SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [ X ] Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ X ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
Liberty U.S. Government Money Market Trust
(Name of Registrant as Specified In Its Charter)
Federated Investors, Inc.
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary proxy materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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ii
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
Proxy Statement - Please Vote!
TIME IS OF THE ESSENCE ... VOTING ONLY TAKES A FEW MINUTES AND YOUR
PARTICIPATION IS IMPORTANT! ACT NOW TO HELP THE TRUST AVOID ADDITIONAL EXPENSE.
Liberty U.S. Government Money Market Trust (the "Trust") will hold a special
meeting in lieu of annual meeting of shareholders on June 25, 1999. It is
important for you to vote on the issues described in this Proxy Statement. We
recommend that you read the Proxy Statement in its entirety; the explanations
will help you to decide on the issues.
Following is an introduction to the proposals and the process.
Why am I being asked to vote?
Mutual funds are required to obtain shareholders' votes for certain types of
changes, like those included in this Proxy Statement. You have a right to vote
on these changes.
What issues am I being asked to vote on?
The proposals include the election of Trustees, ratification of independent
auditors, and a proposed reorganization of the Trust into a newly created
portfolio of Money Market Obligations Trust.
Why are individuals recommended for election to the Board of Trustees?
The Trust is devoted to serving the needs of its shareholders, and the Board is
responsible for managing the Trust's business affairs to meet those needs. The
Board represents the shareholders and can exercise all of the Trust's powers,
except those reserved only for shareholders.
Trustees are selected on the basis of their education and professional
experience. Candidates are chosen based on their distinct interest in, and
capacity for understanding the complexities of, the operation of a mutual fund.
These individuals bring considerable experience to the impartial oversight of a
fund's operation.
The Proxy Statement includes a brief description of each nominee's history and
current position with the Trust, if applicable.
Why am I being asked to vote on the ratification of independent auditors?
The independent auditors conduct a professional examination of accounting
documents and supporting data to render an opinion on the material fairness of
the information. Because financial reporting involves discretionary decision
making, the auditors' opinion is an important assurance to both the Trust and
its investors.
The Board of Trustees approved the selection of Arthur Andersen LLP, long-time
auditors of the Trust, for the current fiscal year and believes that the
continued employment of this firm is in the Trust's best interests.
Why is the Reorganization being proposed?
The Trust's Board of Trustees and investment adviser believe that the Trust's
management structure can be simplified by reorganizing as a portfolio of Money
Market Obligations Trust ("MMOT"), another money market mutual fund. After the
Reorganization, the original Trust will be dissolved. MMOT offers a variety of
portfolios investing in money market securities, each with its own investment
objective.
How will the Reorganization affect my investment?
o The shares you own and the value of your investment will not change.
o The Reorganization will be a tax-free event.
o There will not be sales loads, commissions, or transaction charges
with the Reorganization.
o The investment objective will remain the same.
o There will be no increases in the fees payable to the Trust's adviser because
of the Reorganization.
How do I vote my shares?
You may vote in person at the special meeting of shareholders or complete and
return the enclosed Proxy Card. If you sign and return the Proxy Card without
indicating a preference, your vote will be cast "for" all the proposals.
You may also vote by telephone at 1-800-690-6903, or through the Internet at
www.proxyvote.com. If you choose to help save the Trust time and postage costs
by voting through the Internet or by telephone, please don't return your Proxy
Card. If you do not respond at all, we may contact you by telephone to request
that you cast your vote.
Who do I call if I have questions about the Proxy Statement?
Call your Investment Professional or a Federated Client Service Representative.
Federated's toll-free number is 1-800-341-7400.
After careful consideration, the Board of Trustees
has unanimously approved these proposals. The
Board recommends that you read the enclosed
materials
carefully and vote for all proposals.
<PAGE>
PRELIMINARY
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
NOTICE OF SPECIAL MEETING
IN LIEU OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 25, 1999
A Special Meeting in lieu of Annual Meeting of the
shareholders of Liberty U.S. Government Money Market Trust (the "Trust") will be
held at 5800 Corporate Drive, Pittsburgh, Pennsylvania 15237-7000, at 2:00 p.m.
(Eastern time), on June 25, 1999 to consider proposals:
(1) To elect five Trustees.
(2) To ratify the selection of the Trust's independent
auditors.
(3) To approve a proposed Agreement and Plan of
Reorganization between the Trust and Money Market
Obligations Trust, on behalf of its series, Liberty
U.S. Government Money Market Trust (the "New Fund"),
whereby the New Fund would acquire all of the assets
of the Trust in exchange for shares of the New Fund
to be distributed pro rata by the Trust to its
shareholders in complete liquidation and termination
of the Trust.
To transact such other business as may properly come
before the meeting or any adjournment thereof.
The Board of Trustees has fixed April 27, 1999 as the record date for
determination of shareholders entitled to vote at the meeting.
By Order of the Board of Trustees,
John W. McGonigle
Secretary
May 10, 1999
YOU CAN HELP THE TRUST AVOID THE NECESSITY AND EXPENSE OF SENDING FOLLOW-UP
LETTERS TO ENSURE A QUORUM BY PROMPTLY SIGNING AND RETURNING THE ENCLOSED PROXY.
IF YOU ARE UNABLE TO ATTEND THE MEETING, PLEASE MARK, SIGN, DATE AND RETURN THE
ENCLOSED PROXY SO THAT THE NECESSARY QUORUM MAY BE REPRESENTED AT THE SPECIAL
MEETING IN LIEU OF ANNUAL MEETING. THE ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES.
<PAGE>
TABLE OF CONTENTS
About the Proxy Solicitation and the Meeting...................................
Election of Five Trustees......................................................
About the Election of Trustees.................................................
Trustees Standing for Election.................................................
Nominees Not Presently Serving as Trustees.....................................
Ratification of the Selection of Independent Auditors..........................
Approval of the Proposed Agreement and Plan of Reorganization..................
Information About the Trust....................................................
Proxies, Quorum and Voting at the Meeting......................................
Share Ownership of the Trustees................................................
Trustee Compensation...........................................................
Officers of the Trust..........................................................
Other Matters and Discretion of Attorneys Named in the Proxy...................
Appendix I: Agreement and Plan of Reorganization..............................
Appendix II: Comparison of Investment Policies and Limitations................
<PAGE>
PRELIMINARY
PROXY STATEMENT
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
About the Proxy Solicitation and the Meeting
The enclosed proxy is solicited on behalf of the Board of Trustees of
the Trust (the "Board" or "Trustees"). The proxies will be voted at the special
meeting in lieu of annual meeting of shareholders of the Trust to be held on
June 25, 1999, at 5800 Corporate Drive, Pittsburgh, Pennsylvania 15237-7000, at
2:00 p.m. (such special meeting in lieu of annual meeting and any adjournment or
postponement thereof are referred to as the "Meeting").
The cost of the solicitation, including the printing and mailing of
proxy materials, will be borne by the Trust. In addition to solicitations
through the mails, proxies may be solicited by officers, employees, and agents
of the Trust or, if necessary, a communications firm retained for this purpose.
Such solicitations may be by telephone, telegraph, through the Internet or
otherwise. Any telephonic solicitations will follow procedures designed to
ensure accuracy and prevent fraud, including requiring identifying shareholder
information, recording the shareholder's instructions, and confirming to the
shareholder after the fact. Shareholders who communicate proxies by telephone or
by other electronic means have the same power and authority to issue, revoke, or
otherwise change their voting instruction as shareholders submitting proxies in
written form. The Trust may reimburse custodians, nominees, and fiduciaries for
the reasonable costs incurred by them in connection with forwarding solicitation
materials to the beneficial owners of shares held of record by such persons.
The Board has reviewed the proposed reorganization of the Trust, and
approved it, subject to shareholder approval. The purposes of the Meeting are
set forth in the accompanying Notice. The Trustees know of no business other
than that mentioned in the Notice that will be presented for consideration at
the Meeting. Should other business properly be brought before the Meeting,
proxies will be voted in accordance with the best judgment of the persons named
as proxies. This proxy statement and the enclosed proxy card are expected to be
mailed on or about May 10, 1999, to shareholders of record at the close of
business on April 27, 1999 (the "Record Date"). On the Record Date, the Trust
had outstanding [_________________] shares of beneficial interest.
