-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, sTG65NM5ID24KtutLOaf382VYQEYw7u+ompV5gmUcndENA9GMpm/NCgyEgM4ROpx uL/wEwXJQKcjrBeq71PEUg== 0000855108-94-000027.txt : 19940714 0000855108-94-000027.hdr.sgml : 19940714 ACCESSION NUMBER: 0000855108-94-000027 CONFORMED SUBMISSION TYPE: DEFS14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940826 FILED AS OF DATE: 19940713 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FEDERATED MUNICIPAL TRUST CENTRAL INDEX KEY: 0000855108 STANDARD INDUSTRIAL CLASSIFICATION: STATE OF INCORPORATION: MA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: DEFS14A SEC ACT: 1934 Act SEC FILE NUMBER: 811-05911 FILM NUMBER: 94538630 BUSINESS ADDRESS: STREET 1: FEDERATED INVESTORS TOWER CITY: PITTSBURGH STATE: PA ZIP: 15222 BUSINESS PHONE: 4122887496 DEFS14A 1 FORM DOCUMENT NEW YORK MUNICIPAL CASH TRUST FEDERATED INVESTORS TOWER PITTSBURGH, PENNSYLVANIA 15222-3779 Dear Shareholder: The Board of Trustees and management of New York Municipal Cash Trust (the "Fund") are pleased to submit for your vote a proposal to sell all of the Fund's assets to New York Municipal Cash Trust (the "Portfolio"), a portfolio of Federated Municipal Trust (the "Trust"), a money market mutual fund advised by Federated Management. The Portfolio has two series of shares, Institutional Service Shares and Cash II Shares (collectively, the "Series"). The Portfolio has an investment objective similar to that of the Fund. As part of the transaction, shareholders in the Fund would receive shares in the Portfolio equal in value to their shares in the Fund and the Fund would be dissolved. Such shares of the Portfolio would be in the Series corresponding to the Fund series owned by the shareholder. The Board of Trustees of the Fund, as well as Federated Management, the Fund's adviser, believe the proposed agreement and plan of reorganization is in the best interest of Fund shareholders for the following reasons: -- The Trust offers a variety of investment portfolios which invest in money market municipal securities of individual states and the reorganization of the Fund as a portfolio of the Trust is expected to provide operating efficiencies as a result of the common management and investment advisory services provided to each of these portfolios, including the Portfolio. -- The transaction may result in economies of scale to the extent that certain expenses previously borne by the Fund will be shared by all of the portfolios of the Trust. We believe the sale of the Fund's assets in this transaction will present an excellent investment opportunity for our shareholders. Your vote on the transaction is critical to its success. The sale will be effected only if approved by the lesser of the holders of a majority of the Fund's outstanding shares on the record date or two-thirds of the shares voted at the meeting at which a quorum is present or represented by proxy. We hope you share our enthusiasm and will participate by casting your vote in person, or by proxy if you are unable to attend the meeting. Please read the enclosed prospectus/proxy statement carefully before you vote. If you have any questions, please feel free to call us at 800-245-5000. Thank you for your prompt attention and participation. Sincerely, New York Municipal Cash Trust Glen R. Johnson President NEW YORK MUNICIPAL CASH TRUST FEDERATED INVESTORS TOWER PITTSBURGH, PENNSYLVANIA 15222-3779 NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS TO SHAREHOLDERS OF NEW YORK MUNICIPAL CASH TRUST: A Special Meeting of Shareholders of New York Municipal Cash Trust (the "Fund") will be held at 2:00 p.m. on August 26, 1994 at the office of the Fund, Federated Investors Tower, 19th Floor, Pittsburgh, Pennsylvania 15222-3779 for the following purposes: 1. To approve or disapprove a proposed Agreement and Plan of Reorganization between the Fund and Federated Municipal Trust (the "Trust"), on behalf of its portfolio, New York Municipal Cash Trust (the "Portfolio"), whereby the Trust would acquire all of the assets of the Fund in exchange for Portfolio shares to be distributed pro rata by the Fund to its shareholders in complete liquidation and dissolution of the Fund; and 2. To transact such other business as may properly come before the meeting or any adjournment thereof. By Order of the Board of Trustees, JOHN W. MCGONIGLE Dated: June 30, 1994 Secretary SHAREHOLDERS OF RECORD AT THE CLOSE OF BUSINESS JUNE 29, 1994 ARE ENTITLED TO VOTE AT THE MEETING. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND RETURN THE ENCLOSED PROXY CARD. YOUR VOTE IS IMPORTANT. TO SECURE THE LARGEST POSSIBLE REPRESENTATION AND TO SAVE THE EXPENSE OF FURTHER MAILINGS, PLEASE MARK YOUR PROXY CARD, SIGN IT, AND RETURN IT IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. YOU MAY REVOKE YOUR PROXY AT ANY TIME AT OR BEFORE THE MEETING OR VOTE IN PERSON IF YOU ATTEND THE MEETING. PROSPECTUS/PROXY STATEMENT JUNE 30, 1994 ACQUISITION OF THE ASSETS OF NEW YORK MUNICIPAL CASH TRUST FEDERATED INVESTORS TOWER PITTSBURGH, PENNSYLVANIA 15222-3779 TELEPHONE NUMBER: 1-800-245-5000 BY AND IN EXCHANGE FOR SHARES OF NEW YORK MUNICIPAL CASH TRUST A PORTFOLIO OF FEDERATED MUNICIPAL TRUST FEDERATED INVESTORS TOWER PITTSBURGH, PENNSYLVANIA 15222-3779 TELEPHONE NUMBER: 1-800-245-5000 This Prospectus/Proxy Statement describes the proposed Agreement and Plan of Reorganization (the "Plan") whereby Federated Municipal Trust, a Massachusetts business trust (the "Trust"), on behalf of its portfolio New York Municipal Cash Trust (the "Portfolio"), would acquire all of the assets of New York Municipal Cash Trust, a Massachusetts business trust (the "Fund"), in exchange for Portfolio shares to be distributed pro rata by the Fund to its shareholders in complete liquidation and dissolution of the Fund. As a result of the Plan, each shareholder of the Fund will become the owner of Portfolio shares having a total net asset value equal to the total net asset value of his or her holdings in the Fund. The Portfolio has two series of shares, Institutional Service Shares and Cash II Shares (collectively, the "Series"). The Fund also has two series of shares, Institutional Service Shares and Cash II Shares (collectively, the "Fund Series"). Shareholders of the Fund will receive shares of the Series which correspond to the Fund Series shares owned by the shareholder. The Trust is an open-end management investment company which currently includes several portfolios, each of which has a distinct investment objective. The Portfolio is a newly-organized portfolio of the Trust whose investment objective is to provide current income which is exempt from federal regular income tax and the personal income taxes imposed by the state of New York and New York municipalities consistent with stability of principal. The Portfolio pursues this investment objective by investing primarily in short-term New York municipal securities with remaining maturities or 13 months or less at the time of purchase by the Portfolio. As a matter of investment policy, which cannot be changed without the approval of shareholders, the Portfolio invests so that at least 80% of its annual interest income is exempt from federal regular income tax and the personal income taxes imposed by New York state and its municipalities. The Fund has a similar investment objective, which it pursues by investing primarily in short-term New York municipal securities with remaining maturities of one year or less at the time of purchase by the Fund. Both the Portfolio and the Fund are money market mutual funds which seek to stabilize their offering and redemption prices at $1.00 per share, although there can be no assurance that either the Portfolio or the Fund will be able to do so. An investment in the Portfolio or Fund is neither insured nor guaranteed by the United States government. For a comparison of the investment policies of the Portfolio and the Fund, see "Summary--Investment Objectives and Policies". This Prospectus/Proxy Statement should be retained for future reference. It sets forth concisely the information about the Trust and the Portfolio that a prospective investor should know before investing. This Prospectus/Proxy Statement is accompanied by the Prospectus for the Institutional Service Shares dated June 30, 1994 or the Prospectus for the Cash II Shares dated June 30, 1994 which are incorporated herein by reference. A Combined Statement of Additional Information for the Portfolio dated June 30, 1994 (relating to the Portfolio's prospectuses of the same date) and June 30, 1994 (relating to this Prospectus/Proxy Statement) containing additional information have been filed with the Securities and Exchange Commission and are incorporated herein by reference. Copies of the Combined Statements of Additional Information may be obtained without charge by writing or calling the Trust at the address and telephone number shown above. INVESTMENTS IN BOTH THE PORTFOLIO AND THE FUND ARE NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT. BOTH THE PORTFOLIO AND THE FUND ATTEMPT TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE; THERE CAN BE NO ASSURANCE THAT THEY WILL BE ABLE TO DO SO. THE SHARES OFFERED BY THIS PROSPECTUS/PROXY STATEMENT ARE NOT DEPOSITS OR OBLIGATIONS OF ANY BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK, AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. TABLE OF CONTENTS Summary....................................................................... 2 Risk Factors.................................................................. 6 Information About the Reorganization.......................................... 6 Information About the Trust, the Portfolio and the Fund....................... 9 Voting Information........................................................... 