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
MONEY MARKET TRUST
(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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MONEY MARKET TRUST
PROXY STATEMENT - PLEASE VOTE!
TIME IS OF THE ESSENCE... VOTING ONLY TAKES A FEW MINUTES AND YOUR
PARTICIPATION IS IMPORTANT! ACT NOW TO HELP THE TRUST AVOID ADDITIONAL EXPENSE.
Money Market Trust (the "Trust") will hold a special meeting of shareholders on
November 17, 1999. It is important for you to vote on the issues described in
this Proxy Statement. We recommend that you read the Proxy Statement in its
entirety; the explanations will help you to decide on the issues.
Following is an introduction to the proposals and the process.
WHY AM I BEING ASKED TO VOTE?
Mutual funds are required to obtain shareholders' votes for certain types
of changes, like those included in this Proxy Statement. You have a right to
vote on these changes.
WHAT ISSUES AM I BEING ASKED TO VOTE ON?
The proposals include the election of Trustees; certain amendments to and a
restatement of the Trust's Declaration of Trust; a clarifying amendment to the
investment advisory agreement; and a proposed reorganization of the Trust into a
newly created portfolio of Money Market Obligations Trust ("MMOT").
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 IS THE REORGANIZATION BEING PROPOSED?
The Trust's Board of Trustees and investment adviser believe that the Trust's
management structure can be simplified by reorganizing as a portfolio of 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?
* The shares you own and the value of your investment will not change.
* The Reorganization will be a tax-free event.
* There will not be sales loads, commissions, or transaction charges with the
Reorganization.
* The investment objective will remain the same.
* There will be no increases in the fees payable to the Trust's adviser
because of the Reorganization.
WHY ARE THE TRUSTEES RECOMMENDING AMENDMENTS TO THE DECLARATION OF TRUST?
The Declaration of Trust organizing the Trust was prepared many years ago. Since
then, developments in the investment company industry and changes in the law
have resulted in many improvements. The Board is recommending changes to the
Declaration of Trust that permit the Trust to benefit from these developments.
HOW DO I VOTE MY SHARES?
You may vote in person at the special meeting of shareholders or complete and
return the enclosed Proxy Card. IF YOU SIGN AND RETURN THE PROXY CARD WITHOUT
INDICATING A PREFERENCE, YOUR VOTE WILL BE CAST "FOR" ALL THE PROPOSALS.
You may also vote by telephone at 1-800-690-6903, or through the Internet at
WWW.PROXYVOTE.COM. If you choose to help save the Trust time and postage costs
by voting through the Internet or by telephone, please don't return your Proxy
Card. If you do not respond at all, we may contact you by telephone to request
that you cast your vote.
WHO DO I CALL IF I HAVE QUESTIONS ABOUT THE PROXY STATEMENT?
Call your Investment Professional or a Federated Client Service
Representative. Federated's toll-free number is 1-800-341-7400.
After careful consideration, the Board of Trustees has unanimously approved
these proposals. The Board recommends that you read the enclosed materials
carefully and vote FOR all proposals.
PRELIMINARY
MONEY MARKET TRUST
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 17, 1999
A special meeting of the shareholders of Money Market Trust (the "Trust")
will be held at 5800 Corporate Drive, Pittsburgh, Pennsylvania 15237-7000, at
2:00 p.m. (Eastern time), on November 17, 1999 to consider proposals:
(1) To elect four Trustees.
(2) To approve amendments to, and a restatement of, the
Trust's Declaration of Trust:
(a) To require the approval of a majority of the
outstanding voting shares in the event of the sale
and conveyance of the assets of the Trust to
another trust or corporation; and
(b) To permit the Board of Trustees to liquidate assets
of the Trust, its series or classes, and distribute
the proceeds of such assets to the holders of such
shares representing such interests, without seeking
shareholder approval.
(3) 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
contained in the investment advisory agreement.
(4) To approve a proposed Agreement and Plan of Reorganization
between the Trust and Money Market Obligations Trust, on
behalf of its series, Money Market Trust (the "New Fund"),
whereby the New Fund would acquire all of the assets of
the Trust in exchange for shares of the New Fund to be
distributed PRO RATA by the Trust to its shareholders in
complete liquidation and termination of the Trust.
To transact such other business as may properly
come before the meeting or any adjournment thereof.
The Board of Trustees has fixed September 20, 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
October 7, 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. 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 FOUR TRUSTEES.......................................................
ABOUT THE ELECTION OF TRUSTEES..................................................
TRUSTEES STANDING FOR ELECTION..................................................
NOMINEE NOT PRESENTLY SERVING AS A TRUSTEE......................................
APPROVAL OF AMENDMENTS TO AND A RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST.......................................................
APPROVAL OF A CLARIFYING AMENDMENT TO THE TRUST'S
INVESTMENT ADVISORY AGREEMENT..............................................
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 AND INCUMBENT TRUSTEES OF THE TRUST....................................
OTHER MATTERS AND DISCRETION OF ATTORNEYS NAMED IN THE PROXY....................
APPENDIX I: AGREEMENT AND PLAN OF REORGANIZATION............................I-1
APPENDIX II: COMPARISON OF INVESTMENT POLICIES AND LIMITATIONS.............II-1
PRELIMINARY
PROXY STATEMENT
MONEY MARKET TRUST
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
ABOUT THE PROXY SOLICITATION AND THE MEETING
The enclosed proxy is solicited on behalf of the Board of Trustees of
the Trust (the "Board" or "Trustees"). The proxies will be voted at the special
meeting of shareholders of the Trust to be held on November 17, 1999, at 5800
Corporate Drive, Pittsburgh, Pennsylvania 15237-7000, at 2:00 p.m. (such special
meeting and any adjournment or postponement thereof are referred to as the
"Meeting").
The cost of the solicitation, including the printing and mailing of
proxy materials, will be borne by the Trust. In addition to solicitations
through the mails, proxies may be solicited by officers, employees, and agents
of the Trust or, if necessary, a communications firm retained for this purpose.
Such solicitations may be by telephone, telegraph, through the Internet or
otherwise. Any telephonic solicitations will follow procedures designed to
ensure accuracy and prevent fraud, including requiring identifying shareholder
information, recording the shareholder's instructions, and confirming to the
shareholder after the fact. Shareholders who communicate proxies by telephone or
by other electronic means have the same power and authority to issue, revoke, or
otherwise change their voting instruction as shareholders submitting proxies in
written form. The Trust may reimburse custodians, nominees, and fiduciaries for
the reasonable costs incurred by them in connection with forwarding solicitation
materials to the beneficial owners of shares held of record by such persons.
The Board has reviewed the proposed amendments to the Declaration of
Trust and the investment advisory agreement (the "Advisory Agreement"), as well
as the proposed reorganization (the "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 October 7, 1999, to shareholders of record at the close of business on
September 20, 1999 (the "Record Date"). On the Record Date, the Trust had
outstanding _____________ shares of beneficial interest.
The Trust's annual report, which includes audited financial statements
for the fiscal year ended July 31, 1999, was previously mailed to shareholders.
The Trust' annual report is incorporated by reference into this Proxy Statement.
The Trust will promptly provide, without charge and upon request, to each person
to whom this Proxy Statement is delivered, a copy of the Trust's annual report.
