SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
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THE KAUFMANN FUND, INC.
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FREQUENTLY ASKED QUESTIONS
OCTOBER 20, 2000
o WHY IS KAUFMANN DOING THIS DEAL?
Hans and Larry were looking to partner with a family of funds like
Federated, which has strong intermediary distribution. In doing so, they
are better positioned to focus their resources and energies on continuing
the strong performance that Kaufmann Fund shareholders have enjoyed.
o HOW WILL EXISTING KAUFMANN SHAREHOLDERS BE AFFECTED BY THE PROPOSED
ACQUISITION?
Federated will make every effort to make the reorganization a seamless
transaction for the shareholders. Hans and Larry run the fund, their team
remains in place and we're confident that strong history of performance
will continue. That means little changes.
o HOW WILL THE SHARES CONVERT?
Each shareholder's financial interest and number of shares will remain the
same at the moment of conversion.
o WILL SHAREHOLDERS INCUR ANY TAX IMPLICATIONS AS A RESULT OF THE
REORGANIZATION?
This will be a tax-free event for the Fund shareholders. Shareholders will
not have to pay capital gains or take capital losses on Kaufmann shares due
to this reorganization unless the shareholder liquidates. Each
shareholder's cost basis will also remain the same. Shareholders will, of
course, be responsible for the tax obligation of the dividends and capital
gain distributions they will receive. Of course, the tax status of any and
all retirement accounts will not be affected at all.
o WHEN DO YOU EXPECT THE SHAREHOLDER VOTE ON APPROVAL OF THE REORGANIZATION
TO TAKE PLACE?
Sometime in the first quarter of 2001.
o WHERE CAN I FIND MORE INFORMATION ON FEDERATED INVESTORS?
Federated Investors web site: http://www.federatedinvestors.com.
