Reg. No.333-
-----
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
It is proposed that this filing will become effective on April 23, 1997
pursuant to Rule 488. (Approximate Date of Proposed Public Offering).
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.
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, and the William Penn Portfolio
6.Information About the Information About the Federated Fund
Company Being Acquired and the William Penn Portfolio
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
WILLIAM PENN INTEREST INCOME FUND
MONEY MARKET INCOME PORTFOLIO
2650 WESTVIEW DRIVE
WYOMISSING, PA 19610
Dear Shareholders:
The Board of Trustees and management of William Penn Interest Income
Fund: Money Market Income Portfolio (the `William Penn Portfolio'') are
pleased to submit for your vote a proposal for the tax-free transfer of all
the assets of the William Penn Portfolio 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 William Penn Portfolio 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 William Penn
Portfolio would receive shares of the Federated Fund equal in value to their
shares in the William Penn Portfolio and the William Penn Portfolio would be
liquidated. Shareholders would not have to pay a sales charge 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. Further, William Penn fund group shareholders who were invested
as of November 30, 1988 will not be charged a sales charge for future
purchases of the Federated Fund and shareholders of the William Penn Portfolio
will not be charged a sales charge for future purchases made in any other
Federated Fund, provided the account has remained open since that date.
The Board of Trustees of the William Penn Portfolio, as well as Penn
Square Management Corporation, the William Penn Portfolio's manager and
distributor, believe the proposed agreement and plan of reorganization is in
the best interests of William Penn Portfolio shareholders for the following
reasons:
-- The Federated Fund has an investment objective similar to that of
the William Penn Portfolio and offers an investment portfolio which
invests in short-term money market securities to achieve current
income.
-- The Federated Fund offers competitive performance and comparable
expense ratios.
-- As an investor in the Federated Fund, shareholders would have
access to a dramatically expanded array of investment alternatives in
the Federated retail family of funds.
-- Federated Investors also has an excellent reputation for customer
servicing, having received a #1 rating for five surveys 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 and efficient routing of telephone
calls to the appropriate person.
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 $110 billion invested across more
than 300 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 family management who founded the company in 1955. Federated funds
are presently at work in and through 4,500 financial institutions nationwide.
We believe the transfer of the William Penn Portfolio'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 William Penn Portfolio'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 TRUSTEES BELIEVES THAT THE TRANSACTION IS IN THE BEST
INTERESTS OF THE WILLIAM PENN PORTFOLIO AND ITS SHAREHOLDERS, AND UNANIMOUSLY
RECOMMENDS THAT YOU VOTE FOR ITS APPROVAL.
Thank you for your prompt attention and participation.
Sincerely,
James E. Jordan
President
WILLIAM PENN INTEREST INCOME FUND
MONEY MARKET INCOME PORTFOLIO
2650 WESTVIEW DRIVE
WYOMISSING, PA 19610
NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS
TO SHAREHOLDERS OF WILLIAM PENN INTEREST INCOME FUND,
MONEY MARKET INCOME PORTFOLIO:
A Special Meeting of Shareholders of Money Market Income Portfolio, a
portfolio of William Penn Interest Income Fund (the `William Penn Portfolio'')
will be held at 9:00 a.m. (general meeting) and 9:30 a.m. (Fund meeting) on
May 29,1997 at: Sheraton Berkshire Motor Inn, 1741 Paper Mill Road,
Wyomissing, PA 19610, for the following purposes:
1. To approve or disapprove a proposed Agreement and Plan of
Reorganization between the William Penn Portfolio and Automated Cash
Management Trust (the "Federated Fund"), whereby the Federated Fund would
acquire all of the assets and assume certain liabilities of the William Penn
Portfolio in exchange for the Federated Fund's Cash II Shares to be
distributed pro rata by the William Penn Portfolio to the holders of its Cash
II Shares in complete liquidation of the William Penn Portfolio; and
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
By Order of the Board of Trustees,
Dated: [ ] Sandra J. Houck
Secretary
Shareholders of record at the close of business on [ ], 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
[ ]
Acquisition of the Assets of
MONEY MARKET INCOME PORTFOLIO,
a portfolio of WILLIAM PENN INTEREST INCOME FUND
2650 Westview Drive
Wyomissing, PA 19610
Telephone Number: 1-800-523-8440
By and in exchange for Cash II 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 (the
`Trust''), a Massachusetts business trust, would acquire all of the assets and
assume certain liabilities of Money Market Income Portfolio (the `William Penn
Portfolio'), a portfolio of William Penn Interest Income Fund (the
`Pennsylvania Trust''), a Pennsylvania common law trust, in exchange for the
Federated Fund's Cash II Shares to be distributed pro rata by the William Penn
Portfolio to the holders of its shares, in complete liquidation of the William
Penn Portfolio. As a result of the Plan, each shareholder of the William Penn
Portfolio will become the owner of the Federated Fund's Cash II Shares having
a total net asset value equal to the total net asset value of his or her
holdings in the William Penn Portfolio's shares.
THE BOARD OF TRUSTEES OF THE WILLIAM PENN PORTFOLIO UNANIMOUSLY
RECOMMENDS APPROVAL OF THE PLAN.
The shares of each of the Federated Fund and the William Penn
Portfolio represent interests in separate open-end, management investment
companies. 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 William Penn
Portfolio's investment objective is to maximize current income, consistent
with the preservation of capital and maintenance of liquidity, from investing
in specific short-term money market instruments. For a comparison of the
investment policies of the Federated Fund and the William Penn Portfolio, 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
[ ], 1997 (relating to this Prospectus/Proxy Statement), the Annual
------------
Report to Shareholders dated July 31, 1996, and Semi-Annual Report to
Shareholders dated January 31, 1997, 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, the Annual Report, and the Semi-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 NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS/PROXY STATEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Penn Square Management Corp.
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 Penn Square Management Corporation,
The William Penn Company 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 and the William Penn Portfolio
Automated Cash Management Trust ........................
William Penn Interest Income Fund, Money Market Income Portfolio
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 William Penn Pro Forma
Cash II Shares Portfolio 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)
(after expense reimbursements or waivers)
Management Fee 0.19%(2) 0.34% (3) 0.19%(2)
12b-1 Fee(4) 0.17% 0.00% 0.17%
Total Other Expenses(5) 0.39% 0.31% 0.39%
Total Operating Expenses(6) 0.75% 0.65% 0.75%
(1) Wire-transferred redemptions of Cash II Shares of the Federated Fund of
less than $5,000 may be subject to additional fees. A $10.00 fee will be
charged for redemptions of William Penn Portfolio shares by wire transfer.
(2) The management fee has 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 is net of expense reimbursements. Without such
reimbursements, the management fee would have been 0.50%.
(4) The 12b-1 fee has been reduced to reflect the voluntary waiver of a
portion of the 12b-1 fee. The 12b-1 services provider can terminate this
voluntary waiver at any time at its sole discretion. The maximum 12b-1 fee is
0.25% for the Federated Fund and 0.50% for the William Penn Portfolio.
(5) Total Other Expenses include a shareholder services fee of 0.25% for the
Federated Fund and the Pro Forma Combined fund and a shareholder services fee
of 0.00% for the William Penn Portfolio. The shareholder services fee has
been reduced to reflect the voluntary waiver of a portion of the shareholders
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% for the Federated Fund and the Pro Forma Combined Fund and 0.50%
for the William Penn Portfolio.