Requests for an annual report may be made by writing to the Trust's principal
executive offices or by calling the Trust. 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 FOUR TRUSTEES
The persons named as proxies intend to vote in favor of the election of
John F. Cunningham, J. Christopher Donahue, Charles F. Mansfield, Jr. and John
S. Walsh (collectively, the "Nominees") as Trustees of the Trust. Messrs.
Cunningham, Mansfield and Walsh are presently serving as Trustees. If elected by
shareholders, Mr. Donahue is expected to assume his responsibilities as a
Trustee effective January 1, 2000. Please see "ABOUT THE ELECTION OF TRUSTEES"
below for current information about the Nominees, and "OFFICERS AND INCUMBENT
TRUSTEES OF THE TRUST" in this Proxy Statement for current information about the
incumbent Trustees who have previously been elected by shareholders.
Messrs. Cunningham, Mansfield and Walsh were appointed Trustees on January
1, 1999, to fill vacancies created by the decision to expand the size of the
Board. Mr. Donahue is being proposed for election as a Trustee also as a result
of a decision to expand the size of the Board.
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 four 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
The Declaration of Trust provides that Trustees will continue in office
until their respective successors are elected, and therefore, 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) the Trustees standing for election,
and (ii) the Nominee standing for election who is not presently serving as a
Trustee, along with their addresses, birth dates, present positions with the
Trust and principal occupations during the past five years:
<PAGE>
TRUSTEES STANDING FOR ELECTION
JOHN F. CUNNINGHAM
353 El Brillo Way
Palm Beach, FL
Birth Date: March 5, 1943
Trustee
Director or Trustee of some of the Funds in the Federated Fund Complex;
Chairman, President and Chief Executive Officer, Cunningham & Co., Inc.
(strategic business consulting); Trustee Associate, Boston College; Director,
Iperia Corp. (communications/software); formerly, Director, Redgate
Communications and EMC Corporation (computer storage systems). Previous
Positions: Chairman of the Board and Chief Executive Officer, Computer Consoles,
Inc.; President and Chief Operating Officer, Wang Laboratories; Director, First
National Bank of Boston; Director, Apollo Computer, Inc.
CHARLES F. MANSFIELD, JR.
80 South Road
Westhampton Beach, NY
Birth Date: April 10, 1945
Trustee
Director or Trustee of some of the Funds in the Federated Fund Complex;
management consultant. Previous Positions: Chief Executive Officer, PBTC
International Bank; Partner, Arthur Young & Company (now Ernst & Young LLP);
Chief Financial Officer of Retail Banking Sector, Chase Manhattan Bank; Senior
Vice President, Marine Midland Bank; Vice President, Citibank; Assistant
Professor of Banking and Finance, Frank G. Zarb School of Business, Hofstra
University.
JOHN S. WALSH
2007 Sherwood Drive
Valparaiso, IN
Birth Date: November 28, 1957
Trustee
Director or Trustee of some of the Funds in the Federated Fund Complex;
President and Director, Heat Wagon, Inc. (manufacturer of construction temporary
heaters); President and Director, Manufacturers Products, Inc.(distributor of
portable construction heaters); President, Portable Heater Parts, a division of
Manufacturers Products, Inc.; Director, Walsh & Kelly, Inc. (heavy highway
contractor); formerly, Vice President, Walsh & Kelly, Inc.
NOMINEE NOT PRESENTLY SERVING AS A TRUSTEE
J. CHRISTOPHER DONAHUE
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Birth Date: April 11, 1949
Executive Vice President
President or Executive Vice President of the Federated Fund Complex; Director or
Trustee of some of the Funds in the Federated Fund Complex; President, Chief
Executive Officer and Director, Federated Investors, Inc.; President and
Trustee, Federated Investment Management Company; President and Trustee,
Federated Investment Counseling; President and Director, Federated Global
Investment Management Corp.; President, Passport Research, Ltd.; Trustee,
Federated Shareholder Services Company; Director, Federated Services Company.
Mr. Donahue is the son of John F. Donahue, Chairman and Trustee of the Trust.
PROPOSAL #2: TO APPROVE AMENDMENTS TO, AND A RESTATEMENT OF, THE TRUST'S
DECLARATION OF TRUST
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 to respond quickly to
changes in the market. Certain items in the current Declaration of Trust,
described below, prohibit 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, certain amendments to
the Trust's Declaration of Trust. The approval of each amendment will require
the affirmative vote of a majority of the outstanding voting shares of the Trust
as described in the Declaration of Trust. (See "PROXIES, QUORUM AND VOTING AT
THE MEETING" below.)
PROPOSAL #2(A): TO AMEND AND RESTATE THE
TRUST'S DECLARATION OF TRUST TO
REQUIRE THE APPROVAL OF A
MAJORITY OF THE OUTSTANDING
VOTING SHARES IN THE EVENT OF THE
SALE AND CONVEYANCE OF THE ASSETS
OF THE TRUST TO ANOTHER TRUST OR
CORPORATION
Article XII, Section 4(b) of the Declaration of Trust currently requires
the approval of the holders of at least two-thirds of the outstanding shares of
the Trust to approve any sale and conveyance of 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 the Reorganization that is described in Proposal #4 of 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 #4 on the agenda of the Meeting is a recommendation by the
Board that the shareholders approve the Reorganization of the Trust with and
into an affiliated open-end management investment company. If this Proposal
#2(a) is approved by shareholders at the Meeting, the amendment will become
effective immediately, and will be deemed to govern the approval of Proposal #4.
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
sell and convey the assets 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 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 then outstanding. For
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. In such event, the approval of the Reorganization
described in Proposal #4 of this Proxy Statement will then require the
affirmative vote of two-thirds of the shares of the Trust entitled to be voted
upon the matter.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #2(B): TO AMEND AND RESTATE THE TRUST'S DECLARATION OF
TRUST TO PERMIT THE BOARD OF TRUSTEES TO LIQUIDATE THE ASSETS
OF THE TRUST AND DISTRIBUTE THE PROCEEDS OF SUCH ASSETS TO THE HOLDERS OF
SUCH SHARES REPRESENTING SUCH INTERESTS, WITHOUT SEEKING SHAREHOLDER APPROVAL
Shareholders are being asked to approve an amendment to the Trust's
Declaration of Trust to permit the Trustees to sell and convert into money
(i.e., liquidate) all the assets of the Trust and then redeem all outstanding
shares of the Trust. Currently, a majority vote of shareholders is required to
liquidate the Trust. The Trustees have determined that the current restriction
presents a cumbersome structure under which the best interests of the Trust's
shareholders may not be served. By requiring the Trustees to solicit a
shareholder vote, by means of a proxy solicitation and special meeting of
shareholders, the Declaration of Trust greatly hinders the Trustees' ability to
effectively act on decisions about the continued viability of the Trust. If it
is determined that it is no longer advisable to continue the Trust, it may not
be in the best interests of shareholders to incur the substantial additional
expense of a shareholder meeting when it is more important to preserve those
assets that remain. If this proposal is approved by shareholders, the Trustees
will be authorized to liquidate the Trust by Board action without a further
shareholder vote.
If approved by shareholders, Article XII, Section 4(c) of the
Declaration of Trust will be amended to read as follows:
"The Trustees may at any time sell and convert into money all the assets
of the Trust, without shareholder approval, unless otherwise required by
applicable law. Upon making provision for the payment of all outstanding
obligations, taxes and other liabilities, accrued or contingent, of the
Trust, the Trustees shall distribute the remaining assets of the Trust
ratably among the holders of the outstanding Shares."
The Trustees believe that the interests of Trust shareholders are
adequately protected by this provision, as the liquidation would require the
conversion of the assets of the Trust to cash, which will thereafter be
distributed to shareholders pro rata. It is believed that this will result in
the return to shareholders of substantially the same value as would be provided
to the shareholders by a redemption resulting in the payment to the shareholders
of the then current net asset value of the shares owned by the shareholders.
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.
