SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN A PROXY STATEMENT
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 appropriate box:
X Preliminary proxy statement
Definitive proxy statement
Definitive additional materials
Solicitation material
Federated Municipal Trust (Name of Registrant as Specified in Its Charter)
Board of Trustees of Federated Municipal Trust (Name of Person(s) Filing Proxy
Statement)
Payment of filing fee (Check the appropriate box):
X $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
$500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
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 0-11:1
(4) Proposed maximum aggregate value of transaction:
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 number, or the form or
schedule and the date of its filing:
(1) Amount previously paid:
(2) Form, schedule or registration no.:
(3) Filing party:
(4) Date filed:
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P R E L I M I N A R Y C O P Y
CONNECTICUT MUNICIPAL CASH TRUST
FLORIDA MUNICIPAL CASH TRUST
NEW JERSEY MUNICIPAL CASH TRUST
Series of
FEDERATED MUNICIPAL TRUST
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held on July 31, 1996
To Our Shareholders:
A special meeting (the "Meeting") of the Shareholders of Connecticut
Municipal Cash Trust, Florida Municipal Cash Trust and New Jersey Municipal Cash
Trust (each a "Fund" and collectively, the "Funds"), each a series of Federated
Municipal Trust (the "Trust"), will be held on July 31, 1996, at 3:00 p.m.,
Eastern time, at the offices of the Trust, Federated Investors Tower,
Pittsburgh, PA 15222-3779, for the following purposes:
EACH FUND VOTING SEPARATELY
(1) To approve or disapprove an amendment to certain investment limitations
which will permit each Fund to invest all of its investable assets in a
series of a separate open-end management investment company (the
"Portfolio") having substantially the same investment objective, policies
and limitations as the Fund;
CONNECTICUT AND NEW JERSEY FUNDS VOTING SEPARATELY
(2) To approve or disapprove a proposal to change each Fund's fundamental
investment limitation on restricted securities and to make the amended
limitation a non-fundamental policy; and
EACH FUND VOTING SEPARATELY
(3) To consider and act upon any matters incidental to the foregoing purposes
or any of them, and any other matters which may properly come before the
Meeting or any adjourned session thereof.
The Board of Trustees has fixed June 5, 1996, as the record date for
determination of shareholders entitled to vote at the meeting.
By Order of the Trustees
John W. McGonigle
Secretary
June 10, 1996
SIGN, DATE AND RETURN THE ENCLOSED PROXY
PROMPTLY TO AVOID ADDITIONAL EXPENSE
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YOU CAN HELP THE TRUST AVOID THE NECESSITY AND EXPENSE OF SENDING FOLLOW-UP
LETTERS TO ENSURE A QUORUM BY PROMPTLY 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 MEETING.
THE ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
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CONNECTICUT MUNICIPAL CASH TRUST
FLORIDA MUNICIPAL CASH TRUST
NEW JERSEY MUNICIPAL CASH TRUST
Series of
FEDERATED MUNICIPAL TRUST
Federated Investors Tower
Pittsburgh, PA 15222-3779
PROXY STATEMENT
The enclosed Proxy Statement is solicited on behalf of the Board of
Trustees (the "Trustees") of Federated Municipal Trust (the "Trust"). The
proxies will be voted at the special meeting of shareholders of Connecticut
Municipal Cash Trust, Florida Municipal Cash Trust and New Jersey Municipal Cash
Trust (each a "Fund" and collectively, the "Funds"), each a series of the Trust,
to be held on July 31, 1996, at 3:00 p.m. (Eastern time) at the offices of the
Trust, Federated Investors Tower, Pittsburgh, PA 15222-3779 (such special
meeting and any adjournment or postponement thereof are referred to as the
"Meeting"). The proxy is revocable at any time before it is voted by sending
written notice of the revocation to the Trust or by appearing personally on July
31, 1996, at the Meeting. The cost of preparing and mailing the Notice of
Meeting, this proxy statement, proxy card, and any additional proxy material
will be borne by the Trust.
Proxy solicitations will be made primarily by mail, but may also be
made by telephone, telegraph, or personal interview conducted by certain
officers or employees of the Trust or of Federated Shareholder Services Company
(the Trust's transfer agent) or Federated Administrative Services (the Trust's
administrator). In the event that a Shareholder signs and returns the proxy
ballot but does not indicate a choice as to any of the items on the proxy
ballot, the proxy attorneys will vote those shares in favor of such proposal(s).
The purposes of the Meeting are set forth in the accompanying Notice of
Special Meeting of Shareholders. 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 June 10, 1996 to shareholders of record at the close of
business on June 5, 1996 (the "Record Date").
Only shareholders of record on the Record Date will be entitled to vote
at the Meeting. On the Record Date, the following shares of each Fund were
outstanding and entitled to vote at the Meeting:
Fund Number of Shares Outstanding
Connecticut Municipal Cash Trust -
Florida Municipal Cash Trust -
New Jersey Municipal Cash Trust -
(The shares of each Fund outstanding on the Record Date are referred to
individually as a "Share" and collectively as the "Shares"). Each Share is
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entitled to one vote, and fractional Shares are entitled to proportionate shares
of one vote. At the close of business on June 5, 1996, no person owned, to the
knowledge of management, 5% or more of the outstanding shares of the Funds. As
of the same date, no officer or Trustee of the Funds owned more than 1% of the
outstanding shares of the Funds.
For purposes of determining the presence of a quorum and counting votes
on the matters presented, Shares represented by abstentions and "broker
non-votes" will be counted as present, but not as votes cast, at the Meeting.
Under the Trust's Declaration of Trust, the vote required will be determined
with reference to a percentage of votes cast at the Meeting. Under the
Investment Company Act of 1940, as amended (the "1940 Act"), the affirmative
vote necessary to approve other matters may be determined with reference to a
percentage of votes present at the Meeting, which would have the effect of
treating abstentions and non-votes as if they were votes against the proposal.
Approval by the shareholders of a Fund of Proposal 1 and Proposal 2
requires the affirmative "vote of a majority of the outstanding voting
securities" (as defined in the 1940 Act) of the Fund. Under the 1940 Act, this
means that to be approved, each Proposal must receive the affirmative vote of
the lesser of (a) 67% of the Shares of a Fund (all classes voting together)
present at this Meeting, if the holders of more than 50% of the outstanding
Shares of the Fund are present or represented by proxy, or (b) more than 50% of
the outstanding Shares of the Fund.
