SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [ X ] Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
FEDERATED 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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FEDERATED MUNICIPAL TRUST
Alabama Municipal Cash Trust
Arizona Municipal Cash Trust
California Municipal Cash Trust
Connecticut Municipal Cash Trust
Florida Municipal Cash Trust
Georgia Municipal Cash Trust
Maryland Municipal Cash Trust
Massachusetts Municipal Cash Trust
Michigan Municipal Cash Trust
Minnesota Municipal Cash Trust
New Jersey Municipal Cash Trust
New York Municipal Cash Trust
North Carolina Municipal Cash Trust
Ohio Municipal Cash Trust
Pennsylvania Municipal Cash Trust
Tennessee Municipal Cash Trust
Virginia Municipal Cash 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.
Federated Municipal Trust (the "Trust") will hold a special meeting of
shareholders of the Funds identified above on November 19, 1999. It is important
for you to vote on the issues described in this Proxy Statement. We recommend
that you read the Proxy Statement in its entirety; the explanations will help
you to decide on the issues.
Following is an introduction to the proposals and the process.
WHY AM I BEING ASKED TO VOTE?
Mutual funds are required to obtain shareholders' votes for certain types
of changes, like those included in this Proxy Statement. You have a right to
vote on these changes.
WHAT ISSUES AM I BEING ASKED TO VOTE ON?
The proposals include the election of Trustees, certain amendments to the
Trust's Declaration of Trust and the proposed reorganization of each Fund into a
newly created portfolio of Money Market Obligations Trust ("MMOT").
WHY ARE INDIVIDUALS RECOMMENDED FOR ELECTION TO THE BOARD OF TRUSTEES?
The Trust is devoted to serving the needs of its shareholders, and the Board is
responsible for managing the Trust's business affairs to meet those needs. The
Board represents the shareholders and can exercise all of the Trust's powers,
except those reserved only for shareholders.
Trustees are selected on the basis of their education and professional
experience. Candidates are chosen based on their distinct interest in, and
capacity for understanding the complexities of, the operation of a mutual fund.
These individuals bring considerable experience to the impartial oversight of a
fund's operation.
The Proxy Statement includes a brief description of each nominee's history and
current position with the Trust, if applicable.
<PAGE>
WHY ARE THE TRUSTEES RECOMMENDING CERTAIN AMENDMENTS TO THE DECLARATION OF
TRUST?
The Declaration of 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 a change to the Declaration that permits
the Funds to benefit from these developments.
WHY ARE THE REORGANIZATIONS BEING PROPOSED?
The Board of Trustees and the Funds' investment adviser believe that the
management structure of the Funds can be simplified by reorganizing the Funds as
portfolios of MMOT, another money market mutual fund. After the Reorganizations,
the original Trust will be dissolved. MMOT offers a variety of portfolios
investing in money market securities, each with its own investment objective.
HOW WILL THE REORGANIZATIONS AFFECT MY INVESTMENT?
o The shares you own and the value of your investment will not change.
o The seventeen Reorganizations will each be a tax-free event.
o There will not be any sales loads, commissions, or transaction charges
with the Reorganizations.
o The investment objectives will remain the same.
o There will be no increases in the fees payable to the Funds' investment
adviser because of the Reorganizations.
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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PRELIMINARY
FEDERATED MUNICIPAL TRUST
ALABAMA MUNICIPAL CASH TRUST
ARIZONA MUNICIPAL CASH TRUST
CALIFORNIA MUNICIPAL CASH TRUST
CONNECTICUT MUNICIPAL CASH TRUST
FLORIDA MUNICIPAL CASH TRUST
GEORGIA MUNICIPAL CASH TRUST
MARYLAND MUNICIPAL CASH TRUST
MASSACHUSETTS MUNICIPAL CASH TRUST
MICHIGAN MUNICIPAL CASH TRUST
MINNESOTA MUNICIPAL CASH TRUST
NEW JERSEY MUNICIPAL CASH TRUST
NEW YORK MUNICIPAL CASH TRUST
NORTH CAROLINA MUNICIPAL CASH TRUST
OHIO MUNICIPAL CASH TRUST
PENNSYLVANIA MUNICIPAL CASH TRUST
TENNESSEE MUNICIPAL CASH TRUST
VIRGINIA MUNICIPAL CASH TRUST
NOTICE OF SPECIAL MEETING
TO BE HELD NOVEMBER 19, 1999
A special meeting of the shareholders of Federated Municipal
Trust (the "Trust"), which presently consists of seventeen portfolios or series,
Alabama Municipal Cash Trust (the "Alabama Fund"), Arizona Municipal Cash Trust
(the "Arizona Fund"), California Municipal Cash Trust (the "California Fund"),
Connecticut Municipal Cash Trust (the "Connecticut Fund"), Florida Municipal
Cash Trust (the "Florida Fund"), Georgia Municipal Cash Trust (the "Georgia
Fund"), Maryland Municipal Cash Trust (the "Maryland Fund"), Massachusetts
Municipal Cash Trust (the "Massachusetts Fund"), Michigan Municipal Cash Trust
(the "Michigan Fund"), Minnesota Municipal Cash Trust (the "Minnesota Fund"),
New Jersey Municipal Cash Trust (the "New Jersey Fund"), New York Municipal Cash
Trust (the "New York Fund"), North Carolina Municipal Cash Trust (the "North
Carolina Fund"), Ohio Municipal Cash Trust (the "Ohio Fund"), Pennsylvania
Municipal Cash Trust (the "Pennsylvania Fund"), Tennessee Municipal Cash Trust
(the "Tennessee Fund") and Virginia Municipal Cash Trust (the "Virginia Fund")
(individually a "Fund," and collectively the "Funds"), will be held at 5800
Corporate Drive, Pittsburgh, Pennsylvania 15237-7000, at 2:00 p.m. (Eastern
time), on November 19, 1999 to consider proposals:
(1) To elect five Trustees.
(2) To approve amendments to, and a restatement of, the Trust's
Declaration of Trust:
(a) To require the approval of a majority of the
outstanding voting shares in the event of the sale
and conveyance of the assets of the Trust to
another trust or corporation; and
(b) To permit the Board of Trustees to liquidate assets
of the Trust, its series or classes, and distribute
the proceeds of such assets to the holders of such
shares representing such interests, without seeking
shareholder approval.
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(3) To approve a proposed Agreement and Plan of Reorganization
between the Trust, on behalf of its portfolio, the ALABAMA
FUND, and Money Market Obligations Trust, on behalf of its
series, Alabama Municipal Cash Trust (the "Successor
Alabama Fund"), whereby the Successor Alabama Fund would
acquire all of the assets of the Alabama Fund in exchange
for shares of the Successor Alabama Fund to be distributed
PRO RATA by the Alabama Fund to its shareholders in
complete liquidation and termination of the Alabama Fund
(ALABAMA FUND ONLY).
To approve a proposed Agreement and Plan of Reorganization
between the Trust, on behalf of its portfolio, the ARIZONA
FUND, and Money Market Obligations Trust, on behalf of its
series, Arizona Municipal Cash Trust (the "Successor
Arizona Fund"), whereby the Successor Arizona Fund would
acquire all of the assets of the Arizona Fund in exchange
for shares of the Successor Arizona Fund to be distributed
PRO RATA by the Arizona Fund to its shareholders in
complete liquidation and termination of the Arizona Fund
(ARIZONA FUND ONLY).
To approve a proposed Agreement and Plan of Reorganization
between the Trust, on behalf of its portfolio, the
CALIFORNIA FUND, and Money Market Obligations Trust, on
behalf of its series, California Municipal Cash Trust (the
"Successor California Fund"), whereby the Successor
California Fund would acquire all of the assets of the
California Fund in exchange for shares of the Successor
California Fund to be distributed PRO RATA by the
California Fund to its shareholders in complete
liquidation and termination of the California Fund
(CALIFORNIA FUND ONLY).
To approve a proposed Agreement and Plan of Reorganization
between the Trust, on behalf of its portfolio, the
CONNECTICUT FUND, and Money Market Obligations Trust, on
behalf of its series, Connecticut Municipal Cash Trust
(the "Successor Connecticut Fund"), whereby the Successor
Connecticut Fund would acquire all of the assets of the
Connecticut Fund in exchange for shares of the Successor
Connecticut Fund to be distributed PRO RATA by the
Connecticut Fund to its shareholders in complete
liquidation and termination of the Connecticut Fund
(CONNECTICUT FUND ONLY).
To approve a proposed Agreement and Plan of Reorganization
between the Trust, on behalf of its portfolio, the FLORIDA
FUND, and Money Market Obligations Trust, on behalf of its
series, Florida Municipal Cash Trust (the "Successor
Florida Fund"), whereby the Successor Florida Fund would
acquire all of the assets of the Florida Fund in exchange
for shares of the Successor Florida Fund to be distributed
PRO RATA by the Florida Fund to its shareholders in
complete liquidation and termination of the Florida Fund
(FLORIDA FUND ONLY).
To approve a proposed Agreement and Plan of Reorganization
between the Trust, on behalf of its portfolio, the GEORGIA
FUND, and Money Market Obligations Trust, on behalf of its
series, Georgia Municipal Cash Trust (the "Successor
Georgia Fund"), whereby the Successor Georgia Fund would
acquire all of the assets of the Georgia Fund in exchange
for shares of the Successor Georgia Fund to be distributed
PRO RATA by the Georgia Fund to its shareholders in
complete liquidation and termination of the Georgia Fund
(GEORGIA FUND ONLY).
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To approve a proposed Agreement and Plan of Reorganization
between the Trust, on behalf of its portfolio, the
MARYLAND FUND, and Money Market Obligations Trust, on
behalf of its series, Maryland Municipal Cash Trust (the
"Successor Maryland Fund"), whereby the Successor Maryland
Fund would acquire all of the assets of the Maryland Fund
in exchange for shares of the Successor Maryland Fund to
be distributed PRO RATA by the Maryland Fund to its
shareholders in complete liquidation and termination of
the Maryland Fund (MARYLAND FUND ONLY).
To approve a proposed Agreement and Plan of Reorganization
between the Trust, on behalf of its portfolio, the
MASSACHUSETTS FUND, and Money Market Obligations Trust, on
behalf of its series, Massachusetts Municipal Cash Trust
(the "Successor Massachusetts Fund"), whereby the
Successor Massachusetts Fund would acquire all of the
assets of the Massachusetts Fund in exchange for shares of
the Successor Massachusetts Fund to be distributed PRO
RATA by the Massachusetts Fund to its shareholders in
complete liquidation and termination of the Massachusetts
Fund (MASSACHUSETTS FUND ONLY).
To approve a proposed Agreement and Plan of Reorganization
between the Trust, on behalf of its portfolio, the
MICHIGAN FUND, and Money Market Obligations Trust, on
behalf of its series, Michigan Municipal Cash Trust (the
"Successor Michigan Fund"), whereby the Successor Michigan
Fund would acquire all of the assets of the Michigan Fund
in exchange for shares of the Successor Michigan Fund to
be distributed PRO RATA by the Michigan Fund to its
shareholders in complete liquidation and termination of
the Michigan Fund (MICHIGAN FUND ONLY).
To approve a proposed Agreement and Plan of Reorganization
between the Trust, on behalf of its portfolio, the
MINNESOTA FUND, and Money Market Obligations Trust, on
behalf of its series, Minnesota Municipal Cash Trust (the
"Successor Minnesota Fund"), whereby the Successor
Minnesota Fund would acquire all of the assets of the
Minnesota Fund in exchange for shares of the Successor
Minnesota Fund to be distributed PRO RATA by the Minnesota
Fund to its shareholders in complete liquidation and
termination of the Minnesota Fund (MINNESOTA FUND ONLY).
To approve a proposed Agreement and Plan of Reorganization
between the Trust, on behalf of its portfolio, the NEW
JERSEY FUND, and Money Market Obligations Trust, on behalf
of its series, New Jersey Municipal Cash Trust (the
"Successor New Jersey Fund"), whereby the Successor New
Jersey Fund would acquire all of the assets of the New
Jersey Fund in exchange for shares of the Successor New
Jersey Fund to be distributed PRO RATA by the New Jersey
Fund to its shareholders in complete liquidation and
termination of the New Jersey Fund (NEW JERSEY FUND ONLY).
To approve a proposed Agreement and Plan of Reorganization
between the Trust, on behalf of its portfolio, the NEW
YORK FUND, and Money Market Obligations Trust, on behalf
of its series, New York Municipal Cash Trust (the
"Successor New York Fund"), whereby the Successor New York
Fund would acquire all of the assets of the New York Fund
in exchange for shares of the Successor New York Fund to
be distributed PRO RATA by the New York Fund to its
shareholders in complete liquidation and termination of
the New York Fund (NEW YORK FUND ONLY).
<PAGE>
To approve a proposed Agreement and Plan of Reorganization
between the Trust, on behalf of its portfolio, the NORTH
CAROLINA FUND, and Money Market Obligations Trust, on
behalf of its series, North Carolina Municipal Cash Trust
(the "Successor North Carolina Fund"), whereby the
Successor North Carolina Fund would acquire all of the
assets of the North Carolina Fund in exchange for shares
of the Successor North Carolina Fund to be distributed PRO
RATA by the North Carolina Fund to its shareholders in
complete liquidation and termination of the North Carolina
Fund (NORTH CAROLINA FUND ONLY).
To approve a proposed Agreement and Plan of Reorganization
between the Trust, on behalf of its portfolio, the OHIO
FUND, and Money Market Obligations Trust, on behalf of its
series, Ohio Municipal Cash Trust (the "Successor Ohio
Fund"), whereby the Successor Ohio Fund would acquire all
of the assets of the Ohio Fund in exchange for shares of
the Successor Ohio Fund to be distributed PRO RATA by the
Ohio Fund to its shareholders in complete liquidation and
termination of the Ohio Fund (OHIO FUND ONLY).
To approve a proposed Agreement and Plan of Reorganization
between the Trust, on behalf of its portfolio, the
PENNSYLVANIA Fund, and Money Market Obligations Trust, on
behalf of its series, Pennsylvania Municipal Cash Trust
(the "Successor Pennsylvania Fund"), whereby the Successor
Pennsylvania Fund would acquire all of the assets of the
Pennsylvania Fund in exchange for shares of the Successor
Pennsylvania Fund to be distributed PRO RATA by the
Pennsylvania Fund to its shareholders in complete
liquidation and termination of the Pennsylvania Fund
(PENNSYLVANIA FUND ONLY).
To approve a proposed Agreement and Plan of Reorganization
between the Trust, on behalf of its portfolio, the
TENNESSEE FUND, and Money Market Obligations Trust, on
behalf of its series, Tennessee Municipal Cash Trust (the
"Successor Tennessee Fund"), whereby the Successor
Tennessee Fund would acquire all of the assets of the
Tennessee Fund in exchange for shares of the Successor
Tennessee Fund to be distributed PRO RATA by the Tennessee
Fund to its shareholders in complete liquidation and
termination of the Tennessee Fund (TENNESSEE FUND ONLY).
To approve a proposed Agreement and Plan of Reorganization
between the Trust, on behalf of its portfolio, the
VIRGINIA FUND, and Money Market Obligations Trust, on
behalf of its series, Virginia Municipal Cash Trust (the
"Successor Virginia Fund"), whereby the Successor Virginia
Fund would acquire all of the assets of the Virginia Fund
in exchange for shares of the Successor Virginia Fund to
be distributed PRO RATA by the Virginia Fund to its
shareholders in complete liquidation and termination of
the Virginia Fund (VIRGINIA FUND ONLY).
To transact such other business as may properly come
before the meeting or any adjournment thereof.
<PAGE>
The Board of Trustees has fixed September 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
October 8, 1999
YOU CAN HELP THE TRUST AVOID THE NECESSITY AND EXPENSE OF SENDING FOLLOW-UP
LETTERS TO ENSURE A QUORUM BY PROMPTLY SIGNING AND RETURNING THE ENCLOSED PROXY.
IF YOU ARE UNABLE TO ATTEND THE MEETING, PLEASE MARK, SIGN, DATE AND RETURN THE
ENCLOSED PROXY SO THAT THE NECESSARY QUORUM MAY BE REPRESENTED AT THE SPECIAL
MEETING. THE ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES.
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TABLE OF CONTENTS
ABOUT THE PROXY SOLICITATION AND THE MEETING...................................4
ELECTION OF FIVE TRUSTEES......................................................5
ABOUT THE ELECTION OF TRUSTEES ................................................5
TRUSTEES STANDING FOR ELECTION.................................................6
NOMINEES NOT PRESENTLY SERVING AS TRUSTEES.....................................6
APPROVAL OF AMENDMENTS TO, AND A RESTATEMENT OF, THE TRUST'S
DECLARATION OF TRUST...........................................................7
APPROVAL OF THE PROPOSED REORGANIZATIONS.......................................7
INFORMATION ABOUT THE TRUST................................................. 12
PROXIES, QUORUM AND VOTING AT THE MEETING.....................................12
SHARE OWNERSHIP OF THE TRUSTEES...............................................13
TRUSTEE COMPENSATION..........................................................13
OFFICERS AND INVESTMENT TRUSTEES OF THE TRUST.................................15
OTHER MATTERS AND DISCRETION OF ATTORNEYS NAMED IN THE PROXY..................17
APPENDIX I: AGREEMENT AND PLAN OF REORGANIZATION.............................I-1
APPENDIX II - COMPARISON OF THE INVESTMENT POLICIES AND LIMITATIONS FOR
EACH FUND AND THE CORRESPONDING SUCCESSOR FUND..............................II-1
A: ALABAMA FUND AND SUCCESSOR ALABAMA FUND..........................II-1
B: ARIZONA FUND AND SUCCESSOR ARIZONA FUND..........................II-4
C: CALIFORNIA FUND AND SUCCESSOR CALIFORNIA FUND....................II-8
D: CONNECTICUT FUND AND SUCCESSOR CONNECTICUT FUND.................II-12
E: FLORIDA FUND AND SUCCESSOR FLORIDA FUND.........................II-15
F: GEORGIA FUND AND SUCCESSOR GEORGIA FUND.........................II-18
G: MARYLAND FUND AND SUCCESSOR MARYLAND FUND.......................II-21
H: MASSACHUSETTS FUND AND SUCCESSOR MASSACHUSETTS FUND.............II-24
I: MICHIGAN FUND AND SUCCESSOR MICHIGAN FUND.......................II-27
J: MINNESOTA FUND AND SUCCESSOR MINNESOTA FUND.....................II-30
K: NEW JERSEY FUND AND SUCCESSOR NEW JERSEY FUND...................II-34
L: NEW YORK FUND AND SUCCESSOR NEW YORK FUND.......................II-38
M: NORTH CAROLINA FUND AND SUCCESSOR NORTH CAROLINA FUND...........II-42
N: OHIO FUND AND SUCCESSOR OHIO FUND...............................II-45
O: PENNSYLVANIA FUND AND SUCCESSOR PENNSYLVANIA FUND...............II-48
P: TENNESSEE FUND AND SUCCESSOR TENNESSEE FUND.....................II-51
Q: VIRGINIA FUND AND SUCCESSOR VIRGINIA FUND.......................II-55
<PAGE>
PRELIMINARY
PROXY STATEMENT
FEDERATED MUNICIPAL TRUST
ALABAMA MUNICIPAL CASH TRUST
ARIZONA MUNICIPAL CASH TRUST
CALIFORNIA MUNICIPAL CASH TRUST
CONNECTICUT MUNICIPAL CASH TRUST
FLORIDA MUNICIPAL CASH TRUST
GEORGIA MUNICIPAL CASH TRUST
MARYLAND MUNICIPAL CASH TRUST
MASSACHUSETTS MUNICIPAL CASH TRUST
MICHIGAN MUNICIPAL CASH TRUST
MINNESOTA MUNICIPAL CASH TRUST
NEW JERSEY MUNICIPAL CASH TRUST
NEW YORK MUNICIPAL CASH TRUST
NORTH CAROLINA MUNICIPAL CASH TRUST
OHIO MUNICIPAL CASH TRUST
PENNSYLVANIA MUNICIPAL CASH TRUST
TENNESSEE MUNICIPAL CASH TRUST
VIRGINIA MUNICIPAL CASH 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 seventeen
portfolios or series, Alabama Municipal Cash Trust (the "Alabama Fund"), Arizona
Municipal Cash Trust (the "Arizona Fund"), California Municipal Cash Trust (the
"California Fund"), Connecticut Municipal Cash Trust (the "Connecticut Fund"),
Florida Municipal Cash Trust (the "Florida Fund"), Georgia Municipal Cash Trust
(the "Georgia Fund"), Maryland Municipal Cash Trust (the "Maryland Fund"),
Massachusetts Municipal Cash Trust (the "Massachusetts Fund"), Michigan
Municipal Cash Trust (the "Michigan Fund"), Minnesota Municipal Cash Trust (the
"Minnesota Fund"), New Jersey Municipal Cash Trust (the "New Jersey Fund"), New
York Municipal Cash Trust (the "New York Fund"), North Carolina Municipal Cash
Trust (the "North Carolina Fund"), Ohio Municipal Cash Trust (the "Ohio Fund"),
Pennsylvania Municipal Cash Trust (the "Pennsylvania Fund"), Tennessee Municipal
Cash Trust (the "Tennessee Fund") and Virginia Municipal Cash Trust (the
"Virginia Fund") (individually a "Fund," and collectively the "Funds"). The
proxies will be voted at the special meeting of shareholders of the Trust to be
held on November 19, 1999, at 5800 Corporate Drive, Pittsburgh, Pennsylvania
15237-7000, at 2:00 p.m. (such special meeting and any adjournment or
postponement thereof are referred to as the "Meeting").
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The cost of the solicitation, including the printing and mailing of
proxy materials, will be borne by the Trust. In addition to solicitations
through the mails, proxies may be solicited by officers, employees, and agents
of the Trust or, if necessary, a communications firm retained for this purpose.
Such solicitations may be by telephone, telegraph, through the Internet or
otherwise. Any telephonic solicitations will follow procedures designed to
ensure accuracy and prevent fraud, including requiring identifying shareholder
information, recording the shareholder's instructions, and confirming to the
shareholder after the fact. Shareholders who communicate proxies by telephone or
by other electronic means have the same power and authority to issue, revoke, or
otherwise change their voting instruction as shareholders submitting proxies in
written form. The Trust may reimburse custodians, nominees, and fiduciaries for
the reasonable costs incurred by them in connection with forwarding solicitation
materials to the beneficial owners of shares held of record by such persons.
The Board has reviewed the proposed amendments to the Trust's
Declaration of Trust, as well as the proposed reorganization of each Fund (each
a "Reorganization" and collectively, the "Reorganizations"), and has approved
them, subject to shareholder approval. The purposes of the Meeting are set forth
in the accompanying Notice. The Trustees know of no business other than that
mentioned in the Notice that will be presented for consideration at the Meeting.
Should other business properly be brought before the Meeting, proxies will be
voted in accordance with the best judgment of the persons named as proxies. This
Proxy Statement and the enclosed proxy card are expected to be mailed on or
about October 8, 1999, to shareholders of record at the close of business on
September 22, 1999 (the "Record Date").
The following table sets forth the number of shares of beneficial
interest of each Fund, by class, which were outstanding on the Record Date:
NUMBER OF SHARES
OUTSTANDING
ALABAMA FUND
ARIZONA FUND
CALIFORNIA FUND
Institutional Service Shares
Institutional Shares
CONNECTICUT FUND
FLORIDA FUND
Cash II Shares
Institutional Shares
GEORGIA FUND
MARYLAND FUND
MASSACHUSETTS FUND
MICHIGAN FUND
Institutional Service Shares
Institutional Shares
MINNESOTA FUND
Cash Series Shares
Institutional Shares
NEW JERSEY FUND
Institutional Service Shares
Institutional Shares
<PAGE>
NEW YORK FUND
Cash II Shares
Institutional Service Shares
NORTH CAROLINA FUND
OHIO FUND
Institutional Service Shares
Institutional Shares
Cash II Shares
PENNSYLVANIA FUND
TENNESSEE FUND
Institutional Service Shares
Institutional Shares
VIRGINIA FUND
Institutional Service Shares
Institutional Shares
The Funds' annual reports, which include audited financial statements
for the fiscal year ended October 31, 1998, were previously mailed to
shareholders. The Funds' semi-annual reports, which contain unaudited financial
statements for the period ended April 30, 1999, were also previously mailed to
shareholders. The Funds' annual reports and semi-annual reports are incorporated
by reference into this Proxy Statement. The Trust will promptly provide, without
charge and upon request, to each person to whom this Proxy Statement is
delivered, a copy of a Fund's annual report and/or semi-annual report. Requests
for an annual report or semi-annual report for a Fund may be made by writing to
the Trust's principal executive offices or by calling the Trust. The Trust's
principal executive offices are located at Federated Investors Funds, 5800
Corporate Drive, Pittsburgh, Pennsylvania 15237-7000. The Trust's toll-free
telephone number is 1-800-341-7400.
<PAGE>
PROPOSAL #1: ELECTION OF FIVE TRUSTEES
The persons named as proxies intend to vote in favor of the election of
Nicholas P. Constantakis, John F. Cunningham, J. Christopher Donahue, Charles F.
Mansfield, Jr. and John S. Walsh (collectively, the "Nominees") as Trustees of
the Trust. Messrs. Cunningham, Mansfield and Walsh are presently serving as
Trustees. If elected by shareholders, Messrs. Constantakis and Donahue are
expected to assume their responsibilities as Trustees effective January 1, 2000.
Please see "ABOUT THE ELECTION OF TRUSTEES" below for current information about
the Nominees, and "OFFICERS AND INCUMBENT TRUSTEES OF THE TRUST" in this Proxy
Statement for current information about the incumbent Trustees who have
previously been elected by shareholders. Except as otherwise provided in this
Proxy Statement, it is currently anticipated that each of the incumbent Trustees
will continue to serve as a Trustee following the Meeting.
Messrs. Cunningham, Mansfield and Walsh were appointed Trustees on January
1, 1999, to fill vacancies resulting from the decision to expand the size of the
Board. Messrs. Constantakis and Donahue are being proposed for election as
Trustees also as a result of the decision to expand the size of the Board.
All Nominees have consented to serve if elected. If elected, the
Trustees will hold office without limit in time until death, resignation,
retirement, or removal or until the next meeting of shareholders to elect
Trustees and the election and qualification of their successors. Election of a
Trustee is by a plurality vote, which means that the five individuals receiving
the greatest number of votes at the Meeting will be deemed to be elected.
If any Nominee for election as a Trustee named above shall by reason of
death or for any other reason become unavailable as a candidate at the Meeting,
votes pursuant to the enclosed proxy will be cast for a substitute candidate by
the proxies named on the proxy card, or their substitutes, present and acting at
the Meeting. Any such substitute candidate for election as a Trustee who is an
"interested person" (as defined in the Investment Company Act of 1940, as
amended (the "1940 Act")) of the Trust shall be nominated by the Executive
Committee. The selection of any substitute candidate for election as a Trustee
who is not an "interested person" shall be made by a majority of the Trustees
who are not "interested persons" of the Trust. The Board has no reason to
believe that any Nominee will become unavailable for election as a Trustee.
THE BOARD OF TRUSTEES RECOMMENDS THAT
SHAREHOLDERS VOTE TO ELECT AS TRUSTEES THE NOMINEES FOR
ELECTION TO THE BOARD OF TRUSTEES OF THE TRUST
ABOUT THE ELECTION OF TRUSTEES
The Declaration of Trust provides that Trustees will continue in office
until their respective successors are elected, and therefore, when elected,
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.
<PAGE>
Set forth below is a listing of: (i) the Trustees standing for election,
and (ii) the Nominees standing for election who are not presently serving as a
Trustees, along with their addresses, birth dates, present positions with the
Trust, if applicable, and principal occupations during the past five years:
TRUSTEES STANDING FOR ELECTION
JOHN F. CUNNINGHAM
353 El Brillo Way
Palm Beach, FL
Birth date: March 5, 1943
Trustee
Director or Trustee of some of the Funds in the Federated Fund Complex;
Chairman, President and Chief Executive Officer, Cunningham & Co., Inc.
(strategic business consulting); Trustee Associate, Boston College; Director,
Iperia Corp. (communications/software); formerly, Director, Redgate
Communications and EMC Corporation (computer storage systems). Previous
Positions: Chairman of the Board and Chief Executive Officer, Computer Consoles,
Inc.; President and Chief Operating Officer, Wang Laboratories; Director, First
National Bank of Boston; Director, Apollo Computer, Inc.
CHARLES F. MANSFIELD, JR.
80 South Road
Westhampton Beach, NY
Birth date: April 10, 1945
Trustee
Director or Trustee of some of the Funds in the Federated Fund Complex;
Management Consultant. Previous Positions: Chief Executive Officer, PBTC
International Bank; Partner, Arthur Young & Company (now Ernst & Young LLP);
Chief Financial Officer of Retail Banking Sector, Chase Manhattan Bank; Senior
Vice President, Marine Midland Bank; Vice President, Citibank; Assistant
Professor of Banking and Finance, Frank G. Zarb School of Business, Hofstra
University.
JOHN S. WALSH
2007 Sherwood Drive
Valparaiso, IN
Birth date: November 28, 1957
Trustee
Director or Trustee of some of the Funds in the Federated Fund Complex;
President and Director, Heat Wagon, Inc. (manufacturer of construction temporary
heaters); President and Director, Manufacturers Products, Inc. (distributor of
portable construction heaters); President, Portable Heater Parts, a division of
Manufacturers Products, Inc.; Director, Walsh & Kelly, Inc. (heavy highway
contractor); formerly, Vice President, Walsh & Kelly, Inc.
NOMINEES NOT PRESENTLY SERVING AS TRUSTEES
NICHOLAS P. CONSTANTAKIS
175 Woodshire Drive
Pittsburgh, PA
Birth date: September 3, 1939
Director or Trustee of the Federated Fund Complex; formerly, Partner, Andersen
Worldwide SC.
<PAGE>
J. CHRISTOPHER DONAHUE
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Birth date: April 11, 1949
Executive Vice President
President or Executive Vice President of the Federated Fund Complex; Director or
Trustee of some of the Funds in the Federated Fund Complex; President, Chief
Executive Officer and Director, Federated Investors, Inc.; President and
Trustee, Federated Investment Management Company; President and Trustee,
Federated Investment Counseling; President and Director, Federated Global
Investment Management Corp.; President, Passport Research, Ltd.; Trustee,
Federated Shareholder Services Company; Director, Federated Services Company.
Mr. Donahue is the son of John F. Donahue, Chairman and Trustee of the Trust.
PROPOSAL #2: TO APPROVE AMENDMENTS TO, AND A RESTATEMENT OF, THE TRUST'S
DECLARATION OF TRUST
Mutual funds, such as the Trust, are required to organize under the laws
of a state and to create and be bound by organizational documents outlining how
they will operate. In the case of the Trust, these organizational documents are
the Declaration of Trust and the By-Laws. Since the adoption of the Trust's
current Declaration of Trust, the market for mutual funds has evolved, requiring
mutual funds to be more flexible in their operation to respond quickly to
changes in the market. Certain items in the current Declaration of Trust,
described below, prohibit the Trust from responding quickly and favorably to
changing markets without going to the expense and delay of holding a shareholder
meeting.
Accordingly, the Trustees have approved, and have authorized the
submission to the Funds' shareholders for their approval, certain amendments to
the Trust's Declaration of Trust. The approval of each amendment will require
the affirmative vote of a majority of the outstanding voting shares of the Funds
entitled to vote, as described in the Declaration of Trust. (See "PROXIES,
QUORUM AND VOTING AT THE MEETING" below.)
PROPOSAL #2(A): TO AMEND AND RESTATE THE
TRUST'S DECLARATION OF TRUST TO
REQUIRE THE APPROVAL OF A MAJORITY
OF THE OUTSTANDING VOTING SHARES OF
THE TRUST IN THE EVENT OF THE SALE
AND CONVEYANCE OF THE ASSETS OF THE
TRUST TO ANOTHER TRUST OR
CORPORATION
Article XII, Section 4(b) of the Declaration of Trust currently requires
the approval of the holders of more than fifty percent of the outstanding shares
of the Trust to approve any sale and conveyance of the assets of the Trust to
another open-end management investment company. To reduce the likelihood of
greater expenses in a proposed solicitation for the approval of any sale and
conveyance of the assets of the Funds (including the Reorganizations that are
described in Proposal #3 of this Proxy Statement), the Trustees have adopted an
amendment that would permit a majority vote to approve such a transaction. A
majority vote means the affirmative vote of: (a) 67% or more of the voting
securities present at the meeting if the holders of more than 50% of the
outstanding voting securities are present or represented by proxy; or (b) more
than 50% of the outstanding voting securities, whichever is less. The amendment
would provide the Trust with greater flexibility, and in the event circumstances
warrant the approval of the Board, the Trustees could determine that a sale and
conveyance of assets would be in the best interest of the Trust. The Trustees
are recommending that shareholders approve the adoption of this proposed
amendment to the Declaration of Trust.
Proposal #3 on the agenda of the Meeting is a recommendation by the
Board that the shareholders of each Fund approve the proposed Reorganization of
the Fund with and into an affiliated open-end management investment company. If
this Proposal #2(a) is approved by shareholders at the Meeting, the amendment
will become effective immediately and will be deemed to govern the approval by
the shareholders of each Fund of the Fund's Reorganization as described in
Proposal #3.
If approved by shareholders, Article XII, Section 4(b) of the
Declaration of Trust would be amended to read as follows:
"(b) The Trustees, with the approval of a Majority Shareholder Vote of
each Series or Class, may sell and convey the assets of the Trust, or a
Class or Series of the Trust, to another trust or corporation organized
under the laws of any State of the United States, which is a diversified
open-end management investment company as defined in the 1940 Act, for
an adequate consideration which may include the assumption of all
outstanding obligations, taxes and other liabilities, accrued or
contingent, of the Trust, of each Class or Series of the Trust, and
which may include shares of beneficial interest or stock of such trust
or corporation. Upon making provision for the payment of all such
liabilities, by such assumption or otherwise, the Trustees shall
distribute the remaining proceeds belonging to each Series or Class
ratably among the holders of the Shares of that Series or Class of the
Trust, then outstanding. For the purposes of this provision, a "Majority
Shareholder Vote" means the affirmative vote of the lesser of: (a) more
than 50% of the outstanding voting securities entitled to vote upon the
matter, or (b) 67% or more of the voting securities present at the
meeting if the holders of 50% or more of the outstanding voting
securities entitled to vote on the matter are present at the meeting in
person or by proxy."
In the event that the amendment to Article XII, Section 4(b) is not
approved by shareholders, this section of the Declaration of Trust will remain
as it currently exists, and the Board of Trustees will consider what action, if
any, should be taken. In such event, the approval of each Reorganization by
shareholders of a Fund, as described in Proposal #3 of this Proxy Statement,
will then require the affirmative vote of more than fifty percent of the
outstanding shares of the Fund.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
<PAGE>
PROPOSAL #2(B): TO AMEND AND RESTATE THE TRUST'S
DECLARATION OF TRUST TO PERMIT THE BOARD OF TRUSTEES
TO LIQUIDATE ASSETS OF THE TRUST, ITS SERIES OR CLASSES, AND DISTRIBUTE THE
PROCEEDS OF SUCH ASSETS TO THE HOLDERS OF SUCH SHARES REPRESENTING SUCH
INTERESTS, WITHOUT SEEKING SHAREHOLDER APPROVAL
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 series or class of the
Trust, and then redeem all outstanding shares of any series 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 series or class 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 this proposal is approved by
shareholders, the Trustees will be authorized to liquidate a series or class of
the Trust by Board action without a further shareholder vote.
