0001623632-20-001063.txt : 20200526 0001623632-20-001063.hdr.sgml : 20200526 20200526141250 ACCESSION NUMBER: 0001623632-20-001063 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 26 FILED AS OF DATE: 20200526 DATE AS OF CHANGE: 20200526 EFFECTIVENESS DATE: 20200528 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FEDERATED MUNICIPAL BOND FUND INC CENTRAL INDEX KEY: 0000201801 IRS NUMBER: 251304971 STATE OF INCORPORATION: MD FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1933 Act SEC FILE NUMBER: 002-57181 FILM NUMBER: 20909576 BUSINESS ADDRESS: STREET 1: 4000 ERICSSON DRIVE CITY: WARRENDALE STATE: PA ZIP: 15086-7561 BUSINESS PHONE: 8003417400 MAIL ADDRESS: STREET 1: 4000 ERICSSON DRIVE CITY: WARRENDALE STATE: PA ZIP: 15086-7561 FORMER COMPANY: FORMER CONFORMED NAME: FEDERATED MUNICIPAL SECURITIES FUND INC DATE OF NAME CHANGE: 19960307 FORMER COMPANY: FORMER CONFORMED NAME: LIBERTY MUNICIPAL SECURITIES FUND INC DATE OF NAME CHANGE: 19930517 FORMER COMPANY: FORMER CONFORMED NAME: FEDERATED TAX FREE INCOME FUND INC DATE OF NAME CHANGE: 19920703 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FEDERATED MUNICIPAL BOND FUND INC CENTRAL INDEX KEY: 0000201801 IRS NUMBER: 251304971 STATE OF INCORPORATION: MD FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-02677 FILM NUMBER: 20909575 BUSINESS ADDRESS: STREET 1: 4000 ERICSSON DRIVE CITY: WARRENDALE STATE: PA ZIP: 15086-7561 BUSINESS PHONE: 8003417400 MAIL ADDRESS: STREET 1: 4000 ERICSSON DRIVE CITY: WARRENDALE STATE: PA ZIP: 15086-7561 FORMER COMPANY: FORMER CONFORMED NAME: FEDERATED MUNICIPAL SECURITIES FUND INC DATE OF NAME CHANGE: 19960307 FORMER COMPANY: FORMER CONFORMED NAME: LIBERTY MUNICIPAL SECURITIES FUND INC DATE OF NAME CHANGE: 19930517 FORMER COMPANY: FORMER CONFORMED NAME: FEDERATED TAX FREE INCOME FUND INC DATE OF NAME CHANGE: 19920703 0000201801 S000009070 FEDERATED MUNICIPAL BOND FUND INC C000024642 Class A Shares LMSFX C000024643 Class B Shares LMSBX C000024644 Class C Shares LMSCX C000051334 Class F Shares LMFFX C000188105 Class T Shares C000191101 Institutional Shares LMBIX 485BPOS 1 form.htm
1933 Act File No. 2-57181
1940 Act File No. 811-2677

 

Form N-1A

 

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933  
       
  Pre-Effective Amendment No.    
       
  Post-Effective Amendment No.   91
 
and/or
   
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940  
       
  Amendment No.   75
         

 

 

 

FEDERATED MUNICIPAL BOND FUND, INC.

(Exact Name of Registrant as Specified in Charter)

 

Federated Hermes Funds

4000 Ericsson Drive

Warrendale, PA 15086-7561

(Address of Principal Executive Offices)

 

(412) 288-1900

(Registrant’s Telephone Number, including Area Code)

 

Peter J. Germain, Esquire

1001 Liberty Avenue

Pittsburgh, Pennsylvania 15222-3779

(Name and Address of Agent for Service)

 

 

It is proposed that this filing will become effective (check appropriate box):
   
  immediately upon filing pursuant to paragraph (b)
X on May 28, 2020 pursuant to paragraph (b)
  60 days after filing pursuant to paragraph (a)(1)
  on   pursuant to paragraph (a)(1)
  75 days after filing pursuant to paragraph (a)(2)
  on   pursuant to paragraph (a)(2) of Rule 485
 
If appropriate, check the following box:
   
  This post-effective amendment designates a new effective date for a previously filed post-effective amendment.

 

 

Prospectus
May 31, 2020
Disclosure contained herein relates to all classes of the Fund, as listed below, unless otherwise noted.
Share Class | Ticker A | LMSFX B | LMSBX C | LMSCX F | LMFFX Institutional | LMBIX
Federated Municipal Bond Fund, Inc.
A mutual fund seeking to provide for its shareholders a high level of current income which is exempt from federal regular income tax by investing at least a majority of its assets in a portfolio of investment-grade, tax-exempt securities.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.
IMPORTANT NOTICE TO SHAREHOLDERS
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund's shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from the Fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund or your financial intermediary electronically by contacting your financial intermediary (such as a broker-dealer or bank); other shareholders may call the Fund at 1-800-341-7400, Option 4.
You may elect to receive all future reports in paper free of charge. You can inform the Fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by contacting your financial intermediary (such as a broker-dealer or bank); other shareholders may call the Fund at 1-800-341-7400, Option 4. Your election to receive reports in paper will apply to all funds held with the Fund complex or your financial intermediary.
Not FDIC Insured ■ May Lose Value ■ No Bank Guarantee
Fund Summary Information
Federated Municipal Bond Fund, Inc. (the “Fund”)
RISK/RETURN SUMMARY: INVESTMENT OBJECTIVE
The Fund's investment objective is to provide for its shareholders a high level of current income which is exempt from federal regular income tax.
RISK/RETURN SUMMARY: FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold Class A Shares (A), Class B Shares (B), Class C Shares (C), Class F Shares (F) or Institutional Shares (IS) of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000, or $1,000,000, in certain classes (e.g., A and F classes, respectively) of Federated Hermes funds. More information about these and other discounts is available from your financial professional, in the “What Do Shares Cost?” section of the Prospectus on page 18 and in “Appendix B” to this Prospectus. If you purchase the Fund's IS Shares through a broker acting as an agent on behalf of its customers, you may be required to pay a commission to such broker; such commissions, if any, are not reflected in the Example below.
Shareholder Fees (fees paid directly from your investment)
A B C F IS
Maximum Sales Charge (Load)
4.50% 5.50% 1.00% 2.00% None
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price)
4.50% None None 1.00% None
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable)
0.00% 5.50% 1.00% 1.00% None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions) (as a percentage of offering price)
None None None None None
Redemption Fee (as a percentage of amount redeemed, if applicable)
None None None None None
Exchange Fee
None None None None None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
         
Management Fee
0.45% 0.45% 0.45% 0.45% 0.45%
Distribution (12b-1) Fee
None 0.75% 0.75% None None
Other Expenses
0.50% 0.50% 0.50% 0.50% 0.25%
Total Annual Fund Operating Expenses
0.95% 1.70% 1.70% 0.95% 0.70%
Fee Waivers and/or Expense Reimbursements1
(0.11)% (0.11)% (0.11)% (0.11)% (0.11)%
Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements
0.84% 1.59% 1.59% 0.84% 0.59%
1 The Adviser and certain of its affiliates, on their own initiative, have agreed to waive certain amounts of their respective fees and/or reimburse expenses. Total annual fund operating expenses (excluding acquired fund fees and expenses, interest expense, extraordinary expenses and proxy-related expenses paid by the Fund, if any) paid by the Fund's A, B, C, F and IS classes (after the voluntary waivers and/or reimbursements) will not exceed 0.83%, 1.58%, 1.58%, 0.83% and 0.58% (the “Fee Limit”), respectively, up to but not including the later of (the “Termination Date”): (a) June 1, 2021; or (b) the date of the Fund's next effective Prospectus. While the Adviser and its affiliates currently do not anticipate terminating or increasing these arrangements prior to the Termination Date, these arrangements may only be terminated or the Fee Limit increased prior to the Termination Date with the agreement of the Fund's Board of Directors.
Example
This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 for the time periods indicated and then redeem all of your Shares at the end of those periods. Expenses assuming no redemption are also shown. The Example also assumes that your investment has a 5% return each year and that operating expenses are as shown in the table and remain the same. Although your actual costs and returns may be higher or lower, based on these assumptions your costs would be:
Share Class 1 Year 3 Years 5 Years 10 Years
A:        
Expenses assuming redemption $543 $739 $952 $1,564
Expenses assuming no redemption $543 $739 $952 $1,564
B:        
Expenses assuming redemption $723 $936 $1,123 $1,810
Expenses assuming no redemption $173 $536 $923 $1,810
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Share Class 1 Year 3 Years 5 Years 10 Years
C:        
Expenses assuming redemption $273 $536 $923 $2,009
Expenses assuming no redemption $173 $536 $923 $2,009
F:        
Expenses assuming redemption $296 $500 $620 $1,255
Expenses assuming no redemption $196 $400 $620 $1,255
IS:        
Expenses assuming redemption $72 $224 $390 $871
Expenses assuming no redemption $72 $224 $390 $871
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund Shares are held in a taxable account. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 9% of the average value of its portfolio.
RISK/RETURN SUMMARY: INVESTMENTS, RISKS and PERFORMANCE
What are the Fund's Main Investment Strategies?
The Fund's investment objective is to provide for its shareholders a high level of current income which is exempt from federal regular income tax. The Fund pursues its objective by investing its assets so that normally distributions of annual interest income are exempt from federal regular income tax. The Fund's investment adviser (“Adviser”) may also invest the Fund's assets in securities whose interest (while exempt from the federal regular income tax) may be subject to (or may be a specific preference item for purposes of) the federal alternative minimum income tax (AMT) for individuals.
The Adviser may lengthen or shorten duration from time to time based on its interest rate outlook, but the Fund has no set duration parameters. Duration measures the price sensitivity of a fixed-income security to changes in interest rates.
The Fund does not limit itself to securities of a particular maturity range.
The Fund also will invest at least a majority of its assets in securities rated investment grade (or unrated securities of comparable quality), and may purchase securities rated below investment grade (or unrated securities of comparable quality), which are also known as junk bonds, up to 49% of its assets. Investment-grade securities are securities that receive investment-grade ratings (i.e., generally ratings in the first, second, third or fourth highest rating category) by a nationally recognized statistical rating organization (NRSRO) or unrated securities of comparable quality. For example, securities rated AAA, AA, A or BBB (including modifiers, sub-categories or gradations) by Standard & Poor's, an NRSRO, would be rated in the first, second, third or fourth ratings category, respectively. Securities rated below investment grade (or noninvestment-grade securities) are securities that do not receive investment-grade ratings (i.e., generally ratings below one of the four highest rating categories) by an NRSRO or unrated securities of comparable quality. For example, securities rated B or BB (including modifiers, sub-categories or gradations) by Standard & Poor's, an NRSRO, would be noninvestment-grade securities. The presence of a ratings modifier, sub-category, or gradation (for example, a (+) or (-)) is intended to show relative standing within the major rating categories and does not affect the security credit rating for purposes of the Fund's investment parameters. The Fund does not have a specific minimum quality rating.
The types of securities in which the Fund may principally invest include tax-exempt securities, such as the following types: general obligation bonds, special revenue bonds, private activity bonds, tax increment financing bonds, municipal leases, zero-coupon securities, inverse floaters, municipal mortgage-backed securities, planned amortization classes, variable rate demand instruments, municipal notes and municipal auction rate securities. Certain of the tax-exempt securities in which the Fund invests may be subject to credit enhancement. The Fund also may principally invest in derivative contracts (such as, for example, futures contracts, options contracts and swap contracts) and hybrid instruments to implement its investment strategies. For example, the Fund may use derivative contracts or hybrid instruments in an attempt to benefit from changes in the value of the underlying instrument(s), to gain exposure to the municipal bond sector, to increase or decrease the effective duration of the Fund's portfolio or to hedge against potential losses. There can be no assurance that the Fund's use of derivative contracts or hybrid instruments will work as intended. Derivative investments made by the Fund are included within the Fund's 80% policy (as described below) and are calculated at market value.
The Fund also may invest in certain securities or other investments as described herein (such as market discount bonds, credit default swaps and other derivative transactions) that will likely cause the Fund to realize a limited amount of ordinary income or short-term capital gains (which are treated as ordinary income for federal income tax purposes).
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The Fund will normally invest its assets so that at least 80% of the income that it distributes will be exempt from federal regular income tax. This policy may not be changed without shareholder approval.
What are the Main (or Principal) Risks of Investing in the Fund?
All mutual funds take investment risks. Therefore, it is possible to lose money by investing in the Fund. The primary factors that may reduce the Fund's returns include:
■  Tax-Exempt Securities Risk. The amount of public information available about tax-exempt securities is generally less than for corporate equities or bonds. The secondary market for tax-exempt securities also tends to be less well-developed and less liquid than many other securities markets, which may limit the Fund's ability to sell its tax-exempt securities at attractive prices. Special factors, such as legislative changes, and state and local economic and business developments, may adversely affect the yield and/or value of the Fund's investments in tax-exempt securities. Tax-exempt issuers can and have defaulted on obligations, been downgraded or commenced insolvency proceedings. Like other issuers and securities, the likelihood that the credit risk associated with such issuers and such securities will increase is greater during times of economic stress and financial instability.
■  Call Risk. The Fund's performance may be adversely affected by the possibility that an issuer of a security held by the Fund may redeem the security prior to maturity at a price below or above its current market value.
■  Credit Enhancement Risk. The securities in which the Fund invests may be subject to credit enhancement (for example, guarantees, letters of credit or bond insurance). If the credit quality of the credit enhancement provider (for example, a bank or bond insurer) is downgraded, the rating on a security credit enhanced by such credit enhancement provider also may be downgraded. Having multiple securities credit enhanced by the same enhancement provider will increase the adverse effects on the Fund that are likely to result from a downgrading of, or a default by, such an enhancement provider. Adverse developments in the banking or bond insurance industries also may negatively affect the Fund.
■  Leverage Risk. Leverage risk is created when an investment, which includes, for example, a derivative contract, exposes the Fund to a level of risk that exceeds the amount invested. Changes in the value of such an investment magnify the Fund's risk of loss and potential for gain. Investments can have these same results if their returns are based on a multiple of a specified index, security or other benchmark.
■  Liquidity Risk. Certain securities in which the Fund invests may be less readily marketable and may be subject to greater fluctuation in price than other securities. These features may make it more difficult to sell or buy a security at a favorable price or time. Noninvestment-grade securities generally have less liquidity than investment-grade securities. Liquidity risk also refers to the possibility that the Fund may not be able to sell a security or close out a derivative contract when it wants to. Over-the-counter derivative contracts generally carry greater liquidity risk than exchange-traded contracts.
■  Prepayment and Extension Risk. When homeowners prepay their mortgages in response to lower interest rates, the Fund will be required to reinvest the proceeds at the lower interest rates available. Also, when interest rates fall, the price of municipal mortgage-backed securities may not rise to as great an extent as that of other fixed-income securities. When interest rates rise, homeowners are less likely to prepay their mortgages. A decreased rate of prepayments lengthens the expected maturity of a mortgage-backed security, and the price of mortgage-backed securities may decrease more than the price of other fixed income securities when interest rates rise.
■  Risk of Investing in Derivative Contracts and Hybrid Instruments. Derivative contracts and hybrid instruments involve risks different from, or possibly greater than, risks associated with investing directly in securities and other traditional investments. Specific risk issues related to the use of such contracts and instruments include valuation and tax issues, increased potential for losses and/or costs to the Fund, and a potential reduction in gains to the Fund. Each of these issues is described in greater detail in this Prospectus. Derivative contracts and hybrid instruments may also involve other risks described in this Prospectus, such as interest rate, credit, liquidity and leverage risks.
■  Risk Associated with Noninvestment-Grade Securities. Securities rated below investment-grade may be subject to greater interest rate, credit and liquidity risks than investment-grade securities. These securities are considered speculative with respect to the issuer's ability to pay interest and repay principal.
■  Risk Related to the Economy. The value of the Fund's portfolio may decline in tandem with a drop in the overall value of the markets in which the Fund invests and/or other markets. Economic, political and financial conditions, industry or economic trends and developments or public health risks, such as epidemics or pandemics, may, from time to time, and for varying periods of time, cause the Fund to experience volatility, illiquidity, shareholder redemptions or other potentially adverse effects. Among other investments, lower-grade bonds may be particularly sensitive to changes in the economy.
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■  Sector Risk. A substantial part of the Fund's portfolio may be comprised of securities issued or credit enhanced by companies in similar businesses, or with other similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these issuers or entities.
■  Tax Risk. In order to be tax-exempt, tax-exempt securities must meet certain legal requirements. Failure to meet such requirements may cause the interest received and distributed by the Fund to shareholders to be taxable. The federal income tax treatment of payments in respect of certain derivative contracts is unclear. The Fund also may invest in market discount bonds, enter into credit default swap arrangements and other derivative transactions, and engage in other permissible activities that will likely cause the Fund to realize a limited amount of ordinary income or short-term capital gains (which are treated as ordinary income for federal income tax purposes). Consequently, for each of these reasons, the Fund may receive payments, and make distributions, that are treated as ordinary income for federal income tax purposes. Income from the Fund also may be subject to AMT.
■  Issuer Credit Risk. It is possible that interest or principal on securities will not be paid when due. Noninvestment-grade securities generally have a higher default risk than investment-grade securities. Such non-payment or default may reduce the value of the Fund's portfolio holdings, its share price and its performance.
■  Counterparty Credit Risk. A party to a transaction involving the Fund may fail to meet its obligations. This could cause the Fund to lose money or to lose the benefit of the transaction or prevent the Fund from selling or buying other securities to implement its investment strategies.
■  Interest Rate Risk. Prices of fixed-income securities (including tax-exempt securities) generally fall when interest rates rise. The longer the duration of a fixed-income security, the more susceptible it is to interest rate risk. Recent and potential future changes in monetary policy made by central banks and/or their governments are likely to affect the level of interest rates.
■  Technology Risk. The Adviser uses various technologies in managing the Fund, consistent with its investment objective(s) and strategy described in this Prospectus. For example, proprietary and third-party data and systems are utilized to support decision making for the Fund. Data imprecision, software or other technology malfunctions, programming inaccuracies and similar circumstances may impair the performance of these systems, which may negatively affect Fund performance.
The Shares offered by this Prospectus are not deposits or obligations of any bank, are not endorsed or guaranteed by any bank and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency.
Performance: Bar Chart and Table
Risk/Return Bar Chart
The bar chart and performance table below reflect historical performance data for the Fund and are intended to help you analyze the Fund's investment risks in light of its historical returns. The bar chart shows the variability of the Fund's A class total returns on a calendar year-by-year basis. The Average Annual Total Return table shows returns for each class averaged over the stated periods, and includes comparative performance information. The Fund's performance will fluctuate, and past performance (before and after taxes) is not necessarily an indication of future results. Updated performance information for the Fund is available under the “Products” section at FederatedInvestors.com or by calling 1-800-341-7400.
  
The total returns shown in the bar chart do not reflect the payment of any sales charges or recurring shareholder account fees. If these charges or fees had been included, the returns shown would have been lower.
The Fund's A class total return for the three-month period from January 1, 2020 to March 31, 2020, was (1.37)%.
Within the periods shown in the bar chart, the Fund's A class highest quarterly return was 4.07% (quarter ended June 30, 2011). Its lowest quarterly return was (5.51)% (quarter ended December 31, 2010).
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Average Annual Total Return Table
The Fund's IS class commenced operations on July 27, 2017. For the periods prior to the commencement of operations of the Fund's IS class, the performance information shown below is for the Fund's A class. The performance of the A class has not been adjusted to reflect the expenses applicable to the IS class since the IS class has a lower expense ratio than the expense ratio of the A class. The performance of the A class has been adjusted to remove any voluntary waiver of the Fund expenses related to the A class that may have occurred during the periods prior to the commencement of operations of the IS class. The performance shown in the table has been adjusted to reflect differences between the sales loads and charges imposed on the purchase and redemption of the Fund's IS class and A class.
In addition to Return Before Taxes, Return After Taxes is shown for the Fund's A class to illustrate the effect of federal taxes on Fund returns. After-tax returns are shown only for A class, and after-tax returns for B, C, F and IS classes will differ from those shown below for A class. Actual after-tax returns depend on each investor's personal tax situation, and are likely to differ from those shown. After-tax returns are calculated using a standard set of assumptions. The stated returns assume the highest historical federal income and capital gains tax rates. These after-tax returns do not reflect the effect of any applicable state and local taxes. After-tax returns are not relevant to investors holding Shares through a 401(k) plan, an Individual Retirement Account or other tax-advantaged investment plan.
(For the Periods Ended December 31, 2019)
Share Class 1 Year 5 Years 10 Years  
A:        
Return Before Taxes 3.11% 2.26% 3.64%  
Return After Taxes on Distributions 2.95% 2.21% 3.61%  
Return After Taxes on Distributions and Sale of Fund Shares 2.98% 2.38% 3.55%  
B:        
Return Before Taxes 1.75% 2.06% 3.43%  
C:        
Return Before Taxes 6.15% 2.41% 3.27%  
F:        
Return Before Taxes 5.92% 3.01% 4.01%  
IS:        
Return Before Taxes 8.33% 3.27% 4.15%  
S&P Municipal Bond Index1
(reflects no deduction for fees, expenses or taxes) 		7.26% 3.50% 4.41%  
S&P Municipal Bond 3-Year Plus Index2
(reflects no deduction for fees, expenses or taxes) 		8.22% 4.00% 5.02%  
Morningstar Municipal National Long Funds Average3 8.37% 3.52% 4.38%  
1 The S&P Municipal Bond Index is a broad, comprehensive, market value-weighted index composed of approximately 55,000 bond issues that are exempt from U.S. federal income taxes or subject to the alternative minimum tax (AMT). Eligibility criteria for inclusion in the Main Index include, but are not limited to: the bond issuer must be a state (including the Commonwealth of Puerto Rico and U.S. territories) or a local government or a state or local government entity where interest on the bond is exempt from U.S. federal income taxes or subject to the AMT; the bond must be held by a mutual fund for which Standard & Poor's Securities Evaluations, Inc. provides prices; it must be denominated in U.S. dollars and have a minimum par amount of $2 million; and the bond must have a minimum term to maturity and/or call date greater than or equal to one calendar month. The Main Index is rebalanced monthly.
2 The S&P Municipal Bond 3-Year Plus Index consists of bonds in the Main Index that are rated at least “BBB-“ by Standard & Poor's, “Baa3” by Moody's or “BBB-“ by Fitch Ratings. All bonds must also have a minimum maturity of three years and a maximum maturity of up to, but not including, fifteen years as measured from the rebalancing date.
3 Morningstar figures represent the average of the total returns reported by all the mutual funds designated by Morningstar as falling into the respective category indicated.
FUND MANAGEMENT
The Fund's Investment Adviser is Federated Investment Management Company.
J. Scott Albrecht, CFA, Senior Portfolio Manager, has been the Fund's portfolio manager since May of 1996.
R.J. Gallo, CFA, Senior Portfolio Manager, has been the Fund's portfolio manager since July of 2017.
purchase and sale of fund shares
Class B Shares are closed to new investments by new investors and existing shareholders (excluding reinvestment of dividends and capital gains). Reinvestment of dividends and capital gains will continue uninterrupted. Class B Shares of the Fund may be exchanged for Class B Shares of any other Federated Hermes fund.
Please disregard any further references to purchases of Class B Shares with the exception of Class B Share exchanges.
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You may purchase, redeem or exchange Shares of the Fund on any day the New York Stock Exchange is open. Shares may be purchased through a financial intermediary firm that has entered into a Fund selling and/or servicing agreement with the Distributor or an affiliate (“Financial Intermediary”) or directly from the Fund, by wire or by check. Please note that certain purchase restrictions may apply. Redeem or exchange Shares through a financial intermediary or directly from the Fund by telephone at 1-800-341-7400 or by mail.
A, B, C & F Classes
The minimum investment amount for the Fund's A class, B class, C class and F class is generally $1,500 for initial investments and $100 for subsequent investments. Certain types of accounts are eligible for lower minimum investments. The minimum investment for Systematic Investment Programs is $50.
IS Class
The minimum initial investment amount for the Fund's IS class is generally $1,000,000 and there is no minimum subsequent investment amount. Certain types of accounts are eligible for lower minimum investments. The minimum investment amount for Systematic Investment Programs is $50.
TAX INFORMATION
It is anticipated that Fund distributions will be primarily dividends that are exempt from federal regular income tax, although a portion of the Fund's dividends may not be tax-exempt. Income from the Fund also may be subject to AMT. Dividends may be subject to state and local taxes. Although the Fund does not seek to realize capital gains, the Fund may realize and distribute capital gains from time to time as a result of the Fund's normal investment activities. Any Fund distributions of capital gains are taxable at applicable capital gains rates. The Fund is generally not a suitable investment for retirement accounts.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and/or its related companies may pay the intermediary for the sale of Fund Shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary's website for more information.
What are the Fund's Investment Strategies?
The Fund's investment objective is to provide for its shareholders a high level of current income which is exempt from federal regular income tax. While there is no assurance that the Fund will achieve its investment objective, it endeavors to do so by following the strategies and policies described in this Prospectus. The Fund's Statement of Additional Information (SAI) provides information about the Fund's non-principal strategies.
The Fund pursues its objective by investing its assets so that normally distributions of annual interest income are exempt from federal regular income tax. The Fund's investment adviser (“Adviser”) may also invest the Fund's assets in securities whose interest (while exempt from the federal regular income tax) may be subject to (or may be a specific preference item for purposes of) the federal alternative minimum income tax (AMT) for individuals.
The Fund does not limit itself to securities of a particular maturity range.
The Fund also will invest at least a majority of its assets in securities rated investment grade (or unrated securities of comparable quality) without regard to the maturity of the securities, and may purchase securities rated below investment grade (or unrated securities of comparable quality), which are also known as junk bonds, up to 49% of its assets.
The amount of the Fund's assets invested in investment-grade, tax-exempt securities will be determined at the time when tax-exempt securities are purchased. For example, a later increase or decrease in percentage resulting from any change in value or net assets, or from a downgrade in a security's rating/quality, will not require the Fund to sell any tax-exempt security held in the Fund's portfolio.
Investment-grade securities are securities that receive investment-grade ratings (i.e., generally ratings in the first, second, third or fourth highest rating category, including modifiers, sub-categories or gradations) by a nationally recognized statistical rating organization (NRSRO) or unrated securities of comparable quality. For example, securities rated AAA, AA, A or BBB (including modifiers, sub-categories or gradations) by Standard & Poor's, an NRSRO, would be rated in the first, second, third or fourth ratings category, respectively. Securities rated below investment grade (or noninvestment-grade securities) are securities that do not receive investment-grade ratings (i.e., generally ratings below one of the four highest rating categories)
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by an NRSRO or unrated securities of comparable quality. For example, securities rated B or BB (including modifiers, sub-categories or gradations) by Standard & Poor's, an NRSRO, would be noninvestment-grade securities. The presence of a ratings modifier, sub-category, or gradation (for example, a (+) or (-)) is intended to show relative standing within the major rating categories and does not affect the security credit rating for purposes of the Fund's investment parameters. The Fund does not have a specific minimum quality rating.
The types of securities in which the Fund may principally invest include tax-exempt securities, such as the following types: general obligation bonds, special revenue bonds, private activity bonds, tax increment financing bonds, municipal leases, zero-coupon securities, inverse floaters, municipal mortgage-backed securities, planned amortization classes, variable rate demand instruments, municipal notes and municipal auction rate securities. The investment-grade, tax-exempt securities in which the Fund invests generally are subject to interest rate, issuer credit, counterparty credit, tax-exempt securities, liquidity, tax, leverage, call, sector, prepayment, credit enhancement and economic risks, and the derivatives contracts and hybrid instruments in which the Fund invests are subject to these risks, as well as the risks of investment in derivatives contracts and hybrid instruments, all as described in this Prospectus. The noninvestment-grade securities in which the Fund invests also are subject to interest rate, issuer credit, counterparty credit, tax-exempt securities, liquidity, tax, leverage, call, sector, prepayment, credit enhancement and economic risks, as well as the risks of investing in noninvestment-grade securities as described in this Prospectus.
The Adviser actively manages the Fund's portfolio, seeking to manage the interest rate risk and credit risk assumed by the Fund and provide enhanced levels of after-tax total return.
The Adviser manages the Fund's interest rate risk by adjusting the duration of its portfolio. The Adviser may lengthen or shorten duration from time to time based on its interest rate outlook, but the Fund has no set duration parameters. “Duration” measures the price sensitivity of a fixed-income security to changes in interest rates. The greater a portfolio's duration, the greater the potential change in the portfolio's value in response to a change in market interest rates. The Adviser will increase or reduce the Fund's portfolio duration based on its interest rate outlook. When the Adviser expects interest rates to fall, it will maintain a longer portfolio duration. When the Adviser expects interest rates to increase, it will shorten the portfolio duration. The Adviser uses hedging transactions for purposes of duration management. The Adviser considers a variety of factors in formulating its interest rate outlook, including (among others) the following:
■  current and expected U.S. economic growth;
■  current and expected interest rates and inflation;
■  the Federal Reserve's monetary policy; and
■  supply and demand factors related to the municipal market and the effect they may have on the returns offered for various bond maturities.
The Adviser manages credit risk by performing a fundamental credit analysis on tax-exempt securities before the Fund purchases such securities. The Adviser considers various factors, including (among others) the following:
■  the economic feasibility of revenue bond financings and general purpose financings;
■  the financial condition of the issuer or guarantor; and
■  political developments that may affect credit quality.
The Adviser monitors the credit risks of all securities on an ongoing basis by reviewing, as the Adviser considers necessary or appropriate in accordance with its procedures, periodic financial data and ratings of NRSROs. The Fund's investments in noninvestment-grade securities will be more dependent on the Adviser's credit analysis than would be investment-grade securities, because noninvestment-grade securities, while generally offering higher yields, also involve greater risks. Consequently, in addition to the review process described above, the Adviser may, for example and when appropriate, visit the site that the issuer is developing with the proceeds of the offering and generally will engage in detailed discussions with the issuer regarding the offering.
The Adviser attempts to provide enhanced levels of after-tax total return. Total return consists of two components: (1) income received from the Fund's portfolio securities; and (2) changes in the market value of the Fund's portfolio securities and attendant increase or decrease in the net asset value (NAV) of Fund Shares. The Adviser seeks total return on an after-tax basis, so that it will try to maximize tax-exempt income distributions; make limited ordinary income distributions; and minimize or eliminate capital gains distributions. In seeking to increase incremental after-tax total returns, the Fund may invest in tax-exempt securities that are trading at a price less than the original issue price (or market discount bonds), enter into credit default swap arrangements and other derivative transactions, and engage in other permissible activities that will likely cause the Fund to realize a limited amount of ordinary income or short-term capital gains (which are treated as ordinary income for federal income tax purposes) and, as a result, may result in taxable distributions to shareholders.
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The Adviser's ability to formulate an accurate interest rate outlook, coupled with effective management of the Fund's duration as described above, is critical to the Adviser's achievement of this component of its strategy. The Adviser will seek to further enhance after-tax total return by engaging in a relative value analysis; that is, the Adviser will assess the cost of a tax-exempt security compared with other tax-exempt securities and taxable securities such as U.S. Treasury obligations. The Adviser may also allocate investments in sectors of the tax-exempt market that offer the highest return.
The Fund may use derivative contracts and/or hybrid instruments to implement elements of its investment strategy. For example, the Fund may use derivative contracts or hybrid instruments to increase or decrease the portfolio's exposure to the investment(s) underlying the derivative or hybrid instrument in an attempt to benefit from changes in the value of the underlying investment(s) or to gain exposure to the municipal bond sector. Additionally, by way of example, the Fund may use derivative contracts in an attempt to:
■  increase or decrease the effective duration of the Fund portfolio;
■  obtain premiums from the sale of derivative contracts;
■  realize gains from trading a derivative contract; or
■  hedge against potential losses.
There can be no assurance that the Fund's use of derivative contracts or hybrid instruments will work as intended. Derivative investments made by the Fund are included within the Fund's 80% policy (as described below) and are calculated at market value.
The Fund will normally invest its assets so that at least 80% of the income that it distributes will be exempt from federal regular income tax. This policy may not be changed without shareholder approval.
TEMPORARY INVESTMENTS
The Fund may temporarily depart from its principal investment strategies by investing its assets in taxable securities or holding cash. It may do this in response to unusual circumstances, such as: adverse market, economic or other conditions (for example, to help avoid potential losses, or during periods when there is a shortage of appropriate tax-exempt securities); to maintain liquidity to meet shareholder redemptions; or to accommodate cash inflows. It is possible that such temporary investments could affect the Fund's investment returns. If the Fund invests in taxable securities, it may receive and distribute taxable income to investors and to that extent fail to meet its investment objectives.
What are the Fund's Principal Investments?
The following provides general information on the Fund's principal investments. The Fund's Statement of Additional Information (SAI) provides information about the Fund's non-principal investments and may provide additional information about the Fund's principal investments.
TAX-EXEMPT SECURITIES
Tax-exempt securities are fixed-income securities that, in the opinion of bond counsel to the issuer or on the basis of another authority believed by the Adviser to be reliable, pay interest that is not subject to federal regular income taxes. Fixed-income securities pay interest, dividends or distributions at a specified rate. The rate may be a fixed percentage of the principal or adjusted periodically. In addition, the issuer of a fixed-income security must repay the principal amount of the security, normally within a specified time. Typically, states, counties, cities and other political subdivisions and authorities issue tax-exempt securities. The market categorizes tax-exempt securities by their source of repayment. Certain of these tax-exempt securities may be subject to credit enhancement.
The following describes the principal types of tax-exempt securities in which the Fund may invest:
General Obligation Bonds (A Type of Tax-Exempt Security)
General obligation bonds are supported by the issuer's power to exact property or other taxes. The issuer must impose and collect taxes sufficient to pay principal and interest on the bonds. However, the issuer's authority to impose additional taxes may be limited by its charter or state law.
Special Revenue Bonds (A Type of Tax-Exempt Security)
Special revenue bonds are payable solely from specific revenues received by the issuer such as specific taxes, assessments, tolls or fees. Bondholders may not collect from the municipality's general taxes or revenues. For example, a municipality may issue bonds to build a toll road and pledge the tolls to repay the bonds. Therefore, a shortfall in the tolls normally would result in a default on the bonds, or in certain cases, may result in a reduction in payments received in respect of the bonds.
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Private Activity Bonds (A Type of Special Revenue Bond)
Private activity bonds are special revenue bonds used to finance private projects. A certain percentage of the proceeds from a private activity bond is used for a private business use or a certain percentage of the debt service regarding a private activity bond is paid directly or indirectly from a private business use. A private business use is a trade or business carried on by any person or entity other than a governmental unit. Private activity bonds are secured primarily by revenues derived from loan repayments or lease payments due from the private entity, which may or may not be guaranteed by a parent company or otherwise secured. Private activity bonds generally are not secured by a pledge of the taxing power of the issuer of such bonds. For example, a municipality may issue bonds to finance a new factory to improve its local economy. The municipality would lend the proceeds from its bonds to the company using the factory, and the company would agree to make loan payments sufficient to cover interest and principal payments on the bonds. The bonds would be payable from the company's loan payments, and generally not from any other revenues of the municipality. Therefore, any default of the loan normally would result in a default on the bonds.
Types of private activity bonds include, for example: bonds issued to obtain funds to provide water, sewage and solid waste facilities, qualified residential rental projects, certain local electric, gas and other heating and cooling facilities, qualified hazardous waste facilities, high speed intercity rail facilities, certain airports, docks, wharves and mass transportation facilities and qualified mortgages; qualified student loan bonds; qualified redevelopment bonds; and bonds used for certain organizations exempt from federal income taxation (qualified 501(c)(3) bonds).
The interest on many types of private activity bonds is subject to AMT.
Tax Increment Financing Bonds (A Type of Tax-Exempt Security)
Tax increment financing (TIF) bonds are payable from increases in taxes or other revenues attributable to projects within the TIF district. For example, a municipality may issue TIF bonds to redevelop a commercial area. The TIF bonds would be payable solely from any increase in sales taxes collected from the merchants in the area. The bonds could fail to pay principal or interest if merchants' sales, and related tax collections, failed to increase as anticipated.
Municipal Leases (A Type of Tax-Exempt Security)
Municipalities may enter into leases for equipment or facilities. In order to comply with state public financing laws, these leases are typically subject to annual appropriation. In other words, a municipality may end a lease, without penalty, by not providing for the lease payments in its annual budget. After the lease ends, the lessor can resell the equipment or facility but may lose money on the sale.
The Fund may invest in securities supported by pools of municipal leases. The most common type of lease-backed securities is certificates of participation (COPs). However, the Fund may also invest directly in individual leases.
Inverse Floaters (A Type of Fixed-Income, Tax-Exempt Security)
An inverse floater has a floating or variable interest rate that moves in the opposite direction of market interest rates. Inverse floaters are used to enhance the income from a bond investment by employing leverage. When short-term market interest rates go up, the interest rate paid on the inverse floater goes down; when short-term market interest rates go down, the interest rate paid on the inverse floater goes up. Inverse floaters generally respond more rapidly to market interest rate changes than fixed-rate, tax-exempt securities. Inverse floaters are subject to interest rate risks and leverage risks.
Zero-Coupon Securities (A Type of Fixed-Income, Tax-Exempt Security)
Zero-coupon securities do not pay interest or principal until final maturity unlike debt securities that provide periodic payments of interest (referred to as a coupon payment). Investors buy zero-coupon securities at a price below the amount payable at maturity. The difference between the purchase price and the amount paid at maturity represents interest on the zero-coupon security. Investors must wait until maturity to receive interest and principal, which increases the interest rate and credit risks of a zero-coupon security. A zero-coupon, step-up security converts to a coupon security before final maturity.
There are many forms of zero-coupon securities. Some are issued at a discount and are referred to as zero-coupon or capital appreciation bonds. In addition, some securities give the issuer the option to deliver additional securities in place of cash interest payments, thereby increasing the amount payable at maturity. These are referred to as pay-in-kind, PIK securities or toggle securities.
Municipal Mortgage-Backed Securities (A Type of Fixed-Income, Tax-Exempt Security)
Municipal mortgage-backed securities are special revenue bonds, the proceeds of which may be used to provide mortgage loans for single family homes or to finance multifamily housing. Municipal mortgage-backed securities represent interests in pools of mortgages. The mortgages that comprise a pool normally have similar interest rates, maturities and other terms. Mortgages may have fixed or adjustable rates. Municipal mortgage-backed securities generally have fixed interest rates.
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Municipal mortgage-backed securities come in a variety of forms. The simplest forms of municipal mortgage-backed securities are unstructured bonds backed by the net interest and principal payments and prepayments from the underlying mortgages. As a result, the holders assume all interest rate and prepayment risks of the underlying mortgages. Other municipal mortgage-backed securities may have more complicated financial structures.
PACs (A Type of Municipal Mortgage-Backed Security)
PACs (planned amortization classes) are a sophisticated form of municipal mortgage-backed security issued with a companion class(es). PACs receive principal payments and prepayments at a specified rate. The companion classes receive principal payments and prepayments in excess of the specified rate. In addition, PACs will receive the companion classes' share of principal payments, if necessary, to cover a shortfall in the prepayment rate. This helps PACs to control prepayment risks by increasing the risks to their companion classes.
Variable Rate Demand Instruments (A Type of Tax-Exempt Security)
Variable rate demand instruments are tax-exempt securities that require the issuer or a third party, such as a dealer or bank (the “Demand Provider”), to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. Some variable rate demand instruments are “conditional,” so that the occurrence of certain conditions discharges the Demand Provider's obligation to repurchase the security. Other variable rate demand instruments are “unconditional,” so that there are no conditions under which the Demand Provider's obligation to repurchase the security can terminate. The Fund treats variable rate demand instruments as short-term securities even though their maturity may extend beyond 397 days because, within 397 days, their variable interest rate adjusts in response to changes in market rates and the repayment of their principal amount can be demanded. Certain variable rate demand instruments that may be invested in by the Fund, referred to as “synthetic” variable rate demand instruments, have certain features, such as call features, that make it possible that the Fund will realize capital gains.
Municipal Notes (A Type of Tax-Exempt Security)
Municipal notes are short-term, tax-exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.
Municipal Auction Rate Securities (A Type of Tax-Exempt Security)
Municipal auction rate securities are tax-exempt securities that are issued (without a demand feature) generally for a specified term, during which the interest rate may be reset at specified intervals (such as, for example, every 7, 28, 35 or 49 days) by means of a “Dutch Auction” or similar competitive process. These securities may be referred to as “municipal auction rate notes.” In the auction, holders of such securities, and investors who seek to acquire such securities, indicate their interest in continuing to hold, or to purchase, the securities at rates that they specify to broker-dealers that serve as auction agents for the auction. If the auction is successful, a holder of such securities will be able to sell them at par value through the auction process. A “failed auction” occurs when, for example, the auction agent does not receive enough bids to cover the aggregate amount of securities that have been put up for sale at the auction, or the lowest interest rate at which all of the securities that have been put up for sale at the auction would be above the “maximum interest rate” set forth in the documentation for the securities, or some other reason. When a failed auction occurs, a holder of the securities may not be able to sell all or a portion of the securities it desired to sell at the auction, in which case the affected securities would pay the maximum interest rate set forth in their documentation until the next successful auction. The maximum interest rate may be a multiple of a specified index or a fixed rate and may be dependent on other factors, such as the credit rating of the securities at the time of auction. Municipal auction rate securities may be subject to interest rate, credit, credit enhancement, prepayment, liquidity and economic risks.
Tax-Exempt Commercial Paper (A Type of Tax-Exempt Security)
Tax-exempt commercial paper is an obligation issued by a tax-exempt issuer with a maturity of generally less than nine months. Tax-exempt issuers may issue commercial paper to pay for current expenditures or other permissible activities. Tax-exempt issuers may constantly reissue their commercial paper and use the proceeds (or other sources) to repay maturing paper. If the tax-exempt issuer cannot continue to obtain liquidity in this fashion, and if there is not another available source of liquidity, its commercial paper may default or there may be a reduction in payments received in repayment of the tax-exempt commercial paper.
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Derivative Contracts
Derivative contracts are financial instruments that require payments based upon changes in the values of designated securities, commodities, indices or other assets or instruments including other derivative contracts (each a “Reference Instrument” and collectively, “Reference Instruments”). Each party to a derivative contract may sometimes be referred to as a counterparty. Some derivative contracts require payments relating to an actual, future trade involving the Reference Instrument. These types of derivatives are frequently referred to as “physically settled” derivatives. Other derivative contracts require payments relating to the income or returns from, or changes in the market value of, a Reference Instrument. These types of derivatives are known as “cash-settled” derivatives, since they require cash payments in lieu of delivery of the Reference Instrument.
Many derivative contracts are traded on securities or commodities exchanges. In this case, the exchange sets all the terms of the contract except for the price. Investors make payments due under their contracts through the exchange. Most exchanges require investors to maintain margin accounts through their brokers to cover their potential obligations to the exchange. Parties to the contract make (or collect) daily payments to the margin accounts to reflect losses (or gains) in the value of their contracts. This protects investors against potential defaults by the other party to the contract. Trading contracts on an exchange also allows investors to close out their contracts by entering into offsetting contracts.
The Fund may also trade derivative contracts over-the-counter (OTC) in transactions negotiated directly between the Fund and a financial institution. OTC contracts do not necessarily have standard terms, so they may be less liquid and more difficult to close out than exchange-traded contracts. In addition, OTC contracts with more specialized terms may be more difficult to value than exchange-traded contracts, especially in times of financial stress.
The market for swaps and other OTC derivatives was largely unregulated prior to the enactment of federal legislation known as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). Regulations enacted by the Commodity Futures Trading Commission (the CFTC) under the Dodd-Frank Act require the Fund to clear certain swap contracts through a clearing house or central counterparty (a CCP).
To clear a swap through the CCP, the Fund will submit the contract to, and post margin with, a futures commission merchant (FCM) that is a clearing house member. The Fund may enter into the swap with a financial institution other than the FCM and arrange for the contract to be transferred to the FCM for clearing, or enter into the contract with the FCM itself. If the Fund must centrally clear a transaction, the CFTC's regulations also generally require that the swap be executed on a registered exchange or through a market facility that is known as a swap execution facility or SEF. Central clearing is presently required only for certain swaps and the CFTC is expected to impose a mandatory central clearing requirement for additional derivative instruments over time.
The CCP, SEF and FCM are all subject to regulatory oversight by the CFTC. In addition, most derivative market participants are now regulated as swap dealers or major swap participants and are subject to certain minimum capital and margin requirements and business conduct standards. Similar regulatory requirements are expected to apply to derivative contracts that are subject to the jurisdiction of the SEC, although the SEC has not yet finalized its regulations. In addition, uncleared OTC swaps will be subject to regulatory collateral requirements that could adversely affect the Fund's ability to enter into swaps in the OTC market. These developments could cause the Fund to terminate new or existing swap agreements or to realize amounts to be received under such instruments at an inopportune time.
Until the mandated rulemaking and regulations are implemented completely, it will not be possible to determine the complete impact of the Dodd-Frank Act and related regulations on the Fund.
Depending on how the Fund uses derivative contracts and the relationships between the market value of a derivative contract and the Reference Instrument, derivative contracts may increase or decrease the Fund's exposure to the risks of the Reference Instrument, and may also expose the Fund to liquidity and leverage risks. OTC contracts also expose the Fund to credit risks in the event that a counterparty defaults on the contract, although this risk may be mitigated by submitting the contract for clearing through a CCP.
Payment obligations arising in connection with derivative contracts are frequently required to be secured with margin (which is commonly called “collateral”). To the extent necessary to meet such requirements, the Fund may purchase U.S. Treasury and/or government agency securities.
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The Fund may invest in a derivative contract if it is permitted to own, invest in or otherwise have economic exposure to the Reference Instrument. The Fund is not required to own a Reference Instrument in order to buy or sell a derivative contract relating to that Reference Instrument. The Fund may trade in the following specific types and/or combinations of derivative contracts:
Futures Contracts (A Type of Derivative)
Futures contracts provide for the future sale by one party and purchase by another party of a specified amount of a Reference Instrument at a specified price, date and time. Entering into a contract to buy a Reference Instrument is commonly referred to as buying a contract or holding a long position in the asset. Entering into a contract to sell a Reference Instrument is commonly referred to as selling a contract or holding a short position in the Reference Instrument. Futures contracts are considered to be commodity contracts. The Adviser has claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act with respect to the Fund, and therefore is not subject to registration or regulation with respect to the Fund. Futures contracts traded OTC are frequently referred to as forward contracts. The Fund can buy or sell financial futures (such as interest rate futures, index futures and security futures).
Option Contracts (A Type of Derivative)
Option contracts (also called “options”) are rights to buy or sell a Reference Instrument for a specified price (the “exercise price”) during, or at the end of, a specified period. The seller (or “writer”) of the option receives a payment, or premium, from the buyer, which the writer keeps regardless of whether the buyer uses (or exercises) the option. A call option gives the holder (buyer) the right to buy the Reference Instrument from the seller (writer) of the option. A put option gives the holder the right to sell the Reference Instrument to the writer of the option. Options may be bought or sold on a wide variety of Reference Instruments. Options that are written on futures contracts will be subject to margin requirements similar to those applied to futures contracts.
Swap Contracts (A Type of Derivative)
A swap contract (also known as a “swap”) is a type of derivative contract in which two parties agree to pay each other (swap) the returns derived from Reference Instruments. Swaps do not always involve the delivery of the Reference Instruments by either party, and the parties might not own the Reference Instruments underlying the swap. The payments are usually made on a net basis so that, on any given day, the Fund would receive (or pay) only the amount by which its payment under the contract is less than (or exceeds) the amount of the other party's payment. Swap agreements are sophisticated instruments that can take many different forms and are known by a variety of names. Common types of swaps in which the Fund may invest include interest rate swaps, total return swaps, credit default swaps and caps and floors.
OTHER INVESTMENTS, TRANSACTIONS, TECHNIQUES
Credit Enhancement
The Fund may invest in securities that have credit enhancement. Credit enhancement consists of an arrangement in which a company agrees to pay amounts due on a fixed-income security (including a tax-exempt security) if the issuer defaults. In some cases the company providing credit enhancement makes all payments directly to the security holders and receives reimbursement from the issuer. Normally, the credit enhancer has greater financial resources and liquidity than the issuer. For this reason, the Adviser may evaluate the credit risk of a fixed-income security based solely upon its credit enhancement.
Common types of credit enhancement include guarantees, letters of credit, bond insurance and surety bonds. Credit enhancement also includes arrangements where securities or other liquid assets secure payment of a fixed-income security. If a default occurs, these assets may be sold and the proceeds paid to the security's holders. Either form of credit enhancement reduces credit risks by providing another source of payment for a fixed-income security.
Hybrid Instruments
Hybrid instruments combine elements of two different kinds of securities or financial instruments (such as a derivative contract). Frequently, the value of a hybrid instrument is determined by reference to changes in the value of a Reference Instrument (that is a designated security, commodity, index or other asset or instrument including a derivative contract). The Fund may use hybrid instruments only in connection with permissible investment activities. Hybrid instruments can take on many forms including, but not limited to, the following forms. First, a common form of a hybrid instrument combines elements of a derivative contract with those of another security (typically a fixed-income security). In this case all or a portion of the interest or principal payable on a hybrid security is determined by reference to changes in the price of a Reference Instrument. Second, hybrid instruments may include convertible securities with conversion terms related to a Reference Instrument.
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Depending on the type and terms of the hybrid instrument, its risks may reflect a combination of the risks of investing in the Reference Instrument with the risks of investing in other securities and derivative contracts. Thus, an investment in a hybrid instrument may entail significant risks in addition to those associated with traditional investments or the Reference Instrument. Hybrid instruments are also potentially more volatile than traditional securities or the Reference Instrument. Moreover, depending on the structure of the particular hybrid, it may expose the Fund to leverage risks or carry liquidity risks.
Delayed Delivery Transactions
Delayed delivery transactions, including when-issued transactions, are arrangements in which the Fund buys securities for a set price, with payment and delivery of the securities scheduled for a future time. During the period between purchase and settlement, no payment is made by the Fund to the issuer and no interest accrues to the Fund. The Fund records the transaction when it agrees to buy the securities and reflects their value in determining the price of its Shares. Settlement dates may be a month or more after entering into these transactions so that the market values of the securities bought may vary from the purchase prices. Therefore, delayed delivery transactions create interest rate risks for the Fund. Delayed delivery transactions also involve credit risks in the event of a counterparty default. These transactions create leverage risks.
Asset Segregation
In order to secure its obligations in connection with derivative contracts or special transactions, the Fund will either own the underlying assets, enter into offsetting transactions or set aside cash or readily marketable securities in each case, as provided by the SEC or SEC staff guidance. This requirement may cause the Fund to miss favorable trading opportunities, due to a lack of sufficient cash or readily marketable securities. This requirement may also cause the Fund to realize losses on offsetting or terminated derivative contracts or special transactions.
Investment Ratings for Investment-Grade Securities
The Adviser will determine whether a security is investment grade based upon the credit ratings given by one or more NRSROs. For example, Standard & Poor's, an NRSRO, assigns ratings to investment-grade securities (AAA, AA, A and BBB including modifiers, sub-categories and gradations) based on their assessment of the likelihood of the issuer's inability to pay interest or principal (default) when due on each security. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, the Fund must rely entirely upon the Adviser's credit assessment that the security is comparable to investment grade. The presence of a ratings modifier, sub-category, or gradation (for example, a (+) or (-)) is intended to show relative standing within the major rating categories and does not affect the security credit rating for purposes of the Fund's investment parameters. If a security is downgraded below the minimum quality grade discussed above, the Adviser will reevaluate the security, but will not be required to sell it.
Investment Ratings for Noninvestment-Grade Securities
Noninvestment-grade securities are rated below BBB- by an NRSRO. These bonds have greater economic, credit and liquidity risks than investment-grade securities.
What are the Specific Risks of Investing in the Fund?
The following provides general information on the risks associated with the Fund's principal investments. Any additional risks associated with the Fund's non-principal investments are described in the Fund's SAI. The Fund's SAI also may provide additional information about the risks associated with the Fund's principal investments.
TAX-EXEMPT SECURITIES Risk
The securities in which the Fund invests may include those issued by state or local governments, other political subdivisions or authorities, or directly or indirectly supported by taxes, assessments, tolls, fees or other revenue collected by or otherwise derived from or through such issuers. The amount of public information available about tax-exempt securities is generally less than for corporate equities or bonds. The secondary market for tax-exempt securities also tends to be less well-developed and less liquid than many other securities markets, which may limit the Fund's ability to sell its tax-exempt securities at attractive prices. Special factors, such as legislative changes, and state and local economic and business developments, may adversely affect the yield and/or value of the Fund's investments in tax-exempt securities. Other factors include the general conditions of the tax-exempt securities market, the size of the particular offering, the maturity of the obligation and the rating of the issue. Like other issuers, there is no guarantee that the issuers of such securities will have sufficient revenues to satisfy their obligations (such as, for example, the payment of interest or principal when due). Legal, economic, political or other developments may raise impairments (such as, for example, limitations under applicable law on the issuer's authority to raise taxes, prolonged budgetary processes, declining real estate values, increasing pension liabilities
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or declining tax revenues which may occur due to shifting demographics or other factors) to such issuer's budgetary flexibility, liquidity and ability to satisfy its obligations. Such impairments may cause a downgrade in the credit ratings of such an issuer, or the securities issued or supported by it, and may cause such an issuer to defer payment of certain obligations, reduce or eliminate appropriations and/or default on its obligations.
Tax-exempt issuers can and have defaulted on obligations, been downgraded or commenced insolvency proceedings. Financial difficulties of such issuers may continue or get worse. Like other issuers and securities, the likelihood that the credit risk associated with such issuers and such securities will increase is greater during times of economic stress and financial instability. As a result, in such situations, there would be heightened risk that there could be an interruption in payments to holders of tax-exempt securities in some cases. There also could be a reduction in the market value of the tax-exempt securities held by the Fund, which could adversely affect the Fund's net asset value or the distributions paid by the Fund.
To the extent that the Fund invests a larger portion of its assets in the tax-exempt securities of a particular state or U.S. territory or possession, there is greater risk that political, regulatory, economic or other developments within that state or U.S. territory or possession may impact on the Fund's investment performance.
CALL RISK
The tax-exempt securities in which the Fund may invest can be principal investment strategies for the Fund and may be subject to call risk. Call risk is the possibility that an issuer may redeem a fixed-income security (including a tax-exempt security) before maturity (a “call”) at a price below or above its current market price. An increase in the likelihood of a call may reduce the security's price. If a fixed-income security is called, the Fund may have to reinvest the proceeds in other fixed-income securities with lower interest rates, higher credit risks or other less favorable characteristics.
Credit Enhancement Risk
The securities in which the Fund invests may be subject to credit enhancement (for example, guarantees, letters of credit or bond insurance). Credit enhancement is designed to help assure timely payment of the security; it does not protect the Fund against losses caused by declines in a security's value due to changes in market conditions. Securities subject to credit enhancement generally would be assigned a lower credit rating if the rating were based primarily on the credit quality of the issuer without regard to the credit enhancement. If the credit quality of the credit enhancement provider (for example, a bank or bond insurer) is downgraded, the rating on a security credit enhanced by such credit enhancement provider also may be downgraded.
A single enhancement provider may provide credit enhancement to more than one of the Fund's investments. Having multiple securities credit enhanced by the same enhancement provider will increase the adverse effects on the Fund that are likely to result from a downgrading of, or a default by, such an enhancement provider. Adverse developments in the banking or bond insurance industries also may negatively affect the Fund, as the Fund may invest in securities credit enhanced by banks or by bond insurers without limit. Bond insurers that provide credit enhancement for large segments of the fixed-income markets, including the municipal bond market, may be more susceptible to being downgraded or defaulting during recessions or similar periods of economic stress.
Leverage Risk
The tax-exempt securities, derivative contracts and hybrid instruments in which the Fund may invest can be principal investment strategies for the Fund and may be subject to leverage risk. Leverage risk is created when an investment, which includes, for example, an investment in a derivative contract, exposes the Fund to a level of risk that exceeds the amount invested. Changes in the value of such an investment magnify the Fund's risk of loss and potential for gain. Investments can have these same results if their returns are based on a multiple of a specified index, security or other benchmark.
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LIQUIDITY RISK
Trading opportunities are more limited for fixed-income securities (including tax-exempt securities) that have not received any credit ratings, have received any credit ratings below investment grade or are not widely held. Trading opportunities also are more limited for inverse floaters that have complex terms or that are not widely held. These features may make it more difficult to sell or buy a security at a favorable price or time. Consequently, the Fund may have to accept a lower price to sell a security, sell other securities to raise cash or give up an investment opportunity, any of which could have a negative effect on the Fund's performance. Infrequent trading of securities may also lead to an increase in their price volatility. Noninvestment-grade securities generally have less liquidity than investment-grade securities.
Liquidity risk also refers to the possibility that the Fund may not be able to sell a security or close out a derivative contract when it wants to. If this happens, the Fund will be required to continue to hold the security or keep the position open, and the Fund could incur losses.
OTC derivative contracts generally carry greater liquidity risk than exchange-traded contracts. This risk may be increased in times of financial stress, if the trading market for OTC derivative contracts becomes restricted.
PREPAYMENT AND EXTENSION RISK
Unlike traditional fixed-income securities (including tax-exempt securities), which pay a fixed rate of interest until maturity (when the entire principal amount is due), payments on municipal mortgage-backed securities include both interest and a partial payment of principal. Partial payment of principal may be comprised of scheduled principal payments as well as unscheduled payments from the voluntary prepayment, refinancing or foreclosure of the underlying loans. These unscheduled prepayments of principal create risks that can adversely affect a fund holding municipal mortgage-backed securities.
For example, when interest rates decline, the values of municipal mortgage-backed securities generally rise. However, when interest rates decline, unscheduled prepayments can be expected to accelerate, and the Fund would be required to reinvest the proceeds of the prepayments at the lower interest rates then available. Unscheduled prepayments would also limit the potential for capital appreciation on municipal mortgage-backed securities.
Conversely, when interest rates rise, the values of municipal mortgage-backed securities generally fall. Since rising interest rates typically result in decreased prepayments, this could lengthen the average lives of municipal mortgage-backed securities, and cause their value to decline more than traditional fixed-income securities.
Generally, municipal mortgage-backed securities compensate for the increased risk associated with prepayments by paying a higher yield. The additional interest paid for risk is measured by the difference between the yield of a municipal mortgage-backed security and the yield of a U.S. Treasury security or other appropriate benchmark with a comparable maturity (the “spread”). An increase in the spread will cause the price of the municipal mortgage-backed security to decline. Spreads generally increase in response to adverse economic or market conditions. Spreads may also increase if the security is perceived to have an increased prepayment risk or is perceived to have less market demand.
Risk of Investing in Derivative Contracts and Hybrid Instruments
The Fund's exposure to derivative contracts and hybrid instruments (either directly or through its investment in another investment company) involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. First, changes in the value of the derivative contracts and hybrid instruments in which the Fund invests may not be correlated with changes in the value of the underlying Reference Instruments or, if they are correlated, may move in the opposite direction than originally anticipated. Second, while some strategies involving derivatives may reduce the risk of loss, they may also reduce potential gains or, in some cases, result in losses by offsetting favorable price movements in portfolio holdings. Third, there is a risk that derivative contracts and hybrid instruments may be erroneously priced or improperly valued and, as a result, the Fund may need to make increased cash payments to the counterparty. Fourth, exposure to derivative contracts and hybrid instruments may have tax consequences to the Fund and its shareholders. For example, derivative contracts and hybrid instruments may cause the Fund to realize increased ordinary income or short-term capital gains (which are treated as ordinary income for federal income tax purposes) and, as a result, may increase taxable distributions to shareholders. In addition, under certain circumstances certain derivative contracts and hybrid instruments may cause the Fund to: (a) incur an excise tax on a portion of the income related to those contracts and instruments; and/or (b) reclassify, as a return of capital, some or all of the distributions previously made to shareholders during the fiscal year as dividend income. Fifth, a common provision in OTC derivative contracts permits the counterparty to terminate any such contract between it and the Fund, if the value of the Fund's total net assets declines below a specified level over a given time period. Factors that may contribute to such a decline (which usually must be substantial) include significant shareholder redemptions and/or a marked decrease in the market value of the Fund's investments. Any such termination of the Fund's OTC derivative contracts may adversely affect the Fund (for example, by increasing losses and/or costs, and/or preventing the Fund from fully implementing its investment strategies). Sixth, the Fund may use a derivative contract to benefit from a decline in the value of a Reference Instrument. If the value of the Reference Instrument declines
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during the term of the contract, the Fund makes a profit on the difference (less any payments the Fund is required to pay under the terms of the contract). Any such strategy involves risk. There is no assurance that the Reference Instrument will decline in value during the term of the contract and make a profit for the Fund. The Reference Instrument may instead appreciate in value creating a loss for the Fund. Seventh, a default or failure by a CCP or an FCM (also sometimes called a “futures broker”), or the failure of a contract to be transferred from an Executing Dealer to the FCM for clearing, may expose the Fund to losses, increase its costs, or prevent the Fund from entering or exiting derivative positions, accessing margin, or fully implementing its investment strategies. The central clearing of a derivative and trading of a contract over a SEF could reduce the liquidity in, or increase costs of entering into or holding, any contracts. Finally, derivative contracts and hybrid instruments may also involve other risks described in this Prospectus, such as interest rate, credit, liquidity and leverage risks.
Risk Associated with Noninvestment-Grade Securities
Securities that are rated below investment grade or unrated securities of comparable quality (i.e., noninvestment-grade securities), also known as junk bonds, generally entail greater economic, credit and liquidity risks than investment-grade securities. For example, their prices are more volatile, economic downturns and financial setbacks may affect their prices more negatively, and their trading market may be more limited. These securities are considered speculative with respect to the issuer's ability to pay interest and repay principal. The Fund will invest at least a majority of its assets in securities rated investment grade (or unrated securities of comparable quality), and may purchase securities rated below investment grade (or unrated securities of comparable quality) up to 49% of its assets.
RISK RELATED TO THE ECONOMY
The value of the Fund's portfolio may decline in tandem with a drop in the overall value of the markets in which the Fund invests and/or other markets based on negative developments in the U.S. and global economies. Economic, political and financial conditions, or industry or economic trends and developments, may, from time to time, and for varying periods of time, cause volatility, illiquidity or other potentially adverse effects in the financial markets, including the fixed-income market. The commencement, continuation or ending of government policies and economic stimulus programs, changes in monetary policy, increases or decreases in interest rates, or other factors or events that affect the financial markets, including the fixed-income markets, may contribute to the development of or increase in volatility, illiquidity, shareholder redemptions and other adverse effects which could negatively impact the Fund's performance. For example, the value of certain portfolio securities may rise or fall in response to changes in interest rates, which could result from a change in government policies, and has the potential to cause investors to move out of certain portfolio securities, including fixed-income securities. This may increase redemptions from funds that hold large amounts of certain securities, and may result in decreased liquidity and increased volatility in the financial markets. Market factors, such as the demand for particular portfolio securities, may cause the price of certain portfolio securities to fall while the prices of other securities rise or remain unchanged. Among other investments, lower-grade bonds may be particularly sensitive to changes in the economy.
Epidemic and Pandemic Risk
An outbreak of respiratory disease caused by a novel coronavirus was first detected in China in December 2019 and subsequently spread globally. This coronavirus has resulted in closing borders, enhanced health screenings, healthcare service preparation and delivery, quarantines, cancellations, and disruptions to supply chains, workflow operations and consumer activity, as well as general concern and uncertainty. The impact of this coronavirus may be short-term or may last for an extended period of time and result in a substantial economic downturn. Health crises caused by outbreaks, such as the coronavirus outbreak, may exacerbate other pre-existing political, social and economic risks. The impact of this outbreak, and other epidemics and pandemics that may arise in the future, could negatively affect the worldwide economy, as well as the economies of individual countries, individual companies (including fund service providers) and the market in general in significant and unforeseen ways. Any such impact could adversely affect the Fund's performance.
SECTOR RISK
A substantial part of the Fund's portfolio may be comprised of securities issued or credit-enhanced by companies in similar businesses or with other similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these issuers or entities. Developments affecting companies with similar characteristics might include changes in interest rates, changes in economic cycle affecting credit losses and regulatory changes.
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Tax Risk
In order to pay interest that is exempt from federal regular income tax, tax-exempt securities must meet certain legal requirements. Failure to meet such requirements may cause the interest received and distributed by the Fund to shareholders to be taxable.
Changes or proposed changes in federal, state or local tax laws may cause the prices of tax-exempt securities to fall and/or may affect the tax-exempt status of the securities in which the Fund invests.
The federal income tax treatment of payments in respect of certain derivative contracts is unclear. Additionally, the Fund may not be able to close out certain derivative contracts when it wants to. The Fund also may invest in market discount bonds, enter into credit default swap arrangements and other derivative transactions, and engage in other permissible activities that will likely cause the Fund to realize a limited amount of ordinary income or short-term capital gains (which are treated as ordinary income for federal income tax purposes). Consequently, for each of these reasons, the Fund may receive payments, and make distributions, that are treated as ordinary income for federal income tax purposes. Income from the Fund also may be subject to AMT.
ISSUER Credit Risk
It is possible that interest or principal on securities will not be paid when due. Noninvestment-grade securities generally have a higher default risk than investment-grade securities. Such non-payment or default may reduce the value of the Fund's portfolio holdings, its share price and its performance.
Many fixed-income securities (including tax-exempt securities) receive credit ratings from NRSROs such as Fitch Rating Service, Moody's Investor Services, Inc. and Standard & Poor's that assign ratings to securities by assessing the likelihood of an issuer and/or guarantor default. Higher credit ratings correspond to lower perceived credit risk and lower credit ratings correspond to higher perceived credit risk. Credit ratings may be upgraded or downgraded from time to time as an NRSRO's assessment of the financial condition of a party obligated to make payments with respect to such securities and credit risk changes. The impact of any credit rating downgrade can be uncertain. Credit rating downgrades may lead to increased interest rates and volatility in financial markets, which in turn could negatively affect the value of the Fund's portfolio holdings, its share price and its investment performance. Credit ratings are not a guarantee of quality. Credit ratings may lag behind the current financial conditions of the issuer and/or guarantor and do not provide assurance against default or other loss of money. Credit ratings do not protect against a decline in the value of a security. If a security has not received a rating, the Fund must rely entirely upon the Adviser's credit assessment.
Fixed-income securities generally compensate for greater credit risk by paying interest at a higher rate. The difference between the yield of a security and the yield of a U.S. Treasury security or other appropriate benchmark with a comparable maturity (the “spread”) measures the additional interest paid for risk. Spreads may increase generally in response to adverse economic or market conditions. A security's spread may also increase if the security's rating is lowered, or the security is perceived to have an increased credit risk. An increase in the spread will cause the price of the security to decline.
COUNTERPARTY CREDIT RISK
Counterparty credit risk includes the possibility that a party to a transaction involving the Fund will fail to meet its obligations. This could cause the Fund to lose money or to lose the benefit of the transaction or prevent the Fund from selling or buying other securities to implement its investment strategy.
INTEREST RATE RISK
Prices of fixed-income securities (including tax-exempt securities) rise and fall in response to changes in interest rates. Generally, when interest rates rise, prices of fixed-income securities fall. However, market factors, such as the demand for particular fixed-income securities, may cause the price of certain fixed-income securities to fall while the prices of other securities rise or remain unchanged.
The longer the duration of a fixed-income security, the more susceptible it is to interest rate risk. The duration of a fixed-income security may be equal to or shorter than the stated maturity of a fixed-income security. Recent and potential future changes in monetary policy made by central banks and/or their governments are likely to affect the level of interest rates. Duration measures the price sensitivity of a fixed-income security given a change in interest rates. For example, if a fixed-income security has an effective duration of three years, a 1% increase in general interest rates would be expected to cause the security's value to decline about 3% while a 1% decrease in general interest rates would be expected to cause the security's value to increase about 3%.
The impact of interest rate changes on the value of floating rate investments is typically reduced by periodic interest rate resets. Variable and floating rate securities generally are less sensitive to interest rate changes, but may decline in value if their interest rates do not rise as much or as quickly as interest rates in general. Conversely, variable and floating rate securities generally will not increase in value as much as fixed rate debt instruments if interest rates decline. Certain of the Fund's
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investments may also be valued, in part, by reference to the relative relationship between interest rates on tax-exempt securities and taxable securities. With respect to the Fund's investments described in the preceding sentence, the value of such Fund investments may be negatively affected (or positively affected) when the market for tax-exempt securities underperforms (or outperforms) the market for taxable securities.
technology Risk
The Adviser uses various technologies in managing the Fund, consistent with its investment objective(s) and strategy described in this Prospectus. For example, proprietary and third-party data and systems are utilized to support decision-making for the Fund. Data imprecision, software or other technology malfunctions, programming inaccuracies and similar circumstances may impair the performance of these systems, which may negatively affect Fund performance.
What Do Shares Cost?
CALCULATION OF NET ASSET VALUE
When the Fund receives your transaction request in proper form (as described in this Prospectus under the sections entitled “How to Purchase Shares” and “How to Redeem and Exchange Shares”), it is processed at the next calculated net asset value of a Share (NAV) plus any applicable front-end sales charge (“public offering price”). A Share's NAV is determined as of the end of regular trading on the New York Stock Exchange (NYSE) (normally 4:00 p.m. Eastern time), each day the NYSE is open. The Fund calculates the NAV of each class by valuing the assets allocated to the Share's class, subtracting the liabilities allocated to each class and dividing the balance by the number of Shares of the class outstanding. The NAV for each class of Shares may differ due to the level of expenses allocated to each class as well as a result of the variance between the amount of accrued investment income and capital gains or losses allocated to each class and the amount actually distributed to shareholders of each class. The Fund's current NAV and/or public offering price may be found at FederatedInvestors.com, via online news sources and in certain newspapers.
You can purchase, redeem or exchange Shares any day the NYSE is open.
When the Fund holds fixed-income securities that trade on days the NYSE is closed, the value of the Fund's assets may change on days you cannot purchase or redeem Shares.
In calculating its NAV, the Fund generally values investments as follows:
■  Fixed-income securities are fair valued using price evaluations provided by a pricing service approved by the Board of Directors (“Board”).
■  Derivative contracts listed on exchanges are valued at their reported settlement or closing price, except that options are valued at the mean of closing bid and asked quotations.
■  Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Board.
If any price, quotation, price evaluation or other pricing source is not readily available when the NAV is calculated, if the Fund cannot obtain price evaluations from a pricing service or from more than one dealer for an investment within a reasonable period of time as set forth in the Fund's valuation policies and procedures, or if information furnished by a pricing service, in the opinion of the Valuation Committee, is deemed not representative of the fair value of such security, the Fund uses the fair value of the investment determined in accordance with the procedures generally described below. There can be no assurance that the Fund could obtain the fair value assigned to an investment if it sold the investment at approximately the time at which the Fund determines its NAV per share.
Shares of other mutual funds are valued based upon their reported NAVs. The prospectuses for these mutual funds explain the circumstances under which they will use fair value pricing and the effects of using fair value pricing.
Fair Valuation
The Board has ultimate responsibility for determining the fair value of investments for which market quotations are not readily available. The Board has appointed a Valuation Committee comprised of officers of the Fund, the Adviser and certain of the Adviser's affiliated companies to assist in determining fair value and in overseeing the calculation of the NAV. The Board has also authorized the use of pricing services recommended by the Valuation Committee to provide fair value evaluations of the current value of certain investments for purposes of calculating the NAV. In the event that market quotations and price evaluations are not available for an investment, the Valuation Committee determines the fair value of the investment in accordance with procedures adopted by the Board. The Board periodically reviews and approves the fair valuations made by the Valuation Committee and any changes made to the procedures. The Fund's SAI discusses the methods used by pricing services and the Valuation Committee to assist the Board in valuing investments.
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Using fair value to price investments may result in a value that is different from an investment's most recent closing price and from the prices used by other mutual funds to calculate their NAVs. The application of the fair value procedures to an investment represent a good faith determination of such investment's fair value. There can be no assurance that the Fund could obtain the fair value assigned to an investment if it sold the investment at approximately the time at which the Fund determines its NAV per share.
SALES CHARGE INFORMATION
The following table summarizes the minimum investment amount and the maximum sales charge, if any, that you will pay on an investment in the Fund. Keep in mind that financial intermediaries may charge you fees for their services in connection with your Share transactions.
  Minimum
Initial/Subsequent
Investment
Amounts1 		Maximum Sales Charges
Shares Offered Front-End
Sales Charge2 		Contingent
Deferred
Sales Charge3
A $1,500/$100 4.50% 0.00%
B $1,500/$100 None 5.50%
C $1,500/$100 None 1.00%
F $1,500/$100 1.00% 1.00%
1 Please see “By Systematic Investment Program” for applicable minimum investment. Financial intermediaries may impose higher or lower minimum investment requirements on their customers than those imposed by the Fund.
  To maximize your return and minimize the sales charges and marketing fees, purchases of the B class are generally limited to $100,000 and purchases of the C class are generally limited to $1,000,000. Purchases equal to or in excess of these limits may be made in the A class. If your Shares are held on the books of the Fund in the name of a financial intermediary, you may be subject to rules of your financial intermediary that differ from those of the Fund. See “Purchase Restrictions on B Class and C Class” below. After the B class has been held for eight years from the date of purchase, they will automatically convert to the A class. This conversion is a non-taxable event.
  After C Shares have been held for ten years from the date of purchase, they will automatically convert to A Shares on the next monthly conversion processing date, provided that certain conditions are satisfied. See “How is the Fund Sold?” This conversion is a non-taxable event.
2 Front-End Sales Charge is expressed as a percentage of public offering price. See “Sales Charge When You Purchase.”
3 See “Sales Charge When You Redeem.”
As shown in the table above, each class of Shares has a different sales charge structure. In addition, the ongoing annual operating expenses (“expense ratios”), as well as the compensation payable to financial intermediaries, also vary among the classes. Before you decide which class to purchase, you should review the different charges and expenses of each class carefully, in light of your personal circumstances, and consult with your financial intermediary.
Among the important factors to consider are the amount you plan to invest and the length of time you expect to hold your investment (for example, whether the investment is in connection with a long-term retirement program). You should also consider, for example, that it may be possible to reduce or eliminate, the front-end sales charges imposed on purchases of the A class and F class. Among other ways, the A class and F class have a series of “breakpoints,” which means that the front-end sales charges decrease (and can be eliminated entirely) as the amount invested increases. (The breakpoint schedule is set out below, along with detailed information on ways to reduce, or eliminate, front-end sales charges.) On the other hand, the B class does not have front-end sales charges, but the deferred sales charges imposed on redemptions of the B class do not vary at all in relation to the amounts invested. Rather, these charges decrease with the passage of time (ultimately going to zero after Shares have been held for six full years). Finally, the C class does not have front-end sales charges, but does impose a contingent deferred sales charge only if redeemed within one year after purchase; however, the asset-based 12b-1 fees charged to the C class are greater than those charged to the A class and F class and comparable to those charged to the B class.
You should also consider that the expense ratio for the A class will be lower than that for the B class or C class. Thus, the fact that no front-end charges are ever imposed on purchases of the B class and C class does not always make them preferable to the A class.
SALES CHARGE WHEN YOU PURCHASE
The following tables list the sales charges which will be applied to your Share purchase, subject to the breakpoint discounts indicated in the tables and described below.
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A:    
Purchase Amount Sales Charge
as a Percentage
of Public
Offering Price 		Sales Charge
as a Percentage
of NAV
Less than $100,000 4.50% 4.71%
$100,000 but less than $250,000 3.75% 3.90%
$250,000 but less than $500,000 2.50% 2.56%
$500,000 but less than $1 million 2.00% 2.04%
$1 million or greater1 0.00% 0.00%
1 A contingent deferred sales charge (CDSC) of 0.75% of the redemption amount applies to Shares originally purchased in an amount of $1 million or more and redeemed up to 24 months after purchase under certain investment programs where a financial intermediary received an advance payment on the transaction. CDSC exceptions may apply. See “Sales Charge When You Redeem.”
    
F:    
Purchase Amount Sales Charge
as a Percentage
of Public
Offering Price 		Sales Charge
as a Percentage
of NAV
Less than $1 million 1.00% 1.01%
$1 million or greater 0.00% 0.00%
REDUCING THE SALES CHARGE WITH BREAKPOINT DISCOUNTS
Your investment may qualify for a reduction or elimination of the sales charge, also known as a breakpoint discount. The breakpoint discounts offered by the Fund are indicated in the tables above.
You or your financial intermediary must notify the Fund's Transfer Agent of eligibility for any applicable breakpoint discount at the time of purchase.
In order to receive the applicable breakpoint discount, it may be necessary at the time of purchase for you to inform your financial intermediary or the Transfer Agent of the existence of other accounts in which there are holdings eligible to be aggregated to meet a sales charge breakpoint (“Qualifying Accounts”). Qualifying Accounts mean those share accounts in the Federated Hermes funds held directly or through a financial intermediary or through a single-participant retirement account by you, your spouse, your parents (if you are under age 21) and/or your children under age 21, which can be linked using tax identification numbers (TINs), social security numbers (SSNs) or broker identification numbers (BINs). Accounts held through 401(k) plans and similar multi-participant retirement plans, or through “Section 529” college savings plans or those accounts which cannot be linked using TINs, SSNs or BINs, are not Qualifying Accounts.
In order to verify your eligibility for a breakpoint discount, you will be required to provide to your financial intermediary or the Transfer Agent certain information on your New Account Form and may be required to provide account statements regarding Qualifying Accounts. If you purchase through a financial intermediary, you may be asked to provide additional information and records as required by the financial intermediary. Failure to provide proper notification or verification of eligibility for a breakpoint discount may result in your not receiving a breakpoint discount to which you are otherwise entitled. Breakpoint discounts apply only to your current purchase and do not apply retroactively to previous purchases. The sales charges applicable to the Shares offered in this Prospectus, and the breakpoint discounts offered with respect to such Shares, are described in full in this Prospectus. Because the Prospectus is available at FederatedInvestors.com free of charge, Federated Hermes does not disclose this information separately on the website.
Contingent upon notification to the Transfer Agent, the sales charge at purchase of the A class and F class only, may be reduced or eliminated by:
Larger Purchases
■  Purchasing the A class or F class in greater quantities to reduce the applicable sales charge;
Concurrent and Accumulated Purchases
■  Combining concurrent purchases of and/or current investments in the A class, B class, C class, F class and R class shares of any Federated Hermes fund made or held by Qualifying Accounts; the purchase amount used in determining the sales charge on your additional Share purchase will be calculated by multiplying the respective maximum public offering price times the number of the A class, B class, C class, F class and R class shares of any Federated Hermes fund currently held in Qualifying Accounts and adding the dollar amount of your current purchase; or
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Letter of Intent
■  Signing a letter of intent to purchase a qualifying amount of the A class or F class within 13 months. (Call your financial intermediary or the Fund for more information.) The Fund's custodian will hold Shares in escrow equal to the maximum applicable sales charge. If you complete the Letter of Intent, the Custodian will release the Shares in escrow to your account. If you do not fulfill the Letter of Intent, the Custodian will redeem the appropriate amount from the Shares held in escrow to pay the sales charges that were not applied to your purchases.
PURCHASE RESTRICTIONS ON B class AND C class
In order to maximize shareholder returns and minimize sales charges and marketing fees, an investor's purchases of the B class are generally limited to $100,000 and an investor's purchases of the C class are generally limited to $1,000,000 (except for employer-sponsored retirement plans held in omnibus accounts with respect to C Shares). In applying the limit, the dollar amount of the current purchase is added to the product obtained by multiplying the respective maximum public offering price times the number of the A class, B class, C class, F class and R class shares of any Federated Hermes fund currently held in linked Qualifying Accounts, as defined in the section entitled “Reducing the Sales Charge with Breakpoint Discounts.” If the sum of these two amounts would equal or exceed the limit, then the current purchase order will not be processed. Instead, the Distributor will attempt to contact the investor or the investor's financial intermediary to offer the opportunity to convert the order to the A class.
If your Shares are held on the books of the Fund in the name of a financial intermediary, you may be subject to rules of your financial intermediary that differ from those of the Fund.
ELIMINATING THE SALES CHARGE
Your investment may qualify for a sales charge waiver. Sales charge waivers offered by the Fund are listed below. In order to receive a sales charge waiver, you must inform your financial intermediary or the Transfer Agent at the time of each purchase that your investment is eligible for a waiver. It is possible that your financial intermediary may not, in accordance with its policies, procedures and system limitations, be able to ensure your receipt of one or more of these waiver categories. In this situation, you would need to invest directly through the Fund's Transfer Agent. If you do not let your financial intermediary or the Transfer Agent know that your investment is eligible for a sales charge waiver at the time of purchase, you may not receive the waiver to which you may otherwise be entitled.
Contingent upon notification to the Transfer Agent, the sales charge will be eliminated when you purchase or acquire Shares:
■  within 120 days of redeeming Shares of an equal or greater amount (see “120 Day Reinstatement Program” below);
■  through an eligible program offered by a Financial Intermediary that provides for the purchase of Shares without imposition of a sales charge (for example, a wrap account, self-directed brokerage account, retirement, or other fee-based program offered by the Financial Intermediary);
■  with reinvested dividends or capital gains;
■  issued in connection with the merger, consolidation or acquisition of the assets of another fund. Further, the sales charge will be eliminated on purchases of Shares made by a shareholder that originally became a shareholder of a Federated Hermes Fund pursuant to the terms of an agreement and plan of reorganization which permits shareholders to acquire Shares at NAV, provided that such purchased Shares are held directly with the Fund's transfer agent. If the Shares are held through a financial intermediary the sales charge waiver will not apply (A class only);
■  as a Federated Life Member (Federated shareholders who originally were issued shares through the “Liberty Account,” which was an account for the Liberty Family of Funds on February 28, 1987, or who invested through an affinity group prior to August 1, 1987, into the Liberty Account) (A class only);
■  as a Director, employee or former employee of the Fund, the Adviser, the Distributor and their affiliates, an employee of any financial intermediary that sells Shares according to a sales agreement with the Distributor, an immediate family member of these individuals or a trust, pension or profit-sharing plan for these individuals; or
■  pursuant to the exchange privilege.
The sales charge will not be eliminated if you purchase Shares of the Fund through an exchange of shares of Federated Government Reserves Fund unless your Federated Government Reserves Fund shares were acquired through an exchange of shares on which the sales charge had previously been paid.
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120 Day reinstatement program
Within 120 days of redeeming Class A, Class B, Class C and Class F Shares of the Fund, upon proper notification to the Fund's Transfer Agent, you may reinvest all or a portion of the redemption proceeds in Class A Shares of the Fund at net asset value, without the imposition of a sales charge or CDSC. Please note:
■  The ownership of the account receiving the purchase is not required to be identical to that of the account in which the redemption was placed; however, the registration of the account receiving the purchase must include at least one registered shareholder of the account from which the redemption occurred.
■  You will not be reimbursed for any fees originally incurred on the redemption (e.g., CDSC or redemption fees) by subsequently participating in the 120 Day Reinstatement Program.
■  The 120 Day Reinstatement Program does not supersede or override any restrictions placed on an account due to frequent trading and/or client contractual issues.
Additional operational restrictions may apply, please contact a Client Service Representative at 1-800-341-7400 for more information.
sales charge when you redeem
Your redemption proceeds may be reduced by a sales charge, commonly referred to as a contingent deferred sales charge (CDSC). Shares otherwise subject to a CDSC will not be charged a CDSC at the time of an exchange; however, the CDSC will continue to be measured from the date of your original purchase. The CDSC schedule applicable to your original purchase will continue to apply to the shares you receive in an exchange.
To keep the sales charge as low as possible, the Fund redeems your Shares in this order:
■  Shares that are not subject to a CDSC; and
■  Shares held the longest. (To determine the number of years your Shares have been held, include the time you held shares of other Federated Hermes funds that have been exchanged for Shares of this Fund.)
The CDSC is then calculated using the Share price at the time of purchase or redemption, whichever is lower.
A:    
If you make a purchase of the A class in the amount of $1 million or more and your financial intermediary received an advance commission on the sale, you will pay a 0.75% CDSC on any such Shares redeemed within 24 months of the purchase.
B:    
Shares Held Up To:   CDSC
1 Year   5.50%
2 Years   4.75%
3 Years   4.00%
4 Years   3.00%
5 Years   2.00%
6 Years   1.00%
7 Years or More   0.00%
C:    
You will pay a 1.00% CDSC if you redeem Shares within 12 months of the purchase date.
F:    
Purchase Amount Shares Held CDSC
Up to $2 million 4 years or less 1.00%
$2 million but less than $5 million 2 years or less 0.50%
$5 million or more 1 year or less 0.25%
Your redemption may qualify for a waiver of the CDSC. The CDSC waivers offered by the Fund are listed below. In order to receive a waiver of the CDSC, you must inform your financial intermediary or the Transfer Agent at the time of each redemption that your investment is eligible for a waiver. It is possible that your financial intermediary may not, in accordance with its policies, procedures and system limitations, be able to ensure your receipt of one or more of these waiver categories. In this situation, you would need to invest directly through the Fund's Transfer Agent in order to take advantage of the waiver. If you do not let your financial intermediary or the Transfer Agent know that your redemption is eligible for a CDSC waiver at the time of redemption, you may not receive the waiver to which you may otherwise be entitled.
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Contingent upon notification to the Transfer Agent, you will not be charged a CDSC when redeeming Shares:
■  following the death of the last surviving shareholder on the account or the post-purchase disability of all registered shareholders, as defined in Section 72(m)(7) of the Internal Revenue Code of 1986 (the beneficiary on an account with a Transfer on Death registration is deemed the last surviving shareholder on the account);
■  due to the termination of a trust following the death of the trustor/grantor or beneficiary, provided that the trust document specifically states that the trust is terminated upon the death;
■  representing minimum required distributions from an IRA or other retirement plan as required under the Internal Revenue Code;
■  purchased by Directors, employees of the Fund, the Adviser, the Distributor and their affiliates, by employees of a financial intermediary that sells Shares according to a sales agreement with the Distributor, by the immediate family members of the above persons, and by trusts, pension or profit-sharing plans for the above persons;
■  purchased through an eligible program offered by a Financial Intermediary that provides for the purchase of Shares without imposition of a sales charge (for example, a wrap account, self-directed brokerage account, retirement, or other fee-based program offered by the Financial Intermediary);
■  purchased with reinvested dividends or capital gains;
■  redeemed by the Fund when it closes an account for not meeting the minimum balance requirements; or
■  purchased pursuant to the exchange privilege if the Shares were held for the applicable CDSC holding period (the holding period on the shares purchased in the exchange will include the holding period of the shares sold in the exchange);
A Class Only
■  purchased in the amount of $1 million or more and redeemed within 24 months of purchase if the Shares were originally purchased through an eligible program offered by a Financial Intermediary that provides for the purchase of Shares without imposition of a sales charge (for example, a wrap account, self-directed brokerage account, retirement, or other fee-based program offered by the Financial Intermediary);
B Class Only
■  which are qualifying redemptions of the B class under a Systematic Withdrawal Program;
F Class Only
■  representing a total or partial distribution from a qualified plan, which does not include account transfers, rollovers or redemptions for the purpose of reinvestment. For these purposes, qualified plan does not include an IRA, individual 401(k) or custodial account following retirement.
ADDITIONAL INFORMATION ON THE AVAILABILITY OF CERTAIN WAIVERS AND DISCOUNTS
The availability of certain sales charge waivers and discounts will depend on whether you purchase your shares directly from the Fund or through a financial intermediary. Certain financial intermediaries may have different policies and procedures regarding the availability of front-end sales load waivers or CDSC waivers which are discussed in Appendix B to this Prospectus. The information contained in Appendix B is based on information provided by these financial intermediaries. Please contact your financial intermediary to ensure that you have the most current information regarding the sales charge waivers and discounts available to you and that you understand the steps you must take to qualify for available waivers and discounts. In all instances, it is the shareholder's responsibility to notify the Fund or the shareholder's Financial Intermediary at the time of purchase of any relationship or other facts qualifying the investor for sales charge waivers or discounts. For waivers and discounts not available through a particular financial intermediary, shareholders will have to purchase Fund shares directly from the Fund or through another financial intermediary to receive these waivers or discounts.
COMMISSIONS ON CERTAIN SHARES
The Fund does not charge any front-end load, deferred sales charge or other asset-based fee for sales or distribution of IS Shares. However, if you purchase IS Shares through a broker acting solely as an agent on behalf of its customers, you may be required to pay a commission to the broker in an amount determined and separately disclosed to you by the broker.
Because the Fund is not a party to any such commission arrangement between you and your broker, any purchases and redemptions of IS Shares will be made at the applicable net asset value (before imposition of the sales commission). Any such commissions charged by a broker are not reflected in the fees and expenses listed in the “Risk/Return Summary: Fees and Expenses” section of the Fund's Prospectus and described above nor are they reflected in the “Performance: Bar Chart and Table,” because they are not charged by the Fund.
Shares of the Fund are available in other share classes that have different fees and expenses.
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How is the Fund Sold?
The Fund offers the following Share classes: Class A Shares (A), Class B Shares (B), Class C Shares (C), Class F Shares (F) and Institutional Shares (IS), each representing interests in a single portfolio of securities. All Share classes have different sales charges and/or other expenses which affect their performance. Please note that certain purchase restrictions may apply.
Under the Distributor's Contract with the Fund, the Distributor, Federated Securities Corp., offers Shares on a continuous, best-efforts basis. The Distributor is a subsidiary of Federated Hermes, Inc. (“Federated Hermes,” formerly, Federated Investors, Inc.). The Fund may not be a suitable investment for retirement plans.
A, B, C & F Classes
The Fund's Distributor markets the A, B, C and F classes to institutions or to individuals, directly or through financial intermediaries.
Class B Share Closure
Class B Shares are closed to new investments by new investors and existing shareholders (excluding reinvestment of dividends and capital gains). Reinvestment of dividends and capital gains will continue uninterrupted. Class B Shares of the Fund may be exchanged for Class B Shares of any other Federated Hermes fund.
A shareholder owning the Fund's Class B Shares may continue to hold those shares until such shares automatically convert to Class A Shares under the Fund's existing conversion schedule as described in the Fund's prospectus, or until the shareholder redeems such Class B Shares, subject to any applicable contingent deferred sales charge (CDSC).
Reinvestment of dividends and capital gains will continue uninterrupted.
All other Class B Share features, including but not limited to distribution (12b-1) and service fees, CDSC, accumulation privileges and conversion features, will remain unchanged for Class B Shares.
IS Shares
The Fund's Distributor markets the IS Shares to Eligible Investors, as described below. In connection with a request to purchase the IS Shares, you should provide documentation sufficient to verify your status as an Eligible Investor. As a general matter, the IS Shares is not available for direct investment by natural persons.
The following categories of Eligible Investors are not subject to any minimum initial investment amount for the purchase of the IS Shares (however, such accounts remain subject to the Fund's policy on “Accounts with Low Balances” as discussed later in this Prospectus):
■  An investor participating in a no-load platform, network or other fee-based program offered by a financial intermediary, for example, a wrap-account or retirement platform where Federated Hermes has entered into an agreement with the intermediary;
■  A trustee/director, employee or former employee of the Fund, the Adviser, the Distributor and their affiliates; an immediate family member of these individuals or a trust, pension or profit-sharing plan for these individuals;
■  An employer-sponsored retirement plan;
■  A trust institution investing on behalf of its trust customers;
■  Additional sales to an investor (including a natural person) who owned the IS Shares of the Fund as of December 31, 2008;
■  A Federated Hermes Fund;
■  An investor (including a natural person) who acquired the IS Shares of a Federated Hermes fund pursuant to the terms of an agreement and plan of reorganization which permits the investor to acquire such shares; and
■  In connection with an acquisition of an investment management or advisory business, or related investment services, products or assets, by Federated or its investment advisory subsidiaries, an investor (including a natural person) who: (1) becomes a client of an investment advisory subsidiary of Federated Hermes; or (2) is a shareholder or interest holder of a pooled investment vehicle or product that becomes advised or subadvised by a Federated Hermes investment advisory subsidiary as a result of such an acquisition other than as a result of a fund reorganization transaction pursuant to an agreement and plan of reorganization.
The following categories of Eligible Investors are subject to applicable minimum initial investment amounts for the purchase of the IS Shares (see “How to Purchase Shares” below):
■  An investor, other than a natural person, purchasing the IS Shares directly from the Fund; and
■  In connection with an initial purchase of the IS Shares through an exchange, an investor (including a natural person) who owned the IS Shares of another Federated Hermes fund as of December 31, 2008.
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Intra-Fund Share Conversion Program
A shareholder in the Fund's Shares may convert their Shares at net asset value to any other share class of the Fund if the shareholder meets the investment minimum and eligibility requirements for the share class into which the conversion is sought, as applicable. This share conversion program is not applicable to the Fund's Class B Shares. The share conversion program is not applicable to the Fund's Class A Shares, Class C Shares and Class F Shares subject to a contingent deferred sales charge, if applicable. For Class C Shares purchased through a financial intermediary after June 30, 2017, such shares may only be converted to another share class of the same Fund if: (i) the shares are no longer subject to a CDSC or the financial intermediary agrees to reimburse the Fund's Distributor the CDSC otherwise payable upon the sale of such shares; (ii) the shareholder meets the investment minimum and eligibility requirements for the share class into which the conversion is sought, as applicable; and (iii) (a) the conversion is made to facilitate the shareholder's participation in a self-directed brokerage (non-advice) account or a fee-based advisory program offered by the intermediary; or (b) the conversion is part of a multiple-client transaction through a particular financial intermediary as pre-approved by the Fund's Administrator. Such conversion of classes should not result in a realization event for tax purposes. Contact your financial intermediary or call 1-800-341-7400 to convert your Shares.
Class B Share Automatic Conversion Feature
After Class B Shares have been held for eight years from the date of purchase, they will automatically convert into Class A Shares on the next monthly conversion processing date, provided that the Fund or financial intermediary has records confirming that the Class B Shares have been held for at least eight years and that the Class A Shares are available for purchase. For Class B Shares acquired in an exchange from another fund, the date of purchase will be based on the initial purchase of the Class B Shares of the prior fund. Certain financial intermediaries, record keepers and platforms do not track shareholder level share lot aging for certain types of accounts. These Class B Shares would not satisfy the conditions for the conversion. Contact your financial intermediary or call 1-800-341-7400 for more information.
Class C Share Automatic Conversion Feature
After Class C Shares have been held for ten years from the date of purchase, they will automatically convert into Class A Shares on the next monthly conversion processing date, provided that the Fund or financial intermediary has records confirming that the Class C Shares have been held for at least ten years and that the Class A Shares are available for purchase. For Class C Shares acquired in an exchange from another Federated Hermes fund, the date of purchase will be based on the initial purchase of the Class C Shares of the prior Federated Hermes fund. Certain financial intermediaries, record keepers and platforms do not track shareholder level share lot aging for certain types of accounts. These Class C Shares would not satisfy the conditions for the conversion. Contact your financial intermediary or call 1-800-341-7400 for more information.
Payments to Financial Intermediaries
The Fund and its affiliated service providers may pay fees as described below to financial intermediaries (such as broker-dealers, banks, investment advisers or third-party administrators) whose customers are shareholders of the Fund.
FRONT-END SALES CHARGE REALLOWANCES
The Distributor receives a front-end sales charge on certain Share sales. The Distributor pays a portion of this charge to financial intermediaries that are eligible to receive it (the “Dealer Reallowance”) and retains any remaining portion of the front-end sales charge.
When a financial intermediary's customer purchases Shares, the financial intermediary may receive a Dealer Reallowance as follows:
A Class:  
Purchase Amount Dealer Reallowance
as a Percentage of
Public Offering Price
Less than $100,000 4.00%
$100,000 but less than $250,000 3.25%
$250,000 but less than $500,000 2.25%
$500,000 but less than $1 million 1.80%
$1 million or greater 0.00%
F Class:  
Less than $250,000 1.00%
$250,000 or greater 0.00%
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ADVANCE COMMISSIONS
When a financial intermediary's customer purchases Shares, the financial intermediary may receive an advance commission as follows:
A Class (for purchases over $1 million):  
Purchase Amount Advance Commission
as a Percentage of
Public Offering Price
First $1 million - $5 million 0.75%
Next $5 million - $20 million 0.50%
Over $20 million 0.25%
Advance commissions are calculated on a year-by-year basis based on amounts invested during that year. Accordingly, with respect to additional purchase amounts, the advance commission breakpoint resets annually to the first breakpoint on the anniversary of the first purchase.
A class purchases under this program may be made by Letter of Intent or by combining concurrent purchases. The above advance commission will be paid only on those purchases that were not previously subject to a front-end sales charge or dealer advance commission. Certain retirement accounts may not be eligible for this program.
B Class:  
  Advance Commission
as a Percentage of
Public Offering Price
All Purchase Amounts Up to 5.00%
C Class:  
  Advance Commission
as a Percentage of
Public Offering Price
All Purchase Amounts 1.00%
F Class:  
Purchase Amount Advance Commission
as a Percentage of
Public Offering Price
Less than $2 million 1.00%
$2 million but less than $5 million 0.50%
$5 million or greater 0.25%
RULE 12b-1 FEES
B & C Class
The Board has adopted a Rule 12b-1 Plan, which allows payment of marketing fees of up to 0.75% of average net assets to the Distributor for the sale, distribution, administration and customer servicing of the Fund's B class and C class. When the Distributor receives Rule 12b-1 fees, it may pay some or all of them to financial intermediaries whose customers purchase Shares. In addition, in connection with the sale of the B class and C class, Federated Hermes and its subsidiaries make advance commission payments to financial intermediaries and in return may receive Rule 12b-1 fees and contingent deferred sales loads from the B class and C class. Federated Hermes and its subsidiaries may benefit or sustain losses from such arrangements. Because these Shares pay marketing fees on an ongoing basis, your investment cost may be higher over time than other shares with different sales charges and marketing fees.
service fees
The Fund may pay Service Fees of up to 0.25% of average net assets to financial intermediaries or to Federated Shareholder Services Company (FSSC), a subsidiary of Federated Hermes, for providing services to shareholders and maintaining shareholder accounts. Intermediaries that receive Service Fees may include a company affiliated with management of Federated Hermes. If a financial intermediary receives Service Fees on an account, it is not eligible to also receive Account Administration Fees on that same account.
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ACCOUNT ADMINISTRATION FEES
The Fund may pay Account Administration Fees of up to 0.25% of average net assets to banks that are not registered as broker-dealers or investment advisers for providing administrative services to the Fund and its shareholders. If a financial intermediary receives Account Administration Fees on an account, it is not eligible to also receive Service Fees or Recordkeeping Fees on that same account.
RECORDKEEPING FEES
The Fund may pay Recordkeeping Fees on an average-net-assets basis or on a per-account-per-year basis to financial intermediaries for providing recordkeeping services to the Fund and its shareholders. If a financial intermediary receives Recordkeeping Fees on an account, it is not eligible to also receive Account Administration Fees or Networking Fees on that same account.
networking fees
The Fund may reimburse Networking Fees on a per-account-per-year basis to financial intermediaries for providing administrative services to the Fund and its shareholders on certain non-omnibus accounts. If a financial intermediary receives Networking Fees on an account, it is not eligible to also receive Recordkeeping Fees on that same account.
ADDITIONAL PAYMENTS TO FINANCIAL INTERMEDIARIES
The Distributor may pay out of its own resources amounts to certain financial intermediaries, including broker-dealers, banks, registered investment advisers, independent financial planners and retirement plan administrators, that support the sale of Shares or provide services to Fund shareholders. The amounts of these payments could be significant, and may create an incentive for the financial intermediary or its employees or associated persons to recommend or sell Shares of the Fund to you. Not all financial intermediaries receive such payments, and the amount of compensation may vary by intermediary. In some cases, such payments may be made by or funded from the resources of companies affiliated with the Distributor (including the Adviser). These payments are not reflected in the fees and expenses listed in the fee table section of the Fund's Prospectus and described above because they are not paid by the Fund.
These payments are negotiated and may be based on such factors as: the number or value of Shares that the financial intermediary sells or may sell; the value of client assets invested; the level and types of services or support furnished by the financial intermediary; or the Fund's and/or other Federated Hermes funds' relationship with the financial intermediary. These payments may be in addition to payments, as described above, made by the Fund to the financial intermediary. In connection with these payments, the financial intermediary may elevate the prominence or profile of the Fund and/or other Federated Hermes funds, within the financial intermediary's organization by, for example, placement on a list of preferred or recommended funds and/or granting the Distributor preferential or enhanced opportunities to promote the funds in various ways within the financial intermediary's organization. In addition, as discussed above in “Commissions on Certain Shares,” if you purchase IS Shares through a broker acting solely as an agent on behalf of its customers, you may be required to pay a commission to the broker in an amount determined and separately disclosed to you by the broker. You can ask your financial intermediary for information about any payments it receives from the Distributor or the Fund and any services provided, as well as about fees and/or commissions it charges.
How to Purchase Shares
As described in more detail in the section entitled “How is the Fund Sold?” under the subheading “Class B Share Closure,” the Fund's Class B Shares are closed to new investments by new investors and existing shareholders (excluding reinvestment of dividends and capital gains). Reinvestment of dividends and capital gains will continue uninterrupted. Please disregard any further references to purchases of Class B Shares with the exception of Class B Share exchanges. Class B Shares of the Fund may be exchanged for Class B Shares of any other Federated Hermes fund.
You may purchase Shares of the Fund any day the NYSE is open. Shares will be purchased at the NAV next calculated after your investment is received by the Fund, or its agent, in proper form. The Fund reserves the right to reject any request to purchase or exchange Shares. New investors must submit a completed New Account Form. All accounts, including those for which there is no minimum initial investment amount required, are subject to the Fund's policy on “Accounts with Low Balances” as discussed later in this Prospectus.
Where the Fund offers more than one Share class and you do not specify the class choice on your New Account Form or form of payment (e.g., Federal Reserve wire or check), you automatically will receive the A class.
For important account information, see the section “Security and Privacy Protection.”
You may purchase Shares through a financial intermediary, directly from the Fund or through an exchange from another Federated Hermes fund.
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THROUGH A FINANCIAL INTERMEDIARY
■  Establish an account with the financial intermediary; and
■  Submit your purchase order to the financial intermediary before the end of regular trading on the NYSE (normally 4:00 p.m. Eastern time).
The Fund has authorized certain intermediaries to accept Share purchase orders on its behalf. When authorized intermediaries receive an order in proper form, the order is considered as being placed with the Fund, and Shares will be bought at the NAV next calculated after such an order is received by the authorized intermediary. If your financial intermediary is not an authorized intermediary, the Fund or its agent must receive the purchase order in proper form from your financial intermediary by the end of regular trading on the NYSE (normally 4:00 p.m. Eastern time) in order for your transaction to be priced at that day's NAV. In addition, your financial intermediary must forward your payment by the prescribed trade settlement date (typically within one to three business days) to the Fund's transfer agent, State Street Bank and Trust Company (“Transfer Agent”). You will become the owner of Shares and receive dividends when your payment is received in accordance with these time frames (provided that, if payment is received in the form of a check, the check clears). If your payment is not received in accordance with these time frames, or a check does not clear, your purchase will be canceled and you could be liable for any losses, fees or expenses incurred by the Fund or the Fund's Transfer Agent.
Financial intermediaries should send payments according to the instructions in the sections “By Wire” or “By Check.”
Financial intermediaries may impose higher or lower minimum investment requirements on their customers than those imposed by the Fund. Keep in mind that financial intermediaries may charge you fees for their services in connection with your Share transactions.
Shareholders are encouraged to ask their financial intermediary if they are an authorized agent for the Fund and about any fees that may be charged by the financial intermediary.
DIRECTLY FROM THE FUND
■  Establish your account with the Fund by submitting a completed New Account Form; and
■  Send your payment to the Fund by Federal Reserve wire or check.
You will become the owner of Shares and your Shares will be priced at the next calculated NAV after the Fund receives your wire or your check. If your check does not clear, your purchase will be canceled and you could be liable for any losses or fees incurred by the Fund or the Fund's Transfer Agent.
By Wire
To facilitate processing your order, please call the Fund before sending the wire. Send your wire to:
State Street Bank and Trust Company
Boston, MA
Dollar Amount of Wire
ABA Number 011000028
BNF: 23026552
Attention: Federated EDGEWIRE
Wire Order Number, Dealer Number or Group Number
Nominee/Institution Name
Fund Name and Number and Account Number
You cannot purchase Shares by wire on holidays when wire transfers are restricted.
By Check
Make your check payable to The Federated Funds, note your account number on the check, and send it to:
The Federated Funds
P.O. Box 219318
Kansas City, MO 64121-9318
If you send your check by a private courier or overnight delivery service that requires a street address, send it to:
The Federated Funds
430 W 7th Street
Suite 219318
Kansas City, MO 64105-1407
Payment should be made in U.S. dollars and drawn on a U.S. bank. The Fund reserves the right to reject any purchase request. For example, to protect against check fraud the Fund may reject any purchase request involving a check that is not made payable to The Federated Funds (including, but not limited to, requests to purchase Shares using third-party checks) or involving temporary checks or credit card checks.
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By Direct Deposit
You may establish Payroll Deduction/Direct Deposit arrangements for investments into the Fund by either calling a Client Service Representative at 1-800-341-7400; or by completing the Payroll Deduction/Direct Deposit Form, which is available on FederatedInvestors.com under “Resources” and then “Literature and Forms,” then “Forms.” You will receive a confirmation when this service is available.
THROUGH AN EXCHANGE
You may purchase Fund Shares through an exchange from another Federated Hermes fund. To do this you must:
■  meet any applicable shareholder eligibility requirements;
■  ensure that the account registrations are identical;
■  meet any applicable minimum initial investment requirements; and
■  receive a prospectus for the fund into which you wish to exchange.
An exchange is treated as a redemption and a subsequent purchase, and is a taxable transaction. The Fund reserves the right to reject any request to purchase or exchange Shares. The Fund may modify or terminate the exchange privilege at any time.
A, B, C & F Classes
You may purchase Shares through an exchange from the same share class of another Federated Hermes fund.
IS Class
You may purchase Shares through an exchange from any Federated Hermes fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares of Federated Institutional Money Market Management, Federated Institutional Tax-Free Cash Trust, Federated Institutional Prime Obligations Fund, Federated Institutional Prime Value Obligations Fund, no-load Class A Shares and Class R Shares of any Fund.
By Online Account Services
You may access your accounts online to purchase shares through FederatedInvestors.com's Shareholder Account Access system once you have registered for access. Online transactions may be subject to certain limitations including limitations as to the amount of the transaction. For more information about the services available through Shareholder Account Access, please visit FederatedInvestors.com and select “Sign In” and “Access and Manage Investments,” or call (800) 245-4770 to speak with a Client Service Representative.
BY SYSTEMATIC INVESTMENT PROGRAM (SIP)
Once you have opened an account, you may automatically purchase additional Shares on a regular basis by completing the SIP section of the New Account Form or by contacting the Fund or your financial intermediary. The minimum investment amount for SIPs is $50.
BY AUTOMATED CLEARING HOUSE (ACH)
Once you have opened an account, you may purchase additional Shares through a depository institution that is an ACH member. This purchase option can be established by completing the appropriate sections of the New Account Form.
How to Redeem and Exchange Shares
Class B Shares of the Fund may be exchanged for Class B Shares of any other Federated Hermes fund.
You should redeem or exchange Shares:
■  through a financial intermediary if you purchased Shares through a financial intermediary; or
■  directly from the Fund if you purchased Shares directly from the Fund.
Shares of the Fund may be redeemed for cash, or exchanged for shares of other Federated Hermes funds as described herein, on days on which the Fund computes its NAV. Redemption requests may be made by telephone or in writing.
Redemption proceeds normally are wired or mailed within one business day for each method of payment after receiving a timely request in proper form. Depending upon the method of payment, when shareholders receive redemption proceeds can differ. Payment may be delayed for up to seven days under certain circumstances (see “Limitations on Redemption Proceeds”).
For important account information, see the section “Security and Privacy Protection.”
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THROUGH A FINANCIAL INTERMEDIARY
Submit your redemption or exchange request to your financial intermediary by the end of regular trading on the NYSE (normally 4:00 p.m. Eastern time). The redemption amount you will receive is based upon the next calculated NAV after the Fund receives the order from your financial intermediary.
DIRECTLY FROM THE FUND
By Telephone
You may redeem or exchange Shares by simply calling the Fund at 1-800-341-7400.
If you call before the end of regular trading on the NYSE (normally 4:00 p.m. Eastern time), you will receive a redemption amount based on that day's NAV.
By Mail
You may redeem or exchange Shares by sending a written request to the Fund.
You will receive a redemption amount based on the next calculated NAV after the Fund receives your written request in proper form.
Send requests by mail to:
The Federated Funds
P.O. Box 219318
Kansas City, MO 64121-9318
Send requests by private courier or overnight delivery service to:
The Federated Funds
430 W 7th Street
Suite 219318
Kansas City, MO 64105-1407
All requests must include:
■  Fund name and Share class, account number and account registration;
■  amount to be redeemed or exchanged;
■  signatures of all shareholders exactly as registered; and
■  if exchanging, the Fund name and Share class, account number and account registration into which you are exchanging.
Call your financial intermediary or the Fund if you need special instructions.
Signature Guarantees
Signatures must be guaranteed by a financial institution which is a participant in a Medallion signature guarantee program if:
■  your redemption will be sent to an address other than the address of record;
■  your redemption will be sent to an address of record that was changed within the last 30 days;
■  a redemption is payable to someone other than the shareholder(s) of record; or
■  transferring into another fund with a different shareholder registration.
A Medallion signature guarantee is designed to protect your account from fraud. Obtain a Medallion signature guarantee from a bank or trust company, savings association, credit union or broker, dealer or securities exchange member. A notary public cannot provide a signature guarantee.
By Online Account Services
You may access your accounts online to redeem or exchange shares through FederatedInvestors.com's Shareholder Account Access system once you have registered for access. Online transactions may be subject to certain limitations including limitations as to the amount of the transaction. For more information about the services available through Shareholder Account Access, please visit FederatedInvestors.com and select “Sign In” and “Access and Manage Investments,” or call (800) 245-4770 to speak with a Client Service Representative.
PAYMENT METHODS FOR REDEMPTIONS
Your redemption proceeds will be mailed by check to your address of record. The following payment options are available if you complete the appropriate section of the New Account Form or an Account Service Options Form. These payment options require a signature guarantee if they were not established when the account was opened:
■  An electronic transfer to your account at a financial institution that is an ACH member; or
■  Wire payment to your account at a domestic commercial bank that is a Federal Reserve System member.
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Methods the Fund May Use to Meet Redemption Requests
The Fund intends to pay Share redemptions in cash. To ensure that the Fund has cash to meet Share redemptions on any day, the Fund typically expects to hold a cash or cash equivalent reserve or sell portfolio securities.
In unusual or stressed circumstances, the Fund may generate cash in the following ways:
■  Inter-fund Borrowing and Lending. The SEC has granted an exemption that permits the Fund and all other funds advised by subsidiaries of Federated Hermes (“Federated Hermes funds”) to lend and borrow money for certain temporary purposes directly to and from other Federated Hermes funds. Inter-fund borrowing and lending is permitted only: (a) to meet shareholder redemption requests; (b) to meet commitments arising from “failed” trades; and (c) for other temporary purposes. All inter-fund loans must be repaid in seven days or less.
■  Committed Line of Credit. The Fund participates with certain other Federated Hermes funds, on a joint basis, in an up to $500,000,000 unsecured, 364-day, committed, revolving line of credit (LOC) agreement. The LOC was made available to finance temporarily the repurchase or redemption of shares of the funds, failed trades, payment of dividends, settlement of trades and for other short-term, temporary or emergency general business purposes. The Fund cannot borrow under the LOC if an inter-fund loan is outstanding.
■  Redemption in Kind. Although the Fund intends to pay Share redemptions in cash, it reserves the right to pay the redemption price in whole or in part by an “in-kind” distribution of the Fund's portfolio securities. Because the Fund has elected to be governed by Rule 18f-1 under the 1940 Act, the Fund is obligated to pay Share redemptions to any one shareholder in cash only up to the lesser of $250,000 or 1% of the net assets represented by such Share class during any 90-day period. Redemptions in kind are made consistent with the procedures adopted by the Fund's Board, which generally include distributions of a pro rata share of the Fund's portfolio assets. Redemption in kind is not as liquid as a cash redemption. If redemption is made in kind, securities received may be subject to market risk and the shareholder could incur taxable gains and brokerage or other charges in converting the securities to cash.
LIMITATIONS ON REDEMPTION PROCEEDS
Redemption proceeds normally are wired or mailed within one business day after receiving a request in proper form. Payment may be delayed for up to seven days:
■  to allow your purchase to clear (as discussed below);
■  during periods of market volatility;
■  when a shareholder's trade activity or amount adversely impacts the Fund's ability to manage its assets; or
■  during any period when the Federal Reserve wire or applicable Federal Reserve banks are closed, other than customary weekend and holiday closings.
If you request a redemption of Shares recently purchased by check (including a cashier's check or certified check), money order, bank draft or ACH, your redemption proceeds may not be made available for up to seven calendar days to allow the Fund to collect payment on the instrument used to purchase such Shares. If the purchase instrument does not clear, your purchase order will be canceled and you will be responsible for any losses incurred by the Fund as a result of your canceled order.
In addition, the right of redemption may be suspended, or the payment of proceeds may be delayed (including beyond seven days), during any period:
■  when the NYSE is closed, other than customary weekend and holiday closings;
■  when trading on the NYSE is restricted, as determined by the SEC;
■  in which an emergency exists, as determined by the SEC, so that disposal of the Fund's investments or determination of its NAV is not reasonably practicable; or
■  as the SEC may by order permit for the protection of Fund shareholders.
You will not accrue interest or dividends on uncashed redemption checks from the Fund when checks are undeliverable and returned to the Fund.
EXCHANGE PRIVILEGE
You may exchange Shares of the Fund. To do this, you must:
■  meet any applicable shareholder eligibility requirements;
■  ensure that the account registrations are identical;
■  meet any applicable minimum initial investment requirements; and
■  receive a prospectus for the fund into which you wish to exchange.
An exchange is treated as a redemption and a subsequent purchase, and is a taxable transaction. The Fund reserves the right to reject any request to purchase or exchange Shares. The Fund may modify or terminate the exchange privilege at any time.
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In addition, the Fund may terminate your exchange privilege if your exchange activity is found to be excessive under the Fund's frequent trading policies. See “Account and Share Information–Frequent Trading Policies.”
Financial intermediaries may have different policies and procedures regarding the availability of intra-fund exchanges (“automatic exchanges”). These exchanges which are directed by the financial intermediary and not the Fund are discussed in Appendix B to this Prospectus.
A, B, C & F Classes
You may exchange Shares into shares of the same class of another Federated Hermes fund.
IS Class
You may exchange Shares of the Fund for shares of any Federated Hermes fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares of Federated Institutional Money Market Management, Federated Institutional Tax-Free Cash Trust, Federated Institutional Prime Obligations Fund, Federated Institutional Prime Value Obligations Fund, no-load Class A Shares and Class R Shares of any Fund.
Systematic Withdrawal/Exchange Program
You may automatically redeem or exchange Shares. The minimum amount for all new or revised systematic redemptions or exchanges of Shares is $50 per transaction per fund. Complete the appropriate section of the New Account Form or an Account Service Options Form or contact your financial intermediary or the Fund. Your account value must meet the minimum initial investment amount at the time the program is established. This program may reduce, and eventually deplete, your account. Payments should not be considered yield or income.
Generally, it is not advisable to continue to purchase Shares subject to a sales charge while redeeming Shares using this program.
Systematic Withdrawal Program (SWP) on B Class
You will not be charged a CDSC on SWP redemptions if:
■  you redeem 12% or less of your account value in a single year;
■  you reinvest all dividends and capital gains distributions;
■  your account has at least a $10,000 balance when you establish the SWP (You cannot aggregate multiple B class accounts to meet this minimum balance.); and
■  for all B class accounts established on or after August 2, 2010, the minimum SWP redemption amount is $50 per transaction, per fund, including transactions that qualify for a CDSC waiver as outlined in this Prospectus.
You will be subject to a CDSC on redemption amounts that exceed the 12% annual limit. In measuring the redemption percentage, your account is valued when you establish the SWP and then annually at calendar year-end. You can redeem monthly, quarterly or semi-annually.
ADDITIONAL CONDITIONS
Telephone Transactions
The Fund will record your telephone instructions. If the Fund does not follow reasonable procedures, it may be liable for losses due to unauthorized or fraudulent telephone instructions.
Share Certificates
The Fund no longer issues share certificates. If you are redeeming or exchanging Shares represented by certificates previously issued by the Fund, you must return the certificates with your written redemption or exchange request. For your protection, send your certificates by registered or certified mail, but do not endorse them.
Security and Privacy Protection
ONLINE ACCOUNT and TELEPHONE ACCESS SECURITY
Federated Hermes will not be responsible for losses that result from unauthorized transactions, unless Federated Hermes does not follow procedures designed to verify your identity. When initiating a transaction by telephone or online, shareholders should be aware that any person with access to your account and other personal information including PINs (Personal Identification Numbers) may be able to submit instructions by telephone or online. Shareholders are responsible for protecting their identity by using strong usernames and complex passwords which utilize combinations of mixed case letters, numbers and symbols, and change passwords and PINs frequently.
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Using FederatedInvestors.com's Account Access website means you are consenting to sending and receiving personal financial information over the Internet, so you should be sure you are comfortable with the risks. You will be required to accept the terms of an online agreement and to establish and utilize a password in order to access online account services. The Transfer Agent has adopted security procedures to confirm that internet instructions are genuine. The Transfer Agent will also send you written confirmation of share transactions. The Transfer Agent, the Fund and any of its affiliates will not be liable for losses or expenses that occur from fraudulent Internet instructions reasonably believed to be genuine.
The Transfer Agent or the Fund will employ reasonable procedures to confirm that telephone transaction requests are genuine, which may include recording calls, asking the caller to provide certain personal identification information, sending you written confirmation, or requiring other confirmation security procedures. The Transfer Agent, the Fund and any of its affiliates will not be liable for relying on instructions submitted by telephone that the Fund reasonably believes to be genuine.
ANTI-MONEY LAUNDERING COMPLIANCE
To help the government fight the funding of terrorism and money laundering activities, federal law requires financial institutions to obtain, verify, and record information that identifies each new customer who opens a Fund account and to determine whether such person's name appears on governmental lists of known or suspected terrorists or terrorist organizations. Pursuant to the requirements under the USA PATRIOT Act, the information obtained will be used for compliance with the USA PATRIOT Act or other applicable laws, regulations and rules in connection with money laundering, terrorism or other illicit activities.
Information required includes your name, residential or business address, date of birth (for an individual), and other information that identifies you, including your social security number, tax identification number or other identifying number. The Fund cannot waive these requirements. The Fund is required by law to reject your Account Application if the required information is not provided. If, after reasonable effort, the Fund is unable to verify your identity or that of any other person(s) authorized to act on your behalf, or believes it has identified potentially suspicious, fraudulent or criminal activity, the Fund reserves the right to close your account and redeem your shares at the next calculated NAV without your permission. Any applicable contingent deferred sales charge (CDSC) will be assessed upon redemption of your shares.
The Fund has a strict policy designed to protect the privacy of your personal information. A copy of Federated Hermes' privacy policy notice was given to you at the time you opened your account. The Fund sends a copy of the privacy notice to you annually. You may also obtain the privacy notice by calling the Fund, or through FederatedInvestors.com.
Account and Share Information
CONFIRMATIONS AND ACCOUNT STATEMENTS
You will receive confirmation of purchases, redemptions and exchanges (except for systematic transactions). In addition, you will receive periodic statements reporting all account activity, including systematic transactions, dividends and capital gains paid.
DIVIDENDS AND CAPITAL GAINS
The Fund declares any dividends daily and pays them monthly to shareholders. If you purchase Shares by wire, you begin earning dividends on the day your wire is received. If you purchase Shares by check, you begin earning dividends on the business day after the Fund receives your check. In either case, you earn dividends through the day your redemption request is received.
In addition, the Fund pays any capital gains at least annually, and may make such special distributions of dividends and capital gains as may be necessary to meet applicable regulatory requirements. Your dividends and capital gains distributions will be automatically reinvested in additional Shares without a sales charge, unless you elect cash payments. Dividends may also be reinvested without sales charges in shares of any class of any other Federated Hermes fund of which you are already a shareholder.
If you purchase Shares just before the record date for a capital gain distribution, you will pay the full price for the Shares and then receive a portion of the price back in the form of a taxable distribution, whether or not you reinvest the distribution in Shares. Therefore, you should consider the tax implications of purchasing Shares shortly before the record date for a capital gain. Contact your financial intermediary or the Fund for information concerning when dividends and capital gains will be paid.
Under the federal securities laws, the Fund is required to provide a notice to shareholders regarding the source of distributions made by the Fund if such distributions are from sources other than ordinary investment income. In addition, important information regarding the Fund's distributions, if applicable, is available via the link to the Fund and share class name at FederatedInvestors.com/FundInformation.
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Small Distributions and Uncashed Checks
Generally, dividend and/or capital gain distributions payable by check in an amount of less than $25 will be automatically reinvested in additional shares. This policy does not apply if you have elected to receive cash distributions that are directly deposited into your bank account via wire or ACH.
Additionally, if one or more dividend or capital gain distribution checks are returned as “undeliverable,” or remain uncashed for 180 days, all subsequent dividend and capital gain distributions will be reinvested in additional shares. No interest will accrue on amounts represented by uncashed distribution checks. For questions on whether reinvestment applies to your distributions, please contact a Client Service Representative at 1-800-341-7400.
Certain states, including the state of Texas, have laws that allow shareholders to designate a representative to receive abandoned or unclaimed property (“escheatment”) notifications by completing and submitting a designation form that generally can be found on the official state website. If a shareholder resides in an applicable state, and elects to designate a representative to receive escheatment notifications, escheatment notices generally will be delivered as required by such state laws, including, as applicable, to both the shareholder and the designated representative. A completed designation form may be mailed to the Fund (if Shares are held directly with the Fund) or to the shareholder's financial intermediary (if Shares are not held directly with the Fund). Shareholders should refer to relevant state law for the shareholder's specific rights and responsibilities under his or her state's escheatment law(s), which can generally be found on a state's official website.
ACCOUNTS WITH LOW BALANCES
Federated Hermes reserves the right to close accounts if redemptions or exchanges cause the account balance to fall below:
■  $1,500 for the A, B, C and F classes (or in the case of IRAs, $250); and
■  $25,000 for the IS class.
Before an account is closed, you will be notified and allowed at least 30 days to purchase additional Shares to meet the minimum.
TAX INFORMATION
The Fund sends an IRS Form 1099 and an annual statement of your account activity to assist you in completing your federal, state and local tax returns. It is anticipated that Fund distributions will be primarily dividends that are exempt from federal regular income tax, although a portion of the Fund's dividends may not be exempt. Income from the Fund also may be subject to AMT. Dividends may be subject to state and local taxes. In addition, the Fund may realize and distribute capital gains from time to time as a result of the Fund's normal investment activities. Distributions of net short-term capital gains are taxable to you as ordinary income. Distributions of net long-term capital gains are taxable to you as long-term capital gains regardless of how long you have owned your Shares. The Fund may invest a portion of its assets in securities that generate income that is not exempt from federal or state income tax. Capital gains and non-exempt dividends are taxable whether paid in cash or reinvested in the Fund. Redemptions are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.
FREQUENT TRADING POLICIES
Frequent or short-term trading into and out of the Fund can have adverse consequences for the Fund and shareholders who use the Fund as a long-term investment vehicle. Such trading in significant amounts can disrupt the Fund's investment strategies (e.g., by requiring it to sell investments at inopportune times or maintain excessive short-term or cash positions to support redemptions), increase brokerage and administrative costs and affect the timing and amount of taxable gains distributed by the Fund. Investors engaged in such trading may also seek to profit by anticipating changes in the Fund's NAV in advance of the time as of which NAV is calculated.
The Fund's Board has approved policies and procedures intended to discourage excessive frequent or short-term trading of the Fund's Shares. The Fund monitors trading in Fund Shares in an effort to identify disruptive trading activity. The Fund monitors trades into and out of the Fund within a period of 30 days or less. The Fund may also monitor trades into and out of the Fund for potentially disruptive trading activity over periods longer than 30 days. The size of Share transactions subject to monitoring varies. Where it is determined that a shareholder has exceeded the detection amounts twice within a period of 12 months, the Fund will temporarily prohibit the shareholder from making further purchases or exchanges of Fund Shares. If the shareholder continues to exceed the detection amounts for specified periods the Fund will impose lengthier trading restrictions on the shareholder, up to and including permanently prohibiting the shareholder from making any further purchases or exchanges of Fund Shares. Whether or not the specific monitoring limits are exceeded, the Fund's management or the Adviser may determine from the amount, frequency or pattern of purchases and redemptions or
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exchanges that a shareholder is engaged in excessive trading that is or could be detrimental to the Fund and other shareholders and may prohibit the shareholder from making further purchases or exchanges of Fund Shares. No matter how the Fund defines its limits on frequent trading of Fund Shares, other purchases and sales of Fund Shares may have adverse effects on the management of the Fund's portfolio and its performance.
The Fund's frequent trading restrictions do not apply to purchases and sales of Fund Shares by other Federated Hermes funds. These funds impose the same frequent trading restrictions as the Fund at their shareholder level. In addition, allocation changes of the investing Federated Hermes fund are monitored, and the managers of the recipient fund must determine that there is no disruption to their management activity. The intent of this exception is to allow investing fund managers to accommodate cash flows and other activity that result from non-abusive trading in the investing fund, without being stopped from such trading because the aggregate of such trades exceeds the monitoring limits. Nonetheless, as with any trading in Fund Shares, purchases and redemptions of Fund Shares by other Federated Hermes funds could adversely affect the management of the Fund's portfolio and its performance.
The Fund will not restrict transactions made on a non-discretionary basis by certain asset allocation programs, wrap programs, fund of funds, collective funds or other similar accounts that have been pre-approved by Federated Hermes (“Approved Accounts”). The Fund will continue to monitor transactions by the Approved Accounts and will seek to limit or restrict even non-discretionary transactions by Approved Accounts that are determined to be disruptive or harmful to the Fund.
The Fund's objective is that its restrictions on short-term trading should apply to all shareholders that are subject to the restrictions, regardless of the number or type of accounts in which Shares are held. However, the Fund anticipates that limitations on its ability to identify trading activity to specific shareholders, including where Shares are held through intermediaries in multiple or omnibus accounts, will mean that these restrictions may not be able to be applied uniformly in all cases.
Other funds in the Federated Hermes family of funds may impose different monitoring policies or in some cases, may not monitor for frequent or short-term trading. Under normal market conditions such monitoring policies are designed to protect the funds being monitored and their shareholders and the operation of such policies and shareholder investments under such monitoring are not expected to have materially adverse impact on the Federated Hermes funds or their shareholders. If you plan to exchange your Fund Shares for shares of another Federated Hermes fund, please read the prospectus of that other Federated Hermes fund for more information.
PORTFOLIO HOLDINGS INFORMATION
Information concerning the Fund's portfolio holdings is available via the link to the Fund and share class name at FederatedInvestors.com/FundInformation. A complete listing of the Fund's portfolio holdings as of the end of each calendar quarter is posted on the website 30 days (or the next business day) after the end of the quarter and remains posted for six months thereafter. Summary portfolio composition information as of the close of each month is posted on the website 15 days (or the next business day) after month-end and remains posted until replaced by the information for the succeeding month. The summary portfolio composition information may include identification of the Fund's top 10 holdings, portfolio profile statistics (such as weighted average effective maturity and weighted average effective duration) and a percentage breakdown of the portfolio by credit quality and sector.
You may also access portfolio information as of the end of the Fund's fiscal quarters via the link to the Fund and share class name at FederatedInvestors.com. The Fund's Annual and Semi-Annual Shareholder Reports contain complete listings of the Fund's portfolio holdings as of the end of the Fund's second and fourth fiscal quarters. Fiscal quarter information is made available on the website within 70 days after the end of the fiscal quarter. This information is also available in reports filed with the SEC at the SEC's website at sec.gov.
Each fiscal quarter, the Fund will file with the SEC a complete schedule of its monthly portfolio holdings on “Form N-PORT.” The Fund's holdings as of the end of the third month of every fiscal quarter, as reported on Form N-PORT, will be publicly available on the SEC's website at sec.gov within 60 days of the end of the fiscal quarter upon filing. You may also access this information via the link to the Fund and share class name at FederatedInvestors.com.
In addition, from time to time (for example, during periods of unusual market conditions), additional information regarding the Fund's portfolio holdings and/or composition may be posted to FederatedInvestors.com. If and when such information is posted, its availability will be noted on, and the information will be accessible from, the home page of the website.
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Who Manages the Fund?
The Board governs the Fund. The Board selects and oversees the Adviser, Federated Investment Management Company. The Adviser manages the Fund's assets, including buying and selling portfolio securities. Federated Advisory Services Company (FASC), an affiliate of the Adviser, provides certain support services to the Adviser. The fee for these services is paid by the Adviser and not by the Fund. The address of the Adviser and FASC is 1001 Liberty Avenue, Pittsburgh, PA 15222-3779.
The Adviser and other subsidiaries of Federated Hermes advise approximately 135 equity, fixed-income and money market mutual funds as well as a variety of other pooled investment vehicles, private investment companies and customized separately managed accounts (including non-U.S./offshore funds) which totaled approximately $575.9 billion in assets as of December 31, 2019. Federated Hermes was established in 1955 as Federated Investors, Inc. and is one of the largest investment managers in the United States with nearly 1,900 employees. Federated Hermes provides investment products to approximately 11,500 investment professionals and institutions.
The Adviser advises approximately 75 fixed-income and money market mutual funds (including sub-advised funds) and private investment companies, which totaled approximately $344.3 billion in assets as of December 31, 2019.
PORTFOLIO MANAGEMENT INFORMATION
J. Scott Albrecht
J. Scott Albrecht, CFA, Senior Portfolio Manager, has been the Fund's portfolio manager since May of 1996.
Mr. Albrecht is a Senior Portfolio Manager and is responsible for day to day management of the Fund focusing on asset allocation, interest rate strategy and security selection. He has been with the Adviser or an affiliate since 1989; has worked in investment management since 1989; has managed investment portfolios since 1995. Education: B.S., Indiana University of Pennsylvania; M.S., Carnegie Mellon University.
R.J. Gallo
R.J. Gallo, CFA, Senior Portfolio Manager, has been the Fund's portfolio manager since July of 2017.
Mr. Gallo is a Senior Portfolio Manager, Head of the Municipal Bond Investment Group and Chairman of Duration Management Committee. He is responsible for overseeing the macro risk elements in the portfolio. He has been with the Adviser or an affiliate since 2000; has worked in investment management since 1996; has managed investment portfolios since 2002. Education: B.A., University of Michigan; M.P.A Princeton University.
The Fund's SAI provides additional information about the Portfolio Manager's compensation, management of other accounts, and ownership of securities in the Fund.
ADVISORY FEES
The Fund's investment advisory contract provides for payment to the Adviser of an annual investment advisory fee of 0.30% of the Fund's average daily net assets, plus 4.50% of the Fund's gross income. The Adviser may voluntarily waive a portion of its fee or reimburse the Fund for certain operating expenses. The Adviser and its affiliates have also agreed to certain “Fee Limits” as described in the footnote to the “Risk/Return Summary: Fees and Expenses” table found in the “Fund Summary” section of the Prospectus.
A discussion of the Board's review of the Fund's investment advisory contract is available in the Fund's annual and semi-annual shareholder reports for the periods ended March 31 and September 30, respectively.
Financial Information
FINANCIAL HIGHLIGHTS
The Financial Highlights will help you understand the Fund's financial performance for its past five fiscal years or since inception if the life of the Share class is shorter. Some of the information is presented on a per Share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.
This information has been audited by Ernst & Young LLP, an independent registered public accounting firm, whose report, along with the Fund's audited financial statements, is included in the Annual Report.
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Financial Highlights–Class A Shares
(For a Share Outstanding Throughout Each Period)
Year Ended March 31 2020 2019 2018 2017 2016
Net Asset Value, Beginning of Period $10.45 $10.35 $10.38 $10.68 $10.66
Income From Investment Operations:          
Net investment income1 0.27 0.29 0.30 0.33 0.33
Net realized and unrealized gain (loss) 0.07 0.15 (0.03) (0.31) 0.01
TOTAL FROM INVESTMENT OPERATIONS 0.34 0.44 0.27 0.02 0.34
Less Distributions:          
Distributions from net investment income (0.27) (0.29) (0.30) (0.32) (0.32)
Distributions from net realized gain (0.06) (0.05) — — —
TOTAL DISTRIBUTIONS (0.33) (0.34) (0.30) (0.32) (0.32)
Net Asset Value, End of Period $10.46 $10.45 $10.35 $10.38 $10.68
Total Return2 3.22% 4.38% 2.62% 0.13% 3.31%
Ratios to Average Net Assets:          
Net expenses 0.83%3 0.84%3 0.85% 0.87% 0.87%
Net investment income 2.52% 2.84% 2.87% 3.06% 3.10%
Expense waiver/reimbursement4 0.11% 0.12% 0.10% 0.07% 0.07%
Supplemental Data:          
Net assets, end of period (000 omitted) $264,084 $276,117 $302,904 $304,271 $331,876
Portfolio turnover 9% 21% 26% 14% 25%
1 Per share number has been calculated using the average shares method.
2 Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable.
3 The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratios are 0.83% and 0.84% for the years ended March 30, 2020 and 2019, respectively, after taking into account these expense reductions.
4 This expense decrease is reflected in both the net expense and net investment income ratios shown above.
Further information about the Fund's performance is contained in the Fund's Annual Report, dated March 31, 2020, which can be obtained free of charge.
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Financial Highlights–Class B Shares
(For a Share Outstanding Throughout Each Period)
Year Ended March 31 2020 2019 2018 2017 2016
Net Asset Value, Beginning of Period $10.46 $10.36 $10.38 $10.69 $10.66
Income From Investment Operations:          
Net investment income1 0.19 0.21 0.22 0.24 0.24
Net realized and unrealized gain (loss) 0.07 0.15 (0.02) (0.32) 0.03
TOTAL FROM INVESTMENT OPERATIONS 0.26 0.36 0.20 (0.08) 0.27
Less Distributions:          
Distributions from net investment income (0.19) (0.21) (0.22) (0.23) (0.24)
Distributions from net realized gain (0.06) (0.05) — — —
TOTAL DISTRIBUTIONS (0.25) (0.26) (0.22) (0.23) (0.24)
Net Asset Value, End of Period $10.47 $10.46 $10.36 $10.38 $10.69
Total Return2 2.45% 3.61% 1.92% (0.80)% 2.54%
Ratios to Average Net Assets:          
Net expenses 1.58%3 1.59%3 1.62% 1.68% 1.69%
Net investment income 1.78% 2.09% 2.09% 2.25% 2.28%
Expense waiver/reimbursement4 0.11% 0.12% 0.08% 0.01% 0.00%5
Supplemental Data:          
Net assets, end of period (000 omitted) $2,302 $3,499 $4,599 $4,061 $5,732
Portfolio turnover 9% 21% 26% 14% 25%
1 Per share number has been calculated using the average shares method.
2 Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable.
3 The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratios are 1.58% and 1.59% for the years ended March 30, 2020 and 2019, respectively, after taking into account these expense reductions.
4 This expense decrease is reflected in both the net expense and net investment income ratios shown above.
5 Represents less than 0.01%.
Further information about the Fund's performance is contained in the Fund's Annual Report, dated March 31, 2020, which can be obtained free of charge.
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Financial Highlights–Class C Shares
(For a Share Outstanding Throughout Each Period)
Year Ended March 31 2020 2019 2018 2017 2016
Net Asset Value, Beginning of Period $10.46 $10.35 $10.39 $10.69 $10.66
Income From Investment Operations:          
Net investment income1 0.19 0.21 0.22 0.24 0.24
Net realized and unrealized gain (loss) 0.07 0.16 (0.04) (0.31) 0.03
TOTAL FROM INVESTMENT OPERATIONS 0.26 0.37 0.18 (0.07) 0.27
Less Distributions:          
Distributions from net investment income (0.19) (0.21) (0.22) (0.23) (0.24)
Distributions from net realized gain (0.06) (0.05) — — —
TOTAL DISTRIBUTIONS (0.25) (0.26) (0.22) (0.23) (0.24)
Net Asset Value, End of Period $10.47 $10.46 $10.35 $10.39 $10.69
Total Return2 2.45% 3.71% 1.73% (0.71)% 2.54%
Ratios to Average Net Assets:          
Net expenses 1.58%3 1.59%3 1.62% 1.68% 1.69%
Net investment income 1.77% 2.09% 2.09% 2.25% 2.28%
Expense waiver/reimbursement4 0.11% 0.12% 0.08% 0.01% 0.00%5
Supplemental Data:          
Net assets, end of period (000 omitted) $8,039 $8,675 $14,188 $17,548 $20,372
Portfolio turnover 9% 21% 26% 14% 25%
1 Per share number has been calculated using the average shares method.
2 Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable.
3 The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratios are 1.58% and 1.59% for the years ended March 30, 2020 and 2019, respectively, after taking into account these expense reductions.
4 This expense decrease is reflected in both the net expense and net investment income ratios shown above.
5 Represents less than 0.01%.
Further information about the Fund's performance is contained in the Fund's Annual Report, dated March 31, 2020, which can be obtained free of charge.
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Financial Highlights–Class F Shares
(For a Share Outstanding Throughout Each Period)
Year Ended March 31 2020 2019 2018 2017 2016
Net Asset Value, Beginning of Period $10.45 $10.34 $10.37 $10.68 $10.66
Income From Investment Operations:          
Net investment income1 0.27 0.29 0.30 0.32 0.33
Net realized and unrealized gain (loss) 0.06 0.16 (0.03) (0.31) 0.01
TOTAL FROM INVESTMENT OPERATIONS 0.33 0.45 0.27 0.01 0.34
Less Distributions:          
Distributions from net investment income (0.27) (0.29) (0.30) (0.32) (0.32)
Distributions from net realized gain (0.06) (0.05) — — —
TOTAL DISTRIBUTIONS (0.33) (0.34) (0.30) (0.32) (0.32)
Net Asset Value, End of Period $10.45 $10.45 $10.34 $10.37 $10.68
Total Return2 3.12% 4.49% 2.62% 0.03% 3.31%
Ratios to Average Net Assets:          
Net expenses 0.83%3 0.84%3 0.85% 0.87% 0.87%
Net investment income 2.52% 2.84% 2.87% 3.06% 3.09%
Expense waiver/reimbursement4 0.11% 0.12% 0.10% 0.07% 0.07%
Supplemental Data:          
Net assets, end of period (000 omitted) $29,037 $26,586 $27,081 $27,604 $24,558
Portfolio turnover 9% 21% 26% 14% 25%
1 Per share number has been calculated using the average shares method.
2 Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable.
3 The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratios are 0.83% and 0.84% for the years ended March 31, 2020 and 2019, respectively, after taking into account these expense reductions.
4 This expense decrease is reflected in both the net expense and net investment income ratios shown above.
Further information about the Fund's performance is contained in the Fund's Annual Report, dated March 31, 2020, which can be obtained free of charge.
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Financial Highlights–Institutional Shares
(For a Share Outstanding Throughout Each Period)
Year Ended March 31 2020 2019 Period
Ended
3/31/20181
Net Asset Value, Beginning of Period $10.44 $10.34 $10.52
Income From Investment Operations:      
Net investment income2 0.29 0.32 0.22
Net realized and unrealized gain (loss) 0.05 0.15 (0.21)
TOTAL FROM INVESTMENT OPERATIONS 0.34 0.47 0.01
Less Distributions:      
Distributions from net investment income (0.30) (0.32) (0.19)
Distributions from net realized gain (0.06) (0.05) —
TOTAL DISTRIBUTIONS (0.36) (0.37) (0.19)
Net Asset Value, End of Period $10.42 $10.44 $10.34
Total Return3 3.18% 4.65% 0.10%
Ratios to Average Net Assets:      
Net expenses 0.58%4 0.59%4 0.59%5
Net investment income 2.75% 3.09% 3.10%5
Expense waiver/reimbursement6 0.11% 0.12% 0.12%5
Supplemental Data:      
Net assets, end of period (000 omitted) $13,182 $8,388 $2,150
Portfolio turnover 9% 21% 26%7
1 Reflects operations for the period July 27, 2017 (date of initial investment) to March 31, 2018.
2 Per share number has been calculated using the average shares method.
3 Based on net asset value. Total returns for periods of less than one year are not annualized.
4 The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratios are 0.58% and 0.59% for the years ended March 30, 2020 and 2019, respectively, after taking into account these expense reductions.
5 Computed on an annualized basis.
6 This expense decrease is reflected in both the net expense and net investment income ratios shown above.
7 Portfolio turnover is calculated at the Fund level. Percentage indicated was calculated for the year ended March 31, 2018.
Further information about the Fund's performance is contained in the Fund's Annual Report, dated March 31, 2020, which can be obtained free of charge.
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Appendix A: Hypothetical Investment and Expense Information
The following charts provide additional hypothetical information about the effect of the Fund's expenses, including investment advisory fees and other Fund costs, on the Fund's assumed returns over a 10-year period. Each chart shows the estimated expenses that would be incurred in respect of a hypothetical investment of $10,000, assuming a 5% return each year, and no redemption of Shares. Each chart also assumes that the Fund's annual expense ratio stays the same throughout the 10-year period (except for the impact of changes in contractual expense limitations and the B class, which converts to the A class after you have held them for eight years) and that all dividends and distributions are reinvested. The annual expense ratios used in each chart are the same as stated in the “Fees and Expenses” table of this Prospectus (and thus may not reflect any fee waiver or expense reimbursement currently in effect). The maximum amount of any sales charge that might be imposed on the purchase of Shares (and deducted from the hypothetical initial investment of $10,000; the “Front-End Sales Charge”) is reflected in the “Hypothetical Expenses” column. The hypothetical investment information does not reflect the effect of charges (if any) normally applicable to redemptions of Shares (e.g., deferred sales charges, redemption fees). Mutual fund returns, as well as fees and expenses, may fluctuate over time, and your actual investment returns and total expenses may be higher or lower than those shown below.
FEDERATED MUNICIPAL BOND FUND, INC. - A CLASS
ANNUAL EXPENSE RATIO: 0.95%
MAXIMUM FRONT-END SALES CHARGE: 4.50%
Year Hypothetical
Beginning
Investment 		Hypothetical
Performance
Earnings 		Investment
After
Returns 		Hypothetical
Expenses 		Hypothetical
Ending
Investment
1 $10,000.00 $477.50 $10,027.50 $542.56 $9,936.78
2 $9,936.78 $496.84 $10,433.62 $96.31 $10,339.22
3 $10,339.22 $516.96 $10,856.18 $100.21 $10,757.96
4 $10,757.96 $537.90 $11,295.86 $104.27 $11,193.66
5 $11,193.66 $559.68 $11,753.34 $108.49 $11,647.00
6 $11,647.00 $582.35 $12,229.35 $112.89 $12,118.70
7 $12,118.70 $605.94 $12,724.64 $117.46 $12,609.51
8 $12,609.51 $630.48 $13,239.99 $122.22 $13,120.20
9 $13,120.20 $656.01 $13,776.21 $127.17 $13,651.57
10 $13,651.57 $682.58 $14,334.15 $132.32 $14,204.46
Cumulative   $5,746.24   $1,563.90  
    
FEDERATED MUNICIPAL BOND FUND, INC. - B CLASS
ANNUAL EXPENSE RATIO: 1.70%
MAXIMUM FRONT-END SALES CHARGE: NONE
Year Hypothetical
Beginning
Investment 		Hypothetical
Performance
Earnings 		Investment
After
Returns 		Hypothetical
Expenses 		Hypothetical
Ending
Investment
1 $10,000.00 $500.00 $10,500.00 $172.81 $10,330.00
2 $10,330.00 $516.50 $10,846.50 $178.51 $10,670.89
3 $10,670.89 $533.54 $11,204.43 $184.40 $11,023.03
4 $11,023.03 $551.15 $11,574.18 $190.48 $11,386.79
5 $11,386.79 $569.34 $11,956.13 $196.77 $11,762.55
6 $11,762.55 $588.13 $12,350.68 $203.26 $12,150.71
7 $12,150.71 $607.54 $12,758.25 $209.97 $12,551.68
8 $12,551.68 $627.58 $13,179.26 $216.90 $12,965.89
Converts from B to A Annual Expense Ratio: 0.95%
9 $12,965.89 $648.29 $13,614.18 $125.67 $13,491.01
10 $13,491.01 $674.55 $14,165.56 $130.76 $14,037.40
Cumulative   $5,816.62   $1,809.53  
    
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FEDERATED MUNICIPAL BOND FUND, INC. - C CLASS
ANNUAL EXPENSE RATIO: 1.70%
MAXIMUM FRONT-END SALES CHARGE: NONE
Year Hypothetical
Beginning
Investment 		Hypothetical
Performance
Earnings 		Investment
After
Returns 		Hypothetical
Expenses 		Hypothetical
Ending
Investment
1 $10,000.00 $500.00 $10,500.00 $172.81 $10,330.00
2 $10,330.00 $516.50 $10,846.50 $178.51 $10,670.89
3 $10,670.89 $533.54 $11,204.43 $184.40 $11,023.03
4 $11,023.03 $551.15 $11,574.18 $190.48 $11,386.79
5 $11,386.79 $569.34 $11,956.13 $196.77 $11,762.55
6 $11,762.55 $588.13 $12,350.68 $203.26 $12,150.71
7 $12,150.71 $607.54 $12,758.25 $209.97 $12,551.68
8 $12,551.68 $627.58 $13,179.26 $216.90 $12,965.89
9 $12,965.89 $648.29 $13,614.18 $224.06 $13,393.76
10 $13,393.76 $669.69 $14,063.45 $231.45 $13,835.75
Cumulative   $5,811.76   $2,008.61  
    
FEDERATED MUNICIPAL BOND FUND, INC. - F CLASS
ANNUAL EXPENSE RATIO: 0.95%
MAXIMUM FRONT-END SALES CHARGE: 1.00%
Year Hypothetical
Beginning
Investment 		Hypothetical
Performance
Earnings 		Investment
After
Returns 		Hypothetical
Expenses 		Hypothetical
Ending
Investment
1 $10,000.00 $495.00 $10,395.00 $195.95 $10,300.95
2 $10,300.95 $515.05 $10,816.00 $99.84 $10,718.14
3 $10,718.14 $535.91 $11,254.05 $103.88 $11,152.22
4 $11,152.22 $557.61 $11,709.83 $108.09 $11,603.88
5 $11,603.88 $580.19 $12,184.07 $112.47 $12,073.84
6 $12,073.84 $603.69 $12,677.53 $117.02 $12,562.83
7 $12,562.83 $628.14 $13,190.97 $121.76 $13,071.62
8 $13,071.62 $653.58 $13,725.20 $126.70 $13,601.02
9 $13,601.02 $680.05 $14,281.07 $131.83 $14,151.86
10 $14,151.86 $707.59 $14,859.45 $137.17 $14,725.01
Cumulative   $5,956.81   $1,254.71  
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FEDERATED MUNICIPAL BOND FUND - IS CLASS
ANNUAL EXPENSE RATIO: 0.70%
MAXIMUM FRONT-END SALES CHARGE: NONE
Year Hypothetical
Beginning
Investment 		Hypothetical
Performance
Earnings 		Investment
After
Returns 		Hypothetical
Expenses 		Hypothetical
Ending
Investment
1 $10,000.00 $500.00 $10,500.00 $71.51 $10,430.00
2 $10,430.00 $521.50 $10,951.50 $74.58 $10,878.49
3 $10,878.49 $543.92 $11,422.41 $77.79 $11,346.27
4 $11,346.27 $567.31 $11,913.58 $81.13 $11,834.16
5 $11,834.16 $591.71 $12,425.87 $84.62 $12,343.03
6 $12,343.03 $617.15 $12,960.18 $88.26 $12,873.78
7 $12,873.78 $643.69 $13,517.47 $92.05 $13,427.35
8 $13,427.35 $671.37 $14,098.72 $96.01 $14,004.73
9 $14,004.73 $700.24 $14,704.97 $100.14 $14,606.93
10 $14,606.93 $730.35 $15,337.28 $104.45 $15,235.03
Cumulative   $6,087.24   $870.54  
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Appendix B: Sales Charge Waivers and Exchange Features for Shareholders Purchasing Through Certain Financial Intermediaries
The term “fund family,” used herein, shall refer to the Federated Hermes mutual funds.
Ameriprise Financial
CLASS A SHARES FRONT-END SALES CHARGE WAIVERS AVAILABLE AT AMERIPRISE FINANCIAL:
The following information applies to Class A shares purchases if you have an account with or otherwise purchase Fund shares through Ameriprise Financial:
Effective April 30, 2018, shareholders purchasing Fund shares through an Ameriprise Financial platform or account will be eligible for the following front-end sales charge waivers and discounts, which may differ from those disclosed elsewhere in this Fund's prospectus:
■  Employer-sponsored retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans and defined benefit plans). For purposes of this provision, employer-sponsored retirement plans do not include SEP IRAs, Simple IRAs or SAR-SEPs.
■  Shares purchased through an Ameriprise Financial investment advisory program (if an Advisory or similar share class for such investment advisory program is not available).
■  Shares purchased by third party investment advisors on behalf of their advisory clients through Ameriprise Financial's platform (if an Advisory or similar share class for such investment advisory program is not available).
■  Shares purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing shares of the same Fund (but not any other fund within the same fund family).
■  Shares exchanged from Class C shares of the same fund in the month of or following the 10-year anniversary of the purchase date. To the extent that this prospectus elsewhere provides for a waiver with respect to such shares following a shorter holding period, that waiver will apply to exchanges following such shorter period. To the extent that this prospectus elsewhere provides for a waiver with respect to exchanges of Class C shares for load waived shares, that waiver will also apply to such exchanges.
■  Employees and registered representatives of Ameriprise Financial or its affiliates and their immediate family members.
■  Shares purchased by or through qualified accounts (including IRAs, Coverdell Education Savings Accounts, 401(k)s, 403(b) TSCAs subject to ERISA and defined benefit plans) that are held by a covered family member, defined as an Ameriprise financial advisor and/or the advisor's spouse, advisor's lineal ascendant (mother, father, grandmother, grandfather, great grandmother, great grandfather), advisor's lineal descendant (son, step-son, daughter, step-daughter, grandson, granddaughter, great grandson, great granddaughter) or any spouse of a covered family member who is a lineal descendant.
■  Shares purchased from the proceeds of redemptions within the same fund family, provided: (1) the repurchase occurs within 90 days following the redemption; (2) the redemption and purchase occur in the same account; and (3) redeemed shares were subject to a front-end or deferred sales load (i.e., Rights of Reinstatement).
EXCHANGE Feature of CLASS C SHARES AVAILABLE AT AMERIPRISE FINANCIAL:
Automatic Exchange of Class C shares. Class C shares will automatically exchange to Class A shares in the month of the 10-year anniversary of the purchase date.
45
Robert W. Baird & Co., Inc.
Effective June 15, 2020, shareholders purchasing fund shares through a Baird platform or account will only be eligible for the following sales charge waivers (front-end sales charge waivers and CDSC waivers) and discounts, which may differ from those disclosed elsewhere in this prospectus or the SAI.
Front-End Sales Charge Waivers on Investors A-shares Available at Baird
■  Shares purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing share of the same fund;
■  Share purchase by employees and registered representatives of Baird or its affiliate and their family members as designated by Baird;
■  Shares purchase from the proceeds of redemptions within the same fund family, provided: (1) the repurchase occurs within 90 days following the redemption; (2) the redemption and purchase occur in the same accounts; and (3) redeemed shares were subject to a front-end or deferred sales charge (known as rights of reinstatement);
■  Class C (i.e., level-load) shares that are no longer subject to a CDSC and are exchanged to Class A shares (or the appropriate share class) of the same fund pursuant to Baird's intra-fund share class policies and procedures;
■  Employer-sponsored retirement plans or charitable accounts in a transactional brokerage account at Baird, including 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans and defined benefit plans. For purposes of this provision, employer-sponsored retirement plans do not include SEP IRAs, Simple IRAs or SAR-SEPs.
CDSC Waivers on Investor A and C shares Available at Baird
■  Shares sold upon the death or disability of the shareholder;
■  Shares sold as part of a systematic withdrawal plan as described in the Fund's Prospectus;
■  Shares bought due to returns of excess contributions from an IRA Account;
■  Shares sold as part of a required minimum distribution for IRA and retirement accounts pursuant to the Internal Revenue Code;
■  Shares sold to pay Baird fees but only if the transaction is initiated by Baird;
■  Shares acquired through a right of reinstatement.
Front-End Sales Charge Discounts Available at Baird: Breakpoints and/or Rights of Accumulations
■  Breakpoints as described in this prospectus;
■  Rights of accumulations which entitles shareholders to breakpoint discounts will be automatically calculated based on the aggregated holding of fund family assets held by accounts within the purchaser's household at Baird. Eligible fund family assets not held at Baird may be included in the rights of accumulations calculation only if the shareholder notifies his or her financial advisor about such assets;
■  Letters of Intent (LOI) allow for breakpoint discounts based on anticipated purchases within a fund family through Baird, over a 13-month period of time.
EDWARD JONES
Effective on or after May 1, 2020, shareholders purchasing Fund shares on the Edward Jones commission and fee-based platforms are eligible only for the following sales charge waivers (front-end sales charge waivers and contingent deferred sales charge (CDSC), or back-end sales charge, waivers) and discounts, which may differ from those disclosed elsewhere in this Fund's prospectus or SAI. In all instances, it is the shareholder's responsibility to inform Edward Jones at the time of purchase of any relationship, holdings of fund family or other facts qualifying the purchaser for waivers or discounts. Edward Jones can ask for documentation of such circumstance.
Front-End Sales Load Waivers on Class A Shares Available at Edward Jones
Sales charges are waived for the following shareholders and in the following situations:
■  Associates of Edward Jones and its affiliates and their family members who are in the same pricing group (as determined by Edward Jones under its policies and procedures) as the associate. This waiver will continue for the remainder of the associate's life if the associate retires from Edward Jones in good-standing.
■  Shares purchased in an Edward Jones fee-based program.
■  Shares purchased through reinvestment of capital gains distributions and dividend reinvestment.
46
■  Shares purchased from the proceeds of redeemed shares of the same fund family so long as the following conditions are met: (1) the proceeds are from the sale of shares within 60 days of the purchase; and (2) the sale and purchase are made in the same share class and the same account or the purchase is made in an individual retirement account with proceeds from liquidations in a non-retirement account.
■  Shares exchanged into Class A shares from another share Class so long as the exchange is into the same fund and was initiated at the discretion of Edward Jones. Edward Jones is responsible for any remaining CDSC due to the fund company, if applicable. Any future purchases are subject to the applicable sales charge as disclosed in the prospectus.
■  Exchanges from Class C shares to Class A shares of the same fund, generally, in the 84th month following the anniversary of the purchase date or earlier at the discretion of Edward Jones. Edward Jones will be responsible for any remaining CDSC due to the fund company, if applicable.
CDSC Waivers on A, B and C Shares Available at Edward Jones
If the shareholder purchases shares that are subject to a CDSC and those shares are redeemed before the CDSC is expired, the shareholder will be responsible to pay the CDSC except in the following conditions:
■  Shares sold upon the death or disability of the shareholder.
■  Shares sold as part of a systematic withdrawal plan (limited to up to 10% per year of the account value).
■  Return of excess contributions from an Individual Retirement Account (IRA).
■  Shares sold as part of a required minimum distribution for IRA and retirement accounts if the redemption is taken in or after the year the shareholder reaches qualified age based on applicable IRS regulations.
■  Shares sold to pay Edward Jones fees or costs in such cases where the transaction is initiated by Edward Jones.
■  Shares exchanged in an Edward Jones fee-based program. Edward Jones is responsible for any remaining CDSC due to the fund company, if applicable.
■  Shares acquired through a right of reinstatement.
Front-End Load Discounts Available at Edward Jones:
Rights of Accumulation (ROA)
■  The applicable sales charge on a purchase of Class A shares is determined by taking into account all share classes (except any money market funds and retirement plan share classes) of the fund family held by the shareholder or in an account grouped by Edward Jones with other accounts for the purpose of providing certain pricing considerations (“pricing groups”). This includes all share classes held on the Edward Jones platform and/or held on another platform. The inclusion of eligible fund family assets in the rights of accumulation calculation is dependent on the shareholder notifying his or her financial advisor of such assets at the time of calculation.
■  ROA is determined by calculating the higher of cost or market value (current shares x NAV).
Letter of Intent (LOI)
■  Through a LOI, shareholders can receive the sales charge and breakpoint discounts for purchases shareholders intend to make over a 13-month period from the date Edward Jones receives the LOI. The LOI is determined by calculating the higher of cost or market value of qualifying holdings at LOI initiation in combination with the value that the shareholder intends to buy over a 13-month period to calculate the front-end sales charge and any breakpoint discounts. Each purchase the shareholder makes during that 13-month period will receive the sales charge and breakpoint discount that applies to the total amount. The inclusion of eligible fund family assets in the LOI calculation is dependent on the shareholder notifying his or her financial advisor of such assets at the time of calculation. Purchases made before the LOI is received by Edward Jones are not covered under the LOI and will not reduce the sales charge previously paid. Sales charges will be adjusted if LOI is not met.
Other Important Information
Minimum Purchase Amounts
1. $250 initial purchase minimum
2. $50 subsequent purchase minimum
47
Minimum Balances
3. Edward Jones has the right to redeem at its discretion fund holdings with a balance of $250 or less. The following are examples of accounts that are not included in this policy:
1. A fee-based account held on an Edward Jones platform
2. A 529 account held on an Edward Jones platform
3. An account with an active systematic investment plan or letter of intent (LOI)
Changing Share Classes
4. At any time it deems necessary, Edward Jones has the authority to exchange at NAV a shareholder's holdings in a fund to Class A shares.
Janney Montgomery Scott LLC
Effective May 1, 2020, if you purchase or redeem Fund shares through a Janney Montgomery Scott LLC (“Janney”) brokerage account, you will be eligible for the following load waivers (front-end sales charge waivers and contingent deferred sales charge (CDSC), or back-end sales charge, waivers) and discounts, which may differ from those disclosed elsewhere in this Fund's Prospectus or SAI.
Front-end sales charge waivers on Class A Shares available at Janney
■  Shares purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing shares of the same fund (but not any other fund within the fund family).
■  Shares purchased by employees and registered representatives of Janney or its affiliates and their family members as designated by Janney.
■  Shares purchased from the proceeds of redemptions within the same fund family, provided: (1) the repurchase occurs within ninety (90) days following the redemption; (2) the redemption and purchase occur in the same account; and (3) redeemed shares were subject to a front-end or deferred sales load (i.e., right of reinstatement).
■  Employer-sponsored retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans and defined benefit plans). For purposes of this provision, employer-sponsored retirement plans do not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh plans.
■  Shares acquired through a right of reinstatement.
■  Class C shares that are no longer subject to a contingent deferred sales charge and are exchanged to Class A shares (or the appropriate share class) of the same fund pursuant to Janney's intra-fund share class policies and procedures.
CDSC Waivers on Class A and C Shares available at Janney
■  Shares sold upon the death or disability of the shareholder.
■  Shares sold as part of a systematic withdrawal plan as described in the fund's Prospectus.
■  Shares purchased in connection with a return of excess contributions from an IRA account.
■  Shares sold as part of a required minimum distribution for IRA and retirement accounts if the redemption is taken in or after the year the shareholder reaches qualified age based on applicable IRS regulations.
■  Shares sold to pay Janney fees but only if the transaction is initiated by Janney.
■  Shares acquired through a right of reinstatement.
■  Shares exchanged into the same share class of a different Federated Hermes fund, if the shares were held for the applicable CDSC holding period (the holding period on the shares purchased in the exchange will include the holding period of the shares sold in the exchange).
Front-end sales charge discounts available at Janney: Breakpoints, Rights of Accumulation, and/or Letters of Intent
■  Breakpoints as described in the fund's Prospectus.
■  Rights of accumulation (“ROA”), which entitle shareholders to breakpoint discounts, will be automatically calculated based on the aggregated holding of fund family assets held by accounts within the purchaser's household at Janney. Eligible fund family assets not held at Janney may be included in the ROA calculation only if the shareholder notifies his or her financial advisor about such assets.
■  Letters of intent which allow for breakpoint discounts based on anticipated purchases within a fund family, over a 13-month time period. Eligible fund family assets not held at Janney may be included in the calculation of letters of intent only if the shareholder notifies his or her financial advisor about such assets.
48
Merrill Lynch
Shareholders purchasing Fund shares through a Merrill Lynch platform or account will be eligible only for the following load waivers (front-end sales charge waivers and contingent deferred, or back-end, sales charge waivers) and discounts, which may differ from those disclosed elsewhere in this Fund's prospectus or SAI.
Front-end Sales Load Waivers on Class A Shares available at Merrill Lynch
■  Employer-sponsored retirement, deferred compensation and employee benefit plans (including health savings accounts) and trusts used to fund those plans, provided that the shares are not held in a commission-based brokerage account and shares are held for the benefit of the plan;
■  Shares purchased by a 529 Plan (does not include 529 Plan units or 529-specific share classes or equivalents;
■  Shares purchased through a Merrill Lynch affiliated investment advisory program or exchanged due to the holdings moving from the program;
■  Shares exchanged due to the holdings moving from a Merrill Lynch affiliated investment advisory program to a Merrill Lynch brokerage (non-advisory) account pursuant to Merrill Lynch's policies relating to sales load discounts and waivers;
■  Shares purchased by third party investment advisors on behalf of their advisory clients through Merrill Lynch's platform;
■  Shares of funds purchased through the Merrill Edge Self-Directed platform (if applicable);
■  Shares purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing shares of the same fund (but not any other fund within the fund family);
■  Shares exchanged from Class C (i.e., level-load) shares of the same fund pursuant to Merrill Lynch's policies relating to sales load discounts and waivers;
■  Employees and registered representatives of Merrill Lynch or its affiliates and their family members;
■  Directors or Trustees of the Fund, and employees of the Fund's investment adviser or any of its affiliates, as described in the prospectus;
■  Eligible shares purchased from the proceeds of redemptions within the same fund family, provided: (1) the repurchase occurs within 90 days following the redemption; (2) the redemption and purchase occur in the same account; and (3) redeemed shares were subject to a front-end or deferred sales load (known as Rights of Reinstatement). Automated transactions (i.e., systematic purchases and withdrawals) and purchases made after shares are automatically sold to pay Merrill Lynch's account maintenance fees are not eligible for reinstatement.
CDSC Waivers on A, B and C Shares available at Merrill Lynch
■  Death or disability of the shareholder;
■  Shares sold as part of a systematic withdrawal plan as described in the Fund's prospectus;
■  Return of excess contributions from an IRA Account;
■  Shares sold as part of a required minimum distribution for IRA and retirement accounts pursuant to the Internal Revenue Code;
■  Shares sold to pay Merrill Lynch fees but only if the transaction is initiated by Merrill Lynch;
■  Shares acquired through a right of reinstatement;
■  Shares held in retirement brokerage accounts, that are exchanged for a lower cost share class due to transfer to certain fee based accounts or platforms (applicable to A and C shares only);
■  Class A Shares received through an exchange due to the holdings moving from a Merrill Lynch affiliated investment advisory program to a Merrill Lynch brokerage (non-advisory) account pursuant to Merrill Lynch's policies relating to sales load discounts and waivers.
Front-end load Discounts Available at Merrill Lynch:
Breakpoints, Rights of Accumulation & Letters of Intent
■  
Breakpoints as described in this prospectus;
■  Rights of Accumulation (ROA) which entitle shareholders to breakpoint discounts as described in the Fund's prospectus will be automatically calculated based on the aggregated holding of fund family assets held by accounts (including 529 program holdings, where applicable) within the purchaser's household at Merrill Lynch. Eligible fund family assets not held at Merrill Lynch may be included in the ROA calculation only if the shareholder notifies his or her financial advisor about such assets;
■  Letters of Intent (LOI) which allow for breakpoint discounts based on anticipated purchases within a fund family, through Merrill Lynch, over a 13-month period of time (if applicable).
49
Morgan Stanley Smith Barney
Class A Shares Front-End Sales Charge Waivers Available at Morgan Stanley Smith Barney:
Effective July 1, 2018, shareholders purchasing Fund shares through a Morgan Stanley Wealth Management transactional brokerage account will be eligible only for the following front-end sales charge waivers with respect to Class A shares, which may differ from and may be more limited than those disclosed elsewhere in this Fund's Prospectus or SAI.
Front-End Sales Charge Waivers on Class A Shares Available at Morgan Stanley Wealth Management
■  Employer-sponsored retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans and defined benefit plans). For purposes of this provision, employer-sponsored retirement plans do not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh plans;
■  Morgan Stanley employee and employee-related accounts according to Morgan Stanley's account linking rules;
■  Shares purchased through reinvestment of dividends and capital gains distributions when purchasing shares of the same fund;
■  Shares purchased through a Morgan Stanley self-directed brokerage account;
■  Class C (i.e., level-load) shares that are no longer subject to a contingent deferred sales charge and are exchanged to Class A shares of the same fund pursuant to Morgan Stanley Wealth Management's intra-fund share class exchange program;
■  Shares purchased from the proceeds of redemptions within the same fund family, provided: (i) the repurchase occurs within 90 days following the redemption; (ii) the redemption and purchase occur in the same account; and (iii) redeemed shares were subject to a front-end or deferred sales charge.
OPPENHEIMER & CO. INC.
Effective May 1, 2020, shareholders purchasing Fund shares through an Oppenheimer & Co., Inc. (OPCO) platform or account are eligible only for the following load waivers (front-end sales charge waivers and contingent deferred, or back-end, sales charge waivers) and discounts, which may differ from those disclosed elsewhere in this Fund's prospectus or SAI.
Front-end Sales Load Waivers on Class A Shares available at OPCO
■  Employer-sponsored retirement, deferred compensation and employee benefit plans (including health savings accounts) and trusts used to fund those plans, provided that the shares are not held in a commission-based brokerage account and shares are held for the benefit of the plan
■  Shares purchased by or through a 529 Plan
■  Shares purchased through an OPCO affiliated investment advisory program
■  Shares purchased through reinvestment of dividends and capital gains distributions when purchasing shares of the same fund (but not any other fund within the fund family)
■  Shares purchased from the proceeds of redemptions within the same fund family, provided: (1) the repurchase occurs within 90 days following the redemption; (2) the redemption and purchase occur in the same account; and (3) redeemed shares were subject to a front-end or deferred sales load (known as Rights of Reinstatement).
■  A shareholder in the Fund's Class C shares will have their shares automatically exchanged at net asset value to Class A shares (or the appropriate share class) of the Fund if the shares are no longer subject to a CDSC and the automatic exchange is in line with the policies and procedures of OPCO
■  Employees and registered representatives of OPCO or its affiliates and their family members
■  Directors or Trustees of the Fund, and employees of the Fund's investment adviser or any of its affiliates, as described in this prospectus
CDSC Waivers on A, B and C Shares available at OPCO
■  Death or disability of the shareholder
■  Shares sold as part of a systematic withdrawal plan as described in the Fund's prospectus
■  Return of excess contributions from an IRA Account
■  Shares sold as part of a required minimum distribution for IRA and retirement accounts pursuant to the Internal Revenue Code
■  Shares sold to pay OPCO fees but only if the transaction is initiated by OPCO
■  Shares acquired through a right of reinstatement
50
Front-end load Discounts Available at OPCO: Breakpoints, Rights of Accumulation & Letters of Intent
■  Breakpoints as described in this prospectus.
■  Rights of Accumulation (ROA), which entitle shareholders to breakpoint discounts, will be automatically calculated based on the aggregated holding of fund family assets held by accounts within the purchaser's household at OPCO. Eligible fund family assets not held at OPCO may be included in the ROA calculation only if the shareholder notifies his or her financial advisor about such assets
Raymond James & Associates, Inc., Raymond James Financial Services, Inc. and each entity's affiliates (“Raymond James”)
Effective March 1, 2019, shareholders purchasing and redeeming Fund shares through a Raymond James platform or account, or through an introducing broker-dealer or independent registered investment adviser for which Raymond James provides trade execution, clearance, and/or custody services, will be eligible only for the following load waivers (front-end sales charge waivers and contingent deferred, or back-end, sales charge waivers) and discounts, which may differ from those disclosed elsewhere in this Fund's prospectus or SAI.
Front-End Sales Load Waivers on Class A Shares Available at Raymond James
■  Shares purchased in an investment advisory program.
■  Shares purchased within the same fund family through a systematic reinvestment of capital gains and dividend distributions.
■  Employees and registered representatives of Raymond James or its affiliates and their family members as designated by Raymond James.
■  Shares purchased from the proceeds of redemptions within the same fund family, provided: (1) the repurchase occurs within 90 days following the redemption; (2) the redemption and purchase occur in the same account; and (3) redeemed shares were subject to a front-end or deferred sales load (known as Rights of Reinstatement).
■  A shareholder in the Fund's Class C shares will have their shares automatically exchanged at net asset value to Class A shares (or the appropriate share class) of the Fund if the shares are no longer subject to a CDSC and the automatic exchange is in line with the policies and procedures of Raymond James.
CDSC Waivers on A, B and C Shares Available at Raymond James
■  Death or disability of the shareholder.
■  Shares sold as part of a systematic withdrawal plan as described in the fund's prospectus.
■  Return of excess contributions from an IRA Account.
■  Shares sold as part of a required minimum distribution for IRA and retirement accounts due to the shareholder reaching the qualified age based on applicable IRS regulations as described in the fund's prospectus.
■  Shares sold to pay Raymond James fees but only if the transaction is initiated by Raymond James.
■  Shares acquired through a right of reinstatement.
Front-End Load Discounts Available at Raymond James: Breakpoints, Rights of Accumulation, and/or Letters of Intent
■  Breakpoints as described in this prospectus;
■  Rights of accumulation which entitle shareholders to breakpoint discounts will be automatically calculated based on the aggregated holding of fund family assets held by accounts within the purchaser's household at Raymond James. Eligible fund family assets not held at Raymond James may be included in the calculation of rights of accumulation only if the shareholder notifies his or her financial advisor about such assets.
■  Letters of Intent which allow for breakpoint discounts based on anticipated purchases within a fund family, over a 13-month time period. Eligible fund family assets not held at Raymond James may be included in the calculation of letters of intent only if the shareholder notifies his or her financial advisor about such assets.
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An SAI dated May 31, 2020, is incorporated by reference into this Prospectus. Additional information about the Fund and its investments is contained in the Fund's SAI and Annual and Semi-Annual Reports to shareholders as they become available. The Annual Report's Management's Discussion of Fund Performance discusses market conditions and investment strategies that significantly affected the Fund's performance during its last fiscal year. The SAI contains a description of the Fund's policies and procedures with respect to the disclosure of its portfolio securities. To obtain the SAI, Annual Report, Semi-Annual Report and other information without charge, and to make inquiries, call your financial intermediary or the Fund at 1-800-341-7400.
These documents, as well as additional information about the Fund (including portfolio holdings, performance and distributions), are also available on FederatedInvestors.com.
You can obtain information about the Fund (including the SAI) by accessing Fund information from the EDGAR Database on the SEC's website at sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov.
Federated Municipal Bond Fund, Inc.
Federated Hermes Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
Contact us at FederatedInvestors.com
or call 1-800-341-7400.
Federated Securities Corp., Distributor
Investment Company Act File No. 811-2677
CUSIP 313913105
CUSIP 313913204
CUSIP 313913303
CUSIP 313913402
CUSIP 313913600
G00322-01 (5/20)
© 2020 Federated Hermes, Inc.

