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 Section 240.14a-11(c) or Section
240.14a-12
Bartlett Capital Trust
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(Name of Registrant as Specified in its Charter)
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(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)(1) 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 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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BARTLETT EUROPE FUND
BARTLETT BASIC VALUE FUND
BARTLETT FINANCIAL SERVICES FUND
(EACH A SERIES OF BARTLETT CAPITAL TRUST)
July [29,] 1999
Dear Bartlett Fund Shareholder:
The attached proxy materials seek your approval to convert each fund
listed above (each a "Bartlett Fund") from a separate series of Bartlett Capital
Trust to a series of either Legg Mason Global Trust, Inc. or Legg Mason
Investors Trust, Inc. Approval of the conversion of a Bartlett Fund will be
voted on only by its shareholders, separately from the votes on approval of the
other Bartlett Funds' conversions. The conversions are not expected to adversely
affect any of the Bartlett Funds, the same personnel responsible for portfolio
management will be in place following the conversions, costs and expenses will
be the same and possibly lower over time, and shareholder services will continue
with additional benefits likely.
YOUR BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE PROPOSAL. The conversion
of each Bartlett Fund will allow the Bartlett Funds access to a larger marketing
infrastructure and resources. The attached proxy materials provide more
information about each of the proposed conversions.
YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN. Voting your
shares early will permit the Bartlett Funds to avoid costly follow-up mail and
telephone solicitation. After reviewing the attached materials, please complete,
date and sign your proxy card and mail it in the enclosed return envelope today.
As an alternative to using the paper proxy card to vote, you may vote by
telephone, by facsimile, through the Internet or in person.
Very truly yours,
Edward A. Taber, III
President
Bartlett Capital Trust
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BARTLETT EUROPE FUND
BARTLETT BASIC VALUE FUND
BARTLETT FINANCIAL SERVICES FUND
(EACH A SERIES OF BARTLETT CAPITAL TRUST)
NOTICE OF
SPECIAL MEETING OF SHAREHOLDERS
SEPTEMBER 23, 1999
To The Shareholders:
A special meeting of shareholders of each fund listed above (collectively,
"Bartlett Funds"), each a separate series of Bartlett Capital Trust, will be
held on September 23, 1999, at 10:00 a.m., Eastern time, at the Bartlett Funds'
offices at 100 Light Street, Baltimore, Maryland 21202, for the following
purposes:
(1) To approve an Agreement and Plan of Conversion and Termination
providing for the conversion of each of Bartlett Europe Fund, Bartlett
Basic Value Fund and Bartlett Financial Services Fund from a series of
Bartlett Capital Trust to Legg Mason Europe Fund (a newly organized series
of Legg Mason Global Trust, Inc.) and Legg Mason Basic Value Fund and Legg
Mason Financial Services Fund (each a newly organized series of Legg Mason
Investors Trust, Inc.), respectively, all as described in the accompanying
proxy statement; and
(2) To transact such other business as may properly come before the
meeting or any adjournment thereof.
You are entitled to vote at the meeting and any adjournment thereof if you
owned shares of a Bartlett Fund at the close of business on July [26], 1999. IF
YOU ATTEND THE MEETING, YOU MAY VOTE YOUR SHARES IN PERSON. IF YOU DO NOT EXPECT
TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY
CARD IN THE ENCLOSED POSTAGE PAID ENVELOPE. As an alternative to using the paper
proxy card to vote, you may vote by telephone, by facsimile, through the
Internet, or in person.
By order of the board of trustees,
Marie K. Karpinski
Vice President and Treasurer
July [29,] 1999
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YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN
Please indicate your voting instructions on the enclosed proxy card, sign
and date the card and return it in the envelope provided. IF YOU SIGN, DATE AND
RETURN THE PROXY CARD BUT GIVE NO VOTING INSTRUCTIONS, YOUR SHARES WILL BE VOTED
"FOR" THE PROPOSAL DESCRIBED ABOVE. In order to avoid the additional expense of
further solicitation, we ask your cooperation in mailing your proxy card
promptly. As an alternative to using the paper proxy card to vote, you may vote
by mail, telephone, through the Internet, by facsimile machine or in person.
Shares that are registered in your name, as well as shares held in "street name"
through a broker, may be voted via the Internet or by telephone. To vote in this
manner, you will need the 12-digit "control" number(s) that appear on your proxy
card(s). To vote via the Internet, please access http://www.________.com on the
World Wide Web. In addition, shares that are registered in your name may be
voted by faxing your completed proxy card(s) to 1-___-____. You may also call
1-___-____ and vote by phone. If we do not receive your completed proxy cards
after several weeks, you may be contacted by your Financial Advisor.
Unless proxy cards submitted by corporations and partnerships are signed by the
appropriate persons as indicated in the voting instructions on the proxy card,
they will not be voted.
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BARTLETT EUROPE FUND
BARTLETT BASIC VALUE FUND
BARTLETT FINANCIAL SERVICES FUND
(EACH A SERIES OF BARTLETT CAPITAL TRUST)
100 LIGHT STREET
BALTIMORE, MD 21202
(410) 539-0000
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PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
SEPTEMBER 23, 1999
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VOTING INFORMATION
This proxy statement ("Proxy Statement") is being furnished to
shareholders of Bartlett Europe Fund, Bartlett Basic Value Fund and Bartlett
Financial Services Fund (each a "Bartlett Fund"), each of which is a separate
series of Bartlett Capital Trust, in connection with a solicitation of proxies
from those shareholders by its board of trustees ("Board" or "Trustees") for use
at a special meeting of those shareholders to be held on September 23, 1999
("Meeting"), and at any adjournment of the Meeting. This Proxy Statement will
first be mailed to shareholders on or about August [2], 1999. If you hold shares
of Bartlett Value International Fund, another series of Bartlett Capital Trust,
you will receive a separate mailing relating to a reorganization of that fund to
be voted on separately at the meeting.
As more fully described in this Proxy Statement, the purpose of the
meeting is to vote on the proposed conversion of each Bartlett Fund from a
separate series of Bartlett Capital Trust, a Massachusetts business trust, to a
series of either Legg Mason Global Trust, Inc. ("Global Trust") or Legg Mason
Investors Trust, Inc. ("Investors Trust"), each of which is a Maryland
corporation (collectively, "Legg Mason Investment Companies").
For each Bartlett Fund, one-third of its shares outstanding on July [26],
1999 ("Record Date"), represented in person or by proxy, shall constitute a
quorum and must be present for the transaction of business at the Meeting. If a
quorum for a Bartlett Fund is not present at the Meeting or a quorum therefor is
present but sufficient votes to approve the proposal are not received, the
persons named as proxies may propose one or more adjournments of the Meeting
with respect to that Bartlett Fund to permit further solicitation of proxies.
Any such adjournment will require the affirmative vote of a majority of those
shares represented at the Meeting in person or by proxy. The persons named as
proxies will vote those proxies that they are entitled to vote FOR the proposal
in favor of such an adjournment and will vote those proxies required to be voted
AGAINST the proposal against such adjournment.
Broker non-votes are shares held in "street name" for which the broker
indicates that instructions have not been received from the beneficial owners or
other persons entitled to vote and for which the broker does not have
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discretionary voting authority. Abstentions and broker non-votes will be counted
as shares present for purposes of determining whether a quorum is present but
will not be voted for or against any adjournment or proposal. Accordingly,
abstentions and broker non-votes effectively will be a vote against adjournment
or against the proposal where the required vote is a percentage of the shares
present or outstanding. Abstentions and broker non-votes will not be counted,
however, as votes cast for purposes of determining whether sufficient votes have
been received to approve the proposal.
The individuals named as proxies on the enclosed proxy card will vote in
accordance with your directions as indicated on the proxy card, if your proxy
card is received properly executed by you or by your duly appointed agent or
attorney-in-fact. If you sign, date and return the proxy card but give no voting
instructions, your shares will be voted in favor of approval of the proposal. In
addition, if you sign, date and return the proxy card but give no voting
instructions, the duly appointed proxies may, in their discretion, vote upon any
other matters that come before the Meeting. The proxy card may be revoked by
giving another proxy or by letter or telegram revoking the initial proxy. To be
effective, revocation must be received by Bartlett Capital Trust prior to the
Meeting and must indicate your name and account number. If you attend the
Meeting in person you may, if you wish, vote by ballot at the Meeting, thereby
canceling any proxy previously given.
[In order to reduce costs, the notices to a shareholder having more than
one account in any Bartlett Fund listed under the same Social Security number at
a single address have been combined. The proxy cards have been coded so that a
shareholder's votes will be counted for each such account.]
As of the Record Date, (1) Bartlett Europe Fund had _____________ shares
of beneficial interest ("shares") outstanding, which were allocated to the
following classes: __________ Class A shares, __________ Class C shares and
__________ Class Y shares; (2) Bartlett Basic Value Fund had _____________
shares outstanding, which were allocated to the following classes: __________
Class A shares, __________ Class C shares and __________ Class Y shares; and (3)
Bartlett Financial Services Fund had _____________ shares outstanding, which
were allocated to the following classes: __________ Class A shares, __________
Class C shares and __________ Class Y shares. The solicitation of proxies, the
cost of which will be borne by Legg Mason Fund Adviser, Inc. ("Fund Adviser"),
will be made primarily by mail but also may be made by telephone or oral
communications by representatives of Fund Adviser, Bartlett & Co. ("Bartlett"),
and Legg Mason Wood Walker, Inc. ("Legg Mason"), the distributor of the Legg
Mason group of investment companies, which will not receive any compensation for
these activities from either Bartlett Capital Trust or the Legg Mason Investment
Companies. Proxies voted by telephone, facsimile or Internet may be revoked at
any time before they are voted in the same manner that proxies voted by mail may
be revoked.
