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
TRUST FOR U.S. TREASURY OBLIGATIONS
(Name of Registrant as Specified In Its Charter)
(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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TRUST FOR U.S. TREASURY OBLIGATIONS
PROXY STATEMENT - PLEASE VOTE!
TIME IS OF THE ESSENCE...VOTING ONLY TAKES A FEW MINUTES AND YOUR
PARTICIPATION IS IMPORTANT! BE SURE TO COMPLETE AND RETURN YOUR PROXY CARD
PROMPTLY TO AVOID ADDITIONAL EXPENSE TO THE FUND.
Trust for U.S. Treasury Obligations will hold a special meeting of
shareholders on March 29, 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:
o the election of Trustees,
o ratification of independent auditors,
o changes to the Trust's fundamental investment policies,
o a proposed reorganization of Trust for U.S. Treasury Obligations
(the "Trust") into a newly created portfolio (the "New Trust") of
Money Market Obligations Trust, and
o an amendment to the Declaration of Trust that will be adopted by the
New Trust upon approval of the Reorganization.
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 auditor's 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 ARE THE TRUST'S "FUNDAMENTAL POLICIES" BEING CHANGED OR REMOVED?
Every mutual fund has certain investment policies that can be changed only
with the approval of its shareholders. These are referred to as "fundamental"
investment policies.
In some cases, these policies were adopted to reflect regulatory, business,
or industry conditions that no longer exist or no longer are necessary. In other
cases, advances in the securities markets and the economy have created different
procedures and techniques that affect the Trust's operations.
By reducing the number of "fundamental policies," the Trust may be able to
minimize the costs and delays associated with frequent shareholder meetings.
Also, the investment adviser's ability to manage the Trust's assets may be
enhanced and investment opportunities increased.
The proposed amendments will:
o reclassify as operating policies those fundamental policies that are not
required to be fundamental by the Investment Company Act of 1940, ("1940
Act");
o simplify and modernize the policies that are required to be "fundamental"
by the 1940 Act, as amended; and
o remove fundamental policies that are no longer required by the securities
laws of individual states.
Federated Research Corp., the Trust's adviser, is a conservative money
manager. Its highly trained professionals are dedicated to making investment
decisions in the best interest of the Trust and its shareholders. The Board
believes that the proposed changes can be applied responsibly by the Trust's
adviser.
WHY ARE SOME "FUNDAMENTAL POLICIES" BEING RECLASSIFIED AS "OPERATING POLICIES?"
As noted above, some "fundamental policies" have been redefined as
"operating policies" by changes made to the 1940 Act. Operating policies do not
require shareholder approval to be changed. This gives the Trust's Board
additional flexibility to determine whether to participate in new investment
opportunities and to meet industry changes promptly.
WHY ARE THE TRUSTEES RECOMMENDING AN AMENDMENT TO THE DECLARATION OF TRUST?
The Declaration organizing the Trust was prepared almost twenty years ago.
Since then, developments in the investment company industry and changes in the
law resulted in many improvements. The Board is recommending a change to the
Declaration of Trust that permits the Trust to benefit from these developments.
WHY IS THE REORGANIZATION BEING PROPOSED?
Trust for U.S. Treasury Obligations' 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 annual meeting of shareholders or simply sign
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 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.
TRUST FOR U.S. TREASURY OBLIGATIONS
NOTICE OF SPECIAL MEETING
IN LIEU OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 29, 1999
A Special Meeting in lieu of Annual Meeting of the shareholders of Trust
for U.S. Treasury Obligations (the "Trust") will be held at 5800 Corporate
Drive, Pittsburgh, Pennsylvania 15237-7000, at 12:00 Noon (Eastern time), on
March 29, 1999 to consider proposals:
(1) To elect seven Trustees.
(2) To ratify the selection of independent auditors.
(3) To make changes to the Trust's fundamental investment policies:
(a) To make non-fundamental, and to amend, the Trust's fundamental
investment policy regarding maturity of money market instruments;
(b) To amend the Trust's fundamental investment policy regarding
borrowing to permit the purchase of securities while borrowings
are outstanding; and
(c) To amend the Trust's fundamental investment policy regarding
pledging securities to permit the Trust to pledge assets to
secure permitted borrowings.
(4) To eliminate the Trust's fundamental investment policy regarding the
average maturity of securities in the Trust's portfolio.
(5) To approve a clarifying amendment to the Trust's Investment Advisory
Agreement to exclude Rule 12b-1 fees and shareholder service fees from
the expense cap.