 

 

Statement of Additional Information
May 31, 2020
Share Class | Ticker A | LMSFX B | LMSBX C | LMSCX F | LMFFX Institutional | LMBIX
Federated Municipal Bond Fund, Inc.
This Statement of Additional Information (SAI) is not a Prospectus. Read this SAI in conjunction with the Prospectus for Federated Municipal Bond Fund, Inc. (the “Fund”), dated May 31, 2020.
This SAI incorporates by reference the Fund's Annual Report. Obtain the Prospectus or the Annual Report without charge by calling 1-800-341-7400.
Federated Municipal Bond Fund, Inc.
Federated Hermes Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
Contact us at FederatedInvestors.com
or call 1-800-341-7400.
Federated Securities Corp., Distributor
8051601B (5/20)
© 2020 Federated Hermes, Inc.
How is the Fund Organized?
The Fund is a diversified open-end, management investment company that was established under the laws of the state of Maryland on September 10, 1976.
The Board of Directors (the “Board”) has established the following classes of shares of the Fund, known as Class A Shares, Class B Shares, Class C Shares, Class F Shares, Institutional Shares and Class T Shares (“Shares”). This SAI only relates to the Class A Shares, Class B Shares, Class C Shares, Class F Shares and Institutional Shares. The Fund's investment adviser is Federated Investment Management Company (“Adviser”). The Fund changed its name from Federated Municipal Securities Fund, Inc. to Federated Municipal Bond Fund, Inc. on July 27, 2017.
Securities in Which the Fund Invests
The principal securities or other investments in which the Fund invests are described in the Fund's Prospectus. The Fund also may invest in securities or other investments as non-principal investments for any purpose that is consistent with its investment objective. The following information is either additional information in respect of a principal security or other investment referenced in the Prospectus or information in respect of a non-principal security or other investment (in which case there is no related disclosure in the Prospectus).
Securities Descriptions And Techniques
Fixed-Income Securities
Fixed-income securities pay interest, dividends or distributions at a specified rate. The rate may be a fixed percentage of the principal or may be adjusted periodically. In addition, the issuer of a fixed-income security must repay the principal amount of the security, normally within a specified time. Fixed-income securities provide more regular income than equity securities. However, the returns on fixed-income securities are limited and normally do not increase with the issuer's earnings. This limits the potential appreciation of fixed-income securities as compared to equity securities.
A security's yield measures the annual income earned on a security as a percentage of its price. A security's yield will increase or decrease depending upon whether it costs less (a “discount”) or more (a “premium”) than the principal amount. If the issuer may redeem the security before its scheduled maturity, the price and yield on a discount or premium security may change based upon the probability of an early redemption. Securities with higher risks generally have higher yields.
The following further describes the types of fixed-income securities in which the Fund may invest.
Asset-Backed Securities (A Type of Fixed-Income, Tax-Exempt Security)
Asset-backed securities are payable from pools of obligations other than mortgages. Most asset-backed securities involve consumer or commercial debts with maturities of less than 10 years. However, almost any type of fixed-income assets (including other fixed-income securities) may be used to create an asset-backed security. Asset-backed securities may take the form of commercial paper, notes or pass-through certificates or other similar securities. Asset-backed securities have prepayment risks.
Tax-Exempt Commercial Paper (A Type of Tax-Exempt Security)
Tax-exempt commercial paper is an obligation issued by a tax-exempt issuer with a maturity of generally less than nine months. Tax-exempt issuers may issue commercial paper to pay for current expenditures or other permissible activities. Tax-exempt issuers may constantly reissue their commercial paper and use the proceeds (or other sources) to repay maturing paper. If the tax-exempt issuer cannot continue to obtain liquidity in this fashion, and if there is not another available source of liquidity, its commercial paper may default or there may be a reduction in payments received in repayment of the tax-exempt commercial paper.
Derivative Contracts
Derivative contracts are financial instruments that require payments based upon changes in the values of designated securities, commodities, indices, or other assets or instruments including other derivative contracts, (each a “Reference Instrument” and collectively, “Reference Instruments”). Each party to a derivative contract may sometimes be referred to as a counterparty. Some derivative contracts require payments relating to an actual, future trade involving the Reference Instrument. These types of derivatives are frequently referred to as “physically settled” derivatives. Other derivative contracts require payments relating to the income or returns from, or changes in the market value of, a Reference Instrument. These types of derivatives are known as “cash settled” derivatives, since they require cash payments in lieu of delivery of the Reference Instrument.
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Many derivative contracts are traded on securities or commodities exchanges. In this case, the exchange sets all the terms of the contract except for the price. Investors make payments due under their contracts through the exchange. Most exchanges require investors to maintain margin accounts through their brokers to cover their potential obligations to the exchange. Parties to the contract make (or collect) daily payments to the margin accounts to reflect losses (or gains) in the value of their contracts. This protects investors against potential defaults by the other party to the contract. Trading contracts on an exchange also allows investors to close out their contracts by entering into offsetting contracts.
For example, the Fund could close out an open contract to buy an asset at a future date by entering into an offsetting contract to sell the same asset on the same date. If the offsetting sale price is more than the original purchase price, the Fund realizes a gain; if it is less, the Fund realizes a loss. Exchanges may limit the amount of open contracts permitted at any one time. Such limits may prevent the Fund from closing out a position. If this happens, the Fund will be required to keep the contract open (even if it is losing money on the contract), and to make any payments required under the contract (even if it has to sell portfolio securities at unfavorable prices to do so). Inability to close out a contract could also harm the Fund by preventing it from disposing of or trading any assets it has been using to secure its obligations under the contract.
The Fund may also trade derivative contracts over-the-counter (OTC) in transactions negotiated directly between the Fund and a financial institution. OTC contracts do not necessarily have standard terms, so they may be less liquid and more difficult to close-out than exchange-traded contracts. In addition, OTC contracts with more specialized terms may be more difficult to value than exchange-traded contracts, especially in times of financial stress.
The market for swaps and other OTC derivatives was largely unregulated prior to the enactment of federal legislation known as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). Regulations enacted by the Commodity Futures Trading Commission (the CFTC) under the Dodd-Frank Act require the Fund to clear certain swap contracts through a clearing house or central counterparty (a CCP).
To clear a swap through the CCP, the Fund will submit the contract to, and post margin with, a futures commission merchant (FCM) that is a clearing house member. The Fund may enter into the swap with a financial institution other than the FCM and arrange for the contract to be transferred to the FCM for clearing, or enter into the contract with the FCM itself. If the Fund must centrally clear a transaction, the CFTC's regulations also generally require that the swap be executed on registered exchange or through a market facility that is known as a swap execution facility or SEF. Central clearing is presently required only for certain swaps and the CFTC is expected to impose a mandatory central clearing requirement for additional derivative instruments over time.
The CCP, SEF and FCM are all subject to regulatory oversight by the CFTC. In addition, most derivative market participants are now regulated as swap dealers or major swap participants and are subject to certain minimum capital and margin requirements and business conduct standards. Similar regulatory requirements are expected to apply to derivative contracts that are subject to the jurisdiction of the SEC, although the SEC has not yet finalized its regulations. In addition, uncleared OTC swaps will be subject to regulatory collateral requirements that could adversely affect the Fund's ability to enter into swaps in the OTC market. These developments could cause the Fund to terminate new or existing swap agreements or to realize amounts to be received under such instruments at an inopportune time.
Until the mandated rulemaking and regulations are implemented completely, it will not be possible to determine the complete impact of the Dodd-Frank Act and related regulations on the Fund.
Depending on how the Fund uses derivative contracts and the relationships between the market value of a derivative contract and the Reference Instrument, derivative contracts may increase or decrease the Fund's exposure to the risks of the Reference Instrument, and may also expose the Fund to liquidity and leverage risks. OTC contracts also expose the Fund to credit risks in the event that a counterparty defaults on the contract, although this risk may be mitigated by submitting the contract for clearing through a CCP.
The Fund may invest in a derivative contract if it is permitted to own, invest in, or otherwise have economic exposure to the Reference Instrument. The Fund is not required to own a Reference Instrument in order to buy or sell a derivative contract relating to that Reference Instrument. The Fund may trade in the following specific types and/or combinations of derivative contracts:
Futures Contracts (A Type of Derivative)
Futures contracts provide for the future sale by one party and purchase by another party of a specified amount of a Reference Instrument at a specified price, date and time. Entering into a contract to buy a Reference Instrument is commonly referred to as buying a contract or holding a long position in the asset. Entering into a contract to sell a Reference Instrument is commonly referred to as selling a contract or holding a short position in the Reference Instrument. Futures contracts are considered to be
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commodity contracts. The Adviser has claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act with respect to the Fund, and therefore is not subject to registration or regulation with respect to the Fund. Futures contracts traded OTC are frequently referred to as forward contracts. The Fund can buy or sell financial futures (such as interest rate futures, index futures and security futures).
Interest Rate Futures
An interest rate futures contract is an exchange-traded contract for which the Reference Instrument is an interest-bearing, fixed-income security or an inter-bank deposit. Two examples of common interest rate futures contracts are U.S. Treasury futures contracts and Eurodollar futures contracts. The Reference Instrument for a U.S. Treasury futures contract is a U.S. Treasury security. The Reference Instrument for a Eurodollar futures contract is the London Interbank Offered Rate (commonly referred to as LIBOR); Eurodollar futures contracts enable the purchaser to obtain a fixed rate for the lending of funds over a stated period of time and the seller to obtain a fixed rate for a borrowing of funds over that same period.
Index Futures
An index futures contract is an exchange-traded contract to make or receive a payment based upon changes in the value of an index. An index is a statistical composite that measures changes in the value of designated Reference Instruments within the index.
Security Futures
A security futures contract is an exchange-traded contract to purchase or sell in the future a specific quantity of a security (other than a Treasury security) or a narrow-based securities index at a certain price. Presently, the only available security futures contracts use shares of a single equity security as the Reference Instrument. However, it is possible that in the future, security futures contracts will be developed that use a single fixed-income security as the Reference Instrument.
Option Contracts (A Type of Derivative)
Option contracts (also called “options”) are rights to buy or sell a Reference Instrument for a specified price (the “exercise price”) during, or at the end of, a specified period. The seller (or “writer”) of the option receives a payment, or premium, from the buyer, which the writer keeps regardless of whether the buyer uses (or exercises) the option. Options may be bought or sold on a wide variety of Reference Instruments. Options that are written on futures contracts will be subject to margin requirements similar to those applied to futures contracts.
The Fund may buy the following types of options:
Call Options
A call option gives the holder (buyer) the right to buy the Reference Instrument from the seller (writer) of the option. The Fund may use call options in the following ways:
■  Buy call options on a Reference Instrument in anticipation of an increase in the value of the Reference Instrument; and
■  Write call options on a Reference Instrument to generate income from premiums, and in anticipation of a decrease or only limited increase in the value of the Reference Instrument. If the Fund writes a call option on a Reference Instrument that it owns and that call option is exercised, the Fund foregoes any possible profit from an increase in the market price of the Reference Instrument over the exercise price plus the premium received.
Put Options
A put option gives the holder the right to sell the Reference Instrument to the writer of the option. The Fund may use put options in the following ways:
■  Buy put options on a Reference Instrument in anticipation of a decrease in the value of the Reference Instrument; and
■  Write put options on a Reference Instrument to generate income from premiums, and in anticipation of an increase or only limited decrease in the value of the Reference Instrument. In writing puts, there is a risk that the Fund may be required to take delivery of the Reference Instrument when its current market price is lower than the exercise price.
The Fund may also buy or write options, as needed, to close out existing option positions.
Finally, the Fund may enter into combinations of options contracts in an attempt to benefit from changes in the prices of those options contracts (without regard to changes in the value of the Reference Instrument).
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Swap Contracts (A Type of Derivative)
A swap contract (also known as a “swap”) is a type of derivative contract in which two parties agree to pay each other (swap) the returns derived from Reference Instruments. Most swaps do not involve the delivery of the underlying assets by either party, and the parties might not own the Reference Instruments. The payments are usually made on a net basis so that, on any given day, the Fund would receive (or pay) only the amount by which its payment under the contract is less than (or exceeds) the amount of the other party's payment. Swap agreements are sophisticated instruments that can take many different forms and are known by a variety of names.
Common swap agreements that the Fund may use include:
Interest Rate Swaps
Interest rate swaps are contracts in which one party agrees to make regular payments equal to a fixed or floating interest rate times a stated principal amount (commonly referred to as a “notional principal amount”) in return for payments equal to a different fixed or floating rate times the same principal amount, for a specific period. For example, a $10 million London Interbank Offered Rate (commonly referred to as LIBOR) swap would require one party to pay the equivalent of the London Interbank Offered Rate of interest (which fluctuates) on $10 million principal amount in exchange for the right to receive the equivalent of a stated fixed rate of interest on $10 million principal amount.
Total Return Swaps
A total return swap is an agreement between two parties whereby one party agrees to make payments of the total return from a Reference Instrument (or a basket of such instruments) during the specified period, in return for payments equal to a fixed or floating rate of interest or the total return from another Reference Instrument. Alternately, a total return swap can be structured so that one party will make payments to the other party if the value of a Reference Instrument increases, but receive payments from the other party if the value of that instrument decreases.
Credit Default Swaps
A credit default swap (CDS) is an agreement between two parties whereby one party (the “Protection Buyer”) agrees to make payments over the term of the CDS to the other party (the “Protection Seller”), provided that no designated event of default, restructuring or other credit related event (each a “Credit Event”) occurs with respect to Reference Instrument that is usually a particular bond, loan or the unsecured credit of an issuer, in general (the “Reference Obligation”). Many CDS are physically settled, which means that if a Credit Event occurs, the Protection Seller must pay the Protection Buyer the full notional value, or “par value,” of the Reference Obligation in exchange for delivery by the Protection Buyer of the Reference Obligation or another similar obligation issued by the issuer of the Reference Obligation (the “Deliverable Obligation”). The Counterparties agree to the characteristics of the Deliverable Obligation at the time that they enter into the CDS. Alternately, a CDS can be “cash-settled,” which means that upon the occurrence of a Credit Event, the Protection Buyer will receive a payment from the Protection Seller equal to the difference between the par amount of the Reference Obligation and its market value at the time of the Credit Event. The Fund may be either the Protection Buyer or the Protection Seller in a CDS. If the Fund is a Protection Buyer and no Credit Event occurs, the Fund will lose its entire investment in the CDS (i.e., an amount equal to the payments made to the Protection Seller over the term of the CDS). However, if a Credit Event occurs, the Fund (as “Protection Buyer”) will deliver the Deliverable Obligation and receive a payment equal to the full notional value of the Reference Obligation, even though the Reference Obligation may have little or no value. If the Fund is the Protection Seller and no Credit Event occurs, the Fund will receive a fixed rate of income throughout the term of the CDS. However, if a Credit Event occurs, the Fund (as “Protection Seller”) will pay the Protection Buyer the full notional value of the Reference Obligation and receive the Deliverable Obligation from the Protection Buyer. A CDS may involve greater risks than if the Fund invested directly in the Reference Obligation. For example, a CDS may increase credit risk since the Fund has exposure to both the issuer of the Reference Obligation and the Counterparty to the CDS.
Caps and Floors (A Type of Swap Contract)
Caps and Floors are contracts in which one party agrees to make payments only if an interest rate or index goes above (Cap) or below (Floor) a certain level in return for a fee from the other party.
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Other Investments, Transactions, Techniques
Investing in Securities of Other Investment Companies
The Fund may invest its assets in securities of other investment companies, including the securities of affiliated money market funds, as an efficient means of implementing its investment strategies and/or managing its uninvested cash. These other investment companies are managed independently of the Fund and incur additional fees and/or expenses which would, therefore, be borne indirectly by the Fund in connection with any such investment. However, the Adviser believes that the benefits and efficiencies of this approach should outweigh the potential additional fees and/or expenses. The Fund may invest in money market securities directly.
Hedging
Hedging transactions are intended to reduce specific risks. For example, to protect the Fund against circumstances that would normally cause the Fund's portfolio securities to decline in value, the Fund may buy or sell a derivative contract that would normally increase in value under the same circumstances. The Fund may also attempt to hedge by using combinations of different derivative contracts, or derivative contracts and securities. The Fund's ability to hedge may be limited by the costs of the derivative contracts. The Fund may attempt to lower the cost of hedging by entering into transactions that provide only limited protection, including transactions that: (1) hedge only a portion of its portfolio; (2) use derivative contracts that cover a narrow range of circumstances; or (3) involve the sale of derivative contracts with different terms. Consequently, hedging transactions will not eliminate risk even if they work as intended. In addition, hedging strategies are not always successful, and could result in increased expenses and losses to the Fund.
Hybrid Instruments
Hybrid instruments combine elements of two different kinds of securities or financial instruments (such as a derivative contract). Frequently, the value of a hybrid instrument is determined by reference to changes in the value of a Reference Instrument (that is a designated security, commodity, index or other asset or instrument including a derivative contract). Hybrid instruments can take on many forms including, but not limited to, the following forms. First, a common form of a hybrid instrument combines elements of a derivative contract with those of another security (typically a fixed-income security). In this case, all or a portion of the interest or principal payable on a hybrid security is determined by reference to changes in the price of a Reference Instrument. Second, hybrid instruments may include convertible securities with conversion terms related to a Reference Instrument.
Depending on the type and terms of the hybrid instrument, its risks may reflect a combination of the risks of investing in the Reference Instrument with the risks of investing in other securities and derivative contracts. Thus, an investment in a hybrid instrument may entail significant risks in addition to those associated with traditional securities or the Reference Instrument. Hybrid instruments are also potentially more volatile than traditional securities or the Reference Instrument. Moreover, depending on the structure of the particular hybrid, it may expose the Fund to leverage risks or carry liquidity risks.
Credit Linked Notes (A Type of Hybrid Instrument)
A credit linked note (CLN) is a type of hybrid instrument in which a special purpose entity issues a structured note (the “Note Issuer”) with respect to which the Reference Instrument is a single bond, a portfolio of bonds or the unsecured credit of an issuer, in general (each a “Reference Credit”). The purchaser of the CLN (the “Note Purchaser”) invests a par amount and receives a payment during the term of the CLN that equals a fixed or floating rate of interest equivalent to a high rated funded asset (such as a bank certificate of deposit) plus an additional premium that relates to taking on the credit risk of the Reference Credit. Upon maturity of the CLN, the Note Purchaser will receive a payment equal to: (i) the original par amount paid to the Note Issuer, if there is no occurrence of a designated event of default, restructuring or other credit event (each a “Credit Event”) with respect to the issuer of the Reference Credit; or (ii) the market value of the Reference Credit, if a Credit Event has occurred. Depending upon the terms of the CLN, it is also possible that the Note Purchaser may be required to take physical delivery of the Reference Credit in the event of a Credit Event. Most credit linked notes use a corporate bond (or a portfolio of corporate bonds) as the Reference Credit. However, almost any type of fixed-income security (including foreign government securities), index or derivative contract (such as a credit default swap) can be used as the Reference Credit.
Repurchase Agreements
Repurchase agreements are transactions in which the Fund buys a security from a dealer or bank and agrees to sell the security back at a mutually agreed-upon time and price. The repurchase price exceeds the sale price, reflecting the Fund's return on the transaction. This return is unrelated to the interest rate on the underlying security. The Fund will enter into repurchase agreements only with banks and other recognized financial institutions, such as securities dealers, deemed creditworthy by the Adviser.
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The Fund's custodian or subcustodian will take possession of the securities subject to repurchase agreements. The Adviser or subcustodian will monitor the value of the underlying security each day to ensure that the value of the security always equals or exceeds the repurchase price.
Repurchase agreements are subject to credit risks.
Reverse Repurchase Agreements (A Type of Fixed-Income, Tax-Exempt Security)
Reverse repurchase agreements (which are considered a type of special transaction for asset segregation purposes) are repurchase agreements in which the Fund is the seller (rather than the buyer) of the securities, and agrees to repurchase them at an agreed-upon time and price. A reverse repurchase agreement may be viewed as a type of borrowing by the Fund. Reverse repurchase agreements are subject to credit risks. In addition, reverse repurchase agreements create leverage risks because the Fund must repurchase the underlying security at a higher price, regardless of the market value of the security at the time of repurchase.
Securities Lending
The Fund may lend portfolio securities to borrowers that the Adviser deems creditworthy. In return, the Fund receives cash or liquid securities from the borrower as collateral. The borrower must furnish additional collateral if the market value of the loaned securities increases. Also, the borrower must pay the Fund the equivalent of any dividends or interest received on the loaned securities.
The Fund will reinvest cash collateral in securities that qualify as an acceptable investment for the Fund. However, the Fund must pay interest to the borrower for the use of cash collateral. An acceptable investment into which the Fund may reinvest cash collateral includes, among other acceptable investments, securities of affiliated money market funds (including affiliated institutional prime money market funds with a “floating” net asset value that can impose redemption fees and liquidity gates, impose certain operational impediments to investing cash collateral, and, if net asset value decreases, result in the Fund having to cover the decrease in the value of the cash collateral).
Loans are subject to termination at the option of the Fund or the borrower. The Fund will not have the right to vote on securities while they are on loan. However, the Fund will attempt to terminate a loan in an effort to reacquire the securities in time to vote on matters that are deemed to be material by the Adviser. There can be no assurance that the Fund will have sufficient notice of such matters to be able to terminate the loan in time to vote thereon. The Fund may pay administrative and custodial fees in connection with a loan and may pay a negotiated portion of the interest earned on the cash collateral to a securities lending agent or broker. Securities lending activities are subject to interest rate risks and credit risks.
Inter-Fund Borrowing and Third-Party Lending Arrangements
Inter-Fund Borrowing
The Securities and Exchange Commission (SEC) has granted an exemption that permits the Fund and all other funds (“Federated Hermes funds”) advised by subsidiaries of Federated Hermes, Inc. (“Federated Hermes,” formerly, Federated Investors, Inc.”) to lend and borrow money for certain temporary purposes directly to and from other Federated Hermes funds. Participation in this inter-fund lending program is voluntary for both borrowing and lending Federated Hermes funds, and an inter-fund loan is only made if it benefits each participating Federated Hermes fund. Federated Hermes administers the program according to procedures approved by the Fund's Board, and the Board monitors the operation of the program. Any inter-fund loan must comply with certain conditions set out in the exemption, which are designed to assure fairness and protect all participating Federated Hermes funds.
For example, inter-fund lending is permitted only: (a) to meet shareholder redemption requests; (b) to meet commitments arising from “failed” trades; and (c) for other temporary purposes. All inter-fund loans must be repaid in seven days or less. The Fund's participation in this program must be consistent with its investment policies and limitations, and must meet certain percentage tests. Inter-fund loans may be made only when the rate of interest to be charged is more attractive to the lending Federated Hermes fund than market-competitive rates on overnight repurchase agreements (“Repo Rate”) and more attractive to the borrowing Federated Hermes fund than the rate of interest that would be charged by an unaffiliated bank for short-term borrowings (“Bank Loan Rate”), as determined by the Board. The interest rate imposed on inter-fund loans is the average of the Repo Rate and the Bank Loan Rate.
Third-Party Line of Credit
The Fund participates with certain other Federated Hermes Funds, on a several basis, in an up to $500,000,000 unsecured, 364-day, committed, revolving line of credit (LOC) agreement. The LOC was made available to finance temporarily the repurchase or redemption of shares of the Fund, failed trades, payment of dividends, settlement of trades and for other short-term, temporary or emergency general business purposes. The Fund cannot borrow under the LOC if an inter-fund loan is outstanding. The Fund's ability to borrow under the LOC also is subject to the limitations of the 1940 Act and various conditions precedent
6
that must be satisfied before the Fund can borrow. Loans under the LOC are charged interest at a fluctuating rate per annum equal to the highest, on any day, of: (a) (i) the federal funds effective rate; (ii) the one month London Interbank Offered Rate (LIBOR); and (iii) 0.0%; plus (b) a margin. The LOC also requires the Fund to pay, quarterly in arrears and at maturity, its pro rata share of a commitment fee based on the amount of the lenders' commitment that has not been utilized. As of the date of this Statement of Additional Information, there were no outstanding loans. During the most recently ended fiscal year, the Fund did not utilize the LOC.
Asset Segregation
In accordance with the Securities and Exchange Commission (SEC) and SEC staff positions regarding the interpretation of the Investment Company Act of 1940 (“1940 Act”), with respect to derivatives that create a future payment obligation of the Fund, the Fund must “set aside” (referred to sometimes as “asset segregation”) liquid assets, or engage in other SEC- or staff-approved measures, while the derivative contracts are open. For example, with respect to forwards and futures contracts that are not contractually required to “cash-settle,” the Fund must cover its open positions by setting aside cash or readily marketable securities equal to the contracts' full, notional value. With respect to forwards and futures that are contractually required to “cash-settle,” however, the Fund is permitted to set aside cash or readily marketable securities in an amount equal to the Fund's daily marked-to-market (“net”) obligations, if any (i.e., the Fund's daily net liability, if any), rather than the notional value.
The Fund will employ another approach to segregating assets to cover options that it sells. If the Fund sells a call option, the Fund will set aside either the Reference Instrument subject to the option, cash or readily marketable securities with a value that equals or exceeds the current market value of the Reference Instrument. In no event, will the value of the cash or readily marketable securities set aside by the Fund be less than the exercise price of the call option. If the Fund sells a put option, the Fund will set aside cash or readily marketable securities with a value that equals or exceeds the exercise price of the put option.
The Fund's asset segregation approach for swap agreements varies among different types of swaps. For example, if the Fund enters into a credit default swap as the Protection Buyer, then it will set aside cash or readily marketable securities necessary to meet any accrued payment obligations under the swap. By comparison, if the Fund enters into a credit default swap as the Protection Seller, then the Fund will set aside cash or readily marketable securities equal to the full notional amount of the swap that must be paid upon the occurrence of a Credit Event. For some other types of swaps, such as interest rate swaps, the Fund will calculate the obligations of the counterparties to the swap on a net basis. Consequently, the Fund's current obligation (or rights) under this type of swap will equal only the net amount to be paid or received based on the relative values of the positions held by each counterparty to the swap (the “net amount”). The net amount currently owed by or to the Fund will be accrued daily and the Fund will set aside cash or readily marketable securities equal to any accrued but unpaid net amount owed by the Fund under the swap.
The Fund may reduce the liquid assets segregated to cover obligations under a derivative contract by entering into an offsetting derivative contract. For example, if the Fund sells a put option for the same Reference Instrument as a call option the Fund has sold, and the exercise price of the call option is the same as or higher than the exercise price of the put option, then the Fund may net its obligations under the options and set aside cash or readily marketable securities (including any margin deposited for the options) with a value equal to the greater of: (a) the current market value of the Reference Instrument deliverable under the call option; or (b) the exercise price of the put option.
By setting aside cash or readily marketable securities equal to only its net obligations under swaps and certain cash-settled derivative contracts, the Fund will have the ability to employ leverage to a greater extent than if the Fund were required to segregate cash or readily marketable securities equal to the full notional value of such contracts. The use of leverage involves certain risks. See “Investment Risks.” Unless the Fund has other cash or readily marketable securities to set aside, it cannot trade assets set aside in connection with derivative contracts or special transactions without entering into an offsetting derivative contract or terminating a special transaction. This may cause the Fund to miss favorable trading opportunities or to realize losses on derivative contracts or special transactions. The Fund reserves the right to modify its asset segregation policies in the future to comply with any changes in the positions articulated from time to time by the SEC and its staff.
Generally, special transactions do not cash-settle on a net basis. Consequently, with respect to special transactions, the Fund will set aside cash or readily marketable securities with a value that equals or exceeds the Fund's obligations.
Investing in Exchange-Traded Funds
The Fund may invest in exchange-traded funds (ETFs) as an efficient means of carrying out its investment strategies. As with traditional mutual funds, ETFs charge asset-based fees, although these fees tend to be relatively low. ETFs are traded on stock exchanges or on the over-the-counter market. ETFs do not charge initial sales charges or redemption fees and investors pay only customary brokerage fees to buy and sell ETF shares.
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Temporary Investments
The Fund may make temporary investments in taxable, fixed-income securities and the following other taxable securities:
Treasury Securities (A Type of Fixed-Income Security)
Treasury securities are direct obligations of the federal government of the United States. Treasury securities are generally regarded as having minimal credit risks.
Bank Instruments (A Type of Fixed-Income Security)
Bank instruments are unsecured interest-bearing deposits with banks. Bank instruments include, but are not limited to, bank accounts, time deposits, certificates of deposit and banker's acceptances. Yankee instruments are denominated in U.S. dollars and issued by U.S. branches of foreign banks. Eurodollar instruments are denominated in U.S. dollars and issued by non-U.S. branches of U.S. or foreign banks.
Government Securities (A Type of Fixed-Income Security)
Government securities are issued or guaranteed by a federal agency or instrumentality acting under federal authority. Some government securities, including those issued by Government National Mortgage Association (“Ginnie Mae”), are supported by the full faith and credit of the United States and are guaranteed only as to the timely payment of interest and principal.
Other government securities receive support through federal subsidies, loans or other benefits, but are not backed by the full faith and credit of the United States. For example, the U.S. Treasury is authorized to purchase specified amounts of securities issued by (or otherwise make funds available to) the Federal Home Loan Bank System, Federal Home Loan Mortgage Corporation (“Freddie Mac”), Federal National Mortgage Association (“Fannie Mae”) and Tennessee Valley Authority in support of such obligations.
Some government agency securities have no explicit financial support and are supported only by the credit of the applicable agency, instrumentality or corporation. The U.S. government has provided financial support to Freddie Mac and Fannie Mae, but there is no assurance that it will support these or other agencies in the future.
Investors regard government securities as having minimal credit risks, but not as low as Treasury securities.
The Fund treats mortgage-backed securities guaranteed by a federal agency or instrumentality as government securities. Although such a guarantee helps protect against credit risk, it does not eliminate it entirely or reduce other risks.
Additional Information Related to Freddie Mac and Fannie Mae. The extreme and unprecedented volatility and disruption that impacted the capital and credit markets beginning in 2008 led to market concerns regarding the ability of Freddie Mac and Fannie Mae to withstand future credit losses associated with securities held in their investment portfolios, and on which they provide guarantees, without the direct support of the federal government. On September 7, 2008, Freddie Mac and Fannie Mae were placed under the conservatorship of the Federal Housing Finance Agency (FHFA). Under the plan of conservatorship, the FHFA assumed control of, and generally has the power to direct, the operations of Freddie Mac and Fannie Mae, and is empowered to exercise all powers collectively held by their respective shareholders, directors and officers, including the power to: (1) take over the assets of and operate Freddie Mac and Fannie Mae with all the powers of the shareholders, the directors and the officers of Freddie Mac and Fannie Mae and conduct all business of Freddie Mac and Fannie Mae; (2) collect all obligations and money due to Freddie Mac and Fannie Mae; (3) perform all functions of Freddie Mac and Fannie Mae which are consistent with the conservator's appointment; (4) preserve and conserve the assets and property of Freddie Mac and Fannie Mae; and (5) contract for assistance in fulfilling any function, activity, action or duty of the conservator.
In connection with the actions taken by the FHFA, the Treasury has entered into certain preferred stock purchase agreements (SPAs) with each of Freddie Mac and Fannie Mae which establish the Treasury as the holder of a new class of senior preferred stock in each of Freddie Mac and Fannie Mae. The senior preferred stock was issued in connection with financial contributions from the Treasury to Freddie Mac and Fannie Mae. Although the SPAs are subject to amendment from time to time, currently the Treasury is obligated to provide such financial contributions up to an aggregate maximum amount determined by a formula set forth in the SPAs, and until such aggregate maximum amount is reached, there is not a specific end date to the Treasury's obligations.
The future status and role of Freddie Mac and Fannie Mae could be impacted by (among other things) the actions taken and restrictions placed on Freddie Mac and Fannie Mae by the FHFA in its role as conservator, the restrictions placed on Freddie Mac's and Fannie Mae's operations and activities under the SPAs, market responses to developments at Freddie Mac and Fannie Mae, downgrades or upgrades in the credit ratings assigned to Freddie Mac and Fannie Mae by nationally recognized statistical rating organizations (NRSROs) or ratings services, and future legislative and regulatory action that alters the operations, ownership, structure and/or mission of these institutions, each of which may, in turn, impact the value of, and cash flows on, any securities guaranteed by Freddie Mac and Fannie Mae.
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In addition, the future of Freddie Mac and Fannie Mae, and other U.S. government-sponsored enterprises that are not backed by the full faith and credit of the U.S. government (GSEs), remains in question as the U.S. government continues to consider options ranging from structural reform, nationalization, privatization or consolidation, to outright elimination. The issues that have led to significant U.S. government support for Freddie Mac and Fannie Mae have sparked serious debate regarding the continued role of the U.S. government in providing mortgage loan liquidity.
Corporate Debt Securities (A Type of Fixed-Income Security)
Corporate debt securities are fixed-income securities issued by businesses. Notes, bonds, debentures and commercial paper are the most prevalent types of corporate debt securities. The credit risk of corporate debt securities vary widely across issuers.
In addition, the credit risk of an issuer's debt security may vary based on its priority for repayment. For example, higher ranking (“senior”) debt securities have a higher priority than lower ranking (“subordinated”) securities. This means that the issuer might not make payments on subordinated securities while continuing to make payments on senior securities. In addition, in the event of bankruptcy, holders of senior securities may receive amounts otherwise payable to the holders of subordinated securities. Some subordinated securities, such as trust-preferred and capital securities notes, also permit the issuer to defer payments under certain circumstances. For example, insurance companies issue securities known as surplus notes that permit the insurance company to defer any payment that would reduce its capital below regulatory requirements.
Commercial Paper (A Type of Corporate Debt Security)
Commercial paper is an issuer's obligation with a maturity of less than nine months. Companies typically issue commercial paper to pay for current expenditures. Most issuers constantly reissue their commercial paper and use the proceeds (or bank loans) to repay maturing paper. If the issuer cannot continue to obtain liquidity in this fashion, its commercial paper may default. The short maturity of commercial paper generally reduces both the market and credit risks as compared to other debt securities of the same issuer.
LIQUIDITY RISK MANAGEMENT PROGRAM
The Fund has adopted and implemented a written liquidity risk management program (LRMP) and related procedures to assess and manage the liquidity risk of the Fund in accordance with Section 22(e) of the 1940 Act and Rule 22e-4 thereunder. The Board has designated the Adviser, together with Federated Hermes, Inc.'s (“Federated Hermes,” formerly, Federated Investors, Inc.) other affiliated registered investment advisory subsidiaries that serve as investment advisers to other Federated Hermes funds, to collectively serve as the administrator of the LRMP and the related procedures (the “Administrator”). Rule 22e-4 defines “liquidity risk” as the risk that the Fund will be unable to meet requests to redeem shares issued by the Fund without significant dilution of the remaining investors' interests in the Fund. As a part of the LRMP, the Administrator is responsible for classifying the liquidity of the Fund's portfolio investments in accordance with Rule 22e-4. As part of the LRMP, the Administrator is also responsible for assessing, managing and periodically reviewing the Fund's liquidity risk, for making periodic reports to the Board and the SEC regarding the liquidity of the Fund's investments, and for notifying the Board and the SEC of certain liquidity events specified in Rule 22e-4. The liquidity of the Fund's portfolio investments is determined based on relevant market, trading and investment-specific considerations under the LRMP.
Investment Risks
There are many risk factors which may affect an investment in the Fund. The Fund's principal risks are described in its Prospectus. The following information is either additional information in respect of a principal risk factor referenced in the Prospectus or information in respect of a non-principal risk factor applicable to the Fund (in which case there is no related disclosure in the Prospectus).
Prepayment and Extension Risk
Like municipal mortgage-backed securities, asset-backed securities (including fixed-income or tax-exempt securities that are pooled or collateralized) may be subject to prepayment risks and the possibility that interest and other payments may not be made. Such investments also may be subject to interest rate, credit and the other risks described in the Fund's Prospectus and this SAI.
Risk of Investing in Derivative Contracts and Hybrid Instruments
The Fund's exposure to derivative contracts and hybrid instruments (either directly or through its investment in another investment company) involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. First, changes in the value of the derivative contracts and hybrid instruments in which the Fund invests may not be correlated with changes in the value of the underlying Reference Instruments or, if they are correlated, may move in the opposite direction than originally anticipated. Second, while some strategies involving derivatives may reduce the risk of loss, they may also reduce potential gains or, in some cases, result in losses by offsetting favorable price movements in portfolio
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holdings. Third, there is a risk that derivative contracts and hybrid instruments may be erroneously priced or improperly valued and, as a result, the Fund may need to make increased cash payments to the counterparty. Fourth, exposure to derivative contracts and hybrid instruments may have tax consequences to the Fund and its shareholders. For example, derivative contracts and hybrid instruments may cause the Fund to realize increased ordinary income or short-term capital gains (which are treated as ordinary income for federal income tax purposes) and, as a result, may increase taxable distributions to shareholders. In addition, under certain circumstances certain derivative contracts and hybrid instruments may cause the Fund to: (a) incur an excise tax on a portion of the income related to those contracts and instruments; and/or (b) reclassify, as a return of capital, some or all of the distributions previously made to shareholders during the fiscal year as dividend income. Fifth, a common provision in OTC derivative contracts permits the counterparty to terminate any such contract between it and the Fund, if the value of the Fund's total net assets declines below a specified level over a given time period. Factors that may contribute to such a decline (which usually must be substantial) include significant shareholder redemptions and/or a marked decrease in the market value of the Fund's investments. Any such termination of the Fund's OTC derivative contracts may adversely affect the Fund (for example, by increasing losses and/or costs, and/or preventing the Fund from fully implementing its investment strategies). Sixth, the Fund may use a derivative contract to benefit from a decline in the value of a Reference Instrument. If the value of the Reference Instrument declines during the term of the contract, the Fund makes a profit on the difference (less any payments the Fund is required to pay under the terms of the contract). Any such strategy involves risk. There is no assurance that the Reference Instrument will decline in value during the term of the contract and make a profit for the Fund. The Reference Instrument may instead appreciate in value creating a loss for the Fund. Seventh, a default or failure by a CCP or an FCM (also sometimes called a “futures broker”), or the failure of a contract to be transferred from an Executing Dealer to the FCM for clearing, may expose the Fund to losses, increase its costs, or prevent the Fund from entering or exiting derivative positions, accessing margin or fully implementing its investment strategies. The central clearing of a derivative and trading of a contract over a SEF could reduce the liquidity in, or increase costs of entering into or holding, any contracts. Finally, derivative contracts and hybrid instruments may also involve other risks described herein or in the Fund's Prospectus, such as interest rate, credit, liquidity and leverage risks.
Risk Associated with the Investment Activities of Other Accounts
Investment decisions for the Fund are made independently from those of other accounts managed by the Adviser and accounts managed by affiliates of the Adviser. Therefore, it is possible that investment-related actions taken by such other accounts could adversely impact the Fund with respect to, for example, the value of Fund portfolio holdings and/or prices paid to or received by the Fund on its portfolio transactions and/or the Fund's ability to obtain or dispose of portfolio securities. Related considerations are discussed elsewhere in this SAI under “Brokerage Transactions and Investment Allocation.”
EXCHANGE-TRADED FUNDS RISK
An investment in an exchange-traded fund (ETF) generally presents the same primary risks as an investment in a conventional fund (i.e., one that is not exchange-traded) that has the same investment objectives, strategies and policies. The price of an ETF can fluctuate up or down, and the Fund could lose money investing in an ETF if the prices of the securities owned by the ETF go down. In addition, ETFs may be subject to the following risks that do not apply to conventional funds: (i) the market price of an ETF's shares may trade above or below its net asset value; (ii) an active trading market for an ETF's shares may not develop or be maintained; or (iii) trading of an ETF's shares may be halted if the listing exchange's officials deem such action appropriate, the shares are delisted from the exchange or the activation of market-wide “circuit breakers” (which are tied to large decreases in stock prices) halts stock trading generally.
LIBOR Risk
Certain derivatives or debt securities, or other financial instruments in which the Fund may invest, as well as the Fund's committed, revolving line of credit agreement, utilize or may utilize in the future the London Interbank Offered Rate (LIBOR) as the reference or benchmark rate for interest rate calculations. LIBOR is a measure of the average interest rate at which major global banks can borrow from one another. It is quoted in multiple currencies and tenors using data reported by a panel of private-sector banks. Following allegations of rate manipulation in 2012 and concerns regarding its thin liquidity, the use of LIBOR came under increasing pressure, and in July 2017, the U.K. Financial Conduct Authority, which regulates LIBOR, announced that it will stop encouraging banks to provide the quotations needed to sustain LIBOR after 2021. This may cause LIBOR to cease to be published. LIBOR panel banks have agreed to submit quotations to LIBOR through the end of 2021. Before then, it is expected that market participants will transition to the use of different reference or benchmark rates. However, there is currently no definitive information regarding the future utilization of LIBOR or of any particular replacement rate. Regulators have suggested alternative reference rates, but global consensus is lacking and the process for amending existing contracts or instruments to transition away from LIBOR remains unclear.
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While it is expected that market participants will amend financial instruments referencing LIBOR to include fallback provisions and other measures that contemplate the discontinuation of LIBOR or other similar market disruption events, neither the effect of the transition process nor the viability of such measures is known. While market participants have begun transitioning away from LIBOR, there are obstacles to converting certain longer term securities and transactions to a new benchmark or benchmarks. The effectiveness of multiple alternative reference rates as opposed to one primary reference rate has not been determined. The effectiveness of alternative reference rates used in new or existing financial instruments and products has also not yet been determined. As market participants transition away from LIBOR, LIBOR's usefulness may deteriorate, which could occur prior to the end of 2021. The transition process may lead to increased volatility and illiquidity in markets that currently rely on LIBOR to determine interest rates. LIBOR's deterioration may adversely affect the liquidity and/or market value of securities that use LIBOR as a benchmark interest rate, including securities and other financial instruments held by the Fund. Further, the utilization of an alternative reference rate, or the transition process to an alternative reference rate, may adversely affect the Fund's performance.
Cybersecurity Risk
Like other funds and business enterprises, Federated Hermes' business relies on the security and reliability of information and communications technology, systems and networks. Federated Hermes uses digital technology, including, for example, networked systems, email and the Internet, to conduct business operations and engage clients, customers, employees, products, accounts, shareholders, and relevant service providers, among others. Federated Hermes, as well as its funds and certain service providers, also generate, compile and process information for purposes of preparing and making filings or reports to governmental agencies, and a cybersecurity attack or incident that impacts that information, or the generation and filing processes, may prevent required regulatory filings and reports from being made. The use of the Internet and other electronic media and technology exposes the Fund, the Fund's shareholders, and the Fund's service providers, and their respective operations, to potential risks from cybersecurity attacks or incidents (collectively, “cyber-events”).
Cyber-events can result from intentional (or deliberate) attacks or unintentional events by insiders or third parties, including cybercriminals, competitors, nation-states and “hacktivists,” among others. Cyber-events may include, for example, phishing, use of stolen access credentials, unauthorized access to systems, networks or devices (such as, for example, through “hacking” activity), structured query language attacks, infection from or spread of malware, ransomware, computer viruses or other malicious software code, corruption of data, and attacks (including, but not limited to, denial of service attacks on websites) which shut down, disable, slow, impair or otherwise disrupt operations, business processes, technology, connectivity or website or internet access, functionality or performance. Like other funds and business enterprises, the Fund and its service providers have experienced, and will continue to experience, cyber-events on a daily basis. In addition to intentional cyber-events, unintentional cyber-events can occur, such as, for example, the inadvertent release of confidential information. To date, cyber-events have not had a material adverse effect on the Fund's business operations or performance.
Cyber-events can affect, potentially in a material way, Federated Hermes' relationships with its customers, employees, products, accounts, shareholders and relevant service providers. Any cyber-event could adversely impact the Fund and its shareholders and cause the Fund to incur financial loss and expense, as well as face exposure to regulatory penalties, reputational damage and additional compliance costs associated with corrective measures. A cyber-event may cause the Fund, or its service providers, to lose proprietary information, suffer data corruption, lose operational capacity (such as, for example, the loss of the ability to process transactions, calculate the Fund's NAV, or allow shareholders to transact business or other disruptions to operations), and/or fail to comply with applicable privacy and other laws. Among other potentially harmful effects, cyber-events also may result in theft, unauthorized monitoring and failures in the physical infrastructure or operating systems that support the Fund and its service providers. In addition, cyber-events affecting issuers in which the Fund invests could cause the Fund's investments to lose value.
The Fund's Adviser and its relevant affiliates have established risk management systems reasonably designed to seek to reduce the risks associated with cyber-events. The Fund's Adviser employs various measures aimed at mitigating cybersecurity risk, including, among others, use of firewalls, system segmentation, system monitoring, virus scanning, periodic penetration testing, employee phishing training and an employee cybersecurity awareness campaign. Among other vendor management efforts, Federated Hermes also conducts due diligence on key service providers (or vendors) relating to cybersecurity. Federated Hermes has established a committee to oversee Federated Hermes' information security and data governance efforts, and updates on cyber-events and risks are reviewed with relevant committees, as well as Federated Hermes' and the Fund's Boards of Directors or Trustees (or a committee thereof), on a periodic (generally quarterly) basis (and more frequently when circumstances warrant) as part of risk management oversight responsibilities. However, there is no guarantee that the efforts of Federated Hermes, the Fund's Adviser or
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its affiliates, or other service providers, will succeed, either entirely or partially as there are limits on Federated Hermes' and the Fund's ability to prevent, detect or mitigate cyber-events. Among other reasons, the cybersecurity landscape is constantly evolving, the nature of malicious cyber-events is becoming increasingly sophisticated and the Fund's Adviser, and its relevant affiliates, cannot control the cyber systems and cybersecurity systems of issuers or third-party service providers.
Investment Objective (and Policies) and Investment Limitations
The investment objective of the Fund is to provide for its shareholders a high level of current income which is exempt from federal regular income tax.
The Fund will invest its assets so that at least 80% of the income that it distributes will be exempt from federal regular income tax.
The fundamental investment objective and policy may not be changed by the Board without shareholder approval.
Diversification
With respect to securities comprising 75% of the value of its total assets, the Fund will not purchase securities of any one issuer (other than cash, cash items, securities issued or guaranteed by the government of the United States or its agencies or instrumentalities and repurchase agreements collateralized by such U.S. government securities, and securities of other investment companies) if, as a result, more than 5% of the value of its total assets would be invested in the securities of that issuer, or the Fund would own more than 10% of the outstanding voting securities of that issuer.
Borrowing Money and Issuing Senior Securities
The Fund may borrow money, directly or indirectly, and issue senior securities to the maximum extent permitted under the Investment Company Act of 1940 (“1940 Act”).
Investing in Real Estate
The Fund may not purchase or sell real estate, provided that this restriction does not prevent the Fund from investing in issuers which invest, deal, or otherwise engage in transactions in real estate or interests therein, or investing in securities that are secured by real estate or interests therein. The Fund may exercise its rights under agreements relating to such securities, including the right to enforce security interests and to hold real estate acquired by reason of such enforcement until that real estate can be liquidated in an orderly manner.
Investing in Commodities
The Fund may not purchase or sell physical commodities, provided that the Fund may purchase securities of companies that deal in commodities. For purposes of this restriction, investments in transactions involving futures contracts and options, forward currency contracts, swap transactions and other financial contracts that settle by payment of cash are not deemed to be investments in commodities.
Underwriting
The Fund may not underwrite the securities of other issuers, except that the Fund may engage in transactions involving the acquisition, disposition or resale of its portfolio securities, under circumstances where it may be considered to be an underwriter under the Securities Act of 1933.
Lending
The Fund may not make loans, provided that this restriction does not prevent the Fund from purchasing debt obligations, entering into repurchase agreements, lending its assets to broker/dealers or institutional investors and investing in loans, including assignments and participation interests.
Concentration
The Fund will not make investments that will result in the concentration of its investments in the securities of issuers primarily engaged in the same industry, provided that the Fund may invest more that 25% of the value of its assets in industrial development bonds. Government securities, municipal securities and bank instruments will not be deemed to constitute an industry. As to industrial development bonds, the Fund may purchase securities of an issuer resulting in the ownership of more than 25% of the Fund's assets in one industry, and the Fund reserves the right to invest more than 25% of its assets in industrial development bonds in the same state.
The above limitations cannot be changed unless authorized by the Board and by the “vote of a majority of the Fund's outstanding voting securities,” as defined by the 1940 Act. The following limitations, however, may be changed by the Board without shareholder approval. Shareholders will be notified before any material change in these limitations becomes effective.
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Pledging Assets
The Fund will not mortgage, pledge or hypothecate any of its assets, provided that this shall not apply to the transfer of securities in connection with any permissible borrowing or to collateral arrangements in connection with permissible activities.
Purchases on Margin
The Fund will not purchase securities on margin, provided that the Fund may obtain short-term credits necessary for the clearance of purchases and sales of securities, and further provided that the Fund may make margin deposits in connection with its use of financial options and futures, forward and spot currency contracts, swap transactions and other financial contracts or derivative instruments.
Restricted Securities
The Fund may invest in restricted securities. Restricted securities are any securities in which the Fund may invest pursuant to its investment objective and policies but which are subject to restrictions on resale under federal securities law. Under criteria established by the board, certain restricted securities are determined to be liquid. To the extent that restricted securities are not determined to be liquid, the Fund will limit their purchase, together with other illiquid securities, to 15% of its net assets.
ADDITIONAL INFORMATION
To conform to the current view of the SEC staff that only domestic bank instruments may be excluded from industry concentration limitations, as a matter of non-fundamental policy, the Fund will not exclude foreign bank instruments from industry concentration tests as long as the policy of the SEC remains in effect.
The Fund applies its concentration of investments restrictions as follows:
■  utility companies will be divided according to their services, for example, gas, gas transmissions, electric and telephone will each be considered a separate industry;
■  financial service companies will be classified according to the end users of their services, for example, automobile finance, bank finance and diversified finance will each be considered a separate industry; and
■  asset-backed securities will be classified according to the underlying assets securing such securities.
For purposes of the above limitations, the Fund considers certificates of deposit and demand and time deposits issued by a U.S. branch of a domestic bank or savings association having capital, surplus and undivided profits in excess of $100,000,000 at the time of investment to be “cash items” and “bank instruments.”
As a matter of non-fundamental operating policy, the Fund will not exclude domestic bank instruments or foreign bank instruments from industry concentration limitations so long as it is the SEC staff's view that such instruments should not be excluded from industry concentration tests.
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 limitation.
As a matter of non-fundamental policy, for purposes of the restricted securities policy, illiquid securities are securities that the Fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
What Do Shares Cost?
Determining Market Value of Securities
A Share's net asset value (NAV) is determined as of the end of regular trading on the New York Stock Exchange (NYSE) (normally 4:00 p.m. Eastern time) each day the NYSE is open. The Fund calculates the NAV of each class by valuing the assets allocated to the Share's class, subtracting the liabilities allocated to each class and dividing the balance by the number of Shares of the class outstanding. The NAV for each class of Shares may differ due to the level of expenses allocated to each class as well as a result of the variance between the amount of accrued investment income and capital gains or losses allocated to each class and the amount actually distributed to shareholders of each class. The NAV is calculated to the nearest whole cent per Share.
In calculating its NAV, the Fund generally values investments as follows:
■  Equity securities listed on a U.S. securities exchange or traded through the U.S. national market system are valued at their last reported sale price or official closing price in their principal exchange or market. If a price is not readily available, such equity securities are valued based upon the mean of closing bid and asked quotations from one or more dealers.
■  Other equity securities traded primarily in the United States are valued based upon the mean of closing bid and asked quotations from one or more dealers.
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■  Equity securities traded primarily through securities exchanges and regulated market systems outside the United States are valued at their last reported sale price or official closing price in their principal exchange or market. These prices may be adjusted for significant events occurring after the closing of such exchanges or market systems as described below. If a price is not readily available, such equity securities are valued based upon the mean of closing bid and asked quotations from one or more dealers.
■  Fixed-income securities are fair valued using price evaluations provided by a pricing service approved by the Board. The methods used by pricing services to determine such price evaluations are described below. If a price evaluation from a pricing service is not readily available, such fixed-income securities are fair valued based upon price evaluations from one or more dealers.
■  Futures contracts listed on exchanges are valued at their reported settlement price. Option contracts listed on exchanges are valued based upon the mean of closing bid and asked quotations reported by the exchange or from one or more futures commission merchants.
■  OTC derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Board. The methods used by pricing services to determine such price evaluations are described below. If a price evaluation from a pricing service is not readily available, such derivative contracts may be fair valued based upon price evaluations from one or more dealers or using a recognized pricing model for the contract.
■  Shares of other mutual funds or non-exchange-traded investment companies are valued based upon their reported NAVs. The prospectuses for these mutual funds explain the circumstances under which they will use fair value pricing and the effects of using fair value pricing.
If any price, quotation, price evaluation or other pricing source is not readily available when the NAV is calculated, if the Fund cannot obtain price evaluations from a pricing service or from more than one dealer for an investment within a reasonable period of time as set forth in the Fund's valuation policies and procedures, or if information furnished by a pricing service, in the opinion of the Valuation Committee, is deemed not representative of the fair value of such security, the Fund will use the fair value of the investment determined in accordance with the procedures described below. There can be no assurance that the Fund could purchase or sell an investment at the price used to calculate the Fund's NAV. The Fund will not use a pricing service or dealer who is an affiliated person of the Adviser to value investments.
Noninvestment assets and liabilities are valued in accordance with U.S. Generally Accepted Accounting Principles (GAAP). The NAV calculation includes expenses, dividend income, interest income, other income and realized and unrealized investment gains and losses through the date of the calculation. Changes in holdings of investments and in the number of outstanding Shares are included in the calculation not later than the first business day following such change. Any assets or liabilities denominated in foreign currencies are converted into U.S. dollars using an exchange rate obtained from one or more currency dealers.
The Fund follows procedures that are common in the mutual fund industry regarding errors made in the calculation of its NAV. This means that, generally, the Fund will not correct errors of less than one cent per Share or errors that did not result in net dilution to the Fund.
Fair Valuation and Significant Events Procedures
The Board has ultimate responsibility for determining the fair value of investments for which market quotations are not readily available. The Board has appointed a Valuation Committee comprised of officers of the Fund, the Adviser and certain of the Adviser's affiliated companies to assist in determining fair value and in overseeing the calculation of the NAV. The Board has also authorized the use of pricing services recommended by the Valuation Committee to provide price evaluations of the current fair value of certain investments for purposes of calculating the NAV.
Pricing Service Valuations. Based on the recommendations of the Valuation Committee, the Board has authorized the Fund, subject to Board oversight, to use pricing services that provide daily fair value evaluations of the current value of certain investments, primarily fixed-income securities and OTC derivatives contracts. Different pricing services may provide different price evaluations for the same security because of differences in their methods of evaluating market values. Factors considered by pricing services in evaluating an investment include the yields or prices of investments of comparable quality, coupon, maturity, call rights and other potential prepayments, terms and type, reported transactions, indications as to values from dealers and general market conditions. A pricing service may find it more difficult to apply these and other factors to relatively illiquid or volatile investments, which may result in less frequent or more significant changes in the price evaluations of these investments. If a pricing service determines that it does not have sufficient information to use its standard methodology, it may evaluate an investment based on the present value of what investors can reasonably expect to receive from the issuer's operations or liquidation.
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Special valuation considerations may apply with respect to the Fund's “odd-lot” positions, if any, as the Fund may receive lower prices when it sells such positions than it would receive for sales of institutional round lot positions. Typically, these securities are valued assuming orderly transactions of institutional round lot sizes, but the Fund may hold or, from time to time, transact in such securities in smaller, odd lot sizes.
The Valuation Committee engages in oversight activities with respect to the Fund's pricing services, which includes, among other things, monitoring significant or unusual price fluctuations above predetermined tolerance levels from the prior day, back-testing of pricing services' prices against actual sale transactions, conducting periodic due diligence meetings and reviews, and periodically reviewing the inputs, assumptions and methodologies used by these pricing services. If information furnished by a pricing service is not readily available or, in the opinion of the Valuation Committee, is deemed not representative of the fair value of such security, the security will be fair valued by the Valuation Committee in accordance with procedures established by the Directors as discussed below in “Fair Valuation Procedures.”
Some pricing services provide a single price evaluation reflecting the bid-side of the market for an investment (a “bid” evaluation). Other pricing services offer both bid evaluations and price evaluations indicative of a price between the prices bid and asked for the investment (a “mid” evaluation). The Fund normally uses bid evaluations for any U.S. Treasury and Agency securities, mortgage-backed securities and municipal securities. The Fund normally uses mid evaluations for any other types of fixed-income securities and any OTC derivative contracts.
Fair Valuation Procedures. The Board has established procedures for determining the fair value of investments for which price evaluations from pricing services or dealers and market quotations are not readily available. The procedures define an investment's “fair value” as the price that the Fund might reasonably expect to receive upon its current sale. The procedures assume that any sale would be made to a willing buyer in the ordinary course of trading. The procedures require consideration of factors that vary based on the type of investment and the information available. Factors that may be considered in determining an investment's fair value include: (1) the last reported price at which the investment was traded; (2) information provided by dealers or investment analysts regarding the investment or the issuer; (3) changes in financial conditions and business prospects disclosed in the issuer's financial statements and other reports; (4) publicly announced transactions (such as tender offers and mergers) involving the issuer; (5) comparisons to other investments or to financial indices that are correlated to the investment; (6) with respect to fixed-income investments, changes in market yields and spreads; (7) with respect to investments that have been suspended from trading, the circumstances leading to the suspension; and (8) other factors that might affect the investment's value.
The Valuation Committee is responsible for the day-to-day implementation of these procedures subject to Board oversight. The Valuation Committee may also authorize the use of a financial valuation model to determine the fair value of a specific type of investment. The Board periodically reviews and approves the fair valuations made by the Valuation Committee and any changes made to the procedures.
Using fair value to price investments may result in a value that is different from an investment's most recent closing price and from the prices used by other mutual funds to calculate their NAVs. The application of the fair value procedures to an investment represent a good faith determination of an investment's fair value. There can be no assurance that the Fund could obtain the fair value assigned to an investment if it sold the investment at approximately the time at which the Fund determines its NAV per share.
Significant Events. The Board has adopted procedures requiring an investment to be priced at its fair value whenever the Adviser determines that a significant event affecting the value of the investment has occurred between the time as of which the price of the investment would otherwise be determined and the time as of which the NAV is computed. An event is considered significant if there is both an affirmative expectation that the investment's value will change in response to the event and a reasonable basis for quantifying the resulting change in value. Examples of significant events that may occur after the close of the principal market on which a security is traded, or the time of a price evaluation provided by a pricing service or a dealer, include:
■  With respect to securities traded principally in foreign markets, significant trends in U.S. equity markets or in the trading of foreign securities index futures contracts;
■  Political or other developments affecting the economy or markets in which an issuer conducts its operations or its securities are traded; and
■  Announcements concerning matters such as acquisitions, recapitalizations or litigation developments, or a natural disaster affecting the issuer's operations or regulatory changes or market developments affecting the issuer's industry.
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The Board has adopted procedures whereby the Valuation Committee uses a pricing service to provide factors to update the fair value of equity securities traded principally in foreign markets from the time of the close of their respective foreign stock exchanges to the pricing time of the Fund. The pricing service uses models that correlate changes between the closing and opening price of equity securities traded primarily in non-U.S. markets to changes in prices in U.S.-traded securities and derivative contracts. The pricing service seeks to employ the model that provides the most significant correlation based on a periodic review of the results. The model uses the correlation to adjust the reported closing price of a foreign equity security based on information available up to the close of the NYSE.
For other significant events, the Fund may seek to obtain more current quotations or price evaluations from alternative pricing sources. If a reliable alternative pricing source is not available, the fair value of the investment is determined using the methods discussed above in “Fair Valuation Procedures.” The Board has ultimate responsibility for any fair valuations made in response to a significant event.
How is the Fund Sold?
Under the Distributor's Contract with the Fund, the Distributor (“Federated Securities Corp.”) offers Shares on a continuous, best-efforts basis.
Class B Shares are closed to new investments by new investors and existing shareholders (excluding reinvestment of dividends and capital gains). Reinvestment of dividends and capital gains will continue uninterrupted. Class B Shares of the Fund may be exchanged for Class B Shares of any other Federated Hermes fund. Please disregard any further references to purchases of Class B Shares with the exception of Class B Share exchanges.
Rule 12b-1 Plan (CLASS B SHARES AND CLASS C SHARES ONLY)
As a compensation-type plan, the Rule 12b-1 Plan is designed to pay the Distributor for activities principally intended to result in the sale of Shares such as advertising and marketing of Shares (including printing and distributing prospectuses and sales literature to prospective shareholders and financial intermediaries) and providing incentives to financial intermediaries to sell Shares. The Plan is also designed to cover the cost of administrative services performed in conjunction with the sale of Shares, including, but not limited to, shareholder services, recordkeeping services and educational services, as well as the costs of implementing and operating the Plan. The Rule 12b-1 Plan allows the Distributor to contract with financial intermediaries to perform activities covered by the Plan. The Rule 12b-1 Plan is expected to benefit the Fund in a number of ways. For example, it is anticipated that the Plan will help the Fund attract and retain assets, thus providing cash for orderly portfolio management and Share redemptions and possibly helping to stabilize or reduce other operating expenses.
In addition, the Plan is integral to the multiple class structure of the Fund, which promotes the sale of Shares by providing a range of options to investors. The Fund's service providers that receive asset-based fees also benefit from stable or increasing Fund assets.
The Fund may compensate the Distributor more or less than its actual marketing expenses. In no event will the Fund pay for any expenses of the Distributor that exceed the maximum Rule 12b-1 Plan fee.
For some classes of shares, the maximum Rule 12b-1 Plan fee that can be paid in any one year may not be sufficient to cover the marketing-related expenses the Distributor has incurred. Therefore, it may take the Distributor a number of years to recoup these expenses.
In addition, in connection with the sale of Class B Shares and Class C Shares, Federated Hermes and its subsidiaries make advance commission payments to financial intermediaries and in return may receive Rule 12b-1 fees and contingent deferred sales loads from the Class B Shares and Class C Shares. Federated Hermes and its subsidiaries may benefit or sustain losses from such arrangements.
Additional Payments To Financial Intermediaries
The Distributor may pay out of its own resources amounts to certain financial intermediaries, including broker-dealers, banks, registered investment advisers, independent financial planners and retirement plan administrators. In some cases, such payments may be made by, or funded from the resources of, companies affiliated with the Distributor (including the Adviser). While Financial Industry Regulatory Authority, Inc. (FINRA) regulations limit the sales charges that you may bear, there are no limits with regard to the amounts that the Distributor may pay out of its own resources. In addition to the payments which are generally described herein and in the Prospectus, the financial intermediary also may receive payments under the Rule 12b-1 Plan and/or Service Fees. In connection with these payments, the financial intermediary may elevate the prominence or profile of the Fund and/or other Federated Hermes funds within the financial intermediary's organization by, for example, placement on a list of preferred or recommended funds and/or granting the Distributor preferential or enhanced opportunities to promote the funds in various ways within the financial intermediary's organization. The same financial intermediaries may receive payments under more than one or
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all categories. These payments assist in the Distributor's efforts to support the sale of Shares. These payments are negotiated and may be based on such factors as: the number or value of Shares that the financial intermediary sells or may sell; the value of client assets invested; the level and types of services or support furnished by the financial intermediary; or the Fund's and/or other Federated Hermes funds' relationship with the financial intermediary. Not all financial intermediaries receive such payments and the amount of compensation may vary by intermediary. You should ask your financial intermediary for information about any payments it receives from the Distributor or the Federated Hermes funds and any services it provides, as well as the fees and/or commissions it charges.
The categories of additional payments are described below.
Supplemental Payments
The Distributor may make supplemental payments to certain financial intermediaries that are holders or dealers of record for accounts in one or more of the Federated Hermes funds. These payments may be based on such factors as: the number or value of Shares the financial intermediary sells or may sell; the value of client assets invested; or the type and nature of services or support furnished by the financial intermediary.
Processing Support Payments
The Distributor may make payments to certain financial intermediaries that sell Federated Hermes fund shares to help offset their costs associated with client account maintenance support, statement processing and transaction processing. The types of payments that the Distributor may make under this category include: payment of ticket charges on a per-transaction basis; payment of networking fees; and payment for ancillary services such as setting up funds on the financial intermediary's mutual fund trading system.
Retirement Plan Program Servicing Payments
The Distributor may make payments to certain financial intermediaries who sell Federated Hermes fund shares through retirement plan programs. A financial intermediary may perform retirement plan program services itself or may arrange with a third party to perform retirement plan program services. In addition to participant recordkeeping, reporting or transaction processing, retirement plan program services may include: services rendered to a plan in connection with fund/investment selection and monitoring; employee enrollment and education; plan balance rollover or separation; or other similar services.
Marketing Support Payments
From time to time, the Distributor, at its expense, may provide additional compensation to financial intermediaries that sell or arrange for the sale of Shares. Such compensation, provided by the Distributor, may include financial assistance to financial intermediaries that enable the Distributor to participate in or present at conferences or seminars, sales or training programs for invited registered representatives and other employees, client entertainment, client and investor events and other financial intermediary-sponsored events. Such compensation may also be used for the provision of sales-related data to the Adviser and/or its affiliates.
The Distributor also may hold or sponsor, at its expense, sales events, conferences and programs for employees or associated persons of financial intermediaries and may pay the travel and lodging expenses of attendees. The Distributor also may provide, at its expense, meals and entertainment in conjunction with meetings with financial intermediaries. Other compensation may be offered to the extent not prohibited by applicable federal or state law or regulations, or the rules of any self-regulatory agency, such as FINRA. These payments may vary depending on the nature of the event or the relationship.
For the year ended December 31, 2019, the following is a list of FINRA member firms that received additional payments from the Distributor or an affiliate. Additional payments may also be made to certain other financial intermediaries that are not FINRA member firms that sell Federated Hermes fund shares or provide services to the Federated Hermes funds and shareholders. These firms are not included in this list. Any additions, modifications or deletions to the member firms identified in this list that have occurred since December 31, 2019, are not reflected. You should ask your financial intermediary for information about any additional payments it receives from the Distributor.
Access Point, LLC
ADP Broker-Dealer, Inc.
American Enterprise Investment Services Inc.
American Portfolios Advisors Inc.
Ascensus Broker Dealer Services LLC
Avantax Investment Services, Inc.
Banc of America Investment Services, Inc.
BB&T Securities, LLC
BBVA Securities Inc.
BMO Harris Financial Advisors, Inc.
Broadridge Business Process Outsourcing, LLC
Brown Brothers Harriman & Company
Cadaret, Grant & Co., Inc.
Caitlin John, LLC
Calton & Associates, Inc.
Cambridge Financial Group, Inc.
 
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Castle Rock Wealth Management, LLC
CBIZ Financial Solutions, Inc.
Cetera Advisor Networks LLC
Cetera Advisors LLC
Cetera Financial Specialists LLC
Cetera Investment Advisers LLC
Cetera Investment Services LLC
Charles Schwab & Company, Inc.
Citigroup Global Markets Inc.
Citizens Securities, Inc.
Comerica Securities, Inc.
Commonwealth Financial Network
Concord Wealth Partners
CVAGS, Inc.
D.A. Davidson & Co.
Davenport & Company LLC
David Lerner Associates, Inc.
Deutsche Bank Securities Inc.
E*Trade Securities LLC
Edward D. Jones & Co., LP
Emerald Advisors, LLC
Envestnet Asset Management, Inc.
Epic Advisors Inc.
ESL Investment Services, LLC
FBL Marketing Services, LLC
Fidelity Investments Institutional Operations Company, Inc. (FIIOC)
Fiducia Group, LLC
Fieldpoint Private Securities, LLC
Fifth Third Securities, Inc.
FIS Brokerage & Securities Services LLC
Folger Nolan Fleming Douglas Incorporated
Franklin/Templeton Distributors, Inc.
FSC Securities Corporation
Gitterman Wealth Management LLC
Goldman Sachs & Co. LLC
Great-West Life & Annuity Insurance Company
GWFS Equities, Inc.
Hancock Whitney Investment Services, Inc.
Hefren-Tillotson Inc.
Henderson Global Investors Limited
HighTower Securities, LLC
Hilltop Securities Inc.
The Huntington Investment Company
Independent Financial Group, LLC
Industrial and Commercial Bank of China
Financial Services LLC
Infinex Investments, Inc.
Institutional Cash Distributors, LLC
INTL FCStone Financial Inc.
J.J.B. Hilliard, W.L. Lyons, LLC
J.P. Morgan Securities LLC
Janney Montgomery Scott LLC
Kestra Investment Services, LLC
Key Investment Services, LLC
KeyBanc Capital Markets, Inc.
KMS Financial Services, Inc.
Laidlaw Wealth Management LLC
Lincoln Financial Securities Corporation
Lincoln Investment Planning, LLC
LPL Financial LLC
M Holdings Securities, Inc.
M&T Securities Inc.
Materetsky Financial Group
Mercer Global Advisors Inc.
Merrill Lynch, Pierce, Fenner and Smith Incorporated
Mid Atlantic Capital Corp.
MML Investors Services, LLC
Morgan Stanley Smith Barney LLC
National Financial Services LLC
Nationwide Investment Services Corporation
NBC Securities, Inc.
Newport Group, Inc.
Northwestern Mutual Investment Services, LLC
NYLIFE Distributors LLC
NYLIFE Securities LLC
Oneamerica Securities, Inc.
Open Range Financial Group, LLC
Oppenheimer & Company, Inc.
Paychex Securities Corp
Pensionmark Financial Group, LLC
People's Securities, Inc.
Pershing LLC
Piper Jaffray & Co.
Pitcairn Trust Company
Planmember Securities Corporation
PNC Capital Markets, LLC
PNC Investments LLC
Principal Securities, Inc.
Private Client Services, LLC
Procyon Private Wealth Partners, LLC
Proequities, Inc.
Prudential Investment Management Services, LLC
Purshe Kaplan Sterling Investments
Raymond James & Associates, Inc.
Raymond James Financial Services, Inc.
RBC Capital Markets, LLC
Regal Investment Advisors LLC
Resources Investment Advisors, Inc.
Robert W. Baird & Co. Inc.
Royal Alliance Associates Inc.
SA Stone Wealth Management Inc.
SagePoint Financial, Inc.
Sageview Advisory Group, LLC
Securian Financial Services, Inc.
Securities America, Inc.
Securities Service Network, Inc.
Security Distributors LLC
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Sentry Advisors, LLC
Sigma Financial Corporation
Spire Securities LLC
State Street Global Markets, LLC
Stephens Inc.
Stifel, Nicolaus & Company, Incorporated
Strategic Benefits Consultants, Inc.
Summit Financial Group, Inc.
Suntrust Investment Services, Inc.
Suntrust Robinson Humphrey, Inc.
TD Ameritrade, Inc.
Thrivent Investment Management, Inc.
TIAA CREF Individual & Institutional Services LLC
Towerpoint Wealth, LLC
Transamerica Financial Advisors, Inc.
Triad Advisors, LLC
U.S. Bancorp Investments, Inc.
UBS Financial Services Inc.
UBS Securities LLC
United Planners Financial Services of America
Valic Financial Advisors, Inc.
Valor Financial Securities LLC
The Vanguard Group, Inc.
Vanguard Marketing Corporation
Vining-Sparks IBG, Limited Partnership
Vision Financial Markets, LLC
Voya Financial Advisors, Inc.
Voya Financial Partners, LLC
Voya Retirement Advisors, LLC
The Wealth Enhancement Group, Inc.
Wells Fargo Clearing Services LLC
Wells Fargo Securities, LLC
Wintrust Investments, LLC
Woloshin Investment Management LLC
Woodbury Financial Services, Inc.
World Equity Group, Inc.
XML Financial, LLC
UNDERWRITING COMMISSIONS
The following chart reflects the total front-end sales charges and/or contingent deferred sales charges paid in connection with the sale of Class A Shares, Class B Shares, Class C Shares and Class F Shares and the amount retained by the Distributor for the last three fiscal years ended March 31:
  2020 2019 2018
  Total Sales
Charges 		Amount
Retained 		Total Sales
Charges 		Amount
Retained 		Total Sales
Charges 		Amount
Retained
Class A Shares $35,964 $10,606 $52,025 $6,040 $81,209 $10,260
Class B Shares $142 $142 $1,741 $1,741 $2,694 $2,694
Class C Shares $1,178 $1,178 $487 $487 $555 $555
Class F Shares $91,656 $15,767 $24,922 $11,978 $31,503 $7,970
Purchases In-Kind
You may contact the Distributor to request a purchase of Shares using securities you own. The Fund reserves the right to determine whether to accept your securities and the minimum market value to accept. The Fund will value your securities in the same manner as it values its assets. An in-kind purchase may be treated as a sale of your securities for federal tax purposes; please consult your tax adviser regarding potential tax liability.
Redemption In-Kind
Although the Fund generally intends to pay Share redemptions in cash, it reserves the right, on its own initiative or in response to a shareholder request, to pay the redemption price in whole or in part by a distribution of the Fund's portfolio securities.
Because the Fund has elected to be governed by Rule 18f-1 under the 1940 Act, the Fund is obligated to pay Share redemptions to any one shareholder in cash only up to the lesser of $250,000 or 1% of the net assets represented by such Share class during any 90-day period.
Any Share redemption payment greater than this amount will also be in cash unless the Fund elects to pay all or a portion of the remainder of the redemption in portfolio securities, valued in the same way as the Fund determines its NAV.
Redemption in-kind is not as liquid as a cash redemption. Shareholders receiving the portfolio securities could have difficulty selling them, may incur related transaction costs and would be subject to risks of fluctuations in the securities' values prior to sale.
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Account and Share Information
Voting Rights
Each Share of the Fund gives the shareholder one vote in Director elections and other matters submitted to shareholders for vote.
All Shares of the Fund have equal voting rights, except that in matters affecting only a particular class, only Shares of that class are entitled to vote.
Directors may be removed by the Board or by shareholders at a special meeting. A special meeting of shareholders will be called by the Board upon the written request of shareholders who own at least 10% of the Corporation's outstanding Shares.
As of May 7, 2020 the following shareholders owned of record, beneficially, or both, 5% or more of outstanding Class A Shares: Edward D. Jones & Co., St. Louis, MO, owned approximately 5,003,259 Shares (19.90%); National Financial Services LLC, New York, NY, owned approximately 1,758,537 Shares (6.99%); Wells Fargo Clearing Services LLC, St. Louis, MO, owned approximately 1,613,123 Shares (6.41%); and Morgan Stanley Smith Barney, LLC & Co., New York, NY, owned approximately 1,497,309 Shares (5.95%).
As of May 7, 2020, the following shareholders owned of record, beneficially, or both, 5% or more of outstanding Class B Shares: Pershing LLC, Jersey City, NJ, owned approximately 68,534 Shares (37.26%); Charles Schwab & Co., Inc., San Francisco, CA, owned approximately 49,284 Shares (26.79%); Wells Fargo Clearing Services LLC, St. Louis, MO, owned approximately 21,126 Shares (11.48%); National Financial Services LLC, New York, NY, owned approximately 14,651 Shares (7.96%); and Raymond James, St. Petersburg, FL, owned approximately 11,309 Shares (6.14%).
As of May 7, 2020, the following shareholders owned of record, beneficially, or both, 5% or more of outstanding Class C Shares: Wells Fargo Clearing Services LLC, St. Louis, MO, owned approximately 181,353 Shares (23.23%); Edward D. Jones & Co., St. Louis, MO, owned approximately 84,866 Shares (10.87%); J.P Morgan Securities LLC, Brooklyn, NY, owned approximately 80,376 Shares (10.29%); MLPF&S, Jacksonville, FL, owned approximately 59,512 Shares (7.62%); UBS WM USA, Weehawken, NJ, owned approximately 43,185 Shares (5.53%); and National Financial Services LLC, New York, NY, owned approximately 40,231 Shares (5.15%).
As of May 7, 2020, the following shareholders owned of record, beneficially, or both, 5% or more of outstanding Class F Shares: Edward D. Jones & Co., St. Louis, MO, owned approximately 1,666,807 Shares (59.99%); Pershing LLC, Jersey City, NJ, owned approximately 320,977 Shares (11.55%); National Financial Services LLC, New York, NY, owned approximately 250,876 Shares (9.03%); and Morgan Stanley Smith Barney LLC, New York, owned approximately 144,955 Shares (5.36%).
As of May 7, 2020, the following shareholders owned of record, beneficially, or both, 5% or more of outstanding Institutional Shares: Wells Fargo Clearing Services LLC, St. Louis, MO, owned approximately 235,448 Shares (18.26%); Raymond James, St. Petersburg, FL, owned approximately 209,548 Shares (16.25%); UBS WM USA, Weehawken, NJ, owned approximately 178,654 Shares (13.86%); Edward D. Jones & Co., St. Louis, MO, owned approximately 166,744 Shares (12.93%); National Financial Services LLC, Jersey City, NJ, owned approximately 141,808 Shares (11.00%); Pershing LLC, Jersey City, NJ, owned approximately 133,241 Shares (10.33%); J.P Morgan Securities LLC, Brooklyn, NY, owned approximately 76,229 Shares (5.91%); and Stifel Nicolaus & Co., Inc., St. Louis, MO, owned approximately 67,066 Shares (5.20%).
Shareholders owning 25% or more of outstanding Shares may be in control and be able to affect the outcome of certain matters presented for a vote of shareholders.
Pershing LLC is organized in the state of Delaware and is a subsidiary of the Bank of New York Company, organized in the state of New York.
Charles Schwab & Co., Inc. is organized in the state of California.
Edward Jones & Co. is organized in the state of Missouri and is a subsidiary of Jones Financial Companies, organized in the state of Missouri.
Tax Information
Federal Income Tax
The Fund intends to meet requirements of Subchapter M of the Internal Revenue Code (the “Code”) applicable to regulated investment companies. If these requirements are not met, it will not receive special tax treatment and will be subject to federal corporate income tax.
The Fund is entitled to a loss carryforward, which may reduce the taxable income or gain that the Fund would realize, and to which the shareholder would be subject, in the future.
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Tax Basis Information
The Fund's Transfer Agent is required to provide you with the cost basis information on the sale of any of your Shares in the Fund, subject to certain exceptions.
Who Manages and Provides Services to the Fund?
Board of Directors
The Board of Directors is responsible for managing the Fund's business affairs and for exercising all the Fund's powers except those reserved for the shareholders. The following tables give information about each Director and the senior officers of the Fund. Where required, the tables separately list Directors who are “interested persons” of the Fund (i.e., “Interested” Directors) and those who are not (i.e., “Independent” Directors). Unless otherwise noted, the address of each person listed is 1001 Liberty Avenue, Pittsburgh, PA 15222-3779. The address of all Independent Directors listed is 4000 Ericsson Drive, Warrendale, PA 15086-7561; Attention: Mutual Fund Board. As of December 31, 2019, the Fund comprised one portfolio, and the Federated Hermes Fund Complex consisted of 41 investment companies (comprising 135 portfolios). Unless otherwise noted, each Officer is elected annually. Unless otherwise noted, each Director oversees all portfolios in the Federated Hermes Fund Complex and serves for an indefinite term.
As of May 7, 2020, the Fund's Board and Officers as a group owned less than 1% of each class of the Fund's outstanding Shares.
qualifications of Independent Directors
Individual Director qualifications are noted in the “Independent Directors Background and Compensation” chart. In addition, the following characteristics are among those that were considered for each existing Director and will be considered for any Nominee Director.
■  Outstanding skills in disciplines deemed by the Independent Directors to be particularly relevant to the role of Independent Director and to the Federated Hermes funds, including legal, accounting, business management, the financial industry generally and the investment industry particularly.
■  Desire and availability to serve for a substantial period of time, taking into account the Board's current mandatory retirement age of 75 years.
■  No conflicts which would interfere with qualifying as independent.
■  Appropriate interpersonal skills to work effectively with other Independent Directors.
■  Understanding and appreciation of the important role occupied by Independent Directors in the regulatory structure governing regulated investment companies.
■  Diversity of background.
interested Directors Background and Compensation
Name
Birth Date
Positions Held with Fund
Date Service Began 		Principal Occupation(s) for Past Five Years,
Other Directorships Held and Previous Position(s) 		Aggregate
Compensation
From Fund
(past fiscal year) 		Total Compensation
From Fund and
Federated Hermes Complex
(past calendar year)
J. Christopher Donahue*
Birth Date: April 11, 1949
President and Director
Indefinite Term
Began serving: December 1986 		Principal Occupations: Principal Executive Officer and President of certain of the Funds in the Federated Hermes Complex; Director or Trustee of the Funds in the Federated Hermes Complex; President, Chief Executive Officer and Director, Federated Hermes, Inc.; Chairman and Trustee, Federated Investment Management Company; Trustee, Federated Investment Counseling; Chairman and Director, Federated Global Investment Management Corp.; Chairman and Trustee, Federated Equity Management Company of Pennsylvania; Trustee, Federated Shareholder Services Company; Director, Federated Services Company.
Previous Positions: President, Federated Investment Counseling; President and Chief Executive Officer, Federated Investment Management Company, Federated Global Investment Management Corp. and Passport
Research, Ltd.; Chairman, Passport Research, Ltd. 		$0 $0
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Name
Birth Date
Positions Held with Fund
Date Service Began 		Principal Occupation(s) for Past Five Years,
Other Directorships Held and Previous Position(s) 		Aggregate
Compensation
From Fund
(past fiscal year) 		Total Compensation
From Fund and
Federated Hermes Complex
(past calendar year)
Thomas R. Donahue*
Birth Date: October 20, 1958
Director
Indefinite Term
Began serving: May 2016 		Principal Occupations: Director or Trustee of certain funds in the Federated Hermes Complex; Chief Financial Officer, Treasurer, Vice President and Assistant Secretary, Federated Hermes, Inc.; Chairman and Trustee, Federated Administrative Services; Chairman and Director, Federated Administrative Services, Inc.; Trustee and Treasurer, Federated Advisory Services Company; Director or Trustee and Treasurer, Federated Equity Management Company of Pennsylvania, Federated Global Investment Management Corp., Federated Investment Counseling, and Federated Investment Management Company; Director, MDTA LLC; Director, Executive Vice President and Assistant Secretary, Federated Securities Corp.; Director or Trustee and Chairman, Federated Services Company and Federated Shareholder Services Company; and Director and President, FII Holdings, Inc.
Previous Positions: Director, Federated Hermes, Inc.; Assistant Secretary, Federated Investment Management Company, Federated Global Investment Management Company and Passport Research, LTD; Treasurer, Passport Research, LTD; Executive Vice President, Federated Securities Corp.; and Treasurer, FII Holdings, Inc. 		$0 $0
* Family relationships and reasons for “interested” status: J. Christopher Donahue and Thomas R. Donahue are brothers. Both are “interested” due to their beneficial ownership of shares of Federated Hermes, Inc. and the positions they hold with Federated Hermes, Inc. and its subsidiaries.
Independent Directors Background, Qualifications and Compensation
Name
Birth Date
Positions Held with Fund
Date Service Began 		Principal Occupation(s) and Other Directorships Held for
Past Five Years, Previous Position(s) and Qualifications 		Aggregate
Compensation
From Fund
(past fiscal year) 		Total Compensation
From Fund and
Federated Hermes Fund Complex
(past calendar year)
John T. Collins
Birth Date: January 24, 1947
Director
Indefinite Term
Began serving: October 2013 		Principal Occupations: Director or Trustee of the Federated Hermes Complex; formerly, Chairman and CEO, The Collins Group, Inc. (a private equity firm) (Retired).
Other Directorships Held: Director, Chairman of the Compensation Committee, KLX Energy Services Holdings, Inc. (oilfield services); former Director of KLX Corp (aerospace).
Qualifications: Mr. Collins has served in several business and financial management roles and directorship positions throughout his career. Mr. Collins previously served as Chairman and CEO of The Collins Group, Inc. (a private equity firm) and as a Director of KLX Corp. Mr. Collins serves as Chairman Emeriti, Bentley University. Mr. Collins previously served as Director and Audit Committee Member, Bank of America Corp.; Director, FleetBoston Financial Corp.; and Director, Beth Israel Deaconess Medical Center (Harvard University Affiliate Hospital). 		$1,254.29 $286,000
G. Thomas Hough
Birth Date: February 28, 1955
Director

Indefinite Term
Began serving: August 2015 		Principal Occupations: Director or Trustee, Chair of the Audit Committee of the Federated Hermes Complex; formerly, Vice Chair, Ernst & Young LLP (public accounting firm) (Retired).
Other Directorships Held: Director, Chair of the Audit Committee, Equifax, Inc.; Director, Member of the Audit Committee, Haverty Furniture Companies, Inc.; formerly, Director, Member of Governance and Compensation Committees, Publix Super Markets, Inc.
Qualifications: Mr. Hough has served in accounting, business management and directorship positions throughout his career. Mr. Hough most recently held the position of Americas Vice Chair of Assurance with Ernst & Young LLP (public accounting firm). Mr. Hough serves on the President's Cabinet and Business School Board of Visitors for the University of Alabama. Mr. Hough previously served on the Business School Board of Visitors for Wake Forest University, and he previously served as an Executive Committee member of the United States Golf Association. 		$1,291.83 $286,000
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Name
Birth Date
Positions Held with Fund
Date Service Began 		Principal Occupation(s) and Other Directorships Held for
Past Five Years, Previous Position(s) and Qualifications 		Aggregate
Compensation
From Fund
(past fiscal year) 		Total Compensation
From Fund and
Federated Hermes Fund Complex
(past calendar year)
Maureen Lally-Green
Birth Date: July 5, 1949
Director

Indefinite Term
Began serving: August 2009 		Principal Occupations: Director or Trustee of the Federated Hermes Complex; Adjunct Professor of Law, Duquesne University School of Law; formerly, Dean of the Duquesne University School of Law and Professor of Law and Interim Dean of the Duquesne University School of Law; formerly, Associate General Secretary and Director, Office of Church Relations, Diocese of Pittsburgh.
Other Directorships Held: Director, CNX Resources Corporation (formerly known as CONSOL Energy Inc.).
Qualifications: Judge Lally-Green has served in various legal and business roles and directorship positions throughout her career. Judge Lally-Green previously held the position of Dean of the School of Law of Duquesne University (as well as Interim Dean). Judge Lally-Green previously served as a member of the Superior Court of Pennsylvania and as a Professor of Law, Duquesne University School of Law. Judge Lally-Green was appointed by the Supreme Court of Pennsylvania to serve on the Supreme Court's Board of Continuing Judicial Education and the Supreme Court's Appellate Court Procedural Rules Committee. Judge Lally-Green also currently holds the positions on not for profit or for profit boards of directors as follows: Director and Chair, UPMC Mercy Hospital; Director and Vice Chair, Our Campaign for the Church Alive!, Inc.; Regent, Saint Vincent Seminary; Member, Pennsylvania State Board of Education (public); Director, Catholic Charities, Pittsburgh; and Director CNX Resources Corporation (formerly known as CONSOL Energy Inc.). Judge Lally-Green has held the positions of: Director, Auberle; Director, Epilepsy Foundation of Western and Central Pennsylvania; Director, Ireland Institute of Pittsburgh; Director, Saint Thomas More Society; Director and Chair, Catholic High Schools of the Diocese of Pittsburgh, Inc.; Director, Pennsylvania Bar Institute; Director, Saint Vincent College; and Director and Chair, North Catholic High School, Inc. 		$1,254.29 $286,000
Charles F. Mansfield, Jr.
Birth Date: April 10, 1945
Director

Indefinite Term
Began serving: June 1999 		Principal Occupations: Director or Trustee of the Federated Hermes Complex; Management Consultant and Author.
Other Directorships Held: None.
Qualifications: Mr. Mansfield has served as a Marine Corps officer and in several banking, business management, educational roles and directorship positions throughout his long career. He remains active as a Management Consultant and Author. 		$1,140.26 $260,000
Thomas M. O'Neill
Birth Date: June 14, 1951
Director

Indefinite Term
Began serving: August 2006 		Principal Occupations: Director or Trustee, of the Federated Hermes Complex; Sole Proprietor, Navigator Management Company (investment and strategic consulting).
Other Directorships Held: None.
Qualifications: Mr. O'Neill has served in several business, mutual fund and financial management roles and directorship positions throughout his career. Mr. O'Neill serves as Director, Medicines for Humanity and Director, The Golisano Children's Museum of Naples, Florida. Mr. O'Neill previously served as Chief Executive Officer and President, Managing Director and Chief Investment Officer, Fleet Investment Advisors; President and Chief Executive Officer, Aeltus Investment Management, Inc.; General Partner, Hellman, Jordan Management Co., Boston, MA; Chief Investment Officer, The Putnam Companies, Boston, MA; Credit Analyst and Lending Officer, Fleet Bank; Director and Consultant, EZE Castle Software (investment order management software); and Director, Midway Pacific (lumber). 		$1,370.26 $321,000
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Name
Birth Date
Positions Held with Fund
Date Service Began 		Principal Occupation(s) and Other Directorships Held for
Past Five Years, Previous Position(s) and Qualifications 		Aggregate
Compensation
From Fund
(past fiscal year) 		Total Compensation
From Fund and
Federated Hermes Fund Complex
(past calendar year)
P. Jerome Richey
Birth Date: February 23, 1949
Director
Indefinite Term
Began serving: October 2013 		Principal Occupations: Director or Trustee of the Federated Hermes Complex; Management Consultant; Retired; formerly, Senior Vice Chancellor and Chief Legal Officer, University of Pittsburgh and Executive Vice President and Chief Legal Officer, CNX Resources Corporation (formerly known as CONSOL Energy Inc.).
Other Directorships Held: None.
Qualifications: Mr. Richey has served in several business and legal management roles and directorship positions throughout his career. Mr. Richey most recently held the positions of Senior Vice Chancellor and Chief Legal Officer, University of Pittsburgh. Mr. Richey previously served as Chairman of the Board, Epilepsy Foundation of Western Pennsylvania and Chairman of the Board, World Affairs Council of Pittsburgh. Mr. Richey previously served as Chief Legal Officer and Executive Vice President, CNX Resources Corporation (formerly known as CONSOL Energy Inc.) and Board Member, Ethics Counsel and Shareholder, Buchanan Ingersoll & Rooney PC (a law firm). 		$1,140.26 $260,000
John S. Walsh
Birth Date: November 28, 1957
Director

Indefinite Term
Began serving: January 1999 		Principal Occupations: Director or Trustee and Chair of the Board of Directors or Trustees, of the Federated Hermes Complex; President and Director, Heat Wagon, Inc. (manufacturer of construction temporary heaters); President and Director, Manufacturers Products, Inc. (distributor of portable construction heaters); President, Portable Heater Parts, a division of Manufacturers Products, Inc.
Other Directorships Held: None.
Qualifications: Mr. Walsh has served in several business management roles and directorship positions throughout his career. Mr. Walsh previously served as Vice President, Walsh & Kelly, Inc. (paving contractors). 		$1,513.05 $345,000
OFFICERS*
Name
Birth Date
Positions Held with Fund
Date Service Began 		Principal Occupation(s) and Previous Position(s)
Lori A. Hensler
Birth Date: January 6, 1967
Treasurer
Officer since: April 2013 		Principal Occupations: Principal Financial Officer and Treasurer of the Federated Hermes Complex; Senior Vice President, Federated Administrative Services; Financial and Operations Principal for Federated Securities Corp. and Edgewood Services, Inc.; and Assistant Treasurer, Federated Investors Trust Company. Ms. Hensler has received the Certified Public Accountant designation.
Previous Positions: Controller of Federated Hermes, Inc.; Senior Vice President and Assistant Treasurer, Federated Investors Management Company; Treasurer, Federated Investors Trust Company; Assistant Treasurer, Federated Administrative Services, Federated Administrative Services, Inc., Federated Securities Corp., Edgewood Services, Inc., Federated Advisory Services Company, Federated Equity Management Company of Pennsylvania, Federated Global Investment Management Corp., Federated Investment Counseling, Federated Investment Management Company, Passport Research, Ltd. and Federated MDTA, LLC; Financial and Operations Principal for Federated Securities Corp., Edgewood Services, Inc. and Southpointe Distribution Services, Inc.
Peter J. Germain
Birth Date: September 3, 1959
CHIEF LEGAL OFFICER, SECRETARY and EXECUTIVE VICE PRESIDENT
Officer since: January 2005 		Principal Occupations: Mr. Germain is Chief Legal Officer, Secretary and Executive Vice President of the Federated Hermes Complex. He is General Counsel, Chief Legal Officer, Secretary and Executive Vice President, Federated Hermes, Inc.; Trustee and Senior Vice President, Federated Investors Management Company; Trustee and President, Federated Administrative Services; Director and President, Federated Administrative Services, Inc.; Director and Vice President, Federated Securities Corp.; Director and Secretary, Federated Private Asset Management, Inc.; Secretary, Federated Shareholder Services Company; and Secretary, Retirement Plan Service Company of America. Mr. Germain joined Federated Hermes in 1984 and is a member of the Pennsylvania Bar Association.
Previous Positions: Deputy General Counsel, Special Counsel, Managing Director of Mutual Fund Services, Federated Hermes, Inc.; Senior Vice President, Federated Services Company; and Senior Corporate Counsel, Federated Hermes, Inc.
Stephen Van Meter
Birth Date: June 5, 1975
CHIEF COMPLIANCE OFFICER AND SENIOR VICE PRESIDENT
Officer since: July 2015 		Principal Occupations: Senior Vice President and Chief Compliance Officer of the Federated Hermes Complex; Vice President and Chief Compliance Officer of Federated Hermes, Inc. and Chief Compliance Officer of certain of its subsidiaries. Mr. Van Meter joined Federated Hermes, Inc. in October 2011. He holds FINRA licenses under Series 3, 7, 24 and 66.
Previous Positions: Mr. Van Meter previously held the position of Compliance Operating Officer, Federated Hermes, Inc. Prior to joining Federated Hermes, Inc., Mr. Van Meter served at the United States Securities and Exchange Commission in the positions of Senior Counsel, Office of Chief Counsel, Division of Investment Management and Senior Counsel, Division of Enforcement.
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Name
Birth Date
Positions Held with Fund
Date Service Began 		Principal Occupation(s) and Previous Position(s)
Robert J. Ostrowski
Birth Date: April 26, 1963
Chief Investment Officer
Officer since: February 2010 		Principal Occupations: Robert J. Ostrowski joined Federated Hermes in 1987 as an Investment Analyst and became a Portfolio Manager in 1990. He was named Chief Investment Officer of Federated Hermes' taxable fixed-income products in 2004 and also serves as a Senior Portfolio Manager. Mr. Ostrowski became an Executive Vice President of the Fund's Adviser in 2009 and served as a Senior Vice President of the Fund's Adviser from 1997 to 2009. Mr. Ostrowski has received the Chartered Financial Analyst designation. He received his M.S. in Industrial Administration from Carnegie Mellon University.
* Officers do not receive any compensation from the Fund.
In addition, the Fund has appointed an Anti-Money Laundering Compliance Officer.
DIRECTOR/TRUSTEE EMERITUS PROGRAM
The Board has created a position of Director/Trustee Emeritus, whereby an incumbent Director/Trustee who has attained the age of 75 and completed a minimum of five years of service as a director/trustee, may, in the sole discretion of the Committee of Independent Directors/Trustees (“Committee”), be recommended to the full Board of Directors/Trustees of the Fund to serve as Director/Trustee Emeritus.
A Director/Trustee Emeritus that has been approved as such receives an annual fee in an amount equal to a percent of the annual base compensation paid to a Director/Trustee. In the case of a Director/Trustee Emeritus who had previously served at least five years but less than 10 years as a Director/Trustee, the percent will be 10%. In the case of a Director/Trustee Emeritus who had previously served at least 10 years as a Director/Trustee, the percent will be 20%. The Director/Trustee Emeritus will be reimbursed for any expenses incurred in connection with their service, including expenses of travel and lodging incurred in attendance at Board meetings. Director/Trustee Emeritus will continue to receive relevant materials concerning the Funds, will be expected to attend at least one regularly scheduled quarterly meeting of the Board of Directors/Trustees each year and will be available to consult with the Committees or its representatives at reasonable times as requested by the Chairman; however, a Director/Trustee Emeritus does not have any voting rights at Board meetings and is not subject to election by shareholders of the Funds.
The Director/Trustee Emeritus will be permitted to serve in such capacity at the pleasure of the Committee, but the annual fee will cease to be paid at the end of the calendar year during which he or she has attained the age of 80 years, thereafter the position will be honorary.
The following table shows the fees paid to each Director/Trustee Emeritus for the Fund's most recently ended fiscal year and the portion of that fee paid by the Fund or Trust.1
EMERITUS Directors and Compensation
Director/Trustee Emeritus
Compensation
From Fund
(past fiscal year) 		Total
Compensation
Paid to
Director/Trustee
Emeritus1
Peter E. Madden $56.12 $52,000.00
1 The fees paid to a Director/Trustee are allocated among the funds that were in existence at the time the Director/Trustee elected Emeritus status, based on each fund's net assets at that time.
BOARD LEADERSHIP STRUCTURE
As required under the terms of certain regulatory settlements, the Chairman of the Board is not an interested person of the Fund and neither the Chairman, nor any firm with which the Chairman is affiliated, has a prior relationship with Federated Hermes or its affiliates or (other than his position as a Director) with the Fund.
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Committees of the Board
Board
Committee 		Committee
Members 		Committee Functions Meetings Held
During Last
Fiscal Year
Executive J. Christopher Donahue
John T. Collins
John S. Walsh 		In between meetings of the full Board, the Executive Committee generally may exercise all the powers of the full Board in the management and direction of the business and conduct of the affairs of the Corporation in such manner as the Executive Committee shall deem to be in the best interests of the Corporation. However, the Executive Committee cannot elect or remove Board members, increase or decrease the number of Directors, elect or remove any Officer, declare dividends, issue shares or recommend to shareholders any action requiring shareholder approval. One
Audit John T. Collins
G. Thomas Hough
Maureen Lally-Green
Thomas M. O'Neill
The purposes of the Audit Committee are to oversee the accounting and financial reporting process of the Fund, the Fund's internal control over financial reporting and the quality, integrity and independent audit of the Fund's financial statements. The Committee also oversees or assists the Board with the oversight of compliance with legal requirements relating to those matters, approves the engagement and reviews the qualifications, independence and performance of the Fund's independent registered public accounting firm, acts as a liaison between the independent registered public accounting firm and the Board and reviews the Fund's internal audit function. Seven
Nominating John T. Collins
G. Thomas Hough
Maureen Lally-Green
Charles F. Mansfield, Jr.
Thomas M. O'Neill
P. Jerome Richey
John S. Walsh
The Nominating Committee, whose members consist of all Independent Directors, selects and nominates persons for election to the Fund's Board when vacancies occur. The Committee will consider candidates recommended by shareholders, Independent Directors, officers or employees of any of the Fund's agents or service providers and counsel to the Fund. Any shareholder who desires to have an individual considered for nomination by the Committee must submit a recommendation in writing to the Secretary of the Fund, at the Fund's address appearing on the back cover of this SAI. The recommendation should include the name and address of both the shareholder and the candidate and detailed information concerning the candidate's qualifications and experience. In identifying and evaluating candidates for consideration, the Committee shall consider such factors as it deems appropriate. Those factors will ordinarily include: integrity, intelligence, collegiality, judgment, diversity, skill, business and other experience, qualification as an “Independent Director,” the existence of material relationships which may create the appearance of a lack of independence, financial or accounting knowledge and experience and dedication and willingness to devote the time and attention necessary to fulfill Board responsibilities. One
BOARD'S ROLE IN RISK OVERSIGHT
The Board's role in overseeing the Fund's general risks includes receiving performance reports for the Fund and risk management reports from Federated Hermes' Chief Risk Officer at each regular Board meeting. The Chief Risk Officer is responsible for enterprise risk management at Federated Hermes, which includes risk management committees for investment management and for investor services. The Board also receives regular reports from the Fund's Chief Compliance Officer regarding significant compliance risks.
On behalf of the Board, the Audit Committee plays a key role overseeing the Fund's financial reporting and valuation risks. The Audit Committee meets regularly with the Fund's Principal Financial Officer and outside auditors, as well as with Federated Hermes' Chief Audit Executive to discuss financial reporting and audit issues, including risks relating to financial controls.
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Board Ownership Of Shares In The Fund And In The Federated Hermes Family Of Investment Companies As Of December 31, 2019
Interested Board
Member Name 		Dollar Range of
Shares Owned in
Federated Municipal Bond Fund, Inc. 		Aggregate
Dollar Range of
Shares Owned in
Federated Hermes Family of
Investment Companies
J. Christopher Donahue None Over $100,000
Thomas R. Donahue None Over $100,000
Independent Board
Member Name 		   
John T. Collins None Over $100,000
G. Thomas Hough None Over $100,000
Maureen Lally-Green None Over $100,000
Charles F. Mansfield, Jr. $1-$10,000 $50,001-$100,000
Thomas M. O'Neill None Over $100,000
P. Jerome Richey None Over $100,000
John S. Walsh None Over $100,000
Investment Adviser
The Adviser conducts investment research and makes investment decisions for the Fund.
The Adviser is a wholly owned subsidiary of Federated Hermes.
The Adviser shall not be liable to the Fund or any Fund shareholder for any losses that may be sustained in the purchase, holding, or sale of any security or for anything done or omitted by it, except acts or omissions involving willful misfeasance, bad faith, gross negligence or reckless disregard of the duties imposed upon it by its contract with the Fund.
In December 2017, Federated Investors, Inc., now Federated Hermes, became a signatory to the Principles for Responsible Investment (PRI). The PRI is an investor initiative in partnership with the United Nations Environment Programme Finance Initiative and the United Nations Global Compact. Commitments made as a signatory to the PRI are not legally binding, but are voluntary and aspirational. They include efforts, where consistent with our fiduciary responsibilities, to incorporate environmental, social and corporate governance (ESG) issues into investment analysis and investment decision making, to be active owners and incorporate ESG issues into our ownership policies and practices, to seek appropriate disclosure on ESG issues by the entities in which we invest, to promote acceptance and implementation of the PRI within the investment industry, to enhance our effectiveness in implementing the PRI, and to report on our activities and progress towards implementing the PRI. Being a signatory to the PRI does not obligate Federated Hermes to take, or not take, any particular action as it relates to investment decisions or other activities.
In July 2018, Federated Investors, Inc., now Federated Hermes, acquired a 60% interest in Hermes Fund Managers Limited (Hermes), which operates as Hermes Investment Management, a pioneer of integrated ESG investing. Hermes' experience with ESG issues contributes to Federated Hermes' understanding of material risks and opportunities these issues may present.
Portfolio Manager Information
As a general matter, certain conflicts of interest may arise in connection with a portfolio manager's management of a fund's investments, on the one hand, and the investments of other funds/pooled investment vehicles or accounts (collectively, including the Fund, as applicable, “accounts”) for which the portfolio manager is responsible, on the other. For example, it is possible that the various accounts managed could have different investment strategies that, at times, might conflict with one another to the possible detriment of the Fund. Alternatively, to the extent that the same investment opportunities might be desirable for more than one account, possible conflicts could arise in determining how to allocate them. Other potential conflicts can include, for example, conflicts created by specific portfolio manager compensation arrangements (including, for example, the allocation or weighting given to the performance of the Fund or other accounts or activities for which the portfolio manager is responsible in calculating the portfolio manager's compensation), and conflicts relating to selection of brokers or dealers to execute Fund portfolio trades and/or specific uses of commissions from Fund portfolio trades (for example, research or “soft dollars”). The Adviser has adopted policies and procedures and has structured the portfolio managers' compensation in a manner reasonably designed to safeguard the Fund from being negatively affected as a result of any such potential conflicts.
The following information about the Fund's Portfolio Manager is provided as of the end of the Fund's most recently completed fiscal year unless otherwise indicated.
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J. Scott Albrecht, Portfolio Manager
Types of Accounts Managed
by J. Scott Albrecht 		Total Number of Additional Accounts
Managed/Total Assets*
Registered Investment Companies 3/$397.6 million
Other Pooled Investment Vehicles 0/$0
Other Accounts 0/$0
* None of the Accounts has an advisory fee that is based on the performance of the account.
Dollar value range of shares owned in the Fund: None.
J. Scott Albrecht is paid a fixed base salary and a variable annual incentive. Base salary is determined within a market competitive position-specific salary range, based on the portfolio manager's experience and performance. The annual incentive amount is determined based primarily on Investment Product Performance (IPP) and may also include a discretionary component based on a variety of factors deemed relevant, such as financial measures and performance and may be paid entirely in cash, or in a combination of cash and restricted stock of Federated Hermes, Inc. (“Federated Hermes”). The total combined annual incentive opportunity is intended to be competitive in the market for this portfolio manager role.
IPP is measured on a rolling one, three and five calendar year pre-tax gross total return basis versus the Fund's benchmark (i.e., S&P Municipal Bond 3-Year Plus Index) and versus the Fund's designated peer group of comparable accounts. Performance periods are adjusted if a portfolio manager has been managing an account for less than five years; accounts with less than one year of performance history under a portfolio manager may be excluded.
As noted above, Mr. Albrecht is also the portfolio manager for other accounts in addition to the Fund. Such other accounts may have different benchmarks and performance measures. The allocation or weighting given to the performance of the Fund or other accounts or activities for which Mr. Albrecht is responsible when his compensation is calculated may be equal or can vary.
In addition, Mr. Albrecht serves on one or more Investment Teams that establish guidelines on various performance drivers (e.g., currency, duration, sector, volatility and/or yield curve) for taxable, fixed-income funds. A portion of the IPP score is based on Federated Hermes' senior management's assessment of team contributions.
For purposes of calculating the annual incentive amount, each account managed by the portfolio manager currently is categorized into one IPP group (which may be adjusted periodically). Within each performance measurement period and IPP group, IPP currently is calculated on the basis of an assigned weighting to each account managed or activity engaged in by the portfolio manager and included in the IPP group. At the account level, the weighting assigned to the Fund is greater than or equal to the weighting assigned to other accounts or activities used to determine IPP (but can be adjusted periodically). A portion of the bonus tied to the IPP score may be adjusted based on management's assessment of overall contributions to account performance and any other factors as deemed relevant.
Any individual allocations from the discretionary pool may be determined, by executive management on a discretionary basis using various factors, such as, for example, on a product, strategy or asset class basis, and considering overall contributions and any other factors deemed relevant (and may be adjusted periodically).
Richard J. Gallo, Portfolio Manager
Types of Accounts Managed
by Richard J. Gallo 		Total Number of Additional Accounts
Managed/Total Assets*
Registered Investment Companies 8/$10.5 billion
Other Pooled Investment Vehicles 0/$0
Other Accounts 3/$5.5 million
* None of the Accounts has an advisory fee that is based on the performance of the account.
Dollar value range of shares owned in the Fund: None.
Richard J. Gallo is paid a fixed base salary and a variable annual incentive. Base salary is determined within a market competitive position-specific salary range, based on the portfolio manager's experience and performance. The annual incentive amount is determined based primarily on Investment Product Performance (IPP) and may also include a discretionary component based on a variety of factors deemed relevant, such as financial measures and performance and may be paid entirely in cash, or in a combination of cash and restricted stock of Federated Hermes, Inc. (“Federated Hermes”). The total combined annual incentive opportunity is intended to be competitive in the market for this portfolio manager role.
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IPP is measured on a rolling one, three and five calendar year pre-tax gross total return basis versus the Fund's benchmark (i.e., S&P Municipal Bond 3-Year Plus Index) and versus the Fund's designated peer group of comparable accounts. Performance periods are adjusted if a portfolio manager has been managing an account for less than five years; accounts with less than one year of performance history under a portfolio manager may be excluded.
As noted above, Mr. Gallo is also the portfolio manager for other accounts in addition to the Fund. Such other accounts may have different benchmarks and performance measures. The allocation or weighting given to the performance of the Fund or other accounts or activities for which Mr. Gallo is responsible when his compensation is calculated may be equal or can vary.
In addition, Mr. Gallo has oversight responsibility for other portfolios that he does not personally manage and serves on one or more Investment Teams that establish guidelines on various performance drivers (e.g., currency, duration, sector, volatility and/or yield curve) for taxable, fixed-income funds. A portion of the IPP score is based on Federated Hermes' senior management's assessment of team contributions.
For purposes of calculating the annual incentive amount, each account managed by the portfolio manager currently is categorized into one of two IPP groups (which may be adjusted periodically). Within each performance measurement period and IPP group, IPP currently is calculated on the basis of an assigned weighting to each account managed or activity engaged in by the portfolio manager and included in the IPP group. At the account level, the weighting assigned to the Fund is lesser than or equal to the weighting assigned to other accounts or activities used to determine IPP (but can be adjusted periodically). A portion of the bonus tied to the IPP score may be adjusted based on management's assessment of overall contributions to account performance and any other factors as deemed relevant.
Any individual allocations from the discretionary pool may be determined, by executive management on a discretionary basis using various factors, such as, for example, on a product, strategy or asset class basis, and considering overall contributions and any other factors deemed relevant (and may be adjusted periodically).
Services Agreement
Federated Advisory Services Company, an affiliate of the Adviser, provides certain support services to the Adviser. The fee for these services is paid by the Adviser and not by the Fund.
Other Related Services
Affiliates of the Adviser may, from time to time, provide certain electronic equipment and software to institutional customers in order to facilitate the purchase of Fund Shares offered by the Distributor.
Code Of Ethics Restrictions On Personal Trading
As required by Rule 17j-1 of the Investment Company Act of 1940 and Rule 204A-1 under the Investment Advisers Act (as applicable), the Fund, its Adviser and its Distributor have adopted codes of ethics. These codes govern securities trading activities of investment personnel, Fund Directors and certain other employees. Although they do permit these people to trade in securities, including those that the Fund could buy, as well as Shares of the Fund, they also contain significant safeguards designed to protect the Fund and its shareholders from abuses in this area, such as requirements to obtain prior approval for, and to report, particular transactions.
Voting Proxies On Fund Portfolio Securities
The Board has delegated to the Adviser authority to vote proxies on the securities held in the Fund's portfolio. The Board has also approved the Adviser's policies and procedures for voting the proxies, which are described below.
Proxy Voting Policies
As an investment adviser with a fiduciary duty to the Fund and its shareholders, the Adviser's general policy is to cast proxy votes in favor of management proposals and shareholder proposals that the Adviser anticipates will enhance the long-term value of the securities being voted in a manner that is consistent with the investment objectives of the Fund. Generally, this will mean voting for proposals that the Adviser believes will improve the management of a company, increase the rights or preferences of the voted securities, or increase the chance that a premium offer would be made for the company or for the voted securities. This approach to voting proxy proposals will be referred to hereafter as the “General Policy.”
The Adviser generally votes consistently on the same matter when securities of an issuer are held by multiple client portfolios. However, the Adviser may vote differently if a particular client's investment objectives differ from those of other clients or if a client explicitly instructs the Adviser to vote differently.
The following examples illustrate how the General Policy may apply to the most common management proposals and shareholder proposals. However, whether the Adviser supports or opposes a proposal will always depend on a thorough understanding of the Fund's investment objectives and the specific circumstances described in the proxy statement and other available information.
29
On matters related to the board of directors, generally the Adviser will vote to elect nominees to the board in uncontested elections except in certain circumstances, such as where the director: (1) had not attended at least 75% of the board meetings during the previous year; (2) serves as the company's chief financial officer; (3) has become overboarded (more than five boards for retired executives and more than two boards for CEOs); (4) is the chair of the nominating or governance committee when the roles of chairman of the board and CEO are combined and there is no lead independent director; (5) served on the compensation committee during a period in which compensation appears excessive relative to performance and peers; or (6) served on a board that did not implement a shareholder proposal that the Adviser supported and received more than 50% shareholder support the previous year. In addition, the Adviser will generally vote in favor of; (7) a full slate of directors, where the directors are elected as a group and not individually, unless more than half of the nominees are not independent; (8) shareholder proposals to declassify the board of directors; (9) shareholder proposals to require a majority voting standard in the election of directors; (10) shareholder proposals to separate the roles of chairman of the board and CEO; and (11) a proposal to require a company's audit committee to be comprised entirely of independent directors.
On other matters of corporate governance, generally the Adviser will vote in favor of: (1) proposals to grant shareholders the right to call a special meeting if owners of at least 25% of the outstanding stock agree; (2) a proposal to require independent tabulation of proxies and/or confidential voting of shareholders; (3) a proposal to ratify the board's selection of auditors, unless: (a) compensation for non-audit services exceeded 50% of the total compensation received from the company; or (b) the previous auditor was dismissed because of a disagreement with the company; (4) a proposal to repeal a shareholder rights plan (also known as a “poison pill”) and against the adoption of such a plan, unless the plan is designed to facilitate, rather than prevent, unsolicited offers for the company; (5) shareholder proposals to eliminate supermajority requirements in company bylaws; and (6) shareholder proposals calling for “Proxy Access,” that is, a bylaw change allowing shareholders owning at least 3% of the outstanding common stock for at least three years to nominate candidates for election to the board of directors. The Adviser will generally withhold support from shareholder proposals to grant shareholders the right to act by written consent.
On environmental and social matters, generally the Adviser will vote in favor of shareholder proposals calling for: (1) enhanced disclosure of the company's approach to mitigating climate change and other environmental risks; (2) managing risks related to manufacturing or selling of guns and opioids; (3) monitoring gender pay equity; and (4) achieving and maintaining diversity on the board of directors. Generally, the Adviser will not support shareholder proposals calling for limitations on political activity by the company, including political contributions, lobbying and memberships in trade associations.
On matters of capital structure, generally the Adviser will vote against a proposal to authorize or issue shares that are senior in priority or voting rights to the voted securities, and in favor of a proposal to: (1) reduce the amount of shares authorized for issuance (subject to adequate provisions for outstanding convertible securities, options, warrants, rights and other existing obligations to issue shares); and (2) grant authorities to issue shares with and without pre-emptive rights unless the size of the authorities would threaten to unreasonably dilute existing shareholders. The Adviser will decide how to vote on proposals to authorize a stock repurchase or special dividend program on a case-by-case basis.
On matters relating to management compensation, generally the Adviser will vote in favor of stock incentive plans (including plans for directors) that align the recipients of stock incentives with the interests of shareholders, without creating undue dilution, and against: (1) the advisory vote on executive compensation plans (“Say On Pay”) when the plan has failed to align executive compensation with corporate performance; (2) the advisory vote on the frequency of the Say On Pay vote when the frequency is other than annual; (3) proposals that would permit the amendment or replacement of outstanding stock incentives having more favorable terms (e.g., lower purchase prices or easier vesting requirements); and (4) executive compensation plans that do not disclose the maximum amounts of compensation that may be awarded or the criteria for determining awards.
On matters relating to corporate transactions, the Adviser will generally vote in favor of mergers, acquisitions and sales of assets if the Adviser's analysis of the proposed business strategy and the transaction price would have a positive impact on the total return for shareholders.
If a shareholders meeting is contested, that is, shareholders are presented with a set of director candidates nominated by company management and a set of director candidates nominated by a dissident shareholder, the Adviser will study the proposed business strategies of both groups and vote in a way that maximizes expected total return for the Fund.
In addition, the Adviser will not vote any proxy if it determines that the consequences or costs of voting outweigh the potential benefit of voting. For example, if a foreign market requires shareholders voting proxies to retain the voted shares until the meeting date (thereby rendering the shares “illiquid” for some period of time), the Adviser will not vote proxies for such shares. In addition, the Adviser is not obligated to incur any expense to send a representative to a shareholder meeting or to translate proxy materials into English.
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To the extent that the Adviser is permitted to loan securities, the Adviser does not have the right to vote on securities while they are on loan. However, the Adviser will take all reasonable steps to recall shares prior to the record date when the meeting raises issues that the Adviser believes materially affect shareholder value, including, but not limited to, excessive compensation, mergers and acquisitions, contested elections and weak oversight by the audit committee. However, there can be no assurance that the Adviser will have sufficient notice of such matters to be able to terminate the loan in time to vote thereon.
If proxies are not delivered in a timely or otherwise appropriate basis, the Adviser may not be able to vote a particular proxy.
For an Adviser that employs a quantitative investment strategy for certain funds or accounts that does not make use of qualitative research (“Non-Qualitative Accounts”), the Adviser may not have the kind of research to make decisions about how to vote proxies for them. Therefore, the Adviser will vote the proxies of these Non-Qualitative Accounts as follows: (a) in accordance with the Standard Voting Instructions (defined below); (b) if the Adviser is casting votes for the same proxy on behalf of a regular qualitative account and a Non-Qualitative Account, the Non-Qualitative Account would vote in the same manner as the regular qualitative account; (c) if neither of the first two conditions apply, as the proxy voting service is recommending; and (d) if none of the previous conditions apply, as recommended by the Proxy Voting Committee.
Proxy Voting Procedures
The Adviser has established a Proxy Voting Committee (“Proxy Committee”), to exercise all voting discretion granted to the Adviser by the Board in accordance with the proxy voting policies. To assist it in carrying out the day-to-day operations related to proxy voting, the Proxy Committee has created the Proxy Voting Management Group (PVMG). The day-to-day operations related to proxy voting are carried out by the Proxy Voting Operations Team (PVOT) and overseen by the PVMG. Besides voting the proxies, this work includes engaging with investee companies on corporate governance matters, managing the proxy voting service, soliciting voting recommendations from the Adviser's investment professionals, bringing voting recommendations to the Proxy Committee for approval, filing with regulatory agencies any required proxy voting reports, providing proxy voting reports to clients and investment companies as they are requested from time to time, and keeping the Proxy Committee informed of any issues related to corporate governance and proxy voting.
The Adviser has compiled a list of specific voting instructions based on the General Policy (the “Standard Voting Instructions”). The Standard Voting Instructions and any modifications to them are approved by the Proxy Committee. The Standard Voting Instructions sometimes call for an investment professional to review the ballot question and provide a voting recommendation to the Proxy Committee (a “case-by-case vote”). The foregoing notwithstanding, the Proxy Committee always has the authority to determine a final voting decision.
The Adviser has hired a proxy voting service to perform various proxy voting related administrative services such as ballot reconciliation, vote processing, and recordkeeping functions. The Proxy Committee has supplied the proxy voting services with the Standard Voting Instructions. The Proxy Committee retains the right to modify the Standard Voting Instructions at any time or to vote contrary to them at any time in order to cast proxy votes in a manner that the Proxy Committee believes is in accordance with the General Policy. The proxy voting service may vote any proxy as directed in the Standard Voting Instructions without further direction from the Proxy Committee. However, if the Standard Voting Instructions require case-by-case handling for a proposal, the PVOT will work with the investment professionals and the proxy voting service to develop a voting recommendation for the Proxy Committee and to communicate the Proxy Committee's final voting decision to the proxy voting service. Further, if the Standard Voting Instructions require the PVOT to analyze a ballot question and make the final voting decision, the PVOT will report such votes to the Proxy Committee on a quarterly basis for review.
Conflicts of Interest
The Adviser has adopted procedures to address situations where a matter on which a proxy is sought may present a potential conflict between the interests of the Fund (and its shareholders) and those of the Adviser or Distributor. This may occur where a significant business relationship exists between the Adviser (or its affiliates) and a company involved with a proxy vote.
A company that is a proponent, opponent, or the subject of a proxy vote, and which to the knowledge of the Proxy Committee has this type of significant business relationship, is referred to below as an “Interested Company.”
The Adviser has implemented the following procedures in order to avoid concerns that the conflicting interests of the Adviser or its affiliates have influenced proxy votes. Any employee of the Adviser or its affiliates who is contacted by an Interested Company regarding proxies to be voted by the Adviser must refer the Interested Company to a member of the Proxy Committee, and must inform the Interested Company that the Proxy Committee has exclusive authority to determine how the proxy will be voted. Any Proxy Committee member contacted by an Interested Company must report it to the full Proxy Committee and provide a written summary of the communication. This requirement includes engagement meetings with investee companies and does not include communications with proxy solicitation firms. Under no circumstances will the Proxy Committee or any member of the Proxy Committee make a commitment to an Interested Company regarding the voting of proxies or disclose to an Interested Company how the Proxy Committee has directed such proxies to be voted. If the Standard Voting Instructions already provide specific
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direction on the proposal in question, the Proxy Committee shall not alter or amend such directions. If the Standard Voting Instructions require the Proxy Committee to provide further direction, the Proxy Committee shall do so in accordance with the proxy voting policies, without regard for the interests of the Adviser with respect to the Interested Company. If the Proxy Committee provides any direction as to the voting of proxies relating to a proposal affecting an Interested Company, it must disclose annually to the Fund's Board information regarding: the significant business relationship; any material communication with the Interested Company; the matter(s) voted on; and how, and why, the Adviser voted as it did. In certain circumstances it may be appropriate for the Adviser to vote in the same proportion as all other shareholders, so as to not affect the outcome beyond helping to establish a quorum at the shareholders' meeting. This is referred to as “proportional voting.” If the Fund owns shares of another Federated Hermes mutual fund, generally the Adviser will proportionally vote the client's proxies for that fund or seek direction from the Board or the client on how the proposal should be voted. If the Fund owns shares of an unaffiliated mutual fund, the Adviser may proportionally vote the Fund's proxies for that fund depending on the size of the position. If the Fund owns shares of an unaffiliated exchange-traded fund, the Adviser will proportionally vote the Fund's proxies for that fund.
Downstream Affiliates
If the Proxy Committee gives further direction, or seeks to vote contrary to the Standard Voting Instructions, for a proxy relating to a portfolio company in which the Fund owns more than 10% of the portfolio company's outstanding voting securities at the time of the vote (“Downstream Affiliate”), the Proxy Committee must first receive guidance from counsel to the Proxy Committee as to whether any relationship between the Adviser and the portfolio company, other than such ownership of the portfolio company's securities, gives rise to an actual conflict of interest. If counsel determines that an actual conflict exists, the Proxy Committee must address any such conflict with the executive committee of the board of directors or trustees of any investment company client prior to taking any action on the proxy at issue.
Proxy Advisers' Conflicts of Interest
Proxy advisory firms may have significant business relationships with the subjects of their research and voting recommendations. For example, a proxy voting service client may be a public company with an upcoming shareholders' meeting and the proxy voting service has published a research report with voting recommendations. In another example, a proxy voting service board member also sits on the board of a public company for which the proxy voting service will write a research report. These and similar situations give rise to an actual or apparent conflict of interest.
In order to avoid concerns that the conflicting interests of the engaged proxy voting service have influenced proxy voting recommendations, the Adviser will take the following steps:
■  A due diligence team made up of employees of the Adviser and/or its affiliates will meet with the proxy voting service on an annual basis and determine through a review of their policies and procedures and through inquiry that the proxy voting service has established a system of internal controls that provide reasonable assurance that their voting recommendations are not influenced by the business relationships they have with the subjects of their research.
■  Whenever the standard voting guidelines call for voting a proposal in accordance with the proxy voting service recommendation and the proxy voting service has disclosed that they have a conflict of interest with respect to that issuer, the PVOT will take the following steps: (a) the PVOT will obtain a copy of the research report and recommendations published by another proxy voting service for that issuer; (b) the Director of Proxy Voting, or his designee, will review both the engaged proxy voting service research report and the research report of the other proxy voting service and determine what vote will be cast. The PVOT will report all proxies voted in this manner to the Proxy Committee on a quarterly basis. Alternatively, the PVOT may seek direction from the Committee on how the proposal shall be voted.
Proxy Voting Report
A report on “Form N-PX” of how the Fund voted any proxies during the most recent 12-month period ended June 30 is available via the Proxy Voting Record (Form N-PX) link associated with the Fund and share class name at FederatedInvestors.com/FundInformation. Form N-PX filings are also available at the SEC's website at sec.gov.
Portfolio Holdings Information
Information concerning the Fund's portfolio holdings is available via the link to the Fund and share class name at FederatedInvestors.com/FundInformation. A complete listing of the Fund's portfolio holdings as of the end of each calendar quarter is posted on the website 30 days (or the next business day) after the end of the quarter and remains posted for six months thereafter. Summary portfolio composition information as of the close of each month is posted on the website 15 days (or the next business day) after month-end and remains posted until replaced by the information for the succeeding month. The summary portfolio composition information may include: identification of the Fund's top 10 holdings, portfolio profile statistics (such as weighted average effective maturity and weighted average effective duration) and a percentage breakdown of the portfolio by credit quality and sector.
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You may also access portfolio information as of the end of the Fund's fiscal quarters via the link to the Fund and share class name at FederatedInvestors.com. The Fund's Annual Shareholder Report and Semi-Annual Shareholder Report contain complete listings of the Fund's portfolio holdings as of the end of the Fund's second and fourth fiscal quarters. Fiscal quarter information is made available on the website within 70 days after the end of the fiscal quarter. This information is also available in reports filed with the SEC at the SEC's website at sec.gov.
Each fiscal quarter, the Fund will file with the SEC a complete schedule of its monthly portfolio holdings on “Form N-PORT.” The Fund's holdings as of the end of the third month of every fiscal quarter, as reported on Form N-PORT, will be publicly available on the SEC's website at sec.gov within 60 days of the end of the fiscal quarter upon filing. You may also access this information via the link to the Fund and share class name at FederatedInvestors.com.
The disclosure policy of the Fund and the Adviser prohibits the disclosure of portfolio holdings information to any investor or intermediary before the same information is made available to other investors. Employees of the Adviser or its affiliates who have access to nonpublic information concerning the Fund's portfolio holdings are prohibited from trading securities on the basis of this information. Such persons must report all personal securities trades and obtain pre-clearance for all personal securities trades other than mutual fund shares.
Firms that provide administrative, custody, financial, accounting, legal or other services to the Fund may receive nonpublic information about Fund portfolio holdings for purposes relating to their services. The Fund may also provide portfolio holdings information to publications that rate, rank or otherwise categorize investment companies. Traders or portfolio managers may provide “interest” lists to facilitate portfolio trading if the list reflects only that subset of the portfolio for which the trader or portfolio manager is seeking market interest. A list of service providers, publications and other third parties who may receive nonpublic portfolio holdings information appears in the Appendix to this SAI.
The furnishing of nonpublic portfolio holdings information to any third party (other than authorized governmental or regulatory personnel) requires the prior approval of the President of the Adviser and of the Chief Compliance Officer of the Fund. The President of the Adviser and the Chief Compliance Officer will approve the furnishing of nonpublic portfolio holdings information to a third party only if they consider the furnishing of such information to be in the best interests of the Fund and its shareholders. In that regard, and to address possible conflicts between the interests of Fund shareholders and those of the Adviser and its affiliates, the following procedures apply. No consideration may be received by the Fund, the Adviser, any affiliate of the Adviser or any of their employees in connection with the disclosure of portfolio holdings information. Before information is furnished, the third party must sign a written agreement that it will safeguard the confidentiality of the information, will use it only for the purposes for which it is furnished and will not use it in connection with the trading of any security. Persons approved to receive nonpublic portfolio holdings information will receive it as often as necessary for the purpose for which it is provided. Such information may be furnished as frequently as daily and often with no time lag between the date of the information and the date it is furnished. The Board receives and reviews annually a list of the persons who receive nonpublic portfolio holdings information and the purposes for which it is furnished.
Brokerage Transactions And Investment Allocation
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. Fixed-income securities are generally traded in an over-the-counter market on a net basis (i.e., without commission) through dealers acting as principal or in transactions directly with the issuer. Dealers derive an undisclosed amount of compensation by offering securities at a higher price than they bid for them. Some fixed-income securities may have only one primary market maker. The Adviser seeks to use dealers it believes to be actively and effectively trading the security being purchased or sold, but may not always obtain the lowest purchase price or highest sale price with respect to a security. The Adviser makes decisions on portfolio transactions and selects brokers and dealers subject to review by the Fund's Board.
Investment decisions for the Fund are made independently from those of other accounts managed by the Adviser and accounts managed by affiliates of the Adviser. When the Fund and one or more of those accounts invests in, or disposes of, the same security, available investments or opportunities for sales will be allocated among the Fund and the account(s) in a manner believed by the Adviser to be equitable. While the coordination and ability to participate in volume transactions may benefit the Fund, it is possible that this procedure could adversely impact the price paid or received and/or the position obtained or disposed of by the Fund. Investment decisions, and trading, for certain separately managed or wrap-fee accounts, and other accounts, of the Adviser and/or certain investment adviser affiliates of the Adviser, are generally made, and conducted, independently from the Fund. It is possible that such independent trading activity could adversely impact the prices paid or received and/or positions obtained or disposed of by the Fund.
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For the fiscal year ended March 31, 2020, the Fund's Adviser directed brokerage transactions to certain brokers in connection with the Adviser's receipt of research services. The total amount of these transactions was $2,084,770 for which the Fund paid $1,586 in brokerage commissions.
Administrator
Federated Administrative Services (FAS), a subsidiary of Federated Hermes, provides administrative personnel and services, including certain legal, compliance, recordkeeping and financial reporting services (“Administrative Services”), necessary for the operation of the Fund. FAS provides Administrative Services for a fee based upon the rates set forth below paid on the average daily net assets of the Fund. For purposes of determining the appropriate rate breakpoint, “Investment Complex” is defined as all of the Federated Hermes funds subject to a fee under the Administrative Services Agreement with FAS. FAS is also entitled to reimbursement for certain out-of-pocket expenses incurred in providing Administrative Services to the Fund.
Administrative Services
Fee Rate 		Average Daily Net Assets
of the Investment Complex
0.100 of 1% on assets up to $50 billion
0.075 of 1% on assets over $50 billion
Custodian
The Bank of New York Mellon, New York, New York, is custodian for the securities and cash of the Fund.
Transfer Agent And Dividend Disbursing Agent
State Street Bank and Trust Company, the Fund's registered transfer agent, maintains all necessary shareholder records.
Independent Registered Public Accounting Firm
The independent registered public accounting firm for the Fund, Ernst & Young LLP, conducts its audits in accordance with the standards of the Public Company Accounting Oversight Board (United States), which require it to plan and perform its audits to provide reasonable assurance about whether the Fund's financial statements and financial highlights are free of material misstatement.
Fees Paid by the Fund for Services
For the Year Ended March 31 2020 2019 2018
Advisory Fee Earned $1,480,931 $1,539,495 $1,644,512
Net Administrative Fee $261,116 $264,583 $280,595
Net 12b-1 Fee:      
Class B Shares $22,028 $29,421 $30,996
Class C Shares $66,702 $81,753 $119,633
Net Shareholder Services Fee:      
Class A Shares $688,912 $705,043 $696,080
Class B Shares $7,344 $9,807 $10,332
Class C Shares $22,234 $27,251 $39,877
Class F Shares $69,956 $63,890 $63,184
Fees are allocated among classes based on their pro rata share of Fund assets, except for marketing (“Rule 12b-1”) fees and shareholder services fees, which are borne only by the applicable class of Shares.
Securities Lending Activities
The services provided to the Fund by Citibank, N.A. as securities lending agent may include the following: selecting securities previously identified by the Fund as available for loan to be loaned; locating borrowers identified in the securities lending agency agreement; negotiating loan terms; monitoring daily the value of the loaned securities and collateral; requiring additional collateral as necessary; marking to market non-cash collateral; instructing the Fund's custodian with respect to the transfer of loaned securities; indemnifying the Fund in the event of a borrower default; and arranging for return of loaned securities to the Fund at loan termination.
The Fund did not participate in any securities lending activities during the Fund's most recently completed fiscal year.
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Gross income from securities lending activities $00.00
Fees and/or compensation for securities lending activities and related services  
Fees paid to securities lending agent from a revenue split $00.00
Fees paid for any cash collateral management service (including fees deducted from a pooled cash collateral reinvestment vehicle) that are not included in the revenue split —
Administrative fees not included in revenue split —
Indemnification fee not included in revenue split —
Rebate (paid to borrower) $00.00
Other fees not included in revenue split (specify) —
Aggregate fees/compensation for securities lending activities $00.00
Net income from securities lending activities $00.00
Financial Information
Investment Ratings
Standard & Poor's Rating Services (S&P) LONG-TERM Issue RATINGS
Issue credit ratings are based, in varying degrees, on S&P's analysis of the following considerations: the likelihood of payment–capacity and willingness of the obligor to meet its financial commitment on an obligation in accordance with the terms of the obligation; the nature of and provisions of the obligation; and the protection afforded by, and relative position of, the obligation in the event of bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws affecting creditors' rights.
AAA—An obligation rated “AAA” has the highest rating assigned by S&P. The obligor's capacity to meet its financial commitment on the obligation is extremely strong.
AA—An obligation rated “AA” differs from the highest rated obligations only to a small degree. The obligor's capacity to meet its financial commitment on the obligation is very strong.
A—An obligation rated “A” is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. However, the obligor's capacity to meet its financial commitment on the obligation is still strong.
BBB—An obligation rated “BBB” exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.
Obligations rated “BB,” “B,” “CCC,” “CC,” and “C” are regarded as having significant speculative characteristics. “BB” indicates the least degree of speculation and “C” the highest. While such obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions.
BB—An obligation rated “BB” is less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation.
B—An obligation rated “B” is more vulnerable to nonpayment than obligations rated “BB,” but the obligor currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial, or economic conditions will likely impair the obligor's capacity or willingness to meet its financial commitment on the obligation.
CCC—An obligation rated “CCC” is currently vulnerable to nonpayment, and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation.
CC—An obligation rated “CC” is currently highly vulnerable to nonpayment.
C—A “C” rating is assigned to obligations that are currently highly vulnerable to nonpayment, obligations that have payment arrearages allowed by the terms of the documents, or obligations of an issuer that is the subject of a bankruptcy petition or similar action which have not experienced a payment default. Among others, the “C” rating may be assigned to subordinated debt, preferred stock or other obligations on which cash payments have been suspended in accordance with the instrument's terms or when preferred stock is the subject of a distressed exchange offer, whereby some or all of the issue is either repurchased for an amount of cash or replaced by other instruments having a total value that is less than par.
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D—An obligation rated “D” is in payment default. The “D” rating category is used when payments on an obligation are not made on the date due, unless S&P believes that such payments will be made within five business days, irrespective of any grace period. The “D” rating also will be used upon the filing of a bankruptcy petition or the taking of similar action if payments on an obligation are jeopardized. An obligation's rating is lowered to “D” upon completion of a distressed exchange offer, whereby some or all of the issue is either repurchased for an amount of cash or replaced by other instruments having a total value that is less than par.
The ratings from “AA” to “CCC” may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories.
S&P Rating Outlook
An S& P rating outlook assesses the potential direction of a long-term credit rating over the intermediate term (typically six months to two years). In determining a rating outlook, consideration is given to any changes in the economic and/or fundamental business conditions.
Positive—Positive means that a rating may be raised.
Negative—Negative means that a rating may be lowered.
Stable—Stable means that a rating is not likely to change.
Developing—Developing means a rating may be raised or lowered.
N.M.—N.M. means not meaningful.
S&P Short-Term Issue RATINGS
Short-term ratings are generally assigned to those obligations considered short-term in the relevant market. In the United States, for example, that means obligations with an original maturity of no more than 365 days–including commercial paper.
A-1—A short-term obligation rated “A-1” is rated in the highest category by S&P. The obligor's capacity to meet its financial commitment on the obligation is strong. Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligor's capacity to meet its financial commitment on these obligations is extremely strong.
A-2—A short-term obligation rated “A-2” is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor's capacity to meet its financial commitment on the obligation is satisfactory.
A-3—A short-term obligation rated “A-3” exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.
B—A short-term obligation rated “B” is regarded as vulnerable and has significant speculative characteristics. The obligor currently has the capacity to meet its financial commitments; however, it faces major ongoing uncertainties which could lead to the obligor's inadequate capacity to meet its financial commitments.
C—A short-term obligation rated “C” is currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation.
D—A short-term obligation rated “D” is in payment default. The “D” rating category is used when payments on an obligation are not made on the date due, unless S&P believes that such payments will be made within any stated grace period. However, any stated grace period longer than five business days will be treated as five business days. The “D” rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized.
MOODY'S Investor Services, Inc. (MOODY's) LONG-TERM RATINGS
Moody's long-term ratings are assigned to issuers or obligations with an original maturity of one year or more and reflect both on the likelihood of a default on contractually promised payments and the expected financial loss suffered in the event of default.
Aaa—Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level of credit risk.
Aa—Obligations rated Aa are judged to be of high quality and are subject to very low credit risk.
A—Obligations rated A are judged to be upper-medium grade and are subject to low credit risk.
Baa—Obligations rated Baa are judged to be medium-grade and subject to moderate credit risk and as such may possess certain speculative characteristics.
Ba—Obligations rated Ba are judged to be speculative and are subject to substantial credit risk.
B—Obligations rated B are considered speculative and are subject to high credit risk.
Caa—Obligations rated Caa are judged to be speculative of poor standing and are subject to very high credit risk.
Ca—Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest.
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C—Obligations rated C are the lowest rated and are typically in default, with little prospect for recovery of principal or interest.
Moody's appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aaa through Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category.
MOODY'S Short-Term RATINGS
Moody's short-term ratings are assigned to obligations with an original maturity of thirteen months or less and reflect the likelihood of a default on contractually promised payments.
P-1—Issuers (or supporting institutions) rated Prime-1 have a superior ability to repay short-term debt obligations.
P-2—Issuers (or supporting institutions) rated Prime-2 have a strong ability to repay short-term debt obligations.
P-3—Issuers (or supporting institutions) rated Prime-3 have an acceptable ability to repay short-term obligations.
NP—Issuers (or supporting institutions) rated Not Prime do not fall within any of the Prime rating categories.
FITCH, INC. (Fitch) LONG-TERM Debt RATINGs
Fitch long-term ratings report Fitch's opinion on an entity's relative vulnerability to default on financial obligations. The “threshold” default risk addressed by the rating is generally that of the financial obligations whose non-payment would best reflect the uncured failure of that entity. As such, Fitch long-term ratings also address relative vulnerability to bankruptcy, administrative receivership or similar concepts, although the agency recognizes that issuers may also make pre-emptive and therefore voluntary use of such mechanisms.
AAA: Highest Credit Quality—“AAA” ratings denote the lowest expectation of default risk. They are assigned only in cases of exceptionally strong capacity for payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events.
AA: Very High Credit Quality—“AA” ratings denote expectations of very low default risk. They indicate very strong capacity for payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events.
A: High Credit Quality—“A” ratings denote expectations of low default risk. The capacity for payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to adverse business or economic conditions than is the case for higher ratings.
BBB: Good Credit Quality—“BBB” ratings indicate that expectations of default risk are currently low. The capacity for payment of financial commitments is considered adequate but adverse business or economic conditions are more likely to impair this capacity.
BB: Speculative—“BB” ratings indicate an elevated vulnerability to default risk, particularly in the event of adverse changes in business or economic conditions over time; however, business or financial flexibility exists which supports the servicing of financial commitments.
B: Highly Speculative—“B” ratings indicate that material default risk is present, but a limited margin of safety remains. Financial commitments are currently being met; however, capacity for continued payment is vulnerable to deterioration in the business and economic environment.
CCC: Substantial Credit Risk—Default is a real possibility.
CC: Very High Levels of Credit Risk—Default of some kind appears probable.
C: Exceptionally High Levels of Credit Risk—Default is imminent or inevitable, or the issuer is in standstill. Conditions that are indicative of a “C” category rating for an issuer include: (a) the issuer has entered into a grace or cure period following non-payment of a material financial obligation; (b) the issuer has entered into a temporary negotiated waiver or standstill agreement following a payment default on a material financial obligation; or (c) Fitch otherwise believes a condition of “RD” or “D” to be imminent or inevitable, including through the formal announcement of a distressed debt exchange.
RD: Restricted Default—“RD” ratings indicate an issuer that in Fitch's opinion has experienced an uncured payment default on a bond, loan or other material financial obligation but which has not entered into bankruptcy filings, administration, receivership, liquidation or other formal winding-up procedure, and which has not otherwise ceased operating. This would include: (a) the selective payment default on a specific class or currency of debt; (b) the uncured expiry of any applicable grace period, cure period or default forbearance period following a payment default on a bank loan, capital markets security or other material financial obligation; (c) the extension of multiple waivers or forbearance periods upon a payment default on one or more material financial obligations, either in series or in parallel; or (d) execution of a distressed debt exchange on one or more material financial obligations.
D: Default—“D” ratings indicate an issuer that in Fitch's opinion has entered into bankruptcy filings, administration, receivership, liquidation or other formal winding-up procedure, or which has otherwise ceased business.
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Default ratings are not assigned prospectively to entities or their obligations; within this context, non-payment on an instrument that contains a deferral feature or grace period will generally not be considered a default until after the expiration of the deferral or grace period, unless a default is otherwise driven by bankruptcy or other similar circumstance, or by a distressed debt exchange.
“Imminent” default typically refers to the occasion where a payment default has been intimated by the issuer, and is all but inevitable. This may, for example, be where an issuer has missed a scheduled payment, but (as is typical) has a grace period during which it may cure the payment default. Another alternative would be where an issuer has formally announced a distressed debt exchange, but the date of the exchange still lies several days or weeks in the immediate future.
In all cases, the assignment of a default rating reflects the agency's opinion as to the most appropriate rating category consistent with the rest of its universe of ratings, and may differ from the definition of default under the terms of an issuer's financial obligations or local commercial practice.
FITCH SHORT-TERM DEBT RATINGs
A Fitch short-term issuer or obligation rating is based in all cases on the short-term vulnerability to default of the rated entity or security stream and relates to the capacity to meet financial obligations in accordance with the documentation governing the relevant obligation. Short-Term Ratings are assigned to obligations whose initial maturity is viewed as “short term” based on market convention. Typically, this means up to 13 months for corporate, sovereign, and structured obligations, and up to 36 months for obligations in U.S. public finance markets.
F-1: Highest Short-Term Credit Quality—Indicates the strongest intrinsic capacity for timely payment of financial commitments; may have an added “+” to denote any exceptionally strong credit feature.
F-2: Good Short-Term Credit Quality—Good intrinsic capacity for timely payment of financial commitments.
F-3: Fair Short-Term Credit Quality—The intrinsic capacity for timely payment of financial commitments is adequate.
B: Speculative Short-Term Credit Quality—Minimal capacity for timely payment of financial commitments, plus heightened vulnerability to near term adverse changes in financial and economic conditions.
C: High Short-Term Default Risk—Default is a real possibility.
RD: Restricted Default—Indicates an entity that has defaulted on one or more of its financial commitments, although it continues to meet other financial obligations. Applicable to entity ratings only.
D: Default—Indicates a broad-based default event for an entity, or the default of a short-term obligation.
A.M. BEST Company, Inc. (a.m. best) LONG-TERM DEBT and Preferred Stock RATINGS
A Best's long-term debt rating is Best's independent opinion of an issuer/entity's ability to meet its ongoing financial obligations to security holders when due.
aaa: Exceptional—Assigned to issues where the issuer has an exceptional ability to meet the terms of the obligation.
aa: Very Strong—Assigned to issues where the issuer has a very strong ability to meet the terms of the obligation.
a: Strong—Assigned to issues where the issuer has a strong ability to meet the terms of the obligation.
bbb: Adequate—Assigned to issues where the issuer has an adequate ability to meet the terms of the obligation; however, the issue is more susceptible to changes in economic or other conditions.
bb: Speculative—Assigned to issues where the issuer has speculative credit characteristics, generally due to a modest margin or principal and interest payment protection and vulnerability to economic changes.
b: Very Speculative—Assigned to issues where the issuer has very speculative credit characteristics, generally due to a modest margin of principal and interest payment protection and extreme vulnerability to economic changes.
ccc, cc, c: Extremely Speculative—Assigned to issues where the issuer has extremely speculative credit characteristics, generally due to a minimal margin of principal and interest payment protection and/or limited ability to withstand adverse changes in economic or other conditions.
d: In Default—Assigned to issues in default on payment of principal, interest or other terms and conditions, or when a bankruptcy petition or similar action has been filed.
Ratings from “aa” to “ccc” may be enhanced with a “+” (plus) or “-” (minus) to indicate whether credit quality is near the top or bottom of a category.
A.M. BEST SHORT-TERM DEBT RATINGS
A Best's short-term debt rating is Best's opinion of an issuer/entity's ability to meet its financial obligations having original maturities of generally less than one year, such as commercial paper.
AMB-1+ Strongest—Assigned to issues where the issuer has the strongest ability to repay short-term debt obligations.
AMB-1 Outstanding—Assigned to issues where the issuer has an outstanding ability to repay short-term debt obligations.
AMB-2 Satisfactory—Assigned to issues where the issuer has a satisfactory ability to repay short-term debt obligations.
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AMB-3 Adequate—Assigned to issues where the issuer has an adequate ability to repay short-term debt obligations; however, adverse economic conditions likely will reduce the issuer's capacity to meet its financial commitments.
AMB-4 Speculative—Assigned to issues where the issuer has speculative credit characteristics and is vulnerable to adverse economic or other external changes, which could have a marked impact on the company's ability to meet its financial commitments.
d: In Default—Assigned to issues in default on payment of principal, interest or other terms and conditions, or when a bankruptcy petition or similar action has been filed.
A.M. Best Rating Modifiers
Both long- and short-term credit ratings can be assigned a modifier.
u—Indicates the rating may change in the near term, typically within six months. Generally is event-driven, with positive, negative or developing implications.
pd—Indicates ratings assigned to a company that chose not to participate in A.M. Best's interactive rating process. (Discontinued in 2010).
i—Indicates rating assigned is indicative.
A.M. BEST RATING OUTLOOK
A.M. Best Credit Ratings are assigned a Rating Outlook that indicates the potential direction of a credit rating over an intermediate term, generally defined as the next 12 to 36 months.
Positive—Indicates possible ratings upgrade due to favorable financial/market trends relative to the current trading level.
Negative—Indicates possible ratings downgrade due to unfavorable financial/market trends relative to the current trading level.
Stable—Indicates low likelihood of rating change due to stable financial/market trends.
Not Rated
Certain nationally recognized statistical rating organizations (NRSROs) may designate certain issues as NR, meaning that the issue or obligation is not rated.
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Addresses
Federated Municipal Bond Fund, Inc.
Class A Shares
Class B Shares
Class C Shares
Class F Shares
Institutional Shares
Federated Hermes Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
Distributor
Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Investment Adviser
Federated Investment Management Company
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Custodian
The Bank of New York Mellon
One Wall Street
New York, NY 10286
Transfer Agent and Dividend Disbursing Agent
State Street Bank and Trust Company
P.O. Box 219318
Kansas City, MO 64121-9318
Independent Registered Public Accounting Firm
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116-5072
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Appendix
The following is a list of persons, other than the Adviser and its affiliates, that have been approved to receive nonpublic portfolio holdings information concerning the Federated Hermes Complex; however, certain persons below might not receive such information concerning the Fund:
CUSTODIAN(S)
The Bank of New York Mellon
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Ernst & Young LLP
LEGAL COUNSEL
Goodwin Procter LLP
K&L Gates LLP
Financial Printer(S)
Donnelley Financial Solutions
Proxy Voting Administrator
Glass Lewis & Co., LLC
SECURITY PRICING SERVICES
Bloomberg L.P.
IHS Markit (Markit North America)
ICE Data Pricing & Reference Data, LLC
JPMorgan PricingDirect
Refinitiv US Holdings Inc.
RATINGS AGENCIES
Fitch, Inc.
Moody's Investors Service, Inc.
Standard & Poor's Financial Services LLC
Other SERVICE PROVIDERS
Other types of service providers that have been approved to receive nonpublic portfolio holdings information include service providers offering, for example, trade order management systems, portfolio analytics, or performance and accounting systems, such as:
Bank of America Merrill Lynch
Bloomberg L.P.
Citibank, N.A.
Eagle Investment Systems LLC
Electra Information Systems
FactSet Research Systems Inc.
FISGlobal
Institutional Shareholder Services
Investortools, Inc.
MSCI ESG Research LLC
Sustainalytics U.S. Inc.
The Yield Book, Inc.
Wolters Kluwer N.V.
41

 

 

Prospectus
May 31, 2020
Share Class | T        
Federated Municipal Bond Fund, Inc.
A mutual fund seeking to provide for its shareholders a high level of current income which is exempt from federal regular income tax by investing at least a majority of its assets in investment-grade, tax-exempt securities.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.
IMPORTANT NOTICE TO SHAREHOLDERS
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund's shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from the Fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund or your financial intermediary electronically by contacting your financial intermediary (such as a broker-dealer or bank); other shareholders may call the Fund at 1-800-341-7400, Option 4.
You may elect to receive all future reports in paper free of charge. You can inform the Fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by contacting your financial intermediary (such as a broker-dealer or bank); other shareholders may call the Fund at 1-800-341-7400, Option 4. Your election to receive reports in paper will apply to all funds held with the Fund complex or your financial intermediary.
Not FDIC Insured ■ May Lose Value ■ No Bank Guarantee
Fund Summary Information
Federated Municipal Bond Fund, Inc. (the “Fund”)
RISK/RETURN SUMMARY: INVESTMENT OBJECTIVE
The Fund's investment objective is to provide for its shareholders a high level of current income which is exempt from federal regular income tax.
RISK/RETURN SUMMARY: FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold the Fund's Class T Shares (T).
Shareholder Fees (fees paid directly from your investment)
T
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price)
2.50%
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable)
None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions) (as a percentage of offering price)
None
Redemption Fee (as a percentage of amount redeemed, if applicable)
None
Exchange Fee
None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
 
Management Fee
0.45%
Distribution (12b-1) Fee
None
Other Expenses1
0.50%
Total Annual Fund Operating Expenses
0.95%
Fee Waivers and/or Expense Reimbursements2
(0.11)%
Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements
0.84%
1 Because the Fund's T Shares are new, “Other Expenses” are based on estimated amounts for the current fiscal year.
2 The Adviser and certain of its affiliates, on their own initiative, have agreed to waive certain amounts of their respective fees and/or reimburse expenses. Total annual fund operating expenses (excluding acquired fund fees and expenses, interest expense, extraordinary expenses and proxy-related expenses paid by the Fund, if any) paid by the Fund's T class (after the voluntary waivers and/or reimbursements) will not exceed 0.83% (the “Fee Limit”) up to but not including the later of (the “Termination Date”): (a) June 1, 2021; or (b) the date of the Fund's next effective Prospectus. While the Adviser and its affiliates currently do not anticipate terminating or increasing these arrangements prior to the Termination Date, these arrangements may only be terminated or the Fee Limit increased prior to the Termination Date with the agreement of the Fund's Board of Directors.
Example
This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 for the time periods indicated and then redeem all of your Shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that operating expenses are as shown in the table above and remain the same. Although your actual costs and returns may be higher or lower, based on these assumptions your costs would be:
1 Year $345
3 Years $545
5 Years $762
10 Years $1,387
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund Shares are held in a taxable account. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 9% of the average value of its portfolio.
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RISK/RETURN SUMMARY: INVESTMENTS, RISKS and PERFORMANCE
What are the Fund's Main Investment Strategies?
The Fund's investment objective is to provide for its shareholders a high level of current income which is exempt from federal regular income tax. The Fund pursues its objective by investing its assets so that normally distributions of annual interest income are exempt from federal regular income tax. The Fund's investment adviser (“Adviser”) may also invest the Fund's assets in securities whose interest (while exempt from the federal regular income tax) may be subject to (or may be a specific preference item for purposes of) the federal alternative minimum income tax (AMT) for individuals.
The Adviser may lengthen or shorten duration from time to time based on its interest rate outlook, but the Fund has no set duration parameters. Duration measures the price sensitivity of a fixed-income security to changes in interest rates.
The Fund does not limit itself to securities of a particular maturity range.
The Fund also will invest at least a majority of its assets in securities rated investment grade (or unrated securities of comparable quality), and may purchase securities rated below investment grade (or unrated securities of comparable quality), which are also known as junk bonds, up to 49% of its assets. Investment-grade securities are securities that receive investment-grade ratings (i.e., generally ratings in the first, second, third or fourth highest rating category) by a nationally recognized statistical rating organization (NRSRO) or unrated securities of comparable quality. For example, securities rated AAA, AA, A or BBB (including modifiers, sub-categories or gradations) by Standard & Poor's, an NRSRO, would be rated in the first, second, third or fourth ratings category, respectively. Securities rated below investment grade (or noninvestment-grade securities) are securities that do not receive investment-grade ratings (i.e., generally ratings below one of the four highest rating categories) by an NRSRO or unrated securities of comparable quality. For example, securities rated B or BB (including modifiers, sub-categories or gradations) by Standard & Poor's, an NRSRO, would be noninvestment-grade securities. The presence of a ratings modifier, sub-category, or gradation (for example, a (+) or (-)) is intended to show relative standing within the major rating categories and does not affect the security credit rating for purposes of the Fund's investment parameters. The Fund does not have a specific minimum quality rating.
The types of securities in which the Fund may principally invest include tax-exempt securities, such as the following types: general obligation bonds, special revenue bonds, private activity bonds, tax increment financing bonds, municipal leases, zero-coupon securities, inverse floaters, municipal mortgage-backed securities, planned amortization classes, variable rate demand instruments, municipal notes and municipal auction rate securities. Certain of the tax-exempt securities in which the Fund invests may be subject to credit enhancement. The Fund also may principally invest in derivative contracts (such as, for example, futures contracts, options contracts and swap contracts) and hybrid instruments to implement its investment strategies. For example, the Fund may use derivative contracts or hybrid instruments in an attempt to benefit from changes in the value of the underlying instrument(s), to gain exposure to the municipal bond sector, to increase or decrease the effective duration of the Fund's portfolio or to hedge against potential losses. There can be no assurance that the Fund's use of derivative contracts or hybrid instruments will work as intended. Derivative investments made by the Fund are included within the Fund's 80% policy (as described below) and are calculated at market value.
The Fund also may invest in certain securities or other investments as described herein (such as market discount bonds, credit default swaps and other derivative transactions) that will likely cause the Fund to realize a limited amount of ordinary income or short-term capital gains (which are treated as ordinary income for federal income tax purposes).
The Fund will normally invest its assets so that at least 80% of the income that it distributes will be exempt from federal regular income tax. This policy may not be changed without shareholder approval.
What are the Main (or Principal) Risks of Investing in the Fund?
All mutual funds take investment risks. Therefore, it is possible to lose money by investing in the Fund. The primary factors that may reduce the Fund's returns include:
■  Tax-Exempt Securities Risk. The amount of public information available about tax-exempt securities is generally less than for corporate equities or bonds. The secondary market for tax-exempt securities also tends to be less well-developed and less liquid than many other securities markets, which may limit the Fund's ability to sell its tax-exempt securities at attractive prices. Special factors, such as legislative changes, and state and local economic and business developments, may adversely affect the yield and/or value of the Fund's investments in tax-exempt securities. Tax-exempt issuers can and have defaulted on obligations, been downgraded or commenced insolvency proceedings. Like other issuers and securities, the likelihood that the credit risk associated with such issuers and such securities will increase is greater during times of economic stress and financial instability.
■  Call Risk. The Fund's performance may be adversely affected by the possibility that an issuer of a security held by the Fund may redeem the security prior to maturity at a price below or above its current market value.
2
■  Credit Enhancement Risk. The securities in which the Fund invests may be subject to credit enhancement (for example, guarantees, letters of credit or bond insurance). If the credit quality of the credit enhancement provider (for example, a bank or bond insurer) is downgraded, the rating on a security credit enhanced by such credit enhancement provider also may be downgraded. Having multiple securities credit enhanced by the same enhancement provider will increase the adverse effects on the Fund that are likely to result from a downgrading of, or a default by, such an enhancement provider. Adverse developments in the banking or bond insurance industries also may negatively affect the Fund.
■  Leverage Risk. Leverage risk is created when an investment, which includes, for example, a derivative contract, exposes the Fund to a level of risk that exceeds the amount invested. Changes in the value of such an investment magnify the Fund's risk of loss and potential for gain. Investments can have these same results if their returns are based on a multiple of a specified index, security or other benchmark.
■  Liquidity Risk. Certain securities in which the Fund invests may be less readily marketable and may be subject to greater fluctuation in price than other securities. These features may make it more difficult to sell or buy a security at a favorable price or time. Noninvestment-grade securities generally have less liquidity than investment-grade securities. Liquidity risk also refers to the possibility that the Fund may not be able to sell a security or close out a derivative contract when it wants to. Over-the-counter derivative contracts generally carry greater liquidity risk than exchange-traded contracts.
■  Prepayment and Extension Risk. When homeowners prepay their mortgages in response to lower interest rates, the Fund will be required to reinvest the proceeds at the lower interest rates available. Also, when interest rates fall, the price of municipal mortgage-backed securities may not rise to as great an extent as that of other fixed-income securities. When interest rates rise, homeowners are less likely to prepay their mortgages. A decreased rate of prepayments lengthens the expected maturity of a mortgage-backed security, and the price of mortgage-backed securities may decrease more than the price of other fixed income securities when interest rates rise.
■  Risk of Investing in Derivative Contracts and Hybrid Instruments. Derivative contracts and hybrid instruments involve risks different from, or possibly greater than, risks associated with investing directly in securities and other traditional investments. Specific risk issues related to the use of such contracts and instruments include valuation and tax issues, increased potential for losses and/or costs to the Fund, and a potential reduction in gains to the Fund. Each of these issues is described in greater detail in this Prospectus. Derivative contracts and hybrid instruments may also involve other risks described in this Prospectus, such as interest rate, credit, liquidity and leverage risks.
■  Risk Associated with Noninvestment-Grade Securities. Securities rated below investment-grade may be subject to greater interest rate, credit and liquidity risks than investment-grade securities. These securities are considered speculative with respect to the issuer's ability to pay interest and repay principal.
■  Risk Related to the Economy. The value of the Fund's portfolio may decline in tandem with a drop in the overall value of the markets in which the Fund invests and/or other markets. Economic, political and financial conditions, industry or economic trends and developments or public health risks, such as epidemics or pandemics, may, from time to time, and for varying periods of time, cause the Fund to experience volatility, illiquidity, shareholder redemptions or other potentially adverse effects. Among other investments, lower-grade bonds may be particularly sensitive to changes in the economy.
■  Sector Risk. A substantial part of the Fund's portfolio may be comprised of securities issued or credit enhanced by companies in similar businesses, or with other similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these issuers or entities.
■  Tax Risk. In order to be tax-exempt, tax-exempt securities must meet certain legal requirements. Failure to meet such requirements may cause the interest received and distributed by the Fund to shareholders to be taxable. The federal income tax treatment of payments in respect of certain derivative contracts is unclear. The Fund also may invest in market discount bonds, enter into credit default swap arrangements and other derivative transactions, and engage in other permissible activities that will likely cause the Fund to realize a limited amount of ordinary income or short-term capital gains (which are treated as ordinary income for federal income tax purposes). Consequently, for each of these reasons, the Fund may receive payments, and make distributions, that are treated as ordinary income for federal income tax purposes. Income from the Fund also may be subject to AMT.
■  Issuer Credit Risk. It is possible that interest or principal on securities will not be paid when due. Noninvestment-grade securities generally have a higher default risk than investment-grade securities. Such non-payment or default may reduce the value of the Fund's portfolio holdings, its share price and its performance.
■  Counterparty Credit Risk. A party to a transaction involving the Fund may fail to meet its obligations. This could cause the Fund to lose money or to lose the benefit of the transaction or prevent the Fund from selling or buying other securities to implement its investment strategies.
3
■  Interest Rate Risk. Prices of fixed-income securities (including tax-exempt securities) generally fall when interest rates rise. The longer the duration of a fixed-income security, the more susceptible it is to interest rate risk. Recent and potential future changes in monetary policy made by central banks and/or their governments are likely to affect the level of interest rates.
■  Technology Risk. The Adviser uses various technologies in managing the Fund, consistent with its investment objective(s) and strategy described in this Prospectus. For example, proprietary and third-party data and systems are utilized to support decision making for the Fund. Data imprecision, software or other technology malfunctions, programming inaccuracies and similar circumstances may impair the performance of these systems, which may negatively affect Fund performance.
The Shares offered by this Prospectus are not deposits or obligations of any bank, are not endorsed or guaranteed by any bank and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency.
Performance: Bar Chart and Table
Risk/Return Bar Chart
The bar chart and performance table below reflect historical performance data for the Fund. The Fund's Class T Shares (“T class”) has not yet commenced operations. The Fund currently offers five other classes of shares: Class A Shares (“A class”), Class B Shares, Class C Shares, Class F Shares and Institutional Shares The T class performance information shown below is for the Fund's A class and has not been adjusted since the T class is expected to have the same net expense ratio as the A class.
The bar chart and performance table below are intended to help you analyze the Fund's investment risks in light of its historical returns. The bar chart shows the variability of the Fund's T class total returns on a calendar year-by-year basis. The Average Annual Total Return table shows returns averaged over the stated periods, and includes comparative performance information. The Fund's performance will fluctuate, and past performance (before and after taxes) is not necessarily an indication of future results. Updated performance information for the Fund is available under the “Products” section at FederatedInvestors.com or by calling 1-800-341-7400.
  