10 SUMMARY ABOUT THE PROPOSED REORGANIZATION The Board of Trustees of New York Municipal Cash Trust (the "Fund") has voted to recommend to shareholders of the Fund the approval of an Agreement and Plan of Reorganization (the "Plan") whereby Federated Municipal Trust, a Massachusetts business trust (the "Trust"), on behalf of its portfolio, New York Municipal Cash Trust (the "Portfolio"), would acquire all of the assets of the Fund in exchange for Portfolio shares to be distributed pro rata by the Fund to its shareholders in complete liquidation and dissolution of the Fund (the "Reorganization"). As a result of the Reorganization, each shareholder of the Fund will become the owner of Portfolio shares having a total net asset value equal to the total net asset value of his or her holdings in the Fund on the date of the Reorganization, i.e., the Closing Date. The Fund has two series of shares, Institutional Service Shares and Cash II Shares (collectively, the "Fund Series"). The Portfolio also has two series of shares, Institutional Service Shares and Cash II Shares (collectively, the "Series"). Each Fund shareholder will receive shares of the Series corresponding to the Fund Series shares owned by such shareholder. Neither Fund nor Portfolio shareholders currently have any exchange rights. As a condition to the Reorganization transactions, the Trust and the Fund will receive an opinion of counsel that the Reorganization will be considered a tax-free "reorganization" under applicable provisions of the Internal Revenue Code so that no gain or loss will be recognized by either the Trust or the Fund or their shareholders. The tax cost basis of the Portfolio shares received by Fund shareholders will be the same as the tax cost basis of their shares in the Fund. After the acquisition is completed, the Fund will dissolve and deregister as an investment company under the Investment Company Act of 1940 (the "1940 Act"). INVESTMENT OBJECTIVES AND POLICIES The investment objective of the Portfolio is to provide current income which is exempt from federal regular income tax and the personal income taxes imposed by the state of New York and New York municipalities consistent with stability of principal. The Portfolio pursues its investment objective by investing primarily in short-term New York municipal securities with remaining maturities of 13 months or less at the time of purchase by the Portfolio, including securities of states, territories, and possessions of the United States, which are not issued by or on behalf of New York or its political subdivisions and financing authorities, but which provide income exempt from the federal regular and New York state and municipal personal income taxes. The Portfolio invests so that at least 80% of its annual interest income is exempt from federal regular income tax and the personal income taxes imposed by New York state and its municipalities. This investment policy may not be changed without the approval of shareholders. The investment objective of the Fund is identical to that of the Portfolio. The Fund pursues its investment strategy by investing primarily in short-term New York municipal securities and the other governmental securities listed above with remaining maturities of one year or less at the time of purchase by the Fund so that at least 80% of its annual interest income is exempt from federal regular income tax and the personal income taxes imposed by New York state and its municipalities. This investment policy may not be changed without the approval of shareholders. The municipal securities in which the Fund and the Portfolio invest must either be rated in one of the two highest short-term rating categories by one or more nationally recognized statistical rating organizations ("NRSROs") or be of comparable quality to securities having such ratings. A NRSRO's two highest rating categories are determined without regard for sub-categories and gradations. With respect to the Portfolio, unless otherwise indicated, the investment policies may be changed by the Board of Trustees without the approval of shareholders. Shareholders will, however, be notified before any material changes become effective. Both the Portfolio and the Fund are subject to certain investment limitations. These include limitations which prohibit each of the Portfolio and the Fund from (1) borrowing money or pledging securities except that, under certain circumstances, the Portfolio or the Fund may borrow up to one-third of the value of its total assets and pledge up to 10% of the value of its total assets to secure such borrowings; (2) with respect to 75% of its assets, investing more than 10% of its total assets in the securities of any one issuer; (3) investing more than 5% of its total assets in securities of issuers that have records of less than three years of continuous operations; and (4) committing more than 10% of its total assets to illiquid obligations. The foregoing limitations, as well as certain other limitations described in the Portfolio's Combined Statement of Additional Information dated June 30, 1994 and the Fund's Combined Statement of Additional Information dated December 31, 1993, may not be changed by either the Portfolio or the Fund without shareholder approval. Reference is hereby made to each of the Series' Prospectuses and the Combined Statement of Additional Information, each dated June 30, 1994, and to each of the Fund Series' Prospectuses and the Combined Statement of Additional Information, each dated December 31, 1993, which set forth in full investment objectives and policies and investment restrictions of each of the Portfolio and the Fund. ADVISORY AND OTHER FEES; DISTRIBUTION ARRANGEMENTS The annual investment advisory fee for each of the Portfolio and the Fund is 0.40 of 1% of the Portfolio's or the Fund's, as applicable, average daily net assets. Federated Management, the investment adviser to the Portfolio (the "Adviser"), has undertaken to waive a portion of its advisory fee, up to the amount of its advisory fee, to reimburse the Portfolio for operating expenses in excess of limitations imposed by certain states. The Adviser may further voluntarily waive a portion of its fee or reimburse the Portfolio for certain operating expenses. This agreement to waive fees and reimburse the Portfolio may be terminated by the Adviser at any time in its discretion. The Adviser, which also serves as investment adviser to the Fund, has contractually undertaken to reimburse the Fund the amount, limited to the amount of the advisory fee, by which certain of the Fund's aggregate annual expenses exceed 0.45 of 1% of the Fund's average daily net assets (exclusive of payments pursuant to the Fund's Rule 12b-1 Plan) and, in addition, has voluntarily undertaken to reimburse the Fund for operating expenses in excess of limitations established by certain states. The Adviser has advised the Trust that, following the Reorganization, it anticipates that it will waive its investment advisory fee and/or reimburse the Portfolio for operating expenses to the extent the operating expenses applicable to the Institutional Service Shares (including payments pursuant to a Rule 12b-1 Plan and/or Shareholder Services Plan) exceed 0.55 of 1% of average daily net assets and to the extent the operating expenses applicable to the Cash II Shares (including payments pursuant to a Rule 12b-1 Plan and/or Shareholder Services Plan) exceed 0.70 of 1% of average daily net assets. These reimbursements are voluntary, in contrast to the contractual undertakings by the Adviser to the Fund which may not be rescinded without the consent of the Fund, and may be terminated by the Adviser at any time in its discretion. Without such waiver, or reimbursement, the expense ratio of each of the Portfolio and the Fund would be higher by 0.18% of 1% of average daily net assets. Federated Administrative Services, an affiliate of the Adviser, provides certain administrative personnel and services necessary to operate the Portfolio at an annual rate based upon the average aggregate daily net assets of all funds advised by the Adviser and its affiliates. The rate charged is 0.15 of 1% of the first $250 million of all such funds' average aggregate daily net assets, 0.125 of 1% on the next $250 million, 0.10 of 1% on the next $250 million and 0.075 of 1% of all such funds' average aggregate daily net assets in excess of $750 million, with a minimum annual fee per portfolio of $125,000 plus $30,000 for each additional class of such portfolio. Federated Administrative Services, Inc., an affiliate of the Adviser, provides similar services and personnel to the Fund at approximate cost. The administrative fee expense for the Fund's most recent fiscal year was 0.10 of 1% of its average aggregate daily net assets. The Portfolio estimates that its administrative fee expense for the current fiscal year will be 0.065 of 1% of its average aggregate daily net assets. The Portfolio has adopted a Rule 12b-1 distribution plan (the "Distribution Plan") pursuant to which the Portfolio will pay the distributor, Federated Securities Corp. ("FSC"), up to 0.25 of 1% of the average daily net asset value of each of the series of the Portfolio solely for services principally intended to result in the sale of shares subject to the Distribution Plan. The distributor may also select other entities to provide sales support services as agent for their clients. The Fund also has a Rule 12b-1 distribution plan which allows FSC, the distributor for the Fund, to select entities to provide sales and administrative services as agents for certain clients. Pursuant to the Fund's Rule 12b-1 distribution plan, FSC may pay up to 0.1 of 1% of the average daily net assets in respect of the Institutional Service Shares and up to 0.25 of 1% of the average daily net assets in respect of the Cash II Shares. Any such fees are reimbursed from the assets of the respective Fund Series. The Portfolio will not assume any liabilities of or make any reimbursements on account of the Fund's Rule 12b-1 Distribution Plan. The Portfolio has a Shareholder Services Plan under which it may make payments of up to 0.25 of 1% of the average daily net asset value of the Portfolio to obtain certain services for shareholders and the maintenance of shareholder accounts. Fees payable under the Shareholder Services Plan are in addition to, and separate from, fees payable under the Portfolio's Distribution Plan. The Fund does not currently have a Shareholder Services Plan in effect. The maximum total annual operating expenses for the Portfolio's Institutional Service Shares are expected to be 0.55% of the average daily net assets and would be 0.73% of the average daily net assets absent the voluntary waiver by the Adviser of the investment advisory fee. The maximum total annual operating expenses for the Portfolio's Cash II shares are expected to be 0.70% of the average daily net assets and would be 0.88% of the average daily net assets absent the voluntary waiver of a portion of the investment advisory fee. The maximum total annual operating expenses for the Fund's Institutional Service Shares are 0.54% of average daily net assets (0.71% absent the voluntary waiver of a portion of the investment advisory fee) and the maximum total annual operating expenses for the Fund's Cash II Shares are 0.71% of average daily net assets (0.88% absent the voluntary waiver of a portion of the investment advisory fee). PURCHASE AND REDEMPTION PROCEDURES The transfer agent and dividend disbursing agent for both the Portfolio and the Fund is Federated Services Company. Procedures for the purchase and redemption of Portfolio shares are identical to procedures applicable to the purchase and redemption of Fund shares although, in each case, there are slight differences between the Institutional Service Shares and the Cash II Shares. Such differences are consistent in each of the Portfolio and the Fund. Any questions about such procedures may be directed to, and assistance in effecting purchases or redemptions of Portfolio shares may be obtained from, FSC, the principal distributor for each of the Portfolio and the Fund, at 800-245-5000. Reference is made to the Prospectus of each of the Series dated June 30, 1994 and the Prospectus of each of the Fund Series dated December 31, 1993 for a complete description of the purchase and redemption procedures applicable to purchases and