1933 Act File No.
1940 Act File No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No. .
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No.
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 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);
Redemption Fee (a,b); Exchanges for
Shares of Other Funds (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); 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 ______, 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 ______, 1994
TABLE OF CONTENTS
SUMMARY OF FUND EXPENSES
GENERAL INFORMATION
LIBERTY FAMILY OF FUNDS
INVESTMENT INFORMATION
Investment Objective
Investment Policies
Investment Considerations
Considerations of Utility Securities
Electric
Telecommunications
Gas
Water
Exchange Rates
Foreign Companies
U.S. Government Policies
Other Investment Practices
Foreign Currency Transactions
Forward Foreign Currency Exchange Contracts
Repurchase Agreements
Lending of Portfolio Securities
Restricted and Illiquid Securities
When-Issued and Delayed Delivery Transactions
Covered Call Options
Investment Limitations
NET ASSET VALUE
INVESTING IN CLASS A SHARES
Share Purchases
Through a Financial Institution
Directly from the Distributor
Directly by Wire
Minimum Investment Required
What Shares Cost
Dealer Concession
Reducing the Sales Charge
Quantity Discounts and Accumulated Purchases
Letter of Intent
Reinvestment Privilege
Purchases with Proceeds from Redemptions
of Unaffiliated Mutual Fund Shares
Concurrent Purchases
Systematic Investment Program
Exchanging Securities for Fund Shares
Certificates and Confirmations
Dividends and Distributions
Retirement Plans
EXCHANGE PRIVILEGE
Reduced Sales Charge
Requirements for Exchange
Tax Consequences
Making an Exchange
Telephone Instructions
REDEEMING CLASS A SHARES
Through a Financial Institution
Directly from the Fund
By Telephone
By Mail
Signatures
Contingent Deferred Sales Charge
Systematic Withdrawal Program
Accounts with Low Balances
WORLD INVESTMENT SERIES, INC. INFORMATION
Management of the Corporation
Board of Directors
Officers and Directors
Investment Adviser
Advisory Fees
Adviser's Background
Distribution of Class A Shares
Other Payments to Financial Institutions
Administration of the Fund
Administrative Services
Shareholder Services Plan
Custodian
Transfer Agent and Dividend Disbursing Agent
Legal Counsel
Independent Auditors
Brokerage Transactions
Expenses of the Fund and Class A Shares
SHAREHOLDER INFORMATION
Voting Rights
TAX INFORMATION
Federal Income Tax
Pennsylvania Corporate and
Personal Property Taxes
OTHER CLASSES OF SHARES
PERFORMANCE INFORMATION
ADDRESSES
Inside Back Cover
SUMMARY OF FUND EXPENSES
CLASS A SHARES
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)........................... ___%
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price)............................ None
Deferred Sales Load (as a percentage of original
purchase price or redemption proceeds as applicable) (1)... ___%
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) ........................ __%
12b-1 Fees..................................................... None
Total Other
Expenses...................................................... ____%
Shareholder Servicing Fees .......................... ____%
Total Class A Shares Operating Expenses (2).......... ____%
(1) Applies only to Class A Shares purchased with proceeds from redemptions
of unaffiliated mutual funds shares which are redeemed within one year of
purchase. For a more complete description see "Redeeming Class A Shares."
(2) The Annual Class A Shares Operating Expenses are estimated to be ___%
for the fiscal year ended May 31, 1994. The Annual Class A Shares
operating expenses in the table above reflect an anticipated reduction in
the voluntary waiver of the investment advisory fee for the fiscal year
ended May 31, 1994. The total Class A Shares Operating Expenses are
anticipated to be ____%.
* EXPENSES IN THIS TABLE ARE ESTIMATED BASED ON AVERAGE EXPENSES
EXPECTED TO BE INCURRED DURING THE FISCAL YEAR ENDING MAY 31, 1994.
DURING THE COURSE OF THIS PERIOD, EXPENSES MAY BE MORE OR LESS THAN THE
AVERAGE AMOUNT SHOWN.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF CLASS A SHARES 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.
EXAMPLE 1 year 3 years
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...... $____ $____
EXAMPLE 1 year 3 years
You would pay the
following expenses on
the same investment,
assuming no sales load
when purchasing shares
of the Fund 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.. $____ $____
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The information set forth in the foregoing table and example relates only to
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
12b-1 fee and certain contingent deferred sales charges. 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 either 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, or (iii) the subordinated
debt of issuers whose senior debt obligations are deemed to be investment
grade 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.) Bonds rated "BBB" by either
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 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, the Fund may invest in short-term money
market instruments including 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 consideration: 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 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.
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 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'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.
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 FROM THE DISTRIBUTOR. 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.
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 $50, 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:
SALES CHARGE SALES CHARGE
AS A AS A
PERCENTAGE PERCENTAGE
OF PUBLIC OF NET
OFFERING AMOUNT
AMOUNT OF TRANSACTION PRICE INVESTED
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%
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 in the 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 Fun 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.
Position with Principal Occupation
Name and Address the Corporation During Past Five Years
John F. Donahue@* Chairman and Chairman and Trustee, Federated
Federated Investors Director Investors; Chairman and Trustee,
Tower Federated Advisers, Federated
Pittsburgh, PA Management, and Federated
Research; Director, AEtna Life
and Casualty Company; Chief
Executive Officer and Director,
Trustee, or Managing General
Partner of the Funds; formerly,
Director, The Standard Fire
Insurance Company. Mr. Donahue
is the father of J. Christopher
Donahue, Vice-President
of the Corporation.
John T. Conroy, Jr. Director President, Investment Properties
Corporation; Senior Vice-President,
John R. Wood and Associates, Inc.,
Wood/IPC Commercial Realtors; President, Northgate
Village
Department Development Corporation; General
and John R. Wood Partner or
Trustee in private real
Associates, Inc., Realtors estate ventures in Southwest Florida;
3255 Tamiami Trail North Director, Trustee, or Managing
Naples, FL General Partner of the Funds;
formerly, President, Naples
Property Management, Inc.
William J. Copeland Director Director and Member of the
One PNC Plaza -- 23rd Floor Executive Committee, Michael
Pittsburgh, PA Baker, Inc.; Director, Trustee,
or Managing General Partner of
the Funds; formerly, Vice
Chairman and Director,
PNC Bank, N.A. and
PNC Financial Corp and Director,
Ryan Homes, Inc.
James E. Dowd Director Attorney-at-law; Director, The
571 Hayward Mill Road Emerging Germany Fund, Inc.;
Concord, MA Director, Trustee, or Managing
General Partner of the Funds;
formerly, Director, Blue Cross
of Massachusetts, Inc.
Position with Principal Occupation
Name and Address the Corporation During Past Five Years
Lawrence D. Ellis, M.D. Director Hematologist, Oncologist,
and
3471 Fifth Avenue Internist, Presbyterian and
Suite 1111 Montefiore Hospitals; Clinical
Pittsburgh, PA Professor of Medicine and Trustee
University of Pittsburgh; Director
Trustee, or Managing General
Partner of the Funds.
Edward L. Flaherty, Jr.@ Director Attorney-at-law; Partner,
Meyer
5916 Penn Mall and Flaherty; Director, Eat'N
Pittsburgh, PA Park Restaurants, Inc., and
Statewide Settlement Agency,
Inc.; Director, Trustee, or
Managing General Partner of
the Funds; formerly, Counsel,
Horizon Financial, F.A.,
Western Region.
Peter E. Madden Director Consultant; State Represen-
225 Franklin Street tative, Commonwealth of
Boston, MA Massachusetts; Director,
Trustee, or
Managing General Partner of the
Funds; formerly, President,
State Street Bank and
Trust Company and State
Street Boston
and Trustee,
Lahey Clinic Foundation, Inc.
Gregor F. Meyer Director Attorney-at-law; Partner,
5916 Penn Mall Meyer and Flaherty; Chairman,
Pittsburgh, PA Meritcare, Inc.; Director,
Trustee, or Managing General
Partner of the Funds; formerly,
Vice Chairman, Horizon Financial,
F.A.
Position with Principal Occupation
Name and Address the Corporation During Past Five Years
Wesley W. Posvar Director Professor, Foreign Policy and
1202 Cathedral of Management Consultant; Trustee,
Learning Carnegie Endowment for
University of Pittsburgh International Peace, RAND
Pittsburgh, PA Corporation, Online Computer Library
Center, Inc., and U.S. Space
Foundation; Chairman, National Advisory
Council
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.
Marjorie P. Smuts Director Public relations/marketing
4905 Bayard Street consultant; Director, Trustee,
Pittsburgh, PA or Managing General Partner of
the Funds.
Richard B. Fisher President Executive Vice President and
Federated Investors and Director Trustee, Federated Investors;
Tower Chairman and Director,
Pittsburgh, PA Federated Securities Corp.;
President or Vice President of
the Funds; Director or Trustee
of some of the Funds.