If approved by shareholders, Article XII, Section 4(c) of the
Declaration of Trust will be amended to read as follows:
"The Trustees may at any time sell and convert into money all the assets
of the Trust or any Series or Class, 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 each Series or Class, the Trustees
shall distribute the remaining assets belonging to each Series or Class
ratably among the holders of the outstanding Shares of that Series or
Class."
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 Funds' shareholders for their approval, an amendment to the Trust's
Declaration of Trust.
In the event that the amendment to the Declaration of Trust to allow the
Trustees to liquidate assets of the Trust, or of a series or class thereof, is
not approved by the shareholders, the Declaration of Trust will remain as it
currently exists and the Trustees will consider what action, if any, should be
taken.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
<PAGE>
PROPOSAL #3: TO APPROVE THE PROPOSED REORGANIZATIONS
The Board of Trustees of the Trust has voted to recommend to
shareholders of each of the Alabama Fund, Arizona Fund, California Fund,
Connecticut Fund, Florida Fund, Georgia Fund, Maryland Fund, Massachusetts Fund,
Michigan Fund, Minnesota Fund, New Jersey Fund, New York Fund, North Carolina
Fund, Ohio Fund, Pennsylvania Fund, Tennessee Fund and Virginia Fund
(individually, a "Fund" and collectively referred to as the "Funds"), the
approval of an Agreement and Plan of Reorganization (individually, a
"Reorganization Agreement," and collectively, the "Reorganization Agreements")
whereby Money Market Obligations Trust, a Massachusetts business trust ("MMOT"),
on behalf of its portfolios, Alabama Municipal Cash Trust (the "Successor
Alabama Fund"), Arizona Municipal Cash Trust (the "Successor Arizona Fund"),
California Municipal Cash Trust (the "Successor California Fund"), Connecticut
Municipal Cash Trust (the "Successor Connecticut Fund"), Florida Municipal Cash
Trust (the "Successor Florida Fund"), Georgia Municipal Cash Trust (the
"Successor Georgia Fund"), Maryland Municipal Cash Trust (the "Successor
Maryland Fund"), Massachusetts Municipal Cash Trust (the "Successor
Massachusetts Fund"), Michigan Municipal Cash Trust (the "Successor Michigan
Fund"), Minnesota Municipal Cash Trust (the "Successor Minnesota Fund"), New
Jersey Municipal Cash Trust (the "Successor New Jersey Fund"), New York
Municipal Cash Trust (the "Successor New York Fund"), North Carolina Municipal
Cash Trust (the "Successor North Carolina Fund"), Ohio Municipal Cash Trust (the
"Successor Ohio Fund"), Pennsylvania Municipal Cash Trust (the "Successor
Pennsylvania Fund"), Tennessee Municipal Cash Trust (the "Successor Tennessee
Fund") and Virginia Municipal Cash Trust (the "Successor Virginia Fund"),
(MMOT's portfolios are collectively referred to as the "New Funds"), would
acquire all of the assets (subject to the liabilities) of each Fund,
respectively, in exchange for shares of beneficial interest of the corresponding
New Fund, to be distributed pro rata by each Fund to its respective shareholders
in complete liquidation and dissolution of each Fund (each a "Reorganization"
and collectively, the "Reorganizations"). As a result of the Reorganizations:
Shareholders of the Alabama Fund will receive shares of the Successor
Alabama Fund having a total net asset value equal to the total net asset
value of his or her holdings in the Alabama Fund on the date of the
Reorganization of the Alabama Fund;
Shareholders of the Arizona Fund will receive shares of the Successor
Arizona Fund having a total net asset value equal to the total net asset
value of his or her holdings in the Arizona Fund on the date of the
Reorganization of the Arizona Fund;
Shareholders of the California Fund will receive shares of the Successor
California Fund having a total net asset value equal to the total net
asset value of his or her holdings in the California Fund on the date of
the Reorganization of the California Fund;
Shareholders of the Connecticut Fund will receive shares of the
Successor Connecticut Fund having a total net asset value equal to the
total net asset value of his or her holdings in the Connecticut Fund on
the date of the Reorganization of the Connecticut Fund;
Shareholders of the Florida Fund will receive shares of the Successor
Florida Fund having a total net asset value equal to the total net asset
value of his or her holdings in the Florida Fund on the date of the
Reorganization of the Florida Fund;
Shareholders of the Georgia Fund will receive shares of the Successor
Georgia Fund having a total net asset value equal to the total net asset
value of his or her holdings in the Georgia Fund on the date of the
Reorganization of the Georgia Fund;
Shareholders of the Maryland Fund will receive shares of the Successor
Maryland Fund having a total net asset value equal to the total net
asset value of his or her holdings in the Maryland Fund on the date of
the Reorganization of the Maryland Fund;
<PAGE>
Shareholders of the Massachusetts Fund will receive shares of the
Successor Massachusetts Fund having a total net asset value equal to the
total net asset value of his or her holdings in the Massachusetts Fund
on the date of the Reorganization of the Massachusetts Fund;
Shareholders of the Michigan Fund will receive shares of the Successor
Michigan Fund having a total net asset value equal to the total net
asset value of his or her holdings in the Michigan Fund on the date of
the Reorganization of the Michigan Fund;
Shareholders of the Minnesota Fund will receive shares of the Successor
Minnesota Fund having a total net asset value equal to the total net
asset value of his or her holdings in the Minnesota Fund on the date of
the Reorganization of the Minnesota Fund;
Shareholders of the New Jersey Fund will receive shares of the Successor
New Jersey Fund having a total net asset value equal to the total net
asset value of his or her holdings in the New Jersey Fund on the date of
the Reorganization of the New Jersey Fund;
Shareholders of the New York Fund will receive shares of the Successor
New York Fund having a total net asset value equal to the total net
asset value of his or her holdings in the New York Fund on the date of
the Reorganization of the New York Fund;
Shareholders of the North Carolina Fund will receive shares of the
Successor North Carolina Fund having a total net asset value equal to
the total net asset value of his or her holdings in the North Carolina
Fund on the date of the Reorganization of the North Carolina Fund;
Shareholders of the Ohio Fund will receive shares of the Successor Ohio
Fund having a total net asset value equal to the total net asset value
of his or her holdings in the Ohio Fund on the date of the
Reorganization of the Ohio Fund;
Shareholders of the Pennsylvania Fund will receive shares of the
Successor Pennsylvania Fund having a total net asset value equal to the
total net asset value of his or her holdings in the Pennsylvania Fund on
the date of the Reorganization of the Pennsylvania Fund;
Shareholders of the Tennessee Fund will receive shares of the Successor
Tennessee Fund having a total net asset value equal to the total net
asset value of his or her holdings in the Tennessee Fund on the date of
the Reorganization of the Tennessee Fund; and
Shareholders of the Virginia Fund will receive shares of the Successor
Virginia Fund having a total net asset value equal to the total net
asset value of his or her holdings in the Virginia Fund on the date of
the Reorganization of the Virginia Fund.
MMOT is an open-end management investment company that consists of a
number of portfolios, each of which has its own investment objective. The
Successor Funds are newly-organized portfolios of MMOT (initially "shell"
portfolios). Each Successor Fund has the same investment objective as the
corresponding Fund that is merging into the Successor Fund. The permissible
investments for the Successor Funds are the same as the permissible investments
for the Funds, and the Successor Funds use comparable investment strategies.
Each of the Funds pursues its investment objective by investing in a portfolio
of high-quality tax-exempt securities maturing in 13 months or less, and each
Successor Fund pursues its investment objective by investing in a portfolio of
high-quality tax-exempt securities maturing in 397 days or less. The average
maturity of each Fund's and each Successor Fund's portfolio, computed on a
dollar weighted basis, will be 90 days or less. Each of the Funds and the
Successor Funds are money market mutual funds that seek to stabilize their
offering and redemption prices at $1.00 per share, although there can be no
assurance that any of the Funds or the Successor Funds will be able to do so.
(See "Comparison of Investment Policies and Risk Factors" below.) An investment
in any of the Funds or the Successor Funds is neither insured nor guaranteed by
the U.S. government.
<PAGE>
As a condition to each Reorganization, the Trust and MMOT will receive
an opinion of counsel that each Reorganization will be considered a tax-free
"reorganization" under applicable provisions of the Internal Revenue Code, so
that no gain or loss for federal income tax purposes will be recognized by
either the Trust or MMOT or by the shareholders of any Fund. The tax basis of
each Successor Fund's shares received by the corresponding Fund's shareholders
will be the same as the tax basis of their shares in the Fund.
Significant components of the Reorganizations and provisions of the
Reorganization Agreements are summarized below; however, this summary of the
Reorganization Agreements is qualified in its entirety by reference to the full
text of each of the seventeen Reorganization Agreements between the Trust, on
behalf of its portfolios, the Alabama Fund, Arizona Fund, California Fund,
Connecticut Fund, Florida Fund, Georgia Fund, Maryland Fund, Massachusetts
Fund, Michigan Fund, Minnesota Fund, New Jersey Fund, New York Fund, North
Carolina Fund, Ohio Fund, Pennsylvania Fund, Tennessee Fund and Virginia Fund,
and MMOT, on behalf of its portfolios, the Successor Alabama Fund, Successor
Arizona Fund, Successor California Fund, Successor Connecticut Fund, Successor
Florida Fund, Successor Georgia Fund, Successor Maryland Fund, Successor
Massachusetts Fund, Successor Michigan Fund, Successor Minnesota Fund,
Successor New Jersey Fund, Successor New York Fund, Successor North Carolina
Fund, Successor Ohio Fund, Successor Pennsylvania Fund, Successor Tennessee
Fund and Successor Virginia Fund, respectively. A copy of the Reorganization
Agreement between the Trust, on behalf of the Alabama Fund, and MMOT, on behalf
of the Successor Alabama Fund, is attached as Appendix I to this Proxy
Statement. The sixteen other Reorganization Agreements, between the Trust, on
behalf each Fund, and MMOT, on behalf of each corresponding Successor Fund, are
identical to the Reorganization Agreement attached as Appendix I, except for
each Reorganization Agreement's identification of the respective Fund and the
Successor Fund.
DESCRIPTION OF THE REORGANIZATION AGREEMENTS
The discussion in this Proxy Statement refers to the Reorganization
Agreement between the Trust, on behalf of the Alabama Fund, and MMOT, on behalf
of the Successor Alabama Fund. This discussion also applies to the other
sixteen Reorganizations, and describes the provisions of the other sixteen
Reorganization Agreements.
The Reorganization Agreement for the Alabama Fund provides that all of
the assets of the Alabama Fund will be transferred to the Successor Alabama
Fund, subject to the liabilities of the Alabama Fund. Each holder of shares of
the Alabama Fund will receive the same number (with the same aggregate value)
of shares of the Successor Alabama Fund as the shareholder had in the Alabama
Fund immediately prior to the Reorganization. The Alabama Fund's shareholders
will not pay a sales charge, commission or other transaction cost in connection
with their receipt of the shares of the Successor Alabama Fund.
Following the transfer of assets (subject to liabilities) of the Alabama
Fund to the Successor Alabama Fund, and the issuance of shares by the Successor
Alabama Fund to the Alabama Fund, the Alabama Fund will distribute the shares of
the Successor Alabama Fund received by the Alabama Fund among the shareholders
of the Alabama Fund in proportion to the number of shares each such shareholder
holds in the Alabama Fund. Following the Reorganization, shareholders of the
Alabama Fund will be shareholders of the Successor Alabama Fund. Upon the
completion of the Reorganization, the Trust will be deregistered as an
investment company under the 1940 Act and its existence terminated under state
law. The stock transfer books of the Trust will be permanently closed after the
Reorganization. MMOT will not issue share certificates with respect to shares of
the Successor Alabama Fund issued in connection with the Reorganization.
The Reorganization is subject to certain conditions, including: approval
of the Reorganization Agreement and the transactions and exchange contemplated
thereby as described in this Proxy Statement by the shareholders of the Alabama
Fund; the receipt of a legal opinion described in the Reorganization Agreement
regarding tax matters; the receipt of certain certificates from the parties
concerning the continuing accuracy of the representations and warranties in the
Reorganization Agreement and other matters; and the parties' performance, in all
material respects, of the agreements and undertakings in the Reorganization
Agreement. Assuming satisfaction of the conditions in the Reorganization
Agreement, the Reorganization is expected to occur on or after December 1, 1999.
<PAGE>
The Alabama Fund's investment adviser is responsible for the payment of
all expenses of the Reorganization incurred by either party, whether or not the
Reorganization is consummated. Such expenses include, but are not limited to,
legal fees, registration fees, transfer taxes (if any), the fees of banks and
transfer agents and a portion of the costs of preparing, printing, copying and
mailing proxy solicitation materials to the Alabama Fund's shareholders.
The Reorganization may be terminated at any time prior to its
consummation by either the Trust or MMOT if circumstances should develop that,
in the opinion of either the Board of the Trust or the Board of Trustees of
MMOT, make proceeding with the Reorganization Agreement inadvisable. The
Reorganization Agreement provide further that at any time prior to the
consummation of the Reorganization: (i) the parties thereto may amend or modify
any of the provisions of the Reorganization Agreement provided that such
amendment or modification would not have a material adverse effect on the
benefits intended under the Reorganization Agreement and it would be consistent
with the best interests of the shareholders of the Alabama Fund and the
Successor Alabama Fund; and (ii) the parties may waive any of the conditions set
forth in the Reorganization Agreement if, in the judgment of the waiving party,
such waiver will not have a material adverse effect on the benefits intended
under the Reorganization Agreement to the shareholders of the Alabama Fund or
the Successor Alabama Fund, as the case may be.
REASONS FOR THE PROPOSED REORGANIZATION
The Trust was established as a Massachusetts business trust in 1989.
Although the Board has been satisfied with the Alabama Fund's performance, it,
and the Trust's distributor and administrator, believe that reorganizing the
Alabama Fund as a portfolio of MMOT could streamline the Alabama Fund's
distribution and administration. Accordingly, the Trust's distributor and
administrator have recommended to the Board of Trustees of MMOT that the
Successor Alabama Fund be organized for the purpose of acquiring the Alabama
Fund's assets and thereby reorganizing the Alabama Fund as a portfolio of MMOT.
The Trust's distributor and administrator similarly recommended to the Trustees
of the Trust that the Alabama Fund's assets be transferred to MMOT, on behalf of
the Successor Alabama Fund, in order to reorganize it as a separate portfolio of
MMOT. In connection with this proposal, the Trust's distributor and
administrator emphasized the comparable advisory services provided the Alabama
Fund and the Successor Alabama Fund, the identical investment objectives and the
similar investment policies of the Alabama Fund and the Successor Alabama Fund,
and the administrative convenience and simplification of management achievable
by operating the Alabama Fund as a portfolio of MMOT.
BOARD OF TRUSTEES' CONSIDERATIONS AND RECOMMENDATIONS
The Trust's Board of Trustees, at its meeting on May 18, 1999, concluded
that the reorganization of the Alabama Fund as a portfolio of MMOT could provide
for streamlined distribution and administration. The Trust's Trustees also noted
that the Alabama Fund's shareholders would continue to receive the same quality
of investment management services from the Successor Alabama Fund's investment
adviser, which is also the Alabama Fund's current investment adviser. The
Trust's Board of Trustees, including a majority of the Trustees who are not
"interested persons," additionally determined that participation in the
Reorganization is in the best interests of the Alabama Fund, and that the
interests of the Alabama Fund's shareholders would not be diluted as a result of
effecting the Reorganization. Based upon the foregoing considerations, and the
fact that shareholders of the Alabama Fund will not suffer any adverse federal
income tax consequences as a result of the Reorganization, the Board of Trustees
of the Trust unanimously voted to approve, and recommended to the Alabama Fund's
shareholders the approval of, the Reorganization.
The Board of Trustees of MMOT, including the Trustees who are not
"interested persons," at the Board's meeting on May 18, 1999, unanimously
concluded that consummation of the Reorganization is in the best interests of
MMOT and the shareholders of the Successor Alabama Fund, and that the interests
of the Successor Alabama Fund's shareholders would not be diluted as a result of
effecting the Reorganization. As a consequence, the Board of Trustees of MMOT
unanimously approved the Reorganization Agreement.
<PAGE>
Under the current terms of the Declaration of Trust, the approval of
each Reorganization requires the affirmative vote of more than fifty percent of
the aggregate number of shares of the respective Fund entitled to vote on the
matter. If Proposal #2(a) described in this Proxy Statement is approved,
however, that amendment to the Declaration of Trust will become effective
immediately, and this Proposal #3 to approve the Reorganizations will require
the affirmative vote of a majority of the outstanding voting shares of each Fund
entitled to vote on the matter as described in this Proxy Statement. (See
"PROXIES, QUORUM AND VOTING AT THE MEETING" below.)
FEDERAL INCOME TAX CONSEQUENCES
As a condition to the Reorganization, the Trust, on behalf of the
Alabama Fund, and MMOT, on behalf of the Successor Alabama Fund, will receive an
opinion from Dickstein Shapiro Morin & Oshinsky LLP, special counsel to the
Trust and MMOT, to the effect that, on the basis of the existing provisions of
the Internal Revenue Code of 1986, as amended (the "Code"), current
administrative rules and court decisions, for federal income tax purposes: (1)
the Reorganization as set forth in the Reorganization Agreement will constitute
a tax-free reorganization under section 368(a)(1)(F) of the Code, and the
Alabama Fund and the Successor Alabama Fund each will be a "party to the
reorganization" within the meaning of section 368(b) of the Code; (2) no gain or
loss will be recognized by the Successor Alabama Fund upon its receipt of the
Alabama Fund's assets (subject to the liabilities of the Alabama Fund) in
exchange for the Successor Alabama Fund shares; (3) no gain or loss will be
recognized by the Alabama Fund upon the transfer of its assets (subject to the
liabilities of the Alabama Fund) to the Successor Alabama Fund in exchange for
Successor Alabama Fund shares or upon the distribution (whether actual or
constructive) of the Successor Alabama Fund shares to the Alabama Fund
shareholders in exchange for their shares of the Alabama Fund; (4) no gain or
loss will be recognized by shareholders of the Alabama Fund upon exchange of
their Alabama Fund shares for the Successor Alabama Fund shares; (5) the tax
basis for the Alabama Fund's assets acquired by the Successor Alabama Fund will
be the same as the tax basis of such assets to the Alabama Fund immediately
prior to the Reorganization; (6) the tax basis of the Successor Alabama Fund
shares received by each shareholder of the Alabama Fund pursuant to the
Reorganization will be the same as the tax basis of the Alabama Fund shares held
by such shareholder immediately prior to the Reorganization; (7) the holding
period of the assets of the Alabama Fund in the hands of the New Alabama Fund
will include the period during which those assets were held by the Alabama Fund;
and (8) the holding period of the Successor Alabama Fund shares received by each
shareholder of the Alabama Fund pursuant to the Reorganization will include the
period during which the Alabama Fund shares exchanged therefor were held by such
shareholder, provided the Alabama Fund shares were held as capital assets on the
date of the Reorganization.
The Trust and MMOT have not sought a tax ruling from the Internal
Revenue Service ("IRS"), but are acting in reliance upon the opinion of counsel
discussed in the previous paragraph. That opinion is not binding on the IRS and
does not preclude the IRS from adopting a contrary position. Shareholders
should consult their own advisers concerning the potential tax consequences to
them, including state and local income taxes.
COMPARISON OF INVESTMENT POLICIES AND RISK FACTORS
The investment objective of the Alabama Fund is identical to the
investment objective of the Successor Alabama Fund. Investments in both the
Alabama Fund and the Successor Alabama Fund are not insured or guaranteed by
the U.S. government. Since the Alabama Fund and the Successor Alabama Fund are
managed to maintain a constant net asset value, they have little risk of
principal loss. However, investments in the Alabama Fund and the Successor
Alabama Fund are subject to certain risks, which include, but are not limited
to, the following: the possibility that issuers of securities will have their
credit ratings downgraded; the ability of the issuers of securities to meet
their obligations for payment of principal and interest when due or to
repurchase such securities as previously agreed; interest rate or market risk,
which is the potential for fluctuations in the prices of debt securities, due
to changing interest rates (e.g., when interest rates rise, bond prices
generally decline); prepayment or call risk, which is the likelihood that,
during periods of falling interest rates, debt securities will be prepaid (or
"called") prior to maturity, requiring the proceeds to be invested by the
Alabama Fund or the Successor Alabama Fund at a generally lower interest rate;
and international economic and political developments, which may have an impact
on issuers of securities owned by the Alabama Fund or the Successor Alabama
Fund. These risks could result in a loss of value of an investment in the
Alabama Fund, or in the Successor Alabama Fund when it commences operations.
<PAGE>
The permissible investments for the Alabama Fund and the Successor
Alabama Fund are identical. The investment policies and restrictions of the
Successor Alabama Fund have been established so as to be comparable to the
current investment policies and restrictions of the Alabama Fund. The
differences between the investment policies and restrictions of the Alabama
Fund and those of the Successor Alabama Fund result from the standardization of
certain investment policies and restrictions among the Federated Funds,
including the Successor Alabama Fund, and the elimination of certain investment
limitations which govern the Alabama Fund and had been previously required
under state law. A number of these investment limitations have been preempted
and are no longer applicable, and hence, the Successor Alabama Fund is not
required to adopt them. Appendix II to this Proxy Statement identifies the
differences between the investment policies and restrictions of the Alabama
Fund and the Successor Alabama Fund. (Appendix II to this Proxy Statement also
identifies the differences between the investment policies and restrictions of
each of the sixteen other Funds and their corresponding New Funds subject to
Reorganizations.) The investment adviser to the Alabama Fund and the Successor
Alabama Fund does not believe that the differences in investment policies and
restrictions are material. In addition, the adviser believes that the level of
risk of an investment in the Alabama Fund is comparable to, and does not
materially differ from, the level of risk of an investment in the Successor
Alabama Fund.
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS AND OBLIGATIONS
Each of the Trust and MMOT is organized as a business trust pursuant to
a Declaration of Trust under the laws of the Commonwealth of Massachusetts. The
rights of shareholders of the Funds and of the shareholders of the Successor
Funds relating to voting, distributions and redemptions, as set forth in the
applicable Declaration of Trust and By-Laws, are substantively identical. Set
forth below is a brief summary of the significant rights of shareholders of the
Trust and of MMOT.
Neither the Trust nor MMOT is required to hold annual meetings of
shareholders. Shareholder approval is necessary only for certain changes in
operations or the election of Trustees under certain circumstances. A special
meeting of shareholders of either the Trust or MMOT for any permissible purpose
shall be called by the Trustees upon the written request of the holders of at
least 10% of the outstanding shares of the Trust or MMOT, as the case may be.
Each share of the Trust and MMOT is entitled to one vote. All shares of MMOT
have equal voting rights, except that only shares of each Successor Fund is
entitled to vote on matters only affecting that Successor Fund.
Under certain circumstances, shareholders of the Funds and shareholders
of the Successor Funds may be held personally liable as partners under
Massachusetts law for obligations of the Trust or of MMOT, respectively. To
protect their shareholders, the Trust and MMOT have filed legal documents with
the Commonwealth of Massachusetts that expressly disclaim the liability of their
shareholders for such acts or obligations of the Trust or MMOT. These documents
require that notice of this disclaimer be given in each agreement, obligation or
instrument that the Trust or MMOT or their Trustees enter into or sign.
In the unlikely event a shareholder is held personally liable for the
Funds' or the Successor Funds' obligations, the Funds and the Successor Funds
are each required to use their property to protect or compensate the
shareholder. On request, the Funds and the Successor Funds will defend any claim
made and pay any judgment against a shareholder for any act or obligation of the
Funds or Successor Funds, as applicable. Therefore, financial loss resulting
from liability as a shareholder will occur only if the Trust or MMOT cannot meet
its obligations to indemnify shareholders and pay judgments against them from
the assets of the Trust or MMOT.
PURCHASE AND REDEMPTION INFORMATION, EXCHANGE PRIVILEGES, DISTRIBUTION AND
PRICING
The purchase, redemption, exchange privileges and distribution policies
of the Funds are identical to the purchase, redemption, exchange privileges and
distribution policies of the Successor Funds.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS OF EACH FUND
VOTE "FOR" APPROVAL OF THE REORGANIZATION AGREEMENT
<PAGE>
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 or a Fund 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 or the Fund 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. Trustees are elected by a plurality vote, as described under Proposal #1
in this Proxy Statement. The favorable vote of a majority of the outstanding
voting shares of the Trust is required to approve each of the proposed
amendments to the Declaration of Trust. If Proposal #2(a) in this Proxy
Statement is approved by shareholders, then the favorable vote of a majority of
the outstanding voting shares of a Fund, as described above, will be required to
approve the Fund's Reorganization, as described in Proposal #3. If Proposal
#2(a) is not approved by shareholders, then the affirmative vote of a majority
of the shares of a Fund entitled to be cast will be required to approve the
Fund's Reorganization.
Any person giving a proxy has the power to revoke it any time prior to
its exercise by executing a superseding proxy or by submitting a written notice
of revocation to the Secretary of the Trust. In addition, although mere
attendance at the Meeting will not revoke a proxy, a shareholder present at the
Meeting may withdraw his or her proxy and vote in person. All properly executed
and unrevoked proxies received in time for the Meeting will be voted in
accordance with the instructions contained in the proxies. IF NO INSTRUCTION IS
GIVEN ON THE PROXY, THE PERSONS NAMED AS PROXIES WILL VOTE THE SHARES
REPRESENTED THEREBY IN FAVOR OF THE MATTERS SET FORTH IN THE ATTACHED NOTICE.
In order to hold the Meeting, a "quorum" of shareholders must be
present. Holders of more than fifty percent of the total number of outstanding
shares of all series and classes entitled to vote, present in person or by
proxy, shall be required to constitute a quorum for the purpose of voting on the
election of Trustees and the amendments to the Declaration of Trust. Holders of
more than fifty percent of the total number of outstanding shares of a Fund
entitled to vote, present in person or by proxy, shall be required to constitute
a quorum for the purpose of voting on the Fund's Reorganization.
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 plurality 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.
<PAGE>
As referred to in this Proxy Statement, the "Federated Fund Complex,"
"The Funds" or "Funds" include the following investment companies: Cash Trust
Series, Inc.; Cash Trust Series II; CCB Funds; Federated Adjustable Rate U.S.
Government Fund, Inc.; Federated American Leaders Fund, Inc.; Federated ARMs
Fund; Federated Core Trust; Federated Insurance Series; Federated Equity Income
Fund, Inc.; Federated Fund for U.S. Government Securities, Inc.; Federated GNMA
Trust; Federated Government Income Securities, Inc.; Federated Government Trust;
Federated High Income Bond Fund, Inc.; Federated High Yield Trust; Federated
Income Securities Trust; Federated Income Trust; Federated Index Trust;
Federated Institutional Trust; Federated Insurance Series; Federated Municipal
Opportunities Fund, Inc.; Federated Municipal Securities Fund, Inc.; Federated
Municipal Trust; Federated Short-Term Municipal Trust; Federated Stock and Bond
Fund, Inc.; Federated Stock Trust; Federated Tax-Free Trust; Federated Total
Return Series, Inc.; Federated U.S. Government Bond Fund; Federated U.S.
Government Securities Fund: 1-3 Years; Federated U.S. Government Securities
Fund: 2-5 Years; Federated U.S. Government Securities Fund: 5-10 Years;
Federated Utility Fund, Inc.; Fixed Income Securities, Inc.; Intermediate
Municipal Trust; International Series, Inc.; Investment Series Funds, Inc.;
Edward D. Jones & Co. Daily Passport Cash Trust; Liberty Term Trust, Inc. -
1999; Liberty U.S. Government Money Market Trust; Managed Series Trust; Money
Market Management, Inc.; Money Market Obligations Trust; Money Market
Obligations Trust II; Money Market Trust; Municipal Securities Income Trust;
Newpoint Funds; Regions Funds; RIGGS Funds; Tax-Free Instruments Trust; The
Planters Funds; WesMark Funds; WCT Funds; and World Investment Series, Inc.
SHARE OWNERSHIP OF THE TRUSTEES
Officers and Trustees of the Trust own less than 1% of each Fund's
outstanding shares.
At the close of business on the Record Date, the following persons owned,
to the knowledge of management, more than 5% of the outstanding shares of the
Alabama Fund: [TO
BE INSERTED]
At the close of business on the Record Date, the following persons owned,
to the knowledge of management, more than 5% of the outstanding shares of the
Arizona Fund: [TO BE INSERTED]
At the close of business on the Record Date, the following persons owned,
to the knowledge of management, more than 5% of the outstanding shares of the
California Fund: [TO BE INSERTED]
At the close of business on the Record Date, the following persons owned,
to the knowledge of management, more than 5% of the outstanding shares of the
Connecticut Fund: [TO BE INSERTED]
At the close of business on the Record Date, the following persons owned,
to the knowledge of management, more than 5% of the outstanding shares of the
Florida Fund: [TO BE INSERTED]
At the close of business on the Record Date, the following persons owned,
to the knowledge of management, more than 5% of the outstanding shares of the
Georgia Fund: [TO BE INSERTED]
At the close of business on the Record Date, the following persons owned,
to the knowledge of management, more than 5% of the outstanding shares of the
Maryland Fund: [TO BE INSERTED]
At the close of business on the Record Date, the following persons owned,
to the knowledge of management, more than 5% of the outstanding shares of the
Massachusetts Fund: [TO BE INSERTED]
At the close of business on the Record Date, the following persons owned,
to the knowledge of management, more than 5% of the outstanding shares of the
Michigan Fund: [TO BE INSERTED]
At the close of business on the Record Date, the following persons owned,
to the knowledge of management, more than 5% of the outstanding shares of the
Minnesota Fund: [TO BE INSERTED]
At the close of business on the Record Date, the following persons owned,
to the knowledge of management, more than 5% of the outstanding shares of the
New Jersey Fund: [TO BE INSERTED]
<PAGE>
At the close of business on the Record Date, the following persons owned,
to the knowledge of management, more than 5% of the outstanding shares of the
New York Fund: [TO BE INSERTED]
At the close of business on the Record Date, the following persons owned,
to the knowledge of management, more than 5% of the outstanding shares of the
North Carolina
Fund: [TO BE INSERTED]
At the close of business on the Record Date, the following persons owned,
to the knowledge of management, more than 5% of the outstanding shares of the
Ohio Fund: [TO BE INSERTED]
At the close of business on the Record Date, the following persons owned,
to the knowledge of management, more than 5% of the outstanding shares of the
Pennsylvania Fund: [TO BE INSERTED] At the close of business on the Record Date,
the following persons owned, to the knowledge of management, more than 5% of the
outstanding shares of the Tennessee Fund: [TO BE INSERTED]
At the close of business on the Record Date, the following persons owned,
to the knowledge of management, more than 5% of the outstanding shares of the
Virginia Fund: [TO BE INSERTED]
<PAGE>
<TABLE>
<CAPTION>
TRUSTEE COMPENSATION
NAME AND POSITION AGGREGATE TOTAL COMPENSATION PAID
WITH TRUST COMPENSATION FROM FUND COMPLEX+
FROM
TRUST1#
<S> <C> <C>
- -------------------------------- ---------------- ------------------------------------------------
John F. Donahue*@ $0 $0 for the Trust and 54 other
Chairman and Trustee investment companies in the Fund Complex
Thomas G. Bigley $4,076.31 $113,860.22 for the Trust and 54 other
Trustee investment companies in the Fund Complex
John T. Conroy, Jr. $4,484.62 $125,264.48 for the Trust and 54 other
Trustee investment companies in the Fund Complex
John F. Cunningham** $0 $125,264.48 for the Trust and 46 other
Trustee investment companies in the Fund Complex
Lawrence D. Ellis, M.D. * $4,076.31 $113,860.22 for the Trust and 54 other
Trustee investment companies in the Fund Complex
Glen R. Johnson* $0 $0 for the Trust and 16 other
President and Trustee investment companies in the Fund Complex
Peter E. Madden $4,076.31 $113,860.22 for the Trust and 54 other
Trustee investment companies in the Fund Complex
Charles F. Mansfield, Jr.** $0 $0 for the Trust and 50 other
Trustee investment companies in the Fund Complex
John E. Murray, Jr., J.D., $4,076.31 $113,860.22 for the Trust and 54 other
S.J.D. @ investment companies in the Fund Complex
Trustee
Marjorie P. Smuts $4,076.31 $113,860.22 for the Trust and 54 other
Trustee investment companies in the Fund Complex
John S. Walsh** $0 $0 for the Trust and 48 other
Trustee investment companies in the Fund Complex
</TABLE>
1 Information is furnished for the fiscal year ended December 31, 1998.
# The aggregate compensation is provided for the Trust which is comprised of
seventeen portfolios.
+ The information is provided for the last calendar year.
* The Trustee is deemed to be an "interested person" as defined in the 1940 Act.
@ Member of the Executive Committee.
** Messrs. Cunningham, Mansfield and Walsh became members of the Board of
Trustees on January 1, 1999. They did not receive any fees from the Fund Complex
as of the last calendar year.
During the fiscal year ended December 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.
<PAGE>
The Executive Committee of the Board of Trustees handles the
responsibilities of the Board between meetings of the Board. Other than its
Executive Committee, the Trust has one Board committee, the Audit Committee.
Generally, the function of the Audit Committee is to assist the Board of
Trustees in fulfilling its duties relating to the Trust's accounting and
financial reporting practices and to serve as a direct line of communication
between the Board of Trustees and the independent auditors. The specific
functions of the Audit Committee include recommending the engagement or
retention of the independent auditors, reviewing with the independent auditors
the plan and the results of the auditing engagement, approving professional
services provided by the independent auditors prior to the performance of such
services, considering the range of audit and non-audit fees, reviewing the
independence of the independent auditors, reviewing the scope and results of the
Trust's procedures for internal auditing, and reviewing the Trust's system of
internal accounting controls.
For the most recently completed fiscal year, Messrs. Conroy, Madden and
Murray served on the Audit Committee. These Trustees are not interested Trustees
of the Trust. During the fiscal year ended December 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 AND INCUMBENT TRUSTEES OF THE TRUST
The executive officers of the Trust are elected annually by the Board of
Trustees. Each officer holds the office until qualification of his successor.
The names and birth dates of the executive officers of the Trust, as well as of
the incumbent Trustees who have previously been elected by shareholders, and
their principal occupations during the last five years, are set forth below:
JOHN F. DONAHUE
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Birth date: July 28, 1924
Chairman and Trustee
Date Became an Officer and a Trustee: September 1, 1989
Chief Executive Officer and Director or Trustee of the Federated Fund
Complex; Chairman and Director, Federated Investors, Inc.; Chairman and Trustee,
Federated Investment Management Company; Chairman and Director, Federated
Investment Counseling and Federated Global Investment Management Corp.;
Chairman, Passport Research, Ltd. Mr. Donahue is the father of J. Christopher
Donahue, Executive Vice President of the Trust and Nominee for Trustee.
