SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [ X ] Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
Money Market Obligations Trust
(Name of Registrant as Specified In Its Charter)
Federated Investors
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary proxy materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------
3) Filing Party:
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4) Date Filed:
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<PAGE>
iii
MONEY MARKET OBLIGATIONS TRUST
Automated Cash Management Trust
Government Obligations Fund
Government Obligations Tax-Managed Fund
Tax-Free Obligations Fund
Treasury Obligations Fund
Proxy Statement - Please Vote!
TIME IS OF THE ESSENCE ...VOTING ONLY TAKES A FEW MINUTES AND YOUR PARTICIPATION
IS IMPORTANT! ACT NOW TO HELP THE TRUST AVOID ADDITIONAL EXPENSE.
Money Market Obligations Trust will hold a special meeting of shareholders of
Automated Cash Management Trust, Government Obligations Fund, Government
Obligations Tax-Managed Fund, Prime Obligations Fund, Tax-Free Obligations Fund
and Treasury Obligations Fund on June 24, 1999. It is important for you to vote
on the issues described in this Proxy Statement. We recommend that you read the
Proxy Statement in its entirety; the explanations will help you to decide on the
issues.
Following is an introduction to the proposals and the process.
Why am I being asked to vote?
Mutual funds are required to obtain shareholders' votes for certain types of
changes, like those included in this Proxy Statement. You have a right to vote
on these changes.
What issues am I being asked to vote on?
The proposals include the election of Trustees, ratification of independent
auditors, and changes to the Trust's fundamental investment policies.
Why are individuals recommended for election to the Board of Trustees?
The Trust is devoted to serving the needs of its shareholders, and the Board is
responsible for managing the Trust's business affairs to meet those needs. The
Board represents the shareholders and can exercise all of the Trust's powers,
except those reserved only for shareholders.
Trustees are selected on the basis of their education and professional
experience. Candidates are chosen based on their distinct interest in, and
capacity for understanding the complexities of, the operation of a mutual fund.
These individuals bring considerable experience to the impartial oversight of a
fund's operation.
The Proxy Statement includes a brief description of each nominee's history and
current position with the Trust, if applicable.
Why am I being asked to vote on the ratification of independent auditors?
The independent auditors conduct a professional examination of accounting
documents and supporting data to render an opinion on the material fairness of
the information. Because financial reporting involves discretionary decision
making, the auditors' opinion is an important assurance to both the funds and
their investors. The Board of Trustees approved the selection of Arthur Andersen
LLP, long-time auditors of the Trust, for the current fiscal year.
Why are the Funds' "fundamental policies" being eliminated?
Every mutual fund has certain investment policies that can be changed only with
the approval of its shareholders. These are referred to as "fundamental"
investment policies.
In some cases, these policies were adopted to reflect regulatory, business, or
industry conditions that no longer exist or no longer are necessary. In other
cases, advances in the securities markets and the economy have created different
procedures and techniques that affect the Trust's operations.
By reducing the number of "fundamental policies," the Trust may be able to
minimize the costs and delays associated with frequent shareholder meetings.
Also, the investment adviser's ability to manage the Trust's assets may be
enhanced and investment opportunities increased.
The proposed amendments will:
o reclassify as operating policies those fundamental policies that are not
required to be fundamental by the Investment Company Act of 1940, as
amended ("1940 Act");
o simplify and modernize the policies that are required to be "fundamental"
by the 1940 Act; and
o eliminate fundamental policies that are no longer required by the securities
laws of individual states.
Federated Investment Management Company, the Trust's adviser, is a conservative
money manager. Our highly trained professionals are dedicated to making
investment decisions in the best interest of the Trust and its shareholders. The
Board believes that the proposed changes will be applied responsibly by the
adviser.
Why are some "fundamental policies" being reclassified as "operating policies?"
As noted above, some "fundamental policies" have been redefined as "operating
policies." Operating policies do not require shareholder approval to be changed.
This gives the Board additional flexibility to determine whether to participate
in new investment opportunities and to meet industry changes promptly.
How do I vote my shares?
You may vote in person at the special meeting of shareholders or complete and
return the enclosed Proxy Card. If you sign and return the Proxy Card without
indicating a preference, your vote will be cast "for" all the proposals.
You may also vote by telephone at 1-800-690-6903, or through the Internet at
www.proxyvote.com. If you choose to help save the Trust time and postage costs
by voting through the Internet or by telephone, please don't return your Proxy
Card. If you do not respond at all, we may contact you by telephone to request
that you cast your vote.
Who do I call if I have questions about the Proxy Statement?
Call your Investment Professional or a Federated Client Service Representative.
Federated's toll-free number is 1-800-341-7400.
After careful consideration, the Board of Trustees
has unanimously approved these proposals. The
Board recommends that you read the enclosed
materials
carefully and vote for all proposals.
<PAGE>
3
DEFINITIVE
MONEY MARKET OBLIGATIONS TRUST
Automated Cash Management Trust
Government Obligations Fund
Government Obligations Tax-Managed Fund
Prime Obligations Fund
Tax-Free Obligations Fund
Treasury Obligations Fund
NOTICE OF SPECIAL MEETING
IN LIEU OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 24, 1999
A Special Meeting in lieu of Annual Meeting of the
shareholders of Money Market Obligations Trust (the "Trust"), which presently
consists of six portfolios or series, Automated Cash Management Trust (the "Cash
Management Fund"), Government Obligations Fund (the "Government Fund'),
Government Obligations Tax-Managed Fund (the "Tax-Managed Fund"), Prime
Obligations Fund (the "Prime Fund"), Tax-Free Obligations Fund (the "Tax-Free
Fund") and Treasury Obligations Fund (the "Treasury Fund") (individually, the
"Fund" and collectively, the "Funds"), will be held at 5800 Corporate Drive,
Pittsburgh, Pennsylvania 15237-7000, at 2:00 p.m. (Eastern time), on June 24,
1999 to consider proposals:
(1) To elect three Trustees.
(2) To ratify the selection of the Trust's independent
auditors.
(3) To make changes to the Funds' fundamental investment
policies:
(a) To amend the Funds' fundamental investment
policy regarding diversification (all Funds
except Cash Management Fund);
(b) To amend the Funds' fundamental investment
policies regarding borrowing money and issuing
senior securities;
(c) To amend the Funds' fundamental investment
policies regarding investing in real estate;
(d) To amend the Funds' fundamental investment
policies regarding investing in commodities;
(e) To amend the Funds' fundamental investment
policies regarding underwriting securities;
(f) To amend the Funds' fundamental investment
policies regarding lending assets;
(g) To amend the Funds' fundamental investment
policies regarding concentration of the Funds'
investments in the securities of companies in
the same industry;
(h) To amend, and to make non-fundamental, the
Funds' fundamental investment policies regarding
pledging assets;
(i) To amend, and to make non-fundamental, the
Funds' fundamental investment policies regarding
buying securities on margin;
(j) To amend, and to make non-fundamental, the Cash
Management Fund's fundamental investment
policies regarding the types of money market
instruments that the Fund is permitted to
purchase (Cash Management Fund only);
(k) To amend, and to make non-fundamental, the Cash
Management Fund's fundamental investment policy
regarding investing in other investment
companies (Cash Management Fund only);
(l) To make non-fundamental the Cash Management
Fund's fundamental investment policy regarding
investing in U.S. government securities (Cash
Management Fund only);
(m) To make non-fundamental the Cash Management
Fund's fundamental investment policy regarding
purchasing bank instruments (Cash Management
Fund only);
(n) To make non-fundamental the Cash Management
Fund's fundamental investment policy regarding
purchasing commercial paper (Cash Management
Fund only);
(o) To make non-fundamental the Cash Management
Fund's fundamental investment policy regarding
engaging in repurchase agreement transactions
(Cash Management Fund only); and
(p) To make non-fundamental the Cash Management
Fund's fundamental investment policy regarding
engaging in when-issued and delayed delivery
transactions (Cash Management Fund only).
(4) To eliminate certain of the Funds' fundamental
investment policies:
(a) To remove the Funds' fundamental investment
policies regarding selling securities short;
(b) To remove the Prime Fund's and the Tax-Free
Fund's fundamental investment policies regarding
investing in restricted securities (Tax-Free
Fund and Prime Fund only);
(c) To remove the Cash Management Fund's fundamental
investment policy regarding investing for the
purpose of exercising control (Cash Management
Fund only); and
(d) To remove the Cash Management Fund's fundamental
investment policy regarding the purchase of
securities of certain issuers (Cash Management
Fund only).
To transact such other business as may properly come
before the meeting or any adjournment thereof.
The Board of Trustees has fixed April 26, 1999 as the record date for
determination of shareholders entitled to vote at the meeting.
By Order of the Board of Trustees,
John W. McGonigle
Secretary
May 7, 1999
YOU CAN HELP THE TRUST AVOID THE NECESSITY AND EXPENSE OF SENDING FOLLOW-UP
LETTERS TO ENSURE A QUORUM BY PROMPTLY SIGNING AND RETURNING THE ENCLOSED PROXY.
IF YOU ARE UNABLE TO ATTEND THE MEETING, PLEASE MARK, SIGN, DATE AND RETURN THE
ENCLOSED PROXY SO THAT THE NECESSARY QUORUM MAY BE REPRESENTED AT THE SPECIAL
MEETING IN LIEU OF ANNUAL MEETING. THE ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES.
<PAGE>
4
TABLE OF CONTENTS
About the Proxy Solicitation and the Meeting...............................4
Election of Three Trustees.................................................5
About the Election of Trustees.............................................5
Trustees Standing for Election.............................................6
Ratification of the Selection of Independent Auditors......................6
Approval of Changes to the Funds' Fundamental Investment
Policies..............................................................7
Approval of the Elimination of Certain Fundamental
Investment Policies of the Funds.....................................20
Information About the Trust...............................................23
Proxies, Quorum and Voting at the Meeting.................................23
Share Ownership of the Trustees...........................................23
Trustee Compensation......................................................24
Officers of the Trust.....................................................26
Other Matters and Discretion of Attorneys Named in the Proxy..............27
<PAGE>
53
5
DEFINITIVE
PROXY STATEMENT
MONEY MARKET OBLIGATIONS TRUST
Automated Cash Management Trust
Government Obligations Fund
Government Obligations Tax-Managed Fund
Prime Obligations Fund
Tax-Free Obligations Fund
Treasury Obligations Fund
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
About the Proxy Solicitation and the Meeting
The enclosed proxy is solicited on behalf of the Board of Trustees of
the Trust (the "Board" or "Trustees"), which presently consists of six
portfolios or series, Automated Cash Management Trust (the "Cash Management
Fund"), Government Obligations Fund (the "Government Fund"), Government
Obligations Tax-Managed Fund (the "Tax-Managed Fund"), Prime Obligations Fund
(the "Prime Fund"), Tax-Free Obligations Fund (the "Tax-Free Fund") and Treasury
Obligations Fund (the "Treasury Fund") (individually, a "Fund" and collectively,
the "Funds"). The proxies will be voted at the special meeting in lieu of annual
meeting of shareholders of the Trust to be held on June 24, 1999, at 5800
Corporate Drive, Pittsburgh, Pennsylvania 15237-7000, at 2:00 p.m. (such special
meeting in lieu of annual meeting and any adjournment or postponement thereof
are referred to as the "Meeting").
The cost of the solicitation, including the printing and mailing of
proxy materials, will be borne by the Trust. In addition to solicitations
through the mails, proxies may be solicited by officers, employees, and agents
of the Trust or, if necessary, a communications firm retained for this purpose.
Such solicitations may be by telephone, telegraph, through the Internet or
otherwise. Any telephonic solicitations will follow procedures designed to
ensure accuracy and prevent fraud, including requiring identifying shareholder
information, recording the shareholder's instructions, and confirming to the
shareholder after the fact. Shareholders who communicate proxies by telephone or
by other electronic means have the same power and authority to issue, revoke, or
otherwise change their voting instruction as shareholders submitting proxies in
written form. The Trust may reimburse custodians, nominees, and fiduciaries for
the reasonable costs incurred by them in connection with forwarding solicitation
materials to the beneficial owners of shares held of record by such persons.
The Board has considered the proposed changes to the Funds' investment
policies and has approved them, subject to shareholder approval. The purposes of
the Meeting are set forth in the accompanying Notice. The Trustees know of no
business other than that mentioned in the Notice that will be presented for
consideration at the Meeting. Should other business properly be brought before
the Meeting, proxies will be voted in accordance with the best judgment of the
persons named as proxies. This proxy statement and the enclosed proxy card are
expected to be mailed on or about May 7, 1999, to shareholders of record at the
close of business on April 26, 1999 (the "Record Date").
On the Record Date, the Funds had total outstanding shares of
beneficial interest as follows:
Cash Management Fund: 2,395,727,714.864
Government Fund: 5,882,610,367.066
Tax-Managed Fund: 2,427,248,419.066
Prime Fund: 8,661,658,452.703
Tax-Free Fund: 3,279,401,520.281
Treasury Fund: 11,389,795,003.76
The Funds' annual prospectuses, which include audited financial
statements for the fiscal year ended July 31, 1998, were previously mailed to
shareholders. The Funds' semi-annual reports, which contain unaudited financial
statements for the period ended January 31, 1999, were also previously mailed to
shareholders. The Trust's principal executive offices are located at Federated
Investors Funds, 5800 Corporate Drive, Pittsburgh, Pennsylvania 15237-7000. The
Trust's toll-free telephone number is 1-800-341-7400.