(6) The Total Operating Expenses for Cash II Shares of the Federated Fund are
based on expenses expected during its fiscal year ending July 31, 1997. The
total operating expenses for the William Penn Portfolio are based upon
expenses incurred by the William Penn Portfolio during its fiscal year ended
December 31, 1996, and would have been 1.04% without expense reimbursements.
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 William Penn Portfolio 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."
EXAMPLES
The Examples below are intended to assist an investor in understanding
the various costs that an investor will bear directly or indirectly. The
Examples assume payment of operating expenses at the levels set forth in the
table above.
This Example does not include sales charges or contingent deferred sales
charges since such sales charges are not applicable to Federated Fund Cash II
Shares received as a result of the proposed reorganization.
An investor would pay the following expenses on a
1,000 investment, assuming (1) 5% annual return and
(2) redemption at the end of each time period. Expenses
would be the same if there were no redemption at the
end of each time period. 1 year 3 years 5 years 10 years
Federated Fund $8 $24 $42 $93
William Penn Portfolio $7 $21 $36 $81
Pro Forma Combined $8 $24 $42 $93
THE ABOVE EXAMPLES 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 Statement of Additional Information dated April , 1997, related to
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 William Penn Portfolio
dated March 15, 1996, the Statement of Additional Information of the William
Penn Portfolio dated March 15, 1996, and the Plan, a copy of which is attached
to this Prospectus/Proxy Statement as Exhibit A, all of which are incorporated
herein by reference thereto.
About the Proposed Reorganization
The Board of Trustees of the William Penn Portfolio has voted
unanimously to recommend to holders of the shares of the William Penn
Portfolio the approval of the Plan whereby the Federated Fund, a portfolio of
the Trust, would acquire all of the assets and assume certain liabilities of
the William Penn Portfolio in exchange for the Federated Fund's Cash II Shares
to be distributed pro rata by the William Penn Portfolio to its shareholders
in complete liquidation and dissolution of the William Penn Portfolio (the
"Reorganization"). As a result of the Reorganization, each shareholder of the
William Penn Portfolio shares will become the owner of the Federated Fund's
Cash II Shares having a total net asset value equal to the total net asset
value of his or her holdings in the William Penn Portfolio 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
William Penn Portfolio 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
William Penn Portfolio or the shareholders of the William Penn Portfolio. The
tax basis of the Federated Fund's Cash II Shares received by William Penn
Portfolio's shareholders will be the same as the tax basis of their shares in
the William Penn Portfolio. After the acquisition is completed, the William
Penn Portfolio 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 objective of the William Penn Portfolio is to maximize
current income, consistent with the preservation of capital and maintenance of
liquidity, from investments in specific short-term money market instruments.
This investment objective may not be changed without the affirmative vote of a
majority of the outstanding voting securities of the William Penn Portfolio,
as defined in the 1940 Act.
Both the Federated Fund and the William Penn Portfolio are money
market mutual funds that seek to maintain a stable net asset value of $1.00
per share. There can be no assurances that either the Federated Fund or the
William Penn Portfolio will be able to maintain such a stable net asset value.
The Federated Fund and the William Penn Portfolio are subject to the
investment restrictions of Rule 2a-7 of the 1940 Act which requires that each
fund maintain a dollar-weighted average 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 in the prospectus, 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 William Penn Portfolio's investment policy includes investing in
the following money market instruments: (1) negotiable certificates of
deposit, Euro-dollar deposits, bankers' acceptances and time deposits of U.S.
banks and U.S. branches of foreign banks having total assets in excess of $1
billion; (2) commercial paper (including variable amount master demand notes)
rated A-1 by S&P, or P-1 by Moody's, or, if not rated, issued by a corporation
having an outstanding unsecured debt issue rated AA or better by S&P, or Aa or
better by Moody's; (3) U.S. Government short-term obligations, including
Treasury bills, notes, and bonds that mature within one year, and short-term
securities of federal agencies and instrumentalities, including the Federal
Home Loan Banks, Federal Land Banks, Government National Mortgage Association,
Federal Intermediate Credit Bank, Federal Financing Bank, and the Tennessee
Valley Authority; (4) securities listed above, subject to repurchase
agreements. Five percent of the portfolio may be held in second tier paper,
such as A-2 or P-2. The William Penn Portfolio will limit its investments to
those U.S. dollar denominated instruments that the adviser, under the
supervision of the Trustees: (a) determines present minimal credit risk and
are of `high quality,'' as indicated by high S&P or Moody's ratings or, (b) in
the case of any instrument that is not rated, determines is of comparable
quality. All of the securities in the William Penn Portfolio will mature
within one year, and the average maturity of the William Penn Portfolio will
be 90 days or less. The William Penn Portfolio is expected to maintain a net
asset value of $1.00 per share for purposes of sales and redemptions, although
there an be no assurance it will be able to do so. Unless otherwise
designated in the prospectus, the investment policies of the William Penn
Portfolio may be changed by the Board of Trustees without Shareholder
approval.
Both the Federated Fund and the William Penn Portfolio 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 William Penn Portfolio has investment limitations stating that it
may not: (1) invest more than 5% of the value of its assets in the securities
of any single issuer (except of the U.S. Government, its agencies or
instrumentalities); (2) purchase more than 10% of the voting securities of any
issuer; (3) invest more than 5% of its assets in companies with a continuous
operating history (including predecessors) of less than 3 years; (4) invest
more than 25% of its assets in any one industry, with the exception of
obligations of the U.S. Government or its agencies and instrumentalities; (5)
borrow money, except from a bank and only for temporary or emergency purposes.
Any such borrowings may not exceed 5% of the lower of the value or cost of the
William Penn Portfolio's total assets; (6) pledge, mortgage, or other
hypothecate its assets to an extent greater than 5% of the value of its total
assets; or (7) invest more than 10% of the value of its assets in illiquid
securities, including restricted securities, and repurchase agreements
maturing in more than seven days. The above investment limitations of the
William Penn Portfolio cannot be changed without shareholder approval.
In addition to the policies and limitations set forth above, both the
Federated Fund and the William Penn Portfolio 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
William Penn Portfolio's Statement of Additional Information dated March 15,
1996. Reference is hereby made to the Federated Fund's Prospectus and
Statement of Additional Information, each dated September 30, 1996, and to the
William Penn Portfolio's Prospectus and Statement of Additional Information,
each dated March 15, 1996, which set forth in full the investment objective,
policies and investment limitations of each of the Federated Fund and the
William Penn Portfolio, 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
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 the Federated Fund for certain operating expenses. This
voluntary waiver or reimbursement of expenses may be terminated by Federated
Management at any time in its sole discretion. The maximum annual management
fee for the William Penn Portfolio is 0.50% of average daily net assets of the
William Penn Portfolio. The investment adviser of the William Penn Portfolio
is Penn Square Management Corporation. The adviser is a wholly owned
subsidiary of The William Penn Company, New York, York. Miller, Anderson &
Sherrerd LLP (the `Sub-Adviser'') serves as an investment adviser for the
William Penn Portfolio pursuant to a sub-advisory agreement with the Adviser.
The Sub-Adviser, a wholly owned subsidiary of Morgan Stanley Group Inc., was
organized in 1969 and is located in West Conshohocken, Pennsylvania. The Sub-
Adviser provides management services to employee benefit plans, endowment
funds, foundations, and other institutional investors, and currently manages
assets in excess of $30 billion. Under an agreement entered into with the
Adviser, the Sub-Adviser provides investment advisory services for the William
Penn Portfolio and is compensated solely by the Adviser. The Adviser pays the
Sub-Adviser a fee based on the aggregate net asset value of the William Penn
Portfolios, as follows: .375% on the first $50,000,000, .25% on the next
$50,000,000 and .20% over $100,000,000.