(6) To approve an amendment and restatement to the Trust's Declaration of
Trust to require the approval of a "1940 Act" majority of the
shareholders in the event of the sale and conveyance of the assets of
the Trust to another trust or corporation.
(7) To approve a proposed Agreement and Plan of Reorganization between the
Trust and Money Market Obligations Trust, on behalf of its series,
Trust for U.S. Treasury Obligations (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 January 21, 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
February 2, 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 SEVEN TRUSTEES................................................
ABOUT THE ELECTION OF TRUSTEES ...........................................
TRUSTEES STANDING FOR ELECTION............................................
NOMINEES NOT PRESENTLY SERVING AS TRUSTEES................................
RATIFICATION OF THE SELECTION OF THE INDEPENDENT AUDITORS.................
APPROVAL OF CHANGES TO THE TRUST'S FUNDAMENTAL INVESTMENT
POLICIES..............................................................
APPROVAL OF THE ELIMINATION OF A FUNDAMENTAL INVESTMENT POLICY
OF THE TRUST..........................................................
APPROVAL OF A CLARIFYING AMENDMENT TO THE TRUST'S INVESTMENT
ADVISORY AGREEMENT TO EXCLUDE CERTAIN FEES FROM THE EXPENSE CAP.......
APPROVAL OF AN AMENDMENT AND RESTATEMENT TO THE TRUST'S
DECLARATION OF TRUST..................................................
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.........................
<PAGE>
PRELIMINARY
PROXY STATEMENT
TRUST FOR U.S. TREASURY OBLIGATIONS
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
March 29, 1999, at 5800 Corporate Drive, Pittsburgh, Pennsylvania 15237-7000, at
12:00 Noon (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 will 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.
At its meeting on November 17, 1998, the Board reviewed both the proposed
Amended and Restated Declaration of Trust and the changes recommended in the
investment policies of the Trust and approved them subject to shareholder
approval. At that meeting, the Board also considered the clarifying amendment to
the Trust's Investment Advisory Agreement and the proposed reorganization of the
Trust, and approved them, subject to shareholder approval. The purposes of the
Meeting are set forth in the accompanying Notice. The Trustees know of no
business other than that mentioned in the Notice that will be presented for
consideration at the Meeting. Should other business properly be brought before
the Meeting, proxies will be voted in accordance with the best judgment of the
persons named as proxies. This proxy statement and the enclosed proxy card are
expected to be mailed on or about February 2, 1999, to shareholders of record at
the close of business on January 21, 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 September 30, 1998, was 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 SEVEN TRUSTEES
The persons named as proxies intend to vote in favor of the election of
Thomas G. Bigley, John T. Conroy, Jr., John F. Cunningham, Peter E. Madden,
Charles F. Mansfield, Jr., John E. Murray, Jr. and John S. Walsh (collectively,
the "Nominees") as Trustees of the Trust. Messrs. Bigley, Conroy, Madden and
Murray are presently serving as Trustees. If elected by shareholders, Messrs.
Cunningham, Mansfield and Walsh are expected to assume their responsibilities as
Trustees effective April 1, 1999. Please see "About the Election of Trustees"
below for current information about the Nominees.
Messrs. Conroy and Madden were appointed Trustees on November 13, 1991, to
fill vacancies created by the resignation of Mr. Joseph Maloney and the decision
to expand the size of the Board. Messrs. Bigley and Murray were appointed
Trustees on November 15, 1994 and February 14, 1995, respectively, also to fill
vacancies resulting from the decision to expand the size of the Board. Messrs.
Cunningham, Mansfield and Walsh are being proposed for election as Trustees to
fill vacancies anticipated to result from the resignation of three current
Trustees. The anticipated resignations will not occur if Messrs. Cunningham,
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 seven 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
Chairman of the Board, Children's Hospital of Pittsburgh; formerly, Senior
Partner, Ernst & Young LLP; Director, MED 3000 Group, Inc.; Director, Member of
Executive Committee, University of Pittsburgh; Director or Trustee of the Funds.
JOHN T. CONROY, JR.
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL
Birthdate: June 23, 1937
Trustee
President, Investment Properties Corporation; Senior Vice-President, John
R. Wood and Associates, Inc., Realtors; Partner or Trustee in private real
estate ventures in Southwest Florida; formerly, President, Naples Property
Management, Inc. and Northgate Village Development Corporation; Director or
Trustee of the Funds.
