Reg. No.333-
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811-5950
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
MONEY MARKET OBLIGATIONS TRUST
(Exact Name of Registrant as Specified in Charter)
(412) 288-1900
(Area Code and Telephone Number)
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
(Address of Principal Executive Offices)
JOHN W. MCGONIGLE, ESQUIRE
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
Copies to:
Byron F. Bowman, Esquire Matthew G. Maloney, Esquire
Senior Corporate Counsel Dickstein Shapiro Morin & Oshinsky LLP
Federated Investors 2101 L Street, N.W.
Federated Investors Tower Washington, D.C. 20037
Pittsburgh, PA 15222
Registrant has filed with the Securities and Exchange Commission a declaration
pursuant to Rule 24f-2 under the Investment Company Act of 1940, as amended,
that it elects to register an indefinite amount of securities under the
Securities Act of 1933, as amended, and filed the Notice required by that Rule
for Registrant's fiscal year ended July 31, 1996 on September 16, 1996.
Accordingly, no filing fee is submitted herewith.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until the Registration Statement shall
become effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
CROSS REFERENCE SHEET
PURSUANT TO ITEM 1(A) OF FORM N-14 SHOWING LOCATION IN
PROSPECTUS OF INFORMATION REQUIRED BY FORM N-14
Item of Part A of Form N-14 and Caption or Location in
Caption Prospectus
1.Beginning of Registration
Statement and Outside Front Cross Reference Sheet;
Cover Page of Prospectus Cover Page
2.Beginning and Outside Back
Cover Page of Prospectus Table of Contents
3.Fee Table, Synopsis Information Summary of Expenses; Summary;
and Risk Factors Risk Factors
4.Information About the Information About the
Transaction Reorganization
5.Information About the Information About the Federated
Registrant Fund, the Trust and the
State Bond Fund
6.Information About the Information About the Federated Fund,
Company Being Acquired the Trust and the State Bond Fund
7.Voting Information Voting Information
8.Interest of Certain Persons
and Experts Not Applicable
9.Additional Information
Required for Reoffering by
Persons Deemed to be
Underwriters Not Applicable
STATE BOND CASH MANAGEMENT FUND
100 NORTH MINNESOTA STREET
P.O. BOX 69
NEW ULM, MINNESOTA 56073-0069
Dear Shareholder:
The Board of Directors and management of State Bond Cash Management Fund
(the `State Bond Fund'') are pleased to submit for your vote a proposal to
transfer all of the net assets of the State Bond Fund to Automated Cash
Management Trust (the "Federated Fund"), a portfolio of Money Market Obligations
Trust, a mutual fund advised by Federated Management. The Federated Fund has an
investment objective similar to that of the State Bond Fund in that it seeks to
provide stability of principal and current income consistent with stability of
principal by investing primarily in short-term money market securities. As part
of the transaction, holders of shares in the State Bond Fund would receive
Institutional Service Shares of the Federated Fund equal in value to their
shares in the State Bond Fund and the State Bond Fund would be liquidated.
Shareholders receiving Institutional Service Shares of the Federated Fund as a
result of the proposed reorganization would not have to pay a sales load upon
receiving such Shares, nor would they be subject to any contingent deferred
sales charges in connection with the exercise of exchange rights or redemptions
of such Shares.
The Board of Directors of the State Bond Fund, as well as ARM Capital
Advisors, Inc., the State Bond Fund's manager, and ARM Financial Services, Inc.,
the State Bond Fund's distributor, believe the proposed agreement and plan of
reorganization is in the best interests of State Bond Fund shareholders for the
following reasons:
-- The reorganization of the State Bond Fund into the Federated
Fund may provide operating efficiencies as a result of the size
of the Federated Fund which were not available to State Bond
Fund shareholders due to the smaller size of the State Bond
Fund.
-- The Federated Fund has an investment objective similar to
that of the State Bond Fund and offers an investment portfolio
which invests in short-term money market securities.
The Federated Fund is managed by Federated Management, a subsidiary of
Federated Investors. Federated Investors was founded in 1955 and is located in
Pittsburgh, Pennsylvania. Federated Management and other subsidiaries of
Federated Investors serve as investment advisers to a number of investment
companies and private accounts. With over $90 billion invested across more than
250 funds under management and/or administration by its subsidiaries, Federated
Investors is one of the largest mutual fund investment managers in the United
States. With more than 2,000 employees, Federated continues to be led by the
management who founded the company in 1955. Federated funds are presently at
work in and through 4,000 financial institutions nationwide. More than 100,000
investment professionals have selected Federated funds for their clients.
Federated Investors also has an excellent reputation for customer
servicing, having received a #1 rating for five years in a row by Dalbar, Inc.
The shareholder services for the Federated funds include advanced technological
systems that result in quick shareholder access to a broad spectrum of
information.
We believe the transfer of the State Bond Fund's assets in this
transaction presents an exciting investment opportunity for our shareholders.
Your vote on the transaction is critical to its success. The transfer will be
effected only if approved by a majority of all of the State Bond Fund's
outstanding shares on the record date voted in person or represented by proxy.
We hope you share our enthusiasm and will participate by casting your vote in
person, or by proxy if you are unable to attend the meeting. Please read the
enclosed prospectus/proxy statement carefully before you vote.
THE BOARD OF DIRECTORS BELIEVES THAT THE TRANSACTION IS IN THE BEST
INTEREST OF THE STATE BOND FUND AND ITS SHAREHOLDERS, AND UNANIMOUSLY RECOMMENDS
THAT YOU VOTE FOR ITS APPROVAL.
Thank you for your prompt attention and participation.
Sincerely,
Dale C. Bauman
President
STATE BOND CASH MANAGEMENT FUND
100 NORTH MINNESOTA STREET
P.O. BOX 69
NEW ULM, MINNESOTA 56073-0069
NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS
TO SHAREHOLDERS OF STATE BOND CASH MANAGEMENT FUND:
A Special Meeting of Shareholders of State Bond Cash Management Fund, a
portfolio of State Bond Money Funds, Inc. (the `State Bond Fund'') will be held
at 4:15 p.m. on December , 1996 at: 100 North Minnesota Street, New Ulm,
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Minnesota 56073-0069, for the following purposes:
1. To approve or disapprove a proposed Agreement and Plan of
Reorganization between the State Bond Fund and Money Market Obligations Trust,
on behalf of its portfolio, Automated Cash Management Trust (the "Federated
Fund"), whereby the Federated Fund would acquire all of the net assets of the
State Bond Fund in exchange for the Federated Fund's Institutional Service
Shares to be distributed pro rata by the State Bond Fund to the holders of its
shares in complete liquidation of the State Bond Fund; and
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
By Order of the Board of Directors,
Dated: November , 1996 Kevin L. Howard
--
Secretary
Shareholders of record at the close of business on October 11, 1996, are
entitled to vote at the meeting. Whether or not you plan to attend the meeting,
please sign and return the enclosed proxy card. Your vote is important.
TO SECURE THE LARGEST POSSIBLE REPRESENTATION AND TO SAVE THE EXPENSE OF FURTHER
MAILINGS, PLEASE MARK YOUR PROXY CARD, SIGN IT, AND RETURN IT IN THE ENCLOSED
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. YOU MAY
REVOKE YOUR PROXY AT ANY TIME AT OR BEFORE THE MEETING OR VOTE IN PERSON IF YOU
ATTEND THE MEETING.
PROSPECTUS/PROXY STATEMENT
NOVEMBER , 1996
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Acquisition of the Assets of
STATE BOND CASH MANAGEMENT FUND,
a portfolio of
STATE BOND MONEY FUNDS, INC.
100 North Minnesota Street
P.O. Box 69
New Ulm, Minnesota 56073-0069
Telephone Number: 1-800-328-4735
By and in exchange for Institutional Service Shares of
AUTOMATED CASH MANAGEMENT TRUST,
a portfolio of
MONEY MARKET OBLIGATIONS TRUST
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Telephone Number: 1-800-341-7400
This Prospectus/Proxy Statement describes the proposed Agreement and
Plan of Reorganization (the "Plan") whereby Automated Cash Management Trust (the
"Federated Fund"), a portfolio of Money Market Obligations Trust, a
Massachusetts business trust (the `Trust''), would acquire all of the net
assets of State Bond Cash Management Fund, a portfolio of State Bond Money
Funds, Inc., a Maryland corporation (the `State Bond Fund''), in exchange for
the Federated Fund's Institutional Service Shares to be distributed pro rata by
the State Bond Fund to the holders of its shares, in complete liquidation of the
State Bond Fund. As a result of the Plan, each shareholder of the State Bond
Fund will become the owner of the Federated Fund's Institutional Service Shares
having a total net asset value equal to the total net asset value of his or her
holdings in the State Bond Fund.
THE BOARD OF DIRECTORS OF THE STATE BOND FUND UNANIMOUSLY RECOMMENDS
APPROVAL OF THE PLAN.
Each of the Federated Fund and the State Bond Fund is a diversified
portfolio of securities of an open-end management investment company. The
Federated Fund's investment objective is stability of principal and current
income consistent with stability of principal which it pursues by investing in
short-term money market securities. The State Bond Fund's investment objectives
are high current income, preservation of capital and liquidity which it pursues
by investing in high quality money market instruments. For a comparison of the
investment policies of the Federated Fund and the State Bond Fund, see "Summary-
Investment Objectives, Policies and Limitations."
This Prospectus/Proxy Statement should be retained for future reference.
It sets forth concisely the information about the Federated Fund that a
prospective investor should know before investing. This Prospectus/Proxy
Statement is accompanied by the Prospectus of the Federated Fund dated September
30, 1996, which is incorporated herein by reference. Statements of Additional
Information for the Federated Fund dated September 30, 1996 (relating to the
Federated Fund's prospectus of the same date) and November , 1996 (relating
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to this Prospectus/Proxy Statement) and the Annual Report to Shareholders dated
July 31, 1996, all containing additional information, have been filed with the
Securities and Exchange Commission and are incorporated herein by reference.
Copies of the Statements of Additional Information and the Annual Report may be
obtained without charge by writing or calling the Federated Fund at the address
and telephone number shown above.
THE SHARES OFFERED BY THIS PROSPECTUS/PROXY STATEMENT ARE NOT DEPOSITS OR
OBLIGATIONS OF ANY BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK, AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD,
OR ANY OTHER GOVERNMENT AGENCY. INVESTMENT IN THESE SHARES INVOLVES INVESTMENT
RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS/PROXY STATEMENT. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
TABLE OF CONTENTS
Page No.
Summary of Expenses
Summary
About the Proposed Reorganization
Investment Objectives, Policies and Limitations
Advisory and Other Fees
Distribution Arrangements
Purchase, Exchange and Redemption Procedures
Dividends
Tax Consequences
Risk Factors
Information About the Reorganization
Background and Reasons for the Proposed Reorganization
Agreement Among ARM, ARM Capital and Federated
Description of the Plan of Reorganization
Description of Federated Fund Shares
Federal Income Tax Consequences
Comparative Information on Shareholder Rights and Obligations
Capitalization
Information About the Federated Fund, the Trust and the State Bond Fund
Automated Cash Management Trust, a portfolio of Money Market
Obligations Trust
State Bond Cash Management Fund
Voting Information
Outstanding Shares and Voting Requirements
Dissenter's Right of Appraisal
Other Matters and Discretion of Persons Named in the Proxy
Agreement and Plan of Reorganization -- Exhibit A
SUMMARY OF EXPENSES
Federated Fund
(Institutional State Pro
Service Bond Forma
Shares) Fund Combined
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases
(AS A PERCENTAGE OF OFFERING PRICE) None None None
Maximum Sales Charge Imposed on
Reinvested Dividends (as a percentage of
OFFERING PRICE) NONE NONE NONE
Contingent Deferred Sales Charge
(as a percentage of original purchase
PRICE OR REDEMPTION PROCEEDS,
AS APPLICABLE) NONE NONE NONE
Redemption Fee (as a percentage of
AMOUNT REDEEMED, IF APPLICABLE)(1) NONE NONE NONE
EXCHANGE FEE NONE NONE NONE
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
MANAGEMENT FEE 0.20%(2) 0.09%(3) 0.20%(2)
12B-1 FEE NONE 0.04%(4) NONE
TOTAL OTHER EXPENSES 0.37%(5) 0.67%(6) 0.37%(5)
TOTAL OPERATING EXPENSES(7) 0.57% 0.80% 0.57%
(1) Wire-transferred redemptions of Institutional Service Shares of the
Federated Fund of less than $5,000 may be subject to additional fees. A $10.00
fee will be charged for certain redemptions of State Bond Fund shares by wire
transfer.
(2) The management fees of the Federated Fund and the Pro Forma Combined Fund
have been reduced to reflect the voluntary waiver of a portion of the management
fee. The adviser can terminate this voluntary waiver at any time at its sole
discretion. The maximum management fee is 0.50%
(3) The management fee of the State Bond Fund is net of expense reimbursements.
Without such reimbursements, the management fee would have been 0.40%.
(4) The 12b-1 fee of the State Bond Fund is net of expense reimbursements.
Without such reimbursements, the 12b-1 fee would have been 0.20%.
(5) Total other expenses for the Federated Fund and the Pro Forma Combined Fund
include a shareholder services fee of 0.24%. The shareholder services fee has
been reduced to reflect the voluntary waiver of a portion of the shareholder
services fee. The shareholder service provider can terminate this voluntary
waiver at any time at its sole discretion. The maximum shareholder services fee
is 0.25%.
(6) Total other expenses for the State Bond Fund are net of expense
reimbursements. Without such reimbursements, the total other expenses would
have been 2.97%.
(7) The total operating expenses for Institutional Service Shares of the
Federated Fund are based on expenses expected during the fiscal year ending
July 31, 1997. The total operating expenses were 0.57% for the fiscal year
ended July 31, 1996 and would have been 0.88% absent the voluntary waivers of a
portion of the management fee and a portion of the shareholder services fee.
The total operating expenses for the State Bond Fund are based upon expenses
incurred by the State Bond Fund during its fiscal year ended July 31, 1996. The
total operating expenses were 0.80% for the fiscal year ended July 31, 1996 and
would have been 3.57% absent the expense reimbursements of a portion of the
management fee, the 12b-1 fee and other expenses.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of shares of each of the Federated
Fund, the State Bond Fund and the pro forma combined fund will bear, either
directly or indirectly. For more complete descriptions of the various costs and
expenses see "Summary - Advisory and Other Fees" and "Summary - Distribution
Arrangements."
Long-term shareholders of the Federated Fund may pay more than the
economic equivalent of the maximum front-end sales charges permitted under the
rules of the National Association of Securities Dealers, Inc.
EXAMPLE
The Example below is intended to assist an investor in understanding the
various costs that an investor will bear directly or indirectly. The Example
assumes payment of operating expenses at the levels set forth in the table
above.
An investor would pay the 1 year 3 years 5 years 10 years
following expenses on a $1,000
investment, assuming (1) 5%
annual return and (2) redemption
at the end of each time period.
Expenses would be the same if
there were no redemption at the
end of each time period.
Federated Fund................ $6 $18 $32 $71
State Bond Fund............... $8 $26 $44 $99
Pro Forma Combined............ $6 $18 $32 $71
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
SUMMARY
This summary is qualified in its entirety by reference to the additional
information contained elsewhere in this Prospectus/Proxy Statement, the
Prospectus of the Federated Fund dated September 30, 1996, the Statement of
Additional Information of the Federated Fund dated September 30, 1996, the
Prospectus of the State Bond Fund dated December 1, 1995, the Statement of
Additional Information of the State Bond Fund dated December 1, 1995, and the
Plan, a copy of which is attached to this Prospectus/Proxy Statement as Exhibit
A.
About the Proposed Reorganization
The Board of Directors of the State Bond Fund has voted to recommend to
holders of the shares of the State Bond Fund the approval of the Plan whereby
the Federated Fund, a portfolio of the Trust, would acquire all of the net
assets of the State Bond Fund in exchange for the Federated Fund's Institutional
Service Shares to be distributed pro rata by the State Bond Fund to its
shareholders in complete liquidation and dissolution of the State Bond Fund (the
"Reorganization"). As a result of the Reorganization, each shareholder of the
State Bond Fund will become the owner of the Federated Fund's Institutional
Service Shares having a total net asset value equal to the total net asset value
of his or her holdings in the State Bond Fund on the date of the Reorganization,
i.e., the Closing Date (as hereinafter defined).
As a condition to the Reorganization transactions, the Trust and the
State Bond Fund will receive an opinion of counsel that the Reorganization will
be considered a tax-free "reorganization" under applicable provisions of the
Internal Revenue Code of 1986, as amended (the `Code''), so that no gain or
loss will be recognized by either the Federated Fund or the State Bond Fund or
the shareholders of the State Bond Fund. The tax basis of the Federated Fund's
Institutional Service Shares received by State Bond Fund shareholders will be
the same as the tax basis of their shares in the State Bond Fund. After the
acquisition is completed, the State Bond Fund will be dissolved.
Investment Objectives, Policies and Limitations
The investment objective of the Federated Fund is stability of principal
and current income consistent with stability of principal. This investment
objective may not be changed without the affirmative vote of a majority of the
outstanding voting securities of the Federated Fund, as defined in the
Investment Company Act of 1940, as amended (the `1940 Act''). The Federated
Fund pursues its investment objective by investing in a portfolio of short-term
money market instruments.
The investment objectives of the State Bond Fund are high current
income, preservation of capital and liquidity which it pursues by investing in
high quality money market instruments. This investment objective may not be
changed without the affirmative vote of a majority of the outstanding voting
securities of the State Bond Fund, as defined in the 1940 Act.
Both the Federated Fund and the State Bond Fund are money market mutual
funds that seek to maintain a stable net asset value of $1.00 per share. There
can be no assurance that either the Federated Fund or the State Bond Fund will
be able to maintain such a stable net asset value. The Federated Fund and the
State Bond Fund are subject to the investment restrictions of Rule 2a-7 of the
1940 Act which requires that each fund maintain an average weighted maturity of
not more than 90 days and invest exclusively in securities that mature within
397 days. Rule 2a-7 also requires that all investments be limited to U.S.
dollar-denominated investments that: (1) present `minimal credit risks,'' and
(2) are at the time of acquisition `Eligible Securities,'' as defined in
Rule 2a-7.
The Federated Fund pursues its investment objective by investing in a
portfolio of money market instruments maturing in 13 months or less. The
average maturity of the money market instruments in the Federated Fund's
portfolio computed on a dollar-weighted basis, will be 90 days or less. The
Federated Fund invests in high quality money market instruments that are either
rated in the highest short-term rating category by one or more nationally
recognized statistical rating organizations (`NRSROs'') or are of comparable
quality to securities having such ratings. The Federated Fund invests only in
instruments denominated and payable in U.S. dollars. The Federated Fund may
enter into repurchase agreements, invest in credit-enhanced instruments, acquire
securities that are subject to demand features, purchase short-term U.S.
