18
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [ X ] Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
Newpoint Funds
(Name of Registrant as Specified In Its Charter)
Federated Investors
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary proxy materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------
4) Date Filed:
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<PAGE>
4
PRELIMINARY
NEWPOINT FUNDS
Newpoint Equity Fund
Newpoint Government Money Market Fund
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 17, 1999
A special meeting of shareholders of the Newpoint Funds (the
"Trust"), which presently consists of two portfolios or series, Newpoint Equity
Fund (the "Equity Fund") and Newpoint Government Money Market Fund (the
"Government Fund") (individually referred to as a "Fund," and collectively
referred to as the "Funds"), will be held at 5800 Corporate Drive, Pittsburgh,
Pennsylvania 15237-7000, at 2:00 p.m. (Eastern time), on December 17, 1999 to
consider proposals:
(1) To elect seven Trustees.
(2) To make changes to the Funds' fundamental investment
policies:
(a) To amend the Equity Fund's fundamental
investment policy regarding diversification
(Equity Fund only);
(b) To amend the Funds' fundamental investment
policies regarding borrowing money and issuing
senior securities;
(c) To amend the Funds' fundamental investment
policies regarding investments in real estate;
(d) To amend the Funds' fundamental investment
policies regarding investments in commodities;
(e) To amend the Funds' fundamental investment
policies regarding underwriting securities;
(f) To amend the Funds' fundamental investment
policies regarding lending by the Funds;
(g) To amend the Funds' fundamental investment
policies regarding concentration of the Funds'
investments in the securities of companies in
the same industry;
(h) To amend, and to make non-fundamental, the
Funds' fundamental investment policies regarding
buying securities on margin;
(i) To amend, and to make non-fundamental, the
Funds' fundamental investment policies regarding
pledging assets; and
(j) To amend, and to make non-fundamental, the
Government Fund's fundamental investment policy
regarding investing in restricted securities
(Government Fund only).
(3) To eliminate the Funds' fundamental investment policies
on selling securities short.
(4) To amend the Equity Fund's fundamental investment
objective (Equity Fund only).
(5) To approve amendments to, and a restatement of, the
Trust's Declaration of Trust:
(a) To require the approval of a majority of the
outstanding voting securities of the Trust in
the event of the sale and conveyance of the
assets of the Trust to another trust or
corporation; and
(b) To permit the Board of Trustees to liquidate
assets of the Trust, or of its series or
classes, and distribute the proceeds of such
assets to the holders of such shares
representing such interests, 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 October 22, 1999 as the record date for
determination of shareholders entitled to vote at the meeting.
By Order of the Board of Trustees,
John W. McGonigle
Secretary
November 12, 1999
YOU CAN HELP THE TRUST AVOID THE NECESSITY AND EXPENSE OF SENDING FOLLOW-UP
LETTERS TO ENSURE A QUORUM BY PROMPTLY SIGNING AND RETURNING THE ENCLOSED PROXY.
IF YOU ARE UNABLE TO ATTEND THE MEETING, PLEASE MARK, SIGN, DATE AND RETURN THE
ENCLOSED PROXY SO THAT THE NECESSARY QUORUM MAY BE REPRESENTED AT THE SPECIAL
MEETING. THE ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES.
<PAGE>
TABLE OF CONTENTS
About the Proxy Solicitation and the Special Meeting.........................
Election of Seven Trustees...................................................
About the Election of Trustees...............................................
Trustees Standing for Election...............................................
Nominees Not Presently Serving as Trustees...................................
Approval of Changes to the Funds' Fundamental Investment
Policies................................................................
Approval of the Elimination of the Funds' Fundamental Investment
Policies on Selling Securities Short....................................
Approval of an Amendment to the Equity Fund's Fundamental
Investment Objective....................................................
Approval of Amendments to, and a Restatement of,
the Trust's Declaration of Trust........................................
Information About the Trust..................................................
Proxies, Quorum and Voting at the Special Meeting............................
Share Ownership of the Trustees..............................................
Trustee Compensation.........................................................
Officers and Incumbent Trustees of the Trust.................................
Other Matters and Discretion of Attorneys Named in the Proxy.................
<PAGE>
PRELIMINARY
PROXY STATEMENT
NEWPOINT FUNDS
Newpoint Equity Fund
Newpoint Government Money Market Fund
5800 Corporate Drive
Pittsburgh, PA 15237-7000
About the Proxy Solicitation and the Special Meeting
The enclosed proxy is solicited on behalf of the Board of Trustees of
the Trust (the "Board" or "Trustees"). The proxies will be voted at a special
meeting of shareholders of the Trust, which presently consists of two portfolios
or series, Newpoint Equity Fund (the "Equity Fund") and Newpoint Government
Money Market Fund (the "Government Fund"), to be held on December 17, 1999, at
5800 Corporate Drive, Pittsburgh, Pennsylvania 15237-7000, at 2:00 p.m. (such
special meeting and any adjournment or postponement thereof are referred to as
the "Special 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 the
investment policies of the Funds and the investment objective of the Equity
Fund, and the proposed amendments to the Trust's Declaration of Trust, and has
approved them, subject to shareholder approval. The purposes of the Special
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 Special Meeting. Should other business properly be brought
before the Special 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 November 12, 1999, to
shareholders of record at the close of business on October 22, 1999 (the "Record
Date"). On the Record Date, the Funds had outstanding the following number of
shares of beneficial interest:
Equity Fund __________ shares
Government Fund __________ shares
<PAGE>
The Funds' annual reports, which include audited financial statements
for each Fund for the fiscal year ended November 30, 1998, were previously
mailed to shareholders. The Funds' semi-annual reports, which contain unaudited
financial statements for the period ended May 31, 1999, were also previously
mailed to shareholders. The Trust will promptly provide, without charge and upon
request, to each person to whom this Proxy Statement is delivered, a copy of a
Fund's annual report and/or semi-annual report. Requests for an annual report or
semi-annual report for each Fund may be made by writing to the Trust's principal
executive offices or by calling the Trust. The Trust's principal executive
offices are located at 5800 Corporate Drive, Pittsburgh, Pennsylvania
15237-7000. The Trust's toll-free telephone number is 1-800-341-7400.
PROPOSAL #1: ELECTION OF SEVEN TRUSTEES
The persons named as proxies intend to vote in favor of the election of
Thomas G. Bigley, Nicholas P. Constantakis, John F. Cunningham, J. Christopher
Donahue, Charles F. Mansfield, Jr., John E. Murray, Jr. and John S. Walsh
(collectively, the "Nominees") as Trustees of the Trust. Messrs. Bigley,
Cunningham, Mansfield, Murray and Walsh are presently serving as Trustees. If
elected by shareholders, it is anticipated that Messrs. Constantakis and Donahue
will assume their responsibilities as Trustees on January 1, 2000. Please see
"About the Election of Trustees" below for current information about the
Nominees, and "Officers and Incumbent Trustees of the Trust" in this Proxy
Statement for information about the Trustees who have previously been elected by
shareholders. Except as otherwise provided in this Proxy Statement, it is
anticipated that each of the incumbent Trustees will continue to serve as a
Trustee after the Special Meeting.