PETER E. MADDEN
One Royal Palm Way
100 Royal Palm Way
Palm Beach, FL
Birthdate: March 16, 1942
Trustee
Consultant; Former State Representative, Commonwealth of Massachusetts;
formerly, President, State Street Bank and Trust Company and State Street Boston
Corporation;
Director or Trustee of the Funds.
JOHN E. MURRAY, JR., J.D., S.J.D.
President, Duquesne University
Pittsburgh, PA
Birthdate: December 20, 1932
Trustee
President, Law Professor, Duquesne University; Consulting Partner, Mollica
& Murray; Director or Trustee of the Funds.
NOMINEES NOT PRESENTLY SERVING AS TRUSTEES
JOHN F. CUNNINGHAM
353 El Brillo Way
Palm Beach, FL
Birthdate: March 5, 1943
Chairman, President and Chief Executive Officer, Cunningham & Co., Inc.
(consulting organization to high technology and computer companies in the
financial community); Director, EMC Corporation.
CHARLES F. MANSFIELD, JR.
54 Pine Street
Garden City, NY
Birthdate: April 10, 1945
Management consultant.
JOHN S. WALSH
2007 Sherwood Drive
Valparaiso, IN
Birthdate: November 28, 1957
President, Heat Wagon, Inc., Manufacturers Products, Inc. ("MPI") and the
Portable Heater Parts division of MPI (engineering, manufacturing and
distribution of portable, temporary heating equipment) (1996-present); Director,
Walsh & Kelly, Inc., asphalt road construction business; formerly, Vice
President, Walsh & Kelly, Inc. (1984-1996).
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 Trustees 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 November
17, 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 THE INDEPENDENT AUDITORS
PROPOSAL #3: APPROVAL OF CHANGES TO THE TRUST'S
FUNDAMENTAL INVESTMENT POLICIES
The 1940 Act requires investment companies such as the Trust to adopt
certain specific investment policies that can be changed only by shareholder
vote. An investment company may also elect to designate other policies that may
be changed only by shareholder vote. Both types of policies are often referred
to as "fundamental policies." Certain of the Trust's fundamental policies had
been adopted in the past to reflect regulatory, business or industry conditions
that are no longer in effect. Accordingly, the Trustees have authorized the
submission to the Trust's shareholders for their approval, and recommended that
shareholders approve, the removal, amendment and/or reclassification of certain
of the Trust's fundamental policies.
The proposed amendments would:
(i) simplify and modernize the fundamental policies that are required to
be stated under the 1940 Act; and
(ii) reclassify as operating policies those fundamental policies that are
not required to be fundamental under the 1940 Act.
By reducing to a minimum those policies that can be changed only by
shareholder vote, the Trustees believe that the Trust would be able to minimize
the costs and delay associated with holding future shareholder meetings to
revise fundamental policies that become outdated or inappropriate. The Trustees
also believe that the investment adviser's ability to manage the Trust's assets
in a changing investment environment will be enhanced and that investment
management opportunities will be increased by these changes. The recommended
changes are specified below. Each sub-item will be voted on separately, and the
approval of any sub-item will require the approval of a majority of the
outstanding voting shares of the Trust as defined in the 1940 Act. (See
"PROXIES, QUORUM AND VOTING AT THE MEETING" below.)
PROPOSAL #3(A): TO MAKE NON-FUNDAMENTAL AND TO AMEND THE TRUST'S
FUNDAMENTAL POLICY REGARDING MATURITY OF MONEY MARKET INSTRUMENTS
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 the maximum maturity period
provisions of Rule 2a-7 under the 1940 Act, which was adopted by the U.S.
Securities and Exchange Commission (the "SEC" or the "Commission") to govern the
operations of money market funds. The purpose of this provision of Rule 2a-7 is
to limit the Trust's exposure to interest rate and credit risks associated with
long maturity periods. Money market funds that use amortized cost pricing, to
attempt to maintain a $1.00 net asset value, such as the Trust, must comply with
Rule 2a-7.
Amendments to Rule 2a-7, adopted by the Commission after the Trust adopted
its policy, extended the maximum maturity period for any portfolio security from
one year (365 days) to thirteen months (397 days). The Commission adopted the
change 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 Trust has made a commitment to purchase them. Since the
Trust "books" the securities on the day the Trust agrees to purchase the
securities, the maturity period begins on that day.
The Board is recommending to shareholders that the Trust's investment
policy be made non-fundamental. The Trust's new policy would mirror the language
of Rule 2a-7, and extend the maximum maturity period of any portfolio security
from one year (365 days) to thirteen months (397 days). The Trustees believe
that this will benefit the Trust and is in the best interests of shareholders.