Government obligations on a when-issued or delayed delivery basis, and invest in
restricted and illiquid securities (subject to a limit on all illiquid
securities of 10% of its net assets). Unless otherwise designated, the
investment policies of the Federated Fund may be changed by the Board of
Trustees without shareholder approval, although shareholders will be notified
before any material change becomes effective.
The State Bond Fund invests in high quality money market instruments,
including: U.S. Government obligations, bank obligations, commercial paper and
corporate debt securities. The State Bond Fund may enter into repurchase
agreements (subject to a limit on all repurchase agreements of more than one
week's duration of 10% of its net assets), lend portfolio securities and trade
investments to take advantage of short-term market movements. Unless otherwise
designated, the investment policies of the State Bond Fund may be changed by the
Board of Directors without shareholder approval.
Both the Federated Fund and the State Bond Fund are subject to certain
investment limitations. For the Federated Fund, these include investment
limitations which prohibit it from borrowing money directly or through reverse
repurchase agreements or pledging securities except, under certain
circumstances, the Federated Fund may borrow up to one-third of the value of its
total assets and pledge up to 10% of the value of its total assets to secure
such borrowings. These investment limitations cannot be changed without
shareholder approval.
The State Bond Fund has investment limitations which prohibit it from
(1) borrowing money, except for temporary purposes and in an aggregate amount
not in excess of 10% of the value of the total assets of the State Bond Fund,
provided that borrowings in excess of 5% of such value are permitted from banks
only, and that the State Bond Fund will not purchase securities when borrowings
exceed 5% of such value; (2) investing more than 25% of its assets in securities
of issuers in any one industry (provided that the State Bond Fund can
concentrate its investments in money market instruments issued by the U.S.
Government or its agencies or domestic banks); (3) mortgaging or pledging
assets, except that up to 10% of the State Bond Fund's assets can be used to
secure borrowings; (4) investing more than 5% of its assets in any one issuer
other than the U.S. Government or its agencies; or (5) investing more than 5% of
its assets in the securities of issuers in operation less than three continuous
years. The above investment limitations of the State Bond Fund cannot be
changed without shareholder approval.
In addition to the policies and limitations set forth above, both the
Federated Fund and the State Bond Fund are subject to certain additional
investment policies and limitations, described in the Federated Fund's Statement
of Additional Information dated September 30, 1996 and the State Bond Fund's
Statement of Additional Information dated December 1, 1995. Reference is hereby
made to the Federated Fund's Prospectus and Statement of Additional Information,
each dated September 30, 1996, and to the State Bond Fund's Prospectus and
Statement of Additional Information, each dated December 1, 1995, which set
forth in full the investment objective, policies and investment limitations of
each of the Federated Fund and the State Bond Fund, all of which are
incorporated herein by reference thereto.
Advisory and Other Fees
The annual investment advisory fee for the Federated Fund is 0.50 of 1%
of the Federated Fund's average daily net assets. The investment adviser to the
Federated Fund, Federated Management ("Federated Management"), a subsidiary of
Federated Investors, may voluntarily choose to waive a portion of its advisory
fee or reimburse other expenses of the Federated Fund. This voluntary waiver or
reimbursement may be terminated by Federated Management at any time in its sole
discretion. Federated Management has also undertaken to reimburse the Federated
Fund for operating expenses in excess of limitations established by certain
states. The maximum annual management fee for the State Bond Fund is 0.40 of 1%
on the first $500 million of average daily net assets of the State Bond Fund,
0.35 of 1% on the next $250 million, 0.30 of 1% of the next $250 million and
0.25 of 1% of such assets of the State Bond Fund in excess of $1 billion. The
State Bond Fund's investment manager, ARM Capital Advisors, Inc.(`ARM
Capital'), a wholly-owned subsidiary of ARM Financial Group, Inc. (``ARM''),
has voluntarily agreed to reimburse the State Bond Fund for any expenses
incurred by the State Bond Fund to the extent the State Bond Fund's total
expenses exceeded 0.80% of average daily net assets of the State Bond Fund.
This voluntary arrangement may be terminated by ARM Capital at any time in its
sole discretion. ARM Capital has also undertaken to reimburse the State Bond
Fund for operating expenses in excess of limitations established by certain
states.
Federated Services Company, an affiliate of Federated Management,
provides certain administrative personnel and services necessary to operate the
Federated Fund at an annual rate based upon the average aggregate daily net
assets of all funds advised by Federated Management and its affiliates. The
rate charged is 0.15 of 1% on the first $250 million of all such funds' average
aggregate daily net assets, 0.125 of 1% on the next $250 million, 0.10 of 1% on
the next $250 million and 0.075 of 1% of all such funds' average aggregate daily
net assets in excess of $750 million, with a minimum annual fee per portfolio of
$125,000 plus $30,000 for each additional class of shares of any such portfolio.
Federated Services Company may choose voluntarily to waive a portion of its fee.
The administrative fee expense for the Federated Fund's most recent fiscal year
was $954,191. Administrative personnel and other services necessary to operate
the State Bond Fund are currently provided by ARM Capital and are included in
the annual management fee for the State Bond Fund, as discussed above.
The Federated Fund has entered into a Shareholder Services Agreement
under which it may make payments of up to 0.25 of 1% of the average daily net
asset value of the Institutional Service Shares to obtain certain personal
services for shareholders and the maintenance of shareholder accounts. The
Shareholder Services Agreement provides that Federated Shareholder Services
("FSS"), an affiliate of Federated Management, will either perform shareholder
services directly or will select financial institutions to perform such
services. Financial institutions will receive fees based upon shares owned by
their clients or customers. The schedule of such fees and the basis upon which
such fees will be paid is determined from time to time by the Federated Fund and
FSS. Other than in connection with payments under a Rule 12b-1 plan as
described below, the State Bond Fund does not make payments to obtain similar
shareholder services.
The total annual operating expenses for Institutional Service Shares of
the Federated Fund were 0.57% of average daily net assets (after waivers) for
its most recent fiscal year. The total annual operating expenses for shares of
the State Bond Fund were 0.80% of average daily net assets (after expense
reimbursements) for its most recent fiscal year. Without such waivers or
reimbursements, the expense ratio of the Federated Fund and the State Bond Fund
would be higher by 0.31% and 2.77%, respectively, of average daily net assets.
Distribution Arrangements
Federated Securities Corp. ("FSC"), an affiliate of Federated
Management, is the principal distributor for shares of the Federated Fund.
Institutional Service Shares of the Federated Fund are sold at net asset value,
without a sales charge, next determined after an order is received. The
Federated Fund does not have a Rule 12b-1 plan in effect with respect to its
Institutional Service Shares and, accordingly, does not, nor does FSC,
compensate brokers and dealers for sales and administrative services performed
in connection with sales of Institutional Service Shares of the Federated Fund
pursuant to a plan of distribution adopted pursuant to Rule 12b-1. However, FSC
and FSS, from their own assets, may pay financial institutions supplemental fees
as financial assistance for providing substantial sales services, distribution-
related support services or shareholder services with respect to the Federated
Fund. Such assistance will be predicated upon the amount of shares the
financial institution sells or may sell, and/or upon the type and nature of
sales or marketing support furnished by the financial institution. Any payments
made by FSC may be reimbursed by Federated Management or its affiliates.
ARM Financial Services, Inc. (`ARMFS''), an affiliate of ARM Capital,
is the principal distributor for shares of the State Bond Fund. Shares of the
State Bond Fund are sold at net asset value, without a sales charge, next
determined after an order is received. The State Bond Fund has adopted a Rule
12b-1 Distribution Plan (the "Rule 12b-1 Plan") pursuant to which the State Bond
Fund pays ARMFS an amount equal to an annual rate of 0.20 of 1% of the average
daily net assets of the State Bond Fund. The fee may be used by ARMFS to (i)
provide initial and ongoing sales compensation to its investment executives and
to other broker-dealers in connection with the sale of State Bond Fund shares
and to pay for other advertising and promotional expenses in connection with the
sale of State Bond Fund shares, and (ii) to provide compensation to entities in
connection with the provision of certain personal and account maintenance
services to State Bond Fund shareholders, including, but not limited to,
responding to shareholder inquiries and providing information on their
investments. The Federated Fund will not assume any liabilities or make any
voluntary reimbursements on account of the State Bond Fund's Rule 12b-1 Plan.
Purchase, Exchange and Redemption Procedures
The transfer agent and dividend disbursing agent for the Federated Fund
is Federated Shareholder Services Company (formerly called Federated Services
Company). The transfer agent and dividend disbursing agent for the State Bond
Fund is ARM Transfer Agency, Inc. Procedures for the purchase, exchange and
redemption of the Federated Fund's Institutional Service Shares differ slightly
from procedures applicable to the purchase, exchange and redemption of the State
Bond Fund's shares. Any questions about such procedures may be directed to, and
assistance in effecting purchases, exchanges or redemptions of the Federated
Fund's Institutional Service Shares or the State Bond Fund's shares may be
obtained from FSC, principal distributor for the Federated Fund, at 1-800-
341-7400 or from ARMFS, principal distributor for the State Bond Fund, at 1-800-
328-4735.
Reference is made to the Prospectus of the Federated Fund dated
September 30, 1996, and the Prospectus of the State Bond Fund dated December 1,
1995, for a complete description of the purchase, exchange and redemption
procedures applicable to purchases, exchanges and redemptions of Federated Fund
and State Bond Fund shares, respectively, each of which is incorporated herein
by reference thereto. Set forth below is a brief listing of the significant
purchase, exchange and redemption procedures applicable to the Federated Fund's
Institutional Service Shares and the State Bond Fund's shares.
Purchases of Institutional Service Shares of the Federated Fund may be
made through a financial institution who has an agreement with FSC or, once an
account has been established, by wire, check, phone or direct deposit.
Purchases of shares of the State Bond Fund may be made through ARMFS and through
certain broker-dealers under contract with ARMFS or directly by wire or check
once an account has been established. The minimum initial investment in the
Federated Fund is $25,000; however, an account may be opened with a smaller
amount as long as the $25,000 minimum is reached within 90 days. All accounts
maintained by an institutional investor will be combined together to determine
whether such minimum investment requirement is met. For purposes of the minimum
initial investment, all State Bond Fund shareholder accounts maintained by ARMFS
will be combined to meet the minimum investment requirement. The minimum
initial investment in the State Bond Fund is $1,000. Subsequent investments
must be in an amount of at least $100, unless the subsequent investment is made
by means of the automatic investment plan, in which case the subsequent minimum
is $50. The minimums for IRA, Keogh, and other tax-deferred pension plans in
the State Bond Fund are $250 for initial investment and $50 for subsequent
investments . The Federated Fund and the State Bond Fund each reserve the right
to reject any purchase request. In connection with the sale of Institutional
Service Shares of the Federated Fund, FSC may from time to time offer certain
items of nominal value to any shareholder.
The purchase price of the Federated Fund's Institutional Service Shares
and the State Bond Fund's shares is based on net asset value, without a sales
charge. The net asset value per share for the Federated Fund is calculated at
12:00 noon, 3:00 p.m. (Eastern time), and as of the close of trading (normally
4:00 p.m., Eastern time) on the New York Stock Exchange, Inc. (the `NYSE'') on
each day on which the NYSE is open for business. The net asset value per share
of the State Bond Fund is calculated as of 4:00 p.m. (Eastern time) on days in
which the State Bond Fund is open for business. Purchase orders for the
Federated Fund made through financial institutions are considered received when
the Federated Fund receives payment by wire or converts payment by check from
the financial institution into federal funds. Federated Fund purchase orders by
wire are considered received immediately and payments must be received before
3:00 p.m. (Eastern time) in order to begin earning dividends that same day.
Federated Fund purchase orders received by check are considered received after
the check is converted into federal funds, which normally occurs the business
day after receipt, and shares begin earning dividends the next day. Purchase
orders for shares of the State Bond Fund will begin to earn dividends on the day
that the order is considered effective, which occurs when payments are received
in, or converted into, federal funds..
Holders of Institutional Service Shares of the Federated Fund as a
result of the Reorganization will have exchange privileges with respect to Class
A Shares in certain of the funds for which affiliates of Federated Investors
serve as investment adviser or principal underwriter (collectively, the
"Federated Funds"), each of which has different investment objectives and
policies. Institutional Service Shares in the Federated Fund may be exchanged
for Class A Shares of certain Federated Funds at net asset value plus the
applicable sales charge for that fund. Institutional Service Shares to be
exchanged must have a net asset value which meets the minimum investment
requirement for the fund into which the exchange is being made. Holders of
shares of the State Bond Fund have exchange privileges with respect to shares in
certain of the other funds for which ARM Capital serves as investment manager
(collectively, the `State Bond Group''), each of which has different investment
objectives and policies. Shares of the State Bond Fund purchased directly
(i.e., not through an exchange from another mutual fund in the State Bond Group)
may be exchanged for shares in any other mutual fund in the State Bond Group at
net asset value plus the applicable sales charge for that fund. Shares of the
State Bond Fund acquired through an exchange with another fund in the State Bond
Group which have been held for seven calendar days or more may later be
exchanged for shares of any of the other funds in the State Bond Group at such
fund's next determined net asset value without a sales charge; however, if such
exchange is for shares of a fund which has a higher sales charge than the fund
originally purchased and the shares of the original fund were held for less than
six months, an investor must pay the difference in the sales charge applicable
to the purchase of shares of the original fund and the higher sales charge
applicable to the purchase of shares of the new fund. Exercise of the exchange
privilege is treated as a sale for federal income tax purposes and, accordingly,
may have tax consequences for the shareholder. Information on share exchanges
may be obtained from the Federated Fund or the State Bond Fund, as appropriate.
Redemptions of Federated Fund Institutional Service Shares may be made
through a financial institution, by telephone and by mailing a written request.
Redemptions of State Bond Fund shares may be made through an authorized dealer
or representative of ARMFS, by mailing a written request to the State Bond
Fund's transfer agent or through the State Bond Fund's quick redemption service
or check redemption service. Institutional Service Shares of the Federated Fund
are redeemed at their net asset value next determined after the redemption
request is received on each day on which the Federated Fund computes its net
asset value. Shares of the State Bond Fund are redeemed at their net asset
value next determined after receipt of a redemption request in proper form (or
as next determined on the next business day of the State Bond Fund if the
request is made by telephone and received after 4:00 p.m. Eastern time).
Proceeds will ordinarily be distributed by check within seven days after receipt
of a redemption request.
Dividends
Each of the Federated Fund's and the State Bond Fund's current policy is
to declare dividends daily and pay dividends monthly and to make annual
distributions of net realized capital gains, if any. With respect to both the
Federated Fund and the State Bond Fund, unless a shareholder otherwise
instructs, dividends and capital gain distributions will be reinvested
automatically in additional shares at net asset value.
Tax Consequences
As a condition to the Reorganization transactions, the Trust and the
State Bond Fund will receive an opinion of counsel that the Reorganization will
be considered a tax-free "reorganization" under applicable provisions of the
Code so that no gain or loss will be recognized by either the Federated Fund or
the State Bond Fund or the shareholders of the State Bond Fund. The tax basis
of the Federated Fund shares received by State Bond Fund shareholders will be
the same as the tax basis of their shares in the State Bond Fund.
RISK FACTORS
As with other mutual funds that invest primarily in money market
securities, the Federated Fund is subject to market risks. Briefly, these risks
include, but are not limited to, the ability of the issuers of securities owned
by the Federated Fund to meet their obligations for the payment of principal and
interest when due or to repurchase such securities as previously agreed, and, in
the case of certain dollar-denominated obligations issued by domestic or foreign
branches of U.S. and foreign banks and other offshore issuers, international
economic and political developments, foreign governmental restrictions that may
adversely affect the payment of principal or interest and foreign withholding or
other taxes on interest income. Since the State Bond Fund also invests in money
market instruments, these risk factors are generally also present in an
investment in the State Bond Fund. A full discussion of the risks inherent in
investment in the Federated Fund and the State Bond Fund is set forth in the
Federated Fund's Prospectus and Statement of Additional Information, each dated
September 30, 1996 and the State Bond Fund's Prospectus and Statement of
Additional Information, each dated December 1, 1995, each of which is
incorporated herein by reference thereto.
INFORMATION ABOUT THE REORGANIZATION
Background and Reasons for the Proposed Reorganization
On June 14, 1995, SBM Company, which was then the investment adviser to
the State Bond Fund, completed the sale of substantially all of its business
operations to ARM (the `1995 Transaction''). In connection with the 1995
Transaction, ARM Capital became the investment manager of the State Bond Fund.
In addition, ARM acquired all of the outstanding stock of SBM Financial
Services, Inc., the predecessor in interest to ARMFS, the current distributor of
shares of the State Bond Fund.
Considerations of the Board of Directors of the State Bond Fund. On
June 6, 1996, ARM management advised the Board of Directors of the State Bond
Fund that ARM was considering redirecting its corporate strategy away from the
management and distribution of retail mutual funds in order to concentrate more
fully on its core businesses. Moreover, ARM management stated that due to the
relatively small net assets in the State Bond Fund and the other mutual funds in
the State Bond Group, ARM and its affiliates were not in a position to provide
the value-added shareholder services, technological advancements, comprehensive
distribution networks and diversified product choices that many larger mutual
fund complexes offer. As a result, management stated that ARM was engaged in
the identification and analysis of various potential alternatives for the State
Bond Fund and the other funds in the State Bond Group.
After conducting a screening process, ARM determined that in its
judgment, the proposed Reorganization was the most desirable alternative
involving the State Bond Fund that was reasonably available and that it should
be presented to the State Bond Fund's Board of Directors for its consideration.
A meeting of the entire Board of Directors was held on August 16, 1996,
at which Federated (as defined below) presented to the Board information
relating to the overall reputation, financial strength and stability of
Federated Investors, the parent company of Federated Management (together with
its affiliates, `Federated''). Federated, founded in 1955, is among the seven
largest mutual fund sponsors, with over $90 billion invested across more than
250 funds under management and/or administration by its subsidiaries, and over
2,000 employees. Federated's management also discussed the growth of assets
under management and/or administration by Federated from approximately $35
billion in 1989 to over $90 billion as of August 1996. Federated's management
explained to the Board that the majority of this growth came from within
Federated through its multiple distribution channels. The Board was also
informed of the variety of investment products available through Federated,
including international funds and an array of domestic funds broader than
currently offered in the State Bond Group, the exchange privileges that would be
available to former State Bond Fund shareholders if the Reorganization is
consummated, and the multiple sales charge (or `load'') structures available to
prospective shareholders. The Board took into account that if the
Reorganization takes place, shareholders of the State Bond Fund would exchange
their shares for Shares of the Federated Fund without the imposition of any
sales charge.