The Trust's annual prospectus, which includes audited financial
statements for the fiscal year ended March 31, 1998, was previously mailed to
shareholders. The Trust's semi-annual report, which contains unaudited financial
statements for the period ended September 30, 1998, was also previously mailed
to shareholders. The Trust's principal executive offices are located at
Federated Investors Funds, 5800 Corporate Drive, Pittsburgh, Pennsylvania
15237-7000. The Trust's toll-free telephone number is 1-800-341-7400.
PROPOSAL #1: ELECTION OF FIVE TRUSTEES
The persons named as proxies intend to vote in favor of the election of
Thomas G. Bigley, John F. Cunningham, Charles F. Mansfield, Jr., John E. Murray,
Jr. and John S. Walsh (collectively, the "Nominees") as Trustees of the Trust.
Messrs. Bigley, Cunningham and Murray are presently serving as Trustees. If
elected by shareholders, Messrs. Mansfield and Walsh are expected to assume
their responsibilities as Trustees effective [_______, 1999]. Please see "About
the Election of Trustees" below for current information about the Nominees.
Messrs. Bigley and Murray were appointed Trustees on November 15, 1994 and
February 14, 1995, respectively, to fill vacancies created by the decision to
expand the size of the Board. Mr. Cunningham was appointed a Trustee on January
1, 1999, also to fill a vacancy resulting from the decision to expand the size
of the Board. Messrs. Mansfield and Walsh are being proposed for election as
Trustees to fill vacancies anticipated to result from the resignations of two
current Trustees. The anticipated resignations will not occur if Messrs.
Mansfield and Walsh are not elected as Trustees.
All Nominees have consented to serve if elected. If elected, the
Trustees will hold office without limit in time until death, resignation,
retirement, or removal or until the next meeting of shareholders to elect
Trustees and the election and qualification of their successors. Election of a
Trustee is by a plurality vote, which means that the five individuals receiving
the greatest number of votes at the Meeting will be deemed to be elected.
If any Nominee for election as a Trustee named above shall by reason of
death or for any other reason become unavailable as a candidate at the Meeting,
votes pursuant to the enclosed proxy will be cast for a substitute candidate by
the proxies named on the proxy card, or their substitutes, present and acting at
the Meeting. Any such substitute candidate for election as a Trustee who is an
"interested person" (as defined in the Investment Company Act of 1940, as
amended (the "1940 Act")) of the Trust shall be nominated by the Executive
Committee. The selection of any substitute candidate for election as a Trustee
who is not an "interested person" shall be made by a majority of the Trustees
who are not "interested persons" of the Trust. The Board has no reason to
believe that any Nominee will become unavailable for election as a Trustee.
THE BOARD OF TRUSTEES RECOMMENDS THAT
SHAREHOLDERS VOTE TO ELECT AS TRUSTEES THE NOMINEES FOR
ELECTION TO THE BOARD OF TRUSTEES OF THE TRUST
About the Election of Trustees
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 filling such
vacancy, less than two-thirds of the Trustees then holding office would have
been elected by the shareholders. If, at any time, less than a majority of the
Trustees holding office have been elected by the shareholders, the Trustees then
in office will call a shareholders' meeting for the purpose of electing Trustees
to fill vacancies. Otherwise, there will normally be no meeting of shareholders
called for the purpose of electing Trustees.
Set forth below is a listing of: (i) Trustees standing for election,
and (ii) Nominees standing for election who are not presently serving as
Trustees, along with their addresses, birthdates, present positions with the
Trust, if applicable, and principal occupations during the past five years:
Trustees Standing for Election
Thomas G. Bigley
15 Old Timber Trail
Pittsburgh, PA
Birthdate: February 3, 1934
Trustee
Director or Trustee of the Federated Fund Complex; Director and Member of
Executive Committee, Children's Hospital of Pittsburgh; formerly, Senior
Partner, Ernst & Young LLP; Director, MED 3000 Group, Inc.; Director and Member
of Executive Committee, University of Pittsburgh.
John F. Cunningham
353 El Brillo Way
Palm Beach, FL
Birthdate: March 5, 1943
Trustee
Director or Trustee of some of the Funds in the Federated Fund Complex;
Chairman, President and Chief Executive Officer, Cunningham & Co., Inc.; Trustee
Associate, Boston College; Director, EMC Corporation; formerly, Director,
Redgate Communications.
John E. Murray, Jr., J.D., S.J.D.
President, Duquesne University
Pittsburgh, PA
Birthdate: December 20, 1932
Trustee
Director or Trustee of the Federated Fund Complex; President, Law Professor,
Duquesne University; Consulting Partner, Mollica & Murray.
Nominees Not Presently Serving as Trustees
Charles F. Mansfield, Jr.
80 South Road
Westhampton, NY
Birthdate: April 10, 1945
Director or Trustee of some of the Funds in the Federated Fund Complex;
management consultant.
John S. Walsh
2007 Sherwood Drive
Valparaiso, IN
Birthdate: November 28, 1957
Director or Trustee of some of the Funds in the Federated Fund Complex;
President and Director, Heat Wagon, Inc.; President and Director, Manufacturers
Products, Inc.; President, Portable Heater Parts, a division of Manufacturers
Products, Inc.; Director, Walsh & Kelly, Inc.; formerly, Vice President, Walsh &
Kelly, Inc.
PROPOSAL #2: RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS
The 1940 Act requires that the Trust's independent auditors be selected
by the Board, including a majority of those Board members who are not
"interested persons" (as defined in the 1940 Act) of the Trust, and submitted
for ratification or rejection at the next succeeding meeting of shareholders.
The Board of the Trust, including a majority of its members who are not
"interested persons" of the Trust, approved the selection of Arthur Andersen LLP
(the "Auditors") for the current fiscal year at a Board meeting held on May 12,
1998.
The selection by the Board of the Auditors as independent auditors for
the current fiscal year is submitted to the shareholders for ratification. Apart
from their fees as independent auditors and certain consulting fees, neither the
Auditors nor any of their partners have a direct, or material indirect,
financial interest in the Trust or its investment adviser. The Auditors are a
major international independent accounting firm. The Board believes that the
continued employment of the services of the Auditors for the current fiscal year
would be in the Trust's best interests.
Representatives of the Auditors are not expected to be present at the
Meeting. If a representative is present, he or she will have the opportunity to
make a statement and would be available to respond to appropriate questions. The
ratification of the selection of the Auditors will require the affirmative vote
of a majority of the shares present and voting on the proposal at the Meeting.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE TO RATIFY THE SELECTION OF INDEPENDENT AUDITORS
PROPOSAL #3: TO APPROVE THE PROPOSED REORGANIZATION
The Board of Trustees of the Trust has voted to recommend to
shareholders of the Trust the approval of an Agreement and Plan of
Reorganization (the "Reorganization Agreement") whereby Money Market Obligations
Trust, a Massachusetts business trust ("MMOT"), on behalf of its portfolio,
Liberty U.S. Government Money Market Trust (the "New Fund"), would acquire all
of the assets (subject to the liabilities) of the Trust in exchange for shares
of beneficial interest of the New Fund to be distributed pro rata by the Trust
to its shareholders in complete liquidation and dissolution of the Trust (the
"Reorganization"). As a result of the Reorganization, each shareholder of the
Trust will become the owner of New Fund shares having a total net asset value
equal to the total net asset value of his or her holdings in the Trust on the
date of the Reorganization.
MMOT is an open-end management investment company which currently
includes [thirteen] portfolios, each of which has its own investment objective.
