-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, aCUObHq9oPD4J5cMuagyeG7R1/SuvanSj962tUJeGX4eMN3+xH+2srMd4M++TYvx OrqBdszaCeydVwBG8UQoAw== 0000067578-94-000006.txt : 19940928 0000067578-94-000006.hdr.sgml : 19940928 ACCESSION NUMBER: 0000067578-94-000006 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19940927 EFFECTIVENESS DATE: 19940927 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MONEY MARKET TRUST /PA CENTRAL INDEX KEY: 0000067578 STANDARD INDUSTRIAL CLASSIFICATION: IRS NUMBER: 251328013 FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-02550 FILM NUMBER: 94550488 BUSINESS ADDRESS: STREET 1: FEDERATED INVESTORS TWR CITY: PITTSBURGH STATE: PA ZIP: 15222 BUSINESS PHONE: 4122881412 485BPOS 1 1933 Act File No. 2-62285 1940 Act File No. 811-2550 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form N-1A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Pre-Effective Amendment No. Post-Effective Amendment No. 35 X and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X Amendment No. 25 X MONEY MARKET TRUST (Exact Name of Registrant as Specified in Charter) Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779 (Address of Principal Executive Offices) (412) 288-1900 (Registrant's Telephone Number) John W. McGonigle, Esquire, Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779 (Name and Address of Agent for Service) It is proposed that this filing will become effective: immediately upon filing pursuant to paragraph (b) X on September 28, 1994 pursuant to paragraph (b) 60 days after filing pursuant to paragraph (a) on pursuant to paragraph (a) of Rule 485. Registrant has filed with the Securities and Exchange Commission a declaration pursuant to Rule 24f-2 under the Investment Company Act of 1940, and: x filed the Notice required by that Rule on September 15, 1994; or intends to file the Notice required by that Rule on or about ____________; or during the most recent fiscal year did not sell any securities pursuant to Rule 24f-2 under the Investment Company Act of 1940, and, pursuant to Rule 24f-2(b)(2), need not file the Notice. Copies to: Thomas J. Donnelly, Esquire Charles H. Morin, Esquire Houston, Houston & Donnelly Dickstein, Shapiro & Morin, L.L.P. 2510 Centre City Tower 2101 L Street, N.W. 650 Smithfield Street Washington, D.C. 20037 Pittsburgh, Pennsylvania 15222 CROSS-REFERENCE SHEET This Amendment to the Registration Statement of Money Market Trust is comprised of the following: PART A. INFORMATION REQUIRED IN A PROSPECTUS. Prospectus Heading (Rule 404(c) Cross Reference) Item 1. Cover Page Cover Page. Item 2. Synopsis Summary of Trust Expenses. Item 3. Condensed Financial Information Financial Highlights. Item 4. General Description of Registrant General Information; Investment Information; Investment Objective; Investment Policies; Investment Limitations; Regulatory Compliance; Performance Information. Item 5. Management of the Fund Trust Information; Management of the Trust; Distribution of Shares; Administration of the Trust. Item 6. Capital Stock and Other Securities Dividends; Capital Gains; Shareholder Information; Voting Rights; Massachusetts Partnership Law; Tax Information; Federal Income Tax; Pennsylvania Corporate and Personal Property Taxes. Item 7. Purchase of Securities Being Offered Net Asset Value; Investing in the Trust; Share Purchases; Minimum Investment Required; Subaccounting Services; Certificates and Confirmations. Item 8. Redemption or Repurchase Redeeming Shares; By Mail; Telephone Redemption; Accounts With Low Balances. Item 9. Pending Legal Proceedings None. PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION. Item 10. Cover Page Cover Page. Item 11. Table of Contents Table of Contents. Item 12. General Information and History Not Applicable. Item 13. Investment Objectives and Policies Investment Policies; Investment Limitations. Item 14. Management of the Fund Money Market Trust Management. Item 15. Control Persons and Principal Holders of Securities Trust Ownership. Item 16. Investment Advisory and Other Services Investment Advisory Services; Trust Administration; Shareholder Services Plan. Item 17. Brokerage Allocation Brokerage Transactions. Item 18. Capital Stock and Other Securities Not Applicable. Item 19. Purchase, Redemption and Pricing of Securities Being Offered Determining Net Asset Value; Redemption in Kind. Item 20. Tax Status The Trust's Tax Status. Item 21. Underwriters Not Applicable. Item 22. Calculation of Performance Data Performance Information; Yield; Effective Yield; Total Return; Performance Comparisons. Item 23. Financial Statements Filed in Part A. MONEY MARKET TRUST PROSPECTUS The shares of Money Market Trust (the "Trust") offered by this prospectus represent interests in an open-end, diversified management investment company (a mutual fund), investing in short-term money market securities to achieve stability of principal and current income consistent with stability of principal. 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. INVESTMENT IN THESE SHARES INVOLVES INVESTMENT RISKS INCLUDING POSSIBLE LOSS OF PRINCIPAL. THE TRUST ATTEMPTS TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE; THERE CAN BE NO ASSURANCE THAT THE TRUST WILL BE ABLE TO DO SO. This prospectus contains the information you should read and know before you invest in the Trust. Keep this prospectus for future reference. The Trust has also filed a Statement of Additional Information dated September 30, 1994 with the Securities and Exchange Commission. The information contained in the Statement of Additional Information is incorporated by reference into this prospectus. You may request a copy of the Statement of Additional Information free of charge by calling 1-800-235-4669. To obtain other information, or make inquiries about the Trust, contact the Trust at the address listed in the back of this prospectus. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. Prospectus dated September 30, 1994 TABLE OF CONTENTS - -------------------------------------------------------------------------------- SUMMARY OF TRUST EXPENSES 1 - ------------------------------------------------------ FINANCIAL HIGHLIGHTS 2 - ------------------------------------------------------ GENERAL INFORMATION 3 - ------------------------------------------------------ INVESTMENT INFORMATION 3 - ------------------------------------------------------ Investment Objective 3 Investment Policies 3 Investment Limitations 6 Regulatory Compliance 6 TRUST INFORMATION 6 - ------------------------------------------------------ Management of the Trust 6 Distribution of Shares 7 Administration of the Trust 7 NET ASSET VALUE 8 - ------------------------------------------------------ INVESTING IN THE TRUST 8 - ------------------------------------------------------ Share Purchases 8 Minimum Investment Required 9 Subaccounting Services 9 Certificates and Confirmations 9 Dividends 10 Capital Gains 10 REDEEMING SHARES 10 - ------------------------------------------------------ By Mail 10 Telephone Redemption 11 Accounts with Low Balances 11 SHAREHOLDER INFORMATION 11 - ------------------------------------------------------ Voting Rights 11 Massachusetts Partnership Law 11 TAX INFORMATION 12 - ------------------------------------------------------ Federal Income Tax 12 Pennsylvania Corporate and Personal Property Taxes 12 PERFORMANCE INFORMATION 12 - ------------------------------------------------------ FINANCIAL STATEMENTS 14 - ------------------------------------------------------ INDEPENDENT AUDITORS' REPORT 23 - ------------------------------------------------------ ADDRESSES 24 - ------------------------------------------------------ SUMMARY OF TRUST EXPENSES - -------------------------------------------------------------------------------- SHAREHOLDER TRANSACTION EXPENSES Maximum Sales Load Imposed on Purchases (as a percentage of offering price)......................................................... None Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of offering price)......................................................... None Contingent Deferred Sales Charge (as a percentage of original purchase price or redemption proceeds, as applicable).................................................................... None Redemption Fees (as a percentage of amount redeemed, if applicable)........................... None Exchange Fee.................................................................................. None ANNUAL TRUST OPERATING EXPENSES (As a percentage of average net assets) Management Fee (after waiver) (1)............................................................. 0.25% 12b-1 Fee..................................................................................... None Total Other Expenses.......................................................................... 0.21% Shareholder Services Fee (2)................................................................ 0.05% Total Trust Operating Expenses (3).................................................. 0.46%
(1) The Management Fee has been reduced to reflect the waiver of a portion of the Management Fee. The maximum Management Fee is 0.40%. (2) The maximum Shareholder Services Fee is 0.25%. (3) The Total Trust Operating Expenses in the table above are based on expenses expected during the fiscal year ending July 31, 1995. The Total Trust Operating Expenses were 0.46% for the fiscal year ended July 31, 1994, and would have been 0.58% absent the waiver of a portion of the Management Fee. THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF THE TRUST WILL BEAR, EITHER DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE VARIOUS COSTS AND EXPENSES, SEE "TRUST INFORMATION." Wire-transferred redemptions of less than $5,000 may be subject to additional fees.
EXAMPLE 1 year 3 years 5 years 10 years You would pay the following expenses on a $1,000 investment, assuming (1) 5% annual return and (2) redemption at the end of each time period............................................................... $5 $15 $26 $58
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. MONEY MARKET TRUST FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD) Reference is made to the Independent Auditors' Report on page 23.
YEAR ENDED JULY 31, 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 - ----------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 - ----------------- INCOME FROM INVESTMENT OPERATIONS - ----------------- Net investment income 0.03 0.03 0.04 0.07 0.08 0.09 0.07 0.06 0.07 0.09 - ----------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- LESS DISTRIBUTIONS - ----------------- Dividends to shareholders from net investment income (0.03) (0.03) (0.04) (0.07) (0.08) (0.09) (0.07) (0.06) (0.07) (0.09) - ----------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 - ----------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- TOTAL RETURN* 3.18% 3.00% 4.49% 7.05% 8.43% 8.93% 6.94% 5.98% 7.42% 9.32% - ----------------- RATIOS TO AVERAGE NET ASSETS - ----------------- Expenses 0.46% 0.46% 0.46% 0.46% 0.46% 0.45% 0.45% 0.45% 0.45% 0.45% - ----------------- Net investment income 3.11% 2.98% 4.40% 6.88% 8.14% 8.58% 6.72% 5.80% 7.17% 8.92% - ----------------- SUPPLEMENTAL DATA - ----------------- Net assets, end of period (000 omitted) $539,983 $712,577 $943,893 $956,538 $1,189,023 $1,649,683 $1,685,914 $1,747,618 $1,904,972 $1,948,005 - -----------------
* Based on net asset value, which does not reflect the sales load or contingent deferred sales charge, if applicable. (See Notes which are an integral part of the Financial Statements) GENERAL INFORMATION - -------------------------------------------------------------------------------- The Trust was established as a Massachusetts business trust under a Declaration of Trust dated July 24, 1978. The Trust is designed for institutional investors such as banks, fiduciaries, custodians of public funds, and similar institutional investors as a convenient means of accumulating an interest in a professionally managed, diversified portfolio investing in short-term money market securities. A minimum initial investment of $25,000 over a 90-day period is required. The Trust attempts to stabilize the value of a share at $1.00. Shares are currently sold and redeemed at that price. INVESTMENT INFORMATION - -------------------------------------------------------------------------------- INVESTMENT OBJECTIVE The investment objective of the Trust is stability of principal and current income consistent with stability of principal. This investment objective cannot be changed without shareholder approval. While there is no assurance that the Trust will achieve its investment objective, it endeavors to do so by following the investment policies described in this prospectus. The investment policies and limitations set forth below cannot be changed by the Board of Trustees without shareholder approval. INVESTMENT POLICIES The Trust pursues its investment objective by investing in a portfolio of money market securities maturing in one year or less. As a matter of operating policy, which may be changed without shareholder approval, the Trust will limit the average maturity of its portfolio to 90 days or less, in order to meet regulatory requirements. ACCEPTABLE INVESTMENTS. The Trust invests in high quality money market instruments that are either rated in the highest short-term rating category by one or more nationally recognized statistical rating organizations ("NRSROs") or of comparable quality to securities having such ratings. Examples of these instruments include, but are not limited to: The Trust may attempt to increase yield by trading portfolio securities to take advantage of short-term market variations. domestic issues of corporate debt obligations, including variable rate demand notes; commercial paper; certificates of deposit, demand and time deposits, bankers' acceptances and other instruments of domestic banks and other deposit institutions ("Bank Instruments"); short-term credit facilities; asset-backed securities; obligations issued or guaranteed as to payment of principal and interest by the U.S. Government or one of its agencies or instrumentalities ("Government Securities"); and other money market instruments. The Trust invests only in instruments denominated and payable in U.S. dollars. VARIABLE RATE DEMAND NOTES. Variable rate demand notes are long-term debt instruments that have variable or floating interest rates and provide the Trust with the right to tender the security for repurchase at its stated principal amount plus accrued interest. Such securities typically bear interest at a rate that is intended to cause the securities to trade at par. The interest rate may float or be adjusted at regular intervals (ranging from daily to annually), and is normally based on a published interest rate or interest rate index. Most variable rate demand notes allow the Trust to demand the repurchase of the security on not more than seven days prior notice. Other notes only permit the Trust to tender the security at the time of each interest rate adjustment or at other fixed intervals. See "Demand Features." The Trust treats variable rate demand notes as maturing on the later of the date of the next interest rate adjustment or the date on which the Trust may next tender the security for repurchase. BANK INSTRUMENTS. The Trust only invests in Bank Instruments either issued by an institution having capital, surplus and undivided profits over $100 million, or insured by the Bank Insurance Fund ("BIF") or the Savings Association Insurance Fund ("SAIF"). The Trust will treat securities credit enhanced with a bank's letter of credit as Bank Instruments. ASSET-BACKED SECURITIES. Asset-backed securities are securities issued by special purpose entities whose primary assets consist of a pool of loans or accounts receivable. The securities may take the form of beneficial interests in special purpose trusts, limited partnership interests, or commercial paper or other debt securities issued by a special purpose corporation. Although the securities often have some form of credit or liquidity enhancement, payments on the securities depend predominantly upon collections of the loans and receivables held by the issuer. SHORT-TERM CREDIT FACILITIES. The Trust may enter into, or acquire participations in, short-term borrowing arrangements with corporations, consisting of either a short-term revolving credit facility or a master note agreement payable upon demand. Under these arrangements, the borrower may reborrow funds during the term of the facility. The Trust treats any commitments to provide such advances as a standby commitment to purchase the borrower's notes. RATINGS. An NRSRO's highest rating category is determined without regard for sub-categories and gradations. For example, securities rated A-1 or A-1+ by Standard & Poor's Ratings Group ("S&P"), Prime-1 by Moody's Investors Service, Inc. ("Moody's"), or F-1 (+ or -) by Fitch Investors Service, Inc. ("Fitch") are all considered rated in the highest short-term rating category. The Trust will follow applicable regulations in determining whether a security rated by more than one NRSRO can be treated as being in the highest short-term rating category; currently, such securities must be rated by two NRSROs in their highest rating category. See "Regulatory Compliance." REPURCHASE AGREEMENTS. Certain securities in which the Trust invests may be purchased pursuant to repurchase agreements. Repurchase agreements are arrangements in which banks, brokers/dealers, and other recognized financial institutions sell U.S. government securities or certificates of deposit to the Trust and agree at the time of sale to repurchase them at a mutually agreed upon time and price within one year from the date of acquisition. To the extent that the seller does not repurchase the securities from the Trust, the Trust could receive less than the repurchase price on any sale of such securities. CREDIT ENHANCEMENT. Certain of the Trust's acceptable investments may be credit enhanced by a guaranty, letter of credit, or insurance. The Trust typically evaluates the credit quality and ratings of credit enhanced securities based upon the financial condition and ratings of the party providing the credit enhancement (the "credit enhancer'), rather than the issuer. Generally, the Trust will not treat credit enhanced securities as having been issued by the credit enhancer for diversification purposes. However, under certain circumstances applicable regulations may require the Trust to treat the securities as having been issued by both the issuer and the credit enhancer. The bankruptcy, receivership, or default of the credit enhancer will adversely affect the quality and marketability of the underlying security. DEMAND FEATURES. The Trust may acquire securities that are subject to puts and standby commitments ("demand features") to purchase the securities at their principal amount (usually with accrued interest) within a fixed period (usually seven days) following a demand by the Trust. The demand feature may be issued by the issuer of the underlying securities, a dealer in the securities, or by another third party, and may not be transferred separately from the underlying security. The Trust uses these arrangements to provide the Trust with liquidity and not to protect against changes in the market value of the underlying securities. The bankruptcy, receivership, or default by the issuer of the demand feature, or a default on the underlying security or other event that terminates the demand feature before its exercise, will adversely affect the liquidity of the underlying security. Demand features that are exercisable even after a payment default on the underlying security may be treated as a form of credit enhancement. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Trust may purchase U.S. government securities on a when-issued or delayed delivery basis. These transactions are arrangements in which the Trust purchases securities with payment and delivery scheduled for a future time. The seller's failure to complete these transactions may cause the Trust to miss a price or yield considered to be advantageous. Settlement dates may be a month or more after entering into these transactions, and the market values of the securities purchased may vary from the purchase prices. Accordingly, the Trust may pay more/less than the market value of the securities on the settlement date. The Trust may dispose of a commitment prior to settlement if the adviser deems it appropriate to do so. In addition, the Trust may enter into transactions to sell its purchase commitments to third parties at current market values and simultaneously acquire other commitments to purchase similar securities at later dates. The Trust may realize short-term profits or losses upon the sale of such commitments. RESTRICTED AND ILLIQUID SECURITIES. The Trust may invest in restricted securities. Restricted securities are any securities in which the Trust may otherwise invest pursuant to its investment objective and policies but which are subject to restrictions on resale under federal securities law. However, the Trust will limit investments in illiquid securities, including restricted securities (except for Section 4(2) commercial paper), non-negotiable time deposits, and repurchase agreements providing for settlement in more than seven days after notice, to 10% of its net assets. The Trust may invest in commercial paper issued in reliance on the exemption from registration afforded by Section 4(2) of the Securities Act of 1933. Section 4(2) commercial paper is restricted as to disposition under federal securities law, and is generally sold to institutional investors, such as the Trust, who agree that they are purchasing the paper for investment purposes and not with a view to public distribution. Any resale by the purchaser must be in an exempt transaction. Section 4(2) commercial paper is normally resold to other institutional investors like the Trust through or with the assistance of the issuer or investment dealers who make a market in Section 4(2) commercial paper, thus providing liquidity. The Trust believes that Section 4(2) commercial paper is quite liquid. The Trust intends, therefore, to treat Section 4(2) commercial paper as liquid and not subject to the investment limitation applicable to illiquid securities. In addition, because Section 4(2) commercial paper is liquid, the Trust intends to not subject such paper to the limitation applicable to restricted securities. INVESTMENT LIMITATIONS The Trust will not borrow money or pledge securities except, under certain circumstances, the Trust may borrow up to one-third of the value of its total assets and pledge assets to secure such borrowings. This investment limitation cannot be changed without shareholder approval. REGULATORY COMPLIANCE The Trust may follow non-fundamental operational policies that are more restrictive than its fundamental investment limitations, as set forth in this prospectus and its Statement of Additional Information, in order to comply with applicable laws and regulations, including the provisions of and regulations under the Investment Company Act of 1940, as amended. In particular, the Trust will comply with the various requirements of Rule 2a-7 which regulates money market mutual funds. For example, with limited exceptions, Rule 2a-7 prohibits the investment of more than 5% of the Fund's total assets in the securities of any one issuer, although the Fund's investment limitation only requires such 5% diversification with respect to 75% of its assets. The Trust will invest more than 5% of its assets in any one issuer only under the circumstances permitted by Rule 2a-7. The Trust will also determine the effective maturity of its investments, as well as its ability to consider a security as having received the requisite short-term ratings by NRSROs, according to Rule 2a-7. The Trust may change these operational policies to reflect changes in the laws and regulations without the approval of its shareholders. TRUST INFORMATION - -------------------------------------------------------------------------------- MANAGEMENT OF THE TRUST Board of Trustees. The Trust is managed by a Board of Trustees. The Trustees are responsible for managing the Trust's business affairs and for exercising all the Trust's powers except those reserved for the shareholders. An Executive Committee of the Board of Trustees handles the Board's responsibilities between meetings of the Board. INVESTMENT ADVISER. Investment decisions for the Trust are made by Federated Research, the Trust's investment adviser, subject to direction by the Trustees. The adviser continually conducts investment research and supervision for the Trust and is responsible for the purchase and sale of portfolio instruments. ADVISORY FEES. The adviser receives an annual investment advisory fee equal to 0.40 of 1% of the Trust's average daily net assets. Under the investment advisory contract, the adviser will waive the amount, limited to the amount of the advisory fee, by which the Trust's aggregate annual operating expenses, including its investment advisory fee but excluding interest, taxes, brokerage commissions, expenses of registering and qualifying the Trust and its shares under federal and state laws and regulations, expenses of withholding taxes, and extraordinary expenses, exceed 0.45 of 1% of its average daily net assets. This does not include reimbursement to the Trust of any expenses incurred by shareholders who use the transfer agent's subaccounting facilities. The adviser has also undertaken to reimburse the Trust for operating expenses in excess of limitations established by certain states. ADVISER'S BACKGROUND. Federated Research, a Delaware business trust organized on April 11, 1989, is a registered investment adviser under the Investment Advisers Act of 1940. It is a subsidiary of Federated Investors. All of the Class A (voting) shares of Federated Investors are owned by a trust, the trustees of which are John F. Donahue, Chairman and Trustee of Federated Investors, Mr. Donahue's wife, and Mr. Donahue's son, J. Christopher Donahue, who is President and Trustee of Federated Investors. Federated Research and other subsidiaries of Federated Investors serve as investment advisers to a number of investment companies and private accounts. Certain other subsidiaries also provide administrative services to a number of investment companies. Total assets under management or administration by these and other subsidiaries of Federated Investors are approximately $70 billion. Federated Investors, which was founded in 1956 as Federated Investors, Inc., develops and manages mutual funds primarily for the financial industry. Federated Investors' track record of competitive performance and its disciplined, risk averse investment philosophy serve approximately 3,500 client institutions nationwide. Through these same client institutions, individual shareholders also have access to this same level of investment expertise. DISTRIBUTION OF SHARES Federated Securities Corp. is the principal distributor for shares of the Trust. It is a Pennsylvania corporation organized on November 14, 1969, and is the principal distributor for a number of investment companies. Federated Securities Corp. is a subsidiary of Federated Investors. SHAREHOLDER SERVICES PLAN. The Trust has adopted a Shareholder Services Plan under which it will pay Federated Shareholder Services, an affiliate of Federated Investors, an amount not exceeding 0.25 of 1% of the average daily net asset value of the Trust to provide personal services and/or maintenance of shareholder accounts to the Trust and its shareholders. Federated Shareholder Services may, from time to time and for such periods as it deems appropriate, voluntarily reduce the amount stated above. Federated Shareholder Services may elect to pay financial institutions fees based upon shares owned by their clients or customers for services provided to those clients and customers. The schedules of such fees and the basis upon which such fees will be paid will be determined from time to time by Federated Shareholder Services. ADMINISTRATION OF THE TRUST ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of Federated Investors, provides administrative personnel and services (including certain legal and accounting services) necessary to operate the Trust. Federated Administrative Services provides these at an annual rate as specified below:
MAXIMUM FEE AVERAGE AGGREGATE DAILY NET ASSETS .15 of 1% on the first $250 million .125 of 1% on the next $250 million .10 of 1% on the next $250 million .075 of 1% on assets in excess of $750 million
Average aggregate daily net assets include those of all mutual funds advised by affiliates of Federated Investors. Federated Administrative Services may choose voluntarily to waive a portion of its fee. CUSTODIAN. State Street Bank and Trust Company, Boston, MA is custodian for the securities and cash of the Trust. TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated Services Company, Pittsburgh, PA is transfer agent for the shares of, and dividend disbursing agent for, the Trust. LEGAL COUNSEL. Legal counsel is provided by Houston, Houston & Donnelly, Pittsburgh, PA and Dickstein, Shapiro & Morin, L.L.P., Washington, D.C. INDEPENDENT AUDITORS. The independent Auditors for the Trust are Deloitte & Touche LLP, Pittsburgh, PA. NET ASSET VALUE - -------------------------------------------------------------------------------- The Trust attempts to stabilize the net asset value of its shares at $1.00 by valuing the portfolio securities using the amortized cost method. The net asset value per share is determined by subtracting total liabilities from total assets and dividing the remainder by the number of shares outstanding. The Trust cannot guarantee that its net asset value will always remain at $1.00 per share. The net asset value is determined at 12:00 noon, 3:00 p.m., and 4:00 p.m. (Eastern time) Monday through Friday except on: (i) days on which there are not sufficient changes in the value of the Trust's portfolio securities that its net asset value might be materially affected; (ii) days during which no shares are tendered for redemption and no orders to purchase shares are received; or (iii) the following holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. INVESTING IN THE TRUST - -------------------------------------------------------------------------------- SHARE PURCHASES Shares are sold at their net asset value, without a sales charge, next determined after an order is received, on days on which the New York Stock Exchange and the Federal Reserve Wire System are open for business. Shares may be purchased either by wire or mail. The Trust reserves the right to reject any purchase request. To make a purchase, open an account by calling Federated Securities Corp. Information needed to establish the account will be taken by telephone. BY WIRE. To purchase by Federal Reserve wire, call the Trust before 3:00 p.m. (Eastern time) to place an order. The order is considered received immediately. Payment by federal funds must be received before 3:00 p.m. (Eastern time) that day. Federal funds should be wired as follows: Federated Services Company, c/o State Street Bank and Trust Company, Boston, Massachusetts; Attention: EDGEWIRE; For Credit to: Money Market Trust , Fund Number (this number can be found on the account statement or by contacting the Trust); Group Number or Order Number; Nominee or Institution Name; and ABA Number 011000028. BY MAIL. To purchase by mail, send a check made payable to Money Market Trust to: Federated Services Company, P.O. Box 8602, Boston, MA 02266-8602. Orders by mail are considered received when payment by check is converted into federal funds. This is normally the next business day after the check is received. AUTOMATIC INVESTMENTS. Investors may establish accounts with their financial institutions to have cash accumulations automatically invested in the Trust. The investments may be made on predetermined dates or when the investor's account reaches a certain level. Participating financial institutions are responsible for prompt transmission of orders relating to the program, and they may charge for their services. Investors should read this prospectus along with the financial institution's agreement or literature describing these services and fees. MINIMUM INVESTMENT REQUIRED The minimum initial investment is $25,000. However, an account may be opened with a smaller amount as long as the minimum is reached within 90 days. Minimum investments will be calculated by combining all accounts maintained with the Trust. Financial institutions may impose different minimum investment requirements on their customers. SUBACCOUNTING SERVICES Financial institutions are encouraged to open single master accounts. However, certain financial institutions may wish to use the transfer agent's subaccounting system to minimize their internal recordkeeping requirements. The transfer agent charges a fee based on the level of subaccounting services rendered. Financial institutions may charge or pass through subaccounting fees as part of or in addition to normal trust or agency account fees. They may also charge fees for other services provided which may be related to the ownership of Trust shares. This prospectus should, therefore, be read together with any agreement between the customer and the financial institution with regard to the services provided, the fees charged for those services and any restrictions and limitations imposed. CERTIFICATES AND CONFIRMATIONS As transfer agent for the Trust, Federated Services Company maintains a share account for each shareholder. Share certificates are not issued unless requested by contacting the Trust or Federated Services Company in writing. Monthly confirmations are sent to report transactions such as all purchases and redemptions as well as dividends paid during the month. DIVIDENDS Dividends are declared daily and paid monthly. Dividends are automatically reinvested on payment dates in additional shares of the Trust unless cash payments are requested by writing to the Trust. Shares purchased by wire before 3:00 p.m. (Eastern time) begin earning dividends that day. Shares purchased by check begin earning dividends the day after the check is converted into federal funds. CAPITAL GAINS The Trust does not expect to realize any capital gains or losses. If capital gains or losses were to occur, they could result in an increase or decrease in dividends. The Trust will distribute in cash or additional shares any realized net long-term capital gains at least once every 12 months. REDEEMING SHARES - -------------------------------------------------------------------------------- Shares are redeemed at their net asset value next determined after the transfer agent receives the redemption request. Redemptions will be made on days on which the Trust computes its net asset value. Redemption requests must be received in proper form and can be made as described below. BY MAIL Shares may be redeemed by sending a written request to: Money Market Trust, P.O. Box 8602, Boston, MA 02266-8602. The written request should state: name of the Trust; shareholder's name; the account number; and the share or dollar amount requested. Sign the request exactly as the shares are registered. Shareholders should call the Trust for assistance in redeeming by mail. If share certificates have been issued, they must be properly endorsed and should be sent by registered or certified mail with the written request. Shareholders requesting a redemption of $50,000 or more, a redemption of any amount to be sent to an address other than that on record with the Trust, or a redemption payable other than to the shareholder of record must have their signatures guaranteed by: a trust company or commercial bank whose deposits are insured by the Bank Insurance Fund, which is administered by the Federal Deposit Insurance Corporation ("FDIC"); a member firm of the New York, American, Boston, Midwest, or Pacific Stock Exchanges; a savings bank or savings and loan association whose deposits are insured by the Savings Association Insurance Fund, which is administered by the FDIC; or any other "eligible guarantor institution," as defined in the Securities Exchange Act of 1934. The Trust does not accept signatures guaranteed by a notary public. The Fund and the transfer agent have adopted standards for accepting signature guarantees from the above institutions. The Fund may elect in the future to limit eligible signature guarantors to institutions that are members of the signature guarantee program. The Fund and its transfer agent reserve the right to amend these standards at any time without notice. Normally, a check for the proceeds is mailed within one business day, but in no event more than seven days, after receipt of a proper written redemption request. Dividends are paid up to and including the day that a redemption request is processed. TELEPHONE REDEMPTION Shares may be redeemed by telephoning the Trust. Telephone redemption instructions may be recorded and if reasonable procedures are not followed by the Trust, it may be liable for losses due to unauthorized or fraudulent telephone instructions. An authorization form permitting the Trust to accept telephone requests must first be completed. Authorization forms and information on this service are available from Federated Securities Corp. If the redemption request is received before 3:00 p.m. (Eastern time), the proceeds will be wired the same day to the shareholder's account at a domestic commercial bank which is a member of the Federal Reserve System, and those shares redeemed will not be entitled to that day's dividend. A daily dividend will be paid on shares redeemed if the redemption request is received after 3:00 p.m. (Eastern time). In the event of drastic economic or market changes, a shareholder may experience difficulty in redeeming by telephone. If such a case should occur, another method of redemption, such as "By Mail", should be considered. If at any time the Trust shall determine it necessary to terminate or modify this method of redemption, shareholders would be promptly notified. ACCOUNTS WITH LOW BALANCES Due to the high cost of maintaining accounts with low balances, the Trust may redeem shares in any account and pay the proceeds to the shareholder if the account balance falls below a required minimum value of $25,000 due to shareholder redemptions. Before shares are redeemed to close an account, the shareholder is notified in writing and allowed 30 days to purchase additional shares to meet the minimum requirement. SHAREHOLDER INFORMATION - -------------------------------------------------------------------------------- VOTING RIGHTS Each share of the Trust gives the shareholder one vote in Trustee elections and other matters submitted to shareholders for vote. As a Massachusetts business trust, the Trust is not required to hold annual shareholder meetings. Shareholder approval will be sought only for certain changes in the Trust's operation and for election of Trustees under certain circumstances. Trustees may be removed by the Trustees or by shareholders at a special meeting. A special meeting of the Trust shall be called by the Trustees upon the written request of shareholders owning at least 10% of the Trust's outstanding shares. MASSACHUSETTS PARTNERSHIP LAW Under certain circumstances, shareholders may be held personally liable as partners under Massachusetts law for obligations of the Trust. To protect its shareholders, the Trust has filed legal documents with Massachusetts that expressly disclaim the liability of its shareholders for acts or obligations of the Trust. These documents require notice of this disclaimer to be given in each agreement, obligation, or instrument the Trust or its Trustees enter into or sign. In the unlikely event a shareholder is held personally liable for the Trust's obligations, the Trust is required by the Declaration of Trust to use its property to protect or compensate the shareholder. On request, the Trust will defend any claim made and pay any judgment against a shareholder for any act or obligation of the Trust. Therefore, financial loss resulting from liability as a shareholder will occur only if the Trust itself cannot meet its obligations to indemnify shareholders and pay judgments against them. TAX INFORMATION - -------------------------------------------------------------------------------- FEDERAL INCOME TAX The Trust will pay no federal income tax because it expects to meet requirements of the Internal Revenue Code applicable to regulated investment companies and to receive the special tax treatment afforded to such companies. Unless otherwise exempt, shareholders are required to pay federal income tax on any dividends and other distributions received. This applies whether dividends and distributions are received in cash or as additional shares. PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES In the opinion of Houston, Houston & Donnelly, counsel to the Trust: the Trust is not subject to Pennsylvania corporate or personal property taxes; and Trust shares may be subject to personal property taxes imposed by counties, municipalities, and school districts in Pennsylvania to the extent that the portfolio securities in the Trust would be subject to such taxes if owned directly by residents of those jurisdictions. OTHER STATE AND LOCAL TAXES. Shareholders are urged to consult their own tax advisers regarding the status of their accounts under state and local tax laws. PERFORMANCE INFORMATION - -------------------------------------------------------------------------------- From time to time the Trust advertises its yield and effective yield. Yield represents the annualized rate of income earned on an investment over a seven-day period. It is the annualized dividends earned during the period on an investment shown as a percentage of the investment. The effective yield is calculated similarly to the yield, but when annualized, the income earned by an investment is assumed to be reinvested daily. The effective yield will be slightly higher than the yield because of the compounding effect of this assumed reinvestment. Advertisements and sales literature may also refer to total return. Total return represents the change, over a specified period of time, in the value of an investment in the Trust after reinvesting all income distributions. It is calculated by dividing that change by the initial investment and is expressed as a percentage. From time to time, the Trust may advertise its performance using certain reporting services and/or compare its performance to certain indices. MONEY MARKET TRUST PORTFOLIO OF INVESTMENTS JULY 31, 1994 - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE - -------------- -------------------------------------------------------------------------------- --------------- *COMMERCIAL PAPER--44.8% - ------------------------------------------------------------------------------------------------ DIVERSIFIED--1.5% -------------------------------------------------------------------------------- $ 8,000,000 Rockwell International Corp., 4.061%, 9/13/94 $ 7,961,969 -------------------------------------------------------------------------------- --------------- FINANCE-AUTOMOTIVE--5.2% -------------------------------------------------------------------------------- 13,600,000 Ford Credit Receivables Funding, Inc., 4.485%-4.563%, 8/25/94-9/14/94 13,538,234 -------------------------------------------------------------------------------- 15,000,000 New Center Asset Trust, A1+/P1 Series, 4.739%-5.180%, 8/15/94-1/23/95 14,745,414 -------------------------------------------------------------------------------- --------------- Total 28,283,648 -------------------------------------------------------------------------------- --------------- FINANCE-COMMERCIAL--22.6% -------------------------------------------------------------------------------- 27,000,000 Asset Securitization Cooperative Corp., 4.457%-5.185%, 8/17/94-1/23/95 26,595,397 -------------------------------------------------------------------------------- 11,700,000 CIESCO, Inc., 3.739%-4.062%, 8/24/94-9/15/94 11,659,607 -------------------------------------------------------------------------------- 5,000,000 CIT Group Holdings, Inc., 4.915%, 12/14/94 4,910,000 -------------------------------------------------------------------------------- 27,600,000 Corporate Asset Funding Co., Inc. (CAFCO), 3.687%-5.183%, 8/8/94-1/23/95 27,363,544 -------------------------------------------------------------------------------- 25,000,000 Falcon Asset Securitization Corp., 4.573%-4.864%, 9/22/94-10/28/94 24,749,800 -------------------------------------------------------------------------------- 27,000,000 General Electric Capital Corp., 3.276%-5.262%, 8/4/94-1/18/95 26,693,997 -------------------------------------------------------------------------------- --------------- Total 121,972,345 -------------------------------------------------------------------------------- --------------- FINANCE-RETAIL--2.7% -------------------------------------------------------------------------------- 15,000,000 Norwest Financial Corp., 4.509%-4.816%, 9/27/94-12/15/94 14,787,215 -------------------------------------------------------------------------------- --------------- INSURANCE--11.9% -------------------------------------------------------------------------------- 4,000,000 AI Credit Corp., 4.105%, 9/26/94 3,974,987 -------------------------------------------------------------------------------- 15,800,000 American General Corp., 4.221%, 8/1/94 15,800,000 -------------------------------------------------------------------------------- 27,842,000 Prospect Street Senior Loan Portfolio, L.P. (Guaranteed by Financial Security Assurance, Inc.), 3.914%-5.027%, 8/1/94-12/8/94 27,624,824 --------------------------------------------------------------------------------
MONEY MARKET TRUST - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE - -------------- -------------------------------------------------------------------------------- --------------- *COMMERCIAL PAPER--CONTINUED - ------------------------------------------------------------------------------------------------ INSURANCE--CONTINUED -------------------------------------------------------------------------------- $ 17,000,000 Prudential Funding Corp., 4.135%-4.923%, 9/28/94-12/7/94 $ 16,861,658 -------------------------------------------------------------------------------- --------------- Total 64,261,469 -------------------------------------------------------------------------------- --------------- UTILITIES--0.9% -------------------------------------------------------------------------------- 5,000,000 Ameritech Corp., 4.816%, 12/8/94 4,915,792 -------------------------------------------------------------------------------- --------------- TOTAL COMMERCIAL PAPER 242,182,438 -------------------------------------------------------------------------------- --------------- SHORT-TERM NOTES--1.9% - ------------------------------------------------------------------------------------------------ BANKING--1.9% -------------------------------------------------------------------------------- 10,000,000 AP Investment Co. (Bankers Trust Co. Put), 3.850%, 9/7/94 10,000,000 -------------------------------------------------------------------------------- --------------- **VARIABLE RATE OBLIGATIONS--35.1% - ------------------------------------------------------------------------------------------------ BANKING--16.3% -------------------------------------------------------------------------------- 7,300,000 Hunt Club Apartments., Inc., (Huntington National Bank, Columbus, OH LOC), 4.800%, 8/4/94 7,300,000 -------------------------------------------------------------------------------- 22,205,000 Kenny, Donald R. and Cheryl A., (Huntington National Bank, Columbus, OH LOC), 4.800%, 8/4/94 22,205,000 -------------------------------------------------------------------------------- 5,400,000 Melberger, Clifford K. and Ruth B., (PNC Bank, Northeast, PA LOC), 4.723%, 8/1/94 5,400,000 -------------------------------------------------------------------------------- 8,300,000 Shamrock Communications, Inc., (PNC Bank, Northeast, PA LOC), 4.723%, 8/1/94 8,300,000 -------------------------------------------------------------------------------- 30,000,000 SMM Trust, Series 1993-B, 4.862%, 8/12/94 30,000,000 -------------------------------------------------------------------------------- 9,000,000 The Scranton Times, (PNC Bank, Northeast, PA LOC), 4.723%, 8/1/94 9,000,000 -------------------------------------------------------------------------------- 5,990,000 Westminster Village Terre Haute, Inc., (Huntington National Bank, Columbus, OH LOC), 4.800%, 8/4/94 5,990,000 -------------------------------------------------------------------------------- --------------- Total 88,195,000 -------------------------------------------------------------------------------- --------------- ELECTRICAL EQUIPMENT--5.4% -------------------------------------------------------------------------------- 23,951,719 Northwest Airlines, Inc., (Guaranteed by General Electric Co.), 4.742%, 8/1/94 23,951,719 --------------------------------------------------------------------------------
MONEY MARKET TRUST - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE - -------------- -------------------------------------------------------------------------------- --------------- **VARIABLE RATE OBLIGATIONS--CONTINUED - ------------------------------------------------------------------------------------------------ ELECTRICAL EQUIPMENT--CONTINUED -------------------------------------------------------------------------------- $ 5,317,617 Marta Leasing, Ltd., (Guaranteed by General Electric Co.), 4.723%, 8/1/94 $ 5,317,617 -------------------------------------------------------------------------------- --------------- Total 29,269,336 -------------------------------------------------------------------------------- --------------- FINANCE-AUTOMOTIVE--8.7% -------------------------------------------------------------------------------- 25,000,000 Carco Auto Loan Master Trust, Series 1993-2, 4.655%, 8/15/94 25,000,000 -------------------------------------------------------------------------------- 22,000,000 Money Market Auto Loan Trust, 4.735%, 8/15/94 22,000,000 -------------------------------------------------------------------------------- --------------- Total 47,000,000 -------------------------------------------------------------------------------- --------------- INSURANCE--4.7% -------------------------------------------------------------------------------- 25,000,000 Peoples Security Life Insurance, 4.580%, 8/1/94 25,000,000 -------------------------------------------------------------------------------- --------------- TOTAL VARIABLE RATE OBLIGATIONS 189,464,336 -------------------------------------------------------------------------------- --------------- ***REPURCHASE AGREEMENTS--17.8% - ------------------------------------------------------------------------------------------------ 13,000,000 Bear, Stearns & Co., Inc., 4.220%, dated 7/29/94, due 8/1/94 13,000,000 -------------------------------------------------------------------------------- 20,000,000 Chase Securities, Inc., 4.210%, dated 7/29/94, due 8/1/94 20,000,000 -------------------------------------------------------------------------------- 11,080,000 Kidder, Peabody & Co., Inc., 4.220%, dated 7/29/94, due 8/1/94 11,080,000 -------------------------------------------------------------------------------- 16,000,000 Lehman Government Securities, Inc., 4.200%, dated 7/29/94, due 8/1/94 16,000,000 -------------------------------------------------------------------------------- 10,000,000 PaineWebber Inc., 4.250%, dated 7/29/94, due 8/1/94 10,000,000 --------------------------------------------------------------------------------
MONEY MARKET TRUST - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE - -------------- -------------------------------------------------------------------------------- --------------- ***REPURCHASE AGREEMENTS--CONTINUED - ------------------------------------------------------------------------------------------------ $ 26,000,000 Warburg Securities, 4.220%, dated 7/29/94, due 8/1/94 $ 26,000,000 -------------------------------------------------------------------------------- --------------- TOTAL REPURCHASE AGREEMENTS (NOTE 2B) 96,080,000 -------------------------------------------------------------------------------- --------------- TOTAL INVESTMENTS, AT AMORTIZED COST $ 537,726,774+ -------------------------------------------------------------------------------- ---------------
+ Also represents cost for federal tax purposes. * Each issue shows the rate of discount at the time of purchase for discount issues, or the coupon for interest bearing issues. ** Current rate and next reset date shown. *** The repurchase agreements are fully collateralized by U.S. government and/or agency obligations based on market prices at the date of the portfolio. The investments in the repurchase agreements are through participation in joint accounts with other Federated Funds. Note: The categories of investments are shown as a percentage of net assets ($539,983,305) at July 31, 1994. The following abbreviation is used in this portfolio: LOC--Letter of Credit (See Notes which are an integral part of the Financial Statements) MONEY MARKET TRUST STATEMENT OF ASSETS AND LIABILITIES JULY 31, 1994 - -------------------------------------------------------------------------------- ASSETS: - ------------------------------------------------------------------------------------------------ Investments in repurchase agreements (Note 2B) $ 96,080,000 - ------------------------------------------------------------------------------- Investments in other securities (Note 2A) 441,646,774 - ------------------------------------------------------------------------------- --------------- Total investments, at amortized cost and value $ 537,726,774 - ------------------------------------------------------------------------------------------------ Cash 3,176,113 - ------------------------------------------------------------------------------------------------ Interest receivable 1,156,759 - ------------------------------------------------------------------------------------------------ Receivable for Trust shares sold 2,281 - ------------------------------------------------------------------------------------------------ --------------- Total assets 542,061,927 - ------------------------------------------------------------------------------------------------ --------------- LIABILITIES: - ------------------------------------------------------------------------------------------------ Dividends payable 1,570,558 - ------------------------------------------------------------------------------- Payable for Trust shares redeemed 378,817 - ------------------------------------------------------------------------------- Accrued expenses 129,247 - ------------------------------------------------------------------------------- --------------- Total liabilities 2,078,622 - ------------------------------------------------------------------------------------------------ --------------- NET ASSETS for 539,983,305 shares of beneficial interest outstanding $ 539,983,305 - ------------------------------------------------------------------------------------------------ --------------- NET ASSET VALUE, Offering Price, and Redemption Proceeds per Share ($539,983,305 / 539,983,305 shares of beneficial interest outstanding) $1.00 - ------------------------------------------------------------------------------------------------ ---------------
(See Notes which are an integral part of the Financial Statements) MONEY MARKET TRUST STATEMENT OF OPERATIONS YEAR ENDED JULY 31, 1994 - -------------------------------------------------------------------------------- INVESTMENT INCOME: - -------------------------------------------------------------------------------------------------- Interest income (Note 2C) $ 22,497,868 - -------------------------------------------------------------------------------------------------- EXPENSES: - -------------------------------------------------------------------------------------------------- Investment advisory fee* $ 2,520,096 - ----------------------------------------------------------------------------------- Trustees' fees 15,658 - ----------------------------------------------------------------------------------- Administrative personnel and services* 488,553 - ----------------------------------------------------------------------------------- Custodian and portfolio accounting fees 291,833 - ----------------------------------------------------------------------------------- Transfer and dividend disbursing agent fees and expenses* 39,505 - ----------------------------------------------------------------------------------- Shareholder services fee* 122,774 - ----------------------------------------------------------------------------------- Trust share registration costs 30,076 - ----------------------------------------------------------------------------------- Auditing fees 15,115 - ----------------------------------------------------------------------------------- Legal fees 15,087 - ----------------------------------------------------------------------------------- Printing and postage 8,437 - ----------------------------------------------------------------------------------- Insurance premiums 35,538 - ----------------------------------------------------------------------------------- Taxes 23,283 - ----------------------------------------------------------------------------------- Miscellaneous 9,153 - ----------------------------------------------------------------------------------- ------------- Total expenses 3,615,108 - ----------------------------------------------------------------------------------- Deduct--Waiver of investment advisory fee* (727,018) - ----------------------------------------------------------------------------------- ------------- Net expenses 2,888,090 - -------------------------------------------------------------------------------------------------- -------------- Net investment income $ 19,609,778 - -------------------------------------------------------------------------------------------------- --------------
* See Note 4. (See Notes which are an integral part of the Financial Statements) MONEY MARKET TRUST STATEMENT OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
YEAR ENDED JULY 31, 1994 1993 INCREASE (DECREASE) IN NET ASSETS: - ------------------------------------------------------------------------- OPERATIONS-- - ------------------------------------------------------------------------- Net investment income $ 19,609,778 $ 24,834,637 - ------------------------------------------------------------------------- ------------------ ------------------ DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2C)-- - ------------------------------------------------------------------------- Dividends to shareholders from net investment income (19,609,778) (24,834,637) - ------------------------------------------------------------------------- ------------------ ------------------ TRUST SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)-- - ------------------------------------------------------------------------- Proceeds from sale of shares 3,027,736,629 4,074,533,092 - ------------------------------------------------------------------------- Net asset value of shares issued to shareholders in payment of dividends declared 3,874,627 4,717,881 - ------------------------------------------------------------------------- Cost of shares redeemed (3,204,204,720) (4,310,567,648) - ------------------------------------------------------------------------- ------------------ ------------------ Change in net assets from Trust share transactions (172,593,464) (231,316,675) - ------------------------------------------------------------------------- ------------------ ------------------ Change in net assets (172,593,464) (231,316,675) - ------------------------------------------------------------------------- NET ASSETS: - ------------------------------------------------------------------------- Beginning of period 712,576,769 943,893,444 - ------------------------------------------------------------------------- ------------------ ------------------ End of period $ 539,983,305 $ 712,576,769 - ------------------------------------------------------------------------- ------------------ ------------------