redemptions of Portfolio and Fund shares, respectively, each of which is incorporated herein by reference thereto. Set forth below is a brief listing of the significant purchase and redemption procedures of each of the Portfolio and the Fund. Purchases of Cash II Shares may be made by wire or by check. Purchases of Institutional Service Shares may be made by wire directly from the fund, by check from FSC or from a financial institution which has a sales agreement with FSC. The minimum initial investment in each of the Portfolio and the Fund is $25,000; however, an account may be opened with a smaller amount as long as the $25,000 minimum is reached within 90 days. All accounts maintained by an institutional investor will be combined together to determine whether such minimum investment requirement is met. The net asset value is calculated at 12:00 noon (Eastern Standard Time), 3:00 p.m. (Eastern Standard Time) and 4:00 p.m. (Eastern Standard Time), on each day on which the Portfolio and the Fund compute their net asset values. Purchase orders received by wire before 3:00 p.m. (Eastern Standard Time) begin earning dividends that day. Purchase orders received by check begin earning dividends on the day after the check is converted into federal funds, which normally occurs one day after receipt by State Street Bank and Trust Company, the custodian for both the Portfolio and the Fund. Redemptions of Cash II Shares may be made by telephone or by mailing a written request. Redemption of Institutional Service Shares may be made through a financial institution or by telephone if an authorization form to do so has previously been completed. Shares are redeemed at their net asset value next determined after the redemption request is received. Proceeds will be distributed by wire or check. TAX CONSEQUENCES As a condition to the Reorganization transactions, the Trust and the Fund will receive an opinion of counsel that the Reorganization will be considered a tax-free "reorganization" under applicable provisions of the Internal Revenue Code so that no gain or loss will be recognized by either the Trust or the Fund or their shareholders. The tax cost basis of the Portfolio shares received by Fund shareholders will be the same as the tax cost basis of their shares in the Fund. RISK FACTORS Investments in the Portfolio and the Fund are not insured and are not guaranteed by the United States government, the state of New York or any other entity. Investment in the Portfolio is subject to certain risks which are set forth in each of the Series' Prospectuses dated June 30, 1994 and the Combined Statement of Additional Information dated June 30, 1994 and incorporated herein by reference thereto. Briefly, these risks include, but are not limited to, the ability of the issuers of securities owned by the Portfolio to meet their obligations for the payment of principal and interest when due, actions by any governmental body of the state of New York which have adverse consequences on the ability of such issuers to do so and the non-diversified structure of the Portfolio. In addition, although in recent years the state of New York has achieved fiscal balance, in several previous years it encountered economic and budgetary difficulties which adversely affected the financial condition of the state and certain of its municipal issuers. Any major changes to the state's economy could cause such difficulties to worsen. Investment in the Fund carries identical risks, as more fully described in the Fund Series' Prospectuses dated December 31, 1993 and the Combined Statement of Additional Information dated December 31, 1993. INFORMATION ABOUT THE REORGANIZATION BACKGROUND AND REASONS FOR THE PROPOSED REORGANIZATION The Fund was established as a Massachusetts business trust in 1982 for the primary purpose of providing an investment vehicle which provides income which is exempt from federal regular income tax and New York personal income tax. Although the Board of Trustees of the Fund has been satisfied with the Fund's performance, it, and the Adviser to the Fund, believe that the management structure can be simplified and economies of scale possibly achieved by reorganizing the Fund as a portfolio of the Trust rather than remaining as a separate entity. Accordingly, the Adviser has recommended to the Trustees of the Trust that the Portfolio be organized for the purpose of acquiring the Fund's assets and thereby reorganizing the Fund as a portfolio of the Trust. The Adviser similarly recommended to the Trustees of the Fund that its assets be transferred to the Trust, on behalf of the Portfolio, in order to reorganize it as a separate portfolio of the Trust. In connection with this proposal, the Adviser emphasized the common advisory services provided by the Adviser to the Fund and the Trust, the similar investment objectives and policies of the Fund and the Portfolio and the administrative convenience and simplification of management achievable by operating the Fund as a portfolio of the Trust which has several money market portfolios, each of which is designed for investments in the securities of various individual states, their municipalities and political subdivisions. The Trust currently includes the following portfolios: Alabama Municipal Cash Trust, California Municipal Cash Trust, Connecticut Municipal Cash Trust, Massachusetts Municipal Cash Trust, Maryland Municipal Cash Trust, Minnesota Municipal Cash Trust, New Jersey Municipal Cash Trust, New York Municipal Cash Trust, North Carolina Municipal Cash Trust, Ohio Municipal Cash Trust, Pennsylvania Municipal Cash Trust and Virginia Municipal Cash Trust. Information concerning each of these portfolios may be obtained by contacting FSC, the principal distributor for each portfolio of the Trust, at the address set forth on the cover page of this Prospectus/Proxy Statement. The Fund's Board of Trustees concluded that the reorganization of the Fund as a portfolio of the Trust could provide for operating efficiencies and economies of scale. The Fund's Trustees also noted that Fund shareholders would continue to receive the same quality investment management services from the Adviser as shareholders of the Portfolio. The Fund's Board of Trustees, including a majority of the independent Trustees, additionally determined that participation in the Reorganization is in the best interests of the Fund and that the interests of the Fund shareholders would not be diluted as a result of its effecting the Reorganization. Based upon the foregoing considerations, and the fact that shareholders of the Fund will not suffer any adverse tax consequences as a result of the Reorganization, the Board of Trustees of the Fund unanimously voted to approve, and recommend to Fund shareholders the approval of, the Reorganization. The Trustees of the Trust, including the independent Trustees, have unanimously concluded that consummation of the Reorganization is in the best interests of the Trust and the shareholders of the Portfolio and that the interests of Portfolio shareholders would not be diluted as a result of effecting the Reorganization and have unanimously approved the Plan. DESCRIPTION OF THE PLAN OF REORGANIZATION The Plan provides that the Trust, on behalf of the Portfolio, will acquire all of the assets, and assume all of the liabilities, of the Fund in exchange for Portfolio shares to be distributed pro rata by the Fund to its shareholders in complete liquidation and dissolution of the Fund on or about September 2, 1994 (the "Closing Date"). Because both the Portfolio and the Fund seek to maintain a constant net asset value of $1.00 per share, it is expected that Fund shareholders will receive the same number of shares in the Portfolio as they held in the Fund immediately prior to the Closing Date. Shareholders of the Fund will receive shares of the Series which corresponds to the Fund Series shares owned by each such shareholder. Shareholders of the Fund will become shareholders of the Portfolio as of 4:00 p.m. (Eastern Standard Time) on the Closing Date and will begin accruing dividends on the next day. Shareholders of the Fund will earn their last dividend from the Fund on the Closing Date. Consummation of the Reorganization is subject to the conditions set forth in the Plan, including receipt of an opinion in form and substance satisfactory to the Fund and the Trust, on behalf of the Portfolio, as described under the caption "Federal Income Tax Consequences" below. The Plan may be terminated and the Reorganization may be abandoned at any time before or after approval by shareholders of the Fund prior to the Closing Date by either party if it believes that consummation of the Reorganization would not be in the best interests of its shareholders. The Adviser is responsible for the payment of all expenses of the Reorganization incurred by either party, whether or not the Reorganization is consummated. Such expenses include, but are not limited to, legal fees, registration fees, transfer taxes (if any), the fees of banks and transfer agents and the costs of preparing, printing, copying and mailing proxy solicitation materials to the Fund's shareholders and the costs of holding the Special Meeting of Shareholders. The foregoing description of the Plan entered into between the Trust, on behalf of the Portfolio, and the Fund is qualified in its entirety by the terms and provisions of the Plan, a copy of which is attached hereto as Exhibit A and incorporated herein by reference thereto. DESCRIPTION OF PORTFOLIO SHARES Shares of the Portfolio to be issued to shareholders of the Fund under the Plan will be fully paid and nonassessable when issued and transferable without restriction and will have no preemptive or conversion rights. Reference is hereby made to the Prospectus of the applicable Series dated June 30, 1994 provided herewith for additional information about Portfolio shares. FEDERAL INCOME TAX CONSEQUENCES As a condition to the Reorganization transactions, the Trust, on behalf of the Portfolio, and the Fund will receive an opinion from Dickstein, Shapiro & Morin, L.L.P., counsel to the Trust and the Fund, to the effect that, on the basis of the existing provisions of the Internal Revenue Code of 1986, as amended (the "Code"), current administrative rules and court decisions, for federal income tax purposes: (1) the Reorganization as set forth in the Plan will constitute a tax-free reorganization under section 368(a)(1)(F) of the Code; (2) no gain or loss will be recognized by the Portfolio upon its receipt of the Fund's assets in exchange for Portfolio shares; (3) the holding period and basis for the Fund's assets acquired by the Portfolio will be the same as the holding period and the basis to the Fund immediately prior to the Reorganization; (4) no gain or loss will be recognized by the Fund upon transfer of its assets to the Portfolio in exchange for Portfolio shares; (5) no gain or loss will be recognized by shareholders of the Fund upon exchange of their Fund shares for Portfolio shares; (6) the holding period of Portfolio shares received by shareholders