SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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
BT INVESTMENT FUNDS
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary 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:
<PAGE>
August 22, 1999
Dear Shareholder,
BT GLOBAL EMERGING MARKETS EQUITY FUND
I am writing to let you know that a meeting will be held September 21, 1999 for
shareholders to vote on an important proposal for BT Global Emerging Markets
Equity Fund (the "BT Fund"). As a shareholder in the BT Fund, you have the
opportunity to voice your opinion on this matter.
THE PROPOSAL
We are asking shareholders of the BT Fund to approve an agreement and plan of
reorganization between the BT Fund and the Morgan Grenfell Emerging Markets
Equity Fund (the "MG Fund") to allow the BT Fund to transfer all of its assets
and liabilities to the MG Fund in exchange for Institutional Shares of the MG
Fund.
WHAT THIS MEANS FOR YOUR INVESTMENT
o You will receive Institutional Shares of the MG Fund equal to the total
value of your investment in the BT Fund
o The Trustees believe you will benefit from the lower expense ratio of the
MG Fund |X|
o The transaction will be tax-free for shareholders and for both funds |X|
o The Trustees believe you will be able to enjoy the greater diversification
that a larger fund may bring |X|
o Both funds have similar investment objectives and investment styles so
there will be little change to the way your investment is managed
These benefits may result in the potential for higher returns due to the larger
size of the MG Fund, the increased portfolio diversification and lower expenses.
IT IS IMPORTANT FOR YOU TO VOTE
This package contains information about the proposal, along with a proxy card
for you to vote by mail, unless you are voting by telephone or through the
Internet. Please take a moment to read the enclosed materials and cast your vote
using the proxy card. Your prompt vote will help save money. If a majority of
shareholders have not voted prior to the meeting, we must try to obtain more
votes with additional mailings or phone solicitations.
Both of these are costly processes.
THE BT FUNDS' BOARD OF TRUSTEES, WHOSE PRIMARY ROLE IS TO PROTECT YOUR INTERESTS
AS A SHAREHOLDER, HAS REVIEWED THE PROPOSAL. IN THE TRUSTEES' OPINION, THE
PROPOSAL IS FAIR AND REASONABLE. THE TRUSTEES RECOMMEND THAT YOU VOTE FOR THE
PROPOSAL.
HOW TO VOTE
CAST YOUR VOTE BY COMPLETING AND SIGNING THE PROXY CARD, UNLESS YOU ARE VOTING
BY TELEPHONE OR THROUGH THE INTERNET. PLEASE MAIL YOUR COMPLETED AND SIGNED
PROXY AS QUICKLY AS POSSIBLE, USING THE POSTAGE-PAID ENVELOPE PROVIDED.
PLEASE VOTE! YOUR VOTE IS EXTREMELY IMPORTANT, NO MATTER HOW MANY SHARES YOU
OWN.
ANY QUESTIONS?
Please call Shareholders Communications Corporation at 1-800-732-6168 if you
have any questions about the proposal or voting procedures.
Sincerely,
Daniel O. Hirsch
Secretary
<PAGE>
BT GLOBAL EMERGING MARKETS EQUITY FUND
(A SERIES OF BT INVESTMENT FUNDS)
ONE SOUTH STREET
BALTIMORE, MD 21202
NOTICE OF MEETING OF SHAREHOLDERS
SCHEDULED FOR SEPTEMBER 21, 1999
THIS IS THE FORMAL AGENDA FOR A MEETING OF SHAREHOLDERS OF YOUR MUTUAL FUND. IT
TELLS YOU WHAT MATTERS WILL BE VOTED ON AND, IN CASE YOU WANT TO ATTEND THIS
MEETING IN PERSON, THE TIME AND PLACE OF THE MEETING.
To the shareholders of BT Global Emerging Markets Equity Fund ("BT Fund"):
A meeting of BT Fund shareholders will be held at One South Street, Baltimore,
MD 21202 on Tuesday, September 21, 1999 at 10:00 a.m., Eastern time, to consider
the following:
1. A proposal to approve an Agreement and Plan of Reorganization between
BT Fund and Morgan Grenfell Emerging Markets Equity Fund ("MG Fund").
Under this Agreement BT Fund would transfer all of its assets to MG
Fund in exchange for Institutional shares of MG Fund. These shares
would be distributed proportionately to you and the other shareholders
of BT Fund. MG Fund would also assume BT Fund's liabilities. YOUR BOARD
OF TRUSTEES RECOMMENDS THAT YOU VOTE FOR THIS PROPOSAL.
2. Any other business that may properly come before the meeting.
Shareholders of record as of the close of business on July 22, 1999 are entitled
to vote at the meeting and any related follow-up meetings.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE AND RETURN THE
ENCLOSED PROXY CARD. IF SHAREHOLDERS DO NOT RETURN THEIR PROXIES IN SUFFICIENT
NUMBERS, BANKERS TRUST COMPANY WILL INCUR ADDITIONAL COSTS TO SOLICIT PROXIES.
By Order of the Board of Trustees,
Daniel O. Hirsch
Secretary
August 22, 1999
<PAGE>
PROXY STATEMENT OF
BT GLOBAL EMERGING MARKETS EQUITY FUND
(A SERIES OF BT INVESTMENT FUNDS)
PROSPECTUS FOR
INSTITUTIONAL SHARES OF
MORGAN GRENFELL EMERGING MARKETS EQUITY FUND
(A SERIES OF MORGAN GRENFELL INVESTMENT TRUST)
This proxy statement and prospectus contains the information you should know
before voting on the proposed reorganization of BT Global Emerging Markets
Equity Fund, One South Street, Baltimore, MD 21202 ("BT Fund") into Morgan
Grenfell Emerging Markets Equity Fund, 885 Third Avenue, New York, NY 10022 ("MG
Fund"). Please read it carefully and retain it for future reference.
Both MG Fund and BT Fund are open end mutual funds investing in equity
securities of companies located in emerging market countries. MG Fund's
investment objective is capital appreciation and BT Fund's investment objective
is long-term capital growth.
HOW THE REORGANIZATION WILL WORK
[ ] BT Fund will transfer all of its assets to MG Fund. MG Fund will assume
BT Fund's liabilities.
[ ] MG Fund will issue Institutional shares to BT Fund in an amount equal
to the value of the assets it receives, less the liabilities it
assumes, in the reorganization. These Institutional shares will be
distributed to BT Fund's shareholders in proportion to their holdings
in BT Fund on the reorganization date.
[ ] The reorganization will be tax-free for federal income tax purposes.
[ ] BT Fund will be liquidated and terminated and you will be a shareholder
of MG Fund.
AN INVESTMENT IN MG FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED SHARES OF
MG FUND OR DETERMINED WHETHER THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY
STATEMENT TO THE CONTRARY IS A CRIME.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
WHERE TO GET MORE INFORMATION
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Prospectus of MG Fund dated 3/1/99. In the same envelope as this proxy statement and prospectus.
Incorporated by reference into this proxy statement and
prospectus.
- -----------------------------------------------------------
MG Fund's annual and semi-annual reports to shareholders.
- ------------------------------------------------------------------------------------------------------------------------
Prospectus of BT Fund dated 1/31/99. On file with the Securities and Exchange Commission
("SEC") and available at no charge by calling
1-800-368-4031 or writing to us at the address shown
below. Incorporated by reference into this proxy
statement and prospectus.
- -----------------------------------------------------------
BT Fund's annual and semi-annual reports to shareholders.
- -----------------------------------------------------------
A statement of additional information dated 8/16/99. It
contains additional information about both MG Fund and BT
Fund.
- ------------------------------------------------------------------------------------------------------------------------
To ask questions about this proxy statement and Call our toll-free telephone number: 1-800-225-5291 or
prospectus. write to us at BT Service Center, P.O. Box 419210,
Kansas City, MO 64141-6210.
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
The date of this proxy statement and prospectus is August 22, 1999.
<PAGE>
TABLE OF CONTENTS
Page
----
INTRODUCTION 1
SUMMARY 1
THE REORGANIZATION 6
CAPITALIZATION 10
COMPARISON OF BUSINESS TRUSTS UNDER
DELAWARE AND MASSACHUSETTS LAW 11
ADDITIONAL INFORMATION ABOUT
THE FUNDS' BUSINESSES 12
BOARDS' EVALUATION AND RECOMMENDATION 13
VOTING RIGHTS AND REQUIRED VOTE 13
INFORMATION CONCERNING THE MEETING 14
OWNERSHIP OF SHARES OF THE FUNDS 15
EXPERTS 16
AVAILABLE INFORMATION 16
EXHIBITS
A. Agreement and Plan of Reorganization between Morgan Grenfell Emerging
Markets Equity Fund and BT Global Emerging Markets Equity Fund (attached to
this proxy statement and prospectus)
B. Annual report to shareholders dated October 31, 1998 and semiannual
report to shareholders dated April 30, 1999 of Morgan Grenfell Emerging
Markets Equity Fund
C. Prospectus dated March 1, 1999 of Morgan Grenfell Emerging Markets Equity
Fund
<PAGE>
INTRODUCTION
This proxy statement and prospectus is being used by the board of trustees of BT
Fund to solicit proxies to be voted at a special meeting of shareholders of BT
Fund. This meeting will be held at One South Street, Baltimore, MD 21202 on
Tuesday, September 21, 1999 at 10:00 a.m., Eastern time. The purpose of the
meeting is to consider a proposal to approve an Agreement and Plan of
Reorganization providing for the reorganization of BT Fund into MG Fund. This
proxy statement and prospectus is being mailed to BT Fund's shareholders on or
about August 22, 1999.