The Trust will furnish, without charge, a copy of the annual report and
most recent semi-annual report succeeding the annual report, if any, to any
Shareholder of record of the Trust upon request. To request an annual and/or
semi-annual report, call 1-800-235-4669, or send a written request to Betsy
Hamilton at Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh,
Pennsylvania 15222-3779.
It is essential that shareholders complete, date and sign the enclosed
proxy card.
In order that your Shares may be represented at the Meeting, you are
requested to:
- indicate your instructions on the enclosed proxy card;
- date and sign the proxy card;
- mail the proxy card promptly in the enclosed envelope, which requires
no postage if mailed in the United States; and
- allow sufficient time for the proxy card to be received by 3:00 p.m. on
July 31, 1996.
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PROPOSAL 1: TO APPROVE OR DISAPPROVE THE AMENDMENT TO CERTAIN OF THE FUNDAMENTAL
INVESTMENT POLICIES
Summary
At a meeting on April 2, 1996, the Trustees of the Trust approved, and
are submitting to the shareholders of each Fund for approval, the adoption and
implementation of a new investment policy for each Fund and the amendment of
certain of the Funds' investment limitations to permit a Fund to invest all of
its investable assets ("Assets") in a corresponding series of a separate
registered investment company (a "Portfolio") each having substantially the same
investment objective, policies and restrictions as the corresponding Fund as
follows:
Fund Corresponding Portfolio
Connecticut Municipal Cash Trust Connecticut Municipal Money Market Portfolio
Florida Municipal Cash Trust Florida Municipal Money Market Portfolio
New Jersey Municipal Cash Trust New Jersey Municipal Money Market Portfolio
Each of the Portfolios described above is a series of Federated
Investment Portfolios, (the "Portfolio Trust"), an open-end, management
investment company under the 1940.
The amendment to certain of the fundamental investment policies of each
Fund are subject to approval by the respective Fund's shareholders. If this
Proposal is approved by a Fund's shareholders, the Trustees intend to invest all
the respective Fund's Assets in the corresponding Portfolio, thereby converting
each Fund to the Hub and Spoke(R) master-feeder fund structure1 (the "Hub and
Spoke(R) Structure"). For purposes of this proxy statement, a Fund that has
converted to the Hub and Spoke(R) Structure, the Fund is referred to as a
"Spokesm Fund."
The Trustees of the Trust recommend that shareholders of each Fund vote
to approve this Proposal 1. The Trustees believe that each Fund's conversion to
the Hub and Spoke(R) Structure will be advantageous to the shareholders of the
Funds in several respects. Please see "Recommendation of the Board of Trustees"
on page __ of this Proxy Statement for a discussion of the Trustees'
recommendation.
New Investment Policy
The Trustees recommend that the shareholders of each Fund approve the
amendment to certain of the fundamental investment policies. Each Portfolio is a
series of the Portfolio Trust, an open-end management investment company
registered under the 1940 Act. Each Portfolio has substantially the same
- - - ----------------------
1 Hub and Spoke(R) is a service mark registered with the U.S. Patent and
Trademark Office and "HUB(sm)" and "SPOKE(sm)" each, individually, is a service
mark of Signature Financial Group, Inc. ("Signature"). These terms pertain only
to the Hub and Spoke U.S. master-feeder investment fund structure and the Hub
and Spoke U.S. on shore/off shore master feeder investment fund structure and do
not pertain to the Global Hub and Spoke(sm) structure created by Signature.
3
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investment objective, policies and limitations as the corresponding Fund does
currently. Federated Management ("Federated Management" or the "Adviser"),
located at Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779,
currently serves as each Fund's investment adviser and will serve as each
Portfolio's investment adviser. Federated Management will, in turn, resign as
investment adviser to the Funds upon each Fund's conversion to the Hub and
Spoke(R) Structure. By investing in the corresponding Portfolio, a Spokesm Fund
would seek its investment objective through its investment in the Portfolio,
rather than through direct investments in securities. The Portfolio in turn
would invest in securities in accordance with its investment objective, policies
and limitations. The investment limitations and policies of each Portfolio are
such that the Portfolio may not currently invest in any security or engage in
any transaction which is not currently permitted by the investment limitations
and policies of the corresponding Fund. Interests in each Portfolio are not
available for purchase directly by members of the general public.
The approval by shareholders of a Fund of this Proposal will authorize
the Trustees of the Trust to implement the Fund's conversion to the Hub and
Spoke(R) Structure. If this Proposal is approved by the shareholders of a Fund
and the Trustees are satisfied with certain tax matters discussed below, the
Trustees of the Trust intend to convert the Florida Municipal Cash Trust and the
New Jersey Municipal Cash Trust to the Hub and Spoke(R) Structure on or about
August 1, 1996 or such later date as the Board may approve. The Trustees of the
Trust intend to convert the Connecticut Municipal Cash Trust upon receipt of a
favorable tax ruling from the State of Connecticut stating that conversion to
the Hub and Spoke(R) Structure will not effect the tax exempt status of the
income paid to Fund shareholders.
The Trustees of the Trust expect to implement the Funds' conversion to
the Hub and Spoke(R) Structure by causing each Fund to exchange all of its
Assets (securities and cash) as well as certain other assets (including
receivables for securities sold and interest on securities) for an interest in
the corresponding Portfolio. The value of a shareholder's investment in a
Spokesm Fund will be the same immediately before and after the Spokesm Fund's
investment in the corresponding Portfolio.
Each Spokesm Fund would be able to withdraw its investment in the
corresponding Portfolio at any time if the Trustees of the Trust determine that
it is in the best interests of a Spokesm Fund to do so. Upon any such
withdrawal, the Trustees would consider what action might be taken, including
investing all of the Assets of the Spokesm Fund in another pooled investment
entity having substantially the same investment objective as the Spokesm Fund or
the retention of an investment adviser to manage the Fund's assets in accordance
with its investment objective and policies (as is presently the case).
Investment Advisory and Other Services
The Board of Trustees of the Trust has, subject to shareholder approval
of this Proposal 1, approved a revised contract structure for the Funds. In
addition, the conversion to the Hub and Spoke(R) Structure will require certain
4
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other changes in the current contract structure. These changes are described
below.