The New Fund is a newly-organized portfolio of MMOT (initially a "shell"
portfolio) with the same investment objective as the Trust. The permissible
investments for the New Fund are the same as the permissible investments for the
Trust, and the New Fund uses comparable investment strategies. The New Fund's
investment objective, like the Trust's investment objective, is stability of
principal and current income consistent with stability of principal. The New
Fund pursues this investment objective by investing in a portfolio of money
market instruments maturing in 397 days or less. The average maturity of money
market instruments in the New Fund's portfolio, computed on a dollar weighted
basis, will be 90 days or less. The Trust pursues its investment objective by
investing in a portfolio of money market instruments maturing in thirteen months
or less. The average maturity of money market instruments in the Trust's
portfolio, computed on a dollar weighted basis, will be 90 days or less. Both
the Trust and the New Fund are money market mutual funds which seek to stabilize
their offering and redemption prices at $1.00 per share, although there can be
no assurance that either the Trust or the New Fund will be able to do so. (See
"Comparison of Investment Policies and Risk Factors" below.) Investments in the
Trust and the New Fund are neither insured nor guaranteed by the U.S.
government.
As a condition to the Reorganization transactions, the Trust and MMOT
will receive an opinion of counsel that the Reorganization will be considered a
tax-free "reorganization" under applicable provisions of the Internal Revenue
Code, so that no gain or loss for federal income tax purposes will be recognized
by either the Trust or MMOT or by the shareholders of the Trust or the New Fund.
The tax basis of the New Fund shares received by Trust shareholders will be the
same as the tax basis of their shares in the Trust.
Significant components of the Reorganization and provisions of the
Reorganization Agreement are summarized below; however, this summary of the
Reorganization Agreement is qualified in its entirety by reference to the full
text of the Reorganization Agreement between the Trust and MMOT, a copy of
which is attached as Appendix I to this Proxy Statement.
Description of the Reorganization Agreement
The Reorganization Agreement provides that all of the assets of the
Trust will be transferred to the New Fund, subject to the liabilities of the
Trust. Each holder of shares of the Trust will receive the same number (with
the same aggregate value) of shares of the New Fund as the shareholder had in
the Trust immediately prior to the Reorganization. The Trust's shareholders
will not pay a sales charge, commission or other transaction cost in
connection with their receipt of the shares of the New Fund.
Following the transfer of assets and assumption of liabilities of the
Trust to and by the New Fund, and the issuance of shares by the New Fund to the
Trust, the Trust will distribute the shares of the New Fund received by the
Trust among the shareholders of the Trust in proportion to the number of shares
each such shareholder holds in the Trust. In addition to receiving the shares of
the New Fund, each shareholder of the Trust will have a right to receive any
declared and unpaid dividends or other distributions of the Trust. Following the
Reorganization, shareholders of the Trust will be shareholders of the New Fund.
Upon the completion of the Reorganization, the Trust will be deregistered as an
investment company under the 1940 Act and its existence terminated under state
law. The stock transfer books of the Trust will be permanently closed after the
Reorganization. MMOT will not issue share certificates with respect to shares of
the New Fund issued in connection with the Reorganization.
The Reorganization is subject to certain conditions, including:
approval of the Reorganization Agreement and the transactions and exchange
contemplated thereby as described in this Proxy Statement by the shareholders of
the Trust; the receipt of a legal opinion described in the Reorganization
Agreement regarding tax matters; the receipt of certain certificates from the
parties concerning the continuing accuracy of the representations and warranties
in the Reorganization Agreement and other matters; and the parties' performance,
in all material respects, of the agreements and undertakings in the
Reorganization Agreement. Assuming satisfaction of the conditions in the
Reorganization Agreement, the Reorganization is expected to occur on or after
_______________, 1999.
The Trust's investment adviser is responsible for the payment of all
expenses of the Reorganization incurred by either party, whether or not the
Reorganization is consummated. Such expenses include, but are not limited to,
legal fees, registration fees, transfer taxes (if any), the fees of banks and
transfer agents and the costs of preparing, printing, copying and mailing proxy
solicitation materials to the Trust's shareholders.
The Reorganization may be terminated at any time prior to its
consummation by either the Trust or MMOT if circumstances should develop that,
in the opinion of either the Board of the Trust or the Board of Trustees of
MMOT, make proceeding with the Reorganization Agreement inadvisable. The
Reorganization Agreement provides further that at any time prior to the
consummation of the Reorganization: (i) the parties thereto may amend or modify
any of the provisions of the Reorganization Agreement provided that such
amendment or modification would not have a material adverse effect on the
benefits intended under the Reorganization Agreement and it would be consistent
with the best interests of the shareholders of the Trust and the New Fund; and
(ii) either party may waive any of the conditions set forth in the
Reorganization Agreement if, in the judgment of the waiving party, such waiver
will not have a material adverse effect on the benefits intended under the
Reorganization Agreement to the shareholders of the Trust or the shareholders of
the New Fund, as the case may be.
Reasons for the Proposed Reorganization
The Trust was established as a Massachusetts business trust in 1979.
Although the Board has been satisfied with the Trust's performance, it, and the
Trust's investment adviser, believe that certain operating efficiencies can be
achieved by reorganizing the Trust as a portfolio of MMOT rather than remaining
as a separate entity. Accordingly, the Trust's investment adviser has
recommended to the Board of Trustees of MMOT that the New Fund be organized for
the purpose of acquiring the Trust's assets and thereby reorganizing the Trust
as a portfolio of MMOT. The Trust's investment adviser similarly recommended to
the Trustees of the Trust that the Trust's assets be transferred to MMOT, on
behalf of the New Fund, in order to reorganize it as a separate portfolio of
MMOT. In connection with this proposal, the Trust's investment adviser
emphasized the comparable advisory services provided the Trust and the New Fund,
the identical investment objectives and similar investment policies of the Trust
and the New Fund, and the administrative convenience and simplification of
management achievable by operating the Trust as a portfolio of MMOT.
Board of Trustees' Considerations and Recommendations
The Trust's Board of Trustees, at its meeting on _______________, 1999,
concluded that the reorganization of the Trust as a portfolio of MMOT could
provide for operating efficiencies. The Trust's Trustees also noted that Trust
shareholders would continue to receive the same quality of investment management
services from the New Fund's investment adviser, which is also the Trust's
current investment adviser. The Trust's Board of Trustees, including a majority
of the Trustees who are not "interested persons," additionally determined that
participation in the Reorganization is in the best interests of the Trust and
that the interests of the Trust shareholders would not be diluted as a result of
its effecting the Reorganization. Based upon the foregoing considerations, and
the fact that shareholders of the Trust will not suffer any adverse federal
income tax consequences as a result of the Reorganization, the Board of Trustees
of the Trust unanimously voted to approve, and recommended to Trust shareholders
the approval of, the Reorganization.
The Board of Trustees of MMOT, including the Trustees who are not
"interested persons," at the Board's meeting on _______________, 1999
unanimously concluded that consummation of the Reorganization is in the best
interests of MMOT and the shareholders of the New Fund, and that the interests
of New Fund shareholders would not be diluted as a result of effecting the
Reorganization. As a consequence, the Board of Trustees of MMOT unanimously
approved the Reorganization Agreement.
Under the terms of the Declaration of Trust, the approval of the
Reorganization requires the affirmative vote of at least two-thirds of the
outstanding voting securities of the Trust. (See "Proxies, Quorum and Voting at
the Meeting" below.)
Federal Income Tax Consequences
As a condition to the Reorganization transactions, the Trust and MMOT,
on behalf of the New Fund, will receive an opinion from Dickstein Shapiro Morin
& Oshinsky LLP, special counsel to the Trust and MMOT, to the effect that, on
the basis of the existing provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), current administrative rules and court decisions, for
federal income tax purposes: (1) the Reorganization as set forth in the
Reorganization Agreement will constitute a tax-free reorganization under section
368(a)(1)(F) of the Code; (2) no gain or loss will be recognized by the New Fund
upon its receipt of the Trust's assets in exchange for New Fund shares; (3) no
gain or loss will be recognized by the Trust upon the transfer of its assets to
the New Fund in exchange for New Fund shares or upon the distribution (whether
actual or constructive) of the New Fund shares to the Trust shareholders in
exchange for their shares of the Trust; (4) no gain or loss will be recognized
by shareholders of the Trust upon exchange of the Trust shares for New Fund
shares; (5) the holding period and tax basis for the Trust's assets acquired by
the New Fund will be the same as the holding period and the tax basis to the
Trust immediately prior to the Reorganization; (6) the holding period of New
Fund shares received by shareholders of the Trust pursuant to the Reorganization
Agreement will be the same as the holding period of Trust shares held by such
shareholders immediately prior to the Reorganization, provided the Trust shares
were held as capital assets on the date of the Reorganization; and (7) the tax
basis of New Fund shares received by shareholders of the Trust pursuant to the
Reorganization Agreement will be the same as the tax basis of Trust shares held
by such shareholders immediately prior to the Reorganization.
