xxix
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
WesMark Funds
(Name of Registrant as Specified In Its Charter)
Federated Investors
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary proxy materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------
4) Date Filed:
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<PAGE>
2
PRELIMINARY
WESMARK FUNDS
WesMark Balanced Fund
WesMark Bond Fund
WesMark Growth Fund
WesMark West Virginia Municipal Bond Fund
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD december 17, 1999
A special meeting of shareholders of WesMark Funds (the
"Trust"), which presently consists of four portfolios or series, WesMark
Balanced Fund (the "Balanced Fund"), WesMark Bond Fund (the "Bond Fund"),
WesMark Growth Fund (the "Growth Fund") and WesMark West Virginia Municipal Bond
Fund (the "West Virginia Fund") (individually a "Fund," and collectively the
"Funds") will be held at 5800 Corporate Drive, Pittsburgh, Pennsylvania
15237-7000, at 2:00 p.m. (Eastern time), on December 17, 1999 to consider
proposals:
(1) To elect five Trustees.
(2) To make changes to the Funds' fundamental investment
policies:
(a) To amend the Funds' fundamental investment
policies regarding borrowing money and issuing
senior securities;
(b) To amend the Funds' fundamental investment
policies regarding investments in real estate;
(c) To amend the Funds' fundamental investment
policies regarding investments in commodities;
(d) To amend the Funds' fundamental investment
policies regarding underwriting securities;
(e) To amend the Funds' fundamental investment
policies regarding lending by the Funds;
(f) To amend the Funds' fundamental investment
policies regarding concentration of the Funds'
investments in the securities of companies in
the same industry; and
(g) To amend, and to make non-fundamental, the
Funds' fundamental investment policies regarding
buying securities on margin.
(3) To eliminate the Funds' fundamental investment policies
on selling securities short.
To transact such other business as may properly come
before the meeting or any adjournment thereof.
The Board of Trustees has fixed October 22, 1999 as the record date for
determination of shareholders entitled to vote at the meeting.
By Order of the Board of Trustees,
John W. McGonigle
Secretary
November 12, 1999
YOU CAN HELP THE TRUST AVOID THE NECESSITY AND EXPENSE OF SENDING FOLLOW-UP
LETTERS TO ENSURE A QUORUM BY PROMPTLY SIGNING AND RETURNING THE ENCLOSED PROXY.
IF YOU ARE UNABLE TO ATTEND THE MEETING, PLEASE MARK, SIGN, DATE AND RETURN THE
ENCLOSED PROXY SO THAT THE NECESSARY QUORUM MAY BE REPRESENTED AT THE SPECIAL
MEETING. THE ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES.
<PAGE>
3
TABLE OF CONTENTS
About the Proxy Solicitation and the Meeting.................................
Election of Five Trustees....................................................
About the Election of Trustees...............................................
Trustees Standing for Election...............................................
Nominee Not Presently Serving as a Trustee...................................
Approval of Changes to the Funds' Fundamental Investment
Policies................................................................
Approval of the Elimination of the Funds' Fundamental Investment
Policies Regarding Selling Securities Short.............................
Information About the Trust..................................................
Proxies, Quorum and Voting at the Meeting....................................
Share Ownership of the Trustees..............................................
Trustee Compensation.........................................................
Officers and Incumbent Trustees of the Trust.................................
Other Matters and Discretion of Attorneys Named in the Proxy.................
<PAGE>
29
4
PRELIMINARY
PROXY STATEMENT
WESMARK FUNDS
WesMark Balanced Fund
WesMark Bond Fund
WesMark Growth Fund
WesMark West Virginia Municipal Bond Fund
5800 Corporate Drive
Pittsburgh, PA 15237-7000
About the Proxy Solicitation and the Meeting
The enclosed proxy is solicited on behalf of the Board of Trustees of
the Trust (the "Board" or "Trustees"), which presently consists of four
portfolios or series, WesMark Balanced Fund (the "Balanced Fund"), WesMark Bond
Fund (the "Bond Fund"), WesMark Growth Fund (the "Growth Fund") and WesMark West
Virginia Municipal Bond Fund (the "West Virginia Fund") (individually a "Fund,"
and collectively the "Funds"). The proxies will be voted at the special meeting
of shareholders of the Trust to be held on December 17, 1999, at 5800 Corporate
Drive, Pittsburgh, Pennsylvania 15237-7000, at 2:00 p.m. (such special meeting
and any adjournment or postponement thereof are referred to as the "Meeting").
The cost of the solicitation, including the printing and mailing of
proxy materials, will be borne by the Trust. In addition to solicitations
through the mails, proxies may be solicited by officers, employees, and agents
of the Trust or, if necessary, a communications firm retained for this purpose.
Such solicitations may be by telephone, telegraph, through the Internet or
otherwise. Any telephonic solicitations will follow procedures designed to
ensure accuracy and prevent fraud, including requiring identifying shareholder
information, recording the shareholder's instructions, and confirming to the
shareholder after the fact. Shareholders who communicate proxies by telephone or
by other electronic means have the same power and authority to issue, revoke, or
otherwise change their voting instruction as shareholders submitting proxies in
written form. The Trust may reimburse custodians, nominees, and fiduciaries for
the reasonable costs incurred by them in connection with forwarding solicitation
materials to the beneficial owners of shares held of record by such persons.
The Board has reviewed the proposed changes recommended in the
investment policies of the Funds and approved them, subject to shareholder
approval. The purposes of the Meeting are set forth in the accompanying Notice.
The Trustees know of no business other than that mentioned in the Notice that
will be presented for consideration at the Meeting. Should other business
properly be brought before the Meeting, proxies will be voted in accordance with
the best judgment of the persons named as proxies. This Proxy Statement and the
enclosed proxy card are expected to be mailed on or about November 12, 1999, to
shareholders of record at the close of business on October 22, 1999 (the "Record
Date").
On the Record Date, the Funds had the following number of outstanding
shares of beneficial interest:
Balanced Fund: _______________ shares
Bond Fund: _______________ shares
Growth Fund: _______________ shares
West Virginia Fund: _______________ shares
The Funds' annual reports, which include audited financial statements
for the fiscal year ended January 31, 1999, were previously mailed to
shareholders. The Funds' semi-annual reports, which contain unaudited financial
statements for the period ended July 31, 1999, were also previously mailed to
shareholders. The Trust will promptly provide, without charge and upon request,
to each person to whom this Proxy Statement is delivered, a copy of a Fund's
annual report and/or semi-annual report. Requests for an annual report or
semi-annual report for a Fund may be made by writing to the Trust's principal
executive offices or by calling the Trust. The Trust's principal executive
offices are located at 5800 Corporate Drive, Pittsburgh, Pennsylvania
15237-7000. The Trust's toll-free telephone number is 1-800-341-7400.
PROPOSAL #1: ELECTION OF FIVE TRUSTEES
The persons named as proxies intend to vote in favor of the election of
Nicholas P. Constantakis, John F. Cunningham, J. Christopher Donahue, Charles F.
Mansfield, Jr. and John S. Walsh (collectively, the "Nominees") as Trustees of
the Trust. Messrs. Constantakis, Cunninghan, Mansfield and Walsh are presently
serving as Trustees. If elected by shareholders, Mr. Donahue is expected to
assume his responsibilities as a Trustee effective January 1, 2000. Please see
"About the Election of Trustees" below for current information about the
Nominees, and "Officers and Incumbent Trustees of the Trust" in this Proxy
Statement for current information about the incumbent Trustees who have
previously been elected by shareholders. It is currently anticipated that each
of the incumbent Trustees will continue to serve as Trustees following the
Meeting.
