SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934(Amendment No.______)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X ] Preliminary Proxy Statement
[ ] 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:
PRELIMINARY PROXY
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 _________ 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:
Name and Position Principal Occupations, Affiliations
With the Trust During Past Five Years, and Address
Age
Trustees Standing For
Election:
John T. Conroy, Jr. President, Investment Properties Corporation; 57
Trustee Senior Vice-President, 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,
52
Trustee Commonwealth of Massachusetts;
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,
70
Chairman and Trustee Federated Advisers, 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
76
Trustee Committee, Michael Baker, Inc.;
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
72
Trustee Germany Fund, Inc.; Director,
Trustee, or Managing General Partner
of the Funds; formerly, Director,
Blue Cross of Massachusetts, Inc.
571 Hayward Mill Road, Concord, MA.
Name and Position Principal Occupations, Affiliations
With the Trust During Past Five Years, and Address
Age
Lawrence D. Ellis, M.D. Hematologist, Oncologist, and Internist,
62
Trustee Presbyterian and Montefiore
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;
70
Trustee Director, Eat'N Park 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,
64
Vice President and Federated Investors; Vice President
and
Treasurer and Trustee Treasurer, Federated Advisers,
Federated Management, 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;
68
Trustee Chairman, Meritcare, 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
69
Trustee Consultant; 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;
59
Trustee Director, Trustee, or Managing
General Partner of the Funds. 4905
Bayard Street, Pittsburgh, PA.
* 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; 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; Mark Twain Funds; 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 be
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, receiving 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, Vice President and Secretary of the Trust
(56), 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:
Average Aggregate Daily Net
Assets
Maximum Administrative Fee of the Federated Funds
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
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 OF 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. 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:
Advisory Fee as
% of Average
Average Daily Net Assets Daily Net Assets
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%
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 Management
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 Management 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 Adviser 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.
The following list indicates the beneficial ownership of
shareholders who, to the best knowledge of the Trust, are the
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 necessary
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
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
(The accompanying notes are an integral part of this consolidated
balance sheet.)
FEDERATED ADVISERS
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.
FEDERATED ADVISERS
NOTES TO CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1993
(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.
KPMG Peat Marwick Telephone 412 391 9710
Certtified Public Accountants Telex 7106642199PMM&CO
One Mellon Bank Center Telefax 412 391-8963
Pittsburgh, PA 15219
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."
Pittsburgh, Pennsylvania /s/KPMG Peat Marwick
February 2, 1994
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)