(See Notes which are an integral part of the Financial Statements) MONEY MARKET TRUST NOTES TO FINANCIAL STATEMENTS JULY 31, 1994 - -------------------------------------------------------------------------------- (1) ORGANIZATION The Trust is registered under the Investment Company Act of 1940, as amended (the "Act"), as a no-load, open-end, diversified, management investment company. (2) SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles. A. INVESTMENT VALUATIONS--The Trust's use of the amortized cost method to value its portfolio securities is in accordance with Rule 2a-7 under the Act. B. REPURCHASE AGREEMENTS--It is the policy of the Trust to require the custodian bank to take possession, to have legally segregated in the Federal Reserve Book Entry System, or to have segregated within the custodian bank's vault, all securities held as collateral in support of repurchase agreement investments. Additionally, procedures have been established by the Trust to monitor, on a daily basis, the market value of each repurchase agreement's underlying collateral to ensure that the value at least equals the principal amount of the repurchase agreement, including accrued interest. The Trust will only enter into repurchase agreements with banks and other recognized financial institutions, such as broker/dealers, which are deemed by the Trust's adviser to be creditworthy pursuant to guidelines established by the Board of Trustees (the "Trustees"). Risks may arise from the potential inability of counterparties to honor the terms of the repurchase agreement. Accordingly, the Trust could receive less than the repurchase price on the sale of collateral securities. C. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Distributions to shareholders are recorded on the ex-dividend date. D. FEDERAL TAXES--It is the Trust's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its taxable income. Accordingly, no provisions for federal tax are necessary. E. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Trust may engage in when-issued or delayed delivery transactions. The Trust records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. MONEY MARKET TRUST - -------------------------------------------------------------------------------- F. OTHER--Investment transactions are accounted for on the trade date. (3) SHARES OF BENEFICIAL INTEREST The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value). At July 31, 1994, capital paid-in aggregated $539,983,305. Transactions in Trust shares were as follows:
YEAR ENDED JULY 31, 1994 1993 - ------------------------------------------------------------------------- ----------------- ----------------- Shares sold 3,027,736,629 4,074,533,092 - ------------------------------------------------------------------------- Shares issued to shareholders in payment of dividends declared 3,874,627 4,717,881 - ------------------------------------------------------------------------- Shares redeemed (3,204,204,720) (4,310,567,648) - ------------------------------------------------------------------------- ----------------- ----------------- Net change resulting from Trust Share transactions (172,593,464) (231,316,675) - ------------------------------------------------------------------------- ----------------- -----------------
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES INVESTMENT ADVISORY FEE--Federated Research, the Trust's investment adviser (the "Adviser"), receives for its services an annual investment advisory fee equal to 0.40 of 1% of the Trust's average daily net assets. The Adviser will waive, to the extent of its advisory fee, the amount, if any, by which the Trust's aggregate annual operating expenses (excluding interest, taxes, brokerage commissions, expenses of registering and qualifying the Trust and its shares under federal and state law, expenses of withholding taxes, and extraordinary expenses) exceed, 0.45 of 1% of average daily net assets of the Trust. ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Trust with administrative personnel and services. Prior to March 1, 1994, these services were provided at approximate cost. Effective March 1, 1994, the FAS fee is based on the level of average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors for the period. The administrative fee received during the period of the Administrative Services Agreement shall be at least $125,000 per portfolio and $30,000 per each additional class of shares. SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement with Federated Shareholder Services ("FSS"), the Trust will pay FSS up to 0.25 of 1% of average net assets of the Trust for the period. This fee is to obtain certain personal services for shareholders and to maintain the shareholder accounts. TRANSFER AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company ("FServ") serves as transfer and dividend disbursing agent for the Trust. The FServ fee is based on the size, type, and number of accounts and transactions made by shareholders. Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies. INDEPENDENT AUDITORS' REPORT - -------------------------------------------------------------------------------- To the Board of Trustees and Shareholders of MONEY MARKET TRUST: We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Money Market Trust as of July 31, 1994, the related statement of operations for the year then ended, the statement of changes in net assets for the years ended July 31, 1994 and 1993, and the financial highlights (see page 2 of the prospectus) for each of the years in the ten-year period ended July 31, 1994. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of the securities owned at July 31, 1994 by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements and financial highlights present fairly, in all material respects, the financial position of Money Market Trust as of July 31, 1994, the results of its operations, the changes in its net assets, and its financial highlights for the respective stated periods in conformity with generally accepted accounting principles. DELOITTE & TOUCHE LLP Boston, Massachusetts September 9, 1994 ADDRESSES - -------------------------------------------------------------------------------- Money Market Trust Federated Investors Tower Pittsburgh, Pennsylvania 15222-3779 - ----------------------------------------------------------------------------------------------------------------------- Distributor Federated Securities Corp. Federated Investors Tower Pittsburgh, PA 15222 - ----------------------------------------------------------------------------------------------------------------------- Investment Adviser Federated Research Federated Investors Tower Pittsburgh, PA 15222-3779 - ----------------------------------------------------------------------------------------------------------------------- Custodian State Street Bank and Trust Company P.O. Box 8602 Boston, MA 02266-8602 - ----------------------------------------------------------------------------------------------------------------------- Transfer Agent and Dividend Disbursing Agent Federated Services Company Federated Investors Tower Pittsburgh, PA 15222 - ----------------------------------------------------------------------------------------------------------------------- Legal Counsel Houston, Houston & Donnelly 2510 Centre City Tower Pittsburgh, PA 15222 - ----------------------------------------------------------------------------------------------------------------------- Legal Counsel Dickstein, Shapiro & Morin, LLP 2101 L Street, N.W. Washington, D.C. 20037 - ----------------------------------------------------------------------------------------------------------------------- Independent Auditors Deloitte & Touche LLP One PPG Place Pittsburgh, PA 15222 - -----------------------------------------------------------------------------------------------------------------------
MONEY MARKET TRUST PROSPECTUS An Open-End Management Investment Company September 30, 1994 [LOGO] FEDERATED SECURITIES CORP. -------------------------- Distributor A subsidiary of FEDERATED INVESTORS FEDERATED INVESTORS TOWER PITTSBURGH, PA 15222-3779 609900105 8083102A (9/94) MONEY MARKET TRUST STATEMENT OF ADDITIONAL INFORMATION This Statement of Additional Information should be read with the prospectus of Money Market Trust (the "Trust") dated September 30, 1994. This Statement is not a prospectus. To receive a copy of a prospectus, write or call the Trust. FEDERATED INVESTORS TOWER PITTSBURGH, PENNSYLVANIA 15222-3779 Statement dated September 30, 1994 [LOGO] FEDERATED SECURITIES CORP. --------------------------------------------------------- Distributor A subsidiary of FEDERATED INVESTORS TABLE OF CONTENTS - -------------------------------------------------------------------------------- INVESTMENT POLICIES 1 - --------------------------------------------------------------- Bank Instruments 1 When-Issued and Delayed Delivery Transactions 1 Repurchase Agreements 1 INVESTMENT LIMITATIONS 1 - --------------------------------------------------------------- Selling Short and Buying on Margin 1 Borrowing Money 1 Pledging Assets 1 Investing in Commodities, Minerals, or Real Estate 1 Underwriting 1 Lending Cash or Securities 1 Acquiring Securities 2 Diversification of Investments 2 Investing in Restricted Securities 2 Investing in New Issuers 2 Investing in Put and Call Options 2 Investing in Foreign Securities 2 Investing in Issuers Whose Securities Are Owned by Officers of the Trust 2 Concentration of Investments 2 Issuing Senior Securities 2 BROKERAGE TRANSACTIONS 2 - --------------------------------------------------------------- MONEY MARKET TRUST MANAGEMENT 3 - --------------------------------------------------------------- The Funds 5 Trust Ownership 6 Trustee Liability 6 INVESTMENT ADVISORY SERVICES 6 - --------------------------------------------------------------- Investment Adviser 6 Advisory Fees 6 State Expense Limitations 6 TRUST ADMINISTRATION 7 - --------------------------------------------------------------- SHAREHOLDER SERVICES PLAN 7 - --------------------------------------------------------------- DETERMINING NET ASSET VALUE 7 - --------------------------------------------------------------- Redemption in Kind 8 The Trust's Tax Status 8 PERFORMANCE INFORMATION 8 - --------------------------------------------------------------- Yield 8 Effective Yield 8 Total Return 8 Performance Comparisons 9 APPENDIX 10 - --------------------------------------------------------------- INVESTMENT POLICIES - -------------------------------------------------------------------------------- Unless indicated otherwise, the policies described below may not be changed by the Board of Trustees without shareholder approval. Shareholders will be notified before any material change in these policies becomes effective. BANK INSTRUMENTS The instruments of banks and savings and loans whose deposits are insured by the Bank Insurance Fund ("BIF") or the Savings Association Insurance Fund ("SAIF") such as certificates of deposit, demand and time deposits, savings shares, and bankers' acceptances, are not necessarily guaranteed by those organizations. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS These transactions are made to secure what is considered to be an advantageous price or yield for the Trust. No fees or other expenses, other than normal transaction costs, are incurred. However, liquid assets of the Trust sufficient to make payment for the U.S. government securities to be purchased are segregated on the Trust's records at the trade date. These assets are marked to market daily and are maintained until the transaction has been settled. As a matter of operating policy, which may be changed without shareholder approval, the Trust does not intend to engage in when-issued and delayed delivery transactions to an extent that would cause the segregation of more than 20% of the total value of its assets. REPURCHASE AGREEMENTS The Trust or its custodian will take possession of the U.S. government securities or certificates of deposit subject to repurchase agreements, and these securities will be marked to market daily. In the event that a defaulting seller filed for bankruptcy or became insolvent, disposition of such securities by the Trust might be delayed pending court action. The Trust believes that under the regular procedures normally in effect for custody of the Trust's portfolio securities subject to repurchase agreements, a court of competent jurisdiction would rule in favor of the Trust and allow retention or disposition of such securities. The Trust will only enter into repurchase agreements with banks and other recognized financial institutions, such as broker/dealers, which are deemed by the Trust's adviser to be creditworthy pursuant to guidelines established by the Trustees. INVESTMENT LIMITATIONS - -------------------------------------------------------------------------------- SELLING SHORT AND BUYING ON MARGIN The Trust will not sell any securities short or purchase any securities on margin but may obtain such short-term credits as may be necessary for clearance of purchases and sales of securities. BORROWING MONEY The Trust will not borrow money except as a temporary measure for extraordinary or emergency purposes and then only in amounts not in excess of 5% of the value of its total assets or in an amount up to one-third of the value of its total assets, including the amount borrowed, in order to meet redemption requests without immediately selling any portfolio securities. PLEDGING ASSETS The Trust will not pledge securities. INVESTING IN COMMODITIES, MINERALS, OR REAL ESTATE The Trust will not invest in commodities, commodity contracts, oil, gas, or other mineral programs or real estate, except that it may purchase money market instruments issued by companies which invest in or sponsor interests therein. UNDERWRITING The Trust will not underwrite any issue of securities, except as it may be deemed to be an underwriter under the Securities Act of 1933 in connection with the sale of restricted securities which the Trust may purchase pursuant to its investment objective, policies, and limitations. LENDING CASH OR SECURITIES The Trust will not lend any assets of the Trust, except that it may purchase or hold money market instruments, including repurchase agreements and variable amount and variable rate notes, permitted by its investment objective and policies. - -------------------------------------------------------------------------------- ACQUIRING SECURITIES The Trust will not acquire the voting securities of any issuers. It will not invest in securities issued by any other investment company, except as part of a merger, consolidation, or other acquisition. It will not invest in securities of a company for the purpose of exercising control or management. DIVERSIFICATION OF INVESTMENTS The Trust will not invest more than 5% of its total assets in the securities of any one issuer (except in cash or cash items, repurchase agreements, and securities issued by the U.S. government, its agencies, or instrumentalities). INVESTING IN RESTRICTED SECURITIES The Trust will not invest in securities which are subject to restrictions on resale under federal securities laws, except that the Trust may invest up to 10% of its net assets in high quality securities subject to such restrictions. This limitation is not applicable to commercial paper issued under Section 4(2) of the Securities Act of 1933. INVESTING IN NEW ISSUERS The Trust will not invest more than 5% of its total assets in securities of unseasoned issuers, including their predecessors, that have been in operation for less than three years. INVESTING IN PUT AND CALL OPTIONS The Trust will not invest in puts, calls, straddles, spreads, or any combination thereof. INVESTING IN FOREIGN SECURITIES The Trust will not invest in foreign securities which are not publicly traded in the United States. INVESTING IN ISSUERS WHOSE SECURITIES ARE OWNED BY OFFICERS OF THE TRUST The Trust will not purchase or retain the securities issued by an issuer, any of whose officers, directors, or security holders is an officer, Director, or Trustee of the Trust or its investment adviser if, after the purchase of the securities of such issuer by the Trust, one or more of those officers, Directors, and Trustees owning individually more than 1/2 of 1% of the issuer's securities, together own more than 5% of the issuer's securities. CONCENTRATION OF INVESTMENTS The Trust will not invest more than 25% of the value of its total assets in any one industry. However, investing in bank instruments (such as time and demand deposits and certificates of deposit), U.S. government obligations, or instruments secured by these money market instruments, such as repurchase agreements for U.S. government securities, shall not be considered investments in any one industry. ISSUING SENIOR SECURITIES The Trust will not issue senior securities. The above limitations cannot be changed without shareholder approval. For purposes of the above limitations, the Trust considers instruments issued by a U.S. branch of a domestic bank or savings and loan having capital, surplus, and undivided profits in excess of $100,000,000 at the time of investment to be "cash items". 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. The Trust did not borrow money or pledge securities in excess of 5% of the value of its net assets during the last fiscal year and has no present intent to do so during the coming fiscal year. BROKERAGE TRANSACTIONS - -------------------------------------------------------------------------------- When selecting brokers and dealers to handle the purchase and sale of portfolio instruments, the adviser looks for prompt execution of the order at a favorable price. In working with dealers, the adviser will generally use those who are recognized dealers in specific portfolio instruments, except when a better price and execution of the order can be obtained elsewhere. The adviser makes decisions on portfolio transactions and selects brokers and dealers subject to guidelines established by the Board of Trustees. The adviser may select brokers and dealers who offer brokerage and research services. These services may be furnished directly to the Trust or to the adviser and may include: advice as to the advisability of investing in securities; security analysis and reports; economic studies; industry studies; receipt of quotations for portfolio evaluations; and similar services. Research - -------------------------------------------------------------------------------- services provided by brokers and dealers may be used by the adviser or its affiliates in advising the Trust and other accounts. To the extent that receipt of these services may supplant services for which the adviser or its affiliates might otherwise have paid, it would tend to reduce their expenses. The adviser and its affiliates exercise reasonable business judgment in selecting brokers who offer brokerage and research services to execute securities transactions. They determine in good faith that commissions charged by such persons are reasonable in relationship to the value of the brokerage and research services provided. During the fiscal years ended July 31, 1994, 1993, and 1992, the Trust paid no brokerage commissions. Although investment decisions for the Trust are made independently from those of the other accounts managed by the adviser, investments of the type the Trust may make may also be made by those other accounts. When the Trust and one or more other accounts managed by the adviser are prepared to invest in, or desire to dispose of, the same security, available investments or opportunities for sales will be allocated in a manner believed by the adviser to be equitable to each. In some cases, this procedure may adversely affect the price paid or received by the Trust or the size of the position obtained or disposed of by the Trust. In other cases, however, it is believed that coordination and the ability to participate in volume transactions will be to the benefit of the Trust. MONEY MARKET TRUST MANAGEMENT - -------------------------------------------------------------------------------- Officers and Trustees are listed with their addresses, present positions with Money Market Trust, and principal occupations. - -------------------------------------------------------------------------------- John F. Donahue+* Federated Investors Tower Pittsburgh, PA Chairman and Trustee Chairman and Trustee, Federated Investors, Federated Advisers, Federated Management, and Federated Research; Chairman and Director, Federated Research Corp.; Chairman, Passport Research, Ltd.; Director, AEtna Life and Casualty Company; Chief Executive Officer and Director, Trustee, or Managing General Partner of the Funds. Mr. Donahue is the father of J. Christopher Donahue, Vice-President of the Trust. - -------------------------------------------------------------------------------- John T. Conroy, Jr. Wood/IPC Commercial Department John R. Wood and Associates, Inc., Realtors 3255 Tamiami Trail North Naples, FL Trustee President, Investment Properties Corporation; Senior Vice-President, John R. Wood and Associates, Inc., Realtors; President, Northgate Village Development Corporation; Partner or Trustee in private real estate ventures in Southwest Florida; Director, Trustee, or Managing General Partner of the Funds; formerly, President, Naples Property Management, Inc. - -------------------------------------------------------------------------------- William J. Copeland One PNC Plaza--23rd Floor Pittsburgh, PA Trustee Director and Member of the Executive Committee, Michael Baker, Inc.; Director, Trustee, or Managing General Partner of the Funds; formerly, Vice-Chairman and Director, PNC Bank, N.A., and PNC Bank Corp.; and Director, Ryan Homes, Inc. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- James E. Dowd 571 Hayward Mill Road Concord, MA Trustee Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director, Trustee, or Managing General Partner of the Funds; formerly, Director, Blue Cross of Massachusetts, Inc. - -------------------------------------------------------------------------------- Lawrence D. Ellis, M.D. 3471 Fifth Avenue, Suite 1111 Pittsburgh, PA Trustee Hematologist, Oncologist, and Internist, Presbyterian and Montefiore Hospitals; Professor of Medicine and Trustee, University of Pittsburgh; Director of Corporate Health, University of Pittsburgh Medical Center; Director, Trustee, or Managing General Partner of the Funds. - -------------------------------------------------------------------------------- Edward L. Flaherty, Jr.+ 5916 Penn Mall Pittsburgh, PA Trustee Attorney-at-law; Partner, Meyer and Flaherty; Director, Eat'N Park Restaurants, Inc., and Statewide Settlement Agency, Inc.; Director, Trustee, or Managing General Partner of the Funds; formerly, Counsel, Horizon Financial, F.A., Western Region. - -------------------------------------------------------------------------------- Peter E. Madden 225 Franklin Street Boston, MA Trustee Consultant; State Representative, Commonwealth of Massachusetts; Director, Trustee, or Managing General Partner of the Funds; formerly, President, State Street Bank and Trust Company and State Street Boston Corporation; and Trustee, Lahey Clinic Foundation, Inc. - -------------------------------------------------------------------------------- Gregor F. Meyer 5916 Penn Mall Pittsburgh, PA Trustee Attorney-at-law; Partner, Meyer and Flaherty; Chairman, Meritcare, Inc.; Director, Eat'N Park Restaurants, Inc.; Director, Trustee, or Managing General Partner of the Funds; formerly, Vice Chairman, Horizon Financial, F.A. - -------------------------------------------------------------------------------- Wesley W. Posvar 1202 Cathedral of Learning University of Pittsburgh Pittsburgh, PA Trustee Professor, Foreign Policy and Management Consultant; Trustee, Carnegie Endowment for International Peace, RAND Corporation, Online Computer Library Center, Inc., and U.S. Space Foundation; Chairman, Czecho Slovak Management Center; Director, Trustee, or Managing General Partner of the Funds; President Emeritus, University of Pittsburgh; formerly, Chairman, National Advisory Council for Environmental Policy and Technology. - -------------------------------------------------------------------------------- Marjorie P. Smuts 4905 Bayard Street Pittsburgh, PA Trustee Public relations/marketing consultant; Director, Trustee, or Managing General Partner of the Funds. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Glen R. Johnson Federated Investors Tower Pittsburgh, PA President Trustee, Federated Investors; President and/or Trustee of some of the Funds; staff member, Federated Securities Corp. and Federated Administrative Services. - -------------------------------------------------------------------------------- J. Christopher Donahue Federated Investors Tower Pittsburgh, PA Vice President President and Trustee, Federated Investors, Federated Advisers, Federated Management, and Federated Research; President and Director, Federated Research Corp.; President, Passport Research, Ltd.; Trustee, Federated Administrative Services, Federated Services Company, and Federated Shareholder Services; President or Vice President of the Funds; Director, Trustee, or Managing General Partner of some of the Funds. Mr. Donahue is the son of John F. Donahue, Chairman and Trustee of the Trust. - -------------------------------------------------------------------------------- Richard B. Fisher Federated Investors Tower Pittsburgh, PA Vice President Executive Vice President and Trustee, Federated Investors; Director, Federated Research Corp.; Chairman and Director, Federated Securities Corp.; President or Vice President of some of the Funds; Director or Trustee of some of the Funds. - -------------------------------------------------------------------------------- Edward C. Gonzales Federated Investors Tower Pittsburgh, PA Vice President and Treasurer Vice President, Treasurer, and Trustee, Federated Investors; Vice President and Treasurer, Federated Advisers, Federated Management, Federated Research, Federated Research Corp., and Passport Research, Ltd.; Executive Vice President, Treasurer, and Director, Federated Securities Corp.; Trustee, Federated Services Company and Federated Shareholder Services; Chairman, Treasurer, and Trustee, Federated Administrative Services; Trustee or Director of some of the Funds; Vice President and Treasurer of the Funds. - -------------------------------------------------------------------------------- John W. McGonigle Federated Investors Tower Pittsburgh, PA Vice President and Secretary Vice President, Secretary, General Counsel, and Trustee, Federated Investors; Vice President, Secretary, and Trustee, Federated Advisers, Federated Management, and Federated Research; Vice President and Secretary, Federated Research Corp. and Passport Research, Ltd.; Trustee, Federated Services Company; Executive Vice President, Secretary, and Trustee, Federated Administrative Services; Secretary and Trustee, Federated Shareholder Services; Executive Vice President and Director, Federated Securities Corp.; Vice President and Secretary of the Funds. - -------------------------------------------------------------------------------- * This Trustee is deemed to be an "interested person" as defined in the Investment Company Act of 1940, as amended. + Member of the Executive Committee. The Executive Committee of the Board of Trustees handles the responsibilities of the Board of Trustees between meetings of the Board. THE FUNDS As referred to in the list of Trustees and Officers, "Funds" includes the following investment companies: American Leaders Fund, Inc.; Annuity Management Series; Automated Cash Management Trust; Automated Government Money Trust; California Municipal Cash Trust; Cash Trust Series II; Cash Trust Series, Inc. ; DG Investor Series; Edward D. Jones & Co. Daily Passport Cash Trust; Federated ARMs Fund; Federated Exchange - -------------------------------------------------------------------------------- Fund, Ltd.; Federated GNMA Trust; Federated Government Trust; Federated Growth Trust; Federated High Yield Trust; Federated Income Securities Trust; Federated Income Trust; Federated Index Trust; Federated Intermediate Government Trust; Federated Master Trust; Federated Municipal Trust; Federated Short-Intermediate Government Trust; Federated Short-Term U.S. Government Trust; Federated Stock Trust; Federated Tax-Free Trust; Federated U.S. Government Bond Fund; First Priority Funds; Fixed Income Securities, Inc.; Fortress Adjustable Rate U.S. Government Fund, Inc.; Fortress Municipal Income Fund, Inc.; Fortress Utility Fund, Inc.; Fund for U.S. Government Securities, Inc.; Government Income Securities, Inc.; High Yield Cash Trust; Insight Institutional Series, Inc.; Insurance Management Series; Intermediate Municipal Trust; International Series, Inc.; Investment Series Funds, Inc.; Investment Series Trust; Liberty Equity Income Fund, Inc.; Liberty High Income Bond Fund, Inc.; Liberty Municipal Securities Fund, Inc.; Liberty Term Trust, Inc. 1999; Liberty U.S. Government Money Market Trust; Liberty Utility Fund, Inc.; Liquid Cash Trust; Managed Series Trust; Mark Twain Funds; The Medalist Funds; Money Market Management, Inc.; Money Market Obligations Trust; Money Market Trust; Municipal Securities Income Trust; New York Municipal Cash Trust; 111 Corcoran Funds; Peachtree Funds; The Planters Funds; Portage Funds; RIMCO Monument Funds; The Shawmut Funds; Short-Term Municipal Trust; Star Funds; The Starburst Funds; The Starburst Funds II; Stock and Bond Fund, Inc.; Sunburst Funds; Targeted Duration Trust; Tax-Free Instruments Trust; Trademark Funds; Trust for Financial Institutions; Trust for Government Cash Reserves; Trust for Short-Term U.S. Government Securities; Trust for U.S. Treasury Obligations; and World Investment Series, Inc. TRUST OWNERSHIP Officers and Trustees own less than 1% of the Trust's outstanding shares. As of September 6, 1994, the following shareholders of record owned 5% or more of the outstanding shares of the Trust: The Fiduciary Trust Co. International, New York City, New York, owned approximately 56,489,100 shares (10.33%) and The Brotherhood Bank and Trust Co., Kansas City, Kansas, owned approximately 31, 291,783 shares (5.72%). TRUSTEE LIABILITY The Declaration of Trust provides that the Trustees will not be liable for errors of judgment or mistakes or fact or law. However, they are not protected against any liability to which they would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of their office. INVESTMENT ADVISORY SERVICES - -------------------------------------------------------------------------------- INVESTMENT ADVISER The Trust's investment adviser is Federated Research. It is a subsidiary of Federated Investors. All the voting securities of Federated Investors are owned by a trust, the trustees of which are John F. Donahue, his wife and his son, J. Christopher Donahue. The adviser shall not be liable to the Trust or any shareholder 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 Trust. ADVISORY FEES For its advisory services, Federated Research receives an annual investment advisory fee as described in the prospectus. For the fiscal years ended July 31, 1994, 1993 and 1992, the adviser earned $2,520,096, $3,331,606, and $3,957,398, respectively, of which $727,018, $501,415, and $414,598, respectively, was voluntarily waived. STATE EXPENSE LIMITATIONS The adviser has undertaken to comply with the expense limitations established by certain states for investment companies whose shares are registered for sale in those states. If the Trust's normal operating expenses (including the investment advisory fee, but not including brokerage commissions, interest, taxes, and extraordinary expenses) exceed 2-1/2% per year of the first $30 million of average net assets, 2% per year of the next $70 million of average net assets, and 1-1/2% per year of the remaining average net assets, the adviser will reimburse the Trust for its expenses over the limitation. - -------------------------------------------------------------------------------- If the Trust's monthly projected operating expenses exceed this limitation, the investment advisory fee paid will be reduced by the amount of the excess, subject to an annual adjustment. If the expense limitation is exceeded, the amount to be reimbursed by the adviser will be limited, in any single fiscal year, by the amount of the investment advisory fees. This arrangement is not part of the advisory contract and may be amended or rescinded in the future. TRUST ADMINISTRATION - -------------------------------------------------------------------------------- Federated Administrative Services, a subsidiary of Federated Investors, provides administrative personnel and services to the Trust for a fee as described in the prospectus. Prior to March 1, 1994, Federated Administrative Services, Inc., also a subsidiary of Federated Investors, served as the Trust's administrator. (For purposes of this Statement of Additional Information, Federated Administrative Service and Federated Administrative Services, Inc. may hereinafter collectively be referred to as, the "Administrators".) For the fiscal years ended July 31, 1994, 1993, and 1992, the Administrators collectively earned $488,553, $516,405, and $523,188, respectively. Dr. Henry J. Gailliot, an officer of Federated Research, the adviser to the Trust, holds approximately 20% of the outstanding common stock and serves as a director of Commercial Data Services, Inc., a company which provides computer processing services to Federated Administrative Services. SHAREHOLDER SERVICES PLAN - -------------------------------------------------------------------------------- This arrangement permits the payment of fees to Federated Shareholder Services and financial institutions to cause services to be provided which are necessary for the maintenance of shareholder accounts and to encourage personal services to shareholders by a representative who has knowledge of the shareholder's particular circumstances and goals. These activities and services may include, but are not limited to: providing office space, equipment, telephone facilities, and various clerical, supervisory, computer, and other personnel as necessary or beneficial to establish and maintain shareholder accounts and records; processing purchase and redemption transactions and automatic investments of client account cash balances; answering routine client inquiries; and assisting clients in changing dividend options, account designations, and addresses. By adopting the Shareholder Services Plan, the Board of Trustees expects that the Trust will benefit by: (1) providing personal services to shareholders; (2) investing shareholder assets with a minimum of delay and administrative detail; (3) enhancing shareholder recordkeeping systems; and (4) responding promptly to shareholders' requests and inquiries concerning their accounts. For the fiscal period ending July 31, 1994, payments in the amount of $122,774 were made pursuant to the Shareholder Services Plan. CUSTODIAN AND PORTFOLIO RECORDKEEPER. State Street Bank and Trust Company, Boston, MA is custodian for the securities and cash of the Trust. Federated Services Company, Pittsburgh, PA provides certain accounting and recordkeeping services with respect to the Trust's portfolio investments. TRANSFER AGENT. As transfer agent, Federated Services Company maintains all necessary shareholder records. For its services, the transfer agent receives a fee based on the number of shareholder accounts. DETERMINING NET ASSET VALUE - -------------------------------------------------------------------------------- The Trustees have decided that the best method for determining the value of portfolio instruments is amortized cost. Under this method, portfolio instruments are valued at the acquisition cost as adjusted for amortization of premium or accumulation of discount rather than at current market value. Accordingly, neither the amount of daily income nor the net asset value is affected by any unrealized appreciation or depreciation of the portfolio. In periods of declining interest rates, the indicated daily yield on shares of the Trust computed by dividing the annualized daily income on the Trust's portfolio by the net asset value computed as above may tend to be higher than a similar computation made by using a method of valuation based upon market prices and estimates. In periods of rising interest rates, the opposite may be true. The Trust's use of the amortized cost method of valuing portfolio instruments depends on its compliance with certain conditions in Rule 2a-7 (the "Rule") promulgated by the Securities and Exchange Commission under the Investment Company Act of 1940. Under the Rule, the Trustees must establish procedures reasonably designed to stabilize the net asset value per share, as computed for purposes of distribution and redemption, at $1.00 per - -------------------------------------------------------------------------------- share, taking into account current market conditions and the Trust's investment objective. The procedures include monitoring the relationship between the amortized cost value per share and the net asset value per share based upon available indications of market value. The Trustees will decide what, if any, steps should be taken if there is a difference of more than 0.5 of 1% between the two values. The Trustees will take any steps they consider appropriate (such as redemption in kind or shortening the average portfolio maturity) to minimize any material dilution or other unfair results arising from differences between the two methods of determining net asset value. REDEMPTION IN KIND The Trust is obligated to redeem shares solely in cash up to $250,000 or 1% of the Trust's net asset value, whichever is less, for any one shareholder within a 90-day period. Any redemption beyond this amount will also be in cash unless the Trustees determine that further payments should be in kind. In such cases, the Trust will pay all or a portion of the remainder of the redemption in portfolio instruments valued in the same way as the Trust determines net asset value. The portfolio instruments will be selected in a manner that the Trustees deem fair and equitable. Redemption in kind is not as liquid as a cash redemption. If redemption is made in kind, shareholders who sell these securities could receive less than the redemption value and could incur certain transaction costs. THE TRUST'S TAX STATUS To qualify for the special tax treatment afforded to regulated investment companies, the Trust must, among other requirements: derive at least 90% of its gross income from dividends, interest, and gains from the sale of securities; derive less than 30% of its gross income from the sale of securities held less than three months; invest in securities within certain statutory limits; and distribute to its shareholders at least 90% of its net income earned during the year. PERFORMANCE INFORMATION - -------------------------------------------------------------------------------- Performance depends upon such variables as: portfolio quality; average portfolio maturity; type of instruments in which the portfolio is invested; changes in interest rates; changes in expenses; and the relative amount of cash flow. To the extent that financial institutions and broker/dealers charge fees in connection with services provided in conjunction with an investment in shares of the Trust, the performance will be reduced for those shareholders paying those fees. YIELD The Trust calculates its yield based upon the seven days ending on the day of the calculation, called the "base period." This yield is computed by: determining the net change in the value of a hypothetical account with a balance of one share at the beginning of the base period, with the net change excluding capital changes but including the value of any additional shares purchased with dividends earned from the original one share and all dividends declared on the original and any purchased shares; dividing the net change in the account's value by the value of the account at the beginning of the base period to determine the base period return; and multiplying the base period return by 365/7. The Trust's yield for the seven-day period ended July 31, 1994, was 4.11%. EFFECTIVE YIELD The Trust calculates its effective yield by compounding the unannualized base period return by: adding 1 to the base period return; raising the sum to the 365/7th power; and subtracting 1 from the result. The Trust's effective yield for the seven-day period ended July 31, 1994, was 4.20%. TOTAL RETURN Average annual total return is the average compounded rate of return for a given period that would equate a $1,000 initial investment to the ending redeemable value of that investment. The ending redeemable value is compounded by multiplying the number of shares owned at the end of the period by the net asset value per share at the end of the period. The number of shares owned at the end of the period is based on the number of shares purchased at the beginnning of the period with $1,000, adjusted over the period by any additional shares, assuming the monthly reinvestmentof all dividends and distributions. The Trust's average annual total returns for the one-, five- and ten-year periods ended July 31, 1994 were 3.18%, 5.21% and 6.45%, respectively. - -------------------------------------------------------------------------------- PERFORMANCE COMPARISONS Investors may use financial publications and/or indices to obtain a more complete view of the Trust's performance. When comparing performance, investors should consider all relevant factors such as the composition of any index used, prevailing market conditions, portfolio compositions of other funds, and methods used to value portfolio securities and compute net asset value. The financial publications and/or indices which the Trust uses in advertising may include: LIPPER ANALYTICAL SERVICES, INC. ranks funds in various fund categories based on total return, which assumes the reinvestment of all income dividends and capital gains distributions, if any. DONOGHUE'S MONEY FUND REPORT publishes annualized yields of money market funds weekly. Donoghue's Money Market Insight publication reports monthly and 12-month-to-date investment results for the same money funds. MONEY, a monthly magazine, regularly ranks money market funds in various categories based on the latest available seven-day effective yield. SALOMON 30-DAY CD INDEX compares rate levels of 30-day certificates of deposit from the top ten prime representative banks. APPENDIX - -------------------------------------------------------------------------------- STANDARD AND POOR'S RATINGS GROUP CORPORATE BOND RATING DEFINITIONS AAA--Debt rated "AAA" has the highest rating assigned by Standard & Poor's Ratings Group. Capacity to pay interest and repay principal is extremely strong. AA--Debt rated "AA" has a very strong capacity to pay interest and repay principal and differs from the higher rated issues only in small degree. A--Debt rated "A" has a strong capacity to pay interest and repay principal although it is somewhat more susceptible to the adverse effect of changes in circumstances and economic conditions than debt in higher rated categories. MOODY'S INVESTORS SERVICE, INC. CORPORATE BOND RATING DEFINITIONS Aaa--Bonds which are rated "Aaa" are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt edged." Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. Aa--Bonds which are rated "Aa" are judged to be of high quality by all standards. Together with the "Aaa" group, they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in "Aaa" securities. A--Bonds which are rated "A" possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate but elements may be present which suggest a susceptibility to impairment sometime in the future. FITCH INVESTORS SERVICE, INC. INVESTMENT GRADE BOND RATING DEFINITIONS AAA--Bonds considered to be investment grade and of the highest credit quality. The obligor has an exceptionally strong ability to pay interest and repay principal, which is unlikely to be affected by reasonably foreseeable events. AA--Bonds considered to be investment grade and of very high credit quality. The obligor's ability to pay interest and repay principal is very strong, although not quite as strong as bonds rated "AAA." Because bonds rated in the "AAA" and "AA" categories are not significantly vulnerable to foreseeable future developments, short-term debt of these issuers is generally rated "F-1+." A--Bonds considered to be investment grade and of high credit quality. The obligor's ability to pay interest and repay principal is considered strong, but may be more vulnerable to adverse changes in economic conditions and circumstances than bonds with higher ratings. STANDARD & POOR'S RATINGS GROUP COMMERCIAL PAPER RATING DEFINITIONS A-1--This highest category indicates that the degree of safety regarding timely payment is strong. Those issues determined to possess extremely strong safety characteristics are denoted with a plus sign (+) designation. A-2--Capacity for timely payment on issues with this designation is satisfactory. However, the relative degree of safety is not as high as for issues designated "A-1". MOODY'S INVESTORS SERVICE, INC. COMMERCIAL PAPER RATING DEFINITIONS PRIME-1--Issuers rated Prime-1 (or related supporting institutions) have a superior capacity for repayment of short-term promissory obligations. Prime-1 repayment capacity will normally be evidenced by the following characteristics: Leading market positions in well established industries. High rates of return on funds employed. Conservative capitalization structure with moderate reliance on debt and ample asset protection. Broad margins in earning coverage of fixed financial charges and high internal cash generation. Well-established access to a range of financial markets and assured sources of alternate liquidity PRIME-2--Issuers rated Prime-2 (or related supporting institutions) have a strong capacity for repayment of short-term promissory obligations. This will normally be evidenced by many of the characteristics cited above, but to a lesser degree. Earnings trends and coverage ratios, while sound, will be more subject to variation. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternate liquidity is maintained. - -------------------------------------------------------------------------------- FITCH INVESTORS SERVICE, INC. SHORT-TERM DEBT RATING DEFINITIONS F-1+--Exceptionally Strong Credit Quality. Issues assigned this rating are regarded as having the strongest degree of assurance for timely payment. F-1--Very Strong Credit Quality. Issues assigned this rating reflect an assurance for timely payment only slightly less in degree than issues rated "F-1+." F-2--Good Credit Quality. Issues carrying this rating have a satisfactory degree of assurance for timely payment, but the margin of safety is not as great as for issues assigned "F-1+" and "F-1" ratings. 609900105 8083102B (9/94) PART C. OTHER INFORMATION. Item 24. Financial Statements and Exhibits: (a) Financial Statements (filed in Part A) (b) Exhibits: (1) Conformed copy of Declaration of Trust of the Registrant; (1) (2) (i) Copy of By-Laws of the Registrant; (1) (ii) Copy of Amendment to By-Laws of Registrant; (1) (3) Not applicable; (4) Copy of Specimen Certificate for Shares of Beneficial Interest of the Registrant; (1) (5) Conformed copy of Investment Advisory Contract of the Registrant; (9) (6) (i)Conformed copy of Distributor's Agreement;(9) (7) Not applicable; (8) Copy of Custodian Agreement of the Registrant; (11) (9) Conformed copy of Agreement for Fund Accounting, Shareholder Recordkeeping, and Custody Services Procurement; + (10) Not applicable; (11) Consent of Independent Auditors; + (12) Not applicable; (13) Copy of Initial Capital Understanding; (1) (14) Not applicable; (15) Not applicable; (16) Schedule for Computation of Fund Performance Yield Calculation; (8) (17) Financial Data Schedule; + (18) Opinion and Consent of Counsel as to Availability of Rule 485(b); + (19) Power of Attorney; (10) Item 25. Persons Controlled by or Under Common Control with Registrant None + All exhibits have been filed electronically. 1. Response is incorporated by reference to Registrant's Initial Registration Statement on Form S-E filed July 31, 1978. (File No. 2-62285) 7. Response is incorporated by reference to Registrant's Post-Effective Amendment No. 20 on Form N-1A filed September 22, 1987. (File No. 2-62285) 8. Response is incorporated by reference to Registrant's Post-Effective Amendment No. 22 on Form N-1A filed September 23, 1988. (File No. 2-62285) 9. Response is incorporated by reference to Registrant's Post-Effective Amendment No. 25 on Form N-1A filed September 22, 1989. (File No. 2-62285) 10. Response is incorporated by reference to Registrant's Post-Effective Amendment No. 31 on Form N-1A filed September 24, 1992. (File No. 2-62285) 11. Response is incorporated by reference to Registrant's Post-Effective Amendment No. 33 on Form N-1A filed September 23, 1993. (File No. 2-62285) Item 26. Number of Holders of Securities: Number of Record Holders Title of Class as of September 6, 1994 Shares of beneficial interest 2,222 (no par value) Item 27. Indemnification: (2.) Item 28. Business and Other Connections of Investment Adviser: (a) For a description of the other business of the investment adviser, see the section entitled "Money Market Trust Information - Management of the Trust" in Part A. The affiliations with the Registrant of four of the Trustees and one of the Officers of the investment adviser are included in Part B of this Registration Statement under "Trust Management - Officers and Trustees." The remaining Trustee of the investment adviser, his position with the investment adviser, and, in parentheses, his principal occupation is: Mark D. Olson, (Partner, Wilson, Halbrook & Bayard,) 107 W. Market Street, Georgetown, Delaware 19947. The remaining Officers of the investment adviser are: Mark L. Mallon, William D. Dawson, III and J. Thomas Madden, Executive Vice President; Henry J. Gailliot, Senior Vice President-Economist; Peter R. Anderson, Gary J. Madich, and J. Alan Minteer, Senior Vice Presidents; Randall A. Bauer, Jonathan C. Conley, Deborah A. Cunningham, Mark E. Durbiano, Kathy Foody-Malus, Thomas M. Franks, Edward C. Gonzales, Jeff A. Kozemchak, Marian R. Marinack, John W. McGonigle, Gregory M. Melvin, Susan M. Nason, Mary Jo Ochson, Robert J. Ostrowski, Charles A. Ritter, and Christopher H. Wiles, Vice Presidents, Edward C. Gonzales, Treasurer, and John W. McGonigle, Secretary. The business address of each of the Officers of the investment adviser is Federated Investors Tower, Pittsburgh, PA 15222-3779. These individuals are also officers of a majority of the investment advisers to the Funds listed in Part B of this Registration Statement under "The Funds." Item 29. Principal Underwriters: (a) Federated Securities Corp., the Distributor for shares of the Registrant, also acts as principal underwriter for the following open-end investment companies: Alexander Hamilton Funds; American Leaders Fund, Inc.; Annuity Management Series; Automated Cash Management Trust; Automated Government Money Trust; BayFunds; The Biltmore Funds; The Biltmore Municipal Funds; California Municipal Cash Trust; Cash Trust Series, Inc.; Cash Trust Series II; DG Investor Series; Edward D. Jones & Co. Daily Passport Cash Trust; Federated ARMs Fund; Federated Exchange Fund, Ltd.; Federated GNMA Trust; Federated Government Trust; Federated Growth Trust; 2. Response is incorporated by reference to Registrant's Post-Effective Amendment No. 4 on Form N-1 filed November 20, 1980. (File No. 2- 62285) Federated High Yield Trust; Federated Income Securities Trust; Federated Income Trust; Federated Index Trust; Federated Institutional Trust; Federated Intermediate Government Trust; Federated Master Trust; Federated Municipal Trust; Federated Short- Intermediate Government Trust; Federated Short-Term U.S. Government Trust; Federated Stock Trust; Federated Tax-Free Trust; Federated U.S. Government Bond Fund; First Priority Funds; First Union Funds; Fixed Income Securities, Inc.; Fortress Adjustable Rate U.S. Government Fund, Inc.; Fortress Municipal Income Fund, Inc.; Fortress Utility Fund, Inc.; Fountain Square Funds; Fund for U.S. Government Securities, Inc.; Government Income Securities, Inc.; High Yield Cash Trust; Independence One Mutual Funds; Insight Institutional Series, Inc.; Insurance Management Series; Intermediate Municipal Trust; International Series Inc.; Investment Series Funds, Inc.; Investment Series Trust; Liberty Equity Income Fund, Inc.; Liberty High Income Bond Fund, Inc.; Liberty Municipal Securities Fund, Inc.; Liberty U.S. Government Money Market Trust; Liberty Utility Fund, Inc.; Liquid Cash Trust; Managed Series Trust; Mark Twain Funds; Marshall Funds, Inc.; Money Market Management, Inc.; The Medalist Funds; Money Market Obligations Trust; Money Market Trust; The Monitor Funds; Municipal Securities Income Trust; New York Municipal Cash Trust; 111 Corcoran Funds; Peachtree Funds; The Planters Funds; Portage Funds; RIMCO Monument Funds; The Shawmut Funds; Short-Term Municipal Trust; SouthTrust Vulcan Funds; Star Funds; The Starburst Funds; The Starburst Funds II; Stock and Bond Fund, Inc.; Sunburst Funds; Targeted Duration Trust; Tax-Free Instruments Trust; Tower Mutual Funds; Trademark Funds; Trust for Financial Institutions; Trust for Government Cash Reserves; Trust for Short-Term U.S. Government Securities; Trust for U.S. Treasury Obligations; Vision Fiduciary Funds, Inc.; Vision Group of Funds, Inc.; and World Investment Series, Inc. Federated Securities Corp. also acts as principal underwriter for the following closed-end investment company: Liberty Term Trust, Inc.- 1999. (b) (1) (2) (3) Name and Principal Positions and Offices Positions and Offices Business Address With Underwriter With Registrant Richard B. Fisher Director, Chairman, Chief Vice President Federated Investors Tower Executive Officer, Chief Pittsburgh, PA 15222-3779 Operating Officer, and Asst. Treasurer, Federated Securities Corp. Edward C. Gonzales Director, Executive Vice Vice President Federated Investors Tower President, and Treasurer, and Treasurer Pittsburgh, PA 15222-3779 Federated Securities Corp. John W. McGonigle Director, Executive Vice Vice President and Federated Investors Tower President, and Assistant Secretary Pittsburgh, PA 15222-3779 Secretary, Federated Securities Corp. John A. Staley, IV Executive Vice President -- Federated Investors Tower and Assistant Secretary, Pittsburgh, PA 15222-3779 Federated Securities Corp. John B. Fisher President-Institutional Sales, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 James F. Getz President-Broker/Dealer, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 Mark R. Gensheimer Executive Vice President of -- Federated Investors Tower Bank/Trust Pittsburgh, PA 15222-3779 Federated Securities Corp. Mark W. Bloss Senior Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 Theodore Fadool, Jr. Senior Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 Bryant R. Fisher Senior Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 Christopher T. Fives Senior Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 James S. Hamilton Senior Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 James M. Heaton Senior Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 H. Joseph Kennedy Senior Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 Keith Nixon Senior Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 Timothy C. Pillion Senior Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 James R. Ball Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 Richard W. Boyd Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 Jane E. Broeren-Lambesis Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 Mary J. Combs Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 R. Edmond Connell, Jr. Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 Laura M. Deger Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 Jill Ehrenfeld Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 Mark D. Fisher Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 Joseph D. Gibbons Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 David C. Glabicki Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 Richard C. Gonzales Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 Scott A. Hutton Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 William J. Kerns Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 William E. Kugler Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 Dennis M. Laffey Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 Francis J. Matten, Jr. Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 Mark J. Miehl Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 J. Michael Miller Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 R. Jeffrey Niss Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 Michael P. O'Brien Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 Solon A. Person, IV Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 Robert F. Phillips Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 Eugene B. Reed Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 Paul V. Riordan Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 Charles A. Robison Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 David W. Spears Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 Jeffrey A. Stewart Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 Thomas E. Territ Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 William C. Tustin Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 Richard B. Watts Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 Philip C. Hetzel Assistant Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 Ernest L. Linane Assistant Vice President, -- Federated Investors Tower Federated Securities Corp. Pittsburgh, PA 15222-3779 S. Elliott Cohan Secretary, Federated Assistant Federated Investors Tower Securities Corp. Secretary Pittsburgh, PA 15222-3779 (c) Not applicable. Item 30. Location of Accounts and Records: All accounts and records required to be maintained by Section 31(a) of the Investment Company Act of 1940 and Rules 31a-1 through 31a-3 promulgated thereunder are maintained at one of the following locations: Registrant Federated Investors Tower Federated Services Company Pittsburgh, PA 15222-3779 ("Transfer Agent and Dividend Disbursing Agent) Federated Administrative Services ("Administrator") Federated Management ("Advisor") State Street Bank and Trust Company P.O. Box 8602 ("Custodian") Boston, Massachusetts 02266-8602 Item 31. Management Services: Not applicable. Item 32. Undertakings: Registrant hereby undertakes to comply with the provisions of Section 16(c) of the 1940 Act with respect to the removal of Trustees and the calling of special shareholder meetings by shareholders. SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant, MONEY MARKET TRUST, certifies that it meets all of the requirements for effectiveness of this Amendment to its Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Amendment to its Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Pittsburgh and Commonwealth of Pennsylvania, on the 26th day of September, 1994. MONEY MARKET TRUST BY: /s/ Mark Sheehan Mark Sheehan, Assistant Secretary Attorney in Fact for John F. Donahue September 26, 1994 Pursuant to the requirements of the Securities Act of 1933, this Amendment to its Registration Statement has been signed below by the following person in the capacity and on the date indicated: NAME TITLE DATE By: /s/ Mark Sheehan Mark Sheehan Attorney In Fact September 26,1994 ASSISTANT SECRETARY For the Persons Listed Below NAME TITLE John F. Donahue* Chairman and Trustee (Chief Executive Officer) Glen R. Johnson* President Edward C. Gonzales* Vice President and Treasurer (Principal Financial and Accounting Officer) John T. Conroy, Jr.* Trustee William J. Copeland* Trustee James E. Dowd* Trustee Lawrence D. Ellis, M.D.* Trustee Edward L. Flaherty, Jr.