Federated's management advised the Board of its reputation for customer
servicing, noting that it has received a #1 rating for five years in a row by
Dalbar, Inc. Federated's management stated that its shareholder services
include advanced technological systems that result in quick shareholder access
to a broad spectrum of information, including: telephonic automated yield and
performance information; consolidated monthly shareholder statements; no-fee
IRAs; quarterly newsletters; year-end tax reporting information; direct deposit;
and telephonic redemption and exchange.
Federated's management also reviewed with the Board relative asset size
and expense ratios, including relative advisory fees. The Board discussed the
fact that the Federated Fund is larger in asset size than the State Bond Fund
and considered potential economies of scale that might be experienced by former
State Bond Fund shareholders if they were to become shareholders of a larger
fund. Federated's management discussed with the Board expense waiver and
reimbursement arrangements with respect to both the Federated Fund in particular
and to the complex generally. The Board noted that ARM Capital could terminate
its voluntary expense waiver and reimbursement arrangements with respect to the
State Bond Fund at any time in its sole discretion.
The Chief Investment Officer, Fixed-Income, of Federated discussed with
the Board the investment philosophy of Federated Management for its funds,
including the Federated Fund. He also described the background and significant
investment experience of Federated portfolio managers and other related
personnel issues.
The Board was presented with materials comparing the investment
objectives and policies of the State Bond Fund with those of the Federated Fund,
and determined that they were substantially similar. The Board was also
presented with and discussed materials comparing the performance and relative
risks of the State Bond Fund and the Federated Fund. Federated's management
also presented biographical information about each of the Trustees of the Trust
and reviewed with the Board the structure of its compliance and internal audit
departments and the scope of its training programs.
The Board also considered the potential benefits to ARM if the
Reorganization is consummated. The Board discussed the fact that ARM and ARM
Capital would be compensated for selling the books, records and goodwill
relating to the management of the State Bond Group, agreeing to certain non-
competition arrangements and cooperating in assisting in the transfer of the
assets of the State Bond Group to the Federated Funds. They also took into
account the proposed payment to ARMFS of 0.25% of the average daily net assets
of the Federated Fund attributable to shareholder accounts serviced by ARMFS, as
well as the possible compensation of ARMFS for distribution of additional
Federated financial products in the future.
The Board noted that the State Bond Fund would not bear any of the costs
involved in the Reorganization, which would be borne entirely by ARM and/or
Federated. In addition, the Board discussed the anticipated tax-free nature of
the Reorganization to the State Bond Fund and its shareholders.
In connection with their consideration of the Reorganization, the Board
also reviewed their fiduciary obligations under state and federal law. They
considered the requirements of Section 15(f) of the 1940 Act, which provides
that an investment manager to an investment company, and the affiliates of such
manager (such as ARM), may receive any amount or benefit in connection with a
sale of any interest in such investment manager which results in an assignment
of an investment management contract if (1) for a period of three years after
such assignment, at least 75% of the board of directors of the investment
company are not `interested persons'' (as defined in the 1940 Act) of the new
investment manager or its predecessor; and (2) no `unfair burden'' (as defined
in the 1940 Act) is imposed on the investment company as a result of the
assignment or any express or implied terms, conditions or understandings
applicable thereto.
With respect to the first condition of Section 15(f) relating to Board
composition, the Board was advised that the Federated Fund's Board of Trustees
presently consists of thirteen (13) Trustees, only three (3) of whom are
`interested persons.'' With respect to the second condition of Section 15(f),
while there is no specific definition of `unfair burden,'' it includes any
arrangement, for two years after the transaction, pursuant to which the
predecessor or successor adviser is entitled to receive compensation from any
person in connection with the mutual fund's purchase or sale of securities,
other than bona fide ordinary compensation as principal underwriter. The
definition of unfair burden also includes any payments from the fund for other
than bona fide investment advisory or other services. The Board considered the
fact that representations were made by Federated and ARM that the agreement
among Federated, ARM and ARM Capital would contain representations and covenants
that the Reorganization would not impose an unfair burden on the State Bond
Group.
After reviewing and considering all of the information provided by
Federated and ARM, including the terms of the Reorganization, the Board,
including all of the Directors who are not interested persons of the State Bond
Fund or ARM Capital, voted unanimously at a special telephonic meeting held on
August 26, 1996, to approve the Reorganization and to recommend it to the
shareholders of the State Bond Fund for their approval.
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
REORGANIZATION.
Considerations of the Board of Trustees of the Federated Fund. The
Board of Trustees of the Federated Fund, including a majority of the independent
Trustees, have unanimously concluded that consummation of the Reorganization is
in the best interests of the Federated Fund and the shareholders of the
Federated Fund and that the interests of Federated Fund shareholders would not
be diluted as a result of effecting the Reorganization and have unanimously
voted to approve the Plan.
Agreement Among ARM, ARM Capital and Federated
The Reorganization is being proposed as part of an agreement in
principle by and among Federated, ARM, and ARM Capital, pursuant to which ARM
and ARM Capital would be compensated for selling to Federated the books, records
and goodwill relating to the management of the State Bond Group and cooperating
in facilitating the transaction contemplated by the agreement. As part of that
agreement, ARM Capital and its affiliates have agreed not to compete with
Federated by providing investment advisory services to certain investment
companies. Following the Reorganization, ARM or its affiliates have agreed to
provide certain services to shareholders for which ARM or its affiliates may
receive fees paid by Federated and/or mutual funds in which the shareholders are
invested.
Description of the Plan of Reorganization
The Plan provides that the Federated Fund will acquire all of the net
assets of the State Bond Fund in exchange for the Federated Fund's Institutional
Service Shares to be distributed pro rata by the State Bond Fund to its
shareholders in complete liquidation of the State Bond Fund on or about December
, 1996 (the "Closing Date"). Shareholders of the State Bond Fund will become
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shareholders of the Federated Fund as of the close of business on the Closing
Date, and will be entitled to the Federated Fund's next dividend distribution.
As of or prior to the Closing Date, the State Bond Fund will declare and
pay a dividend or dividends which, together with all previous such dividends,
shall have the effect of distributing to its shareholders all taxable income for
the period ending on the Closing Date. In addition, the State Bond Fund's
dividend will include its net capital gains realized in the period ending on the
Closing Date.
Consummation of the Reorganization is subject to the conditions set
forth in the Plan, including receipt of an opinion in form and substance
satisfactory to the State Bond Fund and the Trust, on behalf of the Federated
Fund, as described under the caption "Federal Income Tax Consequences" below.
The Plan may be terminated and the Reorganization may be abandoned at any time
before or after approval by shareholders of the State Bond Fund prior to the
Closing Date by either party if it believes that consummation of the
Reorganization would not be in the best interests of its shareholders.
Federated Management is responsible for the payment of substantially all
of the expenses of the Reorganization incurred by either party, whether or not
the Reorganization is consummated. Such expenses include, but are not limited
to, registration fees, transfer taxes (if any), the fees of banks and transfer
agents and the costs of preparing, printing, copying and mailing proxy
solicitation materials to the State Bond Fund's shareholders and the costs of
holding the Special Meeting (as hereinafter defined). ARM is responsible for
the payment of the legal fees of the State Bond Fund. The accountants' fees of
the State Bond Fund will be borne equally by Federated Management and ARM.
The foregoing description of the Plan entered into between the Trust, on
behalf of the Federated Fund, and the State Bond Fund, is qualified in its
entirety by the terms and provisions of the Plan, a copy of which is attached
hereto as Exhibit A and incorporated herein by reference thereto.
Description of Federated Fund Shares
Full and fractional Institutional Service Shares of the Federated Fund
will be issued without the imposition of a sales charge or other fee to the
shareholders of the State Bond Fund in accordance with the procedures described
above. Institutional Service Shares of the Federated Fund to be issued to
shareholders of the State Bond Fund under the Plan will be fully paid and
nonassessable when issued and transferable without restriction and will have no
preemptive or conversion rights. Reference is hereby made to the Prospectus of
the Federated Fund dated September 30, 1996, provided herewith for additional
information about Institutional Service Shares of the Federated Fund.
Federal Income Tax Consequences
As a condition to the Reorganization, the Trust, on behalf of the
Federated Fund, and the State Bond Fund will receive an opinion from Dickstein
Shapiro Morin & Oshinsky LLP, counsel to the Trust, to the effect that, on the
basis of the existing provisions of the Code, current administrative rules and
court decisions, for federal income tax purposes: (1) the Reorganization as set
forth in the Plan will constitute a tax-free reorganization under section
368(a)(1)(C) of the Code; (2) no gain or loss will be recognized by the
Federated Fund upon its receipt of the State Bond Fund's assets solely in
exchange for Federated Fund Institutional Service Shares; (3) no gain or loss
will be recognized by the State Bond Fund upon the transfer of its assets to the
Federated Fund in exchange for Federated Fund Institutional Service Shares or
upon the distribution (whether actual or constructive) of the Federated Fund
Institutional Service Shares to the State Bond Fund shareholders in exchange for
their shares of the State Bond Fund; (4) no gain or loss will be recognized by
shareholders of the State Bond Fund upon the exchange of their State Bond Fund
shares for Federated Fund Institutional Service Shares; (5) the tax basis of the
State Bond Fund's assets acquired by the Federated Fund will be the same as the
tax basis of such assets to the State Bond Fund immediately prior to the
Reorganization; (6) the tax basis of Federated Fund Institutional Service Shares
received by each shareholder of the State Bond Fund pursuant to the Plan will be
the same as the tax basis of State Bond Fund shares held by such shareholder
immediately prior to the Reorganization; (7) the holding period of the assets of
the State Bond Fund in the hands of the Federated Fund will include the period
during which those assets were held by the State Bond Fund; and (8) the holding
period of Federated Fund Institutional Service Shares received by each
shareholder of the State Bond Fund will include the period during which the
State Bond Fund shares exchanged therefor were held by such shareholder,
provided the State Bond Fund shares were held as capital assets on the date of
the Reorganization.
Shareholders should recognize that an opinion of counsel is not binding
on the Internal Revenue Service (`IRS'') or any court. The State Bond Fund
does not expect to obtain a ruling from the IRS regarding the consequences of
the Reorganization. Accordingly, if the IRS sought to challenge the tax
treatment of the Reorganization and was successful, neither of which is
anticipated, the Reorganization would be treated as a taxable sale of assets of
the State Bond Fund, followed by the taxable liquidation of the State Bond Fund.
Comparative Information on Shareholder Rights and Obligations
General. Both the Trust and the State Bond Fund are open-end,
diversified management investment companies registered under the 1940 Act, which
continuously offer to sell shares at their current net asset value. The Trust
is organized as a business trust pursuant to a Declaration of Trust under the
laws of the Commonwealth of Massachusetts. The Trust is governed by its
Declaration of Trust, Bylaws, and Board of Trustees, in addition to applicable
state and Federal law. The State Bond Fund is organized as a separate series of
State Bond Money Funds, Inc. under the laws of the State of Maryland and is
governed by its Articles of Incorporation, Bylaws, and Board of Directors, in
addition to applicable state and Federal law. Set forth below is a brief
summary of the significant rights of shareholders of the Trust and the State
Bond Fund.
Shares of the Trust and the State Bond Fund. The Trust is authorized to
issue an unlimited number of shares of beneficial interest which have no par
value. The Federated Fund is a separate series of the Trust. The Board of
Trustees has established two classes of shares of the Federated Fund, known as
Institutional Service Shares and Cash II Shares. The State Bond Fund has an
authorized capital of 20,000,000,000 shares of common stock with a par value of
$.00001 per share. The State Bond Fund is currently the sole investment
portfolio of State Bond Money Funds, Inc. and has only one class of shares.
Issued and outstanding shares of both the Federated Fund and State Bond Fund are
fully paid and nonassessable, and freely transferable.
Voting Rights. Neither the Trust nor the State Bond Fund is required to
hold annual meetings of shareholders, except as required under the 1940 Act.
Shareholder approval is necessary only for certain changes in operations or the
election of trustees/directors under certain circumstances. The Trust requires
that a special meeting of shareholders be called for any permissible purpose
upon the written request of the holders of at least 10% of the outstanding
shares of the series or class of the Trust entitled to vote. A special meeting
of the shareholders of the State Bond Fund is required to be called upon the
written request of shareholders representing not less than 25% of the shares
entitled to vote. Each share of the Federated Fund gives the shareholder one
vote in trustee elections and other matters submitted to shareholders for vote.
All shares of each portfolio or class in the Trust have equal voting rights
except that in matters affecting only a particular portfolio or class, only
shares of that portfolio or class are entitled to vote. All shares of the State
Bond Fund have equal voting rights.
Trustees and Directors. The Declaration of Trust of the Trust provides
that the term of office of each Trustee shall be for the lifetime of the Trust
or the earlier of his or her death, resignation, retirement, removal or mental
or physical incapacity. A Trustee of the Trust may be removed by: (i) written
instrument signed by at least two-thirds of the Trustees, (ii) a majority vote
of the Trustees if the Trustee has become mentally or physically incapacitated
or (iii) a vote of two-thirds of the outstanding shares at any special meeting
of shareholders. A vacancy on the Board may be filled by the Trustees remaining
in office. The Bylaws of the State Bond Fund provide that each Director holds
office from the time of his or her election until the next annual meeting of
shareholders or special meeting at which Directors are elected and until his or
her successor is duly elected and qualifies. No Director of the State Bond Fund
shall be qualified for election by the shareholders if he or she has attained
the age of 70. The Board of Directors of the State Bond Fund shall call a
meeting of shareholders for the purpose of voting upon the question of removal
of any Director or Directors when requested in writing to do so by the record
holders of not less than 10% of the outstanding shares. A Director of the State
Bond Fund may be removed, with or without cause, by the affirmative vote of a
majority of the votes entitled to be cast for the election of Directors, and
such shareholders may elect a qualified person as Director to replace the
Director so removed. In case of any vacancy on the Board of Directors, a
majority of the remaining Directors may elect a successor to hold office until
the next annual meeting of the shareholders or special meeting at which
Directors are elected and until his or her successor is duly elected and
qualifies. A meeting of shareholders will be required for the purpose of
electing additional Trustees or Directors whenever fewer than a majority of the
Trustees or Directors then in office were elected by shareholders.
Liability of Trustees/Directors and Officers. Under the Declaration of
Trust of the Trust, a Trustee or officer will be personally liable only for his
or her own willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his or her office. The
Declaration of Trust further provides that Trustees and officers will be
indemnified by the Trust to the fullest extent permitted by law against
liability and against all expenses of litigation unless the person's conduct is
determined to constitute willful misfeasance, bad faith, gross negligence or
reckless disregard of the person's duties. The Articles of Amendment and
Restatement of the State Bond Fund contain a provision eliminating liability of
directors and officers to the State Bond Fund or its shareholders to the fullest
extent permitted by Maryland law. Therefore, directors and officers of the
State Bond Fund will not be liable for monetary damages to the State Bond Fund
or its shareholders for breach of the duty of care. However, such elimination
of liability regarding a director's duty of care does not permit the elimination
or limitation of liability (1) to the extent that it is proved that the person
actually received an improper benefit or profit in money, property or services;
(2) to the extent that a judgment or other final adjudication adverse to the
person is entered in a proceeding based on a finding in the proceeding that the
person's action, or failure to act, was committed in bad faith or was the result
of active and deliberate dishonesty and was material to the cause of action
adjudicated in the proceeding; or (3) for any action or failure to act occurring
prior to February 18, 1988. In addition, due to the provisions of the 1940 Act,
shareholders would still have the right to pursue monetary claims against
directors or officers for acts involving willful malfeasance, bad faith, gross
negligence or reckless disregard of their duties as directors or officers.
Under the agreement in principle by and among Federated, ARM and ARM Capital,
Federated has agreed for a period of three (3) years following the Closing to
provide coverage under a directors and officers liability insurance policy for
the current Directors of the State Bond Fund.
Shareholder Liability. Under certain circumstances, shareholders of the
Federated Fund may be held personally liable as partners under Massachusetts law
for obligations of the Trust on behalf of the Federated Fund. To protect its
shareholders, the Trust has filed legal documents with the Commonwealth of
Massachusetts that expressly disclaim the liability of its shareholders for such
acts or obligations of the Trust. These documents require that notice of this
disclaimer be given in each agreement, obligation or instrument that the Trust
or its Trustees enter into or sign.
In the unlikely event a shareholder is held personally liable for the
Trust's obligations on behalf of the Federated Fund, the Trust is required by
the Declaration of Trust to use its property to protect or compensate the
shareholder. On request, the Trust will defend any claim made and pay any
judgment against a shareholder for any act or obligation of the Trust.
Therefore, financial loss resulting from liability as a shareholder will occur
only if the Trust itself cannot meet its obligations to indemnify shareholders
and pay judgments against them.
Termination or Liquidation. In the event of the termination or
liquidation of the Trust or any portfolio or class of the Trust or of the
termination or liquidation of the State Bond Fund, the shareholders of the
respective portfolio or class are entitled to receive, when and as declared by
the Trustees or the Directors, as the case may be, the excess of the assets
belonging to the respective portfolio or class over the liabilities belonging to
the respective portfolio or class. In either case, the assets belonging to the
portfolio or class will be distributed among the shareholders in proportion to
the number of shares of the respective portfolio or class held by them.
Capitalization
The following table sets forth the unaudited capitalization of the
Institutional Service Shares of the Federated Fund and the shares of the State
Bond Fund as of September 30, 1996 and on a pro forma combined basis as of that
date:
<TABLE>
<CAPTION>
Federated Fund
(Institutional State Bond Pro Forma
Service Shares) Fund Combined
<S> <C> <C> <C>
Net Assets............... $1,321,316,172 $2,837,773 $1,324,153,945
Net Asset Value Per Share $1.00 $1.00 $1.00
Shares Outstanding....... 1,321,316,172 2,837,773 1,324,153,945
</TABLE>
INFORMATION ABOUT THE FEDERATED FUND, THE TRUST
AND THE STATE BOND FUND
Automated Cash Management Trust, a portfolio of Money Market Obligations Trust
Information about the Trust and the Federated Fund is contained in the
Federated Fund's current Prospectus dated September 30, 1996, a copy of which is
included herewith and incorporated by reference herein. Additional information
about the Federated Fund is included in the Federated Fund's Annual Report to
Shareholders dated July 31, 1996, the Statement of Additional Information dated
September 30, 1996 and the Statement of Additional Information dated November
, 1996 (relating to this Prospectus/Proxy Statement), each of which is
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incorporated herein by reference. Copies of the Annual Report and Statements of
Additional Information, which have been filed with the Securities and Exchange
Commission (the "SEC"), may be obtained upon request and without charge by
contacting the Federated Fund at 1-800-341-7400 or by writing the Federated Fund
at Federated Investors Tower, Pittsburgh, PA 15222-3779. The Trust is subject
to the informational requirements of the Securities Act of 1933, as amended (the
`1933 Act''), the Securities Exchange Act of 1934, as amended (the "1934 Act")
and the 1940 Act and in accordance therewith files reports and other information
with the SEC. Reports, proxy and information statements, charter documents and
other information filed by the Trust or the Federated Fund can be obtained by
calling or writing the Federated Fund and can also be inspected and copied by
the public at the public reference facilities maintained by the SEC in
Washington, D.C. located at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549 and at certain of its regional offices located at Suite 1400, Northwestern
Atrium Center, 500 West Madison Street, Chicago, IL 60661 and 13th Floor, Seven
World Trade Center, New York, NY 10048. Copies of such material can be obtained
from the Public Reference Branch, Office of Consumer Affairs and Information
Services, SEC, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates.