The total returns shown in the bar chart do not reflect the payment of any sales charges or recurring shareholder account fees. If these charges or fees had been included, the returns shown would have been lower.
The Fund's T class total return for the three-month period from January 1, 2020 to March 31, 2020, was (1.37)%.
Within the periods shown in the bar chart, the Fund's T class highest quarterly return was 4.07% (quarter ended June 30, 2011). Its lowest quarterly return was (5.51)% (quarter ended December 31, 2010).
Average Annual Total Return Table
The Fund's T class has not yet commenced operations. The T class performance information shown below is for the Fund's A class as described above.
In addition to Return Before Taxes, Return After Taxes is shown for the Fund's T class to illustrate the effect of federal taxes on Fund returns. Actual after-tax returns depend on each investor's personal tax situation, and are likely to differ from those shown. After-tax returns are calculated using a standard set of assumptions. The stated returns assume the highest historical federal income and capital gains tax rates. These after-tax returns do not reflect the effect of any applicable state and local taxes. After-tax returns are not relevant to investors holding Shares through a 401(k) plan, an Individual Retirement Account or other tax-advantaged investment plan.
4
(For the Periods Ended December 31, 2019)
Share Class 1 Year 5 Years 10 Years
T:      
Return Before Taxes 3.11% 2.26% 3.64%
Return After Taxes on Distributions 2.95% 2.21% 3.61%
Return After Taxes on Distributions and Sale of Fund Shares 2.98% 2.38% 3.55%
S&P Municipal Bond Index1
(reflects no deduction for fees, expenses or taxes) 		7.26% 3.50% 4.41%
S&P Municipal Bond 3-Year Plus Index2
(reflects no deduction for fees, expenses or taxes) 		8.22% 4.00% 5.02%
Morningstar Municipal National Long Funds Average3 8.37% 3.52% 4.38%
1 The S&P Municipal Bond Index is a broad, comprehensive, market value-weighted index composed of approximately 55,000 bond issues that are exempt from U.S. federal income taxes or subject to the alternative minimum tax (AMT). Eligibility criteria for inclusion in the Main Index include, but are not limited to: the bond issuer must be a state (including the Commonwealth of Puerto Rico and U.S. territories) or a local government or a state or local government entity where interest on the bond is exempt from U.S. federal income taxes or subject to the AMT; the bond must be held by a mutual fund for which Standard & Poor's Securities Evaluations, Inc. provides prices; it must be denominated in U.S. dollars and have a minimum par amount of $2 million; and the bond must have a minimum term to maturity and/or call date greater than or equal to one calendar month. The Main Index is rebalanced monthly.
2 The S&P Municipal Bond 3-Year Plus Index consists of bonds in the Main Index that are rated at least “BBB-“ by Standard & Poor's, “Baa3” by Moody's or “BBB-“ by Fitch Ratings. All bonds must also have a minimum maturity of three years and a maximum maturity of up to, but not including, fifteen years as measured from the rebalancing date.
3 Morningstar figures represent the average of the total returns reported by all the mutual funds designated by Morningstar as falling into the respective category indicated.
FUND MANAGEMENT
The Fund's Investment Adviser is Federated Investment Management Company.
J. Scott Albrecht, CFA, Senior Portfolio Manager, has been the Fund's portfolio manager since May of 1996.
R.J. Gallo, CFA, Senior Portfolio Manager, has been the Fund's portfolio manager since July of 2017.
purchase and sale of fund shares
You may purchase or redeem Shares of the Fund on any day the New York Stock Exchange is open. Shares may not be exchanged for shares of another Federated Hermes fund. Shares may be purchased through a financial intermediary firm that has entered into a Fund selling and/or servicing agreement with the Distributor or an affiliate (“Financial Intermediary”) or directly from the Fund, by wire or by check. Please note that certain purchase restrictions may apply. Redeem Shares through a financial intermediary or directly from the Fund by telephone at 1-800-341-7400 or by mail.
The minimum investment amount for the Fund's T class is generally $1,500 for initial investments and $100 for subsequent investments. The minimum initial and subsequent investment amounts for Individual Retirement Accounts are generally $250 and $100, respectively. There is no minimum initial or subsequent investment amount for employer-sponsored retirement plans. Certain types of accounts are eligible for lower minimum investments. The minimum investment for Systematic Investment Programs is $50.
TAX INFORMATION
It is anticipated that Fund distributions will be primarily dividends that are exempt from federal regular income tax, although a portion of the Fund's dividends may not be tax-exempt. Income from the Fund also may be subject to AMT. Dividends may be subject to state and local taxes. Although the Fund does not seek to realize capital gains, the Fund may realize and distribute capital gains from time to time as a result of the Fund's normal investment activities. Any Fund distributions of capital gains are taxable at applicable capital gains rates. The Fund is generally not a suitable investment for retirement accounts.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and/or its related companies may pay the intermediary for the sale of Fund Shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary's website for more information.
5
What are the Fund's Investment Strategies?
The Fund's investment objective is to provide for its shareholders a high level of current income which is exempt from federal regular income tax. While there is no assurance that the Fund will achieve its investment objective, it endeavors to do so by following the strategies and policies described in this Prospectus. The Fund's Statement of Additional Information (SAI) provides information about the Fund's non-principal strategies.
The Fund pursues its objective by investing its assets so that normally distributions of annual interest income are exempt from federal regular income tax. The Fund's investment adviser (“Adviser”) may also invest the Fund's assets in securities whose interest (while exempt from the federal regular income tax) may be subject to (or may be a specific preference item for purposes of) the federal alternative minimum income tax (AMT) for individuals.
The Fund does not limit itself to securities of a particular maturity range.
The Fund also will invest at least a majority of its assets in securities rated investment grade (or unrated securities of comparable quality) without regard to the maturity of the securities, and may purchase securities rated below investment grade (or unrated securities of comparable quality), which are also known as junk bonds, up to 49% of its assets.
The amount of the Fund's assets invested in investment-grade, tax-exempt securities will be determined at the time when tax-exempt securities are purchased. For example, a later increase or decrease in percentage resulting from any change in value or net assets, or from a downgrade in a security's rating/quality, will not require the Fund to sell any tax-exempt security held in the Fund's portfolio.
Investment-grade securities are securities that receive investment-grade ratings (i.e., generally ratings in the first, second, third or fourth highest rating category, including modifiers, sub-categories or gradations) by a nationally recognized statistical rating organization (NRSRO) or unrated securities of comparable quality. For example, securities rated AAA, AA, A or BBB (including modifiers, sub-categories or gradations) by Standard & Poor's, an NRSRO, would be rated in the first, second, third or fourth ratings category, respectively. Securities rated below investment grade (or noninvestment-grade securities) are securities that do not receive investment-grade ratings (i.e., generally ratings below one of the four highest rating categories) by an NRSRO or unrated securities of comparable quality. For example, securities rated B or BB (including modifiers, sub-categories or gradations) by Standard & Poor's, an NRSRO, would be noninvestment-grade securities. The presence of a ratings modifier, sub-category, or gradation (for example, a (+) or (-)) is intended to show relative standing within the major rating categories and does not affect the security credit rating for purposes of the Fund's investment parameters. The Fund does not have a specific minimum quality rating.
The types of securities in which the Fund may principally invest include tax-exempt securities, such as the following types: general obligation bonds, special revenue bonds, private activity bonds, tax increment financing bonds, municipal leases, zero-coupon securities, inverse floaters, municipal mortgage-backed securities, planned amortization classes, variable rate demand instruments, municipal notes and municipal auction rate securities. The investment-grade, tax-exempt securities in which the Fund invests generally are subject to interest rate, issuer credit, counterparty credit, tax-exempt securities, liquidity, tax, leverage, call, sector, prepayment, credit enhancement and economic risks, and the derivatives contracts and hybrid instruments in which the Fund invests are subject to these risks, as well as the risks of investment in derivatives contracts and hybrid instruments, all as described in this Prospectus. The noninvestment-grade securities in which the Fund invests also are subject to interest rate, issuer credit, counterparty credit, tax-exempt securities, liquidity, tax, leverage, call, sector, prepayment, credit enhancement and economic risks, as well as the risks of investing in noninvestment-grade securities as described in this Prospectus.
The Adviser actively manages the Fund's portfolio, seeking to manage the interest rate risk and credit risk assumed by the Fund and provide enhanced levels of after-tax total return.
The Adviser manages the Fund's interest rate risk by adjusting the duration of its portfolio. The Adviser may lengthen or shorten duration from time to time based on its interest rate outlook, but the Fund has no set duration parameters. “Duration” measures the price sensitivity of a fixed-income security to changes in interest rates. The greater a portfolio's duration, the greater the potential change in the portfolio's value in response to a change in market interest rates. The Adviser will increase or reduce the Fund's portfolio duration based on its interest rate outlook. When the Adviser expects interest rates to fall, it will maintain a longer portfolio duration. When the Adviser expects interest rates to increase, it will shorten the portfolio duration. The Adviser uses hedging transactions for purposes of duration management. The Adviser considers a variety of factors in formulating its interest rate outlook, including (among others) the following:
■  current and expected U.S. economic growth;
■  current and expected interest rates and inflation;
■  the Federal Reserve's monetary policy; and
■  supply and demand factors related to the municipal market and the effect they may have on the returns offered for various bond maturities.
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The Adviser manages credit risk by performing a fundamental credit analysis on tax-exempt securities before the Fund purchases such securities. The Adviser considers various factors, including (among others) the following:
■  the economic feasibility of revenue bond financings and general purpose financings;
■  the financial condition of the issuer or guarantor; and
■  political developments that may affect credit quality.
The Adviser monitors the credit risks of all securities on an ongoing basis by reviewing, as the Adviser considers necessary or appropriate in accordance with its procedures, periodic financial data and ratings of NRSROs. The Fund's investments in noninvestment-grade securities will be more dependent on the Adviser's credit analysis than would be investment-grade securities, because noninvestment-grade securities, while generally offering higher yields, also involve greater risks. Consequently, in addition to the review process described above, the Adviser may, for example and when appropriate, visit the site that the issuer is developing with the proceeds of the offering and generally will engage in detailed discussions with the issuer regarding the offering.
The Adviser attempts to provide enhanced levels of after-tax total return. Total return consists of two components: (1) income received from the Fund's portfolio securities; and (2) changes in the market value of the Fund's portfolio securities and attendant increase or decrease in the net asset value (NAV) of Fund Shares. The Adviser seeks total return on an after-tax basis, so that it will try to maximize tax-exempt income distributions; make limited ordinary income distributions; and minimize or eliminate capital gains distributions. In seeking to increase incremental after-tax total returns, the Fund may invest in tax-exempt securities that are trading at a price less than the original issue price (or market discount bonds), enter into credit default swap arrangements and other derivative transactions, and engage in other permissible activities that will likely cause the Fund to realize a limited amount of ordinary income or short-term capital gains (which are treated as ordinary income for federal income tax purposes) and, as a result, may result in taxable distributions to shareholders.
The Adviser's ability to formulate an accurate interest rate outlook, coupled with effective management of the Fund's duration as described above, is critical to the Adviser's achievement of this component of its strategy. The Adviser will seek to further enhance after-tax total return by engaging in a relative value analysis; that is, the Adviser will assess the cost of a tax-exempt security compared with other tax-exempt securities and taxable securities such as U.S. Treasury obligations. The Adviser may also allocate investments in sectors of the tax-exempt market that offer the highest return.
The Fund may use derivative contracts and/or hybrid instruments to implement elements of its investment strategy. For example, the Fund may use derivative contracts or hybrid instruments to increase or decrease the portfolio's exposure to the investment(s) underlying the derivative or hybrid instrument in an attempt to benefit from changes in the value of the underlying investment(s) or to gain exposure to the municipal bond sector. Additionally, by way of example, the Fund may use derivative contracts in an attempt to:
■  increase or decrease the effective duration of the Fund portfolio;
■  obtain premiums from the sale of derivative contracts;
■  realize gains from trading a derivative contract; or
■  hedge against potential losses.
There can be no assurance that the Fund's use of derivative contracts or hybrid instruments will work as intended. Derivative investments made by the Fund are included within the Fund's 80% policy (as described below) and are calculated at market value.
The Fund will normally invest its assets so that at least 80% of the income that it distributes will be exempt from federal regular income tax. This policy may not be changed without shareholder approval.
TEMPORARY INVESTMENTS
The Fund may temporarily depart from its principal investment strategies by investing its assets in taxable securities or holding cash. It may do this in response to unusual circumstances, such as: adverse market, economic or other conditions (for example, to help avoid potential losses, or during periods when there is a shortage of appropriate tax-exempt securities); to maintain liquidity to meet shareholder redemptions; or to accommodate cash inflows. It is possible that such temporary investments could affect the Fund's investment returns. If the Fund invests in taxable securities, it may receive and distribute taxable income to investors and to that extent fail to meet its investment objectives.
What are the Fund's Principal Investments?
The following provides general information on the Fund's principal investments. The Fund's Statement of Additional Information (SAI) provides information about the Fund's non-principal investments and may provide additional information about the Fund's principal investments.
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TAX-EXEMPT SECURITIES
Tax-exempt securities are fixed-income securities that, in the opinion of bond counsel to the issuer or on the basis of another authority believed by the Adviser to be reliable, pay interest that is not subject to federal regular income taxes. Fixed-income securities pay interest, dividends or distributions at a specified rate. The rate may be a fixed percentage of the principal or adjusted periodically. In addition, the issuer of a fixed-income security must repay the principal amount of the security, normally within a specified time. Typically, states, counties, cities and other political subdivisions and authorities issue tax-exempt securities. The market categorizes tax-exempt securities by their source of repayment. Certain of these tax-exempt securities may be subject to credit enhancement.
The following describes the principal types of tax-exempt securities in which the Fund may invest:
General Obligation Bonds (A Type of Tax-Exempt Security)
General obligation bonds are supported by the issuer's power to exact property or other taxes. The issuer must impose and collect taxes sufficient to pay principal and interest on the bonds. However, the issuer's authority to impose additional taxes may be limited by its charter or state law.
Special Revenue Bonds (A Type of Tax-Exempt Security)
Special revenue bonds are payable solely from specific revenues received by the issuer such as specific taxes, assessments, tolls or fees. Bondholders may not collect from the municipality's general taxes or revenues. For example, a municipality may issue bonds to build a toll road and pledge the tolls to repay the bonds. Therefore, a shortfall in the tolls normally would result in a default on the bonds, or in certain cases, may result in a reduction in payments received in respect of the bonds.
Private Activity Bonds (A Type of Special Revenue Bond)
Private activity bonds are special revenue bonds used to finance private projects. A certain percentage of the proceeds from a private activity bond is used for a private business use or a certain percentage of the debt service regarding a private activity bond is paid directly or indirectly from a private business use. A private business use is a trade or business carried on by any person or entity other than a governmental unit. Private activity bonds are secured primarily by revenues derived from loan repayments or lease payments due from the private entity, which may or may not be guaranteed by a parent company or otherwise secured. Private activity bonds generally are not secured by a pledge of the taxing power of the issuer of such bonds. For example, a municipality may issue bonds to finance a new factory to improve its local economy. The municipality would lend the proceeds from its bonds to the company using the factory, and the company would agree to make loan payments sufficient to cover interest and principal payments on the bonds. The bonds would be payable from the company's loan payments, and generally not from any other revenues of the municipality. Therefore, any default of the loan normally would result in a default on the bonds.
Types of private activity bonds include, for example: bonds issued to obtain funds to provide water, sewage and solid waste facilities, qualified residential rental projects, certain local electric, gas and other heating and cooling facilities, qualified hazardous waste facilities, high speed intercity rail facilities, certain airports, docks, wharves and mass transportation facilities and qualified mortgages; qualified student loan bonds; qualified redevelopment bonds; and bonds used for certain organizations exempt from federal income taxation (qualified 501(c)(3) bonds).
The interest on many types of private activity bonds is subject to AMT.
Tax Increment Financing Bonds (A Type of Tax-Exempt Security)
Tax increment financing (TIF) bonds are payable from increases in taxes or other revenues attributable to projects within the TIF district. For example, a municipality may issue TIF bonds to redevelop a commercial area. The TIF bonds would be payable solely from any increase in sales taxes collected from the merchants in the area. The bonds could fail to pay principal or interest if merchants' sales, and related tax collections, failed to increase as anticipated.
Municipal Leases (A Type of Tax-Exempt Security)
Municipalities may enter into leases for equipment or facilities. In order to comply with state public financing laws, these leases are typically subject to annual appropriation. In other words, a municipality may end a lease, without penalty, by not providing for the lease payments in its annual budget. After the lease ends, the lessor can resell the equipment or facility but may lose money on the sale.
The Fund may invest in securities supported by pools of municipal leases. The most common type of lease-backed securities is certificates of participation (COPs). However, the Fund may also invest directly in individual leases.
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Inverse Floaters (A Type of Fixed-Income, Tax-Exempt Security)
An inverse floater has a floating or variable interest rate that moves in the opposite direction of market interest rates. Inverse floaters are used to enhance the income from a bond investment by employing leverage. When short-term market interest rates go up, the interest rate paid on the inverse floater goes down; when short-term market interest rates go down, the interest rate paid on the inverse floater goes up. Inverse floaters generally respond more rapidly to market interest rate changes than fixed-rate, tax-exempt securities. Inverse floaters are subject to interest rate risks and leverage risks.
Zero-Coupon Securities (A Type of Fixed-Income, Tax-Exempt Security)
Zero-coupon securities do not pay interest or principal until final maturity unlike debt securities that provide periodic payments of interest (referred to as a coupon payment). Investors buy zero-coupon securities at a price below the amount payable at maturity. The difference between the purchase price and the amount paid at maturity represents interest on the zero-coupon security. Investors must wait until maturity to receive interest and principal, which increases the interest rate and credit risks of a zero-coupon security. A zero-coupon, step-up security converts to a coupon security before final maturity.
There are many forms of zero-coupon securities. Some are issued at a discount and are referred to as zero-coupon or capital appreciation bonds. In addition, some securities give the issuer the option to deliver additional securities in place of cash interest payments, thereby increasing the amount payable at maturity. These are referred to as pay-in-kind, PIK securities or toggle securities.
Municipal Mortgage-Backed Securities (A Type of Fixed-Income, Tax-Exempt Security)
Municipal mortgage-backed securities are special revenue bonds, the proceeds of which may be used to provide mortgage loans for single family homes or to finance multifamily housing. Municipal mortgage-backed securities represent interests in pools of mortgages. The mortgages that comprise a pool normally have similar interest rates, maturities and other terms. Mortgages may have fixed or adjustable rates. Municipal mortgage-backed securities generally have fixed interest rates.
Municipal mortgage-backed securities come in a variety of forms. The simplest forms of municipal mortgage-backed securities are unstructured bonds backed by the net interest and principal payments and prepayments from the underlying mortgages. As a result, the holders assume all interest rate and prepayment risks of the underlying mortgages. Other municipal mortgage-backed securities may have more complicated financial structures.
PACs (A Type of Municipal Mortgage-Backed Security)
PACs (planned amortization classes) are a sophisticated form of municipal mortgage-backed security issued with a companion class(es). PACs receive principal payments and prepayments at a specified rate. The companion classes receive principal payments and prepayments in excess of the specified rate. In addition, PACs will receive the companion classes' share of principal payments, if necessary, to cover a shortfall in the prepayment rate. This helps PACs to control prepayment risks by increasing the risks to their companion classes.
Variable Rate Demand Instruments (A Type of Tax-Exempt Security)
Variable rate demand instruments are tax-exempt securities that require the issuer or a third party, such as a dealer or bank (the “Demand Provider”), to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. Some variable rate demand instruments are “conditional,” so that the occurrence of certain conditions discharges the Demand Provider's obligation to repurchase the security. Other variable rate demand instruments are “unconditional,” so that there are no conditions under which the Demand Provider's obligation to repurchase the security can terminate. The Fund treats variable rate demand instruments as short-term securities even though their maturity may extend beyond 397 days because, within 397 days, their variable interest rate adjusts in response to changes in market rates and the repayment of their principal amount can be demanded. Certain variable rate demand instruments that may be invested in by the Fund, referred to as “synthetic” variable rate demand instruments, have certain features, such as call features, that make it possible that the Fund will realize capital gains.
Municipal Notes (A Type of Tax-Exempt Security)
Municipal notes are short-term, tax-exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.
Municipal Auction Rate Securities (A Type of Tax-Exempt Security)
Municipal auction rate securities are tax-exempt securities that are issued (without a demand feature) generally for a specified term, during which the interest rate may be reset at specified intervals (such as, for example, every 7, 28, 35 or 49 days) by means of a “Dutch Auction” or similar competitive process. These securities may be referred to as “municipal auction rate notes.” In the auction, holders of such securities, and investors who seek to acquire such securities, indicate their
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interest in continuing to hold, or to purchase, the securities at rates that they specify to broker-dealers that serve as auction agents for the auction. If the auction is successful, a holder of such securities will be able to sell them at par value through the auction process. A “failed auction” occurs when, for example, the auction agent does not receive enough bids to cover the aggregate amount of securities that have been put up for sale at the auction, or the lowest interest rate at which all of the securities that have been put up for sale at the auction would be above the “maximum interest rate” set forth in the documentation for the securities, or some other reason. When a failed auction occurs, a holder of the securities may not be able to sell all or a portion of the securities it desired to sell at the auction, in which case the affected securities would pay the maximum interest rate set forth in their documentation until the next successful auction. The maximum interest rate may be a multiple of a specified index or a fixed rate and may be dependent on other factors, such as the credit rating of the securities at the time of auction. Municipal auction rate securities may be subject to interest rate, credit, credit enhancement, prepayment, liquidity and economic risks.
Tax-Exempt Commercial Paper (A Type of Tax-Exempt Security)
Tax-exempt commercial paper is an obligation issued by a tax-exempt issuer with a maturity of generally less than nine months. Tax-exempt issuers may issue commercial paper to pay for current expenditures or other permissible activities. Tax-exempt issuers may constantly reissue their commercial paper and use the proceeds (or other sources) to repay maturing paper. If the tax-exempt issuer cannot continue to obtain liquidity in this fashion, and if there is not another available source of liquidity, its commercial paper may default or there may be a reduction in payments received in repayment of the tax-exempt commercial paper.
Derivative Contracts
Derivative contracts are financial instruments that require payments based upon changes in the values of designated securities, commodities, indices or other assets or instruments including other derivative contracts (each a “Reference Instrument” and collectively, “Reference Instruments”). Each party to a derivative contract may sometimes be referred to as a counterparty. Some derivative contracts require payments relating to an actual, future trade involving the Reference Instrument. These types of derivatives are frequently referred to as “physically settled” derivatives. Other derivative contracts require payments relating to the income or returns from, or changes in the market value of, a Reference Instrument. These types of derivatives are known as “cash-settled” derivatives, since they require cash payments in lieu of delivery of the Reference Instrument.
Many derivative contracts are traded on securities or commodities exchanges. In this case, the exchange sets all the terms of the contract except for the price. Investors make payments due under their contracts through the exchange. Most exchanges require investors to maintain margin accounts through their brokers to cover their potential obligations to the exchange. Parties to the contract make (or collect) daily payments to the margin accounts to reflect losses (or gains) in the value of their contracts. This protects investors against potential defaults by the other party to the contract. Trading contracts on an exchange also allows investors to close out their contracts by entering into offsetting contracts.
The Fund may also trade derivative contracts over-the-counter (OTC) in transactions negotiated directly between the Fund and a financial institution. OTC contracts do not necessarily have standard terms, so they may be less liquid and more difficult to close out than exchange-traded contracts. In addition, OTC contracts with more specialized terms may be more difficult to value than exchange-traded contracts, especially in times of financial stress.
The market for swaps and other OTC derivatives was largely unregulated prior to the enactment of federal legislation known as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). Regulations enacted by the Commodity Futures Trading Commission (the CFTC) under the Dodd-Frank Act require the Fund to clear certain swap contracts through a clearing house or central counterparty (a CCP).
To clear a swap through the CCP, the Fund will submit the contract to, and post margin with, a futures commission merchant (FCM) that is a clearing house member. The Fund may enter into the swap with a financial institution other than the FCM and arrange for the contract to be transferred to the FCM for clearing, or enter into the contract with the FCM itself. If the Fund must centrally clear a transaction, the CFTC's regulations also generally require that the swap be executed on a registered exchange or through a market facility that is known as a swap execution facility or SEF. Central clearing is presently required only for certain swaps and the CFTC is expected to impose a mandatory central clearing requirement for additional derivative instruments over time.
The CCP, SEF and FCM are all subject to regulatory oversight by the CFTC. In addition, most derivative market participants are now regulated as swap dealers or major swap participants and are subject to certain minimum capital and margin requirements and business conduct standards. Similar regulatory requirements are expected to apply to derivative contracts that are subject to the jurisdiction of the SEC, although the SEC has not yet finalized its regulations. In addition, uncleared OTC swaps will be subject to regulatory collateral requirements that could adversely affect the Fund's ability to enter into swaps in the OTC market. These developments could cause the Fund to terminate new or existing swap agreements or to realize amounts to be received under such instruments at an inopportune time.
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Until the mandated rulemaking and regulations are implemented completely, it will not be possible to determine the complete impact of the Dodd-Frank Act and related regulations on the Fund.
Depending on how the Fund uses derivative contracts and the relationships between the market value of a derivative contract and the Reference Instrument, derivative contracts may increase or decrease the Fund's exposure to the risks of the Reference Instrument, and may also expose the Fund to liquidity and leverage risks. OTC contracts also expose the Fund to credit risks in the event that a counterparty defaults on the contract, although this risk may be mitigated by submitting the contract for clearing through a CCP.
Payment obligations arising in connection with derivative contracts are frequently required to be secured with margin (which is commonly called “collateral”). To the extent necessary to meet such requirements, the Fund may purchase U.S. Treasury and/or government agency securities.
The Fund may invest in a derivative contract if it is permitted to own, invest in or otherwise have economic exposure to the Reference Instrument. The Fund is not required to own a Reference Instrument in order to buy or sell a derivative contract relating to that Reference Instrument. The Fund may trade in the following specific types and/or combinations of derivative contracts:
Futures Contracts (A Type of Derivative)
Futures contracts provide for the future sale by one party and purchase by another party of a specified amount of a Reference Instrument at a specified price, date and time. Entering into a contract to buy a Reference Instrument is commonly referred to as buying a contract or holding a long position in the asset. Entering into a contract to sell a Reference Instrument is commonly referred to as selling a contract or holding a short position in the Reference Instrument. Futures contracts are considered to be commodity contracts. The Adviser has claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act with respect to the Fund, and therefore is not subject to registration or regulation with respect to the Fund. Futures contracts traded OTC are frequently referred to as forward contracts. The Fund can buy or sell financial futures (such as interest rate futures, index futures and security futures).
Option Contracts (A Type of Derivative)
Option contracts (also called “options”) are rights to buy or sell a Reference Instrument for a specified price (the “exercise price”) during, or at the end of, a specified period. The seller (or “writer”) of the option receives a payment, or premium, from the buyer, which the writer keeps regardless of whether the buyer uses (or exercises) the option. A call option gives the holder (buyer) the right to buy the Reference Instrument from the seller (writer) of the option. A put option gives the holder the right to sell the Reference Instrument to the writer of the option. Options may be bought or sold on a wide variety of Reference Instruments. Options that are written on futures contracts will be subject to margin requirements similar to those applied to futures contracts.
Swap Contracts (A Type of Derivative)
A swap contract (also known as a “swap”) is a type of derivative contract in which two parties agree to pay each other (swap) the returns derived from Reference Instruments. Swaps do not always involve the delivery of the Reference Instruments by either party, and the parties might not own the Reference Instruments underlying the swap. The payments are usually made on a net basis so that, on any given day, the Fund would receive (or pay) only the amount by which its payment under the contract is less than (or exceeds) the amount of the other party's payment. Swap agreements are sophisticated instruments that can take many different forms and are known by a variety of names. Common types of swaps in which the Fund may invest include interest rate swaps, total return swaps, credit default swaps and caps and floors.
OTHER INVESTMENTS, TRANSACTIONS, TECHNIQUES
Credit Enhancement
The Fund may invest in securities that have credit enhancement. Credit enhancement consists of an arrangement in which a company agrees to pay amounts due on a fixed-income security (including a tax-exempt security) if the issuer defaults. In some cases the company providing credit enhancement makes all payments directly to the security holders and receives reimbursement from the issuer. Normally, the credit enhancer has greater financial resources and liquidity than the issuer. For this reason, the Adviser may evaluate the credit risk of a fixed-income security based solely upon its credit enhancement.
Common types of credit enhancement include guarantees, letters of credit, bond insurance and surety bonds. Credit enhancement also includes arrangements where securities or other liquid assets secure payment of a fixed-income security. If a default occurs, these assets may be sold and the proceeds paid to the security's holders. Either form of credit enhancement reduces credit risks by providing another source of payment for a fixed-income security.
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Hybrid Instruments
Hybrid instruments combine elements of two different kinds of securities or financial instruments (such as a derivative contract). Frequently, the value of a hybrid instrument is determined by reference to changes in the value of a Reference Instrument (that is a designated security, commodity, index or other asset or instrument including a derivative contract). The Fund may use hybrid instruments only in connection with permissible investment activities. Hybrid instruments can take on many forms including, but not limited to, the following forms. First, a common form of a hybrid instrument combines elements of a derivative contract with those of another security (typically a fixed-income security). In this case all or a portion of the interest or principal payable on a hybrid security is determined by reference to changes in the price of a Reference Instrument. Second, hybrid instruments may include convertible securities with conversion terms related to a Reference Instrument.
Depending on the type and terms of the hybrid instrument, its risks may reflect a combination of the risks of investing in the Reference Instrument with the risks of investing in other securities and derivative contracts. Thus, an investment in a hybrid instrument may entail significant risks in addition to those associated with traditional investments or the Reference Instrument. Hybrid instruments are also potentially more volatile than traditional securities or the Reference Instrument. Moreover, depending on the structure of the particular hybrid, it may expose the Fund to leverage risks or carry liquidity risks.
Delayed Delivery Transactions
Delayed delivery transactions, including when-issued transactions, are arrangements in which the Fund buys securities for a set price, with payment and delivery of the securities scheduled for a future time. During the period between purchase and settlement, no payment is made by the Fund to the issuer and no interest accrues to the Fund. The Fund records the transaction when it agrees to buy the securities and reflects their value in determining the price of its Shares. Settlement dates may be a month or more after entering into these transactions so that the market values of the securities bought may vary from the purchase prices. Therefore, delayed delivery transactions create interest rate risks for the Fund. Delayed delivery transactions also involve credit risks in the event of a counterparty default. These transactions create leverage risks.
Asset Segregation
In order to secure its obligations in connection with derivative contracts or special transactions, the Fund will either own the underlying assets, enter into offsetting transactions or set aside cash or readily marketable securities in each case, as provided by the SEC or SEC staff guidance. This requirement may cause the Fund to miss favorable trading opportunities, due to a lack of sufficient cash or readily marketable securities. This requirement may also cause the Fund to realize losses on offsetting or terminated derivative contracts or special transactions.
Investment Ratings for Investment-Grade Securities
The Adviser will determine whether a security is investment grade based upon the credit ratings given by one or more NRSROs. For example, Standard & Poor's, an NRSRO, assigns ratings to investment-grade securities (AAA, AA, A and BBB including modifiers, sub-categories and gradations) based on their assessment of the likelihood of the issuer's inability to pay interest or principal (default) when due on each security. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, the Fund must rely entirely upon the Adviser's credit assessment that the security is comparable to investment grade. The presence of a ratings modifier, sub-category, or gradation (for example, a (+) or (-)) is intended to show relative standing within the major rating categories and does not affect the security credit rating for purposes of the Fund's investment parameters. If a security is downgraded below the minimum quality grade discussed above, the Adviser will reevaluate the security, but will not be required to sell it.
Investment Ratings for Noninvestment-Grade Securities
Noninvestment-grade securities are rated below BBB- by an NRSRO. These bonds have greater economic, credit and liquidity risks than investment-grade securities.
What are the Specific Risks of Investing in the Fund?
The following provides general information on the risks associated with the Fund's principal investments. Any additional risks associated with the Fund's non-principal investments are described in the Fund's SAI. The Fund's SAI also may provide additional information about the risks associated with the Fund's principal investments.
TAX-EXEMPT SECURITIES Risk
The securities in which the Fund invests may include those issued by state or local governments, other political subdivisions or authorities, or directly or indirectly supported by taxes, assessments, tolls, fees or other revenue collected by or otherwise derived from or through such issuers. The amount of public information available about tax-exempt securities is generally less than for corporate equities or bonds. The secondary market for tax-exempt securities also tends to be less
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well-developed and less liquid than many other securities markets, which may limit the Fund's ability to sell its tax-exempt securities at attractive prices. Special factors, such as legislative changes, and state and local economic and business developments, may adversely affect the yield and/or value of the Fund's investments in tax-exempt securities. Other factors include the general conditions of the tax-exempt securities market, the size of the particular offering, the maturity of the obligation and the rating of the issue. Like other issuers, there is no guarantee that the issuers of such securities will have sufficient revenues to satisfy their obligations (such as, for example, the payment of interest or principal when due). Legal, economic, political or other developments may raise impairments (such as, for example, limitations under applicable law on the issuer's authority to raise taxes, prolonged budgetary processes, declining real estate values, increasing pension liabilities or declining tax revenues which may occur due to shifting demographics or other factors) to such issuer's budgetary flexibility, liquidity and ability to satisfy its obligations. Such impairments may cause a downgrade in the credit ratings of such an issuer, or the securities issued or supported by it, and may cause such an issuer to defer payment of certain obligations, reduce or eliminate appropriations and/or default on its obligations.
Tax-exempt issuers can and have defaulted on obligations, been downgraded or commenced insolvency proceedings. Financial difficulties of such issuers may continue or get worse. Like other issuers and securities, the likelihood that the credit risk associated with such issuers and such securities will increase is greater during times of economic stress and financial instability. As a result, in such situations, there would be heightened risk that there could be an interruption in payments to holders of tax-exempt securities in some cases. There also could be a reduction in the market value of the tax-exempt securities held by the Fund, which could adversely affect the Fund's net asset value or the distributions paid by the Fund.
To the extent that the Fund invests a larger portion of its assets in the tax-exempt securities of a particular state or U.S. territory or possession, there is greater risk that political, regulatory, economic or other developments within that state or U.S. territory or possession may impact on the Fund's investment performance.
CALL RISK
The tax-exempt securities in which the Fund may invest can be principal investment strategies for the Fund and may be subject to call risk. Call risk is the possibility that an issuer may redeem a fixed-income security (including a tax-exempt security) before maturity (a “call”) at a price below or above its current market price. An increase in the likelihood of a call may reduce the security's price. If a fixed-income security is called, the Fund may have to reinvest the proceeds in other fixed-income securities with lower interest rates, higher credit risks or other less favorable characteristics.
Credit Enhancement Risk
The securities in which the Fund invests may be subject to credit enhancement (for example, guarantees, letters of credit or bond insurance). Credit enhancement is designed to help assure timely payment of the security; it does not protect the Fund against losses caused by declines in a security's value due to changes in market conditions. Securities subject to credit enhancement generally would be assigned a lower credit rating if the rating were based primarily on the credit quality of the issuer without regard to the credit enhancement. If the credit quality of the credit enhancement provider (for example, a bank or bond insurer) is downgraded, the rating on a security credit enhanced by such credit enhancement provider also may be downgraded.
A single enhancement provider may provide credit enhancement to more than one of the Fund's investments. Having multiple securities credit enhanced by the same enhancement provider will increase the adverse effects on the Fund that are likely to result from a downgrading of, or a default by, such an enhancement provider. Adverse developments in the banking or bond insurance industries also may negatively affect the Fund, as the Fund may invest in securities credit enhanced by banks or by bond insurers without limit. Bond insurers that provide credit enhancement for large segments of the fixed-income markets, including the municipal bond market, may be more susceptible to being downgraded or defaulting during recessions or similar periods of economic stress.
Leverage Risk
The tax-exempt securities, derivative contracts and hybrid instruments in which the Fund may invest can be principal investment strategies for the Fund and may be subject to leverage risk. Leverage risk is created when an investment, which includes, for example, an investment in a derivative contract, exposes the Fund to a level of risk that exceeds the amount invested. Changes in the value of such an investment magnify the Fund's risk of loss and potential for gain. Investments can have these same results if their returns are based on a multiple of a specified index, security or other benchmark.
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LIQUIDITY RISK
Trading opportunities are more limited for fixed-income securities (including tax-exempt securities) that have not received any credit ratings, have received any credit ratings below investment grade or are not widely held. Trading opportunities also are more limited for inverse floaters that have complex terms or that are not widely held. These features may make it more difficult to sell or buy a security at a favorable price or time. Consequently, the Fund may have to accept a lower price to sell a security, sell other securities to raise cash or give up an investment opportunity, any of which could have a negative effect on the Fund's performance. Infrequent trading of securities may also lead to an increase in their price volatility. Noninvestment-grade securities generally have less liquidity than investment-grade securities.
Liquidity risk also refers to the possibility that the Fund may not be able to sell a security or close out a derivative contract when it wants to. If this happens, the Fund will be required to continue to hold the security or keep the position open, and the Fund could incur losses.
OTC derivative contracts generally carry greater liquidity risk than exchange-traded contracts. This risk may be increased in times of financial stress, if the trading market for OTC derivative contracts becomes restricted.
PREPAYMENT AND EXTENSION RISK
Unlike traditional fixed-income securities (including tax-exempt securities), which pay a fixed rate of interest until maturity (when the entire principal amount is due), payments on municipal mortgage-backed securities include both interest and a partial payment of principal. Partial payment of principal may be comprised of scheduled principal payments as well as unscheduled payments from the voluntary prepayment, refinancing or foreclosure of the underlying loans. These unscheduled prepayments of principal create risks that can adversely affect a fund holding municipal mortgage-backed securities.
For example, when interest rates decline, the values of municipal mortgage-backed securities generally rise. However, when interest rates decline, unscheduled prepayments can be expected to accelerate, and the Fund would be required to reinvest the proceeds of the prepayments at the lower interest rates then available. Unscheduled prepayments would also limit the potential for capital appreciation on municipal mortgage-backed securities.
Conversely, when interest rates rise, the values of municipal mortgage-backed securities generally fall. Since rising interest rates typically result in decreased prepayments, this could lengthen the average lives of municipal mortgage-backed securities, and cause their value to decline more than traditional fixed-income securities.
Generally, municipal mortgage-backed securities compensate for the increased risk associated with prepayments by paying a higher yield. The additional interest paid for risk is measured by the difference between the yield of a municipal mortgage-backed security and the yield of a U.S. Treasury security or other appropriate benchmark with a comparable maturity (the “spread”). An increase in the spread will cause the price of the municipal mortgage-backed security to decline. Spreads generally increase in response to adverse economic or market conditions. Spreads may also increase if the security is perceived to have an increased prepayment risk or is perceived to have less market demand.
Risk of Investing in Derivative Contracts and Hybrid Instruments
The Fund's exposure to derivative contracts and hybrid instruments (either directly or through its investment in another investment company) involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. First, changes in the value of the derivative contracts and hybrid instruments in which the Fund invests may not be correlated with changes in the value of the underlying Reference Instruments or, if they are correlated, may move in the opposite direction than originally anticipated. Second, while some strategies involving derivatives may reduce the risk of loss, they may also reduce potential gains or, in some cases, result in losses by offsetting favorable price movements in portfolio holdings. Third, there is a risk that derivative contracts and hybrid instruments may be erroneously priced or improperly valued and, as a result, the Fund may need to make increased cash payments to the counterparty. Fourth, exposure to derivative contracts and hybrid instruments may have tax consequences to the Fund and its shareholders. For example, derivative contracts and hybrid instruments may cause the Fund to realize increased ordinary income or short-term capital gains (which are treated as ordinary income for federal income tax purposes) and, as a result, may increase taxable distributions to shareholders. In addition, under certain circumstances certain derivative contracts and hybrid instruments may cause the Fund to: (a) incur an excise tax on a portion of the income related to those contracts and instruments; and/or (b) reclassify, as a return of capital, some or all of the distributions previously made to shareholders during the fiscal year as dividend income. Fifth, a common provision in OTC derivative contracts permits the counterparty to terminate any such contract between it and the Fund, if the value of the Fund's total net assets declines below a specified level over a given time period. Factors that may contribute to such a decline (which usually must be substantial) include significant shareholder redemptions and/or a marked decrease in the market value of the Fund's investments. Any such termination of the Fund's OTC derivative contracts may adversely affect the Fund (for example, by increasing losses and/or costs, and/or preventing the Fund from fully implementing its investment strategies). Sixth, the Fund may use a derivative contract to benefit from a decline in the value of a Reference Instrument. If the value of the Reference Instrument declines
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during the term of the contract, the Fund makes a profit on the difference (less any payments the Fund is required to pay under the terms of the contract). Any such strategy involves risk. There is no assurance that the Reference Instrument will decline in value during the term of the contract and make a profit for the Fund. The Reference Instrument may instead appreciate in value creating a loss for the Fund. Seventh, a default or failure by a CCP or an FCM (also sometimes called a “futures broker”), or the failure of a contract to be transferred from an Executing Dealer to the FCM for clearing, may expose the Fund to losses, increase its costs, or prevent the Fund from entering or exiting derivative positions, accessing margin, or fully implementing its investment strategies. The central clearing of a derivative and trading of a contract over a SEF could reduce the liquidity in, or increase costs of entering into or holding, any contracts. Finally, derivative contracts and hybrid instruments may also involve other risks described in this Prospectus, such as interest rate, credit, liquidity and leverage risks.
Risk Associated with Noninvestment-Grade Securities
Securities that are rated below investment grade or unrated securities of comparable quality (i.e., noninvestment-grade securities), also known as junk bonds, generally entail greater economic, credit and liquidity risks than investment-grade securities. For example, their prices are more volatile, economic downturns and financial setbacks may affect their prices more negatively, and their trading market may be more limited. These securities are considered speculative with respect to the issuer's ability to pay interest and repay principal. The Fund will invest at least a majority of its assets in securities rated investment grade (or unrated securities of comparable quality), and may purchase securities rated below investment grade (or unrated securities of comparable quality) up to 49% of its assets.
RISK RELATED TO THE ECONOMY
The value of the Fund's portfolio may decline in tandem with a drop in the overall value of the markets in which the Fund invests and/or other markets based on negative developments in the U.S. and global economies. Economic, political and financial conditions, or industry or economic trends and developments, may, from time to time, and for varying periods of time, cause volatility, illiquidity or other potentially adverse effects in the financial markets, including the fixed-income market. The commencement, continuation or ending of government policies and economic stimulus programs, changes in monetary policy, increases or decreases in interest rates, or other factors or events that affect the financial markets, including the fixed-income markets, may contribute to the development of or increase in volatility, illiquidity, shareholder redemptions and other adverse effects which could negatively impact the Fund's performance. For example, the value of certain portfolio securities may rise or fall in response to changes in interest rates, which could result from a change in government policies, and has the potential to cause investors to move out of certain portfolio securities, including fixed-income securities. This may increase redemptions from funds that hold large amounts of certain securities, and may result in decreased liquidity and increased volatility in the financial markets. Market factors, such as the demand for particular portfolio securities, may cause the price of certain portfolio securities to fall while the prices of other securities rise or remain unchanged. Among other investments, lower-grade bonds may be particularly sensitive to changes in the economy.
Epidemic and Pandemic Risk
An outbreak of respiratory disease caused by a novel coronavirus was first detected in China in December 2019 and subsequently spread globally. This coronavirus has resulted in closing borders, enhanced health screenings, healthcare service preparation and delivery, quarantines, cancellations, and disruptions to supply chains, workflow operations and consumer activity, as well as general concern and uncertainty. The impact of this coronavirus may be short-term or may last for an extended period of time and result in a substantial economic downturn. Health crises caused by outbreaks, such as the coronavirus outbreak, may exacerbate other pre-existing political, social and economic risks. The impact of this outbreak, and other epidemics and pandemics that may arise in the future, could negatively affect the worldwide economy, as well as the economies of individual countries, individual companies (including fund service providers) and the market in general in significant and unforeseen ways. Any such impact could adversely affect the Fund's performance.
SECTOR RISK
A substantial part of the Fund's portfolio may be comprised of securities issued or credit-enhanced by companies in similar businesses or with other similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these issuers or entities. Developments affecting companies with similar characteristics might include changes in interest rates, changes in economic cycle affecting credit losses and regulatory changes.
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Tax Risk
In order to pay interest that is exempt from federal regular income tax, tax-exempt securities must meet certain legal requirements. Failure to meet such requirements may cause the interest received and distributed by the Fund to shareholders to be taxable.
Changes or proposed changes in federal, state or local tax laws may cause the prices of tax-exempt securities to fall and/or may affect the tax-exempt status of the securities in which the Fund invests.
The federal income tax treatment of payments in respect of certain derivative contracts is unclear. Additionally, the Fund may not be able to close out certain derivative contracts when it wants to. The Fund also may invest in market discount bonds, enter into credit default swap arrangements and other derivative transactions, and engage in other permissible activities that will likely cause the Fund to realize a limited amount of ordinary income or short-term capital gains (which are treated as ordinary income for federal income tax purposes). Consequently, for each of these reasons, the Fund may receive payments, and make distributions, that are treated as ordinary income for federal income tax purposes. Income from the Fund also may be subject to AMT.
ISSUER Credit Risk
It is possible that interest or principal on securities will not be paid when due. Noninvestment-grade securities generally have a higher default risk than investment-grade securities. Such non-payment or default may reduce the value of the Fund's portfolio holdings, its share price and its performance.
Many fixed-income securities (including tax-exempt securities) receive credit ratings from NRSROs such as Fitch Rating Service, Moody's Investor Services, Inc. and Standard & Poor's that assign ratings to securities by assessing the likelihood of an issuer and/or guarantor default. Higher credit ratings correspond to lower perceived credit risk and lower credit ratings correspond to higher perceived credit risk. Credit ratings may be upgraded or downgraded from time to time as an NRSRO's assessment of the financial condition of a party obligated to make payments with respect to such securities and credit risk changes. The impact of any credit rating downgrade can be uncertain. Credit rating downgrades may lead to increased interest rates and volatility in financial markets, which in turn could negatively affect the value of the Fund's portfolio holdings, its share price and its investment performance. Credit ratings are not a guarantee of quality. Credit ratings may lag behind the current financial conditions of the issuer and/or guarantor and do not provide assurance against default or other loss of money. Credit ratings do not protect against a decline in the value of a security. If a security has not received a rating, the Fund must rely entirely upon the Adviser's credit assessment.
Fixed-income securities generally compensate for greater credit risk by paying interest at a higher rate. The difference between the yield of a security and the yield of a U.S. Treasury security or other appropriate benchmark with a comparable maturity (the “spread”) measures the additional interest paid for risk. Spreads may increase generally in response to adverse economic or market conditions. A security's spread may also increase if the security's rating is lowered, or the security is perceived to have an increased credit risk. An increase in the spread will cause the price of the security to decline.
COUNTERPARTY CREDIT RISK
Counterparty credit risk includes the possibility that a party to a transaction involving the Fund will fail to meet its obligations. This could cause the Fund to lose money or to lose the benefit of the transaction or prevent the Fund from selling or buying other securities to implement its investment strategy.
INTEREST RATE RISK
Prices of fixed-income securities (including tax-exempt securities) rise and fall in response to changes in interest rates. Generally, when interest rates rise, prices of fixed-income securities fall. However, market factors, such as the demand for particular fixed-income securities, may cause the price of certain fixed-income securities to fall while the prices of other securities rise or remain unchanged.
The longer the duration of a fixed-income security, the more susceptible it is to interest rate risk. The duration of a fixed-income security may be equal to or shorter than the stated maturity of a fixed-income security. Recent and potential future changes in monetary policy made by central banks and/or their governments are likely to affect the level of interest rates. Duration measures the price sensitivity of a fixed-income security given a change in interest rates. For example, if a fixed-income security has an effective duration of three years, a 1% increase in general interest rates would be expected to cause the security's value to decline about 3% while a 1% decrease in general interest rates would be expected to cause the security's value to increase about 3%.
The impact of interest rate changes on the value of floating rate investments is typically reduced by periodic interest rate resets. Variable and floating rate securities generally are less sensitive to interest rate changes, but may decline in value if their interest rates do not rise as much or as quickly as interest rates in general. Conversely, variable and floating rate securities generally will not increase in value as much as fixed rate debt instruments if interest rates decline. Certain of the Fund's
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investments may also be valued, in part, by reference to the relative relationship between interest rates on tax-exempt securities and taxable securities. With respect to the Fund's investments described in the preceding sentence, the value of such Fund investments may be negatively affected (or positively affected) when the market for tax-exempt securities underperforms (or outperforms) the market for taxable securities.
technology Risk
The Adviser uses various technologies in managing the Fund, consistent with its investment objective(s) and strategy described in this Prospectus. For example, proprietary and third-party data and systems are utilized to support decision-making for the Fund. Data imprecision, software or other technology malfunctions, programming inaccuracies and similar circumstances may impair the performance of these systems, which may negatively affect Fund performance.
What Do Shares Cost?
CALCULATION OF NET ASSET VALUE
When the Fund receives your transaction request in proper form (as described in this Prospectus under the sections entitled “How to Purchase Shares” and “How to Redeem Shares”), it is processed at the next calculated net asset value of a Share (NAV) plus any applicable front-end sales charge (“public offering price”). A Share's NAV is determined as of the end of regular trading on the New York Stock Exchange (NYSE) (normally 4:00 p.m. Eastern time), each day the NYSE is open. The Fund calculates the NAV of each class by valuing the assets allocated to the Share's class, subtracting the liabilities allocated to each class and dividing the balance by the number of Shares of the class outstanding. The NAV for each class of Shares may differ due to the level of expenses allocated to each class as well as a result of the variance between the amount of accrued investment income and capital gains or losses allocated to each class and the amount actually distributed to shareholders of each class. The Fund's current NAV and/or public offering price may be found at FederatedInvestors.com, via online news sources and in certain newspapers.
You can purchase or redeem Shares any day the NYSE is open.
When the Fund holds fixed-income securities that trade on days the NYSE is closed, the value of the Fund's assets may change on days you cannot purchase or redeem Shares.
In calculating its NAV, the Fund generally values investments as follows:
■  Fixed-income securities are fair valued using price evaluations provided by a pricing service approved by the Board of Directors (“Board”).
■  Derivative contracts listed on exchanges are valued at their reported settlement or closing price, except that options are valued at the mean of closing bid and asked quotations.
■  Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Board.
If any price, quotation, price evaluation or other pricing source is not readily available when the NAV is calculated, if the Fund cannot obtain price evaluations from a pricing service or from more than one dealer for an investment within a reasonable period of time as set forth in the Fund's valuation policies and procedures, or if information furnished by a pricing service, in the opinion of the Valuation Committee, is deemed not representative of the fair value of such security, the Fund uses the fair value of the investment determined in accordance with the procedures generally described below. There can be no assurance that the Fund could obtain the fair value assigned to an investment if it sold the investment at approximately the time at which the Fund determines its NAV per share.
Shares of other mutual funds are valued based upon their reported NAVs. The prospectuses for these mutual funds explain the circumstances under which they will use fair value pricing and the effects of using fair value pricing.
Fair Valuation
The Board has ultimate responsibility for determining the fair value of investments for which market quotations are not readily available. The Board has appointed a Valuation Committee comprised of officers of the Fund, the Adviser and certain of the Adviser's affiliated companies to assist in determining fair value and in overseeing the calculation of the NAV. The Board has also authorized the use of pricing services recommended by the Valuation Committee to provide fair value evaluations of the current value of certain investments for purposes of calculating the NAV. In the event that market quotations and price evaluations are not available for an investment, the Valuation Committee determines the fair value of the investment in accordance with procedures adopted by the Board. The Board periodically reviews and approves the fair valuations made by the Valuation Committee and any changes made to the procedures. The Fund's SAI discusses the methods used by pricing services and the Valuation Committee to assist the Board in valuing investments.
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Using fair value to price investments may result in a value that is different from an investment's most recent closing price and from the prices used by other mutual funds to calculate their NAVs. The application of the fair value procedures to an investment represent a good faith determination of such investment's fair value. There can be no assurance that the Fund could obtain the fair value assigned to an investment if it sold the investment at approximately the time at which the Fund determines its NAV per share.
SALES CHARGE INFORMATION
The following table summarizes the minimum investment amount and the maximum sales charge that you will pay on an investment in the Fund. Keep in mind that financial intermediaries may charge you fees for their services in connection with your Share transactions.
  Minimum
Initial/Subsequent
Investment
Amounts1 		Maximum Sales Charges
Shares Offered Front-End
Sales Charge2 		Contingent
Deferred
Sales Charge
T $1,500/$100 2.50% None
1 The minimum initial and subsequent investment amounts for Individual Retirement Accounts (IRAs) are generally $250 and $100, respectively. There is no minimum initial or subsequent investment amount required for employer-sponsored retirement plans; however, such accounts remain subject to the Fund's policy on “Accounts with Low Balances” as discussed later in this Prospectus. Please see “By Systematic Investment Program” for applicable minimum investment. Financial intermediaries may impose higher or lower minimum investment requirements on their customers than those imposed by the Fund.
2 Front-End Sales Charge is expressed as a percentage of public offering price. See “Sales Charge When You Purchase.”
SALES CHARGE WHEN YOU PURCHASE
The following table lists the sales charges which will be applied to your Share purchase, subject to the breakpoint discounts indicated in the table and described below.
T:
Purchase Amount Sales Charge
as a Percentage
of Public
Offering Price 		Sales Charge
as a Percentage
of NAV
Less than $250,000 2.50% 2.56%
$250,000 but less than $500,000 2.00% 2.04%
$500,000 but less than $1 million 1.50% 1.52%
$1 million or greater 1.00% 1.01%
REDUCING THE SALES CHARGE WITH BREAKPOINT DISCOUNTS
Your purchase transaction may qualify for a reduction of the sales charge, also known as a breakpoint discount. The breakpoint discounts offered by the Fund are indicated in the table above. You or your financial intermediary must notify the Fund's Transfer Agent of eligibility for any applicable breakpoint discount at the time of purchase. Share class availability depends upon your financial intermediary's policies and procedures. Consult with your financial intermediary for more information.
Rights of Accumulation and Letter of Intent privileges are not available for you to reduce the front-end sales charge you pay on Class T Shares. The applicable front-end sales charge applies to each individual transaction in the Fund.
Waiver of the Class T Sales Charge
No sales charge is imposed on Class T Shares of the Fund if the shares were purchased with the reinvestment of dividends and capital gains distributions.
No sales charge is imposed on Class T Shares if the shares are issued in connection with the merger, consolidation or acquisition of the assets of another fund.
Contingent Deferred Sales Charge
Redemptions of Class T Shares are not subject to a contingent deferred sales charge.
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How is the Fund Sold?
The Fund has established the following Share classes: Class A Shares (A), Class B Shares (B), Class C Shares (C), Class F Shares (F), Institutional Shares (IS) and Class T Shares (T) each representing interests in a single portfolio of securities. This Prospectus relates only to the T class. All Share classes have different sales charges and other expenses which affect their performance. Contact your financial intermediary or call 1-800-341-7400 for more information concerning another class. Share class availability depends upon your financial intermediary's policies and procedures. Consult with your financial intermediary for more information.
Under the Distributor's Contract with the Fund, the Distributor, Federated Securities Corp., offers Shares on a continuous, best-efforts basis. The Distributor is a subsidiary of Federated Hermes, Inc. (“Federated Hermes,” formerly, Federated Investors, Inc.). The Fund may not be a suitable investment for retirement plans.
The Fund's Distributor markets the T class to customers of financial institutions or to individuals, directly or through financial intermediaries.
Intra-Fund Share Conversion Program
A shareholder in the Fund's Shares may convert their Shares at net asset value to any other share class of the Fund if the shareholder meets the investment minimum and eligibility requirements for the share class into which the conversion is sought, as applicable. This share conversion program is not applicable to the Fund's Class B Shares. The share conversion program is not applicable to the Fund's Class A Shares, Class C Shares and Class F Shares subject to a contingent deferred sales charge, if applicable. For Class C Shares purchased through a financial intermediary after June 30, 2017, such shares may only be converted to another share class of the same Fund if: (i) the shares are no longer subject to a CDSC or the financial intermediary agrees to reimburse the Fund's Distributor the CDSC otherwise payable upon the sale of such shares; (ii) the shareholder meets the investment minimum and eligibility requirements for the share class into which the conversion is sought, as applicable; and (iii) (a) the conversion is made to facilitate the shareholder's participation in a self-directed brokerage (non-advice) account or a fee-based advisory program offered by the intermediary; or (b) the conversion is part of a multiple-client transaction through a particular financial intermediary as pre-approved by the Fund's Administrator. Such conversion of classes should not result in a realization event for tax purposes. Contact your financial intermediary or call 1-800-341-7400 to convert your Shares.
Payments to Financial Intermediaries
The Fund and its affiliated service providers may pay fees as described below to financial intermediaries (such as broker-dealers, banks, investment advisers or third-party administrators) whose customers are shareholders of the Fund.
The services provided (and the fees and sales charges received) by financial intermediaries may vary.
FRONT-END SALES CHARGE REALLOWANCES
The Distributor receives a front-end sales charge on Share sales. The Distributor pays all of this charge to financial intermediaries that are eligible to receive it (the “Dealer Reallowance”) and retains any remaining portion of the front-end sales charge.
When a financial intermediary's customer purchases Shares, the financial intermediary will receive a Dealer Reallowance as follows:
T:  
Purchase Amount Dealer Reallowance
as a Percentage of
Public Offering Price
Less than $250,000 2.50%
$250,000 but less than $500,000 2.00%
$500,000 but less than $1 million 1.50%
$1 million or greater 1.00%
service fees
The Fund's T Class may pay Service Fees of up to 0.25% of average net assets to financial intermediaries or to Federated Shareholder Services Company (FSSC), a subsidiary of Federated Hermes, for providing services to shareholders and maintaining shareholder accounts. Intermediaries that receive Service Fees may include a company affiliated with management of Federated Hermes. If a financial intermediary receives Service Fees on an account, it is not eligible to also receive Account Administration Fees on that same account.
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ACCOUNT ADMINISTRATION FEES
The Fund's T Class may pay Account Administration Fees of up to 0.25% of average net assets to banks that are not registered as broker-dealers or investment advisers for providing administrative services to the Fund and its shareholders. If a financial intermediary receives Account Administration Fees on an account, it is not eligible to also receive Service Fees or Recordkeeping Fees on that same account.
RECORDKEEPING FEES
The Fund may pay Recordkeeping Fees on an average-net-assets basis or on a per-account-per-year basis to financial intermediaries for providing recordkeeping services to the Fund and its shareholders. If a financial intermediary receives Recordkeeping Fees on an account, it is not eligible to also receive Account Administration Fees or Networking Fees on that same account.
networking fees
The Fund may reimburse Networking Fees on a per-account-per-year basis to financial intermediaries for providing administrative services to the Fund and its shareholders on certain non-omnibus accounts. If a financial intermediary receives Networking Fees on an account, it is not eligible to also receive Recordkeeping Fees on that same account.
ADDITIONAL PAYMENTS TO FINANCIAL INTERMEDIARIES
The Distributor may pay out of its own resources amounts to certain financial intermediaries, including broker-dealers, banks, registered investment advisers, independent financial planners and retirement plan administrators, that support the sale of Shares or provide services to Fund shareholders. The amounts of these payments could be significant, and may create an incentive for the financial intermediary or its employees or associated persons to recommend or sell Shares of the Fund to you. Not all financial intermediaries receive such payments, and the amount of compensation may vary by intermediary. In some cases, such payments may be made by or funded from the resources of companies affiliated with the Distributor (including the Adviser). These payments are not reflected in the fees and expenses listed in the fee table section of the Fund's Prospectus and described above because they are not paid by the Fund.
These payments are negotiated and may be based on such factors as: the number or value of Shares that the financial intermediary sells or may sell; the value of client assets invested; the level and types of services or support furnished by the financial intermediary; or the Fund's and/or other Federated Hermes funds' relationship with the financial intermediary. These payments may be in addition to payments, as described above, made by the Fund to the financial intermediary. In connection with these payments, the financial intermediary may elevate the prominence or profile of the Fund and/or other Federated Hermes funds, within the financial intermediary's organization by, for example, placement on a list of preferred or recommended funds and/or granting the Distributor preferential or enhanced opportunities to promote the funds in various ways within the financial intermediary's organization. You can ask your financial intermediary for information about any payments it receives from the Distributor or the Fund and any services provided, as well as about fees and/or commissions it charges.
How to Purchase Shares
You may purchase Shares of the Fund any day the NYSE is open. Shares will be purchased at the NAV next calculated after your investment is received by the Fund, or its agent, in proper form. The Fund reserves the right to reject any request to purchase Shares. New investors must submit a completed New Account Form. All accounts, including those for which there is no minimum initial investment amount required, are subject to the Fund's policy on “Accounts with Low Balances” as discussed later in this Prospectus.
Where the Fund offers more than one Share class and you do not specify the class choice on your New Account Form or form of payment (e.g., Federal Reserve wire or check), you automatically will receive the A class.
For important account information, see the section “Security and Privacy Protection.”
You may purchase Shares through a financial intermediary or directly from the Fund.
THROUGH A FINANCIAL INTERMEDIARY
■  Establish an account with the financial intermediary; and
■  Submit your purchase order to the financial intermediary before the end of regular trading on the NYSE (normally 4:00 p.m. Eastern time).
The Fund has authorized certain intermediaries to accept Share purchase orders on its behalf. When authorized intermediaries receive an order in proper form, the order is considered as being placed with the Fund, and Shares will be bought at the NAV next calculated after such an order is received by the authorized intermediary. If your financial intermediary is not an authorized intermediary, the Fund or its agent must receive the purchase order in proper form from your financial intermediary by the end of regular trading on the NYSE (normally 4:00 p.m. Eastern time) in order for your
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transaction to be priced at that day's NAV. In addition, your financial intermediary must forward your payment by the prescribed trade settlement date (typically within one to three business days) to the Fund's transfer agent, State Street Bank and Trust Company (“Transfer Agent”). You will become the owner of Shares and receive dividends when your payment is received in accordance with these time frames (provided that, if payment is received in the form of a check, the check clears). If your payment is not received in accordance with these time frames, or a check does not clear, your purchase will be canceled and you could be liable for any losses, fees or expenses incurred by the Fund or the Fund's Transfer Agent.
Financial intermediaries should send payments according to the instructions in the sections “By Wire” or “By Check.”
Financial intermediaries may impose higher or lower minimum investment requirements on their customers than those imposed by the Fund. Keep in mind that financial intermediaries may charge you fees for their services in connection with your Share transactions.
Shareholders are encouraged to ask their financial intermediary if they are an authorized agent for the Fund and about any fees that may be charged by the financial intermediary.
DIRECTLY FROM THE FUND
■  Establish your account with the Fund by submitting a completed New Account Form; and
■  Send your payment to the Fund by Federal Reserve wire or check.
You will become the owner of Shares and your Shares will be priced at the next calculated NAV after the Fund receives your wire or your check. If your check does not clear, your purchase will be canceled and you could be liable for any losses or fees incurred by the Fund or the Fund's Transfer Agent.
By Wire
To facilitate processing your order, please call the Fund before sending the wire. Send your wire to:
State Street Bank and Trust Company
Boston, MA
Dollar Amount of Wire
ABA Number 011000028
BNF: 23026552
Attention: Federated EDGEWIRE
Wire Order Number, Dealer Number or Group Number
Nominee/Institution Name
Fund Name and Number and Account Number
You cannot purchase Shares by wire on holidays when wire transfers are restricted.
By Check
Make your check payable to The Federated Funds, note your account number on the check, and send it to:
The Federated Funds
P.O. Box 219318
Kansas City, MO 64121-9318
If you send your check by a private courier or overnight delivery service that requires a street address, send it to:
The Federated Funds
430 W 7th Street
Suite 219318
Kansas City, MO 64105-1407
Payment should be made in U.S. dollars and drawn on a U.S. bank. The Fund reserves the right to reject any purchase request. For example, to protect against check fraud the Fund may reject any purchase request involving a check that is not made payable to The Federated Funds (including, but not limited to, requests to purchase Shares using third-party checks) or involving temporary checks or credit card checks.
By Direct Deposit
You may establish Payroll Deduction/Direct Deposit arrangements for investments into the Fund by either calling a Client Service Representative at 1-800-341-7400; or by completing the Payroll Deduction/Direct Deposit Form, which is available on FederatedInvestors.com under “Resources” and then “Literature and Forms,” then “Forms.” You will receive a confirmation when this service is available.
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By Online Account Services
You may access your accounts online to purchase shares through Federated Hermes' Shareholder Account Access system once you have registered for access. This is only available for accounts held directly with the Fund. Online transactions may be subject to certain limitations including limitations as to the amount of the transaction. For more information about the services available through Shareholder Account Access, please visit FederatedInvestors.com and select “Sign In” and “Access and Manage Investments,” or call (800) 245-4770 to speak with a Client Service Representative.
BY SYSTEMATIC INVESTMENT PROGRAM (SIP)
Once you have opened an account, you may automatically purchase additional Shares on a regular basis by completing the SIP section of the New Account Form or by contacting the Fund or your financial intermediary. The minimum investment amount for SIPs is $50.
BY AUTOMATED CLEARING HOUSE (ACH)
Once you have opened an account, you may purchase additional Shares through a depository institution that is an ACH member. This purchase option can be established by completing the appropriate sections of the New Account Form.
How to Redeem Shares
You should redeem Shares:
■  through a financial intermediary if you purchased Shares through a financial intermediary; or
■  directly from the Fund if you purchased Shares directly from the Fund.
Shares of the Fund may be redeemed for cash as described herein, on days on which the Fund computes its NAV. Redemption requests may be made by telephone or in writing.
Redemption proceeds normally are wired or mailed within one business day for each method of payment after receiving a timely request in proper form. Depending upon the method of payment, when shareholders receive redemption proceeds can differ. Payment may be delayed for up to seven days under certain circumstances (see “Limitations on Redemption Proceeds”).
For important account information, see the section “Security and Privacy Protection.”
THROUGH A FINANCIAL INTERMEDIARY
Submit your redemption request to your financial intermediary by the end of regular trading on the NYSE (normally 4:00 p.m. Eastern time). The redemption amount you will receive is based upon the next calculated NAV after the Fund receives the order from your financial intermediary.
DIRECTLY FROM THE FUND
By Telephone
You may redeem Shares by simply calling the Fund at 1-800-341-7400.
If you call before the end of regular trading on the NYSE (normally 4:00 p.m. Eastern time), you will receive a redemption amount based on that day's NAV.
By Mail
You may redeem Shares by sending a written request to the Fund.
You will receive a redemption amount based on the next calculated NAV after the Fund receives your written request in proper form.
Send requests by mail to:
The Federated Funds
P.O. Box 219318
Kansas City, MO 64121-9318
Send requests by private courier or overnight delivery service to:
The Federated Funds
430 W 7th Street
Suite 219318
Kansas City, MO 64105-1407
All requests must include:
■  Fund name and Share class, account number and account registration;
■  amount to be redeemed; and
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■  signatures of all shareholders exactly as registered.
  Call your financial intermediary or the Fund if you need special instructions.
Signature Guarantees
Signatures must be guaranteed by a financial institution which is a participant in a Medallion signature guarantee program if:
■  your redemption will be sent to an address other than the address of record;
■  your redemption will be sent to an address of record that was changed within the last 30 days;
■  a redemption is payable to someone other than the shareholder(s) of record; or
■  transferring into another fund with a different shareholder registration.
A Medallion signature guarantee is designed to protect your account from fraud. Obtain a Medallion signature guarantee from a bank or trust company, savings association, credit union or broker, dealer or securities exchange member. A notary public cannot provide a signature guarantee.
By Online Account Services
You may access your accounts online to redeem shares through Federated Hermes' Shareholder Account Access system once you have registered for access. This is only available for accounts held directly with the Fund. Online transactions may be subject to certain limitations including limitations as to the amount of the transaction. For more information about the services available through Shareholder Account Access, please visit FederatedInvestors.com and select “Sign In” and “Access and Manage Investments,” or call (800) 245-4770 to speak with a Client Service Representative.
PAYMENT METHODS FOR REDEMPTIONS
Your redemption proceeds will be mailed by check to your address of record. The following payment options are available if you complete the appropriate section of the New Account Form or an Account Service Options Form. These payment options require a signature guarantee if they were not established when the account was opened:
■  An electronic transfer to your account at a financial institution that is an ACH member; or
■  Wire payment to your account at a domestic commercial bank that is a Federal Reserve System member.
Methods the Fund May Use to Meet Redemption Requests
The Fund intends to pay Share redemptions in cash. To ensure that the Fund has cash to meet Share redemptions on any day, the Fund typically expects to hold a cash or cash equivalent reserve or sell portfolio securities.
In unusual or stressed circumstances, the Fund may generate cash in the following ways:
■  Inter-fund Borrowing and Lending. The SEC has granted an exemption that permits the Fund and all other funds advised by subsidiaries of Federated Hermes, Inc. (“Federated Hermes funds”) to lend and borrow money for certain temporary purposes directly to and from other Federated Hermes funds. Inter-fund borrowing and lending is permitted only: (a) to meet shareholder redemption requests; (b) to meet commitments arising from “failed” trades; and (c) for other temporary purposes. All inter-fund loans must be repaid in seven days or less.
■  Committed Line of Credit. The Fund participates with certain other Federated Hermes funds, on a joint basis, in an up to $500,000,000 unsecured, 364-day, committed, revolving line of credit (LOC) agreement. The LOC was made available to finance temporarily the repurchase or redemption of shares of the funds, failed trades, payment of dividends, settlement of trades and for other short-term, temporary or emergency general business purposes. The Fund cannot borrow under the LOC if an inter-fund loan is outstanding.
■  Redemption in Kind. Although the Fund intends to pay Share redemptions in cash, it reserves the right to pay the redemption price in whole or in part by an “in-kind” distribution of the Fund's portfolio securities. Because the Fund has elected to be governed by Rule 18f-1 under the 1940 Act, the Fund is obligated to pay Share redemptions to any one shareholder in cash only up to the lesser of $250,000 or 1% of the net assets represented by such Share class during any 90-day period. Redemptions in kind are made consistent with the procedures adopted by the Fund's Board, which generally include distributions of a pro rata share of the Fund's portfolio assets. Redemption in kind is not as liquid as a cash redemption. If redemption is made in kind, securities received may be subject to market risk and the shareholder could incur taxable gains and brokerage or other charges in converting the securities to cash.
LIMITATIONS ON REDEMPTION PROCEEDS
Redemption proceeds normally are wired or mailed within one business day after receiving a request in proper form. Payment may be delayed for up to seven days:
■  to allow your purchase to clear (as discussed below);
■  during periods of market volatility;
■  when a shareholder's trade activity or amount adversely impacts the Fund's ability to manage its assets; or
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■  during any period when the Federal Reserve wire or applicable Federal Reserve banks are closed, other than customary weekend and holiday closings.
If you request a redemption of Shares recently purchased by check (including a cashier's check or certified check), money order, bank draft or ACH, your redemption proceeds may not be made available for up to seven calendar days to allow the Fund to collect payment on the instrument used to purchase such Shares. If the purchase instrument does not clear, your purchase order will be canceled and you will be responsible for any losses incurred by the Fund as a result of your canceled order.
In addition, the right of redemption may be suspended, or the payment of proceeds may be delayed (including beyond seven days), during any period:
■  when the NYSE is closed, other than customary weekend and holiday closings;
■  when trading on the NYSE is restricted, as determined by the SEC;
■  in which an emergency exists, as determined by the SEC, so that disposal of the Fund's investments or determination of its NAV is not reasonably practicable; or
■  as the SEC may by order permit for the protection of Fund shareholders.
You will not accrue interest or dividends on uncashed redemption checks from the Fund when those checks are undeliverable and returned to the Fund.
Systematic Withdrawal Program
You may automatically redeem Shares. The minimum amount for all new or revised systematic redemptions of Shares is $50 per transaction per fund. Complete the appropriate section of the New Account Form or an Account Service Options Form or contact your financial intermediary or the Fund. Your account value must meet the minimum initial investment amount at the time the program is established. This program may reduce, and eventually deplete, your account. Payments should not be considered yield or income.
Generally, it is not advisable to continue to purchase Shares subject to a sales charge while redeeming Shares using this program.
ADDITIONAL CONDITIONS
Telephone Transactions
The Fund will record your telephone instructions. If the Fund does not follow reasonable procedures, it may be liable for losses due to unauthorized or fraudulent telephone instructions.
Share Certificates
The Fund no longer issues share certificates. If you are redeeming or exchanging Shares represented by certificates previously issued by the Fund, you must return the certificates with your written redemption or exchange request. For your protection, send your certificates by registered or certified mail, but do not endorse them.
Security and Privacy Protection
ONLINE ACCOUNT and TELEPHONE ACCESS SECURITY
Federated Hermes will not be responsible for losses that result from unauthorized transactions, unless Federated Hermes does not follow procedures designed to verify your identity. When initiating a transaction by telephone or online, shareholders should be aware that any person with access to your account and other personal information including PINs (Personal Identification Numbers) may be able to submit instructions by telephone or online. Shareholders are responsible for protecting their identity by using strong usernames and complex passwords which utilize combinations of mixed case letters, numbers and symbols, and change passwords and PINs frequently.
Using FederatedInvestors.com's Account Access website means you are consenting to sending and receiving personal financial information over the Internet, so you should be sure you are comfortable with the risks. You will be required to accept the terms of an online agreement and to establish and utilize a password in order to access online account services. The Transfer Agent has adopted security procedures to confirm that internet instructions are genuine. The Transfer Agent will also send you written confirmation of share transactions. The Transfer Agent, the Fund and any of its affiliates will not be liable for losses or expenses that occur from fraudulent Internet instructions reasonably believed to be genuine.
The Transfer Agent or the Fund will employ reasonable procedures to confirm that telephone transaction requests are genuine, which may include recording calls, asking the caller to provide certain personal identification information, sending you written confirmation, or requiring other confirmation security procedures. The Transfer Agent, the Fund and any of its affiliates will not be liable for relying on instructions submitted by telephone that the Fund reasonably believes to be genuine.
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ANTI-MONEY LAUNDERING COMPLIANCE
To help the government fight the funding of terrorism and money laundering activities, federal law requires financial institutions to obtain, verify, and record information that identifies each new customer who opens a Fund account and to determine whether such person's name appears on governmental lists of known or suspected terrorists or terrorist organizations. Pursuant to the requirements under the USA PATRIOT Act, the information obtained will be used for compliance with the USA PATRIOT Act or other applicable laws, regulations and rules in connection with money laundering, terrorism or other illicit activities.
Information required includes your name, residential or business address, date of birth (for an individual), and other information that identifies you, including your social security number, tax identification number or other identifying number. The Fund cannot waive these requirements. The Fund is required by law to reject your Account Application if the required information is not provided. If, after reasonable effort, the Fund is unable to verify your identity or that of any other person(s) authorized to act on your behalf, or believes it has identified potentially suspicious, fraudulent or criminal activity, the Fund reserves the right to close your account and redeem your shares at the next calculated NAV without your permission. Any applicable contingent deferred sales charge (CDSC) will be assessed upon redemption of your shares.
The Fund has a strict policy designed to protect the privacy of your personal information. A copy of Federated Hermes' privacy policy notice was given to you at the time you opened your account. The Fund sends a copy of the privacy notice to you annually. You may also obtain the privacy notice by calling the Fund, or through FederatedInvestors.com.
Account and Share Information
CONFIRMATIONS AND ACCOUNT STATEMENTS
You will receive confirmation of purchases and redemptions (except for systematic transactions). In addition, you will receive periodic statements reporting all account activity, including systematic transactions, dividends and capital gains paid.
DIVIDENDS AND CAPITAL GAINS
The Fund declares any dividends daily and pays them monthly to shareholders. If you purchase Shares by wire, you begin earning dividends on the day your wire is received. If you purchase Shares by check, you begin earning dividends on the business day after the Fund receives your check. In either case, you earn dividends through the day your redemption request is received.
In addition, the Fund pays any capital gains at least annually, and may make such special distributions of dividends and capital gains as may be necessary to meet applicable regulatory requirements. Your dividends and capital gains distributions will be automatically reinvested in additional Shares without a sales charge, unless you elect cash payments.
If you purchase Shares just before the record date for a capital gain distribution, you will pay the full price for the Shares and then receive a portion of the price back in the form of a taxable distribution, whether or not you reinvest the distribution in Shares. Therefore, you should consider the tax implications of purchasing Shares shortly before the record date for a capital gain. Contact your financial intermediary or the Fund for information concerning when dividends and capital gains will be paid.
Under the federal securities laws, the Fund is required to provide a notice to shareholders regarding the source of distributions made by the Fund if such distributions are from sources other than ordinary investment income. In addition, important information regarding the Fund's distributions, if applicable, is available via the link to the Fund and share class name at FederatedInvestors.com/FundInformation.
Small Distributions and Uncashed Checks
Generally, dividend and/or capital gain distributions payable by check in an amount of less than $25 will be automatically reinvested in additional shares. This policy does not apply if you have elected to receive cash distributions that are directly deposited into your bank account via wire or ACH.
Additionally, if one or more dividend or capital gain distribution checks are returned as “undeliverable,” or remain uncashed for 180 days, all subsequent dividend and capital gain distributions will be reinvested in additional shares. No interest will accrue on amounts represented by uncashed distribution checks. For questions on whether reinvestment applies to your distributions, please contact a Client Service Representative at 1-800-341-7400.
Certain states, including the state of Texas, have laws that allow shareholders to designate a representative to receive abandoned or unclaimed property (“escheatment”) notifications by completing and submitting a designation form that generally can be found on the official state website. If a shareholder resides in an applicable state, and elects to designate a representative to receive escheatment notifications, escheatment notices generally will be delivered as required by such state
25
laws, including, as applicable, to both the shareholder and the designated representative. A completed designation form may be mailed to the Fund (if Shares are held directly with the Fund) or to the shareholder's financial intermediary (if Shares are not held directly with the Fund). Shareholders should refer to relevant state law for the shareholder's specific rights and responsibilities under his or her state's escheatment law(s), which can generally be found on a state's official website.
ACCOUNTS WITH LOW BALANCES
Federated Hermes reserves the right to close accounts if redemptions cause the account balance to fall below:
■  $1,500 for the T class (or in the case of IRAs, $250).
Before an account is closed, you will be notified and allowed at least 30 days to purchase additional Shares to meet the minimum.
TAX INFORMATION
The Fund sends an IRS Form 1099 and an annual statement of your account activity to assist you in completing your federal, state and local tax returns. It is anticipated that Fund distributions will be primarily dividends that are exempt from federal regular income tax, although a portion of the Fund's dividends may not be exempt. Income from the Fund also may be subject to AMT. Dividends may be subject to state and local taxes. In addition, the Fund may realize and distribute capital gains from time to time as a result of the Fund's normal investment activities. Distributions of net short-term capital gains are taxable to you as ordinary income. Distributions of net long-term capital gains are taxable to you as long-term capital gains regardless of how long you have owned your Shares. The Fund may invest a portion of its assets in securities that generate income that is not exempt from federal or state income tax. Capital gains and non-exempt dividends are taxable whether paid in cash or reinvested in the Fund. Redemptions are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.
FREQUENT TRADING POLICIES
Special Notice Regarding the Fund's T Shares and Frequent Trading
With respect to the Frequent Trading Policies described below, the Fund's T Shares are not eligible for exchanges and therefore references to exchanges below should be disregarded with respect to the Fund's T Shares.
Frequent or short-term trading into and out of the Fund can have adverse consequences for the Fund and shareholders who use the Fund as a long-term investment vehicle. Such trading in significant amounts can disrupt the Fund's investment strategies (e.g., by requiring it to sell investments at inopportune times or maintain excessive short-term or cash positions to support redemptions), increase brokerage and administrative costs and affect the timing and amount of taxable gains distributed by the Fund. Investors engaged in such trading may also seek to profit by anticipating changes in the Fund's NAV in advance of the time as of which NAV is calculated.
The Fund's Board has approved policies and procedures intended to discourage excessive frequent or short-term trading of the Fund's Shares. The Fund monitors trading in Fund Shares in an effort to identify disruptive trading activity. The Fund monitors trades into and out of the Fund within a period of 30 days or less. The Fund may also monitor trades into and out of the Fund for potentially disruptive trading activity over periods longer than 30 days. The size of Share transactions subject to monitoring varies. Where it is determined that a shareholder has exceeded the detection amounts twice within a period of 12 months, the Fund will temporarily prohibit the shareholder from making further purchases or exchanges of Fund Shares. If the shareholder continues to exceed the detection amounts for specified periods the Fund will impose lengthier trading restrictions on the shareholder, up to and including permanently prohibiting the shareholder from making any further purchases or exchanges of Fund Shares. Whether or not the specific monitoring limits are exceeded, the Fund's management or the Adviser may determine from the amount, frequency or pattern of purchases and redemptions or exchanges that a shareholder is engaged in excessive trading that is or could be detrimental to the Fund and other shareholders and may prohibit the shareholder from making further purchases or exchanges of Fund Shares. No matter how the Fund defines its limits on frequent trading of Fund Shares, other purchases and sales of Fund Shares may have adverse effects on the management of the Fund's portfolio and its performance.
The Fund's frequent trading restrictions do not apply to purchases and sales of Fund Shares by other Federated Hermes funds. These funds impose the same frequent trading restrictions as the Fund at their shareholder level. In addition, allocation changes of the investing Federated Hermes fund are monitored, and the managers of the recipient fund must determine that there is no disruption to their management activity. The intent of this exception is to allow investing fund managers to accommodate cash flows and other activity that result from non-abusive trading in the investing fund, without being stopped from such trading because the aggregate of such trades exceeds the monitoring limits. Nonetheless, as with any trading in Fund Shares, purchases and redemptions of Fund Shares by other Federated Hermes funds could adversely affect the management of the Fund's portfolio and its performance.
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The Fund will not restrict transactions made on a non-discretionary basis by certain asset allocation programs, wrap programs, fund of funds, collective funds or other similar accounts that have been pre-approved by Federated Hermes (“Approved Accounts”). The Fund will continue to monitor transactions by the Approved Accounts and will seek to limit or restrict even non-discretionary transactions by Approved Accounts that are determined to be disruptive or harmful to the Fund.
The Fund's objective is that its restrictions on short-term trading should apply to all shareholders that are subject to the restrictions, regardless of the number or type of accounts in which Shares are held. However, the Fund anticipates that limitations on its ability to identify trading activity to specific shareholders, including where Shares are held through intermediaries in multiple or omnibus accounts, will mean that these restrictions may not be able to be applied uniformly in all cases.
Other funds in the Federated Hermes family of funds may impose different monitoring policies or in some cases, may not monitor for frequent or short-term trading. Under normal market conditions such monitoring policies are designed to protect the funds being monitored and their shareholders and the operation of such policies and shareholder investments under such monitoring are not expected to have materially adverse impact on the Federated Hermes funds or their shareholders. If you plan to exchange your Fund Shares for shares of another Federated Hermes fund, please read the prospectus of that other Federated Hermes fund for more information.
PORTFOLIO HOLDINGS INFORMATION
Information concerning the Fund's portfolio holdings is available via the link to the Fund and share class name at FederatedInvestors.com/FundInformation. A complete listing of the Fund's portfolio holdings as of the end of each calendar quarter is posted on the website 30 days (or the next business day) after the end of the quarter and remains posted for six months thereafter. Summary portfolio composition information as of the close of each month is posted on the website 15 days (or the next business day) after month-end and remains posted until replaced by the information for the succeeding month. The summary portfolio composition information may include identification of the Fund's top 10 holdings, portfolio profile statistics (such as weighted average effective maturity and weighted average effective duration) and a percentage breakdown of the portfolio by credit quality and sector.
You may also access portfolio information as of the end of the Fund's fiscal quarters via the link to the Fund and share class name at FederatedInvestors.com. The Fund's Annual and Semi-Annual Shareholder Reports contain complete listings of the Fund's portfolio holdings as of the end of the Fund's second and fourth fiscal quarters. Fiscal quarter information is made available on the website within 70 days after the end of the fiscal quarter. This information is also available in reports filed with the SEC at the SEC's website at sec.gov.
Each fiscal quarter, the Fund will file with the SEC a complete schedule of its monthly portfolio holdings on “Form N-PORT.” The Fund's holdings as of the end of the third month of every fiscal quarter, as reported on Form N-PORT, will be publicly available on the SEC's website at sec.gov within 60 days of the end of the fiscal quarter upon filing. You may also access this information via the link to the Fund and share class name at FederatedInvestors.com.
In addition, from time to time (for example, during periods of unusual market conditions), additional information regarding the Fund's portfolio holdings and/or composition may be posted to FederatedInvestors.com. If and when such information is posted, its availability will be noted on, and the information will be accessible from, the home page of the website.
Who Manages the Fund?
The Board governs the Fund. The Board selects and oversees the Adviser, Federated Investment Management Company. The Adviser manages the Fund's assets, including buying and selling portfolio securities. Federated Advisory Services Company (FASC), an affiliate of the Adviser, provides certain support services to the Adviser. The fee for these services is paid by the Adviser and not by the Fund. The address of the Adviser and FASC is 1001 Liberty Avenue, Pittsburgh, PA 15222-3779.
The Adviser and other subsidiaries of Federated Hermes advise approximately 135 equity, fixed-income and money market mutual funds as well as a variety of other pooled investment vehicles, private investment companies and customized separately managed accounts (including non-U.S./offshore funds) which totaled approximately $575.9 billion in assets as of December 31, 2019. Federated Hermes was established in 1955 as Federated Investors, Inc. and is one of the largest investment managers in the United States with nearly 1,900 employees. Federated Hermes provides investment products to approximately 11,500 investment professionals and institutions.
The Adviser advises approximately 75 fixed-income and money market mutual funds (including sub-advised funds) and private investment companies, which totaled approximately $344.3 billion in assets as of December 31, 2019.
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PORTFOLIO MANAGEMENT INFORMATION
J. Scott Albrecht
J. Scott Albrecht, CFA, Senior Portfolio Manager, has been the Fund's portfolio manager since May of 1996.
Mr. Albrecht is a Senior Portfolio Manager and is responsible for day to day management of the Fund focusing on asset allocation, interest rate strategy and security selection. He has been with the Adviser or an affiliate since 1989; has worked in investment management since 1989; has managed investment portfolios since 1995. Education: B.S., Indiana University of Pennsylvania; M.S., Carnegie Mellon University.
R.J. Gallo
R.J. Gallo, CFA, Senior Portfolio Manager, has been the Fund's portfolio manager since July of 2017.
Mr. Gallo is a Senior Portfolio Manager, Head of the Municipal Bond Investment Group and Chairman of Duration Management Committee. He is responsible for overseeing the macro risk elements in the portfolio. He has been with the Adviser or an affiliate since 2000; has worked in investment management since 1996; has managed investment portfolios since 2002. Education: B.A., University of Michigan; M.P.A Princeton University.
The Fund's SAI provides additional information about the Portfolio Manager's compensation, management of other accounts, and ownership of securities in the Fund.
ADVISORY FEES
The Fund's investment advisory contract provides for payment to the Adviser of an annual investment advisory fee of 0.30% of the Fund's average daily net assets, plus 4.50% of the Fund's gross income. The Adviser may voluntarily waive a portion of its fee or reimburse the Fund for certain operating expenses. The Adviser and its affiliates have also agreed to certain “Fee Limits” as described in the footnote to the “Risk/Return Summary: Fees and Expenses” table found in the “Fund Summary” section of the Prospectus.
A discussion of the Board's review of the Fund's investment advisory contract is available in the Fund's annual and semi-annual shareholder reports for the periods ended March 31 and September 30, respectively.
Financial Information
FINANCIAL HIGHLIGHTS
The Financial Highlights will help you understand the Fund's financial performance for its past five fiscal. Some of the information is presented on a per Share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.
As the T class has not commenced operations, audited fiscal year end information is not available as of the date of this Prospectus.
The Financial Highlights information presented in this Prospectus is for the Fund's A class and is for illustrative purposes only. Please note that the T class is expected to have the same net expense ratio as the A class.
This information has been audited by Ernst & Young LLP, an independent registered public accounting firm, whose report, along with the Fund's audited financial statements, is included in the Annual Report.
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Financial Highlights–Class A Shares
(For a Share Outstanding Throughout Each Period)
Year Ended March 31 2020 2019 2018 2017 2016
Net Asset Value, Beginning of Period $10.45 $10.35 $10.38 $10.68 $10.66
Income From Investment Operations:          
Net investment income1 0.27 0.29 0.30 0.33 0.33
Net realized and unrealized gain (loss) 0.07 0.15 (0.03) (0.31) 0.01
TOTAL FROM INVESTMENT OPERATIONS 0.34 0.44 0.27 0.02 0.34
Less Distributions:          
Distributions from net investment income (0.27) (0.29) (0.30) (0.32) (0.32)
Distributions from net realized gain (0.06) (0.05) — — —
TOTAL DISTRIBUTIONS (0.33) (0.34) (0.30) (0.32) (0.32)
Net Asset Value, End of Period $10.46 $10.45 $10.35 $10.38 $10.68
Total Return2 3.22% 4.38% 2.62% 0.13% 3.31%
Ratios to Average Net Assets:          
Net expenses 0.83%3 0.84%3 0.85% 0.87% 0.87%
Net investment income 2.52% 2.84% 2.87% 3.06% 3.10%
Expense waiver/reimbursement4 0.11% 0.12% 0.10% 0.07% 0.07%
Supplemental Data:          
Net assets, end of period (000 omitted) $264,084 $276,117 $302,904 $304,271 $331,876
Portfolio turnover 9% 21% 26% 14% 25%
1 Per share number has been calculated using the average shares method.
2 Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable.
3 The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratios are 0.83% and 0.84% for the years ended March 30, 2020 and 2019, respectively, after taking into account these expense reductions.
4 This expense decrease is reflected in both the net expense and net investment income ratios shown above.
Further information about the Fund's performance is contained in the Fund's Annual Report, dated March 31, 2020, which can be obtained free of charge.
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Appendix A: Hypothetical Investment and Expense Information
The following chart provides additional hypothetical information about the effect of the Fund's expenses, including investment advisory fees and other Fund costs, on the Fund's assumed returns over a 10-year period. The chart shows the estimated expenses that would be incurred in respect of a hypothetical investment of $10,000, assuming a 5% return each year, and no redemption of Shares. The chart also assumes that the Fund's annual expense ratio stays the same throughout the 10-year period and that all dividends and distributions are reinvested. The annual expense ratio used in the chart is the same as stated in the “Fees and Expenses” table of this Prospectus (and thus may not reflect any fee waiver or expense reimbursement currently in effect). The maximum amount of any sales charge that might be imposed on the purchase of Shares (and deducted from the hypothetical initial investment of $10,000; the “Front-End Sales Charge”) is reflected in the “Hypothetical Expenses” column. The hypothetical investment information does not reflect the effect of charges (if any) normally applicable to redemptions of Shares (e.g., deferred sales charges, redemption fees). Mutual fund returns, as well as fees and expenses, may fluctuate over time, and your actual investment returns and total expenses may be higher or lower than those shown below.
FEDERATED MUNICIPAL BOND FUND, INC. - T CLASS
ANNUAL EXPENSE RATIO: 0.95%
MAXIMUM FRONT-END SALES CHARGE: 2.50%
Year Hypothetical
Beginning
Investment 		Hypothetical
Performance
Earnings 		Investment
After
Returns 		Hypothetical
Expenses 		Hypothetical
Ending
Investment
1 $10,000.00 $487.50 $10,237.50 $344.50 $10,144.88
2 $10,144.88 $507.24 $10,652.12 $98.33 $10,555.75
3 $10,555.75 $527.79 $11,083.54 $102.31 $10,983.26
4 $10,983.26 $549.16 $11,532.42 $106.45 $11,428.08
5 $11,428.08 $571.40 $11,999.48 $110.77 $11,890.92
6 $11,890.92 $594.55 $12,485.47 $115.25 $12,372.50
7 $12,372.50 $618.63 $12,991.13 $119.92 $12,873.59
8 $12,873.59 $643.68 $13,517.27 $124.78 $13,394.97
9 $13,394.97 $669.75 $14,064.72 $129.83 $13,937.47
10 $13,937.47 $696.87 $14,634.34 $135.09 $14,501.94
Cumulative   $5,866.57   $1,387.23  
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An SAI dated May 31, 2020, is incorporated by reference into this Prospectus. Additional information about the Fund and its investments is contained in the Fund's SAI and Annual and Semi-Annual Reports to shareholders as they become available. The Annual Report's Management's Discussion of Fund Performance discusses market conditions and investment strategies that significantly affected the Fund's performance during its last fiscal year. The SAI contains a description of the Fund's policies and procedures with respect to the disclosure of its portfolio securities. To obtain the SAI, Annual Report, Semi-Annual Report and other information without charge, and to make inquiries, call your financial intermediary or the Fund at 1-800-341-7400.
These documents, as well as additional information about the Fund (including portfolio holdings, performance and distributions), are also available on FederatedInvestors.com.
You can obtain information about the Fund (including the SAI) by accessing Fund information from the EDGAR Database on the SEC's website at sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov.
Federated Municipal Bond Fund, Inc.
Federated Hermes Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
Contact us at FederatedInvestors.com
or call 1-800-341-7400.
Federated Securities Corp., Distributor
Investment Company Act File No. 811-2677
CUSIP 313913501
Q453436 (5/20)
© 2020 Federated Hermes, Inc.

 

 

Statement of Additional Information
May 31, 2020
Share Class | T        
Federated Municipal Bond Fund, Inc.
This Statement of Additional Information (SAI) is not a Prospectus. Read this SAI in conjunction with the Prospectus for Federated Municipal Bond Fund, Inc. (the “Fund”), dated May 31, 2020.
This SAI incorporates by reference the Fund's Annual Report. Obtain the Prospectus or the Annual Report without charge by calling 1-800-341-7400.
Federated Municipal Bond Fund, Inc.
Federated Hermes Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
Contact us at FederatedInvestors.com
or call 1-800-341-7400.
Federated Securities Corp., Distributor
Q453438 (5/20)
© 2020 Federated Hermes, Inc.
How is the Fund Organized?
The Fund is a diversified open-end, management investment company that was established under the laws of the State of Maryland on February 4, 1986.
The Board of Directors (the “Board”) has established the following classes of shares of the Fund, known as Class A Shares, Class B Shares, Class C Shares, Class F Shares, Institutional Shares and Class T Shares (“Shares”). The Fund's investment adviser is Federated Investment Management Company (“Adviser”). This SAI only relates to the Class T Shares. The Fund changed its name from Federated Municipal Securities Fund, Inc. to Federated Municipal Bond Fund, Inc. on July 27, 2017.
Securities in Which the Fund Invests
The principal securities or other investments in which the Fund invests are described in the Fund's Prospectus. The Fund also may invest in securities or other investments as non-principal investments for any purpose that is consistent with its investment objective. The following information is either additional information in respect of a principal security or other investment referenced in the Prospectus or information in respect of a non-principal security or other investment (in which case there is no related disclosure in the Prospectus).
Securities Descriptions And Techniques
Fixed-Income Securities
Fixed-income securities pay interest, dividends or distributions at a specified rate. The rate may be a fixed percentage of the principal or may be adjusted periodically. In addition, the issuer of a fixed-income security must repay the principal amount of the security, normally within a specified time. Fixed-income securities provide more regular income than equity securities. However, the returns on fixed-income securities are limited and normally do not increase with the issuer's earnings. This limits the potential appreciation of fixed-income securities as compared to equity securities.
A security's yield measures the annual income earned on a security as a percentage of its price. A security's yield will increase or decrease depending upon whether it costs less (a “discount”) or more (a “premium”) than the principal amount. If the issuer may redeem the security before its scheduled maturity, the price and yield on a discount or premium security may change based upon the probability of an early redemption. Securities with higher risks generally have higher yields.
The following further describes the types of fixed-income securities in which the Fund may invest.
Asset-Backed Securities (A Type of Fixed-Income, Tax-Exempt Security)
Asset-backed securities are payable from pools of obligations other than mortgages. Most asset-backed securities involve consumer or commercial debts with maturities of less than 10 years. However, almost any type of fixed-income assets (including other fixed-income securities) may be used to create an asset-backed security. Asset-backed securities may take the form of commercial paper, notes or pass-through certificates or other similar securities. Asset-backed securities have prepayment risks.
Tax-Exempt Commercial Paper (A Type of Tax-Exempt Security)
Tax-exempt commercial paper is an obligation issued by a tax-exempt issuer with a maturity of generally less than nine months. Tax-exempt issuers may issue commercial paper to pay for current expenditures or other permissible activities. Tax-exempt issuers may constantly reissue their commercial paper and use the proceeds (or other sources) to repay maturing paper. If the tax-exempt issuer cannot continue to obtain liquidity in this fashion, and if there is not another available source of liquidity, its commercial paper may default or there may be a reduction in payments received in repayment of the tax-exempt commercial paper.
Derivative Contracts
Derivative contracts are financial instruments that require payments based upon changes in the values of designated securities, commodities, indices, or other assets or instruments including other derivative contracts, (each a “Reference Instrument” and collectively, “Reference Instruments”). Each party to a derivative contract may sometimes be referred to as a counterparty. Some derivative contracts require payments relating to an actual, future trade involving the Reference Instrument. These types of derivatives are frequently referred to as “physically settled” derivatives. Other derivative contracts require payments relating to the income or returns from, or changes in the market value of, a Reference Instrument. These types of derivatives are known as “cash settled” derivatives, since they require cash payments in lieu of delivery of the Reference Instrument.
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Many derivative contracts are traded on securities or commodities exchanges. In this case, the exchange sets all the terms of the contract except for the price. Investors make payments due under their contracts through the exchange. Most exchanges require investors to maintain margin accounts through their brokers to cover their potential obligations to the exchange. Parties to the contract make (or collect) daily payments to the margin accounts to reflect losses (or gains) in the value of their contracts. This protects investors against potential defaults by the other party to the contract. Trading contracts on an exchange also allows investors to close out their contracts by entering into offsetting contracts.
For example, the Fund could close out an open contract to buy an asset at a future date by entering into an offsetting contract to sell the same asset on the same date. If the offsetting sale price is more than the original purchase price, the Fund realizes a gain; if it is less, the Fund realizes a loss. Exchanges may limit the amount of open contracts permitted at any one time. Such limits may prevent the Fund from closing out a position. If this happens, the Fund will be required to keep the contract open (even if it is losing money on the contract), and to make any payments required under the contract (even if it has to sell portfolio securities at unfavorable prices to do so). Inability to close out a contract could also harm the Fund by preventing it from disposing of or trading any assets it has been using to secure its obligations under the contract.
The Fund may also trade derivative contracts over-the-counter (OTC) in transactions negotiated directly between the Fund and a financial institution. OTC contracts do not necessarily have standard terms, so they may be less liquid and more difficult to close-out than exchange-traded contracts. In addition, OTC contracts with more specialized terms may be more difficult to value than exchange-traded contracts, especially in times of financial stress.
The market for swaps and other OTC derivatives was largely unregulated prior to the enactment of federal legislation known as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). Regulations enacted by the Commodity Futures Trading Commission (the CFTC) under the Dodd-Frank Act require the Fund to clear certain swap contracts through a clearing house or central counterparty (a CCP).
To clear a swap through the CCP, the Fund will submit the contract to, and post margin with, a futures commission merchant (FCM) that is a clearing house member. The Fund may enter into the swap with a financial institution other than the FCM and arrange for the contract to be transferred to the FCM for clearing, or enter into the contract with the FCM itself. If the Fund must centrally clear a transaction, the CFTC's regulations also generally require that the swap be executed on registered exchange or through a market facility that is known as a swap execution facility or SEF. Central clearing is presently required only for certain swaps and the CFTC is expected to impose a mandatory central clearing requirement for additional derivative instruments over time.
The CCP, SEF and FCM are all subject to regulatory oversight by the CFTC. In addition, most derivative market participants are now regulated as swap dealers or major swap participants and are subject to certain minimum capital and margin requirements and business conduct standards. Similar regulatory requirements are expected to apply to derivative contracts that are subject to the jurisdiction of the SEC, although the SEC has not yet finalized its regulations. In addition, uncleared OTC swaps will be subject to regulatory collateral requirements that could adversely affect the Fund's ability to enter into swaps in the OTC market. These developments could cause the Fund to terminate new or existing swap agreements or to realize amounts to be received under such instruments at an inopportune time.
Until the mandated rulemaking and regulations are implemented completely, it will not be possible to determine the complete impact of the Dodd-Frank Act and related regulations on the Fund.
Depending on how the Fund uses derivative contracts and the relationships between the market value of a derivative contract and the Reference Instrument, derivative contracts may increase or decrease the Fund's exposure to the risks of the Reference Instrument, and may also expose the Fund to liquidity and leverage risks. OTC contracts also expose the Fund to credit risks in the event that a counterparty defaults on the contract, although this risk may be mitigated by submitting the contract for clearing through a CCP.
The Fund may invest in a derivative contract if it is permitted to own, invest in, or otherwise have economic exposure to the Reference Instrument. The Fund is not required to own a Reference Instrument in order to buy or sell a derivative contract relating to that Reference Instrument. The Fund may trade in the following specific types and/or combinations of derivative contracts:
Futures Contracts (A Type of Derivative)
Futures contracts provide for the future sale by one party and purchase by another party of a specified amount of a Reference Instrument at a specified price, date and time. Entering into a contract to buy a Reference Instrument is commonly referred to as buying a contract or holding a long position in the asset. Entering into a contract to sell a Reference Instrument is commonly referred to as selling a contract or holding a short position in the Reference Instrument. Futures contracts are considered to be
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commodity contracts. The Adviser has claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act with respect to the Fund, and therefore is not subject to registration or regulation with respect to the Fund. Futures contracts traded OTC are frequently referred to as forward contracts. The Fund can buy or sell financial futures (such as interest rate futures, index futures and security futures).
Interest Rate Futures
An interest rate futures contract is an exchange-traded contract for which the Reference Instrument is an interest-bearing, fixed-income security or an inter-bank deposit. Two examples of common interest rate futures contracts are U.S. Treasury futures contracts and Eurodollar futures contracts. The Reference Instrument for a U.S. Treasury futures contract is a U.S. Treasury security. The Reference Instrument for a Eurodollar futures contract is the London Interbank Offered Rate (commonly referred to as LIBOR); Eurodollar futures contracts enable the purchaser to obtain a fixed rate for the lending of funds over a stated period of time and the seller to obtain a fixed rate for a borrowing of funds over that same period.
Index Futures
An index futures contract is an exchange-traded contract to make or receive a payment based upon changes in the value of an index. An index is a statistical composite that measures changes in the value of designated Reference Instruments within the index.
Security Futures
A security futures contract is an exchange-traded contract to purchase or sell in the future a specific quantity of a security (other than a Treasury security) or a narrow-based securities index at a certain price. Presently, the only available security futures contracts use shares of a single equity security as the Reference Instrument. However, it is possible that in the future, security futures contracts will be developed that use a single fixed-income security as the Reference Instrument.
Option Contracts (A Type of Derivative)
Option contracts (also called “options”) are rights to buy or sell a Reference Instrument for a specified price (the “exercise price”) during, or at the end of, a specified period. The seller (or “writer”) of the option receives a payment, or premium, from the buyer, which the writer keeps regardless of whether the buyer uses (or exercises) the option. Options may be bought or sold on a wide variety of Reference Instruments. Options that are written on futures contracts will be subject to margin requirements similar to those applied to futures contracts.
The Fund may buy the following types of options:
Call Options
A call option gives the holder (buyer) the right to buy the Reference Instrument from the seller (writer) of the option. The Fund may use call options in the following ways:
■  Buy call options on a Reference Instrument in anticipation of an increase in the value of the Reference Instrument; and
■  Write call options on a Reference Instrument to generate income from premiums, and in anticipation of a decrease or only limited increase in the value of the Reference Instrument. If the Fund writes a call option on a Reference Instrument that it owns and that call option is exercised, the Fund foregoes any possible profit from an increase in the market price of the Reference Instrument over the exercise price plus the premium received.
Put Options
A put option gives the holder the right to sell the Reference Instrument to the writer of the option. The Fund may use put options in the following ways:
■  Buy put options on a Reference Instrument in anticipation of a decrease in the value of the Reference Instrument; and
■  Write put options on a Reference Instrument to generate income from premiums, and in anticipation of an increase or only limited decrease in the value of the Reference Instrument. In writing puts, there is a risk that the Fund may be required to take delivery of the Reference Instrument when its current market price is lower than the exercise price.
The Fund may also buy or write options, as needed, to close out existing option positions.
Finally, the Fund may enter into combinations of options contracts in an attempt to benefit from changes in the prices of those options contracts (without regard to changes in the value of the Reference Instrument).
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Swap Contracts (A Type of Derivative)
A swap contract (also known as a “swap”) is a type of derivative contract in which two parties agree to pay each other (swap) the returns derived from Reference Instruments. Most swaps do not involve the delivery of the underlying assets by either party, and the parties might not own the Reference Instruments. The payments are usually made on a net basis so that, on any given day, the Fund would receive (or pay) only the amount by which its payment under the contract is less than (or exceeds) the amount of the other party's payment. Swap agreements are sophisticated instruments that can take many different forms and are known by a variety of names.
Common swap agreements that the Fund may use include:
Interest Rate Swaps
Interest rate swaps are contracts in which one party agrees to make regular payments equal to a fixed or floating interest rate times a stated principal amount (commonly referred to as a “notional principal amount”) in return for payments equal to a different fixed or floating rate times the same principal amount, for a specific period. For example, a $10 million London Interbank Offered Rate (commonly referred to as LIBOR) swap would require one party to pay the equivalent of the London Interbank Offered Rate of interest (which fluctuates) on $10 million principal amount in exchange for the right to receive the equivalent of a stated fixed rate of interest on $10 million principal amount.
Total Return Swaps
A total return swap is an agreement between two parties whereby one party agrees to make payments of the total return from a Reference Instrument (or a basket of such instruments) during the specified period, in return for payments equal to a fixed or floating rate of interest or the total return from another Reference Instrument. Alternately, a total return swap can be structured so that one party will make payments to the other party if the value of a Reference Instrument increases, but receive payments from the other party if the value of that instrument decreases.
Credit Default Swaps
A credit default swap (CDS) is an agreement between two parties whereby one party (the “Protection Buyer”) agrees to make payments over the term of the CDS to the other party (the “Protection Seller”), provided that no designated event of default, restructuring or other credit related event (each a “Credit Event”) occurs with respect to Reference Instrument that is usually a particular bond, loan or the unsecured credit of an issuer, in general (the “Reference Obligation”). Many CDS are physically settled, which means that if a Credit Event occurs, the Protection Seller must pay the Protection Buyer the full notional value, or “par value,” of the Reference Obligation in exchange for delivery by the Protection Buyer of the Reference Obligation or another similar obligation issued by the issuer of the Reference Obligation (the “Deliverable Obligation”). The Counterparties agree to the characteristics of the Deliverable Obligation at the time that they enter into the CDS. Alternately, a CDS can be “cash-settled,” which means that upon the occurrence of a Credit Event, the Protection Buyer will receive a payment from the Protection Seller equal to the difference between the par amount of the Reference Obligation and its market value at the time of the Credit Event. The Fund may be either the Protection Buyer or the Protection Seller in a CDS. If the Fund is a Protection Buyer and no Credit Event occurs, the Fund will lose its entire investment in the CDS (i.e., an amount equal to the payments made to the Protection Seller over the term of the CDS). However, if a Credit Event occurs, the Fund (as “Protection Buyer”) will deliver the Deliverable Obligation and receive a payment equal to the full notional value of the Reference Obligation, even though the Reference Obligation may have little or no value. If the Fund is the Protection Seller and no Credit Event occurs, the Fund will receive a fixed rate of income throughout the term of the CDS. However, if a Credit Event occurs, the Fund (as “Protection Seller”) will pay the Protection Buyer the full notional value of the Reference Obligation and receive the Deliverable Obligation from the Protection Buyer. A CDS may involve greater risks than if the Fund invested directly in the Reference Obligation. For example, a CDS may increase credit risk since the Fund has exposure to both the issuer of the Reference Obligation and the Counterparty to the CDS.
Caps and Floors (A Type of Swap Contract)
Caps and Floors are contracts in which one party agrees to make payments only if an interest rate or index goes above (Cap) or below (Floor) a certain level in return for a fee from the other party.
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Other Investments, Transactions, Techniques
Investing in Securities of Other Investment Companies
The Fund may invest its assets in securities of other investment companies, including the securities of affiliated money market funds, as an efficient means of implementing its investment strategies and/or managing its uninvested cash. These other investment companies are managed independently of the Fund and incur additional fees and/or expenses which would, therefore, be borne indirectly by the Fund in connection with any such investment. However, the Adviser believes that the benefits and efficiencies of this approach should outweigh the potential additional fees and/or expenses. The Fund may invest in money market securities directly.
Hedging
Hedging transactions are intended to reduce specific risks. For example, to protect the Fund against circumstances that would normally cause the Fund's portfolio securities to decline in value, the Fund may buy or sell a derivative contract that would normally increase in value under the same circumstances. The Fund may also attempt to hedge by using combinations of different derivative contracts, or derivative contracts and securities. The Fund's ability to hedge may be limited by the costs of the derivative contracts. The Fund may attempt to lower the cost of hedging by entering into transactions that provide only limited protection, including transactions that: (1) hedge only a portion of its portfolio; (2) use derivative contracts that cover a narrow range of circumstances; or (3) involve the sale of derivative contracts with different terms. Consequently, hedging transactions will not eliminate risk even if they work as intended. In addition, hedging strategies are not always successful, and could result in increased expenses and losses to the Fund.
Hybrid Instruments
Hybrid instruments combine elements of two different kinds of securities or financial instruments (such as a derivative contract). Frequently, the value of a hybrid instrument is determined by reference to changes in the value of a Reference Instrument (that is a designated security, commodity, index or other asset or instrument including a derivative contract). Hybrid instruments can take on many forms including, but not limited to, the following forms. First, a common form of a hybrid instrument combines elements of a derivative contract with those of another security (typically a fixed-income security). In this case, all or a portion of the interest or principal payable on a hybrid security is determined by reference to changes in the price of a Reference Instrument. Second, hybrid instruments may include convertible securities with conversion terms related to a Reference Instrument.
Depending on the type and terms of the hybrid instrument, its risks may reflect a combination of the risks of investing in the Reference Instrument with the risks of investing in other securities and derivative contracts. Thus, an investment in a hybrid instrument may entail significant risks in addition to those associated with traditional securities or the Reference Instrument. Hybrid instruments are also potentially more volatile than traditional securities or the Reference Instrument. Moreover, depending on the structure of the particular hybrid, it may expose the Fund to leverage risks or carry liquidity risks.
Credit Linked Notes (A Type of Hybrid Instrument)
A credit linked note (CLN) is a type of hybrid instrument in which a special purpose entity issues a structured note (the “Note Issuer”) with respect to which the Reference Instrument is a single bond, a portfolio of bonds or the unsecured credit of an issuer, in general (each a “Reference Credit”). The purchaser of the CLN (the “Note Purchaser”) invests a par amount and receives a payment during the term of the CLN that equals a fixed or floating rate of interest equivalent to a high rated funded asset (such as a bank certificate of deposit) plus an additional premium that relates to taking on the credit risk of the Reference Credit. Upon maturity of the CLN, the Note Purchaser will receive a payment equal to: (i) the original par amount paid to the Note Issuer, if there is no occurrence of a designated event of default, restructuring or other credit event (each a “Credit Event”) with respect to the issuer of the Reference Credit; or (ii) the market value of the Reference Credit, if a Credit Event has occurred. Depending upon the terms of the CLN, it is also possible that the Note Purchaser may be required to take physical delivery of the Reference Credit in the event of a Credit Event. Most credit linked notes use a corporate bond (or a portfolio of corporate bonds) as the Reference Credit. However, almost any type of fixed-income security (including foreign government securities), index or derivative contract (such as a credit default swap) can be used as the Reference Credit.
Repurchase Agreements
Repurchase agreements are transactions in which the Fund buys a security from a dealer or bank and agrees to sell the security back at a mutually agreed-upon time and price. The repurchase price exceeds the sale price, reflecting the Fund's return on the transaction. This return is unrelated to the interest rate on the underlying security. The Fund will enter into repurchase agreements only with banks and other recognized financial institutions, such as securities dealers, deemed creditworthy by the Adviser.
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The Fund's custodian or subcustodian will take possession of the securities subject to repurchase agreements. The Adviser or subcustodian will monitor the value of the underlying security each day to ensure that the value of the security always equals or exceeds the repurchase price.
Repurchase agreements are subject to credit risks.
Reverse Repurchase Agreements (A Type of Fixed-Income, Tax-Exempt Security)
Reverse repurchase agreements (which are considered a type of special transaction for asset segregation purposes) are repurchase agreements in which the Fund is the seller (rather than the buyer) of the securities, and agrees to repurchase them at an agreed-upon time and price. A reverse repurchase agreement may be viewed as a type of borrowing by the Fund. Reverse repurchase agreements are subject to credit risks. In addition, reverse repurchase agreements create leverage risks because the Fund must repurchase the underlying security at a higher price, regardless of the market value of the security at the time of repurchase.
Inter-Fund Borrowing and Third-Party Lending Arrangements
Inter-Fund Borrowing
The Securities and Exchange Commission (SEC) has granted an exemption that permits the Fund and all other funds (“Federated Hermes funds”) advised by subsidiaries of Federated Hermes, Inc. (“Federated Hermes,” formerly, Federated Investors, Inc.”) to lend and borrow money for certain temporary purposes directly to and from other Federated Hermes funds. Participation in this inter-fund lending program is voluntary for both borrowing and lending Federated Hermes funds, and an inter-fund loan is only made if it benefits each participating Federated Hermes fund. Federated Hermes administers the program according to procedures approved by the Fund's Board, and the Board monitors the operation of the program. Any inter-fund loan must comply with certain conditions set out in the exemption, which are designed to assure fairness and protect all participating Federated Hermes funds.
For example, inter-fund lending is permitted only: (a) to meet shareholder redemption requests; (b) to meet commitments arising from “failed” trades; and (c) for other temporary purposes. All inter-fund loans must be repaid in seven days or less. The Fund's participation in this program must be consistent with its investment policies and limitations, and must meet certain percentage tests. Inter-fund loans may be made only when the rate of interest to be charged is more attractive to the lending Federated Hermes fund than market-competitive rates on overnight repurchase agreements (“Repo Rate”) and more attractive to the borrowing Federated Hermes fund than the rate of interest that would be charged by an unaffiliated bank for short-term borrowings (“Bank Loan Rate”), as determined by the Board. The interest rate imposed on inter-fund loans is the average of the Repo Rate and the Bank Loan Rate.
Third-Party Line of Credit
The Fund participates with certain other Federated Hermes Funds, on a several basis, in an up to $500,000,000 unsecured, 364-day, committed, revolving line of credit (LOC) agreement. The LOC was made available to finance temporarily the repurchase or redemption of shares of the Fund, failed trades, payment of dividends, settlement of trades and for other short-term, temporary or emergency general business purposes. The Fund cannot borrow under the LOC if an inter-fund loan is outstanding. The Fund's ability to borrow under the LOC also is subject to the limitations of the 1940 Act and various conditions precedent that must be satisfied before the Fund can borrow. Loans under the LOC are charged interest at a fluctuating rate per annum equal to the highest, on any day, of: (a) (i) the federal funds effective rate; (ii) the one month London Interbank Offered Rate (LIBOR); and (iii) 0.0%; plus (b) a margin. The LOC also requires the Fund to pay, quarterly in arrears and at maturity, its pro rata share of a commitment fee based on the amount of the lenders' commitment that has not been utilized. As of the date of this Statement of Additional Information, there were no outstanding loans. During the most recently ended fiscal year, the Fund did not utilize the LOC.
Asset Segregation
In accordance with the Securities and Exchange Commission (SEC) and SEC staff positions regarding the interpretation of the Investment Company Act of 1940 (“1940 Act”), with respect to derivatives that create a future payment obligation of the Fund, the Fund must “set aside” (referred to sometimes as “asset segregation”) liquid assets, or engage in other SEC- or staff-approved measures, while the derivative contracts are open. For example, with respect to forwards and futures contracts that are not contractually required to “cash-settle,” the Fund must cover its open positions by setting aside cash or readily marketable securities equal to the contracts' full, notional value. With respect to forwards and futures that are contractually required to “cash-settle,” however, the Fund is permitted to set aside cash or readily marketable securities in an amount equal to the Fund's daily marked-to-market (“net”) obligations, if any (i.e., the Fund's daily net liability, if any), rather than the notional value.
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The Fund will employ another approach to segregating assets to cover options that it sells. If the Fund sells a call option, the Fund will set aside either the Reference Instrument subject to the option, cash or readily marketable securities with a value that equals or exceeds the current market value of the Reference Instrument. In no event, will the value of the cash or readily marketable securities set aside by the Fund be less than the exercise price of the call option. If the Fund sells a put option, the Fund will set aside cash or readily marketable securities with a value that equals or exceeds the exercise price of the put option.
The Fund's asset segregation approach for swap agreements varies among different types of swaps. For example, if the Fund enters into a credit default swap as the Protection Buyer, then it will set aside cash or readily marketable securities necessary to meet any accrued payment obligations under the swap. By comparison, if the Fund enters into a credit default swap as the Protection Seller, then the Fund will set aside cash or readily marketable securities equal to the full notional amount of the swap that must be paid upon the occurrence of a Credit Event. For some other types of swaps, such as interest rate swaps, the Fund will calculate the obligations of the counterparties to the swap on a net basis. Consequently, the Fund's current obligation (or rights) under this type of swap will equal only the net amount to be paid or received based on the relative values of the positions held by each counterparty to the swap (the “net amount”). The net amount currently owed by or to the Fund will be accrued daily and the Fund will set aside cash or readily marketable securities equal to any accrued but unpaid net amount owed by the Fund under the swap.
The Fund may reduce the liquid assets segregated to cover obligations under a derivative contract by entering into an offsetting derivative contract. For example, if the Fund sells a put option for the same Reference Instrument as a call option the Fund has sold, and the exercise price of the call option is the same as or higher than the exercise price of the put option, then the Fund may net its obligations under the options and set aside cash or readily marketable securities (including any margin deposited for the options) with a value equal to the greater of: (a) the current market value of the Reference Instrument deliverable under the call option; or (b) the exercise price of the put option.
By setting aside cash or readily marketable securities equal to only its net obligations under swaps and certain cash-settled derivative contracts, the Fund will have the ability to employ leverage to a greater extent than if the Fund were required to segregate cash or readily marketable securities equal to the full notional value of such contracts. The use of leverage involves certain risks. See “Investment Risks.” Unless the Fund has other cash or readily marketable securities to set aside, it cannot trade assets set aside in connection with derivative contracts or special transactions without entering into an offsetting derivative contract or terminating a special transaction. This may cause the Fund to miss favorable trading opportunities or to realize losses on derivative contracts or special transactions. The Fund reserves the right to modify its asset segregation policies in the future to comply with any changes in the positions articulated from time to time by the SEC and its staff.
Generally, special transactions do not cash-settle on a net basis. Consequently, with respect to special transactions, the Fund will set aside cash or readily marketable securities with a value that equals or exceeds the Fund's obligations.
Investing in Exchange-Traded Funds
The Fund may invest in exchange-traded funds (ETFs) as an efficient means of carrying out its investment strategies. As with traditional mutual funds, ETFs charge asset-based fees, although these fees tend to be relatively low. ETFs are traded on stock exchanges or on the over-the-counter market. ETFs do not charge initial sales charges or redemption fees and investors pay only customary brokerage fees to buy and sell ETF shares.
Temporary Investments
The Fund may make temporary investments in taxable, fixed-income securities and the following other taxable securities:
Treasury Securities (A Type of Fixed-Income Security)
Treasury securities are direct obligations of the federal government of the United States. Treasury securities are generally regarded as having minimal credit risks.
Bank Instruments (A Type of Fixed-Income Security)
Bank instruments are unsecured interest-bearing deposits with banks. Bank instruments include, but are not limited to, bank accounts, time deposits, certificates of deposit and banker's acceptances. Yankee instruments are denominated in U.S. dollars and issued by U.S. branches of foreign banks. Eurodollar instruments are denominated in U.S. dollars and issued by non-U.S. branches of U.S. or foreign banks.
Government Securities (A Type of Fixed-Income Security)
Government securities are issued or guaranteed by a federal agency or instrumentality acting under federal authority. Some government securities, including those issued by Government National Mortgage Association (“Ginnie Mae”), are supported by the full faith and credit of the United States and are guaranteed only as to the timely payment of interest and principal.
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Other government securities receive support through federal subsidies, loans or other benefits, but are not backed by the full faith and credit of the United States. For example, the U.S. Treasury is authorized to purchase specified amounts of securities issued by (or otherwise make funds available to) the Federal Home Loan Bank System, Federal Home Loan Mortgage Corporation (“Freddie Mac”), Federal National Mortgage Association (“Fannie Mae”) and Tennessee Valley Authority in support of such obligations.
Some government agency securities have no explicit financial support and are supported only by the credit of the applicable agency, instrumentality or corporation. The U.S. government has provided financial support to Freddie Mac and Fannie Mae, but there is no assurance that it will support these or other agencies in the future.
Investors regard government securities as having minimal credit risks, but not as low as Treasury securities.
The Fund treats mortgage-backed securities guaranteed by a federal agency or instrumentality as government securities. Although such a guarantee helps protect against credit risk, it does not eliminate it entirely or reduce other risks.
Additional Information Related to Freddie Mac and Fannie Mae. The extreme and unprecedented volatility and disruption that impacted the capital and credit markets beginning in 2008 led to market concerns regarding the ability of Freddie Mac and Fannie Mae to withstand future credit losses associated with securities held in their investment portfolios, and on which they provide guarantees, without the direct support of the federal government. On September 7, 2008, Freddie Mac and Fannie Mae were placed under the conservatorship of the Federal Housing Finance Agency (FHFA). Under the plan of conservatorship, the FHFA assumed control of, and generally has the power to direct, the operations of Freddie Mac and Fannie Mae, and is empowered to exercise all powers collectively held by their respective shareholders, directors and officers, including the power to: (1) take over the assets of and operate Freddie Mac and Fannie Mae with all the powers of the shareholders, the directors and the officers of Freddie Mac and Fannie Mae and conduct all business of Freddie Mac and Fannie Mae; (2) collect all obligations and money due to Freddie Mac and Fannie Mae; (3) perform all functions of Freddie Mac and Fannie Mae which are consistent with the conservator's appointment; (4) preserve and conserve the assets and property of Freddie Mac and Fannie Mae; and (5) contract for assistance in fulfilling any function, activity, action or duty of the conservator.
In connection with the actions taken by the FHFA, the Treasury has entered into certain preferred stock purchase agreements (SPAs) with each of Freddie Mac and Fannie Mae which establish the Treasury as the holder of a new class of senior preferred stock in each of Freddie Mac and Fannie Mae. The senior preferred stock was issued in connection with financial contributions from the Treasury to Freddie Mac and Fannie Mae. Although the SPAs are subject to amendment from time to time, currently the Treasury is obligated to provide such financial contributions up to an aggregate maximum amount determined by a formula set forth in the SPAs, and until such aggregate maximum amount is reached, there is not a specific end date to the Treasury's obligations.
The future status and role of Freddie Mac and Fannie Mae could be impacted by (among other things) the actions taken and restrictions placed on Freddie Mac and Fannie Mae by the FHFA in its role as conservator, the restrictions placed on Freddie Mac's and Fannie Mae's operations and activities under the SPAs, market responses to developments at Freddie Mac and Fannie Mae, downgrades or upgrades in the credit ratings assigned to Freddie Mac and Fannie Mae by nationally recognized statistical rating organizations (NRSROs) or ratings services, and future legislative and regulatory action that alters the operations, ownership, structure and/or mission of these institutions, each of which may, in turn, impact the value of, and cash flows on, any securities guaranteed by Freddie Mac and Fannie Mae.
In addition, the future of Freddie Mac and Fannie Mae, and other U.S. government-sponsored enterprises that are not backed by the full faith and credit of the U.S. government (GSEs), remains in question as the U.S. government continues to consider options ranging from structural reform, nationalization, privatization or consolidation, to outright elimination. The issues that have led to significant U.S. government support for Freddie Mac and Fannie Mae have sparked serious debate regarding the continued role of the U.S. government in providing mortgage loan liquidity.
Corporate Debt Securities (A Type of Fixed-Income Security)
Corporate debt securities are fixed-income securities issued by businesses. Notes, bonds, debentures and commercial paper are the most prevalent types of corporate debt securities. The credit risk of corporate debt securities vary widely across issuers.
In addition, the credit risk of an issuer's debt security may vary based on its priority for repayment. For example, higher ranking (“senior”) debt securities have a higher priority than lower ranking (“subordinated”) securities. This means that the issuer might not make payments on subordinated securities while continuing to make payments on senior securities. In addition, in the event of bankruptcy, holders of senior securities may receive amounts otherwise payable to the holders of subordinated securities. Some subordinated securities, such as trust-preferred and capital securities notes, also permit the issuer to defer payments under certain circumstances. For example, insurance companies issue securities known as surplus notes that permit the insurance company to defer any payment that would reduce its capital below regulatory requirements.
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Commercial Paper (A Type of Corporate Debt Security)
Commercial paper is an issuer's obligation with a maturity of less than nine months. Companies typically issue commercial paper to pay for current expenditures. Most issuers constantly reissue their commercial paper and use the proceeds (or bank loans) to repay maturing paper. If the issuer cannot continue to obtain liquidity in this fashion, its commercial paper may default. The short maturity of commercial paper generally reduces both the market and credit risks as compared to other debt securities of the same issuer.
LIQUIDITY RISK MANAGEMENT PROGRAM
The Fund has adopted and implemented a written liquidity risk management program (LRMP) and related procedures to assess and manage the liquidity risk of the Fund in accordance with Section 22(e) of the 1940 Act and Rule 22e-4 thereunder. The Board has designated the Adviser, together with Federated Hermes, Inc.'s (“Federated Hermes,” formerly, Federated Investors, Inc.) other affiliated registered investment advisory subsidiaries that serve as investment advisers to other Federated Hermes funds, to collectively serve as the administrator of the LRMP and the related procedures (the “Administrator”). Rule 22e-4 defines “liquidity risk” as the risk that the Fund will be unable to meet requests to redeem shares issued by the Fund without significant dilution of the remaining investors' interests in the Fund. As a part of the LRMP, the Administrator is responsible for classifying the liquidity of the Fund's portfolio investments in accordance with Rule 22e-4. As part of the LRMP, the Administrator is also responsible for assessing, managing and periodically reviewing the Fund's liquidity risk, for making periodic reports to the Board and the SEC regarding the liquidity of the Fund's investments, and for notifying the Board and the SEC of certain liquidity events specified in Rule 22e-4. The liquidity of the Fund's portfolio investments is determined based on relevant market, trading and investment-specific considerations under the LRMP.
Investment Risks
There are many risk factors which may affect an investment in the Fund. The Fund's principal risks are described in its Prospectus. The following information is either additional information in respect of a principal risk factor referenced in the Prospectus or information in respect of a non-principal risk factor applicable to the Fund (in which case there is no related disclosure in the Prospectus).
Prepayment and Extension Risk
Like municipal mortgage-backed securities, asset-backed securities (including fixed-income or tax-exempt securities that are pooled or collateralized) may be subject to prepayment risks and the possibility that interest and other payments may not be made. Such investments also may be subject to interest rate, credit and the other risks described in the Fund's Prospectus and this SAI.
Risk of Investing in Derivative Contracts and Hybrid Instruments
The Fund's exposure to derivative contracts and hybrid instruments (either directly or through its investment in another investment company) involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. First, changes in the value of the derivative contracts and hybrid instruments in which the Fund invests may not be correlated with changes in the value of the underlying Reference Instruments or, if they are correlated, may move in the opposite direction than originally anticipated. Second, while some strategies involving derivatives may reduce the risk of loss, they may also reduce potential gains or, in some cases, result in losses by offsetting favorable price movements in portfolio holdings. Third, there is a risk that derivative contracts and hybrid instruments may be erroneously priced or improperly valued and, as a result, the Fund may need to make increased cash payments to the counterparty. Fourth, exposure to derivative contracts and hybrid instruments may have tax consequences to the Fund and its shareholders. For example, derivative contracts and hybrid instruments may cause the Fund to realize increased ordinary income or short-term capital gains (which are treated as ordinary income for federal income tax purposes) and, as a result, may increase taxable distributions to shareholders. In addition, under certain circumstances certain derivative contracts and hybrid instruments may cause the Fund to: (a) incur an excise tax on a portion of the income related to those contracts and instruments; and/or (b) reclassify, as a return of capital, some or all of the distributions previously made to shareholders during the fiscal year as dividend income. Fifth, a common provision in OTC derivative contracts permits the counterparty to terminate any such contract between it and the Fund, if the value of the Fund's total net assets declines below a specified level over a given time period. Factors that may contribute to such a decline (which usually must be substantial) include significant shareholder redemptions and/or a marked decrease in the market value of the Fund's investments. Any such termination of the Fund's OTC derivative contracts may adversely affect the Fund (for example, by increasing losses and/or costs, and/or preventing the Fund from fully implementing its investment strategies). Sixth, the Fund may use a derivative contract to benefit from a decline in the value of a Reference Instrument. If the value of the Reference Instrument declines during the term of the contract, the Fund makes a profit on the difference (less any payments the Fund is required to pay under the terms of the contract). Any such strategy involves risk. There is no assurance that the Reference Instrument will decline in value during the term of the contract and make a profit for the Fund. The Reference Instrument may instead appreciate in value
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creating a loss for the Fund. Seventh, a default or failure by a CCP or an FCM (also sometimes called a “futures broker”), or the failure of a contract to be transferred from an Executing Dealer to the FCM for clearing, may expose the Fund to losses, increase its costs, or prevent the Fund from entering or exiting derivative positions, accessing margin or fully implementing its investment strategies. The central clearing of a derivative and trading of a contract over a SEF could reduce the liquidity in, or increase costs of entering into or holding, any contracts. Finally, derivative contracts and hybrid instruments may also involve other risks described herein or in the Fund's Prospectus, such as interest rate, credit, liquidity and leverage risks.
Risk Associated with the Investment Activities of Other Accounts
Investment decisions for the Fund are made independently from those of other accounts managed by the Adviser and accounts managed by affiliates of the Adviser. Therefore, it is possible that investment-related actions taken by such other accounts could adversely impact the Fund with respect to, for example, the value of Fund portfolio holdings and/or prices paid to or received by the Fund on its portfolio transactions and/or the Fund's ability to obtain or dispose of portfolio securities. Related considerations are discussed elsewhere in this SAI under “Brokerage Transactions and Investment Allocation.”
EXCHANGE-TRADED FUNDS RISK
An investment in an exchange-traded fund (ETF) generally presents the same primary risks as an investment in a conventional fund (i.e., one that is not exchange-traded) that has the same investment objectives, strategies and policies. The price of an ETF can fluctuate up or down, and the Fund could lose money investing in an ETF if the prices of the securities owned by the ETF go down. In addition, ETFs may be subject to the following risks that do not apply to conventional funds: (i) the market price of an ETF's shares may trade above or below its net asset value; (ii) an active trading market for an ETF's shares may not develop or be maintained; or (iii) trading of an ETF's shares may be halted if the listing exchange's officials deem such action appropriate, the shares are delisted from the exchange or the activation of market-wide “circuit breakers” (which are tied to large decreases in stock prices) halts stock trading generally.
LIBOR Risk
Certain derivatives or debt securities, or other financial instruments in which the Fund may invest, as well as the Fund's committed, revolving line of credit agreement, utilize or may utilize in the future the London Interbank Offered Rate (LIBOR) as the reference or benchmark rate for interest rate calculations. LIBOR is a measure of the average interest rate at which major global banks can borrow from one another. It is quoted in multiple currencies and tenors using data reported by a panel of private-sector banks. Following allegations of rate manipulation in 2012 and concerns regarding its thin liquidity, the use of LIBOR came under increasing pressure, and in July 2017, the U.K. Financial Conduct Authority, which regulates LIBOR, announced that it will stop encouraging banks to provide the quotations needed to sustain LIBOR after 2021. This may cause LIBOR to cease to be published. LIBOR panel banks have agreed to submit quotations to LIBOR through the end of 2021. Before then, it is expected that market participants will transition to the use of different reference or benchmark rates. However, there is currently no definitive information regarding the future utilization of LIBOR or of any particular replacement rate. Regulators have suggested alternative reference rates, but global consensus is lacking and the process for amending existing contracts or instruments to transition away from LIBOR remains unclear.
While it is expected that market participants will amend financial instruments referencing LIBOR to include fallback provisions and other measures that contemplate the discontinuation of LIBOR or other similar market disruption events, neither the effect of the transition process nor the viability of such measures is known. While market participants have begun transitioning away from LIBOR, there are obstacles to converting certain longer term securities and transactions to a new benchmark or benchmarks. The effectiveness of multiple alternative reference rates as opposed to one primary reference rate has not been determined. The effectiveness of alternative reference rates used in new or existing financial instruments and products has also not yet been determined. As market participants transition away from LIBOR, LIBOR's usefulness may deteriorate, which could occur prior to the end of 2021. The transition process may lead to increased volatility and illiquidity in markets that currently rely on LIBOR to determine interest rates. LIBOR's deterioration may adversely affect the liquidity and/or market value of securities that use LIBOR as a benchmark interest rate, including securities and other financial instruments held by the Fund. Further, the utilization of an alternative reference rate, or the transition process to an alternative reference rate, may adversely affect the Fund's performance.
CYBERSECURITY RISK
Like other funds and business enterprises, Federated Hermes' business relies on the security and reliability of information and communications technology, systems and networks. Federated Hermes uses digital technology, including, for example, networked systems, email and the Internet, to conduct business operations and engage clients, customers, employees, products, accounts, shareholders, and relevant service providers, among others. Federated Hermes, as well as its funds and certain service providers, also
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generate, compile and process information for purposes of preparing and making filings or reports to governmental agencies, and a cybersecurity attack or incident that impacts that information, or the generation and filing processes, may prevent required regulatory filings and reports from being made. The use of the Internet and other electronic media and technology exposes the Fund, the Fund's shareholders, and the Fund's service providers, and their respective operations, to potential risks from cybersecurity attacks or incidents (collectively, “cyber-events”).
Cyber-events can result from intentional (or deliberate) attacks or unintentional events by insiders or third parties, including cybercriminals, competitors, nation-states and “hacktivists,” among others. Cyber-events may include, for example, phishing, use of stolen access credentials, unauthorized access to systems, networks or devices (such as, for example, through “hacking” activity), structured query language attacks, infection from or spread of malware, ransomware, computer viruses or other malicious software code, corruption of data, and attacks (including, but not limited to, denial of service attacks on websites) which shut down, disable, slow, impair or otherwise disrupt operations, business processes, technology, connectivity or website or internet access, functionality or performance. Like other funds and business enterprises, the Fund and its service providers have experienced, and will continue to experience, cyber-events on a daily basis. In addition to intentional cyber-events, unintentional cyber-events can occur, such as, for example, the inadvertent release of confidential information. To date, cyber-events have not had a material adverse effect on the Fund's business operations or performance.
Cyber-events can affect, potentially in a material way, Federated Hermes' relationships with its customers, employees, products, accounts, shareholders and relevant service providers. Any cyber-event could adversely impact the Fund and its shareholders and cause the Fund to incur financial loss and expense, as well as face exposure to regulatory penalties, reputational damage and additional compliance costs associated with corrective measures. A cyber-event may cause the Fund, or its service providers, to lose proprietary information, suffer data corruption, lose operational capacity (such as, for example, the loss of the ability to process transactions, calculate the Fund's NAV, or allow shareholders to transact business or other disruptions to operations), and/or fail to comply with applicable privacy and other laws. Among other potentially harmful effects, cyber-events also may result in theft, unauthorized monitoring and failures in the physical infrastructure or operating systems that support the Fund and its service providers. In addition, cyber-events affecting issuers in which the Fund invests could cause the Fund's investments to lose value.
The Fund's Adviser and its relevant affiliates have established risk management systems reasonably designed to seek to reduce the risks associated with cyber-events. The Fund's Adviser employs various measures aimed at mitigating cybersecurity risk, including, among others, use of firewalls, system segmentation, system monitoring, virus scanning, periodic penetration testing, employee phishing training and an employee cybersecurity awareness campaign. Among other vendor management efforts, Federated Hermes also conducts due diligence on key service providers (or vendors) relating to cybersecurity. Federated Hermes has established a committee to oversee Federated Hermes' information security and data governance efforts, and updates on cyber-events and risks are reviewed with relevant committees, as well as Federated Hermes' and the Fund's Boards of Directors or Trustees (or a committee thereof), on a periodic (generally quarterly) basis (and more frequently when circumstances warrant) as part of risk management oversight responsibilities. However, there is no guarantee that the efforts of Federated Hermes, the Fund's Adviser or its affiliates, or other service providers, will succeed, either entirely or partially as there are limits on Federated Hermes' and the Fund's ability to prevent, detect or mitigate cyber-events. Among other reasons, the cybersecurity landscape is constantly evolving, the nature of malicious cyber-events is becoming increasingly sophisticated and the Fund's Adviser, and its relevant affiliates, cannot control the cyber systems and cybersecurity systems of issuers or third-party service providers.
Investment Objective (and Policies) and Investment Limitations
The investment objective of the Fund is to provide for its shareholders a high level of current income which is exempt from federal regular income tax.
The Fund will invest its assets so that at least 80% of the income that it distributes will be exempt from federal regular income tax.
The fundamental investment objective and policy may not be changed by the Board without shareholder approval.
Diversification
With respect to securities comprising 75% of the value of its total assets, the Fund will not purchase securities of any one issuer (other than cash, cash items, securities issued or guaranteed by the government of the United States or its agencies or instrumentalities and repurchase agreements collateralized by such U.S. government securities, and securities of other investment companies) if, as a result, more than 5% of the value of its total assets would be invested in the securities of that issuer, or the Fund would own more than 10% of the outstanding voting securities of that issuer.
Borrowing Money and Issuing Senior Securities
The Fund may borrow money, directly or indirectly, and issue senior securities to the maximum extent permitted under the Investment Company Act of 1940 (“1940 Act”).
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Investing in Real Estate
The Fund may not purchase or sell real estate, provided that this restriction does not prevent the Fund from investing in issuers which invest, deal, or otherwise engage in transactions in real estate or interests therein, or investing in securities that are secured by real estate or interests therein. The Fund may exercise its rights under agreements relating to such securities, including the right to enforce security interests and to hold real estate acquired by reason of such enforcement until that real estate can be liquidated in an orderly manner.
Investing in Commodities
The Fund may not purchase or sell physical commodities, provided that the Fund may purchase securities of companies that deal in commodities. For purposes of this restriction, investments in transactions involving futures contracts and options, forward currency contracts, swap transactions and other financial contracts that settle by payment of cash are not deemed to be investments in commodities.
Underwriting
The Fund may not underwrite the securities of other issuers, except that the Fund may engage in transactions involving the acquisition, disposition or resale of its portfolio securities, under circumstances where it may be considered to be an underwriter under the Securities Act of 1933.
Lending
The Fund may not make loans, provided that this restriction does not prevent the Fund from purchasing debt obligations, entering into repurchase agreements, lending its assets to broker/dealers or institutional investors and investing in loans, including assignments and participation interests.
Concentration
The Fund will not make investments that will result in the concentration of its investments in the securities of issuers primarily engaged in the same industry, provided that the Fund may invest more that 25% of the value of its assets in industrial development bonds. Government securities, municipal securities and bank instruments will not be deemed to constitute an industry. As to industrial development bonds, the Fund may purchase securities of an issuer resulting in the ownership of more than 25% of the Fund's assets in one industry, and the Fund reserves the right to invest more than 25% of its assets in industrial development bonds in the same state.
The above limitations cannot be changed unless authorized by the Board and by the “vote of a majority of the Fund's outstanding voting securities,” as defined by the 1940 Act. The following limitations, however, may be changed by the Board without shareholder approval. Shareholders will be notified before any material change in these limitations becomes effective.
Pledging Assets
The Fund will not mortgage, pledge or hypothecate any of its assets, provided that this shall not apply to the transfer of securities in connection with any permissible borrowing or to collateral arrangements in connection with permissible activities.
Purchases on Margin
The Fund will not purchase securities on margin, provided that the Fund may obtain short-term credits necessary for the clearance of purchases and sales of securities, and further provided that the Fund may make margin deposits in connection with its use of financial options and futures, forward and spot currency contracts, swap transactions and other financial contracts or derivative instruments.
Restricted Securities
The Fund may invest in restricted securities. Restricted securities are any securities in which the Fund may invest pursuant to its investment objective and policies but which are subject to restrictions on resale under federal securities law. Under criteria established by the board, certain restricted securities are determined to be liquid. To the extent that restricted securities are not determined to be liquid, the Fund will limit their purchase, together with other illiquid securities, to 15% of its net assets.
ADDITIONAL INFORMATION
To conform to the current view of the SEC staff that only domestic bank instruments may be excluded from industry concentration limitations, as a matter of non-fundamental policy, the Fund will not exclude foreign bank instruments from industry concentration tests as long as the policy of the SEC remains in effect.
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The Fund applies its concentration of investments restrictions as follows:
■  utility companies will be divided according to their services, for example, gas, gas transmissions, electric and telephone will each be considered a separate industry;
■  financial service companies will be classified according to the end users of their services, for example, automobile finance, bank finance and diversified finance will each be considered a separate industry; and
■  asset-backed securities will be classified according to the underlying assets securing such securities.
For purposes of the above limitations, the Fund considers certificates of deposit and demand and time deposits issued by a U.S. branch of a domestic bank or savings association having capital, surplus and undivided profits in excess of $100,000,000 at the time of investment to be “cash items” and “bank instruments.”
As a matter of non-fundamental operating policy, the Fund will not exclude domestic bank instruments or foreign bank instruments from industry concentration limitations so long as it is the SEC staff's view that such instruments should not be excluded from industry concentration tests.
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 limitation.
As a matter of non-fundamental policy, for purposes of the restricted securities policy, illiquid securities are securities that the Fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
What Do Shares Cost?
Determining Market Value of Securities
A Share's net asset value (NAV) is determined as of the end of regular trading on the New York Stock Exchange (NYSE) (normally 4:00 p.m. Eastern time) each day the NYSE is open. The Fund calculates the NAV of each class by valuing the assets allocated to the Share's class, subtracting the liabilities allocated to each class and dividing the balance by the number of Shares of the class outstanding. The NAV for each class of Shares may differ due to the level of expenses allocated to each class as well as a result of the variance between the amount of accrued investment income and capital gains or losses allocated to each class and the amount actually distributed to shareholders of each class. The NAV is calculated to the nearest whole cent per Share.
In calculating its NAV, the Fund generally values investments as follows:
■  Equity securities listed on a U.S. securities exchange or traded through the U.S. national market system are valued at their last reported sale price or official closing price in their principal exchange or market. If a price is not readily available, such equity securities are valued based upon the mean of closing bid and asked quotations from one or more dealers.
■  Other equity securities traded primarily in the United States are valued based upon the mean of closing bid and asked quotations from one or more dealers.
■  Equity securities traded primarily through securities exchanges and regulated market systems outside the United States are valued at their last reported sale price or official closing price in their principal exchange or market. These prices may be adjusted for significant events occurring after the closing of such exchanges or market systems as described below. If a price is not readily available, such equity securities are valued based upon the mean of closing bid and asked quotations from one or more dealers.
■  Fixed-income securities are fair valued using price evaluations provided by a pricing service approved by the Board. The methods used by pricing services to determine such price evaluations are described below. If a price evaluation from a pricing service is not readily available, such fixed-income securities are fair valued based upon price evaluations from one or more dealers.
■  Futures contracts listed on exchanges are valued at their reported settlement price. Option contracts listed on exchanges are valued based upon the mean of closing bid and asked quotations reported by the exchange or from one or more futures commission merchants.
■  OTC derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Board. The methods used by pricing services to determine such price evaluations are described below. If a price evaluation from a pricing service is not readily available, such derivative contracts may be fair valued based upon price evaluations from one or more dealers or using a recognized pricing model for the contract.
■  Shares of other mutual funds or non-exchange-traded investment companies are valued based upon their reported NAVs. The prospectuses for these mutual funds explain the circumstances under which they will use fair value pricing and the effects of using fair value pricing.
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If any price, quotation, price evaluation or other pricing source is not readily available when the NAV is calculated, if the Fund cannot obtain price evaluations from a pricing service or from more than one dealer for an investment within a reasonable period of time as set forth in the Fund's valuation policies and procedures, or if information furnished by a pricing service, in the opinion of the Valuation Committee, is deemed not representative of the fair value of such security, the Fund will use the fair value of the investment determined in accordance with the procedures described below. There can be no assurance that the Fund could purchase or sell an investment at the price used to calculate the Fund's NAV. The Fund will not use a pricing service or dealer who is an affiliated person of the Adviser to value investments.
Noninvestment assets and liabilities are valued in accordance with U.S. Generally Accepted Accounting Principles (GAAP). The NAV calculation includes expenses, dividend income, interest income, other income and realized and unrealized investment gains and losses through the date of the calculation. Changes in holdings of investments and in the number of outstanding Shares are included in the calculation not later than the first business day following such change. Any assets or liabilities denominated in foreign currencies are converted into U.S. dollars using an exchange rate obtained from one or more currency dealers.
The Fund follows procedures that are common in the mutual fund industry regarding errors made in the calculation of its NAV. This means that, generally, the Fund will not correct errors of less than one cent per Share or errors that did not result in net dilution to the Fund.
Fair Valuation and Significant Events Procedures
The Board has ultimate responsibility for determining the fair value of investments for which market quotations are not readily available. The Board has appointed a Valuation Committee comprised of officers of the Fund, the Adviser and certain of the Adviser's affiliated companies to assist in determining fair value and in overseeing the calculation of the NAV. The Board has also authorized the use of pricing services recommended by the Valuation Committee to provide price evaluations of the current fair value of certain investments for purposes of calculating the NAV.
Pricing Service Valuations. Based on the recommendations of the Valuation Committee, the Board has authorized the Fund, subject to Board oversight, to use pricing services that provide daily fair value evaluations of the current value of certain investments, primarily fixed-income securities and OTC derivatives contracts. Different pricing services may provide different price evaluations for the same security because of differences in their methods of evaluating market values. Factors considered by pricing services in evaluating an investment include the yields or prices of investments of comparable quality, coupon, maturity, call rights and other potential prepayments, terms and type, reported transactions, indications as to values from dealers and general market conditions. A pricing service may find it more difficult to apply these and other factors to relatively illiquid or volatile investments, which may result in less frequent or more significant changes in the price evaluations of these investments. If a pricing service determines that it does not have sufficient information to use its standard methodology, it may evaluate an investment based on the present value of what investors can reasonably expect to receive from the issuer's operations or liquidation.
Special valuation considerations may apply with respect to the Fund's “odd-lot” positions, if any, as the Fund may receive lower prices when it sells such positions than it would receive for sales of institutional round lot positions. Typically, these securities are valued assuming orderly transactions of institutional round lot sizes, but the Fund may hold or, from time to time, transact in such securities in smaller, odd lot sizes.
The Valuation Committee engages in oversight activities with respect to the Fund's pricing services, which includes, among other things, monitoring significant or unusual price fluctuations above predetermined tolerance levels from the prior day, back-testing of pricing services' prices against actual sale transactions, conducting periodic due diligence meetings and reviews, and periodically reviewing the inputs, assumptions and methodologies used by these pricing services. If information furnished by a pricing service is not readily available or, in the opinion of the Valuation Committee, is deemed not representative of the fair value of such security, the security will be fair valued by the Valuation Committee in accordance with procedures established by the Directors as discussed below in “Fair Valuation Procedures.”
Some pricing services provide a single price evaluation reflecting the bid-side of the market for an investment (a “bid” evaluation). Other pricing services offer both bid evaluations and price evaluations indicative of a price between the prices bid and asked for the investment (a “mid” evaluation). The Fund normally uses bid evaluations for any U.S. Treasury and Agency securities, mortgage-backed securities and municipal securities. The Fund normally uses mid evaluations for any other types of fixed-income securities and any OTC derivative contracts.
Fair Valuation Procedures. The Board has established procedures for determining the fair value of investments for which price evaluations from pricing services or dealers and market quotations are not readily available. The procedures define an investment's “fair value” as the price that the Fund might reasonably expect to receive upon its current sale. The procedures assume that any sale would be made to a willing buyer in the ordinary course of trading. The procedures require consideration of factors that vary based on the type of investment and the information available. Factors that may be considered in determining an investment's fair value include: (1) the last reported price at which the investment was traded; (2) information provided by dealers or investment analysts
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regarding the investment or the issuer; (3) changes in financial conditions and business prospects disclosed in the issuer's financial statements and other reports; (4) publicly announced transactions (such as tender offers and mergers) involving the issuer; (5) comparisons to other investments or to financial indices that are correlated to the investment; (6) with respect to fixed-income investments, changes in market yields and spreads; (7) with respect to investments that have been suspended from trading, the circumstances leading to the suspension; and (8) other factors that might affect the investment's value.
The Valuation Committee is responsible for the day-to-day implementation of these procedures subject to Board oversight. The Valuation Committee may also authorize the use of a financial valuation model to determine the fair value of a specific type of investment. The Board periodically reviews and approves the fair valuations made by the Valuation Committee and any changes made to the procedures.
Using fair value to price investments may result in a value that is different from an investment's most recent closing price and from the prices used by other mutual funds to calculate their NAVs. The application of the fair value procedures to an investment represent a good faith determination of an investment's fair value. There can be no assurance that the Fund could obtain the fair value assigned to an investment if it sold the investment at approximately the time at which the Fund determines its NAV per share.
Significant Events. The Board has adopted procedures requiring an investment to be priced at its fair value whenever the Adviser determines that a significant event affecting the value of the investment has occurred between the time as of which the price of the investment would otherwise be determined and the time as of which the NAV is computed. An event is considered significant if there is both an affirmative expectation that the investment's value will change in response to the event and a reasonable basis for quantifying the resulting change in value. Examples of significant events that may occur after the close of the principal market on which a security is traded, or the time of a price evaluation provided by a pricing service or a dealer, include:
■  With respect to securities traded principally in foreign markets, significant trends in U.S. equity markets or in the trading of foreign securities index futures contracts;
■  Political or other developments affecting the economy or markets in which an issuer conducts its operations or its securities are traded; and
■  Announcements concerning matters such as acquisitions, recapitalizations or litigation developments, or a natural disaster affecting the issuer's operations or regulatory changes or market developments affecting the issuer's industry.
The Board has adopted procedures whereby the Valuation Committee uses a pricing service to provide factors to update the fair value of equity securities traded principally in foreign markets from the time of the close of their respective foreign stock exchanges to the pricing time of the Fund. The pricing service uses models that correlate changes between the closing and opening price of equity securities traded primarily in non-U.S. markets to changes in prices in U.S.-traded securities and derivative contracts. The pricing service seeks to employ the model that provides the most significant correlation based on a periodic review of the results. The model uses the correlation to adjust the reported closing price of a foreign equity security based on information available up to the close of the NYSE.
For other significant events, the Fund may seek to obtain more current quotations or price evaluations from alternative pricing sources. If a reliable alternative pricing source is not available, the fair value of the investment is determined using the methods discussed above in “Fair Valuation Procedures.” The Board has ultimate responsibility for any fair valuations made in response to a significant event.
How is the Fund Sold?
Under the Distributor's Contract with the Fund, the Distributor (“Federated Securities Corp.”) offers Shares on a continuous, best-efforts basis.
Additional Payments To Financial Intermediaries
The Distributor may pay out of its own resources amounts to certain financial intermediaries, including broker-dealers, banks, registered investment advisers, independent financial planners and retirement plan administrators. In some cases, such payments may be made by, or funded from the resources of, companies affiliated with the Distributor (including the Adviser). While Financial Industry Regulatory Authority, Inc. (FINRA) regulations limit the sales charges that you may bear, there are no limits with regard to the amounts that the Distributor may pay out of its own resources. In addition to the payments which are generally described herein and in the Prospectus, the financial intermediary also may receive payments under the Rule 12b-1 Plan and/or Service Fees. In connection with these payments, the financial intermediary may elevate the prominence or profile of the Fund and/or other Federated Hermes funds within the financial intermediary's organization by, for example, placement on a list of preferred or recommended funds and/or granting the Distributor preferential or enhanced opportunities to promote the funds in various ways within the financial intermediary's organization. The same financial intermediaries may receive payments under more than one or
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all categories. These payments assist in the Distributor's efforts to support the sale of Shares. These payments are negotiated and may be based on such factors as: the number or value of Shares that the financial intermediary sells or may sell; the value of client assets invested; the level and types of services or support furnished by the financial intermediary; or the Fund's and/or other Federated Hermes funds' relationship with the financial intermediary. Not all financial intermediaries receive such payments and the amount of compensation may vary by intermediary. You should ask your financial intermediary for information about any payments it receives from the Distributor or the Federated Hermes funds and any services it provides, as well as the fees and/or commissions it charges.
The categories of additional payments are described below.
Supplemental Payments
The Distributor may make supplemental payments to certain financial intermediaries that are holders or dealers of record for accounts in one or more of the Federated Hermes funds. These payments may be based on such factors as: the number or value of Shares the financial intermediary sells or may sell; the value of client assets invested; or the type and nature of services or support furnished by the financial intermediary.
Processing Support Payments
The Distributor may make payments to certain financial intermediaries that sell Federated Hermes fund shares to help offset their costs associated with client account maintenance support, statement processing and transaction processing. The types of payments that the Distributor may make under this category include: payment of ticket charges on a per-transaction basis; payment of networking fees; and payment for ancillary services such as setting up funds on the financial intermediary's mutual fund trading system.
Retirement Plan Program Servicing Payments
The Distributor may make payments to certain financial intermediaries who sell Federated Hermes fund shares through retirement plan programs. A financial intermediary may perform retirement plan program services itself or may arrange with a third party to perform retirement plan program services. In addition to participant recordkeeping, reporting or transaction processing, retirement plan program services may include: services rendered to a plan in connection with fund/investment selection and monitoring; employee enrollment and education; plan balance rollover or separation; or other similar services.
Marketing Support Payments
From time to time, the Distributor, at its expense, may provide additional compensation to financial intermediaries that sell or arrange for the sale of Shares. Such compensation, provided by the Distributor, may include financial assistance to financial intermediaries that enable the Distributor to participate in or present at conferences or seminars, sales or training programs for invited registered representatives and other employees, client entertainment, client and investor events and other financial intermediary-sponsored events. Such compensation may also be used for the provision of sales-related data to the Adviser and/or its affiliates.
The Distributor also may hold or sponsor, at its expense, sales events, conferences and programs for employees or associated persons of financial intermediaries and may pay the travel and lodging expenses of attendees. The Distributor also may provide, at its expense, meals and entertainment in conjunction with meetings with financial intermediaries. Other compensation may be offered to the extent not prohibited by applicable federal or state law or regulations, or the rules of any self-regulatory agency, such as FINRA. These payments may vary depending on the nature of the event or the relationship.
For the year ended December 31, 2019, the following is a list of FINRA member firms that received additional payments from the Distributor or an affiliate. Additional payments may also be made to certain other financial intermediaries that are not FINRA member firms that sell Federated Hermes fund shares or provide services to the Federated Hermes funds and shareholders. These firms are not included in this list. Any additions, modifications or deletions to the member firms identified in this list that have occurred since December 31, 2019, are not reflected. You should ask your financial intermediary for information about any additional payments it receives from the Distributor.
Access Point, LLC
ADP Broker-Dealer, Inc.
American Enterprise Investment Services Inc.
American Portfolios Advisors Inc.
Ascensus Broker Dealer Services LLC
Avantax Investment Services, Inc.
Banc of America Investment Services, Inc.
BB&T Securities, LLC
BBVA Securities Inc.
BMO Harris Financial Advisors, Inc.
Broadridge Business Process Outsourcing, LLC
Brown Brothers Harriman & Company
Cadaret, Grant & Co., Inc.
Caitlin John, LLC
Calton & Associates, Inc.
Cambridge Financial Group, Inc.
 
16
Castle Rock Wealth Management, LLC
CBIZ Financial Solutions, Inc.
Cetera Advisor Networks LLC
Cetera Advisors LLC
Cetera Financial Specialists LLC
Cetera Investment Advisers LLC
Cetera Investment Services LLC
Charles Schwab & Company, Inc.
Citigroup Global Markets Inc.
Citizens Securities, Inc.
Comerica Securities, Inc.
Commonwealth Financial Network
Concord Wealth Partners
CVAGS, Inc.
D.A. Davidson & Co.
Davenport & Company LLC
David Lerner Associates, Inc.
Deutsche Bank Securities Inc.
E*Trade Securities LLC
Edward D. Jones & Co., LP
Emerald Advisors, LLC
Envestnet Asset Management, Inc.
Epic Advisors Inc.
ESL Investment Services, LLC
FBL Marketing Services, LLC
Fidelity Investments Institutional Operations Company, Inc. (FIIOC)
Fiducia Group, LLC
Fieldpoint Private Securities, LLC
Fifth Third Securities, Inc.
FIS Brokerage & Securities Services LLC
Folger Nolan Fleming Douglas Incorporated
Franklin/Templeton Distributors, Inc.
FSC Securities Corporation
Gitterman Wealth Management LLC
Goldman Sachs & Co. LLC
Great-West Life & Annuity Insurance Company
GWFS Equities, Inc.
Hancock Whitney Investment Services, Inc.
Hefren-Tillotson Inc.
Henderson Global Investors Limited
HighTower Securities, LLC
Hilltop Securities Inc.
The Huntington Investment Company
Independent Financial Group, LLC
Industrial and Commercial Bank of China
Financial Services LLC
Infinex Investments, Inc.
Institutional Cash Distributors, LLC
INTL FCStone Financial Inc.
J.J.B. Hilliard, W.L. Lyons, LLC
J.P. Morgan Securities LLC
Janney Montgomery Scott LLC
Kestra Investment Services, LLC
Key Investment Services, LLC
KeyBanc Capital Markets, Inc.
KMS Financial Services, Inc.
Laidlaw Wealth Management LLC
Lincoln Financial Securities Corporation
Lincoln Investment Planning, LLC
LPL Financial LLC
M Holdings Securities, Inc.
M&T Securities Inc.
Materetsky Financial Group
Mercer Global Advisors Inc.
Merrill Lynch, Pierce, Fenner and Smith Incorporated
Mid Atlantic Capital Corp.
MML Investors Services, LLC
Morgan Stanley Smith Barney LLC
National Financial Services LLC
Nationwide Investment Services Corporation
NBC Securities, Inc.
Newport Group, Inc.
Northwestern Mutual Investment Services, LLC
NYLIFE Distributors LLC
NYLIFE Securities LLC
Oneamerica Securities, Inc.
Open Range Financial Group, LLC
Oppenheimer & Company, Inc.
Paychex Securities Corp
Pensionmark Financial Group, LLC
People's Securities, Inc.
Pershing LLC
Piper Jaffray & Co.
Pitcairn Trust Company
Planmember Securities Corporation
PNC Capital Markets, LLC
PNC Investments LLC
Principal Securities, Inc.
Private Client Services, LLC
Procyon Private Wealth Partners, LLC
Proequities, Inc.
Prudential Investment Management Services, LLC
Purshe Kaplan Sterling Investments
Raymond James & Associates, Inc.
Raymond James Financial Services, Inc.
RBC Capital Markets, LLC
Regal Investment Advisors LLC
Resources Investment Advisors, Inc.
Robert W. Baird & Co. Inc.
Royal Alliance Associates Inc.
SA Stone Wealth Management Inc.
SagePoint Financial, Inc.
Sageview Advisory Group, LLC
Securian Financial Services, Inc.
Securities America, Inc.
Securities Service Network, Inc.
Security Distributors LLC
17
Sentry Advisors, LLC
Sigma Financial Corporation
Spire Securities LLC
State Street Global Markets, LLC
Stephens Inc.
Stifel, Nicolaus & Company, Incorporated
Strategic Benefits Consultants, Inc.
Summit Financial Group, Inc.
Suntrust Investment Services, Inc.
Suntrust Robinson Humphrey, Inc.
TD Ameritrade, Inc.
Thrivent Investment Management, Inc.
TIAA CREF Individual & Institutional Services LLC
Towerpoint Wealth, LLC
Transamerica Financial Advisors, Inc.
Triad Advisors, LLC
U.S. Bancorp Investments, Inc.
UBS Financial Services Inc.
UBS Securities LLC
United Planners Financial Services of America
Valic Financial Advisors, Inc.
Valor Financial Securities LLC
The Vanguard Group, Inc.
Vanguard Marketing Corporation
Vining-Sparks IBG, Limited Partnership
Vision Financial Markets, LLC
Voya Financial Advisors, Inc.
Voya Financial Partners, LLC
Voya Retirement Advisors, LLC
The Wealth Enhancement Group, Inc.
Wells Fargo Clearing Services LLC
Wells Fargo Securities, LLC
Wintrust Investments, LLC
Woloshin Investment Management LLC
Woodbury Financial Services, Inc.
World Equity Group, Inc.
XML Financial, LLC
UNDERWRITING COMMISSIONS
The following chart reflects the total front-end sales charges and/or contingent deferred sales charges paid in connection with the sale of Class A Shares, Class B Shares, Class C Shares and Class F Shares and the amount retained by the Distributor for the last three fiscal years ended March 31:
  2020 2019 2018
  Total Sales
Charges 		Amount
Retained 		Total Sales
Charges 		Amount
Retained 		Total Sales
Charges 		Amount
Retained
Class A Shares $35,964 $10,606 $52,025 $6,040 $81,209 $10,260
Class B Shares $142 $142 $1,741 $1,741 $2,694 $2,694
Class C Shares $1,178 $1,178 $487 $487 $555 $555
Class F Shares $91,656 $15,767 $24,922 $11,978 $31,503 $7,970
Purchases In-Kind
You may contact the Distributor to request a purchase of Shares using securities you own. The Fund reserves the right to determine whether to accept your securities and the minimum market value to accept. The Fund will value your securities in the same manner as it values its assets. An in-kind purchase may be treated as a sale of your securities for federal tax purposes; please consult your tax adviser regarding potential tax liability.
Redemption In-Kind
Although the Fund generally intends to pay Share redemptions in cash, it reserves the right, on its own initiative or in response to a shareholder request, to pay the redemption price in whole or in part by a distribution of the Fund's portfolio securities.
Because the Fund has elected to be governed by Rule 18f-1 under the 1940 Act, the Fund is obligated to pay Share redemptions to any one shareholder in cash only up to the lesser of $250,000 or 1% of the net assets represented by such Share class during any 90-day period.
Any Share redemption payment greater than this amount will also be in cash unless the Fund elects to pay all or a portion of the remainder of the redemption in portfolio securities, valued in the same way as the Fund determines its NAV.
Redemption in-kind is not as liquid as a cash redemption. Shareholders receiving the portfolio securities could have difficulty selling them, may incur related transaction costs and would be subject to risks of fluctuations in the securities' values prior to sale.
18
Account and Share Information
Voting Rights
Each Share of the Fund gives the shareholder one vote in Director elections and other matters submitted to shareholders for vote.
All Shares of the Fund have equal voting rights, except that in matters affecting only a particular class, only Shares of that class are entitled to vote.
Directors may be removed by the Board or by shareholders at a special meeting. A special meeting of shareholders will be called by the Board upon the written request of shareholders who own at least 10% of the Corporation's outstanding Shares.
As of May 7, 2020 the following shareholders owned of record, beneficially, or both, 5% or more of outstanding Class A Shares: Edward D. Jones & Co., St. Louis, MO, owned approximately 5,003,259 Shares (19.90%); National Financial Services LLC, New York, NY, owned approximately 1,758,537 Shares (6.99%); Wells Fargo Clearing Services LLC, St. Louis, MO, owned approximately 1,613,123 Shares (6.41%); and Morgan Stanley Smith Barney, LLC & Co., New York, NY, owned approximately 1,497,309 Shares (5.95%).
As of May 7, 2020, the following shareholders owned of record, beneficially, or both, 5% or more of outstanding Class B Shares: Pershing LLC, Jersey City, NJ, owned approximately 68,534 Shares (37.26%); Charles Schwab & Co., Inc., San Francisco, CA, owned approximately 49,284 Shares (26.79%); Wells Fargo Clearing Services LLC, St. Louis, MO, owned approximately 21,126 Shares (11.48%); National Financial Services LLC, New York, NY, owned approximately 14,651 Shares (7.96%); and Raymond James, St. Petersburg, FL, owned approximately 11,309 Shares (6.14%).
As of May 7, 2020, the following shareholders owned of record, beneficially, or both, 5% or more of outstanding Class C Shares: Wells Fargo Clearing Services LLC, St. Louis, MO, owned approximately 181,353 Shares (23.23%); Edward D. Jones & Co., St. Louis, MO, owned approximately 84,866 Shares (10.87%); J.P Morgan Securities LLC, Brooklyn, NY, owned approximately 80,376 Shares (10.29%); MLPF&S, Jacksonville, FL, owned approximately 59,512 Shares (7.62%); UBS WM USA, Weehawken, NJ, owned approximately 43,185 Shares (5.53%); and National Financial Services LLC, New York, NY, owned approximately 40,231 Shares (5.15%).
As of May 7, 2020, the following shareholders owned of record, beneficially, or both, 5% or more of outstanding Class F Shares: Edward D. Jones & Co., St. Louis, MO, owned approximately 1,666,807 Shares (59.99%); Pershing LLC, Jersey City, NJ, owned approximately 320,977 Shares (11.55%); National Financial Services LLC, New York, NY, owned approximately 250,876 Shares (9.03%); and Morgan Stanley Smith Barney LLC, New York, owned approximately 144,955 Shares (5.36%).
As of May 7, 2020, the following shareholders owned of record, beneficially, or both, 5% or more of outstanding Institutional Shares: Wells Fargo Clearing Services LLC, St. Louis, MO, owned approximately 235,448 Shares (18.26%); Raymond James, St. Petersburg, FL, owned approximately 209,548 Shares (16.25%); UBS WM USA, Weehawken, NJ, owned approximately 178,654 Shares (13.86%); Edward D. Jones & Co., St. Louis, MO, owned approximately 166,744 Shares (12.93%); National Financial Services LLC, Jersey City, NJ, owned approximately 141,808 Shares (11.00%); Pershing LLC, Jersey City, NJ, owned approximately 133,241 Shares (10.33%); J.P Morgan Securities LLC, Brooklyn, NY, owned approximately 76,229 Shares (5.91%); and Stifel Nicolaus & Co., Inc., St. Louis, MO, owned approximately 67,066 Shares (5.20%).
Shareholders owning 25% or more of outstanding Shares may be in control and be able to affect the outcome of certain matters presented for a vote of shareholders.
Pershing LLC is organized in the state of Delaware and is a subsidiary of the Bank of New York Company, organized in the state of New York.
Charles Schwab & Co., Inc. is organized in the state of California.
Edward Jones & Co. is organized in the state of Missouri and is a subsidiary of Jones Financial Companies, organized in the state of Missouri.
Tax Information
Federal Income Tax
The Fund intends to meet requirements of Subchapter M of the Internal Revenue Code (the “Code”) applicable to regulated investment companies. If these requirements are not met, it will not receive special tax treatment and will be subject to federal corporate income tax.
The Fund is entitled to a loss carryforward, which may reduce the taxable income or gain that the Fund would realize, and to which the shareholder would be subject, in the future.
19
Tax Basis Information
The Fund's Transfer Agent is required to provide you with the cost basis information on the sale of any of your Shares in the Fund, subject to certain exceptions.
Who Manages and Provides Services to the Fund?
Board of Directors
The Board of Directors is responsible for managing the Fund's business affairs and for exercising all the Fund's powers except those reserved for the shareholders. The following tables give information about each Director and the senior officers of the Fund. Where required, the tables separately list Directors who are “interested persons” of the Fund (i.e., “Interested” Directors) and those who are not (i.e., “Independent” Directors). Unless otherwise noted, the address of each person listed is 1001 Liberty Avenue, Pittsburgh, PA 15222-3779. The address of all Independent Directors listed is 4000 Ericsson Drive, Warrendale, PA 15086-7561; Attention: Mutual Fund Board. As of December 31, 2019, the Fund comprised one portfolio, and the Federated Hermes Fund Complex consisted of 41 investment companies (comprising 135 portfolios). Unless otherwise noted, each Officer is elected annually. Unless otherwise noted, each Director oversees all portfolios in the Federated Hermes Fund Complex and serves for an indefinite term.
As of May 7, 2020, the Fund's Board and Officers as a group owned less than 1% of each class of the Fund's outstanding Shares.
qualifications of Independent Directors
Individual Director qualifications are noted in the “Independent Directors Background and Compensation” chart. In addition, the following characteristics are among those that were considered for each existing Director and will be considered for any Nominee Director.
■  Outstanding skills in disciplines deemed by the Independent Directors to be particularly relevant to the role of Independent Director and to the Federated Hermes funds, including legal, accounting, business management, the financial industry generally and the investment industry particularly.
■  Desire and availability to serve for a substantial period of time, taking into account the Board's current mandatory retirement age of 75 years.
■  No conflicts which would interfere with qualifying as independent.
■  Appropriate interpersonal skills to work effectively with other Independent Directors.
■  Understanding and appreciation of the important role occupied by Independent Directors in the regulatory structure governing regulated investment companies.
■  Diversity of background.
interested Directors Background and Compensation
Name
Birth Date
Positions Held with Fund
Date Service Began 		Principal Occupation(s) for Past Five Years,
Other Directorships Held and Previous Position(s) 		Aggregate
Compensation
From Fund
(past fiscal year) 		Total Compensation
From Fund and
Federated Hermes Complex
(past calendar year)
J. Christopher Donahue*
Birth Date: April 11, 1949
President and Director
Indefinite Term
Began serving: December 1986 		Principal Occupations: Principal Executive Officer and President of certain of the Funds in the Federated Hermes Complex; Director or Trustee of the Funds in the Federated Hermes Complex; President, Chief Executive Officer and Director, Federated Hermes, Inc.; Chairman and Trustee, Federated Investment Management Company; Trustee, Federated Investment Counseling; Chairman and Director, Federated Global Investment Management Corp.; Chairman and Trustee, Federated Equity Management Company of Pennsylvania; Trustee, Federated Shareholder Services Company; Director, Federated Services Company.
Previous Positions: President, Federated Investment Counseling; President and Chief Executive Officer, Federated Investment Management Company, Federated Global Investment Management Corp. and Passport
Research, Ltd.; Chairman, Passport Research, Ltd. 		$0 $0
20
Name
Birth Date
Positions Held with Fund
Date Service Began 		Principal Occupation(s) for Past Five Years,
Other Directorships Held and Previous Position(s) 		Aggregate
Compensation
From Fund
(past fiscal year) 		Total Compensation
From Fund and
Federated Hermes Complex
(past calendar year)
Thomas R. Donahue*
Birth Date: October 20, 1958
Director
Indefinite Term
Began serving: May 2016 		Principal Occupations: Director or Trustee of certain funds in the Federated Hermes Complex; Chief Financial Officer, Treasurer, Vice President and Assistant Secretary, Federated Hermes, Inc.; Chairman and Trustee, Federated Administrative Services; Chairman and Director, Federated Administrative Services, Inc.; Trustee and Treasurer, Federated Advisory Services Company; Director or Trustee and Treasurer, Federated Equity Management Company of Pennsylvania, Federated Global Investment Management Corp., Federated Investment Counseling, and Federated Investment Management Company; Director, MDTA LLC; Director, Executive Vice President and Assistant Secretary, Federated Securities Corp.; Director or Trustee and Chairman, Federated Services Company and Federated Shareholder Services Company; and Director and President, FII Holdings, Inc.
Previous Positions: Director, Federated Hermes, Inc.; Assistant Secretary, Federated Investment Management Company, Federated Global Investment Management Company and Passport Research, LTD; Treasurer, Passport Research, LTD; Executive Vice President, Federated Securities Corp.; and Treasurer, FII Holdings, Inc. 		$0 $0
* Family relationships and reasons for “interested” status: J. Christopher Donahue and Thomas R. Donahue are brothers. Both are “interested” due to their beneficial ownership of shares of Federated Hermes, Inc. and the positions they hold with Federated Hermes, Inc. and its subsidiaries.
Independent Directors Background, Qualifications and Compensation
Name
Birth Date
Positions Held with Fund
Date Service Began 		Principal Occupation(s) and Other Directorships Held for
Past Five Years, Previous Position(s) and Qualifications 		Aggregate
Compensation
From Fund
(past fiscal year) 		Total Compensation
From Fund and
Federated Hermes Fund Complex
(past calendar year)
John T. Collins
Birth Date: January 24, 1947
Director
Indefinite Term
Began serving: October 2013 		Principal Occupations: Director or Trustee of the Federated Hermes Complex; formerly, Chairman and CEO, The Collins Group, Inc. (a private equity firm) (Retired).
Other Directorships Held: Director, Chairman of the Compensation Committee, KLX Energy Services Holdings, Inc. (oilfield services); former Director of KLX Corp (aerospace).
Qualifications: Mr. Collins has served in several business and financial management roles and directorship positions throughout his career. Mr. Collins previously served as Chairman and CEO of The Collins Group, Inc. (a private equity firm) and as a Director of KLX Corp. Mr. Collins serves as Chairman Emeriti, Bentley University. Mr. Collins previously served as Director and Audit Committee Member, Bank of America Corp.; Director, FleetBoston Financial Corp.; and Director, Beth Israel Deaconess Medical Center (Harvard University Affiliate Hospital). 		$1,254.29 $286,000
G. Thomas Hough
Birth Date: February 28, 1955
Director

Indefinite Term
Began serving: August 2015 		Principal Occupations: Director or Trustee, Chair of the Audit Committee of the Federated Hermes Complex; formerly, Vice Chair, Ernst & Young LLP (public accounting firm) (Retired).
Other Directorships Held: Director, Chair of the Audit Committee, Equifax, Inc.; Director, Member of the Audit Committee, Haverty Furniture Companies, Inc.; formerly, Director, Member of Governance and Compensation Committees, Publix Super Markets, Inc.
Qualifications: Mr. Hough has served in accounting, business management and directorship positions throughout his career. Mr. Hough most recently held the position of Americas Vice Chair of Assurance with Ernst & Young LLP (public accounting firm). Mr. Hough serves on the President's Cabinet and Business School Board of Visitors for the University of Alabama. Mr. Hough previously served on the Business School Board of Visitors for Wake Forest University, and he previously served as an Executive Committee member of the United States Golf Association. 		$1,291.83 $286,000
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Name
Birth Date
Positions Held with Fund
Date Service Began 		Principal Occupation(s) and Other Directorships Held for
Past Five Years, Previous Position(s) and Qualifications 		Aggregate
Compensation
From Fund
(past fiscal year) 		Total Compensation
From Fund and
Federated Hermes Fund Complex
(past calendar year)
Maureen Lally-Green
Birth Date: July 5, 1949
Director

Indefinite Term
Began serving: August 2009 		Principal Occupations: Director or Trustee of the Federated Hermes Complex; Adjunct Professor of Law, Duquesne University School of Law; formerly, Dean of the Duquesne University School of Law and Professor of Law and Interim Dean of the Duquesne University School of Law; formerly, Associate General Secretary and Director, Office of Church Relations, Diocese of Pittsburgh.
Other Directorships Held: Director, CNX Resources Corporation (formerly known as CONSOL Energy Inc.).
Qualifications: Judge Lally-Green has served in various legal and business roles and directorship positions throughout her career. Judge Lally-Green previously held the position of Dean of the School of Law of Duquesne University (as well as Interim Dean). Judge Lally-Green previously served as a member of the Superior Court of Pennsylvania and as a Professor of Law, Duquesne University School of Law. Judge Lally-Green was appointed by the Supreme Court of Pennsylvania to serve on the Supreme Court's Board of Continuing Judicial Education and the Supreme Court's Appellate Court Procedural Rules Committee. Judge Lally-Green also currently holds the positions on not for profit or for profit boards of directors as follows: Director and Chair, UPMC Mercy Hospital; Director and Vice Chair, Our Campaign for the Church Alive!, Inc.; Regent, Saint Vincent Seminary; Member, Pennsylvania State Board of Education (public); Director, Catholic Charities, Pittsburgh; and Director CNX Resources Corporation (formerly known as CONSOL Energy Inc.). Judge Lally-Green has held the positions of: Director, Auberle; Director, Epilepsy Foundation of Western and Central Pennsylvania; Director, Ireland Institute of Pittsburgh; Director, Saint Thomas More Society; Director and Chair, Catholic High Schools of the Diocese of Pittsburgh, Inc.; Director, Pennsylvania Bar Institute; Director, Saint Vincent College; and Director and Chair, North Catholic High School, Inc. 		$1,254.29 $286,000
Charles F. Mansfield, Jr.
Birth Date: April 10, 1945
Director

Indefinite Term
Began serving: June 1999 		Principal Occupations: Director or Trustee of the Federated Hermes Complex; Management Consultant and Author.
Other Directorships Held: None.
Qualifications: Mr. Mansfield has served as a Marine Corps officer and in several banking, business management, educational roles and directorship positions throughout his long career. He remains active as a Management Consultant and Author. 		$1,140.26 $260,000
Thomas M. O'Neill
Birth Date: June 14, 1951
Director

Indefinite Term
Began serving: August 2006 		Principal Occupations: Director or Trustee, of the Federated Hermes Complex; Sole Proprietor, Navigator Management Company (investment and strategic consulting).
Other Directorships Held: None.
Qualifications: Mr. O'Neill has served in several business, mutual fund and financial management roles and directorship positions throughout his career. Mr. O'Neill serves as Director, Medicines for Humanity and Director, The Golisano Children's Museum of Naples, Florida. Mr. O'Neill previously served as Chief Executive Officer and President, Managing Director and Chief Investment Officer, Fleet Investment Advisors; President and Chief Executive Officer, Aeltus Investment Management, Inc.; General Partner, Hellman, Jordan Management Co., Boston, MA; Chief Investment Officer, The Putnam Companies, Boston, MA; Credit Analyst and Lending Officer, Fleet Bank; Director and Consultant, EZE Castle Software (investment order management software); and Director, Midway Pacific (lumber). 		$1,370.26 $321,000
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Name
Birth Date
Positions Held with Fund
Date Service Began 		Principal Occupation(s) and Other Directorships Held for
Past Five Years, Previous Position(s) and Qualifications 		Aggregate
Compensation
From Fund
(past fiscal year) 		Total Compensation
From Fund and
Federated Hermes Fund Complex
(past calendar year)
P. Jerome Richey
Birth Date: February 23, 1949
Director
Indefinite Term
Began serving: October 2013 		Principal Occupations: Director or Trustee of the Federated Hermes Complex; Management Consultant; Retired; formerly, Senior Vice Chancellor and Chief Legal Officer, University of Pittsburgh and Executive Vice President and Chief Legal Officer, CNX Resources Corporation (formerly known as CONSOL Energy Inc.).
Other Directorships Held: None.
Qualifications: Mr. Richey has served in several business and legal management roles and directorship positions throughout his career. Mr. Richey most recently held the positions of Senior Vice Chancellor and Chief Legal Officer, University of Pittsburgh. Mr. Richey previously served as Chairman of the Board, Epilepsy Foundation of Western Pennsylvania and Chairman of the Board, World Affairs Council of Pittsburgh. Mr. Richey previously served as Chief Legal Officer and Executive Vice President, CNX Resources Corporation (formerly known as CONSOL Energy Inc.) and Board Member, Ethics Counsel and Shareholder, Buchanan Ingersoll & Rooney PC (a law firm). 		$1,140.26 $260,000
John S. Walsh
Birth Date: November 28, 1957
Director

Indefinite Term
Began serving: January 1999 		Principal Occupations: Director or Trustee and Chair of the Board of Directors or Trustees, of the Federated Hermes Complex; President and Director, Heat Wagon, Inc. (manufacturer of construction temporary heaters); President and Director, Manufacturers Products, Inc. (distributor of portable construction heaters); President, Portable Heater Parts, a division of Manufacturers Products, Inc.
Other Directorships Held: None.
Qualifications: Mr. Walsh has served in several business management roles and directorship positions throughout his career. Mr. Walsh previously served as Vice President, Walsh & Kelly, Inc. (paving contractors). 		$1,513.05 $345,000
OFFICERS*
Name
Birth Date
Positions Held with Fund
Date Service Began 		Principal Occupation(s) and Previous Position(s)
Lori A. Hensler
Birth Date: January 6, 1967
Treasurer
Officer since: April 2013 		Principal Occupations: Principal Financial Officer and Treasurer of the Federated Hermes Complex; Senior Vice President, Federated Administrative Services; Financial and Operations Principal for Federated Securities Corp. and Edgewood Services, Inc.; and Assistant Treasurer, Federated Investors Trust Company. Ms. Hensler has received the Certified Public Accountant designation.
Previous Positions: Controller of Federated Hermes, Inc.; Senior Vice President and Assistant Treasurer, Federated Investors Management Company; Treasurer, Federated Investors Trust Company; Assistant Treasurer, Federated Administrative Services, Federated Administrative Services, Inc., Federated Securities Corp., Edgewood Services, Inc., Federated Advisory Services Company, Federated Equity Management Company of Pennsylvania, Federated Global Investment Management Corp., Federated Investment Counseling, Federated Investment Management Company, Passport Research, Ltd. and Federated MDTA, LLC; Financial and Operations Principal for Federated Securities Corp., Edgewood Services, Inc. and Southpointe Distribution Services, Inc.
Peter J. Germain
Birth Date: September 3, 1959
CHIEF LEGAL OFFICER, SECRETARY and EXECUTIVE VICE PRESIDENT
Officer since: January 2005 		Principal Occupations: Mr. Germain is Chief Legal Officer, Secretary and Executive Vice President of the Federated Hermes Complex. He is General Counsel, Chief Legal Officer, Secretary and Executive Vice President, Federated Hermes, Inc.; Trustee and Senior Vice President, Federated Investors Management Company; Trustee and President, Federated Administrative Services; Director and President, Federated Administrative Services, Inc.; Director and Vice President, Federated Securities Corp.; Director and Secretary, Federated Private Asset Management, Inc.; Secretary, Federated Shareholder Services Company; and Secretary, Retirement Plan Service Company of America. Mr. Germain joined Federated Hermes in 1984 and is a member of the Pennsylvania Bar Association.
Previous Positions: Deputy General Counsel, Special Counsel, Managing Director of Mutual Fund Services, Federated Hermes, Inc.; Senior Vice President, Federated Services Company; and Senior Corporate Counsel, Federated Hermes, Inc.
Stephen Van Meter
Birth Date: June 5, 1975
CHIEF COMPLIANCE OFFICER AND SENIOR VICE PRESIDENT
Officer since: July 2015 		Principal Occupations: Senior Vice President and Chief Compliance Officer of the Federated Hermes Complex; Vice President and Chief Compliance Officer of Federated Hermes, Inc. and Chief Compliance Officer of certain of its subsidiaries. Mr. Van Meter joined Federated Hermes, Inc. in October 2011. He holds FINRA licenses under Series 3, 7, 24 and 66.
Previous Positions: Mr. Van Meter previously held the position of Compliance Operating Officer, Federated Hermes, Inc. Prior to joining Federated Hermes, Inc., Mr. Van Meter served at the United States Securities and Exchange Commission in the positions of Senior Counsel, Office of Chief Counsel, Division of Investment Management and Senior Counsel, Division of Enforcement.
23
Name
Birth Date
Positions Held with Fund
Date Service Began 		Principal Occupation(s) and Previous Position(s)
Robert J. Ostrowski
Birth Date: April 26, 1963
Chief Investment Officer
Officer since: February 2010 		Principal Occupations: Robert J. Ostrowski joined Federated Hermes in 1987 as an Investment Analyst and became a Portfolio Manager in 1990. He was named Chief Investment Officer of Federated Hermes' taxable fixed-income products in 2004 and also serves as a Senior Portfolio Manager. Mr. Ostrowski became an Executive Vice President of the Fund's Adviser in 2009 and served as a Senior Vice President of the Fund's Adviser from 1997 to 2009. Mr. Ostrowski has received the Chartered Financial Analyst designation. He received his M.S. in Industrial Administration from Carnegie Mellon University.
* Officers do not receive any compensation from the Fund.
In addition, the Fund has appointed an Anti-Money Laundering Compliance Officer.
DIRECTOR/TRUSTEE EMERITUS PROGRAM
The Board has created a position of Director/Trustee Emeritus, whereby an incumbent Director/Trustee who has attained the age of 75 and completed a minimum of five years of service as a director/trustee, may, in the sole discretion of the Committee of Independent Directors/Trustees (“Committee”), be recommended to the full Board of Directors/Trustees of the Fund to serve as Director/Trustee Emeritus.
A Director/Trustee Emeritus that has been approved as such receives an annual fee in an amount equal to a percent of the annual base compensation paid to a Director/Trustee. In the case of a Director/Trustee Emeritus who had previously served at least five years but less than 10 years as a Director/Trustee, the percent will be 10%. In the case of a Director/Trustee Emeritus who had previously served at least 10 years as a Director/Trustee, the percent will be 20%. The Director/Trustee Emeritus will be reimbursed for any expenses incurred in connection with their service, including expenses of travel and lodging incurred in attendance at Board meetings. Director/Trustee Emeritus will continue to receive relevant materials concerning the Funds, will be expected to attend at least one regularly scheduled quarterly meeting of the Board of Directors/Trustees each year and will be available to consult with the Committees or its representatives at reasonable times as requested by the Chairman; however, a Director/Trustee Emeritus does not have any voting rights at Board meetings and is not subject to election by shareholders of the Funds.
The Director/Trustee Emeritus will be permitted to serve in such capacity at the pleasure of the Committee, but the annual fee will cease to be paid at the end of the calendar year during which he or she has attained the age of 80 years, thereafter the position will be honorary.
The following table shows the fees paid to each Director/Trustee Emeritus for the Fund's most recently ended fiscal year and the portion of that fee paid by the Fund or Trust.1
EMERITUS Directors and Compensation
Director/Trustee Emeritus
Compensation
From Fund
(past fiscal year) 		Total
Compensation
Paid to
Director/Trustee
Emeritus1
Peter E. Madden $56.12 $52,000.00
1 The fees paid to a Director/Trustee are allocated among the funds that were in existence at the time the Director/Trustee elected Emeritus status, based on each fund's net assets at that time.
BOARD LEADERSHIP STRUCTURE
As required under the terms of certain regulatory settlements, the Chairman of the Board is not an interested person of the Fund and neither the Chairman, nor any firm with which the Chairman is affiliated, has a prior relationship with Federated Hermes or its affiliates or (other than his position as a Director) with the Fund.
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Committees of the Board
Board
Committee 		Committee
Members 		Committee Functions Meetings Held
During Last
Fiscal Year
Executive J. Christopher Donahue
John T. Collins
John S. Walsh 		In between meetings of the full Board, the Executive Committee generally may exercise all the powers of the full Board in the management and direction of the business and conduct of the affairs of the Corporation in such manner as the Executive Committee shall deem to be in the best interests of the Corporation. However, the Executive Committee cannot elect or remove Board members, increase or decrease the number of Directors, elect or remove any Officer, declare dividends, issue shares or recommend to shareholders any action requiring shareholder approval. One
Audit John T. Collins
G. Thomas Hough
Maureen Lally-Green
Thomas M. O'Neill
The purposes of the Audit Committee are to oversee the accounting and financial reporting process of the Fund, the Fund's internal control over financial reporting and the quality, integrity and independent audit of the Fund's financial statements. The Committee also oversees or assists the Board with the oversight of compliance with legal requirements relating to those matters, approves the engagement and reviews the qualifications, independence and performance of the Fund's independent registered public accounting firm, acts as a liaison between the independent registered public accounting firm and the Board and reviews the Fund's internal audit function. Seven
Nominating John T. Collins
G. Thomas Hough
Maureen Lally-Green
Charles F. Mansfield, Jr.
Thomas M. O'Neill
P. Jerome Richey
John S. Walsh
The Nominating Committee, whose members consist of all Independent Directors, selects and nominates persons for election to the Fund's Board when vacancies occur. The Committee will consider candidates recommended by shareholders, Independent Directors, officers or employees of any of the Fund's agents or service providers and counsel to the Fund. Any shareholder who desires to have an individual considered for nomination by the Committee must submit a recommendation in writing to the Secretary of the Fund, at the Fund's address appearing on the back cover of this SAI. The recommendation should include the name and address of both the shareholder and the candidate and detailed information concerning the candidate's qualifications and experience. In identifying and evaluating candidates for consideration, the Committee shall consider such factors as it deems appropriate. Those factors will ordinarily include: integrity, intelligence, collegiality, judgment, diversity, skill, business and other experience, qualification as an “Independent Director,” the existence of material relationships which may create the appearance of a lack of independence, financial or accounting knowledge and experience and dedication and willingness to devote the time and attention necessary to fulfill Board responsibilities. One
BOARD'S ROLE IN RISK OVERSIGHT
The Board's role in overseeing the Fund's general risks includes receiving performance reports for the Fund and risk management reports from Federated Hermes' Chief Risk Officer at each regular Board meeting. The Chief Risk Officer is responsible for enterprise risk management at Federated Hermes, which includes risk management committees for investment management and for investor services. The Board also receives regular reports from the Fund's Chief Compliance Officer regarding significant compliance risks.
On behalf of the Board, the Audit Committee plays a key role overseeing the Fund's financial reporting and valuation risks. The Audit Committee meets regularly with the Fund's Principal Financial Officer and outside auditors, as well as with Federated Hermes' Chief Audit Executive to discuss financial reporting and audit issues, including risks relating to financial controls.
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Board Ownership Of Shares In The Fund And In The Federated Hermes Family Of Investment Companies As Of December 31, 2019
Interested Board
Member Name 		Dollar Range of
Shares Owned in
Federated Municipal Bond Fund, Inc. 		Aggregate
Dollar Range of
Shares Owned in
Federated Hermes Family of
Investment Companies
J. Christopher Donahue None Over $100,000
Thomas R. Donahue None Over $100,000
Independent Board
Member Name 		   
John T. Collins None Over $100,000
G. Thomas Hough None Over $100,000
Maureen Lally-Green None Over $100,000
Charles F. Mansfield, Jr. $1-$10,000 $50,001-$100,000
Thomas M. O'Neill None Over $100,000
P. Jerome Richey None Over $100,000
John S. Walsh None Over $100,000
Investment Adviser
The Adviser conducts investment research and makes investment decisions for the Fund.
The Adviser is a wholly owned subsidiary of Federated Hermes.
The Adviser shall not be liable to the Fund or any Fund shareholder for any losses that may be sustained in the purchase, holding, or sale of any security or for anything done or omitted by it, except acts or omissions involving willful misfeasance, bad faith, gross negligence or reckless disregard of the duties imposed upon it by its contract with the Fund.
In December 2017, Federated Investors, Inc., now Federated Hermes, became a signatory to the Principles for Responsible Investment (PRI). The PRI is an investor initiative in partnership with the United Nations Environment Programme Finance Initiative and the United Nations Global Compact. Commitments made as a signatory to the PRI are not legally binding, but are voluntary and aspirational. They include efforts, where consistent with our fiduciary responsibilities, to incorporate environmental, social and corporate governance (ESG) issues into investment analysis and investment decision making, to be active owners and incorporate ESG issues into our ownership policies and practices, to seek appropriate disclosure on ESG issues by the entities in which we invest, to promote acceptance and implementation of the PRI within the investment industry, to enhance our effectiveness in implementing the PRI, and to report on our activities and progress towards implementing the PRI. Being a signatory to the PRI does not obligate Federated Hermes to take, or not take, any particular action as it relates to investment decisions or other activities.
In July 2018, Federated Investors, Inc., now Federated Hermes, acquired a 60% interest in Hermes Fund Managers Limited (Hermes), which operates as Hermes Investment Management, a pioneer of integrated ESG investing. Hermes' experience with ESG issues contributes to Federated Hermes' understanding of material risks and opportunities these issues may present.
Portfolio Manager Information
As a general matter, certain conflicts of interest may arise in connection with a portfolio manager's management of a fund's investments, on the one hand, and the investments of other funds/pooled investment vehicles or accounts (collectively, including the Fund, as applicable, “accounts”) for which the portfolio manager is responsible, on the other. For example, it is possible that the various accounts managed could have different investment strategies that, at times, might conflict with one another to the possible detriment of the Fund. Alternatively, to the extent that the same investment opportunities might be desirable for more than one account, possible conflicts could arise in determining how to allocate them. Other potential conflicts can include, for example, conflicts created by specific portfolio manager compensation arrangements (including, for example, the allocation or weighting given to the performance of the Fund or other accounts or activities for which the portfolio manager is responsible in calculating the portfolio manager's compensation), and conflicts relating to selection of brokers or dealers to execute Fund portfolio trades and/or specific uses of commissions from Fund portfolio trades (for example, research or “soft dollars”). The Adviser has adopted policies and procedures and has structured the portfolio managers' compensation in a manner reasonably designed to safeguard the Fund from being negatively affected as a result of any such potential conflicts.
The following information about the Fund's Portfolio Manager is provided as of the end of the Fund's most recently completed fiscal year unless otherwise indicated.
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J. Scott Albrecht, Portfolio Manager
Types of Accounts Managed
by J. Scott Albrecht 		Total Number of Additional Accounts
Managed/Total Assets*
Registered Investment Companies 3/$397.6 million
Other Pooled Investment Vehicles 0/$0
Other Accounts 0/$0
* None of the Accounts has an advisory fee that is based on the performance of the account.
Dollar value range of shares owned in the Fund: None.
J. Scott Albrecht is paid a fixed base salary and a variable annual incentive. Base salary is determined within a market competitive position-specific salary range, based on the portfolio manager's experience and performance. The annual incentive amount is determined based primarily on Investment Product Performance (IPP) and may also include a discretionary component based on a variety of factors deemed relevant, such as financial measures and performance and may be paid entirely in cash, or in a combination of cash and restricted stock of Federated Hermes, Inc. (“Federated Hermes”). The total combined annual incentive opportunity is intended to be competitive in the market for this portfolio manager role.
IPP is measured on a rolling one, three and five calendar year pre-tax gross total return basis versus the Fund's benchmark (i.e., S&P Municipal Bond 3-Year Plus Index) and versus the Fund's designated peer group of comparable accounts. Performance periods are adjusted if a portfolio manager has been managing an account for less than five years; accounts with less than one year of performance history under a portfolio manager may be excluded.
As noted above, Mr. Albrecht is also the portfolio manager for other accounts in addition to the Fund. Such other accounts may have different benchmarks and performance measures. The allocation or weighting given to the performance of the Fund or other accounts or activities for which Mr. Albrecht is responsible when his compensation is calculated may be equal or can vary.
In addition, Mr. Albrecht serves on one or more Investment Teams that establish guidelines on various performance drivers (e.g., currency, duration, sector, volatility and/or yield curve) for taxable, fixed-income funds. A portion of the IPP score is based on Federated Hermes' senior management's assessment of team contributions.
For purposes of calculating the annual incentive amount, each account managed by the portfolio manager currently is categorized into one IPP group (which may be adjusted periodically). Within each performance measurement period and IPP group, IPP currently is calculated on the basis of an assigned weighting to each account managed or activity engaged in by the portfolio manager and included in the IPP group. At the account level, the weighting assigned to the Fund is greater than or equal to the weighting assigned to other accounts or activities used to determine IPP (but can be adjusted periodically). A portion of the bonus tied to the IPP score may be adjusted based on management's assessment of overall contributions to account performance and any other factors as deemed relevant.
Any individual allocations from the discretionary pool may be determined, by executive management on a discretionary basis using various factors, such as, for example, on a product, strategy or asset class basis, and considering overall contributions and any other factors deemed relevant (and may be adjusted periodically).
Richard J. Gallo, Portfolio Manager
Types of Accounts Managed
by Richard J. Gallo 		Total Number of Additional Accounts
Managed/Total Assets*
Registered Investment Companies 8/$10.5 billion
Other Pooled Investment Vehicles 0/$0
Other Accounts 3/$5.5 million
* None of the Accounts has an advisory fee that is based on the performance of the account.
Dollar value range of shares owned in the Fund: None.
Richard J. Gallo is paid a fixed base salary and a variable annual incentive. Base salary is determined within a market competitive position-specific salary range, based on the portfolio manager's experience and performance. The annual incentive amount is determined based primarily on Investment Product Performance (IPP) and may also include a discretionary component based on a variety of factors deemed relevant, such as financial measures and performance and may be paid entirely in cash, or in a combination of cash and restricted stock of Federated Hermes, Inc. (“Federated Hermes”). The total combined annual incentive opportunity is intended to be competitive in the market for this portfolio manager role.
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IPP is measured on a rolling one, three and five calendar year pre-tax gross total return basis versus the Fund's benchmark (i.e., S&P Municipal Bond 3-Year Plus Index) and versus the Fund's designated peer group of comparable accounts. Performance periods are adjusted if a portfolio manager has been managing an account for less than five years; accounts with less than one year of performance history under a portfolio manager may be excluded.
As noted above, Mr. Gallo is also the portfolio manager for other accounts in addition to the Fund. Such other accounts may have different benchmarks and performance measures. The allocation or weighting given to the performance of the Fund or other accounts or activities for which Mr. Gallo is responsible when his compensation is calculated may be equal or can vary.
In addition, Mr. Gallo has oversight responsibility for other portfolios that he does not personally manage and serves on one or more Investment Teams that establish guidelines on various performance drivers (e.g., currency, duration, sector, volatility and/or yield curve) for taxable, fixed-income funds. A portion of the IPP score is based on Federated Hermes' senior management's assessment of team contributions.
For purposes of calculating the annual incentive amount, each account managed by the portfolio manager currently is categorized into one of two IPP groups (which may be adjusted periodically). Within each performance measurement period and IPP group, IPP currently is calculated on the basis of an assigned weighting to each account managed or activity engaged in by the portfolio manager and included in the IPP group. At the account level, the weighting assigned to the Fund is lesser than or equal to the weighting assigned to other accounts or activities used to determine IPP (but can be adjusted periodically). A portion of the bonus tied to the IPP score may be adjusted based on management's assessment of overall contributions to account performance and any other factors as deemed relevant.
Any individual allocations from the discretionary pool may be determined, by executive management on a discretionary basis using various factors, such as, for example, on a product, strategy or asset class basis, and considering overall contributions and any other factors deemed relevant (and may be adjusted periodically).
Services Agreement
Federated Advisory Services Company, an affiliate of the Adviser, provides certain support services to the Adviser. The fee for these services is paid by the Adviser and not by the Fund.
Other Related Services
Affiliates of the Adviser may, from time to time, provide certain electronic equipment and software to institutional customers in order to facilitate the purchase of Fund Shares offered by the Distributor.
Code Of Ethics Restrictions On Personal Trading
As required by Rule 17j-1 of the Investment Company Act of 1940 and Rule 204A-1 under the Investment Advisers Act (as applicable), the Fund, its Adviser and its Distributor have adopted codes of ethics. These codes govern securities trading activities of investment personnel, Fund Directors and certain other employees. Although they do permit these people to trade in securities, including those that the Fund could buy, as well as Shares of the Fund, they also contain significant safeguards designed to protect the Fund and its shareholders from abuses in this area, such as requirements to obtain prior approval for, and to report, particular transactions.
Voting Proxies On Fund Portfolio Securities
The Board has delegated to the Adviser authority to vote proxies on the securities held in the Fund's portfolio. The Board has also approved the Adviser's policies and procedures for voting the proxies, which are described below.
Proxy Voting Policies
As an investment adviser with a fiduciary duty to the Fund and its shareholders, the Adviser's general policy is to cast proxy votes in favor of management proposals and shareholder proposals that the Adviser anticipates will enhance the long-term value of the securities being voted in a manner that is consistent with the investment objectives of the Fund. Generally, this will mean voting for proposals that the Adviser believes will improve the management of a company, increase the rights or preferences of the voted securities, or increase the chance that a premium offer would be made for the company or for the voted securities. This approach to voting proxy proposals will be referred to hereafter as the “General Policy.”
The Adviser generally votes consistently on the same matter when securities of an issuer are held by multiple client portfolios. However, the Adviser may vote differently if a particular client's investment objectives differ from those of other clients or if a client explicitly instructs the Adviser to vote differently.
The following examples illustrate how the General Policy may apply to the most common management proposals and shareholder proposals. However, whether the Adviser supports or opposes a proposal will always depend on a thorough understanding of the Fund's investment objectives and the specific circumstances described in the proxy statement and other available information.
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On matters related to the board of directors, generally the Adviser will vote to elect nominees to the board in uncontested elections except in certain circumstances, such as where the director: (1) had not attended at least 75% of the board meetings during the previous year; (2) serves as the company's chief financial officer; (3) has become overboarded (more than five boards for retired executives and more than two boards for CEOs); (4) is the chair of the nominating or governance committee when the roles of chairman of the board and CEO are combined and there is no lead independent director; (5) served on the compensation committee during a period in which compensation appears excessive relative to performance and peers; or (6) served on a board that did not implement a shareholder proposal that the Adviser supported and received more than 50% shareholder support the previous year. In addition, the Adviser will generally vote in favor of; (7) a full slate of directors, where the directors are elected as a group and not individually, unless more than half of the nominees are not independent; (8) shareholder proposals to declassify the board of directors; (9) shareholder proposals to require a majority voting standard in the election of directors; (10) shareholder proposals to separate the roles of chairman of the board and CEO; and (11) a proposal to require a company's audit committee to be comprised entirely of independent directors.
On other matters of corporate governance, generally the Adviser will vote in favor of: (1) proposals to grant shareholders the right to call a special meeting if owners of at least 25% of the outstanding stock agree; (2) a proposal to require independent tabulation of proxies and/or confidential voting of shareholders; (3) a proposal to ratify the board's selection of auditors, unless: (a) compensation for non-audit services exceeded 50% of the total compensation received from the company; or (b) the previous auditor was dismissed because of a disagreement with the company; (4) a proposal to repeal a shareholder rights plan (also known as a “poison pill”) and against the adoption of such a plan, unless the plan is designed to facilitate, rather than prevent, unsolicited offers for the company; (5) shareholder proposals to eliminate supermajority requirements in company bylaws; and (6) shareholder proposals calling for “Proxy Access,” that is, a bylaw change allowing shareholders owning at least 3% of the outstanding common stock for at least three years to nominate candidates for election to the board of directors. The Adviser will generally withhold support from shareholder proposals to grant shareholders the right to act by written consent.
On environmental and social matters, generally the Adviser will vote in favor of shareholder proposals calling for: (1) enhanced disclosure of the company's approach to mitigating climate change and other environmental risks; (2) managing risks related to manufacturing or selling of guns and opioids; (3) monitoring gender pay equity; and (4) achieving and maintaining diversity on the board of directors. Generally, the Adviser will not support shareholder proposals calling for limitations on political activity by the company, including political contributions, lobbying and memberships in trade associations.
On matters of capital structure, generally the Adviser will vote against a proposal to authorize or issue shares that are senior in priority or voting rights to the voted securities, and in favor of a proposal to: (1) reduce the amount of shares authorized for issuance (subject to adequate provisions for outstanding convertible securities, options, warrants, rights and other existing obligations to issue shares); and (2) grant authorities to issue shares with and without pre-emptive rights unless the size of the authorities would threaten to unreasonably dilute existing shareholders. The Adviser will decide how to vote on proposals to authorize a stock repurchase or special dividend program on a case-by-case basis.
On matters relating to management compensation, generally the Adviser will vote in favor of stock incentive plans (including plans for directors) that align the recipients of stock incentives with the interests of shareholders, without creating undue dilution, and against: (1) the advisory vote on executive compensation plans (“Say On Pay”) when the plan has failed to align executive compensation with corporate performance; (2) the advisory vote on the frequency of the Say On Pay vote when the frequency is other than annual; (3) proposals that would permit the amendment or replacement of outstanding stock incentives having more favorable terms (e.g., lower purchase prices or easier vesting requirements); and (4) executive compensation plans that do not disclose the maximum amounts of compensation that may be awarded or the criteria for determining awards.
On matters relating to corporate transactions, the Adviser will generally vote in favor of mergers, acquisitions and sales of assets if the Adviser's analysis of the proposed business strategy and the transaction price would have a positive impact on the total return for shareholders.
If a shareholders meeting is contested, that is, shareholders are presented with a set of director candidates nominated by company management and a set of director candidates nominated by a dissident shareholder, the Adviser will study the proposed business strategies of both groups and vote in a way that maximizes expected total return for the Fund.
In addition, the Adviser will not vote any proxy if it determines that the consequences or costs of voting outweigh the potential benefit of voting. For example, if a foreign market requires shareholders voting proxies to retain the voted shares until the meeting date (thereby rendering the shares “illiquid” for some period of time), the Adviser will not vote proxies for such shares. In addition, the Adviser is not obligated to incur any expense to send a representative to a shareholder meeting or to translate proxy materials into English.
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To the extent that the Adviser is permitted to loan securities, the Adviser does not have the right to vote on securities while they are on loan. However, the Adviser will take all reasonable steps to recall shares prior to the record date when the meeting raises issues that the Adviser believes materially affect shareholder value, including, but not limited to, excessive compensation, mergers and acquisitions, contested elections and weak oversight by the audit committee. However, there can be no assurance that the Adviser will have sufficient notice of such matters to be able to terminate the loan in time to vote thereon.
If proxies are not delivered in a timely or otherwise appropriate basis, the Adviser may not be able to vote a particular proxy.
For an Adviser that employs a quantitative investment strategy for certain funds or accounts that does not make use of qualitative research (“Non-Qualitative Accounts”), the Adviser may not have the kind of research to make decisions about how to vote proxies for them. Therefore, the Adviser will vote the proxies of these Non-Qualitative Accounts as follows: (a) in accordance with the Standard Voting Instructions (defined below); (b) if the Adviser is casting votes for the same proxy on behalf of a regular qualitative account and a Non-Qualitative Account, the Non-Qualitative Account would vote in the same manner as the regular qualitative account; (c) if neither of the first two conditions apply, as the proxy voting service is recommending; and (d) if none of the previous conditions apply, as recommended by the Proxy Voting Committee.
Proxy Voting Procedures
The Adviser has established a Proxy Voting Committee (“Proxy Committee”), to exercise all voting discretion granted to the Adviser by the Board in accordance with the proxy voting policies. To assist it in carrying out the day-to-day operations related to proxy voting, the Proxy Committee has created the Proxy Voting Management Group (PVMG). The day-to-day operations related to proxy voting are carried out by the Proxy Voting Operations Team (PVOT) and overseen by the PVMG. Besides voting the proxies, this work includes engaging with investee companies on corporate governance matters, managing the proxy voting service, soliciting voting recommendations from the Adviser's investment professionals, bringing voting recommendations to the Proxy Committee for approval, filing with regulatory agencies any required proxy voting reports, providing proxy voting reports to clients and investment companies as they are requested from time to time, and keeping the Proxy Committee informed of any issues related to corporate governance and proxy voting.
The Adviser has compiled a list of specific voting instructions based on the General Policy (the “Standard Voting Instructions”). The Standard Voting Instructions and any modifications to them are approved by the Proxy Committee. The Standard Voting Instructions sometimes call for an investment professional to review the ballot question and provide a voting recommendation to the Proxy Committee (a “case-by-case vote”). The foregoing notwithstanding, the Proxy Committee always has the authority to determine a final voting decision.
The Adviser has hired a proxy voting service to perform various proxy voting related administrative services such as ballot reconciliation, vote processing, and recordkeeping functions. The Proxy Committee has supplied the proxy voting services with the Standard Voting Instructions. The Proxy Committee retains the right to modify the Standard Voting Instructions at any time or to vote contrary to them at any time in order to cast proxy votes in a manner that the Proxy Committee believes is in accordance with the General Policy. The proxy voting service may vote any proxy as directed in the Standard Voting Instructions without further direction from the Proxy Committee. However, if the Standard Voting Instructions require case-by-case handling for a proposal, the PVOT will work with the investment professionals and the proxy voting service to develop a voting recommendation for the Proxy Committee and to communicate the Proxy Committee's final voting decision to the proxy voting service. Further, if the Standard Voting Instructions require the PVOT to analyze a ballot question and make the final voting decision, the PVOT will report such votes to the Proxy Committee on a quarterly basis for review.
Conflicts of Interest
The Adviser has adopted procedures to address situations where a matter on which a proxy is sought may present a potential conflict between the interests of the Fund (and its shareholders) and those of the Adviser or Distributor. This may occur where a significant business relationship exists between the Adviser (or its affiliates) and a company involved with a proxy vote.
A company that is a proponent, opponent, or the subject of a proxy vote, and which to the knowledge of the Proxy Committee has this type of significant business relationship, is referred to below as an “Interested Company.”
The Adviser has implemented the following procedures in order to avoid concerns that the conflicting interests of the Adviser or its affiliates have influenced proxy votes. Any employee of the Adviser or its affiliates who is contacted by an Interested Company regarding proxies to be voted by the Adviser must refer the Interested Company to a member of the Proxy Committee, and must inform the Interested Company that the Proxy Committee has exclusive authority to determine how the proxy will be voted. Any Proxy Committee member contacted by an Interested Company must report it to the full Proxy Committee and provide a written summary of the communication. This requirement includes engagement meetings with investee companies and does not include communications with proxy solicitation firms. Under no circumstances will the Proxy Committee or any member of the Proxy Committee make a commitment to an Interested Company regarding the voting of proxies or disclose to an Interested Company how the Proxy Committee has directed such proxies to be voted. If the Standard Voting Instructions already provide specific
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direction on the proposal in question, the Proxy Committee shall not alter or amend such directions. If the Standard Voting Instructions require the Proxy Committee to provide further direction, the Proxy Committee shall do so in accordance with the proxy voting policies, without regard for the interests of the Adviser with respect to the Interested Company. If the Proxy Committee provides any direction as to the voting of proxies relating to a proposal affecting an Interested Company, it must disclose annually to the Fund's Board information regarding: the significant business relationship; any material communication with the Interested Company; the matter(s) voted on; and how, and why, the Adviser voted as it did. In certain circumstances it may be appropriate for the Adviser to vote in the same proportion as all other shareholders, so as to not affect the outcome beyond helping to establish a quorum at the shareholders' meeting. This is referred to as “proportional voting.” If the Fund owns shares of another Federated Hermes mutual fund, generally the Adviser will proportionally vote the client's proxies for that fund or seek direction from the Board or the client on how the proposal should be voted. If the Fund owns shares of an unaffiliated mutual fund, the Adviser may proportionally vote the Fund's proxies for that fund depending on the size of the position. If the Fund owns shares of an unaffiliated exchange-traded fund, the Adviser will proportionally vote the Fund's proxies for that fund.
Downstream Affiliates
If the Proxy Committee gives further direction, or seeks to vote contrary to the Standard Voting Instructions, for a proxy relating to a portfolio company in which the Fund owns more than 10% of the portfolio company's outstanding voting securities at the time of the vote (“Downstream Affiliate”), the Proxy Committee must first receive guidance from counsel to the Proxy Committee as to whether any relationship between the Adviser and the portfolio company, other than such ownership of the portfolio company's securities, gives rise to an actual conflict of interest. If counsel determines that an actual conflict exists, the Proxy Committee must address any such conflict with the executive committee of the board of directors or trustees of any investment company client prior to taking any action on the proxy at issue.
Proxy Advisers' Conflicts of Interest
Proxy advisory firms may have significant business relationships with the subjects of their research and voting recommendations. For example, a proxy voting service client may be a public company with an upcoming shareholders' meeting and the proxy voting service has published a research report with voting recommendations. In another example, a proxy voting service board member also sits on the board of a public company for which the proxy voting service will write a research report. These and similar situations give rise to an actual or apparent conflict of interest.
In order to avoid concerns that the conflicting interests of the engaged proxy voting service have influenced proxy voting recommendations, the Adviser will take the following steps:
■  A due diligence team made up of employees of the Adviser and/or its affiliates will meet with the proxy voting service on an annual basis and determine through a review of their policies and procedures and through inquiry that the proxy voting service has established a system of internal controls that provide reasonable assurance that their voting recommendations are not influenced by the business relationships they have with the subjects of their research.
■  Whenever the standard voting guidelines call for voting a proposal in accordance with the proxy voting service recommendation and the proxy voting service has disclosed that they have a conflict of interest with respect to that issuer, the PVOT will take the following steps: (a) the PVOT will obtain a copy of the research report and recommendations published by another proxy voting service for that issuer; (b) the Director of Proxy Voting, or his designee, will review both the engaged proxy voting service research report and the research report of the other proxy voting service and determine what vote will be cast. The PVOT will report all proxies voted in this manner to the Proxy Committee on a quarterly basis. Alternatively, the PVOT may seek direction from the Committee on how the proposal shall be voted.
Proxy Voting Report
A report on “Form N-PX” of how the Fund voted any proxies during the most recent 12-month period ended June 30 is available via the Proxy Voting Record (Form N-PX) link associated with the Fund and share class name at FederatedInvestors.com/FundInformation. Form N-PX filings are also available at the SEC's website at sec.gov.
Portfolio Holdings Information
Information concerning the Fund's portfolio holdings is available via the link to the Fund and share class name at FederatedInvestors.com/FundInformation. A complete listing of the Fund's portfolio holdings as of the end of each calendar quarter is posted on the website 30 days (or the next business day) after the end of the quarter and remains posted for six months thereafter. Summary portfolio composition information as of the close of each month is posted on the website 15 days (or the next business day) after month-end and remains posted until replaced by the information for the succeeding month. The summary portfolio composition information may include: identification of the Fund's top 10 holdings, portfolio profile statistics (such as weighted average effective maturity and weighted average effective duration) and a percentage breakdown of the portfolio by credit quality and sector.
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You may also access portfolio information as of the end of the Fund's fiscal quarters via the link to the Fund and share class name at FederatedInvestors.com. The Fund's Annual Shareholder Report and Semi-Annual Shareholder Report contain complete listings of the Fund's portfolio holdings as of the end of the Fund's second and fourth fiscal quarters. Fiscal quarter information is made available on the website within 70 days after the end of the fiscal quarter. This information is also available in reports filed with the SEC at the SEC's website at sec.gov.
Each fiscal quarter, the Fund will file with the SEC a complete schedule of its monthly portfolio holdings on “Form N-PORT.” The Fund's holdings as of the end of the third month of every fiscal quarter, as reported on Form N-PORT, will be publicly available on the SEC's website at sec.gov within 60 days of the end of the fiscal quarter upon filing. You may also access this information via the link to the Fund and share class name at FederatedInvestors.com.
The disclosure policy of the Fund and the Adviser prohibits the disclosure of portfolio holdings information to any investor or intermediary before the same information is made available to other investors. Employees of the Adviser or its affiliates who have access to nonpublic information concerning the Fund's portfolio holdings are prohibited from trading securities on the basis of this information. Such persons must report all personal securities trades and obtain pre-clearance for all personal securities trades other than mutual fund shares.
Firms that provide administrative, custody, financial, accounting, legal or other services to the Fund may receive nonpublic information about Fund portfolio holdings for purposes relating to their services. The Fund may also provide portfolio holdings information to publications that rate, rank or otherwise categorize investment companies. Traders or portfolio managers may provide “interest” lists to facilitate portfolio trading if the list reflects only that subset of the portfolio for which the trader or portfolio manager is seeking market interest. A list of service providers, publications and other third parties who may receive nonpublic portfolio holdings information appears in the Appendix to this SAI.
The furnishing of nonpublic portfolio holdings information to any third party (other than authorized governmental or regulatory personnel) requires the prior approval of the President of the Adviser and of the Chief Compliance Officer of the Fund. The President of the Adviser and the Chief Compliance Officer will approve the furnishing of nonpublic portfolio holdings information to a third party only if they consider the furnishing of such information to be in the best interests of the Fund and its shareholders. In that regard, and to address possible conflicts between the interests of Fund shareholders and those of the Adviser and its affiliates, the following procedures apply. No consideration may be received by the Fund, the Adviser, any affiliate of the Adviser or any of their employees in connection with the disclosure of portfolio holdings information. Before information is furnished, the third party must sign a written agreement that it will safeguard the confidentiality of the information, will use it only for the purposes for which it is furnished and will not use it in connection with the trading of any security. Persons approved to receive nonpublic portfolio holdings information will receive it as often as necessary for the purpose for which it is provided. Such information may be furnished as frequently as daily and often with no time lag between the date of the information and the date it is furnished. The Board receives and reviews annually a list of the persons who receive nonpublic portfolio holdings information and the purposes for which it is furnished.
Brokerage Transactions And Investment Allocation
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. Fixed-income securities are generally traded in an over-the-counter market on a net basis (i.e., without commission) through dealers acting as principal or in transactions directly with the issuer. Dealers derive an undisclosed amount of compensation by offering securities at a higher price than they bid for them. Some fixed-income securities may have only one primary market maker. The Adviser seeks to use dealers it believes to be actively and effectively trading the security being purchased or sold, but may not always obtain the lowest purchase price or highest sale price with respect to a security. The Adviser makes decisions on portfolio transactions and selects brokers and dealers subject to review by the Fund's Board.
Investment decisions for the Fund are made independently from those of other accounts managed by the Adviser and accounts managed by affiliates of the Adviser. When the Fund and one or more of those accounts invests in, or disposes of, the same security, available investments or opportunities for sales will be allocated among the Fund and the account(s) in a manner believed by the Adviser to be equitable. While the coordination and ability to participate in volume transactions may benefit the Fund, it is possible that this procedure could adversely impact the price paid or received and/or the position obtained or disposed of by the Fund. Investment decisions, and trading, for certain separately managed or wrap-fee accounts, and other accounts, of the Adviser and/or certain investment adviser affiliates of the Adviser, are generally made, and conducted, independently from the Fund. It is possible that such independent trading activity could adversely impact the prices paid or received and/or positions obtained or disposed of by the Fund.
32
For the fiscal year ended March 31, 2020, the Fund's Adviser directed brokerage transactions to certain brokers in connection with the Adviser's receipt of research services. The total amount of these transactions was $2,084,770 for which the Fund paid $1,586 in brokerage commissions.
Administrator
Federated Administrative Services (FAS), a subsidiary of Federated Hermes, provides administrative personnel and services, including certain legal, compliance, recordkeeping and financial reporting services (“Administrative Services”), necessary for the operation of the Fund. FAS provides Administrative Services for a fee based upon the rates set forth below paid on the average daily net assets of the Fund. For purposes of determining the appropriate rate breakpoint, “Investment Complex” is defined as all of the Federated Hermes funds subject to a fee under the Administrative Services Agreement with FAS. FAS is also entitled to reimbursement for certain out-of-pocket expenses incurred in providing Administrative Services to the Fund.
Administrative Services
Fee Rate 		Average Daily Net Assets
of the Investment Complex
0.100 of 1% on assets up to $50 billion
0.075 of 1% on assets over $50 billion
Custodian
The Bank of New York Mellon, New York, New York, is custodian for the securities and cash of the Fund.
Transfer Agent And Dividend Disbursing Agent
State Street Bank and Trust Company, the Fund's registered transfer agent, maintains all necessary shareholder records.
Independent Registered Public Accounting Firm
The independent registered public accounting firm for the Fund, Ernst & Young LLP, conducts its audits in accordance with the standards of the Public Company Accounting Oversight Board (United States), which require it to plan and perform its audits to provide reasonable assurance about whether the Fund's financial statements and financial highlights are free of material misstatement.
Fees Paid by the Fund for Services
For the Year Ended March 31 2020 2019 2018
Advisory Fee Earned $1,480,931 $1,539,495 $1,644,512
Net Administrative Fee $261,116 $264,583 $280,595
Net 12b-1 Fee:      
Class B Shares $22,028 $29,421 $30,996
Class C Shares $66,702 $81,753 $119,633
Net Shareholder Services Fee:      
Class A Shares $688,912 $705,043 $696,080
Class B Shares $7,344 $9,807 $10,332
Class C Shares $22,234 $27,251 $39,877
Class F Shares $69,956 $63,890 $63,184
Fees are allocated among classes based on their pro rata share of Fund assets, except for marketing (“Rule 12b-1”) fees and shareholder services fees, which are borne only by the applicable class of Shares.
Securities Lending Activities
The services provided to the Fund by Citibank, N.A. as securities lending agent may include the following: selecting securities previously identified by the Fund as available for loan to be loaned; locating borrowers identified in the securities lending agency agreement; negotiating loan terms; monitoring daily the value of the loaned securities and collateral; requiring additional collateral as necessary; marking to market non-cash collateral; instructing the Fund's custodian with respect to the transfer of loaned securities; indemnifying the Fund in the event of a borrower default; and arranging for return of loaned securities to the Fund at loan termination.
The Fund did not participate in any securities lending activities during the Fund's most recently completed fiscal year.
33
Gross income from securities lending activities $00.00
Fees and/or compensation for securities lending activities and related services  
Fees paid to securities lending agent from a revenue split $00.00
Fees paid for any cash collateral management service (including fees deducted from a pooled cash collateral reinvestment vehicle) that are not included in the revenue split —
Administrative fees not included in revenue split —
Indemnification fee not included in revenue split —
Rebate (paid to borrower) $00.00
Other fees not included in revenue split (specify) —
Aggregate fees/compensation for securities lending activities $00.00
Net income from securities lending activities $00.00
Financial Information
Investment Ratings
Standard & Poor's Rating Services (S&P) LONG-TERM Issue RATINGS
Issue credit ratings are based, in varying degrees, on S&P's analysis of the following considerations: the likelihood of payment–capacity and willingness of the obligor to meet its financial commitment on an obligation in accordance with the terms of the obligation; the nature of and provisions of the obligation; and the protection afforded by, and relative position of, the obligation in the event of bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws affecting creditors' rights.
AAA—An obligation rated “AAA” has the highest rating assigned by S&P. The obligor's capacity to meet its financial commitment on the obligation is extremely strong.
AA—An obligation rated “AA” differs from the highest rated obligations only to a small degree. The obligor's capacity to meet its financial commitment on the obligation is very strong.
A—An obligation rated “A” is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. However, the obligor's capacity to meet its financial commitment on the obligation is still strong.
BBB—An obligation rated “BBB” exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.
Obligations rated “BB,” “B,” “CCC,” “CC,” and “C” are regarded as having significant speculative characteristics. “BB” indicates the least degree of speculation and “C” the highest. While such obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions.
BB—An obligation rated “BB” is less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation.
B—An obligation rated “B” is more vulnerable to nonpayment than obligations rated “BB,” but the obligor currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial, or economic conditions will likely impair the obligor's capacity or willingness to meet its financial commitment on the obligation.
CCC—An obligation rated “CCC” is currently vulnerable to nonpayment, and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation.
CC—An obligation rated “CC” is currently highly vulnerable to nonpayment.
C—A “C” rating is assigned to obligations that are currently highly vulnerable to nonpayment, obligations that have payment arrearages allowed by the terms of the documents, or obligations of an issuer that is the subject of a bankruptcy petition or similar action which have not experienced a payment default. Among others, the “C” rating may be assigned to subordinated debt, preferred stock or other obligations on which cash payments have been suspended in accordance with the instrument's terms or when preferred stock is the subject of a distressed exchange offer, whereby some or all of the issue is either repurchased for an amount of cash or replaced by other instruments having a total value that is less than par.
34
D—An obligation rated “D” is in payment default. The “D” rating category is used when payments on an obligation are not made on the date due, unless S&P believes that such payments will be made within five business days, irrespective of any grace period. The “D” rating also will be used upon the filing of a bankruptcy petition or the taking of similar action if payments on an obligation are jeopardized. An obligation's rating is lowered to “D” upon completion of a distressed exchange offer, whereby some or all of the issue is either repurchased for an amount of cash or replaced by other instruments having a total value that is less than par.
The ratings from “AA” to “CCC” may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories.
S&P Rating Outlook
An S& P rating outlook assesses the potential direction of a long-term credit rating over the intermediate term (typically six months to two years). In determining a rating outlook, consideration is given to any changes in the economic and/or fundamental business conditions.
Positive—Positive means that a rating may be raised.
Negative—Negative means that a rating may be lowered.
Stable—Stable means that a rating is not likely to change.
Developing—Developing means a rating may be raised or lowered.
N.M.—N.M. means not meaningful.
S&P Short-Term Issue RATINGS
Short-term ratings are generally assigned to those obligations considered short-term in the relevant market. In the United States, for example, that means obligations with an original maturity of no more than 365 days–including commercial paper.
A-1—A short-term obligation rated “A-1” is rated in the highest category by S&P. The obligor's capacity to meet its financial commitment on the obligation is strong. Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligor's capacity to meet its financial commitment on these obligations is extremely strong.
A-2—A short-term obligation rated “A-2” is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor's capacity to meet its financial commitment on the obligation is satisfactory.
A-3—A short-term obligation rated “A-3” exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.
B—A short-term obligation rated “B” is regarded as vulnerable and has significant speculative characteristics. The obligor currently has the capacity to meet its financial commitments; however, it faces major ongoing uncertainties which could lead to the obligor's inadequate capacity to meet its financial commitments.
C—A short-term obligation rated “C” is currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation.
D—A short-term obligation rated “D” is in payment default. The “D” rating category is used when payments on an obligation are not made on the date due, unless S&P believes that such payments will be made within any stated grace period. However, any stated grace period longer than five business days will be treated as five business days. The “D” rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized.
MOODY'S Investor Services, Inc. (MOODY's) LONG-TERM RATINGS
Moody's long-term ratings are assigned to issuers or obligations with an original maturity of one year or more and reflect both on the likelihood of a default on contractually promised payments and the expected financial loss suffered in the event of default.
Aaa—Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level of credit risk.
Aa—Obligations rated Aa are judged to be of high quality and are subject to very low credit risk.
A—Obligations rated A are judged to be upper-medium grade and are subject to low credit risk.
Baa—Obligations rated Baa are judged to be medium-grade and subject to moderate credit risk and as such may possess certain speculative characteristics.
Ba—Obligations rated Ba are judged to be speculative and are subject to substantial credit risk.
B—Obligations rated B are considered speculative and are subject to high credit risk.
Caa—Obligations rated Caa are judged to be speculative of poor standing and are subject to very high credit risk.
Ca—Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest.
35
C—Obligations rated C are the lowest rated and are typically in default, with little prospect for recovery of principal or interest.
Moody's appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aaa through Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category.
MOODY'S Short-Term RATINGS
Moody's short-term ratings are assigned to obligations with an original maturity of thirteen months or less and reflect the likelihood of a default on contractually promised payments.
P-1—Issuers (or supporting institutions) rated Prime-1 have a superior ability to repay short-term debt obligations.
P-2—Issuers (or supporting institutions) rated Prime-2 have a strong ability to repay short-term debt obligations.
P-3—Issuers (or supporting institutions) rated Prime-3 have an acceptable ability to repay short-term obligations.
NP—Issuers (or supporting institutions) rated Not Prime do not fall within any of the Prime rating categories.
FITCH, INC. (Fitch) LONG-TERM Debt RATINGs
Fitch long-term ratings report Fitch's opinion on an entity's relative vulnerability to default on financial obligations. The “threshold” default risk addressed by the rating is generally that of the financial obligations whose non-payment would best reflect the uncured failure of that entity. As such, Fitch long-term ratings also address relative vulnerability to bankruptcy, administrative receivership or similar concepts, although the agency recognizes that issuers may also make pre-emptive and therefore voluntary use of such mechanisms.
AAA: Highest Credit Quality—“AAA” ratings denote the lowest expectation of default risk. They are assigned only in cases of exceptionally strong capacity for payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events.
AA: Very High Credit Quality—“AA” ratings denote expectations of very low default risk. They indicate very strong capacity for payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events.
A: High Credit Quality—“A” ratings denote expectations of low default risk. The capacity for payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to adverse business or economic conditions than is the case for higher ratings.
BBB: Good Credit Quality—“BBB” ratings indicate that expectations of default risk are currently low. The capacity for payment of financial commitments is considered adequate but adverse business or economic conditions are more likely to impair this capacity.
BB: Speculative—“BB” ratings indicate an elevated vulnerability to default risk, particularly in the event of adverse changes in business or economic conditions over time; however, business or financial flexibility exists which supports the servicing of financial commitments.
B: Highly Speculative—“B” ratings indicate that material default risk is present, but a limited margin of safety remains. Financial commitments are currently being met; however, capacity for continued payment is vulnerable to deterioration in the business and economic environment.
CCC: Substantial Credit Risk—Default is a real possibility.
CC: Very High Levels of Credit Risk—Default of some kind appears probable.
C: Exceptionally High Levels of Credit Risk—Default is imminent or inevitable, or the issuer is in standstill. Conditions that are indicative of a “C” category rating for an issuer include: (a) the issuer has entered into a grace or cure period following non-payment of a material financial obligation; (b) the issuer has entered into a temporary negotiated waiver or standstill agreement following a payment default on a material financial obligation; or (c) Fitch otherwise believes a condition of “RD” or “D” to be imminent or inevitable, including through the formal announcement of a distressed debt exchange.
RD: Restricted Default—“RD” ratings indicate an issuer that in Fitch's opinion has experienced an uncured payment default on a bond, loan or other material financial obligation but which has not entered into bankruptcy filings, administration, receivership, liquidation or other formal winding-up procedure, and which has not otherwise ceased operating. This would include: (a) the selective payment default on a specific class or currency of debt; (b) the uncured expiry of any applicable grace period, cure period or default forbearance period following a payment default on a bank loan, capital markets security or other material financial obligation; (c) the extension of multiple waivers or forbearance periods upon a payment default on one or more material financial obligations, either in series or in parallel; or (d) execution of a distressed debt exchange on one or more material financial obligations.
D: Default—“D” ratings indicate an issuer that in Fitch's opinion has entered into bankruptcy filings, administration, receivership, liquidation or other formal winding-up procedure, or which has otherwise ceased business.
36
Default ratings are not assigned prospectively to entities or their obligations; within this context, non-payment on an instrument that contains a deferral feature or grace period will generally not be considered a default until after the expiration of the deferral or grace period, unless a default is otherwise driven by bankruptcy or other similar circumstance, or by a distressed debt exchange.
“Imminent” default typically refers to the occasion where a payment default has been intimated by the issuer, and is all but inevitable. This may, for example, be where an issuer has missed a scheduled payment, but (as is typical) has a grace period during which it may cure the payment default. Another alternative would be where an issuer has formally announced a distressed debt exchange, but the date of the exchange still lies several days or weeks in the immediate future.
In all cases, the assignment of a default rating reflects the agency's opinion as to the most appropriate rating category consistent with the rest of its universe of ratings, and may differ from the definition of default under the terms of an issuer's financial obligations or local commercial practice.
FITCH SHORT-TERM DEBT RATINGs
A Fitch short-term issuer or obligation rating is based in all cases on the short-term vulnerability to default of the rated entity or security stream and relates to the capacity to meet financial obligations in accordance with the documentation governing the relevant obligation. Short-Term Ratings are assigned to obligations whose initial maturity is viewed as “short term” based on market convention. Typically, this means up to 13 months for corporate, sovereign, and structured obligations, and up to 36 months for obligations in U.S. public finance markets.
F-1: Highest Short-Term Credit Quality—Indicates the strongest intrinsic capacity for timely payment of financial commitments; may have an added “+” to denote any exceptionally strong credit feature.
F-2: Good Short-Term Credit Quality—Good intrinsic capacity for timely payment of financial commitments.
F-3: Fair Short-Term Credit Quality—The intrinsic capacity for timely payment of financial commitments is adequate.
B: Speculative Short-Term Credit Quality—Minimal capacity for timely payment of financial commitments, plus heightened vulnerability to near term adverse changes in financial and economic conditions.
C: High Short-Term Default Risk—Default is a real possibility.
RD: Restricted Default—Indicates an entity that has defaulted on one or more of its financial commitments, although it continues to meet other financial obligations. Applicable to entity ratings only.
D: Default—Indicates a broad-based default event for an entity, or the default of a short-term obligation.
A.M. BEST Company, Inc. (a.m. best) LONG-TERM DEBT and Preferred Stock RATINGS
A Best's long-term debt rating is Best's independent opinion of an issuer/entity's ability to meet its ongoing financial obligations to security holders when due.
aaa: Exceptional—Assigned to issues where the issuer has an exceptional ability to meet the terms of the obligation.
aa: Very Strong—Assigned to issues where the issuer has a very strong ability to meet the terms of the obligation.
a: Strong—Assigned to issues where the issuer has a strong ability to meet the terms of the obligation.
bbb: Adequate—Assigned to issues where the issuer has an adequate ability to meet the terms of the obligation; however, the issue is more susceptible to changes in economic or other conditions.
bb: Speculative—Assigned to issues where the issuer has speculative credit characteristics, generally due to a modest margin or principal and interest payment protection and vulnerability to economic changes.
b: Very Speculative—Assigned to issues where the issuer has very speculative credit characteristics, generally due to a modest margin of principal and interest payment protection and extreme vulnerability to economic changes.
ccc, cc, c: Extremely Speculative—Assigned to issues where the issuer has extremely speculative credit characteristics, generally due to a minimal margin of principal and interest payment protection and/or limited ability to withstand adverse changes in economic or other conditions.
d: In Default—Assigned to issues in default on payment of principal, interest or other terms and conditions, or when a bankruptcy petition or similar action has been filed.
Ratings from “aa” to “ccc” may be enhanced with a “+” (plus) or “-” (minus) to indicate whether credit quality is near the top or bottom of a category.
A.M. BEST SHORT-TERM DEBT RATINGS
A Best's short-term debt rating is Best's opinion of an issuer/entity's ability to meet its financial obligations having original maturities of generally less than one year, such as commercial paper.
AMB-1+ Strongest—Assigned to issues where the issuer has the strongest ability to repay short-term debt obligations.
AMB-1 Outstanding—Assigned to issues where the issuer has an outstanding ability to repay short-term debt obligations.
AMB-2 Satisfactory—Assigned to issues where the issuer has a satisfactory ability to repay short-term debt obligations.
37
AMB-3 Adequate—Assigned to issues where the issuer has an adequate ability to repay short-term debt obligations; however, adverse economic conditions likely will reduce the issuer's capacity to meet its financial commitments.
AMB-4 Speculative—Assigned to issues where the issuer has speculative credit characteristics and is vulnerable to adverse economic or other external changes, which could have a marked impact on the company's ability to meet its financial commitments.
d: In Default—Assigned to issues in default on payment of principal, interest or other terms and conditions, or when a bankruptcy petition or similar action has been filed.
A.M. Best Rating Modifiers
Both long- and short-term credit ratings can be assigned a modifier.
u—Indicates the rating may change in the near term, typically within six months. Generally is event-driven, with positive, negative or developing implications.
pd—Indicates ratings assigned to a company that chose not to participate in A.M. Best's interactive rating process. (Discontinued in 2010).
i—Indicates rating assigned is indicative.
A.M. BEST RATING OUTLOOK
A.M. Best Credit Ratings are assigned a Rating Outlook that indicates the potential direction of a credit rating over an intermediate term, generally defined as the next 12 to 36 months.
Positive—Indicates possible ratings upgrade due to favorable financial/market trends relative to the current trading level.
Negative—Indicates possible ratings downgrade due to unfavorable financial/market trends relative to the current trading level.
Stable—Indicates low likelihood of rating change due to stable financial/market trends.
Not Rated
Certain nationally recognized statistical rating organizations (NRSROs) may designate certain issues as NR, meaning that the issue or obligation is not rated.
38
Addresses
Federated Municipal Bond Fund, Inc.
Class T Shares
Federated Hermes Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
Distributor
Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Investment Adviser
Federated Investment Management Company
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Custodian
The Bank of New York Mellon
One Wall Street
New York, NY 10286
Transfer Agent and Dividend Disbursing Agent
State Street Bank and Trust Company
P.O. Box 219318
Kansas City, MO 64121-9318
Independent Registered Public Accounting Firm
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116-5072
39
Appendix
The following is a list of persons, other than the Adviser and its affiliates, that have been approved to receive nonpublic portfolio holdings information concerning the Federated Hermes Complex; however, certain persons below might not receive such information concerning the Fund:
CUSTODIAN(S)
The Bank of New York Mellon
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Ernst & Young LLP
LEGAL COUNSEL
Goodwin Procter LLP
K&L Gates LLP
Financial Printer(S)
Donnelley Financial Solutions
Proxy Voting Administrator
Glass Lewis & Co., LLC
SECURITY PRICING SERVICES
Bloomberg L.P.
IHS Markit (Markit North America)
ICE Data Pricing & Reference Data, LLC
JPMorgan PricingDirect
Refinitiv US Holdings Inc.
RATINGS AGENCIES
Fitch, Inc.
Moody's Investors Service, Inc.
Standard & Poor's Financial Services LLC
Other SERVICE PROVIDERS
Other types of service providers that have been approved to receive nonpublic portfolio holdings information include service providers offering, for example, trade order management systems, portfolio analytics, or performance and accounting systems, such as:
Bank of America Merrill Lynch
Bloomberg L.P.
Citibank, N.A.
Eagle Investment Systems LLC
Electra Information Systems
FactSet Research Systems Inc.
FISGlobal
Institutional Shareholder Services
Investortools, Inc.
MSCI ESG Research LLC
Sustainalytics U.S. Inc.
The Yield Book, Inc.
Wolters Kluwer N.V.
40

 

 

Item 28. Exhibits

(a) Articles of Incorporation  
  Conformed copy of Articles of Restatement dated April 30, 1993, including Articles Supplementary through June 1, 2017; Certificates of Correction dated February 28, 1997, including Exhibits A and B; and Articles of Amendment through June 1, 2017

+

 

 

(b) By-Laws  
 

Conformed Copy of Amended and Restated By-Laws of the Registrant including Amendment Nos. 11 through 20

 

+

 

 

(c) Instruments Defining Rights of Security Holders  
  Copies of Specimen Certificates for Shares of Capital Stock of the Registrant’s Class A Shares, Class B Shares and Class C Shares, as filed in Post-Effective Amendment No. 50 on May 29, 1997on Form N-1A (File No. 2-57181 and 811-2677)  
  As of September 1, 1997, Federated Securities Corp. stopped issuing share certificates.  