Following the conversion to the Hub and Spoke(R) Structure, the total
aggregate corresponding expense ratio of each Spokesm Fund and the Portfolio (in
terms of average daily net assets of the Fund) shall, after fee waivers, remain
identical to the current annual expense ratios, after fee waivers, of the Fund.
Federated Management has agreed to voluntarily partially waive its fees in order
to keep current annual expense ratios identical.
Because a Spokesm Fund invests all of its Assets in the corresponding
Portfolio, the Spokesm Fund would no longer directly require investment advisory
services. For this reason, if shareholders approve Proposal 1, and the Fund
invests all of its Assets in the corresponding Portfolio, the Fund will
terminate its investment advisory agreement with the Adviser. The investment
advisory function will then be performed by the Adviser under a substantially
identical investment advisory contract with the corresponding Portfolio. Each
Portfolio's investment advisory fee will be identical to the corresponding
Fund's current contractual advisory fee. Each Spokesm Fund will, therefore,
indirectly bear its proportionate share of the advisory fees paid by the
corresponding Portfolio pursuant to its investment advisory agreement with the
Adviser.
Pursuant to the Portfolios' investment advisory agreement, the Portfolio
is obligated to pay the Adviser an annual fee at the following percentages of
the respective Portfolio's average daily net assets: Connecticut Municipal Money
Market Portfolio -- 0.50%; Florida Municipal Money Market Portfolio -- 0.40%;
and New Jersey Municipal Money Market Portfolio -- 0.40%.
Federated Administrative Services (the "Portfolio Administrator") will
provide the Portfolio Trust with administrative personnel and services under an
administrative services agreement. For these services, the Portfolio is
obligated to pay the Portfolio Administrator a fee from each Portfolio equal on
an annual basis up to 0.05% of the Portfolio's average daily net assets, plus
certain out-of-pocket expenses.
Upon exchange of its Assets for an interest in the corresponding
Portfolio, each Spokesm Fund will retain the services of Federated Services
Company ("Federated Services") under a master services agreement. Under the
master services agreement, Federated Services will provide each Spokesm Fund
with portfolio accounting, transfer agency, fund administration and compliance
services. For these services, the Spokesm Fund is obligated to pay Federated
Services fee equal on an annual basis to 0.35% of that Fund's average daily net
assets. Federated Management and Federated Services have voluntarily agreed to
partially waive their fees to reduce the aggregate annual operating expenses
(excluding brokerage commissions, taxes and extraordinary expenses) of each Fund
and the corresponding Portfolio, respectively, such that, following such
waivers, "Total Operating Expenses" will remain identical to "Total Operating
Expenses" in effect immediately prior to the Funds' conversion to the Hub and
Spoke(R) Structure.
5
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In addition, upon conversion of the Funds to the Hub and Spoke(R)
Structure, Federated Securities Corp. ("Federated Securities") will continue
serve as the Spokesm Funds' principal distributor. Federated Securities, a
subsidiary of Federated Investors, is located at Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779.
Comparative Expenses
The following table shows the actual expenses of each Fund for the
fiscal year ended October 31, 1995, a pro forma adjustment thereof assuming that
the Spokesm Fund had invested all of its Assets in the corresponding Portfolio
for the entire period then ended and an example. The pro forma adjustment 22
includes the estimated costs of converting the Funds to the Hub and Spoke(R)
Structure and the estimated costs of this proxy solicitation. The pro forma
adjustment assumes that: (i) there were no holders of interests in each
Portfolio other than the corresponding Spokesm Fund; and (ii) the average daily
net assets of each Spokesm Fund and its corresponding Portfolio were equal to
the actual average daily net assets of the respective Fund during the period.
Connecticut Municipal Cash Trust - Institutional
Service Shares
Actual Fund
Expenses
-----------------
Annual Operating Expenses
Management fee (after waiver)................................. 0.31%
12b-1 Fee..................................................... None
Total other expenses.......................................... 0.26%
Shareholder Services Fee (after
waiver).................................................. 0.14%
Other expenses............................................. 0.15%
Total Operating Expenses (after
waiver)..................................................... 0.60%
Pro Forma Expenses (assuming that the average
daily net assets invested by the Fund in the
Portfolio were $______)
Annual Operating Expenses
Management fee (after waiver)................................. 0.24%
12b-1 Fee..................................................... None
Total other expenses.......................................... 0.36%
Shareholder Services Fee (after
waiver).................................................. 0.15%
Total Operating Expenses (after
waiver)..................................................... 0.60%
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<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1 year 3 years 5 years 10 years
------- ------- -------- ---------
EXAMPLE:
You would pay the following expenses on a
$1,000 investment, assuming (1) 5% annual return and
(2) redemption at the end of each time period......................... $6 $19 $33 $75
</TABLE>
The above example should not be considered a representation of past or
future expenses. Actual expenses may be greater or less than those shown.
Florida Municipal Cash Trust - Cash II Shares
Actual Fund
Expenses
--------------
Annual Operating Expenses
Management fee (after waiver)................................. 0.00%
12b-1 Fee..................................................... 0.14%
Total other expenses.......................................... 0.51%
Shareholder Services Fee (after
waiver).................................................. 0.25%
Total Operating Expenses (after
waiver)..................................................... 0.65%
Pro Forma Expenses (assuming that the average
daily net assets invested by the Fund in the
Portfolio were $__)
Annual Operating Expenses
Management fee (after waiver)................................. 0.19%
12b-1 Fee..................................................... 0.10%
Total other expenses.......................................... 0.36%
Shareholder Services Fee (after
waiver).................................................. 0.25%
Total Operating Expenses (after
waiver)..................................................... 0.65%
1 year 3 years
---------- ---------
EXAMPLE:
You would pay the following expenses on a
$1,000 investment, assuming (1) 5% annual return and
(2) redemption at the end of each time period...... $7 $21
The above example should not be considered a representation of past or
future expenses. Actual expenses may be greater or less than those shown. This
example is based on estimated data for Cash II Shares fiscal year ending October
31, 1996.