THOMAS G. BIGLEY
15 Old Timber Trail
Pittsburgh, PA
Birth date: February 3, 1934
Trustee
Date Became a Trustee: November 15, 1994
Director or Trustee of the Federated Fund Complex; Director, Member of Executive
Committee, Children's Hospital of Pittsburgh; Director, Robroy Industries, Inc.
(coated steel conduits/computer storage equipment); formerly, Senior Partner,
Ernst & Young LLP; Director, MED 3000 Group, Inc. (physician practice
management); Director and Member of Executive Committee, University of
Pittsburgh.
<PAGE>
JOHN T. CONROY, JR.
Wood/IPC Commercial Dept.
John R. Wood Associates, Inc. Realtors
3255 Tamiami Trail North
Naples, FL
Birth date: June 23, 1937
Trustee
Date Became a Trustee: August 21, 1991
Director or Trustee of the Federated Fund Complex; President, Investment
Properties Corporation; Senior Vice President, John R. Wood and Associates,
Inc., Realtors; Partner or Trustee in private real estate ventures in Southwest
Florida; formerly: President, Naples Property Management, Inc. and Northgate
Village Development
Corporation.
LAWRENCE D. ELLIS, M.D.
3471 Fifth Avenue
Suite 1111
Pittsburgh, PA
Birth date: October 11, 1932
Trustee
Date Became a Trustee: September 1, 1989
Director or Trustee of the Federated Fund Complex; Professor of Medicine,
University of Pittsburgh; Medical Director, University of Pittsburgh Medical
Center-Downtown; Hematologist, Oncologist, and Internist, University of
Pittsburgh Medical Center; Member, National Board of Trustees, Leukemia Society
of America.
GLEN R. JOHNSON
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Birth date: May 2, 1929
President and Trustee
Date Became a Trustee and Officer: September 1, 1989
Staff member, Federated Securities Corp.
PETER E. MADDEN
One Royal Palm Way
100 Royal Palm Way
Palm Beach, FL
Birth date: March 16, 1942
Trustee
Date Became a Trustee: August 21, 1991
Director or Trustee of the Federated Fund Complex; formerly:
Representative, Commonwealth of Massachusetts General Court; President, State
Street Bank and Trust Company and State Street Corporation. Previous Positions:
Director, VISA USA and VISA International; Chairman and Director, Massachusetts
Bankers Association; Director, Depository Trust Corporation; Director, The
Boston Stock Exchange.
<PAGE>
JOHN E. MURRAY, JR., J.D., S.J.D.
President, Duquesne University
Pittsburgh, PA
Birth date: December 20, 1932
Trustee
Date Became a Trustee: February 14, 1995
Director or Trustee of the Federated Fund Complex; President, Law
Professor, Duquesne University; Consulting Partner, Mollica & Murray; Director,
Michael Baker Corp. (engineering, construction, operations, and technical
services). Previous Positions: Dean and Professor of Law, University of
Pittsburgh School of Law; Dean and Professor
of Law, Villanova University School of Law.
MARJORIE P. SMUTS
4905 Bayard Street
Pittsburgh, PA
Birth date: June 21, 1935
Trustee
Date Became a Trustee: September 1, 1989
Director or Trustee of the Federated Fund Complex; Public
Relations/Marketing/Conference Planning. Previous Positions: National
Spokesperson, Aluminum Company of America; television producer; business owner.
J. CHRISTOPHER DONAHUE
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Birth date: April 11, 1949
Executive Vice President
Date Became an Officer: June 1, 1995
President or Executive Vice President of the Federated Fund Complex; Director or
Trustee of some of the Funds in the Federated Fund Complex; President, Chief
Executive Officer and Director, Federated Investors, Inc.; President and
Trustee, Federated Investment Management Company; President and Trustee,
Federated Investment Counseling; President and Director, Federated Global
Investment Management Corp.; President, Passport Research, Ltd.; Trustee,
Federated Shareholder Services Company; Director, Federated Services Company.
Mr. Donahue is the son of John F. Donahue, Chairman and Trustee of the Trust.
EDWARD C. GONZALES
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Birth date: October 22, 1930
Executive Vice President
Date Became an Officer: June 1, 1995
Trustee or Director of some of the Funds in the Federated Fund Complex;
President, Executive Vice President and Treasurer of some of the Funds in the
Federated Fund Complex; Vice Chairman, Federated Investors, Inc.; Vice
President, Federated Investment Management Company, Federated Investment
Counseling, Federated Global Investment Management Corp. and Passport Research,
Ltd.; Executive Vice President and Director, Federated Securities Corp.;
Trustee, Federated Shareholder Services Company.
<PAGE>
JOHN W. MCGONIGLE
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Birth date: October 26, 1938
Executive Vice President and Secretary
Date Became an Officer: September 1, 1989
Executive Vice President and Secretary of the Federated Fund Complex; Executive
Vice President, Secretary, and Director, Federated Investors, Inc.; Trustee,
Federated Investment Management Company; Trustee, Federated Investment
Counseling; Director, Federated Global Investment Management Corp.; Director,
Federated Services Company; Director, Federated Securities Corp.
RICHARD J. THOMAS
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Birth date: June 17, 1954
Treasurer
Date Became an Officer: November 19, 1998
Treasurer of the Federated Fund Complex; Vice President - Funds Financial
Services Division, Federated Investors, Inc.; formerly: various management
positions within Funds Financial Services Division of Federated Investors, Inc.
WILLIAM D. DAWSON, III
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Birth date: March 3, 1949
Chief Investment Officer
Date Became an Officer: November 19, 1998
Chief Investment Officer of the Trust and various other Funds in the Federated
Fund Complex; Executive Vice President, Federated Investment Counseling,
Federated Global Investment Management Corp., Federated Investment Management
Company and Passport Research, Ltd.; Registered Representative, Federated
Securities Corp.; Portfolio Manager, Federated Administrative Services; Vice
President and Senior Vice President, Federated Investors, Inc.; Formerly:
Executive Vice President and Senior Vice President, Federated Investment
Counseling Institutional Portfolio Management Services Division; Senior Vice
President, Federated Investment Management Company and Passport Research, Ltd.
None of the Officers of the Trust received salaries from the Trust
during the fiscal year ended December 31, 1998.
<PAGE>
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 Federated 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
October 8, 1999
<PAGE>
FEDERATED MUNICIPAL TRUST
ALABAMA MUNICIPAL CASH TRUST
ARIZONA MUNICIPAL CASH TRUST
CALIFORNIA MUNICIPAL CASH TRUST
CONNECTICUT MUNICIPAL CASH TRUST
FLORIDA MUNICIPAL CASH TRUST
GEORGIA MUNICIPAL CASH TRUST
MARYLAND MUNICIPAL CASH TRUST
MASSACHUSETTS MUNICIPAL CASH TRUST
MICHIGAN MUNICIPAL CASH TRUST
MINNESOTA MUNICIPAL CASH TRUST
NEW JERSEY MUNICIPAL CASH TRUST
NEW YORK MUNICIPAL CASH TRUST
NORTH CAROLINA MUNICIPAL CASH TRUST
OHIO MUNICIPAL CASH TRUST
PENNSYLVANIA MUNICIPAL CASH TRUST
TENNESSEE MUNICIPAL CASH TRUST
VIRGINIA MUNICIPAL CASH TRUST
INVESTMENT ADVISER
FEDERATED INVESTMENT MANAGEMENT COMPANY
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
DISTRIBUTOR
FEDERATED SECURITIES CORP.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
ADMINISTRATOR
FEDERATED SERVICES COMPANY
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of Alabama
Municipal Cash Trust (the "Alabama Fund"), a portfolio of Federated Municipal
Trust (the "Trust"), hereby appoint Patricia F. Conner, Gail Cagney, William
Haas, Suzanne W. Land and Ann M. Scanlon, or any one of them, true and lawful
attorneys, with the power of substitution of each, to vote all shares of the
Alabama Fund which the undersigned is entitled to vote at the Special Meeting of
Shareholders (the "Meeting") to be held on November 19, 1999, at 5800 Corporate
Drive, Pittsburgh, Pennsylvania, at 2:00 p.m. and at any adjournment thereof.
The attorneys named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. Discretionary authority
is hereby conferred as to all other matters as may properly come before the
Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF FEDERATED
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 NICHOLAS P. CONSTANTAKIS, JOHN F. CUNNINGHAM,
J. CHRISTOPHER DONAHUE, CHARLES F. MANSFIELD, JR. AND
JOHN S. WALSH AS TRUSTEES OF THE TRUST
FOR [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
VOTE FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR" a
particular nominee, mark the "VOTE FOR ALL EXCEPT" box
and strike a line through the name of each nominee for
whom you are NOT voting. Your shares will be voted for
the remaining nominees.
PROPOSAL 2 TO APPROVE AMENDMENTS TO, AND A RESTATEMENT OF, THE TRUST'S
DECLARATION OF TRUST:
2(A) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO REQUIRE THE APPROVAL BY A MAJORITY OF THE
OUTSTANDING VOTING SHARES IN THE EVENT OF THE SALE OR CONVEYANCE
OF THE ASSETS OF THE TRUST TO ANOTHER TRUST OR CORPORATION
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(B) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO PERMIT THE BOARD OF TRUSTEES TO LIQUIDATE
ASSETS OF THE TRUST, OR OF ITS SERIES OR CLASSES, AND DISTRIBUTE
THE PROCEEDS OF SUCH ASSETS WITHOUT SEEKING SHAREHOLDER APPROVAL
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
<PAGE>
PROPOSAL 3 TO APPROVE A PROPOSED AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN THE TRUST, ON BEHALF OF ITS SERIES, ALABAMA MUNICIPAL
CASH TRUST (THE "ALABAMA FUND") AND MONEY MARKET OBLIGATIONS
TRUST, ON BEHALF OF ITS SERIES, ALABAMA MUNICIPAL CASH TRUST (THE
"SUCCESSOR ALABAMA FUND") WHEREBY THE SUCCESSOR ALABAMA FUND
WOULD ACQUIRE ALL OF THE ASSETS OF THE ALABAMA FUND IN EXCHANGE
FOR SHARES OF THE SUCCESSOR ALABAMA FUND TO BE DISTRIBUTED PRO
RATA BY THE ALABAMA FUND TO ITS SHAREHOLDERS IN COMPLETE
LIQUIDATION AND TERMINATION OF THE ALABAMA FUND
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
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of Arizona
Municipal Cash Trust (the "Arizona Fund"), a portfolio of Federated Municipal
Trust (the "Trust"), hereby appoint Patricia F. Conner, Gail Cagney, William
Haas, Suzanne W. Land and Ann M. Scanlon, or any one of them, true and lawful
attorneys, with the power of substitution of each, to vote all shares of the
Arizona Fund which the undersigned is entitled to vote at the Special Meeting of
Shareholders (the "Meeting") to be held on November 19, 1999, at 5800 Corporate
Drive, Pittsburgh, Pennsylvania, at 2:00 p.m. and at any adjournment thereof.
The attorneys named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. Discretionary authority
is hereby conferred as to all other matters as may properly come before the
Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF FEDERATED
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 NICHOLAS P. CONSTANTAKIS, JR., JOHN F. CUNNINGHAM,
J. CHRISTOPHER DONAHUE, CHARLES F. MANSFIELD, JR. AND
JOHN S. WALSH AS TRUSTEES OF THE TRUST
FOR [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
VOTE FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR" a
particular nominee, mark the "VOTE FOR ALL EXCEPT" box
and strike a line through the name of each nominee for
whom you are NOT voting. Your shares will be voted for
the remaining nominees.
PROPOSAL 2 TO APPROVE AMENDMENTS TO, AND A RESTATEMENT OF, THE TRUST'S
DECLARATION OF TRUST:
2(A) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO REQUIRE THE APPROVAL BY A MAJORITY OF THE
OUTSTANDING VOTING SHARES IN THE EVENT OF THE SALE OR CONVEYANCE
OF THE ASSETS OF THE TRUST TO ANOTHER TRUST OR CORPORATION
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(B) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO PERMIT THE BOARD OF TRUSTEES TO LIQUIDATE
ASSETS OF THE TRUST, OR OF ITS SERIES OR CLASSES, AND DISTRIBUTE
THE PROCEEDS OF SUCH ASSETS WITHOUT SEEKING SHAREHOLDER APPROVAL
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
<PAGE>
PROPOSAL 3 TO APPROVE A PROPOSED AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN THE TRUST, ON BEHALF OF ITS SERIES, ARIZONA MUNICIPAL
CASH TRUST (THE "ARIZONA FUND") AND MONEY MARKET OBLIGATIONS
TRUST, ON BEHALF OF ITS SERIES, ARIZONA MUNICIPAL CASH TRUST (THE
"SUCCESSOR ARIZONA FUND") WHEREBY THE SUCCESSOR ARIZONA FUND
WOULD ACQUIRE ALL OF THE ASSETS OF THE ARIZONA FUND IN EXCHANGE
FOR SHARES OF THE SUCCESSOR ARIZONA FUND TO BE DISTRIBUTED PRO
RATA BY THE ARIZONA FUND TO ITS SHAREHOLDERS IN COMPLETE
LIQUIDATION AND TERMINATION OF THE ARIZONA FUND
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
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of
California Municipal Cash Trust (the "California Fund"), a portfolio of
Federated Municipal Trust (the "Trust"), hereby appoint Patricia F. Conner, Gail
Cagney, William Haas, Suzanne W. Land and Ann M. Scanlon, or any one of them,
true and lawful attorneys, with the power of substitution of each, to vote all
shares of the California Fund which the undersigned is entitled to vote at the
Special Meeting of Shareholders (the "Meeting") to be held on November 19, 1999,
at 5800 Corporate Drive, Pittsburgh, Pennsylvania, at 2:00 p.m. and at any
adjournment thereof.
The attorneys named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. Discretionary authority
is hereby conferred as to all other matters as may properly come before the
Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF FEDERATED
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 NICHOLAS P. CONSTANTAKIS, JR., JOHN F. CUNNINGHAM,
J. CHRISTOPHER DONAHUE, CHARLES F. MANSFIELD, JR. AND
JOHN S. WALSH AS TRUSTEES OF THE TRUST
FOR [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
VOTE FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR" a
particular nominee, mark the "VOTE FOR ALL EXCEPT" box
and strike a line through the name of each nominee for
whom you are NOT voting. Your shares will be voted for
the remaining nominees.
PROPOSAL 2 TO APPROVE AMENDMENTS TO, AND A RESTATEMENT OF, THE TRUST'S
DECLARATION OF TRUST:
2(A) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO REQUIRE THE APPROVAL BY A MAJORITY OF THE
OUTSTANDING VOTING SHARES IN THE EVENT OF THE SALE OR CONVEYANCE
OF THE ASSETS OF THE TRUST TO ANOTHER TRUST OR CORPORATION
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(B) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO PERMIT THE BOARD OF TRUSTEES TO LIQUIDATE
ASSETS OF THE TRUST, OR OF ITS SERIES OR CLASSES, AND DISTRIBUTE
THE PROCEEDS OF SUCH ASSETS WITHOUT SEEKING SHAREHOLDER APPROVAL
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
<PAGE>
PROPOSAL 3 TO APPROVE A PROPOSED AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN THE TRUST, ON BEHALF OF ITS SERIES, CALIFORNIA MUNICIPAL
CASH TRUST (THE "CALIFORNIA FUND") AND MONEY MARKET OBLIGATIONS
TRUST, ON BEHALF OF ITS SERIES, CALIFORNIA MUNICIPAL CASH TRUST
(THE "SUCCESSOR CALIFORNIA FUND") WHEREBY THE SUCCESSOR
CALIFORNIA FUND WOULD ACQUIRE ALL OF THE ASSETS OF THE CALIFORNIA
FUND IN EXCHANGE FOR SHARES OF THE SUCCESSOR CALIFORNIA FUND TO
BE DISTRIBUTED PRO RATA BY THE CALIFORNIA FUND TO ITS
SHAREHOLDERS IN COMPLETE LIQUIDATION AND TERMINATION OF THE
CALIFORNIA FUND
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
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of
Connecticut Municipal Cash Trust (the "Connecticut Fund"), a portfolio of
Federated Municipal Trust (the "Trust"), hereby appoint Patricia F. Conner, Gail
Cagney, William Haas, Suzanne W. Land and Ann M. Scanlon, or any one of them,
true and lawful attorneys, with the power of substitution of each, to vote all
shares of the Connecticut Fund which the undersigned is entitled to vote at the
Special Meeting of Shareholders (the "Meeting") to be held on November 19, 1999,
at 5800 Corporate Drive, Pittsburgh, Pennsylvania, at 2:00 p.m. and at any
adjournment thereof.
The attorneys named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. Discretionary authority
is hereby conferred as to all other matters as may properly come before the
Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF FEDERATED
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 NICHOLAS P. CONSTANTAKIS, JR., JOHN F. CUNNINGHAM,
J. CHRISTOPHER DONAHUE, CHARLES F. MANSFIELD, JR. AND
JOHN S. WALSH AS TRUSTEES OF THE TRUST
FOR [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
VOTE FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR" a
particular nominee, mark the "VOTE FOR ALL EXCEPT" box
and strike a line through the name of each nominee for
whom you are NOT voting. Your shares will be voted for
the remaining nominees.
PROPOSAL 2 TO APPROVE AMENDMENTS TO, AND A RESTATEMENT OF, THE TRUST'S
DECLARATION OF TRUST:
2(A) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO REQUIRE THE APPROVAL BY A MAJORITY OF THE
OUTSTANDING VOTING SHARES IN THE EVENT OF THE SALE OR CONVEYANCE
OF THE ASSETS OF THE TRUST TO ANOTHER TRUST OR CORPORATION
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(B) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO PERMIT THE BOARD OF TRUSTEES TO LIQUIDATE
ASSETS OF THE TRUST, OR OF ITS SERIES OR CLASSES, AND DISTRIBUTE
THE PROCEEDS OF SUCH ASSETS WITHOUT SEEKING SHAREHOLDER APPROVAL
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
<PAGE>
PROPOSAL 3 TO APPROVE A PROPOSED AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN THE TRUST, ON BEHALF OF ITS SERIES, CONNECTICUT MUNICIPAL
CASH TRUST (THE "CONNECTICUT FUND") AND MONEY MARKET OBLIGATIONS
TRUST, ON BEHALF OF ITS SERIES, CONNECTICUT MUNICIPAL CASH TRUST
(THE "SUCCESSOR CONNECTICUT FUND") WHEREBY THE SUCCESSOR
CONNECTICUT FUND WOULD ACQUIRE ALL OF THE ASSETS OF THE
CONNECTICUT FUND IN EXCHANGE FOR SHARES OF THE SUCCESSOR
CONNECTICUT FUND TO BE DISTRIBUTED PRO RATA BY THE CONNECTICUT
FUND TO ITS SHAREHOLDERS IN COMPLETE LIQUIDATION AND TERMINATION
OF THE CONNECTICUT FUND
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
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of Florida
Municipal Cash Trust (the "Florida Fund"), a portfolio of Federated Municipal
Trust (the "Trust"), hereby appoint Patricia F. Conner, Gail Cagney, William
Haas, Suzanne W. Land and Ann M. Scanlon, or any one of them, true and lawful
attorneys, with the power of substitution of each, to vote all shares of the
Florida Fund which the undersigned is entitled to vote at the Special Meeting of
Shareholders (the "Meeting") to be held on November 19, 1999, at 5800 Corporate
Drive, Pittsburgh, Pennsylvania, at 2:00 p.m. and at any adjournment thereof.
The attorneys named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. Discretionary authority
is hereby conferred as to all other matters as may properly come before the
Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF FEDERATED
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 NICHOLAS P. CONSTANTAKIS, JR., JOHN F. CUNNINGHAM,
J. CHRISTOPHER DONAHUE, CHARLES F. MANSFIELD, JR. AND
JOHN S. WALSH AS TRUSTEES OF THE TRUST
FOR [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
VOTE FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR" a
particular nominee, mark the "VOTE FOR ALL EXCEPT" box
and strike a line through the name of each nominee for
whom you are NOT voting. Your shares will be voted for
the remaining nominees.
PROPOSAL 2 TO APPROVE AMENDMENTS TO, AND A RESTATEMENT OF, THE TRUST'S
DECLARATION OF TRUST:
2(A) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO REQUIRE THE APPROVAL BY A MAJORITY OF THE
OUTSTANDING VOTING SHARES IN THE EVENT OF THE SALE OR CONVEYANCE
OF THE ASSETS OF THE TRUST TO ANOTHER TRUST OR CORPORATION
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(B) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO PERMIT THE BOARD OF TRUSTEES TO LIQUIDATE
ASSETS OF THE TRUST, OR OF ITS SERIES OR CLASSES, AND DISTRIBUTE
THE PROCEEDS OF SUCH ASSETS WITHOUT SEEKING SHAREHOLDER APPROVAL
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
<PAGE>
PROPOSAL 3 TO APPROVE A PROPOSED AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN THE TRUST, ON BEHALF OF ITS SERIES, FLORIDA MUNICIPAL
CASH TRUST (THE "FLORIDA FUND") AND MONEY MARKET OBLIGATIONS
TRUST, ON BEHALF OF ITS SERIES, FLORIDA MUNICIPAL CASH TRUST (THE
"SUCCESSOR FLORIDA FUND") WHEREBY THE SUCCESSOR FLORIDA FUND
WOULD ACQUIRE ALL OF THE ASSETS OF THE FLORIDA FUND IN EXCHANGE
FOR SHARES OF THE SUCCESSOR FLORIDA FUND TO BE DISTRIBUTED PRO
RATA BY THE FLORIDA FUND TO ITS SHAREHOLDERS IN COMPLETE
LIQUIDATION AND TERMINATION OF THE FLORIDA FUND
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
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of Georgia
Municipal Cash Trust (the "Georgia Fund"), a portfolio of Federated Municipal
Trust (the "Trust"), hereby appoint Patricia F. Conner, Gail Cagney, William
Haas, Suzanne W. Land and Ann M. Scanlon, or any one of them, true and lawful
attorneys, with the power of substitution of each, to vote all shares of the
Georgia Fund which the undersigned is entitled to vote at the Special Meeting of
Shareholders (the "Meeting") to be held on November 19, 1999, at 5800 Corporate
Drive, Pittsburgh, Pennsylvania, at 2:00 p.m. and at any adjournment thereof.
The attorneys named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. Discretionary authority
is hereby conferred as to all other matters as may properly come before the
Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF FEDERATED
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 NICHOLAS P. CONSTANTAKIS, JR., JOHN F. CUNNINGHAM,
J. CHRISTOPHER DONAHUE, CHARLES F. MANSFIELD, JR. AND
JOHN S. WALSH AS TRUSTEES OF THE TRUST
FOR [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
VOTE FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR" a
particular nominee, mark the "VOTE FOR ALL EXCEPT" box
and strike a line through the name of each nominee for
whom you are NOT voting. Your shares will be voted for
the remaining nominees.
PROPOSAL 2 TO APPROVE AMENDMENTS TO, AND A RESTATEMENT OF, THE TRUST'S
DECLARATION OF TRUST:
2(A) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO REQUIRE THE APPROVAL BY A MAJORITY OF THE
OUTSTANDING VOTING SHARES IN THE EVENT OF THE SALE OR CONVEYANCE
OF THE ASSETS OF THE TRUST TO ANOTHER TRUST OR CORPORATION
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(B) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO PERMIT THE BOARD OF TRUSTEES TO LIQUIDATE
ASSETS OF THE TRUST, OR OF ITS SERIES OR CLASSES, AND DISTRIBUTE
THE PROCEEDS OF SUCH ASSETS WITHOUT SEEKING SHAREHOLDER APPROVAL
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
<PAGE>
PROPOSAL 3 TO APPROVE A PROPOSED AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN THE TRUST, ON BEHALF OF ITS SERIES, GEORGIA MUNICIPAL
CASH TRUST (THE "GEORGIA FUND") AND MONEY MARKET OBLIGATIONS
TRUST, ON BEHALF OF ITS SERIES, GEORGIA MUNICIPAL CASH TRUST (THE
"SUCCESSOR GEORGIA FUND") WHEREBY THE SUCCESSOR GEORGIA FUND
WOULD ACQUIRE ALL OF THE ASSETS OF THE GEORGIA FUND IN EXCHANGE
FOR SHARES OF THE SUCCESSOR GEORGIA FUND TO BE DISTRIBUTED PRO
RATA BY THE GEORGIA FUND TO ITS SHAREHOLDERS IN COMPLETE
LIQUIDATION AND TERMINATION OF THE GEORGIA FUND
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
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of Maryland
Municipal Cash Trust (the "Maryland Fund"), a portfolio of Federated Municipal
Trust (the "Trust"), hereby appoint Patricia F. Conner, Gail Cagney, William
Haas, Suzanne W. Land and Ann M. Scanlon, or any one of them, true and lawful
attorneys, with the power of substitution of each, to vote all shares of the
Maryland Fund which the undersigned is entitled to vote at the Special Meeting
of Shareholders (the "Meeting") to be held on November 19, 1999, at 5800
Corporate Drive, Pittsburgh, Pennsylvania, at 2:00 p.m. and at any adjournment
thereof.
The attorneys named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. Discretionary authority
is hereby conferred as to all other matters as may properly come before the
Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF FEDERATED
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 NICHOLAS P. CONSTANTAKIS, JR., JOHN F. CUNNINGHAM,
J. CHRISTOPHER DONAHUE, CHARLES F. MANSFIELD, JR. AND
JOHN S. WALSH AS TRUSTEES OF THE TRUST
FOR [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
VOTE FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR" a
particular nominee, mark the "VOTE FOR ALL EXCEPT" box
and strike a line through the name of each nominee for
whom you are NOT voting. Your shares will be voted for
the remaining nominees.
PROPOSAL 2 TO APPROVE AMENDMENTS TO, AND A RESTATEMENT OF, THE TRUST'S
DECLARATION OF TRUST:
2(A) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO REQUIRE THE APPROVAL BY A MAJORITY OF THE
OUTSTANDING VOTING SHARES IN THE EVENT OF THE SALE OR CONVEYANCE
OF THE ASSETS OF THE TRUST TO ANOTHER TRUST OR CORPORATION
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(B) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO PERMIT THE BOARD OF TRUSTEES TO LIQUIDATE
ASSETS OF THE TRUST, OR OF ITS SERIES OR CLASSES, AND DISTRIBUTE
THE PROCEEDS OF SUCH ASSETS WITHOUT SEEKING SHAREHOLDER APPROVAL
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
<PAGE>
PROPOSAL 3 TO APPROVE A PROPOSED AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN THE TRUST, ON BEHALF OF ITS SERIES, MARYLAND MUNICIPAL
CASH TRUST (THE "MARYLAND FUND") AND MONEY MARKET OBLIGATIONS
TRUST, ON BEHALF OF ITS SERIES, MARYLAND MUNICIPAL CASH TRUST
(THE "SUCCESSOR MARYLAND FUND") WHEREBY THE SUCCESSOR MARYLAND
FUND WOULD ACQUIRE ALL OF THE ASSETS OF THE MARYLAND FUND IN
EXCHANGE FOR SHARES OF THE SUCCESSOR MARYLAND FUND TO BE
DISTRIBUTED PRO RATA BY THE MARYLAND FUND TO ITS SHAREHOLDERS IN
COMPLETE LIQUIDATION AND TERMINATION OF THE MARYLAND FUND
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
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of
Massachusetts Municipal Cash Trust (the "Massachusetts Fund"), a portfolio of
Federated Municipal Trust (the "Trust"), hereby appoint Patricia F. Conner, Gail
Cagney, William Haas, Suzanne W. Land and Ann M. Scanlon, or any one of them,
true and lawful attorneys, with the power of substitution of each, to vote all
shares of the Massachusetts Fund which the undersigned is entitled to vote at
the Special Meeting of Shareholders (the "Meeting") to be held on November 19,
1999, at 5800 Corporate Drive, Pittsburgh, Pennsylvania, at 2:00 p.m. and at any
adjournment thereof.
The attorneys named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. Discretionary authority
is hereby conferred as to all other matters as may properly come before the
Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF FEDERATED
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 NICHOLAS P. CONSTANTAKIS, JR., JOHN F. CUNNINGHAM,
J. CHRISTOPHER DONAHUE, CHARLES F. MANSFIELD, JR. AND
JOHN S. WALSH AS TRUSTEES OF THE TRUST
FOR [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
VOTE FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR" a
particular nominee, mark the "VOTE FOR ALL EXCEPT" box
and strike a line through the name of each nominee for
whom you are NOT voting. Your shares will be voted for
the remaining nominees.
PROPOSAL 2 TO APPROVE AMENDMENTS TO, AND A RESTATEMENT OF, THE TRUST'S
DECLARATION OF TRUST:
2(A) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO REQUIRE THE APPROVAL BY A MAJORITY OF THE
OUTSTANDING VOTING SHARES IN THE EVENT OF THE SALE OR CONVEYANCE
OF THE ASSETS OF THE TRUST TO ANOTHER TRUST OR CORPORATION
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(B) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO PERMIT THE BOARD OF TRUSTEES TO LIQUIDATE
ASSETS OF THE TRUST, OR OF ITS SERIES OR CLASSES, AND DISTRIBUTE
THE PROCEEDS OF SUCH ASSETS WITHOUT SEEKING SHAREHOLDER APPROVAL
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
<PAGE>
PROPOSAL 3 TO APPROVE A PROPOSED AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN THE TRUST, ON BEHALF OF ITS SERIES, MASSACHUSETTS
MUNICIPAL CASH TRUST (THE "MASSACHUSETTS FUND") AND MONEY MARKET
OBLIGATIONS TRUST, ON BEHALF OF ITS SERIES, MASSACHUSETTS
MUNICIPAL CASH TRUST (THE "SUCCESSOR MASSACHUSETTS FUND") WHEREBY
THE SUCCESSOR MASSACHUSETTS FUND WOULD ACQUIRE ALL OF THE ASSETS
OF THE MASSACHUSETTS FUND IN EXCHANGE FOR SHARES OF THE SUCCESSOR
MASSACHUSETTS FUND TO BE DISTRIBUTED PRO RATA BY THE
MASSACHUSETTS FUND TO ITS SHAREHOLDERS IN COMPLETE LIQUIDATION
AND TERMINATION OF THE MASSACHUSETTS FUND
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
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of Michigan
Municipal Cash Trust (the "Michigan Fund"), a portfolio of Federated Municipal
Trust (the "Trust"), hereby appoint Patricia F. Conner, Gail Cagney, William
Haas, Suzanne W. Land and Ann M. Scanlon, or any one of them, true and lawful
attorneys, with the power of substitution of each, to vote all shares of the
Michigan Fund which the undersigned is entitled to vote at the Special Meeting
of Shareholders (the "Meeting") to be held on November 19, 1999, at 5800
Corporate Drive, Pittsburgh, Pennsylvania, at 2:00 p.m. and at any adjournment
thereof.
The attorneys named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. Discretionary authority
is hereby conferred as to all other matters as may properly come before the
Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF FEDERATED
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 NICHOLAS P. CONSTANTAKIS, JR., JOHN F. CUNNINGHAM,
J. CHRISTOPHER DONAHUE, CHARLES F. MANSFIELD, JR. AND
JOHN S. WALSH AS TRUSTEES OF THE TRUST
FOR [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
VOTE FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR" a
particular nominee, mark the "VOTE FOR ALL EXCEPT" box
and strike a line through the name of each nominee for
whom you are NOT voting. Your shares will be voted for
the remaining nominees.
PROPOSAL 2 TO APPROVE AMENDMENTS TO, AND A RESTATEMENT OF, THE TRUST'S
DECLARATION OF TRUST:
2(A) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO REQUIRE THE APPROVAL BY A MAJORITY OF THE
OUTSTANDING VOTING SHARES IN THE EVENT OF THE SALE OR CONVEYANCE
OF THE ASSETS OF THE TRUST TO ANOTHER TRUST OR CORPORATION
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(B) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO PERMIT THE BOARD OF TRUSTEES TO LIQUIDATE
ASSETS OF THE TRUST, OR OF ITS SERIES OR CLASSES, AND DISTRIBUTE
THE PROCEEDS OF SUCH ASSETS WITHOUT SEEKING SHAREHOLDER APPROVAL
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
<PAGE>
PROPOSAL 3 TO APPROVE A PROPOSED AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN THE TRUST, ON BEHALF OF ITS SERIES, MICHIGAN MUNICIPAL
CASH TRUST (THE "MICHIGAN FUND") AND MONEY MARKET OBLIGATIONS
TRUST, ON BEHALF OF ITS SERIES, MICHIGAN MUNICIPAL CASH TRUST
(THE "SUCCESSOR MICHIGAN FUND") WHEREBY THE SUCCESSOR MICHIGAN
FUND WOULD ACQUIRE ALL OF THE ASSETS OF THE MICHIGAN FUND IN
EXCHANGE FOR SHARES OF THE SUCCESSOR MICHIGAN FUND TO BE
DISTRIBUTED PRO RATA BY THE MICHIGAN FUND TO ITS SHAREHOLDERS IN
COMPLETE LIQUIDATION AND TERMINATION OF THE MICHIGAN FUND
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
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of
Minnesota Municipal Cash Trust (the "Minnesota Fund"), a portfolio of Federated
Municipal Trust (the "Trust"), hereby appoint Patricia F. Conner, Gail Cagney,
William Haas, Suzanne W. Land and Ann M. Scanlon, or any one of them, true and
lawful attorneys, with the power of substitution of each, to vote all shares of
the Minnesota Fund which the undersigned is entitled to vote at the Special
Meeting of Shareholders (the "Meeting") to be held on November 19, 1999, at 5800
Corporate Drive, Pittsburgh, Pennsylvania, at 2:00 p.m. and at any adjournment
thereof.
The attorneys named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. Discretionary authority
is hereby conferred as to all other matters as may properly come before the
Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF FEDERATED
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 NICHOLAS P. CONSTANTAKIS, JR., JOHN F. CUNNINGHAM,
J. CHRISTOPHER DONAHUE, CHARLES F. MANSFIELD, JR. AND
JOHN S. WALSH AS TRUSTEES OF THE TRUST
FOR [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
VOTE FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR" a
particular nominee, mark the "VOTE FOR ALL EXCEPT" box
and strike a line through the name of each nominee for
whom you are NOT voting. Your shares will be voted for
the remaining nominees.
