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Registration No. 2-94935
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14A-
6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Cortland Trust, Inc.
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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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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Cortland Trust, Inc.
Cortland General Money Market Fund
U.S. Government Fund
Municipal Money Market Fund
(the "Funds")
600 Fifth Avenue
New York, New York 10020
August 21, 2000
Dear Shareholder:
As we announced to you in July, the parent company of the Funds' adviser has
entered into an agreement to be acquired by CDC Asset Management, a leading
French financial institution, as more fully described in the enclosed proxy
statement. As a result, we are soliciting your vote for approval of an item as
described in the enclosed proxy statement. Reading this letter completely may
make your review of the proxy statement easier. We ask that you review the
proxy statement and vote your shares promptly. You can vote by returning the
enclosed card or following the instructions located on your proxy card to vote
via the Internet or touch-tone phone.
Q. What is the Proposal about?
The proposal is described in the enclosed proxy statement.
The proposal relates to the advisory agreement for your Fund. The laws
governing mutual funds generally require that when an investment adviser
undergoes a change in ownership, the advisory agreement with a fund will
terminate. In order for your Fund to continue with Reich & Tang Asset
Management L.P. as the investment adviser, shareholders must approve the new
form of agreement. The proposed new agreement is substantially the same as the
current agreement. Fees will not change and no changes are planned to the
portfolio managers of your Fund.
Q. How will the CDC transaction affect your Fund?
The transaction is not expected to affect the daily operations of your Fund
or the investment management activities of Reich & Tang Asset Management L.P.
Reich & Tang Asset Management L.P. and the Fund will continue to operate
autonomously, but will be part of a larger organization with the resources of
CDC Asset Management. We will continue to work to meet your expectations for
competitive performance and high quality customer service. The Funds'
investment
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objectives, strategies and portfolio managers are not expected to change as a
result of the transaction.
Remember--Your Vote Counts!
Your vote is extremely important, even if you only own a few Fund shares.
Voting promptly is also important. If we do not receive enough votes, we will
have to resolicit shareholders, which can be time consuming and may delay the
meeting. You may receive a reminder call to return your proxy from D.F. King &
Company, a proxy solicitation firm.
Now you can use the Internet or your telephone, if you want to vote
electronically. Please see your proxy card for more information and the
instructions. If you do vote electronically, you do not need to mail your
proxy card. However, if you want to change your vote you may do so using the
proxy card, telephone or Internet.
Thank you for your cooperation in voting on this important proposal. If you
have questions, please call your financial representative. Or, if your
questions relate specifically to the proposal, please call our service center
representatives toll-free at 1-800-221-3079.
Sincerely,
Signature = /s/ Steven W. Duff
Steven W. Duff
President
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Cortland Trust, Inc.
Cortland General Money Market Fund
U.S. Government Fund
Municipal Money Market Fund
[LOGO OF LIVE OAK SHARES]
(the "Funds")
600 Fifth Avenue
New York, New York 10020
August 21, 2000
Dear Shareholder:
As we announced to you in July, the parent company of the Funds' adviser has
entered into an agreement to be acquired by CDC Asset Management, a leading
French financial institution, as more fully described in the enclosed proxy
statement. As a result, we are soliciting your vote for approval of certain
items as described in the enclosed proxy statement. Reading this letter
completely may make your review of the proxy statement easier. We ask that you
review the proxy statement and vote your shares promptly. You can vote by
returning the enclosed card or following the instructions located on your
proxy card to vote via the Internet or touch-tone phone.
Q. What is the Proposal about?
The proposal is described in the enclosed proxy statement.
The proposal relates to the advisory agreement for your Fund. The laws
governing mutual funds generally require that when an investment adviser
undergoes a change in ownership, the advisory agreement with a fund will
terminate. In order for your Fund to continue with Reich & Tang Asset
Management L.P. as the investment adviser, shareholders must approve the new
form of agreement. The proposed new agreement is substantially the same as the
current agreement. Fees will not change and no changes are planned to the
portfolio managers of your Fund.
Q. How will the CDC transaction affect your Fund?
The transaction is not expected to affect the daily operations of your Fund
or the investment management activities of Reich & Tang Asset Management L.P.
Reich & Tang Asset Management L.P. and the Fund will continue to operate
autonomously, but will be part of a larger organization with the resources of
CDC Asset Management. We will continue to work to meet your expectations for
competitive performance and high quality customer service. The Funds'
investment
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Cortland Trust Inc.
600 Fifth Avenue
New York, New York 10020
Cortland General Money Market Fund
U.S. Government Fund
Municipal Money Market Fund
(the "Funds")
Notice of Special Meeting of Shareholders
October 10, 2000
A Special Meeting of the shareholders of each Fund will be held at the
offices of Reich & Tang Asset Management L.P., 600 Fifth Avenue, New York, New
York on Tuesday, October 10, 2000 at 9:45 a.m. for these purposes:
1. To approve a new Management/Investment Advisory Agreement with Reich
& Tang Asset Management L.P. for each Fund.
2. To consider and act upon any other matters that properly come before
the meeting and any adjourned session of the meeting.
Shareholders of record at the close of business on August 15, 2000 are
entitled to notice of and to vote at the meeting and any adjourned session.
By order of the Board of
Directors,
Bernadette N. Finn
Secretary
August 21, 2000
Please respond. Your vote is important. Please complete, sign, date and
return the enclosed proxy card, whether or not you plan to attend the
meeting.
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PROXY STATEMENT
Cortland Trust Inc.
600 Fifth Avenue
New York, New York 10020
Cortland General Money Market Fund
U.S. Government Fund
Municipal Money Market Fund
(the "Funds")
The Directors of Cortland Trust, Inc. (the "Directors") are soliciting
proxies from the shareholders of each of the Funds in connection with a
Special Meeting of Shareholders of each Fund (the "Meeting"). The Meeting has
been called to be held on Tuesday, October 10, 2000 at 9:45 a.m. at the
offices of Reich & Tang Asset Management L.P., 600 Fifth Avenue, New York, New
York. The meeting notice, this Proxy Statement and proxy cards are being sent
to shareholders of record on August 15, 2000 (the "Record Date") beginning on
or about August 21, 2000.
The only item of business that the Directors expect will come before the
Meeting is approval of a new Management/Investment Advisory Agreement for each
Fund (each Fund's "New Advisory Agreement") with Reich & Tang Asset Management
L.P., (the "Adviser"). As explained below, the proposed New Advisory Agreement
for each Fund is identical (except for its date) to the Management/Investment
Advisory Agreement currently in effect for that Fund (each Fund's "Current
Advisory Agreement").
The reason the Directors are proposing the New Advisory Agreement for each
Fund is that the Current Advisory Agreements will terminate when the Adviser's
parent company, Nvest Companies, L.P. ("Nvest"), is acquired by a new parent
company, CDC Asset Management ("CDC AM"). (A federal law, the Investment
Company Act of 1940 (the "Investment Company Act"), provides generally that
the advisory agreements of mutual funds automatically terminate when the
investment adviser or its parent company undergo a significant change of
ownership.) The Directors have carefully considered the matter, and have
concluded that it is appropriate to enter into the New Advisory Agreement for
each Fund, so that the Adviser can continue to manage each Fund on the same
terms as are now in effect, following the acquisition of Nvest by CDC AM.
The acquisition of Nvest by CDC AM will occur only if various conditions are
satisfied (or waived by the parties, if permitted by law). These conditions
include, among others, certain government approvals of the acquisition and
approval of the acquisition by vote of the unitholders of Nvest and Nvest,
L.P. ("Nvest, L.P."), Nvest's advising general partner. Nvest currently
expects that the
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acquisition will occur during the fourth calendar quarter of 2000, but the
acquisition could be delayed. If the acquisition does not occur, the New
Advisory Agreements would not be needed because the automatic termination of
the Current Advisory Agreements would not occur.