In approving the proposed change, the Trustees evaluated: (i) compliance with
Rule 2a-7, as amended; (ii) the positive effect on the Trust's ability to enter
into when-issued and delayed delivery transactions and to purchase annual tender
bonds; and (iii) the benefits of enhancing the Trust's yield versus the
potential of increasing the Trust's exposure to both credit risk and interest
rate risk. This change will in no way affect the Trust's operating policy with
respect to the portfolio's average maturity, which, on a dollar-weighted basis,
is ninety (90) days or less.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #3(B): TO AMEND THE TRUST'S FUNDAMENTAL INVESTMENT POLICY
REGARDING BORROWING TO PERMIT THE PURCHASE OF
SECURITIES WHILE BORROWINGS ARE OUTSTANDING
The Trust's current fundamental investment policy on borrowing states that:
"The Trust will not borrow money except as a temporary measure for
extraordinary or emergency purposes and then only in amounts not in excess
of 5% of the value of its total assets or 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 portfolio instruments
(any such borrowings under this section will not be collateralized). This
borrowing provision is not for investment leverage but solely to facilitate
management of the portfolio by enabling the Trust to meet redemption
requests where liquidation of portfolio instruments 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."
Management has recommended that the Trustees consider approving a revision
to the fundamental policy that would permit the Trust to purchase securities
while its borrowings are outstanding, as the Trust's investment adviser believes
that the current policy unnecessarily limits the Trust's investments. If
approved by shareholders, the sentence "While any such borrowings are
outstanding, no portfolio instruments may be purchased by the Trust" will be
deleted. The Trust would continue to be subject to the same percentage
limitation on its borrowings --5% of the value of the Trust's total assets -- if
the proposed change is approved.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #3(C): TO AMEND THE TRUST'S FUNDAMENTAL INVESTMENT
POLICY REGARDING PLEDGING SECURITIES TO PERMIT THE TRUST
TO PLEDGE ASSETS TO SECURE PERMITTED BORROWINGS
The Trust's current fundamental investment policy regarding pledging assets
states that "[T]he Trust will not pledge portfolio instruments," and the Trust's
current fundamental investment policy regarding borrowing states that:
"The Trust will not borrow money except as a temporary measure for
extraordinary or emergency purposes and then only in amounts not in excess of 5%
of the value of its total assets or 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 securities (any such
borrowings would not be collateralized)."
In practical effect, these policies operate to prevent the Trust from
engaging in certain borrowing transactions, where industry practice is for a
borrower, such as a mutual fund, to pledge assets as security for the fund's
borrowings from a lender. In order to afford the Trust's investment adviser with
maximum flexibility in managing the Trust's assets and portfolio, the Trustees
propose to amend the Trust's fundamental investment policy on pledging
securities to allow the Trust to engage in borrowing transactions in the same
manner as other investment companies, and in accordance with the provisions of
the 1940 Act and the SEC's regulatory requirements.
Upon approval of the Trust's shareholders, the Trust's fundamental
investment policy governing the pledging of assets will be amended to read as
follows:
"The Trust will not mortgage, pledge or hypothecate assets except as
necessary to secure permitted borrowings. In those cases, it may pledge assets
having a market value not exceeding the lesser of the dollar amounts borrowed or
10% of the value of the total assets at the time of the pledge."
If approved by shareholders, the Trust would continue to be subject to the
same percentage limitation on its borrowings - 5% of the value of the Trust's
total assets.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #4: REMOVAL OF THE TRUST'S FUNDAMENTAL INVESTMENT POLICY REGARDING
THE AVERAGE MATURITY OF SECURITIES IN THE TRUST'S PORTFOLIO
The Trust is presently subject to a fundamental investment policy that
provides:
"The average maturity of the securities in the Trust's portfolio, computed
on a dollar-weighted basis, will be 120 days or less. As a matter of
operating policy, which can be changed without shareholder approval, the
Trust will limit the average maturity of its portfolio to 90 days or less,
in order to meet regulatory requirements."
As a consequence of the recommendation of the Trust's investment adviser,
the Board has proposed the elimination of the fundamental investment policy
described in the first sentence above. Amendments to Rule 2a-7 adopted by the
SEC after the Trust adopted its investment policy have reduced the average
maturity requirement applicable to a money market fund's portfolio to 90 days,
in order to reduce a money market fund's exposure to interest rate and credit
risks associated with longer maturity periods. As a result, the Trust's current
fundamental investment policy, as it relates to maintaining an average
dollar-weighted portfolio maturity of 120 days, is obsolete and no longer
consistent with the provisions of Rule 2a-7 as it is presently in effect.