The Trust and MMOT have not sought a tax ruling from the Internal
Revenue Service ("IRS"), but are acting in reliance upon the opinion of
counsel discussed in the previous paragraph. That opinion is not binding on
the IRS and does not preclude the IRS from adopting a contrary position.
Shareholders should consult their own advisers concerning the potential tax
consequences to them, including state and local income taxes.
Comparison of Investment Policies and Risk Factors
The investment objective of the Trust is identical to the investment
objective of the New Fund. Investments in the Trust and the New Fund are not
insured or guaranteed by the U.S. government. Since the Trust and the New Fund
are managed to maintain a constant net asset value, the Trust and the New Fund
have little risk of principal loss. However, investments in the Trust and the
New Fund are subject to certain risks, which include, but are not limited to,
the following: the possibility that issuers of securities owned by the Trust
and the New Fund will have their credit ratings downgraded; the ability of the
issuers of securities owned by the Trust and the New Fund to meet their
obligations for payment of principal and interest when due or to repurchase
such securities as previously agreed; interest rate or market risk, which is
the potential for fluctuations in the prices of debt securities owned by the
Trust and the New Fund, due to changing interest rates (e.g., when interest
rates rise, bond prices generally decline); prepayment or call risk, which is
the likelihood that, during periods of falling interest rates, debt securities
will be prepaid (or "called") prior to maturity, requiring the proceeds to be
invested by the Trust and the New Fund at a generally lower interest rate; and
international economic and political developments, which may have an impact on
issuers of securities owned by the Trust and the New Fund.
The permissible investments for the Trust and the New Fund are
identical. The investment policies and restrictions of the New Fund have been
established so as to be comparable to the current investment policies and
restrictions of the Trust. The differences between the investment policies and
restrictions of the Trust and those of the New Fund result from the
standardization of certain investment policies and restrictions among the
Federated Funds, including the New Fund, and the elimination of certain
investment limitations which govern the Trust and had been previously required
under state law. A number of these investment limitations have been preempted
and are no longer applicable, and hence, the New Fund is not required to adopt
such limitations. Appendix II to this Proxy Statement identifies the
differences in the investment policies and restrictions of the Trust and of
the New Fund. The investment adviser to the Trust and the New Fund does not
believe that the differences in investment policies and restrictions between
the Trust and the New Fund are material. In addition, the investment adviser
to the Trust and the New Fund believes that the level of risk of an investment
in the Trust is comparable to, and does not materially differ from, the level
of risk of an investment in the New Fund.
Comparative Information on Shareholder Rights and Obligations
Each of the Trust and MMOT is organized as a business trust pursuant to
a Declaration of Trust under the laws of the Commonwealth of Massachusetts. The
rights of shareholders of the Trust and of shareholders of MMOT relating to
voting, distributions and redemptions, as set forth in the applicable
Declaration of Trust and By-Laws, are substantively identical. Set forth below
is a brief summary of the significant rights of shareholders of the Trust and of
MMOT.
Neither the Trust nor MMOT are required to hold annual meetings of
shareholders. Shareholder approval is necessary only for certain changes in
operations or the election of Trustees under certain circumstances. A special
meeting of shareholders of either the Trust or MMOT for any permissible purpose
shall be called by the Trustees upon the written request of the holders of at
least 10% of the outstanding shares of the Trust or MMOT, as the case may be.
Each share of the Trust and MMOT is entitled to one vote. All shares of MMOT
have equal voting rights, except that only shares of the New Fund are entitled
to vote on matters only affecting the New Fund.
Under certain circumstances, shareholders of the Trust and shareholders
of the New Fund may be held personally liable as partners under Massachusetts
law for obligations of the Trust or of MMOT, respectively. To protect their
shareholders, the Trust and MMOT have filed legal documents with the
Commonwealth of Massachusetts that expressly disclaim the liability of their
shareholders for such acts or obligations of the Trust or MMOT. These documents
require that notice of this disclaimer be given in each agreement, obligation or
instrument that the Trust or MMOT or their Trustees enter into or sign.
In the unlikely event a shareholder is held personally liable for the
Trust's or the New Fund's obligations, each of the Trust and the New Fund is
required to use its property to protect or compensate the shareholder. On
request, the Trust or the New Fund will defend any claim made and pay any
judgment against a shareholder for any act or obligation of the New Fund.
Therefore, financial loss resulting from liability as a shareholder will occur
only if the Trust or MMOT cannot meet its obligations to indemnify shareholders
and pay judgments against them from the assets of the Trust or MMOT.
Purchase and Redemption Information, Exchange Privileges, Distribution and
Pricing
The purchase, redemption, exchange privileges and distribution
policies of the Trust and the New Fund are identical.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS OF THE TRUST
VOTE "FOR" APPROVAL OF THE REORGANIZATION AGREEMENT
INFORMATION ABOUT THE TRUST
Proxies, Quorum and Voting at the Meeting
Only shareholders of record on the Record Date will be entitled to vote
at the Meeting. Each share of the Trust is entitled to one vote. Fractional
shares are entitled to proportionate shares of one vote. Any person giving a
proxy has the power to revoke it any time prior to its exercise by executing a
superseding proxy or by submitting a written notice of revocation to the
Secretary of the Trust. In addition, although mere attendance at the Meeting
will not revoke a proxy, a shareholder present at the Meeting may withdraw his
or her proxy and vote in person. All properly executed and unrevoked proxies
received in time for the Meeting will be voted in accordance with the
instructions contained in the proxies. If no instruction is given on the proxy,
the persons named as proxies will vote the shares represented thereby in favor
of the matters set forth in the attached Notice.
In order to hold the Meeting, a "quorum" of shareholders must be
present. Holders of one-fourth of the total number of outstanding shares of the
Trust, present in person or by proxy, shall be required to constitute a quorum
for the purpose of voting on the proposals made.
For purposes of determining a quorum for transacting business at the
Meeting, abstentions and broker "non-votes" (that is, proxies from brokers or
nominees indicating that such persons have not received instructions from the
beneficial owner or other persons entitled to vote shares on a particular matter
with respect to which the brokers or nominees do not have discretionary power)
will be treated as shares that are present but which have not been voted. For
this reason, abstentions and broker non-votes will have the effect of a "no"
vote for purposes of obtaining the requisite approval of some of the proposals.
If a quorum is not present, the persons named as proxies may vote those
proxies which have been received to adjourn the Meeting to a later date. In the
event that a quorum is present but sufficient votes in favor of one or more of
the proposals have not been received, the persons named as proxies may propose
one or more adjournments of the Meeting to permit further solicitations of
proxies with respect to such proposal(s). All such adjournments will require the
affirmative vote of a majority of the shares present in person or by proxy at
the session of the Meeting to be adjourned. The persons named as proxies will
vote AGAINST any such adjournment those proxies which they are required to vote
against the proposal and will vote in FAVOR of the adjournment other proxies
which they are authorized to vote. A shareholder vote may be taken on other
proposals in this Proxy Statement prior to any such adjournment if sufficient
votes have been received for approval.