* Trustee Peter E. Madden* Trustee Gregor F. Meyer* Trustee Wesley W. Posvar* Trustee Marjorie P. Smuts* Trustee * By Power of Attorney EX-99.AUDITORCONSENT 2 Exhibit (11) under N-1A Exhibit 23 under 601/Reg. SK INDEPENDENT AUDITORS' CONSENT We consent to the use in this Post-Effective Amendment No. 35 to Registration Statement (No. 2-62285) of Money Market Trust of our report dated September 9, 1994, appearing in the Prospectus, which is a part of such Registration Statement, and to the reference of us under the heading "Financial Highlights" in such Prospectus. By: DELOITTE & TOUCHE Deloitte & Touche Certified Public Accountants Boston, Massachusetts September 23, 1994 EX-99.OPINIONLETTER 3 Exhibit 18 Under Form N-1A Exhibit 99 Under Item 601/Reg. S-K HOUSTON, HOUSTON & DONNELLY ATTORNEYS AT LAW 2510 CENTRE CITY TOWER WILLIAM McC. HOUSTON PITTSBURGH, PA. 15222 FRED CHALMERS HOUSTON, JR. __________ THOMAS J. DONNELLY JOHN F. MECK (412) 471-5828 FRED CHALMERS HOUSTON FAX (412) 471-0736 (1914 - 1971) MARIO SANTILLI, JR. THEODORE M. HAMMER September 22, 1994 Money Market Trust Federated Investors Tower Pittsburgh, PA 15222-3779 Gentlemen: As counsel to Money Market Trust ("Trust") we have reviewed Post- effective Amendment No. 35 to the Trust's Registration Statement to be filed with the Securities and Exchange Commission under the Securities Act of 1933 (File No. 2-62285). The subject Post-effective Amendment will be filed pursuant to Paragraph (b) of Rule 485 and become effective pursuant to said Rule on September 28, 1994. Our review also included an examination of other relevant portions of the amended 1933 Act Registration Statement of the Trust and such other documents and records deemed appropriate. On the basis of this review we are of the opinion that Post-effective Amendment No. 35 does not contain disclosures which would render it ineligible to become effective pursuant to Paragraph (b) of Rule 485. We hereby consent to the filing of this representation letter as a part of the Trust's Registration Statement filed with the Securities and Exchange Commission under the Securities Act of 1933 and as part of any application or registration statement filed under the Securities Laws of the States of the United States. Very truly yours, Houston, Houston & Donnelly By: Thomas J. Donnelly TJD:heh EX-99.CONTRACT 4 Exhibit 9 (ii) under Form N-1A Exhibit 10 under Item 601/Reg. S-K AGREEMENT for FUND ACCOUNTING, SHAREHOLDER RECORDKEEPING, and CUSTODY SERVICES PROCUREMENT AGREEMENT made as of the 1st day of December, 1993, by and between those investment companies listed on Exhibit 1 as may be amended from time to time, having their principal office and place of business at Federated Investors Tower, Pittsburgh, PA 15222-3779 (the "Trust"), on behalf of the portfolios (individually referred to herein as a "Fund" and collectively as "Funds") of the Trust, and FEDERATED SERVICES COMPANY, a Delaware business trust, having its principal office and place of business at Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779 (the "Company"). WHEREAS, the Trust is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"), with authorized and issued shares of capital stock or beneficial interest ("Shares"); and WHEREAS, the Trust wishes to retain the Company to provide certain pricing, accounting and recordkeeping services for each of the Funds, including any classes of shares issued by any Fund ("Classes"), and the Company is willing to furnish such services; and WHEREAS, the Trust desires to appoint the Company as its transfer agent, dividend disbursing agent, and agent in connection with certain other activities, and the Company desires to accept such appointment; and WHEREAS, the Trust desires to appoint the Company as its agent to select, negotiate and subcontract for custodian services from an approved list of qualified banks and the Company desires to accept such appointment; and WHEREAS, from time to time the Trust may desire and may instruct the Company to subcontract for the performance of certain of its duties and responsibilities hereunder to State Street Bank and Trust Company or another agent (the "Agent"); and WHEREAS, the words Trust and Fund may be used interchangeably for those investment companies consisting of only one portfolio; NOW THEREFORE, in consideration of the premises and mutual covenants herein contained, and intending to be legally bound hereby, the parties hereto agree as follows: SECTION ONE: Fund Accounting. Article 1. Appointment. The Trust hereby appoints the Company to provide certain pricing and accounting services to the Funds, and/or the Classes, for the period and on the terms set forth in this Agreement. The Company accepts such appointment and agrees to furnish the services herein set forth in return for the compensation as provided in Article 3 of this Section. Article 2. The Company and Duties. Subject to the supervision and control of the Trust's Board of Trustees or Directors ("Board"), the Company will assist the Trust with regard to fund accounting for the Trust, and/or the Funds, and/or the Classes, and in connection therewith undertakes to perform the following specific services; A. Value the assets of the Funds and determine the net asset value per share of each Fund and/or Class, at the time and in the manner from time to time determined by the Board and as set forth in the Prospectus and Statement of Additional Information ("Prospectus") of each Fund; B. Calculate the net income of each of the Funds, if any; C. Calculate capital gains or losses of each of the Funds resulting from sale or disposition of assets, if any; D. Maintain the general ledger and other accounts, books and financial records of the Trust, including for each Fund, and/or Class, as required under Section 31(a) of the 1940 Act and the Rules thereunder in connection with the services provided by the Company; E. Preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records to be maintained by Rule 31a-1 under the 1940 Act in connection with the services provided by the Company. The Company further agrees that all such records it maintains for the Trust are the property of the Trust and further agrees to surrender promptly to the Trust such records upon the Trust's request; F. At the request of the Trust, prepare various reports or other financial documents required by federal, state and other applicable laws and regulations; and G. Such other similar services as may be reasonably requested by the Trust. Article 3. Compensation and Allocation of Expenses. A. The Funds will compensate the Company for its services rendered pursuant to Section One of this Agreement in accordance with the fees agreed upon from time to time between the parties hereto. Such fees do not include out-of-pocket disbursements of the Company for which the Funds shall reimburse the Company upon receipt of a separate invoice. Out-of-pocket disbursements shall include, but shall not be limited to, the items agreed upon between the parties from time to time. B. The Fund and/or the Class, and not the Company, shall bear the cost of: custodial expenses; membership dues in the Investment Company Institute or any similar organization; transfer agency expenses; investment advisory expenses; costs of printing and mailing stock certificates, Prospectuses, reports and notices; administrative expenses; interest on borrowed money; brokerage commissions; taxes and fees payable to federal, state and other governmental agencies; fees of Trustees or Directors of the Trust; independent auditors expenses; Federated Administrative Services and/or Federated Administrative Services, Inc. legal and audit department expenses billed to Federated Services Company for work performed related to the Trust, the Funds, or the Classes; law firm expenses; or other expenses not specified in this Article 3 which may be properly payable by the Funds and/or classes. C. Payment The compensation and out-of-pocket expenses shall be accrued by the Fund and shall be paid no less frequently than monthly, and shall be paid daily upon request of the Company. The Company will maintain detailed information about the compensation and out-of-pocket expenses by Fund and Class. D. Any Schedule of compensation agreed to hereunder, as may be adjusted from time to time, shall be dated and signed by a duly authorized officer of the Trust and/or the Funds and a duly authorized officer of the Company. E. The fee for the period from the effective date of this Agreement with respect to a Fund or a Class to the end of the initial month shall be prorated according to the proportion that such period bears to the full month period. Upon any termination of this Agreement before the end of any month, the fee for such period shall be prorated according to the proportion which such period bears to the full month period. For purposes of determining fees payable to the Company, the value of the Fund's net assets shall be computed at the time and in the manner specified in the Fund's Prospectus. F. The Company, in its sole discretion, may from time to time subcontract to, employ or associate with itself such person or persons as the Company may believe to be particularly suited to assist it in performing services under this Section One. Such person or persons may be third-party service providers, or they may be officers and employees who are employed by both the Company and the Funds. The compensation of such person or persons shall be paid by the Company and no obligation shall be incurred on behalf of the Trust, the Funds, or the Classes in such respect. SECTION TWO: Shareholder Recordkeeping. Article 4. Terms of Appointment. Subject to the terms and conditions set forth in this Agreement, the Trust hereby appoints the Company to act as, and the Company agrees to act as, transfer agent and dividend disbursing agent for each Fund's Shares, and agent in connection with any accumulation, open-account or similar plans provided to the shareholders of any Fund ("Shareholder(s)"), including without limitation any periodic investment plan or periodic withdrawal program. As used throughout this Agreement, a "Proper Instruction" means a writing signed or initialed by one or more person or persons as the Board shall have from time to time authorized. Each such writing shall set forth the specific transaction or type of transaction involved. Oral instructions will be deemed to be Proper Instructions if (a) the Company reasonably believes them to have been given by a person previously authorized in Proper Instructions to give such instructions with respect to the transaction involved, and (b) the Trust, or the Fund, and the Company promptly cause such oral instructions to be confirmed in writing. Proper Instructions may include communications effected directly between electro-mechanical or electronic devices provided that the Trust, or the Fund, and the Company are satisfied that such procedures afford adequate safeguards for the Fund's assets. Proper Instructions may only be amended in writing. Article 5. Duties of the Company. The Company shall perform the following services in accordance with Proper Instructions as may be provided from time to time by the Trust as to any Fund: A. Purchases (1) The Company shall receive orders and payment for the purchase of shares and promptly deliver payment and appropriate documentation therefore to the custodian of the relevant Fund, (the "Custodian"). The Company shall notify the Fund and the Custodian on a daily basis of the total amount of orders and payments so delivered. (2) Pursuant to purchase orders and in accordance with the Fund's current Prospectus, the Company shall compute and issue the appropriate number of Shares of each Fund and/or Class and hold such Shares in the appropriate Shareholder accounts. (3) For certificated Funds and/or Classes, if a Shareholder or its agent requests a certificate, the Company, as Transfer Agent, shall countersign and mail by first class mail, a certificate to the Shareholder at its address as set forth on the transfer books of the Funds, and/or Classes, subject to any Proper Instructions regarding the delivery of certificates. (4) In the event that any check or other order for the purchase of Shares of the Fund and/or Class is returned unpaid for any reason, the Company shall debit the Share account of the Shareholder by the number of Shares that had been credited to its account upon receipt of the check or other order, promptly mail a debit advice to the Shareholder, and notify the Fund and/or Class of its action. In the event that the amount paid for such Shares exceeds proceeds of the redemption of such Shares plus the amount of any dividends paid with respect to such Shares, the Fund and/the Class or its distributor will reimburse the Company on the amount of such excess. B. Distribution (1) Upon notification by the Funds of the declaration of any distribution to Shareholders, the Company shall act as Dividend Disbursing Agent for the Funds in accordance with the provisions of its governing document and the then-current Prospectus of the Fund. The Company shall prepare and mail or credit income, capital gain, or any other payments to Shareholders. As the Dividend Disbursing Agent, the Company shall, on or before the payment date of any such distribution, notify the Custodian of the estimated amount required to pay any portion of said distribution which is payable in cash and request the Custodian to make available sufficient funds for the cash amount to be paid out. The Company shall reconcile the amounts so requested and the amounts actually received with the Custodian on a daily basis. If a Shareholder is entitled to receive additional Shares by virtue of any such distribution or dividend, appropriate credits shall be made to the Shareholder's account, for certificated Funds and/or Classes, delivered where requested; and (2) The Company shall maintain records of account for each Fund and Class and advise the Trust, each Fund and Class and its Shareholders as to the foregoing. C. Redemptions and Transfers (1) The Company shall receive redemption requests and redemption directions and, if such redemption requests comply with the procedures as may be described in the Fund Prospectus or set forth in Proper Instructions, deliver the appropriate instructions therefor to the Custodian. The Company shall notify the Funds on a daily basis of the total amount of redemption requests processed and monies paid to the Company by the Custodian for redemptions. (2) At the appropriate time upon receiving redemption proceeds from the Custodian with respect to any redemption, the Company shall pay or cause to be paid the redemption proceeds in the manner instructed by the redeeming Shareholders, pursuant to procedures described in the then-current Prospectus of the Fund. (3) If any certificate returned for redemption or other request for redemption does not comply with the procedures for redemption approved by the Fund, the Company shall promptly notify the Shareholder of such fact, together with the reason therefor, and shall effect such redemption at the price applicable to the date and time of receipt of documents complying with said procedures. (4) The Company shall effect transfers of Shares by the registered owners thereof. (5) The Company shall identify and process abandoned accounts and uncashed checks for state escheat requirements on an annual basis and report such actions to the Fund. D. Recordkeeping (1) The Company shall record the issuance of Shares of each Fund, and/or Class, and maintain pursuant to applicable rules of the Securities and Exchange Commission ("SEC") a record of the total number of Shares of the Fund and/or Class which are authorized, based upon data provided to it by the Fund, and issued and outstanding. The Company shall also provide the Fund on a regular basis or upon reasonable request with the total number of Shares which are authorized and issued and outstanding, but shall have no obligation when recording the issuance of Shares, except as otherwise set forth herein, to monitor the issuance of such Shares or to take cognizance of any laws relating to the issue or sale of such Shares, which functions shall be the sole responsibility of the Funds. (2) The Company shall establish and maintain records pursuant to applicable rules of the SEC relating to the services to be performed hereunder in the form and manner as agreed to by the Trust or the Fund to include a record for each Shareholder's account of the following: (a) Name, address and tax identification number (and whether such number has been certified); (b) Number of Shares held; (c) Historical information regarding the account, including dividends paid and date and price for all transactions; (d) Any stop or restraining order placed against the account; (e) Information with respect to withholding in the case of a foreign account or an account for which withholding is required by the Internal Revenue Code; (f) Any dividend reinvestment order, plan application, dividend address and correspondence relating to the current maintenance of the account; (g) Certificate numbers and denominations for any Shareholder holding certificates; (h) Any information required in order for the Company to perform the calculations contemplated or required by this Agreement. (3) The Company shall preserve any such records required to be maintained pursuant to the rules of the SEC for the periods prescribed in said rules as specifically noted below. Such record retention shall be at the expense of the Company, and such records may be inspected by the Fund at reasonable times. The Company may, at its option at any time, and shall forthwith upon the Fund's demand, turn over to the Fund and cease to retain in the Company's files, records and documents created and maintained by the Company pursuant to this Agreement, which are no longer needed by the Company in performance of its services or for its protection. If not so turned over to the Fund, such records and documents will be retained by the Company for six years from the year of creation, during the first two of which such documents will be in readily accessible form. At the end of the six year period, such records and documents will either be turned over to the Fund or destroyed in accordance with Proper Instructions. E. Confirmations/Reports (1) The Company shall furnish to the Fund periodically the following information: (a) A copy of the transaction register; (b) Dividend and reinvestment blotters; (c) The total number of Shares issued and outstanding in each state for "blue sky" purposes as determined according to Proper Instructions delivered from time to time by the Fund to the Company; (d) Shareholder lists and statistical information; (e) Payments to third parties relating to distribution agreements, allocations of sales loads, redemption fees, or other transaction- or sales-related payments; (f) Such other information as may be agreed upon from time to time. (2) The Company shall prepare in the appropriate form, file with the Internal Revenue Service and appropriate state agencies, and, if required, mail to Shareholders, such notices for reporting dividends and distributions paid as are required to be so filed and mailed and shall withhold such sums as are required to be withheld under applicable federal and state income tax laws, rules and regulations. (3) In addition to and not in lieu of the services set forth above, the Company shall: (a) Perform all of the customary services of a transfer agent, dividend disbursing agent and, as relevant, agent in connection with accumulation, open-account or similar plans (including without limitation any periodic investment plan or periodic withdrawal program), including but not limited to: maintaining all Shareholder accounts, mailing Shareholder reports and Prospectuses to current Shareholders, withholding taxes on accounts subject to back-up or other withholding (including non-resident alien accounts), preparing and filing reports on U.S. Treasury Department Form 1099 and other appropriate forms required with respect to dividends and distributions by federal authorities for all Shareholders, preparing and mailing confirmation forms and statements of account to Shareholders for all purchases and redemptions of Shares and other confirmable transactions in Shareholder accounts, preparing and mailing activity statements for Shareholders, and providing Shareholder account information; and (b) provide a system which will enable the Fund to monitor the total number of Shares of each Fund and/or Class sold in each state ("blue sky reporting"). The Fund shall by Proper Instructions (i) identify to the Company those transactions and assets to be treated as exempt from the blue sky reporting for each state and (ii) verify the classification of transactions for each state on the system prior to activation and thereafter monitor the daily activity for each state. The responsibility of the Company for each Fund's and/or Class's state blue sky registration status is limited solely to the recording of the initial classification of transactions or accounts with regard to blue sky compliance and the reporting of such transactions and accounts to the Fund as provided above. F. Other Duties (1) The Company shall answer correspondence from Shareholders relating to their Share accounts and such other correspondence as may from time to time be addressed to the Company; (2) The Company shall prepare Shareholder meeting lists, mail proxy cards and other material supplied to it by the Fund in connection with Shareholder Meetings of each Fund; receive, examine and tabulate returned proxies, and certify the vote of the Shareholders; (3) The Company shall establish and maintain facilities and procedures for safekeeping of stock certificates, check forms and facsimile signature imprinting devices, if any; and for the preparation or use, and for keeping account of, such certificates, forms and devices. Article 6. Duties of the Trust. A. Compliance The Trust or Fund assume full responsibility for the preparation, contents and distribution of their own and/or their classes' Prospectus and for complying with all applicable requirements of the Securities Act of 1933, as amended (the "1933 Act"), the 1940 Act and any laws, rules and regulations of government authorities having jurisdiction. B. Share Certificates The Trust shall supply the Company with a sufficient supply of blank Share certificates and from time to time shall renew such supply upon request of the Company. Such blank Share certificates shall be properly signed, manually or by facsimile, if authorized by the Trust and shall bear the seal of