Frequently Asked Questions (F.A.Q.)

1. What was the settlement about?
   On November 28, 2005 certain subsidiaries of Federated Investors, Inc. (the "Respondents") reached a settlement with the United States Securities and Exchange Commission. The settlement concerned allegations that two (2) of the Respondents entered into arrangements with certain Federated mutual fund investors that resulted in market timing in certain Federated mutual funds during the period of March 2002 through September 2003. Also, there were allegations that one of the Respondents allowed a Federated mutual fund investor and a Federated employee to engage in late trading for the period of July 1998 through September 2003. The Respondents agreed to the settlement without admitting or denying the SEC's findings.
2. What is market timing?
   Market timing includes frequent buying and selling of shares of the same mutual fund or the rapid buying and selling of mutual fund shares in order to exploit inefficiencies in mutual fund pricing. While not illegal per se, this practice can harm other mutual fund shareholders because it can dilute the value of their shares or it can disrupt the management of the mutual fund's investment portfolio, which can cause the specific mutual fund to incur costs borne by other shareholders to accommodate the timer's frequent buying and selling.
3. What were the monetary terms of the settlement agreed upon with the SEC?
   The settlement terms that were agreed to by the Respondents include payment of $72 million to the Fair Fund to compensate eligible shareholders.
4. What are the responsibilities of the Independent Distribution Consultant (IDC) who developed the Distribution Plan?
   The IDC is responsible for the development of a plan for the distribution of the Fair Fund provided for in the SEC settlement. The Distribution Plan includes:
   • An explanation of the methodology used to calculate the payments to eligible shareholders;
   • The procedures for identifying eligible shareholders, and;
   • The procedures for distributing the proceeds and interest to eligible shareholders.
5. When was the Distribution Plan approved by the SEC?
   The Distribution Plan was approved by the SEC on January 28, 2010. See the "Related Documents" tab for a link to the Order approving the Distribution Plan as well as a link to the approved Distribution Plan.
6. Can I get a copy of the Distribution Plan or the SEC Order? How can I view these documents?
   Links to the Distribution Plan and other related documents are available on the "Related Documents" tab.
7. Who is included in this distribution? How do I know if I am part of the distribution?
   You are part of the distribution if you held any of the affected Federated funds between March 2002 and September 2003 and the Independent Distribution Consultant determined that you were adversely affected by the alleged market timing. The affected funds are listed in the tables found at the end of the Distribution Plan. Click on the "Related Documents" tab on www.federatedfairfundsettlement.com for a link to the Distribution Plan.
8. If the alleged late trading occurred from 1998 to 2003, why are distributions only being made to investors during the period from March 2002 to September 2003?
   Only the Federated employee engaged in trading subject to the settlement prior to March 2002. The Independent Distribution Consultant determined that, because the impact of the employee's trading on the Federated Funds was small (less than $14,000), it would be more cost-effective to distribute the amount directly to the affected funds. All of the other trading addressed in the settlement occurred from March 2002 to September 2003, which is why investors during this period are receiving distributions.
9. How will my payment(s) be calculated?
   The Independent Distribution Consultant has developed a Distribution Plan for the Fair Fund according to a methodology developed in consultation the Respondents and the independent Trustees of the affected Federated mutual funds, which was approved by the SEC. The Distribution Plan is to "provide for investors their proportionate share of losses suffered by the fund due to market timing and late trading, and a proportionate share of advisory fees paid by funds that suffered such losses during the period of such market timing."
10. I made/lost money on my purchase and/or sale. Does this affect my distribution amount?
    No. Eligible shareholders received an amount based on the adverse impact of alleged market timers on their funds, as calculated by the Independent Distribution Consultant.
11. I held my shares in one brokerage firm, but transferred my account to another company. Does the Distribution Plan account for this?
    The Distribution Plan accounts for changes in ownership and changes in brokerage accounts for the entire period in question. The Distribution Plan will attempt to distribute one payment to each eligible shareholder, regardless of where the securities were purchased or held.
12. Do I need to ask for and submit a claim form?
    The Distribution Plan does not require that eligible shareholders submit a claim form in order to participate in the distribution. The Independent Distribution Consultant will oversee the process to determine the amounts due to each eligible shareholder subject to the Distribution Plan.
13. Can I exclude myself from these distributions?
    These distributions are being made pursuant to an SEC order and not a class action settlement; there is not an option to exclude you from the distributions.
14. Who should I contact if I have additional questions?
    Please contact the Fund Administrator for the Federated Investors Fair Fund Settlement Distribution. The numbers can be found in the "Contact" section of the website.