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. Cunningham, Mansfield and Walsh were
appointed Trustees on January 1, 1999, also to fill vacancies resulting from the
decision to expand the size of the Board. Messrs. Constantakis and Donahue are
being proposed for election as Trustees due to the decision to expand the size
of the Board.
All Nominees have consented to serve if elected. If elected, the
Trustees will hold office without limit in time until death, resignation,
retirement, or removal or until the next meeting of shareholders to elect
Trustees and the election and qualification of their successors. Election of a
Trustee is by a plurality of the votes cast by shareholders of the Trust at the
Special Meeting. The seven individuals receiving the greatest number of votes at
the Special Meeting will be deemed to be elected Trustees.
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 Special
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 Special Meeting. Any such substitute candidate for election as
a Trustee who is an "interested person" (as such term is 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
Massachusetts law does not require the election of the Trust's Trustees
each year, and shareholders should anticipate that, prior to election of
successor Trustees, incumbent 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, birth dates, 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
Birth date: February 3, 1934
Trustee
Director or Trustee of the Federated Fund Complex; Director, Member of Executive
Committee, Children's Hospital of Pittsburgh; Director, Robroy Industries, Inc.
(coated steel conduits/computer storage equipment); formerly: Senior Partner,
Ernst & Young LLP; Director, MED 3000 Group, Inc. (physician practice
management); Director, Member of Executive Committee, University of Pittsburgh.
John F. Cunningham
353 El Brillo Way
Palm Beach, FL
Birth date: March 5, 1943
Trustee
Director or Trustee of some of the Funds in the Federated Fund Complex;
Chairman, President and Chief Executive Officer, Cunningham & Co., Inc.
(strategic business consulting); Trustee Associate, Boston College; Director,
Iperia Corp. (communications/software); formerly, Director, Redgate
Communications and EMC Corporation (computer storage systems). Previous
Positions: Chairman of the Board and Chief Executive Officer, Computer Consoles,
Inc.; President and Chief Operating Officer, Wang Laboratories; Director, First
National Bank of Boston; Director, Apollo Computer, Inc.
Charles F. Mansfield, Jr.
80 South Road
Westhampton Beach, NY
Birth date: April 10, 1945
Trustee
Director or Trustee of some of the Funds in the Federated Fund Complex;
Management Consultant. Previous Positions: Chief Executive Officer, PBTC
International Bank; Partner, Arthur Young & Company (now Ernst & Young LLP);
Chief Financial Officer of Retail Banking Sector, Chase Manhattan Bank; Senior
Vice President, Marine Midland Bank; Vice President, Citibank; Assistant
Professor of Banking and Finance, Frank G. Zarb School of Business, Hofstra
University.
<PAGE>
John E. Murray, Jr., J.D., S.J.D.
President, Duquesne University
Pittsburgh, PA
Birth date: December 20, 1932
Trustee
Director or Trustee of the Federated Fund Complex; President, Law Professor,
Duquesne University; Consulting Partner, Mollica & Murray; Director, Michael
Baker Corp. (engineering, construction, operations, and technical services).
Previous Positions: Dean and Professor of Law, University of Pittsburgh School
of Law; Dean and Professor of Law, Villanova University School of Law.
John S. Walsh
2007 Sherwood Drive
Valparaiso, IN
Birth date: November 28, 1957
Trustee
Director or Trustee of some of the Funds in the Federated Fund Complex;
President and Director, Heat Wagon, Inc. (manufacturer of construction temporary
heaters); President and Director, Manufacturers Products, Inc. (distributor of
portable construction heaters); President, Portable Heater Parts, a division of
Manufacturers Products, Inc.; Director, Walsh & Kelly, Inc. (heavy highway
contractor); formerly, Vice President, Walsh & Kelly, Inc.
Nominees Not Presently Serving as Trustees
Nicholas P. Constantakis
175 Woodshire Drive
Pittsburgh, PA
Birth date: September 3, 1939
Director or Trustee of the Federated Fund Complex; formerly, Partner, Andersen
Worldwide SC.
J. Christopher Donahue
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Birth date: April 11, 1949
Executive Vice President
President or Executive Vice President of the Federated Fund Complex; Director or
Trustee of some of the Funds in the Federated Fund Complex; President, Chief
Executive Officer and Director, Federated Investors, Inc.; President and
Trustee, Federated Investment Management Company; President and Trustee,
Federated Investment Counseling; President and Director, Federated Global
Investment Management Corp.; President, Passport Research, Ltd.; Trustee,
Federated Shareholder Services Company; Director, Federated Services Company.
Mr. Donahue is the son of John F. Donahue, Chairman and Trustee of the Trust.
<PAGE>
APPROVAL OF CHANGES TO THE FUNDS'
FUNDAMENTAL INVESTMENT POLICIES
Introduction to Proposals #2(a) to #2(j) and #3.
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.
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Fundamental Policies
-------------------------------------- ---------------------------------------
<PAGE>
Board of Trustees and shareholders
<PAGE>
Fairly slowly, since a vote of can be accomplished by action of the
shareholders is required Board of Trustees
<PAGE>
Costly to change because a change can be accomplished by action
shareholder vote requires holding a of the Board of Trustees
meeting of shareholders
</TABLE>
The recommended changes are specified below. Each Proposal will be
voted on separately by each Fund (unless otherwise noted), and the approval of
each Proposal by each Fund will require the approval of a majority of the
outstanding voting shares of the Fund as defined in the 1940 Act. (See "Proxies,
Quorum and Voting at the Special 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 investments 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 #2: APPROVAL OF AMENDMENTS TO THE FUNDS'
FUNDAMENTAL INVESTMENT POLICIES
PROPOSAL #2(a): TO AMEND THE EQUITY FUND'S FUNDAMENTAL INVESTMENT
POLICY REGARDING DIVERSIFICATION
This Proposal Pertains to the Equity Fund Only.
Under the 1940 Act, the Equity Fund's policy relating to the
diversification of its investments must be fundamental. The 1940 Act prohibits a
"diversified" mutual fund from purchasing securities of any one issuer if, at
the time of purchase, more than 5% of the fund's total assets would be invested
in securities of that issuer or the fund would own or hold more than 10% of the
outstanding voting securities of that issuer, except that up to 25% of the
fund's total assets may be invested without regard to this limitation. The 5%
limitation does not apply to securities issued by or guaranteed by the U.S.
government, its agencies or instrumentalities or to securities issued by other
open-end investment companies.
The Equity Fund's present policy regarding diversification states:
"With respect to securities comprising 75% of the value of its total
assets, the Fund will not purchase securities issued by any one issuer
(other than cash, cash items, or securities issued or guaranteed by the
U.S. government, its agencies or instrumentalities, and repurchase
agreements collateralized by such securities) if, as a result, more
than 5% of the value of its total assets would be invested in the
securities of that issuer, and will not acquire more than 10% of the
outstanding voting securities of any one issuer."