WHO IS ELIGIBLE TO VOTE?
BT Fund shareholders of record on July 22, 1999 are entitled to attend and vote
at the meeting or any adjourned meeting. Each share of BT Fund outstanding on
July 22, 1999 is entitled to one vote. Shares represented by properly executed
proxies, unless revoked before or at the meeting, will be voted according to
shareholders' instructions. If you sign a proxy card, but do not fill in a vote,
your shares will be voted to approve the Agreement and Plan of Reorganization.
If any other business comes before the meeting, your shares will be voted at the
discretion of the persons named as proxies.
SUMMARY
The following is a summary. More complete information appears later in this
proxy statement. You should read the entire proxy statement and the enclosed
exhibits carefully because they contain details that are not in the summary. The
materials in the exhibits and the statement of additional information dated
August 22, 1999 for MG Fund and BT Fund are hereby incorporated by reference
into this proxy statement and prospectus.
COMPARISON OF MG FUND TO BT FUND
<TABLE>
<CAPTION>
- ---------------------------- ------------------------------------------- -------------------------------------------
MG Fund BT Fund
- ---------------------------- ------------------------------------------- -------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
GENERAL A diversified series of Morgan Grenfell A diversified series of BT Investment
Investment Trust ("MG Trust"). MG Trust Funds ("BT Trust"). BT Trust is an
is an open-end management investment open-end management investment company
company organized as a Delaware business organized as a Massachusetts business
trust. trust.
- ---------------------------- ------------------------------------------- -------------------------------------------
INVESTMENT MG Fund invests directly in securities, BT Fund is a feeder fund in a master-feeder
STRUCTURE as described below. structure, which means that it invests all of its
assets in Global Emerging Markets Equity Portfolio
("BT Portfolio"), a series of BT Investment
Portfolios. BT Portfolio has the same investment
objective as BT Fund. All references to the BT
Fund in this proxy statement include BT Portfolio
where appropriate.
- ---------------------------- ------------------------------------------- -------------------------------------------
NET ASSETS AS OF JULY 22, $157,082,683.900 $3,828,758.800
1999
- ---------------------------- ------------------------------------------- -------------------------------------------
INVESTMENT Morgan Grenfell Investment Services Ltd. Bankers Trust Company ("BT") is the
ADVISERS ("MGIS") is MG Fund's investment investment adviser of the BT Portfolio in
adviser. It is a subsidiary of Morgan which the BT Fund invests.
Grenfell Asset Management, Ltd.
- ---------------------------- ---------------------------------------------------------------------------------------
CONTROL OF INVESTMENT MGIS and BT are indirect wholly owned subsidiaries of Deutsche Bank AG, an
ADVISERS AND SUBADVISERS international commercial and investment banking group.
- ---------------------------- ------------------------------------------- -------------------------------------------
PORTFOLIO MANAGERS A portfolio management committee made up Neil Jenkins, director of Morgan Grenfell
of professionals and analysts makes all Investment Services Limited, and Julie
of MG Fund's investment decisions. Wang, principal of Bankers Trust are the
portfolio managers for BT Fund.
- ---------------------------- ------------------------------------------- -------------------------------------------
1
<PAGE>
- ---------------------------- ------------------------------------------- -------------------------------------------
MG Fund BT Fund
- ---------------------------- ------------------------------------------- -------------------------------------------
INVESTMENT OBJECTIVES AND POLICIES
- --------------------------------------------------------------------------------------------------------------------
INVESTMENT Capital appreciation. Long-term capital growth.
OBJECTIVES
- ---------------------------- ------------------------------------------- -------------------------------------------
PRINCIPAL MG Fund invests at least 65% of its total BT Fund invests at least 65% of its total
INVESTMENTS assets in the equity securities of assets in stocks and other securities
growth-oriented companies located in with equity characteristics of companies
emerging markets. in the world's emerging markets.
An emerging market is defined as a An emerging market is defined as one that
smaller, less experienced securities has experienced comparatively little
market typically located in Latin industrialization.
America, Europe, the Middle East, Africa
and Asia.
MG Fund may invest more than 25% of BT Fund normally does not invest more
its assets in securities of companies than 25% of its assets in securities of
located in each of Mexico and Brazil. companies located in any single country.
MG Fund may invest up to 35% of its BT Fund may invest up to 35% of its
total assets in cash, short-term assets in emerging market bonds and other
securities and equity securities traded debt securities.
in developed markets (including the U.S.)
- ---------------------------- ---------------------------------------------------------------------------------------
EQUITY SECURITIES Each fund may invest in equity and equity related securities, including common stock,
preferred stock, rights and warrants, convertible securities and sponsored or
unsponsored ADRs, EDRs, GDRs and IDRs.
- ---------------------------- ------------------------------------------- -------------------------------------------
PRINCIPAL STRATEGIES MG Fund's portfolio management team BT Fund invests for the long term and employs a
generally uses a "bottom-up" approach to strategy of growth at a reasonable price. The
picking stocks. This approach focuses on portfolio manager seeks to identify companies in
individual stock selection rather than emerging markets that combine strong potential for
country selection. MG Fund focuses on earnings growth with reasonable investment value.
undervalued stocks of companies with These companies typically exhibit increasing rates
fast-growing earnings and superior of profitability and cash flow, yet their share
near-to-intermediate term performance prices compare favorably to those of other stocks
potential. in a given market and of their global peers.
- ---------------------------- ------------------------------------------- -------------------------------------------
The team uses an active process which In evaluating stocks, BT Fund's
emphasizes fundamental company research portfolio manager considers factors such
through financial analysis and company as sales, earnings, cash flow and
visits. The team also uses a enterprise value. Enterprise value is a
risk-controlled asset allocation process company's market capitalization plus the
and attempts to add value at the value of its net debt as well as other
regional level. quantitative factors. These indicators
of growth and value may identify
companies with improving growth
prospects before the market in general
has taken notice.
- ---------------------------- ---------------------------------------------------------------------------------------
OTHER INVESTMENTS Each fund may invest in debt securities, bond and other debt instruments, including
DEBT SECURITIES sovereign and supranational debt obligations.
- ---------------------------- ---------------------------------------------------------------------------------------
2
<PAGE>
- ---------------------------- ------------------------------------------- -------------------------------------------
MG Fund BT Fund
- ---------------------------- ---------------------------------------------------------------------------------------
Minimum credit MG Fund's investments in debt securities BT Fund will invest only in debt
quality are not subject to any minimum credit securities that have earned a rating of C
rating requirements. Thus, MG Fund can or better from S&P or Moody's or, if
invest up to 35% of its assets in unrated, determined to be of comparable
securities rated below the top four quality. The fund will not invest more
long-term rating categories of a rating than 5% of its assets in bonds or other
organization or determined by MGIS to be debt securities rated BBB or lower by S&P
of comparable quality. These below or Baa or lower by Moody's.
investment grade securities are commonly
known as "junk bonds."
- ---------------------------- ------------------------------------------- -------------------------------------------
Brady bonds Each fund may invest in Brady Bonds that have been issued by Argentina, Brazil, Costa
Rica, Mexico, Nigeria, the Philippines, Uruguay and Venezuela.
------------------------------------------- -------------------------------------------
MG Fund may also invest in Brady Bonds
issued by the governments of Bulgaria,
the Dominican Republic, Ecuador, Jordan,
Panama and Poland.
- ---------------------------- ------------------------------------------- -------------------------------------------
Illiquid securities Each fund may invest up to 15% of its net
assets in illiquid securities.
- ---------------------------- ------------------------------------------- -------------------------------------------
Investment Each fund may invest in other investment
companies companies to the extent permitted by the
Investment Company Act of 1940.
- ---------------------------- ------------------------------------------- -------------------------------------------
Derivatives Each fund may:
[ ] Purchase and sell (write) put and call options on securities, securities
indices and currencies. These options may be traded on exchanges or over-the-counter.
[ ] Enter into futures contracts on securities, securities indices and
currencies, and may purchase and write put and call options on these futures contracts.
[ ] Enter into forward contracts on currencies.
- ---------------------------- ------------------------------------------- -------------------------------------------
Derivatives MG Fund may also: BT Fund may purchase options on any type
[ ] Purchase and write yield curve of security that it may invest in, but
options. may write securities options only if they
[ ] Enter into currency swaps and are based on stocks.
interest rate swaps, caps and floors.
- ---------------------------- ------------------------------------------- -------------------------------------------
MG Fund may engage in any of the above BT Fund may purchase and write securities
derivatives transactions for both hedging and index options for both hedging
and non-hedging purposes. purposes and non-hedging purposes, but
may enter into other options, futures and
forward contracts only for hedging
purposes.
- ---------------------------- ---------------------------------------------------------------------------------------
TEMPORARY DEFENSIVE Each fund may depart from its principal investment strategies in order to take a
POSITIONS temporary defensive position by investing up to 100% of its assets in U.S. or foreign
government money market instruments or other short term debt securities.
- ---------------------------- ---------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT RISKS
- ---------------------------- ---------------------------------------------------------------------------------------
GENERAL You could lose money on your investment in either
fund. There is no guarantee that either fund will
achieve its investment objective.