PROPOSAL 2 TO APPROVE AMENDMENTS TO, AND A RESTATEMENT OF, THE TRUST'S
DECLARATION OF TRUST:
2(A) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO REQUIRE THE APPROVAL BY A MAJORITY OF THE
OUTSTANDING VOTING SHARES IN THE EVENT OF THE SALE OR CONVEYANCE
OF THE ASSETS OF THE TRUST TO ANOTHER TRUST OR CORPORATION
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(B) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO PERMIT THE BOARD OF TRUSTEES TO LIQUIDATE
ASSETS OF THE TRUST, OR OF ITS SERIES OR CLASSES, AND DISTRIBUTE
THE PROCEEDS OF SUCH ASSETS WITHOUT SEEKING SHAREHOLDER APPROVAL
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
<PAGE>
PROPOSAL 3 TO APPROVE A PROPOSED AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN THE TRUST, ON BEHALF OF ITS SERIES, MINNESOTA MUNICIPAL
CASH TRUST (THE "MINNESOTA FUND") AND MONEY MARKET OBLIGATIONS
TRUST, ON BEHALF OF ITS SERIES, MINNESOTA MUNICIPAL CASH TRUST
(THE "SUCCESSOR MINNESOTA FUND") WHEREBY THE SUCCESSOR MINNESOTA
FUND WOULD ACQUIRE ALL OF THE ASSETS OF THE MINNESOTA FUND IN
EXCHANGE FOR SHARES OF THE SUCCESSOR MINNESOTA FUND TO BE
DISTRIBUTED PRO RATA BY THE MINNESOTA FUND TO ITS SHAREHOLDERS IN
COMPLETE LIQUIDATION AND TERMINATION OF THE MINNESOTA FUND
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
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of New
Jersey Municipal Cash Trust (the "New Jersey Fund"), a portfolio of Federated
Municipal Trust (the "Trust"), hereby appoint Patricia F. Conner, Gail Cagney,
William Haas, Suzanne W. Land and Ann M. Scanlon, or any one of them, true and
lawful attorneys, with the power of substitution of each, to vote all shares of
the New Jersey Fund which the undersigned is entitled to vote at the Special
Meeting of Shareholders (the "Meeting") to be held on November 19, 1999, at 5800
Corporate Drive, Pittsburgh, Pennsylvania, at 2:00 p.m. and at any adjournment
thereof.
The attorneys named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. Discretionary authority
is hereby conferred as to all other matters as may properly come before the
Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF FEDERATED
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 NICHOLAS P. CONSTANTAKIS, JR., JOHN F. CUNNINGHAM,
J. CHRISTOPHER DONAHUE, CHARLES F. MANSFIELD, JR. AND
JOHN S. WALSH AS TRUSTEES OF THE TRUST
FOR [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
VOTE FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR" a
particular nominee, mark the "VOTE FOR ALL EXCEPT" box
and strike a line through the name of each nominee for
whom you are NOT voting. Your shares will be voted for
the remaining nominees.
PROPOSAL 2 TO APPROVE AMENDMENTS TO, AND A RESTATEMENT OF, THE TRUST'S
DECLARATION OF TRUST:
2(A) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO REQUIRE THE APPROVAL BY A MAJORITY OF THE
OUTSTANDING VOTING SHARES IN THE EVENT OF THE SALE OR CONVEYANCE
OF THE ASSETS OF THE TRUST TO ANOTHER TRUST OR CORPORATION
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(B) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO PERMIT THE BOARD OF TRUSTEES TO LIQUIDATE
ASSETS OF THE TRUST, OR OF ITS SERIES OR CLASSES, AND DISTRIBUTE
THE PROCEEDS OF SUCH ASSETS WITHOUT SEEKING SHAREHOLDER APPROVAL
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
<PAGE>
PROPOSAL 3 TO APPROVE A PROPOSED AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN THE TRUST, ON BEHALF OF ITS SERIES, NEW JERSEY MUNICIPAL
CASH TRUST (THE "NEW JERSEY FUND") AND MONEY MARKET OBLIGATIONS
TRUST, ON BEHALF OF ITS SERIES, NEW JERSEY MUNICIPAL CASH TRUST
(THE "SUCCESSOR NEW JERSEY FUND") WHEREBY THE SUCCESSOR NEW
JERSEY FUND WOULD ACQUIRE ALL OF THE ASSETS OF THE NEW JERSEY
FUND IN EXCHANGE FOR SHARES OF THE SUCCESSOR NEW JERSEY FUND TO
BE DISTRIBUTED PRO RATA BY THE NEW JERSEY FUND TO ITS
SHAREHOLDERS IN COMPLETE LIQUIDATION AND TERMINATION OF THE NEW
JERSEY FUND
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
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of New York
Municipal Cash Trust (the "New York Fund"), a portfolio of Federated Municipal
Trust (the "Trust"), hereby appoint Patricia F. Conner, Gail Cagney, William
Haas, Suzanne W. Land and Ann M. Scanlon, or any one of them, true and lawful
attorneys, with the power of substitution of each, to vote all shares of the New
York Fund which the undersigned is entitled to vote at the Special Meeting of
Shareholders (the "Meeting") to be held on November 19, 1999, at 5800 Corporate
Drive, Pittsburgh, Pennsylvania, at 2:00 p.m. and at any adjournment thereof.
The attorneys named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. Discretionary authority
is hereby conferred as to all other matters as may properly come before the
Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF FEDERATED
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 NICHOLAS P. CONSTANTAKIS, JR., JOHN F. CUNNINGHAM,
J. CHRISTOPHER DONAHUE, CHARLES F. MANSFIELD, JR. AND
JOHN S. WALSH AS TRUSTEES OF THE TRUST
FOR [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
VOTE FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR" a
particular nominee, mark the "VOTE FOR ALL EXCEPT" box
and strike a line through the name of each nominee for
whom you are NOT voting. Your shares will be voted for
the remaining nominees.
PROPOSAL 2 TO APPROVE AMENDMENTS TO, AND A RESTATEMENT OF, THE TRUST'S
DECLARATION OF TRUST:
2(A) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO REQUIRE THE APPROVAL BY A MAJORITY OF THE
OUTSTANDING VOTING SHARES IN THE EVENT OF THE SALE OR CONVEYANCE
OF THE ASSETS OF THE TRUST TO ANOTHER TRUST OR CORPORATION
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(B) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO PERMIT THE BOARD OF TRUSTEES TO LIQUIDATE
ASSETS OF THE TRUST, OR OF ITS SERIES OR CLASSES, AND DISTRIBUTE
THE PROCEEDS OF SUCH ASSETS WITHOUT SEEKING SHAREHOLDER APPROVAL
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
<PAGE>
PROPOSAL 3 TO APPROVE A PROPOSED AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN THE TRUST, ON BEHALF OF ITS SERIES, NEW YORK MUNICIPAL
CASH TRUST (THE "NEW YORK FUND") AND MONEY MARKET OBLIGATIONS
TRUST, ON BEHALF OF ITS SERIES, NEW YORK MUNICIPAL CASH TRUST
(THE "SUCCESSOR NEW YORK FUND") WHEREBY THE SUCCESSOR NEW YORK
FUND WOULD ACQUIRE ALL OF THE ASSETS OF THE NEW YORK FUND IN
EXCHANGE FOR SHARES OF THE SUCCESSOR NEW YORK FUND TO BE
DISTRIBUTED PRO RATA BY THE NEW YORK FUND TO ITS SHAREHOLDERS IN
COMPLETE LIQUIDATION AND TERMINATION OF THE NEW YORK FUND
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
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of North
Carolina Municipal Cash Trust (the "North Carolina Fund"), a portfolio of
Federated Municipal Trust (the "Trust"), hereby appoint Patricia F. Conner, Gail
Cagney, William Haas, Suzanne W. Land and Ann M. Scanlon, or any one of them,
true and lawful attorneys, with the power of substitution of each, to vote all
shares of the North Carolina Fund which the undersigned is entitled to vote at
the Special Meeting of Shareholders (the "Meeting") to be held on November 19,
1999, at 5800 Corporate Drive, Pittsburgh, Pennsylvania, at 2:00 p.m. and at any
adjournment thereof.
The attorneys named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. Discretionary authority
is hereby conferred as to all other matters as may properly come before the
Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF FEDERATED
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 NICHOLAS P. CONSTANTAKIS, JR., JOHN F. CUNNINGHAM,
J. CHRISTOPHER DONAHUE, CHARLES F. MANSFIELD, JR. AND
JOHN S. WALSH AS TRUSTEES OF THE TRUST
FOR [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
VOTE FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR" a
particular nominee, mark the "VOTE FOR ALL EXCEPT" box
and strike a line through the name of each nominee for
whom you are NOT voting. Your shares will be voted for
the remaining nominees.
PROPOSAL 2 TO APPROVE AMENDMENTS TO, AND A RESTATEMENT OF, THE TRUST'S
DECLARATION OF TRUST:
2(A) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO REQUIRE THE APPROVAL BY A MAJORITY OF THE
OUTSTANDING VOTING SHARES IN THE EVENT OF THE SALE OR CONVEYANCE
OF THE ASSETS OF THE TRUST TO ANOTHER TRUST OR CORPORATION
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(B) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO PERMIT THE BOARD OF TRUSTEES TO LIQUIDATE
ASSETS OF THE TRUST, OR OF ITS SERIES OR CLASSES, AND DISTRIBUTE
THE PROCEEDS OF SUCH ASSETS WITHOUT SEEKING SHAREHOLDER APPROVAL
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
<PAGE>
PROPOSAL 3 TO APPROVE A PROPOSED AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN THE TRUST, ON BEHALF OF ITS SERIES, NORTH CAROLINA
MUNICIPAL CASH TRUST (THE "NORTH CAROLINA FUND") AND MONEY MARKET
OBLIGATIONS TRUST, ON BEHALF OF ITS SERIES, NORTH CAROLINA
MUNICIPAL CASH TRUST (THE "SUCCESSOR NORTH CAROLINA FUND")
WHEREBY THE SUCCESSOR NORTH CAROLINA FUND WOULD ACQUIRE ALL OF
THE ASSETS OF THE NORTH CAROLINA FUND IN EXCHANGE FOR SHARES OF
THE SUCCESSOR NORTH CAROLINA FUND TO BE DISTRIBUTED PRO RATA BY
THE NORTH CAROLINA FUND TO ITS SHAREHOLDERS IN COMPLETE
LIQUIDATION AND TERMINATION OF THE NORTH CAROLINA FUND
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
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of Ohio
Municipal Cash Trust (the "Ohio Fund"), a portfolio of Federated Municipal Trust
(the "Trust"), hereby appoint Patricia F. Conner, Gail Cagney, William Haas,
Suzanne W. Land and Ann M. Scanlon, or any one of them, true and lawful
attorneys, with the power of substitution of each, to vote all shares of the
Ohio Fund which the undersigned is entitled to vote at the Special Meeting of
Shareholders (the "Meeting") to be held on November 19, 1999, at 5800 Corporate
Drive, Pittsburgh, Pennsylvania, at 2:00 p.m. and at any adjournment thereof.
The attorneys named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. Discretionary authority
is hereby conferred as to all other matters as may properly come before the
Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF FEDERATED
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 NICHOLAS P. CONSTANTAKIS, JR., JOHN F. CUNNINGHAM,
J. CHRISTOPHER DONAHUE, CHARLES F. MANSFIELD, JR. AND
JOHN S. WALSH AS TRUSTEES OF THE TRUST
FOR [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
VOTE FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR" a
particular nominee, mark the "VOTE FOR ALL EXCEPT" box
and strike a line through the name of each nominee for
whom you are NOT voting. Your shares will be voted for
the remaining nominees.
PROPOSAL 2 TO APPROVE AMENDMENTS TO, AND A RESTATEMENT OF, THE TRUST'S
DECLARATION OF TRUST:
2(A) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO REQUIRE THE APPROVAL BY A MAJORITY OF THE
OUTSTANDING VOTING SHARES IN THE EVENT OF THE SALE OR CONVEYANCE
OF THE ASSETS OF THE TRUST TO ANOTHER TRUST OR CORPORATION
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(B) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO PERMIT THE BOARD OF TRUSTEES TO LIQUIDATE
ASSETS OF THE TRUST, OR OF ITS SERIES OR CLASSES, AND DISTRIBUTE
THE PROCEEDS OF SUCH ASSETS WITHOUT SEEKING SHAREHOLDER APPROVAL
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
<PAGE>
PROPOSAL 3 TO APPROVE A PROPOSED AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN THE TRUST, ON BEHALF OF ITS SERIES, OHIO MUNICIPAL CASH
TRUST (THE "OHIO FUND") AND MONEY MARKET OBLIGATIONS TRUST, ON
BEHALF OF ITS SERIES, OHIO MUNICIPAL CASH TRUST (THE "SUCCESSOR
OHIO FUND") WHEREBY THE SUCCESSOR OHIO FUND WOULD ACQUIRE ALL OF
THE ASSETS OF THE OHIO FUND IN EXCHANGE FOR SHARES OF THE
SUCCESSOR OHIO FUND TO BE DISTRIBUTED PRO RATA BY THE OHIO FUND
TO ITS SHAREHOLDERS IN COMPLETE LIQUIDATION AND TERMINATION OF
THE OHIO FUND
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
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of
Pennsylvania Municipal Cash Trust (the "Pennsylvania Fund"), a portfolio of
Federated Municipal Trust (the "Trust"), hereby appoint Patricia F. Conner, Gail
Cagney, William Haas, Suzanne W. Land and Ann M. Scanlon, or any one of them,
true and lawful attorneys, with the power of substitution of each, to vote all
shares of the Pennsylvania Fund which the undersigned is entitled to vote at the
Special Meeting of Shareholders (the "Meeting") to be held on November 19, 1999,
at 5800 Corporate Drive, Pittsburgh, Pennsylvania, at 2:00 p.m. and at any
adjournment thereof.
The attorneys named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. Discretionary authority
is hereby conferred as to all other matters as may properly come before the
Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF FEDERATED
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 NICHOLAS P. CONSTANTAKIS, JR., JOHN F. CUNNINGHAM,
J. CHRISTOPHER DONAHUE, CHARLES F. MANSFIELD, JR. AND
JOHN S. WALSH AS TRUSTEES OF THE TRUST
FOR [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
VOTE FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR" a
particular nominee, mark the "VOTE FOR ALL EXCEPT" box
and strike a line through the name of each nominee for
whom you are NOT voting. Your shares will be voted for
the remaining nominees.
PROPOSAL 2 TO APPROVE AMENDMENTS TO, AND A RESTATEMENT OF, THE TRUST'S
DECLARATION OF TRUST:
2(A) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO REQUIRE THE APPROVAL BY A MAJORITY OF THE
OUTSTANDING VOTING SHARES IN THE EVENT OF THE SALE OR CONVEYANCE
OF THE ASSETS OF THE TRUST TO ANOTHER TRUST OR CORPORATION
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(B) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO PERMIT THE BOARD OF TRUSTEES TO LIQUIDATE
ASSETS OF THE TRUST, OR OF ITS SERIES OR CLASSES, AND DISTRIBUTE
THE PROCEEDS OF SUCH ASSETS WITHOUT SEEKING SHAREHOLDER APPROVAL
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
<PAGE>
PROPOSAL 3 TO APPROVE A PROPOSED AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN THE TRUST, ON BEHALF OF ITS SERIES, PENNSYLVANIA
MUNICIPAL CASH TRUST (THE "PENNSYLVANIA FUND") AND MONEY MARKET
OBLIGATIONS TRUST, ON BEHALF OF ITS SERIES, PENNSYLVANIA
MUNICIPAL CASH TRUST (THE "SUCCESSOR PENNSYLVANIA FUND") WHEREBY
THE SUCCESSOR PENNSYLVANIA FUND WOULD ACQUIRE ALL OF THE ASSETS
OF THE PENNSYLVANIA FUND IN EXCHANGE FOR SHARES OF THE SUCCESSOR
PENNSYLVANIA FUND TO BE DISTRIBUTED PRO RATA BY THE PENNSYLVANIA
FUND TO ITS SHAREHOLDERS IN COMPLETE LIQUIDATION AND TERMINATION
OF THE PENNSYLVANIA FUND
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
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of
Tennessee Municipal Cash Trust (the "Tennessee Fund"), a portfolio of Federated
Municipal Trust (the "Trust"), hereby appoint Patricia F. Conner, Gail Cagney,
William Haas, Suzanne W. Land and Ann M. Scanlon, or any one of them, true and
lawful attorneys, with the power of substitution of each, to vote all shares of
the Tennessee Fund which the undersigned is entitled to vote at the Special
Meeting of Shareholders (the "Meeting") to be held on November 19, 1999, at 5800
Corporate Drive, Pittsburgh, Pennsylvania, at 2:00 p.m. and at any adjournment
thereof.
The attorneys named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. Discretionary authority
is hereby conferred as to all other matters as may properly come before the
Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF FEDERATED
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 NICHOLAS P. CONSTANTAKIS, JR., JOHN F. CUNNINGHAM,
J. CHRISTOPHER DONAHUE, CHARLES F. MANSFIELD, JR. AND
JOHN S. WALSH AS TRUSTEES OF THE TRUST
FOR [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
VOTE FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR" a
particular nominee, mark the "VOTE FOR ALL EXCEPT" box
and strike a line through the name of each nominee for
whom you are NOT voting. Your shares will be voted for
the remaining nominees.
PROPOSAL 2 TO APPROVE AMENDMENTS TO, AND A RESTATEMENT OF, THE TRUST'S
DECLARATION OF TRUST:
2(A) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO REQUIRE THE APPROVAL BY A MAJORITY OF THE
OUTSTANDING VOTING SHARES IN THE EVENT OF THE SALE OR CONVEYANCE
OF THE ASSETS OF THE TRUST TO ANOTHER TRUST OR CORPORATION
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(B) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO PERMIT THE BOARD OF TRUSTEES TO LIQUIDATE
ASSETS OF THE TRUST, OR OF ITS SERIES OR CLASSES, AND DISTRIBUTE
THE PROCEEDS OF SUCH ASSETS WITHOUT SEEKING SHAREHOLDER APPROVAL
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
<PAGE>
PROPOSAL 3 TO APPROVE A PROPOSED AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN THE TRUST, ON BEHALF OF ITS SERIES, TENNESSEE MUNICIPAL
CASH TRUST (THE "TENNESSEE FUND") AND MONEY MARKET OBLIGATIONS
TRUST, ON BEHALF OF ITS SERIES, TENNESSEE MUNICIPAL CASH TRUST
(THE "SUCCESSOR TENNESSEE FUND") WHEREBY THE SUCCESSOR TENNESSEE
FUND WOULD ACQUIRE ALL OF THE ASSETS OF THE TENNESSEE FUND IN
EXCHANGE FOR SHARES OF THE SUCCESSOR TENNESSEE FUND TO BE
DISTRIBUTED PRO RATA BY THE TENNESSEE FUND TO ITS SHAREHOLDERS IN
COMPLETE LIQUIDATION AND TERMINATION OF THE TENNESSEE FUND
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
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of Virginia
Municipal Cash Trust (the "Virginia Fund"), a portfolio of Federated Municipal
Trust (the "Trust"), hereby appoint Patricia F. Conner, Gail Cagney, William
Haas, Suzanne W. Land and Ann M. Scanlon, or any one of them, true and lawful
attorneys, with the power of substitution of each, to vote all shares of the
Virginia Fund which the undersigned is entitled to vote at the Special Meeting
of Shareholders (the "Meeting") to be held on November 19, 1999, at 5800
Corporate Drive, Pittsburgh, Pennsylvania, at 2:00 p.m. and at any adjournment
thereof.
The attorneys named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. Discretionary authority
is hereby conferred as to all other matters as may properly come before the
Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF FEDERATED
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 NICHOLAS P. CONSTANTAKIS, JR., JOHN F. CUNNINGHAM,
J. CHRISTOPHER DONAHUE, CHARLES F. MANSFIELD, JR. AND
JOHN S. WALSH AS TRUSTEES OF THE TRUST
FOR [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
VOTE FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR" a
particular nominee, mark the "VOTE FOR ALL EXCEPT" box
and strike a line through the name of each nominee for
whom you are NOT voting. Your shares will be voted for
the remaining nominees.
PROPOSAL 2 TO APPROVE AMENDMENTS TO, AND A RESTATEMENT OF, THE TRUST'S
DECLARATION OF TRUST:
2(A) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO REQUIRE THE APPROVAL BY A MAJORITY OF THE
OUTSTANDING VOTING SHARES IN THE EVENT OF THE SALE OR CONVEYANCE
OF THE ASSETS OF THE TRUST TO ANOTHER TRUST OR CORPORATION
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(B) TO APPROVE AN AMENDMENT TO AND RESTATEMENT OF THE TRUST'S
DECLARATION OF TRUST TO PERMIT THE BOARD OF TRUSTEES TO LIQUIDATE
ASSETS OF THE TRUST, OR OF ITS SERIES OR CLASSES, AND DISTRIBUTE
THE PROCEEDS OF SUCH ASSETS WITHOUT SEEKING SHAREHOLDER APPROVAL
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
<PAGE>
PROPOSAL 3 TO APPROVE A PROPOSED AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN THE TRUST, ON BEHALF OF ITS SERIES, VIRGINIA MUNICIPAL
CASH TRUST (THE "VIRGINIA FUND") AND MONEY MARKET OBLIGATIONS
TRUST, ON BEHALF OF ITS SERIES, VIRGINIA MUNICIPAL CASH TRUST
(THE "SUCCESSOR VIRGINIA FUND") WHEREBY THE SUCCESSOR VIRGINIA
FUND WOULD ACQUIRE ALL OF THE ASSETS OF THE VIRGINIA FUND IN
EXCHANGE FOR SHARES OF THE SUCCESSOR VIRGINIA FUND TO BE
DISTRIBUTED PRO RATA BY THE VIRGINIA FUND TO ITS SHAREHOLDERS IN
COMPLETE LIQUIDATION AND TERMINATION OF THE VIRGINIA FUND
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
<PAGE>
APPENDIX I
THIS AGREEMENT AND PLAN OF REORGANIZATION DESCRIBES THE PROPOSED REORGANIZATION
OF THE ALABAMA FUND INTO THE SUCCESSOR ALABAMA FUND. SUBSTANTIALLY IDENTICAL
AGREEMENTS AND PLANS OF REORGANIZATION WILL BE UTILIZED TO DESCRIBE THE PROPOSED
REORGANIZATION OF EACH FUND INTO ITS RESPECTIVE SUCCESSOR FUND.
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated as of June 1, 1999 (the
"Agreement") between Federated Municipal Trust, a Massachusetts business trust
(the "FMT"), on behalf of its portfolio, Alabama Municipal Cash Trust (the
"Fund"), with its principal place of business at 5800 Corporate Drive,
Pittsburgh, Pennsylvania 15237-7000, and Money Market Obligations Trust, a
Massachusetts business trust (the "Trust"), with its principal place of business
located at 5800 Corporate Drive, Pittsburgh, Pennsylvania 15237-7000, on behalf
of its newly-organized portfolio, Alabama Municipal Cash Trust (the "Successor
Fund").
WHEREAS, the Board of Trustees of FMT and the Board of Trustees of
the Trust have determined that it is in the best interests of the Fund and the
Trust, respectively, that the assets of the Fund be acquired by the Successor
Fund pursuant to this Agreement; and
WHEREAS, the parties desire to enter into a plan of exchange which
would constitute a reorganization within the meaning of Section 368(a)(1)(F)
of the Internal Revenue Code of 1986, as amended (the "Code"):
NOW THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter set forth, the parties hereto agree as follows:
1. PLAN OF EXCHANGE.
(a) Subject to the terms and conditions set forth herein, the
Fund shall assign, transfer and convey its assets, including all securities and
cash held by the Fund (subject to the liabilities of the Fund) to the Successor
Fund, and the Successor Fund shall acquire all of the assets of the Fund
(subject to the liabilities of the Fund) in exchange for full and fractional
shares of beneficial interest of the Successor Fund (the "Successor Fund
Shares"), to be issued by the Trust, having an aggregate net asset value equal
to the value of the net assets of the Fund. The value of the assets of the Fund
and the net asset value per share of the Successor Fund Shares shall be computed
as of the close of the New York Stock Exchange (normally 4:00 p.m. Eastern time)
on the Exchange Date (such time and date being hereinafter called the "Valuation
Time") in accordance with the procedures for determining the value of the
Successor Fund's assets set forth in the Successor Fund's organizational
documents and the then-current prospectus and statement of additional
information for the Successor Fund that forms a part of the Successor Fund's
Registration Statement on Form N-1A (the "Registration Statement"). In lieu of
delivering certificates for the Successor Fund Shares, the Trust shall credit
the Successor Fund Shares to the Fund's account on the share record books of the
Trust and shall deliver a confirmation thereof to the Fund. The Fund shall then
deliver written instructions to the Trust's transfer agent to establish accounts
for the shareholders on the share record books relating to the Successor Fund.
(b) Delivery of the assets of the Fund to be transferred shall be
made on the Exchange Date (as defined herein). Assets transferred shall be
delivered to State Street Bank and Trust Company, the Trust's custodian (the
"Custodian"), for the account of the Trust and the Successor Fund with all
securities not in bearer or book entry form duly endorsed, or accompanied by
duly executed separate assignments or stock powers, in proper form for transfer,
with signatures guaranteed, and with all necessary stock transfer stamps,
sufficient to transfer good and marketable title thereto (including all accrued
interest and dividends and rights pertaining thereto) to the Custodian for the
account of the Trust and the Successor Fund free and clear of all liens,
encumbrances, rights, restrictions and claims. All cash delivered shall be in
the form of immediately available funds payable to the order of the Custodian
for the account of the Trust and the Successor Fund.
<PAGE>
(c) FMT will pay or cause to be paid to the Trust any interest
received on or after the Exchange Date with respect to assets transferred from
the Fund to the Successor Fund hereunder and to the Trust and any distributions,
rights or other assets received by the Fund after the Exchange Date as
distributions on or with respect to the securities transferred from the Fund to
the Successor Fund hereunder. All such assets shall be deemed included in assets
transferred to the Successor Fund on the Exchange Date and shall not be
separately valued.
(d) The Exchange Date shall be December 1, 1999, or such earlier
or later date as may be mutually agreed upon by the parties.
(e) As soon as practicable after the Exchange Date, the Fund
shall distribute all of the Successor Fund Shares received by it among the
shareholders of the Fund in proportion to the number of shares each such
shareholder holds in the Fund and shall take all other steps necessary to effect
its dissolution and termination. After the Exchange Date, the Fund shall not
conduct any business except in connection with its dissolution and termination.
2. FMT'S REPRESENTATIONS AND WARRANTIES. FMT represents and warrants to
and agrees with the Trust on behalf of the Successor Fund as follows:
(a) FMT is a business trust duly organized, validly existing and
in good standing under the laws of the Commonwealth of Massachusetts and has
power to own all of its properties and assets and, subject to the approval of
its shareholders as contemplated hereby, to carry out this Agreement.
(b) This Agreement has been duly authorized, executed and
delivered by FMT and is valid and binding on FMT, enforceable in accordance with
its terms, except as such enforcement may be limited by applicable bankruptcy,
insolvency, and other similar laws of general applicability relating to or
affecting creditors' rights and to general principles of equity. The execution
and delivery of this Agreement does not and will not, and the consummation of
the transactions contemplated by this Agreement will not, violate FMT's
Declaration of Trust or By-Laws or any agreement or arrangement to which it is a
party or by which it is bound.
(c) FMT is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end management investment company, and
such registration has not been revoked or rescinded and is in full force and
effect.
(d) Except as shown on the audited financial statements of the
Fund for its most recently completed fiscal period and as incurred in the
ordinary course of the Fund's business since then, the Fund has no known
liabilities of a material amount, contingent or otherwise, and there are no
legal, administrative or other proceedings pending or, to the Fund's knowledge,
threatened against the Fund.
(e) On the Exchange Date, FMT will have full right, power
and authority to sell, assign, transfer and deliver the Fund's assets to be
transferred by it hereunder.
3. THE TRUST'S REPRESENTATIONS AND WARRANTIES. The Trust, on behalf of
the Successor Fund, represents and warrants to and agrees with FMT as follows:
(a) The Trust is a business trust duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts and has power to carry on its business as it is now being
conducted and to carry out this Agreement.
(b) This Agreement has been duly authorized, executed and
delivered by the Trust and is valid and binding on the Trust, enforceable in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, and other similar laws of general
applicability relating to or affecting creditors' rights and to general
principles of equity. The execution and delivery of this Agreement does not and
will not, and the consummation of the transactions contemplated by this
Agreement will not, violate the Trust's Declaration of Trust or By-Laws or any
agreement or arrangement to which it is a party or by which it is bound.
<PAGE>
(c) The Trust is registered under the 1940 Act as an open-end
management investment company and such registration has not been revoked or
rescinded and is in full force and effect.
(d) The Successor Fund does not have any known liabilities of a
material amount, contingent or otherwise, and there are no legal, administrative
or other proceedings pending or, to the Trust's knowledge, threatened against
the Successor Fund. Other than organizational activities, the Successor Fund has
not engaged in any business activities.
(e) At the Exchange Date, the Successor Fund Shares to be issued
to the Fund (the only Successor Fund shares to be issued as of the Exchange
Date) will have been duly authorized and, when issued and delivered pursuant to
this Agreement, will be legally and validly issued and will be fully paid and
non-assessable. No Trust or Successor Fund shareholder will have any preemptive
right of subscription or purchase in respect thereof.
4. THE TRUST'S CONDITIONS PRECEDENT. The obligations of the Trust
hereunder shall be subject to the following conditions:
(a) FMT shall have furnished to the Trust a statement of the
Fund's assets, including a list of securities owned by the Fund with their
respective tax costs and values determined as provided in Section 1 hereof, all
as of the Exchange Date.
(b) As of the Exchange Date, all representations and warranties
of FMT made in this Agreement shall be true and correct as if made at and as of
such date, and FMT shall have complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to such
date.
(c) A vote of the shareholders of the Fund approving this
Agreement and the transactions and exchange contemplated hereby shall have been
adopted by the vote required by applicable law.
5. FMT'S CONDITIONS PRECEDENT. The obligations of FMT hereunder with
respect to the Fund shall be subject to the condition that as of the Exchange
Date all representations and warranties of the Trust made in this Agreement
shall be true and correct as if made at and as of such date, and that the Trust
shall have complied with all of the agreements and satisfied all the conditions
on its part to be performed or satisfied at or prior to such date.
6. THE TRUST'S AND FMT'S CONDITIONS PRECEDENT. The obligations of both
the Trust and FMT hereunder shall be subject to the following conditions:
(a) The post-effective amendment to the Trust's Registration
Statement on Form N-1A relating to the Successor Fund under the Securities Act
of 1933, as amended, and the 1940 Act, if applicable, shall have become
effective, and any additional post-effective amendments to such Registration
Statement as are determined by the Trustees of the Trust to be necessary and
appropriate shall have been filed with the Commission and shall have become
effective.
(b) No action, suit or other proceeding shall be threatened or
pending before any court or governmental agency which seeks to restrain or
prohibit, or obtain damages or other relief in connection with, this Agreement
or the transaction contemplated herein.
(c) Each party shall have received an opinion of Dickstein
Shapiro Morin & Oshinsky LLP to the effect that the reorganization contemplated
by this Agreement qualifies as a "reorganization" under Section 368(a)(1)(F) of
the Code.
Provided, however, that at any time prior to the Exchange Date, any of
the foregoing conditions in this Section 6 may be waived by the parties if, in
the judgment of the parties, such waiver will not have a material adverse effect
on the benefits intended under this Agreement to the shareholders of the Fund.
<PAGE>
7. TERMINATION OF AGREEMENT. This Agreement and the transactions
contemplated hereby may be terminated and abandoned by resolution of the Board
of Trustees of FMT or the Board of Trustees of the Trust at any time prior to
the Exchange Date (and notwithstanding any vote of the shareholders of the Fund)
if circumstances should develop that, in the opinion of either the Board of
Trustees of FMT or the Board of Trustees of the Trust, make proceeding with this
Agreement inadvisable.
If this Agreement is terminated and the exchange contemplated hereby is
abandoned pursuant to the provisions of this Section 7, this Agreement shall
become void and have no effect, without any liability on the part of any party
hereto or the Trustees, officers or shareholders of the Trust or the Trustees,
officers or shareholders of FMT, in respect of this Agreement.
8. WAIVER AND AMENDMENTS. At any time prior to the Exchange Date, any of
the conditions set forth in Section 4 may be waived by the Board of the Trust,
and any of the conditions set forth in Section 5 may be waived by the Board of
FMT, if, in the judgment of the waiving party, such waiver will not have a
material adverse effect on the benefits intended under this Agreement to the
shareholders of the Fund or the shareholders of the Successor Fund, as the case
may be. In addition, prior to the Exchange Date, any provision of this Agreement
may be amended or modified by the Boards of FMT and the Trust if such amendment
or modification would not have a material adverse effect upon the benefits
intended under this Agreement and would be consistent with the best interests of
shareholders of the Fund and the Successor Fund.
9. NO SURVIVAL OF REPRESENTATIONS. None of the representations and
warranties included or provided for herein shall survive consummation of the
transactions contemplated hereby.
10. GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the Commonwealth of Pennsylvania, without giving
effect to principles of conflict of laws; provided, however, that the due
authorization, execution and delivery of this Agreement, in the case of FMT and
the Trust, shall be governed and construed in accordance with the laws of the
Commonwealth of Massachusetts without giving effect to principles of conflict of
laws.
11. CAPACITY OF TRUSTEES, ETC.
(a) (i) The names "Federated Municipal Trust" and "Board of
Trustees of Federated Municipal Trust" refer, respectively, to the trust created
and the trustees, as trustees but not individually or personally, acting from
time to time under FMT's Declaration of Trust, which is hereby referred to and a
copy of which is on file at the office of the State Secretary of the
Commonwealth of Massachusetts and at the principal office of FMT. The
obligations of the Fund entered into in the name or on behalf thereof by any of
the trustees, representatives or agents are made not individually, but in such
capacities, and are not binding upon any of the trustees, shareholders or
representatives of FMT personally, but bind only the Fund's trust property, and
all persons dealing with any portfolio of shares of the Fund must look solely to
the trust property belonging to such portfolio for the enforcement of any claims
against the Fund.
(ii) Both parties specifically acknowledge and agree that
any liability of the Fund under this Agreement, or in connection with the
transactions
contemplated herein, shall be discharged only out of the assets of the Fund and
that no other portfolio of FMT shall be liable with respect thereto.
(b) (i) The names "Money Market Obligations Trust" and "Board of
Trustees of Money Market Obligations Trust" refer, respectively, to the trust
created and the trustees, as trustees but not individually or personally, acting
from time to time under the Trust's Declaration of Trust, which is hereby
referred to and a copy of which is on file at the office of the State Secretary
of the Commonwealth of Massachusetts and at the principal office of the Trust.
The obligations of the Trust entered into in the name or on behalf of the
Successor Fund by any of the trustees, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
trustees, shareholders or representatives of the Trust personally, but bind only
the Successor Fund's trust property, and all persons dealing with any portfolio
of shares of the Trust must look solely to the trust property belonging to such
portfolio for the enforcement of any claims against the Trust.
<PAGE>
(ii) Both parties specifically acknowledge and agree that
any liability of the Trust under this Agreement, or in connection with the
transactions
contemplated herein, shall be discharged only out of the assets of the Successor
Fund and that no other portfolio of the Trust shall be liable with respect
thereto.
12. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which, when executed and delivered, shall be deemed to be an original.
IN WITNESS WHEREOF, FMT and the Trust have caused this Agreement and
Plan of Reorganization to be executed as of the date above first written.