J. Christopher Donahue Vice President President and Trustee, Federated
Federated Investors Tower Investors; Trustee, Federated
Pittsburgh, PA Advisers, Federated Management and
Federated Research;
President and Director,
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
Federated Investors and Treasurer Trustee, Federated Investors;
Tower Vice President and Treasurer,
Pittsburgh, PA Federated Advisers, Federated
Management, and Federated
Research; Executive Vice
President, Treasurer, and
Director, Federated Securities
Corp.; Chairman, Treasurer, and
Director, Federated Administrative
Services, Inc. Trustee or Director
of some of the Funds; Vice President
and Treasurer of the Funds.
John W. McGonigle Vice President Vice President, Secretary,
Federated Investors and Secretary General Counsel, and Trustee,
Tower Federated Investors; Vice
Pittsburgh, PA President, Secretary, and
Trustee, Federated Advisers,
Federated Management, and
Federated Research; Executive Vice
President, Secretary, and Director,
Federated Administrative Services,
Inc.; 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 Federated Investors; Executive
Tower Vice President, Federated Securities
Pittsburgh, PA Corp.; President and Trustee,
Federated Advisers, Federated
Management, and Federated Research;
Vice President of the Funds,
Director, Trustee, or Managing
General Partner of the Funds;
formerly, Vice President, The
Standard Fire Insurance Company and
President of its Federated Research
Division.
* 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 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, which is a
subsidiary of Federated Investors, provides the Fund with the
administrative personnel and services necessary to operate the Fund. Such
services include shareholder servicing and certain legal and accounting
services. Federated Administrative Services will provide these services
at approximate cost.
SHAREHOLDER SERVICES PLAN
The Fund has adopted a Shareholder Services Plan (the "Service Plan") with
respect to Shares. Under the Service Plan, financial institutions will
enter into shareholder service agreements with the Fund to provide
administrative support services to their customers who from time to time
may be owners of record or beneficial owners of Shares. In return for
providing these support services, a financial institution may receive
payments from the Fund at a rate not exceeding .25% of the average daily
net assets of the Shares beneficially owned by the financial institution's
customers for whom it is holder of record or with whom it has a servicing
relationship. These administrative services may include, but are not
limited to, the following functions: providing office space, equipment,
telephone facilities, and various personnel including clerical,
supervisory, and computer as necessary or beneficial to establish and
maintain shareholder accounts and records; processing purchase and
redemption transactions and automatic investments of client account cash
balances; answering routine client inquiries regarding the Fund; assisting
clients in changing dividend options, account designations and addresses;
and providing such other services as the Fund reasonably requests.
In addition to receiving payments under the Service Plan, financial
institutions may be compensated by the distributor, or affiliates thereof,
for providing administrative support services to holders of Shares. These
payments will be made directly by the distributor and will not be made
from the assets of the Fund.
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 shares of the Fund 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 select 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 Fund's Shareholder Services 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 Fund's Shareholder Services 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
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.
ADDRESSES
- ---------------------------------------------------------------------------
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
- ---------------------------------------------------------------------------
WORLD UTILITY FUND
CLASS A SHARES
PROSPECTUS
A Diversified Portfolio of World Investment Series, Inc.,
An Open-End, Management Investment Company
_______, 1994
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
_________ (1/94)
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 ______, 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 ______, 1994
TABLE OF CONTENTS
SUMMARY OF FUND EXPENSES
GENERAL INFORMATION
FORTRESS INVESTMENT PROGRAM
INVESTMENT INFORMATION
Investment Objective
Investment Policies
Investment Considerations
Considerations of Utility Securities
Electric
Telecommunications
Gas
Water
Exchange Rates
Foreign Companies
U.S. Government Policies
Other Investment Practices
Foreign Currency Transactions
Forward Foreign Currency Exchange Contracts
Repurchase Agreements
Lending of Portfolio Securities
Restricted and Illiquid Securities
When-Issued and Delayed Delivery Transactions
Covered Call Options
Investment Limitations
NET ASSET VALUE
INVESTING IN FORTRESS SHARES
Share Purchases
Through a Financial Institution
Directly by Mail
Directly By Wire
Minimum Investment Required
What Shares Cost
Dealer Concession
Eliminating the Sales Charge
Quantity Discounts and Accumulated Purchases
Letter of Intent
Reinvestment Privilege
Concurrent Purchases
Systematic Investment Program
Exchanging Securities for Fund Shares
Exchange Privileges
Exchanges for Shares of Other Funds
Certificates and Confirmations
Dividends and Distributions
REDEEMING FORTRESS SHARES
Through a Financial Institution
Directly By Mail
Signatures
Receiving Payment
Contingent Deferred Sales Charge
Systematic Withdrawal Program
Accounts with Low Balances
WORLD INVESTMENT SERIES, INC. INFORMATION
Management of the Corporation
Board of Directors
Officers and Directors
Investment Adviser
Advisory Fees
Adviser's Background
Distribution of Fortress Shares
Distribution Plan
Other Payments to Financial Institutions
Administration of the Fund
Administrative Services
Shareholder Services Plan
Additional Payments to Dealers
Custodian
Transfer Agent and Dividend Disbursing Agent
Legal Counsel
Independent Auditors
Brokerage Transactions
Expenses of the Fund and Fortress Shares
SHAREHOLDER INFORMATION
Voting Rights
TAX INFORMATION
Federal Income Tax
Pennsylvania Corporate and
Personal Property Taxes
OTHER CLASSES OF SHARES
PERFORMANCE INFORMATION
ADDRESSES
Inside Back Cover
SUMMARY OF FUND EXPENSES
FORTRESS SHARES
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)................................ __%
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price)............................ None
Deferred Sales Load (as a percentage of original
purchase price or redemption proceeds as applicable) (1)... ___%
Redemption Fees (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) ................................... __%
12b-1 Fees........................................................ ___%
Total Other
Expenses.................................................... ____%
Shareholder Servicing Fees
............................................... ____%
Total Fortress Shares Operating Expenses (2).......... ____%
(1) Applies to Fortress Shares ___________________. For a more complete
description see "Redeeming Fortress Shares."
(2) The Annual Fortress Shares Operating Expenses are estimated to be ___%
for the fiscal year ended May 31, 1994. The Annual Fortress Shares
operating expenses in the table above reflect an anticipated reduction in
the voluntary waiver of the investment advisory fee for the fiscal year
ended May 31, 1994. The total Class A Shares Operating Expenses are
anticipated to be ____%.
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.
* EXPENSES IN THIS TABLE ARE ESTIMATED BASED ON AVERAGE EXPENSES
EXPECTED TO BE INCURRED DURING THE FISCAL YEAR ENDING MAY 31, 1994.
DURING THE COURSE OF THIS PERIOD, EXPENSES MAY BE MORE OR LESS THAN THE
AVERAGE AMOUNT SHOWN.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF FORTRESS SHARES 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.
EXAMPLE 1 year 3 years
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...... $____ $____
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The information set forth in the foregoing table and example relates only to
Fortress Shares of the Fund. The Fund also offers another class of shares
called Class A Shares. Class A Shares and Fortress Shares are subject to
certain of the same expenses; however, Class A Shares are not subject to a
12b-1 fee and may be subject to a contingent deferred sales charge. 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 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
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
capital appreciation primarily through equity and debt securities of
utility companies;
Liberty Equity Income Fund, Inc. (Fortress Shares only), an equity fund
investing primarily in stocks which have a history of regular dividends;
Government Income Securities, Inc., providing current income through
long-term U.S. government securities;
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 either 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, or (iii) the subordinated
debt of issuers whose senior debt obligations are deemed to be investment
grade 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.) Bonds rated "BBB" by either
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 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, the Fund may invest in short-term money
market instruments including 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 consideration: 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 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.
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 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'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.
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.
DIRECTLY BY WIRE. To purchase Shares from Federated Securities Corp. by
Federal Reserve 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.
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 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.
EXCHANGE PRIVILEGES
Shares in other Fortress Funds may be exchanged for Shares at net asset
value without a sales charge (if previously paid) or a contingent deferred
sales charge. The exchange privilege is available to shareholders
residing in any state in which the shares being acquired may be legally
sold.
Share in certain Federated Funds which are advised by subsidiaries or
affiliates of Federated Investors may also be exchanged for Shares at net
asset value (plus a sales charge, if applicable). Shareholders using this
privilege must exchange Shares having a net asset value of at least
$1,500. Shareholders who desire to automatically exchange Shares of a
predetermined amount on a monthly, quarterly, or annual basis may take
advantage of a systematic exchange privilege. Further information on
these exchange privileges is available by calling Federated Securities
Corp. or the shareholder's financial institution.
Before making an exchange, a shareholder must receive a prospectus of the
fund for which the exchange is being made.
EXCHANGES FOR SHARES OF OTHER FUNDS
Shares may be exchanged for share in other Fortress Funds at net asset
value without a contingent deferred sales charge or a 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 as 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
onto 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:
Amount of Purchase Shares Held Contingent
Deferred Sales Charge
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 years .25%
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.
Position with Principal Occupation
Name and Address the Corporation During Past Five Years
John F. Donahue@* Chairman and Chairman and Trustee, Federated
Federated Investors Director Investors; Chairman and Trustee,
Tower Federated Advisers, Federated
Pittsburgh, PA Management, and Federated
Research; Director, AEtna Life
and Casualty Company; Chief
Executive Officer and Director,
Trustee, or Managing General
Partner of the Funds; formerly,
Director, The Standard Fire
Insurance Company. Mr. Donahue
is the father of J. Christopher
Donahue, Vice-President
of the Corporation.