- ---------------------------- ---------------------------------------------------------------------------------------
MANAGEMENT RISK The value of each fund's shares depends in
part on the ability of its adviser to assess
economic conditions and investment opportunities.
If the adviser's judgment about the attractiveness
of various investments proves to be incorrect, a
fund may underperform its stated benchmark or
competing investments.
- ---------------------------- ---------------------------------------------------------------------------------------
STOCK MARKET RISK As with any equity growth fund, the
value of your investment in either fund will
fluctuate in response to stock market movements. An
adverse event, such as an unfavorable earnings
report, may depress the value of a particular
company's stock.
- ---------------------------- ---------------------------------------------------------------------------------------
3
<PAGE>
- ---------------------------- ------------------------------------------- -------------------------------------------
MG Fund BT Fund
- ---------------------------- ---------------------------------------------------------------------------------------
FOREIGN COUNTRY RISKS Foreign investing involves higher risks
than investing in U.S. markets because
the value of each fund's investments
depends in part upon currency exchange
rates, political and regulatory
environments and overall economic factors
in the countries in which the fund
invests. In addition:
[ ] Foreign governments could
expropriate or nationalize assets, impose
withholding or other taxes on dividend or
interest payments or capital gains and
prohibit transactions in the country's
currency.
[ ] Foreign companies may not be
subject to the same accounting, auditing
and financial reporting standards and
requirements as U.S. companies.
[ ] Foreign brokerage commissions
and custodian fees are generally higher
than those in the United States.
[ ] Foreign countries' securities
markets may be less liquid, more volatile
and subject to less government regulation
than U.S. securities markets.
- ---------------------------- ---------------------------------------------------------------------------------------
CURRENCY RISK Each fund invests in foreign securities denominated in foreign currencies. A decline
in the value of foreign currencies relative to the U.S. dollar will reduce the value
of a fund's securities denominated in those currencies.
- ---------------------------- ---------------------------------------------------------------------------------------
Emerging Emerging markets generally have less
market risks mature economic structures and less
stable political systems than more
developed markets. Emerging markets may
have high inflation and rapidly changing
interest and currency exchange rates.
Regulators in emerging market countries
are more likely than those in developed
countries to impose capital controls.
Securities markets in these countries
tend to be more volatile and less liquid
than in developed countries.
- ---------------------------- ------------------------------------------- -------------------------------------------
Country Since MG Fund may invest more than 25% of BT Fund does not concentrate its
concentration risk its investments in Brazil and Mexico, it investments in any one country.
could be particularly susceptible to
adverse political and economic
developments in those countries.
- ---------------------------- ------------------------------------------- -------------------------------------------
Risks associated with The value of bonds and other fixed income securities held by a fund will normally
fixed income securities decline when interest rates rise. The longer a fixed income security's duration and
the lower its credit quality, the more its value typically falls. Duration measures
in years the sensitivity of the security to interest rate risk. A higher duration
means the security is more sensitive to interest rate risk. The value of a fixed
income security will also go down in value if the issuer defaults on its principal
and interest payment obligations or has its credit rating downgraded.
- ---------------------------- ---------------------------------------------------------------------------------------
Below investment grade Investments in below investment grade securities are subject to a greater risk of
securities issuer default than higher rated securities. These securities are riskier because
they are issued by companies and government entities that are not as financially
secure as issuers of higher rated securities and are more sensitive to increases in
interest rates, economic downturns and adverse market conditions.
- ---------------------------- ---------------------------------------------------------------------------------------
Derivatives risks Derivatives used for hedging may not fully offset the underlying positions.
Derivatives transactions may not have the intended effects and may result in losses
or missed opportunities. Derivatives that involve leverage may magnify losses from
adverse market developments. In addition, there is the risk that a counterparty will
fail to honor a contract's terms, which would deprive a fund of the hedging and other
benefits of the contract. Some derivatives, especially those not traded on an
exchange, may become illiquid and difficult to value accurately.
- ---------------------------- ---------------------------------------------------------------------------------------
4
<PAGE>
- ---------------------------- ------------------------------------------- -------------------------------------------
MG Fund BT Fund
- ---------------------------- ---------------------------------------------------------------------------------------
Year 2000 risk Many computer systems today cannot distinguish the year 2000 from the year 1900
because of the way dates are encoded and calculated. Each fund's investment adviser
is taking steps designed to address the year 2000 problem and to obtain reasonable
assurances that comparable steps are being taken by the fund's other major service
providers. Although there can be no assurance that these systems will be properly
adapted in time for the year 2000, the advisers expect that they will be. If an
issuer of securities in either fund's portfolio is unable to resolve its year 2000
problems at a reasonable cost, these securities may go down in value. If the adviser
or its service providers do not succeed, it could materially affect shareholder
services.
- ---------------------------- ---------------------------------------------------------------------------------------
BUYING, EXCHANGING AND REDEEMING SHARES
- ---------------------------- ---------------------------------------------------------------------------------------
Net asset value Each fund calculates its net asset value per share (NAV) at the close of regular
trading on the New York Stock Exchange (NYSE) (normally 4:00 p.m. Eastern time) on
each business day. Each fund's portfolio securities are valued either based on
market quotations or if market quotations are unavailable, at fair value, which
involves estimating a security's value based on information other than market
quotations.
- ---------------------------- ---------------------------------------------------------------------------------------
Classes of shares MG Fund offers two classes of shares: BT Fund has only one class of shares,
Institutional shares and Service shares. which is offered without a sales charge.
Both Institutional and Service shares are
offered to the public without a sales
charge. Only Institutional shares are
being offered to BT Fund shareholders in
this proxy statement and prospectus.
- ---------------------------- ------------------------------------------- -------------------------------------------
Rule 12b-1 and service fees Institutional shares are not subject to BT Fund shares are not subject to any
any Rule 12b-1 or service fee. Rule 12b-1 or service fee.
- ---------------------------- ------------------------------------------- -------------------------------------------
Buying and selling shares Institutional shares: Institutions and Investors may purchase or redeem shares
other investors may purchase and redeem either from authorized brokers or
shares through brokers or by dealing directly from BT Fund.
directly with MG Fund.
- ---------------------------- ------------------------------------------- -------------------------------------------
Minimum investment amounts Institutional shares: $250,000 Initial: $2,500
Subsequent: $250
- ---------------------------- ------------------------------------------- -------------------------------------------
Exchanging shares Institutional shares may be exchanged for BT Fund shares may be exchanged for
institutional shares of any other Morgan shares of another BT mutual fund up to
Grenfell fund as long as the shareholder four times a year without charge.
exchanges at least $50,000, the minimum
amount required for an exchange.
- ---------------------------- ------------------------------------------- -------------------------------------------
</TABLE>
MG Fund will waive the minimum investment amount for any BT Fund account that,
after the reorganization, contains less than the minimum investment amount
required for MG Fund.
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Institutional shares of MG fund or shares of BT Fund. The table also shows pro
forma expenses of Institutional shares of MG Fund following the proposed
reorganization.
5
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------- -------- ---------------- ---------------- ----------------
FOR THE YEAR ENDED OCTOBER 31, 1998 MG FUND
MG FUND INSTITUTIONAL
(PRO FORMA) SHARES BT FUND
------------------------------------------------------- -------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
SHAREHOLDER FEES None None None
(fees paid directly from your investment)
------------------------------------------------------- -------- ---------------- ---------------- ----------------
ANNUAL FUND OPERATING EXPENSES BEFORE EXPENSE
LIMITATION(1)
(expenses deducted from fund assets)
------------------------------------------------------- -------- ---------------- ---------------- ----------------
Management fees 1.00% 1.00% 1.10%
------------------------------------------------------- -------- ---------------- ---------------- ----------------
Distribution (12b-1) and/or service fees None None None
------------------------------------------------------- -------- ---------------- ---------------- ----------------
Other expenses 0.52% 0.52% 9.61%
------------------------------------------------------- -------- ---------------- ---------------- ----------------
TOTAL ANNUAL FUND OPERATING EXPENSES (1) 1.52% 1.52% 10.71%
-------------------------------------------------------------------------------------------------------------------
(1) MG Fund has an expense limitation which is voluntary and may be revoked at any time by MGIS, the fund's
investment adviser. BT has agreed contractually for the 16-month period ending January 31, 2000 to waive its own
fees and reimburse other BT Fund expenses so that the BT Fund's expenses will not exceed 1.90%. MGIS has agreed
to waive for an indefinite period its own fees and reimburse other MG Fund expenses so that the MG Fund's expenses
will not exceed 1.25% for Institutional shares.
-------------------------------------------------------------------------------------------------------------------
</TABLE>
THE REORGANIZATION
TERMS OF THE REORGANIZATION
The funds' trustees have approved an Agreement and Plan of Reorganization, a
copy of which is attached as Exhibit
A. The Agreement provides for reorganization on the following terms:
[ ] The reorganization is scheduled to occur at 5:00 p.m., Eastern time, on
September 30, 1999, but may occur on any later date before December 31,
2000.
[ ] Prior to the reorganization BT Fund will redeem its entire interest in
BT Portfolio in exchange for a pro rata share of the portfolio
securities and other assets of BT Portfolio. In the reorganization, BT
Fund will transfer all of its assets to MG Fund, and in exchange MG Fund
will assume BT Fund's liabilities and issue shares as described below.
