Description of the Settlement

On November 28, 2005, the SEC issued an Order to settle administrative proceedings against Federated. Federated agreed to entry of the Order without admitting or denying the Commission's findings therein. Pursuant to the Order, Federated was required to pay a total of $72 million into a Fair Fund. The Order also provided for the appointment of an Independent Distribution Consultant (IDC) who is required to develop a plan to distribute the Fair Fund to the shareholders of Federated mutual funds affected by the market timing and late trading activity discussed in the Order (the "Plan"). The Plan outlines a distribution methodology developed in consultation with Federated and acceptable to the staff of the Commission.

An IDC has been appointed and has developed a distribution plan. The Distribution Plan has been submitted to the SEC and has been approved on January 28, 2010. Distributions are estimated to begin Q2 of 2010. Please see the “Related Documents” page for a link to the Order approving the Plan as well as a link to the Approved Plan of Distribution.