This Prospectus/Proxy Statement, which constitutes part of a
Registration Statement filed by the Trust with the SEC under the 1933 Act, omits
certain of the information contained in the Registration Statement. Reference
is hereby made to the Registration Statement and to the exhibits thereto for
further information with respect to the Trust and the Federated Fund and the
shares offered hereby. Statements contained herein concerning the provisions of
documents are necessarily summaries of such documents, and each such statement
is qualified in its entirety by reference to the copy of the applicable document
filed with the SEC.
State Bond Cash Management Fund
Information about the State Bond Fund and State Bond Money Funds, Inc.
is contained in the State Bond Fund's current Prospectus dated December 1, 1995,
the Annual Report to Shareholders dated July 31, 1996, its Statement of
Additional Information dated December 1, 1995, and the Statement of Additional
Information dated November , 1996 (relating to this Prospectus/Proxy
--
Statement), each of which is incorporated herein by reference. Copies of such
Prospectus, Annual Report, and Statement(s) of Additional Information, which
have been filed with the SEC, may be obtained upon request and without charge
from the State Bond Fund by calling 1-800-328-4735 or by writing to the State
Bond Fund at 100 North Minnesota Street, P.O. Box 69, New Ulm, Minnesota 56073-
0069. The State Bond Fund is subject to the informational requirements of the
1933 Act, the 1934 Act and the 1940 Act and in accordance therewith files
reports and other information with the SEC. Reports, proxy and information
statements, charter documents and other information filed by State Bond Money
Funds, Inc. or its portfolio, the State Bond Fund, can be obtained by calling or
writing the State Bond Fund and can also be inspected at the public reference
facilities maintained by the SEC or obtained at prescribed rates at the
addresses listed in the previous section.
VOTING INFORMATION
This Prospectus/Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of the State Bond Fund of proxies for use
at the Special Meeting of Shareholders (the "Special Meeting") to be held at
4:15 p.m. on December , 1996 at: 100 North Minnesota Street, New Ulm,
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Minnesota 56073-0069, and at any adjournments thereof. The proxy confers
discretionary authority on the persons designated therein to vote on other
business not currently contemplated which may properly come before the Special
Meeting. A proxy, if properly executed, duly returned and not revoked, will be
voted in accordance with the specifications thereon; if no instructions are
given, such proxy will be voted in favor of the Plan. A shareholder may revoke
a proxy at any time prior to use by filing with the Secretary of the State Bond
Fund an instrument revoking the proxy, by submitting a proxy bearing a later
date or by attending and voting at the Special Meeting.
The cost of the solicitation, including the printing and mailing of
proxy materials, will be borne by Federated Management. In addition to
solicitations through the mails, proxies may be solicited by officers, employees
and agents of the State Bond Fund, Federated Management and their respective
affiliates at no additional cost to the State Bond Fund. Such solicitations may
be by telephone, telegraph or personal contact. Federated Management will
reimburse custodians, nominees and fiduciaries for the reasonable costs incurred
by them in connection with forwarding solicitation materials to the beneficial
owners of shares held of record by such persons.
Outstanding Shares and Voting Requirements
The Board of Directors of the State Bond Fund has fixed the close of
business on October 11, 1996 as the record date for the determination of
shareholders entitled to notice of and to vote at the Special Meeting and any
adjournment thereof. As of the record date, there were shares of the
-------
State Bond Fund outstanding. Each of the State Bond Fund's shares is entitled
to one vote and fractional shares have proportionate voting rights. [On the
record date, the Directors and officers of the State Bond Fund as a group owned
less than 1% of the outstanding shares of the State Bond Fund.] To the best
knowledge of ARM Capital, as of the record date, no person, except as set forth
in the table below, owned beneficially or of record 5% or more of the State Bond
Fund's outstanding shares.
Percent of
Shares Owned Percent of Outstanding
Name and Address of Beneficially Outstanding Shares of the
Beneficial Owner Shares Federated Fund
Following
Reorganization
As of the record date, there were Institutional Service and
--------
Cash II Shares of the Federated Fund outstanding. On the record date, the
- ----
Trustees and officers of the Federated Fund as a group owned less than 1% of the
outstanding Institutional Service and Cash II Shares of the Federated Fund
outstanding. To the best knowledge of Federated Management, as of the record
date, no person, except as set forth in the table below, owned beneficially or
of record 5% or more of the Federated Fund's outstanding Institutional Service
or Cash II Shares.
<TABLE>
<S> <C> <C> <C> <C>
Percent of
Outstanding
Shares of the
Federated Fund
Institutional Name and Address of Shares Owned Percent of Following
Service Shares Beneficial Owner Beneficially Outstanding Shares Reorganization
</TABLE>
Cash II Name and Address of Shares Owned Percent of
Shares Beneficial Owner Beneficially Outstanding Shares
Approval of the Plan requires the affirmative vote of a majority of the
outstanding shares of the State Bond Fund. The votes of shareholders of the
Federated Fund are not being solicited since their approval is not required in
order to effect the Reorganization.
One-third of the issued and outstanding shares of the State Bond Fund,
represented in person or by proxy, will be required to constitute a quorum at
the Special Meeting for the purpose of voting on the proposed Reorganization.
For purposes of determining the presence of a quorum, shares represented by
abstentions and "broker non-votes" will be counted as present, but not as votes
cast, at the Special Meeting. Because approval of the Reorganization requires
the approval of a majority of the outstanding shares of the State Bond Fund,
abstentions and "broker non-votes" will have the same effect as if they were
votes against the Reorganization.
Dissenter's Right of Appraisal
Shareholders of the State Bond Fund objecting to the Reorganization have
no appraisal rights under the State Bond Fund's Articles of Incorporation or
Maryland law. Under the Plan, if approved by State Bond Fund shareholders, each
shareholder will become the owner of Institutional Service Shares of the
Federated Fund having a total net asset value equal to the total net asset value
of his or her holdings in the State Bond Fund at the Closing Date.
OTHER MATTERS AND DISCRETION OF PERSONS NAMED IN THE PROXY
Management of the State Bond Fund knows of no other matters that may
properly be, or which are likely to be, brought before the meeting. However, if
any other business shall properly come before the meeting, the persons named in
the proxy intend to vote thereon in accordance with their best judgment.
If at the time any session of the Special Meeting is called to order, a
quorum is not present in person or by proxy, the persons named as proxies may
vote those proxies which have been received to adjourn the Special 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 Special Meeting to permit
further solicitation of proxies with respect to any such proposal. All such
adjournments will require the affirmative vote of a majority of the shares
present in person or by proxy at the session of the Special Meeting to be
adjourned. The persons named as proxies will vote those proxies which they are
entitled to vote in favor of the proposal, in favor of such an adjournment, and
will vote those proxies required to be voted against the proposal, against any
such adjournment.
Whether or not shareholders expect to attend the meeting, all
shareholders are urged to sign, fill in and return the enclosed proxy form
promptly.
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated September 23, 1996 (the
"Agreement"), between MONEY MARKET OBLIGATIONS TRUST, a Massachusetts business
trust (the "Trust"), on behalf of its portfolio AUTOMATED CASH MANAGEMENT TRUST
(hereinafter called the "Acquiring Fund"), and STATE BOND MONEY FUNDS, INC., a
Maryland corporation (hereinafter called the "Corporation") on behalf of its
portfolio STATE BOND CASH MANAGEMENT FUND (hereinafter called the "Acquired
Fund").
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section 368(a)(1)(C) of the
United States Internal Revenue Code of 1986, as amended (the "Code"). The
reorganization (the "Reorganization") will consist of the transfer of all of the
net assets of the Acquired Fund in exchange solely for Institutional Service
Shares of the Acquiring Fund (the "Acquiring Fund Shares") and the distribution,
after the Closing Date (as hereinafter defined), of the Acquiring Fund Shares to
the shareholders of the Acquired Fund in liquidation of the Acquired Fund as
provided herein, all upon the terms and conditions hereinafter set forth in this
Agreement.
WHEREAS, the Corporation and the Trust are registered open-end
management investment companies and the Acquired Fund owns securities in which
the Acquiring Fund is permitted to invest;
WHEREAS, both the Acquired Fund and the Acquiring Fund are authorized to
issue shares of common stock or shares of beneficial interest, as the case may
be;
WHEREAS, the Board of Trustees, including a majority of the trustees who
are not "interested persons" (as defined under the Investment Company Act of
1940, as amended (the "1940 Act")), of the Trust has determined that the
exchange of all of the net assets of the Acquired Fund for Acquiring Fund Shares
is in the best interests of the Acquiring Fund shareholders and that the
interests of the existing shareholders of the Acquiring Fund would not be
diluted as a result of this transaction; and
WHEREAS, the Board of Directors, including a majority of the directors
who are not "interested persons" (as defined under the 1940 Act), of the
Corporation has determined that the exchange of all of the net assets of the
Acquired Fund for Acquiring Fund Shares is in the best interests of the Acquired
Fund shareholders;
NOW THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties agree as follows:
1.TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR THE ACQUIRING
FUND SHARES AND LIQUIDATION OF THE ACQUIRED FUND.
1.1 Subject to the terms and conditions contained herein, the Acquired
Fund agrees to assign, transfer and convey to the Acquiring Fund all of the net
assets of the Acquired Fund, including all securities and cash, other than cash
in an amount necessary to pay any unpaid dividends and distributions as provided
in paragraph 1.5, beneficially owned by the Acquired Fund, and the Acquiring
Fund agrees in exchange therefor to deliver to the Acquired Fund the number of
Acquiring Fund Shares, including fractional Acquiring Fund Shares, determined as
set forth in paragraph 2.3. Such transaction shall take place at the closing
(the "Closing") on the closing date (the "Closing Date") provided for in
paragraph 3.1. In lieu of delivering certificates for the Acquiring Fund
Shares, the Acquiring Fund shall credit the Acquiring Fund Shares to the
Acquired Fund's account, for the benefit of its shareholders, on the stock
record books of the Acquiring Fund and shall deliver a confirmation thereof to
the Acquired Fund.
1.2 The Acquired Fund will discharge or make provision for the discharge
of all of its liabilities and obligations prior to or on the Closing Date.
1.3 Delivery of the assets of the Acquired Fund to be transferred shall be
made on the Closing Date and shall be delivered to State Street Bank and Trust
Company (hereinafter called "State Street"), Boston, Massachusetts, the
Acquiring Fund's custodian (the "Custodian"), for the account of the Acquiring
Fund, together with proper instructions and all necessary documents to transfer
to the account of the Acquiring Fund, free and clear of all liens, encumbrances,
rights, restrictions and claims created by the Acquired Fund. All cash
delivered shall be in the form of immediately available funds payable to the
order of the Custodian for the account of the Acquiring Fund.
1.4 The Acquired Fund will pay or cause to be paid to the Acquiring Fund
any dividends or interest received on or after the Closing Date with respect to
assets transferred to the Acquiring Fund thereunder. The Acquired Fund will
transfer to the Acquiring Fund any distributions, rights or other assets
received by the Acquired Fund after the Closing Date as distributions on or with
respect to the securities transferred. Such assets shall be deemed included in
assets transferred to the Acquiring Fund on the Closing Date and shall not be
separately valued.
1.5 As soon after the Closing Date as is conveniently practicable, the
Acquired Fund will liquidate and distribute pro rata to the Acquired Fund's
shareholders of record, determined as of the close of business on the Closing
Date (the "Acquired Fund Shareholders"), the Acquiring Fund Shares received by
the Acquired Fund pursuant to paragraph 1.1. In addition, each Acquired Fund
Shareholder shall have the right to receive any unpaid dividends or other
distributions which were declared before the Valuation Date (as hereinafter
defined) with respect to the shares of the Acquired Fund that are held by the
shareholder on the Valuation Date. Such liquidation and distribution will be
accomplished by the transfer of the Acquiring Fund Shares then credited to the
account of the Acquired Fund on the books of the Acquiring Fund to open accounts
on the share record books of the Acquiring Fund in the names of the Acquired
Fund Shareholders, and representing the respective pro rata number of the
Acquiring Fund Shares due such shareholders, based on their ownership of shares
of the Acquired Fund on the Closing Date. All issued and outstanding Shares of
the Acquired Fund will simultaneously be canceled on the books of the Acquired
Fund. Share certificates representing interests in the Acquired Fund will
represent a number of Acquiring Fund Shares, after the Closing Date as
determined in accordance with Section 2.3. The Acquiring Fund shall not issue
certificates representing the Acquiring Fund Shares in connection with such
exchange.
1.6 Ownership of Acquiring Fund Shares will be shown on the books of the
Acquiring Fund's transfer agent. Shares of the Acquiring Fund will be issued in
the manner described in the Acquiring Fund's current prospectus and statement of
additional information.
1.7 Any transfer taxes payable upon issuance of the Acquiring Fund Shares
in a name other than the registered holder of the Acquired Fund shares on the
books of the Acquired Fund as of that time shall, as a condition of such
issuance and transfer, be paid by the person to whom such Acquiring Fund Shares
are to be issued and transferred.
1.8 Any reporting responsibility of the Acquired Fund is and shall remain
the responsibility of the Corporation up to and including the Closing Date and
such later dates, with respect to dissolution and deregistration of the
Corporation, on which the Corporation is dissolved and deregistered.
1.9 The Corporation shall be deregistered as an investment company under
the 1940 Act and dissolved as a Maryland corporation as promptly as practicable
following the Closing Date and the making of all distributions pursuant to
paragraph 1.5.
2.VALUATION.
2.1 The value of the Acquired Fund's net assets to be acquired by the
Acquiring Fund hereunder shall be the value of such assets computed as of the
close of the New York Stock Exchange (normally 4:00 p.m. Eastern time) on the
Closing Date (such time and date being herein called the "Valuation Date"),
using the valuation procedures set forth in the Acquiring Fund's then-current
prospectus or statement of additional information.
2.2 The net asset value of each Acquiring Fund Share shall be the net
asset value per share computed as of the close of the New York Stock Exchange
(normally 4:00 p.m. Eastern time) on the Valuation Date, using the valuation
procedures set forth in the Acquiring Fund's then-current prospectus or
statement of additional information.
2.3 The number of the Acquiring Fund Shares to be issued (including
fractional shares, if any) in exchange for the Acquired Fund's net assets shall
be determined by dividing the value of the net assets of the Acquired Fund
determined using the same valuation procedures referred to in paragraph 2.1, by
the net asset value of one Acquiring Fund Share determined in accordance with
paragraph 2.2.
2.4 All computations of value shall be made in accordance with the regular
practices of the Acquiring Fund.
3.CLOSING AND CLOSING DATE.
3.1 The Closing Date shall be December , 1996 or such later date as the
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parties may mutually agree. All acts taking place at the Closing Date shall be
deemed to take place simultaneously as of the close of business on the Closing
Date unless otherwise provided. The Closing shall be held at 4:00 p.m. (Eastern
time) at the offices of the Acquiring Fund, Federated Investors Tower,
Pittsburgh, PA 15222-3779, or such other time and/or place as the parties may
mutually agree.
3.2 If on the Valuation Date (a) the primary trading market for portfolio
securities of the Acquiring Fund or the Acquired Fund shall be closed to trading
or trading thereon shall be restricted; or (b) trading or the reporting of
trading shall be disrupted so that accurate appraisal of the value of the net
assets of the Acquiring Fund or the Acquired Fund is impracticable, the Closing
Date shall be postponed until the first business day after the day when trading
shall have been fully resumed and reporting shall have been restored.
3.3 ARM Transfer Agency, Inc., as transfer agent for the Acquired Fund,
shall deliver at the Closing a certificate of an authorized officer stating that
its records contain the names and addresses of the Acquired Fund Shareholders
and the number and percentage ownership of outstanding shares owned by each such
shareholder immediately prior to the Closing. The Acquiring Fund shall issue
and deliver a confirmation evidencing the Acquiring Fund Shares to be credited
on the Closing Date to the Secretary of the Acquired Fund, or provide evidence
satisfactory to the Acquired Fund that such Acquiring Fund Shares have been
credited to the Acquired Fund's account on the books of the Acquiring Fund. At
the Closing, each party shall deliver to the other such bills of sale, checks,
assignments, assumption agreements, share certificates, if any, receipts or
other documents as such other party or its counsel may reasonably request.
4.REPRESENTATIONS AND WARRANTIES.
4.1 The Corporation represents and warrants to the Trust as follows:
(a) The Corporation is a corporation duly organized, validly
existing and in good standing under the laws of the State of Maryland and has
power to own all of its properties and assets and to carry out this Agreement.
(b) The Corporation 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.
(c) The Corporation is not, and the execution, delivery and
performance of this Agreement will not result, in material violation of the
Corporation's Articles of Incorporation or Bylaws or of any agreement,
indenture, instrument, contract, lease or other undertaking to which the
Acquired Fund is a party or by which it is bound.
(d) The Acquired Fund has no material contracts or other
commitments outstanding (other than this Agreement) which will result in
liability to it after the Closing Date.
(e) No litigation or administrative proceeding or investigation
of or before any court or governmental body is currently pending or to its
knowledge threatened against the Acquired Fund or any of its properties or
assets which, if adversely determined, would materially and adversely affect its
financial condition or the conduct of its business. The Acquired Fund knows of
no facts which might form the basis for the institution of such proceedings, and
is not a party to or subject to the provisions of any order, decree or judgment
of any court or governmental body which materially and adversely affects its
business or its ability to consummate the transactions herein contemplated.
(f) The current prospectus and statement of additional
information of the Acquired Fund conform in all material respects to the
applicable requirements of the Securities Act of 1933, as amended (the "1933
Act"), and the 1940 Act and the rules and regulations of the Securities and
Exchange Commission (the "Commission") thereunder and do not include any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(g) The Statement of Assets and Liabilities of the Acquired Fund
at July 31, 1995 and 1996, have been audited by Ernst & Young LLP, independent
auditors, and have been prepared in accordance with generally accepted
accounting principles, consistently applied, and such statements (copies of
which have been furnished to the Acquiring Fund) fairly reflect the financial
condition of the Acquired Fund as of such dates, and there are no known
contingent liabilities of the Acquired Fund as of such dates not disclosed
therein.