[ ] MG Fund will issue Institutional shares to BT Fund in an amount equal to
the value of the assets received by MG Fund, less the liabilities
assumed by MG Fund, in the transaction. These shares will immediately be
distributed by BT Fund to BT Fund's shareholders in proportion to their
holdings in BT Fund on the reorganization date. As a result,
shareholders of BT Fund will become Institutional shareholders of MG
Fund.
[ ] The net asset value of both funds will be computed as of 4:00 p.m.,
Eastern time, on the reorganization date.
[ ] After the reorganization is over, BT Fund will be terminated.
The following diagram shows how the reorganization will be carried out.
<TABLE>
<CAPTION>
- ----------------------- --------------------
<S> <C> <C> <C> <C> <C>
BT Fund transfers its MG Fund receives
assets and assets from and
liabilities to MG Fund ->->->->->->->->->->->->->->->->->->->->->->->->-> assumes
liabilities of BT
Fund
- ----------------------- --------------------
BT Fund shareholders BT Fund receives MG Fund
receive MG Fund these shares and Institutional
Institutional shares ->->->->->-> distributes them ->->->->->->->-> shares are issued
to its shareholders
- ----------------------- --------------------
</TABLE>
6
<PAGE>
TAX STATUS OF THE REORGANIZATION
The reorganization will be tax-free for federal income tax purposes and will not
take place unless BT Fund and MG Fund receive from the law firm of Hale and Dorr
LLP, a satisfactory opinion substantially to the effect that:
[ ] The transfer of BT Fund's assets to MG Fund in exchange for
Institutional shares of MG Fund and the assumption of BT Fund's
liabilities, followed by the distribution of such shares to BT Fund's
shareholders and the termination of BT Fund, will be a "reorganization"
within the meaning of Section 368(a)(1) of the Internal Revenue Code of
1986 (the "Code"), and each fund will be "a party to a reorganization"
within the meaning of Section 368(b) of the Code;
[ ] No gain or loss will be recognized by BT Fund upon (1) the transfer of
all of its assets to MG Fund as described above or (2) the distribution
by BT Fund of MG Fund Institutional shares to BT Fund's shareholders;
[ ] No gain or loss will be recognized by MG Fund upon the receipt of BT
Fund's assets solely in exchange for the issuance of MG Fund
Institutional shares to BT Fund and the assumption of all of BT Fund's
liabilities by MG Fund;
[ ] The basis of the assets of BT Fund acquired by MG Fund will be, in each
instance, the same as the basis of those assets in the hands of BT Fund
immediately before the transfer;
[ ] The tax holding period of the assets of BT Fund in the hands of MG Fund
will include BT Fund's tax holding period for those assets;
[ ] The shareholders of BT Fund will not recognize gain or loss upon the
exchange of all their shares of BT Fund solely for MG Fund
Institutional shares as part of the reorganization;
[ ] The basis of MG Fund Institutional shares received by BT Fund's
shareholders in the reorganization will be the same as the basis of the
shares of BT Fund surrendered in exchange; and
[ ] The tax holding period of the MG Fund Institutional shares received by
BT Fund's shareholders will include, for each shareholder, the tax
holding period of the shares of BT Fund surrendered in exchange,
provided that the MG Fund Institutional shares were held as capital
assets on the date of the exchange.
REASONS FOR THE PROPOSED REORGANIZATION
The board of trustees of BT Fund believes that the proposed reorganization will
be advantageous to the shareholders of BT Fund for several reasons. The board of
trustees considered the following matters, among others, in approving the
reorganization in a meeting held on June 9, 1999.
OVERLAPPING INVESTMENT STRATEGY AND MARKET NICHE. BT Fund and MG Fund both have
essentially identical investment objectives and invest primarily in the equity
securities of companies in emerging markets. This is a highly specialized asset
class appealing to a relatively narrow group of investors. U.S. mutual funds
investing in emerging market equities accounted for less than .27% of new sales
of mutual fund shares in 1998.1 Due to the acquisition of BT by Deutsche Bank AG
on June 4, 1999, both funds are now being marketed by the same sales force.
Because offering each fund hinders the other fund's potential for asset growth,
it is not advantageous to operate and market BT Fund separately from MG Fund.
GREATER DIVERSIFICATION. As described further below, the MG Fund is
significantly larger than the BT Fund. Shareholders of both funds may be better
served by a combined fund offering greater diversification. To the extent that
combining the funds' assets into a single portfolio creates a larger asset base,
MG Fund's investment portfolio can achieve greater diversification after the
reorganization than is currently possible for either fund and particularly the
significantly smaller BT Fund. Greater diversification is expected to benefit
the shareholders of both funds because it may reduce the negative effect that
the adverse performance of any one security may have on the performance of the
entire portfolio.
7
<PAGE>
INVESTMENT PERFORMANCE. MG Fund Institutional shares received in the
reorganization will provide BT Fund's shareholders with substantially the same
investment advantages as they currently have at a comparable level of risk. The
BT Fund board of trustees also considered the performance history of each fund,
which is shown in the table below. Although BT Fund outperformed MG Fund for the
one-year period ended June 30, 1999, the trustees noted that BT Fund had only
existed for one year and that market conditions during the one year period were
extremely volatile. The trustees noted that the portfolio manager for BT Fund
who had played an important role in achieving that performance record left and
that the BT Fund's current portfolio manager had been with the BT Fund for less
than six months. From January 1, 1999 through July 20, 1999, the difference in
the two funds' performance narrowed. During this time period, MG Fund's
performance was 37.16% and BT Fund's performance was 42.98%. The trustees
considered the possibility that, in light of BT Fund's small asset size, BT
Fund's initial one year performance record does not provide a sufficient period
to adequately evaluate its performance in comparison with other emerging market
funds. The trustees further noted that due to the overlapping investment
strategy, market niche and the similar marketing channels of these funds, all
shareholders may benefit by the greater diversification and the possibility of
reduced expenses due to the combination of the funds.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
-------------------------------------------------------------------------------------------------------------------
MG FUND BT FUND
INSTITUTIONAL SHARES
(INCEPTION 2/1/94) (INCEPTION 6/30/98)
--------------------------------------- ------------------------------------- -------------------------------------
<S> <C> <C> <C> <C>
1 year ended 6/30/99 12.85% 29.90%
--------------------------------------- ------------------------------------- -------------------------------------
5 years ended 6/30/99 (1.67)% N/A
--------------------------------------- ------------------------------------- -------------------------------------
Inception through 6/30/99 (3.72)% 29.90%
--------------------------------------- ------------------------------------- -------------------------------------
--------------------------------------- ------------------------------------- -------------------------------------
Year to date (7/20/99) 37.16% 42.98%
--------------------------------------- ------------------------------------- -------------------------------------
</TABLE>
POSSIBILITY OF REDUCED EXPENSES. A combined fund offers economies of scale that
may lead to better control over expenses than is currently possible,
particularly for BT Fund. Both funds incur substantial costs for accounting,
legal, transfer agency services, insurance, and custodial and administrative
services. As shown in the fee table in the Summary, the investment management
fee rate and expense ratio of MG Fund Institutional shares are lower than those
of BT Fund, both on a gross basis and after taking into account current fee
waivers and expense reimbursements.
BENEFITS TO MG FUND. The board of trustees of MG Fund considered that the
reorganization presents an excellent opportunity for MG Fund to acquire
investment assets without the obligation to pay commissions or other transaction
costs that are normally associated with the purchase of portfolio securities.
This opportunity provides an economic benefit to MG Fund and its shareholders.
BENEFITS TO ADVISERS AND OTHER SERVICE PROVIDERS. The boards of trustees of both
funds considered that the funds' advisers, administrators and distributors will
also benefit from the reorganization. For example, the advisers and
administrators might realize time savings from a consolidated portfolio
management effort and from the need to prepare fewer prospectuses, reports and
regulatory filings. The trustees believe, however, that these savings will not
amount to a significant economic benefit.
ADDITIONAL TERMS OF AGREEMENT AND PLAN OF REORGANIZATION
SURRENDER OF SHARE CERTIFICATES. Shareholders of BT Fund whose shares are
represented by one or more share certificates should, before the reorganization
date, either surrender their certificates to BT Fund or deliver to BT Fund a
lost certificate affidavit, in the form and accompanied by any surety bonds that
BT Fund may require (collectively, an "Affidavit"). On the reorganization date,
all certificates that have not been surrendered will be cancelled, will no
longer evidence ownership of BT Fund's shares and will evidence ownership of MG
Fund Institutional shares. Shareholders may not redeem or transfer the MG Fund
Institutional shares received in the reorganization until they have surrendered
their MG Fund share certificates or delivered an Affidavit. MG Fund will not
issue share certificates in the reorganization.
8
<PAGE>
CONDITIONS TO CLOSING THE REORGANIZATION. The obligation of BT Fund to
consummate the reorganization is subject to the satisfaction of certain
conditions, including the performance by MG Fund of all its obligations under
the Agreement and the receipt of an officers' certificate and an opinion of
counsel from MG Fund (see Agreement, paragraph 6).
The obligation of MG Fund to consummate the reorganization is subject to the
satisfaction of certain conditions, including BT Fund's performance of all of
its obligations under the Agreement and the receipt of certain financial and tax
information, an officers' certificate and an opinion of counsel from BT Fund
(see Agreement, paragraph 7).