FEDERATED MUNICIPAL TRUST, on behalf
of its portfolio, Alabama Municipal
Cash Trust
ATTEST: /S/ GAIL CAGNEY /S/ JOHN W. MCGONIGLE
Title: Assistant Secretary Title: Executive Vice President
MONEY MARKET OBLIGATIONS
TRUST, on behalf of its portfolio,
Alabama Municipal Cash Trust
ATTEST: /S/ GAIL CAGNEY /S/ JOHN W. MCGONIGLE
Title: Assistant Secretary Title: Executive Vice President
<PAGE>
APPENDIX II-A
Set forth below is a comparison of the investment policies and
restrictions of the Alabama Fund and the Successor Alabama Fund:
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
FUNDAMENTAL INVESTMENT OBJECTIVE
ALABAMA FUND: "The Fund's investment objective is to provide current income
exempt from federal regular income tax and the income tax imposed by the State
of Alabama consistent with stability of principal."
SUCCESSOR ALABAMA FUND: The Successor Fund is subject to an identical
fundamental investment objective.
FUNDAMENTAL INVESTMENT POLICY
ALABAMA FUND: "The Fund will invest so that at least 80% of its annual interest
income is exempt from federal regular and Alabama state income tax or so that at
least 80% of its net assets is invested in obligations, the interest income from
which is exempt from federal regular and Alabama state income tax."
SUCCESSOR ALABAMA FUND: The Successor Fund is subject to an identical
fundamental investment policy.
CONCENTRATION OF INVESTMENTS
ALABAMA FUND: "The Fund will not purchase securities, if, as a result of such
purchase, 25% or more of the value of its total assets would be invested in any
one industry or in industrial development bonds or other securities, the
interest upon which is paid from revenues of similar types of projects. However,
the Fund may invest as temporary investments more than 25% of the value of its
assets in cash or cash items, securities issued or guaranteed by the U.S.
government, its agencies, or instrumentalities, or instruments secured by these
money market instruments, such as repurchase agreements."
SUCCESSOR ALABAMA FUND: "The Fund will not make investments that will result in
the concentration of its investments in the securities of issuers primarily
engaged in the same industry. Government securities, municipal securities and
bank instruments will not be deemed to constitute an industry. To conform to the
current view of the SEC staff that only domestic bank instruments may be
excluded from industry concentration limitations, as a matter of non-fundamental
policy, the Fund will not exclude foreign bank instruments from industry
concentration limitation tests so long as the policy of the SEC remains in
effect. In addition, investments in certain industrial development bonds funded
by activities in a single industry will be deemed to constitute investment in an
industry, except when held for temporary defensive purposes. The investment of
more than 25% of the value of the Fund's total assets in any one industry will
constitute `concentration.'"
INVESTMENTS IN REAL ESTATE
ALABAMA FUND: "The Fund will not purchase or sell real estate or real estate
limited partnerships, although it may invest in securities of issuers whose
business involves the purchase or sale of real estate or in securities which are
secured by real estate or interests in real estate."
SUCCESSOR ALABAMA FUND: "The Fund may not purchase or sell real estate, provided
that this restriction does not prevent the Fund from investing in issuers which
invest, deal, or otherwise engage in transactions in real estate or interests
therein, or investing in securities that are secured by real estate or interests
therein. The Fund may exercise its rights under agreements relating to such
securities, including the right to enforce security interests and to hold real
estate acquired by reason of such enforcement until that real estate can be
liquidated in an orderly manner."
<PAGE>
UNDERWRITING SECURITIES
ALABAMA FUND: "The Fund will not underwrite any issue of securities, except
as it may be deemed to be an underwriter under the Securities Act of 1933 in
connection with the sale of securities in accordance with its investment
objective, policies, and limitations."
SUCCESSOR ALABAMA FUND: "The Fund may not underwrite the securities of other
issuers, except that the Fund may engage in transactions involving the
acquisition, disposition or resale of its portfolio securities, under
circumstances where it may be considered to be an underwriter under the
Securities Act of 1933."
INVESTING IN COMMODITIES
ALABAMA FUND: "The Fund will not purchase or sell commodities, commodity
contracts, or commodity futures contracts."
SUCCESSOR ALABAMA FUND: The Fund may not purchase or sell physical
commodities, provided that the Fund may purchase securities of companies that
deal in commodities."
ISSUING SENIOR SECURITIES AND BORROWING MONEY
ALABAMA FUND: "The Fund will not issue senior securities except that the Fund
may borrow money directly or through reverse repurchase agreements in amounts up
to one-third of the value of its net assets, including the amounts borrowed. The
Fund will not borrow money or engage in reverse repurchase agreements for
investment leverage, but rather as a temporary, extraordinary, or emergency
measure or to facilitate management of the portfolio by enabling the Fund to
meet redemption requests when the liquidation of portfolio securities is deemed
to be inconvenient or disadvantageous. The Fund will not purchase any securities
while borrowings in excess of 5% of its total assets are outstanding."
SUCCESSOR ALABAMA FUND: "The Fund may borrow money, directly or indirectly,
and issue senior securities to the maximum extent permitted under the 1940 Act."
LENDING CASH OR SECURITIES
ALABAMA FUND: "The Fund will not lend any of its assets except that it may
acquire publicly or nonpublicly issued Alabama municipal securities or temporary
investments or enter into repurchase agreements, in accordance with its
investment objective, policies, limitations, and its Declaration of Trust."
SUCCESSOR ALABAMA FUND: "The Fund may not make loans, provided that this
restriction does not prevent the Fund from purchasing debt obligations, entering
into repurchase agreements, lending its assets to broker/dealers or
institutional investors and investing in loans, including assignments and
participation interests."
PLEDGING ASSETS
ALABAMA FUND: "The Fund will not mortgage, pledge, or hypothecate any
assets except to secure permitted borrowings. In those cases, it may pledge
assets having a market value not exceeding the lesser of the dollar amounts
borrowed or 15% of the value of its total assets at the time of the pledge."
SUCCESSOR ALABAMA FUND: The Successor Fund is subject to a NON-fundamental
investment limitation pertaining to pledging assets that provides: "The Fund
will not mortgage, pledge or hypothecate any of its assets, provided that this
shall not apply to the transfer of securities in connection with any permissible
borrowing or to collateral arrangements in connection with permissible
activities."
<PAGE>
SELLING SHORT AND BUYING ON MARGIN
ALABAMA FUND: "The Fund will not sell any securities short or purchase any
securities on margin but may obtain such short-term credits as may be necessary
for clearance of transactions."
SUCCESSOR ALABAMA FUND: The Successor Fund is not subject to an investment
restriction regarding selling securities short. The Successor Fund is subject to
a non-fundamental investment restriction relating to margin transactions that
states: "The Fund will not purchase securities on margin, provided that the Fund
may obtain short-term credits necessary for the clearance of purchases and sales
of securities."
NON-FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
PERMISSIBLE INVESTMENTS
ALABAMA FUND: "The Fund invests in a portfolio of high-quality tax-exempt
securities maturing in 13 months or less."
SUCCESSOR ALABAMA FUND: "The Fund invests in a portfolio of high-quality
tax-exempt securities maturing in 397 days or less."
INVESTING IN ILLIQUID SECURITIES
ALABAMA FUND: "The Fund will not invest more than 10% of the value of its net
assets in illiquid securities including certain restricted securities not
determined to be liquid under criteria established by the Board and repurchase
agreements providing for settlement in more than seven days notice."
SUCCESSOR ALABAMA FUND: "The Fund will not purchase securities for which there
is no readily available market, or enter into repurchase agreements or purchase
time deposits maturing in more than seven days, if immediately after and as a
result, the value of such securities would exceed, in the aggregate, 10% of the
Fund's net assets."
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
ALABAMA FUND: The Fund presently has no policy.
SUCCESSOR ALABAMA FUND: "The Fund may invest its assets in securities of
other investment companies, including the securities of affiliated money market
funds, as an efficient means of carrying out its investment policies and
managing its uninvested cash."
INVESTING FOR CONTROL
ALABAMA FUND: "The Fund will not invest in securities of a company for the
purpose of exercising control or management."
SUCCESSOR ALABAMA FUND: The Fund is not subject to a comparable restriction.
INVESTING IN OPTIONS
ALABAMA FUND: "The Fund will not invest in puts, calls, straddles, spreads,
or any combination of them."
SUCCESSOR ALABAMA FUND: The Fund is not subject to a comparable restriction.
<PAGE>
STATE UNDERTAKINGS
ALABAMA FUND: "The Fund has no present intention to borrow money or pledge
securities in excess of 5% of the value of its net assets during the coming
fiscal year."
SUCCESSOR ALABAMA FUND: The Fund is not subject to a comparable undertaking.
<PAGE>
APPENDIX II-B
Set forth below is a comparison of the investment policies and
restrictions of the Arizona Fund and the Successor Arizona Fund:
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
FUNDAMENTAL INVESTMENT OBJECTIVE
ARIZONA FUND: "The Fund's investment objective is current income exempt
from federal regular income tax and Arizona income taxes consistent with
stability of principal
and liquidity."
SUCCESSOR ARIZONA FUND: The Successor Fund is subject to an identical
fundamental investment objective.
FUNDAMENTAL INVESTMENT POLICY
ARIZONA FUND: "At least 80% of the Fund's annual interest income will be
exempt from federal regular income tax and Arizona income taxes."
SUCCESSOR ARIZONA FUND: The Successor Fund is subject to an identical
fundamental investment policy.
DIVERSIFICATION
ARIZONA FUND: "With respect to securities comprising 75% of the value of its
total assets, the Fund will not purchase securities of any one issuer (other
than cash; cash items; securities issued or guaranteed by the government of the
United States or its agencies or instrumentalities and repurchase agreements
collateralized by such U.S. government securities; and securities of other
investment companies) if as a result more than 5% of the value of its total
assets would be invested in the securities of that issuer, or if it would own
more than 10% of the outstanding voting securities of that issuer.
Under this limitation, each governmental subdivision, including states and the
District of Columbia, territories, possessions of the United States, or their
political subdivisions, agencies, authorities, instrumentalities, or similar
entities, will be considered a separate issuer if its assets and revenues are
separate from those of the governmental body creating it and the security is
backed only by its own assets and revenues. Industrial development bonds backed
only by the assets and revenues of a non-governmental user are considered to be
issued solely by that issuer."
SUCCESSOR ARIZONA FUND: "With respect to securities comprising 75% of the value
of its total assets, the Fund will not purchase securities of any one issuer
(other than cash; cash items; securities issued or guaranteed by the government
of the United States or its agencies or instrumentalities and repurchase
agreements collateralized by such U.S. government securities; and securities of
other investment companies) if, as a result, more than 5% of the value of its
total assets would be invested in securities of that issuer, or the Fund would
own more than 10% of the outstanding voting securities of that issuer."
<PAGE>
CONCENTRATION OF INVESTMENTS
ARIZONA FUND: "The Fund will not invest 25% or more of the value of its total
assets in any one industry, or in industrial development bonds or other
securities the interest upon which is paid from revenues of similar types of
projects, except that the Fund may invest 25% or more of the value of its total
assets in cash, cash items, or 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."
SUCCESSOR ARIZONA FUND: "The Fund will not make investments that will result in
the concentration of its investments in the securities of issuers primarily
engaged in the same industry. Government securities, municipal securities and
bank instruments will not be deemed to constitute an industry. To conform to the
current view of the SEC staff that only domestic bank instruments may be
excluded from industry concentration limitations, as a matter of non-fundamental
policy, the Fund will not exclude foreign bank instruments from industry
concentration limitation tests so long as the policy of the SEC remains in
effect. In addition, investments in certain industrial development bonds funded
by activities in a single industry will be deemed to constitute investment in an
industry, except when held for temporary defensive purposes. The investment of
more than 25% of the value of the Fund's total assets in any one industry will
constitute `concentration.'"
INVESTMENTS IN REAL ESTATE
ARIZONA FUND: "The Fund will not sell real estate, although it may invest
in securities of issuers whose business involves the purchase or sale of real
estate or in securities which are secured by real estate or interests in real
estate."
SUCCESSOR ARIZONA FUND: "The Fund may not purchase or sell real estate, provided
that this restriction does not prevent the Fund from investing in issuers which
invest, deal, or otherwise engage in transactions in real estate or interests
therein, or investing in securities that are secured by real estate or interests
therein. The Fund may exercise its rights under agreements relating to such
securities, including the right to enforce security interests and to hold real
estate acquired by reason of such enforcement until that real estate can be
liquidated in an orderly manner."
UNDERWRITING SECURITIES
ARIZONA FUND: "The Fund will not underwrite any issue of securities, except
as it may be deemed to be an underwriter under the Securities Act of 1933 in
connection with the sale of securities in accordance with its investment
objective, policies, and limitations."
SUCCESSOR ARIZONA FUND: "The Fund may not underwrite the securities of other
issuers, except that the Fund may engage in transactions involving the
acquisition, disposition or resale of its portfolio securities, under
circumstances where it may be considered to be an underwriter under the
Securities Act of 1933."
INVESTING IN COMMODITIES
ARIZONA FUND: "The Fund will not sell commodities, commodity contracts or
commodity futures contracts."
SUCCESSOR ARIZONA FUND: "The Fund may not purchase or sell physical
commodities, provided that the Fund may purchase securities of companies that
deal in commodities."
<PAGE>
ISSUING SENIOR SECURITIES AND BORROWING MONEY
ARIZONA FUND: "The Fund will not issue senior securities except that the Fund
may borrow money in amounts up to one-third of the value of its total assets,
including the amounts borrowed. The Fund will not borrow money for investment
leverage, but rather as a temporary, extraordinary, or emergency measure or to
facilitate management of the portfolio by enabling the Fund to meet redemption
requests when the liquidation of portfolio securities is deemed to be
inconvenient or disadvantageous. The Fund will not purchase any securities while
borrowings in excess of 5% of the value of its total assets are outstanding."
SUCCESSOR ARIZONA FUND: "The Fund may borrow money, directly or indirectly,
and issue senior securities to the maximum extent permitted under the 1940 Act."
LENDING CASH OR SECURITIES
ARIZONA FUND: "The Fund will not lend any assets, except portfolio
securities. This shall not prevent the Fund from engaging in transactions
permitted by its investment objective, policies and limitations or the Trust's
Declaration of Trust."
SUCCESSOR ARIZONA FUND: "The Fund may not make loans, provided that this
restriction does not prevent the Fund from purchasing debt obligations, entering
into repurchase agreements, lending its assets to broker/dealers or
institutional investors and investing in loans, including assignments and
participation interests."
PLEDGING ASSETS
ARIZONA FUND: "The Fund will not mortgage, pledge, or hypothecate any
assets except as necessary to secure permitted borrowings."
SUCCESSOR ARIZONA FUND: The Successor Fund is subject to a NON-fundamental
investment limitation pertaining to pledging assets that provides: "The Fund
will not mortgage, pledge or hypothecate any of its assets, provided that this
shall not apply to the transfer of securities in connection with any permissible
borrowing or to collateral arrangements in connection with permissible
activities."
SELLING SHORT AND BUYING ON MARGIN
ARIZONA FUND: "The Fund will not sell any securities short or purchase any
securities on margin but may obtain such short term credits as are necessary for
clearance of transactions."
SUCCESSOR ARIZONA FUND: The Successor Fund is not subject to an investment
restriction regarding selling securities short. The Successor Fund is subject to
a non-fundamental investment restriction relating to margin transactions that
states: "The Fund will not purchase securities on margin, provided that the Fund
may obtain short-term credits necessary for the clearance of purchases and sales
of securities."
NON-FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
PERMISSIBLE INVESTMENTS
ARIZONA FUND: "The Fund invests in a portfolio of high-quality tax-exempt
securities maturing in 13 months or less."
SUCCESSOR ARIZONA FUND: "The Fund invests in a portfolio of high-quality
tax-exempt securities maturing in 397 days or less."
<PAGE>
INVESTING IN ILLIQUID SECURITIES
ARIZONA FUND: "The Fund will not invest more than 10% of the value of its net
assets in illiquid securities including certain restricted securities not
determined to be liquid under criteria established by the Board and repurchase
agreements providing for settlement in more than seven days notice."
SUCCESSOR ARIZONA FUND: "The Fund will not purchase securities for which there
is no readily available market, or enter into repurchase agreements or purchase
time deposits maturing in more than seven days, if immediately after and as a
result, the value of such securities would exceed, in the aggregate, 10% of the
Fund's net assets."
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
ARIZONA FUND: The Fund presently has no policy.
SUCCESSOR ARIZONA FUND: "The Fund may invest its assets in securities of
other investment companies, including the securities of affiliated money market
funds, as an efficient means of carrying out its investment policies and
managing uninvested cash."
INVESTING FOR CONTROL
ARIZONA FUND: "The Fund will not invest in securities of a company for the
purpose of exercising control or management."
SUCCESSOR ARIZONA FUND: The Fund is not subject to a comparable restriction.
INVESTING IN OPTIONS
ARIZONA FUND: "The Fund will not invest in puts, calls, straddles, spreads,
or any combination of them."
SUCCESSOR ARIZONA FUND: The Fund is not subject to a comparable restriction.
STATE UNDERTAKINGS
ARIZONA FUND: "The Fund has no present intention to borrow money or pledge
securities in excess of 5% of the value of its net assets during the coming
fiscal year."
SUCCESSOR ARIZONA FUND: The Fund is not subject to a comparable undertaking.
<PAGE>
APPENDIX II-C
Set forth below is a comparison of the investment policies and restrictions of
the California Fund and the Successor California Fund:
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
FUNDAMENTAL INVESTMENT OBJECTIVE
CALIFORNIA FUND: "The Fund's investment objective is to provide current
income which is exempt from federal regular income tax and the personal income
taxes imposed by the State of California consistent with stability of
principal."
SUCCESSOR CALIFORNIA FUND: The Successor Fund is subject to an identical
fundamental investment objective.
FUNDAMENTAL INVESTMENT POLICY
CALIFORNIA FUND: "The Fund will invest so that at least 80% of its annual
interest income is exempt from federal regular income tax so that at least 80%
of its net assets is invested in obligations, the interest income from which is
exempt from federal regular income and California state income tax."
SUCCESSOR CALIFORNIA FUND: The Successor Fund is subject to an identical
fundamental investment policy.
DIVERSIFICATION
CALIFORNIA FUND: "With respect to securities comprising 75% of its assets,
the Fund will not invest more than 10% of its total assets in the securities of
any one issuer (except cash and cash items, repurchase agreements collateralized
by U.S. government securities, and U.S. government obligations). Under this
limitation, each governmental subdivision, including states, territories,
possessions of the United States, or their political subdivisions, agencies,
authorities, instrumentalities, or similar entities, will be considered a
separate issuer if its assets and revenues are separate from those of the
government body creating it and the security is backed only by its own assets
and revenues.
Industrial development bonds backed only by the assets and revenues of a
non-governmental user are considered to be issued solely by that user. If in the
case of an industrial development bond or government-issued security, a
governmental or other entity guarantees the security, such guarantee would be
considered a separate security issued by the guarantor, as well as the other
issuer, subject to limited exclusions allowed by the Investment Company Act of
1940."
SUCCESSOR CALIFORNIA FUND: "With respect to securities comprising 75% of the
value of its total assets, the Fund will not purchase securities of any one
issuer (other than cash; cash items; securities issued or guaranteed by the
government of the United States or its agencies or instrumentalities and
repurchase agreements collateralized by such U.S. government securities; and
securities of other investment companies) if, as a result, more than 5% of the
value of its total assets would be invested in securities of that issuer, or the
Fund would own more than 10% of the outstanding voting securities of that
issuer."
<PAGE>
CONCENTRATION OF INVESTMENTS
CALIFORNIA FUND: "The Fund will not purchase securities, if, as a result of such
purchase, 25% or more of the value of its total assets would be invested in any
one industry or in industrial development bonds or other securities, the
interest upon which is paid from revenues of similar types of projects. However,
the Fund may invest as temporary investments more than 25% of the value of its
assets in cash or certain money market instruments, securities issued or
guaranteed by the U.S. government, its agencies or instrumentalities, or
instruments secured by these money market instruments, such as repurchase
agreements."
SUCCESSOR CALIFORNIA FUND: "The Fund will not make investments that will result
in the concentration of its investments in the securities of issuers primarily
engaged in the same industry. Government securities, municipal securities and
bank instruments will not be deemed to constitute an industry. To conform to the
current view of the SEC staff that only domestic bank instruments may be
excluded from industry concentration limitations, as a matter of non-fundamental
policy, the Fund will not exclude foreign bank instruments from industry
concentration limitation tests so long as the policy of the SEC remains in
effect. In addition, investments in certain industrial development bonds funded
by activities in a single industry will be deemed to constitute investment in an
industry, except when held for temporary defensive purposes. The investment of
more than 25% of the value of the Fund's total assets in any one industry will
constitute `concentration.'"
INVESTMENTS IN REAL ESTATE
CALIFORNIA FUND: "The Fund will not purchase or sell real estate, although it
may invest in securities of issuers whose business involves the purchase or sale
of real estate or in securities which are secured by real estate or interests in
real estate."
SUCCESSOR CALIFORNIA FUND: "The Fund may not purchase or sell real estate,
provided that this restriction does not prevent the Fund from investing in
issuers which invest, deal, or otherwise engage in transactions in real estate
or interests therein, or investing in securities that are secured by real estate
or interests therein. The Fund may exercise its rights under agreements relating
to such securities, including the right to enforce security interests and to
hold real estate acquired by reason of such enforcement until that real estate
can be liquidated in an orderly manner."
UNDERWRITING SECURITIES
CALIFORNIA FUND: "The Fund will not underwrite any issue of securities,
except as it may be deemed to be an underwriter under the Securities Act of 1933
in connection with the sale of securities in accordance with its investment
objective, policies, and limitations."
SUCCESSOR CALIFORNIA FUND: "The Fund may not underwrite the securities of other
issuers, except that the Fund may engage in transactions involving the
acquisition, disposition or resale of its portfolio securities, under
circumstances where it may be considered to be an underwriter under the
Securities Act of 1933."
INVESTING IN COMMODITIES
CALIFORNIA FUND: "The Fund will not purchase or sell commodities, commodity
contracts, or commodity futures contracts."
SUCCESSOR CALIFORNIA FUND: "The Fund may not purchase or sell physical
commodities, provided that the Fund may purchase securities of companies that
deal in commodities."
<PAGE>
ISSUING SENIOR SECURITIES AND BORROWING MONEY
CALIFORNIA FUND: "The Fund will not issue senior securities except that the Fund
may borrow money in amounts up to one-third of the value of its net assets,
including the amounts borrowed. The Fund will not borrow money for investment
leverage, but rather as a temporary, extraordinary, or emergency measure or to
facilitate management of the portfolio by enabling the Fund to meet redemption
requests when the liquidation of portfolio securities is deemed to be
inconvenient or disadvantageous. The Fund will not purchase any securities while
borrowings in excess of 5% of the value of its total assets are outstanding."
SUCCESSOR CALIFORNIA FUND: "The Fund may borrow money, directly or
indirectly, and issue senior securities to the maximum extent permitted under
the 1940 Act."
LENDING CASH OR SECURITIES
CALIFORNIA FUND: "The Fund will not lend any of its assets except that it may
acquire publicly or nonpublicly issued California municipal securities or
temporary investments or enter into repurchase agreements, in accordance with
its investment objective, policies, and limitations, and its Declaration of
Trust."
SUCCESSOR CALIFORNIA FUND: "The Fund may not make loans, provided that this
restriction does not prevent the Fund from purchasing debt obligations, entering
into repurchase agreements, lending its assets to broker/dealers or
institutional investors and investing in loans, including assignments and
participation interests."
PLEDGING ASSETS
CALIFORNIA FUND: "The Fund will not mortgage, pledge, or hypothecate any
assets except to secure permitted borrowings. In those cases, it may pledge
assets having a market value not exceeding the lesser of the dollar amounts
borrowed or 15% of the value of its total assets at the time of the pledge."
SUCCESSOR CALIFORNIA FUND: The Successor Fund is subject to a NON-fundamental
investment limitation pertaining to pledging assets that provides: "The Fund
will not mortgage, pledge or hypothecate any of its assets, provided that this
shall not apply to the transfer of securities in connection with any permissible
borrowing or to collateral arrangements in connection with permissible
activities."
SELLING SHORT AND BUYING ON MARGIN
CALIFORNIA FUND: "The Fund will not sell any securities short or purchase
any securities on margin but may obtain such short-term credits as may be
necessary for
clearance of transactions."
SUCCESSOR CALIFORNIA FUND: The Successor Fund is not subject to an investment
restriction regarding selling securities short. The Successor Fund is subject to
a non-fundamental investment restriction relating to margin transactions that
states: "The Fund will not purchase securities on margin, provided that the Fund
may obtain short-term credits necessary for the clearance of purchases and sales
of securities."
NON-FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
PERMISSIBLE INVESTMENTS
CALIFORNIA FUND: "The Fund invests in a portfolio of high-quality
tax-exempt securities maturing in 13 months or less."
SUCCESSOR CALIFORNIA FUND: "The Fund invests in a portfolio of high-quality
tax-exempt securities maturing in 397 days or less."
<PAGE>
INVESTING IN ILLIQUID SECURITIES
CALIFORNIA FUND: "The Fund will not invest more than 10% of the value of its net
assets in illiquid securities, including certain restricted securities not
determined to be liquid under criteria established by the Board and repurchase
agreements providing for settlement in more than seven days after notice."
SUCCESSOR CALIFORNIA FUND: "The Fund will not purchase securities for which
there is no readily available market, or enter into repurchase agreements or
purchase time deposits maturing in more than seven days, if immediately after
and as a result, the value of such securities would exceed, in the aggregate,
10% of the Fund's net assets."
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
CALIFORNIA FUND: The Fund presently has no policy.
SUCCESSOR CALIFORNIA FUND: "The Fund may invest its assets in securities of
other investment companies, including the securities of affiliated money market
funds, as an efficient means of carrying out its investment policies and
managing its uninvested cash."
INVESTING FOR CONTROL
CALIFORNIA FUND: "The Fund will not invest in securities of a company for
the purpose of exercising control or management."
SUCCESSOR CALIFORNIA FUND: The Fund is not subject to a comparable restriction.
INVESTING IN OPTIONS
CALIFORNIA FUND: "The Fund will not invest in puts, calls, straddles,
spreads, or any combination of them."
SUCCESSOR CALIFORNIA FUND: The Fund is not subject to a comparable
restriction.
STATE UNDERTAKINGS
CALIFORNIA FUND: "The Fund has no present intention to borrow money or
pledge securities in excess of 5% of the value of its net assets during the
coming fiscal year."
SUCCESSOR CALIFORNIA FUND: The Fund is not subject to a comparable undertaking.
<PAGE>
APPENDIX II-D
Set forth below is a comparison of the investment policies and restrictions of
the Connecticut Fund and the Successor Connecticut Fund:
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
FUNDAMENTAL INVESTMENT OBJECTIVE
CONNECTICUT FUND: "The Fund's investment objective is to provide current
income which is exempt from federal regular income tax and the Connecticut
dividend and interest income tax consistent with stability of principal."
SUCCESSOR CONNECTICUT FUND: The Successor Fund is subject to an identical
fundamental investment objective.
FUNDAMENTAL INVESTMENT POLICY
CONNECTICUT FUND: "The Fund will invest its assets so that at least 80% of
its annual interest income is exempt from federal regular income tax and the
Connecticut dividend and interest income tax."
SUCCESSOR CONNECTICUT FUND: The Successor Fund is subject to an identical
fundamental investment policy.
CONCENTRATION OF INVESTMENTS
CONNECTICUT FUND: "The Fund will not purchase securities if, as a result of such
purchase, 25% or more of the value of its total assets would be invested in any
one industry or in industrial development bonds or other securities, the
interest upon which is paid from revenues of similar types of projects. However,
the Fund may invest as temporary investments more than 25% of the value of its
assets in cash or cash items (including instruments issued by a U.S. branch of a
domestic bank or savings and loan having capital, surplus, and undivided profits
in excess of $100,000,000 at the time of investment), securities issued or
guaranteed by the U.S. government, its agencies, or instrumentalities, or
instruments secured by these money market instruments, such as repurchase
agreements."
SUCCESSOR CONNECTICUT FUND: "The Fund will not make investments that will result
in the concentration of its investments in the securities of issuers primarily
engaged in the same industry. Government securities, municipal securities and
bank instruments will not be deemed to constitute an industry. To conform to the
current view of the SEC staff that only domestic bank instruments may be
excluded from industry concentration limitations, as a matter of non-fundamental
policy, the Fund will not exclude foreign bank instruments from industry
concentration limitation tests so long as the policy of the SEC remains in
effect. In addition, investments in certain industrial development bonds funded
by activities in a single industry will be deemed to constitute investment in an
industry, except when held for temporary defensive purposes. The investment of
more than 25% of the value of the Fund's total assets in any one industry will
constitute `concentration.'"
INVESTMENTS IN REAL ESTATE
CONNECTICUT FUND: "The Fund will not purchase or sell real estate, although it
may invest in securities of issuers whose business involves the purchase or sale
of real estate or in securities which are secured by real estate or interests in
real estate."
SUCCESSOR CONNECTICUT FUND: "The Fund may not purchase or sell real estate,
provided that this restriction does not prevent the Fund from investing in
issuers which invest, deal, or otherwise engage in transactions in real estate
or interests therein, or investing in securities that are secured by real estate
or interests therein. The Fund may exercise its rights under agreements relating
to such securities, including the right to enforce security interests and to
hold real estate acquired by reason of such enforcement until that real estate
can be liquidated in an orderly manner."
<PAGE>
UNDERWRITING SECURITIES
CONNECTICUT FUND: "The Fund will not underwrite any issue of securities,
except as it may be deemed to be an underwriter under the Securities Act of 1933
in connection with the sale of securities in accordance with its investment
objective, policies, and limitations."
SUCCESSOR CONNECTICUT FUND: "The Fund may not underwrite the securities of other
issuers, except that the Fund may engage in transactions involving the
acquisition, disposition or resale of its portfolio securities, under
circumstances where it may be considered to be an underwriter under the
Securities Act of 1933."
INVESTING IN COMMODITIES
CONNECTICUT FUND: "The Fund will not purchase or sell commodities,
commodity contracts, or commodity futures contracts."
SUCCESSOR CONNECTICUT FUND: "The Fund may not purchase or sell physical
commodities, provided that the Fund may purchase securities of companies that
deal in commodities."
ISSUING SENIOR SECURITIES AND BORROWING MONEY
CONNECTICUT FUND: "The Fund will not issue senior securities except that the
Fund may borrow money in amounts up to one-third of the value of its total
assets, including the amounts borrowed. The Fund will not borrow money for
investment leverage, but rather as a temporary, extraordinary, or emergency
measure or to facilitate management of the portfolio by enabling the Fund to
meet redemption requests when the liquidation of portfolio securities is deemed
to be inconvenient or disadvantageous. The Fund will not purchase any securities
while borrowings in excess of 5% of the value of its total assets are
outstanding."
SUCCESSOR CONNECTICUT FUND: "The Fund may borrow money, directly or
indirectly, and issue senior securities to the maximum extent permitted under
the 1940 Act."
LENDING CASH OR SECURITIES
CONNECTICUT FUND: "The Fund will not lend any of its assets except that it may
acquire publicly or nonpublicly issued Connecticut municipal securities or
temporary investments or enter into repurchase agreements, in accordance with
its investment objective, policies, and limitations."
SUCCESSOR CONNECTICUT FUND: "The Fund may not make loans, provided that this
restriction does not prevent the Fund from purchasing debt obligations, entering
into repurchase agreements, lending its assets to broker/dealers or
institutional investors and investing in loans, including assignments and
participation interests."
PLEDGING ASSETS
CONNECTICUT FUND: "The Fund will not mortgage, pledge, or hypothecate any
assets except to secure permitted borrowings. In those cases, it may pledge
assets having a market value not exceeding the lesser of the dollar amounts
borrowed or 15% of the value of its total assets at the time of the pledge."
SUCCESSOR CONNECTICUT FUND: The Successor Fund is subject to a NON-fundamental
investment limitation pertaining to pledging assets that provides: "The Fund
will not mortgage, pledge or hypothecate any of its assets, provided that this
shall not apply to the transfer of securities in connection with any permissible
borrowing or to collateral arrangements in connection with permissible
activities."
<PAGE>
SELLING SHORT AND BUYING ON MARGIN
CONNECTICUT FUND: "The Fund will not sell any securities short or purchase
any securities on margin but may obtain such short-term credits as may be
necessary for the clearance of transactions."
SUCCESSOR CONNECTICUT FUND: The Successor Fund is not subject to an investment
restriction regarding selling securities short. The Successor Fund is subject to
a non-fundamental investment restriction relating to margin transactions that
states: "The Fund will not purchase securities on margin, provided that the Fund
may obtain short-term credits necessary for the clearance of purchases and sales
of securities."
NON-FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
PERMISSIBLE INVESTMENTS
CONNECTICUT FUND: "The Fund invests in a portfolio of high-quality
tax-exempt securities maturing in 13 months or less."
SUCCESSOR CONNECTICUT FUND: "The Fund invests in a portfolio of
high-quality tax-exempt securities maturing in 397 days or less."
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
CONNECTICUT FUND: The Fund presently has no policy.
SUCCESSOR CONNECTICUT FUND: "The Fund may invest its assets in securities
of other investment companies, including the securities of affiliated money
market funds, as an efficient means of carrying out its investment policies and
managing uninvested cash."
INVESTING FOR CONTROL
CONNECTICUT FUND: "The Fund will not invest in securities of a company for
the purpose of exercising control or management."
SUCCESSOR CONNECTICUT FUND: The Fund is not subject to a comparable
restriction.
INVESTING IN OPTIONS
CONNECTICUT FUND: "The Fund will not invest in puts, calls, straddles,
spreads, or any combination of them."
SUCCESSOR CONNECTICUT FUND: The Fund is not subject to a comparable
restriction.
STATE UNDERTAKINGS
CONNECTICUT FUND: "The Fund has no present intention to borrow money or
pledge securities in excess of 5% of the value of its net assets during the
coming fiscal year."
SUCCESSOR CONNECTICUT FUND: The Fund is not subject to a comparable
undertaking.
<PAGE>
APPENDIX II-E
Set forth below is a comparison of the investment policies and restrictions of
the Florida Fund and the Successor Florida Fund:
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
FUNDAMENTAL INVESTMENT OBJECTIVE
FLORIDA FUND: "The Fund's investment objective is to provide current income
exempt from federal regular income tax consistent with stability of principal
and liquidity and to maintain an investment portfolio that will cause its shares
to be exempt from the Florida state intangibles tax."
SUCCESSOR FLORIDA FUND: The Successor Fund is subject to an identical
fundamental investment objective.
FUNDAMENTAL INVESTMENT POLICY
FLORIDA FUND: "The Fund will invest so that at least 80% of its annual
interest income will be exempt from federal regular income tax."
SUCCESSOR FLORIDA FUND: The Successor Fund is subject to an identical
fundamental investment policy.
CONCENTRATION OF INVESTMENTS
FLORIDA FUND: "The Fund will not invest 25% or more of the value of its total
assets in any one industry, or in industrial development bonds or other
securities the interest upon which is paid from revenues of similar types of
projects, except that the Fund may invest 25% or more of the value of its total
assets in cash, cash items, or 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."