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Florida Municipal Cash Trust - Institutional Shares
Actual Fund
Expenses
-----------
Annual Operating Expenses
Management fee (after waiver)................................. 0.00%
12b-1 Fee..................................................... 0.00%
Total other expenses.......................................... 0.49%
Shareholder Services Fee (after
waiver).................................................. 0.20%
Total Operating Expenses (after
waiver)..................................................... 0.49%
Pro Forma Expenses (assuming that the average
daily net assets invested by the Fund in the
Portfolio were $______)
Annual Operating Expenses
Management fee (after waiver)................................. 0.19%
12b-1 Fee..................................................... None
Total other expenses.......................................... 0.30%
Shareholder Services Fee (after
waiver).................................................. 0.19%
Total Operating Expenses (after
waiver)..................................................... 0.49%
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1 year 3 years 5 years 10 years
------- -------- -------- --------
EXAMPLE:
You would pay the following expenses on a
$1,000 investment, assuming (1) 5% annual return
and (2) redemption at the end of each time period.. $5 $16 $27 $62
</TABLE>
The above example should not be considered a representation of past or
future expenses. Actual expenses may be greater or less than those shown.
New Jersey Municipal Cash Trust - Institutional Shares
Actual Fund
Expenses
-----------
Annual Operating Expenses
Management fee (after waiver)................................. 0.19%
12b-1 Fee..................................................... None
Total other expenses.......................................... 0.36%
Shareholder Services Fee (after
waiver).................................................. 0.05%
Total Operating Expenses (after
waiver)..................................................... 0.55%
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Pro Forma Expenses (assuming that the average
daily net assets invested by the Fund in the
Portfolio were $______)
Annual Operating Expenses
Management fee (after waiver)................................. 0.18%
12b-1 Fee..................................................... None
Total other expenses.......................................... 0.37%
Shareholder Services Fee (after
waiver).................................................. 0.05%
Total Operating Expenses (after
waiver)..................................................... 0.55%
<TABLE>
<S>
<C> <C> <C> <C>
1 year 3 years 5 years 10 years
--------- --------- -------- ----------
EXAMPLE:
You would pay the following expenses on a
$1,000 investment, assuming (1) 5% annual return and
(2) redemption at the end of each time period........................ $6 $18 $31 $69
</TABLE>
The above example should not be considered a representation of past or
future expenses. Actual expenses may be greater or less than those shown.
New Jersey Municipal Services - Institutional Service
Shares
Actual Fund
Expenses
-----------
Annual Operating Expenses
Management fee (after waiver)................................. 0.19%
12b-1 Fee..................................................... 0.00%
Total other expenses.......................................... 0.46%
Shareholder Services Fee (after
waiver).................................................. 0.15%
Total Operating Expenses (after
waiver)..................................................... 0.65%
Pro Forma Expenses (assuming that the average
daily net assets invested by the Fund in the
Portfolio were $______)
Annual Operating Expenses
Management fee (after waiver)................................. 0.18%
12b-1 Fee..................................................... 0.00%
Total other expenses.......................................... 0.47%
Shareholder Services Fee (after
waiver).................................................. 0.15%
Total Operating Expenses (after
waiver)..................................................... 0.65%
9
<PAGE>
<TABLE>
<S>
<C> <C> <C> <C>
1 year 3 years 5 years 10 years
--------- --------- --------- ---------
EXAMPLE:
You would pay the following expenses on a
$1,000 investment, assuming (1) 5% annual return and
(2) redemption at the end of each time period...................... $7 $21 $36 $81
</TABLE>
The above example should not be considered a representation of past or
future expenses. Actual expenses may be greater or less than those shown.
Assuming that each Spokesm Fund was the only holder of an interest in
the corresponding Portfolio and that each Spokesm Fund was fully invested
therein, the net asset value per share, distributions per share and net
investment income per share of each Spokesm Fund would have been approximately
the same on a pro forma basis as the actual net asset value, distributions and
net investment income per share of the respective Fund during the period
indicated.
Waiver. Federated Management and Federated Services have voluntarily
agreed to partially waive their fees to reduce the aggregate annual operating
expenses (excluding brokerage commissions, taxes and extraordinary expenses) of
each Fund and the corresponding Portfolio, respectively, such that, following
such waivers, "Total Operating Expenses" will remain identical to "Total
Operating Expenses" in effect immediately prior to the Funds' conversion to the
Hub and Spoke(R) Structure. In the absence of this waiver, Other Expenses and
Total Fund Operating Expenses in the aggregate are estimated on a pro forma
combined basis to be as follows: Connecticut Municipal Cash Trust Institutional
Service Shares -- 1.15%; Florida Municipal Cash Trust - Cash II Shares -- 1.30%;
Florida Municipal Cash Trust - Institutional Shares -- 1.05; New Jersey
Municipal Cash Trust - Institutional Shares -- 1.05%; and New Jersey Municipal
Cash Trust - Institutional Service Shares -- 1.15%. This waiver will not be
terminated without approval of the Board of Trustees of both the Portfolio Trust
and the Trust.
Tax Considerations
The Trust will apply for a ruling from the Internal Revenue Service
("IRS") to the effect that its contribution of each Fund's assets to the
corresponding Portfolio in exchange for an interest in the corresponding
Portfolio will not result in the recognition of gain or loss to the respective
Fund for federal income tax purposes. Management of the Trust currently intends
to proceed with these contributions only upon the issuance of a favorable ruling
by the IRS or the availability of an opinion of tax counsel with respect to the
matters requested in such ruling. There can be no assurance that the ruling will
be issued or such an opinion will be available.
As a regulated investment company under the Internal Revenue Code of
1986, as amended (the "Code"), each Fund does not pay federal income or excise
taxes
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to the extent that the Fund distributes to shareholders its net investment
income and net realized capital gains in accordance with the timing requirement
imposed by the Code. Under current law, so long as a Fund qualifies as a
regulated investment company for federal income tax purposes, the Fund is not
liable for any income, corporate excise or franchise taxes in the Commonwealth
of Massachusetts. The Portfolios are organized and intend to conduct their
operations in a manner such that they also will not be required to pay any
federal or Massachusetts income or excise taxes.
All Funds will apply for a tax ruling from each of their respective
states seeking a ruling that the Hub and Spoke(R) Structure will not affect the
tax exempt status of income paid to a Fund shareholder. Furthermore, each Fund's
conversion to the Hub and Spoke(R) Structure will be contingent upon receiving
these tax rulings.
Description of the Portfolios
The Portfolio Trust is a business trust organized under the laws of the
Commonwealth of Massachusetts on September 29, 1995. The investment objective of
each Portfolio is the same as the investment objective of the corresponding
Spokesm Fund. Each Portfolio seeks to achieve its investment objective through
investments limited to the types of securities in which the corresponding Fund
is authorized to invest. The investment limitations and policies of each
Portfolio are such that the Portfolio may not invest in any security or engage
in any transaction which is not currently permitted by the investment
limitations and policies of the corresponding Spokesm Fund.
