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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
INTERMEDIATE MUNICIPAL 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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INTERMEDIATE MUNICIPAL 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.
Intermediate Municipal Trust will hold a special meeting of shareholders on
March 23, 1999. It is important for you to vote on the issues described in this
Proxy Statement. We recommend that you read the Proxy Statement in its entirety;
the explanations will help you to decide on the issues.
Following is an introduction to the proposals and the process.
WHY AM I BEING ASKED TO VOTE?
Mutual funds are required to obtain shareholders' votes for certain types
of changes, like those included in this Proxy Statement. You have a right to
vote on these changes.
WHAT ISSUES AM I BEING ASKED TO VOTE ON?
The proposals include the election of Trustees, ratification of independent
auditors, and changes to the Trust's fundamental investment policies. The
Trustees also recommend an amendment to the Declaration of Trust.
WHY ARE INDIVIDUALS RECOMMENDED FOR ELECTION TO THE BOARD OF TRUSTEES?
The Trust is devoted to serving the needs of its shareholders, and the Board is
responsible for managing the Trust's business affairs to meet those needs. The
Board represents the shareholders and can exercise all of the Trust's powers,
except those reserved only for shareholders.
Trustees are selected on the basis of their education and professional
experience. Candidates are chosen based on their distinct interest in, and
capacity for understanding the complexities of, the operation of a mutual fund.
These individuals bring considerable experience to the impartial oversight of a
fund's operation.
The Proxy Statement includes a brief description of each nominee's history and
current position with the Trust, if applicable.
WHY AM I BEING ASKED TO VOTE ON THE RATIFICATION OF INDEPENDENT AUDITORS?
The independent auditors conduct a professional examination of accounting
documents and supporting data to render an opinion on the material fairness of
the information. Because financial reporting involves discretionary decision
making, the auditors' opinion is an important assurance to both the Trust and
its investors.
The Board of Trustees approved the selection of Arthur Andersen LLP, long-time
auditors of the Trust, for the current fiscal year and believes that the
continued employment of this firm is in the Trust's best interests.
WHY ARE THE TRUST'S "FUNDAMENTAL POLICIES" BEING CHANGED OR REMOVED?
Every mutual fund has certain investment policies that can be changed only with
the approval of its shareholders. These are referred to as "fundamental"
investment policies.
In some cases, these policies were adopted to reflect regulatory, business, or
industry conditions that no longer exist or no longer are necessary. In other
cases, advances in the securities markets and the economy have created different
procedures and techniques that affect the Trust's operations.
By reducing the number of "fundamental policies," the Trust may be able to
minimize the costs and delays associated with frequent shareholder meetings.
Also, the investment adviser's ability to manage the Trust's assets may be
enhanced and investment opportunities increased.
The proposed amendments will:
o reclassify as operating policies those fundamental policies that are not
required to be fundamental by the Investment Company Act of 1940, as amended
("1940 Act"); o simplify and modernize the policies that are required to be
"fundamental" by the 1940 Act; and o remove fundamental policies that are no
longer required by the securities laws of individual states.
Federated Management, the Trust's adviser, is a conservative money manager. Its
highly trained professionals are dedicated to making investment decisions in the
best interest of the Trust and its shareholders. The Board believes that the
proposed changes will be applied responsibly by the Trust's adviser.
WHY ARE SOME "FUNDAMENTAL POLICIES" BEING RECLASSIFIED AS "OPERATING POLICIES?"
As noted above, some "fundamental policies" have been redefined as "operating
policies." Operating policies do not require shareholder approval to be changed.
This gives the Trust's Board additional flexibility to determine whether to
participate in new investment opportunities and to meet industry changes
promptly.
WHY ARE THE TRUSTEES RECOMMENDING AN AMENDMENT TO THE DECLARATION OF TRUST?
The Declaration organizing the Trust was prepared many years ago. Since then,
developments in the investment company industry and changes in the law 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.
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DEFINITIVE
INTERMEDIATE MUNICIPAL TRUST
NOTICE OF SPECIAL MEETING
IN LIEU OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 23, 1999
A Special Meeting in lieu of Annual Meeting of the shareholders
of Intermediate Municipal Trust (the "Trust"), which presently consists of one
portfolio or series, Federated Intermediate Municipal Trust (the "Fund"), will
be held at 5800 Corporate Drive, Pittsburgh, Pennsylvania 15237-7000, at 12:00
Noon (Eastern time), on March 23, 1999 to consider proposals:
(1) To elect seven Trustees.
(2) To ratify the selection of the Trust's independent
auditors.
(3) To make changes to the Fund's fundamental investment
policies:
(a) To amend the Fund's fundamental investment policy on diversification of
its investments;
(b) To make non-fundamental, and to amend, the Fund's
fundamental investment policy regarding acquiring securities to exercise control
of an issuer;
(c) To make non-fundamental, and to amend, the Fund's
authority to invest in the securities of other investment companies; and
(d) To amend the Fund's fundamental investment policy
regarding borrowing to permit the purchase of securities while borrowings are
outstanding.
(4) To eliminate certain of the Fund's fundamental investment policies:
(a) To remove the Fund's fundamental investment policy on investing in new
issuers;
(b) To remove the Fund's fundamental investment policy regarding
concentration; and
(c) To remove the Fund's fundamental investment policy on investing in oil,
gas, and minerals.
(5) To approve an amendment and restatement to the Trust's Declaration of
Trust to permit the Board of Trustees to liquidate assets of the Trust without
seeking shareholder approval.
To transact such other business as may properly come
before the meeting or any adjournment thereof.
The Board of Trustees has fixed January 22, 1999 as the record date for
determination of shareholders entitled to vote at the meeting.
By Order of the Board of Trustees,
John W. McGonigle
Secretary
February 3, 1999
YOU CAN HELP THE TRUST AVOID THE NECESSITY AND EXPENSE OF SENDING FOLLOW-UP
LETTERS TO ENSURE A QUORUM BY PROMPTLY SIGNING AND RETURNING THE ENCLOSED PROXY.
IF YOU ARE UNABLE TO ATTEND THE MEETING, PLEASE MARK, SIGN, DATE AND RETURN THE
ENCLOSED PROXY SO THAT THE NECESSARY QUORUM MAY BE REPRESENTED AT THE SPECIAL
MEETING IN LIEU OF ANNUAL MEETING. THE ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES.
