 10 1
Fully Paid and Non-Assessable Shares of common stock of Class A Shares of
the WORLD UTILITY FUND portfolio of WORLD INVESTMENT SERIES INC., hereafter
called the Corporation, transferable on the books of the Corporation by the
owner in person or by duly authorized attorney upon surrender of this
certificate properly endorsed.
The shares represented hereby are issued and shall be held subject to
the provisions of the Articles of Incorporation and By-Laws of the
Corporation and all amendments thereto, all of which the holder by
acceptance hereof assents.
This Certificate is not valid unless countersigned by the Transfer
Agent.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed in its name by its proper officers and to be sealed with its seal.
Dated: WORLD INVESTMENT SERIES INC.
Corporate Seal
1994
Maryland
/s/ Edward C. Gonzales
/s/ John F. Donahue
Vice President and Treasurer
Chairman
Countersigned: Federated Services
Company (Boston)
Transfer Agent
By:
Authorized Signature
The following abbreviations, when used in the inscription on the face of
this Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations;
TEN COM - as tenants in common UNIF GIFT MIN ACT-...Custodian...
TEN ENT - as tenants by the entireties (Cust) (Minors)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act.............................
in common (State)
Additional abbreviations may also be used though not in the above list.
For value received__________ hereby sell, assign, and transfer unto
Please insert social security or other
identifying number of assignee
______________________________________
_____________________________________________________________________________
(Please print or typewrite name and address, including zip code, of
assignee)
_____________________________________________________________________________
_____________________________________________________________________________
______________________________________________________________________
shares
of common stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
__________________________________________
_____________________________________________________________________________
to transfer the said shares on the books of the within named Corporation
with full power of substitution in the premises.
Dated______________________
NOTICE:______________________________
The signature to this assignment must
correspond with the name as written upon
the face of the certificate in every
particular, without alteration or
enlargement or any change whatever.
THIS SPACE MUST NOT BE COVERED IN ANY WAY
DOCUMENT DESCRIPTION - SPECIMEN STOCK CERTIFICATE
Page One
A. The Certificate is outlined by an ______ one-half inch border.
B. The number in the upper left-hand corner and the number of shares in
the upper right-hand corner are outlined by octagonal boxes.
C. The cusip number in the middle right-hand area of the page is boxed.
D. The Maryland corporate seal appears in the bottom middle of the page.
Page Two
The social security or other identifying number of the assignee
appears in a box in the top-third upper-left area of the page.
WORLD INVESTMENT SERIES INC.
WORLD UTILITY FUND
FORTRESS SHARES
Number
Shares
_____
_____
Account No. Alpha Code Incorporated Under the See Reverse Side For
Laws of the Certain Definitions
State of
Maryland
THIS IS TO CERTIFY THAT is
the owner of
CUSIP 981487 20 0
Fully Paid and Non-Assessable Shares of common stock of Fortress Shares of
the WORLD UTILITY FUND portfolio of WORLD INVESTMENT SERIES INC., hereafter
called the Corporation, transferable on the books of the Corporation by the
owner in person or by duly authorized attorney upon surrender of this
certificate properly endorsed.
The shares represented hereby are issued and shall be held subject to
the provisions of the Articles of Incorporation and By-Laws of the
Corporation and all amendments thereto, all of which the holder by
acceptance hereof assents.
This Certificate is not valid unless countersigned by the Transfer
Agent.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed in its name by its proper officers and to be sealed with its seal.
Dated: WORLD INVESTMENT SERIES INC.
Corporate Seal
1994
Maryland
/s/ Edward C. Gonzales
/s/ John F. Donahue
Vice President and Treasurer
Chairman
Countersigned: Federated Services
Company (Boston)
Transfer Agent
By:
Authorized Signature
The following abbreviations, when used in the inscription on the face of
this Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations;
TEN COM - as tenants in common UNIF GIFT MIN ACT-...Custodian...
TEN ENT - as tenants by the entireties (Cust) (Minors)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act.............................
in common (State)
Additional abbreviations may also be used though not in the above list.
For value received__________ hereby sell, assign, and transfer unto
Please insert social security or other
identifying number of assignee
______________________________________
_____________________________________________________________________________
(Please print or typewrite name and address, including zip code, of
assignee)
_____________________________________________________________________________
_____________________________________________________________________________
______________________________________________________________________
shares
of common stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
__________________________________________
_____________________________________________________________________________
to transfer the said shares on the books of the within named Corporation
with full power of substitution in the premises.
Dated______________________
NOTICE:______________________________
The signature to this assignment must
correspond with the name as written upon
the face of the certificate in every
particular, without alteration or
enlargement or any change whatever.
THIS SPACE MUST NOT BE COVERED IN ANY WAY
DOCUMENT DESCRIPTION - SPECIMEN STOCK CERTIFICATE
Page One
A. The Certificate is outlined by an ______ one-half inch border.
B. The number in the upper left-hand corner and the number of shares in
the upper right-hand corner are outlined by octagonal boxes.
C. The cusip number in the middle right-hand area of the page is boxed.
D. The Maryland corporate seal appears in the bottom middle of the page.
Page Two
The social security or other identifying number of the assignee
appears in a box in the top-third upper-left area of the page.
Exhibit 13 Under Form N-1A
Exhibit 99 Under Item 601/Reg. S-K
FEDERATED ADMINISTRATIVE SERVICES
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
(412) 288-1900
March 17, 1994
World Investment Series, Inc.
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Gentlemen:
Federated Administrative Services agrees to purchase 10,000 shares
of World Utility Fund-- Class A Shares (a portfolio of World Investment
Series, Inc.) at the cost of $10.00 each. These shares are purchased
for investment purposes and Federated Administrative Services has no
present intention of redeeming those shares.
Very Truly Yours,
/s/Byron F. Bowman
Byron F. Bowman
Vice President
