SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange
Act of 1934(Amendment No.______)
Filed by the Registrant []
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or
Sec. 240.14a-12
Liberty U.S. Government Money Market Trust
(Name of Registrant as Specified In Its Charter)
Federated Investors
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
[X] Fee previously paid
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:
4.Proposed maximum aggregate value of transaction:
Set forth the amount on which the filing fee is
calculated and state how it was determined.
[ ] Check the 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 File:
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 13, 1994
A Special Meeting of the shareholders of Liberty U.S. Government Money
Market Trust (the "Trust") will be held at the Trust's principal offices on the
19th Floor of the Federated Investors Tower, Grant Street and Liberty Avenue,
Pittsburgh, Pennsylvania 15222-3779, at 2:00 p.m. December 13, 1994, for the
following purposes:
(1) To elect two new Trustees;
(2) To approve or disapprove an amendment to the Trust's Declaration of
Trust to permit the Trust to establish and designate separate series
and classes of shares;
(3) To approve or disapprove a change in the Trust's fundamental investment
policy to extend the maximum maturity period of any security to
thirteen months (397 days); and
(4) To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Trustees has fixed October 14, 1994 as the record date for
determination of shareholders entitled to vote at the meeting.
By Order of the Trustees
John W. McGonigle
Secretary
October 28, 1994
SIGN, DATE AND RETURN THE ENCLOSED PROXY
PROMPTLY TO AVOID ADDITIONAL EXPENSE
YOU CAN HELP THE TRUST AVOID THE NECESSITY AND EXPENSE OF SENDING
FOLLOW-UP LETTERS TO ENSURE A QUORUM BY PROMPTLY 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.
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
PROXY STATEMENT
The enclosed proxy is solicited on behalf of the Board of Trustees of the
Trust. The proxy is revocable at any time before it is voted by sending written
notice of the revocation to the Trust or by appearing personally on December 13,
1994, at the special meeting of shareholders ("Special Meeting"). The cost of
preparing and mailing the notice of meeting, this proxy statement, proxy card
and any additional proxy material has been or is to be borne by the Trust. Proxy
solicitations will be made primarily by mail, but may also be made by telephone,
telegraph, or personal interview conducted by certain officers or employees of
the Trust or of Federated Services Company (the Trust's transfer agent) or
Federated Administrative Services (the Trust's administrator). In the event that
a shareholder does not indicate a choice as to any of the items on the proxy
ballot, the Trust will vote those shares in favor of such proposal(s).
On October 14, 1994, the Trust had outstanding 746,245,758.964 shares of
beneficial interest, each whole share being entitled to one vote and fractional
shares being entitled to fractional votes. Only shareholders of record at the
close of business on that date will be entitled to notice of and vote at the
Special Meeting. Holders of one-fourth of the total number of shares of the
Trust then outstanding, represented in person or by proxy, shall be required to
constitute a quorum at the Special Meeting for the purpose of transacting any
business. For purposes of determining the presence of a quorum and counting
votes on the matters presented, shares represented by abstentions and "broker
non-votes" will be counted as present, but not as votes cast, at the Special
Meeting. Under the Trust's Declaration of Trust, the approval of any action will
be determined on the basis of a majority of votes entitled to be cast at the
Special Meeting. Under the Investment Company Act of 1940 (the "1940 Act"),
other matters may be determined on the basis of a percentage of votes present at
the Special Meeting, which would have the effect of treating abstentions and
non-votes as if they were votes against the proposal.
An annual report for the Trust which includes audited financial statements
for the fiscal year ended March 31, 1994, has been previously mailed to
shareholders. The
Trust's principal executive offices are located at Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779. The Board of Trustees proposes to mail this
proxy statement and the enclosed notice of meeting and proxy card on or about
October 28, 1994.
ELECTION OF TWO TRUSTEES
At the meeting of the Board of Trustees held May 15, 1991, J. Joseph
Maloney, Jr., a Trustee of the Trust, informed the Board of Trustees that he was
resigning as a Trustee of the Trust. At this Special Meeting, shareholder votes
will be taken on the election of John T. Conroy, Jr., and Peter E. Madden as
Trustees of the Trust to hold office until the election and qualification of
their successors. Messrs. Conroy and Madden were appointed Trustees on November
13, 1991, to fill vacancies created by the resignation of Mr. Maloney and the
decision to expand the size of the Board of Trustees. They are currently serving
as Trustees and have consented to continue to serve if elected.
When elected, the 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 filing 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 for the purpose of electing Trustees.
The following is a complete list of the persons currently serving as
Trustees of the Trust; only Messrs. Conroy and Madden are standing for election
at this time:
<TABLE>
<CAPTION>
NAME, POSITION WITH THE PRINCIPAL OCCUPATIONS, AFFILIATIONS DURING PAST FIVE YEARS
TRUST ADDRESS AGE
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
TRUSTEES STANDING FOR ELECTION:
John T. Conroy, Jr. President, Investment Properties Corporation; Senior Vice-President, 57
Trustee John R. Wood and Associates, Inc., Realtors; President, Northgate
Village Development Corporation; Partner or Trustee in private real
estate ventures in Southwest Florida; Director, Trustee, or Managing
General Partner of the Funds; formerly, President, Naples Property
Management, Inc. Wood/IPC Commercial Department John R. Wood and
Associates, Inc., Realtors, 3255 Tamiami Trail North, Naples, FL.