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TABLE OF CONTENTS
ABOUT THE PROXY SOLICITATION AND THE MEETING.................................[4]
ELECTION OF SEVEN TRUSTEES...................................................[4]
ABOUT THE ELECTION OF TRUSTEES ..............................................[5]
TRUSTEES STANDING FOR ELECTION...............................................[5]
NOMINEES NOT PRESENTLY SERVING AS TRUSTEES...................................[6]
RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS........................[7]
APPROVAL OF CHANGES TO THE FUND'S FUNDAMENTAL INVESTMENT
POLICIES.................................................................[7]
APPROVAL OF THE ELIMINATION OF CERTAIN FUNDAMENTAL INVESTMENT POLICIES......[10]
APPROVAL OF AN AMENDMENT AND RESTATEMENT TO THE TRUST'S
DECLARATION OF TRUST....................................................[12]
INFORMATION ABOUT THE TRUST..................................................13]
PROXIES, QUORUM AND VOTING AT THE MEETING...................................[13]
SHARE OWNERSHIP OF THE TRUSTEES.............................................[14]
TRUSTEE COMPENSATION........................................................[14]
OFFICERS OF THE TRUST.......................................................[16]
OTHER MATTERS AND DISCRETION OF ATTORNEYS NAMED IN THE PROXY.................[18
<PAGE>
DEFINITIVE
PROXY STATEMENT
INTERMEDIATE MUNICIPAL 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"), which presently consists of one portfolio
or series, Federated Intermediate Municipal Fund (the "Fund"). The proxies will
be voted at the special meeting in lieu of annual meeting of shareholders of the
Trust to be held on March 23, 1999, at 5800 Corporate Drive, Pittsburgh,
Pennsylvania 15237-7000, at 12:00 Noon (such special meeting in lieu of annual
meeting and any adjournment or postponement thereof are referred to as the
"Meeting").
The cost of the solicitation, including the printing and mailing of
proxy materials, will be borne by the Trust. In addition to solicitations
through the mails, proxies may be solicited by officers, employees, and agents
of the Trust or, if necessary, a communications firm retained for this purpose.
Such solicitations may be by telephone, telegraph, through the Internet or
otherwise. Any telephonic solicitations will follow procedures designed to
ensure accuracy and prevent fraud, including requiring identifying shareholder
information, recording the shareholder's instructions, and confirming to the
shareholder after the fact. Shareholders who communicate proxies by telephone or
by other electronic means have the same power and authority to issue, revoke, or
otherwise change their voting instruction as shareholders submitting proxies in
written form. The Trust will reimburse custodians, nominees, and fiduciaries for
the reasonable costs incurred by them in connection with forwarding solicitation
materials to the beneficial owners of shares held of record by such persons.
At its meeting on November 17, 1998, the Board reviewed both the
proposed Amended and Restated Declaration of Trust and the changes recommended
in the investment policies of the Fund and approved them subject to shareholder
approval. The purposes of the Meeting are set forth in the accompanying Notice.
The Trustees know of no business other than that mentioned in the Notice that
will be presented for consideration at the Meeting. Should other business
properly be brought before the Meeting, proxies will be voted in accordance with
the best judgment of the persons named as proxies. This proxy statement and the
enclosed proxy card are expected to be mailed on or about February 3, 1999, to
shareholders of record at the close of business on January 22, 1999 (the "Record
Date"). On the Record Date, the Trust had outstanding 22,262,612.6370 shares of
beneficial interest.
The Fund's annual prospectus, which includes audited financial
statements for the fiscal year ended May 31, 1998, was previously mailed to
shareholders. Requests for a semi-annual report, which contains unaudited
financial statements for the period ended November 30, 1998, may be made in
writing to the Trust's principal executive offices, which are located at
Federated Investors Funds, 5800 Corporate Drive, Pittsburgh, Pennsylvania
15237-7000 or by calling toll-free 1-800-341-7400.
PROPOSAL #1: ELECTION OF SEVEN TRUSTEES
The persons named as proxies intend to vote in favor of the election of
Thomas G. Bigley, John T. Conroy, Jr., John F. Cunningham, Peter E. Madden,
Charles F. Mansfield, Jr., John E. Murray, Jr. and John S. Walsh (collectively,
the "Nominees") as Trustees of the Trust. Messrs. Bigley, Conroy, Madden and
Murray are presently serving as Trustees. If elected by shareholders, Messrs.
Cunningham, Mansfield and Walsh are expected to assume their responsibilities as
Trustees effective April 1, 1999. Please see "ABOUT THE ELECTION OF TRUSTEES"
below for current information about the Nominees.
Messrs. Conroy and Madden were appointed Trustees on November 13, 1991,
to fill vacancies created by the resignation of Mr. Joseph Maloney and the
decision to expand the size of the Board. Messrs. Bigley and Murray were
appointed Trustees on November 15, 1994 and February 14, 1995, respectively,
also to fill vacancies resulting from the decision to expand the size of the
Board. Messrs. Cunningham, Mansfield and Walsh are being proposed for election
as Trustees to fill vacancies anticipated to result from the resignations of
three current Trustees. The anticipated resignations will not occur if Messrs.
Cunningham, Mansfield and Walsh are not elected as Trustees.
All Nominees have consented to serve if elected. If elected, the
Trustees will hold office without limit in time until death, resignation,
retirement, or removal or until the next meeting of shareholders to elect
Trustees and the election and qualification of their successors. Election of a
Trustee is by a plurality vote, which means that the seven individuals receiving
the greatest number of votes at the Meeting will be deemed to be elected.
If any Nominee for election as a Trustee named above shall by reason of
death or for any other reason become unavailable as a candidate at the Meeting,
votes pursuant to the enclosed proxy will be cast for a substitute candidate by
the proxies named on the proxy card, or their substitutes, present and acting at
the Meeting. Any such substitute candidate for election as a Trustee who is an
"interested person" (as defined in the Investment Company Act of 1940, as
amended (the "1940 Act")) of the Trust shall be nominated by the Executive
Committee. The selection of any substitute candidate for election as a Trustee
who is not an "interested person" shall be made by a majority of the Trustees
who are not "interested persons" of the Trust. The Board has no reason to
believe that any Nominee will become unavailable for election as a Trustee.
