1940 Act File No. 811-07309
1933 Act File No. 033-60411
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No. 1
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 1
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS
(Exact Name of Registrant as Specified in Charter)
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
John W. McGonigle, Esquire,
Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering As soon as possible after
the effectiveness of the Registration Statement
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 FEDERATED U.S. GOVERNMENT SECURITIES
FUND: 5-10 YEARS consists of one portfolio which is offered in two
separate classes of shares known as (a) Institutional Shares and (b)
Institutional Serivce Shares. A separate prospectus is being filed
herewith for each class of shares, and one combined Statement of
Additional Information is being filed herewith for both classes of
shares.
PART A. INFORMATION REQUIRED IN A PROSPECTUS.
Prospectus Heading
(Rule 404(c) Cross Reference)
Item 1. Cover Page (a,b) Cover Page.
Item 2. Synopsis (a) Summary of Trust Expenses -
Institutional Shares; (b) Summary of
Trust Expenses - Institutional Service
Shares.
Item 3. Condensed Financial
Information (a,b) Performance
Information.
Item 4. General Description of
Registrant (a,b) General Information;
Investment Information; Investment
Objective; Investment Policies;
Investment Limitations; Other Classes of
Shares; Addresses.
Item 5. Management of the Fund Trust Information; Management of the
Trust; (A) Expenses of the Trust and
Institutional Shares; (b) Expenses of the
Trust and Institutional Service Shares;
(a) Distribution of Institutional Shares;
(b) Distribution of Institutional Service
Shares; (b) Distribution Plan; (a, b)
Administration of the Trust.
Item 6. Capital Stock and Other
Securities (a,b) Dividends; Capital
Gains; Shareholder Information; Voting
Rights; Massachusetts Partnership Law;
Tax Information; Federal Income Tax;
Pennsylvania Corporate and Personal
Property Taxes.
Item 7. Purchase of Securities Being
Offered (a,b) Net Asset Value; (a)
Investing in Institutional Shares; (b)
Investing in Institutional Service
Shares; (a,b) Share Purchases; Minimum
Investment Required; What Shares Cost;
Certificates and Confirmations.
Item 8. Redemption or Repurchase (a) Redeeming Institutional Shares; (b)
Redeeming Institutional Service Shares;
(a,b) Telephone Redemption; Written
Requests; Accounts With Low Balances.
Item 9. Pending Legal Proceedings None.
PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION.
Item 10. Cover Page (a, b) Cover Page.
Item 11. Table of Contents (a, b) Table of Contents.
Item 12. General Information and
History (a, b) General Information
About the Trust.
Item 13. Investment Objectives and
Policies (a, b) Investment Objective and
Policies.
Item 14. Management of the Trust (a, b) Federated U.S. Government
Securities Fund: 5-10 Years Management;
Trustees' Compensation.
Item 15. Control Persons and Principal
Holders of Securities (a, b) Trust
Ownership.
Item 16. Investment Advisory and Other
Services (a, b) Investment Advisory
Services; Trust Administration.
Item 17. Brokerage Allocation Brokerage Transactions.
Item 18. Capital Stock and Other
Securities Not applicable.
Item 19. Purchase, Redemption and
Pricing of Securities Being
Offered (a, b) Purchasing Shares;
Determining Net Asset Value; Redeeming
Shares; Redemption in Kind.
Item 20. Tax Status (a, b) Tax Status.
Item 21. Underwriters Not applicable.
Item 22. Calculations of Performance
Data (a, b) Total Return; Yield;
Performance Comparisons; Duration.
Item 23. Financial Statements Filed in Part A.
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--------
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS
INSTITUTIONAL SHARES
PROSPECTUS
The Institutional Shares offered by this prospectus
represent
interests in a diversified portfolio of securities of Federated
U.S.
Government Securities Fund: 5-10 Years (the "Trust"). The Trust is
an
open-end management investment company (a mutual fund).
The investment objective of the Trust is to pursue total
return
consistent with current income. The Trust invests in U.S.
government securities. Institutional Shares are sold at net
asset
value.
THE INSTITUTIONAL 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
GOVERNMENTAL
AGENCY. INVESTMENT IN THESE SHARES INVOLVES INVESTMENT
RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
This prospectus contains the information you should read and
know
before you invest in Institutional Shares of the Trust. Keep
this
prospectus for future reference.
The Trust has also filed a Combined Statement of
Additional
Information for Institutional Shares and Institutional Service
Shares
dated , 1995, 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
which is in paper form only, or a paper copy of this prospectus,
if
you have received your prospectus electronically, free of charge
by
calling 1-800-235-4669. To obtain other information or make
inquiries
about the Trust, contact the Trust at the address listed in the
back
of this prospectus.
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 , 1995
TABLE OF CONTENTS
------------------------------------------------------------------------
--------
<TABLE>
<S> <C>
SUMMARY OF TRUST EXPENSES--
INSTITUTIONAL SHARES 1
---------------------------------------------------
GENERAL INFORMATION 2
---------------------------------------------------
INVESTMENT INFORMATION 2
---------------------------------------------------
Investment Objective 2
Investment Policies 2
Investment Limitations 3
TRUST INFORMATION 4
---------------------------------------------------
Management of the Trust 4
Expenses of the Trust and
Institutional Shares 5
Distribution of Institutional Shares 5
Administration of the Trust 6
NET ASSET VALUE 7
---------------------------------------------------
INVESTING IN INSTITUTIONAL SHARES 7
---------------------------------------------------
Share Purchases 7
Minimum Investment Required 8
What Shares Cost 8
Certificates and Confirmations 8
Dividends 8
Capital Gains 8
REDEEMING INSTITUTIONAL SHARES 8
---------------------------------------------------
Telephone Redemption 9
Written Requests 9
Accounts With Low Balances 10
SHAREHOLDER INFORMATION 10
---------------------------------------------------
Voting Rights 10
Massachusetts Partnership Law 10
TAX INFORMATION 11
---------------------------------------------------
Federal Income Tax 11
Pennsylvania Corporate and Personal
Property Taxes 11
PERFORMANCE INFORMATION 11
---------------------------------------------------
OTHER CLASSES OF SHARES 12
---------------------------------------------------
FINANCIAL STATEMENTS 13
---------------------------------------------------
REPORT OF ERNST & YOUNG LLP, INDEPENDENT
AUDITORS 14
---------------------------------------------------
ADDRESSES 15
---------------------------------------------------
</TABLE>
I
SUMMARY OF TRUST EXPENSES--INSTITUTIONAL SHARES
------------------------------------------------------------------------
--------
INSTITUTIONAL SHARES
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S>
<C>
Maximum Sales Load Imposed on Purchases (as a percentage of offering
price)................... None
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of
offering price)........ None
Contingent Deferred Sales Charge (as a percentage of original purchase
price or redemption
proceeds, as
applicable).............................................................
....... None
Redemption Fee (as a percentage of amount redeemed, if
applicable)............................ None
Exchange
Fee.....................................................................
............. None
</TABLE>
ANNUAL INSTITUTIONAL SHARES OPERATING EXPENSES*
(As a percentage of projected average net assets)
<TABLE>
<S>
<C> <C>
Management Fee (after waiver)
(1).................................................................
0.00%
12b-1
Fee.....................................................................
.................... None
Total Other
Expenses................................................................
.............. 0.54%
Shareholder Services Fee (after waiver)
(2).......................................... 0.09%
Total Institutional Shares Operating Expenses
(3)......................................... 0.54%
<FN>
(1) The estimated management fee has been reduced to reflect the
anticipated
voluntary waiver of a portion of the management fee. The
adviser can
terminate this voluntary waiver at any time at its sole
discretion. The
maximum management fee is 0.50%.
(2) The maximum shareholder services fee is 0.25%.
(3) The Total Institutional Shares Operating Expenses are estimated to
be 1.30%
absent the anticipated voluntary waivers of the management
fee and
shareholder services fee and the anticipated voluntary
reimbursement of
certain other operating expenses.
* Annual Institutional Shares Operating Expenses in the table
above are
estimated based on expenses expected to be incurred during the
fiscal year
ending February 29, 1996. During the course of this period,
expenses may be
more or less than the amount shown.
</TABLE>
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN
UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF INSTITUTIONAL
SHARES OF THE
TRUST WILL BEAR, EITHER DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE
DESCRIPTIONS
OF THE VARIOUS COSTS AND EXPENSES, SEE "INVESTING IN INSTITUTIONAL
SHARES" AND
"TRUST INFORMATION." Wire-transferred redemptions of less than $5,000
may be
subject to additional fees.
<TABLE>
<CAPTION>
EXAMPLE
1 YEAR 3 YEARS
------------------------------------------------------------------------
------------- --------- ---------
<S>
<C> <C>
You would pay the following expenses on a $1,000 investment
assuming (1) 5% annual return and (2) redemption at the end
of each time
period..................................................................
$6 $17
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF
PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
SHOWN. THIS
EXAMPLE IS BASED ON ESTIMATED DATA FOR THE FISCAL YEAR ENDING FEBRUARY
29, 1996.
1
GENERAL INFORMATION
------------------------------------------------------------------------
--------
The Trust was established as a Massachusetts business trust under a
Declaration
of Trust dated June 14, 1995. The Declaration of Trust permits the
Trust to
offer separate series of shares of beneficial interest representing
interests in
separate portfolios of securities. The shares in any one portfolio
may be
offered in separate classes. As of the date of this prospectus, the
Board of
Trustees (the "Trustees") have established two classes of shares of
the Trust,
known as Institutional Shares and Institutional Service Shares. This
prospectus
relates only to Institutional Shares.
Institutional Shares ("Shares") are sold primarily to accounts
for which
financial institutions act in a fiduciary or agency capacity, or other
accounts
where the financial institution maintains master accounts with an
aggregate
investment of at least $400 million in certain funds which are
advised or
distributed by affiliates of Federated Investors. Shares are also made
available
to financial intermediaries, as well as public and private
organizations. An
investment in the Trust serves as a convenient means of accumulating an
interest
in a professionally managed, diversified portfolio of U.S.
government
securities. A minimum initial investment of $25,000 over a 90-day
period is
required.
Shares are currently sold and redeemed at net asset value without a
sales charge
imposed by the Trust.
INVESTMENT INFORMATION
------------------------------------------------------------------------
--------
INVESTMENT OBJECTIVE
The investment objective of the Trust is to pursue total return
consistent with
current income. The investment objective cannot be changed without
approval of
shareholders. While there is no assurance that the Trust will
achieve its
investment objective, it endeavors to do so by following the investment
policies
described in this prospectus.
INVESTMENT POLICIES
The Trust pursues its investment objective by investing only in
securities which
are guaranteed as to payment of principal and interest by the U.S.
government or
U.S. government agencies or instrumentalities. The Trust will maintain
a dollar
weighted average portfolio maturity between five and ten years,
although the
Trust may purchase individual securities with longer maturities.
Unless
otherwise noted, the investment policies of the Trust may be changed
by the
Trustees without shareholder approval. Shareholders will be notified
before any
material change in these policies becomes effective.
ACCEPTABLE INVESTMENTS. The U.S. government securities in which
the Trust
invests are either issued or guaranteed by the U.S. government, its
agencies, or
instrumentalities. These securities are limited to:
- direct obligations of the U.S. Treasury, such as U.S.
Treasury bills,
notes, and bonds; and
- notes, bonds, and discount notes of U.S. government
agencies or
instrumentalities, such as the: Farm Credit System, including the
National
Bank for Cooperatives, Farm Credit Banks, and Banks for
Cooperatives;
Farmers Home Administration; Federal Home Loan Banks;
Fed-
2
eral Home Loan Mortgage Corporation; Federal National
Mortgage
Association; Government National Mortgage Association; and
Student Loan
Marketing Association.
Some obligations issued or guaranteed by agencies or instrumentalities
of the
U.S. government, such as Government National Mortgage Association
participation
certificates, are backed by the full faith and credit of the U.S.
Treasury. No
assurances can be given that the U.S. government will provide financial
support
to other agencies or instrumentalities, since it is not obligated to
do so.
These agencies and instrumentalities are supported by:
- the issuer's right to borrow an amount limited to a specific
line of
credit from the U.S. Treasury;
- discretionary authority of the U.S. government to purchase
certain
obligations of an agency or instrumentality; or
- the credit of the agency or instrumentality.
The prices of fixed income securities fluctuate inversely to the
direction of
interest rates.
REPURCHASE AGREEMENTS. Repurchase agreements are arrangements in which
banks,
broker/dealers, and other recognized financial institutions sell U.S.
government
securities to the Trust 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 Trust, the Trust could receive
less than
the repurchase price on any sale of such securities.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Trust may
purchase
securities on a when-issued or delayed delivery basis. These
transactions are
arrangements in which the Trust purchases securities with payment and
delivery
scheduled for a future time. The seller's failure to complete these
transactions
may cause the Trust to miss a price or yield considered to be
advantageous.
Settlement dates may be a month or more after entering into these
transactions,
and the market values of the securities purchased may vary from the
purchase
prices. Accordingly, the Trust may pay more/less than the market
value of the
securities on the settlement date.
The Trust may dispose of a commitment prior to settlement if the
adviser deems
it appropriate to do so. In addition, the Trust may enter into
transactions to
sell its purchase commitments to third parties at current market
values and
simultaneously acquire other commitments to purchase similar securities
at later
dates. The Trust may realize short-term profits or losses upon the sale
of such
commitments.
INVESTMENT LIMITATIONS
The Trust will not borrow money directly or through reverse
repurchase
agreements (arrangements in which the Trust sells a portfolio
instrument for a
percentage of its cash value with an agreement to buy it back on a set
date) or
pledge securities except, under certain circumstances, the Trust may
borrow up
to one-third of the value of its total assets and pledge securities to
secure
such borrowings.
The above investment limitation cannot be changed without shareholder
approval.
3
TRUST INFORMATION
------------------------------------------------------------------------
--------
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees. The
Trustees
are responsible for managing the Trust's business affairs and for
exercising all
the Trust's powers except those reserved for the shareholders. The
Executive
Committee of the Board of Trustees handles the Board's responsibilities
between
meetings of the Board.
INVESTMENT ADVISER. Investment decisions for the Trust are made by
Federated
Management, the Trust's investment adviser, subject to direction
by the
Trustees. The adviser continually conducts investment research and
supervision
for the Trust and is responsible for the purchase or sale of
portfolio
instruments, for which it receives an annual fee from the Trust.
Both the Trust and the Adviser have adopted strict codes of ethics
governing the
conduct of all employees who manage the Trust and its portfolio
securities.
These codes recognize that such persons owe a fiduciary duty to the
Trust's
shareholders and must place the interests of shareholders ahead
of the
employees' own interest. Among other things, the codes: require
preclearance and
periodic reporting of personal securities transactions; prohibit
personal
transactions in securities being purchased or sold, or being
considered for
purchase or sale, by the Trust; prohibit purchasing securities in
initial public
offerings; and prohibit taking profits on securities held for less
than sixty
days. Violations of the codes are subject to review by the Board of
Trustees,
and could result in severe penalties.
ADVISORY FEES. The Trust's adviser receives an annual investment
advisory
fee equal to .50 of 1% of the Trust's average daily net assets. The
adviser
has also undertaken to reimburse the Trust for operating expenses
in excess
of limitations established by certain states. This does not
include
reimbursement to the Trust of any expenses incurred by shareholders
who use
the transfer agent's subaccounting facilities.
ADVISER'S BACKGROUND. Federated Management, a Delaware
business trust
organized on April 11, 1989, is a registered investment adviser
under the
Investment Advisers Act of 1940. It is a subsidiary of Federated
Investors.
All of the Class A (voting) shares of Federated Investors are
owned by a
trust, the trustees of which are John F. Donahue, Chairman and
Trustee of
Federated Investors, Mr. Donahue's wife, and Mr. Donahue's
son, J.
Christopher Donahue, who is President and Trustee of Federated
Investors.
Federated Management and other subsidiaries of Federated Investors
serve as
investment advisers to a number of investment companies and
private
accounts. Certain other subsidiaries also provide administrative
services to
a number of investment companies. With over $72 billion invested
across more
than 260 funds under management and/or administration by its
subsidiaries,
as of December 31, 1994, Federated Investors is one of the
largest mutual
fund investment managers in the United States. With more
than 1,750
employees, Federated continues to be led by the management who
founded the
company in 1955. Federated funds are presently at work in and
through 4,000
financial institutions nationwide. More than 100,000
investment
professionals have selected Federated funds for their clients.
4
Susan M. Nason has been the Trust's portfolio manager since its
inception.
Ms. Nason joined Federated Investors in 1987 and has been a Vice
President
of the Trust's investment adviser since 1993. Ms. Nason served
as an
Assistant Vice President of the investment adviser from 1990 until
1992, and
from 1987 until 1990 she acted as an investment analyst. Ms.
Nason is a
Chartered Financial Analyst and received her M.B.A. in Finance from
Carnegie
Mellon University.
Joseph M. Balestrino has been the Trust's portfolio manager
since its
inception. Mr. Balestrino, who joined Federated Investors in 1986,
has been
a Vice President of the Trust's investment adviser since July 1,
1995, and
was formerly an Assistant Vice President since 1991. Mr.
Balestrino served
as an Investment Analyst of the investment adviser from 1989 until
1991, and
from 1986 until 1989 he acted as Project Manager in the Product
Development
Department. Mr. Balestrino is a Chartered Financial Analyst and
received his
M.A. in Urban and Regional Planning from the University of
Pittsburgh.
EXPENSES OF THE TRUST AND INSTITUTIONAL SHARES
Holders of Shares pay their allocable portion of Trust expenses.
The Trust
expenses for which holders of Shares pay their allocable portion
include, but
are not limited to: the cost of organizing the Trust and
continuing its
existence; registering the Trust with federal and state securities
authorities;
Trustees fees; auditors' fees; the cost of meetings of Trustees; legal
fees of
the Trust; association membership dues; and such non-recurring and
extraordinary
items as may arise from time to time.
The portfolio expenses for which holders of Shares pay their allocable
portion
include, but are not limited to: registering the portfolio and
Shares of the
portfolio; 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 allocated to the Shares as a class are
expenses
under the Trust's Shareholder Services Agreement which relate to the
Shares.
However, the Board of Trustees reserves the right to allocate
certain other
expenses to holders of Shares as it deems appropriate ("Class
Expenses"). In any
case, Class Expenses would be limited to: transfer agent fees as
identified by
the transfer agent as attributable to holders of Shares; printing and
postage
expenses related to preparing and distributing materials such as
shareholder
reports, prospectuses and proxies to current shareholders;
registration fees
paid to the Securities and Exchange Commission and registration fees
paid to
state securities commissions; expenses related to administrative
personnel and
services as required to support holders of Shares; legal fees relating
solely to
Shares; and Trustees' fees incurred as a result of issues relating
solely to
Shares.
DISTRIBUTION OF INSTITUTIONAL SHARES
Federated Securities Corp. is the principal distributor for the Shares.
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.
SHAREHOLDER SERVICES. The Trust has entered into a Shareholder
Services
Agreement with Federated Shareholder Services, a subsidiary of
Federated
Investors, under which the Trust may make payments up to 0.25 of
1.00% of the
average daily net asset value of the Trust to obtain certain personal
services
5
for shareholders and to maintain shareholder accounts ("Shareholder
Services").
Under the Shareholder Services Agreement, Federated Shareholder
Services will
either perform Shareholder Services directly or will select
financial
institutions to perform Shareholder Services. Financial
institutions will
receive fees based upon shares owned by their clients or
customers. The
schedules of such fees and the basis upon which fees will be paid
will be
determined from time to time by the Trust and Federated Shareholder
Services.
In addition to payments made pursuant to the Shareholder Services
Agreement,
Federated Securities Corp. and Federated Shareholder Services, from
their own
assets, may pay financial institutions supplemental fees for their
performance
of sales services, distribution-related support services, or
Shareholder
Services.
OTHER PAYMENTS TO FINANCIAL INSTITUTIONS. In addition to periodic
payments to
financial institutions for shareholder services, certain financial
institutions
may be compensated by the Trust's investment adviser or its affiliates
for the
continuing investment of customers' assets in certain funds,
including the
Trust, advised by those entities. These payments will be made
directly by the
distributor or the Trust's investment adviser from their assets, and
will not be
made from the assets of the Trust or by the assessment of a sales
load on
Shares.
The Glass-Steagall Act prohibits a depository institution (such as a
commercial
bank or a savings and loan association) from being an underwriter or
distributor
of most securities. In the event the Glass-Steagall Act is deemed to
prohibit
depository institutions from acting in the administrative capacities
described
above or should Congress relax current restrictions on depository
institutions,
the Trustees will consider appropriate changes in the services.
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 TRUST
ADMINISTRATIVE SERVICES. Federated Administrative Services, a
subsidiary of
Federated Investors, provides administrative personnel and services
(including
certain legal and financial reporting services) necessary to operate the
Trust.
Federated Administrative Services provides these at an annual rate which
relates
to the average aggregate daily net assets of all funds advised by
subsidiaries
of Federated Investors ("Federated Funds") as specified below:
<TABLE>
<CAPTION>
MAXIMUM AVERAGE AGGREGATE DAILY NET ASSETS
ADMINISTRATIVE FEE OF THE FEDERATED FUNDS
-------------------- ------------------------------------
<C> <S>
0.15 of 1% on the first $250 million
0.125 of 1% on the next $250 million
0.10 of 1% on the next $250 million
0.075 of 1% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be
at least
$125,000 per portfolio and $30,000 per each additional class of
shares.
Federated Administrative Services may choose voluntarily to waive a
portion of
its fee.
6
CUSTODIAN. State Street Bank and Trust Company ("State Street Bank"),
Boston,
Massachusetts, is custodian for the securities and cash of the Trust.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated Services
Company,
Pittsburgh, Pennsylvania is transfer agent for the shares of the
Trust and
dividend disbursing agent for the Trust.
INDEPENDENT AUDITORS. The independent auditors for the Trust are Ernst
& Young
LLP, Pittsburgh, Pennsylvania 15219.
NET ASSET VALUE
------------------------------------------------------------------------
--------
The Trust's net asset value per share fluctuates. The net asset value
for Shares
is determined by adding the interest of the Shares in the market
value of all
securities and other assets of the Trust, subtracting the interest of
the Shares
in the liabilities of the Trust and those attributable to Shares, and
dividing
the remainder by the total number of Shares outstanding. The net asset
value of
Institutional Shares may exceed that of Institutional Service 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 INSTITUTIONAL SHARES
------------------------------------------------------------------------
--------
SHARE PURCHASES
Shares are sold on days on which the New York Stock Exchange is
open for
business. Shares may be purchased either by wire or mail.
To purchase Shares, open an account by calling Federated
Securities Corp.
Information needed to establish an account will be taken over the
telephone. The
Trust reserves the right to reject any purchase request.
BY WIRE. To purchase Shares by Federal Reserve wire, call the Trust
before 4:00
p.m. (Eastern time) to place an order. The order is considered
received
immediately. Payment by federal wire funds must be received before
3:00 p.m.
(Eastern time) on the next business day following the order.
Federal funds
should be wired as follows: Federated Services Company c/o State Street
Bank and
Trust Company, Boston, Massachusetts; Attention: EDGEWIRE; For
Credit to:
Federated U.S. Government Securities Fund: 5-10 Years--Institutional
Shares;
Trust Number (this number can be found on the account statement or by
contacting
the Trust); Group Number or Wire Order Number; Nominee or Institution
Name; and
ABA Number 011000028.
BY MAIL. To purchase Shares by mail, send a check made payable to
Federated
U.S. Government Securities Fund: 5-10 Years--Institutional Shares to
Federated
Services Company, P.O. Box 8600, Boston, Massachusetts 02266-8600.
Orders by
mail are considered received after payment by check is converted by the
transfer
agent's bank, State Street Bank, into federal funds. This is generally
the next
business day after State Street Bank receives the check.
7
MINIMUM INVESTMENT REQUIRED
The minimum initial investment in Shares is $25,000. However, an
account may be
opened with a smaller amount as long as the $25,000 minimum is reached
within 90
days. An institutional investor's minimum investment will be
calculated by
combining all accounts it maintains with the Trust. Accounts established
through
a non-affiliated bank or broker may be subject to a smaller minimum
investment.
WHAT SHARES COST
Shares are sold at their net asset value next determined after an
order is
received. There is no sales charge imposed by the Trust. Investors who
purchase
Shares through a non-affiliated bank or broker may be charged an
additional
service fee by that bank or broker.
The net asset value is determined as of the close of trading
(normally 4:00
p.m., Eastern time) on the New York Stock Exchange, Monday through
Friday,
except on (i) days on which there are not sufficient changes in the
value of the
Trust's portfolio securities such that its net asset value might be
materially
affected; (ii) days during which no Shares are tendered for
redemption and no
orders to purchase Shares are received; and (iii) the following
holidays: New
Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor
Day, Thanksgiving Day and Christmas Day.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Trust, Federated Services Company maintains
a share
account for each shareholder. Share certificates are not issued unless
requested
by contacting the Trust.
Detailed confirmations of each purchase or redemption are sent
to each
shareholder. Monthly confirmations are sent to report dividends paid
during the
month.
DIVIDENDS
Dividends are declared daily and paid monthly. Dividends are declared
just prior
to determining net asset value. If an order for Shares is placed
on the
preceding business day, Shares purchased by wire begin earning dividends
on the
business day wire payment is received by State Street Bank. If the
order for
Shares and payment by wire are received on the same day, Shares begin
earning
dividends on the next business day. Shares purchased by check begin
earning
dividends on the business day after the check is converted by the
transfer agent
into federal funds. Dividends are automatically reinvested on payment
dates in
additional Shares unless cash payments are requested by contacting the
Trust.
CAPITAL GAINS
Capital gains realized by the Trust, if any, will be distributed at
least once
every 12 months.
REDEEMING INSTITUTIONAL SHARES
------------------------------------------------------------------------
--------
The Trust redeems Shares at their net asset value next determined
after the
Trust receives the redemption request. Redemptions will be made on days
on which
the Trust computes its net asset value.
8
Redemption requests must be received in proper form and can be made by
telephone
request or by written request.
TELEPHONE REDEMPTION
Shareholders may redeem their Shares by telephoning the Trust before
4:00 p.m.
(Eastern time). Telephone redemption instructions may be recorded. All
proceeds
will normally be wire transferred the following business day, but in
no event
more than seven days, to the shareholder's account at a domestic
commercial bank
that is a member of the Federal Reserve System. If at any time the
Trust shall
determine it necessary to terminate or modify this method of
redemption,
shareholders would be promptly notified.
An authorization form permitting the Trust to accept telephone
requests must
first be completed. Authorization forms and information on this
service are
available from Federated Securities Corp.
In the event of drastic economic or market changes, a shareholder may
experience
difficulty in redeeming by telephone. If such a case should occur,
another
method of redemption, such as written requests, should be
considered. If
reasonable procedures are not followed by the Trust, it may be liable
for losses
due to unauthorized or fraudulent telephone instructions.
WRITTEN REQUESTS
Shares may also be redeemed by sending a written request to the Trust.
Call the
Trust for specific instructions before redeeming by letter. The
shareholder will
be asked to provide in the request his name, the Trust name and class
of shares
name, his account number, and the share or dollar amount requested.
If share
certificates have been issued, they must be properly endorsed and should
be sent
by registered or certified mail to Federated Services Company, 500
Victory
Road-2nd Floor, Quincy, Massachusetts, 02171 with the written request.
SIGNATURES. Shareholders requesting a redemption of $50,000 or
more, a
redemption of any amount to be sent to an address other than that on
record with
the Trust, or a redemption payable other than to the shareholder of
record must
have signatures on written redemption requests guaranteed by:
- a trust company or commercial bank whose deposits are insured by
the Bank
Insurance Fund, which is administered by the Federal Deposit
Insurance
Corporation ("FDIC");
- a member of the New York, American, Boston, Midwest, or
Pacific Stock
Exchange;
- a savings bank or savings and loan association whose deposits are
insured
by the Savings Association Insurance Fund, which is administered
by the
FDIC; or
- any other "eligible guarantor institution," as defined in the
Securities
Exchange Act of 1934.
The Trust does not accept signatures guaranteed by a notary public.
The Trust and its transfer agent have adopted standards for accepting
signature
guarantees from the above institutions. The Trust may elect in the
future to
limit eligible signature guarantors to institutions that are
members of a
signature guarantee program. The Trust and its transfer agent reserve
the right
to amend these standards at any time without notice.
9
RECEIVING PAYMENT. Normally, a check for the proceeds is mailed
within one
business day, but in no event more than seven days, after receipt of
a proper
written redemption request.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the
Trust may
redeem Shares in any account and pay the proceeds to the
shareholder if the
account balance falls below a required minimum value of
$25,000. This
requirement does not apply, however, if the balance falls below $25,000
because
of changes in the Trust'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.
SHAREHOLDER INFORMATION
------------------------------------------------------------------------
--------
VOTING RIGHTS
Each share of the Trust gives the shareholder one vote in Trustee
elections and
other matters submitted to shareholders for vote. All shares of all
classes of
each portfolio in the Trust have equal voting rights except that in
matters
affecting only a particular portfolio or class, only shares of that
portfolio or
class are entitled to vote. As a Massachusetts business trust, the
Trust is not
required to hold annual shareholder meetings. Shareholder approval
will be
sought only for certain changes in the Trust's operation and for the
election of
Trustees under certain circumstances.
Trustees may be removed by the Trustees or by shareholders at a special
meeting.