The Trust has previously adopted a non-fundamental operating policy, quoted
above, that mirrors the provisions of Rule 2a-7. As an operating policy, this
allows the Trust's investment adviser to modify the policy, if necessary in the
future, in the event that the SEC again revises the requirements under Rule
2a-7, without the expense of having to hold a shareholder meeting. It should be
noted that Rule 2a-7 does not require a money market fund, such as the Trust, to
adopt a fundamental investment policy regarding average portfolio maturity, but
that the SEC requires that a fund operate in accordance with Rule 2a-7
requirements, as the Trust does.
The approval of the elimination of the fundamental investment will require
the affirmative vote of a majority of the outstanding voting shares of the Trust
as defined in the 1940 Act. (See "PROXIES, QUORUM AND VOTING AT THE MEETING"
below.)
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #5: TO APPROVE A CLARIFYING AMENDMENT TO THE TRUST'S INVESTMENT
ADVISORY AGREEMENT TO EXCLUDE RULE 12B-1 FEES AND SHAREHOLDER SERVICE FEES
FROM THE EXPENSE CAP
The Trust obtains its investment advisory services from Federated Research
(the "Adviser"), pursuant to an investment advisory agreement dated
____________, 19__ (the "Advisory Agreement"). At a meeting held on
____________, 1998, the Advisory Agreement was continued by the Board of
Trustees of the Trust for one year ending _______, 1999. Under the Advisory
Agreement, the Trust pays the Adviser an annual fee of 0.40% of the average
daily net assets of the Trust.
The Advisory Agreement provides that the Adviser will reimburse the Trust,
up to the gross amount of the advisory fee, the amount, if any, by which the
aggregate normal operating expenses of the Trust exceed 0.45% of the average
daily net assets of the Trust during the period. The Advisory Agreement excludes
from the expense limitation provision a variety of expenditures, including
interest, taxes, brokerage commissions, federal and state registration fees,
expenses of withholding taxes, and extraordinary expenses. The expense
obligation also does not include expenses incurred by shareholders utilizing the
transfer agent's subaccounting facilities.
The current Advisory Agreement, including the foregoing expense limitation
provisions, is substantially identical to that contained in the original
investment advisory contract established at the time of the Trust's creation in
1979. At such time, it was not customary for a mutual fund to use its own assets
specifically to finance distribution or shareholder servicing and neither the
Trust nor the Adviser considered the term "normal operating expenses" to include
such costs. When the original investment advisory contract was replaced by
successive agreements required because of the automatic termination of the
predecessor agreements, neither the Trust nor the Adviser deemed it necessary to
revise the language of the foregoing expense limitation to clarify that such
provision did not include expenses incurred pursuant to a Rule 12b-1 or
shareholder servicing plan.
In intervening years, however, the use of Rule 12b-1 and shareholder
servicing plans has become commonplace throughout the mutual fund industry and
the Adviser and the Board of Trustees of the Trust have determined that it would
be in the best interests of the Trust and its shareholders to clarify that such
expense limitation provision does not apply to expenses arising under a Rule
12b-1 or shareholder servicing plan and have directed that such amendments be
submitted to shareholders for ratification and approval.
If approved by shareholders, the above-described clarifying amendment will
have no impact on expenses currently borne by the Trust. The Adviser has
undertaken, and the Board of Trustees has agreed, not to implement any Rule
12b-1 or shareholder servicing plan that would increase expenses borne
indirectly by current shareholders without the further approval of shareholders.
The principal effect of the clarifying amendment, therefore, is to eliminate any
uncertainty concerning the Trust's ability, without further shareholder
approval, to implement Rule 12b-1 and/or shareholder servicing plans for
newly-established portfolios or classes of shares.
The approval of the amendment to the Advisory Agreement will require the
affirmative vote of a majority of the outstanding voting securities of the Trust
as defined in the 1940 Act. (See "PROXIES, QUORUM AND VOTING AT THE MEETING"
below.)
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #6: TO APPROVE AN AMENDMENT AND RESTATEMENT TO THE TRUST'S
DECLARATION OF TRUST TO REQUIRE THE APPROVAL OF A "1940 ACT" MAJORITY OF THE
SHAREHOLDERS IN THE EVENT OF THE SALE AND CONVEYANCE OF THE ASSETS OF THE TRUST
TO ANOTHER TRUST OR CORPORATION
Mutual funds, such as the Trust, are required to organize under the laws of
a state and to create and be bound by organizational documents outlining how
they will operate. In the case of the Trust, these organizational documents are
the Declaration of Trust and the By-Laws. Since the adoption of the Trust's
current Declaration of Trust, the market for mutual funds has evolved, requiring
mutual funds to be more flexible in their operation so that they may respond
quickly to changes in the market. A specific item in the current Declaration of
Trust prohibits the Trust from responding quickly and favorably to changing
markets without going to the expense and delay of holding a shareholder meeting.