In order to afford the Equity Fund's investment adviser maximum
flexibility in managing the Fund's assets, the Trustees propose to amend the
Equity Fund's diversification policy to be consistent with the definition of a
diversified investment company under the 1940 Act. The restated policy complies
with the U.S. Securities and Exchange Commission's (the "SEC" or the
"Commission") general definition of diversification. The new policy would
specifically add securities of other investment companies to the list of issuers
which are excluded from the 5% limitation. Upon approval of the Fund's
shareholders, the fundamental investment policy governing diversification for
the Equity Fund will be amended as follows:
"With respect to securities comprising 75% of the value of its total
assets, the Fund will not purchase securities of any one issuer (other
than cash; cash items; securities issued or guaranteed by the
government of the United States or its agencies or instrumentalities
and repurchase agreements collateralized by such U.S. government
securities; and securities of other investment companies) if, as a
result, more than 5% of the value of its total assets would be invested
in securities of that issuer, or the Fund would own more than 10% of
the outstanding voting securities of that issuer."
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #2(b): TO AMEND THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES
REGARDING BORROWING MONEY AND ISSUING SENIOR SECURITIES
The 1940 Act requires each Fund to have a fundamental investment policy
defining its ability to borrow money or issue senior securities. In general,
limitations on borrowing are designed to protect shareholders and their
investments by restricting each 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:
Equity Fund:
"The Fund will not issue senior securities, except that the Fund may
borrow money directly or through reverse repurchase agreements in
amounts up to one-third of the value of its total assets, including the
amount borrowed; and except to the extent that the Fund may enter into
futures contracts. The Fund will not borrow money or engage in reverse
repurchase agreements for investment leverage, but rather as a
temporary, extraordinary, or emergency measure or to facilitate
management of the Fund 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 any borrowings in excess of 5% of its total assets are
outstanding."
Government Fund:
"The Fund will not issue senior securities except that the Fund may
borrow money directly or through reverse repurchase agreements in
amounts up to one-third of the value of its total assets including the
amount borrowed. The Fund will not borrow money or engage in reverse
repurchase agreements for investment leverage, but rather as a
temporary, extraordinary, or emergency measure or to facilitate
management of the portfolio by enabling the Fund to meet redemption
requests when the liquidation of portfolio securities is deemed to be
inconvenient or disadvantageous. The Fund will not purchase any
securities while borrowings in excess of 5% of the value of its total
assets are outstanding."
Senior Securities-Generally. A "senior security" is an obligation of a mutual
fund with respect to its earnings or assets that takes precedence over the
claims of the fund's shareholders with respect to the same earnings or assets.
The 1940 Act generally prohibits a fund from issuing senior securities, in order
to limit the use of leverage. In general, an investment company uses leverage
when it borrows money to enter into securities transactions, or acquires an
asset without being required to make payment until a later time.
SEC staff interpretations allow a fund to engage in a number of types
of transactions which might otherwise be considered to create "senior
securities" or "leverage," so long as the fund meets certain collateral
requirements designed to protect shareholders. For example, some transactions
that may create senior security concerns include short sales, certain options
and futures transactions, reverse repurchase agreements and securities
transactions that obligate a fund to pay money at a future date (such as
when-issued, forward commitment or delayed delivery transactions). When engaging
in such transactions, a fund must set aside money or securities to meet the SEC
staff's collateralization requirements. This procedure effectively eliminates a
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 a 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 a 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, extraordinary or emergency measure. The proposed investment policy
would provide greater flexibility, and would permit the Funds to borrow money,
directly or indirectly (such as through reverse repurchase agreements, as
presently permitted by the Funds' policies), 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. If the new policy is
approved by shareholders, the Funds do not presently anticipate changing their
current practices relating to borrowing money and issuing senior securities. As
a matter of operating policy, the Funds do not presently intend to engage in
leveraging.
Upon shareholder approval, the fundamental investment policy governing
borrowing money and issuing senior securities for 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 #2(c): TO AMEND THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES
REGARDING INVESTMENTS IN REAL ESTATE
Under the 1940 Act, each Fund's policy concerning investments in real
estate must be fundamental. The Funds currently have fundamental investment
policies prohibiting the purchase or sale of real estate that state:
Equity Fund:
"The Fund will not purchase or sell real estate, including limited
partnership interests, although it may invest in the securities of
companies whose business involves the purchase or sale of real estate
or in securities which are secured by real estate or interests in real
estate."
Government Fund:
"The Fund will not buy or sell real estate, although it may invest in
securities secured by real estate or interests in real estate."
The proposed fundamental investment policy will not permit a Fund 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.
If the new policy is approved by shareholders, the Funds do not presently
anticipate changing their current practices relating to investing in real
estate.
Upon shareholder approval, the fundamental investment policies of the
Funds governing investments in real estate 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 #2(d): TO AMEND THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES
REGARDING INVESTMENTS IN COMMODITIES
Under the 1940 Act, each Fund's policy concerning investments in
commodities must be fundamental. Each Fund is currently subject to a fundamental
restriction prohibiting the purchase or sale of commodities that states:
Equity Fund:
"The Fund will not purchase or sell commodities, commodity contracts,
or commodity futures contracts except to the extent that the Fund may
engage in transactions involving financial futures contracts or options
on financial futures contracts."
Government Fund:
"The Fund will not buy or sell commodities, commodity contracts, or
commodities 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
Equity Fund 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. Using financial futures
instruments can involve substantial risks, and would be utilized only if the
Equity Fund's investment adviser determined that such investments are advisable
and such practices were disclosed in the Equity Fund's prospectus or statement
of additional information. Gains or losses on investments in financial futures
instruments depend on the direction of securities prices, interest rates and
other economic factors, and losses from engaging in these types of transactions
are potentially unlimited. At the present time, the Equity Fund does not intend
to engage in these activities beyond what is disclosed in the Fund's current
prospectus. As a matter of non-fundamental operating policy, for the Equity
Fund, 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 standardized fundamental investment
policy governing investments in commodities for the Funds 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 #2(e): TO AMEND THE FUNDS' FUNDAMENTAL INVESTMENT
POLICIES REGARDING UNDERWRITING SECURITIES
Under the 1940 Act, each Fund's policy relating to underwriting is
required to be fundamental. Both Funds currently are subject to a fundamental
investment policy prohibiting them from acting as an underwriter of the
securities of other issuers, which 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' fundamental policy.