A special meeting of the shareholders for this purpose shall be
called by the
Trustees upon the written request of shareholders owning at least 10%
of the
outstanding shares of the Trust entitled to vote.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally
liable as
partners under Massachusetts law for obligations of the Trust. To
protect the
shareholders of the Trust, the Trust has filed legal
documents with
Massachusetts that expressly disclaim the liability of its shareholders
for such
acts or obligations of the Trust. These documents require notice
of this
disclaimer to be given in each agreement, obligation, or instrument
that the
Trust or its Trustees enter into or sign on behalf of the Trust.
In the unlikely event a shareholder is held personally liable for the
Trust's
obligations, the Trust is required to use its property to protect or
compensate
the shareholder. On request, the Trust will defend any claim made and
pay any
judgment against a shareholder for any act or obligation of
the Trust.
Therefore, financial loss resulting from liability as a shareholder
will occur
only if the Trust itself cannot meet its obligations to indemnify
shareholders
and pay judgments against them from its assets.
10
TAX INFORMATION
------------------------------------------------------------------------
--------
FEDERAL INCOME TAX
The Trust will pay no federal income tax because it expects to meet
requirements
of the Internal Revenue Code applicable to regulated investment
companies and to
receive the special tax treatment afforded to such companies.
Unless otherwise exempt, shareholders are required to pay federal income
tax on
any dividends and other distributions received. This applies whether
dividends
and distributions are received in cash or as additional shares.
PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES
In the opinion of Houston, Houston & Donnelly, counsel to the Trust:
- the Trust is not subject to Pennsylvania corporate or personal
property
taxes; and
- Trust shares may be subject to personal property taxes
imposed by
counties, municipalities, and school districts in Pennsylvania
to the
extent that the portfolio securities in the Trust would be subject
to such
taxes if owned directly by residents of those jurisdictions.
Shareholders are urged to consult their own tax advisers regarding the
status of
their accounts under state and local tax laws.
PERFORMANCE INFORMATION
------------------------------------------------------------------------
--------
From time to time, the Trust advertises its total return and yield for
Shares.
Total return represents the change, over a specified period of
time, in the
value of an investment in Shares of the Trust 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 yield of Shares of the Trust is calculated by dividing the net
investment
income per share (as defined by the Securities and Exchange
Commission) earned
by Shares over a thirty-day period by the maximum offering price per
share of
Shares on the last day of the period. This number is then
annualized using
semi-annual compounding. The yield does not necessarily reflect income
actually
earned by Shares and, therefore, may not correlate to the dividends
or other
distributions paid to shareholders.
The Trust is sold without any sales charge or other similar non-
recurring
charges.
Total return and yield will be calculated separately for
Institutional Shares
and Institutional Service Shares.
From time to time, advertisements for the Trust may refer to ratings,
rankings,
and other information in certain financial publications and/or
compare the
Trust's performance to certain indices.
11
OTHER CLASSES OF SHARES
------------------------------------------------------------------------
--------
The Trust also offers another class of shares called Institutional
Service
Shares. Institutional Service Shares are sold at net asset value
primarily to
retail and private banking customers of financial institutions and are
subject
to a minimum initial investment of $25,000.
Institutional Shares and Institutional Service Shares are subject to
certain of
the same expenses; however, Institutional Service Shares are distributed
under a
12b-1 Plan adopted by the Trust. This, plus other expense differences
between
Institutional Shares and Institutional Service Shares, may
affect the
performance of each class.
To obtain more information and a prospectus for Institutional Service
Shares,
investors may call 1-800-235-4669.
12
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 5, 1995
------------------------------------------------------------------------
--------
<TABLE>
<S>
<C>
ASSETS:
------------------------------------------------------------------------
--------
Cash
$100,000
------------------------------------------------------------------------
-------- --------
LIABILITIES:
--
------------------------------------------------------------------------
-------- --------
NET ASSETS for 10,000 shares outstanding
$100,000
------------------------------------------------------------------------
-------- --------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
($100,000 DIVIDED BY 10,000 shares outstanding)
$ 10.00
------------------------------------------------------------------------
-------- --------
<FN>
NOTES:
(1) Federated U.S. Government Securities Fund: 5-10 Years (the
"Trust") was
established as a Massachusetts business trust under a Declaration
of Trust
dated June 14, 1995, and has no operations since that date other
than those
relating to organization matters, including the issuance on
September 5,
1995, of 10,000 shares at $10.00 per share to Federated
Administrative
Services, the Administrator of the Trust. Expenses of organization
incurred
by the Trust, estimated at $35,000 were borne initially
by the
Administrator. The Trust has agreed to reimburse the Administrator
for the
organizational expenses and start-up administrative expenses
during the
five year period following date the Trust first became effective.
(2) Reference is made to "Management of the Trust", "Administration
of the
Trust" and "Tax Information" in this Prospectus for a
description of the
investment advisory fee, administration and other services
and other
federal tax aspects of the Trust.
</TABLE>
13
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
---------------------------------------------------------
To the Board of Trustees and Shareholders of
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS:
We have audited the accompanying statement of assets and
liabilities of
Federated U.S. Government Securities Fund: 5-10 Years as of September
5, 1995.
This statement of assets and liabilities is the responsibility of
the Fund's
management. Our responsibility is to express an opinion on this
statement of
assets and liabilities based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards.
Those standards require that we plan and perform the audit to obtain
reasonable
assurance about whether the statement of assets and liabilities is
free of
material misstatement. An audit includes examining, on a test basis,
evidence
supporting the amounts and disclosures in the statement of
assets and
liabilities. An audit also includes assessing the accounting principles
used and
significant estimates made by management, as well as evaluating the
overall
statement of assets and liabilities presentation. We believe that
our audit
provides a reasonable basis for our opinion.
In our opinion, the statement of assets and liabilities presents
fairly, in all
material respects, the net assets of the Federated U.S. Government
Securities
Fund: 5-10 Years as of September 5, 1995, in conformity with generally
accepted
accounting principles.
ERNST & YOUNG LLP
Pittsburgh, Pennsylvania
September 6, 1995
14
ADDRESSES
------------------------------------------------------------------------
--------
<TABLE>
<S> <C>
Federated U.S. Government Securities Fund: 5-10 Years
Institutional Shares
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
------------------------------------------------------------------------
-------------------
Distributor
Federated Securities Corp.
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
------------------------------------------------------------------------
-------------------
Investment Adviser
Federated Management
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
------------------------------------------------------------------------
-------------------
Custodian
State Street Bank and Trust Company P.O.
Box 8600
Boston,
Massachusetts 02266-8600
------------------------------------------------------------------------
-------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company P.O Box
8600
Boston,
Massachusetts 02266-8600
------------------------------------------------------------------------
-------------------
Independent Auditors
Ernst & Young LLP One
Oxford Centre
Pittsburgh, Pennsylvania 15219
------------------------------------------------------------------------
-------------------
</TABLE>
15
------------------------------------------------------------------------
--------
FEDERATED U.S.
GOVERNMENT SECURITIES
FUND: 5-10 YEARS
INSTITUTIONAL SHARES
PROSPECTUS
An Open-End, Diversified Management
Investment Company
Prospectus dated , 1995
[LOGO] FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
G01209-01-IS [RECYCLED PAPER LOGO]
------------------------------------------------------------------------
--------
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS
INSTITUTIONAL SERVICE SHARES
PROSPECTUS
The Institutional Service Shares offered by this prospectus
represent
interests in a diversified portfolio of securities of Federated
U.S.
Government Securities Fund: 5-10 Years (the "Trust"). The Trust is
an
open-end management investment company (a mutual fund).
The investment objective of the Trust is to pursue total
return
consistent with current income. The Trust invests in U.S.
government securities. Institutional Service Shares are sold at
net
asset value.
THE INSTITUTIONAL SERVICE 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
GOVERNMENTAL
AGENCY. INVESTMENT IN THESE SHARES INVOLVES INVESTMENT
RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
This prospectus contains the information you should read and
know
before you invest in Institutional Shares of the Trust. Keep
this
prospectus for future reference.
The Trust has also filed a Combined Statement of
Additional
Information for Institutional Shares and Institutional Service
Shares
dated , 1995, 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
which is in paper form only, or a paper copy of this prospectus,
if
you have received your prospectus electronically, free of charge
by
calling 1-800-235-4669. To obtain other information or make
inquiries
about the Trust, contact the Trust at the address listed in the
back
of this prospectus.
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 , 1995
TABLE OF CONTENTS
------------------------------------------------------------------------
--------
<TABLE>
<S> <C>
SUMMARY OF TRUST EXPENSES--
INSTITUTIONAL SERVICE SHARES 1
---------------------------------------------------
GENERAL INFORMATION 2
---------------------------------------------------
INVESTMENT INFORMATION 2
---------------------------------------------------
Investment Objective 2
Investment Policies 2
Investment Limitations 3
TRUST INFORMATION 4
---------------------------------------------------
Management of the Trust 4
Expenses of the Trust and
Institutional Service Shares 5
Distribution of Institutional Service
Shares 5
Administration of the Trust 7
NET ASSET VALUE 7
---------------------------------------------------
INVESTING IN INSTITUTIONAL SERVICE
SHARES 7
---------------------------------------------------
Share Purchases 7
Minimum Investment Required 8
What Shares Cost 8
Certificates and Confirmations 8
Dividends 9
Capital Gains 9
REDEEMING INSTITUTIONAL SERVICE SHARES 9
---------------------------------------------------
Telephone Redemption 9
Written Requests 9
Accounts With Low Balances 10
SHAREHOLDER INFORMATION 10
---------------------------------------------------
Voting Rights 10
Massachusetts Partnership Law 11
TAX INFORMATION 11
---------------------------------------------------
Federal Income Tax 11
Pennsylvania Corporate and Personal
Property Taxes 11
PERFORMANCE INFORMATION 11
---------------------------------------------------
OTHER CLASSES OF SHARES 12
---------------------------------------------------
FINANCIAL STATEMENTS 13
---------------------------------------------------
REPORT OF ERNST & YOUNG LLP, INDEPENDENT
AUDITORS 14
---------------------------------------------------
ADDRESSES 15
---------------------------------------------------
</TABLE>
I
SUMMARY OF TRUST EXPENSES--INSTITUTIONAL SERVICE SHARES
------------------------------------------------------------------------
--------
INSTITUTIONAL SERVICE SHARES
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S>
<C>
Maximum Sales Load Imposed on Purchases (as a percentage of offering
price)................... None
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of
offering price)........ None
Contingent Deferred Sales Charge (as a percentage of original purchase
price or redemption
proceeds, as
applicable).............................................................
....... None
Redemption Fee (as a percentage of amount redeemed, if
applicable)............................ None
Exchange
Fee.....................................................................
............. None
</TABLE>
ANNUAL INSTITUTIONAL SERVICE SHARES OPERATING EXPENSES*
(As a percentage of projected average net assets)
<TABLE>
<S>
<C> <C>
Management Fee (after waiver)
(1).................................................................
0.00%
12b-1
Fee.....................................................................
.................... 0.25%
Total Other
Expenses................................................................
.............. 0.54%
Shareholder Services Fee (after waiver)
(2).......................................... 0.09%
Total Institutional Service Shares Operating Expenses
(3)................................. 0.79%
<FN>
(1) The estimated management fee has been reduced to reflect the
anticipated
voluntary waiver of a portion of the management fee. The
adviser can
terminate this voluntary waiver at any time at its sole
discretion. The
maximum management fee is 0.50%.
(2) The maximum shareholder services fee is 0.25%.
(3) The Total Institutional Service Shares Operating Expenses are
estimated to
be 1.55% absent the anticipated voluntary waivers of the management
fee and
shareholder services fee and the anticipated voluntary
reimbursement of
certain other operating expenses.
* Annual Institutional Service Shares Operating Expenses in the
table above
are estimated based on expenses expected to be incurred during
the fiscal
year ending February 29, 1996. During the course of this period,
expenses
may be more or less than the amount shown.
</TABLE>
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN
UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF INSTITUTIONAL SERVICE
SHARES OF
THE TRUST WILL BEAR, EITHER DIRECTLY OR INDIRECTLY. FOR MORE
COMPLETE
DESCRIPTIONS OF THE VARIOUS COSTS AND EXPENSES, SEE "INVESTING IN
INSTITUTIONAL
SERVICE SHARES" AND "TRUST INFORMATION." Wire-transferred redemptions
of less
than $5,000 may be subject to additional fees.
<TABLE>
<CAPTION>
EXAMPLE
1 YEAR 3 YEARS
------------------------------------------------------------------------
------------- --------- ---------
<S>
<C> <C>
You would pay the following expenses on a $1,000 investment
assuming (1) 5% annual return and (2) redemption at the end
of each time
period..................................................................
$8 $25
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF
PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
SHOWN. THIS
EXAMPLE IS BASED ON ESTIMATED DATA FOR THE FISCAL YEAR ENDING FEBRUARY
29, 1996.
1
GENERAL INFORMATION
------------------------------------------------------------------------
--------
The Trust was established as a Massachusetts business trust under a
Declaration
of Trust dated June 14, 1995. The Declaration of Trust permits the
Trust to
offer separate series of shares of beneficial interest representing
interests in
separate portfolios of securities. The shares in any one portfolio
may be
offered in separate classes. As of the date of this prospectus, the
Board of
Trustees (the "Trustees") have established two classes of shares of
the Trust,
known as Institutional Shares and Institutional Service Shares. This
prospectus
relates only to Institutional Service Shares.
Institutional Service Shares ("Shares") are designed primarily for
retail and
private banking customers of financial institutions as a convenient
means of
accumulating an interest in a professionally managed, diversified
portfolio of
U.S. government securities. A minimum initial investment of $25,000
over a
90-day period is required.
Shares are currently sold and redeemed at net asset value without a
sales charge
imposed by the Trust.
INVESTMENT INFORMATION
------------------------------------------------------------------------
--------
INVESTMENT OBJECTIVE
The investment objective of the Trust is to pursue total return
consistent with
current income. The investment objective cannot be changed without
approval of
shareholders. While there is no assurance that the Trust will
achieve its
investment objective, it endeavors to do so by following the investment
policies
described in this prospectus.
INVESTMENT POLICIES
The Trust pursues its investment objective by investing only in
securities which
are guaranteed as to payment of principal and interest by the U.S.
government or
U.S. government agencies or instrumentalities. The Trust will maintain a
dollar
weighted average portfolio maturity between five and ten years,
although the
Trust may purchase individual securities with longer maturities.
Unless
otherwise noted, the investment policies of the Trust may be
changed by the
Trustees without shareholder approval. Shareholders will be notified
before any
material change in these policies becomes effective.
ACCEPTABLE INVESTMENTS. The U.S. government securities in which
the Trust
invests are either issued or guaranteed by the U.S. government, its
agencies, or
instrumentalities. These securities are limited to:
- direct obligations of the U.S. Treasury, such as U.S. Treasury
bills,
notes, and bonds; and
- notes, bonds, and discount notes of U.S. government
agencies or
instrumentalities, such as the: Farm Credit System, including the
National
Bank for Cooperatives, Farm Credit Banks, and Banks for
Cooperatives;
Farmers Home Administration; Federal Home Loan Banks; Federal
Home Loan
Mortgage Corporation; Federal National Mortgage Association;
Government
National Mortgage Association; and Student Loan Marketing
Association.
2
Some obligations issued or guaranteed by agencies or
instrumentalities of the
U.S. government, such as Government National Mortgage Association
participation
certificates, are backed by the full faith and credit of the U.S.
Treasury. No
assurances can be given that the U.S. government will provide financial
support
to other agencies or instrumentalities, since it is not obligated
to do so.
These agencies and instrumentalities are supported by:
- the issuer's right to borrow an amount limited to a specific
line of
credit from the U.S. Treasury;
- discretionary authority of the U.S. government to purchase
certain
obligations of an agency or instrumentality; or
- the credit of the agency or instrumentality.
The prices of fixed income securities fluctuate inversely to the
direction of
interest rates.
REPURCHASE AGREEMENTS. Repurchase agreements are arrangements in
which banks,
broker/dealers, and other recognized financial institutions sell U.S.
government
securities to the Trust 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 Trust, the Trust could receive
less than
the repurchase price on any sale of such securities.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Trust may
purchase
securities on a when-issued or delayed delivery basis. These
transactions are
arrangements in which the Trust purchases securities with payment and
delivery
scheduled for a future time. The seller's failure to complete these
transactions
may cause the Trust to miss a price or yield considered to be
advantageous.
Settlement dates may be a month or more after entering into these
transactions,
and the market values of the securities purchased may vary from the
purchase
prices. Accordingly, the Trust may pay more/less than the market value
of the
securities on the settlement date.
The Trust may dispose of a commitment prior to settlement if the
adviser deems
it appropriate to do so. In addition, the Trust may enter into
transactions to
sell its purchase commitments to third parties at current market
values and
simultaneously acquire other commitments to purchase similar securities
at later
dates. The Trust may realize short-term profits or losses upon the sale
of such
commitments.
INVESTMENT LIMITATIONS
The Trust will not borrow money directly or through reverse
repurchase
agreements (arrangements in which the Trust sells a portfolio
instrument for a
percentage of its cash value with an agreement to buy it back on a set
date) or
pledge securities except, under certain circumstances, the Trust may
borrow up
to one-third of the value of its total assets and pledge securities
to secure
such borrowings.
The above investment limitation cannot be changed without shareholder
approval.
3
TRUST INFORMATION
------------------------------------------------------------------------
--------
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees. The
Trustees
are responsible for managing the Trust's business affairs and for
exercising all
the Trust's powers except those reserved for the shareholders. The
Executive
Committee of the Board of Trustees handles the Board's responsibilities
between
meetings of the Board.
INVESTMENT ADVISER. Investment decisions for the Trust are made by
Federated
Management, the Trust's investment adviser, subject to direction
by the
Trustees. The adviser continually conducts investment research and
supervision
for the Trust and is responsible for the purchase or sale of
portfolio
instruments, for which it receives an annual fee from the Trust.
Both the Trust and the Adviser have adopted strict codes of ethics
governing the
conduct of all employees who manage the Trust and its portfolio
securities.
These codes recognize that such persons owe a fiduciary duty to the
Trust's
shareholders and must place the interests of shareholders ahead
of the
employees' own interest. Among other things, the codes: require
preclearance and
periodic reporting of personal securities transactions; prohibit
personal
transactions in securities being purchased or sold, or being
considered for
purchase or sale, by the Trust; prohibit purchasing securities in
initial public
offerings; and prohibit taking profits on securities held for less
than sixty
days. Violations of the codes are subject to review by the Board of
Trustees,
and could result in severe penalties.
ADVISORY FEES. The Trust's adviser receives an annual investment
advisory
fee equal to .50 of 1% of the Trust's average daily net assets. The
adviser
has also undertaken to reimburse the Trust for operating expenses in
excess
of limitations established by certain states. This does not
include
reimbursement to the Trust of any expenses incurred by shareholders
who use
the transfer agent's subaccounting facilities.
ADVISER'S BACKGROUND. Federated Management, a Delaware
business trust
organized on April 11, 1989, is a registered investment adviser
under the
Investment Advisers Act of 1940. It is a subsidiary of Federated
Investors.
All of the Class A (voting) shares of Federated Investors are
owned by a
trust, the trustees of which are John F. Donahue, Chairman and
Trustee of
Federated Investors, Mr. Donahue's wife, and Mr. Donahue's
son, J.
Christopher Donahue, who is President and Trustee of Federated
Investors.
Federated Management and other subsidiaries of Federated Investors
serve as
investment advisers to a number of investment companies and
private
accounts. Certain other subsidiaries also provide administrative
services to
a number of investment companies. With over $72 billion invested
across more
than 260 funds under management and/or administration by its
subsidiaries,
as of December 31, 1994, Federated Investors is one of the largest
mutual
fund investment managers in the United States. With more
than 1,750
employees, Federated continues to be led by the management who
founded the
company in 1955. Federated funds are presently at work in and
through 4,000
financial institutions nationwide. More than 100,000
investment
professionals have selected Federated funds for their clients.
4
Susan M. Nason has been the Trust's portfolio manager since its
inception.
Ms. Nason joined Federated Investors in 1987 and has been a Vice
President
of the Trust's investment adviser since 1993. Ms. Nason
served as an
Assistant Vice President of the investment adviser from 1990 until
1992, and
from 1987 until 1990 she acted as an investment analyst. Ms.
Nason is a
Chartered Financial Analyst and received her M.B.A. in Finance from
Carnegie
Mellon University.
Joseph M. Balestrino has been the Trust's portfolio manager
since its
inception. Mr. Balestrino, who joined Federated Investors in 1986,
has been
a Vice President of the Trust's investment adviser since July 1,
1995, and
was formerly an Assistant Vice President since 1991. Mr. Balestrino
served
as an Investment Analyst of the investment adviser from 1989 until
1991, and
from 1986 until 1989 he acted as Project Manager in the Product
Development
Department. Mr. Balestrino is a Chartered Financial Analyst and
received his
M.A. in Urban and Regional Planning from the University of
Pittsburgh.
EXPENSES OF THE TRUST AND INSTITUTIONAL SERVICE SHARES
Holders of Shares pay their allocable portion of Trust expenses.
The Trust
expenses for which holders of Shares pay their allocable portion
include, but
are not limited to: the cost of organizing the Trust and
continuing its
existence; registering the Trust with federal and state securities
authorities;
Trustees fees; auditors' fees; the cost of meetings of Trustees; legal
fees of
the Trust; association membership dues; and such non-recurring and
extraordinary
items as may arise from time to time.
The portfolio expenses for which holders of Shares pay their allocable
portion
include, but are not limited to: registering the portfolio and Shares
of the
portfolio; 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 allocated to the Shares as a class are
expenses
under the Trust's Shareholder Services Agreement and the Trust's
Distribution
Plan which relate to the Shares. However, the Board of Trustees
reserves the
right to allocate certain other expenses to holders of shares as
it deems
appropriate ("Class Expenses"). In any case, Class Expenses would be
limited to:
transfer agent fees as identified by the transfer agent as
attributable to
holders of Shares; printing and postage expenses related to
preparing and
distributing materials such as shareholder reports, prospectuses and
proxies to
current shareholders; registration fees paid to the Securities and
Exchange
Commission and registration fees paid to state securities commissions;
expenses
related to administrative personnel and services as required to support
holders
of Shares; legal fees relating solely to Shares; and Trustees' fees
incurred as
a result of issues relating solely to Shares.
DISTRIBUTION OF INSTITUTIONAL SERVICE SHARES
Federated Securities Corp. is the principal distributor for the Shares.
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 AND SHAREHOLDER SERVICES. Under a distribution plan
adopted
in accordance with Investment Company Act Rule 12b-1 (the "Distribution
Plan"),
the Trust may pay to the distributor an amount, computed at an annual
rate of
0.25 of 1.00% of the average daily net asset
value of
5
Shares, to finance any activity which is principally intended to
result in the
sale of Shares subject to the Distribution Plan. The distributor may
select
financial institutions such as banks, fiduciaries, custodians for
public funds,
investment advisers, and broker/dealers to provide sales
services or
distribution-related support services as agents for their clients or
customers.
The Distribution Plan is a compensation-type plan. As such, the Trust
makes no
payments to the distributor except as described above. Therefore, the
Trust does
not pay for unreimbursed expenses of the distributor, including amounts
expended
by the distributor in excess of amounts received by it from the Trust,
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 Trust
under the Distribution Plan.
In addition, the Trust has entered into a Shareholder Services
Agreement with
Federated Shareholder Services, a subsidiary of Federated Investors,
under which
the Trust may make payments up to 0.25 of 1.00% of the average daily
net asset
value of the Trust to obtain certain personal services for
shareholders and to
maintain shareholder accounts ("Shareholder Services"). Under the
Shareholder
Services Agreement, Federated Shareholder Services will either
perform
Shareholder Services directly or will select financial institutions to
perform
Shareholder Services. Financial institutions will receive fees based
upon shares
owned by their clients or customers. The schedules of such fees and
the basis
upon which fees will be paid will be determined from time to time by
the Trust
and Federated Shareholder Services.
In addition to payments made pursuant to the Distribution Plan and
Shareholder
Services Agreement, Federated Securities Corp. and Federated
Shareholder
Services, from their own assets, may pay financial institutions
for the
performance of sales services, distribution-related support
services, or
Shareholder Services.
The Glass-Steagall Act prohibits a depository institution (such as a
commercial
bank or savings association) from being an underwriter or distributor
of most
securities. In the event the Glass-Steagall Act is deemed to prohibit
depository
institutions from acting in the capacities described above or should
Congress
relax current restrictions on depository institutions, the
Trustees will
consider appropriate changes in the 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 laws.
The distributor may, from time to time and for such periods as
it deems
appropriate, voluntarily reduce its compensation under the Plans.
OTHER PAYMENTS TO FINANCIAL INSTITUTIONS. In addition to periodic
payments to
financial institutions under the Distribution Plan and Shareholder
Services
Agreement, certain financial institutions may be compensated by the
Adviser or
its affiliates for the continuing investment of customers' assets in
certain
funds, including the Trust, advised by those entities. These payments
will be
made directly by the distributor or Adviser from their assets, and will
not be
made from the assets of the Trust or by the assessment of a sales
load on
Shares.
6
ADMINISTRATION OF THE TRUST
ADMINISTRATIVE SERVICES. Federated Administrative Services, a
subsidiary of
Federated Investors, provides administrative personnel and services
(including
certain legal and financial reporting services) necessary to operate the
Trust.
Federated Administrative Services provides these at an annual rate which
relates
to the average aggregate daily net assets of all funds advised by
subsidiaries
of Federated Investors ("Federated Funds") as specified below:
<TABLE>
<CAPTION>
MAXIMUM AVERAGE AGGREGATE DAILY NET ASSETS
ADMINISTRATIVE FEE OF THE FEDERATED FUNDS
-------------------- ------------------------------------
<C> <S>
0.15 of 1% on the first $250 million
0.125 of 1% on the next $250 million
0.10 of 1% on the next $250 million
0.075 of 1% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be
at least
$125,000 per portfolio and $30,000 per each additional class of
shares.
Federated Administrative Services may choose voluntarily to waive a
portion of
its fee.
CUSTODIAN. State Street Bank and Trust Company ("State Street Bank"),
Boston,
Massachusetts, is custodian for the securities and cash of the Trust.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated Services
Company,
Pittsburgh, Pennsylvania is transfer agent for the shares of the
Trust and
dividend disbursing agent for the Trust.
INDEPENDENT AUDITORS. The independent auditors for the Trust are Ernst
& Young
LLP, Pittsburgh, Pennsylvania 15219.
NET ASSET VALUE
------------------------------------------------------------------------
--------
The Trust's net asset value per share fluctuates. The net asset value
for Shares
is determined by adding the interest of the Shares in the market
value of all
securities and other assets of the Trust, subtracting the interest of
the Shares
in the liabilities of the Trust and those attributable to Shares, and
dividing
the remainder by the total number of Shares outstanding. The net asset
value of
Institutional Shares may exceed that of Institutional Service 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 INSTITUTIONAL SERVICE SHARES
------------------------------------------------------------------------
--------
SHARE PURCHASES
Shares are sold on days on which the New York Stock Exchange is
open for
business. Shares may be purchased either by wire or mail.
7
To purchase Shares, open an account by calling Federated
Securities Corp.
Information needed to establish an account will be taken over the
telephone. The
Trust reserves the right to reject any purchase request.
BY WIRE. To purchase Shares by Federal Reserve wire, call the Trust
before 4:00
p.m. (Eastern time) to place an order. The order is considered
received
immediately. Payment by federal wire funds must be received before
3:00 p.m.
(Eastern time) on the next business day following the order.
Federal funds
should be wired as follows: Federated Services Company c/o State Street
Bank and
Trust Company, Boston, Massachusetts; Attention: EDGEWIRE; For
Credit to:
Federated U.S. Government Securities Fund: 5-10 Years--Institutional
Service
Shares; Trust Number (this number can be found on the account
statement or by
contacting the Trust); Group Number or Wire Order Number; Nominee or
Institution
Name; and ABA Number 011000028.
BY MAIL. To purchase Shares by mail, send a check made payable to
Federated
U.S. Government Securities Fund: 5-10 Years--Institutional Service
Shares to
Federated Services Company, P.O. Box 8600, Boston, Massachusetts
02266-8600.
Orders by mail are considered received after payment by check is
converted by
the transfer agent's bank, State Street Bank, into federal funds.
This is
generally the next business day after State Street Bank receives the
check.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment in Shares is $25,000. However, an account
may be
opened with a smaller amount as long as the $25,000 minimum is reached
within 90
days. An institutional investor's minimum investment will be
calculated by
combining all accounts it maintains with the Trust. Accounts established
through
a non-affiliated bank or broker may be subject to a smaller minimum
investment.
WHAT SHARES COST
Shares are sold at their net asset value next determined after an
order is
received. There is no sales charge imposed by the Trust. Investors who
purchase
Shares through a non-affiliated bank or broker may be charged an
additional
service fee by that bank or broker.
The net asset value is determined as of the close of trading
(normally 4:00
p.m., Eastern time) on the New York Stock Exchange, Monday through
Friday,
except on (i) days on which there are not sufficient changes in the
value of the
Trust's portfolio securities such that its net asset value might be
materially
affected; (ii) days during which no Shares are tendered for redemption
and no
orders to purchase Shares are received; and (iii) the following
holidays: New
Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor
Day, Thanksgiving Day and Christmas Day.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Trust, Federated Services Company maintains
a share
account for each shareholder. Share certificates are not issued unless
requested
by contacting the Trust.