(h) Since July 31, 1996, there has not been any material adverse
change in the Acquired Fund's financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of business, or any
incurrence by the Acquired Fund of indebtedness maturing more than one year from
the date such indebtedness was incurred, except as otherwise disclosed to and
accepted by the Acquiring Fund.
(i) At the Closing Date, all Federal and other tax returns and
reports of the Acquired Fund required by law to have been filed by such date
shall have been filed or an appropriate extension obtained, and all Federal and
other taxes shall have been paid so far as due, or provision shall have been
made for the payment thereof or contest in good faith, and to the best of the
Acquired Fund's knowledge no such return is currently under audit and no
assessment has been asserted with respect to such returns.
(j) For each fiscal year of its operation, subject to applicable
statute of limitation periods, the Acquired Fund has met the requirements of
Subchapter M of the Code for qualification and treatment as a regulated
investment company.
(k) All issued and outstanding shares of the Acquired Fund are,
and at the Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable. All of the issued and outstanding shares of the
Acquired Fund will, at the time of the Closing, be held by the persons and in
the amounts set forth in the records of the transfer agent as provided in
paragraph 3.3. The Acquired Fund does not have outstanding any options,
warrants or other rights to subscribe for or purchase any of the Acquired Fund
shares, nor is there outstanding any security convertible into any of the
Acquired Fund shares.
(l) On the Closing Date, the Acquired Fund will have full right,
power and authority to sell, assign, transfer and deliver the assets to be
transferred by it hereunder.
(m) The execution, delivery and performance of this Agreement
will have been duly authorized prior to the Closing Date by all necessary action
on the part of the Corporation and, subject to the approval of the Acquired Fund
Shareholders, this Agreement constitutes the valid and legally binding
obligation of the Acquired Fund enforceable in accordance with its terms,
subject to the effect of bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance and other similar laws relating to or affecting creditors'
rights generally and court decisions with respect thereto, and to general
principles of equity and the discretion of the court (regardless of whether the
enforceability is considered in a proceeding in equity or at law).
(n) The prospectus/proxy statement of the Acquired Fund (the
"Prospectus/Proxy Statement") to be included in the Registration Statement
referred to in paragraph 5.5 (only insofar as it relates to the Acquired Fund)
will, on the effective date of the Registration Statement and on the Closing
Date, not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which such statements were made,
not misleading.
4.2 The Trust represents and warrants to the Corporation 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 the power to carry on its business as it is now being
conducted and to carry out this Agreement.
(b) The Trust is registered under the 1940 Act as an open-end,
diversified, management investment company, and such registration has not been
revoked or rescinded and is in full force and effect.
(c) The Acquiring Fund is not, and the execution, delivery and
performance of this Agreement will not result, in material violation of the
Trust's Declaration of Trust or Bylaws or of any agreement, indenture,
instrument, contract, lease or other undertaking to which the Acquiring Fund is
a party or by which it is bound.
(d) No litigation or administrative proceeding or investigation
of or before any court or governmental body is currently pending or to its
knowledge threatened against the Acquiring Fund or any of its properties or
assets which, if adversely determined, would materially and adversely affect its
financial condition or the conduct of its business. The Acquiring Fund knows of
no facts which might form the basis for the institution of such proceedings, and
is not a party to or subject to the provisions of any order, decree or judgment
of any court or governmental body which materially and adversely affects its
business or its ability to consummate the transactions contemplated herein.
(e) The current prospectus and statement of additional
information of the Acquiring Fund conform in all material respects to the
applicable requirements of the 1933 Act and the 1940 Act and the rules and
regulations of the Commission thereunder and do not include any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(f) The Statement of Assets and Liabilities of the Acquiring
Fund at July 31, 1995 and 1996, have been audited by Arthur Andersen LLP,
independent auditors, and have been prepared in accordance with generally
accepted accounting principles, and such statements (copies of which have been
furnished to the Acquired Fund) fairly reflect the financial condition of the
Acquiring Fund as of such dates, and there are no known contingent liabilities
of the Acquiring Fund as of such dates not disclosed therein.
(g) Since July 31, 1996, there has not been any material adverse
change in the Acquiring Fund's financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of business, or any
incurrence by the Acquiring Fund of indebtedness maturing more than one year
from the date such indebtedness was incurred, except as disclosed to and
accepted by the Acquired Fund.
(h) At the Closing Date, all Federal and other tax returns and
reports of the Acquiring Fund required by law to have been filed or an
appropriate extension obtained, by such date shall have been filed, and all
Federal and other taxes shall have been paid so far as due, or provision shall
have been made for the payment thereof or contest in good faith, and to the best
of the Acquiring Fund's knowledge no such return is currently under audit and no
assessment has been asserted with respect to such returns.
(i) For each fiscal year of its operation, subject to applicable
statute of limitation periods, the Acquiring Fund has met the requirements of
Subchapter M of the Code for qualification and treatment as a regulated
investment company.
(j) All issued and outstanding Acquiring Fund Shares are, and at
the Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable. The Acquiring Fund does not have outstanding any options,
warrants or other rights to subscribe for or purchase any of the Acquiring Fund
Shares, nor is there outstanding any security convertible into any Acquiring
Fund Shares.
(k) The execution, delivery and performance of this Agreement
has been duly authorized by all necessary action on the part of the Trust, and
this Agreement constitutes the valid and legally binding obligation of the
Acquiring Fund enforceable in accordance with its terms, subject to the effect
of bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and
other similar laws relating to or affecting creditors' rights generally and
court decisions with respect thereto, and to general principles of equity and
the discretion of the court (regardless of whether the enforceability is
considered in a proceeding in equity or at law).
(l) The Prospectus/Proxy Statement to be included in the
Registration Statement (only insofar as it relates to the Acquiring Fund) will,
on the effective date of the Registration Statement and on the Closing Date, not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which such statements were made, not
misleading.
5.COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND.
5.1 The Acquiring Fund and the Acquired Fund each will operate its
business in the ordinary course between the date hereof and the Closing Date, it
being understood that such ordinary course of business will include customary
dividends and distributions.
5.2 The Corporation will call a meeting of the Acquired Fund Shareholders
to consider and act upon this Agreement and to take all other action necessary
to obtain approval of the transactions contemplated herein.
5.3 Subject to the provisions of this Agreement, the Acquiring Fund and
the Acquired Fund will each take, or cause to be taken, all action, and do or
cause to be done, all things reasonably necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement.
5.4 As promptly as practicable, but in any case within sixty days after
the Closing Date, the Acquired Fund shall furnish the Acquiring Fund, in such
form as is reasonably satisfactory to the Acquiring Fund, a statement of the
earnings and profits of the Acquired Fund for Federal income tax purposes which
will be carried over to the Acquiring Fund as a result of Section 381 of the
Code and which will be certified by the Corporation's President and its
Treasurer.
5.5 The Acquired Fund will provide the Acquiring Fund with information
reasonably necessary for the preparation of the Prospectus/Proxy Statement,
referred to in paragraph 4.1(m), all to be included in a Registration Statement
on Form N-14 of the Acquiring Fund (the "Registration Statement"), in compliance
with the 1933 Act, the Securities Exchange Act of 1934, as amended, and the 1940
Act in connection with the meeting of the Acquired Fund Shareholders to consider
approval of this Agreement and the transactions contemplated herein.
5.6 The Acquiring Fund agrees to use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act and such of
the state Blue Sky or securities laws as it may deem appropriate in order to
continue its operations after the Closing Date.
5.7 Prior to the Valuation Date, the Acquired Fund shall have declared a
dividend or dividends, with a record date and ex-dividend date prior to the
Valuation Date, which, together with all previous dividends, shall have the
effect of distributing to its shareholders all of its investment company taxable
income, if any, plus the excess of its interest income, if any, excludable from
gross income under Code section 103(a) over its deductions disallowed under Code
sections 265 and 171(a)(2) for the taxable periods or years ended on or before
July 31, 1996 and for the period from said date to and including the Closing
Date (computed without regard to any deduction for dividends paid), and all of
its net capital gain, if any, realized in taxable periods or years ended on or
before July 31, 1996 and in the period from said date to and including the
Closing Date.
6.CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND.
The obligations of the Acquiring Fund to complete the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquired Fund of all the obligations to be performed by it hereunder on or
before the Closing Date and, in addition thereto, the following conditions:
6.1 All representations and warranties of the Corporation contained in
this Agreement shall be true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated by
this Agreement, as of the Closing Date with the same force and effect as if made
on and as of the Closing Date.
6.2 The Acquired Fund shall have delivered to the Acquiring Fund a
statement of the Acquired Fund's assets, together with a list of the Acquired
Fund's portfolio securities showing the tax costs of such securities by lot and
the holding periods of such securities, as of the Closing Date, certified by the
Treasurer of the Acquired Fund.
6.3 The Acquired Fund shall have delivered to the Acquiring Fund on the
Closing Date a certificate executed in its name by its President or Vice
President and its Treasurer, in form and substance satisfactory to the Acquiring
Fund, to the effect that the representations and warranties of the Corporation
made in this Agreement are true and correct in all material respects at and as
of the Closing Date, except as they may be affected by the transactions
contemplated by this Agreement, and as to such other matters as the Acquiring
Fund shall reasonably request.
7.CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND.
The obligations of the Acquired Fund to consummate the transactions
provided herein shall be subject, at its election, to the performance by the
Acquiring Fund of all the obligations to be performed by it hereunder on or
before the Closing Date and, in addition thereto, the following conditions:
7.1 All representations and warranties of the Trust contained in this
Agreement shall be true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated by
this Agreement, as of the Closing Date with the same force and effect as if made
on and as of the Closing Date.
7.2 The Acquiring Fund shall have delivered to the Acquired Fund on the
Closing Date a certificate executed in its name by its President or Vice
President and its Treasurer, in form and substance satisfactory to the Acquired
Fund, to the effect that the representations and warranties of the Trust made in
this Agreement are true and correct in all material respects at and as of the
Closing Date, except as they may be affected by the transactions contemplated by
this Agreement, and as to such other matters as the Acquired Fund shall
reasonably request.
7.3 There shall not have been any material adverse change in the Acquiring
Fund's financial condition, assets, liabilities or business since the date
hereof other than changes occurring in the ordinary course of business, or any
incurrence by the Acquiring Fund of any indebtedness, except as otherwise
disclosed to and accepted by the Acquired Fund.
8.FURTHER CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE ACQUIRING FUND
AND THE ACQUIRED FUND.
If any of the conditions set forth below do not exist on or before the
Closing Date with respect to the Acquired Fund or the Acquiring Fund, either
party to this Agreement shall, at its option, not be required to consummate the
transactions contemplated by this Agreement.
8.1 The Agreement and the transactions contemplated herein shall have been
approved by the requisite vote of the holders of the outstanding shares of the
Acquired Fund in accordance with the provisions of the Corporation's Articles of
Incorporation and the 1940 Act.
8.2 On the Closing Date no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein.
8.3 All consents of other parties and all other consents, orders and
permits of Federal, state and local regulatory authorities (including those of
the Commission and of state Blue Sky and securities authorities) deemed
necessary by the Acquiring Fund or the Acquired Fund to permit consummation, in
all material respects, of the transactions contemplated hereby shall have been
obtained, except where failure to obtain any such consent, order or permit would
not involve a risk of a material adverse effect on the assets or properties of
the Acquiring Fund or the Acquired Fund, provided that either party hereto may
for itself waive any of such conditions.
8.4 The Registration Statement shall have become effective under the 1933
Act and no stop orders suspending the effectiveness thereof shall have been
issued and, to the best knowledge of the parties hereto, no investigation or
proceeding for that purpose shall have been instituted or be pending, threatened
or contemplated under the 1933 Act.
8.5 The Trust and the Corporation shall have received an opinion of
Dickstein Shapiro Morin & Oshinsky LLP substantially to the effect that for
Federal income tax purposes:
(a) The transfer of all of the Acquired Fund net assets in
exchange for the Acquiring Fund Shares and the distribution of the Acquiring
Fund Shares to the Acquired Fund Shareholders in liquidation of the Acquired
Fund will constitute a "reorganization" within the meaning of Section
368(a)(1)(C) of the Code; (b) No gain or loss will be recognized by the
Acquiring Fund upon the receipt of the assets of the Acquired Fund solely in
exchange for the Acquiring Fund Shares; (c) No gain or loss will be recognized
by the Acquired Fund upon the transfer of the Acquired Fund assets to the
Acquiring Fund in exchange for the Acquiring Fund Shares or upon the
distribution (whether actual or constructive) of the Acquiring Fund Shares to
Acquired Fund Shareholders in exchange for their shares of the Acquired Fund;
(d) No gain or loss will be recognized by the Acquired Fund Shareholders upon
the exchange of their Acquired Fund shares for the Acquiring Fund Shares;
(e) The tax basis of the Acquired Fund assets acquired by the Acquiring Fund
will be the same as the tax basis of such assets to the Acquired Fund
immediately prior to the Reorganization; (f) The tax basis of the Acquiring Fund
Shares received by each of the Acquired Fund Shareholders pursuant to the
Reorganization will be the same as the tax basis of the Acquired Fund shares
held by such shareholder immediately prior to the Reorganization; (g) The
holding period of the assets of the Acquired Fund in the hands of the Acquiring
Fund will include the period during which those assets were held by the Acquired
Fund; and (h) The holding period of the Acquiring Fund Shares to be received by
each Acquired Fund Shareholder will include the period during which the Acquired
Fund shares exchanged therefor were held by such shareholder (provided the
Acquired Fund shares were held as capital assets on the date of the
Reorganization).
9.TERMINATION OF AGREEMENT.
9.1 This Agreement and the transactions contemplated hereby may be
terminated and abandoned by resolution of the Board of Directors of the
Corporation or the Board of Trustees of the Trust at any time prior to the
Closing Date (and notwithstanding any vote of the Acquired Fund Shareholders) if
circumstances should develop that, in the opinion of either of the parties'
Board, make proceeding with the Agreement inadvisable.
9.2 If this Agreement is terminated and the exchange contemplated hereby
is abandoned pursuant to the provisions of this Section 9, this Agreement shall
become void and have no effect, without any liability on the part of any party
hereto or the directors, trustees or officers of the Corporation or the Trust or
the shareholders of the Acquiring Fund or of the Acquired Fund, in respect of
this Agreement.
10. WAIVER.
At any time prior to the Closing Date, any of the foregoing conditions
may be waived by the Board of Trustees of the Trust or the Board of Directors of
the Corporation, if, in the judgment of either, such waiver will not have a
material adverse effect on the benefits intended under this Agreement to the
shareholders of the Acquiring Fund or of the Acquired Fund, as the case may be.
11. MISCELLANEOUS.
11.1 None of the representations and warranties included or provided for
herein shall survive consummation of the transactions contemplated hereby.
11.2 This Agreement contains the entire agreement and understanding between
the parties hereto with respect to the subject matter hereof, and merges and
supersedes all prior discussions, agreements, and understandings of every kind
and nature between them relating to the subject matter hereof. Neither party
shall be bound by any condition, definition, warranty or representation, other
than as set forth or provided in this Agreement or as may be set forth in a
later writing signed by the party to be bound thereby.
11.3 This Agreement shall be governed and construed in accordance with the
internal laws of the State of New York, without giving effect to principles of
conflicts of laws.
11.4 This Agreement may be executed in any number of counterparts, each of
which, when executed and delivered, shall be deemed to be an original.
11.5 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
11.6 The Acquired Fund is hereby expressly put on notice of the limitation
of liability as set forth in Article XI of the Declaration of Trust of the Trust
and agrees that the obligations assumed by the Acquiring Fund pursuant to this
Agreement shall be limited in any case to the Acquiring Fund and its assets and
the Acquired Fund shall not seek satisfaction of any such obligation from the
shareholders of the Acquiring Fund, the trustees, officers, employees or agents
of the Trust or any of them.
11.7 An agreement has been entered into under which Federated
Management will assume substantially all of the expenses of the reorganization
including registration fees, transfer taxes (if any), the fees of banks and
transfer agents and the costs of preparing, printing, copying and mailing proxy
solicitation materials to the Acquired Fund's shareholders and the costs of
holding the Special Meeting of Shareholders. ARM Financial Group, Inc. will
assume the legal fees of the Acquired Fund. The accountants' fees of the
Acquired Fund will be borne equally by Federated Management and ARM Financial
Group, Inc.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Acquired Fund and the Acquiring Fund have each
caused this Agreement and Plan of Reorganization to be executed and attested on
its behalf by its duly authorized representatives as of the date first above
written.
Acquired Fund:
STATE BOND MONEY FUNDS, INC.,
on behalf of its portfolio,
STATE BOND CASH MANAGEMENT FUND
Attest:
By: /s/ Kevin L. Howard
Kevin L. Howard
Vice President and Secretary
/s/ Sheri Bean
Sheri Bean
Assistant Secretary
Acquiring Fund:
MONEY MARKET OBLIGATIONS TRUST
on behalf of its portfolio,
AUTOMATED CASH MANAGEMENT
TRUST
Attest:
By: /s/ J. Christopher Donahue
J. Christopher Donahue
President
/s/ S. Elliot Cohan
S. Elliott Cohan
Assistant Secretary
STATEMENT OF ADDITIONAL INFORMATION
NOVEMBER , 1996
---
Acquisition of the Assets of
STATE BOND CASH MANAGEMENT FUND,
a Portfolio of
STATE BOND MONEY FUNDS, INC.
100 North Minnesota Street
P.O. Box 69
New Ulm, Minnesota 56073-0069
Telephone Number: 1-800-328-4735
By and in exchange for Institutional Service Shares of
AUTOMATED CASH MANAGEMENT TRUST,
a Portfolio of
MONEY MARKET OBLIGATIONS TRUST
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Telephone Number: 1-800-341-7400
This Statement of Additional Information dated November , 1996
---
is not a prospectus. A Prospectus/Proxy Statement dated November , 1996
---
related to the above-referenced matter may be obtained from Money Market
Obligations Trust, Federated Investors Tower, Pittsburgh, Pennsylvania
15222-3779. This Statement of Additional Information should be read in
conjunction with such Prospectus/Proxy Statement.
TABLE OF CONTENTS
1. Statement of Additional Information of Automated Cash Management
Trust, a portfolio of Money Market Obligations Trust, dated September
30, 1996.
2. Statement of Additional Information of State Bond Cash Management
Fund, a portfolio of State Bond Money Funds, Inc., dated December 1,
1995.
3. Financial Statements of Automated Cash Management Trust, a portfolio
of Money Market Obligations Trust, dated July 31, 1996.
4. Financial Statements of State Bond Cash Management Fund, a portfolio
of State Bond Money Funds, Inc., dated July 31, 1996.