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% on the first $250 million of all such funds' average
aggregate daily net assets, 0.125% on the next $250 million, 0.10% on the next
$250 million and 0.075% 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 fiscal year
ended July 31, 1996 was $954,191, representing an effective fee rate of [
]. Administrative personnel and services necessary to operate the
William Penn Portfolio are currently provided by Penn Square Management
Corporation and are included in the annual transfer agent fee for the William
Penn Portfolio.
The Federated Fund has entered into a Shareholder Services Agreement
under which it may make payments of up to 0.25% of the average daily net asset
value of each of the Cash II 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, either will 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.
The total annual operating expenses for shares of the William Penn
Portfolio were 0.65% of average daily net assets (after expense
reimbursements) for its most recent fiscal year. Without such reimbursements,
the expense ratio of the William Penn Portfolio would be higher by 0.39%.
Distribution Arrangements
Federated Securities Corp. ("FSC"), an affiliate of Federated
Management, is the principal distributor for shares of the Federated Fund.
Cash II Shares of the Federated fund are sold at net asset value, without a
sales charge, next determined after an order is received. Under a
distribution plan adopted in accordance with Investment Company Act Rule 12b-1
(the `Distribution Plan''), the distributor may be paid an amount computed at
an annual rate of .25% of the average daily net asset value of Cash II Shares
to finance any activity which is principally intended to result in the sale of
shares subject to the Distribution Plan. The distributor may select financial
institutions such as banks, fiduciaries, custodians for public funds,
investment advisers, and broker/dealers to provide services or distribution-
related support services as agents for their clients or customers. The
Distribution Plan is a compensation-type plan. As such, the Fund makes no
payments to the distributor except as described above. Further, 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.
Penn Square Management Corporation is the principal distributor for
shares of the William Penn Portfolio. The William Penn Portfolio has adopted
but not paid fees pursuant to a Rule 12b-1 Distribution Plan with respect to
the William Penn Portfolio's shares.
Purchase, Exchange and Redemption Procedures
The transfer agent and dividend disbursing agent for the Federated
Fund is Federated Shareholder Services Company. The transfer agent and
dividend disbursing agent for the William Penn Portfolio is Penn Square
Management Corporation. Procedures for the purchase, exchange and redemption
of the Federated Fund's Cash II Shares differ slightly from procedures
applicable to the purchase, exchange and redemption of the William Penn
Portfolio's shares. Any questions about such procedures may be directed to,
and assistance in effecting purchases, exchanges or redemptions of the
Federated Fund's Cash II Shares or the William Penn Portfolio's shares may be
obtained from FSC, principal distributor for the Federated Fund, at 1-800-341-
7400, or from Penn Square Management Corporation, principal distributor for
the William Penn Portfolio, at 1-800-523-8440.
Reference is made to the Prospectus of the Federated Fund dated
September 30, 1996, and the Prospectus of the William Penn Portfolio dated
March 15, 1996, for a complete description of the purchase, exchange and
redemption procedures applicable to purchases, exchanges and redemptions of
Federated Fund and William Penn Portfolio 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 Cash II Shares and the William Penn
Portfolio's shares.
Purchases of Cash II Shares of the Federated Fund may be made through
a financial institution that has an agreement with FSC or, once an account has
been established, by wire, check, phone or direct deposit. Purchases of
shares of the William Penn Portfolio may be made through Penn Square
Management Corporation and through certain broker-dealers under contract with
Penn Square Management Corporation 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. For purposes of the
minimum initial investment, all William Penn Portfolio shareholders accounts
maintained by Penn Square Management Corporation will be combined to meet the
minimum investment requirement. The minimum initial investment in the William
Penn Portfolio is $500, except for retirement accounts for which the minimum
is $250. Subsequent investments must be in amounts of at least $100. The
Federated Fund and the William Penn Portfolio each reserves the right to
reject any purchase request.
The purchase price of the Federated Fund's Cash II Shares and the
William Penn Portfolio'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 of the
William Penn Portfolio is calculated at the close of business on the day the
order is received. 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. For the William
Penn Portfolio, daily dividends will be credited to shares of record the
previous business day, providing such shares have been properly paid for.
Holders of Cash II Shares of the Federated Fund have exchange
privileges with respect to 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. Cash II Shares of 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. Cash II 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. To the extent
a shareholder exchanges Cash II Shares of the Federated Fund for shares of
other Federated Funds, the time for which the exchanged-for shares are to be
held will be added to the time for which exchanged-from shares were held for
purposes of satisfying the applicable holding period for purposes of
determining any applicable contingent deferred sales charge. Holders of shares
of the William Penn Portfolio have exchange privileges with respect to shares
in certain of the other funds for which Penn Square Management Corporation
serves as investment manager (collectively, the `William Penn fund group''),
each of which has different investment objectives and policies. Any exchange
for shares of other funds in the William Penn fund group will generally be at
the respective net asset values next determined after receipt of the request
for exchange, provided the amount exchanged previously incurred a sales
charge. 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 William Penn Portfolio, as appropriate.
Redemptions of Federated Fund Cash II Shares may be made through a
financial institution, by telephone, by mailing a written request.
Redemptions of William Penn Portfolio shares may be made by presenting share
certificates, by letter form, by telephone, or through the William Penn
Portfolio's systematic withdrawal plan. Cash II 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 it net
asset value. Redemption orders for shares of the William Penn Portfolio
presented prior to the close of the NYSE on any business day are redeemed at
the net asset value at the close of the exchange on that day. Redemptions may
be made through a broker/dealer, and that broker/dealer may charge a
transaction fee. Checks for redemption proceeds will be mailed within three
business days. However, redemption checks will not be mailed until all checks
in payment for the shares redeemed have been cleared.
Dividends
Both the Federated Fund and the William Penn Portfolio declare
dividends daily and pay dividends monthly from net investment income and make
annual distributions of net realized capital gains, if any. With respect to
both the Federated Fund and the William Penn Portfolio, unless a shareholder
otherwise instructs, dividends and capital gain distributions will be
reinvested automatically in additional shares at net asset value, subject to
no sales charge.
Tax Consequences
As a condition to the Reorganization, the Federated Fund and the
Trust, on behalf of the William Penn Portfolio 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 William Penn Portfolio or the
shareholders of the William Penn Portfolio. The tax basis of the Federated
Fund shares received by William Penn Portfolio shareholders will be the same
as the tax basis of their shares in the William Penn Portfolio.
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
William Penn Portfolio also invests in money market instruments, these risk
factors are generally also present in an investment in the William Penn
Portfolio. A full discussion of the risks inherent in investment in the
Federated Fund and the William Penn Portfolio is set forth in the Federated
Fund's Prospectus and Statement of Additional Information, each dated
September 30, 1996, and the William Penn Portfolio's Prospectus and Statement
of Additional Information, each dated March 15, 1996, each of which is
incorporated herein by reference thereto.
INFORMATION ABOUT THE REORGANIZATION
Background and Reasons for the Proposed Reorganization
Considerations of the Board of Trustees of the William Penn Portfolio.
On February 12, 1997, Penn Square Management Corporation advised the Board of
Trustees of the William Penn Portfolio that The William Penn Company was
considering redirecting its corporate strategy away from the management and
distribution of retail mutual funds and that it was seeking a buyer for its
core businesses. Moreover, Penn Square Management Corporation engaged an
investment banker to locate potential buyers for the Corporation. The
potential buyer would provide value-added shareholder services, technological
advancements, comprehensive distribution networks, and diversified mutual fund
product choices that many larger mutual fund complexes offer. After
conducting a screening process, Penn Square Management Corporation determined
that in its judgment, the proposed Reorganization was the most desirable
alternative involving the William Penn Portfolio that was reasonably available
and that it should be presented to the William Penn Portfolio's Board of
Trustees for its consideration.