In the event that the amendment to the Declaration of Trust to allow
the Trustees to liquidate assets of the Trust is not approved by the
shareholders, the Declaration of Trust will remain as it currently exists, and
the Trustees will consider what action, if any, should be taken.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
<PAGE>
PROPOSAL #3: 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 CONTAINED IN THE ADVISORY AGREEMENT
The Trust obtains its investment advisory services from Federated
Investment Management Company (the "Adviser"), pursuant to an investment
advisory agreement dated August 1, 1989 (the "Advisory Agreement"). At a meeting
held on __________, the Advisory Agreement was continued by the Board of
Trustees of the Trust for one year ending _________. Under the Advisory
Agreement, the Trust pays the Adviser an annual fee of 0.40% of the average
daily net assets of the Trust. For the fiscal year ending July 31, 1999, the
Adviser received a management fee equal to ____% of the average daily net assets
of the Trust, following the Adviser's waiver.
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 1978. 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 amendment 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 BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #4: 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,
Money Market Trust (the "New Fund"), would acquire all of the assets (subject to
the liabilities) of the Trust in exchange for shares of beneficial interest of
the New Fund to be distributed pro rata by the Trust to its shareholders in
complete liquidation and dissolution of the Trust (the "Reorganization"). As a
result of the Reorganization, each shareholder of the Trust will become the
owner of New Fund shares having a total net asset value equal to the total net
asset value of his or her holdings in the Trust on the date of the
Reorganization.
MMOT is an open-end management investment company that consists of a
number of portfolios, each of which has its own investment objective. The New
Fund is a newly-organized portfolio of MMOT (initially a "shell" portfolio) with
the same investment objective as the Trust, which is to provide for its
shareholders stability of principal and current income consistent with stability
of principal. The permissible investments for the New Fund are the same as the
permissible investments for the Trust, and the New Fund uses comparable
investment strategies. The Trust pursues its investment objective by investing
in a portfolio of short-term money market securities maturing in thirteen months
or less, and the New Fund pursues its investment objective by investing in a
portfolio of short-term money market securities maturing in 397 days or less.
The average maturity of money market instruments in the New Fund's and the
Trust's portfolios, computed on a dollar weighted basis, will be 90 days or
less. Both the New Fund and the Trust 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 New Fund or the Trust will be able to
do so. (See "Comparison of Investment Policies and Risk Factors" below.)
Investments in the New Fund and the Trust are neither insured nor guaranteed by
the U.S. government.
As a condition to the Reorganization, 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 the New Fund or by the shareholders of the Trust. 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 (subject to liabilities) of the Trust
to 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. 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 December 1, 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 a portion of the costs of preparing, printing, copying and
mailing proxy solicitation materials to the Trust's shareholders.
The Reorganization may be terminated at any time prior to its
consummation by either the Trust or MMOT if circumstances should develop that,
in the opinion of either the Board of the Trust or the Board of Trustees of
MMOT, make proceeding with the Reorganization Agreement inadvisable. The
Reorganization Agreement provides further that at any time prior to the
consummation of the Reorganization: (i) the parties thereto may amend or modify
any of the provisions of the Reorganization Agreement provided that such
amendment or modification would not have a material adverse effect on the
benefits intended under the Reorganization Agreement and it would be consistent
with the best interests of the shareholders of the Trust and the New Fund; and
(ii) either party may waive any of the conditions set forth in the
Reorganization Agreement if, in the judgment of the waiving party, such waiver
will not have a material adverse effect on the benefits intended under the
Reorganization Agreement to the shareholders of the Trust or the shareholders of
the New Fund, as the case may be.
REASONS FOR THE PROPOSED REORGANIZATION
The Trust was established as a Massachusetts business trust in 1978.
Although the Board has been satisfied with the Trust's performance, it, and the
Trust's distributor and administrator, believe that reorganizing the Trust as a
portfolio of MMOT could streamline the Trust's distribution and administration.
Accordingly, the Trust's distributor and administrator have 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 distributor and administrator 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 distributor and administrator
emphasized the comparable advisory services provided the Trust and the New Fund,
the identical investment objectives and similar investment policies of the Trust
and the New Fund, and the administrative convenience and simplification of
management achievable by operating the Trust as a portfolio of MMOT.
BOARD OF TRUSTEES' CONSIDERATIONS AND RECOMMENDATIONS
The Trust's Board of Trustees, at its meeting on May 18, 1999, concluded
that the reorganization of the Trust as a portfolio of MMOT could provide for
streamlined distribution and administration. The Trust's Trustees also noted
that Trust shareholders would continue to receive the same quality of investment
management services from the New Fund's investment adviser, which is also the
Trust's current investment adviser. The Trust's Board of Trustees, including a
majority of the Trustees who are not "interested persons," additionally
determined that participation in the Reorganization is in the best interests of
the Trust and that the interests of the Trust shareholders would not be diluted
as a result of its effecting the Reorganization. Based upon the foregoing
considerations, and the fact that shareholders of the Trust will not suffer any
adverse federal income tax consequences as a result of the Reorganization, the
Board of Trustees of the Trust unanimously voted to approve, and recommended to
Trust shareholders the approval of, the Reorganization.
The Board of Trustees of MMOT, including the Trustees who are not
"interested persons," at the Board's meeting on May 18, 1999 unanimously
concluded that consummation of the Reorganization is in the best interests of
MMOT and the shareholders of the New Fund, and that the interests of New Fund
shareholders would not be diluted as a result of effecting the Reorganization.
As a consequence, the Board of Trustees of MMOT unanimously approved the
Reorganization Agreement.
Under the current terms of the Declaration of Trust, the approval of the
Reorganization requires the affirmative vote of two-thirds of the outstanding
voting shares of the Trust. If Proposal #2(a) described in this Proxy Statement
is approved, however, that amendment to the Declaration of Trust will become
effective immediately, and this Proposal #4 to approve the Reorganization will
require the affirmative vote of a majority of the outstanding voting shares of
the Trust as described in this Proxy Statement. (See "PROXIES, QUORUM AND VOTING
AT THE MEETING" below.)
<PAGE>
FEDERAL INCOME TAX CONSEQUENCES
As a condition to the Reorganization, 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, and the Trust and the New Fund each will be a "party to a
reorganization" within the meaning of Section 368(b) of the Code; (2) no gain or
loss will be recognized by the New Fund upon its receipt of the Trust's assets
(subject to the liabilities of the Trust) in exchange for New Fund shares; (3)
no gain or loss will be recognized by the Trust upon the transfer of its assets
(subject to the liabilities of the Trust) 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 the
exchange of their Trust shares for New Fund shares; (5) the tax basis of the
Trust's assets acquired by the New Fund will be the same as the tax basis of
such assets to the Trust immediately prior to the Reorganization; (6) the tax
basis of New Fund shares received by each shareholder of the Trust pursuant to
the Reorganization will be the same as the tax basis of Trust shares held by
such shareholder immediately prior to the Reorganization; (7) the holding period
of the assets of the Trust in the hands of the New Fund will include the period
during which those assets were held by the Trust; and (8) the holding period of
New Fund shares received by each shareholder of the Trust pursuant to the
Reorganization will include the period during which the Trust shares exchanged
therefor were held by such shareholder, provided the Trust shares were held as
capital assets on the date of 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); and 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. These risks could result in a loss of value of an investment in
the Trust, or in the New Fund when it commences operations.