Rather, it reflects a restatement, and is submitted to shareholders for approval
as a result of the 1940 Act's requirements.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #2(f): TO AMEND THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES
REGARDING LENDING BY THE FUNDS
Under the 1940 Act, each Fund's policy concerning lending must be
fundamental. The Equity Fund and Government Fund currently are subject to
fundamental investment policies limiting their ability to make loans that state:
Equity Fund:
"The Fund will not lend any of its assets, except portfolio securities
up to one-third of the value of its total assets. This shall not
prevent the Fund from purchasing or holding U.S. government
obligations, money market instruments, variable rate demand notes,
bonds, debentures, notes, certificates of indebtedness, or other debt
securities, entering into repurchase agreements, or engaging in other
transactions where permitted by the Fund's investment objective,
policies, and limitations or the Trust's Declaration of Trust."
Government Fund:
"The Fund will not lend any of its assets, except portfolio securities.
This shall not prevent the Fund from purchasing or holding bonds,
debentures, notes, certificates of indebtedness or other debt
securities, entering into repurchase agreements or engaging in other
transactions where permitted by its investment objective, policies and
limitations or Declaration of Trust."
In order to ensure that the Funds may invest in certain debt securities
or repurchase agreements, which could technically be characterized as the making
of loans, the Funds' current fundamental policies specifically permit such
investments. In addition, the Funds' fundamental policies explicitly permit the
Funds to lend their portfolio securities. Securities lending is a practice that
has become common in the mutual fund industry and involves the temporary loan of
portfolio securities to parties who use the securities for the settlement of
securities transactions. The collateral delivered to a Fund in connection with
such a transaction is then invested to provide the Fund with additional income
it might not otherwise have.
Securities lending involves certain risks if the borrower fails to
return the securities. However, management believes that with appropriate
controls, such as 100% or greater collateralization of the loan and regular
monitoring of the creditworthiness of the counterparty, the ability to engage in
securities lending does not materially increase the risks to which the Funds
currently are subject. In addition, securities on loan cannot generally be sold
until the term of the loan is over.
Upon approval of the Funds' shareholders, the fundamental investment
policy governing the lending of assets by the Equity Fund and the Government
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 #2(g): TO AMEND THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES
REGARDING CONCENTRATION OF THE FUNDS' INVESTMENTS IN THE SECURITIES OF COMPANIES
IN THE SAME INDUSTRY
Under the 1940 Act, each Fund's policy relating to the concentration of
its 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 are subject to fundamental investment policies
prohibiting them from concentrating their investments in a single industry.
These policies provide:
Equity Fund:
"The Fund will not invest 25% or more of the value of its total assets
in any one industry (other than securities issued by the U.S.
government, its agencies or instrumentalities)."
Government Fund:
"The Fund will not invest more than 25% of the value of its total
assets in any one industry (other than cash or cash items, and
securities issued by the U.S. government, its agencies or
instrumentalities, or repurchase agreements secured by such
securities)."
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 staff that only
domestic bank instruments may be excluded from industry concentration
limitations, as a matter of non-fundamental policy, the Fund will not
exclude foreign bank instruments from industry concentration limitation
tests as long as the policy of the SEC remains in effect. In addition,
investments in bank instruments, and investments in certain industrial
development bonds funded by activities in a single industry, will be
deemed to constitute investment in an industry, except when held for
temporary defensive purposes. The investment of more than 25% of the
value of the Fund's total assets in any one industry will constitute
`concentration.'"
The Trust's Board has also approved related non-fundamental policies
for each of the Funds, which will be adopted if the new fundamental policy is
approved by shareholders. These policies provide 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 #2(h): 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 each Fund's existing fundamental
policy be replaced with a non-fundamental restriction. Each Fund's current
policy provides:
Equity Fund:
"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 portfolio securities. The deposit or payment by the Fund
of initial or variation margin in connection with futures contracts or
related options transactions is not considered the purchase of a
security on margin."
Government Fund:
"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 for the Government Fund makes minor
changes in wording from the existing fundamental restriction. The proposed
non-fundamental policy for the Equity Fund also makes some changes in phrasing,
but contemplates that the Equity Fund may engage in the same types of
transactions as it is presently authorized to do. 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
policies:
Equity Fund:
"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."
Government Fund:
"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."
<PAGE>
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #2(i): TO AMEND, AND TO MAKE NON-FUNDAMENTAL, THE FUNDS' FUNDAMENTAL
INVESTMENT POLICIES REGARDING PLEDGING ASSETS
The Funds are not required to have a fundamental investment restriction
with respect to the pledging of assets. To maximize the Funds' flexibility in
this area, the Board of the Trust believes the policy on pledging assets should
be made non-fundamental. The non-fundamental policy would be similar to the
fundamental policies proposed to be eliminated, which state:
Equity Fund:
"The Fund will not mortgage, pledge, or hypothecate any assets except
to secure permitted borrowings. In those cases, it may mortgage,
pledge, or hypothecate assets having a market value not exceeding 10%
of the value of total assets at the time of the pledge. For purposes of
this limitation, the following will not be deemed to be pledges of the
Fund's assets: (a) the deposit of assets in escrow in connection with
the writing of covered put or call options and the purchase of
securities on a when-issued basis; and (b) collateral arrangements with
respect to (i) the purchase and sale of stock options (and options on
stock indices) and (ii) initial or variation margin for futures
contracts. Margin deposits for the purchase and sale of futures
contracts and related options are not deemed to be a pledge."
Government Fund:
"The Fund will not mortgage, pledge or hypothecate any assets, except
to secure permitted borrowings. In those cases, it may pledge assets
having a market value not exceeding the lesser of the dollar amounts
borrowed or 15% of the value of total assets of the Fund at the time of
the pledge."
The Board does not expect this change to have a material impact on the
Funds' operations. Establishing the policy as non-fundamental, however, would
enable the Board to change this policy in the future without shareholder
approval. Upon the approval of the elimination of the existing fundamental
policies 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 #2(j): TO AMEND, AND TO MAKE NON-FUNDAMENTAL, THE GOVERNMENT FUND'S
FUNDAMENTAL INVESTMENT POLICY REGARDING INVESTING IN RESTRICTED SECURITIES
This Proposal Pertains to the Government Fund Only.
The Government Fund is currently subject to a fundamental investment
restriction with respect to investing in restricted securities. To maximize the
Government Fund's flexibility in this area, the Board of the Trust believes that
the policy on investing in restricted securities should be made non-fundamental
and amended. The non-fundamental policy would be similar to the fundamental
policy proposed to be eliminated, which states:
"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 except for certain restricted securities which meet
criteria for liquidity as established by the Board of Trustees."
There is no legal requirement that the Government Fund have a
fundamental investment policy on this subject. Accordingly, the Board believes
that it should be made non-fundamental for the Government Fund, and amended to
render it consistent with the standardized disclosure utilized by other
investment companies distributed by Federated Securities Corp. Establishing the
policy as non-fundamental would enable the Government Fund to change this
restriction in the future without shareholder approval. However, the Government
Fund's investment adviser believes that the revised policy does not change the
scope and meaning of the investment policy, and the adviser does not expect this
modification to have a material impact on the manner in which the Government
Fund is operated.