Except as set forth in Appendix A, Bartlett does not know of any person
who owns beneficially 5% or more of the shares of any Bartlett Fund. [Trustees
and officers of Bartlett Capital Trust own in the aggregate less than 1% of the
shares of each Bartlett Fund.]
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Shareholders may obtain a copy of each Bartlett Fund's most recent annual
report by calling ______ at 1-800 ___-____.
REQUIRED VOTE. Approval of the proposal regarding each Bartlett Fund
requires the affirmative vote of a majority of its outstanding shares entitled
to vote at the Meeting. This means that the proposal with respect to a Bartlett
Fund must be approved by the lesser of (1) 67% or more of its shares present at
the Meeting if the owners of more than 50% of its then outstanding shares are
present in person or by proxy or (2) more than 50% of its outstanding shares.
Each outstanding full share of a Bartlett Fund is entitled to one vote, and each
outstanding fractional share thereof is entitled to a proportionate fractional
share of one vote. If the proposal regarding a Bartlett Fund is not approved by
the requisite vote of its shareholders, the persons named as proxies may propose
one or more adjournments of the Meeting with respect thereto to permit further
solicitation of proxies.
PROPOSAL 1: TO APPROVE AN AGREEMENT AND PLAN OF CONVERSION AND
TERMINATION ("CONVERSION PLAN") PROVIDING FOR THE CONVERSION OF EACH
BARTLETT FUND FROM A SERIES OF BARTLETT CAPITAL TRUST TO A NEWLY
ORGANIZED SERIES OF ONE OF THE LEGG MASON INVESTMENT COMPANIES (EACH
A "CONVERSION")
Each Bartlett Fund is currently organized as a series of Bartlett Capital
Trust. The Board, including those Trustees who are not "interested persons," as
that term is defined in the Investment Company Act of 1940, as amended ("1940
Act"), of Bartlett Capital Trust, either Legg Mason Investment Company,
Bartlett, or Fund Adviser ("Independent Trustees"), considered and approved the
Conversion Plan, a copy of which is attached to this Proxy Statement as Appendix
B, at a meeting held on June 21, 1999. Under the Conversion Plan:
(1) Bartlett Europe Fund will be converted to Legg Mason Europe Fund, a
newly organized series of Global Trust;
(2) Bartlett Basic Value Fund will be converted to Legg Mason Basic Value
Fund, a newly organized series of Investors Trust; and
(3) Bartlett Financial Services Fund will be converted to Legg Mason
Financial Services Fund, also a newly organized series of Investors Trust.
None of Legg Mason Europe Fund, Legg Mason Basic Value Fund and Legg Mason
Financial Services Fund (collectively "New Legg Mason Funds") has yet commenced
business operations, and each of them (a) was established solely for the purpose
of effecting a Conversion, (b) will carry on the business of its corresponding
Bartlett Fund following the Conversion and (c) will have investment objectives,
policies and restrictions identical to those of that Bartlett Fund. The
consummation of one Conversion is not contingent on consummation of either other
Conversion.
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Each Conversion will be accomplished by the participating New Legg Mason
Fund's acquisition of all the assets of the corresponding Bartlett Fund in
exchange solely for shares of common stock of the New Legg Mason Fund ("New Legg
Mason Fund Shares") and the assumption by the New Legg Mason Fund of all the
Bartlett Fund's liabilities. The Bartlett Fund then will distribute those New
Legg Mason Fund Shares to its shareholders, so that each Bartlett Fund
shareholder will receive the number and aggregate net asset value of full and
fractional New Legg Mason Fund Shares equal to the number and aggregate net
asset value (and corresponding class) of the shareholder's shares in the
Bartlett Fund ("Bartlett Fund Shares") as of the Closing Date (defined below).
Each Conversion will occur as of the close of business on or about
September [28], 1999, or at a later date when the Conversion is approved and all
contingencies have been met ("Closing Date").
For the reasons set forth below, the Board, including the Independent
Trustees, has determined that each Conversion is in the best interests of the
participating Bartlett Fund, that the interests of the Bartlett Fund's
shareholders will not be diluted as a result of the Conversion. Accordingly, the
Board recommends approval of each Conversion.
REASONS FOR THE PROPOSED CONVERSIONS
In approving the Conversions, the Board considered the lack of significant
growth of the Bartlett Funds in recent years and the prospects for growth going
forward and determined that association with a fund complex (the Legg Mason
group of investment companies) that will allow the Bartlett Funds access to
vastly larger marketing resources and a likely increase in sales would benefit
their shareholders. The Board took into account that each New Legg Mason Fund's
operations will be substantially the same as those of the corresponding Bartlett
Fund. Fund Adviser and Legg Mason, affiliates of Bartlett, will serve as the New
Legg Mason Funds' manager/investment adviser and distributor, respectively. See
"Additional Information about Legg Mason Fund Adviser, Inc." and "Additional
Information about Legg Mason Wood Walker, Inc.," below.
The Board recommends that each Bartlett Fund's shareholders vote FOR
approval of the Conversion Plan. With respect to each Bartlett Fund, such a vote
encompasses approval of both (1) conversion of the Bartlett Fund to the
corresponding New Legg Mason Fund and (2) a temporary waiver of certain
investment limitations of the Bartlett Fund to permit the Conversion (see
"Temporary Waiver of Investment Restrictions," below).
SUMMARY OF THE CONVERSION PLAN
The following discussion summarizes the important terms of the Conversion
Plan. This summary is qualified in its entirety by reference to the Conversion
Plan itself, which is attached as Appendix B to this Proxy Statement.
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Each Conversion is independent of the other Conversions. If the Conversion
Plan is approved by a Bartlett Fund's shareholders, then on the Closing Date the
Bartlett Fund will transfer all its assets to the corresponding New Legg Mason
Fund in exchange solely for New Legg Mason Fund Shares equal to the number of
Bartlett Fund Shares outstanding on the Closing Date and the assumption by the
New Legg Mason Fund of all the liabilities of the Bartlett Fund. Immediately
thereafter, the Bartlett Fund will constructively distribute to each Bartlett
Fund shareholder one New Legg Mason Fund Share for each Bartlett Fund Share held
by the shareholder on the Closing Date, in liquidation of those Bartlett Fund
Shares. As soon as practicable after this distribution, the Bartlett Fund will
be terminated as a series of Bartlett Capital Trust and will be wound up and
liquidated. ON COMPLETION OF THE CONVERSION INVOLVING A BARTLETT FUND, EACH
SHAREHOLDER THEREOF WILL OWN FULL AND FRACTIONAL NEW LEGG MASON FUND SHARES
EQUAL IN NUMBER AND AGGREGATE NET ASSET VALUE TO HIS OR HER BARTLETT FUND
SHARES.
The Conversion Plan obligates the applicable Legg Mason Investment
Company, on behalf of its New Legg Mason Fund, (1) to enter into (a) an
Investment Advisory and Administration Agreement with Fund Adviser, (b) on
behalf of and with respect to Legg Mason Europe Fund only, a Sub-Advisory
Agreement with Lombard Odier International Portfolio Management Limited
("Lombard Odier"), (c) on behalf of and with respect to Legg Mason Financial
Services Fund only, a Sub-Advisory Agreement with Gray, Seifert & Co., Inc.
("Gray, Seifert"), (d) on behalf of Legg Mason Basic Value Fund only, a
Sub-Advisory Agreement with Bartlett, (e) a Distribution Contract with Legg
Mason, (f) a Plan of Distribution with respect to each of Class A New Legg Mason
Fund Shares and Primary Class New Legg Mason Fund Shares and (g) other
agreements necessary for the New Legg Mason Fund's operation as a series of an
open-end investment company, and (2) to approve the applicability to the New
Legg Mason Fund of its existing Transfer Agency Agreement with Boston Financial
Data Services, Inc. ("Transfer Agent") and its existing Custodian Agreement with
State Street Bank & Trust Company, the latter two agreements incorporating
substantially the same terms and conditions as those currently applicable to the
Bartlett Fund (collectively, the "New Agreements"). Approval of the Conversion
Plan will authorize Fund Adviser (which will be issued a single share of each
New Legg Mason Fund on a temporary basis) to approve the New Agreements with
respect to each New Legg Mason Fund as its sole initial shareholder.
The New Agreements will take effect on the Closing Date, and each will
continue in effect until September __, 2000. Thereafter, the Investment Advisory
and Administration Agreement, and each Sub-Advisory Agreement will continue in
effect only if their respective continuances are approved at least annually: (i)
by the vote of a majority of the New Legg Mason Funds' Independent Directors
cast in person at a meeting called for the purpose of voting on such approval;
and (ii) by the vote of a majority of the New Legg Mason Funds' directors or a
majority of the outstanding voting shares of the New Legg Mason Fund. Each Plan
of Distribution will continue in effect only if approved annually by a vote of
the New Legg Mason Funds' Independent Directors, cast in person at a meeting
called for that purpose. The Investment Advisory and Administration Agreement
and the Sub-Advisory Agreements will be terminable without penalty on sixty
days' written notice either by the New Legg Mason Funds, Fund Adviser, Lombard
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Odier, Gray, Seifert or Bartlett, as the case may be, and each will terminate
automatically in the event of its assignment. Each Distributions Plan will be
terminable at any time without penalty by a vote of a majority of the New Legg
Mason Fund's Independent Directors or a majority of the outstanding voting
shares of the New Legg Mason Fund.
The Legg Mason Investment Companies' Board will hold office without limit
in time except that: (i) any Director may resign; and (ii) a Director may be
removed at any special meeting of shareholders at which a quorum is present by
the affirmative vote of a majority of the outstanding voting shares of the Legg
Mason Investment Company. In case a vacancy shall for any reason exist, a
majority of the remaining Directors, though less than a quorum, will vote to
fill such vacancy by appointing another Director, so long as, immediately after
such appointment, at least two-thirds of the Directors have been elected by
shareholders. If, at any time, less than a majority of the Directors holding
office have been elected by shareholders, the Directors then in office will
promptly call a shareholders' meeting for the purpose of electing Directors.