 

(d) Investment Advisory Contracts  
 

Federated Investment Management Company

 

Conformed copy of the Investment Advisory Contract of the Registrant dated August 1, 1989, including Amendment dated June 1, 2001 and Limited Power of Attorney dated June 1, 2017

+

 

 

(e) Underwriting Contracts  
1 Conformed copy of the Distributor’s Contract of the Registrant dated March 1, 1993, including Exhibits A-G and Amendments dated June 1, 2001 and October 1, 2003

+

 

2 Conformed copy of the Distributor’s Contract for Class B Shares of the Registrant dated October 24, 1997, including Amendments dated October 1, 2003 and June 1, 2001 +

 

(f) Bonus or Profit Sharing Contracts  
 

Not applicable

 

  

 

(g) Custodian Agreements  
  Conformed copy of Custodian Agreement dated June 7, 2005 by and between The Bank of New York Mellon and the Registrant, including Amendments 1-31 and Exhibits A and B revised March 1, 2020 +

 

(h) Other Material Contracts  
     
1 Services Agreement  
(a) Conformed copy of Services Agreement between Federated Advisory Services Company and Federated Investment Management Company dated January 1, 2004,  including Schedule 1 (revised March 1, 2020)

+

 

(b) Conformed copy of the Second Amended and Restated Services Agreement, amended and restated as of December 1, 2001, between Federated Shareholder Services Company and the Registrant, including Schedule 1 (revised March 1, 2020)

+

 

(c) Conformed copy of the Principal Shareholder Servicer’s Agreement for Class B Shares of the Registrant dated October 24, 1997 +
(d) Conformed copy of the Shareholder Services Agreement for Class B Shares of the Registrant dated October 24, 1997 +
     
2 Transfer Agency Agreement  
  Conformed copy of the Transfer Agency and Service Agreement between the Federated Funds and State Street Bank and Trust Company dated January 31, 2017, including Exhibit A (revised January 2, 2020) and Schedules

+

 

     
3 Administrative Services Agreement  
  Conformed copy of the Second Amended and Restated Agreement for Administrative Services between the Federated Funds and Federated Administrative Services dated September 1, 2017, including Exhibit A (revised March 1, 2020) and Exhibit B

+

 

     
4 Financial Administration and Accounting Agreement  
  Conformed copy of the Fund Accounting Agreement between the Federated Funds and The Bank of New York Mellon dated March 1, 2011, as amended

+

 

 

(i) Legal Opinion  
  Conformed copy of Opinion and Consent of Counsel as to legality of shares being registered, as filed on paper in Post-Effective Amendment No. 1 on November 29, 1976 (File No. 2-57181 and 811-2677)  

 

(j) Other Opinions  
  Conformed copy of Consent of Independent Registered Public Accounting Firm Ernst & Young LLP

+

 

 

(k) Omitted Financial Statements  
 

Not Applicable

 

  

 

(l) Initial Capital Agreements  
  Conformed copy of Initial Capital Understanding, as filed on paper in Post-Effective Amendment No. 1 on November 29, 1976 (File No. 2-57181 and 811-2677)  

 

(m) Rule 12b-1 Plan  
1 Conformed copy of the Distribution Plan between certain classes of the Registrant and Federated Securities Corp., dated February 12, 2004 including Exhibit A

+

 

2 Conformed copy of the Distribution Plan for Class B Shares of the Registrant dated October 24, 1997 +

 

(n) Rule 18f-3 Plan  
  Conformed copy of the Multiple Class Plan and all share class Exhibits as adopted by certain Federated investment companies offering separate classes of shares

+

 

 

(o) Powers of Attorney  
1 Conformed copy of Power of Attorney of J. Christopher Donahue, President and Director of the Registrant, as filed via EDGAR in PEA No. 50 filed May 29, 1997 on Form N-1A (File No. 2-57181 and 811-2677)  
2 Conformed copy of Power of Attorney of Charles F Mansfield, Jr., and John S. Walsh, Directors of the Registrant, as filed via EDGAR in PEA No. 54 filed July 30, 1999 on Form N-1A (File No. 2-57181 and 811-2677)  
3 Conformed copy of Power of Attorney of Maureen Lally-Green, Director of the Registrant, as filed via EDGAR in PEA No. 69 filed May 26, 2010 on Form N-1A (File No. 2-57181 and 811-2677)  
4 Conformed copy of Power of Attorney of Lori A. Hensler, Treasurer of the Registrant, as filed via EDGAR in PEA No. 74 filed May 28, 2013 on Form N-1A (File No. 2-57181 and 811-2677)  
5 Conformed copy of Power of Attorney of John T. Collins and P. Jerome Richey, Directors of the Registrant, as filed via EDGAR in PEA No. 76 filed May 28, 2014 on Form N-1A (File No. 2-57181 and 811-2677)  
6 Conformed copy of Power of Attorney of Thomas R. Donahue and G. Thomas Hough, Directors of the Registrant, as filed via EDGAR in PEA No. 80 filed May 26, 2016 on Form N-1A (File No. 2-57181 and 811-2677)  
7 Conformed copy of Power of Attorney of Thomas O’Neill, Director of the Registrant +

 

(p) Codes of Ethics  
  Conformed copy of the Federated Hermes, Inc. Code of Ethics for Access Persons, effective January 31, 2020

+

 

 

+

Exhibit is being filed electronically with registration statement

 

  

 

Item 29  Persons Controlled by or Under Common Control with the Fund:
None

 

Item 30.  Indemnification

Indemnification is provided to Officers and Directors of the Registrant pursuant to the Registrant's By-Laws, as amended. This includes indemnification against: (a) any liabilities or expenses incurred in connection with the defense or disposition of any action, suit or proceeding in which an Officer or Director may be or may have been involved; and (b) any liabilities and expenses incurred by an Officer or Director as a result of having provided personally identifiable information to a regulator or counterparty by or with whom the Registrant (or its series, as applicable) is regulated or engages in business to satisfy a legal or procedural requirement of such regulator or counterparty.

The Investment Advisory Contract, and Sub-advisory Agreement as applicable, (collectively, “Advisory Contracts”) between the Registrant and the investment adviser, and sub-adviser as applicable, (collectively, “Advisers”) of its series, provide that, in the absence of willful misfeasance, bad faith, gross negligence, or reckless disregard of the obligations or duties under the Advisory Contracts on the part of the Advisers, Advisers shall not be liable to the Registrant or to any shareholder for any act or omission in the course of or connected in any way with rendering services or for any losses that may be sustained in the purchase, holding, or sale of any security.

The Registrant’s distribution contract contains provisions limiting the liability, and providing for indemnification, of the Officers and Directors under certain circumstances.

Registrant's Directors and Officers are covered by an Investment Trust Errors and Omissions Policy.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to Directors, Officers, and controlling persons of the Registrant by the Registrant pursuant to the By-Laws, as amended, or otherwise, the Registrant is aware that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and, therefore, is unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by Directors), Officers, or controlling persons of the Registrant in connection with the successful defense of any act, suit, or proceeding) is asserted by such Directors, Officers, or controlling persons in connection with the shares being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issues.

Insofar as indemnification for liabilities may be permitted pursuant to Section 17 of the Investment Company Act of 1940 for Directors, Officers, and controlling persons of the Registrant by the Registrant pursuant to the By-Laws, as amended, or otherwise, the Registrant is aware of the position of the Securities and Exchange Commission as set forth in Investment Company Act Release No. IC-11330. Therefore, the Registrant undertakes that in addition to complying with the applicable provisions of the By-Laws, as amended, or otherwise, in the absence of a final decision on the merits by a court or other body before which the proceeding was brought, that an indemnification payment will not be made unless in the absence of such a decision, a reasonable determination based upon factual review has been made (i) by a majority vote of a quorum of non-party Directors who are not interested persons of the Registrant or (ii) by independent legal counsel in a written opinion that the indemnitee was not liable for an act of willful misfeasance, bad faith, gross negligence, or reckless disregard of duties. The Registrant further undertakes that advancement of expenses incurred in the defense of a proceeding (upon undertaking for repayment unless it is ultimately determined that indemnification is appropriate) against an Officer, Director or controlling person of the Registrant will not be made absent the fulfillment of at least one of the following conditions: (i) the indemnitee provides security for his undertaking; (ii) the Registrant is insured against losses arising by reason of any lawful advances; or (iii) a majority of a quorum of disinterested non-party Directors or independent legal counsel in a written opinion makes a factual determination that there is reason to believe the indemnitee will be entitled to indemnification.

 

 

Item 31  Business and Other Connections of Investment Adviser: Federated Investment Management Company
For a description of the other business of the Investment Adviser, see the section entitled “Who Manages the Fund?” in Part A. The affiliations with the Registrant of two of the Trustees and two of the Officers of the Investment Adviser are included in Part B of this Registration Statement under "Who Manages and Provides Services to the Fund?"  The remaining Trustees of the Investment Adviser and, in parentheses, their principal occupations are:  Thomas R. Donahue, (Chief Financial Officer, Federated Hermes, Inc.), 1001 Liberty Avenue, Pittsburgh, PA, 15222-3779, John B. Fisher, (Vice Chairman, Federated Hermes, Inc.) 1001 Liberty Avenue, Pittsburgh, PA, 15222-3779 and James J. Gallagher, II, Partner, Morris James LLP, 500 Delaware Avenue, Suite 1500, Wilmington, DE  19801-1494.  The business address of each of the Officers of the Investment Adviser is 1001 Liberty Avenue, Pittsburgh, Pennsylvania 15222-3779.  These individuals are also officers of a majority of the Investment Advisers to the investment companies in the Federated Hermes Fund Complex described in Part B of this Registration Statement.
The Officers of the Investment Adviser are:
Chairman: J. Christopher Donahue
President/ Chief Executive Officer: John B. Fisher
Executive Vice Presidents:

Deborah A. Cunningham

Robert J. Ostrowski

Senior Vice Presidents:

Todd Abraham

J. Scott Albrecht

Randall S. Bauer

Jonathan C. Conley

Mark E. Durbiano

Donald T. Ellenberger

Eamonn G. Folan

Richard J. Gallo

John T. Gentry

Susan R. Hill

William R. Jamison

Jeffrey A. Kozemchak

Anne H. Kruczek

Marian R. Marinack

Mary Jo Ochson

Jeffrey A. Petro

Ihab Salib

Michael W. Sirianni, Jr.

Steven J. Wagner

Paige Wilhelm

 

Vice Presidents:

Christopher S. Bodamer

G. Andrew Bonnewell

Hanan Callas

David B. Catalane, Jr.

Leslie Ciferno

Jerome Conner

Lee R. Cunningham, II

Gregory Czamara, V

B. Anthony Delserone, Jr.

Joseph A. Delvecchio

Jason DeVito

Bryan Dingle

William Ehling

Ann Ferentino

Kevin M. Fitzpatrick

Timothy P. Gannon

Kathryn P. Glass

James L. Grant

Patricia L. Heagy

Nathan H. Kehm

John C. Kerber

J. Andrew Kirschler

Allen J. Knizner

Tracey Lusk

Karen Manna

Daniel James Mastalski

Robert J. Matthews

Christopher McGinley

Keith E. Michaud

Karl Mocharko

Joseph M. Natoli

Gene Neavin

Bob Nolte

Liam O’Connell

Mary Kay Pavuk

John Polinski

Rae Ann Rice

Brian Ruffner

Thomas C. Scherr

John Sidawi

Kyle Stewart

Patrick J. Strollo, III

Mary Ellen Tesla

James Damen Thompson

Timothy G. Trebilcock

Nicholas S. Tripodes

Anthony A. Venturino

Mark Weiss

George B. Wright

Christopher Wu

 

Assistant Vice Presidents:

John Badeer

Ian Paul Bangor

Patrick Benacci

Nicholas Cecchini

James Chelmu

Joseph Engel

Brandon Ray Hochstetler

Jeff J. Ignelzi

Nick Navari

Bradley Payne

Braden Rotberg

John W. Scullion

Steven J. Slanika

Peter Snook

Randal Stuckwish

Michael S. Wilson

 

Secretary: G. Andrew Bonnewell
Assistant Secretaries:

Edward C. Bartley

George F. Magera

 

Treasurer: Thomas R. Donahue
Assistant Treasurers: Jeremy D. Boughton
Richard A. Novak
Chief Compliance Officer: Stephen Van Meter

 

Item 32  Principal Underwriters:
(a) Federated Securities Corp., the Distributor for shares of the Registrant, acts as principal underwriter for the following investment companies, including the Registrant:
  Federated Adjustable Rate Securities Fund
  Federated Adviser Series
  Federated Hermes Core Trust
  Federated Core Trust III
  Federated Equity Funds
  Federated Equity Income Fund, Inc.
  Federated Fixed Income Securities, Inc.
  Federated Global Allocation Fund
  Federated Government Income Securities, Inc.
  Federated Government Income Trust
  Federated High Income Bond Fund, Inc.
  Federated High Yield Trust
  Federated Income Securities Trust
  Federated Index Trust
  Federated Institutional Trust
  Federated Hermes Insurance Series
  Federated International Series, Inc.
  Federated Investment Series Funds, Inc.
  Federated Managed Pool Series
  Federated MDT Series
  Federated Municipal Bond Fund, Inc.
  Federated Municipal Securities Income Trust
  Federated Premier Municipal Income Fund
  Federated Project and Trade Finance Tender Fund
  Federated Short-Intermediate Duration Municipal Trust
  Federated Total Return Government Bond Fund
  Federated Total Return Series, Inc.
  Federated U.S. Government Securities Fund: 1-3 Years
  Federated U.S. Government Securities Fund: 2-5 Years
  Federated World Investment Series, Inc.
  Intermediate Municipal Trust
  Money Market Obligations Trust

 

(b)    

(1)

Positions and Offices with Distributor

(2)

Name

 

(3)

Positions and Offices With Registrant

Executive Vice President, Assistant Secretary and Director: Thomas R. Donahue  
President and Director: Paul Uhlman  
Vice President and Director: Peter J. Germain  
Director: Frank C. Senchak  
Executive Vice Presidents:

Michael Bappert

Peter W. Eisenbrandt

Solon A. Person, IV

  
Senior Vice Presidents:

Irving Anderson

Daniel G. Berry

Jack Bohnet

Edwin J. Brooks, III

Bryan Burke

Scott J. Charlton

Steven R. Cohen

James S. Conley

Stephen R. Cronin

Charles L. Davis, Jr.

Michael T. Dieschborg

Michael T. DiMarsico

Jack C. Ebenreiter

James Getz, Jr.

Scott A. Gunderson

Dayna C. Haferkamp

Vincent L. Harper, Jr.

Bruce E. Hastings

Donald Jacobson

Jeffrey S. Jones

Scott D. Kavanagh

Harry J. Kennedy

Michael Koenig

Edwin C. Koontz

Anne H. Kruczek

Jane E. Lambesis

Jerry Landrum

Hans W. Lange, Jr.

Michael Liss

Diane Marzula

Amy Michaliszyn

Richard C. Mihm

Vincent T. Morrow

Alec H. Neilly

Keith Nixon

James E. Ostrowski

Stephen Otto

Richard P. Paulson

Richard A. Recker

Diane M. Robinson

Brian S. Ronayne

Timothy A. Rosewicz

Eduardo G. Sanchez

Tom Schinabeck

Edward L. Smith

John Staley

William C. Tustin

Michael N. Vahl

G. Walter Whalen

Lewis C. Williams

Michael Wolff

Daniel R. Wroble

Erik Zettlemayer

Paul Zuber

  
Vice Presidents:

Frank Amato

Catherine M. Applegate

Kenneth C. Baber

Raisa E. Barkaloff

Robert W. Bauman

Marc Benacci

Christopher D. Berg

Bill Boarts

Matthew A. Boyle

Edward R. Bozek

Thomas R. Brown

Mark Carroll

Dan Casey

Stephen J. Costlow

Mary Ellen Coyne

Kevin J. Crenny

David G. Dankmyer

Christopher T. Davis

Donald Edwards

Mark A. Flisek

Stephen Francis

Heather W. Froelich

David D. Gregoire

Raymond J. Hanley

George M. Hnaras

Scott A. Holick

Ryan W. Jones

Todd Jones

Patrick Kelly

Nicholas R. Kemerer

Robert H. Kern

Shawn E. Knutson

Crystal C. Kwok

David M. Larrick

John P. Liekar

Jonathan Lipinski

Paul J. Magan

Margaret M. Magrish

Alexi A. Maravel

Meghan McAndrew

Martin J. McCaffrey

Samuel McGowan

Daniel McGrath

Brian McInis

John C. Mosko

Mark J. Murphy

Catherine M. Nied

Ted Noethling

John A. O’Neill

Mark Patsy

Marcus Persichetti

Max E. Recker

Emory Redd

Matt Ryan

  
 

John Shrewsbury

Peter Siconolfi

Neal Siena

Justin Slomkowski

Bradley Smith

John R. Stanley

Mark Strubel

Jonathan Sullivan

David Wasik

Theodore Williams

Brian R. Willer

Littell L. Wilson

James J. Wojciak

  
Assistant Vice Presidents:

Debbie Adams-Marshall

Zachary J. Bono

Edward R. Costello

Madison Dischinger

Chris Jackson

Kristen C. Kiesling

Anthony W. Lennon

Stephen R. Massey

Carol McEvoy McCool

John K. Murray

Melissa R. Ryan

Carol Anne Sheppard

Scott A. Vallina

Laura Vickerman

  
Secretary: Kary A. Moore  
Assistant Secretaries: Edward C. Bartley  
  Thomas R. Donahue  
  George F. Magera  
Treasurer: Richard A. Novak  
Assistant Treasurer: Jeremy D. Boughton  
Chief Compliance Officer: Stephen Van Meter  

 

(c) Not Applicable

 

Item 33.  Location of Accounts and Records:  
All accounts and records required to be maintained by Section 31(a) of the Investment Company Act of 1940 and Rules 31a-1 through 31a-3 promulgated thereunder are maintained at one of the following locations:  
Registrant

Federated Hermes Funds

4000 Ericsson Drive

Warrendale, PA 15086-7561

(Notices should be sent to the Agent for Service at the address listed on the facing page of this filing.)

Federated Administrative Services

(Administrator)

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

 

Federated Securities Corp.

(Distributor)

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

 

Federated Investment Management Company

(Adviser)

 

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Federated Advisory Services Company

(Adviser)

 

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

State Street Bank and Trust Company

(Transfer Agent and Dividend Disbursing Agent)

 

P.O. Box 219318

Kansas City, MO 64121-9318

Bank of New York Mellon
(Custodian)

The Bank of New York Mellon

One Wall Street

New York, NY 10286

 

     

 

Item 34  Management Services:  Not applicable.
 

 

Item 35  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.

 

 

 
 

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, and the Investment Company Act of 1940, the Registrant, FEDERATED MUNICIPAL BOND FUND, INC., certifies that it meets all of the requirements for effectiveness of this Amendment to its Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Amendment to its Registration Statement to be signed on its behalf by the undersigned, duly authorized, in the City of Pittsburgh and Commonwealth of Pennsylvania, on the 26th day of May, 2020.

FEDERATED MUNICIPAL BOND FUND, INC.

BY: /s/ George F. Magera

George F. Magera, Assistant Secretary

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/ George F. Magera

George F. Magera, Assistant Secretary

 Attorney In Fact For the Persons Listed Below May 26, 2020

J. Christopher Donahue *

 

 President and Director (Principal Executive Officer)  
Thomas R. Donahue* Director  
Lori A. Hensler* Treasurer (Principal Financial Officer/Principal Accounting Officer)  
John T. Collins* Director  
G. Thomas Hough Director  
Maureen Lally-Green* Director  
Charles F. Mansfield, Jr.* Director  
Thomas O’Neill* Director  
P. Jerome Richey* Director  
John S. Walsh* Director  
*By Power of Attorney    

 

 

 

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S-K

Exhibit 28 (a) under Form N-1A

Exhibit (3) (i) under Item 601/Reg. S-K

 

 

ARTICLES OF RESTATEMENT

 

OF

 

LIBERTY MUNICIPAL SECURITIES FUND, INC.

 

Liberty Municipal Securities Fund, Inc., a Maryland Corporation (the “Corporation”, having its principal office in Baltimore, Maryland, hereby certifies to the State Department of Assessments and Taxation that:

 

FIRST:       The Corporation desires to restate its Charter as currently in effect. The Charter as restated is as follows:

 

FIRST: The undersigned, John W. McGonigle, whose post office address is 421 Seventh Avenue, Pittsburgh, Pennsylvania, 15219, being at least twenty-one years of age, does under and by virtue of the General Laws of the State of Maryland authorizing the formation of corporations, hereby form a corporation.

 

SECOND: The name of the corporation is Liberty Municipal Securities Fund, Inc.

 

THIRD: The purpose for which the Corporation is formed is to act as an open-end investment company of the management type registered as such with the Securities and Exchange Commission pursuant to the Investment Company Act of 1940 and to exercise and generally to enjoy all of the powers, rights and privileges granted to, or conferred upon, corporations by the General Laws of the State of Maryland now or hereafter in force.

 

FOURTH: The post office address of the principal office and the office of the resident agent of the Corporation in the State of Maryland is 32 South Street, Baltimore, Maryland 21202. The resident agent of the Corporation in the state of Maryland is THE CORPORATION TRUST INCORPORATED, which is a corporation organized and existing under the laws of the State of Maryland.

 

FIFTH: (a) The Corporation is authorized to issue 1,000,000,000 shares of common stock, par value $.01 per share. The aggregate par value of all shares which the Corporation is authorized to issue is $10,000,000. Subject to the following paragraph, the authorized shares are classified as separate classes of common stock, with 375,000,000 classified into each of Class A and Class C shares, and 250,000,000 unclassified shares.

 

(b) The Board of Directors is authorized to classify or to reclassify (i.e., into series and classes of series), from time to time, any unissued shares of stock of the Corporation, whether now or hereafter authorized, by setting, changing or eliminating the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications or terms or conditions of or rights to require redemption of the stock.

 

Unless otherwise provided by the Board of Directors prior to the issuance of the stock, the shares of each class or series of stock shall be subject to the following:

 

(i) The Board of Directors may redesignate a class or series of stock whether or not share of such class or series are issued and outstanding, provided that such redesignation does not affect the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications or terms or conditions of redemption of such class or series of stock.

 

(ii) The assets attributable to each class or series may be invested in a common investment portfolio. The assets and liabilities and the income and expenses of each class or series of the Corporation’s stock shall be determined separately and, accordingly, the net asset value of shares of Capital Stock of the Corporation’s stock may vary among classes or series. The income or gain and the expenses or liabilities of the Corporation shall be allocated to each class or series of stock as determined by or under the direction of the Board of Directors.

 

(iii) Shares of each class or series of stock shall be entitled to such dividends or distributions, in stock or in cash or both, as may be declared from time to time by the Board of Directors with respect to such class or series. Dividends or distributions shall be paid on shares of a class or series of stock only out of the assets belonging to that class or series.

 

(iv) In the event of the liquidation or dissolution of the Corporation, the stockholders of a class or series of the Corporation’s stock shall be entitled to receive, as a class or series, out of the assets of the Corporation available for distribution to stockholders, the assets belonging to that class or series less the liabilities allocated to that class or series. The assets so distributable to the stockholders of a class or series shall be distributed among such stockholders in proportion to the number of shares of that class or series held by them and recorded on the books of the Corporation. In the event that there are any assets available for distribution that are not attributable to any particular class or series of stock, such assets shall be allocated to all classes and series in proportion to the net asset value of the respective classes or series.

 

(v) All holders of shares of stock vote as a single class or series except with respect to any matter which affects only one or more classes or series of stock, in which case only the holders of shares of the classes or series affected shall be entitled to vote.

 

(c)       The Corporation may issue fractional shares. Any fractional shares shall carry proportionately all the rights of a whole share, except any right to receive a certificate evidencing such fractional share, but including, without limitation, the right to vote and the right receive dividends.

 

SIXTH: (1) The number of Directors of the Corporation shall be three, or such other number as may be from time to time fixed in the manner provided by the By-Laws of the Corporation but shall never be less than three (3).

 

(b)       The names of the Directors who are currently in office are:

 

John F. Donahue Edward L. Flaherty, Jr.
John T. Conroy, Jr. Peter E. Madden
William J. Copeland Gregor F. Meyer
J. Christopher Donahue Wesley W. Posvar
James E. Dowd Marjorie P. Smuts
Lawrence D. Ellis, M.D.  

 

SEVENTH: The Board of Directors is empowered to authorize the issuance from time to time of Shares of Capital Stock of the Corporation, whether now or hereafter authorized; provided, however, that the consideration per Shares to be received by the Corporation upon the issuance or sale of any shares of its Capital Stock shall be the net asset value per Share determined in accordance with the requirements of the Investment Company Act of 1940 and the applicable rules and regulations of the Securities and Exchange Commission (or any succeeding governmental authority) and in conformity with generally accepted accounting practices and principles.

 

EIGHTH: (a) To the extent the Corporation has funds or property legally available therefor, each Stockholder of the Corporation shall have the right at such times as may be permitted by the Corporation, but no less frequently than once a week, to require the Corporation to redeem all or any part of its Shares at a redemption price equal to the net asset value per Share of the Capital Stock next determined after the Shares are tendered for redemption; said determination of the net asset value per Share to be made in accordance with the requirements of the Investment Company Act of 1940 and the applicable rules and regulations of the Securities and Exchange Commission (or any succeeding government authority) and in conformity with generally accepted accounting practices and principles.

 

Notwithstanding the foregoing, the Corporation may postpone payment or deposit of the redemption price and may suspend the right of the holders of Capital Stock to require the Corporation to redeem such Capital Stock during any period when (i) the New York Stock Exchange is closed for other than weekends and holidays; (ii) the Securities and Exchange Commission has by order permitted such suspension; (iii) an emergency as defined by rules of the Securities and Exchange Commission exists, making disposal of portfolio securities or valuation of net assets of the Corporation not reasonably practicable; or (iv) trading on the New York Stock Exchange is restricted under the conditions set forth in the rules and regulations of the Securities and Exchange Commission.

 

(b)       The Corporation shall have the right, exercisable at the discretion of the Board of Directors, to redeem Shares of any Stockholder for their then current net asset value per Share if at such time the Stockholder owns Shares having an aggregate net asset value of less than $1,000.00

 

(c)       Each Share of Capital Stock of the Corporation is subject to redemption by the Corporation at the redemption price computed in the manner set forth in subparagraph (a) of Article EIGHTH of these Articles of Incorporation at any time if the Board of Directors, in its sole discretion, determines that failure to do so may result in the Corporation being classified as a personal holding company as defined in the Internal Revenue Code.

 

(d)       Transfer of Capital Stock will be recorded on the stock transfer records of the Corporation at the request of the holders thereof at any time during normal business hours of the Corporation unless the Board of Directors of the Corporation determines, in its sole discretion, that allowing such transfer may result in the Corporation being classified as a personal holding company as defined in the Internal Revenue Code.

 

NINTH: The following provisions are hereby adopted for the purpose of defining, limiting, and regulating the powers of the Corporation and of the Directors and Stockholders:

 

(1)       No Stockholder of the Corporation shall have any pre-emptive or preferential right of subscription to any Shares of any class of the stock of the Corporation whether now or hereafter authorized. The Board of Directors may issue Shares of the Capital Stock of the Corporation without offering the same either in whole or in part to the Stockholders.

 

(2)       Capital Stock of the Corporation may be purchased, held and disposed of by the Officers and Directors of the Corporation, by partnerships of which any such officer or director may be a member and by corporations of which any Officer or Director of the Corporation may be an officer or director. Except as above set forth, or authorized by the Securities and Exchange Commission, the Officers and Directors of the Corporation and partnerships or corporations which are affiliates of the Officers and Directors may not deal with the Corporation as principals in the purchase or sale of any securities or other property.

 

(3)       The Corporation may enter into exclusive or non-exclusive underwriting contracts or contracts for the sale of its Shares and may also enter into contracts for investment advisory, management and administrative services. The terms and conditions, methods of authorization, renewal, amendment and termination of the aforesaid contracts shall be as determined at the discretion of the Board of Directors; subject, however, to the provisions of the Charter of the Corporation, the By-Laws of the Corporation, applicable state law, and the Investment Company Act of 1940 and the rules and regulations of the Securities and Exchange Commission.

 

(4)       Except as otherwise provided by law or by the Charter of the Corporation, no contract or other transaction between the Corporation and any person, partnership or corporation and no act of the Corporation shall in any way be affected or invalidated by the fact that any Officer or Director of the Corporation is pecuniarily or otherwise interested therein or is such person or a member, officer or director of such partnership or other corporation, provided, that the fact of such interest shall be known to the Board of Directors of the Corporation. Specifically, but without limitation of the foregoing, the Corporation may:

 

(a)       Enter into a written underwriting contract, management contracts for research and advisory services with Federated Research Corp. or its parent, affiliates or subsidiaries thereof, or their respective successors, or otherwise do business with such corporation, notwithstanding the fact that one or more of the Directors of the Corporation and some or all of its Officers are, have been, or may become Directors, Officers, Employees or Stockholders of Federated Research Corp. or its parent, affiliates or subsidiaries or successors, and in the absence of actual fraud the Corporation may deal freely with Federated Research Corp. or its parent, affiliates, subsidiaries or successors, and neither such underwriting contract, management contract or contract for research or advisory services nor any other contract or transaction between the Corporation and Federated Research Corp. or its parent, affiliates, subsidiaries or successors shall be invalidated or in any way affected thereby, nor shall any Director or Officer of the Corporation be liable to the Corporation or any Stockholder or creditor of the corporation or to any other person for any loss incurred under or by reason of any such contract or transaction. Anything in the foregoing notwithstanding, no Officer or Director or underwriter or investment adviser of the Corporation shall be protected against any liability to the Corporation or to its security holders to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of this office;

 

(5)       No Officer or Director of the Corporation or of any investment advisory company or management company, nor the Corporation itself, nor such investment advisory or management company or underwriter of the Corporation shall take long or short positions in respect of any Shares issued by the Corporation; provided, however, that such prohibition shall not prevent:

 

(a)       Any underwriter from purchasing from the Corporation Shares issued by the Corporation, provided that orders to purchase from the Corporation are entered with the Corporation by such underwriter either for investment or upon receipt by it of purchase orders for Shares of Stock of the Corporation, and provided such purchases are not in excess of purchase orders received by such underwriter;

 

(b)       The Corporation or any distributor or underwriter from maintaining a market for Shares of Capital Stock issued by the Corporation;

 

(c)        The purchase from the Corporation of Shares by the Officers or Directors of the Corporation or of any investment advisory, management company or underwriter or distributor of the Corporation at the prices available to the public or as authorized by the Securities Exchange Commission at the moment of such purchase.

 

6.       The Corporation shall indemnify its Officers, Directors, employees and agents and any person who serves at the request of the Corporation as a Director, Officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise to the extent permitted by Maryland law as amended from time to time provided, however, that no Officer or Director shall be protected against any liability to the Corporation or its Stockholders to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office. In addition, the Corporation may purchase and maintain insurance on behalf of any person who is or was a Director, Officer, employee or agent of the Corporation, or who, while a Director, Officer, employee or agent of the Corporation, is or was serving at the request of the Corporation as a director, officer, partner, trustee, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust, other enterprise, or employee benefit plan against any liability asserted against and incurred by such person in any such capacity or arising out of such person’s position, whether or not the Corporation would have the power to indemnify against liability under the provisions of this paragraph.

 

7.       The Board of Directors shall, subject to the laws of Maryland, have the power to determine, from time to time, whether and to what extent and at what times and places and under what conditions and regulations any accounts and books of the Corporation, or any of them, shall be open to the inspection of the Stockholders.

 

8.       Notwithstanding any provision of law requiring a greater proportion than a majority of the votes of all classes or of any class of stock entitled to be cast, to take or authorize any action, the Corporation may take or authorize any such action upon the concurrence of a majority of the aggregate number of the votes entitled to be cast thereon.

 

9.       The Corporation reserves the right from time to time to make any amendment of its Charter now or hereafter authorized by law, including any amendment which alters the contract rights, as expressly set forth in its Charter, of any outstanding capital stock, except that no action affecting the validity or assessibility of such Shares shall be taken without the unanimous approval of the outstanding shares of Capital Stock.

 

10.       In addition to the powers and authority conferred upon them by the Charter of the Corporation or By-Laws, the Board of Directors may exercise all such powers and authority and do all such acts and things as may be exercised or done by the Corporation, subject, nevertheless, to the provisions of applicable state law and the Charter and By-Laws of the Corporation.

11.       The Board of Directors is expressly authorized to determine in accordance with generally accepted accounting principles and practices what constitutes net profits, earning, surplus or net assets in excess of capital, and to determine what accounting periods shall be used by the Corporation for any purpose, whether annual or any other period, including daily; to set apart out of any funds of the Corporation such reserves for such purposes as it shall determine and to abolish the same; to declare and pay dividends and distributions in cash, securities or other property from surplus or any funds legally available therefor, at such intervals (which may be as frequently as daily) or on such other periodic basis, as it shall determine; to declare such dividends or distributions by means of a formula or other method of determination, at meeting held less frequently than the frequency of the effectiveness of such declarations; to establish payment dates for dividends or any other distributions on any basis, including dates occurring less frequently than the effectiveness of declarations thereof; and to provide for the payment of declared dividends on a date earlier or later than the specified payment date in the case of Stockholders redeeming their entire ownership of Shares.

 

TENTH: The Corporation acknowledges that it is adopting its corporate name through permission of Federated Investors, Inc., a Pennsylvania corporation, and agrees that Federated Investors, Inc. reserves to itself and any successor to its business the right to withdraw from the Corporation the name “Federated” and reserves to itself and any successor to its business the right to grant the non-exclusive right to use the name “Federated” or any similar name to any other investment company or business enterprise.

 

ELEVENTH: In addition to the powers and authority conferred upon them by the Charter of the Corporation or by law, the Board of directors may exercise all such powers and authority and do all such acts and things as may be exercised or done by the Corporation, subject, nevertheless, to the provisions of applicable state law and the Charter and By-Laws of the Corporation.

 

TWELFTH: The duration of the Corporation shall be perpetual.

 

SECOND:       The restatement of the Charter was approved by a majority of the entire Board of Directors.

 

THIRD:       The provisions set forth in these Articles of Restatement are all the provisions of the Charter currently in effect. The current address of the principal office of the Corporation, the name and address of the Corporation’s current resident agent and the number of directors of the Corporation and the names of those currently in office are as stated above.

 

FOURTH:       The Charter is not amended by these Articles of Restatement.

 

IN WITNESS WHEREOF, Liberty Municipal Securities Fund, Inc. has caused these Articles of Restatement to be signed in its name and on its behalf by its President and attested by its Assistant Secretary on April 30, 1993. The undersigned President acknowledges these Articles of Restatement to be the corporate act of the Corporation and states to the best of his knowledge, information and belief that the matters and facts set forth herein with respect to authorization and approval are true in all material respects and that this statement is made under the penalties of perjury.

 

WITNESS: LIBERTY MUNICIPAL SECURITIES FUND, INC.

 

/s/ Charles H. Field By:  /s/ Richard B. Fisher
 
 

 

 

LIBERTY MUNICIPAL SECURITIES FUND, INC.

 

ARTICLES SUPPLEMENTARY

 

 

 

LIBERTY MUNICIPAL SECURITIES FUND, INC., a Maryland corporation having its principal offices in Baltimore, Maryland (hereinafter called the “Corporation”), hereby certifies:

 

FIRST: The Board of Directors hereby reclassifies 250,000,000 of the authorized but unissued shares of common stock of the Corporation as 250,000,000 shares of Select Shares.

 

SECOND: The shares of Common Stock reclassified hereby shall have the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption as set forth in Article FIFTH, paragraph (b) of the Corporation’s charter and shall be subject to all provisions of the charter relating to stock of the Corporation generally.

 

THIRD: The stock has been reclassified by the Board of Directors under the authority contained in the charter of the Corporation.

 

IN WITNESS WHEREOF, Liberty Municipal Securities Fund, Inc. has caused these presents to be signed in its name and on its behalf by its President and witnessed by its Assistant Secretary on November 30, 1993.

 

The undersigned, J. Christopher Donahue, President of the Corporation, hereby acknowledges in the name and on behalf of the Corporation the foregoing Articles Supplementary to be its corporate act and further certifies to the best of his knowledge, information and belief, that the matters and facts set forth herein with respect to the authorization and approval hereof are true in all material respects and that this statement is made under the penalties of perjury.

 

ATTEST: LIBERTY MUNICIPAL SECURITIES FUND, INC.

 

 

 

/s/ S. Elliott Cohan By:  /s/ J. Christopher Donahue
S. Elliott Cohan J. Christopher Donahue
Assistant Secretary President
 
 

 

 

LIBERTY MUNICIPAL SECURITIES FUND, INC.

 

ARTICLES SUPPLEMENTARY

 

 

 

LIBERTY MUNICIPAL SECURITIES FUND, INC., a Maryland corporation having its principal offices in Baltimore, Maryland (hereinafter called the “Corporation”), hereby certifies:

 

FIRST: The Board of Directors hereby reclassifies 550,970 of the authorized shares of Select Shares of the Corporation as 550,970 shares of Class B Shares.

 

SECOND: The shares of Common Stock reclassified hereby shall have the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption as set forth in Article FIFTH, paragraph (b) of the Corporation’s charter and shall be subject to all provisions of the charter relating to stock of the Corporation generally.

 

THIRD: The stock has been reclassified by the Board of Directors under the authority contained in the charter of the Corporation.

 

IN WITNESS WHEREOF, Liberty Municipal Securities Fund, Inc. has caused these presents to be signed in its name and on its behalf by its President and witnessed by its Assistant Secretary on August 1, 1994.

 

The undersigned, J. Christopher Donahue, President of the Corporation, hereby acknowledges in the name and on behalf of the Corporation the foregoing Articles Supplementary to be its corporate act and further certifies to the best of his knowledge, information and belief, that the matters and facts set forth herein with respect to the authorization and approval hereof are true in all material respects and that this statement is made under the penalties of perjury.

 

ATTEST: LIBERTY MUNICIPAL SECURITIES FUND, INC.

 

 

 

/s/ Charles H. Field By:/s/ J. Christopher Donahue
Charles H. Field J. Christopher Donahue
Assistant Secretary President
 
 

 

 

LIBERTY MUNICIPAL SECURITIES FUND, INC.

 

ARTICLES SUPPLEMENTARY

 

 

 

LIBERTY MUNICIPAL SECURITIES FUND, INC., a Maryland corporation having its principal offices in Baltimore, Maryland (hereinafter called the “Corporation”), hereby certifies:

 

FIRST: The Board of Directors hereby reclassifies 249,449,030 of the authorized but unissued shares of Select Shares of the Corporation as 249,449,030 shares of Class B Shares.

 

SECOND: The shares of Common Stock reclassified hereby shall have the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption as set forth in Article FIFTH, paragraph (b) of the Corporation’s charter and shall be subject to all provisions of the charter relating to stock of the Corporation generally.

 

THIRD: The stock has been reclassified by the Board of Directors under the authority contained in the charter of the Corporation.

 

IN WITNESS WHEREOF, Liberty Municipal Securities Fund, Inc. has caused these presents to be signed in its name and on its behalf by its President and witnessed by its Assistant Secretary on June 15, 1994.

 

The undersigned, J. Christopher Donahue, President of the Corporation, hereby acknowledges in the name and on behalf of the Corporation the foregoing Articles Supplementary to be its corporate act and further certifies to the best of his knowledge, information and belief, that the matters and facts set forth herein with respect to the authorization and approval hereof are true in all material respects and that this statement is made under the penalties of perjury.

 

ATTEST: LIBERTY MUNICIPAL SECURITIES FUND, INC.

 

 

 

/s/ Charles H. Field By:/s/ J. Christopher Donahue
Charles H. Field J. Christopher Donahue
Assistant Secretary President
 
 

 

 

LIBERTY MUNICIPAL SECURITIES FUND, INC.

 

ARTICLES OF AMENDMENT

 

LIBERTY MUNICIPAL SECURITIES FUND, INC., a Maryland corporation having post office addresses in the City of Pittsburgh, Pennsylvania and the City of Baltimore, Maryland (hereinafter called the "Corporation"), hereby certifies to the State Department of Assessments and Taxation of Maryland that:

 

FIRST: The Articles of Incorporation of the Corporation are hereby amended by striking Article SECOND and inserting the following in its place:

 

"FIRST: The name of the Corporation is Federated Municipal Securities Fund, Inc."

 

SECOND: The Board of Directors, in accordance with the authority granted under subparagraph (b) of paragraph FIFTH of the Corporation’s Articles of Restatement, dated April 30, 1993, hereby redesignates the classes of authorized shares of common stock of the Corporation as:

 

Federated Municipal Securities Fund, Inc. Class A Shares

Federated Municipal Securities Fund, Inc. Class B Shares

Federated Municipal Securities Fund, Inc. Class C Shares

 

THIRD: The foregoing amendment to the charter of the Corporation was approved by a majority of the entire Board of Directors of the Corporation; the charter amendment is limited to a change expressly permitted by Section 2-605 of the Maryland General Corporation Law to be made without action by stockholders; and the Corporation is registered as an open-end company under the Investment Company Act of 1940, as amended.

 

FOURTH: These Articles of Amendment will become effective immediately upon filing with the State Department of Assessments and Taxation of Maryland.

 

IN WITNESS WHEREOF, Liberty Municipal Securities Fund, Inc. has caused these presents to be signed in its name and on its behalf by its Secretary and witnessed by its Assistant Secretary on March 29, 1996.

 

 
 

The undersigned, John W. McGonigle, Executive Vice President and Secretary of the Corporation, hereby acknowledges in the name and on behalf of the Corporation the foregoing Articles of Amendment to be its corporate act and further certifies to the best of his knowledge, information and belief, that the matters and facts set forth herein with respect to the authorization and approval hereof are true in all material respects and that this statement is made under the penalties of perjury.

 

  LIBERTY MUNICIPAL
ATTEST SECURITIES FUND, INC.

 

 

 

/s/ Charles H. Field /s/ John W. McGonigle
Charles H. Field John W. McGonigle
Assistant Secretary Executive Vice President and Secretary

 

 

 
 

 

 

ARTICLES SUPPLEMENTARY

 

OF

 

FEDERATED MUNICIPAL SECURITIES FUND, INC.

 

FEDERATED MUNICIPAL SECURITIES FUND, INC., a Maryland corporation having its principal office in the State of Maryland in Baltimore, Maryland (hereinafter called the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland that:

 

FIRST: The Board of Directors has classified and reclassified all of the authorized but unissued shares of common stock of the Corporation such that the authorized shares are classified into separate classes of common stock, as follows:

 

CLASSES       SHARES

 

Federated Municipal Securities Fund, Inc. Class A Shares 375,000,000
Federated Municipal Securities Fund, Inc. Class B Shares 250,000,000
Federated Municipal Securities Fund, Inc. Class C Shares 375,000,000
Aggregate Authorized Shares 1,000,000,000

 

SECOND: The shares of common stock so classified and reclassified shall have the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption as set forth in Article FIFTH, paragraph (b) of the Corporation’s charter and as set forth below, and shall be subject to all provisions of the charter relating to stock of the Corporation generally.

 

At such times as may be determined by the Board of Directors (or with the authorization of the Board of Directors, by the Officers of the Corporation) in accordance with the Investment Company Act of 1940, as amended, applicable rules and regulations thereunder, and applicable rules and regulations of the National Association of Securities Dealers, Inc., and reflected in the pertinent registration statement of the Corporation, Federated Municipal Securities Fund, Inc., Class B Shares may be automatically converted into Federated Municipal Securities fund, Inc., Class A Shares based on the relative net asset values of such classes at the time of the conversion, subject, however, to any conditions of conversion that may be imposed by the Board of Directors (or with the authorization of the Board of Directors, by the Officers of the Corporation) and reflected in the pertinent registration statement of the Corporation as aforesaid.

 

THIRD: The stock has been classified and reclassified by the Board of Directors under the authority contained in the charter of the Corporation.

 

IN WITNESS WHEREOF, the Corporation has caused these presents to be signed in its name and on its behalf by its President and witnessed by its Assistant Secretary on November 15, 1996.

 

The undersigned, J. Christopher Donahue, President of the Corporation, hereby acknowledges in the name and on behalf of the Corporation the foregoing Articles Supplementary to be its corporate act and further certifies to the best of his knowledge, information and belief, that the matters and facts set forth herein with respect to the authorization and approval hereof are true in all material respects and that this statement is made under the penalties of perjury.

 

ATTEST: FEDERATED MUNICIPAL SECURITIES FUND, INC.

 

 

/s/ S. Elliott Cohan By:  /s/ J. Christopher Donahue
S. Elliott Cohan J. Christopher Donahue
Assistant Secretary President

 

 

 
 

 

 

FEDERATED MUNICIPAL SECURITIES FUND, INC.

 

CERTIFICATE OF CORRECTION

 

Federated Municipal Securities Fund, Inc., a Maryland corporation (the “Corporation”), hereby certifies that:

 

FIRST:       The title of the document being corrected is “Articles of

Amendment”.

 

SECOND:       The only party to the document being corrected is Federated Municipal Securities Fund, Inc. (formerly Liberty Municipal Securities Fund, Inc.).

 

THIRD:       The Articles of Amendment were filed on May 3, 1993.

 

FOURTH:       The provisions of the Articles of Amendment which are to be corrected are set forth in Exhibit A attached hereto.

 

FIFTH:       The corrected provisions of the Articles of Amendment are set forth in Exhibit B attached hereto.

 

IN WITNESS WHEREOF, the Corporation has caused these presents to be signed in its name and on its behalf by its Executive Vice President and attested to by its Assistant Secretary on this 28th day of February, 1997.

 

The undersigned Executive Vice President acknowledges this Certificate of Correction to be the corporate act of the Corporation and as to all matters or facts required to be verified under oath, the undersigned Executive Vice President acknowledges that to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.

 

FEDERATED MUNICIPAL
SECURITIES FUND, INC.
 
By:/s/ J. Christopher Donahue
J. Christopher Donahue
Executive Vice President

 

WITNESSED:

 

/s/ S. Elliott Cohan

S. Elliott Cohan

Assistant Secretary

 
 

 

Exhibit A

 

ARTICLES OF AMENDMENT

OF

LIBERTY MUNICIPAL SECURITIES FUND, INC.

 

Liberty Municipal Securities Fund, Inc., a Maryland Corporation (the “Corporation”), having its principal office in Baltimore, Maryland, hereby certifies to the State Department of Assessments and Taxation that:

 

FIRST:       The Charter of the Corporation is hereby amended by deleting Article FIFTH of the Charter and substituting in lieu thereof the following:

 

FIFTH: (a) The Corporation is authorized to issue 1,000,000,000 shares of common stock, par value $.01 per share. The aggregate par value of all shares which the Corporation is authorized to issue is $10,000,000. Subject to the following paragraph, the authorized shares are classified as separate classes of common stock, with 375,000,000 classified into each of Class A and Class C shares, and 250,000,000 unclassified shares.

 

(b) The Board of Directors is authorized to classify or to reclassify (i.e., into series and classes of series), from time to time, any unissued shares of stock of the Corporation, whether now or hereafter authorized, by setting, changing or eliminating the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications or terms or conditions of or rights to require redemption of the stock.

 

Unless otherwise provided by the Board of Directors prior to the issuance of the stock, the shares of each class or series of stock shall be subject to the following:

 

(i) The Board of Directors may redesignate a class or series of stock whether or not shares of such class or series are issued and outstanding, provided that such redesignation does not affect the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications or terms or conditions of redemption of such class or series of stock.

 

(ii) The assets attributable to each class or series may be invested in a common investment portfolio. The assets and liabilities and the income and expenses of each class or series of the Corporation’s stock shall be determined separately and, accordingly, the net asset value of shares of the Corporation’s stock may vary among classes or series. The income or gain and the expenses or liabilities of the Corporation shall be allocated to each class or series of stock as determined by or under the direction of the Board of Directors.

 

(iii) Shares of each class or series of stock shall be entitled to such dividends or distributions, in stock or in cash or both, as may be declared from time to time by the Board of Directors with respect to such class or series. Dividends or distributions shall be paid on shares of a class or series of stock only out of the assets belonging to that class or series.

 

(iv) In the event of the liquidation or dissolution of the Corporation, the stockholders of a class or series of the Corporation’s stock shall be entitled to receive, as a class or series, out of the assets of the Corporation available for distribution to stockholders, the assets belonging to that class or series less the liabilities allocated to that class or series. The assets so distributable to the stockholders of a class or series shall be distributed among such stockholders in proportion to the number of shares of that class or series held by them and recorded on the books of the Corporation. In the event that there are any assets available for distribution that are not attributable to any particular class or series of stock, such assets shall be allocated to all classes and series in proportion to the net asset value of the respective classes or series.

 

(v) All holders of shares of stock shall vote as a single class or series except with respect to any matter which affects only one or more classes or series of stock, in which case only the holders of shares of the classes or series affected shall be entitled to vote.

 

(c) The Corporation may issue fractional shares. Any fractional share shall carry proportionately all the rights of a whole share, excepting any right to receive a certificate evidencing such fractional share, but including, without limitation, the right to vote and the right to receive dividends.

 

SECOND:       The amendment was advised by the Board of Directors and approved by the shareholders.

 

IN WITNESS WHEREOF, Liberty Municipal Securities Fund, Inc. has caused these Articles of Amendment to be signed in its name and on its behalf by its Vice President and attested by its Assistant Secretary on April 30, 1993. The undersigned Vice President acknowledges these Articles of Amendment to be the corporate act of the Corporation and states to the best of his knowledge, information and belief that the matters and facts set forth herein with respect to authorization and approval are true in all material respects and that this statement is made under the penalties of perjury.

 
 

Exhibit B

 

 

ARTICLES OF AMENDMENT

 

ARTICLES SUPPLEMENTARY

 

Liberty Municipal Securities Fund, Inc., a Maryland Corporation (the “Corporation”), having its principal office in Baltimore, Maryland, hereby certifies to the State Department of Assessments and Taxation that:

 

FIRST A: The Charter of the Corporation is hereby amended by deleting Article FIFTH of the Charter and substituting in lieu thereof the following:

 

FIFTH: (a) The Corporation is authorized to issue 1,000,000,000 shares of common stock, par value $.01 per share. The aggregate par value of all shares which the Corporation is authorized to issue is $10,000,000.

 

(b) The Board of Directors is authorized to classify or to reclassify (i.e., into series and classes of series), from time to time, any unissued shares of stock of the Corporation, whether now or hereafter authorized, by setting, changing or eliminating the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications or terms or conditions of or rights to require redemption of the stock.

 

Unless otherwise provided by the Board of Directors prior to the issuance of the stock, the shares of each class or series of stock shall be subject to the following:

 

(i) The Board of Directors may redesignate a class or series of stock whether or not shares of such class or series are issued and outstanding, provided that such redesignation does not affect the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications or terms or conditions of redemption of such class or series of stock.

 

(ii) The assets attributable to each class or series may be invested in a common investment portfolio. The assets and liabilities and the income and expenses of each class or series of the Corporation’s stock shall be determined separately and, accordingly, the net asset value of shares of the Corporation’s stock may vary among classes or series. The income or gain and the expenses or liabilities of the Corporation shall be allocated to each class or series of stock as determined by or under the direction of the Board of Directors.

 

(iii) Shares of each class or series of stock shall be entitled to such dividends or distributions, in stock or in cash or both, as may be declared from time to time by the Board of Directors with respect to such class or series. Dividends or distributions shall be paid on shares of a class or series of stock only out of the assets belonging to that class or series.

 

(iv) In the event of the liquidation or dissolution of the Corporation, the stockholders of a class or series of the Corporation’s stock shall be entitled to receive, as a class or series, out of the assets of the Corporation available for distribution to stockholders, the assets belonging to that class or series less the liabilities allocated to that class or series. The assets so distributable to the stockholders of a class or series shall be distributed among such stockholders in proportion to the number of shares of that class or series held by them and recorded on the books of the Corporation. In the event that there are any assets available for distribution that are not attributable to any particular class or series of stock, such assets shall be allocated to all classes and series in proportion to the net asset value of the respective classes or series.

 

(v) All holders of shares of stock shall vote as a single class or series except with respect to any matter which affects only one or more classes or series of stock, in which case only the holders of shares of the classes or series affected shall be entitled to vote.

 

(c) The Corporation may issue fractional shares. Any fractional share shall carry proportionately all the rights of a whole share, excepting any right to receive a certificate evidencing such fractional share, but including, without limitation, the right to vote and the right to receive dividends.

 

 

FIRST B: The Board of Directors hereby classifies and reclassifies all of the authorized but unissued shares of common stock of the Corporation so that the Corporation has 375,000,000 shares of common stock without further designation, 375,000,000 Class C Shares, and 250,000,000 unclassified shares. The shares of common stock classified and reclassified hereby shall be subject to all provisions of the charter relating to stock of the Corporation generally and shall have the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption as set forth in Article FIFTH, paragraph (b) of the Corporation’s charter.

 

SECOND:       The charter amendment in Article FIRST A was advised by the Board of Directors and approved by the shareholders. The stock classified and reclassified in Article FIRST B has been classified and reclassified by the Board of Directors under the authority contained in the charter of the Corporation as herein amended.

 

IN WITNESS WHEREOF, Liberty Municipal Securities Fund, Inc. has caused these Articles of Amendment - Articles Supplementary to be signed in its name and on its behalf by its Vice President and attested by its Assistant Secretary on April 30, 1993. The undersigned Vice President acknowledges these Articles of Amendment - Articles Supplementary to be the corporate act of the Corporation and states to the best of his knowledge, information and belief that the matters and facts set forth herein with respect to authorization and approval are true in all material respects and that this statement is made under the penalties of perjury.

 
 

 

 

FEDERATED MUNICIPAL SECURITIES FUND, INC.

 

CERTIFICATE OF CORRECTION

 

Federated Municipal Securities Fund, Inc., a Maryland corporation (the “Corporation”), hereby certifies that:

 

FIRST:       The title of the document being corrected is “Articles of

Restatement”.

 

SECOND:       The only party to the document being corrected is Federated Municipal Securities Fund, Inc. (formerly Liberty Municipal Securities Fund, Inc.).

 

THIRD:       The Articles of Restatement were filed on May 4, 1993.

 

FOURTH:       The provisions of the Articles of Restatement which are to be corrected are set forth in Exhibit A attached hereto.

 

FIFTH:       The corrected provisions of the Articles of Restatement are set forth in Exhibit B attached hereto.

 

IN WITNESS WHEREOF, the Corporation has caused these presents to be signed in its name and on its behalf by its Executive Vice President and attested to by its Assistant Secretary on this 28th day of February, 1997.

 

The undersigned Executive Vice President acknowledges this Certificate of Correction to be the corporate act of the Corporation and as to all matters or facts required to be verified under oath, the undersigned Executive Vice President acknowledges that to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.

 

  FEDERATED MUNICIPAL
  SECURITIES FUND, INC.
   
  By:/s/ J. Christopher Donahue
  J. Christopher Donahue
  Executive Vice President

WITNESSED:

 

/s/ S. Elliott Cohan

S. Elliott Cohan

Assistant Secretary

 
 

Exhibit A

 

ARTICLES OF RESTATEMENT

OF

LIBERTY MUNICIPAL SECURITIES FUND, INC.

 

 

Liberty Municipal Securities Fund, Inc., a Maryland corporation (the “Corporation”), having its principal office in Baltimore, Maryland, hereby certifies to the State Department of Assessments and Taxation that:

 

FIRST:       The Corporation desires to restate its Charter as currently in effect. The Charter as restated is as follows:

 

FIRST: The undersigned, John W. McGonigle, whose post office address is 421 Seventh Avenue, Pittsburgh, Pennsylvania, 15219, being at least twenty-one years of age, does under and by virtue of the General Laws of the State of Maryland authorizing the formation of corporations, hereby form a corporation.

 

SECOND: The name of the Corporation is Liberty Municipal Securities Fund, Inc.

 

THIRD: The purpose for which the corporation is formed is to act as an open-end investment company of the management type registered as such with the Securities and Exchange Commission pursuant to the Investment Company Act of 1940 and to exercise and generally to enjoy all of the powers, rights and privileges granted to, or conferred upon, corporations by the General Laws of the State of Maryland now or hereafter in force.

 

FOURTH: The post office address of the principal office and the office of the resident agent of the Corporation in the State of Maryland is 32 South Street, Baltimore, Maryland 21202. The resident agent of the Corporation in the state of Maryland is THE CORPORATION TRUST INCORPORATED, which is a corporation organized and existing under the laws of the State of Maryland.

 

FIFTH: (a) The Corporation is authorized to issue 1,000,000,000 shares of common stock, par value $.01 per share. The aggregate par value of all shares which the Corporation is authorized to issue is $10,000,000. Subject to the following paragraph, the authorized shares are classified as separate classes of common stock, with 375,000,000 classified into each of Class A and Class C shares, and 250,000,000 unclassified shares.

 

(b)       The Board of Directors is authorized to classify or to reclassify (i.e., into series and classes of series), from time to time, any unissued shares of stock of the Corporation, whether now or hereafter authorized, by setting, changing or eliminating the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications or terms or conditions of or rights to require redemption of the stock.

Unless otherwise provided the Board of Directors prior to the issuance of the stock, the shares of each class or series of stock shall be subject to the following:

 

(i)       The Board of Directors may redesignate a class or series of stock whether or not shares of such class or series are issued and outstanding, provided that such redesignation does not affect the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications or terms or conditions of redemption of such class or series of stock.

 

(ii)       The assets attributable to each class or series may be invested in a common investment portfolio. The assets and liabilities and the income and expenses of each class or series of the Corporation’s stock shall be determined separately and, accordingly, the net asset value of shares of the Corporation’s stock may vary among classes or series. The income or gain and the expenses or liabilities of the Corporation shall be allocated to each class or series of stock as determined by or under the direction of the Board of Directors.

 

(iii)       Shares of each class or series of stock shall be entitled to such dividends or distributions, in stock or in cash or both, as may be declared from time to time by the Board of Directors with respect to such class or series. Dividends or distributions shall be paid on shares of a class or series of stock only out of the assets belonging to that class or series.

 

(iv)       In the event of the liquidation or dissolution of the Corporation, the stockholders of a class or series of the Corporation’s stock shall be entitled to receive, as a class or series, out of the assets of the Corporation available for distribution to stockholders, the assets belonging to that class or series less the liabilities allocated to that class or series. The assets so distributable to the stockholders of a class or series shall be distributed among such stockholders in proportion to the number of shares of that class or series held by them and recorded on the books of the Corporation. In the event that there are any assets available for distribution that are not attributable to any particular class or series of stock, such assets shall be allocated to all classes and series in proportion to the net asset value of the respective classes or series.

 

(v)       All holders of shares of stock shall vote as a single class or series except with respect to any matter which affects only one or more classes or series of stock, in which case only the holders of shares of the classes or series affected shall be entitled to vote.

 

(c)       The Corporation may issue fractional shares. Any fractional share shall carry proportionately all the rights of a whole share, excepting any right to receive a certificate evidencing such fractional shares, but including, without limitation, the right to vote and the right to receive dividends.

 

SIXTH: (a) The number of Directors of the Corporation shall be eleven, or such other number as may be from time to time fixed in the manner provided by the By-Laws of the Corporation but shall never be less than three (3).

 

(b)       The names of the Directors who are currently in office are:

 

John F. Donahue Edward L. Flaherty, Jr.
John T. Conroy, Jr. Peter E. Madden
William J. Copeland Gregor F. Meyer
J. Christopher Donahue Wesley W. Posvar
James E. Dowd Marjorie P. Smuts
Lawrence D. Ellis, M.D.  

 

 

SEVENTH: The Board of Directors is empowered to authorize the issuance from time to time of shares of Capital Stock of the Corporation, whether now or hereafter authorized; provided, however, that the consideration per share to be received by the Corporation upon the issuance or sale of any shares of its Capital Stock shall be the net asset value per share determined in accordance with the requirements of the Investment Company Act of 1940 and the applicable rules and regulations of the Securities and Exchange Commission (or any succeeding governmental authority) and in conformity with generally accepted accounting practices and principles.

 

EIGHTH: (a) To the extent the Corporation has funds or property legally available therefor, each stockholder of the Corporation shall have the right at such times as may be permitted by the Corporation, but no less frequently than once each week, to require the Corporation to redeem all or any part of its Shares at a redemption price equal to the net asset value per share of the Capital Stock next determined after the shares are tendered for redemption; said determination of the net asset value per share to be made in accordance with the requirements of the Investment Company Act of 1940 and the applicable rules and regulations of the Securities and Exchange Commission (or any succeeding governmental authority) and in conformity with generally accepted accounting practices and principles.

 

Notwithstanding the foregoing, the Corporation may postpone payment or deposit of the redemption price and may suspend the right of the holders of Capital Stock to require the Corporation to redeem shares of such Capital Stock during any period when (i) the New York Stock Exchange is closed for other than weekends and holidays; (ii) the Securities and Exchange Commission has by order permitted such suspension; (iii) an emergency as defined by rules of the Securities and Exchange Commission exists, making disposal of portfolio securities or valuation of net assets of the Corporation not reasonably practicable; or (iv) trading on the New York Stock Exchange is restricted under the conditions set forth in the rules and regulations of the Securities and Exchange Commission.

 

(b)       The Corporation shall have the right, exercisable at the discretion of the Board of Directors, to redeem shares of any Stockholder for their current net asset value per Ssare if at such time the Stockholder owns sares having an aggregate net asset value of less than $1,000.00.

 

(c)       Each share of Capital Stock is subject to redemption by the Corporation at the redemption price computed in the manner set forth in subparagraph (a) of Article EIGHTH of these Articles of Incorporation at any time if the Board of Directors, in its sole discretion, determines that failure to so redeem may result in the Corporation being classified as a personal holding company as defined in the Internal Revenue Code.

 

(d)       Transfer of Capital Stock will be recorded on the stock transfer records of the Corporation at the request of the holders thereof at any time during normal business hours of the Corporation unless the Board of Directors of the Corporation determines, in its sole discretion, that allowing such transfer may result in the Corporation being classified as a personal holding company as defined in the Internal Revenue Code.

 

NINTH: The following provisions are hereby adopted for the purpose of defining, limiting, and regulating the powers of the Corporation and of the Directors and Stockholders:

 

(1)       No Stockholder of the Corporation shall have any pre-emptive or preferential right of subscription to any shares of any class of the stock of the Corporation whether now or hereafter authorized. The Board of Directors may issue shares of the Capital Stock of the Corporation without offering the same either in whole or in part to the Stockholders.

 

(2)       Capital Stock of the Corporation may be purchased, held and disposed of by the Officers and Directors of the Corporation, by partnerships of which any such Officer or Director may be a member and by corporations of which any Officer or Director of the Corporation may be an officer or director. Except as above set forth, or authorized by the Securities and Exchange Commission, the Officers and Directors of the Corporation and partnerships or corporations which are affiliates of the Officers or Directors may not deal with the Corporation as principals in the purchase or sale of any securities or other property.

 

(3)       The Corporation may enter into exclusive or non-exclusive underwriting contracts or contracts for the sale of its shares and may also enter into contracts for investment advisory, management and administrative services. The terms and conditions, methods of authorization, renewal, amendment and termination of the aforesaid contracts shall be as determined at the discretion of the Board of Directors; subject, however, to the provisions of the Charter of the Corporation, the By-Laws of the Corporation, applicable state law, and the Investment Company Act of 1940 and the rules and regulations of the Securities and Exchange Commission.

 

(4)       Except as otherwise provided by law or by the Charter of the Corporation, no contract or other transaction between the Corporation and any person, partnership or corporation and no act of the Corporation shall in any way be affected or invalidated by the fact that any Officer or Director of the Corportaion is pecuniarily or otherwise interested therein or is such person or a member, officer or director of such partnership or other corporation, provided that the fact of such interest shall be known to the Board of Directors of the Corporation. Specifically, but without limitation of the foregoing, the Corporation may:

 

(a)       Enter into a written underwriting contract, management contract or contracts for research and advisory services with Federated Research Corp., or its parent, affiliates or subsidiaries thereof, or their respective successors, or otherwise do business with such corporation, notwithstanding the fact that one or more of the Directors of the Corporation and some or all of its Officers are, have been, or may become Directors, Officers, Employees or Stockholders of Federated Research Corp. or its parent, affiliates or subsidiaries or successors, and in the absence of actual fraud the Corporation may deal freely with Federated Research Corp. or its parent, affiliates, subsidiaries or successors, and neither such underwriting contract, management contract or contract for research and advisory services nor any other contract or transaction between the Corporation and Federated Research Corp. or its parent, affiliates, subsidiaries or successors shall be invalidated or in any way affected thereby, nor shall any Director or Officer of the Corporation be liable to the Corporation or to any Stockholder or creditor of the Corporation or to any other person for any loss incurred under or by reason of any such contract or transaction. Anything in the foregoing notwithstanding, no officer or director or underwriter or investment adviser of the Corporation shall be protected against any liability to the Corporation or to its security holders to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office.

 

(5)       No Officer or Director of the Corporation or of any investment advisory company or management company, nor the Corporation itself, nor such investment advisory or management company or underwriter of the Corporation shall take long or short positions in respect of any shares issued by the Corporation; provided, however, that such prohibition shall not prevent:

 

(a)       Any underwriter from purchasing from the Corporation shares of capital stock issued by the Corporation, provided that orders to purchase from the Corporation are entered with the Corporation by such underwriter either for investment or upon receipt by it of purchase orders for shares of stock of the Corporation, and provided such purchases are not in excess of purchase orders received by such underwriter;

 

(b)       The Corporation or any distributor or underwriter from maintaining a market for shares of capital stock isued by the Corporation;

 

(c)       The purchase from the Corporation of shares of capital stock of the Corporation by the Officers or Directors of the Corporation or of any investment advisory, management company or underwriter or distributor of the Corporation at the prices available to the public or authorized by the Securities and Exchange Commission at the moment of such purchase.

 

6.       The Corporation shall indemnify its officers, directors, employees and agents and any person who serves at the request of the Corporation as a Director, Officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise to the extent permitted by Maryland law as amended from time to time, provided, however, that no officer or director shall be protected against any liability to the Corporation or its stockholders to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office.

 

7.       The Board of Directors shall, subject to the laws of Maryland, have power to determine, from time to time, whether and to what extent and at what times and places and under what conditions and regulations any accounts and books of the Corporation, or any of them, shall be open to the inspection of Stockholders.

 

8.       Notwithstanding any provision of law requiring a greater proportion than a majority of the votes of all classes of stock entitled to be cast, to take or authorize any action, the Corporation may take or authorize any such action upon the concurrence of a majority of the aggregate number of the votes entitled to be cast thereon.

 

9.       The Corporation reserves the right from time to time to make any amendment of its Charter now or hereafter authorized by law, including any amendment which alters the contract rights, as expressly set forth in its Charter, of any outstanding capital stock, except that no action affecting the validity or assessibility of such shares shall be taken without the unanimous approval of the outstanding shares of Capital Stock.

 

10.       In addition to the powers and authority conferred upon them by the Charter of the Corporation or by law, the Board of Directors may exercise all such powers and authority and do all such acts and things as may be exercised or done by the Corporation, subject, nevertheless, to the provisions of applicable state law and the Charter and By-Laws of the Corporation.

 

11.       The Board of Directors is expressly authorized to determine in accordance with generally accepted accounting principles and practices what constitutes net profits, earnings, surplus or net assets in excess of capital, and to determine what accounting periods shall be used by the Corporation for any purpose, whether annual or any other period, including daily; to set apart out of any funds of the Corporation such reserves for such purposes as it shall determine and to abolish the same; to declare and pay dividends and distributions in cash, securities or other property from surplus or any funds legally available therefor, at such intervals (which may be as frequently as daily) or on such other periodic basis, as it shall determine; to declare such dividends or distributions by means of a formula or other method of determination, at meetings held less frequently than the frequency of the effectiveness of such declarations; to establish payment dates for dividends or any other distributions on any basis, including dates occurring less frequently than the effectiveness of declarations thereof; and to provide for the payment of declared dividends on a date earlier or later than the specified payment date in the case of Stockholders of the Corporation redeeming their entire ownership of shares of the Corporation.

 

TENTH: The Corporation acknowledges that is adopting its corporate name through permission of Federated Investors, Inc., a Pennsylvania corporation, and agrees that Federated Investors, Inc. reserves to itself and any successor to its business the right to withdraw from the Corporation the name “Federated” and reserves to itself and any successor to it business the right to grand the non-exclusive right to use the name “Federated” or any similar name to any other investment company business enterprise.

 

ELEVENTH: In addition to the powers and authority conferred upon them by the Charter of the Corporation or by law, the Board of Directors may exercise all such powers and authority and do all such acts and things as may be exercised or done by the Corporation, subject, nevertheless, to the provisions of applicable state law and the charter and By-Laws of the Corporation.

 

TWELFTH: The duration of the Corporation shall be perpetual.

 

SECOND:       The restatement of the Charter was approved by a majority of the entire Board of Directors.

 

THIRD:       The provisions set forth in these Articles of Restatement are all the provisions of the Charter currently in effect. The current address of the principal office of the Corporation, the name and address of the Corporation’s current resident agent and the number of directors of the Corporation and the names of those currently in office are as stated above.

 

FOURTH:       The Charter is not amended by these Articles of Restatement.

 

IN WITNESS WHEREOF, Liberty Municipal Securities Fund, Inc. has caused these Articles of Restatement to be signed in is name and on its behalf by its Vice President and attested by its Assistant Secretary on April 30, 1993. The undersigned President acknowledges these Articles of Restatement to be the corporate act of the Corporation and states to the best of his knowledge, information and belief that the mattes and facts set forth herein with respect to authorization and approval are true in all material respects and that this statement is made under the penalties of perjury.

 
 

Exhibit B

 

ARTICLES OF RESTATEMENT

OF

LIBERTY MUNICIPAL SECURITIES FUND, INC.

 

 

Liberty Municipal Securities Fund, Inc., a Maryland corporation (the “Corporation”), having its principal office in Baltimore, Maryland, hereby certifies to the State Department of Assessments and Taxation that:

 

FIRST:       The Corporation desires to restate its Charter as currently in effect. The Charter as restated is as follows:

 

FIRST: The undersigned, John W. McGonigle, whose post office address is 421 Seventh Avenue, Pittsburgh, Pennsylvania, 15219, being at least twenty-one years of age, does under and by virtue of the General Laws of the State of Maryland authorizing the formation of corporations, hereby form a corporation.

 

SECOND: The name of the Corporation is Liberty Municipal Securities Fund, Inc.

 

THIRD: The purpose for which the corporation is formed is to act as an open-end investment company of the management type registered as such with the Securities and Exchange Commission pursuant to the Investment Company Act of 1940 and to exercise and generally to enjoy all of the powers, rights and privileges granted to, or conferred upon, corporations by the General Laws of the State of Maryland now or hereafter in force.

 

FOURTH: The post office address of the principal office and the office of the resident agent of the Corporation in the State of Maryland is 32 South Street, Baltimore, Maryland 21202. The resident agent of the Corporation in the state of Maryland is THE CORPORATION TRUST INCORPORATED, which is a corporation organized and existing under the laws of the State of Maryland.

 

FIFTH: (a) The Corporation is authorized to issue 1,000,000,000 shares of common stock, par value $.01 per share. The aggregate par value of all shares which the Corporation is authorized to issue is $10,000,000. Subject to the following paragraph, the authorized shares are classified as separate classes of common stock, with 375,000,000 classified into shares of common stock without further designation, 375,000,000 Class C Shares, and 250,000,000 unclassified shares.

 

(b)       The Board of Directors is authorized to classify or to reclassify (i.e., into series and classes of series), from time to time, any unissued shares of stock of the Corporation, whether now or hereafter authorized, by setting, changing or eliminating the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications or terms or conditions of or rights to require redemption of the stock.

 

Unless otherwise provided the Board of Directors prior to the issuance of the stock, the shares of each class or series of stock shall be subject to the following:

 

(i)       The Board of Directors may redesignate a class or series of stock whether or not shares of such class or series are issued and outstanding, provided that such redesignation does not affect the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications or terms or conditions of redemption of such class or series of stock.

 

(ii)       The assets attributable to each class or series may be invested in a common investment portfolio. The assets and liabilities and the income and expenses of each class or series of the Corporation’s stock shall be determined separately and, accordingly, the net asset value of shares of the Corporation’s stock may vary among classes or series. The income or gain and the expenses or liabilities of the Corporation shall be allocated to each class or series of stock as determined by or under the direction of the Board of Directors.

 

(iii)       Shares of each class or series of stock shall be entitled to such dividends or distributions, in stock or in cash or both, as may be declared from time to time by the Board of Directors with respect to such class or series. Dividends or distributions shall be paid on shares of a class or series of stock only out of the assets belonging to that class or series.

 

(iv)       In the event of the liquidation or dissolution of the Corporation, the stockholders of a class or series of the Corporation’s stock shall be entitled to receive, as a class or series, out of the assets of the Corporation available for distribution to stockholders, the assets belonging to that class or series less the liabilities allocated to that class or series. The assets so distributable to the stockholders of a class or series shall be distributed among such stockholders in proportion to the number of shares of that class or series held by them and recorded on the books of the Corporation. In the event that there are any assets available for distribution that are not attributable to any particular class or series of stock, such assets shall be allocated to all classes and series in proportion to the net asset value of the respective classes or series.

 

(v)       All holders of shares of stock shall vote as a single class or series except with respect to any matter which affects only one or more classes or series of stock, in which case only the holders of shares of the classes or series affected shall be entitled to vote.

 

(c)       The Corporation may issue fractional shares. Any fractional share shall carry proportionately all the rights of a whole share, excepting any right to receive a certificate evidencing such fractional shares, but including, without limitation, the right to vote and the right to receive dividends.

 

SIXTH: (a) The number of Directors of the Corporation shall be eleven, or such other number as may be from time to time fixed in the manner provided by the By-Laws of the Corporation but shall never be less than three (3).

 

(b)       The names of the Directors who are currently in office are:

 

John F. Donahue Edward L. Flaherty, Jr.
John T. Conroy, Jr. Peter E. Madden
William J. Copeland Gregor F. Meyer
J. Christopher Donahue Wesley W. Posvar
James E. Dowd Marjorie P. Smuts
Lawrence D. Ellis, M.D.  

 

 

SEVENTH: The Board of Directors is empowered to authorize the issuance from time to time of shares of Capital Stock of the Corporation, whether now or hereafter authorized; provided, however, that the consideration per share to be received by the Corporation upon the issuance or sale of any shares of its Capital Stock shall be the net asset value per share determined in accordance with the requirements of the Investment Company Act of 1940 and the applicable rules and regulations of the Securities and Exchange Commission (or any succeeding governmental authority) and in conformity with generally accepted accounting practices and principles.

 

EIGHTH: (a) To the extent the Corporation has funds or property legally available therefor, each stockholder of the Corporation shall have the right at such times as may be permitted by the Corporation, but no less frequently than once each week, to require the Corporation to redeem all or any part of its Shares at a redemption price equal to the net asset value per share of the Capital Stock next determined after the shares are tendered for redemption; said determination of the net asset value per share to be made in accordance with the requirements of the Investment Company Act of 1940 and the applicable rules and regulations of the Securities and Exchange Commission (or any succeeding governmental authority) and in conformity with generally accepted accounting practices and principles.

 

Notwithstanding the foregoing, the Corporation may postpone payment or deposit of the redemption price and may suspend the right of the holders of Capital Stock to require the Corporation to redeem shares of such Capital Stock during any period when (i) the New York Stock Exchange is closed for other than weekends and holidays; (ii) the Securities and Exchange Commission has by order permitted such suspension; (iii) an emergency as defined by rules of the Securities and Exchange Commission exists, making disposal of portfolio securities or valuation of net assets of the Corporation not reasonably practicable; or (iv) trading on the New York Stock Exchange is restricted under the conditions set forth in the rules and regulations of the Securities and Exchange Commission.

 

(b)       The Corporation shall have the right, exercisable at the discretion of the Board of Directors, to redeem shares of any Stockholder for their current net asset value per Ssare if at such time the Stockholder owns sares having an aggregate net asset value of less than $1,000.00.

 

(c)       Each share of Capital Stock is subject to redemption by the Corporation at the redemption price computed in the manner set forth in subparagraph (a) of Article EIGHTH of these Articles of Incorporation at any time if the Board of Directors, in its sole discretion, determines that failure to so redeem may result in the Corporation being classified as a personal holding company as defined in the Internal Revenue Code.

 

(d)       Transfer of Capital Stock will be recorded on the stock transfer records of the Corporation at the request of the holders thereof at any time during normal business hours of the Corporation unless the Board of Directors of the Corporation determines, in its sole discretion, that allowing such transfer may result in the Corporation being classified as a personal holding company as defined in the Internal Revenue Code.

 

NINTH: The following provisions are hereby adopted for the purpose of defining, limiting, and regulating the powers of the Corporation and of the Directors and Stockholders:

 

(1)       No Stockholder of the Corporation shall have any pre-emptive or preferential right of subscription to any shares of any class of the stock of the Corporation whether now or hereafter authorized. The Board of Directors may issue shares of the Capital Stock of the Corporation without offering the same either in whole or in part to the Stockholders.

 

(2)       Capital Stock of the Corporation may be purchased, held and disposed of by the Officers and Directors of the Corporation, by partnerships of which any such Officer or Director may be a member and by corporations of which any Officer or Director of the Corporation may be an officer or director. Except as above set forth, or authorized by the Securities and Exchange Commission, the Officers and Directors of the Corporation and partnerships or corporations which are affiliates of the Officers or Directors may not deal with the Corporation as principals in the purchase or sale of any securities or other property.

 

(3)       The Corporation may enter into exclusive or non-exclusive underwriting contracts or contracts for the sale of its shares and may also enter into contracts for investment advisory, management and administrative services. The terms and conditions, methods of authorization, renewal, amendment and termination of the aforesaid contracts shall be as determined at the discretion of the Board of Directors; subject, however, to the provisions of the Charter of the Corporation, the By-Laws of the Corporation, applicable state law, and the Investment Company Act of 1940 and the rules and regulations of the Securities and Exchange Commission.

 

(4)       Except as otherwise provided by law or by the Charter of the Corporation, no contract or other transaction between the Corporation and any person, partnership or corporation and no act of the Corporation shall in any way be affected or invalidated by the fact that any Officer or Director of the Corportaion is pecuniarily or otherwise interested therein or is such person or a member, officer or director of such partnership or other corporation, provided that the fact of such interest shall be known to the Board of Directors of the Corporation. Specifically, but without limitation of the foregoing, the Corporation may:

 

(a)       Enter into a written underwriting contract, management contract or contracts for research and advisory services with Federated Research Corp., or its parent, affiliates or subsidiaries thereof, or their respective successors, or otherwise do business with such corporation, notwithstanding the fact that one or more of the Directors of the Corporation and some or all of its Officers are, have been, or may become Directors, Officers, Employees or Stockholders of Federated Research Corp. or its parent, affiliates or subsidiaries or successors, and in the absence of actual fraud the Corporation may deal freely with Federated Research Corp. or its parent, affiliates, subsidiaries or successors, and neither such underwriting contract, management contract or contract for research and advisory services nor any other contract or transaction between the Corporation and Federated Research Corp. or its parent, affiliates, subsidiaries or successors shall be invalidated or in any way affected thereby, nor shall any Director or Officer of the Corporation be liable to the Corporation or to any Stockholder or creditor of the Corporation or to any other person for any loss incurred under or by reason of any such contract or transaction. Anything in the foregoing notwithstanding, no officer or director or underwriter or investment adviser of the Corporation shall be protected against any liability to the Corporation or to its security holders to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office.

 

(5)       No Officer or Director of the Corporation or of any investment advisory company or management company, nor the Corporation itself, nor such investment advisory or management company or underwriter of the Corporation shall take long or short positions in respect of any shares issued by the Corporation; provided, however, that such prohibition shall not prevent:

 

(a)       Any underwriter from purchasing from the Corporation shares of capital stock issued by the Corporation, provided that orders to purchase from the Corporation are entered with the Corporation by such underwriter either for investment or upon receipt by it of purchase orders for shares of stock of the Corporation, and provided such purchases are not in excess of purchase orders received by such underwriter;

 

(b)       The Corporation or any distributor or underwriter from maintaining a market for shares of capital stock issued by the Corporation;

 

(c)       The purchase from the Corporation of shares of capital stock of the Corporation by the Officers or Directors of the Corporation or of any investment advisory, management company or underwriter or distributor of the Corporation at the prices available to the public or authorized by the Securities and Exchange Commission at the moment of such purchase.

 

6.       The Corporation shall indemnify its officers, directors, employees and agents and any person who serves at the request of the Corporation as a Director, Officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise to the extent permitted by Maryland law as amended from time to time, provided, however, that no officer or director shall be protected against any liability to the Corporation or its stockholders to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office.

 

7.       The Board of Directors shall, subject to the laws of Maryland, have power to determine, from time to time, whether and to what extent and at what times and places and under what conditions and regulations any accounts and books of the Corporation, or any of them, shall be open to the inspection of Stockholders.

 

8.       Notwithstanding any provision of law requiring a greater proportion than a majority of the votes of all classes of stock entitled to be cast, to take or authorize any action, the Corporation may take or authorize any such action upon the concurrence of a majority of the aggregate number of the votes entitled to be cast thereon.

 

9.       The Corporation reserves the right from time to time to make any amendment of its Charter now or hereafter authorized by law, including any amendment which alters the contract rights, as expressly set forth in its Charter, of any outstanding capital stock, except that no action affecting the validity or assessibility of such shares shall be taken without the unanimous approval of the outstanding shares of Capital Stock.

 

10.       In addition to the powers and authority conferred upon them by the Charter of the Corporation or by law, the Board of Directors may exercise all such powers and authority and do all such acts and things as may be exercised or done by the Corporation, subject, nevertheless, to the provisions of applicable state law and the Charter and By-Laws of the Corporation.

 

11.       The Board of Directors is expressly authorized to determine in accordance with generally accepted accounting principles and practices what constitutes net profits, earnings, surplus or net assets in excess of capital, and to determine what accounting periods shall be used by the Corporation for any purpose, whether annual or any other period, including daily; to set apart out of any funds of the Corporation such reserves for such purposes as it shall determine and to abolish the same; to declare and pay dividends and distributions in cash, securities or other property from surplus or any funds legally available therefor, at such intervals (which may be as frequently as daily) or on such other periodic basis, as it shall determine; to declare such dividends or distributions by means of a formula or other method of determination, at meetings held less frequently than the frequency of the effectiveness of such declarations; to establish payment dates for dividends or any other distributions on any basis, including dates occurring less frequently than the effectiveness of declarations thereof; and to provide for the payment of declared dividends on a date earlier or later than the specified payment date in the case of Stockholders of the Corporation redeeming their entire ownership of shares of the Corporation.

 

TENTH: The Corporation acknowledges that is adopting its corporate name through permission of Federated Investors, Inc., a Pennsylvania corporation, and agrees that Federated Investors, Inc. reserves to itself and any successor to its business the right to withdraw from the Corporation the name “Federated” and reserves to itself and any successor to it business the right to grand the non-exclusive right to use the name “Federated” or any similar name to any other investment company business enterprise.

 

ELEVENTH: In addition to the powers and authority conferred upon them by the Charter of the Corporation or by law, the Board of Directors may exercise all such powers and authority and do all such acts and things as may be exercised or done by the Corporation, subject, nevertheless, to the provisions of applicable state law and the charter and By-Laws of the Corporation.

 

TWELFTH: The duration of the Corporation shall be perpetual.

 

SECOND:       The restatement of the Charter was approved by a majority of the entire Board of Directors.

 

THIRD:       The provisions set forth in these Articles of Restatement are all the provisions of the Charter currently in effect. The current address of the principal office of the Corporation, the name and address of the Corporation’s current resident agent and the number of directors of the Corporation and the names of those currently in office are as stated above.

 

FOURTH:       The Charter is not amended by these Articles of Restatement.

 

IN WITNESS WHEREOF, Liberty Municipal Securities Fund, Inc. has caused these Articles of Restatement to be signed in is name and on its behalf by its Vice President and attested by its Assistant Secretary on April 30, 1993. The undersigned President acknowledges these Articles of Restatement to be the corporate act of the Corporation and states to the best of his knowledge, information and belief that the mattes and facts set forth herein with respect to authorization and approval are true in all material respects and that this statement is made under the penalties of perjury.

 

 
 

 

 

FEDERATED MUNICIPAL SECURITIES FUND, INC.

 

CERTIFICATE OF CORRECTION

 

Federated Municipal Securities Fund, Inc., a Maryland corporation (the “Corporation”), hereby certifies that:

 

FIRST: The title of the document being corrected is “Articles Supplementary”.

 

SECOND: The only party to the document being corrected is Federated Municipal Securities Fund, Inc. (formerly Liberty Municipal Securities Fund, Inc.).

 

THIRD: The Articles Supplementary were filed on August 3, 1994.

 

FOURTH: The provisions of the Articles Supplementary which are to be corrected are set forth in Exhibit A attached hereto.

 

FIFTH: The corrected provisions of the Articles Supplementary are set forth in Exhibit B attached hereto.

 

IN WITNESS WHEREOF, the Corporation has caused these presents to be signed in its name and on its behalf by its Executive Vice President and attested to by its Assistant Secretary on this 28th day of February, 1997.

 

The undersigned Executive Vice President acknowledges this Certificate of Correction to be the corporate act of the Corporation and as to all matters or acts required to be verified under oath the undersigned Executive Vice President acknowledges that to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.

 

  FEDERATED MUNICIPAL
  SECURITIES FUND, INC.
   
  By:/s/ J. Christopher Donahue
  J. Christopher Donahue
  Executive Vice President

WITNESSED:

 

/s/ S. Elliott Cohan

S. Elliott Cohan

Assistant Secretary

 
 

Exhibit A

 

LIBERTY MUNICIPAL SECURITIES FUND, INC.

 

ARTICLES SUPPLEMENTARY

 

 

 

LIBERTY MUNICIPAL SECURITIES FUND, INC., a Maryland corporation having its principal offices in Baltimore, Maryland (hereinafter called the “Corporation”), hereby certifies

 

FIRST: The Board of Directors hereby reclassifies 249,449,030 of the authorized but unissued shares of Select Shares of the Corporation as 249,449,030 shares of Class B Shares.

 

SECOND: The shares of Common Stock reclassified hereby shall have the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption as set forth in Article FIFTH, paragraph (b) of the Corporation’s charter and shall be subject to all provisions of the charter relating to stock of the Corporation generally.

 

THIRD: The stock has been reclassified by the Board of Directors under the authority contained in the charter of the Corporation.

 

IN WITNESS WHEREOF, Liberty Municipal Securities Fund, Inc. has caused these presents to be signed in its name and on its behalf by its President and witnessed by its Assistant Secretary on June 15, 1994.

 

The undersigned, J. Christopher Donahue, President of the Corporation, hereby acknowledges in the name and on behalf of the Corporation the foregoing Articles Supplementary to be its corporate act and further certifies to the best of his knowledge, information and belief, that the matters and facts set forth herein with respect to the authorization and approval hereof are true in all material respects and that this statement is made under the penalties of perjury.

 

 

 

 
 

Exhibit B

 

LIBERTY MUNICIPAL SECURITIES FUND, INC.

 

ARTICLES SUPPLEMENTARY

 

 

 

LIBERTY MUNICIPAL SECURITIES FUND, INC., a Maryland corporation having its principal offices in Baltimore, Maryland (hereinafter called the “Corporation”), hereby certifies:

 

FIRST: The Board of Directors hereby reclassifies 249,449,030 of the authorized but unissued shares of Select Shares of the Corporation as 249,449,030 shares of Class B Shares.

 

SECOND: The shares of common stock reclassified hereby shall have the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption as set forth in Article FIFTH, paragraph (b) of the Corporation’s charter and shall be subject to all provisions of the charter relating to stock of the Corporation generally and to the following:

 

At such times as may be determined by the Board of Directors (or with the authorization of the Board of Directors, by the Officers of the Corporation) in accordance with the Investment Company Act of 1940, as amended, applicable rules and regulations thereunder, and applicable rules and regulations of the National Association of Securities Dealers, Inc., and reflected in the pertinent registration statement of the Corporation, Class B Shares of the Corporation may be automatically converted into shares of common stock of the Corporation without further designation based on the relative net asset values of such classes at the time of the conversion, subject, however, to any conditions of conversion that may be imposed by the Board of Directors (or with the authorization of the Board of Directors, by the Officers of the Corporation) and reflected in the pertinent registration statement of the Corporation as aforesaid.

 

 

THIRD: The stock has been reclassified by the Board of Directors under the authority contained in the charter of the Corporation.

 

 

IN WITNESS WHEREOF, Liberty Municipal Securities Fund, Inc. has caused these presents to be signed in its name and on its behalf by its President and witnessed by its Assistant Secretary on June 15, 1994.

 

The undersigned, J. Christopher Donahue, President of the Corporation, hereby acknowledges in the name and on behalf of the Corporation the foregoing Articles Supplementary to be its corporate act and further certifies to the best of his knowledge, information and belief, that the matters and facts set forth herein with respect to the authorization and approval hereof are true in all material respects and that this statement is made under the penalties of perjury.

 
 

 

 

FEDERATED MUNICIPAL SECURITIES FUND, INC.

 

CERTIFICATE OF CORRECTION

 

Federated Municipal Securities Fund, Inc., a Maryland corporation (the “Corporation”), hereby certifies that:

 

FIRST:       The title of the document being corrected is “Articles Supplementary”.

 

SECOND:       The only party to the document being corrected is Federated Municipal Securities Fund, Inc. (formerly Liberty Municipal Securities Fund, Inc.).

 

THIRD:       The Articles Supplementary were filed on September 16, 1994.

 

FOURTH:       The provisions of the Articles Supplementary which are to be corrected are set forth in Exhibit A attached hereto.

 

FIFTH:       The corrected provisions of the Articles Supplementary are set forth in Exhibit B attached hereto.

 

IN WITNESS WHEREOF, the Corporation has caused these presents to be signed in its name and on its behalf by its Executive Vice President and attested to by its Assistant Secretary on this 28th day of February, 1997.

 

The undersigned Executive Vice President acknowledges this Certificate of Correction to be the corporate act of the Corporation and as to all matters or facts required to be verified under oath the undersigned Executive Vice President acknowledges that to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.

 

  FEDERATED MUNICIPAL
  SECURITIES FUND, INC.
   
  By:/s/ J. Christopher Donahue
  J. Christopher Donahue
  Executive Vice President

WITNESSED:

 

/s/ S. Elliott Cohan

S. Elliott Cohan

Assistant Secretary

 
 

Exhibit A

 

LIBERTY MUNICIPAL SECURITIES FUND, INC.

 

ARTICLES SUPPLEMENTARY

 

 

LIBERTY MUNICIPAL SECURITIES FUND, INC., a Maryland corporation having its principal offices in Baltimore, Maryland (hereinafter called the “Corporation”), hereby certifies:

 

FIRST: The Board of Directors hereby reclassifies 550,970 of the authorized shares of Select Shares of the Corporation as 550,970 shares of Class B Shares.

 

SECOND: The shares of Common Stock reclassified hereby shall have the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption as set forth in Article FIFTH, paragraph (b) of the Corporation’s charter and shall be subject to all provisions of the charter relating to stock of the Corporation generally.

 

THIRD: The stock has been reclassified by the Board of Directors under the authority contained in the charter of the Corporation.

 

IN WITNESS WHEREOF, Liberty Municipal Securities Fund, Inc. has caused these presents to be signed in its name and on its behalf by its President and witnessed by its Assistant Secretary on August 1, 1994.

 

The undersigned, J. Christopher Donahue, President of the Corporation, hereby acknowledges in the name and on behalf of the Corporation the foregoing Articles Supplementary to be its corporate act and further certifies to the best of his knowledge, information and belief, that the matters and facts set forth herein with respect to the authorization and approval hereof are true in all material respects and that this statement is made under the penalties of perjury.

 

 
 

Exhibit B

 

LIBERTY MUNICIPAL SECURITIES FUND, INC.

 

ARTICLES SUPPLEMENTARY

 

 

LIBERTY MUNICIPAL SECURITIES FUND, INC., a Maryland corporation having its principal offices in Baltimore, Maryland (hereinafter called the “Corporation”), hereby certifies:

 

FIRST: The Board of Directors hereby reclassifies 550,970 of the authorized shares of Select Shares of the Corporation as 550,970 shares of Class B Shares.

 

SECOND: The shares of Common Stock reclassified hereby shall have the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption as set forth in Article FIFTH, paragraph (b) of the Corporation’s charter and shall be subject to all provisions of the charter relating to stock of the Corporation generally and to the following:

 

At such times as may be determined by the Board of Directors (or with the authorization of the Board of Directors, by the Officers of the Corporation) in accordance with the Investment Company Act of 1940, as amended, applicable rules and regulations thereunder, and applicable rules and regulations of the National Association of Securities Dealers, Inc., and reflected in the pertinent registration statement of the Corporation, Class B Shares of the Corporation may be automatically converted into shares of common stock of the Corporation without further designation based on the relative net asset values of such classes at the time of the conversion, subject, however, to any conditions of conversion that may be imposed by the Board of Directors (or with the authorization of the Board of Directors, by the Officers of the Corporation) and reflected in the pertinent registration statement of the Corporation as aforesaid.

 

 

THIRD: The stock has been reclassified by the Board of Directors under the authority contained in the charter of the Corporation.

 

IN WITNESS WHEREOF, Liberty Municipal Securities Fund, Inc. has caused these presents to be signed in its name and on its behalf by its President and witnessed by its Assistant Secretary on August 1, 1994.

 

The undersigned, J. Christopher Donahue, President of the Corporation, hereby acknowledges in the name and on behalf of the Corporation the foregoing Articles Supplementary to be its corporate act and further certifies to the best of his knowledge, information and belief, that the matters and facts set forth herein with respect to the authorization and approval hereof are true in all material respects and that this statement is made under the penalties of perjury.

 
 

 

 

FEDERATED MUNICIPAL SECURITIES FUND, INC.

ARTICLES SUPPLEMENTARY

 

Federated Municipal Securities Fund, Inc., a Maryland corporation having its principal office in the City of Baltimore, Maryland and a registered open-end Company under the Investment Company Act of 1940 (the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland that:

 

FIRST:       The Corporation is authorized to issue one billion (1,000,000,000) shares of common stock, all of which have a par value of one cent ($.01) per share, with an aggregate par value of $10,000,000. These Articles Supplementary do not increase the total authorized capital stock of the Corporation or the aggregate par value thereof.

 

SECOND:       The Board of Directors of the Corporation hereby reclassifies (i) 75,000,000 shares of the authorized and unissued shares of Federated Municipal Securities Fund, Inc. Class B Shares, (ii) 75,000,000 of the authorized and unissued shares of Federated Municipal Securities Fund, Inc. Class C Shares into authorized but unissued shares as follows:

 

Class       Number of Shares

 

Federated Municipal Securities Fund, Inc. Class F 150,000,000

 

THIRD:       Immediately before the reclassification of shares as set forth in Article SECOND hereto, the Corporation was authorized to issue one billion (1,000,000,000) shares of common stock, all of which were of a par value of one cent ($.01) per share having an aggregate par value of ten million dollars ($10,000,000) which were classified as follows:

 

Class Number of Shares
   
Federated Municipal Securities Fund, Inc. Class A 375,000,000
   
Federated Municipal Securities Fund, Inc. Class B 250,000,000
   
Federated Municipal Securities Fund, Inc. Class C 375,000,000

 

Following the aforesaid reclassification of shares as set forth in Article SECOND hereto, the Corporation will be authorized to issue one billion (1,000,000,000) shares of common stock, all of which have a par value of one cent ($.01) per share, with an aggregate par value of $10,000,000 classified as follows:

 

Class Number of Shares
   
Federated Municipal Securities Fund, Inc. Class A 375,000,000
   
Federated Municipal Securities Fund, Inc. Class B 175,000,000
   
Federated Municipal Securities Fund, Inc. Class C 300,000,000
Federated Municipal Securities Fund, Inc. Class F 150,000,000

 

FOURTH:       The shares of common stock of the Corporation reclassified hereby shall be subject to all of the provisions of the Corporation’s Charter relating to shares of stock of the Corporation generally and shall have the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption set forth in Article FIFTH, paragraph (b) of the Articles of Incorporation of the Corporation and as set forth below:

 

a. Shares having a common Fund name shall be invested in a common investment portfolio and the assets, liabilities, income, expenses, dividends and related liquidation rights belonging to each investment portfolio and allocated among them and among the various classes invested therein shall be as determined by the Board of Directors of the Corporation in accordance with law.

 

b. At such times (which may vary between and among the holders of particular classes of stock invested in a common investment portfolio) as may be determined by the Board of Directors (or with the authorization of the Board of Directors, by the officers of the Corporation) in accordance with the Investment Company Act of 1940, as amended, applicable rules and regulations thereunder, and applicable rules and regulations of the National Association of Securities Dealers, Inc. and reflected in the pertinent registration statement of the Corporation, shares of any particular class of stock invested in any common investment portfolio of the Corporation may be automatically converted into shares of another class of stock invested in the same common investment portfolio of the Corporation based on the relative net asset values of such classes at the time of conversion, subject, however, to any conditions of conversion that may be imposed by the Board of Directors (or with the authorization of the Board of Directors, by the officers of the Corporation) and reflected in the pertinent registration statement of the Corporation as aforesaid.

 

FIFTH: The stock has been reclassified by the Board of Directors under the authority contained in the Charter of the Corporation.

 

SIXTH: These Articles Supplementary will become effective immediately upon filing with the State Department of Assessments and Taxation of Maryland.

 
 

 

IN WITNESS WHEREOF, the Corporation has caused these presents to be signed in its name and on its behalf by its President and Assistant Secretary on May 25, 2007. The undersigned President and Assistant Secretary acknowledge that these Articles Supplementary are the act of the Corporation, that to the best of their knowledge, information and belief, all matters and facts set forth herein relating to the authorization and approval of these Articles of Supplementary are true in all material respects and that this statement is made under the penalties of perjury.

 

WITNESS FEDERATED MUNICIPAL SECURITIES FUND, INC.
   
   
   
/s/ Andrew P. Cross /s/ J. Christopher Donahue
Andrew P. Cross J. Christopher Donahue
Assistant Secretary President

 

 
 

FEDERATED MUNICIPAL SECURITIES FUND, INC.

ARTICLES SUPPLEMENTARY

 

Federated Municipal Securities Fund, Inc., a Maryland corporation having its principal office in the City of Baltimore, Maryland and a registered open-end Company under the Investment Company Act of 1940 (the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland that:

 

FIRST:       The Corporation is authorized to issue one billion (1,000,000,000) shares of common stock, all of which have a par value of one cent ($.01) per share, with an aggregate par value of $10,000,000. These Articles Supplementary do not increase the total authorized capital stock of the Corporation or the aggregate par value thereof.

 

SECOND:       The Board of Directors of the Corporation hereby reclassifies (i) 100,000,000 shares of the authorized and unissued shares of Federated Municipal Securities Fund, Inc. Class B Shares, 150,000,000 of the authorized and unissued shares of Class C Shares and 50,000,000 of the authorized and unissued shares of Class F Shares (a total of 300,000,000 shares), into Federated Municipal Securities Fund, Inc. Class T Shares.

 

THIRD:       Immediately before the reclassification of shares as set forth in Article SECOND hereto, the Corporation was authorized to issue one billion (1,000,000,000) shares of common stock, all of which were of a par value of one cent ($.01) per share having an aggregate par value of ten million dollars ($10,000,000) which were classified as follows:

 

Class Number of Shares
   
Federated Municipal Securities Fund, Inc. Class A 375,000,000
   
Federated Municipal Securities Fund, Inc. Class B 175,000,000
   
Federated Municipal Securities Fund, Inc. Class C 300,000,000
   
Federated Municipal Securities Fund, Inc. Class F 150,000,000
   
Aggregate Authorized Shares 1,000,000,000

 

Following the aforesaid reclassification of shares as set forth in Article SECOND hereto, the Corporation will be authorized to issue one billion (1,000,000,000) shares of common stock, all of which have a par value of one cent ($.01) per share, with an aggregate par value of $10,000,000 classified as follows:

 

Class Number of Shares
   
Federated Municipal Securities Fund, Inc. Class A 375,000,000
   
Federated Municipal Securities Fund, Inc. Class B 75,000,000
   
Federated Municipal Securities Fund, Inc. Class C 150,000,000
   
Federated Municipal Securities Fund, Inc. Class F 100,000,000
   
Federated Municipal Securities Fund, Inc. Class T 300,000,000
   
Aggregate Authorized Shares 1,000,000,000

 

 

FOURTH:       The shares of common stock of the Corporation reclassified hereby shall be subject to all of the provisions of the Corporation’s Charter relating to shares of stock of the Corporation generally and shall have the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption set forth in Article FIFTH, paragraph (b) of the Articles of Incorporation of the Corporation and as set forth below:

 

a. Shares having a common Fund name shall be invested in a common investment portfolio and the assets, liabilities, income, expenses, dividends and related liquidation rights belonging to each investment portfolio and allocated among them and among the various classes invested therein shall be as determined by the Board of Directors of the Corporation in accordance with law.

 

b. At such times (which may vary between and among the holders of particular classes of stock invested in a common investment portfolio) as may be determined by the Board of Directors (or with the authorization of the Board of Directors, by the officers of the Corporation) in accordance with the Investment Company Act of 1940, as amended, applicable rules and regulations thereunder, and applicable rules and regulations of the National Association of Securities Dealers, Inc. and reflected in the pertinent registration statement of the Corporation, shares of any particular class of stock invested in any common investment portfolio of the Corporation may be automatically converted into shares of another class of stock invested in the same common investment portfolio of the Corporation based on the relative net asset values of such classes at the time of conversion, subject, however, to any conditions of conversion that may be imposed by the Board of Directors (or with the authorization of the Board of Directors, by the officers of the Corporation) and reflected in the pertinent registration statement of the Corporation as aforesaid.

 

FIFTH: The stock has been reclassified by the Board of Directors under the authority contained in the Charter of the Corporation.

 

SIXTH: These Articles Supplementary will become effective immediately upon filing with the State Department of Assessments and Taxation of Maryland.

 

IN WITNESS WHEREOF, the Corporation has caused these presents to be signed in its name and on its behalf by its President and Assistant Secretary on February 22, 2017. The undersigned President and Assistant Secretary acknowledge that these Articles Supplementary are the act of the Corporation, that to the best of their knowledge, information and belief, all matters and facts set forth herein relating to the authorization and approval of these Articles of Supplementary are true in all material respects and that this statement is made under the penalties of perjury.

 

WITNESS FEDERATED MUNICIPAL SECURITIES FUND, INC.
   
   
/s/ George F. Magera /s/ J. Christopher Donahue
George F. Magera J. Christopher Donahue
Assistant Secretary President

 

 
 

 

FEDERATED MUNICIPAL SECURITIES FUND, INC.

ARTICLES SUPPLEMENTARY

 

Federated Municipal Securities Fund, Inc., a Maryland corporation having its principal office in the City of Baltimore, Maryland and a registered open-end company under the Investment Company Act of 1940 (the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland that:

 

FIRST:       The Corporation is authorized to issue one billion (1,000,000,000) shares of common stock, all of which have a par value of one cent ($.01) per share, with an aggregate par value of $10,000,000. These Articles Supplementary do not increase the total authorized capital stock of the Corporation or the aggregate par value thereof.

 

SECOND:       The Board of Directors of the Corporation hereby reclassifies (i) 125,000,000 shares of the authorized and unissued shares of Federated Municipal Securities Fund, Inc. Class A Shares, 25,000,000 of the authorized and unissued shares of Class B Shares, 100,000,000 of the authorized and unissued shares of Class C Shares and 50,000,000 of the authorized and unissued shares of Class F Shares (a total of 300,000,000 shares), into Federated Municipal Securities Fund, Inc. Institutional Shares Class Shares.

 

THIRD:       Immediately before the reclassification of shares as set forth in Article SECOND hereto, the Corporation was authorized to issue one billion (1,000,000,000) shares of common stock, all of which were of a par value of one cent ($.01) per share with an aggregate par value of ten million dollars ($10,000,000) which were classified as follows:

 

Class Number of Shares
   
Federated Municipal Securities Fund, Inc. Class A 375,000,000
   
Federated Municipal Securities Fund, Inc. Class B 75,000,000
   
Federated Municipal Securities Fund, Inc. Class C 150,000,000
   
Federated Municipal Securities Fund, Inc. Class F 100,000,000
   
Federated Municipal Securities Fund, Inc. Class T 300,000,000
   
Aggregate Authorized Shares 1,000,000,000

 

Following the aforesaid reclassification of shares as set forth in Article SECOND hereto, the Corporation will be authorized to issue one billion (1,000,000,000) shares of common stock, all of which have a par value of one cent ($.01) per share, with an aggregate par value of ten million dollars ($10,000,000) classified as follows:

 

Class Number of Shares
   
Federated Municipal Securities Fund, Inc. Class A 250,000,000
   
Federated Municipal Securities Fund, Inc. Class B 50,000,000
   
Federated Municipal Securities Fund, Inc. Class C 50,000,000
   
Federated Municipal Securities Fund, Inc. Class F 50,000,000
   
Federated Municipal Securities Fund, Inc. Class T 300,000,000
   
Federated Municipal Securities Fund, Inc. Institutional Share Class 300,000,000
   
Aggregate Authorized Shares 1,000,000,000

 

 

FOURTH:       The shares of common stock of the Corporation reclassified hereby shall be subject to all of the provisions of the Corporation’s Charter relating to shares of stock of the Corporation generally and shall have the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption set forth in the Charter of the Corporation.

 

FIFTH: The stock has been reclassified by the Board of Directors under the authority contained in the Charter of the Corporation.

 

SIXTH: These Articles Supplementary will become effective immediately upon filing with and acceptance for recording by the State Department of Assessments and Taxation of Maryland.

 

IN WITNESS WHEREOF, the Corporation has caused these presents to be signed in its name and on its behalf by its President and attested to by its Assistant Secretary on June 1, 2017.

 

The undersigned President of the Corporation acknowledges these Articles Supplementary to be the corporate act of the Corporation and, as to all matters and facts required to be verified under oath, acknowledges that to the best of his knowledge, information and belief, these matter and facts are true in all material respects and that this statement is made under the penalties for perjury.

 

(Signatures on next page)

 

 

 

 

 

ATTEST FEDERATED MUNICIPAL SECURITIES FUND, INC.
   
   
 /s/ George F. Magera /s/ Christopher Donhaue
George F. Magera J. Christopher Donahue
Assistant Secretary President

 

 
 

 

FEDERATED MUNICIPAL SECURITIES FUND, INC.

 

ARTICLES OF AMENDMENT

 

FEDERATED MUNICIPAL SECURITIES FUND, INC., a Maryland corporation having its principal office in the city of Baltimore, Maryland (hereinafter called the "Corporation"), hereby certifies to the State Department of Assessments and Taxation of Maryland that:

 

FIRST: The Articles of Incorporation of the Corporation are hereby amended by striking Article FIRST and inserting the following in its place:

 

"FIRST: The name of the Corporation is Federated Municipal Bond Fund, Inc."

 

SECOND: The foregoing amendment to the charter of the Corporation was approved by a majority of the entire Board of Directors of the Corporation; the charter amendment is limited to a change expressly authorized by Section 2-605 of the Maryland General Corporation Law to be made without action by the stockholders; and the Corporation is registered as an open-end company under the Investment Company Act of 1940, as amended.

 

THIRD: These Articles of Amendment will become effective immediately upon filing with and acceptance for record by the State Department of Assessments and Taxation of Maryland.

 

IN WITNESS WHEREOF, Federated Municipal Securities Fund, Inc. has caused these presents to be signed in its name and on its behalf by its President and attested to by its Assistant Secretary on June 1, 2017.

 

The undersigned President of the Corporation acknowledges these Articles of Amendment to be the corporate act of the Corporation and, as to all matters and facts required to be verified under oath, acknowledges that to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.

 

  FEDERATED MUNICIPAL
ATTEST SECURITIES FUND, INC.
   
   
   
/s/ George F. Magera /s/ Christopher Donahue
George F. Magera J. Christopher Donahue
Assistant Secretary President

 

 

 

 EX-99.BYLAWS 8 ex28bbylaws.htm EXHIBIT (3) (II) UNDER ITEM 601/REG. S-K

Exhibit 28 (b) under Form N-1A

Exhibit (3) (ii) under Item 601/Reg. S-K

 

 

Amendment #10, effective 1993.

 

FEDERATED HERMES MUNICIPAL BOND FUND, INC.

(effective as of June 29, 2020)

(formerly: Federated Municipal Bond Fund, Inc.)

(formerly: Federated Municipal Securities Fund, Inc.)

(formerly: Liberty Municipal Securities Fund, Inc.)

 

BY-LAWS

 

ARTICLE I

MEETING OF SHAREHOLDERS

 

Section 1. ANNUAL MEETINGS. The Corporation is not required to hold an annual meeting of Shareholders in any year in which the election of Directors is not required to be acted upon under the Investment Company Act of 1940. If the Corporation is required to hold a meeting of Shareholders to elect Directors, the meeting shall be designated the annual meeting of Shareholders for that year. If an annual meeting of Shareholder is held, it shall be held at a date and time determined by the Board of Directors within 120 days after the occurrence of the event requiring the meeting. Any other business may be considered at the meeting.

 

Section 2. SPECIAL MEETINGS. Special Meetings of Shareholders of the Company or of a particular Series or Class may be called by the Chairman, or by the Board of Directors; and shall be called by the Secretary whenever ordered by the Chairman, any Director, or as requested in writing by shareholders entitled to cast at least 10% of the voter shares entitled to be cast at the meetings. Such request shall state the purpose of such meeting and the matters proposed to be acted on thereat, and no other business shall be transacted at any such special meeting. The Secretary shall inform such Shareholders of the reasonably estimated costs of preparing and mailing the notice of the meeting, and upon payment to the Corporation of such costs, the Secretary shall give not less than then or more than 90 days’ notice of the meeting. Unless required by Shareholders entitled to cast a majority of all the votes entitled to be cast at the meeting, a special meeting need not be called to consider any matter which is substantially the same as the matter voted on at by special meeting of the Shareholders held during the preceding 12 months.

 

Section 3. PLACE OF MEETINGS. All meetings of the Shareholders of the Corporation or a particular Series or Class shall be held at such place within or without the State of Maryland as may be fixed by the Board of Directors. As amended by Amendment #13, dated 5/12/98)

 

Section 4. NOTICE. Not less than ten nor more than ninety days before the date of every Annual or Special Meeting of Shareholders the Secretary or an Assistant Secretary shall give to each Shareholder of record of the Corporation or of the relevant Series or Class written notice of such meeting. Such notice shall be deemed to have been given when mailed to the Shareholder at his address appearing on the books of the Corporation, which shall be maintained separately for the shares of each Series or Class. It shall not be necessary to set forth the business proposed to be transacted in the notice of any Annual Meeting except that any proposal to amend the Charter of the Corporation shall be set forth in such notice. Notice of a Special Meeting shall state the purpose or purposes for which it is called.

 

Section 5. QUORUM. The presence in person or by proxy of holders of one-third of the shares of stock of the Corporation entitled to vote without regard to class shall constitute a quorum at any meeting of the shareholders, except with respect to any matter which by law requires the approval of one or more classes of stock, in which case the presence in person or by proxy of the holders of one-third of the shares of stock of each class entitled to vote on the matter shall constitute a quorum.

 

In the absence of a quorum at any meeting, a majority of those Shareholders present in person or by proxy may adjourn the meeting from time to time to a date not later than 120 days after the original record date without further notice than by announcement to be given at the meeting until a quorum, as defined above, shall be present. Any business may be transacted at the adjourned meeting which might have been transacted at the meeting originally called had the same been held at the time so called.

 

Section 6. VOTING. At all meetings of Shareholders each Shareholder shall be entitled to one vote or fraction thereof for each Share or fraction thereof standing in his name on the books of the Corporation on the date for the determination of Shareholders entitled to vote at such meeting. All shares of each portfolio or class in the Corporation 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.

 

Section 7. PROXIES. Any Shareholder entitled to vote at any meeting of Shareholders may vote either in person or by proxy, but not proxy which is dated more than eleven months before the meeting named therein shall be accepted unless otherwise provided in the proxy. Every proxy shall be in writing and signed by the Shareholder or his duly authorized agent or be in such other form as may be permitted by the Maryland General Corporation Law, including electronic transmissions from the shareholder or his authorized agent. Authorization may be given orally, in writing, by telephone, or by other means of communication. A copy, facsimile transmission or other reproduction of the writing or transmission may be substituted for the original writing or transmission for any purpose for which the original transmission could be used. Every proxy shall be dated, but need not be sealed, witnessed or acknowledged. Where Shares are held of record by more than one person, any co-owner or co-fiduciary may appoint a proxy holder, unless the Secretary of the Corporation is notified in writing by any co-owner or co-fiduciary that the joinder of more than one is to be required. All proxies shall be filed with and verified by the Secretary or an Assistant Secretary of the Corporation, or the person acting as Secretary of the Meeting. Unless otherwise specifically limited by their term, all proxies shall entitle the holders thereof to vote at any adjournment of such meeting but shall not be valid after the final adjournment of such meeting.

 

Section 8. INFORMAL ACTION BY SHAREHOLDERS. Any action required or permitted to be taken at any meeting of Shareholders may be taken without a meeting, if a consent in writing, setting forth such action, is signed by all the Shareholders entitled to vote on the subject matter thereof, and such consent is filed with the records of the Corporation.

 

 
 

ARTICLE II

BOARD OF DIRECTORS

 

Section 1. POWERS. The business and affairs of the Corporation shall be managed under the direction of its Board of Directors. All powers of the Corporation may be exercised by or under the authority of the Board of Directors except as conferred on or reserved to the Shareholders by law, by Charter or by these By-Laws.

 

Section 2. NUMBER, QUALIFICATIONS, MANNER OF ELECTION AND TERM OF OFFICE. The number of Directors of the Corporation can be changed from time to time to not less than three or the number of Shareholders, whichever is less, not more than twenty. Directors need not be Shareholders. The term of office of a Director shall not be affected by any decrease in the number of Directors made by the Board pursuant to the foregoing authorization. Each Director shall hold office until the Annual Meeting next held after he becomes a director and until the election and qualification of his successor.

 

Section 3. PLACE OF MEETING. The Board of Directors may hold its meetings at such place or places within or without the State of Maryland as the Board or as the person or persons requesting said meeting to be called may from time to time determine.

 

Section 4. ANNUAL MEETINGS. The Board of Directors shall meet annually for the election of Officers and any other business.

 

Section 5. REGULAR MEETINGS. Regular meetings of the Board of Directors shall be held at such intervals and on such dates as the Board may from time to time designate, provided that any Director who is absent when such designation is made shall be given notice of the designation.

 

Section 6. SPECIAL MEETINGS. Special meetings of the Board of Directors may be held at such times and at such places as may be designated at the call of such meeting. Special meetings shall be called by the Secretary or Assistant Secretary at the request of the Chairman or any Director. If the Secretary when so requested refuses or fails for more than twenty-four hours to call such meeting, the Chairman or such Director may in the name of the Secretary call such meeting by giving due notice in the manner required when notice is given by the Secretary.

 

Section 7. NOTICE. The Secretary or Assistant Secretary shall give, at least two days before the meeting, notice of such meeting of the Board of Directors, whether Annual, Regular or Special, to each member of the Board by mail, telegram or telephone to his last known address. It shall not be necessary to state the purpose or business to be transacted in the notice of any meeting. Personal attendance at any meeting by a Director other than to protest the validity of said meeting shall constitute a waiver of the foregoing requirement of notice. In addition, notice of a meeting need not be given if a written waiver of notice executed by such Director before or after the Meeting is filed with the records of the meeting.

 

 
 

Section 8. CONDUCT OF MEETINGS AND BUSINESS. The Board of Directors may adopt such rules and regulations for the conduct of their meetings and the management of the affairs of the Corporation as they may deem proper and not inconsistent with applicable law, the Charter of the Corporation or these By-Laws.

 

Section 9. QUORUM. One-third of the entire Board of Directors but not less than two directors shall constitute a quorum at any meetings of the Board of Directors. The action of a majority of Directors present at any meeting at which a quorum is present shall be the action of the Board of Directors unless the concurrence of a greater proportion is required for such action by statute, the Charter of the Corporation, or these By-Laws. In the absence of a quorum at any meeting a majority of the Directors present may adjourn the meeting from day to day or for such longer periods as they may designate until a quorum shall be present. Notice of any adjourned meeting need not be given other than by announcement at the meeting.

 

Section 10. RESIGNATIONS. Any Director of the Corporation may resign at any time by written notice to the Chairman of the Board of Directors or to the Secretary of the Corporation. The resignation of any Director shall take effect at the time specified therein or, if no time is specified, when received by the Corporation. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

 

Section 11. REMOVAL. At any meeting of Shareholders duly called for the purpose, any Director may be the vote of a majority of all of the Shares entitled to vote be removed from office. At the same meeting, the vacancy in the Board of Directors may be filled by the election of a director to serve until the next annual meeting of Shareholders and the election and qualification of his successor.

 

Section 12. VACANCIES. Except as otherwise provided by law, any vacancy occurring in the Board of Directors for any cause other than by reason of an increase in the number of Directors may be filled by a majority of the remaining members of the Board of Directors although such majority is less than a quorum and any vacancy occurring by reason of an increase in the number of Directors may be filled by action of a majority of the entire Board of Directors. A Director elected by the Board to fill a vacancy shall be elected to hold office until the next Annual Meeting of Shareholders and until his successor is duly elected and qualifies.

 

Section 13. COMPENSATION OF DIRECTORS. The Directors may receive compensation for their services as Directors as determined by the Board of Directors and expenses of attendance at each Meeting. Nothing herein contained shall be construed to preclude any Director from serving the Corporation in any other capacity, as an Officer, Agent or otherwise, and receiving compensation therefor.

 

Section 14. INFORMAL ACTION BY DIRECTORS. Any action required or permitted to be taken at any Annual, Regular or Special Meeting of the Board of Directors may be taken without a meeting if a written consent to such action is signed by all members of the Board and such written consent is filed with the minutes of proceedings of the Board.

 

Section 15. TELEPHONE CONFERENCE. Members of the Board of Directors or any committee thereof may participate in a meeting of the Board or such committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other at the same time and participation by such means shall constitute presence in person at the meeting.

 

ARTICLE III

EXECUTIVE AND OTHER COMMITTEES

 

Section 1. APPOINTMENT AND TERM OF OFFICE OF EXECUTIVE COMMITTEE. The Board of Directors may appoint an Executive Committee, which shall consist of two (2) or more Directors.

 

Section 2. VACANCIES IN EXECUTIVE COMMITTEE. Vacancies occurring in the Executive Committee from any cause may be filled by the Board of Directors.

 

Section 3. EXECUTIVE COMMITTEE TO REPORT TO BOARD. All action by the Executive Committee shall be reported to the Board of Directors at its Meeting next succeeding such action.

 

Section 4. PROCEDURE OF EXECUTIVE COMMITTEE. The Executive Committee shall fix its own rules of procedure not inconsistent with these By-Laws or with any directions of the Board of Directors. It shall meet at such times and places and upon such notice as shall be provided by such rules or by the resolution of the Board of Directors. The presence of a majority shall constitute a quorum for the transaction of business, and in every case the affirmative vote of a majority of the members of the Committee present shall be necessary for the taking of any action.

 

Section 5. POWERS OF EXECUTIVE COMMITTEE. During the internals between the Meetings of the Board of Directors the Executive Committee, except as limited by law or by specific directions of the Board of Directors, shall possess and may exercise all the powers of the Board of Directors in the management and direction of the business and conduct of the affairs of the Corporation.

 

Section 6. OTHER COMMITTEES. From time to time the Board of Directors may appoint any other Committee or Committees which shall have such powers as shall be specified in the resolution of appointment and may be delegated by laws.

 

Section 7. COMPENSATION. The members of any duly appointed Committee shall receive such compensation as from time to time may be fixed by the Board of Directors and reimbursement of expense.

 

Section 8. INFORMAL ACTION BY EXECUTIVE COMMITTEE OR OTHER COMMITTEES. Any action required or permitted to be taken at any meeting of the Executive Committee or any other duly appointed Committee may be taken without a meeting if written consent to such action is signed by all Members of such Committee and such written consent is filed with the minutes of the proceedings of such Committee.

 

Section 9 ADVISORY BOARD. The Directors may appoint an Advisory Board to consist in the first instance of not less than three (3) members. Members of such Advisory Board shall not be Directors or Officers and need not be Shareholders. Members of this Board shall hold office for such period as the Directors may by resolution provide. Any Member of such Board may resign therefrom by written instrument signed by him which shall take effect upon delivery to the Directors. The Advisory Board shall have no legal powers and shall not perform functions of Directors in any manner, said Board being intended to act merely in an advisory capacity. Such Advisory Board shall meet at such times and upon such notice as the Board of Directors may by resolution provide. The compensation of the Members of the Advisory Board, if any, shall be determined by the Board of Directors.

 

ARTICLE IV

OFFICERS

 

Section 1. GENERAL PROVISIONS. The Officers of the Corporation shall be a President, one or more Executive Vice Presidents, one or more Senior Vice Presidents, one or more Vice Presidents, a Treasurer and a Secretary. The Board of Directors, in its discretion, may elect or appoint one or more Vice Chairmen of the Board of Directors, and other Officers or agents, including one or more Assistant Vice Presidents, one or more Assistant Secretaries, and one or more Assistant Treasurers. An Executive Vice President, Senior Vice President or Vice President, the Secretary or the Treasurer may appoint an Assistant Vice President, an Assistant Secretary or an Assistant Treasurer, respectively, to serve until the next election of Officers. Two or more offices may be held by a single person except the offices of President, Executive Vice President, Senior Vice President or Vice President may not be held by the same person concurrently. It shall not be necessary for any Director or any Officer to be a holder of shares in any Series or Class of the Corporation. Any Officer, or other such person as the Board may appoint, may preside at meetings of the Shareholders. As amended by Amendment #11, dated 2/23/98, Amendment #14, dated 8/23/02 and Amendment #18, dated 1/1/06.

 

Section 2. ELECTION, TERM OF OFFICE AND QUALIFICATIONS. The Officers shall be elected annually by the Board of Directors at its Annual Meeting. Each Officer shall hold office for one year and until the election and qualification of his successor, or until earlier resignation or removal. As amended by Amendment #11, dated 2/23/98 and Amendment #18, dated 1/1/06

 

Section 3. REMOVAL. Any Officer elected by the Board of Directors or whose appointment has been ratified by the Board of Directors may be removed with or without cause at any time by a majority vote of the Directors. Any other employee of the Corporation may be removed or dismissed at any time by the President. As amended by Amendment #11, dated 2/23/98

 

Section 4. RESIGNATIONS. Any Officer may resign at any time by giving written notice to the Board of Directors. Any such resignation shall take effect at the time specified therein or, if no time is specified, at the time of receipt. Unless otherwise specified, the acceptance of such resignation shall not be necessary to make it effective. As amended by Amendment #11, dated 2/23/98

 

Section 5. VACANCIES. Any vacancies in any of the offices, whether by resignation, removal or otherwise, may be filled for the unexpired portion of the term by the President. A vacancy in the office of Assistant Vice President may be filled by a Vice President; in the office of Assistant Secretary by the Secretary; or in the office of Assistant Treasurer by the Treasurer. Any appointment to fill any vacancy shall serve subject to ratification by the Board of Directors at its next Regular Meeting. As amended by Amendment #11, dated 2/23/98

 

Section 6. CHAIRMAN OF THE BOARD OF DIRECTORS. The Board may elect from among its members a Chairman of the Board. The Chairman shall at all times be a Director who meets all applicable regulatory and other relevant requirements for serving in such capacity. The Chairman shall not be an Officer of the Corporation, but shall preside over meetings of the Board and shall have such other responsibilities in furthering the Board functions as may be assigned from time to time by the Board of Directors or prescribed by these By-Laws. It shall be understood that the election of any Director as Chairman shall not impose on that person any duty, obligation, or liability that is greater than the duties , obligations, and liabilities imposed on that person as a Director in the absence of such election, and no Director who is so elected shall be held to a higher standard of care by virtue thereof. In addition, election as Chairman shall not affect in any way that Director’s rights or entitlement to indemnification under the By-Laws or otherwise by the Corporation. The Chairman shall be elected by the Board annually to hold office until his successor shall have been duly elected and shall have qualified, or until his death, or until he shall have resigned, or have been removed, as herein provided by these By-Laws. Each Director, including the Chairman, shall have one vote.

 

Resignation. The Chairman may resign at any time by giving written notice of resignation to the Board. Any such resignation shall take effect at the time specified in such notice, or, if the time when it shall become effective shall not be specified therein, immediately upon its receipt; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

 

Removal The Chairman may be removed by majority vote of the Board with or without cause at any time.

 

Vacancy. Any vacancy in the office of Chairman, arising from any cause whatsoever, may be filled for the unexpired portion of the term of office which shall be vacant by the vote of the Board.

 

Absence. If, for any reason, the Chairman is absent from a meeting of the board, the Board may select from among its members who are present at such meeting a Director to preside over such meeting. As amended by Amendment #18, dated 1/1/06

 

Section 7. VICE CHAIRMAN OF THE BOARD OF DIRECTORS. Any Vice Chairman shall perform such duties as may be assigned to him from time to time by the Board of Directors of the Corporation. The Vice Chairman need not be a Director. As amended by Amendment #14, dated 8/23/02 and Amendment #18, dated 1/1/06

 

Section 8. PRESIDENT. The President of the Corporation shall be the principal executive officer of the Corporation. Unless other provisions are made therefor by the Board or Executive Committee, the President without limitation, shall employ and define the duties of all employees of the Corporation, shall have the power to discharge such employees, shall exercise general supervision over the affairs of the Corporation and shall have the power to sign, in the name of and on behalf of the Corporation, powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities or other property owned by the Corporation, and may, in the name of and on behalf of the Corporation, take all such action as the President may deem advisable in entering into agreements to purchase securities and other property in the ordinary course of business, and to sign representation letters in the course of buying securities or other property and shall perform such other duties as may be assigned to him from time to time by the Board of Directors. As amended by Amendment #14, dated 8/23/02 and Amendment #18, dated 1/1/06

 

Section 9. VICE PRESIDENT. The Executive Vice President, Senior Vice President or Vice President, if any, in order of their rank as fixed by the Board or if not ranked, a Vice President designated by the Board, in the absence of the President shall perform all duties and may exercise any of the powers of the President subject to the control of the Board. Each Executive Vice President, Senior Vice President and Vice President shall have the power, without limitation, to sign, in the name of and on behalf of the Corporation, powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities or other property owned by the Corporation, and may, inn the name of and on behalf of the Corporation, take all such action as the Executive Vice President, Senior Vice President or Vice President may deem advisable in entering into agreements to purchase securities or other property in the ordinary course of business, and to sign representation letters in the course of buying securities or other property and shall perform such other duties as may be assigned to him from time to time by the Board of Directors, the Executive Committee, or the President. As amended by Amendment #14, dated 8/23/02 and Amendment #18, dated 1/1/06

 

Section 10. SECRETARY. The Secretary shall keep or cause to be kept in books provided for the purpose the Minutes of the Meetings of the Shareholders, and of the Board of Directors; shall see that all Notices are duly given in accordance with the provisions of these By-Laws and as required by Law; shall be custodian of the records and of the Seal of the Corporation and see that the Seal is affixed to all documents the execution of which on behalf of the Corporation under its seal is duly authorized; shall keep directly or through a transfer agent a register of the post office address of each Shareholder, and make all proper changes in such register, retaining and filing his authority for such entries; shall see that the books, reports, statements, certificates and all other documents and records required by law are properly kept and filed; and in general shall perform all duties incident to the Office of Secretary and such other duties as may, from time to time, be assigned to him by the Board of Directors, the Executive Committee, or the President. As amended by Amendment #14, dated 8/23/02

 

Section 11. TREASURER. The Treasurer shall be the financial and accounting officer of the Corporation and have supervision of the custody of all funds and securities of the Corporation, subject to applicable law. He shall perform such other duties as may be from time to time assigned to him by the Board of Directors, the Executive Committee, or the President of the Corporation. As amended by Amendment #14, dated 8/23/02

 

Section 12. ASSISTANT VICE PRESIDENT. The Assistant Vice President or Vice Presidents of the Corporation shall have such authority and perform such duties as may be assigned to them by the Board of Directors, the Executive Committee, or the President of the Corporation. As amended by Amendment #14, dated 8/23/02

 

Section 13. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The Assistant Secretary or Secretaries and the Assistant Treasurer or Treasurers shall perform the duties of the Secretary and of the Treasurer respectively, in the absence of those Officers and shall have such further powers and perform such other duties as may be assigned to them respectively by the Board of Directors or the Executive Committee or by the President. As amended by Amendment #14, dated 8/23/02

 

Section 14. CHIEF LEGAL OFFICER. The Chief Legal Officer shall serve as Chief Legal Officer for the Corporation, solely for the purposes of complying with the attorney conduct rules (“Attorney Conduct Rules”) enacted by the Securities Exchange Commission pursuant to Section 307 of the Sarbanes-Oxley Act of 2002 (the “Act”). The Chief Legal Officer shall have the authority to exercise all powers permitted to be exercised by a chief legal officer pursuant to Section 307 of the Act. The Chief Legal Officer, in his sole discretion, may delegate his responsibilities as Chief Legal Officer under the Attorney Conduct Rules to another attorney or firm of attorneys. As amended by Amendment #15, dated 8/25/03

 

Section 15. CHIEF COMPLIANCE OFFICER. The Chief Compliance Officer shall be responsible for administering the Corporation’s policies and procedures approved by the Board under Rule 38a-1 of the Investment Company Act of 1940, as amended. Notwithstanding any other provision of these By-Laws, the designation, removal and compensation of Chief Compliance Officer are subject to Rule 38a01 under the Investment Company Act of 1940, as amended. As amended by Amendment #16, dated 9/21/04

 

Section 16. SALARIES. The salaries of the Officers shall be fixed from time to time by the Board of Directors. No Officer shall be prevented from receiving such salary by reason of the fact that he is also a Director of the Corporation. As amended by Amendment #14, dated 8/23/02

 

ARTICLE V

SHARES AND THEIR TRANSFER

 

Section 1. CERTIFICATES. All share certificates shall be signed by the Chairman, the President, or any Vice President and by the Treasurer or Secretary or any Assistant Treasurer or Assistant Secretary and may be sealed with the Seal of the Corporation. The signatures may be either manual or facsimile signatures and the seal may be either facsimile or any other form of Seal. Certificates for shares for which the Corporation has appointed an independent Transfer Agency and Registrar shall not be valid unless countersigned by such Transfer Agent and registered by such Registrar. In case any Officer who has signed any certificate ceases to be an Officer of the Corporation before the certificate is issued, the certificate may nevertheless be issued by the Corporation with the same effect as if the Officer had not ceased to be such Officer as of the date of its issuance. Share certificates shall be in such form not inconsistent with law and these By-Laws and may be determined by the Board of Directors.

 

Section 2. TRANSFER OF SHARES. Shares of each Series and Class shall be transferable on the books of the Corporation by the holder thereof in person or by duly authorized attorney upon surrender of the certificate representing the shares to be transferred properly endorsed.

 

Section 3. CLOSING OF TRANSFER BOOKS AND FIXING RECORD DATE. The Board of Directors may fix in advance a date as the record date for the purpose of determining Shareholders of a Series or Class entitled to notice of or to vote at any Meeting of Shareholders or Shareholders to receive payment of any dividend. Such date shall in any case not be more than 90 days and in case of a Meeting of Shareholders not less than 10 days prior to the date on which the particular action requiring such determination of Shareholders is to be taken. Only Shareholders of record on the record dates shall be entitled to notice of and to vote at such meeting or to receive such dividends or rights, as the case may be. In lieu of fixing a record date the Board of Directors may provide that the share transfer books of the Corporation shall be closed for a stated period not to exceed in any case 20 days. If the share transfer books are closed for the purpose of determining Shareholders entitled to notice of or to vote at a Meeting of Shareholders such books shall be closed for at least 10 days immediately preceding such meeting.

 

Section 4. LOST, DESTROYED OR MUTILATED CERTIFICATES. In case any Share certificate is lost, mutilated or destroyed the Board of Directors may issue a new certificate in place thereof upon indemnity to the relevant Series or Class against loss and upon such other terms and conditions as the Board may deem advisable.

 

Section 5. TRANSFER AGENT AND REGISTRAR: REGULATIONS. The Board of Directors shall have power and authority to make all such rules and regulations as they may deem expedient concerning the issuance, transfer and registration of Share certificates and may appoint a Transfer Agent and/or Registrar of Share certificates of each Series or Class, and may require all such Share certificates to bear the signature of such Transfer Agent and/or of such Registrar.

 

ARTICLE VI

AGREEMENTS, CERTAIN DELEGATION, CHECKS, DRAFTS, ENDORSEMENTS, ETC.

 

Section 1. AGREEMENTS, ETC. The Board of Directors or the Executive Committee may authorize any Officer or Officers, or Agent or Agents of the Corporation to enter into any Agreement or execute and deliver any instrument in the name of the Corporation and such authority may be general or confined to specific instances; and, unless so authorized by the Board of Directors or by the Executive Committee or by these By-Laws, no Officer, Agent or Employee shall have any power or authority to bind the Corporation by any Agreement or engagement or to pledge its credit or to render it liable pecuniarily for any purpose or to any amount.

 

Section 2. Delegation of Authority Relating to Dividends. The Directors may delegate to any Officer or Agent of the Corporation the ability to authorize the payment of non-stock dividends and may delegate to an Officer or Agent in accordance with that general authorization the power to fix the amount and other terms of the dividend provided that the Directors established a method or procedure for determining the maximum amount of the distribution. See Amendment #19, dated 6/1/13

 

Section 3. CHECKS, DRAFTS, ETC. All checks, drafts, or orders for the payment of money, notes and other evidences of indebtedness shall be signed by such Officer or Officers, Employee or Employees, or Agent or Agents as shall be from time to time designated by the Board of Directors or the Executive Committee, or as may be specified in or pursuant to the agreement between the Corporation on behalf of any Series or Class and the Bank or Trust Company appointed as custodian.

 

Section 4. ENDORSEMENTS, ASSIGNMENTS AND TRANSFER OF SECURITIES. All endorsements, assignments, stock powers or other instruments of transfer of securities standing in the name of the Corporation or its nominee or directions for the transfer of securities belonging to the Corporation shall be made by such Officer or Officers, Employee or Employees, or Agent or Agents as may be authorized by the Board of Directors or the Executive Committee.

 

ARTICLE VII

BOOKS AND RECORDS

 

Section 1. LOCATION. The books and records of the Corporation, including the Stock Ledger or ledgers, may be kept in or outside the State of Maryland at such office or agency of the Corporation as may be from time to time determined by the Board of Directors.

 

ARTICLE VIII

MISCELLANEOUS

 

Section 1. SEAL. The Seal of the Corporation shall consist of a flat-faced die with the word “Maryland,” together with the name of the Corporation and the year of its organization cut or engraved thereon, but unless otherwise required by the Directors, the Seal shall not be necessary to be placed on, and its absence shall not impair the validity of, any document, instrument or other paper executed and delivered by or on behalf of the Corporation.

 

Section 2. FISCAL YEAR. The Fiscal Year of the Corporation shall be designated from time to time by the Board of Directors.

 

 
 

 

ARTICLE IX

INDEMNIFICATION

 

Section 1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Corporation shall indemnify its directors to the fullest extent that indemnification of directors is permitted by the Maryland General Corporation Law. The Corporation shall indemnify its officers to the same extent as its directors and to such further extent as is consistent with law. The Corporation shall indemnify its directors and officers who while serving as directors or officers also serve at the request of the Corporation as a director, officer, partner, trustee, employee, agent or fiduciary of another corporation, partnership, joint venture, trust, other enterprise or employee benefit plan to the fullest extent consistent with law. The indemnification and other rights provided by this Article shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person. This Article shall not protect any such person against any liability to the Corporation or any Shareholder thereof to which such person would otherwise be subject by reason of (i) willful misfeasance, (ii) bad faith, (iii) gross negligence or (iv) reckless disregard of the duties involved in the conduct of his office (“disabling conduct”). As amended by Amendment #17, dated 8/18/05

 

Section 2. ACTION BY DIRECTOR AGAINST THE CORPORATION. With respect to any action, suit or other proceeding voluntarily prosecuted by any indemnitee as plaintiff, indemnification shall be mandatory only if the prosecution of such action, suit or other proceeding by such indemnitee(i) was authorized by a majority of the Directors or (ii) was instituted by the indemnitee to enforce his rights to indemnification hereunder in a case in which the indemnitee is found to be entitled to such indemnification. As amended by Amendment #17, dated 8/18/05

 

Section 3. SURVIVAL. The rights to indemnification set forth herein shall continue as to a person who has ceased to be a Director or officer of the Corporation and shall inure to the benefit of his heirs, executors and personal and legal representatives. As amended by Amendment #17, dated 8/18/05

 

Section 4. AMENDMENTS. References in this Article are to the Maryland General Corporation Law and to the Investment Company Act of 1940, as from time to time amended. No amendment or restatement of these by-laws or repeal of any of its provisions shall limit or eliminate any of the benefits provided to any person who at any time is or was a Director or officer of the Corporation or otherwise entitled to indemnification hereunder in respect of any act or omission that occurred prior to such amendment, restatement or repeal. As amended by Amendment #17, dated 8/18/05

 

Section 5. PROCEDURE. Notwithstanding the foregoing, no indemnification shall be made hereunder unless there has been a determination (i) by a final decision on the merits by a court or other body of competent jurisdiction before whom the issue of entitlement to indemnification hereunder was brought that such indemnitee is entitled to indemnification hereunder or, (ii) in the absence of such a decision, by (1) a majority vote of a quorum of those Directors who are neither “interested persons” of the Corporation (as defined in Section 2(a)(19) of the 1940 Act) nor parties to the proceeding (“Disinterested Non-Party Directors”), that the indemnitee is entitled to indemnification hereunder, or (2) if such quorum is not obtainable (or even if obtainable, if such majority so directs) independent legal counsel in a written opinion concludes, based on a review of readily available facts (as opposed to a full trial-type inquiry) that the indemnitee should be entitled to indemnification hereunder. All determinations to make advance payments in connection with the expense of defending any proceeding shall be authorized and made in advance with the immediately succeeding paragraph (f) below. As amended by Amendment #17, dated 8/18/05

 

Section 6 ADVANCES. Any current or former director or officer of the Corporation seeking indemnification within the scope of this Article shall be entitled to advances from the Corporation for payment of the reasonable expenses incurred by him in connection with the matter as to which he is seeking indemnification in the manner and to the fullest extent permissible under the Maryland General Corporation Law. The person seeking indemnification shall provide to the Corporation a written affirmation of his good faith belief that the standard of conduct necessary for indemnification by the Corporation has been met and a written undertaking to repay any such advance if it should ultimately be determined that the standard of conduct has not been met. In addition, at least one of the following additional conditions shall be met: (a) the person seeking indemnification shall provide a security in form and amount acceptable to the Corporation for his undertaking; (b) the Corporation is insured against losses arising by reason of the advance, or (c) a majority of a quorum of Disinterested Non-Party Directors, or independent legal counsel, in a written opinion, shall be determined, based on a review of facts readily available tot the Corporation at the time the advance is proposed to be made, that there is reason to believe that the person seeking indemnification will ultimately be found to be entitled to indemnification. As amended by Amendment #17, dated 8/18/05

 

Section 7. OTHER RIGHTS. The rights accruing to any indemnitee under these provisions shall not exclude any other right which any person may have or hereafter acquire under the Articles of Incorporation or the By-Laws of the Corporation, by contract or otherwise under law, by a vote of stockholders or Directors who are “disinterested persons” (as defined in Section 2(a)(19) of the 1940 Act) or any other right to which he may be lawfully entitled. As amended by Amendment #17, dated 8/18/05

 

Section 8. INDEMNIFICATION OF EMPLOYEES AND AGENTS. Subject to any limitations provided by the Investment Company Act of 1940 or otherwise under the Articles of Incorporation or the By-Laws of the Corporation, contract or otherwise under law, the Corporation shall have the power and authority to indemnify and provide for the advance payment of expenses to employees, agents and other persons providing services to the Corporation or serving in any capacity at the request of the Corporation to the fullest extent permitted by applicable law, provided that such indemnification has been approved by a majority of the Directors. As amended by Amendment #17, dated 8/18/05

 

ARTICLE X

AMENDMENTS

 

Section 1. The Board of Directors shall have the power to alter, amend or repeal any By-Laws of the Corporation and to make new By-Laws.

 
 

The following pages contain the actual amendments referenced in the preceding document.

 
 

FEDERATED MUNICIPAL SECURITIES FUND, INC.

(formerly: Liberty Municipal Securities Fund, Inc.)\

 

Amendment #11

to the By-Laws

 

(effective February 23, 1998)

 

Delete Sections 1, 2, 3, 4 & 5 from Article IV, OFFICERS, and replace with the following:

 

Section 1. GENERAL PROVISIONS. The Officers of the Corporation shall be a President, one or more Vice Presidents, a Treasurer, and a Secretary. The Board of Directors, in its discretion, may elect or appoint a Chairman of the Board of Directors and other Officers or agents, including one or more Assistant Vice Presidents, one or more Assistant Secretaries, and one or more Assistant Treasurers. A Vice President, the Secretary or the Treasurer may appoint an Assistant Vice President, an Assistant Secretary or an Assistant Treasurer, respectively, to serve until the next election of Officers. Two or more offices may be held by a single person except the offices of President and Vice President may not be held by the same person concurrently. It shall not be necessary for any Director or any Officer to be a holder of shares in any Series or Class of the Corporation. See Amendment #14, dated 8/23/02

 

Section 2. ELECTION, TERM OF OFFICE AND QUALIFICATIONS. The Officers shall be elected annually by the Board of Directors at its Annual Meeting. Each Officer shall hold office for one year and until the election and qualification of his successor, or until earlier resignation or removal. The Chairman of the Board of Directors, if there is one, shall be elected annually by and from the Directors, and serve until a successor is so elected and qualified, or until earlier resignation or removal.

 

Section 3. REMOVAL. Any Officers elected by the Board of Directors or who appointment has been ratified by the Board of Directors may be removed with or without cause at any time by a majority vote of all of the Directors. Any other employee of the Corporation may be removed or dismissed at any time by the President.

 

Section 4. RESIGNATIONS. Any Officer may resign at any time by giving written notice to the Board of Directors. Any such resignation shall take effect at the time specified therein or, if no time is specified, at the time of receipt. Unless otherwise specified, the acceptance of such resignation shall not be necessary to make it effective.

 

Section 5. VACANCIES. Any vacancy in any of the offices, whether by resignation, removal or otherwise, may be filled for the unexpired portion of the term by the President. A vacancy in the office Assistant Vice President may be filled by a Vice President, in the office of Assistant Secretary by the Secretary; or in the office of Assistant Treasurer by the Treasurer. Any appointment to fill any vacancy shall serve subject to ratification by the Board of Directors at is next Regular Meeting.

 
 

Federated Municipal Securities Fund, Inc.

 

Amendment #12

to the By-Laws

 

(effective February 27, 1998)

 

 

Delete Section 7, PROXIES of Article I, MEETINGS OF SHAREHOLDERS, and replace with the following:

 

Section 7. PROXIES. Any Shareholder entitled to vote at any meeting of Shareholders may vote either in person or by proxy, but not proxy which is dated more than eleven months before the meeting named therein shall be accepted unless otherwise provided in the proxy. Every proxy shall be in writing and signed by the Shareholder or his duly authorized agent or be in such other form as may be permitted by the Maryland General Corporation Law, including electronic transmissions from the shareholder or his authorized agent. Authorization may be given orally, in writing, by telephone, or by other means of communication. A copy, facsimile transmission or other reproduction of the writing or transmission may be substituted for the original writing or transmission for any purpose for which the original transmission could be used. Every proxy shall be dated, but need not be sealed, witnessed or acknowledged. Where Shares are held of record by more than one person, any co-owner or co-fiduciary may appoint a proxy holder, unless the Secretary of the Corporation is notified in writing by any co-owner or co-fiduciary that the joinder of more than one is to be required. All proxies shall be filed with and verified by the Secretary or an Assistant Secretary of the Corporation, or the person acting as Secretary of the Meeting. Unless otherwise specifically limited by their term, all proxies shall entitle the holders thereof to vote at any adjournment of such meeting but shall not be valid after the final adjournment of such meeting.

 
 

Federated Municipal Securities Fund, Inc.

 

Amendment #13

to the By-Laws

 

(effective May 12, 1998)

 

 

Strike Section 3 PLACE OF MEETINGS, from Article I MEETING OF SHAREHOLDER and replace with the following:

 

Section 3. PLACE OF MEETINGS. All meetings of the Shareholders of the Corporation or a particular Series or Class shall be held at such place within or without the State of Maryland as may be fixed by the Board of Directors.

 
 

Federated Municipal Securities Fund, Inc.

 

Amendment #14

to the By-Laws

 

(effective August 23, 2002)

 

Strike Section 1 GENERAL PROVISIONS from Article IV OFFICERS and replace with the following:

 

Section 1. GENERAL PROVISIONS. The Officers of the Corporation shall be a President, one or more Vice Presidents, a Treasurer, and a Secretary. The Board of Directors, in its discretion, may elect or appoint a Chairman of the Board of Directors, one or more Vice Chairmen of the Board of Directors, and other Officers or agents, including one or more Assistant Vice Presidents, one or more Assistant Secretaries, and one or more Assistant Treasurers. A Vice President, the Secretary or the Treasurer may appoint an Assistant Vice President, an Assistant Secretary or an Assistant Treasurer, respectively, to serve until the next election of Officers. Two or more offices may be held by a single person except the offices of President and Vice President may not be held by the same person concurrently. It shall not be necessary for any Director or any Officer to be a holder of shares in any Series or Class of the Corporation.

 

Strike Sections 7 – 13 from Article IV – OFFICERS and replace with the following:

 

Section 7. VICE CHAIRMAN OF THE BOARD OF DIRECTORS. The Vice Chairman, in the absence of the Chairman, shall perform such duties as may be assigned to him from time to time by the Board of Directors of the Corporation. The Vice Chairman need not be a Director.

 

Section 8. PRESIDENT. The President for Federated Municipal Securities Fund, Inc. shall be the principal executive officer of the Corporation. He shall, unless other provisions are made therefor by the Board or Executive Committee, employ and define the duties of all employees of the Corporation, shall have the power to discharge any such employees, shall exercise general supervision over the affairs of the Corporation and shall perform such other duties as may be assigned to him from time to time by the Board of Directors. In the absence of the Chairman of the Board of Directors, the President or an officer or Director appointed by the President, shall preside at all meetings of Shareholders.

 

Section 9. VICE PRESIDENT. The Vice President (or if more than one, the senior Vice President) in the absence of the President shall perform all duties and may exercise any of the powers of the President subject to the control of the Board. Each Vice President shall perform such other duties as may be assigned to him from time to time by the Board of Directors, the Executive Committee, or the President.

 

Section 10. SECRETARY. The Secretary shall keep or cause to be kept in books provided for the purpose the Minutes of the Meetings of the Shareholders, and of the Board of Directors; shall see that all Notices are duly given in accordance with the provisions of these By-Laws and as required by Law; shall be custodian of the records and of the Seal of the Corporation and see that the Seal is affixed to all documents the execution of which on behalf of the Corporation under its seal is duly authorized; shall keep directly or through a transfer agent a register of the post office address of each Shareholder, and make all proper changes in such register, retaining and filing his authority for such entries; shall see that the books, reports, statements, certificates and all other documents and records required by law are properly kept and filed; and in general shall perform all duties incident to the Office Secretary and such other duties as may, from time to time, be assigned to him by the Board of Directors, the Executive Committee, or the President.

 

Section 11. TREASURER. The Treasurer shall be the principal financial and accounting officer of the Corporation and have supervision of the custody of all funds and securities of the Corporation, subject to applicable law. He shall perform such other duties as may be from time to time assigned to him by the Board of Directors, the Executive Committee, or the President of the Corporation.

 

Section 12. ASSISTANT VICE PRESIDENT. The Assistant Vice President or Vice Presidents of the Corporation shall have such authority and perform such duties as may be assigned to them by the Board of Directors, the Executive Committee, or the President of the Corporation.

 

Section 13. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The Assistant Secretary or Secretaries and the Assistant Treasurer or Treasurers shall perform the duties of Secretary and of the Treasurer respectively, in the absence of those Officers and shall have such further powers and perform such other duties as may be assigned to them respectively by the Board of Directors or the Executive Committee or by the President.

 

Section 14. SALARIES. The salaries of the Officers shall be fixed from time to time by the Board of Directors. No Officer shall be prevented from receiving such salary by reason of the fact that he is also a Director of the Corporation.

 
 

Federated Municipal Securities Fund, Inc.

 

Amendment #15

to the By-Laws

 

Effective August 25, 2003

 

Insert the following into Article IV OFFICERS and renumber Section 14 as Section 15:

 

 

Section 14. CHIEF LEGAL OFFICER. The Chief Legal Officer shall serve as Chief Legal Officer for the Corporation, solely for the purposes of complying with the attorney conduct rules (“Attorney Conduct Rules”) enacted by the Securities Exchange Commission pursuant to Section 307 of the Sarbanes-Oxley Act of 2002 (the “Act”). The Chief Legal Officer shall have the authority to exercise all powers permitted to be exercised by a chief legal officer pursuant to Section 307 of the Act. The Chief Legal Officer, in his sole discretion, may delegate his responsibilities as Chief Legal Officer under the Attorney Conduct Rules to another attorney or firm of attorneys.

 
 

Federated Municipal Securities Fund, Inc.

 

Amendment #16

to the By-Laws

 

Effective September 15, 2004

 

Insert the following into Article IV, OFFICERS and renumber Section 15 as Section 16:

 

Section 15. CHIEF COMPLIANCE OFFICER. The Chief Compliance Officer shall be responsible for administering the Corporation’s policies and procedures approved by the Board under Rule 38a-1 of the Investment Company Act of 1940, as amended. Notwithstanding any other provision of these By-Laws, the designation, removal and compensation of Chief Compliance Officer are subject to Rule 38a01 under the Investment Company Act of 1940, as amended.

 
 

Federated Municipal Securities Fund, Inc.

 

Amendment #17

to the By-Laws

 

Effective August 18, 2005

 

 

Delete ARTICLE IX, INDEMNIFICATION in its entirety and replace with the following:

 

ARTICLE IX

INDEMNIFICATION

 

Section 1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Corporation shall indemnify its directors to the fullest extent that indemnification of directors is permitted by the Maryland General Corporation Law. The Corporation shall indemnify its officers to the same extent as its directors and to such further extent as is consistent with law. The Corporation shall indemnify its directors and officers who while serving as directors or officers also serve at the request of the Corporation as a director, officer, partner, trustee, employee, agent or fiduciary of another corporation, partnership, joint venture, trust, other enterprise or employee benefit plan to the fullest extent consistent with law. The indemnification and other rights provided by this Article shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person. This Article shall not protect any such person against any liability to the Corporation or any Shareholder thereof to which such person would otherwise be subject by reason of (i) willful misfeasance, (ii) bad faith, (iii) gross negligence or (iv) reckless disregard of the duties involved in the conduct of his office (“disabling conduct”).

 

Section 2. ACTION BY DIRECTOR AGAINST THE CORPORATION. With respect to any action, suit or other proceeding voluntarily prosecuted by any indemnitee as plaintiff, indemnification shall be mandatory only if the prosecution of such action, suit or other proceeding by such indemnitee(i) was authorized by a majority of the Directors or (ii) was instituted by the indemnitee to enforce his rights to indemnification hereunder in a case in which the indemnitee is found to be entitled to such indemnification.

 

Section 3. SURVIVAL. The rights to indemnification set forth herein shall continue as to a person who has ceased to be a Director or officer of the Corporation and shall inure to the benefit of his heirs, executors and personal and legal representatives.

 

Section 4. AMENDMENTS. References in this Article are to the Maryland General Corporation Law and to the Investment Company Act of 1940, as from time to time amended. No amendment or restatement of these by-laws or repeal of any of its provisions shall limit or eliminate any of the benefits provided to any person who at any time is or was a Director or officer of the Corporation or otherwise entitled to indemnification hereunder in respect of any act or omission that occurred prior to such amendment, restatement or repeal.

 

Section 5. PROCEDURE. Notwithstanding the foregoing, no indemnification shall be made hereunder unless there has been a determination (i) by a final decision on the merits by a court or other body of competent jurisdiction before whom the issue of entitlement to indemnification hereunder was brought that such indemnitee is entitled to indemnification hereunder or, (ii) in the absence of such a decision, by (1) a majority vote of a quorum of those Directors who are neither “interested persons” of the Corporation (as defined in Section 2(a)(19) of the 1940 Act) nor parties to the proceeding (“Disinterested Non-Party Directors”), that the indemnitee is entitled to indemnification hereunder, or (2) if such quorum is not obtainable (or even if obtainable, if such majority so directs) independent legal counsel in a written opinion concludes, based on a review of readily available facts (as opposed to a full trial-type inquiry) that the indemnitee should be entitled to indemnification hereunder. All determinations to make advance payments in connection with the expense of defending any proceeding shall be authorized and made in advance with the immediately succeeding paragraph (f) below.

 

Section 6 ADVANCES. Any current or former director or officer of the Corporation seeking indemnification within the scope of this Article shall be entitled to advances from the Corporation for payment of the reasonable expenses incurred by him in connection with the matter as to which he is seeking indemnification in the manner and to the fullest extent permissible under the Maryland General Corporation Law. The person seeking indemnification shall provide to the Corporation a written affirmation of his good faith belief that the standard of conduct necessary for indemnification by the Corporation has been met and a written undertaking to repay any such advance if it should ultimately be determined that the standard of conduct has not been met. In addition, at least one of the following additional conditions shall be met: (a) the person seeking indemnification shall provide a security in form and amount acceptable to the Corporation for his undertaking; (b) the Corporation is insured against losses arising by reason of the advance, or (c) a majority of a quorum of Disinterested Non-Party Directors, or independent legal counsel, in a written opinion, shall be determined, based on a review of facts readily available tot the Corporation at the time the advance is proposed to be made, that there is reason to believe that the person seeking indemnification will ultimately be found to be entitled to indemnification.

 

Section 7. OTHER RIGHTS. The rights accruing to any indemnitee under these provisions shall not exclude any other right which any person may have or hereafter acquire under the Articles of Incorporation or the By-Laws of the Corporation, by contract or otherwise under law, by a vote of stockholders or Directors who are “disinterested persons” (as defined in Section 2(a)(19) of the 1940 Act) or any other right to which he may be lawfully entitled.

 

Section 8. INDEMNIFICATION OF EMPLOYEES AND AGENTS. Subject to any limitations provided by the Investment Company Act of 1940 or otherwise under the Articles of Incorporation or the By-Laws of the Corporation, contract or otherwise under law, the Corporation shall have the power and authority to indemnify and provide for the advance payment of expenses to employees, agents and other persons providing services to the Corporation or serving in any capacity at the request of the Corporation to the fullest extent permitted by applicable law, provided that such indemnification has been approved by a majority of the Directors.

 
 

Federated Municipal Securities Fund, Inc.

 

Amendment #18

to the By-Laws

 

Effective January 1, 2006

 

Strike Section 1, GENERAL PROVISIONS, and Section 2, ELECTION, TERM OF OFFICE AND QUALIFICATIONS from Article IV – OFFICERS and replace with the following:

 

Section 1. GENERAL PROVISIONS. The Officers of the Corporation shall be a President, one or more Executive Vice Presidents, one or more Senior Vice Presidents, one or more Vice Presidents, a Treasurer and a Secretary. The Board of Directors, in its discretion, may elect or appoint one or more Vice Chairmen of the Board of Directors, and other Officers or agents, including one or more Assistant Vice Presidents, one or more Assistant Secretaries, and one or more Assistant Treasurers. An Executive Vice President, Senior Vice President or Vice President, the Secretary or the Treasurer may appoint an Assistant Vice President, an Assistant Secretary or an Assistant Treasurer, respectively, to serve until the next election of Officers. Two or more offices may be held by a single person except the offices of President, Executive Vice President, Senior Vice President or Vice President may not be held by the same person concurrently. It shall not be necessary for any Director or any Officer to be a holder of shares in any Series or Class of the Corporation. Any Officer, or other such person as the Board may appoint, may preside at meetings of the Shareholders.

 

Section 2. ELECTION, TERM OF OFFICE AND QUALIFICATIONS. The Officers shall be elected annually by the Board of Directors at its Annual Meeting. Each Officer shall hold office for one year and until the election and qualification of his successor, or until earlier resignation or removal.

 

Strike Section 6, CHAIRMAN OF THE BOARD, Section 7, VICE CHAIRMAN OF THE BOARD OF DIRECTORS, Section 8, PRESIDENT, and Section 9, VICE PRESIDENT, from Article IV – OFFICERS and replace with the following:

 

Section 6. CHAIRMAN OF THE BOARD OF DIRECTORS. The Board may elect from among its members a Chairman of the Board. The Chairman shall at all times be a Director who meets all applicable regulatory and other relevant requirements for serving in such capacity. The Chairman shall not be an Officer of the Corporation, but shall preside over meetings of the Board and shall have such other responsibilities in furthering the Board functions as may be assigned from time to time by the Board of Directors or prescribed by these By-Laws. It shall be understood that the election of any Director as Chairman shall not impose on that person any duty, obligation, or liability that is greater than the duties , obligations, and liabilities imposed on that person as a Director in the absence of such election, and no Director who is so elected shall be held to a higher standard of care by virtue thereof. In addition, election as Chairman shall not affect in any way that Director’s rights or entitlement to indemnification under the By-Laws or otherwise by the Corporation. The Chairman shall be elected by the Board annually to hold office until his successor shall have been duly elected and shall have qualified, or until his death, or until he shall have resigned, or have been removed, as herein provided by these By-Laws. Each Director, including the Chairman, shall have one vote.

 

Resignation. The Chairman may resign at any time by giving written notice of resignation to the Board. Any such resignation shall take effect at the time specified in such notice, or, if the time when it shall become effective shall not be specified therein, immediately upon its receipt; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

 

Removal The Chairman may be removed by majority vote of the Board with or without cause at any time.

 

Vacancy. Any vacancy in the office of Chairman, arising from any cause whatsoever, may be filled for the unexpired portion of the term of office which shall be vacant by the vote of the Board.

 

Absence. If, for any reason, the Chairman is absent from a meeting of the board, the Board may select from among its members who are present at such meeting a Director to preside over such meeting.

 

Section 7. VICE CHAIRMAN OF THE BOARD OF DIRECTORS. Any Vice Chairman shall perform such duties as may be assigned to him from time to time by the Board of Directors of the Corporation. The Vice Chairman need not be a Director.

 

Section 8. PRESIDENT. The President of the Corporation shall be the principal executive officer of the Corporation. Unless other provisions are made therefor by the Board or Executive Committee, the President without limitation, shall employ and define the duties of all employees of the Corporation, shall have the power to discharge such employees, shall exercise general supervision over the affairs of the Corporation and shall have the power to sign, in the name of and on behalf of the Corporation, powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities or other property owned by the Corporation, and may, in the name of and on behalf of the Corporation, take all such action as the President may deem advisable in entering into agreements to purchase securities and other property in the ordinary course of business, and to sign representation letters in the course of buying securities or other property and shall perform such other duties as may be assigned to him from time to time by the Board of Directors.

 

Section 9. VICE PRESIDENT. The Executive Vice President, Senior Vice President or Vice President, if any, in order of their rank as fixed by the Board or if not ranked, a Vice President designated by the Board, in the absence of the President shall perform all duties and may exercise any of the powers of the President subject to the control of the Board. Each Executive Vice President, Senior Vice President and Vice President shall have the power, without limitation, to sign, in the name of and on behalf of the Corporation, powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities or other property owned by the Corporation, and may, in the name of and on behalf of the Corporation, take all such action as the Executive Vice President, Senior Vice President or Vice President may deem advisable in entering into agreements to purchase securities or other property in the ordinary course of business, and to sign representation letters in the course of buying securities or other property and shall perform such other duties as may be assigned to him from time to time by the Board of Directors, the Executive Committee, or the President.

 
 

 

 

Amendment #19

to the By-Laws

Of

FEDERATED MUNICIPAL SECURITIES FUND, INC.

 

Effective June 1, 2013

 

Insert the following into Article VI, Agreements, Checks, Drafts, Endorsements, etc. and renumber the remaining sections accordingly:

Section 2. Delegation of Authority Relating to Dividends. The Directors may delegate to any Officer or Agent of the Corporation the ability to authorize the payment of non-stock dividends and may delegate to an Officer or Agent in accordance with that general authorization the power to fix the amount and other terms of the dividend provided that the Directors established a method or procedure for determining the maximum amount of the distribution.

 

The title of Article VI is deleted and replaced as follows: “Agreements, Certain Delegation, Checks, Drafts, Endorsements, etc.”

 

 
 

 

AMENDMENT #20

TO THE BY-LAWS
OF
FEDERATED MUNICIPAL BOND FUND

Effective August 17, 2018

Delete Article IX, Indemnification of Trustees and Officers in its entirety and replace with the following:

Article IX
Indemnification of Trustees and Officers

Section 1. Indemnification. The Trust hereby agrees to indemnify each person who at any time serves as a Trustee or officer of the Trust (each such person being an "indemnitee") against: (a) any liabilities and expenses, including amounts paid in satisfaction of judgments, in compromise or as fines and penalties, and counsel fees incurred by such indemnitee in connection with the defense or disposition of any action, suit or other proceeding, whether civil or criminal, before any court or administrative or investigative body in which he may be or may have been involved as a party or otherwise or with which he may be or may have been threatened, by virtue of his being or having been a Trustee or officer of the Trust or his serving or having served as a trustee, director, officer, partner, or fiduciary of another trust, corporation, partnership, joint venture, or other enterprise at the request of the Trust; and (b) any liabilities and expenses, including, without limitation, the cost of credit monitoring, incurred by the indemnified representative as a result of the indemnified representative, while acting in an indemnified capacity, having provided personally identifiable information, including, without limitation, birthdates, social security numbers, driver’s license numbers or passport numbers, to a regulator or counterparty by or with whom the Trust, or its series, is regulated or engages in business to satisfy a legal or procedural requirement of such regulator or counterparty, including, without limitation, know-your-customer or anti-money laundering requirements, and the security of such personally identifiable information is compromised and used to the detriment of the indemnified representative; provided, however, that, in the case of clause (a) and clause (b), no indemnitee shall be indemnified hereunder against any liability to any person or any expense of such indemnitee arising by reason of (i) willful misfeasance, (ii) bad faith, (iii) gross negligence, or (iv) reckless disregard of the duties involved in the conduct of his position (the conduct referred to in such clauses (i) through (iv) being sometimes referred to herein as "disabling conduct").

Section 2. Actions By Trustee Against The Trust. Notwithstanding the foregoing, with respect to any action, suit or other proceeding voluntarily prosecuted by any indemnitee as plaintiff, indemnification shall be mandatory only if the prosecution of such action, suit or other proceeding by such indemnitee (i) was authorized by a majority of the Trustees or (ii) was instituted by the indemnitee to enforce his rights to indemnification hereunder in a case in which the indemnitee is found to be entitled to such indemnification.

Section 3. Survival. The rights to indemnification set forth herein shall continue as to a person who has ceased to be a Trustee or officer of the Trust and shall inure to the benefit of his heirs, executors and personal and legal representatives.

Section 4. Amendments. No amendment or restatement of these by-laws or repeal of any of its provisions shall limit or eliminate any of the benefits provided to any person who at any time is or was a Trustee or officer of the Trust or otherwise entitled to indemnification hereunder in respect of any act or omission that occurred prior to such amendment, restatement or repeal.

Section 5. Procedure. Notwithstanding the foregoing, no indemnification shall be made hereunder unless there has been a determination (i) by a final decision on the merits by a court or other body of competent jurisdiction before whom the issue of entitlement to indemnification hereunder was brought that such indemnitee is entitled to indemnification hereunder or, (ii) in the absence of such a decision, by (1) a majority vote of a quorum of those Trustees who are neither "interested persons" of the Trust (as defined in Section 2(a)(19) of the 1940 Act) nor parties to the proceeding ("Disinterested Non-Party Trustees"), that the indemnitee is entitled to indemnification hereunder, or (2) if such quorum is not obtainable (or even if obtainable, if such majority so directs) independent legal counsel in a written opinion concludes, based on a review of readily available facts (as opposed to a full trial-type inquiry) that the indemnitee should be entitled to indemnification hereunder. All determinations to make advance payments in connection with the expense of defending any proceeding shall be authorized and made in accordance with the immediately succeeding paragraph (f) below.

Section 6. Advances. The Trust shall make advance payments in connection with the expenses of defending any action or other matter with respect to which indemnification might be sought hereunder if the Trust receives a written undertaking to reimburse the Trust if it is subsequently determined that the indemnitee is not entitled to such indemnification. In addition, at least one of the following conditions must be met: (i) the indemnitee shall provide adequate security for his undertaking, (ii) the Trust shall be insured against losses arising by reason of any lawful advances, or (iii) a majority of a quorum of the Disinterested Non-Party Trustees, or independent legal counsel in a written opinion, shall conclude, based on a review of readily available facts (as opposed to a full trial-type inquiry), that there is reason to believe that the indemnitee ultimately will be found entitled to indemnification.

Section 7. Other Rights. The rights accruing to any indemnitee under these provisions shall not exclude any other right which any person may have or hereafter acquire under the Declaration of Trust or the by-laws of the Trust, by contract or otherwise under law, by a vote of shareholders or Trustees who are "disinterested persons" (as defined in Section 2(a)(19) of the 1940 Act) or any other right to which he may be lawfully entitled.

Section 8. Indemnification Of Employees And Agents. Subject to any limitations provided by the Investment Company Act of 1940 Act or otherwise under the Declaration of Trust or the by-laws of the Trust, contract or otherwise under law, the Trust shall have the power and authority to indemnify and provide for the advance payment of expenses to employees, agents and other persons providing services to the Trust or serving in any capacity at the request of the Trust to the full extent permitted by applicable law, provided that such indemnification has been approved by a majority of the Trustees.

 

 

 

 

 

 EX-99.ADVISOR K 9 ex28dadv.htm EXHIBIT (10) UNDER ITEM 601/REG. S-K

Exhibit 28 (d) under Form N-1A

Exhibit (10) under Item 601/Reg. S-K

 

 

 

7/27/17-Fund name changed to Federated Municipal Bond Fund, Inc.

3/31/99- Adviser name changed to Federated Investment Management Company

4/4/96 - Fund name changed to Federated Municipal Securities Fund, Inc.

1/6/93 - Fund name changed to Liberty Municipal Securities Fund, Inc.

 

FEDERATED TAX-FREE INCOME FUND, INC.

INVESTMENT ADVISORY CONTRACT

This Contract is made between FEDERATED ADVISERS, a Delaware business trust having its principal place of business in Pittsburgh, Pennsylvania (hereinafter referred to as “Adviser”), and FEDERATED TAX-FREE INCOME FUND, INC., a Maryland corporation having its principal place of business in Pittsburgh, Pennsylvania (hereinafter referred to as the “Fund”), and is based on the following premises:

(a)       That the Fund is an open-end management investment company as that term is defined in the Investment Company Act of 1940 and is registered as such with the Securities and Exchange Commission;

(b)       That Adviser is engaged in the business of rendering investment advisory services.

NOW, THEREFORE, the parties hereto, intending to be legally bound hereby agree as follows:

1.       The Fund hereby appoints Adviser as investment adviser and Adviser accepts the appointment. Subject to the direction of the Directors of the Fund, Adviser shall provide investment research and supervision of the investments of the Fund and conduct a continuous program of investment evaluation and of appropriate sale or other disposition and reinvestment of the Fund’s portfolio.

2.       Adviser, in its supervision of the investments of the Fund, will be guided by the Fund’s fundamental investment policies and the provisions and restrictions contained in the Charter and By-Laws of the Fund and as set forth in the Registration Statements and exhibits as may be on file with the Securities and Exchange Commission.

3.       The Fund shall pay all of its expenses, including, without limitation, the expenses of organizing the Fund and continuing its existence; fees and expenses of Directors; fees for investment advisory services and administrative personnel and services; fees and expenses of preparing and printing its Registration Statements under the Securities Act of 1933 and the Investment Company Act of 1940 and any amendments thereto; expenses of registering and qualifying the Fund and its Shares under Federal and state laws and regulations; expenses of preparing, printing, and distributing prospectuses and any amendments to Shareholders; interest expense, taxes, fees and commissions of every kind; expenses of issue (including cost of stock certificates), 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 Shareholders and proxy solicitations therefor; insurance expense; association membership dues and such nonrecurring items as may arise, including all losses and liabilities incurred in administering the Fund. The Fund will also pay such extraordinary expenses as may arise, including expenses incurred in connection with litigation, proceedings and claims and the legal obligations of the Fund to indemnify its Officers and Directors and agents with respect thereto.

4.       For all services rendered by Adviser hereunder, the Fund shall pay to Adviser and Adviser agrees to accept as full compensation for all services rendered hereunder, an annual investment advisory fee equal to 0.3 of 1% of the average daily net assets of the Fund plus 4.5% of the gross income of the Fund (excluding any capital gains or losses). Gross income will include, in general, interest accrued (including discount earned on short-term obligations), adjusted for amortization of premium or discount on bonds when required for Federal income tax purposes.

5.       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 0.3 of 1% applied to the daily net assets of the Fund computed as of the close of the New York Stock Exchange on each day on which the Exchange is open and, in the case of Sundays and other days on which said Exchange shall not be open, as of the close of the last preceding day on which the Exchange shall have been open.

The portion of the fee based upon gross income shall be accrued daily at the rate of 4.5% of the gross income of the Fund.

The fee so accrued shall be paid to Adviser daily.

6.       The net asset value of Fund Shares as used herein will be calculated to the nearest 1/10th of one cent.

7.       The Adviser may from time to time and for such periods as it deems appropriate reduce its compensation (and, if appropriate, assume expenses of the Fund) to the extent that the Fund’s expenses exceed such lower expense limitation as the Adviser may, by notice to the Fund, voluntarily declare to be effective.

8.       The term of this Contract shall begin on the date of its execution and shall continue in effect for two years from its execution and from year to year thereafter, subject to the provisions for termination and all of the other terms and conditions hereof if: (a) such continuation shall be specifically approved at least annually by the vote of a majority of the Directors of the Fund, including a majority of the Directors who are not parties to this Contract or interested persons of any such party (other than as Directors of the Fund), cast in person at a meeting called for that purpose; and (b) Adviser shall not have notified the 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.

9.       Notwithstanding any provision in this Contract, it may be terminated at any time, without the payment of any penalty, by the Directors of the Fund or by a vote of a majority of the outstanding voting securities of the Fund on sixty (60) days’ written notice to Adviser.

10.       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.

11.       In the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of obligations or duties under this Contract on the part of Adviser, Adviser shall not be liable to the Fund or 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.

12.       This Contract may be amended at any time by agreement of the parties, provided that the amendment shall be approved both by the vote of a majority of the Directors of the Fund, including a majority of Directors who are not parties to this Contract or interested persons of any such party to this Contract (other than as Directors of the Fund), cast in person at a meeting called for that purpose, and by vote of a majority of the outstanding voting securities of the Fund.

13.       The Fund is hereby expressly put on notice of the limitation of liability as set forth in the Declaration of Trust of the Adviser and agrees that the obligations assumed by the Adviser pursuant to this Contract 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, the Fund 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 Investors has reserved the right to grant the non-exclusive use of the name “Federated” or any derivative thereof to any other investment company, investment adviser, distributor or other business enterprise, and to withdraw from the Fund the use of the name “Federated.” In the event that Federated Investors should elect to withdraw the use of the name “Federated” from the Fund, the Fund will submit the question of continuing the Contract to a vote of its Shareholders.

15.       This Contract shall be construed in accordance with and governed by the laws of the Commonwealth of Pennsylvania.

Witness the due execution hereof this 1st day of August, 1989.

Attest: FEDERATED ADVISERS
   
/s/ John W. McGonigle By:  /s/ Mark Mallon
Secretary Executive Vice President
   
Attest: FEDERATED TAX-FREE INCOME
  FUND, INC.
   
/s/  John W. McGonigle By:  /s/ J. Christopher Donahue
Secretary President
 
 

 

Amendment to

Investment Advisory Contract

between

Federated Municipal Securities Fund, Inc.

and

Federated Investment Management Company

 

This Amendment to the Investment Advisory Contract (“Agreement”) dated August 1, 1989, between Federated Municipal Securities Fund, Inc. (“Fund”) and Federated Investment Management Company (“Service Provider”) is made and entered into as of the 1st day of June, 2001.

 

WHEREAS, the Fund has entered into the Agreement with the Service Provider;

 

WHEREAS, the Securities and Exchange Commission has adopted Regulation S-P at 17 CFR Part 248 to protect the privacy of individuals who obtain a financial product or service for personal, family or household use;

 

WHEREAS, Regulation S-P permits financial institutions, such as the Fund, to disclose ”nonpublic personal information” (“NPI”) of its “customers” and “consumers” (as those terms are therein defined in Regulation S-P) to affiliated and nonaffiliated third parties of the Fund, without giving such customers and consumers the ability to opt out of such disclosure, for the limited purposes of processing and servicing transactions (17 CFR § 248.14) (“Section 248.14 NPI”); for specified law enforcement and miscellaneous purposes (17 CFR § 248.15) (“Section 248.15 NPI”) ; and to service providers or in connection with joint marketing arrangements (17 CFR § 248.13) (“Section 248.13 NPI”);

 

WHEREAS, Regulation S-P provides that the right of a customer and consumer to opt out of having his or her NPI disclosed pursuant to 17 CFR § 248.7 and 17 CFR § 248.10 does not apply when the NPI is disclosed to service providers or in connection with joint marketing arrangements, provided the Fund and third party enter into a contractual agreement that prohibits the third party from disclosing or using the information other than to carry out the purposes for which the Fund disclosed the information (17 CFR § 248.13);

 

NOW, THEREFORE, the parties intending to be legally bound agree as follows:

 

The Fund and the Service Provider hereby acknowledge that the Fund may disclose shareholder NPI to the Service Provider as agent of the Fund and solely in furtherance of fulfilling the Service Provider’s contractual obligations under the Agreement in the ordinary course of business to support the Fund and its shareholders.

 
 

 

The Service Provider hereby agrees to be bound to use and redisclose such NPI only for the limited purpose of fulfilling its duties and obligations under the Agreement, for law enforcement and miscellaneous purposes as permitted in 17 CFR §§ 248.15, or in connection with joint marketing arrangements that the Funds may establish with the Service Provider in accordance with the limited exception set forth in 17 CFR § 248.13.

 

The Service Provider further represents and warrants that, in accordance with 17 CFR § 248.30, it has implemented, and will continue to carry out for the term of the Agreement, policies and procedures reasonably designed to:

·insure the security and confidentiality of records and NPI of Fund customers,
·protect against any anticipated threats or hazards to the security or integrity of Fund customer records and NPI, and
·protect against unauthorized access to or use of such Fund customer records or NPI that could result in substantial harm or inconvenience to any Fund customer.

 

4. The Service Provider may redisclose Section 248.13 NPI only to: (a) the Funds and affiliated persons of the Funds (“Fund Affiliates”); (b) affiliated persons of the Service Provider (“Service Provider Affiliates”) (which in turn may disclose or use the information only to the extent permitted under the original receipt); (c) a third party not affiliated with the Service Provider of the Funds (“Nonaffiliated Third Party”) under the service and processing (§248.14) or miscellaneous (§248.15) exceptions, but only in the ordinary course of business to carry out the activity covered by the exception under which the Service Provider received the information in the first instance; and (d) a Nonaffiliated Third Party under the service provider and joint marketing exception (§248.13), provided the Service Provider enters into a written contract with the Nonaffiliated Third Party that prohibits the Nonaffiliated Third Party from disclosing or using the information other than to carry out the purposes for which the Funds disclosed the information in the first instance.

 

5. The Service Provider may redisclose Section 248.14 NPI and Section 248.15 NPI to: (a) the Funds and Fund Affiliates; (b) Service Provider Affiliates (which in turn may disclose the information to the same extent permitted under the original receipt); and (c) a Nonaffiliated Third Party to whom the Funds might lawfully have disclosed NPI directly.

 

6.The Service Provider is obligated to maintain beyond the termination date of the Agreement the confidentiality of any NPI it receives from the Fund in connection with the Agreement or any joint marketing arrangement, and hereby agrees that this Amendment shall survive such termination.

 

 

 
 

WITNESS the due execution hereof this 1st day of June, 2001.

 

Federated Municipal Securities Fund, Inc.

 

By: /s/ J. Christopher Donahue

Name: J. Christopher Donahue

Title: President

 

 

Federated Investment Management Company

 

 

By: /s/ G. Andrew Bonnewell

Name: G. Andrew Bonnewell

Title: Vice President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIMITED POWER OF ATTORNEY

 

KNOW ALL MEN BY THESE PRESENTS, dated as of June 1, 2017, that Federated Municipal Securities Fund, Inc., a corporation duly organized under the laws of the state of Maryland (the “Corporation”), does hereby nominate, constitute and appoint the Federated Investment Management Company, a business trust duly organized under the laws of the state of Delaware (the "Adviser"), to act hereunder as the true and lawful agent and attorney-in-fact of the Corporation, acting on behalf of each of the series portfolios of the Corporation for which the Adviser provides advisory services and acts as investment adviser as of the date of this limited power attorney and for such series portfolios that may be established by the Corporation in the future from time to (each such series portfolio being hereinafter referred to as a "Fund" and collectively as the "Funds"), for the specific purpose of executing and delivering all such agreements, instruments, contracts, assignments, bond powers, stock powers, transfer instructions, receipts, waivers, consents and other documents, and performing all such acts, as the Adviser may deem necessary or reasonably desirable, related to the acquisition, disposition and/or reinvestment of the funds and assets of a Fund of the Corporation in accordance with Adviser's supervision of the investment, sale and reinvestment of the funds and assets of each Fund pursuant to the authority granted to the Adviser as investment adviser of each Fund under that certain investment advisory contract dated August 1, 1989 by and between the Adviser and the Corporation (such investment advisory contract, as may be amended, supplemented or otherwise modified from time to time is hereinafter referred to as the "Investment Advisory Contract").

 

The Adviser shall exercise or omit to exercise the powers and authorities granted herein in each case as the Adviser in its sole and absolute discretion deems desirable or appropriate under existing circumstances. The Corporation hereby ratifies and confirms as good and effectual, at law or in equity, all that the Adviser, and its officers and employees, may do by virtue hereof. However, despite the above provisions, nothing herein shall be construed as imposing a duty on the Adviser to act or assume responsibility for any matters referred to above or other matters even though the Adviser may have power or authority hereunder to do so. Nothing in this Limited Power of Attorney shall be construed (i) to be an amendment or modifications of, or supplement to, the Investment Advisory Contract, (ii) to amend, modify, limit or denigrate any duties, obligations or liabilities of the Adviser under the terms of the Investment Advisory Contract or (iii) exonerate, relieve or release the Adviser any losses, obligations, penalties, actions, judgments and suits and other costs, expenses and disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Adviser (x) under the terms of the Investment Advisory Contract or (y) at law, or in equity, for the performance of its duties as the investment adviser of any of the Funds.

 

The Corporation hereby agrees to indemnify and save harmless the Adviser and its Directors, officers and employees (each of the foregoing an "Indemnified Party" and collectively the "Indemnified Parties") against and from any and all losses, obligations, penalties, actions, judgments and suits and other costs, expenses and disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against an Indemnified Party, other than as a consequence of gross negligence or willful misconduct on the part of an Indemnified Party, arising out of or in connection with this Limited Power of Attorney or any other agreement, instrument or document executed in connection with the exercise of the authority granted to the Adviser herein to act on behalf of the Corporation, including without limitation the reasonable costs, expenses and disbursements in connection with defending such Indemnified Party against any claim or liability related to the exercise or performance of any of the Adviser's powers or duties under this Limited Power of Attorney or any of the other agreements, instruments or documents executed in connection with the exercise of the authority granted to the Adviser herein to act on behalf of the Corporation, or the taking of any action under or in connection with any of the foregoing. The obligations of the Corporation under this paragraph shall survive the termination of this Limited Power of Attorney with respect to actions taken by the Adviser on behalf of the Corporation during the term of this Limited Power of Attorney. No Fund shall have any joint or several obligation with any other Fund to reimburse or indemnify an Indemnified Party for any action, event, matter or occurrence performed or omitted by or on behalf of the Adviser in its capacity as agent or attorney-in-fact of Corporation acting on behalf of any other Fund hereunder.

 

Any person, partnership, Corporation or other legal entity dealing with the Adviser in its capacity as attorney-in-fact hereunder for the Corporation is hereby expressly put on notice that the Adviser is acting solely in the capacity as an agent of the Corporation and that any such person, partnership, Corporation or other legal entity must look solely to the Corporation in question for enforcement of any claim against the Corporation, as the Adviser assumes no personal liability whatsoever for obligations of the Corporation entered into by the Adviser in its capacity as attorney-in-fact for the Corporation.

 

Each person, partnership, Corporation or other legal entity which deals with a Fund of the Corporation through the Adviser in its capacity as agent and attorney-in-fact of the Corporation, is hereby expressly put on notice (i) that all persons or entities dealing with the Corporation must look solely to the assets of the Fund of the Corporation on whose behalf the Adviser is acting pursuant to its powers hereunder for enforcement of any claim against the Corporation, as the Directors, officers and/or agents of such Corporation, the shareholders of the various classes of shares of the Corporation and the other Funds of the Corporation assume no personal liability whatsoever for obligations entered into on behalf of such Fund of the Corporation, and (ii) that the rights, liabilities and obligations of any one Fund are separate and distinct from those of any other Fund of the Corporation.

 

The execution of this Limited Power of Attorney by the Corporation acting on behalf of the several Funds shall not be deemed to evidence the existence of any express or implied joint undertaking or appointment by and among any or all of the Funds. Liability for or recourse under or upon any undertaking of the Adviser pursuant to the power or authority granted to the Adviser under this Limited Power of Attorney under any rule of law, statute or constitution or by the enforcement of any assessment or penalty or by legal or equitable proceedings or otherwise shall be limited only to the assets of the Fund of the Corporation on whose behalf the Adviser was acting pursuant to the authority granted hereunder.

 

The Corporation hereby agrees that no person, partnership, Corporation or other legal entity dealing with the Adviser shall be bound to inquire into the Adviser's power and authority hereunder and any such person, partnership, Corporation or other legal entity shall be fully protected in relying on such power or authority unless such person, partnership, Corporation or other legal entity has received prior written notice from the Corporation that this Limited Power of Attorney has been revoked. This Limited Power of Attorney shall be revoked and terminated automatically upon the cancellation or termination of the Investment Advisory Contract between the Corporation and the Adviser. Except as provided in the immediately preceding sentence, the powers and authorities herein granted may be revoked or terminated by the Corporation at any time provided that no such revocation or termination shall be effective until the Adviser has received actual notice of such revocation or termination in writing from the Corporation.

 

This Limited Power of Attorney constitutes the entire agreement between the Corporation and the Adviser, may be changed only by a writing signed by both of them, and shall bind and benefit their respective successors and assigns; provided, however, the Adviser shall have no power or authority hereunder to appoint a successor or substitute attorney in fact for the Corporation.

 

This Limited Power of Attorney shall be governed and construed in accordance with the laws of the Commonwealth of Pennsylvania without reference to principles of conflicts of laws. Without limiting any other authority expressly granted hereunder, for purposes of Pennsylvania law, this Limited Power of Attorney shall be deemed to constitute a power used in a commercial transaction which authorizes an agency relationship which is exclusively granted to facilitate transfer of stock, bonds and other assets and which may be exercised independently of any other agent designated by the Corporation and includes, but is not limited to, the power to engage in stock, bond and other securities transactions as specified by 20 Pa.C.S. § 5603(k). The authority granted to the Adviser by this Limited Power of Attorney may be delegated by the Adviser to one or more successor agents or subadvisors, or to other persons the Adviser in its sole discretion determines are appropriate or necessary. If any provision hereof, or any power or authority conferred upon the Adviser herein, would be invalid or unexercisable under applicable law, then such provision, power or authority shall be deemed modified to the extent necessary to render it valid or exercisable while most nearly preserving its original intent, and no provision hereof, or power or authority conferred upon the Adviser herein, shall be affected by the invalidity or the non-exercisability of another provision hereof, or of another power or authority conferred herein.

 

This Limited Power of Attorney may be executed in as many identical counterparts as may be convenient and by the different parties hereto on separate counterparts. This Limited Power of Attorney shall become binding on the Corporation when the Corporation shall have executed at least one counterpart and the Adviser shall have accepted its appointment by executing this Limited Power of Attorney. Immediately after the execution of a counterpart original of this Limited Power of Attorney and solely for the convenience of the parties hereto, the Corporation and the Adviser will execute sufficient counterparts so that the Adviser shall have a counterpart executed by it and the Corporation, and the Corporation shall have a counterpart executed by the Corporation and the Adviser. Each counterpart shall be deemed an original and all such taken together shall constitute but one and the same instrument, and it shall not be necessary in making proof of this Limited Power of Attorney to produce or account for more than one such counterpart.

 

IN WITNESS WHEREOF, the Corporation has caused this Limited Power of Attorney to be executed by its duly authorized officer as of the date first written above.

 

Federated Municipal Securities Fund, Inc.

By: /s/ J. Christopher Donahue

Name:       J. Christopher Donahue

Title: President

Accepted and agreed to this June 1, 2017

 

Federated Investment Management Company

 

 

By:/s/ John B. Fisher

Name: John B. Fisher

Title: President & CEO

 

 

 

 

 

 

 

 EX-99.DISTRIB K 10 ex28e1dis.htm EXHIBIT (1) UNDER ITEM 601/REG. S-K

Exhibit 28 (e) (1) under Form N-1A

Exhibit (1) under Item 601/Reg. S-K

 

 

 

7/27/2017 – Name changed to Federated Municipal Bond Fund, Inc.

3/31/96 - Name changed to Federated Municipal Securities Fund, Inc.

 

 

LIBERTY MUNICIPAL SECURITIES FUND, INC.