The obligations of both funds are subject to the approval of the Agreement by
the necessary vote of the outstanding shares of BT Fund, in accordance with the
provisions of BT Fund's declaration of trust and by-laws. The funds' obligations
are also subject to several other conditions, including the receipt of all
consents, orders and permits necessary to consummate the reorganization and the
receipt of a favorable opinion of counsel to each fund as to the federal income
tax consequences of the reorganization. (see Agreement, paragraph 8).
TERMINATION OF AGREEMENT. BT Fund or MG Fund may mutually agree to terminate the
Agreement (even if the shareholders of BT Fund have already approved it) at any
time before the reorganization date. Either fund may also terminate the
Agreement if the other fund has breached any representation, warranty or
agreement contained in the Agreement or if any condition to closing the
reorganization cannot or will not be met.
EXPENSES OF THE REORGANIZATION. Bankers Trust Company has informed the funds
that it will bear all costs of the reorganization except that BT Fund will bear
the fees and expenses incurred in connection with its liquidation and
termination. These liquidation and termination fees are expected to be
approximately $5,000.00.
CAPITALIZATION
The following table sets forth the capitalization of each fund as of April 30,
1999, and the PRO FORMA combined capitalization of both funds as if the
reorganization had occurred on that date. The table reflects PRO FORMA exchange
ratios of approximately 1.9 MG Fund Institutional shares being issued for each
share of BT Fund. If the reorganization is consummated, the actual exchange
ratios on the reorganization date may vary from the exchange ratios indicated
due to changes in any of the following:
[ ] The market value of the portfolio securities of both MG Fund and BT Fund
between April 30, 1999 and the reorganization date.
[ ] Changes in the amount of undistributed net investment income and net
realized capital gains of MG Fund and BT Fund during that period
resulting from income and distributions.
[ ] Changes in the accrued liabilities of MG Fund and BT Fund during the same
period.
<TABLE>
<CAPTION>
------------------------------- ---------------- ---------------------------------- -------------------------------
CAPITALIZATION AS MG FUND
OF APRIL 30, 1999 BT FUND MG FUND PRO FORMA COMBINED(1)
------- ------- ---- -------------------
Institutional Service Institutional Service
------------- ------- ------------- -------
<S> <C> <C> <C>
Net assets $3,333,622 $133,694,604 N/A $137,025,226 N/A
----------
Net asset value per share $12.03 $6.34 N/A $6.34 N/A
-------------------------
Shares outstanding 276,807 21,083,984 N/A 21,609,319 N/A
------------------
------------------------------- ---------------- ----------------- ---------------- ---------------- --------------
</TABLE>
1 If the reorganization had taken place on April 30, 1999, BT Fund would have
received 525,335 Institutional shares of MG Fund, which would have been
available for distribution to the shareholders of BT Fund.
It is impossible to predict how many Institutional shares of MG Fund will
actually be received and distributed by BT Fund on the reorganization date. The
table should not be relied upon to determine the amount of MG Fund Institutional
shares that will actually be received and distributed.
9
<PAGE>
COMPARISON OF BUSINESS TRUSTS UNDER DELAWARE AND MASSACHUSETTS LAW
BT Fund is organized as a Massachusetts business trust. MG Fund is organized as
a Delaware business trust. The following is a comparison of the laws of
Massachusetts and Delaware applicable to business trusts.
Limitation of Shareholders' and Funds' Liability. Delaware law provides that the
shareholders of a Delaware business trust shall not be subject to liability for
the debts or obligations of the trust. Under Massachusetts law, shareholders of
a Massachusetts business trust (such as BT Fund) may, under certain
circumstances, be liable for the debts and obligations of that trust. Although
the risk of liability of shareholders of a Massachusetts business trust who do
not participate in the management of the trust may be remote, Delaware statutory
law may be considered to afford greater protection against potential shareholder
liability. Similarly, Delaware law provides that, to the extent that a Delaware
business trust issues multiple series of shares, each series shall not be liable
for the debts or obligations of any other series, another potential, although
remote, risk in the case of multiple series of a Massachusetts business trust.
While it is frequently assumed that a Massachusetts business trust will only be
liable for its own obligations, there is no direct statutory or judicial support
for that position.
Limitation of Trustee Liability. Delaware law provides that, except to the
extent otherwise provided in a trust's declaration of trust or by-laws, trustees
will not be personally liable to any person (other than the business trust or a
shareholder thereof) for any act, omission or obligation of the business trust
or any trustee thereof. Delaware law also provides that a trustee's actions
under a Delaware business trust's declaration of trust or by-laws will not
subject the trustee to liability to the business trust or its shareholders if
the trustee takes such action in good faith reliance on the provisions of the
business trust's declaration of trust or by-laws. The declaration of trust of a
Massachusetts business trust may limit the liability of a trustee who is not
also an officer of the trust for breach of fiduciary duty except for, among
other things, any act or omission not in good faith which involves intentional
misconduct or a knowing violation of law or any transaction from which such
trustee derives an improper direct or indirect financial benefit. These
limitations on liability under Delaware law are generally consistent with those
applicable to directors of a corporation under Delaware law and may be
beneficial in attracting and retaining qualified persons to act as trustees.
Shareholder Voting. Delaware law provides that a Delaware business trust's
declaration of trust or by-laws may set forth provisions related to voting in
any manner. This provision appears to permit shareholder voting through computer
or electronic media. For an investment company with a significant number of
shareholders with access to computer or electronic networks, the use of such
voting methods could significantly reduce the costs of shareholder voting.
Declarations of Trust. Although neither a Delaware business trust nor a
Massachusetts business trust is required to hold annual shareholder meetings,
Delaware law affords to the trustees the ability to adapt the Delaware business
trust to future contingencies without the necessity of holding a special
shareholder meeting. The trustees of a Delaware business trust may have the
power to amend the business trust's governing instrument to create a class or
series of shares of beneficial interest that was not previously outstanding; to
dissolve the business trust; to incorporate the Delaware business trust; to
merge or consolidate with another entity; to sell, lease, exchange, transfer,
pledge or otherwise dispose of all or any part of the business trust's assets;
to cause any series to become a separate trust; and to change the Delaware
business trust's domicile -- all without shareholder vote. Any exercise of
authority by the trustees will be subject to applicable state and federal law.
The flexibility of Delaware business trusts should help to assure that a
Delaware business trust operates under the most advantageous form of
organization and is intended to reduce the expense and frequency of future
shareholder meetings for non-investment-related operational issues.
10
<PAGE>
ADDITIONAL INFORMATION ABOUT THE FUNDS' BUSINESSES
The following table shows where in each fund's prospectus you can find
additional information about the business of the fund.
<TABLE>
<CAPTION>
--------------------------------------- ---------------------------------------------------------------------------
TYPE OF INFORMATION HEADINGS IN PROSPECTUSES
--------------------------------------- ------------------------------------- -------------------------------------
MG FUND BT FUND
--------------------------------------- ------------------------------------- -------------------------------------
<S> <C> <C> <C> <C> <C> <C>
RISK/RETURN SUMMARY Fund Descriptions: Emerging Markets Overview of the Institutional
Equity Global Emerging Markets Equity Fund
--------------------------------------- ------------------------------------- -------------------------------------
Investment objectives/goals Investment Objective and Strategy Goal
--------------------------------------- ------------------------------------- -------------------------------------
Principal investment strategies Investment Objective and Strategy, Core Strategy, Investment Policies
Principal Holdings and Strategies
--------------------------------------- ------------------------------------- -------------------------------------
Principal risks of investing in the Investment Risks, Who May Want to Principal Risks of Investing in the
funds: narrative disclosure Invest Fund, Who Should Consider Investing
in the Fund
--------------------------------------- ------------------------------------- -------------------------------------
Principal risks of investing in the Fund Performance Total Returns, After Fees and
funds: risk/return bar chart and table Expenses
--------------------------------------- ------------------------------------- -------------------------------------
Fee table Shareholder Expenses Annual Fund Operating Expenses
--------------------------------------- ------------------------------------- -------------------------------------
BODY OF PROSPECTUS A Detailed Look at the
Institutional Global Emerging
Markets Equity Fund
--------------------------------------- ------------------------------------- -------------------------------------
Investment objectives, principal More About Risk Objective, The Case for Emerging
investment strategies and related Markets, Strategy, Principal
risks Investments, Investment Process,
Risks
--------------------------------------- ------------------------------------- -------------------------------------
Management: investment Investment Adviser Management of the Fund
adviser and portfolio manager
--------------------------------------- ------------------------------------- -------------------------------------
Shareholder information: Managing Your Investment: Buying Calculating the Fund's Share Price
pricing of fund shares and Selling Shares: How Shares are
Priced
--------------------------------------- ------------------------------------- -------------------------------------
Shareholder information: Managing Your Investment: Buying Buying and Selling Fund Shares
purchase of fund shares and Selling Shares: Buying and
Selling Shares Through a Plan,
Buying and Selling Shares Through a
Broker, Buying and Selling Shares
Directly, Payment of Redemption
Proceeds
---------------------------------------
Shareholder information:
redemption of fund shares
--------------------------------------- ------------------------------------- -------------------------------------
Shareholder information: Managing Your Investment: Holding Dividends and Distributions, Tax
dividends and distributions; tax Shares: Dividends and Considerations
consequences Distributions, Tax Considerations
--------------------------------------- ------------------------------------- -------------------------------------
Financial highlights Financial Highlights Financial Highlights
information
--------------------------------------- ------------------------------------- -------------------------------------
</TABLE>
BOARDS' EVALUATION AND RECOMMENDATION
For the reasons described above, the board of trustees of BT Fund, including the
trustees who are not "interested persons" of either fund or any of their
advisers ("independent trustees"), approved the reorganization at a meeting held
on
11
<PAGE>
June 9, 1999. In particular, the board determined that the reorganization was in
the best interests of BT Fund and that the interests of BT Fund's shareholders
would not be diluted as a result of the reorganization. Similarly, the board of
trustees of MG Fund, including the independent trustees, approved the
reorganization at a meeting held on June 9, 1999. The board also determined that
the reorganization was in the best interests of MG Fund and that the interests
of MG Fund's shareholders would not be diluted as a result of the
reorganization.