Detailed confirmations of each purchase or redemption are sent
to each
shareholder. Monthly confirmations are sent to report dividends paid
during the
month.
8
DIVIDENDS
Dividends are declared daily and paid monthly. Dividends are declared
just prior
to determining net asset value. If an order for Shares is placed
on the
preceding business day, Shares purchased by wire begin earning
dividends on the
business day wire payment is received by State Street Bank. If the
order for
Shares and payment by wire are received on the same day, Shares begin
earning
dividends on the next business day. Shares purchased by check begin
earning
dividends on the business day after the check is converted by the
transfer agent
into federal funds. Dividends are automatically reinvested on payment
dates in
additional Shares unless cash payments are requested by contacting the
Trust.
CAPITAL GAINS
Capital gains realized by the Trust, if any, will be distributed at
least once
every 12 months.
REDEEMING INSTITUTIONAL SERVICE SHARES
------------------------------------------------------------------------
--------
The Trust redeems Shares at their net asset value next determined
after the
Trust receives the redemption request. Redemptions will be made on days
on which
the Trust computes its net asset value. Redemption requests must be
received in
proper form and can be made by telephone request or by written request.
TELEPHONE REDEMPTION
Shareholders may redeem their Shares by telephoning the Trust before
4:00 p.m.
(Eastern time). Telephone redemption instructions may be recorded. All
proceeds
will normally be wire transferred the following business day, but in
no event
more than seven days, to the shareholder's account at a domestic
commercial bank
that is a member of the Federal Reserve System. If at any time the
Trust shall
determine it necessary to terminate or modify this method of
redemption,
shareholders would be promptly notified.
An authorization form permitting the Trust to accept telephone
requests must
first be completed. Authorization forms and information on this
service are
available from Federated Securities Corp.
In the event of drastic economic or market changes, a shareholder may
experience
difficulty in redeeming by telephone. If such a case should occur,
another
method of redemption, such as written requests, should be
considered. If
reasonable procedures are not followed by the Trust, it may be liable
for losses
due to unauthorized or fraudulent telephone instructions.
WRITTEN REQUESTS
Shares may also be redeemed by sending a written request to the Trust.
Call the
Trust for specific instructions before redeeming by letter. The
shareholder will
be asked to provide in the request his name, the Trust name and class
of shares
name, his account number, and the share or dollar amount requested.
If share
certificates have been issued, they must be properly endorsed and should
be sent
by registered or certified mail to Federated Services Company, 500
Victory
Road-2nd Floor, Quincy, Massachusetts, 02171 with the written request.
9
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 Trust, or a redemption payable other than to the shareholder of
record must
have signatures on written redemption requests guaranteed by:
- a trust company or commercial bank whose deposits are insured by
the Bank
Insurance Fund, which is administered by the Federal Deposit
Insurance
Corporation ("FDIC");
- a member of the New York, American, Boston, Midwest, or
Pacific Stock
Exchange;
- a savings bank or savings and loan association whose deposits are
insured
by the Savings Association Insurance Fund, which is administered
by the
FDIC; or
- any other "eligible guarantor institution," as defined in the
Securities
Exchange Act of 1934.
The Trust does not accept signatures guaranteed by a notary public.
The Trust and its transfer agent have adopted standards for accepting
signature
guarantees from the above institutions. The Trust may elect in the
future to
limit eligible signature guarantors to institutions that are
members of a
signature guarantee program. The Trust and its transfer agent reserve
the right
to amend these standards at any time without notice.
RECEIVING PAYMENT. Normally, a check for the proceeds is mailed
within one
business day, but in no event more than seven days, after receipt of
a proper
written redemption request.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the
Trust may
redeem Shares in any account and pay the proceeds to the
shareholder if the
account balance falls below a required minimum value of
$25,000. This
requirement does not apply, however, if the balance falls below $25,000
because
of changes in the Trust'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.
SHAREHOLDER INFORMATION
------------------------------------------------------------------------
--------
VOTING RIGHTS
Each share of the Trust gives the shareholder one vote in Trustee
elections and
other matters submitted to shareholders for vote. All shares of all
classes of
each portfolio in the Trust have equal voting rights except that in
matters
affecting only a particular portfolio or class, only shares of that
portfolio or
class are entitled to vote. As a Massachusetts business trust, the
Trust is not
required to hold annual shareholder meetings. Shareholder approval
will be
sought only for certain changes in the Trust's operation and for the
election of
Trustees under certain circumstances.
Trustees may be removed by the Trustees or by shareholders at a special
meeting.
A special meeting of the shareholders for this purpose shall be
called by the
Trustees upon the written request of shareholders owning at least 10%
of the
outstanding shares of the Trust entitled to vote.
10
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally
liable as
partners under Massachusetts law for obligations of the Trust. To
protect the
shareholders of the Trust, the Trust has filed legal
documents with
Massachusetts that expressly disclaim the liability of its shareholders
for such
acts or obligations of the Trust. These documents require notice
of this
disclaimer to be given in each agreement, obligation, or instrument
that the
Trust or its Trustees enter into or sign on behalf of the Trust.
In the unlikely event a shareholder is held personally liable for the
Trust's
obligations, the Trust is required to use its property to protect or
compensate
the shareholder. On request, the Trust will defend any claim made and
pay any
judgment against a shareholder for any act or obligation of
the Trust.
Therefore, financial loss resulting from liability as a shareholder
will occur
only if the Trust itself cannot meet its obligations to indemnify
shareholders
and pay judgments against them from its assets.
TAX INFORMATION
------------------------------------------------------------------------
--------
FEDERAL INCOME TAX
The Trust will pay no federal income tax because it expects to meet
requirements
of the Internal Revenue Code applicable to regulated investment
companies and to
receive the special tax treatment afforded to such companies.
Unless otherwise exempt, shareholders are required to pay federal income
tax on
any dividends and other distributions received. This applies whether
dividends
and distributions are received in cash or as additional shares.
PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES
In the opinion of Houston, Houston & Donnelly, counsel to the Trust:
- the Trust is not subject to Pennsylvania corporate or personal
property
taxes; and
- Trust shares may be subject to personal property taxes
imposed by
counties, municipalities, and school districts in Pennsylvania
to the
extent that the portfolio securities in the Trust would be subject
to such
taxes if owned directly by residents of those jurisdictions.
Shareholders are urged to consult their own tax advisers regarding the
status of
their accounts under state and local tax laws.
PERFORMANCE INFORMATION
------------------------------------------------------------------------
--------
From time to time, the Trust advertises its total return and yield for
Shares.
Total return represents the change, over a specified period of
time, in the
value of an investment in Shares of the Trust 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.
11
The yield of Shares of the Trust is calculated by dividing the net
investment
income per share (as defined by the Securities and Exchange
Commission) earned
by Shares over a thirty-day period by the maximum offering price per
share of
Shares on the last day of the period. This number is then
annualized using
semi-annual compounding. The yield does not necessarily reflect income
actually
earned by Shares and, therefore, may not correlate to the dividends
or other
distributions paid to shareholders.
The Trust is sold without any sales charge or other similar non-
recurring
charges.
Total return and yield will be calculated separately for
Institutional Shares
and Institutional Service Shares.
From time to time, advertisements for the Trust may refer to ratings,
rankings,
and other information in certain financial publications and/or
compare the
Trust's performance to certain indices.
OTHER CLASSES OF SHARES
------------------------------------------------------------------------
--------
The Trust also offers another class of shares called Institutional
Shares.
Institutional Shares are sold at net asset value primarily to accounts
for which
financial institutions act in a fiduciary or agency capacity, or other
accounts
where the financial institution maintains master accounts with an
aggregate
investment of at least $400 million in certain funds which are
advised or
distributed by affiliates of Federated Investors. Institutional Shares
are also
made available to financial intermediaries, as well as private
and public
organizations and are subject to a minimum initial investment of
$25,000.
Institutional Shares and Institutional Service Shares are subject to
certain of
the same expenses; however, Institutional Service Shares are distributed
under a
12b-1 Plan adopted by the Trust. This, plus other expense differences
between
Institutional Shares and Institutional Service Shares, may
affect the
performance of each class.
To obtain more information and a prospectus for Institutional Shares,
investors
may call 1-800-235-4669.
12
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 5, 1995
------------------------------------------------------------------------
--------
<TABLE>
<S>
<C>
ASSETS:
------------------------------------------------------------------------
--------
Cash
$100,000
------------------------------------------------------------------------
-------- --------
LIABILITIES:
--
------------------------------------------------------------------------
-------- --------
NET ASSETS for 10,000 shares outstanding
$100,000
------------------------------------------------------------------------
-------- --------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
($100,000 DIVIDED BY 10,000 shares outstanding)
$ 10.00
------------------------------------------------------------------------
-------- --------
<FN>
NOTES:
(1) Federated U.S. Government Securities Fund: 5-10 Years (the
"Trust") was
established as a Massachusetts business trust under a Declaration
of Trust
dated June 14, 1995, and has no operations since that date other
than those
relating to organization matters, including the issuance on
September 5,
1995, of 10,000 shares at $10.00 per share to Federated
Administrative
Services, the Administrator of the Trust. Expenses of organization
incurred
by the Trust, estimated at $35,000 were borne initially
by the
Administrator. The Trust has agreed to reimburse the Administrator
for the
organizational expenses and start-up administrative expenses
during the
five year period following date the Trust first became effective.
(2) Reference is made to "Management of the Trust", "Administration
of the
Trust" and "Tax Information" in this Prospectus for a
description of the
investment advisory fee, administration and other services
and other
federal tax aspects of the Trust.
</TABLE>
13
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
---------------------------------------------------------
To the Board of Trustees and Shareholders of
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS:
We have audited the accompanying statement of assets and
liabilities of
Federated U.S. Government Securities Fund: 5-10 Years as of September
5, 1995.
This statement of assets and liabilities is the responsibility of
the Fund's
management. Our responsibility is to express an opinion on this
statement of
assets and liabilities based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards.
Those standards require that we plan and perform the audit to obtain
reasonable
assurance about whether the statement of assets and liabilities is
free of
material misstatement. An audit includes examining, on a test basis,
evidence
supporting the amounts and disclosures in the statement of
assets and
liabilities. An audit also includes assessing the accounting principles
used and
significant estimates made by management, as well as evaluating the
overall
statement of assets and liabilities presentation. We believe that
our audit
provides a reasonable basis for our opinion.
In our opinion, the statement of assets and liabilities presents
fairly, in all
material respects, the net assets of the Federated U.S. Government
Securities
Fund: 5-10 Years as of September 5, 1995, in conformity with generally
accepted
accounting principles.
ERNST & YOUNG LLP
Pittsburgh, Pennsylvania
September 6, 1995
14
ADDRESSES
------------------------------------------------------------------------
--------
<TABLE>
<S> <C>
Federated U.S. Government Securities Fund: 5-10 Years
Institutional Service Shares
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
------------------------------------------------------------------------
-------------------
Distributor
Federated Securities Corp.
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
------------------------------------------------------------------------
-------------------
Investment Adviser
Federated Management
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
------------------------------------------------------------------------
-------------------
Custodian
State Street Bank and Trust Company P.O.
Box 8600
Boston,
Massachusetts 02266-8600
------------------------------------------------------------------------
-------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company P.O.
Box 8600
Boston,
Massachusetts 02266-8600
------------------------------------------------------------------------
-------------------
Independent Auditors
Ernst & Young LLP One
Oxford Centre
Pittsburgh, Pennsylvania 15219
------------------------------------------------------------------------
-------------------
</TABLE>
15
------------------------------------------------------------------------
--------
FEDERATED U.S.
GOVERNMENT SECURITIES
FUND: 5-10 YEARS
INSTITUTIONAL SERVICE SHARES
PROSPECTUS
An Open-End, Diversified Management
Investment Company
Prospectus dated , 1995
[LOGO] FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
G01209-04-SS [RECYCLED PAPER LOGO]
Federated U.S. Government Securities Fund: 5-10 Years
Institutional Shares
Institutional Service Shares
Combined Statement of Additional Information
The Institutional Shares and Institutional Service Shares represent
interests in a diversified portfolio of securities of Federated
U.S. Government Securities Fund: 5-10 Years (the "Trust"). This
Combined Statement of Additional Information should be read with
the respective prospectuses for Institutional Shares and
Institutional Service Shares dated ______, 1995. This Statement is
not a prospectus itself. To receive a copy of either prospectus,
write or call the Trust.
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Statement dated _______, 1995
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
General Information About The Brokerage Transactions 9
Trust 1 Purchasing Shares 10
Investment Objective And Policies1 Distribution Plan
Types Of Investments 1 (Institutional Service Shares
When-Issued And Delayed only) and Shareholder Services
Delivery Transactions 1 Agreement 10
Repurchase Agreements 1
Reverse Repurchase Agreements 1 Conversion To Federal Funds 10
Portfolio Turnover 2 Determining Net Asset Value 10
Investment Limitations 2 Determining Market Value Of
Federated U. S. Government Securities 10
Securities Fund: 5-10 Years Redeeming Shares 11
Management 3 Redemption In Kind 11
The Funds 7 Tax Status 11
Trust Ownership 7 The Trust's Tax Status 11
Trustee Liability 8 Shareholders' Tax Status 11
Total Return 12
Trustees' Compensation 8 Yield 12
Performance Comparisons 12
Investment Advisory Services 9 Duration 13
Adviser To The Trust 9 About Federated Investors 13
Advisory Fees 9 Mutual Fund Market 13
Trust Administration 9
Transfer Agent And Dividend
Disbursing Agent 9
General Information About The Trust
Federated U.S. Government Securities Fund: 5-10 Years was established
as a Massachusetts business trust under a Declaration of Trust dated
June 14, 1995.
Shares of the Trust are offered in two classes, known as Institutional
Shares and Institutional Service Shares (individually and collectively
referred to as "Shares," as the context may require). This Combined
Statement of additional information relates to the above mentioned
Shares of the Trust.
Investment Objective And Policies
The Trust's investment objective is to pursue total return consistent
with current income. The investment objective may not be changed by the
Board of Trustees ("Trustees") without shareholder approval.
Types Of Investments
The Trust invests only in U.S. government securities. Unless indicated
otherwise, the investment policies of the Trust may be changed without
shareholder approval. Shareholders will not be notified before any
material change in the policies becomes effective.
When-Issued And Delayed Delivery Transactions
These transactions are made to secure what is considered to be an
advantageous price or yield for the Trust. No fees or other expenses,
other than normal transaction costs, are incurred. However, liquid
assets of the Trust sufficient to make payment for the securities to be
purchased are segregated on the Trust's records at the trade date. These
assets are marked to market daily and are maintained until the
transaction has been settled. The Trust does not intend to engage in
when-issued and delayed delivery transactions to an extent that would
cause the segregation of more than 20% of the total value of its assets.
Repurchase Agreements
The Trust requires its custodian to take possession of the securities
subject to repurchase agreements, and these securities are marked to
market daily. To the extent that the original seller does not repurchase
the securities from the Trust, the Trust 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 Trust might be delayed pending
court action. The Trust believes that under the regular procedures
normally in effect for custody of the Trust's portfolio securities
subject to repurchase agreements, a court of competent jurisdiction
would rule in favor of the Trust and allow retention or disposition of
such securities. The Trust will only enter into repurchase agreements
with banks and other recognized financial institutions such as
broker/dealers which are deemed by the Trust's adviser to be
creditworthy pursuant to guidelines established by the Trustees.
Reverse Repurchase Agreements
The Trust may also enter into reverse repurchase agreements. These
transactions are similar to borrowing cash. In a reverse repurchase
agreement, the Trust transfers possession of a portfolio instrument to
another person, such as a financial institution, broker, or dealer, in
return for a percentage of the instrument's market value in cash, and
agrees that on a stipulated date in the future the Trust will repurchase
the portfolio instrument by remitting the original consideration plus
interest at an agreed upon rate. The use of reverse repurchase
agreements my enable the Trust to avoid selling portfolio instruments at
a time when a sale may be deemed to be disadvantageous, but the ability
to enter into reverse repurchase agreements does not ensure that the
Trust will be able to avoid selling portfolio instruments at a
disadvantageous time.
Lending of Portfolio Securities
In order to generate additional income, the Trust may lend portfolio
securities on a short-term basis to broker/dealers, banks, or other
institutional borrowers of securities. The Trust will only enter into
loan arrangements with broker/dealers, banks, or other institutions
which the Trust's investment adviser has determined are creditworthy and
will receive collateral in the form of cash or U.S. government
securities equal to at least 102% of the value of the securities loaned.
There is the risk that when lending portfolio securities, the securities
may not be available to the Trust on a timely basis and the Trust may,
therefore, lose the opportunity to sell the securities at a desirable
price. In addition, in the event that a borrower of securities would
file for bankruptcy or become insolvent, disposition of the securities
may be delayed pending court action.
The collateral received when the Trust 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 Trust.
During the time portfolio securities are on loan, the borrower pays the
Trust any dividends or interest paid on such securities. Loans are
subject to termination at the option of the Trust or the borrower. The
Trust 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 Trust does not have the right to vote securities on loan. In
circumstances where the Trust does not, the Trust would terminate the
loan and regain the right to vote if that were considered important with
respect to the investment.
Portfolio Turnover
The Trust may trade or dispose of portfolio securities as considered
necessary to meet its investment objective. It is not anticipated that
the portfolio trading engaged in by the Trust will result in its annual
rate of portfolio turnover exceeding 100%.
Investment Limitations
Selling Short and Buying on Margin
The Trust will not sell any securities short or purchase any
securities on margin but may obtain such short-term credits as may
be necessary for clearance of transactions.
Issuing Senior Securities and Borrowing Money
The Trust will not issue senior securities, except that the Trust
may borrow money directly or through reverse repurchase agreements
in amounts up to one-third of the value of its total assets,
including the amounts borrowed.
The Trust will not borrow money or engage in reverse repurchase
agreements for investment leverage, but rather as a temporary,
extraordinary, or emergency measure or to facilitate management of
the portfolio by enabling the Trust to meet redemption requests
when the liquidation of portfolio securities is deemed to be
inconvenient or disadvantageous. The Trust will not purchase any
securities while borrowings in excess of 5% of its total assets are
outstanding.
Pledging Assets
The Trust will not mortgage, pledge, or hypothecate any assets
except to secure permitted borrowings.
Investing in Real Estate
The Trust will not purchase or sell real estate, including limited
partnership interests, although it may invest in the securities of
companies whose business involves the purchase or sale of real
estate or in securities which are secured by real estate or
interests in real estate.
Investing in Commodities
The Trust will not purchase or sell commoditites, commodity
contracts, or commodity futures contracts.
Diversification of Investments
With respect to securities comprising 75% of the value of its total
assets, the Trust will not purchase securities issued by 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 and repurchase agreements collateralized by
such securities) if, as a result, more than 5% of the value of its
total assets would be invested in the securities of that issuer or
if it would own more than 10% of the outstanding voting securities
of any one issuer.
Lending Cash or Securities
The Trust will not lend any of its assets, except portfolio
securities. This shall not prevent the Trust from purchasing or
holding money market instruments, repurchase agreements,
obligations of the U.S. government, its agencies or
instrumentalities, or certain debt instruments as permitted by its
investment objective, policies, and limitations or the Trust's
Declaration of Trust.
The above investment limitations cannot be changed without shareholder
approval. The following limitations, however, may be changed by the
Trustees without shareholder approval. Shareholders will be notified
before any material change in these limitations becomes effective.
Investing in Illiquid Securities
The Trust will not invest more than 15% of the value of its net assets
in illiquid securities, including repurchase agreements providing for
settlement in more than seven days after notice, and certain securities
not determined by the Trustees to be liquid.
Investing in Minerals
The Trust will not purchase interests in oil, gas, or other mineral
exploration or development programs or leases, except it may invest
in the securities of issuers which invest in or sponsor such
programs.
Investing in New Issuers
The Trust 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 Issuers Whose Securities Are Owned by Officers and
Trustees of the Trust
The Trust will not purchase or retain the securities of any issuer
if the Officers and Trustees of the Trust or the Trust's 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.
Purchasing Securities to Exercise Control
The Trust will not purchase securities of a company for purpose of
exercising control or management.
Dealing in Puts and Calls
The Trust will not buy or sell puts, calls, straddles, spreads, or
any combination of these.
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 Trust does not intend to borrow money or pledge securities in excess
of 5% of the value of its net assets during the coming fiscal year. For
purposes of its policies and limitations, the Trust considers
certificates of deposit and demand and time deposits issued by a U.S.
branch of a domestic bank or savings and loan having capital, surplus,
and undivided profits in excess of $100,000,000 at the time of
investment to be "cash items."
Federated U. S. Government Securities Fund: 5-10 Years Management
Officers and Trustees are listed with their addresses, birthdates,
principal occupations during the past five years, and present positions,
including any affiliation with Federated Management, Federated
Investors, Federated Securities Corp., Federated Administrative
Services, Federated Shareholder Services, and Federated Services
Company.
John F. Donahue@*
Federated Investors Tower
Pittsburgh, PA
Birthdate: July 28, 1924
Chairman and Trustee
Chairman and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; Chairman and Director, Federated
Research Corp.; Chairman, Passport Research, Ltd.; Director, AEtna Life
and Casualty Company; Chief Executive Officer and Director, Trustee, or
Managing General Partner of the Funds.
Mr. Donahue is the father of J. Christopher Donahue, Executive Vice
President of the Trust.
Thomas G. Bigley
28th Floor, One Oxford Centre
Pittsburgh, PA
Birthdate: February 3, 1934
Trustee
Director, Oberg Manufacturing Co.; Chairman of the Board, Children's
Hospital of Pittsburgh; Director, Trustee, or Managing General Partner
of the Funds; formerly, Senior Partner, Ernst & Young LLP.
John T. Conroy, Jr.
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL
Birthdate: June 23, 1937
Trustee
President, Investment Properties Corporation; Senior Vice-President,
John R. Wood and Associates, Inc., Realtors; President, Northgate
Village Development Corporation; Partner or Trustee in private real
estate ventures in Southwest Florida; Director, Trustee, or Managing
General Partner of the Funds; formerly, President, Naples Property
Management, Inc.
William J. Copeland
One PNC Plaza - 23rd Floor
Pittsburgh, PA
Birthdate: July 4, 1918
Trustee
Vice Chairman and Director, PNC Bank, N.A., and PNC Bank Corp. and
Director, Ryan Homes, Inc.
James E. Dowd
571 Hayward Mill Road
Concord, MA
Birthdate: May 18, 1922
Trustee
Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director,
Trustee, or Managing General Partner of the Funds; formerly, Director,
Blue Cross of Massachusetts, Inc.
Lawrence D. Ellis, M.D. *
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA
Birthdate: October 11, 1932
Trustee
Professor of Medicine and Member, Board of Trustees, University of
Pittsburgh; Medical Director, University of Pittsburgh Medical Center -
Downtown; Member, Board of Directors, University of Pittsburgh Medical
Center; formerly, Hematologist, Oncologist, and Internist, Presbyterian
and Montefiore Hospitals; Director, Trustee, or Managing General Partner
of the Funds.
Edward L. Flaherty, Jr.@
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: June 18, 1924
Trustee
Attorney-at-law; Partner, Henny, Kochuba, Meyer and Flaherty; Director,
Eat'N Park Restaurants, Inc., and Statewide Settlement Agency, Inc.;
Director, Trustee, or Managing General Partner of the Funds; formerly,
Counsel, Horizon Financial, F.A., Western Region.
Peter E. Madden
225 Franklin Street
Boston, MA
Birthdate: April 16, 1942
Trustee
Consultant; State Representative, Commonwealth of Massachusetts;
Director, Trustee, or Managing General Partner of the Funds; formerly,
President, State Street Bank and Trust Company and State Street Boston
Corporation and Trustee, Lahey Clinic Foundation, Inc.
Gregor F. Meyer
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: October 6, 1926
Trustee
Attorney-at-law; Partner, Henny, Kochuba, Meyer and Flaherty; Chairman,
Meritcare, Inc.; Director, Eat'N Park Restaurants, Inc.; Director,
Trustee, or Managing General Partner of the Funds; formerly, Vice
Chairman, Horizon Financial, F.A.
John E. Murray, Jr., J.D., S.J.D.
President, Duquesne University
Pittsburgh, PA
Birthdate: December 20, 1932
Trustee
President, Law Professor, Duquesne University; Consulting Partner,
Mollica, Murray and Hogue; Director, Trustee or Managing General Partner
of the Funds.
Wesley W. Posvar
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA
Birthdate: September 14, 1925
Trustee
Professor, Foreign Policy and Management Consultant; Trustee, Carnegie
Endowment for International Peace, RAND Corporation, Online Computer
Library Center, Inc., and U.S. Space Foundation; Chairman, Czecho Slovak
Management Center; Director, Trustee, or Managing General Partner of the
Funds; President Emeritus, University of Pittsburgh; founding ,
Chairman, National Advisory Council for Environmental Policy and
Technology, and Federal Emergency Management Advisory Board.
Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA
Birthdate: July 21, 1935
Trustee
Public relations/marketing consultant; Director, Trustee, or Managing
General Partner of the Funds.
Glen R. Johnson
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 2, 1929
President
Trustee, Federated Investors; President and/or Trustee of some of the
Funds; staff member, Federated Securities Corp. and Federated
Administrative Services.
J. Christopher Donahue
Federated Investors Tower
Pittsburgh, PA
Birthdate: April 11, 1949
Executive Vice President
President and Trustee, Federated Investors, Federated Advisers,
Federated Management, and Federated Research; President and Director,
Federated Research Corp.; President, Passport Research, Ltd.; Trustee,
Federated Administrative Services, Federated Services Company, and
Federated Shareholder Services; President or Vice President of the
Funds; Director, Trustee, or Managing General Partner of some of the
Funds. Mr. Donahue is the son of John F. Donahue, Chairman and Trustee
of the Trust.
Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 17, 1923
Vice President
Executive Vice President and Trustee, Federated Investors; Director,
Federated Research Corp.; Chairman and Director, Federated Securities
Corp.; President or Vice President of some of the Funds; Director or
Trustee of some of the Funds.
Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
Executive Vice President
Vice President, Treasurer, and Trustee, Federated Investors; Vice
President and Treasurer, Federated Advisers, Federated Management,
Federated Research, Federated Research Corp., and Passport Research,
Ltd.; Executive Vice President, Treasurer, and Director, Federated
Securities Corp.; Trustee, Federated Services Company and Federated
Shareholder Services; Chairman, Treasurer, and Trustee, Federated
Administrative Services; Trustee or Director of some of the Funds;
Executive Vice President or President of the Funds.
John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 26, 1938
Executive Vice President and Secretary
Vice President, Secretary, General Counsel, and Trustee, Federated
Investors; Vice President, Secretary, and Trustee, Federated Advisers,
Federated Management, and Federated Research; Vice President and
Secretary, Federated Research Corp. and Passport Research, Ltd.;
Trustee, Federated Services Company; Executive Vice President,
Secretary, and Trustee, Federated Administrative Services; Secretary and
Trustee, Federated Shareholder Services; Executive Vice President and
Director, Federated Securities Corp.; Vice President and Secretary of
the Funds.
David M. Taylor*
Federated Investors Tower
Pittsburgh, PA
Birthdate: January 13, 1947
Treasurer
Senior Vice President, Controller, and Trustee, Federated Investors;
Controller, Federated Advisers, Federated Management, Federated
Research, Federated Research Corp., and Passport Research, Ltd.; Senior
Vice President, Federated Shareholder Services; Senior Vice President,
Federated Administrative Services; Treasurer of the Funds.
*This Trustee is deemed to be an "interested person" as defined in the
Investment Company Act of 1940, as amended.
@Member of the Executive Committee. The Executive Committee of the Board
of Trustees handles the responsibilities of the Board of Trustees
between meetings of the Board.
The Funds
As used in the table above, "The Funds" and "Funds" mean the following
investment companies: American Leaders Fund, Inc.; Annuity Management
Series; Arrow Funds; Automated Government Money Trust; Cash Trust Series
II; Cash Trust Series, Inc.; DG Investor Series; Edward D. Jones & Co.
Daily Passport Cash Trust; Federated ARMs Fund; Federated Exchange Fund,
Ltd.; Federated GNMA Trust; Federated Government Trust; Federated Growth
Trust; Federated High Yield Trust; Federated Income Securities Trust;
Federated Income Trust; Federated Index Trust; Federated Institutional
Trust; Federated Intermediate Government Trust; Federated Master Trust;
Federated Municipal Trust; Federated Short-Term U.S. Government Trust;
Federated Stock Trust; Federated Tax-Free Trust; Federated U.S.
Government Bond Fund; Federated U.S. Government Securities Fund: 1-3
Years; First Priority Funds; Fixed Income Securities, Inc.; Fortress
Adjustable Rate U.S. Government Fund, Inc.; Fortress Municipal Income
Fund, Inc.; Fortress Utility Fund, Inc.; Fund for U.S. Government
Securities, Inc.; Government Income Securities, Inc.; High Yield Cash
Trust; Insight Institutional Series, Inc.; Insurance Management Series;
Intermediate Municipal Trust; International Series, Inc.; Investment
Series Funds, Inc.; Investment Series Trust; Liberty Equity Income Fund,
Inc.; Liberty High Income Bond Fund, Inc.; Liberty Municipal Securities
Fund, Inc.; Liberty U.S. Government Money Market Trust; Liberty Term
Trust, Inc. - 1999; Liberty Utility Fund, Inc.; Liquid Cash Trust;
Managed Series Trust; Money Market Management, Inc.; Money Market
Obligations Trust; Money Market Trust; Municipal Securities Income
Trust; Newpoint Funds; 111 Corcoran Funds; Peachtree Funds; The Planters
Funds; RIMCO Monument Funds; The Shawmut Funds; Short-Term Municipal
Trust; Star Funds; The Starburst Funds; The Starburst Funds II; Stock
and Bond Fund, Inc.; Sunburst Funds; Targeted Duration Trust; Tax-Free
Instruments Trust; Trademark Funds; Trust for Financial Institutions;
Trust For Government Cash Reserves; Trust for Short-Term U.S. Government
Securities; Trust for U.S. Treasury Obligations; The Virtus Funds; and
World Investment Series, Inc.