DISTRIBUTOR'S CONTRACT

 

AGREEMENT made this 1st day of March, 1993, by and between LIBERTY MUNICIPAL SECURITIES FUND, INC. (the “Corporation”), a Maryland Corporation, and FEDERATED SECURITIES CORP. ("FSC"), a Pennsylvania Corporation.

 

In consideration of the mutual covenants hereinafter contained, it is hereby agreed by and between the parties hereto as follows:

 

1.       The Corporation hereby appoints FSC as its agent to sell and distribute shares of the Corporation which may be offered in one or more series (the "Funds") consisting of one or more classes (the "Classes") of shares (the "Shares"), as described and set forth on one or more exhibits to this Agreement, at the current offering price thereof as described and set forth in the current Prospectuses of the Corporation. FSC hereby accepts such appointment and agrees to provide such other services for the Corporation, if any, and accept such compensation from the Corporation, if any, as set forth in the applicable exhibit to this Agreement.

 

2.       The sale of any Shares may be suspended without prior notice whenever in the judgment of the Corporation it is in its best interest to do so.

 

3.       Neither FSC nor any other person is authorized by the Corporation to give any information or to make any representation relative to any Shares other than those contained in the Registration Statement, Prospectuses, or Statements of Additional Information ("SAIs") filed with the Securities and Exchange Commission, as the same may be amended from time to time, or in any supplemental information to said Prospectuses or SAIs approved by the Corporation. FSC agrees that any other information or representations other than those specified above which it or any dealer or other person who purchases Shares through FSC may make in connection with the offer or sale of Shares, shall be made entirely without liability on the part of the Corporation. No person or dealer, other than FSC, is authorized to act as agent for the Corporation for any purpose. FSC agrees that in offering or selling Shares as agent of the Corporation, it will, in all respects, duly conform to all applicable state and federal laws and the rules and regulations of the National Association of Securities Dealers, Inc., including its Rules of Fair Practice. FSC will submit to the Corporation copies of all sales literature before using the same and will not use such sales literature if disapproved by the Corporation.

 

4.       This Agreement is effective with respect to each Class as of the date of execution of the applicable exhibit and shall continue in effect with respect to each Class presently set forth on an exhibit and any subsequent Classes added pursuant to an exhibit during the initial term of this Agreement for one year from the date set forth above, and thereafter for successive periods of one year if such continuance is approved at least annually by the Directors of the Corporation including a majority of the members of the Board of Directors of the Corporation who are not interested persons of the Corporation and have no direct or indirect financial interest in the operation of any Distribution Plan relating to the Corporation or in any related documents to such Plan (“Disinterested Directors”) cast in person at a meeting called for that purpose. If a Class is added after the first annual approval by the Directors as described above, this Agreement will be effective as to that Class upon execution of the applicable exhibit and will continue in effect until the next annual approval of this Agreement by the Directors and thereafter for successive periods of one year, subject to approval as described above.

 

5.       This Agreement may be terminated with regard to a particular Fund or Class at any time, without the payment of any penalty, by the vote of a majority of the Disinterested Directors or by a majority of the outstanding voting securities of the particular Fund or Class on not more than sixty (60) days' written notice to any other party to this Agreement. This Agreement may be terminated with regard to a particular Fund or Class by FSC on sixty (60) days' written notice to the Corporation.

 

6.       This Agreement may not be assigned by FSC and shall automatically terminate in the event of an assignment by FSC as defined in the Investment Company Act of 1940, as amended, provided, however, that FSC may employ such other person, persons, corporation or corporations as it shall determine in order to assist it in carrying out its duties under this Agreement.

 

7.       FSC shall not be liable to the Corporation for anything done or omitted by it, except acts or omissions involving willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties imposed by this Agreement.

 

8.       This Agreement may be amended at any time by mutual agreement in writing of all the parties hereto, provided that such amendment is approved by the Directors of the Corporation including a majority of the Disinterested Directors of the Corporation cast in person at a meeting called for that purpose.

 

9.       This Agreement shall be construed in accordance with and governed by the laws of the Commonwealth of Pennsylvania.

 

10. (a) Subject to the conditions set forth below, the Corporation agrees to indemnify and hold harmless FSC and each person, if any, who controls FSC within the meaning of Section 15 of the Securities Act of 1933 and Section 20 of the Securities Act of 1934, as amended, against any and all loss, liability, claim, damage and expense whatsoever (including but not limited to any and all expenses whatsoever reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever) arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, any Prospectuses or SAIs (as from time to time amended and supplemented) or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, unless such statement or omission was made in reliance upon and in conformity with written information furnished to the Corporation about FSC by or on behalf of FSC expressly for use in the Registration Statement, any Prospectuses and SAIs or any amendment or supplement thereof.

 

If any action is brought against FSC or any controlling person thereof with respect to which indemnity may be sought against the Corporation pursuant to the foregoing paragraph, FSC shall promptly notify the Corporation in writing of the institution of such action and the Corporation shall assume the defense of such action, including the employment of counsel selected by the Corporation and payment of expenses. FSC or any such controlling person thereof shall have the right to employ separate counsel in any such case, but the fees and expenses of such counsel shall be at the expense of FSC or such controlling person unless the employment of such counsel shall have been authorized in writing by the Corporation in connection with the defense of such action or the Corporation shall not have employed counsel to have charge of the defense of such action, in any of which events such fees and expenses shall be borne by the Corporation. Anything in this paragraph to the contrary notwithstanding, the Corporation shall not be liable for any settlement of any such claim of action effected without its written consent. The Corporation agrees promptly to notify FSC of the commencement of any litigation or proceedings against the Corporation or any of its officers or Directors or controlling persons in connection with the issue and sale of Shares or in connection with the Registration Statement, Prospectuses, or SAIs.

 

(b)        FSC agrees to indemnify and hold harmless the Corporation, each of its Directors, each of its officers who have signed the Registration Statement and each other person, if any, who controls the Corporation within the meaning of Section 15 of the Securities Act of 1933, but only with respect to statements or omissions, if any, made in the Registration Statement or any Prospectus, SAI, or any amendment or supplement thereof in reliance upon, and in conformity with, information furnished to the Corporation about FSC by or on behalf of FSC expressly for use in the Registration Statement or any Prospectus, SAI, or any amendment or supplement thereof. In case any action shall be brought against the Corporation or any other person so indemnified based on the Registration Statement or any Prospectus, SAI, or any amendment or supplement thereof, and with respect to which indemnity may be sought against FSC, FSC shall have the rights and duties given to the Corporation, and the Corporation and each other person so indemnified shall have the rights and duties given to FSC by the provisions of subsection (a) above.

 

(c)       Nothing herein contained shall be deemed to protect any person against liability to the Corporation or its shareholders to which such person would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of the duties of such person or by reason of the reckless disregard by such person of the obligations and duties of such person under this Agreement.

 

(d)       Insofar as indemnification for liabilities may be permitted pursuant to Section 17 of the Investment Company Act of 1940, as amended, for Directors, officers, FSC and controlling persons of the Corporation by the Corporation pursuant to this Agreement, the Corporation is aware of the position of the Securities and Exchange Commission as set forth in the Investment Company Act Release No. IC-11330. Therefore, the Corporation undertakes that in addition to complying with the applicable provisions of this Agreement, in the absence of a final decision on the merits by a court or other body before which the proceeding was brought, that an indemnification payment will not be made unless in the absence of such a decision, a reasonable determination based upon factual review has been made (i) by a majority vote of a quorum of non-party Disinterested Directors, or (ii) by independent legal counsel in a written opinion that the indemnitee was not liable for an act of willful misfeasance, bad faith, gross negligence or reckless disregard of duties. The Corporation further undertakes that advancement of expenses incurred in the defense of a proceeding (upon undertaking for repayment unless it is ultimately determined that indemnification is appropriate) against an officer, Director, FSC or controlling person of the Corporation will not be made absent the fulfillment of at least one of the following conditions: (i) the indemnitee provides security for his undertaking; (ii) the Corporation is insured against losses arising by reason of any lawful advances; or (iii) a majority of a quorum of non-party Disinterested Directors or independent legal counsel in a written opinion makes a factual determination that there is reason to believe the indemnitee will be entitled to indemnification.

 

11.       If at any time the Shares of any Fund are offered in two or more Classes, FSC agrees to adopt compliance standards as to when a class of shares may be sold to particular investors.

 

12.       This Agreement will become binding on the parties hereto upon the execution of the attached exhibits to the Agreement.

 
 

 

3/31/96 - Name changed to Federated Municipal Securities Fund, Inc.

 

Exhibit A

to the

Distributor's Contract

 

Liberty Municipal Securities Fund, Inc.

 

Class A Shares

 

 

In consideration of the mutual covenants set forth in the Distributor's Contract dated March 1, 1993, between Liberty Municipal Securities Fund, Inc. and Federated Securities Corp., Liberty Municipal Securities Fund, Inc. executes and delivers this Exhibit on behalf of the Funds, and with respect to the Class of Shares thereof, first set forth in this Exhibit.

 

 

Witness the due execution hereof this 1st day of March, 1993.

 

 

 

ATTEST: LIBERTY MUNICIPAL SECURITIES
  FUND, INC.
   
   
   
/s/ John W. McGonigle By: /s/J. Christopher Donahue
Secretary President
(SEAL)  
   
ATTEST: FEDERATED SECURITIES CORP.
   
   
/s/ S. Elliott Cohan By: /s/ John A. Staley, IV
Secretary Executive Vice President
(SEAL)  
 
 

 

7/27/17 – Name changed to Federated Municipal Bond Fund, Inc.

3/31/96 - Name changed to Federated Municipal Securities Fund, Inc.

 

Exhibit B

to the

Distributor's Contract

 

LIBERTY MUNICIPAL SECURITIES FUND, INC.

 

Class C Shares

 

The following provisions are hereby incorporated and made part of the Distributor's Contract dated the 1st day of March, 1993, between Liberty Municipal Securities Fund, Inc. and Federated Securities Corp. with respect to Class of the Fund set forth above.

 

1.       The Corporation hereby appoints FSC to engage in activities principally intended to result in the sale of shares of the above-listed Classes ("Shares"). Pursuant to this appointment, FSC is authorized to select a group of brokers ("Brokers") to sell Shares at the current offering price thereof as described and set forth in the respective prospectuses of the Corporation, and to render administrative support services to the Corporation and its shareholders. In addition, FSC is authorized to select a group of administrators ("Administrators") to render administrative support services to the Corporation and its shareholders.

 

2.       Administrative support services may include, but are not limited to, the following functions: 1) account openings: the Broker or Administrator communicates account openings via computer terminals located on the Broker's or Administrator's premises; 2) account closings: the Broker or Administrator communicates account closings via computer terminals; 3) enter purchase transactions: purchase transactions are entered through the Broker's or Administrator's own personal computer or through the use of a toll-free telephone number; 4) enter redemption transactions: Broker or Administrator enters redemption transactions in the same manner as purchases; 5) account maintenance: Broker or Administrator provides or arranges to provide accounting support for all transactions. Broker or Administrator also wires funds and receives funds for Corporation share purchases and redemptions, confirms and reconciles all transactions, reviews the activity in the Corporation's accounts, and provides training and supervision of its personnel; 6) interest posting: Broker or Administrator posts and reinvests dividends to the Corporation's accounts; 7) prospectus and shareholder reports: Broker or Administrator maintains and distributes current copies of prospectuses and shareholder reports; 8) advertisements: the Broker or Administrator continuously advertises the availability of its services and products; 9) customer lists: the Broker or Administrator continuously provides names of potential customers; 10) design services: the Broker or Administrator continuously designs material to send to customers and develops methods of making such materials accessible to customers; and 11) consultation services: the Broker or Administrator continuously provides information about the product needs of customers.

 

3.       During the term of this Agreement, the Corporation will pay FSC for services pursuant to this Agreement, a monthly fee computed at the annual rate of .75 of 1% of the average aggregate net asset value of the shares of the Class C Shares held during the month. For the month in which this Agreement becomes effective or terminates, there shall be an appropriate proration of any fee payable on the basis of the number of days that the Agreement is in effect during the month.

 

4.       FSC may from time-to-time and for such periods as it deems appropriate reduce its compensation to the extent any Classes' expenses exceed such lower expense limitation as FSC may, by notice to the Corporation, voluntarily declare to be effective.

 

5.       FSC will enter into separate written agreements with various firms to provide certain of the services set forth in Paragraph 1 herein. FSC, in its sole discretion, may pay Brokers and Administrators a periodic fee in respect of Shares owned from time to time by their clients or customers. The schedules of such fees and the basis upon which such fees will be paid shall be determined from time to time by FSC in its sole discretion.

 

6.       FSC will prepare reports to the Board of Directors of the Corporation on a quarterly basis showing amounts expended hereunder including amounts paid to Brokers and Administrators and the purpose for such payments.

 

In consideration of the mutual covenants set forth in the Distributor's Contract dated March 1, 1993, between Liberty Municipal Securities Fund, Inc. and Federated Securities Corp., Liberty Municipal Securities Fund, Inc. executes and delivers this Exhibit on behalf of the Funds, and with respect to the Class of Shares thereof, first set forth in this Exhibit.

 

Witness the due execution hereof this 4th day of May, 1993.

 

ATTEST: LIBERTY MUNICIPAL SECURITIES
  FUND, INC.
   
/s/ John W. McGonigle By: /s/J. Christopher Donahue
Secretary President
(SEAL)  
   
ATTEST: FEDERATED SECURITIES CORP.
   
/s/ S. Elliott Cohan By: /s/ John A. Staley, IV
Secretary Executive Vice President

(SEAL)

 
 

 

Select Shares terminated

 

Exhibit C

to the

Distributor's Contract

 

LIBERTY MUNICIPAL SECURITIES FUND, INC.

 

Select Shares

 

The following provisions are hereby incorporated and made part of the Distributor's Contract dated the 1st day of March, 1993, between Liberty Municipal Securities Fund, Inc. and Federated Securities Corp. with respect to Class of the Fund set forth above.

 

1.       The Corporation hereby appoints FSC to engage in activities principally intended to result in the sale of shares of the above-listed Classes ("Shares"). Pursuant to this appointment, FSC is authorized to select a group of brokers ("Brokers") to sell Shares at the current offering price thereof as described and set forth in the respective prospectuses of the Corporation, and to render administrative support services to the Corporation and its shareholders. In addition, FSC is authorized to select a group of administrators ("Administrators") to render administrative support services to the Corporation and its shareholders.

 

2.       Administrative support services may include, but are not limited to, the following functions: 1) account openings: the Broker or Administrator communicates account openings via computer terminals located on the Broker's or Administrator's premises; 2) account closings: the Broker or Administrator communicates account closings via computer terminals; 3) enter purchase transactions: purchase transactions are entered through the Broker's or Administrator's own personal computer or through the use of a toll-free telephone number; 4) enter redemption transactions: Broker or Administrator enters redemption transactions in the same manner as purchases; 5) account maintenance: Broker or Administrator provides or arranges to provide accounting support for all transactions. Broker or Administrator also wires funds and receives funds for Corporation share purchases and redemptions, confirms and reconciles all transactions, reviews the activity in the Corporation's accounts, and provides training and supervision of its personnel; 6) interest posting: Broker or Administrator posts and reinvests dividends to the Corporation's accounts; 7) prospectus and shareholder reports: Broker or Administrator maintains and distributes current copies of prospectuses and shareholder reports; 8) advertisements: the Broker or Administrator continuously advertises the availability of its services and products; 9) customer lists: the Broker or Administrator continuously provides names of potential customers; 10) design services: the Broker or Administrator continuously designs material to send to customers and develops methods of making such materials accessible to customers; and 11) consultation services: the Broker or Administrator continuously provides information about the product needs of customers.

 

3.       During the term of this Agreement, the Corporation will pay FSC for services pursuant to this Agreement, a monthly fee computed at the annual rate of .75 of 1% of the average aggregate net asset value of the shares of the Select Shares held during the month. For the month in which this Agreement becomes effective or terminates, there shall be an appropriate proration of any fee payable on the basis of the number of days that the Agreement is in effect during the month.

 

4.       FSC may from time-to-time and for such periods as it deems appropriate reduce its compensation to the extent any Classes' expenses exceed such lower expense limitation as FSC may, by notice to the Corporation, voluntarily declare to be effective.

 

5.       FSC will enter into separate written agreements with various firms to provide certain of the services set forth in Paragraph 1 herein. FSC, in its sole discretion, may pay Brokers and Administrators a periodic fee in respect of Shares owned from time to time by their clients or customers. The schedules of such fees and the basis upon which such fees will be paid shall be determined from time to time by FSC in its sole discretion.

 

6.       FSC will prepare reports to the Board of Directors of the Corporation on a quarterly basis showing amounts expended hereunder including amounts paid to Brokers and Administrators and the purpose for such payments.

 

In consideration of the mutual covenants set forth in the Distributor's Contract dated March 1, 1993, between Liberty Municipal Securities Fund, Inc. and Federated Securities Corp., Liberty Municipal Securities Fund, Inc. executes and delivers this Exhibit on behalf of the Funds, and with respect to the Class of Shares thereof, first set forth in this Exhibit.

 

Witness the due execution hereof this 1st day of December, 1993.

 

ATTEST: LIBERTY MUNICIPAL SECURITIES
  FUND, INC.
   
/s/ John W. McGonigle By: /s/J. Christopher Donahue
Secretary President
(SEAL)  
   
ATTEST: FEDERATED SECURITIES CORP.
   
/s/ S. Elliott Cohan By: /s/ John A. Staley, IV
Secretary Executive Vice President

(SEAL)

 
 

 

7/27/17 – Name changed to Federated Municipal Bond Fund, Inc.

10/24/97 - Exhibit superseded by Class B Shares document

 

Exhibit D

to the

Distributor's Contract

 

LIBERTY MUNICIPAL SECURITIES FUND, INC.

 

Class B Shares

 

The following provisions are hereby incorporated and made part of the Distributor's Contract dated the 1st day of March, 1993, between Liberty Municipal Securities Fund, Inc. and Federated Securities Corp. with respect to Class of the Fund set forth above.

 

1.       The Corporation hereby appoints FSC to engage in activities principally intended to result in the sale of shares of the above-listed Classes ("Shares"). Pursuant to this appointment, FSC is authorized to select a group of brokers ("Brokers") to sell Shares at the current offering price thereof as described and set forth in the respective prospectuses of the Corporation, and to render administrative support services to the Corporation and its shareholders. In addition, FSC is authorized to select a group of administrators ("Administrators") to render administrative support services to the Corporation and its shareholders.

 

2.       Administrative support services may include, but are not limited to, the following functions: 1) account openings: the Broker or Administrator communicates account openings via computer terminals located on the Broker's or Administrator's premises; 2) account closings: the Broker or Administrator communicates account closings via computer terminals; 3) enter purchase transactions: purchase transactions are entered through the Broker's or Administrator's own personal computer or through the use of a toll-free telephone number; 4) enter redemption transactions: Broker or Administrator enters redemption transactions in the same manner as purchases; 5) account maintenance: Broker or Administrator provides or arranges to provide accounting support for all transactions. Broker or Administrator also wires funds and receives funds for Corporation share purchases and redemptions, confirms and reconciles all transactions, reviews the activity in the Corporation's accounts, and provides training and supervision of its personnel; 6) interest posting: Broker or Administrator posts and reinvests dividends to the Corporation's accounts; 7) prospectus and shareholder reports: Broker or Administrator maintains and distributes current copies of prospectuses and shareholder reports; 8) advertisements: the Broker or Administrator continuously advertises the availability of its services and products; 9) customer lists: the Broker or Administrator continuously provides names of potential customers; 10) design services: the Broker or Administrator continuously designs material to send to customers and develops methods of making such materials accessible to customers; and 11) consultation services: the Broker or Administrator continuously provides information about the product needs of customers.

 

3.       During the term of this Agreement, the Corporation will pay FSC for services pursuant to this Agreement, a monthly fee computed at the annual rate of .75 of 1% of the average aggregate net asset value of the shares of the Class B Shares held during the month. For the month in which this Agreement becomes effective or terminates, there shall be an appropriate proration of any fee payable on the basis of the number of days that the Agreement is in effect during the month.

 

4.       FSC may from time-to-time and for such periods as it deems appropriate reduce its compensation to the extent any Classes' expenses exceed such lower expense limitation as FSC may, by notice to the Corporation, voluntarily declare to be effective.

 

5.       FSC will enter into separate written agreements with various firms to provide certain of the services set forth in Paragraph 1 herein. FSC, in its sole discretion, may pay Brokers and Administrators a periodic fee in respect of Shares owned from time to time by their clients or customers. The schedules of such fees and the basis upon which such fees will be paid shall be determined from time to time by FSC in its sole discretion.

 

6.       FSC will prepare reports to the Board of Directors of the Corporation on a quarterly basis showing amounts expended hereunder including amounts paid to Brokers and Administrators and the purpose for such payments.

 

In consideration of the mutual covenants set forth in the Distributor's Contract dated March 1, 1993, between Liberty Municipal Securities Fund, Inc. and Federated Securities Corp., Liberty Municipal Securities Fund, Inc. executes and delivers this Exhibit on behalf of the Funds, and with respect to the Class of Shares thereof, first set forth in this Exhibit.

 

Witness the due execution hereof this 1st day of June, 1994.

 

ATTEST: LIBERTY MUNICIPAL SECURITIES
  FUND, INC.
   
/s/ John W. McGonigle By: /s/J. Christopher Donahue
Secretary President
(SEAL)  
   
ATTEST: FEDERATED SECURITIES CORP.
   
/s/ S. Elliott Cohan By: /s/ John A. Staley, IV
Secretary Executive Vice President

(SEAL)

 
 

 

7/27/17 – Name changed to Federated Municipal Bond Fund, Inc.

 

 

Exhibit E

to the

Distributor's Contract

 

Federated Municipal Securities Fund, Inc.

Class F Shares

 

In consideration of the mutual covenants set forth in the Distributor's Contract dated March 1, 1993, between Federated Municipal Securities Fund, Inc. and Federated Securities Corp., Federated Municipal Securities Fund, Inc. executes and delivers this Exhibit on behalf of the Funds, and with respect to the Class of Shares thereof, first set forth in this Exhibit.

 

Witness the due execution hereof this 29th day of May, 2007.

 

FEDERATED MUNICIPAL SECURITIES FUND, INC.

 

By: /s/ J. Christopher Donahue

Name: J. Christopher Donahue

Title: President

 

FEDERATED SECURITIES CORP.

 

By: /s/ Thomas E. Territ

Name: Thomas E. Territ

Title: President

 
 

 

7/27/17 – Name changed to Federated Municipal Bond Fund, Inc.

 

Exhibit F

to the

Distributor's Contract

 

FEDERAED MUNICIPAL SECURITIES FUND, INC.

 

Class T Shares

 

 

The following provisions are hereby incorporated and made part of the Distributor's Contract dated the 1st day of March, 1993, between Federated Municipal Securities Fund, Inc. (the “Corporation”) and Federated Securities Corp. (“FSC”) with respect to Class of the Corporation set forth above.

 

1. 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 Corporation.

2. FSC will enter into separate written agreements with such Financial Institutions to sell Shares as set forth in Paragraph 1 herein.

In consideration of the mutual covenants set forth in the Distributor's Contract dated March 1, 1993, between the Corporation and FSC, the Corporation executes and delivers this Exhibit on behalf of the Fund, and with respect to the Class of Shares thereof, first set forth in this Exhibit.

 

Witness the due execution hereof this 1st day of March 1, 2017.

 

 

FEDERATED MUNICIPAL SECURITIES FUND, INC.

 

By: /s/ J. Christopher Donahue
Name: J. Christopher Donahue

Title: President

 

FEDERATED SECURITIES CORP.

 

By: /s/ Paul A. Uhlman

Name: Paul A. Uhlman

Title: President

 
 

 

 

Exhibit G

to the

Distributor's Contract

 

FEDERATED MUNICIPAL BOND FUND, INC.

 

Institutional Shares

In consideration of the mutual covenants set forth in the Distributor’s Contract dated March 1, 1993, between Federated Municipal Bond Fund, Inc. and Federated Securities Corp., Federated Municipal Bond Fund, Inc., executes and delivers this Exhibit with respect to the Institutional Shares thereof, first set forth in this Exhibit.

Witness the due execution hereof this 1st day of June 2017.

 

FEDERATED MUNICIPAL BOND FUND, INC.

 

By: /s/ J. Christopher Donahue

Name: J. Christopher Donahue

Title: President

 

 

 

 

 

FEDERATED SECURITIES CORP.

 

By: /s/ Paul A. Uhlman

Name: Paul A. Uhlman

Title: President

 

 
 

 

Amendment to

Distributor’s Contract

between

Federated Municipal Securities Fund, Inc.

and

Federated Securities Corp.

 

This Amendment to the Distributor’s Contract (“Agreement”) dated March 1, 1993, between Federated Municipal Securities Fund, Inc. (“Fund”) and Federated Securities Corp. (“Service Provider”) is made and entered into as of the 1st day of June, 2001.

 

WHEREAS, the Fund has entered into the Agreement with the Service Provider;

 

WHEREAS, the Securities and Exchange Commission has adopted Regulation S-P at 17 CFR Part 248 to protect the privacy of individuals who obtain a financial product or service for personal, family or household use;

 

WHEREAS, Regulation S-P permits financial institutions, such as the Fund, to disclose ”nonpublic personal information” (“NPI”) of its “customers” and “consumers” (as those terms are therein defined in Regulation S-P) to affiliated and nonaffiliated third parties of the Fund, without giving such customers and consumers the ability to opt out of such disclosure, for the limited purposes of processing and servicing transactions (17 CFR § 248.14) (“Section 248.14 NPI”); for specified law enforcement and miscellaneous purposes (17 CFR § 248.15) (“Section 248.15 NPI”) ; and to service providers or in connection with joint marketing arrangements (17 CFR § 248.13) (“Section 248.13 NPI”);

 

WHEREAS, Regulation S-P provides that the right of a customer and consumer to opt out of having his or her NPI disclosed pursuant to 17 CFR § 248.7 and 17 CFR § 248.10 does not apply when the NPI is disclosed to service providers or in connection with joint marketing arrangements, provided the Fund and third party enter into a contractual agreement that prohibits the third party from disclosing or using the information other than to carry out the purposes for which the Fund disclosed the information (17 CFR § 248.13);

 

NOW, THEREFORE, the parties intending to be legally bound agree as follows:

 

1.The Fund and the Service Provider hereby acknowledge that the Fund may disclose shareholder NPI to the Service Provider as agent of the Fund and solely in furtherance of fulfilling the Service Provider’s contractual obligations under the Agreement in the ordinary course of business to support the Fund and its shareholders.
 
 

 

2.The Service Provider hereby agrees to be bound to use and redisclose such NPI only for the limited purpose of fulfilling its duties and obligations under the Agreement, for law enforcement and miscellaneous purposes as permitted in 17 CFR §§ 248.15, or in connection with joint marketing arrangements that the Funds may establish with the Service Provider in accordance with the limited exception set forth in 17 CFR § 248.13.

 

3.The Service Provider further represents and warrants that, in accordance with 17 CFR § 248.30, it has implemented, and will continue to carry out for the term of the Agreement, policies and procedures reasonably designed to:
·insure the security and confidentiality of records and NPI of Fund customers,
·protect against any anticipated threats or hazards to the security or integrity of Fund customer records and NPI, and
·protect against unauthorized access to or use of such Fund customer records or NPI that could result in substantial harm or inconvenience to any Fund customer.

 

4. The Service Provider may redisclose Section 248.13 NPI only to: (a) the Funds and affiliated persons of the Funds (“Fund Affiliates”); (b) affiliated persons of the Service Provider (“Service Provider Affiliates”) (which in turn may disclose or use the information only to the extent permitted under the original receipt); (c) a third party not affiliated with the Service Provider of the Funds (“Nonaffiliated Third Party”) under the service and processing (§248.14) or miscellaneous (§248.15) exceptions, but only in the ordinary course of business to carry out the activity covered by the exception under which the Service Provider received the information in the first instance; and (d) a Nonaffiliated Third Party under the service provider and joint marketing exception (§248.13), provided the Service Provider enters into a written contract with the Nonaffiliated Third Party that prohibits the Nonaffiliated Third Party from disclosing or using the information other than to carry out the purposes for which the Funds disclosed the information in the first instance.

 

5. The Service Provider may redisclose Section 248.14 NPI and Section 248.15 NPI to: (a) the Funds and Fund Affiliates; (b) Service Provider Affiliates (which in turn may disclose the information to the same extent permitted under the original receipt); and (c) a Nonaffiliated Third Party to whom the Funds might lawfully have disclosed NPI directly.

 

6.The Service Provider is obligated to maintain beyond the termination date of the Agreement the confidentiality of any NPI it receives from the Fund in connection with the Agreement or any joint marketing arrangement, and hereby agrees that this Amendment shall survive such termination.

 

 
 

WITNESS the due execution hereof this 1st day of June, 2001.

 

Federated Municipal Securities Fund, Inc.

 

By: /s/ J. Christopher Donahue

Name: J. Christopher Donahue

Title: President

 

 

Federated Securities Corp.

 

 

By: /s/ David M. Taylor

Name: David M. Taylor

Title: Executive Vice President

 

 

 
 

Amendment to

Distributor’s Contracts

between

the Federated Funds

and

Federated Securities Corp.

 

This Amendment to the Distributor’s Contracts (each an “Agreement” and together, the “Agreements”) between the Federated Funds listed on Exhibit A, (each a “Fund” and collectively, the “Funds”) and Federated Securities Corp. (“Distributor”) is made and entered into as of the 1st day of October, 2003.

 

WHEREAS, each Fund has entered into an Agreement with the Distributor under and pursuant to which the Distributor is the principal underwriter of the shares of the Fund;

 

WHEREAS, the Securities and Exchange Commission and the United States Treasury Department (“Treasury Department”) have adopted a series of rules and regulations arising out of the USA PATRIOT Act (together with such rules and regulations, the “Applicable Law”), specifically requiring certain financial institutions, including the Funds and the Distributor, to establish a written anti-money laundering and customer identification program (“Program”);

 

WHEREAS, each of the Funds and the Distributor have established a Program and wish to amend the Agreements to reflect the existence of such Programs and confirm the allocation of responsibility for the performance of certain required functions;

 

NOW, THEREFORE, the parties intending to be legally bound agree and amend each Agreement as follows:

 

1.The Funds and the Distributor each represent, warrant and certify that they have established, and covenant that at all times during the existence of each respective Agreement they will maintain, a Program in compliance with Applicable Law.
2.The Funds each represent and warrant that the Funds have entered into an amendment to the agreement with the transfer agent of the Funds, pursuant to which the transfer agent has agreed to perform all activities, including the establishment and verification of customer identities as required by Applicable Law or its Program, with respect to all customers on whose behalf Distributor maintains an account with the Funds.
3.Distributor covenants that it will enter into appropriate amendments to selling or other agreements with financial institutions that establish and maintain accounts with the Funds on behalf of their customers, pursuant to which such financial institutions covenant to establish and maintain a Program with respect to those customers in accordance with Applicable Law.

 

In all other respects, each Agreement first referenced above shall remain in full force and effect.

 

WITNESS the due execution hereof as of the 1st day of October, 2003.

 

FUNDS

 

By: /s/ John W. McGonigle

Name: John W. McGonigle

Title: Executive Vice President

 

 

federated Securities Corp.

 

By: /s/ James F. Getz

Name: James F. Getz

Title: President - Broker/Dealer

 
 

EXHIBIT A

 

Funds Distributor’s Contract Date
   
Cash Trust Series, Inc. March 1, 1993
Cash Trust Series II January 25, 1991
Edward Jones Money Market Fund April 1, 2001
Edward Jones Tax-Free Money Market Fund March 1, 2001
Federated Adjustable Rate Securities Fund April 24, 1992
Federated American Leaders Fund, Inc. March 1, 1993
Federated Equity Funds June 1, 1995
Federated Equity Income Fund, Inc. March 1, 1993
Federated Fixed Income Securities Fund, Inc. December 24, 1991
Federated GNMA Trust May 29, 1992
Federated Government Income Securities, Inc. July 17, 1996
Federated High Income Bond Fund, Inc. March 1, 1993
Federated High Yield Trust August 1, 1989
Federated Income Securities Trust December 31, 1991
Federated Income Trust June 1, 1992
Federated Index Trust September 3, 1991
Federated Institutional Trust September 1, 1994
Federated Insurance Series December 1, 1993
Federated International Series, Inc. February 11, 1991
Federated Investment Series Funds, Inc. June 22, 1992
Federated Limited Duration Government Fund, Inc. July 22, 1991
Federated Managed Allocation Portfolios December 1, 1993
Federated Municipal Opportunities Fund, Inc. July 17, 1996
Federated Municipal Securities Fund, Inc. March 1, 1993
Federated Municipal Securities Income Trust September 9, 1991
Federated Short-Term Municipal Trust June 1, 1993
Federated Stock and Bond Fund, Inc. March 1, 1993
Federated Stock Trust August 1, 1989
Federated Total Return Government Bond Fund September 1, 1995
Federated Total Return Series, Inc. December 1, 1993
Federated U.S. Government Bond Fund August 1, 1989
Federated U.S. Government Securities Fund:  1-3 Years May 29, 1992
Federated U.S. Government Securities Fund:  2-5 Years May 29, 1992
Federated World Investment Series, Inc. March 1, 1994
Intermediate Municipal Trust June 1, 1993
Money Market Obligations Trust March 1, 1994

 

 EX-99.DIST CONT 11 ex28e2distcontract.htm DISTRIBUTOR'S CONTRACT

Exhibit 28 (e) (2) under Form N-1A
Exhibit 99 under item 601/REG. S-K

 

DISTRIBUTOR'S CONTRACT

 

AGREEMENT made this 24th day of October, 1997, by and between those Investment Companies on behalf of the Portfolios and Classes of Shares listed on Schedule A to Exhibit 1, as may be amended from time to time, having their principal place of business at Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779, and who have approved this form of Agreement, and FEDERATED SECURITIES CORP. ("FSC"), a Pennsylvania Corporation. Each of the Exhibits hereto is incorporated herein in its entirety and made a part hereof. In the event of any inconsistency between the terms of this Agreement and the terms of any applicable Exhibit, the terms of the applicable Exhibit shall govern.

In consideration of the mutual covenants hereinafter contained, it is hereby agreed by and between the parties hereto as follows:

1.Each of the Investment Companies hereby appoint FSC as agent to sell and distribute shares of the Investment Companies 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 Funds. FSC hereby accepts such appointment and agrees to provide such other services for the Investment Companies, if any, and accept such compensation from the Investment Companies, 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 applicable Investment Company it is in its best interest to do so.
3.Neither FSC nor any other person is authorized by the Investment Companies 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 Investment Companies. 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 Investment Companies. No person or dealer, other than FSC, is authorized to act as agent for the Investment Companies for any purpose. FSC agrees that in offering or selling Shares as agent of the Investment Companies, 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 Investment Companies copies of all sales literature before using the same and will not use such sales literature if disapproved by the Investment Companies.
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/Directors of the Investment Companies including a majority of the members of the Board of Trustees/Directors of the Investment Companies who are not interested persons of the Investment Companies and have no direct or indirect financial interest in the operation of any Distribution Plan relating to the Investment Companies or in any related documents to such Plan ("Disinterested Trustees/Directors") cast in person at a meeting called for that purpose. If a Class is added after the first annual approval by the Trustees/Directors as described above, this Agreement will be effective as to that Class upon execution of the applicable exhibit and will continue in effect until the next annual approval of this Agreement by the Trustees/Directors and thereafter for successive periods of one year, subject to approval as described above.
5.This Agreement may be terminated with regard to a particular Fund or Class at any time, without the payment of any penalty, by the vote of a majority of the Disinterested Trustees/Directors or by a majority of the outstanding voting securities of the particular Fund or Class on not more than sixty (60) days' written notice to any other party to this Agreement.
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 Investment Companies 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/Directors of the Investment Companies including a majority of the Disinterested Trustees/Directors of the Investment Companies 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 Investment Companies agree 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 Investment Companies 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 any Investment Company pursuant to the foregoing paragraph, FSC shall promptly notify the Investment Company in writing of the institution of such action and the Investment Company shall assume the defense of such action, including the employment of counsel selected by the Investment Company 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 Investment Company in connection with the defense of such action or the Investment Company 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 Investment Company. Anything in this paragraph to the contrary notwithstanding, the Investment Companies shall not be liable for any settlement of any such claim of action effected without their written consent. The Investment Companies agree promptly to notify FSC of the commencement of any litigation or proceedings against the Investment Companies or any of their officers or Trustees/Directors or controlling persons in connection with the issue and sale of Shares or in connection with the Registration Statement, Prospectuses, or SAIs.

(b)FSC agrees to indemnify and hold harmless the Investment Companies, each of its Trustees/Directors, each of its officers who have signed the Registration Statement and each other person, if any, who controls the Investment Companies 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 Investment Companies 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 any Investment Company 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 Investment Companies, and the Investment Companies 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 Investment Companies or their 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/Directors, officers, FSC and controlling persons of the Investment Companies by the Trustees/Directors pursuant to this Agreement, the Investment Companies are aware of the position of the Securities and Exchange Commission as set forth in the Investment Company Act Release No. IC-11330. Therefore, the Investment Companies 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/Directors, or (ii) by independent legal counsel in a written opinion that the indemnitee was not liable for an act of willful misfeasance, bad faith, gross negligence or reckless disregard of duties. The Investment Companies 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, Trustees/Directors, FSC or controlling person of the Investment Companies 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 Investment Companies is insured against losses arising by reason of any lawful advances; or (iii) a majority of a quorum of non-party Disinterested Trustees/Directors or independent legal counsel in a written opinion makes a factual determination that there is reason to believe the indemnitee will be entitled to indemnification.

 

11.If at any time the Shares of any Fund are offered in two or more Classes, FSC agrees to adopt compliance standards as to when a class of shares may be sold to particular investors.
12.This Agreement will become binding on the parties hereto upon the execution of the attached exhibits to the Agreement.

 

 
 

Exhibit 1

to the

Distributor’s Contract

 

The following provisions are hereby incorporated and made part of the Distributor’s Contract (the “Distributor’s Contract”) dated October 24, 1997, between the Investment Companies and Federated Securities Corp. as principal distributor (the “Principal Distributor”) with respect to the Class B Shares of the portfolios (the “Funds”) set forth on the attached Schedule A. References herein to this Distributor’s Contract refer to the Distributor’s Contract as supplemented hereby and made applicable hereby to the Class B Shares of the Funds. In the event of any inconsistency between the terms of this Exhibit and the terms of the Distributor’s Contract, the terms of this Exhibit will govern. Once effective in respect of the Class of Shares of any Fund set forth above, the Distributors Contract as amended by this Exhibit shall be effective in respect of all shares of such class outstanding whether issued prior to or after such effectiveness.

 

1.The Investment Companies hereby appoints the Principal Distributor to engage in activities principally intended to result in the sale of Class B Shares (“Class B Shares”) of each Fund. Pursuant to this appointment, the Principal Distributor is authorized to select a group of financial institutions (“Financial Institutions”) to sell Class B Shares of a Fund at the current offering price thereof as described and set forth in the respective prospectuses of the Fund.

 

2.(a) In consideration of the Principal Distributor’s services under this Distributor’s Contract in respect of each Fund the Investment Companies on behalf of the Fund agree: (I) to pay the Principal Distributor or at its direction its “Allocable Portion” (as hereinafter defined) of a fee (the “Distribution Fee”) equal to 0.75 of 1% per annum of the average daily net asset value of the Class B Shares of the Fund outstanding from time to time, and (II) to withhold from redemption proceeds in respect of Class B Shares of the Fund such Principal Distributor’s Allocable Portion of the Contingent Deferred Sales Charges (“CDSCs”) payable in respect of such redemption as provided in the Prospectus for the Fund and to pay the same over to such Principal Distributor or at its direction at the time the redemption proceeds in respect of such redemption are payable to the holder of the Class B Shares redeemed.

 

(b)The Principal Distributor will be deemed to have performed all services required to be performed in order to be entitled to receive its Allocable Portion of the Distribution Fee payable in respect of the Class B Shares of a Fund upon the settlement of each sale of a “Commission Share” (as defined in the Allocation Schedule attached hereto as Schedule B) of the Fund taken into account in determining such Principal Distributor’s Allocable Portion of such Distribution Fees.

 

(c)Notwithstanding anything to the contrary set forth in this Exhibit, the Distributor’s Contract or (to the extent waiver thereof is permitted thereby) applicable law, the Investment Companies’ obligation to pay the Principal Distributor’s Allocable Portion of the Distribution Fees payable in respect of the Class B Shares of a Fund shall not be terminated or modified for any reason (including a termination of this Distributor’s Contract as it relates to Class B Shares of a Fund) except to the extent required by a change in the Investment Company Act of 1940 (the “Act”) or the Conduct Rules of the National Association of Securities Dealers, Inc., in either case enacted or promulgated after May 1, 1997, or in connection with a “Complete Termination” (as hereinafter defined) of the Distribution Plan in respect of the Class B Shares of a Fund.

 

(d)The Investment Companies will not take any action to waive or change any CDSC in respect of the Class B Shares of a Fund, except as provided in the Investment Companies’ prospectus or statement of additional information as in effect as of the date hereof without the consent of the Principal Distributor and the permitted assigns of all or any portion of its right to its Allocable Portion of the CDSCs.

 

(e)Notwithstanding anything to the contrary set forth in this Exhibit, the Distributor’s Contract, or (to the extent waiver thereof is permitted thereby) applicable law, neither the termination of the Principal Distributor’s role as principal distributor of the Class B Shares of a Fund, nor the termination of this Distributor’s Contract nor the termination of the Distribution Plan will terminate such Principal Distributor’s right to its Allocable Portion of the CDSCs in respect of the Class B Shares of a Fund.

 

(f)Notwithstanding anything to the contrary in this Exhibit, the Distributor’s Contract, or (to the extent waiver thereof is permitted thereby) applicable law, the Principal Distributor may assign, sell or pledge (collectively, a “Transfer”) its rights to its Allocable Portion of the Distribution Fees and CDSCs earned by it (but not its obligations to the Investment Companies under this Distributor’s Contract) in respect of the Class B Shares of a Fund to raise funds to make the expenditures related to the distribution of Class B Shares of the Fund and in connection therewith upon receipt of notice of such Transfer, the Investment Companies shall pay, or cause to be paid to the assignee, purchaser or pledgee (collectively with their subsequent transferees, “Transferees”) such portion of the Principal Distributor’s Allocable Portion of the Distribution Fees and CDSCs in respect of the Class B Shares of the Fund so Transferred. Except as provided in (c) above and notwithstanding anything to the contrary set forth elsewhere in this Exhibit, the Distributor’s Contract, or (to the extent waiver thereof is permitted thereby) applicable law, to the extent the Principal Distributor has Transferred its rights thereto to raise funds as aforesaid, the Investment Companies’ obligation to pay to the Principal Distributor’s Transferees the Principal Distributor’s Allocable Portion of the Distribution Fees payable in respect of the Class B Shares of each Fund shall be absolute and unconditional and shall not be subject to dispute, offset, counterclaim or any defense whatsoever, including without limitation, any of the foregoing based on the insolvency or bankruptcy of the Principal Distributor (it being understood that such provision is not a waiver of the Investment Companies’ right to pursue such Principal Distributor and enforce such claims against the assets of such Principal Distributor other than the Distributor’s right to the Distribution Fees, CDSCs and servicing fees, in respect of the Class B Shares of any Fund which have been so transferred in connection with such Transfer). The Fund agrees that each such Transferee is a third party beneficiary of the provisions of this clause (f) but only insofar as those provisions relate to Distribution Fees and CDSCs transferred to such Transferee.

 

(g)For purposes of this Distributor’s Contract, the term Allocable Portion of Distribution Fees payable in respect of the Class B Shares of any Fund shall mean the portion of such Distribution Fees allocated to such Principal Distributor in accordance with the Allocation Schedule attached hereto as Schedule B.

 

(h)For purposes of this Distributor’s Contract, the term “Complete Termination” of the Plan in respect of any Fund means a termination of the Plan involving the complete cessation of the payment of Distribution Fees in respect of all Class B Shares of such Fund, and the termination of the distribution plans and the complete cessation of the payment of distribution fees pursuant to every other Distribution Plan pursuant to rule 12b-1 of the Investment Companies in respect of such Fund and any successor Fund or any Fund acquiring a substantial portion of the assets of such Fund and for every future class of shares which has substantially similar characteristics to the Class B Shares of such Fund including the manner of payment and amount of sales charge, contingent deferred sales charge or other similar charges borne directly or indirectly by the holders of such shares.

 

3.The Principal Distributor may enter into separate written agreements with various firms to provide certain of the services set forth in Paragraph 1 herein. The Principal Distributor, in its sole discretion, may pay Financial Institutions a lump sum fee on the settlement date for the sale of each Class B Share of the Fund to their clients or customers for distribution of such share. The schedules of fees to be paid such firms or Financial Institutions and the basis upon which such fees will be paid shall be determined from time to time by the Principal Distributor in its sole discretion.

 

4.The Principal Distributor will prepare reports to the Board of Trustees/Directors of the Investment Companies 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 between the Investment Companies and the Principal Distributor, the Principal Distributor and the Investment Companies hereby execute and deliver this Exhibit with respect to the Class B Shares of the Fund.

 

Witness the due execution hereof this 24th day of October, 1997.

 

 

ATTEST: INVESTMENT COMPANIES (listed on Schedule A)
   
By: /s/ S. Elliott Cohan By: /s/ John W. McGonigle
Title: Assistant Secretary` Title: Executive Vice President
   
   
ATTEST: FEDERATED SECURITIES CORP.
   
   
By:  /s/ Leslie K. Platt By: /s/ Byron F. Bowman
Title: Assistant Secretary Title: Vice President

 

 
 

Schedule B

to the

Distributor’s Contract

for Class B Shares of the

Federated Funds

 

ALLOCATION SCHEDULE

 

Contingent Deferred Sales Charges and Asset Based Sales Charges related to Shares of each Fund shall be allocated among the existing Principal Distributor and any subsequent Principal Distributor in accordance with this Schedule B.

 

Defined terms used in this Schedule B and not otherwise defined herein shall have the meaning assigned to them in the Distributor’s Contract. As used herein the following terms shall have the meanings indicated:

 

[ ]

 

PART I: ATTRIBUTION OF SHARES

 

[ ]
PART II: ALLOCATION OF CONTINGENT DEFERRED SALES CHARGES (“CDSCs”)

 

[ ]

 

PART III: ALLOCATION OF ASSET BASED SALES CHARGES

 

[ ]

 

PART IV: ADJUSTMENTS OF THE EXISTING PRINCIPAL DISTRIBUTOR’S AND EACH SUBSEQUENT PRINCIPAL DISTRIBUTOR’S ALLOCABLE SHARE OF ASSET BASED SALES CHARGES AND CONTINGENT DEFERRED SALES CHARGES

 

[ ]

 
 

EXHIBIT I

 

SELLING AGENTS CURRENTLY OFFERING OMNIBUS SHARES

 

 

[ ]

 

 

 
 

Amendment to

Distributor’s Contract

between

the Federated Funds with Class B Shares

and

Federated Securities Corp.

 

This Amendment to the Distributor’s Contract (the “Agreement”) between the Federated Funds listed on Schedule A to the Agreement, (each a “Fund” and collectively, the “Funds”) and Federated Securities Corp. (“Distributor”) is made and entered into as of the 1st day of October, 2003.

 

WHEREAS, each Fund has entered into the Agreement with the Distributor under and pursuant to which the Distributor is the principal underwriter of the shares of the Fund;

WHEREAS, the Securities and Exchange Commission and the United States Treasury Department (“Treasury Department”) have adopted a series of rules and regulations arising out of the USA PATRIOT Act (together with such rules and regulations, the “Applicable Law”), specifically requiring certain financial institutions, including the Funds and the Distributor, to establish a written anti-money laundering and customer identification program (“Program”);

 

WHEREAS, each of the Funds and the Distributor have established a Program and wish to amend the Agreement to reflect the existence of such Programs and confirm the allocation of responsibility for the performance of certain required functions;

 

NOW, THEREFORE, the parties intending to be legally bound agree and amend the Agreement as follows:

 

1.The Funds and the Distributor each represent, warrant and certify that they have established, and covenant that at all times during the existence of the Agreement they will maintain, a Program in compliance with Applicable Law.
2.The Funds each represent and warrant that the Funds have entered into an amendment to the agreement with the transfer agent of the Funds, pursuant to which the transfer agent has agreed to perform all activities, including the establishment and verification of customer identities as required by Applicable Law or its Program, with respect to all customers on whose behalf Distributor maintains an account with the Funds.
3.Distributor covenants that it will enter into appropriate amendments to selling or other agreements with financial institutions that establish and maintain accounts with the Funds on behalf of their customers, pursuant to which such financial institutions covenant to establish and maintain a Program with respect to those customers in accordance with Applicable Law.

 

In all other respects, the Agreement first referenced above shall remain in full force and effect.

 
 

WITNESS the due execution hereof as of the 1st day of October, 2003.

 

FEDERATED FUNDS WITH CLASS B SHARES

(listed on Schedule A to the Agreement)

 

By: /s/ John W. McGonigle

Name: John W. McGonigle

Title: Executive Vice President

 

 

federated Securities Corp.

 

By: /s/ James F. Getz

Name: James F. Getz

Title: President - Broker/Dealer

 
 

Amendment to

Distributor’s Contract

between

Federated Funds with Class B Shares

and

Federated Securities Corp.

 

This Amendment to the Distributor’s Contract (“Agreement”) dated October 24, 1997, between those Federated Funds with Class B Shares listed on the Exhibit to the Agreement (“Fund”) and Federated Securities Corp. (“Service Provider”) is made and entered into as of the 1st day of June, 2001.

 

WHEREAS, the Fund has entered into the Agreement with the Service Provider;

 

WHEREAS, the Securities and Exchange Commission has adopted Regulation S-P at 17 CFR Part 248 to protect the privacy of individuals who obtain a financial product or service for personal, family or household use;

 

WHEREAS, Regulation S-P permits financial institutions, such as the Fund, to disclose ”nonpublic personal information” (“NPI”) of its “customers” and “consumers” (as those terms are therein defined in Regulation S-P) to affiliated and nonaffiliated third parties of the Fund, without giving such customers and consumers the ability to opt out of such disclosure, for the limited purposes of processing and servicing transactions (17 CFR § 248.14) (“Section 248.14 NPI”); for specified law enforcement and miscellaneous purposes (17 CFR § 248.15) (“Section 248.15 NPI”) ; and to service providers or in connection with joint marketing arrangements (17 CFR § 248.13) (“Section 248.13 NPI”);

 

WHEREAS, Regulation S-P provides that the right of a customer and consumer to opt out of having his or her NPI disclosed pursuant to 17 CFR § 248.7 and 17 CFR § 248.10 does not apply when the NPI is disclosed to service providers or in connection with joint marketing arrangements, provided the Fund and third party enter into a contractual agreement that prohibits the third party from disclosing or using the information other than to carry out the purposes for which the Fund disclosed the information (17 CFR § 248.13);

 

NOW, THEREFORE, the parties intending to be legally bound agree as follows:

 

1.The Fund and the Service Provider hereby acknowledge that the Fund may disclose shareholder NPI to the Service Provider as agent of the Fund and solely in furtherance of fulfilling the Service Provider’s contractual obligations under the Agreement in the ordinary course of business to support the Fund and its shareholders.

 

2.The Service Provider hereby agrees to be bound to use and redisclose such NPI only for the limited purpose of fulfilling its duties and obligations under the Agreement, for law enforcement and miscellaneous purposes as permitted in 17 CFR §§ 248.15, or in connection with joint marketing arrangements that the Funds may establish with the Service Provider in accordance with the limited exception set forth in 17 CFR § 248.13.

 

3.The Service Provider further represents and warrants that, in accordance with 17 CFR § 248.30, it has implemented, and will continue to carry out for the term of the Agreement, policies and procedures reasonably designed to:
·insure the security and confidentiality of records and NPI of Fund customers,
·protect against any anticipated threats or hazards to the security or integrity of Fund customer records and NPI, and
·protect against unauthorized access to or use of such Fund customer records or NPI that could result in substantial harm or inconvenience to any Fund customer.

 

4.The Service Provider may redisclose Section 248.13 NPI only to: (a) the Funds and affiliated persons of the Funds (“Fund Affiliates”); (b) affiliated persons of the Service Provider (“Service Provider Affiliates”) (which in turn may disclose or use the information only to the extent permitted under the original receipt); (c) a third party not affiliated with the Service Provider of the Funds (“Nonaffiliated Third Party”) under the service and processing (§248.14) or miscellaneous (§248.15) exceptions, but only in the ordinary course of business to carry out the activity covered by the exception under which the Service Provider received the information in the first instance; and (d) a Nonaffiliated Third Party under the service provider and joint marketing exception (§248.13), provided the Service Provider enters into a written contract with the Nonaffiliated Third Party that prohibits the Nonaffiliated Third Party from disclosing or using the information other than to carry out the purposes for which the Funds disclosed the information in the first instance.

 

5.The Service Provider may redisclose Section 248.14 NPI and Section 248.15 NPI to: (a) the Funds and Fund Affiliates; (b) Service Provider Affiliates (which in turn may disclose the information to the same extent permitted under the original receipt); and (c) a Nonaffiliated Third Party to whom the Funds might lawfully have disclosed NPI directly.

 

6.The Service Provider is obligated to maintain beyond the termination date of the Agreement the confidentiality of any NPI it receives from the Fund in connection with the Agreement or any joint marketing arrangement, and hereby agrees that this Amendment shall survive such termination.

 

WITNESS the due execution hereof this 1st day of June, 2001.

 

Federated Funds with Class B Shares

(listed on the Exhibit to the Agreement)

 

By: /s/ John W. McGonigle

Name: John W. McGonigle

Title: Secretary

 

 

Federated Securities Corp.

 

 

By: /s/ David M. Taylor

Name: David M. Taylor

Title: Executive Vice President

 
 

Schedule A

 

DISTRIBUTOR’S CONTRACT

Effective Date: Class B Shares of: Revised 12/1/19

   
5/16/2017 FEDERATED ADVISER SERIES (Formerly Federated MDT Equity Trust)
  Federated MDT Large Cap Value Fund
   
  FEDERATED EQUITY FUNDS
12/1/00 Federated Kaufmann Fund
12/1/02 Federated Kaufmann Small Cap Fund
10/24/97 Federated MDT Mid Cap Growth Fund
   
10/24/97 FEDERATED EQUITY INCOME FUND, INC.
   
  FEDERATED FIXED INCOME SECURITIES, INC.
10/24/97 Federated Strategic Income Fund
   
6/1/08 FEDERATED GLOBAL ALLOCATION FUND
   
10/24/97 FEDERATED GOVERNMENT INCOME SECURITIES, INC.
   
10/24/97 FEDERATED HIGH INCOME BOND FUND, INC.
   
9/1/02 FEDERATED INCOME SECURITIES TRUST
12/1/02 Federated Capital Income Fund
9/1/02 Federated Fund for U.S. Government Securities
9/1/03 Federated Muni and Stock Advantage Fund
   
  FEDERATED INTERNATIONAL SERIES, INC.
10/24/97 Federated Global Total Return Bond Fund
   
  FEDERATED INVESTMENT SERIES FUNDS, INC.
10/24/97 Federated Bond Fund
   
  FEDERATED MDT SERIES
3/1/07 Federated MDT Large Cap Growth Fund
12/1/07 Federated MDT Small Cap Growth Fund
   
  FEDERATED MUNICIPAL SECURITIES INCOME TRUST
6/1/06 Federated Municipal High Yield Advantage Fund
10/24/97 Federated Pennsylvania Municipal Income Fund
   
10/24/97 FEDERATED MUNICIPAL BOND FUND, INC.
   
  FEDERATED TOTAL RETURN SERIES, INC.
6/1/01 Federated Total Return Bond Fund
   
  FEDERATED WORLD INVESTMENT SERIES, INC.
10/24/97 Federated Emerging Market Debt Fund
6/1/98 Federated International Leaders Fund
10/24/97 Federated International Small-Mid Company Fund
   
  MONEY MARKET OBLIGATIONS TRUST
6/1/15 Federated Government Reserves Fund
   

 

 EX-99.CUSTODY AG 12 ex28gcustodyagmt.htm CUSTODY AGREEMENT

Exhibit 28 (g) under Form N-1A
Exhibit 99 under item 601/REG. S-K

 

 

CUSTODY AGREEMENT

 

AGREEMENT, dated as of June 7, 2005 between the registered investment companies, on behalf of each Series of such registered investment companies, if any, listed on Schedule I to this Agreement, as it may be amended from time to time (each standalone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York, a New York corporation authorized to do a banking business having its principal office and place of business at One Wall Street, New York, New York 10286 (“Custodian” or “Bank”).

 

WITNESSETH:

 

that for and in consideration of the mutual promises hereinafter set forth the Funds and Custodian agree as follows:

 

ARTICLE I

DEFINITIONS

 

Whenever used in this Agreement, the following words shall have the meanings set forth below:

 

1. “Authorized Person” shall be any person, whether or not an officer or employee of the Fund, duly authorized by the Fund's board to execute any Certificate or to give any Oral Instruction with respect to one or more Accounts, such persons to be designated in a “Certificate annexed hereto as Schedule I hereto or such other Certificate as may be received by Custodian from time to time.

 

2. “BNY Affiliate” shall mean any office, branch or subsidiary of The Bank of New York Company, Inc.

 

3. “Book-Entry System” shall mean the Federal Reserve/Treasury book-entry system for receiving and delivering securities, its successors and nominees.

 

4. “Business Day” shall mean any day on which Custodian and relevant Depositories are open for business.

 

5. “Certificate” shall mean any notice, instruction, or other instrument in writing, authorized or required by this Agreement to be given to Custodian, which is actually received by Custodian by letter or facsimile transmission and signed on behalf of a Fund by an Authorized Person or a person reasonably believed by Custodian to be an Authorized Person.

 

6. “Composite Currency Unit” shall mean the Euro or any other composite currency unit consisting of the aggregate of specified amounts of specified currencies, as such unit may be constituted from time to time.

 

 

 

7. “Depository” shall include (a) the Book-Entry System, (b) the Depository Trust Company, { c) any other clearing agency or securities depository registered with the Securities and Exchange Commission identified to the Fund from time to time, and (d) the respective successors and nominees of the foregoing.

 

8. “Foreign Depository” shall mean (a) Euroclear, (b) Clearstream Banking, societe anonyme, (c) each Eligible Securities Depository as defined in Rule 17f-7 under the Investment Company Act of 1940, as amended, identified to the Fund from time to time, and (d) the respective successors and nominees of the foregoing.

 

9. “Instructions” shall mean communications transmitted by electronic or telecommunications media, including S.W.I.F.T., computer-to-computer interface, or dedicated transmission lines.

 

10. “Oral Instructions” shall mean verbal instructions received by Custodian from an Authorized Person or from a person reasonably believed by Custodian to be an Authorized Person.

 

11. “Series” shall mean a “series company” as defined in Rule 18f-2(a) promulgated under the Investment Company Act of 1940.

 

12. “Securities” shall include, without limitation, any common stock and other equity securities, bonds, debentures and other debt securities, notes, mortgages or other obligations, and any instruments representing rights to receive, purchase, or subscribe for the same, or representing any other rights or interests therein (whether represented by a certificate or held in a Depository or by a Subcustodian).

 

13. “Subcustodian” shall mean a bank (including any branch thereof) or other financial institution (other than a Foreign Depository) located outside the U.S. which is utilized by Custodian in connection with the purchase, sale or custody of Securities hereunder and identified to the Fund from time to time, and their respective successors and nominees.

 

14. See Second Amendment, dated 9/5/08

 

ARTICLE II

APPOINTMENT OF CUSTODIAN; ACCOUNTS;

REPRESENTATIONS, WARRANTIES, AND COVENANTS

 

1. (a) The Fund hereby appoints Custodian as Custodian of all Securities and cash at any time delivered to Custodian during the term of this Agreement, and authorizes Custodian to hold Securities in registered form in its name or the name of its nominees. Custodian hereby accepts such appointment and agrees to establish and maintain one or more securities accounts and cash accounts for each Fund in which Custodian will hold Securities and cash as provided herein. Custodian shall maintain books and records segregating the assets of each Fund from the assets of any other Fund. Such accounts (each, an “Account”; collectively, the “Accounts”) shall be in the name of each Fund.

 

(b)        Custodian may from time to time establish on its books and records such sub-accounts within each Account as the Fund and Custodian may agree upon (each a “Special Account”), and Custodian shall reflect therein such assets as the Fund may specify in a Certificate or Instructions.

 

(c)        Custodian may from time to time establish pursuant to a written agreement with and for the benefit of a broker, dealer, future commission merchant or other third party identified in a Certificate or Instruction such accounts on such terms and conditions as the Fund and Custodian shall agree, and Custodian shall transfer to such account such Securities and money as a Fund may specify in a Certificate or Instructions.

 

2.        Each Fund hereby represents and warrants, which representations and warranties shall be continuing and shall be deemed to be reaffirmed upon each delivery of a Certificate or each giving of Oral Instructions or Instructions by a Fund, that:

 

(a)        It is duly organized and existing under the laws of the jurisdiction of its organization, with full power to carry on its business as now conducted, to enter into this Agreement, and to perform its obligations hereunder;

 

(b)        This Agreement has been duly authorized by resolution of the Funds' boards, executed and delivered by each Fund, constitutes a valid and legally binding obligation of each Fund, enforceable in accordance with its terms, and there is no statute, regulation, role, order or judgment binding on it, and no provision of its charter or by-laws, nor of any mortgage, indenture, credit agreement or other contract binding on it or affecting its property, which would prohibit its execution or performance of this Agreement;

 

(c)        It is conducting its business in substantial compliance with all applicable laws and requirements, both state and federal, and has obtained all regulatory licenses, approvals and consents necessary to carry on its business as now conducted;

 

(d)        It will not use the services provided by Custodian hereunder in any manner that is, or will result in, a violation of any law, rule or regulation applicable to the Fund;

 

(e)        Its foreign custody manager, if the foreign custody manager is not the Custodian, as defined in Rule 17f-5 under the Investment Company Act of 1940, as amended (the “'40 Act”), has determined that use of each Subcustodian (including any Replacement Custodian) which Custodian is authorized to utilize in accordance with Section 1 (a) of Article ill hereof satisfies the applicable requirements of the '40 Act and Rule 17f-5 thereunder;

 

(f)        It is fully informed of the protections and risks associated with various methods of transmitting Instructions and Oral Instructions and delivering Certificates to Custodian, shall, and shall cause each Authorized Person, to safeguard and treat with reasonable care any user and authorization codes, passwords and/or authentication keys, understands that there may be more secure methods of transmitting or delivering the same than the methods selected by it, agrees that the security procedures (if any) to be utilized provide a commercially reasonable degree of protection in light of its particular needs and circumstances, and acknowledges and agrees that Instructions may conclusively be presumed by Custodian to have been given by person(s) duly authorized, and may be acted upon as given;

 

(g)        It shall manage its borrowings, including, without limitation any advance or overdraft (including any day-light overdraft) in the Accounts, so that the aggregate of its total borrowings for each Fund does not exceed the amount such Fund is permitted to borrow under the '40 Act;

 

(h)        Its transmission or giving of, and Custodian acting upon and in reliance on Certificates, Instructions, or Oral Instructions pursuant to this Agreement shall at all times comply with the '40 Act; and

 

(i)        It has the right to grant the security interest and security entitlement to Custodian contained in Section 1 of Article V hereof, free of any right of redemption or prior claim of any other person or entity, such pledge and such grants shall have a first priority subject to no setoffs, counterclaims, or other liens or grants prior to or on a parity therewith, and it shall take such additional steps as Custodian may require to assure such priority;

 

(j)        Each Fund or its investment adviser has considered the custody risks of maintaining assets with each Foreign Depository with which it maintains its assets.

 

(k)        Each Fund shall cause procedures to be maintained on the manner in which Instructions pursuant to which cash is distributed shall be given to Custodian.

 

3.        The Fund hereby covenants that it shall from time to time complete and execute and deliver to Custodian upon Custodian's request a Form FR U-1 (or successor form) whenever the Fund borrows from Custodian any money to be used for the purchase or carrying of margin stock as defined in Federal Reserve Regulation U .

 

4.        The Bank hereby represents and warrants, which representations and warranties shall be continuing that:

 

(a)        It is a bank having the qualifications prescribed in paragraph (1) of section 26(a) of the '40 Act;

 

(b)        It is duly organized and existing under the laws of the jurisdiction of its organization, with full power to carry on its business as now conducted, to enter into this Agreement, and to perform its obligations hereunder;

 

(c)        It is conducting its business in substantial compliance with all applicable laws and requirements, both state and federal, and has obtained all regulatory licenses, approvals and consents necessary to carry on its business as now conducted.

 

(d)        In connection with the Funds' obligations under Rule 38a-l of the 1940 Act the Bank agrees as follows:

 

(1)        the Bank agrees to reasonably cooperate with the Funds and the Funds' Chief Compliance Officer in the administration of the Funds' compliance program (“Compliance Program”) as required by the Securities and Exchange Commission (“SEC”);

 

(2)        the Bank has implemented and maintains policies and procedw.-es reasonably designed to prevent, detect and promptly correct any violations of Federal Securities Laws with respect to services the Bank provides to the Funds (“Compliance Procedures”);

 

(3)        the Bank Will provide summaries of any Compliance Procedures that may affect in any material respect, the services provided hereunder by the Bank to the Funds;

 

(4)        the Bank periodically reviews the adequacy of such Compliance Procedures and the effectiveness of their implementation and upon the request of a Fund, Will provide the then current interval between such reviews;

 

(5)        in the event that an officer or employee of the Bank administering this Agreement has actual knowledge of the occurrence of a “Material Compliance Matter” (as defined in Rule 38a-l(e)(2)) which the Bank reasonably believes is related to or Will affect the Fund, the Bank will, if permitted by law and the Bank's regulators, notify the Fund of such occurrence;

 

(6)        except where prohibited bylaw, regulation or rule or as may be directed or instructed by the Bank's regulators, the Bank agrees to notify the Funds following quarter-end of any inspections by, or other inquiries received from, the SEC or any other regulatory or law enforcement agency after the date of this certification, which relate to the services provided by the Bank to the Funds hereunder. For the avoidance of doubt, such notification obligation shall be satisfied if the notice is contained in any publicly available regulatory filing.

 

(d)        The Bank will maintain throughout the term of this Agreement, such contingency plans as it reasonably believes to be necessary and appropriate to recover its operations from the occurrence of a disaster and which are consistent with any statue or regulation to which it is subject that imposes business resumption and contingency planning standards. The Bank agrees to provide the Funds With a summary of its contingency plan as it relates to the systems used to provide the services hereunder and to provide the Funds with periodic updates of such summary upon the Funds' reasonable request.

 

ARTICLE III

CUSTODY AND RELATED SERVICES

 

1. (a) Subject to the terms hereof, each Fund hereby authorizes Custodian to hold any Securities received by it from time to time for the Fund's account. Custodian shall be entitled to utilize, subject to subsection (c) of this Section I, Depositories, Subcustodians, and, subject to subsection (d) of this Section 1, Foreign Depositories, to the extent possible in connection With its performance hereunder. Securities and cash held in a Depository or Foreign Depository will be held subject to the rules, terms and conditions of such entity .Securities and cash held through Subcustodians shall be held subject to the terms and conditions of Custodian's agreements with such Subcustodians. Subcustodians may be authorized to hold Securities in Foreign Depositories in which such Subcustodians participate. Unless otherwise required by local law or practice or a particular Subcustodian agreement, Securities deposited with a Subcustodian, a Depositary or a Foreign Depository Will be held in a commingled account, in the name of Custodian, holding only Securities held by Custodian as Custodian for its customers.

 

Custodian shall identify on its books and records the Securities and cash belonging to the Fund, whether held directly or indirectly through Depositories, Foreign Depositories, or Subcustodians. Custodian shall, directly or indirectly, through Subcustodians, Depositories, or Foreign Depositories, endeavor, to the extent feasible, to hold Securities in the country or other jurisdiction in which the principal trading market for such Securities is located, where such Securities are to be presented for cancellation and/or payment and/or registration, or where such Securities are acquired. Custodian at any time may cease utilizing any Subcustodian and/or may replace a Subcustodian with a different Subcustodian (the “Replacement Subcustodian”). In the event Custodian selects a Replacement Subcustodian, Custodian shall not utilize such Replacement Subcustodian until after the Fund's foreign custody manager has determined that utilization of such Replacement Subcustodian satisfies the requirements of the' 40 Act and Rule 17f-5 thereunder.

 

(b)        Unless Custodian has received a Certificate or Instructions to the contrary, Custodian shall hold Securities indirectly through a Subcustodian only if (i) the Securities are not subject to any right, charge, security interest, lien or claim of any kind in favor of such Subcustodian or its creditors or operators, including a receiver or trustee in bankruptcy or similar authority, except for a claim of payment for the safe custody or administration of Securities on behalf of a Fund by such Subcustodian, and (ii) beneficial ownership of the Securities is freely transferable without the payment of money or value other than for safe custody or administration.

 

(c)        With respect to each Depository, Custodian (i) shall exercise due care in accordance with reasonable commercial standards in discharging its duties as a securities intermediary to obtain and thereafter maintain Securities or financial assets deposited or held in such Depository, and (ii) will provide, promptly upon request by a Fund, such reports as are available concerning the internal accounting controls and financial strength of Custodian.

 

(d)        With respect to each Foreign Depository, Custodian shall exercise reasonable care, prudence, and diligence (i) to provide the Fund with an analysis of the custody risks associated with maintaining assets with the Foreign Depository, and (ii) to monitor such custody risks on a continuing basis and promptly notify the Fund of any material change in such risks. The Fund acknowledges and agrees that such analysis and monitoring shall be made on the basis of, and limited by, information gathered from Subcustodians or through publicly available information otherwise obtained by Custodian, and shall not include any evaluation of Country Risks. As used herein the term “Country Risks” shall mean with respect to any Foreign Depository: (a) the financial infrastructure of the country in which it is organized, (b) such country's prevailing custody and settlement practices, (c) nationalization, expropriation or other governmental actions, (d) such country's regulation of the banking or securities industry, (e) currency controls, restrictions, devaluations or fluctuations, and (f) market conditions which affect the order execution of securities transactions or affect the value of securities.

 

2.        Custodian shall furnish the Fund with an advice of daily transactions (including a confirmation of each transfer of Securities) and a monthly summary of all transfers to or from the Accounts.

 

3.        With respect to all Securities held hereunder, Custodian shall, unless otherwise instructed to the contrary:

 

(a)        Receive all income and other payments and advise the Fund as promptly as practicable of any such amounts due but not paid;

 

(b)        Present for payment and receive the amount paid upon all Securities which may mature and advise the Fund as promptly as practicable of any such amounts due but not paid;

 

(c)        Forward to the Fund copies of all information or documents that it may actually receive from an issuer of Securities which, in the opinion of Custodian, are intended for the beneficial owner of Securities;

 

(d)        Execute, as Custodian, any certificates of ownership, affidavits, declarations or other certificates under any tax. laws now or hereafter in effect in connection with the collection of bond and note coupons;

 

(e)        Hold directly or through a Depository, a Foreign Depository, or a Subcustodian all rights and similar Securities issued with respect to any Securities credited to an Account hereunder; and

 

(f)        Endorse for collection checks, drafts or other negotiable instruments.

 

(1)       Custodian shall notify the Fund of rights or discretionary actions with respect to Securities held hereunder, and of the date or dates by when such rights must be exercised or such action must be taken, provided that Custodian has actually received, from the issuer or the relevant Depository (with respect to Securities issued in the United States) or from the relevant Subcustodian, Foreign Depository, or a nationally or internationally recognized bond or corporate action service to which Custodian subscribes, timely notice of such rights or discretionary corporate action or of the date or dates such rights must be exercised or such action must be taken. Absent actual receipt of such notice, Custodian shall have no liability for failing to so notify the Fund.

 

(2)        Whenever Securities (including, but not limited to, warrants, options, tenders, options to tender or non-mandatory puts or calls) confer discretionary rights on the Fund or provide for discretionary action or alternative courses of action by the Fund, the Fund shall be responsible for making any decisions relating thereto and for directing Custodian to act. In order for Custodian to act, it must receive the Fund's Certificate or Instructions at Custodian's offices, addressed as Custodian may from time to time request, not later than noon (New York time) at least two (2) Business Days prior to the last scheduled date to act with respect to such Securities (or such earlier date or time as Custodian may specify to the Fund). Absent Custodian's timely receipt of such Certificate or Instructions, Custodian shall not be liable for failure to take any action relating to or to exercise any rights conferred by such Securities.

 

4.        All voting rights with respect to Securities, however registered, shall be exercised by the Fund or its designee. For Securities issued in the United States, Custodian's only duty shall be to mail to the Fund ally documents (including proxy statements, annual reports and signed proxies) actually received by Custodian relating to the exercise of such voting rights. With respect to Securities issued outside of the United States, the Custodian will use reasonable commercial efforts to facilitate the exercise of voting and other shareholder rights, subject always to the laws, regulations and practical constraints that may exist in the country which such securities are issued. Notwithstanding the foregoing, the Custodian's only duty shall be to provide the Funds with access to a provider of global proxy services at the Fund's request and to coordinate the provision of services between each Fund and the global proxy service provider. The Fund shall be responsible for all costs associated with its use of such services.

 

5.        Custodian shall promptly advise the Fund upon Custodian's actual receipt of notification of the partial redemption, partial payment or other action affecting less than all Securities of the relevant class. If Custodian, any Subcustodian, any Depository, or any Foreign Depository holds any Securities in which the Fund has an interest as part of a fungible mass, Custodian, such Subcustodian, Depository, or Foreign Depository may select the Securities to participate in such partial redemption, partial payment or other action in any non-discriminatory manner that it customarily uses to make such selection.

 

6.        Custodian shall not under any circumstances accept bearer interest coupons which have been stripped from United States federal, state or local government or agency securities unless explicitly agreed to by Custodian in writing. ,

 

7.        The Fund shall be liable for all taxes, assessments, duties and other governmental charges, including any interest or penalty with respect thereto (“Taxes”), with respect to any cash or Securities held on behalf of the Fund or any transaction related thereto. The Fund shall indemnify Custodian and each Subcustodian for the amount of any Tax that Custodian, any such Subcustodian or any other withholding agent is required under applicable laws (whether by assessment or otherwise) to pay on behalf of, or in respect of income earned by or payments or distributions made to or for the account of the Fund (including any payment of Tax required by reason of an earlier failure to withhold). Custodian shall, or shall instruct the applicable Subcustodian or other withholding agent to, withhold the amount of any Tax which is required to be withheld under applicable law upon collection of any dividend, interest or other distribution made with respect to any Security and any proceeds or income from the sale, loan or other transfer of any Security .In the event that Custodian or any Subcustodian is required under applicable law to pay any Tax on behalf of the Fund, Custodian is hereby authorized to withdraw cash from any cash account in the amount required to pay such Tax and to use such cash, or to remit such cash to the appropriate Subcustodian or other withholding agent, for the timely payment of such Tax in the manner required by applicable law. If the aggregate amount of cash in all cash accounts is not sufficient to pay such Tax, Custodian shall promptly notify the Fund of the additional amount of cash (in the appropriate currency) required, and the Fund shall directly deposit such additional amount in the appropriate cash account promptly after receipt of such notice, for use by Custodian as specified herein. In the event that Custodian reasonably believes that Fund is eligible, pursuant to applicable law or to the provisions of any tax treaty, for a reduced rate of, or exemption from, any Tax which is otherwise required to be withheld or paid on behalf of the Fund under any applicable law, Custodian shall, or shall instruct the applicable Subcustodian or withholding agent to, either withhold or pay such Tax at such reduced rate or refrain from withholding or paying such Tax, as appropriate; provided that Custodian shall have received from the Fund all documentary evidence of residence or other qualification for such reduced rate or exemption required to be received under such applicable law or treaty .In the event that Custodian reasonably believes that a reduced rate of, or exemption from, any Tax is obtainable only by means of an application for refund, Custodian and the applicable Subcustodian shall have no responsibility for the accuracy or validity of any forms or documentation provided by the Fund to Custodian hereunder. The Fund hereby agrees to indemnify and hold harmless Custodian and each Subcustodian in respect of any liability arising from any underwithholding or underpayment of any Tax which results from the inaccuracy or invalidity of any such forms or other documentation, and such obligation to indemnify shall be a continuing obligation of the Fund, its successors and assigns notwithstanding the termination of this Agreement.

 

8. (a) For the purpose of settling Securities and foreign exchange transactions, the Fund shall provide Custodian with sufficient immediately available funds for all transactions by such time and date as conditions in the relevant market dictate. As used herein, “sufficient immediately available funds” shall mean either (i) sufficient cash denominated in U .S. dollars to purchase the necessary foreign currency, or (ii) sufficient applicable foreign currency, to settle the transaction. Custodian shall provide the Fund with immediately available funds each day which result from the actual settlement of all sale transactions, based upon advices received by Custodian from Subcustodians, Depositories, and Foreign Depositories. Such funds shall be in U.S. dollars or such other currency as the Fund may specify to Custodian.

 

(b)        Any foreign exchange transaction effected by Custodian in connection with this Agreement may be entered with Custodian or a BNY Affiliate acting as principal or otherwise through customary banking channels. The Fund may issue a standing Certificate or Instructions with respect to foreign exchange transactions, but Custodian may establish roles or limitations concerning any foreign exchange facility made available to the Fund. The Fund shall bear all risks of investing in Securities or holding cash denominated in a foreign currency.

 

9.        Until such time as Custodian receives a certificate to the contrary with respect to a particular Security, Custodian may release the identity of the Fund to an issuer which requests such information pursuant to the Shareholder Communications Act of 1985 for the specific purpose of direct communications between such issuer and shareholder.

 

ARTICLE IV

PURCHASE AND SALE OF SECURITIES;

CREDITS TO ACCOUNT

 

1.        Promptly after each purchase or sale of Securities by the Fund, the Fund shall deliver to Custodian a Certificate or Instructions, or with respect to a purchase or sale of a Security generally required to be settled on the same day the purchase or sale is made, Oral Instructions specifying all information Custodian may reasonably request to settle such purchase or sale. Custodian shall account for all purchases and sales of Securities on the actual settlement date unless otherwise agreed by Custodian,

 

2.        Custodian shall release and deliver securities owned by a Fund which are held by the Custodian or in a Depository account of the Custodian only upon receipt of Instructions, which may be continuing instructions when deemed appropriate by the parties. Unless an Instruction states to the contrary, Custodian shall only release and deliver securities from the account of a Fund upon receipt of payment thereof, In the case of a sale through a Depository, the Custodian shall transfer securities sold for the account of a Fund upon (i) receipt of advice from the Depository that payment for such securities has been transferred to the account of the Custodian at the Depository, 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.

 

3.        Upon receipt of Instructions, which may be continuing instructions when deemed appropriate by the parties, the Custodian shall payout moneys of a Fund upon the purchase of securities for the account of the Fund against the delivery of such securities to the Custodian. In the case of a purchase effected through a Depository the Custodian shall pay for securities purchased for the account of each Fund upon (i) receipt of advice from the Depository that such securities have been transferred to the account of the Custodian at the Depository, 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.

 

4.        Custodian may, as a matter of bookkeeping convenience or by separate agreement with the Fund, credit the Account with the proceeds from the sale, redemption or other disposition of Securities or interest, dividends or other distributions payable on Securities prior to its actual receipt of final payment therefor. All such credits shall be conditional until Custodian's actual receipt of final payment and may be reversed by Custodian to the extent that final payment is not received. Payment with respect to a transaction will not be “final” until Custodian shall have received immediately available funds which under applicable local law, rule and/or practice are irreversible and not subject to any security interest, levy or other encumbrance, and which are specifically applicable to such transaction.

 

ARTICLE V

OVERDRAFTS OR INDEBTEDNESS

 

1.        See Second Amendment, dated 9/5/08. If Custodian should in its sole discretion advance funds on behalf of any Fund which results in an overdraft {this shall specifically not include any day-light overdraft) because the money held by Custodian in an Account for such Fund shall be insufficient to pay the total amount payable upon a purchase of Securities specifically allocated to such Fund, as set forth ill a Certificate, Instructions or Oral Instructions, or if an overdraft arises in the separate account of a Fund for some other reason, including, without limitation, because of a reversal of a conditional credit or the purchase of any currency, or if the Fund is for any other reason indebted to Custodian with respect to a Fund due to a borrowing from a Fund from the Custodian, (except a borrowing for investment or for temporary or emergency purposes using Securities as collateral pursuant to a separate agreement and subject to the provisions of Section 2 of this Article), such overdraft or indebtedness shall be deemed to be a loan made by Custodian to the Fund for such Fund payable on demand and shall bear interest from the date incurred at a rate per annum as disclosed on the Fee Schedule between the Funds and Custodian, as such Fee Exhibit may be amended from time to time. In addition, the Fund hereby agrees that Custodian shall to the maximum extent permitted by law have a continuing lien, security interest, and security entitlement in and to any property, including, without limitation, any investment property or any financial asset, of such Fund at any time held by Custodian for the benefit of such Fund or in which such Fund may have an interest (which is then in Custodian's possession or control or in possession or control of any third party acting in Custodian's behalf. The Fund authorizes Custodian, in its sole discretion, at any time to charge any such overdraft or indebtedness together with interest due thereon against any balance of account standing to such Fund's credit on Custodian's books. Notwithstanding, anything in this Agreement to the contrary, provided that Custodian and a Fund are parties to a Custodial Undertaking in Connection with Master Repurchase Agreement or a Subcustodial Undertaking in Connection with Master Repurchase Agreement (collectively the “Custodial Undertakings”), Custodian agrees that any securities held by Custodian in connection with a repurchase agreement entered into by such Fund and subject to the Custodial Undertakings shall not be subject to any security interest, lien or right of setoff by Custodian or any third pep claiming through Custodian and Custodian shall not pledge, encumber, hypothecate, transfer, dispose of, or otherwise grant any third party an interest in, any such securities.

 

2.        If the Fund borrows money from any bank (including Custodian if the borrowing is pursuant to a separate agreement) for investment or for temporary or emergency purposes using Securities held by Custodian hereunder as collateral for such borrowings, the Fund shall deliver to Custodian a Certificate specifying with respect to each such borrowing: (a) the Fund to which such borrowing relates; (b) the name of the bank, (c) the amount of the borrowing, (d) the time and date, if known, on which the loan is to be entered into, (e) the total amount payable to the Fund on the borrowing date, (f) the Securities to be delivered as collateral for such loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities, and (g) a statement specifying whether such loan is for investment purposes or for temporary or emergency purposes and that such loan is in conformance with the '40 Act and the Fund's prospectus. Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral against payment by the lending bank of the total amount of the loan payable, provided that the same conforms to the total amount payable as set forth in the Certificate. Custodian may, at the option of the lending bank, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank by virtue of any promissory note or loan agreement. Custodian shall deliver such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in this Section. The Fund shall cause all Securities released from collateral status to be returned directly to Custodian, and Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that the Fund fails to specify in a Certificate the Fund, the name of the issuer, the title and number of shares or the principal amount of any particular Securities to be delivered as collateral by Custodian, Custodian shall not be under any obligation to deliver any Securities.

 

 
 

ARTICLE VI

SALE AND REDEMPTION OF SHARES

 

1.        Whenever the Fund shall sell any shares issued by the Fund (“Shares”) it shall deliver to Custodian a Certificate or, Instructions specifying the amount of money and/or Securities to be received by Custodian for the sale of such Shares and specifically allocated to an Account for such Fund.

 

2.        Upon receipt of such money, Custodian shall credit such money to an Account in the name of the Fund for which such money was received.

 

3.        Except as provided hereinafter, whenever the Fund desires Custodian to make payment out of the money held by Custodian hereunder in connection with a redemption of any Shares, it shall furnish to Custodian a Certificate or Instructions specifying the total amount to be paid for such Shares. Custodian shall make payment of such total amount to the transfer agent specified in such Certificate or Instructions out of the money held in an Account of the appropriate Fund.

 

4.        Notwithstanding the above provisions regarding the redemption of any Shares, whenever any Shares are redeemed pursuant to any check redemption privilege which may from time to time be offered by the Fund, Custodian, unless otherwise instructed by a Certificate or Instructions, shall, upon presentment of such check;, charge the amount thereof against the money held in the Account of the Fund of the Shares being redeemed, provided, that if the Fund or its agent timely advises Custodian that such check is not to be honored, Custodian shall return such check unpaid.

 

ARTICLE VII

PAYMENT OF DIVIDENDS OR DISTRIBUTIONS

 

1.        Whenever the Fund shall determine to pay a dividend or distribution on Shares it shall furnish to Custodian Instructions or a Certificate setting forth with respect to the Fund specified therein the date of the declaration of such dividend or distribution, the total amount payable, and the payment date.

 

2.        Upon the payment date specified in such Instructions or Certificate, Custodian shall payout of the money held for the account of such Fund the total amount payable to the dividend agent of the Fund specified therein.

 

ARTICLE VIII

CONCERNING CUSTODIAN

 

1. (a) The Custodian shall be held to a standard of reasonable care in carrying out the provisions of this Agreement; provided, however, that the Custodian shall be held to different standard of care of imposed by any other provision of this Agreement or imposed upon Custodian by any applicable law or regulation, which by its terms cannot be contractually modified or waived. Except as otherwise expressly provided herein, Custodian shall not be liable for any costs, expenses, damages, liabilities or claims, including attorneys' and accountants' fees (collectively, “Losses”), incurred by or asserted against the Fund, except those Losses arising out of Custodian's own negligence or willful misconduct. Custodian shall have no liability whatsoever for the action or inaction of any Depositories or of any Foreign Depositories, except in each case to the extent such action or inaction is a direct result of the Custodian' s failure to fulfill its duties hereunder. With respect to any Losses incurred by the Fund as a result of the acts or any failures to act by any Subcustodian (other than a BNY Affiliate), Custodian shall take appropriate action to recover such Losses from such Subcustodian; and Custodian's sole responsibility and liability to the Fund shall be limited to amounts so received from such Subcustodian ( exclusive of costs and expenses incurred by Custodian). In no event shall Custodian be liable to the Fund or any third party for special, indirect or consequential damages, or lost profits or loss of business, arising in connection with this Agreement, nor shall Custodian or any Subcustodian be liable: (i) for acting in accordance with any Certificate or Oral Instructions actually received by Custodian and reasonably believed by Custodian to be given by an Authorized Person; (ii) for acting in accordance with Instructions without reviewing the same; (iii) for conclusively presuming that all Instructions are given only by person(s) duly authorized; (00 for conclusively presuming that all disbursements of cash directed by the Fund, whether by a Certificate, an Oral Instruction, or an Instruction, are in accordance with Section 2(i) of Article II hereof; (y) for holding property in any particular country, including, but not limited to, Losses resulting from nationalization, expropriation or other governmental actions; regulation of the banking or securities industry; exchange or currency controls or restrictions, devaluations or fluctuations; availability of cash or Securities or market conditions which prevent the transfer of property or execution of Securities transactions or affect the value of property; (yi) for any Losses due to forces beyond the control of Custodian, including without limitation strikes, work stoppages, acts of war or terrorism, insurrection, revolution, nuclear or natural catastrophes or acts of God, or interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; (yii) for the insolvency of any Subcustodian (other than a BNY Affiliate), any Depository, or, except to the extent such action or inaction is a direct result of the Custodian's failure to fulfill its duties hereunder, any Foreign Depository; or (yiii)l for any Losses arising from the applicability of any law or regulation now or hereafter in effect, or from the occurrence of any event, including, without limitation, implementation or adoption of any rules or procedures of a Foreign Depository, which may affect, limit prevent or impose costs or burdens on, the transferability, convertibility, or availability of any currency or Composite Currency Unit in any country or on the transfer of any Securities, and in no event shall Custodian be obligated to substitute another currency for a currency (including a currency that is a component of a Composite Currency Unit) whose transferability, convertibility or availability has been affected, limited, or prevented by such law, regulation or event and to the extent that any such law, regulation or event imposes a cost or charge upon Custodian in relation to the transferability, convertibility, or availability of any cash currency or Composite Currency Unit, such cost or charge shall be for the account of the Fund, and Custodian may treat any account denominated in an affected currency as a group of separate accounts denominated in the relevant component currencies.

 

(b)        Custodian may enter into subcontracts, agreements and understandings with any BNY Affiliate, whenever and on such terms and conditions as it deems necessary or appropriate to perform its services hereunder. No such subcontract, agreement or understanding shall discharge Custodian from its obligations hereunder.

 

(c)        The Fund agrees to indemnify Custodian and hold Custodian harmless from and against any and all Losses sustained or incurred by or asserted against Custodian by reason of or as a result of any action or inaction, or arising out of Custodian's performance hereunder, including reasonable fees and expenses of counsel incurred by Custodian in a successful defense of claims by the Fund; provided however, that the Fund shall not indemnify Custodian for those Losses arising out of Custodian's own negligence or willful misconduct. This indemnity shall be a continuing obligation of the Fund, its successors and assigns, notwithstanding the termination of this Agreement.

 

2.        Without limiting the generality of the foregoing, Custodian sep be under no obligation to inquire into, and shall not be liable for:

 

(a)        Any Losses incurred by the Fund or any other person as a result of the receipt or acceptance of fraudulent, forged or invalid Securities, or Securities which are otherwise not freely transferable or deliverable without encumbrance in any relevant market;

 

(b)        The validity of the issue of any Securities purchased, sold, or written by or for the Fund, the legality of the purchase, sale or writing thereof, or the propriety of the amount paid or received therefor;

 

(c)        The legality of the sale or redemption of any Shares, or the propriety of the amount to be received or paid therefor;

 

(d)        The legality of the declaration or payment of any dividend or distribution by the Fund;

 

(e)        The legality of any borrowing by the Fund;

 

(f)        The legality of any loan of portfolio Securities, nor shall Custodian be under any duty or obligation to see to it that any cash or collateral delivered to it by a broker, dealer or financial institution or held by it at any time as a result of such loan of portfolio Securities is adequate security for the Fund against any loss it might sustain as a result of such loan, which duty or obligation shall be the sole responsibility of the Fund. In addition, Custodian shall be under no duty or obligation to see that any broker, dealer or financial institution to which portfolio Securities of the Fund are lent makes payment to it of any dividends or interest which are payable to or for the account of the Fund during the period of such loan or at the termination of such loan, provided, however that Custodian shall promptly notify the Fund in the event that such dividends or interest are not paid and received when due;

 

(g)        The sufficiency or value of any amounts of money and/or Securities held in any Special Account in connection with transactions by the Fund; whether any broker, dealer, futures commission merchant or clearing member makes payment to the Fund of any variation margin payment or similar payment which the Fund may be entitled to receive from such broker, dealer, futures commission merchant or clearing member, or whether any payment received by Custodian from any broker, dealer, futures commission merchant or clearing member is the amount the Fund is entitled to receive, or to notify the Fund of Custodian's receiptor non-receipt of any such payment; or

 

(h)        Whether any Securities at any time delivered to, or held by it or by any Subcustodian, for the account of a Fund are such as properly may be held by the Fund under the provisions of its then current prospectus and statement of additional information, or to ascertain whether any transactions by the Fund, whether or not involving Custodian, are such transactions as may properly be engaged in by the Fund.

 

3.        Custodian may, with respect to questions of law specifically regarding an Account, obtain the advice and opinion of counsel to the independent trustees of a Fund or other counsel that is mutually agreed upon by the Funds and the Custodian and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with such advice.

 

4.        Custodian shall be under no obligation to take action to collect any amount payable on Securities in default, or if payment is refused after due demand and presentment.

 

5.        Custodian shall have no duty or responsibility to inquire into, make recommendations, supervise, or determine the suitability of any transactions affecting any Account.

 

6.        The Fund shall pay to Custodian the fees and charges as may be specifically agreed upon from time to time and such other fees and charges at Custodian's standard rates for such services as maybe applicable. The Fund shall reimburse Custodian for all costs associated with the conversion of the Fund's Securities hereunder and the transfer of Securities and records kept in connection with this Agreement. The Fund shall also reimburse Custodian, at cost, for out-of-pocket expenses which are a normal incident of the services provided hereunder.

 

7.        Custodian has the right to debit any cash account for any amount payable by the Fund in connection with any and all obligations of the Fund to Custodian. In addition to the rights of Custodian under applicable law and other agreements, at any time when the Fund shall not have honored any of its obligations to Custodian, Custodian shall have the right without notice to the Fund to retain or set-off, against such obligations of the Fund, any Securities or cash Custodian or a BNY Affiliate may directly or indirectly hold for the account of the Fund, and any obligations (whether matured or unmatured) that Custodian or a BNY Affiliate may have to the Fund in any currency or Composite Currency Unit. Any such asset of, or obligation to, the Fund may be transferred to Custodian and any BNY Affiliate in order to effect the above rights.

 

8.        The Fund agrees to forward to Custodian a Certificate or Instructions confirming Oral Instructions by the close of business of the same day that such Oral Instructions are given to Custodian. The Fund agrees that the fact that such confirming Certificate or Instructions are not received or that a contrary Certificate or contrary Instructions are received by Custodian shall in no way affect the validity or enforceability of transactions authorized by such Oral Instructions and effected by Custodian. If the Fund elects to transmit Instructions through an on-line communications system offered by Custodian, the Fund's use thereof shall be subject to the Terms and Conditions attached as Appendix J hereto, and Custodian shall provide user and authorization codes, passwords and authentication keys only to an Authorized Person or a person reasonably believed by Custodian to be an Authorized Person.

 

9.        The books and records pertaining to the Fund which are in possession of Custodian shall be the property of the Fund. Such books and records shall be prepared and maintained as required by the '40 Act and the rules thereunder. The Fund, or its authorized representatives, shall have access to such books and records during Custodian's normal business hours. Upon the reasonable request of the Fund, copies of any such books and records shall be provided by Custodian to the Fund or its authorized representative. Upon the reasonable request of the Fund, Custodian shall provide in hard copy or on computer disc any records included in any such delivery which are maintained by Custodian on a computer disc, or are similarly maintained.

 

10.        It is understood that Custodian is authorized to supply any information regarding the Accounts which is required by any law, regulation or rule now or hereafter in effect. The Custodian shall provide the Fund with any report obtained by the Custodian on the system of internal accounting control of a Depository, and with such reports on its own system of internal accounting control as the Fund may reasonably request from time to time.

 

11.        Custodian shall have no duties or responsibilities whatsoever except such duties and responsibilities as are specifically set forth in this Agreement, and no covenant or obligation shall be implied against Custodian in connection with this Agreement.

 

ARTICLE IX

TERMINATION

 

1.        Either of the parties hereto may terminate this Agreement by giving to the other party a notice in writing specifying the date of such termination, which shall be not less than ninety (90) days after the date of giving of such notice. In the event such notice is given by the Fund, it shall be accompanied by a copy of a resolution of the board of the Fund, certified by the Secretary or any Assistant Secretary, electing to terminate this Agreement and designating a successor Custodian or Custodians, each of which shall be a bank or trust company having not less than $2,000,000 aggregate capital, surplus and undivided profits. In the event such notice is given by Custodian, the Fund shall, on or before the termination date, deliver to Custodian a copy of a resolution of the board of the Fund, certified by the Secretary or any Assistant Secretary, designating a successor Custodian or Custodians. In the absence of such designation by the Fund, Custodian may designate a successor Custodian which shall be a bank or trust company having not less than $2,000,000 aggregate capital, surplus and undivided profits. Upon the date set forth in such notice this Agreement shall terminate, and Custodian shall upon receipt of a notice of acceptance by the successor Custodian on that date deliver directly to the successor Custodian all Securities and money then owned by the Fund and held by it as Custodian, after deducting an fees, expenses and other accounts for the payment or reimbursement of which it shall then be entitled.

 

2.        If a successor Custodian is not designated by the Fund or Custodian in accordance with the preceding Section, the Fund shall upon the date specified in the notice of termination of this Agreement and upon the delivery by Custodian of all Securities (other than Securities which cannot be delivered to the Fund) and money then owned by the Fund be deemed to be its own Custodian and Custodian shall thereby be relieved of all duties and responsibilities pursuant to this Agreement, other than the duty with respect to Securities which cannot be delivered to the Fund to hold such Securities hereunder in accordance with this Agreement.

 

ARTICLE X

MISCELLANEOUS

 

1.        The Fund agrees to furnish to Custodian a new Certificate of Authorized Persons in the event of any change in the then present Authorized Persons. Until such new Certificate is received, Custodian shall be fully protected in acting upon Certificates or Oral Instructions of such present Authorized Persons.

 

2.        Any notice or other instrument in writing, authorized or required by this Agreement to be given to Custodian, shall be sufficiently given if addressed to Custodian and received by it at its offices at One Wall Street, New York, New York 10286, or at such other place as Custodian may from time to time designate in writing.

 

3.        Any notice or other instrument in writing, authorized or required by this Agreement to be given to the Fund shall be sufficiently given if addressed to the Fund and received by it at its offices at 5800 Corporate Drive, Pittsburgh PA, J5237-7000 or at such other place as the Fund may from time to time designate in writing.

 

4.        Each and every right granted to either party hereunder or under any other document delivered hereunder or in connection herewith, or allowed it by law or equity, shall be cumulative and may be exercised from time to time. No failure on the part of either party to exercise, and no delay in exercising, any right will operate as a waiver thereof, nor will any single or partial exercise by either party of any right preclude any other or future exercise thereof or the exercise of any other right.

 

5.        In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any exclusive jurisdiction, the validity, legality and enforceability of the remaining provisions shall not in any way be affected thereby. This Agreement may not be amended or modified in any manner except by a written agreement executed by both parties, except that any amendment to the Schedule I hereto need be signed only by the Fund and any amendment to Appendix I hereto need be signed only by Custodian. This Agreement shall extend to and shall be binding upon the parties hereto, and their respective successors and assigns; provided, however, that this Agreement shall not be assignable by either party without the written consent of the other.

 

6.        This Agreement shall be construed in accordance with the substantive laws of the State of New York, without regard to conflicts of laws principles thereof. The Fund and Custodian hereby consent to the jurisdiction of a state or federal court situated in New York City, New York in connection with any dispute arising hereunder. The Fund hereby irrevocably waives, to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to the laying of venue of any such proceeding brought in such a court and any claim that such proceeding brought in such a court has been brought in an inconvenient forum. The Fund and Custodian each hereby irrevocably waives any and all rights to trial by jury in any legal proceeding arising out of or relating to this Agreement.

 

7.        This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute only one instrument.

 

8.        The Custodian is expressly put on notice of the limitation of liability as set forth in the Declaration of Trust of those registered investment companies which are business trusts and agrees that the obligations and liabilities assumed by a registered investment company or any Series pursuant to this Agreement, including, without limitation, any obligation or liability to indemnify the Custodian, 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 registered investment company or Series, or any of them. In addition, in connection with the discharge and satisfaction of any claim made by the Custodian involving more than one Fund, the Trustees or Officers of such Funds shall have the exclusive right to determine the appropriate allocations of liability for any claim between or among the Funds.

 

9.        The Bank hereby represents and warrants that it has implemented and shall maintain appropriate measures designed to satisfy the requirements of federal and New York law applicable to the Bank with respect to the confidentiality of the portfolio holdings and transactions of each Fund. Upon request, the Bank shall annually make available to each Fund such summaries or audit reports, including any SAS 70 report, as the Bank generally makes available to its similar customers.

See Tenth Amendment dated 3/25/11 for new Article XI

 

IN WITNESS WHEREOF, the Funds and Custodian have caused this Agreement to be executed by their respective officers, thereunto duly authorized, as of the day and year first above written.

 

Each of the registered investment companies or series thereof listed on Schedule II to this Agreement

 

 

By: /s/ Richard J. Thomas

Title: Treasurer

 

THE BANK OF NEW YORK

 

 

By: /s/ Edward G. McGann

Title: EDWARD G. McGANN

MANAGING DIRECTOR

 
 

SCHEDULE I

CERTIFICATE OF AUTHORIZED PERSONS

 

 

[          ]

 

 
 

See Amendment dated 11/8/07

 

SCHEDULE II

 

Federated Capital Reserves Fund a portfolio of Money Market Obligations Trust

 

Federated Government Reserves Fund a portfolio of Money Market Obligations Trust

 

Federated Municipal Trust a portfolio of Money Market Obligations Trust

 
 

APPENDIX I

 

THE BANK OF NEW YORK

 

ON-LINE COMMUNICATIONS SYSTEM (THE “SYSTEM”)

 

TERMS AND CONDITIONS

 

1.       License; Use. Upon delivery to an Authorized Person or a person reasonably believed by Custodian to be an Authorized Person of the Fund of software enabling the Fund to obtain access to the System (the “Software”), Custodian grants to the Fund a personal, nontransferable and nonexclusive license to use the Software solely for the purpose of transmitting Written Instructions, receiving reports, making inquiries or otherwise communicating with Custodian in connection with the Account(s). The Fund shall use the Software solely for its own internal and proper business purposes and not in the operation of a service bureau. Except as set forth herein, no license or right of any kind is granted to the Fund with respect to the Software. The Fund acknowledges that Custodian and its suppliers retain and have title and exclusive proprietary rights to the Software, including any trade secrets or other ideas, concepts, know-how, methodologies, or information incorporated therein and the exclusive rights to any copyrights, trademarks and patents (including registrations and applications for registration of either), or other statutory or legal protections available in respect thereof. The Fund further acknowledges that all or a part of the Software may be copyrighted or trademarked (or a registration or claim made therefor) by Custodian or its suppliers. The Fund shall not take any action with respect tot the Software inconsistent with the foregoing acknowledgement, nor shall the Fund attempt to decompile, reverse engineer or modify the Software. The Fund may not coy, sell, lease or provide, directly or indirectly, any of the Software of any portion thereof to any other person or entity without Custodian’s prior written consent. The Fund may not remove any statutory copyright notice or other notice included in the Software or on any media containing the Software. The Fund shall reproduce any such notice on any reproduction of the Software and shall add any statutory copyright notice or other notice to the Software or media upon Custodian’s request.

 

2.       Equipment. The Fund shall obtain and maintain at its own cost and expense all equipment and services, including but not limited to communications services, necessary for it to utilize the Software and obtain access to the System, and Custodian shall not be responsible for the reliability or availability of any such equipment or services.

 

3.       Proprietary Information. The Software, any data base and any proprietary data, processes, information and documentation made available to the Fund (other than which are or become part of the public domain or are legally required to be made available to the public) (collectively, the “Information”), are the exclusive and confidential property of Custodian or its suppliers. The Fund shall keep the Information confidential by using the same care and discretion that the Fund uses with respect to its own confidential property and trade secrets, but not less than reasonable care. Upon termination of the Agreement or the Software license granted herein for any reason, the Fund shall return to Custodian any and all copies of the Information which are in its possession or under its control.

 

4.       Modifications. Custodian reserves the right to modify the Software from time to time and the Fund shall install new releases of the Software as Custodian may direct. The Fund agrees not to modify or attempt to modify the Software without the Custodian’s prior written consent. The Fund acknowledges that any modifications to the Software, whether by the Fund or Custodian and whether with or without Custodian’s consent, shall become the property of Custodian.

 

5.       NO REPRESENTATIONS OR WARRANTIES. CUSTODIAN AND ITS MANUFACTURERS AND SUPPLIERS MAKE NO WARRANTIES OR REPRESENTATIONS WITH RESPECT TO THE SOFTWARE, SERVICES OR ANY DATABASE, EXPRESS OR IMPLIED, IN FACT OR IN LAW, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. THE FUND ACKNOWLEDGES THAT THE SOFTWARE, SERVICES AND ANY DATABASE ARE PROVIDED “AS IS.” IN NO EVENT SHALL CUSTODIAN OR ANY SUPPLIER BE LIABLE FOR ANY DAMAGES, WHETHER DIRECT, INDIRECT SPECIAL, OR CONSEQUENTIAL, WHICH THE FUND MAY INCUR IN CONNECTION WITH THE SOFTWARE, SERVICES OR ANY DATABASE, EVEN IF CUSTODIAN OR SUCH SUPPLIER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL CUSTODIAN OR ANY SUPPLIER BE LIABLE FOR ACTS OF GOD, MACHINE OR COMPUTER BREAKDOWN OR MALFUNCTION, INTERRUPTION OR MALFUNCTION OF COMMUNICATION FACILITIES, LABOR DIFFICULTIES OR ANY OTHER SIMILAR OR DISSIMILAR CAUSE BEYOND THEIR REASONABLE CONTROL.

 

6.       Security; Reliance; Unauthorized Use. The Fund will cause all persons utilizing the Software and System to treat all applicable user and authorization codes, passwords and authentication keys with extreme care, and it will establish internal control and safekeeping procedures to restrict the availability of the same to persons duly authorized to give Instructions. Custodian is hereby irrevocably authorized to act in accordance with and rely on Instructions received by it through the System. The Fund acknowledges that it is its sole responsibility to assure that only persons duly authorized use the System and that Custodian shall not be responsible nor liable for any unauthorized use thereof.

 

7.       System Acknowledgements. Custodian shall acknowledge through the System its receipt of each transmission communicated through the System, and in the absence of such acknowledgment Custodian shall not be liable for any failure to act in accordance with such transmission and the Fund may not claim that such transmission was received by Custodian.

 

8.       EXPORT RESTRICTIONS. EXPORT OF THE SOFTWARE IS PROHIBITED BY UNITED STATES LAW. THE FUND MAY NOT UNDER ANY CIRCUMSTANCES RESELL, DIVERT, TRANSFER, TRANSSHIP OR OTHERWISE DISPOSE OF THE SOFTWARE (IN ANY FORM) IN OR TO ANY OTHER COUNTRY. IF CUSTODIAN DELIVERED THE SOFTWARE TO THE FUND OUTSIDE OF THE UNITED STATES, THE SOFTWARE WAS EXPORTED FROM THE UNITED STATES IN ACCORDANCE WITH THE EXPORTER ADMINISTRATION REGULATIONS. DIVERSION CONTRARY TO U.S. LAW IS PROHIBITED. The Fund hereby authorizes Custodian to report its name and address to government agencies to which Custodian is required to provide such information by law.

 

9.       ENCRYPTION. The Fund acknowledges and agrees that encryption may not be available for every communication through the System, or for all data. The Fund agrees that Custodian may deactivate any encryption features at any time, without notice or liability to the Fund, for the purpose of maintaining, repairing or troubleshooting the System or the Software.

 
 

JOINT TRADING ACCOUNT CUSTODY AGREEMENT

 

(Repurchase Transactions)

 

Agreement made as of June 7, 2005, between the Funds listed on Schedule I hereto (individually, a “Fund”; collectively, the “Funds”) and The Bank of New York (the “Custodian”).

 

WITNESSETH

 

WHEREAS, Custodian is presently the custodian for each Fund pursuant to a separate custody agreement between such Funds and Custodian (each, a “Custody Agreement”; collectively, the “Custody Agreements”); and

 

WHEREAS, the Funds are permitted to enter into repurchase transactions through joint trading accounts; and

 

WHEREAS, Custodian is willing to act as custodian of the assets of each Fund maintained in joint trading accounts in accordance with the Custody Agreements and this Agreement; and

 

WHEREAS, all capitalized terms used by not defined herein shall have the meanings given them in the Custody Agreements;

 

NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth, the parties agree as follows:

 

1.       The Funds hereby request Custodian to establish and maintain certain joint trading accounts (the “Joint Trading Accounts”) to be used by the Funds for the purpose of engaging in repurchase transactions. Custodian agrees to establish and maintain the Joint Trading Accounts and hold cash transferred to the Joint Trading Account as provided herein.

 

2.       On each business day that Funds intend to enter into repurchase transactions through a Joint Trading Account, an Authorized Person shall on behalf of the applicable Funds deliver to Custodian a Certificate or Written Instructions disclosing each Fund’s interest in the monies transferred to each Joint Trading Account. Upon transfer on monies from the Joint Trading Account against receipt of securities into Joint Trading Account or a similar Joint Trading Account established by a subcustodial bank pursuant to repurchase transactions (“Repo Assets”), Custodian shall confirm to each Fund the purchase of its proportionate interest in the Repo Assets, and shall identify such interest in Custodian’s books and records as belonging to such Fund by including the Funds’ Certificate or Written Instructions in the books and records of all appropriate Funds or otherwise. The following business day Custodian shall transfer the monies received upon completion of repurchase transactions from each Joint Trading Account or from a similar Joint Trading Account established at a bank pursuant to a Subcustodial Undertaking in connection with a Master Repurchase Agreement, plus any accrued income received, to each Fund’s Account in proportion to such Fund’s interest in such repurchase transactions.

 

3.       If Custodian in its sole discretion advances funds, or if there shall arise for whatever reason an overdraft or other indebtedness in connection with a Joint Trading Account, such advance, overdraft or indebtedness shall be deemed a loan made by Custodian to a Fund to which such advance, overdraft or indebtedness relates, payable on demand and bearing interest pursuant to the terms of such Fund’s Custody Agreement with Custodian. The Funds agree to furnish to Custodian promptly (and in any event by the close of business on the day of such advance, overdraft or indebtedness) with a Certificate or Written Instructions identifying each Fund to which such advance, overdraft or indebtedness relates, and the amount allocable to such Fund. In order to secure repayment of each Fund’s indebtedness to Custodian hereunder, each Fund hereby agrees that Custodian shall have a continuing lien and security interest in and to any property at any time held by it for the benefit of the Fund either hereunder or under Such Fund’s Custody Agreement with Custodian, or in which the Fund may have an interest which is then in Custodian’s possession or control or in possession or control of any third party acting in Custodian’s behalf, including in its behalf as Custodian under the Fund’s Custody Agreement with Custodian. Each Fund authorizes Custodian, in its sole discretion, at any time to charge any advance, overdraft or indebtedness together with interest due thereon against any balance of accounts standing to the Fund’s credit on the books of Custodian, including those books maintained by Custodian in its capacity as Custodian for the Fund under is Custody Agreement with the Fund. Notwithstanding, anything in this Agreement to the contrary, provided that Custodian and a Fund are parties to a Custodial Undertaking in Connection with Master Repurchase Agreement (collectively, the “Custodial Undertakings”), Custodian agrees that any securities held by Custodian in connection with a repurchase agreement entered into by such Fund and subject to the Custodian Undertakings shall not be subject to any security interest, lien or right of setoff by Custodian or any third party claiming through Custodian and Custodian shall not pledge, encumber, hypothecate, transfer, dispose of, or otherwise grant any third party an interest in, any such securities.

 

3.       It is expressly understood and agreed that in performing hereunder, Custodian is relying solely upon information contained in Certificates and Written Instructions received by it from time to time, has no independent knowledge of the terms and conditions of any repurchase transactions entered by or on behalf of any Funds, and shall have no duty to inquire into any of such terms and conditions nor any valuation responsibilities (including mark-to-market) with regard to securities and monies which are the subject of repurchase transactions hereunder. Custodian’s sole responsibility in settling transactions through the Joint Trading Account shall be to receive and deliver securities and monies in accordance with instructions contained in Certificates and Written Instructions and to comply with paragraph 2 of this Agreement.

 

4.       Each Fund hereby represents and warrants, which representations and warranties shall be continuing and shall be deemed to be reaffirmed upon each instruction given by each Fund, that

 

(a)       its execution and delivery of this Agreement and its performance hereunder has been duly authorized by its Board of Directors or Board of Trustees (as the case may be) and constitutes is several, but not joint, binding obligation;

 

(b)       the person or persons executing this Agreement on its behalf has and have been duly and properly authorized to do so;

 

(c)       upon allocation of any advance, overdraft or indebtedness to its account pursuant to paragraph 2 above, its total borrowings from all sources (including Custodian) shall be in conformity with the requirements and limitations set forth in the Investment Company Act of 1940, as amended, and its Prospectus.

 

5.       This Agreement is supplemental to the Custody Agreement between Custodian and each Fund and the assets of each Fund shall be maintained and administered by Custodian subject to the terms and conditions of the Custody Agreement. In the event of any conflict between the terms and conditions of this Agreement and the Custody Agreement of any Fund, the terms and conditions of this Agreement shall govern and control.

 

6.       This Agreement shall be construed in accordance with the laws of the State of New York without giving effect to the conflict of law principles thereof. This Agreement may not be amended or modified in any manner except by a written instrument executed by each Fund and Custodian. This Agreement may be terminated with respect to any Fund by either Custodian or such Fund upon thirty (30) days prior written notice.

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers, thereunto duly authorized, as of the day and year first above written.

 

By: /s/ Richard J. Thomas

On behalf of each Fund listed on
Schedule I hereto

Title: Treasurer

 

THE BANK OF NEW YORK

 

By: /s/ Edward G. McGann

Title: Managing Director

 
 

See Amendment dated 11/8/07

 

SCHEDULE I

 

Federated Capital Reserves Fund a portfolio of Money Market Obligations Trust

 

Federated Government Reserves Fund a portfolio of Money Market Obligations Trust

 

Federated Municipal Trust a portfolio of Money Market Obligations Trust

 
 

JOINT TRADING ACCOUNT

 

REPURCHASE TRANSACTION CONFIRMATION

 

 

The Bank of New York hereby confirms the purchase by each Fund identified in the attached Certificate of its proportionate share of an undivided interest in the securities transferred to the Joint Trading Account # , as such interests are set forth in the attached Certificate.

 

 

Date:

 

THE BANK OF NEW YORK

 

 

 

By:

(Authorized Signature)

 
 

EXHIBIT C

 

FOREIGN CUSTODY MANAGER AGREEMENT

AGREEMENT made as of November 8, 2007 between the Funds listed on Schedule I to this Agreement (the “Funds”) and The Bank of New York (“BNY”).

W I T N E S S E T H:

WHEREAS, the Funds desire to appoint BNY as a Foreign Custody Manager on the terms and conditions contained herein;

WHEREAS, BNY desires to serve as a Foreign Custody Manager and perform the duties set forth herein on the terms and conditions contained herein;

NOW THEREFORE, in consideration of the mutual promises hereinafter contained in this Agreement, the Funds and BNY hereby agree as follows:

ARTICLE I
DEFINITIONS

Whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, shall have the following meanings:

1.“Board” shall mean the board of directors or board of trustees, as the case may be, of the Funds.
2.“Eligible Foreign Custodian” shall have the meaning provided in the Rule.
3.“Monitoring System” shall mean a system established by BNY to fulfill the Responsibilities specified in clauses (d) and (e) of Section 1 of Article III of this Agreement.
4.“Responsibilities” shall mean the responsibilities delegated to BNY under the Rule as a Foreign Custody Manager with respect to each Specified Country and each Eligible Foreign Custodian selected by BNY, as such responsibilities are more fully described in Article III of this Agreement.
5.“Rule” shall mean Rule 17f-5 under the Investment Company Act of 1940, as amended.
6.“Specified Country” shall mean each country listed on Schedule II attached hereto and each country, other than the United States, constituting the primary market for a security with respect to which the Funds has given settlement instructions to The Bank of New York as custodian (the “Custodian”) under its Custody Agreement with the Funds.

ARTICLE II
BNY AS A FOREIGN CUSTODY MANAGER

1.      The Funds on behalf of its Board hereby delegate to BNY with respect to each Specified Country the Responsibilities.

2.      BNY accepts the Board’s delegation of Responsibilities with respect to each Specified Country and agrees in performing the Responsibilities as a Foreign Custody Manager to exercise reasonable care, prudence and diligence such as a person having responsibility for the safekeeping of the Funds’ assets would exercise.

3.      BNY shall provide to the Board at such times as the Board deems reasonable and appropriate based on the circumstances of the Funds’ foreign custody arrangements written reports notifying the Board of the placement of assets of the Funds with a particular Eligible Foreign Custodian within a Specified Country and of any material change in the arrangements (including the contract governing such arrangements) with respect to assets of the Funds with any such Eligible Foreign Custodian.

ARTICLE III
RESPONSIBILITIES

1.      Subject to the provisions of this Agreement, BNY shall with respect to each Specified Country select an Eligible Foreign Custodian. In connection therewith, BNY shall: (a) determine that assets of the Funds held by such Eligible Foreign Custodian will be subject to reasonable care, based on the standards applicable to custodians in the relevant market in which such Eligible Foreign Custodian operates, after considering all factors relevant to the safekeeping of such assets, including, without limitation, those contained in paragraph (c)(1) of the Rule; (b) determine that the Funds’ foreign custody arrangements with each Eligible Foreign Custodian are governed by a written contract with the Custodian which will provide reasonable care for the Funds’ assets based on the standards specified in paragraph (c)(1) of the Rule; (c) determine that each contract with an Eligible Foreign Custodian shall include the provisions specified in paragraph (c)(2)(i)(A) through (F) of the Rule or, alternatively, in lieu of any or all of such (c)(2)(i)(A) through (F) provisions, such other provisions as BNY determines will provide, in their entirety, the same or a greater level of care and protection for the assets of the Funds as such specified provisions; (d) monitor pursuant to the Monitoring System the appropriateness of maintaining the assets of the Funds with a particular Eligible Foreign Custodian pursuant to paragraph (c)(1) of the Rule and the performance of the contract governing such arrangement; and (e) advise the Funds whenever BNY determines under the Monitoring System that an arrangement (including, any material change in the contract governing such arrangement) described in preceding clause (d) no longer meets the requirements of the Rule.

2.      For purposes of preceding Section 1 of this Article, BNY’s determination of appropriateness shall not include, nor be deemed to include, any evaluation of Country Risks associated with investment in a particular country. For purposes hereof, “Country Risks” shall mean systemic risks of holding assets in a particular country including but not limited to (a) an Eligible Foreign Custodian’s use of any depositories that act as or operate a system or a transnational system for the central handling of securities or any equivalent book-entries; (b) such country’s financial infrastructure; (c) such country’s prevailing custody and settlement practices; (d) nationalization, expropriation or other governmental actions; (e) regulation of the banking or securities industry; (f) currency controls, restrictions, devaluations or fluctuations; and (g) market conditions which affect the orderly execution of securities transactions or affect the value of securities.

ARTICLE IV
REPRESENTATIONS

1.      The Funds hereby represent that: (a) this Agreement has been duly authorized, executed and delivered by the Funds, constitutes a valid and legally binding obligation of the Funds enforceable in accordance with its terms, and no statute, regulation, rule, order, judgment or contract binding on the Funds prohibits the Funds’ execution or performance of this Agreement; and (b) this Agreement has been approved and ratified by the Board.

2.      BNY hereby represents that: (a) BNY is duly organized and existing under the laws of the State of New York, with full power to carry on its businesses as now conducted, and to enter into this Agreement and to perform its obligations hereunder; (b) this Agreement has been duly authorized, executed and delivered by BNY, constitutes a valid and legally binding obligation of BNY enforceable in accordance with its terms, and no statute, regulation, rule, order, judgment or contract binding on BNY prohibits BNY’s execution or performance of this Agreement; and (c) BNY has established the Monitoring System.

ARTICLE V

CONCERNING BNY

1.      BNY shall not be liable for any costs, expenses, damages, liabilities or claims, including attorneys’ and accountants’ fees, sustained or incurred by, or asserted against, the Funds except to the extent the same arises out of the failure of BNY to exercise the care, prudence and diligence required by Section 2 of Article II hereof. In no event shall BNY be liable to the Funds, the Board, or any third party for special, indirect or consequential damages, or for lost profits or loss of business, arising in connection with this Agreement.

2.      The Funds shall indemnify BNY and hold it harmless from and against any and all costs, expenses, damages, liabilities or claims, including attorneys’ and accountants’ fees, sustained or incurred by, or asserted against, BNY by reason or as a result of any action or inaction, or arising out of BNY’s performance hereunder, provided that the Funds shall not indemnify BNY to the extent any such costs, expenses, damages, liabilities or claims arises out of BNY’s failure to exercise the reasonable care, prudence and diligence required by Section 2 of Article II hereof.

3.      For its services hereunder, the Funds agree to pay to BNY such compensation and out-of-pocket expenses as provided in the Custodian Agreement entered into between BNY and the Funds.

4.      BNY shall have only such duties as are expressly set forth herein. In no event shall BNY be liable for any Country Risks associated with investments in a particular country.

ARTICLE VI

MISCELLANEOUS

1.      This Agreement constitutes the entire agreement between the Funds and BNY as a foreign custody manager, and no provision in the Custody Agreement between the Funds and the Custodian shall affect the duties and obligations of BNY hereunder, nor shall any provision in this Agreement affect the duties or obligations of the Custodian under the Custody Agreement.

2.      Any notice or other instrument in writing, authorized or required by this Agreement to be given to BNY, shall be sufficiently given if received by it at its offices at 100 Church Street, 10th Floor, New York, New York 10286, or at such other place as BNY may from time to time designate in writing.

3.      Any notice or other instrument in writing, authorized or required by this Agreement to be given to the Funds shall be sufficiently given if received by it at its offices at 5800 Corporate Drive, Pittsburgh PA, J5237-7000 or at such other place as the Funds may from time to time designate in writing.

4.      In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions shall not in any way be affected thereby. This Agreement may not be amended or modified in any manner except by a written agreement executed by both parties. This Agreement shall extend to and shall be binding upon the parties hereto, and their respective successors and assigns; provided however, that this Agreement shall not be assignable by either party without the written consent of the other.

5.      This Agreement shall be construed in accordance with the substantive laws of the State of New York, without regard to conflicts of laws principles thereof. The Funds and BNY hereby consent to the jurisdiction of a state or federal court situated in New York City, New York in connection with any dispute arising hereunder. The Funds hereby irrevocably waives, to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to the laying of venue of any such proceeding brought in such a court and any claim that such proceeding brought in such a court has been brought in an inconvenient forum. The Funds and BNY each hereby irrevocably waives any and all rights to trial by jury in any legal proceeding arising out of or relating to this Agreement.

6.      The parties hereto agree that in performing hereunder, BNY is acting solely on behalf of the Funds and no contractual or service relationship shall be deemed to be established hereby between BNY and any other person by reason of this Agreement.

7.      This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute only one instrument.

8.      This Agreement shall terminate simultaneously with the termination of the Custody Agreement between the Funds and the Custodian, and may otherwise be terminated by either party giving to the other party a notice in writing specifying the date of such termination, which shall be not less than thirty (30) days after the date of such notice.

9.      The Custodian is expressly put on notice of the limitation of liability as set forth in the Declaration of Trust of those registered investment companies which are business trusts and agrees that the obligations and liabilities assumed by a registered investment company or any Series pursuant to this Agreement, including, without limitation, any obligation or liability to indemnify the Custodian, 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 registered investment company or Series, or any of them. In addition, in connection with the discharge and satisfaction of any claim made by the Custodian involving more than one Fund, the Trustees or Officers of such Funds shall have the exclusive right to determine the appropriate allocations of liability for any claim between or among the Funds.

 

IN WITNESS WHEREOF, the Funds and BNY have caused this Agreement to be executed by their respective officers, thereunto duly authorized, as of the date first above written.

 

THE FUNDS LISTED ON SCHEDULE I

By: /s/ Richard A. Novak

Title: Treasurer

THE BANK OF NEW YORK

By: Joseph F. Keenan

Title: Managing Director

 
 

SCHEDULE I

 

Federated Capital Reserves Fund, a portfolio of Money Market Obligations Trust

 

Federated Government Reserves Fund, a portfolio of Money Market Obligations Trust

 

Federated Municipal Trust, a portfolio of Money Market Obligations Trust

 

Government Obligations Tax-Managed Fund, a portfolio of Money Market Obligations Trust

 

U.S. Treasury Cash Reserves, a portfolio of Money Market Obligations Trust

 

Automated Government Cash Reserves, a portfolio of Money Market Obligations Trust

 

Federated Market Opportunity Fund, a portfolio of Federated Equity Funds

 

Federated Stock Trust

 

 
 

SCHEDULE II

Specified Countries

Australia National Australia Bank Ltd
Austria Bank Austria Creditanstalt A.G.
Belgium ING Belgium SA/NV
Brazil Citibank N.A.
Canada Royal Bank of Canada
Czech Republic ING Bank N.V. Prague
Denmark Danske Bank
Egypt Citibank, N.A.
Finland Nordea Bank Finland plc
France BNP Paribas Securities Services/ CACEIS Bank
Germany BHF-BANK AG
Hong Kong HSBC
Hungary ING Bank (Hungary) Rt.
India Deutsche Bank AG Mumbai/ HSBC
Indonesia HSBC
Israel Bank Hapoalim B.M.
Italy Intesa Sanpaolo S.p.A.
Japan The Bank of Tokyo-Mitsubishi UFJ Ltd/ Mizuho Corporate Bank, Ltd.
Malaysia HSBC Bank Malaysia Berhad
Mexico Banco Nacional de Mexico
Netherlands ING Bank
New Zealand National Australia Bank
Norway DnB NOR Bank ASA
Poland ING Bank Slaski
Portugal Banco Comercial Portugues
Singapore United Overseas Bank Limited/ DBS Bank Ltd.
South Africa Standard Bank of South Africa Limited
South Korea HSBC
Spain Banco Bilbao Vizcaya Argentaria S.A./ Santander Investment, S.A.
Sweden Skandinaviska Enskilda Banken
Switzerland Credit Suisse, Zurich
Taiwan HSBC
Turkey Garanti Bank
United Kingdom The Bank of New York/ Deutsche Bank AG London (Depository and Clearing Centre)
 
 

EXHIBIT D

 

 

Non-Money Market Funds Fee Schedule

 

DOMESTIC CUSTODY (U.S. Securities Processing)

 

Safekeeping, Income Collection, Transaction Processing, Account Administration

 

0.25 of a basis point per annum on the average net assets of the Fund.

 

U.S. Security Transaction Charges (per transaction):

 

$4.50 DTC/FRB Book Entry Settlements

$4.00 Repurchase Agreements (each leg)

$5.00 Time Deposits

$5.00 Maturities

$20.00 Physical Settlements, Euroclear, Options, and Futures Transactions

$5.00 Paydowns

$4.00 Wire Transfers/Checks (not related to securities settlements)

$2.00 Interfund/Account Transactions

 

Manual Instruction Surcharge

Transactions instructed in a manner which does not facilitate Straight-Through-Processing will incur an additional $15 per transaction.

 

Out-of-Pocket Expenses

In addition to the above fee-schedule, Out-of-Pocket expenses will be charged as incurred. These charges would include but are not limited to:

  • Securities pricing.
  • Custom electronic interfaces and/or programming beyond normal and customary system development associated with conversion.
  • Local taxes, stamp duties or other assessments, including stock exchange fees, postage and insurance for shipping, facsimile reporting, extraordinary telecommunications fees or other unusual expenses, which are unique to a country in which the Funds are investing.

 

See Second Amendment, dated 9/5/08

Compensating Balance Arrangement

 

The Funds and The Bank of New York have entered into a compensating balance arrangement, which would allow the Funds to compensate the Bank for any overdrafts by maintaining a positive cash balance the next day. Conversely, on any day the Funds maintain a positive balance, they will be allowed to overdraw the account as compensation. In both cases, Federal Reserve requirements, currently 10%, will be assessed. Therefore, all overdrafts must be compensated at 100% of the total and all positive balances will allow for an overdraft of 90% of the total.

 

Balances for the tax-exempt portfolios will be permitted an open-ended roll forward. The taxable portfolios are closed out on a quarterly basis with no carry-over to the subsequent quarter. At the end of each quarter, the average overdraft will be assessed a fee of 1% above the actual Federal Funds rate at the end of the period. Any average positive balance will receive an earnings credit computed at the daily effective 90 day T-bill rate minus 0.25 bps on the last day of the period. Earnings credits will be offset against the Funds’ safekeeping fees.

 

 
 

GLOBAL CUSTODY (Non-US Securities Processing)

 

 

  Global  
  Safekeeping Fee Transaction Fee
Countries *(in basis points)1 (U.S. Dollars)2
Argentina 17.00 55
Australia 1.50 25
Austria 3.00 40
Bahrain 50.00 140
Bangladesh 50.00 145
Belgium 2.50 35
Bermuda 17.00 70
Botswana 50.00 140
Brazil 12.00 30
Bulgaria 30.00 85
Canada 1.00 10
Chile 20.00 80
China “A” Shares 15.00 80
China “B” Shares 15.00 60
Colombia 50.00 95
Costa Rica 14.00 65
Croatia 25.00 70
Cyprus 15.00 35
Czech Republic 18.00 50
Denmark 2.00 35
Ecuador 30.00 55
Egypt 30.00 85
Estonia 10.00 60
Euromarket/Euroclear3 1.00 10
Euromarket/Clearstream 1.00 10
Finland 3.50 35
France 2.00 30
Germany 1.50 25
Ghana 50.00 140
Greece 9.00 40
Hong Kong 3.00 45
Hungary 20.00 55
Iceland 11.00 35
India 13.00 105
Indonesia 11.00 80
Ireland (Equities) 3.00 33
Ireland (Gov’t Bonds) 1.00 13
Israel 20.00 40
Italy 1.50 35
Ivory Coast 50.00 140
Jamaica 50.00 60
Japan 1.75 20
Jordan 50.00 140
Kazakhstan 53.00 140
Kenya 48.00 140
Latvia 50.00 45
Lebanon 50.00 140
Lithuania 20.00 43
Luxembourg 10.00 80
Malaysia 4.50 45
Malta 20.00 63
Mauritius 25.00 100
Mexico 6.50 30
Morocco 50.00 95
Namibia 50.00 60
Netherlands 2.00 25
New Zealand 2.00 35
Nigeria 50.00 60
Norway 2.50 35
Oman 50.00 140
Pakistan 50.00 140
Peru 50.00 83
Philippines 6.00 60
Poland 15.00 63
Portugal 5.00 50
Qatar 50.00 140
Romania 30.00 80
Russia Equities 40.00 95
Singapore 3.50 45
Slovak Republic 23.00 95
Slovenia 50.00 60
South Africa 2.50 30
South Korea 6.50 45
Spain 2.50 40
Sri Lanka 13.00 70
Swaziland 50.00 60
Sweden 2.00 30
Switzerland 2.00 35
Taiwan 10.00 60
Thailand 5.00 50
Trinidad & Tobago 50.00 53
Tunisia 50.00 53
Turkey 12.50 60
Ukraine 75.00 250
United Kingdom 0.50 10
Uruguay 75.00 83
Venezuela 50.00 140
Zambia 50.00 140
Zimbabwe 50.00 140
       

 

Not In Bank/Not in Custody Assets USA4………………………$500 per line per annum

 

Third Party Foreign Exchange Settlements      
$70 per non-USD currency movement        
           
Minimum charges imposed by Agent Banks/Local Administrators    
Brazil - 15 basis points for annual administrative charges      
           
Colombia - USD $600 per month minimum administration charge      
Ecuador - USD $800 monthly minimum per relationship      
Egypt - USD $400 monthly minimum per relationship      
           
Additional Charges        
Local taxes, stamp duties or other assessments, including stock exchange fees, postage and  
insurance for shipping, facsimile reporting, extraordinary telecommunications fees or other unusual  
expenses, which are unique to a country in which the Funds are investing  
       

 

 

 
 

EXHIBIT E

 

Money Market Funds Fee Schedule

 

DOMESTIC CUSTODY (U.S. Securities Processing)

 

Safekeeping, Income Collection, Transaction Processing, Account Administration

 

0.25 of a basis point per annum on the average net assets of the Fund.

 

U.S. Security Transaction Charges (per transaction):

 

$4.50 DTC/FRB Book Entry Settlements

$4.00 Repurchase Agreements (each leg)

$5.00 Time Deposits

$5.00 Maturities

$20.00 Physical Settlements, Euroclear, Options, and Futures Transactions

$5.00 Paydowns

$4.00 Wire Transfers/Checks (not related to securities settlements)

$2.00 Interfund/Account Transactions

 

Manual Instruction Surcharge

Transactions instructed in a manner which does not facilitate Straight-Through-Processing will incur an additional $15 per transaction.

 

Out-of-Pocket Expenses

In addition to the above fee-schedule, Out-of-Pocket expenses will be charged as incurred. These charges would include but are not limited to:

  • Securities pricing
  • Custom electronic interfaces and/or programming beyond normal and customary system development associated with conversion.
  • Local taxes, stamp duties or other assessments, including stock exchange fees, postage and insurance for shipping, facsimile reporting, extraordinary telecommunications fees or other unusual expenses, which are unique to a country in which the Funds are investing.

 

See Second Amendment, dated 9/5/08

Compensating Balance Arrangement

 

The Funds and The Bank of New York have entered into a compensating balance arrangement, which would allow the Funds to compensate the Bank for any overdrafts by maintaining a positive cash balance the next day. Conversely, on any day the Funds maintain a positive balance, they will be allowed to overdraw the account as compensation. In both cases, Federal Reserve requirements, currently 10%, will be assessed. Therefore, all overdrafts must be compensated at 100% of the total and all positive balances will allow for an overdraft of 90% of the total.

 

Balances for the tax-exempt portfolios will be permitted an open-ended roll forward. The taxable portfolios are closed out on a quarterly basis with no carry-over to the subsequent quarter. At the end of each quarter, the average overdraft will be assessed a fee of 1% above the actual Federal Funds rate at the end of the period. Any average positive balance will receive an earnings credit computed at the daily effective 90 day T-bill rate minus 0.25 bps on the last day of the period. Earnings credits will be offset against the Funds’ safekeeping fees.

 

 
 

GLOBAL CUSTODY (Non-US Securities Processing)

 

 

  Global  
  Safekeeping Fee Transaction Fee
Countries *(in basis points)1 (U.S. Dollars)2
Argentina 17.00 55
Australia 1.50 25
Austria 3.00 40
Bahrain 50.00 140
Bangladesh 50.00 145
Belgium 2.50 35
Bermuda 17.00 70
Botswana 50.00 140
Brazil 12.00 30
Bulgaria 30.00 85
Canada 1.00 10
Chile 20.00 80
China “A” Shares 15.00 80
China “B” Shares 15.00 60
Colombia 50.00 95
Costa Rica 14.00 65
Croatia 25.00 70
Cyprus 15.00 35
Czech Republic 18.00 50
Denmark 2.00 35
Ecuador 30.00 55
Egypt 30.00 85
Estonia 10.00 60
Euromarket/Euroclear3 1.00 10
Euromarket/Clearstream 1.00 10
Finland 3.50 35
France 2.00 30
Germany 1.50 25
Ghana 50.00 140
Greece 9.00 40
Hong Kong 3.00 45
Hungary 20.00 55
Iceland 11.00 35
India 13.00 105
Indonesia 11.00 80
Ireland (Equities) 3.00 33
Ireland (Gov’t Bonds) 1.00 13
Israel 20.00 40
Italy 1.50 35
Ivory Coast 50.00 140
Jamaica 50.00 60
Japan 1.75 20
Jordan 50.00 140
Kazakhstan 53.00 140
Kenya 48.00 140
Latvia 50.00 45
Lebanon 50.00 140
Lithuania 20.00 43
Luxembourg 10.00 80
Malaysia 4.50 45
Malta 20.00 63
Mauritius 25.00 100
Mexico 6.50 30
Morocco 50.00 95
Namibia 50.00 60
Netherlands 2.00 25
New Zealand 2.00 35
Nigeria 50.00 60
Norway 2.50 35
Oman 50.00 140
Pakistan 50.00 140
Peru 50.00 83
Philippines 6.00 60
Poland 15.00 63
Portugal 5.00 50
Qatar 50.00 140
Romania 30.00 80
Russia Equities 40.00 95
Singapore 3.50 45
Slovak Republic 23.00 95
Slovenia 50.00 60
South Africa 2.50 30
South Korea 6.50 45
Spain 2.50 40
Sri Lanka 13.00 70
Swaziland 50.00 60
Sweden 2.00 30
Switzerland 2.00 35
Taiwan 10.00 60
Thailand 5.00 50
Trinidad & Tobago 50.00 53
Tunisia 50.00 53
Turkey 12.50 60
Ukraine 75.00 250
United Kingdom 0.50 10
Uruguay 75.00 83
Venezuela 50.00 140
Zambia 50.00 140
Zimbabwe 50.00 140
       

 

Not In Bank/Not in Custody Assets USA4………………………$500 per line per annum

 

 

 

Third Party Foreign Exchange Settlements      
$70 per non-USD currency movement        
           
Minimum charges imposed by Agent Banks/Local Administrators    
Brazil - 15 basis points for annual administrative charges      
           
Colombia - USD $600 per month minimum administration charge      
Ecuador - USD $800 monthly minimum per relationship      
Egypt - USD $400 monthly minimum per relationship      
           
Additional Charges        
Local taxes, stamp duties or other assessments, including stock exchange fees, postage and  
insurance for shipping, facsimile reporting, extraordinary telecommunications fees or other unusual  
expenses, which are unique to a country in which the Funds are investing  
       

 

 

 

 
 

Amendment to

Custody Agreement

between

The Bank of New York

and

The Funds listed on Schedule II to the Custody Agreement, as amended from time to time

 

 

This Amendment (the “Amendment”) dated as of November 8, 2007 between The Bank of New York (“Custodian”) and the Funds listed on Schedule II to the Custody Agreement, as amended by Exhibit A attached hereto (each a “Fund”).

 

WHEREAS, the Federated Capital Reserves Fund, Federated Government Reserves Fund and Federated Municipal Trust (collectively, the “Federated Reserves Funds”), and Custodian, having executed the Custody Agreement dated June 7, 2005, now wish to make certain changes to the Custody Agreement and provisions thereof which provisions the Federated Reserves Funds and Custodian agree shall be deemed by them, and each of them, to be included as of the date of this Amendment within the Custody Agreement as if originally stated therein; and

 

WHEREAS, the Federated Reserves Funds and the Custodian agree to the addition of the following funds to the Custody Agreement: Government Obligations Tax-Managed Fund, U.S. Treasury Cash Reserves, and Automated Government Cash Reserves, each a portfolio of Money Market Obligations Trust; Federated Market Opportunity Fund, a portfolio of Federated Equity Funds; and Federated Stock Trust; and

 

WHEREAS, the Funds’ Board desires to delegate certain of its responsibilities for performing the services set forth in paragraphs (c)(1), (c)(2) and (c)(3) of Rule 17f-5 of the Investment Company Act of 1940 to the Custodian as Foreign Custody Manager and the Custodian agrees to accept such delegation of responsibilities; and

 

WHEREAS, the Custody Agreement is amended to include a Fee Schedule for non-money market funds;

 

WHEREAS, the Custody Agreement Fee Schedule for non-money market funds is amended to reduce the interest rate on overdrafts from 2% to 1% and to include a Global Custody Fee Schedule; and

 

WHEREAS, the Custody Agreement Fee Schedule for money market funds is amended to, include three new money market funds, to reduce the interest rate on overdrafts from 2% to 1% and to include a Global Custody Fee Schedule.

 

NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the Funds and Custodian hereby agree as follows:

 

1.       Schedule II of the Custody Agreement and Schedule I of the Joint Trading Account Agreement are each replaced with the Schedule II and Schedule I respectively, attached to this Amendment as Exhibits A and B, respectively.

 

2. The Custodian shall serve as Foreign Custody Manager in accordance with the Foreign Custody Management Agreement, attached to this Amendment as Exhibit C.

 

3. The Custody Agreement is amended to include a Fee Schedule for non-money market funds, attached to this Amendment as Exhibit D.

 

4. The Fee Schedule for non-money market funds is hereby added to the Custody Agreement in the form attached to this Amendment as Exhibit D.

 

5. The Fee Schedule for money funds is amended to include Government Obligations Tax-Managed Fund, U.S. Treasury Cash Reserves, and Automated Government Cash Reserves, each a portfolio of Money Market Obligations Trust, to reduce the interest rate on overdrafts from 2% to 1% above the actual Federal Funds rate at the end of the period and to provide a Global Custody Fee schedule, attached to this Amendment as Exhibit E.

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their duly designated officers below as of the day and year first above written.

 

ACKNOWLEDGED AND AGREED:

Custodian:

 

THE BANK OF NEW YORK

On behalf of each of the funds indicated on Schedule II of the Custody Agreement, as amended from time to time.

 

   
   
By:  /s/ Joseph F. Keenan By:  /s/ Richard A. Novak
Title:  Managing Director Title:  Treasurer

 

 

 
 

EXHIBIT A

 

CUSTODY AGREEMENT

SCHEDULE II

 

Federated Capital Reserves Fund, a portfolio of Money Market Obligations Trust

 

Federated Government Reserves Fund, a portfolio of Money Market Obligations Trust

 

Federated Municipal Trust, a portfolio of Money Market Obligations Trust

 

Government Obligations Tax-Managed Fund, a portfolio of Money Market Obligations Trust

 

U.S. Treasury Cash Reserves, a portfolio of Money Market Obligations Trust

 

Automated Government Cash Reserves, a portfolio of Money Market Obligations Trust

 

Federated Market Opportunity Fund, a portfolio of Federated Equity Funds

 

Federated Stock Trust

 

 

 
 

EXHIBIT B

 

JOINT TRADING ACCOUNT AGREEMENT

SCHEDULE I

 

Federated Capital Reserves Fund, a portfolio of Money Market Obligations Trust

 

Federated Government Reserves Fund, a portfolio of Money Market Obligations Trust

 

Federated Municipal Trust, a portfolio of Money Market Obligations Trust

 

Government Obligations Tax-Managed Fund, a portfolio of Money Market Obligations Trust

 

U.S. Treasury Cash Reserves, a portfolio of Money Market Obligations Trust

 

Automated Government Cash Reserves, a portfolio of Money Market Obligations Trust

 

Federated Market Opportunity Fund, a portfolio of Federated Equity Funds

 

Federated Stock Trust

 

 

 
 

Second Amendment to the Custody Agreement

 

 

This Amendment is made as of September 5, 2008 to the Custody Agreement (the “Agreement”) dated June 7, 2005 and amended November 8, 2007 between the Funds listed on Schedule II attached hereto (each a "Fund") and The Bank of New York Mellon (the "Custodian").

 

WHEREAS, each Fund and the Custodian wish to modify the provisions of the Agreement as set forth below;

 

NOW THEREFORE, each the Fund and the Custodian agree to the following amendments.

 

1.       Section 14. “Internal Operating Account” to Article I of the Agreement shall be revised as follows:

 

14. “Internal Operating Account” shall mean accounts established by the Custodian at the direction of a Fund to facilitate the intraday transfer of monies to or from the Custodian representing aggregated subscriptions or redemptions for allocation to individual Funds as indicated by the Fund or its agent.

 

And;

 

Each Fund and the Custodian hereby amend Article V. Section 1 of the Agreement by replacing the first sentence of the section as follows:

 

If Custodian should in its sole discretion advance funds on behalf of any Fund which results in an overdraft at the end of any day, because the money held by Custodian in an Account, including an Internal Operating Account, for such Fund shall be insufficient to pay the total amount payable upon a purchase of Securities specifically allocated to such Fund, as set forth in a Certificate, Instructions or Oral Instructions, or if an overdraft arises in the separate account of a Fund for some other reason, including, without limitation, because of a reversal of a conditional credit or the purchase of any currency, or if the Fund is for any other reason indebted to Custodian with respect to a Fund, due to borrowing by a Fund from the Custodian, (except a borrowing for investment or for temporary or emergency purposes using Securities as collateral pursuant to a separate agreement and subject to the provisions of Section 2 of this Article), such overdraft or indebtedness shall be deemed to be a loan made by Custodian to the Fund for such Fund payable on demand and shall bear interest from the date incurred at a rate per annum as disclosed on the Fee Schedule between the Funds and the Custodian as such Fee Exhibit may be amended from time to time. 

 

2.       Within Exhibit D, the section entitled “Compensating Balance Arrangement” is replaced in its entirety with the following Amended and Restated section entitled “Compensating Balance Arrangement” as attached hereto.

 

3.       Within Exhibit E, the section entitled “Compensating Balance Arrangement” is replaced in its entirety with the following Amended and Restated section entitled “Compensating Balance Arrangement” as attached hereto.

 

4.       Each Exhibit A, Exhibit B, and Schedule I to Exhibit C, the Foreign Custody Manager Agreement, are updated to include the following new Funds:

 

Federated California Municipal Income Fund

Federated New York Municipal Income Fund

Federated North Carolina Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

 

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of the day and year first written above.

 

On behalf of each of the Funds indicated on Schedule II attached hereto

 

 

By: /s/ Richard A. Novak

Name: Richard A. Novak

Title: Treasurer

 

 

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Bruce L. Baumann

Title: Vice President

 
 

Amended and Restated

Exhibit D

 

Compensating Balance Arrangement

 

Each of the Funds listed below and The Bank of New York Mellon have entered into an earnings credit balance arrangement pursuant to which it has been agreed that 90% of any positive balances will be compensated at the 90 day T-Bill rate and 100% of overdrawn balances will be charged at a rate of 1% over the Fed Funds rate. Monthly, the net resultant credit or charge will be applied to the each Funds’ respective safekeeping fees. Credits that exceed the safekeeping fee may be carried over into the next billing period at the discretion of Custodian.

 

FUNDS

Federated Stock Trust

Federated Market Opportunity Fund

Federated California Municipal Income Fund

Federated North Carolina Municipal Income Fund

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

 
 

See Fifth Amendment dated 11/13/09 for Compensating Balance Arrangement

 

Amended and Restated

Exhibit E

 

Compensating Balance Arrangement

Each Fund listed below and The Bank of New York Mellon (the “Bank”) have entered into a average compensating balance arrangement, which would allow the Funds to compensate the Bank for any overdrafts by maintaining a positive cash balance and conversely, on any day a Fund maintains a positive balance, the respective Fund will be permitted to overdraw the account as compensation.

 

In each instance, Federal Reserve requirements (currently 10%), will be assessed. Therefore, all overdrafts must be compensated at 100% of the total and all positive balances will allow for an overdraft of up to 90% of the total (unless the positive balance is the result of an error on the part on the Bank, in which case the positive balance would be assessed at 100%). The Funds shall maintain the average compensating balance over quarterly periods (ending March, June, September and December for FGRF, FCRF and FMUTR; and ending February, May, August, and November for AGCR, USTCR and GOTMF). Average balances will be computed at the end of the quarter. Net positive balances will receive an earnings credit computed at the daily effective 90 – day T-Bill rate on the last day of a period. Net negative balances will be charged at the Fed Funds rate plus 1% on the last day of the period. Quarterly net credits or charges will be applied to the safekeeping fees. Credits that exceed the safekeeping fee will be carried over into the next billing period but must be applied in a 12 month cycle; all accumulated unapplied credits will expire in the final quarter of the cycle, i.e. in November or December. However, upon specific request from Fund, Custodian at its discretion may agree to carry forward into the next 12 month cycle any accumulated credits, contingent on their application within a specified time period.

 

Credits are not redeemable for cash and will expire in the event the relationship with the Funds is terminated.

 

FUNDS

Federated Capital Reserves Fund (FCRF)

Federated Government Reserve Fund (FGRF)

Federated Municipal Trust Fund (FMUTR)

US Treasury Cash Reserve Fund (USTCR)

Automated Government Cash Reserves (AGCR)

Government Obligations Tax Managed Fund (GOTMF)

 

 

 
 

 

Third Amendment to the Custody Agreement

 

 

This Amendment is made as of September 8, 2009 to the Custody Agreement (the “Agreement”) dated June 7, 2005, amended November 7, 2007 and September 5, 2008 between the Funds listed on Schedule II attached hereto (each a "Fund") and The Bank of New York Mellon (the "Custodian").

 

WHEREAS, each Fund and the Custodian wish to modify the provisions of the Agreement as set forth below;

 

NOW THEREFORE, each the Fund and the Custodian agree to the following amendments.

 

1.       Within Exhibit C, the section entitled Schedule II is replaced in its entirety with Amended and Restated Schedule II as attached hereto.

 

2.       Exhibit D, the fee schedule for non-money market funds, is amended to include a fee for the safekeeping of gold bullion and a transaction charge for settlement of trades involving same with restated Exhibit D as attached hereto.

 

3.       A Precious Metals Supplement is added as Exhibit F to include provisions for the custody of assets consisting of precious metals held for the Federated Market Opportunity Fund.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of the day and year first written above.

 

On behalf of each of the Funds indicated on Schedule II attached hereto

 

 

By: /s/ Richard A. Novak

Title: Treasurer

 

 

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Andrew Pfeifer

Title: Vice President

 
 

Custody Agreement

Schedule II

 

 

 

Federated Stock Trust

Federated Market Opportunity Fund

Federated California Municipal Income Fund

Federated North Carolina Municipal Income Fund

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

 

Federated Capital Reserves Fund

Federated Government Reserve Fund

Federated Municipal Trust Fund

US Treasury Cash Reserve Fund

Automated Government Cash Reserves

Government Obligations Tax Managed Fund

 

 

 

 

See Fourth Amendment adding new funds, effective 10/23/09

 
 

Custody Agreement

Amended and Restated

Exhibit C, Schedule II

 

Specified Countries

 

 

Country/Market Subcustodian(s)
Argentina Citibank N.A.
Australia National Australia Bank Limited
Austria UniCredit Bank Austria AG
Bahrain HSBC Bank Middle East Limited
Bangladesh Standard Chartered Bank
Belgium ING Belgium, SA/NV
Benin Société Générale de Banques en Côte d’Ivoire
Bermuda Bank of Bermuda Limited
Botswana Barclays Bank of Botswana Ltd.
Brazil Citibank N.A.  
Bulgaria ING Bank N.V.
Burkina Faso Société Générale de Banques en Côte d’Ivoire
Canada CIBC Mellon Trust Company
Cayman Islands The Bank of New York Mellon  
Channel Islands The Bank of New York Mellon
Chile Banco de Chile
China HSBC Bank (China) Company Limited
Colombia Cititrust Colombia S.A.
Costa Rica Banco BCT
Croatia Privredna Banka Zagreb d.d.
Cyprus EFG Eurobank Ergasias S.A.
Czech Republic ING Bank  N.V.
Denmark Danske Bank
Ecuador Banco de la Produccion S.A.
Egypt HSBC Bank Egypt S.A.E.   
Estonia SEB Pank AS
Euromarket Clearstream Banking Luxembourg S.A.
Euromarket Euroclear Bank
Finland Skandinaviska Enskilda Banken
France BNP Paribas Securities Services
France CACEIS Bank
Germany BHF Asset Servicing GmbH
Ghana Barclays Bank of Ghana Ltd.
Greece EFG Eurobank Ergasias S.A.
Guinea Bissau Société Générale de Banques en Côte d’Ivoire
Hong Kong HSBC Ltd.
Hungary ING Bank N.V.
Iceland New Landsbanki Islands
India Deutsche Bank AG
Indonesia HSBC Ltd.
Ireland The Bank of New York Mellon
Israel Bank Hapoalim B.M.
Italy Intesa Sanpaolo S.p.A
Ivory Coast Société Générale de Banques en Côte d’Ivoire
Japan Mizuho Corporate Bank Ltd. (MHCB)
Japan The Bank of Tokyo – Mitsubishi UFJ Ltd.
Jordan HSBC Bank Middle East Ltd.
Kazakhstan HSBC Kazakhstan
Kenya Barclays Bank of Kenya Ltd.
Kuwait HSBC Bank Middle East Ltd.
Latvia AS SEB banka
Lebanon HSBC Bank Middle East Ltd.
Lithuania SEB Bankas
Luxembourg Banque et Caisse d’Epargne de l’Etat (BCEEL)
Malaysia HSBC Bank Malaysia Berhad
Mali Société Générale de Banques en Côte d’Ivoire
Malta HSBC Bank Malta plc
Mauritius HSBC Ltd.
Mexico Banco Nacional de Mexico (BANAMEX)
Morocco Citibank Maghreb
Namibia Standard Bank Namibia Ltd
Netherlands BNY Mellon Asset Servicing BV
New Zealand National Australia Bank
Niger Société Générale de Banques en Côte d’Ivoire
Nigeria Stanbic IBTC Bank Plc  
Norway DnB NOR Bank ASA
Oman HSBC Bank Middle East Ltd.
Pakistan Deutsche Bank AG
Palestinian Autonomous Area HSBC Bank Middle East Ltd.
Peru Citibank del Peru, S.A.
Philippines HSBC Ltd.
Poland ING Bank Slaski
Portugal Banco Comercial Portugues
Qatar HSBC Bank Middle East Ltd.  
Romania ING Bank N.V.
Russia ING Bank (Eurasia)
Saudi Arabia SABB Securities Limited
Senegal Société Générale de Banques en Côte d’Ivoire
Serbia UniCredit Bank Austria AG
Singapore DBS Bank Ltd.
Singapore United Overseas Bank Ltd.
Slovak Republic ING Bank N.V.
Slovenia UniCredit Banka Slovenia d.d.
South Africa Standard Bank of South Africa
South Korea HSBC Ltd.  
Spain Banco Bilbao Vizcaya Argentaria S.A. (BBVA)
Spain Santander Investment S.A.
Sri Lanka HSBC Ltd.  
Swaziland Standard Bank Swaziland Ltd
Sweden Skandinaviska Enskilda Banken
Switzerland Credit Suisse
Taiwan Standard Chartered Bank (Taiwan) Ltd. / HSBC
Thailand Bangkok Bank Public Company Ltd.
Thailand HSBC Ltd
Togo Société Générale de Banques en Côte d’Ivoire  
Trinidad & Tobago Republic Bank Ltd.
Tunisia Banque Internationale Arabe de Tunisie
Turkey Deutsche Bank AS  
Ukraine ING Bank Ukraine
United Arab Emirates HSBC Bank Middle East Ltd.
United Kingdom Deutsche Bank AG
United Kingdom The Bank of New York Mellon
United States The Bank of New York Mellon
Uruguay Banco Itaú Uruguay S.A.
Venezuela Citibank N.A.  
Vietnam HSBC Bank (Vietnam) Ltd
Zambia Barclays Bank of Zambia Ltd
Zimbabwe Barclays Bank of Zimbabwe Ltd

 

 

 
 

Custody Agreement

Amended and Restated

Exhibit D

Non-Money Market Funds Fee Schedule

 

 

Domestic Custody (U.S. Securities Processing)

 

Safekeeping, Income Collection, Transaction Processing, Account Administration

0.25        of a basis point per annum on the average net assets of the Fund.

 

Gold Bullion Safekeeping – at the following rates, minimum $75,000 per annum:

$20 per 400oz bar per month

$10 per 100oz bar per month

 

U.S. Security Transaction Charges (per transaction):

$4.50 DTC/FRB Book Entry Settlements

$4.00 Repurchase Agreements (each leg)

$5.00 Time Deposits

$5.00 Maturities

$20.00 Physical Settlements, Euroclear, Options, and Futures Transactions

$5.00 Paydowns

$4.00 Wire Transfers/Checks (not related to securities settlements)

$2.00 Interfund/Account Transactions

 

Gold Bullion Transaction Charges

$ 5 per receipt trade

$20 per delivery per 400oz bar

$10 per delivery per 100oz bar

 

Manual Instruction Surcharge

Transactions instructed in a manner which does not facilitate Straight-Through-Processing will incur an additional $15 per transaction.

 

Out-of-Pocket Expenses

In addition to the above fee-schedule, Out-of-Pocket expenses will be charged as incurred. These charges would include but are not limited to:

  • Securities pricing
  • Custom electronic interfaces and/or programming beyond normal and customary system development associated with conversion.
  • Local taxes, stamp duties or other assessments, including stock exchange fees, postage and insurance for shipping, facsimile reporting, extraordinary telecommunications fees or other unusual expenses, which are unique to a country in which the Funds are investing.

 

 
 

Global Custody (non-U.S. securities processing)

 

  Global  
  Safekeeping Fee Transaction Fee5
Countries *(in basis points)6 (U.S. Dollars)
Argentina 17.00 55
Australia 1.50 25
Austria 3.00 40
Bahrain 50.00 140
Bangladesh 50.00 145
Belgium 2.50 35
Bermuda 17.00 70
Botswana 50.00 140
Brazil 12.00 30
Bulgaria 30.00 85
Canada 1.00 10
Chile 20.00 80
China “A” Shares 15.00 80
China “B” Shares 15.00 60
Colombia 50.00 95
Costa Rica 14.00 65
Croatia 25.00 70
Cyprus 15.00 35
Czech Republic 18.00 50
Denmark 2.00 35
Ecuador 30.00 55
Egypt 30.00 85
Estonia 10.00 60
Euromarket/Euroclear7 1.00 10
Euromarket/Clearstream 1.00 10
Finland 3.50 35
France 2.00 30
Germany 1.50 25
 
 

 

 

 

 Global  
  Safekeeping Fee Transaction Fee
Countries *(in basis points) (U.S. Dollars)
Ghana 50.00 140
Greece 9.00 40
Hong Kong 3.00 45
Hungary 20.00 55
Iceland 11.00 35
India 13.00 105
Indonesia 11.00 80  
Ireland (Equities) 3.00 33  
Ireland (Gov’t Bonds) 1.00 13  
Israel 20.00 40  
Italy 1.50 35  
Ivory Coast 50.00 140  
Jamaica 50.00 60  
Japan 1.75 20  
Jordan 50.00 140  
Kazakhstan 53.00 140  
Kenya 48.00 140  
Latvia 50.00 45  
Lebanon 50.00 140  
Lithuania 20.00 43  
Luxembourg 10.00 80  
Malaysia 4.50 45  
Malta 20.00 63  
Mauritius 25.00 100  
Mexico 6.50 30  
Morocco 50.00 95  
Namibia 50.00 60  
Netherlands 2.00 25  
New Zealand 2.00 35  
Nigeria 50.00 60  
Norway 2.50 35  
Oman 50.00 140  
Pakistan 50.00 140  
Peru 50.00 83  
Philippines 6.00 60  
Poland 15.00 63  
Portugal 5.00 50  
Qatar 50.00 140  
Romania 30.00 80  
Russia Equities 40.00 95  

 

 

 Global    
  Safekeeping Fee Transaction Fee  
Countries *(in basis points) (U.S. Dollars)  
Singapore 3.50 45  
Slovak Republic 23.00 95  
Slovenia 50.00 60  
South Africa 2.50 30  
South Korea 6.50 45  
Spain 2.50 40  
Sri Lanka 13.00 70  
Swaziland 50.00 60  
Sweden 2.00 30  
Switzerland 2.00 35  
Taiwan 10.00 60  
Thailand 5.00 50  
Trinidad & Tobago 50.00 53  
Tunisia 50.00 53  
Turkey 12.50 60  
Ukraine 75.00 250  
United Kingdom 0.50 10  
Uruguay 75.00 83  
Venezuela 50.00 140  
Zambia 50.00 140  
Zimbabwe 50.00 140  
           

 

Not In Bank/Not in Custody Assets USA8 ………………………$500 per line per annum

 

Third Party Foreign Exchange Settlements      
$70 per non-USD currency movement        
           
Minimum charges imposed by Agent Banks/Local Administrators    
Brazil - 15 basis points for annual administrative charges      
           
Colombia - USD $600 per month minimum administration charge      
Ecuador - USD $800 monthly minimum per relationship      
Egypt - USD $400 monthly minimum per relationship      
           
Additional Charges        
Local taxes, stamp duties or other assessments, including stock exchange fees, postage and  
insurance for shipping, facsimile reporting, extraordinary telecommunications fees or other unusual  
expenses, which are unique to a country in which the Funds are investing.  
       

 

 

Earnings Credit Arrangement

Each of the Funds listed below and The Bank of New York Mellon have entered into an earnings credit balance arrangement pursuant to which it has been agreed that 90% of any positive balances will be compensated at the 90 day T-Bill rate and 100% of overdrawn balances will be charged at a rate of 1% over the Fed Funds rate. Monthly, the net resultant credit or charge will be applied to the each Funds’ respective safekeeping fees. Credits that exceed the safekeeping fee may be carried over into the next billing period at the discretion of the Custodian.

 

FUNDS See Seventh Amendment, dated 9/1/10

Federated Stock Trust

Federated Market Opportunity Fund

Federated California Municipal Income Fund

Federated North Carolina Municipal Income Fund

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

 

 

See Fourth Amendment adding new funds, effective 10/23/09

 
 

Custody Agreement

Exhibit F

PRECIOUS METALS SUPPLEMENT

(Precious Metals Physically Held in the USA)

 

 

In addition to the provisions of that certain Global Custody Agreement dated as of June 7, 2005, as amended, pursuant to which the registered investment company, the Federated Market Opportunity Fund, (the “Customer”) has appointed The Bank of New York Mellon, formerly known as The Bank of New York (the “Custodian”) as its custodian of securities and cash and to perform related services (the “Agreement”), the following provisions shall apply to the custody of assets consisting of precious metals.

 

ARTICLE I

APPOINTMENT OF CUSTODIAN; CUSTODIAL SERVICES TO BE PROVIDED BY SUBCUSTODIAN

 

1.       Customer hereby appoints the Custodian as custodian to hold and maintain certain property consisting of the metals described in the attached Addendum A (the “Precious Metals”) and which are specified in each authenticated trade instruction sent by the Customer or it’s Authorized Representative to the Custodian.

 

2.       Custodian hereby accepts appointment as such custodian of Precious Metals and agrees to perform its duties in respect thereof pursuant to the provisions of this Supplement. Customer acknowledges that Custodian shall utilize the services of one or more subcustodians, identified to Customer from time to time (each, for purposes of this Supplement, a “Subcustodian”), to serve as warehouseman of the Precious Metals held hereunder. Precious Metals held through a Subcustodian shall be held subject to the terms and conditions of Custodian’s agreement with such Subcustodian. Custodian at any time may cease utilizing any Subcustodian and/or may replace a Subcustodian with a different Subcustodian. In the event Custodian selects a replacement Subcustodian, Custodian shall not utilize such replacement Subcustodian until after providing Customer with commercially reasonable notice.

 

 

ARTICLE II

RESPONSIBILITIES OF CUSTODIAN AND SUBCUSTODIANS

 

1.       Custodian shall receive, hold and keep the Precious Metals at a secure facility maintained by a Subcustodian which shall be identified to Customer from time to time (the “Secure Facility”).

 

2.       Custodian shall be responsible for the safekeeping of the Precious Metals in the form and condition in which they are delivered to its Subcustodian acting as its warehouseman. Custodian shall cause the Subcustodian to keep the Precious Metals held for Customer hereunder separately identified and segregated and to maintain records identifying the Precious Metals belonging to Customer.

 

3.       Custodian shall provide Customer with reporting by a means agreed between the parties detailing Precious Metals received, delivered and held at the Subcustodian. Customer agrees that it shall promptly review all such statements and shall advise Custodian of any error, omission or inaccuracy therein within a commercially reasonable time.

 

4.       Custodian shall cause the Subcustodian it designates to take delivery of Precious Metals from Customer and to acknowledge receipt from Customer of the Precious Metals. The Subcustodian may, at its option, record certain specifications indicated on the Precious Metals. It is understood and agreed that neither Custodian nor its Subcustodians are responsible for the authenticity of markings on or for the weight, fineness or contents of any of the Precious Metals, delivered to them by Customer or a third party for the account of Customer.

 

5.       Custodian shall maintain insurance protection covering the Custodian’s duties and activities hereunder in such amounts and insuring against such risks as Custodian deems reasonable and appropriate under the circumstances. Subcustodians may maintain such insurance in regard to their business on such terms as they consider appropriate, but the Custodian shall have no liability for the terms or sufficiency of the insurance maintained by any Subcustodian or for the failure of any Subcustodian to maintain insurance.

 

ARTICLE III

DELIVERY OF PRECIOUS METALS TO, AND WITHDRAWAL OF PRECIOUS METALS FROM, CUSTODY

 

1.       Each delivery of Precious Metals to be held in custody in accordance with this Supplement shall be made pursuant to an authenticated trade instruction sent by the Customer or its Authorized Representative to the Custodian. Such instruction must be received by the published trade instruction deadlines and by the agreed communication method. Such instruction shall be acknowledged by the Custodian. The authorized trade instruction shall identify the Precious Metal to be delivered, in such customary manner as specified by the Custodian, and the delivery date, and the Custodian’s acknowledgment shall identify the Subcustodian and Secure Facility to which the Customer shall deliver the Precious Metal. Delivery shall be made only to the Secure Facility of the Subcustodian designated by the Custodian. Customer acknowledges and agrees that neither the Custodian nor the Subcustodian has any responsibility or liability for any loss, damage or destruction of any Precious Metals prior to the time the Subcustodian identified by the Custodian accepts the care, custody and control of the Precious Metals at the specified Subcustodian’s Secure Facility, and Customer hereby releases Custodian and each Subcustodian from any responsibility or liability prior to the time the Subcustodian identified by the Custodian accepts the care, custody and control of the Precious Metals. In the event the Precious Metal delivered to the Subcustodian differs from the identification provided by the Customer, the Custodian shall endeavor promptly to notify the Customer. Neither the Custodian nor any Subcustodian shall be liable for any loss resulting from the failure of the Precious Metal actually delivered to conform to the identification provided by the Customer in the authorized trade instruction.

 

2. Each withdrawal of Precious Metals from custody in accordance with this Supplement shall be made pursuant to an authenticated trade instruction sent by the Customer or its Authorized Representative to the Custodian. Such instruction must be received by the published trade instruction deadlines and by the agreed communication method. Such instruction shall be acknowledged by the Custodian. The authorized trade instruction shall identify the Precious Metal to be withdrawn, in such customary manner as specified by the Custodian, and the delivery date and the Custodian’s acknowledgment shall identify the Subcustodian and Secure Facility from which the Customer shall take delivery of the Precious Metal. Customer must collect or arrange for the collection of the Precious Metal being withdrawn from the Subcustodian having physical possession thereof. All risk in and to the Precious Metal withdrawn shall pass at the specified Secure Facility at the time Customer or its Authorized Representative acknowledges receipt.

 

3.       Customer shall be responsible for all expenses associated with the delivery and withdrawal of Precious Metals to and from the Secure Facility, as well as all insurance, safekeeping, security and secure transport arrangements for the Precious Metals while either in storage outside the terms of this agreement or in transit to or from the Custodians appointed Subcustodian. Customer shall pay or reimburse the Custodian from time to time for any taxes or other governmental charges payable, and actually paid, by Custodian upon storage or transfer of the Precious Metals made hereunder.

 

4.       If, in Custodian’s opinion, any authenticated trade instruction is unclear or ambiguous, Custodian shall endeavor to obtain clarification from Customer. In the absence of such clarification Custodian may, in its absolute discretion, either (i) decline to take action until clarification is received or (ii) act on what it believes, in good faith, to be such instruction.

 

 

ARTICLE IV

CONCERNING CUSTODIAN

 

Except as otherwise expressly provided herein, Custodian shall not be liable for any costs, expenses, damages, liabilities or claims, including attorneys’ and accountants’ fees (collectively, “Losses”), incurred by or asserted against Customer, except those Losses arising out of Custodian’s own negligence or willful misconduct. Custodian shall have no liability whatsoever for the action or inaction of any commodities exchange. With respect to any Losses incurred by Customer as a result of the acts or failures to act by a Subcustodian acting as warehouseman hereunder, Custodian shall take appropriate action to recover such Losses, and Custodian’s liability shall be limited to the amount recovered net of Custodian’s costs and expenses. In no event shall Custodian be liable to Customer or any third party for special, indirect or consequential damages, or lost profits or loss of business, arising in connection with this Supplement.

 

ARTICLE V

MISCELLANEOUS.

 

The provisions of this Supplement shall apply solely with respect to the custody of Precious Metals. All provisions of the Agreement shall nevertheless remain in full force and effect with respect to assets held pursuant to this Supplement, and all capitalized terms and provisions contained in the Agreement shall be read so as to apply fully to the services and activities contemplated by this Supplement; provided, that in the event of any conflict between the provisions of the Agreement and the provisions of this Supplement, the provisions of this Supplement shall control.

 

 

Federated Equity Funds on behalf of its

Dated: Federated Market Opportunity Fund

 

 

/s/ Richard A. Novak

By: Richard A. Novak

Title: Treasurer

 

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Andrew Pfeifer

Title: Vice President

 

 

 

 
 

Precious Metals Supplement

Addendum A

 

 

Gold Bullion

 

 

 
 

Fourth Amendment to the Custody Agreement

 

This Amendment is made as of October 23, 2009 to the Custody Agreement (as amended, the “Custody Agreement”) dated June 7, 2005, amended November 7, 2007, September 5, 2008, and September 8, 2009 between the Funds listed on Schedule II to the Custody Agreement (each a "Fund") and The Bank of New York Mellon (the "Custodian").

 

RECITALS

 

WHEREAS, the custody of the securities, cash and other portfolio assets of the funds specified in this Amendment are being converted to the Custodian as of the close of business on October 23, 2009;

 

WHEREAS, the parties agree that the list of Funds that are parties to the Custody Agreement is set forth on Schedule II to the Custody Agreement (which has been amended and attached as Exhibit A to prior amendments to the Custody Agreement) (“Schedule II to the Custody Agreement” or “Exhibit A”), and the parties desire to amend the list of Funds to add the funds specified in this Amendment;

 

WHEREAS, the parties agree that the list of Funds that are parties to the Joint Trading Account Custody Agreement, which is part of the Custody Agreement, is set forth on Schedule I to the Joint Trading Account Custody Agreement (which has been amended and attached as Exhibit B to prior amendments to the Custody Agreement) (“Schedule I to the Joint Trading Account Agreement” or “Exhibit B”), and the parties desire to amend the list of Funds to add the funds specified in this Amendment;

 

WHEREAS, the parties agree that the list of Funds that are parties to the Foreign Custody Agreement, which is part of the Custody Agreement, is set forth on Schedule I to the Foreign Custody Agreement (which has been attached as Exhibit C to in prior amendments) (“Schedule I to Foreign Custody Agreement” or “Exhibit C”), and the parties desire to amend the list of Funds to add the funds specified in this Amendment; and

 

WHEREAS, the parties agree that the Fee Schedule for Non-Money Market Funds, which is part of the Custody Agreement (which has been attached as Exhibit D in prior amendments (“Fee Schedule for Non-Money Market Funds” or “Exhibit D”), will apply to the funds specified herein, and the parties desire to add the funds specified in this Amendment to the funds subject to the Fee Schedule for Non-Money Market Funds.

 

AMENDMENT

 

NOW THEREFORE, intending to be legally bound, each of the Funds and the Custodian agree to the following amendments:

 

Each of Schedule II to the Custody Agreement (or Exhibit A), Schedule I to the Joint Trading Account Agreement (or Exhibit B), Schedule I to the Foreign Custody Agreement (or Exhibit C), and the Fee Schedule for Non-Money Market Funds (or Exhibit D) shall be, and hereby are, amended and updated to include the following new Funds:

 

Federated Municipal Securities Fund, Inc.

Federated Intermediate Municipal Trust, a portfolio of Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust, a portfolio of Federated Municipal Securities Income Trust

Federated Municipal High Yield Advantage Fund, a portfolio of Federated Municipal Securities Income Trust

 

The agreements referenced herein shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of the day and year first written above.

 

ON BEHALF OF EACH OF THE FUNDS INDICATED ON SCHEDULE II OF THE CUSTODY AGREEMENT, AS AMENDED FROM TIME TO TIME

 

By: /s/ Richard A. Novak

Title: Treasurer

 

 

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Andrew Pfeiffer

Title: Vice President

 

 

 
 

Fifth Amendment to the Custody Agreement

 

 

This Amendment is made as of November 13, 2009 to the Custody Agreement (the “Agreement”) dated June 7, 2005, amended November 7, 2007, September 5, 2008, September 8, 2009, and October 23, 2009 between the Funds listed on Schedule II attached hereto (each a "Fund") and The Bank of New York Mellon (the "Custodian").

 

Recitals

 

WHEREAS, the parties agree that the Fee Schedule for Money Market Funds, which is part of the Custody Agreement, which has been attached as Exhibit E in prior amendments (“Fee Schedule for Money Market Funds” or “Exhibit E”), will apply to the funds specified herein.

 

Amendment

 

WHEREAS, each Fund and the Custodian wish to modify the provisions of the Agreement as set forth below;

 

NOW THEREFORE, each the Fund and the Custodian agree to the following amendments.

 

Within Exhibit E, the section entitled “Compensating Balance Arrangement” is replaced in its entirety with Amended and Restated Exhibit E as attached hereto.

 

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of the day and year first written above.

 

On behalf of each of the Funds indicated on Schedule II attached hereto

 

 

By: /s/ Richard A. Novak

Title: Treasurer

 

 

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Peter D. Holland

Title: Managing Director

 

 
 

 

Amended and Restated

Exhibit E

 

 

Compensating Balance Arrangement

 

Each Fund listed below and The Bank of New York Mellon (the “Bank”) have entered into an average compensating balance arrangement, which would allow the Funds to compensate the Bank for any overdrafts by maintaining a positive cash balance and conversely, on any day a Fund maintains a positive balance, the respective Fund will be permitted to overdraw the account as compensation, within the Maximum Daily Balance limits as established for each fund as listed below.

 

In each instance, Federal Reserve requirements for minimum balances (currently 10%), will be assessed. Therefore, all overdrafts must be compensated at 100% of the total and all positive balances will allow for an overdraft of up to 90% of the total (unless the positive balance is the result of an error on the part on the Bank, in which case the positive balance would be assessed at 100%). The Funds shall maintain the average compensating balance over quarterly periods (ending March, June, September and December for FGRF, FCRF and FMUTR; and ending February, May, August, and November for AGCR, USTCR and GOTMF). Average balances will be computed at the end of the quarter. Net positive balances will receive an earnings credit computed at the daily effective 90 – day T-Bill rate on the last day of a period. Net negative balances will be charged at the Fed Funds rate plus 1% on the last day of the period. Quarterly net credits or charges will be applied to the safekeeping fees. Credits that exceed the safekeeping fee will be carried over into the next billing period but must be applied in a 12 month cycle; all accumulated unapplied credits will expire in the final quarter of the cycle, i.e. in November or December. However, upon specific request from the Fund, Custodian at its discretion may agree to carry forward into the next 12 month cycle any accumulated credits, contingent on their application within a specified time period.

 

Credits are not redeemable for cash and will expire in the event the relationship with the Funds is terminated.

 

Maximum Daily Balances (“MDB”) limits have been determined for each fund. On days where the Funds exceed their MDBs, interest will be credited on 90% of the excess balance at the 90-day T-Bill rate or charged on 100% of the excess overdraft balance at the Fed Funds rate plus 1%, based on the day(s) the MDB’s were exceeded.

 

Maximum Daily Balance +/- $175 million

US Treasury Cash Reserves Fund (USTCR)

Government Obligations Tax Managed Fund (GOTMF)

 

Maximum Daily Balance +/- $75 million

Federated Municipal Trust Fund (FMUTR)

 

Maximum Daily Balance +/- $25 million

Federated Capital Reserves Fund (FCRF)

Federated Government Reserves Fund (FGRF)

Automated Government Cash Reserves (AGCR)

 
 

See Seventh Amendment, dated 9/1/10

 

 

Schedule II

 

 

 

Federated Capital Reserves Fund

Federated Government Reserve Fund

Federated Municipal Trust Fund

US Treasury Cash Reserve Fund

Automated Government Cash Reserves

Government Obligations Tax Managed Fund

 

 
 

 

Sixth Amendment to the Custody Agreement

 

 

This Amendment is made as of January 13, 2010 to the Custody Agreement (the “Agreement”) dated June 7, 2005, amended November 7, 2007, September 5, 2008, September 8, 2009, October 23, 2009, and November 13, 2009 between the Funds listed on Schedule II attached hereto (each a "Fund") and The Bank of New York Mellon (the "Custodian").

 

WHEREAS, each Fund and the Custodian wish to modify the provisions of the Agreement as set forth below;

 

NOW THEREFORE, each the Fund and the Custodian agree to the following amendment.

 

Each Exhibit A (“Schedule II to the Agreement”), Exhibit B (“Joint Trading Account Agreement Schedule I”), and Exhibit D (“Fee Schedule for Non-Money Market Funds”) is updated to include the following new Fund:

 

Federated Enhanced Treasury Income Fund

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of the day and year first written above.

 

On behalf of each of the Funds indicated on Schedule II attached hereto

 

By: /s/ Richard A. Novak

By: Richard A. Novak

Title: Treasurer

 

 

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Peter D. Holland

By: Peter D. Holland

Title: Managing Director

 
 

See Seventh Amendment, dated 9/1/10

 

Amended and Restated

Custody Agreement

Schedule II

 

 

 

Federated Stock Trust

Federated Market Opportunity Fund

Federated California Municipal Income Fund

Federated North Carolina Municipal Income Fund

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Municipal Securities Fund

Intermediate Municipal Trust Fund

Michigan Intermediate Municipal Trust Fund

Federated Municipal High Yield Advantaged Fund

Federated Enhanced Treasury Income Fund

 

Federated Capital Reserve Fund

Federated Government Reserves Fund

Federated Municipal Trust Fund

US Treasury Cash Reserves Fund

Automated Government Cash Reserves

Government Obligations Tax Managed Fund

 

 

 

 

 
 

Seventh Amendment to the Custody Agreement

 

 

This Amendment is made as of September 1, 2010 to the Custody Agreement (the “Agreement”) dated June 7, 2005, amended November 7, 2007, September 5, 2008, September 8, 2009, October 23, 2009, November 13, 2009 and January 13, 2010, between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto (each a "Fund") and The Bank of New York Mellon (the "Custodian").

 

WHEREAS, each Fund and the Custodian wish to modify the provisions of the Agreement as set forth below;

 

NOW THEREFORE, each Fund and the Custodian agree to the following amendment.

 

1.       The funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto:

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of the day and year first written above.

 

On behalf of each of the Funds indicated on Exhibit A attached hereto

 

By: /s/ Richard A. Novak

By: Richard A. Novak

Title: Treasurer

 

 

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Peter D. Holland

By: Peter D. Holland

Title: Managing Director

 
 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

 

 

A.       Non-Money Market Funds

 

Federated Enhanced Treasury Income Fund

Federated Global Equity Fund

Federated Global Macro Bond Fund

Federated Intermediate Municipal Trust

Federated Market Opportunity Fund

Federated MDT Stock Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

 

B.       Money Market Funds

 

Federated Automated Government Cash Reserves

Federated Capital Reserves Fund

Federated Government Obligations Tax Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 
 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

FUNDS

 

Federated Enhanced Treasury Income Fund

Federated Global Equity Fund

Federated Global Macro Bond Fund

Federated Intermediate Municipal Trust

Federated Market Opportunity Fund

Federated MDT Stock Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

 
 

EIGHTH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each stand alone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, amended November 7, 2007, September 5, 2008, September 8, 2009, October 23, 2009, November 13, 2009, January 13, 2010 and September 1, 2010, between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian.

 

WHEREAS, each Fund is registered as a management investment company, or a series thereof, under the Investment Company Act of 1940, as amended; and

 

WHEREAS, the Funds and the Custodian desire to amend the Agreement subject to the terms and conditions set forth herein.

 

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:

 

1.       Article IX of the Agreement is hereby deleted in its entirety and replaced with the following language:

 

1.       The Agreement shall become effective on March 1, 2011 and shall remain in full force and effect for a period of four (4) years (the “Initial Term”) and shall automatically continue in full force and effect after such Initial Term unless either party terminates this Agreement by written notice to the other party at least six (6) months prior to the expiration of the Initial Term. Additionally, if the Custodian (or any of its affiliates) engages in (i) any act or omission which constitutes a breach of any representation, warranty, term, or obligation contained in this Agreement, which upon notice the Custodian has not cured within 5 business days or (ii) any act or omission which constitutes negligence, reckless misconduct, willful malfeasance, or lack of good faith in fulfilling the terms and obligations of this Agreement, then each Fund shall have the right to immediately terminate this Agreement.

In the event such notice is given by the Fund, it shall be accompanied by a copy of a resolution of the board of the Fund, certified by the Secretary or any Assistant Secretary, electing to terminate this Agreement and designating a successor Custodian or Custodians, each of which shall be a bank or trust company having not less than $2,000,000 aggregate capital, surplus and undivided profits.

In the event such notice is given by Custodian, the Fund shall, on or before the termination date, deliver to Custodian a copy of a resolution of the board of the Fund, certified by the Secretary or any Assistant Secretary, designating a successor Custodian or Custodians. In the absence of such designation by the Fund, Custodian may designate a successor Custodian which shall be a bank or trust company having not less than $2,000,000 aggregate capital, surplus and undivided profits. Upon the date set forth in such notice this Agreement shall terminate, and Custodian shall upon receipt of a notice of acceptance by the successor Custodian on that date deliver directly to the successor Custodian all Securities and money then owned by the Fund and held by it as Custodian, after deducting any fees, expenses and other accounts for the payment or reimbursement of which it shall then be entitled.

2.        If a successor Custodian is not designated by the Fund or Custodian in accordance with the preceding Section, the Fund shall upon the date specified in the notice of termination of this Agreement and upon the delivery by Custodian of all Securities (other than Securities which cannot be delivered to the Fund) and money then owned by the Fund be deemed to be its own Custodian and Custodian shall thereby be relieved of all duties and responsibilities pursuant to this Agreement, other than the duty with respect to Securities which cannot be delivered to the Fund to hold such Securities hereunder in accordance with this Agreement.

 

2.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

 

 

 

[Remainder of Page Intentionally Left Blank]

 

 
 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of March 1, 2011.

 

Each of the registered investment companies or series

thereof listed on Schedule II to the Custody

Agreement, as amended from time to time

 

By: /s/ Richard A. Novak

Name: Richard A. Novak

Title: Treasurer

 

 

THE BANK OF NEW YORK MELLON

 

By: /s/ Andrew Pfeifer

Title: Vice President

 
 

NINTH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each stand alone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, amended November 7, 2007, September 5, 2008, September 8, 2009, October 23, 2009, November 13, 2009, January 13, 2010, September 1, 2010, and March 1, 2011, between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to add Funds to Schedule II, effective March 25, 2011; and

 

WHEREAS, the Funds and the Custodian desire to amend the Agreement subject to the terms and conditions set forth herein.

 

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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of March 25, 2011.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

By: /s/ Richard A. Novak

Name: Richard A. Novak

Title: Treasurer

 

THE BANK OF NEW YORK MELLON

 

By: /s/ Andrew Pfeifer

Title: Vice President

 
 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

 

 

A.       Non-Money Market Funds

 

Federated Enhanced Treasury Income Fund

Federated Global Equity Fund

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated Emerging Market Debt Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated Market Opportunity Fund

Federated MDT Stock Trust

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

Federated Unconstrained Bond Fund

 

 

B.       Money Market Funds

 

Federated Automated Government Cash Reserves

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 
 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

FUNDS

 

Federated Enhanced Treasury Income Fund

Federated Global Equity Fund

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated Emerging Market Debt Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated Market Opportunity Fund

Federated MDT Stock Trust

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

Federated Unconstrained Bond Fund

 
 

TENTH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT (“Amendment”) TO THE CUSTODY AGREEMENT dated June 7, 2005, amended November 7, 2007, September 5, 2008, September 8, 2009, October 23, 2009, November 13, 2009, January 13, 2010, September 1, 2010, March 1, 2011 and March 25, 2011 (the “Agreement”), by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time (each stand alone registered investment company and each Series a “Fund” and collectively the “Funds”), and The Bank of New York Mellon (the “Custodian”).

 

WHEREAS, each Fund is registered as a management investment company, or certain services thereof, under the Investment Company Act of 1940, as amended; and

 

WHEREAS, the Funds and the Custodian desire to amend the Agreement subject to the terms and conditions set forth herein.

 

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:

 

1.       All capitalized terms used but not defined herein shall have the meanings ascribed to them in the Agreement.

 

2.       The following article shall be added to the Agreement as a new Article XI “CUSTODY OF LOAN DOCUMENT FILES AND RELATED SERVICES”:

1.       As used in this Article XI, the following terms shall have the meanings set forth below:

“Loan Document File” shall mean a hard copy file delivered to and received by Custodian hereunder.

“Loan Documents” shall mean all documents and instruments relating to any Loans (as hereinafter defined), including, without limitation, loan or credit agreements, assignment and acceptance agreements, promissory notes, participation agreements, deeds, mortgages and security agreements contained in a Loan Document File.

“Loans” shall mean the bank loans or loan commitments held in the Fund.

“Servicer” shall mean the agent appointed by the applicable Fund to service the Loans, which initially shall be the Custodian, provided that the parties have entered into a separate loan servicing agreement (the “Loan Servicing Agreement”).

2.       It is understood and agreed that unless Custodian and the Fund enter into a duly executed Loan Servicing Agreement, all references to the Servicer hereunder shall refer to a person or entity other than Custodian. Upon execution of such Loan Servicing Agreement, all such references shall be to Custodian.

3.       The Servicer, as agent for the Fund, shall be solely responsible for the servicing of all Loans. All payments by or on behalf of borrowers under the Loans received by Custodian shall be credited to the Account.

4.       It is understood and agreed that Custodian shall have no responsibility for maintaining any records of account activity relating to each Loan, including without limitation, all amortization schedules, records of transfer, pay-off, assignment, participation, sale, modification, termination or other changes in the Loans, except as provided for in the Loan Servicing Agreement between the Funds and Custodian dated March 25, 2011.

5.       Upon origination, modification or other change in any Loan, the Fund shall promptly deliver or cause to be delivered to Custodian all relevant Loan Documents. It is understood and agreed that Custodian will accept any file purporting to be a Loan Document File for custody hereunder “as is” and without any examination. Any duty Custodian may have to review or inspect any Loan Documents or to determine the contents of Loan Document Files shall only be pursuant to the terms and conditions of the Loan Servicing Agreement. No such duties or obligations shall be imposed on Custodian under the Agreement. Under no circumstances will Custodian be required to issue a trust receipt (or similar instrument) with respect to the Loan Document Files or their contents. Account statements will only reflect an inventory of the Loan Document Files that Custodian holds in custody hereunder without any representation as to the contents thereof.

6.       No director, officer, employee or agent of the Fund shall have physical access to the Loan Document Files or be authorized or permitted to withdraw any Loan Documents nor shall Custodian deliver any Loan Documents to any such person, unless such access or withdrawal has been duly authorized by a resolution of the board of directors of the Fund. All such access shall be by two or more persons jointly, at least one of whom is an officer of the Fund.

 

3.       All Loan Documents and Loan Document Files in the possession of the Custodian are and shall remain the property of the Fund.

 

4.       This Amendment shall be governed by and construed in accordance with the laws of the State of New York. This Amendment shall become effective as of the date hereof upon execution by the parties hereto. From and after the execution hereof, any reference to the Agreement shall be a reference to the Agreement as amended hereby. In the event of any conflict between the terms of this Amendment and the terms of the Agreement, the terms of the Amendment shall control. Except as amended hereby, the Agreement shall remain in full force and effect and is hereby ratified and confirmed by the parties thereto.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of March 25, 2011.

 

Each of the registered investment companies or series
thereof listed on Schedule II to the Agreement

By: /s/ Richard A. Novak

Name: Richard A. Novak

Title: Treasurer

 

 

THE BANK OF NEW YORK MELLON

 

By: /s/ Mary Jean Milner

Title: Vice President

 
 

LOAN SERVICING ANNEX AND SUPPLEMENT

TO THE CUSTODY AGREEMENT

 

This Loan Servicing Annex and Supplement (the “Loan Servicing Agreement”) a part of the Custody Agreement dated June 7, 2005, amended November 7, 2007, September 5, 2008, September 8, 2009, October 23, 2009, November 13, 2009, January 13, 2010, September 1, 2010, March 1, 2011, and March 25, 2011 (the “Custody Agreement”), between the registered investment companies listed on Schedule II to the Custody Agreement, as may be amended from time to time (each stand alone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”). Capitalized terms used but not defined shall have the meanings ascribed to them in the Custody Agreement.

 

WHEREAS, the Funds and the Custodian desire to supplement the Custody Agreement to provide for the servicing of loans held as assets of the Funds, subject to the terms and conditions set forth herein.

 

NOW THEREFORE, in consideration of the premises and the agreements, covenants and representations herein contained, the parties hereto agree as follows:

 

1.       The Services. Custodian shall provide to the Funds the services described in Exhibit A attached hereto (which services are hereinafter referred to as the “Services”). The Funds shall, promptly after the date hereof, deliver or cause to be delivered to Custodian copies of all documents and information listed on Schedule II to this Loan Servicing Agreement relating to the loans or loan commitments (the “Loans”) being serviced for the loan portfolio(s) described on Exhibit A-1 (the “Portfolio(s)”).

 

2.       Service Fees. In consideration of the performance of the Services by Custodian, each Fund shall pay Custodian in accordance with the fee arrangements set forth on Schedule I to this Loan Servicing Agreement (the “Service Fees”). Except for such sums as are payable upon the execution hereof, if any, Custodian shall send an invoice for the Service Fees to the applicable Fund within thirty (30) days after the end of each calendar quarter during the term hereof and such invoice shall be payable upon receipt.

 

3.       Delegation. Custodian is hereby authorized to assign its rights and delegate its duties hereunder to a BNY Affiliate, whenever and on such terms and conditions as it deems necessary or appropriate to perform its services hereunder, without any further notice to the Funds. The Funds agree to be bound by all actions taken by such BNY Affiliate pursuant to the preceding sentence to the same extent as if they were taken by Custodian, it being understood and agreed that no such assignment or delegation shall discharge Custodian from its obligations hereunder. Accordingly, Custodian is fully responsible to the Funds for the acts or omissions of such BNY Affiliate under the Agreement to the same extent that Custodian would be liable for such acts or omissions had Custodian not delegated such services to such BNY Affiliate. If so advised by Custodian, the Funds shall provide Instructions or other information directly to such BNY Affiliate rather than to Custodian.