John T. Conroy, Jr. Director President, Investment Properties
Corporation; Senior Vice-President,
John R. Wood and Associates, Inc.,
Wood/IPC Commercial Realtors; President, Northgate
Department and Village Development Corporation;
General John Wood Partner or
Trustee in
private real estate
Associates, Inc., Realtors ventures
in Southwest Florida;
3255 Tamiami Trail North Director, Trustee, or Managing
Naples, FL General Partner of the
Funds; formerly, President,
Naples Property Management, Inc.
William J. Copeland Director Director and Member of the
One PNC Plaza -- 23rd Floor Executive Committee, Michael
Pittsburgh, PA Baker, Inc.; Director, Trustee,
or Managing General Partner of
the Funds; formerly, Vice
Chairman and Director, PNC Bank,
N.A. and PNC
Financial Corp and Director,
Ryan Homes, Inc.
James E. Dowd Director Attorney-at-law; Director, The
571 Hayward Mill Road Emerging Germany Fund, Inc.;
Concord, MA Director, Trustee, or Managing
General Partner of the Funds;
formerly, Director, Blue Cross
of Massachusetts, Inc.
Position with Principal Occupation
Name and Address the Corporation During Past Five Years
Lawrence D. Ellis, M.D. Director Hematologist, Oncologist,
and
3471 Fifth Avenue Internist, Presbyterian and
Suite 1111 Montefiore Hospitals; Clinical
Pittsburgh, PA Professor of Medicine and Trustee
University of Pittsburgh; Director
Trustee, or Managing General
Partner of the Funds.
Edward L. Flaherty, Jr.@ Director Attorney-at-law; Partner,
Meyer
5916 Penn Mall and Flaherty; Director, Eat'N
Pittsburgh, PA Park Restaurants, Inc., and
Statewide Settlement Agency,
Inc.; Director, Trustee, or
Managing General Partner of
the Funds; formerly, Counsel,
Horizon Financial, F.A.,
Western Region.
Peter E. Madden Director Consultant; State Represen-
225 Franklin Street tative, Commonwealth of
Boston, MA Massachusetts; Director, Trustee, or
Managing General Partner of the
Funds;
formerly, President, State
Street Bank and Trust Company
and State Street Boston Corporation
and Trustee, Lahey Clinic Foundation,
Inc.
Gregor F. Meyer Director Attorney-at-law; Partner,
5916 Penn Mall Meyer and Flaherty; Chairman,
Pittsburgh, PA Meritcare, Inc.; Director,
Trustee, or Managing General
Partner of the Funds; formerly,
Vice Chairman, Horizon Financial,
F.A.
Wesley W. Posvar Director Professor, Foreign Policy and
1202 Cathedral of Management Consultant; Trustee,
Learning Carnegie Endowment for
University of Pittsburgh International Peace, RAND
Pittsburgh, PA Corporation, Online Computer Library
Center, Inc., and U.S. Space
Foundation; Chairman, National Advisory
Council
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.
Marjorie P. Smuts Director Public relations/marketing
4905 Bayard Street consultant; Director, Trustee,
Pittsburgh, PA or Managing General Partner of
the Funds.
Richard B. Fisher President Executive Vice President and
Federated Investors and Director Trustee, Federated Investors;
Tower Chairman and Director,
Pittsburgh, PA Federated Securities Corp.;
President or Vice President of
the Funds; Director or Trustee
of some of the Funds.
J. Christopher Donahue Vice President President and Trustee, Federated
Federated Investors Tower Investors; Trustee, Federated
Pittsburgh, PA Advisers, Federated Management and
Federated Research; President and
Director, Federated Administrative
Services;
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
Federated Investors and Treasurer Trustee, Federated Investors;
Tower Vice President and Treasurer,
Pittsburgh, PA Federated Advisers, Federated
Management, and Federated
Research; Executive Vice
President, Treasurer, and
Director, Federated Securities
Corp.; Chairman, Treasurer, and
Director, Federated Administrative
Services, Inc. Trustee or Director
of some of the Funds; Vice President
and Treasurer of the Funds.
John W. McGonigle Vice President Vice President, Secretary,
Federated Investors and Secretary General Counsel, and Trustee,
Tower Federated Investors; Vice
Pittsburgh, PA President, Secretary, and
Trustee, Federated Advisers,
Federated Management, and
Federated Research; Executive Vice
President, Secretary, and Director,
Federated Administrative Services,
Inc.; 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 Federated Investors; Executive
Tower Vice President, Federated Securities
Pittsburgh, PA Corp.; President and Trustee,
Federated Advisers, Federated
Management, and Federated Research;
Vice President of the Funds,
Director, Trustee, or Managing
General Partner of the Funds;
formerly, Vice President, The
Standard Fire Insurance Company and
President of its Federated Research
Division.
* 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 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 PLAN. Pursuant to the provisions of a distribution plan adopted
in accordance with the Investment Company Act Rule 12b-1 (the "Plan"), the Fund
will pay to the distributor an amount computed at an annual rate of .25 of 1%
of the average daily net assets of Shares to finance any activity which is
principally intended to result in the sale of Share subject to the Plan.
The distributor may from time to time and for such periods as it deems
appropriate, voluntarily reduce its compensation under the Plan to the extent
the expenses attributable to Shares exceed such lower expense limitation as the
distributor may, by notice to the Corporation, voluntarily declare to be
effective.
The distributor may select financial institutions such as banks, fiduciaries,
custodians for public funds, investment advisers, and broker/dealer ("brokers")
to provide sales and/or administrative services as agents for their clients or
customers who beneficially own Shares. Administrative services may include,
but are not limited to, the following functions: 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 cash balances; answering
routine client inquiries regarding Shares; assisting clients in changing
dividend options, account designations, and addresses; and providing such other
services as the Fund reasonably requests for Shares.
Financial institutions will receive fees from the distributor 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
distributor.
The Fund's Plan is a compensation type plan. As such, the Fund makes no
payments to the distributor except as described above. Therefore, the Fund
does not pay for unreimbursed expenses of the distributor, including amounts
expended by the distributor in excess of amounts received by it from the Fund,
interest, carrying or other financing charges in connection with excess amounts
expended, or the distributor's overhead expenses. However, the distributor may
be able to recover such amounts or may earn a profit from future payments made
by the Fund under the Plan.
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, which is a
subsidiary of Federated Investors, provides the Fund with the
administrative personnel and services necessary to operate the Fund. Such
services include shareholder servicing and certain legal and accounting
services. Federated Administrative Services will provide these services
at approximate cost.
SHAREHOLDER SERVICES PLAN
The Fund has adopted a Shareholder Services Plan (the "Service Plan") with
respect to Shares. Under the Service Plan, financial institutions will
enter into shareholder service agreements with the Fund to provide
administrative support services to their customers who from time to time
may be owners of record or beneficial owners of Shares. In return for
providing these support services, a financial institution may receive
payments from the Fund at a rate not exceeding .25% of the average daily
net assets of the Shares beneficially owned by the financial institution's
customers for whom it is holder of record or with whom it has a servicing
relationship. These administrative services may include, but are not
limited to, the following functions: providing office space, equipment,
telephone facilities, and various personnel including clerical,
supervisory, and computer as necessary or beneficial to establish and
maintain shareholder accounts and records; processing purchase and
redemption transactions and automatic investments of client account cash
balances; answering routine client inquiries regarding the Fund; assisting
clients in changing dividend options, account designations and addresses;
and providing such other services as the Fund reasonably requests.
In addition to receiving payments under the Service Plan, financial
institutions may be compensated by the distributor, or affiliates thereof,
for providing administrative support services to holders of Shares. These
payments will be made directly by the distributor and will not be made
from the assets of the Fund.
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 of the Fund 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 select 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 Fund's Shareholder Services 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 Fund's Shareholder
Services 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
- ---------------------------------------------------------------------------
World Utility Fund Federated Investors Tower
Fortress 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
- ----------------------------------------------------------------------------
WORLD UTILITY FUND
FORTRESS SHARES
PROSPECTUS
A Diversified Portfolio of World Investment Series, Inc.,
An Open-End, Management Investment Company
_______, 1994
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
_________ (1/94)
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 _______, 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 _______, 1994
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
TABLE OF CONTENTS
GENERAL INFORMATION ABOUT THE FUND
INVESTMENT OBJECTIVE AND POLICIES
Types of Investments
When-Issued and Delayed Delivery Transactions
Repurchase Agreements
Lending Portfolio Securities
Portfolio Turnover
Investment Limitations
THE FUNDS
INVESTMENT ADVISORY SERVICES
Adviser to the Fund
Advisory Fees
ADMINISTRATIVE SERVICES
BROKERAGE TRANSACTIONS
PURCHASING SHARES
Distribution of Shares
Distribution Plan (Fortress Shares Only)
Conversion to Federal Funds
Purchases by Sales Representatives,
Directors of the Corporation, and Employees
Exchanging Securities for Fund Shares
DETERMINING NET ASSET VALUE
Determining Market Value of Securities
Trading in Foreign Securities
EXCHANGE PRIVILEGE (Fortress Shares Only)
Reduced Sales Charge
Requirements for Exchange
Tax Consequences
Making an Exchange
REDEEMING SHARES
Redemption in Kind
TAX STATUS
The Fund's Tax Status
Shareholders' Tax Status
TOTAL RETURN
PERFORMANCE COMPARISONS
APPENDIX
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 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.