Otherwise, there need normally be no meetings of shareholders for the purpose of
electing Directors.
The obligations of Bartlett Capital Trust and the Legg Mason Investment
Companies under the Conversion Plan are subject to various conditions as stated
therein. Notwithstanding approval of the Conversion Plan by Bartlett Fund
shareholders, it may be terminated or amended at any time before the Conversion
if (1) there is a material breach by the other party of any representation,
warranty or agreement contained in the Conversion Plan to be performed at or
before the Closing Date or (2) it reasonably appears that a party will not or
cannot meet a condition of the Conversion Plan. Either Bartlett Capital Trust or
a Legg Mason Investment Company may at any time waive compliance with any of the
covenants and conditions contained in, or may amend, the Conversion Plan,
provided that the waiver or amendment does not materially adversely affect the
interests of Bartlett Fund shareholders.
CONTINUATION OF FUND SHAREHOLDER ACCOUNTS
The Transfer Agent will establish accounts for the New Legg Mason Fund
shareholders containing the appropriate number of New Legg Mason Fund Shares to
be received by each holder of Bartlett Fund Shares under the Conversion Plan.
Those accounts will be identical in all material respects to the accounts
currently maintained by the Transfer Agent for the Bartlett Fund shareholders.
EXPENSES
The cost of the Conversion, including the costs of this proxy
solicitation, will be borne by Fund Adviser.
TEMPORARY WAIVER OF INVESTMENT RESTRICTIONS
Certain fundamental investment restrictions of each Bartlett Fund, which
prohibit it from acquiring more than a stated percentage of ownership of another
company, might be construed as restricting its ability to carry out a
Conversion. By approving the Conversion Plan, Bartlett Fund shareholders will be
agreeing to waive, only for the purpose of the Conversion, those fundamental
investment restrictions that could prohibit or otherwise impede the transaction.
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FORMS OF ORGANIZATION
Each Bartlett Fund is a series of Bartlett Capital Trust, an open-end,
diversified investment management company that was organized on October 31,
1982, under the laws of the Commonwealth of Massachusetts as a business trust
named "MGF Equity Trust." Its name was changed to "Midwest Group Capital Trust"
on _____ __, 19__, and to its current name on _____ __, 19__. Bartlett Capital
Trust does not issue share certificates and is not required to (and does not)
hold annual shareholder meetings.
Legg Mason Europe Fund is a newly organized series of Global Trust, an
open-end, diversified investment management company that was incorporated on
December 31, 1992, under the laws of the State of Maryland. It has authorized
capital of one billion 250 million shares of common stock, par value $0.001 per
share, of which 375 million authorized and unissued shares have been allocated
to Legg Mason Europe Fund. Global Trust does not issue share certificates and is
not required to (and does not) hold annual shareholder meetings.
Legg Mason Basic Value Fund and Legg Mason Financial Services Fund are two
newly organized series of Investors Trust, an open-end, diversified investment
management company that was incorporated on May 5, 1993, under the laws of the
State of Maryland. It has authorized capital of one billion 600 million shares
of common stock, par value $0.001 per share, of which 375 million authorized and
unissued shares have been allocated to each of Legg Mason Basic Value Fund and
Legg Mason Financial Services Fund. Investors Trust does not issue share
certificates and is not required to (and does not) hold annual shareholder
meetings.
RIGHTS OF SHAREHOLDERS
As noted above, each New Legg Mason Fund is a series of an investment
company organized as a Maryland corporation, while each Bartlett Fund is a
series of a Massachusetts business trust. The rights of the shareholders of each
Bartlett Fund, including rights with respect to shareholder meetings, inspection
of shareholder lists and distributions on the Bartlett Fund's liquidation, are
substantially similar to the rights of shareholders of a series of a Maryland
corporation, such as the New Legg Mason Funds. Although shareholders of a
Massachusetts business trust may, under certain circumstances, be held
personally liable for its obligations, Bartlett Capital Trust's Amended and
Restated Declaration of Trust provides, generally, that no trustee, shareholder,
officer, employee or agent of Bartlett Capital Trust will have personal
liability for its obligations. In addition, the Amended and Restated Declaration
of Trust states that only the property of Bartlett Capital Trust, and not the
private property of any trustee, shareholder, officer, employee or agent
thereof, will be used to satisfy any obligation of or claim against it. Each
Legg Mason Investment Company's board of directors will call meetings of
shareholders as required by the 1940 Act, Maryland law or its Articles of
Incorporation or By-laws and at their discretion.
TAX CONSEQUENCES OF THE CONVERSION
Bartlett Capital Trust and the Legg Mason Investment Companies will
receive an opinion from their counsel, Kirkpatrick & Lockhart LLP, that each
Conversion will constitute a tax-free reorganization within the meaning of
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section 368(a)(1)(F) of the Code. Accordingly, with respect to each Conversion,
the Bartlett Fund, the New Legg Mason Fund and the Bartlett Fund's shareholders
will recognize no gain or loss for federal income tax purposes on (1) the
transfer of the Bartlett Fund's assets in exchange solely for New Legg Mason
Fund Shares and the assumption by the New Legg Mason Fund of the Bartlett Fund's
liabilities or (2) the distribution of the New Legg Mason Fund Shares to the
Bartlett Fund's shareholders in liquidation of their Bartlett Fund Shares. The
opinion will further provide, among other things, that (a) a Bartlett Fund
shareholder's aggregate basis for federal income tax purposes of the New Legg
Mason Fund Shares to be received by the shareholder in a Conversion will be the
same as the aggregate basis of his or her Bartlett Fund Shares to be
constructively surrendered in exchange for those New Legg Mason Fund Shares and
(b) a Bartlett Fund shareholder's holding period for his or her New Legg Mason
Fund Shares will include the shareholder's holding period for his or her
Bartlett Fund Shares, provided that those Bartlett Fund Shares were held as
capital assets at the time of the Conversion.
DIRECTORS AND OFFICERS
The directors and officers of the Legg Mason Investment Companies are
listed below. Each Director or officer who is an "interested person," as defined
in the 1940 Act, of either Legg Mason Investment Company is indicated by an
asterisk. Approval of the Conversion Plan will constitute your approval of each
of the following directors.
NAME POSITION
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*John F. Curley, Jr. Chairman of the Board and Director
Richard G. Gilmore Director
Arnold L. Lehman Director
Jill E. McGovern Director
T.A. Rodgers Director
*Edward A. Taber, III Director
*Marie K. Karpinski Vice President and Treasurer
*W. Shane Hughes Secretary (Investors Trust only)
*Brian M. Eakes Assistant Treasurer and Assistant Secretary
(Investors Trust only)
*Susan L. Silva Secretary (Global Trust); Assistant Secretary
(Investors Trust)
The principal occupation of the executive officers and Directors of the
Legg Mason Investment Companies during the past five years are set forth below:
JOHN F. CURLEY, JR.* (7/24/39), Chairman of the Board and Director of the
Legg Mason Investment Companies; Retired Vice Chairman and Director of Legg
Mason, Inc. and Legg Mason; President and Director of three Legg Mason funds;
Chairman of the Board and Director of three Legg Mason funds; Chairman of the
Board, President and Trustee of one Legg Mason fund; Chairman of the Board and
Trustee of one Legg Mason fund. Formerly: Director of Fund Adviser and Western
Asset Management Company (each a registered investment adviser); Officer and/or
Director of various other affiliates of Legg Mason, Inc.
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RICHARD G. GILMORE (6/9/27), Director of the Legg Mason Investment
Companies; Independent Consultant; Director of CSS Industries, Inc. (diversified
holding company whose subsidiaries are engaged in the manufacture and sale of
decorative paper products, business forms, and specialty metal packaging);
Director of PECO Energy Company (formerly Philadelphia Electric Company);
Director/Trustee of five other Legg Mason funds. Formerly: Senior Vice President
and Chief Financial Officer of Philadelphia Electric Company (now PECO Energy
Company); Executive Vice President and Treasurer, Girard Bank, and Vice
President of its parent holding company, the Girard Company; and Director of
Finance, City of Philadelphia.
ARNOLD L. LEHMAN (7/18/44), Director of the Legg Mason Investment
Companies; Director of the Brooklyn Museum of Art; Director/Trustee of five
other Legg Mason funds. Formerly: Director of the Baltimore Museum of Art.
JILL E. McGOVERN (8/29/44), Director of the Legg Mason Investment
Companies; Chief Executive Officer of the Marrow Foundation. Director/Trustee of
five other Legg Mason funds. Formerly: Executive Director of the Baltimore
International Festival (January 1991 - March 1993); and Senior Assistant to the
President of The Johns Hopkins University (1986-1991).
T. A. RODGERS (10/22/34), Director of the Legg Mason Investment Companies;
Principal, T. A. Rodgers & Associates (management consulting); Director/Trustee
of five other Legg Mason funds. Formerly: Director and Vice President of
Corporate Development, Polk Audio, Inc. (manufacturer of audio components).
EDWARD A. TABER, III* (8/25/43), Director of the Legg Mason Investment
Companies; Senior Executive Vice President of Legg Mason, Inc. and Legg Mason;
Vice Chairman and Director of Fund Adviser; President and/or Director/Trustee of
four Legg Mason funds. Formerly: Executive Vice President of T. Rowe
Price-Fleming International, Inc. (1986-1992) and Director of the Taxable Fixed
Income Division at T. Rowe Price Associates, Inc. (1973-1992).
MARIE K. KARPINSKI* (1/1/49), Vice President and Treasurer of the Legg
Mason Investment Companies; Vice President and Treasurer of various other Legg
Mason funds; Vice President of Legg Mason.
W. SHANE HUGHES* (4/24/68), Secretary of Investors Trust; employee of Legg
Mason since May 1997. Formerly: Supervisor, C.W. Amos & Co. (regional public
accounting firm ) 1990-1996.