Upon the approval of the elimination of the existing fundamental policy
on investing in restricted securities, the Government Fund would become subject
to the following non-fundamental policy:
"The Fund may invest in restricted securities. Restricted securities
are any securities in which the Fund may invest pursuant to its
investment objective and policies but which are subject to restrictions
on resale under federal securities law. Under criteria established by
the Trustees, certain restricted securities are determined to be
liquid. To the extent that restricted securities are not determined to
be liquid, the Fund will limit their purchase, together with other
illiquid securities, to 10% of its net assets."
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #3: ELIMINATION OF THE FUNDS'
FUNDAMENTAL INVESTMENT POLICIES ON SELLING SECURITIES SHORT
The Board has determined that the Funds' current fundamental
investment policies pertaining to selling securities short are unnecessary and
should be removed. Until NSMIA was adopted in 1996, the securities laws of
several states required every investment company that intended to sell its
shares in those states to adopt policies governing a variety of operational
issues, including a policy prohibiting short sales of securities. As a
consequence of those restrictions, the Funds each adopted an investment policy
related to selling securities short that states "the Fund will not sell
securities short," and agreed that the policies would be changed only upon the
approval of the Funds' shareholders.
Since the prohibition on short sales is no longer required under
current law, and in order to maximize the Funds' flexibility in this area, the
management of the Trust has recommended, and the Board has determined, that each
Fund's policy should be removed. Notwithstanding the elimination of this
fundamental restriction, the Funds expect to continue not to engage in short
sales of securities, except to the extent that the Funds contemporaneously own
or have the right to acquire, at no additional cost, securities identical to, or
convertible into or exchangeable for, those sold short. The Government Fund, as
a money market fund, is subject to substantive regulation pursuant to Rule 2a-7
under the 1940 Act, which has the effect of precluding the Government Fund from
selling securities short.
This Proposal will be voted on separately by the Equity Fund and the
Government Fund, and the approval of the change for 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 Special
Meeting" below.)
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #4: TO APPROVE AN AMENDMENT TO THE EQUITY FUND'S
FUNDAMENTAL INVESTMENT OBJECTIVE
This Proposal Pertains to the Equity Fund Only.
The Trust's Board of Trustees is recommending that the Equity Fund's
fundamental investment objective be amended to more clearly emphasize the
investment goal that the Equity Fund's investment adviser, FirstMerit Bank (the
"Adviser"), seeks to achieve when utilizing the management strategies of the
Equity Fund. The Equity Fund's current investment objective provides:
"The investment objective of the Fund is to achieve growth of capital and
income."
Historically, the Adviser has focused on seeking income and capital
appreciation in managing the Equity Fund, as evidenced by its current investment
objective. The Adviser has proposed eliminating the income component from the
Equity Fund's investment objective, and amending the objective to provide:
"The investment objective of the Fund is to achieve capital appreciation."
If approved by shareholders, the Equity Fund will pursue capital
appreciation as its sole investment objective. It is anticipated that the
revised investment objective will go into effect in January, 2000. The Trust's
management believes that the proposed amendment will not materially change the
manner in which the Equity Fund is managed, and the Equity Fund will continue to
invest in the same range of permissible investments as presently. Additionally,
the Trust's management believes that the level of risks and/or volatility of an
investment in the Equity Fund will be the same when pursuing the new objective
as when seeking to achieve the Fund's current investment objective. The Equity
Fund's amended investment objective will continue to be fundamental, which means
that it may not be changed in the future without shareholder approval.
The approval of the amended investment objective for the Equity Fund
requires 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
Special Meeting" below).
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #5: TO APPROVE AMENDMENTS TO, AND A RESTATEMENT OF, THE TRUST'S
DECLARATION OF TRUST
Mutual funds, such as the Trust, are required to organize under the
laws of a state and to create and be bound by organizational documents outlining
how they will operate. In the case of the Trust, these organizational documents
are the Declaration of Trust and the By-Laws. Since the adoption of the Trust's
current Declaration of Trust, the market for mutual funds has evolved, requiring
mutual funds to be more flexible in their operation to respond quickly to
changes in the market. Certain items in the current Declaration of Trust,
described below, prohibit the Trust from responding quickly and favorably to
changing markets without going to the expense and delay of holding a shareholder
meeting.
Accordingly, the Trustees have approved, and have authorized the
submission to the Funds' shareholders for their approval, certain amendments to
the Trust's Declaration of Trust. The approval of each amendment will require
the affirmative vote of a majority of the aggregate number of shares of the
Trust entitled to vote on each proposal as described in the Declaration of
Trust. (See "Proxies, Quorum and Voting at the Special Meeting" below.)
PROPOSAL #5(a): TO AMEND AND RESTATE THE TRUST'S DECLARATION OF TRUST TO
REQUIRE THE APPROVAL OF A MAJORITY OF THE OUTSTANDING VOTING SHARES OF THE
TRUST IN THE EVENT OF THE SALE AND CONVEYANCE OF THE ASSETS OF THE TRUST TO
ANOTHER TRUST OR CORPORATION
Article XII, Section 4(b) of the Declaration of Trust currently
requires the approval of the holders of more than fifty percent of the
outstanding shares of the Trust to approve any sale and conveyance of the assets
of the Trust to another open-end management investment company. To reduce the
likelihood of greater expenses in a proposed solicitation for the approval of
any sale and conveyance, the Trustees have adopted an amendment that would
permit a majority vote to approve such a transaction. A majority vote means the
affirmative vote of: (a) 67% or more of the voting securities present at the
meeting if the holders of more than 50% of the outstanding voting securities are
present or represented by proxy; or (b) more than 50% of the outstanding voting
securities, whichever is less. The amendment would provide the Trust with
greater flexibility, and in the event circumstances warrant the approval of the
Board, the Trustees could determine that a sale and conveyance of assets would
be in the best interest of the Trust. The Trustees are recommending that
shareholders approve the adoption of this proposed amendment to the Declaration
of Trust. There is no present intention to sell or convey the assets of the
Trust, or of the Funds, to any other trust or corporation.
If approved by shareholders, Article XII, Section 4(b) of the
Declaration of Trust would be amended to read as follows:
"(b) The Trustees, with the approval of a Majority Shareholder Vote of
each Series or Class, may sell and convey the assets of the Trust, or a
Class or Series of the Trust, to another trust or corporation organized
under the laws of any State of the United States, which is a
diversified open-end management investment company as defined in the
1940 Act, for an adequate consideration which may include the
assumption of all outstanding obligations, taxes and other liabilities,
accrued or contingent, of the Trust, of each Class or Series of the
Trust, and which may include shares of beneficial interest or stock of
such trust or corporation. Upon making provision for the payment of all
such liabilities, by such assumption or otherwise, the Trustees shall
distribute the remaining proceeds belonging to each Series or Class
ratably among the holders of the Shares of that Series or Class of the
Trust, then outstanding. For the purposes of this provision, a
"Majority Shareholder Vote" means the affirmative vote of the lesser
of: (a) more than 50% of the outstanding voting securities entitled to
vote upon the matter, or (b) 67% or more of the voting securities
present at the meeting if the holders of 50% or more of the outstanding
voting securities entitled to vote on the matter are present at the
meeting in person or by proxy."