Mr. Constantakis was appointed a Trustee on February 23, 1998, to fill a
vacancy created by the decision to expand the size of the Board. Messrs.
Cunningham, Mansfield and Walsh were appointed Trustees on January 1, 1999, also
to fill vacancies resulting from the decision to expand the size of the Board.
Mr. Donahue is being proposed for election to the Board due to the desire to
expand the size of the Board.
All Nominees have consented to serve if elected. If elected, the
Trustees will hold office without limit in time until death, resignation,
retirement, or removal or until the next meeting of shareholders to elect
Trustees and the election and qualification of their successors. Election of a
Trustee is by a plurality vote, which means that the five individuals receiving
the greatest number of votes at the Meeting will be deemed to be elected.
If any Nominee for election as a Trustee named above shall by reason of
death or for any other reason become unavailable as a candidate at the Meeting,
votes pursuant to the enclosed proxy will be cast for a substitute candidate by
the proxies named on the proxy card, or their substitutes, present and acting at
the Meeting. Any such substitute candidate for election as a Trustee who is an
"interested person" (as defined in the Investment Company Act of 1940, as
amended (the "1940 Act")) of the Trust shall be nominated by the Executive
Committee. The selection of any substitute candidate for election as a Trustee
who is not an "interested person" shall be made by a majority of the Trustees
who are not "interested persons" of the Trust. The Board has no reason to
believe that any Nominee will become unavailable for election as a Trustee.
THE BOARD OF TRUSTEES RECOMMENDS THAT
SHAREHOLDERS VOTE TO ELECT AS TRUSTEES THE NOMINEES FOR
ELECTION TO THE BOARD OF TRUSTEES OF THE TRUST
About the Election of Trustees
The Declaration of Trust provides that Trustees will continue in office
until their respective successors are elected, and therefore, when elected,
Trustees will hold office during the lifetime of the Trust, except that: (a) any
Trustee may resign; (b) any Trustee may be removed by written instrument signed
by at least two-thirds of the number of Trustees prior to such removal; (c) any
Trustee who requests to be retired or who has become mentally or physically
incapacitated may be retired by written instrument signed by a majority of the
other Trustees; and (d) a Trustee may be removed at any special meeting of the
shareholders by a vote of two-thirds of the outstanding shares of the Trust. In
case a vacancy shall exist for any reason, the remaining Trustees will fill such
vacancy by appointment of another Trustee. The Trustees will not fill any
vacancy by appointment if, immediately after filling such vacancy, less than
two-thirds of the Trustees then holding office would have been elected by the
shareholders. If, at any time, less than a majority of the Trustees holding
office have been elected by the shareholders, the Trustees then in office will
call a shareholders' meeting for the purpose of electing Trustees to fill
vacancies. Otherwise, there will normally be no meeting of shareholders called
for the purpose of electing Trustees.
Set forth below is a listing of: (i) the Trustees standing for
election, and (ii) the Nominee standing for election who is not presently
serving as a Trustee, along with their addresses, birth dates, present positions
with the Trust, and principal occupations during the past five years:
Trustees Standing for Election
Nicholas P. Constantakis
175 Woodshire Drive
Pittsburgh, PA
Birth date: September 3, 1939
Trustee
Director or Trustee of the Federated Fund Complex; formerly, Partner, Andersen
Worldwide SC.
John F. Cunningham
353 El Brillo Way
Palm Beach, FL
Birth date: March 5, 1943
Trustee
Director or Trustee of some of the Funds in the Federated Fund Complex;
Chairman, President and Chief Executive Officer, Cunningham & Co., Inc.
(strategic business consulting); Trustee Associate, Boston College;
Director, Iperia Corp. (communications/software); formerly, Director,
Redgate Communications and EMC Corporation (computer storage systems).
Previous Positions: Chairman of the Board and Chief Executive Officer,
Computer Consoles, Inc.; President and Chief Operating Officer, Wang
Laboratories; Director, First National Bank of Boston; Director, Apollo
Computer, Inc.
Charles F. Mansfield, Jr.
80 South Road
Westhampton Beach, NY
Birth date: April 10, 1945
Trustee
Director or Trustee of some of the Funds in the Federated Fund Complex;
Management Consultant. Previous Positions: Chief Executive Officer, PBTC
International Bank; Partner, Arthur Young & Company (now Ernst & Young LLP);
Chief Financial Officer of Retail Banking Sector, Chase Manhattan Bank; Senior
Vice President, Marine Midland Bank; Vice President, Citibank; Assistant
Professor of Banking and Finance, Frank G. Zarb School of Business, Hofstra
University.
John S. Walsh
2007 Sherwood Drive
Valparaiso, IN
Birth date: November 28, 1957
Trustee
Director or Trustee of some of the Funds in the Federated Fund Complex;
President and Director, Heat Wagon, Inc. (manufacturer of construction temporary
heaters); President and Director, Manufacturers Products, Inc. (distributor of
portable construction heaters); President, Portable Heater Parts, a division of
Manufacturers Products, Inc.; Director, Walsh & Kelly, Inc. (heavy highway
contractor); formerly, Vice President, Walsh & Kelly, Inc.
<PAGE>
Nominee Not Presently Serving as a Trustee
J. Christopher Donahue
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Birth date: April 11, 1949
Executive Vice President
President or Executive Vice President of the Federated Fund Complex; Director or
Trustee of some of the Funds in the Federated Fund Complex; President, Chief
Executive Officer and Director, Federated Investors, Inc.; President and
Trustee, Federated Investment Management Company; President and Trustee,
Federated Investment Counseling; President and Director, Federated Global
Investment Management Corp.; President, Passport Research, Ltd.; Trustee,
Federated Shareholder Services Company; Director, Federated Services Company.
Mr. Donahue is the son of John F. Donahue, Chairman and Trustee of the Trust.
APPROVAL OF CHANGES TO THE FUNDS'
FUNDAMENTAL INVESTMENT POLICIES
Introduction to Proposals #2(a) to #2(g) and #3.
The 1940 Act (which was adopted to protect mutual fund shareholders)
requires investment companies such as the Funds to adopt certain specific
investment policies or restrictions that can be changed only by shareholder
vote. An investment company may also elect to designate other policies or
restrictions that may be changed only by shareholder vote. Both types of
policies and restrictions are often referred to as "fundamental policies." These
policies and restrictions limit the investment activities of the Funds'
investment adviser.
After the Trust was formed in 1996, legal and regulatory requirements
applicable to mutual funds changed. For example, certain restrictions imposed by
state laws and regulations were preempted by the National Securities Markets
Improvement Act of 1996 ("NSMIA") and no longer apply. As a result, the Funds
are subject to fundamental policies that are no longer required to be
fundamental, and to other policies that are no longer required at all.
Accordingly, the Trustees have authorized the submission to the Funds'
shareholders for their approval, and recommend that shareholders approve, the
amendment, reclassification and/or elimination of certain of the Funds'
fundamental policies.
The proposed amendments would:
(i) simplify, modernize and standardize the fundamental policies that
are required to be stated under the 1940 Act;
(ii) reclassify as operating policies those fundamental policies
that are not required to be fundamental under the 1940 Act;
and
(iii) eliminate those fundamental policies that are no longer
required by the securities laws of the various states.
By reducing the number of policies that can be changed only by
shareholder vote, the Trustees believe that the Funds would be able to minimize
the costs and delays associated with holding future shareholder meetings to
revise fundamental policies that become outdated or inappropriate. The Trustees
also believe that the investment adviser's ability to manage the Funds' assets
in a changing investment environment will be enhanced and that investment
management opportunities will be increased by these changes. The chart that
follows briefly describes the differences between fundamental policies and
non-fundamental policies.