of the Fund pursuant to the Plan will be the same as the holding period of Fund shares held immediately prior to the Reorganization, provided the Fund shares were held as capital assets on the date of the Reorganization; and (7) the basis of Portfolio shares received by shareholders of the Fund pursuant to the Plan will be the same as the basis of Fund shares held immediately prior to the Reorganization. COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS AND OBLIGATIONS Each of the Trust and the Fund is organized as a business trust pursuant to a Declaration of Trust under the laws of the Commonwealth of Massachusetts. The rights of shareholders of the Trust and shareholders of the Fund as set forth in the applicable Declaration of Trust and Bylaws are substantially identical. Set forth below is a brief summary of the significant rights of shareholders of the Portfolio and of the Fund. Neither the Portfolio nor the Fund are required to hold annual meetings of shareholders. Shareholder approval is necessary only for certain changes in operations or the election of trustees under certain circumstances. A special meeting of shareholders of either the Trust or the Fund for any purpose is required to be called by the Trustees upon the written request of the holders of at least 10% of the outstanding shares of the Trust or the Fund, as the case may be. Under certain circumstances, shareholders of the Portfolio may be held personally liable as partners under Massachusetts law for obligations of the Trust. To protect shareholders of the Portfolio, the Trust has filed legal documents with the Commonwealth of Massachusetts that expressly disclaim the liability of shareholders of the Portfolio for such acts or obligations of the Trust. These documents require that notice of this disclaimer be given in each agreement, obligation or instrument that the Trust or its trustees enter into or sign on behalf of the Trust. In the unlikely event a shareholder of the Portfolio is held personally liable for the Trust's obligations, the Trust is required to use its property to protect or compensate the shareholder. On request, the Trust will defend any claims made and pay any judgment against a shareholder of the Portfolio for any act or obligation of the Trust. Therefore, financial loss resulting from liability as a shareholder of the Portfolio will occur only if the Trust cannot meet its obligations to indemnify shareholders and pay judgments against them from the assets of the Trust. Shareholders of the Fund have the same potential liability under Massachusetts law. CAPITALIZATION The following table sets forth the capitalization of the Portfolio and the Fund as of June 29, 1994 and on a pro forma basis as of that date:
PRO FORMA PORTFOLIO FUND COMBINED --------- ------------ ------------ Net Assets........................................... $ 200 $342,620,866 $342,621,066 Price Per Share...................................... $1.00 $ 1.00 $ 1.00
INFORMATION ABOUT THE TRUST, THE PORTFOLIO AND THE FUND NEW YORK MUNICIPAL CASH TRUST, A PORTFOLIO OF FEDERATED MUNICIPAL TRUST Information about the Trust and the Portfolio is contained in the Series' current Prospectuses dated June 30, 1994, a copy of which is included herewith and incorporated by reference herein. Additional information about the Trust and the Portfolio is included in the Portfolio's Combined Statement of Additional Information dated June 30, 1994, which is incorporated herein by reference. Copies of the Combined Statement of Additional Information, which has been filed with the Securities and Exchange Commission ("SEC"), may be obtained without charge by contacting the Trust at 1-800-245-5000 or by writing the Trust at Federated Investors Tower, Pittsburgh, PA 15222-3779. The Trust, on behalf of the Portfolio, is subject to the informational requirements of the Securities Act of 1933 (the "1933 Act"), the Securities Exchange Act of 1934 (the "1934 Act") and the 1940 Act and in accordance therewith files reports and other information with the SEC. Reports, proxy and information statements and other information filed by the Trust, on behalf of the Portfolio, can be obtained by calling or writing the Trust and can also be inspected and copied by the public at the public reference facilities maintained by the SEC in Washington, D.C. located at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at certain of its regional offices located at Suite 1400, Northwestern Atrium Center, 500 West Madison Street, Chicago, IL 60621 and 13th Floor, Seven World Trade Center, New York, NY 10048. Copies of such material can be obtained at prescribed rates from the Public Reference Branch, Office of Consumer Affairs and Information Services, SEC, 450 Fifth Street, N.W., Washington, D.C. 20549. This Prospectus/Proxy Statement, which constitutes part of a Registration Statement filed by the Trust, on behalf of the Portfolio, with the SEC under the 1933 Act, omits certain of the information contained in the Registration Statement. Reference is hereby made to the Registration Statement and to the exhibits thereto for further information with respect to the Trust, the Portfolio and the shares offered hereby. Statements contained herein concerning the provisions of documents are necessarily summaries of such documents, and each such statement is qualified in its entirety by reference to the copy of the applicable documents filed with the SEC. NEW YORK MUNICIPAL CASH TRUST Information about the Fund is contained in each of the Fund Series' current Prospectuses dated December 31, 1993 and the Fund's Combined Statement of Additional Information dated December 31, 1993, which are incorporated herein by reference. Copies of such Prospectus and Combined Statement of Additional Information may be obtained without charge from the Trust by calling 1-800-245-5000 or by writing to the Trust at Federated Investors Tower, Pittsburgh, PA 15222-3779. The Fund is subject to the informational requirements of the 1933 Act, the 1934 Act and the 1940 Act and in accordance therewith files reports and other information with the SEC. Reports, proxy and information statements and other information filed by the Fund can be obtained by calling or writing the Fund and can also be inspected at the public reference facilities maintained by the SEC or obtained at prescribed rates at the addresses listed in the previous section. VOTING INFORMATION This Prospectus/Proxy Statement is furnished in connection with the solicitation by the Board of Trustees of the Fund of proxies for use at the Special Meeting of Shareholders (the "Meeting") to be held on August 26, 1994 and at any adjournment thereof. The proxy confers discretionary authority on the persons designated therein to vote on other business not currently contemplated which may properly come before the Meeting. A proxy, if properly executed, duly returned and not revoked, will be voted in accordance with the specifications thereon; if no instructions are given, such proxy will be voted in favor of the Plan. A shareholder may revoke a proxy at any time prior to use by filing with the Secretary of the Fund an instrument revoking the proxy, by submitting a proxy bearing a later date or by attending and voting at the Meeting. The cost of the solicitation, including the printing and mailing of proxy materials, will be borne by the Adviser. In addition to solicitations through the mails, proxies may be solicited by officers, employees and agents of the Fund and the Adviser at no additional cost to the Fund. Such solicitations may be by telephone. The Adviser will reimburse custodians, nominees and fiduciaries for the reasonable costs incurred by them in connection with forwarding solicitation materials to the beneficial owners of shares held of record by such persons. OUTSTANDING SHARES AND VOTING REQUIREMENTS The Board of Trustees of the Fund has fixed the close of business on June 29, 1994 as the record date for the determination of shareholders entitled to notice of and to vote at the Special Meeting of Shareholders and any adjournment thereof. As of the record date, there were 342,621,066 shares of the Fund outstanding including 221,417,296 Institutional Service Shares and 121,203,770 Cash II Shares. Each Fund share is entitled to one vote and fractional shares have proportionate voting rights. On the record date, Charles Schwab & Company, Inc. owned of record 101,338,401 shares, or 29.58%, Fiduciary Trust Company International owned of record 49,128,400 shares, or 14.34%, Fleet Securities Corporation owned of record 48,592,114 shares, or 14.19%, and Hare & Co. owned of record 31,245,919 shares, or 9.12% of the Fund's outstanding shares and each such shareholder will own the same number of shares after the consummation of the Reorganization if no further purchases or redemptions are made by such shareholder. On such date, no other person owned of record, or to the knowledge of the Adviser, beneficially owned, 5% or more of the Fund's outstanding shares. On the record date, the trustees and officers of the Fund as a group owned less than 1% of the Fund's outstanding shares. As of the record date, there were 200 shares of the Portfolio outstanding all of which were owned by the Adviser. Approval of the Plan requires the affirmative vote of the lesser of a majority of the Fund's outstanding shares or the affirmative vote of two-thirds of the shares voted at the meeting at which a quorum is present or represented by proxy. The votes of shareholders of the Portfolio are not being solicited since their approval is not required in order to effect the Reorganization. A majority of the outstanding shares of the Fund, represented in person or by proxy, will be required to constitute a quorum at the Special Meeting for the purpose of voting on the proposed Reorganization. For purposes of determining the presence of a quorum, shares represented by abstentions and "broker non-votes" will be counted as present, but not as votes cast, at the Special Meeting. Under the Fund's Declaration of Trust, the approval of any action submitted to shareholders is determined on the basis of a majority of votes entitled to be cast at the Special Meeting. Under the 1940 Act, however, matters subject to the requirements of the 1940 Act, including the Reorganization, are determined on the basis of a percentage of votes present at the Special Meeting, which would have the effect of treating abstentions and "broker non-votes" as if they were votes against the proposal. DISSENTER'S RIGHTS OF APPRAISAL Shareholders of the Fund objecting to the Reorganization have no appraisal rights under the Fund's Declaration of Trust or Massachusetts law. Under the Plan, if approved by Fund shareholders, each Fund shareholder will become the owner of Portfolio shares having a total net asset value equal to the total net asset value of his or her holdings in the Fund at the Closing Date. OTHER MATTERS Management of the Fund knows of no other matters that may properly be, or which are likely to be, brought before the meeting. However, if any other business shall properly