SUCCESSOR FLORIDA FUND: "The Fund will not make investments that will result in
the concentration of its investments in the securities of issuers primarily
engaged in the same industry. Government securities, municipal securities and
bank instruments will not be deemed to constitute an industry. To conform to the
current view of the SEC staff that only domestic bank instruments may be
excluded from industry concentration limitations, as a matter of non-fundamental
policy, the Fund will not exclude foreign bank instruments from industry
concentration limitation tests so long as the policy of the SEC remains in
effect. In addition, investments in certain industrial development bonds funded
by activities in a single industry will be deemed to constitute investment in an
industry, except when held for temporary defensive purposes. The investment of
more than 25% of the value of the Fund's total assets in any one industry will
constitute `concentration.'"
INVESTMENTS IN REAL ESTATE
FLORIDA FUND: "The Fund will not purchase or sell real estate, including limited
partnership interests, although it may invest in securities of issuers whose
business involves the purchase or sale of real estate or in securities secured
by real estate or interests in real estate."
SUCCESSOR FLORIDA FUND: "The Fund may not purchase or sell real estate, provided
that this restriction does not prevent the Fund from investing in issuers which
invest, deal, or otherwise engage in transactions in real estate or interests
therein, or investing in securities that are secured by real estate or interests
therein. The Fund may exercise its rights under agreements relating to such
securities, including the right to enforce security interests and to hold real
estate acquired by reason of such enforcement until that real estate can be
liquidated in an orderly manner."
<PAGE>
UNDERWRITING SECURITIES
FLORIDA FUND: "The Fund will not underwrite any issue of securities, except
as it may be deemed to be an underwriter under the Securities Act of 1933 in
connection with the sale of securities in accordance with its investment
objective, policies, and limitations."
SUCCESSOR FLORIDA FUND: "The Fund may not underwrite the securities of other
issuers, except that the Fund may engage in transactions involving the
acquisition, disposition or resale of its portfolio securities, under
circumstances where it may be considered to be an underwriter under the
Securities Act of 1933."
INVESTING IN COMMODITIES
FLORIDA FUND: "The Fund will not purchase or sell commodities, commodity
contracts, or commodity futures contracts."
SUCCESSOR FLORIDA FUND: "The Fund may not purchase or sell physical
commodities, provided that the Fund may purchase securities of companies that
deal in commodities."
ISSUING SENIOR SECURITIES AND BORROWING MONEY
FLORIDA FUND: "The Fund will not issue senior securities except that the Fund
may borrow money in amounts up to one-third of the value of its total assets,
including the amounts borrowed. The Fund will not borrow money for investment
leverage, but rather as a temporary, extraordinary, or emergency measure or to
facilitate management of the portfolio by enabling the Fund to meet redemption
requests when the liquidation of portfolio securities is deemed to be
inconvenient or disadvantageous. The Fund will not purchase any securities while
borrowings in excess of 5% of the value of its total assets are outstanding."
SUCCESSOR FLORIDA FUND: "The Fund may borrow money, directly or indirectly,
and issue senior securities to the maximum extent permitted under the 1940 Act."
LENDING CASH OR SECURITIES
FLORIDA FUND: "The Fund will not lend any of its assets, except that it may
purchase or hold portfolio securities permitted by its investment objective,
policies, and limitations or Declaration of Trust."
SUCCESSOR FLORIDA FUND: "The Fund may not make loans, provided that this
restriction does not prevent the Fund from purchasing debt obligations, entering
into repurchase agreements, lending its assets to broker/dealers or
institutional investors and investing in loans, including assignments and
participation interests."
PLEDGING ASSETS
FLORIDA FUND: "The Fund will not mortgage, pledge, or hypothecate any
assets except as necessary to secure permitted borrowings."
SUCCESSOR FLORIDA FUND: The Successor Fund is subject to a NON-fundamental
investment limitation pertaining to pledging assets that provides: "The Fund
will not mortgage, pledge or hypothecate any of its assets, provided that this
shall not apply to the transfer of securities in connection with any permissible
borrowing or to collateral arrangements in connection with permissible
activities."
<PAGE>
SELLING SHORT AND BUYING ON MARGIN
FLORIDA FUND: "The Fund will not sell any securities short or purchase any
securities on margin but may obtain such short-term credits as are necessary for
clearance of transactions."
SUCCESSOR FLORIDA FUND: The Successor Fund is not subject to an investment
restriction regarding selling securities short. The Successor Fund is subject to
a non-fundamental investment restriction relating to margin transactions that
states: "The Fund will not purchase securities on margin, provided that the Fund
may obtain short-term credits necessary for the clearance of purchases and sales
of securities."
NON-FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
PERMISSIBLE INVESTMENTS
FLORIDA FUND: "The Fund invests in a portfolio of high-quality tax-exempt
securities maturing in 13 months or less."
SUCCESSOR FLORIDA FUND: "The Fund invests in a portfolio of high-quality
tax-exempt securities maturing in 397 days or less."
INVESTING IN ILLIQUID SECURITIES
FLORIDA FUND: "The Fund will not invest more than 10% of the value of its net
assets in illiquid securities, including certain restricted securities not
determined to be liquid under criteria established by the Board, non-negotiable
time deposits and repurchase agreements providing for settlement in more than
seven days after notice."
SUCCESSOR FLORIDA FUND: "The Fund will not purchase securities for which there
is no readily available market, or enter into repurchase agreements or purchase
time deposits maturing in more than seven days, if immediately after and as a
result, the value of such securities would exceed, in the aggregate, 10% of the
Fund's net assets."
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
FLORIDA FUND: The Fund presently has no policy.
SUCCESSOR FLORIDA FUND: "The Fund may invest its assets in securities of
other investment companies, including the securities of affiliated money market
funds, as an efficient means of carrying out its investment policies and
managing its uninvested cash." INVESTING FOR CONTROL
FLORIDA FUND: "The Fund will not invest in securities of a company for the
purpose of exercising control or management."
SUCCESSOR FLORIDA FUND: The Fund is not subject to a comparable restriction.
INVESTING IN OPTIONS
FLORIDA FUND: "The Fund will not invest in puts, calls, straddles, spreads,
or any combination of them."
SUCCESSOR FLORIDA FUND: The Fund is not subject to a comparable restriction.
<PAGE>
STATE UNDERTAKINGS
FLORIDA FUND: "The Fund has no present intent to borrow money or pledge
securities in excess of 5% of the value of its net assets during the coming
fiscal year."
SUCCESSOR FLORIDA FUND: The Fund is not subject to a comparable undertaking.
<PAGE>
APPENDIX II-F
Set forth below is a comparison of the investment policies and restrictions of
the Georgia Fund and the Successor Georgia Fund:
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
FUNDAMENTAL INVESTMENT OBJECTIVE
GEORGIA FUND: "The Fund's investment objective is to provide current income
exempt from federal regular income tax and the income tax imposed by the State
of Georgia
consistent with stability of principal and liquidity."
SUCCESSOR GEORGIA FUND: The Successor Fund is subject to an identical
fundamental investment objective.
FUNDAMENTAL INVESTMENT POLICY
GEORGIA FUND: "The Fund will invest so that at least 80% of its annual
interest income will be exempt from federal regular income tax and Georgia state
income tax."
SUCCESSOR GEORGIA FUND: The Successor Fund is subject to an identical
fundamental investment policy.
CONCENTRATION OF INVESTMENTS
GEORGIA FUND: "The Fund will not invest 25% or more of the value of its total
assets in any one industry, or in industrial development bonds or other
securities the interest upon which is paid from revenues of similar types of
projects, except that the Fund may invest 25% or more of the value of its total
assets in cash, cash items, or 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."
SUCCESSOR GEORGIA FUND: "The Fund will not make investments that will result in
the concentration of its investments in the securities of issuers primarily
engaged in the same industry. Government securities, municipal securities and
bank instruments will not be deemed to constitute an industry. To conform to the
current view of the SEC staff that only domestic bank instruments may be
excluded from industry concentration limitations, as a matter of non-fundamental
policy, the Fund will not exclude foreign bank instruments from industry
concentration limitation tests so long as the policy of the SEC remains in
effect. In addition, investments in certain industrial development bonds funded
by activities in a single industry will be deemed to constitute investment in an
industry, except when held for temporary defensive purposes. The investment of
more than 25% of the value of the Fund's total assets in any one industry will
constitute `concentration.'"
INVESTMENTS IN REAL ESTATE
GEORGIA FUND: "The Fund will not purchase or sell real estate, including limited
partnership interests, although it may invest in securities of issuers whose
business involves the purchase or sale of real estate or in securities secured
by real estate or interests in real estate."
SUCCESSOR GEORGIA FUND: "The Fund may not purchase or sell real estate, provided
that this restriction does not prevent the Fund from investing in issuers which
invest, deal, or otherwise engage in transactions in real estate or interests
therein, or investing in securities that are secured by real estate or interests
therein. The Fund may exercise its rights under agreements relating to such
securities, including the right to enforce security interests and to hold real
estate acquired by reason of such enforcement until that real estate can be
liquidated in an orderly manner."
<PAGE>
UNDERWRITING SECURITIES
GEORGIA FUND: "The Fund will not underwrite any issue of securities, except
as it may be deemed to be an underwriter under the Securities Act of 1933 in
connection with the sale of securities in accordance with its investment
objective, policies, and limitations."
SUCCESSOR GEORGIA FUND: "The Fund may not underwrite the securities of other
issuers, except that the Fund may engage in transactions involving the
acquisition, disposition or resale of its portfolio securities, under
circumstances where it may be considered to be an underwriter under the
Securities Act of 1933."
INVESTING IN COMMODITIES
GEORGIA FUND: "The Fund will not purchase or sell commodities, commodity
contracts, or commodity futures contracts."
SUCCESSOR GEORGIA FUND: "The Fund may not purchase or sell physical
commodities, provided that the Fund may purchase securities of companies that
deal in commodities."
ISSUING SENIOR SECURITIES AND BORROWING MONEY
GEORGIA FUND: "The Fund will not issue senior securities except that the Fund
may borrow money in amounts up to one-third of the value of its total assets,
including the amounts borrowed. The Fund will not borrow money for investment
leverage, but rather as a temporary, extraordinary, or emergency measure or to
facilitate management of the portfolio by enabling the Fund to meet redemption
requests when the liquidation of portfolio securities is deemed to be
inconvenient or disadvantageous. The Fund will not purchase any securities while
borrowings in excess of 5% of the value of its total assets are outstanding."
SUCCESSOR GEORGIA FUND: "The Fund may borrow money, directly or indirectly,
and issue senior securities to the maximum extent permitted under the 1940 Act."
LENDING CASH OR SECURITIES
GEORGIA FUND: "The Fund will not lend any of its assets, except that it may
purchase or hold portfolio securities permitted by its investment objective,
policies, and limitations or the Trust's Declaration of Trust."
SUCCESSOR GEORGIA FUND: "The Fund may not make loans, provided that this
restriction does not prevent the Fund from purchasing debt obligations, entering
into repurchase agreements, lending its assets to broker/dealers or
institutional investors and investing in loans, including assignments and
participation interests."
PLEDGING ASSETS
GEORGIA FUND: "The Fund will not mortgage, pledge, or hypothecate any
assets except as necessary to secure permitted borrowings."
SUCCESSOR GEORGIA FUND: The Successor Fund is subject to a NON-fundamental
investment limitation pertaining to pledging assets that provides: "The Fund
will not mortgage, pledge or hypothecate any of its assets, provided that this
shall not apply to the transfer of securities in connection with any permissible
borrowing or to collateral arrangements in connection with permissible
activities."
<PAGE>
SELLING SHORT AND BUYING ON MARGIN
GEORGIA FUND: "The Fund will not sell any securities short or purchase any
securities on margin but may obtain such short-term credits as are necessary for
clearance of transactions."
SUCCESSOR GEORGIA FUND: The Successor Fund is not subject to an investment
restriction regarding selling securities short. The Successor Fund is subject to
a non-fundamental investment restriction relating to margin transactions that
states: "The Fund will not purchase securities on margin, provided that the Fund
may obtain short-term credits necessary for the clearance of purchases and sales
of securities."
NON-FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
PERMISSIBLE INVESTMENTS
GEORGIA FUND: "The Fund invests in a portfolio of high-quality tax-exempt
securities maturing in 13 months or less."
SUCCESSOR GEORGIA FUND: "The Fund invests in a portfolio of high-quality
tax-exempt securities maturing in 397 days or less."
INVESTING IN ILLIQUID SECURITIES
GEORGIA FUND: "The Fund will not invest more than 10% of the value of its net
assets in illiquid securities including certain restricted securities not
determined to be liquid under criteria established by the Board and repurchase
agreements providing for settlement in more than seven days notice."
SUCCESSOR GEORGIA FUND: "The Fund will not purchase securities for which there
is no readily available market, or enter into repurchase agreements or purchase
time deposits maturing in more than seven days, if immediately after and as a
result, the value of such securities would exceed, in the aggregate, 10% of the
Fund's net assets."
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
GEORGIA FUND: The Fund presently has no policy.
SUCCESSOR GEORGIA FUND: "The Fund may invest its assets in securities of
other investment companies, including the securities of affiliated money market
funds, as an efficient means of carrying out its investment policies and
managing its uninvested cash."
INVESTING FOR CONTROL
GEORGIA FUND: "The Fund will not invest in securities of a company for the
purpose of exercising control or management."
SUCCESSOR GEORGIA FUND: The Fund is not subject to a comparable restriction.
INVESTING IN OPTIONS
GEORGIA FUND: "The Fund will not invest in puts, calls, straddles, spreads,
or any combination of them."
SUCCESSOR GEORGIA FUND: The Fund is not subject to a comparable restriction.
<PAGE>
STATE UNDERTAKINGS
GEORGIA FUND: "The Fund has no present intent to borrow money or pledge
securities in excess of 5% of the value of its net assets during the coming
fiscal year."
SUCCESSOR GEORGIA FUND: The Fund is not subject to a comparable undertaking.
<PAGE>
APPENDIX II-G
Set forth below is a comparison of the investment policies and restrictions of
the Maryland Fund and the Successor Maryland Fund:
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
FUNDAMENTAL INVESTMENT OBJECTIVE
MARYLAND FUND: "The Fund's investment objective is to provide current
income exempt from federal regular income tax and the personal income taxes
imposed by the State of Maryland and Maryland municipalities consistent with
stability of principal and liquidity."
SUCCESSOR MARYLAND FUND: The Successor Fund is subject to an identical
fundamental investment objective.
FUNDAMENTAL INVESTMENT POLICY
MARYLAND FUND: "The Fund will invest so that at least 80% of its annual
interest income is exempt from federal regular income tax and Maryland state and
local income tax."
SUCCESSOR MARYLAND FUND: The Successor Fund is subject to an identical
fundamental investment policy.
CONCENTRATION OF INVESTMENTS
MARYLAND FUND: "The Fund will not purchase securities, if, as a result of such
purchase, 25% or more of the value of its total assets would be invested in any
one industry or in industrial development bonds or other securities, the
interest upon which is paid from revenues of similar types of projects. However,
the Fund may invest as temporary investments more than 25% of the value of its
assets in cash or cash items, securities issued or guaranteed by the U.S.
government, its agencies, or instrumentalities, or instruments secured by these
money market instruments, such as repurchase agreements."
SUCCESSOR MARYLAND FUND: "The Fund will not make investments that will result in
the concentration of its investments in the securities of issuers primarily
engaged in the same industry. Government securities, municipal securities and
bank instruments will not be deemed to constitute an industry. To conform to the
current view of the SEC staff that only domestic bank instruments may be
excluded from industry concentration limitations, as a matter of non-fundamental
policy, the Fund will not exclude foreign bank instruments from industry
concentration limitation tests so long as the policy of the SEC remains in
effect. In addition, investments in certain industrial development bonds funded
by activities in a single industry will be deemed to constitute investment in an
industry, except when held for temporary defensive purposes. The investment of
more than 25% of the value of the Fund's total assets in any one industry will
constitute `concentration.'"
INVESTMENTS IN REAL ESTATE
MARYLAND FUND: "The Fund will not purchase or sell real estate or real estate
limited partnerships, although it may invest in securities of issuers whose
business involves the purchase or sale of real estate or in securities which are
secured by real estate or interests in real estate."
SUCCESSOR MARYLAND FUND: "The Fund may not purchase or sell real estate,
provided that this restriction does not prevent the Fund from investing in
issuers which invest, deal, or otherwise engage in transactions in real estate
or interests therein, or investing in securities that are secured by real estate
or interests therein. The Fund may exercise its rights under agreements relating
to such securities, including the right to enforce security interests and to
hold real estate acquired by reason of such enforcement until that real estate
can be liquidated in an orderly manner."
<PAGE>
UNDERWRITING SECURITIES
MARYLAND FUND: "The Fund will not underwrite any issue of securities,
except as it may be deemed to be an underwriter under the Securities Act of 1933
in connection with the sale of securities in accordance with its investment
objective, policies, and limitations."
SUCCESSOR MARYLAND FUND: "The Fund may not underwrite the securities of other
issuers, except that the Fund may engage in transactions involving the
acquisition, disposition or resale of its portfolio securities, under
circumstances where it may be considered to be an underwriter under the
Securities Act of 1933."
INVESTING IN COMMODITIES
MARYLAND FUND: "The Fund will not purchase or sell commodities, commodity
contracts, or commodity futures contracts."
SUCCESSOR MARYLAND FUND: "The Fund may not purchase or sell physical
commodities, provided that the Fund may purchase securities of companies that
deal in commodities."
ISSUING SENIOR SECURITIES AND BORROWING MONEY
MARYLAND FUND: "The Fund will not issue senior securities except that the Fund
may borrow money directly or through reverse repurchase agreements in amounts up
to one-third of the value of its net assets, including the amounts borrowed. The
Fund will not borrow money or engage in reverse repurchase agreements for
investment leverage, but rather as a temporary, extraordinary, or emergency
measure or to facilitate management of the portfolio by enabling the Fund to
meet redemption requests when the liquidation of portfolio securities is deemed
to be inconvenient or disadvantageous. The Fund will not purchase any securities
while borrowings in excess of 5% of its total assets are outstanding."
SUCCESSOR MARYLAND FUND: "The Fund may borrow money, directly or
indirectly, and issue senior securities to the maximum extent permitted under
the 1940 Act."
LENDING CASH OR SECURITIES
MARYLAND FUND: "The Fund will not lend any of its assets except that it may
acquire publicly or nonpublicly issued Maryland municipal securities or
temporary investments or enter into repurchase agreements, in accordance with
its investment objective, policies, limitations, and its Declaration of Trust."
SUCCESSOR MARYLAND FUND: "The Fund may not make loans, provided that this
restriction does not prevent the Fund from purchasing debt obligations, entering
into repurchase agreements, lending its assets to broker/dealers or
institutional investors and investing in loans, including assignments and
participation interests."
PLEDGING ASSETS
MARYLAND FUND: "The Fund will not mortgage, pledge, or hypothecate any
assets except to secure permitted borrowings. In those cases, it may pledge
assets having a market value not exceeding the lesser of the dollar amounts
borrowed or 15% of the value of its total assets at the time of the pledge."
SUCCESSOR MARYLAND FUND: The Successor Fund is subject to a NON-fundamental
investment limitation pertaining to pledging assets that provides: "The Fund
will not mortgage, pledge or hypothecate any of its assets, provided that this
shall not apply to the transfer of securities in connection with any permissible
borrowing or to collateral arrangements in connection with permissible
activities."
<PAGE>
SELLING SHORT AND BUYING ON MARGIN
MARYLAND FUND: "The Fund will not sell any securities short or purchase any
securities on margin but may obtain such short-term credits as may be necessary
for clearance of transactions."
SUCCESSOR MARYLAND FUND: The Successor Fund is not subject to an investment
restriction regarding selling securities short. The Successor Fund is subject to
a non-fundamental investment restriction relating to margin transactions that
states: "The Fund will not purchase securities on margin, provided that the Fund
may obtain short-term credits necessary for the clearance of purchases and sales
of securities."
NON-FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
PERMISSIBLE INVESTMENTS
MARYLAND FUND: "The Fund invests in a portfolio of high-quality tax-exempt
securities maturing in 13 months or less."
SUCCESSOR MARYLAND FUND: "The Fund invests in a portfolio of high-quality
tax-exempt securities maturing in 397 days or less."
INVESTING IN ILLIQUID SECURITIES
MARYLAND FUND: "The Fund will not invest more than 10% of the value of its net
assets in illiquid securities including certain restricted securities not
determined to be liquid under criteria established by the Board and repurchase
agreements providing for settlement in more than seven days notice."
SUCCESSOR MARYLAND FUND: "The Fund will not purchase securities for which there
is no readily available market, or enter into repurchase agreements or purchase
time deposits maturing in more than seven days, if immediately after and as a
result, the value of such securities would exceed, in the aggregate, 10% of the
Fund's net assets."
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
MARYLAND FUND: The Fund presently has no policy.
SUCCESSOR MARYLAND FUND: "The Fund may invest its assets in securities of
other investment companies, including the securities of affiliated money market
funds, as an efficient means of carrying out its investment policies and
managing its uninvested cash."
INVESTING FOR CONTROL
MARYLAND FUND: "The Fund will not invest in securities of a company for the
purpose of exercising control or management."
SUCCESSOR MARYLAND FUND: The Fund is not subject to a comparable restriction.
INVESTING IN OPTIONS
MARYLAND FUND: "The Fund will not invest in puts, calls, straddles,
spreads, or any combination of them."
SUCCESSOR MARYLAND FUND: The Fund is not subject to a comparable restriction.
<PAGE>
STATE UNDERTAKINGS
MARYLAND FUND: "The Fund has no present intent to borrow money or pledge
securities in excess of 5% of the value of its net assets during the coming
fiscal year."
SUCCESSOR MARYLAND FUND: The Fund is not subject to a comparable undertaking.
<PAGE>
APPENDIX II-H
Set forth below is a comparison of the investment policies and restrictions of
the Massachusetts Fund and the Successor Massachusetts Fund:
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
FUNDAMENTAL INVESTMENT OBJECTIVE
MASSACHUSETTS FUND: "The Fund's investment objective is to provide current
income which is exempt from federal regular income tax and Massachusetts state
income tax consistent with stability of principal."
SUCCESSOR MASSACHUSETTS FUND: The Successor Fund is subject to an identical
fundamental investment objective.
FUNDAMENTAL INVESTMENT POLICY
MASSACHUSETTS FUND: "The Fund invest its assets so that at least 80% of its
annual interest income is exempt from federal regular income tax and
Massachusetts state income tax."
SUCCESSOR MASSACHUSETTS FUND: The Successor Fund is subject to an identical
fundamental investment policy.
CONCENTRATION OF INVESTMENTS
MASSACHUSETTS FUND: "The Fund will not purchase securities if, as a result of
such purchase, 25% or more of the value of its total assets would be invested in
any one industry or in industrial development bonds or other securities, the
interest upon which is paid from revenues of similar types of projects. However,
the Fund may invest as temporary investments more than 25% of the value of its
assets in cash or cash items (including instruments issued by a U.S. branch of a
domestic bank or savings and loan having capital, surplus, and undivided profits
in excess of $100,000,000 at the time of investment), securities issued or
guaranteed by the U.S. government, its agencies, or instrumentalities, or
instruments secured by these money market instruments, such as repurchase
agreements."
SUCCESSOR MASSACHUSETTS FUND: "The Fund will not make investments that will
result in the concentration of its investments in the securities of issuers
primarily engaged in the same industry. Government securities, municipal
securities and bank instruments will not be deemed to constitute an industry. To
conform to the current view of the SEC staff that only domestic bank instruments
may be excluded from industry concentration limitations, as a matter of
non-fundamental policy, the Fund will not exclude foreign bank instruments from
industry concentration limitation tests so long as the policy of the SEC remains
in effect. In addition, investments in certain industrial development bonds
funded by activities in a single industry will be deemed to constitute
investment in an industry, except when held for temporary defensive purposes.
The investment of more than 25% of the value of the Fund's total assets in any
one industry will constitute `concentration.'"
INVESTMENTS IN REAL ESTATE
MASSACHUSETTS FUND: "The Fund will not purchase or sell real estate or real
estate limited partnerships, although it may invest in securities of issuers
whose business involves the purchase or sale of real estate or in securities
which are secured by real estate or interests in real estate."
SUCCESSOR MASSACHUSETTS FUND: "The Fund may not purchase or sell real estate,
provided that this restriction does not prevent the Fund from investing in
issuers which invest, deal, or otherwise engage in transactions in real estate
or interests therein, or investing in securities that are secured by real estate
or interests therein. The Fund may exercise its rights under agreements relating
to such securities, including the right to enforce security interests and to
hold real estate acquired by reason of such enforcement until that real estate
can be liquidated in an orderly manner."
<PAGE>
UNDERWRITING SECURITIES
MASSACHUSETTS FUND: "The Fund will not underwrite any issue of securities,
except as it may be deemed to be an underwriter under the Securities Act of 1933
in connection with the sale of securities in accordance with its investment
objective, policies, and limitations."
SUCCESSOR MASSACHUSETTS FUND: "The Fund may not underwrite the securities of
other issuers, except that the Fund may engage in transactions involving the
acquisition, disposition or resale of its portfolio securities, under
circumstances where it may be considered to be an underwriter under the
Securities Act of 1933."
INVESTING IN COMMODITIES
MASSACHUSETTS FUND: "The Fund will not purchase or sell commodities,
commodity contracts, or commodity futures contracts."
SUCCESSOR MASSACHUSETTS FUND: "The Fund may not purchase or sell physical
commodities, provided that the Fund may purchase securities of companies that
deal in
commodities."
ISSUING SENIOR SECURITIES AND BORROWING MONEY
MASSACHUSETTS FUND: "The Fund will not issue senior securities except that the
Fund may borrow money in amounts up to one-third of the value of its total
assets, including the amounts borrowed. The Fund will not borrow money for
investment leverage, but rather as a temporary, extraordinary, or emergency
measure or to facilitate management of the portfolio by enabling the Fund to
meet redemption requests when the liquidation of portfolio securities is deemed
to be inconvenient or disadvantageous. The Fund will not purchase any securities
while borrowings in excess of 5% of the value of its total assets are
outstanding."
SUCCESSOR MASSACHUSETTS FUND: "The Fund may borrow money, directly or
indirectly, and issue senior securities to the maximum extent permitted under
the 1940 Act."
LENDING CASH OR SECURITIES
MASSACHUSETTS FUND: "The Fund will not lend any of its assets except that it may
acquire publicly or nonpublicly issued Massachusetts municipal securities or
temporary investments or enter into repurchase agreements, in accordance with
its investment objective, policies, and limitations or Declaration of Trust."
SUCCESSOR MASSACHUSETTS FUND: "The Fund may not make loans, provided that this
restriction does not prevent the Fund from purchasing debt obligations, entering
into repurchase agreements, lending its assets to broker/dealers or
institutional investors and investing in loans, including assignments and
participation interests."
PLEDGING ASSETS
MASSACHUSETTS FUND: "The Fund will not mortgage, pledge, or hypothecate any
assets except to secure permitted borrowings. In those cases, it may pledge
assets having a market value not exceeding the lesser of the dollar amounts
borrowed or 15% of the value of its total assets at the time of the pledge."
SUCCESSOR MASSACHUSETTS FUND: The Successor Fund is subject to a NON-fundamental
investment limitation pertaining to pledging assets that provides: "The Fund
will not mortgage, pledge or hypothecate any of its assets, provided that this
shall not apply to the transfer of securities in connection with any permissible
borrowing or to collateral arrangements in connection with permissible
activities."
<PAGE>
SELLING SHORT AND BUYING ON MARGIN
MASSACHUSETTS FUND: "The Fund will not sell any securities short or
purchase any securities on margin but may obtain such short-term credits as are
necessary for the clearance of transactions."
SUCCESSOR MASSACHUSETTS FUND: The Successor Fund is not subject to an investment
restriction regarding selling securities short. The Successor Fund is subject to
a non-fundamental investment restriction relating to margin transactions that
states: "The Fund will not purchase securities on margin, provided that the Fund
may obtain short-term credits necessary for the clearance of purchases and sales
of securities."
NON-FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
PERMISSIBLE INVESTMENTS
MASSACHUSETTS FUND: "The Fund invests in a portfolio of high-quality
tax-exempt securities maturing in 13 months or less."
SUCCESSOR MASSACHUSETTS FUND: "The Fund invests in a portfolio of
high-quality tax-exempt securities maturing in 397 days or less."
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
MASSACHUSETTS FUND: The Fund presently has no policy.
SUCCESSOR MASSACHUSETTS FUND: "The Fund may invest its assets in securities
of other investment companies, including the securities of affiliated money
market funds, as an efficient means of carrying out its investment policies and
managing uninvested cash."
INVESTING FOR CONTROL
MASSACHUSETTS FUND: "The Fund will not invest in securities of a company
for the purpose of exercising control or management."
SUCCESSOR MASSACHUSETTS FUND: The Fund is not subject to a comparable
restriction.
INVESTING IN OPTIONS
MASSACHUSETTS FUND: "The Fund will not invest in puts, calls, straddles,
spreads, or any combination of them."
SUCCESSOR MASSACHUSETTS FUND: The Fund is not subject to a comparable
restriction.
STATE UNDERTAKINGS
MASSACHUSETTS FUND: "The Fund has no present intent to borrow money or
pledge securities in excess of 5% of the value of its net assets during the
coming fiscal year."
SUCCESSOR MASSACHUSETTS FUND: The Fund is not subject to a comparable
undertaking.
<PAGE>
APPENDIX II-I
Set forth below is a comparison of the investment policies and restrictions of
the Michigan Fund and the Successor Michigan Fund:
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
FUNDAMENTAL INVESTMENT OBJECTIVE
MICHIGAN FUND: "The Fund's investment objective is to provide current
income exempt from federal regular income tax and the personal income tax
imposed by the State of Michigan consistent with stability of principal and
liquidity."
SUCCESSOR MICHIGAN FUND: The Successor Fund is subject to an identical
fundamental investment objective.
FUNDAMENTAL INVESTMENT POLICY
MICHIGAN FUND: "The Fund will invest so that at least 80% of its annual
interest income will be exempt from federal regular income tax and Michigan
state income tax and
intangibles tax."
SUCCESSOR MICHIGAN FUND: The Successor Fund is subject to an identical
fundamental investment policy.
CONCENTRATION OF INVESTMENTS
MICHIGAN FUND: "The Fund will not invest 25% or more of the value of its total
assets in any one industry, or in industrial development bonds or other
securities the interest upon which is paid from revenues of similar types of
projects, except that the Fund may invest 25% or more of the value of its total
assets in cash, cash items, or 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."
SUCCESSOR MICHIGAN FUND: "The Fund will not make investments that will result in
the concentration of its investments in the securities of issuers primarily
engaged in the same industry. Government securities, municipal securities and
bank instruments will not be deemed to constitute an industry. To conform to the
current view of the SEC staff that only domestic bank instruments may be
excluded from industry concentration limitations, as a matter of non-fundamental
policy, the Fund will not exclude foreign bank instruments from industry
concentration limitation tests so long as the policy of the SEC remains in
effect. In addition, investments in certain industrial development bonds funded
by activities in a single industry will be deemed to constitute investment in an
industry, except when held for temporary defensive purposes. The investment of
more than 25% of the value of the Fund's total assets in any one industry will
constitute `concentration.'"
INVESTMENTS IN REAL ESTATE
MICHIGAN FUND: "The Fund will not purchase or sell real estate, including
limited partnership interests, although it may invest in securities of issuers
whose business involves the purchase or sale of real estate or in securities
secured by real estate or interests in real estate."
SUCCESSOR MICHIGAN FUND: "The Fund may not purchase or sell real estate,
provided that this restriction does not prevent the Fund from investing in
issuers which invest, deal, or otherwise engage in transactions in real estate
or interests therein, or investing in securities that are secured by real estate
or interests therein. The Fund may exercise its rights under agreements relating
to such securities, including the right to enforce security interests and to
hold real estate acquired by reason of such enforcement until that real estate
can be liquidated in an orderly manner."
<PAGE>
UNDERWRITING SECURITIES
MICHIGAN FUND: "The Fund will not underwrite any issue of securities,
except as it may be deemed to be an underwriter under the Securities Act of 1933
in connection with the sale of securities in accordance with its investment
objective, policies, and limitations."
SUCCESSOR MICHIGAN FUND: "The Fund may not underwrite the securities of other
issuers, except that the Fund may engage in transactions involving the
acquisition, disposition or resale of its portfolio securities, under
circumstances where it may be considered to be an underwriter under the
Securities Act of 1933."
INVESTING IN COMMODITIES
MICHIGAN FUND: "The Fund will not purchase or sell commodities, commodity
contracts, or commodity futures contracts."
SUCCESSOR MICHIGAN FUND: "The Fund may not purchase or sell physical
commodities, provided that the Fund may purchase securities of companies that
deal in commodities."
ISSUING SENIOR SECURITIES AND BORROWING MONEY
MICHIGAN FUND: "The Fund will not issue senior securities except that the Fund
may borrow money in amounts up to one-third of the value of its total assets,
including the amounts borrowed. The Fund will not borrow money for investment
leverage, but rather as a temporary, extraordinary, or emergency measure or to
facilitate management of the portfolio by enabling the Fund to meet redemption
requests when the liquidation of portfolio securities is deemed to be
inconvenient or disadvantageous. The Fund will not purchase any securities while
borrowings in excess of 5% of the value of its total assets are outstanding."
SUCCESSOR MICHIGAN FUND: "The Fund may borrow money, directly or
indirectly, and issue senior securities to the maximum extent permitted under
the 1940 Act."
LENDING CASH OR SECURITIES
MICHIGAN FUND: "The Fund will not lend any of its assets, except that it
may purchase or hold portfolio securities permitted by its investment objective,
policies, and limitations or Declaration of Trust."
SUCCESSOR MICHIGAN FUND: "The Fund may not make loans, provided that this
restriction does not prevent the Fund from purchasing debt obligations, entering
into repurchase agreements, lending its assets to broker/dealers or
institutional investors and investing in loans, including assignments and
participation interests."
PLEDGING ASSETS
MICHIGAN FUND: "The Fund will not mortgage, pledge, or hypothecate any
assets except as necessary to secure permitted borrowings."
SUCCESSOR MICHIGAN FUND: The Successor Fund is subject to a NON-fundamental
investment limitation pertaining to pledging assets that provides: "The Fund
will not mortgage, pledge or hypothecate any of its assets, provided that this
shall not apply to the transfer of securities in connection with any permissible
borrowing or to collateral arrangements in connection with permissible
activities."
<PAGE>
SELLING SHORT AND BUYING ON MARGIN
MICHIGAN FUND: "The Fund will not sell any securities short or purchase any
securities on margin but may obtain such short-term credits as are necessary for
clearance of transactions."
SUCCESSOR MICHIGAN FUND: The Successor Fund is not subject to an investment
restriction regarding selling securities short. The Successor Fund is subject to
a non-fundamental investment restriction relating to margin transactions that
states: "The Fund will not purchase securities on margin, provided that the Fund
may obtain short-term credits necessary for the clearance of purchases and sales
of securities."
NON-FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
PERMISSIBLE INVESTMENTS
MICHIGAN FUND: "The Fund invests in a portfolio of high-quality tax-exempt
securities maturing in 13 months or less."
SUCCESSOR MICHIGAN FUND: "The Fund invests in a portfolio of high-quality
tax-exempt securities maturing in 397 days or less."