The investment policies and restrictions of the New Fund have been
established so as to be comparable to the current investment policies and
restrictions of the Trust. The differences between the investment policies and
restrictions of the Trust and those of the New Fund result, in part, from the
standardization of certain investment policies and restrictions among the
Federated Funds, including the New Fund, and the elimination of certain
investment limitations which govern the Trust and had been previously required
under state law. A number of these investment limitations have been preempted
and are no longer applicable, and hence, the New Fund is not required to adopt
such limitations. Additionally, certain of the Trust's investment policies were
originally adopted as fundamental policies, when there was (and is) no legal
requirement that they be fundamental. Consequently, the New Fund is subject to
identical (or nearly identical) NON-fundamental investment policies. Appendix
II to this Proxy Statement identifies the differences in the investment
policies and restrictions of the Trust and the New Fund. The investment adviser
to the Trust and the New Fund does not believe that the differences in
investment policies and restrictions are material. In addition, the adviser
believes that the level of risk of an investment in the Trust is comparable to,
and does not materially differ from, the level of risk of an investment in the
New Fund.
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS AND OBLIGATIONS
Each of the Trust and MMOT is organized as a business trust pursuant to
a Declaration of Trust under the laws of the Commonwealth of Massachusetts. The
rights of shareholders of the Trust and of shareholders of MMOT relating to
voting, distributions and redemptions, as set forth in the applicable
Declaration of Trust and By-Laws, are substantively identical. Set forth below
is a brief summary of the significant rights of shareholders of the Trust and of
MMOT.
Neither the Trust nor MMOT are required to hold annual meetings of
shareholders. Shareholder approval is necessary only for certain changes in
operations or the election of Trustees under certain circumstances. A special
meeting of shareholders of either the Trust or MMOT for any permissible purpose
shall be called by the Trustees upon the written request of the holders of at
least 10% of the outstanding shares of the Trust or MMOT, as the case may be.
Each share of the Trust and MMOT is entitled to one vote. All shares of MMOT
have equal voting rights, except that only shares of the New Fund are entitled
to vote on matters only affecting the New Fund.
Under certain circumstances, shareholders of the Trust and shareholders
of the New Fund may be held personally liable as partners under Massachusetts
law for obligations of the Trust or of MMOT, respectively. To protect their
shareholders, the Trust and MMOT have filed legal documents with the
Commonwealth of Massachusetts that expressly disclaim the liability of their
shareholders for such acts or obligations of the Trust or MMOT. These documents
require that notice of this disclaimer be given in each agreement, obligation or
instrument that the Trust or MMOT or their Trustees enter into or sign.
In the unlikely event a shareholder is held personally liable for the
Trust's or the New Fund's obligations, each of the Trust and the New Fund is
required to use its property to protect or compensate the shareholder. On
request, the Trust or the New Fund will defend any claim made and pay any
judgment against a shareholder for any act or obligation of the New Fund.
Therefore, financial loss resulting from liability as a shareholder will occur
only if the Trust or MMOT cannot meet its obligations to indemnify shareholders
and pay judgments against them from the assets of the Trust or MMOT.
PURCHASE AND REDEMPTION INFORMATION, EXCHANGE PRIVILEGES, DISTRIBUTION AND
PRICING
The purchase, redemption, exchange privileges and distribution policies
of the Trust and the New Fund are identical.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS OF THE TRUST
VOTE "FOR" APPROVAL OF THE REORGANIZATION AGREEMENT INFORMATION ABOUT THE TRUST
PROXIES, QUORUM AND VOTING AT THE MEETING
Only shareholders of record on the Record Date will be entitled to vote
at the Meeting. Each share of the Trust is entitled to one vote. Fractional
shares are entitled to proportionate shares of one vote. 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. The
election of the Trustees is subject to a specific vote requirement described
under Proposal #1 in this Proxy Statement. The favorable vote of a majority of
the outstanding voting shares of the Trust is required to approve each of the
proposed amendments to the Declaration of Trust, and the amendment to the
Advisory Agreement. If Proposal #2(a) in this proxy statement is approved by
shareholders, then the favorable vote of a majority of the outstanding voting
shares of the Trust will be required to approve the Reorganization. If Proposal
#2(a) is not approved by shareholders, then the favorable vote of at least
two-thirds of the outstanding voting shares of the Trust will be required to
approve the Reorganization.
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 shares of the Trust then
outstanding and entitled to vote, present in person or by proxy, shall be
required to constitute a quorum for the purpose of voting on the Proposals.
For purposes of determining a quorum for transacting business at the
Meeting, abstentions and broker "non-votes" (that is, proxies from brokers or
nominees indicating that such persons have not received instructions from the
beneficial owner or other persons entitled to vote shares on a particular matter
with respect to which the brokers or nominees do not have discretionary power)
will be treated as shares that are PRESENT but which have not been VOTED. For
this reason, abstentions and broker non-votes will have the effect of a "no"
vote for purposes of obtaining the requisite approval of some of the proposals.
If a quorum is not present, the persons named as proxies may vote those
proxies which have been received to adjourn the Meeting to a later date. In the
event that a quorum is present but sufficient votes in favor of one or more of
the proposals have not been received, the persons named as proxies may propose
one or more adjournments of the Meeting to permit further solicitations of
proxies with respect to such proposal(s). All such adjournments will require the
affirmative vote of a majority of the shares present in person or by proxy at
the session of the Meeting to be adjourned. The persons named as proxies will
vote AGAINST any such adjournment those proxies which they are required to vote
against the proposal and will vote in FAVOR of the adjournment other proxies
which they are authorized to vote. A shareholder vote may be taken on other
proposals in this Proxy Statement prior to any such adjournment if sufficient
votes have been received for approval.
As referred to in this Proxy Statement, the "Federated Fund Complex,"
"The Funds" or "Funds" include the following investment companies: Cash Trust
Series, Inc.; Cash Trust Series II; CCB Funds; Federated Adjustable Rate U.S.
Government Fund, Inc.; Federated American Leaders Fund, Inc.; Federated ARMs
Fund; Federated Core Trust; Federated Insurance Series; 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 Municipal
Opportunities Fund, Inc.; Federated Municipal Securities Fund, Inc.; Federated
Municipal Trust; Federated Short-Term Municipal 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.;
Edward D. Jones & Co. Daily Passport Cash Trust; Liberty Term Trust, Inc. -
1999; Liberty U.S. Government Money Market 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; WesMark Funds; WCT Funds; and World Investment Series, Inc.
<PAGE>
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 5%
or more of the Trust's outstanding shares: [TO BE INSERTED]
<TABLE>
<CAPTION>
TRUSTEE COMPENSATION
NAME, AGGREGATE TOTAL COMPENSATION PAID
POSITION WITH COMPENSATION FROM FUND COMPLEX+
TRUST FROM
TRUST1#
<S> <C> <C>
- ------------------------------- ------------------- ------------------------------------------------
John F. Donahue@* $0 $0 for the Trust and
Chairman and Trustee 54 other investment companies in the Fund
Complex
Thomas G. Bigley $____ $113,860.22 for the Trust and
Trustee 54 other investment companies in the Fund
Complex
John T. Conroy, Jr. $____ $125,264.48 for the Trust and
Trustee 54 other investment companies in the Fund
Complex
Nicholas P. Constantakis $____ $47,958.02 for the Trust and
Trustee 29 other investment companies in the Fund
Complex
John F. Cunningham** $____ $0 for the Trust and
Trustee 46 other investment companies in the Fund
Complex
Lawrence D. Ellis, M.D.* $____ $113,860.22 for the Trust and
Trustees 54 other investment companies in the Fund
Complex
Peter E. Madden $____ $113,860.22 for the Trust and
Trustee 54 other investment companies in the Fund
Complex
Charles F. Mansfield, Jr.** $____ $0 for the Trust and
Trustee 50 other investment companies in the Fund
Complex
John E. Murray, Jr., J.D., S.J.D.@ $____ $113,860.22 for the Trust and
Trustee 54 other investment companies in the Fund
Complex
Marjorie P. Smuts $____ $113,860.22 for the Trust and
Trustee 54 other investment companies in the Fund
Complex
John S. Walsh** $____ $0 for the Trust and
Trustee 48 other investment companies in the Fund
Complex
</TABLE>
1 Information is furnished for the fiscal year July 31, 1999.
# The aggregate compensation is provided for the Trust which is comprised
of one portfolio.