The independent trustees formed a four-person due diligence team. The
due diligence team visited the Federated Investors offices in Pittsburgh,
Pennsylvania, and reviewed with the portfolio manager of the Federated Fund
the investment style and philosophy used to manage the assets of the Federated
Fund. In addition, the due diligence team inspected the Federated customer
services area and the William Penn Portfolio's independent counsel inspected
the legal records of the Federated Fund.
A meeting of the entire Board of Trustees was held on March 5, 1997,
at which Federated Investors 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 $110 billion invested across more than
300 funds under management and/or administration by its subsidiaries, and over
2,000 employees. Federated's management discussed the Federated Fund's
investment performance history and 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 William Penn fund group,
the exchange privileges that would be available to former William Penn
Portfolio 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 William Penn Portfolio would receive shares of the
Federated Fund without the imposition of any sales charge and without
incurring any tax consequences.
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 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 William Penn
Portfolio and considered potential economies of scale that might be
experienced by former William Penn Portfolio shareholders if they were to
become shareholders of a larger fund.
The Board determined that the investment objectives and policies of
the William Penn Portfolio were substantially similar to those of the
Federated Fund. The Board was also presented with and discussed materials
comparing the performance, and relative risks of the William Penn Portfolio
and the Federated Fund. Federated's management also presented biographical
information about each of the Trustees of the Federated Fund and reviewed with
the Board the structure of its compliance and internal audit departments and
the scope of its training programs.
The Board noted that the William Penn Portfolio would not bear any of
the costs involved in the Reorganization, which would be borne entirely by The
William Penn Company and/or Federated. In addition, the Board discussed the
anticipated tax-free nature of the Reorganization to the William Penn
Portfolio 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 Penn Square Management Corporation), may
receive an 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 Trustees 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) Directors, 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 Penn Square
Management Corporation that the agreement between Federated and The William
Penn Company would contain representations and covenants that the
Reorganization would not impose an unfair burden on the Penn Square Group.
After reviewing and considering all of the information provided by
Federated and Penn Square Management Corporation, including the terms of the
Reorganization, the Board, including all of the Trustees who are not
interested persons of the William Penn Portfolio or Penn Square Management
Corporation, voted unanimously in person at the meeting held on March 5, 1997,
to approve the Reorganization and to recommend it to the shareholders of the
William Penn Portfolio 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 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 William Penn fund group Shareholders, The William Penn Company
and Federated
The Reorganization is being proposed as part of an agreement between
Federated, The William Penn Company and the William Penn fund group
Shareholders, pursuant to which the shareholders of The William Penn Company
would be compensated for selling to Federated its capital stock and
cooperating in facilitating the transaction contemplated by the agreement.
Description of the Plan of Reorganization
The Plan provides that the Federated Fund will acquire all of the
assets and assume certain liabilities of the William Penn Portfolio in
exchange for the Federated Fund's Cash II Shares to be distributed pro rata by
the William Penn Portfolio to its shareholders in complete liquidation of the
William Penn Portfolio on or about [ ] (the "Closing Date").
Shareholders of the William Penn Portfolio will become 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 William Penn Portfolio 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
William Penn Portfolio'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 William Penn Portfolio and 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 William Penn Portfolio prior to the
Closing Date if a majority of the independent board members of either board
reasonably believes that continuing this transaction would have a material
adverse impact on shareholders of that fund.
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), and the costs of
preparing, printing, copying and mailing proxy solicitation materials to the
William Penn Portfolio shareholders. Penn Square Management Corporation is
responsible for the payment of the legal and accounting fees of the William
Penn Portfolio.
The foregoing description of the Plan entered into between the
Federated Fund and the William Penn Portfolio 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 Cash II Shares of the Federated Fund will be
issued without the imposition of a sales charge or other fee to the
corresponding shareholders of the William Penn Portfolio in accordance with
the procedures described above. Cash II Shares of the Federated Fund to be
issued to shareholders of the William Penn Portfolio 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 Cash II 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 Pennsylvania Trust, on behalf of the William Penn
Portfolio, will receive an opinion from Dickstein Shapiro Morin & Oshinsky
LLP, counsel to the Federated Fund, 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 William Penn Portfolio's assets solely
in exchange for Federated Fund Cash II Shares and the assumption of certain
stated liabilities; (3) no gain or loss will be recognized by the William Penn
Portfolio upon the transfer of its assets to the Federated Fund in exchange
for Federated Fund Cash II Shares and the assumption of certain stated
liabilities or upon the distribution (whether actual or constructive) of the
Federated Fund Cash II Shares to the William Penn Portfolio shareholders in
exchange for their shares of the William Penn Portfolio; (4) no gain or loss
will be recognized by shareholders of the William Penn Portfolio upon the
exchange of their William Penn Portfolio shares for Federated Fund Cash II
Shares; (5) the tax basis of the William Penn Portfolio's assets acquired by
the Federated Fund will be the same as the tax basis of such assets to the
William Penn Portfolio immediately prior to the Reorganization; (6) the tax
basis of Federated Fund Cash II Shares received by each shareholder of the
William Penn Portfolio pursuant to the Plan will be the same as the tax basis
of William Penn Portfolio shares held by such shareholder immediately prior to
the Reorganization; (7) the holding period of the assets of the William Penn
Portfolio in the hands of the Federated Fund will include the period during
which those assets were held by the William Penn Portfolio; and (8) the
holding period of Federated Fund Cash II Shares received by each shareholder
of the William Penn Portfolio will include the period during which the William
Penn Portfolio shares exchanged therefor were held by such shareholder,
provided the William Penn Portfolio 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 William
Penn Portfolio 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 William Penn Portfolio, followed by the taxable liquidation
of the William Penn Portfolio.
Comparative Information on Shareholder Rights and Obligations
General. Both the Trust and the William Penn Portfolio are open-end
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 and is governed by its Declaration
of Trust, By-Laws and Board of Trustees, in addition to applicable state and
federal law. The William Penn Portfolio is organized as a separate series of
William Penn Interest Income Fund as a common law trust under the laws of the
Commonwealth of Pennsylvania and is governed by its Declaration of Trust and
Board of Trustees, in addition to applicable state and federal law. Set forth
below is a brief summary of the significant rights of shareholders of the
Federated Fund and the William Penn Portfolio.
Shares of the Federated Fund and the William Penn Portfolio. The
Federated Fund 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 William Penn Portfolio is also authorized to issue
an unlimited number of shares of beneficial interest which have no par value.
The William Penn Portfolio is currently one of five investment portfolios of
William Penn Interest Income Fund. Issued and outstanding shares of both the
Federated Fund and William Penn Portfolio are fully paid and nonassessable,
and freely transferable.
Voting Rights. Neither the Trust nor the William Penn Portfolio 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 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 William Penn Portfolio is
required to be called upon the written request of shareholders representing
not less than 30% of the issued and outstanding shares entitled to vote. Each
share of the Federated Fund and the William Penn Portfolio gives the
shareholder one vote in director elections and other matters submitted to
shareholders for vote. All shares of each series or class in the Federated
Fund and the William Penn Portfolio have equal voting rights except that in
matters affecting only a particular series or class, only shares of that
series or class are entitled to vote.