- --------------------------------------------------------------------------------
THE BOARD OF TRUSTEES OF BT FUND RECOMMENDS THAT THE SHAREHOLDERS OF BT FUND
VOTE FOR THE PROPOSAL TO APPROVE THE AGREEMENT AND PLAN OF REORGANIZATION.
- --------------------------------------------------------------------------------
VOTING RIGHTS AND REQUIRED VOTE
Each share of BT Fund outstanding on the record date is entitled to one vote.
Approval of the above proposal requires the affirmative vote of a majority of
the shares of BT Fund outstanding and entitled to vote. For this purpose, a
majority of the outstanding shares of BT Fund means the vote of the lesser of:
(1) 67% or more of the shares present at the meeting, if the holders of more
than 50% of the shares of the BT Fund are present or represented by proxy, or
(2) more than 50% of the outstanding shares of the BT Fund.
Shares of BT Fund represented in person or by proxy, including shares which
abstain or do not vote on the proposal, will be counted for purposes of
determining whether there is a quorum at the meeting. These include proxies
submitted by a broker or nominee holding shares in "street name" who indicates
on the proxy card that it does not have discretionary authority to vote on the
proposal. Accordingly, an abstention from voting or a "broker non-vote" has the
same effect as a vote against the proposal.
If the required approval of shareholders is not obtained, BT Fund will continue
to engage in business as a separate mutual fund and the board of trustees will
consider what further action may be appropriate.
INFORMATION CONCERNING THE MEETING
SOLICITATION OF PROXIES
In addition to the mailing of these proxy materials, proxies may be solicited by
telephone, by fax, through the Internet or in person by the trustees, officers
and employees of BT Fund or by personnel of BT or ICC Distributors, Inc., the
distributor of BT Fund's shares. Shareholder Communications Corporation, a third
party solicitation firm, has agreed to provide proxy solicitation services to BT
Fund all of which will be borne by BT.
REVOKING PROXIES
A BT Fund shareholder signing and returning a proxy has the power to revoke it
at any time before it is exercised:
[ ] By filing a written notice of revocation with BT Fund's transfer agent, or
[ ] By returning before the time of the meeting a duly executed proxy with
a later date than the proxy being revoked, or
[ ] If a shareholder has executed a proxy but is present at the meeting and
wishes to vote in person, by notifying the secretary of BT Fund at the
meeting at any time before it is voted.
Being present at the meeting alone will NOT revoke a previously executed and
returned proxy.
OUTSTANDING SHARES AND QUORUM
As of July 22, 1999, 294,974.071 shares of BT Fund were outstanding. Only
shareholders of record on July 22, 1999 (the "record date") are entitled to
notice of and to vote at the meeting. A majority of the outstanding shares of BT
Fund that are entitled to vote will be considered a quorum for the transaction
of business.
12
<PAGE>
OTHER BUSINESS
BT Fund's board of trustees knows of no business to be presented for
consideration at the meeting other than the proposal. If other business is
properly brought before the meeting, proxies will be voted according to the best
judgment of the persons named as proxies.
ADJOURNMENTS
If a quorum is not present in person or by proxy at the time any session of the
meeting is called to order, the persons named as proxies may vote those proxies
that have been received to adjourn the meeting to a later date. If a quorum is
present but there are not sufficient votes in favor of the proposal, the persons
named as proxies may propose one or more adjournments of the meeting to permit
further solicitation of proxies concerning the proposal. Any adjournment will
require the affirmative vote of a majority of BT Fund's shares present at the
session of the meeting to be adjourned. If an adjournment of the meeting is
proposed because there are not sufficient votes in favor of the proposal, the
persons named as proxies will vote those proxies favoring the proposal in favor
of adjournment, and will vote those proxies against the reorganization against
adjournment.
TELEPHONE AND INTERNET VOTING
BT Fund may record votes over the telephone or through the Internet. In doing
so, it will use procedures designed to authenticate shareholders' identities, to
allow shareholders to authorize the voting of their shares in accordance with
their instructions, and to confirm that their instructions have been properly
recorded. Proxies voted over the telephone or through the Internet may be
revoked at any time before they are voted in the same manner that proxies voted
by mail may be revoked.
OWNERSHIP OF SHARES OF THE FUNDS
To the knowledge of the funds, as of July 22, 1999, the following persons owned,
of record or beneficially, 5% or more of the outstanding shares of BT Fund and
MG Fund (before the reorganization) and would own, (after the reorganization),
5% or more of the shares of the MG Fund.
<TABLE>
<CAPTION>
--------------------------------------- ------------------- ---------------------------- --------------------------
NAMES AND ADDRESSES OF OWNERS OF MORE BT FUND MG FUND MG FUND
THAN 5% OF SHARES INSTITUTIONAL SHARES INSTITUTIONAL SHARES
(BEFORE REORGANIZATION) (AFTER REORGANIZATION)4
--------------------------------------- ------------------- ---------------------------- --------------------------
<S> <C> <C> <C>
(1)Bankers Trust Company 94,000 174,840
FBO 2245354040 31.867% .757%
P.O. Box 9005
New York, NY 10008
--------------------------------------- ------------------- ---------------------------- --------------------------
Charles Schwab & Co. 41,758.752 77,671.279
Omnibus Account Reinvest 14.157% .336%
Attn: Mutual Fund Acct Mgmt TEA 333-8
101 Montgomery Street
San Francisco, CA 94014
--------------------------------------- ------------------- ---------------------------- --------------------------
Bankers Trust Company 32,500.00 60,450
FBO 2548334040 11.018% .262%
P.O. Box 9005
New York, NY 10008
Church Street Station
--------------------------------------- ------------------- ---------------------------- --------------------------
Bankers Trust Company 27,500.00 51,150
FBO 2527762424 9.323% .221%
P.O. Box 9005
New York, NY 10008
Church Street Station
--------------------------------------- ------------------- ---------------------------- --------------------------
13
<PAGE>
--------------------------------------- ------------------- ---------------------------- --------------------------
NAMES AND ADDRESSES OF OWNERS OF MORE BT FUND MG FUND MG FUND
THAN 5% OF SHARES INSTITUTIONAL SHARES INSTITUTIONAL SHARES
(BEFORE REORGANIZATION) (AFTER REORGANIZATION)4
--------------------------------------- ------------------- ---------------------------- --------------------------
Bankers Trust Company 16,592.92 30,862.83
FBO 2313124040 5.625% 1.33%
P.O. Box 9005
New York, NY 10008
Church Street Station
--------------------------------------- ------------------- ---------------------------- --------------------------
(2,3)Harris Trust 8,091,825.93 8,091,825.93
c/o Motorola Pension Fund 35.87% 35.02%
111 West Monroe
P.O. Box 755
Chicago, IL 60690-0755
--------------------------------------- ------------------- ---------------------------- --------------------------
(2,3)Public School Employees Retirement 5,942,369.53 5,942,369.53
System 26.34% 25.71%
c/o State Street PA SVCS
30 N 3rd Street, Suite 750
Harrisburg, PA 17101-1713
--------------------------------------- ------------------- ---------------------------- --------------------------
(2)Northern Trust Company TR 5,908,847.35 5,908,847.35
c/o Motorola Employees Savings and 26.19% 25.57%
Profit Sharing Trust 17-72410
P.O. Box 92956
Chicago, IL 60675-2956
--------------------------------------- ------------------- ---------------------------- --------------------------
Public Employees' Retirement 2,485,230.27 2.485,230.27
Association 11.02% 10.75%
Attn: Daryl Roberts
1300 Logan Street
Denver, CO 80203-2386
--------------------------------------- ------------------- ---------------------------- --------------------------
</TABLE>
(1)As of July 22, 1999, an owner of greater than 25% of the outstanding shares
of BT Fund.
(2)As of July 22, 1999, an owner of greater than 25% of the outstanding shares
of the Institutional Class of MG Fund.
(3)After the reorganization, an owner of greater than 25% of the outstanding
share of the Institutional Class of MG Fund.
(4)As of July 22, The table reflects PRO FORMA exchange ratios of approximately
1.86 MG Fund Institutional shares being issued for each share of BT Fund. If the
reorganization is consummated, the actual exchange ratios on the reorganization
date may vary from the exchange ratios as previously discussed.
As of July 22, 1999, the trustees and officers of BT Fund and MG Fund, each as a
group, owned in the aggregate less than 1% of the outstanding shares of their
respective funds.