Trust Ownership
Officers and Trustees own less than 1% of the Trust's outstanding
shares.
Trustee Liability
The Trust's Declaration of Trust provides that the Trustees will not be
liable for errors of judgment or mistakes of fact or law. However, they
are not protected against any liability to which they would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence,
or reckless disregard of the duties involved in the conduct of their
office.
Trustees' Compensation
AGGREGATE
NAME , COMPENSATION
POSITION WITH FROM TOTAL COMPENSATION PAID
TRUST TRUST* FROM FUND COMPLEX +
John F. Donahue, $ 0 $0 for the Trust and
Chairman and Trustee 68 other investment companies in the Fund
Complex
Thomas G. Bigley, $ 0 $20,688 for the Trust and
Trustee 49 other investment companies in the Fund
Complex
John T. Conroy, Jr., $ 0 $117,202 for the Trust and
Trustee 64 other investment companies in the Fund
Complex
William J. Copeland, $ 0 $117,202 for the Trust and
Trustee 64 other investment companies in the Fund
Complex
James E. Dowd, $ 0 $117,202 for the Trust and
Trustee 64 other investment companies in the Fund
Complex
Lawrence D. Ellis, M.D., $ 0 $106,460 for the Trust and
Trustee 64 other investment companies in the Fund
Complex
Edward L. Flaherty, Jr., $ 0 $117,202 for the Trust and
Trustee 64 other investment companies in the Fund
Complex
Peter E. Madden, $ 0 $90,563 for the Trust and
Trustee 64 other investment companies in the Fund
Complex
Gregor F. Meyer, $ 0 $106,460 for the Trust and
Trustee 64 other investment companies in the Fund
Complex
John E. Murray, Jr., $ 0 $0.00 for the Trust and
Trustee 64 other investment companies in the Fund
Complex
Wesley W. Posvar, $ 0 $106,460 for the Trust and
Trustee 64 other investment companies in the Fund
Complex
Marjorie P. Smuts, $ 0 $106,460 for the Trust and
Trustee 64 other investment companies in the Fund
Complex
*As of the date of this Statement of Additional Information, the Trust
has not paid any fees to the Trustees of the Trust.
+The information is provided for the last calendar year.
Investment Advisory Services
Adviser To The Trust
The Trust's investment adviser is Federated Management. It is a
subsidiary of Federated Investors. All of the voting securities of
Federated Investors are owned by a trust, the trustees of which are
John F. Donahue, his wife, and his son, J. Christopher Donahue. The
adviser shall not be liable to the Trust or any shareholder of the Trust
for any losses that may be sustained in the purchase, holding, or sale
of any security, or for anything done or omitted by it, except acts or
omissions involving willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties imposed upon it by its contract with
the Trust.
Advisory Fees
For its advisory services, Federated Management receives an annual
investment advisory fee as described in the prospectus.
State Expense Limitations
The adviser has undertaken to comply with the expense limitations
established by certain states for investment companies whose shares
are registered for sale in those states. If the Trust'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 Trust for its expenses over
the limitation.
If the Trust's monthly projected operating expenses exceed this
limitation, the investment advisory fee paid will be reduced by the
amount of the excess, subject to an annual adjustment. If the
expense limitation is exceeded, the amount to be reimbursed by the
adviser will be limited, in any single fiscal year, by the amount
of the investment advisory fee.
This arrangement is not part of the advisory contract and may be amended
or rescinded in the future.
Trust Administration
Federated Administrative Services, a subsidiary of Federated Investors,
provides administrative personnel and services to the Trust for a fee
described in the prospectus. Dr. Henry J. Gailliot, an officer of
Federated Management, the Adviser to the Trust, holds approximately 20%
of the outstanding common stock and serves as a director of Commercial
Data Services, Inc., a company which provides computer processing
services to Federated Administrative Services.
Transfer Agent And Dividend Disbursing Agent
Federated Services Company serves as transfer agent and dividend
disbursing agent for the Trust. The fee paid to the transfer agent is
based upon the size, type and number of accounts and transactions made
by shareholders.
Federated Services Company also maintains the Trust's accounting
records. The fee paid for this service is based upon the level of the
Trust's average net assets for the period plus out-of-pocket expenses.
Brokerage Transactions
When selecting brokers and dealers to handle the purchase and sale of
portfolio instruments, the adviser looks for prompt execution of the
order at a favorable price. In working with dealers, the adviser will
generally use those who are recognized dealers in specific portfolio
instruments, except when a better price and execution of the order can
be obtained elsewhere. The adviser makes decisions on portfolio
transactions and selects brokers and dealers subject to review by the
Trustees.
The adviser may select brokers and dealers who offer brokerage and
research services. These services may be furnished directly to the Trust
or to the adviser and may include:
o advice as to the advisability of investing in securities;
o security analysis and reports;
o economic studies;
o industry studies;
o receipt of quotations for portfolio evaluations; and
o similar services.
The adviser and its affiliates exercise reasonable business judgment in
selecting brokers who offer brokerage and research services to execute
securities transactions. They determine in good faith that commissions
charged by such persons are reasonable in relationship to the value of
the brokerage and research services provided.
Research services provided by brokers may be used by the adviser or by
affiliates of Federated Investors in advising the Funds and other
accounts. To the extent that receipt of these services may supplant
services for which the adviser or its affiliates might otherwise have
paid, it would tend to reduce their expenses.
Purchasing Shares
Shares are sold at their net asset value without a sales charge on days
the New York Stock Exchange is open for business. The procedure for
purchasing Shares is explained in the respective prospectus under
"Investing in Institutional Shares" or "Investing in Institutional
Service Shares."
Distribution Plan (Institutional Service Shares only) And Shareholder
Services Agreement
These arrangements permit the payment of fees to financial institutions,
the distributor, and Federated Shareholder Services to stimulate
distribution activities and to cause services to be provided to
shareholders by a representative who has knowledge of the shareholder's
particular circumstances and goals. These activities and services may
include, but are not limited to, marketing efforts; providing office
space, equipment, telephone facilities, and various clerical,
supervisory, computer, and other personnel as necessary or beneficial to
establish and maintain shareholder accounts and records; processing
purchase and redemption transactions and automatic investments of client
account cash balances; answering routine client inquiries; and assisting
clients in changing dividend options, account designations, and
addresses.
With respect to the Institutional Service Shares class of the Trust, by
adopting the Distribution Plan, the Board of Trustees expects that the
Trust will be able to achieve a more predictable flow of cash for
investment purposes and to meet redemptions. This will facilitate more
efficient portfolio management and assist the Trust in pursuing its
investment objectives. By identifying potential investors whose needs
are served by the Trust's objectives, and properly servicing these
accounts, it may be possible to curb sharp fluctuations in rates of
redemptions and sales.
Other benefits, which may be realized under either arrangement, may
include: (1) providing personal services to shareholders; (2) investing
shareholder assets with a minimum of delay and administrative detail;
(3) enhancing shareholder recordkeeping systems; and (4) responding
promptly to shareholders' requests and inquiries concerning their
accounts.
Conversion To Federal Funds
It is the Trust'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. Federated Services Company acts as the shareholder's agent in
depositing checks and converting them to federal funds.
Determining Net Asset Value
Net asset value generally changes each day. The days on which net asset
value is calculated by the Trust are described in the respective
prospectuses.
Determining Market Value Of Securities
Market values of the Trust's portfolio securities are determined as
follows:
o according to the mean between the over-the-counter bid and asked
prices provided by an independent pricing service, if available, or
at fair value as determined in good faith by the Trust's Board of
Trustees; or
o for short-term obligations with remaining maturities of less than
60 days at the time of purchase, at amortized cost unless the
Trustees determine that particular circumstances of the security
indicate otherwise.
Prices provided by independent pricing services may be determined
without relying exclusively on quoted prices. Pricing services may
consider:
o yield;
o quality;
o coupon rate;
o maturity;
o type of issue;
o trading characteristics; and
o other market data.
Redeeming Shares
The Trust redeems Shares at the next computed net asset value after the
Trust receives the redemption request. Redemption procedures are
explained in the respective prospectuses under "Redeeming Institutional
Shares" and "Redeeming Institutional Service Shares." Although State
Street Bank does not charge for telephone redemptions, it reserves the
right to charge a fee for the cost of wire-transferred redemptions of
less than $5,000.
Redemption In Kind
The Trust is obligated to redeem Shares solely in cash up to $250,000 or
1% of the respective class net asset value, whichever is less, for any
one shareholder within a 90-day period.
Any redemption beyond this amount will also be in cash unless the
Trustees determine that further cash payments will have a material
adverse effect on remaining shareholders. In such a case, the Trust will
pay all or a portion of the remainder of the redemption in portfolio
instruments, valued in the same way as the Trust determines net asset
value. The portfolio instruments will be selected in a manner that the
Trustees deem fair and equitable.
Redemption in kind is not as liquid as a cash redemption. If redemption
is made in kind, shareholders receiving their securities and selling
them before their maturity could receive less than the redemption value
of their securities and could incur certain transaction costs.
Although the Trust intends to redeem shares in cash, it reserves the
right under certain circumstances to pay the redemption price in whole
or in part by a distribution of securities from the Trust's portfolio.
To the extent available, such securities will be readily marketable.
Tax Status
The Trust's Tax Status
The Trust 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 Trust
must, among other requirements:
o derive at least 90% of its gross income from dividends, interest,
and gains from the sale of securities;
o derive less than 30% of its gross income from the sale of
securities held less than three months;
o invest in securities within certain statutory limits; and
o distribute to its shareholders at least 90% of its net income
earned during the year.
Shareholders' Tax Status
Shareholders are subject to federal income tax on dividends and capital
gains received as cash or additional Shares. No portion of any income
dividend paid by the Trust is eligible for the dividends received
deduction available to corporations. These dividends, and any short-term
capital gains, are taxable as ordinary income.
Capital Gains
Long-term capital gains distributed to shareholders will be treated
as long-term capital gains regardless of how long shareholders have
held Shares.
Total Return
The average annual total return for the Trust 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 reinvestment of all
dividends and distributions.
Yield
The yield for both classes of shares of the Trust is determined by
dividing the net investment income per share (as defined by the
Securities and Exchange Commission) earned by either class of shares
over a thirty-day period by the maximum offering price per share of
either class on the last day of the period. This value is annualized
using semi-annual compounding. This means that the amount of income
generated during the thirty-day period is assumed to be generated each
month over a twelve month period and is reinvested every six months. The
yield does not necessarily reflect income actually earned by the Trust
because of certain adjustments required by the Securities and Exchange
Commission and, therefore, may not correlate to the dividends or other
distributions paid to shareholders.
To the extent that financial institutions and broker/dealers charge fees
in connection with services provided in conjunction with an investment
in either class of shares, performance will be reduced for those
shareholders paying those fees.
Performance Comparisons
The performance of both classes of shares depends upon such variables
as:
o portfolio quality;
o average portfolio maturity;
o type of instruments in which the portfolio is invested;
o changes in interest rates and market value of portfolio securities;
o changes in the Trust's expenses or either class of Share's
expenses; and
o various other factors.
Either class of Shares' performance fluctuates on a daily basis largely
because net earnings and offering price per share fluctuate daily. Both
net earnings and net asset value per share are factors in the
computation of yield and total return.
Investors may use financial publications and/or indices to obtain a more
complete view of the Trust's performance. When comparing performance,
investors should consider all relevant factors such as the composition
of any index used, prevailing market conditions, portfolio compositions
of other funds and methods used to value portfolio securities and
compute offering price. The financial publications and/or indices which
the Trust uses in advertising may include:
o Lipper Analytical Services, Inc. ranks funds in various 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. From time to time, the Trust
will quote its Lipper ranking in the "U.S. government funds"
category in advertising and sales literature.
o Merrill Lynch 5-10 Year Treasury Index is an unmanaged index
tracking U.S. government securities with maturities between 5 and
9.99 years.
Advertisements and other sales literature for both classes of shares may
quote total returns which are calculated on nonstandardized base
periods. These total returns also represent the historic change in the
value of an investment in either class of shares based on monthly
reinvestment of dividends over a specified period of time.
Duration
Duration is a commonly used measure of the potential volatility in the
price of a bond, or other fixed income security, or in a portfolio of
fixed income securities, prior to maturity. Volatility is the magnitude
of the change in the price of a bond relative to a given change in the
market rate of interest. A bond's price volatility depends on three
primary variables: the bond's coupon rate; maturity date; and the level
of market yields of similar fixed income securities. Generally, bonds
with lower coupons or longer maturities will be more volatile than bonds
with higher coupons or shorter maturities. Duration combines these
variables into a single measure.
Duration is calculated by dividing the sum of the time-weighted present
values of the cash flows of a bond or bonds, including interest and
principal payments, by the sum of the present values of the cash flows.
A more complete description of this calculation is available upon
request from the Trust.
About Federated Investors
Federated in dedicated to meeting investor needs which is reflected in
its investment decision making - structured, straightforward, and
consistent. This has resulted in a history of competitive performance
with a range of competitive investment products that have gained the
confidence of thousands of clients and their customers.
The company's disciplined security selection process is firmly rooted in
sound methodologies backed by fundamental and technical research.
Investment decisions are made and executed by teams of portfolio
managers, analysts, and traders dedicated to specific market sectors. In
the government sector, as of December 31, 1994, Federated managed 9
mortgage-backed, 4 government/agency and 17 government money market
mutual funds, with assets approximating $8.5 billion, $1.6 billion and
$17 billion, respectively. Federated trades approximately $300 million
in U.S. government and mortgage-backed securities daily and places
approximately $13 billion in repurchase agreements each day. Federated
introduced the first U.S. government fund to invest in U.S. government
bond securities in 1969. Federated has been a major force in the short-
and intermediate-term government markets since 1982 and currently
manages nearly $10 billion in government funds within these maturity
ranges.
J. Thomas Madden, Executive Vice President, oversees Federated's equity
and high yield corporate bond management while William D. Dawson,
Executive Vice President, oversees Federated's domestic fixed income
management. Henry A. Frantzen, Executive Vice President, oversees the
management of Federated's international portfolios.
Mutual Fund Market
Twenty-seven percent of American households are pursuing their financial
goals through mutual funds. These investors, as well as businesses and
institutions, have entrusted over $2 trillion to the more than 5,500
funds available.*
Federated Investors, through its subsidiaries, distributes mutual funds
for a variety of investment applications. Specific markets include:
Institutional
Federated meets the needs of more than 4,000 institutional clients
nationwide by managing and servicing separate accounts and mutual
funds for a variety of applications, including defined benefit and
defined contribution programs, cash management, and asset/liability
management. Institutional clients include corporations, pension
funds, tax-exempt entities, foundations/endowments, insurance
companies, and investment and financial advisors. The marketing
effort to these institutional clients is headed by John B. Fisher,
President, Institutional Sales Division.
Trust Organizations
Other institutional clients include close relationships with more
than 1,500 banks and trust organizations. Virtually all of the
trust divisions of the top 100 bank holding companies use Federated
funds in their clients' portfolios. The marketing effort to trust
clients is headed by Mark R. Gensheimer, Executive Vice President,
Bank Marketing & Sales.
*Source: Investment Company Institute
Broker/Dealers and Bank Broker/Dealer Subsidiaries
Federated mutual funds are available to consumers through major
brokerage firms nationwide including 200 New York Stock Exchange
firms supported by more wholesalers than any other mutual fund
distributor. The marketing effort to these firms is headed by James
F. Getz, President, Broker/Dealer Division.
G01209-02 (9/95)
PART C. OTHER INFORMATION.
Item 24. Financial Statements and Exhibits:
(a) Financial Statements (Filed in Part A).
(b) Exhibits:
(1) Conformed copy of Declaration of Trust of the
Registrant; (1)
(i) Conformed Copy of Amendment No. 1 (dated July 19,
1995) to Declaration of Trust; +
(2) Copy of the By-laws of the Registrant;(1)
(3) Not applicable;
(4) (i) Copy of Specimen Certificate of Shares of
Benefifical Interest of the Registrant/ Institutional
Shares; +
(ii) Copy of Specimen Certificate of Shares of
Benefifical Interest of the Registrant/ Institutional
Service Shares; +
(5) Conformed Copy of the Investment Advisory Contract;+
(6) Form of the Distributor's Contract; +
(i) The Registrant hereby incorporates the
conformed copy of the specimen Mutual Funds Sales and
Service Agreement; Mutual Funds Service Agreement; and
Plan Trustee/ Mutual Funds Service Agreement from
Item 4 (b)(6) of the Cash Trust Series II
Registration Statement on Form N-1A, filed with the
Commission on July 24, 1995. (File Numbers 33-38550 and
811-6269).
(7) Not applicable;
(8) (i) Copy of the Custodian Contract of the
Registrant; +
(9) (i) Conformed Copy of Administrative Services
Agreement of the Registrant; +
(ii) Conformed Copy of Agreement for Fund
Accounting, Shareholder Recordkeeping, and Custody
Services Procurement; +
(iii) The responses described in Item 24(b)(6) are
hereby incorporated by reference.
(10) Conformed Copy of Opinion and Consent of
Counsel as to legality of shares being registered; +;
(11) Conformed Copy of Consent of Independent
Auditors; +
(12) Not applicable;
(13) Conformed Copy of Initial Capital
Undertstanding; +
(14) Not applicable;
(15) Conformed Copy of Distribution Plan; +
(16) Schedule for Computation of Trust Performance
Data; (to be filed by amendment)
(17) Not applicable (Financial Data Schedule);
(18) Conformed copy of Power of Attorney;+
+ All exhibits have been filed electronically.
1. Response is incoportated by Reference to Registrant's Initial
Registration Statement on Form N-1A filed June 20, 1995. (Files Nos.
033-60411 and 811-07309).
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 September 1, 1995
Shares of Beneficial Interest
(No par value)
Institutional Shares N/A
Institutional Service Shares N/A
Item 27. Indemnification: (1)
Item 28. Business and Other Connections of Investment Adviser:
(a) For a description of the other business of the investment
adviser, see the section entitled "Trust Information -
Management of the Trust" in Part A. The affiliations with the
Registrant of four of the Trustees and one of the Officers of
the investment adviser are included in Part B of this
Registration Statement under Federated U.S. Government
Securities Funbd: 5-10 Years. The remaining Trustee of the
investment adviser, and, in parenthesis, his principal
occupation, is Mark D. Olson (Partner, Wilson, Halbrook and
Bayard, 107 W. Market Street, Georgetown, Delaware, 19947).
The remaining Officers of the investment adviser are: William
D. Dawson, Henry A. Frantzen, J. Thomas Madden, and Mark L.
Mallon, Executive Vice Presidents; Henry J. Gailliot, Senior
Vice President-Economist; Peter R. Anderson, and J. Alan
Minteer, Senior Vice Presidents; J. Scott Albrecht, Randall A.
Bauer, David A. Briggs, Jonathan C. Conley, Deborah A.
Cunningham, Michael P. Donnelly, Mark E. Durbiano, Kathleen M.
Foody-Malus, Thomas M. Franks, Edward C. Gonzales, Jeff A.
Kozemchak, Marian R. Marinack, John W. McGonigle, Susan M.
Nason, Mary Jo Ochson, Robert J. Ostrowski, Frederick L.
Plautz, Jr., Charles A. Ritter, James D. Roberge, Sandra L.
Weber, and Christopher H. Wiles, Vice Presidents, Edward C.
Gonzales, Treasurer, and John W. McGonigle, Secretary. The
business address of each of the Officers of the investment
adviser is Federated Investors Tower, Pittsburgh, PA 15222-
3779. These individuals are also officers of a majority of the
investment advisers to the Funds listed in Part B of this
Registration Statement.
1. Response is incoportated by Reference to Registrant's Initial
Registration Statement on Form N-1A filed June 20, 1995. (Files Nos.
033-60411 and 811-07309).
Item 29. Principal Underwriters:
(a) Federated Securities Corp., the Distributor for shares of
the Registrant, also acts as principal underwriter for the
following open-end investment companies: Alexander Hamilton
Funds; American Leaders Fund, Inc.; Annuity Management Series;
Arrow Funds; Automated Government Money Trust; BayFunds; The
Biltmore Funds; The Biltmore Municipal Funds; Cash Trust
Series, Inc.; Cash Trust Series II; DG Investor Series; Edward
D. Jones & Co. Daily Passport Cash Trust; Federated ARMs Fund;
Federated Exchange Fund, Ltd.; Federated GNMA Trust; Federated
Government Trust; Federated Growth Trust; Federated High Yield
Trust; Federated Income Securities Trust; Federated Income
Trust; Federated Index Trust; Federated Institutional Trust;
Federated Master Trust; Federated Municipal Trust; Federated
Short-Term Municipal Trust; Federated Short-Term U.S.
Government Trust; Federated Stock Trust; Federated Tax-Free
Trust; Federated Total Return Series, Inc.; Federated U.S.
Government Bond Fund; Federated U.S. Government Securities
Fund: 1-3 Years; Federated U.S. Government Securities Fund: 3-5
Years;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;
Insurance Management Series; Intermediate Municipal Trust;
International Series Inc.; Investment Series Funds, Inc.;
Investment Series Trust; Liberty Equity Income Fund, Inc.;
Liberty High Income Bond Fund, Inc.; Liberty Municipal
Securities Fund, Inc.; Liberty U.S. Government Money Market
Trust; Liberty Utility Fund, Inc.; Liquid Cash Trust; Managed
Series Trust; Marshall Funds, Inc.; Money Market Management,
Inc.; Money Market Obligations Trust; Money Market Trust; The
Monitor Funds; Municipal Securities Income Trust; Newpoint
Funds; 111 Corcoran Funds; Peachtree Funds; The Planters Funds;
RIMCO Monument Funds; The Shawmut 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; The Virtus
Funds; Vision Fiduciary Funds, Inc.; Vision Group of Funds,
Inc.; and World Investment Series, Inc.
Federated Securities Corp. also acts as principal underwriter
for the following closed-end investment company: Liberty Term
Trust, Inc.- 1999.
(b)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Richard B. Fisher Director, Chairman, Chief Vice President
Federated Investors Tower Executive Officer, Chief
Pittsburgh, PA 15222-3779 Operating Officer, and
Asst. Treasurer, Federated
Securities Corp.
Edward C. Gonzales Director, Executive Vice Executive Vice
Federated Investors Tower President, and Treasurer, President
Pittsburgh, PA 15222-3779 Federated Securities
Corp.
John W. McGonigle Director, Executive Vice Executive Vice
Federated Investors Tower President, and Assistant President
Pittsburgh, PA 15222-3779 Secretary, Federated
Securities Corp.
John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark R. Gensheimer Executive Vice President of --
Federated Investors Tower Bank/Trust
Pittsburgh, PA 15222-3779 Federated Securities Corp.
Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
H. Joseph Kennedy Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John B. Bohnet Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard W. Boyd Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Kevin J. Crenny Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Daniel T. Culbertson Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
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
Joseph L. Epstein 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
Michael D. Fitzgerald Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David C. Glabicki Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Craig S. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Scott A. Hutton Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William J. Kerns Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William E. Kugler Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Dennis M. Laffey Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Stephen A. LaVersa Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Francis J. Matten, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Mihm Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Jeffrey Niss Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael P. O'Brien Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert D. Oehlschlager Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Charles A. Robison Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John C. Shelar, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jamie M. Teschner Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul A. Uhlman Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael P. Wolff Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Philip C. Hetzel Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Charlene H. Jennings Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Ernest L. Linane Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
S. Elliott Cohan Secretary, Assistant
Federated Investors Tower Federated Securities Corp. Secretary
Pittsburgh, PA 15222-3779
(c) Not applicable.
Item 30. Item 30. Location of Accounts and Records:
FEDERATED U.S. GOVERNMENT Federated Investors Tower
SECURITIES FUND: 5-10 YEARS. Pittsburgh, Pennsylvania
15222-3779
Federated Services Company P.O. Box 8600
("Transfer Agent and Boston, Massachusetts
Dividend Disbursing Agent) 02266-8600
Federated Administrative Services Federated Investors Tower
("Administrator") Pittsburgh, Pennsylvania
15222-3779
Federated Management Federated Investors Tower
("Adviser") Pittsburgh, Pennsylvania
15222-3779
State Street Bank and Trust P.O. Box 8600
Company Boston, Massachusetts
("Custodian") 02266-8600
Item 31. Management Services: Not applicable.
Item 32. Undertakings:
Registrant hereby undertakes to comply with the provisions of
Section 16(c) of the 1940 Act with respect to the removal of
Trustees and the calling of special shareholder meetings by
shareholders.
Registrant hereby undertakes to 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.
Registrant hereby undertakes to file a post-effective amendment on
behalf of the Institutional and Institutional Service Shares of
Federated U.S. Government Trust: 5-10 Years using financial
statements for the Trust, which need not be certified, within four
to six months from the effective date of Registrant's 1933 Act
Registration Statement.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, FEDERATED U.S.
GOVERNMENT SECURITIES FUND: 5-10 YEARS, has duly caused this Amendment
to its Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of Pittsburgh and
Commonwealth of Pennsylvania, on the 11th day of September, 1995.
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS
BY: /s/ Robert C. Rosselot
Robert C. Rosselot, Assistant Secretary
Attorney in Fact for John F. Donahue
September 11, 1995
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to its Registration Statement has been signed below by the
following person in the capacity and on the date indicated:
NAME TITLE DATE
By: /s/ Robert C. Rosselot
Robert C. Rosselot Attorney In Fact September 11, 1995
ASSISTANT SECRETARY For the Persons
Listed Below
NAME TITLE
John F. Donahue* Chairman and Trustee
(Chief Executive Officer)
Glen R. Johnson* President
Edward C. Gonzales* Executive Vice President
Thomas G. Bigley* Trustee
John T. Conroy, Jr.* Trustee
William J. Copeland* Trustee
David M. Taylor* Treasurer
(Principal Financial and
Accounting Officer)
James E. Dowd* Trustee
Lawrence D. Ellis, M.D.* Trustee
Edward L. Flaherty, Jr.* Trustee
Peter E. Madden* Trustee
Gregor F. Meyer* Trustee
John E. Murray, Jr.* Trustee
Wesley W. Posvar* Trustee
Marjorie P. Smuts* Trustee
* By Power of Attorney
Form N-1A Exhibit No. 1(i)
Exhibit Number 3(a) under Item 601/Reg SK
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS
Amendment No. 1
to
DECLARATION OF TRUST
Dated June 14, 1995
THIS Declaration of Trust is amended, effective July
19, 1995, as follows:
A. Strike Article IV, Section 1 in its entirety and
substitute in its place the following:
Section 1. Management of the Trust. The
business and affairs of the Trust shall be
managed by the Trustees, and they shall have
all powers necessary and desirable to carry
out that responsibility. The Trustees who
shall serve as Trustees are John F. Donahue,
Thomas G. Bigley, John T. Conroy, Jr.,
William J. Copeland, James E. Dowd,
Lawrence D. Ellis, M.D., Edward L. Flaherty,
Jr., Peter E. Madden, Gregor F. Meyer, John
E. Murray, Jr., Wesley W. Posvar and
Marjorie P. Smuts.
The undersigned Assistant Secretary of Federated U.S.
Government Securities Fund: 5-10 Years hereby certifies
that the above-stated amendment is a true and correct
Amendment to the Declaration of Trust, as adopted by the
Trustees of the Trust on the 19th day of July, 1995.
WITNESS the due execution hereof this 19th day of July,
1995.
/s/Robert C. Rosselot
Robert C. Rosselot
Assistant Secretary
Form N-1A Exhibit No. 4(i)
Regulation S-K Exhibit No. 4(i)
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS
Institutional Shares
Number Shares
_____ _____
Account No. Alpha Code Organized Under the
See Reverse Side For
Laws of the Commonwealth Certain
Definitions
of Massachusetts
THIS IS TO CERTIFY THAT is the owner of
CUSIP __________
Fully Paid and Non-Assessable Shares of Beneficial Interest of
Federated U.S. Government Securities Fund: 5-10 Years hereafter
called the "Trust," transferable on the books of the Trust by
the owner in person or by duly authorized attorney upon
surrender of this Certificate properly endorsed.
The Institutional Shares represented hereby are issued and
shall be held subject to the provisions of the Declaration of
Trust and By-Laws of the Trust and all amendments thereto, all
of which the holder by acceptance hereof assents.
This Certificate is not valid unless countersigned by the
Transfer Agent.
IN WITNESS WHEREOF, the Trust has caused this Certificate
to be signed in its name by its proper officers and to be sealed
with its Seal.
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS
Institutional Shares
Dated: 1995
Massachusetts
/s/ David M. Taylor
/s/ John F. Donahue
Treasurer Chairman
Countersigned: Federated Services Company
Transfer Agent
By:
Authorized Signature
The following abbreviations, when used in the inscription on the
face of this Certificate, shall be construed as though they were
written out in full according to applicable laws or regulations;
TEN COM - as tenants in common UNIF
GIFT MIN ACT-...Custodian...