Peter E. Madden Consultant; State Representative, Commonwealth of Massachusetts; 52
Trustee Director, Trustee, or Managing General Partner of the Funds;
formerly, President, State Street Bank and Trust Company and State
Street Boston Corporation and Trustee, Lahey Clinic Foundation, Inc.
225 Franklin Street, Boston, MA.
PREVIOUSLY ELECTED TRUSTEES:
John F. Donahue+* Chairman and Trustee, Federated Investors, Federated Advisers, 70
Chairman and Trustee Federated Management, and Federated Research; Chairman and Director,
Federated Research Corp.; Chairman, Passport Research, Ltd.;
Director, AEtna Life and Casualty Company; Chief Executive Officer
and Director, Trustee, or Managing General Partner of the Funds. Mr.
Donahue is the father of J. Christopher Donahue, President of the
Trust. Federated Investors Tower, Pittsburgh, PA.
William J. Copeland Director and Member of the Executive Committee, Michael Baker, Inc.; 76
Trustee Director, Trustee, or Managing General Partner of the Funds;
formerly, Vice Chairman and Director, PNC Bank, N.A., and PNC Bank
Corp. and Director, Ryan Homes, Inc. One PNC Plaza--23rd Floor,
Pittsburgh, PA
James E. Dowd Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director, 72
Trustee Trustee, or Managing General Partner of the Funds; formerly,
Director, Blue Cross of Massachusetts, Inc. 571 Hayward Mill Road,
Concord, MA
Lawrence D. Ellis, M.D. Hematologist, Oncologist, and Internist, Presbyterian and Montefiore 62
Trustee Hospitals; Professor of Medicine and Trustee, University of
Pittsburgh; Director of Corporate Health, University of Pittsburgh
Medical Center; Director, Trustee, or Managing General Partner of the
Funds. 3471 Fifth Avenue, Suite 1111, Pittsburgh, PA
Edward L. Flaherty, Jr.+ Attorney-at-law; Partner, Meyer and Flaherty; Director, Eat'N Park 70
Trustee Restaurants, Inc., and Statewide Settlement Agency, Inc.; Director,
Trustee, or Managing General Partner of the Funds; formerly, Counsel,
Horizon Financial, F.A., Western Region. 5916 Penn Mall, Pittsburgh,
PA.
Edward C. Gonzales* Vice President, Treasurer, and Trustee, Federated Investors; Vice 64
Vice President and Treasurer and President and Treasurer, Federated Advisers, Federated Management,
Trustee Federated Research, Federated Research Corp., and Passport Research,
Ltd.; Executive Vice President, Treasurer, and Director, Federated
Securities Corp.; Trustee, Federated Services Company and Federated
Shareholder Services; Chairman, Treasurer, and Trustee, Federated
Administrative Services; Trustee or Director of some of the Funds;
Vice President and Treasurer of the Funds. Federated Investors Tower,
Pittsburgh, PA.
Gregor F. Meyer Attorney-at-law; Partner, Meyer and Flaherty; Chairman, Meritcare, 68
Trustee Inc.; Director, Eat'N Park Restaurants, Inc.; Director, Trustee, or
Managing General Partner of the Funds; formerly, Vice Chairman,
Horizon Financial, F.A. 5916 Penn Mall, Pittsburgh, PA.
Wesley W. Posvar Professor, Foreign Policy and Management Consultant; Trustee, 69
Trustee Carnegie Endowment for International Peace, RAND Corporation, Online
Computer Library Center, Inc., and U.S. Space Foundation; Chairman,
Czecho Slovak Management Center; Director, Trustee, or Managing
General Partner of the Funds; President Emeritus, University of
Pittsburgh; formerly, Chairman, National Advisory Council for
Environmental Policy and Technology. 1202 Cathedral of Learning,
University of Pittsburgh, Pittsburgh, PA.
Marjorie P. Smuts Public relations/marketing consultant; Director, Trustee, or Managing 59
Trustee General Partner of the Funds. 4905 Bayard Street, Pittsburgh, PA.
</TABLE>
* This Trustee is deemed to be an "interested person" as defined in the
Investment Company Act of 1940, as amended.
+ Member of the Executive Committee. The Executive Committee of the Board of
Trustees handles the responsibilities of the Board of Trustees between
meetings of the Board.
"The Funds" and "Funds" mean the following investment companies: American
Leaders Fund, Inc.; Annuity Management Series; Arrow Funds; Automated Cash
Management Trust; Automated Government Money Trust; California Municipal Cash
Trust; Cash Trust Series II; Cash Trust Series, Inc.; DG Investor Series; Edward
D. Jones & Co. Daily Passport Cash Trust; Federated ARMs Fund; Federated
Exchange Fund, Ltd.; Federated GNMA Trust; Federated Government Trust; Federated
Growth Trust; Federated High Yield Trust; Federated Income Securities Trust;
Federated Income Trust; Federated Index Trust; Federated Institutional Trust;
Federated Intermediate Government Trust; Federated Master Trust; Federated
Municipal Trust; Federated Short-Intermediate Government Trust; Federated
Short-Term U.S. Government Trust; Federated Stock Trust; Federated Tax-Free
Trust; Federated U.S. Government Bond Fund; First Priority Funds; Fixed Income
Securities, Inc.; Fortress Adjustable Rate U.S. Government Fund, Inc.; Fortress
Municipal Income Fund, Inc.; Fortress Utility Fund, Inc.; Fund for U.S.