Under the Investment Company Act, a Fund cannot enter into a New Advisory
Agreement unless the shareholders of that Fund vote to approve the New
Advisory Agreement. The Meeting is being held to seek shareholder approval of
the New Advisory Agreements. No change in advisory fee rate is being proposed.
Shareholders of each Fund will vote only with regard to the New Advisory
Agreement for their own Fund. Each share is entitled to cast one vote, and
fractional shares are entitled to a proportionate fractional vote.
The Directors recommend that the shareholders of each Fund vote to approve
the New Advisory Agreement for their Fund.
Description of the New Advisory Agreements
The New Advisory Agreement for each Fund is identical to the Current
Advisory Agreement for that Fund, except that the date of each New Advisory
Agreement will be the date that CDC AM acquires Nvest. Appendix A to this
Proxy Statement sets forth information about the Current Advisory Agreements,
including the dates of the Current Advisory Agreements and the advisory fee
rates under both the New Advisory Agreements and the Current Advisory
Agreements. Appendix B to this Proxy Statement contains the form of the
Advisory Agreements. Each Current Advisory Agreement and each New Advisory
Agreement matches the form in Appendix B, except for the names of the Funds
and the dates of the agreements. The next several paragraphs briefly summarize
some important provisions of the New Advisory Agreements, but for a complete
understanding of the agreements you should read Appendices A and B.
Each New Advisory Agreement essentially provides that the Adviser, under the
Directors' supervision, will (1) decide what securities to buy and sell for
the Fund's portfolio, (2) select broker-dealers to carry out portfolio
transactions for the Fund and (3) provide, either directly or indirectly
through contracts with others, all services for the management of the Fund.
Each New Advisory Agreement provides that it will continue in effect for an
initial period of two years (beginning on the date CDC AM acquires Nvest).
After that, it will continue in effect from year to year as long as the
continuation is approved at least annually (i) by the Directors or by vote of
a majority of the outstanding voting securities of the relevant Fund, and (ii)
by vote of a majority of the Directors who are not "interested persons," as
that term is defined in the
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Investment Company Act, of Cortland Trust, Inc. (the "Trust") or the Adviser
(these Directors who are not "interested persons" are referred to below as the
"Independent Directors").
Each New Advisory Agreement may be terminated without penalty by vote of the
Directors or by vote of a majority of the outstanding voting securities of the
relevant Fund, on sixty days' written notice to the Adviser, or by the Adviser
upon sixty days' written notice to the Trust, and each terminates
automatically in the event of its "assignment" as defined in the Investment
Company Act. The Investment Company Act defines "assignment" to include, in
general, transactions in which a significant change in the ownership of an
investment adviser or its parent company occur (such as the acquisition of
Nvest by CDC AM).
Each New Advisory Agreement provides that the Adviser will not be liable to
the relevant Fund or its shareholders, except for liability arising from the
Adviser's willful misfeasance, bad faith, gross negligence or reckless
disregard of duty.
Distribution Agreements and Plans. Pursuant to Rule 12b-1 under the
Investment Company Act, the Securities and Exchange Commission has required
than an investment company which bears any direct or indirect expense of
distributing its shares must do so only in accordance with a plan permitted by
the Rule. The Trust's Board has adopted a distribution plan (the "Plan") for
each Fund and, pursuant to each Plan, each Fund has entered into a
Distribution Agreement with Reich & Tang Distributors, Inc. (the
"Distributor") as distributor of the Fund's shares. Because the acquisition of
Nvest by CDC AM will be considered to result in the assignment of the Funds'
Distribution Agreements with the Distributor, causing those agreements to
terminate upon the acquisition, the Directors of the Trust approved a new
Distribution Agreement with Reich & Tang Distributors, Inc. for each of the
Funds to take effect if New Advisory Agreements are approved by shareholders
of the Funds and upon consummation of the acquisition. The new agreements
would replace the current agreements with the Distributor and would be
identical to those agreements, except for the dates of execution and
effectiveness. These new agreements do not require the approval of the Trust's
shareholders.
Basis for the Directors' Recommendation
The Directors determined at a meeting held on July 25, 2000 to recommend
that each Fund's shareholders vote to approve the New Advisory Agreement for
their Fund.
In coming to this recommendation, the Directors considered a wide range of
information of the type they regularly consider when determining whether to
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continue a Fund's advisory agreement in effect from year to year. The
Directors considered information about, among other things:
. the Adviser and its personnel (including particularly those personnel
with responsibilities for providing services to the Funds), resources
and investment process;
. the terms of the relevant advisory agreements (in this case, the New
Advisory Agreements);
. the scope and quality of the services that the Adviser has been
providing to the Funds;
. the investment performance of the Funds and of similar funds managed
by other advisers;
. the advisory fee rates payable to the Adviser by the Funds and by
other funds and client accounts managed by the Adviser, and payable by
similar funds managed by other advisers (Appendix C to this Proxy
Statement contains information comparing each Fund's advisory fee
schedule to the fee schedule for other funds managed by the Adviser
that have investment objectives similar to the Funds');
. the total expense ratios of the Funds and of similar funds managed by
other advisers; and
. the Adviser's practices regarding the selection and compensation of
broker-dealers that execute portfolio transactions for the Funds, and
the allocation of transactions among the Funds and other investment
accounts managed by the Adviser (see "Portfolio Transactions" below
for more information about these matters).
In addition to reviewing these kinds of information, which the Directors
regularly consider on an annual or more frequent basis, the Directors gave
particular consideration to matters relating to the possible effects on the
Adviser and the Funds of the acquisition of Nvest by CDC AM. Among other
things, the Directors considered:
. the stated intention of Nvest and CDC AM that the Adviser will
continue to have a high degree of managerial autonomy from its parent
organizations and from other subsidiaries of Nvest;
. the stated intention of Nvest, CDC AM and the Adviser that the
acquisition not change the investment approach or process used by the
Adviser in managing the Funds;
. representations of senior executives of the Adviser and the portfolio
managers of the Funds that they have no intention of terminating their
employment with the Adviser as a result of CDC AM's acquisition of
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Nvest, and representations of the Adviser, Nvest and CDC AM that they
have no intention of terminating the employment of these executives or
portfolio managers as a result of the acquisition;
. certain actions taken by CDC AM, Nvest and the Adviser to help retain
and incent key personnel of Nvest and the Adviser;
. assurances from the Adviser that it has no plans, as a result of or in
connection with CDC AM's acquisition of Nvest, to change or
discontinue existing arrangements under which it waives fees or bears
expenses of certain of the Funds;
. the general reputation and the financial resources of CDC AM and its
parent organizations; and
. the fact that affiliates of the Adviser who currently provide transfer
agency and distribution services to the Funds are willing to continue
to do so following the acquisition, at no cost to the Funds.
In addition, the Directors considered that the agreement relating to the
acquisition of Nvest by CDC AM provides that CDC AM and its immediate parent
company will (subject to certain qualifications) use their reasonable best
efforts to assure compliance with Section 15(f) of the Investment Company Act.