As referred to in this Proxy Statement, the "Federated Fund Complex,"
"The Funds" or "Funds" include the following investment companies: Automated
Government Money Trust; Cash Trust Series II; Cash Trust Series, Inc.; CCB
Funds; DG Investor Series; Edward D. Jones & Co. Daily Passport Cash Trust;
Federated Adjustable Rate U.S. Government Fund, Inc.; Federated American Leaders
Fund, Inc.; Federated ARMs Fund; Federated Core Trust; Federated Equity Funds;
Federated Equity Income Fund, Inc.; Federated Fund for U.S. Government
Securities, Inc.; Federated GNMA Trust; Federated Government Income Securities,
Inc.; Federated Government Trust; Federated High Income Bond Fund, Inc.;
Federated High Yield Trust; Federated Income Securities Trust; Federated Income
Trust; Federated Index Trust; Federated Institutional Trust; Federated Insurance
Series; Federated Master Trust; Federated Municipal Opportunities Fund, Inc.;
Federated Municipal Securities Fund, Inc.; Federated Municipal Trust; Federated
Short-Term Municipal Trust; Federated Short-Term U.S. Government Trust;
Federated Stock and Bond Fund, Inc.; Federated Stock Trust; Federated Tax-Free
Trust; Federated Total Return Series, Inc.; Federated U.S. Government Bond Fund;
Federated U.S. Government Securities Fund: 1-3 Years; Federated U.S. Government
Securities Fund: 2-5 Years; Federated U.S. Government Securities Fund: 5-10
Years; Federated Utility Fund, Inc.; Fixed Income Securities, Inc.; Intermediate
Municipal Trust; International Series, Inc.; Investment Series Funds, Inc.;
Liberty Term Trust, Inc. - 1999; Liberty U.S. Government Money Market Trust;
Liquid Cash Trust; Managed Series Trust; Money Market Management, Inc.; Money
Market Obligations Trust; Money Market Obligations Trust II; Money Market Trust;
Municipal Securities Income Trust; Newpoint Funds; Regions Funds; RIGGS Funds;
Tax-Free Instruments Trust; The Planters Funds; Trust for Government Cash
Reserves; Trust for Short-Term U.S. Government Securities; Trust for U.S.
Treasury Obligations; WesMark Funds; WCT Funds; World Investment Series, Inc.;
Blanchard Funds; Blanchard Precious Metals Fund, Inc.; High Yield Cash Trust;
Investment Series Trust; Targeted Duration Trust; The Virtus Funds; and Trust
for Financial Institutions.
Share Ownership of the Trustees
Officers and Trustees of the Trust own less than 1% of the Trust's outstanding
shares.
At the close of business on the Record Date, the following person owned, to
the knowledge of management, more than 5% of the outstanding shares of the
Trust: [__________________]
<TABLE>
<CAPTION>
<S> <C> <C>
Trustee Compensation
Name, Aggregate Total Compensation Paid
Position With Compensation From Fund Complex+
Trust From
Trust1#
- --------------------------------- -------------------------- ----------------------------------------------------------
John F. Donahue@ $0 $0 for the Trust and
Chairman and Trustee 56 other investment companies in the Fund Complex
Thomas G. Bigley $_______ $113,860.22 for the Trust and
Trustee 56 other investment companies in the Fund Complex
John T. Conroy, Jr. $_______ $125,264.48 for the Trust and
Trustee 56 other investment companies in the Fund Complex
William J. Copeland $_______ $125,264.48 for the Trust and
Trustee 56 other investment companies in the Fund Complex
John F. Cunningham** $0 $0 for the Trust and
Trustee 56 other investment companies in the Fund Complex
James E. Dowd $_______ $125,264.48 for the Trust and
Trustee 56 other investment companies in the Fund Complex
Lawrence D. Ellis, M.D.* $_______ $113,860.22 for the Trust and
Trustees 56 other investment companies in the Fund Complex
Edward L. Flaherty, Jr.@ $_______ $125,264.48 for the Trust and
Trustee 56 other investment companies in the Fund Complex
Edward C. Gonzalez* $0 $0 for the Trust and
President & Trustee 56 other investment companies in the Fund complex
Peter E. Madden $_______ $113,860.22 for the Trust and
Trustee 56 other investment companies in the Fund Complex
John E. Murray, Jr. $_______ $113,860.22 for the Trust and
Trustee 56 other investment companies in the Fund Complex
Wesley W. Posvar $_______ $113,860.22 for the Trust and
Trustee 56 other investment companies in the Fund Complex
Marjorie P. Smuts $_______ $113,860.22 for the Trust and
Trustee 56 other investment companies in the Fund Complex
</TABLE>
1 Information is furnished for the fiscal year ended March 31, 1999.
# The aggregate compensation is provided for the Trust which is comprised
of one portfolio.
+ The information is provided for the last calendar year.
* The Trustee is deemed to be an "interested person" as defined in the 1940 Act.
@ Member of the Executive Committee.
** Mr. Cunningham became a member of the Board of Trustees on January 1,
1999. Mr. Cunningham did not receive any fees from the Fund Complex as of the
last calendar year.
During the fiscal year ended March 31, 1999, there were four meetings
of the Board of Trustees. The interested Trustees, other than Dr. Ellis, do not
receive fees from the Trust. Dr. Ellis is an interested person by reason of the
employment of his son-in-law by Federated Securities Corp. All Trustees were
reimbursed for expenses for attendance at Board of Trustees meetings.
The Executive Committee of the Board of Trustees handles the
responsibilities of the Board between meetings of the Board. Other than its
Executive Committee, the Trust has one Board committee, the Audit Committee.
Generally, the function of the Audit Committee is to assist the Board of
Trustees in fulfilling its duties relating to the Trust's accounting and
financial reporting practices and to serve as a direct line of communication
between the Board of Trustees and the independent auditors. The specific
functions of the Audit Committee include recommending the engagement or
retention of the independent auditors, reviewing with the independent auditors
the plan and the results of the auditing engagement, approving professional
services provided by the independent auditors prior to the performance of such
services, considering the range of audit and non-audit fees, reviewing the
independence of the independent auditors, reviewing the scope and results of the
Trust's procedures for internal auditing, and reviewing the Trust's system of
internal accounting controls.
For the most recently completed fiscal year, Messrs. Flaherty, Conroy,
Copeland, and Dowd served on the Audit Committee. These Trustees are not
interested Trustees of the Trust. During the fiscal year ended March 31, 1999,
there were four meetings of the Audit Committee. All of the members of the Audit
Committee were present for each meeting. Each member of the Audit Committee
receives an annual fee of $100 plus $25 for attendance at each meeting and is
reimbursed for expenses of attendance.
Officers of the Trust
The executive officers of the Trust are elected annually by the Board
of Trustees. Each officer holds the office until qualification of his successor.
The names and birthdates of the executive officers of the Trust and their
principal occupations during the last five years are as follows:
John F. Donahue
Federated Investors Tower
Pittsburgh, PA
Birthdate: July 28, 1924
Chairman and Trustee
Chairman and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; Chairman and Director, Federated Research
Corp. and Federated Global Research Corp.; Chairman, Passport Research, Ltd.;
Chief Executive Officer and Director or Trustee of the Funds. Mr. Donahue is the
father of J. Christopher Donahue, Executive Vice President of the Trust.
Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
President and Trustee
Trustee or Director of some of the Funds in the Federated Fund Complex;
President, Executive Vice President and Treasurer of some of the Funds in the
Federated Fund Complex; Vice Chairman, Federated Investors, Inc.; Vice
President, Federated Advisers, Federated Management, Federated Research,
Federated Research Corp., Federated Global Research Corp. and Passport Research,
Ltd.; Executive Vice President and Director, Federated Securities Corp.;
Trustee, Federated Shareholder Services Company.
J. Christopher Donahue
Federated Investors Tower
Pittsburgh, PA
Birthdate: April 11, 1949
Executive Vice President
President or Executive Vice President of the Federated Fund Complex; Director or
Trustee of some of the Funds in the Federated Fund Complex; President and
Director, Federated Investors, Inc.; President and Trustee, Federated Advisers,
Federated Management, and Federated Research; President and Director, Federated
Research Corp. and Federated Global Research Corp.; President, Passport
Research, Ltd.; Trustee, Federated Shareholder Services Company; Director,
Federated Services Company. Mr. Donahue is the son of John F. Donahue, Chairman
and Trustee of the Trust.
John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 26, 1938
Executive Vice President and Secretary
Executive Vice President and Secretary of the Federated Fund Complex; Executive
Vice President, Secretary, and Director, Federated Investors, Inc.; Trustee,
Federated Advisers, Federated Management, and Federated Research; Director,
Federated Research Corp. and Federated Global Research Corp.; Director,
Federated Services Company; Director, Federated Securities Corp.
Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 17, 1923
Vice President
President or Vice President of some of the Funds in the Federated Fund Complex;
Director or Trustee of some of the Funds in the Federated Fund Complex;
Executive Vice President, Federated Investors, Inc.; Chairman and Director,
Federated Securities Corp.
Richard J. Thomas
Federated Investors Tower
Pittsburgh, PA
Birthdate: June 17, 1954
Treasurer
Treasurer of the Federated Fund Complex; Vice President - Funds Financial
Services Division, Federated Investors, Inc.
None of the Officers of the Trust received salaries from the Trust
during the fiscal year ended March 31, 1999.
OTHER MATTERS AND DISCRETION OF ATTORNEYS NAMED IN THE PROXY
The Trust is not required, and does not intend, to hold regular annual
meetings of shareholders. Shareholders wishing to submit proposals for
consideration for inclusion in a proxy statement for the next meeting of
shareholders should send their written proposals to Liberty U.S. Government
Money Market Trust, Federated Investors Funds, 5800 Corporate Drive, Pittsburgh,
Pennsylvania 15237-7000, so that they are received within a reasonable time
before any such meeting.
No business other than the matters described above is expected to come
before the Meeting, but should any other matter requiring a vote of shareholders
arise, including any question as to an adjournment or postponement of the
Meeting, the persons named on the enclosed proxy card will vote on such matters
according to their best judgment in the interests of the Trust.
SHAREHOLDERS ARE REQUESTED TO COMPLETE, DATE
AND SIGN THE ENCLOSED PROXY CARD
AND RETURN IT IN THE ENCLOSED
ENVELOPE, WHICH NEEDS NO POSTAGE
IF MAILED IN THE UNITED STATES.
By Order of the Board of Trustees,
John W. McGonigle
Secretary
May l0, 1999
<PAGE>
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
Investment Adviser
FEDERATED ADVISERS
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Distributor
FEDERATED SECURITIES CORP.
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Administrator
FEDERATED SERVICES COMPANY
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Cusip
(_____/99)
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of Liberty
U.S. Government Money Market Trust (the "Trust"), hereby appoint Patricia F.
Conner, Gail Cagney, William Haas, Susan M. Jones and Ann M. Scanlon, or any one
of them, true and lawful attorneys, with the power of substitution of each, to
vote all shares of the Trust which the undersigned is entitled to vote at the
Special Meeting in lieu of Annual Meeting of Shareholders (the "Meeting") to be
held on June 25, 1999, at 5800 Corporate Drive, Pittsburgh, Pennsylvania, at
2:00 p.m. and at any adjournment thereof.
The attorneys named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. Discretionary authority
is hereby conferred as to all other matters as may properly come before the
Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF LIBERTY U.S.
GOVERNMENT MONEY MARKET TRUST. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED
IN THE MANNER DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED "FOR" THE PROPOSALS.
By checking the box "FOR" below, you will vote to approve each of the proposed
items in this proxy, and to elect each of the nominees as Trustees of the Trust
FOR [ ]
Proposal 1 To elect Thomas G. Bigley, Jr., John F. Cunningham,
Charles F. Mansfield, Jr., John E. Murray, Jr. and John S. Walsh as Trustees of
the Trust
FOR [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
VOTE FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR"
a particular nominee, mark the "VOTE FOR ALL
EXCEPT" box and strike a line through the name of
each nominee for whom you are NOT voting. Your
shares will be voted for the remaining nominees.
Proposal 2 To ratify the selection of Arthur Andersen LLP as the Trust's
independent auditors
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
Proposal 3 To approve a proposed Agreement and Plan of Reorganization
between the Trust and Money Market Obligations Trust, on
behalf of its series, Liberty U.S. Government Money Market
Trust (the "New Fund"), whereby the New Fund would acquire all
of the assets of the Trust in exchange for shares of the New
Fund to be distributed pro rata by the Trust to its
shareholders in complete liquidation and termination of the
Trust
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
YOUR VOTE IS
IMPORTANT Please
complete, sign and
return this card
as soon as
possible.
Dated
Signature
Signature (Joint Owners)
Please sign this proxy exactly as your name appears on the books of the Trust.
Joint owners should each sign personally. Directors and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
You may also vote your shares by
touchtone phone by calling
1-800-690-6903 or through the
Internet at www.proxyvote.com
<PAGE>
II-5
I-1
APPENDIX I
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated as of __________, 1999
(the "Agreement") between Liberty U.S. Government Money Market Trust, a
Massachusetts business trust (the "Fund"), with its principal place of business
at 5800 Corporate Drive, Pittsburgh, Pennsylvania 15237-7000, and Money Market
Obligations Trust , a Massachusetts business trust (the "Trust"), with its
principal place of business located at 5800 Corporate Drive, Pittsburgh,
Pennsylvania 15237-7000 on behalf of its newly-organized portfolio, Liberty U.S.
Government Money Market Trust (the "Successor Fund").
WHEREAS, the Board of Trustees of the Fund and the Board of
Trustees of the Trust have determined that it is in the best interests of the
Fund and the Trust, respectively, that the assets of the Fund be acquired by the
Successor Fund pursuant to this Agreement; and
WHEREAS, the parties desire to enter into a plan of exchange which
would constitute a reorganization within the meaning of Section 368(a)(1)(F) of
the Internal Revenue Code of 1986, as amended (the "Code"):
NOW THEREFORE, in consideration of the premises and of the
covenants and agreements hereinafter set forth, the parties hereto agree as
follows:
1. Plan of Exchange.
(a) Subject to the terms and conditions set forth herein, on
the Exchange Date (as defined herein) the Fund shall assign, transfer and convey
its assets, including all securities and cash held by the Fund (subject to the
liabilities of the Fund) to the Successor Fund, and the Successor Fund shall
acquire all of the assets of the Fund (subject to the liabilities of the Fund)
in exchange for full and fractional shares of beneficial interest of the
Successor Fund (the "Successor Fund Shares"), to be issued by the Trust, having
an aggregate net asset value equal to the value of the net assets of the Fund.
The value of the assets of the Fund and the net asset value per share of the
Successor Fund Shares shall be determined as of the Valuation Date (as defined
herein) in accordance with the procedures for determining the value of the
Successor Fund's assets set forth in the Successor Fund's organizational
documents and the then-current prospectus and statement of additional
information for the Successor Fund that forms a part of the Successor Fund's
Registration Statement on Form N-1A (the "Registration Statement"). In lieu of
delivering certificates for the Successor Fund Shares, the Trust shall credit
the Successor Fund Shares to the Fund's account on the share record books of the
Trust and shall deliver a confirmation thereof to the Fund. The Fund shall then
deliver written instructions to the Trust's transfer agent to establish accounts
for the shareholders on the share record books relating to the Successor Fund.
(b) Delivery of the assets of the Fund to be transferred shall
be made not later than the next business day following the Valuation Date (the
"Exchange Date"). Assets transferred shall be delivered to State Street Bank and
Trust Company, the Trust's custodian (the "Custodian"), for the account of the
Trust and the Successor Fund with all securities not in bearer or book entry
form duly endorsed, or accompanied by duly executed separate assignments or
stock powers, in proper form for transfer, with signatures guaranteed, and with
all necessary stock transfer stamps, sufficient to transfer good and marketable
title thereto (including all accrued interest and dividends and rights
pertaining thereto) to the Custodian for the account of the Trust and the
Successor Fund free and clear of all liens, encumbrances, rights, restrictions
and claims. All cash delivered shall be in the form of immediately available
funds payable to the order of the Custodian for the account of the Trust and the
Successor Fund.
(c) The Fund will pay or cause to be paid to the Trust any
interest received on or after the Exchange Date with respect to assets
transferred from the Fund to the Successor Fund hereunder and to the Trust and
any distributions, rights or other assets received by the Fund after the
Exchange Date as distributions on or with respect to the securities transferred
from the Fund to the Successor Fund hereunder. All such assets shall be deemed
included in assets transferred to the Successor Fund on the Exchange Date and
shall not be separately valued.
(d) The Valuation Date shall be __________, 1999, or such earlier or later
date as may be mutually agreed upon by the parties.