Trustees. 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 Declaration of Trust of the William Penn Portfolio
provides that each Trustee appointed or elected in accordance with the
Declaration of Trust serves until their successors have been elected and
qualified, unless they resign or are removed. Regarding the William Penn
Portfolio, a majority of the Trustees may accept the written resignation of
another Trustee or may remove him or her from office by written notice to him
and to the custodian. In addition, the holders of record of not less than
two-thirds of the outstanding shares of the Portfolio may have a Trustee
removed by filing a declaration with the custodian or by a vote at a meeting
called for such purpose. The Trustees shall promptly call a meeting of
shareholders for the purpose of voting upon removal of such Trustee(s) when
requested in writing by holders of at least 10% of the Portfolio's outstanding
shares. Pending the filling of any vacancy or vacancies caused by death,
resignation, or removal, the remaining Trustee or Trustees shall have all the
powers and duties of the whole number of Trustees. If a vacancy occurs in the
office of a Trustee for any reason, including an increase in the number of
Trustees, the other Trustees shall by written notice delivered to the
custodian appoint a Trustee to fill the vacancy and will promptly notify the
shareholders that they have done so, subject to the provisions of Section
16(a) of the 1940 Act. The agreement to be entered into with the custodian
will provide that, if at any time the custodian decides that there is no
Trustee available or able to serve, it will call a meeting of the shareholders
to elect at least three (3) Trustees. With respect to the Trust, a meeting of
shareholders will be required for the purpose of electing additional Directors
whenever fewer than a majority of the Directors then in office were elected by
shareholders.
Liability of Trustees 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 provide 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 Declaration of Trust for the William Penn Portfolio
contains a provision eliminating personal liability of the Trustees.
Claimants must look only to the assets of the portfolio for payment or
satisfaction of claims. Trustees of the Portfolio are not protected from
liability by reason of willful misconduct, bad faith, recklessness, or gross
negligence in the performance of his duties as Trustee. Further, the Trustees
have the power to indemnify the officers and employees of the Portfolio
against reasonable liabilities and expenses unless incurred in bad faith or
reckless disregard of his duties, or with willful misconduct or gross
negligence. 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.
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 meets 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 William Penn Portfolio, the shareholders of
the respective fund or class are entitled to receive, when and as declared by
its Trustees, the excess of the assets belonging to the respective fund or
class over the liabilities belonging to the respective fund or class. In
either case, the assets belonging to the fund or class will be distributed
among the shareholders in proportion to the number of shares of the respective
fund or class held by them.
Capitalization
The following table sets forth the unaudited capitalization of the
Cash II Shares of the Federated Fund and the shares of the William Penn
Portfolio as of February 28, 1997, and on a pro forma combined basis as of
that date:
Federated Fund William Penn Pro Forma
(Cash II Shares) Portfolio Combined
Net Assets $742,844,207 $20,454,222 $763,298,429
Net Asset Value Per Share $1.00 $1.00 $1.00
Shares Outstanding 742,844,207 20,454,222 763,298,429
INFORMATION ABOUT THE FEDERATED FUND
AND THE WILLIAM PENN PORTFOLIO
Automated Cash Management 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 herein by reference. Additional
information about the Federated Fund is included in the Federated Fund's
Statement of Additional Information dated September 30, 1996, and the
Statement of Additional Information dated April , 1997 (relating to this
Prospectus/Proxy Statement), each of which is incorporated herein by
reference. Copies of the 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
1-800-245-5051, 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, or electronically at Internet Web Site
(www.sec.gov).
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.
William Penn Interest Income Fund, Money Market Income Portfolio
Information about the William Penn Interest Income Fund, Money Market
Income Portfolio is contained in the William Penn Portfolio's current
Prospectus dated March 15, 1996, the Annual Report to Shareholders dated
December 31, 1996, the Semi-Annual Report to Shareholders dated June 30, 1996,
the Statement of Additional Information dated March 15, 1996, and the
Statement of Additional Information dated [ ] (relating to this
Prospectus/Proxy Statement), each of which is incorporated herein by
reference. Copies of such Prospectus, Annual Report, Semi-Annual Report, and
Statements of Additional Information, which have been filed with the SEC, may
be obtained upon request and without charge from the William Penn Portfolio by
calling 1-800-523-8440 or by writing to the William Penn Portfolio at 2650
Westview Drive, Wyomissing, PA 19610. The William Penn Portfolio 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 William Penn Interest Income Fund or its portfolio, the
William Penn Portfolio, can be obtained by calling or writing the William Penn
Portfolio 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 Trustees of the William Penn Portfolio of proxies
for use at the Special Meeting of Shareholders (the "Special Meeting") to be
held at 9:00 a.m. (general meeting) and 9:30 a.m. (Fund meeting) (local time)
on May 29, 1997 at: Sheraton Berkshire Motor Inn, 1741 Paper Mill Road,
Wyomissing, PA 19610, 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
William Penn Portfolio an instrument revoking the proxy, by submitting a proxy
bearing a later date or by attending and voting at the Special Meeting.
Proxies, instruments revoking a proxy, or proxies bearing a later date may be
communicated by telephone, by electronic means including facsimile, or by
mail.
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, including third party solicitors, of the William Penn
Portfolio, Federated Management and their respective affiliates at no
additional cost to the William Penn Portfolio. Such solicitations may be by
telephone, telegraph, or personal contact. Any telephonic solicitations will
follow procedures designed to insure accuracy and prevent fraud including
requiring identifying shareholder information, and recording the shareholder's
instructions. Shareholders who communicate proxies by telephone or by other
electronic means have the same power and authority to issue, revoke, or
otherwise change their voting instructions as currently exists for
instructions communicated in written form. 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 Trustees of the William Penn Portfolio has fixed the
close of business on [ ], as the record date for the determination
of shareholders entitled to notice of and to vote at the Special Meeting and
any adjournments thereof. As of the record date, there were [ ] shares
of the William Penn Portfolio outstanding. Each of the William Penn
Portfolio's shares is entitled to one vote and fractional shares have
proportionate voting rights. On the record date, the Trustees and Officers of
the William Penn Portfolio as a group owned less than [ ] of the
outstanding shares of the William Penn Portfolio. To the best knowledge of
Penn Square Management Corporation, as of the record date, no person owned
beneficially or of record 5% or more of the William Penn Portfolio's
outstanding shares.
As of the record date, there were [ ] Cash II Shares of the
Federated Fund outstanding. On the record date, the Directors and officers of
the Federated Fund as a group owned less than 1% of the outstanding Cash II
Shares of the Federated Fund. 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
Cash II Shares.
NAME AND ADDRESS SHARES OWNED PERCENT OF
OUTSTANDING SHARES
Approval of the Plan requires the affirmative vote of a majority of
the outstanding shares of the William Penn Portfolio. 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 William Penn
Portfolio, 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 William Penn Portfolio, 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 William Penn Portfolio objecting to the
Reorganization have no appraisal rights under the William Penn Portfolio's
Declaration of Trust or Pennsylvania law. Under the Plan, if approved by
William Penn Portfolio shareholders, each shareholder will become the owner of
Cash II 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 William Penn
Portfolio's shares, at the Closing Date.