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.
The Fund does not intend to borrow money or pledge securities 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 investment advisory
fee.
This arrangement is not part of the advisory contract and may be
amended or rescinded in the future.
ADMINISTRATIVE SERVICES
Federated Administrative Services, a subsidiary of Federated Investors,
provides administrative personnel and services to the Fund and receives an
administrative fee as described in the prospectus.
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 PLAN (FORTRESS SHARES ONLY)
With respect to Fortress Shares of the Fund, the Fund has adopted a Plan
pursuant to Rule 12b-1 which was promulgated by the Securities and
Exchange commission under the Investment Company Act of 1940. The Plan
provides for payment of fees to Federated Securities Corp. to finance any
activity which is primarily intended to result in the sale of Fortress
Shares. Such activities may include the advertising and marketing of
Shares; preparing, printing, and distributing prospectuses and sales
literature to prospective shareholders, brokers, or administrators; and
implementing and operating the Plan. Pursuant to the Plan, the
distributor may pay fees to brokers for distribution and administrative
services and to administrators for administrative services as to Shares.
The administrative services are provided by a representative who has
knowledge of the shareholder's particular circumstances and goals, and
include, but are not limited to: communicating account openings;
communicating account closings; entering purchase transactions; entering
redemption transactions; providing or arranging to provide accounting
support for all transactions, wiring funds and receiving funds for Share
purchases and redemptions, confirming and reconciling all transactions;
reviewing the activity in Fund accounts, and providing training and
supervision of broker personnel; posting and reinvesting dividends to Fund
accounts or arranging for the service to be performed by the Fund's
transfer agent; and maintaining and distributing current copies of
prospectuses and shareholder reports to the beneficial owners of Shares
and prospective shareholders.
The Board of Directors expects that the adoption of the Plan will result
in the sale of a sufficient number of Shares so as to allow the Fund to
achieve economic viability. It is also anticipated that an increase in
the size of the Fund will facilitate more efficient portfolio management
and assist the Fund in seeking to achieve its investment objective.
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 convertible securities they already own for Shares,
or they may exchange a combination of convertible 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 $1,5000. 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.
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.
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.
PART C. OTHER INFORMATION.
Item 24. Financial Statements and Exhibits:
(a) Financial Statements (to be filed by amendment)
(b) Exhibits:
(1) Copy of Articles of Incorporation of the Registrant; +
(2) Copy of By-Laws of the Registrant; +
(3) Not applicable;
(4) Copy of Specimen Certificate for Shares of Capital Stock
of the Registrant; (to be filed by amendment)
(5) Copy of Investment Advisory Contract of the Registrant;
(to be filed by amendment)
(6) (i) Copy of Distributor's Contract of the
Registrant; (to be filed by amendment)
(ii) Copy of Administrative Agreement; (to be filed by
amendment)
(iii) Copy of Shareholder Services Agreement; (to be
filed by amendment)
(7) Not applicable;
(8) Copy of Custodian Agreement of the Registrant; (to be
filed by amendment)
(9) Copy of Transfer Agency and Service Agreement of the
Registrant; (to be filed by amendment)
(10) Copy of Opinion and Consent of Counsel as to
legality of shares being registered; (to be filed
by amendment)
(11) Copy of Consent of Independent (Public) Accountants;
(to be filed by amendment)
(12) Not applicable;
(13) Copy of Initial Capital Understanding; (to be
filed by amendment)
(14) Not applicable;
(15) (i) Copy of Distribution Plan; (to be filed
by amendment)
(ii) Copy of Dealer Agreement; (to be filed by
amendment)
(iii) Copy of 12b-1 Agreement; (to be filed by amendment)
(16) Schedule for Computation of Fund Performance
Data; (to be filed by amendment)
(17) Power of Attorney; +
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:
Indemnification is provided to Officers and Directors of the
Registrant pursuant to Section (f) of the Eighth paragraph of
Registrant's Articles of Incorporation. The Investment Advisory
Contract between the Registrant and Federated Management ("Adviser")
provides that, in the absence of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the obligations or duties under
the Investment Advisory Contract on the part of Adviser, Adviser shall
not be liable to the Registrant 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. Registrant's Directors and Officers
are covered by an Investment Trust Errors and Omissions Policy.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to Directors, Officers, and
controlling persons of the Registrant by the Registrant pursuant to
the Articles of Incorporation or otherwise, the Registrant is aware
that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and,
therefore, is unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by Directors, Officers, or
controlling persons of the Registrant in connection with the
successful defense of any act, suit, or proceeding) is asserted by
such Directors, Officers, or controlling persons in connection with
the shares being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of
such issues.
Insofar as indemnification for liabilities may be permitted pursuant
to Section 17 of the Investment Company Act of 1940 for Directors,
Officers, and controlling persons of the Registrant by the Registrant
pursuant to the Articles of Incorporation or otherwise, the Registrant
is aware of the position of the Securities and Exchange Commission as
set forth in Investment Company Act Release No. IC-11330. Therefore,
the Registrant undertakes that in addition to complying with the
applicable provisions of the Articles of Incorporation or otherwise,
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 Directors who are not
interested persons of the Registrant 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 Registrant 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, Director, or
controlling person of the Registrant 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 Registrant
is insured against losses arising by reason of any lawful advances; or
(iii) a majority of a quorum of disinterested non-party 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.
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: Mark L. Mallon,
Executive Vice President; Henry J. Gailliot, Senior Vice
President-Economist; Peter R. Anderson, William D. Dawson, III,
J. Thomas Madden, Gary J. Madich, and J. Alan Minteer, Senior Vice
Presidents; 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, 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.; 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.
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
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
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:
All Accounts and records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and Rules 31a-1 through 31a-3 promulgated
thereunder are maintained at one of the following locations:
Registrant Federated Investors Tower
Pittsburgh, PA
Federated Services Company 15222-3779
("Transfer Agent, Dividend
Disbursing Agent, and
Portfolio Recordkeeper")
Federated Administrative Services
("Administrator")
Federated Management
("Advisor")
State Street Bank and P.O. Box 8604
Trust Company Boston, MA
("Custodian") 02266-8604
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.
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 4th day of February, 1994.
WORLD INVESTMENT SERIES, INC.
BY: /s/Bryon F. Bowman
Bryon F. Bowman, Assistant Secretary
Attorney in Fact for John F. Donahue
February 4, 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 February 4, 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 17 Under Form N-1A
Exhibit 24 Under Item 601/Reg. S-K
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints the Secretary and Assistant Secretary of World Investment Series,
Inc. and the Assistant General Counsel of Federated Investors, and each of
them, their true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for them and in their names, place and stead,
in any and all capacities, to sign any and all documents to be filed with the
Securities and Exchange Commission pursuant to the Securities Act of 1933,
the Securities Exchange Act of 1934 and the Investment Company Act of 1940,
by means of the Securities and Exchange Commission's electronic disclosure
system known as EDGAR; and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to sign and perform each and every act and
thing requisite and necessary to be done in connection therewith, as fully to
all intents and purposes as each of them might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any
of them, or their or his substitute or substitutes, may lawfully do or cause
to be done by virtue thereof.
SIGNATURE TITLE DATE
/s/John F. Donahue Chairman and Director February 2, 1994
John F. Donahue (Chief Executive Officer)
/s/Richard B. Fisher President and Director February 2, 1994
Richard B. Fisher
/s/Edward C. Gonzales Vice President and Treasurer February 2, 1994
Edward C. Gonzales (Principal Financial and
Accounting Officer)
/s/William J. Copeland Director February 2, 1994
William J. Copeland
/s/James E. Dowd Director February 2, 1994
James E. Dowd
/s/Lawrence D. Ellis, M.D. Director February 2, 1994
Lawrence D. Ellis, M.D.
/s/Edward L. Flaherty, Jr. Director February 2, 1994
Edward L. Flaherty, Jr.
/s/Gregor F. Meyer Director February 2, 1994
Gregor F. Meyer
SIGNATURE TITLE DATE
/s/Wesley W. Posvar Director February 2, 1994
Wesley W. Posvar
/s/Marjorie P. Smuts Director February 2, 1994
Marjorie P. Smuts
/s/Peter E. Madden Director February 2, 1994
Peter E. Madden
/s/John T. Conroy, Jr. Director February 2, 1994
John T. Conroy, Jr.
Sworn to and subscribed before me this 2nd day of February, 1994.
/s/Elaine T. Polens
Notary Public
Exhibit 1 Under Form N-1A
Exhibit 3(a) Under Item 601/Reg. S-K
ARTICLES OF INCORPORATION
OF
World Investment Series, Inc.
The undersigned, Byron F. Bowman, whose post office address is
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779, being at
least eighteen years of age, does under and by virtue of the General
Laws of the State of Maryland authorizing the formation of corporations,
hereby form a corporation.