Government Securities, Inc.; Government Income Securities, Inc.; High Yield Cash
Trust; Insight Institutional Series, Inc.; Insurance Management Series;
Intermediate Municipal Trust; International Series, Inc.; Investment Series
Funds, Inc.; Investment Series Trust; Liberty Equity Income Fund, Inc.; Liberty
High Income Bond Fund, Inc.; Liberty Municipal Securities Fund, Inc.; Liberty
U.S. Government Money Market Trust; Liberty Term Trust, Inc.--1999; Liberty
Utility Fund, Inc.; Liquid Cash Trust; Managed Series Trust; The Medalist Funds:
Money Market Management, Inc.; Money Market Obligations Trust; Money Market
Trust; Municipal Securities Income Trust; New York Municipal Cash Trust; 111
Corcoran Funds; Peachtree Funds; The Planters Funds; Portage Funds; RIMCO
Monument Funds; The Shawmut Funds; Short-Term Municipal Trust; Star Funds; The
Starburst Funds; The Starburst Funds II; Stock and Bond Fund, Inc.; Sunburst
Funds; Targeted Duration Trust; Tax-Free Instruments Trust; Trademark Funds;
Trust for Financial Institutions; Trust For Government Cash Reserves; Trust for
Short-Term U.S. Government Securities; Trust for U.S. Treasury Obligations;
World Investment Series, Inc.
If the nominees for election as Trustees named above shall by reason of
death or for any other reason become unavailable as a candidate at the Special
Meeting, votes pursuant to the enclosed proxy will be cast for a substitute
candidate by the attorneys named therein, or their substitutes, present and
acting at the Special Meeting. Any such substitute candidate for election as a
Trustee shall be nominated by the Executive Committee. The Board of Trustees has
no reason to believe that the nominees will become unavailable for election as a
Trustee.
During the fiscal year ended March 31, 1994, there were four meetings of
the Board of Trustees. The Trustees who are not interested persons of the Trust
as a group received fees totaling $15,338. All Trustees were reimbursed for
expenses for attendance at meetings.
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 in fulfilling its duties relating to the Trust accounting and financial
reporting practices and to serve as a direct line of communication between the
Board and the independent public accountants. The specific functions of the
Audit Committee include recommending the engagement or retention of the
independent public accountants, reviewing with the independent public
accountants the plan and the results of the auditing engagement, approving
professional services provided by the independent public accountants prior to
the performance of such services, considering the range of audit and non-audit
fees, reviewing the independence of the independent public accountants,
reviewing the scope and results of the Trust's procedures for internal auditing,
and reviewing the Trust's system of internal accounting controls.
Messrs. Flaherty, Copeland, and Dowd serve on the Audit Committee. These
Trustees are not interested Trustees of the Trust. J. Joseph Maloney, Jr.,
previously a member of the Audit Committee, served until March 21, 1991. At its
meeting on May 15, 1991, the Board of Trustees appointed Mr. Copeland to the
Audit Committee. During the fiscal year ended March 31, 1994, there were four
meetings of the Audit Committee. All of the members of the Audit Committee were
present at 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.
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 ages (in parentheses) of the Executive Officers of the Trust who
are not listed above and their principal occupations during the last five years
are as follows: J. Christopher Donahue (45), President of the Trust, is
President and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; President and Director, Federated Research
Corp.; President, Passport Research, Ltd.; Trustee, Federated Administrative
Services, Federated Services Company, and Federated Shareholder Services;
President or Vice President of the Funds; Director, Trustee, or Managing General
Partner of some of the Funds. Mr. Donahue is the son of John F. Donahue,
Chairman and Trustee of the Trust. Richard B. Fisher (71), Vice President of the
Trust, is Executive Vice President and Trustee, Federated Investors; Director,
Federated Research Corp.; Chairman and Director, Federated Securities Corp.;
President or Vice President of some of the Funds; Director or Trustee of some of
the Funds. John W. McGonigle (56), Vice President and Secretary of the Trust, is
Vice President, Secretary, General Counsel, and Trustee, Federated Investors;
Vice President, Secretary, and Trustee, Federated Advisers, Federated
Management, and Federated Research; Vice President and Secretary, Federated
Research Corp. and Passport Research, Ltd.; Trustee, Federated Services Company;
Executive Vice President, Secretary, and Trustee Federated Shareholder Services;
Executive Vice President and Director, Federated Securities Corp.; Vice
President and Secretary of the Funds.
Officers and Trustees own less than 1% of the Trust's outstanding Shares.
Federated Securities Corp. ("FSC"), the Trust's distributor, is a
Pennsylvania corporation organized on November 14, 1969, and is the principal
distributor for a number of investment companies. FSC is a wholly-owned
subsidiary of Federated Investors. Its address is Federated Investors Tower,
Pittsburgh, Pennsylvania
15222-3779.
Administrative personnel and services (including certain legal and
financial reporting services) are provided to the Trust by Federated
Administrative Services, a subsidiary of Federated Investors, at an annual rate
which relates to the average aggregate daily net assets of all the Federated
Funds as specified below:
<TABLE>
<CAPTION>
AVERAGE AGGREGATE DAILY NET ASSETS
MAXIMUM ADMINISTRATIVE FEE OF THE FEDERATED FUNDS
<C> <S>
0.15 of 1% on the first $250 million
0.125 of 1% on the next $250 million
0.10 of 1% on the next $250 million
0.075 of 1% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
Federated Administrative Services may choose voluntarily to waive a portion of
its fee. Prior to March 1, 1994, Federated Administrative Services, Inc., also a
subsidiary of Federated Investors served as the Trust's Administrator. During
the fiscal year ended March 31, 1994, Federated Administrative Services, Inc.
and Federated Administrative Services collectively earned $985,326 for these
services.