<TABLE>
<CAPTION>
<S> <C> <C>
Fundamental Policies Non-Fundamental Policies
-------------------------------------- ---------------------------------------
Who must approve changes in the Board of Trustees and shareholders Board of Trustees
policies?
How quickly can a change in the Fairly slowly, since a vote of Fairly quickly, because the change
policies be made? shareholders is required can be accomplished by action of the
Board of Trustees
What is the relative cost to Costly to change because a Less costly to change because a
change a policy? shareholder vote requires holding a change can be accomplished by action
meeting of shareholders of the Board of Trustees
</TABLE>
The recommended changes are specified below. Each Proposal will be
voted on separately by shareholders of each Fund, and the approval of each
Proposal by each Fund will require the approval of a majority of the outstanding
voting shares of the Fund as defined in the 1940 Act. (See "Proxies, Quorum and
Voting at the Meeting" below.)
Description of Proposed Changes
The proposed standardized fundamental investment policies cover those
areas for which the 1940 Act requires the Funds to have a fundamental
restriction. They satisfy current regulatory requirements and are written to
provide flexibility to respond to future legal, regulatory, market or technical
changes. The proposed standardized changes will not affect the Funds' investment
objectives. Although the proposed changes in fundamental policies will allow the
Funds greater flexibility to respond to future investment opportunities, the
Board of Trustees of the Trust does not anticipate that the changes,
individually or in the aggregate, will result at this time in a material change
in the level of investment risk associated with investments in the Funds. Nor
does the Board of Trustees anticipate that the proposed changes in fundamental
investment policies will, individually or in the aggregate, change materially
the manner in which the Funds are managed.
The following is the text and a summary description of the proposed
changes to the Funds' fundamental policies and restrictions. Any non-fundamental
policy may be modified or eliminated by the Trustees at any future date without
any further approval of shareholders. Shareholders should note that certain of
the fundamental policies that are treated separately below currently are
combined within a single existing fundamental policy.
Presently, if a Fund adheres to a fundamental or non-fundamental
percentage restriction at the time of an investment or transaction, a later
increase or decrease in the percentage resulting from a change in the value of
the Fund's portfolio securities or the amount of its total assets does not
create a violation of the policy. This policy will continue to apply for any of
the proposed changes that are approved.
PROPOSAL #2: APPROVAL OF AMENDMENTS TO THE FUNDS' FUNDAMENTAL INVESTMENT
POLICIES
PROPOSAL #2(a): TO AMEND THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES
REGARDING BORROWING MONEY AND ISSUING SENIOR SECURITIES
The 1940 Act requires the Funds to have a fundamental investment policy
defining their ability to borrow money or issue senior securities. In general,
limitations on borrowing are designed to protect shareholders and their
investments by restricting a fund's ability to subject its assets to any claims
of creditors or senior security holders who would be entitled to dividends or
rights on liquidation of the fund prior to the rights of shareholders.
Shareholders of the Funds are being asked to approve a new standardized
fundamental policy for borrowing and the issuance of senior securities designed
to reflect all current regulatory requirements. The Funds' current policies
state:
"The Fund will not issue senior securities, except that the Fund may
borrow money in amounts up to one-third of the value of its total
assets, including the amount borrowed. The Fund will not borrow money
or engage in reverse repurchase agreements for investment leverage, but
rather as a temporary, extraordinary, or emergency measure or to
facilitate management of the portfolio by enabling the Fund to meet
redemption requests when the liquidation of portfolio securities is
deemed to be inconvenient or disadvantageous. The Fund will not
purchase any securities while borrowings in excess of 5% of its total
assets are outstanding. During the period any reverse repurchase
agreements are outstanding, but only to the extent necessary to assure
completion of the reverse repurchase agreements, the Fund will restrict
the purchase of portfolio instruments to money market instruments
maturing on or before the expiration date of the reverse repurchase
agreements."
Senior Securities-Generally. A "senior security" is an obligation of an
investment company with respect to its earnings or assets that takes precedence
over the claims of the fund's shareholders with respect to the same earnings or
assets. The 1940 Act generally prohibits a fund from issuing senior securities,
in order to limit the use of leverage. In general, an investment company uses
leverage when it borrows money to enter into securities transactions, or
acquires an asset without being required to make payment until a later time.
The interpretations of the staff of the U.S. Securities and Exchange
Commission (the "SEC" or the "Commission") allow a fund to engage in a number of
types of transactions which might otherwise be considered to create "senior
securities" or "leverage," so long as the fund meets certain collateral
requirements designed to protect shareholders. For example, some transactions
that may create senior security concerns include short sales, certain options
and futures transactions, reverse repurchase agreements and securities
transactions that obligate the fund to pay money at a future date (such as
when-issued, forward commitment or delayed delivery transactions). When engaging
in such transactions, the fund must set aside money or securities to meet the
SEC staff's collateralization requirements. This procedure effectively
eliminates the fund's ability to engage in leverage for these types of
transactions.
Borrowing-Generally. Under the 1940 Act, an investment company is permitted to
borrow up to 5% of its total assets for temporary purposes. A fund may borrow
only from banks. If borrowings exceed 5%, the fund must have assets totaling at
least 300% of the borrowing when the amount of the borrowing is added to the
fund's other assets. The effect of this provision is to allow the fund to borrow
from banks in amounts up to one-third (33 1/3%) of its total assets (including
the amount borrowed). Investment companies typically borrow money to meet
redemptions in order to avoid a forced, unplanned sale of portfolio securities.
This technique allows the fund greater flexibility to buy and sell portfolio
securities for investment or tax considerations, rather than for cash flow
considerations. The costs of borrowing, however, can also reduce the fund's
total return.
The borrowing restrictions of the Funds permit borrowing only as a
temporary measure for extraordinary purposes, and restrict additional investment
by the Funds while borrowings in excess of 5% of the Funds' total assets are
outstanding. The Funds' policies also limit the types of securities that may be
purchased while any reverse repurchase agreements are outstanding. The proposed
investment policy would provide greater flexibility to the Funds, and would
permit the Funds to borrow money, directly or indirectly (such as through
reverse repurchase agreements, as presently), and issue senior securities within
the limits established under the 1940 Act or under any rule or regulation of the
Commission, or any SEC staff interpretation thereof. If the new policy is
approved by shareholders, the Funds do not anticipate changing their current
practices relating to borrowing money and issuing senior securities. As a matter
of operating policy, the Funds do not intend to engage in leveraging.
Upon shareholder approval, the fundamental investment policy governing
borrowing money and issuing senior securities by each Fund will state:
"The Fund may borrow money, directly or indirectly, and issue senior
securities to the maximum extent permitted under the 1940 Act."
<PAGE>
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #2(b): TO AMEND THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES REGARDING
INVESTMENTS IN REAL ESTATE
Under the 1940 Act, the Funds' policies concerning investments in real
estate must be fundamental. The Funds currently have fundamental investment
policies prohibiting the purchase or sale of real estate. The current policies,
however, allow the Funds to invest in municipal bonds that are secured by real
estate, and state:
"The Fund will not buy or sell real estate, although it may invest in
municipal bonds secured by real estate or interests in real estate."
The proposed fundamental investment policy will not permit the Funds to
purchase real estate directly, but will permit the purchase of securities whose
payments of interest or principal are secured by mortgages or other rights to
real estate in the event of default. The investment policy will also enable the
Funds to invest in companies within the real estate industry, provided such
investments are consistent with the Funds' investment objectives and policies.
If the new policy is approved by shareholders, the Funds do not presently
anticipate changing their current practices relating to investing in real
estate.