BRIAN M. EAKES* (12/9/69), Assistant Treasurer and Assistant Secretary of
Global Trust; Assistant Treasurer and Assistant Secretary of two Legg Mason
funds; employee of Legg Mason, Inc. since July 1995. Formerly: Senior Associate
- - Audit of PricewaterhouseCoopers LLP (Aug. 1992 - June 1995).
SUSAN L. SILVA* (3/29/67), Secretary of Global Trust and Assistant
Secretary of Investors Trust; Assistant Secretary of various other Legg Mason
funds; employee of Legg Mason since January 1994.
-9-
<PAGE>
REQUIRED VOTE
Approval of the Conversion Plan with respect to a Bartlett Fund requires
the affirmative vote of a majority of its outstanding shares entitled to vote at
the Meeting. This means that the proposal with respect to a Bartlett Fund must
be approved by the lesser of (1) 67% or more of its shares present at the
Meeting if the owners of more than 50% its then outstanding shares are present
in person or by proxy or (2) more than 50% of its outstanding shares.
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS
VOTE "FOR" PROPOSAL 1
ADDITIONAL INFORMATION ABOUT LEGG MASON FUND ADVISER, INC.
Under the proposed Investment Advisory and Administration Agreements, Fund
Adviser will serve as the New Legg Mason Funds' manager/investment adviser. Fund
Adviser, located at 100 Light Street, Baltimore, Maryland 21202, is a Maryland
corporation and a wholly owned subsidiary of Legg Mason, Inc. It is registered
as an investment adviser under the Investment Advisers Act of 1940, as amended
("Advisers Act"). Fund Adviser is engaged primarily in the investment advisory
business and as of June 30, 1999, served as manager and/or investment adviser to
seventeen open-end investment company portfolios.
ADDITIONAL INFORMATION ABOUT LEGG MASON WOOD WALKER, INC.
Under the proposed Plans of Distribution, Legg Mason will serve as the New
Legg Mason Funds' distributor. Legg Mason, located at 100 Light Street,
Baltimore, Maryland 21202, is a wholly owned subsidiary of Legg Mason, Inc. It
is registered with the SEC as a broker-dealer [and investment adviser under the
Advisers Act], and is a member of the [National Association of Securities
Dealers, Inc.] [Legg Mason currently provides a full range of brokerage and
related investment advisory services to ___________________.]
OTHER BUSINESS
The Board knows of no other business to be brought before the Meeting. If,
however, any other matters properly come before the Meeting, it is the intention
that proxies that do not contain specific instructions to the contrary will be
voted on such matters in accordance with the judgment of the persons designated
in the proxies.
SHAREHOLDER PROPOSALS
The Bartlett Funds do not hold annual meetings of shareholders.
Shareholders wishing to submit proposals for inclusion in a proxy statement and
form of proxy for a subsequent shareholders' meeting should send their written
proposals to the Secretary of Bartlett Capital Trust, 100 Light Street,
Baltimore, Maryland 21202.
-10-
<PAGE>
MISCELLANEOUS
AVAILABLE INFORMATION
Each Bartlett Fund is subject to the information requirements of the
Securities Exchange Act of 1934, as amended, and the 1940 Act and in accordance
with those requirements files reports, proxy material and other information with
the SEC. These reports, proxy material and other information can be inspected
and copied at the Public Reference Room maintained by the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549, the Midwest Regional office of the SEC,
Northwest Atrium Center, 500 West Madison Street, Suite 400, Chicago, Illinois
60611, and the Northeast Regional Office of the SEC, Seven World Trade Center,
Suite 1300, New York, New York 10048. Copies of such material can also be
obtained from the Public Reference Branch, Office of Consumer Affairs and
Information Services, SEC, Washington, D.C. 20459 at prescribed rates.
LEGAL MATTERS
Certain legal matters in connection with the issuance of New Legg Mason
Fund Shares as part of the Conversions will be passed upon by the Legg Mason
Investment Companies' counsel, Kirkpatrick & Lockhart LLP.
- 11 -
<PAGE>
APPENDIX A
PRINCIPAL SHAREHOLDERS
Set forth below is a table which contains the name, address and
percentage ownership of each person who is known by each of Bartlett Basic Value
Fund, Bartlett Europe Fund and Bartlett Financial Services Fund to own
beneficially and/or of record five percent or more of its outstanding shares as
of July [26], 1999:
BARTLETT BASIC VALUE FUND:
NAME AND ADDRESS CLASS C CLASS Y
Crew Et. Al. TTEES
Bacar Constructors Inc.
401K Retirement Plan
912 8th Avenue South
Nashville, TN 37203-4701
LMWW Custodian FBO George S. Goodman Ira
319 Willow Oak Circle
Baltimore, MD 21208
Clark Schaefer Hackett & Co.
Profit Sharing Retirement Plan with 401K
provisions
105 E. 4th Street, Suite 16
Cincinnati, OH 45202
Kevin M Reid Do Inc.
Defined Contribution
1259 Timberwyck Ct.
Dayton, OH 45458
Robert A. Schriber MD Inc.
Profit Sharing Plan
1430 First National Building
130 E. 2nd Street
Dayton, OH 45402
George D. Waissbluth
Greater Cin Gastroenterology Assoc Inc.
Pen/Profit Sharing Plan
2925 Vernon Place
Cincinnati, OH 45219
<PAGE>
BARTLETT EUROPE FUND:
NAME AND ADDRESS CLASS A CLASS Y
James B. Hochman TTEE
Hochman and Roach Co. PSP
8795 Frederick Pike
Dayton, OH 45414-1214
Charles Schwab & Co.
ADP Proxy Services
101 Montgomery Street
San Francisco, CA 94101
Hartford Research Group Inc.
P/S Plan
10550 Montgomery Road
Cincinnati, OH 45242
Lou Spitz TTEE
Cincinnati Cntr. Psychoanalysis
Pension and Profit Sharing
3001 Highland Ave.
Cincinnati, OH 45219-2315
H.C. Murrer & D.L. Murrer TTEES
The MMC Inc. Cash/Deferral PSP
Cincinnati, OH
Margaret Y. Outmette TTEE
Sarah Elizabeth Lichtenstein Trust
601 Stanley Avenue
Cincinnati, OH 45226
BARTLETT FINANCIAL SERVICES FUND:
NAME AND ADDRESS CLASS A CLASS C
Neuberger Berman LLC
55 Water Street
New York, NY 10041-0001
A-2
<PAGE>
Kinco & Co.
c/o Republic National Bank
1 Hanson Place
Brooklyn, NY 11243
A-3
<PAGE>
APPENDIX B
AGREEMENT AND PLAN OF CONVERSION AND TERMINATION
This AGREEMENT AND PLAN OF CONVERSION AND TERMINATION ("Agreement") is
made as of _____ __, 1999, among BARTLETT CAPITAL TRUST, a Massachusetts
business trust ("Trust"), on behalf of each segregated portfolio of assets
("series") of Trust listed on Schedule A to this Agreement ("Schedule A") (each,
an "Old Fund"), LEGG MASON GLOBAL TRUST, INC., a Maryland corporation ("Global
Corporation"), on behalf of its Legg Mason Europe Fund series, and LEGG MASON
INVESTORS TRUST, INC. ("Investors Corporation"), a Maryland corporation, on
behalf of its Legg Mason Financial Services Fund and Legg Mason Basic Value Fund
series (together with Legg Mason Europe Fund, the "New Funds"). (Each Old Fund
and New Fund is sometimes referred to herein individually as a "Fund" and
collectively as the "Funds," Global Corporation and Investors Corporation are
sometimes referred to herein individually as a "Corporation" and collectively as
the "Corporations," and Trust and the Corporations are sometimes referred to
herein individually as an "Investment Company.") All agreements,
representations, actions, and obligations described herein made or to be taken
or undertaken by a Fund are made and shall be taken or undertaken by Trust on
behalf of each Old Fund, by Global Corporation on behalf of Legg Mason Europe
Fund, and by Investors Corporation on behalf of each other New Fund.
Each Old Fund intends to change its identity, form, and place of
organization -- by converting from a series of a Massachusetts business trust to
a series of a Maryland corporation -- through a reorganization within the
meaning of section 368(a)(1)(F) of the Internal Revenue Code of 1986, as amended
("Code"). Each Old Fund desires to accomplish such conversion by transferring
all its assets to the New Fund listed on Schedule A opposite its name (which is
being established solely for the purpose of acquiring such assets and continuing
such Old Fund's business) in exchange solely for voting shares of common stock
in such New Fund ("New Fund Shares") and such New Fund's assumption of such Old
Fund's liabilities, followed by the constructive distribution of the New Fund
Shares PRO RATA to the holders of shares of beneficial interest in such Old Fund
("Old Fund Shares") in exchange therefor, all on the terms and conditions set
forth in this Agreement (which is intended to be, and is adopted as, a "plan of
reorganization" for federal income tax purposes). All such transactions
involving each Old Fund and its transferee New Fund are referred to herein as a
"Reorganization." For convenience, the balance of this Agreement will refer to a
single Reorganization, one Old Fund, and one New Fund (unless otherwise
indicated), but the terms and conditions of this Agreement shall apply
separately to each Reorganization. The consummation of one Reorganization shall
not be contingent on consummation of any other Reorganization.
The Old Fund Shares currently are divided into three classes,
designated Class A, Class C, and Class Y shares ("Class A Old Fund Shares,"
"Class C Old Fund Shares," and "Class Y Old Fund Shares," respectively). The New
Fund Shares will be divided into three classes, designated Class A, Primary
<PAGE>
Class, and Navigator Class shares ("Class A New Fund Shares," "Primary Class New
Fund Shares," and "Navigator Class New Fund Shares," respectively). Each class
of New Fund Shares will be substantially similar to the corresponding class of
Old Fund Shares (the Funds' Class A Shares correspond to each other, Class C Old
Fund Shares correspond to Primary Class New Fund Shares, and Class Y Old Fund
Shares correspond to Navigator Class New Fund Shares), except that Class C Old
Fund Shares are subject to a contingent deferred sales charge, while Primary
Class New Fund Shares will not be subject to such a charge.