EXPERTS
The financial statements and the financial highlights of BT Fund as of September
30, 1998 and for the period then ended and of MG Fund as of October 31, 1998 and
for the period/years in the period then ended are incorporated by reference into
this proxy statement and prospectus. These financial statements and highlights
for each of BT Fund and MG Fund have been audited by PricewaterhouseCoopers LLP,
independent accountants for each fund, as stated in the reports appearing in the
respective Annual Report to shareholders which is incorporated by reference in
the statement of additional information. These financial statements and
highlights are included in reliance upon the reports given upon the authority of
such firm as an expert in accounting and auditing.
14
<PAGE>
AVAILABLE INFORMATION
Each fund is subject to the informational requirements of the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 and files reports,
proxy statements and other information with the SEC. These reports, proxy
statements and other information filed by the funds can be inspected and copied
(at prescribed rates) at the public reference facilities of the SEC at 450 Fifth
Street, N.W., Washington, D.C., and at the following regional offices: Chicago
(500 West Madison Street, Suite 1400, Chicago, Illinois); and New York (7 World
Trade Center, Suite 1300, New York, New York). Copies of such material can also
be obtained by mail from the Public Reference Section of the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition, copies
of these documents may be viewed on-screen or downloaded from the SEC's Internet
site at http://www.sec.gov.
15
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "AGREEMENT") is made as
of this ____th day of __________, 1999, among (i) Morgan Grenfell Investment
Trust (the "MORGAN GRENFELL TRUST"), a business trust organized under the laws
of the State of Delaware with its principal place of business at 885 Third
Avenue, New York, New York 10022, on behalf of Morgan Grenfell Emerging Markets
Equity Fund (the "ACQUIRING FUND"), a series of the Morgan Grenfell Investment
Trust (the "MORGAN GRENFELL TRUST"), and (ii) BT Investment Funds (the "BT
TRUST"), a business trust organized under the laws of The Commonwealth of
Massachusetts with its principal place of business at One South Street,
Baltimore, Maryland 21202, on behalf of Global Emerging Markets Equity Fund (the
"ACQUIRED FUND"), series of the BT Trust.
This Agreement is intended to be and is adopted as a plan of
reorganization within the meaning of Section 368(a)(1) of the United States
Internal Revenue Code of 1986, as amended (the "CODE"). The reorganization (the
"REORGANIZATION") will consist of (i) the transfer of all of the assets of the
Acquired Fund to the Acquiring Fund in exchange for (a) the issuance of
Institutional Class shares of beneficial interest of the Acquiring Fund
(collectively, the "ACQUIRING FUND SHARES" and each, an "ACQUIRING FUND SHARE")
to the Acquired Fund, and (b) the assumption by the Acquiring Fund of certain
scheduled liabilities of the Acquired Fund, and (ii) the distribution by the
Acquired Fund, on the Closing Date herein referred to or as soon thereafter as
conveniently practicable, of the Acquiring Fund Shares to the shareholders of
the Acquired Fund in liquidation of the Acquired Fund and the termination of the
Acquired Fund, all upon the terms and conditions hereinafter set forth in this
Agreement.
WHEREAS, the Morgan Grenfell Trust and the BT Trust are each registered
investment companies of the management type and the Acquired Fund owns
securities that generally are assets of the character in which the Acquiring
Fund is permitted to invest;
WHEREAS, the Acquiring Fund is authorized to issue shares of beneficial
interest;
WHEREAS, the Board of Trustees of the Morgan Grenfell Trust has
determined that the exchange of all of the assets and certain of the liabilities
of the Acquired Fund for Acquiring Fund Shares is in the best interests of the
Acquiring Fund shareholders and that the interests of the existing shareholders
of the Acquiring Fund would not be diluted as a result of this transaction;
WHEREAS, the Board of Trustees of the BT Trust has determined that the
exchange of all of the assets and certain of the liabilities of the Acquired
Fund for Acquiring Fund Shares and the assumption of such liabilities by the
Acquired Fund is in the best interests of the Acquiring Fund shareholders and
that the interests of the existing shareholders of the Acquired Fund would not
be diluted as a result of this transaction.
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR THE ACQUIRING
FUND SHARES AND ASSUMPTION OF THE ACQUIRED FUND'S SCHEDULED LIABILITIES
AND LIQUIDATION AND TERMINATION OF THE ACQUIRED FUND.
1.1. Subject to the terms and conditions herein set forth and on the
basis of the representations and warranties contained herein, the Acquired Fund
agrees to transfer its assets transferred to Acquiring Fund as set forth in
paragraph 1.2 to the Acquiring Fund free and clear of all liens and
encumbrances, and the Acquiring Fund agrees in exchange therefor: (i) to issue
and deliver to the Acquired Fund the number of Acquiring Fund Shares, including
fractional Acquiring Fund Shares, determined by dividing the value of the
Acquired Fund's net assets transferred to Acquiring Fund, computed in the manner
and as of the time and date set forth in paragraph 2.1, by the net asset value
of
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one Acquiring Fund Share, computed in the manner as of the time and date set
forth in paragraph 2.2; and (ii) to assume certain scheduled liabilities of the
Acquired Fund, as set forth in paragraph 1.3. Such transactions shall take place
at the closing provided for in paragraph 3.1 (the "CLOSING").
1.2. (a) The assets of the Acquired Fund to be acquired by the
Acquiring Fund shall consist of all of its property, including, without
limitation, all good will, all interests in the name of the Acquired Fund, all
other intangible property and all books and records of the Acquired Fund.
(b) The Acquired Fund has provided the Acquiring Fund with a
list of all of the Acquired Fund's assets as of the date of execution of this
Agreement. The Acquired Fund reserves the right to sell any of these securities
(except to the extent sales may be limited by representations made in connection
with issuance of the tax opinion described in paragraph 8.6 hereof) but will
not, without the prior approval of the Acquiring Fund, acquire any additional
securities other than securities of the type in which the Acquiring Fund is
permitted to invest.
1.3. The Acquired Fund will endeavor to discharge all the Acquired
Fund's known liabilities and obligations prior to the Closing Date. The
Acquiring Fund shall assume all liabilities, expenses, costs, charges and
reserves reflected on an unaudited Statement of Assets and Liabilities of the
Acquired Fund prepared by Bankers Trust Company, as administrator of the
Acquired Fund, as of the Valuation Date, in accordance with generally accepted
accounting principles consistently applied from the prior audited period. The
Acquiring Fund shall assume only those liabilities of the Acquired Fund
reflected in that unaudited Statement of Assets and Liabilities and shall not
assume any other liabilities, whether absolute or contingent, not reflected
thereon.
1.4. On the Closing Date or as soon thereafter as is conveniently
practicable (the "LIQUIDATION Date"), the Acquired Fund will liquidate and
distribute pro rata to the Acquired Fund's shareholders of record determined as
of the close of business on the Closing Date (the "ACQUIRED FUND SHAREHOLDERS"),
the Acquiring Fund Shares it receives pursuant to paragraph 1.1. Such
liquidation and distribution will be accomplished by the transfer of the
Acquiring Fund Shares then credited to the account of the Acquired Fund on the
books of the Acquiring Fund to open accounts on the share records of the
Acquiring Fund in the name of the Acquired Fund's shareholders and representing
the respective pro rata number of the Acquiring Fund Shares due such
shareholders. All issued and outstanding shares of the Acquired Fund will
simultaneously be cancelled on the books of the Acquired Fund, although share
certificates representing interests in the Acquired Fund will represent a number
of Acquiring Fund Shares after the Closing Date as determined in accordance with
paragraph 1.1. The Acquiring Fund shall not issue certificates representing the
Acquiring Fund Shares in connection with such exchange.
1.5. Ownership of Acquiring Fund Shares will be shown on the books of
the Acquiring Fund's transfer agent. Acquiring Fund Shares will be issued in the
manner described in the Acquiring Fund's current prospectus and statement of
additional information.
1.6. Any transfer taxes payable upon issuance of the Acquiring Fund
Shares in a name other than the registered holder of the Acquired Fund shares on
the books of the Acquired Fund as of that time shall, as a condition of such
issuance and transfer, be paid by the person to whom such Acquiring Fund Shares
are to be issued and transferred.
1.7. Any reporting responsibility of the Acquired Fund is and shall
remain the responsibility of the Acquired Fund up to and including the Closing
Date and such later date on which the Acquired Fund is terminated.
1.8. The Acquired Fund shall, following the Closing Date and the making
of all distributions pursuant to paragraph 1.4, be terminated under the laws of
The Commonwealth of Massachusetts and in accordance with its governing
documents.
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2. VALUATION
2.1. The value of the assets of the Acquired Fund to be transferred,
and liabilities of the Acquired Fund to be assumed, hereunder shall be the value
of such assets computed as of the close of regular trading on the New York Stock
Exchange, Inc. (the "NYSE") on the Closing Date (such time and date being
hereinafter called the "VALUATION DATE"), using the valuation procedures set
forth in the then current prospectus or statement of additional information of
the Acquired Fund.
2.2. The net asset value of the Acquiring Fund Shares shall be the
value computed as of the close of regular trading on the NYSE on the Valuation
Date, using the valuation procedures set forth in the then current prospectus or
statement of additional information of the Acquiring Fund.
2.3. All computations of value shall be made by Brown Brothers Harriman
& Co. in accordance with its regular practice as pricing agent for the Acquiring
Fund.