Upon shareholder approval, the fundamental investment policy governing
investments in real estate by each Fund will state:
"The Fund may not purchase or sell real estate, provided that this
restriction does not prevent the Fund from investing in issuers which
invest, deal, or otherwise engage in transactions in real estate or
interests therein, or investing in securities that are secured by real
estate or interests therein. The Fund may exercise its rights under
agreements relating to such securities, including the right to enforce
security interests and to hold real estate acquired by reason of such
enforcement until that real estate can be liquidated in an orderly
manner."
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #2(c): TO AMEND THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES
REGARDING INVESTMENTS IN COMMODITIES
Under the 1940 Act, the Funds' policies concerning investments in
commodities must be fundamental. The Funds are currently subject to fundamental
restrictions prohibiting the purchase or sale of commodities and which provide:
"The Fund will not purchase or sell commodities. However, the Fund may
purchase put and call options on portfolio securities and on financial
futures contracts. In addition, the Fund reserves the right to hedge
the portfolio by entering into financial futures contracts to sell puts
and calls on financial futures contracts."
Historically, the most common types of commodities have been physical
commodities such as wheat, cotton, rice and corn. However, under federal law,
futures contracts are considered to be commodities and, therefore, financial
futures contracts, such as futures contracts related to currencies, stock
indices or interest rates are considered to be commodities. Financial futures
contracts enable an investment company to buy (or sell) the right to receive the
cash difference between the contract price for an underlying asset or index and
the future market price, if the market price is higher. If the future price is
lower, the investment company is obligated to pay (or, if the investment company
sold the contract, the investment company receives) the amount of the decrease.
Investment companies often desire to invest in financial futures contracts and
options related to such contracts for hedging or other investment reasons.
The proposed policy would provide appropriate flexibility for the Funds
to invest in financial futures contracts and related options. As proposed, the
policy is broad enough to permit investment in financial futures instruments for
either investment or hedging purposes. Using financial futures instruments can
involve substantial risks, and would be utilized only if the Funds' investment
adviser determined that such investments are advisable and such practices were
disclosed in the Funds' prospectuses or statements of additional information.
Gains or losses on investments in financial futures instruments depend on the
direction of securities prices, interest rates and other economic factors, and
losses from engaging in these types of transactions are potentially unlimited.
At the present time, the Funds do not intend to engage in these activities
beyond what is disclosed in the Funds' current prospectuses. As a matter of
non-fundamental operating policy, for purposes of the proposed policy,
investments in transactions involving futures contracts and options, forward
currency contracts, swap transactions and other financial contracts that settle
by payment of cash are not deemed to be investments in commodities.
Upon shareholder approval, the fundamental investment policy for each
Fund governing investments in commodities will state:
"The Fund may not purchase or sell physical commodities, provided that
the Fund may purchase securities of companies that deal in
commodities."
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #2(d): TO AMEND THE FUNDS' FUNDAMENTAL INVESTMENT
POLICIES REGARDING UNDERWRITING SECURITIES
Under the 1940 Act, the Funds' policies relating to underwriting are
required to be fundamental. Each Fund currently is subject to a fundamental
investment policy prohibiting it from acting as an underwriter of the securities
of other issuers, and states:
"The Fund 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 securities in accordance with its
investment objective, policies, and limitations."
A person or company generally is considered an underwriter under the
federal securities laws if it participates in the public distribution of
securities of other issuers, usually by purchasing the securities from the
issuer and re-selling the securities to the public. From time to time, a mutual
fund may purchase a security for investment purposes which it later sells or
redistributes to institutional investors or others under circumstances where the
fund could possibly be considered to be an underwriter under the technical
definition of underwriter contained in the securities laws.
Upon shareholder approval, the fundamental investment policy concerning
underwriting for each Fund will state:
"The Fund may not underwrite the securities of other issuers, except
that the Fund may engage in transactions involving the acquisition,
disposition or resale of its portfolio securities, under circumstances
where it may be considered to be an underwriter under the Securities
Act of 1933."
This does not constitute a substantive change in the Funds' policies.
Rather, it reflects a restatement, and is submitted to shareholders to comply
with the 1940 Act's requirements.
<PAGE>
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #2(e): TO AMEND THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES
REGARDING LENDING BY THE FUNDS
Under the 1940 Act, the Funds' policies concerning lending must be
fundamental. The Funds currently are subject to fundamental investment
restrictions limiting their ability to make loans which state:
All Funds except the West Virginia Fund:
"The Fund will not lend any of its assets except portfolio securities
up to one-third of the value of its total assets. The Fund may,
however, acquire publicly or non-publicly issued debt securities or
enter into repurchase agreements in accordance with its investment
objective, policies, and limitations or the Declaration of Trust."
West Virginia Fund:
"The Fund will not lend any of its assets, except portfolio securities
up to one-third of the value of its total assets. The Fund may,
however, acquire publicly or non-publicly issued municipal bonds or
temporary investments or enter into repurchase agreements in accordance
with its investment objective, policies, and limitations or the
Declaration of Trust."
In order to ensure that each Fund may invest in certain debt securities
or repurchase agreements, which could technically be characterized as the making
of loans, the Funds' current fundamental restrictions specifically permit such
investments. In addition, the Funds' fundamental policies permit the Funds to
lend their portfolio securities. Securities lending is a practice that has
become common in the mutual fund industry and involves the temporary loan of
portfolio securities to parties who use the securities for the settlement of
securities transactions. The collateral delivered to a Fund in connection with
such a transaction is then invested to provide the Fund with additional income
it might not otherwise have.
Securities lending involves certain risks if the borrower fails to
return the securities. However, management believes that with appropriate
controls, such as 100% or greater collateralization of the loan and regular
monitoring of the creditworthiness of the counterparty, the ability to engage in
securities lending does not materially increase the risks to the Funds. In
addition, securities on loan cannot generally be sold until the term of the loan
is over.
Upon approval of the Funds' shareholders, the current fundamental
investment policy governing the lending of assets for each Fund will be replaced
by the following fundamental policy, which states:
"The Fund may not make loans, provided that this restriction does not
prevent the Fund from purchasing debt obligations, entering into
repurchase agreements, lending its assets to broker/dealers or
institutional investors and investing in loans, including assignments
and participation interests."
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #2(f): TO AMEND THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES REGARDING
CONCENTRATION OF THE FUNDS' INVESTMENTS IN THE SECURITIES OF COMPANIES IN THE
SAME INDUSTRY
Under the 1940 Act, the Funds' policies relating to the concentration
of their investments in securities of companies in a single industry must be
fundamental. The SEC staff considers a mutual fund to "concentrate" its
investments if 25% or more of its total assets are invested in a particular
industry (not counting U.S. government securities, bank instruments issued by
domestic banks and municipal securities).
The Funds currently have a fundamental investment policy prohibiting
them from concentrating their investments in a single industry:
All Funds except the West Virginia Fund:
"The Fund will not purchase securities if, as a result of such
purchase, 25% or more of its total assets would be invested in any one
industry. However, the Fund may invest as temporary investments more
than 25% of the value of its assets in cash or cash items, securities
issued or guaranteed by the U.S. government, its agencies, or
instrumentalities, or instruments secured by these money market
instruments, such as repurchase agreements."
West Virginia Fund:
"The Fund will not purchase securities if, as a result of such
purchase, 25% or more of its total assets would be invested in any one
industry or in industrial development bonds or other securities, the
interest upon which is paid from revenues of similar types of projects.
However, the Fund may invest as temporary investments more than 25% of
the value of its assets in cash or cash items, securities issued or
guaranteed by the U.S. government, its agencies, or instrumentalities,
or instruments secured by these money market instruments, such as
repurchase agreements."