THE BOARD OF TRUSTEES RECOMMENDS THAT
SHAREHOLDERS VOTE TO ELECT AS TRUSTEES THE NOMINEES FOR
ELECTION TO THE BOARD OF TRUSTEES OF THE TRUST
ABOUT THE ELECTION OF TRUSTEES
When elected, the Trustees will hold office during the lifetime of the
Trust except that: (a) any Trustee may resign; (b) any Trustee may be removed by
written instrument signed by at least two-thirds of the number of Trustees prior
to such removal; (c) any Trustee who requests to be retired or who has become
mentally or physically incapacitated may be retired by written instrument signed
by a majority of the other Trustees; and (d) a Trustee may be removed at any
special meeting of the shareholders by a vote of two-thirds of the outstanding
shares of the Trust. In case a vacancy shall exist for any reason, the remaining
Trustees will fill such vacancy by appointment of another Trustee. The Trustees
will not fill any vacancy by appointment if, immediately after filling such
vacancy, less than two-thirds of the Trustees then holding office would have
been elected by the shareholders. If, at any time, less than a majority of the
Trustees holding office have been elected by the shareholders, the Trustees then
in office will call a shareholders' meeting for the purpose of electing Trustees
to fill vacancies. Otherwise, there will normally be no meeting of shareholders
called for the purpose of electing Trustees.
Set forth below is a listing of: (i) Trustees standing for election, and
(ii) Nominees standing for election who are not presently serving as Trustees,
along with their addresses, birthdates, present positions with the Trust, if
applicable, and principal occupations during the past five years:
TRUSTEES STANDING FOR ELECTION
THOMAS G. BIGLEY
15 Old Timber Trail
Pittsburgh, PA
Birthdate: February 3, 1934
Trustee
DIRECTOR OR TRUSTEE OF THE FEDERATED FUND COMPLEX; DIRECTOR AND MEMBER OF
EXECUTIVE COMMITTEE, Children's Hospital of Pittsburgh; formerly, Senior
Partner, Ernst & Young LLP; Director, MED 3000 Group, Inc.; Director AND Member
of Executive Committee, University of Pittsburgh.
JOHN T. CONROY, JR.
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL
Birthdate: June 23, 1937
Trustee
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.
PETER E. MADDEN
One Royal Palm Way
100 Royal Palm Way
Palm Beach, FL
Birthdate: March 16, 1942
Trustee
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.
JOHN E. MURRAY, JR., J.D., S.J.D.
President, Duquesne University
Pittsburgh, PA
Birthdate: December 20, 1932
Trustee
DIRECTOR OR TRUSTEE OF THE FEDERATED FUND COMPLEX; President, Law Professor,
Duquesne University; Consulting Partner, Mollica & Murray.
NOMINEES NOT PRESENTLY SERVING AS TRUSTEES
JOHN F. CUNNINGHAM
353 El Brillo Way
Palm Beach, FL
Birthdate: March 5, 1943
Chairman, President and Chief Executive Officer, Cunningham & Co., Inc.; TRUSTEE
ASSOCIATE, BOSTON COLLEGE; Director, EMC Corporation[; FORMERLY, DIRECTOR,
REDGATE COMMUNICATIONS.
CHARLES F. MANSFIELD, JR.
80 SOUTH ROAD
WESTHAMPTON, NY
Birthdate: April 10, 1945
Management consultant.
JOHN S. WALSH
2007 Sherwood Drive
Valparaiso, IN
Birthdate: November 28, 1957
President AND DIRECTOR, Heat Wagon, Inc.; PRESIDENT AND DIRECTOR, Manufacturers
Products, Inc.; PRESIDENT, Portable Heater Parts, A DIVISION OF MANUFACTURERS
PRODUCTS, INC.; DIRECTOR, WALSH & KELLY, INC.; FORMERLY, VICE PRESIDENT, WALSH &
KELLY, INC.
PROPOSAL #2: RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS
The 1940 Act requires that the Trust's independent auditors be selected
by the Board, including a majority of those Board members who are not
"interested persons" (as defined in the 1940 Act) of the Trust, and submitted
for ratification or rejection at the next succeeding meeting of shareholders.
The Board of the Trust, including a majority of its members who are not
"interested persons" of the Trust, approved the selection of Arthur Andersen LLP
(the "Auditors") for the current fiscal year at a Board meeting held on August
18, 1998.
The selection by the Board of the Auditors as independent auditors for
the current fiscal year is submitted to the shareholders for ratification. Apart
from their fees as independent auditors and certain consulting fees, neither the
Auditors nor any of their partners have a direct, or material indirect,
financial interest in the Trust or its investment adviser. The Auditors are a
major international independent accounting firm. The Board believes that the
continued employment of the services of the Auditors for the current fiscal year
would be in the Trust's best interests.
Representatives of the Auditors are not expected to be present at the
Meeting. If a representative is present, he or she will have the opportunity to
make a statement and would be available to respond to appropriate questions. The
ratification of the selection of the Auditors will require the affirmative vote
of a majority of the shares present and voting on the proposal at the Meeting.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE TO RATIFY THE SELECTION OF INDEPENDENT AUDITORS
PROPOSAL #3: APPROVAL OR DISAPPROVAL OF CHANGES TO THE FUND'S
FUNDAMENTAL INVESTMENT POLICIES
The 1940 Act requires investment companies, such as the Trust, or such
companies' series, such as the Fund, to adopt certain specific investment
policies that can be changed only by shareholder vote. An investment company may
also elect to designate other policies that may be changed only by shareholder
vote. Both types of policies are often referred to as "fundamental policies."
Certain of the Fund's fundamental policies had been adopted in the past to
reflect regulatory, business or industry conditions that are no longer in
effect. Accordingly, the Trustees have authorized the submission to the Fund's
shareholders for their approval, and recommended that shareholders approve, the
removal, amendment and/or reclassification of certain of the Fund's fundamental
policies.
The proposed amendments would:
(i) simplify and modernize the fundamental policies that are required to be
stated under the 1940 Act;
(ii) reclassify as operating policies those fundamental policies that are
not required to be fundamental under the 1940 Act; and
(iii) remove those fundamental policies which are no longer required by the
securities laws of individual states as a result of the National Securities
Markets Improvement Act ("NSMIA"), dated October 11, 1996.