the Trust or facsimile thereof; and notwithstanding the death, resignation or removal of any officer of the Trust authorized to sign certificates, the Company may continue to countersign certificates which bear the manual or facsimile signature of such officer until otherwise directed by the Trust. C. Distributions The Fund shall promptly inform the Company of the declaration of any dividend or distribution on account of any Fund's shares. Article 7. Compensation and Expenses. A. Annual Fee For performance by the Company pursuant to Section Two of this Agreement, the Trust and/or the Fund agree to pay the Company an annual maintenance fee for each Shareholder account as agreed upon between the parties and as may be added to or amended from time to time. Such fees may be changed from time to time subject to written agreement between the Trust and the Company. Pursuant to information in the Fund Prospectus or other information or instructions from the Fund, the Company may sub-divide any Fund into Classes or other sub- components for recordkeeping purposes. The Company will charge the Fund the same fees for each such Class or sub-component the same as if each were a Fund. B. Reimbursements In addition to the fee paid under Article 7A above, the Trust and/or Fund agree to reimburse the Company for out-of-pocket expenses or advances incurred by the Company for the items agreed upon between the parties, as may be added or amended from time to time. In addition, any other expenses incurred by the Company at the request or with the consent of the Trust and/or the Fund, will be reimbursed by the appropriate Fund. C. Payment The compensation and out-of-pocket expenses shall be accrued by the Fund and shall be paid no less frequently than monthly, and shall be paid daily upon request of the Company. The Company will maintain detailed information about the compensation and out-of-pocket expenses by Fund and Class. D. Any Schedule of compensation agreed to hereunder, as may be adjusted from time to time, shall be dated and signed by a duly authorized officer of the Trust and/or the Funds and a duly authorized officer of the Company. Article 8. Assignment of Shareholder Recordkeeping. Except as provided below, no right or obligation under this Section Two may be assigned by either party without the written consent of the other party. (1) This Agreement shall inure to the benefit of and be binding upon the parties and their respective permitted successors and assigns. (2) The Company may without further consent on the part of the Trust subcontract for the performance hereof with (A) State Street Bank and its subsidiary, Boston Financial Data Services, Inc., a Massachusetts Trust ("BFDS"), which is duly registered as a transfer agent pursuant to Section 17A(c)(1) of the Securities Exchange Act of 1934, as amended, or any succeeding statute ("Section 17A(c)(1)"), or (B) a BFDS subsidiary duly registered as a transfer agent pursuant to Section 17A(c)(1), or (C) a BFDS affiliate, or (D) such other provider of services duly registered as a transfer agent under Section 17A(c)(1) as Company shall select; provided, however, that the Company shall be as fully responsible to the Trust for the acts and omissions of any subcontractor as it is for its own acts and omissions; or (3) The Company shall upon instruction from the Trust subcontract for the performance hereof with an Agent selected by the Trust, other than BFDS or a provider of services selected by Company, as described in (2) above; provided, however, that the Company shall in no way be responsible to the Trust for the acts and omissions of the Agent. SECTION THREE: Custody Services Procurement Article 9. Appointment. The Trust hereby appoints Company as its agent to evaluate and obtain custody services from a financial institution that (i) meets the criteria established in Section 17(f) of the 1940 Act and (ii) has been approved by the Board as eligible for selection by the Company as a custodian (the "Eligible Custodian"). The Company accepts such appointment. Article 10. The Company and Its Duties. Subject to the review, supervision and control of the Board, the Company shall: (1) evaluate the nature and the quality of the custodial services provided by the Eligible Custodian; (2) employ the Eligible Custodian to serve on behalf of the Trust as Custodian of the Trust's assets substantially on the terms set forth as the form of agreement in Exhibit 2; (3) negotiate and enter into agreements with the Custodians for the benefit of the Trust, with the Trust as a party to each such agreement. The Company shall not be a party to any agreement with any such Custodian; (4) establish procedures to monitor the nature and the quality of the services provided by the Custodians; (5) continuously monitor the nature and the quality of services provided by the Custodians; and (6) periodically provide to the Trust (i) written reports on the activities and services of the Custodians; (ii) the nature and amount of disbursement made on account of the Trust with respect to each custodial agreement; and (iii) such other information as the Board shall reasonably request to enable it to fulfill its duties and obligations under Sections 17(f) and 36(b) of the 1940 Act and other duties and obligations thereof. Article 11. Fees and Expenses. A. Annual Fee For the performance by the Company pursuant to Section Three of this Agreement, the Trust and/or the Fund agree to pay the Company an annual fee as agreed upon between the parties. B. Payment In addition to the fee paid under Section 11A above, the Trust and/or Fund agree to reimburse the Company for out-of-pocket expenses or advances incurred by the Company for the items agreed upon between the parties, as may be amended from time to time. In addition, any other expenses incurred by the Company at the request or with the consent of the Trust and/or Fund, will be reimbursed by the appropriate Fund. Article 12. Representations. The Company represents and warrants that it has obtained all required approvals from all government or regulatory authorities necessary to enter into this arrangement and to provide the services contemplated in Section Three of this Agreement. SECTION FOUR: General Provisions. Article 13. Documents. A. In connection with the appointment of the Company under this Agreement, the Trust shall file with the Company the following documents: (1) A copy of the Charter and By-Laws of the Trust and all amendments thereto; (2) A copy of the resolution of the Board of the Trust authorizing this Agreement; (3) Specimens of all forms of outstanding Share certificates of the Trust or the Funds in the forms approved by the Board of the Trust with a certificate of the Secretary of the Trust as to such approval; (4) All account application forms and other documents relating to Shareholders accounts; and (5) A copy of the current Prospectus for each Fund. B. The Fund will also furnish from time to time the following documents: (1) Each resolution of the Board of the Trust authorizing the original issuance of each Fund's, and/or Class's Shares; (2) Each Registration Statement filed with the SEC and amendments thereof and orders relating thereto in effect with respect to the sale of Shares of any Fund, and/or Class; (3) A certified copy of each amendment to the governing document and the By-Laws of the Trust; (4) Certified copies of each vote of the Board authorizing officers to give Proper Instructions to the Custodian and agents for fund accountant, custody services procurement, and shareholder recordkeeping or transfer agency services; (5) Specimens of all new Share certificates representing Shares of any Fund, accompanied by Board resolutions approving such forms; (6) Such other certificates, documents or opinions which the Company may, in its discretion, deem necessary or appropriate in the proper performance of its duties; and (7) Revisions to the Prospectus of each Fund. Article 14. Representations and Warranties. A. Representations and Warranties of the Company The Company represents and warrants to the Trust that: (1) It is a business trust duly organized and existing and in good standing under the laws of the State of Delaware. (2) It is duly qualified to carry on its business in the State of Delaware. (3) It is empowered under applicable laws and by its charter and by- laws to enter into and perform this Agreement. (4) All requisite corporate proceedings have been taken to authorize it to enter into and perform its obligations under this Agreement. (5) It has and will continue to have access to the necessary facilities, equipment and personnel to perform its duties and obligations under this Agreement. (6) It is in compliance with federal securities law requirements and in good standing as a transfer agent. B. Representations and Warranties of the Trust The Trust represents and warrants to the Company that: (1) It is an investment company duly organized and existing and in good standing under the laws of its state of organization; (2) It is empowered under applicable laws and by its Charter and By- Laws to enter into and perform its obligations under this Agreement; (3) All corporate proceedings required by said Charter and By-Laws have been taken to authorize it to enter into and perform its obligations under this Agreement; (4) The Trust is an open-end investment company registered under the 1940 Act; and (5) A registration statement under the 1933 Act will be effective, and appropriate state securities law filings have been made and will continue to be made, with respect to all Shares of each Fund being offered for sale. Article 15. Indemnification. A. Indemnification by Trust The Company shall not be responsible for and the Trust or Fund shall indemnify and hold the Company, including its officers, directors, shareholders and their agents employees and affiliates, harmless against any and all losses, damages, costs, charges, counsel fees, payments, expenses and liabilities arising out of or attributable to: (1) The acts or omissions of any Custodian, (2) The Trust's or Fund's refusal or failure to comply with the terms of this Agreement, or which arise out of the Trust's or The Fund's lack of good faith, negligence or willful misconduct or which arise out of the breach of any representation or warranty of the Trust or Fund hereunder or otherwise. (3) The reliance on or use by the Company or its agents or subcontractors of information, records and documents in proper form which (a) are received by the Company or its agents or subcontractors and furnished to it by or on behalf of the Fund, its Shareholders or investors regarding the purchase, redemption or transfer of Shares and Shareholder account information; or (b) have been prepared and/or maintained by the Fund or its affiliates or any other person or firm on behalf of the Trust. (4) The reliance on, or the carrying out by the Company or its agents or subcontractors of Proper Instructions of the Trust or the Fund. (5) The offer or sale of Shares in violation of any requirement under the federal securities laws or regulations or the securities laws or regulations of any state that such Shares be registered in such state or in violation of any stop order or other determination or ruling by any federal agency or any state with respect to the offer or sale of such Shares in such state. Provided, however, that the Company shall not be protected by this Article 15.A. from liability for any act or omission resulting from the Company's willful misfeasance, bad faith, gross negligence or reckless disregard of its duties. B. Indemnification by the Company The Company shall indemnify and hold the Trust or each Fund harmless from and against any and all losses, damages, costs, charges, counsel fees, payments, expenses and liabilities arising out of or attributable to any action or failure or omission to act by the Company as a result of the Company's willful misfeasance, bad faith, gross negligence or reckless disregard of its duties. C. Reliance At any time the Company may apply to any officer of the Trust or Fund for instructions, and may consult with legal counsel with respect to any matter arising in connection with the services to be performed by the Company under this Agreement, and the Company and its agents or subcontractors shall not be liable and shall be indemnified by the Trust or the appropriate Fund for any action reasonably taken or omitted by it in reliance upon such instructions or upon the opinion of such counsel provided such action is not in violation of applicable federal or state laws or regulations. The Company, its agents and subcontractors shall be protected and indemnified in recognizing stock certificates which are reasonably believed to bear the proper manual or facsimile signatures of the officers of the Trust or the Fund, and the proper countersignature of any former transfer agent or registrar, or of a co-transfer agent or co-registrar. D. Notification In order that the indemnification provisions contained in this Article 15 shall apply, upon the assertion of a claim for which either party may be required to indemnify the other, the party seeking indemnification shall promptly notify the other party of such assertion, and shall keep the other party advised with respect to all developments concerning such claim. The party who may be required to indemnify shall have the option to participate with the party seeking indemnification in the defense of such claim. The party seeking indemnification shall in no case confess any claim or make any compromise in any case in which the other party may be required to indemnify it except with the other party's prior written consent. Article 16. Termination of Agreement. This Agreement may be terminated by either party upon one hundred twenty (120) days written notice to the other. Should the Trust exercise its rights to terminate, all out-of-pocket expenses associated with the movement of records and materials will be borne by the Trust or the appropriate Fund. Additionally, the Company reserves the right to charge for any other reasonable expenses associated with such termination. The provisions of Article 15 shall survive the termination of this Agreement. Article 17. Amendment. This Agreement may be amended or modified by a written agreement executed by both parties. Article 18. Interpretive and Additional Provisions. In connection with the operation of this Agreement, the Company and the Trust may from time to time agree on such provisions interpretive of or in addition to the provisions of this Agreement as may in their joint opinion be consistent with the general tenor of this Agreement. Any such interpretive or additional provisions shall be in a writing signed by both parties and shall be annexed hereto, provided that no such interpretive or additional provisions shall contravene any applicable federal or state regulations or any provision of the Charter. No interpretive or additional provisions made as provided in the preceding sentence shall be deemed to be an amendment of this Agreement. Article 19. Governing Law. This Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of the Commonwealth of Massachusetts Article 20. Notices. Except as otherwise specifically provided herein, Notices and other writings delivered or mailed postage prepaid to the Trust at Federated Investors Tower, Pittsburgh, Pennsylvania, 15222-3779, or to the Company at Federated Investors Tower, Pittsburgh, Pennsylvania, 15222- 3779, or to such other address as the Trust or the Company may hereafter specify, shall be deemed to have been properly delivered or given hereunder to the respective address. Article 21. Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original. Article 22. Limitations of Liability of Trustees and Shareholders of the Trust. The execution and delivery of this Agreement have been authorized by the Trustees of the Trust and signed by an authorized officer of the Trust, acting as such, and neither such authorization by such Trustees nor such execution and delivery by such officer shall be deemed to have been made by any of them individually or to impose any liability on any of them personally, and the obligations of this Agreement are not binding upon any of the Trustees or Shareholders of the Trust, but bind only the appropriate property of the Fund, or Class, as provided in the Declaration of Trust. Article 23. Limitations of Liability of Trustees and Shareholders of the Company. The execution and delivery of this Agreement have been authorized by the Trustees of the Company and signed by an authorized officer of the Company, acting as such, and neither such authorization by such Trustees nor such execution and delivery by such officer shall be deemed to have been made by any of them individually or to impose any liability on any of them personally, and the obligations of this Agreement are not binding upon any of the Trustees or Shareholders of the Company, but bind only the property of the Company as provided in the Declaration of Trust. Article 24. Assignment. This Agreement and the rights and duties hereunder shall not be assignable with respect to the Trust or the Funds by either of the parties hereto except by the specific written consent of the other party. Article 25. Merger of Agreement. This Agreement constitutes the entire agreement between the parties hereto and supersedes any prior agreement with respect to the subject hereof whether oral or written. Article 26. Successor Agent. If a successor agent for the Trust shall be appointed by the Trust, the Company shall upon termination of this Agreement deliver to such successor agent at the office of the Company all properties of the Trust held by it hereunder. If no such successor agent shall be appointed, the Company shall at its office upon receipt of Proper Instructions deliver such properties in accordance with such instructions. In the event that no written order designating a successor agent or Proper Instructions shall have been delivered to the Company on or before the date when such termination shall become effective, then the Company shall have the right to deliver to a bank or trust company, which is a "bank" as defined in the 1940 Act, of its own selection, having an aggregate capital, surplus, and undivided profits, as shown by its last published report, of not less than $2,000,000, all properties held by the Company under this Agreement. Thereafter, such bank or trust company shall be the successor of the Company under this Agreement. Article 27. Force Majeure. The Company shall have no liability for cessation of services hereunder or any damages resulting therefrom to the Fund as a result of work stoppage, power or other mechanical failure, natural disaster, governmental action, communication disruption or other impossibility of performance. Article 28. Assignment; Successors. This Agreement shall not be assigned by either party without the prior written consent of the other party, except that either party may assign to a successor all of or a substantial portion of its business, or to a party controlling, controlled by, or under common control with such party. Nothing in this Article 28 shall prevent the Company from delegating its responsibilities to another entity to the extent provided herein. Article 29. Severability. In the event any provision of this Agreement is held illegal, void or unenforceable, the balance shall remain in effect. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in their names and on their behalf under their seals by and through their duly authorized officers, as of the day and year first above written. ATTEST: INVESTMENT COMPANIES (listed on Exhibit 1) /s/ John W. McGonigle_______ By:__/s/ John F. Donahue___ John W. McGonigle John F. Donahue Secretary Chairman ATTEST: FEDERATED SERVICES COMPANY /s/ Jeannette Fisher-Garber By:_/s/ James J. Dolan_____ Jeannette Fisher-Garber James J. Dolan Secretary President EXHIBIT 1 7/24/78 Money Market Trust EX-27 5 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE. Exhibit 17 under Form N-1A Exhibit 27 under Item 601 Reg. S-K MONEY MARKET TRUST
6 12-MOS JUL-31-1994 JUL-31-1994 537,726,774 537,726,774 1,159,040 3,176,113 0 542,061,927 0 0 2,078,622 2,078,622 0 539,983,305 539,983,305 712,576,769 0 0 0 0 0 539,983,305 0 22,497,868 0 2,888,090 19,609,778 0 0 19,609,778 0 19,609,778 0 0 3,027,736,629 3,204,204,720 3,874,627 (172,593,464) 0 0 0 0 2,520,096 0 3,615,108 630,017,962 1.000 .030 .000 .030 .000 .000 1.000 46 0 .000
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