The address of Federated Administrative Services is Federated Investors
Tower, Pittsburgh, Pennsylvania 15222-3779.
In addition, Dr. Henry J. Gailliot, an officer of Federated Advisers, the
adviser to the Trust, holds approximately 20% of the outstanding common stock
and serves as director of Commercial Data Services, Inc., a company which
provides computer processing services to Federated Administrative Services.
APPROVAL OR DISAPPROVAL OF AMENDMENT TO THE TRUST'S
DECLARATION OF TRUST TO ALLOW THE TRUST TO ESTABLISH
AND DESIGNATE SEPARATE SERIES AND CLASSES OF SHARES
Shareholders are being asked to approve an amendment to the Declaration of
Trust to permit the Trust's establishment of separate investment portfolio
series of shares ("portfolios"), and to designate classes of shares within a
portfolio. Currently, the Trust is constrained by its Declaration of Trust to
establish only one portfolio issuing only one class of shares.
At a meeting held in August, 1994, the Board of Trustees unanimously
approved, subject to ratification by the shareholders of the Trust, the proposed
amendment to the Declaration of Trust which would empower the Trust to establish
separate portfolios and to designate classes of shares within a portfolio.
The proposed amendment to the Declaration of Trust would permit the Board
of Trustees to take such actions at a future date without first seeking
additional shareholder ratification. As discussed further below, these actions
are being recommended because they may be advantageous for the Trust and its
shareholders.
The Board of Trustees believes that the added flexibility provided by the
proposed amendment to the Declaration of Trust to permit the creation of
separate series and classes of shares may enhance the marketing opportunities
for the Trust and provide investors with purchasing options best suited to their
individual situations. This may attract more investment dollars, resulting in
greater investment opportunities for the Trust. In addition, an increased asset
size of the Trust may result in economies of scale and a reduction in the
Trust's overall expense ratio, however, there is no assurance that the Trust
will achieve these results. A reduction in the overall
expense ratio may have a favorable effect on the Trust's net yield for all
classes of shares.
CHARACTERISTICS OF PORTFOLIOS AND CLASSES
Each share of a portfolio of the Trust would represent an equal and
proportionate interest in the assets owned by such portfolio. Each share in a
portfolio would have identical voting rights with each other share of the Trust
outstanding for purposes of voting on issues that affect the Trust as a whole,
such as the election of Trustees. All shares of all classes of each portfolio of
the Trust would have equal voting rights on matters affecting that entire
portfolio, such as changes in investment policies. On matters affecting only a
particular class, such as certain distribution arrangements, only shareholders
of that class would be entitled to vote.
All classes of shares would have the same rights and privileges, except
that the amendment to the Declaration of Trust would authorize the Board of
Trustees to allocate expenses among the classes related to shareholder services
and distribution methods. Different expenses borne by the classes would result
in different dividends among the classes. This structure would cause classes
having higher expense ratios to pay lower dividends than classes with lower
expenses ratios within a portfolio.
Holders of shares would pay their allocable portion of Trust and portfolio
expenses. The Trust expenses for which holders of shares would pay their
allocable portion include, but are not limited to: the cost of organizing the
Trust and continuing its existence; registering the Trust with federal and state
securities authorities; Trustees' fees; auditors' fees; the cost of meetings of
Trustees; legal fees of the Trust; association membership dues; and such
non-recurring and extraordinary items as may arise. The portfolio expenses for
which holders of shares pay their allocable portion include, but are not limited
to: registering the portfolio and shares of the portfolio; investment advisory
services; taxes and commissions; custodian fees; insurance premiums; auditors'
fees and such non-recurring and extraordinary items as may arise.
The Board of Trustees would reserve the right to allocate certain expenses
to holders of shares on a class-by-class basis as it deems appropriate ("Class
Expenses"). In any case, Class Expenses would be limited to: expenses under a
distribution plan adopted by the Trust with respect to that class of shares
pursuant to Rule 12b-1 under the 1940 Act ("12b-1 Plan"); transfer agent fees as
identified by the transfer agent as attributable to holders of a class of
shares; printing and postage expenses related to preparing and distributing
materials such as shareholder reports, prospectuses, and proxies to current
shareholders; registration fees paid to the Securities and Exchange
Commission and state securities commissions; expenses related to administrative
personnel and services as required to support holders of a class of shares;
legal fees related solely to a class of shares; and Trustees' fees incurred as a
result of issues relating solely to a class of shares.
THE PROPOSED AMENDMENT WOULD NOT ALTER THE RIGHTS AND PRIVILEGES OF CURRENT
TRUST SHAREHOLDERS.