FIRST: The name of the corporation is World Investment
Series, Inc. ("Corporation").
SECOND: The purpose for which the Corporation is formed is to
act as an open-end investment company of the management type registered
as such with the Securities and Exchange Commission pursuant to the
Investment Company Act of 1940, as amended (the "1940 Act") and to
exercise and generally to enjoy all of the powers, rights and privileges
granted to, or conferred upon, corporations by the Maryland General
Corporation Law now or hereafter in force.
THIRD: The post office address of the principal office and
the office of the resident agent of the Corporation in the State of
Maryland is c/o The Corporation Trust Incorporated, 32 South Street,
Baltimore, Maryland 21202. The resident agent of the Corporation in
the State of Maryland is THE CORPORATION TRUST INCORPORATED, which is a
corporation organized and existing under the laws of the State of
Maryland, the address of which is 32 South Street, Baltimore, Maryland
21202.
FOURTH: (a) The Corporation is authorized to issue three
billion (3,000,000,000) shares of common stock, par value $0.001 per
share. The aggregate par value of all shares which the Corporation is
authorized to issue is $3,000,000. Subject to the following paragraph,
the authorized shares are classified as 1,000,000,000 World Utility Fund
- Class A Shares, and 1,000,000,000 World Utility Fund - Fortress
Shares. The remaining 1,000,000,000 shares shall remain unclassified
until action is taken by the Board of Directors pursuant to the
following paragraph. Unless the context otherwise requires, as used in
the Charter of the Corporation, the term "class" shall include
portfolios, classes and series.
(b) The Board of Directors is authorized to classify
or to reclassify (i.e., into series and classes within series), from
time to time, any unissued shares of stock of the Corporation, whether
now or hereafter authorized, by setting, changing or eliminating the
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications or terms and conditions of
or rights to require redemption of the stock.
Unless otherwise provided by the Board of Directors prior to the
issuance of the stock, the shares of any and all classes of stock shall
be subject to the following:
(i) The Board of Directors may redesignate a
class of stock whether or not shares of such class are issued and
outstanding, provided that such redesignation does not affect the
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications or terms or conditions of
redemption of such class of stock.
(ii) The assets attributable to each class may be
invested in a common investment portfolio. The assets and liabilities
and the income and expenses of each class of the Corporation's stock
shall be determined separately and, accordingly, the net asset value of
shares of the Corporation's stock may vary from class to class. The
income or gain and the expense or liabilities of the Corporation shall
be allocated to each class of stock as determined by or under the
direction of the Board of Directors.
(iii) Shares of each class of stock shall be
entitled to such dividends or distributions, in stock or in cash or
both, as may be declared from time to time by the Board of Directors
with respect to such class. Dividends or distributions shall be paid on
shares of a class of stock only out of the assets belonging to that
class.
(iv) In the event of the liquidation or
dissolution of the Corporation, the stockholders of each class of the
Corporation's stock shall be entitled to receive, as a class, out of the
assets of the Corporation available for distribution to stockholders,
the assets belonging to that class less the liabilities allocated to
that class. The assets so distributable to the stockholders of a class
shall be distributed among such stockholders in proportion to the number
of shares of that class held by them and recorded on the books of the
Corporation. In the event that there are any assets available for
distribution that are not attributable to any particular class of stock,
such assets shall be allocated to all classes in proportion to the net
asset value of the respective classes.
(v) All holders of shares of stock shall vote as
a single class except as may be otherwise required by law pursuant to
the 1940 Act or any applicable order, rule or interpretation issued by
the Securities and Exchange Commission, or otherwise, and except with
respect to any matter which affects only one or more classes of stock,
in which case only the holders of shares of the classes affected shall
be entitled to vote.
(c) The Corporation may issue fractional shares. Any
fractional share shall carry proportionately all the rights of a whole
share, excepting any right to receive a certificate evidencing such
fractional share, but including, without limitation, the right to vote
and the right to receive dividends.
FIFTH: (a) The number of Directors of the Corporation shall
initially be eleven. The number may be changed by the By-Laws of the
Corporation or by the Board of Directors pursuant to the By-Laws.
(b) The name of the Directors who shall act until the
initial meeting of shareholders and until their successors are elected
and qualify, are:
John F. Donahue Edward L. Flaherty, Jr.
John T. Conroy, Jr. Peter E. Madden
William J. Copeland Gregor F. Meyer
James E. Dowd Wesley W. Posvar
Lawrence D. Ellis, M.D. Marjorie P. Smuts
Richard B. Fisher
SIXTH: (a) To the extent the Corporation has funds or
property legally available therefor, each shareholder shall have the
right at such times as may be permitted by the Corporation, but no less
frequently than as required under the 1940 Act, to require the
Corporation to redeem all or any part of its shares at a redemption
price equal to the net asset value per share next determined after the
shares are tendered for redemption, less any applicable redemption or
contingent deferred sales charges as determined by the Board of
Directors. The Board of Directors may adopt requirements and procedures
for redemption of shares.
Notwithstanding the foregoing, the Corporation may postpone
payment or deposit of the redemption price and may suspend the right of
the shareholders to require the Corporation to redeem shares of any
class pursuant to the applicable rules and regulations, or any order, of
the Securities and Exchange Commission.
(b) The Corporation shall have the right, exercisable
at the discretion of the Board of Directors, to redeem any shareholder's
shares of any class for their then current net asset value per share if
at such time the shareholder owns shares having an aggregate net asset
value of less than $500 or such greater amount for such class set forth
in the current registration statement of the Corporation filed with the
Securities and Exchange Commission, or regardless of the amount, if a
shareholder fails to supply a valid taxpayer identification number.
(c) Each share is subject to redemption by the
Corporation at the redemption price computed in the manner set forth in
subparagraph (a) of Article SIXTH of these Articles of Incorporation at
any time if the Board of Directors, in its sole discretion, determines
that failure to so redeem may result in the Corporation being classified
as a personal holding company as defined in the Internal Revenue Code,
as amended.
SEVENTH: The following provisions are hereby adopted for the
purpose of defining, limiting, and regulating the powers of the
Corporation and of the Directors and shareholders:
(a) No shareholder shall have any pre-emptive or
preferential right of subscription to any shares or securities of the
Corporation of any class whether now or hereafter authorized.
(b) The presence in person or by proxy of the holders
of one-third of the shares of stock of the Corporation entitled to vote
without regard to class shall constitute a quorum at any meeting of the
shareholders, except with respect to any matter which by law requires
the separate approval of one or more classes of stock, in which case the
presence in person or by proxy of the holders of one-third of the shares
of stock of each class entitled to vote separately on the matter shall
constitute a quorum.
(c) In addition to its other powers explicitly or
implicitly granted under these Articles of Incorporation, by law or
otherwise, the Board of Directors of the Corporation (i) is expressly
authorized to make, alter, amend or repeal the By-Laws of the
Corporation, (ii) may from time to time determine whether, to what
extent, at what times and places, and under what conditions and
regulations the accounts and books of the Corporation, or any of them,
shall be open to the inspection of the shareholders, and no shareholder
shall have any right to inspect any account, book or document of the
Corporation except as conferred by statute or as authorized by the Board
of Directors of the Corporation, (iii) is empowered to authorize,
without shareholder approval, the issuance and sale from time to time of
shares of stock of the Corporation whether now or hereafter authorized
on such terms for such consideration as the Board of Directors may
determine,, and (iv) is authorized to adopt procedures for determination
of and, to the extent deemed desirable by the Board of Directors, to
maintain constant the net asset value of shares of the Corporation's
stock.
(d) Notwithstanding any provision of the laws of the
State of Maryland requiring a greater proportion than a majority of the
votes of any or all classes of shares entitled to be cast to take or
authorize any action, the Corporation shall, except to the extent
otherwise required by the 1940 Act, take or authorize any such action
upon the concurrence of a majority of the aggregate number of the votes
entitled to be cast thereon.
(e) The Corporation reserves the right from time to
time to make any amendment of its Charter now or hereafter authorized by
law, including any amendment which alters the contract rights, as
expressly set forth in its Charter, of any outstanding shares or any
class.
(f) The Board of Directors is expressly authorized to
declare and pay dividends and distributions in cash, securities or other
property from surplus or any funds legally available therefor, at such
intervals (which may be as frequently as daily) or on such other
periodic basis, as it shall determine, for any class of stock of the
Corporation; to declare such dividends or distributions for any class of
stock of the Corporation by means of a formula or other method of
determination, at meetings held less frequently than the frequency of
the effectiveness of such declarations; to establish payment dates for
dividends or any other distributions for any class of stock of the
Corporation on any basis, including dates occurring less frequently than
the effectiveness of declarations thereof; and to provide for the
payment of declared dividends on a date earlier or later than the
specified payment date in the case of shareholders of such class of
stock redeeming their entire ownership of shares.
