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 will outline a distribution methodology developed in consultation with Federated and acceptable to the staff of the Commission.

Under the terms of the SEC's order, an Independent Distribution Consultant (IDC) must submit a Distribution Plan to the SEC to distribute the Fair Fund containing $72 million to injured investors. An IDC has been appointed and is developing a distribution plan. Once the IDC completes the Distribution Plan, notice of the proposed Distribution Plan must be published for at least 30 days, specifying how copies of the proposed Distribution Plan may be obtained, and describing the process by which persons may comment on the Plan. A link to that Notice will be provided on this website and the Notice shall be published in the SEC Docket. After publication and comment, the proposed Plan will be submitted to the SEC for formal approval. When the SEC approves the proposed Plan, with modifications as appropriate, distributions will begin.

The following link will direct you to the SEC website where you can view the most recent information and the current status. http://sec.gov/litigation/admin/2009/34-61118.htm