In consideration of the mutual promises herein contained, the parties
agree as follows:
1. PLAN OF CONVERSION AND TERMINATION
----------------------------------
1.1. Old Fund agrees to assign, sell, convey, transfer, and deliver all
of its assets described in paragraph 1.2 ("Assets") to New Fund. New Fund agrees
in exchange therefor --
(a) to issue and deliver to Old Fund the number of full and
fractional (rounded to the third decimal place) (i) Class A New Fund
Shares equal to the number of full and fractional Class A Old Fund
Shares then outstanding, (ii) Primary Class New Fund Shares equal to
the number of full and fractional Class C Old Fund Shares then
outstanding, and (iii) Navigator Class New Fund Shares equal to the
number of full and fractional Class Y Old Fund Shares then outstanding,
and
(b) to assume all of Old Fund's liabilities described in
paragraph 1.3 ("Liabilities").
Such transactions shall take place at the Closing (as defined in paragraph 2.1).
1.2. The Assets shall include, without limitation, all cash, cash
equivalents, securities, receivables (including interest and dividends
receivable), claims and rights of action, rights to register shares under
applicable securities laws, books and records, deferred and prepaid expenses
shown as assets on Old Fund's books, and other property owned by Old Fund at the
Effective Time (as defined in paragraph 2.1).
1.3. The Liabilities shall include all of Old Fund's liabilities,
debts, obligations, and duties of whatever kind or nature, whether absolute,
accrued, contingent, or otherwise, whether or not arising in the ordinary course
of business, whether or not determinable at the Effective Time, and whether or
not specifically referred to in this Agreement.
1.4. At the Effective Time (or as soon thereafter as is reasonably
practicable), (a) the New Fund Shares issued pursuant to paragraph 4.6 shall be
redeemed by New Fund for $1.00 apiece and (b) Old Fund shall distribute the New
Fund Shares it received pursuant to paragraph 1.1 to its shareholders of record,
determined as of the Effective Time (each a "Shareholder" and collectively
"Shareholders"), in constructive exchange for their Old Fund Shares. Such
distribution shall be accomplished by Corporation's transfer agent's opening
accounts on New Fund's share transfer books in the Shareholders' names and
transferring such New Fund Shares thereto. Each Shareholder's account shall be
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<PAGE>
credited with the respective PRO RATA number of full and fractional (rounded to
the third decimal place) New Fund Shares due that Shareholder, by class (I.E.,
the account for a Shareholder of Class A Old Fund Shares shall be credited with
the respective PRO RATA number of Class A New Fund Shares due that Shareholder,
the account for a Shareholder of Class C Old Fund Shares shall be credited with
the respective PRO RATA number of Primary Class New Fund Shares due that
Shareholder, and the account for a Shareholder of Class Y Old Fund Shares shall
be credited with the respective PRO RATA number of Navigator Class New Fund
Shares due that Shareholder). All outstanding Old Fund Shares, including those
represented by certificates, shall simultaneously be canceled on Old Fund's
share transfer books. New Fund shall not issue certificates representing the New
Fund Shares in connection with the Reorganization.
1.5. As soon as reasonably practicable after distribution of the New
Fund Shares pursuant to paragraph 1.4, but in all events within twelve months
after the Effective Time, Old Fund shall be terminated as a series of Trust and
any further actions shall be taken in connection therewith as required by
applicable law.
1.6. Any reporting responsibility of Old Fund to a public authority is
and shall remain its responsibility up to and including the date on which it is
terminated.
1.7. Any transfer taxes payable on issuance of New Fund Shares in a
name other than that of the registered holder on Old Fund's books of the Old
Fund Shares constructively exchanged therefor shall be paid by the person to
whom such New Fund Shares are to be issued, as a condition of such transfer.
2. CLOSING AND EFFECTIVE TIME
--------------------------
2.1. The Reorganization, together with related acts necessary to
consummate the same ("Closing"), shall occur at Corporation's principal office
on ________ __, 1999, or at such other place and/or on such other date as to
which the participating parties may agree. All acts taking place at the Closing
shall be deemed to take place simultaneously as of the Funds' close of business
on the date thereof or at such other time as to which the participating parties
may agree ("Effective Time").
2.2. Trust's fund accounting and pricing agent shall deliver at the
Closing a certificate of an authorized officer verifying that the information
(including adjusted basis and holding period, by lot) concerning the Assets,
including all portfolio securities, transferred by Old Fund to New Fund, as
reflected on New Fund's books immediately following the Closing, does or will
conform to such information on Old Fund's books immediately before the Closing.
Trust's custodian shall deliver at the Closing a certificate of an authorized
officer stating that (a) the Assets held by the custodian will be transferred to
New Fund at the Effective Time and (b) all necessary taxes in conjunction with
the delivery of the Assets, including all applicable federal and state stock
transfer stamps, if any, have been paid or provision for payment has been made.
2.3. Corporation's transfer agent shall deliver at the Closing a
certificate as to the opening on New Fund's share transfer books of accounts in
the Shareholders' names. Corporation shall issue and deliver a confirmation to
B-3
<PAGE>
Trust evidencing the New Fund Shares to be credited to Old Fund at the Effective
Time or provide evidence satisfactory to Trust that such New Fund Shares have
been credited to Old Fund's account on such books. At the Closing, each party
shall deliver to the other such bills of sale, checks, assignments, stock
certificates, receipts, or other documents as the other party or its counsel may
reasonably request.
2.4. Each Investment Company shall deliver to the other at the Closing
a certificate executed in its name by its President or a Vice President in form
and substance satisfactory to the recipient and dated the Effective Time, to the
effect that the representations and warranties it made in this Agreement are
true and correct at the Effective Time except as they may be affected by the
transactions contemplated by this Agreement.
3. REPRESENTATIONS AND WARRANTIES
------------------------------
3.1. Old Fund represents and warrants as follows:
3.1.1. Trust is a trust operating under a written declaration
of trust, the beneficial interest in which is divided into transferable
shares ("Business Trust"), that is duly organized and validly existing
under the laws of the Commonwealth of Massachusetts; and a copy of its
Amended and Restated Agreement and Declaration of Trust ("Declaration
of Trust") is on file with the Secretary of the Commonwealth of
Massachusetts;
3.1.2. Trust is duly registered as an open-end management
investment company under the Investment Company Act of 1940, as amended
("1940 Act"), and such registration will be in full force and effect at
the Effective Time;
3.1.3. Old Fund is a duly established and designated series
of Trust;
3.1.4. At the Closing, Old Fund will have good and marketable
title to the Assets and full right, power, and authority to sell,
assign, transfer, and deliver the Assets free of any liens or other
encumbrances; and upon delivery and payment for the Assets, New Fund
will acquire good and marketable title thereto;
3.1.5. New Fund Shares are not being acquired for the purpose
of making any distribution thereof, other than in accordance with the
terms hereof;
3.1.6. Its current prospectus and statement of additional
information conform in all material respects to the applicable
requirements of the Securities Act of 1933, as amended ("1933 Act"),
and the 1940 Act and the rules and regulations 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;
3.1.7. Old Fund is a "fund" as defined in section 851(g)(2) of
the Code; it qualified for treatment as a regulated investment company
under Subchapter M of the Code ("RIC") for each past taxable year since
B-4
<PAGE>
it commenced operations and will continue to meet all the requirements
for such qualification (other than the requirement in section 852(a)(1)
of the Code) for its current taxable year through the Effective Time;
it has no earnings and profits accumulated in any taxable year in which
the provisions of Subchapter M did not apply to it; and it has made all
distributions for each such past taxable year that are necessary to
avoid the imposition of federal excise tax or has paid or provided for
the payment of any federal excise tax imposed for any such year. The
Assets shall be invested at all times through the Effective Time in a
manner that ensures compliance with the foregoing;
3.1.8. The Liabilities were incurred by Old Fund in the
ordinary course of its business and are associated with the Assets;
3.1.9. Old Fund is not under the jurisdiction of a court in a
proceeding under Title 11 of the United States Code or similar case
within the meaning of section 368(a)(3)(A) of the Code;
3.1.10. Not more than 25% of the value of Old Fund's total
assets (excluding cash, cash items, and U.S. government securities) is
invested in the stock and securities of any one issuer, and not more
than 50% of the value of such assets is invested in the stock and
securities of five or fewer issuers;
3.1.11. As of the Effective Time, Old Fund will not have
outstanding any warrants, options, convertible securities, or any other
type of rights pursuant to which any person could acquire Old Fund
Shares;
3.1.12. At the Effective Time, the performance of this
Agreement shall have been duly authorized by all necessary action by
Old Fund's shareholders;
3.1.13. Old Fund will be terminated as soon as reasonably
practicable after the Effective Time, but in all events within twelve
months thereafter;
3.1.14. Old Fund is not in violation of, and the execution and
delivery of this Agreement and consummation of the transactions
contemplated hereby will not conflict with or violate, Massachusetts
law or any provision of the Declaration of Trust or Trust's By-Laws or
of any agreement, instrument, lease, or other undertaking to which Old
Fund is a party or by which it is bound or result in the acceleration
of any obligation, or the imposition of any penalty, under any
agreement, judgment, or decree to which Old Fund is a party or by which
it is bound, except as otherwise disclosed in writing to and accepted
by Corporation;
3.1.15. Except as otherwise disclosed in writing to and
accepted by Corporation, all material contracts and other commitments
of Old Fund (other than this Agreement and investment contracts) will
be terminated, or provision for discharge of any liabilities of Old
Fund thereunder will be made, at or prior to the Effective Time,
without either Fund's incurring any liability or penalty with respect
thereto and without diminishing or releasing any rights Old Fund may
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<PAGE>
have had with respect to actions taken or omitted to be taken by any
other party thereto prior to the Closing;
3.1.16. Except as otherwise disclosed in writing to and
accepted by Corporation, no litigation, administrative proceeding, or
investigation of or before any court or governmental body is presently
pending or (to Old Fund's knowledge) threatened against Trust with
respect to Old Fund or any of its properties or assets that, if
adversely determined, would materially and adversely affect its
financial condition or the conduct of its business; and Old Fund knows
of no facts that might form the basis for the institution of any such
litigation, proceeding, or investigation and is not a party to or
subject to the provisions of any order, decree, or judgment of any
court or governmental body that materially or adversely affects its
business or its ability to consummate the transactions contemplated
hereby;
3.1.17. The execution, delivery, and performance of this
Agreement have been duly authorized as of the date hereof by all
necessary action on the part of Trust's board of trustees, which has
made the determinations required by Rule 17a-8(a) under the 1940 Act;
and assuming due authorization, execution, and delivery of this
Agreement by Corporation on behalf of New Fund and subject to approval
by Old Fund's shareholders and receipt of any necessary exemptive
relief or no-action assurances requested from the Securities and
Exchange Commission ("SEC") or its staff with respect to sections 17(a)
and 17(d) of the 1940 Act, this Agreement will constitute a valid and
legally binding obligation of Old Fund, enforceable in accordance with
its terms, except as the same may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium, and similar laws
relating to or affecting creditors' rights and by general principles of
equity;
3.1.18. At the Effective Time, the performance of this
Agreement shall have been duly authorized by all necessary action by
Old Fund's shareholders;
3.1.19. No governmental consents, approvals, authorizations,
or filings are required under the 1933 Act, the Securities Exchange Act
of 1934, as amended ("1934 Act"), or the 1940 Act for the execution or
performance of this Agreement by Old Fund, except for (a) the filing
with the SEC of a proxy statement ("Proxy Statement") in connection
with the meeting of Old Fund's shareholders referred to in paragraph
4.1 ("Shareholders' Meeting"), (b) receipt of the exemptive relief
referenced in subparagraph 3.1.17, and (c) such consents, approvals,
authorizations, and filings as have been made or received or as may be
required subsequent to the Effective Time; and
3.1.20. At the time of the Shareholders' Meeting and at the
Effective Time, the Proxy Statement will (a) comply in all material
respects with the applicable provisions of the 1933 Act, the 1934 Act,
and the 1940 Act and the regulations thereunder and (b) 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; provided that the foregoing shall not apply to
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<PAGE>
statements in or omissions from the Proxy Statement made in reliance on
and in conformity with information furnished by Corporation for use
therein.