Upon the approval by the Funds' shareholders, the fundamental
investment policy governing concentration for each Fund will provide:
"The Fund will not make investments that will result in the
concentration of its investments in the securities of issuers primarily
engaged in the same industry. Government securities, municipal
securities and bank instruments will not be deemed to constitute an
industry. To conform to the current view of the SEC staff that only
domestic bank instruments may be excluded from industry concentration
limitations, as a matter of non-fundamental policy, the Fund will not
exclude foreign bank instruments from industry concentration limitation
tests so long as the policy of the SEC remains in effect. In addition,
investments in bank instruments, and investments in certain industrial
development bonds funded by activities in a single industry, will be
deemed to constitute investment in an industry, except when held for
temporary defensive purposes. The investment of more than 25% of the
value of the Fund's total assets in any one industry will constitute
`concentration.'"
The Trust's Board has also approved related non-fundamental policies
for each Fund, which will be adopted if the new fundamental policy is approved
by shareholders. The policies provide that in applying the concentration
restriction: (1) utility companies will be divided according to their services,
for example, gas, gas transmission, electric and telephone will each be
considered a separate industry; (2) financial service companies will be
classified according to the end users of their services, for example, automobile
finance, bank finance and diversified finance will each be considered a separate
industry; and (3) asset-backed securities will be classified according to the
underlying assets securing such securities.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #2(g): TO AMEND, AND TO MAKE NON-FUNDAMENTAL, THE FUNDS' FUNDAMENTAL
INVESTMENT POLICIES REGARDING BUYING SECURITIES ON MARGIN
The Funds are not required to have a fundamental investment restriction
on margin transactions. Accordingly, it is proposed that the Funds' existing
fundamental policies be replaced with non-fundamental restrictions. The Funds'
current policies provide:
"The Fund will not purchase any securities on margin, but may obtain
such short-term credits as may be necessary for clearance of purchases
and sales of securities. The deposit or payment by the Fund of initial
or variation margin in connection with futures contracts or related
options transactions is not considered the purchase of a security on
margin."
The proposed non-fundamental policy makes some changes in wording from
the existing fundamental restrictions, but does not result in a material change
to the Funds' current practices with regard to these types of transactions. Upon
the approval of the elimination of the existing fundamental policies on engaging
in margin transactions, the Funds would become subject to the following
non-fundamental policy:
"The Fund will not purchase securities on margin, provided that the
Fund may obtain short-term credits necessary for the clearance of
purchases and sales of securities, and further provided that the Fund
may make margin deposits in connection with its use of financial
options and futures, forward and spot currency contracts, swap
transactions and other financial contracts or derivative instruments."
This does not constitute a substantive change in the Funds' policies. Rather, it
reflects a restatement, and is submitted to shareholders to comply with the 1940
Act's requirements.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #3: ELIMINATION OF THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES
REGARDING SELLING SECURITIES SHORT
The Board has determined that the Funds' current fundamental
investment policies pertaining to selling securities short are unnecessary and
should be removed. Until NSMIA was adopted in 1996, the securities laws of
several states required every investment company which intended to sell its
shares in those states to adopt policies governing a variety of operational
issues, including a policy on short sales of securities. As a consequence of
those restrictions, the Funds adopted the investment policies described below
and agreed that the policies would be changed only upon the approval of
shareholders. Since these prohibitions are no longer required under current law,
the management of the Funds has recommended, and the Board has determined, that
the policies prohibiting short sales of securities should be removed.
Notwithstanding the elimination of these fundamental restrictions, the Funds
expect to continue not to engage in short sales of securities, except to the
extent that the Funds contemporaneously own or have the right to acquire, at no
additional cost, securities identical to, or convertible into or exchangeable
for, those sold short.
Upon the approval by shareholders of this Proposal #3, the following
fundamental investment restriction prohibiting the short selling of securities
by the Funds will be eliminated: "the Fund will not sell any securities short."
The approval of this Proposal by each Fund will require the approval of a
majority of the outstanding voting shares of the Fund as defined in the 1940
Act. (See "Proxies, Quorum and Voting at the Meeting," below.)
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
INFORMATION ABOUT THE TRUST
Proxies, Quorum and Voting at the Meeting
Only shareholders of record on the Record Date will be entitled to vote
at the Meeting. Each share of the Trust is entitled to one vote. Fractional
shares are entitled to proportionate shares of one vote. Under both the
Investment Company Act of 1940 and the Declaration of Trust, the favorable vote
of a "majority of the outstanding voting shares" of the Trust or a Fund means:
(a) the holders of 67% or more of the outstanding voting securities present at
the Meeting, if the holders of 50% or more of the outstanding voting securities
of the Trust or the Fund are present or represented by proxy; or (b) the vote of
the holders of more than 50% of the outstanding voting securities, whichever is
less. The favorable vote of a majority of the outstanding voting shares of each
Fund is required to approve each of the Proposals for each Fund, except the
election of the Trustees. Trustees are elected by a plurality vote.
Any person giving a proxy has the power to revoke it any time prior to
its exercise by executing a superseding proxy or by submitting a written notice
of revocation to the Secretary of the Trust. In addition, although mere
attendance at the Meeting will not revoke a proxy, a shareholder present at the
Meeting may withdraw his or her proxy and vote in person. All properly executed
and unrevoked proxies received in time for the Meeting will be voted in
accordance with the instructions contained in the proxies. If no instruction is
given on the proxy, the persons named as proxies will vote the shares
represented thereby in favor of the matters set forth in the attached Notice.
In order to hold the Meeting, a "quorum" of shareholders must be
present. Holders of one-third of the shares of the Trust entitled to vote,
present in person or by proxy, shall be required to constitute a quorum for the
purpose of voting on the election of Trustees. Holders of one-half of the shares
of each Fund entitled to vote, present in person or by proxy, shall be required
to constitute a quorum for the purpose of voting on the other proposals.
For purposes of determining a quorum for transacting business at the
Meeting, abstentions and broker "non-votes" (that is, proxies from brokers or
nominees indicating that such persons have not received instructions from the
beneficial owner or other persons entitled to vote shares on a particular matter
with respect to which the brokers or nominees do not have discretionary power)
will be treated as shares that are present but which have not been voted. For
this reason, abstentions and broker non-votes will have the effect of a "no"
vote for purposes of obtaining the requisite approval of some of the proposals.
If a quorum is not present, the persons named as proxies may vote those
proxies which have been received to adjourn the Meeting to a later date. In the
event that a quorum is present but sufficient votes in favor of one or more of
the proposals have not been received, the persons named as proxies may propose
one or more adjournments of the Meeting to permit further solicitations of
proxies with respect to such proposal(s). All such adjournments will require the
affirmative vote of a plurality of the shares present in person or by proxy at
the session of the Meeting to be adjourned. The persons named as proxies will
vote AGAINST any such adjournment those proxies which they are required to vote
against the proposal and will vote in FAVOR of the adjournment other proxies
which they are authorized to vote. A shareholder vote may be taken on other
proposals in this Proxy Statement prior to any such adjournment if sufficient
votes have been received for approval.
As referred to in this Proxy Statement, the "Federated Fund Complex,"
"The Funds" or "Funds" include the following investment companies: Cash Trust
Series, Inc.; Cash Trust Series II; CCB Funds; Federated Adjustable Rate U.S.
Government Fund, Inc.; Federated American Leaders Fund, Inc.; Federated ARMs
Fund; Federated Core Trust; Federated Equity Funds; Federated Equity Income
Fund, Inc.; Federated Fund for U.S. Government Securities, Inc.; Federated GNMA
Trust; Federated Government Income Securities, Inc.; Federated Government Trust;
Federated High Income Bond Fund, Inc.; Federated High Yield Trust; Federated
Income Securities Trust; Federated Income Trust; Federated Index Trust;
Federated Institutional Trust; Federated Insurance Series; Federated Municipal
Opportunities Fund, Inc.; Federated Municipal Securities Fund, Inc.; Federated
Municipal Trust; Federated Short-Term Municipal Trust; Federated Stock and Bond
Fund, Inc.; Federated Stock Trust; Federated Tax-Free Trust; Federated Total
Return Series, Inc.; Federated U.S. Government Bond Fund; Federated U.S.