PROPOSAL #1: ELECTION OF THREE TRUSTEES
The persons named as proxies intend to vote in favor of the election of
John F. Cunningham, Charles F. Mansfield, Jr. and John S. Walsh (collectively,
the "Nominees") as Trustees of the Trust. The Nominees are presently serving as
Trustees, and were appointed Trustees on January 1, 1999 to fill vacancies
created by the decision to expand the size of the Board. Please see "About the
Election of Trustees" below for current information about the Nominees.
All Nominees have consented to serve if elected. If elected, the
Trustees will hold office without limit in time until death, resignation,
retirement, or removal or until the next meeting of shareholders to elect
Trustees and the election and qualification of their successors. Election of a
Trustee is by a plurality vote, which means that the three individuals receiving
the greatest number of votes at the Meeting will be deemed to be elected.
If any Nominee for election as a Trustee named above shall by reason of
death or for any other reason become unavailable as a candidate at the Meeting,
votes pursuant to the enclosed proxy will be cast for a substitute candidate by
the proxies named on the proxy card, or their substitutes, present and acting at
the Meeting. Any such substitute candidate for election as a Trustee who is an
"interested person" (as defined in the Investment Company Act of 1940, as
amended (the "1940 Act")) of the Trust shall be nominated by the Executive
Committee. The selection of any substitute candidate for election as a Trustee
who is not an "interested person" shall be made by a majority of the Trustees
who are not "interested persons" of the Trust. The Board has no reason to
believe that any Nominee will become unavailable for election as a Trustee.
THE BOARD OF TRUSTEES RECOMMENDS THAT
SHAREHOLDERS VOTE TO ELECT AS TRUSTEES THE NOMINEES FOR
ELECTION TO THE BOARD OF TRUSTEES OF THE TRUST
About the Election of Trustees
When elected, the Trustees will hold office during the lifetime of the
Trust except that: (a) any Trustee may resign; (b) any Trustee may be removed by
written instrument signed by at least two-thirds of the number of Trustees prior
to such removal; (c) any Trustee who requests to be retired or who has become
mentally or physically incapacitated may be retired by written instrument signed
by a majority of the other Trustees; and (d) a Trustee may be removed at any
special meeting of the shareholders by a vote of two-thirds of the outstanding
shares of the Trust. In case a vacancy shall exist for any reason, the remaining
Trustees will fill such vacancy by appointment of another Trustee. The Trustees
will not fill any vacancy by appointment if, immediately after filling such
vacancy, less than two-thirds of the Trustees then holding office would have
been elected by the shareholders. If, at any time, less than a majority of the
Trustees holding office have been elected by the shareholders, the Trustees then
in office will call a shareholders' meeting for the purpose of electing Trustees
to fill vacancies. Otherwise, there will normally be no meeting of shareholders
called for the purpose of electing Trustees.
Set forth below is a listing of the Trustees standing for election,
along with their addresses, birthdates, present positions with the Trust, and
principal occupations during the past five years:
Trustees Standing for Election
John F. Cunningham
353 El Brillo Way
Palm Beach, FL
Birthdate: March 5, 1943
Trustee
Director or Trustee of some of the Funds in the Federated Fund Complex;
Chairman, President and Chief Executive Officer, Cunningham & Co., Inc.
(specialized financial consulting organization); Trustee Associate, Boston
College; Director, EMC Corporation; formerly, Director, Redgate Communications.
Charles F. Mansfield, Jr.
80 South Road
Westhampton, NY
Birthdate: April 10, 1945
Director or Trustee of some of the Funds in the Federated Fund Complex;
management consultant.
John S. Walsh
2007 Sherwood Drive
Valparaiso, IN
Birthdate: November 28, 1957
Trustee
Director or Trustee of some of the Funds in the Federated Fund Complex;
President and Director, Heat Wagon, Inc.; President and Director, Manufacturers
Products, Inc.; President, Portable Heater Parts, a division of Manufacturers
Products, Inc.; Director, Walsh & Kelly, Inc.; formerly, Vice President, Walsh &
Kelly, Inc.
PROPOSAL #2: RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS
The 1940 Act requires that the Trust's independent auditors be selected
by the Board, including a majority of those Board members who are not
"interested persons" (as defined in the 1940 Act) of the Trust, and submitted
for ratification or rejection at the next succeeding meeting of shareholders.
The Board of the Trust, including a majority of its members who are not
"interested persons" of the Trust, approved the selection of Arthur Andersen LLP
(the "Auditors") for the current fiscal year at a Board meeting held on August
18, 1998.
The selection by the Board of the Auditors as independent auditors for
the current fiscal year is submitted to the shareholders for ratification. Apart
from their fees as independent auditors and certain consulting fees, neither the
Auditors nor any of their partners have a direct, or material indirect,
financial interest in the Trust or its investment adviser. The Auditors are a
major international independent accounting firm. The Board believes that the
continued employment of the services of the Auditors for the current fiscal year
would be in the Trust's best interests.
Representatives of the Auditors are not expected to be present at the
Meeting. If a representative is present, he or she will have the opportunity to
make a statement and would be available to respond to appropriate questions. The
ratification of the selection of the Auditors will require the affirmative vote
of a majority of the shares present and voting on the proposal at the Meeting.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE TO RATIFY THE SELECTION OF INDEPENDENT AUDITORS
APPROVAL OF CHANGES TO THE FUNDS'
FUNDAMENTAL INVESTMENT POLICIES
Introduction to Proposals #3(a) to #3(p) and #4(a) to #4(d).
The 1940 Act (which was adopted to protect mutual fund shareholders)
requires investment companies such as the Funds to adopt certain specific
investment policies or restrictions that can be changed only by shareholder
vote. An investment company may also elect to designate other policies or
restrictions that may be changed only by shareholder vote. Both types of
policies and restrictions are often referred to as "fundamental policies." These
policies and restrictions limit the investment activities of the Funds'
investment adviser.
After the Trust was formed in 1988, legal and regulatory requirements
applicable to mutual funds changed. For example, certain restrictions imposed by
state laws and regulations were preempted by the National Securities Markets
Improvement Act of 1996 ("NSMIA") and no longer apply. As a result, the Funds
are subject to fundamental policies that are no longer required to be
fundamental, and to other policies that are no longer required at all.
Accordingly, the Trustees have authorized the submission to the Funds'
shareholders for their approval, and recommend that shareholders approve, the
amendment, reclassification and/or elimination of certain of the Funds'
fundamental policies.
The proposed amendments would:
(i) simplify, modernize and standardize the fundamental policies that
are required to be stated under the 1940 Act;
(ii) reclassify as operating policies those fundamental policies that
are not required to be fundamental under the 1940 Act; and
(iii) eliminate those fundamental policies that are no longer required
by the securities laws of the various states.
By reducing the number of policies that can be changed only by
shareholder vote, the Trustees believe that the Funds would be able to minimize
the costs and delays associated with holding future shareholder meetings to
revise fundamental policies that become outdated or inappropriate. The Trustees
also believe that the investment adviser's ability to manage the Funds' assets
in a changing investment environment will be enhanced and that investment
management opportunities will be increased by these changes. The chart that
follows briefly describes the differences between fundamental policies and
non-fundamental policies.
<TABLE>
<CAPTION>
<S> <C> <C>
Fundamental Policies Non-Fundamental Policies
-------------------------------------- ---------------------------------------
Who must approve changes in the Board of Trustees and shareholders Board of Trustees
policies?
How quickly can a change in the Fairly slowly, since a vote of Fairly quickly, because the change
policies be made? shareholders is required can be accomplished by action of the
Board of Trustees
What is the relative cost to Costly to change because a Less costly to change because a
change a policy? shareholder vote requires holding a change can be accomplished by action
meeting of shareholders of the Board of Trustees
</TABLE>
The recommended changes are specified below. Each Proposal will be
voted on separately by each Fund (unless otherwise noted), and the approval of
each Proposal by each Fund will require the approval of a majority of the
outstanding voting shares of the Fund as defined in the 1940 Act. (See "Proxies,
Quorum and Voting at the Meeting" below.)
Description of Proposed Changes
The proposed standardized fundamental investment policies cover those
areas for which the 1940 Act requires the Funds to have a fundamental
restriction. They satisfy current regulatory requirements and are written to
provide flexibility to respond to future legal, regulatory, market or technical
changes. The proposed standardized changes will not affect the Funds' investment
objectives. Although the proposed changes in fundamental policies will allow the
Funds greater flexibility to respond to future investment opportunities, the
Board of Trustees of the Trust does not anticipate that the changes,
individually or in the aggregate, will result at this time in material changes
in the levels of investment risk associated with investment in the Funds. Nor
does the Board of Trustees anticipate that the proposed changes in fundamental
investment policies will, individually or in the aggregate, change materially
the manner in which the Funds are managed.
The following is the text and a summary description of the proposed
changes to the Funds' fundamental policies and restrictions. Any non-fundamental
policy may be modified or eliminated by the Trustees at any future date without
any further approval of shareholders. Shareholders should note that certain of
the fundamental policies that are treated separately below currently are
combined within a single existing fundamental policy.
Presently, if a Fund adheres to a fundamental or non-fundamental
percentage restriction at the time of an investment or transaction, a later
increase or decrease in the percentage resulting from a change in the value of
the Fund's portfolio securities or the amount of its total assets does not
create a violation of the policy. This policy will continue to apply for any of
the proposed changes that are approved.
PROPOSAL #3: APPROVAL OF AMENDMENTS TO THE FUNDS'
FUNDAMENTAL INVESTMENT POLICIES
PROPOSAL #3(a): TO AMEND THE FUNDS' FUNDAMENTAL INVESTMENT
POLICIES REGARDING DIVERSIFICATION
This Proposal Pertains to Each Fund Except the Cash Management Fund.
Under the 1940 Act, the Funds' policies relating to the diversification
of their investments must be fundamental. The 1940 Act prohibits a "diversified"
mutual fund from purchasing securities of any one issuer if, at the time of
purchase, more than 5% of the fund's total assets would be invested in
securities of that issuer or the fund would own or hold more than 10% of the
outstanding voting securities of that issuer, except that up to 25% of the
fund's total assets may be invested without regard to this limitation. The 5%
limitation does not apply to securities issued by or guaranteed by the U.S.
government, its agencies or instrumentalities or to securities issued by other
open-end investment companies.
The Funds' present policies regarding diversification state:
Government Fund, Tax-Managed Fund and Treasury Fund:
"With respect to securities comprising 75% of the value of its total
assets, the Fund will not purchase securities of any one issuer (other
than cash, cash items or securities issued or guaranteed by the
government of the United States or its agencies or instrumentalities
and repurchase agreements collateralized by such U.S. government
securities) if as a result more than 5% of the value of its total
assets would be invested in the securities of that issuer, or if it
would own more than 10% of the outstanding voting securities of that
issuer."
Prime Fund and Tax-Free Fund:
"With respect to 75% of the value of its total assets, the Fund will
not purchase securities of any one issuer (other than cash, cash items
or securities issued or guaranteed by the government of the United
States or its agencies or instrumentalities and repurchase agreements
collateralized by such securities) if, as a result, more than 5% of the
value of its total assets would be invested in the securities of that
issuer."
In order to afford the Funds' investment adviser maximum flexibility in
managing the Funds' assets, the Trustees propose to amend the Funds'
diversification policies to be consistent with the definition of a diversified
investment company under the 1940 Act. The amended policies will comply with the
U.S. Securities and Exchange Commission's (the "SEC" or "Commission") general
definition of diversification. The new policies would specifically add
securities of other investment companies to the list of issuers which are
excluded from the 5% limitation.
Upon approval of the Funds' shareholders, the fundamental investment
policy governing diversification for each Fund will be amended as follows:
"With respect to securities comprising 75% of the value of its total
assets, the Fund will not purchase securities of any one issuer (other
than cash; cash items; securities issued or guaranteed by the
government of the United States or its agencies or instrumentalities
and repurchase agreements collateralized by such U.S. government
securities; and securities of other investment companies) if, as a
result, more than 5% of the value of its total assets would be invested
in securities of that issuer, or the Fund would own more than 10% of
the outstanding voting securities of that issuer."
The Funds are governed by Rule 2a-7 of the 1940 Act. This rule imposes
stricter diversification requirements on money market funds. It generally
requires that a Fund not invest more than 5% of its total assets in the
securities of any issuer.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #3(b): TO AMEND THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES
REGARDING BORROWING MONEY AND ISSUING SENIOR SECURITIES
The 1940 Act requires the Funds to have a fundamental investment policy
defining their ability to borrow money or issue senior securities. In general,
limitations on borrowing are designed to protect shareholders and their
investments by restricting a Fund's ability to subject its assets to any claims
of creditors or senior security holders who would be entitled to dividends or
rights on liquidation of the Fund prior to the rights of shareholders.
Shareholders of the Funds are being asked to approve a new standardized
fundamental policy for borrowing and the issuance of senior securities designed
to reflect all current regulatory requirements. The Funds' current policies
state:
Government Fund, Prime Fund and Tax-Managed Fund:
"The Fund will not issue senior securities except the Fund may borrow
money directly or through reverse repurchase agreements in amounts up
to one-third of the value of its total assets, including the amount
borrowed. The Fund will not borrow money or engage in reverse
repurchase agreements for investment leverage, but rather as a
temporary, extraordinary, or emergency measure or to facilitate
management of the portfolio by enabling the Fund to meet redemption
requests when the liquidation of portfolio securities is deemed to be
inconvenient or disadvantageous. The Fund will not purchase any
securities while borrowings in excess of 5% of the value of its total
assets are outstanding. During the period any reverse repurchase
agreements are outstanding, the Fund will restrict the purchase of
portfolio securities to money market instruments maturing on or before
the expiration date of the reverse repurchase agreements, but only to
the extent necessary to assure completion of the reverse repurchase
agreements."