Section 15(f) provides that a mutual fund investment adviser or its affiliates
can receive benefit or compensation in connection with a change of control of
the investment adviser (such as CDC AM's acquisition of the Adviser's parent,
Nvest) if two conditions are satisfied. First, for three years after the
change of control, at least 75% of the members of the board of any registered
investment company advised by the adviser must consist of persons who are not
"interested persons," as defined in the Investment Company Act, of the
adviser. (No changes in the current composition of the Directors are required
to satisfy this condition.) Second, no "unfair burden" may be imposed on any
such registered investment company as a result of the change of control
transaction or any express or implied terms, conditions or understandings
applicable to the transaction. "Unfair burden" means any arrangement, during
the two years after the transaction, by which the investment adviser or any
"interested person" of the adviser receives or is entitled to receive any
compensation, directly or indirectly, from such investment company or its
security holders (other than fees for bona fide investment advisory or other
services) or from any other person in connection with the purchase or sale of
securities or other property to, from or on behalf of such investment company.
After carefully considering the information summarized above, the Directors,
including the Independent Directors, unanimously voted to approve the New
Advisory Agreement for each Fund and to recommend that each Fund's
shareholders vote to approve the New Advisory Agreement for their Fund.
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Information About the Ownership of the Adviser and the CDC AM/Nvest
Transaction
The Adviser is a limited partnership that has one general partner, Reich &
Tang Asset Management, Inc. (the "Adviser General Partner"). Mr. Steven W.
Duff is principal executive officer of the Adviser's Mutual Funds Division.
His principal occupation is his position with the Adviser's Mutual Funds
Division. The address of the Adviser, the Adviser General Partner and Mr. Duff
is 600 Fifth Avenue, New York, New York 10020. The Adviser General Partner is
a direct wholly-owned subsidiary of Nvest Holdings, Inc. ("Nvest Holdings"),
which in turn is a direct wholly-owned subsidiary of Nvest. Nvest's managing
general partner, Nvest Corporation, is a direct wholly-owned subsidiary of
MetLife New England Holdings, Inc. MetLife New England Holdings, Inc. is a
direct wholly-owned subsidiary of Metropolitan Life Insurance Company
("MetLife"). Nvest Corporation is also the sole general partner of Nvest, L.P.
Nvest, L.P., Nvest's advising general partner, is a publicly traded company
listed on the New York Stock Exchange. In addition to owning Nvest
Corporation, MetLife owns, directly or indirectly, approximately a 48% limited
partnership interest in Nvest. Nvest, L.P. owns approximately 15% of Nvest.
(These percentages, which are as of June 30, 2000, do not reflect the vesting
and exercise, described below, of various options held by personnel of Nvest
and of its affiliates, including the Adviser, to acquire limited partnership
units of Nvest, L.P.) If the proposed acquisition is completed, Nvest
Corporation will cease to be the managing general partner of Nvest and the
general partner of Nvest, L.P., and MetLife will cease to own any partnership
interest in Nvest. MetLife is a wholly-owned subsidiary of MetLife, Inc., a
publicly traded company listed on the New York Stock Exchange. The address of
Nvest, Nvest Corporation, Nvest Holdings and Nvest, L.P. is 399 Boylston
Street, Boston, Massachusetts 02116. The address of MetLife New England
Holdings, Inc., MetLife and MetLife, Inc. is One Madison Avenue, New York, New
York 10010.
On June 16, 2000, Nvest and CDC AM announced that they and certain of their
respective affiliated companies had entered into an Agreement and Plan of
Merger (the "Merger Agreement"). Under the Merger Agreement, CDC AM would
acquire all of the outstanding units of partnership interest in both Nvest and
Nvest, L.P., at a price of $40 per unit. This price is subject to reduction
(but not below $34 per unit) based in part on a formula that takes into
account the investment advisory fees payable to the Adviser and other Nvest
affiliates by their mutual fund and other investment advisory clients that
have consented to the transaction. Under this formula, the price per unit that
CDC AM will pay to acquire Nvest, including the price it will pay to those
directors and officers who hold or have been granted options to acquire units
(see below), could be reduced if a Fund's shareholders do not approve the New
Advisory Agreement for their Fund. Assuming a transaction price of $40 per
unit, and the number of units and options
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outstanding as of June 30, 2000, the aggregate price payable by CDC AM to
acquire all of the units of Nvest will be approximately $1.5 billion, and the
aggregate price payable by CDC AM to acquire all of the units of Nvest, L.P.
(including payments with respect to units subject to options) will be
approximately $375 million.
The transaction will not occur unless various conditions are satisfied (or
waived by the parties, if permitted by law). One of these conditions is
obtaining approval or consent from investment advisory clients of the Adviser
and other Nvest affiliates (including mutual fund clients) whose advisory fees
represent a specified percentage of the total advisory fee revenues of the
Nvest organization. Because of this condition, approval or disapproval by a
Fund's shareholders of a New Advisory Agreement for their Fund, taken together
with other clients' consents or approvals, could affect whether or not the
transaction occurs. As described below, certain directors and officers of the
Trust will receive certain material payments or benefits if the transaction
occurs. The transaction will result in the automatic termination of the
Current Advisory Agreements. If for some reason the transaction does not
occur, the automatic termination of the Current Advisory Agreements will not
occur, and the New Advisory Agreements will not be entered into, even if they
have been approved by the Funds' shareholders.
As a result of the acquisition, Nvest and Nvest, L.P. would become indirect
wholly-owned subsidiaries of CDC AM, which in turn is 60% owned by CDC
Finance, a wholly-owned subsidiary of Caisse des depots et Consignations
("CDC"). Founded in 1816, CDC is a major diversified financial institution
with a strong global presence in the banking, insurance, investment banking,
asset management and global custody industries. In addition to its 60%
ownership of CDC AM through CDC Finance, CDC owns 40% of CNP Assurances, the
leading French insurance company, which itself owns 20% of CDC AM. CDC also
owns 35% of Caisse National des Caisses d'Epargne, which also owns 20% of CDC
AM. CDC is 100% owned by the French state. The main place of business of CDC
AM is 7, place des Cinq Martyrs du Lycee Buffon, 75015 Paris, France. The
registered address of CDC Finance is 56, rue de Lille, 75007 Paris, France.
The registered address of CDC is 56, rue de Lille, 75007 Paris, France. The
registered address of CNP Assurances is 4, place Raoul Dautry, 75015 Paris,
France. The registered address of Caisse National des Caisses d'Epargne is 5,
rue Masseran, 75007 Paris, France. Following the acquisition, it is expected
that Nvest will be renamed CDC Asset Management-North America.
Various personnel of Nvest and of its affiliates, including the Adviser,
have previously been granted options to purchase limited partnership units of
Nvest, L.P. ("Nvest L.P. Units"). The Merger Agreement provides that these
options will vest and become fully exercisable immediately before CDC AM's
acquisition of Nvest
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and Nvest, L.P., even though some of these options would not otherwise have
vested or been exercisable at that time. Each option will be converted into
the right to receive cash from Nvest in an amount equal to the difference
between the option's exercise price and the transaction price of $40 per unit
(subject to reduction, but not below $34 per unit, as explained above).
Certain Relationships and Interests of Trust Directors and Officers. Steven
W. Duff, a Director and officer of the Trust, and the following persons who
are Directors or officers of the Trust are also officers or employees of the
Adviser or directors of the Adviser General Partner: Richard De Sanctis, Molly
Flewharty, Bernadette N. Finn, Roseanne Holtzer, Dana Messina and Ruben Torres
(collectively, the "Adviser Affiliates"). Some of the Adviser Affiliates,
including Mr. Duff, own partnership units in Nvest or Nvest, L.P. or have the
right to acquire partnership units under options and, upon completion of CDC
AM's acquisition of Nvest, will receive the consideration provided in the
Merger Agreement for the partnership units they own or have the right to
acquire under options. Depending on the number of units an Adviser Affiliate
owns or has the right to acquire, the amount of consideration he or she
receives could be substantial. Also, in connection with CDC AM's acquisition
of Nvest, CDC AM will establish a retention program under which certain
Adviser Affiliates, including Mr. Duff, may receive cash retention awards
payable over one to three years. To receive these awards, which are in
addition to regular salary and bonus payments and in some cases may be
substantial in amount, an eligible Adviser Affiliate must remain employed by
the Adviser and must agree to refrain from competing with the Adviser and
soliciting clients of the Adviser.