Accordingly, the Trustees have approved, and have authorized the submission
to the Trust's shareholders for their approval, an amendment to the Trust's
Declaration of Trust, described below. The approval of the amendment will
require the affirmative vote of a majority of the outstanding voting securities
of the Trust as defined in the Declaration of Trust. (See "PROXIES, QUORUM AND
VOTING AT THE MEETING" below.) If the Reorganization recommended in proposal #7
is approved and completed, the Trust will become a series of MMOT, which will
have the authority requested here.
Article XII, Section 4(b) of the Declaration of Trust currently requires
the approval of the holders of at least two-thirds of all of the outstanding
shares of the Trust to approve any sale and conveyance of the assets of the
Trust to another open-end management investment company. To reduce the
likelihood of greater expenses in a proposed solicitation for the approval of
any sale and conveyance (including a proposal in this Proxy Statement), the
Trustees have adopted an amendment that would permit a majority vote to approve
such a transaction. A majority vote means the affirmative vote of: (a) 67% or
more of the voting securities present at the meeting if the holders of more than
50% of the outstanding voting securities are present or represented by proxy; or
(b) more than 50% of the outstanding voting securities, whichever is less. The
amendment would provide the Trust with greater flexibility, and in the event
circumstances warrant the approval of the Board, the Trustees could determine
that a sale and conveyance of assets would be in the best interest of the Trust.
The Trustees are recommending that shareholders approve the adoption of this
proposed amendment to the Declaration of Trust.
Proposal #7 on the agenda of the Meeting is a recommendation by the Board
that the shareholders of the Trust approve a proposed Reorganization of the
Trust with and into an affiliated open-end management investment company. If
this proposal #6 is approved by the shareholders at the Meeting, it will become
effective immediately, and will be deemed to govern the approval of proposal #7.
If approved by shareholders, Article XII, Section 4(b) of the
Declaration of Trust would be amended to read as follows:
"(b) The Trustees, with the approval of a Majority Shareholder Vote,
may by unanimous action sell and convey the assets of the Trust, or a
class or series of the Trust, to another trust or corporation
organized under the laws of any state of the United States, which is a
diversified open-end management investment company as defined in the
1940 Act, for an adequate consideration which may include the
assumption of all outstanding obligations, taxes and other
liabilities, accrued or contingent, of the Trust, or a class or series
of the Trust, and which may include shares of beneficial interest or
stock of such trust or corporation. Upon making provision for the
payment of all such liabilities, by such assumption or otherwise, the
Trustees shall distribute the remaining proceeds ratably among the
holders of the Shares of the Trust, or a class or series of the Trust,
then outstanding. For the purposes of this provision, a "Majority
Shareholder Vote" means the affirmative vote of the lesser of: (a)
more than 50% of the outstanding voting securities entitled to vote
upon the matter, or (b) 67% or more of the voting securities present
at the meeting if the holders of 50% or more of the outstanding voting
securities entitled to vote on the matter are present at the meeting
in person or by proxy."
In the event that the amendment to Article XII, Section 4(b) is not
approved by shareholders, this section of the Declaration of Trust will remain
as it currently exists, and the Board of Trustees will consider what action, if
any, should be taken. The approval of proposal #7 will then require the
affirmative vote of two-thirds of the shares of the Trust entitled to be voted
upon that matter.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #7: 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, Trust for
U.S. Treasury Obligations (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, whose 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 13 months 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 has an identical
investment objective. Subject to shareholder approval of proposal #3(a), 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.) An investment in the Trust or the New Fund is 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 the shareholders of the Trust and 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 April 23, 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 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 upon the benefits intended
under the Reorganization Agreement and it would be consistent with the best
interests of 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 to the Trust and the New
Fund, the identical investment objectives and 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 November 17, 1998,
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
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 November 17, 1998, 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 two-thirds of
the outstanding voting securities of the Trust. If proposal #6 is approved, that
amendment to the Declaration of Trust will become effective immediately, and
this proposal #7 to approve the Reorganization will require the affirmative vote
of a majority of the outstanding voting shares of the Trust as defined under the
Declaration of 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 investment policies of the New Fund have been established to mirror the
present policies and restrictions of the Trust. If the Reorganization is
approved by shareholders of the Trust, prior to the issuance of any shares of
the New Fund, and in accordance with the governing instruments of the New Fund,
the Trustees of the New Fund will make changes to the policies and restrictions
of the New Fund that parallel any changes approved by the shareholders at the
Meeting. As a result, at the effective time of the Reorganization, the
investment policies and restrictions of the Trust and the New Fund will be
identical.