3.2. New Fund represents and warrants as follows:
3.2.1. Corporation is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Maryland;
and a copy of its Articles of Incorporation is on file with the
Secretary of State of Maryland;
3.2.2. Corporation is duly registered as an open-end
management investment company under the 1940 Act, and such registration
will be in full force and effect at the Effective Time;
3.2.3. Before the Effective Time, New Fund will be a duly
established and designated series of Corporation;
3.2.4. New Fund has not commenced operations and will not do
so until after the Closing;
3.2.5. Prior to the Effective Time, there will be no issued
and outstanding shares in New Fund or any other securities issued by
New Fund, except as provided in paragraph 4.6;
3.2.6. No consideration other than New Fund Shares (and New
Fund's assumption of the Liabilities) will be issued in exchange for
the Assets in the Reorganization;
3.2.7. The New Fund Shares to be issued and delivered to Old
Fund hereunder will, at the Effective Time, have been duly authorized
and, when issued and delivered as provided herein, will be duly and
validly issued and outstanding shares of New Fund, fully paid and
non-assessable;
3.2.8. New Fund will be a "fund" as defined in section
851(g)(2) of the Code and will meet all the requirements to qualify for
treatment as a RIC for its taxable year in which the Reorganization
occurs;
3.2.9. New Fund has no plan or intention to issue additional
New Fund Shares following the Reorganization except for shares issued
in the ordinary course of its business as a series of an open-end
investment company; nor does New Fund have any plan or intention to
redeem or otherwise reacquire any New Fund Shares issued to the
Shareholders pursuant to the Reorganization, except to the extent it is
required by the 1940 Act to redeem any of its shares presented for
redemption at net asset value in the ordinary course of that business;
3.2.10. Following the Reorganization, New Fund (a) will
continue Old Fund's "historic business" (within the meaning of section
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<PAGE>
1.368-1(d)(2) of the Income Tax Regulations under the Code), (b) use a
significant portion of Old Fund's historic business assets (within the
meaning of section 1.368-1(d)(3) of those regulations) in a business,
(c) has no plan or intention to sell or otherwise dispose of any of the
Assets, except for dispositions made in the ordinary course of that
business and dispositions necessary to maintain its status as a RIC,
and (d) expects to retain substantially all the Assets in the same form
as it receives them in the Reorganization, unless and until subsequent
investment circumstances suggest the desirability of change or it
becomes necessary to make dispositions thereof to maintain such status;
3.2.11. There is no plan or intention for New Fund to be
dissolved or merged into another corporation or a business trust or any
"fund" thereof (within the meaning of section 851(g)(2) of the Code)
following the Reorganization;
3.2.12. Immediately after the Reorganization, (a) not more
than 25% of the value of New Fund's total assets (excluding cash, cash
items, and U.S. government securities) will be invested in the stock
and securities of any one issuer and (b) not more than 50% of the value
of such assets will be invested in the stock and securities of five or
fewer issuers;
3.2.13. New Fund is not in violation of, and the execution and
delivery of this Agreement and consummation of the transactions
contemplated hereby will not conflict with or violate, Maryland law or
any provision of Corporation's Articles of Incorporation or By-Laws or
of any agreement, instrument, lease, or other undertaking to which New
Fund is a party or by which it is bound or result in the acceleration
of any obligation, or the imposition of any penalty, under an
agreement, judgment, or decree to which New Fund is a party or by which
it is bound, except as otherwise disclosed in writing to and accepted
by Trust;
3.2.14. Except as otherwise disclosed in writing to and
accepted by Trust, no litigation, administrative proceeding, or
investigation of or before any court or governmental body is presently
pending or (to New Fund's knowledge) threatened against Corporation
with respect to New Fund or any of its properties or assets that, if
adversely determined, would materially and adversely affect New Fund's
financial condition or the conduct of its business; and New Fund knows
of no facts that might form the basis for the institution of any such
litigation, proceeding, or investigation and is not a party to or
subject to the provisions of any order, decree, or judgment of any
court or governmental body that materially or adversely affects its
business or its ability to consummate the transactions contemplated
hereby;
3.2.15. The execution, delivery, and performance of this
Agreement have been duly authorized as of the date hereof by all
necessary action on the part of Corporation's board of directors, which
has made the determinations required by Rule 17a-8(a) under the 1940
Act; and assuming due authorization, execution, and delivery of this
Agreement by Trust on behalf of Old Fund and subject to receipt of any
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<PAGE>
necessary exemptive relief or no-action assurances requested from the
SEC or its staff with respect to sections 17(a) and 17(d) of the 1940
Act, this Agreement will constitute a valid and legally binding
obligation of New Fund, enforceable in accordance with its terms,
except as the same may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium, and similar laws relating to or
affecting creditors' rights and by general principles of equity; and
3.2.16. No governmental consents, approvals, authorizations,
or filings are required under the 1933 Act, the 1934 Act, or the 1940
Act for the execution or performance of this Agreement by Corporation,
except for (a) the filing with the SEC of a post-effective amendment to
Corporation's registration statement on Form N-1A, (b) receipt of the
exemptive relief referenced in subparagraph 3.2.15, and (c) such
consents, approvals, authorizations, and filings as have been made or
received or as may be required subsequent to the Effective Time.
3.3. Each Fund represents and warrants as follows:
3.3.1. The aggregate fair market value of the New Fund Shares,
when received by the Shareholders, will be approximately equal to the
aggregate fair market value of their Old Fund Shares constructively
surrendered in exchange therefor;
3.3.2. Its management (a) is unaware of any plan or intention
of Shareholders to redeem, sell, or otherwise dispose of (i) any
portion of their Old Fund Shares before the Reorganization to any
person related (within the meaning of section 1.368-1(e)(3) of the
Income Tax Regulations under the Code) to either Fund or (ii) any
portion of the New Fund Shares to be received by them in the
Reorganization to any person related (as so defined) to New Fund, (b)
does not anticipate dispositions of those New Fund Shares at the time
of or soon after the Reorganization to exceed the usual rate and
frequency of dispositions of shares of Old Fund as a series of an
open-end investment company, (c) expects that the percentage of
Shareholder interests, if any, that will be disposed of as a result of
or at the time of the Reorganization will be DE MINIMIS, and (d) does
not anticipate that there will be extraordinary redemptions of New Fund
Shares immediately following the Reorganization;
3.3.3. The Shareholders will pay their own expenses, if any,
incurred in connection with the Reorganization;
3.3.4. Immediately following consummation of the
Reorganization, the Shareholders will own all the New Fund Shares and
will own such shares solely by reason of their ownership of Old Fund
Shares immediately before the Reorganization;
3.3.5. Immediately following consummation of the
Reorganization, New Fund will hold the same assets -- except for assets
distributed to shareholders in the course of its business as a RIC and
assets used to pay expenses incurred in connection with the
Reorganization -- and be subject to the same liabilities that Old Fund
held or was subject to immediately prior to the Reorganization, plus
B-9
<PAGE>
any liabilities for expenses of the parties incurred in connection with
the Reorganization. Such excepted assets, together with the amount of
all redemptions and distributions (other than regular, normal
dividends) made by Old Fund immediately preceding the Reorganization,
will, in the aggregate, constitute less than 1% of its net assets;
3.3.6. There is no intercompany indebtedness between the
Funds that was issued or acquired, or will be settled, at a discount;
and
3.3.7. Neither Fund will be reimbursed for any expenses
incurred by it or on its behalf in connection with the Reorganization
unless those expenses are solely and directly related to the
Reorganization (determined in accordance with the guidelines set forth
in Rev. Rul. 73-54, 1973-1 C.B.