Portfolio Transactions
In their consideration of the New Advisory Agreements, the Directors took
account of the Adviser's practices regarding the selection and compensation of
broker-dealers that execute portfolio transactions for the Funds, and the
allocation of transactions among the Funds and other investment accounts
managed by the Adviser. The Adviser has informed the Directors that it does
not expect to change these practices as a result of CDC AM's acquisition of
Nvest. The following is a summary of these practices:
The Adviser is responsible for decisions to buy and sell securities for the
Trust, broker-dealer selection and negotiation of commission rates. Since
purchases and sales of portfolio securities by the Trust are usually principal
transactions, the Funds incur little or no brokerage commissions. Fund
securities are normally purchased directly from the issuer or from a market
maker for the securities. The purchase price paid to dealers serving as market
makers may include a spread
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between the bid and asked prices. The Trust may also purchase securities from
underwriters at prices which include a commission paid by the issuer to the
underwriter.
The Trust does not seek to profit from short-term trading, and will
generally (but not always) hold portfolio securities to maturity. However, the
Adviser may seek to enhance the yield of the Funds by taking advantage of
yield disparities or other factors that occur in the money market. For
example, market conditions frequently result in similar securities trading at
different prices. The Adviser may dispose of any portfolio security prior to
its maturity if such disposition and reinvestment of proceeds are expected to
enhance yield consistent with the Adviser's judgment as to desirable portfolio
maturity structure or if such disposition is believed to be advisable due to
other circumstances or conditions. Each Fund is required to maintain an
average weighted portfolio maturity of 90 days or less and purchase only
instruments having remaining maturities of 397 days or less. Both may result
in relatively high portfolio turnover, but since brokerage commissions are not
normally paid on U.S. Government obligations, agencies, money market
obligations and municipal securities, the high rate of portfolio turnover is
not expected to have a material effect on the Funds' net income or expenses.
Allocation of transactions, including their frequency, to various dealers is
determined by the Adviser in its best judgment and in a manner deemed to be in
the best interest of shareholders of the Trust rather than by any formula. The
primary consideration is prompt execution of orders in an effective manner at
the most favorable price.
The Adviser and its affiliates manage several other investment accounts,
some of which may have objectives similar to the Funds'. It is possible that
at times, identical securities will be acceptable for one or more of such
investment accounts. However, the position of each account in the securities
of the same issue may vary and the length of time that each account may choose
to hold its investment in the securities of the same issue may likewise vary.
The timing and amount of purchase by each account will also be determined by
its cash position. If the purchase or sale of securities consistent with the
investment policies of the Funds and one or more of these accounts is
considered at or about the same time, transactions in such securities will be
allocated in good faith among the Funds and such accounts in a manner deemed
equitable by the Adviser. The Adviser may combine such transactions, in
accordance with applicable laws and regulations, in order to obtain the best
net price and most favorable execution. The allocation and combination of
simultaneous securities purchases on behalf of the three Funds will be made in
the same way that such purchases are allocated among or combined with those of
the Adviser's other accounts. Simultaneous transactions could adversely affect
the
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ability of a Fund to obtain or dispose of the full amount of a security which
it seeks to purchase or sell.
Other Information
Principal Distributor's Address. The address of the Funds' principal
distributor, Reich & Tang Distributors, Inc., is 600 Fifth Avenue, New York,
New York, 10020.
Fund Annual Reports. The Trust has previously sent its Annual Reports for
the period ended March 31, 2000 to its shareholders. You can obtain a copy of
these Reports without charge by writing to the Trust at 600 Fifth Avenue, New
York, New York 10020 or calling (800)-433-1918.
Certain Purchases and Sales of Securities of the Adviser, Nvest, Nvest, L.P.
and MetLife, Inc. No Board Member had any purchases or sales of any securities
of the Adviser, Nvest, Nvest, L.P. or MetLife, Inc. since the beginning of the
Funds' most recently completed fiscal year, except purchases or sales that
represented one percent or less of the outstanding securities of any class of
those companies.
Outstanding Shares and Significant Shareholders. Appendix D to this Proxy
Statement lists for each Fund entitled to vote at the Meeting the total number
of shares outstanding as of July 31, 2000. It also identifies holders of more
than 5% of each Fund, and contains information about the shareholdings in the
Funds of the Directors and the executive officers of the Funds.
Information About Proxies and the Conduct of the Meeting
Solicitation of Proxies. Proxies will be solicited primarily by mailing this
Proxy Statement and its enclosures, but proxies may also be solicited through
further mailings, telephone calls, personal interviews or e-mail by officers
of the Funds or by employees or agents of the Adviser or of Nvest and its
affiliated companies. In addition, D. F. King & Co., Inc. has been engaged to
assist in the solicitation of proxies, at an estimated cost of $6,000.
Costs of Solicitation. All of the costs of the Meeting, including the costs
of soliciting proxies, will be paid by the Adviser, Nvest and/or CDC AM. None
of these costs will be borne by the Funds.
Voting and Tabulation of Proxies. Shares represented by duly executed
proxies will be voted as instructed on the proxy. If no instructions are
given, the proxy will be voted in favor of the relevant New Advisory
Agreement. You can
revoke your proxy by sending a signed, written letter of revocation to the
Secretary
10
<PAGE>
of the Funds, by properly executing and submitting a later-dated proxy or by
attending the Meeting and voting in person.
Votes cast in person or by proxy at the Meeting will be counted by persons
appointed by the Funds as inspectors of election for the Meeting (the
"Inspectors"). A majority of the shares of any Fund outstanding on the record
date, present in person or represented by proxy, constitutes a quorum for the
transaction of business by the shareholders of that Fund at the Meeting. In
determining whether a quorum is present, the Inspectors will count shares
represented by proxies that reflect abstentions, and "broker non-votes," as
shares that are present and entitled to vote. Since these shares will be
counted as present, but not as voting in favor of any proposal, these shares
will have the same effect as if they cast votes against the proposal. "Broker
non-votes" are shares held by brokers or nominees as to which (i) the broker
or nominee does not have discretionary voting power and (ii) the broker or
nominee has not received instructions from the beneficial owner or other
person who is entitled to instruct how the shares will be voted.
Required Vote. For each Fund, the vote required to approve the New Advisory
Agreement is the lesser of (1) 67% of the shares of that Fund that are present
at the Meeting, if the holders of more than 50% of the shares of the Fund
outstanding as of the record date are present or represented by proxy at the
Meeting, or (2) more than 50% of the shares of the Fund outstanding on the
record date. If the required vote is not obtained for any Fund, the Directors
will consider what other actions to take in the best interests of the Funds.
Adjournments; Other Business. If any Fund has not received enough votes by
the time of the Meeting to approve that Fund's New Advisory Agreement, the
persons named as proxies may propose that the Meeting be adjourned one or more
times as to that Fund to permit further solicitation of proxies. Any
adjournment requires the affirmative vote of more than 50% of the total number
of shares of that Fund that are present in person or by proxy when the
adjournment is being voted on. The persons named as proxies will vote in favor
of any such adjournment all proxies that they are entitled to vote in favor of
the relevant Fund's New Advisory Agreement. They will vote against any such
adjournment any proxy that directs them to vote against the New Advisory
Agreement. They will not vote any proxy that directs them to abstain from
voting on the New Advisory Agreement.