Government Securities Fund: 1-3 Years; Federated U.S. Government Securities
Fund: 2-5 Years; Federated U.S. Government Securities Fund: 5-10 Years;
Federated Utility Fund, Inc.; Fixed Income Securities, Inc.; Intermediate
Municipal Trust; International Series, Inc.; Investment Series Funds, Inc.;
Edward D. Jones & Co. Daily Passport Cash Trust; Liberty Term Trust, Inc. -
1999; Liberty U.S. Government Money Market Trust; Managed Series Trust; Money
Market Management, Inc.; Money Market Obligations Trust; Money Market
Obligations Trust II; Money Market Trust; Municipal Securities Income Trust;
Newpoint Funds; Regions Funds; RIGGS Funds; Tax-Free Instruments Trust; The
Planters Funds; WesMark Funds; WCT Funds; and World Investment Series, Inc.
Share Ownership of the Trustees
Officers and Trustees of the Trust own less than 1% of each Fund's outstanding
shares.
At the close of business on the Record Date, the following persons owned, to the
knowledge of management, more than 5% of the outstanding shares of the Balanced
Fund: [To be inserted]
At the close of business on the Record Date, the following persons owned, to the
knowledge of management, more than 5% of the outstanding shares of the Bond
Fund: [To be inserted]
At the close of business on the Record Date, the following persons owned, to the
knowledge of management, more than 5% of the outstanding shares of the Growth
Fund: [To be inserted]
At the close of business on the Record Date, the following persons owned, to the
knowledge of management, more than 5% of the outstanding shares of the West
Virginia Fund: [To be inserted]
<TABLE>
<CAPTION>
<S> <C> <C>
Trustee Compensation
Name and Position Aggregate Total Compensation Paid
With Trust Compensation From Fund Complex+
From
Trust1#
- --------------------------------------- -------------------- ----------------------------------------------------------
John F. Donahue*@ $0 $0 for the Trust and 54 other
Chairman and Trustee investment companies in the Fund Complex
Thomas G. Bigley $1,416.84 $113,860.22 for the Trust and 54 other
Trustee investment companies in the Fund Complex
John T. Conroy, Jr. $1,558.76 $125,264.48 for the Trust and 54 other
Trustee investment companies in the Fund Complex
Nicholas P. Constantakis $1,416.84 $47,958.02 for the Trust and 29 other
Trustee investment companies in the Fund Complex
John F. Cunningham** $0 $0 for the Trust and 46 other
Trustee investment companies in the Fund Complex
Lawrence D. Ellis, M.D.* $1,416.84 $113,860.22 for the Trust and 54 other
Trustee investment companies in the Fund Complex
Edward C. Gonzales * $0 $0 for the Trust and 1 other investment
President, Treasurer and Trustee company in the Fund Complex
Peter E. Madden $1,416.84 $113,860.22 for the Trust and 54 other
Trustee investment companies in the Fund Complex
Charles F. Mansfield, Jr.** $0 $0 for the Trust and 50 other
Trustee investment companies in the Fund Complex
John E. Murray, Jr., J.D., S.J.D. @ $1,416.84 $113,860.22 for the Trust and 54 other
Trustee investment companies in the Fund Complex
Marjorie P. Smuts $1,416.84 $113,860.22 for the Trust and 54 other
Trustee investment companies in the Fund Complex
John S. Walsh** $0 $0 for the Trust and 48 other
Trustee investment companies in the Fund Complex
</TABLE>
1 Information is furnished for the fiscal year ended January 31, 1999.
# The aggregate compensation is provided for the Trust, which is comprised of
four portfolios.
+ The information is provided for the last calendar year.
* The Trustee is deemed to be an "interested person" as defined in the 1940 Act.
@ Member of the Executive Committee.
** Messrs. Cunningham, Mansfield and Walsh became members of the Board of
Trustees on January 1, 1999. They did not receive any fees from the Fund Complex
as of the last calendar year.
During the fiscal year ended January 31, 1999, there were four meetings
of the Board of Trustees. The interested Trustees, other than Dr. Ellis, do not
receive fees from the Trust. Dr. Ellis is an interested person by reason of the
employment of his son-in-law by Federated Securities Corp. All Trustees were
reimbursed for expenses for attendance at Board of Trustees meetings.
The Executive Committee of the Board of Trustees handles the
responsibilities of the Board between meetings of the Board. Other than its
Executive Committee, the Trust has one Board committee, the Audit Committee.
Generally, the function of the Audit Committee is to assist the Board of
Trustees in fulfilling its duties relating to the Trust's accounting and
financial reporting practices and to serve as a direct line of communication
between the Board of Trustees and the independent auditors. The specific
functions of the Audit Committee include recommending the engagement or
retention of the independent auditors, reviewing with the independent auditors
the plan and the results of the auditing engagement, approving professional
services provided by the independent auditors prior to the performance of such
services, considering the range of audit and non-audit fees, reviewing the
independence of the independent auditors, reviewing the scope and results of the
Trust's procedures for internal auditing, and reviewing the Trust's system of
internal accounting controls.
For the most recently completed fiscal year, Messrs. Conroy, Madden and
Murray served on the Audit Committee. These Trustees are not interested Trustees
of the Trust. During the fiscal year ended January 31, 1999, there were four
meetings of the Audit Committee. All of the members of the Audit Committee were
present for each meeting. Each member of the Audit Committee receives an annual
fee of $100 plus $25 for attendance at each meeting and is reimbursed for
expenses of attendance.
Officers and Incumbent Trustees of the Trust
The executive officers of the Trust are elected annually by the Board
of Trustees. Each officer holds the office until qualification of his successor.
The names and birth dates of the executive officers of the Trust, as well as of
the incumbent Trustees who have previously been elected by shareholders, and
their principal occupations during the last five years, are set forth below:
John F. Donahue
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Birth date: July 28, 1924
Chairman and Trustee
Date Became an Officer and a Trustee: February 29, 1996
Chief Executive Officer and Director or Trustee of the Federated Fund Complex;
Chairman and Director, Federated Investors, Inc.; Chairman and Trustee,
Federated Investment Management Company; Chairman and Director, Federated
Investment Counseling and Federated Global Investment Management Corp.;
Chairman, Passport Research, Ltd. Mr. Donahue is the father of J. Christopher
Donahue, Executive Vice President of the Trust and Nominee for Trustee.
<PAGE>
Thomas G. Bigley
15 Old Timber Trail
Pittsburgh, PA
Birth date: February 3, 1934
Trustee
Date Became a Trustee: February 29, 1996
Director or Trustee of the Federated Fund Complex; Director, Member of Executive
Committee, Children's Hospital of Pittsburgh; Director, Robroy Industries, Inc.
(coated steel conduits/computer storage equipment); formerly, Senior Partner,
Ernst & Young LLP; Director, MED 3000 Group, Inc. (physician practice
management); Director, Member of Executive Committee, University of Pittsburgh.
John T. Conroy, Jr.
Wood/Commercial Dept.
John R. Wood Associates, Inc. Realtors
3255 Tamiami Trail North
Naples, FL
Birth date: June 23, 1937
Trustee
Date Became a Trustee: February 29, 1996
Director or Trustee of the Federated Fund Complex; President, Investment
Properties Corporation; Senior Vice President, John R. Wood and Associates,
Inc., Realtors; Partner or Trustee in private real estate ventures in Southwest
Florida; formerly: President, Naples Property Management, Inc. and Northgate
Village Development Corporation.