By reducing to a minimum those policies that can be changed only by shareholder
vote, the Trustees believe that the Fund would be able to minimize the costs and
delay associated with holding future shareholder meetings to revise fundamental
policies that become outdated or inappropriate. The Trustees also believe that
the investment adviser's ability to manage the Fund's assets in a changing
investment environment will be enhanced and that investment management
opportunities will be increased by these changes. The recommended changes are
specified below. Each sub-item will be voted on separately, and the approval of
any sub-item will require the approval of a majority of the outstanding voting
shares of the Fund as defined in the 1940 Act. (See "PROXIES, QUORUM AND VOTING
AT THE MEETING" below.)
PROPOSAL #3(A): TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY ON
DIVERSIFICATION OF ITS INVESTMENTS
The Fund's current fundamental investment policy regarding
diversification of its investments states:
"With respect to 75% of the value of the Fund's total assets, the Fund
will not purchase securities of any one issuer (other than securities
issued or guaranteed by the government of the United States or its
agencies or instrumentalities) if as a result more than 5% of the value
of its total assets would be invested in the securities of that issuer."
In order to afford the Fund's investment adviser maximum flexibility in
managing the Fund's assets, the Trustees propose to restate the Fund's
diversification policy to be consistent with the definition of a diversified
investment company under the 1940 Act. The new policy would specifically add
securities of other investment companies to the list of issuers which are
excluded from the 5% limitation.
Upon approval of the Fund's shareholders, the fundamental investment
policy governing diversification will be amended to read as follows:
"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 the securities of
that issuer, or it would own more than 10% of the outstanding voting
securities of that issuer."
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #3(B): TO MAKE NON-FUNDAMENTAL, AND TO AMEND, THE FUND'S POLICY
REGARDING ACQUIRING SECURITIES TO EXERCISE CONTROL OF AN ISSUER
The Fund's current policy prohibits the acquisition of the voting
securities of any issuer except as part of a merger, consolidation,
reorganization, or acquisition of assets. The philosophy behind this policy is
to prohibit the Fund from acquiring securities to exercise control of an issuer.
"Control" is defined under the 1940 Act as owning 25% or more of the voting
securities of an issuer. A controlling ownership is likely to have an effect on
the outcome of any shareholder voting on changes related to the operation of the
issuing company.
When the Fund adopted this investment policy, it was required to be
fundamental by certain state securities regulators. Since NSMIA, those
requirements no longer apply. By making the policy a non-fundamental operating
policy, the Trustees will have maximum flexibility to make changes in the policy
to benefit the Fund and its shareholders without the expense and delay of
holding a shareholder meeting. THIS WILL ENABLE THE FUND TO ENJOY THE BENEFITS
OF AN EXEMPTIVE ORDER ISSUED BY THE COMMISSION (THE "ORDER") THAT ALLOWS THE
FUND TO INVEST IN AFFILIATED MONEY MARKET FUNDS UNDER LIMITED CIRCUMSTANCES. If
approved by shareholders, it is the intention of the Board to revise the
language of the proposed operating policy to eliminate the sentence that appears
in the current policy and that provides that "[the Fund] will not invest in
securities issued by any other investment company or investment trust." This
prohibition has no relationship to the Fund's policy on investing for control,
either in its fundamental form or in the form of the proposed operating policy.
When revised, the policy would continue to prohibit the Fund from
investing in an issuer for the purpose of exercising control. The Fund does not
currently anticipate that it would employ investment techniques the objective of
which will be to exercise control over, or management of, any company.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #3(C): TO MAKE NON-FUNDAMENTAL AND TO AMEND THE FUND'S POLICY TO
PERMIT THE FUND TO INVEST IN THE SECURITIES OF OTHER INVESTMENT COMPANIES
The Fund currently has a fundamental investment policy that prohibits
the purchase or retention of shares of any other investment company or
investment trust. The Fund's investment adviser believes, and the Board has
concluded, that this prohibition unnecessarily limits the Fund's investments.
Amending this policy would expand the investment opportunities available to the
Fund by allowing the Fund to invest in other investment companies. Investments
in other investment companies are limited under the 1940 Act and BY THE ORDER.
The 1940 Act and the Order limit both the portion of the Fund's assets which may
be so invested in a particular fund, and the portion of such a fund which may be
owned by the Fund. Normally, each investment company in which the Fund invests
will have its own operating expenses, including advisory fees; however, the
Fund's adviser will waive the portion of its advisory fee attributable to assets
invested in other investment companies. It is expected that the other
duplicative expenses are justified by the benefit of having access to the
markets in which such FUNDS INVEST, or in the investment techniques or advisers
of such funds.
At the present time, the Board expects to utilize the authority provided
by this proposal to invest the Fund's temporary cash reserves in shares of money
market funds. These cash reserves typically arise from the receipt of dividend
and interest income from portfolio securities, the receipt of payment for sale
of portfolio securities, defensive cash positions and the decision to hold cash
to meet redemptions or make anticipated dividend payments. Further, by changing
the policy from fundamental to an operating policy, the Trustees believe that
maximum flexibility will be afforded to the Fund to amend the policy as
appropriate in the future without the burden and delay to the Fund and its
shareholders of holding a special meeting.
The ability to purchase shares of money market funds would be beneficial
because it would provide the Fund additional investment opportunities late in
each business day, when opportunities to acquire money market instruments are
limited. Otherwise, the Fund would be forced to hold some of its cash
uninvested, resulting in little or no investment income.
If shareholders approve this item, the new operating policy will read as
follows, IF APPLICABLE, in: (a) the Prospectus, and (b) the Statement of
Additional Information:
(a)...."INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
The Fund may invest its assets in securities of other investment
companies as an efficient means of carrying out its investment
policies. It should be noted that investment companies incur
certain expenses, such as management fees, and, therefore, any
investment by the Fund in shares of other investment companies
may be subject to such duplicate expenses. At the present time,
the Fund expects that its investments in other investment
companies will be limited to shares of money market funds,
including funds affiliated with the Fund's investment adviser."
(b)...."INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
The Fund may invest in the securities of affiliated money market
funds as an efficient means of managing the Fund's uninvested cash."
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #3(D): TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY
REGARDING BORROWING TO PERMIT THE PURCHASE OF
SECURITIES WHILE BORROWINGS ARE OUTSTANDING
The Fund's current fundamental investment policy on borrowing states
that:
"The Fund will not borrow money except as a temporary measure for
extraordinary or emergency purposes and then only in amounts not in
excess of 5% of the value of its total assets or in an amount up to
one-third of the value of its total assets, including the amount
borrowed, in order to meet redemption requests without immediately
selling portfolio securities. This borrowing provision is not for
investment leverage but solely to facilitate management of the portfolio
by enabling the Fund to meet redemption requests when the liquidation of
portfolio securities would be inconvenient or disadvantageous. Interest
paid on borrowed funds will serve to reduce the Fund's income. The Fund
will liquidate any such borrowings as soon as possible and may not
purchase any portfolio securities while any borrowings are outstanding."