In the event that the amendment to Article XII, Section 4(b) is not
approved by shareholders, this section of the Declaration of Trust will remain
as it currently exists, and the Board of Trustees will consider what action, if
any, should be taken.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
PROPOSAL #5(b): TO AMEND AND RESTATE THE TRUST'S DECLARATION OF TRUST TO PERMIT
THE BOARD OF TRUSTEES TO LIQUIDATE ASSETS OF THE TRUST, ITS SERIES OR CLASSES,
AND DISTRIBUTE THE PROCEEDS OF SUCH ASSETS TO THE HOLDERS OF SUCH SHARES
REPRESENTING SUCH INTERESTS, WITHOUT SEEKING SHAREHOLDER APPROVAL
Shareholders are being asked to approve an amendment to the Trust's
Declaration of Trust to permit the Trustees to sell and convert into money
(i.e., liquidate) all the assets of the Trust, or any series or class of the
Trust, and then redeem all outstanding shares of any series or class of the
Trust. Currently, a majority vote of shareholders is required to liquidate the
Trust, or an affected series or class of which shares are outstanding. The
Trustees have determined that the current restriction presents a cumbersome
structure under which the best interest of all of the Trust's shareholders may
not be served. By requiring the Trustees to solicit a shareholder vote, by
means of a proxy solicitation and special meeting of shareholders, the
Declaration of Trust greatly hinders the Trustees' ability to effectively act
on decisions about the continued viability of the Trust. If it is determined
that it is no longer advisable to continue the Trust, or a series or class of
the Trust, it may not be in the best interest of shareholders to incur the
substantial additional expense of a shareholder meeting when it is more
important to preserve those assets that remain. If this proposal is approved
by shareholders, the Trustees will be authorized to liquidate a series or
class of the Trust by Board action without a further shareholder vote. 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 Funds' shareholders for their approval, an amendment to the Trust's
Declaration of Trust.
In the event that this amendment to the Declaration of Trust to allow
the Trustees to liquidate assets of the Trust, or of a series or class thereof,
is not approved by the shareholders, the Declaration of Trust will remain as it
currently exists and the Trustees will consider what action, if any, should be
taken.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE PROPOSAL
INFORMATION ABOUT THE TRUST
Proxies, Quorum and Voting at the Special Meeting
Only shareholders of record on the Record Date will be entitled to vote
at the Special Meeting. Each share of each Fund is entitled to one vote.
Fractional shares are entitled to proportionate shares of one vote. Under the
Investment Company Act of 1940, the favorable vote of: (a) the holders of 67% or
more of the outstanding voting securities present at the Special Meeting, if the
holders of 50% or more of the outstanding voting securities of the Funds 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, is required to approve
all of the proposals, except the election of Trustees and the amendments to the
Declaration of Trust. Trustees are elected by a plurality vote. The amendments
to the Declaration of Trust must be approved by the affirmative vote of a
majority of the aggregate number of shares of the Trust entitled to vote on each
proposal.
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 Special Meeting will not revoke a proxy, a shareholder present
at the Special Meeting may withdraw his or her proxy and vote in person. All
properly executed and unrevoked proxies received in time for the Special 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 Special Meeting, a "quorum" of shareholders must
be present. Holders of more than 50% of the total number of outstanding voting
shares of all series and classes entitled to vote, present in person or by
proxy, shall be required to constitute a quorum for the purpose of voting on the
proposals made pertaining to the election of Trustees and the amendments to the
Declaration of Trust. Holders of more than 50% of the total number of
outstanding shares of each Fund, present in person or by proxy, shall be
required to constitute a quorum for the purpose of voting on the other
proposals.
For purposes of determining a quorum for transacting business at the
Special 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 that have been received to adjourn the Special Meeting to a later date.
In the event that a quorum is present but sufficient votes in favor of one or
more of the proposals have not been received, the persons named as proxies may
propose one or more adjournments of the Special Meeting to permit further
solicitations of proxies with respect to such proposal(s). All such adjournments
will require the affirmative vote of a plurality of the shares present in person
or by proxy at the session of the Special Meeting to be adjourned. The persons
named as proxies will vote AGAINST an adjournment those proxies that they are
required to vote against the proposal, and will vote in FAVOR of such an
adjournment all other proxies that they are authorized to vote. A shareholder
vote may be taken on the 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" includes the following investment companies: Cash Trust
Series, Inc.; Cash Trust Series II; CCB Funds; Federated Adjustable Rate U.S.
Government Fund, Inc.; Federated American Leaders Fund, Inc.; Federated ARMs
Fund; Federated Core Trust; Federated 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 Municipal
Opportunities Fund, Inc.; Federated Municipal Securities Fund, Inc.; Federated
Municipal Trust; Federated Short-Term Municipal Trust; Federated Stock and Bond
Fund, Inc.; Federated Stock Trust; Federated Tax-Free Trust; Federated Total
Return Series, Inc.; Federated U.S. Government Bond Fund; Federated U.S.
Government Securities Fund: 1-3 Years; Federated U.S. Government Securities
Fund: 2-5 Years; Federated U.S. Government Securities Fund: 5-10 Years;
Federated Utility Fund, Inc.; Fixed Income Securities, Inc.; Intermediate
Municipal Trust; International Series, Inc.; Investment Series Funds, Inc.;
Edward D. Jones & Co. Daily Passport Cash Trust; Liberty Term Trust, Inc. -
1999; Liberty U.S. Government Money Market Trust; Managed Series Trust; Money
Market Management, Inc.; Money Market Obligations Trust; Money Market
Obligations Trust II; Money Market Trust; Municipal Securities Income Trust;
Newpoint Funds; Regions Funds; RIGGS Funds; Tax-Free Instruments Trust; The
Planters Funds; WesMark Funds; WCT Funds; and World Investment Series, Inc.
Share Ownership of the Trustees
Officers and Trustees of the Trust own less than 1% of the Trust's outstanding
shares.