(g) Any determination made in good faith by or
pursuant to the direction of the Board of Directors as to the amount of
the assets, debts, obligations or liabilities of the Corporation, as to
the amount of any reserves or charges set up and the propriety thereof,
as to the time of or purpose for creating such reserves or charges, as
to the use, alteration or cancellation of any reserves or charges
(whether or not any debt, obligation or liability for which such
reserves or charges shall have been created shall have been paid or
discharged or shall be then or thereafter required to be paid or
discharged), as to the value of or the method of valuing any investment
or other asset owned or held by the Corporation, as to the number of
shares of any class of stock outstanding, as to the income of the
Corporation or as to any other matter relating to the determination of
net asset value, the declaration of dividends or the issue, sale,
redemption or other acquisition of shares of the Corporation, shall be
final and conclusive and shall be binding upon the Corporation and all
holders of its shares, past, present and future, and shares of the
Corporation are issued and sold on the condition and understanding that
any and all such determinations shall be binding as aforesaid.
EIGHTH: (a) To the fullest extent that limitations on the
liability of directors and officers are permitted by the Maryland
General Corporation Law, no director or officer of the Corporation shall
have any liability to the Corporation or its shareholders for damages.
This limitation on liability applies to events occurring at the time a
person serves as a director or officer of the Corporation whether or not
such person is a director or officer at the time of any proceeding in
which liability is asserted.
(b) The Corporation shall indemnify and advance
expenses to its currently acting and its former directors to the fullest
extent that indemnification of directors is permitted by the Maryland
General Corporation Law. The Corporation shall indemnify and advance
expenses to its officers to the same extent as its directors and may do
so to such further extent as is consistent with law. The Board of
Directors may by by-law, resolution or agreement make further provision
for indemnification of directors, officers, employees and agents to the
fullest extent permitted by the Maryland General Corporation Law.
(c) No provision of this Article shall be effective
to protect or purport to protect any director or officer of the
Corporation against any liability to the Corporation or its security
holders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the
duties involved in the conduct of his office.
(d) References to the Maryland General Corporation
Law in these Articles of Incorporation are to that law as from time to
time amended. No amendment to the Charter of the Corporation shall
affect any right of any person under this Article based on any event,
omission or proceeding prior to the amendment.
IN WITNESS WHEREOF, I have adopted and signed these Articles of
Incorporation and acknowledge them to be my act on the 25th day of
January, 1994.
/s/ Byron F. Bowman
Byron F. Bowman
Incorporator
Exhibit 2 under Form N-1A
Exhibit 3(b) under Item 601/Reg. S-K
WORLD INVESTMENT SERIES, INC.
BY-LAWS
ARTICLE I
MEETING OF SHAREHOLDERS
Section 1. ANNUAL MEETINGS. The Corporation is not required to
hold an annual meeting of shareholders in any year in which the election
of directors is not required to be acted upon under the Investment
Company Act of 1940, as amended.
Section 2. SPECIAL MEETINGS. Special Meetings of Shareholders of
the Company or of a particular Series or Class may be called by the
Chairman, the President or by the Board of Directors; and shall be
called by the Secretary whenever ordered by the Chairman, the Board of
Directors, or as requested in writing by Shareholders entitled to cast
at least 10% of the voter shares entitled to be cast at the meeting.
Such request shall state the purpose of such meeting and the matters
proposed to be acted on thereat, and no other business shall be
transacted at any such special meeting. The Secretary shall give not
less than ten nor more than 90 days' notice of the meeting. Unless
required by Shareholders entitled to cast a majority of all the votes
entitled to be cast at the meeting, a special meeting need not be called
to consider any matter which is substantially the same as a matter voted
on at any special meeting of the Shareholders held during the preceding
12 months.
Section 3. PLACE OF MEETINGS. All meetings of the Shareholders of
the Corporation or a particular Series or Class, shall be held at the
office of the Corporation in Pittsburgh, Pennsylvania, or at such other
place within or without the State of Maryland as may be fixed by the
Board of Directors.
Section 4. NOTICE. Not less than ten nor more than ninety days
before the date of every Annual or Special Meeting of Shareholders the
Secretary or an Assistant Secretary shall give to each Shareholder of
record of the Corporation or of the relevant Series or Class written
notice of such meeting. Such notice shall be deemed to have been given
when mailed to the Shareholder at his address appearing on the books of
the Corporation, which shall be maintained separately for the shares of
each Series or Class. It shall not be necessary to set forth the
business proposed to be transacted in the notice of any Annual Meeting
except as otherwise required by law. Notice of a Special Meeting shall
state the purpose or purposes for which it is called.
Section 5. QUORUM. The presence in person or by proxy of holders
of one-third of the shares of stock of the Corporation entitled to vote
without regard to class shall constitute a quorum at any meeting of the
shareholders, except with respect to any matter which by law requires
the separate approval of one or more classes of stock, in which case the
presence in person or by proxy of the holders of one-third of the shares
of stock of each class entitled to vote separately on the matter shall
constitute a quorum.
In the absence of a quorum at any meeting, a majority of those
Shareholders present in person or by proxy may adjourn the meeting from
time to time to a date not later than 120 days after the original record
date without further notice other than by announcement to be given at
the meeting until a quorum, as above defined, shall be present. Any
business may be transacted at the adjourned meeting which might have
been transacted at the meeting originally called had the same been held
at the time so called.
Section 6. ADJOURNED MEETINGS. A meeting of Shareholders convened
on the date for which it was called (including one adjourned to achieve
a quorum as above provided in Section 5 of this Article) may be
adjourned from time to time without futher notice to a date not more
than 120 days after the record date, and any business may be transacted
at the meeting as originally called.
Section 7. VOTING. At all meetings of Shareholders each
Shareholder shall be entitled to one vote or fraction thereof for each
Share or fraction thereof standing in his name on the books of the
Corporation on the date for the determination of Shareholders entitled
to vote at such meeting.
Section 8. PROXIES. Any Shareholder entitled to vote at any
meeting of Shareholders may vote either in person or by proxy, but no
proxy which is dated more than eleven months before the meeting named
therein shall be accepted. Every proxy shall be in writing and signed
by the Shareholder or his duly authorized attorney in fact and dated,
but need not be sealed, witnessed or acknowledged.
Section 9. ACTION BY UNANIMOUS WRITTEN CONSENT OF SHAREHOLDERS.
Any action required or permitted to be taken at any meeting of
Shareholders may be taken without a meeting, if a consent in writing,
setting forth such action, is signed by all the Shareholders entitled to
vote on the subject matter thereof, and any other Shareholders, entitled
to notice of a meeting of stockholders (but not to vote thereat), have
waived in writing any rights which they may have to dissent from such
action, and such consent and waiver are filed with the records of the
Corporation.
ARTICLE II
BOARD OF DIRECTORS
Section 1. POWERS. The business and affairs of the Corporation
shall be managed under the direction of its Board of Directors. All
powers of the Corporation may be exercised by or under the authority of
the Board of Directors except as conferred on or reserved to the
Shareholders by law, by the Charter or by these By-Laws.
Section 2. NUMBER, QUALIFICATIONS, MANNER OF ELECTION AND TERM OF
OFFICE. The number of Directors of the Corporation can be changed by a
majority of the entire Board of Directors from time to time to not less
than three or the number of Shareholders, whichever is less, nor more
than twenty. Directors need not be Shareholders. The term of office of
a Director shall not be affected by any decrease in the number of
Directors made by the Board pursuant to the foregoing authorization.
Each Director shall hold office until his resignation or removal and
until the election and qualification of his successor.
Section 3. PLACE OF MEETING. The Board of Directors may hold its
meetings at such place or places within or without the State of Maryland
as the Board or as the person or persons requesting said meeting to be
called may from time to time determine.
Section 4. ANNUAL MEETINGS. The Board of Directors shall meet
annually for the election of Officers and any other business.
Section 5. REGULAR MEETINGS. Regular meetings of the Board of
Directors shall be held at such intervals and on such dates as the Board
may from time to time designate, provided that any Director who is
absent when such designation is made shall be given notice of the
designation.
Section 6. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be held at such times and at such places as may be
designated at the call of such meeting. Special meetings shall be
called by the Secretary or any Assistant Secretary at the request of the
Chairman, the President, or any Director. If the Secretary or any
Assistant Secretary when so requested refuses or fails for more than
twenty-four hours to call such meeting, the Chairman, the President or
such Director may in the name of the Secretary call such meeting by
giving due notice in the manner required when notice is given by the
Secretary.
Section 7. NOTICE. The Secretary or any Assistant Secretary shall
give, at least two days before the meeting, notice of each meeting of
the Board of Directors, whether Annual, Regular or Special, to each
member of the Board by mail, telegram, telephone or electronic facsimile
to his last known address. It shall not be necessary to state the
purpose or business to be transacted in the notice of any meeting unless
otherwise required by law. Personal attendance at any meeting by a
Director other than to protest the validity of said meeting shall
constitute a waiver of the foregoing requirement of notice. In
addition, notice of a meeting need not be given if a written waiver of
notice executed by such Director before or after the Meeting is filed
with the records of the meeting.
Section 8. CONDUCT OF MEETINGS AND BUSINESS. The Board of
Directors may adopt such rules and regulations for the conduct of their
meetings and the management of the affairs of the Corporation as they
may deem proper and not inconsistent with applicable law, the Charter of
the Corporation or these By-Laws.