+ The information is provided for the last calendar year.
* The Trustee is deemed to be an "interested person" as defined in the 1940 Act.
@ Member of the Executive Committee.
** Messrs. Cunningham, Mansfield and Walsh became members of the Board of
Trustees on January 1, 1999. They did not earn any fees for serving the Fund
Complex since these fees are reported as of the end of the last calendar year.
During the fiscal year ended July 31, 1999, there were four meetings of
the Board of Trustees. The interested Trustees, other than Dr. Ellis, do not
receive fees from the Trust. Dr. Ellis is an interested person by reason of the
employment of his son-in-law by Federated Securities Corp. All Trustees were
reimbursed for expenses for attendance at Board of Trustees meetings.
The Executive Committee of the Board of Trustees handles the
responsibilities of the Board between meetings of the Board. Other than its
Executive Committee, the Trust has one Board committee, the Audit Committee.
Generally, the function of the Audit Committee is to assist the Board of
Trustees in fulfilling its duties relating to the Trust's accounting and
financial reporting practices and to serve as a direct line of communication
between the Board of Trustees and the independent auditors. The specific
functions of the Audit Committee include recommending the engagement or
retention of the independent auditors, reviewing with the independent auditors
the plan and the results of the auditing engagement, approving professional
services provided by the independent auditors prior to the performance of such
services, considering the range of audit and non-audit fees, reviewing the
independence of the independent auditors, reviewing the scope and results of the
Trust's procedures for internal auditing, and reviewing the Trust's system of
internal accounting controls.
For the most recently completed fiscal year, Messrs. Conroy, Madden and
Murray served on the Audit Committee. These Trustees are not interested Trustees
of the Trust. During the fiscal year ended July 31, 1999, there were four
meetings of the Audit Committee. All of the members of the Audit Committee were
present for each meeting. Each member of the Audit Committee receives an annual
fee of $100 plus $25 for attendance at each meeting and is reimbursed for
expenses of attendance.
OFFICERS AND INCUMBENT TRUSTEES 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 birth dates of the executive officers of the Trust, as well as of
the incumbent Trustees who have previously been elected by shareholders, and
their principal occupations during the last five years, are set forth below:
JOHN F. DONAHUE
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Birth Date: July 28, 1924
Chairman and Trustee
Date Became an Officer and a Trustee: August 30, 1978 and July 24, 1978
Chief Executive Officer and Director or Trustee of the Federated Fund
Complex; Chairman and Director, Federated Investors, Inc.; Chairman and Trustee,
Federated Investment Management Company; Chairman and Director, Federated
Investment Counseling and Federated Global Investment Management Corp.;
Chairman, Passport Research, Ltd. Mr. Donahue is the father of J. Christopher
Donahue, Executive Vice President and Nominee for Trustee of the Trust.
THOMAS G. BIGLEY
15 Old Timber Trail
Pittsburgh, PA
Birth Date: February 3, 1934
Trustee
Date Became a Trustee: November 15, 1994
Director or Trustee of the Federated Fund Complex; Director, Member of the
Executive Committee, Children's Hospital of Pittsburgh; Director, Robroy
Industries, Inc. (coated steel conduits/computer storage equipment); formerly,
Senior Partner, Ernst & Young LLP; Director, MED 3000 Group, Inc. (physician
practice management); Director, Member of Executive Committee, University of
Pittsburgh.
JOHN T. CONROY, JR.
Wood/IPC Commercial Dept.
John R. Wood Associates, Inc. Realtors
3255 Tamiami Trail North
Naples, FL
Birth Date: June 23, 1937
Trustee
Date Became a Trustee: November 21, 1991
Director or Trustee of the Federated Fund Complex; 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.
NICHOLAS P. CONSTANTAKIS
175 Woodshire Drive
Pittsburgh, PA
Birth Date: September 3, 1939
Trustee
Date Became a Trustee: April 30, 1998
Director of Trustee of the Federated Fund Complex; formerly, Partner, Andersen
Worldwide SC.
LAWRENCE D. ELLIS, M.D.
3471 Fifth Avenue
Suite 1111
Pittsburgh, PA
Birth Date: October 11, 1932
Trustee
Date Became a Trustee: August 26, 1987
Director or Trustee of the Federated Fund Complex; Professor of Medicine,
University of Pittsburgh; Medical Director, University of Pittsburgh Medical
Center - Downtown; Hematologist, Oncologist, and Internist, University of
Pittsburgh Medical Center; Member, National Board of Trustees, Leukemia Society
of America.
PETER E. MADDEN
One Royal Palm Way
100 Royal Palm Way
Palm Beach, FL
Birth Date: March 16, 1942
Trustee
Date Became a Trustee: August 21, 1991
Director or Trustee of the Federated Fund Complex; formerly:
Representative, Commonwealth of Massachusetts General Court; President, State
Street Bank and Trust Company and State Street Corporation. Previous Positions:
Director, VISA USA and VISA International; Chairman and Director, Massachusetts
Bankers Association; Director,
Depository Trust Corporation; Director, The Boston Stock Exchange.
JOHN E. MURRAY, JR., J.D., S.J.D.
President, Duquesne University
Pittsburgh, PA
Birth Date: December 20, 1932
Trustee
Date Became a Trustee: February 14, 1995
Director or Trustee of the Federated Fund Complex; President, Law
Professor, Duquesne University; Consulting Partner, Mollica & Murray; Director,
Michael Baker Corp. (engineering, construction, operations and technical
services). Previous Positions: Dean and Professor of Law, University of
Pittsburgh School of Law; Dean and Professor
of Law, Villanova University School of Law.
MARJORIE P. SMUTS
4905 Bayard Street
Pittsburgh, PA
Birth Date: June 21, 1935
Trustee
Date Became a Trustee: February 24, 1984
Director or Trustee of the Federated Fund Complex; Public
Relations/Marketing/Conference Planning. Previous Positions: National
Spokesperson, Aluminum Company of America; television producer; business owner.
GLEN R. JOHNSON
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Birth Date: May 2, 1929
President
Date Became an Officer: August 30, 1978
Staff member, Federated Securities Corp.
J. CHRISTOPHER DONAHUE
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Birth Date: April 11, 1949
Executive Vice President
Date Became an Officer: June 1, 1995
President or Executive Vice President of the Federated Fund Complex; Director or
Trustee of some of the Funds in the Federated Fund Complex; President, Chief
Executive Officer and Director, Federated Investors, Inc.; President and
Trustee, Federated Investment Management Company; President and Trustee,
Federated Investment Counseling; President and Director, Federated Global
Investment Management Corp.; President, Passport Research, Ltd.; Trustee,
Federated Shareholder Services Company; Director, Federated Services Company.
Mr. Donahue is the son of John F. Donahue, Chairman and Trustee of the Trust.
<PAGE>
EDWARD C. GONZALES
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Birth Date: October 22, 1930
Executive Vice President
Date Became an Officer: June 1, 1995
Trustee or Director of some of the Funds in the Federated Fund Complex;
President, Executive Vice President and Treasurer of some of the Funds in the
Federated Fund Complex; Vice Chairman, Federated Investors, Inc.; Vice
President, Federated Investment Management Company, Federated Global Investment
Management Corp. and Passport Research, Ltd.; Executive Vice President and
Director, Federated Securities Corp.; Trustee, Federated Shareholder Services
Company.