At the close of business on the Record Date, the following persons owned, to the
knowledge of management, more than 5% of the outstanding shares of the Funds:
Equity Fund: [TO BE INSERTED]
Government Fund: [TO BE INSERTED]
<TABLE>
<CAPTION>
<S> <C> <C>
Trustee Compensation
Name and Position Aggregate Total Compensation Paid From Fund Complex+
With Trust Compensation From
Trust1#
- -------------------------------------- --------------------------- -------------------------------------------------------
John F. Donahue*@ $0 $0 for the Trust and 54 other
Chairman and Trustee investment companies in the Fund Complex
Thomas G. Bigley $589.13 $113,860.22 for the Trust and 54 other
Trustee investment companies in the Fund Complex
John T. Conroy, Jr. $648.13 $125,264.48 for the Trust and 54 other
Trustee investment companies in the Fund Complex
William J. Copeland $648.13 $125,264.48 for the Trust and 54 other
Trustee investment companies in the Fund Complex
John F. Cunningham** $0 $0 for the Trust and 46 other investment
Trustee companies in the Fund Complex
Lawrence D. Ellis, M.D.* $589.13 $113,860.22 for the Trust and 54 other
Trustee investment companies in the Fund Complex
Edward C. Gonzales $0 $0 for the Trust and 6 other investment
President, Treasurer and Trustee companies in the Fund Complex
Peter E. Madden $589.13 $113,860.22 for the Trust and 54 other
Trustee investment companies in the Fund Complex
Charles F. Mansfield, Jr.** $0 $0 for the Trust and 50 other
Trustee investment companies in the Fund Complex
John E. Murray, Jr., J.D., S.J.D.@ $589.13 $113,860.22 for the Trust and 54 other
Trustee investment companies in the Fund Complex
Marjorie P. Smuts $589.13 $113,860.22 for the Trust and 54 other
Trustee investment companies in the Fund Complex
John S. Walsh** $0 $0 for the Trust and 48 other investment
Trustee companies in the Fund Complex
</TABLE>
1 Information is furnished for the fiscal year ended November 30, 1998.
# The aggregate compensation is provided for the Trust, which is comprised of
two portfolios.
+ The information is provided for the last calendar year.
* This Trustee is deemed to be an "interested person" as defined in the 1940
Act.
If the Nominees are elected at the Special Meeting, it is anticipated
that Mr. Copeland will resign as a Trustee.
** Messrs. Cunningham, Mansfield and Walsh became Trustees of the Trust on
January 1, 1999. They did not receive any fees from the Fund Complex as of the
last calendar year.
@ Member of the Executive Committee.
During the fiscal year ended November 30, 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.
Messrs. Conroy, Copeland, Madden, and Murray serve on the Audit
Committee. These Trustees are not interested Trustees of the Trust. During the
fiscal year ended November 30, 1998, there were four meetings of the Audit
Committee. All of the members of the Audit Committee were present for each
meeting. Each member of the Audit Committee receives an annual fee of $100 plus
$25 for attendance at each meeting and is reimbursed for expenses of attendance.
Officers and Incumbent Trustees of the Trust
The executive officers of the Trust are elected annually by the Board
of Trustees. Each officer holds the office until qualification of his successor.
The names and birth dates of the executive officers of the Trust, as well as the
incumbent Trustees of the Trust who have previously been elected by
shareholders, and their principal occupations during the last five years, are
set forth below:
John F. Donahue
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Birth date: July 28, 1924
Chairman and Trustee
Chief Executive Officer and Director or Trustee of the Federated Fund Complex;
Chairman and Director, Federated Investors, Inc.; Chairman and Trustee,
Federated Investment Management Company; Chairman and Director, Federated
Investment Counseling and Federated Global Investment Management Corp.;
Chairman, Passport Research, Ltd. Mr. Donahue is the father of J. Christopher
Donahue, Executive Vice President of the Trust and Nominee for Trustee.
John T. Conroy, Jr.
Wood/Commercial Dept.
John R. Wood Associates, Inc. Realtors
3255 Tamiami Trail North
Naples, FL
Birth date: June 23, 1937
Trustee
Date Became a Trustee: August 21, 1991
Director or Trustee of the Federated Fund Complex; President, Investment
Properties Corporation; Senior Vice President, John R. Wood and Associates,
Inc., Realtors; Partner or Trustee in private real estate ventures in Southwest
Florida; formerly: President, Naples Property Management, Inc. and Northgate
Village Development Corporation.
<PAGE>
William J. Copeland
One PNC Plaza - 23rd Floor
Pittsburgh, PA
Birth date: July 4, 1918
Trustee
Date Became a Trustee: November 12, 1990
Director or Trustee of the Federated Fund Complex; Director and Member of the
Executive Committee, Michael Baker Corp. (engineering, construction, operations,
and technical services); Chairman, Pittsburgh Foundation; Director, Forbes Fund
(philanthropy); formerly: Vice Chairman and Director, PNC Bank, N.A. and PNC
Bank Corp.; Director, Ryan Homes, Inc. Previous Positions: Director, United
Refinery; Chairman, Pittsburgh Civic Light Opera.
Lawrence D. Ellis, M.D.
3471 Fifth Avenue
Suite 1111
Pittsburgh, PA
Birth date: October 11, 1932
Trustee
Date Became a Trustee: November 12, 1990
Director or Trustee of the Federated Fund Complex; Professor of Medicine,
University of Pittsburgh; Medical Director, University of Pittsburgh Medical
Center-Downtown; Hematologist, Oncologist, and Internist, University of
Pittsburgh Medical Center; Member, National Board of Trustees, Leukemia Society
of America.
Edward C. Gonzales
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Birth date: October 22, 1930
President, Treasurer and Trustee
Date Became a Trustee and an Officer: November 12, 1990 and November 15, 1990
Trustee or Director of some of the Funds in the Federated Fund Complex;
President, Executive Vice President and Treasurer of some of the Funds in the
Federated Fund Complex; Vice Chairman, Federated Investors, Inc.; Vice
President, Federated Investment Management Company, Federated Investment
Counseling, Federated Global Investment Management Corp. and Passport Research,
Ltd.; Executive Vice President and Director, Federated Securities Corp.;
Trustee, Federated Shareholder Services Company.
<PAGE>
Peter E. Madden
One Royal Palm Way
100 Royal Palm Way
Palm Beach, FL
Birth date: March 16, 1942
Trustee
Date Became a Trustee: August 21, 1991
Director or Trustee of the Federated Fund Complex; formerly: Representative,
Commonwealth of Massachusetts General Court; President, State Street Bank and
Trust Company and State Street Corporation. Previous Positions: Director, VISA
USA and VISA International; Chairman and Director, Massachusetts Bankers
Association; Director, Depository Trust Corporation; Director, The Boston Stock
Exchange.
Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA
Birth date: June 21, 1935
Trustee
Date Became a Trustee: November 12, 1990
Director or Trustee of the Federated Fund Complex; Public
Relations/Marketing/Conference Planning. Previous Positions: National
Spokesperson, Aluminum Company of America; television producer; business owner.
J. Christopher Donahue
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Birth date: April 11, 1949
Executive Vice President
Date Became an Officer: June 1, 1995
President or Executive Vice President of the Federated Fund Complex; Director or
Trustee of some of the Funds in the Federated Fund Complex; President, Chief
Executive Officer and Director, Federated Investors, Inc.; President and
Trustee, Federated Investment Management Company; President and Trustee,
Federated Investment Counseling; President and Director, Federated Global
Investment Management Corp.; President, Passport Research, Ltd.; Trustee,
Federated Shareholder Services Company; Director, Federated Services Company.