come before the meeting, the persons named in the proxy intend to vote thereon in accordance with their best judgment. So far as management is presently informed, there is no litigation pending or threatened against the Trust. Whether or not shareholders expect to attend the meeting, all shareholders are urged to sign, fill in and return the enclosed proxy form promptly. EXHIBIT A AGREEMENT AND PLAN OF REORGANIZATION AGREEMENT AND PLAN OF REORGANIZATION dated May 6, 1994 (the "Agreement"), between FEDERATED MUNICIPAL TRUST, a Massachusetts business trust (the "Trust") on behalf of its portfolio NEW YORK MUNICIPAL CASH TRUST (hereinafter called the "Acquiring Fund") and NEW YORK MUNICIPAL CASH TRUST, a Massachusetts business trust (hereinafter called the "Acquired Fund"). This Agreement is intended to be and is adopted as a plan of reorganization and liquidation within the meaning of Section 368(a)(1)(F) of the United States Internal Revenue Code of 1986, as amended (the "Code"). The reorganization (the "Reorganization") will consist of the transfer of all of the assets of the Acquired Fund in exchange solely for shares of beneficial interest of the Acquiring Fund (the "Acquiring Fund Shares") and the distribution, after the Closing Date hereinafter referred to, of the Acquiring Fund Shares to the shareholders of the Acquired Fund in liquidation of the Acquired Fund as provided herein, all upon the terms and conditions hereinafter set forth in this Agreement. WHEREAS, the Acquired Fund and the Acquiring Fund are registered open-end management investment companies and the Acquired Fund owns securities in which the Acquiring Fund is permitted to invest; WHEREAS, both the Acquired Fund and the Acquiring Fund are authorized to issue their shares of beneficial interest; WHEREAS, the Board of Trustees, including a majority of the Trustees who are not "interested persons" (as defined under the Investment Company Act of 1940, as amended (the "1940 Act")), of the Acquiring Fund has determined that the exchange of all or substantially all of the assets of the Acquired Fund for Acquiring Fund Shares is in the best interests of the Acquiring Fund shareholders and that the interests of the existing shareholders of the Acquiring Fund would not be diluted as a result of this transaction; and WHEREAS, the Board of Trustees, including a majority of the Trustees who are not "interested persons" (as defined under the 1940 Act), of the Acquired Fund has determined that the exchange of all of the assets of the Acquired Fund for Acquiring Fund Shares is in the best interests of the Acquired Fund shareholders and that the interests of the existing shareholders of the Acquired Fund would not be diluted as a result of this transaction; NOW THEREFORE, in consideration of the premises and of the covenants and agreements hereinafter set forth, the parties agree as follows: 1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR THE ACQUIRING FUND SHARES AND LIQUIDATION OF THE ACQUIRED FUND. 1.1 Subject to the terms and conditions contained herein, the Acquired Fund agrees to assign, transfer and convey to the Acquiring Fund all of the assets of the Acquired Fund, including all securities and cash, and the Acquiring Fund agrees in exchange therefor (i) to deliver to the Acquired Fund the number of Acquiring Fund Shares, including fractional Acquiring Fund Shares, determined as set forth in paragraph 2.3. Such transaction shall take place at the closing (the "Closing") on the closing date (the "Closing Date") provided for in paragraph 3.1. In lieu of delivering certificates for the Acquiring Fund Shares, the Acquiring Fund shall credit the Acquiring Fund Shares to the Acquired Fund's account on the stock record books of the Acquiring Fund and shall deliver a confirmation thereof to the Acquired Fund. 1.2 The Acquired Fund will discharge all of its liabilities and obligations prior to the Closing Date. 1.3 Delivery of the assets of the Acquired Fund to be transferred shall be made on the Closing Date and shall be delivered to State Street Bank and Trust Company (hereinafter called "State Street"), Boston, Massachusetts, the Acquiring Fund's custodian (the "Custodian"), for the account of the Acquiring Fund, together with proper instructions and all necessary documents to transfer to the account of the Acquiring Fund, free and clear of all liens, encumbrances, rights, restrictions and claims. All cash delivered shall be in the form of currency and immediately available funds payable to the order of the Custodian for the account of the Acquiring Fund. 1.4 The Acquired Fund will pay or cause to be paid to the Acquiring Fund any dividends or interest received on or after the Closing Date with respect to assets transferred to the Acquiring Fund hereunder. The Acquired Fund will transfer to the Acquiring Fund any distributions, rights or other assets received by the Acquired Fund after the Closing Date as distributions on or with respect to the securities transferred. Such assets shall be deemed included in assets transferred to the Acquiring Fund on the Closing Date and shall not be separately valued. 1.5 As soon after the Closing Date as is conveniently practicable (the "Liquidation Date"), the Acquired Fund will liquidate and distribute pro rata to the Acquired Fund's shareholders of record, determined as of the close of business on the Closing Date (the "Acquired Fund Shareholders"), the Acquiring Fund Shares received by the Acquired Fund pursuant to paragraph 1.1. Such liquidation and distribution will be accomplished by the transfer of the Acquiring Fund Shares then credited to the account of the Acquired Fund on the books of the Acquiring Fund to open accounts on the share record books of the Acquiring Fund in the names of the Acquired Fund Shareholders and representing the respective pro rata number of the Acquiring Fund Shares due such shareholders. All issued and outstanding shares of the Acquired Fund will simultaneously be cancelled on the books of the Acquired Fund. Share certificates representing interests in the Acquired Fund will represent a number of Acquiring Fund Shares after the Closing Date as determined in accordance with Section 2.3. The Acquiring Fund shall not issue certificates representing the Acquiring Fund Shares in connection with such exchange. 1.6 Ownership of Acquiring Fund Shares will be shown on the books of the Acquiring Fund's transfer agent. Shares of the Acquiring Fund will be issued in the manner described in the Acquiring Fund's current prospectus and statement of additional information. 1.7 Any transfer taxes payable upon issuance of the Acquiring Fund Shares in a name other than the registered holder of the Acquired Fund shares on the books of the Acquired Fund as of that time shall, as a condition of such issuance and transfer, be paid by the person to whom such Acquiring Fund Shares are to be issued and transferred. 1.8 Any reporting responsibility of the Acquired Fund is and shall remain the responsibility of the Acquired Fund up to and including the Closing Date and such later dates, with respect to dissolution and deregistration of the Acquired Fund, on which the Acquired Fund is deregistered and dissolved. 1.9 The Acquired Fund shall be deregistered as an investment company under the 1940 Act and dissolved as a Massachusetts business trust promptly following the Closing Date and the making of all distributions pursuant to paragraph 1.5. 2. VALUATION. 2.1 The value of the Acquired Fund's net assets to be acquired by the Acquiring Fund hereunder shall be the value of such assets computed as of 4:00 p.m. (Eastern Standard Time) on the Closing Date (such time and date being hereinafter called the "Valuation Date"), using the valuation procedures set forth in the Acquiring Fund's then-current prospectus or statement of additional information. 2.2 The net asset value of an Acquiring Fund Share shall be the net asset value per share computed as of 4:00 p.m. (Eastern Standard Time) on the Valuation Date, using the valuation procedures set forth in the Acquiring Fund's then-current prospectus or statement of additional information. 2.3 The number of the Acquiring Fund Shares to be issued (including fractional shares, if any) in exchange for the Acquired Fund's net assets shall be determined by dividing the value of the net assets of the Acquired Fund determined using the same valuation procedures referred to in paragraph 2.1 by the net asset value of one Acquiring Fund Share determined in accordance with paragraph 2.2. 2.4 All computations of value shall be made in accordance with the regular practices of the Acquiring Fund. 3. CLOSING AND CLOSING DATE. 3.1 The Closing Date shall be September 2, 1994 or such later date as the parties may mutually agree. All acts taking place at the Closing Date shall be deemed to take place simultaneously as of the close of business on the Closing Date unless otherwise provided. The Closing shall be held at 4:00 p.m. (Eastern Standard Time) at the offices of the Acquiring Fund, Federated Investors Tower, Pittsburgh, PA 15222-3779, or such other time and/or place as the parties may mutually agree. 3.2 If on the Valuation Date (a) the primary trading market for portfolio securities of the Acquiring Fund or the Acquired Fund shall be closed to trading or trading thereon shall be restricted; or (b) trading or the reporting of trading shall be disrupted so that accurate appraisal of the value of the net assets of the Acquiring Fund or the Acquired Fund is impracticable, the Closing Date shall be postponed until the first business day after the day when trading shall have been fully resumed and reporting shall have been restored. 3.3 Federated Services Company, as transfer agent for each of the Acquired Fund and Acquiring Fund, shall deliver at the Closing a certificate of an authorized officer stating that its records contain the names and addresses of the Acquired Fund Shareholders and the number and percentage ownership of outstanding shares owned by each such shareholder immediately prior to the Closing. The Acquiring Fund shall issue and deliver a confirmation evidencing the Acquiring Fund Shares to be credited on the Closing Date to the Secretary of the Acquired Fund, or provide evidence satisfactory to the Acquired Fund that such Acquiring Fund Shares have been credited to the Acquired Fund's account on the books of the Acquiring Fund. At the Closing, each party shall deliver to the other such bills of sale, checks, assignments, assumption agreements, share certificates, if any, receipts or other documents as such other party or its counsel may reasonably request. 4. REPRESENTATIONS AND WARRANTIES. 