187) ("Reorganization Expenses").
4. CONDITIONS PRECEDENT
--------------------
Each Fund's obligations hereunder shall be subject to (a) performance
by the other Fund of all its obligations to be performed hereunder at or before
the Effective Time, (b) all representations and warranties of the other Fund
contained herein being true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated
hereby, as of the Effective Time, with the same force and effect as if made on
and as of the Effective Time, and (c) the further conditions that, at or before
the Effective Time:
4.1. This Agreement and the transactions contemplated hereby shall have
been duly adopted and approved by Trust's board of trustees and Corporation's
board of directors (each, a "board") and shall have been approved by Old Fund's
shareholders in accordance with applicable law at a meeting thereof duly held to
consider and act on this Agreement;
4.2. All necessary filings shall have been made with the SEC and state
securities authorities, and no order or directive shall have been received that
any other or further action is required to permit the parties to carry out the
transactions contemplated hereby. All consents, orders, and permits of federal,
state, and local regulatory authorities (including the SEC and state securities
authorities) deemed necessary by either Investment Company to permit
consummation, in all material respects, of the transactions contemplated hereby
shall have been obtained, except where failure to obtain same would not involve
a risk of a material adverse effect on the assets or properties of either Fund,
provided that either Investment Company may for itself waive any of such
conditions;
4.3. Trust shall have received an opinion of Kirkpatrick & Lockhart
LLP, substantially to the effect that:
4.3.1. At or before the Effective Time, New Fund will be a
duly established and designated series of Corporation, which is a
Maryland corporation duly organized and validly existing under the laws
of the State of Maryland with power under its Articles of Incorporation
to own all of its properties and assets and, to the knowledge of such
counsel, to carry on its business as presently conducted;
B-10
<PAGE>
4.3.2. This Agreement (a) has been duly authorized, executed,
and delivered by Corporation on behalf of New Fund and (b) assuming due
authorization, execution, and delivery of this Agreement by Trust on
behalf of Old Fund, is a valid and legally binding obligation of
Corporation with respect to New Fund, enforceable in accordance with
its terms, except as the same may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium, and similar laws
relating to or affecting creditors' rights and by general principles of
equity;
4.3.3. The New Fund Shares to be issued and distributed to the
Shareholders under this Agreement, assuming their due delivery as
contemplated by this Agreement, will be duly authorized and validly
issued and outstanding and fully paid and non-assessable, and no
shareholder of New Fund has any preemptive right to subscribe for or
purchase such shares;
4.3.4. The execution and delivery of this Agreement did not,
and the consummation of the transactions contemplated hereby will not,
materially violate Corporation's Articles of Incorporation or By-Laws
or any provision of any agreement (known to such counsel, without any
independent inquiry or investigation) to which Corporation (with
respect to New Fund) is a party or by which it is bound or (to the
knowledge of such counsel, without any independent inquiry or
investigation) result in the acceleration of any obligation, or the
imposition of any penalty, under any agreement, judgment, or decree to
which Corporation (with respect to New Fund) is a party or by which it
is bound, except as set forth in such opinion or as otherwise disclosed
in writing to and accepted by Trust;
4.3.5. To the knowledge of such counsel (without any
independent inquiry or investigation), no consent, approval,
authorization, or order of any court or governmental authority is
required for the consummation by Corporation on behalf of New Fund of
the transactions contemplated hereby, except such as have been obtained
under the 1933 Act, the 1934 Act, and the 1940 Act and may be required
under state securities laws;
4.3.6. Corporation is registered with the SEC as an investment
company, and to the knowledge of such counsel no order has been issued
or proceeding instituted to suspend such registration; and
4.3.7. To the knowledge of such counsel (without any
independent inquiry or investigation), (a) no litigation,
administrative proceeding, or investigation of or before any court or
governmental body is pending or threatened as to Corporation (with
respect to New Fund) or any of its properties or assets attributable or
allocable to New Fund and (b) Corporation (with respect to New Fund) is
not a party to or subject to the provisions of any order, decree, or
judgment of any court or governmental body that materially and
adversely affects New Fund's business, except as set forth in such
opinion or as otherwise disclosed in writing to and accepted by Trust.
B-11
<PAGE>
In rendering such opinion, such counsel may (i) rely, as to matters governed by
the laws of the State of Maryland, on an opinion of competent Maryland counsel,
(ii) make assumptions regarding the authenticity, genuineness, and/or conformity
of documents and copies thereof without independent verification thereof, (iii)
limit such opinion to applicable federal and state law, and (iv) define the word
"knowledge" and related terms to mean the knowledge of attorneys then with such
firm who have devoted substantive attention to matters directly related to this
Agreement and the Reorganization;
4.4. Corporation shall have received an opinion of Kirkpatrick &
Lockhart LLP, substantially to the effect that:
4.4.1. Trust is a Business Trust duly organized and validly
existing under the laws of the Commonwealth of Massachusetts with power
under the Declaration of Trust to own all of its properties and assets
and, to the knowledge of such counsel, to carry on its business as
presently conducted;
4.4.2. This Agreement (a) has been duly authorized, executed,
and delivered by Trust on behalf of Old Fund and (b) assuming due
authorization, execution, and delivery of this Agreement by Corporation
on behalf of New Fund, is a valid and legally binding obligation of
Trust with respect to Old Fund, enforceable in accordance with its
terms, except as the same may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium, and similar laws
relating to or affecting creditors' rights and by general principles of
equity;
4.4.3. The execution and delivery of this Agreement did not,
and the consummation of the transactions contemplated hereby will not,
materially violate the Declaration of Trust or Trust's By-Laws or any
provision of any agreement (known to such counsel, without any
independent inquiry or investigation) to which Trust (with respect to
Old Fund) is a party or by which it is bound or (to the knowledge of
such counsel, without any independent inquiry or investigation) result
in the acceleration of any obligation, or the imposition of any
penalty, under any agreement, judgment, or decree to which Trust (with
respect to Old Fund) is a party or by which it is bound, except as set
forth in such opinion or as otherwise disclosed in writing to and
accepted by Corporation;
4.4.4. To the knowledge of such counsel (without any
independent inquiry or investigation), no consent, approval,
authorization, or order of any court or governmental authority is
required for the consummation by Trust on behalf of Old Fund of the
transactions contemplated hereby, except such as have been obtained
under the 1933 Act, the 1934 Act, and the 1940 Act and such as may be
required under state securities laws;
4.4.5. Trust is registered with the SEC as an investment
company, and to the knowledge of such counsel no order has been issued
or proceeding instituted to suspend such registration; and
B-12
<PAGE>
4.4.6. To the knowledge of such counsel (without any
independent inquiry or investigation), (a) no litigation,
administrative proceeding, or investigation of or before any court or
governmental body is pending or threatened as to Trust (with respect to
Old Fund) or any of its properties or assets attributable or allocable
to Old Fund and (b) Trust (with respect to Old Fund) is not a party to
or subject to the provisions of any order, decree, or judgment of any
court or governmental body that materially and adversely affects Old
Fund's business, except as set forth in such opinion or as otherwise
disclosed in writing to and accepted by Corporation.
In rendering such opinion, such counsel may (i) rely, as to matters governed by
the laws of the Commonwealth of Massachusetts, on an opinion of competent
Massachusetts counsel, (ii) make assumptions regarding the authenticity,
genuineness, and/or conformity of documents and copies thereof without
independent verification thereof, (iii) limit such opinion to applicable federal
and state law, and (iv) define the word "knowledge" and related terms to mean
the knowledge of attorneys then with such firm who have devoted substantive
attention to matters directly related to this Agreement and the Reorganization;
4.5. Each Investment Company shall have received an opinion of
Kirkpatrick & Lockhart LLP, addressed to and in form and substance satisfactory
to it, as to the federal income tax consequences mentioned below ("Tax
Opinion"). In rendering the Tax Opinion, such counsel may rely as to factual
matters, exclusively and without independent verification, on the
representations made in this Agreement (or in separate letters addressed to such
counsel) and the certificates delivered pursuant to paragraph 2.4. The Tax
Opinion shall be substantially to the effect that, based on the facts and
assumptions stated therein and conditioned on consummation of the Reorganization
in accordance with this Agreement, for federal income tax purposes:
4.5.1. New Fund's acquisition of the Assets in exchange solely
for New Fund Shares and New Fund's assumption of the Liabilities,
followed by Old Fund's distribution of those shares PRO RATA to the
Shareholders constructively in exchange for the Shareholders' Old Fund
Shares, will qualify as a reorganization within the meaning of section
368(a)(1)(F) of the Code, and each Fund will be "a party to a
reorganization" within the meaning of section 368(b) of the Code;
4.5.2. Old Fund will recognize no gain or loss on the transfer
to New Fund of the Assets in exchange solely for New Fund Shares and
New Fund's assumption of the Liabilities or on the subsequent
distribution of those shares to the Shareholders in constructive
exchange for their Old Fund Shares;
4.5.3. New Fund will recognize no gain or loss on its receipt
of the Assets in exchange solely for New Fund Shares and its assumption
of the Liabilities;
4.5.4. New Fund's basis for the Assets will be the same as the
basis thereof in Old Fund's hands immediately before the
Reorganization, and New Fund's holding period for the Assets will
include Old Fund's holding period therefor;
B-13
<PAGE>
4.5.5. A Shareholder will recognize no gain or loss on the
constructive exchange of all its Old Fund Shares solely for New Fund
Shares pursuant to the Reorganization;
4.5.6. A Shareholder's aggregate basis for the New Fund Shares
to be received by it in the Reorganization will be the same as the
aggregate basis for its Old Fund Shares to be constructively
surrendered in exchange for those New Fund Shares, and its holding
period for those New Fund Shares will include its holding period for
those Old Fund Shares, provided they are held as capital assets by the
Shareholder at the Effective Time; and
4.5.7. For purposes of section 381 of the Code, New Fund will
be treated as if there had been no Reorganization. Accordingly, the
Reorganization will not result in the termination of Old Fund's taxable
year, Old Fund's tax attributes enumerated in section 381(c) of the
Code will be taken into account by New Fund as if there had been no
Reorganization, and the part of Old Fund's taxable year before the
Reorganization will be included in New Fund's taxable year after the
Reorganization;
4.6. Prior to the Closing, Corporation's directors shall have
authorized the issuance of, and New Fund shall have issued, to Legg Mason Fund
Adviser, Inc. ("LMFA") one Class A New Fund Share, one Primary Class New Fund
Share, and one Navigator Class New Fund Share in consideration of the payment of
$1.00 apiece to vote on the matters referred to in paragraph 4.7; and
4.7. Corporation, on behalf of and with respect to New Fund (or, in the
case of clauses (a)(ii)-(iv), the respective New Fund named therein), shall have
(a) entered into (i) an Investment Advisory and Administration
Agreement with LMFA, (ii) on behalf of and with respect to Legg Mason
Europe Fund only, a Sub-Advisory Agreement with Lombard Odier
International Portfolio Management Limited, (iii) on behalf of and with
respect to Legg Mason Financial Services Fund only, a Sub-Advisory
Agreement with Gray, Seifert & Co., Inc., (iv) on behalf of Legg Mason
Basic Value Fund only, a Sub-Advisory Agreement with Bartlett & Co.,
(v) a Distribution Contract with Legg Mason Wood Walker, Inc., (vi) a
Plan of Distribution with respect to each of Class A New Fund Shares
and Primary Class New Fund Shares, and (vii) other agreements necessary
for New Fund's operation as a series of an open-end investment company,
and
(b) approved the applicability to New Fund of its existing
Transfer Agency Agreement with Boston Financial Data Services, Inc. and
its existing Custodian Agreement with State Street Bank & Trust
Company, the latter two agreements incorporating substantially the same
terms and conditions as those currently applicable to Old Fund.