 

4.       Notice of Default. Custodian shall not be deemed to have knowledge or notice of the occurrence of any default or event of default under the Loans unless Custodian has received notice from a Fund referring to this Loan Servicing Agreement, describing such default or event of default and stating that such notice is a “notice of default.” Such notice will be delivered in a manner permitted under the Custody Agreement. Custodian shall take such action with respect to such default or event of default as shall be reasonably directed by such Fund; provided that unless and until Custodian shall have received such directions, Custodian may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such default or event of default as it shall deem advisable in the best interests of such Fund.

 

5.       Non-Reliance by the Funds. The Funds expressly acknowledge that neither Custodian nor any of its officers, directors, employees, agents, attorneys, attorneys-in-fact or affiliates have made any representations or warranties pursuant to this Loan Servicing Agreement and that no act by Custodian hereafter taken, including, without limitation, any review of the affairs of any borrower or any affiliate of any borrower, shall be deemed to constitute any representation or warranty by Custodian with respect to the Loans. The Funds represent to Custodian that they have, independently and without reliance upon Custodian, and based on such documents and information as they shall deem appropriate at the time, made their own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of any borrower and its affiliates and made their own decisions to make and/or purchase the Loans. The Funds also represent that they will, independently and without reliance upon Custodian, and based on such documents and information as they shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action with respect to the Loans, and to make such investigation as they deem necessary to inform them as to the business, operations, property, financial and other condition and creditworthiness of any borrower. Except for notices, reports and other documents expressly required to be furnished to the Funds by the Custodian, Custodian shall not have any duty or responsibility to provide the Funds with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of any borrower that may come into the possession of the Custodian or any of its officers, directors, employees, agents, attorneys, attorneys-in-fact or affiliates.

 

6.       Advances. Custodian shall not be obligated to make any advances or make any payments to any party out of its own funds and no provision of this Loan Servicing Agreement or any other document executed in connection herewith shall require Custodian to expend or risk its own funds in the performance of any of its duties hereunder.

 

7.       Event of Default by Custodian. The following shall constitute a “Custodian Event of Default” hereunder:

 

The commencement of a case or other proceeding seeking liquidation, reorganization or other similar relief with respect to Custodian or its debts under any bankruptcy, insolvency or similar law or seeking the appointment of a receiver, trustee, liquidator, conservator, administrator, custodian or other similar official for Custodian or Custodian’s property and such decree or order shall have remained in force undischarged or unstayed for a period of thirty (30) days.

 

8.       Event of Default by a Fund. The following shall constitute a “Fund Event of Default” hereunder:

 

The commencement of a case or other proceeding seeking liquidation, reorganization or other similar relief with respect to a Fund or its debts under any bankruptcy, insolvency or similar law or seeking the appointment of a receiver, trustee, liquidator, conservator, administrator, custodian or other similar official for such Fund or such Fund’s property and such decree or order shall have remained in force undischarged or unstayed for a period of thirty (30) days.

 

9.       Remedies.

 

(a) If a Custodian Event of Default shall occur, the Funds may terminate this Loan Servicing Agreement immediately upon the delivery of written notice to Custodian, and shall, subject to the limitations contained in the Custody Agreement, be entitled to any and all other rights and remedies under law or in equity.

 

(b) If a Fund Event of Default shall occur, Custodian may terminate this Loan Servicing Agreement and resign immediately upon the delivery of written notice to the Funds, and shall, subject to the limitations contained in the Custody Agreement, be entitled to any and all other rights and remedies under law or in equity.

 

10.       Termination for No Cause. Either Custodian or the Funds may terminate: (a) this Loan Servicing Agreement in its entirety or (b) the Services as to any particular portfolio of loans or as to a loan or loans without terminating this Loan Servicing Agreement in its entirety, for any or no reason upon the providing of ninety (90) days’ advance written notice to the other parties.

 

11.       NOTICE REQUIRED BY THE USA PATRIOT ACT. Each Fund hereby acknowledges that Custodian is subject to federal laws, including the Customer Identification Program (CIP) requirements under the USA PATRIOT Act and its implementing regulations, pursuant to which Custodian must obtain, verify and record information that allows Custodian to identify its customers. Accordingly Custodian will ask the Funds to provide certain information including, but not limited to, the name of each Fund, physical address, tax identification number and other information that will help Custodian to identify and verify each Fund’s identity such as organizational documents, ownership, certificate of good standing, license to do business, or other pertinent identifying information.

 

12.       Custody Agreement. The parties understand and agree that this Loan Servicing Agreement shall be subject to the term and conditions of the Custody Agreement. In the event of any inconsistency between the terms and conditions of the Custody Agreement and the Loan Servicing Agreement, the terms and conditions of the Loan Servicing Agreement shall govern.

 

 

[The Remainder of this page is intentionally left blank]

 
 

IN WITNESS WHEREOF, the parties have caused this Loan Servicing Agreement to be executed by their respective officers, thereunto duly authorized, as of March 25, 2011.

 

 

THE BANK OF NEW YORK MELLON

Each of the registered investment companies or

series thereof listed on Schedule II to the Custody Agreement

   
By:  /s/ Mary Jean Milner By:  /s/ Richard A. Novak
Name:  Mary Jean Milner Name:  Richard A. Novak
Title:  Vice President Title:  Treasurer

 

 

 
 

EXHIBIT A

Schedule of Services

1.With respect to the Loans to be serviced hereunder, the parties agree that Custodian shall perform the following services for each Fund whose Portfolio(s) are identified in Exhibit A-1 (the “Services”):

 

(a)Set-Up / File Maintenance.
(i)Custodian shall accept from the Fund or its designee, the relevant information pertaining to the Loans, and thereafter maintain paper or electronic copies of same in Custodian’s system, including as available or appropriate, copies of all new assignment and acceptance agreements, participation agreements, funding memoranda, current loan or credit agreements. Copies of such information shall be retained by Custodian for the period(s) required by the Investment Company Act of 1940, as amended, and the rules thereunder.
(ii)Enter into the Custodian’s loan tracking system, and maintain a loan database containing information provided to the Custodian from time to time by the Fund or agent banks for the Loans with respect to (i) the obligor name for each Loan, (ii) the principal and interest payments made or to be made on the Loans, (iii) the applicable interest rate, interest rate resets and interest accrual periods of each Loan, (iv) the principal balance of each Loan and (v) the funded and commitment balances of, and commitment fees for, each Loan (“Loan Information”).
(iii)Notwithstanding the foregoing, Custodian as servicer for the Loans, shall not be obligated to accept nor be responsible for holding or safekeeping originals of any securities, promissory notes, certificates of equity or debt ownership or obligations, deeds, mortgages, bonds, security agreements, any other type of negotiable instrument, or any other document related to the Loans.
(iv)Additionally, the parties agree that, whereas it is necessary hereunder for Custodian to expeditiously obtain and process information, including notices, derived from third-parties, including agents for the Loans, (particularly in connection with providing any reports to the Fund), Custodian shall be entitled to rely upon such third-party information and shall not be required to verify or authenticate in any manner such information. Custodian will be deemed to have acted reasonably in accepting, using and transmitting such information, as contemplated herein.

(b)       Assignments / Pay-Offs / Terminations.

(i)Custodian shall further maintain records of information it receives regarding the transfer, pay-off, assignment, participation, sale, modification, termination or other changes in the Loans, and reflect such changes in its system, and in the Reports.

(c)       Inquiries/ Record Keeping.

(i)Custodian shall maintain electronic records of material notices it receives from the administrative agents of the Loans regarding the Loans and transactions with respect to the Loans for a period of seven years from receipt.
(ii)Custodian will provide initial response to e-mail or telephone inquiries by the Fund about the Loan within 2 Business Days.
 
 

 

EXHIBIT A-1

 

List of Portfolios

 

Federated Emerging Market Debt Fund

 
 

 

Schedule I

Fee Schedule

 

Custodian agrees to waive its Service Fees for Services provided to the Federated Emerging Market Debt Fund for the servicing of the following Loan:

 

Cooperativa dos Agricultores da Regiao de Orlandia (CAROL BL) – Term Loan, 4.050%, 9/28/2011

Asset ID: 1439999D4

Par: 600,000

 

 

 

 

 

 

 

 

 

 
 

Schedule II

 

For each Loan purchased by the Portfolio acquired after the execution of this Loan Servicing Agreement:

 

1.Assignment and Acceptance Agreement or Participation Agreement
2.Funding Memorandum
3.Credit Agreement, if necessary
4.Amendments to the Credit Agreement, if any
5.Current Amortization Schedule for each Loan, if any

 

 

 

 

 
 

ELEVENTH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each stand alone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, amended November 7, 2007, September 5, 2008, September 8, 2009, October 23, 2009, November 13, 2009, January 13, 2010, September 1, 2010, March 1, 2011, March 25, 2011 and August 1, 2012, between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to amend the names of certain Funds to Schedule II, effective August 1, 2012; and

 

WHEREAS, the Funds and the Custodian desire to amend the Agreement subject to the terms and conditions set forth herein.

 

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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of August 1, 2012.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

By: /s/ Richard A. Novak

Name: Richard A. Novak

Title: Treasurer

 

THE BANK OF NEW YORK MELLON

 

By: /s/ Mary Jean Milner

Title: Vice President

 
 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised 8/1/12

 

A.       Non-Money Market Funds

 

Federated Enhanced Treasury Income Fund

Federated Global Equity Fund

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated Emerging Market Debt Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated Prudent Absolute Return Fund (formerly, Federated Market Opportunity Fund)

Federated MDT Stock Trust

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

Federated Unconstrained Bond Fund

 

 

B.       Money Market Funds

 

Federated Automated Government Cash Reserves

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 
 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

FUNDS

 

Federated Enhanced Treasury Income Fund

Federated Global Equity Fund

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated Emerging Market Debt Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated Prudent Absolute Return Fund (formerly, Federated Market Opportunity Fund)

Federated MDT Stock Trust

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

Federated Unconstrained Bond Fund

 

 

 
 

 

TWELFTH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each stand alone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, amended November 7, 2007, September 5, 2008, September 8, 2009, October 23, 2009, November 13, 2009, January 13, 2010, September 1, 2010, March 1, 2011, March 25, 2011, August 1, 2012 and December 31, 2012, between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to amend the names of certain Funds to Schedule II, effective December 31, 2012; and

 

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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of December 31, 2012.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By: /s/ Richard A. Novak

Name: Richard A. Novak

Title: Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By:

Title:

 
 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised 12/31/12

 

A.       Non-Money Market Funds

 

Federated Enhanced Treasury Income Fund

Federated Global Equity Fund

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated Emerging Market Debt Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated Absolute Return Fund (formerly, Federated Prudent Absolute Return Fund)

Federated MDT Stock Trust

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

Federated Unconstrained Bond Fund

 

 

B.       Money Market Funds

 

Federated Automated Government Cash Reserves

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 
 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised 12/31/12

 

FUNDS

 

Federated Enhanced Treasury Income Fund

Federated Global Equity Fund

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated Emerging Market Debt Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated Absolute Return Fund (formerly, Federated Prudent Absolute Return Fund)

Federated MDT Stock Trust

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

Federated Unconstrained Bond Fund

 
 

 

Execution Copy

 

 

THIRTEENTH AMENDMENT

TO CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each stand alone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”):

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, amended November 7, 2007, September 5, 2008, September 8, 2009, October 23, 2009, November 13, 2009, January 13, 2010 September 1, 2010, March 1, 2011 and through two separate amendments each on March 25, 2011, between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto (each a “Fund”) and The Bank of New York Mellon (the “Custodian”).

 

WHEREAS, each Fund is registered as a management investment company, or a series thereof, under the Investment Company Act of 1940, as amended; and

 

WHEREAS, the Funds and the Custodian desire to amend the Agreement subject to the terms and conditions set forth herein.

 

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:

 

1.        Article V of the Agreement is hereby supplemented to include Section 3. As follows:

 

 

3.        Notwithstanding the foregoing, Custodian will not charge the Fund any overdraft fees, penalties, or related custody charges in connection with any transaction or series of related transactions for which Custodian did not provide Fund with notice, as soon as reasonably practicable under the circumstances, of any refusal to accept or provide a price for an Actionable Trade Request as such term is defined in the FX Standing Instructions Session Range Program Description dated December 18, 2012.

 

2.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

 

 

 

 

[Remainder of Page Intentionally Left Blank]

 
 

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of September 24, 2013.

 

Each of the registered investment companies or series thereof listed on Schedule II to the Custody Agreement, as amended from time to time

 

By: /s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Treasurer

 

 

THE BANK OF NEW YORK MELLON

 

 

 

By: /s/ Armando Fernandez

Name: Armando Fernandez

Title: Vice President

Managing Director

 
 

 

FOURTEENTH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each stand alone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, amended November 7, 2007, September 5, 2008, September 8, 2009, October 23, 2009, November 13, 2009, January 13, 2010, September 1, 2010, March 1, 2011, two separate amendments dated March 25, 2011, August 1, 2012, December 31, 2012, September 24, 2013 and April 28, 2014, and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to amend the names of certain Funds to Schedule II, effective April 28, 2014; and

 

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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of April 28, 2014.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By: /s/ Lori A. Hensler

Name: Lori Hensler

Title: Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Title: Vice President/Managing Director

 
 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised 4/28/14

 

A.       Non-Money Market Funds

 

Federated Enhanced Treasury Income Fund

Federated Emerging Markets Equity Fund (formerly, Federated Global Equity Fund)

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated Emerging Market Debt Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated Absolute Return Fund

Federated MDT Stock Trust

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

Federated Unconstrained Bond Fund

 

 

B.       Money Market Funds

 

Federated Automated Government Cash Reserves

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 
 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised 4/28/14

 

FUNDS

 

Federated Enhanced Treasury Income Fund

Federated Emerging Markets Equity Fund (formerly, Federated Global Equity Fund)

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated Emerging Market Debt Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated Absolute Return Fund

Federated MDT Stock Trust

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

Federated Unconstrained Bond Fund

 
 

 

FIFTEENTH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each stand alone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, amended November 7, 2007, September 5, 2008, September 8, 2009, October 23, 2009, November 13, 2009, January 13, 2010, September 1, 2010, March 1, 2011, two separate amendments dated March 25, 2011, August 1, 2012, December 31, 2012, September 24, 2013, April 28, 2014, and December 1, 2014 and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to add certain Funds to the Schedules; and

 

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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of December 1, 2014.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By: Lori A. Hensler

Name: Lori Hensler

Title: Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Title: Vice President/Managing Director

 
 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised 12/1/14

 

A.       Non-Money Market Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Emerging Markets Equity Fund

Federated Enhanced Treasury Income Fund

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Stock Trust

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

Federated Unconstrained Bond Fund

 

 

B.       Money Market Funds

 

Federated Automated Government Cash Reserves

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 
 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised 12/1/14

 

FUNDS

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Emerging Markets Equity Fund

Federated Enhanced Treasury Income Fund

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Stock Trust

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

Federated Unconstrained Bond Fund

 
 

 

Sixteenth Amendment to the Custody Agreement

 

 

This Sixteenth Amendment to the Custody Agreement, is made on May 14, 2015 with certain varying effective dates with respect to certain entities as set forth herein (this “Amendment”), by and between the registered investment companies listed on Schedule II to the Agreement (as defined below), as may be amended from time to time (each stand-alone registered investment company and each Series a “Fund” and collectively the “Funds”), and The Bank of New York Mellon (the “Custodian”).

 

W I T N E S S E T H:

 

WHEREAS, the parties have entered into that certain Custody Agreement, dated June 7, 2005 (as amended fourteen times previously, supplemented and/or restated, the “Agreement”), by and between the Funds and the Custodian;

 

WHEREAS, the parties previously amended the Agreement to add or modify (1) the section entitled “Earnings Credit Arrangement” in the Fee Schedule for Non-Money Market Funds attached to the Agreement as Exhibit D thereto (“Exhibit D”) and (2) the section entitled “Compensating Balance Arrangement” in the Fee Schedule for Money Market Funds attached to the Agreement as Exhibit E thereto (“Exhibit E”);

 

WHEREAS, each of the Funds and the Custodian wish to confirm that the “Earnings Credit Arrangement” section in Exhibit D as set forth in Schedule 1 to this Amendment continues to apply to all Non-Money Market Funds to which it currently applies, except as specified below;

 

WHEREAS, each of the Funds and the Custodian also wish to modify the “Earnings Credit Arrangement” section in Exhibit D as set forth in Schedule 2 to this Amendment with respect to the Non-Money Market Funds identified below and in Schedule 2 to this Amendment; and

 

WHEREAS, each of the Funds and the Custodian also wish to modify the “Compensating Balance Arrangement” section in Exhibit E as set forth in Schedule 3, Schedule 4 and Schedule 5 to this Amendment with respect to the Money Market Funds identified below and in Schedule 3, Schedule 4 and Schedule 5 to this Amendment.

 

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:

 

1.              Amendment to Exhibit D. The parties hereby confirm and agree that the “Earnings Credit Arrangement” section in Exhibit D set forth in Schedule 1 to this Amendment continues to apply to all Non-Money Market Funds to which it currently applies, except that, effective from and after April 1, 2014, with respect to Federated Short-Intermediate Duration Municipal Trust and Federated Municipal Ultrashort Fund, such section in Exhibit D will be deleted in its entirety and replaced with the “Compensating Balance Arrangement” section set forth in Schedule 2 to this Amendment.

 

2.              Amendment to Exhibit E. The parties hereby confirm and agree that the “Compensating Balance Arrangement” section in Exhibit E shall be amended as follows:

 

(a)       Effective from and after April 1, 2014, with respect to Federated Capital Reserves Fund and Federated Government Reserves Fund, such section in Exhibit E will be deleted in its entirety and replaced with the “Hard Dollar Compensation Arrangement” section set forth in Schedule 3 to this Amendment;

 

(b)       Effective from and after April 1, 2014, with respect to Federated Municipal Trust, such section in Exhibit E will be deleted in its entirety and replaced with the “Compensating Balance Arrangement” section set forth in Schedule 4 to this Amendment;

 

(c)       Effective from and after June 1, 2014, with respect to US Treasury Cash Reserves, Automated Government Cash Reserves, and Government Obligations Tax Managed Fund, such section in Exhibit E will be deleted in its entirety and replaced with the “Compensating Balance Arrangement” section set forth in Schedule 5 to this Amendment.

 

3.     Miscellaneous. This Amendment constitutes the complete understanding and agreement of the parties with respect to the subject matter hereof and supersedes all prior communications with respect thereto. The Agreement, as amended hereby, shall remain in full force and effect. This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but such counterparts shall, together, constitute only one instrument. The facsimile signature of any party to this Amendment shall constitute the valid and binding execution hereof by such party. This Amendment shall be construed in accordance with the substantive laws of the State of New York, without regard to conflicts of laws principles thereof.

 

[Signature Page Follows]

 
 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of the day and year first written above.

 

THE BANK OF NEW YORK MELLON EACH OF THE REGISTERED INVESTMENT COMPANIES OR SERIES THEREOF LISTED ON SCHEDULE II TO THE AGREEMENT
   
   
By: /s/ Armando Fernandez By:  /s/ Lori A. Hensler

 

Name: Armando Fernandez

 

Name: Lori A. Hensler

 

Title: Vice President/Managing Director

 

Title: Treasurer for the Funds

 
 

 

SCHEDULE 1

 

 

[          ]

 

 

 

 

 

 
 

 

SCHEDULE 2

 

“COMPENSATING BALANCE ARRANGEMENT” SECTION IN EXHIBIT D

AS APPLICABLE TO FEDERATED SHORT-INTERMEDIATE DURATION MUNICIPAL TRUST AND FEDERATED MUNICIPAL ULTRASHORT FUND

 

Compensating Balance Arrangement

 

Each Fund and The Bank of New York Mellon (the “Bank”) have entered into an average compensating balance arrangement, which would allow a Fund to compensate the Bank for any overdrafts by maintaining a positive cash balance and conversely, on any day a Fund maintains a positive balance, the respective Fund will be permitted to overdraw the account as compensation, within the Maximum Daily Balance limits as established for each Fund as listed below.

 

In each instance, Federal Reserve requirements for minimum balances (currently 10%), will be assessed. Therefore, all overdrafts must be compensated at 100% of the total and all positive balances will allow for an overdraft of up to 90% of the total (unless the positive balance is the result of an error on the part of the Bank, in which case the positive balance would be assessed at 100%). The Funds shall maintain the average compensating balance over quarterly periods (ending March, June, September, and December). Average balances will be computed at the end of the quarter. Net negative balances will be charged at the Fed Funds rate plus 1% on the last day of the period. Quarterly net charges will be applied to the safekeeping fees. Credit is not given for net positive balances.

 

Maximum Daily Balance (“MDB”) limits have been determined for each Fund. On days where a Fund exceeds its MDB, interest will be charged on 100% of the excess overdraft balance at the Fed Funds rate plus 1%, based on the day(s) the MDB was exceeded.

 

Maximum Daily Balance +/- $25 million

Federated Short-Intermediate Duration Municipal Trust

Federated Municipal Ultrashort Fund

 

 
 

SCHEDULE 3

 

“HARD DOLLAR COMPENSATION ARRANGEMENT” SECTION IN EXHIBIT E

AS APPLICABLE TO Federated Capital Reserves Fund and
Federated Government Reserves Fund

 

Hard Dollar Compensation Arrangement

 

Each Fund and The Bank of New York Mellon (the “Bank”) have entered into a hard dollar compensation arrangement with respect to overdrafts as follows: (1) 100% of overdrawn balances with respect to a particular Fund will be charged at a rate of 50 basis points over the Fed Funds rate; (2) Monthly, such charge with respect to a particular Fund will be applied to such Fund’s safekeeping fees; and (3) Positive balances with respect to a Fund earn zero compensation.

 

 
 

SCHEDULE 4

 

“COMPENSATING BALANCE ARRANGEMENT” SECTION IN EXHIBIT E

AS APPLICABLE TO FEDERATED MUNICIPAL TRUST

 

Compensating Balance Arrangement

 

The Fund and The Bank of New York Mellon (the “Bank”) have entered into an average compensating balance arrangement, which would allow the Fund to compensate the Bank for any overdrafts by maintaining a positive cash balance and conversely, on any day the Fund maintains a positive balance, the Fund will be permitted to overdraw the account as compensation, within the Maximum Daily Balance limits as established for the Fund as listed below.

 

In each instance, Federal Reserve requirements for minimum balances (currently 10%), will be assessed. Therefore, all overdrafts must be compensated at 100% of the total and all positive balances will allow for an overdraft of up to 90% of the total (unless the positive balance is the result of an error on the part of the Bank, in which case the positive balance would be assessed at 100%). The Fund shall maintain the average compensating balance over quarterly periods (ending March, June, September, and December). Average balances will be computed at the end of the quarter. Net negative balances will be charged at the Fed Funds rate plus 1% on the last day of the period. Quarterly net charges will be applied to the safekeeping fees. Credit is not given for net positive balances.

 

Maximum Daily Balance (“MDB”) limits have been determined for the Fund. On days where the Fund exceeds its MDB, interest will be charged on 100% of the excess overdraft balance at the Fed Funds rate plus 1%, based on the day(s) the MDB was exceeded.

 

Maximum Daily Balance +/- $25 million

Federated Municipal Trust

 

 
 

SCHEDULE 5

 

“COMPENSATING BALANCE ARRANGEMENT” SECTION IN EXHIBIT E

AS APPLICABLE TO US TREASURY CASH RESERVES, AUTOMATED GOVERNMENT CASH RESERVES, AND GOVERNMENT OBLIGATIONS TAX MANAGED FUND

 

Compensating Balance Arrangement

 

Each Fund and The Bank of New York Mellon (the “Bank”) have entered into an average compensating balance arrangement, which would allow a Fund to compensate the Bank for any overdrafts by maintaining a positive cash balance and conversely, on any day a Fund maintains a positive balance, the respective Fund will be permitted to overdraw the account as compensation, within the Maximum Daily Balance limits as established for each Fund as listed below.

 

In each instance, Federal Reserve requirements for minimum balances (currently 10%), will be assessed. Therefore, all overdrafts must be compensated at 100% of the total and all positive balances will allow for an overdraft of up to 90% of the total (unless the positive balance is the result of an error on the part on the Bank, in which case the positive balance would be assessed at 100%). The Funds shall maintain the average compensating balance over quarterly periods (ending February, May, August, and November). Average balances will be computed at the end of the quarter. Net negative balances will be charged at the Fed Funds rate plus 1% on the last day of the period. Quarterly net charges will be applied to the safekeeping fees. Credit is not given for net positive balances.

 

Maximum Daily Balance (“MDB”) limits have been determined for each Fund. On days where a Fund exceeds its MDB, interest will be charged on 100% of the excess overdraft balance at the Fed Funds rate plus 1%, based on the day(s) the MDB was exceeded.

 

Maximum Daily Balance +/- $150 million

Federated U.S. Treasury Cash Reserves

 

Maximum Daily Balance +/- $100 million

Federated Government Obligations Tax Managed Fund

 

Maximum Daily Balance +/- $25 million

Federated Automated Government Cash Reserves

 

 
 

 

SEVENTEENTH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each stand alone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, as amended, and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to add certain Funds to the Schedules; and

 

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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of June 26, 2015.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By: /s/ Lori A. Hensler

Name: Lori Hensler

Title: Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Title: Vice President, Managing Director

 
 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised 6/26/15

 

A.       Non-Money Market Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Emerging Markets Equity Fund

Federated Enhanced Treasury Income Fund

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Stock Trust

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

Federated Unconstrained Bond Fund

 

 

B.       Money Market Funds

 

Federated Automated Government Cash Reserves

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 
 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised 6/26/15

 

FUNDS

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Emerging Markets Equity Fund

Federated Enhanced Treasury Income Fund

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Stock Trust

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

 

 

 
 

Eighteenth Amendment to the Custody Agreement

 

 

This Eighteenth Amendment to the Custody Agreement, is effective as of May 1, 2016 (this “Amendment”), by and between the registered investment companies listed on Schedule II to the Agreement (as defined below), as may be amended from time to time (each stand-alone registered investment company and each Series a “Fund” and collectively the “Funds”), and The Bank of New York Mellon (the “Custodian”).

 

W I T N E S S E T H:

 

WHEREAS, the parties have entered into that certain Custody Agreement, dated June 7, 2005 (as amended seventeen times previously, supplemented and/or restated, the “Agreement”), by and between the Funds and the Custodian;

 

WHEREAS, the parties have previously amended the Agreement with respect to various overdraft and compensating balance arrangements set forth in the Fee Schedule for Non-Money Market Funds attached to the Agreement as Exhibit D thereto (“Exhibit D”) and the Fee Schedule for Money Market Funds attached to the Agreement as Exhibit E thereto (“Exhibit E”), including to add or modify various “Earnings Credit Arrangements,” “Compensating Balance Arrangements” and “Hard Dollar Compensation Arrangements”; and

 

WHEREAS, each of the Funds and the Custodian wish to amend the overdraft and compensating balance arrangements between each of the Funds and the Custodian, including as set forth in the “Earnings Credit Arrangements,” “Compensating Balance Arrangements” and “Hard Dollar Compensation Arrangements” set forth in Exhibit D and Exhibit E, as set forth below.

 

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:

 

4.     Amendment. The parties hereby confirm and agree that the overdraft and compensating balance arrangements between each of the Funds and the Custodian, including as set forth in the “Earnings Credit Arrangements,” “Compensating Balance Arrangements” and “Hard Dollar Compensation Arrangements” set forth in Exhibit D and Exhibit E, are hereby amended and restated to provide as follows:

 

Each Fund and the Custodian have entered into the following arrangement, which is applicable separately with respect to each separate Fund:

(1)On a daily basis, 100% of overdrawn balances with respect to the Fund will be charged at a rate of 175 basis points over the daily effective Fed Funds rate, such charges to be applied to the Fund’s safekeeping fees on a monthly basis.
(2)On a daily basis, 90% of positive end of day balances with respect to the Fund will earn a credit at a rate of the greater of 0 or the daily effective Fed Funds rate less 50 basis points, such credits to be applied to the Fund’s safekeeping fees on a monthly basis.
(3)On a monthly basis, the net resultant charge or credit will be applied to the Fund’s safekeeping fees. Net credits that exceed the monthly safekeeping fees may be carried over into the next billing period at the discretion of the Custodian.
(4)The Funds will not be responsible for overdrafts resulting from errors or corrections by the Custodian in the reporting of available cash balances for which the Custodian is responsible under the Agreement.

 

5.     Miscellaneous. This Amendment constitutes the complete understanding and agreement of the parties with respect to the subject matter hereof and supersedes all prior communications with respect thereto. The Agreement, as amended hereby, shall remain in full force and effect. This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but such counterparts shall, together, constitute only one instrument. The facsimile signature of any party to this Amendment shall constitute the valid and binding execution hereof by such party. This Amendment shall be construed in accordance with the substantive laws of the State of New York, without regard to conflicts of laws principles thereof.

 

[Signature Page Follows]

 
 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of the day and year first written above.

 

THE BANK OF NEW YORK MELLON EACH OF THE REGISTERED INVESTMENT COMPANIES OR SERIES THEREOF LISTED ON SCHEDULE II TO THE AGREEMENT

 

 

By: _/s/ Armando Fernandez_____________ By: __/s/ Lori A. Hensler______

Title: Vice President, Managing Director Title: Treasurer for the Funds

 

 

 
 

 

NINETEENTH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each standalone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, as amended, and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to amend the names to certain Funds and add certain Funds to the Schedules; and

 

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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of December 1, 2016.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By: /s/ Lori Hensler

Name: Lori Hensler

Title: Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Name: Armando Fernandez

Title: Vice-President, Managing Director

 
 

 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised 12/1/16

 

 

 

 

A.       Non-Money Market Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Emerging Markets Equity Fund

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund (formerly Federated International Bond Fund)

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large-Cap Value Fund (formerly Federated MDT Stock Trust)

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

B.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 
 

 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised 12/1/16

 

FUNDS

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Emerging Markets Equity Fund

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund (formerly Federated International Bond Fund)

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large-Cap Value Fund (formerly Federated MDT Stock Trust)

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

 
 

 

TWENTIETH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each standalone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, as amended, and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to amend the names of certain Funds, to add certain Funds to, and to remove certain Funds from Schedules; and

 

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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of August 1, 2017.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By: /s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Name: Armando Fernandez

Title: Vice-President, Managing Director

 
 

 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised 8/1/17

 

 

 

 

A.       Non-Money Market Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large-Cap Value Fund

Federated MDT Large Cap Value Fund*

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

B.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 

 

*a portfolio of Federated MDT Equity Trust to be effective August 31, 2017

 
 

 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised 8/1/17

 

FUNDS

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large-Cap Value Fund

Federated MDT Large Cap Value Fund*

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

*a portfolio of Federated MDT Equity Trust to be effective August 31, 2017.

 

 

 
 

 

TWENTY-FIRST AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each standalone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, as amended, and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to remove certain Funds from Schedules; and

 

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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of October 1, 2017.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By: /s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Name: Armando Fernandez

Title: Vice-President, Managing Director

 
 

 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised 10/1/17

 

 

 

 

A.       Non-Money Market Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large-Cap Value Fund

Federated MDT Large Cap Value Fund*

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

B.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 

 

*a portfolio of Federated MDT Equity Trust became effective August 31, 2017

 
 

 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised 10/1/17

 

FUNDS

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large-Cap Value Fund

Federated MDT Large Cap Value Fund*

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

*a portfolio of Federated MDT Equity Trust became effective August 31, 2017.

 

 

 

 
 

 

TWENTY-SECOND AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each standalone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, as amended, and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to remove certain Funds from Schedules; and

 

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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of December 1, 2017.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By: /s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Name: Armando Fernandez

Title: Vice-President, Managing Director

 
 

 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised 12/1/17

 

 

 

 

A.       Non-Money Market Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated MDT Large Cap Value Fund*

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

B.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 

 

*a portfolio of Federated MDT Equity Trust became effective August 31, 2017

 
 

 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised 12/1/17

 

FUNDS

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated MDT Large Cap Value Fund*

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

*a portfolio of Federated MDT Equity Trust became effective August 31, 2017.

 

 

 

 

 

 
 

 

TWENTY-THIRD AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each stand alone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, amended November 7, 2007, September 5, 2008, September 8, 2009, October 23, 2009, November 13, 2009, January 13, 2010 September 1, 2010, March 1, 2011, two separate amendments dated March 25, 2011, August 1, 2012, December 31, 2012, September 24, 2013, April 28, 2014, December 1, 2014, May 14, 2015, June 26, 2015, May 1, 2016, December 1, 2016, August 1, 2017, October 1, 2017 and December 1, 2017 between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto (each a "Fund") and The Bank of New York Mellon (the "Custodian").

 

WHEREAS, each Fund is registered as a management investment company, or a series thereof, under the Investment Company Act of 1940, as amended; and

 

WHEREAS, the Funds and the Custodian desire to amend the Agreement subject to the terms and conditions set forth herein.

 

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:

 

1.       Section 3 of Article V of the Agreement is hereby deleted in its entirety and replaced with the following language:

 

3.       Notwithstanding the foregoing, Custodian will not charge the Fund any overdraft fees, penalties, or related custody charges in connection with any transaction or series of related transactions for which Custodian did not provide Fund with notice, as soon as reasonably practicable under the circumstances, of any refusal to accept or provide a price for an Actionable Trade Request as such term is defined in the FX Standing Instructions Session Range Program Description, dated March 25, 2016 or the FX Benchmark Pricing Program Description, dated March 25, 2016, as applicable.

 

2.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

 

 

 

[Remainder of Page Intentionally Left Blank]

 

 
 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of March 16, 2018.

 

Each of the registered investment companies or series thereof listed on Schedule II to the Custody Agreement, as amended from time to time.

 

By: /s/ Lori A. Hensler

Name: Lori Hensler

Title: Treasurer

 

 

THE BANK OF NEW YORK MELLON

 

 

By: _/s/ Armando Fernandez

Name: Armando Fernandez

Title: Managing Director

 
 

 

AMENDMENT TO TERMS OF

FOREIGN EXCHANGE BENCHMARK PRICING PROGRAM

AND

FOREIGN EXCHANGE STANDING INSTRUCTION SESSION RANGE PROGRAM

 

FX PROGRAM SELECTION FORM

Federated Investment Management Company (“Federated”) has received the FX Standing Instructions Session Range Program Description, dated March 25, 2016 (as amended from time to time, the “Session Range Program Description”), and the FX Standing Instructions Benchmark Pricing Program Description, dated March 25, 2016 (as amended from time to time, the “Benchmark Program Description” and collectively with the Session Range Program Description, the “Documents”).

Capitalized Terms not otherwise defined herein shall bear the meanings given to them in the Session Range Program Description or Benchmark Program Description, as applicable.

The parties agree that the terms of the Documents are amended as described herein:

  1. By executing this amendment and the FX Program Selection Form attached hereto as Exhibit A (collectively, the “Opt-In Form”), the parties express their agreement regarding the pricing and processing of FX Transactions executed pursuant to the terms of the Documents, as amended by this Opt-In Form. For avoidance of doubt, this is an agreement concerning the pricing and processing of FX Transactions, and not an agreement by either party hereto to enter into any particular FX Transaction. BNY Mellon is not in any way obligated to enter into any FX Transaction with the Customer as a result of the Customer providing instructions to BNY Mellon under either the FX Benchmark Pricing Program (the “Benchmark Program”) or the FX Standing Instructions Session Range Program Description (the “Session Range Program”). BNY Mellon may refuse to accept or provide a price for the Actionable Trade Request for any reason, including without limitation, because of market restrictions, legal, regulatory, credit or operational reasons.
  2. BNY Mellon’s Asset Servicing Representative dedicated to Federated will provide Federated with notice as soon as reasonably practicable: (i) of any refusal to accept or provide a price for the Actionable Trade Request, and (ii) of any market, legal, regulatory, credit or operational restrictions that render BNY Mellon incapable of accepting or providing a price for an Actionable Trade Request with respect to a particular currency. Such notice will be provided by email alert to Federated at the email address(es) provided below or at such other e-mail address as may be provided by Federated in writing hereafter.
  3. Federated acknowledges that each Customer identified in Exhibit B will engage in FX Transactions with BNY Mellon under the Benchmark Program for Developed Market Currencies, and under the Session Range Program for all other currencies. Federated may amend the accounts listed on Exhibit B hereto at any time by sending BNY Mellon an instruction in writing to either add account(s) or to remove account(s). The instruction shall identify the name of the account(s), account number(s), legal name(s), and the instruction to add or remove such accounts from Exhibit B. An instruction to add a new account will be thereby incorporated hereunder upon BNY Mellon’s written consent (or upon execution of an FX Transaction with respect to such account, which shall be deemed BNY Mellon’s written consent). An instruction to remove an account shall cause such account to be automatically terminated from the scope of the Documents upon receipt of such instruction without requiring BNY Mellon’s consent, provided that such termination shall not affect any obligations of such terminated account outstanding at the time of termination and including a reasonable time to act thereon.
  4. As used in the Documents, each separate legal entity is deemed to be a Customer.  Unless checked below, Federated understands and acknowledges that Netting (as defined in Annex A and described in Annex B and C of the applicable Document) will occur among accounts belonging to the same Customer. In the case of multiple accounts, if Federated does not identify which accounts belong to the same Customer, netting will occur at the account level.

We are requiring you to apply Netting across different Customers.  We have specified the exact legal names associated with each account in Exhibit B and provided that we have elected to apply Netting across different Customers, the following Indemnity shall apply:

Indemnity

The accounts listed in Exhibit B do not belong to the same Customer, they belong to various Customers. In consideration of making Netting available across the accounts of various Customers and enabling the FX trading activity of one Customer to benefit another Customer, we agree to indemnify and hold BNY Mellon and any affiliate of BNY Mellon harmless from and against any claim, loss, liability, damage, cost or expense of any nature whatsoever (including reasonable attorneys’ fees and expenses as they become due), arising out of or related to any claim of breach of any Law  in connection with the Netting across the accounts of various Customers. "Law" means any law, rule or regulation, including without limitation the Investment Company Act of 1940, Employee Retirement Income Securities Act of 1974, each as amended, or any successor federal statute.

  1. Reporting for FX Transactions shall be in the form attached, which may be modified from time to time. In the event that such modifications result in a material reduction in the information contained in the form and thereafter Federated reasonably requests such information, then BNY Mellon will provide such information as it relates to the Benchmark Program or the Session Range Program, so long as Federated’s request does not include third party information, violate any policy of BNY Mellon, conflict with any other customer’s confidentiality, and is information that BNY Mellon can produce (as reasonably determined by BNY Mellon).
  2. The parties agree that, if executing an Actionable Trade Request, prior to determining that it will not price such Actionable Trade Request in accordance with the terms of the Documents, BNY Mellon must make a reasonable and good faith determination that an Extraordinary Event has occurred or is expected to occur.
  3. Notwithstanding any provisions in the Documents to the contrary, BNY Mellon may only charge an additional or separate fee for its services outside of such fees earned by BNY Mellon in the form of Spreads or otherwise described in the Pricing sections of the Documents as part of either the Benchmark Program or the Session Range Program with the prior written agreement of Federated.
  4. The parties agree that in the event Federated chooses to terminate the agreement on behalf of a Customer or to revoke advance instructions on behalf of a Customer in accordance with Section 2.b of Annex D to each of the Documents, that such termination or revocation will be effective after the lapse of a reasonable time for BNY Mellon to act on such termination or revocation and in any event will be effective no later than 10 business days after receipt by BNY Mellon.
  5. In no event will BNY Mellon be liable for any indirect, special, incidental, consequential or punitive damages (including loss of profit, expense of use of other services, or attorney's fees), arising out of or in connection with this agreement, regardless of whether such damages arise in tort, contract or otherwise, even if BNY Mellon has been advised of the possibility of such damages. Notwithstanding the foregoing, the Documents shall not be construed to exclude or limit the liability of BNY Mellon or any of its affiliates for losses incurred in connection with any FX Transaction executed pursuant to the Documents attributable to: (i) fraud (ii) actions taken in bad faith; (iii) negligence (which shall be determined in accordance with the reasonable commercial standards of the banking industry); or (iv) any other liability that cannot be excluded or limited by Applicable Law. For purposes of the Documents and this Opt-in Form, “Applicable Law” shall mean all applicable United States or foreign federal, state and local laws, rules, regulations, interpretations, orders, judgments and decrees of any applicable regulatory authority or self-regulatory organization or of any national exchange, market or clearinghouse where foreign exchange transactions are executed.
  6. Either party may terminate this agreement upon thirty (30) days’ (or in the case of a termination for cause, five (5) days’) prior written notice to the other party. The termination shall not affect the rights, obligations and liabilities of any party hereto accrued as of the date of such termination. Notices under these Documents may be sent by electronic mail or regular mail to the other party at the addresses set forth below:

BNY Mellon: Ed McGann

BNY Mellon Asset Servicing

101 Barclay St., 3rd Floor

New York, NY 10286

Tel 212-815-5493

Edward.mcgann@bnymellon.com

Federated:       Lori Hensler

Federated Investment Management Company

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Tel 412-288-1277

lhensler@federatedinv.com

 

Tim Trebilcock

Federated Investment Management Company

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Tel 412-288-2954

ttrebilcock@federatedinv.com

11.This agreement will be governed by and construed in accordance with the law of the State of New York (without reference to choice of law doctrine). Each party hereby waives the right to trial by jury in any action or proceeding instituted with respect to this agreement.

[Remainder of this page is intentionally left blank.]

 
 

 

 

Accepted and Agreed:    
Federated Investment Management Company   The Bank of New York Mellon
     
     

By: /s/ John B. Fisher

 

   By: /s/ Edward G. McGann
Name: John B. Fisher   Name: Edward G. McGann
Title: President   Title: Managing Director
Date: April 26, 2018   Date: April 24, 2018

 

 
 

 

EXHIBIT A

FX Program Selection Form

 

 
 

 

Version Date: 17th July, 2014

1.

 

2.

 

* Max size is 35 alphanumeric characters

3.

* Please note that the Questionnaire contains dropdown menus

4.

We hereby confirm, that the information provided in this Questionnaire is correct, and that any future amendments must be notified to BNY Mellon in writing.

FX Program Selection Form - For Asset Owner to complete

***** Please fully complete the Questionnaire, then sign and return (including the original excel file) to FXPricingProgramElections@bnymellon.com*****

 

FX Program Selection Form - For Asset Owner to complete

 

We understand that The Bank of New York Mellon (“BNY Mellon”) offers two standard pricing options for custody related Foreign Exchange (FX): (1) the Session Range Program; and (2) the Defined Spread Program. There is an additional alternative pricing option called FX Benchmark Pricing which applies to developed market currencies only as defined in its latest Program Description.

 

We understand that if we do not specifically select the Defined Spread Program or the FX Benchmark Pricing option, or fail to execute an FX Program Election Form, any custody related foreign exchange instructions we send will be priced either in accordance with another arrangement to which we and BNY Mellon have agreed or if no such agreement has occured, such instructions will be priced in accordance with BNY Mellon's then-applicable default program for handling such instructions. Currently, Session Range is the default program for handling such instructions.

 

If we have any questions concerning BNY Mellon’s FX pricing options, we shall contact our Relationship Manager.

We are instructing BNY Mellon to price FX transactions involving the currency pairs as specified below (please select one of the following): For FX transactions involving two Developed Market currencies:

Developed Market currencies mean each of the following (ISO Codes): AUD, CAD, CHF, CZK, DKK, EUR, GBP, HKD, HUF, ILS, JPY, MXN, NOK, NZD, PLN, RON, SEK, SGD, TRY, USD , ZAR.
Please select the service offering to apply to custody related FX FX Benchmark Pricing
https://workbench.bnymellon.com/reference/wb_reference.jsp#mfep Fixing Time 4:00 PM EST (20L – London Close)

 

We, the undersigned Customer, have received the latest version of the FX Benchmark Pricing Program Description available at the above web link. We are directly dealing with you, BNY Mellon, on our own behalf and/or have appointed one or more investment advisers or investment managers (a “Manager”) as our agents to deal with you, as we have notified you in writing from time to time. We on our own behalf agree that each Customer identified as part of this set up form will engage in FX Transactions with you under the FX Benchmark Pricing Program (as described in the Program Description), for those trade requests identified in the Program Description. We understand that in addition to this form, we (if applicable) may have to sign other administrative forms to participate in the service.

 

For FX transactions involving one or more Emerging Market currencies:

  
Emerging Market currencies mean any other currency that is not a Developed Market currency.
Please select the service offering to apply to custody related FX Session Range (Default)

 

We, the undersigned Customer, have received the latest version of the Session Range Program Description available at the above web link. We are directly dealing with you, BNY Mellon, on our own behalf and/or have appointed one or more investment advisers or investment managers (a “Manager”) as our agents to deal with you, as we have notified you in writing from time to time. We on our own behalf agree that each Customer identified as part of this set up form will engage in FX Transactions with you under the Session Range Pricing Program (as described in the Program Description), for those trade requests identified in the Program Description. We understand that in addition to this form, we (if applicable) may have to sign other administrative forms to participate in the service.

Federated Investment Management Company

 

 

By: /s/ John B. Fisher

 

Please complete the Account List tab.

Title:

Date:

 

FX Program Election

 

 

 
 

FX Program Selection Form - Account List - For Asset Owner to complete

 

We understand that BNY Mellon offers Price Netting (as defined in the relevant program description) to foreign exchange transactions ("FX Transactions") at the legal entity level (across accounts of the same legal entity) provided that we direct BNY Mellon as to which accounts belong to the respective legal entity (which can be provided below). Without such direction, Price Netting will default to the account level.

 

 

Please select the netting option to be applied to the FX Program group (Choose drop-down option)

 

Across Accounts of the Same Legal Entity

 

If we apply "Netting Across Accounts of Different (but related) Legal Entities", then the following indemnity shall apply:

 

Indemnity

The accounts listed in the account list do not belong to the same Customer, they belong to various Customers. In consideration of making Netting available across the accounts of various Customers and enabling the FX trading activity of one Customer to benefit another Customer, we agree to indemnify and hold BNY Mellon and any affiliate harmless from and against any claim, loss, liability, damage, cost or expense of any nature whatsoever (including reasonable attorneys’ fees and expenses as they become due), arising out of or related to any claim of breach of any Law in connection with the Netting across the accounts of various Customers. "Law" means any law, rule or regulation.

 

Account List

 

 

 
 

EXHIBIT B

List of Customers

Account Name Account Number Legal Entity Name
157877 FARF FEDERATED ABSOLUTE RETURN FUND
557219 FEMDF FEDERATED EMERGING MARKET DEBT FUND
385540 FGSVF FEDERATED GLOBAL STRATEGIC VALUE DIVIDEND FUND
557217 FGTRB FEDERATED GLOBAL TOTAL RETURN BOND FUND
557218 FIBSP FEDERATED INTERNATIONAL BOND STRATEGY PORTFOLIO
557242 FIDSP FEDERATED INTERNATIONAL DIVIDEND STRATEGY PORTFOLIO
557220 FILF FEDERATED INTERNATIONAL LEADERS FUND

 

 

  
   
   
   
By:/s/ John B. Fisher  
Name: John B. Fisher  
Title: President  
Date: April 26, 2018  
       

 

 
 

 

TWENTY-FOURTH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each standalone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, as amended, and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to remove certain Funds from Schedules; and

 

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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of April 1, 2018.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By: /s/ Deborah M. Molini

Name: Deborah M. Molini

Title: Assistant Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Name: Armando Fernandez

Title: Vice-President, Managing Director

 
 

 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised April 1, 2018

 

 

 

 

A.       Non-Money Market Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

B.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 

 

 

 
 

 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised April 1, 2018

 

FUNDS

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

 

 
 

 

TWENTY-FIFTH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each standalone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, as amended, and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to add certain Funds and remove certain Funds to the Schedules; and

 

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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of September 1, 2018.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By /s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Assistant Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Name: Armando Fernandez

Title: Vice-President, Managing Director

 
 

 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised September 1, 2018

 

 

 

 

A.       Non-Money Market Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes SDG Engagement Equity Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

B.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated U.S. Treasury Cash Reserves

 

 

 

 
 

 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised September 1, 2018

 

FUNDS

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes SDG Engagement Equity Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

 
 

 

TWENTY-SIXTH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each standalone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, as amended, and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to add certain Funds to the Schedules; and

 

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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of December 1, 2018.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By /s/ Deborah M. Molini

Name: Deborah M. Molini

Title: Assistant Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Name: Armando Fernandez

Title: Vice-President, Managing Director

 
 

 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised December 1, 2018

 

 

 

 

A.       Non-Money Market Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes Unconstrained Credit Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

B.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated U.S. Treasury Cash Reserves

 

 

 

 
 

 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised December 1, 2018

 

FUNDS

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes Unconstrained Credit Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

 

 

 
 

 

TWENTY-SEVENTH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each standalone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, as amended, and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to add certain Funds to the Schedules; and

 

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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of March 1, 2019.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By /s/ Deborah M. Molini

Name: Deborah M. Molini

Title: Assistant Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ James Farrell

Name: James Farrell

Title: Vice-President

 
 

 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised March 1, 2019

 

 

 

 

A.       Non-Money Market Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes Unconstrained Credit Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

B.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated U.S. Treasury Cash Reserves

 

 

 

 
 

 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised March 1, 2019

 

FUNDS

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes Unconstrained Credit Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

 

 

 

 

 
 

 

TWENTY-EIGHTH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each standalone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, as amended, and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to add certain Funds to the Schedules; and

 

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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of April 1, 2019.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By:/s/ Deborah M. Molini

Name: Deborah M. Molini

Title: Assistant Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ James Farrell

Name: James Farrell

Title: Vice-President

 
 

 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised April 1, 2019

 

 

A.       Non-Money Market Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes Unconstrained Credit Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

*Federated Max-Cap Index Fund

Federated MDT Large Cap Value Fund

*Federated Mid-Cap Index Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

*Federated Strategic Value Dividend Fund

 

 

B.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated U.S. Treasury Cash Reserves

 

*The effective date of the Amendment is April 1, 2019, except that with respect to such Funds, it is acknowledged that BNYM may be required to establish procedures in its trade settlement system with respect to trades executed between March 28 and March 29, 2019 that may settle between April 1 and April 2, 2019.  Only with respect to these Funds and these very limited services, will the parties agree to abide by the terms of the Agreement prior to April 1, 2019.

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised April 1, 2019

 

FUNDS

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes Unconstrained Credit Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

*Federated Max-Cap Index Fund

Federated MDT Large Cap Value Fund

*Federated Mid-Cap Index Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

*Federated Strategic Value Dividend Fund

 

 

 

 

 

 

 

 

 

 

 

 

TWENTY-NINTH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each standalone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, as amended, and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to add certain Funds to the Schedules; and

 

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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of June 1, 2019.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By: Deborah M. Molini

Name: Deborah M. Molini

Title: Assistant Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: James Farrell

Name: James Farrell

Title: Vice-President

 
 

 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised June 1, 2019

 

 

A.       Non-Money Market Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Emerging Markets Equity Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes Unconstrained Credit Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Equity Fund

Federated International Growth Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

*Federated Max-Cap Index Fund

Federated MDT Large Cap Value Fund

*Federated Mid-Cap Index Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

*Federated Strategic Value Dividend Fund

 

 

B.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated U.S. Treasury Cash Reserves

 

 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised June 1, 2019

 

FUNDS

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Emerging Markets Equity Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes Unconstrained Credit Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Equity Fund

Federated International Growth Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

*Federated Max-Cap Index Fund

Federated MDT Large Cap Value Fund

*Federated Mid-Cap Index Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

*Federated Strategic Value Dividend Fund

 

 

 

 

 

 

 
 

 

THIRTIETH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each standalone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, as amended, and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to remove certain Funds and add certain other funds to the Schedules;

 

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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of September 1, 2019.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By: /s/ Deborah M. Molini

Name: Deborah M. Molini

Title: Assistant Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ James Farrell

Name: James Farrell

Title: Vice-President

 
 

 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised September 1, 2019

 

 

A.       Non-Money Market Funds

 

Federated Emerging Market Debt Fund

Federated Emerging Markets Equity Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes SDG Engagement High Yield Credit Fund

Federated Hermes Unconstrained Credit Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Equity Fund

Federated International Growth Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

*Federated Max-Cap Index Fund

Federated MDT Large Cap Value Fund

*Federated Mid-Cap Index Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

*Federated Strategic Value Dividend Fund

 

 

B.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated U.S. Treasury Cash Reserves

 

 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised September 1, 2019

 

FUNDS

 

Federated Emerging Market Debt Fund

Federated Emerging Markets Equity Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes SDG Engagement High Yield Credit Fund

Federated Hermes Unconstrained Credit Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Equity Fund

Federated International Growth Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

*Federated Max-Cap Index Fund

Federated MDT Large Cap Value Fund

*Federated Mid-Cap Index Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

*Federated Strategic Value Dividend Fund

 

 

 
 

 

 

THIRTY-FIRSTAMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each standalone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, as amended, and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to add certain Funds and add certain other funds to the Schedules;

 

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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of March 1, 2020.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By: /s/ Deborah Molini Kraus

Name: Deborah Molini Kraus

Title: Assistant Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ James Farrell

Name: James Farrell

Title: Vice-President

 
 

 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised March 1, 2020

 

 

A.       Non-Money Market Funds

 

Federated Emerging Market Debt Fund

Federated Emerging Markets Equity Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes SDG Engagement High Yield Credit Fund

Federated Hermes Unconstrained Credit Fund

Federated Hermes US SMID Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Equity Fund

Federated International Growth Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

*Federated Max-Cap Index Fund

Federated MDT Large Cap Value Fund

*Federated Mid-Cap Index Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

*Federated Strategic Value Dividend Fund

 

 

B.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated U.S. Treasury Cash Reserves

 

 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised March 1, 2020

 

FUNDS

 

Federated Emerging Market Debt Fund

Federated Emerging Markets Equity Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes SDG Engagement High Yield Credit Fund

Federated Hermes Unconstrained Credit Fund

Federated Hermes US SMID Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Equity Fund

Federated International Growth Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

*Federated Max-Cap Index Fund

Federated MDT Large Cap Value Fund

*Federated Mid-Cap Index Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

*Federated Strategic Value Dividend Fund

 

1 Fee is expressed in basis points (b.p.) per annum where 1b.p. equals one hundredth of one percent (i.e. 0.01%) and is calculated based upon month-end market value, unless stated otherwise.

2 A transaction is defined as a receipt or deliver-versus-payment, a free receive or deliver, maturities, or security transaction related to corporate events.

3 Eurobonds are held in Euroclear at a standard rate, but other types of securities (including but not limited to equities, domestic market debt and mutual funds) will be subject to a surcharge. In addition, certain transactions that are delivered within Euroclear or from a Euroclear account to a third party depository or settlement system, will be subject to a surcharge (surcharge schedule available upon request). NOTE: For all other markets listed above, surcharges may apply if a security is held outside of the local market.

4 This fee will be applicable for assets held on The Bank of New York Mellon’s custody or accounting systems but not held in custody within The Bank of New York Mellon’s network of subcustodian banks and agents.

1 Fee is expressed in basis points (b.p.) per annum where 1b.p. equals one hundredth of one percent (i.e. 0.01%) and is calculated based upon month-end market value, unless stated otherwise.

2 A transaction is defined as a receipt or deliver-versus-payment, a free receive or deliver, maturities, or security transaction related to corporate events.

3 Eurobonds are held in Euroclear at a standard rate, but other types of securities (including but not limited to equities, domestic market debt and mutual funds) will be subject to a surcharge. In addition, certain transactions that are delivered within Euroclear or from a Euroclear account to a third party depository or settlement system, will be subject to a surcharge (surcharge schedule available upon request). NOTE: For all other markets listed above, surcharges may apply if a security is held outside of the local market.

4 This fee will be applicable for assets held on The Bank of New York Mellon’s custody or accounting systems but not held in custody within The Bank of New York Mellon’s network of subcustodian banks and agents

5 A transaction is defined as a receipt or deliver-versus-payment, a free receive or deliver, maturities, or security transaction related to corporate events.

6 Fee is expressed in basis points (b.p.) per annum where 1b.p. equals one hundredth of one percent (i.e. 0.01%) and is calculated based upon month-end market value, unless stated otherwise.

7 Eurobonds are held in Euroclear at a standard rate, but other types of securities (including but not limited to equities, domestic market debt and mutual funds) will be subject to a surcharge. In addition, certain transactions that are delivered within Euroclear or from a Euroclear account to a third party depository or settlement system, will be subject to a surcharge (surcharge schedule available upon request). NOTE: For all other markets listed above, surcharges may apply if a security is held outside of the local market.

8 This fee will be applicable for assets held on The Bank of New York Mellon’s custody or accounting systems but not held in custody within The Bank of New York Mellon’s network of subcustodian banks and agents.

EX-99.SERV AGR1 13 ex28h1aservagree.htm SERVICES AGREEMENT

Exhibit 28 (h) (1) (a) under Form N-1A
Exhibit 99 under item 601/REG. S-K

SERVICES AGREEMENT

THIS AGREEMENT, dated and effective as of January 1, 2004 (this “Agreement”) between FEDERATED INVESTMENT MANAGEMENT COMPANY, a Delaware statutory trust (the “Adviser”), and FEDERATED ADVISORY SERVICES COMPANY, a Delaware statutory trust (“FASC”),

WITNESSETH:

WHEREAS, the Adviser serves pursuant to advisory or subadvisory agreements (“Advisory Agreements”) as investment advisor or subadvisor to investment companies registered under the Investment Company Act of 1940 (the “1940 Act”) and/or separate accounts not required to be so registered (collectively, “Accounts”); and

WHEREAS, the Adviser desires to engage FASC to provide certain services to Adviser in connection with the services to be provided by the Adviser under the Advisory Agreements;

NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:

1. Services. FASC agrees to provide to the Adviser the services indicated in Exhibit A to this Agreement (the “Services”).

2. Fees. For its Services under this Agreement, Adviser agrees to pay FASC the Services Fees calculated and payable in accordance with Exhibit B to this Agreement.

3. Records. FASC shall create and maintain all necessary books and records in accordance with all applicable laws, rules and regulations, including but not limited to records required by Section 31(a) of the 1940 Act and the rules thereunder, as the same may be amended from time to time, pertaining to the Services performed by it and not otherwise created and maintained by another party. Where applicable, such records shall be maintained by FASC for the periods and in the places required by Rule 31a-2 under the 1940 Act. The books and records pertaining to any Account which are in the possession of FAS shall be the property of such Account. The Account, or its owners or authorized representatives, shall have access to such books and records at all times during FASC's normal business hours. Upon reasonable request, copies of any such books and records shall be provided promptly by FASC to the Account or the Account's owners or authorized representatives.

4. Limitation of Liability and Indemnification.

(a) FASC shall not be responsible for any error of judgment or mistake of law or for any loss suffered by the Advisor or any Account in connection with the matters to which this Agreement relates, except a loss resulting from willful malfeasance, 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.

(b) The Adviser shall indemnify FASC and shall hold FASC harmless from and against any liability to any Account or to any other person which may incurred by or asserted against FASC for any action taken or omitted by it in performing the Services in accordance with the above standards, and any expenses (including the reasonable fees and expenses of its counsel) which may be incurred by FASC in investigating or defending itself against the assertion of any such liability. FASC shall give prompt notice to the Adviser of the assertion of any claim or liability which is reasonably likely to result in a claim for indemnification under this Section; provided that the failure to give such notice, or any delay in giving such notice, shall not lessen the obligation of the Adviser to indemnify FASC except to the extent it results in actual prejudice. The Adviser shall have the option, by notice to FASC, to assume the defense of any claim which may be the subject of indemnification hereunder. In the event such notice is given, the Adviser shall assume the defense of the claim, and FASC shall cooperate with the Adviser in such defense, subject to the obligation of the Adviser to reimburse FASC for the expenses resulting therefrom. In the event Adviser gives notice that it will assume the defense of any claim, the Adviser shall not be obligated to indemnify FASC for any further legal or other expenses incurred in investigating or defending such claim, except those incurred at the request of the Adviser or its counsel. FASC shall in no event compromise or settle any claim for which it may seek indemnification hereunder, except with the prior written consent of the Adviser or unless the Adviser fails, within 30 days after notice of the terms of such settlement, to notify FASC that it has assumed the defense of such claim and will indemnify FASC for any liability resulting therefrom.

(c) The Adviser and FASC are each hereby expressly put on notice of the limitation of liability set forth in the Declaration of Trust of the other party. Each party agrees that the obligations of the other party pursuant to this Agreement shall be limited solely to such party and its assets, and neither party shall seek satisfaction of any such obligation from the shareholders, trustees, officers, employees or agents of the other party, or any of them.

5. Duration and Termination.

(a) Subject to the remaining provisions of this Section, the term of this Agreement shall begin on the effective date first above written and shall continue until terminated by mutual agreement of the parties hereto or by either party on not less than 60 days’ written notice to the other party hereto.

(b) Notwithstanding the foregoing, to the extent that the Services to be provided with respect to any Account which is registered as an investment company under the 1940 Act (herein referred to as a “registered investment company”) are services referred to in the definition of “investment advisor” under Section 202(a)(11) of the Investment Company Act of 1940 (herein referred to as “investment advisory services”), then with respect to such Account, this Agreement:

(i) shall not commence until the effective date of its approval by the board of directors or trustees (“Board”) of such Account;

(ii) shall continue from year to year thereafter, subject to the provisions for termination and all other terms and conditions hereof, only if such continuation shall be specifically approved at least annually by a majority of the Board, including a majority of the members of the Board who are not parties to this Agreement or interested persons of any such party (other than as members of the Board) cast in person at a meeting called for that purpose;

(iii) may be terminated at any time without the payment of any penalty by the Board or by a vote of a majority of the outstanding voting securities (as defined in Section 2(a)(42) of the 1940 Act) of the Account on 60 days’ written notice to the Adviser;

(iv) shall automatically terminate in the event of (A) its assignment (as defined in the 1940 Act) or (B) termination of the Advisory Agreement for any reason whatsoever.

6. Amendment. This Agreement may be amended at any time by mutual written agreement of the parties hereto; provided, however, that no Amendment to this Agreement shall be effective with respect to any investment advisory services to be provided to any Account which is registered investment company unless, to the extent required by Section 15(a)(2) of the 1940 Act, such amendment has been approved both by the vote of a majority of the Board of the Account, including a majority of the members of the Board who are not parties to this Agreement or interested persons of any such party (other than as members of the Board), cast in person at a meeting called for that purpose and, where required by Section 15(a)(2) of the 1940 Act, on behalf of the Account by a majority of the outstanding voting securities of such Account as defined in Section 2(a)(42) of the 1940 Act.

7. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania.

8. Section Headings; Counterparts. The underlined Section headings in this Agreement are for convenience of reference only and shall not affect its construction or interpretation. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.

IN WITNESS WHEREOF, the parties hereto, through their duly authorized officers, have executed this Agreement as of the effective date first above written.

FEDERATED INVESTMENT MANAGEMENT COMPANY

By: /s/ G. Andrew Bonnewell

Name: G. Andrew Bonnewell

Title: Vice President

FEDERATED ADVISORY SERVICES COMPANY

By: /s/ Keith M. Schappert

Name: Keith M. Schappert

Title: President

 

 
 

EXHIBIT A

DESCRIPTION OF SERVICES

The following are the categories of Services to be provided by FASC to the Adviser pursuant to the Agreement:

1.       Performance attribution.  Performance attribution enables portfolio managers and senior management to identify the specific drivers behind each portfolio’s performance.  Performance attribution analysts are responsible for data integrity, creation of attribution reports and maintenance of attribution models.
2.       Administration and Risk Management.  Employees of Federated Advisory Services Company provide support to portfolio managers and other employees of affiliated advisers.  Such services may include development of risk management programs, production of portfolio and compliance reports for clients and/or fund Boards, completion of required broker and custody documentation, development and documentation of operational procedures, coordination of proxy voting activities, on-site support of hardware and software, etc.

 

Categories 1 and 2 above shall not be treated as “investment advisory services” for purposes of Section 5(b) of the Agreement.

 

 
 

EXHIBIT B

CALCULATION AND PAYMENT OF SERVICES FEES

For each Category of Services referenced in Exhibit A, Adviser shall pay FASC a Services Fee, payable monthly in arrears, determined according to the following formula:

Services Fee = Cost of Services x Adviser’s Assets under Management
Total Assets Under Management		 x (1 + Applicable Margin)

 

Where:

“Cost of Services” is FASC’s total Operating Costs incurred in providing the applicable Category of Services during the month to all investment advisers for which FASC provides that Category of Services.

“Adviser’s Assets under Management” is the total average assets under management for the month for all Accounts or portions thereof for which the Adviser acts as investment adviser or subadvisor and which utilize the Category of Services.

“Total Assets under Management” is the total average assets under management for the month for all Accounts or portions thereof for which all investment advisers (including the Adviser) to which FASC provides that Category of Services act as investment adviser or subadviser and which utilize the Category of Services.

“Applicable Margin” is 0.10.

“Operating Costs” means all operating expenses and non-operating expenses of FASC for the cost center(s) providing the applicable Category of Services.

 
 

AMENDMENT TO SERVICES AGREEMENT

This AMENDMENT TO SERVICES AGREEMENT, dated and effective as of March 30, 2009 (this “Amendment”), is made between FEDERATED INVESTMENT MANAGEMENT COMPANY, a Delaware statutory trust (the “Adviser”), and FEDERATED ADVISORY SERVICES COMPANY, a Delaware statutory trust (“FASC”). Capitalized terms used, but not defined, in this Amendment have the meanings given to such terms in the Services Agreement (as defined below).

RECITALS

WHEREAS, the Adviser and FASC have entered into that certain Services Agreement dated as of January 1, 2004 (as amended, the “Services Agreement”), pursuant to which FASC provides certain performance attribution, administration and risk management, equity trading and transaction settlement, fundamental analysis, and quantitative analysis services to Adviser in connection with Adviser providing investment advisory or sub-advisory services to investment companies registered under the Investment Company Act of 1940 (“1940 Act”) and/or separate accounts not required to be so registered (collectively, “Accounts”); and

WHEREAS, the Adviser and FASC desire to amend the Services indicated in Exhibit A to the Services Agreement, solely with respect to Accounts that are not investment companies registered under the 1940 Act, to provide that, as part of the administration and risk management services provided by FASC, FASC may provide certain coordination of client portfolios and related fixed income trade execution implementation and administration services to Adviser when Adviser is acting as adviser or sub-adviser with respect to such Accounts.

NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:

1.       Amendment to Exhibit A to Services Agreement. Solely with respect to Accounts that are not investment companies registered under the 1940 Act, the section of Exhibit A to the Services Agreement entitled “Administration and Risk Management” shall be, and hereby is, deleted in its entirety and replaced with the following:

“2. Administration and Risk Management. Employees of Federated Advisory Services Company provide support to portfolio managers and other employees of affiliated advisers. Such services may include development of risk management programs, production of portfolio and compliance reports for clients and/or fund Boards, coordination of client portfolios and related fixed income trade execution implementation and administration, completion of required broker and custody documentation, development and documentation of operational procedures, coordination of proxy voting activities, on-site support of hardware and software, etc.”

2.       Miscellaneous. This Amendment shall be effective as of the date first above written upon its execution and delivery by each of the parties hereto. The Services Agreement, as amended by this Amendment with respect to Accounts that are not investment companies registered under the 1940 Act, shall remain in full force and effect. The Services Agreement also shall remain in full force and effect without amendment with respect to Accounts that are investment companies under the 1940 Act. This Amendment shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania. This Amendment may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Amendment and all of which, when taken together, will be deemed to constitute one and the same agreement.

IN WITNESS WHEREOF, the parties hereto, through their duly authorized officers, have executed this Amendment as of the date first above written.

 

FEDERATED INVESTMENT MANAGEMENT COMPANY FEDERATED ADVISORY SERVICES COMPANY
By:  /s/ John B. Fisher By:  /s/ J. Christopher Donahue
Name:  John B. Fisher Name:  J. Christopher Donahue
Title:  President Title:  Chairman

 

 
 

 

SECOND AMENDMENT TO SERVICES AGREEMENT

 

This SECOND AMENDMENT TO SERVICES AGREEMENT, dated and effective as of March 1, 2016, (this “Second Amendment”), is made between FEDERATED INVESTMENT MANAGEMENT COMPANY, a Delaware statutory trust (the “Adviser”), and FEDERATED ADVISORY SERVICES COMPANY, a Delaware statutory trust (“FASC”). Capitalized terms used, but not defined, in this Amendment have the meanings given to such terms in the Services Agreement (as defined below).

 

RECITALS

 

WHEREAS, the Adviser and FASC have entered into that certain Services Agreement dated as of January 1, 2004 (as amended, the “Services Agreement”), pursuant to which FASC provides certain performance attribution and administration and risk management services to Adviser in connection with Adviser providing investment advisory or sub-advisory services to investment companies registered under the Investment Company Act of 1940 (“1940 Act”) and/or separate accounts not required to be so registered (collectively, “Accounts”);

 

WHEREAS, the Adviser and FASC have entered into the Amendment to Services Agreement dated as of March 30, 2009 (the “Amendment”), pursuant to which the Services indicated in Exhibit A to the Services Agreement were amended solely with respect to Accounts that are not investment companies registered under the 1940 Act, to provide that, as part of the administration and risk management services provided by FASC, FASC may provide certain coordination of client portfolios and related fixed income trade execution implementation and administration services to Adviser when Adviser is acting as adviser or sub-adviser with respect to such Accounts; and

 

WHEREAS, the Adviser and FASC desire to amend the Services indicated in Exhibit A to the Services Agreement, as amended, solely with respect to Accounts for which the Adviser trades in equity securities, equity derivatives and other related equity investments as part of the investment strategy for the Account, to provide that FASC may provide equity trading and transaction settlement, fundamental analysis and quantitative analysis services to Adviser when Adviser is acting as adviser or sub-adviser with respect to such Accounts.

 

NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:

 

1.       Second Amendment to Exhibit A to Services Agreement. Exhibit A to the Services Agreement shall be, and here by is, supplemented with the following:

 

“3. Equity Trading and Transaction Settlement. The equity trading desks execute buy and sell order based on instructions provided by affiliated advisers. The trading staff either places orders electronically or contacts brokers to place orders, find liquidity and seek price levels. Upon completion of a transaction, the transaction settlement group works with the broker and the account custodian to ensure timely and accurate exchange of securities and monies.

 

4.Fundamental Analysis. The equity investment analysts provide independent research and analysis of specific companies within a sector. Typically, analysis includes review of published reports, interviews of company management, on-site observation of company operations, and the use of various financial models. In addition, analysts read trade journals, attend industry conferences, and focus on trends within the sector and industry. Based on this proprietary analysis, the analyst makes buy, sell or hold recommendations to the Adviser.

 

5.Quantitative Analysis. Quantitative analysts develop and apply financial models designed to enable equity portfolio managers and fundamental analysts to screen potential and current investments, assess relative risk and enhance performance relative to benchmarks and peers.

 

To the extent that such services are to be provided with respect to any Account which is a registered investment company, Categories 3, 4 and 5 above shall be treated as “investment advisory services” for purposes of Section 5(b) of the Agreement.”

 

2.       Miscellaneous. This Second Amendment shall be effective as of the date first above written upon its execution and delivery by each of the parties hereto. The Services Agreement, as amended by the Amendment and this Second Amendment with respect to Accounts for which the Adviser trades in equity securities, equity derivatives and other related equity investments as part of the investment strategy for the Account, shall remain in full force and effect. The Services Agreement, as amended by the Amendment, also shall remain in full force and effect without this Second Amendment with respect to Accounts for which the Adviser does not trade in equity securities, equity derivatives and other related equity investments as part of the investment strategy for the Account. This Second Amendment shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania. This Second Amendment may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Second Amendment and all of which, when taken together, will be deemed to constitute one and the same agreement.

 

IN WITNESS WHEREOF, the parties hereto, through their duly authorized officers, have executed this Second Amendment as of the date first above written.

 

 

FEDERATED INVESTMENT MANAGEMENT COMPANY FEDERATED ADVISORY SERVICES COMPANY
By:  /s/ John B. Fisher By:  /s/ J. Christopher Donahue
Name:  John B. Fisher Name:  J. Christopher Donahue
Title:  President Title:  Chairman

 

 

 

 

 
 

LIMITED POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, dated as of January 1, 2004, that FEDERATED INVESTMENT MANAGEMENT COMPANY, a statutory trust duly organized under the laws of the State of Delaware (the “Adviser”), does hereby nominate, constitute and appoint FEDERATED ADVISORY SERVICES COMPANY, a statutory trust duly organized under the laws of the State of Delaware ("FASC"), to act hereunder as the true and lawful agent and attorney-in-fact of the Adviser, acting on behalf of each of the funds or accounts for which Adviser acts as investment adviser or subadviser shown on Schedule 1 attached hereto and incorporated by reference herein (each such fund or account being hereinafter referred to as a "Fund" and collectively as the "Funds"), for the specific purpose of executing and delivering all such agreements, instruments, contracts, assignments, bond powers, stock powers, transfer instructions, receipts, waivers, consents and other documents, and performing all such acts, as Adviser, or FASC acting as agent for the Adviser pursuant to the Services Agreement dated as of January 1, 2004 between the Adviser and FASC (such agreement, as may be amended, supplemented or otherwise modified from time to time is hereinafter referred to as the “Services Agreement”), may deem necessary or reasonably desirable, related to the acquisition, disposition and/or reinvestment of the funds and assets of a Fund in accordance with Adviser's supervision of the investment, sale and reinvestment of the funds and assets of each Fund pursuant to the authority granted to the Adviser as investment adviser or subadviser of each Fund under the Adviser’s investment advisory or subadvisory contract for such Fund (such investment advisory or subadvisory contract, as may be amended, supplemented or otherwise modified from time to time is hereinafter referred to as the "Investment Advisory Contract").

The Adviser hereby ratifies and confirms as good and effectual, at law or in equity, all that FASC, and its officers and employees, may do by virtue hereof. However, despite the above provisions, nothing herein shall be construed as imposing a duty on FASC to act or assume responsibility for any matters referred to above or other matters even though FASC may have power or authority hereunder to do so. Nothing in this Limited Power of Attorney shall be construed (i) to be an amendment or modifications of, or supplement to, the Investment Advisory Contract, (ii) to amend, modify, limit or denigrate any duties, obligations or liabilities of the Adviser under the terms of the Investment Advisory Contract or (iii) exonerate, relieve or release the Adviser from any losses, obligations, penalties, actions, judgments and suits and other costs, expenses and disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Adviser (x) under the terms of the Investment Advisory Contract or (y) at law, or in equity, for the performance of its duties as the investment adviser or subadviser of any of the Funds.

The Adviser hereby agrees to indemnify and save harmless FASC and its trustees, officers and employees (each of the foregoing an "Indemnified Party" and collectively the "Indemnified Parties") against and from any and all losses, obligations, penalties, actions, judgments and suits and other costs, expenses and disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against an Indemnified Party, other than as a consequence of gross negligence or willful misconduct on the part of an Indemnified Party, arising out of or in connection with this Limited Power of Attorney or any other agreement, instrument or document executed in connection with the exercise of the authority granted to FASC herein to act on behalf of the Adviser, including without limitation the reasonable costs, expenses and disbursements in connection with defending such Indemnified Party against any claim or liability related to the exercise or performance of any of FASC's powers or duties under this Limited Power of Attorney or any of the other agreements, instruments or documents executed in connection with the exercise of the authority granted to FASC herein to act on behalf of the Adviser, or the taking of any action under or in connection with any of the foregoing. The obligations of the Adviser under this paragraph shall survive the termination of this Limited Power of Attorney with respect to actions taken by FASC on behalf of the Adviser during the term of this Limited Power of Attorney.

Any person, partnership, corporation or other legal entity dealing with FASC in its capacity as attorney-in-fact hereunder for the Adviser on behalf of any Fund is hereby expressly put on notice that FASC is acting solely in the capacity as an agent of the Adviser as agent for the Fund and that any such person, partnership, corporation or other legal entity must look solely to the Fund in question for enforcement of any claim against the Fund, as FASC assumes no personal liability whatsoever for obligations of the Fund entered into by FASC in its capacity as attorney-in-fact for the Adviser.

Each person, partnership, corporation or other legal entity which deals with a Fund through FASC in its capacity as agent and attorney-in-fact of the Adviser, is hereby expressly put on notice (i) that all persons or entities dealing with the Fund must look solely to the assets of the Fund on whose behalf FASC is acting pursuant to its powers hereunder for enforcement of any claim against the Fund, as the trustees, officers and/or agents of such Fund, the shareholders of the various classes of shares of the Fund, and the other Funds of the trust or corporation of which a Fund may be a series, assume no personal liability whatsoever for obligations entered into on behalf of such Fund, and (ii) that the rights, liabilities and obligations of any one Fund are separate and distinct from those of any other Fund.

The execution of this Limited Power of Attorney by the Adviser acting on behalf of the several Funds shall not be deemed to evidence the existence of any express or implied joint undertaking or appointment by and among any or all of the Funds. Liability for or recourse under or upon any undertaking of FASC pursuant to the power or authority granted to FASC under this Limited Power of Attorney under any rule of law, statute or constitution or by the enforcement of any assessment or penalty or by legal or equitable proceedings or otherwise shall be limited only to the assets of the Fund on whose behalf FASC was acting pursuant to the authority granted hereunder.

The Adviser hereby agrees that no person, partnership, corporation or other legal entity dealing with FASC shall be bound to inquire into FASC's power and authority hereunder and any such person, partnership, corporation or other legal entity shall be fully protected in relying on such power or authority unless such person, partnership, corporation or other legal entity has received prior written notice from the Adviser that this Limited Power of Attorney has been revoked. This Limited Power of Attorney shall be revoked and terminated automatically upon the cancellation or termination of the Services Agreement or as to any Fund upon the cancellation or termination of the Adviser’s Investment Advisory Contract for such Fund. Except as provided in the immediately preceding sentence, the powers and authorities herein granted may be revoked or terminated by the Adviser at any time provided that no such revocation or termination shall be effective until FASC has received actual notice of such revocation or termination in writing from the Adviser.

This Limited Power of Attorney constitutes the entire agreement between the Adviser and FASC and may be changed only by a writing signed by both of them, except that the Adviser may at any time change the list of Funds to which this Limited Power of Attorney relates by executing and delivering to FASC a later dated version of Schedule 1. This Limited Power of Attorney shall bind and benefit the respective successors and assigns of the Adviser and FASC; provided, however, that FASC shall have no power or authority hereunder to appoint a successor or substitute attorney in fact for the Adviser or any Fund.

This Limited Power of Attorney shall be governed and construed in accordance with the laws of the Commonwealth of Pennsylvania without reference to principles of conflicts of laws. If any provision hereof, or any power or authority conferred upon FASC herein, would be invalid or unexercisable under applicable law, then such provision, power or authority shall be deemed modified to the extent necessary to render it valid or exercisable while most nearly preserving its original intent, and no provision hereof, or power or authority conferred upon FASC herein, shall be affected by the invalidity or the non-exercisability of another provision hereof, or of another power or authority conferred herein.

This Limited Power of Attorney may be executed in as many identical counterparts as may be convenient and by the different parties hereto on separate counterparts. This Limited Power of Attorney shall become binding on the Adviser when the Adviser shall have executed at least one counterpart and FASC shall have accepted its appointment by executing this Limited Power of Attorney. Immediately after the execution of a counterpart original of this Limited Power of Attorney and solely for the convenience of the parties hereto, the Adviser and FASC will execute sufficient counterparts so that FASC shall have a counterpart executed by it and the Adviser, and the Adviser shall have a counterpart executed by the Adviser and FASC. Each counterpart shall be deemed an original and all such taken together shall constitute but one and the same instrument, and it shall not be necessary in making proof of this Limited Power of Attorney to produce or account for more than one such counterpart.

 
 

IN WITNESS WHEREOF, the Adviser has caused this Limited Power of Attorney to be executed by its duly authorized officer as of the date first written above.

 

FEDERATED INVESTMENT MANAGEMENT COMPANY

By: /s/ Keith M. Schappert

Name Keith M. Schappert

Title: President

Accepted and agreed to this

January 1, 2004

 

FEDERATED ADVISORY SERVICES COMPANY

By: /s/ G. Andrew Bonnewell

Name: G. Andrew Bonnewell

Title: Vice President

 

 
 

Schedule 1

to Limited Power of Attorney

dated as of October 1, 2016

revised March 1, 2020

by FEDERATED INVESTMENT MANAGEMENT COMPANY (the Adviser "),

acting on behalf of each of the funds and accounts listed below, and appointing

FEDERATED ADVISORY SERVICES COMPANY

the attorney-in-fact of the Adviser

 

List of Funds and Accounts

 

Emerging Markets Core Fund

Federated Adjustable Rate Securities Fund

Federated Bank Loan Core Fund

Federated Bond Fund

Federated California Municipal Cash Trust

Federated Capital Reserves Fund

Federated Corporate Bond Strategy Portfolio

Federated Emerging Market Debt Fund

Federated Equity Advantage Fund

Federated Fixed Income Opportunity Fund

Federated Floating Rate Strategic Income Fund

Federated Fund for U.S. Government Securities

Federated Hermes Fund for U.S. Government Securities II

Federated Georgia Municipal Cash Trust

Federated Government Income Securities, Inc.

Federated Government Income Trust

Federated Government Obligations Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Government Ultrashort Duration Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes SDG Engagement High Yield Credit Fund

Federated Hermes Unconstrained Credit Fund

Federated Hermes High Income Bond Fund II

Federated High Income Bond Fund, Inc.

Federated High Yield Strategy Portfolio

Federated High Yield Trust

Federated Institutional High Yield Bond Fund

Federated Intermediate Corporate Bond Fund

Federated Intermediate Municipal Trust

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated Liberty U.S. Government Money Market Trust

Federated Managed Risk Fund

Federated Hermes Managed Volatility Fund II

Federated Massachusetts Municipal Cash Trust

Federated Michigan Intermediate Municipal Trust

Federated Institutional Money Market Management

Federated Mortgage Core Portfolio

Federated Select Total Return Bond Fund (formerly Federated Mortgage Fund)

Federated Mortgage Strategy Portfolio

Federated Municipal Cash Series

Federated Municipal High Yield Advantage Fund

Federated Municipal Obligations Fund

Federated Municipal Securities Fund, Inc.

Federated Municipal Ultrashort Fund

Federated New York Municipal Cash Trust

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Cash Trust

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prime Cash Obligations Fund

Federated Prime Cash Series

Federated Hermes Prime Money Fund II

Federated Institutional Prime Obligations Fund

Federated Institutional Prime Value Obligations Fund

Federated Project and Trade Finance Core Fund

Federated Hermes Quality Bond Fund II

Federated Real Return Bond Fund

Federated Short-Intermediate Duration Municipal Trust

Federated Short-Intermediate Total Return Bond Fund

Federated Short-Term Income Fund

Federated Strategic Income Fund

Federated Tax-Free Obligations Fund

Federated Institutional Tax-Free Cash Trust

Federated Total Return Bond Fund

Federated Total Return Government Bond Fund

Federated Trade Finance Income Fund

Federated Treasury Cash Series

Federated Treasury Obligations Fund

Federated Trust for U.S. Treasury Obligations

Federated U.S. Government Securities Fund: 1-3 Years

Federated U.S. Government Securities Fund: 2-5 Years

Federated U.S. Treasury Cash Reserves

Federated Ultrashort Bond Fund

Federated Unconstrained Bond Fund

Federated Virginia Municipal Cash Trust

High Yield Bond Portfolio

Short Fixed Income Fund

AS - Federated High Yield Bond Fund

AS - Federated High Yield Portfolio

BB&T Funds Prime Money Market

Chesapeake Investors

Gartmore- Federated GVIT High Income

Great West- Maxim Federated Bond Fund

IDEX Federated Tax Exempt

ONatl - High Income Bond Portfolio

SA - Corporate Bond Portfolio

Trav - High Yield Portfolio

 EX-99.SERV AGR2 14 ex28h1bshsvce.htm SECOND AMENDED AND RESTATED SERVICES AGREEMENT

Exhibit 28 (h) (1) (b) under Form N-1A
Exhibit 99 under item 601/REG. S-K

 

SECOND AMENDED AND RESTATED SERVICES AGREEMENT

THIS AGREEMENT, amended and restated as of December 1, 2001, is entered into between each Fund listed on Schedule 1, as may be amended from time to time, severally and not jointly, and Federated Shareholder Services Company, ("FSSC"). Unless otherwise defined herein, Section 10 sets forth the definition of capitalized terms used in this Agreement.

WHEREAS, Schedule 1 to this Agreement sets forth the classes of Shares for which the Funds will compensate persons who agree to provide services to Shareholders and assist in the maintenance of Shareholder accounts (“Services”);

WHEREAS, FSSC and certain of the Funds entered into a Shareholder Services Agreement dated March 1, 1994 and amended September 1, 1995, (the “Prior Agreement”) which provided for FSSC to enter into agreements for Services with third parties (“Third-Party Agreements”) and to utilize fees received under the Prior Agreement to compensate third parties pursuant to such Third-Party Agreements;

WHEREAS, it is contemplated that hereafter, the Funds will compensate third-parties for Services directly, and that FSSC will no longer enter into Third-Party Agreements;

WHEREAS, FSSC will continue to compensate third parties pursuant to any Third-Party Agreements and the Funds will continue to make payments to FSSC to fund those obligations; and

WHEREAS, FSSC will also receive fees for Services it provides to Shareholders under this Agreement.

NOW THEREFORE, the parties agree to amend and restate the Agreement as follows:

SECTION1.                       Agreement to Provide Services

(a)             Services. FSSC agrees to provide Services for Shareholders of the Funds that have fully-disclosed accounts in the Funds for which either (i) Federated Securities Corp. or any other affiliate of FSSC is the dealer of record; or (ii) for which the dealer of record does not provide Services (collectively, the “FSSC Accounts”). FSSC shall also provide Services or cause Services to be provided to Shareholders whose accounts are subject to Third-Party Agreements. Services shall include, but are not limited to, telephone, mail or electronic communications with Shareholders.

(b)            Delivery of Disclosure Documents. Upon request by a customer that is a Shareholder of the Funds, FSSC will send a copy of the current Prospectus (and, if expressly requested, Statement of Additional Information), annual report or semi-annual report for any Fund (“Disclosure Documents”) to the customer within three (3) business days of such request.

(i)The Funds will furnish to FSSC at the Funds’ own expense such number of copies of the then-current Disclosure Documents as FSSC requests to satisfy its obligations under this paragraph.
(ii)FSSC covenants to the Funds that it will not make any representations concerning any Shares other than those contained in the Disclosure Documents of the applicable Fund.
(iii)The parties may agree from time to time to set appropriate security procedures and to perform electronically certain of their obligations under this Agreement, including without limitation the delivery of requested Disclosure Documents.

(c)             FSSC shall not have any obligation to pay the cost of producing or delivering Disclosure Documents or any other costs incurred by the Funds in connection with the Services provided hereunder.

SECTION2.                       Service Fees Payable to FSSC

(a)             During the term of this Agreement, FSSC will be entitled to receive from each Fund as full compensation for Services rendered hereunder a fee calculated daily at an annual rate, as set forth Schedule 1 to this Agreement, of up to 0.25% of average net assets held in FSSC Accounts of each Fund. Service fees paid by the Funds are in addition to other fees paid by the Funds such as those paid pursuant to an Agreement for Fund Accounting Services, Administrative Services, Transfer Agency Services and Custody Services Procurement and fees paid pursuant to each Fund’s Distributor’s Contract.

(b)            For so long as any Third-Party Agreement remains in effect, FSSC shall be entitled to receive fees from the Funds calculated daily at an annual rate, as set forth in Schedule 1 to this Agreement, of up to 0.25% on the average net assets held in accounts of each Fund for which Services are provided by such third-parties which amount shall be paid by FSSC in accordance with such Third-Party Agreements.

 

(c)             The Funds shall pay service fees to FSSC in accordance with their regular payment schedules. For the payment period in which this Agreement becomes effective or terminates with respect to any Fund, there shall be an appropriate proration of the fee on the basis of the number of days that this Agreement is in effect with respect to such Fund during the period.

SECTION3.                       Agreements with Other Service Providers

Each Fund hereby appoints FSSC as the Fund’s agent to enter into agreements with financial intermediaries that are not registered as broker/dealers under the 1934 Act (each an “Unregistered Intermediary”) to provide Services to their customers that are Shareholders of the Fund. Each Fund agrees to pay Service Fees at an annual rate as set forth in Schedule 1 to this Agreement of up to 0.25% of the average net assets held in Fund accounts for which an Unregistered Intermediary has agreed to provide Services. Any such accounts shall not be treated as FSSC Accounts for purposes of this Agreement.

SECTION4.                       Representations

(a)             Each party represents and warrants to the other party that:

(i)Status. It is duly organized and validly existing under the laws of the jurisdiction of its organization or incorporation and, if relevant under such laws, in good standing.
(ii)Powers. It has the power to execute this Agreement and any other documentation relating to this Agreement to which it is a party, to deliver this Agreement and any other documentation relating to this Agreement that it is required by this Agreement to deliver and to perform its obligations under this Agreement and has taken all necessary action to authorize such execution, delivery and performance.
(iii)No Violation or Conflict. Such execution, delivery and performance do not violate or conflict with any law applicable to it, any provision of its constitutional documents, any order or judgment of any court or other agency of government applicable to it or any contractual restriction binding on or affecting it.
(iv)Obligations Binding. Its obligations under this Agreement constitute its legal, valid and binding obligations, enforceable in accordance with their respective terms (subject to applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditors’ rights generally and subject, as to enforceability, to equitable principles of general application regardless of whether enforcement is sought in a proceeding in equity or law).
(v)Compliance with Laws. It will comply in all material respects with all applicable laws and orders to which it may be subject if failure to so comply would materially impair its ability to perform its obligations under this Agreement.
SECTION5.                       Indemnification and Limitation of Liability

(a)             In the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of obligations or duties hereunder on the part of FSSC and its trustees, officers, employees, agents and representatives, the Funds agree to indemnify FSSC and its trustees, officers, employees, agents and representatives against any and all claims, demands, liabilities and reasonable expenses (including attorneys’ fees), related to or otherwise connected with (i) any breach by the Funds of any provision of this Agreement; or (ii) any action by a Fund’s Shareholder against FSSC.

(b)            FSSC 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. In no event shall FSSC be liable for indirect or consequential damages.

(c)             Any person, even though also an officer, trustee, partner, employee or agent of FSSC, who may be or become an officer, employee or agent of any Fund or a member of a Fund's Board, 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 FSSC 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 FSSC even though paid by FSSC.

(d)            FSSC 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 FSSC 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.

(e)             The provisions of this Section shall survive the termination of this Agreement.

 
 
SECTION6.                       Privacy Policy

(a)             The parties acknowledge that:

(i)The Securities and Exchange Commission has adopted Regulation S-P at 17 CFR Part 248 to protect the privacy of individuals who obtain a financial product or service for personal, family or household use;
(ii)Regulation S-P permits financial institutions, such as the Funds, to disclose “nonpublic personal information” (“NPI”) of its “customers” and “consumers” (as those terms are therein defined in Regulation S-P) to affiliated and nonaffiliated third parties of the Funds, without giving such customers and consumers the ability to opt out of such disclosure, for the limited purposes of processing and servicing transactions (17 CFR § 248.14); for specified law enforcement and miscellaneous purposes (17 CFR § 248.15); and to service providers or in connection with joint marketing arrangements (17 CFR § 248.13); and
(iii)Regulation S-P provides that the right of a customer and consumer to opt out of having his or her NPI disclosed pursuant to 17 CFR § 248.7 and 17 CFR § 248.10 does not apply when the NPI is disclosed to service providers or in connection with joint marketing arrangements, provided the Fund and third party enter into a contractual agreement that prohibits the third party from disclosing or using the information other than to carry out the purposes for which the Fund disclosed the information (17 CFR § 248.13).

(b)            The parties agree that the Funds may disclose Shareholder NPI to FSSC as agent of the Funds and solely in furtherance of fulfilling FSSC’s contractual obligations under the Agreement in the ordinary course of business to support the Funds and their Shareholders.

(c)             FSSC hereby agrees to be bound to use and redisclose such NPI only for the limited purpose of fulfilling its duties and obligations under the Agreement, for law enforcement and miscellaneous purposes as permitted in 17 CFR §248.15, or in connection with joint marketing arrangements that the Funds may establish with FSSC in accordance with the limited exception set forth in 17 CFR 248.13.

(d)            FSSC represents and warrants that, in accordance with 17 CFR § 248.30, it has implemented, and will continue to carry out for the term of the Agreement, policies and procedures reasonably designed to:

(i)Insure the security and confidentiality of records and NPI of Fund customers;
(ii)Protect against any anticipated threats or hazards to the security or integrity of Fund customer records and NPI; and
(iii)Protect against unauthorized access or use of such Fund customer records or NPI that could result in substantial harm or inconvenience to any Fund customer.

(e)             FSSC may redisclose Section 248.13 NPI only to: (a) the Funds and affiliated persons of the Funds (“Fund Affiliates”); (b) affiliated persons of FSSC (“Service Provider Affiliates”) (which in turn may disclose or use the information only to the extent permitted under the original receipt); (c) a third party not affiliated with FSSC or the Funds (“Nonaffiliated Third Party”) under the service and processing (§248.14) or miscellaneous (§248.15) exceptions, but only in the ordinary course of business to carry out the activity covered by the exception under which FSSC received the information in the first instance; and (d) a Nonaffiliated Third Party under the service provider and joint marketing exception (§248.13), provided FSSC enters into a written contract with the Nonaffiliated Third Party that prohibits the Nonaffiliated Third Party from disclosing or using the information other than to carry out the purposes for which the Funds disclosed the information in the first instance.

(f)             FSSC may redisclose Section 248.14 NPI and Section 248.15 NPI to: (a) the Funds and Fund Affiliates; (b) Service Provider Affiliates (which in turn may disclose the information to the same extent permitted under the original receipt); and (c) a Nonaffiliated Third Party to whom the Funds might lawfully have disclosed NPI directly.

(g)            The provisions of this Section shall survive the termination of the Agreement.

SECTION7.                       Notices

(a)             All notices of any kind to be given hereunder shall be given in writing and delivered by personal delivery or by postage prepaid, registered or certified United States first class mail, return receipt requested, overnight courier services, or by fax or e-mail (with confirming copy by mail).

(b)            Unless otherwise notified in writing, all notices to any Fund shall be given or sent to such Fund at:

5800 Corporate Drive

Pittsburgh, Pennsylvania 15237-7000

Attention: President

(c)             Unless otherwise notified in writing, all notices to FSSC shall be given or sent to:

Federated Investors Tower

1001 Liberty Avenue

Pittsburgh, Pennsylvania 15222-3779

Attention: President

SECTION8.                       Assignments and No Third-Party Rights

(a)             Except for any Third-Party Agreements entered into prior to the date of this Agreement, this Agreement will not be assigned or subcontracted by either party, without prior written consent of the other party, except that either party may assign or subcontract this Agreement to an affiliate controlled, controlled by, or under common control with the assigning or subcontracting party without such consent. Subject to the preceding, this Agreement will apply to, be binding in all respects upon, and inure to the benefit of permitted assigns and subcontractors of the parties. In no event shall the Funds be obligated to make any payment under this Agreement to any person other than FSSC.

(b)            Nothing expressed or referred to in this Agreement will be construed to give anyone other than the parties to this Agreement any legal or equitable right, remedy or claim under or with respect to this Agreement or any provision of this Agreement. This Agreement and all of its provisions and conditions are for the sole and exclusive benefit of the parties to this Agreement and their permitted assigns and subcontractors.

SECTION9.                       Force Majeure

If either party is unable to carry out any of its obligations under this Agreement because of conditions beyond its reasonable control, including, but not limited to, acts of war or terrorism, work stoppages, fire, civil disobedience, delays associated with hardware malfunction or availability, riots, rebellions, storms, electrical failures, acts of God, and similar occurrences (“Force Majeure”), this Agreement will remain in effect and the non-performing party’s obligations shall be suspended without liability for a period equal to the period of the continuing Force Majeure (which period shall not exceed fifteen (15) business days), provided that:

(i)the non-performing party gives the other party prompt notice describing the Force Majeure, including the nature of the occurrence and its expected duration and, where reasonably practicable, continues to furnish regular reports with respect thereto during the period of Force Majeure;
(ii)the suspension of obligations is of no greater scope and of no longer duration than is required by the Force Majeure;
(iii)no obligations of either party that accrued before the Force Majeure are excused as a result of the Force Majeure;
(iv)the non-performing party uses all reasonable efforts to remedy its inability to perform as quickly as possible.
SECTION10.                    Definition of Terms

(a)             “1934 Act” means the Securities Exchange Act of 1934, and “1940 Act” means the Investment Company Act of 1940, in each case as amended and in effect at the relevant time.

(b)            “Fund” means an investment company registered under the 1940 Act and, in the case of a “series company” as defined in Rule 18f-2(a) under the 1940 Act, each individual portfolio of the series company, set forth on Schedule 1 to this Agreement from time to time. “Funds” means the Funds listed on Schedule 1 collectively.

(c)             “Prospectus” means, with respect to any Shares the most recent Prospectus and Statement of Additional Information (“SAI”) and any supplement thereto, pursuant to which a Fund publicly offers the Shares; provided, however, that this definition shall not be construed to require FSC, Dealer or any Fund to deliver any SAI other than at the express request of Dealer’s customer.

(d)            “Shares” means (1) shares of beneficial interest in a Fund organized as a business trust; and (2) shares of capital stock in a Fund organized as a corporation. With respect to a Fund that has established separate classes of Shares in accordance with Rule 18f-3 under the 1940 Act, Shares refers to the relevant class. “Shareholder” means the beneficial owner of any Share.

SECTION11.                    Miscellaneous

(a)             This Agreement may be terminated by either party by giving the other party at least sixty (60) days' written notice thereof.

(b)            This Agreement may be amended only by a writing signed by both parties, provided that, any Fund may amend Schedule 1 from time to time by sending a copy of the amended Schedule to FSSC. Any such amendment shall be effective ten (10) days after notice thereof.

(c)             This Agreement constitutes (along with its Schedules) a complete and exclusive statement of the terms of the agreement between the parties and supersedes any prior agreement with respect to its subject matter.

(d)            This Agreement has been entered into between FSSC and each Fund severally and not jointly, and the provisions this Agreement shall apply separately to each Fund. No Fund shall be obligated to make any payments to FSSC under this Agreement other than with respect to its Shares. No breach of this Agreement by a Fund, or by FSSC against a Fund, shall constitute a breach of this Agreement with respect to any other Fund.

(e)             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.

(f)             If any provision of this Agreement is held invalid or unenforceable, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid and unenforceable.

(g)            This Agreement will be governed by the laws of the Commonwealth of Pennsylvania, without regard to conflicts of laws principles thereof. Any action or proceeding seeking to enforce any provision of, or based on any right arising out of, this Agreement may be brought against the parties in the courts of the Commonwealth of Pennsylvania, County of Allegheny, or, if it has or can acquire jurisdiction, in the United States District Court for the Western District of Pennsylvania, and each of the parties consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein. Each party waives its right to a jury trial.

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.

Attest: Funds (listed on Schedule 1)
   
   
/s/ John W. McGonigle By:/s/ John F. Donahue
John W. McGonigle John F. Donahue
Secretary Chairman
   
Attest: Federated Shareholder Services Company
   
   
/s/ Timothy S. Johnson By:  /s/ Arthur L. Cherry, Jr.
Timothy S. Johnson Arthur L. Cherry, Jr.
Secretary  

 

 

 

 
 

 

SCHEDULE 1

TO SECOND AMENDED AND RESTATED SERVICES AGREEMENT

(revised 3/1/2020)

 

The following lists the Funds and Shares subject to the Second Amended and Restated Services Agreement (“Agreement”) which have the ability to charge the maximum 0.25% Service Fee payable by the Funds pursuant to the Agreement.

 

FEDERATED ADJUSTABLE RATE SECURITIES FUND Institutional Shares
    Service Shares
 
FEDERATED ADVISER SERIES
  Federated Emerging Markets Equity Fund Class A Shares
    Class C Shares
    Institutional Shares
  Federated Hermes Absolute Credit Fund Class A Shares
    Class C Shares
    Institutional Shares
  Federated Hermes Global Equity Fund Class A Shares
    Class C Shares
    Institutional Shares
  Federated Hermes Global Small Cap Fund Class A Shares
    Class C Shares
    Institutional Shares
  Federated Hermes International Equity Fund Class A Shares
    Class C Shares
    Institutional Shares
  Federated Hermes SDG Engagement Equity Fund Class A Shares
    Class C Shares
    Institutional Shares
  Federated Hermes SDG Engagement High Yield Credit Fund Class A Shares
    Class C Shares
    Institutional Shares
  Federated Hermes Unconstrained Credit Fund Class A Shares
    Class C Shares
    Institutional Shares
  Federated Hermes US SMID Fund Class A Shares
    Class C Shares
    Institutional Shares
  Federated International Equity Fund Class A Shares
    Class C Shares
    Institutional Shares
  Federated International Growth Fund Class A Shares
    Class C Shares
    Institutional Shares
     
     
  Federated MDT Large Cap Value Fund Service Shares
    Class A Shares
    Class C Shares
    Class T Shares
     
FEDERATED EQUITY FUNDS
  Federated Clover Small Value Fund Class A Shares
    Class C Shares
    Class T Shares
  Federated Global Strategic Value Dividend Fund Class A Shares
    Class C Shares
  Federated International Strategic Value Dividend Fund Class A Shares
    Class C Shares
    Class T Shares
  Federated Kaufmann Fund Class A Shares
    Class C Shares
    Class R Shares
    Class T Shares
  Federated Kaufmann Large Cap Fund Class A Shares
    Class C Shares
    Class T Shares
  Federated Kaufmann Small Cap Fund Class A Shares
    Class C Shares
    Class T Shares
  Federated MDT Mid Cap Growth Fund Class A Shares
    Class C Shares
    Class T Shares
  Federated Prudent Bear Fund Class A Shares
    Class C Shares
    Class T Shares
  Federated Strategic Value Dividend Fund Class A Shares
    Class C Shares
    Class T Shares
 
FEDERATED EQUITY INCOME FUND, INC. Class A Shares
    Class C Shares
    Class F Shares
    Class T Shares
FEDERATED FIXED INCOME SECURITIES, INC.
  Federated Municipal Ultrashort Fund Class A Shares
     
  Federated Strategic Income Fund Class A Shares
    Class C Shares
    Class F Shares
    Class T Shares
     
FEDERATED GLOBAL ALLOCATION FUND Class A Shares
    Class C Shares
  Class T Shares
   
FEDERATED GOVERNMENT INCOME SECURITIES, INC. Class A Shares
    Class C Shares
    Class F Shares
    Institutional Shares
    Class T Shares
     
FEDERATED GOVERNMENT INCOME TRUST
  Federated Government Income Trust Institutional Shares
    Service Shares
     
FEDERATED HIGH INCOME BOND FUND, INC. Class A Shares
    Class C Shares
    Class T Shares
FEDERATED HIGH YIELD TRUST  
  Federated High Yield Trust Service Shares
    Class A Shares
    Class C Shares
    Class T Shares
  Federated Equity Advantage Fund

Class A Shares

 

FEDERATED INCOME SECURITIES TRUST
  Federated Capital Income Fund Class A Shares
    Class C Shares
    Class F Shares
    Class T Shares
  Federated Floating Rate Strategic Income Fund Class A Shares
    Class C Shares
  Federated Fund for U.S. Government Securities Class A Shares
    Class C Shares
    Class T Shares
    Institutional Shares
  Federated Intermediate Corporate Bond Fund Institutional Shares
    Service Shares
  Federated Muni and Stock Advantage Fund Class A Shares
    Class C Shares
    Class F Shares
    Class T Shares
  Federated Real Return Bond Fund Class A Shares
    Class C Shares
    Institutional Shares
  Federated Short-Term Income Fund Class A Shares
    Service Shares
     
FEDERATED INDEX TRUST
  Federated Max-Cap Index Fund Class C Shares
    Institutional Shares
    Service Shares
  Federated Mid-Cap Index Fund Service Shares
     
FEDERATED INSTITUTIONAL TRUST
  Federated Government Ultrashort Duration Fund Class A Shares
    Service Shares
  Federated Institutional High Yield Bond Fund  
     
  Federated Short-Intermediate Total Return Bond Fund Class A Shares
    Service Shares
 
FEDERATED HERMES INSURANCE SERIES
  Federated Hermes Fund for US Government Securities II  
  Federated Hermes High Income Bond Fund II Primary Shares
    Service Shares
  Federated Hermes Kaufmann Fund II Primary Shares
    Service Shares
  Federated Hermes Managed Volatility Fund II  
  Federated Hermes Government Money Fund II Primary Shares
  Service Shares
   
FEDERATED INTERNATIONAL SERIES, INC.
  Federated Global Total Return Bond Fund Class A Shares
    Class C Shares
     
FEDERATED INVESTMENT SERIES FUNDS, INC.
  Federated Bond Fund Class A Shares
    Class C Shares
    Class F Shares
    Class T Shares
FEDERATED MDT SERIES
  Federated MDT All Cap Core Fund Class A Shares
    Class C Shares
    Class T Shares
  Federated MDT Large Cap Growth Fund Class A Shares
    Class C Shares
    Class T Shares
  Federated MDT Small Cap Core Fund Class A Shares
    Class C Shares
    Class T Shares
  Federated MDT Small Cap Growth Fund Class A Shares
    Class C Shares
    Class T Shares
  Federated MDT Balanced Fund Class A Shares
    Class C Shares
    Class T Shares
   
     
     
FEDERATED MUNICIPAL BOND FUND, INC. Class A Shares
    Class C Shares
    Class F Shares
    Class T Shares
    Institutional Shares
FEDERATED MUNICIPAL SECURITIES INCOME TRUST
  Federated Michigan Intermediate Municipal Trust Class A Shares
    Institutional Shares
  Federated Municipal High Yield Advantage Fund Class A Shares
    Class C Shares
    Class F Shares
    Class T Shares
  Federated Ohio Municipal Income Fund Class A Shares
    Class F Shares
    Institutional Shares
  Federated Pennsylvania Municipal Income Fund Class A Shares
    Class A Shares
    Institutional Shares
    Class T Shares

 

FEDERATED SHORT-INTERMEDIATE DURATION MUNICIPAL TRUST Class A Shares
    Institutional Shares
    Service Shares
     
FEDERATED TOTAL RETURN GOVERNMENT BOND FUND Service Shares
     

FEDERATED TOTAL RETURN SERIES, INC.
  Federated Select Total Return Bond Fund (formerly Federated Mortgage Fund) Institutional Shares
    Service Shares
     
  Federated Total Return Bond Fund Class A Shares
    Class C Shares
    Service Shares
    Class T Shares
  Federated Ultrashort Bond Fund Class A Shares
    Institutional Shares
    Service Shares
 
FEDERATED U.S. GOVERNMENT SECURITIES FUND:  1-3 YEARS Institutional Shares
    Service Shares
     
FEDERATED U.S. GOVERNMENT SECURITIES FUND:  2-5 YEARS Institutional Shares
    Service Shares
     
FEDERATED WORLD INVESTMENT SERIES, INC.
  Federated Emerging Market Debt Fund Class A Shares
    Class C Shares
     
  Federated International Leaders Fund Class A Shares
    Class C Shares
    Class T Shares
  Federated International Small-Mid Company Fund Class A Shares
    Class C Shares
    Class T Shares
INTERMEDIATE MUNICIPAL TRUST
  Federated Intermediate Municipal Trust Institutional Shares
     
MONEY MARKET OBLIGATIONS TRUST
  Federated California Municipal Cash Trust Capital Shares
    Cash II Shares
    Cash Series Shares
    Wealth Shares
    Service Shares
  Federated Capital Reserves Fund  
  Federated Georgia Municipal Cash Trust  
  Federated Government Obligations Fund Advisor Shares
    Capital Shares
    Cash II Shares
    Cash Series Shares
    Institutional Shares
    Select Shares
    Service Shares
    Trust Shares
  Federated Government Obligations Tax-Managed Fund Automated Shares
    Institutional Shares
    Service Shares
  Federated Government Reserves Fund Class A Shares
    Class C Shares
    Class F Shares
    Class P Shares
  Federated Massachusetts Municipal Cash Trust Cash Series Shares
    Service Shares
     
  Federated Institutional Money Market Management Capital Shares
    Eagle Shares
    Institutional Shares
    Service Shares
  Federated Municipal Obligations Fund Automated Shares
    Capital Shares
    Cash II Shares
    Cash Series Shares
    Wealth Shares
    Investment Shares
    Service Shares
  Federated New York Municipal Cash Trust Cash II Shares
    Cash Series Shares
    Service Shares
    Wealth Shares
  Federated Pennsylvania Municipal Cash Trust Cash Series Shares
    Wealth Shares
    Service Shares
  Federated Prime Cash Obligations Fund Advisor Shares
    Automated Shares
    Capital Shares
    Cash II Shares
    Cash Series Shares
    Class R Shares
    Wealth Shares
    Service Shares
    Trust Shares
  Federated Institutional Prime Obligations Fund Capital Shares
    Institutional Shares
    Service Shares
  Federated Institutional Prime Value Obligations Fund Capital Shares
    Institutional Shares
    Service Shares
  Federated Tax-Free Obligations Fund Advisor Shares
    Service Shares
    Wealth Shares
  Federated Institutional Tax-Free Cash Trust Institutional Shares
    Premier Shares
  Federated Treasury Obligations Fund Automated Shares
    Capital Shares
    Institutional Shares
    Service Shares
    Trust Shares
  Federated Trust for U.S. Treasury Obligations Cash II Shares
    Cash Series Shares
    Institutional Shares
  Federated U.S. Treasury Cash Reserves Institutional Shares
    Service Shares
  Federated Virginia Municipal Cash Trust Cash Series Shares
    Service Shares  

 

 

 

 EX-99.SERV AGR3 15 ex28h1cprincipshare.htm PRINCIPAL SHAREHOLDER SERVICER S AGREEMENT

Exhibit 28 (h) (1) (c) under Form N-1A
Exhibit 99 under item 601/REG. S-K

 

PRINCIPAL SHAREHOLDER SERVICER’S AGREEMENT

 

THIS AGREEMENT, is made as of the 24th day of October, 1997, by and between those Investment Companies on behalf of the Portfolios (individually referred to herein as a “Fund” and collectively as “Funds”) and Classes of Shares (“Classes”) listed on Schedule A to Exhibit 1, as may be amended from time to time, having their principal office and place of business at Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779, and who have approved this form of Agreement and Federated Securities Corp. as the principal shareholder servicer (the “Principal Servicer”). Each of the Exhibits hereto is incorporated herein in its entirety and made a part hereof. In the event of any inconsistency between the terms of this Agreement and the terms of any applicable Exhibit, the terms of the applicable Exhibit shall govern.

In consideration of the mutual covenants hereinafter contained it is hereby agreed by and between the parties hereto as follows.

1.The Investment Companies hereby appoint the Principal Servicer as their agent to select, negotiate and contract for the performance of and arrange for the rendition of personal services to shareholders and/or the maintenance of accounts of shareholders of each Class of the Funds as to which this Agreement is made applicable (The Principal Servicer’s duties hereunder are referred to as "Services"). The Principal Servicer hereby accepts such appointment and agrees to perform or cause to be performed the Services in respect of the Classes of the Funds to which this Agreement has been made applicable by an Exhibit. The Principal Servicer agrees to cause to be provided shareholder services which, in its best judgment (subject to supervision and control of the Investment Companies' Boards of Trustees or Directors, as applicable), are necessary or desirable for shareholders of the Funds. The Principal Servicer further agrees to provide the Investment Companies, upon request, a written description of the shareholder services for which the Principal Servicer is arranging hereunder.
2.During the term of this Agreement, each Investment Company will pay the Principal Servicer and the Principal Servicer agrees to accept as full compensation for its services rendered hereunder a fee as set forth on the Exhibit applicable to the Class of each Fund subject to this Agreement.

For the payment period in which this Agreement becomes effective or terminates with respect to any Class of a Fund, there shall be an appropriate proration of the monthly fee on the basis of the number of days that this Agreement is in effect with respect to such Class of the Fund during the month.

3.This Agreement is effective with respect to each Class of a Fund as of the date of execution of the applicable Exhibit and shall continue in effect for one year from the date of its execution, and thereafter for successive periods of one year only if the form of this Agreement is approved at least annually by the Board of each Investment Company, including a majority of the members of the Board of the Investment Company who are not interested persons of the Investment Company ("Independent Board Members") cast in person at a meeting called for that purpose.
4.Notwithstanding paragraph 3, this Agreement may be terminated with regard to a particular Class of a Fund as follows:
(a)at any time, without the payment of any penalty, by the vote of a majority of the Independent Board Members of any Investment Company or by a vote of a majority of the outstanding voting securities of any Fund as defined in the Investment Company Act of 1940 on sixty (60) days' written notice to the parties to this Agreement;
(b)automatically in the event of the Agreement's assignment as defined in the Investment Company Act of 1940; and
5.The Principal Servicer agrees to arrange to obtain any taxpayer identification number certification from each shareholder of the Funds to which it provides Services that is required under Section 3406 of the Internal Revenue Code, and any applicable Treasury regulations, and to provide each Fund or its designee with timely written notice of any failure to obtain such taxpayer identification number certification in order to enable the implementation of any required backup withholding.
6.The Principal Servicer shall not be liable for any error of judgment or mistake of law or for any loss suffered by any Investment Company 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. the Principal Servicer shall be entitled to rely on and may act upon advice of counsel (who may be counsel for such Investment Company) 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 the Principal Servicer, who may be or become a member of such Investment Company'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 the Principal Servicer 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 the Principal Servicer even though paid by the Principal Servicer.

This Section 6 shall survive termination of this Agreement.

7.No provision of this Agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which an enforcement of the change, waiver, discharge or termination is sought.
8.The Principal Servicer is expressly put on notice of the limitation of liability as set forth in the Declaration of Trust of each Investment Company that is a Massachusetts business trust and agrees that the obligations assumed by each such Investment Company pursuant to this Agreement shall be limited in any case to such Investment Company and its assets and that the Principal Servicer shall not seek satisfaction of any such obligations from the shareholders of such Investment Company, the Trustees, Officers, Employees or Agents of such Investment Company, or any of them.
9.The execution and delivery of this Agreement have been authorized by the Directors of the Principal Servicer and signed by an authorized officer of the Principal Servicer, acting as such, and neither such authorization by such Directors 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 Directors or shareholders of the Principal Servicer, but bind only the property of the Principal Servicer as provided in the Articles of Incorporation of the Principal Servicer.
10.Notices of any kind to be given hereunder shall be in writing (including facsimile communication) and shall be duly given if delivered to any Investment Company at the following address: Federated Investors Tower, Pittsburgh, PA 15222-3779, Attention: President and if delivered to the Principal Servicer at Federated Investors Tower, Pittsburgh, PA 15222-3779, Attention: President.
11.This Agreement constitutes the entire agreement between the parties hereto and supersedes any prior agreement with respect to the subject hereof whether oral or written. If any provision of this Agreement shall be held or made invalid by a court or regulatory agency decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. Subject to the provisions of Sections 3 and 4, hereof, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and shall be governed by Pennsylvania law; provided, however, that nothing herein shall be construed in a manner inconsistent with the Investment Company Act of 1940 or any rule or regulation promulgated by the Securities and Exchange Commission thereunder.
12.This Agreement may be executed by different parties on separate counterparts, each of which, when so executed and delivered, shall be an original, and all such counterparts shall together constitute one and the same instrument.
13.This Agreement shall not be assigned by any party without the prior written consent of the Principal Servicer in the case of assignment by any Investment Company, or of the Investment Companies in the case of assignment by the Principal Servicer, 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 13 shall prevent the Principal Servicer 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 Schedule A)
   
   
Attest: /s/ S. Elliott Cohan By:/s/ John W. McGonigle
Title: Assistant Secretary Title: Executive Vice President
   
   
  Federated Securities Corp.
   
   
Attest:/s/ Leslie K. Platt By: /s/ Byron F. Bowman
Title: Assistant Secretary Title: Vice President
   
 
 

Exhibit 1

to the

Principal Shareholder Servicer’s Agreement

Related to Class B Shares of

the Funds

 

The following provisions are hereby incorporated and made part of the Principal Shareholder Servicer’s Agreement (the “Principal Shareholder Servicer’s Agreement”) as of the 24th day of October, 1997, by and between those Investment Companies on behalf of the Portfolios (individually referred to herein as a “Fund” and collectively as “Funds”) and Classes of Shares (“Classes”) listed on Schedule A to Exhibit 1, as may be amended from time to time, having their principal office and place of business at Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779, and who have approved this form of Agreement and Federated Securities Corp. as the principal shareholder servicer (the “Principal Servicer”). Each of the Exhibits hereto is incorporated herein in its entirety and made a part hereof. In the event of any inconsistency between the terms of this Exhibit and the terms of the Principal Shareholder Servicer’s Agreement, the terms of this Exhibit shall govern.

 

1.Each Investment Company hereby appoints the Principal Servicer to arrange for the rendition of the shareholder services in respect of Class B Shares (“Class B Shares”) of each Fund. Pursuant to this appointment, the Principal Servicer is authorized to select various companies including but not limited to Federated Shareholder Services (“Companies or a Company”) to provide such services.

 

2.(a) In consideration of the Principal Servicer’s Services under this Agreement in respect of the Class B Shares each Fund agrees to pay the Principal Servicer or at its direction its “Allocable Portion” (as hereinafter defined) of a fee (the “Servicing Fee”) equal to 0.25 of 1% per annum of the average daily net asset value of the Class B Shares of the Fund outstanding from time to time, provided however, that in the event the Fund operates as a fund of funds (a “FOF Fund”) by investing the proceeds of the issuance of its Class B Shares in Class A Shares of another fund (the “Other Fund”) and the Principal Shareholder Servicer receives a servicing fee in respect of the Class A Shares of the Other Fund so acquired by the FOF Fund, the Servicing Fee payable in respect of such Class B Shares of the FOF Fund will be reduced by the amount of the servicing fee actually received by the Principal Shareholder Servicer or its assign from the Other Fund in respect of the Class A Shares of the Other Fund acquired with the proceeds of such Class B Shares of the FOF Fund.

 

(b)(i) The Principal Servicer will be deemed to have fully earned its Allocable Portion (computed as of any date) of the Servicing Fee payable in respect of the Class B Shares of a Fund (and to have satisfied its obligation to arrange for shareholder services in respect of such Class B Shares) on the date it has arranged for shareholder services to be performed by Federated Shareholder Services by payment of the lump sum contemplated by Alternative A to Exhibit 1 to the Shareholder Services Agreement among the Principal Servicer, Federated Shareholder Services and the Fund dated as of the date hereof (the “Shareholder Services Agreement”) to Federated Shareholder Services (whose obligations are fully supported by its parent company) in respect of each “Commission Share” (as defined in the Allocation Schedule attached hereto in Schedule B) of the Fund, taken into account in determining such Principal Servicer’s Allocable Portion of such Servicing Fees as of such date. The Principal Servicer shall not be deemed to have any other duties in respect of the Shares and its Allocable Portion of the Servicing Fees to which the preceding sentence applies and such arrangements shall be deemed a separate and distinct contractual arrangement from that described in clause (ii).

 

(ii) The Principal Servicer will be deemed to have fully earned any Servicing Fees not included in its Allocable Portion (i.e., those attributable to Shares in respect of which Alternative A under Exhibit 1 to the Shareholder Services Agreement is not applicable) as such services are performed in respect of such Shares.

 

(c)Notwithstanding anything to the contrary set forth in this Exhibit, the Principal Shareholder Agreement, or (to the extent waiver thereof is permitted thereby) applicable law, each Investment Company’s obligation to pay the Principal Servicer’s Allocable Portion of the Servicing Fees payable in respect of the Class B Shares of a Fund shall not be terminated or modified for any reason (including a termination of this Principal Shareholder Servicer’s Agreement as it relates to the Fund) except to the extent required by a change in the Investment Company Act of 1940 (the “Act”) or the Conduct Rules of the National Association of Securities Dealers, Inc., in either case enacted or promulgated after May 1, 1997, or in connection with a “Complete Termination” (as hereinafter defined) in respect of the Class B Shares of such Fund.

 

(d)Notwithstanding anything to the contrary in this Exhibit, the Principal Shareholder Agreement, or (to the extent waiver thereof is permitted thereby) applicable law, the Principal Servicer may assign, sell or pledge (collectively, “Transfer”) its rights to its Allocable Portion of the Servicing Fees (but not its obligations to the Investment Companies under this Principal Shareholder Servicer’s Agreement) in respect of the Class B Shares of a Fund to raise funds to make the expenditures related to the Services and in connection therewith upon receipt of notice of such Transfer, the Investment Company shall pay to the assignee, purchaser or pledgee (collectively with their subsequent transferees, “Transferees”) such portion of the Principal Servicer’s Allocable Portion of the Servicing Fees in respect of the Class B Shares of the Fund so Transferred. Except as provided in (c) above and notwithstanding anything to the contrary set forth elsewhere in this Exhibit, the Principal Shareholder Agreement, or (to the extent waiver thereof is permitted thereby) applicable law, to the extent the Principal Servicer has Transferred its rights thereto to raise funds as aforesaid, the Investment Companies’ obligation to pay to the Principal Servicer’s Transferees the Principal Servicer’s Allocable Portion of the Servicing Fees payable in respect of the Class B Shares of each Fund shall be absolute and unconditional and shall not be subject to dispute, offset, counterclaim or any defense whatsoever, including without limitation, any of the foregoing based on the insolvency or bankruptcy of the Principal Servicer, Federated Shareholder Services (or its parent) or the failure of Federated Shareholder Services (or its parent) to perform its Irrevocable Service Commitment (it being understood that such provision is not a waiver of the Investment Companies’ right to pursue such Principal Servicer and enforce such claims against the assets of such Principal Servicer other than the Principal Servicer’s right to the Distribution Fees, Servicing Fees and CDSCs in respect of the Class B Shares of the Fund which have been so transferred in connection with such Transfer). The Fund agrees that each such Transferee is a third party beneficiary of the provisions of this clause (d) but only insofar as those provisions relate to Servicing Fees transferred to such Transferee.

 

(e)For purposes of this Principal Shareholder Servicer’s Agreement, the term Allocable Portion of Servicing Fees payable in respect of the Class B Shares of any Fund shall mean the portion of such Servicing Fees allocated to such Principal Servicer in accordance with the Allocation Schedule attached hereto as Schedule B.

 

(f)For purposes of this Principal Shareholder Servicer’s Contract, the term “Complete Termination” of shareholder servicing arrangements in respect of Class B Shares of a Fund means a termination of shareholder servicing arrangements involving the complete cessation of payments of Servicing Fees in respect of all Class B Shares, and the complete cessation of payments of servicing fees for every existing and future class of shares of the Fund and any successor Fund or any Fund acquiring a substantial portion of the assets of the Fund ,which has substantially similar characteristics to the Class B Shares taking into account the manner and amount of sales charge, servicing fee, contingent deferred sales charge or other similar charge borne directly or indirectly by the holders of such shares.

 

3.The Principal Servicer may enter into separate written agreements with Companies to provide the services set forth in Paragraph 1 herein. The schedules of fees to be paid such Companies and the basis upon which such fees will be paid shall be determined from time to time by the Principal Servicer in its sole discretion.

 

4.The Principal Servicer will prepare reports to the Board of Trustees/Directors of the Investment Companies on a quarterly basis showing amounts expended hereunder including amounts paid to Companies and the purpose for such expenditures.

 

In consideration of the mutual covenants set forth in the Principal Shareholder Servicer’s Contract, the Principal Servicer and the Investment Companies hereby execute and deliver this Exhibit with respect to the Class B Shares of each Fund.

 

Witness the due execution hereof this 24th day of October, 1997.

 

 

 

  Investment Companies (listed on Schedule A)
   
   
Attest: /s/ S. Elliott Cohan By:/s/ John W. McGonigle
Title: Assistant Secretary Title: Executive Vice President
   
   
  Federated Securities Corp.
   
   
Attest:/s/ Leslie K. Platt By: /s/ Byron F. Bowman
Title: Assistant Secretary Title: Vice President
   
 
 

SCHEDULE B

to

the Principal Shareholder

Servicer’s Agreement for

Class B Shares of the

Federated Funds

 

ALLOCATION SCHEDULE

 

Shareholder Servicing Fees related to Shares of each Fund shall be allocated among the existing Principal Servicer and each subsequent Principal Servicer in accordance with this Schedule B.

 

Defined terms used in this Schedule B and not otherwise defined herein shall have the meaning assigned to them in the Principal Shareholder Servicer’s Agreement. As used herein the following terms shall have the meanings indicated:

 

[ ]

 

PART I: ATTRIBUTION OF SHARES

 

[ ]

 

PART II: ALLOCATION OF SHAREHOLDER SERVICING FEES

 

[ ]

 

PART III: ADJUSTMENTS OF THE EXISTING PRINCIPAL SERVICER’S AND EACH SUBSEQUENT PRINCIPAL SERVICER’S ALLOCABLE SHARE OF ASSET BASED SALES CHARGES AND CONTINGENT DEFERRED SALES CHARGES

 

[ ]

 
 

EXHIBIT I TO THE

ALLOCATION SCHEDULE

 

SELLING AGENTS CURRENTLY OFFERING OMNIBUS SHARES

 

[ ]

 
 

Schedule A

 

PRINCIPAL SHAREHOLDER SERVICER’S AGREEMENT

 

Effective Date: Class B Shares of: Revised 12/1/19

  FEDERATED ADVISER SERIES
8/31/17 Federated MDT Large Cap Value Fund
   
  FEDERATED EQUITY FUNDS
12/1/00 Federated Kaufmann Fund
12/1/02 Federated Kaufmann Small Cap Fund
10/24/97 Federated MDT Mid Cap Growth Fund
   
10/24/97 FEDERATED EQUITY INCOME FUND, INC.
   
  FEDERATED FIXED INCOME SECURITIES, INC.
10/24/97 Federated Strategic Income Fund
   
6/1/08 FEDERATED GLOBAL ALLOCATION FUND
   
10/24/97 FEDERATED GOVERNMENT INCOME SECURITIES, INC.
   
10/24/97 FEDERATED HIGH INCOME BOND FUND, INC.
   
9/1/02 FEDERATED INCOME SECURITIES TRUST
12/1/02 Federated Capital Income Fund
9/1/02 Federated Fund for U.S. Government Securities
9/1/03 Federated Muni and Stock Advantage Fund
   
  FEDERATED INTERNATIONAL SERIES, INC.
10/24/97 Federated Global Total Return Bond Fund
   
  FEDERATED INVESTMENT SERIES FUNDS, INC.
10/24/97 Federated Bond Fund
   
  FEDERATED MDT SERIES
3/1/07 Federated MDT Large Cap Growth Fund
12/1/07 Federated MDT Small Cap Growth Fund
   
  FEDERATED MUNICIPAL SECURITIES INCOME TRUST
6/1/06 Federated Municipal High Yield Advantage Fund
10/24/97 Federated Pennsylvania Municipal Income Fund
   
10/24/97 FEDERATED MUNICIPAL SECURITIES FUND, INC.
   
  FEDERATED TOTAL RETURN SERIES, INC.
6/1/01 Federated Total Return Bond Fund
   
  FEDERATED WORLD INVESTMENT SERIES, INC.
10/24/97 Federated Emerging Market Debt Fund
10/24/97 Federated International Small-Mid Company Fund
6/1/98 Federated International Leaders Fund
   
  MONEY MARKET OBLIGATIONS TRUST
6/1/15 Federated Government Reserves Fund

 

 EX-99.SERV AGR4 16 ex28h1dshsvagr.htm 11/30/98 - FEDERATED SHAREHOLDER SERVICES MERGED INTO FEDERATED SHAREHOLDER SERVICES COMPANY

Exhibit 28 (h) (1) (d) under Form N-1A
Exhibit 99 under item 601/REG. S-K

 

11/30/98 - Federated Shareholder Services merged into Federated Shareholder Services Company

 

SHAREHOLDER SERVICES AGREEMENT

 

THIS AGREEMENT, is made as of the 24th day of October, 1997, by and between those Investment Companies on behalf of the Portfolios (individually referred to herein as a “Fund” and collectively as “Funds”) and Classes of Shares (“Classes”) listed on Schedule A to Exhibit 1, as it may be amended from time to time, having their principal office and place of business at Federated Investors Tower, Pittsburgh, PA 15222-3779 and who have approved this form of Agreement and Federated Securities Corp.(“FSC”), a Pennsylvania Corporation, having its principal office and place of business at Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779 and Federated Shareholder Services, a Delaware business trust, having its principal office and place of business at Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779 ("FSS"). Each of the Exhibits hereto is incorporated herein in its entirety and made a part hereof. In the event of any inconsistency between the terms of this Agreement and the terms of any applicable Exhibit, the terms of the applicable Exhibit shall govern.

1.FSC as Principal Servicer (Principal Servicer”) hereby contracts with FSS to render or cause to be rendered personal services to shareholders and/or the maintenance of accounts of shareholders of each Class of the Funds to which this Agreement is made applicable by an Exhibit hereto (“Services"). In addition to providing Services directly to shareholders of the Funds, FSS is hereby appointed the Investment Companies' agent to select, negotiate and subcontract for the performance of Services. FSS hereby accepts such appointment. FSS agrees to provide or cause to be provided Services which, in its best judgment (subject to supervision and control of the Investment Companies' Boards of Trustees or Directors, as applicable), are necessary or desirable for shareholders of the Funds. FSS further agrees to provide the Investment Companies, upon request, a written description of the Services which FSS is providing hereunder. The Investment Companies, on behalf of the Funds and each Class subject hereto consents to the appointment of FSS to act in its capacity as described herein and agrees to look solely to FSS for performance of the Services.
2.The term of the undertaking of FSS to render services hereunder in respect of any Class of any Fund and the manner and amount of compensation to be paid in respect thereof shall be specified in respect of each Class of the Funds to which this Agreement is made applicable by an Exhibit hereto. FSS agrees to look solely to the Principal Servicer for its compensation hereunder.
3.This Agreement shall become effective in respect of any Class of Shares of a Fund upon execution of an Exhibit relating to such Class of the Fund. Once effective in respect of any Class of shares, this Agreement shall continue in effect for one year from the date of its execution, and thereafter for successive periods of one year only if the form of this Agreement is approved at least annually by the Board of each Investment Company, including a majority of the members of the Board of the Investment Company who are not interested persons of the Investment Company ("Independent Board Members") cast in person at a meeting called for that purpose.

4.       Notwithstanding paragraph 3, this Agreement may be terminated as follows:

(a)By any Investment Company as to any Fund at any time, without the payment of any penalty, by the vote of a majority of the Independent Board Members of any Investment Company or by a vote of a majority of the outstanding voting securities of any Fund as defined in the Investment Company Act of 1940 on sixty (60) days' written notice to the parties to this Agreement;
(b)automatically in the event of the Agreement's assignment as defined in the Investment Company Act of 1940; and
5.FSS agrees to obtain any taxpayer identification number certification from each shareholder of the Funds to which it provides Services that is required under Section 3406 of the Internal Revenue Code, and any applicable Treasury regulations, and to provide each Investment Company or its designee with timely written notice of any failure to obtain such taxpayer identification number certification in order to enable the implementation of any required backup withholding.
6.FSS shall not be liable for any error of judgment or mistake of law or for any loss suffered by any Investment Company 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. FSS shall be entitled to rely on and may act upon advice of counsel (who may be counsel for such Investment Company) 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 FSS, who may be or become a member of such Investment Company's Board, officer, employee or agent of any Investment Company, shall be deemed, when rendering services to such Investment Company or acting on any business of such Investment Company (other than services or business in connection with the duties of FSS hereunder) to be rendering such services to or acting solely for such Investment Company and not as an officer, trustee, partner, employee or agent or one under the control or direction of FSS even though paid by FSS.

This Section 6 shall survive termination of this Agreement.

7.No provision of this Agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which an enforcement of the change, waiver, discharge or termination is sought.
8.FSS is expressly put on notice of the limitation of liability as set forth in the Declaration of Trust of each Investment Company that is a Massachusetts business trust and agrees that the obligations assumed by each such Investment Company pursuant to this Agreement shall be limited in any case to such Investment Company and its assets and that FSS shall not seek satisfaction of any such obligations from the shareholders of such Investment Company, the Trustees, Officers, Employees or Agents of such Investment Company, or any of them.
9.The execution and delivery of this Agreement have been authorized by the Trustees of FSS and signed by an authorized officer of FSS, 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 FSS, but bind only the trust property of FSS as provided in the Declaration of Trust of FSS.
10.Notices of any kind to be given hereunder shall be in writing (including facsimile communication) and shall be duly given if delivered to any Investment Company at the following address: Federated Investors Tower, Pittsburgh, PA 15222-3779, Attention: President and if delivered to FSS at Federated Investors Tower, Pittsburgh, PA 15222-3779, Attention: President.
11.This Agreement constitutes the entire agreement between the parties hereto and supersedes any prior agreement with respect to the subject hereof whether oral or written. If any provision of this Agreement shall be held or made invalid by a court or regulatory agency decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. Subject to the provisions of Sections 3 and 4, hereof, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and shall be governed by Pennsylvania law; provided, however, that nothing herein shall be construed in a manner inconsistent with the Investment Company Act of 1940 or any rule or regulation promulgated by the Securities and Exchange Commission thereunder.
12.This Agreement may be executed by different parties on separate counterparts, each of which, when so executed and delivered, shall be an original, and all such counterparts shall together constitute one and the same instrument.
13.This Agreement shall not be assigned by any party without the prior written consent of the parties hereto. Nothing in this Section 13 shall prevent FSS 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 Schedule A)

 

 

Attest: /s/ S. Elliott Cohan By: /s/ John W. McGonigle

Title: Assistant Secretary Title: Executive Vice President

 

 

Federated Shareholder Services

 

 

Attest:/s/ Leslie K. Platt By: /s/ Byron F. Bowman

Title: Assistant Secretary Title: Vice President

 

 

Federated Securities Corp.

 

 

Attest: /s/ Leslie K. Platt By: /s/ Byron F. Bowman

Title: Assistant Secretary Title: Vice President

 
 

EXHIBIT 1

TO SHAREHOLDER SERVICES AGREEMENT

FOR CLASS B SHARES OF

THE INVESTMENT COMPANIES

 

1.       The Shareholder Services Agreement for Shares of the Investment Companies on behalf of the portfolios (individually referred to as a “Fund” and collectively as “Funds”) and the classes of shares (“Classes”) listed on the attached Schedule A dated October 24, 1997 among Federated Securities Corp. (“Principal Servicer”), Federated Shareholder Services (“Class Servicer”) and the Investment Companies is hereby made applicable on the terms set forth herein to the Class B Shares of the above-referenced Funds. In the event of any inconsistency between the terms of this Exhibit and the Shareholder Services Agreement, the terms of this Exhibit shall govern.

 

2.       In connection with the Services to be rendered to holders of Class B Shares of each Fund, the Principal Servicer and Class Servicer agree that the Principal Servicer shall retain and compensate the Class Servicer for its Services in respect of the Class B Shares of the Fund on one of the following alternative basis as the Principal Servicer shall elect:

 

ALTERNATIVE A3: The Principal Servicer shall pay the Class Servicer a dollar amount as set forth on Schedule A per Class B Commission Share (as defined in the Principal Shareholder Servicer’s Agreement) of the Fund. Class Servicer agrees that upon receipt of such payment (which shall be deemed to be full and adequate consideration for an irrevocable service commitment (the “Irrevocable Service Commitment”) of Class Servicer hereunder), Class Servicer shall be unconditionally bound and obligated to either: (1) provide the Services in respect of such Commission Share and all other Shares derived therefrom via reinvestment of dividends, free exchanges or otherwise for so long as the same is outstanding or (2) in the event the Class Servicer for the Class B Shares is terminated by the Investment Company, to arrange for a replacement Class Servicer satisfactory to the Investment Company to perform such services, at no additional cost to the Fund.

 

ALTERNATIVE B4: If Alternative A is not elected, the Principal Servicer shall pay the Class Servicer twenty five basis points (0.25%) per annum on the average daily net asset value of each Class B Share of the Fund monthly in arrears. The Class Servicer agrees that such payment is full and adequate consideration for the Services to be rendered by it to the holder of such Class B Share.

 

3.       In the event pursuant to paragraph 2 above, Alternative A has been elected and the Class Servicer is terminated as Class Servicer for the Class B Shares of the Fund, the Class Servicer agrees to pay to any successor Class Servicer for the Class B Shares of the Fund any portion of the excess, if any, of (A) the Servicing Fees received by it hereunder in respect of Class B Shares of the Fund plus interest thereon at the percent as set forth on Schedule A per annum minus (B) the costs it incurred hereunder in respect of the Class B Shares of the Fund prior to such termination.

 

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.

 

 

Attest: FEDERATED SECURITIES CORP.

 

 

By: /s/ Leslie K. Platt By: /s/ Byron F. Bowman

Title: Assistant Secretary Title: Vice President

 

Attest: FEDERATED SHAREHOLDER SERVICES

 

 

By:/s/ Leslie K. Platt By: /s/ Byron F. Bowman

Title: Assistant Secretary Title: Vice President

 

Attest: INVESTMENT COMPANIES

(listed on Schedule A)

 

 

By: /s/ S. Elliott Cohan By: /s/ John W. McGonigle

Title: Assistant Secretary Title: Executive Vice President

 

 

 
 

 

Schedule A

 

SHAREHOLDER SERVICES AGREEMENT

Effective Date: Class B Shares of: Revised 12/1/19

  FEDERATED ADVISER SERIES
8/31/17 Federated MDT Large Cap Value Fund
   
  FEDERATED EQUITY FUNDS
12/1/00 Federated Kaufmann Fund
12/1/02 Federated Kaufmann Small Cap Fund
10/24/97 Federated MDT Mid-Cap Growth Fund
   
10/24/97 FEDERATED EQUITY INCOME FUND, INC.
   
  FEDERATED FIXED INCOME SECURITIES, INC.
10/24/97 Federated Strategic Income Fund
   
6/1/08 FEDERATED GLOBAL ALLOCATION FUND
   
10/24/97 FEDERATED GOVERNMENT INCOME SECURITIES, INC.
   
10/24/97 FEDERATED HIGH INCOME BOND FUND, INC.
   
9/1/02 FEDERATED INCOME SECURITIES TRUST
12/1/02 Federated Capital Income Fund
9/1/02 Federated Fund for U.S. Government Securities
9/1/03 Federated Muni and Stock Advantage Fund
   
  FEDERATED INTERNATIONAL SERIES, INC.
10/24/97 Federated Global Total Return Bond Fund
   
  FEDERATED INVESTMENT SERIES FUNDS, INC.
10/24/97 Federated Bond Fund
   
  FEDERATED MDT SERIES
3/1/07 Federated MDT Large Cap Growth Fund
12/1/07 Federated MDT Small Cap Growth Fund
   
  FEDERATED MUNICIPAL SECURITIES INCOME TRUST
6/1/06 Federated Municipal High Yield Advantage Fund
6/1/02 Federated New York Municipal Income Fund
10/24/97 Federated Pennsylvania Municipal Income Fund
   
10/24/97 FEDERATED MUNICIPAL BOND FUND, INC.
   
  FEDERATED TOTAL RETURN SERIES, INC.
6/1/01 Federated Total Return Bond Fund
   
  FEDERATED WORLD INVESTMENT SERIES, INC.
10/24/97 Federated Emerging Market Debt Fund
10/24/97 Federated International Small-Mid Company Fund
6/1/98 Federated International Leaders Fund
   
  MONEY MARKET OBLIGATIONS TRUST
6/1/15 Federated Government Reserves Fund

 

 

3 [ ]

4 [ ]

 EX-99.TSF AGR 17 ex28h2ssbtransf.htm EXHIBIT 99 UNDER ITEM 601/REG. S-K

Exhibit 28 (h)(2) under Form N-1A

Exhibit 99 under item 601/REG. S-K

 

 

 

Execution Copy

 

 

 

 

 

 

 

 

TRANSFER AGENCY AND SERVICE AGREEMENT

 

BETWEEN

EACH OF THE FEDERATED FUNDS LISTED ON EXHIBIT A HERETO

AND

 

STATE STREET BANK AND TRUST COMPANY

 

 
 

TRANSFER AGENCY AND SERVICE AGREEMENT

 

AGREEMENT made as of the 31st day of January, 2017 (the “Agreement”), by and between each entity that has executed this Agreement, as listed on the signature pages hereto, each company having its principal place of business at either 1001 Liberty Avenue, Pittsburgh, Pennsylvania 15222 or 4000 Ericsson Drive, Warrendale, Pennsylvania 15086-7561 (each a “Fund” and collectively, the “Funds”), and STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company having its principal office and place of business at 1 Lincoln Street, Boston, Massachusetts 02111 (the “Transfer Agent"). This Agreement shall be considered a separate agreement between the Transfer Agent and each Fund and references to "the Fund" shall refer to each Fund separately. No Fund shall be liable for the obligations of, nor entitled to the benefits of, any other Fund under this Agreement.

 

WHEREAS, certain Funds may be authorized to issue shares in separate series, with each such series representing interests in a separate portfolio of securities and other assets;

WHEREAS, such series shall be named under the respective Fund in the attached Exhibit A, which may be amended by the parties from time to time (each such series and all classes thereof, together with all other series and all classes thereof subsequently established by the Fund and made subject to this Agreement in accordance with Section 17, being herein referred to as a "Portfolio", and collectively as the "Portfolios");

 

WHEREAS, the Fund, on behalf of the Portfolios, desires to appoint the Transfer Agent as its transfer agent, dividend disbursing agent and agent in connection with certain other activities and the Transfer Agent desires to accept such appointment; and

WHEREAS, for the avoidance of doubt, in addition to the Funds that are investment companies, Federated Investors Trust Company, a Pennsylvania trust company, is custodian for the collective/common investment funds listed on Exhibit A and identified as such (each a “Collective Trust” or collectively “Collective Trusts”, in addition to being Funds for purposes of this Agreement), and such Collective Trusts are a part of this Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto agree as follows:

 

1. Definitions

“1933 Act” is defined in Section 5.6 hereof.

“1934 Act” is defined in Section 4.5 hereof.

“1940 Act” is defined in Section 5.4 hereof.

“Adverse Consequences” is defined in Section 7.1 hereof.

"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations promulgated under the Securities Exchange Act of 1934, as amended.

 

"Agreement" has the meaning ascribed thereto in the preamble to this Agreement.

 

"AML" has the meaning ascribed thereto in Section 2.1(F)(8) hereof.

 

“AML Delegation” is defined in Section 2.1(F)(8) hereof.

 

“AML Procedures” is defined in Section 2.1(F)(8) hereof.

 

"AML Program" has the meaning ascribed thereto in Schedule 2.1(F)(8) hereof.

 

"Annual Report" has the meaning ascribed thereto in Section 2.2 hereof.

 

“Applicable AML Law” is defined in Section 2.1(F)(8) hereof.

 

"Applicable Law" has the meaning ascribed thereto in Section 2.1 hereof.

 

"Board" has the meaning ascribed thereto in Section 2.1 hereof.

 

“BSA” is defined in Schedule 2.1(F)(8) hereof.

 

"Chief Compliance Officer" has the meaning ascribed thereto in Section 2.2 hereof.

 

“Collective Trusts” is defined in the recitals to this Agreement.

 

“Confidential Information” is defined in Section 9.1 hereof.

 

“Core Escheatment Services” has the meaning ascribed thereto in Section 2.1(F)(5) hereof.

 

“CPI-W” is defined as the Consumer Price Index for Urban Wage Earners and Clerical Workers (Area: Boston-Brockton-Nashua, MA-NH-ME-CT; Base Period: 1982-1984+100) as published by the United States Department of Labor, Bureau of Labor Statistics.

 

"Custodian" has the meaning ascribed thereto in Section 2.1(A)(1) hereof.

 

“Customer Information” is defined in Section 9.2 hereof.

 

"Data Access Services" has the meaning ascribed thereto in Section 6.1 hereof.

 

"Deconversion" has the meaning ascribed thereto in Section 12.2 hereof.

 

“Disclosing Party” is defined in Section 9.1 hereof.

 

“Disclosure Documents” is defined in Section 2.1(E)(3).

 

"Distribution Payment Date" has the meaning ascribed thereto in Section 2.1(C)(1) hereof.

 

"Fee Schedule" has the meaning ascribed thereto in Section 3.1 hereof.

 

“FinCEN” is defined in Schedule 2.1(F)(8) hereof.

 

"Functional Matrix" has the meaning ascribed thereto in Section 2.1(F)(1) hereof.

 

"Fund" and "Funds" has the meanings ascribed thereto in the preamble to this Agreement.

 

“Fund Computers” is defined in Section 6.1(a) hereof.

 

"Fund Confidential Information" means Confidential Information for which the Fund is the Disclosing Party.

 

“Fund Customers” is defined in Section 9.2 hereof.

 

“Fund Indemnitees” is defined in Section 7.2 hereof.

 

"Fund/SERV" has the meaning ascribed thereto in Section 2.1(F)(6) hereof.

 

“GLB Act” is defined in Section 9.2 hereof.

 

“Good Order Review” means a review to determine if Shareholder documentation satisfies criteria established in Processing Guidelines.

 

"Good Purchase Orders" has the meaning ascribed thereto in Section 2.1(A)(1) hereof.

 

"Good Redemption Orders" has the meaning ascribed thereto in Section 2.1(B)(1) hereof.

 

"Good Transfer/Exchange Orders" has the meaning ascribed thereto in Section 2.1(B)(3) hereof.

 

“Information Security Schedule” has the meaning ascribed thereto in Section 10.2 hereof.

 

"Initial Term" is defined in Section 12.1 hereof.

 

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended.

 

"IRAs" has the meaning ascribed thereto in Section 2.1(F)(7) hereof.

 

“Mass Privacy Act” is defined in Section 9.2 hereof.

 

"NAV" means the net asset value per share of a Fund.

 

"Networking" has the meaning ascribed thereto in Section 2.1(F)(6) hereof.

 

"Next Calculated NAV" means the NAV next calculated by each Fund's fund accountant after receipt by Transfer Agent (or any agent of the Transfer Agent or Fund identified in the registration statement of such Fund or in Proper Instructions (each, a "22c-1 Agent")) of a (i) Good Purchase Order or (ii) Good Redemption Order, as applicable.

 

"NSCC" has the meaning ascribed thereto in Section 2.1(F)(6) hereof.

 

"OFAC" has the meaning ascribed thereto in Schedule 2.1(F)(8) hereto.

 

"Oral Instruction" has the meaning ascribed thereto in Section 2.1 hereof.

 

“Outreach Services” has the meaning ascribed thereto in Section 2.1(F)(5) hereof and Exhibit B hereto.

 

“Outreach Subcontractor” has the meaning ascribed thereto in Exhibit B hereto.

 

“PEP” is defined in Schedule 2.1(F)(8) hereof.

 

"Policies" have meaning ascribed thereto in Section 2.2 hereof.

 

"Portfolio" has the meaning ascribed thereto in the preamble to this Agreement.

 

“Prime Rate” is defined as the base rate on corporate loans posted by large domestic banks as published by the Wall Street Journal.

 

"Processing Guidelines" has the meaning ascribed thereto in Section 2.1(A) hereof

 

"Proper Instructions" has the meaning ascribed thereto in Section 2.1 hereof.

 

"Prospectus" has the meaning ascribed thereto in Section 2.1 hereof.

 

“Receiving Party” is defined in Section 9.1 hereof.

 

"Recordkeeping Agreement" has the meaning ascribed thereto in Section 2.1(F)(4) hereof.

 

"Renewal Term" has the meaning ascribed thereto in Section 12.1.

 

"Retirement Accounts" has the meaning ascribed thereto in Section 2.1(F)(7) hereof.

 

“Routine Records Requests” shall mean (i) any subpoena, court order or request for information from a governmental authority (a) with respect to a shareholder in a Fund, (b) that would be required to be maintained (or is maintained) by the Transfer Agent of the Fund, (c) that can be obtained without resorting to information outside of the Transfer Agent’s records, and (d) with respect to a matter not involving a claim directly against the Fund or its service providers and (ii) any request to take action against the assets in a shareholder account, such as seizure, levy, or hold, pursuant to a court order or governmental subpoena.

 

“RPO accounts” has the meaning ascribed thereto in Section 2.1(F)(5) hereof.

 

"SAR" has the meaning ascribed thereto in Schedule 2.1(F)(8) hereto.

 

“Security Breach” is defined in Section 11.5 hereof.

 

"Service Level Standards" has the meaning ascribed thereto in Section 2.1 hereof.

 

"Shares" has the meaning ascribed thereto in Section 2.1 hereof.

 

"Shareholders" has the meaning ascribed thereto in Section 2.1 hereof.

 

"Super Sheet" has the meaning ascribed thereto in Section 2.1(E)(1)(a) hereof.

 

"TA 2000 System" has the meaning ascribed thereto in Section 2.1(F)(6) hereof.

 

"Term" has the meaning ascribed thereto in Section 12.1 hereof.

 

"Transfer Agent" has the meaning ascribed thereto in the preamble to this Agreement.

 

“Transfer Agent Indemnitees” is defined in Section 7.1 hereof.

 

"Transfer Agent Proprietary Information" has the meaning ascribed thereto in Section 6.1 hereof.

 

“UPA” has the meaning ascribed thereto in Section 2.1(F)(5) hereof.

 

"USA PATRIOT Act" has the meaning ascribed thereto in Schedule 2.1(F)(8) hereto.

 

2. Terms of Appointment and Duties

 

2.1Transfer Agency Services. Subject to the terms and conditions set forth in this Agreement, each Fund, on behalf of itself and where applicable, its Portfolios, hereby employs and appoints the Transfer Agent to act as, and the Transfer Agent agrees to act as, its transfer agent for the Fund's authorized and issued shares ("the "Shares") and dividend disbursing agent and agent in connection with any accumulation, open-account or similar plan provided to the shareholders of each of the respective Portfolios of the Fund ("Shareholders") and set out in the currently effective prospectus and statement of additional information (or similar offering document) of the Fund on behalf of the Portfolio, as the same may be modified or amended from time to time and provided by the Fund to the Transfer Agent ("Prospectus"), including without limitation any periodic investment plan or periodic withdrawal program and in connection therewith, to perform the following services in accordance with (i) Proper Instructions, (ii) any federal and state laws, rules and regulations applicable to the performance of the services under this Agreement (together with any incorporated Schedules and/or Exhibits) and/or to which Transfer Agent is subject ("Applicable Law"), (iii) the terms of the Prospectus of each Fund or Portfolio, as applicable, and (iv) the service level standards set forth in Schedule 2.1 (the "Service Level Standards"). When used in this Agreement, the term "Proper Instructions" shall mean a writing signed or initialed by one or more persons as shall have been authorized from time to time by the board of directors/trustees of each Fund (the "Board") and with respect to which a written confirmation of such authorization shall have been filed with the Transfer Agent by the Fund. Each such writing shall set forth the specific transaction or type of transaction involved. Oral instructions ("Oral Instructions") will be deemed to be Proper Instructions if (a) they otherwise comply with the definition thereof and (b) the Transfer Agent reasonably believes them to have been given by a person authorized to give such instructions with respect to the transaction involved. The Fund shall promptly confirm all Oral Instructions or cause such Oral Instructions given by a third party who is authorized to give such Oral Instructions, to be promptly confirmed in writing. Proper Instructions may include communications effected through electro-mechanical or electronic devices. Proper Instructions, oral or written, may only be amended or changed in writing, including without limitation through electro-mechanical or electronic device.

A. Purchases

(1)      The Transfer Agent shall receive orders and payment for the purchase of Shares and, establish accounts in the Fund for the purchasers of the Fund’s Shares (i.e., Shareholders) on the Transfer Agent’s recordkeeping system and record the initial purchase by such Shareholders in the Fund, which are received in good order ("Good Purchase Orders") according to the then current processing guidelines of the Transfer Agent, as the same may be changed from time to time upon provision of a revised version thereof to the administrator of the Fund (the "Processing Guidelines"), and promptly deliver the payments received therefor to the custodian of the relevant Fund (the "Custodian"), for credit to the account of such Fund. The Transfer Agent shall notify each Custodian, on a daily basis, of the total amount of Good Purchase Orders received. Orders which are not Good Purchase Orders will be promptly rejected by the Transfer Agent, absent Proper Instructions to the contrary, and the Shareholder or would-be Shareholder, as applicable, will be promptly notified of such action.

 

(2)      The Transfer Agent shall accept and process Good Purchase Orders of additional Shares into existing accounts and promptly deliver payment and appropriate documentation thereof to the Custodian.

(3)      Subject to the deduction of any front-end sales charge, where applicable, as the Transfer Agent is instructed in accordance with the provisions of Subsection 2.1(A)(3) hereof, but based upon the Next Calculated NAV, the Transfer Agent shall compute and issue the appropriate number of Shares of each Fund and/or Class and credit such Shares to the appropriate Shareholder accounts.

(4)      The Transfer Agent shall deduct, and remit to the appropriate party according to Proper Instructions, all applicable sales charges according to (i) the Prospectus of the Fund, (ii) the relevant information contained in any Good Purchase Orders, and (iii) Proper Instructions, as applicable.

 

B. Redemptions, Transfers and Exchanges

(1)      The Transfer Agent shall accept and process redemption requests and, with respect to requests which are in good order according to the Processing Guidelines ("Good Redemption Orders"), promptly deliver the appropriate instructions therefor to the Custodian. The Transfer Agent shall notify each Custodian, on a daily basis, of the total amount of Good Redemption Orders received and/or estimated, as the case may be. Redemption orders which are not in good order will be promptly rejected by the Transfer Agent, absent Proper Instructions to the contrary, and the Shareholder will be promptly notified of such action.

(2)      Upon receipt of redemption proceeds from the Custodian with respect to any Good Redemption Order, in an amount equal to the product of the number of Shares to be redeemed times the Next Calculated NAV, the Transfer Agent shall pay or cause to be paid such redemption proceeds in the manner instructed by the redeeming Shareholders.

(3)      The Transfer Agent shall affect transfers and/or exchanges of Shares from time to time as instructed by the registered owners thereof, to the extent that such transfer and/or exchange instructions are in good order according to the Processing Guidelines ("Good Transfer/Exchange Orders"). All exchanges shall be processed as a redemption from the Fund in which the Shareholder is currently invested and a purchase of Shares in the Fund into which the Shareholder wishes to exchange. All instructions for transfer and/or exchange of Shares which are not Good Transfer/Exchange Orders shall be promptly rejected by the Transfer Agent, absent Proper Instructions to the contrary, and the Shareholder will be promptly notified of such action.

(4)      The Transfer Agent shall deduct from all redemption proceeds, and remit to the appropriate party according to Proper Instructions, any applicable redemption fees, contingent deferred sales charges, and other appropriate fees according to (i) the Prospectus of the Fund, (ii) the relevant information contained in any Good Redemption Orders, and (iii) Proper Instructions, as applicable.

 

C. Distributions

 

(1)    Upon receipt by the Transfer Agent of Proper Instructions as to any dividends or distributions declared in respect of Shares, the Transfer Agent shall act as Dividend Disbursing Agent for the Fund and shall either credit the amount of any such distribution to Shareholders of record on the payable date for such distribution, or pay such distribution in cash to such Shareholders on the payable date, pursuant to instructions from such Shareholders and in accordance with the provisions of the Fund's governing document and its Prospectus. Such credits or payments, as the case may be, shall be made by the Transfer Agent on the date established for same in the Proper Instructions (the "Distribution Payment Date"). As the Dividend Disbursing Agent, the Transfer Agent shall, on or before the Distribution Payment Date, notify the Custodian of the estimated amount required to pay any portion of said distribution that is payable in cash and instruct the Custodian to make sufficient funds available to pay such amounts. The Transfer Agent shall reconcile instructions given to the Custodian against amounts received from the Custodian, on a daily basis. If a Shareholder has not elected to receive any such distribution in cash, the Transfer Agent shall credit the Shareholder's account with a number of Shares equal to the product of the aggregate dollar amount of such distribution divided by the Next Calculated NAV for Shares, determined as of the date set forth in the Proper Instructions; and

 

D.       Recordkeeping

 

(1)    The Transfer Agent shall record the issuance of Shares of the Fund, and maintain a record of the total number of Shares of the Fund which are authorized, based upon data provided to it by the Fund, and issued and outstanding. The Transfer Agent 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 Fund.

 

(2)    The Transfer Agent shall establish and maintain records relating to the services to be performed hereunder in the form and manner as agreed to by the Fund including but not limited to, for each Shareholder's account, the following:

 

(a)Relevant, required account ownership, including name, address, date of birth and social security/tax identification number (and whether such number has been certified);
(b)Number of Shares owned of record;
(c)Historical information regarding the account, including dividends paid and time, 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 backup or other withholding is required by the Internal Revenue Code;
(f)Any distribution or dividend reinvestment instructions, systematic investment or withdrawal plan applications and instructions, cash distribution or dividend payment address and any and all correspondence relating to the current registration or other effective instructions with respect to such account;
(g)Any information required in order for the Transfer Agent to perform the calculations contemplated or required by this Agreement; and
(h)Any such other records as are required to be maintained under Applicable Law with respect to the services to be provided by the Transfer Agent hereunder.

 

(3)    The Transfer Agent shall preserve any such records that are required to be maintained for the periods for which they are required by Applicable Law to be maintained. The Transfer Agent acknowledges that any and all such records are the property of the Fund, and the Transfer Agent shall forthwith upon Proper Instructions, turn over to the Fund or to the person designated in the Proper Instructions, records and documents created and maintained by the Transfer Agent pursuant to this Agreement, which are no longer needed by the Transfer Agent in performance of its services. Such records and documents will be retained by the Transfer Agent for seven (7) years from the year of creation (or such longer period required by Applicable Law) or such earlier date if returned to the Fund. During the first two years of the applicable retention period such records and documents will be produced promptly, within reason, by the Transfer Agent upon request, or in connection with Section 2.3 below. At the end of the seven-year period, such records and documents will either be turned over to the Fund or upon receipt of Proper Instructions, destroyed in accordance with the then current record-retention policy of the Transfer Agent.

 

E. Confirmations and Reports

 

(1)    The Transfer Agent shall furnish the following information to the Fund, or other party at the direction of the Fund pursuant to Proper Instructions, upon request:

 

(a) Control Book (also known as "Super Sheet”). Maintain a daily record and produce a daily report for the Fund of all transactions and receipts and disbursements of money and securities and deliver a copy of such report for the Fund for each business day to the Fund, on the next business day at a mutually agreed upon time.

(b) Shareholder lists and statistical information;

(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 Transfer Agent;

(d) Information as to payments made pursuant to Proper Instructions by the Fund to third parties relating to distribution agreements, allocations of sales loads, redemption fees, or other transaction or sales-related payments;

(e) Make available same-day cash facility for intraday cash flow reporting; and

(f) Such other information as may be agreed upon from time to time.

 

(2)    The Transfer Agent shall prepare and timely file with the United States Internal Revenue Service, and appropriate state agencies, all required information reports as to dividends and distributions paid to Shareholders. The Transfer Agent shall prepare and timely mail to Shareholders, to the extent required, all information and/or notices with respect to dividends and distributions paid to such Shareholder, the sale price of any Shares sold and such other information as shall be necessary for the Shareholders to determine the amount of any taxable gain or loss in respect of the sale of Shares.

 

(3)    The Transfer Agent shall provide a file to the Fund’s print/mail vendor in order that the vendor may prepare and send: (i) confirmation statements and statements of account to Shareholders for all purchases and redemptions of Shares; (ii) other confirmable transactions in Shareholder accounts; and (iii) prospectuses, semi-annual reports, annual reports, proxy statements and, only as requested, statements of additional information ("Disclosure Documents") from the Funds.

 

F. Other Rights and Duties

(1)        The Transfer Agent and the Fund have agreed upon the allocation of certain functions between the parties and have reflected on Schedule 2.1(F)(1) (as amended from time to time, the "Functional Matrix") certain obligations to be performed by the Transfer Agent hereunder. To the extent required under the Functional Matrix, the Transfer Agent shall answer correspondence from Shareholders relating to their Share accounts and such other correspondence as may from time to time be addressed to the Transfer Agent or forwarded to the Transfer Agent for response by the Fund.

(2)        The Transfer Agent shall provide a file to the Fund’s print/mail vendor in order that the vendor may prepare and send materials from the Fund to Shareholders in connection with shareholder meetings of each Fund.

(3)        The Transfer Agent shall establish and maintain facilities and procedures for (a) the safekeeping of check forms and facsimile signature imprinting devices, if any; and (b) the preparation or use, and for keeping account of, such certificates, forms and devices.

(4)        The Transfer Agent shall: (a) operationally support transactions with the registered owners of omnibus accounts with whom the Funds have an agreement for the provision of services necessary for the recordkeeping or sub-accounting of share positions held in underlying sub-accounts (each, a "Recordkeeping Agreement"), by agreeing to perform, pursuant to Proper Instructions, those obligations of the Funds under such Recordkeeping Agreements as are set forth in the written agreement between the Fund and the Recordkeeping Agent and (b) enter into account Control Agreements, for, on behalf of, and in the name of, the Funds for the purpose of perfecting the security interest of a lender in Shares pledged as collateral by a Shareholder under and pursuant to an Uncertificated Securities Account Control Agreement(each a “Control Agreement”), and to perform the obligations of the Issuer (as defined therein) thereunder in accordance with the terms thereof. It is expressly acknowledged and agreed, however, that to the extent that any Recordkeeping Agreement or Control Agreement contains terms or conditions that are not contained in, or are materially different from, the terms and conditions set forth in the then-current forms of Recordkeeping Agreement and Control Agreement that have been reviewed by the Transfer Agent, the Funds shall afford Transfer Agent a reasonable opportunity within which to review such modified Recordkeeping Agreement or Control Agreement and indicate any required changes.

(5)        Abandoned Accounts. The Transfer Agent shall perform the following services (the “Core Escheatment Services”) for, and to assist, the Fund in complying with state escheatment requirements: (i) identify and process the Fund’s accounts that have returned post office mail (“RPO accounts”), inactive accounts and uncashed checks; (ii) perform all required lost shareholder searches in compliance with Rule 17Ad-17; (iii) perform all required state unclaimed property due diligence mailings based on state mailing schedules; (iv) provide pre-escheatment reports during January/February for the Fall cycle and November/December for the Spring/Summer cycles; (v) capture and maintain customer “date of last contact” and type of contact; and (vi) escheat abandoned and unclaimed assets based on applicable state dormancy periods and remittance schedules. In consideration of the performance of the Core Escheatment Services by the Transfer Agent, the Funds shall pay the Transfer Agent the Core Escheatment Service fees set forth on Schedule 3.1 to the Agreement. In addition to the Core Escheatment Services, the Transfer Agent has enhanced its unclaimed property administration (“UPA”) services to include certain additional optional outreach capabilities as described in Exhibit B to this Agreement (the “Outreach Services”). The Transfer Agent shall provide the Outreach Services to the Fund in accordance with the terms set forth in Exhibit B and this Agreement. For the avoidance of doubt, the Transfer Agent shall be responsible to the Funds for the acts or omissions of any Outreach Subcontractor to the same extent that the Transfer Agent would be liable for such acts or omissions under the terms of Exhibit B had the Transfer Agent not sub-contracted such services to an Outreach Subcontractor.

(6)        National Securities Clearing Corporation (the “NSCC”). In accordance with the rules and procedures of the NSCC in effect from time to time during the Term, (i) accept and effectuate (A) the registration and maintenance of accounts through the NSCC’s services known as networking (“Networking”) and (B) the purchase, redemption, transfer and exchange of shares in such accounts through the NSCC’s services known as Fund/SERV (“Fund/SERV”), (ii) accept and process instructions transmitted to, and received by, the Transfer Agent by transmission from the NSCC on behalf of broker dealers and banks which have been established by, or in accordance with Proper Instructions, and instructions of persons designated on the appropriate dealer file maintained by the Transfer Agent as authorized by the Fund to give such instructions, (iii) issue instructions to Fund’s banks for the settlement of transactions between the Fund and NSCC (acting on behalf of its broker-dealer and bank participants); (iv) provide account and transaction information from the affected Fund’s records on DST Systems, Inc. computer system TA2000 (“TA2000 System”) in accordance with NSCC’s Networking and Fund/SERV rules for those broker-dealers; and (v) maintain Shareholder accounts on TA2000 System through Networking;

(7)        Retirement Accounts. With respect to certain retirement plans or accounts (such as individual retirement accounts (“IRAs”), SIMPLE IRAs, SEP IRAs, Roth IRAs, Education IRAs, and 403(b) Plans (such accounts, “Retirement Accounts”), the Transfer Agent, at the request and expense of the Fund, provide or arrange for the provision of various services to such plans and/or accounts, which services may include custodial agent services such as account set-up maintenance, and disbursements as well as such other services as the parties hereto shall mutually agree upon.

(8)        Call Center Services. Answer telephone inquiries during mutually agreed upon hours each day on which the Fund is open for trading. In the event that the Fund plans to be open on a business day when the New York Stock Exchange is to be closed, the Fund shall provide the Transfer Agent with reasonable advance notice and the parties shall discuss the call center resources available for such day. The Transfer Agent shall answer and respond to inquiries from existing Shareholders, prospective Shareholders of the Fund and broker-dealers on behalf of such Shareholders in accordance with the instructions provided by the Fund to the Transfer Agent for purpose of fulfilling its duties under this Agreement, including, accepting transaction requests on behalf of the Fund.

(9)        Anti-Money Laundering (“AML”) Services. In order to assist the Fund with the Fund’s AML responsibilities under the BSA, US PATRIOT ACT, and other applicable AML laws (together, “Applicable AML Law”), the Transfer Agent shall provide certain risk-based Shareholder activity monitoring tools and procedures that are reasonably designed to: (i) promote the detection and reporting of potential money laundering activities; and (ii) assist in the verification of persons opening accounts with the Fund (the “AML Procedures”). The AML Procedures and related terms are set forth in the attached Schedule 2.1(F)(8) (entitled “AML Delegation”) which may be changed from time to time subject to mutual written agreement between the parties.

(10)     New Procedures. New procedures as to who shall provide certain of these services in Section 2 may be establishes through an amendment to this Agreement from time to time, such that the Transfer Agent may at times perform some of these services and the Fund or its agent may perform other of these services.

(11)     Checkwriting Services Support. Perform the services set forth on Schedule 2.2(11) hereto, as the same may be amended by mutual agreement of the parties hereto from time to time, in connection with the checkwriting privileges, if any, extended by the Fund.

(12)     Debit Card Services Support. Perform the services set forth on Schedule 2.2(12) hereto, as the same may be amended by mutual agreement of the parties hereto from time to time, in connection with the debit card privileges, if any, extended by the Fund.

 

2.2Periodic Review of Compliance Policies and Procedures. During the Term, Transfer Agent shall periodically assess its compliance policies and procedures (the “Policies”). Transfer Agent shall provide, (i) no less frequently than annually, electronic access to its Policies to the chief compliance officer of the Fund (the “Chief Compliance Officer”), and/or any individual designated by the Fund or such Chief Compliance Officer, including but not limited to members of the internal compliance and audit departments of Federated Investors, Inc., and any advisory board constituted by the Fund provided that the Transfer Agent may reasonably require any members of such advisory board that are not employees of the Fund or its Affiliates to execute a confidentiality agreement with respect to such information; (ii) at such reasonable times as he or she shall request, access by such Chief Compliance Officer to such individuals as may be necessary for the Chief Compliance Officer to conduct an annual review of the operation of such Policies for purposes of making his or her annual report to the Board of the Fund (the “Annual Report”), (iii) promptly upon enactment, notification of, and a copy of, any material change in such Policies, and (iv) promptly upon request, such other information as may be reasonably requested by such Chief Compliance Officer for purposes of making such Annual Report.

 

2.3Cooperation with Respect to Examinations and Audits. Transfer Agent shall provide assistance to and cooperate with the Fund with respect to any federal or state government-directed examinations and with the Fund’s internal or external auditors in connection with any Fund-directed audits. For purposes of such examinations and audits, at the request of the Fund, the Transfer Agent will use all reasonable efforts to make available, during normal business hours of the Transfer Agent’s facilities, all records and Policies solely as they directly pertain to the Transfer Agent’s activities under or pursuant to this Agreement. Such audits and examinations shall be conducted at the Fund’s expense and in a manner that will not interfere with the Transfer Agent’s normal and customary conduct of its business activities. To the extent practicable, the Fund shall make every effort to coordinate Fund-directed audits so as to minimize the inconvenience to the Transfer Agent and, except as otherwise agreed by the parties, no more frequently than once a year. In connection with any Fund-directed audit, the Fund shall not physically access the Transfer Agent’s systems and shall not conduct any testing on such systems. With respect to Fund-directed audits, the Transfer Agent shall provide such assistance in accordance with reasonable procedures and at reasonable frequencies, and the Fund shall provide reasonable advance notice of not less than three (3) business days to the Transfer Agent of such audits, and to the extent possible, of such examinations. The Transfer Agent may require any persons seeking access to its facilities to provide reasonable evidence of their authority. With respect to Fund-directed audits, the Transfer Agent may require such persons to execute a confidentiality agreement before granting access. On an annual basis, the Transfer Agent will provide the Fund with copies of its SOC 1 report.

 

2.4 Oversight of Print/Mail Vendor. The Fund maintains a direct contract for print/mail services with a third party vendor. The Transfer Agent currently provides certain assistance to the Fund in connection with managing the print/mail vendor’s production of the Fund’s statements, confirms, checks and other miscellaneous mailings. To the extent allowed by the print/mail vendor, the Transfer Agent shall use all commercially reasonable efforts to continue to provide the same type of assistance to the Fund in connection with managing the print/mail vendor’s production of the Fund’s statements, confirms, checks and other miscellaneous mailings for the period ending December 31, 2017. The Fund shall retain its responsibility for its contractual relationship with its print/mail vendor. The Fund and the Transfer Agent shall work together in good faith to (i) determine, prior to September 30, 2017, the level of support services to be provided by the Transfer Agent to the Fund in connection with the foregoing print/mail services of the Fund’s vendor for periods subsequent to December 31, 2017, or (ii) transition all or a portion of such support services from the Transfer Agent to the Fund or the Fund’s print/mail vendor prior to January 1, 2018.

 

2.5Processing of non-routine and Routine Records Requests. Transfer Agent shall, in a timely manner and pursuant to procedures reviewed and agreed to by the Funds and/or the administrator of the Funds from time to time, (a) process all Routine Records Requests and (b) direct all subpoenas, court orders and/or other requests for information that do not constitute Routine Record Requests to the Funds and the administrator of the Funds for disposition.

 

3. Fees and Expenses

 

3.1Fee Schedule. For the performance by the Transfer Agent of its obligations pursuant to this Agreement, the Fund agrees to pay the Transfer Agent the fees set forth in the attached Schedule 3.1 (the “Fee Schedule”) within thirty (30) calendar days after receipt of such invoice. Such fees and the other fees, charges and expenses identified under Section 3.2 below may be changed from time to time subject to mutual written agreement between the Fund and the Transfer Agent.

 

3.2Other Fees, Charges and Expenses. In addition to the fee paid under Section 3.1 above, the Fund agrees to pay the Transfer Agent for the other fees, charges and/or expenses listed on Schedule 3.2 hereof within thirty (30) calendar days after receipt of the applicable invoice. Such fees, charges and expenses, and the accrual, calculation and conformity of same to Schedule 3.2 shall be subject to audit from time to time by the treasurer of the Fund. In addition, any other expenses incurred by the Transfer Agent at the request or with the prior consent of the Fund will be reimbursed by the Fund.

 

3.3Invoices. The Fund agrees to pay all fees and reimbursable expenses within thirty (30) calendar days following the receipt of the respective invoice, except for that portion of any fees or expenses that are subject to good faith dispute. In the event of such a dispute, the Fund may only withhold that portion of the fee, charge or expense subject to the good faith dispute. The Fund shall notify the Transfer Agent in writing within twenty-one (21) calendar days following the receipt of each invoice if the Fund is disputing any amounts in good faith. The Fund shall pay such disputed amounts within fifteen (15) days of the day on which the parties agree on the amount to be paid. If no agreement is reached, then such disputed amounts shall be settled as may be required by law or legal process.

 

3.4Cost of Living Adjustment. Following the first year of the Initial Term, unless the parties shall otherwise agree pursuant to Section 12.1 hereof, the Complex Base Fee for the services shall be increased annually by the percentage increase for the twelve-month period of such previous calendar year of the CPI-W or, in the event that publication of such index is terminated, any successor or substitute index.

 

3.5Late Payments. If any undisputed amount in an invoice of the Transfer Agent (for fees or reimbursable expenses) is not paid when due, the Fund shall pay the Transfer Agent interest thereon (from the due date to the date of payment) at a per annum rate equal to one percent (1.0%) plus the Prime Rate or, in the event such rate is not published in the Wall Street Journal, a reasonably equivalent published rate selected by the Transfer Agent on the first day of publication during the month when such amount was due. Notwithstanding any other provision hereof, such interest rate shall be no greater than permitted under applicable provisions of Massachusetts law.

 

4. Representations and Warranties of the Transfer Agent

 

The Transfer Agent represents and warrants to the Fund that:

 

4.1      It is a trust company duly organized and existing and in good standing under the laws of The Commonwealth of Massachusetts.

 

4.2It is duly qualified to carry on its business in The Commonwealth of Massachusetts.

 

4.3It is empowered under Applicable Law and by its charter and by-laws to enter into and perform this Agreement.

 

4.4All requisite corporate proceedings have been taken to authorize it to enter into and perform this Agreement.

 

4.5It is in compliance with federal securities law requirements in all material respects with respect to its business, including but not limited to Applicable Law, and is in good standing as a registered transfer agent under Section 17A(c)(2) of the Securities Exchange Act of 1934, as amended (the “1934 Act”).

 

4.6It has and will continue to have access to the necessary facilities, equipment and personnel to perform its duties and obligations under this Agreement.

 

5. Representations and Warranties of the Fund

 

Each Fund represents and warrants to the Transfer Agent that:

 

5.1It is an entity duly organized and existing and in good standing under the laws of the applicable state in which it was organized.

 

5.2It is empowered under Applicable Law and by its organizational documents to enter into and perform this Agreement.

 

5.3All corporate proceedings required by its organizational documents have been taken to authorize it to enter into and perform this Agreement.

 

5.4It is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”) or, with respect to Funds that are Collective Trusts, a collective investment fund exempt from registration under the 1940 Act.
5.5It is in compliance with federal securities law requirements in all material respects with respect to its business.
5.6With respect to Funds other than the Collective Trusts, a registration statement under the Securities Act of 1933, as amended (the “1933 Act”) is currently effective and will remain effective, and appropriate state securities law filings have been made and will continue to be made, with respect to all Shares of the Fund being offered for sale.
5.7With respect to Funds that are Collective Trusts, these Funds were each formed by declaration of trust filed with the Pennsylvania Department of Banking.

 

6. Data Access and Proprietary Information

 

6.1The Fund acknowledges that the databases, computer programs, screen formats, report formats, interactive design techniques, and documentation manuals furnished to the Fund by the Transfer Agent as part of the Fund’s ability to access certain Fund Confidential Information maintained by the Transfer Agent on databases under the control and ownership of the Transfer Agent or other third party (“Data Access Services”) constitute copyrighted, trade secret, or other proprietary information of substantial value to the Transfer Agent or other third party (collectively, “Transfer Agent Proprietary Information”). In no event shall Transfer Agent Proprietary Information be deemed Fund Confidential Information. The Fund agrees to treat all Transfer Agent Proprietary Information as proprietary to the Transfer Agent and further agrees that it shall not divulge any Transfer Agent Proprietary Information to any person or organization except as may be provided hereunder. Without limiting the foregoing, the Fund agrees for itself and its employees and agents to:

 

(a)Use such programs and databases (i) solely on the Fund’s computers or on computers of Federated Services Company or its affiliates (collectively, “Fund Computers”), or (ii) solely from equipment at the location agreed to between the Fund and the Transfer Agent and (iii) solely in accordance with the Transfer Agent’s applicable user documentation;

 

(b)Refrain from copying or duplicating in any way (other than in the normal course of performing processing on the Fund Computers), the Transfer Agent Proprietary Information;

 

(c)Refrain from obtaining unauthorized access to any portion of the Transfer Agent Proprietary Information, and if such access is inadvertently obtained, to inform Transfer Agent in a timely manner of such fact and dispose of such information in accordance with the Transfer Agent’s instructions;

 

(d)Refrain from causing or allowing information transmitted from the Transfer Agent’s computer to the Fund’s terminal to be retransmitted to any other computer terminal or other device except as expressly permitted by the Transfer Agent (such permission not to be unreasonably withheld);

 

(e)Allow the Fund to have access only to those authorized transactions as agreed to between the Fund and the Transfer Agent; and

 

(f)Honor all reasonable written requests made by the Transfer Agent to protect at the Transfer Agent’s expense the rights of the Transfer Agent in the Transfer Agent Proprietary Information at common law, under federal copyright law and under other federal or state law.

 

6.2The Fund shall take reasonable efforts to advise its employees of their obligations pursuant to this Section 6. The obligations of this Section shall survive any earlier termination of this Agreement.

 

6.3If the Fund notifies the Transfer Agent that any of the Data Access Services do not operate in material compliance with the most recently issued user documentation for such services, the Transfer Agent shall use its best efforts in a timely manner to correct such failure. Organizations from which the Transfer Agent may obtain certain data included in the Data Access Services are solely responsible for the contents of such data and the Fund agrees to make no claim against the Transfer Agent arising out of the contents of such third-party data, including, but not limited to, the accuracy thereof; provided, however, that the Fund shall be entitled to insist that the Transfer Agent, and the Transfer Agent for the benefit of the Fund shall, enforce any and all rights under applicable contracts for the Data Access Services. SUBJECT TO THE FOREGOING OBLIGATIONS OF THE TRANSFER AGENT, DATA ACCESS SERVICES AND ALL COMPUTER PROGRAMS AND SOFTWARE SPECIFICATIONS USED IN CONNECTION THEREWITH ARE PROVIDED ON AN AS IS, AS AVAILABLE BASIS. EXCEPT AS OTHERWISE PROVIDED HEREIN TO THE CONTRARY, THE TRANSFER AGENT EXPRESSLY DISCLAIMS ALL WARRANTIES INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

 

6.4If the transactions available to the Fund include the ability to originate Proper Instructions through electronic instructions to the Transfer Agent in order to: (i) effect the transfer or movement of cash or Shares; or (ii) transmit Shareholder information or other information, then in such event the Transfer Agent shall be entitled to rely on the validity and authenticity of such Proper Instructions without undertaking any further inquiry as long as such Proper Instruction is undertaken in conformity with applicable security procedures.

 

7. Indemnification

 

7.1The Transfer Agent shall not be responsible for, and the Fund shall indemnify, defend and hold harmless the Transfer Agent, and its directors, officers, employees, agents, subcontractors, Affiliates and subsidiaries (the “Transfer Agent Indemnitees”), from and against all losses, judgments, damages, claims, liabilities, costs and expenses (including without limitation, reasonable attorneys’ fees and expenses) (collectively, the “Adverse Consequences”) that may at any time be asserted against or incurred by any of them in connection with claims by third parties directly arising out of or in connection with:

 

(a)All actions of the Transfer Agent or the Transfer Agent Indemnitees required to be taken pursuant to this Agreement (including the defense of any lawsuit in the Transfer Agent’s name or the name of a Transfer Agent Indemnitee), provided that such actions were taken in good faith and without negligence or willful misconduct;

 

(b)The Fund ‘s lack of good faith, negligence or willful misconduct;

 

(c)The reliance upon, and any subsequent use of or action taken or omitted, by the Transfer Agent, or the Transfer Agent Indemnitees on: (i) any information, records, documents, data, stock certificates or services, which are received by the Transfer Agent or the Transfer Agent Indemnitees by hard copy, machine readable input, facsimile, data entry, email, electronic instructions, or other similar means authorized by the Fund, and which have been prepared, maintained or performed by the Fund or any other person or firm on behalf of the Fund including but not limited to any broker-dealer, TPA or previous transfer agent; (ii) any Proper Instructions; (iii) any written instructions or opinions of the Fund’s legal counsel with respect to any matter arising in connection with the services to be performed by the Transfer Agent under this Agreement that are provided to the Transfer Agent by the Fund after consultation by the Fund with such legal counsel and that expressly allow the Transfer Agent to rely upon such instructions or opinions; or (iv) any paper or document, reasonably believed to be genuine, authentic, or signed by the proper person or persons with the authority to provide instructions to the Transfer Agent hereunder;

 

(d)The offer or sale of Shares in violation of federal or state securities laws or regulations requiring that such Shares be registered, or in violation of any stop order or other determination or ruling by any federal or any state agency with respect to the offer or sale of such Shares;

 

(e)The acceptance of facsimile or email transaction requests on behalf of individual Shareholders from broker-dealers, TPAs or the Fund, and the reliance by the Transfer Agent or Transfer Agent Indemnitees on the broker-dealer, TPA or the Fund ensuring that the original source documentation is in good order and properly retained;

 

(f)The negotiation and processing of any checks, wires and ACH transmissions including without limitation for deposit into, or credit to, the Fund’s demand deposit accounts maintained by the Transfer Agent; or

 

(g)The entering into or the carrying out of any obligations under, any NSCC agreements required for the transmission of Fund or Shareholder data through the NSCC clearing systems.

 

7.2The Transfer Agent shall, subject to the provisions of Section 8 below, indemnify and hold harmless the Fund and its directors, officers, employee, agents, subcontractors, affiliates and subsidiaries (the “Fund Indemnitees”) from and against any and all Adverse Consequences that may at any time be asserted against or incurred by any of them in connection with claims by third parties directly arising out of or in connection with (a) the Transfer Agent’s failure to perform the Services in accordance with the terms of this Agreement in good faith and without willful misconduct; or (b) a claim that any aspect of the services or systems provided under, and used within the scope of, this Agreement infringes any U.S. patent, copyright, trade secret or other intellectual property rights. With respect to any claims under (b) above, the Transfer Agent may, in its sole discretion, either (i) procure for the Fund a right to continue to use such service or system, (ii) replace or modify the service or system so as to be non-infringing without materially affecting the functions of the service or system, or (iii) if, in the Transfer Agent’s reasonable discretion, the actions described in (i) and (ii) are not capable of being accomplished on commercially reasonable terms, terminate this Agreement with respect to the affected service or system. Notwithstanding the foregoing, the Transfer Agent shall have no liability or obligation of indemnity for any claim which is based upon a modification of a service or system by anyone other than the Transfer Agent, use of such service or system other than in accordance with the terms of this Agreement, or use of such service or system in combination with other software or hardware not provided by the Transfer Agent if infringement could have been avoided by not using the service or system in combination with such other software or hardware.

 

7.3In order that the indemnification provisions contained in this Section 7 shall apply, upon the assertion of a claim for which one party may be required to indemnify the other party, the indemnified party shall promptly notify the indemnifying party of such assertion, and shall keep the indemnifying party advised with respect to all developments concerning such claim. The indemnifying party shall have the option to participate with the indemnified party in the defense of such claim or to defend against said claim in its own name or in the name of the indemnified party. The indemnified party shall in no case confess any claim or make any compromise in any case in which the indemnifying party may be required to indemnify the indemnified party except with the indemnifying party’s prior written consent.

 

8. Standard of Care

 

8.1The Transfer Agent shall at all times act in good faith and agrees to use its best efforts within reasonable limits to ensure the accuracy of all services performed under this Agreement, but assumes no responsibility and shall not be liable for loss or damage due to errors, including encoding and payment processing errors, unless said errors are caused by its negligence, bad faith, or willful misconduct or that of its employees or agents.  The parties agree that any encoding or payment processing errors shall be governed by this standard of care and Section 4-209 of the Uniform Commercial Code is superseded by Section 9 of this Agreement.  Notwithstanding the foregoing, the Transfer Agent’s aggregate liability during the Term of this Agreement with respect to, arising from or arising in connection with all claims under this Agreement arising during any calendar year for the Services provided by the Transfer Agent under this Agreement for all of the Funds subject to this Agreement, whether in contract, or in tort, or otherwise, is limited to, and shall not exceed, during any calendar year two times the aggregate of the amounts actually received hereunder by the Transfer Agent as fees and charges, but not including reimbursable expenses, for all of the Funds covered by this Agreement during the twelve (12) calendar months immediately preceding the first event for which recovery from the Transfer Agent is being sought.  For the avoidance of doubt, this liability cap shall renew annually.  The foregoing limitation on liability shall not apply to any loss or damage resulting from: (1) any intentional malicious acts or intentional malicious omissions, fraud, gross negligence, willful misconduct, or bad faith by the Transfer Agent’s or its employees or agents; or (2) breaches by Transfer Agent, or its employees or agents, of the privacy, confidentiality or information security provisions of this Agreement or similar/related requirements under Applicable Law; or (3) any regulatory or governmental investigation, fine or penalty based on any act or omission (or series of acts and omissions) of Transfer Agent, or its employees or agents, that constitute a breach of this Agreement or a violation of Applicable Law.  For purposes of this Section 8, intentional malicious acts or intentional malicious omissions shall mean those acts undertaken or omitted purposefully under the circumstances in which the person knows that such acts or omissions violate this Agreement and are likely to cause damage or harm to the Fund.

 

9. Fund Confidential Information

 

9.1All information provided under this Agreement by or on behalf of a party or its agents or service providers (the “Disclosing Party”) to the other party (the “Receiving Party”) regarding the Disclosing Party’s business and operations shall be treated as confidential (“Confidential Information”). Confidential Information shall include, without limitation, “Customer Information” as defined in Section 9.2 below. All Confidential Information provided under this Agreement by the Disclosing Party shall be used, including, without limitation, disclosure to third parties, by the Receiving Party, or its agents or service providers, solely for the purpose of performing or receiving the services and discharging the Receiving Party’s other obligations under the Agreement or managing the business of the Receiving Party and its Affiliates, including, without limitation, financial and operational management and reporting, risk management, legal and regulatory compliance and client service management. The foregoing shall not be applicable to any information (a) that is publicly available when provided or thereafter becomes publicly available, other than through a breach of this Agreement, (b) that is independently derived by the Receiving Party without the use of any information provided by the Disclosing Party in connection with this Agreement, (c) that is disclosed to comply with any legal or regulatory proceeding, investigation, audit, examination, subpoena, civil investigative demand or other similar process, (d) that is disclosed as required by operation of law or regulation; or (e) where the party seeking to disclose has received the prior written consent of the Disclosing Party providing the information. A Receiving Party shall protect Confidential Information of a Disclosing Party at least to the same degree as the Receiving Party protects its own Confidential Information. All Confidential Information provided by a Disclosing Party shall remain the property of such Disclosing Party. All Confidential Information, together with any copies thereof, in whatever form, shall, upon the Disclosing Party’s written request, be returned to Disclosing Party or destroyed, at the Receiving Party’s election; provided, that the Receiving Party shall be permitted to retain all or any portion of the Confidential Information, in accordance with the confidentiality obligations specified in this Agreement, to the extent required by Applicable Law or regulatory authority or to the extent required by the Receiving Party’s internal policies and in accordance with its customary practices for backup and storage.

 

9.2For purposes of this Agreement, “Customer Information” means all the customer identifying data however collected or received, including without limitation, through “cookies” or non-electronic means pertaining to or identifiable to the Fund’s Shareholders, prospective shareholders and plan administrators (collectively, “Fund Customers”), including without limitation, (i) name, address, email address, passwords, account numbers, personal financial information, personal preferences, demographic data, marketing data, data about securities transactions, credit data or any other identification data; (ii) any information that reflects the use of or interactions with a Fund service, including, without limitation, the Fund’s web site; or (iii) any data otherwise submitted in the process of registering for a Fund service. For the avoidance of doubt, Customer Information shall include, without limitation, all “nonpublic personal information,” as defined under the Gramm-Leach-Bliley Act of 1999 (Public Law 106-102, 113 Stat. 1138) (“GLB Act”) and all “personal information” as defined in the Massachusetts Standards for the Protection of Personal Information, 201 CMR 17.00, et seq., (“Mass Privacy Act”). This Agreement shall not be construed as granting the Transfer Agent any ownership rights in the Customer Information.

 

9.3Section 9.1 shall not restrict any disclosure required to be made by Applicable Law or regulation, or pursuant to any legal or regulatory proceeding, investigation, audit, examination, subpoena, civil investigative demand or other similar process, except that (i) in case of any requests or demands for the inspection of Confidential Information that arise from persons other than authorized officers of the Disclosing Party, the Receiving Party will (other than standard requests (i.e. divorce and criminal actions) pursuant to subpoenas of state or federal government authorities) promptly notify the Disclosing Party and secure instructions from an authorized officer of the Disclosing Party as to such inspection and (ii) the Receiving Party shall promptly notify an authorized officer of the Disclosing Party in writing of any and all legal actions received by or served on the Receiving Party with respect to the Disclosing Party, and shall use its best efforts to promptly notify the Disclosing Party of all contacts and/or correspondence received by the Receiving Party from any regulatory department or agency or other governmental authority purporting to regulate the Disclosing Party and not the Receiving Party, regarding the Receiving Party’s duties and activities performed in connection with this Agreement, and will cooperate with the Disclosing Party in responding to such legal actions, contacts and/or correspondence. With respect to the disclosure of Confidential Information pursuant to clause (c) of Section 9.1, the Fund and the Transfer Agent will agree on reasonable procedures regarding such required disclosure and the Receiving Party will make every reasonable effort (to the extent legally permitted) to notify the Disclosing Party of requests for such information by the Securities and Exchange Commission or any other federal or state regulatory agencies prior to the release of such records.