4.1 The Acquired Fund represents and warrants to the Acquiring Fund as follows: (a) The Acquired Fund is a business trust duly organized, validly existing and in good standing under the laws of the Commonwealth of Massachusetts and has power to own all of its properties and assets and to carry out this Agreement. (b) The Acquired Fund is registered under the 1940 Act, as an open-end, non-diversified, management investment company, and such registration has not been revoked or rescinded and is in full force and effect. (c) The Acquired Fund is not, and the execution, delivery and performance of this Agreement will not result, in material violation of its Declaration of Trust or By-Laws or of any agreement, indenture, instrument, contract, lease or other undertaking to which the Acquired Fund is a party or by which it is bound. (d) The Acquired Fund has no material contracts or other commitments outstanding (other than this Agreement) which will result in liability to it after the Closing Date. (e) No litigation or administrative proceeding or investigation of or before any court or governmental body is currently pending or to its knowledge threatened against the Acquired Fund or any of its properties or assets which, if adversely determined, would materially and adversely affect its financial condition or the conduct of its business. The Acquired Fund knows of no facts which might form the basis for the institution of such proceedings, and is not a party to or subject to the provisions of any order, decree or judgment of any court or governmental body which materially and adversely affects its business or its ability to consummate the transactions herein contemplated. (f) The current prospectus and statement of additional information of the Acquired Fund conform in all material respects to the applicable requirements of the Securities Act of 1933, as amended (the "1933 Act"), and the 1940 Act and the rules and regulations of the Securities and Exchange Commission (the "Commission") thereunder and do not include any untrue statement of a material fact or omit to state any material fact required to be stated therein as necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (g) The Statements of Assets and Liabilities of the Acquired Fund at October 31, 1992 and 1993 have been audited by Deloitte & Touche, independent auditors, and have been prepared in accordance with generally accepted accounting principles, consistently applied, and such statements (copies of which have been furnished to the Acquiring Fund) fairly reflect the financial condition of the Acquired Fund as of such dates, and there are no known contingent liabilities of the Acquired Fund as of such dates not disclosed therein. (h) Since October 31, 1993, there has not been any material adverse change in the Acquired Fund's financial condition, assets, liabilities or business other than changes occurring in the ordinary course of business, or any incurrence by the Acquired Fund of indebtedness maturing more than one year from the date such indebtedness was incurred, except as otherwise disclosed to and accepted by the Acquiring Fund. (i) At the Closing Date, all Federal and other tax returns and reports of the Acquired Fund required by law to have been filed by such dates shall have been filed, and all Federal and other taxes shall have been paid so far as due, or provision shall have been made for the payment thereof, and to the best of the Acquired Fund's knowledge no such return is currently under audit and no assessment has been asserted with respect to such returns. (j) For each fiscal year of its operation, the Acquired Fund has met the requirements of Subchapter M of the Code for qualification and treatment as a regulated investment company. (k) All issued and outstanding shares of the Acquired Fund are, and at the Closing Date will be, duly and validly issued and outstanding, fully paid and non-assessable. All of the issued and outstanding shares of the Acquired Fund will, at the time of the Closing, be held by the persons and in the amounts set forth in the records of the transfer agent as provided in paragraph 3.3. The Acquired Fund does not have outstanding any options, warrants or other rights to subscribe for or purchase any of the Acquired Fund shares, nor is there outstanding any security convertible into any of the Acquired Fund Shares. (l) On the Closing Date, the Acquired Fund will have full right, power and authority to sell, assign, transfer and deliver the assets to be transferred by it hereunder. (m) The execution, delivery and performance of this Agreement will have been duly authorized prior to the Closing Date by all necessary action on the part of the Acquired Fund's Trustees and, subject to the approval of the Acquired Fund Shareholders, this Agreement will constitute the valid and legally binding obligation of the Acquired Fund enforceable in accordance with its terms, subject to the effect of bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws relating to or affecting creditors' rights generally and court decisions with respect thereto, and to general principles of equity and the discretion of the court (regardless of whether the enforceability is considered in a proceeding in equity or at law). (n) The prospectus/proxy statement of the Acquired Fund (the "Prospectus/Proxy Statement") to be included in the Registration Statement referred to in paragraph 5.5 (other than information therein that relates to the Acquiring Fund) will, on the effective date of the Registration Statement and on the Closing Date, not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which such statements were made, not misleading. (o) The Acquired Fund has entered into an agreement under which Federated Management will assume the expense of the reorganization including accountants' fees, legal fees, registration fees, transfer taxes (if any), the fees of banks and transfer agents and the costs of preparing, printing, copying and mailing proxy solicitation materials to the Acquiring Fund's shareholders and the costs of holding the Special Meeting of Shareholders. 4.2 The Acquiring Fund represents and warrants to the Acquired Fund as follows: (a) The Trust is a business trust duly organized, validly existing and in good standing under the laws of the Commonwealth of Massachusetts and the Acquiring Fund has the power to carry on its business as it is now being conducted and to carry out this Agreement. (b) The Trust is registered under the 1940 Act as an open-end, non-diversified, management investment company, and such registration has not been revoked or rescinded and is in full force and effect. (c) The current prospectus and statement of additional information of the Acquiring Fund conform in all material respectus to the applicable requirements of the 1933 Act and the 1940 Act and the rules and regulations of the Commission thereunder and do not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (d) The Acquiring Fund is not, and the execution, delivery and performance of this Agreement will not result, in material violation of the Trust's Declaration of Trust or By-Laws or of any agreement, indenture, instrument, contract, lease or other undertaking to which the Acquiring Fund is a party or by which it is bound. (e) No litigation or administrative proceeding or investigation of or before any court or governmental body is currently pending or to its knowledge threatened against the Acquiring Fund or any of its properties or assets which, if adversely determined, would materially and adversely affect its financial condition or the conduct of its business. The Acquiring Fund knows of no facts which might form the basis for the institution of such proceedings, and is not a party to or subject to the provisions of any order, decree or judgment of any court or governmental body which materially and adversely affects its business or its ability to consummate the transactions contemplated herein. (f) The Statement of Assets and Liabilities of the Acquiring Fund at May 24, 1994, have been audited by Arthur Andersen, independent auditors, and have been prepared in accordance with generally accepted accounting principles, and such statements (copies of which have been furnished to the Acquired Fund) fairly reflect the financial condition of the Acquiring Fund as of such date. (g) Since May 24, 1994, there has not been any material adverse change in the Acquiring Fund's financial condition, assets, liabilities or business other than changes occurring in the ordinary course of business, or any incurrence by the Acquiring Fund of any indebtedness, except as otherwise disclosed to and accepted by the Acquired Fund. (h) At the Closing Date, all Federal and other tax returns and reports of the Acquiring Fund required by law then to be filed shall have been filed, and all Federal and other taxes shown as due on said returns and reports shall have been paid or provision shall have been made for the payment thereof. (i) For each fiscal year of its operation, the Acquiring Fund will meet the requirements of Subchapter M of the Code for qualification and treatment as a regulated investment company. (j) All issued and outstanding shares of the Acquiring Fund are, and at the Closing Date will be, duly and validly issued and outstanding, fully paid and non-assessable. The Acquiring Fund does not have outstanding any options, warrants or other right to subscribe for or purchase any of the Acquiring Fund Shares, nor is there outstanding any security convertible into any Acquiring Fund Shares. (k) The execution, delivery and performance of this Agreement will have been duly authorized prior to the Closing Date by all necessary action, if any, on the part of the Acquiring Fund's Trustees, and this Agreement will constitute the valid and legally binding obligation of the Acquiring Fund enforceable in accordance with its terms, subject to the effect of bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws relating to or affecting creditors' rights generally and court decisions with respect thereto, and to general principles of equity and the discretion of the court (regardless of whether the enforceability is considered in a proceeding in equity or at law). (l) The Prospectus/Proxy Statement to be included in the Registration Statement (only insofar as it relates to the Acquiring Fund) will, on the effective date of the Registration Statement and on the Closing Date, not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which such statements were made, not misleading. (m) The Acquiring Fund has entered into an agreement under which Federated Management will assume the expenses of the reorganization including accountants' fees, legal fees, registration fees, transfer taxes (if any), the fees of banks and transfer agents and the costs of preparing, printing, copying and mailing proxy solicitation materials to the Acquired Fund's shareholders and the costs of holding the Special Meeting of Shareholders. 5. COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND. 5.1 The Acquiring Fund and the Acquired Fund each will operate its business in the ordinary course between the date hereof and the Closing Date, it being understood that such ordinary course of business will include customary dividends and distributions. 5.2 The Acquired Fund will call a meeting of the Acquired Fund Shareholders to consider and act upon this Agreement and to take all other action necessary to obtain approval of the transactions contemplated herein. 