The Statement of Additional Information of Automated Cash
Management Trust (the "Federated Fund"), a portfolio of Money Market
Obligations Trust (the "Trust"), dated September 30, 1996, is incorporated
herein by reference to Post-Effective Amendment No. 19 to the Trust's
Registration Statement on Form N-1A (File Nos. 33-31602 and 811-5950) which
was filed with the Securities and Exchange Commission on or about
September 19, 1996. A copy may be obtained, upon request and without
charge, from the Federated Fund at Federated Investors Tower, Pittsburgh,
PA 15222-3279; telephone number: 1-800-341-7400.
The Statement of Additional Information of State Bond Cash
Management Fund (the "State Bond Fund"), a portfolio of State Bond Money
Funds, Inc. (the "Corporation"), dated December 1, 1995, is incorporated
herein by reference to Post-Effective Amendment No. 14 to the Corporation's
Registration Statement on Form N-1A (File Nos. 2-74561 and 811-3299) which
was filed with the Securities and Exchange Commission on or about
September 29, 1995. A copy may be obtained, upon request and without
charge, from the State Bond Fund at 100 North Minnesota Street, P.O. Box
69, New Ulm, Minnesota 56073-0069; telephone number: 1-800-328-4735.
The audited financial statements of the Federated Fund, dated July
31, 1996, are incorporated herein by reference to the Federated Fund's
Annual Report to Shareholders dated July 31, 1996 which was filed with the
Securities and Exchange Commission. A copy may be obtained, upon request
and without charge, from the Federated Fund at Federated Investors Tower,
Pittsburgh, PA 15222-3279; telephone number: 1-800-341-7400.
The audited financial statements of the State Bond Fund, dated July
31, 1996, are incorporated herein by reference to the State Bond Fund's
Annual Report to Shareholders dated July 31, 1996, which was filed with the
Securities and Exchange Commission. A copy may be obtained, upon request
and without charge, from the State Bond Fund at 100 North Minnesota Street,
P.O. Box 69, New Ulm, Minnesota 56073-0069; telephone number 1-800-328-
4735.
Pro forma financial statements are not included herein as the total
net assets of the State Bond Fund do not exceed 1% of the total assets of
the Federated Fund. At September 30, 1996, the total net assets of the
State Bond Fund were $2,837,773 and the total net assets of the Federated
Fund were $1,321,316,472.
STATE BOND CASH MANAGEMENT FUND,
a Portfolio of
STATE BOND MONEY FUNDS, INC.,
SPECIAL MEETING OF SHAREHOLDERS
December , 1996
==
STATE BOND CASH MANAGEMENT FUND,
a Portfolio of
STATE BOND MONEY FUNDS, INC.
CUSIP NO. 856571104
The undersigned shareholder(s) of State Bond Cash Management Fund, a
portfolio of State Bond Money Funds, Inc. (the `State Bond Fund''),
hereby appoint(s) Kevin L. Howard, Keith O. Martens and Dale C.
Bauman, or any of them true and lawful proxies, with power of
substitution of each, to vote all shares of the State Bond Fund which
the undersigned is entitled to vote, at the Special Meeting of
Shareholders to be held on December , 1996, at 100 North Minnesota
--
Street, New Ulm, Minnesota 56073-0069, at 4:15 p.m. (local time) and
at any adjournment thereof.
Discretionary authority is hereby conferred as to all other matters as may
properly come before the Special Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The proxies
named will vote the shares represented by this proxy in accordance
with the choice made on this ballot. IF NO CHOICE IS INDICATED, THIS
PROXY WILL BE VOTED AFFIRMATIVELY ON THAT MATTER.
PROPOSAL
TO APPROVE OR DISAPPROVE AN AGREEMENT AND PLAN OF REORGANIZATION BETWEEN
THE STATE BOND FUND AND MONEY MARKET OBLIGATIONS TRUST, ON BEHALF OF
AUTOMATED CASH MANAGEMENT TRUST.
PLEASE RETURN BOTTOM PORTION WITH YOUR VOTE IN THE ENCLOSED ENVELOPE AND
RETAIN THE TOP PORTION.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS X
KEEP THIS PORTION FOR YOUR RECORDS.
DETACH AND RETURN THIS PORTION ONLY.
STATE BOND CASH MANAGEMENT FUND,
a portfolio of State Bond Money
Funds, Inc.
RECORD DATE SHARES:
-----------------
VOTE ON THE PROPOSAL
FOR AGAINST ABSTAIN
Please sign EXACTLY as your name(s)
appear(s) above. When signing as
attorney, executor, administrator,
guardian, trustee, custodian, etc.,
please give your full title as
such. If a corporation or
partnership, please sign the full
name by an authorized officer or
partner. If stock is owned
jointly, all owners should sign.
- -----------------------------------
Signature(s) of Shareholder(s)
Date:
-----------------------------
PART C - OTHER INFORMATION
Item 15. Indemnification
Indemnification is provided to trustees and officers of the
Registrant pursuant to the Registrant's Declaration of Trust, except where
such indemnification is not permitted by law. However, the Declaration of
Trust does not protect the trustees or officers from liability based on
willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of their office.
Trustees and officers of the Registrant are insured against certain
liabilities, including liabilities arising under the Securities Act of 1933
(the "Act").
Insofar as indemnification for liabilities arising under the Act
may be permitted to trustees, officers, and controlling persons of the
Registrant by the Registrant pursuant to the Declaration of Trust or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by trustees,
officers, or controlling persons of the Registrant in connection with the
successful defense of any act, suit, or proceeding) is asserted by such
trustees, officers, or controlling persons in connection with the shares
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
Insofar as indemnification for liabilities may be permitted
pursuant to Section 17 of the Investment Company Act of 1940 for trustees,
officers, or controlling persons of the Registrant by the Registrant
pursuant to the Declaration of Trust or otherwise, the Registrant is aware
of the position of the Securities and Exchange Commission as set forth in
Investment Company Act Release No. IC-11330. Therefore, the Registrant
undertakes that in addition to complying with the applicable provisions of
the Declaration of Trust or otherwise, in the absence of a final decision
on the merits by a court or other body before which the proceeding was
brought, that an indemnification payment will not be made unless in the
absence of such a decision, a reasonable determination based upon factual
review has been made (i) by a majority vote of a quorum of non-party
trustees who are not interested persons of the Registrant or (ii) by
independent legal counsel in a written opinion that the indemnitee was not
liable for an act of willful misfeasance, bad faith, gross negligence, or
reckless disregard of duties. The Registrant further undertakes that
advancement of expenses incurred in the defense of a proceeding (upon
undertaking for repayment unless it is ultimately determined that
indemnification is appropriate) against an officer, trustee, or controlling
person of the Registrant will not be made absent the fulfillment of at
least one of the following conditions: (i) the indemnitee provides
security for his undertaking; (ii) the Registrant is insured against losses
arising by reason of any lawful advances; or (iii) a majority of a quorum
of disinterested non-party trustees or independent legal counsel in a
written opinion makes a factual determination that there is reason to
believe the indemnitee will be entitled to indemnification.
Item 16. Exhibits
1.1 Copy of Declaration of Trust of the Registrant, dated October 3,
1988(1)
1.2 Amendment to the Declaration of Trust, dated October 3, 1989(1)
1.3 Conformed Copy of Amendment No. 8 to the Declaration of Trust, dated
December 28, 1994(2)
2.1 Bylaws of the Registrant, as amended(1)
3 Not Applicable
4 Agreement and Plan of Reorganization dated September 23, 1996, between
State Bond Money Funds, Inc., a Maryland corporation, on behalf of its
portfolio, State Bond Cash Management Fund, and Money Market Obligations
Trust, a Massachusetts business trust, on behalf of its portfolio Automated
Cash Management Trust*
5 Copy of Specimen Certificate for Shares of Beneficial Interest of the
Registrant(3)
6.1 Conformed Copy of Investment Advisory Contract of the Registrant(4)
6.2 Copy of Exhibit G to the Investment Advisory Contract(1)
6.3 Conformed Copy of Investment Advisory Contract between Registrant and
Federated Administrative Services, dated March 1, 1995(5)
7.1 Conformed Copy of Distributor's Contract of the Registrant(6)
7.2 Conformed Copies of Exhibits F through H to Distributor's Contract(7)
7.3 Conformed Copies of Exhibits C and D to Distributor's Contract(5)
7.4 The Registrant hereby incorporates the conformed copy of the specimen
Mutual Funds Sales and Service Agreement; Mutual Funds Service Agreement;
and Plan Trustee/Mutual Funds Service Agreement from Item 24(b)(6) of the
Cash Trust Series II Registration Statement on Form N-1A, filed with the
Commission on July 24, 1995. (File Nos. 33-38550 and 811-6269)
8 Not Applicable
9 Conformed Copy of Custodian Agreement of the Registrant(3)
10.1 Conformed Copy of Rule 12b-1 Plan of the Registrant, dated June 1,
1994(7)
10.2 Conformed Copy of Rule 12b-1 Agreement of the Registrant, dated
June 1, 1994(7)
10.3 The Registrant hereby incorporates the conformed copy of the specimen
Multiple Class Plan from Item 24(b)(18) of the World Investment Series,
Inc. Registration Statement on Form N-1A, filed with the Commission on
January 26, 1996. (File Nos. 33-52149 and 811-07141)
10.4 The responses described in Item 16 (7.4) are hereby incorporated by
reference
11 Opinion of S. Elliott Cohan, Deputy General Counsel, Federated
Investors regarding legality of shares being issued*
12 Opinion of Dickstein Shapiro Morin & Oshinsky LLP regarding tax
consequences of Reorganization(8)
13.1 Conformed Copy of Transfer Agency and Service Agreement of the
Registrant(3)
13.2 Conformed Copy of Shareholder Services Sub-Contract of the Registrant,
dated June 1, 1994(7)
13.3 Conformed Copy of Fund Accounting Agreement(2)
13.4 The responses described in Item 16 (7.4) and Item 16 (10.3) are hereby
incorporated by reference
14.1 Conformed copy of Consent of Independent Auditors of the Registrant,
Arthur Andersen LLP*
14.2 Conformed copy of Consent of Independent Auditors of State Bond Cash
Management Fund, Ernst & Young LLP*
15 Not Applicable
16 Conformed Copy of Power of Attorney*
17.1 Declaration under Rule 24f-2*
17.2 Form of Proxy of State Bond Cash Management Fund*
* Filed electronically.
(1) Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 16 on Form N-1A filed on September 27, 1995. (File
Nos. 33-31602 and 811-5950)
(2) Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 12 on Form N-1A filed on February 21, 1995. (File
Nos. 33-31602 and 811-5950)
(3) Response is incorporated by reference to Registrant's Post-Effective
Amendment
No. 8 on Form N-1A filed on June 1, 1994. (File Nos. 33-31602 and
811-5950)
(4) Response is incorporated by reference to Registrant's Initial
Registration Statement on Form N-1A filed October 20, 1989. (File
Nos. 33-31602 and 811-5950)
(5) Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 13 on Form N-1A filed May 7, 1995. (File Nos. 33-31602 and
811-5950)
(6) Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 7 on Form N-1A filed on May 7, 1994. (File Nos. 33-31602 and
811-5950)
(7) Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 11 on Form N-1A filed on November 25, 1994. (File
Nos. 33-31602 and 811-5950)
(8) To be filed by Post-Effective Amendment pursuant to `Dear
Registrant''letter dated February 15, 1996.
Item 17. Undertakings
(1) The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of a prospectus
which is a part of this Registration Statement by any person or party who
is deemed to be an underwriter within the meaning of Rule 145(c) of the
Securities Act of 1933, the reoffering prospectus will contain the
information called for by the applicable registration form for reofferings
by persons who may be deemed underwriters, in addition to the information
called for by the other items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that
is filed under paragraph (1) above will be filed as a part of an amendment
to the Registration Statement and will not be used until the amendment is
effective, and that, in determining any liability under the Securities Act
of 1933, each post-effective amendment shall be deemed to be a new
Registration Statement for the securities offered therein, and the offering
of the securities at that time shall be deemed to be the initial bona fide
offering of them.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Money Market Obligations Trust, has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Pittsburgh, Commonwealth of
Pennsylvania on October 9, 1996.
MONEY MARKET OBLIGATIONS TRUST
(Registrant)
By: *
J. Christopher Donahue
President
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities indicated on October 9, 1996:
* Chairman and Trustee
John F. Donahue
(Chief Executive Officer)
* President and Trustee
J. Christopher Donahue
* Treasurer and Executive Vice President
John W. McGonigle
(Principal Financial and
Accounting Officer)
* Trustee
Thomas G. Bigley
* Trustee
John T. Conroy, Jr.
* Trustee
William J. Copeland
* Trustee
James E. Dowd
* Trustee
Lawrence D. Ellis, M.D.
* Trustee
Edward L. Flaherty, Jr.
* Trustee
Peter E. Madden
* Trustee
Gregor F. Meyer
* Trustee
John E. Murray, Jr., J.D., S.J.D.
* Trustee
Wesley W. Posvar
* Trustee
Marjorie P. Smuts
1* By: /s/ S. Elliott Cohan
Attorney in Fact
AUTOMATED CASH MANAGEMENT TRUST EXHIBIT 11
A Portfolio of Money Market Obligations Trust
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
October 8, 1996
The Trustees of
Money Market Obligations Trust
Federated Investors Tower
Pittsburgh, PA 15222-3779
Gentlemen:
Automated Cash Management Trust (the `Fund''), a portfolio of Money Market
Obligations Trust, a Massachusetts business trust (`Trust''), proposes to
issue shares of beneficial interest (such shares of beneficial interest
being herein referred to as `Shares'') in connection with the acquisition
of the assets of State Bond Cash Management Fund, a portfolio of State Bond
Money Funds, Inc., a Maryland corporation, pursuant to the Agreement and
Plan of Reorganization dated as of September 23, 1996 (`Agreement''),
filed as an exhibit to the registration statement of the Trust filed on
Form N-14 (Securities Act of 1933 No. to be assigned) under the Securities
Act of 1933 as amended (`N-14 Registration'').
As counsel I have participated in the organization of the Trust, its
registration under the Investment Company Act of 1940, the registration of
its securities on Form N-1A under the Securities Act of 1933 and its N-14
Registration. I have examined and am familiar with the written Declaration
of Trust dated October 3, 1988 (`Declaration of Trust''), the Bylaws of
the Trust, the Agreement and such other documents and records deemed
relevant. I have also reviewed questions of law and consulted with
counsel thereon as deemed necessary or appropriate for the purposes of this
opinion.
Based upon the foregoing, it is my opinion that:
1. The Trust is duly organized and validly existing pursuant to the
Declaration of Trust.
2. The Shares which are currently being registered by the N-14
Registration may be legally and validly issued in accordance with the
provisions of the Agreement and the Declaration of Trust upon receipt of
consideration sufficient to comply with the provisions of Article III,
Section 3, of the Declaration of Trust and subject to compliance with the
Investment Company Act of 1940, as amended, and applicable state laws
regulating the sale of securities. Such Shares, when so issued, will be
fully paid and non-assessable.
I consent to your filing this opinion as an exhibit to the N-14
Registration referred to above and to any application or registration
statement filed under the securities laws of any of the states of the
United States.
Very truly yours,
AUTOMATED CASH MANAGEMENT TRUST
A Portfolio of Money Market
Obligations Trust
By:/s/ S. Elliott Cohan
S. Elliott Cohan
Title: Assistant Secretary
Exhibit 14.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement (Form N-14 of Money Market
Obligations Trust) of our report dated August 20, 1996, included in the
Automated Cash Management Trust Financial Statements as of July 31, 1996,
included in or made part of this registration statement.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania
October 9, 1996
Exhibit 14.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the references to our firm under the captions `Financial
Highlights''and ``Independent Auditors'' and the use of our report dated
August 28, 1996, on the financial statements of State Bond Cash Management
Fund (the Fund) in the Registration Statement (Form N-1A) of the Fund which
is incorporated by reference in, and reference to our firm in Exhibit A of,
the Registration Statement (Form N-14) of Automated Cash Management Trust
filed with the Securities and Exchange Commission.
/s/ERNST & YOUNG LLP
ERNST & YOUNG LLP
Kansas City, Missouri
October 9, 1996
EXHIBIT 16
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints the Secretary and Assistant Secretary of MONEY MARKET OBLIGATIONS
TRUST and the Deputy General Counsel of Federated Investors, and each of
them, their true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution for them and in their names, place and
stead, in any and all capacities, to sign any and all documents to be filed
with the Securities and Exchange Commission pursuant to the Securities Act
of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940, by means of the Securities and Exchange Commission's electronic
disclosure system known as EDGAR; and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents,
and each of them, full power and authority to sign and perform each and
every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as each of them might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
SIGNATURES TITLE DATE
/s/John F. Donahue Chairman and Trustee August 28, 1996
John F. Donahue (Chief Executive Officer)
/s/J. Christopher Donahue President August 28, 1996
J. Christopher Donahue and Trustee
/s/John W. McGonigle Treasurer and August 28, 1996
John W. McGonigle Executive Vice
President
(Principal Financial and
Accounting Officer)
/s/Thomas G. Bigley Trustee August 28, 1996
Thomas G. Bigley
/s/John T. Conroy, Jr. Trustee August 28, 1996
John T. Conroy, Jr.
/s/William J. Copeland Trustee August 28, 1996
/s/James E. Dowd Trustee August 28, 1996
James E. Dowd
SIGNATURES TITLE DATE
/s/Lawrence D. Ellis, M.D. Trustee August 28, 1996
Lawrence D. Ellis, M.D.
/s/Edward L. Flaherty, Jr. Trustee August 28, 1996
Edward L. Flaherty, Jr.
/s/Peter E. Madden Trustee August 28, 1996
Peter E. Madden
/s/Gregor F. Meyer Trustee August 28, 1996
Gregor F. Meyer
/s/John E. Murray, Jr. Trustee August 28, 1996
John E. Murray, Jr.
/s/Wesley W. Posvar Trustee August 28, 1996
Wesley W. Posvar
/s/Marjorie P. Smuts Trustee August 28, 1996
Marjorie P. Smuts
Sworn to and subscribed before me this 28th day of August, 1996
/s/Marie M. Hamm
Notarial Seal
Marie M. Hamm, Notary Public
Pittsburgh, Allegheny County
My Commission Expires Sept. 16, 1996
Member, Pennsylvania Association of Notaries
EXHIBIT 17.1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 24F-2
ANNUAL NOTICE OF SECURITIES SOLD
PURSUANT TO RULE 24F-2
Read instructions at end of Form before preparing Form.
Please print or type.