The Meeting has been called to transact any business that properly comes
before it. The only business that management of the Funds intends to present
or knows that others will present is the approval of the New Advisory
Agreements. If any other matters properly come before the Meeting, and on all
matters incidental to the conduct of the Meeting, the persons named as proxies
intend to vote the proxies in accordance with their judgment, unless the
Secretary of the Funds has
11
<PAGE>
previously received written contrary instructions from the shareholder
entitled to vote the shares.
Shareholder Proposals at Future Meetings. The Trust does not hold annual or
other regular meetings of shareholders. Shareholder proposals to be presented
at any future meeting of shareholders of the Funds must be received by the
Funds in writing a reasonable amount of time before the Trust solicits proxies
for that meeting, in order to be considered for inclusion in the proxy
materials for that meeting.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. IF YOU DO NOT EXPECT TO
ATTEND THE MEETING, PLEASE SIGN YOUR PROXY CARD PROMPTLY AND RETURN IT IN THE
ENCLOSED ENVELOPE TO AVOID UNNECESSARY EXPENSE AND DELAY. NO POSTAGE IS
NECESSARY.
By order of the Board of
Directors
Bernadette N. Finn
Secretary
12
<PAGE>
Appendix A
FOR EACH OF THE TRUST'S FUNDS
<TABLE>
<CAPTION>
Description of
Director Action
Regarding
Current Date of Last
Management/ Submission
Date of Investment of Current Management/
Current Advisory Investment Advisory
Management/ Agreement Since Agreement for
Investment Beginning of Shareholder
Advisory Fee Rate Advisory Fund's Last Approval and Reason
Schedule/1/ Agreement Fiscal Year for Submission
----------------- ----------- --------------- ----------------------
<S> <C> <C> <C>
0.80% of the first $500 August 30, Approved for March 28, 1996
million of the Trust's 1996 continuation on in connection with
average June 15, 2000. the merger of
daily net assets, 0.775% of New England Mutual
the average daily net Life Insurance Company
assets of the into Metropolitan Life
Trust in excess of $500 Insurance Company.
million
but less than $1 billion,
0.75% of
the average daily net
assets of the Trust in
excess of $1 billion but
less than $1.5 billion,
plus 0.725% of the Trust's
average daily net assets in
excess of $1.5 billion.
</TABLE>
-----------
/1/The Adviser pays all of the expenses of the Trust and its Funds, except as
set forth below. The Trust is responsible for payment of the following
expenses not borne by the Adviser: (a) the fees of the Directors who are not
"interested persons" of the Trust, as defined by the Investment Company Act
and travel and related expenses of the Directors for attendance at meetings;
(b) interest, taxes and brokerage commissions (which can be expected to be
insignificant); (c) extraordinary expenses, if any, including, but not
limited to, legal claims and liabilities and litigation costs and any
indemnification related thereto; (d) any shareholder service or distribution
fee payable by the Trust under a plan of distribution; and (e) membership
dues of any industry association.
A-1
<PAGE>
Appendix B
FORM OF MANAGEMENT/INVESTMENT ADVISORY AGREEMENT
This Agreement is made as of the day of , 2000 by and between CORTLAND
TRUST, INC., a Maryland corporation (the "Fund") on behalf of its Fund
Series, and REICH & TANG ASSET MANAGEMENT, L.P., a Delaware limited
partnership (the "Manager"), with respect to the following recital of fact:
RECITAL
WHEREAS, the Fund is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended, (the
"1940 Act") and the rules and regulations promulgated thereunder; and
WHEREAS, the Manager is registered as an investment advisor under the
Investment Advisers Act of 1940, as amended, and engages in the business of
acting as an investment advisor; and
WHEREAS, the Fund is authorized to issue shares of common stock in separate
series, with each such series representing shares in a separate portfolio of
securities and other assets; and
WHEREAS, the Fund intends to offer shares in three series called the U.S.
Government Fund, the Cortland General Money Market Fund and the Municipal
Money Market Fund (such series, being referred to as the "Series"); and
WHEREAS, the Fund and the Manager desire to enter into an agreement to
provide for comprehensive management and investment advisory services for the
Fund (the " ") on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. Appointment of the Manager. The Manager shall manage the Fund's affairs
and shall supervise all aspects of the Fund's operations (except as otherwise
set forth herein) and provide or procure on behalf of the Fund all investment
management, administrative and distribution services, as set forth below,
subject at all times to the policies and control of the Fund's Board of
Directors. The Manager shall give the Fund the benefit of its best judgment,
efforts and facilities in rendering its services as Manager. The Manager
shall, for all purposes herein, be deemed an independent contractor and shall
have, unless otherwise expressly
B-1
<PAGE>
provided or authorized, no authority to act for or represent the Fund in any
way or otherwise be deemed an agent of the Fund. The Manager's specific
responsibilities shall include the following:
2. Investment Management. The Manager shall act as investment manager for
the and shall, in such capacity, supervise the investment and reinvestment
of the cash, securities or other properties comprising the 's portfolio,
subject at all times to the policies and control of the Fund's Board of
Directors. The Manager shall give the the benefit of its best judgment,
efforts and facilities in rendering its services as investment manager.
3. Investment Analysis and Implementation. In carrying out its obligations
under paragraph 2 hereof, the Manager shall:
(a) obtain and evaluate pertinent information about significant
developments and economic, statistical and financial data, domestic,
foreign or otherwise, whether affecting the economy generally or the 's
portfolio and whether concerning the individual issuers whose securities
are included in the 's portfolio or the activities in which the issuers
engage, or with respect to securities which the Manager considers
desirable for inclusion in the 's portfolio:
(b) determine which issuers and securities shall be represented in the
's portfolio and regularly report thereon to the Fund's Board of
Directors;
(c) formulate and implement continuing programs for the purchases and
sales of the securities of such issuers and regularly report thereon to
the Fund's Board of Directors; and
(d) take, on behalf of the , all actions which appear to the Fund
necessary to carry into effect such purchase and sale programs and
supervisory functions as aforesaid, including the placing of orders for
the purchase and sale of securities for the .
4. Broker-Dealer Relationships. The Manager is responsible for decisions to
buy and sell securities for the 's portfolio, broker-dealer selection, and
negotiation of brokerage commission rates. Allocation of transactions,
including their frequency, to various dealers will be determined by the
Manager it its best judgment and in a manner deemed to be in the best interest
of shareholders of the rather than by any formula. The primary
consideration will be prompt execution of orders in an effective manner at the
most favorable price.
5. Control by Board of Directors. Any investment program undertaken by the
Manager pursuant to this Agreement, as well as any other activities undertaken
by the Manager on behalf of the pursuant thereto, shall at all times be
subject to any directives of the Board of Directors of the Fund.
B-2
<PAGE>
6. Administrative Services. The Manager shall perform or monitor the
performance of, administrative and management services in connection with the
operations of the and shall investigate, assist in the selection of and
conduct relations with any of the following employed by the Fund to render
services to the and its stockholders: custodians, depositories, transfer
agents, if any, dividend and disbursing agents, other shareholder service
agents (including overseeing broker-dealers and financial institutions which
have entered into agreements with the 's distributor to provide shareholder
account and/or distribution services as contemplated under the provisions of
any distribution agreement to be entered into between the Fund and the 's
distributor), accountants, attorneys, underwriters, corporate fiduciaries,
insurers, banks and such other persons in any such capacity deemed to be
necessary or advisable. The Manager shall arrange and pay for the periodic
updating, printing and related expenses of the registration statement relating
to the 's shares and supplements thereto, prepare and pay for the
preparation of all proxy statements and other required reports to
shareholders, and register or qualify, and maintain such registration or
qualification, for sale of the amount of shares required by the laws of any
state in which the Fund deems it appropriate to offer the 's shares for
sale. The Manager shall provide the Fund's Board of Directors on a regular
basis financial reports on and analyses of the 's operations and the
operations of comparable investment companies. The Manager shall make reports
to the Board of Directors of its performance of obligations hereunder and
furnish advice and recommendations with respect to other aspects of the
business and affairs of the as the Fund shall determine desirable.