(e) As soon as practicable after the Exchange Date, the Fund
shall distribute all of the Successor Fund Shares received by it among the
shareholders of the Fund in proportion to the number of shares each such
shareholder holds in the Fund and shall take all other steps necessary to effect
its dissolution and termination. After the Exchange Date, the Fund shall not
conduct any business except in connection with its dissolution and termination.
2. The Fund's Representations and Warranties. The Fund represents and
warrants to and agrees with the Trust on behalf of the Successor Fund as
follows:
(a) The Fund is a business trust duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts and has power to own all of its properties and assets and, subject
to the approval of its shareholders as contemplated hereby, to carry out this
Agreement.
(b) This Agreement has been duly authorized, executed and
delivered by the Fund and is valid and binding on the Fund, enforceable in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, and other similar laws of general
applicability relating to or affecting creditors' rights and to general
principles of equity. The execution and delivery of this Agreement does not and
will not, and the consummation of the transactions contemplated by this
Agreement will not, violate the Fund's Declaration of Trust or By-Laws or any
agreement or arrangement to which it is a party or by which it is bound.
(c) The Fund is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company,
and such registration has not been revoked or rescinded and is in full force and
effect.
(d) Except as shown on the audited financial statements of the
Fund for its most recently completed fiscal period and as incurred in the
ordinary course of the Fund's business since then, the Fund has no known
liabilities of a material amount, contingent or otherwise, and there are no
legal, administrative or other proceedings pending or, to the Fund's knowledge,
threatened against the Fund.
(e) On the Exchange Date, the Fund will have full right, power
and authority to sell, assign, transfer and deliver the Fund's assets to be
transferred by it hereunder.
3. The Trust's Representations and Warranties. The Trust, on behalf of
the Successor Fund, represents and warrants to and agrees with the Fund as
follows:
(a) The Trust is a business trust duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts and has power to carry on its business as it is now being
conducted and to carry out this Agreement.
(b) This Agreement has been duly authorized, executed and
delivered by the Trust and is valid and binding on the Trust, enforceable in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, and other similar laws of general
applicability relating to or affecting creditors' rights and to general
principles of equity. The execution and delivery of this Agreement does not and
will not, and the consummation of the transactions contemplated by this
Agreement will not, violate the Trust's Declaration of Trust or By-Laws or any
agreement or arrangement to which it is a party or by which it is bound.
(c) The Trust is registered under the 1940 Act as an open-end
management investment company and such registration has not been revoked or
rescinded and is in full force and effect.
(d) The Successor Fund does not have any known liabilities of
a material amount, contingent or otherwise, and there are no legal,
administrative or other proceedings pending or, to the Trust's knowledge,
threatened against the Successor Fund. Other than organizational activities, the
Successor Fund has not engaged in any business activities.
(e) At the Exchange Date, the Successor Fund Shares to be
issued to the Fund (the only Successor Fund Shares to be issued as of the
Exchange Date) will have been duly authorized and, when issued and delivered
pursuant to this Agreement, will be legally and validly issued and will be fully
paid and non-assessable. No Trust or Successor Fund shareholder will have any
preemptive right of subscription or purchase in respect thereof.
4. The Trust's Conditions Precedent. The obligations of the Trust
hereunder shall be subject to the following conditions:
(a) The Fund shall have furnished to the Trust a statement of
the Fund's assets, including a list of securities owned by the Fund with their
respective tax costs and values determined as provided in Section 1 hereof, all
as of the Valuation Date.
(b) As of the Exchange Date, all representations and
warranties of the Fund made in this Agreement shall be true and correct as if
made at and as of such date, and the Fund shall have complied with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to such date.
(c) A vote of the shareholders of the Fund approving this
Agreement and the transactions and exchange contemplated hereby shall have been
adopted by the vote required by applicable law.
(d) The Fund's Conditions Precedent. The obligations of the
Fund hereunder with respect to the Fund shall be subject to the condition that
as of the Exchange Date all representations and warranties of the Trust made in
this Agreement shall be true and correct as if made at and as of such date, and
that the Trust shall have complied with all of the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to such
date.
5. The Trust's and the Fund's Conditions Precedent. The obligations of
both the Trust and the Fund hereunder shall be subject to the following
conditions:
(a) The post-effective amendment to the Trust's Registration
Statement on Form N-1A relating to the Successor Fund under the Securities Act
of 1933, as amended, and the 1940 Act, if applicable, shall have become
effective, and any additional post-effective amendments to such Registration
Statement as are determined by the Trustees of the Trust to be necessary and
appropriate shall have been filed with the Commission and shall have become
effective.
(b) No action, suit or other proceeding shall be threatened or
pending before any court or governmental agency which seeks to restrain or
prohibit, or obtain damages or other relief in connection with, this Agreement
or the transaction contemplated herein.
(c) Each party shall have received an opinion of Dickstein
Shapiro Morin & Oshinsky LLP to the effect that the reorganization contemplated
by this Agreement qualifies as a "reorganization" under Section 368(a)(1)(F) of
the Code.
Provided, however, that at any time prior to the Exchange Date, any of
the foregoing conditions in this Section 6 may be waived by the parties if, in
the judgment of the parties, such waiver will not have a material adverse effect
on the benefits intended under this Agreement to the shareholders of the Fund.
6. Termination of Agreement. This Agreement and the transactions
contemplated hereby may be terminated and abandoned by resolution of the Board
of Trustees of the Fund or the Board of Trustees of the Trust at any time prior
to the Exchange Date (and notwithstanding any vote of the shareholders of the
Fund) if circumstances should develop that, in the opinion of either the Board
of Trustees of the Fund or the Board of Trustees of the Trust, make proceeding
with this Agreement inadvisable.
If this Agreement is terminated and the exchange contemplated hereby is
abandoned pursuant to the provisions of this Section 7, this Agreement shall
become void and have no effect, without any liability on the part of any party
hereto or the Trustees, officers or shareholders of the Trust or the Trustees,
officers or shareholders of the Fund, in respect of this Agreement.
7. Waiver and Amendments. At any time prior to the Exchange Date, any
of the conditions set forth in Section 4 may be waived by the Board of the
Trust, and any of the conditions set forth in Section 5 may be waived by the
Board of the Fund, if, in the judgment of the waiving party, such waiver will
not have a material adverse effect on the benefits intended under this Agreement
to the shareholders of the Fund or the shareholders of the Successor Fund, as
the case may be. In addition, prior to the Exchange Date, any provision of this
Agreement may be amended or modified by the Boards of the Fund and the Trust if
such amendment or modification would not have a material adverse effect upon the
benefits intended under this Agreement and would be consistent with the best
interests of shareholders of the Fund and the Successor Fund.
8. No Survival of Representations. None of the representations and
warranties included or provided for herein shall survive consummation of the
transactions contemplated hereby.
9. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the Commonwealth of Pennsylvania, without giving
effect to principles of conflict of laws; provided, however, that the due
authorization, execution and delivery of this Agreement, in the case of the Fund
and the Trust, shall be governed and construed in accordance with the laws of
the Commonwealth of Massachusetts without giving effect to principles of
conflict of laws.
10. Capacity of Trustees, Etc.
(a) (i) The names "Liberty U.S. Government Money Market Trust"
and "Board of Trustees of Liberty U.S. Government Money Market Trust" refer,
respectively, to the trust created and the trustees, as trustees but not
individually or personally, acting from time to time under the Fund's
Declaration of Trust, which is hereby referred to and a copy of which is on file
at the office of the State Secretary of the Commonwealth of Massachusetts and at
the principal office of the Fund. The obligations of the Fund entered into in
the name or on behalf thereof by any of the trustees, representatives or agents
are made not individually, but in such capacities, and are not binding upon any
of the trustees, shareholders or representatives of the Fund personally, but
bind only the trust property, and all persons dealing with any portfolio of
shares of the Fund must look solely to the trust property belonging to such
portfolio for the enforcement of any claims against the Fund.
(ii) Both parties specifically acknowledge and agree
that any liability of the Fund under this Agreement,
or in connection with the transactions contemplated herein, shall be discharged
only out of the assets of the Fund and that no other portfolio of the Fund shall
be liable with respect thereto.