INVESTING IN ILLIQUID SECURITIES
MICHIGAN FUND: "The Fund will not invest more than 10% of the value of its net
assets in illiquid securities including certain restricted securities not
determined to be liquid under criteria established by the Board and repurchase
agreements providing for settlement in more than seven days after notice."
SUCCESSOR MICHIGAN FUND: "The Fund will not purchase securities for which there
is no readily available market, or enter into repurchase agreements or purchase
time deposits maturing in more than seven days, if immediately after and as a
result, the value of such securities would exceed, in the aggregate, 10% of the
Fund's net assets."
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
MICHIGAN FUND: The Fund presently has no policy.
SUCCESSOR MICHIGAN FUND: "The Fund may invest its assets in securities of
other investment companies, including the securities of affiliated money market
funds, as an efficient means of carrying out its investment policies and
managing uninvested cash."
INVESTING FOR CONTROL
MICHIGAN FUND: "The Fund will not invest in securities of a company for the
purpose of exercising control or management."
SUCCESSOR MICHIGAN FUND: The Fund is not subject to a comparable restriction.
INVESTING IN OPTIONS
MICHIGAN FUND: "The Fund will not invest in puts, calls, straddles,
spreads, or any combination of them."
SUCCESSOR MICHIGAN FUND: The Fund is not subject to a comparable restriction.
<PAGE>
STATE UNDERTAKINGS
MICHIGAN FUND: "The Fund has no present intent to borrow money or pledge
securities in excess of 5% of the value of its net assets during the coming
fiscal year."
SUCCESSOR MICHIGAN FUND: The Fund is not subject to a comparable undertaking.
<PAGE>
APPENDIX II-J
Set forth below is a comparison of the investment policies and restrictions of
the Minnesota Fund and the Successor Minnesota Fund:
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
FUNDAMENTAL INVESTMENT OBJECTIVE
MINNESOTA FUND: "The Fund's investment objective is to provide current
income which is exempt from federal regular income tax and the regular personal
income tax imposed by the State of Minnesota consistent with stability of
principal."
SUCCESSOR MINNESOTA FUND: The Successor Fund is subject to an identical
fundamental investment objective.
FUNDAMENTAL INVESTMENT POLICIES
MINNESOTA FUND: "The Fund invests its assets so that at least 80% of its annual
interest income is exempt from federal regular income tax and Minnesota regular
personal income tax ("exempt interest dividends). The Fund invests its assets so
that at least 95% of the exempt interest dividends that the Fund pays to its
shareholders will derive from interest income from Minnesota municipal
obligations."
SUCCESSOR MINNESOTA FUND: The Successor Fund is subject to an identical
fundamental investment policies.
CONCENTRATION OF INVESTMENTS
MINNESOTA FUND: "The Fund will not purchase securities if, as a result of such
purchase, 25% or more of the value of its total assets would be invested in any
one industry or in industrial development bonds or other securities, the
interest upon which is paid from revenues of similar types of projects. However,
the Fund may invest as temporary investments more than 25% of the value of its
assets in cash or cash items (including instruments issued by a U.S. branch of a
domestic bank or savings and loan having capital, surplus, and undivided profits
in excess of $100,000,000 at the time of investment), securities issued or
guaranteed by the U.S. government, its agencies, or instrumentalities, or
instruments secured by these money market instruments, such as repurchase
agreements."
SUCCESSOR MINNESOTA FUND: "The Fund will not make investments that will result
in the concentration of its investments in the securities of issuers primarily
engaged in the same industry. Government securities, municipal securities and
bank instruments will not be deemed to constitute an industry. To conform to the
current view of the SEC staff that only domestic bank instruments may be
excluded from industry concentration limitations, as a matter of non-fundamental
policy, the Fund will not exclude foreign bank instruments from industry
concentration limitation tests so long as the policy of the SEC remains in
effect. In addition, investments in certain industrial development bonds funded
by activities in a single industry will be deemed to constitute investment in an
industry, except when held for temporary defensive purposes. The investment of
more than 25% of the value of the Fund's total assets in any one industry will
constitute `concentration.'"
INVESTMENTS IN REAL ESTATE
MINNESOTA FUND: "The Fund will not purchase or sell real estate or real estate
limited partnerships, although it may invest in securities of issuers whose
business involves the purchase or sale of real estate or in securities which are
secured by real estate or interests in real estate."
SUCCESSOR MINNESOTA FUND: "The Fund may not purchase or sell real estate,
provided that this restriction does not prevent the Fund from investing in
issuers which invest, deal, or otherwise engage in transactions in real estate
or interests therein, or investing in securities that are secured by real estate
or interests therein. The Fund may exercise its rights under agreements relating
to such securities, including the right to enforce security interests and to
hold real estate acquired by reason of such enforcement until that real estate
can be liquidated in an orderly manner."
<PAGE>
UNDERWRITING SECURITIES
MINNESOTA FUND: "The Fund will not underwrite any issue of securities,
except as it may be deemed to be an underwriter under the Securities Act of 1933
in connection with the sale of securities in accordance with its investment
objective, policies, and limitations."
SUCCESSOR MINNESOTA FUND: "The Fund may not underwrite the securities of other
issuers, except that the Fund may engage in transactions involving the
acquisition, disposition or resale of its portfolio securities, under
circumstances where it may be considered to be an underwriter under the
Securities Act of 1933."
INVESTING IN COMMODITIES
MINNESOTA FUND: "The Fund will not purchase or sell commodities, commodity
contracts, or commodity futures contracts."
SUCCESSOR MINNESOTA FUND: "The Fund may not purchase or sell physical
commodities, provided that the Fund may purchase securities of companies that
deal in commodities."
ISSUING SENIOR SECURITIES AND BORROWING MONEY
MINNESOTA FUND: "The Fund will not issue senior securities except that the Fund
may borrow money directly or through reverse repurchase agreements in amounts up
to one-third of the value of its total assets, including the amounts borrowed.
The Fund will not borrow money or engage in reverse repurchase agreements for
investment leverage, but rather as a temporary, extraordinary, or emergency
measure or to facilitate management of the portfolio by enabling the Fund to
meet redemption requests when the liquidation of portfolio securities is deemed
to be inconvenient or disadvantageous. The Fund will not purchase any securities
while borrowings in excess of 5% of its total assets are outstanding. During the
period any reverse repurchase agreements are outstanding, the Fund will restrict
the purchase of portfolio securities to money market instruments maturing on or
before the expiration date of the reverse repurchase agreements, but only to the
extent necessary to assure completion of the reverse repurchase agreements."
SUCCESSOR MINNESOTA FUND: "The Fund may borrow money, directly or
indirectly, and issue senior securities to the maximum extent permitted under
the 1940 Act."
LENDING CASH OR SECURITIES
MINNESOTA FUND: "The Fund will not lend any of its assets except that it may
acquire publicly or nonpublicly issued Minnesota municipal securities or
temporary investments or enter into repurchase agreements, in accordance with
its investment objective, policies, limitations, or its Declaration of Trust."
SUCCESSOR MINNESOTA FUND: "The Fund may not make loans, provided that this
restriction does not prevent the Fund from purchasing debt obligations, entering
into repurchase agreements, lending its assets to broker/dealers or
institutional investors and investing in loans, including assignments and
participation interests."
PLEDGING ASSETS
MINNESOTA FUND: "The Fund will not mortgage, pledge, or hypothecate any
assets except to secure permitted borrowings. In those cases, it may pledge
assets having a market value not exceeding the lesser of the dollar amounts
borrowed or 15% of the value of its total assets at the time of the pledge."
SUCCESSOR MINNESOTA FUND: The Successor Fund is subject to a NON-fundamental
investment limitation pertaining to pledging assets that provides: "The Fund
will not mortgage, pledge or hypothecate any of its assets, provided that this
shall not apply to the transfer of securities in connection with any permissible
borrowing or to collateral arrangements in connection with permissible
activities."
<PAGE>
SELLING SHORT AND BUYING ON MARGIN
MINNESOTA FUND: "The Fund will not sell any securities short or purchase
any securities on margin but may obtain such short-term credits as are necessary
for the clearance of transactions."
SUCCESSOR MINNESOTA FUND: The Successor Fund is not subject to an investment
restriction regarding selling securities short. The Successor Fund is subject to
a non-fundamental investment restriction relating to margin transactions that
states: "The Fund will not purchase securities on margin, provided that the Fund
may obtain short-term credits necessary for the clearance of purchases and sales
of securities."
INVESTING IN RESTRICTED SECURITIES
MINNESOTA FUND: "The Fund will not invest more than 10% of the value of its net
assets in securities subject to restrictions on resale under federal securities
law, except for certain restricted securities which meet the criteria for
liquidity established by the Trustees."
SUCCESSOR MINNESOTA FUND: The Fund is subject to a non-fundamental investment
restriction regarding investing in restricted securities that states: "The Fund
may invest in restricted securities. Restricted securities are any securities in
which the Fund may invest pursuant to its investment objective and policies but
which are subject to restrictions on resale under federal securities law. Under
criteria established by the Trustees, certain restricted securities are
determined to be liquid. To the extent that restricted securities are not
determined to be liquid the Fund will limit their purchase, together with other
illiquid securities, to 10% of its net assets."
NON-FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
PERMISSIBLE INVESTMENTS
MINNESOTA FUND: "The Fund invests in a portfolio of high-quality tax-exempt
securities maturing in 13 months or less."
SUCCESSOR MINNESOTA FUND: "The Fund invests in a portfolio of high-quality
tax-exempt securities maturing in 397 days or less."
INVESTING IN ILLIQUID SECURITIES
MINNESOTA FUND: "The Fund will not invest more than 10% of its net assets in
illiquid securities including certain restricted securities not determined to be
liquid under criteria established by the Board and repurchase agreements
providing for settlement in more than seven days after notice."
SUCCESSOR MINNESOTA FUND: "The Fund will not purchase securities for which there
is no readily available market, or enter into repurchase agreements or purchase
time deposits maturing in more than seven days, if immediately after and as a
result, the value of such securities would exceed, in the aggregate, 10% of the
Fund's net assets."
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
MINNESOTA FUND: The Fund presently has no policy.
SUCCESSOR MINNESOTA FUND: "The Fund may invest its assets in securities of
other investment companies, including the securities of affiliated money market
funds, as an efficient means of carrying out its investment policies and
managing its uninvested cash."
<PAGE>
INVESTING FOR CONTROL
MINNESOTA FUND: "The Fund will not invest in securities of a company for
the purpose of exercising control or management."
SUCCESSOR MINNESOTA FUND: The Fund is not subject to a comparable
restriction.
INVESTING IN OPTIONS
MINNESOTA FUND: "The Fund will not invest in puts, calls, straddles,
spreads, or any combination of them."
SUCCESSOR MINNESOTA FUND: The Fund is not subject to a comparable
restriction.
STATE UNDERTAKINGS
MINNESOTA FUND: "The Fund has no present intent to borrow money or pledge
securities in excess of 5% of the value of its net assets during the coming
fiscal year."
SUCCESSOR MINNESOTA FUND: The Fund is not subject to a comparable
undertaking.
<PAGE>
APPENDIX II-K
Set forth below is a comparison of the investment policies and restrictions of
the New Jersey Fund and the Successor New Jersey Fund:
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
FUNDAMENTAL INVESTMENT OBJECTIVE
NEW JERSEY FUND: "The Fund's investment objective is to provide current
income which is exempt from federal regular income tax and New Jersey state
income tax imposed upon non-corporate taxpayers consistent with stability of
principal."
SUCCESSOR NEW JERSEY FUND: The Successor Fund is subject to an identical
fundamental investment objective.
FUNDAMENTAL INVESTMENT POLICY
NEW JERSEY FUND: "The Fund invests its assets so that at least 80% of its
annual interest income is exempt from federal regular income tax and New Jersey
state income tax imposed upon non-corporate taxpayers."
SUCCESSOR NEW JERSEY FUND: The Successor Fund is subject to an identical
fundamental investment policy.
CONCENTRATION OF INVESTMENTS
NEW JERSEY FUND: "The Fund will not purchase securities if, as a result of such
purchase, 25% or more of the value of its total assets would be invested in any
one industry or in industrial development bonds or other securities, the
interest upon which is paid from revenues of similar types of projects. However,
the Fund may invest as temporary investments more than 25% of the value of its
assets in cash or cash items (including instruments issued by a U.S. branch of a
domestic bank or savings and loan having capital, surplus, and undivided profits
in excess of $100,000,000 at the time of investment), securities issued or
guaranteed by the U.S. government, its agencies, or instrumentalities, or
instruments secured by these money market instruments, such as repurchase
agreements."
SUCCESSOR NEW JERSEY FUND: "The Fund will not make investments that will result
in the concentration of its investments in the securities of issuers primarily
engaged in the same industry. Government securities, municipal securities and
bank instruments will not be deemed to constitute an industry. To conform to the
current view of the SEC staff that only domestic bank instruments may be
excluded from industry concentration limitations, as a matter of non-fundamental
policy, the Fund will not exclude foreign bank instruments from industry
concentration limitation tests so long as the policy of the SEC remains in
effect. In addition, investments in certain industrial development bonds funded
by activities in a single industry will be deemed to constitute investment in an
industry, except when held for temporary defensive purposes. The investment of
more than 25% of the value of the Fund's total assets in any one industry will
constitute `concentration.'"
INVESTMENTS IN REAL ESTATE
NEW JERSEY FUND: "The Fund will not purchase or sell real estate or real estate
limited partnerships, although it may invest in securities of issuers whose
business involves the purchase or sale of real estate or in securities which are
secured by real estate or interests in real estate."
SUCCESSOR NEW JERSEY FUND: "The Fund may not purchase or sell real estate,
provided that this restriction does not prevent the Fund from investing in
issuers which invest, deal, or otherwise engage in transactions in real estate
or interests therein, or investing in securities that are secured by real estate
or interests therein. The Fund may exercise its rights under agreements relating
to such securities, including the right to enforce security interests and to
hold real estate acquired by reason of such enforcement until that real estate
can be liquidated in an orderly manner."
<PAGE>
UNDERWRITING SECURITIES
NEW JERSEY FUND: "The Fund will not underwrite any issue of securities,
except as it may be deemed to be an underwriter under the Securities Act of 1933
in connection with the sale of securities in accordance with its investment
objective, policies, and limitations."
SUCCESSOR NEW JERSEY FUND: "The Fund may not underwrite the securities of other
issuers, except that the Fund may engage in transactions involving the
acquisition, disposition or resale of its portfolio securities, under
circumstances where it may be considered to be an underwriter under the
Securities Act of 1933."
INVESTING IN COMMODITIES
NEW JERSEY FUND: "The Fund will not purchase or sell commodities, commodity
contracts or commodity futures."
SUCCESSOR NEW JERSEY FUND: "The Fund may not purchase or sell physical
commodities, provided that the Fund may purchase securities of companies that
deal in commodities."
ISSUING SENIOR SECURITIES AND BORROWING MONEY
NEW JERSEY FUND: "The Fund will not issue senior securities except that the Fund
may borrow money directly or through reverse repurchase agreements in amounts up
to one-third of the value of its total assets, including the amounts borrowed.
The Fund will not borrow money or engage in reverse repurchase agreements for
investment leverage, but rather as a temporary, extraordinary, or emergency
measure or to facilitate management of the portfolio by enabling the Fund to
meet redemption requests when the liquidation of portfolio securities is deemed
to be inconvenient or disadvantageous. The Fund will not purchase any securities
while borrowings in excess of 5% of its total assets are outstanding."
SUCCESSOR NEW JERSEY FUND: "The Fund may borrow money, directly or
indirectly, and issue senior securities to the maximum extent permitted under
the 1940 Act."
LENDING CASH OR SECURITIES
NEW JERSEY FUND: "The Fund will not lend any of its assets except that it may
acquire publicly or nonpublicly issued New Jersey municipal securities or
temporary investments or enter into repurchase agreements, in accordance with
its investment objective, policies, limitations, and its Declaration of Trust."
SUCCESSOR NEW JERSEY FUND: "The Fund may not make loans, provided that this
restriction does not prevent the Fund from purchasing debt obligations, entering
into repurchase agreements, lending its assets to broker/dealers or
institutional investors and investing in loans, including assignments and
participation interests."
PLEDGING ASSETS
NEW JERSEY FUND: "The Fund will not mortgage, pledge, or hypothecate any
assets except to secure permitted borrowings. In those cases, it may pledge
assets having a market value not exceeding the lesser of the dollar amounts
borrowed or 15% of the value of its total assets at the time of the pledge."
SUCCESSOR NEW JERSEY FUND: The Successor Fund is subject to a NON-fundamental
investment limitation pertaining to pledging assets that provides: "The Fund
will not mortgage, pledge or hypothecate any of its assets, provided that this
shall not apply to the transfer of securities in connection with any permissible
borrowing or to collateral arrangements in connection with permissible
activities."
<PAGE>
SELLING SHORT AND BUYING ON MARGIN
NEW JERSEY FUND: "The Fund will not sell any securities short or purchase
any securities on margin but may obtain such short-term credits as may be
necessary for clearance of transactions."
SUCCESSOR NEW JERSEY FUND: The Successor Fund is not subject to an investment
restriction regarding selling securities short. The Successor Fund is subject to
a non-fundamental investment restriction relating to margin transactions that
states: "The Fund will not purchase securities on margin, provided that the Fund
may obtain short-term credits necessary for the clearance of purchases and sales
of securities."
INVESTING IN RESTRICTED SECURITIES
NEW JERSEY FUND: "The Fund will not invest more than 10% of its net assets in
securities subject to restrictions on resale under the Securities Act of 1933,
except for certain restricted securities which meet the criteria for liquidity
as established by the Trustees."
SUCCESSOR NEW JERSEY FUND: The Fund is subject to a non-fundamental investment
restriction regarding investing in restricted securities that states: "The Fund
may invest in restricted securities. Restricted securities are any securities in
which the Fund may invest pursuant to its investment objective and policies but
which are subject to restrictions on resale under federal securities law. Under
criteria established by the Trustees, certain restricted securities are
determined to be liquid. To the extent that restricted securities are not
determined to be liquid the Fund will limit their purchase, together with other
illiquid securities, to 10% of its net assets."
NON-FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
PERMISSIBLE INVESTMENTS
NEW JERSEY FUND: "The Fund invests in a portfolio of high-quality
tax-exempt securities maturing in 13 months or less."
SUCCESSOR NEW JERSEY FUND: "The Fund invests in a portfolio of high-quality
tax-exempt securities maturing in 397 days or less."
INVESTING IN ILLIQUID SECURITIES
NEW JERSEY FUND: "The Fund will not invest more than 10% of its net assets in
illiquid securities including certain restricted securities not determined to be
liquid under criteria established by the Board and repurchase agreements
providing for settlement in more than seven days notice."
SUCCESSOR NEW JERSEY FUND: "The Fund will not purchase securities for which
there is no readily available market, or enter into repurchase agreements or
purchase time deposits maturing in more than seven days, if immediately after
and as a result, the value of such securities would exceed, in the aggregate,
10% of the Fund's net assets."
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
NEW JERSEY FUND: The Fund presently has no policy.
SUCCESSOR NEW JERSEY FUND: "The Fund may invest its assets in securities of
other investment companies, including the securities of affiliated money market
funds, as an efficient means of carrying out its investment policies and
managing its uninvested cash."
<PAGE>
INVESTING FOR CONTROL
NEW JERSEY FUND: "The Fund will not invest in securities of a company for
the purpose of exercising control or management."
SUCCESSOR NEW JERSEY FUND: The Fund is not subject to a comparable
restriction.
INVESTING IN OPTIONS
NEW JERSEY FUND: "The Fund will not invest in puts, calls, straddles,
spreads, or any combination of them."
SUCCESSOR NEW JERSEY FUND: The Fund is not subject to a comparable
restriction.
STATE UNDERTAKINGS
NEW JERSEY FUND: "The Fund has no present intent to borrow money or pledge
securities in excess of 5% of the value of its net assets during the coming
fiscal year."
SUCCESSOR NEW JERSEY FUND: The Fund is not subject to a comparable
undertaking.
<PAGE>
APPENDIX II-L
Set forth below is a comparison of the investment policies and restrictions of
the New York Fund and the Successor New York Fund:
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
FUNDAMENTAL INVESTMENT OBJECTIVE
NEW YORK FUND: "The Fund's investment objective is to provide current income
which is exempt from federal regular income tax and the personal income taxes
imposed by New York State and New York municipalities consistent with stability
of principal."
SUCCESSOR NEW YORK FUND: The Successor Fund is subject to an identical
fundamental investment objective.
FUNDAMENTAL INVESTMENT POLICY
NEW YORK FUND: "The Fund will invest so that at least 80% of its annual interest
income is exempt from federal regular income tax and the personal income taxes
imposed by New York State and New York municipalities or so that at least 80% of
its net assets is invested in obligations, the interest income from which is
exempt from federal regular income tax and the personal income taxes imposed by
New York State and New York municipalities."
SUCCESSOR NEW YORK FUND: The Successor Fund is subject to an identical
fundamental investment policy.
DIVERSIFICATION
NEW YORK FUND: "With respect to securities comprising 75% of its assets,
the Fund will not invest more than 10% of its total assets in the securities of
any one issuer.
Under this limitation, each governmental subdivision, including states,
territories, possessions of the United States, or their political subdivisions,
agencies, authorities, instrumentalities, or similar entities, will be
considered a separate issuer if its assets and revenues are separate from those
of the government body creating it and the security is backed only by its own
assets and revenues.
Industrial development bonds backed only by the assets and revenues of a
nongovernmental user are considered to be issued solely by that user. If in the
case of an industrial development bond or government-issued security, a
governmental or other entity guarantees the security, such guarantee would be
considered a separate security issued by the guarantor, as well as the other
issuer, subject to limited exclusions allowed by the Investment Company Act of
1940."
SUCCESSOR NEW YORK FUND: "With respect to securities comprising 75% of the value
of its total assets, the Fund will not purchase securities of any one issuer
(other than cash; cash items; securities issued or guaranteed by the government
of the United States or its agencies or instrumentalities and repurchase
agreements collateralized by such U.S. government securities; and securities of
other investment companies) if, as a result, more than 5% of the value of its
total assets would be invested in securities of that issuer, or the Fund would
own more than 10% of the outstanding voting securities of that issuer."
<PAGE>
INVESTMENTS IN REAL ESTATE
NEW YORK FUND: "The Fund will not purchase or sell real estate, although it
may invest in New York municipal securities secured by real estate or interests
in real estate."
SUCCESSOR NEW YORK FUND: "The Fund may not purchase or sell real estate,
provided that this restriction does not prevent the Fund from investing in
issuers which invest, deal, or otherwise engage in transactions in real estate
or interests therein, or investing in securities that are secured by real estate
or interests therein. The Fund may exercise its rights under agreements relating
to such securities, including the right to enforce security interests and to
hold real estate acquired by reason of such enforcement until that real estate
can be liquidated in an orderly manner."
UNDERWRITING SECURITIES
NEW YORK FUND: "The Fund will not underwrite any issue of securities,
except as it may be deemed to be an underwriter under the Securities Act of 1933
in connection with the sale of securities in accordance with its investment
objective, policies, and limitations."
SUCCESSOR NEW YORK FUND: "The Fund may not underwrite the securities of other
issuers, except that the Fund may engage in transactions involving the
acquisition, disposition or resale of its portfolio securities, under
circumstances where it may be considered to be an underwriter under the
Securities Act of 1933."
INVESTING IN COMMODITIES
NEW YORK FUND: "The Fund will not purchase or sell commodities or commodity
contracts."
SUCCESSOR NEW YORK FUND: "The Fund may not purchase or sell physical
commodities, provided that the Fund may purchase securities of companies that
deal in commodities."
ISSUING SENIOR SECURITIES AND BORROWING MONEY
NEW YORK FUND: "The Fund will not issue senior securities, except as permitted
by the investment objective and policies and limitations of the Fund. 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 its total
assets or in an amount up to one-third of the value of its total assets,
including the amount borrowed, in order to meet redemption requests without
immediately selling portfolio instruments. 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 is deemed to 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
instruments while any borrowings are outstanding."
SUCCESSOR NEW YORK FUND: "The Fund may borrow money, directly or
indirectly, and issue senior securities to the maximum extent permitted under
the 1940 Act."
LENDING CASH OR SECURITIES
NEW YORK FUND: "The Fund will not make loans except that it may acquire
publicly or nonpublicly issued New York municipal securities, in accordance with
its investment objective, policies, and limitations, and the Trust's Declaration
of Trust."
SUCCESSOR NEW YORK FUND: The Fund may not make loans, provided that this
restriction does not prevent the Fund from purchasing debt obligations, entering
into repurchase agreements, lending its assets to broker/dealers or
institutional investors and investing in loans, including assignments and
participation interests."
<PAGE>
PLEDGING ASSETS
NEW YORK FUND: "The Fund will not mortgage, pledge, or hypothecate any
assets except to secure permitted borrowings. In those cases, it may pledge
assets having a market value not exceeding 10% of the value of its total assets
at the time of the pledge."
SUCCESSOR NEW YORK FUND: The Successor Fund is subject to a NON-fundamental
investment limitation pertaining to pledging assets that provides: "The Fund
will not mortgage, pledge or hypothecate any of its assets, provided that this
shall not apply to the transfer of securities in connection with any permissible
borrowing or to collateral arrangements in connection with permissible
activities."
SELLING SHORT AND BUYING ON MARGIN
NEW YORK FUND: "The Fund will not sell any securities short or purchase any
securities on margin but may obtain such short-term credits as may be necessary
for clearance of transactions."
SUCCESSOR NEW YORK FUND: The Successor Fund is not subject to an investment
restriction regarding selling securities short. The Successor Fund is subject to
a non-fundamental investment restriction relating to margin transactions that
states: "The Fund will not purchase securities on margin, provided that the Fund
may obtain short-term credits necessary for the clearance of purchases and sales
of securities."
INVESTING IN ILLIQUID SECURITIES
NEW YORK FUND: "The Fund will not invest more than 10% of the value of its
total assets in illiquid securities, including repurchase agreements maturing in
more than seven days."
SUCCESSOR NEW YORK FUND: The Successor Fund is subject to a NON-fundamental
investment limitation pertaining to investing in illiquid securities that
provides: "The Fund will not purchase securities for which there is no readily
available market, or enter into repurchase agreements or purchase time deposits
maturing in more than seven days, if immediately after and as a result, the
value of such securities would exceed, in the aggregate, 10% of the Fund's net
assets."
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
NEW YORK FUND: The Fund will not invest in securities issued by any other
investment company or investment trust.
SUCCESSOR NEW YORK FUND: The Successor Fund is subject to a NON-fundamental
policy pertaining to investing in securities of other investment companies that
provides: "The Fund may invest its assets in securities of other investment
companies, including the securities of affiliated money market funds, as an
efficient means of carrying out its investment policies and managing its
uninvested cash."
INVESTING IN OIL, GAS AND MINERALS
NEW YORK FUND: "The Fund will not purchase or sell oil, or gas, or other
mineral exploration or development programs.
SUCCESSOR NEW YORK FUND: The Successor Fund is not subject to a comparable
restriction.
<PAGE>
INVESTING IN THE SECURITIES OF NEW ISSUERS
NEW YORK FUND: "The Fund will not invest more than 5% of the value of its total
assets in securities of issuers (or in the alternative, guarantors, where
applicable) which have records of less than three years of continuous
operations, including the operation of any predecessor."
SUCCESSOR NEW YORK FUND: The Successor Fund is not subject to a comparable
restriction.
INVESTING IN ISSUERS WHOSE SECURITIES ARE OWNED BY OFFICERS AND TRUSTEES
NEW YORK FUND: "The Fund will not purchase or retain the securities of any
issuer if the officers and Trustees or its investment adviser, owning
individually more than 1/2 of 1% of the issuer's securities together own more
than 5% of the issuer's securities."
SUCCESSOR NEW YORK FUND: The Successor Fund is not subject to a comparable
restriction.
PURCHASING VOTING SECURITIES
NEW YORK FUND: "The Fund will not acquire the voting securities of any
issuer, except as part of a merger, consolidation, reorganization, or
acquisition of assets."
SUCCESSOR NEW YORK FUND: The Successor Fund is not subject to a comparable
restriction.
INVESTING IN OPTIONS
NEW YORK FUND: "The Fund will not purchase or sell puts, calls, straddles,
spreads, or any combination of them, except that the Fund may purchase municipal
securities accompanied by agreements of sellers to repurchase them at the Fund's
option."
SUCCESSOR NEW YORK FUND: The Successor Fund is not subject to a comparable
restriction.
NON-FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
PERMISSIBLE INVESTMENTS
NEW YORK FUND: "The Fund invests in a portfolio of high-quality tax-exempt
securities maturing in 13 months or less."
SUCCESSOR NEW YORK FUND: "The Fund invests in a portfolio of high-quality
tax-exempt securities maturing in 397 days or less."
PURCHASING PUT OPTIONS
NEW YORK FUND: "The Fund will not purchase put options on securities unless
the securities are held in the Fund's portfolio and not more than 5% of its
total assets would be invested in premiums on open put options."
SUCCESSOR NEW YORK FUND: The Fund is not subject to a comparable restriction.
<PAGE>
WRITING CALL OPTIONS
NEW YORK FUND: "The Fund will not write call options on securities unless the
securities are held in the Fund's portfolio or unless the Fund is entitled to
them in deliverable form without further payment or after segregating cash in
the amount of any further payment."
SUCCESSOR NEW YORK FUND: The Fund is not subject to a comparable restriction.
STATE UNDERTAKINGS
NEW YORK FUND: "The Fund has no present intent to borrow money or pledge
securities in excess of 5% of the value of its net assets during the coming
fiscal year."
SUCCESSOR NEW YORK FUND: The Fund is not subject to a comparable undertaking.
<PAGE>
APPENDIX II-M
Set forth below is a comparison of the investment policies and restrictions of
the North Carolina Fund and the Successor North Carolina Fund:
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
FUNDAMENTAL INVESTMENT OBJECTIVE
NORTH CAROLINA FUND: "The Fund's investment objective is to provide current
income exempt from federal regular income tax and the income tax imposed by the
State of North Carolina consistent with stability of principal."
SUCCESSOR NORTH CAROLINA FUND: The Successor Fund is subject to an
identical fundamental investment objective.
FUNDAMENTAL INVESTMENT POLICY
NORTH CAROLINA FUND: "At least 80% of the Fund's annual interest income will be
exempt from federal regular income tax and North Carolina state income tax or at
least 80% of its net assets will be invested in obligations, the interest income
from which is exempt from federal regular and North Carolina state income tax."
SUCCESSOR NORTH CAROLINA FUND: The Successor Fund is subject to an
identical fundamental investment policy.
CONCENTRATION OF INVESTMENTS
NORTH CAROLINA FUND: "The Fund will not purchase securities, if, as a result of
such purchase, 25% or more of the value of its total assets would be invested in
any one industry or in industrial development bonds or other securities, the
interest upon which is paid from revenues of similar types of projects. However,
the Fund may invest as temporary investments more than 25% of the value of its
assets in cash or cash items, securities issued or guaranteed by the U.S.
government, its agencies, or instrumentalities, or instruments secured by these
money market instruments, such as repurchase agreements."
SUCCESSOR NORTH CAROLINA FUND: "The Fund will not make investments that will
result in the concentration of its investments in the securities of issuers
primarily engaged in the same industry. Government securities, municipal
securities and bank instruments will not be deemed to constitute an industry. To
conform to the current view of the SEC staff that only domestic bank instruments
may be excluded from industry concentration limitations, as a matter of
non-fundamental policy, the Fund will not exclude foreign bank instruments from
industry concentration limitation tests so long as the policy of the SEC remains
in effect. In addition, investments in certain industrial development bonds
funded by activities in a single industry will be deemed to constitute
investment in an industry, except when held for temporary defensive purposes.
The investment of more than 25% of the value of the Fund's total assets in any
one industry will constitute `concentration.'"
INVESTMENTS IN REAL ESTATE
NORTH CAROLINA FUND: "The Fund will not purchase or sell real estate or real
estate limited partnerships, although it may invest in securities of issuers
whose business involves the purchase or sale of real estate or in securities
which are secured by real estate or interests in real estate."
SUCCESSOR NORTH CAROLINA FUND: "The Fund may not purchase or sell real estate,
provided that this restriction does not prevent the Fund from investing in
issuers which invest, deal, or otherwise engage in transactions in real estate
or interests therein, or investing in securities that are secured by real estate
or interests therein. The Fund may exercise its rights under agreements relating
to such securities, including the right to enforce security interests and to
hold real estate acquired by reason of such enforcement until that real estate
can be liquidated in an orderly manner."
<PAGE>
UNDERWRITING SECURITIES
NORTH CAROLINA FUND: The Fund will not underwrite any issue of securities,
except as it may be deemed to be an underwriter under the Securities Act of 1933
in connection with the sale of securities in accordance with its investment
objective, policies, and limitations."
SUCCESSOR NORTH CAROLINA FUND: "The Fund may not underwrite the securities of
other issuers, except that the Fund may engage in transactions involving the
acquisition, disposition or resale of its portfolio securities, under
circumstances where it may be considered to be an underwriter under the
Securities Act of 1933."
INVESTING IN COMMODITIES
NORTH CAROLINA FUND: "The Fund will not purchase or sell commodities,
commodity contracts, or commodity futures contracts."
SUCCESSOR NORTH CAROLINA FUND: "The Fund may not purchase or sell physical
commodities, provided that the Fund may purchase securities of companies that
deal in commodities."
ISSUING SENIOR SECURITIES AND BORROWING MONEY
NORTH CAROLINA FUND: "The Fund will not issue senior securities except that the
Fund may borrow money directly or through reverse repurchase agreements in
amounts up to one-third of the value of its net assets, including the amounts
borrowed. The Fund will not borrow money or engage in reverse repurchase
agreements for investment leverage, but rather as a temporary, extraordinary, or
emergency measure or to facilitate management of the portfolio by enabling the
Fund to meet redemption requests when the liquidation of portfolio securities is
deemed to be inconvenient or disadvantageous. The Fund will not purchase any
securities while borrowings in excess of 5% of its total assets are
outstanding."
SUCCESSOR NORTH CAROLINA FUND: "The Fund may borrow money, directly or
indirectly, and issue senior securities to the maximum extent permitted under
the 1940 Act."
LENDING CASH OR SECURITIES
NORTH CAROLINA FUND: "The Fund will not lend any of its assets except that it
may acquire publicly or nonpublicly issued North Carolina municipal securities
or temporary investments or enter into repurchase agreements in accordance with
its investment objective, policies, limitations, and its Declaration of Trust."
SUCCESSOR NORTH CAROLINA FUND: "The Fund may not make loans, provided that this
restriction does not prevent the Fund from purchasing debt obligations, entering
into repurchase agreements, lending its assets to broker/dealers or
institutional investors and investing in loans, including assignments and
participation interests."
PLEDGING ASSETS
NORTH CAROLINA FUND: "The Fund will not mortgage, pledge, or hypothecate
any assets except to secure permitted borrowings. In those cases, it may pledge
assets having a market value not exceeding the lesser of the dollar amounts
borrowed or 15% of the value of its total assets at the time of the pledge."