7. Accounting Services. The Manager shall furnish, or cause to be furnished,
to the all necessary accounting services, including:
(i) the computation of the 's net asset value per share at such times
on such dates and in the manner specified in the Fund's Articles of
Incorporation, By-Laws and/or currently effective registration statement;
(ii) the computation of the 's net income per share for dividend
purposes at such times and dates and in the manner specified in the Fund's
Articles of Incorporation, By-Laws and/or currently effective registration
statement;
(iii) the accrual of interest and other income payable in respect of the
's portfolio securities;
(iv) the preparation and filing of all federal, state and local tax
reports with respect to the ; and
(v) the maintenance of the books, accounts and financial records of the
and preservation thereof in accordance with the applicable provisions
of the 1940 Act.
B-3
<PAGE>
The Manager shall furnish to the Fund or cause to be furnished to the Fund,
without charge to the Fund, the services of a principal financial officer and
such assistant officers as the Board of Directors may require and shall
furnish without charge to the all necessary office space, equipment,
supplies and utilities in order to perform the accounting functions.
8. Shareholder Account Record Services. The Manager agrees to furnish all
necessary data processing equipment, supplies, personnel and services required
for the Fund to maintain its shareholder account records. In connection
therewith, the Manager shall receive all daily share purchase and redemption
information including information with respect to dividends reinvested, and
shall timely post said information to the accounts of shareholders of the
Fund. The Manager shall assist the Fund in maintaining all required books and
records with respect to shareholder purchases, redemptions, dividends paid and
dividends reinvested and shall assist the Fund by preparing for filing all
required reports and returns, including federal reports with respect to
dividends paid and with respect to proper tax identification number reporting.
9. Shareholder Services and Distribution. The Fund has adopted plans of
distribution pursuant to Rule 12b-1 under the 1940 Act (the "Plans") and has
employed a registered broker-dealer (the "Distributor") to serve as principal
underwriter of the 's shares. In connection with the Plans, the Manager
will be responsible for conducting the Fund's relations with the Distributor
and with broker/dealers and financial institutions that may establish and
maintain accounts with the on behalf of their clients or customers.
10. Compliance with Applicable Requirements. In carrying out its obligations
under this Agreement, the Manager shall at all times conform to:
(a) all applicable provisions of the 1940 Act; and
(b) the provisions of the Registration Statement of the Fund under the
Securities Act of 1933 and the 1940 Act; and
(c) the provisions of the Fund's Articles of Incorporation, as amended;
and
(d) the provisions of the By-Laws of the Fund, as amended; and
(e) any other applicable provisions of state and federal law.
11. Expenses. The expenses connected with the shall be borne by the
Manager as follows:
(a) If requested by the Fund, the Manager shall furnish, at its expense
and without cost to the Fund, the services of a President, Secretary and
one or
B-4
<PAGE>
more Vice Presidents of the Fund, to the extent that such additional
officers may be required by the Fund or for the proper conduct of the
affairs of the .
(b) The Manger shall further maintain, at its expense and without cost
to the , a trading function in order to carry out its obligations under
subparagraph (d) of paragraph 3 hereof to place orders for the purchase
and sale of portfolio securities for the .
(c) The Manager shall furnish at its own expense the executive,
supervisory and clerical personnel necessary to perform its obligations
under this Agreement. The Manager shall also provide the equipment, office
space, facilities and supplies necessary to perform the services set forth
in paragraphs 6, 7, 8, and 9 hereof as well as provide equipment, office
space, facilities and supplies necessary to maintain one or more offices
of the Fund, as may from time to time be required by the Fund's Board of
Directors. The Manager shall pay the compensation, if any, of officers of
the Fund who are officers or employees of the Manager. The Manager shall
timely pay (or reduce its fee in an amount equal to) all expenses of the
unless expressly assumed by the Fund or the Distributor; the charges
and expenses of any registrar, any custodian or depository appointed by
the Fund for the safekeeping of its cash, portfolio securities and other
property, and any stock transfer, dividend or accounting agent or agents
appointed by the Fund; all fees payable by the Fund to federal, state, or
other governmental agencies; the costs and expenses of engraving or
printing stock certificates representing shares of the Fund; all costs and
expenses in connection with the registration and maintenance of
registration of the and its shares with the Securities and Exchange
Commission and various states and other jurisdictions (including filing
fees, legal fees and disbursements of counsel); the costs and expenses of
printing, including typesetting, and distributing prospectuses and
statements of additional information of the Fund and supplements thereto
to the 's shareholders; all expenses of shareholders' meetings (other
than as set forth in subparagraph (d)(i) of this paragraph 11 and of
preparing, printing and mailing proxy statements and reports to
shareholders; all expenses incident to the payment of any dividend,
distribution, withdrawal or redemption, whether in shares or in cash;
charges and expenses of any outside service used for pricing of the 's
shares; routine fees and expenses of legal counsel and of independent
accountants, in connection with any matter relating to the Fund; postage;
insurance premiums on property or personnel (including officers and
directors) of the Fund which inure to its benefit; and all other charges
and costs of the 's operations.
(d) The Fund shall be responsible for payment of the following expenses
not borne by the Manager: (i) the fees of the directors who are not
"interested persons" of the Fund, as defined by the 1940 Act, and travel
and related
B-5
<PAGE>
expenses of the directors for attendance at meetings, (ii) membership dues
of any industry association, (iii) interest, taxes and brokerage
commissions, (iv) extraordinary expenses, if any, including but not
limited to legal claims and liabilities and litigation costs and any
indemnification related thereto, and (v) any shareholder service or
distribution fee payable by the Fund under the Plans.
12. Compensation. For the services to be rendered, the facilities furnished
and the expenses assumed by the Manager, the Fund shall pay to the Manager on
behalf of the monthly compensation at the sum of the amounts determined by
applying the following annual rates to the Series' aggregate daily net assets:
.80% of the first $500 million of the Series' aggregate daily net assets,
.775% of the Series' aggregate daily net assets in excess of $500 million but
less than $1 billion, .75% of the Series' aggregate daily net assets in excess
of $1 billion but less than $1.5 billion, plus .725% of the Series' aggregate
daily net assets in excess of $1.5 billion and then multiplying the result by
a fraction, the denominator of which is the average daily net assets of the
Series for the period and the numerator of which is the average daily net
assets of the for the period. Except as hereinafter set forth,
compensation under this Agreement shall be calculated and accrued daily and
the amounts of the daily accruals shall be paid monthly upon documentation
that expenses to be paid or assumed by the Manager have been paid on a timely
basis and the appropriate reserves for anticipated expenses of the Fund have
been provided for ("Documentation"). If this Agreement becomes effective
subsequent to the first day of a month or shall terminate before the last day
of a month, compensation for that part of the month this Agreement is in
effect shall be prorated in a manner consistent with the calculation of the
fees as set forth above; provided however, that the Fund may reserve final
payment of any amounts due pending presentation of documentation that the
expenses to be paid or assumed by the Manager have in fact been paid. Subject
to the provisions of paragraph 13 hereof, payment of the Manager's
compensation for the preceding month shall be made as promptly as possible
following the submission to the Fund of Documentation after completion of the
computations contemplated by paragraph 13 hereof.