Cash Management Fund, Tax-Free Fund and Treasury Fund:
"The Fund will not issue senior securities except that the Fund may
borrow money in amounts up to one-third of the value of its total
assets, including the amount borrowed. The Fund will not borrow money
for investment leverage, but rather as a temporary, extraordinary, or
emergency measure or to facilitate management of the portfolio by
enabling the Fund to meet redemption requests when the liquidation of
portfolio securities is deemed to be inconvenient or disadvantageous.
The Fund will not purchase any securities while borrowings in excess of
5% of the value of its total assets are outstanding."
Senior Securities-Generally. A "senior security" is an obligation of an
investment company with respect to its earnings or assets that takes precedence
over the claims of the fund's shareholders with respect to the same earnings or
assets. The 1940 Act generally prohibits a fund from issuing senior securities,
in order to limit the use of leverage. In general, an investment company uses
leverage when it borrows money to enter into securities transactions, or
acquires an asset without being required to make payment until a later time.
SEC staff interpretations allow a fund to engage in a number of types
of transactions which might otherwise be considered to create "senior
securities" or "leverage," so long as the fund meets certain collateral
requirements designed to protect shareholders. For example, some transactions
that may create senior security concerns include short sales, certain options
and futures transactions, reverse repurchase agreements and securities
transactions that obligate the fund to pay money at a future date (such as
when-issued, forward commitment or delayed delivery transactions). When engaging
in such transactions, the fund must set aside money or securities to meet the
SEC staff's collateralization requirements. This procedure effectively
eliminates the fund's ability to engage in leverage for these types of
transactions.
Borrowing-Generally. Under the 1940 Act, an investment company is permitted to
borrow up to 5% of its total assets for temporary purposes. A fund may borrow
only from banks. If borrowings exceed 5%, the fund must have assets totaling at
least 300% of the borrowing when the amount of the borrowing is added to the
fund's other assets. The effect of this provision is to allow the fund to borrow
from banks in amounts up to one-third (33 1/3%) of its total assets (including
the amount borrowed). Investment companies typically borrow money to meet
redemptions in order to avoid a forced, unplanned sale of portfolio securities.
This technique allows the fund greater flexibility to buy and sell portfolio
securities for investment or tax considerations, rather than for cash flow
considerations. The costs of borrowing, however, can also reduce the fund's
total return.
The investment policies of the Funds permit borrowing, but restrict
borrowing only as a temporary measure for extraordinary purposes, and restrict
the types of portfolio securities that may be acquired while borrowings are
outstanding. The proposed investment policy would provide greater flexibility to
the Funds, and would permit the Funds to borrow money, directly or indirectly
(such as through reverse repurchase agreements, if the Funds' investment
policies permit), and issue senior securities within the limits established
under the 1940 Act or under any rule or regulation of the Commission, or any SEC
staff interpretation thereof. As a matter of operating policy, the Funds do not
intend to engage in leveraging. Upon shareholder approval, the fundamental
investment policy governing borrowing money and issuing senior securities by
each Fund will state:
"The Fund may borrow money, directly or indirectly, and issue senior
securities to the maximum extent permitted under the 1940 Act."
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #3(c): TO AMEND THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES
REGARDING INVESTING IN REAL ESTATE
Under the 1940 Act, the Funds' policies concerning investments in real
estate must be fundamental. The Funds currently have fundamental investment
policies prohibiting the purchase or sale of real estate. The current policies,
however, allow the Funds (except for the Treasury Fund) to invest in companies
that deal in real estate, or to invest in securities that are secured by real
estate, and state:
Cash Management Fund:
"The Fund will not invest in real estate, except that it may purchase
money market instruments issued by companies that invest in or sponsor
interests [in real estate]."
Government Fund, Prime Fund and Tax-Managed Fund:
"The Fund will not purchase or sell real estate, including limited
partnership interests, although it may invest in the securities of
issuers whose business involves the purchase or sale of real estate or
in securities which are secured by real estate or interests in real
estate."
Tax-Free Fund:
"The Fund will not purchase or sell real estate, although it may invest
in the securities of issuers whose business involves the purchase or
sale of real estate or in securities which are secured by real estate
or interests in real estate."
Treasury Fund:
"The Fund will not purchase or sell real estate, including limited
partnership interests."
The proposed fundamental investment policy will not permit the Funds to
purchase real estate directly, but will permit the purchase of securities whose
payments of interest or principal are secured by mortgages or other rights to
real estate in the event of default. The investment policy will also enable the
Funds to invest in companies within the real estate industry, provided such
investments are consistent with the Funds' investment objectives and policies.
Upon shareholder approval, the fundamental investment policy governing
investments in real estate by each Fund will state:
"The Fund may not purchase or sell real estate, provided that this
restriction does not prevent the Fund from investing in issuers which
invest, deal, or otherwise engage in transactions in real estate or
interests therein, or investing in securities that are secured by real
estate or interests therein. The Fund may exercise its rights under
agreements relating to such securities, including the right to enforce
security interests and to hold real estate acquired by reason of such
enforcement until that real estate can be liquidated in an orderly
manner."
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #3(d): TO AMEND THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES
REGARDING INVESTMENTS IN COMMODITIES
Under the 1940 Act, the Funds' policies concerning investments in
commodities must be fundamental. The Funds, except the Cash Management Fund, are
currently subject to fundamental investment restrictions prohibiting the
purchase or sale of commodities, commodity contracts or commodity futures
contracts. The Cash Management Fund is subject to a similar fundamental policy,
which provides:
"The Fund will not invest in commodities or commodity contracts, except
that it may purchase money market instruments issued by companies that
invest in or sponsor interests [in commodities or commodity
contracts]."
Historically, the most common types of commodities have been physical
commodities such as wheat, cotton, rice and corn. However, under federal law,
futures contracts are considered to be commodities and, therefore, financial
futures contracts, such as futures contracts related to currencies, stock
indices or interest rates are considered to be commodities. For purposes of the
proposed investment policy, the Funds do not consider financial futures
contracts to be commodities.
Upon shareholder approval, the fundamental investment policy governing
investments in commodities for each Fund will state:
"The Fund may not purchase or sell physical commodities, provided that
the Fund may purchase securities of companies that deal in
commodities."
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #3(e): TO AMEND THE FUNDS' FUNDAMENTAL INVESTMENT
POLICIES REGARDING UNDERWRITING SECURITIES
Under the 1940 Act, the Funds' policies relating to underwriting are
required to be fundamental. The Funds currently are subject to fundamental
investment policies prohibiting them from acting as an underwriter of the
securities of other issuers, and state:
Cash Management Fund:
"The Fund will not underwrite any issue of securities, except as it may
be deemed to be an underwriter under the Securities Act of 1933 in
connection with the sale of restricted securities which the Fund may
purchase pursuant to its investment objective, policies, and
limitations."
Each Fund Except Cash Management Fund:
"The Fund will not underwrite any issue of securities, except as it may
be deemed to be an underwriter under the Securities Act of 1933 in
connection with the sale of securities in accordance with its
investment objective, policies, and limitations."
A person or company generally is considered an underwriter under the
federal securities laws if it participates in the public distribution of
securities of other issuers, usually by purchasing the securities from the
issuer and re-selling the securities to the public. From time to time, a mutual
fund may purchase a security for investment purposes which it later sells or
redistributes to institutional investors or others under circumstances where the
fund could possibly be considered to be an underwriter under the technical
definition of underwriter contained in the securities laws.
Upon shareholder approval, the fundamental investment policy concerning
underwriting for each Fund will state:
"The Fund may not underwrite the securities of other issuers, except
that the Fund may engage in transactions involving the acquisition,
disposition or resale of its portfolio securities, under circumstances
where it may be considered to be an underwriter under the Securities
Act of 1933."
This does not constitute a substantive change in the Funds' policies.
Rather, it reflects a restatement to standardized language to be used by the
Federated Funds, and is submitted to shareholders to comply with the 1940 Act's
requirements.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #3(f): TO AMEND THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES
REGARDING LENDING ASSETS
Under the 1940 Act, the Funds' policies concerning lending must be
fundamental. The Funds currently are subject to fundamental investment
restrictions limiting their ability to make loans which state:
Cash Management Fund:
"The Fund will not lend any of its assets, except that it may purchase
or hold money market instruments, including repurchase agreements,
permitted by its investment objective and policies."
Government Fund, Prime Fund and Treasury Fund:
"The Fund will not lend any of its assets, except portfolio securities.
This shall not prevent the Fund from purchasing or holding bonds,
debentures, notes, certificates of indebtedness, or other debt
securities, entering into repurchase agreements, or engaging in other
transactions where permitted by its investment objective, policies, and
limitations or Declaration of Trust."
Tax-Free Fund:
"The Fund will not lend any of its assets. This shall not prevent the
Fund from purchasing or holding bonds, debentures, notes, certificates
of indebtedness, or other debt securities, or engaging in other
transactions where permitted by its investment objective, policies, and
limitations or Declaration of Trust."
Tax-Managed Fund:
"The Fund will not lend any of its assets, except that it may purchase
or hold portfolio securities permitted by its investment objective,
policies, and limitations or Declaration of Trust."
In order to ensure that the Funds may invest in certain debt securities
or repurchase agreements, which could technically be characterized as the making
of loans, the Funds' current fundamental restrictions specifically permit such
investments. In addition, the Funds' current fundamental policies (in the case
of the Government Fund, the Prime Fund and the Treasury Fund), and the Funds'
proposed policies, explicitly permit the Funds to lend their portfolio
securities to broker-dealers or institutional investors. Securities lending is a
practice that has become common in the mutual fund industry and involves the
temporary loan of portfolio securities to parties who use the securities for the
settlement of securities transactions. The collateral delivered to a Fund in
connection with such a transaction is then invested to provide the Fund with
additional income it might not otherwise have.
Securities lending involves certain risks if the borrower fails to
return the securities. However, management believes that with appropriate
controls, such as 100% or greater collateralization of the loan and regular
monitoring of the creditworthiness of the counterparty, the ability to engage in
securities lending does not materially increase the risks to which the Funds
currently are subject. In addition, securities on loan cannot generally be sold
until the term of the loan is over. Upon approval of the Funds' shareholders,
the fundamental investment policy governing lending assets for each Fund will
state:
"The Fund may not make loans, provided that this restriction does not
prevent the Fund from purchasing debt obligations, entering into
repurchase agreements, lending its assets to broker/dealers or
institutional investors and investing in loans, including assignments
and participation interests."
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #3(g): TO AMEND THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES REGARDING
CONCENTRATION OF THE FUNDS' INVESTMENTS IN THE SECURITIES OF COMPANIES IN THE
SAME INDUSTRY
Under the 1940 Act, the Funds' policies relating to the concentration
of their investments in securities of companies in a single industry must be
fundamental. The SEC staff considers a mutual fund to "concentrate" its
investments if 25% or more of its total assets are invested in a particular
industry (not counting U.S. government securities, bank instruments issued by
domestic banks and municipal securities).
The Funds, with the exception of the Prime Fund (which is discussed on
the next page), currently have a fundamental investment policy prohibiting them
from concentrating their investments in a single industry:
Cash Management Fund:
"The Fund will not purchase money market instruments if, as a result of
such purchase, more than 25% of the value of its total assets would be
invested in one industry. However, investing in bank instruments (such
as time and demand deposits and certificates of deposit), U.S.
government obligations or instruments secured by these money market
instruments, such as repurchase agreements, shall not be considered
investments in any one industry."
Government Fund and Treasury Fund:
"The Fund will not invest 25% or more of the value of its total assets
in any one industry, except that the Fund may invest 25% or more of the
value of its total assets in cash, cash items or securities issued or
guaranteed by the government of the United States or its agencies or
instrumentalities, and repurchase agreements collateralized by such
U.S. government securities."
Tax-Free Fund:
"The Fund will not purchase securities if, as a result of such
purchase, 25% or more of the value of its total assets would be
invested in any one industry or in industrial development bonds or
other securities, the interest upon which is paid from revenues of
similar types of projects. The Fund may invest, as temporary
investments, 25% or more of the value of its total assets in cash or
cash items, securities issued or guaranteed by the U.S. government, its
agencies or instrumentalities or instruments secured by these money
market instruments, such as repurchase agreements. The Fund does not
intend to purchase securities that would increase the percentage of its
assets invested in the securities of governmental subdivisions located
in any one state, territory, or U.S. possession to 25% or more.
However, the Fund may invest 25% or more of the value of its assets in
tax-exempt project notes guaranteed by the U.S. government, regardless
of the location of the issuing municipality. If the value of the Fund's
assets invested in the securities of a government subdivision changes
because of changing values, the Fund will not be required to make any
reduction in its holdings."
Tax-Managed Fund:
"The Fund will not invest 25% or more of the value of its total
assets in any one industry. The U.S. government is not
considered to be an industry."
Upon the approval by the Funds' shareholders, the fundamental
investment policy governing concentration by each Fund, except the Prime Fund,
will provide:
"The Fund will not make investments that will result in the
concentration of its investments in the securities of issuers primarily
engaged in the same industry. Government securities, municipal
securities and bank instruments will not be deemed to constitute an
industry. To conform to the current view of the SEC that only domestic
bank instruments may be excluded from industry concentration
limitations, as a matter of non-fundamental policy, the Fund will not
exclude foreign bank instruments from industry concentration limits as
long as the policy of the SEC remains in effect. As a non-fundamental
operating policy, the Fund will consider concentration to be the
investment of more than 25% of the value of its total assets in any one
industry."