JOHN W. MCGONIGLE
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Birth Date: October 26, 1938
Executive Vice President and Secretary
Date Became an Officer: August 30, 1978
Executive Vice President and Secretary of the Federated Fund Complex; Executive
Vice President, Secretary, and Director, Federated Investors, Inc.; Trustee,
Federated Investment Management Company; Trustee, Federated Investment
Counseling; Director, Federated Global Investment Management Corp.; Director,
Federated Services Company; Director, Federated Securities Corp.
RICHARD B. FISHER
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Birth Date: May 17, 1923
Vice President
Date Became an Officer: August 30, 1978
President or Vice President of some of the Funds in the Federated Fund Complex;
Director or Trustee of some of the Funds in the Federated Fund Complex;
Executive Vice President, Federated Investors, Inc.; Chairman and Director,
Federated Securities Corp.
<PAGE>
WILLIAM D. DAWSON, III
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Birth Date: March 3, 1949
Chief Investment Officer
Date Became an Officer: November 19, 1998
Chief Investment Officer of the Trust and various other Funds in the Federated
Fund Complex; Executive Vice President, Federated Investment Counseling,
Federated Global Investment Management Corp., Federated Investment Management
Company and Passport Research, Ltd.; Registered Representative, Federated
Securities Corp.; Portfolio Manager, Federated Administrative Services; Vice
President, Federated Investors, Inc.; formerly: Executive Vice President and
Senior Vice President, Federated Investment Counseling Institutional Portfolio
Management Services Division; Senior Vice President, Federated Investment
Management Company and Passport Research, Ltd.
RICHARD J. THOMAS
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Birth Date: June 17, 1954
Treasurer
Date Became an Officer: November 19, 1998
Treasurer of the Federated Fund Complex; Vice President - Funds Financial
Services Division, Federated Investors, Inc.; formerly: various management
positions within Funds Financial Services Division of Federated Investors, Inc.
None of the Officers of the Trust received salaries from the Trust
during the fiscal year ended July 31, 1999.
OTHER MATTERS AND DISCRETION OF ATTORNEYS NAMED IN THE PROXY
The Trust is not required, and does not intend, to hold regular annual
meetings of shareholders. Shareholders wishing to submit proposals for
consideration for inclusion in a proxy statement for the next meeting of
shareholders should send their written proposals to Money Market Trust,
Federated Investors Funds, 5800 Corporate Drive, Pittsburgh, Pennsylvania
15237-7000, so that they are received within a reasonable time before any such
meeting.
No business other than the matters described above is expected to come
before the Meeting, but should any other matter requiring a vote of shareholders
arise, including any question as to an adjournment or postponement of the
Meeting, the persons named on the enclosed proxy card will vote on such matters
according to their best judgment in the interests of the Trust.
SHAREHOLDERS ARE REQUESTED TO COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD
AND RETURN IT IN THE ENCLOSED ENVELOPE, WHICH NEEDS NO POSTAGE IF MAILED IN THE
UNITED STATES.
By Order of the Board of Trustees,
John W. McGonigle
Secretary
October 7, 1999
<PAGE>
MONEY MARKET TRUST
INVESTMENT ADVISER
FEDERATED INVESTMENT MANAGEMENT COMPANY
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
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of Money
Market Trust (the "Trust"), hereby appoint Patricia F. Conner, Gail Cagney,
William Haas, Suzanne W. Land 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 of
Shareholders (the "Meeting") to be held on November 17, 1999, at 5800 Corporate
Drive, Pittsburgh, Pennsylvania, at 2:00 p.m. and at any adjournment thereof.
The attorneys named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. Discretionary authority
is hereby conferred as to all other matters as may properly come before the
Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF MONEY MARKET
TRUST. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" THE PROPOSALS.
BY CHECKING THE BOX "FOR" BELOW, YOU WILL VOTE TO APPROVE EACH OF THE PROPOSED
ITEMS IN THIS PROXY, AND TO ELECT EACH OF THE NOMINEES AS TRUSTEES OF THE TRUST
FOR [ ]
PROPOSAL 1 TO ELECT JOHN F. CUNNINGHAM, J. CHRISTOPHER DONAHUE,
CHARLES F. MANSFIELD, JR. AND JOHN S. WALSH AS TRUSTEES OF THE
TRUST
FOR [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
VOTE FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR" a
particular nominee, mark the "VOTE FOR ALL EXCEPT" box
and strike a line through the name of each nominee for
whom you are NOT voting. Your shares will be voted for
the remaining nominees.
PROPOSAL 2 TO APPROVE AMENDMENTS AND A RESTATEMENT OF THE TRUST'S DECLARATION OF
TRUST:
2(A) TO APPROVE AN AMENDMENT AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO REQUIRE THE APPROVAL BY A MAJORITY OF THE
OUTSTANDING VOTING SHARES IN THE EVENT OF THE SALE OR CONVEYANCE
OF THE ASSETS OF THE TRUST TO ANOTHER TRUST OR CORPORATION
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(B) TO AMEND AND RESTATE THE TRUST'S DECLARATION OF TRUST TO PERMIT
THE BOARD OF TRUSTEES TO LIQUIDATE ASSETS OF THE TRUST, AND
DISTRIBUTE THE PROCEEDS OF SUCH ASSETS TO THE HOLDERS OF SUCH
SHARES REPRESENTING SUCH INTERESTS, WITHOUT SEEKING SHAREHOLDER
APPROVAL
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 3 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 CONTAINED IN THE INVESTMENT
ADVISORY AGREEMENT
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 4 TO APPROVE A PROPOSED AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN THE TRUST AND MONEY MARKET OBLIGATIONS TRUST, ON BEHALF
OF ITS SERIES, MONEY MARKET TRUST (THE "NEW FUND"), WHEREBY THE
NEW FUND WOULD ACQUIRE ALL OF THE ASSETS OF THE TRUST IN EXCHANGE
FOR SHARES OF THE NEW FUND TO BE DISTRIBUTED PRO RATA BY THE
TRUST TO ITS SHAREHOLDERS IN COMPLETE LIQUIDATION AND TERMINATION
OF THE TRUST
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
YOUR VOTE IS IMPORTANT Please
complete, sign and return
this card as soon as
possible.
Dated
Signature
Signature (Joint Owners)
Please sign this proxy exactly as your name appears on the books of the Trust.
Joint owners should each sign personally. Directors and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
YOU MAY ALSO VOTE YOUR SHARES BY TOUCHTONE PHONE BY CALLING 1-800-690-6903
OR THROUGH THE INTERNET AT WWW.PROXYVOTE.COM
APPENDIX I
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated as of June 1, 1999 (the
"Agreement") between Money Market Trust, a Massachusetts business trust (the
"Fund"), with its principal place of business at 5800 Corporate Drive,
Pittsburgh, Pennsylvania 15237-7000, and Money Market Obligations Trust, a
Massachusetts business trust (the "Trust"), with its principal place of business
located at 5800 Corporate Drive, Pittsburgh, Pennsylvania 15237-7000, on behalf
of its newly-organized portfolio, Money Market Trust (the "Successor Fund").