The investment objective of each Portfolio, and certain other
investment policies and limitations are fundamental and, as such, cannot be
changed without investor approval. The approval of the Portfolios' investors
(i.e., the Spokesm Funds and other holders of interests in the corresponding
Portfolio) would be required to change any of the Portfolios' fundamental
investment policies or restrictions; however, any change in nonfundamental
investment policies or restrictions would not require such approval. In all
cases, the Trustees of the Portfolio Trust must approve changes in the
investment objective and the investment policies and restrictions.
Each Portfolio attempts to enable the corresponding Fund to stabilize
its net asset value at $1.00 by valuing the Portfolio's securities using the
amortized cost method. Like the Funds, each Portfolio determines its net asset
value on each day on which the New York Stock Exchange is open. Each Portfolio's
and the corresponding Spokesm Fund's net asset value is determined at 12:00
noon, 1:00 p.m. (Eastern time) and as of the close of trading (normally 4:00
p.m., Eastern time) on the New York Stock Exchange, Monday through Friday,
except on New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. Each
Portfolio's net asset value is computed by determining the value of each
Portfolio's total assets (the securities it holds plus any cash or other assets,
including interest accrued but not yet received), and subtracting all of the
Portfolio's liabilities (including accrued expenses). Each Spokesm Fund's net
asset value per share is calculated
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by determining the value of each Spokesm Fund's assets (e.g., its investment in
the corresponding Portfolio and other assets), subtracting all of the Spokesm
Fund's liabilities (including accrued expenses), and dividing the result by the
total number of shares outstanding at such time.
Interests in the Portfolio Trust have no preemptive or conversion
rights, and are fully paid and non-assessable. The Portfolio Trust normally will
not hold meetings of holders of such interests except as required under the 1940
Act. The Portfolio Trust would be required to hold a meeting of holders in the
event that at any time less than a majority of its Trustees holding office have
been elected by holders. The Trustees of the Portfolio Trust continue to hold
office until their successors are elected and have qualified. Holders holding
10% or more of the net asset value of the Portfolio Trust may call a meeting of
holders in the Portfolio Trust for the purpose of removing any Trustee. A
Trustee of the Portfolio Trust may be removed upon a majority vote of the
interests held by holders in the Portfolio Trust qualified to vote in the
election. The 1940 Act requires the Portfolio Trust to assist its holders in
calling such a meeting. Upon liquidation of a Portfolio, holders in the
Portfolio would be entitled to share pro rata in the net assets of the Portfolio
available for distribution to holders.
Each holder in a Portfolio is entitled to a vote in proportion to its
percentage interest in that Portfolio. Except as described below, whenever a
Spokesm Fund is requested to vote on matters pertaining to its corresponding
Portfolio, the Spokesm Fund will request instructions from its shareholders and
will cast its votes proportionately as instructed. Shareholders who do not
provide instructions will not affect the Spokesm Fund's votes at the
corresponding Portfolio's meeting. The percentage of a Spokesm Fund's votes
representing Spokesm Fund shareholders not voting will be voted by the Trustees
of the Trust in the same proportion as the Spokesm Fund shareholders who provide
instructions.
Subject to applicable statutory and regulatory requirements, a Spokesm
Fund would not be required to request instructions of their respective
shareholders with respect to (a) any proposal relating to the corresponding
Portfolio, which proposal, if made with respect to the Spokesm Fund, would not
require the vote of the shareholders of the Spokesm Fund, or (b) any proposal
with respect to the corresponding Portfolio that is identical in all material
respects to a proposal that has previously been approved by shareholders of the
Fund. Any proposal submitted to holders in a Portfolio that does not require
instructions from shareholders of the corresponding Fund would nonetheless be
voted on by the Trustees of the Portfolio Trust.
If the Portfolio is successful in attracting additional investment
vehicles, the smaller funds investing in the Portfolio may be materially
affected by the actions of larger funds investing in the Portfolio. For example,
if a large Spokesm Fund withdraws from the Portfolio, the remaining Spokesm
Funds may experience higher pro rata operating expenses thereby producing lower
returns. Additionally, the Portfolio may become less diverse, resulting in
increased portfolio risk. Also, Spokesm Funds with a greater pro rata ownership
in the Portfolio could have effective voting control over operations of the
Portfolio.
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While the Fund is expected to be the largest investment vehicle in the Portfolio
for the foreseeable future, there is no assurance that it will remain so.
Investments in the Portfolios may not be transferred, but a holder may
withdraw all or any portion of its investment at any time at net asset value.
Each holder in a Portfolio, including the corresponding Fund, will be liable for
the obligations of the Portfolio up to the amount of its interest in the
Portfolio. In addition, holders in a Portfolio may be held liable as partners
for the Portfolio's obligations. However, because the Portfolio Trust's
declaration of trust disclaims holder liability and provides for indemnification
against such liability, the risk of a holder in a Portfolio incurring financial
loss on account of such liability is limited to circumstances in which both
inadequate insurance existed and the corresponding Portfolio itself was unable
to meet its obligations. As such, it is unlikely that a Spokesm Fund would
experience liability from the new investment structure itself. In any event,
shareholders of a Spokesm Fund will continue to remain shareholders of a
Massachusetts business trust, and the risk of such a person incurring liability
as a shareholder of a Spokesm Fund is considered to be remote.
The Portfolio Trust has its own Board of Trustees, including a majority
of Trustees who are not "interested persons" (as defined in the 1940 Act) of the
Portfolio Trust (the "Portfolio Independent Trustees"). The Trustees of the
Portfolio Trust are the same individuals who presently serve as Trustees of the
Trust with the exception of J. Christopher Donahue, Trustee and President of the
Portfolio Trust and Glen R. Johnson, Trustee and President of the Trust.
Proposed Amendment of Investment Limitations
The Trustees have approved, subject to shareholder approval, a general
exception to all of the fundamental investment limitations of each Fund to
permit the Fund to invest all of its Assets in the corresponding Portfolio.
Certain of each Fund's fundamental and non-fundamental investment limitations
may be deemed to prohibit the Fund from seeking its investment objective by
investing all of its Assets in the corresponding Portfolio.