OTHER MATTERS AND DISCRETION OF PERSONS NAMED IN THE PROXY
Management of the William Penn Portfolio knows of no other matters
that may properly be, or which are likely to be, brought before the Special
Meeting. However, if any other business shall properly come before the
Special 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 Special 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 , 1997 (the
--------
"Agreement"), between MONEY MARKET OBLIGATIONS TRUST, a Massachusetts business
trust (the `Massachusetts Trust'') on behalf of its portfolio, AUTOMATED CASH
MANAGEMENT TRUST (hereinafter called the "Acquiring Fund"), and WILLIAM PENN
INTEREST INCOME FUND, a Pennsylvania Common Law Trust (hereinafter called the
"Pennsylvania Trust") on behalf of its portfolio MONEY MARKET INCOME PORTFOLIO
(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 assets and the assumption of certain liabilities of the Acquired Fund in
exchange solely for Cash II 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 Pennsylvania Trust and the Massachusetts 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 Acquiring Fund has determined
that the transfer of all of the assets and the assumption of certain
liabilities 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 Trustees, including a majority of the trustees
who are not "interested persons" (as defined under the 1940 Act), of the
Pennsylvania Trust has determined that the transfer of all of the assets and
the assumption of certain liabilities 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
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 shareholders of the Acquired Fund.
1.2 The Acquired Fund will assume only those certain liabilities which
are set forth in a certificate to be provided by the Acquired Fund at Closing
and accepted by the Acquiring Fund.
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 paragraph 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 Pennsylvania Trust up to and including the
Closing Date and such later dates, with respect to dissolution and
deregistration of the Pennsylvania Trust, on which the Pennsylvania Trust is
dissolved and deregistered.
1.9 The Pennsylvania Trust shall be deregistered as an investment
company under the 1940 Act and dissolved as a Pennsylvania common law trust 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, which practices have been reviewed by
the Acquired Fund's Board of Trustees.
3.CLOSING AND CLOSING DATE.
3.1 The Closing Date shall be [ ] or such later date as the
parties may mutually agree. All acts taking place at the Closing 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 Penn Square Management Corporation, 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 Pennsylvania Trust represents and warrants to the Acquiring Fund
as follows:
(a) The Pennsylvania Trust is a Common Law Trust duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania and has power to own all of its properties and
assets and to carry out this Agreement.
(b) The Pennsylvania Trust is registered under the 1940 Act,
as an open-end, management investment company, and such registration has not
been revoked or rescinded and is in full force and effect.
(c) The Pennsylvania Trust is not, and the execution, delivery
and performance of this Agreement will not result, in material violation of
the Pennsylvania Trust's Declaration of Trust 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 December 31, 1995 and at December 31, 1996 has 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 December 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.
(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, 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 Pennsylvania Trust 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 Massachusetts Trust represents and warrants to the Pennsylvania
Trust as follows:
(a) The Massachusetts 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 Massachusetts 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
Massachusetts 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) The unaudited Statement of Assets and Liabilities of the
Acquiring Fund at January 31, 1996 and 1997 have been prepared in accordance
with generally accepted accounting principles, consistently applied, although
subject to year-end adjustments, and on a basis consistent with the Statement
of Assets and Liabilities of the Acquiring Fund at July 31, 1995 and 1996,
which has been audited by Arthur Andersen LLP, independent auditors, 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 date, and
there are no known liabilities of the Acquiring Fund, contingent or otherwise,
as of such date not disclosed therein.
(h) 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.
(i) 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.
(j) For each fiscal year of its operation, the Acquiring 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 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.
(l) The execution, delivery and performance of this Agreement
has been duly authorized by all necessary action on the part of the
Massachusetts 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).
(m) 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 Pennsylvania Trust 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 Pennsylvania Trust'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(o), 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 and the 1940 Act 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 Section 103(a) of the Code over its
deductions disallowed under Sections 265 and 171(a)(2) of the Code for the
taxable periods or years ended on or before December 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 December 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 Pennsylvania 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.
6.2 The Pennsylvania Trust 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 Pennsylvania Trust.
6.3 The Pennsylvania Trust 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
Pennsylvania 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 Acquiring Fund shall reasonably request.
6.4 The Acquired Fund shall have delivered to the Acquiring Fund a
certificate specifying the liabilities which to be assumed by the Acquiring
Fund, all of which shall be reflected in the net asset value of the Acquired
fund on the Closing Date, which liabilities shall be acceptable to the
Acquiring Fund in its sole discretion.
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 Massachusetts 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 Massachusetts Trust 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
Massachusetts 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 Pennsylvania
Trust'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 Massachusetts Trust and the Pennsylvania Trust 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 assets and the
assumption of certain liabilities 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 and the assumption of certain liabilities; (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 and the
assumption of certain liabilities 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 Trustees of the
Pennsylvania Trust or the Board of Trustees of the Massachusetts Trust at any
time prior to the Closing Date (and notwithstanding any vote of the Acquired
Fund Shareholders) if a majority of the independent board members of either
board reasonably believes that continuing this transaction would have a
material adverse impact on shareholders of that fund.
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 or officers of the Pennsylvania Trust or the
Massachusetts 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 Massachusetts Trust or the Board
of Trustees of the Pennsylvania Trust, 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 Commonwealth of Pennsylvania, 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 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 Shareholders and the costs of
holding the special meeting of shareholders. Penn Square Management
Corporation will assume the legal and accounting fees of the Acquired Fund.
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:
WILLIAM PENN INTEREST INCOME FUND,
on behalf of its portfolio,
Attest: U.S. GOVERNMENT SECURITIES
INCOME PORTFOLIO
By:
Name: Name:
Title: Title:
Acquiring Fund:
Attest: MONEY MARKET OBLIGATIONS TRUST,
on behalf of its portfolio,
AUTOMATED CASH MANAGEMENT TRUST
By:
Name: S. Elliott Cohan Name: J. Christopher Donahue
Title:Assistant Secretary Title: President
STATEMENT OF ADDITIONAL INFORMATION
[ ]
Acquisition of the Assets of
MONEY MARKET INCOME PORTFOLIO,
a Portfolio of
WILLIAM PENN INTEREST INCOME FUND
2650 Westview Drive
Wyomissing, Pennsylvania 19610
Telephone Number: 1-800-523-8440
By and in exchange for Cash II Shares of
MONEY MARKET OBLIGATIONS TRUST,
on behalf of its portfolio,
AUTOMATED CASH MANAGEMENT TRUST
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Telephone Number: 1-800-341-7400
This Statement of Additional Information dated [ ] is not a
prospectus. A Prospectus/Proxy Statement dated [ ] related to the above-
referenced matter may be obtained from Automated Cash Management Trust, a
portfolio of 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 Money Market Income Portfolio, a
portfolio of William Penn Interest Income Fund, dated March 15, 1996.
3. Financial Statements of Automated Cash Management Trust, a portfolio of
Money Market Obligations Trust, dated July 31, 1996.
4. Financial Statements of Money Market Income Portfolio, a portfolio of
William Penn Interest Income Fund, dated December 31, 1996.
5. The unaudited financial statements of Automated Cash Management Trust, a
portfolio of Money Market Obligations Trust, dated January 31, 1997
The Statement of Additional Information of Automated Cash Management
Trust, a portfolio of Money Market Obligations Trust (the "Federated Fund"),
dated September 30, 1996, is incorporated herein by reference to Post-
Effective Amendment No.20 to the Federated Fund'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 23, 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 Money Market Income
Portfolio (the "William Penn Portfolio"), a portfolio of William Penn Interest
Income Fund (the "Trust"), dated March 15, 1996, is incorporated herein by
reference to Post-Effective Amendment No. 16to the Trust's Registration
Statement on Form N-1A (File Nos. 33-14609 and 811-5177) which was filed with
the Securities and Exchange Commission on or about March 21, 1996. A copy may
be obtained, upon request and without charge, from the William Penn Portfolio
at 2650 Westview Drive, Wyomissing, Pennsylvania 19610; telephone number: 1-
800-523-8440.
