Exhibit (9)(ii) under Form N-1A
Exhibit 10 under 601/Reg. S-K
SHAREHOLDER SERVICES SUB-CONTRACT
This Agreement is made between National Pension Alliance, Ltd.
("Provider") and Federated Shareholder Services ("FSS") on behalf of the
investment companies listed in Exhibit A hereto (the "Funds"), for whom FSS
administers the Shareholder Services Plan ("Plan") and who have approved this
form of Agreement. In consideration of the mutual covenants hereinafter
contained, it is hereby agreed by and between the parties hereto as follows:
1. FSS hereby appoints Provider to render or cause to be rendered
personal services to shareholders of the Funds and/or the maintenance of
accounts of shareholders of the Funds ("Services"). Provider agrees to
provide Services which, in its best judgment, are necessary or desirable for
its customers who are investors in the Funds. Provider further agrees to
provide FSS, upon request, a written description of the Services which
Provider is providing hereunder. FSS understands and agrees that the
services Provider agrees to provide under this Agreement may be provided
through service providers who are independent contract administrators ("SP")
with whom Provider has agreements to provide such services on its behalf.
Neither Provider nor the SPs may effect any transactions in, or induce or
attempt to induce the purchase or sale of, any shares of the Funds, except as
permitted by law.
2. During the term of this Agreement, FSS will pay the Provider fees
as set forth in a written schedule delivered to the Provider pursuant to this
Agreement. The fee schedule for Provider may be changed by FSS sending a new
fee schedule to Provider pursuant to Paragraph 9 of this Agreement. For the
payment period in which this Agreement becomes effective or terminates, there
shall be an appropriate proration of the fee on the basis of the number of
days that this Agreement is in effect during the quarter. To enable the
Funds to comply with an applicable exemptive order, Provider represents that
the fees received pursuant to this Agreement will be disclosed to its
customers, will be authorized by its customers, and will not result in an
excessive fee to the Provider.
3. The Provider understands that the Department of Labor views ERISA
as prohibiting fiduciaries of discretionary ERISA assets from receiving
shareholder service fees or other compensation from funds in which the
fiduciary's discretionary ERISA assets are invested. To date, the Department
of Labor has not issued any exemptive order or advisory opinion that would
exempt fiduciaries from this interpretation. Without specific authorization
from the Department of Labor, fiduciaries should carefully avoid investing
discretionary assets in any fund pursuant to an arrangement where the
fiduciary is to be compensated by the fund for such investment. Receipt of
such compensation could violate ERISA provisions against fiduciary self-
dealing and conflict of interest and could subject the fiduciary to
substantial penalties.
4. The Provider agrees not to solicit or cause to be solicited
directly, or indirectly at any time in the future, any proxies from the
shareholders of a Fund. This paragraph 4 will survive the term of this
Agreement.
5. This Agreement shall continue in effect for one year from the date
of its execution, and thereafter for successive periods of one year if the
form of this Agreement is approved at least annually by the Board of each
Fund, including a majority of the members of the Board of the Fund who are
not interested persons of the Fund and have no direct or indirect financial
interest in the operation of the Fund's Plan or in any related documents to
FSS subcontract 2
the Plan ("Disinterested Board Members") cast in person at a meeting called
for that purpose.
6. Notwithstanding paragraph 5, this Agreement may be terminated as
follows:
(a) at any time, without the payment of any penalty, by the vote
of a majority of the Disinterested Board Members of the Fund or by a
vote of a majority of the outstanding voting securities of the Fund as
defined in the Investment Company Act of 1940 on not more than sixty
(60) days' written notice to the parties to this Agreement;
(b) automatically in the event of the Agreement's assignment as
defined in the Investment Company Act of 1940; and
(c) by either party to the Agreement without cause by giving the
other party at least sixty (60) days' written notice of its intention
to terminate.
After the date of a termination pursuant to subparagraph 6(c) as to
any Fund, FSS will not be obligated to pay Provider the fees set forth
in the written schedule referred to in paragraph 2 with respect to any
shares of such Fund that are first placed or purchased in Provider
customer accounts after the date of such termination. If FSS
terminates this Agreement pursuant to subparagraph 6(c), FSS will
remain obligated to pay Provider such fees as to each share of such
Fund that was considered in the calculation of such fees as of the
date of such termination (a "Pre-Termination Share"), for so long as
such Pre-Termination Share is held in any of Provider customer
FSS subcontract 3
accounts and Provider continues to perform the services contemplated
by this Agreement, but only so long as the Shareholder Services
Agreement between FSS and the Funds remains in effect. FSS will not
be obligated to pay Provider fees relating to Pre-Termination Shares
if this Agreement is terminated pursuant to subparagraph 6(a) or 6(b).
Further, the provisions of this Agreement will remain in full force
and effect as to such Pre-Termination Shares to the extent necessary
for each party to perform its obligations with respect to Pre-
Termination Shares for which fees continue to be due subsequent to
termination.
7. The Provider agrees to obtain any taxpayer identification number
certification from its customers required under Section 3406 of the Internal
Revenue Code, and any applicable Treasury regulations, and to provide the
Fund or its designee with timely written notice of any failure to obtain such
taxpayer identification number certification in order to enable the
implementation of any required backup withholding.
8. The execution and delivery of this Agreement have been authorized
by the Trustees of FSS and signed by an authorized officer of FSS, acting as
such, and neither such authorization by such Trustees nor such execution and
delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, and the
obligations of this Agreement are not binding upon any of the Trustees or
shareholders of FSS, but bind only the trust property of FSS as provided in
the Declaration of Trust of FSS.