Lawrence D. Ellis, M.D.
3471 Fifth Avenue
Suite 1111
Pittsburgh, PA
Birth date: October 11, 1932
Trustee
Date Became a Trustee: February 29, 1996
Director or Trustee of the Federated Fund Complex; Professor of Medicine,
University of Pittsburgh; Medical Director, University of Pittsburgh Medical
Center-Downtown; Hematologist, Oncologist, and Internist, University of
Pittsburgh Medical Center; Member, National Board of Trustees, Leukemia Society
of America.
<PAGE>
Edward C. Gonzales
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Birth date: October 22, 1930
President, Treasurer and Trustee
Date Became an Officer and Trustee: February 29, 1996
Trustee or Director of some of the Funds in the Federated Fund Complex;
President, Executive Vice President and Treasurer of some of the Funds in the
Federated Fund Complex; Vice Chairman, Federated Investors, Inc.; Vice
President, Federated Investment Management Company, Federated Investment
Counseling, Federated Global Investment Management Corp. and Passport Research,
Ltd.; Executive Vice President and Director, Federated Securities Corp.;
Trustee, Federated Shareholder Services Company.
Peter E. Madden
One Royal Palm Way
100 Royal Palm Way
Palm Beach, FL
Birth date: March 16, 1942
Trustee
Date Became a Trustee: February 29, 1996
Director or Trustee of the Federated Fund Complex; formerly: Representative,
Commonwealth of Massachusetts General Court; President, State Street Bank and
Trust Company and State Street Corporation. Previous Positions: Director, VISA
USA and VISA International; Chairman and Director, Massachusetts Bankers
Association; Director, Depository Trust Corporation; Director, The Boston Stock
Exchange.
John E. Murray, Jr., J.D., S.J.D.
President, Duquesne University
Pittsburgh, PA
Birth date: December 20, 1932
Trustee
Date Became a Trustee: February 29, 1996
Director or Trustee of the Federated Fund Complex; President, Law Professor,
Duquesne University; Consulting Partner, Mollica & Murray; Director, Michael
Baker Corp. (engineering, construction, operations, and technical services).
Previous Positions: Dean and Professor of Law, University of Pittsburgh School
of Law; Dean and Professor of Law, Villanova University School of Law.
Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA
Birth date: June 21, 1935
Trustee
Date Became a Trustee: February 29, 1996
Director or Trustee of the Federated Fund Complex; Public
Relations/Marketing/Conference Planning. Previous Positions: National
Spokesperson, Aluminum Company of America; television producer; business owner.
J. Christopher Donahue
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Birth date: April 11, 1949
Executive Vice President
Date Became an Officer: February 29, 1996
President or Executive Vice President of the Federated Fund Complex; Director or
Trustee of some of the Funds in the Federated Fund Complex; President, CEO and
Director, Federated Investors, Inc.; President and Trustee, Federated Investment
Management Company; President and Trustee, Federated Investment Counseling;
President and Director, Federated Global Investment Management Corp.; President,
Passport Research, Ltd.; Trustee, Federated Shareholder Services Company;
Director, Federated Services Company. Mr. Donahue is the son of John F. Donahue,
Chairman and Trustee of the Trust.
John W. McGonigle
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Birth date: October 26, 1938
Executive Vice President and Secretary
Date Became an Officer: February 29, 1996
Executive Vice President and Secretary of the Federated Fund Complex; Executive
Vice President, Secretary, and Director, Federated Investors, Inc.; Trustee,
Federated Investment Management Company and Federated Investment Counseling;
Director, Federated Global Investment Management Corp.; Director, Federated
Services Company; Director, Federated Securities Corp.
Richard B. Fisher
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Birth date: May 17, 1923
Vice President
Date Became an Officer: February 29, 1996
President or Vice President of some of the Funds in the Federated Fund Complex;
Director or Trustee of some of the Funds in the Federated Fund Complex;
Executive Vice President, Federated Investors, Inc.; Chairman and Director,
Federated Securities Corp.
C. Christine Thompson
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Birth date: September 1, 1957
Vice President
Date Became an Officer: February 29, 1996
Vice President and Assistant Treasurer of some of the Funds in the Federated
Fund Complex.
None of the officers of the Trust received salaries from the Trust
during the fiscal year ended January 31, 1999.
OTHER MATTERS AND DISCRETION OF ATTORNEYS NAMED IN THE PROXY
The Trust is not required, and does not intend, to hold regular annual
meetings of shareholders. Shareholders wishing to submit proposals for
consideration for inclusion in a proxy statement for the next meeting of
shareholders should send their written proposals to WesMark Funds, 5800
Corporate Drive, Pittsburgh, Pennsylvania 15237-7000, so that they are received
within a reasonable time before any such meeting.
No business other than the matters described above is expected to come
before the Meeting, but should any other matter requiring a vote of shareholders
arise, including any question as to an adjournment or postponement of the
Meeting, the persons named on the enclosed proxy card will vote on such matters
according to their best judgment in the interests of the Trust.
SHAREHOLDERS ARE REQUESTED TO COMPLETE, DATE AND SIGN THE ENCLOSED
PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE,
WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES.
By Order of the Board of Trustees,
John W. McGonigle
Secretary
November 12, 1999
<PAGE>
WESMARK FUNDS
WesMark Balanced Fund
WesMark Bond Fund
WesMark Growth Fund
WesMark West Virginia Municipal Bond Fund
Investment Adviser
WESBANCO BANK WHEELING
One Bank Plaza
Wheeling, West Virginia 26003
Distributor
EDGEWOOD SERVICES, INC.
Clearing Operations
P.O. Box 897
Pittsburgh, Pennsylvania 15230-0897
Administrator
FEDERATED SERVICES COMPANY
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of WesMark
Balanced Fund (the "Fund"), a portfolio of WesMark Funds (the "Trust"), hereby
appoint Patricia F. Conner, Gail Cagney, William Haas, Suzanne W. Land and Ann
M. Scanlon, or any one of them, true and lawful attorneys, with the power of
substitution of each, to vote all shares of the Fund which the undersigned is
entitled to vote at the Special Meeting of Shareholders (the "Meeting") to be
held on December 17, 1999, at 5800 Corporate Drive, Pittsburgh, Pennsylvania, at
2:00 p.m. and at any adjournment thereof.
The attorneys named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. Discretionary authority
is hereby conferred as to all other matters as may properly come before the
Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF WESMARK FUNDS.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR"
THE PROPOSALS.
By checking the box "FOR" below, you will vote to approve each of the proposed
items in this proxy, and to elect each of the nominees as Trustees of the Trust
FOR [ ]
Proposal 1 To elect Nicholas P. Constantakis, John F. Cunningham,
J. Christopher Donahue, Charles F.
Mansfield, Jr. and John S. Walsh as Trustees of the Trust
FOR [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
VOTE FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR"
a particular nominee, mark the "VOTE FOR ALL
EXCEPT" box and strike a line through the name of
each nominee for whom you are NOT voting. Your
shares will be voted for the remaining nominees.
Proposal 2 To make changes to the Fund's fundamental investment policies:
2(a) To amend the Fund's fundamental investment policy regarding
borrowing money and issuing senior securities
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(b) To amend the Fund's fundamental investment policy regarding
investments in real estate
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(c) To amend the Fund's fundamental investment policy regarding
investments in commodities
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(d) To amend the Fund's fundamental investment policy regarding
underwriting securities
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(e) To amend the Fund's fundamental investment policy regarding
lending by the Fund
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(f) To amend the Fund's fundamental investment policy regarding
concentration of the Fund's investments in the securities of
companies in the same industry
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(g) To amend, and to make non-fundamental, the Fund's fundamental
investment policy regarding buying securities on margin
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
Proposal 3 To eliminate the Fund's fundamental investment policy on
selling securities short
YOUR VOTE IS
IMPORTANT Please
complete, sign and
return this card
as soon as
possible.