If the proposal to amend the Declaration of Trust is adopted, the Trust
currently intends to create a second class of shares, which will be designated
"Class B Shares." (The existing shares would then be redesignated "Class A
Shares.") The Class B Shares would be subject to a 12b-1 Plan and a shareholder
services plan, both of which would impose additional fees not borne by existing
shares. Additionally, Class B Shares would be subject to a contingent deferred
sales charge, at a rate or rates and for a period of time to be described in the
prospectus for Class B Shares. The Class B Shares would be sold without an
initial sales load. The Trustees will be authorized to classify or reclassify
(i.e., into series and classes of series), from time to time, any unissued
shares of stock of the Trust, whether now or hereafter authorized, by setting,
changing or eliminating the preferences, conversion or other rights, voting
powers, restrictions, limitations as to dividends, qualifications or terms or
conditions of redemption of the capital stock.
BOARD OF TRUSTEES' RECOMMENDATION
The Board of Trustees has reviewed and unanimously approved the proposed
amendment to the Trust's Declaration of Trust to allow the Trust to establish
and designate separate series and classes of shares and has directed that the
amendment be submitted to shareholders for their ratification. In the event that
the amendment is not approved by shareholders, the Trust will continue to have
authority to establish only one portfolio issuing only one class of shares.
Approval requires the affirmative vote of a majority of the aggregate number of
votes entitled to be cast thereon.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS APPROVAL OF THE
PROPOSED AMENDMENT TO THE TRUST'S DECLARATION OF TRUST TO ALLOW THE TRUST TO
ESTABLISH AND DESIGNATE SEPARATE SERIES AND CLASSES OF SHARES
------------------------------------
APPROVAL OR DISAPPROVAL OF A CHANGE IN THE TRUST'S FUNDAMENTAL INVESTMENT POLICY
TO EXTEND THE MAXIMUM MATURITY PERIOD OF ANY SECURITY TO THIRTEEN MONTHS (397
DAYS)
The investment objective of the Trust is stability of principal and current
income consistent with stability of principal. One of the Trust's current
investment policies to which it adheres when pursuing its objective is that it
may not invest in a security having a remaining maturity of more than one year
(365 days). This policy was adopted to comply with maximum maturity period
provisions of Rule 2a-7 of the Investment Company Act of l940, as amended ("Rule
2a-7"), and can only be changed by approval of a majority of the shareholders of
the Trust. The purpose of Rule 2a-7 is to limit the Trust's exposure to interest
rate and credit risks associated with long maturity periods.
Amendments to Rule 2a-7, which became effective June 30, 1991, extend the
maximum maturity period for any portfolio security from one year (365 days) to
thirteen months (397 days). According to an adopting release published by the
Securities and Exchange Commission, the change was made in order to accommodate
money market mutual funds, such as the Trust, that purchase annual tender bonds,
and securities on a when-issued or delayed delivery basis. These securities
often are not delivered for a period of up to one month after the mutual fund
has made a commitment to purchase them. Since the mutual fund must "book" the
securities on the day it agrees to purchase them, the maturity period begins on
that day. At a meeting held in August, 1994, the Board of Trustees
unanimously approved, subject to shareholder ratification, a change in the
Trust's investment policy to mirror the amendments to Rule 2a-7. The proposed
investment policy extends the maximum maturity period of any portfolio security
from one year (365 days) to thirteen months (397 days). In approving the
proposed change, the Trustees evaluated: (1) compliance with Rule 2a-7, as
amended; (2) the positive effect on the Trust's ability to enter into
when-issued and delayed delivery transactions and to purchase annual tender
bonds; and (3) the benefits of enhancing the Trust's yield vs. the potential of
increasing the Trust to exposure to both credit risk and interest rate risk.
After careful review and evaluation of these issues, the Board of Trustees
determined that it was in the best interest of the Trust and its shareholders to
amend this investment policy of the Trust to allow for an extension of the
maximum maturity period for any security to up to thirteen months (397 days).
This change will in no way affect the Trust's investment policy with respect to
the portfolio's average maturity, which on a dollar-weighted basis is ninety
(90) days or less.
Approval of this change in the Trust's investment policy requires the
affirmative vote of: (a) 67% or more of the shares of the Trust present at the
Special Meeting, if the holders of more than 50% of the outstanding Shares of
the Trust are present or represented by proxy; or (b) more than 50% of the
outstanding shares of the Trust, whichever is less. If the shareholders of the
Trust fail to approve the change in the investment policy, the Trust will
continue to invest in securities that have a remaining maturity of no more than
one year (365 days).
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS APPROVAL OF A CHANGE IN THE
TRUST'S FUNDAMENTAL INVESTMENT POLICY TO EXTEND THE MAXIMUM MATURITY PERIOD FOR
ANY SECURITY TO THIRTEEN MONTHS (397 DAYS)
------------------------------------
INVESTMENT ADVISER
INVESTMENT ADVISORY CONTRACT
On August 1, 1989, the Trust entered into an investment advisory contract
("Advisory Contract") with Federated Advisers ("Adviser"). Under the Advisory
Contract, subject to the direction of the Trustees of the Trust, the Adviser
provides investment research and supervision of the investments of the Trust and
conducts a continuous program of investment, evaluation, and of appropriate sale
or other disposition and reinvestment of the Trust's portfolio. For its
services, the Adviser receives an annual investment advisory fee based on the
Trust's average daily net assets as shown in the chart below:
<TABLE>
<CAPTION>
ADVISORY FEE AS
AVERAGE DAILY % OF AVERAGE
NET ASSETS DAILY NET ASSETS
<S> <C>
First $500 million .50 of 1%
Second $500 million .475 of 1%
Third $500 million .45 of 1%
Fourth $500 million .425 of 1%
Over $2 billion .40 of 1%
</TABLE>
The Advisory Contract provides that the Trust pay all of its expenses.