5.3 Subject to the provisions of this Agreement, the Acquiring Fund and the Acquired Fund will each take, or cause to be taken, all action, and do or cause to be done, all things reasonably necessary, proper or advisable to consummate and make effective the transactions contemplated by this Agreement. 5.4 As promptly as practicable, but in any case within sixty days after the Closing Date, the Acquired Fund shall furnish the Acquiring Fund, in such form as is reasonably satisfactory to the Acquiring Fund, a statement of the earnings and profits of the Acquired Fund for Federal income tax purposes which will be carried over to the Acquiring Fund as a result of Section 381 of the Code and which will be certified by the Acquired Fund's President and its Treasurer. 5.5 The Acquired Fund will provide the Acquiring Fund with information reasonably necessary for the preparation of a prospectus (the "Prospectus") which will include the Proxy Statement, referred to in paragraph 4.1(n), all to be included in a Registration Statement on Form N-14 of the Acquiring Fund (the "Registration Statement"), in compliance with the 1933 Act, the Securities Exchange Act of 1934, as amended, and the 1940 Act in connection with the meeting of the Acquired Fund Shareholders to consider approval of this Agreement and the transactions contemplated herein. 5.6 The Acquiring Fund agrees to use all reasonable efforts to obtain the approvals and authorizations required by the 1933 Act, the 1940 Act and such of the state Blue Sky or securities laws as it may deem appropriate in order to continue its operations after the Closing Date. 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND. The obligations of the Acquiring Fund to complete the transactions provided for herein shall be subject, at its election, to the performance by the Acquired Fund of all the obligations to be performed by it hereunder on or before the Closing Date and, in addition thereto, the following conditions: 6.1 All representations and warranties of the Acquired Fund contained in this Agreement shall be true and correct in all material respects as of the date hereof and, except as they may be affected by the transactions contemplated by this Agreement, as of the Closing Date with the same force and effect as if made on and as of the Closing Date. 6.2 The Acquired Fund shall have delivered to the Acquiring Fund a statement of the Acquired Fund's assets, together with a list of the Acquired Fund's portfolio securities showing the tax costs of such securities by lot and the holding periods of such securities, as of the Closing Date, certified by the Treasurer of the Acquired Fund. 6.3 The Acquired Fund shall have delivered to the Acquiring Fund on the Closing Date a certificate executed in its name by its President or Vice President and its Treasurer, in form and substance satisfactory to the Acquiring Fund, to the effect that the representations and warranties of the Acquired Fund made in this Agreement are true and correct at and as of the Closing Date, except as they may be affected by the transactions contemplated by this Agreement, and as to such other matters as the Acquiring Fund shall reasonably request. 7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND. The obligations of the Acquired Fund to consummate the transactions provided herein shall be subject, at its election, to the performance by the Acquiring Fund of all the obligations to be performed by it hereunder on or before the Closing Date and, in addition thereto, the following conditions: 7.1 All representations and warranties of the Acquiring Fund contained in this Agreement shall be true and correct in all material respects as of the date hereof and, except as they may be affected by the transactions contemplated by this Agreement, as of the Closing Date with the same force and effect as if made on and as of the Closing Date. 7.2 The Acquiring Fund shall have delivered to the Acquired Fund on the Closing Date a certificate executed in its name by its President or Vice President and its Treasurer, in form and substance reasonably satisfactory to the Acquired Fund, to the effect that the representations and warranties of the Acquiring Fund made in this Agreement are true and correct at and as of the Closing Date, except as they may be affected by the transactions contemplated by this Agreement, and as to such other matters as the Acquired Fund shall reasonably request. 8. FURTHER CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE ACQUIRING FUND AND THE ACQUIRED FUND. If any of the conditions set forth below do not exist on or before the Closing Date with respect to the Acquired Fund or the Acquiring Fund, the other party to this Agreement shall, at its option, not be required to consummate the transactions contemplated by this Agreement. 8.1 The Agreement and the transactions contemplated herein shall have been approved by the requisite vote of the holders of the outstanding shares of the Acquired Fund in accordance with the provisions of the Acquired Fund's Declaration of Trust. 8.2 On the Closing Date no action, suit or other proceeding shall be pending before any court or governmental agency in which it is sought to restrain or prohibit, or obtain damages or other relief in connection with, this Agreement or the transactions contemplated herein. 8.3 All consents of other parties and all other consents, orders and permits of Federal, state and local regulatory authorities (including those of the Commission and of state Blue Sky and securities authorities) deemed necessary by the Acquiring Fund or the Acquired Fund to permit consummation, in all material respects, of the transactions contemplated hereby shall have been obtained, except where failure to obtain any such consent, order or permit would not involve a risk of a material adverse effect on the assets or properties of the Acquiring Fund or the Acquired Fund, provided that either party hereto may for itself waive any of such conditions. 8.4 The Registration Statement shall have become effective under the 1933 Act and no stop orders suspending the effectiveness thereof shall have been issued and, to the best knowledge of the parties hereto, no investigation or proceeding for that purpose shall have been instituted or be pending, threatened or contemplated under the 1933 Act. 8.5 The Acquiring Fund and the Acquired Fund shall have received an opinion of Dickstein, Shapiro & Morin, L.L.P. substantially to the effect that for Federal income tax purposes: (a) The transfer of all or substantially all of the Acquired Fund assets in exchange for the Acquiring Fund Shares and the distribution of the Acquiring Fund Shares to the shareholders of the Acquired Fund in liquidation of the Acquired Fund will constitute a "reorganization" within the meaning of Section 368(a)(1)(F) of the Code; (b) No gain or loss will be recognized by the Acquiring Fund upon the receipt of the assets of the Acquired Fund solely in exchange for the Acquiring Fund Shares; (c) No gain or loss will be recognized by the Acquired Fund upon the transfer of the Acquired Fund assets to the Acquiring Fund in exchange for the Acquiring Fund Shares or upon the distribution (whether actual or constructive) of the Acquiring Fund Shares to Acquired Fund Shareholders in exchange for their shares of the Acquired Fund; (d) No gain or loss will be recognized by the Acquired Fund Shareholders upon the exchange of their Acquired Fund shares for the Acquiring Fund Shares; (e) The tax basis of the Acquired Fund assets acquired by the Acquiring Fund will be the same as the tax basis of such assets to the Acquired Fund immediately prior to the Reorganization; (f) The tax basis of the Acquiring Fund Shares received by each of the Acquired Fund Shareholders pursuant to the Reorganization will be the same as the tax basis of the Acquired Fund shares held by such shareholder immediately prior to the Reorganization; (g) The holding period of the assets of the Acquired Fund in the hands of the Acquiring Fund will include the period during which those assets were held by the Acquired Fund; and (h) The holding period of the Acquiring Fund Shares to be received by each Acquired Fund Shareholder will include the period during which the Acquired Fund shares exchanged therefor were held by such shareholder (provided the Acquired Fund shares were held as capital assets on the date of the Reorganization). 9. TERMINATION OF AGREEMENT. 9.1 This Agreement and the transactions contemplated hereby may be terminated and abandoned by resolution of the Board of Trustees of the Acquired Fund or the Acquiring Fund at any time prior to the Closing Date (and notwithstanding any vote of the Board of Trustees of the Acquired Fund) if circumstances should develop that, in the opinion of either of the parties' Board of Trustees, make proceeding with the Agreement inadvisable. 9.2 If this Agreement is terminated and the exchange contemplated hereby is abandoned pursuant to the provisions of this Section 9, this Agreement shall become void and have no effect, without any liability on the part of any party hereto or the trustees, officers or shareholders of the Acquiring Fund or of the Acquired Fund, in respect of this Agreement. 10. WAIVER. At any time prior to the Closing Date, any of the foregoing conditions may be waived by the Board of Trustees of the Acquiring Fund or of the Acquired Fund, if, in the judgment of either, such waiver will not have a material adverse effect on the benefits intended under this Agreement to the shareholders of the Acquiring Fund or of the Acquired Fund, as the case may be. 11. MISCELLANEOUS. 11.1 None of the representations and warranties included or provided for herein shall survive consummation of the transactions contemplated hereby. 11.2 This Agreement contains the entire agreement and understanding between the parties hereto with respect to the subject matter hereof, and merges and supersedes all prior discussions, agreements, and understandings of every kind and nature between them relating to the subject matter hereof. Neither party shall be bound by any condition, definition, warranty or representation, other than as set forth or provided in this Agreement or as may be set forth in a later writing signed by the party to be bound thereby. 11.3 This Agreement shall be governed and construed in accordance with the internal laws of the Commonwealth of Massachusetts, without giving effect to principles of conflict of laws. 11.4 This Agreement may be executed in any number of counterparts, each of which, when executed and delivered, shall be deemed to be an original. 11.5 This Agreement shall bind and inure to the benefit of the parties hereto and their respective successors and assigns, but no assignment or transfer hereof of any rights or obligations hereunder shall be made by any party without the written consent of the other party. Nothing herein expressed or implied is intended or shall be construed to confer upon or give any person, firm or corporation, other than the parties hereto and their respective successors and assigns, any rights or remedies under or by reason of this Agreement. 