WHEREAS, the Board of Trustees of the Fund and the Board of Trustees
of the Trust have determined that it is in the best interests of the Fund and
the Trust, respectively, that the assets of the Fund be acquired by the
Successor Fund pursuant to this Agreement; and
WHEREAS, the parties desire to enter into a plan of exchange which would
constitute a reorganization within the meaning of Section 368(a)(1)(F) of the
Internal Revenue Code of 1986, as amended (the "Code"):
NOW THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter set forth, the parties hereto agree as follows:
1. PLAN OF EXCHANGE.
(a) Subject to the terms and conditions set forth herein, 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 computed
as of the close of the New York Stock Exchange (normally 4:00 p.m. Eastern time)
on the Exchange Date (such time and date being hereinafter called the "Valuation
Time") 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 on the Exchange Date (as defined herein). 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 Exchange Date shall be December 1, 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 Exchange 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 "Money Market Trust" and "Board of Trustees of
Money Market Trust" refer, respectively, to the trust created and the trustees,
as trustees but not individually or personally, acting from time to time under
the Fund's Declaration of Trust, which is hereby referred to and a copy of which
is on file at the office of the State Secretary of the Commonwealth of
Massachusetts and at the principal office of the Fund. The obligations of the
Fund entered into in the name or on behalf thereof by any of the trustees,
representatives or agents are made not individually, but in such capacities, and
are not binding upon any of the trustees, shareholders or representatives of the
Fund personally, but bind only the trust property, and all persons dealing with
any portfolio of shares of the Fund must look solely to the trust property
belonging to such portfolio for the enforcement of any claims against the Fund.
(ii) Both parties specifically acknowledge and agree that
any liability of the Fund under this Agreement, or in connection with the
transactions
contemplated herein, shall be discharged only out of the assets of the Fund and
that no other portfolio of the Fund shall be liable with respect thereto.
(b) (i) The names "Money Market Obligations Trust" and "Board of
Trustees of Money Market Obligations Trust" refer, respectively, to the trust
created and the trustees, as trustees but not individually or personally, acting
from time to time under the Trust's Declaration of Trust, which is hereby
referred to and a copy of which is on file at the office of the State Secretary
of the Commonwealth of Massachusetts and at the principal office of the Trust.
The obligations of the Trust entered into in the name or on behalf of the
Successor Fund by any of the trustees, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
trustees, shareholders or representatives of the Trust personally, but bind only
the Successor Fund's trust property, and all persons dealing with any portfolio
of shares of the Trust must look solely to the trust property belonging to such
portfolio for the enforcement of any claims against the Trust.
(ii) Both parties specifically acknowledge and agree that
any liability of the Trust under this Agreement, or in connection with the
transactions
contemplated herein, shall be discharged only out of the assets of the Successor
Fund and that no other portfolio of the Trust shall be liable with respect
thereto.
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.
MONEY MARKET TRUST
ATTEST: /S/ GAIL CAGNEY /S/ JOHN W. MCGONIGLE
Title: Assistant Secretary Title: Executive Vice President
MONEY MARKET OBLIGATIONS
TRUST, on behalf of its portfolio,
Money Market Trust
ATTEST: /S/ GAIL CAGNEY /S/ JOHN W. MCGONIGLE
Title: Assistant Secretary Title: Executive Vice President
APPENDIX II
COMPARISON OF INVESTMENT POLICIES
AND LIMITATIONS
Set forth below is a comparison of the investment policies and
restrictions of the Trust and the New Fund:
FUNDAMENTAL INVESTMENT POLICIES AND LIMITATIONS
PERMISSIBLE INVESTMENTS
THE TRUST: "The Trust invests in high quality money instruments that are either
rated in the highest short-term rating category by one or more nationally
recognized statistical rating organizations ("NRSROs") or are of comparable
quality to securities having such ratings.
Money market instruments include, but are not limited to, U.S. Treasury Bills,
all other marketable obligations issued or guaranteed by the U.S. Government,
its agencies or instrumentalities, instruments of banks and savings and loans
which are members of the Federal Deposit Insurance Corporation (FDIC) or Federal
Savings and Loan Insurance Corporation (FSLIC) (such as certificates of deposit,
demand and time deposits, savings shares and bankers' acceptances), variable
amount notes, variable rate notes, repurchase agreements, prime commercial paper
and instruments secured by such obligations."
THE NEW FUND: The New Fund is subject to a set of identical NON-fundamental
investment policies governing its permissible investments.
INVESTING IN BANK INSTRUMENTS
THE TRUST: "The Trust will not invest in instruments issued by banks or savings
and loans unless: (a) at the time of investment they have capital, surplus and
undivided profits in excess of $100 million (as of the date of their most
recently published financial statements); or (b) the principal amount of the
instrument is insured in full by the FDIC or FSLIC. Commercial paper investments
will be limited to commercial paper rated A-1 by Standard and Poor's
Corporation, Prime -1 by Moody's Investors Services, Inc. or F-1 by Fitch
Investors Service, Inc. In addition, the Trust may purchase money market
instruments (including commercial paper and bank instruments) which are not
rated but are determined by the Board of Trustees or its designee to be or
comparable quality to other bank or corporate obligations in which the Trust may
invest. The Trust may attempt to increase yield by trading portfolio securities
to take advantage of short-term market variations."
THE NEW FUND: The New Fund is subject to a set of identical NON-fundamental
investment policies governing its investments in bank instruments.
DIVERSIFICATION OF INVESTMENTS
THE TRUST: The Trust is not subject to a fundamental investment policy regarding
diversification of its investments; however, the Trust is registered as a
diversified investment company under the 1940 Act, and, as a money market fund,
the Trust operates in accordance with the various requirements of the 1940 Act's
Rule 2a-7 and complies with Rule 2a-7's diversification requirements.
THE NEW FUND: "With respect to securities comprising 75% of the value of its
total assets, the Fund will not purchase securities of any one issuer (other
than cash; cash items; securities issued or guaranteed by the government of the
United States or its agencies or instrumentalities and repurchase agreements
collateralized by such U.S. government securities; and securities of other
investment companies) if, as a result, more than 5% of the value of its total
assets would be invested in securities of that issuer, or the Fund would own
more than 10% of the outstanding voting securities of that issuer."
ISSUING SENIOR SECURITIES AND BORROWING MONEY
THE TRUST: "The Trust will not borrow money, except as a temporary measure for
extraordinary or emergency purposes and then (a) only in amounts not in excess
of five percent (5%) of the value of its total assets or (b) in an amount up to
one-third of the value of its total assets including the amount borrowed in
order to meet redemption requests without immediately selling any portfolio
securities. (Any such borrowings under this section will not be
collateralized)."
THE NEW FUND: "The Fund may borrow money, directly or indirectly, and issue
senior securities to the maximum extent permitted under the 1940 Act."
SELLING SHORT AND BUYING ON MARGIN
THE TRUST: "The Trust will not purchase any securities on margin or sell
any securities short but may obtain such short-term credits as may be necessary
for clearance of purchases and sales of securities. The Trust may purchase and
dispose of U.S. Government securities before the issuance thereof. The Trust may
also purchase U.S. Government securities on a delayed delivery basis. The
settlement dates of these transactions shall be determined by the mutual
agreement of the parties."
THE NEW FUND: The New Fund is not subject to an investment limitation regarding
selling securities short. The New Fund is subject to a NON-fundamental
investment limitation relating to margin transactions that states: "The Fund
will not purchase securities on margin, provided that the Fund may obtain
short-term credits necessary for the clearance of purchases and sales of
securities."
INVESTING IN REAL ESTATE, COMMODITIES AND MINERALS
THE TRUST: "The Trust will not invest in commodities, commodity contracts, oil,
gas, or other mineral programs or real estate, except that it may purchase money
market instruments issued by companies which invest in or sponsor interests
therein."
THE NEW FUND: The New Fund is subject to separate fundamental investment
policies governing its investments in real estate and commodities that provide:
"The Fund may not purchase or sell real estate, provided that this restriction
does not prevent the Fund from investing in issuers which invest, deal, or
otherwise engage in transactions in real estate or interests therein, or
investing in securities that are secured by real estate or interests therein.