These expenses include expenses of administrative personnel and services
provided to the Trust at an annual rate as described earlier in this proxy
statement by Federated Administrative Services. In addition, the Advisory
Contract provides that the Adviser may, from time to time and for such periods
as it deems appropriate, reduce its compensation (and, if appropriate, assume
expenses of the Trust) to the extent that the Trust's expenses exceed an expense
limitation which the Adviser may voluntarily declare effective.
The Advisory Contract was approved by the Trustees, including a majority of
the Trustees who are not interested parties to such contract or interested
persons of any such party ("Disinterested Trustees"), on April 25, 1989, and
approved by the shareholders on July 12, 1989. The Advisory Contract may be
continued annually if (a) such continuation shall be specifically approved by
the majority vote of the Trustees, including a majority of the Disinterested
Trustees, cast in person at a meeting called for that purpose, and (b) the
Adviser has not notified the Trust in writing at least 60 days before the
anniversary of the Advisory Contract in any year thereafter that it does not
desire such continuation. Continuation of the Advisory Contract was approved by
the Trustees at their May 18, 1994, meeting.
The Advisory Contract may be terminated at any time, without penalty, by
the Trustees of the Trust or by a majority of the outstanding Shares of the
Trust on 60 days' written notice to the Adviser. The Advisory Contract may be
amended at any time by agreement of the parties, provided that the amendment is
approved both by the vote of a majority of the Trustees, including a majority of
the Disinterested Trustees, cast in person at a meeting called for that purpose,
and by the holders of a majority of the outstanding Shares of the Trust. The
Advisory Contract may not be assigned by the Adviser and shall automatically
terminate in the event of an assignment, as defined in the Investment Company
Act of 1940.
The Advisory Contract provides that, in the absence of willful misfeasance,
bad faith, gross negligence, or reckless disregard of the obligations or duties
under the Advisory Contract on the part of the Adviser, the Adviser shall not be
liable to the Trust or to any Shareholder for any act or omission in the course
of or connected in any way with rendering services or for any losses that may be
sustained in the purchase, holding, or sale of any security.
During the fiscal year ended March 31, 1994, the Adviser earned an
investment advisory fee of $4,147,512.
FEDERATED ADVISERS
Federated Advisers is a Delaware business trust organized on April 11,
1989, as a registered investment adviser under the Investment Advisers Act of
1940. Federated Advisers is a wholly-owned subsidiary of Federated Investors.
Federated Advisers and other subsidiaries of Federated Investors serve as
investment adviser and/or administrator to a number of investment companies and
private accounts with combined assets of approximately $70 billion.
The Executive Officers of Federated Advisers are: John F. Donahue,
Chairman; J. Christopher Donahue, President; William D. Dawson, III, J. Thomas
Madden and Mark L. Mallon, Executive Vice Presidents; Henry J. Gailliot, Senior
Vice President-Economist; Peter R. Anderson, Gary J. Madich and J. Alan Minteer,
Senior Vice Presidents; John W. McGonigle, Vice President and Secretary; and
Edward C. Gonzales, Vice President and Treasurer. The Trustees of Federated
Advisers are J. Christopher Donahue, John F. Donahue, John W. McGonigle, and
Mark D. Olson.
The business address of Federated Advisers and each of its Officers and
Trustees, except for Mark D. Olson, is Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779. Mr. Olson's business address is 107 W. Market Street,
Georgetown, Delaware 19947. Mr. J. F. Donahue is an Officer and Trustee of the
Trust, and Messrs. J. C. Donahue, E. C. Gonzales, and J. W. McGonigle are
Officers of the Trust.
An audited balance sheet of Federated Advisers is attached to this proxy
statement as Exhibit A.
FEDERATED INVESTORS
The following Officers and Trustees of Federated Investors are also
Officers of the Trust. All of the Class A Shares (VOTING) of Federated Investors
are owned by a trust, the trustees of which are: John F. Donahue, Chairman, CEO
and Trustee of Federated Investors, Rhodora J. Donahue, wife of John F. Donahue,
and J. Christopher Donahue, son of John F. Donahue and President, COO and
Trustee of Federated Investors.* Officers and Trustees of the Trust who own
Class B Shares (NON-VOTING), their position with Federated Investors, and the
number of Class B Shares beneficially owned by such persons (in parentheses)
are: John F. Donahue*, Trustee and President (1,961,242); Edward C. Gonzales*,
Trustee, Vice President, and Treasurer (400,000); and John W. McGonigle*,
Trustee, Vice President, General Counsel, and Secretary (1,000,000).
* The number of shares indicated may include shares held jointly with spouses or
other family members, shares held by family-owned partnerships or other
business organizations, shares held by spouses and other family members and/or
shares held in trust for one or more family members. The listed individuals
disclaim beneficial ownership of shares held by spouses, other family members
and trusts, and by family-owned partnerships or other business organizations
to the extent not owned by them.
PORTFOLIO TRANSACTIONS
All portfolio transactions are undertaken on the basis of their
desirability from an investment standpoint. Federated Advisers, subject to the
guidelines established by the Trustees, makes decisions on portfolio
transactions and selects brokers and dealers for portfolio transactions.