1. Name and address of issuer:
Money Market Obligations Trust
Federated Investors
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
2. Name of each series or class of funds for which this
notice is filed:
Government Obligations Fund
Prime
Obligations Fund
Treasury
Obligations Fund
Tax-Free
Obligations Fund
Government
Obligations Tax-Managed Fund
Automated Cash Management Trust
3. Investment Company Act File Number:
811-5950
Securities Act File Number:
33-31602
4. Last day of fiscal year for which this notice is filed:
July 31, 1996
5. Check box if this notice is being filed more than 180
days after the close of the issuer's fiscal year for
purposes of reporting securities sold after the close
of the fiscal year but before termination of the
issuer's 24f-2 declaration:
[ ]
6. Date of termination of issuer's declaration under rule
24f-2(a)(1), if applicable:
7. Number and amount of securities of the same class or
series which had been registered under the Securities
Act of 1933 other than pursuant to rule 24f-2 in a
prior fiscal year, but which remained unsold at the
beginning of the fiscal year:
0:$0
8. Number and amount of securities registered during the
fiscal year other than pursuant to rule 24f-2:
0:$0
9. Number and aggregate sale price of securities sold
during the fiscal year (includes DRIP shares):
112,892,800,900:$112,892,800,900
10. Number and aggregate sale price of securities sold
during the fiscal year in reliance upon registration
pursuant to rule 24f-2:
112,892,800,900:$112,892,800,900
11. Number and aggregate sale price of securities issued
during the fiscal year in connection with dividend
reinvestment plans, if applicable:
12. Calculation of registration fees:
(i) Aggregate sale price of securities sold during the
fiscal
year in reliance on rule 24f-2 (from Item 10):
$112,892,800,9
00
(ii) Aggregate price of shares issued in connection
with
dividend reimbursement plans
(from Item 11, if applicable) +
(iii) Aggregate
price of shares redeemed or repurchased
during the fiscal year (if applicable)-
107,760,429,868
(iv) Aggregate price of shares redeemed or repurchased
and previously applied as a reduction to filing
fees
pursuant to rule 24e-2 (if applicable)+
-0-
(v) Net aggregate price of securities sold and issued
during
the fiscal year in reliance on rule 24f-2 [line
(i), plus
line (ii), less line (iii), plus line (iv)] (if
applicable): $5,132,371,032
(vi) Multiplier prescribed by Section 6(b) of the
Securities
Act of 1933 or other applicable law or regulation
(see Instruction C.6): x
1/2900
(vii) Fee due [line
(i) or line (v) multiplied by line (vi)]:
$1,769,783
Instruction: Issuers
should complete lines (ii), (iii), (iv), and (v)
only if the form in being filed within 60 days
after the close of the issuer's fiscal year. See
Instruction C.3.
13. Check box if fees are being remitted to the
Commission's lockbox depository as described in section
3a of the Commission's Rules of Informal and Other
Procedures
(17 CFR 202.3a).
[ ]
Date of mailing or wire transfer of filing fees to the
Commission's lockbox depository:
September 16, 1996
SIGNATURES
This report has been signed below by the following persons
on behalf of the issuer and in the capacities and on the
dates indicated.
By (Signature and Title)*
J. Crilley Kelly
Assistant Secretary
Date: September 16, 1996
* Please print the name and title of the signing officer
below the signature.
FEDERATED ADMINISTRATIVE
SERVICES
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
412-288-1900
September 16, 1996
Money Market Obligations Trust
Federated Investors Tower
Pittsburgh, PA 15222-3779
Gentlemen:
You have requested my opinion for use in conjunction with a Rule 24f-2
Notice for Money Market Obligations Trust (`Trust'') to be filed in
respect of shares of the Trust (`Shares'') sold for the fiscal year ended
July 31, 1996, pursuant to the Trust's registration statement filed with
the Securities and Exchange Commission (the `SEC'') under the Securities
Act of 1933 (File No.
33-31602 (`Registration Statement'').
In its Registration Statement, the Trust elected to register an
indefinite number of shares pursuant to the provisions of Investment
Company Act Rule 24f-2.
As counsel, I have participated in the preparation and filing of the
Trust's amended Registration Statement under the Securities Act of 1933.
Further, I have examined and am familiar with the provisions of the
Declaration of Trust dated October 3, 1988 , (`Declaration of Trust''),
the Bylaws of the Trust and such other documents and records deemed
relevant. I have also reviewed questions of law and consulted with counsel
thereon as deemed necessary or appropriate by me for the purposes of this
opinion.
On the basis of the foregoing, it is my opinion the Shares sold for
the fiscal year ended July 31, 1996, registration of which the Rule 24f-2
Notice makes definite in number, were legally issued, fully paid and non-
assessable by the Trust.
I hereby consent to the filing of this opinion as an exhibit to the
Rule 24f-2 Notice referred to above, the Registration Statement of the
Trust and to any application or registration statement filed under the
securities laws of any of the States of the United States.
The foregoing opinion is limited to the Federal laws of the United
States and the laws of the Commonwealth of Massachusetts, and I am
expressing no opinion as to the effect of the laws of any other
jurisdiction.
Very truly yours,
/s/ J. Crilley Kelly
J. Crilley Kelly
Fund Attorney
Money Market Obligations Trust
Federated Investors
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
September 16, 1996
EDGAR Operations Branch
Securities and Exchange Commission
Division of Investment Management
450 Fifth Street, Northwest
Washington, DC 20549
RE: Form 24f-2 for Money Market Obligations Trust
1933 Act File No. 33-31602
1940 Act File No. 811-5950
Dear Sir or Madam:
Pursuant to the provisions of Rule 24f-2 of the Investment Company Act
of 1940, I enclose form 24f-2 for Money Market Obligations Trust. This
filing has been filed electronically via EDGAR.
Since the aggregate sales price of securities sold exceeded the
aggregate redemption proceeds of securities redeemed during the period for
which form 24f-2 is filed, an additional filing fee in the amount of
$1,769,783 pursuant to Rule 24f-2(c) has been FedDirect wire transferred to
the U.S. Treasury Lockbox at Mellon Bank in Pittsburgh.
As required by Rule 24f-2(b), a conformed opinion of counsel has been
electronically filed herewith which indicates whether the securities, the
registration of which this form makes definite in number, were legally
issued, fully paid and non-assessable.
Very truly yours,
/s/ J. Crilley Kelly
J. Crilley Kelly
Assistant Secretary
Enclosures
cc: Charles H. Morin, Esquire
Matthew G. Maloney, Esquire
Linda L. Banas
EXHIBIT 17.2
STATE BOND CASH MANAGEMENT FUND,
a Portfolio of
STATE BOND MONEY FUNDS, INC.,
SPECIAL MEETING OF SHAREHOLDERS
December , 1996
==
STATE BOND CASH MANAGEMENT FUND,
a Portfolio of
STATE BOND MONEY FUNDS, INC.
CUSIP NO. 856571104
The undersigned shareholder(s) of State Bond Cash Management Fund, a
portfolio of State Bond Money Funds, Inc. (the `State Bond Fund''),
hereby appoint(s) Kevin L. Howard, Keith O. Martens and Dale C.
Bauman, or any of them true and lawful proxies, with power of
substitution of each, to vote all shares of the State Bond Fund which
the undersigned is entitled to vote, at the Special Meeting of
Shareholders to be held on December , 1996, at 100 North Minnesota
--
Street, New Ulm, Minnesota 56073-0069, at 4:15 p.m. (local time) and
at any adjournment thereof.
Discretionary authority is hereby conferred as to all other matters as may
properly come before the Special Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The proxies
named will vote the shares represented by this proxy in accordance
with the choice made on this ballot. IF NO CHOICE IS INDICATED, THIS
PROXY WILL BE VOTED AFFIRMATIVELY ON THAT MATTER.
PROPOSAL
TO APPROVE OR DISAPPROVE AN AGREEMENT AND PLAN OF REORGANIZATION BETWEEN
THE STATE BOND FUND AND MONEY MARKET OBLIGATIONS TRUST, ON BEHALF OF
AUTOMATED CASH MANAGEMENT TRUST.
PLEASE RETURN BOTTOM PORTION WITH YOUR VOTE IN THE ENCLOSED ENVELOPE AND
RETAIN THE TOP PORTION.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS X
KEEP THIS PORTION FOR YOUR RECORDS.
DETACH AND RETURN THIS PORTION ONLY.
STATE BOND CASH MANAGEMENT FUND,
a portfolio of State Bond Money
Funds, Inc.
RECORD DATE SHARES:
-----------------
VOTE ON THE PROPOSAL
FOR AGAINST ABSTAIN
Please sign EXACTLY as your name(s)
appear(s) above. When signing as
attorney, executor, administrator,
guardian, trustee, custodian, etc.,
please give your full title as
such. If a corporation or
partnership, please sign the full
name by an authorized officer or
partner. If stock is owned
jointly, all owners should sign.
- -----------------------------------
Signature(s) of Shareholder(s)
Date: _____________________________
EXHIBIT 4
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated September 23, 1996 (the
"Agreement"), between MONEY MARKET OBLIGATIONS TRUST, a Massachusetts
business trust (the "Trust"), on behalf of its portfolio AUTOMATED CASH
MANAGEMENT TRUST (hereinafter called the "Acquiring Fund"), and STATE BOND
MONEY FUNDS, INC., a Maryland corporation (hereinafter called the
"Corporation") on behalf of its portfolio STATE BOND CASH MANAGEMENT FUND
(hereinafter called the "Acquired Fund").
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section 368(a)(1)(C)
of the United States Internal Revenue Code of 1986, as amended (the
"Code"). The reorganization (the "Reorganization") will consist of the
transfer of all of the net assets of the Acquired Fund in exchange solely
for Institutional Service Shares of the Acquiring Fund (the "Acquiring Fund
Shares") and the distribution, after the Closing Date (as hereinafter
defined), of the Acquiring Fund Shares to the shareholders of the Acquired
Fund in liquidation of the Acquired Fund as provided herein, all upon the
terms and conditions hereinafter set forth in this Agreement.
WHEREAS, the Corporation and the Trust are registered open-end
management investment companies and the Acquired Fund owns securities in
which the Acquiring Fund is permitted to invest;
WHEREAS, both the Acquired Fund and the Acquiring Fund are
authorized to issue shares of common stock or shares of beneficial
interest, as the case may be;
WHEREAS, the Board of Trustees, including a majority of the
trustees who are not "interested persons" (as defined under the Investment
Company Act of 1940, as amended (the "1940 Act")), of the Trust has
determined that the exchange of all of the net assets of the Acquired Fund
for Acquiring Fund Shares is in the best interests of the Acquiring Fund
shareholders and that the interests of the existing shareholders of the
Acquiring Fund would not be diluted as a result of this transaction; and
WHEREAS, the Board of Directors, including a majority of the
directors who are not "interested persons" (as defined under the 1940 Act),
of the Corporation has determined that the exchange of all of the net
assets of the Acquired Fund for Acquiring Fund Shares is in the best
interests of the Acquired Fund shareholders;
NOW THEREFORE, in consideration of the premises and of the
covenants and agreements hereinafter set forth, the parties agree as
follows:
1.TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR THE
ACQUIRING FUND SHARES AND LIQUIDATION OF THE ACQUIRED FUND.
1.1 Subject to the terms and conditions contained herein, the
Acquired Fund agrees to assign, transfer and convey to the Acquiring Fund
all of the net assets of the Acquired Fund, including all securities and
cash, other than cash in an amount necessary to pay any unpaid dividends
and distributions as provided in paragraph 1.5, beneficially owned by the
Acquired Fund, and the Acquiring Fund agrees in exchange therefor to
deliver to the Acquired Fund the number of Acquiring Fund Shares, including
fractional Acquiring Fund Shares, determined as set forth in paragraph 2.3.
Such transaction shall take place at the closing (the "Closing") on the
closing date (the "Closing Date") provided for in paragraph 3.1. In lieu
of delivering certificates for the Acquiring Fund Shares, the Acquiring
Fund shall credit the Acquiring Fund Shares to the Acquired Fund's account,
for the benefit of its shareholders, on the stock record books of the
Acquiring Fund and shall deliver a confirmation thereof to the Acquired
Fund.
1.2 The Acquired Fund will discharge or make provision for the
discharge of all of its liabilities and obligations prior to or on the
Closing Date.
1.3 Delivery of the assets of the Acquired Fund to be transferred
shall be made on the Closing Date and shall be delivered to State Street
Bank and Trust Company (hereinafter called "State Street"), Boston,
Massachusetts, the Acquiring Fund's custodian (the "Custodian"), for the
account of the Acquiring Fund, together with proper instructions and all
necessary documents to transfer to the account of the Acquiring Fund, free
and clear of all liens, encumbrances, rights, restrictions and claims
created by the Acquired Fund. All cash delivered shall be in the form of
immediately available funds payable to the order of the Custodian for the
account of the Acquiring Fund.
1.4 The Acquired Fund will pay or cause to be paid to the Acquiring
Fund any dividends or interest received on or after the Closing Date with
respect to assets transferred to the Acquiring Fund thereunder. The
Acquired Fund will transfer to the Acquiring Fund any distributions, rights
or other assets received by the Acquired Fund after the Closing Date as
distributions on or with respect to the securities transferred. Such
assets shall be deemed included in assets transferred to the Acquiring Fund
on the Closing Date and shall not be separately valued.
1.5 As soon after the Closing Date as is conveniently practicable,
the Acquired Fund will liquidate and distribute pro rata to the Acquired
Fund's shareholders of record, determined as of the close of business on
the Closing Date (the "Acquired Fund Shareholders"), the Acquiring Fund
Shares received by the Acquired Fund pursuant to paragraph 1.1. In
addition, each Acquired Fund Shareholder shall have the right to receive
any unpaid dividends or other distributions which were declared before the
Valuation Date (as hereinafter defined) with respect to the shares of the
Acquired Fund that are held by the shareholder on the Valuation Date. Such
liquidation and distribution will be accomplished by the transfer of the
Acquiring Fund Shares then credited to the account of the Acquired Fund on
the books of the Acquiring Fund to open accounts on the share record books
of the Acquiring Fund in the names of the Acquired Fund Shareholders, and
representing the respective pro rata number of the Acquiring Fund Shares
due such shareholders, based on their ownership of shares of the Acquired
Fund on the Closing Date. All issued and outstanding Shares of the
Acquired Fund will simultaneously be canceled on the books of the Acquired
Fund. Share certificates representing interests in the Acquired Fund will
represent a number of Acquiring Fund Shares, after the Closing Date as
determined in accordance with Section 2.3. The Acquiring Fund shall not
issue certificates representing the Acquiring Fund Shares in connection
with such exchange.
1.6 Ownership of Acquiring Fund Shares will be shown on the books of
the Acquiring Fund's transfer agent. Shares of the Acquiring Fund will be
issued in the manner described in the Acquiring Fund's current prospectus
and statement of additional information.
1.7 Any transfer taxes payable upon issuance of the Acquiring Fund
Shares in a name other than the registered holder of the Acquired Fund
shares on the books of the Acquired Fund as of that time shall, as a
condition of such issuance and transfer, be paid by the person to whom such
Acquiring Fund Shares are to be issued and transferred.
1.8 Any reporting responsibility of the Acquired Fund is and shall
remain the responsibility of the Corporation up to and including the
Closing Date and such later dates, with respect to dissolution and
deregistration of the Corporation, on which the Corporation is dissolved
and deregistered.
1.9 The Corporation shall be deregistered as an investment company
under the 1940 Act and dissolved as a Maryland corporation as promptly as
practicable following the Closing Date and the making of all distributions
pursuant to paragraph 1.5.
2.VALUATION.
2.1 The value of the Acquired Fund's net assets to be acquired by the
Acquiring Fund hereunder shall be the value of such assets computed as of
the close of the New York Stock Exchange (normally 4:00 p.m. Eastern time)
on the Closing Date (such time and date being herein called the "Valuation
Date"), using the valuation procedures set forth in the Acquiring Fund's
then-current prospectus or statement of additional information.
2.2 The net asset value of each Acquiring Fund Share shall be the net
asset value per share computed as of the close of the New York Stock
Exchange (normally 4:00 p.m. Eastern time) on the Valuation Date, using the
valuation procedures set forth in the Acquiring Fund's then-current
prospectus or statement of additional information.
2.3 The number of the Acquiring Fund Shares to be issued (including
fractional shares, if any) in exchange for the Acquired Fund's net assets
shall be determined by dividing the value of the net assets of the Acquired
Fund determined using the same valuation procedures referred to in
paragraph 2.1, by the net asset value of one Acquiring Fund Share
determined in accordance with paragraph 2.2.
2.4 All computations of value shall be made in accordance with the
regular practices of the Acquiring Fund.
3.CLOSING AND CLOSING DATE.
3.1 The Closing Date shall be December , 1996 or such later date as
--
the parties may mutually agree. All acts taking place at the Closing Date
shall be deemed to take place simultaneously as of the close of business on
the Closing Date unless otherwise provided. The Closing shall be held at
4:00 p.m. (Eastern time) at the offices of the Acquiring Fund, Federated
Investors Tower, Pittsburgh, PA 15222-3779, or such other time and/or place
as the parties may mutually agree.
3.2 If on the Valuation Date (a) the primary trading market for
portfolio securities of the Acquiring Fund or the Acquired Fund shall be
closed to trading or trading thereon shall be restricted; or (b) trading or
the reporting of trading shall be disrupted so that accurate appraisal of
the value of the net assets of the Acquiring Fund or the Acquired Fund is
impracticable, the Closing Date shall be postponed until the first business
day after the day when trading shall have been fully resumed and reporting
shall have been restored.
3.3 ARM Transfer Agency, Inc., as transfer agent for the Acquired
Fund, shall deliver at the Closing a certificate of an authorized officer
stating that its records contain the names and addresses of the Acquired
Fund Shareholders and the number and percentage ownership of outstanding
shares owned by each such shareholder immediately prior to the Closing.
The Acquiring Fund shall issue and deliver a confirmation evidencing the
Acquiring Fund Shares to be credited on the Closing Date to the Secretary
of the Acquired Fund, or provide evidence satisfactory to the Acquired Fund
that such Acquiring Fund Shares have been credited to the Acquired Fund's
account on the books of the Acquiring Fund. At the Closing, each party
shall deliver to the other such bills of sale, checks, assignments,
assumption agreements, share certificates, if any, receipts or other
documents as such other party or its counsel may reasonably request.
4.REPRESENTATIONS AND WARRANTIES.
4.1 The Corporation represents and warrants to the Trust as follows:
(a) The Corporation is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Maryland and has power to own all of its properties and assets and to carry
out this Agreement.
(b) The Corporation 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.
(c) The Corporation is not, and the execution, delivery and
performance of this Agreement will not result, in material violation of the
Corporation's Articles of Incorporation or Bylaws or of any agreement,
indenture, instrument, contract, lease or other undertaking to which the
Acquired Fund is a party or by which it is bound.
(d) The Acquired Fund has no material contracts or other
commitments outstanding (other than this Agreement) which will result in
liability to it after the Closing Date.
(e) No litigation or administrative proceeding or
investigation of or before any court or governmental body is currently
pending or to its knowledge threatened against the Acquired Fund or any of
its properties or assets which, if adversely determined, would materially
and adversely affect its financial condition or the conduct of its
business. The Acquired Fund knows of no facts which might form the basis
for the institution of such proceedings, and is not a party to or subject
to the provisions of any order, decree or judgment of any court or
governmental body which materially and adversely affects its business or
its ability to consummate the transactions herein contemplated.