Each such agreement, contract, and plan shall have been approved by
Corporation's directors and, to the extent required by law, by such of
B-14
<PAGE>
those directors who are not "interested persons" thereof (as defined in
the 1940 Act) and by LMFA as the sole shareholder of New Fund.
At any time before the Closing, either Investment Company may waive any of the
foregoing conditions (except that set forth in paragraph 4.1) if, in the
judgment of its board, such waiver will not have a material adverse effect on
its Fund's shareholders' interests.
5. BROKERAGE FEES AND EXPENSES
---------------------------
5.1. Each Investment Company represents and warrants to the other that
there are no brokers or finders entitled to receive any payments in connection
with the transactions provided for herein.
5.2. Except as otherwise provided herein, the total Reorganization
Expenses will be borne by LMFA.
6. ENTIRE AGREEMENT; NO SURVIVAL
-----------------------------
Neither party has made any representation, warranty, or covenant not
set forth herein, and this Agreement constitutes the entire agreement between
the parties. The representations, warranties, and covenants contained herein or
in any document delivered pursuant hereto or in connection herewith shall not
survive the Closing.
7. TERMINATION
-----------
This Agreement may be terminated at any time at or prior to the
Effective Time, whether before or after approval by Old Fund's shareholders:
7.1. By either Fund (a) in the event of the other Fund's material
breach of any representation, warranty, or covenant contained herein to be
performed at or prior to the Effective Time, (b) if a condition to its
obligations has not been met and it reasonably appears that such condition will
not or cannot be met, or (c) if the Closing has not occurred on or before
_______ __, 1999; or
7.2. By the parties' mutual agreement.
In the event of termination under paragraphs 7.1(c) or 7.2, there shall be no
liability for damages on the part of either Fund, or the trustees/directors or
officers of either Investment Company, to the other Fund.
8. AMENDMENT
---------
This Agreement may be amended, modified, or supplemented at any time,
notwithstanding approval thereof by Old Fund's shareholders, in such manner as
may be mutually agreed upon in writing by the parties; provided that following
such approval no such amendment shall have a material adverse effect on the
Shareholders' interests.
B-15
<PAGE>
9. MISCELLANEOUS
-------------
9.1. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of Maryland; provided that, in the case of
any conflict between such laws and the federal securities laws, the latter shall
govern.
9.2. Nothing expressed or implied herein is intended or shall be
construed to confer upon or give any person, firm, trust, or corporation other
than the parties and their respective successors and assigns any rights or
remedies under or by reason of this Agreement.
9.3. This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement, and shall become effective
when one or more counterparts have been executed by each Investment Company and
delivered to the other party hereto. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
9.4. The parties acknowledge that Trust is a Business Trust. Notice is
hereby given that this instrument is executed on behalf of Trust's trustees
solely in their capacities as trustees, and not individually, and that Trust's
obligations under this instrument are not binding on or enforceable against any
of its trustees, officers, or shareholders but are only binding on and
enforceable against Old Fund's assets and property. New Fund agrees that, in
asserting any rights or claims under this Agreement, it shall look only to Old
Fund's assets and property in settlement of such rights or claims and not to
such trustees or shareholders.
IN WITNESS WHEREOF, each party has caused this Agreement to be executed
and delivered by its duly authorized officers as of the day and year first
written above.
ATTEST: BARTLETT CAPITAL TRUST,
on behalf of its series,
Bartlett Europe Fund
Bartlett Financial Services Fund
Bartlett Basic Value Fund
By:
- ----------------------- --------------------------------
Secretary Vice President
B-16
<PAGE>
ATTEST: LEGG MASON GLOBAL TRUST, INC.,
on behalf of its series,
Legg Mason Europe Fund
By:
- -------------------- -----------------------------
Secretary Vice President
ATTEST: LEGG MASON INVESTORS TRUST, INC.,
on behalf of its series,
Legg Mason Financial Services Fund
Legg Mason Basic Value Fund
By:
- -------------------- -----------------------------
Secretary Vice President
B-17
<PAGE>
SCHEDULE A
OLD FUNDS NEW FUNDS
Bartlett Europe Fund Legg Mason Europe Fund
Bartlett Financial Services Fund Legg Mason Financial Services Fund
Bartlett Basic Value Fund Legg Mason Basic Value Fund
B-18
<PAGE>
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
RECORD DATE SHARES
BARTLETT EUROPE FUND:
Please be sure to sign and date this Proxy. Date
Shareholder sign here Co-owner sign here
DETACH CARD
FOR AGAINST ABSTAIN
1. Approval of an Agreement and Plan of Conversion [ ] [ ] [ ]
and Termination providing for the conversion of
Bartlett Europe Fund from a separate series of
Bartlett Capital Trust, to Legg Mason Europe
Fund, a separate series of Legg Mason Global
Trust, Inc.
MARK BOX AT RIGHT IF AN ADDRESS CHANGE OR COMMENT HAS BEEN NOTED
ON THE REVERSE SIDE OF THIS CARD. [ ]
DETACH CARD
<PAGE>
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
RECORD DATE SHARES
BARTLETT BASIC VALUE FUND:
PLEASE BE SURE TO SIGN AND DATE THIS PROXY. DATE:
SHAREHOLDER SIGN HERE CO-OWNER SIGN HERE
DETACH CARD
FOR AGAINST ABSTAIN
1. Approval of an Agreement and Plan of Conversion [ ] [ ] [ ]
and Termination providing for the conversion of
Bartlett Basic Value Fund from a separate
series of Bartlett Capital Trust, to Legg Mason
Basic Value Fund, a separate series of Legg
Mason Investors Trust, Inc.
MARK BOX AT RIGHT IF AN ADDRESS CHANGE OR COMMENT HAS BEEN NOTED
ON THE REVERSE SIDE OF THIS CARD. [ ]
DETACH CARD
<PAGE>
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
RECORD DATE SHARES
BARTLETT FINANCIAL SERVICES FUND:
Please be sure to sign and date this Proxy. Date:
Shareholder sign here Co-owner sign here
DETACH CARD
FOR AGAINST ABSTAIN
1. Approval of an Agreement and Plan of Conversion [ ] [ ] [ ]
and Termination providing for the conversion of
Bartlett Financial Services Fund from a
separate series of Bartlett Capital Trust, to
Legg Mason Financial Services Fund, a separate
series of Legg Mason Investors Trust, Inc.
Mark box at right if an address change or comment has been noted
on the reverse side of this card. [ ]
DETACH CARD
<PAGE>
[BARTLETT CAPITAL TRUST LOGO]
This proxy is solicited by the Board of Trustees
The undersigned, revoking any previous proxies, hereby appoints __________ and
__________, or any one or more of them, attorneys, with full power of
substitution, to vote all shares of Bartlett Europe Fund, Bartlett Basic Value
Fund and Bartlett Financial Services Fund which the undersigned is entitled to
vote at the Special Meeting of Shareholders of the Trust to be held at the
office of Bartlett Capital Trust, 100 Light Street, Baltimore, Maryland 21202,
on September 23, 1999 at 10:00 a.m., and at any adjournments thereof. All powers
may be exercised by a majority of said proxy holders or substitutes voting or
acting or, if only one votes and acts, then by that one. This proxy will be
voted on the proposal described in the Proxy Statement as specified in the
spaces on the reverse side of this card. Receipt of the Notice of the Meeting
and the accompanying Proxy Statement is hereby acknowledged.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder(s). If no direction is made on Proposal 1, this
proxy will be voted FOR Proposal 1.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE.
Please sign this proxy exactly as your name(s) appear(s) on the books of the
Bartlett Funds. 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, the signature should
be that of an authorized officer who should state his or her title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------- --------------------------------
- ------------------------------- --------------------------------
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