Management has recommended that the Trustees consider approving a
revision to the fundamental policy that would permit the Fund to purchase
securities while its borrowings are outstanding, as the Fund's investment
adviser believes that the current policy unnecessarily limits the Fund's
investments. If approved by shareholders, the phrase "and may not purchase any
portfolio securities while any borrowings are outstanding" will be deleted. The
Fund would continue to be subject to the same percentage limitation on its
borrowings --5% of the value of the Fund's total assets -- if the proposed
change is approved.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #4: REMOVAL OF CERTAIN OF THE FUND'S
FUNDAMENTAL INVESTMENT POLICIES
The Board has determined that certain of the current fundamental
investment policies are unnecessary and should be removed. Until NSMIA was
adopted in 1996, the securities laws of several states required every investment
company which intended to sell its shares in those states to adopt policies
governing a variety of operational issues, including investment in certain
securities. As a consequence of those restrictions, the Fund adopted the
investment policies described below and agreed that they would be changed only
upon the approval of shareholders. Since these prohibitions are no longer
required under current law, the management of the Fund has recommended, and the
Board has determined, that these policies should be removed. The removal of
these policies would provide greater flexibility in the management of the Fund
by permitting the Fund to purchase a broader range of securities which are
permitted investments and which are consistent with its investment objective and
policies.
The policies being removed are listed below. Each will be voted on
separately, and the approval of each change will require the affirmative vote of
a majority of the outstanding voting shares of the Fund as defined in the 1940
Act. (See "PROXIES, QUORUM AND VOTING AT THE MEETING" below.)
PROPOSAL #4(A): TO REMOVE THE FUND'S FUNDAMENTAL INVESTMENT POLICY ON
INVESTING IN NEW ISSUERS (UNSEASONED ISSUERS)
The Trustees have determined that the Fund's current policy on
investment in new issuers is unnecessary. New issuers are those issuers that are
considered "unseasoned" because they have been in operation for less than three
years. While the length of the prior record of an issuer may be a factor in
evaluating an issuer, other factors can be equally or more important in
evaluating the quality of the investment. Therefore, the Trustees are
recommending that the following policy be deleted:
"The Fund will not invest more than 5% of the value of its total assets
in industrial development bonds where the payment of principal and
interest are the responsibility of a company with a record of less than
three years of continuous operation, including the operation of any
predecessor."
If approved, the Fund will be able to invest in unseasoned companies
without limit so long as they meet other criteria governing the selection of the
Fund's
investments.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #4(B): TO REMOVE THE FUND'S FUNDAMENTAL INVESTMENT
POLICY REGARDING CONCENTRATION
The 1940 Act requires every investment company to state a fundamental
policy regarding its intention to concentrate portfolio investments in one
industry. Investments of more than 25% of the value of an investment company's
assets in any one industry represent a "concentration" in that particular
industry. However, if an investment company does not intend to concentrate its
investments, this must also be stated.
The Fund is presently subject to a fundamental investment policy
regarding concentration that states:
"The Fund does not intend to purchase securities (other than
pre-refunded municipal bonds prior to the termination of the
escrow arrangement, securities guaranteed by the U.S. government
or its agencies or direct obligations of the U.S. government) if,
as a result of such purchases, 25% or more of the value of its
total assets would be invested in a governmental subdivision in
any one state, territory, or possession of the United States.
This policy applies to securities which are related in such a way
that an economic, business, or political development affecting
one security would also affect the other securities (such as
securities paid from revenues from selected projects in
transportation, public works, education, or housing)."
Since the Fund adopted its policy reserving freedom to concentrate
investments in the obligations discussed above, the investment focus of the
Fund's investment adviser and the types of securities in which it would like to
invest the Fund's assets have changed. Therefore, the Fund's investment adviser
has proposed to amend the concentration policy to eliminate the policy discussed
above, and would like to reserve the freedom to concentrate its investments in
instruments and obligations of U.S. banks and bank holding companies. By
modifying this policy, the investment adviser believes the Fund will have
greater flexibility to invest in a broader array of securities which are
acceptable investments for the Fund in seeking to achieve its investment
objective of providing current income exempt from federal regular income tax.
Therefore, the Trustees have recommended that the Fund's fundamental
investment policy be eliminated, and that it be replaced with the following
operating policy:
"The Fund will not invest 25% or more of its total assets in any one
industry. However, investing in U.S. government securities and domestic bank
instruments shall not be considered investments in any one industry."
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #4(C): TO REMOVE THE FUND'S FUNDAMENTAL INVESTMENT
POLICY ON INVESTING IN OIL, GAS AND MINERALS
The Trustees have determined that the Fund's current investment policy
on investment in oil, gas and minerals is unnecessary, and are recommending that
it be removed by deleting the following:
"The Fund will not purchase or sell ... oil, gas, or other
mineral exploration or development programs or leases."
In the event of shareholder approval, any investments by the Fund in
securities of issuers which invest in or sponsor such programs or leases will
continue to be subject to the other criteria governing the selection of the
Fund's investments.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #5: TO AMEND AND RESTATE THE TRUST'S DECLARATION OF TRUST TO
PERMIT THE BOARD OF TRUSTEES TO LIQUIDATE ASSETS OF THE TRUST WITHOUT SEEKING
SHAREHOLDER APPROVAL
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. One item in the current Declaration of Trust, described
below, prohibits the Trust from responding quickly and favorably to changing
markets without going to the expense and delay of holding a shareholder meeting.
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, or any class or series of the
Trust, and then redeem all outstanding shares of any portfolio or class of the
Trust. Currently, a majority vote of shareholders is required to liquidate the
Trust, or an affected series or class of which shares are outstanding. The
Trustees have determined that the current restriction presents a cumbersome
structure under which the best interest of all 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, or a class or series of
the Trust, it may not be in the best interest of shareholders to incur the
substantial additional expense of a shareholder meeting when it is more
important to preserve those assets that remain.
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, or a class or series 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, belonging to the Trust, the
Trustees shall distribute the remaining assets of the Trust ratably
among the holders of the outstanding Shares having an interest in such
assets."