TEN ENT - as tenants by the entireties
(Cust) (Minors)
JT TEN - as joint tenants with right
of under Uniform Gifts to Minors
survivorship and not as tenants
Act.............................
in common (State)
Additional abbreviations may also be used though not in the
above list.
For value received__________ hereby sell, assign, and
transfer unto
Please insert social security or other
identifying number of assignee
______________________________________
________________________________________________________________
_____________
(Please print or typewrite name and address, including zip code,
of assignee)
________________________________________________________________
_____________
________________________________________________________________
_____________
________________________________________________________________
______ shares
of beneficial interest represented by the within Certificate,
and do hereby irrevocably constitute and appoint
__________________________________________
____________________________________________________________
_____Attorney
to transfer the said shares on the books of the within named
Trust with full power of substitution in the premises.
Dated______________________
NOTICE:___________________________
The signature to this assignment
must correspond with the name as
written upon the face of the
certificate in every particular,
without alteration or enlargement
or any change whatever.
All persons dealing with INSTITUTIONAL SHARES, a class of
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS, a
Massachusetts business trust, must look solely to the Trust
property for the enforcement of any claim against the Trust, as
the Trustees, officers, agents or shareholders of the Trust
assume no personal liability whatsoever for obligations entered
into on behalf of the Trust.
THIS SPACE MUST NOT BE COVERED IN ANY WAY
DOCUMENT DESCRIPTION - SPECIMEN STOCK CERTIFICATE
Page One
A. The Certificate is outlined by an (color) one-half inch
border.
B. The number in the upper left-hand corner and the number
of shares in the upper right-hand corner are outlined by
octagonal boxes.
C. The cusip number in the middle right-hand area of the
page is boxed.
D. The Massachusetts corporate seal appears in the bottom
middle of the page.
Page Two
The social security or other identifying number of the
assignee appears in a box in the top-third upper-left area of
the page.
Form N-1A Exhibit No. 4(ii)
Regulation S-K Exhibit No. 4(ii)
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS
Institutional Service Shares
Number Shares
_____ _____
Account No. Alpha Code Organized Under the
See Reverse Side For
Laws of the Commonwealth Certain
Definitions
of Massachusetts
THIS IS TO CERTIFY THAT is the owner of
CUSIP __________
Fully Paid and Non-Assessable Shares of Beneficial Interest of
Federated U.S. Government Securities Fund: 5-10 Years hereafter
called the "Trust," transferable on the books of the Trust by
the owner in person or by duly authorized attorney upon
surrender of this Certificate properly endorsed.
The Institutional Service Shares represented hereby are
issued and shall be held subject to the provisions of the
Declaration of Trust and By-Laws of the Trust and all amendments
thereto, all of which the holder by acceptance hereof assents.
This Certificate is not valid unless countersigned by the
Transfer Agent.
IN WITNESS WHEREOF, the Trust has caused this Certificate
to be signed in its name by its proper officers and to be sealed
with its Seal.
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS
Institutional Service Shares
Dated: 1995
Massachusetts
/s/ David M. Taylor
/s/ John F. Donahue
Treasurer Chairman
Countersigned: Federated Services Company
Transfer Agent
By:
Authorized Signature
The following abbreviations, when used in the inscription on the
face of this Certificate, shall be construed as though they were
written out in full according to applicable laws or regulations;
TEN COM - as tenants in common UNIF
GIFT MIN ACT-...Custodian...
TEN ENT - as tenants by the entireties
(Cust) (Minors)
JT TEN - as joint tenants with right
of under Uniform Gifts to Minors
survivorship and not as tenants
Act.............................
in common (State)
Additional abbreviations may also be used though not in the
above list.
For value received__________ hereby sell, assign, and
transfer unto
Please insert social security or other
identifying number of assignee
______________________________________
________________________________________________________________
(Please print or typewrite name and address, including zip code,
of assignee)
________________________________________________________________
________________________________________________________________
________________________________________________________________
______ shares
of beneficial interest represented by the within Certificate,
and do hereby irrevocably constitute and appoint
__________________________________________
____________________________________________________________
_____Attorney
to transfer the said shares on the books of the within named
Trust with full power of substitution in the premises.
Dated______________________
NOTICE:___________________________
The signature to this assignment
must correspond with the name as
written upon the face of the
certificate in every particular,
without alteration or enlargement
or any change whatever.
All persons dealing with INSTITUTIONAL SERVICE SHARES, a class
of FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS, a
Massachusetts business trust, must look solely to the Trust
property for the enforcement of any claim against the Trust, as
the Trustees, officers, agents or shareholders of the Trust
assume no personal liability whatsoever for obligations entered
into on behalf of the Trust.
THIS SPACE MUST NOT BE COVERED IN ANY WAY
DOCUMENT DESCRIPTION - SPECIMEN STOCK CERTIFICATE
Page One
A. The Certificate is outlined by an (color) one-half inch
border.
B. The number in the upper left-hand corner and the number
of shares in the upper right-hand corner are outlined by
octagonal boxes.
C. The cusip number in the middle right-hand area of the
page is boxed.
D. The Massachusetts corporate seal appears in the bottom
middle of the page.
Page Two
The social security or other identifying number of the
assignee appears in a box in the top-third upper-left area of
the page.
[INVADVCO] PROTOTYPE-01-93
Federated U.S. Government Securities Fund: 5-10 Years8/4/95, ver. 1
FORM N-1A EXHIBIT NO. 5
EXHIBIT NO. 1(i) UNDER ITEM 601/REG SK
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS
INVESTMENT ADVISORY CONTRACT
This Contract is made this 1st day of September, 1995,
between Federated Management, a business trust having its
principal place of business in Pittsburgh, Pennsylvania (the
"Adviser"), and Federated U.S. Government Securities Fund: 5-10
Years, a Massachusetts business trust having its principal place
of business in Pittsburgh, Pennsylvania (the "Trust").
WHEREAS the Trust is an open-end management investment
company as that term is defined in the Investment Company
Act of 1940, as amended, and is registered as such with the
Securities and Exchange Commission; and
WHEREAS Adviser is engaged in the business of rendering
investment advisory and management services.
NOW, THEREFORE, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. The Trust hereby appoints Adviser as Investment
Adviser for each of the portfolios ("Funds") of the Trust which
executes an exhibit to this Contract, and Adviser accepts the
appointments. Subject to the direction of the Trustees of the
Trust, Adviser shall provide investment research and supervision
of the investments of the Funds and conduct a continuous program
of investment evaluation and of appropriate sale or other
disposition and reinvestment of each Fund's assets.
2. Adviser, in its supervision of the investments of each
of the Funds, will be guided by each of the Fund's investment
objective and policies and the provisions and restrictions
contained in the Declaration of Trust and By-Laws of the Trust
and as set forth in the Registration Statements and exhibits as
may be on file with the Securities and Exchange Commission.
3. Each Fund shall pay or cause to be paid all of its own
expenses and its allocable share of Trust expenses, including,
without limitation, the expenses of organizing the Trust and
continuing its existence; fees and expenses of Trustees and
officers of the Trust; fees for investment advisory services and
administrative personnel and services; expenses incurred in the
distribution of its shares ("Shares"), including expenses of
administrative support services; fees and expenses of preparing
and printing its Registration Statements under the Securities
Act of 1933 and the Investment Company Act of 1940, as amended,
and any amendments thereto; expenses of registering and
qualifying the Trust, the Funds, and Shares of the Funds under
federal and state laws and regulations; expenses of preparing,
printing, and distributing prospectuses (and any amendments
thereto) to shareholders; interest expense, taxes, fees, and
commissions of every kind; expenses of issue (including cost of
Share certificates), purchase, repurchase, and redemption of
Shares, including expenses attributable to a program of periodic
issue; charges and expenses of custodians, transfer agents,
dividend disbursing agents, shareholder servicing agents, and
registrars; printing and mailing costs, auditing, accounting,
and legal expenses; reports to shareholders and governmental
officers and commissions; expenses of meetings of Trustees and
shareholders and proxy solicitations therefor; insurance
expenses; association membership dues and such nonrecurring
items as may arise, including all losses and liabilities
incurred in administering the Trust and the Funds. Each Fund
will also pay its allocable share of such extraordinary expenses
as may arise including expenses incurred in connection with
litigation, proceedings, and claims and the legal obligations of
the Trust to indemnify its officers and Trustees and agents with
respect thereto.
4. Each of the Funds shall pay to Adviser, for all
services rendered to each Fund by Adviser hereunder, the fees
set forth in the exhibits attached hereto.
5. The net asset value of each Fund's Shares as used
herein will be calculated to the nearest 1/10th of one cent.
6. The Adviser may from time to time and for such periods
as it deems appropriate reduce its compensation (and, if
appropriate, assume expenses of one or more of the Funds) to the
extent that any Fund's expenses exceed such lower expense
limitation as the Adviser may, by notice to the Fund,
voluntarily declare to be effective.
7. This Contract shall begin for each Fund as of the date
of execution of the applicable exhibit and shall continue in
effect with respect to each Fund presently set forth on an
exhibit (and any subsequent Funds added pursuant to an exhibit
during the initial term of this Contract) for two years from the
date of this Contract set forth above and thereafter for
successive periods of one year, subject to the provisions for
termination and all of the other terms and conditions hereof if:
(a) such continuation shall be specifically approved at least
annually by the vote of a majority of the Trustees of the Trust,
including a majority of the Trustees who are not parties to this
Contract or interested persons of any such party cast in person
at a meeting called for that purpose; and (b) Adviser shall not
have notified a Fund in writing at least sixty (60) days prior
to the anniversary date of this Contract in any year thereafter
that it does not desire such continuation with respect to that
Fund. If a Fund is added after the first approval by the
Trustees as described above, this Contract will be effective as
to that Fund upon execution of the applicable exhibit and will
continue in effect until the next annual approval of this
Contract by the Trustees and thereafter for successive periods
of one year, subject to approval as described above.
8. Notwithstanding any provision in this Contract, it may
be terminated at any time with respect to any Fund, without the
payment of any penalty, by the Trustees of the Trust or by a
vote of the shareholders of that Fund on sixty (60) days'
written notice to Adviser.
9. This Contract may not be assigned by Adviser and shall
automatically terminate in the event of any assignment. Adviser
may employ or contract with such other person, persons,
corporation, or corporations at its own cost and expense as it
shall determine in order to assist it in carrying out this
Contract.
10. In the absence of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the obligations or
duties under this Contract on the part of Adviser, Adviser shall
not be liable to the Trust or to any of the Funds or to any
shareholder for any act or omission in the course of or
connected in any way with rendering services or for any losses
that may be sustained in the purchase, holding, or sale of any
security.
11. This Contract may be amended at any time by agreement
of the parties provided that the amendment shall be approved
both by the vote of a majority of the Trustees of the Trust,
including a majority of the Trustees who are not parties to this
Contract or interested persons of any such party to this
Contract (other than as Trustees of the Trust) cast in person at
a meeting called for that purpose, and, where required by
Section 15(a)(2) of the Act, on behalf of a Fund by a majority
of the outstanding voting securities of such Fund as defined in
Section 2(a)(42) of the Act.
12. Adviser is hereby expressly put on notice of the
limitation of liability as set forth in Article XI of the
Declaration of Trust and agrees that the obligations pursuant to
this Contract of a particular Fund and of the Trust with respect
to that particular Fund be limited solely to the assets of that
particular Fund, and Adviser shall not seek satisfaction of any
such obligation from any other Fund, the shareholders of any
Fund, the Trustees, officers, employees or agents of the Trust,
or any of them.
13. The Trust and the Funds are hereby expressly put on
notice of the limitation of liability as set forth in the
Declaration of Trust of the Adviser and agree that the
obligations assumed by the Adviser pursuant to this Contract
shall be limited in any case to the Adviser and its assets and,
except to the extent expressly permitted by the Investment
Company Act of 1940, as amended, the Trust and the Funds shall
not seek satisfaction of any such obligation from the
shareholders of the Adviser, the Trustees, officers, employees,
or agents of the Adviser, or any of them.
14. The parties hereto acknowledge that Federated
Management has reserved the right to grant the non-exclusive use
of the name "Federated" or any derivative thereof to any other
investment company, investment company portfolio, investment
adviser, distributor or other business enterprise, and to
withdraw from the Trust and one or more of the Funds the use of
the name "Federated". The name "Federated" will continue to be
used by the Trust and each Fund so long as such use is mutually
agreeable to Federated Investors and the Trust.
15. This Contract shall be construed in accordance with
and governed by the laws of the Commonwealth of Pennsylvania.
16. This Contract will become binding on the parties
hereto upon their execution of the attached exhibits to this
Contract.
EXHIBIT A
to the
Investment Advisory Contract
Federated U.S. Government Securities Fund: 5-10 Years
For all services rendered by Adviser hereunder, the above-
named Fund of the Trust shall pay to Adviser and Adviser agrees
to accept as full compensation for all services rendered
hereunder, an annual investment advisory fee equal to 0.50 of 1%
of the average daily net assets of the Fund.
The portion of the fee based upon the average daily net
assets of the Fund shall be accrued daily at the rate of 1/365th
of 0.50 of 1% applied to the daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this 1st day of September,
1995.
Attest: Federated Management
/s/ Stephen A. Keen By: /s/ J. Thomas Madden
Secretary Executive Vice President
Attest: Federated U.S. Government
Securities Fund: 5-10 Years
/s/ Robert C. Rosselot By: /s/ Richard B. Fisher
Assistant Secretary Vice President
Federated U.S. Government Securities Fund: 5-10 Years8/4/95, ver. 1
EXHIBIT NO. 6 ON FORM N-1A
EXHIBIT NO. 1(iii) UNDER ITEM 601/REG SK
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS
DISTRIBUTOR'S CONTRACT
AGREEMENT made this 1st day of September, 1995, by
and between Federated U.S. Government Securities
Fund: 5-10 Years (the "Trust"), a Massachusetts
business trust, and FEDERATED SECURITIES CORP.
("FSC"), a Pennsylvania Corporation.
In consideration of the mutual covenants
hereinafter contained, it is hereby agreed by and
between the parties hereto as follows:
1. The Trust hereby appoints FSC as its agent to sell
and distribute shares of the Trust which may be
offered in one or more series (the "Funds")
consisting of one or more classes (the "Classes") of
shares (the "Shares"), as described and set forth on
one or more exhibits to this Agreement, at the
current offering price thereof as described and set
forth in the current Prospectuses of the Trust. FSC
hereby accepts such appointment and agrees to
provide such other services for the Trust, if any,
and accept such compensation from the Trust, if any,
as set forth in the applicable exhibits to this
Agreement.
2. The sale of any Shares may be suspended without
prior notice whenever in the judgment of the Trust
it is in its best interest to do so.
3. Neither FSC nor any other person is authorized by
the Trust to give any information or to make any
representation relative to any Shares other than
those contained in the Registration Statement,
Prospectuses, or Statements of Additional
Information ("SAIs") filed with the Securities and
Exchange Commission, as the same may be amended from
time to time, or in any supplemental information to
said Prospectuses or SAIs approved by the Trust. FSC
agrees that any other information or representations
other than those specified above which it or any
dealer or other person who purchases Shares through
FSC may make in connection with the offer or sale of
Shares, shall be made entirely without liability on
the part of the Trust. No person or dealer, other
than FSC, is authorized to act as agent for the
Trust for any purpose. FSC agrees that in offering
or selling Shares as agent of the Trust, it will, in
all respects, duly conform to all applicable state
and federal laws and the rules and regulations of
the National Association of Securities Dealers,
Inc., including its Rules of Fair Practice. FSC will
submit to the Trust copies of all sales literature
before using the same and will not use such sales
literature if disapproved by the Trust.
4. This Agreement is effective with respect to each
Class as of the date of execution of the applicable
exhibit and shall continue in effect with respect to
each Class presently set forth on an exhibit and any
subsequent Classes added pursuant to an exhibit
during the initial term of this Agreement for one
year from the date set forth above, and thereafter
for successive periods of one year if such
continuance is approved at least annually by the
Trustees of the Trust including a majority of the
members of the Board of Trustees of the Trust who
are not interested persons of the Trust and have no
direct or indirect financial interest in the
operation of any Distribution Plan relating to the
Trust or in any related documents to such Plan
("Disinterested Trustees") cast in person at a
meeting called for that purpose. If a Class is added
after the first annual approval by the Trustees as
described above, this Agreement will be effective as
to that Class upon execution of the applicable
exhibit and will continue in effect until the next
annual approval of this Agreement by the Trustees
and thereafter for successive periods of one year,
subject to approval as described above.
5. This Agreement may be terminated with regard to a
particular Fund or Class at any time, without the
payment of any penalty, by the vote of a majority of
the Disinterested Trustees or by a majority of the
outstanding voting securities of the particular Fund
or Class on not more than sixty (60) days' written
notice to any other party to this Agreement. This
Agreement may be terminated with regard to a
particular Fund or Class by FSC on sixty (60) days'
written notice to the Trust.
6. This Agreement may not be assigned by FSC and shall
automatically terminate in the event of an
assignment by FSC as defined in the Investment
Company Act of 1940, as amended, provided, however,
that FSC may employ such other person, persons,
corporation or corporations as it shall determine in
order to assist it in carrying out its duties under
this Agreement.
7. FSC shall not be liable to the Trust for anything
done or omitted by it, except acts or omissions
involving willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties
imposed by this Agreement.
8. This Agreement may be amended at any time by mutual
agreement in writing of all the parties hereto,
provided that such amendment is approved by the
Trustees of the Trust including a majority of the
Disinterested Trustees of the Trust cast in person
at a meeting called for that purpose.
9. This Agreement shall be construed in accordance with
and governed by the laws of the Commonwealth of
Pennsylvania.
10. (a) Subject to the conditions set forth below,
the Trust agrees to indemnify and hold harmless
FSC and each person, if any, who controls FSC
within the meaning of Section 15 of the
Securities Act of 1933 and Section 20 of the
Securities Act of 1934, as amended, against any
and all loss, liability, claim, damage and
expense whatsoever (including but not limited
to any and all expenses whatsoever reasonably
incurred in investigating, preparing or
defending against any litigation, commenced or
threatened, or any claim whatsoever) arising
out of or based upon any untrue statement or
alleged untrue statement of a material fact
contained in the Registration Statement, any
Prospectuses or SAIs (as from time to time
amended and supplemented) or the omission or
alleged omission therefrom of a material fact
required to be stated therein or necessary to
make the statements therein not misleading,
unless such statement or omission was made in
reliance upon and in conformity with written
information furnished to the Trust about FSC by
or on behalf of FSC expressly for use in the
Registration Statement, any Prospectuses and
SAIs or any amendment or supplement thereof.
If any action is brought against FSC or any
controlling person thereof with respect to
which indemnity may be sought against the Trust
pursuant to the foregoing paragraph, FSC shall
promptly notify the Trust in writing of the
institution of such action and the Trust shall
assume the defense of such action, including
the employment of counsel selected by the Trust
and payment of expenses. FSC or any such
controlling person thereof shall have the right
to employ separate counsel in any such case,
but the fees and expenses of such counsel shall
be at the expense of FSC or such controlling
person unless the employment of such counsel
shall have been authorized in writing by the
Trust in connection with the defense of such
action or the Trust shall not have employed
counsel to have charge of the defense of such
action, in any of which events such fees and
expenses shall be borne by the Trust. Anything
in this paragraph to the contrary
notwithstanding, the Trust shall not be liable
for any settlement of any such claim of action
effected without its written consent. The Trust
agrees promptly to notify FSC of the
commencement of any litigation or proceedings
against the Trust or any of its officers or
Trustees or controlling persons in connection
with the issue and sale of Shares or in
connection with the Registration Statement,
Prospectuses, or SAIs.
(b) FSC agrees to indemnify and hold harmless the
Trust, each of its Trustees, each of its
officers who have signed the Registration
Statement and each other person, if any, who
controls the Trust within the meaning of
Section 15 of the Securities Act of 1933, but
only with respect to statements or omissions,
if any, made in the Registration Statement or
any Prospectus, SAI, or any amendment or
supplement thereof in reliance upon, and in
conformity with, information furnished to the
Trust about FSC by or on behalf of FSC
expressly for use in the Registration Statement
or any Prospectus, SAI, or any amendment or
supplement thereof. In case any action shall be
brought against the Trust or any other person
so indemnified based on the Registration
Statement or any Prospectus, SAI, or any
amendment or supplement thereof, and with
respect to which indemnity may be sought
against FSC, FSC shall have the rights and
duties given to the Trust, and the Trust and
each other person so indemnified shall have the
rights and duties given to FSC by the
provisions of subsection (a) above.
(c) Nothing herein contained shall be deemed to
protect any person against liability to the
Trust or its shareholders to which such person
would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in
the performance of the duties of such person or
by reason of the reckless disregard by such
person of the obligations and duties of such
person under this Agreement.
(d) Insofar as indemnification for liabilities may
be permitted pursuant to Section 17 of the
Investment Company Act of 1940, as amended, for
Trustees, officers, FSC and controlling persons
of the Trust by the Trust pursuant to this
Agreement, the Trust is aware of the position
of the Securities and Exchange Commission as
set forth in the Investment Company Act Release
No. IC-11330. Therefore, the Trust undertakes
that in addition to complying with the
applicable provisions of this Agreement, in the
absence of a final decision on the merits by a
court or other body before which the proceeding
was brought, that an indemnification payment
will not be made unless in the absence of such
a decision, a reasonable determination based
upon factual review has been made (i) by a
majority vote of a quorum of non-party
Disinterested Trustees, or (ii) by independent
legal counsel in a written opinion that the
indemnitee was not liable for an act of willful
misfeasance, bad faith, gross negligence or
reckless disregard of duties. The Trust further
undertakes that advancement of expenses
incurred in the defense of a proceeding (upon
undertaking for repayment unless it is
ultimately determined that indemnification is
appropriate) against an officer, Trustee, FSC
or controlling person of the Trust will not be
made absent the fulfillment of at least one of
the following conditions: (i) the indemnitee
provides security for his undertaking; (ii) the
Trust is insured against losses arising by
reason of any lawful advances; or (iii) a
majority of a quorum of non-party Disinterested
Trustees or independent legal counsel in a
written opinion makes a factual determination
that there is reason to believe the indemnitee
will be entitled to indemnification.
11.FSC is hereby expressly put on notice of the
limitation of liability as set forth in the
Declaration of Trust and agrees that the obligations
assumed by the Trust pursuant to this Agreement
shall be limited in any case to the Trust and its
assets and FSC shall not seek satisfaction of any
such obligation from the shareholders of the Trust,
the Trustees, officers, employees or agents of the
Trust, or any of them.
12.If at any time the Shares of any Fund are offered in
two or more Classes, FSC agrees to adopt compliance
standards as to when a class of shares may be sold
to particular investors.
13.This Agreement will become binding on the parties
hereto upon the execution of the attached exhibits
to the Agreement.
Exhibit A
to the
Distributor's Contract
Federated U.S. Government Securities Fund: 5-10 Years
Institutional Shares
In consideration of the mutual covenants set forth
in the Distributor's Contract dated September 1,
1995, between Federated U.S. Government Securities
Fund: 5-10 Years and Federated Securities Corp.,
Federated U.S. Government Securities
Fund: 5-10 Years executes and delivers this Exhibit
on behalf of the Institutional Shares first set forth
in this Exhibit.
Witness the due execution hereof this 1st day of
September, 1995.
ATTEST: Federated U.S. Government Securities Fund: 5-10
Years
By:
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
By:
Secretary Executive Vice President
(SEAL)
Exhibit B
to the
Distributor's Contract
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS
Institutional Service Shares
The following provisions are hereby incorporated
and made part of the Distributor's Contract dated
September 1, 1995, between Federated U.S. Government
Securities Fund: 5-10 Years and Federated Securities
Corp. with respect to the Class of shares set forth
above.
1. The Trust hereby appoints FSC to engage in
activities principally intended to result in the
sale of shares of the above-listed Class ("Shares").
Pursuant to this appointment, FSC is authorized to
select a group of financial institutions ("Financial
Institutions") to sell Shares at the current
offering price thereof as described and set forth in
the respective prospectuses of the Trust.
2. During the term of this Agreement, the Trust will
pay FSC for services pursuant to this Agreement, a
monthly fee computed at the annual rate of 0.25 of
1% of the average aggregate net asset value of the
Shares held during the month. For the month in which
this Agreement becomes effective or terminates,
there shall be an appropriate proration of any fee
payable on the basis of the number of days that the
Agreement is in effect during the month.
3. FSC may from time-to-time and for such periods as it
deems appropriate reduce its compensation to the
extent any Class's expenses exceed such lower
expense limitation as FSC may, by notice to the
Trust, voluntarily declare to be effective.
4. FSC will enter into separate written agreements with
various firms to provide certain of the services set
forth in Paragraph 1 herein. FSC, in its sole
discretion, may pay Financial Institutions a
periodic fee in respect of Shares owned from time to
time by their clients or customers. The schedules of
such fees and the basis upon which such fees will be
paid shall be determined from time to time by FSC in
its sole discretion.
5. FSC will prepare reports to the Board of Trustees of
the Trust on a quarterly basis showing amounts
expended hereunder including amounts paid to
Financial Institutions and the purpose for such
expenditures.
In consideration of the mutual covenants set forth
in the Distributor's Contract dated September 1,
1995, between Federated U.S. Government Securities
Fund: 5-10 Years and Federated Securities Corp.,
Federated U.S. Government Securities
Fund: 5-10 Years executes and delivers this Exhibit
on behalf of the Institutional Service Shares first
set forth in this Exhibit.
Witness the due execution hereof this 1st day of
September, 1995.
ATTEST: Federated U.S. Government Securities Fund: 5-10
Years
By:
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
By:
Secretary Executive Vice President
(SEAL)
Form N-1A Exhibit No. 8
Exhibit No. 10(i) under Item 601/Reg SK
CUSTODIAN CONTRACT
Between
FEDERATED INVESTMENT COMPANIES
and
STATE STREET BANK AND TRUST COMPANY
and
FEDERATED SERVICES COMPANY
TABLE OF CONTENTS
Page
1. Employment of Custodian and Property to be Held by It 1
2. Duties of the Custodian With Respect to Property of the Funds
Held by the Custodian 2
2.1 Holding Securities 2
2.2 Delivery of Securities 2
2.3 Registration of Securities 5
2.4 Bank Accounts 6
2.5 Payments for Shares 7
2.6 Availability of Federal Funds 7
2.7 Collection of Income 7
2.8 Payment of Fund Moneys 8
2.9 Liability for Payment in Advance of Receipt of
Securities Purchased. 9
2.10 Payments for Repurchases or Redemptions of
Shares of a Fund 9
2.11 Appointment of Agents 10
2.12 Deposit of Fund Assets in Securities System 10
2.13 Segregated Account 12
2.14 Joint Repurchase Agreements 13
2.15 Ownership Certificates for Tax Purposes 13
2.16 Proxies 13
2.17 Communications Relating to Fund Portfolio Securities 13
2.18 Proper Instructions 14
2.19 Actions Permitted Without Express Authority 14
2.20 Evidence of Authority 15
2.21 Notice to Trust by Custodian Regarding Cash Movement.15
3. Duties of Custodian With Respect to the Books of Account and
Calculation of Net Asset Value and Net Income 15
4. Records 16
5. Opinion of Funds' Independent Public Accountants/Auditors 16
6. Reports to Trust by Independent Public Accountants/
Auditors 17
7. Compensation of Custodian 17
8. Responsibility of Custodian 17
9. Effective Period, Termination and Amendment 19
10. Successor Custodian 20
11. Interpretive and Additional Provisions 21
12. Massachusetts Law to Apply 22
13. Notices 22
14. Counterparts 22
15. Limitations of Liability 22
CUSTODIAN CONTRACT
This Contract between those INVESTMENT COMPANIES listed on Exhibit 1,
as it may be amended from time to time, (the "Trust"), which may be
Massachusetts business trusts or Maryland corporations or have such
other form of organization as may be indicated, on behalf of the
portfolios (hereinafter collectively called the "Funds" and
individually referred to as a "Fund") of the Trust, having its
principal place of business at Federated Investors Tower, Pittsburgh,
Pennsylvania, 15222-3779, and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts trust company, having its principal place of business at
225 Franklin Street, Boston, Massachusetts, 02110, hereinafter called
the "Custodian", and FEDERATED SERVICES COMPANY, a Delaware business
trust company, having its principal place of business at Federated
Investors Tower, Pittsburgh, Pennsylvania, 15222-3779, hereinafter
called ("Company").
WITNESSETH: That in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
The Trust hereby employs the Custodian as the custodian of the
assets of each of the Funds of the Trust. Except as otherwise
expressly provided herein, the securities and other assets of
each of the Funds shall be segregated from the assets of each of
the other Funds and from all other persons and entities. The
Trust will deliver to the Custodian all securities and cash owned
by the Funds and all payments of income, payments of principal or
capital distributions received by them with respect to all
securities owned by the Funds from time to time, and the cash
consideration received by them for shares ("Shares") of
beneficial interest/capital stock of the Funds as may be issued
or sold from time to time. The Custodian shall not be
responsible for any property of the Funds held or received by the
Funds and not delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of
Section 2.18), the Custodian shall from time to time employ one
or more sub-custodians upon the terms specified in the Proper
Instructions, provided that the Custodian shall have no more or
less responsibility or liability to the Trust or any of the Funds
on account of any actions or omissions of any sub-custodian so
employed than any such sub-custodian has to the Custodian.