(b) (i) The names "Money Market Obligations Trust" and "Board
of Trustees of Money Market Obligations Trust" refer, respectively, to the trust
created and the trustees, as trustees but not individually or personally, acting
from time to time under the Trust's Declaration of Trust, which is hereby
referred to and a copy of which is on file at the office of the State Secretary
of the Commonwealth of Massachusetts and at the principal office of the Trust.
The obligations of the Trust entered into in the name or on behalf of the
Successor Fund by any of the trustees, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
trustees, shareholders or representatives of the Trust personally, but bind only
the Successor Fund's trust property, and all persons dealing with any portfolio
of shares of the Trust must look solely to the trust property belonging to such
portfolio for the enforcement of any claims against the Trust.
(ii) Both parties specifically acknowledge and agree
that any liability of the Trust under this Agreement,
or in connection with the transactions contemplated herein, shall be discharged
only out of the assets of the Successor Fund and that no other portfolio of the
Trust shall be liable with respect thereto.
11. Counterparts. This Agreement may be executed in counterparts, each
of which, when executed and delivered, shall be deemed to be an original.
IN WITNESS WHEREOF, the Fund and the Trust have caused this Agreement
and Plan of Reorganization to be executed as of the date above first written.
LIBERTY U.S. GOVERNMENT MONEY
MARKET TRUST
ATTEST:
Title: Assistant Secretary Title: Executive Vice President
MONEY MARKET OBLIGATIONS
TRUST, on behalf of its portfolio,
Liberty U.S. Government Money Market Trust
ATTEST:
Title: Assistant Secretary Title: Executive Vice President
<PAGE>
II-1
APPENDIX II
COMPARISON OF INVESTMENT POLICIES
AND LIMITATIONS
Set forth below is a comparison of the investment policies and
restrictions of the Trust and of the New Fund:
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Diversification
The Trust: The Trust is not subject to a fundamental investment policy regarding
diversification of its investments; however, the Trust is registered as a
diversified investment company under the 1940 Act.
The New Fund: "With respect to securities comprising 75% of the value of its
total assets, the Fund will not purchase securities of any one issuer (other
than cash; cash items; securities issued or guaranteed by the government of the
United States or its agencies or instrumentalities and repurchase agreements
collateralized by such U.S. government securities; and securities of other
investment companies) if, as a result, more than 5% of the value of its total
assets would be invested in securities of that issuer, or the Fund would own
more than 10% of the outstanding voting securities of that issuer."
Issuing Senior Securities and Borrowing Money
The Trust: "The Trust will not issue senior securities except as permitted by
its investment objective and policies. If a percentage limitation is adhered to
at the time of the investment, a later increase or decrease in percentage
resulting from any change in value or net assets will not result in a violation
of such restriction.
The Trust will not borrow money except as a temporary measure for
extraordinary or emergency purposes and then (a) only in amounts not in excess
of 5% of the value of its total assets or (b) in an amount up to one-third of
the value of its total assets, including the amount borrowed, in order to meet
redemption requests without immediately selling any portfolio instruments. If
the value of the Trust's total assets, including the amount borrowed, falls
below 300% of its borrowings the Trust will reduce its borrowings. This
borrowing provision is not for investment leverage but solely to facilitate
management of the portfolio by enabling the Trust to meet redemption requests
when the liquidation of portfolio securities is deemed to be inconvenient or
disadvantageous. Interest paid by the Trust on borrowed funds will not be
available for investment. While any such borrowings are outstanding, no
portfolio instruments may be purchased by the Trust."
The New Fund: "The Fund may borrow money, directly or indirectly, and issue
senior securities to the maximum extent permitted under the 1940 Act."
Selling Short and Buying on Margin
The Trust: "The Trust will not purchase any portfolio securities or sell
any portfolio instruments short but it may obtain such short-term credits as may
be necessary for clearance of purchases and sales of portfolio instruments."
The New Fund: The New Fund is not subject to an investment restriction regarding
selling securities short. The New Fund is subject to a non-fundamental
investment restriction relating to margin transactions that states: "The Fund
will not purchase securities on margin, provided that the Fund may obtain
short-term credits necessary for the clearance of purchases and sales of
securities."
Investments in Real Estate
The Trust: The Trust is not subject to a fundamental investment policy on
investing in real estate.
The New Fund: "The Fund may not purchase or sell real estate, provided that this
restriction does not prevent the Fund from investing in issuers which invest,
deal, or otherwise engage in transactions in real estate or interests therein,
or investing in securities that are secured by real estate or interests therein.
The Fund may exercise its rights under agreements relating to such securities,
including the right to enforce security interests and to hold real estate
acquired by reason of such enforcement until that real estate can be liquidated
in an orderly manner."
Investing in Commodities
The Trust: The Trust is not subject to an investment policy regarding
investing in commodities.
The New Fund: "The Fund may not purchase or sell physical commodities,
provided that the Fund may purchase securities of companies that deal in
commodities."
Pledging Assets
The Trust: "The Trust will not mortgage, pledge, or hypothecate assets of the
Trust except in connection with any borrowings described above, and in amounts
not in excess of the lesser of the dollar amount borrowed or 10% the value of
the Trust's assets at the time of such borrowings."
The New Fund: The New Fund is subject to a non-fundamental investment
restriction pertaining to pledging assets that provides: "The Fund will not
mortgage, pledge or hypothecate any of its assets, provided that this shall not
apply to the transfer of securities in connection with any permissible borrowing
or to collateral arrangements in connection with permissible activities."
Lending Cash or Securities
The Trust: "The Trust will not lend any such assets except portfolio securities.
(This shall not prevent the purchase or holding of bonds, debentures, notes,
certificates of indebtedness or other debt securities of an issuer, repurchase
agreements or other transactions which are permitted by the Trust's investment
objective and policies or Declaration of Trust.)"
The New Fund: "The Fund may not make loans, provided that this restriction does
not prevent the Fund from purchasing debt obligations, entering into repurchase
agreements, lending its assets to broker/dealers or institutional investors and
investing in loans, including assignments and participation interests."
Underwriting Securities
The Trust: The Trust is not subject to a fundamental investment policy on
underwriting securities.
The New Fund: "The Fund may not underwrite the securities of other issuers,
except that the Fund may engage in transactions involving the acquisition,
disposition or resale of its portfolio securities, under circumstances where it
may be considered to be an underwriter under the Securities Act of 1933."
Concentration of Investments
The Trust: The Trust is not subject to a fundamental investment policy
regarding concentration.
The New Fund: "The Fund will not make investments that will result in the
concentration of its investments in the securities of issuers primarily engaged
in the same industry. Government securities, municipal securities and bank
instruments are not deemed to constitute an industry."
NON-FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Permissible Investments
The Trust: "The Trust pursues its investment objective by investing
primarily in a portfolio of U.S. government securities maturing in 13 months or
less."
The New Fund: "The Fund pursues its investment objective by investing
primarily in a portfolio of U.S. government securities maturing in 397 days or
less."
Instruments of Banks and Savings Associations
The Trust: "The short-term investments of banks and savings associations
which the Trust can purchase will comprise no more than 20% of the Trust's total
assets."
The New Fund: The New Fund does not have a comparable limitation.
Investing in Illiquid Securities
The Trust: "The Trust will not invest more than 10% of the value of its net
assets in illiquid securities, including repurchase agreements, maturing in more
than seven days after notice."
The New Fund: "The Fund will not purchase securities for which there is no
readily available market, or enter into repurchase agreements or purchase time
deposits maturing in more than seven days, if immediately after and as a result,
the value of such securities would exceed, in the aggregate, 10% of the Fund's
net assets."
Investing in Restricted Securities
The Trust: "The Trust will not invest in securities subject to restrictions
on resale under federal securities law."
The New Fund: The New Fund is not subject to a comparable restriction.
Investing for Control
The Trust: "The Trust will not invest in securities of a company for the
purpose of exercising control or management."
The New Fund: The New Fund is not subject to a comparable restriction.
Investing in Options
The Trust: "The Trust will not invest in puts, calls, straddles, spreads,
or any combination of them."
The New Fund: The New Fund is not subject to a comparable restriction.