The Trust's Board has also approved a related non-fundamental policy
for each Fund, other than the Prime Fund, which will be adopted if the new
fundamental policy is approved by shareholders, and which provides that in
applying the concentration restriction: (1) utility companies will be divided
according to their services, for example, gas, gas transmission, electric and
telephone will each be considered a separate industry; (2) financial service
companies will be classified according to the end users of their services, for
example, automobile finance, bank finance and diversified finance will each be
considered a separate industry; and (3) asset-backed securities will be
classified according to the underlying assets securing such securities.
In the case of the Prime Fund, the Fund currently has a fundamental
investment policy pertaining to concentration that states:
"The Fund will not invest 25% or more of the value of its total assets
in any one industry, except that the Fund will generally invest 25% or
more of the value of its total assets in the commercial paper issued by
finance companies. The Fund may invest 25% or more of the value of its
total assets in cash or cash items or securities issued or guaranteed
by the U.S. government or its agencies or instrumentalities or
instruments secured by these money market instruments, such as
repurchase agreements."
The Trust's investment adviser has recommended that the policy be
restated and amended to provide:
"The Fund will not make investments that will result in the
concentration of its investments in the securities of issuers primarily
engaged in the same industry, except that the Fund may invest 25% or
more of the value of its total assets in the commercial paper issued by
finance companies. Government securities, municipal securities and bank
instruments will not be deemed to constitute an industry. To conform to
the current view of the SEC that only domestic bank instruments may be
excluded from industry concentration limitations, as a matter of
non-fundamental policy, the Fund will not exclude foreign bank
instruments from industry concentration limits as long as the policy of
the SEC remains in effect."
In conjunction with the amendment of the Prime Fund's fundamental
investment policy on concentration, the Prime Fund is also presently subject to
an investment policy regarding its concentration in commercial paper and bank
instruments that states:
"As a matter of policy which cannot be changed without shareholder
approval, the Fund will generally invest 25% or more of its total
assets in commercial paper issued by finance companies. The finance
companies in which the Fund intends to invest can be divided into two
categories, commercial finance companies and consumer finance
companies. Commercial finance companies are principally engaged in
lending to corporations or other businesses. Consumer finance companies
are primarily engaged in lending to individuals. Captive finance
companies or finance subsidiaries which exist to facilitate the
marketing and financial activities of their parent will, for purposes
of industry concentration, be classified in the industry of their
parent's corporation. In addition, the Fund may invest 25% or more of
the value of its total assets in instruments issued by a U.S. branch of
a domestic bank or savings association having capital, surplus, and
undivided profits in excess of $100,000,000 at the time of investment.
Concentrating investments in one industry may subject the Fund to more
risk than if it did not concentrate."
The Prime Fund's investment adviser believes, and the Board has
concluded, that this fundamental investment policy unnecessarily limits the
Prime Fund's permissible investments in commercial paper and prevents the Prime
Fund from pursuing possible investment opportunities. The Trust's management has
proposed that the policy be made non-fundamental. By making this policy
non-fundamental, the Prime Fund will enhance its flexibility in the future by
being able to invest in a broader array of instruments. If approved by
shareholders, the Prime Fund's investments in commercial paper will continue to
be subject to the quality standards of Rule 2a-7 under the 1940 Act, and the
credit analysis of the Prime Fund's investment adviser.
If approved by shareholders, the Prime Fund's non-fundamental
investment policy regarding investing in commercial paper will state:
"The Fund may invest 25% or more of its total assets in commercial
paper issued by finance companies. The finance companies in which the
Fund intends to invest can be divided into two categories, commercial
finance companies and consumer finance companies. Commercial finance
companies are principally engaged in lending to corporations or other
businesses. Consumer finance companies are primarily engaged in lending
to individuals. Captive finance companies or finance subsidiaries which
exist to facilitate the marketing and financial activities of their
parent will, for purposes of industry concentration, be classified in
the industry of their parent's corporation. In addition, the Fund may
invest 25% or more of the value of its total assets in instruments
issued by a U.S. branch of a domestic bank or savings association
having capital, surplus, and undivided profits in excess of
$100,000,000 at the time of investment. Concentrating investments in
one industry may subject the Fund to more risk than if it did not
concentrate."
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #3(h): TO AMEND, AND TO MAKE NON-FUNDAMENTAL, THE FUNDS'
FUNDAMENTAL INVESTMENT POLICIES REGARDING PLEDGING ASSETS
The Funds are not required to have a fundamental investment restriction
with respect to the pledging of assets. To maximize the Funds' flexibility in
this area, the Board of the Trust believes the policies on pledging assets
should be made non-fundamental. The non-fundamental policies would be similar to
the fundamental policies proposed to be eliminated, which state:
Cash Management Fund:
"The Fund will not mortgage, pledge, or hypothecate any assets except
to secure permitted borrowings. In those cases, it may mortgage, pledge
or hypothecate assets having a market value not exceeding the lesser of
the dollar amounts borrowed or 10% of the value of total assets at the
time of borrowing."
Government Fund, Prime Fund, Tax-Free Fund, Tax-Managed Fund and
Treasury Fund:
"The Fund will not mortgage, pledge, or hypothecate any assets except
to secure permitted borrowings. In those cases, it may mortgage, pledge
or hypothecate assets having a market value not exceeding the lesser of
the dollar amounts borrowed or 15% of the value of total assets of the
Fund at the time of the pledge."
The Board does not expect this change to have a material impact on the
Funds' operations. Establishing the policy as non-fundamental, however, would
enable the Board to change this policy in the future without shareholder
approval. While the Funds are proposing to eliminate the 10% or 15% limitation,
as applicable, on the amount of the Funds' assets that can be pledged, the Funds
do not presently intend to exceed these limitations in the future.
Upon the approval of the elimination of the existing fundamental policy
on pledging assets, the Funds would become subject to the following
non-fundamental policy:
"The Fund will not mortgage, pledge, or hypothecate any of its assets,
provided that this shall not apply to the transfer of securities in
connection with any permissible borrowing or to collateral arrangements
in connection with permissible activities."
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #3(i): TO AMEND, AND TO MAKE NON-FUNDAMENTAL, THE FUNDS'
FUNDAMENTAL INVESTMENT POLICIES REGARDING BUYING SECURITIES ON MARGIN
The Funds are not required to have a fundamental restriction on margin
transactions. Accordingly, it is proposed that the Funds' existing fundamental
policies be replaced with non-fundamental restrictions. The Funds' current
policies provide:
Cash Management Fund:
"The Fund will not purchase any money market instruments on margin but
may obtain such short-term credits as may be necessary for clearance of
purchases and sales of money market instruments."
Government Fund, Prime Fund, Tax-Free Fund, Tax-Managed Fund and
Treasury Fund:
"The Fund will not purchase any securities on margin but may
obtain such short-term credits as may be necessary for
clearance of transactions."
The proposed non-fundamental policy makes minor changes in wording from
the existing fundamental restrictions. Upon the approval of the elimination of
the existing fundamental policies on engaging in margin transactions, the Funds
would become subject to the following non-fundamental policy:
"The Fund will not purchase securities on margin, provided that the
Fund may obtain short-term credits necessary for the clearance of
purchases and sales of securities."
This does not constitute a substantive change in the Funds' policies.
Rather, it reflects a restatement to standardized language to be used by all
Federated Funds, and is being submitted to shareholders to comply with the 1940
Act's requirements.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #3 (j): TO AMEND, AND TO MAKE NON-FUNDAMENTAL,
THE CASH MANAGEMENT FUND'S FUNDAMENTAL INVESTMENT
POLICIES REGARDING THE TYPES OF MONEY MARKET INSTRUMENTS
THAT THE FUND IS PERMITTED TO PURCHASE
This Proposal Pertains to the Cash Management Fund Only.
The investment objective of the Cash Management Fund is to provide
stability of principal and current income consistent with stability of
principal. One of the Fund's current fundamental investment policies with which
it complies in pursuing its objective relates to the maturity of the money
market instruments that the Fund may purchase, and states:
"The Fund invests in a portfolio of money market instruments maturing in
thirteen months or less."
This policy was adopted to comply with the provisions that, at the
time, governed the maximum maturity of portfolio securities under Rule 2a-7 of
the 1940 Act. The purpose of this provision of Rule 2a-7 is to limit the Cash
Management Fund's exposure to interest rate and credit risks associated with
long maturity periods. Money market funds that use amortized cost pricing to
attempt to maintain a $1.00 net asset value, such as the Fund, must comply with
Rule 2a-7.
Amendments to Rule 2a-7, adopted by the Commission after the Cash
Management Fund adopted its policy, clarified that the maximum maturity period
for any portfolio security is 397 days or less. The Board is recommending to
shareholders that the Cash Management Fund's investment policy be amended to
mirror the language of Rule 2a-7, and to make clear that the maximum maturity
period of any portfolio security is 397 days or less. In addition, it is
recommended that the policy be made non-fundamental. The Trustees believe that
this will benefit the Cash Management Fund and is in the best interests of
shareholders. In approving the proposed change, the Trustees evaluated
compliance with Rule 2a-7, as amended, and the possibility that the Fund's
investment flexibility would be enhanced. This change will in no way affect the
Cash Management Fund's investment policy with respect to the average maturity of
the Fund's portfolio, which, on a dollar-weighted basis, will be ninety (90)
days or less.
In conjunction with this change, the Cash Management Fund's management
has also recommended that another of the current fundamental investment policies
of the Cash Management Fund regarding the types of money market instruments that
the Fund is permitted to purchase be amended and made non-fundamental. The
policy states that:
"The Fund invests in 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."
This policy is more restrictive than the requirements of Rule 2a-7 under the
1940 Act, which allow a money market fund, such as the Cash Management Fund, to
invest in money market instruments rated in the two highest short-term rating
categories of an NRSRO or in the three highest long-term rating categories of an
NRSRO, subject to specific percentage limitations. The Fund's investment adviser
believes, and the Board has concluded, that this investment policy unnecessarily
constrains the Fund's investments, and has proposed amending the policy to
state:
"The Fund invests in money market instruments that are either rated in
the two highest short-term rating categories or the three highest
long-term rating categories by one or more nationally recognized
statistical rating organizations ("NRSROs") or are of comparable
quality to securities having such ratings."
By making these policies non-fundamental, the Cash Management Fund will
be able to invest in a broader array of attractive investments that nevertheless
comply with the requirements of Rule 2a-7 under the 1940 Act. The Cash
Management Fund will continue to be subject to the limitations and restrictions
of Rule 2a-7.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #3(k): TO AMEND, AND TO MAKE NON-FUNDAMENTAL, THE CASH
MANAGEMENT FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
INVESTING IN OTHER INVESTMENT COMPANIES
This Proposal Pertains to the Cash Management Fund Only.
The Cash Management Fund currently has a fundamental investment policy
prohibiting investment in the securities issued by any other investment company,
except as part of a merger, consolidation or other acquisition. The Cash
Management Fund's investment adviser believes, and the Board has concluded, that
this prohibition unnecessarily limits the Cash Management Fund's investments.
Amending this policy would expand the investment opportunities available to the
Cash Management Fund by allowing the Fund to invest in other investment
companies. Investments in other investment companies are limited under the 1940
Act and, in the case of the Cash Management Fund, by an exemptive order issued
by the Commission (the "Order"). The 1940 Act and the Order limit both the
portion of the Cash Management Fund's assets which may be so invested in a
particular fund, and the percentage of such a fund which may be owned by the
Fund. Normally, each investment company in which the Cash Management Fund
invests will have its own operating expenses, including advisory fees; however,
the Cash Management Fund's investment adviser will waive the portion of its
advisory fee attributable to assets invested in other investment companies. It
is expected that the other duplicative expenses are justified by the benefit of
having access to the markets in which such funds invest, or in the investment
techniques or advisers of such funds.
At the present time, the Board expects to utilize the authority
provided by this proposal to invest the Cash Management Fund's temporary cash
reserves in shares of money market funds. These cash reserves typically arise
from the receipt of dividend and interest income from portfolio securities, the
receipt of payment for sale of portfolio securities, defensive cash positions
and the decision to hold cash to meet redemptions or make anticipated dividend
payments. Further, by changing the policy from fundamental to an operating
policy, the Trustees believe that maximum flexibility will be afforded to the
Cash Management Fund to amend the policy as appropriate in the future without
the burden and delay to the Fund and its shareholders of holding a special
meeting.
The ability to purchase shares of money market funds would be
beneficial because it would provide the Cash Management Fund with additional
investment opportunities late in each business day, when opportunities to
acquire money market instruments are limited. Otherwise, the Cash Management
Fund would be forced to hold some of its cash uninvested, resulting in little or
no investment income.
If shareholders approve this item, the new operating policy will read
as follows:
"The Fund may invest its assets in securities of other investment
companies as an efficient means of carrying out its investment
policies. It should be noted that investment companies incur certain
expenses, such as management fees, and, therefore, any investment by
the Fund in shares of other investment companies may be subject to such
duplicate expenses. At the present time, the Fund expects that its
investments in other investment companies will be limited to shares of
money market funds affiliated with the Fund's investment adviser."
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #3(l): TO MAKE NON-FUNDAMENTAL THE CASH MANAGEMENT
FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING INVESTING
IN U.S. GOVERNMENT SECURITIES
This Proposal Pertains to the Cash Management Fund Only.
The Cash Management Fund currently has a fundamental investment policy
pertaining to investing in U.S. government securities that states:
"The Fund may purchase marketable obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities."
This investment policy was initially adopted as a fundamental policy.
However, the Cash Management Fund is not required under the 1940 Act to have
such a fundamental policy. Accordingly, it is proposed that the Fund's existing
fundamental policy be replaced with an identical, non-fundamental policy.
Establishing this policy as a non-fundamental policy will allow the Fund to
change the policy without shareholder approval. However, the Fund has no present
intention to materially modify the policy.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #3(m): TO MAKE NON-FUNDAMENTAL THE CASH MANAGEMENT
FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
PURCHASING BANK INSTRUMENTS
This Proposal Pertains to the Cash Management Fund Only.
The Cash Management Fund currently has a fundamental investment policy
pertaining to purchasing bank instruments. The policy states:
"The Fund will not invest in instruments of domestic and foreign banks
and savings and loans unless they have capital, surplus, and undivided
profits of over $100,000,000, or unless the principal amount of the
instrument is insured by the Bank Insurance Fund ("BIF") which is
administered by the Federal Deposit Insurance Corporation ("FDIC") or
the Savings Association Insurance Fund ("SAIF") which is administered
by the FDIC. These instruments may include Eurodollar Certificates of
Deposit ("ECDs"), Yankee Certificates of Deposit ("Yankee CDs"), and
Eurodollar Time Deposits ("ETDs")."
This investment policy was initially adopted as a fundamental policy.
However, the Cash Management Fund is not required under the 1940 Act to have
such a fundamental policy. Accordingly, it is proposed that the Fund's existing
fundamental policy be replaced with an identical, non-fundamental policy.
Establishing this policy as a non-fundamental policy will allow the Fund to
change the policy without shareholder approval. However, the Fund has no present
intention to materially modify this policy.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #3(n): TO MAKE NON-FUNDAMENTAL THE CASH MANAGEMENT
FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
PURCHASING COMMERCIAL PAPER
This Proposal Pertains to the Cash Management Fund Only.
The Cash Management Fund currently has a fundamental investment policy
pertaining to purchasing commercial paper. The policy states:
"Commercial paper investments will be limited to commercial paper rated
A-1 by Standard & Poor's Corporation, Prime-1 by Moody's Investors
Services, Inc., or F-1 by Fitch Investors Service, and unrated but of
comparable quality, including Canadian Commercial Paper ("CCPs") and
Europaper."
This investment policy was initially adopted as a fundamental policy.
However, the Cash Management Fund is not required under the 1940 Act to have
such a fundamental policy. Accordingly, it is proposed that the Fund's existing
fundamental policy be replaced with an identical, non-fundamental policy.
Establishing this policy as a non-fundamental policy will allow the Fund to
change the policy without shareholder approval. However, the Fund has no present
intention to materially modify this policy.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #3(o): TO MAKE NON-FUNDAMENTAL THE CASH MANAGEMENT
FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING ENGAGING
IN REPURCHASE AGREEMENT TRANSACTIONS
This Proposal Pertains to the Cash Management Fund Only.
The Cash Management Fund currently has a fundamental investment policy
pertaining to engaging in repurchase agreements. The policy states:
"The Fund may also utilize repurchase agreements, which are
arrangements in which banks, broker/dealers, and other recognized
financial institutions sell U.S. government securities or certificates
of deposit to the Fund and agree at the time of the sale to repurchase
them at a mutually agreed upon time and price within one year from the
date of acquisition. The Fund or its custodian will take possession of
the securities subject to repurchase and these securities will be
marked to market daily. To the extent that the original seller does not
repurchase the securities from the Fund, the Fund could receive less
than the repurchase price on any sale of such securities. In the event
that such a defaulting seller filed for bankruptcy or became insolvent,
disposition of such securities by the Fund might be delayed pending
court action. The Fund believes that under the regular procedures
normally in effect for custody of the Fund's portfolio securities
subject to repurchase agreements, a court of competent jurisdiction
would rule in favor of the Fund and allow retention or disposition of
such securities. The Fund will only enter into repurchase agreements
with banks and other recognized financial institutions such as
broker/dealers which are found by the Fund's adviser to be creditworthy
pursuant to guidelines established by the Trustees."
This investment policy was initially adopted as a fundamental policy.
However, the Cash Management Fund is not required under the 1940 Act to have
such a fundamental policy. Accordingly, it is proposed that the Fund's existing
fundamental policy regarding engaging in repurchase agreements be replaced with
an identical, non-fundamental policy. Establishing this policy as a
non-fundamental policy will allow the Fund to change the policy without
shareholder approval. However, the Fund has no present intention to materially
modify this policy.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #3(p): TO MAKE NON-FUNDAMENTAL THE CASH MANAGEMENT FUND'S
FUNDAMENTAL INVESTMENT POLICY REGARDING ENGAGING IN WHEN-ISSUED AND
DELAYED DELIVERY TRANSACTIONS
This Proposal Pertains to the Cash Management Fund Only.
The Cash Management Fund currently has a fundamental investment policy
pertaining to engaging in when-issued and delayed delivery transactions. The
policy states:
"The Fund may purchase short-term U.S. government obligations on a
when-issued or delayed delivery basis. These transactions are
arrangements in which the Fund purchases securities with payment and
delivery scheduled for a future time. The Fund engages in when-issued
and delayed delivery transactions only for the purpose of acquiring
portfolio securities consistent with the Fund's investment objective
and policies, not for investment leverage. In when-issued and delayed
delivery transactions, the Fund relies on the seller to complete the
transaction. The seller's failure to deliver the securities may cause
the Fund to miss a price or yield considered to be advantageous."
This investment policy was initially adopted as a fundamental policy.
However, the Cash Management Fund is not required under the 1940 Act to have
such a fundamental policy. Accordingly, it is proposed that the Fund's existing
fundamental policy relating to when-issued and delayed delivery transactions be
replaced with an identical, non-fundamental policy. Establishing this policy as
a non-fundamental policy will allow the Fund to change the policy without
shareholder approval. However, the Fund has no present intention to materially
modify this policy
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #4: ELIMINATION OF CERTAIN OF THE FUNDS'
FUNDAMENTAL INVESTMENT POLICIES
The Board has determined that certain of the current fundamental
investment policies of the Funds are unnecessary and should be removed. Until
NSMIA was adopted in 1996, the securities laws of several states required every
investment company which intended to sell its shares in those states to adopt
policies governing a variety of operational issues, including investment in
certain securities. As a consequence of those restrictions, the Funds adopted
the investment policies described below and agreed that they would be changed
only upon the approval of shareholders. Since these prohibitions are no longer
required under current law, the management of the Trust has recommended, and the
Board has determined, that these policies should be removed. The removal of
these policies would provide greater flexibility in the management of the Funds
by permitting the Funds to purchase a broader range of securities that are
permitted investments and that are consistent with their investment objectives
and policies.
The policies being removed are listed below. Each Proposal will be
voted on separately by each Fund (unless otherwise noted), and the approval of
each change by each Fund will require the affirmative vote of a majority of the
outstanding voting shares of the Fund as defined in the 1940 Act. (See "Proxies,
Quorum and Voting at the Meeting" below).
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #4(a): TO REMOVE THE FUNDS' FUNDAMENTAL INVESTMENT
POLICIES REGARDING SELLING SECURITIES SHORT
The Funds are not required to have a fundamental restriction with
respect to short sales of securities. To maximize the Funds' flexibility in this
area, the Board believes that the Funds' restrictions on short sales of
securities should be eliminated. These restrictions were imposed by state laws
and NSMIA preempts that requirement. Notwithstanding the elimination of this
fundamental restriction, the Funds expect to continue not to engage in short
sales of securities, except to the extent that the Funds contemporaneously own
or have the right to acquire at no additional cost securities identical to, or
convertible into or exchangeable for, those sold short. Moreover, the Funds, as
money market funds, are subject to substantive regulation pursuant to Rule 2a-7
under the 1940 Act that has the effect of precluding the Funds from selling
securities short.
Upon the approval of Proposal #4(a), the existing fundamental
restrictions on selling securities short for the Funds will be eliminated.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #4(b): TO REMOVE THE PRIME FUND'S AND THE TAX-FREE
FUND'S FUNDAMENTAL INVESTMENT POLICIES
REGARDING INVESTING IN RESTRICTED SECURITIES
This Proposal Pertains to the Prime Fund and the Tax-Free Fund Only.
The Prime Fund's current fundamental investment policy on investing in
restricted securities states:
"The Fund will not invest more than 10% of the value of its total
assets in securities which are subject to legal or contractual
restrictions on resale, except for commercial paper issued under
Section 4(2) of the Securities Act of 1933."
The Tax-Free Fund's current policy on investing in restricted
securities reads as follows:
"The Fund will not invest more than 10% of its total assets in
securities subject to restrictions on resale under federal securities
laws, except for restricted securities determined to be liquid under
criteria established by the Trustees."
These policies were adopted because historically restricted securities
were viewed as illiquid since they could not be sold within seven days.
Investment companies, such as the Funds, are required to meet a shareholder's
redemption request at the current net asset value within seven days of receiving
the request for redemption. In order to do this, some portion of the securities
in the Funds' portfolios must be "liquid" so that the securities can be sold in
sufficient time to obtain the necessary cash to meet redemption requests. It is
important to note that many restricted securities are, in fact, quite liquid,
and can be purchased without jeopardizing the liquidity of the Funds'
portfolios.
Certain state securities regulators previously required mutual funds to
have a fundamental policy limiting investment in restricted securities. Since
the enactment of NSMIA, states no longer have such jurisdiction. Furthermore,
rules adopted by the SEC have substantially increased the number of restricted
securities that can now be considered liquid and, in addition, have given to the
Trustees the ability to determine, under specific guidelines, that a security is
liquid. The Trustees may delegate this duty to the investment adviser provided
the investment adviser's determination of liquidity is made in accordance with
the guidelines established and monitored by the Trustees.
The Funds' current policies prevent the Funds from acquiring a
restricted security that may be viewed by the adviser as liquid, other than
Section 4(2) commercial paper (in the case of the Prime Fund only). If this
proposal is approved, the Funds will be able to invest to an unlimited extent in
restricted securities as long as they meet the Trustees' guidelines for the
liquidity.
If a restricted security is determined not to be liquid, the purchase
of that security, together with other illiquid securities, may not exceed 10% of
the Funds' net assets in accordance with the Funds' current policy on investing
in illiquid securities.
If shareholders do not approve the above proposal, the Tax-Free Fund
will continue to invest no more than 10% of its total assets in restricted
securities of any kind, and the Prime Fund will continue to invest no more than
10% of its total assets in restricted securities of any kind, except for Section
4(2) commercial paper.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #4(c): TO REMOVE THE CASH MANAGEMENT FUND'S FUNDAMENTAL INVESTMENT
POLICY ON INVESTING FOR THE PURPOSE OF CONTROL
This Proposal Pertains to the Cash Management Fund Only.
The Cash Management Fund's current policy prohibits the acquisition of
the securities of any issuer, including investment companies, for the purpose of
exercising control over, or management of, any company. The policy states:
"The Fund will not acquire the voting securities of any issuer. It will
not invest in securities issued by any other investment company, except
as part of a merger, consolidation or other acquisition. It will not
invest in securities of a company for the purpose of exercising control
or management."
"Control" is defined under the 1940 Act as owning 25% or more of the
voting securities of an issuer. A controlling ownership is likely to have an
effect on the outcome of any shareholder voting on changes related to the
operation of the issuing company.
When the Cash Management Fund adopted this investment policy, it was
required to be fundamental by certain state securities regulators. Since NSMIA,
those requirements no longer apply. Elimination of this policy would clarify the
Cash Management Fund's ability to exercise freely its rights as a shareholder of
the companies in which it invests. The Cash Management Fund, however, does not
currently intend to become involved in directing or administering the day-to-day
operations of any company.
Shareholders of the Cash Management Fund are also being asked to
approve amendments to the Fund's fundamental investment policy relating to
investing in securities of other investment companies. See Proposal #3(k) in
this Proxy.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #4(d): TO REMOVE THE CASH MANAGEMENT FUND'S FUNDAMENTAL INVESTMENT
POLICY REGARDING THE PURCHASE OF SECURITIES OF CERTAIN ISSUERS
This Proposal Pertains to the Cash Management Fund Only.
The Cash Management Fund is presently subject to a limitation that
states:
"The Fund will not purchase or retain securities of any issuer if the
officers and Trustees of the Trust or its investment adviser owning
individually more than 1/2 of 1% of the issuer's securities together
beneficially own more than 5% of the issuer's securities."
There is no legal requirement that the Cash Management Fund have this
fundamental policy. This restriction was imposed by state laws and was preempted
by NSMIA. Moreover, the Board of the Trust and the Fund's investment adviser do
not believe this policy provides any safeguards against conflicts of interest
that are not already effectively covered under the Trust's Code of Ethics.
Accordingly, the Board believes this restriction should be eliminated.
Upon the approval of Proposal #4(d), the existing fundamental policy on
purchasing securities of issuers in which affiliates of the Trust own securities
for the Cash Management Fund will be eliminated.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
INFORMATION ABOUT THE TRUST
Proxies, Quorum and Voting at the Meeting
Only shareholders of record on the Record Date will be entitled to vote
at the Meeting. Each share of the Trust is entitled to one vote. Fractional
shares are entitled to proportionate shares of one vote. Under both the
Investment Company Act of 1940 and the Declaration of Trust, the favorable vote
of a "majority of the outstanding voting shares" of the Trust or a Fund means:
(a) the holders of 67% or more of the outstanding voting securities present at
the Meeting, if the holders of 50% or more of the outstanding voting securities
of the Trust or Fund are present or represented by proxy; or (b) the vote of the
holders of more than 50% of the outstanding voting securities, whichever is
less. The favorable vote of a majority of the outstanding voting shares of each
Fund is required to approve each of the proposals, except the election of the
Trustees and the ratification of the selection of the Auditors.
Any person giving a proxy has the power to revoke it any time prior to
its exercise by executing a superseding proxy or by submitting a written notice
of revocation to the Secretary of the Trust. In addition, although mere
attendance at the Meeting will not revoke a proxy, a shareholder present at the
Meeting may withdraw his or her proxy and vote in person. All properly executed
and unrevoked proxies received in time for the Meeting will be voted in
accordance with the instructions contained in the proxies. If no instruction is
given on the proxy, the persons named as proxies will vote the shares
represented thereby in favor of the matters set forth in the attached Notice.
In order to hold the Meeting, a "quorum" of shareholders must be
present. Holders of one-fourth of the total number of outstanding shares of the
Trust entitled to vote, present in person or by proxy, shall be required to
constitute a quorum for the purpose of voting on the proposals made.
For purposes of determining a quorum for transacting business at the
Meeting, abstentions and broker "non-votes" (that is, proxies from brokers or
nominees indicating that such persons have not received instructions from the
beneficial owner or other persons entitled to vote shares on a particular matter
with respect to which the brokers or nominees do not have discretionary power)
will be treated as shares that are present but which have not been voted. For
this reason, abstentions and broker non-votes will have the effect of a "no"
vote for purposes of obtaining the requisite approval of some of the proposals.
If a quorum is not present, the persons named as proxies may vote those
proxies which have been received to adjourn the Meeting to a later date. In the
event that a quorum is present but sufficient votes in favor of one or more of
the proposals have not been received, the persons named as proxies may propose
one or more adjournments of the Meeting to permit further solicitations of
proxies with respect to such proposal(s). All such adjournments will require the
affirmative vote of a majority of the shares present in person or by proxy at
the session of the Meeting to be adjourned. The persons named as proxies will
vote AGAINST any such adjournment those proxies which they are required to vote
against the proposal and will vote in FAVOR of the adjournment other proxies
which they are authorized to vote. A shareholder vote may be taken on other
proposals in this Proxy Statement prior to any such adjournment if sufficient
votes have been received for approval.
As referred to in this Proxy Statement, the "Federated Fund Complex,"
"The Funds" or "Funds" include the following investment companies: Automated
Government Money Trust; Cash Trust Series II; Cash Trust Series, Inc.; CCB
Funds; DG Investor Series; Edward D. Jones & Co. Daily Passport Cash Trust;
Federated Adjustable Rate U.S. Government Fund, Inc.; Federated American Leaders
Fund, Inc.; Federated ARMs Fund; Federated Core Trust; Federated Equity Funds;
Federated Equity Income Fund, Inc.; Federated Fund for U.S. Government
Securities, Inc.; Federated GNMA Trust; Federated Government Income Securities,
Inc.; Federated Government Trust; Federated High Income Bond Fund, Inc.;
Federated High Yield Trust; Federated Income Securities Trust; Federated Income
Trust; Federated Index Trust; Federated Institutional Trust; Federated Insurance
Series; Federated Master Trust; Federated Municipal Opportunities Fund, Inc.;
Federated Municipal Securities Fund, Inc.; Federated Municipal Trust; Federated
Short-Term Municipal Trust; Federated Short-Term U.S. Government Trust;
Federated Stock and Bond Fund, Inc.; Federated Stock Trust; Federated Tax-Free
Trust; Federated Total Return Series, Inc.; Federated U.S. Government Bond Fund;
Federated U.S. Government Securities Fund: 1-3 Years; Federated U.S. Government
Securities Fund: 2-5 Years; Federated U.S. Government Securities Fund: 5-10
Years; Federated Utility Fund, Inc.; Fixed Income Securities, Inc.; Intermediate
Municipal Trust; International Series, Inc.; Investment Series Funds, Inc.;
Liberty Term Trust, Inc. - 1999; Liberty U.S. Government Money Market Trust;
Liquid Cash Trust; Managed Series Trust; Money Market Management, Inc.; Money
Market Obligations Trust; Money Market Obligations Trust II; Money Market Trust;
Municipal Securities Income Trust; Newpoint Funds; Regions Funds; RIGGS Funds;
Tax-Free Instruments Trust; The Planters Funds; Trust for Government Cash
Reserves; Trust for Short-Term U.S. Government Securities; Trust for U.S.
Treasury Obligations; WesMark Funds; WCT Funds; World Investment Series, Inc.;
Blanchard Funds; Blanchard Precious Metals Fund, Inc.; High Yield Cash Trust;
Investment Series Trust; Targeted Duration Trust; The Virtus Funds; and Trust
for Financial Institutions.
Share Ownership of the Trustees
Officers and Trustees of the Trust own less than 1% of the Trust's outstanding
shares.
At the close of business on the Record Date, the following persons owned, to the
knowledge of management, more than 5% of the outstanding shares of the
respective classes of the Funds:
Cash Management Fund: The following persons owned, to the knowledge of
management, more than 5% of the outstanding shares of the Institutional Service
Shares class of the Fund: FBS Investment Services Inc., Minneapolis, MN, for the
benefit of various customers, owned approximately 189,539,342.97 shares
(11.51%); Fiduciary Trust Company International, New York, NY, on behalf of
various customer accounts, owned approximately 105,821,810.37 shares (6.42%);
Stephens Inc., Little Rock, AK, on behalf of various customer accounts, owned
approximately 97,301,862.47 shares (5.91%) and Dain Rauscher Inc., Minneapolis,
MN, for the benefit of various customers, owned approximately 84,391,120.56
shares (5.12%). At the close of business on the Record Date, to the knowledge of
management, no person owned more than 5% of the outstanding shares of the Cash
Series Two Shares class of the Fund.
Government Fund: The following persons owned, to the knowledge of management,
more than 5% of the outstanding shares of the Institutional Shares class of the
Fund: Fleet Securities Corp., Rochester, NY, on behalf of various customer
accounts, owned approximately 311,004,745.53 shares (7.46%); and Var & Co., St.
Paul, MN, owned approximately 232,599,941 shares (5.58%). The following person
owned, to the knowledge of management, more than 5% of the outstanding shares of
the Institutional Service Shares class of the Fund: Lane & Co., San Diego, CA,
owned approximately 87,649,864.81 shares (5.11%).
Tax-Managed Fund: The following persons owned, to the knowledge of management,
more than 5% of the outstanding shares of the Institutional Service Shares class
of the Fund: Citizens Bank of Rhode Island, Providence, RI, on behalf of various
customer accounts, owned approximately 171,598,217.90 shares (13.36%); RF Micro
Devices, Greensboro, NC, owned approximately 110,187,566.50 shares (8.58%); and
Perry Baker & Co., Westerly, RI, owned approximately 81,932,476.78 shares
(6.38%). The following persons owned, to the knowledge of management, more than
5% of the outstanding shares of the Institutional Shares class of the Fund:
Scaup & Co., Boston MA, owned approximately 182,405,283.76 shares (15.96%);
Panabco, Newark, OH, owned approximately 134,681,173.79 shares (11.78%); Mellon
Bank Capital Markets, Pittsburgh, PA, on behalf of various customer accounts,
owned approximately 125,000,000 shares (10.94%); and Santa Monica Bank, Santa
Monica, CA, on behalf of various customer accounts, owned approximately
77,026,859.56 shares (6.74%).
Prime Fund: The following persons owned, to the knowledge of management, more
than 5% of the outstanding shares of the Institutional Service Shares class of
the Fund: Laba & Co., Chicago, IL, on behalf of various customer accounts, owned
approximately 878,228,684.77 shares (25.61%); Peoples Bank, Bridgeport, CT,
owned approximately 269,056,491 shares (7.85%); and Var & Co., St. Paul, MN,
owned approximately 186,236,983 shares (5.43%). The following persons owned, to
the knowledge of management, more than 5% of the outstanding shares of the
Institutional Shares class of the Fund: America Online, Inc., Dulles, VA, owned
approximately 754,600,000 shares (14.42).
Tax-Free Fund: The following persons owned, to the knowledge of management, more
than 5% of the outstanding shares of the Institutional Service Shares class of
the Fund: Naidot & Co., Woodbridge, NJ, on behalf of various customer accounts,
owned approximately 324,408,554. shares (32.47%); Morand & Company, Chicago, IL,
on behalf of various customer accounts, owned approximately 64,631,129.48 shares
(6.47%); and Hibspec, Milwaukee, WI, on behalf of various customer accounts,
owned approximately 55,280,482.15 shares (5.53). The following persons owned, to
the knowledge of management, more than 5% of the outstanding shares of the
Institutional Shares class of the Fund: Wachovia Bank of North Carolina,
Winston-Salem, NC, owned approximately 321,602,612.65 shares (14.10%); The Chase
Manhattan Bank, NA, New York, NY, owned approximately 282,658,154 shares
(12.40%); and Var & Co., St.
Paul, MN, owned approximately 140,690,840 shares (6.17%).
Treasury Fund: The following persons owned, to the knowledge of management, more
than 5% of the outstanding shares of the Institutional Service Shares class of
the Fund: Trustman, Atlanta, GA, on behalf of various customer accounts, owned
approximately 497,284,628.94 shares (9.28%); Citibank, NA, on behalf of various
customer accounts, owned approximately 424,433,168.97 shares (7.92%); The Chase
Manhattan Bank, NA, New York, NY, owned approximately 410,745,164 shares
(7.67%); and Plitt & Co., Baltimore, MD, owned approximately 297,280,975.60
shares (5.55%). The following persons owned, to the knowledge of management,
more than 5% of the outstanding shares of the Institutional Shares class of the
Fund: Turtle & Co., Boston, MA, owned approximately 908,590,866.59 shares
(16.11%); Fleet Securities Corp., Rochester, NY, owned approximately
498,916,070.56 shares (8.85%); and Var & Co., St. Paul, MN, owned approximately
306,987,682 shares (5.44%). The following persons owned, to the knowledge of
management, more than 5% of the outstanding shares of the Institutional Capital
Shares class of the Fund: DC Financial Responsibility Authority, Washington, DC,
owned approximately 97,297,251.68 shares (24.60%); First Nebraska Trust Company,
Lincoln, NE, owned approximately 20,134,432.41 shares (5.09%); DCFRA (Escrow
Account ), owned approximately 159,227,000 shares (40.26%), and DC FRA DCPS
Connie Lee, Washington, DC, owned approximately 20,299,632.09 shares (5.13%).
<TABLE>
<CAPTION>
<S> <C> <C>
Trustee Compensation
Name, Aggregate Total Compensation Paid
Position With Compensation From Fund Complex+
Trust From
Trust1#
- --------------------------------- -------------------------- ----------------------------------------------------------
John F. Donahue*@ $0 $0 for the Trust and
Chairman and Trustee 56 other investment companies in the Fund Complex
Thomas G. Bigley $18,351 $111,222 for the Trust and
Trustee 56 other investment companies in the Fund Complex
John T. Conroy, Jr. $20,189 $122,362 for the Trust and
Trustee 56 other investment companies in the Fund Complex
William J. Copeland $20,189 $122,362 for the Trust and
Trustee 56 other investment companies in the Fund Complex
John F. Cunningham** $0 $0 for the Trust and
Trustee 56 other investment companies in the Fund Complex
J. Christopher Donahue* $0 $0 for the Trust and
President and Trustee 18 other investment companies in the Fund Complex
James E. Dowd $20,189 $122,362 for the Trust and
Trustee 56 other investment companies in the Fund Complex
Lawrence D. Ellis, M.D.* $18,351 $112,222 for the Trust and
Trustees 56 other investment companies in the Fund Complex
Edward L. Flaherty, Jr.@ $20,189 $112,222 for the Trust and
Trustee 56 other investment companies in the Fund Complex
Peter E. Madden $18,351 $112,222 for the Trust and
Trustee 56 other investment companies in the Fund Complex
Charles F. Mansfield** $0 $0 for the Trust and
Trustee 56 other investment companies in the Fund Complex
John E. Murray, Jr. $18,351 $112,222 for the Trust and
Trustee 56 other investment companies in the Fund Complex
Wesley W. Posvar $18,351 $112,222 for the Trust and
Trustee 56 other investment companies in the Fund Complex
Marjorie P. Smuts $18,351 $112,222 for the Trust and
Trustee 56 other investment companies in the Fund Complex
John S. Walsh** $0 $0 for the Trust and
Trustee 56 other investment companies in the Fund Complex
</TABLE>
1 Information is furnished for the fiscal year ended July 31, 1998.
# The aggregate compensation is provided for the Trust which is comprised
of six portfolios.
+ The information is provided for the last calendar year.
* The Trustee is deemed to be an "interested person" as defined in the 1940 Act.
@ Member of the Executive Committee.
** Messrs. Cunningham, Mansfield and Walsh became members of the Board of
Trustees on January 1, 1999. Messrs. Cunningham, Mansfield and Walsh did not
receive any fees from the Fund Complex as of the last calendar year.
During the fiscal year ended July 31, 1998, there were four meetings of
the Board of Trustees. The interested Trustees, other than Dr. Ellis, do not
receive fees from the Trust. Dr. Ellis is an interested person by reason of the
employment of his son-in-law by Federated Securities Corp. All Trustees were
reimbursed for expenses for attendance at Board of Trustees meetings.
The Executive Committee of the Board of Trustees handles the
responsibilities of the Board between meetings of the Board. Other than its
Executive Committee, the Trust has one Board committee, the Audit Committee.
Generally, the function of the Audit Committee is to assist the Board of
Trustees in fulfilling its duties relating to the Trust's accounting and
financial reporting practices and to serve as a direct line of communication
between the Board of Trustees and the independent auditors. The specific
functions of the Audit Committee include recommending the engagement or
retention of the independent auditors, reviewing with the independent auditors
the plan and the results of the auditing engagement, approving professional
services provided by the independent auditors prior to the performance of such
services, considering the range of audit and non-audit fees, reviewing the
independence of the independent auditors, reviewing the scope and results of the
Trust's procedures for internal auditing, and reviewing the Trust's system of
internal accounting controls.
For the most recently completed fiscal year, Messrs. Flaherty, Conroy,
Copeland and Dowd served on the Audit Committee. These Trustees are not
interested Trustees of the Trust. During the fiscal year ended July 31, 1998,
there were four meetings of the Audit Committee. All of the members of the Audit
Committee were present for each meeting. Each member of the Audit Committee
receives an annual fee of $100 plus $25 for attendance at each meeting and is
reimbursed for expenses of attendance.
Officers of the Trust
The executive officers of the Trust are elected annually by the Board
of Trustees. Each officer holds the office until qualification of his successor.
The names and birthdates of the executive officers of the Trust and their
principal occupations during the last five years are as follows:
John F. Donahue
Federated Investors Tower
Pittsburgh, PA
Birthdate: July 28, 1924
Chairman and Trustee
Chairman and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; Chairman and Director, Federated Research
Corp. and Federated Global Research Corp.; Chairman, Passport Research, Ltd.;
Chief Executive Officer and Director or Trustee of the Funds. Mr. Donahue is the
father of J. Christopher Donahue, Executive Vice President and Trustee of the
Trust.
J. Christopher Donahue
Federated Investors Tower
Pittsburgh, PA
Birthdate: April 11, 1949
President and Trustee
President or Executive Vice President of the Federated Fund Complex; Director or
Trustee of some of the Funds in the Federated Fund Complex; President and
Director, Federated Investors, Inc.; President and Trustee, Federated Advisers,
Federated Management, and Federated Research; President and Director, Federated
Research Corp. and Federated Global Research Corp.; President, Passport
Research, Ltd.; Trustee, Federated Shareholder Services Company; Director,
Federated Services Company. Mr. Donahue is the son of John F. Donahue, Chairman
and Trustee of the Trust.
Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
Executive Vice President
Trustee or Director of some of the Funds in the Federated Fund Complex;
President, Executive Vice President and Treasurer of some of the Funds in the
Federated Fund Complex; Vice Chairman, Federated Investors, Inc.; Vice
President, Federated Advisers, Federated Management, Federated Research,
Federated Research Corp., Federated Global Research Corp. and Passport Research,
Ltd.; Executive Vice President and Director, Federated Securities Corp.;
Trustee, Federated Shareholder Services Company.
John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 26, 1938
Executive Vice President and Secretary
Executive Vice President and Secretary of the Federated Fund Complex; Executive
Vice President, Secretary, and Director, Federated Investors, Inc.; Trustee,
Federated Advisers, Federated Management, and Federated Research; Director,
Federated Research Corp. and Federated Global Research Corp.; Director,
Federated Services Company; Director, Federated Securities Corp.
Richard J. Thomas
Federated Investors Tower
Pittsburgh, PA
Birthdate: June 17, 1954
Treasurer
Treasurer of the Federated Fund Complex; Vice President - Funds Financial
Services Division, Federated Investors, Inc.
Deborah A. Cunningham
Federated Investors Tower
Pittsburgh, PA
Birthdate: September 15, 1959
Senior Vice President
Senior Vice President, Federated Investment Management Company
Mary Jo Ochson
Federated Investors Tower
Pittsburgh, PA
Birthdate: September 12, 1953
Senior Vice President
Senior Vice President, Federated Investment Management Company
Susan R. Hill
Federated Investors Tower
Pittsburgh, PA
Birthdate: June 20, 1963
Vice President
Vice President, Federated Investment Management Company
Margie M. Wilhelm
Federated Investors Tower
Pittsburgh, PA
Birthdate: ___________, ____
Vice President
Vice President, Federated Investment Management Company
Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 17, 1923
Vice President
President or Vice President of some of the Funds in the Federated Fund Complex;
Director or Trustee of some of the Funds in the Federated Fund Complex;
Executive Vice President, Federated Investors, Inc.; Chairman and Director,
Federated Securities Corp.
None of the Officers of the Trust received salaries from the Trust
during the fiscal year ended July 31, 1998.
OTHER MATTERS AND DISCRETION OF ATTORNEYS NAMED IN THE PROXY
The Trust is not required, and does not intend, to hold regular annual
meetings of shareholders. Shareholders wishing to submit proposals for
consideration for inclusion in a proxy statement for the next meeting of
shareholders should send their written proposals to Money Market Obligations
Trust, Federated Investors Funds, 5800 Corporate Drive, Pittsburgh, Pennsylvania
15237-7000, so that they are received within a reasonable time before any such
meeting.
No business other than the matters described above is expected to come
before the Meeting, but should any other matter requiring a vote of shareholders
arise, including any question as to an adjournment or postponement of the
Meeting, the persons named on the enclosed proxy card will vote on such matters
according to their best judgment in the interests of the Trust.
SHAREHOLDERS ARE REQUESTED TO COMPLETE, DATE
AND SIGN THE ENCLOSED PROXY CARD
AND RETURN IT IN THE ENCLOSED
ENVELOPE, WHICH NEEDS NO POSTAGE
IF MAILED IN THE UNITED STATES.
By Order of the Board of Trustees,
John W. McGonigle
Secretary
May 7, 1999
<PAGE>
DEFINITIVE
MONEY MARKET OBLIGATIONS TRUST
Automated Cash Management Trust
Government Obligations Fund
Government Obligations Tax-Managed Fund
Prime Obligations Fund
Tax-Free Obligations Fund
Treasury Obligations Fund
Investment Adviser
FEDERATED INVESTMENT MANAGEMENT COMPANY
Federated Investors Tower
Pittsburgh, PA 15222-3779
Distributor
FEDERATED SECURITIES CORP.
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Administrator
FEDERATED SERVICES COMPANY
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Cusip
Cusip
Cusip
Cusip
Cusip
Cusip
(_____/99)
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of
Automated Cash Management Trust (the "Fund"), a portfolio of Money Market
Obligations Trust (the "Trust"), hereby appoint Patricia F. Conner, Gail Cagney,
William Haas, Susan M. Jones and Ann M. Scanlon, or any one of them, true and
lawful attorneys, with the power of substitution of each, to vote all shares of
the Fund which the undersigned is entitled to vote at the Special Meeting in
lieu of Annual Meeting of Shareholders (the "Meeting") to be held on June 24,
1999, at 5800 Corporate Drive, Pittsburgh, Pennsylvania, at 2:00 p.m. and at any
adjournment thereof.
The attorneys named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. Discretionary authority
is hereby conferred as to all other matters as may properly come before the
Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF MONEY MARKET
OBLIGATIONS TRUST. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE
MANNER DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED "FOR" THE PROPOSALS.
By checking the box "FOR" below, you will vote to approve each of the proposed
items in this proxy, and to elect each of the nominees as Trustees of the Trust
FOR [ ]
Proposal 1 To elect John F. Cunningham, Charles F. Mansfield, Jr. and
John S. Walsh as Trustees of the Trust
FOR [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
VOTE FOR ALL
EXCEPT [ ]
If you do not wish your shares to be voted "FOR"
a particular nominee, mark the "Vote For All
Except" box and strike a line through the name of
each nominee for whom you are NOT voting. Your
shares will be voted for the remaining nominees.
Proposal 2 To ratify the selection of Arthur Andersen LLP as the Trust's
independent auditors
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
Proposal 3 To make changes to the Fund's fundamental investment policies:
3(a) To amend the Fund's fundamental investment
policy regarding borrowing money and issuing
senior securities FOR [ ] AGAINST [ ]
ABSTAIN [ ]
3(b) To amend the Fund's fundamental investment
policy regarding investing in real estate
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3(c) To amend the Fund's fundamental investment
policy regarding investing in commodities
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3(d) To amend the Fund's fundamental investment
policy regarding underwriting securities FOR
[ ] AGAINST [ ] ABSTAIN [ ]
3(e) To amend the Fund's fundamental investment
policy regarding lending assets FOR [ ]
AGAINST [ ] ABSTAIN [ ]
3(f) To amend the Fund's fundamental investment policy regarding
concentration of the Fund's investments in the securities of
companies in the same industry
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3(g) To amend, and to make non-fundamental, the
Fund's fundamental investment policy
regarding pledging assets FOR [ ] AGAINST [
] ABSTAIN [ ]
3(h) To amend, and to make non-fundamental, the
Fund's fundamental investment policy
regarding buying securities on margin FOR [
] AGAINST [ ] ABSTAIN [ ]
3(i) To amend, and to make non-fundamental, the Fund's fundamental
investment policies regarding the types of money market
instruments that the Fund is permitted to purchase
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3(j) To amend, and to make non-fundamental, the Fund's fundamental
investment policy relating to investing in other investment
companies
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3(k) To make non-fundamental the Fund's fundamental investment
policy relating to investing in U.S. government securities
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3(l) To make non-fundamental the Fund's
fundamental investment policy relating to
purchasing bank instruments FOR [ ] AGAINST
[ ] ABSTAIN [ ]
3(m) To make non-fundamental the Fund's
fundamental investment policy relating to
purchasing commercial paper FOR [ ] AGAINST
[ ] ABSTAIN [ ]
3(n) To make non-fundamental the Fund's fundamental investment
policy relating to engaging in repurchase agreement
transactions
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3(o) To make non-fundamental the Fund's fundamental investment
policy relating to engaging in when-issued and delayed
delivery transactions
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
Proposal 4 To eliminate certain of the Fund's fundamental investment policies:
4(a) To remove the Fund's fundamental investment
policy regarding selling securities short
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4(b) To remove the Fund's fundamental investment
policy regarding investing for the purpose
of exercising control FOR [ ] AGAINST [ ]
ABSTAIN [ ]
4(c) To remove the Fund's fundamental investment
policy regarding the purchase of securities
of certain issuers FOR [ ] AGAINST [ ]
ABSTAIN [ ]
YOUR VOTE IS
IMPORTANT Please
complete, sign and
return this card
as soon as
possible.
Dated
Signature
Signature (Joint Owners)
Please sign this proxy exactly as your name appears on the books of the Trust.
Joint owners should each sign personally. Directors and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
You may also vote your shares by
touchtone phone by calling
1-800-690-6903 or through the
Internet at www.proxyvote.com
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of
Government Obligations Fund (the "Fund"), a portfolio of Money Market
Obligations Trust (the "Trust"), hereby appoint Patricia F. Conner, Gail Cagney,
William Haas, Susan M. Jones and Ann M. Scanlon, or any one of them, true and
lawful attorneys, with the power of substitution of each, to vote all shares of
the Fund which the undersigned is entitled to vote at the Special Meeting in
lieu of Annual Meeting of Shareholders (the "Meeting") to be held on June 24,
1999, at 5800 Corporate Drive, Pittsburgh, Pennsylvania, at 2:00 p.m. and at any
adjournment thereof.
The attorneys named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. Discretionary authority
is hereby conferred as to all other matters as may properly come before the
Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF MONEY MARKET
OBLIGATIONS TRUST. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE
MANNER DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED "FOR" THE PROPOSALS.
By checking the box "FOR" below, you will vote to approve each of the proposed
items in this proxy, and to elect each of the nominees as Trustees of the Trust
FOR [ ]
Proposal 1 To elect John F. Cunningham, Charles F. Mansfield, Jr. and
John S. Walsh as Trustees of the Trust
FOR [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
VOTE FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR"
a particular nominee, mark the "VOTE FOR ALL
EXCEPT" box and strike a line through the name of
each nominee for whom you are NOT voting. Your
shares will be voted for the remaining nominees.
Proposal 2 To ratify the selection of Arthur Andersen LLP as the Trust's
independent auditors
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
Proposal 3 To make changes to the Fund's fundamental investment policies:
3(a) To amend the Fund's fundamental investment policy regarding
diversification
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3(b) To amend the Fund's fundamental investment
policy regarding borrowing money and issuing
senior securities FOR [ ] AGAINST [ ]
ABSTAIN [ ]
3(c) To amend the Fund's fundamental investment
policy regarding investing in real estate
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3(d) To amend the Fund's fundamental investment
policy regarding investing in commodities
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3(e) To amend the Fund's fundamental investment
policy regarding underwriting securities FOR
[ ] AGAINST [ ] ABSTAIN [ ]
3(f) To amend the Fund's fundamental investment
policy regarding lending assets FOR [ ]
AGAINST [ ] ABSTAIN [ ]
3(g) To amend the Fund's fundamental investment policy regarding
concentration of the Fund's investments in the securities of
companies in the same industry
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3(h) To amend, and to make non-fundamental, the
Fund's fundamental investment policy
regarding pledging assets FOR [ ] AGAINST [
] ABSTAIN [ ]
3(i) To amend, and to make non-fundamental, the
Fund's fundamental investment policy
regarding buying securities on margin FOR [
] AGAINST [ ] ABSTAIN [ ]
Proposal 4 To eliminate the Fund's fundamental investment policy
regarding selling securities short
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
YOUR VOTE IS
IMPORTANT Please
complete, sign and
return this card
as soon as
possible.
Dated
Signature
Signature (Joint Owners)
Please sign this proxy exactly as your name appears on the books of the Trust.
Joint owners should each sign personally. Directors and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
You may also vote your shares by
touchtone phone by calling
1-800-690-6903 or through the
Internet at www.proxyvote.com
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of
Government Obligations Tax-Managed Fund (the "Fund"), a portfolio of Money
Market Obligations Trust (the "Trust"), hereby appoint Patricia F. Conner, Gail
Cagney, William Haas, Susan M. Jones and Ann M. Scanlon, or any one of them,
true and lawful attorneys, with the power of substitution of each, to vote all
shares of the Fund which the undersigned is entitled to vote at the Special
Meeting in lieu of Annual Meeting of Shareholders (the "Meeting") to be held on
June 24, 1999, at 5800 Corporate Drive, Pittsburgh, Pennsylvania, at 2:00 p.m.
and at any adjournment thereof.
The attorneys named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. Discretionary authority
is hereby conferred as to all other matters as may properly come before the
Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF MONEY MARKET
OBLIGATIONS TRUST. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE
MANNER DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED "FOR" THE PROPOSALS.
By checking the box "FOR" below, you will vote to approve each of the proposed
items in this proxy, and to elect each of the nominees as Trustees of the Trust
FOR [ ]
Proposal 1 To elect John F. Cunningham, Charles F. Mansfield, Jr. and
John S. Walsh as Trustees of the Trust
FOR [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
VOTE FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR"
a particular nominee, mark the "VOTE FOR ALL
EXCEPT" box and strike a line through the name of
each nominee for whom you are NOT voting. Your
shares will be voted for the remaining nominees.
Proposal 2 To ratify the selection of Arthur Andersen LLP as the Trust's
independent auditors
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
Proposal 3 To make changes to the Fund's fundamental investment policies:
3(a) To amend the Fund's fundamental investment policy regarding
diversification
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3(b) To amend the Fund's fundamental investment
policy regarding borrowing money and issuing
senior securities FOR [ ] AGAINST [ ]
ABSTAIN [ ]
3(c) To amend the Fund's fundamental investment
policy regarding investing in real estate
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3(d) To amend the Fund's fundamental investment
policy regarding investing in commodities
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3(e) To amend the Fund's fundamental investment
policy regarding underwriting securities FOR
[ ] AGAINST [ ] ABSTAIN [ ]
3(f) To amend the Fund's fundamental investment
policy regarding lending assets FOR [ ]
AGAINST [ ] ABSTAIN [ ]
3(g) To amend the Fund's fundamental investment policy regarding
concentration of the Fund's investments in the securities of
companies in the same industry
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3(h) To amend, and to make non-fundamental, the
Fund's fundamental investment policy
regarding pledging assets FOR [ ] AGAINST [
] ABSTAIN [ ]
3(i) To amend, and to make non-fundamental, the
Fund's fundamental investment policy
regarding buying securities on margin FOR [
] AGAINST [ ] ABSTAIN [ ]
Proposal 4 To eliminate the Fund's fundamental investment policy
regarding selling securities short
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
YOUR VOTE IS
IMPORTANT Please
complete, sign and
return this card
as soon as
possible.
Dated
Signature
Signature (Joint Owners)
Please sign this proxy exactly as your name appears on the books of the Trust.
Joint owners should each sign personally. Directors and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
You may also vote your shares by
touchtone phone by calling
1-800-690-6903 or through the
Internet at www.proxyvote.com
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of Prime
Obligations Fund (the "Fund"), a portfolio of Money Market Obligations Trust
(the "Trust"), hereby appoint Patricia F. Conner, Gail Cagney, William Haas,
Susan M. Jones and Ann M. Scanlon, or any one of them, true and lawful
attorneys, with the power of substitution of each, to vote all shares of the
Fund which the undersigned is entitled to vote at the Special Meeting in lieu of
Annual Meeting of Shareholders (the "Meeting") to be held on June 24, 1999, at
5800 Corporate Drive, Pittsburgh, Pennsylvania, at 2:00 p.m. and at any
adjournment thereof.
The attorneys named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. Discretionary authority
is hereby conferred as to all other matters as may properly come before the
Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF MONEY MARKET
OBLIGATIONS TRUST. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE
MANNER DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED "FOR" THE PROPOSALS.
By checking the box "FOR" below, you will vote to approve each of the proposed
items in this proxy, and to elect each of the nominees as Trustees of the Trust
FOR [ ]
Proposal 1 To elect John F. Cunningham, Charles F. Mansfield, Jr. and
John S. Walsh as Trustees of the Trust
FOR [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
VOTE FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR"
a particular nominee, mark the "VOTE FOR ALL
EXCEPT" box and strike a line through the name of
each nominee for whom you are NOT voting. Your
shares will be voted for the remaining nominees.
Proposal 2 To ratify the selection of Arthur Andersen LLP as the Trust's
independent auditors
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
Proposal 3 To make changes to the Fund's fundamental investment policies:
3(a) To amend the Fund's fundamental investment policy regarding
diversification
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3(b) To amend the Fund's fundamental investment
policy regarding borrowing money and issuing
senior securities FOR [ ] AGAINST [ ]
ABSTAIN [ ]
3(c) To amend the Fund's fundamental investment
policy regarding investing in real estate
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3(d) To amend the Fund's fundamental investment
policy regarding investing in commodities
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3(e) To amend the Fund's fundamental investment
policy regarding underwriting securities FOR
[ ] AGAINST [ ] ABSTAIN [ ]
3(f) To amend the Fund's fundamental investment
policy regarding lending assets FOR [ ]
AGAINST [ ] ABSTAIN [ ]
3(g) to amend the fund's fundamental investment policy regarding
concentration of the Fund's investments in the securities of
companies in the same industry
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3(h) To amend, and to make non-fundamental, the
Fund's fundamental investment policy
regarding pledging assets FOR [ ] AGAINST [
] ABSTAIN [ ]
3(i) To amend, and to make non-fundamental, the
Fund's fundamental investment policy
regarding buying securities on margin FOR [
] AGAINST [ ] ABSTAIN [ ]
Proposal 4 To eliminate certain of the Fund's fundamental investment policies:
4(a) To remove the Fund's fundamental investment
policy regarding selling securities short
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4(b) To remove the Fund's fundamental investment
policy regarding investing in restricted
securities FOR [ ] AGAINST [ ] ABSTAIN [ ]
YOUR VOTE IS
IMPORTANT Please
complete, sign and
return this card
as soon as
possible.
Dated
Signature
Signature (Joint Owners)
Please sign this proxy exactly as your name appears on the books of the Trust.
Joint owners should each sign personally. Directors and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
You may also vote your shares by
touchtone phone by calling
1-800-690-6903 or through the
Internet at www.proxyvote.com
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of Tax-Free
Obligations Fund (the "Fund"), a portfolio of Money Market Obligations Trust
(the "Trust"), hereby appoint Patricia F. Conner, Gail Cagney, William Haas,
Susan M. Jones and Ann M. Scanlon, or any one of them, true and lawful
attorneys, with the power of substitution of each, to vote all shares of the
Fund which the undersigned is entitled to vote at the Special Meeting in lieu of
Annual Meeting of Shareholders (the "Meeting") to be held on June 24, 1999, at
5800 Corporate Drive, Pittsburgh, Pennsylvania, at 2:00 p.m. and at any
adjournment thereof.
The attorneys named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. Discretionary authority
is hereby conferred as to all other matters as may properly come before the
Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF MONEY MARKET
OBLIGATIONS TRUST. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE
MANNER DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED "FOR" THE PROPOSALS.
By checking the box "FOR" below, you will vote to approve each of the proposed
items in this proxy, and to elect each of the nominees as Trustees of the Trust
FOR [ ]
Proposal 1 To elect John F. Cunningham, Charles F. Mansfield, Jr. and
John S. Walsh as Trustees of the Trust
FOR [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
VOTE FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR"
a particular nominee, mark the "VOTE FOR ALL
EXCEPT" box and strike a line through the name of
each nominee for whom you are NOT voting. Your
shares will be voted for the remaining nominees.
Proposal 2 To ratify the selection of Arthur Andersen LLP as the Trust's
independent auditors
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
Proposal 3 To make changes to the Fund's fundamental investment policies:
3(a) To amend the Fund's fundamental investment policy regarding
diversification
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3(b) To amend the Fund's fundamental investment
policy regarding borrowing money and issuing
senior securities FOR [ ] AGAINST [ ]
ABSTAIN [ ]
3(c) To amend the Fund's fundamental investment
policy regarding investing in real estate
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3(d) To amend the Fund's fundamental investment
policy regarding investing in commodities
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3(e) To amend the Fund's fundamental investment
policy regarding underwriting securities FOR
[ ] AGAINST [ ] ABSTAIN [ ]
3(f) To amend the Fund's fundamental investment
policy regarding lending assets FOR [ ]
AGAINST [ ] ABSTAIN [ ]
3(g) To amend the Fund's fundamental investment policy regarding
concentration of the Fund's investments in the securities of
companies in the same industry
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3(h) To amend, and to make non-fundamental, the
Fund's fundamental investment policy
regarding pledging assets FOR [ ] AGAINST [
] ABSTAIN [ ]
3(i) To amend, and to make non-fundamental, the
Fund's fundamental investment policy
regarding buying securities on margin FOR [
] AGAINST [ ] ABSTAIN [ ]
Proposal 4 To eliminate certain of the Fund's fundamental investment policies:
4(a) To remove the Fund's fundamental investment
policy regarding selling securities short
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4(b) To remove the Fund's fundamental investment
policy regarding investing in restricted
securities FOR [ ] AGAINST [ ] ABSTAIN [ ]
YOUR VOTE IS
IMPORTANT Please
complete, sign and
return this card
as soon as
possible.
Dated
Signature
Signature (Joint Owners)
Please sign this proxy exactly as your name appears on the books of the Trust.
Joint owners should each sign personally. Directors and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
You may also vote your shares by
touchtone phone by calling
1-800-690-6903 or through the
Internet at www.proxyvote.com
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of Treasury
Obligations Fund (the "Fund"), a portfolio of Money Market Obligations Trust
(the "Trust"), hereby appoint Patricia F. Conner, Gail Cagney, William Haas,
Susan M. Jones and Ann M. Scanlon, or any one of them, true and lawful
attorneys, with the power of substitution of each, to vote all shares of the
Fund which the undersigned is entitled to vote at the Special Meeting in lieu of
Annual Meeting of Shareholders (the "Meeting") to be held on June 24, 1999, at
5800 Corporate Drive, Pittsburgh, Pennsylvania, at 2:00 p.m. and at any
adjournment thereof.
The attorneys named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. Discretionary authority
is hereby conferred as to all other matters as may properly come before the
Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF MONEY MARKET
OBLIGATIONS TRUST. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE
MANNER DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED "FOR" THE PROPOSALS.
By checking the box "FOR" below, you will vote to approve each of the proposed
items in this proxy, and to elect each of the nominees as Trustees of the Trust
FOR [ ]
Proposal 1 To elect John F. Cunningham, Charles F. Mansfield, Jr. and
John S. Walsh as Trustees of the Trust
FOR [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
VOTE FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR"
a particular nominee, mark the "VOTE FOR ALL
EXCEPT" box and strike a line through the name of
each nominee for whom you are NOT voting. Your
shares will be voted for the remaining nominees.
Proposal 2 To ratify the selection of Arthur Andersen LLP as the Trust's
independent auditors
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
Proposal 3 To make changes to the Fund's fundamental investment policies:
3(a) To amend the Fund's fundamental investment policy regarding
diversification
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3(b) To amend the Fund's fundamental investment
policy regarding borrowing money and issuing
senior securities FOR [ ] AGAINST [ ]
ABSTAIN [ ]
3(c) To amend the Fund's fundamental investment
policy regarding investing in real estate
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3(d) To amend the Fund's fundamental investment
policy regarding investing in commodities
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3(e) To amend the Fund's fundamental investment
policy regarding underwriting securities FOR
[ ] AGAINST [ ] ABSTAIN [ ]
3(f) To amend the Fund's fundamental investment
policy regarding lending assets FOR [ ]
AGAINST [ ] ABSTAIN [ ]
3(g) To amend the Fund's fundamental investment policy regarding
concentration of the Fund's investments in the securities of
companies in the same industry
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3(h) To amend, and to make non-fundamental, the
Fund's fundamental investment policy
regarding pledging assets FOR [ ] AGAINST [
] ABSTAIN [ ]
3(i) To amend, and to make non-fundamental, the
Fund's fundamental investment policy
regarding buying securities on margin FOR [
] AGAINST [ ] ABSTAIN [ ]
Proposal 4 To eliminate the Fund's fundamental investment policy
regarding selling securities short
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
YOUR VOTE IS
IMPORTANT Please
complete, sign and
return this card
as soon as
possible.
Dated
Signature
Signature (Joint Owners)
Please sign this proxy exactly as your name appears on the books of the Trust.
Joint owners should each sign personally. Directors and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
You may also vote your shares by
touchtone phone by calling
1-800-690-6903 or through the
Internet at www.proxyvote.com