13. Expense Limitation. In the event the operating expenses of the
including all management fees, for any fiscal year ending on a date on which
this Agreement is in effect exceed the expense limitation applicable to the
imposed by the securities laws or regulations thereunder of any state or
jurisdiction in which the 's shares are qualified for sale, as such
limitations may be raised or lowered from time to time, the Manager shall
reduce its management fee to the extent of such excess and, if required,
pursuant to any such laws or regulations, will reimburse the Fund for any
annual operating expenses (after reductions of all management fees) in excess
of any expense limitation that may be
B-6
<PAGE>
applicable; provided, however, there shall be excluded from such expenses the
amount of any interest, taxes, brokerage commission and extraordinary expenses
(including but not limited to legal claims and liabilities and litigation
costs and any indemnification related thereto) paid or payable by the Fund and
attributable to the . Such reduction, if any, shall be computed and accrued
daily, shall be settled on a monthly basis and shall be based upon the expense
limitation applicable to the as at the end of the last business day of the
month. Should two or more such expense limitations be applicable as at the end
of the last business day of the month, that expense limitation which results
in the largest reduction in the Manager's fee shall be applicable.
14. Non-Exclusivity. The services of the Manager to the are not to be
deemed to be exclusive, and the Manager shall be free to render investment
advisory, investment management and corporate administrative or other services
to others (including other investment companies) and to engage in other
activities, so long as its services under this Agreement are not impaired
thereby. It is understood and agreed that the employees of the Manager and the
officers or directors of Reich & Tang Asset Management, Inc., the sole general
partner of the Manager, may serve as officers or directors of the Fund, and
that officers or directors of the Fund may serve as employees of the Manager
or as officers or directors of Reich & Tang Asset Management, Inc. to the
extent permitted by law; and that the employees of the Manager and the
officers and directors of Reich & Tang Asset Management, Inc. are not
prohibited from engaging in any other business activity or from rendering
services to any other person, or from serving as partners, officers or
directors of any other firm or corporation, including other investment
companies.
15. Non-Exclusive Use of the Name "Cortland". The Fund acknowledges that it
adopted its name through the permission of the Manager. The Manager hereby
consents to the non-exclusive use by the Fund of the name "Cortland" only so
long as the Manager serves as the Series' manager. The Fund covenants and
agrees to protect, exonerate, defend, indemnify and hold harmless the Manager,
its officers, agents and employees from and against any and all costs, losses,
claims, damages or liabilities, joint or several, including all legal expenses
which may arise or have arisen out of the Fund's use or misuse of the name
"Cortland" or out of any breach of or failure to comply with this paragraph
15.
Neither the Fund nor the shall distribute or circulate any prospectus,
proxy statement, sales literature, promotional material or other printed
matter required to be filed with the Securities and Exchange Commission under
Section 24(b) of the 1940 Act which contains any reference to the Manager or
using the name "Cortland" without the prior approval of the Manager and shall
submit all such materials requiring approval of the Manager in draft form,
allowing sufficient time for review by the Manager and its counsel prior to
any deadline for printing.
B-7
<PAGE>
If the Manager or any successor to its business shall cease to furnish
services to the under this Agreement or similar contractual arrangement,
the Fund:
(a) as promptly as practicable, will take all necessary action to cause
its Articles of Incorporation to be amended to accomplish a change of
name; and
(b) within 90 days after the termination of this Agreement or such
similar contractual arrangement, shall cease to use in any other manner,
including but not limited to use in any prospectus, sales literature or
promotional material, the name "Cortland" or any name, mark or logotype
derived from it or similar to it or indicating that the is managed by
or otherwise associated with the Manager.
16. Term. This Agreement shall become effective at the close of business on
the date hereof and shall remain in force and effect, subject to paragraph 17
hereof, for a period of two years from the date hereof.
17. Renewal. Following the expiration of its initial term, the Agreement
shall continue in force and effect from year to year, provided that such
continuance is specifically approved at least annually:
(a)(i) by the Fund's Board of Directors or (ii) by the vote of a
majority of the 's outstanding voting securities (as defined in Section
2(a)(42) of the 1940 Act); and
(b) by the affirmative vote of a majority of the directors who are not
parties to this Agreement or interested persons of a party to this
Agreement (other than as a director of the Fund), but votes cast in person
at a meeting specifically called for such purpose.
18. Termination. This Agreement may be terminated at any time, without the
payment of any penalty, by vote of the Fund's Board of Directors or by vote of
a majority of the 's outstanding voting securities (as defined in Section
2(a)(42) of the 1940 Act), or by the Manager, on sixty (60) days' written
notice to the other party. This Agreement shall automatically terminate in the
event of its assignment, the term "assignment" having the meaning defined in
Section 2(a)(4) of the 1940 Act.
19. Liability of Manager. In the absence of willful misfeasance, bad faith
or gross negligence on the part of the Manager or its officers or employees,
or the officers, directors or employees of its sole general partner, Reich &
Tang Asset Management, Inc., or reckless disregard by the Manager of its
duties under this Agreement, the Manager shall not be liable to the Fund or to
any stockholder of the Fund for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may by
sustained in the purchase, holding or sale of any security, provided however,
that the Manager shall at all times act in
B-8
<PAGE>
good faith and agrees to use its best efforts within reasonable limits to
insure the accuracy of all services described in paragraph 8 hereof, but
assumes no responsibility and shall not be liable for loss or damage due to
errors in connection with services provided under paragraph 8 unless said
error is caused by the Manager's negligence, bad faith or willful misconduct
or that of its employees.
20. Notices. Any notices under this Agreement shall be in writing, addressed
and delivered or mailed postage paid to the other party at such address as
such other party may designate for the receipt of such notice. Until further
notice to the other party, it is agreed that the address of the Fund and the
Manager for this purpose shall be 600 Fifth Avenue, New York, New York 10020.
21. Questions of Interpretation. Any question of interpretation of any term
or provision of this Agreement having a counterpart in or otherwise derived
from a term or provision of the 1940 Act shall be resolved by reference to
such term or provision of the 1940 Act and to interpretations thereof, if any,
by the United States Courts or in the absence of any controlling decision of
any such court, by rules, regulations or orders of the Securities and Exchange
Commission issued pursuant to said Act. In addition, where the effect of a
requirement of the 1940 Act reflected in the provision of this Agreement is
revised by rule, regulation or order of the Securities and Exchange
Commission, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
B-9
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers as of the day and year
first above written.
CORTLAND TRUST, INC.
By: ___________________________________
President
Attest:
__________________________________
Secretary
REICH & TANG ASSET MANAGEMENT, L.P.
By: REICH & TANG ASSET MANAGEMENT,
INC. General Partner
By: ___________________________________
Attest:
__________________________________
Secretary
B-10
<PAGE>
Appendix C
CERTAIN OTHER MUTUAL FUNDS ADVISED BY THE ADVISER
The Adviser acts as investment adviser or sub-adviser to the following other
mutual funds that have investment objectives similar to the Funds', for
compensation at the annual percentage rates of the corresponding average net
asset levels of those funds set forth below.