The audited financial statements of the Federated Fund, dated July 31,
1996, are incorporated herein by reference to the Federated Fund's Prospectus
and Annual Report to Shareholders dated September 30, 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 William Penn Portfolio, dated
December 31, 1996, are incorporated herein by reference to the William Penn
Portfolio's Annual Report to Shareholders dated December 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 2650 Westview
Drive, Wyomissing, Pennsylvania 19610; telephone number 1-800-523-8440.
The unaudited financial statements of the Federated Fund, dated
January 31, 1997, are incorporated herein by reference to the Federated Fund's
Semi-Annual Report to Shareholders dated January 31, 1997. A copy may be
obtained, upon request and without charge, from Federated.
Sheraton Berkshire Motor Inn
1741 Paper Mill Road
Wyomissing, PA 19610
MONEY MARKET INCOME PORTFOLIO,
a Portfolio of
WILLIAM PENN INTEREST INCOME FUND,
SPECIAL MEETING OF SHAREHOLDERS
May 29, 1997
MONEY MARKET INCOME PORTFOLIO,
a Portfolio of
WILLIAM PENN INTEREST INCOME FUND
The undersigned shareholder(s) of Money Market Income Portfolio, a portfolio
of William Penn Interest Income Fund (the `William Penn Portfolio''), hereby
appoint(s) James E. Jordan, Sandra Houck, and Dennis Westley, or any of them
true and lawful proxies, with power of substitution of each, to vote all
shares of the William Penn Portfolio which the undersigned is entitled to
vote, at the Special Meeting of Shareholders to be held on May 29, 1997, at
Sheraton Berkshire Motor Inn, 1741 Paper Mill Road, Wyomissing, PA 19610, at
9:00 a.m. (general meeting) and 9:30 a.m. (Fund meeting) (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 TRUSTEES. 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.
The Board Of Trustees unanimously recommends a vote FOR the proposal below.
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.
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.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
MONEY MARKET INCOME PORTFOLIO
RECORD DATE SHARES:
-----------------
Vote on Proposal
TO APPROVE OR DISAPPROVE AN AGREEMENT AND PLAN OF REORGANIZATION BETWEEN THE
WILLIAM PENN INTEREST INCOME FUND, MONEY MARKET INCOME PORTFOLIO AND AUTOMATED
CASH MANAGEMENT TRUST, A PORTFOLIO OF MONEY MARKET OBLIGATIONS TRUST
FOR AGAINST ABSTAIN
- -----------------------------------
Signature
Signature (Joint Owners)
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 Conformed 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)
1.4 Conformed copy of Amendment No. 9 to the Declaration of Trust, dated
February 26, 1996(9)
2.1 Bylaws of the Registrant, as amended(1)
3 Not Applicable
4 Agreement and Plan of Reorganization dated as of March 24, 1997, between
William Penn Interest Income Fund, a Pennsylvania common law trust, on behalf
of its portfolio, Money Market Income Portfolio, 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 Conformed Copies of Exhibits A through G to the Investment Advisory
Contract(10)
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 Copy of Exhibit B to Distributor's Contract(9)
7.3 Conformed Copies of Exhibits F through H to Distributor's Contract(7)
7.4 Conformed Copies of Exhibits C and D to Distributor's Contract(5)
7.5 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 Agreement for Fund Accounting Services, Administrative
Services, Transfer Agency Services, Shareholder Recordkeeping Services and
Custody Services Procurement(9)
13.2 Conformed Copy of Shareholder Services Agreement of the Registrant(11)
13.3 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 Money Market Income
Portfolio, 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 Money Market Income Portfolio*
* 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.
(9) Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 20 on Form N-1A filed on September 23, 1996. (File
Nos. 33-31602 and 811-5950)
(10) Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 16 on Form N-1A filed on September 29, 1995. (File
Nos. 33-31602 and 811-5950)
(11) Response is incorporated by reference to Registrant's filing of Form N-14
on
September 16, 1996. (File Nos. 333-13877 and 811-5950)
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
March 24, 1997.
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
March 24, 1997.
* Chairman and Trustee
John F. Donahue
(Chief Executive Officer)
* President and Trustee
J. Christopher Donahue
* Treasurer, Executive Vice President and
Secretary
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
March 24, 1997
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 Money Market Income Portfolio, a portfolio of William Penn
Interest Income Fund, a Pennsylvania common law trust, pursuant to the
Agreement and Plan of Reorganization dated as of March 24, 1997
(`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 1, 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 on Form N-14 of Money Market
Obligations Trust of our report dated August 20, 1996, included in the
Automated Cash Management Trust Prospectus (Institutional Service Shares)
dated September 30, 1996, and to all references to our firm included in
this registration statement.
/s/ ARTHUR ANDERSEN LLP
Arthur Andersen LLP
Pittsburgh, Pennsylvania,
March 20, 1997
EXHIBIT 14.2
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in the Registration Statement
on Form N-14 ("Registration Statement") of Automated Cash Management Trust,
a portfolio of Money Market Obligations Trust, of our report dated
January 19, 1996, appearing in the Annual Report of Money Market Income
Portfolio, a portfolio of William Penn Interest Income Fund, for the year
ended December 31, 1995, and to the incorporation by reference of such
report in the Prospectus and Statement of Additional Information of Money
Market Income Portfolio, a portfolio of William Penn Interest Income Fund,
dated March 15, 1996, and the incorporation by reference in the
Registration Statement of Automated Cash Management Trust, a portfolio of
Money Market Obligations Trust, of our report dated January 22, 1997,
appearing in the Annual Report of Money market Income Portfolio, a
portfolio of William Penn Interest Income Fund, for the year ended
December 31, 1996.
By:/s/ ERNST & YOUNG LLP
Ernst & Young LLP
Reading, PA
March 19, 1997
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 Services Company, 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 February 25, 1997
John F. Donahue (Chief Executive Officer)
/s/J. Christopher Donahue President and Trustee February 25, 1997
J. Christopher Donahue
/s/John W. McGonigle Treasurer, Executive February 25, 1997
John W. McGonigle Vice President and Secretary
(Principal Financial and
Accounting Officer)
/s/Thomas G. Bigley Trustee February 25, 1997
Thomas G. Bigley
/s/John T. Conroy, Jr. Trustee February 25, 1997
John T. Conroy, Jr.
/s/William J. Copeland Trustee February 25, 1997
William J. Copeland
/s/James E. Dowd Trustee February 25, 1997
James E. Dowd
/s/Lawrence D. Ellis, M.D. Trustee February 25, 1997
Lawrence D. Ellis, M.D.
/s/Edward L. Flaherty, Jr. Trustee February 25, 1997
Edward L. Flaherty, Jr.
/s/Peter E. Madden Trustee February 25, 1997
Peter E. Madden
/s/Gregor F. Meyer Trustee February 25, 1997
Gregor F. Meyer
/s/John E. Murray, Jr. Trustee February 25, 1997
John E. Murray, Jr.