The Fund may exercise its rights under agreements relating to such securities,
including the right to enforce security interests and to hold real estate
acquired by reason of such enforcement until that real estate can be liquidated
in an orderly manner," and
"The Fund may not purchase or sell physical commodities, provided that the Fund
may purchase securities of companies that deal in commodities."
The New Fund is not subject to an investment restriction pertaining to investing
in oil, gas or other mineral programs.
PLEDGING ASSETS
THE TRUST: "The Trust will not pledge securities."
THE NEW FUND: The New Fund is subject to a NON-fundamental investment limitation
pertaining to pledging assets that provides: "The Fund will not mortgage, pledge
or hypothecate any of its assets, provided that this shall not apply to the
transfer of securities in connection with any permissible borrowing or to
collateral arrangements in connection with permissible activities."
LENDING CASH OR SECURITIES
THE TRUST: "The Trust will not make loans to other persons; provided however
that the purchase or holding of money market instruments, including repurchase
agreements and variable amount demand notes, in accordance with the Trust's
investment objective and policies shall not constitute the making of a loan."
THE NEW FUND: "The Fund may not make loans, provided that this restriction does
not prevent the Fund from purchasing debt obligations, entering into repurchase
agreements, lending its assets to broker/dealers or institutional investors and
investing in loans, including assignments and participation interests."
UNDERWRITING SECURITIES
THE TRUST: "The Trust will not underwrite any issue of securities, except as it
may be deemed to be an underwriter under the Securities Act of 1933 in
connection with the sale of restricted securities which the Trust may purchase
pursuant to its investment objective, policies and limitations."
THE NEW FUND: "The Fund may not underwrite the securities of other issuers,
except that the Fund may engage in transactions involving the acquisition,
disposition or resale of its portfolio securities, under circumstances where it
may be considered to be an underwriter under the Securities Act of 1933."
CONCENTRATION OF INVESTMENTS
THE TRUST: "The Trust will not purchase securities if as a result of such
purchase more than 25% of the value of its total assets would be invested in any
one industry. However, investing in bank instruments such as time and demand
deposits and certificates of deposit, U.S. Treasury Bills or securities issued
or guaranteed by the U.S. Government, its agencies or instrumentalities, or
instruments secured by these money market instruments, such as repurchase
agreements for Government Securities, shall not be considered investments in any
one industry."
THE NEW FUND: "The Fund will not make investments that will result in the
concentration of its investments in the securities of issuers primarily engaged
in the same industry. Government securities, municipal securities and bank
instruments are not deemed to constitute an industry. To conform to the current
view of the SEC that only domestic bank instruments may be excluded from
industry concentration limitations, as a matter of non-fundamental policy, the
Fund will not exclude foreign bank instruments from industry concentration
limits as long as the policy of the SEC remains in effect. As a non-fundamental
operating policy, the Fund will consider concentration to be the investment of
more than 25% of the value of its total assets in any one industry."
INVESTING IN ISSUERS WHOSE SECURITIES ARE OWNED BY OFFICERS AND TRUSTEES
THE TRUST: "The Trust will not purchase or retain in its portfolio securities
issued by an issuer, any of whose officers, directors or security holders is an
officer, director or trustee of the Trust or Adviser if, after purchase of the
securities of such issuer by the Trust, one or more of such officers, directors
or trustees owns beneficially more than one-half of one percent of the shares or
securities or both of the issuer and such officer, director, and trustee owning
more than one-half of one percent of such shares or securities together own
beneficially more than five percent of such shares or securities."
THE NEW FUND: The New Fund is not subject to a comparable investment
limitation.
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
THE TRUST: "The Trust will not invest in securities issued by any other
investment company except as part of a merger, consolidation or other
acquisition."
THE NEW FUND: The New Fund is subject to a NON-fundamental investment
policy that states "The Fund may invest its assets in securities if other
investment companies, including the securities of affiliated money market funds,
as an efficient means of carrying out its investment policies."
INVESTING FOR CONTROL
THE TRUST: "The Trust will not invest in securities of a company for the
purpose of exercising control or management."
THE NEW FUND: The New Fund is not subject to a comparable investment
limitation.
ACQUIRING SECURITIES
THE TRUST: "The Trust will not acquire voting securities of an issuer."
THE NEW FUND: The New Fund is not subject to a comparable investment
limitation.
INVESTING IN FOREIGN SECURITIES
THE TRUST: "The Trust will not invest in foreign securities which are not
publicly traded in the United States."
THE NEW FUND: The New Fund is not subject to a comparable investment
limitation.
NON-FUNDAMENTAL INVESTMENT POLICIES AND LIMITATIONS
PERMISSIBLE INVESTMENTS
THE TRUST: "The Trust pursues its investment objective by investing in a
portfolio of money market securities maturing in thirteen months or less."
THE NEW FUND: "The Fund pursues its investment objective by investing in a
portfolio of money market securities maturing in 397 days or less."
INVESTING IN ILLIQUID SECURITIES
THE TRUST: "The Trust will not invest more than 10% of the value of its net
assets in illiquid securities including certain restricted securities not
determined to be liquid under criteria established by the Trustees and
repurchase agreements providing for settlement in more than seven days after
notice."
THE NEW FUND: "The Fund will not purchase securities for which there is no
readily available market, or enter into repurchase agreements or purchase time
deposits maturing in more than seven days, if immediately after and as a result,
the value of such securities would exceed, in the aggregate, 10% of the Fund's
net assets."
INVESTING IN RESTRICTED SECURITIES
THE TRUST: "The Trust may invest in restricted securities. Restricted securities
are any securities in which the Trust may invest pursuant to its investment
objective and policies but which are subject to restrictions on resale under
federal securities law. Under criteria established by the Trustees, certain
restricted securities are determined to be liquid. To the extent that restricted
securities are not determined to be liquid, the Trust will limit their purchase,
together with other illiquid securities, including repurchase agreements
providing for settlement in more than seven days after notice, to 10% of its
assets."
THE NEW FUND: The New Fund is subject to a non-fundamental investment policy
that provides: "The Fund may invest in restricted securities. Restricted
securities are any securities in which the Fund may invest pursuant to its
investment objective and policies but which are subject to restrictions on
resale under federal securities law. Under criteria established by the Trustees,
certain restricted securities are determined to be liquid. To the extent that
restricted securities are not determined to be liquid, the Fund will limit their
purchase, together with other illiquid securities, to 10% of its net assets."
ENGAGING IN WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
THE TRUST: "The Trust may purchase securities on a when-issued or delayed
delivery basis. These transactions are arrangements in which the Trust purchases
securities with payment and delivery scheduled for a future time. The seller's
failure to complete these transactions may cause the Trust to miss a price or
yield considered to be advantageous. Settlement dates may be a month or more
after entering into these transactions, and the market values of the securities
purchased may vary from the purchase prices. The Trust does not intend to engage
in when-issued and delayed delivery transactions to an extent that would cause
the segregation of more than 20% of the total value of its assets."
THE NEW FUND: "The Fund may purchase securities on a when-issued or delayed
delivery basis. These transactions are arrangements in which the Fund purchases
securities with payment and delivery scheduled for a future time. The seller's
failure to complete these transactions may cause the Fund to miss a price or
yield considered to be advantageous. Settlement dates may be a month or more
after entering into these transactions, and the market values of the securities
purchased may vary from the purchase prices."
STATE UNDERTAKINGS
THE TRUST: "The Trust did not borrow money or pledge securities in excess
of 5% of the value of its net assets during the last fiscal year and has no
present intention to do so during the coming fiscal year."
THE NEW FUND: The New Fund is not subject to comparable undertakings.