The Trustees believe that the interest of the shareholders is 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. The approval of the amendment will require the affirmative
vote of a majority of the outstanding voting securities of the Trust as defined
in the Declaration of Trust. (See "PROXIES, QUORUM AND VOTING AT THE MEETING"
below.)
In the event that the amendment to the Declaration of Trust to allow
Trustees to liquidate assets 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
INFORMATION ABOUT THE TRUST
PROXIES, QUORUM AND VOTING AT THE MEETING
Only shareholders of record on the Record Date will be entitled to vote
at the Meeting. Each share of the Trust is entitled to one vote. Fractional
shares are entitled to proportionate shares of one vote. Under both the
Investment Company Act of 1940 and the Declaration of Trust, the favorable vote
of a "majority of the outstanding voting shares" of the Trust means: (a) the
holders of 67% or more of the outstanding voting securities present at the
Meeting, if the holders of 50% or more of the outstanding voting securities of
the Trust are present or represented by proxy; or (b) the vote of the holders of
more than 50% of the outstanding voting securities, whichever is less.
Any person giving a proxy has the power to revoke it any time prior to
its exercise by executing a superseding proxy or by submitting a written notice
of revocation to the Secretary of the Trust. In addition, although mere
attendance at the Meeting will not revoke a proxy, a shareholder present at the
Meeting may withdraw his or her proxy and vote in person. All properly executed
and unrevoked proxies received in time for the Meeting will be voted in
accordance with the instructions contained in the proxies. IF NO INSTRUCTION IS
GIVEN ON THE PROXY, THE PERSONS NAMED AS PROXIES WILL VOTE THE SHARES
REPRESENTED THEREBY IN FAVOR OF THE MATTERS SET FORTH IN THE ATTACHED NOTICE.
In order to hold the Meeting, a "quorum" of shareholders must be
present. Holders of one-fourth of the total number of outstanding shares of the
Trust, present in person or by proxy, shall be required to constitute a quorum
for the purpose of voting on the proposals made.
For purposes of determining a quorum for transacting business at the
Meeting, abstentions and broker "non-votes" (that is, proxies from brokers or
nominees indicating that such persons have not received instructions from the
beneficial owner or other persons entitled to vote shares on a particular matter
with respect to which the brokers or nominees do not have discretionary power)
will be treated as shares that are PRESENT but which have not been VOTED. For
this reason, abstentions and broker non-votes will have the effect of a "no"
vote for purposes of obtaining the requisite approval of some of the proposals.
If a quorum is not present, the persons named as proxies may vote those
proxies which have been received to adjourn the Meeting to a later date. In the
event that a quorum is present but sufficient votes in favor of one or more of
the proposals have not been received, the persons named as proxies may propose
one or more adjournments of the Meeting to permit further solicitations of
proxies with respect to such proposal(s). All such adjournments will require the
affirmative vote of a majority of the shares present in person or by proxy at
the session of the Meeting to be adjourned. The persons named as proxies will
vote AGAINST any such adjournment those proxies which they are required to vote
against the proposal and will vote in FAVOR of the adjournment other proxies
which they are authorized to vote. A shareholder vote may be taken on other
proposals in this PROXY STATEMENT prior to any such adjournment if sufficient
votes have been received for approval.
As referred to in this Proxy Statement, THE "FEDERATED FUND COMPLEX,"
"The Funds" or "Funds" include the following investment companies: Automated
Government Money Trust; Cash Trust Series II; Cash Trust Series, Inc.; CCB
Funds; DG Investor Series; Edward D. Jones & Co. Daily Passport Cash Trust;
Federated Adjustable Rate U.S. Government Fund, Inc.; Federated American Leaders
Fund, Inc.; Federated ARMs Fund; Federated Core Trust; Federated Equity Funds;
Federated Equity Income Fund, Inc.; Federated Fund for U.S. Government
Securities, Inc.; Federated GNMA Trust; Federated Government Income Securities,
Inc.; Federated Government Trust; Federated High Income Bond Fund, Inc.;
Federated High Yield Trust; Federated Income Securities Trust; Federated Income
Trust; Federated Index Trust; Federated Institutional Trust; Federated Insurance
Series; Federated Master Trust; Federated Municipal Opportunities Fund, Inc.;
Federated Municipal Securities Fund, Inc.; Federated Municipal Trust; Federated
Short-Term Municipal Trust; Federated Short-Term U.S. Government Trust;
Federated Stock and Bond Fund, Inc.; Federated Stock Trust; Federated Tax-Free
Trust; Federated Total Return Series, Inc.; Federated U.S. Government Bond Fund;
Federated U.S. Government Securities Fund: 1-3 Years; Federated U.S. Government
Securities Fund: 2-5 Years; Federated U.S. Government Securities Fund: 5-10
Years; Federated Utility Fund, Inc.; Fixed Income Securities, Inc.; Intermediate
Municipal Trust; International Series, Inc.; Investment Series Funds, Inc.;
Liberty Term Trust, Inc. - 1999; Liberty U.S. Government Money Market Trust;
Liquid Cash Trust; Managed Series Trust; Money Market Management, Inc.; Money
Market Obligations Trust; Money Market Obligations Trust II; Money Market Trust;
Municipal Securities Income Trust; Newpoint Funds; Regions Funds; RIGGS Funds;
Tax-Free Instruments Trust; The Planters Funds; Trust for Government Cash
Reserves; Trust for Short-Term U.S. Government Securities; Trust for U.S.
Treasury Obligations; WesMark Funds; WCT Funds; World Investment Series, Inc.;
Blanchard Funds; Blanchard Precious Metals Fund, Inc.; High Yield Cash Trust;
Investment Series Trust; Targeted Duration Trust; The Virtus Funds; and Trust
for Financial Institutions.
SHARE OWNERSHIP OF THE TRUSTEES
Officers and Trustees of the Trust own less than 1% of the Fund's outstanding
shares.