Federated Advisers selects brokers and dealers which have demonstrated
capabilities to effect transactions in portfolio securities in such a manner to
obtain prompt execution of orders at a favorable price for the portfolio
securities.
Federated Advisers may select brokers or dealers who, in addition to
meeting the above requirements, also furnish brokerage and research services.
These services may include advice as to the advisability of investing in
securities, security analyses and reports, economic studies, industry studies,
receipt of quotations for portfolio valuations, and similar services. These may
be furnished either directly to the Trust, to Federated Advisers, to advisers
who are affiliates of Federated Advisers, or to accounts advised by these
companies.
Federated Advisers, in selecting brokers or dealers to execute securities
transactions, exercises reasonable business judgment and determines in good
faith that commissions charged by such persons are reasonable in relation to the
value of the brokerage and research services provided by such persons, viewed in
terms of the overall responsibilities of Federated Advisers and its affiliated
companies with respect to the Trust itself and the other funds and accounts to
which they render investment advice. As a practical matter, the benefits inuring
to these funds and accounts are not divisible. To the extent that the receipt of
the above-described services may supplant services for which Federated Advisers
might otherwise have paid, it would tend to reduce the expenses of Federated
Advisers or its affiliates. The same is true of services furnished to the Trust
and in turn made available by the Trust to Federated Advisers or its affiliates.
During the fiscal year ended March 31, 1994, the Trust paid no brokerage
commissions.
OTHER MATTERS AND DISCRETION OF ATTORNEYS
NAMED IN THE PROXY
While the Special Meeting is called to act upon any other business that may
properly come before it, at the date of this proxy statement the only business
which the Board of Trustees intends to present or knows that others will present
is the business mentioned in the notice of meeting. If any other matters
lawfully come before the Special Meeting, and as to all procedural matters at
the meeting, it is the intention that the enclosed proxy shall be voted in
accordance with the best judgment of the attorneys named therein, or their
substitutes, present and acting at the Special Meeting.
If at the time any session of the Special Meeting is called to order a
quorum is not present in person or by proxy, the persons named as proxies may
vote those proxies which have been received to adjourn the Special 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 Special Meeting to permit
further solicitation of proxies with respect to any such proposal. All such
adjournments will require the affirmative vote of a majority of the shares
present in person or by proxy at the session of the Special Meeting to be
adjourned. The persons named as proxies will vote those proxies which they are
entitled to vote in favor of the proposal, in favor of such an adjournment and
will vote those proxies required to be voted against the proposal, against any
such adjournment. A vote may be taken on one or more of the proposals in this
proxy statement prior to any such adjournment if sufficient votes for its
approval have been received and it is otherwise appropriate.
To the best knowledge of the Trust, there are no record/beneficial owners
of more than 5% of the outstanding shares of the Trust as of October 14, 1994.
If you do not expect to attend the Special Meeting, please sign your proxy
and return it in the enclosed envelope to avoid unnecessary expense and delay.
No postage is necessary.
By Order of the Trustees
John W. McGonigle
Secretary
October 28, 1994
EXHIBIT A
FEDERATED ADVISERS AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1993
- --------------------------------------------------------------------------------
ASSETS
<TABLE>
<S> <C>
Investment in money market fund, at cost which equals redemption value......................... $ 2,148,000
Other marketable securities.................................................................... 302,000
Management fees receivable..................................................................... 180,000
Receivable from affiliated corporation......................................................... 12,819,000
Other.......................................................................................... 106,000
-----------------
TOTAL ASSETS................................................................. $ 15,555,000
=================
LIABILITIES AND SHAREHOLDER'S EQUITY
LIABILITIES:
Accrued expenses............................................................................... $ 1,581,000
Partner distributions payable.................................................................. 131,000
-----------------
TOTAL LIABILITIES.................................................................. 1,712,000
-----------------
MINORITY INTEREST IN SUBSIDIARY................................................................ 353,000
-----------------
SHAREHOLDER'S EQUITY:
Shares of beneficial interest.................................................................. 300,000
Retained earnings.............................................................................. 13,190,000
-----------------
TOTAL SHAREHOLDER'S EQUITY......................................................... 13,490,000
-----------------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY......................................... $ 15,555,000
=================
</TABLE>
(The accompanying notes are an integral part of this consolidated balance
sheet.)
FEDERATED ADVISERS AND SUBSIDIARY
NOTES TO CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1993
- --------------------------------------------------------------------------------
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The balance sheet includes the account of Federated Advisers and its
subsidiary, collectively referred to as the Company. All significant
intercompany transactions have been eliminated.
The Company utilizes the accrual method of accounting.
Other marketable securities consist of investments in fluctuating net
asset value funds which are required by the Securities and Exchange
Commission and are intended to be held for a limited period. These
investments are carried at lower of cost or market and realized and
unrealized gains and losses relating to these investments were not
material.
(2) BUSINESS
The Company (a Delaware business trust) is a wholly-owned subsidiary of
FII Holdings, Inc. which in turn is wholly owned by Federated
Investors, Inc., a wholly-owned subsidiary of Federated Investors.
Federated Investors' primary business is the advising and managing of
mutual funds. The Company provides advisory services to mutual funds.
(3) TRANSACTIONS WITH RELATED PARTIES
Certain general and administrative services are provided by affiliates.
The receivable from an affiliated corporation represents the net amount
of management fees collected by the affiliate on behalf of the Company
in excess of operating expenses paid by the affiliate on behalf of the
Company. This balance is collectible at any time at the Company's
option.