The investment limitations for each Fund would be amended to provide
that the current investment limitations apply "(except that the Fund may invest
substantially all of its assets (other than assets which are not "investment
securities," as defined in the 1940 Act, or are excepted by the SEC) in an
open-end management investment company (or series thereof) with substantially
the same investment objective as the Fund)."
Shareholder approval is required to amend the designated fundamental
investment limitations. Only Trustee approval is required to amend the
designated non-fundamental investment limitations. However, as a practical
matter, the non-fundamental limitations will be amended only if the shareholders
approve the amendments to the fundamental limitations.
13
<PAGE>
Recommendation of the Board of Trustees
The Trustees of the Trust recommend that shareholders of each Fund vote
to approve this Proposal 1. The Trustees believe, based primarily on their
discussions with the Adviser, that the Hub and Spoke(R) Structure will permit
other investment vehicles (for example, other mutual funds, common and
collective funds, etc.) having different distribution arrangements to invest in
the Portfolios. Since certain of these other vehicles would not otherwise invest
in the Funds under their current structure due to tax and other reasons, but
could invest with the Funds in the Portfolios, the Trustees believe that
additional assets should be attracted to each Portfolio, thus increasing the
Portfolio's asset base. This anticipated larger asset base will be advantageous
to the shareholders of the Fund in several respects. The following and other
factors were considered by the Board in recommending the proposed conversion to
the Hub and Spoke(R) Structure.
First, to the extent that a Portfolio can increase its asset base over
the current size of the corresponding Fund by attracting new investment vehicles
that otherwise could not invest in the Fund, greater diversification of the
Portfolios investment portfolio can be achieved than is currently possible for
the Fund. Greater diversification is expected to be beneficial to shareholders
of a Fund and other investors in the corresponding Portfolio because it may
minimize the impact that the adverse performance of any one portfolio security
may have on the performance of the entire investment portfolio.
Second, the larger anticipated size of the Portfolio would permit the
purchase of investments in larger denominations than the corresponding Fund may
otherwise be able to purchase. This may result in a Portfolio purchasing
investments at more advantageous prices. Although greater diversification can
also minimize the positive impact of the performance of any one investment
portfolio, it has the overall potential to minimize value fluctuations and
smooth out performance of the overall portfolio.
Although these benefits could be realized by the direct growth of a
Fund's assets, the Trustees believe that growth is more likely to be achieved
through investments in the corresponding Portfolio by entities in addition to
the Fund. There can, however, be no assurance that either an increase in assets
of the Portfolio or the benefits described above will be realized and no such
benefits are anticipated until other investors invest their Assets in the
Portfolio.
The Trustees have been advised about other investors that are
interested in investing in the Portfolios. While such investments are
anticipated, they cannot be assured. However, the Trustee's decision to
recommend shareholder approval of the proposed conversion of the Fund to a Hub
and Spoke(R) Structure is premised on the expectation of additional investors in
the Portfolios.
The Trustees also recognize that the Adviser may benefit from the
proposed Hub and Spoke(R) Structure because such structure may enable the
Adviser to increase its assets under management through additional investors
investing in the Portfolio. These additional investors may include other
investment companies or other collective investment vehicles advised by the
Adviser. However, this
14
<PAGE>
benefit would be enjoyed by the Adviser if assets in the Funds were increased
under the current structure. In addition, the Adviser has voluntarily agreed to
reduce its fees and reimburse certain Portfolio expenses to maintain the
aggregate operating expenses of the Fund at the same level before and after the
proposed conversion.
The Trustees believe that over time the aggregate operating expenses of
each Spokesm Fund and the corresponding Portfolio should not be more than the
expenses that would be incurred by the Fund if it continued to retain the
services of an investment adviser and invested directly in securities, although
there can be no assurance that any expense savings will be realized. While the
Hub and Spoke(R) Structure does not require certain of the same services to be
provided for the Spokesm Fund and the Portfolio (such as administration,
accounting and legal compliance, but not advisory services), the Trustees have
considered this in light of the action by Federated Services and Federated
Management to voluntarily limit the aggregate operating expenses (as declared
above) of the Fund and its corresponding Portfolio to maintain the same
aggregate expense ratio after the conversion.
The Trustees also considered risks associated with an investment in the
Portfolios. The Trustees believe that the Portfolios' investment policies and
limitations involve substantially the same risks as are associated with the
Funds' direct investment in securities.
In recommending that the shareholders authorize the conversion of the
Funds to the Hub and Spoke(R) Structure, the Trustees have taken into account
and evaluated the possible effects that increased assets in the Portfolios may
have on the expense ratio of the corresponding Spokesm Fund and have considered
the expense limitation, described above, voluntarily agreed to by Federated
Services and Federated Management. After carefully weighing the costs involved
against the anticipated benefits of converting the Funds to the Hub and Spoke(R)
Structure, the Trustees recommend that the shareholders of each Fund vote to
approve Proposal 1.
Based on their consideration, analysis and evaluation of the above
factors and other information deemed by them to be relevant to this Proposal,
the Trustees (including the Trustees who are not "interested persons" as defined
in the 1940 Act) have concluded that it would be in the best interests of each
Fund and its shareholders to approve the adoption and implementation of the
amendment to the fundamental investment limitations to enable the Fund to invest
all of its respective Assets in the corresponding Portfolio.
In the event the shareholders of a Fund fail to approve this Proposal,
the Trustees would continue to retain Federated Management as the investment
adviser for the Fund to manage the Fund's assets through directly investing in
securities, and the advisory agreement with Federated Management would continue
in effect in its current form.
THE BOARD OF TRUSTEES RECOMMENDS THAT THE SHAREHOLDERS APPROVE THE AMENDMENT
OF CERTAIN FUNDAMENTAL INVESTMENT LIMITATIONS
15
<PAGE>
PROPOSAL 2: APPROVAL OR DISAPPROVAL OF CHANGING EACH FUND'S FUNDAMENTAL
INVESTMENT LIMITATION ON RESTRICTED SECURITIES TO A NON-FUNDAMENTAL INVESTMENT
LIMITATION
The Connecticut Municipal Cash Trust and the New Jersey Municipal Cash
Trust currently have a fundamental investment limitation, which may only be
changed with Shareholder approval, limiting investments in securities subject to
restriction on resale under the Securities Act of 1933 ("Restricted Securities")
to 10% of each Fund's net assets. In addition, each Fund has a non-fundamental
investment policy that limits its investments in illiquid securities, including
certain Restricted Securities not determined by the Trustees of the Trust to be
liquid, non-negotiable time deposits, and repurchase agreement providing for
settlement in more than seven days after notice, to 10% of its net assets. Both
of these investment limitations reflect the long-standing policy of the
Securities and Exchange Commission (the "Commission") that mutual funds, such as
the Funds, should maintain a high level of liquid assets to meet redemption
re22quests from shareholders.