2. Duties of the Custodian With Respect to Property of the Funds
Held by the Custodian
2.1Holding Securities. The Custodian shall hold and physically
segregate for the account of each Fund all non-cash property,
including all securities owned by each Fund, other than
securities which are maintained pursuant to Section 2.12 in a
clearing agency which acts as a securities depository or in a
book-entry system authorized by the U.S. Department of the
Treasury, collectively referred to herein as "Securities
System", or securities which are subject to a joint
repurchase agreement with affiliated funds pursuant to
Section 2.14. The Custodian shall maintain records of all
receipts, deliveries and locations of such securities,
together with a current inventory thereof, and shall conduct
periodic physical inspections of certificates representing
stocks, bonds and other securities held by it under this
Contract in such manner as the Custodian shall determine from
time to time to be advisable in order to verify the accuracy
of such inventory. With respect to securities held by any
agent appointed pursuant to Section 2.11 hereof, and with
respect to securities held by any sub-custodian appointed
pursuant to Section 1 hereof, the Custodian may rely upon
certificates from such agent as to the holdings of such agent
and from such sub-custodian as to the holdings of such sub-
custodian, it being understood that such reliance in no way
relieves the Custodian of its responsibilities under this
Contract. The Custodian will promptly report to the Trust
the results of such inspections, indicating any shortages or
discrepancies uncovered thereby, and take appropriate action
to remedy any such shortages or discrepancies.
2.2Delivery of Securities. The Custodian shall release and
deliver securities owned by a Fund held by the Custodian or
in a Securities System account of the Custodian only upon
receipt of Proper Instructions, which may be continuing
instructions when deemed appropriate by the parties, and only
in the following cases:
(1)Upon sale of such securities for the account of a Fund
and receipt of payment therefor;
(2)Upon the receipt of payment in connection with any
repurchase agreement related to such securities entered
into by the Trust;
(3)In the case of a sale effected through a Securities
System, in accordance with the provisions of Section 2.12
hereof;
(4)To the depository agent in connection with tender or
other similar offers for portfolio securities of a Fund,
in accordance with the provisions of Section 2.17 hereof;
(5)To the issuer thereof or its agent when such securities
are called, redeemed, retired or otherwise become
payable; provided that, in any such case, the cash or
other consideration is to be delivered to the Custodian;
(6)To the issuer thereof, or its agent, for transfer into
the name of a Fund or into the name of any nominee or
nominees of the Custodian or into the name or nominee
name of any agent appointed pursuant to Section 2.11 or
into the name or nominee name of any sub-custodian
appointed pursuant to Section 1; or for exchange for a
different number of bonds, certificates or other evidence
representing the same aggregate face amount or number of
units; provided that, in any such case, the new
securities are to be delivered to the Custodian;
(7)Upon the sale of such securities for the account of a
Fund, to the broker or its clearing agent, against a
receipt, for examination in accordance with "street
delivery custom"; provided that in any such case, the
Custodian shall have no responsibility or liability for
any loss arising from the delivery of such securities
prior to receiving payment for such securities except as
may arise from the Custodian's own failure to act in
accordance with the standard of reasonable care or any
higher standard of care imposed upon the Custodian by any
applicable law or regulation if such above-stated
standard of reasonable care were not part of this
Contract;
(8)For exchange or conversion pursuant to any plan of
merger, consolidation, recapitalization, reorganization
or readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion
contained in such securities, or pursuant to any deposit
agreement; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the
Custodian;
(9)In the case of warrants, rights or similar securities,
the surrender thereof in the exercise of such warrants,
rights or similar securities or the surrender of interim
receipts or temporary securities for definitive
securities; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the
Custodian;
(10) For delivery in connection with any loans of
portfolio securities of a Fund, but only against receipt
of adequate collateral in the form of (a) cash, in an
amount specified by the Trust, (b) certificated
securities of a description specified by the Trust,
registered in the name of the Fund or in the name of a
nominee of the Custodian referred to in Section 2.3
hereof or in proper form for transfer, or (c) securities
of a description specified by the Trust, transferred
through a Securities System in accordance with Section
2.12 hereof;
(11) For delivery as security in connection with any
borrowings requiring a pledge of assets by a Fund, but
only against receipt of amounts borrowed, except that in
cases where additional collateral is required to secure a
borrowing already made, further securities may be
released for the purpose;
(12) For delivery in accordance with the provisions of
any agreement among the Trust or a Fund, the Custodian
and a broker-dealer registered under the Securities
Exchange Act of 1934, as amended, (the "Exchange Act")
and a member of The National Association of Securities
Dealers, Inc. ("NASD"), relating to compliance with the
rules of The Options Clearing Corporation and of any
registered national securities exchange, or of any
similar organization or organizations, regarding escrow
or other arrangements in connection with transactions for
a Fund;
(13) For delivery in accordance with the provisions of
any agreement among the Trust or a Fund, the Custodian,
and a Futures Commission Merchant registered under the
Commodity Exchange Act, relating to compliance with the
rules of the Commodity Futures Trading Commission and/or
any Contract Market, or any similar organization or
organizations, regarding account deposits in connection
with transaction for a Fund;
(14) Upon receipt of instructions from the transfer agent
("Transfer Agent") for a Fund, for delivery to such
Transfer Agent or to the holders of shares in connection
with distributions in kind, in satisfaction of requests
by holders of Shares for repurchase or redemption; and
(15) For any other proper corporate purpose, but only
upon receipt of, in addition to Proper Instructions, a
certified copy of a resolution of the Executive Committee
of the Trust on behalf of a Fund signed by an officer of
the Trust and certified by its Secretary or an Assistant
Secretary, specifying the securities to be delivered,
setting forth the purpose for which such delivery is to
be made, declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom
delivery of such securities shall be made.
2.3 Registration of Securities. Securities held by the
Custodian (other than bearer securities) shall be registered
in the name of a particular Fund or in the name of any
nominee of the Fund or of any nominee of the Custodian which
nominee shall be assigned exclusively to the Fund, unless the
Trust has authorized in writing the appointment of a nominee
to be used in common with other registered investment
companies affiliated with the Fund, or in the name or nominee
name of any agent appointed pursuant to Section 2.11 or in
the name or nominee name of any sub-custodian appointed
pursuant to Section 1. All securities accepted by the
Custodian on behalf of a Fund under the terms of this
Contract shall be in "street name" or other good delivery
form.
2.4 Bank Accounts. The Custodian shall open and maintain a
separate bank account or accounts in the name of each Fund,
subject only to draft or order by the Custodian acting
pursuant to the terms of this Contract, and shall hold in
such account or accounts, subject to the provisions hereof,
all cash received by it from or for the account of each Fund,
other than cash maintained in a joint repurchase account with
other affiliated funds pursuant to Section 2.14 of this
Contract or by a particular Fund in a bank account
established and used in accordance with Rule 17f-3 under the
Investment Company Act of 1940, as amended, (the "1940 Act").
Funds held by the Custodian for a Fund may be deposited by it
to its credit as Custodian in the Banking Department of the
Custodian or in such other banks or trust companies as it may
in its discretion deem necessary or desirable; provided,
however, that every such bank or trust company shall be
qualified to act as a custodian under the 1940 Act and that
each such bank or trust company and the funds to be deposited
with each such bank or trust company shall be approved by
vote of a majority of the Board of Trustees/Directors
("Board") of the Trust. Such funds shall be deposited by the
Custodian in its capacity as Custodian for the Fund and shall
be withdrawable by the Custodian only in that capacity. If
requested by the Trust, the Custodian shall furnish the
Trust, not later than twenty (20) days after the last
business day of each month, an internal reconciliation of the
closing balance as of that day in all accounts described in
this section to the balance shown on the daily cash report
for that day rendered to the Trust.
2.5Payments for Shares. The Custodian shall make such
arrangements with the Transfer Agent of each Fund, as will
enable the Custodian to receive the cash consideration due to
each Fund and will deposit into each Fund's account such
payments as are received from the Transfer Agent. The
Custodian will provide timely notification to the Trust and
the Transfer Agent of any receipt by it of payments for
Shares of the respective Fund.
2.6Availability of Federal Funds. Upon mutual agreement between
the Trust and the Custodian, the Custodian shall make federal
funds available to the Funds as of specified times agreed
upon from time to time by the Trust and the Custodian in the
amount of checks, clearing house funds, and other non-federal
funds received in payment for Shares of the Funds which are
deposited into the Funds' accounts.
2.7Collection of Income.
(1)The Custodian shall collect on a timely basis all income
and other payments with respect to registered securities
held hereunder to which each Fund shall be entitled
either by law or pursuant to custom in the securities
business, and shall collect on a timely basis all income
and other payments with respect to bearer securities if,
on the date of payment by the issuer, such securities are
held by the Custodian or its agent thereof and shall
credit such income, as collected, to each Fund's
custodian account. Without limiting the generality of
the foregoing, the Custodian shall detach and present for
payment all coupons and other income items requiring
presentation as and when they become due and shall
collect interest when due on securities held hereunder.
The collection of income due the Funds on securities
loaned pursuant to the provisions of Section 2.2 (10)
shall be the responsibility of the Trust. The Custodian
will have no duty or responsibility in connection
therewith, other than to provide the Trust with such
information or data as may be necessary to assist the
Trust in arranging for the timely delivery to the
Custodian of the income to which each Fund is properly
entitled.
(2)The Custodian shall promptly notify the Trust whenever
income due on securities is not collected in due course
and will provide the Trust with monthly reports of the
status of past due income unless the parties otherwise
agree.
2.8Payment of Fund Moneys. Upon receipt of Proper Instructions,
which may be continuing instructions when deemed appropriate
by the parties, the Custodian shall pay out moneys of each
Fund in the following cases only:
(1)Upon the purchase of securities, futures contracts or
options on futures contracts for the account of a Fund
but only (a) against the delivery of such securities, or
evidence of title to futures contracts, to the Custodian
(or any bank, banking firm or trust company doing
business in the United States or abroad which is
qualified under the 1940 Act to act as a custodian and
has been designated by the Custodian as its agent for
this purpose) registered in the name of the Fund or in
the name of a nominee of the Custodian referred to in
Section 2.3 hereof or in proper form for transfer, (b) in
the case of a purchase effected through a Securities
System, in accordance with the conditions set forth in
Section 2.12 hereof or (c) in the case of repurchase
agreements entered into between the Trust and any other
party, (i) against delivery of the securities either in
certificate form or through an entry crediting the
Custodian's account at the Federal Reserve Bank with such
securities or (ii) against delivery of the receipt
evidencing purchase for the account of the Fund of
securities owned by the Custodian along with written
evidence of the agreement by the Custodian to repurchase
such securities from the Fund;
(2)In connection with conversion, exchange or surrender of
securities owned by a Fund as set forth in Section 2.2
hereof;
(3)For the redemption or repurchase of Shares of a Fund
issued by the Trust as set forth in Section 2.10 hereof;
(4)For the payment of any expense or liability incurred by a
Fund, including but not limited to the following payments
for the account of the Fund: interest; taxes;
management, accounting, transfer agent and legal fees;
and operating expenses of the Fund, whether or not such
expenses are to be in whole or part capitalized or
treated as deferred expenses;
(5)For the payment of any dividends on Shares of a Fund
declared pursuant to the governing documents of the
Trust;
(6)For payment of the amount of dividends received in
respect of securities sold short;
(7)For any other proper purpose, but only upon receipt of,
in addition to Proper Instructions, a certified copy of a
resolution of the Executive Committee of the Trust on
behalf of a Fund signed by an officer of the Trust and
certified by its Secretary or an Assistant Secretary,
specifying the amount of such payment, setting forth the
purpose for which such payment is to be made, declaring
such purpose to be a proper purpose, and naming the
person or persons to whom such payment is to be made.
2.9Liability for Payment in Advance of Receipt of Securities
Purchased. In any and every case where payment for purchase
of securities for the account of a Fund is made by the
Custodian in advance of receipt of the securities purchased,
in the absence of specific written instructions from the
Trust to so pay in advance, the Custodian shall be absolutely
liable to the Fund for such securities to the same extent as
if the securities had been received by the Custodian.
2.10 Payments for Repurchases or Redemptions of Shares of a
Fund. From such funds as may be available for the purpose of
repurchasing or redeeming Shares of a Fund, but subject to
the limitations of the Declaration of Trust/Articles of
Incorporation and any applicable votes of the Board of the
Trust pursuant thereto, the Custodian shall, upon receipt of
instructions from the Transfer Agent, make funds available
for payment to holders of shares of such Fund who have
delivered to the Transfer Agent a request for redemption or
repurchase of their shares including without limitation
through bank drafts, automated clearinghouse facilities, or
by other means. In connection with the redemption or
repurchase of Shares of the Funds, the Custodian is
authorized upon receipt of instructions from the Transfer
Agent to wire funds to or through a commercial bank
designated by the redeeming shareholders.
2.11 Appointment of Agents. The Custodian may at any time or
times in its discretion appoint (and may at any time remove)
any other bank or trust company which is itself qualified
under the 1940 Act and any applicable state law or
regulation, to act as a custodian, as its agent to carry out
such of the provisions of this Section 2 as the Custodian may
from time to time direct; provided, however, that the
appointment of any agent shall not relieve the Custodian of
its responsibilities or liabilities hereunder.
2.12 Deposit of Fund Assets in Securities System. The
Custodian may deposit and/or maintain securities owned by the
Funds in a clearing agency registered with the Securities and
Exchange Commission ("SEC") under Section 17A of the Exchange
Act, which acts as a securities depository, or in the book-
entry system authorized by the U.S. Department of the
Treasury and certain federal agencies, collectively referred
to herein as "Securities System" in accordance with
applicable Federal Reserve Board and SEC rules and
regulations, if any, and subject to the following provisions:
(1)The Custodian may keep securities of each Fund in a
Securities System provided that such securities are
represented in an account ("Account") of the Custodian in
the Securities System which shall not include any assets
of the Custodian other than assets held as a fiduciary,
custodian or otherwise for customers;
(2)The records of the Custodian with respect to securities
of the Funds which are maintained in a Securities System
shall identify by book-entry those securities belonging
to each Fund;
(3)The Custodian shall pay for securities purchased for the
account of each Fund upon (i) receipt of advice from the
Securities System that such securities have been
transferred to the Account, and (ii) the making of an
entry on the records of the Custodian to reflect such
payment and transfer for the account of the Fund. The
Custodian shall transfer securities sold for the account
of a Fund upon (i) receipt of advice from the Securities
System that payment for such securities has been
transferred to the Account, and (ii) the making of an
entry on the records of the Custodian to reflect such
transfer and payment for the account of the Fund. Copies
of all advices from the Securities System of transfers of
securities for the account of a Fund shall identify the
Fund, be maintained for the Fund by the Custodian and be
provided to the Trust at its request. Upon request, the
Custodian shall furnish the Trust confirmation of each
transfer to or from the account of a Fund in the form of
a written advice or notice and shall furnish to the Trust
copies of daily transaction sheets reflecting each day's
transactions in the Securities System for the account of
a Fund.
(4)The Custodian shall provide the Trust with any report
obtained by the Custodian on the Securities System's
accounting system, internal accounting control and
procedures for safeguarding securities deposited in the
Securities System;
(5)The Custodian shall have received the initial
certificate, required by Section 9 hereof;
(6)Anything to the contrary in this Contract
notwithstanding, the Custodian shall be liable to the
Trust for any loss or damage to a Fund resulting from use
of the Securities System by reason of any negligence,
misfeasance or misconduct of the Custodian or any of its
agents or of any of its or their employees or from
failure of the Custodian or any such agent to enforce
effectively such rights as it may have against the
Securities System; at the election of the Trust, it shall
be entitled to be subrogated to the rights of the
Custodian with respect to any claim against the
Securities System or any other person which the Custodian
may have as a consequence of any such loss or damage if
and to the extent that a Fund has not been made whole for
any such loss or damage.
(7)The authorization contained in this Section 2.12 shall
not relieve the Custodian from using reasonable care and
diligence in making use of any Securities System.
2.13 Segregated Account. The Custodian shall upon receipt of
Proper Instructions establish and maintain a segregated
account or accounts for and on behalf of each Fund, into
which account or accounts may be transferred cash and/or
securities, including securities maintained in an account by
the Custodian pursuant to Section 2.12 hereof, (i) in
accordance with the provisions of any agreement among the
Trust, the Custodian and a broker-dealer registered under the
Exchange Act and a member of the NASD (or any futures
commission merchant registered under the Commodity Exchange
Act), relating to compliance with the rules of The Options
Clearing Corporation and of any registered national
securities exchange (or the Commodity Futures Trading
Commission or any registered contract market), or of any
similar organization or organizations, regarding escrow or
other arrangements in connection with transactions for a
Fund, (ii) for purpose of segregating cash or government
securities in connection with options purchased, sold or
written for a Fund or commodity futures contracts or options
thereon purchased or sold for a Fund, (iii) for the purpose
of compliance by the Trust or a Fund with the procedures
required by any release or releases of the SEC relating to
the maintenance of segregated accounts by registered
investment companies and (iv) for other proper corporate
purposes, but only, in the case of clause (iv), upon receipt
of, in addition to Proper Instructions, a certified copy of a
resolution of the Board or of the Executive Committee signed
by an officer of the Trust and certified by the Secretary or
an Assistant Secretary, setting forth the purpose or purposes
of such segregated account and declaring such purposes to be
proper corporate purposes.
2.14 Joint Repurchase Agreements. Upon the receipt of Proper
Instructions, the Custodian shall deposit and/or maintain any
assets of a Fund and any affiliated funds which are subject
to joint repurchase transactions in an account established
solely for such transactions for the Fund and its affiliated
funds. For purposes of this Section 2.14, "affiliated funds"
shall include all investment companies and their portfolios
for which subsidiaries or affiliates of Federated Investors
serve as investment advisers, distributors or administrators
in accordance with applicable exemptive orders from the SEC.
The requirements of segregation set forth in Section 2.1
shall be deemed to be waived with respect to such assets.
2.15 Ownership Certificates for Tax Purposes. The Custodian
shall execute ownership and other certificates and affidavits
for all federal and state tax purposes in connection with
receipt of income or other payments with respect to
securities of a Fund held by it and in connection with
transfers of securities.
2.16 Proxies. The Custodian shall, with respect to the
securities held hereunder, cause to be promptly executed by
the registered holder of such securities, if the securities
are registered otherwise than in the name of a Fund or a
nominee of a Fund, all proxies, without indication of the
manner in which such proxies are to be voted, and shall
promptly deliver to the Trust such proxies, all proxy
soliciting materials and all notices relating to such
securities.
2.17 Communications Relating to Fund Portfolio Securities.
The Custodian shall transmit promptly to the Trust all
written information (including, without limitation, pendency
of calls and maturities of securities and expirations of
rights in connection therewith and notices of exercise of
call and put options written by the Fund and the maturity of
futures contracts purchased or sold by the Fund) received by
the Custodian from issuers of the securities being held for
the Fund. With respect to tender or exchange offers, the
Custodian shall transmit promptly to the Trust all written
information received by the Custodian from issuers of the
securities whose tender or exchange is sought and from the
party (or his agents) making the tender or exchange offer.
If the Trust desires to take action with respect to any
tender offer, exchange offer or any other similar
transaction, the Trust shall notify the Custodian in writing
at least three business days prior to the date on which the
Custodian is to take such action. However, the Custodian
shall nevertheless exercise its best efforts to take such
action in the event that notification is received three
business days or less prior to the date on which action is
required.
2.18 Proper Instructions. Proper Instructions as used
throughout this Section 2 means a writing signed or initialed
by one or more person or persons as the Board shall have from
time to time authorized. Each such writing shall set forth
the specific transaction or type of transaction involved.
Oral instructions will be deemed to be Proper Instructions if
(a) the Custodian reasonably believes them to have been given
by a person previously authorized in Proper Instructions to
give such instructions with respect to the transaction
involved, and (b) the Trust promptly causes such oral
instructions to be confirmed in writing. Upon receipt of a
certificate of the Secretary or an Assistant Secretary as to
the authorization by the Board of the Trust accompanied by a
detailed description of procedures approved by the Board,
Proper Instructions may include communications effected
directly between electro-mechanical or electronic devices
provided that the Board and the Custodian are satisfied that
such procedures afford adequate safeguards for a Fund's
assets.
2.19 Actions Permitted Without Express Authority. The
Custodian may in its discretion, without express authority
from the Trust:
(1)make payments to itself or others for minor expenses of
handling securities or other similar items relating to
its duties under this Contract, provided that all such
payments shall be accounted for to the Trust in such form
that it may be allocated to the affected Fund;
(2)surrender securities in temporary form for securities in
definitive form;
(3)endorse for collection, in the name of a Fund, checks,
drafts and other negotiable instruments; and
(4)in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution,
purchase, transfer and other dealings with the securities
and property of each Fund except as otherwise directed by
the Trust.
2.20 Evidence of Authority. The Custodian shall be protected
in acting upon any instructions, notice, request, consent,
certificate or other instrument or paper reasonably believed
by it to be genuine and to have been properly executed on
behalf of a Fund. The Custodian may receive and accept a
certified copy of a vote of the Board of the Trust as
conclusive evidence (a) of the authority of any person to act
in accordance with such vote or (b) of any determination of
or any action by the Board pursuant to the Declaration of
Trust/Articles of Incorporation as described in such vote,
and such vote may be considered as in full force and effect
until receipt by the Custodian of written notice to the
contrary.
2.21 Notice to Trust by Custodian Regarding Cash Movement.
The Custodian will provide timely notification to the Trust
of any receipt of cash, income or payments to the Trust and
the release of cash or payment by the Trust.
3. Duties of Custodian With Respect to the Books of Account and
Calculation of Net Asset Value and Net Income.
The Custodian shall cooperate with and supply necessary
information to the entity or entities appointed by the Board of
the Trust to keep the books of account of each Fund and/or
compute the net asset value per share of the outstanding Shares
of each Fund or, if directed in writing to do so by the Trust,
shall itself keep such books of account and/or compute such net
asset value per share. If so directed, the Custodian shall also
calculate daily the net income of a Fund as described in the
Fund's currently effective prospectus and Statement of Additional
Information ("Prospectus") and shall advise the Trust and the
Transfer Agent daily of the total amounts of such net income and,
if instructed in writing by an officer of the Trust to do so,
shall advise the Transfer Agent periodically of the division of
such net income among its various components. The calculations
of the net asset value per share and the daily income of a Fund
shall be made at the time or times described from time to time in
the Fund's currently effective Prospectus.
4. Records.
The Custodian shall create and maintain all records relating to
its activities and obligations under this Contract in such manner
as will meet the obligations of the Trust and the Funds under the
1940 Act, with particular attention to Section 31 thereof and
Rules 31a-1 and 31a-2 thereunder, and specifically including
identified cost records used for tax purposes. All such records
shall be the property of the Trust and shall at all times during
the regular business hours of the Custodian be open for
inspection by duly authorized officers, employees or agents of
the Trust and employees and agents of the SEC. In the event of
termination of this Contract, the Custodian will deliver all such
records to the Trust, to a successor Custodian, or to such other
person as the Trust may direct. The Custodian shall supply daily
to the Trust a tabulation of securities owned by a Fund and held
by the Custodian and shall, when requested to do so by the Trust
and for such compensation as shall be agreed upon between the
Trust and the Custodian, include certificate numbers in such
tabulations.
5. Opinion of Funds' Independent Public Accountants/Auditors.
The Custodian shall take all reasonable action, as the Trust may
from time to time request, to obtain from year to year favorable
opinions from each Fund's independent public accountants/auditors
with respect to its activities hereunder in connection with the
preparation of the Fund's registration statement, periodic
reports, or any other reports to the SEC and with respect to any
other requirements of such Commission.
6. Reports to Trust by Independent Public Accountants/Auditors.
The Custodian shall provide the Trust, at such times as the Trust
may reasonably require, with reports by independent public
accountants/auditors for each Fund on the accounting system,
internal accounting control and procedures for safeguarding
securities, futures contracts and options on futures contracts,
including securities deposited and/or maintained in a Securities
System, relating to the services provided by the Custodian for
the Fund under this Contract; such reports shall be of sufficient
scope and in sufficient detail, as may reasonably be required by
the Trust, to provide reasonable assurance that any material
inadequacies would be disclosed by such examination and, if there
are no such inadequacies, the reports shall so state.
7. Compensation of Custodian.
The Custodian shall be entitled to reasonable compensation for
its services and expenses as Custodian, as agreed upon from time
to time between Company and the Custodian.
8. Responsibility of Custodian.
The Custodian shall be held to a standard of reasonable care in
carrying out the provisions of this Contract; provided, however,
that the Custodian shall be held to any higher standard of care
which would be imposed upon the Custodian by any applicable law
or regulation if such above stated standard of reasonable care
was not part of this Contract. The Custodian shall be entitled
to rely on and may act upon advice of counsel (who may be counsel
for the Trust) on all matters, and shall be without liability for
any action reasonably taken or omitted pursuant to such advice,
provided that such action is not in violation of applicable
federal or state laws or regulations, and is in good faith and
without negligence. Subject to the limitations set forth in
Section 15 hereof, the Custodian shall be kept indemnified by the
Trust but only from the assets of the Fund involved in the issue
at hand and be without liability for any action taken or thing
done by it in carrying out the terms and provisions of this
Contract in accordance with the above standards.
In order that the indemnification provisions contained in this
Section 8 shall apply, however, it is understood that if in any
case the Trust may be asked to indemnify or save the Custodian
harmless, the Trust shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it is
further understood that the Custodian will use all reasonable
care to identify and notify the Trust promptly concerning any
situation which presents or appears likely to present the
probability of such a claim for indemnification. The Trust shall
have the option to defend the Custodian against any claim which
may be the subject of this indemnification, and in the event that
the Trust so elects it will so notify the Custodian and thereupon
the Trust shall take over complete defense of the claim, and the
Custodian shall in such situation initiate no further legal or
other expenses for which it shall seek indemnification under this
Section. The Custodian shall in no case confess any claim or
make any compromise in any case in which the Trust will be asked
to indemnify the Custodian except with the Trust's prior written
consent.
Notwithstanding the foregoing, the responsibility of the
Custodian with respect to redemptions effected by check shall be
in accordance with a separate Agreement entered into between the
Custodian and the Trust.
If the Trust requires the Custodian to take any action with
respect to securities, which action involves the payment of money
or which action may, in the reasonable opinion of the Custodian,
result in the Custodian or its nominee assigned to a Fund being
liable for the payment of money or incurring liability of some
other form, the Custodian may request the Trust, as a
prerequisite to requiring the Custodian to take such action, to
provide indemnity to the Custodian in an amount and form
satisfactory to the Custodian.
Subject to the limitations set forth in Section 15 hereof, the
Trust agrees to indemnify and hold harmless the Custodian and
its nominee from and against all taxes, charges, expenses,
assessments, claims and liabilities (including counsel fees)
(referred to herein as authorized charges) incurred or assessed
against it or its nominee in connection with the performance of
this Contract, except such as may arise from it or its nominee's
own failure to act in accordance with the standard of reasonable
care or any higher standard of care which would be imposed upon
the Custodian by any applicable law or regulation if such above-
stated standard of reasonable care were not part of this
Contract. To secure any authorized charges and any advances of
cash or securities made by the Custodian to or for the benefit of
a Fund for any purpose which results in the Fund incurring an
overdraft at the end of any business day or for extraordinary or
emergency purposes during any business day, the Trust hereby
grants to the Custodian a security interest in and pledges to the
Custodian securities held for the Fund by the Custodian, in an
amount not to exceed 10 percent of the Fund's gross assets, the
specific securities to be designated in writing from time to time
by the Trust or the Fund's investment adviser. Should the Trust
fail to make such designation, or should it instruct the
Custodian to make advances exceeding the percentage amount set
forth above and should the Custodian do so, the Trust hereby
agrees that the Custodian shall have a security interest in all
securities or other property purchased for a Fund with the
advances by the Custodian, which securities or property shall be
deemed to be pledged to the Custodian, and the written
instructions of the Trust instructing their purchase shall be
considered the requisite description and designation of the
property so pledged for purposes of the requirements of the
Uniform Commercial Code. Should the Trust fail to cause a Fund
to repay promptly any authorized charges or advances of cash or
securities, subject to the provision of the second paragraph of
this Section 8 regarding indemnification, the Custodian shall be
entitled to use available cash and to dispose of pledged
securities and property as is necessary to repay any such
advances.
9. Effective Period, Termination and Amendment.
This Contract shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter
provided, may be amended at any time by mutual agreement of the
parties hereto and may be terminated by either party by an
instrument in writing delivered or mailed, postage prepaid to the
other party, such termination to take effect not sooner than
sixty (60) days after the date of such delivery or mailing;
provided, however that the Custodian shall not act under Section
2.12 hereof in the absence of receipt of an initial certificate
of the Secretary or an Assistant Secretary that the Board of the
Trust has approved the initial use of a particular Securities
System as required in each case by Rule 17f-4 under the 1940 Act;
provided further, however, that the Trust shall not amend or
terminate this Contract in contravention of any applicable
federal or state regulations, or any provision of the Declaration
of Trust/Articles of Incorporation, and further provided, that
the Trust may at any time by action of its Board (i) substitute
another bank or trust company for the Custodian by giving notice
as described above to the Custodian, or (ii) immediately
terminate this Contract in the event of the appointment of a
conservator or receiver for the Custodian by the appropriate
banking regulatory agency or upon the happening of a like event
at the direction of an appropriate regulatory agency or court of
competent jurisdiction.
Upon termination of the Contract, the Trust shall pay to the
Custodian such compensation as may be due as of the date of such
termination and shall likewise reimburse the Custodian for its
costs, expenses and disbursements.