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. Under both the Investment
Company Act of 1940 and the Declaration of Trust, the favorable vote of a
"majority of the outstanding voting shares" of the Trust means: (a) the holders
of 67% or more of the outstanding voting securities present at the Meeting, if
the holders of 50% or more of the outstanding voting securities of the Trust are
present or represented by proxy; or (b) the vote of the holders of more than 50%
of the outstanding voting securities, whichever is less.
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 that 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 an adjournment those proxies that they are required to vote against
the proposal, and will vote in FAVOR of such an adjournment all other proxies
that 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 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 persons owned,
to the knowledge of management, more than 5% of the outstanding shares of the
Trust: [INSERT 5% HOLDERS]
<TABLE>
<CAPTION>
TRUSTEE COMPENSATION
NAME, AGGREGATE COMPENSATION TOTAL COMPENSATION PAID
POSITION WITH TRUST FROM TRUST*# FROM FUND COMPLEX+
<S> <C> <C>
- ---------------------------- ----------------------- --------------------------------------------
John F. Donahue $0 $-0- for the Trust and
Chairman and Trustee 56 other investment companies in the Fund
Complex
Thomas G. Bigley $___
Trustee $______ for the Trust and
56 other investment companies in the Fund
John T. Conroy, Jr. $___ Complex
Trustee
$______ for the Trust and
William J. Copeland $___ 56 other investment companies in the Fund
Trustee Complex
James E. Dowd $___ $______ for the Trust and
Trustee 56 other investment companies in the Fund
Complex
Lawrence D. Ellis, M.D. $___
Trustee $______ for the Trust and
56 other investment companies in the Fund
Edward L. Flaherty, Jr. $___ Complex
Trustee
$______ for the Trust and
Peter E. Madden $___ 56 other investment companies in the Fund
Trustee Complex
John E. Murray, Jr. $___ $______ for the Trust and
Trustee 56 other investment companies in the Fund
Complex
Wesley W. Posvar $___
Trustee $______ for the Trust and
56 other investment companies in the Fund
Marjorie P. Smuts $___ Complex
Trustee
$______ for the Trust and
56 other investment companies in the Fund
Complex
$______ for the Trust and
56 other investment companies in the Fund
Complex
$______ for the Trust and
56 other investment companies in the Fund
Complex
</TABLE>
* Information is furnished for the fiscal year ended September 30, 1998.
# The aggregate compensation is provided for the Trust which is comprised
of one portfolio.
+The information is provided for the last calendar year.
During the fiscal year ended September 30, 1998, 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.
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.
Messrs. Flaherty, Conroy, Copeland, and Dowd serve on the Audit Committee.
These Trustees are not interested Trustees of the Trust. During the fiscal year
ended September 30, 1998, 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.
Glen R. Johnson
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 2, 1929
President
Trustee, Federated Investors; President and/or Trustee of some of the
Funds; staff member, Federated Securities Corp.
J. Christopher Donahue
Federated Investors Tower
Pittsburgh, PA
Birthdate: April 11, 1949
Executive Vice President
President and Trustee, Federated Investors, 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 and Federated Shareholder
Services; Director, Federated Services Company; President or Executive Vice
President of the Funds; Director or Trustee of some of the Funds. Mr. Donahue is
the son of John F. Donahue, Chairman and Trustee of the Trust.
Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
Executive Vice President
Vice Chairman, Treasurer, and Trustee, Federated Investors; 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; Trustee or Director of some of the Funds;
President, Executive Vice President and Treasurer of some of the Funds.
John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 26, 1938
Executive Vice President, Secretary and Treasurer
Executive Vice President, Secretary, and Trustee, Federated Investors;
Trustee, Federated Advisers, Federated Management, and Federated Research;
Director, Federated Research Corp. and Federated Global Research Corp.; Trustee,
Federated Shareholder Services Company; Director, Federated Services Company;
President and Trustee, Federated Shareholder Services; Director, Federated
Securities Corp.; Executive Vice President and Secretary of the Funds; Treasurer
of some of the Funds.
Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 17, 1923
Vice President
Executive Vice President and Trustee, Federated Investors; Chairman and
Director, Federated Securities Corp.; President or Vice President of some of the
Funds; Director or Trustee of some of the Funds.
None of the Trustees of the Trust received salaries from the Trust during
the fiscal year ended September 30, 1998.
Federated Securities Corp., a subsidiary of Federated Investors, Inc., is
the principal distributor of the Trust's shares. Federated Securities Corp.
receives no compensation from the Trust for its services.
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 Trust for U.S. Treasury
Obligations, 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
February 2, 1999
<PAGE>
TRUST FOR U.S. TREASURY OBLIGATIONS
INVESTMENT ADVISER
FEDERATED RESEARCH
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
Trust for U.S. Treasury Obligations (the "Trust") hereby appoint Patricia F.
Conner, Gail Cagney, 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 March 29,
1999, at 5800 Corporate Drive, Pittsburgh, Pennsylvania, at 12:00 Noon, 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 TRUST FOR
U.S. TREASURY OBLIGATIONS. 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, JOHN T. CONROY, JR., JOHN F.
CUNNINGHAM, PETER E. MADDEN, CHARLES F. MANSFIELD, JR., JOHN E. MURRAY, JR. AND
JOHN S. WALSH AS TRUSTEES OF THE TRUST
FOR [ ]
AGAINST [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR" a particular nominee, mark
the "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 MAKE CHANGES TO THE TRUST'S FUNDAMENTAL INVESTMENT POLICIES:
3(A) TO APPROVE MAKING NON-FUNDAMENTAL, AND AMENDING, THE
TRUST'S FUNDAMENTAL INVESTMENT POLICY REGARDING MATURITY OF
MONEY MARKET INSTRUMENTS
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3(B) TO APPROVE A REVISION IN THE TRUST'S FUNDAMENTAL INVESTMENT POLICY
REGARDING BORROWING TO PERMIT THE PURCHASE OF SECURITIES WHILE
BORROWINGS ARE OUTSTANDING
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3(C) TO AMEND THE TRUST'S FUNDAMENTAL INVESTMENT POLICY REGARDING PLEDGING
SECURITIES TO PERMIT THE TRUST TO PLEDGE ASSETS TO SECURE PERMITTED
BORROWINGS
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 4 TO ELIMINATE THE TRUST'S FUNDAMENTAL INVESTMENT POLICY REGARDING
THE AVERAGE MATURITY OF SECURITIES IN THE TRUST'S PORTFOLIO
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 5 TO APPROVE A CLARIFYING AMENDMENT TO THE TRUST'S INVESTMENT
ADVISORY AGREEMENT TO EXCLUDE RULE 12B-1 FEES AND SHAREHOLDER
SERVICE FEES FROM THE EXPENSE CAP
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 6 TO APPROVE AN AMENDMENT AND RESTATEMENT TO THE TRUST'S
DECLARATION OF TRUST TO REQUIRE THE APPROVAL BY A "1940 ACT"
MAJORITY OF SHAREHOLDERS IN THE EVENT OF
THE SALE OR CONVEYANCE OF THE ASSETS OF THE TRUST TO ANOTHER
TRUST OR CORPORATION
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 7 TO APPROVE A PROPOSED AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN THE TRUST AND MONEY MARKET OBLIGATIONS TRUST, ON BEHALF OF ITS
SERIES, TRUST FOR U.S. TREASURY OBLIGATIONS (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
mark with an X in the box.
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 1-800-890-8903
OR THROUGH THE INTERNET AT WWW.PROXYVOTE.COM.
<PAGE>
APPENDIX I
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated as of January __, 1999 (the
"Agreement") between Trust for U.S. Treasury Obligations, 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 Trust for
U.S. Treasury Obligations (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 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 March __, 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.
5. 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.
6. 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.
7. 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.
8. 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.
9. NO SURVIVAL OF REPRESENTATIONS. None of the representations and
warranties included or provided for herein shall survive consummation of the
transactions contemplated hereby.
10. 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.
11. CAPACITY OF TRUSTEES, ETC.
(a) (i) The names "Trust for U.S. Treasury Obligations" and "Board of
Trustees of Trust for U.S. Treasury Obligations" 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.
12. 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.
TRUST FOR U.S. TREASURY OBLIGATIONS
ATTEST: _________________________ ______________________________
Title:
MONEY MARKET OBLIGATIONS
TRUST, on behalf of its portfolio,
Trust for U.S. Treasury Obligations
ATTEST: _________________________ ______________________________
Title:
