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
MUNICIPAL SECURITIES INCOME 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.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
MUNICIPAL SECURITIES INCOME TRUST
FEDERATED CALIFORNIA MUNICIPAL INCOME TRUST
FEDERATED MICHIGAN INTERMEDIATE MUNICIPAL TRUST
FEDERATED NEW YORK MUNICIPAL INCOME FUND
FEDERATED OHIO MUNICIPAL INCOME FUND
FEDERATED PENNSYLVANIA MUNICIPAL INCOME 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.
Municipal Securities Income Trust (the "Trust") will hold a special meeting of
shareholders of Federated California Municipal Income Fund, Federated Michigan
Intermediate Municipal Trust, Federated New York Municipal Income Fund,
Federated Ohio Municipal Income Fund and Federated Pennsylvania Municipal Income
Fund on June 25, 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. The
Trustees also recommend an amendment to the Declaration of Trust.
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 Trust and
its investors.
The Board of Trustees approved the selection of Deloitte & Touche LLP, long-time
auditors of the Trust, for the current fiscal year and believes that the
continued employment of this firm is in the Trust's best interests.
WHY ARE THE FUNDS' "FUNDAMENTAL POLICIES" BEING CHANGED OR 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 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 Trust investment 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.
WHY ARE THE TRUSTEES RECOMMENDING AN AMENDMENT TO THE DECLARATION OF TRUST?
The Declaration organizing the Trust was prepared nearly nine years ago. Since
then, developments in the investment company industry and changes in the law
resulted in many improvements. The Board is recommending a change to the
Declaration of Trust that permits the Trust to benefit from these developments.
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.
DEFINITIVE
MUNICIPAL SECURITIES INCOME TRUST
FEDERATED CALIFORNIA MUNICIPAL INCOME FUND
FEDERATED MICHIGAN INTERMEDIATE MUNICIPAL TRUST
FEDERATED NEW YORK MUNICIPAL INCOME FUND
FEDERATED OHIO MUNICIPAL INCOME FUND
FEDERATED PENNSYLVANIA MUNICIPAL INCOME FUND
NOTICE OF SPECIAL MEETING
IN LIEU OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 25, 1999
A Special Meeting in lieu of Annual Meeting of the shareholders
of Municipal Securities Income Trust (the "Trust"), which presently consists of
five portfolios or series, Federated California Municipal Income Fund (the
"California Fund"), Federated Michigan Intermediate Municipal Trust (the
"Michigan Fund"), Federated New York Municipal Income Fund (the "New York
Fund"), Federated Ohio Municipal Income Fund (the "Ohio Fund") and Federated
Pennsylvania Municipal Income Fund (the "Pennsylvania Fund") (individually, a
"Fund" and collectively, the "Funds") will be held at 5800 Corporate Drive,
Pittsburgh, Pennsylvania 15237-7000, at 2:00 p.m. (Eastern time), on June 25,
1999 to consider proposals:
(1) To elect six 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 policies
regarding borrowing money and issuing senior securities;
(b) To amend the Funds' fundamental investment policies
regarding investments in real estate;
(c) To amend the Funds' fundamental investment policies
regarding investments in commodities;
(d) To amend the Funds' fundamental investment policies
regarding underwriting securities;
(e) To amend the Funds' fundamental investment policies
regarding lending by the Funds;
(f) To amend the Funds' fundamental investment policies
regarding concentration of the Funds' investments in
the securities of companies in the same industry;
(g) To amend, and to make non-fundamental, the Funds'
fundamental investment policies regarding buying securities on margin;
(h) To amend, and to make non-fundamental, the Funds'
fundamental investment policies regarding pledging assets; and
(i) To amend, and to make non-fundamental, the Michigan
Fund's fundamental investment policy regarding
investing in illiquid securities (the Michigan 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 Funds' fundamental investment policies
regarding dealing in puts, calls, straddles, spreads and any combination
thereof; and
(c) To remove the Funds' fundamental investment policies
regarding investing in restricted securities (the
Michigan Fund, the Ohio Fund and the Pennsylvania
Fund ONLY).
(5) To approve an amendment and restatement to the Trust's Declaration of
Trust to permit the Board of Trustees to liquidate assets of the Trust without
seeking shareholder approval.
To transact such other business as may properly come
before the meeting or any adjournment thereof.
The Board of Trustees has fixed April 27, 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 10, 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>
TABLE OF CONTENTS
ABOUT THE PROXY SOLICITATION AND THE MEETING...................................4
ELECTION OF SIX TRUSTEES.......................................................5
ABOUT THE ELECTION OF TRUSTEES.................................................5
TRUSTEES STANDING FOR ELECTION.................................................6
NOMINEES NOT PRESENTLY SERVING AS TRUSTEES.....................................6
RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS..........................7
APPROVAL OF CHANGES TO THE FUNDS' FUNDAMENTAL INVESTMENT7
POLICIES...................................................................7
APPROVAL OF THE ELIMINATION OF CERTAIN FUNDAMENTAL INVESTMENT POLICIES OF
THE FUNDS 14
APPROVAL OF AN AMENDMENT AND RESTATEMENT TO THE TRUST'S
DECLARATION OF TRUST......................................................16
INFORMATION ABOUT THE TRUST...................................................17
PROXIES, QUORUM AND VOTING AT THE MEETING.....................................17
SHARE OWNERSHIP OF THE TRUSTEES...............................................18
TRUSTEE COMPENSATION..........................................................18
OFFICERS OF THE TRUST.........................................................20
OTHER MATTERS AND DISCRETION OF ATTORNEYS NAMED IN THE PROXY..................22
DEFINITIVE
PROXY STATEMENT
MUNICIPAL SECURITIES INCOME TRUST
FEDERATED CALIFORNIA MUNICIPAL INCOME FUND
FEDERATED MICHIGAN INTERMEDIATE MUNICIPAL TRUST
FEDERATED NEW YORK MUNICIPAL INCOME FUND
FEDERATED OHIO MUNICIPAL INCOME FUND
FEDERATED PENNSYLVANIA MUNICIPAL INCOME 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 five
portfolios or series, Federated California Municipal Income Fund (the
"California Fund"), Federated Michigan Intermediate Municipal Trust (the
"Michigan Fund"), Federated New York Municipal Income Fund (the "New York
Fund"), Federated Ohio Municipal Income Fund (the "Ohio Fund") and Federated
Pennsylvania Municipal Income Fund (the "Pennsylvania 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 25, 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 reviewed the proposed changes recommended in both the
investment policies of the Funds and the Amended and Restated Declaration of
Trust, and 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 10, 1999, to shareholders of record at the
close of business on April 27, 1999 (the "Record Date").
On the Record Date, the Funds had outstanding shares of beneficial
interest as follows:
California Fund: 5,363,339.088 shares
Michigan Fund: 7,295,383.979 shares
New York Fund: 2,369,398.002 shares
Ohio Fund: 7,005,269,807 shares
Pennsylvania Fund: 23,338,861.334 shares
The Funds' annual prospectuses, which include audited financial
statements for the fiscal year ended August 31, 1998, were previously mailed to
shareholders. The Funds' semi-annual reports, which contain unaudited financial
statements for the period ended February 28, 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 SIX TRUSTEES
The persons named as proxies intend to vote in favor of the election of
Thomas G. Bigley, Nicholas P. Constantakis, John F. Cunningham, Charles F.
Mansfield, Jr., John E. Murray, Jr. and John S. Walsh (collectively, the
"Nominees") as Trustees of the Trust. Messrs. Bigley, Constantakis, Mansfield
and Murray are presently serving as Trustees. If elected by shareholders,
Messrs. Cunningham and Walsh are expected to assume their responsibilities as
Trustees effective July 1, 1999. Please see "ABOUT THE ELECTION OF TRUSTEES"
below for current information about the Nominees.
Messrs. Bigley and Murray were appointed Trustees on November 15, 1994
and February 14, 1995, respectively, to fill vacancies created by the decision
to expand the size of the Board. Messrs. Constantakis and Mansfield were
appointed Trustees on February 23, 1998 and January 1, 1999, respectively, also
to fill vacancies resulting from the decision to expand the size of the Board.
Messrs. Cunningham and Walsh are being proposed for election as Trustees to fill
vacancies anticipated to result from the resignations of two current Trustees.
The anticipated resignations will not occur if Messrs. Cunningham and Walsh are
not elected as Trustees.
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 six 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: (i) Trustees standing for election, and
(ii) Nominees standing for election who are not presently serving as Trustees,
along with their addresses, birthdates, present positions with the Trust, if
applicable, and principal occupations during the past five years:
TRUSTEES STANDING FOR ELECTION
THOMAS G. BIGLEY
15 Old Timber Trail
Pittsburgh, PA
Birthdate: February 3, 1934
Trustee
Director or Trustee of the Federated Fund Complex; Director and Member of
Executive Committee, Children's Hospital of Pittsburgh; formerly, Senior
Partner, Ernst & Young LLP; Director, MED 3000 Group, Inc.; Director and Member
of Executive Committee, University of Pittsburgh.
NICHOLAS P. CONSTANTAKIS
175 Woodshire Drive
Pittsburgh, PA
Birthdate: September 3, 1939
Trustee
Director or Trustee of the Federated Fund Complex; formerly, Partner, Andersen
Worldwide SC.
CHARLES F. MANSFIELD, JR.
80 South Road
Westhampton, NY
Birthdate: April 10, 1945
Trustee
Director or Trustee of some of the Funds in the Federated Fund Complex;
management consultant.
JOHN E. MURRAY, JR., J.D., S.J.D.
President, Duquesne University
Pittsburgh, PA
Birthdate: December 20, 1932
Trustee
Director or Trustee of the Federated Fund Complex; President, Law Professor,
Duquesne University; Consulting Partner, Mollica & Murray.
NOMINEES NOT PRESENTLY SERVING AS TRUSTEES
JOHN F. CUNNINGHAM
353 El Brillo Way
Palm Beach, FL
Birthdate: March 5, 1943
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.
JOHN S. WALSH
2007 Sherwood Drive
Valparaiso, IN
Birthdate: November 28, 1957
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 Deloitte & Touche
LLP (the "Auditors") for the current fiscal year at a Board meeting held on
November 17, 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(I) AND #4(A) TO #4(C).
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 1990, 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>
FUNDAMENTAL POLICIES NON-FUNDAMENTAL POLICIES
------------------------------- --------------------------------
<S> <C> <C>
Who must approve changes in Board of Trustees and Board of Trustees
the policies? shareholders
How quickly can a change in Fairly slowly, since a vote Fairly quickly, because the
the policies be made? of shareholders is required change can be accomplished by
action of the Board of Trustees
What is the relative cost Costly to change because a Less costly to change because
to change a policy? shareholder vote requires a change can be accomplished
holding a meeting of by action of the Board of
shareholders Trustees
</TABLE>
The recommended changes are specified below. Each Proposal will be voted
on separately by shareholders of 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 A MATERIAL CHANGE
IN THE LEVEL 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 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:
CALIFORNIA FUND AND NEW YORK FUND:
"The Fund will not issue senior securities except that the Fund may
borrow money and engage in reverse repurchase agreements in amounts up
to one-third of the value of its total assets, including the amounts
borrowed. The Fund will not borrow money or engage in reverse repurchase
agreements for investment leverage, but rather as a temporary,
extraordinary, or emergency measure to facilitate management of the
portfolio by enabling the Fund to, for example, meet redemption requests
when the liquidation of portfolio securities is deemed to be
inconvenient or disadvantageous. The Fund will not purchase any
securities while borrowings in excess of 5% of its total assets are
outstanding."
MICHIGAN FUND, OHIO FUND AND PENNSYLVANIA FUND:
"The Fund will not issue senior securities except that the Fund may
borrow money and engage in reverse repurchase agreements in amounts up
to one-third of the value of its total assets, including the amounts
borrowed. The Fund will not borrow money or engage in reverse repurchase
agreements for investment leverage, but rather as a temporary,
extraordinary, or emergency measure to facilitate management of the
portfolio by enabling the Fund to meet redemption requests when the
liquidation of portfolio securities is deemed to be inconvenient or
disadvantageous. The Fund will not purchase any securities while
borrowings in excess of 5% of its total assets are outstanding. During
the period any reverse repurchase agreements are outstanding, but only
to the extent necessary to assure completion of the reverse repurchase
agreements, the Fund will restrict the purchase of portfolio instruments
to money market instruments maturing on or before the expiration date of
the reverse repurchase agreements."
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.
U.S. Securities and Exchange Commission (the "SEC" or the "Commission")
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 borrowing restrictions of the Funds permit borrowing only as a
temporary measure for extraordinary purposes, and, in the case of the policies
of the Michigan Fund, the Ohio Fund and the Pennsylvania Fund, restrict the
types of securities that may be purchased 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), 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(B): TO AMEND THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES
REGARDING INVESTMENTS 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 to invest in securities that are secured by real
estate, and state:
CALIFORNIA FUND AND NEW YORK FUND:
"The Fund will not purchase or sell real estate including limited
partnership interests although it may invest in municipal bonds secured
by real estate or interests in real estate."
MICHIGAN FUND, OHIO FUND AND PENNSYLVANIA FUND:
"The Fund will not buy or sell real estate, although it may invest in
municipal bonds secured by real estate or interests in real estate."
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(C): 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 are currently subject to a
fundamental restriction prohibiting the purchase or sale of commodities,
commodity contracts or commodity futures 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. Financial futures contracts enable an investment
company to buy (or sell) the right to receive the cash difference between the
contract price for an underlying asset or index and the future market price, if
the market price is higher. If the future price is lower, the investment company
is obligated to pay (or, if the investment company sold the contract, the
investment company receives) the amount of the decrease. Investment companies
often desire to invest in financial futures contracts and options related to
such contracts for hedging or other investment reasons.
The proposed policy would provide appropriate flexibility for the Funds
to invest in financial futures contracts and related options. As proposed, the
policy is broad enough to permit investment in financial futures instruments for
either investment or hedging purposes, which is broader than the Funds' current
policies. Using financial futures instruments can involve substantial risks, and
would be utilized only if the Funds' investment adviser determined that such
investments are advisable and such practices were affirmatively authorized by
the Board and disclosed in the Funds' prospectuses or statements of additional
information. As a matter of non-fundamental operating policy, for purposes of
the proposed policy, investments in transactions involving futures contracts and
options, forward currency contracts, swap transactions and other financial
contracts that settle by payment of cash are not deemed to be investments in
commodities.
Upon shareholder approval, the fundamental investment policy for each
Fund governing investments in commodities 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(D): 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. Each Fund currently is subject to a fundamental
investment policy prohibiting it from acting as an underwriter of the securities
of other issuers, and states:
"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 now 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(E): TO AMEND THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES
REGARDING LENDING BY THE FUNDS
Under the 1940 Act, the Funds' policies concerning lending must be
fundamental. The Funds currently are subject to a fundamental investment
restriction limiting their ability to make loans which states:
"The Fund will not lend any of its assets except that it may acquire
publicly or non-publicly issued municipal bonds or temporary investments
or enter into repurchase agreements in accordance with its investment
objective, policies, and limitations or its Declaration of Trust."
In order to ensure that each Fund 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.
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(F): 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 currently have a fundamental investment policy prohibiting
them from concentrating their investments in a single industry:
"The Fund will not purchase securities if, as a result of such purchase,
25% or more of the value of its total assets would be invested in any
one industry or in industrial development bonds or other securities, the
interest upon which is paid from revenues of similar types of projects.
However, the Fund may invest as temporary investments more than 25% of
the value of its assets in cash or cash items (for purposes of this
limitation, the Fund considers instruments issued by a U.S. branch of a
domestic bank or savings and loan having capital, surplus, and undivided
profits in excess of $100,000,000 at the time of investment to be "cash
items"), securities issued or guaranteed by the U.S. government, its
agencies or instrumentalities, or instruments secured by these money
market instruments, i.e., repurchase agreements." Upon the approval by
the Funds' shareholders, the fundamental investment policy governing
concentration for each 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, 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.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #3(G): 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:
"The Fund will not purchase any securities on margin but may obtain such
short-term credits as may be necessary for clearance of purchases and sales of
securities."
The proposed non-fundamental policy makes minor changes in wording from
the existing fundamental restrictions and expands the list of margin
transactions excepted from the prohibition to include margin deposits in
connection with financial options and futures, forward and spot currency
contracts, swap transactions and other financial contracts or derivative
instruments. Upon the approval of the elimination of the existing fundamental
policy 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, and further provided that the Fund may make
margin deposits in connection with its use of financial options and
futures, forward and spot currency contracts, swap transactions and
other financial contracts or derivative instruments."
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 that the Funds' 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:
"The Fund will not mortgage, pledge, or hypothecate its assets except to
secure permitted borrowings. In those cases, it may mortgage, pledge, or
hypothecate assets having a market value not exceeding 10% of the value
of its total assets 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% limitation on the
amount of the Funds' assets that can be pledged, the Funds do not presently
intend to exceed this limitation in the future.
Upon the approval of the elimination of the existing fundamental policy
on pledging assets, each Fund 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 MICHIGAN FUND'S
FUNDAMENTAL INVESTMENT POLICY REGARDING INVESTING IN ILLIQUID SECURITIES
THIS PROPOSAL PERTAINS TO THE MICHIGAN FUND ONLY.
The Michigan Fund is presently subject to a fundamental investment
policy regarding investing in illiquid securities that states:
"The Fund will not invest more than 15% of its net assets in illiquid
obligations, including repurchase agreements providing for settlement in
more than seven days after notice, and certain restricted securities."
There is no legal requirement that the Michigan Fund have a fundamental
policy on this subject. Accordingly, the Board believes that it should be made
non-fundamental for the Fund. The SEC takes the position that an investment
company, other than a money market fund, should not invest more than 15% of its
net assets in illiquid securities. The proposed non-fundamental restriction
would comply with the SEC position. Establishing the policy as non-fundamental
would enable the Michigan Fund to change this restriction in the future without
shareholder approval. However, the Michigan Fund has no present intention to
materially modify this policy.
Upon the approval of the elimination of the existing fundamental policy
on investing in illiquid securities, the Michigan Fund would become subject to
the following non-fundamental restriction:
"The Fund will not purchase securities for which there is no readily
available market, or enter into repurchase agreements or purchase time
deposits maturing in more than seven days, if immediately after and as a
result, the value of such securities would exceed, in the aggregate, 15%
of the Fund's net assets."
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 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).
PROPOSAL #4(A): TO REMOVE THE FUNDS' FUNDAMENTAL INVESTMENT
POLICIES ON 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 these
fundamental restrictions, 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.
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 FUNDS' FUNDAMENTAL INVESTMENT
POLICIES ON PURCHASING PUTS, CALLS, STRADDLES, SPREADS OR
ANY COMBINATION THEREOF
The Funds are not required to have a fundamental restriction on
purchasing puts, calls, straddles, spreads or any combination thereof.
Eliminating this policy would maximize the Funds' flexibility in this area.
Accordingly, it is proposed that the Funds' existing fundamental policies be
eliminated.
Upon the approval of Proposal #4(b), the existing fundamental policies
on purchasing puts, calls, straddles, spreads or any combination thereof for the
Funds will be eliminated.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #4(C): TO REMOVE THE FUNDS' FUNDAMENTAL INVESTMENT
POLICIES ON INVESTING IN RESTRICTED SECURITIES
THIS PROPOSAL PERTAINS TO THE MICHIGAN FUND, THE OHIO FUND AND THE PENNSYLVANIA
FUND ONLY.
There is no legal requirement that the Funds have their present
fundamental policies on investing in restricted securities. The policies
pertaining to restricted securities for each of the Michigan Fund, the Ohio Fund
and the Pennsylvania Fund state:
"The Fund will not invest more than 10% of the value of its net assets
in securities subject to restrictions on resale under the Securities Act of
1933."
These policies were adopted by the Funds because historically restricted
securities were viewed as illiquid since they could not be sold within seven
days. Investment companies issuing redeemable securities 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 each Fund's portfolio 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 a Fund's portfolio.
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 the jurisdiction to impose such
requirements. 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 Funds' investment adviser, provided the investment adviser's determination
of liquidity is made in accordance with the guidelines established and monitored
by the Trustees.
Each Fund's current restricted securities policy prevents the Fund from
acquiring a restricted security that may be viewed by the Fund's investment
adviser as liquid. As a result, the Funds' management has suggested that the
policy be eliminated. 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 liquidity.
Upon the approval of Proposal #4(c), the existing fundamental policy on
purchasing restricted securities for the Michigan Fund, the Ohio Fund and the
Pennsylvania Fund will be eliminated.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #5: TO AMEND AND RESTATE THE TRUST'S DECLARATION OF TRUST TO
PERMIT THE BOARD OF TRUSTEES TO LIQUIDATE ASSETS OF THE TRUST WITHOUT SEEKING
SHAREHOLDER APPROVAL
Mutual funds, such as the Trust, are required to organize under the laws
of a state and to create and be bound by organizational documents outlining how
they will operate. In the case of the Trust, these organizational documents are
the Declaration of Trust and the By-Laws. Since the adoption of the Trust's
current Declaration of Trust, the market for mutual funds has evolved, requiring
mutual funds to be more flexible in their operation to respond quickly to
changes in the market. One item in the current Declaration of Trust, described
below, prohibits the Trust from responding quickly and favorably to changing
markets without going to the expense and delay of holding a shareholder meeting.
Shareholders are being asked to approve an amendment to the Trust's
Declaration of Trust to permit the Trustees to sell and convert into money
(i.e., liquidate) all the assets of the Trust, or any series or class of the
Trust, and then redeem all outstanding shares of any series or class of the
Trust. Currently, a majority vote of shareholders is required to liquidate the
Trust, or an affected series or class of which shares are outstanding. The
Trustees have determined that the current restriction presents a cumbersome
structure under which the best interest of all of the Trust's shareholders may
not be served. By requiring the Trustees to solicit a shareholder vote, by
means of a proxy solicitation and special meeting of shareholders, the
Declaration of Trust greatly hinders the Trustees' ability to effectively act
on decisions about the continued viability of the Trust. If it is determined
that it is no longer advisable to continue the Trust, or a series or class of
the Trust, it may not be in the best interest of shareholders to incur the
substantial additional expense of a shareholder meeting when it is more
important to preserve those assets that remain. If this proposal is approved by
shareholders, the Trustees will be authorized to liquidate a series or class of
the Trust by Board action without a further shareholder vote. The Trustees have
no present intention of liquidating the Trust or any of the Funds.
If approved by shareholders, Article XII, Section 4(c) of the
Declaration of Trust will be amended to read as follows:
"The Trustees may at any time sell and convert into money all the assets
of the Trust or any Series or Class without shareholder approval, unless
otherwise required by applicable law. Upon making provision for the
payment of all outstanding obligations, taxes and other liabilities,
accrued or contingent, belonging to each Series or Class, the Trustees
shall distribute the remaining assets belonging to each Series or Class
ratably among the holders of the outstanding Shares of that Series or
Class."
The Trustees believe that the interest of the shareholders is adequately
protected by this provision, as the liquidation would require the conversion of
the assets of the Trust to cash, which will thereafter be distributed to
shareholders pro rata. It is believed that this will result in the return to
shareholders of substantially the same value as would be provided to the
shareholders by a redemption resulting in the payment to the shareholders of the
then current net asset value of the shares owned by the shareholders.
Accordingly, the Trustees have approved, and have authorized the submission to
the Trust's shareholders for their approval, an amendment to the Trust's
Declaration of Trust. The approval of the amendment will require the affirmative
vote of a majority of the total number of outstanding shares of each Fund
entitled to vote as described in the Declaration of Trust. (See "PROXIES, QUORUM
AND VOTING AT THE MEETING" below.)
In the event that the amendment to the Declaration of Trust to allow
the Trustees to liquidate assets is not approved by the shareholders, the
Declaration of Trust will remain as it currently exists and the Trustees will
consider what action, if any, should be taken.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
INFORMATION ABOUT THE TRUST
PROXIES, QUORUM AND VOTING AT THE MEETING
Only shareholders of record on the Record Date will be entitled to vote
at the Meeting. Each share of the Trust is entitled to one vote. Fractional
shares are entitled to proportionate shares of one vote. Under both the
Investment Company Act of 1940 and the Declaration of Trust, the favorable vote
of a "majority of the outstanding voting shares" of the Trust or a Fund means:
(a) the holders of 67% or more of the outstanding voting securities present at
the Meeting, if the holders of 50% or more of the outstanding voting securities
of the Trust or the Fund are present or represented by proxy; or (b) the vote of
the holders of more than 50% of the outstanding voting securities, whichever is
less. 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, the ratification of the selection of the Auditors, and the amendment
of the Declaration of Trust.
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, and the holders of more than 50% of the shares of each
Fund entitled to vote, in each case 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 each Fund's outstanding
shares.
At the close of business on the Record Date, the following person owned, to the
knowledge of management, more than 5% of the outstanding shares of the Class A
Shares of the California Fund: Merrill Lynch, Pierce, Fenner & Smith,
Jacksonville, FL, for the benefit of various underlying customer accounts, owned
approximately 931,375.933 shares (36.18%). At the close of business on the
Record Date, no person owned, to the knowledge of management, more than 5% of
the outstanding shares of the Class B Shares of the California Fund.
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 Class A
Shares of the Michigan Fund: Enbanco, Traverse City, MI, for the benefit of
various underlying customer accounts, owned approximately 2,461,281.11 shares
(33.73%); First Mar & Co., Marquette, MI, for the benefit of various underlying
customer accounts, owned approximately 1,436,227.559 shares (19.67%); Shoreline
& Co., South Haven, MI, for the benefit of various underlying customer accounts,
owned approximately 550,964.445 shares (7.55%) and Charles Schwab & Co., Inc.,
San Francisco, CA, owned approximately 535,532.757 shares (7.34.
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 Class A
Shares of the New York Fund: Merrill Lynch, Pierce, Fenner & Smith,
Jacksonville, FL, for the benefit of various underlying customer accounts, owned
approximately 760,039.66 shares (32.08%); and North Fork Bank, Mattituck, NY,
for the benefit of various customer accounts, owned approximately 231,755.632
shares (9.78%).
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 Class F
Shares of the Ohio Fund: Merrill Lynch, Pierce, Fenner & Smith, Jacksonville,
FL, for the benefit of various underlying customer accounts, owned approximately
1,997,727.211 shares (28.52%); and Milards & Co., Oaks, PA, owned approximately
659,884.103 shares (9.42%).
At the close of business on the Record Date, the following person owned, to the
knowledge of management, more than 5% of the outstanding shares of the Class A
Shares of the Pennsylvania Fund: Merrill Lynch, Pierce, Fenner & Smith,
Jacksonville, FL, for the benefit of various underlying customer accounts, owned
approximately 1,361,955.018 shares (6.92%). At the close of business on the
Record Date, the following person owned, to the knowledge of management, more
than 5% of the outstanding shares of the Class B Shares of the Pennsylvania
Fund: Merrill Lynch, Pierce, Fenner & Smith, Jacksonville, FL, for the benefit
of various underlying customer accounts, owned approximately 194,573.517 shares
(5.32%).
<TABLE>
<CAPTION>
TRUSTEE COMPENSATION
NAME, AGGREGATE TOTAL COMPENSATION PAID
POSITION WITH COMPENSATION FROM FUND COMPLEX+
TRUST FROM
TRUST1#
<S> <C> <C>
- ---------------------------- -------------------- ------------------------------------------------
John F. Donahue*@ $0 $0 for the Trust and
Chairman and Trustee 56 other investment companies in the Fund
Complex
Thomas G. Bigley $1308.98 $113,860.22 for the Trust and
Trustee 56 other investment companies in the Fund
Complex
John T. Conroy, Jr. $1440.09 $125,264.48 for the Trust and
Trustee 56 other investment companies in the Fund
Complex
Nicholas P. Constantakis++ $986.59 $0 for the Trust and
Trustee 36 other investment companies in the Fund
Complex
William J. Copeland $1440.09 $125,264.48 for the Trust and
Trustee 56 other investment companies in the Fund
Complex
J. Christopher Donahue* $0 $0 for the Trust and
Executive Vice President 56 other investment companies in the Fund
and Trustee Complex
James E. Dowd $1440.09 $125,264.48 for the Trust and
Trustee 56 other investment companies in the Fund
Complex
Lawrence D. Ellis, M.D.* $1308.98 $113,860.22 for the Trust and
Trustees 56 other investment companies in the Fund
Complex
Edward L. Flaherty, Jr.@ $1440.09 $125,264.48 for the Trust and
Trustee 56 other investment companies in the Fund
Complex
Peter E. Madden $1308.98 $113,860.22 for the Trust and
Trustee 56 other investment companies in the Fund
Complex
Charles F. Mansfield** $0 $0 for the Trust and
Trustee 26 other investment companies in the Fund
Complex
John E. Murray, Jr. $1308.98 $113,860.22 for the Trust and
Trustee 56 other investment companies in the Fund
Complex
Wesley W. Posvar $1308.98 $113,860.22 for the Trust and
Trustee 56 other investment companies in the Fund
Complex
Marjorie P. Smuts $1308.98 $113,860.22 for the Trust and
Trustee 56 other investment companies in the Fund
Complex
</TABLE>
1 Information is furnished for the fiscal year ended August 31, 1998.
# The aggregate compensation is provided for the Trust which is comprised of
five portfolios.
+ The information is provided for the last calendar year.
++ Mr. Constantakis became a member of the Board of Trustees on
February 23, 1998.
* The Trustee is deemed to be an "interested person" as defined in the 1940 Act.
@ Member of the Executive Committee.
** Mr. Mansfield became a member of the Board of Trustees on January 1,
1999. Mr. Mansfield did not receive any fees from the Fund Complex as of the
last calendar year.
During the fiscal year ended August 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 August 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
Executive Vice 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.
Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 17, 1923
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.
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.
William D. Dawson, III
Federated Investors Tower
Pittsburgh, PA
Birthdate: March 3, 1949
Chief Investment Officer
Chief Investment Officer of the Trust and various other Funds in the Federated
Fund Complex; Executive Vice President, Federated Investment Counseling,
Federated Global Research Corp., Federated Investment Management Company,
Federated Management, Federated Research, and Passport Research, Ltd.;
Registered Representative, Federated Securities Corp.; Portfolio Manager,
Federated Administrative Services; Vice President, Federated Investors, Inc.
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.
Mary Jo Ochson
Federated Investors Tower
Pittsburgh, PA
Birthdate: September 12, 1953
Vice President
Senior Vice President, Federated Investment Management Company.
J. Scott Albrecht
Federated Investors Tower
Pittsburgh, PA
Birthdate: June 1, 1960
Vice President
Vice President, Federated Investment Management Company.
None of the Officers of the Trust received salaries from the Trust
during the fiscal year ended August 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 Municipal Securities Income
Trust, Federated Investors Funds, 5800 Corporate Drive, Pittsburgh, Pennsylvania
15237-7000, so that they are received within a reasonable time before any such
meeting.
<PAGE>
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 10, 1999
<PAGE>
MUNICIPAL SECURITIES INCOME TRUST
FEDERATED CALIFORNIA MUNICIPAL INCOME FUND
FEDERATED MICHIGAN INTERMEDIATE MUNICIPAL TRUST
FEDERATED NEW YORK MUNICIPAL INCOME FUND
FEDERATED OHIO MUNICIPAL INCOME FUND
FEDERATED PENNSYLVANIA MUNICIPAL INCOME FUND
INVESTMENT ADVISER
FEDERATED INVESTMENT MANAGEMENT COMPANY
Federated Investors Tower
Pittsburgh, Pennsylvania 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
(_____/99)
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of
Federated California Municipal Income Fund (the "Fund"), a portfolio of
Municipal Securities Income 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 25, 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 MUNICIPAL
SECURITIES INCOME 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 THOMAS G. BIGLEY, NICHOLAS P. CONSTANTAKIS,
JOHN F. CUNNINGHAM, CHARLES F. MANSFIELD, JR., JOHN E. MURRAY, 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 DELOITTE & TOUCHE 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
INVESTMENTS IN REAL ESTATE
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (C) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
INVESTMENTS 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 BY THE FUND
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 BUYING SECURITIES ON MARGIN
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (H) TO AMEND, AND TO MAKE NON-FUNDAMENTAL, THE FUND'S FUNDAMENTAL
INVESTMENT POLICY REGARDING PLEDGING ASSETS
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
DEALING IN PUTS, CALLS, STRADDLES, SPREADS AND ANY COMBINATION
THEREOF
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 5 TO APPROVE AN AMENDMENT AND RESTATEMENT TO THE TRUST'S
DECLARATION OF TRUST TO PERMIT THE BOARD OF TRUSTEES TO LIQUIDATE
ASSETS OF THE TRUST WITHOUT SEEKING SHAREHOLDER APPROVAL
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
Federated Michigan Intermediate Municipal Trust (the "Fund"), a portfolio of
Municipal Securities Income 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 25, 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 MUNICIPAL
SECURITIES INCOME 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 THOMAS G. BIGLEY, NICHOLAS P. CONSTANTAKIS,
JOHN F. CUNNINGHAM, CHARLES F. MANSFIELD, JR., JOHN E. MURRAY, 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 DELOITTE & TOUCHE 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
INVESTMENTS IN REAL ESTATE
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (C) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
INVESTMENTS 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 BY THE FUND
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 BUYING SECURITIES ON MARGIN
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 INVESTING IN ILLIQUID SECURITIES
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
DEALING IN PUTS, CALLS, STRADDLES, SPREADS AND ANY COMBINATION
THEREOF
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
4 (C ) TO REMOVE THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
INVESTING IN RESTRICTED SECURITIES
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 5 TO APPROVE AN AMENDMENT AND RESTATEMENT TO THE TRUST'S
DECLARATION OF TRUST TO PERMIT THE BOARD OF TRUSTEES TO
LIQUIDATE ASSETS OF THE TRUST WITHOUT SEEKING SHAREHOLDER
APPROVAL
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
Federated New York Municipal Income Fund (the "Fund"), a portfolio of Municipal
Securities Income 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 25, 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 MUNICIPAL
SECURITIES INCOME 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 THOMAS G. BIGLEY, NICHOLAS P. CONSTANTAKIS,
JOHN F. CUNNINGHAM, CHARLES F. MANSFIELD, JR.,
JOHN E. MURRAY, 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 DELOITTE & TOUCHE 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
INVESTMENTS IN REAL ESTATE
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (C) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
INVESTMENTS 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 BY THE FUND
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 BUYING SECURITIES ON MARGIN
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (H) TO AMEND, AND TO MAKE NON-FUNDAMENTAL, THE FUND'S FUNDAMENTAL
INVESTMENT POLICY REGARDING PLEDGING ASSETS
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
DEALING IN PUTS, CALLS, STRADDLES, SPREADS AND ANY COMBINATION
THEREOF
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 5 TO APPROVE AN AMENDMENT AND RESTATEMENT TO THE TRUST'S
DECLARATION OF TRUST TO PERMIT THE BOARD OF TRUSTEES TO
LIQUIDATE ASSETS OF THE TRUST WITHOUT SEEKING
SHAREHOLDER APPROVAL
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
Federated Ohio Municipal Income Fund (the "Fund"), a portfolio of Municipal
Securities Income 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 25, 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 MUNICIPAL
SECURITIES INCOME 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 THOMAS G. BIGLEY, NICHOLAS P. CONSTANTAKIS,
JOHN F. CUNNINGHAM, CHARLES F. MANSFIELD, JR.,
JOHN E. MURRAY, 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 DELOITTE & TOUCHE 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
INVESTMENTS IN REAL ESTATE
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (C) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
INVESTMENTS 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 BY THE FUND
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 BUYING SECURITIES ON MARGIN
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (H) TO AMEND, AND TO MAKE NON-FUNDAMENTAL, THE FUND'S FUNDAMENTAL
INVESTMENT POLICY REGARDING PLEDGING ASSETS
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
DEALING IN PUTS, CALLS, STRADDLES, SPREADS AND ANY COMBINATION
THEREOF
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
4 (C ) TO REMOVE THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
INVESTING IN RESTRICTED SECURITIES
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 5 TO APPROVE AN AMENDMENT AND RESTATEMENT TO THE TRUST'S
DECLARATION OF TRUST TO PERMIT THE BOARD OF TRUSTEES TO
LIQUIDATE ASSETS OF THE TRUST WITHOUT SEEKING SHAREHOLDER
APPROVAL
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
Federated Pennsylvania Municipal Income Fund (the "Fund"), a portfolio of
Municipal Securities Income 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 25, 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 MUNICIPAL
SECURITIES INCOME 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 THOMAS G. BIGLEY, NICHOLAS P. CONSTANTAKIS,
JOHN F. CUNNINGHAM, J. CHRISTOPHER DONAHUE,
CHARLES F. MANSFIELD, JR., JOHN E. MURRAY, 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 DELOITTE & TOUCHE 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
INVESTMENTS IN REAL ESTATE
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (C) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
INVESTMENTS 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 BY THE FUND
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 BUYING SECURITIES ON MARGIN
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (H) TO AMEND, AND TO MAKE NON-FUNDAMENTAL, THE FUND'S FUNDAMENTAL
INVESTMENT POLICY REGARDING PLEDGING ASSETS
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
DEALING IN PUTS, CALLS, STRADDLES, SPREADS AND ANY COMBINATION
THEREOF
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
4 (C ) TO REMOVE THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
INVESTING IN RESTRICTED SECURITIES
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 5 TO APPROVE AN AMENDMENT AND RESTATEMENT TO THE TRUST'S
DECLARATION OF TRUST TO PERMIT THE BOARD OF TRUSTEES TO
LIQUIDATE ASSETS OF THE TRUST WITHOUT SEEKING SHAREHOLDER
APPROVAL
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