(f) The current prospectus and statement of additional
information of the Acquired Fund conform in all material respects to the
applicable requirements of the Securities Act of 1933, as amended (the
"1933 Act"), and the 1940 Act and the rules and regulations of the
Securities and Exchange Commission (the "Commission") thereunder and do not
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(g) The Statement of Assets and Liabilities of the Acquired
Fund at July 31, 1995 and 1996, have been audited by Ernst & Young LLP,
independent auditors, and have been prepared in accordance with generally
accepted accounting principles, consistently applied, and such statements
(copies of which have been furnished to the Acquiring Fund) fairly reflect
the financial condition of the Acquired Fund as of such dates, and there
are no known contingent liabilities of the Acquired Fund as of such dates
not disclosed therein.
(h) Since July 31, 1996, there has not been any material
adverse change in the Acquired Fund's financial condition, assets,
liabilities or business other than changes occurring in the ordinary course
of business, or any incurrence by the Acquired Fund of indebtedness
maturing more than one year from the date such indebtedness was incurred,
except as otherwise disclosed to and accepted by the Acquiring Fund.
(i) At the Closing Date, all Federal and other tax returns
and reports of the Acquired Fund required by law to have been filed by such
date shall have been filed or an appropriate extension obtained, and all
Federal and other taxes shall have been paid so far as due, or provision
shall have been made for the payment thereof or contest in good faith, and
to the best of the Acquired Fund's knowledge no such return is currently
under audit and no assessment has been asserted with respect to such
returns.
(j) For each fiscal year of its operation, subject to
applicable statute of limitation periods, the Acquired Fund has met the
requirements of Subchapter M of the Code for qualification and treatment as
a regulated investment company.
(k) All issued and outstanding shares of the Acquired Fund
are, and at the Closing Date will be, duly and validly issued and
outstanding, fully paid and non-assessable. All of the issued and
outstanding shares of the Acquired Fund will, at the time of the Closing,
be held by the persons and in the amounts set forth in the records of the
transfer agent as provided in paragraph 3.3. The Acquired Fund does not
have outstanding any options, warrants or other rights to subscribe for or
purchase any of the Acquired Fund shares, nor is there outstanding any
security convertible into any of the Acquired Fund shares.
(l) On the Closing Date, the Acquired Fund will have full
right, power and authority to sell, assign, transfer and deliver the assets
to be transferred by it hereunder.
(m) The execution, delivery and performance of this
Agreement will have been duly authorized prior to the Closing Date by all
necessary action on the part of the Corporation and, subject to the
approval of the Acquired Fund Shareholders, this Agreement constitutes the
valid and legally binding obligation of the Acquired Fund enforceable in
accordance with its terms, subject to the effect of bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and other similar laws
relating to or affecting creditors' rights generally and court decisions
with respect thereto, and to general principles of equity and the
discretion of the court (regardless of whether the enforceability is
considered in a proceeding in equity or at law).
(n) The prospectus/proxy statement of the Acquired Fund
(the "Prospectus/Proxy Statement") to be included in the Registration
Statement referred to in paragraph 5.5 (only insofar as it relates to the
Acquired Fund) will, on the effective date of the Registration Statement
and on the Closing Date, not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which such statements were made, not misleading.
4.2 The Trust represents and warrants to the Corporation 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 the power to carry on its business as it is now being
conducted and to carry out this Agreement.
(b) The Trust is registered under the 1940 Act as an open-
end, diversified, management investment company, and such registration has
not been revoked or rescinded and is in full force and effect.
(c) The Acquiring Fund is not, and the execution, delivery
and performance of this Agreement will not result, in material violation of
the Trust's Declaration of Trust or Bylaws or of any agreement, indenture,
instrument, contract, lease or other undertaking to which the Acquiring
Fund is a party or by which it is bound.
(d) No litigation or administrative proceeding or
investigation of or before any court or governmental body is currently
pending or to its knowledge threatened against the Acquiring Fund or any of
its properties or assets which, if adversely determined, would materially
and adversely affect its financial condition or the conduct of its
business. The Acquiring Fund knows of no facts which might form the basis
for the institution of such proceedings, and is not a party to or subject
to the provisions of any order, decree or judgment of any court or
governmental body which materially and adversely affects its business or
its ability to consummate the transactions contemplated herein.
(e) The current prospectus and statement of additional
information of the Acquiring Fund conform in all material respects to the
applicable requirements of the 1933 Act and the 1940 Act and the rules and
regulations of the Commission thereunder and do not include any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(f) The Statement of Assets and Liabilities of the
Acquiring Fund at July 31, 1995 and 1996, have been audited by Arthur
Andersen LLP, independent auditors, and have been prepared in accordance
with generally accepted accounting principles, and such statements (copies
of which have been furnished to the Acquired Fund) fairly reflect the
financial condition of the Acquiring Fund as of such dates, and there are
no known contingent liabilities of the Acquiring Fund as of such dates not
disclosed therein.
(g) Since July 31, 1996, there has not been any material
adverse change in the Acquiring Fund's financial condition, assets,
liabilities or business other than changes occurring in the ordinary course
of business, or any incurrence by the Acquiring Fund of indebtedness
maturing more than one year from the date such indebtedness was incurred,
except as disclosed to and accepted by the Acquired Fund.
(h) At the Closing Date, all Federal and other tax returns
and reports of the Acquiring Fund required by law to have been filed or an
appropriate extension obtained, by such date shall have been filed, and all
Federal and other taxes shall have been paid so far as due, or provision
shall have been made for the payment thereof or contest in good faith, and
to the best of the Acquiring Fund's knowledge no such return is currently
under audit and no assessment has been asserted with respect to such
returns.
(i) For each fiscal year of its operation, subject to
applicable statute of limitation periods, the Acquiring Fund has met the
requirements of Subchapter M of the Code for qualification and treatment as
a regulated investment company.
(j) All issued and outstanding Acquiring Fund Shares are,
and at the Closing Date will be, duly and validly issued and outstanding,
fully paid and non-assessable. The Acquiring Fund does not have
outstanding any options, warrants or other rights to subscribe for or
purchase any of the Acquiring Fund Shares, nor is there outstanding any
security convertible into any Acquiring Fund Shares.
(k) The execution, delivery and performance of this
Agreement has been duly authorized by all necessary action on the part of
the Trust, and this Agreement constitutes the valid and legally binding
obligation of the Acquiring Fund enforceable in accordance with its terms,
subject to the effect of bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other similar laws relating to or
affecting creditors' rights generally and court decisions with respect
thereto, and to general principles of equity and the discretion of the
court (regardless of whether the enforceability is considered in a
proceeding in equity or at law).
(l) The Prospectus/Proxy Statement to be included in the
Registration Statement (only insofar as it relates to the Acquiring Fund)
will, on the effective date of the Registration Statement and on the
Closing Date, not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which such
statements were made, not misleading.
5.COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND.
5.1 The Acquiring Fund and the Acquired Fund each will operate its
business in the ordinary course between the date hereof and the Closing
Date, it being understood that such ordinary course of business will
include customary dividends and distributions.
5.2 The Corporation will call a meeting of the Acquired Fund
Shareholders to consider and act upon this Agreement and to take all other
action necessary to obtain approval of the transactions contemplated
herein.
5.3 Subject to the provisions of this Agreement, the Acquiring Fund
and the Acquired Fund will each take, or cause to be taken, all action, and
do or cause to be done, all things reasonably necessary, proper or
advisable to consummate and make effective the transactions contemplated by
this Agreement.
5.4 As promptly as practicable, but in any case within sixty days
after the Closing Date, the Acquired Fund shall furnish the Acquiring Fund,
in such form as is reasonably satisfactory to the Acquiring Fund, a
statement of the earnings and profits of the Acquired Fund for Federal
income tax purposes which will be carried over to the Acquiring Fund as a
result of Section 381 of the Code and which will be certified by the
Corporation's President and its Treasurer.
5.5 The Acquired Fund will provide the Acquiring Fund with
information reasonably necessary for the preparation of the
Prospectus/Proxy Statement, referred to in paragraph 4.1(m), all to be
included in a Registration Statement on Form N-14 of the Acquiring Fund
(the "Registration Statement"), in compliance with the 1933 Act, the
Securities Exchange Act of 1934, as amended, and the 1940 Act in connection
with the meeting of the Acquired Fund Shareholders to consider approval of
this Agreement and the transactions contemplated herein.
5.6 The Acquiring Fund agrees to use all reasonable efforts to obtain
the approvals and authorizations required by the 1933 Act, the 1940 Act and
such of the state Blue Sky or securities laws as it may deem appropriate in
order to continue its operations after the Closing Date.
5.7 Prior to the Valuation Date, the Acquired Fund shall have
declared a dividend or dividends, with a record date and ex-dividend date
prior to the Valuation Date, which, together with all previous dividends,
shall have the effect of distributing to its shareholders all of its
investment company taxable income, if any, plus the excess of its interest
income, if any, excludable from gross income under Code section 103(a) over
its deductions disallowed under Code sections 265 and 171(a)(2) for the
taxable periods or years ended on or before July 31, 1996 and for the
period from said date to and including the Closing Date (computed without
regard to any deduction for dividends paid), and all of its net capital
gain, if any, realized in taxable periods or years ended on or before July
31, 1996 and in the period from said date to and including the Closing
Date.
6.CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND.
The obligations of the Acquiring Fund to complete the transactions
provided for herein shall be subject, at its election, to the performance
by the Acquired Fund of all the obligations to be performed by it hereunder
on or before the Closing Date and, in addition thereto, the following
conditions:
6.1 All representations and warranties of the Corporation contained
in this Agreement shall be true and correct in all material respects as of
the date hereof and, except as they may be affected by the transactions
contemplated by this Agreement, as of the Closing Date with the same force
and effect as if made on and as of the Closing Date.
6.2 The Acquired Fund shall have delivered to the Acquiring Fund a
statement of the Acquired Fund's assets, together with a list of the
Acquired Fund's portfolio securities showing the tax costs of such
securities by lot and the holding periods of such securities, as of the
Closing Date, certified by the Treasurer of the Acquired Fund.
6.3 The Acquired Fund shall have delivered to the Acquiring Fund on
the Closing Date a certificate executed in its name by its President or
Vice President and its Treasurer, in form and substance satisfactory to the
Acquiring Fund, to the effect that the representations and warranties of
the Corporation made in this Agreement are true and correct in all material
respects at and as of the Closing Date, except as they may be affected by
the transactions contemplated by this Agreement, and as to such other
matters as the Acquiring Fund shall reasonably request.
7.CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND.
The obligations of the Acquired Fund to consummate the transactions
provided herein shall be subject, at its election, to the performance by
the Acquiring Fund of all the obligations to be performed by it hereunder
on or before the Closing Date and, in addition thereto, the following
conditions:
7.1 All representations and warranties of the Trust contained in this
Agreement shall be true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated
by this Agreement, as of the Closing Date with the same force and effect as
if made on and as of the Closing Date.
7.2 The Acquiring Fund shall have delivered to the Acquired Fund on
the Closing Date a certificate executed in its name by its President or
Vice President and its Treasurer, in form and substance satisfactory to the
Acquired Fund, to the effect that the representations and warranties of the
Trust made in this Agreement are true and correct in all material respects
at and as of the Closing Date, except as they may be affected by the
transactions contemplated by this Agreement, and as to such other matters
as the Acquired Fund shall reasonably request.
7.3 There shall not have been any material adverse change in the
Acquiring Fund's financial condition, assets, liabilities or business since
the date hereof other than changes occurring in the ordinary course of
business, or any incurrence by the Acquiring Fund of any indebtedness,
except as otherwise disclosed to and accepted by the Acquired Fund.
8.FURTHER CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE ACQUIRING
FUND AND THE ACQUIRED FUND.
If any of the conditions set forth below do not exist on or before
the Closing Date with respect to the Acquired Fund or the Acquiring Fund,
either party to this Agreement shall, at its option, not be required to
consummate the transactions contemplated by this Agreement.
8.1 The Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of the holders of the outstanding
shares of the Acquired Fund in accordance with the provisions of the
Corporation's Articles of Incorporation and the 1940 Act.
8.2 On the Closing Date no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection with,
this Agreement or the transactions contemplated herein.
8.3 All consents of other parties and all other consents, orders and
permits of Federal, state and local regulatory authorities (including those
of the Commission and of state Blue Sky and securities authorities) deemed
necessary by the Acquiring Fund or the Acquired Fund to permit
consummation, in all material respects, of the transactions contemplated
hereby shall have been obtained, except where failure to obtain any such
consent, order or permit would not involve a risk of a material adverse
effect on the assets or properties of the Acquiring Fund or the Acquired
Fund, provided that either party hereto may for itself waive any of such
conditions.
8.4 The Registration Statement shall have become effective under the
1933 Act and no stop orders suspending the effectiveness thereof shall have
been issued and, to the best knowledge of the parties hereto, no
investigation or proceeding for that purpose shall have been instituted or
be pending, threatened or contemplated under the 1933 Act.
8.5 The Trust and the Corporation shall have received an opinion of
Dickstein Shapiro Morin & Oshinsky LLP substantially to the effect that for
Federal income tax purposes:
(a) The transfer of all of the Acquired Fund net assets in
exchange for the Acquiring Fund Shares and the distribution of the
Acquiring Fund Shares to the Acquired Fund Shareholders in liquidation of
the Acquired Fund will constitute a "reorganization" within the meaning of
Section 368(a)(1)(C) of the Code; (b) No gain or loss will be recognized by
the Acquiring Fund upon the receipt of the assets of the Acquired Fund
solely in exchange for the Acquiring Fund Shares; (c) No gain or loss will
be recognized by the Acquired Fund upon the transfer of the Acquired Fund
assets to the Acquiring Fund in exchange for the Acquiring Fund Shares or
upon the distribution (whether actual or constructive) of the Acquiring
Fund Shares to Acquired Fund Shareholders in exchange for their shares of
the Acquired Fund; (d) No gain or loss will be recognized by the Acquired
Fund Shareholders upon the exchange of their Acquired Fund shares for the
Acquiring Fund Shares; (e) The tax basis of the Acquired Fund assets
acquired by the Acquiring Fund will be the same as the tax basis of such
assets to the Acquired Fund immediately prior to the Reorganization;
(f) The tax basis of the Acquiring Fund Shares received by each of the
Acquired Fund Shareholders pursuant to the Reorganization will be the same
as the tax basis of the Acquired Fund shares held by such shareholder
immediately prior to the Reorganization; (g) The holding period of the
assets of the Acquired Fund in the hands of the Acquiring Fund will include
the period during which those assets were held by the Acquired Fund; and
(h) The holding period of the Acquiring Fund Shares to be received by each
Acquired Fund Shareholder will include the period during which the Acquired
Fund shares exchanged therefor were held by such shareholder (provided the
Acquired Fund shares were held as capital assets on the date of the
Reorganization).
9.TERMINATION OF AGREEMENT.
9.1 This Agreement and the transactions contemplated hereby may be
terminated and abandoned by resolution of the Board of Directors of the
Corporation or the Board of Trustees of the Trust at any time prior to the
Closing Date (and notwithstanding any vote of the Acquired Fund
Shareholders) if circumstances should develop that, in the opinion of
either of the parties' Board, make proceeding with the Agreement
inadvisable.
9.2 If this Agreement is terminated and the exchange contemplated
hereby is abandoned pursuant to the provisions of this Section 9, this
Agreement shall become void and have no effect, without any liability on
the part of any party hereto or the directors, trustees or officers of the
Corporation or the Trust or the shareholders of the Acquiring Fund or of
the Acquired Fund, in respect of this Agreement.
10. WAIVER.
At any time prior to the Closing Date, any of the foregoing
conditions may be waived by the Board of Trustees of the Trust or the Board
of Directors of the Corporation, if, in the judgment of either, such waiver
will not have a material adverse effect on the benefits intended under this
Agreement to the shareholders of the Acquiring Fund or of the Acquired
Fund, as the case may be.
11. MISCELLANEOUS.
11.1 None of the representations and warranties included or provided
for herein shall survive consummation of the transactions contemplated
hereby.
11.2 This Agreement contains the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof, and
merges and supersedes all prior discussions, agreements, and understandings
of every kind and nature between them relating to the subject matter
hereof. Neither party shall be bound by any condition, definition,
warranty or representation, other than as set forth or provided in this
Agreement or as may be set forth in a later writing signed by the party to
be bound thereby.
11.3 This Agreement shall be governed and construed in accordance with
the internal laws of the State of New York, without giving effect to
principles of conflicts of laws.
11.4 This Agreement may be executed in any number of counterparts,
each of which, when executed and delivered, shall be deemed to be an
original.
11.5 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein
expressed or implied is intended or shall be construed to confer upon or
give any person, firm or corporation, other than the parties hereto and
their respective successors and assigns, any rights or remedies under or by
reason of this Agreement.
11.6 The Acquired Fund is hereby expressly put on notice of the
limitation of liability as set forth in Article XI of the Declaration of
Trust of the Trust and agrees that the obligations assumed by the Acquiring
Fund pursuant to this Agreement shall be limited in any case to the
Acquiring Fund and its assets and the Acquired Fund shall not seek
satisfaction of any such obligation from the shareholders of the Acquiring
Fund, the trustees, officers, employees or agents of the Trust or any of
them.
11.7 An agreement has been entered into under which Federated
Management will assume substantially all of the expenses of the
reorganization including registration fees, transfer taxes (if any), the
fees of banks and transfer agents and the costs of preparing, printing,
copying and mailing proxy solicitation materials to the Acquired Fund's
shareholders and the costs of holding the Special Meeting of Shareholders.
ARM Financial Group, Inc. will assume the legal fees of the Acquired Fund.
The accountants' fees of the Acquired Fund will be borne equally by
Federated Management and ARM Financial Group, Inc.
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IN WITNESS WHEREOF, the Acquired Fund and the Acquiring Fund have
each caused this Agreement and Plan of Reorganization to be executed and
attested on its behalf by its duly authorized representatives as of the
date first above written.
Acquired Fund:
STATE BOND MONEY FUNDS, INC.,
on behalf of its portfolio,
STATE BOND CASH MANAGEMENT FUND
Attest:
By: /s/ Kevin L. Howard
Kevin L. Howard
Vice President and Secretary
/s/ Sheri Bean
Sheri Bean
Assistant Secretary
Acquiring Fund:
MONEY MARKET OBLIGATIONS TRUST
on behalf of its portfolio,
AUTOMATED CASH MANAGEMENT
TRUST
Attest:
By: /s/ J. Christopher Donahue
J. Christopher Donahue
President
/s/ S. Elliot Cohan
S. Elliott Cohan
Assistant Secretary