10. Successor Custodian.
If a successor custodian shall be appointed by the Board of the
Trust, the Custodian shall, upon termination, deliver to such
successor custodian at the office of the Custodian, duly endorsed
and in the form for transfer, all securities then held by it
hereunder for each Fund and shall transfer to separate accounts
of the successor custodian all of each Fund's securities held in
a Securities System.
If no such successor custodian shall be appointed, the Custodian
shall, in like manner, upon receipt of a certified copy of a vote
of the Board of the Trust, deliver at the office of the Custodian
and transfer such securities, funds and other properties in
accordance with such vote.
In the event that no written order designating a successor
custodian or certified copy of a vote of the Board shall have
been delivered to the Custodian on or before the date when such
termination shall become effective, then the Custodian shall have
the right to deliver to a bank or trust company, which is a
"bank" as defined in the 1940 Act, (delete "doing business ...
Massachusetts" unless SSBT is the Custodian) doing business in
Boston, Massachusetts, of its own selection, having an aggregate
capital, surplus, and undivided profits, as shown by its last
published report, of not less than $100,000,000, all securities,
funds and other properties held by the Custodian and all
instruments held by the Custodian relative thereto and all other
property held by it under this Contract for each Fund and to
transfer to separate accounts of such successor custodian all of
each Fund's securities held in any Securities System.
Thereafter, such bank or trust company shall be the successor of
the Custodian under this Contract.
In the event that securities, funds and other properties remain
in the possession of the Custodian after the date of termination
hereof owing to failure of the Trust to procure the certified
copy of the vote referred to or of the Board to appoint a
successor custodian, the Custodian shall be entitled to fair
compensation for its services during such period as the Custodian
retains possession of such securities, funds and other properties
and the provisions of this Contract relating to the duties and
obligations of the Custodian shall remain in full force and
effect.
11. Interpretive and Additional Provisions.
In connection with the operation of this Contract, the Custodian
and the Trust may from time to time agree on such provisions
interpretive of or in addition to the provisions of this Contract
as may in their joint opinion be consistent with the general
tenor of this Contract. Any such interpretive or additional
provisions shall be in a writing signed by both parties and shall
be annexed hereto, provided that no such interpretive or
additional provisions shall contravene any applicable federal or
state regulations or any provision of the Declaration of
Trust/Articles of Incorporation. No interpretive or additional
provisions made as provided in the preceding sentence shall be
deemed to be an amendment of this Contract.
12. Massachusetts Law to Apply.
This Contract shall be construed and the provisions thereof
interpreted under and in accordance with laws of The Commonwealth
of Massachusetts.
13. Notices.
Except as otherwise specifically provided herein, Notices and
other writings delivered or mailed postage prepaid to the Trust
at Federated Investors Tower, Pittsburgh, Pennsylvania, 15222-
3779, or to the Custodian at address for SSBT only: 225 Franklin
Street, Boston, Massachusetts, 02110, or to such other address as
the Trust or the Custodian may hereafter specify, shall be deemed
to have been properly delivered or given hereunder to the
respective address.
14. Counterparts.
This Contract may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original.
15. Limitations of Liability.
The Custodian is expressly put on notice of the limitation of
liability as set forth in Article XI of the Declaration of Trust
of those Trusts which are business trusts and agrees that the
obligations and liabilities assumed by the Trust and any Fund
pursuant to this Contract, including, without limitation, any
obligation or liability to indemnify the Custodian pursuant to
Section 8 hereof, shall be limited in any case to the relevant
Fund and its assets and that the Custodian shall not seek
satisfaction of any such obligation from the shareholders of the
relevant Fund, from any other Fund or its shareholders or from
the Trustees, Officers, employees or agents of the Trust, or any
of them. In addition, in connection with the discharge and
satisfaction of any claim made by the Custodian against the
Trust, for whatever reasons,
[INTENTIONALLY LEFT BLANK]
involving more than one Fund, the Trust shall have the exclusive
right to determine the appropriate allocations of liability for
any such claim between or among the Funds.
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and behalf by its duly authorized
representative and its seal to be hereunder affixed effective as of
the 1st day of December, 1993.
ATTEST: INVESTMENT COMPANIES
/s/John G. McGonigle_________ By /s/John G. Donahue__________
John G. McGonigle John F. Donahue
Secretary Chairman
ATTEST: STATE STREET BANK AND TRUST
COMPANY
/s/ Ed McKenzie______________ By /s/ F. J. Sidoti, Jr.____________
(Assistant) Secretary Typed Name: Frank J. Sidoti, Jr.
Typed Name: Ed McKenzie Title: Vice President
ATTEST: FEDERATED SERVICES COMPANY
/s/ Jeannette Fisher-Garber______ By /s/ James J. Dolan____________
Jeannette Fisher-Garber James J. Dolan
Secretary President
EXHIBIT 1
<TABLE>
<S> <C>
CONTRACT
DATE INVESTMENT COMPANY
9/01/95 Federated U.S. Government Securities Fund: 5-10 Years
</TABLE>
Exhibit 9(ii) under Form N-1A
Exhibit 10 (iii) under Item 601/Reg. S-K
AGREEMENT
for
FUND ACCOUNTING,
SHAREHOLDER RECORDKEEPING,
and
CUSTODY SERVICES PROCUREMENT
AGREEMENT made as of December 1, 1994, by and between those
investment companies listed on Exhibit 1 as may be amended from time
to time, having their principal office and place of business at
Federated Investors Tower, Pittsburgh, PA 15222-3779 (the "Trust"),
on behalf of the portfolios (individually referred to herein as a
"Fund" and collectively as "Funds") of the Trust, and FEDERATED
SERVICES COMPANY, a Delaware business trust, having its principal
office and place of business at Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779 (the "Company").
WHEREAS, the Trust is registered as an open-end management
investment company under the Investment Company Act of 1940, as
amended (the 1940 "Act"), with authorized and issued shares of
capital stock or beneficial interest ("Shares"); and
WHEREAS, the Trust may desire to retain the Company to provide
certain pricing, accounting and recordkeeping services for each of
the Funds, including any classes of shares issued by any Fund
("Classes") if so indicated on Exhibit 1, and the Company is willing
to furnish such services; and
WHEREAS, the Trust may desire to appoint the Company as its
transfer agent, dividend disbursing agent if so indicated on Exhibit
1, and agent in connection with certain other activities, and the
Company desires to accept such appointment; and
WHEREAS, the Trust may desire to appoint the Company as its agent
to select, negotiate and subcontract for custodian services from an
approved list of qualified banks if so indicated on Exhibit 1, and
the Company desires to accept such appointment; and
WHEREAS, from time to time the Trust may desire and may instruct
the Company to subcontract for the performance of certain of its
duties and responsibilities hereunder to State Street Bank and Trust
Company or another agent (the "Agent"); and
WHEREAS, the words Trust and Fund may be used interchangeably for
those investment companies consisting of only one portfolio;
NOW THEREFORE, in consideration of the premises and mutual
covenants herein contained, and intending to be legally bound
hereby, the parties hereto agree as follows:
SECTION ONE: Fund Accounting.
Article 1. Appointment.
The Trust hereby appoints the Company to provide certain pricing
and accounting services to the Funds, and/or the Classes, for the
period and on the terms set forth in this Agreement. The Company
accepts such appointment and agrees to furnish the services herein
set forth in return for the compensation as provided in Article 3 of
this Section.
Article 2. The Company's Duties.
Subject to the supervision and control of the Trust's Board of
Trustees or Directors ("Board"), the Company will assist the Trust
with regard to fund accounting for the Trust, and/or the Funds,
and/or the Classes, and in connection therewith undertakes to
perform the following specific services;
A. Value the assets of the Funds using: primarily, market
quotations, including the use of matrix pricing, supplied by
the independent pricing services selected by the Company in
consultation with the adviser, or sources selected by the
adviser, and reviewed by the board; secondarily, if a
designated pricing service does not provide a price for a
security which the Company believes should be available by
market quotation, the Company may obtain a price by calling
brokers designated by the investment adviser of the fund
holding the security, or if the adviser does not supply the
names of such brokers, the Company will attempt on its own to
find brokers to price those securities; thirdly, for
securities for which no market price is available, the Pricing
Committee of the Board will determine a fair value in good
faith. Consistent with Rule 2a-4 of the 40 Act, estimates may
be used where necessary or appropriate. The Company's
obligations with regard to the prices received from outside
pricing services and designated brokers or other outside
sources, is to exercise reasonable care in the supervision of
the pricing agent. The Company is not the guarantor of the
securities prices received from such agents and the Company is
not liable to the Fund for potential errors in valuing a
Fund's assets or calculating the net asset value per share of
such Fund or Class when the calculations are based upon such
prices. All of the above sources of prices used as described
are deemed by the Company to be authorized sources of security
prices. The Company provides daily to the adviser the
securities prices used in calculating the net asset value of
the fund, for its use in preparing exception reports for those
prices on which the adviser has comment. Further, upon receipt
of the exception reports generated by the adviser, the Company
diligently pursues communication regarding exception reports
with the designated pricing agents.
B. Determine the net asset value per share of each Fund and/or
Class, at the time and in the manner from time to time
determined by the Board and as set forth in the Prospectus and
Statement of Additional Information ("Prospectus") of each
Fund;
C. Calculate the net income of each of the Funds, if any;
D. Calculate capital gains or losses of each of the Funds
resulting from sale or disposition of assets, if any;
E. Maintain the general ledger and other accounts, books and
financial records of the Trust, including for each Fund,
and/or Class, as required under Section 31(a) of the 1940 Act
and the Rules thereunder in connection with the services
provided by the Company;
F. Preserve for the periods prescribed by Rule 31a-2 under the
1940 Act the records to be maintained by Rule 31a-1 under the
1940 Act in connection with the services provided by the
Company. The Company further agrees that all such records it
maintains for the Trust are the property of the Trust and
further agrees to surrender promptly to the Trust such records
upon the Trust's request;
G. At the request of the Trust, prepare various reports or other
financial documents required by federal, state and other
applicable laws and regulations; and
H. Such other similar services as may be reasonably requested by
the Trust.
Article 3. Compensation and Allocation of Expenses.
A. The Funds will compensate the Company for its services
rendered pursuant to Section One of this Agreement in
accordance with the fees agreed upon from time to time between
the parties hereto. Such fees do not include out-of-pocket
disbursements of the Company for which the Funds shall
reimburse the Company upon receipt of a separate invoice. Out-
of-pocket disbursements shall include, but shall not be
limited to, the items agreed upon between the parties from
time to time.
B. The Fund and/or the Class, and not the Company, shall bear the
cost of: custodial expenses; membership dues in the Investment
Company Institute or any similar organization; transfer agency
expenses; investment advisory expenses; costs of printing and
mailing stock certificates, Prospectuses, reports and notices;
administrative expenses; interest on borrowed money; brokerage
commissions; taxes and fees payable to federal, state and
other governmental agencies; fees of Trustees or Directors of
the Trust; independent auditors expenses; Federated
Administrative Services and/or Federated Administrative
Services, Inc. legal and audit department expenses billed to
Federated Services Company for work performed related to the
Trust, the Funds, or the Classes; law firm expenses; or other
expenses not specified in this Article 3 which may be properly
payable by the Funds and/or classes.
C. The compensation and out-of-pocket expenses shall be accrued
by the Fund and shall be paid to the Company no less
frequently than monthly, and shall be paid daily upon request
of the Company. The Company will maintain detailed information
about the compensation and out-of-pocket expenses by Fund and
Class.
D. Any schedule of compensation agreed to hereunder, as may be
adjusted from time to time, shall be dated and signed by a
duly authorized officer of the Trust and/or the Funds and a
duly authorized officer of the Company.
E. The fee for the period from the effective date of this
Agreement with respect to a Fund or a Class to the end of the
initial month shall be prorated according to the proportion
that such period bears to the full month period. Upon any
termination of this Agreement before the end of any month, the
fee for such period shall be prorated according to the
proportion which such period bears to the full month period.
For purposes of determining fees payable to the Company, the
value of the Fund's net assets shall be computed at the time
and in the manner specified in the Fund's Prospectus.
F. The Company, in its sole discretion, may from time to time
subcontract to, employ or associate with itself such person or
persons as the Company may believe to be particularly suited
to assist it in performing services under this Section One.
Such person or persons may be third-party service providers,
or they may be officers and employees who are employed by both
the Company and the Funds. The compensation of such person or
persons shall be paid by the Company and no obligation shall
be incurred on behalf of the Trust, the Funds, or the Classes
in such respect.
SECTION TWO: Shareholder Recordkeeping.
Article 4. Terms of Appointment.
Subject to the terms and conditions set forth in this Agreement,
the Trust hereby appoints the Company to act as, and the Company
agrees to act as, transfer agent and dividend disbursing agent for
each Fund's Shares, and agent in connection with any accumulation,
open-account or similar plans provided to the shareholders of any
Fund (Shareholder(s)), including without limitation any periodic
investment plan or periodic withdrawal program.
As used throughout this Agreement, a "Proper Instruction" means a
writing signed or initialed by one or more person or persons as the
Board shall have from time to time authorized. Each such writing
shall set forth the specific transaction or type of transaction
involved. Oral instructions will be deemed to be Proper Instructions
if (a) the Company reasonably believes them to have been given by a
person previously authorized in Proper Instructions to give such
instructions with respect to the transaction involved, and (b) the
Trust, or the Fund, and the Company promptly cause such oral
instructions to be confirmed in writing. Proper Instructions may
include communications effected directly between electro-mechanical
or electronic devices provided that the Trust, or the Fund, and the
Company are satisfied that such procedures afford adequate
safeguards for the Fund's assets. Proper Instructions may only be
amended in writing.
Article 5. Duties of the Company.
The Company shall perform the following services in accordance
with Proper Instructions as may be provided from time to time by the
Trust as to any Fund:
A. Purchases
(1) The Company shall receive orders and payment for the
purchase of shares and promptly deliver payment and
appropriate documentation therefore to the custodian of
the relevant Fund, (the "Custodian"). The Company shall
notify the Fund and the Custodian on a daily basis of the
total amount of orders and payments so delivered.
(2) Pursuant to purchase orders and in accordance with the
Fund's current Prospectus, the Company shall compute and
issue the appropriate number of Shares of each Fund
and/or Class and hold such Shares in the appropriate
Shareholder accounts.
(3) For certificated Funds and/or Classes, if a Shareholder
or its agent requests a certificate, the Company, as
Transfer Agent, shall countersign and mail by first class
mail, a certificate to the Shareholder at its address as
set forth on the transfer books of the Funds, and/or
Classes, subject to any Proper Instructions regarding the
delivery of certificates.
(4) In the event that any check or other order for the
purchase of Shares of the Fund and/or Class is returned
unpaid for any reason, the Company shall debit the Share
account of the Shareholder by the number of Shares that
had been credited to its account upon receipt of the
check or other order, promptly mail a debit advice to the
Shareholder, and notify the Fund and/or Class of its
action. In the event that the amount paid for such Shares
exceeds proceeds of the redemption of such Shares plus
the amount of any dividends paid with respect to such
Shares, the Fund and/the Class or its distributor will
reimburse the Company on the amount of such excess.
B. Distribution
(1) Upon notification by the Funds of the declaration of any
distribution to Shareholders, the Company shall act as
Dividend Disbursing Agent for the Funds in accordance
with the provisions of its governing document and the
then-current Prospectus of the Fund. The Company shall
prepare and mail or credit income, capital gain, or any
other payments to Shareholders. As the Dividend
Disbursing Agent, the Company shall, on or before the
payment date of any such distribution, notify the
Custodian of the estimated amount required to pay any
portion of said distribution which is payable in cash and
request the Custodian to make available sufficient funds
for the cash amount to be paid out. The Company shall
reconcile the amounts so requested and the amounts
actually received with the Custodian on a daily basis. If
a Shareholder is entitled to receive additional Shares by
virtue of any such distribution or dividend, appropriate
credits shall be made to the Shareholder's account, for
certificated Funds and/or Classes, delivered where
requested; and
(2) The Company shall maintain records of account for each
Fund and Class and advise the Trust, each Fund and Class
and its Shareholders as to the foregoing.
C. Redemptions and Transfers
(1) The Company shall receive redemption requests and
redemption directions and, if such redemption requests
comply with the procedures as may be described in the
Fund Prospectus or set forth in Proper Instructions,
deliver the appropriate instructions therefor to the
Custodian. The Company shall notify the Funds on a daily
basis of the total amount of redemption requests
processed and monies paid to the Company by the Custodian
for redemptions.
(2) At the appropriate time upon receiving redemption
proceeds from the Custodian with respect to any
redemption, the Company shall pay or cause to be paid the
redemption proceeds in the manner instructed by the
redeeming Shareholders, pursuant to procedures described
in the then-current Prospectus of the Fund.
(3) If any certificate returned for redemption or other
request for redemption does not comply with the
procedures for redemption approved by the Fund, the
Company shall promptly notify the Shareholder of such
fact, together with the reason therefor, and shall effect
such redemption at the price applicable to the date and
time of receipt of documents complying with said
procedures.
(4) The Company shall effect transfers of Shares by the
registered owners thereof.
(5) The Company shall identify and process abandoned accounts
and uncashed checks for state escheat requirements on an
annual basis and report such actions to the Fund.
D. Recordkeeping
(1) The Company shall record the issuance of Shares of each
Fund, and/or Class, and maintain pursuant to applicable
rules of the Securities and Exchange Commission ("SEC") a
record of the total number of Shares of the Fund and/or
Class which are authorized, based upon data provided to
it by the Fund, and issued and outstanding. The Company
shall also provide the Fund on a regular basis or upon
reasonable request with the total number of Shares which
are authorized and issued and outstanding, but shall have
no obligation when recording the issuance of Shares,
except as otherwise set forth herein, to monitor the
issuance of such Shares or to take cognizance of any laws
relating to the issue or sale of such Shares, which
functions shall be the sole responsibility of the Funds.
(2) The Company shall establish and maintain records pursuant
to applicable rules of the SEC relating to the services
to be performed hereunder in the form and manner as
agreed to by the Trust or the Fund to include a record
for each Shareholder's account of the following:
(a) Name, address and tax identification number (and
whether such number has been certified);
(b) Number of Shares held;
(c) Historical information regarding the account,
including dividends paid and date and price for all
transactions;
(d) Any stop or restraining order placed against the
account;
(e) Information with respect to withholding in the case
of a foreign account or an account for which
withholding is required by the Internal Revenue
Code;
(f) Any dividend reinvestment order, plan application,
dividend address and correspondence relating to the
current maintenance of the account;
(g) Certificate numbers and denominations for any
Shareholder holding certificates;
(h) Any information required in order for the Company to
perform the calculations contemplated or required by
this Agreement.
(3) The Company shall preserve any such records required to
be maintained pursuant to the rules of the SEC for the
periods prescribed in said rules as specifically noted
below. Such record retention shall be at the expense of
the Company, and such records may be inspected by the
Fund at reasonable times. The Company may, at its option
at any time, and shall forthwith upon the Fund's demand,
turn over to the Fund and cease to retain in the
Company's files, records and documents created and
maintained by the Company pursuant to this Agreement,
which are no longer needed by the Company in performance
of its services or for its protection. If not so turned
over to the Fund, such records and documents will be
retained by the Company for six years from the year of
creation, during the first two of which such documents
will be in readily accessible form. At the end of the six
year period, such records and documents will either be
turned over to the Fund or destroyed in accordance with
Proper Instructions.
E. Confirmations/Reports
(1) The Company shall furnish to the Fund periodically the
following information:
(a) A copy of the transaction register;
(b) Dividend and reinvestment blotters;
(c) The total number of Shares issued and outstanding in
each state for "blue sky" purposes as determined
according to Proper Instructions delivered from time
to time by the Fund to the Company;
(d) Shareholder lists and statistical information;
(e) Payments to third parties relating to distribution
agreements, allocations of sales loads, redemption
fees, or other transaction- or sales-related
payments;
(f) Such other information as may be agreed upon from
time to time.
(2) The Company shall prepare in the appropriate form, file
with the Internal Revenue Service and appropriate state
agencies, and, if required, mail to Shareholders, such
notices for reporting dividends and distributions paid as
are required to be so filed and mailed and shall withhold
such sums as are required to be withheld under applicable
federal and state income tax laws, rules and regulations.
(3) In addition to and not in lieu of the services set forth
above, the Company shall:
(a) Perform all of the customary services of a transfer
agent, dividend disbursing agent and, as relevant,
agent in connection with accumulation, open-account
or similar plans (including without limitation any
periodic investment plan or periodic withdrawal
program), including but not limited to: maintaining
all Shareholder accounts, mailing Shareholder
reports and Prospectuses to current Shareholders,
withholding taxes on accounts subject to back-up or
other withholding (including non-resident alien
accounts), preparing and filing reports on U.S.
Treasury Department Form 1099 and other appropriate
forms required with respect to dividends and
distributions by federal authorities for all
Shareholders, preparing and mailing confirmation
forms and statements of account to Shareholders for
all purchases and redemptions of Shares and other
conformable transactions in Shareholder accounts,
preparing and mailing activity statements for
Shareholders, and providing Shareholder account
information; and
(b) provide a system which will enable the Fund to
monitor the total number of Shares of each Fund
and/or Class sold in each state ("blue sky
reporting"). The Fund shall by Proper Instructions
(i) identify to the Company those transactions and
assets to be treated as exempt from the blue sky
reporting for each state and (ii) verify the
classification of transactions for each state on the
system prior to activation and thereafter monitor
the daily activity for each state. The
responsibility of the Company for each Fund's and/or
Class's state blue sky registration status is
limited solely to the recording of the initial
classification of transactions or accounts with
regard to blue sky compliance and the reporting of
such transactions and accounts to the Fund as
provided above.
F. Other Duties
(1) The Company shall answer correspondence from Shareholders
relating to their Share accounts and such other
correspondence as may from time to time be addressed to
the Company;
(2) The Company shall prepare Shareholder meeting lists, mail
proxy cards and other material supplied to it by the Fund
in connection with Shareholder Meetings of each Fund;
receive, examine and tabulate returned proxies, and
certify the vote of the Shareholders;
(3) The Company shall establish and maintain facilities and
procedures for safekeeping of stock certificates, check
forms and facsimile signature imprinting devices, if any;
and for the preparation or use, and for keeping account
of, such certificates, forms and devices.
Article 6. Duties of the Trust.
A. Compliance
The Trust or Fund assume full responsibility for the
preparation, contents and distribution of their own and/or
their classes' Prospectus and for complying with all
applicable requirements of the Securities Act of 1933, as
amended (the 1933 Act), the 1940 Act and any laws, rules and
regulations of government authorities having jurisdiction.
B. Share Certificates
The Trust shall supply the Company with a sufficient supply of
blank Share certificates and from time to time shall renew
such supply upon request of the Company. Such blank Share
certificates shall be properly signed, manually or by
facsimile, if authorized by the Trust and shall bear the seal
of the Trust or facsimile thereof; and notwithstanding the
death, resignation or removal of any officer of the Trust
authorized to sign certificates, the Company may continue to
countersign certificates which bear the manual or facsimile
signature of such officer until otherwise directed by the
Trust.
C. Distributions
The Fund shall promptly inform the Company of the declaration
of any dividend or distribution on account of any Fund's
shares.
Article 7. Compensation and Expenses.
A. Annual Fee
For performance by the Company pursuant to Section Two of this
Agreement, the Trust and/or the Fund agree to pay the Company
an annual maintenance fee for each Shareholder account as
agreed upon between the parties and as may be added to or
amended from time to time. Such fees may be changed from time
to time subject to written agreement between the Trust and the
Company. Pursuant to information in the Fund Prospectus or
other information or instructions from the Fund, the Company
may sub-divide any Fund into Classes or other sub-components
for recordkeeping purposes. The Company will charge the Fund
the same fees for each such Class or sub-component the same as
if each were a Fund.
B. Reimbursements
In addition to the fee paid under Article 7A above, the Trust
and/or Fund agree to reimburse the Company for out-of-pocket
expenses or advances incurred by the Company for the items
agreed upon between the parties, as may be added to or amended
from time to time. In addition, any other expenses incurred by
the Company at the request or with the consent of the Trust
and/or the Fund, will be reimbursed by the appropriate Fund.
C. Payment
The compensation and out-of-pocket expenses shall be accrued
by the Fund and shall be paid to the Company no less
frequently than monthly, and shall be paid daily upon request
of the Company. The Company will maintain detailed information
about the compensation and out-of-pocket expenses by Fund and
Class.
D. Any schedule of compensation agreed to hereunder, as may be
adjusted from time to time, shall be dated and signed by a
duly authorized officer of the Trust and/or the Funds and a
duly authorized officer of the Company.
Article 8. Assignment of Shareholder Recordkeeping.
Except as provided below, no right or obligation under this
Section Two may be assigned by either party without the written
consent of the other party.
A. This Agreement shall inure to the benefit of and be binding
upon the parties and their respective permitted successors and
assigns.
B. The Company may without further consent on the part of the
Trust subcontract for the performance hereof with (A) State
Street Bank and its subsidiary, Boston Financial Data
Services, Inc., a Massachusetts Trust (BFDS), which is duly
registered as a transfer agent pursuant to Section 17A(c)(1)
of the Securities Exchange Act of 1934, as amended, or any
succeeding statute (Section 17A(c)(1)), or (B)a BFDS
subsidiary duly registered as a transfer agent pursuant to
Section 17A(c)(1), or (C) a BFDS affiliate, or (D) such other
provider of services duly registered as a transfer agent under
Section 17A(c)(1) as Company shall select; provided, however,
that the Company shall be as fully responsible to the Trust
for the acts and omissions of any subcontractor as it is for
its own acts and omissions; or
C. The Company shall upon instruction from the Trust subcontract
for the performance hereof with an Agent selected by the
Trust, other than BFDS or a provider of services selected by
Company, as described in (2) above; provided, however, that
the Company shall in no way be responsible to the Trust for
the acts and omissions of the Agent.
SECTION THREE: Custody Services Procurement.
Article 9. Appointment.
The Trust hereby appoints Company as its agent to evaluate and
obtain custody services from a financial institution that (i) meets
the criteria established in Section 17(f) of the 1940 Act and (ii)
has been approved by the Board as eligible for selection by the
Company as a custodian (the Eligible Custodian). The Company
accepts such appointment.
Article 10. The Company and Its Duties.
Subject to the review, supervision and control of the Board, the
Company shall:
A. evaluate the nature and the quality of the custodial services
provided by the Eligible Custodian;
B. employ the Eligible Custodian to serve on behalf of the Trust
as Custodian of the Trust's assets substantially on the terms
set forth as the form of agreement in Exhibit 2;
C. negotiate and enter into agreements with the Custodians for
the benefit of the Trust, with the Trust as a party to each
such agreement. The Company shall not be a party to any
agreement with any such Custodian;
D. establish procedures to monitor the nature and the quality of
the services provided by the Custodians;
E. continuously monitor the nature and the quality of services
provided by the Custodians; and
F. periodically provide to the Trust (i) written reports on the
activities and services of the Custodians; (ii) the nature and
amount of disbursement made on account of the Trust with
respect to each custodial agreement; and (iii) such other
information as the Board shall reasonably request to enable it
to fulfill its duties and obligations under Sections 17(f) and
36(b) of the 1940 Act and other duties and obligations
thereof.
Article 11. Fees and Expenses.
A. Annual Fee
For the performance by the Company pursuant to Section Three
of this Agreement, the Trust and/or the Fund agree to pay the
Company an annual fee as agreed upon between the parties.
B. Reimbursements
In addition to the fee paid under Section 11A above, the Trust
and/or Fund agree to reimburse the Company for out-of-pocket
expenses or advances incurred by the Company for the items
agreed upon between the parties, as may be added to or amended
from time to time. In addition, any other expenses incurred by
the Company at the request or with the consent of the Trust
and/or the Fund, will be reimbursed by the appropriate Fund.
C. Payment
The compensation and out-of-pocket expenses shall be accrued
by the Fund and shall be paid to the Company no less
frequently than monthly, and shall be paid daily upon request
of the Company. The Company will maintain detailed information
about the compensation and out-of-pocket expenses by Fund.
D. Any schedule of compensation agreed to hereunder, as may be
adjusted from time to time, shall be dated and signed by a
duly authorized officer of the Trust and/or the Funds and a
duly authorized officer of the Company.
Article 12. Representations.
The Company represents and warrants that it has obtained all
required approvals from all government or regulatory authorities
necessary to enter into this arrangement and to provide the services
contemplated in Section Three of this Agreement.
SECTION FOUR: General Provisions.
Article 13. Documents.
A. In connection with the appointment of the Company under this
Agreement, the Trust shall file with the Company the following
documents:
(1) A copy of the Charter and By-Laws of the Trust and all
amendments thereto;
(2) A copy of the resolution of the Board of the Trust
authorizing this Agreement;
(3) Specimens of all forms of outstanding Share certificates
of the Trust or the Funds in the forms approved by the
Board of the Trust with a certificate of the Secretary of
the Trust as to such approval;
(4) All account application forms and other documents
relating to Shareholders accounts; and
(5) A copy of the current Prospectus for each Fund.