Dated
Signature
Signature (Joint Owners)
Please sign this proxy exactly as your name appears on the books of the Trust.
Joint owners should each sign personally. Directors and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of WesMark
Bond Fund (the "Fund"), a portfolio of WesMark Funds (the "Trust"), hereby
appoint Patricia F. Conner, Gail Cagney, William Haas, Suzanne W. Land and Ann
M. Scanlon, or any one of them, true and lawful attorneys, with the power of
substitution of each, to vote all shares of the Fund which the undersigned is
entitled to vote at the Special Meeting of Shareholders (the "Meeting") to be
held on December 17, 1999, at 5800 Corporate Drive, Pittsburgh, Pennsylvania, at
2:00 p.m. and at any adjournment thereof.
The attorneys named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. Discretionary authority
is hereby conferred as to all other matters as may properly come before the
Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF WESMARK FUNDS.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR"
THE PROPOSALS.
By checking the box "FOR" below, you will vote to approve each of the proposed
items in this proxy, and to elect each of the nominees as Trustees of the Trust
FOR [ ]
Proposal 1 To elect Nicholas P. Constantakis, John F. Cunningham,
J. Christopher Donahue, Charles F.
Mansfield, Jr. and John S. Walsh as Trustees of the Trust
FOR [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
VOTE FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR"
a particular nominee, mark the "VOTE FOR ALL
EXCEPT" box and strike a line through the name of
each nominee for whom you are NOT voting. Your
shares will be voted for the remaining nominees.
Proposal 2 To make changes to the Fund's fundamental investment policies:
2(a) To amend the Fund's fundamental investment policy regarding
borrowing money and issuing senior securities
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(b) To amend the Fund's fundamental investment policy regarding
investments in real estate
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(c) To amend the Fund's fundamental investment policy regarding
investments in commodities
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(d) To amend the Fund's fundamental investment policy regarding
underwriting securities
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(e) To amend the Fund's fundamental investment policy regarding
lending by the Fund
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(f) To amend the Fund's fundamental investment policy regarding
concentration of the Fund's investments in the securities of
companies in the same industry
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(g) To amend, and to make non-fundamental, the Fund's fundamental
investment policy regarding buying securities on margin
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
Proposal 3 To eliminate the Fund's fundamental investment policy on
selling securities short
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
YOUR VOTE IS
IMPORTANT Please
complete, sign and
return this card
as soon as
possible.
Dated
Signature
Signature (Joint Owners)
Please sign this proxy exactly as your name appears on the books of the Trust.
Joint owners should each sign personally. Directors and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of WesMark
Growth Fund (the "Fund"), a portfolio of WesMark Funds (the "Trust"), hereby
appoint Patricia F. Conner, Gail Cagney, William Haas, Suzanne W. Land and Ann
M. Scanlon, or any one of them, true and lawful attorneys, with the power of
substitution of each, to vote all shares of the Fund which the undersigned is
entitled to vote at the Special Meeting of Shareholders (the "Meeting") to be
held on December 17, 1999, at 5800 Corporate Drive, Pittsburgh, Pennsylvania, at
2:00 p.m. and at any adjournment thereof.
The attorneys named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. Discretionary authority
is hereby conferred as to all other matters as may properly come before the
Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF WESMARK FUNDS.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR"
THE PROPOSALS.
By checking the box "FOR" below, you will vote to approve each of the proposed
items in this proxy, and to elect each of the nominees as Trustees of the Trust
FOR [ ]
Proposal 1 To elect Nicholas P. Constantakis, John F. Cunningham,
J. Christopher Donahue, Charles F. Mansfield, Jr. and
John S. Walsh as Trustees of the Trust
FOR [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
VOTE FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR"
a particular nominee, mark the "VOTE FOR ALL
EXCEPT" box and strike a line through the name of
each nominee for whom you are NOT voting. Your
shares will be voted for the remaining nominees.
Proposal 2 To make changes to the Fund's fundamental investment policies:
2(a) To amend the Fund's fundamental investment policy regarding
borrowing money and issuing senior securities
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(b) To amend the Fund's fundamental investment policy regarding
investments in real estate
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(c) To amend the Fund's fundamental investment policy regarding
investments in commodities
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(d) To amend the Fund's fundamental investment policy regarding
underwriting securities
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(e) To amend the Fund's fundamental investment policy regarding
lending by the Fund
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(f) To amend the Fund's fundamental investment policy regarding
concentration of the Fund's investments in the securities of
companies in the same industry
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(g) To amend, and to make non-fundamental, the Fund's fundamental
investment policy regarding buying securities on margin
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
Proposal 3 To eliminate the Fund's fundamental investment policy on
selling securities short
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
YOUR VOTE IS
IMPORTANT Please
complete, sign and
return this card
as soon as
possible.
Dated
Signature
Signature (Joint Owners)
Please sign this proxy exactly as your name appears on the books of the Trust.
Joint owners should each sign personally. Directors and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of WesMark
West Virginia Municipal Bond Fund (the "Fund"), a portfolio of WesMark Funds
(the "Trust"), hereby appoint Patricia F. Conner, Gail Cagney, William Haas,
Suzanne W. Land and Ann M. Scanlon, or any one of them, true and lawful
attorneys, with the power of substitution of each, to vote all shares of the
Fund which the undersigned is entitled to vote at the Special Meeting of
Shareholders (the "Meeting") to be held on December 17, 1999, at 5800 Corporate
Drive, Pittsburgh, Pennsylvania, at 2:00 p.m. and at any adjournment thereof.
The attorneys named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. Discretionary authority
is hereby conferred as to all other matters as may properly come before the
Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF WESMARK FUNDS.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR"
THE PROPOSALS.
By checking the box "FOR" below, you will vote to approve each of the proposed
items in this proxy, and to elect each of the nominees as Trustees of the Trust
FOR [ ]
Proposal 1 To elect Nicholas P. Constantakis, John F. Cunningham,
J. Christopher Donahue, Charles F. Mansfield, Jr.
and John S. Walsh as Trustees of the Trust
FOR [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
VOTE FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR"
a particular nominee, mark the "VOTE FOR ALL
EXCEPT" box and strike a line through the name of
each nominee for whom you are NOT voting. Your
shares will be voted for the remaining nominees.
Proposal 2 To make changes to the Fund's fundamental investment policies:
2(a) To amend the Fund's fundamental investment policy regarding
borrowing money and issuing senior securities
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(b) To amend the Fund's fundamental investment policy regarding
investments in real estate
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(c) To amend the Fund's fundamental investment policy regarding
investments in commodities
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(d) To amend the Fund's fundamental investment policy
regarding underwriting securities
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(e) To amend the Fund's fundamental investment policy regarding
lending by the Fund
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(f) To amend the Fund's fundamental investment policy regarding
concentration of the Fund's investments in the securities of
companies in the same industry
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(g) To amend, and to make non-fundamental, the Fund's fundamental
investment policy regarding buying securities on margin
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
Proposal 3 To eliminate the Fund's fundamental investment policy on
selling securities short
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
YOUR VOTE IS
IMPORTANT Please
complete, sign and
return this card
as soon as
possible.
Dated
Signature
Signature (Joint Owners)
Please sign this proxy exactly as your name appears on the books of the Trust.
Joint owners should each sign personally. Directors and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