 

9.4Section 9.1 shall not restrict the Fund from sharing information received from the Transfer Agent pursuant to Section 11.5 of this Agreement regarding information security threats including, without limitation, virus, malware, Trojan horse, worm, time bomb, drop dead device, or other malicious code, with third parties for the purpose of evaluating and enhancing the Fund’s information security; provided that such third parties are subject to a written agreement with the Fund to keep any such information confidential.

 

9.5The Transfer Agent and the Fund acknowledge that their obligation to protect Confidential Information is essential to the business interest of the Fund and the Transfer Agent, respectively, and that the disclosure of such information in breach of this Agreement may cause the Fund or Transfer Agent immediate, substantial and irreparable harm, the value of which would be difficult to determine. Accordingly, the parties agree that, in addition to any other remedies that may be available in law, equity, or otherwise for the disclosure or use of Confidential Information in breach of this Agreement, the Disclosing Party shall be entitled to seek and obtain a temporary restraining order, injunctive relief, or other equitable relief against the continuance of such breach.

 

10. Information Security

 

10.1The Transfer Agent shall maintain reasonable safeguards for maintaining in confidence any and all Fund Confidential Information, including, without limitation, the policies and procedures described in Section 10.2. The Transfer Agent shall not, at any time, use any such Fund Confidential Information for any purpose other than as specifically authorized by this Agreement, or in writing by the Fund.

 

10.2 The Transfer Agent has implemented and maintains, and at a minimum agrees to comply with and continue to comply with, at each service location physical and information security and data protection safeguards against the destruction, loss, theft, unauthorized access, unauthorized use, or alteration of the Fund’s Confidential Information in the possession of the Transfer Agent that will be no less rigorous than those described in the Information Security Schedule attached hereto as Schedule 10.2, and from time to time enhanced in accordance with changes in regulatory requirements. The Transfer Agent will, at a minimum, update its policies to remain compliant with applicable regulatory requirements, including, without limitation, the GLB Act and the Mass Privacy Act. The Transfer Agent will meet with the Fund, at its request, on an annual basis to discuss information security safeguards. If the Transfer Agent or its agents discover or are notified that someone has violated security relating to the Fund’s Confidential Information the Transfer Agent will promptly (a) notify the Fund of such violation, and (b) if the applicable Confidential Information was in the possession or under the control of the Transfer Agent or its agents at the time of such violation, the Transfer Agent will promptly (i) investigate, contain and address the violation, (ii) provide the Funds with information on the steps being taken to reduce the risk of a reoccurrence of such violation, and (iii) without limiting (and subject to) Sections 7 and 8 of this Agreement, if requested by the Fund based on the facts and circumstances of the incident, provide credit monitoring, or other similar services or remedies as required by applicable law, for a one-year period (or such shorter or longer period required by applicable law) to Shareholders or others affected by the violation. .

 

11. Covenants of the Fund and the Transfer Agent

 

11.1The Transfer Agent shall keep records relating to the services to be performed hereunder, in the form and manner as it may deem advisable. To the extent required by Section 31 of the 1940 Act, the Transfer Agent agrees that all such records prepared or maintained by the Transfer Agent relating to the services to be performed by the Transfer Agent hereunder are the property of the Fund and will be preserved, maintained and made available in accordance with the Act, and will be surrendered promptly to the Fund on and in accordance with its request. For the avoidance of doubt, the preceding sentence shall apply to the Collective Trusts as if they were 1940 Act registered funds.

 

11.2The Transfer Agent maintains, and covenants that during the Term hereof it shall continue to maintain, fidelity bond coverage concerning larceny and embezzlement and an insurance policy with respect to errors and omissions coverage in such amounts, and with such carriers, deemed appropriate and commercially reasonable in terms of coverage and policy limits by the Transfer Agent’s Board of Directors in light of the Transfer Agent’s duties and responsibilities hereunder. Upon the request of the Funds, the Transfer Agent shall provide evidence that such coverage is in place. The Transfer Agent shall, promptly upon the receipt of any such notice by any applicable carrier, notify the Fund should its insurance coverage with respect to professional liability or errors and omissions coverage be canceled. Such notification shall include the date of cancellation and the reasons therefor.

 

11.3Business Continuity. Notwithstanding anything to the contrary contained in Section 16.3, the Transfer Agent shall maintain at a location other than its normal location appropriate redundant facilities for operational back up in the event of a power failure, disaster or other interruption. The Transfer Agent shall continuously back up Fund records, and shall store the back up in a secure manner at a location other than its normal location, so that, in the event of a power failure, disaster or other interruption at such normal location, the Fund records, will be maintained intact and will enable the Transfer Agent to perform under this Agreement. The Transfer Agent will maintain a comprehensive business continuity plan and will provide an executive summary of such plan upon reasonable request of the Fund. Without limiting the foregoing, the Transfer Agent will test the adequacy of its business continuity plan at least annually and upon request, the Fund may participate in such test. Upon request by the Fund, the Transfer Agent will provide the Fund with a letter assessing the most recent business continuity test results. In the event of a business disruption that materially impacts the Transfer Agent’s provision of services under this Agreement, the Transfer Agent will promptly notify the Fund of the disruption and the steps being implemented under the business continuity plan. Upon reasonable request, Transfer Agent also shall discuss with senior management of the Fund (or personnel authorized by the Fund’s senior management) the business continuity/disaster recovery plan of Transfer Agent and/or provide a high level presentation summarizing such plan.

 

11.4The Transfer Agent shall provide the Fund, at such times as the Fund may reasonably require, (i) copies of reports rendered by independent public accountants on the internal controls and procedures of the Transfer Agent relating to the Services provided by the Transfer Agent under this Agreement, (ii) access to the procedures used to perform the testing described in such reports and (iii) access to the audit teams preparing any such reports or performing any such testing.

 

11.5Data Privacy. The Transfer Agent agrees to promptly notify the Fund whenever it becomes aware of any actual unauthorized access to, or acquisition, use, loss, destruction, alteration or compromise of Confidential Information (including, without limitation, Customer Information) of the Fund (“Security Breach”) maintained on Transfer Agent’s computers, hardware, networks or systems, including any third party data centers, or of any Security Breach occurring at any sub-custodian, agent or service provider of the Transfer Agent. The Transfer Agent also agrees to implement commercially reasonable software and other appropriate measures to scan for, detect and prevent the transmission from Transfer Agent’s computers, hardware, networks and systems of any virus, malware, Trojan horse, worm, time bomb, drop dead device, or other malicious code.

 

12. Termination of Agreement

 

12.1Term. The initial term of this Agreement shall be five (5) years from the date first noted above (the “Initial Term”) unless terminated pursuant to the provisions of this Section 12. Unless a party gives written notice to the other party ninety (90) days before the expiration of the Initial Term or any Renewal Term, this Agreement will renew automatically from year to year (each such year-to-year renewal term a “Renewal Term”; collectively, the Initial Term and any Renewal Term shall hereafter be referred to as the “Term”). One-hundred twenty (120) days before the expiration of the Initial Term or a Renewal Term the parties to this Agreement will agree upon the Fee Schedule for the upcoming Renewal Term. Otherwise, the fees shall be increased pursuant to Section 3.4 of this Agreement. Notwithstanding the termination or non-renewal of this Agreement, the terms and conditions of this Agreement shall continue to apply until the completion of Deconversion (defined below).

 

12.2Deconversion. In the event that this Agreement is terminated or not renewed, the Transfer Agent agrees that, in order to provide for uninterrupted service to the Fund, the Transfer Agent shall, at the Fund’s request, offer reasonable assistance to the Fund in converting, within a reasonable time frame agreed to by the parties, the Fund’s records from the Transfer Agent’s systems to whatever services or systems are designated by the Fund (the “Deconversion”) (subject to the recompense of the Transfer Agent for such assistance at their standard rates and fees in effect at the time). As used herein “reasonable assistance” and “transitional assistance” shall not include requiring the Transfer Agent (i) to assist any new service or system provider to modify, to alter, to enhance, or to improve such provider’s system, or to provide any new functionality to such provider’s system, (ii) to disclose any protected information of the Transfer Agent, except to the extent necessary to effectuate such Deconversion and then, only pursuant to a written confidentiality agreement executed between the Transfer Agent and the new service provider, or (iii) to develop Deconversion software, to modify any of the Transfer Agent’s software, or to otherwise alter the format of the data as maintained on any provider’s systems.

 

12.3Early Termination. Notwithstanding anything contained in this Agreement to the contrary, should the Fund desire to move any of its services provided by the Transfer Agent hereunder to a successor service provider prior to the expiration of the Initial Term or then current Renewal Term, the Transfer Agent shall make a good faith effort to facilitate the conversion on such prior date; provided, however that, except for a transfer following a termination pursuant to Sections 12.5 or 12.6, there can be no guarantee or assurance that the Transfer Agent will be able to facilitate a conversion of services on such prior date. In connection with the foregoing, should services be converted to a successor service provider, other than following a termination pursuant to Sections 12.5 or 12.6, or if the Fund’s assets are merged or purchased or the like with or by another entity that does not utilize the services of the Transfer Agent, then the Fund will pay to the Transfer Agent an amount equal to the average monthly fee paid by the Fund to the Transfer Agent under the Agreement multiplied by the number of months remaining in the Initial or Renewal Term. The payment of all fees owing to the Transfer Agent under this Section 12.3 and all fees, charges and expenses for services provided that have accrued and remain unpaid, and all Deconversion costs under Section 12.2 shall be paid on or before the business day immediately prior to the conversion or termination of services.

 

12.4Unpaid Invoices. The Transfer Agent may terminate this Agreement thirty (30) days after notice to the Fund and its administrator that an invoice has remained outstanding for more than sixty (60) days, except with respect to any amount subject to a good faith dispute within the meaning of Section 3.3 of this Agreement.

 

12.5Bankruptcy. This Agreement shall terminate, (a) by notice by the notifying party in the event that the other party ceases to carry on its business or (b) immediately, without further action by a party, in the event that an action is commenced by or against the other party under Title 11 of the United States Code or a receiver, conservator or similar officer is appointed for the other party and such suit, conservatorship or receivership is not discharged within thirty (30) days.

 

12.6Cause. If either of the parties hereto is in default in the performance of its duties or obligations hereunder, and such default has a material effect on the other party, then the non-defaulting party may give notice to the defaulting party specifying the nature of the default in sufficient detail to permit the defaulting party to identify and cure such default. If the defaulting party fails to cure such default within sixty (60) days of receipt of such notice, or within such longer period of time as the parties may agree is necessary for such cure, then the non-defaulting party may terminate this Agreement by giving, within ninety (90) days of the date on which such right of termination commenced, one hundred and twenty (120) days written notice to the defaulting party.

 

12.7Confidential Information. Upon termination of this Agreement, each party shall return to the other party all copies of Confidential Information or proprietary materials or information received from such other party hereunder or shall, upon request of the Fund, destroy or render unrecoverable Confidential Information or proprietary materials or information received (and certify to its destruction or unrecoverable status), other than materials or information required to be retained by such party under Applicable Law or regulation.

 

13. Use of Data

 

13.1In connection with the provision of the services and the discharge of its other obligations under this Agreement, the Transfer Agent (which term for purposes of this Section includes Boston Financial) may collect and store information regarding the Fund and share such Confidential Information with its Affiliates, agents and service providers in order and to the extent reasonably necessary (i) to carry out the provision of services contemplated under this Agreement and other agreements between the Fund and the Transfer Agent or any of its Affiliates and (ii) to carry out management of its businesses, including, but not limited to, financial and operational management and reporting, risk management, legal and regulatory compliance and client service management.

 

13.2Except as expressly contemplated by this Agreement, nothing in this Section 13 shall limit the confidentiality and data-protection obligations of the Transfer Agent and its Affiliates under this Agreement and Applicable Law. The Transfer Agent shall cause any Affiliate, agent or service provider to which it has disclosed data pursuant to this Section 13 to comply at all times with confidentiality and data-protection obligations as if it were a party to this Agreement.

 

14. Assignment and Third Party Beneficiaries

 

14.1Except as provided in Section 15.1 below, neither this Agreement nor any rights or obligations hereunder may be assigned or subcontracted by either party without the written consent of the other party. Any attempt to do so in violation of this Section shall be void. Unless specifically stated to the contrary in any written consent to an assignment, no assignment will release or discharge the assignor from any duty or responsibility under this Agreement.

 

14.2Except as explicitly stated elsewhere in this Agreement, nothing under this Agreement shall be construed to give any rights or benefits in this Agreement to anyone other than the Transfer Agent and the Fund, and the duties and responsibilities undertaken pursuant to this Agreement shall be for the sole and exclusive benefit of the Transfer Agent and the Fund. This Agreement shall inure to the benefit of and be binding upon the parties and their respective permitted successors and assigns.

 

14.3This Agreement does not constitute an agreement for a partnership or joint venture between the Transfer Agent and the Fund. Other than as provided in Section 14.1, neither party shall make any commitments with third parties that are binding on the other party without the other party’s prior written consent.

 

15. Subcontractors

 

15.1The Transfer Agent may, without further consent on the part of the Fund, subcontract for the performance hereof with (i) Boston Financial Data Services, Inc. (“Boston Financial”); provided, however, that the Transfer Agent shall be fully responsible to the Fund for the acts and omissions of Boston Financial as it is for its own acts and omissions. Except with respect to computer programming, software engineering, development and testing, all other services so subcontracted will be performed by Boston Financial within the borders of the United States, unless otherwise specifically agreed to in writing. In connection with any services performed outside of the United States in accordance with this Section, the Transfer Agent shall require such subcontractor to comply with all laws applicable to the performance of such services and functions outside of the United States, including applicable export and data privacy/processing laws and regulations.
15.2Nothing herein shall impose any duty upon the Transfer Agent in connection with or make the Transfer Agent liable for the actions or omissions to act of unaffiliated third parties such as by way of example and not limitation, airborne services, Federal Express, United Parcel Service, the United States Postal Service, print/mail vendors, the NSCC and telecommunication companies, provided, if the Transfer Agent selected such company, the Transfer Agent shall have exercised due care in selecting the same.

 

16. Miscellaneous

 

16.1 Amendment. This Agreement may be amended or modified by a written agreement executed by all parties hereto.

 

16.2Massachusetts Law to Apply. This Agreement shall be construed and the provisions thereof interpreted under and in accordance with the laws of The Commonwealth of Massachusetts.

 

16.3Force Majeure. In the event either party is unable to perform its obligations under the terms of this Agreement because of acts of God, acts of war or terrorism, strikes, equipment or transmission failure or damage reasonably beyond its control, or other causes reasonably beyond its control, such party shall not be liable for damages to the other for any damages resulting from such failure to perform or otherwise from such causes; provided, however, that nothing in this Section 16.3 shall be deemed to relieve Transfer Agent of its obligations under Section 11.3.

 

16.4 Consequential Damages. Neither party to this Agreement shall be liable to the other party for special, indirect or consequential damages under any provision of this Agreement or for any special, indirect or consequential damages arising out of any act or failure to act hereunder.

 

16.5 Survival. All provisions regarding indemnification, warranty, liability, and limits thereon, and confidentiality and/or protections of proprietary rights and trade secrets shall survive the termination of this Agreement.

 

16.6 Severability. If any provision or provisions of this Agreement shall be held invalid, unlawful, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired.

 

16.7 Priorities Clause. In the event of any conflict, discrepancy or ambiguity between the terms and conditions contained in this Agreement and any schedules or attachments hereto, the terms and conditions contained in this Agreement shall take precedence.

 

16.8 Waiver. No waiver by either party or any breach or default of any of the covenants or conditions herein contained and performed by the other party shall be construed as a waiver of any succeeding breach of the same or of any other covenant or condition.

 

16.9 Merger of Agreement. This Agreement constitutes the entire agreement between the parties hereto and supersedes any prior agreement with respect to the subject matter hereof whether oral or written.

 

16.10 Counterparts. This Agreement may be executed by the parties hereto on any number of counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

 

16.11 Reproduction of Documents. This Agreement and all schedules, exhibits, attachments and amendments hereto may be reproduced by any photographic, photostatic, microfilm, micro-card, miniature photographic or other similar process. The parties hereto each agree that any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding, whether or not the original is in existence and whether or not such reproduction was made by a party in the regular course of business, and that any enlargement, facsimile or further reproduction shall likewise be admissible in evidence.

 

16.12 Notices. All notices and other communications as required or permitted hereunder shall be in writing and sent by first class mail, postage prepaid, addressed as follows or to such other address or addresses of which the respective party shall have notified the other.

(a)       If to the Transfer Agent, to:

State Street Bank and Trust Company

1 Lincoln Street

Boston, MA 02111

Attention: Legal Department

 

With a copy to:

State Street Bank and Trust Company

c/o Boston Financial Data Services, Inc.

2000 Crown Colony Drive

Quincy, MA 02169

Attention: Legal Department

 

(b)       If to the Fund, to:

[Name of Fund]

1001 Liberty Avenue

Pittsburgh, Pennsylvania 15237 Attention: President

With a copy to:

Federated Investors, Inc.

1001 Liberty Avenue

Pittsburgh, Pennsylvania 15222

Attention: General Counsel

17. Additional Funds

In the event that the Fund establishes one or more series of Shares, in addition to those listed on the attached Exhibit A, with respect to which it desires to have the Transfer Agent render services as transfer agent under the terms hereof, it shall so notify the Transfer Agent in writing, and if the Transfer Agent agrees in writing to provide such services, such series of Shares shall become a Portfolio hereunder.

18. Limitation of Liability of Trustees and Shareholders of the Fund

The execution and delivery of this Agreement have been authorized by the Board of the Fund and signed by an authorized officer of such Fund, acting as such, and neither such authorization by the Board nor the 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 members of the Board of the Fund, but bind only the property of the Fund as provided in, as applicable, the Fund’s articles of incorporation or declaration of trust.

 

[Remainder of page intentionally left blank]

 
 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in their names and on their behalf by and through their duly authorized officers, as of the day and year first above written.

 

 

 

STATE STREET BANK AND TRUST COMPANY   BY EACH OF THE FEDERATED FUNDS SET FORTH ON EXHIBIT A (OTHER THAN COLLECTIVE TRUSTS), SEVERALLY AND NOT JOINTLY
   
By: /s/ Andrew Erickson   By: /s/Peter J. Germain
     
Name: Andrew Erickson   Name: Peter J. Germain
     
Title: Executive Vice President   Title: Chief Legal Officer

 

 

 

BY EACH OF THE FUNDS THAT ARE COLLECTIVE TRUSTS, SEVERALLY AND NOT JOINTLY

 

By: Federated Investors Trust Company,
as Trustee

By: /s/ Edward C. Bartley

 

Name: Edward C. Bartley

 

Title: Secretary

 

 

 

 

 

 

 

 

 

 

 
 

 

  T Shares codes will be added when they all become offered.  
Exhibit A
FUNDS
January 2, 2020		    
DATE:                   added to the contract. REGISTRANT NAME SERIES NAME (If applicable) Transfer Agent Fund Number Class
7/1/2004 Federated Adjustable Rate Securities      
    FEDERATED ADJUSTABLE RATE SECS 96 SS
    FEDERATED ADJUSTABLE RATE SECS 325 IS
8/31/2017 Federated Adviser Series      
    FEDERATED EMERGING MARKKETS EQUITY FUND 813 IS
    FEDERATED HERMES GLOBAL EQUITY FUND 934 IS
    FEDERATED HERMES GLOBAL SMALL CAP FUND 939 IS
    FEDERATED HERMES INTERNATIONAL EQUITY FUND 443 IS
    FEDERATED HERMES SDG ENGAGEMENT EQUITY FUND 431 A
    FEDERATED HERMES SDG ENGAGEMENT EQUITY 441 IS
    FEDERATED HERMES SDG ENGAGEMENT HY CREDIT FUND 669 IS
    FEDERATED INTERNATIONAL EQUITY FUND 713 A
    FEDERATED INTERNATIONAL EQUITY FUND 714 C
    FEDERATED INTERNATIONAL EQUITY FUND 717 IS
    FEDERATED INTERNATIONAL EQUITY FUND 718 R6
    FEDERATED INTERNATIONAL GROWTH FUND 728 IS
    FEDERATED MDT LARGE CAP VALUE FUND 426 IS
    FEDERATED MDT LARGE CAP VALUE FUND 428 SS
    FEDERATED MDT LARGE CAP VALUE FUND 429 R6
    FEDERATED MDT LARGE CAP VALUE FUND 419 A
    FEDERATED MDT LARGE CAP VALUE FUND 420 B
    FEDERATED MDT LARGE CAP VALUE FUND 422 C
    FEDERATED MDT LARGE CAP VALUE FUND 425 R
         
         
  Federated Core Trust:      
3/21/2016   EMERGING MARKETS CORE FUND 812  
8/16/2010   FEDERATED BANK LOAN CORE FUND 850  
7/1/2004   FEDERATED MORTGAGE CORE PORT 938  
7/1/2004   HIGH-YIELD BOND PORTFOLIO 871  
  Federated Core Trust III:      
3/1/2008   FEDERATED PROJECT AND TRADE FINANCE CORE FUND 148  
         
  Federated Equity Funds:      
12/1/2008   FEDERATED CLOVER SMALL VALUE FUND 639 A
    FEDERATED CLOVER SMALL VALUE FUND 658 C
    FEDERATED CLOVER SMALL VALUE FUND 659 IS
    FEDERATED CLOVER SMALL VALUE FUND 670 R
    FEDERATED CLOVER SMALL VALUE FUND 539 R6
12/1/2008   FEDERATED GLOBAL STRATEGIC VALUE DIV 436 C
    FEDERATED GLOBAL STRATEGIC VALUE DIV 437 IS
    FEDERATED GLOBAL STRATEGIC VALUE DIV 438 R6
    FEDERATED GLOBAL STRATEGIC VALUE DIV 435 A
3/1/2008   FEDERATED INTL STRATEGIC VAL DIV FUND 432 A
    FEDERATED INTL STRATEGIC VAL DIV FUND 433 C
    FEDERATED INTL STRATEGIC VAL DIV FUND 434 IS
    FEDERATED INTL STRATEGIC VAL DIV FUND 466 R6
7/1/2004   FEDERATED KAUFMANN FUND 66 A
    FEDERATED KAUFMANN FUND 67 B
    FEDERATED KAUFMANN FUND 70 C
    FEDERATED KAUFMANN FUND 74 R
    FEDERATED KAUFMANN FUND 123 IS
9/17/2007   FEDERATED KAUFMANN LARGE CAP FUND 352 A
    FEDERATED KAUFMANN LARGE CAP FUND 353 C
    FEDERATED KAUFMANN LARGE CAP FUND 355 IS
    FEDERATED KAUFMANN LARGE CAP FUND 354 R
    FEDERATED KAUFMANN LARGE CAP FUND 401 R6
7/1/2004   FEDERATED KAUFMANN SMALL CAP FUND 163 IS
    FEDERATED KAUFMANN SMALL CAP FUND 146 R6
    FEDERATED KAUFMANN SMALL CAP FUND 757 A
    FEDERATED KAUFMANN SMALL CAP FUND 758 B
    FEDERATED KAUFMANN SMALL CAP FUND 759 C
    FEDERATED KAUFMANN SMALL CAP FUND 154 R
7/1/2004   FEDERATED MDT MID CAP GROWTH FUND 677 A
    FEDERATED MDT MID CAP GROWTH FUND 650 C
    FEDERATED MDT MID CAP GROWTH FUND 656 IS
    FEDERATED MDT MID CAP GROWTH FUND 679 R6
9/1/2008   FEDERATED PRUDENT BEAR FUND 409 A
    FEDERATED PRUDENT BEAR FUND 415 C
    FEDERATED PRUDENT BEAR FUND 418 IS
12/1/2004   FEDERATED STRATEGIC VALUE DIVIDEND 661 A
    FEDERATED STRATEGIC VALUE DIVIDEND 663 C
    FEDERATED STRATEGIC VALUE DIVIDEND 662 IS
    FEDERATED STRATEGIC VALUE DIVIDEND 251 R6
7/1/2004 Federated Equity Income Fund Inc.      
    FEDERATED EQUITY INCOME FUND 34 R
    FEDERATED EQUITY INCOME FUND 629 B
    FEDERATED EQUITY INCOME FUND 241 C
    FEDERATED EQUITY INCOME FUND 326 A
    FEDERATED EQUITY INCOME FUND 849 IS
    FEDERATED EQUITY INCOME FUND 304 F
  Federated Fixed Income Securities, Inc.:      
7/1/2004   FEDERATED MUNI ULTRASHORT FUND 253 IS
    FEDERATED MUNI ULTRASHORT FUND 254 A
    FEDERATED MUNI ULTRASHORT FUND 230 R6
7/1/2004   FEDERATED STRATEGIC INCOME FUND 652 B
    FEDERATED STRATEGIC INCOME FUND 382 C
    FEDERATED STRATEGIC INCOME FUND 383 F
    FEDERATED STRATEGIC INCOME FUND 381 A
    FEDERATED STRATEGIC INCOME FUND 414 R6
    FEDERATED STRATEGIC INCOME FUND 653 IS
6/1/2008 Federated Global Allocation Fund      
    FEDERATED GLOBAL ALLOCATION FUND 373 B
    FEDERATED GLOBAL ALLOCATION FUND 608 C
    FEDERATED GLOBAL ALLOCATION FUND 894 R
    FEDERATED GLOBAL ALLOCATION FUND 232 R6
    FEDERATED GLOBAL ALLOCATION FUND 11 A
    FEDERATED GLOBAL ALLOCATION FUND 879 IS
7/1/2004 Federated Government Income Securities, Inc.      
    FEDERATED GOV INCOME SECURITIES 166 A
    FEDERATED GOV INCOME SECURITIES 171 C
    FEDERATED GOV INCOME SECURITIES 21 F
7/1/2004 Federated Government Income Trust      
    FEDERATED GOVERNMENT INCOME TRUST 36 IS
    FEDERATED GOVERNMENT INCOME TRUST 102 SS
         
7/1/2004 Federated High Income Bond Fund, Inc.      
    FEDERATED HIGH INCOME BOND FUND 630 B
    FEDERATED HIGH INCOME BOND FUND 492 R6
    FEDERATED HIGH INCOME BOND FUND 242 C
    FEDERATED HIGH INCOME BOND FUND 317 A
    FEDERATED HIGH INCOME BOND FUND 491 IS
7/1/2004 Federated High Yield Trust:      
    FEDERATED HIGH YIELD TRUST 77 IS
    FEDERATED HIGH YIELD TRUST 113 A
    FEDERATED HIGH YIELD TRUST 120 C
    FEDERATED HIGH YIELD TRUST 430 R6
    FEDERATED HIGH YIELD TRUST 38 SS
12/1/2015   FEDERATED EQUITY ADVANTAGE FUND 121 A
    FEDERATED EQUITY ADVANTAGE FUND 122 IS
  Federated Income Securities Trust:      
7/1/2004   FEDERATED CAPITAL INCOME FUND 312 A
    FEDERATED CAPITAL INCOME FUND 631 B
    FEDERATED CAPITAL INCOME FUND 244 C
    FEDERATED CAPITAL INCOME FUND 374 F
    FEDERATED CAPITAL INCOME FUND 300 R
    FEDERATED CAPITAL INCOME FUND 830 IS
9/1/2004   FEDERATED FLTG RATE STR INCOME FUND 701 R6
    FEDERATED FLTG RATE STR INCOME FUND 693 IS
    FEDERATED FLTG RATE STR INCOME FUND 112 C
    FEDERATED FLTG RATE STR INCOME FUND 687 A
7/1/2004   FEDERATED FUND U.S. GOV SECURITIES 601 B
    FEDERATED FUND U.S. GOV SECURITIES 238 C
    FEDERATED FUND U.S. GOV SECURITIES 309 A
7/1/2004   FEDERATED INTERM CORP BOND FUND 303 IS
    FEDERATED INTERM CORP BOND FUND 348 SS
7/1/2004   FEDERATED MUNI & STOCK ADVT FUND 888 B
    FEDERATED MUNI & STOCK ADVT FUND 887 A
    FEDERATED MUNI & STOCK ADVT FUND 889 C
    FEDERATED MUNI & STOCK ADVT FUND 901 F
    FEDERATED MUNI & STOCK ADVT FUND 876 IS
12/1/2005   FEDERATED REAL RETURN BOND FUND 183 A
    FEDERATED REAL RETURN BOND FUND 184 C
    FEDERATED REAL RETURN BOND FUND 185 IS
7/18/2004   FEDERATED SHORT-TERM INCOME FUND 292 R6
    FEDERATED SHORT-TERM INCOME FUND 65 IS
    FEDERATED SHORT-TERM INCOME FUND 638 Y
    FEDERATED SHORT-TERM INCOME FUND 607 A
  Federated Index Trust:      
7/1/2004   FEDERATED MAX-CAP INDEX FUND 39 IS
    FEDERATED MAX-CAP INDEX FUND 895 R
    FEDERATED MAX-CAP INDEX FUND 281 SS
    FEDERATED MAX-CAP INDEX FUND 867 C
7/1/2004   FEDERATED MID-CAP INDEX FUND 156 R6
    FEDERATED MID-CAP INDEX FUND 153 IS
    FEDERATED MID-CAP INDEX FUND 151 SS
  Federated Institutional Trust      
7/1/2004   FEDERATED GOV ULTRASHORT DUR FUND 969 SS
    FEDERATED GOV ULTRASHORT DUR FUND 891 A
    FEDERATED GOV ULTRASHORT DUR FUND 840 R6
    FEDERATED GOV ULTRASHORT DUR FUND 626 IS
7/1/2004   FEDERATED INSTL HIGH YIELD BOND FUND 900 IS
    FEDERATED INSTL HIGH YIELD BOND FUND 221 R6
6/1/2005   FEDERATED SH-INT TOTAL RETURN BOND 114 A
    FEDERATED SH-INT TOTAL RETURN BOND 63 IS
    FEDERATED SH-INT TOTAL RETURN BOND 107 SS
    FEDERATED SH-INT TOTAL RETURN BOND 127 R6
  Federated Insurance Series      
7/1/2004   FEDERATED MANAGED VOLATILITY FUND II 333 A
    FEDERATED MANAGED VOLATILITY FUND II 403 C
    FEDERATED FUND U.S. GOV SECURITIES II 334 IS
7/1/2004   FEDERATED HIGH INCOME BOND II 250 S
    FEDERATED HIGH INCOME BOND II 336 P
7/1/2004   FEDERATED KAUFMANN FUND II 953 P
    FEDERATED KAUFMANN FUND II 957 S
7/1/2004   FEDERATED GOVERNMENT MONEY FUND II 330 S
    FEDERATED GOVERNMENT MONEY FUND II 402 P
7/1/2004   FEDERATED QUALITY BOND II 921 P
    FEDERATED QUALITY BOND II 929 S
  Federated International Series, Inc.:      
7/1/2004   FEDERATED GLOBAL TOTAL RETURN BOND FD 152 IS
    FEDERATED GLOBAL TOTAL RETURN BOND FD 240 C
    FEDERATED GLOBAL TOTAL RETURN BOND FD 316 A
  Federated Investment Series Funds, Inc.:      
    FEDERATED BOND FUND 641 A
    FEDERATED BOND FUND 642 B
    FEDERATED BOND FUND 643 C
    FEDERATED BOND FUND 655 IS
    FEDERATED BOND FUND 671 R6
    FEDERATED BOND FUND 198 F
  Federated Managed Pool Series:      
12/1/2005   FEDERATED CORPORATE BOND STRATEGY PORTFOLIO 157  
12/1/2005   FEDERATED HIGH-YIELD STRATEGY PORTFOLIO 744  
12/1/2005   FEDERATED INTL BOND STRATEGY PORT 742  
12/1/2014   FEDERATED INTERNATIONAL DIV STRATEGY 569  
12/1/2005   FEDERATED MORTGAGE STRATEGY PORT 743  
  Federated MDT Series:      
7/31/2006   FEDERATED MDT ALL CAP CORE FUND 210 A
    FEDERATED MDT ALL CAP CORE FUND 224 C
    FEDERATED MDT ALL CAP CORE FUND 226 IS
    FEDERATED MDT ALL CAP CORE FUND 233 R6
7/31/2006   FEDERATED MDT BALANCED FUND 285 A
    FEDERATED MDT BALANCED FUND 296 C
    FEDERATED MDT BALANCED FUND 297 IS
    FEDERATED MDT BALANCED FUND 314 R6
7/31/2006   FEDERATED MDT LARGE CAP GROWTH FUND 265 A
    FEDERATED MDT LARGE CAP GROWTH FUND 271 B
    FEDERATED MDT LARGE CAP GROWTH FUND 267 C
    FEDERATED MDT LARGE CAP GROWTH FUND 269 IS
7/31/2006   FEDERATED MDT SMALL CAP CORE FUND 237 A
    FEDERATED MDT SMALL CAP CORE FUND 245 C
    FEDERATED MDT SMALL CAP CORE FUND 255 IS
    FEDERATED MDT SMALL CAP CORE FUND 223 R6
7/31/2006   FEDERATED MDT SMALL CAP GROWTH FUND 282 A
    FEDERATED MDT SMALL CAP GROWTH FUND 283 C
    FEDERATED MDT SMALL CAP GROWTH FUND 284 IS
    FEDERATED MDT SMALL CAP GROWTH FUND 231 R6
  Federated Municipal Bond Fund, Inc:      
    FEDERATED MUNICIPAL BOND FUND INC. 141 IS
    FEDERATED MUNICIPAL BOND FUND INC. 375 F
    FEDERATED MUNICIPAL BOND FUND INC. 602 B
    FEDERATED MUNICIPAL BOND FUND INC. 243 C
    FEDERATED MUNICIPAL BOND FUND INC. 384 A
  Federated Municipal Securities Income Trust:      
7/1/2004   FEDERATED MICHIGAN INTERM MUNICIPAL TRUST 145 A
6/1/2006   FEDERATED MUNI HIGH YIELD ADVT FUND 310 F
    FEDERATED MUNI HIGH YIELD ADVT FUND 214 C
    FEDERATED MUNI HIGH YIELD ADVT FUND 167 A
    FEDERATED MUNI HIGH YIELD ADVT FUND 170 B
    FEDERATED MUNI HIGH YIELD ADVT FUND 380 IS
    FEDERATED OHIO MUNI INCOME 164 A
    FEDERATED OHIO MUNI INCOME 313 F
7/1/2004   FEDERATED PENNSYLVANIA MUNI INCOME 311 A
7/1/2004 Federated Short-Intermediate Duration Municipal Trust      
    FEDERATED SH-INT DUR MUNI TRUST 291 A
    FEDERATED SH-INT DUR MUNI TRUST 24 IS
    FEDERATED SH-INT DUR MUNI TRUST 289 SS
7/1/2004 Federated Total Return Government Bond Fund      
    FEDERATED TOTAL RETURN GOVT BOND FUND 234 R6
    FEDERATED TOTAL RETURN GOVT BOND FUND 648 SS
    FEDERATED TOTAL RETURN GOVT BOND FUND 647 IS
         
  Federated Total Return Series, Inc.:      
7/1/2004   FEDERATED SELECT TOTAL RETURN BOND FUND 835 IS
    FEDERATED SELECT TOTAL RETURN BOND FUND 837 SS
7/1/2004   FEDERATED TOTAL RETURN BOND FUND 328 IS
    FEDERATED TOTAL RETURN BOND FUND 288 SS
    FEDERATED TOTAL RETURN BOND FUND 893 R
    FEDERATED TOTAL RETURN BOND FUND 225 R6
    FEDERATED TOTAL RETURN BOND FUND 404 A
    FEDERATED TOTAL RETURN BOND FUND 405 B
    FEDERATED TOTAL RETURN BOND FUND 406 C
7/1/2004   FEDERATED ULTRASHORT BOND FUND 218 A
    FEDERATED ULTRASHORT BOND FUND 838 SS
    FEDERATED ULTRASHORT BOND FUND 108 IS
    FEDERATED ULTRASHORT BOND FUND 344 R6
7/1/2004 Federated U.S. Government Securities Fund: 1-3 Years:      
    FEDERATED U.S. GOV SECS 1-3 100 SS
    FEDERATED U.S. GOV SECS 1-3 79 Y
    FEDERATED U.S. GOV SECS 1-3 9 IS
7/1/2004 Federated U.S. Government Securities Fund: 2-5 Years: FEDERATED U.S. GOV SECS 2-5 192 SS
    FEDERATED U.S. GOV SECS 2-5 896 R
    FEDERATED U.S. GOV SECS 2-5 47 IS
  Federated World Investment Series, Inc.:      
7/1/2004   FEDERATED EMERGING MARKET DEBT FUND 831 IS
    FEDERATED EMERGING MARKET DEBT FUND 609 A
    FEDERATED EMERGING MARKET DEBT FUND 611 C
7/1/2004   FEDERATED INTERNATIONAL LEADERS FUND 103 A
    FEDERATED INTERNATIONAL LEADERS FUND 104 B
    FEDERATED INTERNATIONAL LEADERS FUND 105 C
    FEDERATED INTERNATIONAL LEADERS FUND 119 IS
    FEDERATED INTERNATIONAL LEADERS FUND 106 R
    FEDERATED INTERNATIONAL LEADERS FUND 110 R6
7/1/2004   FEDERATED INTL SMALL-MID COMPANY FUND 695 A
    FEDERATED INTL SMALL-MID COMPANY FUND 697 C
    FEDERATED INTL SMALL-MID COMPANY FUND 682 IS
7/1/2004 Intermediate Municipal Trust      
    FEDERATED INTERM MUNI TRUST 78 SS
    FEDERATED INTERM MUNI TRUST 739 IS
  Money Market Obligations Trust:      
7/1/2004   FEDERATED CALIFORNIA MUNI CASH TRUST 80 SS
    FEDERATED CALIFORNIA MUNI CASH TRUST 800 WS
    FEDERATED CALIFORNIA MUNI CASH TRUST 280 CII
    FEDERATED CALIFORNIA MUNI CASH TRUST 809 CAP
    FEDERATED CALIFORNIA MUNI CASH TRUST 810 CS
12/1/2004   FEDERATED CAPITAL RESERVES FUND 806  
7/1/2004   FEDERATED GEORGIA MUNICIPAL CASH TRUST 651  
7/1/2004   FEDERATED GOVERNMENT OBLIGATIONS FUND 386 CS
    FEDERATED GOVERNMENT OBLIGATIONS FUND 385 CII
    FEDERATED GOVERNMENT OBLIGATIONS FUND 805 CAP
    FEDERATED GOVERNMENT OBLIGATIONS FUND 158 ADM
    FEDERATED GOVERNMENT OBLIGATIONS FUND 117 PRM
    FEDERATED GOVERNMENT OBLIGATIONS FUND 5 IS
    FEDERATED GOVERNMENT OBLIGATIONS FUND 703 TR
    FEDERATED GOVERNMENT OBLIGATIONS FUND 395 SS
    FEDERATED GOVERNMENT OBLIGATIONS FUND 7 R
    FEDERATED GOVERNMENT OBLIGATIONS FUND 484 AVR
7/1/2004   FEDERATED GOVT OBLIGATIONS TAX-MGD FD 613 AS
    FEDERATED GOVT OBLIGATIONS TAX-MGD FD 636 IS
    FEDERATED GOVT OBLIGATIONS TAX-MGD FD 637 SS
12/1/2004   FEDERATED GOVERNMENT RESERVES FUND 970 A
    FEDERATED GOVERNMENT RESERVES FUND 971 B
    FEDERATED GOVERNMENT RESERVES FUND 972 C
    FEDERATED GOVERNMENT RESERVES FUND 807 P
    FEDERATED GOVERNMENT RESERVES FUND 973 F
7/1/2004   FEDERATED MASSACHUSETTS MUNI CASH TR 823 CS
    FEDERATED MASSACHUSETTS MUNI CASH TR 51 WS
    FEDERATED MASSACHUSETTS MUNI CASH TR 87 SS
7/1/2004   FEDERATED INSTITUTIONAL MMKT MGMT 136 CAP
    FEDERATED INSTITUTIONAL MMKT MGMT 349 EAG
    FEDERATED INSTITUTIONAL MMKT MGMT 58 IS
    FEDERATED INSTITUTIONAL MMKT MGMT 219 SS
    FEDERATED INSITUTIONAL PRIME OBLIGATIONS FUND 10 IS
    FEDERATED INSITUTIONAL PRIME OBLIGATIONS FUND 143 CAP
    FEDERATED INSITUTIONAL PRIME OBLIGATIONS FUND 396 SS
7/1/2004   FEDERATED MUNICIPAL OBLIGATIONS FUND 858 CAP
    FEDERATED MUNICIPAL OBLIGATIONS FUND 821 CS
    FEDERATED MUNICIPAL OBLIGATIONS FUND 820 CII
    FEDERATED MUNICIPAL OBLIGATIONS FUND 852 WS
    FEDERATED MUNICIPAL OBLIGATIONS FUND 839 IV
    FEDERATED MUNICIPAL OBLIGATIONS FUND 855 SS
    FEDERATED MUNICIPAL OBLIGATIONS FUND 833 AS
7/1/2004   FEDERATED NEW YORK MUNI CASH TRUST 878 CS
    FEDERATED NEW YORK MUNI CASH TRUST 12 SS
    FEDERATED NEW YORK MUNI CASH TRUST 825 WS
    FEDERATED NEW YORK MUNI CASH TRUST 111 CII
7/1/2004   FEDERATED PENNSYLVANIA MUNI CASH TR 8 SS
    FEDERATED PENNSYLVANIA MUNI CASH TR 150 CS
    FEDERATED PENNSYLVANIA MUNI CASH TR 644 WS
7/1/2004   FEDERATED PRIME CASH OBLIGATIONS FD 857 CAP
    FEDERATED PRIME CASH OBLIGATIONS FD 911 CII
    FEDERATED PRIME CASH OBLIGATIONS FD 851 WS
    FEDERATED PRIME CASH OBLIGATIONS FD 854 SS
    FEDERATED PRIME CASH OBLIGATIONS FD 909 AS
    FEDERATED PRIME CASH OBLIGATIONS FD 914 R
    FEDERATED PRIME CASH OBLIGATIONS FD 913 CS
    FEDERATED PRIME CASH OBLIGATIONS FD 915 TR
    FEDERATED PRIME CASH OBLIGATIONS FD 485 AVR
7/1/2004   FEDERATED INSTITUTIONAL PRIME VAL OBL 859 CAP
    FEDERATED INSTITUTIONAL PRIME VAL OBL 853 IS
    FEDERATED INSTITUTIONAL PRIME VAL OBL 856 SS
7/1/2004   FEDERATED TAX-FREE OBLIGATIONS FUND 15 WS
    FEDERATED TAX-FREE OBLIGATIONS FUND 397 SS
    FEDERATED TAX-FREE OBLIGATIONS FUND 486 AVR
7/1/2004   FEDERATED INSTITUTIONAL TX-FREE CSH TR 42 IS
    FEDERATED INSTITUTIONAL TX-FREE CSH TR 73 PRM
7/1/2004   FEDERATED TREASURY OBLIGATIONS FUND 115 AS
    FEDERATED TREASURY OBLIGATIONS FUND 862 CAP
    FEDERATED TREASURY OBLIGATIONS FUND 68 IS
    FEDERATED TREASURY OBLIGATIONS FUND 398 SS
    FEDERATED TREASURY OBLIGATIONS FUND 702 TR
7/1/2004   FEDERATED TR FOR U.S. TRSY OBLIGATIONS 54 CS
    FEDERATED TR FOR U.S. TRSY OBLIGATIONS 52 CII
    FEDERATED TR FOR U.S. TRSY OBLIGATIONS 59 IS
7/1/2004   FEDERATED U.S. TREASURY CASH RSV 632 SS
    FEDERATED U.S. TREASURY CASH RSV 125 IS
7/1/2004   FEDERATED VIRGINIA MUNI CASH TRUST 287 SS
    FEDERATED VIRGINIA MUNI CASH TRUST 898 CS
    COLLECTIVE TRUSTS    
    CAPITAL PRESERVATION FUND 4 ISP
    CAPITAL PRESERVATION FUND 25 RP
    CAPITAL PRESERVATION FUND 26 SP
    CAPITAL PRESERVATION FUND 27 YP
    CAPITAL PRESERVATION FUND 35 R6P
    CAPITAL PRESERVATION FUND 40 IP
    INSTITUTIONAL FIXED INCOME FUND 45  
         
State Street Bank and Trust Company By each of the  Federated Funds Set forth on Exhibit A.                                                                                
         
         
By: Andrew Erickson By: /s/ Peter J. Germain    
Name:  Andrew Erickson Name: Peter J. Germain    
Title:  Executive Vice President         Title: Secretary    

 

 

 

 

 

 

 

 

 
 

 

OUTREACH SERVICES

The Transfer Agent shall provide the Outreach Services described below to assist the Fund in locating lost shareholders and re-establishing contact with inactive shareholders thereby reducing the number of escheated accounts.

 

The Transfer Agent and/or its third-party subcontractor (the “Outreach Subcontractor”) shall provide the following Outreach Services:

 

  1. Identify all accounts where 'date of last contact' exceeds two years and include these in the Transfer Agent’s UPA database
  2. Mail contact letters to inactive accounts requesting the dealer and/or shareholder to contact Transfer Agent to keep their account in an active status.
  3. In order to capture contact, maintain a dedicated secure web site, a dedicated toll free number and letter barcoding for auto-indexing for the Federated Funds
  4. Identify all RPO accounts unresponsive to the two required SEC searches, accounts reflecting outstanding checks, and accounts that have been unresponsive to a contact mailing.
    1. Send a file of these accounts to the Outreach Subcontractor for discretionary search and research purposes to identify the shareholder as deceased. If the beneficiary is located, accounts will follow the Outreach Subcontractor's legal claimant process.
    2. Mail a confirmation letter for RPO accounts and outstanding checks to newly located address instructing owners to contact Transfer Agent to update their account
  5. Provide Standard Summary Reports to the Fund upon completion of the outreach services detailing the results of the effort.

 

Outreach Subcontractor. As of the date of the Agreement, the Outreach Subcontractor is Venio LLC d/b/a Keane.

 

Fees. In consideration of the performance of the Outreach Services by the Transfer Agent and/or the Outreach Subcontractor, the Funds shall pay the Transfer Agent the Outreach Service fees set forth on Schedule 3.1 to the Agreement (in addition to the Core Escheatment Service Fees set forth in such Schedule 3.1).

 

Liability for Outreach Services. The Transfer Agent's aggregate liability under this Exhibit B with respect to or arising from the provision of the Outreach Services under this Exhibit, whether in contract, or in tort, or otherwise, is limited to, and shall not exceed the Annual Base Fee for the Outreach Services as set forth on Schedule 3.1 to the Agreement. For the avoidance of doubt, this section does not apply to any liability with respect to or arising from the provision of the Core Escheatment Services provided under the Agreement, which shall be governed by the terms of the Agreement.

 

Termination of Outreach Services. This Exhibit B with respect to the Outreach Services may be terminated by either party without cause by giving the other party at least thirty (30) days' written notice of its intention to terminate, and shall terminate automatically upon termination of the Agreement.

 

 

 

 

 
 

SCHEDULE 2.1
SERVICE LEVEL STANDARDS

 

[          ]

 

 

 
 

 

SCHEDULE 2.2(11)

CHECKWRITING SERVICES SUPPORT

 

(i) Upon receipt of checkwriting signature cards, code the appropriate Shareholder account on Transfer Agent’s recordkeeping systems for checkwriting services, order appropriate checkbook products through MICR’s online checkbook ordering system, and process the signature card, including manually inserting the fourteen-digit account number for such Shareholder on each such signature card, scanning such signature card into the Automated Work Distributor system (“AWD”) and sending the original signature card to United Missouri Bank, N.A. (“UMB”) for safekeeping;

 

(ii) Utilize UMB Direct system for daily settlement with UMB of checks presented against a Shareholder’s account, transmitting the aggregate settlement amount for all check presentments on each business day on which UMB is open for business, less the amount of any check presentments rejected from the prior business day;

 

(iii) Utilize UMB’s systems for review of accounts and processing of items rejected by UMB;

 

(iv) In accordance with Proper Instructions, place stop payment orders on specified checks utilizing the online systems of UMB;

 

(v) Provide information to UMB, on each business day, as to the current collected balance in specified Shareholder accounts;

 

(vi) With respect to checks that are rejected by UMB for reasons other than insufficient Shareholder account balance, perform the following services each business day, as applicable:

 

(A) For checks with faulty MICR encoding, incorrect formatting (1) perform a search of the Fund’s records, maintained on Transfer Agent’s recordkeeping systems, for open Shareholder accounts matching the available identifying Shareholder information on such check and (x) if no corresponding Shareholder account can be located, generate and send a report of such item to UMB, (y) if a corresponding Shareholder account can be located and the account of the Shareholder has a sufficient balance against which to process such check, instruct UMB to pay such check and (z) if a corresponding Shareholder account can be located and the account of the Shareholder does not have a sufficient balance against which to process such check, instruct UMB to return such check to the Shareholder, (2) review each item to determine the cause of the rejection and perform the following additional steps (x) if the cause was incorrect formatting or faulty MICR data, and the shareholder utilized a third party vendor or software platform, inform the Shareholder of the problem and advise the Shareholder to destroy remaining check stock, and, if requested by the Shareholder, order a new checkbook for such Shareholder and (y) if the cause was due to a check being written by a Shareholder against a Fund that no longer offers checkwriting privileges, inform the client of the problem and advise the client to destroy remaining check stock.

 

(B) For checks that are reported as duplicate check entries, (1) if the check can be viewed on UMB’s on-line system, view the check on-line in order to determine whether they are duplicative and (x) if not duplicative, confirm whether the Shareholder’s account has a sufficient balance to honor the check and, if so, instruct UMB to pay the check, (y) if not duplicative, confirm whether the Shareholder’s account has a sufficient balance to honor the check and, if not, instruct UMB to reject the check, and (z) if duplicative, instruct UMB to reject the check, and (2) if the check cannot be viewed on UMB’s on-line systems, contact the financial intermediary through which the Shareholder is transacting, if applicable, or the Shareholder if no financial intermediary is involved, and verify whether the potentially duplicative check is legitimate and (x) if verified to be legitimate by either such means, instruct UMB to pay such check and manually deduct the amount of such check from the Shareholder’s account for settlement with UMB on the next business day, (y) if the Shareholder or financial intermediary indicates that the check is forged or fraudulent, instruct UMB to reject the check and report the matter to the risk management function within Federated Services Company and (z) if the Shareholder or financial intermediary cannot be contacted, present the check for further review.

 

(vii) With respect to checks that are rejected by UMB for reasons of insufficient Shareholder account balance (“NSF Checks”), perform the following services each business day, as applicable:

 

(A)With respect to NSF Checks written by Shareholders whose accounts are maintained (x) by a broker/dealer that has executed an indemnity in favor of Transfer Agent in form and substance satisfactory to Transfer Agent (“Brokers”) and (y) by Federated Securities Corp. (“FSC”):

 

(1)Compile a daily list of NSF Checks, sorted by Broker name (including FSC, as applicable), and transmit such list to the respective Broker (including FSC, as applicable);

 

(2)Accept instructions from such Brokers (including FSC, as applicable) until 12:30 p.m. (Eastern) on each business day as to the disposition of each such NSF Check (the “Pay or Bounce Instructions”);

 

(3)Transmit all Pay or Bounce Instructions received by 12:30 p.m. (Eastern) on such business day to UMB by 1:00 p.m. (Eastern) on such business day;

 

(4)Create a same day wire purchase, or perform a current day transfer or exchange, in accordance with instructions specified in each Pay or Bounce Instruction (the “Deficit True-Up Transaction”), and post this information to the “Trade Pending” status information field on Transfer Agent’s recordkeeping systems;

 

(5)Confirm settlement of each Deficit True-Up Transaction (either receipt of wire or processing of transfer or exchange);

 

(6)Create a checkwriting redemption against the “Trade Pending” status information field on the Transfer Agent’s recordkeeping systems; and

 

(7)In the event that an additional checkwriting check is presented against a Shareholder account on the date an NSF Check for such Shareholder and with respect to which the Pay or Bounce Instruction has already been given, submit a “Resubmittal” report to the applicable Broker (including FSC, as applicable), indicating the new Shareholder account balance after giving effect to the prior Pay or Bounce Instruction.

 

(B)With respect to NSF Checks written by Shareholders whose accounts are maintained by a broker/dealer that has not executed an indemnity in favor of Transfer Agent, instruct UMB to bounce or reject such NSF Check.

 

 
 

SCHEDULE 2.2(12)

DEBIT CARD SERVICES/ACH TRANSACTIONS SUPPORT

 

(A)Debit Card Services.

 

(i) Upon receipt of applications for debit card services, code the appropriate Shareholder account on Transfer Agent’s recordkeeping systems for debit card services and process the application, including manually inserting the fourteen-digit account number for such Shareholder on the application, scanning such application into the AWD and sending a copy of the application to UMB;

 

(ii) Utilize UMB Direct system for daily settlement with UMB of debit card transactions presented against a Shareholder’s account, transmitting the aggregate settlement amount for all such presentments on each business day on which UMB is open for business;

 

(iii) Utilize UMB’s systems for review of accounts and processing of items rejected by UMB;

 

(iv) Review daily reject reports from UMB and make any and all necessary adjustments to Shareholder accounts.

 

(B) Automated Clearing House System (“ACH”) Transactions. Transfer Agent will provide the following services in support of ACH transactions:

 

(i) Utilize UMB Direct system for daily settlement with UMB of ACH transactions presented against a Shareholder’s account, transmitting the aggregate settlement amount for all ACH transactions on each business day on which UMB is open for business, less the amount of any ACH transactions rejected from the prior business day; and

 

(iii) Utilize UMB’s systems for review of accounts and processing of ACH transaction items rejected by UMB.

 

It is recognized that there are electronic alternatives to traditional paper checks, including those transactions processed through the ACH. The settlements referred to in (B)(I) and (B)(ii) of this Schedule 2.2(12), together with any such electronic checks processed as ACH transactions, will be included in daily settlement amounts communicated between Transfer Agent and UMB under Schedule 2.2(11), and processing of these transactions will otherwise be handled according to the terms of such Schedule 2.2(11).

 

 

 

 

 
 

SCHEDULE 3.1

 

[          ]

 

 

 

 
 

SCHEDULE 3.2

 

[          ]

 

 

 

 
 

SCHEDULE 10.2

 

INFORMATION SECURITY SCHEDULE

 

All capitalized terms not defined in this Information Security Schedule (this “Security Schedule”) shall have the meanings ascribed to them in the Transfer Agency and Service Agreement by and between Transfer Agent and each of the funds listed on Exhibit A thereto (each such fund, or series thereof, severally, and not jointly, the “Fund”) dated January 31, 2017 (the “Agreement”).

 

Transfer Agent and Fund hereby agree that Transfer Agent shall maintain and comply with an information security policy (“Security Policy”) that satisfies the requirements set forth below; provided, that, because information security is a highly dynamic space (where laws, regulations and threats are constantly changing), Transfer Agent reserves the right to make changes to its information security controls at any time and at the sole discretion of Transfer Agent in a manner that it believes does not materially reduce the protection it applies to Fund Data.

 

From time to time, Transfer Agent may subcontract services performed under the Agreement (to the extent provided for under the Agreement) or provide access to Fund Data or its network to a subcontractor or other third party; provided, that, such subcontractor or third party implements and maintains security measures Transfer Agent believes are at least as stringent as those described in this Security Schedule.

 

For the purposes of this Schedule “prevailing industry practices and standards” refers to standards among financial institutions, including mutual funds, and third parties providing financial services to financial institutions.

 

1.Objective.

 

The objective of Transfer Agent’s Security Policy and related information security program is to implement data security measures consistent in all material respects with applicable prevailing industry practices and standards (“Objective”). In order to meet such Objective, Transfer Agent uses commercially reasonable efforts to:

 

a.Protect the privacy, confidentiality, integrity, and availability of all confidential data and information disclosed by or on behalf of Fund to, or otherwise comes into the possession of Transfer Agent, in connection with the provision of services under the Agreement and to the extent the same is deemed confidential information under the terms of the Agreement (collectively, “Fund Data”). For the avoidance of doubt, and without limiting the foregoing, “Fund Data” includes all Confidential Information of the Fund and its agents or service providers, including, without limitation all “Customer Information,” as contemplated in the Agreement;

 

b.Protect against accidental, unauthorized, unauthenticated or unlawful access, copying, use, processing, disclosure, alteration, transfer, loss or destruction of the Fund Data;

 

c.Comply with applicable governmental laws, rules and regulations that are relevant to the handling, processing and use of Fund Data by Transfer Agent in accordance with the Agreement; and

 

d.Implement customary administrative, physical, technical, procedural and organizational safeguards.

 

e.Implement means and technology to encrypt Fund Data, mutually acceptable between the Fund and Transfer Agent, while in transit to and from Transfer Agent.

 

 

2.Risk Assessments.

 

a.Risk Assessment - Transfer Agent shall, at least annually, perform risk assessments that are designed to identify material threats (both internal and external) against Fund Data, the likelihood of those threats occurring and the impact of those threats upon the Transfer Agent organization to evaluate and analyze the appropriate level of information security safeguards (“Risk Assessments”).

 

b.Risk Mitigation - Transfer Agent shall use commercially reasonable efforts to manage, control and remediate any threats identified in the Risk Assessments that it believes are likely to result in material unauthorized access, copying, use, processing, disclosure, alteration, transfer, loss or destruction of Fund Data, consistent with the Objective, and commensurate with the sensitivity of the Fund Data and the complexity and scope of the activities of Transfer Agent pursuant to the Agreement.

 

c.Security Controls Testing - Transfer Agent shall, on approximately an annual basis, engage an independent external party to conduct periodic reviews of Transfer Agent’s information security practices. Transfer Agent shall have a process to review and evaluate high risk findings resulting from this testing.

 

3.Security Controls. Annually, upon Fund’s reasonable request, Transfer Agent shall provide Fund’s Chief Information Security Officer or his or her designee with a copy of its corporate information security controls that form the basis for Transfer Agent’s Security Policy and an opportunity to discuss Transfer Agent’s information security measures, and a high level summary of any vulnerability testing conducted by Transfer Agent on its information security controls, with a qualified member of Transfer Agent’s information technology management team. Transfer Agent shall review its Security Policy annually.

 

4.Organizational Security.

 

a.Responsibility - Transfer Agent shall assign responsibility for information security management to qualified personnel only.

 

b.Access - Transfer Agent shall permit only those personnel performing roles supporting the provision of services under the Agreement to access Fund Data.

 

c.Confidentiality - Transfer Agent personnel who have accessed or otherwise been made known of Fund Data shall maintain the confidentiality of such information in accordance with the terms of the Agreement.

 

d.Training - Transfer Agent will provide information security training to its personnel on approximately an annual basis.

 

5.Asset Management.

 

a.Data Sensitivity - Transfer Agent acknowledges that it understands the sensitivity of Fund Data.

 

b.External Hosting Facilities – Transfer Agent shall implement controls, consistent with applicable prevailing industry practices and standards, regarding the collection, use, storage and/or disclosure of Fund Data by an external hosting provider.

 

6.Physical Security.

 

a.Securing Physical Facilities - Transfer Agent shall maintain systems located in Transfer Agent facilities that host Fund Data or provide services under the Agreement in an environment that is designed to be physically secure and to allow access only to authorized individuals. A secure environment includes the availability of onsite security personnel on a 24 x 7 basis or equivalent means of monitoring locations supporting the delivery of services under the Agreement.

 

b.Physical Security of Media - Transfer Agent shall implement controls, consistent with applicable prevailing industry practices and standards, that are designed to deter the unauthorized viewing, copying, alteration or removal of any media containing Fund Data. Removable media on which Fund Data is stored by Transfer Agent (including thumb drives, CDs, and DVDs, and PDAS) will be encrypted based on Transfer Agent encryption policies.

 

c.Media Destruction - Transfer Agent shall destroy removable media and any mobile device (such as discs, USB drives, DVDs, back-up tapes, laptops and PDAs) containing Fund Data or use commercially reasonable efforts to render Fund Data on such physical media unintelligible if such media or mobile device is no longer intended to be used. All backup tapes that are not destroyed must meet the level of protection described in this Security Schedule until destroyed or rendered irretrievable.

 

d.Paper Destruction - Transfer Agent shall shred all paper waste containing Fund Data and dispose in a secure and confidential manner making it unrecoverable.

 

7.Communications and Operations Management.

 

a.Network Penetration Testing - Transfer Agent shall, on approximately an annual basis, contract with an independent third party to conduct a network penetration test on its network having access to or holding or containing Fund Data. Transfer Agent shall have a process to review and evaluate high risk findings resulting from this testing.

 

b.Data Protection During Transmission - Transfer Agent shall encrypt, using an industry standard encryption algorithm, personally identifiable Fund Data when such data is transmitted.

 

c.Data Loss Prevention - Transfer Agent shall implement a data leakage program that is designed to identify, detect, monitor and document Fund Data leaving Transfer Agent’s control without authorization in place.

 

d.Malicious Code – Transfer Agent shall implement controls that are designed to detect the introduction or intrusion of malicious code on information systems handling or holding Fund Data and implement a process for removing said malicious code from information systems handling or holding Fund Data.

 

8.Access Controls.

 

a.Authorized Access - Transfer Agent shall have controls that are designed to maintain the logical separation such that access to systems hosting Fund Data and/or being used to provide services to Fund will uniquely identify each individual requiring access, grant access only to authorized personnel based on the principle of least privileges, and prevent unauthorized access to Fund Data.

 

b.User Access - Transfer Agent shall have a process to promptly disable access to Fund Data by any Transfer Agent personnel who no longer requires such access. Transfer Agent will also promptly remove access of Fund personnel upon receipt of notification from Fund.

 

c.Authentication Credential Management - Transfer Agent shall communicate authentication credentials to users in a secure manner, with a proof of identity check of the intended users.

 

d.Multi-Factor Authentication for Remote Access - Transfer Agent shall use multi factor authentication and a secure tunnel, or another strong authentication mechanism, when remotely accessing Transfer Agent’s internal network.

 

 

9.Use of Laptop and Mobile Devices in connection with the Agreement.

 

a.Encryption Requirements – Transfer Agent will not locally store Fund Data on any laptops or mobile devices (e.g., Blackberries, PDAs) managed by Transfer Agent.

 

b.Secure Storage - Transfer Agent shall require that all laptops and mobile devices be securely stored whenever out of the personnel’s immediate possession.

 

c.Inactivity Timeout - Transfer Agent shall employ access and password controls as well as inactivity timeouts of no longer than fifteen (15) minutes on laptops, desktops and mobile devices managed by Transfer Agent and used by Transfer Agent’s personnel.

 

 

10.Information Systems Acquisition Development and Maintenance.

 

a.Fund Data – Fund Data shall only be used by Transfer Agent for the purposes specified in the Agreement.

 

b.Virus Management - Transfer Agent shall maintain a malware protection program designed to deter malware infections, detect the presence of malware within the Transfer Agent environment.

 

11.Incident Event and Communications Management.

 

a.Incident Management/Notification of Breach - Transfer Agent shall develop, implement and maintain an incident response plan that specifies actions to be taken when Transfer Agent or one of its subcontractors suspects or detects that a party has gained material unauthorized access to Fund Data or systems or applications containing any Fund Data (the “Response Plan”). Such Response Plan shall include the following:

 

i.                Escalation Procedures - An escalation procedure that includes notification to senior managers and appropriate reporting to regulatory and law enforcement agencies. This procedure shall provide for reporting of incidents that compromise the confidentiality of Fund Data (including backed up data) to Fund via telephone or email (and provide a confirmatory notice in writing as soon as practicable); provided that the foregoing notice obligation is excused for such period of time as Transfer Agent is prohibited by law, rule, regulation or other governmental authority from notifying Fund.

 

ii.              Incident Reporting - Transfer Agent will use commercially reasonable efforts to promptly furnish to Fund information that Transfer Agent has regarding the general circumstances and extent of such unauthorized access to the Fund Data.

 

iii.Investigation and Prevention - Transfer Agent shall reasonably assist Fund in investigating of any such unauthorized access and shall use commercially reasonable efforts to:

(A) cooperate with Fund in its efforts to comply with statutory notice or other legal obligations applicable to Fund or its clients arising out of unauthorized access and to seek injunctive or other equitable relief; (B) cooperate with Fund in litigation and investigations against third parties reasonably necessary to protect its proprietary rights; and (C) take reasonable actions necessary to mitigate loss from any such authorized access.

 

 

 
 

August 23, 2018

 

Peter J. Germain, Esq.

General Counsel

Federated Investors, Inc.

1001 Liberty Avenue

Pittsburgh, Pennsylvania 15222

 

RE: Transfer Agency and Service Agreement among Federated Funds and State Street

Dear Mr. Germain,

At your request, this letter is intended to clarify certain aspects of the Transfer Agency and Service Agreement dated as of January 31, 2017, by and between each of the Federated Funds set forth on Exhibit A of that Agreement (the “Funds”) and State Street Bank and Trust Company (“State Street”), as amended from time to time (the “Agreement”).

As you may know, Section 15.1 of the Agreement allows State Street to subcontract, without the consent of the Funds, its performance under the Agreement to Boston Financial Data Services, Inc. (“Boston Financial”), provided, however, that State Street remains fully responsible to the Fund for the acts and omissions of Boston Financial as it is for its own acts and omissions under the Agreement.

We understand that the recent changes in the ownership structure of Boston Financial may be a cause of concern to the Funds, wherein: (i) Boston Financial changed its corporate name to DST Asset Manager Solutions, Inc. (“DST AMS”) following the March 2017 acquisition by DST Systems, Inc. of the remaining ownership interest in Boston Financial and (ii) SS&C Technologies Holdings, Inc. (“SS&C”) acquired 100% of the ownership interest in DST Systems, Inc., the parent company of DST AMS (the “SS&C Purchase”), in April 2018.

State Street confirms to the Funds that it will continue to delegate the services under the Agreement to DST AMS, which is now a subsidiary of SS&C, until the Agreement terminates by its terms or upon agreement by the parties thereto. Further, pursuant to Section 15.1 of the Agreement, and not-withstanding Section 15.2 of the Agreement, State Street will continue to be fully responsible to the Funds for the acts and omissions of DST AMS as it is for its own acts and omissions under the terms of the Agreement. State Street views all other terms of the Agreement as it has been amended over time as continuing to remain in force and effect.

 

 

State Street’s Third Party Risk Management (TPRM) program assesses, monitors and manages the potential risks inherent to third party providers throughout the lifecycle of each applicable engagement, consistent with compliance and regulatory requirements. DST AMS as a Third Party Service Provider is required to successfully complete this process to provide Transfer Agency services to State Street clients. State Street’s TPRM program framework is comprised of five mandatory components: Planning, Due Diligence, Contract Negotiation, Ongoing Monitoring and Termination. Each component requires activities that support the goal of managing applicable third party risk dimensions throughout the duration of the engagement.

In addition to the Third Party Service Provider requirements listed above, State Street also utilizes the Transfer Agency Governance and Oversight Committee (TAGOC) to provide additional oversight for subcontracted Transfer Agency work for regulated activities. Oversight includes review of Key Performance Indicators, Compliance with Regulatory Obligations and Issue escalation. State Street oversees DST AMS through this governance body.

I trust that the foregoing clarification is helpful to you. Please provide your acknowledgement and acceptance of this clarification by signing below. Please feel free to contact me if you have any questions. Thank you.

 

 

Sincerely,

 

/s/ Jane Kirkland

 

Jane Kirkland

Senior Vice President

 

Acknowledged and accepted by each of the Federated Funds Set forth on Exhibit A to the Agreement (other than collective trusts) severally and not jointly:

 

 

 

By: /s/ Peter J. Germain

 

Name: Peter J. Germain

Title: Chief Legal Officer

 

 
 

VENDOR MANAGEMENT

KEY VENDOR MANAGEMENT PROVISIONS CHECKLIST

 

 

[          ]

 

 

 

 EX-99.ADMIN SERV 18 ex28h3faas.htm EXHIBIT 99 UNDER ITEM 601/REG. S-K

Exhibit 28 (h)(3) under Form N-1A

Exhibit 99 under item 601/REG. S-K

 

 

SECOND AMENDED AND RESTATED

AGREEMENT

for

ADMINISTRATIVE SERVICES

 

This Second Amended and Restated Agreement for Administrative Services (the “Agreement”) is made, severally and not jointly, as of September 1, 2017, by each of the registered investment companies listed on Exhibit A hereto, each having its principal office and place of business at 4000 Ericsson Drive, Warrendale, Pennsylvania 15086 (collectively, the “Investment Company”), and FEDERATED ADMINISTRATIVE SERVICES, a Delaware statutory trust, having its principal office and place of business at Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779 (“FAS”). The Agreement amends and restates in its entirety that Amended and Restated Agreement for Administrative Services by and between the Investment Company and FAS dated September 1, 2012, as amended, (the “Superseded Agreement”).

WHEREAS, each investment company subject to this Agreement is registered as a 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”);

WHEREAS, certain investment companies subject to this Agreement are “series companies” as defined in Rule 18f-2 under the 1940 Act and, as used in this Agreement, the term “Fund” refers to either (i) an individual portfolio of such a series company or (ii) an investment company that is not organized as a series company, and the term “Funds” refers to all such portfolios and investment companies, collectively;

WHEREAS, Shares of each Fund may be subdivided into classes (each a “Class”) as provided in Rule 18f-3 under the 1940 Act;

WHEREAS, the Investment Company wishes to appoint FAS as its administrator to provide it with Administrative Services (as herein defined) and FAS desires to accept such appointment;

WHEREAS, Investment Company and FAS are parties to the Superseded Agreement with respect to the subject matter hereof; and

WHEREAS, Investment Company and FAS desire to amend the Superseded Agreement by amending and restating the same in its entirety on the terms set forth herein;

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:

Article 1. Appointment.

The Investment Company hereby appoints FAS as Administrator for the period on the terms and conditions set forth in this Agreement. FAS hereby accepts such appointment and agrees to furnish the services set forth in Article 2 of this Agreement in return for the compensation set forth in Article 5 of this Agreement.

Article 2. FAS Duties.

As Administrator, and subject to the supervision and control of the Investment Company’s Board of Trustees/Directors (the “Board”), FAS will provide facilities, equipment, and personnel to perform or cause to be performed the following “Administrative Services” for operation of the business and affairs of the Investment Company and each of its Funds and any additional Administrative Services that FAS shall agree in writing to perform, or cause to be performed, for the Investment Company from time to time:

A. LEGAL AND COMPLIANCE ADMINISTRATIVE SERVICES

1.Prepare, file, and maintain the Investment Company's governing documents and any amendments thereto, including the charter documents, the by-laws and minutes of meetings of the Board, Board Committees and Shareholders.
2.Prepare and file with the Securities and Exchange Commission (the “SEC”) and the appropriate state securities authorities: (i) the registration statements for the Investment Company and the Investment Company's Shares and all amendments thereto, (ii) annual and semi-annual reports to shareholders and other applicable regulatory reports and communications,; (iii) proxy materials; (iv) notices pursuant to Rule 24f-2; and (v) such other documents all as may be necessary to enable the Investment Company to continuously offer its shares.
3.Prepare and administer contracts on behalf of the Investment Company and supervise relationships with the Investment Company’s other service providers, including , the Investment Company's investment advisers, sub-advisers, fund accountants, custodians, transfer agents and distributors, subject to any terms and conditions established by the Board and the requirements of the 1940 Act, such supervision may include the engagement of outside consultants from time to time, at FAS’s expense, to review the relationship contracts and recommend changes designed to reduce Fund expenses.
4.Provide due diligence of the Investment Company’s other service providers, including , the Investment Company's investment advisers, sub-advisers, fund accountants, custodians, transfer agents and distributors, to the extent not otherwise provided by the Investment Company’s other service providers.
5.Arrange for and attend shareholders’ meetings; prepare the Investment Company’s representatives who will attend shareholder meetings and all necessary materials in connection with such meetings including, without limitation, a written script for such meetings, minutes and any follow-up documents.
6.Provide the Investment Company with legal guidance with respect to its regulated activities, including prospectus disclosures, investment activities, affiliated transactions, investment in senior securities, sales, redemptions and exchanges, distribution of income and capital gains, distribution of Shares, board composition, code of ethics, fidelity bond, custodial services and service provider contracts and the general application of securities laws and regulations to the Investment Company’s business and provide or arrange for all other legal services that constitute Administrative Service required by the Investment Company and not otherwise provided for under this Agreement (it being understood that various legal services will be provided to the Investment Company, the Board and the Independent Trustees at the expense of the Investment Company, as described herein).
7.Supervise outside legal counsel retained at the expense of the Investment Company with respect to litigation brought by the Investment Company and against the Investment Company and negotiate litigation settlements and pre-litigation settlements and work-out arrangements.
8.Obtain the required documentation to be filed in connection with any lawsuits against the Investment Company and provide information and expertise on administrative matters affecting such litigation.
9.Supervise outside legal counsel retained at the expense of the Investment Company with respect to, and review all contracts, filings and required documentation concerning, the acquisition of other investment companies or the liquidation of the Fund; provide guidance on the manner such transactions should be structured to comply with applicable law and obtain at the Investment Company’s expense, legal opinions and regulatory authority rulings necessary for such transactions to comply with applicable law.
10.Seek formal guidance from regulatory authorities concerning the application of various regulations to the Investment Company and seek exemptive relief, where appropriate.
11Subject to the Board’s direction, coordinate meetings of the Board (and its committees), including: (i) the creation of notices, agendas, legal memoranda and administrative reports, and (ii) the review and compilation of other materials prepared by the Investment Company’s adviser, distributor, portfolio accountant, custodian, transfer agent, auditor, independent counsel or other service providers to support the Board’s discussions and actions taken.
12.Negotiate and secure for the Investment Company and its directors and officers: (i) a fidelity bond in an amount that is at least adequate to satisfy the requirements of the 1940 Act, (ii) directors and officer’s coverage and (iii) professional liability or errors and omissions coverage, in each case, under terms that are acceptable to the Board.
13.Monitor changes in applicable regulations and make corresponding changes in, or develop new, policies and procedures for the Fund or for the applicable service provider.
14.Prepare, review and negotiate standard forms of indentures, guarantees, agreements, certificates, confirmations and other documentation relating to the legal terms of securities eligible for purchase by money market funds, provided that FAS shall not have any obligation to: (i) provide any written legal opinions regarding such securities; or (ii) prepare, review or negotiate any document for which a standard form has not been developed and accepted for use by the investment company industry.
15.Perform the following “blue sky” services, either itself or through one or more affiliated or unaffiliated service providers: (1) provide a system to monitor the total number of Shares of the Investment Company (and/or Class) sold in each State, (2) monitor the total number of Shares of such Investment Company (and/or Class) sold in each State and, where appropriate, increase the number of Shares registered in such State, (3) with respect to shareholders of the Investment Company whose shareholdings are fully-disclosed on the transfer agent’s recordkeeping system, (a) identify those transactions and assets to be treated as exempt from blue sky reporting for each State and (b) verify the classification of transactions for each State on the transfer agent’s recordkeeping system, and (4) with respect to shareholders of the Investment Company whose shareholdings are not fully-disclosed on the transfer agent’s recordkeeping system, rely upon information provided by the relevant financial intermediary transacting for such holder of Shares in performing the obligations set forth in subsection (2) above.
16.Provide compliance services, as directed by the Investment Company’s Chief Compliance Officer, which include monitoring the Investment Company’s compliance with its policies and procedures, and with applicable federal, state and foreign securities laws, and the rules and regulations thereunder, as applicable.
17.Administer the Investment Company’s code of ethics.
18.Monitor the Investment Company’s compliance with its investment policies, objectives and restrictions as set forth in its currently effective registration statement.
19.Implement and maintain, together with affiliated companies, a business continuation and disaster recovery program for the Investment Company.
20.Assist the Investment Company in regulatory examinations, inspections or investigations of the Investment Company.
21.Provide the following administrative and compliance services with regard Commodity Futures Trading Commission (“CFTC”) Rule 4.5 (as may be amended from time to time): (i) monitor the Investment Company’s compliance with the rule; (ii) with respect to those Funds that are required under the rule to register as ‘commodity pools’ from time to time (the “Registered Funds”) prepare, file and maintain the Registered Funds’ registrations with the CFTC or applicable self-regulatory authority, as appropriate; (iii) with respect to those Funds that are subject to the rule but qualify for an exemption from registration as ‘commodity pools’, prepare, file and monitor the companies’ exemptive filings with the CFTC or applicable self-regulatory authority, as appropriate; (iv) in relation to the Registered Funds’ commodity pool status, prepare, file and maintain the Registered Funds advisers’ registrations as ‘commodity pool operators’ (“CPOs”) and prepare and file such reports as are required to be filed by the CPOs with the CFTC or applicable self-regulatory authority, as appropriate; and (v) any additional administrative and compliance services with regard to the Investment Company’s and CPOs’ CFTC Rule 4.5 activities, as directed by the Investment Company’s Chief Compliance Officer, from time to time (collectively, “CFTC Rule 4.5 Administrative Services”).
B.FINANCIAL ADMINISTRATIVE SERVICES
1.Prepare and file the Investment Company’s tax returns.
2.Evaluate and obtain custody services from a financial institution that meets the requirements of the 1940 Act.
3.Compare, as applicable, the fund accountant’s calculation of the Investment Company’s net asset value, yield, dividends, fund total return and performance and total assets with the fund accountant’s previous calculations and with changes in the relevant securities market on a daily basis for reasonableness of changes.
4.Review and compare, as applicable, the calculation of the Investment Company’s average maturity with the previous calculations for reasonableness of changes.
5.Evaluate and recommend the pricing services used by the Investment Company; participate in the fair valuation of portfolio securities as required by the Investment Company’s fair valuation procedures; review and recommend changes to the Investment Company’s fair valuation procedures.
6.Compare the fund accountant’s calculations of the Investment Company’s undistributed net income balances with the fund accountant’s previous calculations for reasonableness of changes.
7.Perform daily reviews, as applicable, of the fund accountant’s shadow net asset value calculations with the previous calculations for reasonableness of changes; notify designated parties, as necessary, of deviations in compliance with the Investment Company’s Rule 2a-7 procedures, if any.
8.Perform monthly comparison of the fund accountant’s performance calculations with previous calculations for reasonableness of changes.
9.Perform quarterly comparison of the fund accountant’s projected annual fund expenses with previous projections for reasonableness of changes; prepare monthly budgets for specific expense categories to be used in monthly updates to the Investment Company’s expense accruals and projections.
10.Review fund expense reports prepared by the fund accountant; monitor compliance with the expense limits stated in the prospectus fee tables, including disclosure regarding which expense categories should be accrued in addition to the expense limits.
11.Coordinate and track the payment of all fund expenses by the Investment Company’s fund accountant.
12.Compare the fund accountant’s calculation of dividend recommendations with previous recommendations for reasonableness of changes; consult with portfolio managers concerning recommendations for fixed dividend resolution funds.
13.Calculate and determine capital gain distributions, if any, for the Investment Company.
14.Review the fund accountant’s calculations for shareholder tax reporting of AUM income percentages, state income percentages and government income percentages.
15.Monitor and confirm the Investment Company’s status as a regulated investment company under the current Internal Revenue Code (“IRC”); monitor and confirm compliance with IRC section 817(h) diversification requirements, as applicable.
16.Review and/or prepare, for shareholder tax reporting purposes, as applicable, (i) calculations for qualifying dividend income (QDI), dividends received deduction (DRD), and interest-related and short-term capital gain dividends (QII), and (ii) IRC section 1250 gain amounts, as well as assessing compliance with various states’ threshold requirements for reporting certain tax characteristics to shareholders in those states.
C.OTHER ADMINISTRATIVE SERVICES
1.Coordinate the layout, printing and electronic delivery of publicly disseminated prospectuses and shareholder reports, make recommendations to improve their effectiveness or reduce expenses.
2.Perform internal audit examinations in accordance with a charter adopted by the Investment Company.
3.Monitor enterprise level risks associated with the services provided herein in accordance with a charter adopted by Investment Company.
4.Develop and recommend changes in the investment strategy and operation of the Investment Company that may be in the interest of its Shareholders.
5.Provide individuals reasonably acceptable to the Board for nomination, appointment, or election as the following officers of the Investment Company, who will be responsible for the management of certain of the Investment Company's affairs as specified in the Investment Company's charter documents and by-laws, subject to direction by the Investment Company’s Board: (i) the president and principal executive officer, (ii) the treasurer and principal financial and accounting officer; (iii) the secretary, and (iv) such other officers as are mutually agreeable.
6.Monitor trading activity to help identify market timers and recommend policies to deter market timing.
7.Review potential intermediary clients and existing intermediary clients as appropriate to determine/monitor the client’s ability to adhere to the terms of any servicing agreement between the client and Investment Company.
8.Review and recommend changes to the transfer agent’s policies and procedures to mitigate fraud, enhance shareholder services or reduce expenses.
9.Review and recommend changes to policies and procedures and operating processes designed to reduce Fund expenses.
10.Respond to all inquiries or other communications from shareholders and other parties, not otherwise provided by the Investment Company’s other service providers; if the inquiry is more properly responded to by another of the Investment Company’s service providers, referring the individual making the inquiry to the appropriate person.
11.Perform the following services, either itself or through its affiliate, Federated Shareholder Services company; (i) select and perform due diligence regarding proposed new owners of omnibus accounts as proposed recordkeeping agents for the Investment Company, (ii) enter into agreements as agent for the Investment Company, or any of them, substantially in the form most recently approved by the Investment Company’s board, with the registered owners of omnibus accounts for the provision of services necessary for the recordkeeping or sub-accounting of share positions held in underlying sub-accounts (“Recordkeeping Agreements”), together with such changes thereto as may be agreed to by Company so long as such changes do not (a) increase the fees payable by the Investment Company under the Recordkeeping Agreements, (b) alter the indemnity obligations of the Investment Company owing to or from the Investment Company thereunder or (c) otherwise materially alter the obligations of the Investment Company under the Recordkeeping Agreements, (iii) agree, on behalf of the Investment Company, to make payments for services rendered under Recordkeeping Agreements out of the assets of the Investment Company in amounts not to exceed the amounts determined from time to time by the Board of the Investment Company, and (iv) give instructions to the transfer agent of the Investment Company (the “Transfer Agent”), for and on behalf of the Investment Company as “Proper Instructions” of the Investment Company under and pursuant to the agreement for transfer agency services with the Transfer Agent, to perform the services of Company and/or the Investment Company under each such Recordkeeping Agreement, excepting only the indemnity obligations owning from the Investment Company or Company thereunder.

D.       SUBCONTRACTORS

1.FAS may without further consent on the part of the Investment Company at FAS’s own expense, subcontract for the performance of Administrative Services with a sub-contractor selected by FAS. FAS shall be as fully responsible to the Investment Company for the acts and omissions of any subcontractor as it is for its own acts and omissions.
2.FAS shall upon instruction from the Investment Company subcontract for the performance of services under this Agreement with an agent selected by the Investment Company, other than as described in D.1. above, provided, however, that FAS shall in no way be responsible to the Investment Company for the acts and omissions of the agent and the expenses of such agent shall be the responsibility of FAS or the Investment Company, as the parties may agree from time to time.

Article 3. Records.

FAS shall create and maintain all necessary books and records in accordance with all applicable laws, rules and regulations, including but not limited to records required by Section 31(a) of the 1940 Act, pertaining to the Administrative Services performed by it and not otherwise created and maintained by another party pursuant to contract with the Investment Company. Where applicable, such records shall be maintained by FAS for the periods and in the places required by Rule 31a-2 under the 1940 Act. The books and records pertaining to the Investment Company which are in the possession of FAS shall be the property of the Investment Company. The Investment Company, or the Investment Company's authorized representatives, shall have access to such books and records at all times during FAS's normal business hours. Upon the reasonable request of the Investment Company, copies of any such books and records shall be provided promptly by FAS to the Investment Company or the Investment Company's authorized representatives.

Article 4. Expenses.

A.FAS shall be responsible for all expenses (i) expressly assumed by FAS under this Agreement; (ii) incurred in the ordinary course of providing (or causing to be provided) the Administrative Services, including CFTC Rule 4.5 Administrative Services, to the Investment Company and the equipment, office space, and facilities necessary to perform its obligations under this Agreement; and (iii) incurred in maintaining its staff and personnel, including the compensation of FAS employees who serve as trustees or directors or officers of the Investment Company
B.Each Fund shall be solely responsible for (i) all expenses expressly assumed by the Funds under this Agreement; (ii) all other fees and expenses incurred in the operation of the Funds, including:

(a) investment advisory fees and expenses associated with the investment management of the Fund’s portfolios;

(b) shareholder servicing, recordkeeping and distribution and marketing expenses of the Funds;

(c) expenses for transfer agent(s), registrar(s) and dividend disbursing agent(s);

(d) expenses for custodian(s) and related custodial services;

(e) costs of Fund accounting services provided by third parties to the Funds;

(f) costs of services provided by independent auditors;

(g) costs and services of outside legal and tax counsel (other than counsel sub-contracted with by FAS to perform services under this Agreement) and counsel to the Funds and the Independent Trustees;

(h)       ratings agency fees;

(i)       costs related to short selling (e.g., prime brokerage fees);

(j) postage and courier expenses;

(k) printing expenses;

(l) expenses for XRBL tagging and regulatory document production (e.g., ArcPro) provided by third parties;

(m) travel and lodging expenses;

(n) Fund registration fees, listing fees and filing fees and other Fund organizational expenses;

(o) taxes;

(p) insurance premiums;

(q) costs, including interest expenses, commitment fees, facilities fees and unused line fees of any borrowings made by the Funds;

(r) fees payable to persons who are not FAS employees and not FAS subcontractors;

(s) Fund-allocation of trade association dues;

(t) expenses of obtaining quotations and other pricing information for calculating the value of the Fund’s net assets, including the Fund-allocation of costs of independent pricing services;

(u) expenses related to the Fund’s Directors and Fund Board meetings, including Director’s fees and costs of electronic board books;

(v) fees charged by third party custodians for calculating Form N-PORT and Form N-CEN information requirements;

(w) expenses incurred in connection with bankruptcies, workouts and restructures, proceedings and other claims against the Funds;

(x) costs of third-party legal, tax, accounting or other expert advice incurred in connection with any litigation, threatened litigation or other regulatory proceeding, by or against the Funds, including third-party record-retention costs related to litigation holds; and

(iii) any other expenses approved from time to time by the Fund’s Board as properly payable by the Funds (any such expenses under (i), (ii) and (iii) above reasonably incurred by FAS on the Fund’s behalf “Out of Pocket Expenses”) provided that, any Out of Pocket Expenses incurred by FAS that are payable to or by an affiliate of FAS will not be duplicative of services to be provided by those affiliates under any other agreement with the Funds.

Article 5. Compensation.

A.In addition to Out of Pocket Expenses, for the Administrative Services provided hereunder, excluding CFTC Rule 4.5 Administrative Services, the Investment Company hereby agrees to pay and FAS hereby agrees to accept as full compensation for such services a pro rata “Administrative Services Fee” at the annual rates set forth below on the average daily net assets of each Fund listed on Exhibit A to this Agreement; provided however, that no Administrative Services Fee will be charged for those Funds also listed on Exhibit B to this Agreement.

 

Administrative Services Fee Rate Average Daily Net Assets
of the Investment Complex
0.100% up to$50 billion
0.075% on assets over $50 billion

For purposes of calculating the applicable breakpoint under this Agreement, “Investment Complex” is defined as those Funds listed on Exhibit A to this Agreement but not also listed on Exhibit B.

B.For the CFTC Rule 4.5 Administrative Services provided hereunder, each Registered Fund agrees to pay, and FAS hereby agrees to accept as full compensation for such services, an annual “Administrative Service Charge” of $125,000 per Registered Fund.
C.The Administrative Services Fee, Administrative Services Charge and Out of Pocket Expenses attributable to each Fund shall be accrued by such Fund and paid to FAS no less frequently than monthly, and shall be paid daily upon request of FAS. For the payment period in which this Agreement becomes effective or terminates with respect to any Fund, there shall be an appropriate proration of Administrative Service Fee and Administrative Service Charge payments, on the basis of the number of days that this Agreement is in effect during the month. FAS will maintain detailed information about the Administrative Services Fee, Administrative Service Charge and Out of Pocket Expenses paid by each Fund.

Article 6. Standard of Care and Indemnification.

A.FAS shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Investment Company 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 duties under this Agreement. Any person, even though also an officer, director, trustee, partner, employee or agent of FAS, who may be or become an officer, director, trustee, partner, employee or agent of the Investment Company, shall be deemed, when rendering services to the Investment Company or acting on any business of the Investment Company (other than services or business in connection with the duties of FAS hereunder) to be rendering such services to or acting solely for the Investment Company and not as an officer, director, trustee, partner, employee or agent or one under the control or direction of FAS, even though paid by FAS.
B.FAS shall be kept indemnified by the Investment Company and be without liability for any action taken or thing done by it in performing the Administrative Services in accordance with the above standards.
C.FAS shall not be responsible for and the Investment Company or Fund shall indemnify and hold FAS, 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, fund accountant, distributor, transfer agent or other party contracted by or approved by the Investment Company or Fund.
2.The reliance on or use by FAS or its agents or subcontractors of information, records and documents in proper form which:

(a)       are received by FAS or its agents or subcontractors from any adviser, sub-adviser, fund accountant, distributor, transfer agent or other third party contracted by or approved by the Investment Company or Fund for use in the performance of services under this Agreement; or

(b)       have been prepared and/or maintained by the Investment Company or its affiliates or any other person or firm on behalf of the Investment Company.

3.The reliance on, or the carrying out by FAS or its agents or subcontractors of a Proper Instruction of the Investment Company or the Fund.

“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) FAS 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 Investment Company, or the Fund, and FAS 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 Investment Company, or the Fund, and FAS are satisfied that such procedures afford adequate safeguards for the Fund's assets. Proper Instructions may only be amended in writing.

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.
5.Any untrue statement or alleged untrue statement of a material fact contained in the Investment Company’s registration statement, any prospectus or statement of additional information (“SAI”) (as from time to time amended or 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 Investment Company about FAS by or on behalf of FAS expressly for the use in the registration statement, any prospectus or SAI, or any amendment or supplement thereof.

Provided, however, that FAS shall not be protected by this Article 6.C. from liability for any act or omission resulting from FAS's willful misfeasance, bad faith, gross negligence in the performance of or reckless disregard of its duties under this Agreement.

D.At any time FAS may apply to any officer of the Investment Company or Fund for instructions, and may consult with legal counsel or the Investment Company’s independent accountants with respect to any matter arising in connection with the services to be performed by FAS under this Agreement, and FAS and its agents or subcontractors shall not be liable and shall be indemnified by the Investment Company 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 or independent accountant provided such action is not in violation of applicable federal or state laws or regulations.
E.The Investment Company or Fund shall not be responsible for and FAS shall indemnify and hold the Investment Company or Fund harmless against any and all losses, damages, costs, charges, counsel fees, payments, expenses and liabilities arising out of or attributable to FAS’s willful misfeasance, bad faith or gross negligence on its part in the performance of its duties or reckless disregard by it of its duties under this Agreement.
F.In order that the indemnification provisions contained in this Article 6 shall apply, upon the assertion of a claim for which any party may be required to indemnify another, the party seeking indemnification (the “Claimant”), shall promptly notify the indemnifying party (the “Indemnifier”) of such assertion. It is further understood that each party will use all reasonable care to identify and notify the Indemnifier promptly concerning any situation that presents or appears likely to present the probability of such a claim for indemnification against the Indemnifier, provided that the failure to give notice as required by this paragraph 6.F. in a timely fashion shall not result in a waiver of any right to indemnification hereunder unless the Indemnifier is prejudiced thereby and then only to the extent of such prejudice. The Claimant shall permit the Indemnifier to assume the defense of any such claim or any litigation resulting from it, provided that Indemnifier’s counsel that is conducting the defense of such claim or litigation shall be approved by the Claimant (which approval shall not be unreasonably withheld), and that the Claimant may participate in such defense at its expense.

The Indemnifier, in the defense of any such claim or litigation, shall not, without the consent of the Claimant, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term the giving by the alleging party or plaintiff to the Claimant of a release from all liability in respect to such claim or litigation.

Article 7. Assignment.

A.This Agreement shall inure to the benefit of and be binding upon the parties and their respective permitted successors and assigns.
B.FAS may, without further consent on the part of the Investment Company, assign its rights and obligations under this Agreement to any entity ultimately controlled by Federated Investors, Inc.

 

CExcept as provided in Paragraph 7.B., FAS may not assign its rights and obligations under this Agreement, whether directly or by operation of law, without the prior written consent of the Investment Company, which consent may not be unreasonably withheld.

Article 8. Representations and Warranties.

FAS represents and warrants to the Investment Company that:

1.It is a statutory 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 each jurisdiction where the nature of its business requires such qualification, and in the state of Delaware;
3.It is empowered under applicable laws and by its Declaration of Trust and by-laws to enter into and perform this Agreement; and
4.All requisite corporate proceedings have been taken to authorize it to enter into and perform its obligations under this Agreement.

Article 9. Term and Termination of Agreement.

A.This Agreement shall be effective from the date set forth above and shall continue indefinitely with respect to each Investment Company and Fund until terminated as follows:
1.the Agreement may be terminated by FAS at any time, without payment of any penalty, upon eighteen (18) months’ written notice to the Investment Company;
2.the Agreement may be terminated by the Investment Company at any time, without payment of any penalty, upon eighteen (18) months’ written notice to FAS; however, in the event, of willful misfeasance, bad faith, gross negligence or reckless disregard of its duties by FAS, the Investment Company may terminate the Agreement upon 60 days’ written notice to FAS, provided that FAS has not cured such willful misfeasance, bad faith, gross negligence or reckless disregard of its duties within the 60 day period of such notice of termination.
B.The termination of this Agreement with respect to one Investment Company or Fund shall not result in the termination of this Agreement with respect to any other Investment Company or Fund. Investment Companies that merge or dissolve during the term of the Agreement, shall, upon payment of all outstanding fees and Out of Pocket Expenses, cease to be a party on the effective date of such merger or dissolution.
C.Articles 6 and 19, 20, 21 and 22 shall survive the termination of this Agreement.

Article 10. Amendment.

This Agreement may be amended or modified only by a written agreement executed by both parties.

Article 11. Interpretive and Additional Provisions.

In connection with the operation of this Agreement, FAS and the Investment Company 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 any charter document.

Article 12. Governing Law.

This Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of the Commonwealth of Pennsylvania without giving effect to any conflicts or choice of laws rule or provision that would result in the application of the domestic substantive laws of any other jurisdiction.

Article 13. Notices.

Except as otherwise specifically provided herein, notices and other writings delivered or mailed postage prepaid to the Investment Company at 4000 Ericsson Drive, Warrendale, Pennsylvania 15086, or to FAS at Federated Investors Tower, Pittsburgh, Pennsylvania, 15222-3779, or to such other address as the Investment Company or FAS may hereafter specify, shall be deemed to have been properly delivered or given hereunder to the respective address.

Article 14. Counterparts.

This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original.

Article 15. 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 16. Successor Administrator.

If a successor Administrator for the Investment Company shall be appointed by the Investment Company, FAS shall upon termination of this Agreement deliver to such successor Administrator at the office of FAS all properties of the Investment Company held by it hereunder. If no such successor Administrator shall be appointed, FAS shall at its office upon receipt of Proper Instructions deliver such properties in accordance with such instructions.

Each Fund will bear all out-of-pocket expenses arising from the transition of Administrative Services to a successor Administrator, including without limitation the expenses of moving or transmitting materials to the successor Administrator.

Article 17. Force Majeure.

If either party is unable to carry out any of its obligations under this Agreement because of conditions beyond its reasonable control, including, but not limited to, acts of war or terrorism, work stoppages, fire, civil disobedience, delays associated with hardware malfunction or availability, riots, rebellions, storms, electrical failures, acts of God, and similar occurrences (“Force Majeure”), this Agreement will remain in effect and the non-performing party’s obligations shall be suspended without liability for a period equal to the period of the continuing Force Majeure (which such period shall not exceed fifteen (15) business days), provided that:

1.the non-performing party gives the other party prompt notice describing the Force Majeure, including the nature of the occurrence and its expected duration and, where reasonably practicable, continues to furnish regular reports with respect thereto during the period of Force Majeure;
2.the suspension of obligations is of no greater scope and of no longer duration than is required by the Force Majeure;
3.no obligations of either party that accrued before the Force Majeure are excused as a result of the Force Majeure; and
4.the non-performing Party uses reasonable efforts to remedy its inability to perform as quickly as possible.

Article 18. Severability.

In the event any provision of this Agreement is held illegal, void or unenforceable, the balance shall remain in effect.

Article 19. Limitations of Liability of the Board and Shareholders of the Investment Company.

The execution and delivery of this Agreement have been authorized by the Board of the Investment Company and signed by an authorized officer of the Investment Company, acting as such, and neither such authorization by the Board 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 member of the Board or Shareholders of the Investment Company, but bind only the property of the Fund, or Class, as provided in the Declaration of Trust.

Article 20. Limitations of Liability of Trustees and Shareholders of the  Company.

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 property of FAS, as provided in FAS’s Declaration of Trust.

Article 21. Confidential Information.

A.    Definition. Each party shall safeguard and hold confidential from disclosure to unauthorized parties all Confidential Information of the other party. For purposes of this Article, “Confidential Information” shall mean any and all non-public information which is in any way connected with, derived from or related to the business of the other party which is either designated as confidential or which, by its nature or under the circumstances surrounding its disclosure, reasonably ought to be treated as confidential, and any notes, memoranda, analyses compilations, studies and other documents, whether prepared by the party or others, to the extent they contain or otherwise reflect such information.

B.    Exceptions. Confidential Information shall not include information to the extent such information (i) is already known to the receiving party free of any restriction at the time obtained, including information in the public domain; (ii) is subsequently learned from an independent third party free of restriction; (iii) becomes publicly known through no breach of this Article; or (iv) is independently developed by one party without reference to information which is confidential.

C.    Security. Each party shall take reasonable security precautions, at least as great as the precautions it takes to protect its own confidential information, to keep confidential the Confidential Information.

D.       Use of Information. Confidential Information may be disclosed, reproduced, used, summarized or distributed only as necessary in the ordinary course of business to provide the services identified in the Agreement, and only as otherwise provided hereunder or as specifically required or permitted by applicable law.

Article 22. Privacy.

A.The Investment Company may disclose shareholder/customer non-public information (“NPI”) to FAS as agent of the Investment Company and solely in furtherance of fulfilling FAS’s contractual obligations under this Agreement in the ordinary course of business to support the Investment Company and its shareholders.
B.FAS hereby agrees to be bound to use and redisclose such NPI (i) for the limited purpose of fulfilling its duties and obligations under this Agreement; (ii) as permitted under Regulation S-P; and (iii) as required by any applicable federal or state law or regulation or request of or by any governmental or regulatory authority or self-regulatory organization having jurisdiction over FAS or the Investment Company.
C.FAS represents and warrants that it has implemented, and will continue to carry out for the term of this Agreement, policies and procedures in compliance with all applicable laws and regulations regarding the privacy of shareholder information which are reasonably designed to:
1.insure the security and confidentiality of records and NPI of Investment Company shareholders/customers, including but not limited to encrypting such information as required by applicable federal and state laws or regulations;
2.protect against any anticipated threats or hazards to the security or integrity of Investment Company customer records and NPI; and
3.protect against unauthorized access to or use of such Investment Company customer records or NPI that could result in substantial harm or inconvenience to any Investment Company customer.

 

Article 23. Further Assurance.

Each party agrees to promptly sign all documents and take any additional actions reasonably requested by the other to accomplish the purposes of this Agreement.

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.

 

INVESTMENT COMPANIES
(listed on Exhibit A hereto)

 

 

 

By: /s/ J. Christopher Donahue
Name:  J. Christopher Donahue
Title:  President
 
FEDERATED ADMINISTRATIVE SERVICES

 

 

 

By: /s/ Peter J. Germain
Name:  Peter J. Germain
Title:  President
 
 

 

Second Amended and Restated Agreement for Administrative Services

EXHIBIT A

This contract is for Federated Funds only.

(Revised as of March 1, 2020)

CONTRACT

DATE INVESTMENT COMPANY
11/1/03 Federated Adjustable Rate Securities Fund
11/1/03     Institutional Shares
11/1/03     Service Shares
6/1/17 Federated Adviser Series  
6/1/19   Federated Emerging Markets Equity Fund Class A Shares
6/1/19     Class C Shares
6/1/19     Institutional Shares
6/1/19     Class R6 Shares
12/1/18   Federated Hermes Absolute Return Credit Fund  
12/1/18     Class A Shares
12/1/18     Class C Shares
12/1/18     Institutional Shares
12/1/18     Class R6 Shares
12/1/18   Federated Hermes Global Equity Fund  
12/1/18     Class A Shares
12/1/18     Class C Shares
12/1/18     Institutional Shares
12/1/18     Class R6 Shares
12/1/18   Federated Hermes Global Small Cap Fund  
12/1/18     Class A Shares
12/1/18     Class C Shares
12/1/18     Institutional Shares
12/1/18     Class R6 Shares
3/1/19   Federated Hermes International Equity Fund  
3/1/19     Class A Shares
3/1/19     Class C Shares
3/1/19     Institutional Shares
3/1/19     Class R6 Shares
9/1/18   Federated Hermes SDG Engagement Equity Fund  
9/1/18     Class A Shares
9/1/18     Class C Shares
9/1/18     Class R6 Shares
9/1/18     Institutional Shares
9/1/18   Federated Hermes SDG Engagement High Yield Credit Fund  
9/1/18     Class A Shares
9/1/18     Class C Shares
9/1/18     Class R6 Shares
9/1/18     Institutional Shares
       
12/1/18   Federated Hermes Unconstrained Credit Fund  
12/1/18     Class A Shares
12/1/18     Class C Shares
12/1/18     Institutional Shares
12/1/18     Class R6 Shares
3/1/20   Federated Hermes US SMID Fund  
3/1/20     Class A Shares
3/1/20     Class C shares
3/1/20     Institutional Share
3/1/20     Class R6 Shares
6/1/19   Federated International Equity Fund  
6/1/19     Class A Shares
6/1/19     Class C Shares
6/1/19     Class R6 Shares
      Institutional Shares
       
       
6/1/19   Federated International Growth Fund  
6/1/19     Class A Shares
6/1/19     Class C Shares
6/1/19     Class R6 Shares
      Institutional Shares
6/1/19      
6/1/17   Federated MDT Large Cap Value Fund  
6/1/17     Class A Shares
6/1/17     Class B Shares
6/1/17     Class C Shares
6/1/17     Class R Shares
6/1/17     Class R6 Shares
6/1/17     Class T Shares
6/1/17     Institutional Shares
6/1/17     Service Shares
11/1/03 Federated Core Trust
03/1/16   Emerging Markets Core Fund  
9/1/10   Federated Bank Loan Core Fund  
11/1/03   Federated Mortgage Core Portfolio  
11/1/03   High-Yield Bond Portfolio  
3/1/08 Federated Core Trust III
    Federated Project and Trade Finance Core Fund  
11/1/03 Federated Equity Funds
12/1/08   Federated Clover Small Value Fund  
12/1/08     Class A Shares
12/1/08     Class C Shares
12/1/08     Institutional Shares
12/29/10     Class R Shares
03/01/16     Class R6 Shares
3/1/17     Class T Shares
12/1/16   Federated Global Strategic Value Dividend Fund  
12/1/16     Class A Shares
12/1/16     Class C Shares
12/1/16     Class R6 Shares
12/1/16     Institutional Shares
3/1/08   Federated International Strategic Value Dividend Fund  
3/1/08     Class A Shares
3/1/08     Class C Shares
9/1/16     Class R6 Shares
3/1/17     Class T Shares
9/1/16     Institutional Shares
11/1/03   Federated Kaufmann Fund  
11/1/03     Class A Shares
11/1/03     Class B Shares
11/1/03     Class C Shares
11/1/03     Class R Shares
3/1/17     Class T Shares
9/1/16     Institutional Shares
9/17/07   Federated Kaufmann Large Cap Fund  
9/17/07     Class A Shares
9/17/07     Class C Shares
9/17/07     Class R Shares
12/30/13     Class R6 Shares
3/1/17     Class T Shares
9/17/07     Institutional Shares
11/1/03   Federated Kaufmann Small Cap Fund  
11/1/03     Class A Shares
11/1/03     Class B Shares
11/1/03     Class C Shares
9/1/05     Class R Shares
9/1/17     Class R6 Shares
3/1/17     Class T Shares
9/1/15     Institutional Shares
11/1/03   Federated MDT Mid Cap Growth Fund  
11/1/03     Class A Shares
11/1/03     Class C Shares
9/1/06     Class R6 Shares
3/1/17     Class T Shares
12/1/09     Institutional Shares
9/1/08   Federated Prudent Bear Fund  
9/1/08     Class A Shares
9/1/08     Class C Shares
3/1/17     Class T Shares
9/1/08     Institutional Shares
12/1/04   Federated Strategic Value Dividend Fund  
12/1/04     Class A Shares
12/1/04     Class C Shares
3/1/05     Class R6 Shares
3/1/17     Class T Shares
6/1/16     Institutional Shares
11/1/03 Federated Equity Income Fund, Inc.
11/1/03     Class A Shares
11/1/03     Class B Shares
11/1/03     Class C Shares
11/1/03     Class F Shares
1/25/13     Class R Shares
3/1/17     Class T Shares
3/1/12     Institutional Shares
11/1/03 Federated Fixed Income Securities, Inc.
11/1/03   Federated Strategic Income Fund  
11/1/03     Class A Shares
11/1/03     Class B Shares
11/1/03     Class C Shares
11/1/03     Class F Shares
1/27/17     Class R6 Shares
3/1/17     Class T Shares
9/1/07     Institutional Shares
       
11/1/03   Federated Municipal Ultrashort Fund  
11/1/03     Class A Shares
11/1/03     Institutional Shares
3/1/19     Class R6 Shares
6/1/08 Federated Global Allocation Fund
6/1/08     Class A Shares
6/1/08     Class B Shares
6/1/08     Class C Shares
6/1/08     Class R Shares
3/1/16     Class R6 Shares
3/1/17     Class T Shares
3/1/09     Institutional Shares
11/1/03 Federated Government Income Securities, Inc.
11/1/03     Class A Shares
11/1/03     Class C Shares
11/1/03     Class F Shares
3/1/20     Institutional Shares
3/1/17     Class T Shares
11/1/03 Federated Government Income Trust
11/1/03     Institutional Shares
11/1/03     Service Shares
11/1/03 Federated High Income Bond Fund, Inc.
11/1/03     Class A Shares
11/1/03     Class B Shares
11/1/03     Class C Shares
1/27/17     Class R6 Shares
3/1/17     Class T Shares
1/27/17     Institutional Shares
   
11/1/03 Federated High Yield Trust
3/1/14   Federated High Yield Trust Class A Shares
3/1/14     Class C Shares
4/30/10     Service Shares
6/1/13     Institutional Shares
9/1/16     Class R6 Shares
3/1/17     Class T Shares
12/1/2015   Federated Equity Advantage Fund Class A Shares
12/1/2015     Institutional Shares
11/1/03 Federated Income Securities Trust
11/1/03   Federated Capital Income Fund  
11/1/03     Class A Shares
11/1/03     Class B Shares
11/1/03     Class C Shares
11/1/03     Class F Shares
6/1/13     Class R Shares
3/1/17     Class T Shares
3/1/12     Institutional Shares
9/1/10   Federated Floating Rate Strategic Income Fund  
9/1/10     Class A Shares
9/1/10     Class C Shares
9/1/10     Institutional Shares
9/1/16     Class R6 Shares
11/1/03   Federated Fund for U.S. Government Securities  
11/1/03     Class A Shares
11/1/03     Class B Shares
11/1/03     Class C Shares
3/1/20     Institutional Shares
3/1/17     Class T Shares
11/1/03   Federated Intermediate Corporate Bond Fund  
11/1/03     Institutional Shares
11/1/03     Service Shares
11/1/03   Federated Muni and Stock Advantage Fund  
11/1/03     Class A Shares
11/1/03     Class B Shares
11/1/03     Class C Shares
5/29/07     Class F Shares
3/1/17     Class T Shares
12/1/10     Institutional Shares
12/1/05   Federated Real Return Bond Fund  
12/1/05     Class A Shares
12/1/05     Class C Shares
12/1/05     Institutional Shares
11/1/03   Federated Short-Term Income Fund  
12/1/03     Class A Shares
11/1/03     Institutional Shares
11/1/03     Service Shares
9/1/16     Class R6 Shares
11/1/03 Federated Institutional Trust
11/1/03   Federated Government Ultrashort Duration Fund  
11/1/03     Class A Shares
11/1/03     Institutional Shares
11/1/03     Service Shares
3/1/16     Class R6 Shares
11/1/03   Federated Institutional High Yield Bond Fund  
12/1/07     Institutional Shares
03/1/16     R6 Shares
6/1/05   Federated Short-Intermediate Total Return Bond Fund  
1/31/14     Class A Shares
9/1/16     Class R6 Shares
6/1/05     Institutional Shares
6/1/05     Service Shares
11/1/03 Federated Hermes Insurance Series
11/1/03   Federated Hermes Fund for U.S. Government Securities II  
11/1/03   Federated Hermes High Income Bond Fund II  
11/1/03     Primary Shares
11/1/03     Service Shares
11/1/03   Federated Hermes Kaufmann Fund II  
11/1/03     Primary Shares
11/1/03     Service Shares
11/1/03   Federated Hermes Managed Volatility Fund II  
6/1/18     Primary Shares
6/1/18     Service Shares
11/1/03   Federated Hermes Government Money Fund II  
9/1/15     Primary Shares
9/1/15     Service Shares
11/1/03   Federated Hermes Quality Bond Fund II  
11/1/03     Primary Shares
11/1/03     Service Shares
11/1/03 Federated International Series, Inc.
11/1/03   Federated Global Total Return Bond Fund  
11/1/03     Class A Shares
11/1/03     Class C Shares
9/1/16     Institutional Shares
11/1/03 Federated Investment Series Funds, Inc.
11/1/03   Federated Bond Fund  
11/1/03     Class A Shares
11/1/03     Class B Shares
11/1/03     Class C Shares
11/1/03
9/1/16		    

Class F Shares

Class R6 Shares

3/1/17     Class T Shares
9/1/07     Institutional Shares
12/1/05 Federated Managed Pool Series
12/1/05   Federated Corporate Bond Strategy Portfolio  
12/1/05   Federated High-Yield Strategy Portfolio  
12/1/05   Federated International Bond Strategy Portfolio  
12/1/14   Federated International Dividend Strategy Portfolio  
12/1/05   Federated Mortgage Strategy Portfolio  
     
7/31/06 Federated MDT Series
7/31/06   Federated MDT All Cap Core Fund  
7/31/06     Class A Shares
7/31/06     Class C Shares
9/1/16     Class R6 Shares
3/1/17     Class T Shares
7/31/06     Institutional Shares
7/31/06   Federated MDT Balanced Fund  
7/31/06     Class A Shares
7/31/06     Class C Shares
9/1/16     Class R6 Shares
3/1/17     Class T Shares
7/31/06     Institutional Shares
7/31/06   Federated MDT Large Cap Growth Fund  
7/31/06     Class A Shares
3/1/07     Class B Shares
7/31/06     Class C Shares
3/1/17     Class T Shares
7/31/06     Institutional Shares
7/31/06   Federated MDT Small Cap Core Fund  
7/31/06     Class A Shares
7/31/06     Class C Shares
7/31/06     Institutional Shares
3/1/16     Class R6 Shares
3/1/17     Class T Shares
7/31/06   Federated MDT Small Cap Growth Fund  
7/31/06     Class A Shares
7/31/06     Class C Shares
7/31/06     Institutional Shares
3/1/16     Class R6 Shares
3/1/17     Class T Shares
   
11/1/03 Federated Municipal Bond Fund, Inc.
11/1/03     Class A Shares
11/1/03     Class B Shares
11/1/03     Class C Shares
5/29/07     Class F Shares
3/1/17     Class T Shares
6/1/17     Institutional Shares
11/1/03 Federated Municipal Securities Income Trust
11/1/03   Federated Michigan Intermediate Municipal Trust  
12/1/04     Class A Shares
3/1/20     Institutional Shares
6/1/06   Federated Municipal High Yield Advantage Fund  
6/1/06     Class A Shares
6/1/06     Class B Shares
6/1/06     Class C Shares
6/1/06     Class F Shares
3/1/17     Class T Shares
6/1/13     Institutional Shares
11/1/03   Federated Ohio Municipal Income Fund  
9/1/08     Class A Shares
11/1/03     Class F Shares
3/1/20     Institutional Shares
11/1/03   Federated Pennsylvania Municipal Income Fund  
11/1/03     Class A Shares
3/1/20     Institutional Shares
3/1/17     Class T Shares
11/1/03 Federated Premier Municipal Income Fund
  (limited purpose of Administrative Services)
11/1/03     Common Shares
      Auction Market Preferred Shares
10/1/16

Federated Project and Trade Finance Tender Fund

(limited purpose of Administrative Services)

11/1/03 Federated Short-Intermediate Duration Municipal Trust
7/1/06     Class A Shares
11/1/03     Institutional Shares
11/1/03     Service Shares
11/1/03 Federated Total Return Government Bond Fund
11/1/03     Institutional Shares
11/1/03     Service Shares
3/1/16     R6 Shares
11/1/03 Federated Total Return Series, Inc.
11/1/03   Federated Select Total Return Bond Fund (Formerly Federated Mortgage Fund)  
11/1/03     Institutional Shares
11/1/03     Service Shares
11/1/03   Federated Total Return Bond Fund  
11/1/03     Class A Shares
11/1/03     Class B Shares
11/1/03     Class C Shares
11/1/03     Class R Shares
4/17/15     Class R6 Shares
3/1/17     Class T Shares
11/1/03     Institutional Shares
11/1/03     Service Shares
11/1/03   Federated Ultrashort Bond Fund  
11/1/03     Class A Shares
11/1/03     Institutional Shares
11/1/03     Service Shares
3/1/19     Class R6 Shares
11/1/03 Federated U.S. Government Securities Fund: 1-3 Years
11/1/03     Class Y Shares
11/1/03     Institutional Shares
11/1/03     Service Shares
11/1/03 Federated U.S. Government Securities Fund: 2-5 Years
11/1/03     Class R Shares
11/1/03     Institutional Shares
11/1/03     Service Shares
11/1/03 Federated World Investment Series, Inc.
11/1/03   Federated Emerging Market Debt Fund  
11/1/03     Class A Shares
11/1/03     Class C Shares
3/1/12     Institutional Shares
11/1/03   Federated International Leaders Fund  
11/1/03     Class A Shares
11/1/03     Class B Shares
11/1/03     Class C Shares
6/1/13     Class R Shares
6/1/13     Class R6 Shares
3/1/17     Class T Shares
6/15/10     Institutional Shares
11/1/03   Federated International Small-Mid Company Fund  
11/1/03     Class A Shares
11/1/03     Class C Shares
3/1/17     Class T Shares
3/1/08     Institutional Shares
11/1/03 Intermediate Municipal Trust
11/1/03   Federated Intermediate Municipal Trust  
11/1/03     Institutional Shares
11/1/03     Service Shares
11/1/03 Money Market Obligations Trust
11/1/03   Federated California Municipal Cash Trust  
12/1/04     Capital Shares
11/1/03     Cash II Shares
12/1/04     Cash Series Shares
11/1/03     Wealth Shares
11/1/03     Service Shares
12/1/04   Federated Capital Reserves Fund  
11/1/03   Federated Georgia Municipal Cash Trust  
11/1/03   Federated Government Obligations Fund  
9/1/17     Administrative Shares
6/1/17     Advisor Shares
12/1/04     Capital Shares
6/1/15     Cash II Shares
6/1/15     Cash Series Shares
12/1/15     Class R Shares
11/1/03     Institutional Shares
12/1/14     Premier Shares
11/1/03     Service Shares
11/1/03     Trust Shares
11/1/03   Federated Government Obligations Tax Managed Fund  
6/1/15     Automated Shares
11/1/03     Institutional Shares
11/1/03     Service Shares
12/1/04   Federated Government Reserves Fund  
6/1/15     Class A Shares
6/1/15     Class B Shares
6/1/15     Class C Shares
6/1/15     Class F Shares
6/1/15     Class P Shares
11/1/03   Federated Institutional Money Market Management  
3/1/14     Capital Shares
9/1/07     Eagle Shares
9/1/07     Institutional Shares
3/1/14     Service Shares
11/1/03   Federated Institutional Prime Obligations Fund  
11/1/03     Capital Shares
11/1/03     Institutional Shares
11/1/03     Service Shares
11/1/03   Federated Institutional Prime Value Obligations Fund  
11/1/03     Capital Shares
11/1/03     Institutional Shares
11/1/03     Service Shares
11/1/03   Federated Institutional Tax-Free Cash Trust  
12/1/15     Premier Shares
12/1/15     Institutional Shares
11/1/03   Federated Massachusetts Municipal Cash Trust  
12/1/04     Cash Series Shares
11/1/03     Service Shares
9/1/17     Wealth Shares
11/1/03   Federated Municipal Obligations Fund  
10/27/17     Automated Shares
11/1/03     Capital Shares
6/1/15     Cash II Shares
6/1/15     Cash Series Shares
6/1/15     Investment Shares
11/1/03     Service Shares
11/1/03     Wealth Shares
11/1/03   Federated New York Municipal Cash Trust  
11/1/03     Cash II Shares
12/1/04     Cash Series Shares
12/1/04     Wealth Shares
11/1/03     Service Shares
11/1/03   Federated Pennsylvania Municipal Cash Trust  
11/1/03     Cash Series Shares
11/1/03     Wealth Shares
11/1/03     Service Shares
11/1/03   Federated Prime Cash Obligations Fund  
6/1/17     Advisor Shares
6/1/15     Automated Shares
11/1/03     Capital Shares
6/1/15     Cash II Shares
6/1/15     Cash Series Shares
6/1/15     Class R Shares
11/1/03     Wealth Shares
11/1/03     Service Shares
6/1/15     Trust Shares
11/1/03   Federated Tax-Free Obligations Fund  
6/1/17     Advisor Shares
11/1/03     Service Shares
11/1/03     Wealth Shares
11/1/03   Federated Treasury Obligations Fund  
6/13/14     Automated Shares
11/1/03     Capital Shares
11/1/03     Institutional Shares
      Service Shares
11/1/03     Trust Shares
11/1/03   Federated Trust for U.S. Treasury Obligations  
6/1/15     Cash II Shares
6/1/15     Cash Series Shares
6/1/15     Institutional Shares
11/1/03   Federated U.S. Treasury Cash Reserves  
11/1/03     Institutional Shares
11/1/03     Service Shares
11/1/03   Federated Virginia Municipal Cash Trust  
12/1/04     Cash Series Shares
11/1/03     Service Shares

 

 

 

 

 

 
 

EXHIBIT B

Funds Not Charged an Administrative Services Fee

 

Emerging Markets Core Fund

Federated Mortgage Core Portfolio

High Yield Bond Portfolio

Federated Bank Loan Core Fund

Federated Project and Trade Finance Core Fund

 

 

 EX-99.FUND ACT AGR 19 ex28h4factagmt.htm FUND ACCOUNTING AGREEMENT

Exhibit 28 (h) (4) under Form N-1A
Exhibit 99 under item 601/REG. S-K

 

 

FUND ACCOUNTING AGREEMENT

 

THIS AGREEMENT dated as of March 1, 2011 is made, severally and not jointly (except that the parties agree that the calculation required by paragraph 31 hereunder shall be joint and not several) by and between the registered investment companies listed on Schedule I to this Agreement, as it may be amended from time to time (each stand-alone registered investment company and each series company of a registered investment company a “Fund” and collectively the “Funds”) and The Bank of New York Mellon, a New York corporation authorized to do a banking business, having its principal place of business at One Wall Street, New York, New York 10286 (hereinafter called the “Bank”).

 

WITNESSETH:

 

In consideration of the mutual agreements herein contained, the Funds and the Bank hereby agree as follows:

 

1.       The Funds hereby appoint the Bank to perform the duties hereinafter set forth.

 

2.       The Bank hereby accepts appointment and agrees to perform the duties hereinafter set forth.

 

3.       Subject to the provisions of paragraphs 4 and 5 below, the Bank shall compute the net asset value per share of each class of shares of each Fund listed on Schedule I hereto (all references to “Fund” shall be deemed to include all classes of the Fund) and shall value the securities held by each Fund (the “Securities”) at such times and dates and in the manner specified in the then currently effective registration statement or offering memorandum (the “Offering Materials”) of each Fund, except that notwithstanding any language in the Offering Materials, in no event shall the Bank be required to determine, or have any obligations with respect to, whether a market price represents any fair or true value, nor to adjust any price to reflect any events or announcements, including, without limitation, those with respect to the issuer thereof, it being agreed that all such determinations and considerations shall be solely for each Fund. However, the Bank agrees to incorporate into its calculation of a Fund’s net asset value any price or factor given by a Fund or by a third party valuation service upon instruction by a Fund.

 

4.       To the extent valuation of Securities or computation of a Fund’s net asset value as specified in the Fund’s then currently effective Offering Materials is at any time inconsistent with any applicable laws or regulations, the Fund shall immediately so notify the Bank in writing and thereafter shall either furnish the Bank at all appropriate times with the values of such Securities and each Fund’s net asset value, or subject to the prior approval of the Bank, instruct the Bank in writing to value the Securities and compute each Fund’s net asset value in a manner which the Fund then represents in writing to be consistent with all applicable laws and regulations. A Fund may also from time to time, subject to the prior approval of the Bank, instruct the Bank in writing to compute the value of the Securities or a Fund’s net asset value in a manner other than as specified in paragraph 3 of this Agreement. By giving such instruction, the Fund shall be deemed to have represented that such instruction is consistent with all applicable laws and regulations and the then currently effective Offering Materials of the Fund. The Fund shall have sole responsibility for determining the method of valuation of Securities and the method of computing each Fund’s net asset value.

 

5.       The Fund shall furnish the Bank with any and all instructions, explanations, information, specifications and documentation as deemed reasonably necessary by the Bank in the performance of its duties hereunder, including, without limitation, the amounts or written formula for calculating the amounts and times of accrual of Fund’s liabilities and expenses. The Bank shall not be required to include as a Fund’s liabilities and expenses, nor as a reduction of net asset value, any accrual for any federal, state, or foreign income taxes unless the Fund shall have specified to the Bank the precise amount of the same to be included in liabilities and expenses or used to reduce net asset value. In calculating the prices for Securities the Bank will use the price services authorized by an authorized person for a Fund listed on Appendix B to this Agreement (“Authorized Persons List”). Such authorized person shall provide the list of authorized pricing services to the Bank in a writing signed by such authorized person substantially in the form of Appendix C to this Agreement. The Bank shall be entitled to rely on the last Appendix C signed by an authorized person actually received by the Bank. A Fund shall also furnish the Bank with bid, offer, or market values of Securities if the Bank notifies the Fund that same are not available to the Bank from a Fund’s Authorized Pricing Services. At any time and from time to time, a Fund also may furnish the Bank with bid, offer, or market values of Securities and instruct the Bank to use such information in its calculations hereunder.

 

6.       The Bank shall advise the Fund, the Fund’s custodian and the Fund’s transfer agent of the net asset value of each Fund upon completion of the computations required to be made by the Bank pursuant to this Agreement.

 

7.       The Bank shall, as agent for the Fund, maintain and keep current the books, accounts and other documents, if any, and perform the additional duties, listed in Appendix A hereto and made a part hereof, as such Appendix A may be amended from time to time. Such books, accounts and other documents shall be made available upon reasonable request for inspection by officers, employees and auditors of a Fund during the Bank’s normal business hours, and shall be preserved for a period of seven (7) years. The Bank and the Fund’s intend to enter into a Service Level Guidelines Agreement (“SLA”), that may be amended from time to time by the parties, that will outline the Fund’s expectations with respect to specific services to be provided by the Bank and the operational mechanics of providing such services.

 

8.       All records maintained and preserved by the Bank pursuant to this Agreement which a Fund is required to maintain and preserve in accordance with the above-mentioned Rules shall be and remain the property of a Fund and shall be surrendered to a Fund promptly upon request in the form in which such records have been maintained and preserved. Upon reasonable request of a Fund, the Bank shall provide in hard copy or electronic format, whichever the Bank shall elect, any records included in any such delivery which are maintained by the Bank on a computer disc, or are similarly maintained, and a Fund shall reimburse the Bank for its expenses of providing the same.

 

9.       The Bank, in performing the services required of it under the terms of this Agreement, shall be entitled to rely fully on the accuracy and validity of any and all instructions, explanations, information, specifications and documentation furnished to it by the Fund and shall have no duty or obligation to review the accuracy, validity or propriety of such instructions, explanations, information, specifications or documentation, including, without limitation, evaluations of Securities; the amounts or formula for calculating the amounts and times of accrual of a Fund’s liabilities and expenses; the amounts receivable and the amounts payable on the sale or purchase of Securities; the amounts receivable or amounts payable for the sale or redemption of Fund shares effected by or on behalf of the Fund. In the event the Bank’s computations hereunder rely, in whole or in part, upon information, including, without limitation, bid, offer or market values of Securities or other assets, or accruals of interest or earnings thereon, from Authorized Pricing Services, the Bank shall not be responsible for, under any duty to inquire into, or deemed to make any assurances with respect to, the accuracy or completeness of such information.

 

10.       The Bank shall not be required to inquire into any valuation of Securities or other assets by a Fund or any third party described in preceding paragraph 9 hereof, even though the Bank in performing services similar to the services provided pursuant to this Agreement for others may receive different valuations of the same or different securities of the same issuers.

 

11.        The Bank, in performing the services required of it under the terms of this Agreement, shall not be responsible for determining whether any interest accruable to a Fund is or will be actually paid, but will accrue such interest until otherwise instructed by a Fund.

 

12.       The Bank shall not be responsible or liable for any failure or delay in the performance of its obligations under this Agreement arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including without limitation, acts of God; earthquakes; fires; floods; wars; civil or military disturbances; sabotage; epidemics; riots; interruptions; loss, malfunctions of utilities or communication services, accidents; labor disputes; acts of civil or military authority or governmental actions. Nor shall the Bank be responsible for delays or failures to supply the information or services specified in this Agreement where such delays or failures are caused by the failure of any person(s) other than the Bank to supply any instructions, explanations, information, specifications or documentation deemed reasonably necessary by the Bank in the performance of its duties under this Agreement.

 

13.       No provision of this Agreement shall prevent the Bank from offering services similar or identical to those covered by this Agreement to any other corporations, associations or entities of any kind. Any and all operational procedures, techniques and devices developed by the Bank in connection with the performance of its duties and obligations under this Agreement, including those developed in conjunction with a Fund, shall be and remain the property of the Bank, and the Bank shall be free to employ such procedures, techniques and devices in connection with the performance of any other contract with any other person whether or not such contract is similar or identical to this Agreement.

 

14.       The Bank may, with respect to questions of law, apply to and obtain the advice and opinion of counsel to the independent trustees of a Fund or counsel that is mutually agreed upon by a Fund and Bank and shall be entitled to rely on the advice or opinion of such counsel.

 

15.       The Bank shall be entitled to rely upon any oral instructions received by the Bank and reasonably believed by the Bank to be given by or on behalf of a Fund, even if the Bank subsequently receives written instructions contradicting such oral instructions. The books and records of the Bank with respect to the content of any oral instruction shall be binding and conclusive.

 

16.       Notwithstanding any other provision in this Agreement, the Bank shall have no duty or obligation with respect to, including without limitation, any duty or obligation to determine, or advise or notify a Fund of: (a) the taxable nature of any distribution or amount received or deemed received by, or payable to, a Fund; (b) the taxable nature or effect on a Fund or its shareholders of any corporate actions, class actions, tax reclaims, tax refunds, or similar events; (c) the taxable nature or taxable amount of any distribution or dividend paid, payable or deemed paid, by a Fund to its shareholders; or (d) the effect under any federal, state, or foreign income tax laws of a Fund making or not making any distribution or dividend payment, or any election with respect thereto.

 

17.       The Bank shall be held to a standard of reasonable care in carrying out the provisions of this Agreement except as otherwise provided in this Agreement. The Bank shall not be liable for any loss, damage or expense, including counsel fees and other costs and expenses of a defense against any claim or liability, resulting from, arising out of, or in connection with its performance hereunder, including its actions or omissions, the incompleteness or inaccuracy of any specifications or other information furnished by the Fund, or for any delays caused by circumstances beyond the Bank’s control, unless such loss, damage or expense arises out of the negligence or willful misconduct of the Bank. In no event shall the Bank be liable to the Funds or any third party for special, indirect, or consequential damages, or for lost profits or loss of business, arising under or in connection with this Agreement, even if previously informed of the possibility of such damages and regardless of the form of action.

 

18.       Without limiting the generality of the foregoing, the Fund shall indemnify the Bank against and save the Bank harmless from any loss, damage or expense, including counsel fees and other costs and expenses of a defense against any claim or liability, arising from any one or more of the following:

 

(a) Errors in records or instructions, explanations, information, specifications or documentation of any kind, as the case may be, supplied to the Bank by any third party described in preceding paragraph 9 hereof or by or on behalf of a Fund;

 

(b) Action or inaction taken or omitted to be taken by the Bank pursuant to written or oral instructions of the Fund or otherwise without negligence or willful misconduct;

 

(c) Any action taken or omitted to be taken by the Bank in good faith in accordance with the advice or opinion of counsel for the independent trustees of a Fund;

 

(d) Any improper use by a Fund or its agents, distributor or investment advisor of any valuations or computations supplied by the Bank pursuant to this Agreement;

 

(e) The method of valuation of the Securities, provided that such valuation is carried out in accordance with preceding paragraph 5 of this Agreement, and the method of computing each Fund’s net asset value; or

 

(f) Any valuations of Securities or net asset value provided by the Fund.

 

19.       In consideration for all of the services to be performed by the Bank as set forth herein the Bank shall be entitled to receive reimbursement for all out-of-pocket expenses and such compensation as may be agreed upon in writing from time to time between the Bank and the Fund.

 

20.        Attached hereto as Appendix B is a list of persons duly authorized to give any written or oral instructions, or written or oral specifications, by or on behalf of the Fund. From time to time the Fund may deliver a new Appendix B to add or delete any person and the Bank shall be entitled to rely on the last Appendix B actually received by the Bank.

 

21.       The Fund represents and warrants to the Bank that it has all requisite power to execute and deliver this Agreement, to give any written or oral instructions contemplated hereby, and to perform the actions or obligations contemplated to be performed by it hereunder, and has taken all necessary action to authorize such execution, delivery, and performance.

 

22.       The Bank represents and warrants to each Fund that:

 

(a) it has all requisite powers to execute and deliver this Agreement and to perform the actions or obligations contemplated to be performed by it hereunder, and has taken all necessary action to authorize such execution, delivery and performance;

 

(b) it is conducting its business in material compliance with all applicable laws and requirements, both state and federal, and has obtained all regulatory licenses, approvals and consents necessary to carry on its business as now conducted.

 

(c) In connection with the Funds’ obligations under Rule 38a-1 of the Investment Company Act of 1940, as amended (the “1940 Act”) the Bank agrees as follows:

 

(1) the Bank agrees to reasonably cooperate with the Funds and the Funds’ Chief Compliance Officer in the administration of the Funds’ compliance program (“Compliance Program”) as required by the Securities and Exchange Commission (“SEC”);

 

(2) the Bank has implemented and maintains policies and procedures reasonably designed to prevent, detect and promptly correct any violations of Federal Securities Laws with respect to services the Bank provides to the Funds (“Compliance Procedures”);

 

(3) the Bank will provide summaries of such Compliance Procedures that may affect in any material respect, the services provided hereunder by the Bank to the Funds;

 

(4) the Bank periodically reviews the adequacy of such Compliance Procedures and the effectiveness of their implementation and upon the request of a Fund, will provide the then current summaries of internal Compliance Procedures between such reviews;

 

(5) in the event that an officer or employee of the Bank administering this Agreement has actual knowledge of the occurrence of a “Material Compliance Matter” (as defined in Rule 38a-1(e)(2)) which the Bank reasonably believes is related to or will affect the Fund, the Bank will, if permitted by law and the Bank’s regulators, notify the Fund of such occurrence;

 

(6) except where prohibited by law, regulations or rule or as may be directed or instructed by the Bank’s regulators, the Bank agrees to notify the Funds following quarter-end of any inspections by, or other inquiries received from, the SEC or any other regulatory or law enforcement agency after the date of this certification, which relate to the services provided by the Bank to the Funds hereunder. For the avoidance of doubt, such notification obligation shall be satisfied if the notice is contained in any publicly available regulatory filing.

 

(d) The Bank will maintain throughout the term of this Agreement, such contingency plans as it reasonably believes to be necessary and appropriate to recover its operations from the occurrence of a disaster and which are consistent with any statute or regulations to which it is subject that imposes business resumption and contingency planning standards. The Bank agrees to provide the Funds with a summary of its contingency plan as it relates to the systems used to provide the services hereunder and to provide the Funds with periodic updates of such summary upon the Funds’ reasonable request.

 

(e)       The Bank shall perform the services listed in Appendix A hereto, as such Appendix A may be amended from time to time.

 

23.       This Agreement shall not be assignable by a Fund without the prior written consent of the Bank, or by the Bank without the prior written consent of each Fund.

 

24.       This Agreement shall become effective on the date first written above and shall remain in full force and effect for a period of four (4) years from the effective date of the Agreement (the “Initial Term”) and shall automatically continue in full force and effect after such Initial Term unless either party terminates this Agreement by written notice to the other party at least six (6) months prior to the expiration of the Initial Term. Additionally, if the Bank (or any of its affiliates) engages in (i) any act or omission which constitutes a breach of any representation, warranty, term, or obligation contained in this Agreement, which upon notice the Bank has not cured within 5 business days or (ii) any act or omission which constitutes negligence, reckless misconduct, willful malfeasance, or lack of good faith in fulfilling the terms and obligations of this Agreement, then each Fund shall have the right to immediately terminate this Agreement.

 

25.       Either party may terminate this Agreement at any time after the Initial Term upon at least ninety (90) days prior written notice to the other party. Upon the date set forth in such notice, the Bank shall deliver to the Fund all records then the property of the Fund and, upon such delivery, the Bank shall be relieved of all duties and responsibilities under the Agreement.

 

26.       This Agreement may not be amended or modified in any manner except by written agreement executed on behalf of both parties hereto.

 

27.        All laws and rules of construction of the State of New York (other than those relating to choice of laws) shall govern the rights, duties and obligations of the parties hereto. The Fund and the Bank hereby consent to the exclusive jurisdiction of a state or federal court situated in New York City, New York in connection with any dispute arising hereunder. The Fund hereby irrevocably waives, to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to the laying of venue of any such proceeding brought in such a court and any claim that such proceeding brought in such a court has been brought in an inconvenient forum. The Fund and the Bank each hereby irrevocably waives any and all rights to trial by jury in any legal proceeding arising out of or relating to this Agreement.

 

28.       The performance and provisions of this Agreement are intended to benefit only the Bank and each Fund, and no rights shall be granted to any other person by virtue of this Agreement.

 

29.       The Bank hereby represents and warrants that it has implemented and shall maintain appropriate measures designed to satisfy the requirements of federal and New York law applicable to the Bank with respect to the confidentiality of the portfolio holdings and transactions of each Fund. Upon request, the Bank shall annually make available to each such Fund such summaries or audit reports, including any SAS 70 report, as the Bank generally makes available to its similar customers.

 

30.       The Bank is expressly put on notice of the limitation of liability as set forth in the Declaration of Trust of those registered investment companies which are business trusts and agrees that the obligations and liabilities assumed by a registered investment company or any Fund pursuant to this Agreement, including without limitation, any obligations or liability to indemnify the Bank, shall be limited in any case to the relevant Fund and its assets and that the Bank shall not seek satisfaction of any such obligation from the shareholders of the relevant Fund, from any other Fund nor its shareholders, from the Trustees, Officers, employees or agents of the registered investment company or Fund, or any of them. In addition, in connection with the discharge and satisfaction of any claim made by the Bank involving more than one Fund, the Trustees or Officers of such Funds shall have the exclusive right to determine the appropriate allocations of liability for any claim between or among the Funds.

 

31.       [          ]

 

 

 
 

 

Each of the registered investment companies or series thereof listed on Schedule I to this Agreement

 

By:_/s/ Richard A. Novak

Name: Richard A. Novak

Title: Treasurer

 

Attest:_not attested

 

THE BANK OF NEW YORK MELLON

 

By: /s Andrew Pfeifer

Name: Andrew Pfeifer

Title: Vice President

 

Attest:_not attested

 
 

APPENDIX A TO FUND ACCOUNTING AGREEMENT

BETWEEN

THE BANK OF NEW YORK MELLON

AND

THE FEDERATED FUNDS

 

I.       The Bank of New York Mellon (the “Bank”), as agent for The Federated Funds (the “Fund”), shall maintain the following records on a daily basis for each Fund.

1.       Report of priced portfolio securities

2.       Statement of net asset value per share

 

II.       The Bank shall maintain the following records on a monthly basis for each Fund:

1.       General Ledger

2.       General Journal

3.       Cash Receipts Journal

4.       Cash Disbursements Journal

5.       Subscriptions Journal

6.       Redemptions Journal

7.       Accounts Receivable Reports

8.       Accounts Payable Reports

9.       Open Subscriptions/Redemption Reports

10.       Transaction (Securities) Journal

11.       Broker Net Trades Reports

 

III.       The Bank shall prepare a Holdings Ledger on a quarterly basis, and a Buy-Sell Ledger (Broker’s Ledger) on a semiannual basis for each Fund

 

The above reports may be printed according to any other required frequency to meet the requirements of the Internal Revenue Service, the Securities and Exchange Commission and the Fund’s Auditors.

 

IV.       For internal control purposes, the Bank uses the Account Journals provided by The Bank of New York Mellon Custody System to record daily settlements of the following for each Fund:

1.       Securities bought

2.       Securities sold

3.       Interest received

4.       Dividends received

5.       Capital stock sold

6.       Capital stock redeemed

7.       Other income and expenses

 

All portfolio purchases for the Fund are recorded to reflect expected maturity value and total cost including any prepaid interest.

 

V.       The Bank shall monitor the triggers used to determine when the ITG fair value pricing procedures may be invoked, as further detailed in the SLA, and inform the appropriate Federated personnel that triggers had been met.

 

VI.       The Bank shall complete monthly preferred shares “asset coverage” test (as that term is defined in Section 18(h) of the Investment Company Act of 1940, as amended) following the compliance procedures contained in the SLA, as such SLA may be amended from time to time by mutual agreement of the parties (the “Compliance Procedures”).

 

VII.       The Bank shall complete monthly preferred shares basic maintenance amount test for Fitch Ratings, Ltd. (“Fitch”) following the Compliance Procedures.

 

VIII.       The Bank shall complete monthly preferred shares basic maintenance amount test for Moody’s Investors Service, Inc. (“Moody’s”) following the Compliance Procedures.

 
 

APPENDIX B

 

 

The Authorized Persons List, as amended from time to time, is hereby incorporated by reference.

 
 

CERTIFICATE OF AUTHORIZED PERSONS

[          ]

 

 

 

 
 

 

APPENDIX C

 

FAIR PRICING AUTHORIZATION MATRIX

 

 

[          ]

 

 
 

SCHEDULE I

 

(UPDATED AS OF 8/1/12)

 

 

A.       Money Market Funds

 

Federated Automated Government Cash Reserves

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Securities Fund, Inc.

Federated Municipal Ultrashort Fund

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

C.       Other Funds

 

Federated Emerging Market Debt Fund

Federated Enhanced Treasury Income Fund

Federated Global Equity Fund

Federated InterContinental Fund

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated Prudent Absolute Return Fund (formerly, Federated Market Opportunity Fund)

Federated MDT Stock Trust

Federated Muni and Stock Advantage Fund

Federated Prudent DollarBear Fund

Federated Unconstrained Bond Fund

 

 

 
 

SCHEDULE II

 

Accounting, Administration and Custody Fee Schedule

Effective March 1, 2011

 

 

[          ]

 

 

 
 

SCHEDULE III

 

Security Pricing Fee Rate Card  
(per day per security)  
Vendor Asset Type Asset Group Daily Fee  
StatPro (FRI) Fixed FOREIGN BOND 0.80  
JP Morgan (Bear Stearns PricingDirect) Derivatives CR.DEFAULT SWAPS 4.00  
  INT.RATE. SWAPS 0.50  
  SWAPTION 1.00  
Fixed CMO 2.00  
  FHLMC 0.80  
  FNMA 0.80  
  FOREIGN BOND 0.80  
  INTEREST ONLY BOND 0.80  
  MORTGAGE RELATED 0.80  
  CORPORATE BOND 0.40  
  INFLATION INDEX 0.40  
  PRINCIPAL ONLY BOND 0.40  
  GNMA1 0.25  
  GNMA2 0.25  
  GOVERNMENT BOND 0.25  
  TREASURY BILL 0.25  
  TREASURY BOND 0.25  
  TREASURY NOTE 0.25  
IDC Derivatives FUTURE 0.15  
  OPTION 0.15  
  SWAPTIONS 0.10  
Equity FOREIGN STOCK 0.50  
  EQUITY(COMMON STOCK) 0.15  
  MUTUAL FUND 0.15  
  PREFERRED STOCK 0.15  
  RIGHT 0.15  
  WARRANTS 0.15  
Fixed FOREIGN BOND 1.11  
  MORTGAGE RELATED 0.89  
  CONVERTIBLE BOND 0.56  
  CORPORATE BOND 0.56  
  DEMAND NOTE 0.56  
  FHLMC 0.56  
  FNMA 0.56  
  GNMA1 0.56  
  GNMA2 0.56  
  GOVERNMENT BOND 0.56  
  INFLATION INDEX 0.56  
  INTEREST ONLY BOND 0.56  
  PRINCIPAL ONLY BOND 0.56  
  STEPPED BOND 0.56  
  TREASURY BILL 0.56  
  TREASURY BOND 0.56  
  TREASURY NOTE 0.56  
Money Market CERTIFICATE OF DEPOSIT 0.56  
  COMMERCIAL PAPER 0.56  
  MONEY MARKET 0.56  
JJ Kenny Money Market MONEY MARKET 0.28  
Muni MUNICIPAL BOND 0.60  
Markit Partners Derivatives Cr. Df. Swap In.Tranche 4.55  
  Swaption on CDS 3.48  
  Swaption on CDX 3.48  
  CMBX Index Swap 2.27  
  CDSwap Single Name ABS 2.27  
  ABX Index Swap 2.27  
  Volatility Swap 2.17  
  Interest Rate Swaption 1.52  
  Cr.Df.Swap Single Name 1.52  
  Cr. Default Swap Index 1.52  
  Swaption on IRS 1.45  
  Option 1.27  
  Index Option 1.27  
  Equity Option 1.27  
  Debt Option 1.27  
  Total Return Swap 1.14  
  FX / Currency Option 0.99  
  Zero Coupon IR Swap 0.99  
  Currency Swap 0.61  
  Interest Rate Swap 0.61  
Muller (IDC) Fixed CORPORATE BOND 0.56  
  DEMAND NOTE 0.56  
  FHLMC 0.56  
  FNMA 0.56  
  FOREIGN BOND 1.11  
  GOVERNMENT BOND 0.56  
  MORTGAGE RELATED 0.89  
  TREASURY BILL 0.56  
  TREASURY BOND 0.56  
  TREASURY NOTE 0.56  
Money Market CERTIFICATE OF DEPOSIT 0.56  
  COMMERCIAL PAPER 0.56  
  MONEY MARKET 0.56  
  TIME DEPOSITS 0.56  
Muni MUNICIPAL BOND 0.61  
Reuters Derivatives FUTURE/OPTIONS 0.10  
 
Equity EQUITY(COMMON STOCK) 0.08  
  FOREIGN STOCK 0.10  
  PREFERRED STOCK 0.08  
  WARRANTS 0.08  
Fixed CONVERTIBLE BOND 0.50  
  CORPORATE BOND 0.30  
  FHLMC 0.15  
  FNMA 0.15  
  FOREIGN BOND 0.40  
  GNMA1 0.30  
  GNMA2 0.30  
  GOVERNMENT BOND 0.15  
  INFLATION INDEX 0.10  
  MORTGAGE RELATED 0.50  
  TREASURY BILL 0.15  
  TREASURY BOND 0.15  
  TREASURY NOTE 0.15  
Money Market MONEY MARKET 0.08  

 

 
 

FIRST AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS FIRST AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated March 1, 2011;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and Bank desire to amend the Agreement subject to the terms and conditions set forth herein; and

 

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:

 

1.       Schedule I to the Agreement is hereby amended and updated to add the following Funds, effective March 25, 2011:

 

Muni Fixed Income Funds:

 

·Federated Municipal Ultrashort Fund, a portfolio of Federated Fixed Income Securities, Inc.
·Federated Premier Municipal Income Fund
·Federated Premier Intermediate Municipal Income Fund
·Federated Short-Intermediate Duration Municipal Trust

Other Funds:

·Federated Muni and Stock Advantage Fund, a portfolio of Federated Income Securities Trust
·Federated International Bond Fund, a portfolio of Federated International Series, Inc.
·Federated International Bond Strategy Portfolio, a portfolio of Federated Managed Pool Series
·Federated Emerging Market Debt Fund, a portfolio of Federated World Investment Series, Inc.
·Federated Prudent DollarBear Fund, a portfolio of Federated Income Securities Trust
·Federated InterContinental Fund, a portfolio of Federated Equity Funds
·Federated International Leaders Fund, a portfolio of Federated World Investment Series, Inc.
·Federated International Small-Mid Company Fund, a portfolio of Federated World Investment Series, Inc.
·Federated International Strategic Value Dividend Fund, a portfolio of Federated Equity Funds

 

2. The Agreement shall remain in full force and effect as amended by this Amendment.

 

[Remainder of Page Intentionally Left Blank]

 

 
 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of March 25, 2011.

 

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By: /s/ Richard A. Novak

Name: Richard A. Novak

Title: Treasurer

 

 

THE BANK OF NEW YORK MELLON

 

By: /s/ Andrew Pfeifer

Title: Vice President

 
 

 

 

COMPLIANCE SUPPORT SERVICES ADDENDUM

TO

FUND ACCOUNTING AGREEMENT

 

 

This Compliance Support Services Addendum is effective as of May 31, 2012 by and between the investment companies listed on Exhibit 1 to this Addendum (each a “Fund” and collectively, the “Funds”) and THE BANK OF NEW YORK MELLON (“BNY Mellon”).

 

BACKGROUND:

 

A.The Funds and BNY Mellon are parties to a certain Fund Accounting Agreement dated March 1, 2011, as amended (the “Agreement”).

 

B.This Addendum is intended to supplement the Agreement with regard to additional services offered by BNY Mellon and shall be applicable solely to the Funds identified at Exhibit 1 hereto.

 

C.Each Fund hereby instructs BNY Mellon to provide the compliance support services (“Support Services”) described in this Addendum, and BNY Mellon acknowledges such instruction and is willing to provide such Support Services pursuant to the terms set forth herein.

 

D.This Background section is hereby incorporated by reference in and made a part of this Addendum.

 

TERMS:

 

In consideration of the premises and mutual covenants herein contained, the parties hereto agree as follows:

 

1.BNY Mellon shall provide, or cause its affiliates to provide, the Support Services, as they are described at Exhibit 2 hereto, subject to all applicable terms and conditions of the Agreement.

 

2.As compensation for providing the Support Services, the Funds shall pay BNY Mellon a fee or fees as may be agreed to from time to time in writing by the parties hereto.

 

Each Fund hereby represents and warrants to BNY Mellon that (i) the terms of this Addendum, (ii) the fees and expenses associated with this Addendum and (iii) any benefits accruing to BNY Mellon and/or any affiliate of such Fund relating to this Addendum have been fully disclosed to the Board of Trustees of the Fund and that, if required by applicable law, such Board of Trustees has approved or will approve the terms of this Addendum, any such fees and expenses, and any such fees and expenses, and any such benefits.

 

3.Notwithstanding any provision of this Addendum, the Support Services are not, nor shall they be construed as constituting, legal advice or the provision of legal services for or on behalf of a Fund or any other person. Neither this Addendum nor the provision of the Support Services establishes or is intended to establish an attorney-client relationship between BNY Mellon and a Fund or any other person.

 

4.While BNY Mellon, when providing certain of the Support Services, may identify out-of-compliance conditions, BNY Mellon does not, and could not for the fees charged, make any guarantees, representations or warranties with respect to its ability to identify any or all such conditions.

 

5.The parties hereto acknowledge that all work produced by BNY Mellon in providing the Support Services, and the performance of the Support Services in general, by BNY Mellon pursuant to this Addendum will be a the request and direction of each Fund and Fund’s chief compliance officer (“CCO”). BNY Mellon disclaims liability to the Fund, and the Fund is solely responsible, for the selection, qualifications and performance of the Fund’s CCO and the adequacy and effectiveness of the Fund’s compliance program.

 

6.BNY Mellon shall not be responsible for: (a) delays in the transmission to it by the Funds, the Funds’ adviser and entities unaffiliated with BNY Mellon (collectively, for this Addendum, “Third Parties”) of data required for the Support Services, (b) inaccuracies of, errors in or omissions of, such data provided to it by any Third Party, and (c) review of such data provided to it by any Third Party. This Section 6 is a limitation of responsibility provision for the benefit of BNY Mellon, and shall not be used to imply any responsibility or liability against BNY Mellon.

 

7.Miscellaneous.

 

(a)As hereby supplemented, the Agreement shall remain in full force and effect. In the event of a conflict between the terms of this Addendum and the terms of the Agreement, the terms of this Addendum shall control with respect to the Support Services.

 

(b)This Addendum may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The facsimile signature of any party to the Addendum shall constitute the valid and binding execution hereof by such party.

 

(c)If any provision or provisions of this Addendum shall be held to be invalid, unlawful or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.

 

 

(Signature page follows.)

 
 

IN WITNESS WHEREOF, the parties hereto have caused this Addendum to be executed by their duly authorized officers designated below on the date and year noted below.

 

 

 

On behalf of each of the Funds indicated on Exhibit 1,

as may be amended from time to time

 

 

By: /s/ Richard A. Novak

Name: Richard A. Novak

Title: Treasurer

 

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Jay F. Nusblatt

Name: Jay F. Nusblatt

Title: Head of U.S. Fund Accounting and Authorized Signer

 

 

 

Effective Date: May 31, 2012

 
 

EXHIBIT 1

 

Fund/Portfolio Name

 

A.       Money Market Funds

 

Federated Automated Government Cash Reserves

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Municipal Ultrashort Fund

Federated Premier Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

C.       Other Funds

 

Federated Enhanced Treasury Income Fund

Federated Global Equity Fund

Federated Unconstrained Bond Fund

Federated Market Opportunity Fund

Federated MDT Stock Trust

Federated Muni and Stock Advantage Fund

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated Emerging Market Debt Fund

Federated Prudent DollarBear Fund

Federated InterContinental Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

 
 

EXHIBIT 2

 

Compliance Support Services

 

Description Frequency

1.       Provision of compliance policies and procedures for each applicable BNY Mellon line of business, summary and regulatory mapping of procedures

 

2.       Certification letter attesting BNY Mellon’s compliance with such policies and procedures.

 

3.       Host the Fund’s CCO at BNY Mellon’s operations location.

 

4.       CCO group meetings with Fund’s CCO and other CCOs on regulatory issues and industry best practices.

Annually, with interim updates on an as-needed basis.

 

 

 

Quarterly or annually at client’s request.

 

 

Annually.

 

 

Annually.

 

 
 

 

THE BANK OF NEW YORK MELLON

 

May 31, 2012

 

The Federated Family of Funds

 

 

Re: Compliance Support Services Fees

 

Dear Sir/Madam:

 

This letter constitutes our agreement with respect to compensation to be paid to The Bank of New York Mellon (“BNY Mellon”) under the terms of the Compliance Support Services Addendum dated on or about the date hereof (the “Addendum”) to the Fund Accounting Agreement dated March 1, 2011, as amended (the “Agreement”) between the investment companies listed on Exhibit 1 thereto (each a “Fund” and collectively, the “Funds”) and BNY Mellon for compliance support services provided to or on behalf of the Funds as set forth on Exhibit 2 to the Addendum. The fee for the compliance support services set forth on such Exhibit 2 to the Addendum shall be $5,000 per year for the fund accounting and financial reporting service line. This fee shall be allocated evenly among the Funds.

 

Such fees are in addition to, and in no way affect, other fees to which the parties hereto have agreed (or in the future agree) with respect to the Agreement or any amendment thereto.

 

All services provided pursuant to the Addendum are provided subject to reimbursement of BNY Mellon’s out-of-pocket expenses. Out-of-pocket expenses are assessed at cost and include, but are not limited to, independent compliance reviews, overnight express charges, travel costs, transmission expenses, and all other miscellaneous fees incurred on behalf of the Funds in connection with such services.

 

If the foregoing accurately sets forth our agreement regarding the fees for the services referred to herein and you intend to be legally bound hereby, please execute a copy of this letter and return it to BNY Mellon.

 

Very truly yours,

 

THE BANK OF NEW YORK MELLON

 

By: Jay F. Nusblatt

Name: Jay F. Nusblatt

Title: Head of U.S. Fund Accounting and

Authorized Signer

Agreed and accepted:

 

On behalf of each of the Funds indicated on Exhibit 1 to the Addendum,
as may be amended from time to time.

 

 

By: /s/ Richard A. Novak

Name: Richard A. Novak

Title: Treasurer

 
 

 

Second amendment never completed.

 

 

THIRD AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated June 7, 2005, amended March 25, 2011, December 31, 2012 and April 28, 2014, between the Funds listed on Schedule I of the Agreement, as amended and restated and attached hereto and the Bank;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Bank desire to amend the names of certain Funds to Schedule I, effective April 28, 2014; and

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the

 

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:

 

The Funds listed in Schedule I to the Agreement is amended and restated to include the funds listed on Schedule I attached hereto.

 

2. The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of April 28, 2014.

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By: /s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Treasurer

 

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Title: Vice President/Managing Director

 
 

 

SCHEDULE I

(UPDATED AS OF 4/28/14)

A.       Money Market Funds

 

Federated Automated Government Cash Reserves

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Securities Fund, Inc.

Federated Municipal Ultrashort Fund

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

C.       Other Funds

 

Federated Enhanced Treasury Income Fund

Federated Emerging Markets Debt Fund

Federated Emerging Markets Equity Fund (formerly, Federated Global Equity Fund)

Federated InterContinental Fund

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated Absolute Return Fund

Federated MDT Stock Trust

Federated Muni and Stock Advantage Fund

Federated Prudent DollarBear Fund

Federated Unconstrained Bond Fund

 
 

 

FOURTH AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated June 7, 2005, amended March 25, 2011, December 31, 2012, April 28, 2014, and December 1, 2014, between the Funds listed on Schedule I of the Agreement, as amended and restated and attached hereto and the Bank;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Bank desire to add certain funds to Schedule I; and

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the

 

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:

 

The Funds listed in Schedule I to the Agreement is amended and restated to include the funds listed on Schedule I attached hereto.

 

2. The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of December 1, 2014.

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By: /s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Treasurer

 

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Title: Vice President/Managing Director

 
 

 

SCHEDULE I

(UPDATED AS OF 12/1/14)

A.       Money Market Funds

 

Federated Automated Government Cash Reserves

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Securities Fund, Inc.

Federated Municipal Ultrashort Fund

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

C.       Other Funds

 

Federated Absolute Return Fund

Federated Emerging Markets Debt Fund

Federated Emerging Markets Equity Fund

Federated Enhanced Treasury Income Fund

Federated InterContinental Fund

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Stock Trust

Federated Muni and Stock Advantage Fund

Federated Prudent DollarBear Fund

Federated Unconstrained Bond Fund

 

 
 

 

FIFTH AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated June 7, 2005, as amended, between the Funds listed on Schedule I of the Agreement, as amended and restated and attached hereto and the Bank;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Bank desire to add certain funds to Schedule I; and

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the

 

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:

 

The Funds listed in Schedule I to the Agreement is amended and restated to include the funds listed on Schedule I attached hereto.

 

2. The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of June 26, 2015.

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By: /s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Treasurer

 

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Title: Vice President/Managing Director

 
 

 

SCHEDULE I

(UPDATED AS OF 6/25/15)

 

 

A.Money Market Funds

Federated Automated Government Cash

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Securities Fund, Inc.

Federated Municipal Ultrashort Fund

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

C.       Other Funds

 

Federated Absolute Return Fund

Federated Emerging Markets Debt Fund

Federated Emerging Markets Equity Fund

Federated Enhanced Treasury Income Fund

Federated InterContinental Fund

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Stock Trust

Federated Muni and Stock Advantage Fund

Federated Prudent DollarBear Fund

 

 

 

 
 

 

 

SIXTH AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated March 1, 2011, as amended, between the Funds listed on Schedule I of the Agreement, as amended and restated and attached hereto and the Bank;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Bank desire to amend the names to certain Funds and add certain Funds to Schedule I; and

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the

 

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:

 

The Funds listed in Schedule I to the Agreement is amended and restated to include the funds listed on Schedule I attached hereto.

 

The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of December 1, 2016.

 

 

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By: _/s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Treasurer

 

 

THE BANK OF NEW YORK MELLON

 

 

By: _/s/ Armando Fernandez_

Name: Armando Fernandez

Title: Vice President/Managing Director

 
 

 

SCHEDULE I

(UPDATED AS OF 12/01/16)

 

 

A.Money Market Funds

Federated Automated Government Cash

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Securities Fund, Inc.

Federated Municipal Ultrashort Fund

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

C.       Other Funds

 

Federated Absolute Return Fund

Federated Emerging Markets Debt Fund

Federated Emerging Markets Equity Fund

Federated Enhanced Treasury Income Fund

Federated InterContinental Fund

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund (formerly Federated International Bond Fund)

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund (formerly Federated MDT Stock Trust)

Federated Muni and Stock Advantage Fund

Federated Prudent DollarBear Fund

 

 
 

 

SEVENTH AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated March 1, 2011, as amended, between the Funds listed on Schedule I of the Agreement, as amended and restated and attached hereto and the Bank;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Bank desire to amend the names to certain Funds and delete certain Funds to Schedule I; and

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the

 

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:

 

The Funds listed in Schedule I to the Agreement is amended and restated to include the funds listed on Schedule I attached hereto.

 

The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of August 1, 2017.

 

 

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By: _/s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Treasurer

 

 

THE BANK OF NEW YORK MELLON

 

 

By: /a/ Armando Fernandez

Name: Armando Fernandez

Title: Vice President/Managing Director

 

 
 

 

SCHEDULE I

(UPDATED AS OF 08/1/17)

 

 

B.Money Market Funds

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Bond Fund, Inc.

Federated Municipal Ultrashort Fund

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

C.       Other Funds

 

Federated Absolute Return Fund

Federated Emerging Markets Debt Fund

Federated InterContinental Fund

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated MDT Large Cap Value Fund *

Federated Muni and Stock Advantage Fund

Federated Prudent DollarBear Fund

 

 

*a portfolio of Federated MDT Equity Trust to be effective August 31, 2017.

 

 

 

 

 

 
 

 

 

EIGHTH AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated March 1, 2011, as amended, between the Funds listed on Schedule I of the Agreement, as amended and restated and attached hereto and the Bank;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Bank desire to remove certain Funds from Schedule I; and

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the

 

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:

 

The Funds listed in Schedule I to the Agreement is amended and restated to include the funds listed on Schedule I attached hereto.

 

The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of October 1, 2017.

 

 

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By: __/s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Treasurer

 

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Name: Armando Fernandez

Title: Vice President/Managing Director

 

 
 

 

 

SCHEDULE I

(UPDATED AS OF 10/1/17)

 

 

C.Money Market Funds

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Bond Fund, Inc.

Federated Municipal Ultrashort Fund

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

C.       Other Funds

 

Federated Absolute Return Fund

Federated Emerging Markets Debt Fund

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated MDT Large Cap Value Fund *

Federated Muni and Stock Advantage Fund

 

 

*a portfolio of Federated MDT Equity Trust which became effective August 31, 2017.

 

 

 

 

 
 

 

NINTH AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated March 1, 2011, as amended, between the Funds listed on Schedule I of the Agreement, as amended and restated and attached hereto and the Bank;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Bank desire to remove certain Funds from Schedule I; and

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the

 

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:

 

The Funds listed in Schedule I to the Agreement is amended and restated to include the funds listed on Schedule I attached hereto.

 

The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of November 1, 2017.

 

 

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By: /s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: _/s/ Armando Fernandez___________________

Name: Armando Fernandez

Title: Vice President/Managing Director

 

 
 

 

SCHEDULE I

(UPDATED AS OF 11/1/17)

 

 

A.Money Market Funds

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Bond Fund, Inc.

Federated Municipal Ultrashort Fund

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

C.       Other Funds

 

Federated Absolute Return Fund

Federated Emerging Markets Debt Fund

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated MDT Large Cap Value Fund *

Federated Muni and Stock Advantage Fund

 

 

*a portfolio of Federated MDT Equity Trust which became effective August 31, 2017.

 

 

 

 

 

 

 
 

 

TENTH AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated March 1, 2011, as amended, between the Funds listed on Schedule I of the Agreement, as amended and restated and attached hereto and the Bank;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Bank desire to remove certain Funds from Schedule I; and

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the

 

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:

 

The Funds listed in Schedule I to the Agreement is amended and restated to include the funds listed on Schedule I attached hereto.

 

The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of December 1, 2017.

 

 

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By: /s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez___________________

Name: Armando Fernandez

Title: Vice President/Managing Director

 
 

 

SCHEDULE I

(UPDATED AS OF 12/1/17)

 

 

A.Money Market Funds

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Bond Fund, Inc.

Federated Municipal Ultrashort Fund

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

C.       Other Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated MDT Large Cap Value Fund *

Federated Muni and Stock Advantage Fund

 

 

*a portfolio of Federated MDT Equity Trust which became effective August 31, 2017.

 

 
 

 

ELEVENTH AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated March 1, 2011, as amended, between the Funds listed on Schedule I of the Agreement, as amended and restated and attached hereto and the Bank;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Bank desire to add certain Funds to and remove certain Funds from Schedule I; and

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the

 

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:

 

The Funds listed in Schedule I to the Agreement is amended and restated to include the funds listed on Schedule I attached hereto.

 

The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of September 1, 2018.

 

 

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By:_/s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Name: Armando Fernandez

Title: Vice President/Managing Director

 
 

 

SCHEDULE I

(UPDATED AS OF 09/01/18)

 

 

A.Money Market Funds

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Bond Fund, Inc.

Federated Municipal Ultrashort Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

C.       Other Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes SDG Engagement Equity Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated Muni and Stock Advantage Fund

 

 

 

 

 

 

 
 

TWELFTH AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated March 1, 2011, as amended, between the Funds listed on Schedule I of the Agreement, as amended and restated and attached hereto and the Bank;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Bank desire to add certain Funds to Schedule I; and

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the

 

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:

 

The Funds listed in Schedule I to the Agreement is amended and restated to include the funds listed on Schedule I attached hereto.

 

The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of December 1, 2018.

 

 

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By: /s/ Deborah M. Molini

Name: Deborah M. Molini

Title: Assistant Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Name: Armando Fernandez

Title: Vice President/Managing Director

 
 

 

 

SCHEDULE I

(UPDATED AS OF 12/01/18)

 

 

A.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Bond Fund, Inc.

Federated Municipal Ultrashort Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

C.       Other Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes Unconstrained Credit Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated Muni and Stock Advantage Fund

 

 

 
 

 

THIRTEENTH AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated March 1, 2011, as amended, between the Funds listed on Schedule I of the Agreement, as amended and restated and attached hereto and the Bank;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Bank desire to add certain Funds to Schedule I; and

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the

 

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:

 

The Funds listed in Schedule I to the Agreement is amended and restated to include the funds listed on Schedule I attached hereto.

 

The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of March 1, 2019

 

 

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By: /s/ Deborah M. Molini

Name: Deborah M. Molini

Title: Assistant Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Name: Armando Fernandez

Title: Vice President/Managing Director

 

 
 

 

 

SCHEDULE I

(UPDATED AS OF 03/01/19)

 

 

A.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Bond Fund, Inc.

Federated Municipal Ultrashort Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

C.       Other Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes Unconstrained Credit Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated Muni and Stock Advantage Fund

 

 

 
 

 

FOURTEENTH AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated March 1, 2011, as amended, between the Funds listed on Schedule I of the Agreement, as amended and restated and attached hereto and the Bank;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Bank desire to add certain Funds to Schedule I; and

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the

 

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:

 

The Funds listed in Schedule I to the Agreement is amended and restated to include the funds listed on Schedule I attached hereto.

 

The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of April 1, 2019

 

 

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By: /s/ Deborah M. Molini

Name: Deborah M. Molini

Title: Assistant Treasurer

 

THE BANK OF NEW YORK MELLON

 

By: _/s/ Armando Fernandez

Name: Armando Fernandez

Title: Vice President/Managing Director

 

 
 

 

SCHEDULE I

(UPDATED AS OF 04/01/19)

 

 

A.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Bond Fund, Inc.

Federated Municipal Ultrashort Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

C.       Other Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes Unconstrained Credit Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated Max-Cap Index Fund

Federated MDT Large Cap Value Fund

Federated Mid-Cap Index Fund

Federated Muni and Stock Advantage Fund

Federated Strategic Value Dividend Fund

 

 
 

 

 

FIFTEENTH AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated March 1, 2011, as amended, between the Funds listed on Schedule I of the Agreement, as amended and restated and attached hereto and the Bank;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Bank desire to add certain Funds to Schedule I; and

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the

 

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:

 

The Funds listed in Schedule I to the Agreement is amended and restated to include the funds listed on Schedule I attached hereto.

 

The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of June 1, 2019

 

 

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By: /s/ Deborah Molini Kraus

Name: Deborah Molini Kraus

Title: Assistant Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ James Farrell

Name: James Farrell

Title: Vice-President

 
 

 

 

SCHEDULE I

(UPDATED AS OF 06/01/19)

 

 

A.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Bond Fund, Inc.

Federated Municipal Ultrashort Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

C.       Other Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Emerging Markets Equity Fund

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes Unconstrained Credit Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Equity Fund

Federated International Growth Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated Max-Cap Index Fund

Federated MDT Large Cap Value Fund

Federated Mid-Cap Index Fund

Federated Muni and Stock Advantage Fund

Federated Strategic Value Dividend Fund

 

 

 
 

SIXTEENTH AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated March 1, 2011, as amended, between the Funds listed on Schedule I of the Agreement, as amended and restated and attached hereto and the Bank;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Bank desire to add certain Funds to Schedule I; and

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the

 

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:

 

The Funds listed in Schedule I to the Agreement is amended and restated to include the funds listed on Schedule I attached hereto.

 

The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of March 1, 2020.

 

 

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By: /s/ Deborah Molini Kraus

Name: Deborah Molini Kraus

Title: Assistant Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ James Farrell_

Name: James Farrell

Title: Vice-President

 

 
 

 

 

SCHEDULE I

(UPDATED AS OF 03/01/2020)

 

 

A.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Bond Fund, Inc.

Federated Municipal Ultrashort Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

C.       Other Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Emerging Markets Equity Fund

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes Unconstrained Credit Fund

Federated Hermes US SMID Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Equity Fund

Federated International Growth Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated Max-Cap Index Fund

Federated MDT Large Cap Value Fund

Federated Mid-Cap Index Fund

Federated Muni and Stock Advantage Fund

Federated Strategic Value Dividend Fund

 
 

 

EXECUTION

INVESTMENT COMPANY REPORTING

MODERNIZATION SERVICES AMENDMENT TO

FUND ACCOUNTING AGREEMENT

 

 

This Investment Company Reporting Modernization Services Amendment (the “Amendment”) is made as of March 1, 2018 by and between each of the registered investment companies listed on Schedule I to the Agreement (as defined below) as such Schedule I may be amended from time to time (each registered investment company, the “Fund”) and THE BANK OF NEW YORK MELLON (“BNY Mellon”).

 

BACKGROUND:

 

A.WHEREAS, the Fund and BNY Mellon are parties to a Fund Accounting Agreement dated as of March 1, 2011, as amended (the “Agreement”);

 

B.WHEREAS, this Amendment is an amendment to the Agreement and shall be applicable solely to the portfolios of the Fund identified at Exhibit 1 hereto (the “Portfolios”);

 

C.WHEREAS, the Fund desires that BNY Mellon provide the investment company reporting modernization services described in this Amendment;

 

D.WHEREAS, capitalized terms used in this Amendment shall have the meanings set forth in the Agreement unless otherwise defined herein, and all forms and rules referenced herein are in reference to forms and rules promulgated under the Investment Company Act of 1940, as amended; and

 

E.WHEREAS, the Fund and BNY Mellon desire to amend the Agreement with respect to the foregoing;

 

TERMS:

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the parties hereto agree as follows:

 

1.BNY Mellon shall provide the following services to the Fund for the Portfolios and the Agreement is hereby amended to include the following with the services described therein:

 

1.1As selected by the Fund, BNY Mellon shall provide services following a shared service operating model. This operating model requires the Fund or adviser to file the reports described in the services noted below.

 

1.2FORM N-PORT. BNY Mellon, subject to the limitations described herein and its timely receipt of all necessary information related thereto, will collect, aggregate and normalize the data required for the submission of Form N-PORT, related filing types, and any forms adopted to replace such forms. BNY Mellon will review and transmit to the Funds’ third party filing agent each draft N-PORT and provide reasonable cooperation to the relevant Fund and/or such Fund’s third party agent as necessary to resolve any issues with the receipt of the Form N-PORT data provided.

 

1.2.1The timely receipt of necessary information referred to above will be determined by mutual agreement of BNY Mellon and the Fund in advance of the preparation of the initial Form N-PORT.

 

1.3FORM N-CEN. BNY Mellon, subject to the limitations described herein and its timely receipt of all necessary information related thereto, will collect, aggregate and normalize the data required for the submission of Form N-CEN, related filing types, and any forms adopted to replace such forms. BNY Mellon will review and transmit to the Funds’ third party filing agent each draft N-CEN and provide reasonable cooperation to the relevant Fund and/or such Fund’s third party agent as necessary to resolve any issues with the receipt of the Form N-CEN data provided.

 

1.3.1The timely receipt of necessary information referred to above will be determined by mutual agreement of BNY Mellon and the Fund in advance of the preparation of the initial Form N-CEN.

 

2.BNY Mellon shall not be responsible for: (a) delays in the transmission to it by the Fund, the Fund’s adviser and entities unaffiliated with BNY Mellon (collectively, for this Amendment, “Third Parties”) of data required for the reports described herein, (b) inaccuracies of, errors in or omissions of, such data provided to it by any Third Party, and (c) validation of such data provided to it by any Third Party. This Section 2 is a limitation of responsibility provision for the benefit of BNY Mellon, and shall not be used to imply any responsibility or liability against BNY Mellon.

 

3.The Fund shall be responsible for the retention of the filed reports described herein in accordance with any applicable rule or regulation.

 

4.Notwithstanding any provision of this Amendment, the services described herein are not, nor shall they be construed as constituting, legal advice or the provision of legal services for or on behalf of the Fund or any other person. Neither this Amendment nor the provision of the services establishes or is intended to establish an attorney-client relationship between BNY Mellon and the Fund or any other person.

 

5.As compensation for the services described herein, the Fund will pay to BNY Mellon such fees as may be agreed to in writing by the Fund and BNY Mellon.
 
 
6.Miscellaneous.

 

(a)As hereby amended and supplemented, the Agreement shall remain in full force and effect. In the event of a conflict between the terms of this Amendment and the terms of the Agreement, the terms of this Amendment shall control with respect to the services described herein.

 

(b)This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The facsimile signature of any party to this Amendment shall constitute the valid and binding execution hereof by such party.

 

(c)If any provision or provisions of this Amendment shall be held to be invalid, unlawful or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.

 

 

 

(Signature page follows.)

 
 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their duly authorized officers designated below on the date and year first above written.

 

 

 

EACH OF THE REGISTERED INVESTMENT

COMPANIES LISTED ON EXHIBIT I

 

 

By: /s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Treasurer

 

 

II.   THE BANK OF NEW YORK MELLON

 

 

By: /s/Armando Fernandez

Name: Armando Fernandez

Title: Vice President

 

Date: March 2, 2018

 

 
 

 

 

AMENDMENT TO

FUND ACCOUNTING AGREEMENT

 

This Amendment (“Amendment”) is made as of the 4th day of September 2018, by and between each of the registered investment companies listed on Schedule I to the Agreement (as defined below) as such Schedule I may be amended from time to time (each registered investment company, the “Fund”) and THE BANK OF NEW YORK MELLON (“BNY Mellon”).

BACKGROUND:

A.BNY Mellon and the Fund entered into a Fund Accounting Agreement dated as of March 1, 2011, as amended to date (the “Agreement”), relating to BNY Mellon’s provision of services to the Fund and its series (each a “Series”).
B.The parties desire to amend the Agreement as set forth herein.

TERMS:

The parties hereby agree that:

1.                   The first sentence of Section 17 of the Agreement is hereby amended as follows:

The Bank shall be held to a standard of reasonable care in carrying out its duties under this Agreement; provided, however, that the Bank shall be held to any higher standard of care that is imposed upon the Bank by any applicable law or regulation, as if such above-stated higher standard of reasonable care were part of this Agreement.

2.                   Section 29 of the Agreement is hereby amended as follows.

(a)Audits. At least annually, the Bank shall, upon the Fund’s request, provide the Fund with the results of its latest SSAE-18 or equivalent control audit prepared by the Bank’s external auditors. In addition, the Bank shall participate, no more than once every 12 months, in the Fund’s reasonable information security questionnaire process.
(b)Information Security Program. The Bank shall maintain an information security program consistent in all material respects with applicable prevailing industry practices and standards. Such program shall include written policies and procedures designed to protect the confidentiality and integrity of the Fund’s sensitive information, including non-public personal information (as defined under the Gramm-Leach-Bliley Act (the “GLBA”)) of the Fund’s clients, and containing administrative, technical and physical safeguards, appropriate to the type of information concerned, designed to: (i) maintain the security and confidentiality of such information; (ii) protect against any anticipated threats or hazards to the security or integrity of such information; (iii) protect against accidental, unauthorized, unauthenticated, or unlawful access to or use of such information; (iv) guard against the transmission of any harmful code/devices to the Fund’s or its agents’ or service providers’ computers, networks, systems, software or hardware; (v) ensure that all patches, new release levels, new versions or new modifications of software and operating systems used on equipment that is used to transmit, store, or process Confidential Information (as defined below) are installed in accordance with the Bank’s internal policies; and (vi) ensure appropriate disposal of such information (“Information/Cyber Security Policies”). The Bank shall monitor and periodically review (at least annually) the Information/Cyber Security Policies. The Bank shall also: (i) conduct appropriate vulnerability management testing, including penetration testing, according to its internal schedule; (ii) maintain appropriate physical security of its premises; (iii) undertake background checks during the recruitment process, subject to applicable laws, and require employee training, and undertake to ensure that employees providing services with respect to this Agreement have appropriate access to the Bank’s applications on a “least privilege” basis, all as appropriate to the employee’s responsibilities; (iv) maintain an access control process that allows the Bank to promptly disable the access of any unauthorized or no longer authorized person, transmits authentication credentials in a reasonably secure manner, and requires multi-factor authentication for remote access; (v) implement a data loss prevention program reasonably designed to identify, detect, monitor and document “highly confidential” information (as defined in the Bank’s data classification processes) leaving the Bank’s control without authorization; (vi) cause any Confidential Information stored on a portable device or transmitted over a public network to be encrypted in a commercially reasonable manner; and (vii) require any portable devices containing Confidential Information to be safeguarded against theft. As information security is a highly dynamic space (where laws, regulations and threats are constantly changing), the Bank reserves the right to make changes to its Information/Cyber Security Policies at any time and at the sole discretion of the Bank in a manner that it reasonably believes does not materially reduce the protection it applies to the Fund’s Confidential Information.
(c)Audit Reports. The Bank shall, upon the Fund’s request, provide the Fund with the results of its latest SSAE-18 or equivalent control audit prepared by the Bank’s external auditors. In addition and no more than annually, the Bank will participate in the Fund’s reasonable information security questionnaire processes.
(d)Fund Confidential Information. All Fund documents, materials, data and other information, whether oral, written, electronic or in another form, and whether stored in hard copy, on computer disc, electronically or in another media, to which the Bank is given access, which is provided to or made available to the Bank, or which the Bank (or its personnel) views or otherwise obtains in connection with the services or this Agreement is referred to hereinafter as “Confidential Information.” Without limiting the foregoing, Confidential Information shall include (i) all technology, know-how, processes, software, databases, patents, copyrights, trademarks, trade secrets, trade names, service marks, other intellectual property or proprietary rights, contracts, and other proprietary information; business plans, technical secrets, technical information relating to systems and infrastructure, methodologies, and know-how, (iv) investment products, product descriptions, investment management strategies, capabilities, methodologies, models, processes, theories, portfolio holdings, and other related investment management information, (v) business strategies, operating data, organizational and cost structures, pricing information, and financial information, including, without limitation, budgets, earnings, financial statements, and other financial related information, (vi) any other information of a confidential or proprietary nature not generally known to the public such as including regulatory affairs, compliance matters, and pending or threatened litigation. Moreover, without limiting the foregoing, and for the avoidance of doubt, Confidential Information also includes information of any subsidiary or affiliate of the Fund. Finally, without limiting the foregoing, and for the avoidance of doubt, Confidential Information of the Fund also includes nonpublic personal information and consumer information (as those terms are defined in the GLBA, Fair Credit Reporting Act, Fair and Accurate Credit Transactions Act, and any implementing regulations or guidelines adopted thereunder that the Bank (or the Bank’s personnel) views, obtains or has access to of an existing or former shareholder of the Fund.
(e)Use of Confidential Information. The Bank may use Confidential Information only as necessary in connection with the performance of, including shared services in support of, the obligations under this Agreement, as expressly permitted or required under applicable laws, or as expressly allowed under Section 29(f) below. The Bank shall keep the Confidential Information confidential and not disclose it to any third party except to vendors utilized to provide or support the Bank’s service offerings to the extent permitted under this Agreement or applicable laws or with the Fund’s prior written consent, and apply to such Confidential Information at least the same level of protection as the Bank applies to its own confidential information and as required under this Agreement. All Confidential Information shall remain the exclusive property of the Fund. The Bank shall restrict access to the Confidential Information to those Bank personnel, legal counsel, auditors, accountants and other third parties providing shared services, who have a need to know the specific Confidential Information in connection with the performance of, including shared services in support of, the obligations under this Agreement (“Permitted Personnel”). The Bank will be responsible for the compliance of the Bank’s Permitted Personnel with this Section 29.
(f)Other Permitted Disclosures. Notwithstanding the restrictions set out in this Section 29: the Bank may disclose Confidential Information pursuant to a requirement or request of a governmental agency with jurisdiction over the Bank (or its personnel) or pursuant to a court or administrative subpoena, order or other such legal process or requirement of law, or in defense of any claims or causes of action asserted against it; provided, however, that the Bank shall (i) first notify the Fund of such request or requirement or use in defense of a claim, unless such notice is prohibited by applicable laws, including to afford the Fund the opportunity to seek to prevent such disclosure or use, (ii) attempt to obtain the Fund’s consent to such disclosure or use, in the event consent is not given, to the extent practicable, agree to permit a motion to quash, or other similar procedural step, to frustrate the disclosure or use of such Confidential Information, (iv) seek to secure the protection and confidentiality of any such Confidential Information before it is disclosed or used, and (v) disclose only that portion of such Confidential Information as is necessary or required. Nothing preceding this sentence in this Section 29(f) shall require the Bank to fail to honor a subpoena, court or administrative order, or any similar binding requirement on a timely basis. Also notwithstanding the restrictions set out in this Section 29, The Bank of New York Mellon Corporation is a global financial organization that provides services to clients through its affiliates and subsidiaries in multiple jurisdictions (the “BNY Mellon Group”). The BNY Mellon Group may centralize functions including audit, accounting, risk, legal, compliance, sales, administration, product communication, relationship management, storage, compilation and analysis of customer-related data, and other functions (the “Centralized Functions”) in one or more affiliates, subsidiaries and third-party service providers. Solely in connection with the Centralized Functions, (i) the Fund consents to the disclosure of and authorizes BNY Mellon to disclose information regarding the Fund (“Customer-Related Data”) to the BNY Mellon Group and to its third-party service providers who are subject to confidentiality obligations with respect to such information and (ii) BNY Mellon may store the names and business contact information of the Fund’s employees and representatives on the systems or in the records of the BNY Mellon Group or its service providers. The BNY Mellon Group may aggregate Customer-Related Data with other data collected and/or calculated by the BNY Mellon Group, and notwithstanding anything in this Agreement to the contrary the BNY Mellon Group will own all such aggregated data, provided that the BNY Mellon Group shall not distribute the aggregated data in a format that identifies Customer-Related Data with the Fund. The Fund confirms that it is authorized to consent to the foregoing and that the disclosure and storage of information in connection with the Centralized Functions does not violate any relevant data protection legislation.
(g)Destruction of Confidential Information. The Bank shall return to the Fund, or on the Fund’s request, destroy (and certify destruction to the Fund of), any Confidential Information in the Bank’s possession or control that is not necessary for providing the services or that is no longer being utilized. Notwithstanding the above, the Bank shall be allowed to maintain copies required for regulatory and backup record retention purposes subject to the terms and conditions hereunder applicable to Confidential Information. For the avoidance of doubt, the obligations of the Bank under Section 29(d) shall survive the termination of this Agreement.
(h)Security Incidents. The Bank will notify the Fund promptly after investigation and confirmation of any actual (i) privacy breach of non-public personal information, as defined under the GLBA, of the Fund’s customers that requires notification to affected individuals under state breach notification laws or (ii) loss or unauthorized disclosure, alteration or destruction of the Fund’s account holdings or transaction information (“Security Incident”) maintained on the Bank’s Systems. In any notification required under this Section, the Bank will designate a single individual employed by the Bank who will be available to the Fund 24-hours per day, 7-days per week as a contact regarding the Bank’s obligations under this Section 29(h). In the event of a Security Incident, after providing the notice to the Fund contemplated above, the Bank shall: (i) keep the Fund reasonably informed as to the progress of its investigation and response to the Security Incident; and (ii) provide reasonable assistance to the Fund in its compliance with any breach notification requirements required under applicable law. The Fund shall not include a reference to the Bank in any regulatory, public or other statement or notification in connection with any Security Incident without the Bank’s prior written consent, which shall not be unreasonably withheld or delayed. Provided the Fund obtains the Bank’s prior written consent with respect to each separate Security Incident and with respect to each separate entity with which information is shared, the Fund may share information provided by the Bank pursuant to this Section 29(h) with third party anti-virus or information security working groups, organizations, companies or other professionals for the purpose of identifying, analyzing, confirming, cleaning, preventing or otherwise assessing and handling any actual, probable or suspected Security Incidents, exposure to harmful code or viruses, or other cyber-threats.
(i)Business Continuity. The Bank shall have a commercially reasonable written business continuity plan that complies with applicable laws and is designed to ensure the Bank’s ability to perform its ongoing obligations under this Agreement (“Business Continuity Plan”). The Bank will notify the Fund as soon as reasonably practicable of any actual, probable or reasonably suspected disruption, interruption, impairment or failure (“Business Continuity Event”) of the Bank’s systems used to provide the services under this Agreement (“Systems”). In addition, and for the avoidance of doubt, the Bank shall (and shall cause its personnel to) implement, maintain, monitor and periodically test (at least annually) a Business Continuity Plan that complies with applicable laws and applicable industry standards. As part of its Business Continuity Plan, the Bank shall ensure that: (i) back-up systems at the Bank and its personnel are in place and operational at all times with respect to the Systems; (ii) specific contingency plans are in place to address a failure of the Systems; (iii) alternate procedures necessary for the provision of the services under this Agreement, and maintenance of the confidentiality and integrity of Confidential Information, are identified and capable of being substituted within 24 hours after any Business Continuity Event occurs; (iv) procedures are in place designed to provide that all services can be provided in accordance with this Agreement within 24 hours after any Business Continuity Event occurs; and (v) if requested by the Fund, a representative of the Bank shall be on-site at the Fund for the duration of any Business Continuity Event.
3.Miscellaneous.
(a)Capitalized terms not defined in this Amendment shall have the same meanings as in the Agreement. In the event of a conflict between the terms hereof and the Agreement, this Amendment shall control.
(b)As hereby amended and supplemented, the Agreement shall remain in full force and effect.
(c)The Agreement, as amended hereby, constitutes the complete understanding and agreement of the parties with respect to the subject matter hereof and supersedes all prior communications with respect thereto.
(d)This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The facsimile signature of any party to this Amendment shall constitute the valid and binding execution hereof by such party.
(e)This Amendment shall be governed by the laws of the State of New York, without regard to its principles of conflicts of laws.
 
 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their duly authorized officers designated below on the date and year first above written.