Section 9. QUORUM. One-third of the entire Board of Directors but
not less than two directors shall constitute a quorum at any meeting of
the Board of Directors unless there is only one director, in which case
that one shall constitute a quorum. The action of a majority of
Directors present at any meeting at which a quorum is present shall be
the action of the Board of Directors unless the concurrence of a greater
proportion is required for such action by statute, the Charter of the
Corporation, or these By-Laws. In the absence of a quorum at any
meeting a majority of Directors present may adjourn the meeting from day
to day or for such longer periods as they may designate until a quorum
shall be present. Notice of any adjourned meeting need not be given
other than by announcement at the meeting.
Section 10. RESIGNATIONS. Any Director of the Corporation may
resign at any time by written notice to the Chairman of the Board of
Directors or to the Secretary of the Corporation. The resignation of
any Director shall take effect at the time specified therein or, if no
time is specified, when received by the Corporation. Unless otherwise
specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
Section 11. REMOVAL. At any meeting of Shareholders duly called
for the purpose, any Director may by the vote of a majority of all of
the Shares entitled to vote be removed from office.
Section 12. VACANCIES. Except as otherwise provided by law, any
vacancy occurring in the Board of Directors for any cause other than by
reason of an increase in the number of Directors may be filled by a
majority of the remaining members of the Board of Directors although
such majority is less than a quorum and any vacancy occurring by reason
of an increase in the number of Directors may be filled by action of a
majority of the entire Board of Directors then in office.
Section 13. COMPENSATION OF DIRECTORS. The Directors may receive
compensation for their services as Directors as determined by the Board
of Directors and expenses of attendance at each Meeting. Nothing herein
contained shall be construed to preclude any Director from serving the
Corporation in any other capacity, as an Officer, Agent or otherwise,
and receiving compensation therefor.
Section 14. ACTION BY UNANIMOUS WRITTEN CONSENT OF DIRECTORS. Any
action required or permitted to be taken at any Annual, Regular or
Special Meeting of the Board of Directors may be taken without a meeting
if a written consent to such action is signed by all members of the
Board and such written consent is filed with the minutes of proceedings
of the Board.
Section 15. TELEPHONE CONFERENCE. Members of the Board of
Directors or any committee thereof may participate in a meeting of the
Board or such committee by means of a conference telephone or similar
communications equipment by means of which all persons participating in
the meeting can hear each other at the same time and participation by
such means shall constitute presence in person at the meeting.
ARTICLE III
EXECUTIVE AND OTHER COMMITTEES
Section 1. APPOINTMENT AND TERM OF OFFICE OF EXECUTIVE COMMITTEE.
The Board of Directors may appoint an Executive Committee, which shall
consist of two (2) or more Directors.
Section 2. VACANCIES IN EXECUTIVE COMMITTEE. Vacancies occurring
in the Executive Committee from any cause may be filled by the Board of
Directors.
Section 3. EXECUTIVE COMMITTEE TO REPORT TO BOARD. All action by
the Executive Committee shall be reported to the Board of Directors at
its Meeting next succeeding such action.
Section 4. PROCEDURE OF EXECUTIVE COMMITTEE. The Executive
Committee shall fix its own rules of procedure not inconsistent with
these By-Laws or with any directions of the Board of Directors. It
shall meet at such times and places and upon such notice as shall be
provided by such rules or by resolution of the Board of Directors. The
presence of a majority shall constitute a quorum for the transaction of
business, and in every case the affirmative vote of a majority of the
members of the Committee present shall be necessary for the taking of
any action.
Section 5. POWERS OF EXECUTIVE COMMITTEE. During the intervals
between the Meetings of the Board of Directors the Executive Committee,
except as limited by law or by specific directions of the Board of
Directors, shall possess and may exercise all the powers of the Board of
Directors in the management and direction of the business and conduct of
the affairs of the Corporation.
Section 6. OTHER COMMITTEES. From time to time the Board of
Directors may appoint any other Committee or Committees which shall have
such powers as shall be specified in the resolution of appointment and
may be delegated by law.
Section 7. COMPENSATION. The members of any duly appointed
Committee shall receive such compensation as from time to time may be
fixed by the Board of Directors and reimbursement of expenses.
Section 8. ACTION BY UNANIMOUS WRITTEN CONSENT OF EXECUTIVE
COMMITTEE OR OTHER COMMITTEES. Any action required or permitted to be
taken at any meeting of the Executive Committee or any other duly
appointed Committee may be taken without a meeting if written consent to
such action is signed by all Members of such Committee and such written
consent is filed with the minutes of the proceedings of such Committee.
Section 9. ADVISORY BOARD. The Directors may appoint an Advisory
Board to consist in the first instance of not less than three (3)
members. Members of such Advisory Board shall not be Directors or
Officers and need not be Shareholders. Members of the Advisory Board
shall hold office for such period as the Directors may by resolution
provide. Any Member of such Board may resign therefrom by written
instrument signed by him which shall take effect upon delivery to the
Directors. The Advisory Board shall have no legal powers and shall not
perform functions of Directors in any manner, said Board being intended
to act merely in an advisory capacity. Such Advisory Board shall meet
at such times and upon such notice as the Board of Directors may by
resolution provide. The compensation of the Members of the Advisory
Board, if any, shall be determined by the Board of Directors.
ARTICLE IV
OFFICERS
Section 1. GENERAL PROVISIONS. The Officers of the Corporation
shall be Chairman, a President, one or more Vice Presidents, a Treasurer
and a Secretary. The Board of Directors may elect or appoint other
Officers or agents, including one or more Assistant Vice Presidents, one
or more Assistant Secretaries and one or more Assistant Treasurers. The
same person may hold any two offices except those of President and Vice
President.
Section 2. ELECTION, TERM OF OFFICE AND QUALIFICATIONS. The
Officers shall be elected annually by the Board of Directors at its
Annual Meeting. Each Officer shall hold office for one year and until
the election and qualification of his successor. Any vacancy in any of
the offices may be filled for the unexpired portion of the term by the
Board of Directors at any Regular or Special Meeting of the Board. The
Board of Directors may elect or appoint additional Officers or agents at
any Regular or Special Meeting of the Board.
Section 3. REMOVAL. Any Officer elected by the Board of Directors
may be removed with or without cause at any time by the Board of
Directors. Any other employee of the Corporation may be removed or
dismissed at any time by the President.
Section 4. RESIGNATIONS. Any Officer may resign at any time by
giving written notice to the Board of Directors. Any such resignation
shall take effect at the time specified therein or, if no time is
specified, at the time of receipt. Unless otherwise specified therein,
the acceptance of such resignation shall not be necessary to make it
effective.
Section 5. VACANCIES. A vacancy in any Office because of death,
resignation, removal, disqualification or any other cause shall be
filled for the unexpired portion of the term in the manner prescribed in
these By-Laws for regular election or appointment to such Office.
Section 6. CHAIRMAN OF THE BOARD OF DIRECTORS. The Chairman of
the Board of Directors, if there be a Chairman, shall preside at the
meetings of Shareholders and of the Board of Directors. He shall
receive such information and reports as he may request from the Officers
of the Corporation. He shall counsel and advise the President on
matters of major importance.
Section 7. PRESIDENT. The President of the Corporation shall be
the chief executive officer of the Corporation. He shall, unless other
provisions are made therefor by the Board or Executive Committee, employ
and define the duties of all employees of the Corporation, shall have
the power to discharge any such employees, shall exercise general
supervision over the affairs of the Corporation and shall perform such
other duties as may be assigned to him from time to time by the Board of
Directors. In the absence of the Chairman of the Board of Directors,
the President or an officer or Director appointed by the President,
shall preside at all meetings of Shareholders.
Section 8. VICE PRESIDENT. The Vice President (or if more than
one, the senior Vice President) in the absence of the President shall
perform all duties and may exercise any of the powers of the President
subject to the control of the Board. Each Vice President shall perform
such other duties as may be assigned to him from time to time by the
Board of Directors, the Executive Committee, or the President.
Section 9. SECRETARY. The Secretary shall keep or cause to be
kept in books provided for the purpose the Minutes of the Meetings of
the Shareholders, and of the Board of Directors; shall see that all
Notices are duly given in accordance with the provisions of these
By-Laws and as required by Law; shall be custodian of the records of the
Corporation; shall keep directly or through a transfer agent a register
of the post office address of each Shareholder, and make all proper
changes in such register, retaining and filing his authority for such
entries; shall see that the books, reports, statements, certificates and
all other documents and records required by law are properly kept and
filed; and in general shall perform all duties incident to the Office of
Secretary and such other duties as may, from time to time, be assigned
to him by the Board of Directors, the Executive Committee, or the
President.
Section 10. TREASURER. The Treasurer shall have supervision of
the custody of all funds and securities of the Corporation, subject to
applicable law. He shall perform such other duties as may be from time
to time assigned to him by the Board of Directors, the Executive
Committee, or the President.
Section 11. ASSISTANT VICE PRESIDENT. The Assistant Vice
President or Vice Presidents of the Corporation shall have such
authority and perform such duties as may be assigned to them by the
Board of Directors, the Executive Committee, or the President of the
Corporation.