SUCCESSOR NORTH CAROLINA FUND: The Successor Fund is subject to a
NON-fundamental investment limitation pertaining to pledging assets that
provides: "The Fund will not mortgage, pledge or hypothecate any of its assets,
provided that this shall not apply to the transfer of securities in connection
with any permissible borrowing or to collateral arrangements in connection with
permissible activities."
<PAGE>
SELLING SHORT AND BUYING ON MARGIN
NORTH CAROLINA FUND: "The Fund will not sell any securities short or
purchase any securities on margin but may obtain such short-term credits as may
be necessary for clearance of transactions."
SUCCESSOR NORTH CAROLINA FUND: The Successor Fund is not subject to an
investment restriction regarding selling securities short. The Successor Fund is
subject to a non-fundamental investment restriction relating to margin
transactions that states: "The Fund will not purchase securities on margin,
provided that the Fund may obtain short-term credits necessary for the clearance
of purchases and sales of securities."
NON-FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
PERMISSIBLE INVESTMENTS
NORTH CAROLINA FUND: "The Fund invests in a portfolio of high-quality
tax-exempt securities maturing in 13 months or less."
SUCCESSOR NORTH CAROLINA FUND: "The Fund invests in a portfolio of
high-quality tax-exempt securities maturing in 397 days or less."
INVESTING IN ILLIQUID SECURITIES
NORTH CAROLINA FUND: The Fund will not invest more than 10% of the value of its
net assets in illiquid securities including certain restricted securities not
determined to be liquid under criteria established by the Board and repurchase
agreements providing for settlement in more than seven days notice."
SUCCESSOR NORTH CAROLINA FUND: "The Fund will not purchase securities for which
there is no readily available market, or enter into repurchase agreements or
purchase time deposits maturing in more than seven days, if immediately after
and as a result, the value of such securities would exceed, in the aggregate,
10% of the Fund's net assets."
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
NORTH CAROLINA FUND: The Fund presently has no policy.
SUCCESSOR NORTH CAROLINA FUND: "The Fund may invest its assets in
securities of other investment companies, including the securities of affiliated
money market funds, as an efficient means of carrying out its investment
policies and managing its uninvested cash."
INVESTING FOR CONTROL
NORTH CAROLINA FUND: "The Fund will not invest in securities of a company
for the purpose of exercising control or management."
SUCCESSOR NORTH CAROLINA FUND: The Fund is not subject to a comparable
restriction.
INVESTING IN OPTIONS
NORTH CAROLINA FUND: "The Fund will not invest in puts, calls, straddles,
spreads, or any combination of them."
SUCCESSOR NORTH CAROLINA FUND: The Fund is not subject to a comparable
restriction.
<PAGE>
STATE UNDERTAKINGS
NORTH CAROLINA FUND: "The Fund has no present intent to borrow money or
pledge securities in excess of 5% of the value of its net assets during the
coming fiscal year."
SUCCESSOR NORTH CAROLINA FUND: The Fund is not subject to a comparable
undertaking.
<PAGE>
APPENDIX II-N
Set forth below is a comparison of the investment policies and restrictions of
the Ohio Fund and the Successor Ohio Fund:
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
FUNDAMENTAL INVESTMENT OBJECTIVE
OHIO FUND: "The Fund's investment objective is to provide current income
which is exempt from federal regular income tax and the personal income taxes
imposed by the State of Ohio and Ohio municipalities consistent with stability
of principal."
SUCCESSOR OHIO FUND: The Successor Fund is subject to an identical
fundamental investment objective.
FUNDAMENTAL INVESTMENT POLICY
OHIO FUND: "The Fund invests its assets so that at least 80% of its annual
interest income is exempt from federal regular income tax and the personal
income taxes imposed by the State of Ohio and Ohio municipalities."
SUCCESSOR OHIO FUND: The Successor Fund is subject to an identical
fundamental investment policy.
CONCENTRATION OF INVESTMENTS
OHIO FUND: "The Fund will not purchase securities if, as a result of such
purchase, 25% or more of the value of its total assets would be invested in any
one industry or in industrial development bonds or other securities, the
interest upon which is paid from revenues of similar types of projects. However,
the Fund may invest as temporary investments more than 25% of the value of its
assets in cash or cash items (including instruments issued by a U.S. branch of a
domestic bank or savings and loan having capital, surplus, and undivided profits
in excess of $100,000,000 at the time of investment), securities issued or
guaranteed by the U.S. government, its agencies, or instrumentalities, or
instruments secured by these money market instruments, such as repurchase
agreements."
SUCCESSOR OHIO FUND: "The Fund will not make investments that will result in the
concentration of its investments in the securities of issuers primarily engaged
in the same industry. Government securities, municipal securities and bank
instruments will not be deemed to constitute an industry. To conform to the
current view of the SEC staff that only domestic bank instruments may be
excluded from industry concentration limitations, as a matter of non-fundamental
policy, the Fund will not exclude foreign bank instruments from industry
concentration limitation tests so long as the policy of the SEC remains in
effect. In addition, investments in certain industrial development bonds funded
by activities in a single industry will be deemed to constitute investment in an
industry, except when held for temporary defensive purposes. The investment of
more than 25% of the value of the Fund's total assets in any one industry will
constitute `concentration.'"
INVESTMENTS IN REAL ESTATE
OHIO FUND: "The Fund will not purchase or sell real estate or real estate
limited partnerships, although it may invest in securities of issuers whose
business involves the purchase or sale of real estate or in securities which are
secured by real estate or interests in real estate."
SUCCESSOR OHIO FUND: "The Fund may not purchase or sell real estate, provided
that this restriction does not prevent the Fund from investing in issuers which
invest, deal, or otherwise engage in transactions in real estate or interests
therein, or investing in securities that are secured by real estate or interests
therein. The Fund may exercise its rights under agreements relating to such
securities, including the right to enforce security interests and to hold real
estate acquired by reason of such enforcement until that real estate can be
liquidated in an orderly manner."
<PAGE>
UNDERWRITING SECURITIES
OHIO FUND: "The Fund will not underwrite any issue of securities, except as
it may be deemed to be an underwriter under the Securities Act of 1933 in
connection with the sale of securities in accordance with its investment
objective, policies, and limitations."
SUCCESSOR OHIO FUND: The Fund may not underwrite the securities of other
issuers, except that the Fund may engage in transactions involving the
acquisition, disposition or resale of its portfolio securities, under
circumstances where it may be considered to be an underwriter under the
Securities Act of 1933."
INVESTING IN COMMODITIES
OHIO FUND: "The Fund will not purchase or sell commodities, commodity
contracts, or commodity futures contracts."
SUCCESSOR OHIO FUND: "The Fund may not purchase or sell physical
commodities, provided that the Fund may purchase securities of companies that
deal in commodities."
ISSUING SENIOR SECURITIES AND BORROWING MONEY
OHIO FUND: "The Fund will not issue senior securities except that the Fund may
borrow money and engage in reverse repurchase agreements in amounts up to
one-third of the value of its total assets, including the amounts borrowed. The
Fund will not borrow money or engage in reverse repurchase agreements for
investment leverage, but rather as a temporary, extraordinary or emergency
measure or to facilitate management of the portfolio by enabling the Fund to
meet redemption requests when the liquidation of portfolio securities is deemed
to be inconvenient or disadvantageous. The Fund will not purchase any securities
while borrowings in excess of 5% of its total assets are outstanding. During the
period any reverse repurchase agreements are outstanding, the Fund will restrict
the purchase of portfolio securities to money market instruments maturing on or
before the expiration date of the reserve repurchase agreements, but only to the
extent necessary to assure completion of the reverse repurchase agreements."
SUCCESSOR OHIO FUND: "The Fund may borrow money, directly or indirectly,
and issue senior securities to the maximum extent permitted under the 1940 Act."
LENDING CASH OR SECURITIES
OHIO FUND: "The Fund will not lend any of its assets except that it may acquire
publicly or nonpublicly issued Ohio municipal securities or temporary
investments or enter into repurchase agreements, in accordance with its
investment objective, policies, limitations and its Declaration of Trust."
SUCCESSOR OHIO FUND: "The Fund may not make loans, provided that this
restriction does not prevent the Fund from purchasing debt obligations, entering
into repurchase agreements, lending its assets to broker/dealers or
institutional investors and investing in loans, including assignments and
participation interests."
PLEDGING ASSETS
OHIO FUND: "The Fund will not mortgage, pledge, or hypothecate any assets
except to secure permitted borrowings. In those cases, it may pledge assets
having a market value not exceeding the lesser of the dollar amounts borrowed or
15% of the value of its total assets at the time of the pledge."
SUCCESSOR OHIO FUND: The Successor Fund is subject to a NON-fundamental
investment limitation pertaining to pledging assets that provides: "The Fund
will not mortgage, pledge or hypothecate any of its assets, provided that this
shall not apply to the transfer of securities in connection with any permissible
borrowing or to collateral arrangements in connection with permissible
activities."
<PAGE>
SELLING SHORT AND BUYING ON MARGIN
OHIO FUND: "The Fund will not sell any securities short or purchase any
securities on margin but may obtain such short-term credits as are necessary for
the clearance of transactions."
SUCCESSOR OHIO FUND: The Successor Fund is not subject to an investment
restriction regarding selling securities short. The Successor Fund is subject to
a non-fundamental investment restriction relating to margin transactions that
states: "The Fund will not purchase securities on margin, provided that the Fund
may obtain short-term credits necessary for the clearance of purchases and sales
of securities."
NON-FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
PERMISSIBLE INVESTMENTS
OHIO FUND: "The Fund invests in a portfolio of high-quality tax-exempt
securities maturing in 13 months or less."
SUCCESSOR OHIO FUND: "The Fund invests in a portfolio of high-quality
tax-exempt securities maturing in 397 days or less."
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
OHIO FUND: The Fund presently has no policy.
SUCCESSOR OHIO FUND: "The Fund may invest its assets in securities of other
investment companies, including the securities of affiliated money market funds,
as an efficient means of carrying out its investment policies and managing its
uninvested cash."
INVESTING FOR CONTROL
OHIO FUND: "The Fund will not invest in securities of a company for the
purpose of exercising control or management."
SUCCESSOR OHIO FUND: The Fund is not subject to a comparable restriction.
INVESTING IN OPTIONS
OHIO FUND: "The Fund will not invest in puts, calls, straddles, spreads, or
any combination of them."
SUCCESSOR OHIO FUND: The Fund is not subject to a comparable restriction.
STATE UNDERTAKINGS
OHIO FUND: "The Fund has no present intent to borrow money or pledge
securities in excess of 5% of the value of its net assets during the coming
fiscal year."
SUCCESSOR OHIO FUND: The Fund is not subject to a comparable undertaking.
<PAGE>
APPENDIX II-O
Set forth below is a comparison of the investment policies and restrictions of
the Pennsylvania Fund and the Successor Pennsylvania Fund:
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
FUNDAMENTAL INVESTMENT OBJECTIVE
PENNSYLVANIA FUND: "The Fund's investment objective is to provide current
income which is exempt from federal regular income tax and the personal income
taxes imposed by the Commonwealth of Pennsylvania consistent with stability of
principal."
SUCCESSOR PENNSYLVANIA FUND: The Successor Fund is subject to an identical
fundamental investment objective.
FUNDAMENTAL INVESTMENT POLICY
PENNSYLVANIA FUND: "The Fund will invest its assets so that at least 80% of
its annual interest income is exempt from federal regular income tax and
Pennsylvania dividend and interest income tax."
SUCCESSOR PENNSYLVANIA FUND: The Successor Fund is subject to an identical
fundamental investment policy.
CONCENTRATION OF INVESTMENTS
PENNSYLVANIA FUND: "The Fund will not purchase securities if, as a result of
such purchase, 25% or more of the value of its total assets would be invested in
any one industry or in industrial development bonds or other securities, the
interest upon which is paid from revenues of similar types of projects. However,
the Fund may invest as temporary investments more than 25% of the value of its
assets in cash or cash items (including instruments issued by a U.S. branch of a
domestic bank or savings and loan having capital, surplus, and undivided profits
in excess of $100,000,000 at the time of investment), securities issued or
guaranteed by the U.S. government, its agencies, or instrumentalities, or
instruments secured by these money market instruments, such as repurchase
agreements."
SUCCESSOR PENNSYLVANIA FUND: "The Fund will not make investments that will
result in the concentration of its investments in the securities of issuers
primarily engaged in the same industry. Government securities, municipal
securities and bank instruments will not be deemed to constitute an industry. To
conform to the current view of the SEC staff that only domestic bank instruments
may be excluded from industry concentration limitations, as a matter of
non-fundamental policy, the Fund will not exclude foreign bank instruments from
industry concentration limitation tests so long as the policy of the SEC remains
in effect. In addition, investments in certain industrial development bonds
funded by activities in a single industry will be deemed to constitute
investment in an industry, except when held for temporary defensive purposes.
The investment of more than 25% of the value of the Fund's total assets in any
one industry will constitute `concentration.'"
INVESTMENTS IN REAL ESTATE
PENNSYLVANIA FUND: "The Fund will not purchase or sell real estate, although it
may invest in securities of issuers whose business involves the purchase or sale
of real estate or in securities which are secured by real estate or interests in
real estate."
SUCCESSOR PENNSYLVANIA FUND: "The Fund may not purchase or sell real estate,
provided that this restriction does not prevent the Fund from investing in
issuers which invest, deal, or otherwise engage in transactions in real estate
or interests therein, or investing in securities that are secured by real estate
or interests therein. The Fund may exercise its rights under agreements relating
to such securities, including the right to enforce security interests and to
hold real estate acquired by reason of such enforcement until that real estate
can be liquidated in an orderly manner."
<PAGE>
UNDERWRITING SECURITIES
PENNSYLVANIA FUND: "The Fund will not underwrite any issue of securities,
except as it may be deemed to be an underwriter under the Securities Act of 1933
in connection with the sale of securities in accordance with its investment
objective, policies, and limitations."
SUCCESSOR PENNSYLVANIA FUND: "The Fund may not underwrite the securities of
other issuers, except that the Fund may engage in transactions involving the
acquisition, disposition or resale of its portfolio securities, under
circumstances where it may be considered to be an underwriter under the
Securities Act of 1933."
INVESTING IN COMMODITIES
PENNSYLVANIA FUND: "The Fund will not purchase or sell commodities,
commodity contracts, or commodity futures contracts."
SUCCESSOR PENNSYLVANIA FUND: "The Fund may not purchase or sell physical
commodities, provided that the Fund may purchase securities of companies that
deal in commodities."
ISSUING SENIOR SECURITIES AND BORROWING MONEY
PENNSYLVANIA FUND: "The Fund will not issue senior securities except that the
Fund may borrow money in amounts up to one-third of the value of its total
assets, including the amounts borrowed. The Fund will not borrow money for
investment leverage, but rather as a temporary, extraordinary, or emergency
measure or to facilitate management of the portfolio by enabling the Fund to
meet redemption requests when the liquidation of portfolio securities is deemed
to be inconvenient or disadvantageous. The Fund will not purchase any securities
while borrowings in excess of 5% of the value of its total assets are
outstanding."
SUCCESSOR PENNSYLVANIA FUND: "The Fund may borrow money, directly or
indirectly, and issue senior securities to the maximum extent permitted under
the 1940 Act."
LENDING CASH OR SECURITIES
PENNSYLVANIA FUND: "The Fund will not lend any of its assets except that it may
acquire publicly or nonpublicly issued Pennsylvania municipal securities or
temporary investments or enter into repurchase agreements, in accordance with
its investment objective, policies, and limitations."
SUCCESSOR PENNSYLVANIA FUND: "The Fund may not make loans, provided that this
restriction does not prevent the Fund from purchasing debt obligations, entering
into repurchase agreements, lending its assets to broker/dealers or
institutional investors and investing in loans, including assignments and
participation interests."
PLEDGING ASSETS
PENNSYLVANIA FUND: "The Fund will not mortgage, pledge, or hypothecate any
assets except to secure permitted borrowings. In those cases, it may pledge
assets having a market value not exceeding the lesser of the dollar amounts
borrowed or 15% of the value of its total assets at the time of the pledge."
SUCCESSOR PENNSYLVANIA FUND: The Successor Fund is subject to a NON-fundamental
investment limitation pertaining to pledging assets that provides: "The Fund
will not mortgage, pledge or hypothecate any of its assets, provided that this
shall not apply to the transfer of securities in connection with any permissible
borrowing or to collateral arrangements in connection with permissible
activities."
<PAGE>
SELLING SHORT AND BUYING ON MARGIN
PENNSYLVANIA FUND: "The Fund will not sell any securities short or purchase
any securities on margin but may obtain such short-term credits as are necessary
for the clearance of transactions."
SUCCESSOR PENNSYLVANIA FUND: The Successor Fund is not subject to an investment
restriction regarding selling securities short. The Successor Fund is subject to
a non-fundamental investment restriction relating to margin transactions that
states: "The Fund will not purchase securities on margin, provided that the Fund
may obtain short-term credits necessary for the clearance of purchases and sales
of securities."
NON-FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
PERMISSIBLE INVESTMENTS
PENNSYLVANIA FUND: "The Fund invests in a portfolio of high-quality
tax-exempt securities maturing in 13 months or less."
SUCCESSOR PENNSYLVANIA FUND: "The Fund invests in a portfolio of
high-quality tax-exempt securities maturing in 397 days or less."
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
PENNSYLVANIA FUND: The Fund presently has no policy.
SUCCESSOR PENNSYLVANIA FUND: "The Fund may invest its assets in securities
of other investment companies, including the securities of affiliated money
market funds, as an efficient means of carrying out its investment policies and
managing its uninvested cash."
INVESTING FOR CONTROL
PENNSYLVANIA FUND: "The Fund will not invest in securities of a company for
the purpose of exercising control or management."
SUCCESSOR PENNSYLVANIA FUND: The Fund is not subject to a comparable
restriction.
INVESTING IN OPTIONS
PENNSYLVANIA FUND: "The Fund will not invest in puts, calls, straddles,
spreads, or any combination of them."
SUCCESSOR PENNSYLVANIA FUND: The Fund is not subject to a comparable
restriction.
STATE UNDERTAKINGS
PENNSYLVANIA FUND: "The Fund has no present intent to borrow money or
pledge securities in excess of 5% of the value of its net assets during the
coming fiscal year."
SUCCESSOR PENNSYLVANIA FUND: The Fund is not subject to a comparable
undertaking.
<PAGE>
APPENDIX II-P
Set forth below is a comparison of the investment policies and restrictions of
the Tennessee Fund and the Successor Tennessee Fund:
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
FUNDAMENTAL INVESTMENT OBJECTIVE
TENNESSEE FUND: "The Fund's investment objective is to provide current
income exempt from federal regular income tax and the personal income tax
imposed by the State of Tennessee consistent with stability of principal and
liquidity."
SUCCESSOR TENNESSEE FUND: The Successor Fund is subject to an identical
fundamental investment objective.
FUNDAMENTAL INVESTMENT POLICY
TENNESSEE FUND: "The Fund will invest so that at least 80% of its annual
interest income will be exempt from federal regular income tax and the personal
income tax imposed by the State of Tennessee."
SUCCESSOR TENNESSEE FUND: The Successor Fund is subject to an identical
fundamental investment policy.
CONCENTRATION OF INVESTMENTS
TENNESSEE FUND: "The Fund will not purchase securities, if, as a result of such
purchase, 25% or more of the value of its total assets would be invested in any
one industry or in industrial development bonds or other securities, the
interest upon which is paid from revenues of similar types of projects. However,
the Fund may invest as temporary investments more than 25% of the value of its
assets in cash or cash items, securities issued or guaranteed by the U.S.
government, its agencies, or instrumentalities, or instruments secured by these
money market instruments, such as repurchase agreements."
SUCCESSOR TENNESSEE FUND: "The Fund will not make investments that will result
in the concentration of its investments in the securities of issuers primarily
engaged in the same industry. Government securities, municipal securities and
bank instruments will not be deemed to constitute an industry. To conform to the
current view of the SEC staff that only domestic bank instruments may be
excluded from industry concentration limitations, as a matter of non-fundamental
policy, the Fund will not exclude foreign bank instruments from industry
concentration limitation tests so long as the policy of the SEC remains in
effect. In addition, investments in certain industrial development bonds funded
by activities in a single industry will be deemed to constitute investment in an
industry, except when held for temporary defensive purposes. The investment of
more than 25% of the value of the Fund's total assets in any one industry will
constitute `concentration.'"
INVESTMENTS IN REAL ESTATE
TENNESSEE FUND: "The Fund will not purchase or sell real estate or real estate
limited partnerships, although it may invest in securities of issuers whose
business involves the purchase or sale of real estate or in securities which are
secured by real estate or interests in real estate."
SUCCESSOR TENNESSEE FUND: "The Fund may not purchase or sell real estate,
provided that this restriction does not prevent the Fund from investing in
issuers which invest, deal, or otherwise engage in transactions in real estate
or interests therein, or investing in securities that are secured by real estate
or interests therein. The Fund may exercise its rights under agreements relating
to such securities, including the right to enforce security interests and to
hold real estate acquired by reason of such enforcement until that real estate
can be liquidated in an orderly manner."
<PAGE>
UNDERWRITING SECURITIES
TENNESSEE FUND: "The Fund will not underwrite any issue of securities,
except as it may be deemed to be an underwriter under the Securities Act of 1933
in connection with the sale of securities in accordance with its investment
objective, policies, and limitations."
SUCCESSOR TENNESSEE FUND: The Fund may not underwrite the securities of other
issuers, except that the Fund may engage in transactions involving the
acquisition, disposition or resale of its portfolio securities, under
circumstances where it may be considered to be an underwriter under the
Securities Act of 1933."
INVESTING IN COMMODITIES
TENNESSEE FUND: "The Fund will not purchase or sell commodities, commodity
contracts, or commodity futures contracts."
SUCCESSOR TENNESSEE FUND: "The Fund may not purchase or sell physical
commodities, provided that the Fund may purchase securities of companies that
deal in commodities."
ISSUING SENIOR SECURITIES AND BORROWING MONEY
TENNESSEE FUND: "The Fund will not issue senior securities except that it may
borrow money directly or through reverse repurchase agreements in amounts up to
one-third of the value of its total assets, including the amounts borrowed. The
Fund will not borrow money or engage in reverse repurchase agreements for
investment leverage, but rather as temporary, extraordinary, or emergency
measure or to facilitate management of the portfolio by enabling the Fund to
meet redemption requests when the liquidation of portfolio securities is deemed
to be inconvenient or disadvantageous. The Fund will not purchase any securities
while borrowings in excess of 5% of its total assets are outstanding."
SUCCESSOR TENNESSEE FUND: "The Fund may borrow money, directly or
indirectly, and issue senior securities to the maximum extent permitted under
the 1940 Act."
LENDING CASH OR SECURITIES
TENNESSEE FUND: "The Fund will not lend any of its assets, except that it may
acquire publicly or nonpublicly issued Tennessee municipal securities or
temporary investments or enter into repurchase agreements, in accordance with
its investment objective, policies and limitations or the Trust's Declaration of
Trust."
SUCCESSOR TENNESSEE FUND: "The Fund may not make loans, provided that this
restriction does not prevent the Fund from purchasing debt obligations, entering
into repurchase agreements, lending its assets to broker/dealers or
institutional investors and investing in loans, including assignments and
participation interests."
PLEDGING ASSETS
TENNESSEE FUND: "The Fund will not mortgage, pledge, or hypothecate any
assets except as necessary to secure permitted borrowings. In those cases, it
may pledge assets having a market value not exceeding the lesser of the dollar
amounts borrowed or 15% of the value of its total assets at the time of the
pledge."
SUCCESSOR TENNESSEE FUND: The Successor Fund is subject to a NON-fundamental
investment limitation pertaining to pledging assets that provides: "The Fund
will not mortgage, pledge or hypothecate any of its assets, provided that this
shall not apply to the transfer of securities in connection with any permissible
borrowing or to collateral arrangements in connection with permissible
activities."
<PAGE>
SELLING SHORT AND BUYING ON MARGIN
TENNESSEE FUND: "The Fund will not sell any securities short or purchase
any securities on margin, but may obtain such short-term credits as may be
necessary for clearance of transactions."
SUCCESSOR TENNESSEE FUND: The Successor Fund is not subject to an investment
restriction regarding selling securities short. The Successor Fund is subject to
a non-fundamental investment restriction relating to margin transactions that
states: "The Fund will not purchase securities on margin, provided that the Fund
may obtain short-term credits necessary for the clearance of purchases and sales
of securities."
INVESTING IN RESTRICTED SECURITIES
TENNESSEE FUND: "The Fund will not invest more than 10% of its net assets in
securities subject to restrictions on resale under the Securities Act of 1933,
except for certain restricted securities which meet the criteria for liquidity
as established by the Board of Trustees."
SUCCESSOR TENNESSEE FUND: The Fund is subject to a non-fundamental investment
restriction regarding investing in restricted securities that states: "The Fund
may invest in restricted securities. Restricted securities are any securities in
which the Fund may invest pursuant to its investment objective and policies but
which are subject to restrictions on resale under federal securities law. Under
criteria established by the Trustees, certain restricted securities are
determined to be liquid. To the extent that restricted securities are not
determined to be liquid the Fund will limit their purchase, together with other
illiquid securities, to 10% of its net assets."
NON-FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
PERMISSIBLE INVESTMENTS
TENNESSEE FUND: "The Fund invests in a portfolio of high-quality tax-exempt
securities maturing in 13 months or less."
SUCCESSOR TENNESSEE FUND: "The Fund invests in a portfolio of high-quality
tax-exempt securities maturing in 397 days or less."
INVESTING IN ILLIQUID SECURITIES
TENNESSEE FUND: "The Fund will not invest more than 10% of the value of its net
assets in illiquid securities including certain restricted securities not
determined to be liquid under criteria established by the Board and repurchase
agreements providing for settlement in more than seven days notice."
SUCCESSOR TENNESSEE FUND: "The Fund will not purchase securities for which there
is no readily available market, or enter into repurchase agreements or purchase
time deposits maturing in more than seven days, if immediately after and as a
result, the value of such securities would exceed, in the aggregate, 10% of the
Fund's net assets."
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
TENNESSEE FUND: The Fund presently has no policy.
SUCCESSOR TENNESSEE FUND: "The Fund may invest its assets in securities of
other investment companies, including the securities of affiliated money market
funds, as an efficient means of carrying out its investment policies and
managing its uninvested cash."
<PAGE>
INVESTING FOR CONTROL
TENNESSEE FUND: "The Fund will not invest in securities of a company for
the purpose of exercising control or management."
SUCCESSOR TENNESSEE FUND: The Fund is not subject to a comparable
restriction.
INVESTING IN OPTIONS
TENNESSEE FUND: "The Fund will not invest in puts, calls, straddles,
spreads, or any combination of them."
SUCCESSOR TENNESSEE FUND: The Fund is not subject to a comparable
restriction.
STATE UNDERTAKINGS
TENNESSEE FUND: "The Fund has no present intent to borrow money or pledge
securities in excess of 5% of the value of its net assets during the coming
fiscal year."
SUCCESSOR TENNESSEE FUND: The Fund is not subject to a comparable
undertaking.
<PAGE>
APPENDIX II-Q
Set forth below is a comparison of the investment policies and restrictions of
the Virginia Fund and the Successor Virginia Fund:
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
FUNDAMENTAL INVESTMENT OBJECTIVE
VIRGINIA FUND: "The Fund's investment objective is to provide current
income exempt from federal regular income tax and the income tax imposed by the
Commonwealth of Virginia consistent with stability of principal."
SUCCESSOR VIRGINIA FUND: The Successor Fund is subject to an identical
fundamental investment objective.
FUNDAMENTAL INVESTMENT POLICY
VIRGINIA FUND: "The Fund invests so that at least 80% of its annual
interest income is exempt from federal regular income tax and Virginia state
income tax or so that at least 80% of its net assets is invested in obligations,
the interest income from which is exempt from federal regular and Virginia state
income tax."
SUCCESSOR VIRGINIA FUND: The Successor Fund is subject to an identical
fundamental investment policy.
CONCENTRATION OF INVESTMENTS
VIRGINIA FUND: "The Fund will not purchase securities if, as a result of such
purchase, 25% or more of the value of its total assets would be invested in any
one industry or in industrial development bonds or other securities, the
interest upon which is paid from revenues of similar types of projects. However,
the Fund may invest as temporary investments more than 25% of the value of its
assets in cash or cash items (the Fund considers cash items to be instruments
issued by a U.S. branch of a domestic bank or savings and loan having capital,
surplus, and undivided profits in excess of $100,000,000 at the time of
investment), securities issued or guaranteed by the U.S. government, its
agencies, or instrumentalities, or instruments secured by these money market
instruments, such as repurchase agreements."
SUCCESSOR VIRGINIA FUND: "The Fund will not make investments that will result in
the concentration of its investments in the securities of issuers primarily
engaged in the same industry. Government securities, municipal securities and
bank instruments will not be deemed to constitute an industry. To conform to the
current view of the SEC staff that only domestic bank instruments may be
excluded from industry concentration limitations, as a matter of non-fundamental
policy, the Fund will not exclude foreign bank instruments from industry
concentration limitation tests so long as the policy of the SEC remains in
effect. In addition, investments in certain industrial development bonds funded
by activities in a single industry will be deemed to constitute investment in an
industry, except when held for temporary defensive purposes. The investment of
more than 25% of the value of the Fund's total assets in any one industry will
constitute `concentration.'"
INVESTMENTS IN REAL ESTATE
VIRGINIA FUND: "The Fund will not purchase or sell real estate or real estate
limited partnerships, although it may invest in securities of issuers whose
business involves the purchase or sale of real estate or in securities which are
secured by real estate or interests in real estate."
SUCCESSOR VIRGINIA FUND: The Fund may not purchase or sell real estate, provided
that this restriction does not prevent the Fund from investing in issuers which
invest, deal, or otherwise engage in transactions in real estate or interests
therein, or investing in securities that are secured by real estate or interests
therein. The Fund may exercise its rights under agreements relating to such
securities, including the right to enforce security interests and to hold real
estate acquired by reason of such enforcement until that real estate can be
liquidated in an orderly manner."
<PAGE>
UNDERWRITING SECURITIES
VIRGINIA FUND: "The Fund will not underwrite any issue of securities,
except as it may be deemed to be an underwriter under the Securities Act of 1933
in connection with the sale of securities in accordance with its investment
objective, policies, and limitations."
SUCCESSOR VIRGINIA FUND: "The Fund may not underwrite the securities of
other issuers, except that the Fund may engage in transactions involving the
acquisition, disposition or resale of its portfolio securities, under
circumstances where it may be considered to be an underwriter under the
Securities Act of 1933."
INVESTING IN COMMODITIES
VIRGINIA FUND: "The Fund will not purchase or sell commodities, commodity
contracts, or commodity futures contracts."
SUCCESSOR VIRGINIA FUND: "The Fund may not purchase or sell physical
commodities, provided that the Fund may purchase securities of companies that
deal in commodities."
ISSUING SENIOR SECURITIES AND BORROWING MONEY
VIRGINIA FUND: "The Fund will not issue senior securities except that the Fund
may borrow money directly or through reverse repurchase agreements in amounts up
to one-third of the value of its net assets, including the amounts borrowed. The
Fund will not borrow money or engage in reverse repurchase agreements for
investment leverage, but rather as a temporary, extraordinary, or emergency
measure or to facilitate management of the portfolio by enabling the Fund to
meet redemption requests when the liquidation of portfolio securities is deemed
to be inconvenient or disadvantageous. The Fund will not purchase any securities
while borrowings in excess of 5% of its total assets are outstanding."
SUCCESSOR VIRGINIA FUND: "The Fund may borrow money, directly or
indirectly, and issue senior securities to the maximum extent permitted under
the 1940 Act."
LENDING CASH OR SECURITIES
VIRGINIA FUND: "The Fund will not lend any of its assets except that it may
acquire publicly or nonpublicly issued Virginia municipal securities or
temporary investments or enter into repurchase agreements, in accordance with
its investment objective, policies, limitations, and its Declaration of Trust."
SUCCESSOR VIRGINIA FUND: "The Fund may not make loans, provided that this
restriction does not prevent the Fund from purchasing debt obligations, entering
into repurchase agreements, lending its assets to broker/dealers or
institutional investors and investing in loans, including assignments and
participation interests."
PLEDGING ASSETS
VIRGINIA FUND: "The Fund will not mortgage, pledge, or hypothecate any
assets except to secure permitted borrowings. In those cases, it may pledge
assets having a market value not exceeding the lesser of the dollar amounts
borrowed or 15% of the value of its total assets at the time of the pledge."
SUCCESSOR VIRGINIA FUND: The Successor Fund is subject to a NON-fundamental
investment limitation pertaining to pledging assets that provides: "The Fund
will not mortgage, pledge or hypothecate any of its assets, provided that this
shall not apply to the transfer of securities in connection with any permissible
borrowing or to collateral arrangements in connection with permissible
activities."
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SELLING SHORT AND BUYING ON MARGIN
VIRGINIA FUND: "The Fund will not sell any securities short or purchase any
securities on margin but may obtain such short-term credits as may be necessary
for clearance of transactions."
SUCCESSOR VIRGINIA FUND: The Successor Fund is not subject to an investment
restriction regarding selling securities short. The Successor Fund is subject to
a non-fundamental investment restriction relating to margin transactions that
states: "The Fund will not purchase securities on margin, provided that the Fund
may obtain short-term credits necessary for the clearance of purchases and sales
of securities."
NON-FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
PERMISSIBLE INVESTMENTS
VIRGINIA FUND: "The Fund invests in a portfolio of high-quality tax-exempt
securities maturing in 13 months or less."
SUCCESSOR VIRGINIA FUND: "The Fund invests in a portfolio of high-quality
tax-exempt securities maturing in 397 days or less."
INVESTING IN ILLIQUID SECURITIES
VIRGINIA FUND: "The Fund will not invest more than 10% of the value of its net
assets in illiquid securities including certain restricted securities not
determined to be liquid under criteria established by the Board, and repurchase
agreements providing for settlement in more than seven days notice."
SUCCESSOR VIRGINIA FUND: The Fund will not purchase securities for which there
is no readily available market, or enter into repurchase agreements or purchase
time deposits maturing in more than seven days, if immediately after and as a
result, the value of such securities would exceed, in the aggregate, 10% of the
Fund's net assets."
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
VIRGINIA FUND: The Fund presently has no policy.
SUCCESSOR VIRGINIA FUND: "The Fund may invest its assets in securities of
other investment companies, including the securities of affiliated money market
funds, as an efficient means of carrying out its investment policies and
managing its uninvested cash."
INVESTING FOR CONTROL
VIRGINIA FUND: "The Fund will not invest in securities of a company for the
purpose of exercising control or management."
SUCCESSOR VIRGINIA FUND: The Fund is not subject to a comparable
restriction.
INVESTING IN OPTIONS
VIRGINIA FUND: "The Fund will not invest in puts, calls, straddles,
spreads, or any combination of them."
SUCCESSOR VIRGINIA FUND: The Fund is not subject to a comparable restriction.
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STATE UNDERTAKINGS
VIRGINIA FUND: "The Fund has no present intent to borrow money or pledge
securities in excess of 5% of the value of its net assets during the coming
fiscal year."
SUCCESSOR VIRGINIA FUND: The Fund is not subject to a comparable undertaking.