/s/Wesley W. Posvar Trustee February 25, 1997
Wesley W. Posvar
/s/Marjorie P. Smuts Trustee February 25, 1997
Marjorie P. Smuts
Sworn to and subscribed before me this 25th day of February, 1997
/s/Marie M. Hamm
Marie M. Hamm
Notarial Seal
Marie M. Hamm, Notary Public
Plum Boro, Alleghny County
My Commission Expires Oct. 9, 2000
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):
$112,892,800,900
(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
Sheraton Berkshire Motor Inn
1741 Paper Mill Road
Wyomissing, PA 19610
MONEY MARKET INCOME PORTFOLIO,
a Portfolio of
WILLIAM PENN INTEREST INCOME FUND,
SPECIAL MEETING OF SHAREHOLDERS
May 29, 1997
MONEY MARKET INCOME PORTFOLIO,
a Portfolio of
WILLIAM PENN INTEREST INCOME FUND
The undersigned shareholder(s) of Money Market Income Portfolio, a
portfolio of William Penn Interest Income Fund (the `William Penn
Portfolio'), hereby appoint(s) James E. Jordan, Sandra Houck, and Dennis
Westley, or any of them true and lawful proxies, with power of substitution
of each, to vote all shares of the William Penn Portfolio which the
undersigned is entitled to vote, at the Special Meeting of Shareholders to
be held on May 29, 1997, at Sheraton Berkshire Motor Inn, 1741 Paper Mill
Road, Wyomissing, PA 19610, at 9:00 a.m. (general meeting) and 9:30 a.m.
(Fund meeting) (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 TRUSTEES. 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.
The Board Of Trustees unanimously recommends a vote FOR the proposal below.
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.
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.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
MONEY MARKET INCOME PORTFOLIO
RECORD DATE SHARES:
-----------------
Vote on Proposal
TO APPROVE OR DISAPPROVE AN AGREEMENT AND PLAN OF REORGANIZATION BETWEEN
THE WILLIAM PENN INTEREST INCOME FUND, MONEY MARKET INCOME PORTFOLIO AND
AUTOMATED CASH MANAGEMENT TRUST, A PORTFOLIO OF MONEY MARKET OBLIGATIONS
TRUST
FOR AGAINST ABSTAIN
- -----------------------------------
Signature
Signature (Joint Owners)
Date:
EXHIBIT 4
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated , 1997 (the
--------
"Agreement"), between MONEY MARKET OBLIGATIONS TRUST, a Massachusetts
business trust (the `Massachusetts Trust'') on behalf of its portfolio,
AUTOMATED CASH MANAGEMENT TRUST (hereinafter called the "Acquiring Fund"),
and WILLIAM PENN INTEREST INCOME FUND, a Pennsylvania Common Law Trust
(hereinafter called the "Pennsylvania Trust") on behalf of its portfolio
MONEY MARKET INCOME PORTFOLIO (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 assets and the assumption of certain liabilities of
the Acquired Fund in exchange solely for Cash II 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 Pennsylvania Trust and the Massachusetts 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 Acquiring Fund
has determined that the transfer of all of the assets and the assumption of
certain liabilities 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 Trustees, including a majority of the
trustees who are not "interested persons" (as defined under the 1940 Act),
of the Pennsylvania Trust has determined that the transfer of all of the
assets and the assumption of certain liabilities 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 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 shareholders
of the Acquired Fund.
1.2 The Acquired Fund will assume only those certain liabilities
which are set forth in a certificate to be provided by the Acquired Fund at
Closing and accepted by the Acquiring Fund.
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 paragraph 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 Pennsylvania Trust up to and including the
Closing Date and such later dates, with respect to dissolution and
deregistration of the Pennsylvania Trust, on which the Pennsylvania Trust
is dissolved and deregistered.
1.9 The Pennsylvania Trust shall be deregistered as an investment
company under the 1940 Act and dissolved as a Pennsylvania common law trust
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, which practices have been reviewed
by the Acquired Fund's Board of Trustees.
3.CLOSING AND CLOSING DATE.
3.1 The Closing Date shall be [ ] or such later date as
the parties may mutually agree. All acts taking place at the Closing 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 Penn Square Management Corporation, 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 Pennsylvania Trust represents and warrants to the Acquiring
Fund as follows:
(a) The Pennsylvania Trust is a Common Law Trust duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania and has power to own all of its properties and
assets and to carry out this Agreement.
(b) The Pennsylvania Trust is registered under the 1940
Act, as an open-end, management investment company, and such registration
has not been revoked or rescinded and is in full force and effect.
(c) The Pennsylvania Trust is not, and the execution,
delivery and performance of this Agreement will not result, in material
violation of the Pennsylvania Trust's Declaration of Trust 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 December 31, 1995 and at December 31, 1996 has 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 December 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.
(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, 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 Pennsylvania Trust 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 Massachusetts Trust represents and warrants to the
Pennsylvania Trust as follows:
(a) The Massachusetts 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 Massachusetts 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 Massachusetts 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) The unaudited Statement of Assets and Liabilities of
the Acquiring Fund at January 31, 1996 and 1997 have been prepared in
accordance with generally accepted accounting principles, consistently
applied, although subject to year-end adjustments, and on a basis
consistent with the Statement of Assets and Liabilities of the Acquiring
Fund at July 31, 1995 and 1996, which has been audited by Arthur Andersen
LLP, independent auditors, 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 date, and there are no known liabilities of
the Acquiring Fund, contingent or otherwise, as of such date not disclosed
therein.
(h) 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.
(i) 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.
(j) For each fiscal year of its operation, the Acquiring
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 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.
(l) The execution, delivery and performance of this
Agreement has been duly authorized by all necessary action on the part of
the Massachusetts 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).
(m) 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 Pennsylvania Trust 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
Pennsylvania Trust'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(o), 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 and the 1940 Act
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 Section 103(a) of the
Code over its deductions disallowed under Sections 265 and 171(a)(2) of the
Code for the taxable periods or years ended on or before December 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 December 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 Pennsylvania 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.
6.2 The Pennsylvania Trust 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 Pennsylvania Trust.
6.3 The Pennsylvania Trust 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 Pennsylvania 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 Acquiring Fund shall reasonably request.
6.4 The Acquired Fund shall have delivered to the Acquiring Fund a
certificate specifying the liabilities which to be assumed by the Acquiring
Fund, all of which shall be reflected in the net asset value of the
Acquired fund on the Closing Date, which liabilities shall be acceptable to
the Acquiring Fund in its sole discretion.
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 Massachusetts 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 Massachusetts Trust 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
Massachusetts 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
Pennsylvania Trust'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 Massachusetts Trust and the Pennsylvania Trust 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 assets and the
assumption of certain liabilities 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 and the assumption of certain liabilities; (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 and the assumption of certain liabilities 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 Trustees of the
Pennsylvania Trust or the Board of Trustees of the Massachusetts Trust at
any time prior to the Closing Date (and notwithstanding any vote of the
Acquired Fund Shareholders) if a majority of the independent board members
of either board reasonably believes that continuing this transaction would
have a material adverse impact on shareholders of that fund.
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 or officers of the
Pennsylvania Trust or the Massachusetts 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 Massachusetts
Trust or the Board of Trustees of the Pennsylvania Trust, 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 Commonwealth of Pennsylvania, 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 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
Shareholders and the costs of holding the special meeting of shareholders.
Penn Square Management Corporation will assume the legal and accounting
fees of the Acquired Fund.
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:
WILLIAM PENN INTEREST INCOME FUND,
on behalf of its portfolio,
Attest: U.S. GOVERNMENT SECURITIES
INCOME PORTFOLIO
By:
Name: Name:
Title: Title:
Acquiring Fund:
Attest: MONEY MARKET OBLIGATIONS TRUST,
on behalf of its portfolio,
AUTOMATED CASH MANAGEMENT TRUST
By:
Name: S. Elliott Cohan Name: J. Christopher Donahue
Title: Assistant Secretary Title: President