B. The Fund will also furnish from time to time the following
documents:
(1) Each resolution of the Board of the Trust authorizing the
original issuance of each Fund's, and/or Class's Shares;
(2) Each Registration Statement filed with the SEC and
amendments thereof and orders relating thereto in effect
with respect to the sale of Shares of any Fund, and/or
Class;
(3) A certified copy of each amendment to the governing
document and the By-Laws of the Trust;
(4) Certified copies of each vote of the Board authorizing
officers to give Proper Instructions to the Custodian and
agents for fund accountant, custody services procurement,
and shareholder recordkeeping or transfer agency
services;
(5) Specimens of all new Share certificates representing
Shares of any Fund, accompanied by Board resolutions
approving such forms;
(6) Such other certificates, documents or opinions which the
Company may, in its discretion, deem necessary or
appropriate in the proper performance of its duties; and
(7) Revisions to the Prospectus of each Fund.
Article 14. Representations and Warranties.
A. Representations and Warranties of the Company
The Company represents and warrants to the Trust that:
(1) It is a business trust duly organized and existing and in
good standing under the laws of the State of Delaware.
(2) It is duly qualified to carry on its business in the
State of Delaware.
(3) It is empowered under applicable laws and by its charter
and by-laws to enter into and perform this Agreement.
(4) All requisite corporate proceedings have been taken to
authorize it to enter into and perform its obligations
under this Agreement.
(5) It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties
and obligations under this Agreement.
(6) It is in compliance with federal securities law
requirements and in good standing as a transfer agent.
B. Representations and Warranties of the Trust
The Trust represents and warrants to the Company that:
(1) It is an investment company duly organized and existing
and in good standing under the laws of its state of
organization;
(2) It is empowered under applicable laws and by its Charter
and By-Laws to enter into and perform its obligations
under this Agreement;
(3) All corporate proceedings required by said Charter and By-
Laws have been taken to authorize it to enter into and
perform its obligations under this Agreement;
(4) The Trust is an open-end investment company registered
under the 1940 Act; and
(5) A registration statement under the 1933 Act will be
effective, and appropriate state securities law filings
have been made and will continue to be made, with respect
to all Shares of each Fund being offered for sale.
Article 15. Standard of Care and Indemnification.
A. Standard of Care
The Company shall be held to a standard of reasonable care in
carrying out the provisions of this Contract. The Company
shall be entitled to rely on and may act upon advice of
counsel (who may be counsel for the Trust) on all matters, and
shall be without liability for any action reasonably taken or
omitted pursuant to such advice, provided that such action is
not in violation of applicable federal or state laws or
regulations, and is in good faith and without negligence.
B. Indemnification by Trust
The Company shall not be responsible for and the Trust or Fund
shall indemnify and hold the Company, including its officers,
directors, shareholders and their agents employees and
affiliates, harmless against any and all losses, damages,
costs, charges, counsel fees, payments, expenses and
liabilities arising out of or attributable to:
(1) The acts or omissions of any Custodian, Adviser, Sub-
adviser or other party contracted by or approved by the
Trust or Fund,
(2) The reliance on or use by the Company or its agents or
subcontractors of information, records and documents in
proper form which
(a) are received by the Company or its agents or
subcontractors and furnished to it by or on behalf
of the Fund, its Shareholders or investors regarding
the purchase, redemption or transfer of Shares and
Shareholder account information;
(b) are received by the Company from independent pricing
services or sources for use in valuing the assets of
the Funds; or
(c) are received by the Company or its agents or
subcontractors from Advisers, Sub-advisers or other
third parties contracted by or approved by the Trust
of Fund for use in the performance of services under
this Agreement;
(d) have been prepared and/or maintained by the Fund or
its affiliates or any other person or firm on behalf
of the Trust.
(3) The reliance on, or the carrying out by the Company or
its agents or subcontractors of Proper Instructions of
the Trust or the Fund.
(4) The offer or sale of Shares in violation of any
requirement under the federal securities laws or
regulations or the securities laws or regulations of any
state that such Shares be registered in such state or in
violation of any stop order or other determination or
ruling by any federal agency or any state with respect to
the offer or sale of such Shares in such state.
Provided, however, that the Company shall not be
protected by this Article 15.A. from liability for any
act or omission resulting from the Company's willful
misfeasance, bad faith, negligence or reckless disregard
of its duties of failure to meet the standard of care set
forth in 15.A. above.
C. Reliance
At any time the Company may apply to any officer of the Trust
or Fund for instructions, and may consult with legal counsel
with respect to any matter arising in connection with the
services to be performed by the Company under this Agreement,
and the Company and its agents or subcontractors shall not be
liable and shall be indemnified by the Trust or the
appropriate Fund for any action reasonably taken or omitted by
it in reliance upon such instructions or upon the opinion of
such counsel provided such action is not in violation of
applicable federal or state laws or regulations. The Company,
its agents and subcontractors shall be protected and
indemnified in recognizing stock certificates which are
reasonably believed to bear the proper manual or facsimile
signatures of the officers of the Trust or the Fund, and the
proper countersignature of any former transfer agent or
registrar, or of a co-transfer agent or co-registrar.
D. Notification
In order that the indemnification provisions contained in this
Article 15 shall apply, upon the assertion of a claim for
which either party may be required to indemnify the other, the
party seeking indemnification shall promptly notify the other
party of such assertion, and shall keep the other party
advised with respect to all developments concerning such
claim. The party who may be required to indemnify shall have
the option to participate with the party seeking
indemnification in the defense of such claim. The party
seeking indemnification shall in no case confess any claim or
make any compromise in any case in which the other party may
be required to indemnify it except with the other party's
prior written consent.
Article 16. Termination of Agreement.
This Agreement may be terminated by either party upon one hundred
twenty (120) days written notice to the other. Should the Trust
exercise its rights to terminate, all out-of-pocket expenses
associated with the movement of records and materials will be borne
by the Trust or the appropriate Fund. Additionally, the Company
reserves the right to charge for any other reasonable expenses
associated with such termination. The provisions of Article 15 shall
survive the termination of this Agreement.
Article 17. Amendment.
This Agreement may be amended or modified by a written agreement
executed by both parties.
Article 18. Interpretive and Additional Provisions.
In connection with the operation of this Agreement, the Company
and the Trust may from time to time agree on such provisions
interpretive of or in addition to the provisions of this Agreement
as may in their joint opinion be consistent with the general tenor
of this Agreement. Any such interpretive or additional provisions
shall be in a writing signed by both parties and shall be annexed
hereto, provided that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any
provision of the Charter. No interpretive or additional provisions
made as provided in the preceding sentence shall be deemed to be an
amendment of this Agreement.
Article 19. Governing Law.
This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the
Commonwealth of Massachusetts
Article 20. Notices.
Except as otherwise specifically provided herein, Notices and
other writings delivered or mailed postage prepaid to the Trust at
Federated Investors Tower, Pittsburgh, Pennsylvania, 15222-3779, or
to the Company at Federated Investors Tower, Pittsburgh,
Pennsylvania, 15222-3779, or to such other address as the Trust or
the Company may hereafter specify, shall be deemed to have been
properly delivered or given hereunder to the respective address.
Article 21. Counterparts.
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original.
Article 22. Limitations of Liability of Trustees and Shareholders of
the Trust.
The execution and delivery of this Agreement have been authorized
by the Trustees of the Trust and signed by an authorized officer of
the Trust, acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officer shall be
deemed to have been made by any of them individually or to impose
any liability on any of them personally, and the obligations of this
Agreement are not binding upon any of the Trustees or Shareholders
of the Trust, but bind only the appropriate property of the Fund, or
Class, as provided in the Declaration of Trust.
Article 23. Limitations of Liability of Trustees and Shareholders of
the Company.
The execution and delivery of this Agreement have been authorized
by the Trustees of the Company and signed by an authorized officer
of the Company, acting as such, and neither such authorization by
such Trustees nor such execution and delivery by such officer shall
be deemed to have been made by any of them individually or to impose
any liability on any of them personally, and the obligations of this
Agreement are not binding upon any of the Trustees or Shareholders
of the Company, but bind only the property of the Company as
provided in the Declaration of Trust.
Article 24. Assignment.
This Agreement and the rights and duties hereunder shall not be
assignable with respect to the Trust or the Funds by either of the
parties hereto except by the specific written consent of the other
party.
Article 25. Merger of Agreement.
This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to
the subject hereof whether oral or written.
Article 26. Successor Agent.
If a successor agent for the Trust shall be appointed by the
Trust, the Company shall upon termination of this Agreement deliver
to such successor agent at the office of the Company all properties
of the Trust held by it hereunder. If no such successor agent shall
be appointed, the Company shall at its office upon receipt of Proper
Instructions deliver such properties in accordance with such
instructions.
In the event that no written order designating a successor agent
or Proper Instructions shall have been delivered to the Company on
or before the date when such termination shall become effective,
then the Company shall have the right to deliver to a bank or trust
company, which is a bank as defined in the 1940 Act, of its own
selection, having an aggregate capital, surplus, and undivided
profits, as shown by its last published report, of not less than
$2,000,000, all properties held by the Company under this Agreement.
Thereafter, such bank or trust company shall be the successor of the
Company under this Agreement.
Article 27. Force Majeure.
The Company shall have no liability for cessation of services
hereunder or any damages resulting therefrom to the Fund as a result
of work stoppage, power or other mechanical failure, natural
disaster, governmental action, communication disruption or other
impossibility of performance.
Article 28. Assignment; Successors.
This Agreement shall not be assigned by either party without the
prior written consent of the other party, except that either party
may assign to a successor all of or a substantial portion of its
business, or to a party controlling, controlled by, or under common
control with such party. Nothing in this Article 28 shall prevent
the Company from delegating its responsibilities to another entity
to the extent provided herein.
Article 29. Severability.
In the event any provision of this Agreement is held illegal,
void or unenforceable, the balance shall remain in effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed in their names and on their behalf under their seals
by and through their duly authorized officers, as of the day and
year first above written.
ATTEST: INVESTMENT COMPANIES
(listed on Exhibit 1)
/s/ John W. McGonigle_______ By:__/s/ John F. Donahue___
John W. McGonigle John F. Donahue
Secretary Chairman
ATTEST: FEDERATED SERVICES COMPANY
/s/ Jeannette Fisher-Garber By:_/s/ James J. Dolan_____
Jeannette Fisher-Garber James J. Dolan
Secretary President
EXHIBIT 1
<TABLE>
<S> <C>
CONTRACT
DATE INVESTMENT COMPANY
Portfolios
Classes
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10
YEARS
090195 Federated U.S. Government Securities Fund: 5-10 Years
090195 Institutional Shares
090195 Institutional Service Shares
FEDERATED SERVICES COMPANY provides the following services:
Fund Accounting
Shareholder Recordkeeping
Custody Services Procurement
</TABLE>
Page
Exhibit No. 9(i) on Form N-1A
Exhibit No. 10(ii) under Item 601 Reg/SK
ADMINISTRATIVE SERVICES AGREEMENT
This Administrative Services Agreement is made as of this first day
of March, 1994, between those investment companies listed on Exhibit 1, as
may be amended from time to time, having their principal office and place
of business at Federated Investors Tower, Pittsburgh PA 15222-3779
(individually referred to herein as "Fund" and collectively referred to as
"Funds), on behalf of the portfolios of the Funds, and Federated
Administrative Services, a Delaware business trust (herein called "FAS").
WHEREAS, the Funds desire to retain FAS as their Administrator to
provide them with Administrative Services (as herein defined), and FAS is
willing to render such services;
WHEREAS, the Funds are registered as open-end management investment
companies under the Investment Company Act of 1940, as amended (the "1940
Act"), with authorized and issued shares of capital stock or beneficial
interest ("Shares"); and
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein, the parties hereto agree as follows:
1. Appointment of Administrator. The Funds hereby appoint FAS as
Administrator of the Funds on the terms and conditions set forth in this
Agreement; and FAS hereby accepts such appointment and agrees to perform
the services and duties set forth in Section 2 of this Agreement in
consideration of the compensation provided for in Section 4 hereof.
2. Services and Duties. As Administrator, and subject to the
supervision and control of the Funds' Boards of Trustees or Directors, as
applicable (the "Boards"), FAS will provide facilities, equipment, and
personnel to carry out the following administrative services for operation
of the business and affairs of the Funds and each of their portfolios:
(a)prepare, file, and maintain the Funds' governing documents and
any amendments thereto, including the Declaration of Trust or
Articles of Incorporation, as appropriate,(which has already
been prepared and filed), the By-laws and minutes of meetings
of their Boards, Committees, and shareholders;
(b)prepare and file with the Securities and Exchange Commission
and the appropriate state securities authorities the
registration statements for the Funds and the Funds' shares and
all amendments thereto, reports to regulatory authorities and
shareholders, prospectuses, proxy statements, and such other
documents all as may be necessary to enable the Funds to make
continuous offerings of their shares, as applicable;
(c)prepare, negotiate, and administer contracts on behalf of the
Funds with, among others, each Fund's investment adviser,
distributor, custodian, and transfer agent, subject to any
applicable restrictions of the Boards or the 1940 Act;
(d)supervise the Funds' custodians in the maintenance of the
Funds' general ledgers and in the preparation of the Funds'
financial statements, including oversight of expense accruals
and payments, the determination of the net asset value of the
Funds and the declaration and payment of dividends and other
distributions to shareholders;
(e)calculate performance data of the Funds for dissemination to
information services covering the investment company industry;
(f)prepare and file the Funds' tax returns;
(g)examine and review the operations of the Funds' custodians and
transfer agents;
(h)coordinate the layout and printing of publicly disseminated
prospectuses and reports;
(i)perform internal audit examinations in accordance with a
charter to be adopted by FAS and the Funds;
(j)assist with the design, development, and operation of the
Funds;
(k)provide individuals reasonably acceptable to the Funds' Boards
for nomination, appointment, or election as officers of the
Funds, who will be responsible for the management of certain of
the Funds' affairs as determined by the Funds' Boards; and
(l)consult with the Funds and their Boards of Trustees or
Directors, as appropriate, on matters concerning the Funds and
their affairs.
The foregoing, along with any additional services that FAS shall
agree in writing to perform for the Funds hereunder, shall hereafter be
referred to as "Administrative Services." Administrative Services shall
not include any duties, functions, or services to be performed for any
Fund by such Fund's investment adviser, distributor, custodian, transfer
agent, or shareholder service agent, pursuant to their respective
agreements with such Fund.
3. Expenses. FAS shall be responsible for expenses incurred in
providing office space, equipment, and personnel as may be necessary or
convenient to provide the Administrative Services to the Fund, including
the compensation of FAS employees who serve on the Funds' Boards, or as
officers of the Funds. Each Fund shall be responsible for all other
expenses incurred by FAS on behalf of such Fund, including without
limitation postage and courier expenses, printing expenses, travel
expenses, registration fees, filing fees, fees of outside counsel and
independent auditors, insurance premiums, fees payable to members of such
Fund's Board who are not FAS employees, and trade association dues.
4. Compensation. For the Administrative Services provided, each
Fund hereby agrees to pay and FAS hereby agrees to accept as full
compensation for its services rendered hereunder an administrative fee at
an annual rate, payable daily, as specified below, based upon the total
assets of all of the Funds:
Maximum Administrative Average Daily Net Assets
Fee of the Funds
.150% on the first $250 million
.125% on the next $250 million
.100% on the next $250 million
.075% on assets in excess of $750 million
However, in no event shall the administrative fee received during any
year of this Agreement be less than, or be paid at a rate less than would
aggregate, $125,000, per individual Fund, with an additional $30,000 for
each class of shares added to any such Fund after the date hereof.
5. Standard of Care.
(a)FAS shall not be liable for any error of judgment or mistake of
law or for any loss suffered by any Fund in connection with the
matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from
reckless disregard by it of its obligations and duties under
this Agreement. FAS shall be entitled to rely on and may act
upon advice of counsel (who may be counsel for such Fund) on
all matters, and shall be without liability for any action
reasonably taken or omitted pursuant to such advice. Any
person, even though also an officer, trustee, partner, employee
or agent of FAS, who may be or become a member of such Fund's
Board, officer, employee or agent of any Fund, shall be deemed,
when rendering services to such Fund or acting on any business
of such Fund (other than services or business in connection
with the duties of FAS hereunder) to be rendering such services
to or acting solely for such Fund and not as an officer,
trustee, partner, employee or agent or one under the control or
direction of FAS even though paid by FAS.
(b)This Section 5 shall survive termination of this Agreement.
6. Duration and Termination. The initial term of this Agreement
with respect to each Fund shall commence on the date hereof, and extend
for a period of one year, renewable annually by the approval of the Board
of Directors/Trustees of each Fund.
7. Amendment. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which an enforcement of the change,
waiver, discharge or termination is sought.
8. Limitations of Liability of Trustees or Officers, Employees,
Agents and Shareholders of the Funds. FAS is expressly put on notice of
the limitation of liability as set forth in the Declaration of Trust of
each Fund that is a Massachusetts business trust and agrees that the
obligations assumed by each such Fund pursuant to this Agreement shall be
limited in any case to such Fund and its assets and that FAS shall not
seek satisfaction of any such obligations from the shareholders of such
Fund, the Trustees, Officers, Employees or Agents of such Fund, or any of
them.
9. Limitations of Liability of Trustees and Shareholders of FAS.
The execution and delivery of this Agreement have been authorized by the
Trustees of FAS and signed by an authorized officer of FAS, acting as
such, and neither such authorization by such Trustees nor such execution
and delivery by such officer shall be deemed to have been made by any of
them individually or to impose any liability on any of them personally,
and the obligations of this Agreement are not binding upon any of the
Trustees or shareholders of FAS, but bind only the trust property of FAS
as provided in the Declaration of Trust of FAS.
10. Notices. Notices of any kind to be given hereunder shall be in
writing (including facsimile communication) and shall be duly given if
delivered to any Fund at the following address: Federated Investors
Tower, Pittsburgh, PA 15222-3779, Attention: President and if delivered
to FAS at Federated Investors Tower, Pittsburgh, PA 15222-3779,
Attention: President.
11. Miscellaneous. This Agreement constitutes the entire agreement
between the parties hereto and supersedes any prior agreement with respect
to the subject hereof whether oral or written. The captions in this
Agreement are included for convenience of reference only and in no way
define or delimit any of the provisions hereof or otherwise affect their
construction or effect. If any provision of this Agreement shall be held
or made invalid by a court or regulatory agency decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby.
Subject to the provisions of Section 5, hereof, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and
their respective successors and shall be governed by Pennsylvania law;
provided, however, that nothing herein shall be construed in a manner
inconsistent with the Investment Company Act of 1940 or any rule or
regulation promulgated by the Securities and Exchange Commission
thereunder.
12. Counterparts. This Agreement may be executed by different
parties on separate counterparts, each of which, when so executed and
delivered, shall be an original, and all such counterparts shall together
constitute one and the same instrument.
13. Assignment; Successors. This Agreement shall not be assigned by
any party without the prior written consent of FAS, in the case of
assignment by any Fund, or of the Funds, in the case of assignment by FAS,
except that any party may assign to a successor all of or a substantial
portion of its business to a party controlling, controlled by, or under
common control with such party. Nothing in this Section 14 shall prevent
FAS from delegating its responsibilities to another entity to the extent
provided herein.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year
first above written.
Investment Companies (listed on Exhibit 1)
By: /s/ John F. Donahue
John F. Donahue
Chairman
Attest: /s/ John W. McGonigle
John W. McGonigle
Federated Administrative Services
By: /s/ Edward C. Gonzales
Edward C. Gonzales
Chairman
Attest: /s/ John W. McGonigle
John W. McGonigle
Exhibit 1
Administrative Services Agreement
Federated U.S. Government Securities Fund: 5-10 Years
9/01/95
Board of Trustees
Federated U.S. Government Securities Fund: 5-10 Years
Page 2
September 8, 1995
Exhibit No. 10 on Form N-1A
Exhibit No. 5 under Item 601/reg sk
Federated Administrative
Services
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
412-288-1900
September 11, 1995
The Board of Trustees
Federated U.S. Government Securities Fund: 5-10 Years
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Gentlemen:
Federated U.S. Government Securities Fund: 5-10 Years
(the "Trust") proposes to offer and sell one series of
shares of beneficial interest representing interests in a
portfolio of securities known as Federated U.S. Government
Securities Fund: 5-10 Years, Institutional Shares and
Institutional Service Shares (all such shares of beneficial
interest being herein referred to as "Shares"), in the
manner and on the terms set forth in its Registration
Statement filed with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended. (File
No. 33-60411)
As counsel, I have participated in the organization of
the Trust, its registration under the Investment Company Act
of 1940, as amended, and the preparation and filing of its
Registration Statement under the Securities Act of 1933. I
have examined and am familiar with the provisions of the
written Declaration of Trust dated June 14, 1995 (the
"Declaration of Trust"), the Bylaws of the Trust, and such
other documents and records deemed relevant. I have also
reviewed questions of law and consulted with counsel thereon
as deemed necessary or appropriate by us for the purposes of
this opinion.
Based upon the foregoing, it is my opinion that:
1. The Trust is duly organized and validly existing
pursuant to the Declaration of Trust.
2. The Shares which are currently being registered by
the Registration Statement referred to above may be legally
and validly issued from time to time in consideration
sufficient to comply with the provisions of Article III,
Section 3, of the Declaration of Trust and subject to
compliance with the Securities Act of 1933, as amended, the
Investment Company Act of 1940, as amended, and applicable
state laws regulating the sale of securities. Such Shares,
when so issued, will be fully paid and non-assessable.
I consent to the filing of this opinion as an exhibit
to the Registration Statement referred to above and to any
application or registration statement filed under the
securities laws of any of the States of the United States.
Very truly yours,
By: /s/ Robert C. Rosselot
Robert C. Rosselot
Exhibit (11) under N-1A
Exhibit 23 under Item
601/Reg SK
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Independent Auditors" and to the use of our report dated
September 5, 1995 on the statement of assets and liabilities
in Pre-Effective Amendment No. 1 to Registration Statement
(Form N-1A No. 33-60411) and the related prospectuses of
Federated U.S. Government Securities Fund: 5-10 Years.
By: /S/ ERNST & YOUNG LLP
September 7, 1995
Form N-1A Exhibit No. 13
Regulation S/K Exhibit No. 99
FEDERATED MANAGEMENT
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
(412) 288-1900
September 5, 1995
Federated U.S. Government Securities Fund: 5-10 Years
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Gentlemen:
Federated Management agrees to purchase 10,000 shares of
Federated U.S. Government Securities Fund: 5-10 Years at
the cost of $10.00 each. These shares are purchased for
investment purposes and Federated Management has no present
intention of redeeming these shares.
Very truly yours,
/s/ J. Christopher Donahue
J. Christopher Donahue
President, Chief Executive
Officer and Chief Operating Officer
Federated U.S. Government Securities Fund: 5-10 Years8/4/95, ver. 1
FORM N-1A EXHIBIT NO. 15
Exhibit No.1(ii) Under Item 601 Reg./SK
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS
DISTRIBUTION PLAN
This Distribution Plan ("Plan") is adopted as of
September 1, 1995, by the Board of Trustees of
Federated U.S. Government Securities Fund: 5-10
Years (the "Trust"), a Massachusetts business trust,
with respect to certain classes of shares ("Classes")
of the portfolios of the Trust (the "Funds") set
forth in exhibits hereto.
1. This Plan is adopted pursuant to Rule 12b-1 under
the Investment Company Act of 1940, as amended
("Act"), so as to allow the Trust to make payments
as contemplated herein, in conjunction with the
distribution of Classes of the Funds ("Shares").
2. This Plan is designed to finance activities of
Federated Securities Corp. ("FSC") principally
intended to result in the sale of Shares to include:
(a) providing incentives to financial institutions
("Financial Institutions") to sell Shares; (b)
advertising and marketing of Shares to include
preparing, printing and distributing prospectuses
and sales literature to prospective shareholders and
with Financial Institutions; and (c) implementing
and operating the Plan. In compensation for services
provided pursuant to this Plan, FSC will be paid a
fee in respect of the following Classes set forth on
the applicable exhibit.
3. Any payment to FSC in accordance with this Plan will
be made pursuant to the "Distributor's Contract"
entered into by the Trust and FSC. Any payments made
by FSC to Financial Institutions with funds received
as compensation under this Plan will be made
pursuant to the "Financial Institution Agreement"
entered into by FSC and the Institution.
4. FSC has the right (i) to select, in its sole
discretion, the Financial Institutions to
participate in the Plan and (ii) to terminate
without cause and in its sole discretion any
Financial Institution Agreement.
5. Quarterly in each year that this Plan remains in
effect, FSC shall prepare and furnish to the Board
of Trustees of the Trust, and the Board of Trustees
shall review, a written report of the amounts
expended under the Plan and the purpose for which
such expenditures were made.
6. This Plan shall become effective with respect to
each Class (i) after approval by majority votes of:
(a) the Trust's Board of Trustees; (b) the members
of the Board of the Trust who are not interested
persons of the Trust and have no direct or indirect
financial interest in the operation of the Trust's
Plan or in any related documents to the Plan
("Disinterested Trustees"), cast in person at a
meeting called for the purpose of voting on the
Plan; and (c) the outstanding voting securities of
the particular Class, as defined in Section 2(a)(42)
of the Act and (ii) upon execution of an exhibit
adopting this Plan with respect to such Class.
7. This Plan shall remain in effect with respect to
each Class presently set forth on an exhibit and any
subsequent Classes added pursuant to an exhibit
during the initial year of this Plan for the period
of one year from the date set forth above and may be
continued thereafter if this Plan is approved with
respect to each Class at least annually by a
majority of the Trust's Board of Trustees and a
majority of the Disinterested Trustees, cast in
person at a meeting called for the purpose of voting
on such Plan. If this Plan is adopted with respect
to a Class after the first annual approval by the
Trustees as described above, this Plan will be
effective as to that Class upon execution of the
applicable exhibit pursuant to the provisions of
paragraph 6(ii) above and will continue in effect
until the next annual approval of this Plan by the
Trustees and thereafter for successive periods of
one year subject to approval as described above.
8. All material amendments to this Plan must be
approved by a vote of the Board of Trustees of the
Trust and of the Disinterested Trustees, cast in
person at a meeting called for the purpose of voting
on it.
9. This Plan may not be amended in order to increase
materially the costs which the Classes may bear for
distribution pursuant to the Plan without being
approved by a majority vote of the outstanding
voting securities of the Classes as defined in
Section 2(a)(42) of the Act.
10.This Plan may be terminated with respect to a
particular Class at any time by: (a) a majority vote
of the Disinterested Trustees; or (b) a vote of a
majority of the outstanding voting securities of the
particular Class as defined in Section 2(a)(42) of
the Act; or (c) by FSC on 60 days' notice to the
Trust.
11.While this Plan shall be in effect, the selection
and nomination of Disinterested Trustees of the
Trust shall be committed to the discretion of the
Disinterested Trustees then in office.
12.All agreements with any person relating to the
implementation of this Plan shall be in writing and
any agreement related to this Plan shall be subject
to termination, without penalty, pursuant to the
provisions of Paragraph 10 herein.
13.This Plan shall be construed in accordance with and
governed by the laws of the Commonwealth of
Pennsylvania.
EXHIBIT A
to the
Distribution Plan
Federated U.S. Government Securities Fund: 5-10 Years
Institutional Service Shares
This Distribution Plan is adopted by Federated
U.S. Government Securities Fund: 5-10 Years with
respect to the Class of Shares of the Trust set forth
above.
In compensation for the services provided pursuant
to this Plan, FSC will be paid a monthly fee computed
at the annual rate of 0.25 of 1% of the average
aggregate net asset value of the Institutional
Service Shares held during the month.
Witness the due execution hereof this 1st day of
September, 1995.
Federated U.S. Government
Securities Fund: 5-10 Years
By: /s/ Glen R. Johnson
President
Form N-1A Exhibit No. 18
Regulation S-K Exhibit No. 24
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes
and appoints the Secretary and Assistant Secretary of Federated
U.S. Government Securities Fund: 5-10 Years 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 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 attorney-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 attorney-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.
SIGNATURES TITLE DATE
/s/ John F. Donahue Chairman August 1, 1995
John F. Donahue (Chief Executive Officer)
/s/ Glen R. Johnson President August 1, 1995
Glen R. Johnson
/s/ Edward C. Gonzales Executive Vice PresidentAugust 1, 1995
Edward C. Gonzales
/s/ Thomas G. Bigley Trustee August 1, 1995
Thomas G. Bigley
/s/ John T. Conroy, Jr. Trustee August 1, 1995
John T. Conroy, Jr.
/s/ William J. Copeland Trustee August 1, 1995
William J. Copeland
SIGNATURES TITLE DATE
/s/ David M. Taylor Treasurer August 1, 1995
David M. Taylor (Principal Financial and
Accounting Officer)
/s/ James E. Dowd Trustee August 1, 1995
James E. Dowd
/s/ Lawrence D, Ellis, M.D. Trustee August 1, 1995
Lawrence D. Ellis, M.D.
/s/ Edward L. Flaherty, Jr. Trustee August 1, 1995
Edward L. Flaherty, Jr.
/s/ Peter E. Madden Trustee August 1, 1995
Peter E. Madden
/s/ Gregor F. Meyer Trustee August 1, 1995
Gregor F. Meyer
/s/ John E. Murray, Jr. Trustee August 1, 1995
John E. Murray, Jr.
/s/ Wesley W. Posvar Trustee August 1, 1995
Wesley W. Posvar
/s/ Marjorie P. Smuts Trustee August 1, 1995
Marjorie P. Smuts
Sworn to and subscribed before me this 1st day of August, 1995
/s/ Marie M. Hamm
Notarial Seal
Marie M. Hamm, Notary Public
Plum Boro, Allegheny County
My Commission Expires Sept. 16, 1996
Member, Pennsylvania Association of Notaries