The Funds' current investment limitations are redundant insofar as the
Commission has traditionally treated all Restricted Securities (other than Rule
144A securities deemed by the Board to be liquid) as illiquid. Thus, any
security (other than such Rule 144A securities) subject to a Fund's fundamental
investment limitation on Restricted Securities is also subject to the investment
limitation on illiquid securities. The limitation on illiquid securities is
generally more restrictive, however, since it also counts illiquid securities
that are not Restricted Securities against the 10% limitation. The Commission
has defined an illiquid security as "any asset which may not be sold or disposed
of in the ordinary course of business within seven days at approximately the
value at which the mutual fund has valued the investment."
At a meeting on April 2, 1996, the Trustees adopted a non-fundamental
investment limitation, which may be changed without Shareholder approval, on
restricted securities. The effect of this change is to combine the investment
limitations on restricted and illiquid securities into one non-fundamental
investment limitation. The amended limitation reads as follows:
The Fund will limit investments in illiquid securities, including
certain restricted securities not determined by the Trustees to be
liquid, non-negotiable time deposits, and repurchase agreements
providing for settlement in more than seven days after notice, to 10%
of its net assets.
The proposed change to the fundamental investment limitations will not
affect the Funds' ability to purchase Restricted Securities eligible for resale
under Rule 144A of the Securities Act of 1933 without limit, provided that they
satisfy the criteria for liquidity established by the Trustees. The Trustees'
current guidelines require the Adviser to consider the following factors in
determining the liquidity of such securities:
1. The frequency of trades and quotes for the security;
2. The volatility of quotations and trade prices for the security;
16
<PAGE>
3. The number of dealers willing to purchase or sell the security and
the number of potential purchasers;
4. Dealer undertakings to make a market in the security;
5. The nature of the security and the nature of the marketplace trades
(e.g., the time needed to dispose of the security, the method of
soliciting offers, and the mechanics of transfer);
6. The rating of the security and the financial condition and prospects
of the issuer of the security; and
7. Such other factors as may be relevant to the Funds' ability to
dispose of the security.
The guidelines also require that the Adviser reasonably expect that the
security will maintain its liquidity throughout the time the instrument is held
by each Fund.
The change to the fundamental limitations on Restricted Securities will
also allow a Fund to invest up to 10% of its net assets in Restricted Securities
that do not meet the criteria established by the Trustees' guidelines and other
illiquid securities.
In the event the Shareholders fail to approve this change to a Fund's
fundamental investment limitations, the Trustees will consider whether to amend,
subject to Shareholder approval, the investment limitation on Restricted
Securities to reflect the changes to the Commission's policies or to continue to
operate under the present fundamental investment limitations.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS APPROVE THE CHANGE TO THE
FUNDS' FUNDAMENTAL INVESTMENT
LIMITATIONS ON RESTRICTED SECURITIES.
17
<PAGE>
ADDITIONAL INFORMATION
The Trust is not required, and does not intend, to hold 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 Federated Municipal Trust, Federated Investors Tower,
Pittsburgh, PA 15222-3779, 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 Funds.
Proxies, Quorum and Voting at the Meeting
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, the persons named as proxies will vote the shares represented thereby in
favor of the matters set forth in the attached Notice.
In the event that, at the time any session of the Meeting is called to
order, a quorum is not present at the Meeting, or in the event that a quorum is
present at the Meeting but sufficient votes to approve any of the proposals are
not received, the persons named as proxies may propose one or more adjournments
of the Meeting (with respect to all or some of the proposals) to permit further
solicitation of proxies. Any such adjournment will require the affirmative vote
of a majority of those Shares affected by the adjournment represented at the
Meeting in person or by proxy. If a quorum is present, the persons named as
proxies will vote those proxies which they are entitled to vote FOR all such
proposals in favor of such an adjournment, and will vote those proxies required
to be voted AGAINST any such proposal against any adjournment. A shareholder
vote may be taken on one or more of the proposals in this Proxy Statement prior
to any such adjournment if sufficient votes have been received for approval.
Under the Declaration of Trust of the Trust, a quorum is constituted by the
presence in person or by proxy of the holders of a majority of the issued and
outstanding Shares of the Trust entitled to vote at the Meeting except that
where the holders of any series of Shares are to vote as a series, then the
presence in person or by proxy of the holders of a majority of the Shares of
such series issued and outstanding and entitled to vote thereat shall constitute
a quorum for the transaction of such business.
Shares of each Fund (including shares which abstain or do not vote with
respect to any of the proposals presented for shareholder approval) will be
18
<PAGE>
counted for purposes of determining whether a quorum is present at the Meeting.
Abstentions from voting will be treated as shares that are present and entitled
to vote for purposes of determining the number of shares that are present and
entitled to vote with respect to a proposal, but will not be counted as a vote
in favor of that proposal. Accordingly, an abstention from voting has the same
effect as a vote against a proposal.
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.
19
<PAGE>
PRELIMINARY COPY
PROXY BALLOT
CONNECTICUT MUNICIPAL CASH TRUST
A Series of
FEDERATED MUNICIPAL TRUST
The undersigned, revoking all prior proxies, hereby appoints [ ], [ ] and [ ],
or any of them individually, as proxies, with full powers of substitution, to
vote for the undersigned at the special meeting of shareholders of Connecticut
Municipal Cash Trust Fund (the "Fund"), a series of Federated Municipal Trust
(the "Trust"), to be held at the offices of the Trust, Federated Investors
Tower, Pittsburgh, Pennsylvania 15222-3779, on July 31, 1996, at 3:00 p.m., or
at any adjournment thereof, notice of which meeting and the Proxy Statement
accompanying the same have been received by the undersigned, upon the following
matters as described in the Notice of Special Meeting and accompanying Proxy
Statement:
1) TO APPROVE OR DISAPPROVE AN AMENDMENT TO CERTAIN INVESTMENT LIMITATIONS
WHICH WILL PERMIT THE FUND TO INVEST ALL OF ITS INVESTABLE ASSETS IN A
SERIES OF A SEPARATE OPEN-END MANAGEMENT INVESTMENT COMPANY HAVING
SUBSTANTIALLY THE SAME INVESTMENT OBJECTIVE, POLICIES AND LIMITATIONS
AS THE FUND.