Mr. Donahue is the son of John F. Donahue, Chairman and Trustee of the Trust.
<PAGE>
John W. McGonigle
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Birth date: October 26, 1938
Executive Vice President and Secretary
Date Became an Officer: November 15, 1990
Executive Vice President and Secretary of the Federated Fund Complex; Executive
Vice President, Secretary and Director, Federated Investors, Inc.; Trustee,
Federated Investment Management Company; Trustee, Federated Investment
Counseling; Director, Federated Global Investment Management Corp.; Director,
Federated Services Company; Director, Federated Securities Corp.
Richard B. Fisher
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Birth date: May 17, 1923
Vice President
Date Became an Officer: November 15, 1990
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.
C. Christine Thomson
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Birth date: September 1, 1957
Vice President
Date Became an Officer: November 1, 1995
Vice President and Assistant Treasurer of some of the Federated Funds.
None of the officers of the Trust received salaries from the Trust
during the fiscal year ended November 30, 1998.
<PAGE>
OTHER MATTERS AND DISCRETION OF ATTORNEYS NAMED IN THE PROXY
The Trust is not required, and does not intend, to hold regular annual
meetings of shareholders. Shareholders wishing to submit proposals for
consideration for inclusion in a proxy statement for the next meeting of
shareholders should send their written proposals to Newpoint Funds, 5800
Corporate Drive, Pittsburgh, Pennsylvania 15237-7000, so that they are received
within a reasonable time before any such meeting.
No business other than the matters described above is expected to come
before the Special Meeting, but should any other matter requiring a vote of
shareholders arise, including any question as to an adjournment or postponement
of the Special 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
November 12, 1999
<PAGE>
NEWPOINT FUNDS
Newpoint Equity Fund
Newpoint Government Money Market Fund
Investment Adviser
FIRSTMERIT BANK
121 South Main Street
Akron, Ohio 44308-1440
Distributor
FEDERATED SECURITIES CORP.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
Administrator
FEDERATED SERVICES COMPANY
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of Newpoint
Equity Fund (the "Fund"), a portfolio of Newpoint Funds (the "Trust"), hereby
appoint Patricia F. Conner, Gail Cagney, William Haas, Suzanne W. Land and Ann
M. Scanlon, or any one of them, true and lawful attorneys, with the power of
substitution of each, to vote all shares of the Fund which the undersigned is
entitled to vote at the Special Meeting of Shareholders (the "Special Meeting")
to be held on December 17, 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
Special Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF NEWPOINT FUNDS.
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 [ ]
AGAINST [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR"
a particular nominee, mark the "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 make changes to the Fund's fundamental investment policies:
2(a) To amend the Fund's fundamental investment policy regarding
diversification
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(b) To amend the Fund's fundamental investment policy regarding
borrowing money and issuing senior securities
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(c) To amend the Fund's fundamental investment
policy regarding investments in real estate
FOR [ ] AGAINST [ ] ABSTAIN [ ]
2(d) To amend the Fund's fundamental investment
policy regarding investments in commodities
FOR [ ] AGAINST [ ] ABSTAIN [ ]
2(e) To amend the Fund's fundamental investment
policy regarding underwriting securities FOR
[ ] AGAINST [ ] ABSTAIN [ ]
2(f) To amend the Fund's fundamental investment
policy regarding lending assets FOR [ ]
AGAINST [ ] ABSTAIN [ ]
2(g) To amend the Fund's fundamental investment policy regarding
concentration of the Fund's investments in the securities of
companies in the same industry
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(h) To amend, and to make non-fundamental, the Fund's fundamental
investment policy regarding buying securities on margin
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(i) To amend, and to make non-fundamental, the Fund's fundamental
investment policy regarding pledging assets
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
Proposal 3 To eliminate the Fund's fundamental investment policy on
selling securities short
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
Proposal 4 To amend the Fund's fundamental investment objective
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
Proposal 5 To approve amendments to, and a restatement of, the Trust's
Declaration of Trust:
5(a) To approve an amendment to and restatement of the Trust's
Declaration of Trust to require the approval by a majority of
the outstanding voting shares in the event of the sale or
conveyance of the assets of the Trust to another trust or
corporation
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
5(b) To approve an amendment to and restatement of the Trust's
Declaration of Trust to permit the Board of Trustees to
liquidate assets of the Trust, or of its series or classes,
and distribute the proceeds of such assets without seeking
shareholder approval
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
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. Trustees 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.
<PAGE>
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of Newpoint
Government Money Market Fund (the "Fund"), a portfolio of Newpoint Funds (the
"Trust"), hereby appoint Patricia F. Conner, Gail Cagney, William Haas, Suzanne
W. Land and Ann M. Scanlon, or any one of them, true and lawful attorneys, with
the power of substitution of each, to vote all shares of the Fund which the
undersigned is entitled to vote at the Special Meeting of Shareholders (the
"Special Meeting") to be held on December 17, 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
Special Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF NEWPOINT FUNDS.
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 [ ]
AGAINST [ ]
WITHHOLD AUTHORITY
TO VOTE [ ]
FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR"
a particular nominee, mark the "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 make changes to the Fund's fundamental investment policies:
2(b) To amend the Fund's fundamental investment policy regarding
borrowing money and issuing senior securities
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(c) To amend the Fund's fundamental investment
policy regarding investments in real estate
FOR [ ] AGAINST [ ] ABSTAIN [ ]
2(d) To amend the Fund's fundamental investment
policy regarding investments in commodities
FOR [ ] AGAINST [ ] ABSTAIN [ ]
<PAGE>
2(e) To amend the Fund's fundamental investment
policy regarding underwriting securities FOR
[ ] AGAINST [ ] ABSTAIN [ ]
2(f) To amend the Fund's fundamental investment
policy regarding lending assets FOR [ ]
AGAINST [ ] ABSTAIN [ ]
2(g) To amend the Fund's fundamental investment policy regarding
concentration of the Fund's investments in the securities of
companies in the same industry
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(h) To amend, and to make non-fundamental, the Fund's fundamental
investment policy regarding buying securities on margin
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(i) To amend, and to make non-fundamental, the Fund's fundamental
investment policy regarding pledging assets
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
2(j) To amend, and make non-fundamental, the Fund's fundamental
investment policy regarding investing in restricted securities
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
Proposal 3 To eliminate the Fund's fundamental investment policy on
selling securities short
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
Proposal 5 To approve amendments to, and a restatement of, the Trust's
Declaration of Trust:
5(a) To approve an amendment to and restatement of the Trust's
Declaration of Trust to require the approval by a majority of
the outstanding voting shares in the event of the sale or
conveyance of the assets of the Trust to another trust or
corporation
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
<PAGE>
5(b) To approve an amendment to and restatement of the Trust's
Declaration of Trust to permit the Board of Trustees to
liquidate assets of the Trust, or of its series or classes,
and distribute the proceeds of such assets without seeking
shareholder approval
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
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. Trustees 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.