Section 12. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The
Assistant Secretary or Secretaries and the Assistant Treasurer or
Treasurers shall perform the duties of the Secretary and of the
Treasurer respectively, in the absence of those Officers and shall have
such further powers and perform such other duties as may be assigned to
them respectively by the Board of Directors or the Executive Committee
or by the President.
Section 13. SALARIES. The salaries of the Officers shall be fixed
from time to time by the Board of Directors. No Officer shall be
prevented from receiving such salary by reason of the fact that he is
also a Director of the Corporation.
ARTICLE V
SHARES AND THEIR TRANSFER
Section 1. CERTIFICATES. All share certificates shall be signed
by the Chairman, the President, or any Vice President and countersigned
by the Treasurer or Secretary or any Assistant Treasurer or Assistant
Secretary. The signatures may be either manual or facsimile signatures
and the seal may be either facsimile or any other form of Seal.
Certificates for shares for which the Corporation has appointed an
independent Transfer Agent and Registrar shall not be valid unless
countersigned by such Transfer Agent and registered by such Registrar.
In case any Officer who has signed any certificate ceases to be an
Officer of the Corporation before the certificate is issued, the
certificate may nevertheless be issued by the Corporation with the same
effect as if the Officer had not ceased to be such Officer as of the
date of its issuance. Share certificates shall be in such form not
inconsistent with law and these By-Laws as may be determined by the
Board of Directors.
Section 2. TRANSFER OF SHARES. Shares shall be transferable on
the books of the Corporation by the holder thereof in person or by duly
authorized attorney upon surrender of the certificate representing the
shares to be transferred properly endorsed.
Section 3. CLOSING OF TRANSFER BOOKS AND FIXING RECORD DATE. The
Board of Directors may fix in advance a date as the record date for the
purpose of determining Shareholders entitled to notice of or to vote at
any Meeting of Shareholders or Shareholders entitled to receive payment
of any dividend or be allotted any other rights. Subject to the
provisions of Article I, Sections 5 and 6, with respect to adjournments,
such date shall in any case not be more than 90 days and in case of a
Meeting of Shareholders not less than l0 days prior to the date on which
the particular action requiring such determination of Shareholders is to
be taken. Only Shareholders of record on the record date shall be
entitled to notice of and to vote at such meeting or to receive such
dividends or rights, as the case may be. In lieu of fixing a record
date the Board of Directors may provide that the share transfer books of
the Corporation shall be closed for a stated period not to exceed in any
case 20 days. If the share transfer books are closed for the purpose of
determining Shareholders entitled to notice of or to vote at a Meeting
of Shareholders such books shall be closed for at least l0 days
immediately preceding such meeting.
Section 4. LOST, DESTROYED OR MUTILATED CERTIFICATES. In case any
Share certificate is lost, mutilated or destroyed the Board of Directors
may issue a new certificate in place thereof upon indemnity to the
relevant Series or Class against loss and upon such other terms and
conditions as the Board may deem advisable.
Section 5. TRANSFER AGENT AND REGISTRAR: REGULATIONS. The Board
of Directors shall have power and authority to make all such rules and
regulations as they may deem expedient concerning the issuance, transfer
and registration of Share certificates and may appoint a Transfer Agent
and/or Registrar of Share certificates of each Series or Class, and may
require all such Share certificates to bear the signature of such
Transfer Agent and/or of such Registrar.
ARTICLE VI
AGREEMENTS, CHECKS, DRAFTS, ENDORSEMENTS, ETC.
Section 1. AGREEMENTS, ETC. The Board of Directors or the
Executive Committee may authorize any Officer or Officers, or Agent or
Agents of the Corporation to enter into any Agreement or execute and
deliver any instrument in the name of the Corporation and such authority
may be general or confined to specific instances; and, unless so
authorized by the Board of Directors or by the Executive Committee or by
these By-Laws, no Officer, Agent or Employee shall have any power or
authority to bind the Corporation by any Agreement or engagement or to
pledge its credit or to render it liable pecuniarily for any purpose or
to any amount.
Section 2. CHECKS, DRAFTS, ETC. All checks, drafts, or orders for
the payment of money, notes and other evidences of indebtedness shall be
signed by such Officer or Officers, Employee or Employees, or Agent or
Agents as shall be from time to time designated by the Board of
Directors or the Executive Committee, or as may be specified in or
pursuant to the agreement between the Corporation on behalf of any
Series or Class and the Bank or Trust Company appointed as custodian.
Section 3. ENDORSEMENTS, ASSIGNMENTS AND TRANSFER OF SECURITIES.
All endorsements, assignments, stock powers or other instruments of
transfer of securities standing in the name of the Corporation or its
nominee or directions for the transfer of securities belonging to the
Corporation shall be made by such Officer or Officers, Employee or
Employees, or Agent or Agents as may be authorized by the Board of
Directors or the Executive Committee.
ARTICLE VII
BOOKS AND RECORDS
Section 1. LOCATION. The books and records of the Corporation,
including the Stock ledger or ledgers, may be kept in or outside the
State of Maryland at such office or agency of the Corporation as may be
from time to time determined by the Board of Directors.
ARTICLE VIII
FISCAL YEAR
Section 1. FISCAL YEAR. The Fiscal Year of the Corporation shall
be designated from time to time by the Board of Directors.
ARTICLE IX
INDEMNIFICATION
Section 1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The
Corporation shall indemnify its directors to the fullest extent that
indemnification of directors is permitted by the Maryland General
Corporation Law. The Corporation shall indemnify its officers to the
same extent as its directors and to such further extent as is consistent
with law. The Corporation shall indemnify its directors and officers
who while serving as directors or officers also serve at the request of
the Corporation as a director, officer, partner, trustee, employee,
agent or fiduciary of another corporation, partnership, joint venture,
trust, other enterprise or employee benefit plan to the fullest extent
consistent with law. The indemnification and other rights provided by
this Article shall continue as to a person who has ceased to be a
director of officer and shall inure to the benefit of the heirs,
executors and administrators of such a person. This Article shall not
protect any such person against any liability to the Corporation or any
Shareholder thereof to which such person would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office
("disabling conduct").
Section 2. ADVANCES. Any current or former director or officer of
the Corporation seeking indemnification within the scope of this Article
shall be entitled to advances from the Corporation for payment of the
reasonable expenses incurred by him in connection with the matter as to
which he is seeking indemnification in the manner and to fullest extent
permissible under the Maryland General Corporation Law. The person
seeking indemnification shall provide to the Corporation a written
affirmation of his good faith belief that the standard of conduct
necessary for indemnification by the Corporation has been met and a
written undertaking to repay any such advance if it should ultimately be
determined that the standard of conduct has not been met. In addition,
at least one of the following additional conditions shall be met: (a)
the person seeking indemnification shall provide a security in form and
amount acceptable to the Corporation for his undertaking; (b) the
Corporation is insured against losses arising by reason of the advance,
or (c) a majority of a quorum of directors of the Corporation who are
neither 'interested persons' as defined in Section 2(a)(19) of the
Investment Company Act of 1940, as amended, nor parties to the
proceeding ("disinterested non-party directors"), or independent legal
counsel, in a written opinion, shall have determined, based on a review
of facts readily available to the Corporation at the time the advance is
proposed to be made, that there is reason to believe that the person
seeking indemnification will ultimately be found to be entitled to
indemnification.
Section 3. PROCEDURE. At the request of any person claiming
indemnification under this Article, the Board of Directors shall
determine, or cause to be determined, in a manner consistent with the
Maryland General Corporation Law, whether the standards required by this
Article have been met. Indemnification shall be made only following:
(a) a final decision on the merits by a court or other body before whom
the proceeding was brought that the person to be indemnified was not
liable by reason of disabling conduct or (b) in the absence of such a
decision, a reasonable determination, based upon a review of the facts,
that the person to be indemnified was not liable by reason of disabling
conduct by (i) the vote of a majority of a quorum of disinterested
non-party directors or (ii) an independent legal counsel in a written
opinion.
Section 4. INDEMNIFICATION OF EMPLOYEES AND AGENTS. Employees and
agents who are not officers or directors of the Corporation may be
indemnified, and reasonable expenses may be advanced to such employees
or agents, as may be provided by action of the Board of Directors or by
contract, subject to any limitations imposed by the Investment Company
Act of 1940.
Section 5. OTHER RIGHTS. The Board of Directors may make further
provisions consistent with law for indemnification and advance of
expenses to directors, officers, employees and agents by resolution,
agreement or otherwise. The indemnification provided by this Articles
shall not be deemed exclusive of any other right, with respect to
indemnification or otherwise, to which those seeking indemnification may
be entitled under any insurance or other agreement or resolution of
Shareholders or disinterested directors or otherwise.
Section 6. AMENDMENTS. References in this Article are to the
Maryland General Corporation Law and to the Investment Company Act of
1940 as from time to time amended. No amendment of these By-Laws shall
affect any right of any person under this Article based on any event,
omission or proceeding prior to the amendment.
ARTICLE X
AMENDMENTS
Section 1. The Board of Directors shall have the power to alter,
amend or repeal any By-Laws of the Corporation and to make new By-Laws.