At the close of business on the Record Date, the following PERSON owned, to
the knowledge of management, more than 5% of the outstanding shares of the Fund:
HUBCO, ====== ======= BIRMINGHAM, AL, OWNED APPROXIMATELY 1,975,526.9260 SHARES
(8.87%). ==================================================================
TRUSTEE COMPENSATION
<TABLE>
<CAPTION>
AGGREGATE ]
NAME, COMPENSATION
POSITION WITH FROM TOTAL COMPENSATION PAID
TRUST TRUST1# #FROM FUND COMPLEX+
- --------------------------- -------------------- ------------------------------------------------
<S> <C> <C>
John F. Donahue*@ $0 $-0- for the Trust and
==
Chairman and Trustee 56 other investment companies in the Fund
Complex
Thomas G. Bigley $702.67 $113,860.22 for the Trust and
===========
Trustee 56 other investment companies in the Fund
Complex
John T. Conroy, Jr. $773.07 $125,264.48 for the Trust and
===========
Trustee 56 other investment companies in the Fund
Complex
William J. Copeland $773.07 $125,264.48 for the Trust and
===========
Trustee 56 other investment companies in the Fund
Complex
James E. Dowd $773.07 $125,264.48 for the Trust and
===========
Trustee 56 other investment companies in the Fund
Complex
Lawrence D. Ellis, M.D.* $702.67 $113,860.22 for the Trust and
= ===========
Trustee 56 other investment companies in the Fund
Complex
Edward L. Flaherty, Jr.@ $773.07 $125,264.48 for the Trust and
= ===========
Trustee 56 other investment companies in the Fund
Complex
Glen R. Johnson* $0 $-0- for the Trust and
=
President and Trustee 56 other investment companies in the Fund
Complex
Peter E. Madden $702.67 $113,860.22 for the Trust and
===========
Trustee 56 other investment companies in the Fund
Complex
John E. Murray, Jr. $702.67 $113,860.22 for the Trust and
===========
Trustee 56 other investment companies in the Fund
Complex
Wesley W. Posvar $702.67 $113,860.22 for the Trust and
===========
Trustee 56 other investment companies in the Fund
Complex
Marjorie P. Smuts $702.67 $113,860.22 for the Trust and
===========
Trustee 56 other investment companies in the Fund
Complex
</TABLE>
1 Information is furnished for the fiscal year ended May 31, 1998.
# 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.
During the fiscal year ended May 31, 1998, there were four meetings of
the Board of Trustees. The interested Trustees, other than Dr. Ellis, do not
receive fees from the Trust. Dr. Ellis is an interested person by reason of the
employment of his son-in-law by Federated Securities Corp. All Trustees were
reimbursed for expenses for attendance at Board of Trustees meetings.
THE EXECUTIVE COMMITTEE OF THE BOARD OF TRUSTEES HANDLES THE
RESPONSIBILITIES OF THE BOARD BETWEEN MEETINGS OF THE BOARD. Other than its
Executive Committee, the Trust has one Board committee, the Audit Committee.
Generally, the function of the Audit Committee is to assist the Board of
Trustees in fulfilling its duties relating to the Trust's accounting and
financial reporting practices and to serve as a direct line of communication
between the Board of Trustees and the independent auditors. The specific
functions of the Audit Committee include recommending the engagement or
retention of the independent auditors, reviewing with the independent auditors
the plan and the results of the auditing engagement, approving professional
services provided by the independent auditors prior to the performance of such
services, considering the range of audit and non-audit fees, reviewing the
independence of the independent auditors, reviewing the scope and results of the
Trust's procedures for internal auditing, and reviewing the Trust's system of
internal accounting controls.
FOR THE MOST RECENTLY COMPLETED FISCAL YEAR, Messrs. Flaherty, Conroy,
Copeland, and Dowd SERVED on the Audit Committee. These Trustees are not
interested Trustees of the Trust. During the fiscal year ended May 31, 1998,
there were four meetings of the Audit Committee. All of the members of the Audit
Committee were present for each meeting. Each member of the Audit Committee
receives an annual fee of $100 plus $25 for attendance at each meeting and is
reimbursed for expenses of attendance.
OFFICERS OF THE TRUST
The executive officers of the Trust are elected annually by the Board of
Trustees. Each officer holds the office until qualification of his successor.
The names and birthdates of the executive officers of the Trust and their
principal occupations during the last five years are as follows:
John F. Donahue
Federated Investors Tower
Pittsburgh, PA
Birthdate: July 28, 1924
Chairman and Trustee
Chairman and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; Chairman and Director, Federated Research
Corp. and Federated Global Research Corp.; Chairman, Passport Research, Ltd.;
Chief Executive Officer and Director or Trustee of the Funds. Mr. Donahue is the
father of J. Christopher
Donahue, Executive Vice President of the Trust.
Glen R. Johnson
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 2, 1929
President and Trustee
Trustee, Federated Investors; President and/or Trustee of some of the Funds;
staff member, Federated Securities Corp.
J. Christopher Donahue
Federated Investors Tower
Pittsburgh, PA
Birthdate: April 11, 1949
Executive Vice President
President OR EXECUTIVE VICE PRESIDENT OF THE FEDERATED FUND COMPLEX; DIRECTOR OR
TRUSTEE OF SOME OF THE FUNDS IN THE FEDERATED FUND COMPLEX; PRESIDENT AND
DIRECTOR, Federated Investors, INC.; PRESIDENT AND TRUSTEE, Federated Advisers,
Federated Management, and Federated Research; President and Director, Federated
Research Corp. and Federated Global Research Corp.; President, Passport
Research, Ltd.; Trustee, Federated Shareholder Services Company ; Director,
Federated Services Company. Mr. Donahue is the son of John F. Donahue, Chairman
and Trustee of the Trust.
Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
Executive Vice President
TRUSTEE OR DIRECTOR OF SOME OF THE FUNDS IN THE FEDERATED FUND COMPLEX;
PRESIDENT, EXECUTIVE VICE PRESIDENT AND TREASURER OF SOME OF THE FUNDS IN THE
FEDERATED FUND COMPLEX; VICE CHAIRMAN, FEDERATED INVESTORS, INC.; Vice
President, Federated Advisers, Federated Management, Federated Research,
Federated Research Corp., Federated Global Research Corp. and Passport Research,
Ltd.; Executive Vice President and Director, Federated Securities Corp.;
Trustee, Federated Shareholder Services Company.
John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 26, 1938
EXECUTIVE VICE PRESIDENT AND SECRETARY
EXECUTIVE VICE PRESIDENT AND SECRETARY OF THE FEDERATED FUND COMPLEX; Executive
Vice President, Secretary, AND DIRECTOR , Federated Investors, INC.; Trustee,
Federated Advisers, Federated Management, and Federated Research; Director,
Federated Research Corp. and Federated Global Research Corp.; Director,
Federated Services Company; Director, Federated Securities Corp.