FSS subcontract 4
9. Notices of any kind to be given hereunder shall be in writing
(including facsimile communication) and shall be duly given if delivered to
FSS at Federated Xxxxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000-0000, Attention:
President; and if delivered to Provider at National Pension Alliance, Ltd.,
Corbel/NPA, Inc. General Partner, Attention: Xxx Xxxxxxxx; 0000 Xxxxxxxxxx
Xxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000.
10. This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject hereof
whether oral or written. If any provision of this Agreement shall be held or
made invalid by a court or regulatory agency decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby.
Subject to the provisions of Sections 5 and 6, hereof, this Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and shall be governed by Pennsylvania law;
provided, however, that nothing herein shall be construed in a manner
inconsistent with the Investment Company Act of 1940 or any rule or
regulation promulgated by the Securities and Exchange Commission thereunder.
11. This Agreement may be executed by different parties on separate
counterparts, each of which, when so executed and delivered, shall be an
original, and all such counterparts shall together constitute one and the
same instrument.
12. This Agreement shall not be assigned by any party without the prior
written consent of FSS in the case of assignment by Provider, or of Provider
in the case of assignment by FSS, except that any party may assign to a
successor all of or a substantial portion of its business to a party
controlling, controlled by, or under common control with such party.
FSS subcontract 5
13. This Agreement may be amended by FSS from time to time by the
following procedure. FSS will mail a copy of the amendment to the Provider's
address, as shown below. If the Provider does not object to the amendment
within thirty (30) days after its receipt, the amendment will become part of
the Agreement. The Provider's objection must be in writing and be received
by FSS within such thirty days.
14. This Agreement may be terminated with regard to a particular Fund
or Class at any time, without the payment of any penalty, by FSS (subject to
the same fee continuation provisions set forth in paragraph 6 above with
respect to a termination under subparagraph 6(c)) or by the vote of a
majority of the Disinterested Trustees or Directors, as applicable, or by a
majority of the outstanding voting securities of the particular Fund or Class
on not more than sixty (60) days' written notice to the Provider. This
Agreement may be terminated by Provider on sixty (60) days' written notice
to FSS.
15. The Provider acknowledges and agrees that FSS has entered into this
Agreement solely in the capacity of agent for the Funds and administrator of
the Plan.
FSS subcontract 6
NATIONAL PENSION
ALLIANCE,LTD.
By: CORBEL/NPA, INC.,
General Partner
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Dated: September 19, 1994 By:/s/Stuart Hack
Authorized Signature
Senior Vice President
Title
Stuart Hack
Print Name of Authorized Signature
FEDERATED SHAREHOLDER SERVICES
Federated Investors Tower
FSS subcontract 7
Pittsburgh, Pennsylvania 15222-3779
By: /s/Xxxxxx X. Xxxx
Vice President
Xxxxxx X. Xxxx
Print Name of Authorized Signature
EXHIBIT A to Shareholder Services Sub-Contract with
National Pension Alliance, Ltd.
Funds covered by this Agreement:
Federated U.S. Government Securities Fund: 1-3 Years (Institutional
Service Shares) (formerly, Federated Short-Intermediate Trust)
Federated Arms Fund (Institutional Service Shares)
Federated U.S. Government Securities Fund: 2-5 Years (Institutional
Service Shares) (formerly, Federated Intermediate Government Trust)
Intermediate Income Fund (Institutional Service Shares)
Federated Income Trust (Institutional Service Shares)
Federated GNMA Trust (Institutional Service Shares)
Federated Max-Cap Fund (Institutional Service Shares)
Federated Managed Growth and Income Fund (Institutional Shares)
FSS subcontract 8
Federated Managed Income Fund (Institutional Shares)
Federated Managed Growth Fund (Institutional Shares)
Federated Managed Aggressive Growth Fund (Institutional Shares)
Federated Short-Term Income Fund (Institutional Service Shares)
Federated High Yield Trust
Fortress Bond Fund
Federated International Income Fund
Federated Stock Trust
Federated Growth Strategies Fund (Class A Shares) (formerly, Federated
Growth Trust)
Federated Stock & Bond Fund, Inc.
Federated International Equity Fund
Federated Equity Income Fund, Inc. (Class A Shares)
Federated Utility Fund, Inc. (Class A Shares)
Federated Mid-Cap Fund (11/94)
Federated Mini-Cap Fund (11/94)
Federated U.S. Government Bond Fund (11/95)
Federated American Leaders Fund, Inc. (Class A Shares) (11/95)
Federated Fund for U.S. Government Securities, Inc. (Class A Shares)
(11/95)
Federated High Income Bond Fund, Inc. (Class A Shares) (11/95)
Federated Strategic Income Fund (Class A Shares) (11/95)
Federated U.S. Government Securities Fund: 5-10 Years (Institutional
Service Shares (2/96)
Federated Capital Appreciation Fund (Class A Shares) (2/96)
Shareholder Service Fees
FSS subcontract 9
1. During the term of this Agreement, FSS will pay Provider a
quarterly fee. This fee will be computed at the annual rate of .25 of 1% of
the average net asset value of shares of the Funds held during the quarter in
accounts for which the Provider provides Services under this Agreement, so
long as the average net asset value of Shares in the Funds during the quarter
equals or exceeds such minimum amount as FSS shall from time to time
determine and communicate in writing to the Provider.
2. For the quarterly period in which the Agreement becomes effective
or terminates, there shall be an appropriate proration of any fee payable on
the basis of the number of days that the Agreement is in effect during the
quarter.