(4) INCOME TAXES
The Company adopted Statement of Financial Accounting Standards
No. 109, "Accounting for Income Taxes" (SFAS 109) in 1993 and has
elected to apply its provisions retroactively to August 1, 1989, the
date of Federated Investors' original acquisition. SFAS 109 requires
the recognition of deferred
tax assets and liabilities for the future tax consequences attributable
to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases.
Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. Under
SFAS 109, the effect on deferred tax assets and liabilities of a change
in tax rates is recognized in income in the period that includes the
enactment date.
The Company maintains no significant cumulative temporary differences
at December 31, 1993. As a Delaware business trust, the Company is not
subject to state income taxes.
The Company participates in filing a consolidated federal income tax
return with Federated Investors and Subsidiaries, and is subject to a
consolidated tax sharing policy.
(5) TANGIBLE NET WORTH REQUIREMENT
The Company is registered as an investment advisor in the state of
Pennsylvania and accordingly is required to maintain minimum tangible
net worth of $12,500. In accordance with applicable state securities
regulations, at December 31, 1993, the Company had $13,384,000 of
tangible net worth.
(6) PLEDGED SHARES OF BENEFICIAL INTEREST
The shares of beneficial interest of the Company have been pledged as
collateral for certain borrowings incurred by Federated Investors.
INDEPENDENT AUDITORS' REPORT
The Board of Trustees
Federated Advisers:
We have audited the accompanying consolidated balance sheet of Federated
Advisers and subsidiary (an indirectly owned subsidiary of Federated Investors)
as of December 31, 1993. This consolidated financial statement is the
responsibility of the Company's management. Our responsibility is to express an
opinion on this consolidated financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the balance sheet is free of material misstatement. An
audit of a balance sheet includes examining, on a test basis, evidence
supporting the amounts and disclosures in that balance sheet. An audit of a
balance sheet also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
balance sheet presentation. We believe that our audit of the consolidated
balance sheet provides a reasonable basis for our opinion.
In our opinion, the consolidated balance sheet referred to above presents
fairly, in all material respects, the financial position of Federated Advisers
and subsidiary at December 31, 1993, in conformity with generally accepted
accounting principles.
As discussed in note 4 to the consolidated balance sheet, the Company changed
its method of accounting for income taxes in 1993 to adopt the provisions of the
Financial Accounting Standards Board's Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes."
KPMG PEAT MARWICK LLP
Pittsburgh, Pennsylvania
February 2, 1994
ORCMR410072 006447 (10/94)
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST SPECIAL MEETING OF
SHAREHOLDERS
DECEMBER 13, 1994
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST hereby appoint Patricia F.
Conner, Charles H. Field, Colleen Gallagher, Kathleen O'Brien, and Suzy
Land, or any one of them, true and lawful attorneys, with the power of
substitution of each, to vote all Shares of LIBERTY U.S. GOVERNMENT
MONEY MARKET TRUST which the undersigned is entitled to vote at the
Special Meeting of Shareholders to be held on December 13, 1994, at
Federated Investors Tower, Pittsburgh, Pennsylvania, at 2:00 p.m., and
at any adjournment thereof.
Discretionary authority is hereby conferred as to all other matters as
may properly come before the Special Meeting.
PROPOSAL(S)
1) ELECTION OF TWO TRUSTEES.
2) TO APPROVE OR DISAPPROVE AN AMENDMENT TO THE TRUST'S DECLARATION OF
TRUST TO PERMIT THE TRUST TO ESTABLISH AND DESIGNATE SEPARATE SERIES
AND CLASSES OF SHARES.
3) TO APPROVE OR DISAPPROVE A CHANGE IN THE TRUST'S FUNDAMENTAL
INVESTMENT POLICY TO EXTEND THE MAXIMUM MATURITY PERIOD OF ANY
SECURITY TO THIRTEEN MONTHS (397 DAYS).
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES. 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 ANY ITEM, THIS PROXY WILL BE VOTED AFFIRMATIVELY ON THAT
MATTER.
PLEASE RETURN BOTTOM PORTION WITH YOUR VOTE IN THE ENCLOSED ENVELOPE AND
RETAIN THE TOP PORTION. PLACE THE MAIL-IN STUB SO THAT THE RETURN
ADDRESS, LOCATED ON THE REVERSE SIDE OF THE BALLOT, APPEARS THROUGH THE
WINDOW OF THE ENVELOPE.
LIBERTY U.S. GOVERNMENT
MONEY MARKET TRUST PROXY VOTING MAIL-IN STUB
RECORD DATE SHARES
Please sign EXACTLY as your name(s) appear below. When signing as
attorney, executor, administrator, guardian, trustee, custodian, etc.,
please give your full title as such. If a corporation or partnership,
please sign the full name by an authorized officer or partner. If stock
is owned jointly, all parties should sign.
PROPOSAL 1: ELECTION OF TRUSTEES. To
withhold authority to vote for any
individual nominees, strike a line through
the nominee's name in the list below:
FOR all nominees listed below
FOR all nominees listed below
(except as marked to the contrary
below)
Vote withheld for all nominees
listed below
J.T. Conroy, Jr.; P.E. Madden
PROPOSALS:
2) FOR AGAINST ABSTAIN
3) FOR AGAINST ABSTAIN
Date: , 19
Signature(s) of Shareholder(s)