<TABLE>
<CAPTION>
Adviser's
Relationship
Net Assets of to Fund
Other Funds with Similar Other Funds at (Adviser or
Objectives June 30, 2000 Fee Rate/1/ Sub-Adviser)
------------------------ -------------- ------------------------------------ ------------
<S> <C> <C> <C>
Burnham Investors Trust $ 211,859,545 .15% per annum of average daily net Sub-Adviser
assets
California Daily Tax 385,720,218 .30% per annum of average daily net Adviser
Free Income Fund, Inc. assets
Connecticut Daily Tax 189,697,692 .30% per annum of average daily net Adviser
Free Income Fund, Inc. assets
Daily Tax Free Income 725,922,546 .325% average daily net assets not Adviser
Fund, Inc. in excess of $750 million, plus
.30% of average daily net assets in
excess of $750 million
Florida Daily Municipal 79,950,196 .40% per annum of average daily net Adviser
Income Fund assets
Georgia Daily Municipal 12,093,579 .40% per annum of average daily net Adviser
Income Fund, Inc. assets
Institutional Daily 1,356,847,939 .12% per annum of average daily net Adviser
Income Fund assets
/1/.02% Investment Management fee waived for Florida; .40% waived for Georgia;
.30% waived for Michigan
Money Market Portfolio
U.S. Treasury Portfolio
Michigan Daily Tax Free 14,788,365 .30% per annum of average daily net Adviser
Income Fund, Inc. assets
</TABLE>
----
C-1
<PAGE>
<TABLE>
<CAPTION>
Adviser's
Net Assets of Relationship
Other Funds to Fund
Other Funds with at June 30, (Adviser or
Similar Objectives 2000 Fee Rate/1/ Sub-Adviser)
------------------ ------------- ------------------------------------ ------------
<S> <C> <C> <C>
New Jersey Daily $ 147,469,750 .30% per annum of average daily net Adviser
Municipal Income Fund, assets
Inc.
New York Daily Tax Free 428,583,548 .30% per annum of average daily net Adviser
Income Fund, Inc. assets
North Carolina Daily 250,604,096 .40% per annum of average daily net Adviser
Municipal Income Fund, assets
Inc.
Pax World Money Market 125,687,035 .15% per annum of average daily net Sub-Adviser
Fund, Inc. assets
Pennsylvania Daily 7,722,720 .40% per annum of average daily net Adviser
Municipal Income Fund assets
Short Term Income Fund, 1,259,022,443 .30% of average daily net assets not Adviser
Inc. in excess of $750 million, plus
Money Market Portfolio .29% of average daily net assets in
excess of $750 million but not in
excess of $1 billion, plus .28% of
such assets in excess of $1 billion
but not in excess of $1.5 billion,
plus .27% of such assets in excess
of $1.5 billion
</TABLE>
-------
/1/.40% Investment Management fee waived for Pennsylvania
C-2
<PAGE>
<TABLE>
<CAPTION>
Adviser's
Relationship
Net Assets of to Fund
Other Funds with Similar Other Funds at (Adviser or
Objectives June 30, 2000 Fee Rate/1/ Sub-Adviser)
------------------------ -------------- ------------------------------------ ------------
<S> <C> <C> <C>
Short Term Income Fund, $ 615,730,987 .275% of average daily net assets Adviser
Inc. not in excess of $250 million, plus
U.S. Government .25% of such assets in excess of
Portfolio $250 million
Tax Exempt Proceeds 208,002,982 .40% per annum of average daily net Adviser
Fund, Inc. assets up to $250 million; .35% per
annum of average daily net assets
between $250 million and $500
million; and .30% per annum of
average daily net assets over $500
million.
The Valiant Fund 1,004,730,241 .06% of the first $500 million of Sub-Adviser
the Fund's average daily net assets,
plus .05% of average daily net
assets in excess of $500 million but
less than $1 billion, plus .04% of
such assets in excess of $1 billion
but less than $1.5 billion, plus
.035% of such assets in excess of $2
billion
Virginia Daily Municipal 3,964,767 .40% per annum of average daily net Adviser
Income Fund, Inc. assets
</TABLE>
-------
/1/.40% Investment Management fee waived for Virginia
C-3
<PAGE>
Appendix D
Shares Outstanding
For each of the Funds' shares entitled to vote at the Meeting, the number of
shares outstanding as of July 31, 2000 was as follows:
<TABLE>
<CAPTION>
Number
Name of Fund of Shares
------------ -------------
<S> <C>
Cortland General Money Market Fund 1,753,520,378
U.S. Government Fund 181,936,904
Municipal Money Market Fund 356,509,509
</TABLE>
Ownership of Shares
As of July 31, 2000, the Trust believes that the Directors and officers of
the Trust, as a group, owned less than one percent of each class of shares of
the Fund and of the Trust as a whole. As of July 31, 2000, the Trust believes
that no person beneficially owned more than 5% of the outstanding shares of
each of the Funds individually.
D-1
<PAGE>
CORTPX00
<PAGE>
LiveOakPX00
<PAGE>
600 FIFTH AVENUE
NEW YORK, NEW YORK 10020
PLEASE VOTE YOUR PROXY TODAY
Prompt response will save the expense of additional solicitations
CHOOSE THE VOTING METHOD THAT IS MOST CONVENIENT FOR YOU.
1. VOTE BY MAIL: Sign and date your proxy card and return it in the enclosed
postage paid envelope. NOTE: Your proxy is not valid unless it is signed.
2. VOTE BY TOUCH-TONE PHONE: Dial 1-800-690-6903, enter the CONTROL NUMBER
printed in the right-hand column and follow the simple instructions.
Telephone voting is available 24 hours a day, 7 days a week. THE CALL IS
TOLL-FREE. If you received more than one proxy card, you can vote each card
during the call. Each card has a different control number.
3. VOTE VIA THE INTERNET: Log on to www.proxyvote.com, enter your CONTROL
NUMBER printed in the right-hand column and follow the instructions on the
screen. If you received more than one proxy card, you may vote them all
during the same session. Each card has a different control number.
IF YOU VOTE BY PHONE OR INTERNET,
PLEASE DO NOT RETURN YOUR PROXY CARD.
VOTE TODAY BY MAIL,
TOUCH-TONE PHONE OR THE INTERNET
CALL TOLL-FREE 1-800-690-6903
OR LOG ON TO www.proxyvote.com
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
CORTLAND TRUST, INC.
Proxy for Special Meeting of Shareholders
to Be Held October 10, 2000
The undersigned hereby appoints Richard De Sanctis and Bernadette N. Finn and
each of them (with full power of substitution) as proxies to vote for the
undersigned all shares of Cortland Trust, Inc. (the "Trust") which the
undersigned would be entitled to vote if personally present at the Special
Meeting of Shareholders to be held on Tuesday, October 10, 2000 at 9:45 a.m.
Eastern time at the offices of Reich & Tang Asset Management L.P., 600 Fifth
Avenue, New York, New York, or any adjournments thereof, upon the matter
described in the accompanying Proxy Statement and upon any other business that
may properly come before the Meeting or any adjournments thereof. Said proxies
are directed to vote or to refrain from voting pursuant to the Proxy Statement
as checked below.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" THE PROPOSAL.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BACK INK AS FOLLOWS: (X)
CRTLND KEEP THIS PORTION FOR YOUR RECORDS
--------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED
CORTLAND TRUST, INC.
The undersigned acknowledges receipt with this proxy of a copy of the Notice of
Special Meeting of Shareholders and the Proxy Statement of the Board of
Directors. (Please mark, sign, date and return this proxy promptly in the
enclosed envelope.)
Vote on Proposal
1. To approve a new Management/Investment Advisory Agreement between the Trust
(on behalf of the Fund) and Reich & Tang Asset Management L.P.
FOR AGAINST ABSTAIN
[_] [_] [_]
Please sign exactly as name appears above. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by the President or other authorized officer. If a
partner, please sign in partnership name by authorized person.
If your address differs from the above, please advise the Trust as to your
correct address.
--------------------------------------- --------------------------------------
Signature (PLEASE SIGN WITHIN BOX) Date Signature (JOINT OWNERS) Date