 

 

 
On behalf of each of the registered investment companies identified on Schedule I attached to the Agreement

 

By:  

Name:

Title:

 

 

THE BANK OF NEW YORK MELLON

By:  

Name:

Title:

 

 
 

EXHIBIT 1

 

N-PORT Services

 

Portfolio Name ID, Cusip or Ticker Symbol
Federated Absolute Return Fund 314172743
Federated Absolute Return Fund 314172735
Federated Absolute Return Fund 314172727
Federated Absolute Return Fund 314172453
Federated Emerging Market Debt Fund 31428U771
Federated Emerging Market Debt Fund 31428U763
Federated Emerging Market Debt Fund 31428U755
Federated Emerging Market Debt Fund 31428U615
Federated Intermediate Municipal Trust 458810108
Federated Intermediate Municipal Trust 458810603
Federated Global Strategic Value Dividend Fund 31421N865
Federated Global Strategic Value Dividend Fund 31421N857
Federated Global Strategic Value Dividend Fund 31421N840
Federated Global Strategic Value Dividend Fund 31421N832
Federated Global Total Return Bond Fund 31420G408
Federated Global Total Return Bond Fund 31420G507
Federated Global Total Return Bond Fund 31420G606
Federated Global Total Return Bond Fund 31420G879
Federated International Bond Strategy Portfolio 31421P308
Federated International Dividend Strategy Portfolio 31421P605
Federated International Leaders Fund 31428U847
Federated International Leaders Fund 31428U839
Federated International Leaders Fund 31428U821
Federated International Leaders Fund 31428U623
Federated International Leaders Fund 31428U599
Federated International Leaders Fund 31428U581
Federated International Small-Mid Company Fund 31428U748
Federated International Small-Mid Company Fund 31428U730
Federated International Small-Mid Company Fund 31428U722
Federated International Small-Mid Company Fund 31428U631
Federated International Strategic Value Dividend Fund 314172388
Federated International Strategic Value Dividend Fund 314172370
Federated International Strategic Value Dividend Fund 314172362
Federated International Strategic Value Dividend Fund 31421N824
Federated MDT Large Cap Value Fund 314209206
Federated MDT Large Cap Value Fund 314209701
Federated MDT Large Cap Value Fund 314209800
Federated MDT Large Cap Value Fund 314209602
Federated MDT Large Cap Value Fund 314209305
Federated MDT Large Cap Value Fund 314209404
Federated MDT Large Cap Value Fund 314209503
Federated Michigan Intermediate Municipal Trust 313923302
Federated Muni and Stock Advantage Fund 31420C837
Federated Muni and Stock Advantage Fund 31420C829
Federated Muni and Stock Advantage Fund 31420C811
Federated Muni and Stock Advantage Fund 31420C720
Federated Muni and Stock Advantage Fund 31420C654
Federated Municipal High Yield Advantage Fund 313923864
Federated Municipal High Yield Advantage Fund 313923856
Federated Municipal High Yield Advantage Fund 313923849
Federated Municipal High Yield Advantage Fund 313923831
Federated Municipal High Yield Advantage Fund 313923815
Federated Municipal Bond Fund, Inc. 313913105
Federated Municipal Bond Fund, Inc. 313913204
Federated Municipal Bond Fund, Inc. 313913303
Federated Municipal Bond Fund, Inc. 313913402
Federated Municipal Bond Fund, Inc. 313913600
Federated Municipal Ultrashort Fund 31417P866
Federated Municipal Ultrashort Fund 31417P858
Federated Ohio Municipal Income Fund 313923823
Federated Ohio Municipal Income Fund 313923609
Federated Pennsylvania Municipal Income Fund 313923708
Federated Pennsylvania Municipal Income Fund 313923807
Federated Premier Municipal Income Fund  31423P108
Federated Short-Intermediate Duration Municipal Trust 313907305
Federated Short-Intermediate Duration Municipal Trust 313907107
Federated Short-Intermediate Duration Municipal Trust 313907206

 

 
 

N-CEN Services

 

Portfolio Name ID, Cusip or Ticker Symbol and Fund
Federated Absolute Return Fund 314172743
Federated Absolute Return Fund 314172735
Federated Absolute Return Fund 314172727
Federated Absolute Return Fund 314172453
Federated Capital Reserves Fund 608919304
Federated Emerging Market Debt Fund 31428U771
Federated Emerging Market Debt Fund 31428U763
Federated Emerging Market Debt Fund 31428U755
Federated Emerging Market Debt Fund 31428U615
Federated Government Obligations Tax-Managed Fund 60934N856
Federated Government Obligations Tax-Managed Fund 60934N849
Federated Government Obligations Tax-Managed Fund 608919494
Federated Government Reserves Fund 608919205
Federated Government Reserves Fund 608919544
Federated Government Reserves Fund 608919536
Federated Government Reserves Fund 608919528
Federated Government Reserves Fund 908919510
Federated Intermediate Municipal Trust 458810108
Federated Intermediate Municipal Trust 458810603
Federated Global Strategic Value Dividend Fund 31421N865
Federated Global Strategic Value Dividend Fund 31421N857
Federated Global Strategic Value Dividend Fund 31421N840
Federated Global Strategic Value Dividend Fund 31421N832
Federated Global Total Return Bond Fund 31420G408
Federated Global Total Return Bond Fund 31420G507
Federated Global Total Return Bond Fund 31420G606
Federated Global Total Return Bond Fund 31420G879
Federated International Bond Strategy Portfolio 31421P308
Federated International Dividend Strategy Portfolio 31421P605
Federated International Leaders Fund 31428U847
Federated International Leaders Fund 31428U839
Federated International Leaders Fund 31428U821
Federated International Leaders Fund 31428U623
Federated International Leaders Fund 31428U599
Federated International Leaders Fund 31428U581
Federated International Small-Mid Company Fund 31428U748
Federated International Small-Mid Company Fund 31428U730
Federated International Small-Mid Company Fund 31428U722
Federated International Small-Mid Company Fund 31428U631
Federated International Strategic Value Dividend Fund 314172388
Federated International Strategic Value Dividend Fund 314172370
Federated International Strategic Value Dividend Fund 314172362
Federated International Strategic Value Dividend Fund 31421N824
Federated MDT Large Cap Value Fund 314209206
Federated MDT Large Cap Value Fund 314209701
Federated MDT Large Cap Value Fund 314209800
Federated MDT Large Cap Value Fund 314209602
Federated MDT Large Cap Value Fund 314209305
Federated MDT Large Cap Value Fund 314209404
Federated MDT Large Cap Value Fund 314209503
Federated Michigan Intermediate Municipal Trust 313923302
Federated Muni and Stock Advantage Fund 31420C837
Federated Muni and Stock Advantage Fund 31420C829
Federated Muni and Stock Advantage Fund 31420C811
Federated Muni and Stock Advantage Fund 31420C720
Federated Muni and Stock Advantage Fund 31420C654
Federated Municipal High Yield Advantage Fund 313923864
Federated Municipal High Yield Advantage Fund 313923856
Federated Municipal High Yield Advantage Fund 313923849
Federated Municipal High Yield Advantage Fund 313923831
Federated Municipal High Yield Advantage Fund 313923815
Federated Municipal Bond Fund, Inc. 313913105
Federated Municipal Bond Fund, Inc. 313913204
Federated Municipal Bond Fund, Inc. 313913303
Federated Municipal Bond Fund, Inc. 313913402
Federated Municipal Bond Fund, Inc. 313913600
Federated Municipal Ultrashort Fund 31417P866
Federated Municipal Ultrashort Fund 31417P858
Federated Ohio Municipal Income Fund 313923823
Federated Ohio Municipal Income Fund 313923609
Federated Pennsylvania Municipal Income Fund 313923708
Federated Pennsylvania Municipal Income Fund 313923807
Federated Premier Municipal Income Fund  31423P108
Federated Short-Intermediate Duration Municipal Trust 313907305
Federated Short-Intermediate Duration Municipal Trust 313907107
Federated Short-Intermediate Duration Municipal Trust 313907206
Federated U.S. Treasury Cash Reserves 60934N682
Federated U.S. Treasury Cash Reserves 60934N674

 

 
 

 

 

 

[          ]

 

 

 EX-99.CONSENT 20 ex28jconsent.htm EXHIBIT (23) UNDER ITEM 601/REG. S-K

Exhibit 28 (j) under Form N-1A

Exhibit (23) under Item 601/Reg. S-K

 

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

We consent to the references to our firm under the captions “Financial Highlights” in the Prospectus and “Independent Registered Public Accounting Firm” in the Statement of Additional Information in Post-Effective Amendment Number 91 to the Registration Statement (Form N-1A, No. 2-57181) of Federated Municipal Bond Fund, Inc., and to the incorporation by reference of our report, dated May 22, 2020, on Federated Municipal Bond Fund, Inc. included in the Annual Shareholder Report for the fiscal year ended March 31, 2020.

 

 

 

/s/ Ernst & Young LLP

 

Boston, Massachusetts

May 22, 2020

 

 

 

 EX-99.12B1 PLAN 21 ex28m1-12b1.htm EXHIBIT (1) UNDER ITEM 601/REG. S-K

Exhibit 28 (m) (1) under Form N-1A

Exhibit (1) under Item 601/Reg. S-K

 

 

FEDERATED MUNICIPAL SECURITIES FUND, INC.

DISTRIBUTION PLAN

 

This Distribution Plan ("Plan") is adopted as of the 12th day of February, 2004, by the Board of Directors of Federated Municipal Securities Fund, Inc. (the "Corporation"), a Maryland Corporation with respect to certain classes of shares ("Classes") of the portfolios of the Corporation (the "Funds") set forth in exhibits hereto.

1.This Plan is adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended ("Act"), so as to allow the Corporation to make payments as contemplated herein, in conjunction with the distribution of Classes of the Funds ("Shares") and pursuant to the “Distributor’s Contract” entered into by the Corporation and FSC.
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 and; (b) advertising and marketing of Shares to include preparing, printing and distributing prospectuses and sales literature to prospective shareholders and with Financial Institutions. The Plan is also designed to cover the costs of administrative services performed in connection with the sale of Shares, but are not limited to shareholder services, recordkeeping services and educational services, as well as the costs of implementing and operating the Plan.
3.As compensation for services provided pursuant to this Plan, FSC will be paid a fee in respect of the following Classes set forth on the exhibits to this Agreement. FSC may use all or any of the fees received pursuant to the Plan to pay any of the expenses associated with the activities under Paragraph 2 hereof whether incurred directly, or through Financial Institutions.
4.Any payments by FSC to Financial Institutions with funds received as compensation under this Plan will be made pursuant to an agreement entered into by FSC and the Financial Institution (“Financial Institution Agreement”). 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 Directors of the Corporation, and the Board of Directors shall review, a written report of the amounts expended under the Plan and the purpose for which such expenditures were made.
6.This Plan shall become effective with respect to each Class (i) after approval as required by Rule 12b-1 under the Act as in effect on the date of the execution hereof; and (ii) upon execution of an exhibit adopting this Plan with respect to such Class.
7.This Plan shall remain in effect with respect to each Class presently set forth on an exhibit and any subsequent Classes added pursuant to an exhibit during the initial year of this Plan for the period of one year from the date set forth above and may be continued thereafter if this Plan is approved with respect to each Class at least annually by a majority of the Corporation's Board of Directors and a majority of the Disinterested Directors, cast in person at a meeting called for the purpose of voting on such Plan. If this Plan is adopted with respect to a Class after the first annual approval by the Directors as described above, this Plan will be effective as to that Class upon execution of the applicable exhibit pursuant to the provisions of paragraph 6(ii) above and will continue in effect until the next annual approval of this Plan by the Directors and thereafter for successive periods of one year subject to approval as described above.
8.All material amendments to this Plan must be approved by a vote of the Board of Directors of the Corporation and of the Disinterested Directors, cast in person at a meeting called for the purpose of voting on it.
9.This Plan may not be amended in order to increase materially the costs which the Classes may bear for distribution pursuant to the Plan without being approved by a majority vote of the outstanding voting securities of the Classes as defined in Section 2(a)(42) of the Act.
10.This Plan may be terminated with respect to a particular Class at any time by: (a) a majority vote of the Disinterested Directors; or (b) a vote of a majority of the outstanding voting securities of the particular Class as defined in Section 2(a)(42) of the Act; or (c) by FSC on 60 days' notice to the Corporation.
11.While this Plan shall be in effect, the selection and nomination of Disinterested Directors of the Corporation shall be committed to the discretion of the Disinterested Directors then in office.
12.All agreements with any person relating to the implementation of this Plan, including, but not limited to Financial Institution Agreements, 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 MUNICIPAL SECURITIES FUND, INC.

Class C Shares

 

This Distribution Plan is adopted as of the 12th day of February, 2004, by Federated Municipal Securities Fund, Inc. with respect to the Class C Shares of the Corporation set forth above.

As compensation for the services provided pursuant to this Plan, FSC will be paid a monthly fee computed at the annual rate of 0.75 of 1% of the average aggregate net asset value of the Class C Shares of Federated Municipal Securities Fund, Inc. held during the month.

Witness the due execution hereof this 1st day of March, 2004.

 

 

FEDERATED MUNICIPAL SECURITIES FUND, INC.

 

 

By: /s/ J. Christopher Donahue

Name: J. Christopher Donahue

Title: President

 EX-99.DISTRIB PLAN 22 ex28m2distplan.htm

Exhibit 28 (m) (2) under Form N-1A
Exhibit 99 under item 601/REG. S-K

 

[TRUST/FUND NAME]

DISTRIBUTION PLAN

 

This Distribution Plan (“Plan”) is adopted as of [Board Meeting date], by the Board of [Trustees/Directors] or [TRUST/FUND NAME (the “Trust/Corporation”)], a [Massachusetts business trust/Maryland corporation] with respect to certain classes of shares (“Classes”) of the portfolios of the [Trust/Corporation] (the “Funds”) set forth in exhibits hereto.

 

1.This Plan is adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended (“Act”), so as to allow the [Trust/Corporation] to make payments as contemplated herein, in conjunction with the distribution of Classes of the Funds (“Shares”).

 

2.This Plan is designed to finance activities of Federated Securities Corp. or any successor principal distributor (the “Principal Distributor”) 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, the Principal Distributor will be paid a fee in respect of the following Classes set forth on the applicable exhibit.

 

3.Any payment to the Principal Distributor in accordance with this Plan will be made pursuant to the “Distributor’s Contract” entered into by the [Trust/Corporation] and the Principal Distributor. Any payments made by the Principal Distributor to Financial Institutions with funds received as compensation under this Plan will be made pursuant to the “Financial Institution Agreement” entered into by the Principal Distributor and the Institution.

 

4.The Principal Distributor 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, the Principal Distributor shall prepare and furnish to the Board of [Trustees/Directors] of the [Trust/Corporation], and the Board of [Trustees/Directors] shall review, a written report of the amounts expended under the Plan and the purpose for which such expenditures were made.

 

6.This Plan shall become effective with respect to each Class (i) after approval by majority votes of: (a) the [Trust/Corporation]’s Board of [Trustees/Directors]; (b) the members of the Board of the [Trust/Corporation] who are not interested persons of the [Trust/Corporation] and have no direct or indirect financial interest in the operation of the [Trust/Corporation]’s Plan or in any related documents to the Plan (“Disinterested [Trustees/Directors]”), cast in person at a meeting called for the purpose of voting on the Plan; and (c) the outstanding voting securities of the particular Class, as defined in Section 2(a)(42) of the Act and (ii) upon execution of an exhibit adopting this Plan with respect to such Class.

 

7.This Plan shall remain in effect with respect to each Class presently set forth on an exhibit and any subsequent Classes added pursuant to an exhibit during the initial year of this Plan for the period of one year from the date set forth above and may be continued thereafter if this Plan is approved with respect to each Class at least annually by a majority of the [Trust/Corporation]’s Board of [Trustees/Directors] and a majority of the Disinterested [Trustees/Directors], cast in person at a meeting called for the purpose of voting on such Plan. If this Plan is adopted with respect to a Class after the first annual approval by the [Trustees/Directors] as described above, this Plan will be effective as to that Class upon execution of the applicable exhibit pursuant to the provisions of paragraph 6(ii) above and will continue in effect until the next annual approval of this Plan by the [Trustees/Directors] and thereafter for successive periods of one year subject to approval as described above.

 

8.All material amendments to this Plan must be approved by a vote of the Board of [Trustees/Directors] of the [Trust/Corporation] and of the Disinterested [Trustees/Directors], cast in person at a meeting called for the purpose of voting on it.

 

9.This Plan may not be amended in order to increase materially the costs which the Classes may bear for distribution pursuant to the Plan without being approved by a majority vote of the outstanding voting securities of the Classes as defined in Section 2(a)(42) of the Act.

 

10.This Plan may be terminated with respect to a particular Class at any time by: (a) a majority vote of the Disinterested [Trustees/Directors]; or (b) a vote of a majority of the outstanding voting securities of the particular Class as defined in Section 2(a)(42) of the Act.

 

11.While this Plan shall be in effect, the selection and nomination of Disinterested [Trustees/Directors] of the [Trust/Corporation] shall be committed to the discretion of the Disinterested [Trustees/Directors] then in office.

 

12.All agreements with any person relating to the implementation of this Plan shall be in writing and any agreement related to this Plan shall be subject to termination, without penalty, pursuant to the provisions of Paragraph 10 herein.

 

13.This Plan shall be construed in accordance with and governed by the laws of the Commonwealth of Pennsylvania.
 
 

Exhibit 1

Amendment to the

Distribution Plan for

the Investment Companies

Class B Shares

 

1.       This amendment to the Distribution Plan (“Plan”) is adopted by the Board of Trustees/Directors of the Investment Companies with respect to the Class of Shares of the portfolios (“Funds”) of the Investment Companies set forth on the attached Schedule A as to which the Plan has been adopted. This Exhibit is hereby incorporated into the Plan in its entirety and made a part thereof. In the event of any inconsistency between the terms of this Exhibit and the terms of the Plan, the terms of this Exhibit shall govern. References herein to the Plan shall mean the Plan as amended by this Exhibit. The terms of the Plan as amended when effective in respect of the Class of Shares set forth above shall apply to all amounts payable to the Principal Distributor in respect of such Class of Shares whether arising out of sales of such Class of Shares before or after such effective date.

 

2.       In compensation for the services provided pursuant to this Plan, the Investment Companies on behalf of the Fund shall pay the Principal Distributor its “Allocable Portion” (as defined in its Distributor’s Contract as it relates to the Class B Shares of the fund) of a fee (the “Distribution Fee”) computed at the annual rate of 0.75 of 1% per annum on the average daily aggregate net asset value of the class B Shares of those Funds listed on Schedule A outstanding, which fee shall be paid monthly in arrears.

 

3.       The Distributor’s Contract in respect of the Class B Shares of each Fund set forth above shall provide that: (I) the Principal Distributor in respect of such Distributor’s Contract will be deemed to have performed all services required to be performed in order to be entitled to receives its Allocable Portion of the Distribution Fees payable in respect of the Class B Shares of such Fund upon the settlement date of each sale of a “Commission Share” (as defined below) of such Fund taken into account in determining such Principal Distributor’s Allocable Portion of such Distribution Fees; (II) the Investment Companies’ obligation to pay such Principal Distributor its Allocable Portion of the Distribution Fees payable in respect of the Class B Shares of such Fund shall not be terminated or modified for any reason (including a termination of the Distributor’s Contract between such Principal Distributor and such Fund) except to the extent required by a change in the Act or the Conduct Rules of the National Association of Securities Dealers, Inc., in each case enacted or promulgated after May 1, 1997, or in connection with a “Complete Termination” (as hereinafter defined) of this Plan in respect of the Class B Shares of such Fund; (III) the Investment Companies will not take any action to waive or change any CDSC in respect of the Class B Shares of such Fund, except as provided in the Funds’ prospectus or statement of additional information without the consent of the Principal Distributor and its assigns; (IV) neither the termination of such Principal Distributor’s role as Principal Distributor of the Class B Shares of such Fund, nor the termination of such Distributor’s Contract nor the termination of this Plan will terminate such Principal Distributor’s right to its Allocable Portion of the CDSCs; and (V) such Principal Distributor may assign, sell or pledge (collectively, “Transfer”) its rights to its Allocable Portion of the Distribution Fees and CDSCs (but not such Principal Distributor’s obligations to the Investment Companies under the Distributor’s Contract) to raise funds to make the expenditures related to the distribution of Class B Shares of such Fund and in connection therewith, upon receipt of notice of such Transfer, the Investment Companies shall pay to the assignee, purchaser or pledgee (collectively with this subsequent transferees, “Transferees”) or third party beneficiaries such portion of the Principal Distributor’s Allocable Portion of the Distribution Fees or CDSCs in respect of the Class B Shares of such Fund or sold or pledged and except as provided in (II) above and notwithstanding anything of the contrary set forth in this Exhibit or the Plan or in the Distributor’s Contract, to the extent the Principal Distributor has Transferred its right thereto as aforesaid, the Investment Companies’ obligation to pay to the Principal Distributor’s Transferee such Principal Distributor’s Allocable Portion of the Distribution Fees and CDSCs payable in respect of the Class B Shares of such Fund shall be absolute and unconditional and shall not be subject to dispute, offset, counterclaim or any defense whatsoever, including without limitation, any of the foregoing based on the insolvency or bankruptcy of the Principal Distribution (it being understood that such provision is not a waiver of the Investment Companies’ right to pursue such Principal Distributor and enforce such claims against the assets of such Principal Distributor other than its right to the Distribution Fees, CDSCs and servicing fees, in respect of the Class B Shares of any Fund transferred in connection with such Transfer. For purposes of this Plan, the term Allocable Portion of Distribution Fees or CDSCs payable in respect of the Class B Shares of any Fund as applied to any Principal Distributor shall mean the portion of such Distribution Fees or CDSCs payable in respect of such Funds allocated to such Principal Underwriter in accordance with the Allocation Schedule (as defined in the Distributor’s Contract as it relates to the Class B Shares of the Fund). For purposes of this Plan, the term “Complete Termination” of this Plan in respect of any Fund means a termination of this Plan involving the complete cessation of the payment of Distribution Fees in respect of all Class B Shares of such Fund, and the termination of the distribution plans and the complete cessation of the payment of distribution fees pursuant to every other Distribution Plan pursuant to Rule 12b-1 of the Investment Companies in respect of such Fund and any successor Fund or any Fund acquiring a substantial portion of the assets of such Fund and for every future class of shares which has substantially similar characteristics to the Class B Shares of such Fund taking into account the manner of payment and amount of sales charge, contingent deferred sales charge or other similar charges borne directly or indirectly by the holders of such shares.

 

Witness the due execution hereof this execution date.

 

Investment Companies (listed on Schedule A)

 

By: /s/ John W. McGonigle

Title: Executive Vice President

Date: October 24, 1997

 
 

Schedule A

 

DISTRIBUTION PLAN

Effective Date: Class B Shares of: Revised 12/1/19

   
  FEDERATED ADVISER SERIES
8/31/17 Federated MDT Large Cap Value Fund
   
  FEDERATED EQUITY FUNDS
12/1/00 Federated Kaufmann Fund
12/1/02 Federated Kaufmann Small Cap Fund
10/24/97 Federated MDT Mid-Cap Growth Fund
   
10/24/97 FEDERATED EQUITY INCOME FUND, INC.
   
  FEDERATED FIXED INCOME SECURITIES, INC.
10/24/97 Federated Strategic Income Fund
   
6/1/08 FEDERATED GLOBAL ALLOCATION FUND
   
10/24/97 FEDERATED GOVERNMENT INCOME SECURITIES, INC.
   
10/24/97 FEDERATED HIGH INCOME BOND FUND, INC.
   
9/1/02 FEDERATED INCOME SECURITIES TRUST
12/1/02 Federated Capital Income Fund
9/1/02 Federated Fund for U.S. Government Securities
9/1/03 Federated Muni and Stock Advantage Fund
   
  FEDERATED INTERNATIONAL SERIES, INC.
10/24/97 Federated Global Total Return Bond Fund
   
  FEDERATED INVESTMENT SERIES FUNDS, INC.
10/24/97 Federated Bond Fund
   
  FEDERATED MDT SERIES
3/1/07 Federated MDT Large Cap Growth Fund
12/1/07 Federated MDT Small Cap Growth Fund
   
  FEDERATED MUNICIPAL SECURITIES INCOME TRUST
6/1/06 Federated Municipal High Yield Advantage Fund
10/24/97 Federated Pennsylvania Municipal Income Fund
   
10/24/97 FEDERATED MUNICIPAL BOND FUND, INC.
   
  FEDERATED TOTAL RETURN SERIES, INC.
6/1/01 Federated Total Return Bond Fund
   
  FEDERATED WORLD INVESTMENT SERIES, INC.
10/24/97 Federated Emerging Market Debt Fund
10/24/97 Federated International Small-Mid Company Fund
6/1/98 Federated International Leaders Fund
   
  MONEY MARKET OBLIGATIONS TRUST
6/1/15 Federated Government Reserves Fund
   

 

 

 EX-99.MCP 23 ex28nmcp.htm EXHIBIT 99 UNDER ITEM 601/REG. S-K

Exhibit 28 (n) under Form N-1A

Exhibit 99 under item 601/REG. S-K

 

MULTIPLE CLASS PLAN

Current as of June 1, 2019

 

This Multiple Class Plan (this "Plan") is adopted by the investment companies (the "Multiple Class Companies") identified in exhibits hereto (the "Class Exhibits") as offering separate classes of shares ("Classes").

 

1.       Purpose

 

This Plan is adopted pursuant to Rule 18f-3 under the Investment Company Act of 1940, as amended (the "Rule"), in connection with the issuance by the Multiple Class Companies and any series thereof (collectively the "Funds") of more than one Class of shares in reliance on the Rule. In documenting the exchange features for each Class, this plan describes the arrangements whereby shares of Funds may be exchanged for or from certain other investment companies which are not part of this Plan. In documenting the separate arrangement for distribution of each Class, this Plan also sets forth the schedules for variations in sales loads and contingent deferred sales charges required by Rules 22d-1 and 6c-10, respectively. Financial intermediary-specific front-end sales load and contingent deferred sales charge (“CDSC”) waivers, front-end sales load discounts and exchange features (collectively, “sales charge variations”) required to be disclosed by Rule 22d-1 shall be as set forth in the prospectus of a Fund, as may be amended from time to time.

 

2.       Separate Arrangements/Class Differences

 

The arrangements for shareholders services or the distribution of shares, or both, for each Class shall be set forth in the applicable Class Exhibit hereto.

 

3.       Expense Allocations

 

Each Class shall be allocated those shareholder service fees and fees and expenses payable under a Rule 12b-1 Plan specified in the Class Exhibit. In addition the following expenses may be specifically allocated to each Class to the extent that the Fund's officers determine that such expenses are actually incurred in a different amount by that Class, or that the Class receives services of a different kind or to a different degree than other Classes:

 

(a)       transfer agent fees;

 

(b)printing and postage expenses related to preparing and distributing materials such as shareholder reports, prospectuses, and proxies to current shareholders;

 

(c)blue sky registration fees;

 

(d)SEC registration fees;

 

(e)the expense of administrative personnel and services as required to support the shareholders;

 

(f)litigation or other legal expenses relating solely to one Class; or

 

(g)other expenses incurred on behalf of the Class or for events or activities pertaining exclusively to the Class.

 

4.       Conversion and Exchange Features

 

The conversion and exchange features for shares of each Class shall be as set forth in the applicable Class Exhibit hereto.

 

5.       Amendment

 

Any material amendment of this Plan or any Class Exhibit hereto by any Multiple Class Company is subject to the approval of a majority of the directors/trustees of the applicable Multiple Class Company and a majority of the directors/trustees of the Multiple Class Company who are not interested persons of the Multiple Class Company, pursuant to the Rule.

 

 

 

 

 
 

 

Class A Shares Exhibit

To

Multiple Class Plan

(Revised 3/1/2020)

 

1.       SEPARATE ARRANGEMENT AND EXPENSE ALLOCATION

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Class A Shares will consist of sales and shareholder servicing by financial intermediaries in consideration of the payment of a portion of the applicable sales load (“dealer reallowance”)and a shareholder service fee. When indicated on the Schedule to this Exhibit, the principal underwriter and financial intermediaries may also receive payments for distribution and/or administrative services under a 12b-1 Plan. In connection with this basic arrangement, Class A Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Class A Shares
Sales Load Up to 5.5% of the public offering price, as set forth in the attached Schedules
Contingent Deferred Sales Charge ("CDSC") 0.00%
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee As set forth in the attached Schedule
Redemption Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Class A Shares as described in Section 3 of the Plan

 

2.       CONVERSION AND EXCHANGE PRIVILEGES

 

For purposes of Rule 18f-3, Class A Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, Class A Shares that are not subject to a contingent deferred sales charge (“CDSC”) based upon the redemption of a “Large Ticket” purchase made within 24 months may be converted to any other Share Class within the same Fund, provided that shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privilege: Class A Shares may be exchanged for Class A Shares of any other Fund  

 

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered. Exchanges to any other Class shall be treated in the same manner as a redemption and purchase.

 

3.       EXCEPTIONS TO BASIC ARRANGEMENTS

 

For purposes of Rules 22d-1 and 6c-10 under the Act, unless otherwise specified on the Schedule to this Exhibit, the scheduled variations in sales loads and contingent deferred sales charges are as follows:

 

(A)       BASIC SALES LOAD SCHEDULE

 

The basic schedule of sales loads for Class A Shares of Funds so designated on the Schedule to this Exhibit is as follows:

 

Purchase Amount

Sales Load as a Percentage of

Public Offering Price

Less than $50,000 5.50%
$50,000 but less than $100,000 4.50%
$100,000 but less than $250,000 3.75%
$250,000 but less than $500,000 2.50%
$500,000 but less than $1 million 2.00%
$1 million or greater 0.00%

 

(B)       FIXED INCOME SALES LOAD SCHEDULE

 

The schedule of sales loads for Class A Shares of Funds so designated on the Schedule to this Exhibit is as follows:

 

Purchase Amount

Sales Charge as a Percentage of

Public Offering Price

Less than $100,000 4.50%
$100,000 but less than $250,000 3.75%
$250,000 but less than $500,000 2.50%
$500,000 but less than $1 million 2.00%
$1 million or greater 0.00%

 

(C)       MODIFIED FIXED INCOME SALES LOAD SCHEDULE

 

The schedule of sales loads for Class A Shares of Funds so designated on the Schedule to this Exhibit is as follows:

 

Purchase Amount

Sales Charge as a Percentage of

Public Offering Price

Less than $100,000 1.00%
$100,000 or greater 0.00%

 

(D)       MONEY MARKET AND ULTRASHORT BOND LOAD SCHEDULE

 

The Schedule of sales loads for Class A Shares of Funds so designated on the Schedule to this Exhibit is as follows:

 

Purchase Amount

Sales Charge as a Percentage of

Public Offering Price

  
 
All purchases 0.00%  

 

 

(E)       "LARGE TICKET" PURCHASES

 

Unless otherwise indicated on the Schedule to this Exhibit, a financial intermediary that places an order to purchase $1,000,000 or more of Class A Shares shall receive from the principal underwriter an advance commission equal to 75 basis points (0.75%) of the public offering price. In such event, notwithstanding anything to the contrary in the Plan or this Exhibit, such Class A Shares shall be subject to a contingent deferred sales charge upon redemption within 24 months of purchase equal to 75 basis points (0.75%) of the lesser of (x) the purchase price of the Class A Shares or (y) the redemption price of the Class A Shares. Any contingent deferred sales charge received upon redemption of Class A Shares shall be paid to the principal underwriter in consideration of the advance commission.

 

(F)       REDUCING OR ELIMINATING THE SALES LOAD

 

Contingent upon notification to the Fund’s principal underwriter or transfer agent, in applying the exceptions set forth in this Section 3, the purchase amount shall take into account:

 

·                           Discounts achieved by combining concurrent purchases of and/or current investment in Class A, Class B, Class C, Class F, and Class R Shares, made or held by (or on behalf of) the investor, the investor’s spouse, and the investor’s children under age 21 (regardless of whether the purchases or investments are made or held directly or through an investment professional or through a single-participant retirement account); provided that such purchases and investments can be linked using tax identification numbers (TINs), social security numbers (SSNs), or Broker Identification Numbers (BINs); and
·                           Letters of intent to purchase a certain amount of Class A Shares within a thirteen month period.

 

(G)       waiver of sales load

 

Continent upon notification to the Fund’s Transfer Agent, no sales load shall be assessed on purchases of Class A Shares made:

 

·                           within 120 days of redeeming shares of an equal or greater amount;
·                           through a program offered by a Financial Intermediary that provides for the purchase of Shares without imposition of a sales charge (for example, a wrap account, self-directed brokerage account, retirement or other fee-based program offered by the Financial Intermediary) and where the Financial Intermediary has agreed with the principal underwriter not to receive a dealer reallowance on purchases under such program;
·                           with reinvested dividends or capital gains;
·                           or Class A Shares, issued in connection with the merger, consolidation, or acquisition of the assets of another fund.  Further, no sales load shall be assessed on purchases of Shares made by a shareholder that originally became a shareholder of a Federated Fund pursuant to the terms of an agreement and plan of reorganization which permits shareholders to acquire Shares at NAV provided that such Shares are held directly with the Fund’s transfer agent.  If the Shares are held through a financial intermediary the sales charge waiver will not apply;
·                           by Federated Life Members (Federated shareholders who originally were issued shares through the “Liberty Account”, which was an account for the Liberty Family of Funds on February 28, 1987, or who invested through an affinity group prior to August 1, 1987, into the Liberty Account);
·                           by Directors, Trustees, employees, former employees and sales representatives of the Fund, the Adviser, the principal underwriter and their affiliates, employees of any investment professional that sells Shares according to a sales agreement with the principal underwriter, by the immediate family members of the above persons, and by trusts, pensions or profit-sharing plans for the above persons; and
·                           pursuant to the exchange privilege.  However, this sales charge waiver may not apply to Class A Shares purchased pursuant to the exchange privilege if a shareholder did not previously pay a sales load upon its initial purchase of Class A Shares.

 

 
 

 

(H)       WAIVER OF CONTINGENT DEFFERED SALES CHARGE ON LARGE-TICKET PURCHASES

 

Contingent upon notification to the Fund’s principal underwriter or transfer agent, no CDSC will be imposed on redemptions.

 

·                           following the death of the last surviving shareholder on the account, or the post-purchase disability of all registered shareholder(s), as defined in Section 72(m)(7) of the Internal Revenue Code.
·                           due to the termination of a trust following the death of the trustor/grantor or beneficiary, provided that the trust document specifically states that the trust is terminated upon the death
·                           representing minimum required distributions (“RMD”) from an Individual Retirement Account or other retirement plan as required under the Internal Revenue Code;
·                           of Shares originally purchased through a financial intermediary that did not receive an advance commission on the purchase;
·                           of Shares that were reinvested within 120 days of a previous redemption;
·                           of Shares held by the Directors, Trustees, employees, former employees and sales representatives of the Fund, the Adviser, the principal underwriter and their affiliates, employees of any investment professional that sells Shares according to a sales agreement with the principal underwriter, by the immediate family members of the above persons, and by trusts, pension or profit-sharing plans for the above persons;
·                           of Shares originally purchased through a program offered by a Financial Intermediary that provides for the purchase of Shares without imposition of a sales charge (for example, a wrap account, self-directed brokerage account, retirement, or other fee-based program offered by the Financial Intermediary) and where the Financial Intermediary has agreed with the principal underwriter not to receive an advanced commission on purchases under such program;
·                           of Shares purchased with reinvested dividends or capital gains;
·                           imposed by the Fund when it closes an account for not meeting the minimum balance requirements; and
·                           of Shares which were purchased pursuant to an exchange privilege if the Shares were held for the applicable CDSC holding period.

 

(I)SALES CHARGE WAIVERS FOR SHAREHOLDERS PURCHASING THROUGH CERTAIN FINANCIAL INTERMEDIARIES

 

Financial intermediary sales charge variations required to be disclosed by Rule 22d-1 shall be as set forth in the prospectus of a Fund, as may be amended from time to time.

 

4.       SPECIAL OFFER PROGRAM

 

[NOTE: The 30 month CDSC period connected with of this program expired in September of 2002]

During the Special Offer Program which took place in March, 2000, the sales load was waived on purchases of Class A Shares of Federated Aggressive Growth Fund, Federated Communications Technology Fund, Federated Large Cap Growth Fund, and Federated International Small Company Fund (the "Special Offer Funds"). Instead, the principal underwriter paid an advance commission of 2.00% of the offering price of the Special Offer Funds to intermediaries participating in the Special Offer Program. Class A Shares purchased through this Special Offer were subject to a CDSC of 2.00% on redemptions which occurred within 30 months after the purchase, which amount was to be paid to the principal underwriter in consideration for advancing the commission to intermediaries. Class A Shares of the Special Offer Funds purchased during the Special Offer Program could be exchanged with Class A Shares of other Special Offer Funds with no imposition of a sales load or CDSC fee. Class A Shares of the Special Offer Funds purchased during the Special Offer Program which were exchanged for Class A Shares of other Funds during the 30 month CDSC period incurred the CDSC fee upon redemption. However, no sales load was charged for such an exchange.

 

5.       REDEMPTION FEE

 

For purposes of Rule 11a-3 under the Act, any redemption fee received upon the redemption or exchange of Class A Shares will be applied to fees incurred or amount expended in connection with such redemption or exchange. The balance of any redemption fees shall be paid to the Fund.

 

A Fund shall waive any redemption fee with respect to (i) non-participant directed redemptions or exchanges involving Class A Shares held in retirement plans established under Section 401(a) or 401(k) of the Internal Revenue Code (the “Code”), custodial plan accounts established under Section 493(b)(7) of the Code, or deferred compensation plans established under Section 457 of the Code; (ii) redemptions or exchanges involving Class A Shares held in plans administered as college savings programs under Section 529 of the Code; and (iii) Class A Shares redeemed due to the death of the last surviving shareholder on the account.

 
 

Schedule of Funds
Offering Class A Shares

 

The Funds set forth on this Schedule each offer Class A Shares on the terms set forth in the Class A Shares Exhibit to the Multiple Class Plan, in each case as indicated below. The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

 

1.       CLASS A SHARES SUBJECT TO THE BASIC LOAD SCHEDULE

 

Multiple Class Company

Series

12b-1

Fee

Redemption

Fee

     
Federated Adviser Series    
Federated Emerging Markets Equity Fund 0.05% None
Federated Hermes Absolute Return Credit Fund 0.05% None
Federated Hermes Global Equity Fund 0.05% None
Federated Hermes Global Small Cap Fund 0.05% None
Federated Hermes International Equity Fund 0.05% None
Federated Hermes Unconstrained Credit Fund 0.05% None
Federated Hermes US SMID Fund 0.05% None
Federated Hermes SDG Engagement Equity Fund 0.05% None
Federated Hermes SDG Engagement High Yield Credit Fund 0.05% None
Federated International Equity Fund 0.05% None
Federated International Growth Fund 0.05% None
Federated MDT Large Cap Value Fund 0.05% None
Federated Equity Funds    
Federated Clover Small Value Fund 0.05% None
Federated Global Strategic Value Dividend Fund 0.05% None
Federated International Strategic Value Dividend Fund 0.05% None
Federated Kaufmann Fund 0.25% None
Federated Kaufmann Large Cap Fund 0.25% None
Federated Kaufmann Small Cap Fund 0.25% None
Federated MDT Mid-Cap Growth Fund None None
Federated Prudent Bear Fund 0.05% None
Federated Strategic Value Dividend Fund 0.05% None
     
Federated Equity Income Fund, Inc. 0.05% None
     
Federated Global Allocation Fund None None
     
Federated High Yield Trust    
Federated Equity Advantage Fund 0.05% None
     
Federated Income Securities Trust    
Federated Capital Income Fund None None
Federated Muni and Stock Advantage Fund 0.05% None
Federated Real Return Bond Fund 0.05% None
     
Federated MDT Series    
Federated MDT All Cap Core Fund 0.05% None
Federated MDT Balanced Fund 0.05% None
Federated MDT Large Cap Growth Fund 0.05% None
Federated MDT Small Cap Core Fund 0.05% None
Federated MDT Small Cap Growth Fund 0.05% None
     
Federated World Investment Series, Inc.    
Federated International Leaders Fund 0.05% None
Federated International Small-Mid Company Fund 0.05% 2% on shares redeemed or exchanged within 30 days of purchase

 

2. CLASS A SHARES SUBJECT TO THE FIXED INCOME LOAD SCHEDULE

 

Multiple Class Company

Series

12b-1

Fee

Redemption

Fee

     
Federated Fixed Income Securities, Inc.    
Federated Strategic Income Fund None None
     
Federated Government Income Securities, Inc. 0.05% None
     
Federated High Income Bond Fund, Inc. None 2% on shares redeemed or exchanged within 90 days of purchase
     
Federated High Yield Trust    
Federated High Yield Trust 0.05% 2% on shares redeemed or exchanged within 90 days of purchase
     
Federated Income Securities Trust    
Federated Fund for U.S. Government Securities None None
     
Federated International Series, Inc.    
Federated Global Total Return Bond fund (formerly Federated International Bond Fund) 0.25% None
     
Federated Investment Series Funds, Inc.    
Federated Bond Fund 0.05% None
     
Federated Municipal Bond Fund, Inc. None None
     
Federated Municipal Securities Income Trust    
Federated Municipal High Yield Advantage Fund 0.05% None
Federated Ohio Municipal Income Fund 0.05% None
Federated Pennsylvania Municipal Income Fund 0.05% None
     
Federated Total Return Series, Inc.    
Federated Total Return Bond Fund 0.25% None
     
Federated World Investment Series, Inc.    
Federated Emerging Market Debt Fund None None

 

3. Class A Shares Subject to the MODIFIED FIXED INCOME Sales Load Schedule

 

Multiple Class Company

Series

12b-1

Fee

Redemption

Fee

     
Federated Income Securities Trust    
Federated Floating Rate Strategic Income Fund 0.05% None
Federated Short-Term Income Fund 0.05% None
     
Federated Institutional Trust    
Federated Short-Intermediate Total Return Bond Fund 0.05% None
     
Federated Short-Intermediate Duration Municipal Trust 0.05% None

 

4. Class A Shares Subject to the Money Market AND ULTRASHORT BOND Load Schedule

 

Multiple Class Company

Series

12b-1

Fee

Redemption

Fee

     
Federated Fixed Income Securities, Inc.    
Federated Municipal Ultrashort Fund None None
     
Federated Institutional Trust    
Federated Government Ultrashort Duration Fund None None
     
Federated Total Return Series, Inc.    
Federated Ultrashort Bond Fund None None
     
Money Market Obligations Trust    
Federated Government Reserves Fund 0.45% None

 

 

5.       Class A Shares Not Participating in the Large Ticket Purchase Program

 

Multiple Class Company Series
Federated Fixed Income Securities, Inc. Federated Municipal Ultrashort Fund
Federated Income Securities Trust Federated Short-Term Income Fund
  Federated Floating Rate Strategic Income Fund
Federated Institutional Trust Federated Government Ultrashort Duration Fund
Federated Short-Intermediate Duration Municipal Trust  
Federated Total Return Series, Inc. Federated Ultrashort Bond Fund

 

 
 

 

Administrative Shares Exhibit

To

Multiple Class Plan

(Revised 12/1/ 2018)

 

1.       SEPARATE ARRANGEMENT AND EXPENSE ALLOCATION

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Administrative (“ADM”) Shares will consist of sales and shareholder servicing by financial intermediaries. The principal underwriter and financial intermediaries may receive payments for distribution and/or administrative services under a Rule 12b-1 Plan and financial intermediaries may also receive shareholder service fees for services provided. In connection with this basic arrangement, ADM Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated ADM Shares
Sales Load None
Contingent Deferred Sales Charge ("CDSC") None
Shareholder Service Fee As set forth in the attached Schedule
12b-1 Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of ADM Shares as described in Section 3 of the Plan
   

 

2.       CONVERSION AND EXCHANGE PRIVILEGES

 

For purposes of Rule 18f-3, ADM Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, ADM Shares may be converted to any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privilege: ADM Shares may be exchanged into any Federated fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares of  Federated Institutional Money Market Management, Federated Institutional Prime Obligations Fund, Federated Institutional Tax-Free Cash Trust, Federated Institutional Prime Value Obligations Fund, Class A Shares of Federated Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange.

 

An exchange will be treated as a redemption and a subsequent purchase, and will be a taxable transaction. Exchange privileges may be modified or terminated at any time. A conversion of classes should not result in a realization for tax purposes.

 

Schedule of Funds
Offering ADM Shares

 

The Funds set forth on this Schedule each offer ADM Shares on the terms set forth in the ADM Shares Exhibit to the Multiple Class Plan, in each case as indicated below. The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

 

1.       ADM SHARES SUBJECT TO THE BASIC LOAD SCHEDULE

 

Multiple Class Company

Series

 12b-1 Fee Shareholder Service Fee
     
Money Market Obligations Trust    
Federated Government Obligations Fund 0.25% Up to 0.25%, with 0.05% of the service fee being active upon the initial offering of the ADM Shares and 0.20% remaining dormant until approved by the Fund’s Board

 

 
 

 

ADVISoR Shares Exhibit

To

Multiple Class Plan

(12/1/18)

 

1.       SEPARATE ARRANGEMENT AND EXPENSE ALLOCATION

 

Advisor (“AVR”) Shares are available exclusively for shareholders investing through certain financial intermediaries that have entered into an agreement with the Funds’ distributor who has approved them for the sale of AVR Shares. For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the AVR Shares will consist of sales and shareholder servicing by financial intermediaries. In connection with this basic arrangement, AVR Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated AVR Shares
Sales Load None
Contingent Deferred Sales Charge ("CDSC") None
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of AVR Shares as described in Section 3 of the Plan
   

 

2.       CONVERSION AND EXCHANGE PRIVILEGES

 

For purposes of Rule 18f-3, AVR Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: None.
Exchange Privilege: AVR Shares may be exchanged into any Federated fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares of Federated Institutional Money Market Management, Federated Institutional Prime Obligations Fund, Federated Institutional Tax-Free Cash Trust, Federated Institutional Prime Value Obligations Fund, Class A Shares of Federated Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange.

 

An exchange will be treated as a redemption and a subsequent purchase, and will be a taxable transaction. Exchange privileges may be modified or terminated at any time.

 

Schedule of Funds
Offering AVR Shares

 

The Funds set forth on this Schedule each offer AVR Shares on the terms set forth in the AVR Shares Exhibit to the Multiple Class Plan, in each case as indicated below. The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

 

1.       AVR SHARES SUBJECT TO THE BASIC LOAD SCHEDULE

 

Multiple Class Company

Series

 12b-1 Fee
   
Money Market Obligation Trust  
Federated Government Obligations Fund None
Federated Prime Cash Obligations Fund None
Federated Tax Free Obligations Fund None

 

 
 

 

AUTOMATED Shares Exhibit

To

Multiple Class Plan

(revised 6/1/19)

 

1.       Separate Arrangement And Expense Allocation

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Automated Shares will consist of sales and shareholder servicing by financial intermediaries. Financial intermediaries may receive shareholder service fees for services provided. In connection with this basic arrangement, Automated Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Automated Shares
Sales Load None

Contingent Deferred

Sales Charge ("CDSC")

 

None

Shareholder Service Fee

Recordkeeping Fee

Up to 25 basis points (0.25%) of the average daily net asset value

Up to 10 basis points (0.10%) of the average daily net asset value

12b-1 Fee None
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Automated Shares as described in Section 3 of the Plan

 

2.       Conversion and Exchange Privileges

 

For purposes of Rule 18f-3, Automated Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privileges: Automated Shares may be exchanged into any Federated fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares of Federated Institutional Money Market Management, Federated Institutional Prime Obligations Fund, Federated Institutional Tax-Free Cash Trust, Federated Institutional Prime Value Obligations Fund, Class A Shares of Federated Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange.

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered, after the payment of any redemption fees to the Fund. Exchanges shall be treated in the same manner as a redemption and purchase.

 

Schedule of Funds
Offering AUTOMATED Shares

 

The Funds set forth on this Schedule each offer Automated Shares on the terms set forth in the Automated Shares Exhibit to the Multiple Class Plan.

 

Multiple Class Company

Series

 
Money Market Obligations Trust
  Federated Municipal Obligations Fund
  Federated Prime Cash Obligations Fund
  Federated Government Obligations Tax-Managed Fund
  Federated Treasury Obligations Fund

 

 
 

 

 

Class B Shares Exhibit

To

Multiple Class Plan

(Revised 06/01/19)

 

1.       Separate Arrangement And Expense Allocation

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Class B Shares will consist of sales by financial intermediaries in consideration of the payment of an advance commission paid by the principal underwriter. Financial intermediaries may perform shareholder services and receive a shareholder service fee for their services. In consideration of advancing commissions and/or the provision of shareholder services, the principal underwriter may receive the contingent deferred sales charges paid upon redemption of Class B Shares, and/or shareholder service fees and/or fees under a 12b-1 plan. In connection with this basic arrangement, Class B Shares will bear the following fees and expenses:

Fees and Expenses Maximum Amount Allocated Class B Shares
Sales Load None
Contingent Deferred Sales Charge (“CDSC”) Up to 5.5% of the share price at the time of purchase or redemption, whichever is lower
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee Up to 75 basis points (0.75%) of the average daily net asset value
Redemption Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Class B Shares as described in Section 3 of the Plan

 

2.       Conversion and Exchange Privileges

For purposes of Rule 18f-3, Class B Shares have the following conversion rights and exchange privileges at the election of the shareholder:

Conversion Rights: After Class B Shares have been held for eight years from the date of purchase, they will automatically convert into Class A Shares.
Exchange Privilege: Class B Shares may be exchanged for Class B Shares of any other fund.

In any conversion or exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered. Exchanges to any other Class shall be treated in the same manner as a redemption and purchase.

 

3.       Exceptions to Basic Arrangements

For purposes of Rules 6c-10 and 22d-1 under the Act, unless otherwise specified on the Schedule to this Exhibit, the scheduled variations in contingent deferred sales charges payable upon redemption are as follows:

(A)       BASIC CDSC SCHEDULE

Shares Held Up to: To: Have A CDSC Of:
1 year 5.50 %
2 years 4.75 %
3 years 4.00 %
4 years 3.00 %
5 years 2.00 %
6 years 1.00 %
7 years 0.00 %
8 years Convert to Class A Shares

 

(B)       WAIVER OF CDSC

Contingent upon notification to the Fund’s principal underwriter or transfer agent, no CDSC will be imposed on redemptions:

·                  following the death of the last surviving shareholder or post-purchase disability, as defined in Section 72(m)(7) of the Internal Revenue Code of 1986;
·                  due to the termination of a trust following the death of the trustor/grantor or beneficiary, provided that the trust document specifically states that the trust is terminated upon the death
·                  representing minimum required distributions (“RMD”) from an Individual Retirement Account or other retirement plan as required under the Internal Revenue Code;
·                  of Shares that were reinvested within 120 days of a previous redemption;
·                  of Shares held by the Directors, Trustees, employees, former employees and sales representatives of the Fund, the Adviser, the principal underwriter and their affiliates, employees of any investment professional that sells Shares according to a sales agreement with the principal underwriter, by the immediate family members of the above persons, and by trusts, pension or profit-sharing plans for the above persons;
·                  of Shares originally purchased through a program offered by a Financial Intermediary that provides for the purchase of Shares without imposition of a sales charge (for example, a wrap account, self-directed brokerage account, retirement, or other fee-based program offered by the Financial Intermediary) and where the Financial Intermediary has agreed with the principal underwriter not to receive an advanced commission on purchases under such program;
·                  of Shares purchased with reinvested dividends or capital gains;
·                  imposed by the Fund when it closes an account for not meeting the minimum balance requirements; and
·                  of Shares which were purchased pursuant to an exchange privilege if the Shares were held for the applicable CDSC holding period.

 

(C) SYSTEMATIC WITHDRAWAL PROGRAM

Contingent upon notification to the principal underwriter or the Fund’s transfer agent, no CDSC will be imposed on redemptions that are qualifying redemptions of Class B Shares under a Systematic Withdrawal Program as described in the applicable prospectus and statement of additional information.

(D) SALES CHARGE WAIVERS FOR SHAREHOLDERS PURCHASING THROUGH CERTAIN FINANCIAL INTERMEDIARIES

 

Financial intermediary sales charge variations required to be disclosed by Rule 22d-1 shall be as set forth in the prospectus of a Fund, as may be amended from time to time.

 

4.       Redemption Fee

For purposes of Rule 11a-3 under the Act, any redemption fee received upon the redemption or exchange of Class B Shares will be applied to fees incurred or amount expended in connection with such redemption or exchange. The balance of any redemption fees shall be paid to the Fund.

A Fund shall waive any redemption fee with respect to (i) non-participant directed redemptions or exchanges involving Class B Shares held in retirement plans established under Section 401(a) or 401(k) of the Internal Revenue Code (the “Code”), custodial plan accounts established under Section 493(b)(7) of the Code, or deferred compensation plans established under Section 457 of the Code; (ii) redemptions or exchanges involving Class B Shares held in plans administered as college savings programs under Section 529 of the Code; and (iii) Class B Shares redeemed due to the death of the last surviving shareholder on the account.

 
 

 

SCHEDULE OF FUNDS
OFFERING CLASS B SHARES

The Funds set forth on this Schedule each offer Class B Shares on the terms set forth in the Class B Shares Exhibit to the Multiple Class Plan, in each case as indicated below. The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

CLASS B SHARES SUBJECT TO THE BASIC LOAD SCHEDULE

Multiple Class Company
Series		 12b-1 Fee Redemption Fee
     
Federated Adviser Series:    
Federated MDT Large Cap Value Fund 0.75% None
     
Federated Equity Funds:    
Federated Kaufmann Fund 0.75% None
Federated Kaufmann Small Cap Fund 0.75% None
     
Federated Equity Income Fund, Inc. 0.75% None
     
Federated Fixed Income Securities, Inc.:    
Federated Strategic Income Fund 0.75% None
     
Federated Global Allocation Fund 0.75% None
     
Federated High Income Bond Fund, Inc. 0.75% 2% on shares redeemed or exchanged within 90 days of purchase
     
Federated Income Securities Trust:    
Federated Capital Income Fund 0.75% None
Federated Fund for U.S. Government Securities 0.75% None
Federated Muni and Stock Advantage Fund 0.75% None
     
Federated Investment Series Funds, Inc.:    
Federated Bond Fund 0.75% None
     
Federated MDT Series:    
Federated MDT Large Cap Growth Fund 0.75% None
     
Federated Municipal Bond Fund, Inc. 0.75% None
     
Federated Municipal Securities Income Trust:    
Federated Municipal High Yield Advantage Fund 0.75% None
     

 

CLASS B SHARES SUBJECT TO THE BASIC LOAD SCHEDULE (continued)

 

Multiple Class Company
Series		 12b-1 Fee Redemption Fee
     
Federated Total Return Series, Inc.:    
Federated Total Return Bond Fund 0.75% None
     
Federated World Investment Series, Inc.:    
Federated International Leaders Fund 0.75% None
     
Money Market Obligations Trust:    
Federated Government Reserves Fund 0.75% None

 

 
 

 

Class C Shares Exhibit

To

Multiple Class Plan

(revised 03/1/2020)

 

1.       Separate Arrangement And Expense Allocation

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Class C Shares will consist of sales by financial intermediaries in consideration of an advance commission of up to 1.00% of the public offering price, paid by the principal underwriter. Financial intermediaries may also provide shareholder services and may receive shareholder services fees therefor. Additionally, the principal underwriter and financial intermediaries may receive distribution and/or administrative service fees under the 12b-1 Plan. In cases where the principal underwriter has advanced a commission to the financial intermediary, such 12b-1 fees will be paid to the financial intermediary beginning in the thirteenth month after purchase. In consideration of advancing commissions, the principal underwriter will receive the contingent deferred sales charges paid upon redemption of Class C Shares and payments made under the 12b-1 Plan for twelve months following the purchase. In connection with this basic arrangement, Class C Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Class C Shares
Contingent Deferred Sales Charge (“CDSC”) 1.00% of the share price at the time of purchase or redemption, whichever is lower if redeemed within twelve months following purchase
   
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
   
12b-1 Fee As set forth in the attached Schedule
   
Redemption Fee As set forth in the attached Schedule
   
Other Expenses

Itemized expenses incurred by the Fund with respect to holders of Class C Shares as described in Section 3 of the Plan

 

 

2.       Conversion and Exchange Privileges

For purposes of Rule 18f-3, Class C Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights:

At the election of the shareholder, Class C Shares that are not subject to a contingent deferred sales charge (“CDSC”) may be converted to any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable. For Class C Shares purchased through a financial intermediary after June 30, 2017, such shares may only be converted to another Share Class of the same Fund if: (i) the Class C Shares are no longer subject to a CDSC or the financial intermediary agrees to reimburse the Fund’s distributor the CDSC otherwise payable upon the sale of such Class C Shares; (ii) the shareholder meets the investment minimum and eligibility requirements for the Share Class into which the conversion is sought, as applicable; and (iii) (A) the conversion is made to facilitate the shareholder’s participation in a self-directed brokerage account for a fee-based advisory program offered by the intermediary, or (B) the conversion is part of a multiple-client transaction through a particular financial intermediary as pre-approved by the Fund’s Administrator.

After Class C Shares have been held for ten years from the date of purchase, they will automatically convert into Class A Shares on the next monthly conversion processing date, provided that the Fund or financial intermediary, record keeper, or platform has records confirming that the Class C Shares have been held for at least ten years and that Class A Shares are available for purchase. The financial intermediary, record keeper, or platform shall provide, upon the Fund’s request, representations that it has records confirming that the Class C Shares have been held for at least ten years and that Class A Shares are available for purchase. For Class C Shares acquired in an exchange from another Fund, the date of purchase will be based on the initial purchase of the Class C Shares of the prior Fund.”

Exchange Privileges: Class C Shares may be exchanged for Class C Shares of any other Fund.  

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered. Exchanges to any other Class shall be treated in the same manner as a redemption and purchase.

 

3.       Exceptions to Basic Arrangements

 

For purposes of Rules 22d-1 and 6c-10 under the Act, unless otherwise specified on the Schedule to this Exhibit, the scheduled variations contingent deferred sales charges are as follows:

 

(A)        WAIVER OF CDSC

 

·                  following the death of the last surviving shareholder on the account, or post-purchase disability of all registered shareholder(s), as defined in Section 72(m)(7) of the Internal Revenue Code;
·                  due to the termination of a trust following the death of the trustor/grantor or beneficiary, provided that the trust document specifically states that the trust is terminated upon the death
·                  representing minimum required distributions (“RMD”) from an Individual Retirement Account or other retirement plan as required under the Internal Revenue Code;
·                  of Shares originally purchased through a financial intermediary that did not receive an advance commission on the purchase;
·                  of Shares that were reinvested within 120 days of a previous redemption;
·                  of Shares held by the Directors, Trustees, employees, former employees and sales representatives of the Fund, the Adviser, the principal underwriter and their affiliates, employees of any investment professional that sells Shares according to a sales agreement with the principal underwriter, by the immediate family members of the above persons, and by trusts, pension or profit-sharing plans for the above persons;
·                  of Shares originally purchased through a program offered by a Financial Intermediary that provides for the purchase of Shares without imposition of a sales charge (for example, a wrap account, self-directed brokerage account, retirement, or other fee-based program offered by the Financial Intermediary) and where the Financial Intermediary has agreed with the principal underwriter not to receive an advanced commission on purchases under such program;
·                  of Shares purchased with reinvested dividends or capital gains;
·                  imposed by the Fund when it closes an account for not meeting the minimum balance requirements; and
·                  of Shares which were purchased pursuant to an exchange privilege if the Shares were held for the applicable CDSC holding period.

 

(B) SALES CHARGE WAIVERS FOR SHAREHOLDERS PURCHASING THROUGH CERTAIN FINANCIAL INTERMEDIARIES

 

Financial intermediary sales charge variations required to be disclosed by Rule 22d-1 shall be as set forth in the prospectus of a Fund, as may be amended from time to time.

4.       Redemption Fee

 

For purposes of Rule 11a-3 under the Act, any redemption fee received upon the redemption or exchange of Class C Shares will be applied to fees incurred or amount expended in connection with such redemption or exchange. The balance of any redemption fees shall be paid to the Fund.

A Fund shall waive any redemption fee with respect to (i) non-participant directed redemptions or exchanges involving Class C Shares held in retirement plans established under Section 401(a) or 401(k) of the Internal Revenue Code (the “Code”), custodial plan accounts established under Section 493(b)(7) of the Code, or deferred compensation plans established under Section 457 of the Code; (ii) redemptions or exchanges involving Class C Shares held in plans administered as college savings programs under Section 529 of the Code; and (iii) Class C Shares redeemed due to the death of the last surviving shareholder on the account.

 

Schedule of Funds

Offering Class C Shares

 

The Funds set forth on this Schedule each offer Class C Shares on the terms set forth in the Class C Shares Exhibit to the Multiple Class Plan, in each case as indicated below. The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

 

CLASS C SHARES SUBJECT TO THE BASIC LOAD SCHEDULE

Multiple Class Company
Series		 12b-1 Fee Redemption Fee
Federated Adviser Series    
Federated Emerging Markets Equity Fund 0.75% None
Federated Hermes Absolute Return Credit Fund 0.75% None
Federated Hermes Global Equity Fund 0.75% None
Federated Hermes Global Small Cap Fund 0.75% None
Federated Hermes International Equity Fund 0.75% None
Federated Hermes SDG Engagement Equity Fund 0.75% None
Federated Hermes SDG Engagement High Yield Credit Fund 0.75% None
Federated Hermes Unconstrained Credit Fund 0.75% None
Federated Hermes US SMID Fund 0.75% None
Federated International Equity Fund 0.75% None
Federated International Growth Fund 0.75% None
Federated MDT Large Cap Value Fund 0.75% None
     
Federated Equity Funds:    
Federated Clover Small Value Fund 0.75% None
Federated Global Strategic Value Dividend Fund 0.75% None
Federated International Strategic Value Dividend Fund 0.75% None
Federated Kaufmann Fund 0.75% None
Federated Kaufmann Large Cap Fund 0.75% None
Federated Kaufmann Small Cap Fund 0.75% None
Federated MDT Mid-Cap Growth Fund 0.75% None
Federated Prudent Bear Fund 0.75% None
Federated Strategic Value Dividend Fund 0.75% None
     
Federated Equity Income Fund, Inc. 0.75% None
     
Federated Fixed Income Securities, Inc.:    
Federated Strategic Income Fund 0.75% None
    None
Federated Global Allocation Fund 0.75% None
     
Federated Government Income Securities, Inc. 0.75% None
     
Federated High Income Bond Fund, Inc. 0.75% 2% on shares redeemed or exchanged within 90 days of purchase
     
Federated High Yield Trust 0.75% 2% on shares redeemed or exchanged within 90 days of purchase
     
Federated Income Securities Trust:    
Federated Capital Income Fund 0.75% None
Federated Floating Rate Strategic Income Fund 0.75% None
Federated Fund for U.S. Government Securities 0.75% None
Federated Muni and Stock Advantage Fund 0.75% None
Federated Real Return Bond Fund 0.75% None
     
       

 

 

CLASS C SHARES SUBJECT TO THE BASIC LOAD SCHEDULE (continued)

Multiple Class Company
Series		 12b-1 Fee Redemption Fee
Federated Index Trust    
Federated Max-Cap Index Fund 0.75% None
     
Federated International Series, Inc.:    
Federated Global Total Return Bond Fund (formerly Federated International Bond Fund) 0.75% None
Federated Investment Series Funds, Inc.:    
Federated Bond Fund 0.75% None
     
Federated MDT Series:    
Federated MDT All Cap Core Fund 0.75% None
Federated MDT Balanced Fund 0.75% None
Federated MDT Large Cap Growth Fund 0.75% None
Federated MDT Small Cap Core Fund 0.75% None
Federated MDT Small Cap Growth Fund 0.75% None
     
Federated Municipal Bond Fund, Inc. 0.75% None
     
Federated Municipal Securities Income Trust:    
Federated Municipal High Yield Advantage Fund 0.75% None
     
Federated Total Return Series, Inc.:    
Federated Total Return Bond Fund 0.75% None
     
Federated World Investment Series, Inc.:    
Federated Emerging Market Debt Fund 0.75% None
Federated International Leaders Fund 0.75% None
Federated International Small-Mid Company Fund 0.75% 2% on shares redeemed or exchanged within 30 days of purchase
     
Money Market Obligations Trust:    
Federated Government Reserves Fund 0.75% None

 

 

 
 

 

Capital Shares Exhibit

To

Multiple Class Plan

(Revised 12/1/18)

 

1.       Separate Arrangement And Expense Allocation

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Capital Shares will consist of sales and shareholder servicing by financial intermediaries. Financial intermediaries may receive shareholder service fees for services provided. In connection with this basic arrangement, Capital Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Capital Shares
Sales Load None
Contingent Deferred Sales Charge ("CDSC") None
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee None
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Capital Shares as described in Section 3 of the Plan

 

2.       Conversion and Exchange Privileges

 

For purposes of Rule 18f-3, Capital Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, Shares may be converted into   any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privileges: Capital Shares may be exchanged into any Federated fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares of Federated Institutional Money Market Management, Federated Institutional Prime Obligations Fund, Federated Institutional Tax-Free Cash Trust, Federated Institutional Prime Value Obligations Fund, Class A Shares of Federated Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange.

 

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered. Exchanges to any other fund or class shall be treated in the same manner as a redemption and purchase.

 

Schedule of Funds

Offering Capital Shares

 

The Funds set forth on this Schedule each offer Capital Shares on the terms set forth in the Capital Shares Exhibit to the Multiple Class Plan.

 

Multiple Class Company

Series

 
Money Market Obligations Trust
  Federated California Municipal Cash Trust
  Federated Government Obligations Fund
  Federated Institutional Money Market Management
  Federated Municipal Obligations Fund
  Federated Prime Cash Obligations Fund
  Federated Institutional Prime Obligations Fund
  Federated Institutional Prime Value Obligations Fund
  Federated Treasury Obligations Fund

 

 
 

 

 

CASH II Shares Exhibit

To

Multiple Class Plan
(revised 12/1/18)

1.       Separate Arrangement And Expense Allocation

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Cash II Shares will consist of sales and shareholder servicing by financial intermediaries. The principal underwriter and financial intermediaries may receive payments for distribution and/or administrative services under a 12b-1 Plan and financial intermediaries may also receive shareholder services fees for services provided. In connection with this basic arrangement, Cash II Shares will bear the following fees and expenses:

Fees and Expenses Maximum Amount Allocated Cash II Shares
Sales Load None
Contingent Deferred Sales Charge ("CDSC") None
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Cash II Shares as described in Section 3 of the Plan

 

2.       Conversion and Exchange Privileges

For purposes of Rule 18f-3, Cash II Shares have the following conversion rights and exchange privileges at the election of the shareholder:

Conversion Rights: At the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privilege: Cash II Shares may be exchanged into any Federated fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares of Federated Institutional Money Market Management, Federated Institutional Prime Obligations Fund, Federated Institutional Tax-Free Cash Trust, Federated Institutional Prime Value Obligations Fund, Class A Shares of Federated Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange.

 

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered. Exchanges to any other fund or class shall be treated in the same manner as a redemption and purchase.

 

Schedule of Funds
Offering Cash II Shares

The Funds set forth on this Schedule each offer Cash II Shares on the terms set forth in the Cash II Shares Exhibit to the Multiple Class Plan, in each case as indicated below. The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

Multiple Class Company
Series		 12b-1 Fee
   
Money Market Obligations Trust:  
Federated California Municipal Cash Trust 0.20%
Federated Government Obligations Fund 0.35%
Federated Municipal Obligations Fund 0.35%
Federated New York Municipal Cash Trust 0.25%
Federated Prime Cash Obligations Fund 0.35%
Federated Trust for U.S. Treasury Obligations 0.35%

 

 
 

 

Cash series Shares Exhibit

To

Multiple Class Plan

(Revised 12/1/18)

 

1.       Separate Arrangement And Expense Allocation

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement for the Cash Series Shares will consist of sales and shareholder servicing by financial intermediaries. The principal underwriter and financial intermediaries may receive payments for distribution and/or administrative services under a 12b-1 Plan and financial intermediaries may receive a shareholder service fee for services provided. In connection with this basic arrangement, Cash Series Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Cash Series Shares
Sales Load None

Contingent Deferred

Sales Charge ("CDSC")

 None
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Cash Series Shares as described in Section 3 of the Plan

 

2.       Conversion and Exchange Privileges

 

For purposes of Rule 18f-3, Cash Series Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privileges: Cash Series Shares may be exchanged into any Federated fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares Federated Institutional Money Market Management, Federated Institutional Prime Obligations Fund, Federated Institutional Tax-Free Cash Trust, Federated Institutional Prime Value Obligations Fund, Class A Shares of Federated Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange.

 

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered. Exchanges to any other fund or class shall be treated in the same manner as a redemption and purchase.

 

Schedule of Funds

Offering Cash Series Shares

 

The Funds set forth on this Schedule each offer Cash Series Shares on the terms set forth in the Cash Series Shares Exhibit to Multiple Class Plan, in each case as indicated below. The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

 

Multiple Class Company 12b-1 Fee
   
Money Market Obligations Trust:  
Federated California Municipal Cash Trust 0.60%
Federated Government Obligations Fund 0.60%
Federated Massachusetts Municipal Cash Trust 0.60%
Federated Municipal Obligations Fund 0.60%
Federated New York Municipal Cash Trust 0.60%
Federated Pennsylvania Municipal Cash Trust 0.40%
Federated Prime Cash Obligations Fund 0.60%
Federated Trust for U.S. Treasury Obligations 0.60%
Federated Virginia Municipal Cash Trust 0.60%

 

 
 

 

EAGLE Shares Exhibit

To

Multiple Class Plan

(Revised 12/1/18)

 

1.       Separate Arrangement And Expense Allocation

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Eagle Shares will consist of sales and shareholder servicing by financial intermediaries. The principal underwriter and financial intermediaries may receive payments for distribution and/or administrative services under a Rule 12b-1 Plan and financial intermediaries may also receive shareholder service fees for services provided. In connection with this basic arrangement, Eagle Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Eagle Shares
Sales Load None
Contingent Deferred Sales Charge ("CDSC") None
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Eagle Shares as described in Section 3 of the Plan

 

2.       Conversion and Exchange Privileges

 

For purposes of Rule 18f-3, Eagle Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privilege: Eagle Shares may be exchanged into any Federated fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares Federated Institutional Money Market Management, Federated Institutional Prime Obligations Fund, Federated Institutional Tax-Free Cash Trust, Federated Institutional Prime Value Obligations Fund, Class A Shares of Federated Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange.

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered. Exchanges to any other Class shall be treated in the same manner as a redemption and purchase.

 

Schedule of FundS

Offering EAGLE Shares

 

The Funds set forth on this Schedule each offer Eagle Shares on the terms set forth in the Eagle Shares Exhibit to the Multiple Class Plan, in each case as indicated below. The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

Multiple Class Company
Series		 12b-1 Fee
   

Money Market Obligations Trust:

Federated Institutional Money Market Management

 

None

 

 
 

 

Class F Shares Exhibit

To

Multiple Class Plan

(Revised 8/01/18)

 

1.       Separate Arrangement And Expense Allocation

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement for the Class F Shares will consist of sales by financial intermediaries in consideration of the payment of the sales load (“dealer reallowance”). Financial intermediaries may also provide shareholder services and may receive shareholder service fees therefor. Additionally, the principal underwriter may pay up to 100 basis points (1.00%) of the public offering price to financial intermediaries as an advance commission on sales. In consideration of advancing this payment, the principal underwriter will receive any contingent deferred sales charges paid upon redemption of Class F Shares and distribution service fees under the 12b-1 Plan on an ongoing basis. In connection with this basic arrangement Class F Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Class F Shares
Sales Load Up to 100 basis points (1.00%) of the public offering price
Contingent Deferred Sales Charge ("CDSC") Up to 100 basis points (1.00%) of the share price at the time of original purchase or redemption, whichever is lower
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Class F Shares as described in Section 3 of the Plan

 

2.       Conversion and Exchange Privileges

 

For purposes of Rule 18f-3, Class F Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, Class F Shares that are not subject to a contingent deferred sales charge (“CDSC”) may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privileges: Class F Shares may be exchanged for Class F Shares of any other Fund.  

 

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered. Exchanges to any other Class shall be treated as a redemption and purchase.

 

3.       Exceptions to Basic Arrangements

 

For purposes of Rules 22d-1 and 6c-10 under the Act, unless otherwise specified on the Schedule to this Exhibit, the scheduled variations in sales load and contingent deferred sales charges are as follows:

 

(A)       BASIC SALES LOAD SCHEDULE *

 

 

Purchase Amount:

 Sales Charge as Percentage of Offering Price Sales Charge as a Percentage of NAV
Less than $1 million 1.00% 1.01%
$1 million or greater 0.00% 0.00%

(B)       CDSC SCHEDULE

Unless otherwise indicated below, the Schedule of Contingent Deferred Sales Charges for each Fund is as follows:

 

 

Purchase Amount:

 

Shares Held:

 Contingent Deferred Sales Charge:  
Under $2 million 4 years or less 1.00%
$2 million but less than $5 million 2 years or less 0.50%
$ 5 million or greater 1 year or less 0.25%

 

(C)       REDUCING OR ELIMINATING THE SALES LOAD

 

Contingent upon notification to the Fund’s principal underwriter or transfer agent, in applying the exceptions set forth in this Section 3, the purchase amount shall take into account:

 

·                  Discounts achieved by combining concurrent purchases of and/or current investment in Class A, Class B, Class C, Class F, and Class R Shares, made or held by (or on behalf of) the investor, the investor’s spouse, and the investor’s children under age 21 (regardless of whether the purchases or investments are made or held directly or through an investment professional or through a single-participant retirement account); provided that such purchases and investments can be linked using tax identification numbers (TINs), social security numbers (SSNs), or Broker Identification Numbers (BINs); and
·                  Letters of intent to purchase a certain amount of Class F Shares within a thirteen month period.

 

(D)       WAIVER OF SALES LOAD

 

Contingent upon notification to the Fund's principal underwriter or transfer agent, no sales load will be assessed on purchases of Class F Shares made:

 

·         within 120 days of redeeming Shares of an equal or greater amount;
·         through a financial intermediary that did not receive a dealer reallowance on the purchase;
·                  by shareholders who originally became shareholders of a Fund pursuant to the terms of an agreement and plan of reorganization which permits the shareholders to acquire shares at net asset value.  However, if the shareholder closes their account with the transfer agent, or if the shareholder transfers their account to another financial intermediary, the shareholder may no longer receive a sales charge waiver;
·         with reinvested dividends or capital gains;
·         by Directors, Trustees, employees, former employees and sales representatives of the Fund, the Adviser, the principal underwriter and their affiliates, employees of any investment professional that sells shares according to a sales agreement with the principal underwriter, by the immediate family members of the above persons, and by trusts, pension or profit-sharing plans for the above persons; and
·         pursuant to the exchange privilege.

 

(E)       WAIVER OF CDSC

 

Contingent upon notification to the Fund’s principal underwriter or transfer agent, no CDSC will be imposed on redemptions:

 

·         following the death of the last surviving shareholder on the account,  or post-purchase disability of all registered shareholder(s), as defined in Section 72(m)(7) of the Internal Revenue Code;
·                  due to the termination of a trust following the death of the trustor/grantor or beneficiary, provided that the trust document specifically states that the trust is terminated upon the death
·                  representing minimum required distributions (“RMD”) from an Individual Retirement Account or other retirement plan as required under the Internal Revenue Code;
·         of Shares originally purchased through a financial intermediary that did not receive an advance commission on the purchase.
·         of Shares that were reinvested within 120 days of a previous redemption of an equal or lesser amount;
·         of Shares held by the Directors, Trustees, employees, former employees and sales representatives of the Fund, the Adviser, the principal underwriter and their affiliates, employees of any investment professional that sells Shares according to a sales agreement with the principal underwriter, by the immediate family members of the above persons, and by trusts, pension or profit-sharing plans for the above persons;
·         of Shares originally purchased through a program offered by a Financial Intermediary that provides for the purchase of Shares without imposition of a sales charge (for example, a wrap account, self-directed brokerage account, retirement, or other fee-based program offered by the Financial Intermediary) and where the Financial Intermediary has agreed with the principal underwriter not to receive an advanced commission on purchases under such program;
·         of Shares purchased with reinvested dividends or capital gains;
·         imposed by the Fund when it closes an account for not meeting the minimum balance requirements;
·         of Shares which were purchased pursuant to an exchange privilege if the Shares were held for the applicable CDSC holding period; and
·        

representing a total or partial distribution from a qualified plan, which would not include account transfer, rollovers, or redemptions for the purpose of reinvestment. For these purposes, qualified plans would not include an Individual Retirement Account, Keogh Plan or custodial account following retirement.

 

 

 

 

 

 

 

 

Schedule of Funds

Offering Class F Shares

 

The Funds set forth on this Schedule each offer Class F Shares on the terms set forth in the Class F Shares Exhibit to the Multiple Class Plan, in each case as indicated below. The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

 

CLASS F SHARES SUBJECT TO THE BASIC LOAD SCHEDULE

 

Multiple Class Company

Series

 12b-1 Fee
   
Federated Equity Income Fund, Inc. 0.25%
   

Federated Fixed Income Securities, Inc.:

Federated Strategic Income Fund

 

0.05%

   
Federated Government Income Securities, Inc. None
   

Federated Income Securities Trust:

Federated Capital Income Fund

Federated Muni and Stock Advantage Fund

 

0.05%

None

   

Federated Investment Series Funds, Inc.:

Federated Bond Fund

 

None

   
Federated Municipal Bond Fund, Inc. None
   

Federated Municipal Securities Income Trust:

Federated Municipal High Yield Advantage Fund

Federated Ohio Municipal Income Fund

 

0.05%

0.40%

   

Money Market Obligations Trust:

Federated Government Reserves Fund

 

0.45%

 

 
 

 

Institutional/WEALTH Shares Exhibit

To

Multiple Class Plan

(REVISED 3/1/2020)

 

1.       Separate Arrangement And Expense Allocation

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Institutional and Wealth Shares will consist of

 

(i) with respect to money market funds, sales and shareholder servicing by financial intermediaries; and
   
(ii) with respect to fluctuating NAV funds, sales and shareholder servicing by financial intermediaries to the following categories of investors (“Eligible Investors”);

 

·                  An investor participating in a no-load platform, network or other fee-based program offered by a financial intermediary, for example, a wrap-account or retirement platform, where Federated has entered into an agreement with the intermediary;
·                  A trustee/director, employee or former employee of the Fund, the Adviser, the Distributor and their affiliates; an immediate family member of these individuals, or a trust, pension or profit-sharing plan for these individuals;
·                  An employer-sponsored retirement plan;
·                  A trust institution investing on behalf of its trust customers;
·                  A Federated Fund;
·                  An investor, other than a natural person, purchasing Shares directly from the Fund;
·                  An investor (including a natural person) who owned Shares as of December 31, 2008;
·                  Without regard to the initial investment minimum, an investor who acquired Institutional and/or Wealth Shares pursuant to the terms of an agreement and plan of reorganization which permits the investor to acquire such Shares; and
·                  Without regard to the initial investment minimum, in connection with an acquisition of an investment management or advisory business, or related investment services, products or assets, by Federated or its investment advisory subsidiaries, an investor (including a natural person) who (1) becomes a client of an investment advisory subsidiary of Federated or (2) is a shareholder or interest holder of a pooled investment vehicle or product that becomes advised or subadvised by a Federated investment advisory subsidiary as a result of such an acquisition other than as a result of a fund reorganization transaction pursuant to an agreement and plan of reorganization.

 

 

The principal underwriter and financial intermediaries may receive payments for distribution and/or administrative services under a Rule 12b-1 Plan and financial intermediaries may also receive shareholder service fees for services provided. In connection with this basic arrangement, Institutional and Wealth Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Institutional and Wealth Shares
Sales Load None

Contingent Deferred

Sales Charge ("CDSC")

 

None

Shareholder Service Fee As set forth in the attached Schedule
12b-1 Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Institutional and/or Wealth Shares as described in Section 3 of the Plan

 

2.       Conversion and Exchange Privileges

 

For purposes of Rule 18f-3, Institutional and Wealth Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privilege: Institutional and/or Wealth Shares may be exchanged into any Federated fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares of Federated Institutional Money Market Management, Federated Institutional Prime Obligations Fund, Federated Institutional Tax-Free Cash Trust, Federated Institutional Prime Value Obligations Fund, Class A Shares of Federated Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange.

 

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered. Exchanges to any other Class shall be treated in the same manner as a redemption and purchase.

 

3.       REDEMPTION FEE.

 

For purposes of Rule 11a-3 under the Act, any redemption fee received upon the redemption or exchange of Institutional and/or Wealth Shares will be applied to fees incurred or amount expended in connection with such redemption or exchange. The balance of any redemption fees shall be paid to the Fund.

 

A Fund shall waive any redemption fee with respect to (i) non-participant directed redemptions or exchanges involving Institutional and/or Wealth Shares held in retirement plans established under Section 401(a) or 401(k) of the Internal Revenue Code (the “Code”), custodial plan accounts established under Section 493(b)(7) of the Code, or deferred compensation plans established under Section 457 of the Code; (ii) redemptions or exchanges involving Institutional and/or Wealth Shares held in plans administered as college savings programs under Section 529 of the Code; and (iii) Institutional and/or Wealth Shares redeemed due to the death of the last surviving shareholder on the account.

 
 

Schedule of Funds
Offering institutional Shares

 

The Funds set forth on this Schedule each offer Institutional Shares on the terms set forth in the Institutional/-Wealth Shares Exhibit to the Multiple Class Plan, in each case as indicated below. The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

 

Multiple Class Company

Series

 12b-1 Fee

Shareholder

Service Fee

 Redemption Fee
       
Federated Adjustable Rate Securities Fund None None None
       
Federated Adviser Series      
Federated Emerging Markets Equity Fund 0.00% 0.25% None
Federated Hermes Absolute Return Credit Fund 0.00% 0.00% None
Federated Hermes Global Equity Fund None 0.00% None
Federated Hermes Global Small Cap Fund None 0.00% None
Federated Hermes International Equity Fund None 0.25% None
Federated Hermes SDG Engagement Equity Fund 0.00% 0.00% None
Federated Hermes SDG Engagement High Yield Credit Fund 0.00% 0.25% None
Federated Hermes Unconstrained Credit Fund None 0.00% None
Federated Hermes US SMID Fund None None None
Federated International Equity Fund 0.00% 0.25% None
Federated International Growth Fund 0.00% 0.25% None
Federated MDT Large Cap Value Fund 0.00% 0.25% None
       
Federated Equity Funds:      
Federated Clover Small Value Fund None None None
Federated Global Strategic Value Dividend Fund None None None
Federated International Strategic Value Dividend Fund None None None
Federated Kaufmann Fund None None None
Federated Kaufmann Large Cap Fund None None None
Federated Kaufmann Small Cap Fund None None None
Federated MDT Mid-Cap Growth Fund None None None
Federated Prudent Bear Fund None None None
Federated Strategic Value Dividend Fund None None None
       
Federated Equity Income Fund, Inc. None None None
       
Federated Fixed Income Securities, Inc.:      
Federated Municipal Ultrashort Fund None None None
Federated Strategic Income Fund None None None
       
Federated Global Allocation Fund) None None None
       
Federated Government Income Trust None 0.25% None
       
Federated Government Income Securities, Inc. None None None
       
Federated High Income Bond Fund None None None
       
Federated High Yield Trust      
Federated High Yield Trust None None None
Federated Equity Advantage Fund None None None
       

Multiple Class Company

Series

 12b-1 Fee

Shareholder

Service Fee

 Redemption Fee
Federated Income Securities Trust:      
Federated Capital Income Fund None None None
Federated Floating Rate Strategic Income Fund None None None
Federated Fund for U.S. Government Securities None None None
Federated Intermediate Corporate Bond Fund None 0.25% None
Federated Muni and Stock Advantage Fund None None None
Federated Real Return Bond Fund None 0.25% None
Federated Short-Term Income Fund None None None
       
Federated Index Trust:      
Federated Max-Cap Index Fund None 0.25% None
Federated Mid-Cap Index Fund None None None
       
Federated Institutional Trust:      
Federated Government Ultrashort Duration Fund None None None
Federated Short-Intermediate Total Return Bond Fund None None None
       
Federated International Series, Inc.      
Federated Global Total Return Bond Fund (formerly Federated International Bond Fund) None None None
       
Federated Investment Series Fund, Inc.      
Federated Bond Fund None None None
       
Federated MDT Series:      
Federated MDT All Cap Core Fund None None None
Federated MDT Balanced Fund None None None
Federated MDT Large Cap Growth Fund None None None
Federated MDT Small Cap Core Fund None None None
Federated MDT Small Cap Growth Fund None None None
       
Federated Municipal Bond Fund, Inc. None None None
       
Federated Municipal Securities Income Trust      
Federated Michigan Intermediate Municipal Trust None None None
Federated Municipal High Yield Advantage Fund None None None
Federated Ohio Municipal Income Fund None None None
Federated Pennsylvania Municipal Income Fund None None None
Federated Short-Intermediate Duration Municipal Trust None 0.25% None
       
Federated Total Return Government Bond Fund None None None
       
Federated Total Return Series, Inc.:      
Federated Mortgage Fund None 0.25% None
Federated Total Return Bond Fund None None None
Federated Ultrashort Bond Fund None 0.25% None
       
Federated U.S. Government Securities Fund:  1-3 Years None 0.25% None
       
Federated U.S. Government Securities Fund:  2-5 Years None 0.25% None

Multiple Class Company

Series

 12b-1 Fee

Shareholder

Service Fee

 Redemption Fee
       
Federated World Investment Series, Inc.      
Federated Emerging Market Debt Fund None None None
Federated International Leaders Fund None None None
Federated International Small-Mid Company Fund None None 2% on shares redeemed or exchanged within 90 days of purchase
       
Intermediate Municipal Trust:      
Federated Intermediate Municipal Trust None 0.25% None
       
Money Market Obligations Trust:      
Federated Government Obligations Fund None 0.25% None
Federated Government Obligations Tax-Managed Fund None 0.25% None
Federated Money Market Management None 0.25% None
Federated Institutional Prime Obligations Fund None 0.25% None
Federated Institutional Tax-Free Cash Trust None 0.25% None
Federated Treasury Obligations Fund None 0.25% None
Federated Trust for U.S. Treasury Obligations None None None
Federated U.S. Treasury Cash Reserves None 0.25% None

 

Schedule of Funds
Offering WEALTH Shares

 

The Retail Money Market Funds set forth on this Schedule each offer Wealth Shares on the terms set forth in the Institutional/Wealth Shares Exhibit to the Multiple Class Plan, in each case as indicated below. The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

 

Multiple Class Company

Series

 12b-1 Fee

Shareholder

Service Fee

 Redemption Fee
       
Money Market Obligations Trust:      
Federated California Municipal Cash Trust None 0.25% None
Federated Massachusetts Municipal Cash Trust None 0.25% None
Federated Municipal Obligations Fund None 0.25% None
Federated New York Municipal Cash Trust None 0.25% None
Federated Pennsylvania Municipal Cash Trust None 0.25% None
Federated Prime Cash Obligations Fund None 0.25% None
Federated Tax-Free Obligations Fund None 0.25% None

 

 

 
 

investment Shares Exhibit

To

Multiple Class Plan
(Revised 12/1/18)

 

1.       Separate Arrangement And Expense Allocation

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Investment Shares will consist of sales and shareholder servicing by financial intermediaries. Financial intermediaries may receive shareholder service fees for services provided. In connection with this basic arrangement, Investment Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Investment Shares
Sales Load None
Contingent Deferred Sales Charge (“CDSC”) None
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Investment Shares as described in Section 3 of the Plan

 

2.       Conversion and Exchange Privileges

 

For purposes of Rule 18f-3, Investment Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Rights: Investment Shares may be exchanged into any Federated fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares of Federated Institutional Money Market Management, Federated Institutional Prime Obligations Fund, Federated Institutional Tax-Free Cash Trust, Federated Institutional Prime Value Obligations Fund, Class A Shares of Federated Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange.

 

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered. Exchanges to any other Class shall be treated in the same manner as a redemption and purchase.

 

Schedule of Funds

Offering Investment Shares

 

The Funds set forth on this Schedule each offer Investment Shares on the terms set forth in the Investment Shares Exhibit to the Multiple Class Plan.

 

 

 

Multiple Class Company

Series

 12b-1 Fee
   
Money Market Obligations Trust:  
Federated Municipal Obligations Fund 0.25%

 

 
 

 

 

CLASS P Shares Exhibit

To

Multiple Class Plan

(revised 11/1/19

 

1.       Separate Arrangement And Expense Allocation

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Class P Shares will consist of sales and shareholder servicing by financial intermediaries. Financial intermediaries may receive shareholder service fees for services provided. In connection with this basic arrangement, Automated Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Class P Shares
Sales Load None

Contingent Deferred

Sales Charge ("CDSC")

 

None

Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
Recordkeeping Fee Up to 10 basis points (0.10%) of the average daily net asset value
12b-1 Fee None
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Class P Shares as described in Section 3 of the Plan

 

2.       Conversion and Exchange Privileges

 

For purposes of Rule 18f-3, Class P Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: None.
Exchange Privileges: Class P Shares may only be exchanged into Federated Capital Reserves Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange.

 

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered, after the payment of any redemption fees to the Fund. Exchanges shall be treated in the same manner as a redemption and purchase.

 

Schedule of Funds
Offering Class P Shares

 

The Funds set forth on this Schedule each offer Class P Shares on the terms set forth in the Class P Shares Exhibit to the Multiple Class Plan.

 

Multiple Class Company

Series

 
Money Market Obligations Trust
  Federated Government Reserves Fund

 

 
 

 

PREMIER Shares Exhibit

To

Multiple Class Plan

(Revised as of 12/1/18)

 

1.       Separate Arrangement And Expense Allocation

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Premier Shares will consist of sales and shareholder servicing by financial intermediaries. The principal underwriter and financial intermediaries may receive payments for distribution and/or administrative services under a Rule 12b-1 Plan and financial intermediaries may also receive shareholder service fees for services provided. In connection with this basic arrangement, Premier Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Premier Shares
Sales Load None

Contingent Deferred

Sales Charge ("CDSC")

 None
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Premier Shares as described in Section 3 of the Plan

 

2.       Conversion and Exchange Privileges

 

For purposes of Rule 18f-3, Premier Shares have the following conversion rights and exchange privileges at the election of the shareholder:

Conversion Rights: At the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privilege: Premier Shares may be exchanged into any Federated fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares of Federated Institutional Money Market Management, Federated Institutional Prime Obligations Fund, Federated Institutional Tax-Free Cash Trust, Federated Institutional Prime Value Obligations Fund, Class A Shares of Federated Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange.

An exchange will be treated as a redemption and a subsequent purchase, and will be a taxable transaction. Exchange privileges may be modified or terminated at any time.

Schedule of Funds

Offering PREMIER Shares

 

The Funds set forth on this Schedule each offer Premier Shares on the terms set forth in the Premier Shares Exhibit to the Multiple Class Plan, in each case as indicated below. The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

 

Multiple Class Company

Series

 12b-1 Fee
   

Money Market Obligations Trust:

Federated Government Obligations Fund

 

None

Federated Institutional Tax-Free Cash Trust None

 

 
 

 

Primary Shares Exhibit

To

Multiple Class Plan

(REVISED 3/1/2020)

 

1.       Separate Arrangement And Expense Allocation

 

Primary Shares are available exclusively as an investment vehicle for separate accounts of participating life insurance companies offering variable life insurance policies and variable annuity contracts. For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Primary Shares will consist of institutional sales to insurance companies for Primary Share inclusion in those variable life and variable annuity product separate accounts. The insurance company distributor, underwriter or affiliated entity may provide shareholder services and receive a shareholder service fee for their services. In connection with this basic arrangement, Primary Shares will bear the following fees and expenses:

Fees and Expenses Maximum Amount Allocated Primary Shares
Sales Load None
Contingent Deferred Sales Charge ("CDSC") None
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Primary Shares as described in Section 3 of the Plan

 

2.       Conversion and Exchange Privileges

 

For purposes of Rule 18f-3, Primary Shares have the following conversion rights and exchange privileges at the election of the shareholder:

Conversion Rights: At the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privileges: None.

 

 
 

 

Schedule of Funds

Offering Primary Shares

 

The Funds set forth on this Schedule each offer Primary Shares on the terms set forth in the Primary Shares Exhibit to the Multiple Class Plan.

 

Multiple Class Company

Series

 12b-1 Fee
   
Federated Insurance Series:  
Federated Hermes Managed Volatility Fund II 0.25%
Federated Hermes High Income Bond Fund II None
Federated Hermes Kaufmann Fund II 0.25%
Federated Hermes Government Money Fund II 0.25%
Federated Hermes Quality Bond Fund II 0.25%

 

 
 

 

retirement Shares Exhibit

To

Multiple Class Plan

(Revised 12/1/18)

 

1.       Separate Arrangement And Expense Allocation

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement for the Retirement Shares will consist of sales and shareholder servicing by financial intermediaries. Financial intermediaries may receive a shareholder service fee for services provided. In connection with this basic arrangement, Retirement Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Retirement Shares
Sales Load None
Contingent Deferred Sales Charge ("CDSC") None
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee None
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Retirement Shares as described in Section 3 of the Plan

 

2.       Conversion and Exchange Privileges

 

For purposes of Rule 18f-3, Retirement Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privilege: Retirement Shares may be exchanged into any Federated fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares Federated Institutional Money Market Management, Federated Institutional Prime Obligations Fund, Federated Institutional Tax-Free Cash Trust, Federated Institutional Prime Value Obligations Fund, Class A Shares of Federated Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange..

 

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered. Exchanges to any other Class shall be treated in the same manner as a redemption and purchase.

 

 

Schedule of Funds

Offering retirement Shares

 

The Funds set forth on this Schedule each offer Retirement Shares on the terms set forth in the Retirement Shares Exhibit to the Multiple Class Plan:

 

Multiple Class Company Series
   
None  

 

 
 

 

Service Shares Exhibit

To

Multiple Class Plan
(revised 3/1/2020)

 

1.       Separate Arrangement And Expense Allocation

 

With respect to Funds other than portfolios of Federated Insurance Series, for purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Service Shares will consist of

 

(i) with respect to money market funds, sales and shareholder servicing by financial intermediaries; and
   
(ii) with respect to fluctuating NAV funds, sales and shareholder servicing by financial intermediaries to the following categories of investors (“Eligible Investors”);

 

·                  An investor participating in a wrap program or other fee-based program sponsored by a financial intermediary;
·                  An investor participating in a no-load network or platform sponsored by a financial intermediary where Federated has entered into an agreement with the intermediary;
·                  A trustee/director, employee or former employee of the Fund, the Adviser, the Distributor and their affiliates; an immediate family member of these individuals, or a trust, pension or profit-sharing plan for these individuals;
·                  An employer-sponsored retirement plan;
·                  A trust institution investing on behalf of its trust customers;
·                  A Federated Fund;
·                  An investor, other than a natural person, purchasing Shares directly from the Fund;
·                  An investor (including a natural person) who owned Shares as of December 31, 2008;
·                  Without regard to the initial investment minimum, an investor who acquired Service Shares pursuant to the terms of an agreement and plan of reorganization which permits the investor to acquire such Shares; and
·                                             Without regard to the initial investment minimum, in connection with an acquisition of an investment management or advisory business, or related investment services, products or assets, by Federated or its investment advisory subsidiaries, an investor (including a natural person) who (1) becomes a client of an investment advisory subsidiary of Federated or (2) is a shareholder or interest holder of a pooled investment vehicle or product that becomes advised or subadvised by a Federated investment advisory subsidiary as a result of such an acquisition other than as a result of a fund reorganization transaction pursuant to an agreement and plan of reorganization.

 

The principal underwriter and financial intermediaries may receive payments for distribution and/or administrative services under a Rule 12b-1 Plan and financial intermediaries may also receive shareholder service fees for services provided.

 

With respect to portfolios of Federated Insurance Series, Service Shares are available exclusively as an investment vehicle for separate accounts of participating life insurance companies offering variable life insurance policies and variable annuity contracts. For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of Service Shares will consist of institutional sales to insurance companies for Service Share inclusion in those variable life insurance and annuity product separate accounts. The insurance company distributor, underwriter or other affiliated entity may provide shareholder services and receive a shareholder service fee for their services and when indicated on the Schedule to this Exhibit, may also receive payments for distribution and/or administrative services under a 12b-1 Plan.

In connection with these basic arrangements, Service Shares will bear the following fees and expenses:

Fees and Expenses Maximum Amount Allocated Service Shares
Sales Load None
Contingent Deferred Sales Charge ("CDSC") None
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Service Shares as described in Section 3 of the Plan

 

 

2.       Conversion and Exchange Privileges

For purposes of Rule 18f-3, Service Shares have the following conversion rights and exchange privileges at the election of the shareholder:

Conversion Rights: At the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privileges:

For Funds other than portfolios of Federated Insurance Series, Service Shares may be exchanged for exchanged into any Federated fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares of Federated Institutional Money Market Management, Federated Institutional Prime Obligations Fund, Federated Institutional Tax-Free Cash Trust, Federated Institutional Prime Value Obligations Fund, Class A Shares of Federated Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange. Service Shares may also be exchanged for shares of Investment Companies that are not subject to this Plan, as provided in the "Proprietary Fund Schedule" attached hereto.

With respect to portfolios of Federated Insurance Series: None

 

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered, unless Class A Shares or Class F Shares which are subject to a CDSC are being exchanged, in which case the CDSC fee will be imposed as if the Class A Shares or Class F Shares had been redeemed. Exchanges to any other Class shall be treated in the same manner as a redemption and purchase.

 
 

Schedule of Funds
Offering Service Shares

 

The Funds set forth on this Schedule each offer Service Shares on the terms set forth in the Service Shares Exhibit to the Multiple Class Plan, in each case as indicated below. The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

Multiple Class Company
Series		 12b-1 Fee
   
Federated Adjustable Rate Securities Fund None
   
Federated Adviser Series  
Federated MDT Large Cap Value Fund None
   
   
Federated High Yield Trust None
   
Federated Government Income Trust 0.05%
   
Federated Income Securities Trust:  
Federated Intermediate Corporate Bond Fund 0.25%
Federated Short-Term Income Fund None
   
Federated Index Trust  
Federated Max-Cap Index Fund 0.30%
Federated Mid-Cap Index Fund None
   
Federated Institutional Trust:  
Federated Government Ultrashort Duration Fund 0.05%
Federated Short-Intermediate Total Return Bond Fund 0.05%
   
Federated Insurance Series:  
Federated Hermes Managed Volatility Fund II 0.25%
Federated Hermes High Income Bond Fund II 0.25%
Federated Hermes Kaufmann Fund II 0.25%
Federated Hermes Quality Bond Fund II 0.25%
Federated Hermes Government Money Fund II None
   
Federated Short-Intermediate Duration Municipal Trust 0.25%
   
Federated Total Return Government Bond Fund 0.25%
   
Federated Total Return Series, Inc.:  
Federated Mortgage Fund 0.25%
Federated Total Return Bond Fund 0.25%
Federated Ultrashort Bond Fund 0.25%
   
Intermediate Municipal Trust  
Federated Intermediate Municipal Trust None
   
Multiple Class Company
Series		 12b-1 Fee
   
Federated U.S. Government Securities Fund:  1-3 Years 0.25%
   
Federated U.S. Government Securities Fund:  2-5 Years 0.05%
   
Money Market Obligations Trust:  
Federated California Municipal Cash Trust None
Federated Government Obligations Fund None
Federated Government Obligations Tax-Managed Fund None
Federated Massachusetts Municipal Cash Trust None
Federated Institutional Money Market Management None
Federated Institutional Prime Obligations Fund None
 Federated Institutional Prime Value Obligations Fund None
Federated Municipal Obligations Fund None
Federated New York Municipal Cash Trust 0.25%
Federated Pennsylvania Municipal Cash Trust None
Federated Prime Cash Obligations Fund None
Federated Tax-Free Obligations Fund None
Federated Treasury Obligations Fund None
Federated U.S. Treasury Cash Reserves 0.25%
Federated Virginia Municipal Cash Trust None

 

 

 
 

PROPRIETARY FUND SCHEDULE -
SERVICE SHARES

 

Shares issued by investment companies that are not party to this Plan but that are listed on this Proprietary Fund Schedule ("Non-Plan Investment Companies") may be exchanged for Service Shares of the Funds indicated opposite their names. Such Service Shares may also be exchanged back into shares of the original Non-Plan Investment Company. In addition, indicated Service Shares purchased from a dealer party to a Dealer Agreement to sell the indicated Non-Plan Investment Company Shares may be exchanged for Shares of such Non-Plan Investment Company. In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered. Exchanges into any class of shares of a Non-Plan Investment Company not shown on this schedule shall be treated in the same manner as a redemption and purchase.

Multiple Class Series/Company Non-Plan Investment Companies
   

 

 
 

 

Class T Shares Exhibit

To

Multiple Class Plan

(Revised (12/15/17)

 

1.       SEPARATE ARRANGEMENT AND EXPENSE ALLOCATION

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Class T Shares will consist of sales and shareholder servicing by financial intermediaries in consideration of the payment of the applicable sales load (“dealer reallowance”) and a shareholder service fee. In connection with this basic arrangement, Class T Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Class T Shares
Sales Load Up to 2.50% of the public offering price
Contingent Deferred Sales Charge ("CDSC") None
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee None
Redemption Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Class T Shares as described in Section 3 of the Plan

 

2.       CONVERSION AND EXCHANGE PRIVILEGES

 

For purposes of Rule 18f-3, Class T Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable, and that no CDSC on the original shares purchased is owed.
Exchange Privilege: None  

3.       EXCEPTIONS TO BASIC ARRANGEMENTS

 

For purposes of Rules 22d-1 and 6c-10 under the Act, unless otherwise specified on the Schedule to this Exhibit, the scheduled variations in sales loads and contingent deferred sales charges are as follows:

 

(A)       BASIC SALES LOAD SCHEDULE

 

The basic schedule of sales loads for Class T Shares of Funds so designated on the Schedule to this Exhibit is as follows:

 

Transaction Amount

Sales Load as a Percentage of

Public Offering Price

Less than $250,000 2.50%
$250,000 but less than $500,000 2.00%
$500,000 but less than $1 million 1.50%
$1 million or greater 1.00%

 

4.       REDEMPTION FEE

 

For purposes of Rule 11a-3 under the Act, any redemption fee received upon the redemption or exchange of Class T Shares will be applied to fees incurred or amount expended in connection with such redemption or exchange. The balance of any redemption fees shall be paid to the Fund.

 

A Fund shall waive any redemption fee with respect to (i) non-participant directed redemptions or exchanges involving Class T Shares held in retirement plans established under Section 401(a) or 401(k) of the Internal Revenue Code (the “Code”), custodial plan accounts established under Section 493(b)(7) of the Code, or deferred compensation plans established under Section 457 of the Code; (ii) redemptions or exchanges involving Class T Shares held in plans administered as college savings programs under Section 529 of the Code; and (iii) Class T Shares redeemed due to the death of the last surviving shareholder on the account.

 

Schedule of Funds
Offering Class T Shares

 

The Funds set forth on this Schedule each offer Class T Shares on the terms set forth in the Class T Shares Exhibit to the Multiple Class Plan, in each case as indicated below. Actual amounts accrued may be less.

 

1.       CLASS A SHARES SUBJECT TO THE BASIC LOAD SCHEDULE

 

Multiple Class Company

Series

Redemption

Fee

   
Federated Adviser Series  
Federated MDT Large Cap Value Fund None
   
   
Federated Equity Funds  
Federated Clover Small Value Fund None
Federated International Strategic Value Dividend Fund None
Federated Kaufmann Fund None
Federated Kaufmann Large Cap Fund None
Federated Kaufmann Small Cap Fund None
Federated MDT Mid-Cap Growth Fund None
Federated Prudent Bear Fund None
Federated Strategic Value Dividend Fund None
   
Federated Equity Income Fund, Inc. None
   
Federated Fixed Income Securities, Inc.  
Federated Strategic Income Fund None
   
Federated Global Allocation Fund None
   
Federated Government Income Securities, Inc. None
   
Federated High Income Bond Fund, Inc. None
   
Federated High Yield Trust  
Federated High Yield Trust 2.00% on shares redeemed within 90 days of purchase
   
Federated Income Securities Trust  
Federated Capital Income Fund None
Federated Fund for U.S. Government Securities None
Federated Muni and Stock Advantage Fund None
   
Federated Investment Series Funds, Inc.  
Federated Bond Fund None
   
Federated MDT Series  
Federated MDT All Cap Core Fund None
Federated MDT Balanced Fund None
Federated MDT Large Cap Growth Fund None
Federated MDT Small Cap Core Fund None
Federated MDT Small Cap Growth Fund None
   
   
Federated Municipal Securities Income Trust  
Federated Municipal High Yield Advantage Fund None
Federated Pennsylvania Municipal Income Fund None
   
Federated Municipal Bond Fund, Inc. None
   
Federated Total Return Series, Inc.  
Federated Total Return Bond Fund None
   
Federated World Investment Series, Inc.  
Federated International Leaders Fund None
Federated International Small-Mid Company Fund 2.00% on shares redeemed within 30 days of purchase

 

 

 

 
 

 

trust Shares Exhibit

To

Multiple Class Plan

(Revised 8/1/19)

 

1.       Separate Arrangement And Expense Allocation

 

For purposes of Rule 18f-3 under the Act, the basic distribution arrangement for the Trust Shares will consist of sales by financial intermediaries, who, along with the principal underwriter, may receive payments for distribution and/or administrative services under a 12b-1 Plan. In connection with this basic arrangement, Trust Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Trust Shares
Sales Load None
Contingent Deferred Sales Charge ("CDSC") None
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Trust  Shares as described in Section 3 of the Multiple Class Plan

 

2.       Conversion and Exchange Privileges

 

For purposes of Rule 18f-3, Trust Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privilege: Trust Shares may be exchanged into any Federated fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares of Federated Institutional Money Market Management, Federated Institutional Tax-Free Cash Trust, Federated Institutional Prime Value Obligations Fund, Class A Shares of Federated Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange.

 

 

Schedule of FundS

Offering Trust Shares

 

The Funds set forth on this Schedule each offer Trust Shares on the terms set forth in the Trust Shares Exhibit to the Multiple Class Plan, in each case as indicated below. The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

 

Multiple Class Company

Series

 12b-1 Fee
   
Money Market Obligations Trust:  
Federated Government Obligations Fund 0.25%
Federated Prime Cash Obligations Fund 0.25%
Federated Treasury Obligations Fund 0.25%

 

 
 

 

 

Class Y Shares Exhibit

To

Multiple Class Plan

(rEVISED 12/1/18)

 

1.       Separate Arrangement And Expense Allocation

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement for the Class Y Shares will consist of sales to institutional purchasers requiring less distribution support activity and less shareholder services, who are also seeking low expense ratios. In connection with this basic arrangement, Class Y Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Class Y Shares
Sales Load None
Contingent Deferred Sales Charge ("CDSC") None
Shareholder Service Fee None
12b-1 Fee None
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Class Y Shares as described in Section 3 of the Plan

 

2.       Conversion and Exchange Privileges

 

For purposes of Rule 18f-3, Class Y Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privilege:

Class Y Shares may be exchanged into any Federated fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares of Federated Institutional Money Market Management, Federated Institutional Prime Obligations Fund, Federated Institutional Tax-Free Cash Trust, Federated Institutional Prime Value Obligations Fund, Class A Shares of Federated Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange.

 

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered. Exchanges to any other Class shall be treated in the same manner as a redemption and purchase.



Schedule of Funds

Offering class Y Shares

 

The Funds set forth on this Schedule each offer Class Y Shares on the terms set forth in the Class Y Shares Exhibit to the Multiple Class Plan, in each case as indicated below:

 

Multiple Class Company Series
   
Federated U.S. Government Securities Fund: 1-3 Years  
   

 

 
 

 

Class R Shares Exhibit

To

Multiple Class Plan

(revised 07/31/2019)

 

 

1.       Separate Arrangement And Expense Allocation

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement for the Class R Shares will consist of:

 

(i)       Excepting Federated Kaufmann Fund, sales by financial intermediaries to retirement plans, with shareholder services provided by the retirement plan record keepers; and

 

(ii)  with respect to the Federated Kaufmann Fund, (a) sales by financial intermediaries to retirement plans; (b) the issuance of Class R Shares as provided in the Plan of Reorganization between the Federated-Kaufmann Fund and the Kaufmann Fund; (c) additional investments by former Kaufmann Fund shareholders and related persons; and (d) shareholder services provided by financial intermediaries..

 

Financial intermediaries and the principal underwriter may receive payments for distribution and/or administrative services under a Rule 12b-1 Plan, in addition, financial intermediaries may receive shareholder service fees for services provided. In connection with this basic arrangement, Class R Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Class R Shares
Sales Load None

Contingent Deferred Sales

Charge ("CDSC")

 None
Redemption Fee As set forth in the attached Schedule.
Shareholder Service Fee As set forth in the attached Schedule
12b-1 Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Class R Shares as described in Section 3 of the Multiple Class Plan

 

2.       Conversion and Exchange Privileges

 

For purposes of Rule 18f-3, Class R Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privilege:

With respect to the Kaufmann Fund, shareholders who are former shareholders of the Kaufmann Fund, Inc. and their immediate family members or shareholders who have purchased shares through the financial intermediary relationships that existed for the Kaufmann Fund may exchange their Class R Shares for Class A Shares of any other fund. Investors who are eligible to purchase Class R Shares (e.g. 401(k) plans, 457 plans, employer sponsored 403(b) plans, profit sharing and money purchase pension plans, defined benefit plans, non-qualified deferred compensation plans and IRA rollovers from such plans, directly or through financial intermediaries as well as IRAs and investment – only 403(b) plans held through financial intermediaries may exchange their Class R Shares into Class R Shares of any other Fund. A Grandfathered Shareholder may exchange into Class R Shares of another Fund only if such shareholder is an eligible investor in the Class R Shares of that Fund.

With respect to the other funds, Class R Shares may be exchanged for Class R Shares, including the Kaufmann Fund.

 

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered, after the payment of any redemption fees to the Fund. Exchanges to any other Class shall be treated in the same manner as a redemption and purchase.

 

3.       Redemption Fee

 

For purposes of Rule 11a-3 under the Act, any redemption fee received upon the redemption or exchange of Class R Shares will be applied to fees incurred or amounts expended in connection with such redemption or exchange. The balance of any redemption fees shall be paid to the Fund.

A Fund shall waive any redemption fee with respect to Class R Shares redeemed or exchange by employer-sponsored retirement plans.

 

 

 
 

 

Schedule of Funds

Offering Class R Shares

 

The Funds set forth on this Schedule each offer Class R Shares on the terms set forth in the Class R Shares Exhibit to the Multiple Class Plan, in each case as indicated below. The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

 

Multiple Class Company
Series		 12b-1 Fee Shareholder Services Fee Redemption Fee
       
Federated Adviser Series      
Federated MDT Large Cap Value Fund 0.50% None None
       
Federated Equity Funds:      
Federated Kaufmann Fund 0.50% 0.25% 0.20%
Federated Kaufmann Small Cap Fund 0.50% None None
       
Federated Equity Income Fund, Inc. 0.50% None None
       
Federated Income Securities Trust      
Federated Capital Income Fund 0.50% None None
       
Federated Index Trust:      
Federated Max-Cap Index Fund 0.50% None None
       
Federated U.S. Government Securities Fund: 2-5 Years 0.50% None None
       
Money Market Obligations Trust:      
Federated Prime Cash Obligations Fund 0.50% 0.25% None
       
Federated World Investment Series, Inc.      
Federated International Leaders Fund 0.50% None None
       

 

 
 

 

CLASS R6 Shares Exhibit

To

Multiple Class Plan

(revised as of 03/01/2020)

 

1.       Separate Arrangement And Expense Allocation

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Class R6 Shares will consist of:

 

(i) sales and shareholder servicing by financial intermediaries to the following categories of investors (“Eligible Investors”):

 

·                  An investor participating in a no-load platform, network or other fee-based program offered by a financial intermediary, for example, a wrap account or retirement platform, where Federated has entered into an agreement with the intermediary;
·                  A trustee/director, employee or former employee of the Fund, the Adviser, the Distributor and their affiliates; an immediate family member of these individuals, or a trust, pension or profit-sharing plan for these individuals;
·                  An employer-sponsored retirement plan;
·                  A trust institution investing on behalf of its trust customers;
·                  An investor, other than a natural person, purchasing Shares directly from the Fund;
·                  A Federated Fund;
·                  An investor (including a natural person) who acquired R6 Shares pursuant to the terms of an agreement and plan of reorganization which permits the investor to acquire such Shares; and
·                  In connection with an acquisition of an investment management or advisory business, or related investment services, products or assets, by Federated or its investment advisory subsidiaries, an investor (including a natural person) who (1) becomes a client of an investment advisory subsidiary of Federated or (2) is a shareholder or interest holder of a pooled investment vehicle or product that becomes advised or subadvised by a Federated investment advisory subsidiary as a result of such an acquisition other than as a result of a fund reorganization transaction pursuant to an agreement and plan of reorganization.

 

In connection with this arrangement, Class R6 Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated R6 Shares
Sales Load None
Contingent Deferred Sales Charge ("CDSC") None
Shareholder Service Fee None
Redemption Fee None
12b-1 Fee None
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Class R6 Shares.

 

2.       Conversion and Exchange Privileges

 

For purposes of Rule 18f-3, Class R6 Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privileges: Class R6 Shares may be exchanged into any Federated fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares of Federated Institutional Money Market Management, Federated Institutional Prime Obligations Fund, Federated Institutional Tax-Free Cash Trust, Federated Institutional Prime Value Obligations Fund, Class A Shares of Federated Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange.

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered, after the payment of any redemption fees to the Fund. Exchanges to any other Class shall be treated in the same manner as a redemption and purchase.

 

 
 

 

Schedule of Funds

Offering CLASS R6 Shares

 

The Funds set forth on this Schedule each offer Class R6 Shares on the terms set forth in the Class R6 Shares Exhibit to the Multiple Class Plan.

 

 

Multiple Class Company

Series

   
  Federated Adviser Series
Federated Emerging Markets Equity Fund
Federated Hermes Absolute Return Credit Fund
Federated Hermes Global Equity Fund
Federated Hermes Global Small Cap Fund
Federated Hermes International Equity Fund
Federated Hermes SDG Engagement Equity Fund
Federated Hermes SDG Engagement High Yield Credit Fund
Federate Hermes Unconstrained Credit Fund
Federated Hermes US SMID Fund
Federated International Equity Fund
Federated International Growth Fund
Federated MDT Large Cap Value Fund
 
  Federated Equity Funds
    Federated Clover Small Value Fund
    Federated Global Strategic Value Dividend Fund
    Federated International Strategic Value Dividend Fund
    Federated Kaufmann Large Cap Fund
     Federated Kaufmann Small Cap Fund
    Federated MDT Mid Cap Growth Fund
    Federated Strategic Value Dividend Fund
   
  Federated Fixed Income Securities, Inc.
    Federated Municipal Ultrashort Fund
    Federated Strategic Income Fund
   
  Federated Global Allocation Fund
   
  Federated High Income Bond Fund
   
  Federated High Yield Trust
  Federated High Yield Trust
   
  Federated Income Securities Trust
  Federated Floating Rate Strategic Income Fund
  Federated Short-Term Income Fund
   
  Federated Index Trust
  Federated Mid-Cap Index Fund
   
  Federated Institutional Trust
  Federated Government Ultrashort Duration Fund
  Federated Institutional High Yield Bond Fund
  Federated Short-Intermediate Total Return Bond Fund
   
  Federated Investment Series Funds,  Inc.
  Federated Bond Fund
   
  Federated MDT Series
  Federated MDT Small Cap Core Fund
  Federated MDT Small Cap Growth Fund
  Federated MDT All Cap Core Fund
  Federated MDT Balanced Fund
   
  Federated Total Return Government Bond Fund
   
  Federated Total Return Series, Inc.
    Federated Total Return Bond Fund
    Federated Ultrashort Bond Fund
   
  Federated World Investment Series, Inc.
    Federated International Leaders Fund
   

 

 
 

 

 

SELECT Shares Exhibit

To

Multiple Class Plan

(Revised 07/31/2019)

 

1.       SEPARATE ARRANGEMENT AND EXPENSE ALLOCATION

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Select Shares will consist of sales and shareholder servicing by financial intermediaries. Financial intermediaries may receive shareholder service fees for services provided. In connection with this basic arrangement, Select Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Select Shares
Sales Load None
Contingent Deferred Sales Charge ("CDSC") None
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee None
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Select Shares as described in Section 3 of the Plan

 

2.       CONVERSION AND EXCHANGE PRIVILEGES

 

For purposes of Rule 18f-3, Select Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privilege: Select Shares may be exchanged into any Federated fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares of Federated Institutional Money Market Management, Federated Institutional Prime Obligations Fund, Federated Institutional Tax-Free Cash Trust, Federated Institutional Prime Value Obligations Fund, Class A Shares of Federated Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchase (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange.

 

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered. Exchanges to any other fund or class shall be treated in the same manner as a redemption and purchase.

 

 

SCHEDULE OF FUNDS

OFFERING SELECT SHARES

 

Multiple Class Company

Series

 
Money Market Obligations Trust
     Federated Government Obligations Fund

 

 

 

 EX-99.POA 24 ex28o7poa.htm

 

 

Exhibit 28 (0) (7) under Form N-1A

Exhibit (24) under Item 601/Reg. S-K

 

 

 

 

 

 

 

 

 

 

 

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints the Secretary and Assistant Secretaries of FEDERATED MUNICIPAL SECURITIES FUND, INC. and each of them, their true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution for them and in their names, place and stead, in any and all capacities, to sign any and all documents to be filed with the Securities and Exchange Commission pursuant to the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940, by means of the Securities and Exchange Commission's electronic disclosure system known as EDGAR; and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to sign and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as each of them might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

 

 

 

 

 

SIGNATURES TITLE  DATE
     
/s/ Thomas O’Neill    
Thomas O'Neill Director October 1, 2006

 

 EX-99.COE 25 ex28pcoe.htm EXHIBIT 99 UNDER ITEM 601/REG. S-K

Exhibit 28 (p) under Form N-1A

Exhibit 99 under item 601/REG. S-K

 

Federated Hermes, Inc.

Code of Ethics for Access Persons

 

Effective 01/31/2020

 

 

 
 

Table of Contents

Page

INTRODUCTION1
1RESPONSIBILITIES 2
1.1GeneralPrinciples 2
1.2Compliance with this Code is a condition of employment 3
1.3Personal Responsibility 3
1.4Perceived ambiguity shall not excuse violations 4
1.5Preclearance does not protect wrongdoing 4
2REPORTING REQUIREMENTS 4
2.1Initial Reporting Requirements 4
2.2Quarterly Reporting Requirements 5
2.3Annual Reporting Requirements 6
2.4Independent Directors 6
2.5Non-Federated Hermes Officers of Federated Hermes Funds or Proprietary Client Funds 7
2.6Access Persons Acknowledgments of Receipt of Code of Ethics and
Amendments8
3PRECLEARANCE REQUIREMENTS 8
3.1Preclearance of Trades 8
3.2Duration and Revocation 9
3.3Preclearance Does Not Protect Wrongdoing 9
3.4Exceptions 9
3.5Exception for Employee Stock Options of a Previous Employer 10
3.6Federated Hermes Stock and Options Trading 11
3.7Special Rules for Equity Transactions Based on Market Capitalization 11
4EXEMPT TRANSACTIONS 11
4.1Exempt Securities 11
4.2Discretionary Accounts 12
5PROHIBITIONS AND RESTRICTIONS 12
5.1General Prohibitions 12
5.2Equity Initial Public Offerings (IPOs) are Prohibited 14
5.3Private Placements Require Prior Compliance Approval 14
5.4Prohibition of Short-Term Profits – 60-Day Rule – Individual Securities 15
5.5Minimum Holding Period – Designated Federated Hermes Funds 15
5.6Prohibition on Insider Trading 16
5.7Disclosure or Misuse of Fund Information 16
5.8Blackout Periods - Fund Trades 16
5.9Prior Knowledge 17
5.10Serving as a Director or Officer of Outside Organizations 17
5.11Excessive Trading and Market Timing 19
5.12Independent Directors 20
5.13Restrictions on Investment Clubs 20
5.14Disclosure of Personal Interests 20
6PROHIBITIONS ON GIVING/RECEIVING GIFTS; POLITICAL AND CHARITABLE CONTRIBUTIONS 21
7REVIEW, REPORTING, EDUCATION AND SANCTIONS 22
7.1Management Review of Investment Personnel’ s Trading Activity 22
7.2Compliance Review of Reports and Trading Activity, and this
Code of Ethics 23
7.3Self-discovery and Reporting 23
7.4Education 24
7.5Sanctions 24
7.6Factors For Consideration 24
7.7Reporting of Violations 25
8DEFINITIONS 25
8.11933 Act 25
8.21934 Act 25
8.31940 Act 25
8.4Access Person 25
8.5Adviser 26
8.6Advisers Act 26
8.7Associated Procedures 26
8.8Automatic Investment Plan 26
8.9Beneficial Ownership 26
8.10Board 26
8.11Code 27

8.12 Compliance Committee 27

8.13Compliance Department 27
8.14Control 27
8.15Covered Security 27
8.16Federal Securities Laws 27
8.17Federated Hermes 28
8.18Fund 28
8.19Independent Director 28
8.20Influence 28
8.21Initial Public Offering 28
8.22Investment Person; Investment Personnel 28
8.23Private Placement 29
8.24Purchase or Sale……………………………………………………………………….. .29
8.25Reportable Fund 29
8.26SEC 29
8.27Security 29
8.28Supervised Person 29
8.29Underwriter 29
8.30Vendor 30

 

ADDENDUM

Access Persons Procedures A-1

Compliance Department Procedures B-1

 

 
 

CODE OF ETHICS FOR ACCESS PERSONS

Introduction

This Code sets forth standards of conduct and professionalism that apply to all persons designated as Access Persons by the Compliance Department. This Code was designed and established, and will be maintained and enforced, to protect Federated Hermes’ clients (or Funds) by deterring misconduct and to guard against violations of the Federal Securities Laws. This Code reinforces the value that Federated Hermes places on ethical conduct. Each Access Person must comply with this Code and uphold Federated Hermes’ ethical standards at all times. Each Access Person also is responsible for ensuring that spouses, children and others residing in the same household do not violate applicable provisions of this Code.

It is Federated Hermes' policy that business must be conducted in accordance with the highest fiduciary, legal and ethical standards. Federated Hermes' reputation for integrity is its most important asset and each Access Person must contribute to the care and preservation of that asset. This reputation for integrity is the cornerstone of the public's faith and trust in Federated Hermes; it is what provides Federated Hermes an opportunity to serve investors, shareholders and other stakeholders. A single Access Person's misconduct can damage Federated Hermes' hard-earned reputation.

This Code sets forth the fiduciary, legal and ethical requirements and certain “best practices” that must be satisfied to comply with this Code. This Code also establishes procedures that Access Persons must follow in order to comply with this Code.

Key terms are defined in Section 8 of this Code.

Access Persons. Access Persons are defined under Section 8.4 of this Code and include:

(a)Designated employees of Federated Hermes, including those who work for any subsidiary that is an Adviser, an Underwriter for funds and employees of certain other subsidiaries;
(b)Independent Directors of a fund;
(c)Designated officers of Federated Hermes funds or proprietary funds who are not employed by Federated Hermes. (e.g., designated outside counsel who serve as secretary to one or more funds); and
(d)All Investment Personnel;
(e)Any other individual designated by the Compliance Department. This may include a Federated Hermes employee or a temporary hire, vendor, consultant, service provider or other third party employee.

Application to Access Persons. This Code applies only to those individuals specified above, designated as Access Persons under this Code. Please note that certain requirements of this Code apply to Access Persons, while others may only apply to Investment Persons.

Application to Household Members. As noted above, each Access Person also is responsible for assuring that spouses, children or any others residing in the same household do not violate the provisions of this Code that are applicable to the Access Person (even if certain provisions of this Code do not specifically reference household members). See the definitions of "Access Person" and "Investment Personnel" in Section 8 of this Code for further information.

This Code also applies to accounts or holdings for persons outside the household, over which the Access Person has investment discretion, influence or control.

Questions. All Access Persons are obligated to read the requirements of this Code carefully. If you have any questions regarding how this Code applies to any conduct or practice, please contact the Compliance Department. When in doubt, an Access Person should ask before taking any action.

Compliance with Other Requirements Still Required. This Code supersedes prior versions of this Code. This Code does not supersede, or relieve an Access Person from complying with applicable laws or with other Federated Hermes standards and corporate and departmental policies or procedures which can be found on Federated Hermes’ internal website. A violation of any of these policies or procedures by an Access Person may, depending upon the circumstances, also constitute a violation of this Code.

Sanctions for Violations of this Code. Federated Hermes intends to enforce the provisions of this Code vigorously. A violation of this Code may subject an Access Person to sanctions as set forth in Section 7 below, and possible civil and criminal liability.

Adoption. Pursuant to Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act (as applicable), this Code has been adopted on behalf of each investment company that is served by the Board of Directors of the Federated Hermes’ funds, Federated Hermes' Advisers and Federated Hermes' Underwriters.

1Responsibilities
1.1General Principles

The following general principles govern all conduct of Access Persons, whether or not the conduct also is covered by more specific standards or procedures set forth below.

(a)       Fiduciary Principles

Each Access Person must:

·(i) place the Funds’ interests ahead of his or her personal interests;
·(ii) disclose and, where possible, avoid conflicts of interest (actual or potential) and the appearance of any conflict with the Funds or any other party;
·(iii) conduct his or her personal transactions in a manner, which is consistent with this Code and which does not interfere with Fund portfolio transactions or otherwise take unfair or inappropriate advantage of his or her position or relationship to a Fund or any other party;
·(iv) not show inappropriate favoritism of one Fund over another Fund in a manner that would constitute a breach of fiduciary duty;
·(v) not accept or offer inappropriate gifts, favors, entertainment, special accommodations or other things of material value that could influence decision-making by either Federated Hermes, an Adviser, a Fund or any other party;
·(vi) safeguard material nonpublic Fund information and control its dissemination in a manner consistent with Federated Hermes’ policies and applicable legal requirements; and
·(vii) otherwise act in good faith, in an open, honest, non-misleading, professional and unbiased manner, with integrity, and in a manner that instills trust and confidence and promotes independence in the investment decision-making process, in each aspect of the Access Person’s professional activities and business (including, without limitation, in all disclosures, advertisements and other communications, and dealings, with Funds, shareholders and accountholders).

For example, an Access Person’s failure to recommend or purchase a Covered Security for the Fund in order to purchase the Covered Security for the Access Person’s personal benefit may be considered a violation of this Code.

(b)       Legal Principles

In addition to complying with the above fiduciary principles, each Access Person must comply with State and Federal securities laws, rules and regulations. If you have questions concerning complying with applicable law, contact the Compliance Department or Federated Hermes's Deputy General Counsel.

Notwithstanding any other provision of this Code, for the avoidance of doubt, nothing herein prevents reporting possible violations of federal law or regulation to any governmental agency or entity, or making other disclosures, protected under the whistleblower provisions of federal law or regulation.

1.2Compliance with this Code is a Condition of Employment

Every Access Person must adhere to the general principles set forth in Section 1.1 above, and comply with the specific provisions and Associated Procedures of this Code and the spirit of those provisions. Literal compliance with specific provisions will not be sufficient where the transactions undertaken by an Access Person show a pattern of abuse of the Access Person’s fiduciary duty or of violation of applicable legal requirements.

1.3Personal Responsibility

It is the responsibility of each Access Person to take all steps necessary before executing a personal trade, or taking other action, to verify that the trade or other action is in compliance with the provisions and intent of this Code.

1.4Perceived Ambiguity shall not Excuse Violations

Any Access Person who believes a particular provision of this Code is ambiguous is required to contact the Compliance Department for a determination prior to executing a transaction or taking other action subject to that provision.

1.5Preclearance does not Protect Wrongdoing

Receipt of express prior preclearance approval does not exempt you from the prohibitions outlined in this Code.

2Reporting Requirements

The Reporting Requirements in Sections 2.1, 2.2, and 2.3 of this Code apply to Access Persons and their household members (generally including members of the immediate family sharing the same household, e.g., a spouse and unemancipated children) and certain partnerships, trusts, corporations or other similar arrangements. Access Persons should contact the Chief Compliance Officer for further clarification if they have questions regarding the application of this Code.

 

Every Access Person must report (1) all Covered Securities in which the Access Person or members of his or her household have direct or indirect investment discretion, influence or control (either for the benefit of the Access Person or for any other party), (2) all transactions in those Covered Securities, and (3) all accounts in which any Covered Securities are held. An Access Person is deemed to have influence or control over a discretionary account as described in Section 4.2.

 

NOTE: All information provided by the Access Person must be current as of a date no more than 45 days before the report is required to be submitted. Failure to provide that information within the time specified (if it is not being provided directly to Compliance by the financial institution or other party) shall be deemed a violation of the Code and SEC Rules.

 

Covered Securities transactions of Access Persons will be reviewed for compliance with the provisions of this Code. A violation may result from either a single transaction or multiple transactions if the Compliance Department determines that the transaction(s) did not comply with provisions of this Code.

Information relating to the holdings and personal trades of Access Persons will be shared with Senior Management of Federated Hermes from time to time for purposes of reviewing Access Person trading patterns and practices.

2.1Initial Reporting Requirements

Within ten (10) calendar days of becoming an Access Person, the Access Person is required to submit to the Compliance Department, a holdings report including:

(a)The full security name and description (i.e., type), CUSIP, SEDOL or exchange ticker symbol, number of shares and principal amount of each Covered Security held in any form, (e.g., brokerage/bank accounts, registered holdings, physical certificates, etc.) in any location, in which the Access Person or household member had any direct or indirect investment discretion, influence or control, including, without limitation, those shares of Federated Hermes funds included under this Code’s definition of “Covered Security,”
(b)All investment accounts with a financial institution or intermediary, including the name and address of any broker, dealer, bank or other financial institution holding any Securities in which the Access Person or members of his or her household have any direct or indirect investment discretion, influence or control, and the account numbers (this does not include accounts held directly with Federated Hermes’ Transfer Agent or 401k Plan Administrator);

(c)       The date the Access Person submits the report.

The Compliance Department will direct the broker, dealer, bank or other financial institution maintaining each account to provide duplicate confirmations of all transactions and account statements directly to the attention of the Compliance Department, in a timely fashion. The Compliance Department also will obtain reports on accounts held directly with Federated Hermes’ Transfer Agent or 401k Plan Administrator. Each Access Person must assure that such information is received.

2.2Quarterly Reporting Requirements

By the date specified by the Compliance Department (but in no event later than thirty (30) calendar days after the end of the calendar quarter) every Access Person must review the information recorded by the Compliance Department relating to his or her personal accounts (discretionary and non-discretionary) and all transactions in any Covered Securities, regardless of the form in which such securities are held, (e.g., brokerage/bank accounts, registered holdings, physical certificates, etc.), and each Access Person must complete and submit to the Compliance Department a quarterly Securities transaction report, using TradeComply where available, to:

(a)Identify and confirm that all Covered Security transactions during the previous calendar quarter in all accounts in which the Access Person or household members have a direct or indirect investment discretion, influence or control, have been reported, including, without limitation, transactions in Federated Hermes funds included under this Code’s definition of “Covered Security” that are held in accounts with a financial institution or intermediary (this does not include accounts held directly with Federated Hermes’ Transfer Agent or 401k Plan Administrator);
(b)Identify and confirm that all investment account information has been reported, including any new investment account(s) established during the quarter with broker-dealers, banks or other financial institutions holding any Securities in which the Access Person or members of his or her household have any direct or indirect investment discretion, influence or control, along with the name and address of the intermediary, the date the account was established and account number;

(c)       Resolve any discrepancies identified with the Compliance Department; and

(d)Record an electronic signature and date on TradeComply or other process approved by the Compliance Department.

The information required in Section 2.2(a) above shall include at least the following information about each transaction involving a Covered Security in which the Access Person or household member had, or as a result of a transaction acquired, any direct or indirect investment discretion, influence or control: (1) the date of the transaction, (2) the full security name, description (i.e., type), CUSIP, SEDOL or exchange ticker symbol, interest rate, maturity date, number of shares and principal amount of each Covered Security held, (3) the nature of the transaction (i.e., purchase, sale or any other type of acquisition or disposition), (4) the price of the Security at which the transaction was effected, and (5) the name of the broker, dealer, bank or other financial institution with or through which the transaction was effected.

An Access Person need not submit a quarterly Securities transactions report to the extent that the report would duplicate information contained in broker trade confirmations or account statements delivered to Federated Hermes so long as trade confirmations or account statements are received by the Compliance Department no later than 25 days after the end of the applicable calendar quarter.

2.3Annual Reporting Requirements

On an annual basis and by the date specified by the Compliance Department (but in no event later than thirty (30) calendar days after a request) from the Compliance Department, every Access Person is required to provide a written acknowledgment (1) that he or she is subject to, has received a copy of and read this Code, and (2) of his or her understanding of and compliance with this Code, its requirements and Associated Procedures. At the same time, the Access Person must review a current list of Covered Securities held in the Access Person’s account(s), as recorded by the Compliance Department, for accuracy, and complete and submit to the Compliance Department an annual report using TradeComply to:

(a)Identify and confirm all Covered Securities held in any form (e.g., brokerage/bank accounts, registered holdings, physical certificates, etc.) in any location, in which the Access Person or household member had any direct or indirect investment discretion, influence or control, including the full security name and description (i.e., type), CUSIP, SEDOL or exchange ticker symbol, number of shares and principal amount of each Covered Security held, including, without limitation, those shares of Federated Hermes funds included under this Code’s definition of “Covered Security,” that are held in accounts with a financial institution or intermediary (this does not include accounts held directly with Federated Hermes’ Transfer Agent or 401k Plan Administrator);

(b)       Resolve any discrepancies with the Compliance Department, and

(c)Record an electronic signature and date on TradeComply or other process approved by the Compliance Department.
2.4Independent Directors

Independent Directors must report all holdings and transactions in shares of Federated Hermes funds included under this Code’s definition of “Covered Security” that are held in accounts with a broker-dealer, bank or other financial institution or intermediary (this does not include accounts held directly with Federated Hermes’ Transfer Agent or 401k Plan Administrator).

Except for holdings and transactions involving Federated Hermes funds, an Independent Director (unless previously identified by the Compliance Department as being an Access Person who cannot take advantage of this Section) is exempt from all other reporting requirements so long as, at the time of a personal transaction in a Covered Security, such Independent Director neither knew nor, in the ordinary course of fulfilling his or her official duties as a fund director, should have known that during the 15-day period immediately before or after the director's transaction that the Covered Security was purchased or sold by the Fund, or considered for Purchase or Sale.

Any Independent Director who is identified by the Compliance Department as being an Access Person who cannot take advantage of this Section must comply with all reporting requirements applicable to Access Persons set forth in this Code or its Associated Procedures.

2.5Non-Federated Hermes Officers of Federated Hermes Funds or Proprietary Client Funds
(a)Non-Federated Hermes personnel serving as officers of a fund who are specifically designated as Access Persons subject to this provision shall be so notified by the Compliance Department and shall be deemed to be Access Persons.
(b)Such specially designated Access Persons shall be subject to all provisions under this Code applicable to Access Persons (as applicable), except that only the following provisions apply:

Section 1 Responsibilities

Section 2 Reporting Requirements

Section 4.1 Exempt Securities

Section 4.2 Discretionary Accounts

Section 5.1 General Prohibitions

Section 5.2 Equity Initial Public Offerings (IPOs) are Prohibited

Section 5.3 Private Placements Require Prior Compliance Approval

Section 5.5 Minimum Holding Period – Designated Federated Hermes Funds

Section 5.6 Prohibition on Insider Trading

Section 5.7 Disclosure or Misuse of Fund Information

Section 5.9 Prior Knowledge

Section 5.11 Excessive Trading and Market Timing

Section 5.13 Restrictions on Investment Clubs

Section 5.14 Disclosure of Personal Interests

Section 6 Prohibitions on Giving/Receiving Gifts; Political and
Charitable Contributions

Section 7 Review, Reporting, Education and Sanctions

Section 8 Definitions

(c)Each specially designated Access Person must notify the Compliance Department of any positions held on the Board of Directors of any publicly held company and any “for-profit” private company. In the event that the Access Person, thereafter, should be advised of an issue relating to any such company, the Access Person must recuse himself or herself from any discussion or consideration of such issues.
(d)Violations of this Code and/or suspicious trading activity shall be reported by the Compliance Department to the Senior Manager of such Access Person. A report by the employer of the steps taken in response to the issues raised shall be requested by the Compliance Department and reported to Federated Hermes management, and, in the case of a personal transaction that conflicts with a mutual fund transaction, the fund’s Audit Committee and, ultimately, the fund’s Board of Directors.
2.6Access Persons Acknowledgments of Receipt of Code of Ethics and Amendments
(a)The Compliance Department shall provide each Access Person with a copy of this Code annually. The Compliance Department also shall provide each Access Person with a copy of any amendment to this Code promptly after such amendments are adopted (and, to the extent possible, prior to their effectiveness).
(b)After receiving the copy of this Code or an amendment to this Code, each Access Person is required to provide the Compliance Department, within the time period prescribed by the Compliance Department, a written or electronic acknowledgment (1) that he or she has received and read this Code or such amendment, and (2) of his or her understanding of and compliance with this Code or such amendment, its requirements and any Associated Procedures.
3Preclearance Requirements
3.1Preclearance of Trades

Unless subject to a preclearance exception, all Access Persons must preclear every Purchase or Sale of a Covered Security in which the Access Person or member of his or her household has any investment discretion, influence or control (including, without limitation, transactions in pension or profit-sharing plans, Equity Initial Public Offerings (IPOs) (to the extent approved as satisfying the limited exceptions in Sections 5.2(a) or (b) to the general prohibition), and Private Placements), in accordance with the Associated Procedures governing preclearance.

(a)All Private Placement securities must be precleared by contacting the Compliance Department;

(b)       All other Covered Securities must be precleared using TradeComply;

(c)Access Persons without access to TradeComply must contact the Compliance Department for assistance in preclearing transactions on their behalf.
3.2Duration and Revocation

Preclearance approval remains in effect until the end of the following business day. Preclearance approval may be revoked at any time upon notification of revocation being provided by the Compliance Department. Any revocation shall not affect any transaction made prior to such revocation notice being delivered during a time when the preclearance approval was effective.

3.3Preclearance Does Not Protect Wrongdoing

Preclearance approval and the receipt of express prior preclearance approval does not exempt an Access Person from the prohibitions outlined in this Code.

3.4Exceptions

Preclearance requirements do not apply to:

(a)Shares of any registered open end investment companies, including, without limitation, Federated Hermes funds included under this Code’s definition of “Covered Security” (note that this exception does not apply to ETFs; all ETF transactions must be precleared);
(b)Involuntary purchases or sales, including mandatory corporate actions (e.g. corporate mergers, exchanges);
(c)Automatic Investment Plans, including, without limitation, dividend reinvestment plans; or automatic payroll deduction plan purchases that are either (a) made solely with the dividend proceeds, or (b) whereby an employee purchases Securities issued by an employer;
(d)Exercise of rights to purchase and any sales of such rights issued by an issuer pro rata to all holders of a class of its Covered Securities, to the extent such rights were acquired from such issuer;
(e)Exercise of rights to tender Securities when an offer is made on a pro rata basis to all holders of a class of Covered Securities;

(f)       Gifts or charitable donations of a Covered Security;

(g)Purchases or sales in discretionary accounts (as outlined in Section 4.2) and/or purchases or sales in other accounts over which the Access Person or household member had or has no investment discretion, influence or control.
(h)Purchases and sales of Covered Securities executed by an Independent Director.

NOTE: Notwithstanding anything in this Section to the contrary, Equity Initial Public Offerings (IPOs) (to the extent approved as satisfying the limited exceptions in Sections 5.2(a) or (b) to the general prohibition) and Private Placements shall in no event be exempt from the preclearance requirements.

3.5Exception for Employee Stock Options of a Previous Employer

Subject to the conditions indicated, an Access Person or Investment Person may exercise employee stock options for Securities of a previous employer, as follows:

(a)Access Persons and Investment Persons who are not also Portfolio Managers, Traders or Research Analysts may exercise employee stock options for Securities of a previous employer for cash or in a cashless exercise and hold the stock thereafter without preclearance or restriction that would otherwise be imposed by concurrent fund transactions, but must report the Securities when exercised.
(b)Investment Persons who are Portfolio Managers, Traders or Research Analysts may exercise such an employee stock option for cash or in a cashless exercise and hold the stock thereafter, without restriction that would otherwise be imposed by concurrent fund transactions after requesting and receiving in writing a determination by the Compliance Department that no material conflict of interest exists.
(c)A cashless exercise of employee stock options of a previous employer may occur without regard to the 60-day rule.
(d)All such exception provisions for the exercise of employee stock options shall be conditioned on:
(i)Access Persons and Investment Personnel who are not Portfolio Managers, Traders or Research Analysts must notify the Compliance Department of the exercise of any employee stock options within five business days.
(ii)Investment Personnel who are Portfolio Managers, Traders or Research Analysts must request a determination in writing by the Compliance Department that no apparent material conflict of interest exists prior to the exercise of any employee stock options and may not proceed with the exercise until such determination is received.
(iii)Approval of any such exercise shall be conditioned on full disclosure to the Compliance Department of all communications concerning that Security within Federated Hermes by the Access Person or Investment Person during the seven days prior to the exercise of an employee stock option.
(iv)Any apparent conflict of interest that is identified by the Compliance Department, before or after an exercise of employer stock options shall be reported to the President of the Advisory Companies and the Chief Executive Officer of Federated Hermes, Inc., and investigated further for determination as to whether a violation has occurred.
3.6Federated Hermes Stock and Options Trading
(a)All Federated Hermes employees are prohibited from trading Federated Hermes stock during announced blackout periods.
(b)All Federated Hermes employees are prohibited from short selling Federated Hermes stock.
(c)All Federated Hermes employees are further prohibited from options trading on Federated Hermes stock or purchasing Federated Hermes stock on margin without Compliance Committee approval.

Note: Employees should refer to the Federated Hermes Policy on Trading and Confidentiality for additional details.

3.7Special Rules for Equity Transactions Based on Market Capitalization
(a)To insure proper compliance with the Code and limit unintended preclearance mistakes, the Chief Compliance Officer, in conjunction with the President of the Advisory Companies requires all Investment Personnel to preclear all trades in equity securities of issuers having a market capitalization of less than $500 Million manually with the Compliance Department and such requests will be monitored and compared to Fund holdings for any appearance of conflicts of interest. ;
(b)Investment Personnel with a proposed transaction in equity securities having a market capitalization of less than $500 Million will be required submit to the Compliance Department a manual preclearance request inclusive of the proposed transaction details along with confirmation that the total requested transaction in the issuer will result in 5% or less of the Investment Person’s total current reported brokerage account exposure/ holdings. Compliance will review the submitted request to ensure that the proposed transaction. will not result in the requesting individual’s aggregate ownership exceeding the lesser of ½ of 1% of the outstanding securities of the issuer or $500,000. Additionally, the requested trade may not result in the Investment Management team, as defined in the Investment Management Organizational Chart, owning 1% or more of the outstanding securities of the issuer. Should an issue arise, the Compliance Department will review this information with the CIO - Global Equity (or Designee) to identify any holdings that might require additional special preclearance requirements and may impose a blackout or holding period of up to 90 days from the date of the last Fund trade in such security. These additional requirements will be communicated to and discussed with each affected Investment Person as they are identified.
4Exempt Transactions
4.1Exempt Securities

Unless otherwise specified within this Code, purchases or sales of the following Securities are not subject to the Preclearance (Section 3) or Prohibitions and Restrictions (Section 5) sections of this Code:

(a)Direct obligations of the Government of the United States and U. S. Government Agencies;

(b)       Bankers’ acceptances;

(c)       Bank certificates of deposit;

(d)       Commercial paper;

(e)High quality short-term debt instruments1, including, without limitation, repurchase agreements; and
(f)Shares of those registered open-end investment companies that are not included under this Code’s definition of “Covered Security”.

NOTE: Specified provisions of this Code are applicable to investment in Federated Hermes funds included under this Code’s definition of “Covered Security”.

4.2Discretionary Accounts

Discretionary accounts over which the Access Person (or household member) has no investment discretion, but over which the Access Person retains control to designate an investment manager, are not subject to preclearance requirements (Section 3), prohibition of short-term profits (Section 5.4) or blackout periods caused by fund transactions (Section 5.8), but retain the prohibition on trading Federated Hermes stock (Section 3.6), Equity Initial Public Offerings (IPOs) (Section 5.2), the limitations of Private Placements (Section 5.3), and the minimum holding period for designated Federated Hermes Funds (Section 5.5) specified in this Code and are subject to all reporting requirements (Section 2).

It is the Access Person’s responsibility to notify his or her broker or manager of these restrictions and limitations.

Access Persons establishing discretionary accounts and the individuals accepting discretionary authority over such accounts are required to acknowledge, in writing, their understanding and acceptance of the restrictions applicable to such accounts. Access Persons must provide information relating to the investment objective and any restrictions placed on his or her (or household member's) discretionary account(s) and any changes made to those objectives or restrictions to the Compliance Department.

5Prohibitions and Restrictions
5.1General Prohibitions

Every Access Person is prohibited from:

(a)       Employing any device, scheme or artifice to defraud the Fund;

(b)Making any untrue statement of a material fact to the Fund or omitting to state a material fact necessary in order to make the statements made to the Fund, in light of the circumstances under which they are made, not misleading;
(c)Engaging in any act, practice or course of business that operates or would operate as a fraud or deceit on the Fund; or

(d)       Engaging in any manipulative practice with respect to the Fund.

Examples: Causing the Fund to purchase a Covered Security owned by the Access Person for the purpose of supporting or driving up the price of the Covered Security, and causing the Fund to refrain from selling a Covered Security in an attempt to protect the value of the Access Person's investment, such as an outstanding option.

Without limiting the foregoing:

(i)Each Access Person is prohibited from usurping investment or other business opportunities of a Fund for personal benefit (or for the inappropriate benefit of Federated Hermes). Each Access Person owes a duty to the Funds to advance the Funds’ legitimate interests when the opportunity to do so arises. This duty of loyalty is violated if an Access Person personally profits (or allows Federated Hermes to inappropriately profit) from an investment or other business opportunity that rightfully belongs to a Fund. This problem could arise, for example, if an Access Person becomes aware through the use of Federated Hermes or Fund property, information or relationships of an investment opportunity (either a loan or equity transaction) in which the Fund is or may be interested, and then participates in the transaction personally or informs others of the opportunity before offering it to the Fund. An Access Person is prohibited from using Federated Hermes or Fund property, information or relationships for personal gain (or for the inappropriate gain of Federated Hermes);
(ii)Each Access Person is prohibited from taking inappropriate or unfair advantage of his or her relationship with a Fund or a Vendor. Under this duty of fair dealing, no Access Person should take advantage of a Fund or a Vendor, or another person or entity, through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other unfair dealing practice. All business conducted on behalf of Federated Hermes is to be done with integrity and high fiduciary, legal and ethical business standards;
(iii)Each Access Person is prohibited from misappropriating Federated Hermes or Fund assets; and
(iv)Each Access Person is prohibited from taking any action to fraudulently influence, control, coerce, manipulate or mislead any independent accountants engaged in the performance of an audit of Federated Hermes' or a Fund's financial statements for the purpose of rendering such financial statements materially misleading.

(Any Access Person who is a director, officer or employee of Federated Hermes should also refer to the "Corporate Opportunities," "Fair Dealing," "Protection and Proper Use of Company Assets" and "Improper Influence on the Conduct of Audits" requirements in Federated Hermes' Code of Business Conduct and Ethics. If you have questions concerning the duty of loyalty, the duty of fair dealing, use of assets or conduct of audits, contact the Compliance Department or Federated Hermes’ Deputy General Counsel.)

5.2Equity Initial Public Offerings (IPOs) are Prohibited

Access Persons may not directly or indirectly acquire Beneficial Ownership or exercise investment discretion, influence or control in any equity Security in an Initial Public Offering (IPO) without prior approval. Exceptions may be approved in the following instances:

(a)Initial Public Offerings (IPOs) relating to Securities of the employer of a spouse, when offered to all employees at the spouse’s level, or the demutualization of insurance companies, banks or savings and loans, if the Access Person owned a policy or held such a prior interest or relationship in or with the issuer, are allowed, and
(b)Initial offering of diversified investment funds, including, without limitation, closed-end funds and unit investment trusts (or "UITs") are allowed.

All such exceptions require reporting and preclearance approval in accordance with the provisions of Sections 2 and 3 above.

Initial public offerings in fixed income securities are permitted, however no Access Person will be allowed to invest in a fixed income Security during a blackout period caused by a Fund trade.

5.3Private Placements Require Prior Compliance Approval

Access Persons may not directly or indirectly acquire Beneficial Ownership or exercise investment discretion, influence or control in any Private Placement Security without prior approval. Any such transaction requires reporting and preclearance approval directly from the Compliance Department. No Access Person will be allowed to invest in a Private Placement Security in which a Fund has an investment or contemplates participation.

If an Investment Person receives prior approval and acquires a Private Placement Security, the Investment Person must disclose this investment to the Chief Investment Officer (or the Chief Investment Officer’s designee) before the Investment Person may participate in any subsequent consideration of any potential investment by a Fund in the issuer of that Security.

Following a purchase by an Investment Person in an approved personal transaction, any purchase by a Fund of Securities issued by the same company (other than secondary market purchases of publicly traded Securities) will be subject to an independent review by the Compliance Department.

5.4Prohibition of Short-Term Profits – 60 Day Rule – Individual Securities

As a general rule, personal Securities transactions of Access Persons should be for long-term investment purposes and should not be initiated for short-term profits. Profits realized on the sale of an individual Security held less than 60 days must be disgorged.

(a)When a new purchase results in multiple lots of a Security held in personal portfolios, no lot of the same Security may be sold within 60 days if sale of any lot of the Security would result in a gain.
(b)Similarly, no Security may be purchased within 60 days of the sale of the same Security, unless the Security is purchased at a price greater than the price of any sale of the Security within the prior 60 days.

Note: The short-term profit prohibition also applies to derivative transactions in securities.  Any transaction completed to liquidate a previously established derivative position in a security (either through purchasing or selling the underlying security, assigning a derivative contract, covering margin requirements, or taking an offsetting derivative position) within 60 calendar days of the original transaction date, that results in a gain, would be a violation of the Code.  Further, derivative transactions cannot have an expiration date of less than 60 calendar days at the point of purchase.

 

5.5Minimum Holding Period – Designated Federated Hermes Funds

Any holding of a Federated Hermes’ fund which, according to its prospectus has adopted Frequent Trading Policies and is subject to monitoring for Frequent Trading will be subject to the following conditions:

(a)The minimum required holding period for shares of Federated Hermes’ funds subject to monitoring for Frequent Trading is 60 days, unless the particular fund has a redemption fee provision lasting for a longer period, in which case the minimum holding period will be the same as the redemption fee period. Holding periods will be measured for fund transactions for this condition on a "first in, first out" (FIFO) accounting basis.
(b)In addition to the holding period specified above, shares of Federated Hermes’ funds that are subject to monitoring for Frequent Trading are further subject to the limitations expressed within the prospectus regarding frequency of trading that may be deemed excessive or disruptive, including but not limited to purchases and sales within 30 days or trading that is deemed disruptive over periods longer than 30 days. Such frequent or disruptive trading may occur in the same account or more than one account; that is to say that a purchase may be made in one account and a sale in another account and still be subject to these provisions. Access persons making asset allocation adjustments (transfers between or re-balancing) to investments in Federated Hermes funds that are subject to monitoring for Frequent Trading must observe these limitations and restrictions. A violation of the Frequent Trading Policies of any Federated Hermes Fund will be treated as a violation of the Code and will be subject to sanctions imposed by the Chief Compliance Officer.
(c)Systematic purchases (periodic contributions or 401k deferrals) or systematic or periodic withdrawals, that are part of a regular pattern, as determined by the Compliance Department, will generally not trigger a holding period violation. Similarly, required income distributions by a trust, minimum required individual retirement account (IRA) distributions and 529 Plan distributions for education expenses will not generally trigger a holding period violation.
(d)The Compliance Department shall be authorized to grant further exception from the required holding period in cases of exceptional hardship that could not be reasonably foreseen by an Access Person.
5.6Prohibition on Insider Trading

Use of material, non-public information about any issuer of Securities by an Access Person is prohibited, regardless of whether such Securities are held by or have been recommended for any Fund. “Material non-public information” relates not only to issuers, but also includes, without limitation, an Adviser’s Securities recommendations and Fund Securities holdings and transactions. In limited instances, awareness of material, non-public information relating to a specific Federated Hermes Fund, could subject certain Access Persons, as identified by the Compliance Department, to a blackout period during which those specified Access Person would be prohibited from buying or selling shares of the Fund.

(See the Federated Hermes “Policy on Trading and Confidentiality” for more information. Also, any Access Person who is a director, officer or employee of Federated Hermes should also refer to the "Insider Trading" requirements in Federated Hermes' Code of Business Conduct and Ethics. If you have questions concerning insider trading issues, contact the Compliance Department or Federated Hermes’ Deputy General Counsel.)

5.7Disclosure or Misuse of Fund Information

Selective disclosure to third parties or misuse of any material, nonpublic Fund-related information by an access person is prohibited. No portfolio holdings or any other material, nonpublic information regarding a Fund may be disclosed, unless the same data is posted on the public website for other investors or is otherwise publicly available on a simultaneous basis. “Material” information is defined as any Fund-related information that might be expected to impact an investor's decision to buy, sell or hold a Fund or Security, and may include, without limitation, holdings, trading strategies, pending transactions, performance or performance attribution, duration, yields or other key statistics. Requests for public disclosure of previously undisclosed information or to release information on a more frequent schedule must be approved by the President of the Advisory Companies and the Chief Compliance Officer.

The Purchase or Sale of Federated Hermes fund shares based on material, nonpublic information about the fund's portfolio is similarly prohibited.

(See the Federated Hermes “Fund Information Disclosure Policy” for more information. Also, any Access Person who is a director, officer or employee of Federated Hermes should also refer to the "Confidentiality" requirements in Federated Hermes' Code of Business Conduct and Ethics. If you have questions concerning disclosure or misuse of Fund information, contact the Compliance Department or Federated Hermes’ Deputy General Counsel.

5.8Blackout Periods – Fund Trades

Portfolio Managers and Research Analysts identified as serving a Fund or group of Fund(s) are prohibited from purchasing or selling any Covered Security for which there is an open “buy” or “sell” order or any Covered Security that has been purchased or sold by those Fund(s) within fifteen (15) calendar days before or after the Fund purchases or sells that Security.  Personal transactions that occur before transactions in those Fund(s) will be prohibited if the aggregate related open “buy” or “sell” orders and/or purchases or sells of that Covered Security by those Fund(s) are thereafter determined to have been of an amount sufficient to trigger a blackout period.  Transactions of those Funds in any amount will cause personal transactions to be prohibited for fifteen days after the trades.  This provision supersedes any prior preclearance.

Investment Personnel who are not among the Portfolio Managers and Research Analysts identified as serving the Fund(s), as provided above, may not purchase or sell a Covered Security within seven (7) calendar days after one or more Funds have open “buy” or “sell” orders and/or purchases or sells in the same Covered Security in an amount sufficient to trigger a blackout period, subject to any prior preclearance.

All other Access Persons may not purchase or sell a Covered Security on any day during which one or more Funds have open “buy” or “sell” orders and/or purchases or sells the same Covered Security in an amount sufficient to trigger a blackout period, subject to any prior preclearance.

NOTE: For purposes of administering this Section, all MDT employees shall be considered Investment Personnel, but generally no MDT employees shall be considered portfolio managers, traders or research analysts.

The Compliance Department shall have discretion in determining the methodology by which blackout periods are calculated.

5.9Prior Knowledge

No Access Person may execute a personal transaction, directly or indirectly, in any Covered Security and no prior preclearance will apply, when he or she knows, or should have known, that the Covered Security is being:

(a)Considered for Purchase or Sale by the Fund; or
(b)Purchased or sold by the Fund.
5.10Serving as a Director or Officer of Outside Organizations

This Section applies to Access Persons, but not any household members of such Access Persons.

While serving the community is a worthy objective, a director or officer of any organization has access to sensitive information and charts the course of that entity. Federated Hermes must take safeguards to shield Federated Hermes and Access Persons (including, without limitation, Investment Personnel) from even the appearance of impropriety. To that end:

(a)All Access Persons are prohibited from serving as an officer or director of any other organization unless written approval is first granted by the Compliance Committee. Approval of the Committee is not required in those situations where the organization is not-for-profit and does not issue securities.
(b)All Access Persons must notify the Chief Compliance Officer in writing (by completing the Non-Federated Hermes Business or Board Activity request form) of any organization for which such Access Person serves in compliance with this Section: (1) initially upon becoming an Access Person or, (2) before they accept and begin to serve as an officer or director, and/or (3) upon resigning from any such position.
(c)If approval to serve as an officer or director of an organization is granted, an Access Person has an affirmative duty to (1) recuse himself or herself from participating in any deliberations inside Federated Hermes regarding such organization, and (2) not share non-public information of such organization with any Federated Hermes personnel (including, without limitation, any Investment Personnel).
(d)The President of the Advisory Companies and all Investment Personnel reporting directly or indirectly to him are further prohibited from serving as an officer or director of any publicly issued or privately held issuer of a Security (whether “for profit,” “not for profit,” “charitable” or otherwise) that is or may become an eligible investment for a Fund unless an exception is granted by the Compliance Committee pursuant to the following provisions:
(i)In the case of charitable, eleemosynary, municipal or educational organizations only, if the organization has no securities outstanding or if all Chief Investment Officers confirm in writing that the securities of the issuer either are not qualified for investment by the funds or that adequate alternative investments are available, and the President of the Advisory Companies approves, then the Compliance Committee may approve service as an officer or director by an Investment Person, subject to semi-annual confirmation by the Chief Investment Officers and approval by the President of the Advisory Companies that these conditions have not changed.
(ii)In the instances specified in Paragraph d. (i) of this Section, above, the Compliance Department shall maintain the organization on the Funds Restricted List. Inclusion on the Restricted List shall make any security of the issuer an ineligible investment for the funds. The Compliance Department shall communicate the Restricted List to all Chief Investment Officers and the President of the Advisory Companies quarterly.
(iii)If an Investment Person, at the time of adoption of this amended provision of the Code or, in the case of a new hire, at the time of his or her employment, is serving as an officer or of a charitable or eleemosynary organization that has issued securities eligible for or owned by the funds, then the Investment Person shall recuse himself or herself from all discussions concerning possible investment by the funds in such security and may request that his or her current term in such role may be completed. The Compliance Committee may approve completion of terms under such circumstances if it deems the remaining term reasonable. Approval to continue a current term will not permit the Investment Person to begin another term on the board.
(iv)If a Security issued by a charitable or eleemosynary organization becomes an eligible investment for a Fund while an Investment Person is serving as an officer or director, the Investment Person shall be subject to the same terms as are provided in Paragraph (d)(iii) of this Section, above.
(v)If a Security issued by any organization that is not a charitable or eleemosynary organization becomes an eligible investment for a Fund after an Investment Person has begun serving as an officer or director, the Investment Person must immediately resign from such role and recuse himself or herself from all matters relating to the organization.
(e)If an Access Person serves as an officer or director of a non-public organization, and the organization seeks to issue securities, such Access Person must, promptly after the company’s intention to issue securities becomes public, take steps to notify the Chief Compliance Officer in writing. If an exception has not been reconfirmed under this Section or if continued service would be prohibited under this Section, as of the time when the organization’s securities are first offered to the public, then the Access Person must immediately resign from such board and recuse himself or herself from all board matters.
(f)Nothing in this Section limits or restricts service on the Board of Federated Hermes, its subsidiaries, Federated Hermes Funds, Proprietary Funds, or other funds administered by subsidiaries of Federated Hermes.

NOTE: Any Access Person who is a director, officer or employee of Federated Hermes should also refer to the "Corporate Boards" requirements in Federated Hermes' Code of Business Conduct and Ethics.

5.11Excessive Trading and Market Timing
(a)Access Persons are strongly discouraged from trading excessively. This applies to both individual Securities and registered investment company Securities included under this Code’s definition of “Covered Security.” The Chief Investment Officers, the President of the Advisory Companies and the Head of Trading will review the transaction volume of Investment Personnel on a quarterly basis. The transaction volume of other Access Persons may be reviewed with other managers periodically.
(b)Access Persons are prohibited from market timing. This includes, without limitation, entering into any agreement or arrangement to permit market timing by any fund, shareholder or accountholder or in any fund, or by any broker, dealer, bank or other financial institution, person or entity. Frequent or short-term trading into and out of funds can have adverse consequences for the funds, shareholders and accountholders who use the funds as long-term investment vehicles. Such trading in significant amounts can disrupt the funds' investment strategies (e.g., by requiring the funds to sell investments at inopportune times or maintain excessive short-term or cash positions to support redemptions or cash flow needs), increase brokerage and administrative costs and affect the timing and amount of taxable gains distributed by or in respect of the funds. Such trading may also seek to profit by estimating changes in a fund’s net asset value in advance of the time as of which net asset value is calculated.
5.12Independent Directors

Notwithstanding the other restrictions or exemptions provided under this Code, Independent Directors (other than Independent Directors identified by the Compliance Department as being Access Persons subject to additional provisions of this Code) and their household members are subject only to the following Code restrictions:

Section 5.1 General Prohibitions

Section 5.5 Minimum Holding Period – Designated Federated Hermes Funds

Section 5.6 Prohibition on Insider Trading

Section 5.7 Disclosure or Misuse of Fund Information

Section 5.9 Prior Knowledge

Section 5.11 Excessive Trading and Market Timing

In order to monitor compliance with the above referenced Code provisions, Section 2.4 further requires Independent Directors to disclose holdings and transactions in certain Federated Hermes funds for themselves and their household members.

5.13Restrictions on Investment Clubs

Investment Personnel who wish to participate in an investment club must request Chief Investment Officer approval prior to joining in the club activity. Names of other club members must be disclosed. The Chief Investment Officer shall notify the Compliance Department when such approval is granted.

Access Persons will be deemed to have investment discretion, influence or control in any trade by the club. All investment club activity by any Access Person will require preclearance and must be reported by duplicate confirms and statements.

5.14       Disclosure of Personal Interests

All Access Persons (including, without limitation, Investment Personnel) are prohibited from:

(a)Recommending, implementing or considering any Securities transaction for a Fund, or
(b)Negotiating any agreement or otherwise arranging for any relationship with any Vendor,

without having disclosed in writing to the Chief Investment Officer (in the case of Investment Personnel) (or another person designated by the Chief Investment Officer) (Chief Investment Officers shall disclose to the President of the Advisory Companies) or the Compliance Department (in the case of all other Access Persons):

(i)any material Beneficial Ownership, business or personal relationship, or other material interest, that the Access Person has in an issuer or its affiliates, or in a Vendor, or
(ii)other material conflict of interest that the Access Person has with an issuer or its affiliates or with a Vendor.

If the Chief Investment Officer (or other designated person) or Compliance Department determines that the disclosed interest is a material conflict of interest, then the Access Person may not participate in (a) any decision-making process regarding the Securities of that issuer, or (b) any negotiations or discussions with any Vendor.

In addition to the specific requirements above, each Access Person has the responsibility to use his or her best judgment to assess objectively whether there might be even the appearance of a conflict of interest or acting for reasons of personal gain (or the inappropriate gain of Federated Hermes to the detriment of a Fund, an issuer or its affiliates or a Vendor). If you have questions regarding disclosure of personal interests and conflicts of interest, contact the Compliance Department or Federated Hermes’ Deputy General Counsel).

NOTE: Refer also to the "Conflicts of Interest" and "Personal Financial Interests; Outside Business Interests" requirements in Federated Hermes' Code of Business Conduct and Ethics.

6Prohibitions on Giving/Receiving Gifts; Political and Charitable Contributions

Access Persons are in a position of trust and must exercise great care to preserve their independence. As a general rule, no Access Person should ever receive, solicit, make or offer an inappropriate payment or anything of value in exchange for a decision involving Federated Hermes’, a Fund's or a Vendor's business. Decisions must be made in an unbiased manner. Bribery, kickbacks and other improper payments have no place in Federated Hermes' business.

 
 

 

Without limiting the foregoing general principles:

(a)Every Access Person is prohibited from giving, either individually or in the aggregate with all other Access Persons, or receiving any gift, favor, preferential treatment, valuable consideration, or other thing of more than a de minimis value in any year to or from any Fund, or other person or entity, from, to or through whom Fund purchases or sells Securities, or an issuer of Securities or its affiliates or a Vendor. For purposes of this Code, “de minimis value” is equal to $100 in the aggregate in the US; £50 in the aggregate in the UK; and, €100 in the aggregate in Germany or less. This prohibition does not apply to:
·(i) salaries, wages, fees or other compensation paid, or expenses paid or reimbursed, in the usual scope of an Access Person's employment responsibilities for the Access Person's employer;
·(ii) meals, refreshments or entertainment of reasonable value in the course of a meeting or other occasion, the purpose of which is to hold bona fide business discussions;
·(iii) advertising or promotional material of nominal value, such as pens, pencils, note pads, key chains, calendars and similar items;
·(iv) the acceptance of gifts, meals, refreshments, or entertainment of reasonable value that are related to commonly recognized events or occasions, such as a promotion, new job or recognized holiday; or
·(v) the acceptance of awards, from an employer to an employee, for recognition of service and accomplishment.

Note: Access Persons must be aware that in certain instances, gifts and/or various forms of entertainment may be subject to lower limitations or be prohibited entirely to certain individuals, including government officials, and it remains the obligation of the Access Person to verify actual limits or prohibitions with the Compliance Department, (which may further require discussion with the Legal Department) prior to making a gift or engaging in such other activities. Such activities may be limited or prohibited by federal, state, local or foreign laws.

Investment Personnel should also refer to the Investment Management Gift and Entertainment Policy and Procedures.

(b)Every Access Person is prohibited from (i) making political or charitable contributions solely for the purpose of obtaining or retaining assets from, or advisory contracts or other business relationships with, federal, state, local or foreign governments or governmental agencies, or political subdivisions of any of them, or charitable organizations; and (ii) considering an Adviser’s or Federated Hermes’ current or anticipated business relationships as a factor in soliciting political or charitable donations.

NOTE: Any Access Person who is a director, officer or employee of Federated Hermes should also refer to the "Payments and Gifts" requirements in Federated Hermes' Code of Business Conduct and Ethics. Any Access Persons who are subject to the Broker-Dealer Written Supervisory Policies and Procedures also should consult those procedures for additional guidance on the receipt of gifts and gratuities. If you have questions regarding the receipt of gifts or political and charitable contributions, contact the Compliance Department or Federated Hermes’ Deputy General Counsel.

7Review, Reporting, Education and Sanctions
7.1Management Review of Investment Personnel’s Trading Activity

The President of the Advisory Companies, the Chief Investment Officers, the Head of Trading and such additional managers as the President of the Advisory Companies may designate will receive monthly reports of investment-related activity by Investment Personnel, such as preclearance requests, executed transactions and any other activity. Personal investment data will be reviewed to determine whether the transactions conflict with any Fund activity and whether the transactions appear appropriate and consistent with the position and responsibility of the Investment Person.

7.2Compliance Review of Reports and Trading Activity, and this Code of Ethics

Federated Hermes’ Compliance Department will review all initial holdings reports, confirmations, quarterly transaction reports, annual holdings reports and other reports and information required to be submitted under this Code to identify improper trading activity or patterns of trading, and to otherwise seek to verify compliance with this Code. Without limiting the foregoing, the Compliance Department will review personal trading activity and trading records to identify possible violations, including:

(a)       Delay in reporting individual investments or investment accounts;

(b)       Failure to report individual investments or investment accounts;

(c)       Filing false or incomplete reports;

(d)       Failure to preclear individual trades;

(e)       Executing trades that violate provisions of this Code; and

(f)       Failure to comply with the receipt of gifts provision.

In addition, the review may also include (as applicable, and in the Compliance Department's discretion): (i) a comparison of personal trading to applicable restricted lists; (ii) an assessment of whether an Access Person is trading for his or her own account in the same Securities he or she is trading for Funds (and, if so, whether the Funds are receiving terms as favorable as the Access Person takes for himself or herself); (iii) an assessment of Access Person trading patterns for indications of abuse (including, without limitation, "market timing"); (iv) an analysis of any substantial disparities between the quality of performance an Access Person receives for his or her own account and that he or she receives for Funds; and (iv) an analysis of any substantial disparities between the percentage of personal trades that are profitable and the percentage that are profitable when he or she places trades for Funds.

Federated Hermes' Compliance Department also will review this Code, and the implementation, effectiveness and enforcement of this Code, at least once annually or more frequently in response to material changes in legal requirements or business practices, as contemplated by Federated Hermes' written compliance program.

7.3Self-discovery and Reporting
(a)Each Access Person is required to report violations or suspected violations by any party of this Code promptly to the Compliance Department. If the person within the Compliance Department that receives the report is not the Chief Compliance Officer, that person must report all violations reported to the Chief Compliance Officer.
(b)Immediate disclosure by an Access Person to the Compliance Department of a self-discovered violation and correction of that violation (including, without limitation, the immediate disgorging of any gain) will generally be treated as a violation to be recorded, but not as a material violation, if the Access Person has not benefited by the transaction and the Compliance Department determines that the violation was not intentional.
(c)It is Federated Hermes' policy that retaliation against Access Persons who report actual or suspected violations of this Code is prohibited. Any actual or attempted retaliation will be treated as a separate violation of this Code, which will be subject to sanction in accordance with Section 7.5 below (including, without limitation, termination).

NOTE: Any Access Person who is a director, officer or employee of Federated Hermes should also refer to the "Reporting of any Illegal or Unethical Behavior" requirements in Federated Hermes’s Code of Business Conduct and Ethics. If you have questions concerning reporting violations, contact the Compliance Department or Federated Hermes’ Deputy General Counsel.

7.4Education

From time to time the Compliance Department will schedule training sessions or may otherwise distribute educational materials regarding this Code. Access Persons are required to participate in all training sessions offered. Access Persons will be required to provide a written acknowledgment that the Access Person received, read and understood the Code and its administration.

7.5Sanctions

Upon determining that a violation of this Code or its Associated Procedures has occurred, the Chief Compliance Officer may take such actions or impose such sanctions, if any, as may be deemed appropriate, including, without limitation:

(a)       Issue a letter of censure;

(b)       Assess a fine, either nominal or substantial;

(c)       Require the unwinding of trades;

(d)       Require the disgorging of profits;

(e)Disallow discretionary accounts or required preclearance of discretionary account trades;

(f)       Prohibit or place further restrictions on personal trading or other activities;

(g)       Recommend suspension;

(h)        Recommend a reassignment of duties or job functions; or

(i)       Recommend that the employment of the violator be terminated.

7.6Factors for Consideration

Sanctions listed above may be assessed individually or in combination. Prior violations of the Access Person and the degree of responsibility exercised by the Access Person will be taken into consideration in the assessment of sanctions.

In instances where a member of the Access Person’s household commits the violation, any sanction will be imposed on the Access Person.

If extraordinary or unforeseen circumstances exist, an appeal may be directed to the Compliance Department. Appeals are solely within the discretion of the Chief Compliance Officer. The Chief Compliance Officer shall further have full discretion and authority to make special provision under and/or interpret or apply provisions of this Code.

7.7Reporting of Violations
(a)Violations of Investment Personnel and proposed sanctions will be reported to the responsible Chief Investment Officer and/or Manager. Violations of other Access Persons, and proposed sanctions, will be reported to the responsible Senior Manager. All violations and the proposed sanction will be reported to Senior Management and the Board of Directors of the Federated Hermes Funds quarterly.
(b)Any patterns or trends noted and any difficulties in administration of this Code shall be reported to Senior Management and to the Board of Directors of the Federated Hermes Funds, at least annually.
8Definitions
8.11933 Act

The “1933 Act” means the Securities Act of 1933, as amended.

8.21934 Act

The “1934 Act” means the Securities Exchange Act of 1934, as amended.

8.31940 Act

The “1940 Act” means the Investment Company Act of 1940, as amended.

8.4Access Person

“Access Person” means any person who participates in or who: (i) in connection with his or her duties, obtains or could obtain any information concerning recommendations on Covered Securities being made by the investment adviser to any Fund or (ii) any person who has access to nonpublic information regarding any Fund’s Purchase or Sale of Securities, or nonpublic information regarding the portfolio holdings of any Reportable Fund.

“Access Person” includes, without limitation, a director, trustee, officer, managing general partner, general partner, or Investment Person of a Fund, of the Underwriter, and of the Adviser and other persons designated by the Compliance Department, any trust over which an Access Person is a trustee with investment discretion, influence or control, (either for the benefit of the Access Person or for any other party), any closely-held entity (such as a partnership, limited liability company or corporation) and any account (including, without limitation, any retirement, pension, deferred compensation or similar account) with respect to which the Access Person has investment discretion, influence or control.

Activity (including, without limitation, trading activity) by an Access Person’s household members will generally be attributed to the Access Person. (If emancipated adult children or other independent parties also reside in the household, the Access Person must either declare that the Access Person has no discretion, influence or control over the investment decisions of such other party or the Access Person must report the party as an Access Person.)

8.5Adviser

“Adviser” means any subsidiary of Federated Hermes registered as an investment adviser with the SEC.

8.6Advisers Act

“Advisers Act” means the Investment Advisers Act of 1940, as amended.

8.7Associated Procedures

“Associated Procedures” means those procedures and/or statements that have been adopted by the Underwriter, the Adviser, a Fund or the Compliance Department, and which are designed to supplement this Code and its provisions.

8.8Automatic Investment Plan

“Automatic Investment Plan” means a program in which regular periodic purchases (or withdrawals) are made automatically in (or from) investment accounts in accordance with a predetermined schedule and allocation. An “Automatic Investment Plan” includes, without limitation, a dividend reimbursement plan.

8.9Beneficial Ownership

“Beneficial Ownership” will be attributed to an Access Person in all instances where the Access Person directly or indirectly (i) possesses the ability to purchase or sell the Covered Securities (or the ability to direct the disposition of the Covered Securities); (ii) possesses voting power (including the power to vote or to direct the voting) over such Covered Securities; or (iii) receives any benefits substantially equivalent to those of ownership. It is the intent of Federated Hermes that “Beneficial Ownership” be interpreted in the same manner as it would be under 17 C.F.R. § 240.16a-1(a)(2) in determining whether a person has Beneficial Ownership of a Security for purposes of Section 16 of the 1934 Act and the rules and regulations thereunder.

8.10Board

The “Board” means, with respect to a fund, the board of directors or trustees or any other group serving a similar function that has adopted this Code on behalf of the fund.

8.11Code

“Code” means this Code of Ethics and any Associated Procedures.

8.12    Compliance Committee

“Compliance Committee” means the committee referenced under the Federated Hermes Code of Business Conduct and Ethics, consisting of, among others, the Chief Compliance Officer, the Deputy General Counsel, the Chief Audit Executive and the Chief Risk Officer.

8.13Compliance Department

The “Compliance Department” means the Chief Compliance Officer of Federated Hermes and those other individuals designated by him or her as responsible for implementing this Code and the Associated Procedures.

8.14Control

“Control” has the same meaning as that set forth in Section 2(a)(9) of the 1940 Act.

8.15   Covered Security

“Covered Security” means any Security, or interest in a Security held in any form, not expressly excluded by provisions of this Code, including, without limitation: equity and debt Securities; derivative Securities, including, without limitation, options on and warrants to purchase equity or debt Securities; shares of closed-end investment companies; investments in unit investment trusts; and any related instruments and Securities. “Covered Security” also means shares of any Reportable Funds and any 529 Plan or annuity employing such funds, unless specifically excluded in the paragraph below. Also included are futures, swaps and other derivative contracts.

“Covered Security” does not include: (1) direct obligations of the Government of the United States or U. S. Government Agencies (regardless of their maturities); (2) bankers' acceptances; bank certificates of deposit; commercial paper; high quality short-term debt instruments, including repurchase agreements; (3) shares of 1940 Act registered investment companies that are designated as money market funds; (4) shares issued by 1940 Act registered open-end investment companies (other than Reportable Funds) in a direct account with a mutual fund or 529 Plan or annuity offeror when that account may only hold registered open-end investment company Securities; or (5) shares issued by unit investment trusts (or "UITs") that are invested exclusively in one or more open-end funds, none of which are Reportable Funds.

8.16Federal Securities Laws

“Federal Securities Laws” means (a) the 1933 Act, (b) the 1934 Act, (c) the Sarbanes-Oxley Act of 2002, (d) the 1940 Act, (e) the Advisers Act, (f) Title V of the Gramm-Leach Bliley Act, (g) any rules of the SEC promulgated under any of the statutes identified in (a) through (f) above, (h) the Bank Secrecy Act as it applies to registered mutual funds and investment advisers, and (i) any rules adopted under the Bank Secrecy Act by the SEC or the Department of Treasury.

8.17Federated Hermes

“Federated Hermes” means Federated Hermes, Inc. and any of its subsidiaries as the context may require.

8.18Fund

“Fund” means (i) each investment company registered under the 1940 Act (and any series or portfolios of such company) for which an Adviser serves as an investment adviser (as defined in § 2(a)(20) of the 1940 Act or an Underwriter serves as a principal underwriter (as defined in §§ 2(a)(29) and (40) of the 1940 Act) and (ii) any other investment account or portfolio over which an Adviser exercises investment discretion (whether pursuant to a direct advisory agreement, through a managed account or "wrap fee" program, or otherwise), and (iii) any investment adviser, broker, dealer, bank, or other financial institution to which Federated Hermes provides non-discretionary investment advisory services.

8.19Independent Director

“Independent Director” means a member of the Federated Hermes Funds’ Board who is not an “interested person” of the Fund within the meaning of Section 2(a)(19) of the 1940 Act.

8.20Influence

Influence means taking an action that is reasonably expected to materially modify the independent investment decision-making of a person who controls or otherwise has investment discretion with respect to an account (whether by imposing a restraint on such decision-making ability or directing a decision).

8.21Initial Public Offering

“Initial Public Offering” means an offering of Securities registered under the 1933 Act, the issuer of which, immediately before the registration, was not subject to the reporting requirements of Sections 13 or 15(d) of the 1934 Act.

8.22Investment Person; Investment Personnel

“Investment Person” or “Investment Personnel” means (a) Access Persons with direct responsibility and authority to make investment decisions affecting the Fund (such as portfolio managers and Chief Investment Officers) and individuals who provide information and advice to such portfolio managers (such as Securities analysts); and (b) those who assist in executing investment decisions for the Fund (such as traders) and their related staff members.

“Investment Person” or “Investment Personnel” further means any trust over which an Investment Person is a trustee with investment discretion, influence or control, (either for the benefit of the Investment Person or for any other party), any closely-held entity (such as a partnership, limited liability company or corporation) in which an Investment Person holds a Controlling interest and with respect to which he or she has investment influence or control, and any account (including, without limitation, any retirement, pension, deferred compensation or similar account) with respect to which the Access Person has investment discretion, influence or control. Investment Person is intended to include and includes persons deemed to be Supervised Persons pursuant to Rule 204A-1 under the Investments Advisers Act of 1940, as further defined hereunder.

Activity (including, without limitation, trading activity) by an Investment Person’s household members will generally be attributed to the Investment Person. (If emancipated adult children or other independent parties also reside in the household, the Investment Person must either declare that the Investment Person has no discretion, influence or control over the investment decisions of such other party or the Investment Person must report the party as an Investment Person.)

8.23Private Placement

“Private Placement” (or “limited offering”) means an offering that is exempt from registration under the 1933 Act pursuant to Section 4(2) or Section 4(6) of the 1933 Act or pursuant to rule 504, rule 505 or rule 506 under the 1933 Act.

8.24Purchase or Sale

“Purchase or Sale” of a Security or Covered Security includes, among other things, the writing of an option, future or other derivative contract to purchase or sell a Security or Covered Security.

8.25Reportable Fund

“Reportable Fund” means any 1940-Act registered open end investment company for which an Adviser serves as investment adviser as defined in Section 2(a)(2) of the 1940 Act, or any 1940-Act registered investment company whose investment adviser or principal underwriter Controls an Adviser, is Controlled by an Adviser or is under common Control with an Adviser.

8.26SEC

The “SEC” means the Securities and Exchange Commission of the United States, and any successor thereto.

8.27Security

“Security” or "Securities" means any security as defined in Section 2(a)(36) of the 1940 Act or Section 202(a)(18) of the Advisers Act.

8.28Supervised Person

"Supervised Person" means directors, officers and partners of an Adviser (or other persons occupying a similar status or performing similar functions), employees of an Adviser, and any other person who provides advice on behalf of an Adviser and is subject to the Adviser’s supervision and control.

8.29Underwriter

“Underwriter” means any subsidiary of Federated Hermes registered as a broker/dealer with the SEC.

8.30Vendor

"Vendor" means any borrower, lender, tenant, landlord, supplier, service provider (including, without limitation, a service provider to a mutual fund) or other vendor of Federated Hermes (including, without limitation, any Adviser or any other affiliate), any managed account or "wrap fee" program sponsor or turnkey platform provider, or any other third party that has or is seeking a relationship with Federated Hermes (including, without limitation, any Adviser or other affiliate).

 

 

 

Approved by: /s/ John B. Fisher Date: 03/31/17

President of the Advisory Companies

 

 

Approved by: /s/ Stephen Van Meter Date: 04/03/17

Compliance

 

 
 

Addendum

ACCESS PERSONS PROCEDURES

1 Preclearance Approval Using TradeComply

(a)All Access Persons who wish to effect a personal Securities transaction, whether a purchase, sale, or other disposition, must preclear the Covered Security in TradeComply prior to engaging in the transaction. Private Placement securities must be precleared directly through the Compliance Department.
(b)When trading options, the Access Person must preclear the option and the underlying Security before entering into the option contract.
(c)Based on established criteria, TradeComply determines whether the contemplated transaction should be permitted. The primary criterion applied is whether the Covered Security is on the Federated Hermes Equity Restricted List or Open Order lists, or whether the Covered Security was traded by any of the Federated Hermes advised Funds (fund trade information is updated nightly in TradeComply).
(d)Approval is either granted or denied immediately in TradeComply.
(e)If approval is denied, the contemplated personal transaction in that Covered Security is prohibited until prior approval is subsequently granted upon request in TradeComply.
(f)If approval is granted, the Access Person is free to effect the personal transaction in that Covered Security until the end of the next trading day only (subject to revocation as contemplated in Section 3.2 of this Code). In this regard, open orders extending beyond the next trading day (good till cancel) must be resubmitted for approval in TradeComply to comply with this Code.
(g)All trade requests and their dispositions are maintained in TradeComply and reviewed by the Compliance Department in conjunction with other information provided by Access Persons in accordance with this Code.
(h)The Compliance Department reviews all potential violations identified by TradeComply after Fund trades and personal trades have been compared and determines the appropriate action to be taken to resolve each identified violation.

2 Federated Hermes Funds Compliance Review

Access Persons must provide all relevant information concerning investments in Federated Hermes funds held in accounts with financial institutions or intermediaries (banks, broker-dealers, etc.) to the Compliance Department in the same manner and subject to the same timing requirements as individual Securities.

3 Non-U.S. Based Federated Hermes Access Persons

(a)Access Persons who are not located in the U.S. must request preclearance approval from the Compliance Department via email. Access Persons must provide specific trade details including the issuer name, anticipated date of transaction, full name of Security (i.e., title), description (i.e., type), CUSIP or SEDOL number or exchange ticker symbol, number of shares and principal amount, interest rate and maturity date (if applicable) and the type of transaction (purchase or sale). The Compliance Department requests preclearance for the transaction through TradeComply during normal business hours on the day the request is received. The Compliance Department notifies the Access Person via email of the results of the preclearance request.

If the trade request is approved, the Access Person must execute the trade no later than the close of business on the business day following the date of the request (subject to revocation as contemplated in Section 3.2 of this Code).

4 Non-Federated Hermes Access Persons

(a)Transaction and holdings information of non-Federated Hermes officers of Federated Hermes and/or proprietary funds shall be reviewed on a quarterly basis to determine whether any patterns of conflict are exhibited with any Funds for which Federated Hermes has access to Fund transaction information, and
(b)Data relating to the trades of all personnel designated as Access Persons of a Fund for which Federated Hermes does not have access to Fund transaction information will be submitted to Compliance Department or other appropriate personnel of the Fund’s adviser for review on a quarterly basis.
 
 

COMPLIANCE DEPARTMENT PROCEDURES

1Preclearance
(a)Documentation of valid preclearance approval, including a statement that the Access Person was not aware of any consideration of a Security by research analysts or Fund portfolio managers for a recommendation, an actual Fund trade or an anticipated transaction, shall be conclusive for purposes of reviewing a personal transaction, unless additional facts or a preponderance of circumstances suggest otherwise. This conclusive presumption does not apply to research analysts covering or recommending a Covered Security involved in a Fund trade or portfolio managers of a Fund making a trade in that Security.
(b)Before approving a preclearance request for a Private Placement, submitted by an Access Person, the Compliance Department shall inquire of the appropriate portfolio manager(s) and head trader(s) as to whether an order is pending or expected to be entered for the same Security. In cases where an Investment Person has submitted the request for preclearance, the Compliance Department shall also notify the Chief Investment Officer to whom the Investment Person reports. The Compliance Department will notify the Access Person as to whether or not the investment has been precleared.

2 Initial Reporting Process

(a)A member of the Compliance Department meets with each new Access Person and reviews this Code, the Insider Trading Policy and the procedures for preclearing personal Securities transactions through TradeComply.
(b)The Access Person is required to complete the “Certification and Acknowledgment Form” to acknowledge his/her understanding of this Codeand return it to the designated Compliance Assistant within ten (10) calendar days.
(c)In addition, the Access Person is required to complete the “Personal Security Portfolio Forms” which includes information detailed in Section 2.1 of the Code, and:

NOTE: Information provided by the Access Person must be current as of a date no more than 45 days before the report is submitted. Failure to provide that information within 10 calendar days is deemed a violation of the Code and SEC Rules.

(d)Separate forms must be completed for the Access Person and all household members as defined in Section 8.4 of this Code. The signed form(s) must be returned to the Compliance Department within ten (10) calendar days.
(e)A member of the Compliance Department inputs current portfolio holdings information into TradeComply as “initial” holdings.
(f)The Compliance Department notifies each broker, dealer, bank or other financial institution that duplicate confirmations and statements for the Access Person and household members, if applicable, must be sent to the Chief Compliance Officer, effective immediately. The Compliance Department also will obtain reports on accounts held directly with Federated Hermes’ Transfer Agent and 401k Plan Administrator.

3 Quarterly Reporting Process

(a)On the first business day after each calendar quarter end, the Compliance Assistant sends an e-mail to each Access Person giving step-by-step instructions on how to complete the quarterly reporting requirements using TradeComply.
(b)By the date specified by the Compliance Department (but no later than thirty (30) calendar days of the quarter end), the Access Person is required to:
(i)review for accuracy all Covered Security transactions recorded during the previous calendar quarter in all personal and household member accounts;
(ii)review all open account information, including names of broker-dealers, banks and other financial institutions, addresses and account numbers;
(iii)notify the Compliance Department of any new accounts established with broker-dealers, banks or other financial institutions during the quarter and the date the account was established;
(iv)resolve any discrepancies with the Compliance Department;
(v)record an electronic signature and date on TradeComply.

Information provided by the Access Person must be current as of a date no more than 45 days before the report is submitted. Failure to provide that information within 10 calendar days is deemed a violation of the Code and SEC Rules.

The information required shall include the information detailed in Section 2.2 of the Code.

An Access Person need not submit a quarterly Securities transactions report to the extent that the report would duplicate information contained in broker trade confirmations or account statements delivered to Federated Hermes so long as such trade confirmations or account statements are received by the Compliance Department by the date specified by the Compliance Department (but in no later than 25 days after the end of the applicable calendar quarter).

(c)Chief Compliance Officer Stephen Van Meter reviews potential violations of the Code by any Access Person periodically during the calendar quarter.
(d)The Compliance Department issues memos to each Access Person involved if any personal transactions executed during the quarter appear to be violations of this Code.
(e)Based on the facts and the Access Person’s response to the memo, the Chief Compliance Officer may impose or recommend any of the sanctions identified in Section 7 of this Code.
 
 

 

4 Annual Reporting Process

(a)At least annually, the Compliance Department requires that each Access Person read this Code and certify and acknowledge his/her understanding of this Code and its requirements.
(b)In addition to the quarterly reporting requirements, on an annual basis, the Compliance Department requires each Access Person to confirm and certify that the records of all Covered Securities holdings in Trade Comply are complete and accurate.

This re-certification is required to be completed by the date specified by the Compliance Department (but in no event later than thirty (30) calendar days after a request) from the Compliance Department. The Compliance Department monitors compliance with this requirement through the electronic signatures on TradeComply.

5 Reportable Funds Transactions

On a quarterly basis, the Compliance Department will request and review a report of Federated Hermes Fund Securities transactions by Access Persons and Investment Personnel from both the Federated Hermes Transfer Agent and the 401k Plan Administrator and from other accounts reported by Access Persons and Investment Personnel. After reviewing these transactions, the Compliance Department will discuss any issues identified with the Access Person and management and take appropriate action, as provided by the Code.

6 Blackout Periods – Fund Trades

A transaction in a Covered Security by a Fund shall trigger a blackout period as specified above for Access Persons and Investment Persons, (other than the Portfolio Managers, Traders and Research Analysts serving a Fund in which such purchase or sale occurs), only if the aggregate of open orders and executed purchases and sales in the security within the Federated Hermes complex is equal to or exceeds a specified threshold on each trading day. That threshold shall be defined by asset type, as follows:

Covered Security Threshold equal to or greater than:

Equity1% of the average daily volume measured over the preceding 20 trading days.

Fixed Income

Investment Grade

Corporate Obligation $250,000

State or Foreign Obligation $250,000

Municipal Obligation $250,000

 
 

 

High Yield

Corporate Obligation $100,000

State or Foreign Obligation $100,000

Municipal Obligation $100,000

An open order or executed trade in any equity Covered Security for which an average daily volume cannot be determined shall trigger a blackout period. Any trades in any fixed income Covered Security not specified above shall trigger a blackout period.

7 Reporting to the Board of Directors

(a)Each quarter, the Compliance Department will provide reports of any violations of this Code to Senior Management and the Board of Directors of the Federated Hermes Funds. Any patterns or trends noted and any difficulties in administration of this Code shall be reported to Senior Management and, to the Board Directors of the Federated Hermes Funds, at least annually.
(b)The Compliance Department will also report any difficulties in administration of this Code and any trends or patterns of personal Securities trading which are deemed by the Compliance Department to be violations of this Code.
(c)The Compliance Department provides the Board with the job title of the Access Person; the type of violation; the details of the transaction(s); and the types of sanctions imposed, if any.
(d)At least annually, the Compliance Department shall certify that the Fund, investment adviser or principal underwriter, as applicable, has adopted procedures reasonably necessary to prevent Access Persons from violating this Code.

8 Record Keeping Requirements

The Compliance Department maintains the following books and records in TradeComply for a period equal to (a) no less than six (6) calendar years or (b) any longer period that may be required under applicable law:

(a)a copy of this Code (current and for the past five years)
(b)a record of any violation of this Code and any action taken as a result of the violation;
(c)a record of all written acknowledgments of access persons (current and for the past five years).
(d)a record of each report made by an Access Person, including initial, quarterly and annual reporting (and including any information on a broker trade confirmation or account statement that was submitted in lieu of such reports);
(e)a record of all Access Persons (current and for the past five years);
(f)a record of any decision, and the reasons supporting the decision, to approve the acquisition of Securities by Access Persons in an Initial Public Offering (IPO) (to the extent approved as satisfying the limited exceptions in Sections 5.2(a) or (b) to the general prohibition) or Private Placement;
(g)a record of persons responsible for reviewing reports; and
(h)a copy of any supporting documentation used in making decisions regarding action taken by the Compliance Department with respect to personal Securities trading.

Such records will be kept in such locations, and for such periods, as required under the Advisers Act and the 1940 Act.

 

 

1 The SEC has interpreted "high quality short-term debt instruments" to mean any instrument having a maturity at issuance of less than 366 days and which is rated in one of the highest two rating categories by a Nationally Recognized Statistical Rating Organization, or which is unrated but is of comparable quality. Personal Investment Activities of Investment Company Personnel and Codes of Ethics of Investment Companies and Their Investment Advisers and Principal Underwriters, Investment Company Act Release No. 21341 (Sept. 8, 1995) [60 FR 47844 (Sept. 14, 1995)] (proposing amendments to rule 17j-1) at note 66.This definition is repeated in the footnotes to the adopting and proposing releases for the Adviser's Code of Ethics requirement under Rule 204A-1. 

 

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