--- --- ---
--- FOR --- AGAINST --- ABSTAIN
2) TO APPROVE OR DISAPPROVE A CHANGE TO THE FUND'S FUNDAMENTAL INVESTMENT
LIMITATIONS ON RESTRICTED SECURITIES AND TO MAKE THE AMENDED LIMITATION
A NON-FUNDAMENTAL POLICY.
--- --- ---
--- FOR --- AGAINST --- ABSTAIN
3) TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING
OR ANY ADJOURNMENT THEREOF.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES
SAID PROXIES WILL VOTE THIS PROXY AS DIRECTED, OR IF NO DIRECTION IS
INDICATED, FOR PROPOSALS 1, 2, AND 3 UNLESS AUTHORITY TO DO SO IS
SPECIFICALLY WITHHELD IN THE MANNER PROVIDED. THE APPROVAL OF A
PROPOSAL IS NOT CONDITIONED ON THE APPROVAL OF ANY OTHER PROPOSAL.
Dated , 1996
(Please date this proxy)
Please sign exactly as your name or names appear at
left. Corporate proxies should be signed by an
authorized officer.
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY BALLOT PROMPTLY,
USING THE ENCLOSED ENVELOPE.
<PAGE>
PRELIMINARY COPY
PROXY BALLOT
FLORIDA MUNICIPAL CASH TRUST
A Series of
FEDERATED MUNICIPAL TRUST
The undersigned, revoking all prior proxies, hereby appoints [ ], [ ] and [ ],
or any of them individually, as proxies, with full powers of substitution, to
vote for the undersigned at the special meeting of shareholders of Connecticut
Municipal Cash Trust Fund (the "Fund"), a series of Federated Municipal Trust
(the "Trust"), to be held at the offices of the Trust, Federated Investors
Tower, Pittsburgh, Pennsylvania 15222-3779, on July 31, 1996, at 3:00 p.m., or
at any adjournment thereof, notice of which meeting and the Proxy Statement
accompanying the same have been received by the undersigned, upon the following
matters as described in the Notice of Special Meeting and accompanying Proxy
Statement:
1) TO APPROVE OR DISAPPROVE AN AMENDMENT TO CERTAIN INVESTMENT LIMITATIONS
WHICH WILL PERMIT THE FUND TO INVEST ALL OF ITS INVESTABLE ASSETS IN A
SERIES OF A SEPARATE OPEN-END MANAGEMENT INVESTMENT COMPANY HAVING
SUBSTANTIALLY THE SAME INVESTMENT OBJECTIVE, POLICIES AND LIMITATIONS
AS THE FUND.
--- --- ---
--- FOR --- AGAINST --- ABSTAIN
2) TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING
OR ANY ADJOURNMENT THEREOF.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES
SAID PROXIES WILL VOTE THIS PROXY AS DIRECTED, OR IF NO DIRECTION IS
INDICATED, FOR PROPOSALS 1 AND 2 UNLESS AUTHORITY TO DO SO IS
SPECIFICALLY WITHHELD IN THE MANNER PROVIDED. THE APPROVAL OF A
PROPOSAL IS NOT CONDITIONED ON THE APPROVAL OF ANY OTHER PROPOSAL.
Dated , 1996
(Please date this proxy)
Please sign exactly as your name or names appear at
left. Corporate proxies should be signed by an
authorized officer.
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY BALLOT PROMPTLY,
USING THE ENCLOSED ENVELOPE.
<PAGE>
PRELIMINARY COPY
PROXY BALLOT
NEW JERSEY MUNICIPAL CASH TRUST
A Series of
FEDERATED MUNICIPAL TRUST
The undersigned, revoking all prior proxies, hereby appoints [ ], [ ] and [ ],
or any of them individually, as proxies, with full powers of substitution, to
vote for the undersigned at the special meeting of shareholders of Connecticut
Municipal Cash Trust Fund (the "Fund"), a series of Federated Municipal Trust
(the "Trust"), to be held at the offices of the Trust, Federated Investors
Tower, Pittsburgh, Pennsylvania 15222-3779, on July 31, 1996, at 3:00 p.m., or
at any adjournment thereof, notice of which meeting and the Proxy Statement
accompanying the same have been received by the undersigned, upon the following
matters as described in the Notice of Special Meeting and accompanying Proxy
Statement:
1) TO APPROVE OR DISAPPROVE AN AMENDMENT TO CERTAIN INVESTMENT LIMITATIONS
WHICH WILL PERMIT THE FUND TO INVEST ALL OF ITS INVESTABLE ASSETS IN A
SERIES OF A SEPARATE OPEN-END MANAGEMENT INVESTMENT COMPANY HAVING
SUBSTANTIALLY THE SAME INVESTMENT OBJECTIVE, POLICIES AND LIMITATIONS
AS THE FUND.
--- --- ---
--- FOR --- AGAINST --- ABSTAIN
2) TO APPROVE OR DISAPPROVE A CHANGE TO THE FUND'S FUNDAMENTAL INVESTMENT
LIMITATIONS ON RESTRICTED SECURITIES AND TO MAKE THE AMENDED LIMITATION
A NON-FUNDAMENTAL POLICY.
--- --- ---
--- FOR --- AGAINST --- ABSTAIN
3) TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING
OR ANY ADJOURNMENT THEREOF.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES
SAID PROXIES WILL VOTE THIS PROXY AS DIRECTED, OR IF NO DIRECTION IS
INDICATED, FOR PROPOSALS 1, 2 AND 3 UNLESS AUTHORITY TO DO SO IS
SPECIFICALLY WITHHELD IN THE MANNER PROVIDED. THE APPROVAL OF A
PROPOSAL IS NOT CONDITIONED ON THE APPROVAL OF ANY OTHER PROPOSAL.
Dated , 1996
(Please date this proxy)
Please sign exactly as your name or names appear at
left. Corporate proxies should be signed by an
authorized officer.
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY BALLOT PROMPTLY,
USING THE ENCLOSED ENVELOPE.
FED0001H