WILLIAM D. DAWSON, III
FEDERATED INVESTORS TOWER
PITTSBURGH, PA
BIRTHDATE: MARCH 3, 1949
CHIEF INVESTMENT OFFICER
CHIEF INVESTMENT OFFICER OF THE TRUST AND VARIOUS OTHER FUNDS IN THE FEDERATED
FUND COMPLEX]; Executive Vice President , FEDERATED INVESTMENT COUNSELING,
FEDERATED GLOBAL RESEARCH CORP., FEDERATED ADVISERS, FEDERATED MANAGEMENT,
FEDERATED RESEARCH, 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 RESEARCH CORP., FEDERATED ADVISERS, FEDERATED MANAGEMENT, FEDERATED
RESEARCH, AND PASSPORT RESEARCH, LTD.
Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 17, 1923
Vice President
PRESIDENT OR VICE PRESIDENT OF SOME OF THE FUNDS IN THE FEDERATED FUND COMPLEX;
DIRECTOR OR TRUSTEE OF SOME OF THE FUNDS IN THE FEDERATED FUND COMPLEX;
Executive Vice President , Federated Investors, INC.; Chairman and Director,
Federated Securities Corp.
J. SCOTT ALBRECHT
FEDERATED INVESTORS TOWER
PITTSBURGH, PA
BIRTHDATE: JUNE 1, 1960
VICE PRESIDENT
VICE PRESIDENT OF FEDERATED MANAGEMENT; FORMERLY, ASSISTANT VICE PRESIDENT
OF FEDERATED MANAGEMENT.
RICHARD J. THOMAS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA
BIRTHDATE: JUNE 17, 1954
TREASURER
TREASURER OF THE FEDERATED FUND COMPLEX; VICE PRESIDENT - FUNDS FINANCIAL
SERVICES DIVISION, FEDERATED INVESTORS, INC.; 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 May 31, 1998.
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 Intermediate Municipal
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
February 3, 1999
<PAGE>
INTERMEDIATE MUNICIPAL TRUST
INVESTMENT ADVISER
FEDERATED MANAGEMENT
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
DISTRIBUTOR
FEDERATED SECURITIES CORP.
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
ADMINISTRATOR
FEDERATED SERVICES COMPANY
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Cusip
(_____/99)
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of
Federated Intermediate Municipal Trust (the "Fund"), the sole portfolio of
Intermediate Municipal Trust (the "Trust"), hereby appoint Patricia F. Conner,
Gail Cagney, Susan M. Jones and Ann M. Scanlon, or any one of them, true and
lawful attorneys, with the power of substitution of each, to vote all shares of
the Fund which the undersigned is entitled to vote at the Special Meeting in
lieu of Annual Meeting of Shareholders (the "Meeting") to be held on March 23,
1999, at 5800 Corporate Drive, Pittsburgh, Pennsylvania, at 12:00 Noon and at
any adjournment thereof.
The attorneys named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. Discretionary authority
is hereby conferred as to all other matters as may properly come before the
Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF INTERMEDIATE
MUNICIPAL TRUST. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED "FOR" THE PROPOSALS.
BY CHECKING THE BOX "FOR" BELOW, YOU WILL VOTE TO APPROVE EACH OF THE PROPOSED
ITEMS IN THIS PROXY, AND TO ELECT EACH OF THE NOMINEES AS TRUSTEES OF THE TRUST
FOR [ ]
PROPOSAL 1 TO ELECT THOMAS G. BIGLEY, JOHN T. CONROY, JR.,
JOHN F. CUNNINGHAM, PETER E. MADDEN, CHARLES F. MANSFIELD, JR.,
JOHN E. MURRAY, JR. AND JOHN S. WALSH AS TRUSTEES OF THE TRUST
FOR [ ]
AGAINST [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR" a
particular nominee, mark the "For All Except" box and
strike a line through the name of each nominee for
whom you are NOT voting. Your shares will be voted for
the remaining nominees.
PROPOSAL 2 TO RATIFY THE SELECTION OF ARTHUR ANDERSEN LLP AS THE TRUST'S
INDEPENDENT AUDITORS
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 3 TO MAKE CHANGES TO THE FUND'S FUNDAMENTAL INVESTMENT POLICIES:
3(A) TO APPROVE A REVISION IN THE FUND'S FUNDAMENTAL INVESTMENT
POLICY WITH REGARD TO DIVERSIFICATION OF ITS INVESTMENTS
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3(B) TO APPROVE MAKING NON-FUNDAMENTAL, AND AMENDING, THE FUND'S
POLICY REGARDING ACQUIRING SECURITIES TO EXERCISE CONTROL OF AN
ISSUER
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3(C) TO APPROVE MAKING NON-FUNDAMENTAL, AND AMENDING, THE FUND'S
AUTHORITY TO INVEST IN THE SECURITIES OF OTHER INVESTMENT
COMPANIES
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3(D) TO APPROVE A REVISION IN THE FUND'S FUNDAMENTAL INVESTMENT
POLICY REGARDING BORROWING TO PERMIT THE PURCHASE OF SECURITIES
WHILE BORROWINGS ARE OUTSTANDING
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 4 TO ELIMINATE CERTAIN OF THE FUND'S FUNDAMENTAL INVESTMENT POLICIES:
4(A) TO APPROVE REMOVING THE FUND'S FUNDAMENTAL
INVESTMENT POLICY ON INVESTING IN NEW ISSUERS FOR [
] AGAINST [ ] ABSTAIN [ ]
4(B) TO APPROVE REMOVING THE FUND'S FUNDAMENTAL
INVESTMENT POLICY REGARDING CONCENTRATION FOR [ ]
AGAINST [ ] ABSTAIN [ ]
4(C) TO APPROVE REMOVING THE FUND'S FUNDAMENTAL
INVESTMENT POLICY ON INVESTING IN OIL, GAS, AND
MINERALS FOR [ ] AGAINST [ ] ABSTAIN [ ]
PROPOSAL 5 TO APPROVE AN AMENDMENT AND RESTATEMENT TO THE TRUST'S
DECLARATION OF TRUST TO PERMIT THE BOARD OF TRUSTEES TO
LIQUIDATE ASSETS OF THE TRUST WITHOUT SEEKING
SHAREHOLDER APPROVAL
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