11.6 The Acquired Fund is hereby expressly put on notice of the limitation of liability as set forth in Article XI of the Declaration of Trust of the Acquiring Fund and agrees that the obligations assumed by the Acquiring Fund pursuant to this Agreement shall be limited in any case to the Acquiring Fund and its assets and the Acquired Fund shall not seek satisfaction of any such obligation from the shareholders of the Acquiring Fund, the trustees, officers, employees or agents of the Acquiring Fund or any of them. 11.7 The Acquiring Fund is hereby expressly put on notice of the limitation of liability as set forth in Article XI of the Declaration of Trust of the Acquired Fund and agrees that the obligations assumed by the Acquired Fund pursuant to this Agreement shall be limited in any case to the Acquired Fund and its assets and the Acquiring Fund shall not seek satisfaction of any such obligation from the shareholders of the Acquired Fund, the trustees, officers, employees or agents of the Acquired Fund or any of them. IN WITNESS WHEREOF, the Acquired Fund and the Acquiring Fund have caused this Agreement and Plan of Reorganization to be executed and attested on its behalf by its duly authorized representatives as of the date first above written. Attest: ........................................... Assistant Secretary Acquiring Fund: NEW YORK MUNICIPAL CASH TRUST, By: ....................................... Name: .................................... Title: ..................................... Attest: ........................................... Assistant Secretary Acquiring Fund: FEDERATED MUNICIPAL TRUST, on behalf of its Portfolio, New York Municipal Cash Trust By: ....................................... Name: .................................... Title: ..................................... FEDERATED SECURITIES CORP. (LOGO) - --------------------------------------------- Distributor A subsidiary of FEDERATED INVESTORS FEDERATED INVESTORS TOWER PITTSBURGH, PA 15222-3779 CMR405117 (6/94) G00319-04 (6/94) COMBINED STATEMENT OF ADDITIONAL INFORMATION CASH II SHARES INSTITUTIONAL SERVICE SHARES JUNE 30, 1994 ACQUISITION OF THE ASSETS OF NEW YORK MUNICIPAL CASH TRUST FEDERATED INVESTORS TOWER PITTSBURGH, PENNSYLVANIA 15222-3779 TELEPHONE NUMBER: 1-800-245-5000 BY AND IN EXCHANGE FOR SHARES OF NEW YORK MUNICIPAL CASH TRUST, A PORTFOLIO OF FEDERATED MUNICIPAL TRUST FEDERATED INVESTORS TOWER PITTSBURGH, PENNSYLVANIA 15222-3779 TELEPHONE NUMBER: 1-800-245-5000 This Combined Statement of Additional Information dated June 30, 1994 is not a prospectus. A Prospectus/Proxy Statement dated June 30, 1994 for each of Cash II Shares and Institutional Service Shares related to the above-referenced matter may be obtained from Federated Municipal Trust, on behalf of its portfolio, New York Municipal Cash Trust, Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779. This Combined Statement of Additional Information should be read in conjunction with each such Prospectus/Proxy Statements. TABLE OF CONTENTS 1. Combined Statement of Additional Information of New York Municipal Cash Trust, a portfolio of Federated Municipal Trust, dated June 30, 1994............................................... 2. Combined Statement of Additional Information of New York Municipal Cash Trust, dated December 31, 1993..................................................................................... 3. Financial Statements of New York Municipal Cash Trust -- Cash II Shares, a portfolio of Federated Municipal Trust, dated May 24, 1994................................................ 4. Financial Statement of New York Municipal Trust -- Institutional Service Shares, a portfolio of Federated Municipal Trust, dated May 24, 1994............................................. 5. Financial Statement of New York Municipal Cash Trust -- Cash II Shares dated October 31, 1993......................................................................................... 6. Financial Statement of New York Municipal Cash Trust -- Institutional Service Shares dated October 31, 1993.............................................................................
The Combined Statement of Additional Information of New York Municipal Cash Trust (the "Portfolio") dated June 30, 1994, a portfolio of Federated Municipal Trust (the "Trust"), is incorporated herein by reference to Post-Effective Amendment No. 25 to the Trust's Registration Statement on Form N-1A (File No. 33-31259) which was filed with the Securities and Exchange Commission on or about March 31, 1994. The Combined Statement of Additional Information of New York Municipal Cash Trust (the "Fund") dated December 31, 1993 is incorporated herein by reference to Post-Effective Amendment No. 21 to the Fund's Registration Statement on Form N-1A (File No. 2-76662) which was filed with the Securities and Exchange Commission on or about December 27, 1993. A copy may be obtained from the Trust at Federated Investors Tower, Pittsburgh, PA 15222-3279. Telephone Number: 1-800-245-5000. The audited financial statements of the Portfolio dated May 24, 1994 are incorporated herein by reference to the Prospectus of Cash II Shares and the Prospectus of Institutional Service Shares each dated June 30, 1994 which were filed with the Securities and Exchange Commission in Post-Effective Amendment No. 28 to the Trust's Registration Statement on Form N-1A (File No. 33-31259) on or about June 28, 1994.1* The audited financial statements of the Fund dated October 31, 1993 are incorporated herein by reference to the Prospectus of Cash II Shares and the Prospectus of Institutional Service Shares each dated December 31, 1993 which were filed with the Securities and Exchange Commission in Post-Effective Amendment No. 21 to the Fund's Registration Statement on Form N-1A (File No. 33-26846) on or about December 27, 1993. Pro forma financial statements are not included herein as the total capitalization of the Portfolio is insignificant and, accordingly, such pro forma statements would not materially differ from the financial statements of the Fund. The Fund is considered to be the accounting survivor of the transaction, therefore, the performance history of the Fund prior to the Reorganization will be useful for historical comparative purposes. Shareholders may obtain without charge a copy of the most recent annual and semi-annual report of the Fund which contain, respectively, audited and unaudited financial statements of the Fund by writing the address shown above or calling the Trust at 1-800-245-5000. - --------------- 1* To be filed by amendment. FEDERATED SECURITIES CORP. (LOGO) - --------------------------------------------- Distributor A subsidiary of FEDERATED INVESTORS FEDERATED INVESTORS TOWER PITTSBURGH, PA 15222-3779 G00319-05-B (6/94) NEW YORK MUNICIPAL CASH TRUST CASH II SHARES FEDERATED INVESTORS TOWER PITTSBURGH PA 15222-3779 NEW YORK MUNICIPAL CASH TRUST CUSIP NO. 649606209 FOR SPECIAL MEETING OF SHAREHOLDERS AUGUST 26, 1994 KNOW ALL PERSONS BY THESE PRESENTS that the undersigned shareholders of New York Municipal Cash Trust hereby appoint Robert C. Rosselot, Carol Kayworth, Mason Douglas and Patricia Conner, or any of them true and lawful attorneys, with power of substitution of each, to vote all shares of New York Municipal Cash Trust, which the undersigned is entitled to vote, at the Special Meeting of Shareholders to be held on August 26, 1994, at Federated Investors Tower, Pittsburgh, Pennsylvania, at 2:00 p.m. (Eastern Time) and at any adjournment thereof. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES. The attorneys named will vote the shares represented by this proxy in accordance with the choices made on this card. IF NO CHOICE IS INDICATED AS TO ANY ITEM, THIS PROXY WILL BE VOTED AFFIRMATIVELY ON THAT MATTER. Discretionary authority is hereby conferred as to all other matters as may properly come before the Special Meeting. PROPOSAL 1. TO APPROVE OR DISAPPROVE AN AGREEMENT AND PLAN OF REORGANIZATION. PLEASE RETURN BOTTOM PORTION WITH YOUR VOTE IN THE ENCLOSED ENVELOPE AND RETAIN THE TOP PORTION. NEW YORK MUNICIPAL CASH TRUST PROXY VOTING MAIL-IN STUB RECORD DATE SHARES PROPOSAL 1: TO APPROVE OR DISAPPROVE AN AGREEMENT AND PLAN OF REORGANIZATION o FOR the Agreement and Plan of Reorganization o AGAINST the Agreement and Plan of Reorganization o ABSTAIN Please sign EXACTLY as your name(s) appear above. When signing as attorney, executor, administrator, guardian, trustee, custodian, etc., please give your full title as such. If a corporation or partnership, please sign the full name by an authorized officer or partner. If stock is owned jointly, all owners should sign. _ ___________________________________________________ _____________________________________________________ _____________________________________________________ Signature(s) of Shareholder(s) Date:___________ ____________________________________ NEW YORK MUNICIPAL CASH TRUST INSTITUTIONAL SERVICE SHARES FEDERATED INVESTORS TOWER PITTSBURGH PA 15222-3779 NEW YORK MUNICIPAL CASH TRUST CUSIP NO. 649606100 FOR SPECIAL MEETING OF SHAREHOLDERS AUGUST 26, 1994 KNOW ALL PERSONS BY THESE PRESENTS that the undersigned shareholders of New York Municipal Cash Trust hereby appoint Robert C. Rosselot, Carol Kayworth, Mason Douglas and Patricia Conner, or any of them true and lawful attorneys, with power of substitution of each, to vote all shares of New York Municipal Cash Trust, which the undersigned is entitled to vote, at the Special Meeting of Shareholders to be held on August 26, 1994, at Federated Investors Tower, Pittsburgh, Pennsylvania, at 2:00 p.m. (Eastern Time) and at any adjournment thereof. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES. The attorneys named will vote the shares represented by this proxy in accordance with the choices made on this card. IF NO CHOICE IS INDICATED AS TO ANY ITEM, THIS PROXY WILL BE VOTED AFFIRMATIVELY ON THAT MATTER. Discretionary authority is hereby conferred as to all other matters as may properly come before the Special Meeting. PROPOSAL 1. TO APPROVE OR DISAPPROVE AN AGREEMENT AND PLAN OF REORGANIZATION. PLEASE RETURN BOTTOM PORTION WITH YOUR VOTE IN THE ENCLOSED ENVELOPE AND RETAIN THE TOP PORTION. NEW YORK MUNICIPAL CASH TRUST PROXY VOTING MAIL-IN STUB RECORD DATE SHARES PROPOSAL 1: TO APPROVE OR DISAPPROVE AN AGREEMENT AND PLAN OF REORGANIZATION o FOR the Agreement and Plan of Reorganization o AGAINST the Agreement and Plan of Reorganization o ABSTAIN Please sign EXACTLY as your name(s) appear above. When signing as attorney, executor, administrator, guardian, trustee, custodian, etc., please give your full title as such. If a corporation or partnership, please sign the full name by an authorized officer or partner. If stock is owned jointly, all owners should sign. _ ___________________________________________________ _____________________________________________________ _____________________________________________________ Signature(s) of Shareholder(s) Date:___________ ____________________________________ -----END PRIVACY-ENHANCED MESSAGE-----