3. CLOSING AND CLOSING DATE
3.1. The Closing Date shall be September 30, 1999, or such later date
as the parties may agree to in writing. All acts taking place at the Closing
shall be deemed to take place simultaneously as of the close of business on the
Closing Date unless otherwise provided. The Closing shall be held as of 5:00
p.m. at the offices of Bankers Trust Company, One South Street, Baltimore,
Maryland 21202, or at such other time and/or place as the parties may agree.
3.2. The custodian for the Acquired Fund (the "CUSTODIAN") shall
deliver at the Closing a certificate of an authorized officer stating that: (a)
the Acquired Fund's assets have been delivered in proper form to the Acquiring
Fund on the Closing Date and (b) all necessary transfer taxes including all
applicable federal and state stock transfer stamps, if any, shall have been
paid, or provision for payment shall have been made, in conjunction with the
delivery of portfolio securities.
3.3. In the event that on the Valuation Date (a) the NYSE or another
primary trading market for portfolio securities of the BT Investment Portfolios
shall be closed to trading or trading thereon shall be restricted or (b) trading
or the reporting of trading on the NYSE or elsewhere shall be disrupted so that
accurate appraisal of the value of the net assets of the parties hereto is
impracticable, the Closing Date shall be postponed until the first business day
after the day when trading shall have been fully resumed and reporting shall
have been restored.
3.4. The Acquired Fund shall deliver to the Acquiring Fund at the
Closing a list of the names, addresses, taxpayer identification numbers and
backup withholding and nonresident alien withholding status of the Acquired Fund
Shareholders and the number and percentage ownership of outstanding shares owned
by each such shareholder immediately prior to the Closing, certified on behalf
of the Acquired Fund by the President or a Vice President of the BT Trust. The
Acquiring Fund shall issue and deliver a confirmation evidencing the Acquiring
Fund Shares to be credited to the Acquired Fund's account on the Closing Date to
the Secretary of the BT Trust on behalf of the Acquired Fund, or provide
evidence satisfactory to the Acquired Fund that such Acquiring Fund Shares have
been credited to the Acquired Fund's account on the books of the Acquiring Fund.
At the Closing, each party shall deliver to the other such bills of sale,
checks, assignments, share certificates, if any, receipts or other documents as
such other party or its counsel may reasonably request.
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4. REPRESENTATIONS AND WARRANTIES
4.1. The BT Trust and the Acquired Fund represent and warrant to the
Morgan Grenfell Trust and the Acquiring Fund as follows:
(a) The Acquired Fund is a series of the BT Trust, which is a business
trust, validly existing and in good standing under the laws of The Commonwealth
of Massachusetts and has the power to own all of its properties and assets and,
subject to approval by the shareholders of the Acquired Fund, to perform its
obligations under this Agreement. The Acquired Fund is not required to qualify
to do business in any jurisdiction in which it is not so qualified or where
failure to qualify would not subject it to any material liability or disability.
The Acquired Fund has all necessary federal, state and local authorizations to
own all of its properties and assets and to carry on its business as now being
conducted;
(b) The BT Trust is a registered investment company classified as a
management company of the open-end type, and its registration with the
Securities and Exchange Commission (the "COMMISSION") as an investment company
under the Investment Company Act of 1940 (the "INVESTMENT COMPANY ACT") is in
full force and effect;
(c) The BT Trust is not, and the execution, delivery and performance of
this Agreement in respect of the Acquired Fund will not result, in a material
violation of its Declaration of Trust or By-laws or of any agreement, indenture,
instrument, contract, lease or other undertaking with respect to the Acquired
Fund to which the BT Trust is a party or by which it is bound;
(d) The BT Trust has no material contracts or other commitments (other
than this Agreement) with respect to the Acquired Fund which will be terminated
with liability to the BT Trust or to the Acquired Fund prior to the Closing
Date;
(e) No material litigation or administrative proceeding or
investigation of or before any court or governmental body is presently pending
or to its knowledge threatened against the BT Trust with respect to the Acquired
Fund or any of the Acquired Fund's properties or assets, except as previously
disclosed in writing to, and acknowledged in writing by, the Acquiring Fund. The
BT Trust and the Acquired Fund know of no facts which might form the basis for
the institution of such proceedings and neither the BT Trust nor the Acquired
Fund is a party to or subject to the provisions of any order, decree or judgment
of any court or governmental body which materially and adversely affects the
Acquired Fund's business or the BT Trust's ability to consummate the
transactions herein contemplated;
(f) The Statement of Assets and Liabilities of the Acquired Fund as of
September 30, 1998, has been audited by PricewaterhouseCoopers LLP, independent
certified public accountants, and is in accordance with generally accepted
accounting principles consistently applied, and such statement (copies of which
have been furnished to each of the other parties hereto) fairly reflects the
financial condition of the Acquired Fund as of such date, and there are no known
contingent liabilities of the Acquired Fund as of such date not disclosed
therein;
(g) Since September 30, 1998, there has not been any material adverse
change in the Acquired Fund's financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of business, or any
incurrence by the Acquired Fund of indebtedness maturing more than one year from
the date that such indebtedness was incurred, except as otherwise disclosed to
and accepted by each of the other parties hereto. For the purposes of this
subparagraph (g), a decline in net asset value per share of the Acquired Fund
shall not constitute a material adverse change;
(h) At the Closing Date, all federal and other tax returns and reports
of the Acquired Fund required by law then to have been filed by such dates shall
have been filed, and all federal and other taxes shown as due on such returns
shall have been paid so far as due, or provision shall have been made for the
payment thereof and, to the best of the Acquired Fund's knowledge, no such
return is currently under audit and no assessment has been asserted with respect
to such returns;
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(i) For each taxable year of its operation, the Acquired Fund has met
the requirements of Subchapter M of the Code for qualification and treatment as
a regulated investment company and has elected to be treated as such and will
qualify as such for its final taxable year ending on the Closing Date;
(j) All issued and outstanding shares of the Acquired Fund are, and at
the Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable. All of the issued and outstanding shares of the Acquired
Fund will, at the time of Closing, be held by the persons and in the amounts set
forth in the records of the transfer agent as provided in paragraph 3.4. The
Acquired Fund does not have outstanding any options, warrants or other rights to
subscribe for or purchase any shares of the Acquired Fund, nor is there
outstanding any security convertible into any shares of the Acquired Fund;
(k) At the Closing Date, the BT Trust in respect of the Acquired Fund
will have good and marketable title to the assets to be transferred to the
Acquiring Fund pursuant to paragraph 1.1 and full right, power and authority to
sell, assign, transfer and deliver such assets hereunder and, upon delivery and
payment for such assets, the Acquiring Fund will acquire good and marketable
title thereto, subject to no restrictions on the full transfer thereof,
including such restrictions as might arise under the Securities Act of 1933 (the
"SECURITIES ACT"), other than as disclosed in writing to, and acknowledged in
writing by, the Acquiring Fund;
(1) The execution, delivery and performance of this Agreement has been
duly authorized by all necessary action on the part of the BT Trust's Board of
Trustees on behalf of the Acquired Fund, and, subject to the approval of the
Acquired Fund shareholders, assuming due authorization, execution and delivery
by the Morgan Grenfell Trust on behalf of the Acquiring Fund, this Agreement
will constitute a valid and binding obligation of the BT Trust in respect of the
Acquired Fund, enforceable in accordance with its terms, subject as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights and to general equity
principles;
(m) The information to be furnished by the Acquired Fund for use in
no-action letters, applications for exemptive orders, registration statements,
proxy materials and other documents which may be necessary in connection with
the transactions contemplated hereby shall be accurate and complete in all
material respects and shall comply in all material respects with federal
securities and other laws and regulations thereunder applicable thereto;
(n) The proxy statement of the Acquired Fund (the "PROXY STATEMENT") to
be included in the registration statement on Form N-14 of the Acquiring Fund
(the "REGISTRATION STATEMENT") (other than information therein that relates to
the Acquiring Fund and supplied in writing by the Acquiring Fund for inclusion
therein) will, on the effective date of the Registration Statement and on the
Closing Date, not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which such statements
were made, not materially misleading;
(o) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the Acquired Fund of
the transactions contemplated by this Agreement;
(p) All of the issued and outstanding shares of beneficial interest of
the Acquired Fund have been offered for sale and sold in conformity with all
applicable federal and state securities laws, except as may have been previously
disclosed in writing to the Acquiring Fund; and
(q) The prospectus of the Acquired Fund dated January 31, 1999, and any
amendments or supplements thereto, previously furnished to the Acquiring Fund,
does not contain any untrue statements 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.
4.2. The Morgan Grenfell Trust and the Acquiring Fund represent and
warrant to each of the
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other parties hereto as follows:
(a) The Acquiring Fund is a series of the Morgan Grenfell Trust, which
is a business trust, validly existing and in good standing under the laws of the
State of Delaware and has the power to own all of its properties and assets and
to perform its obligations under this Agreement. The Acquiring Fund is not
required to qualify to do business in any jurisdiction in which it is not so
qualified or where failure to qualify would not subject it to any material
liability or disability. The Acquiring Fund has all necessary federal, state and
local authorizations to own all of its properties and assets and to carry on its
business as now being conducted;
(b) The Morgan Grenfell Trust is a registered investment company
classified as a management company of the open-end type, and its registration
with the Commission as an investment company under the Investment Company Act is
in full force and effect;
(c) The current prospectus of and statement of additional information
of the Morgan Grenfell Trust conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and regulations of
the Commission thereunder and do not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading;
(d) At the Closing Date, the Morgan Grenfell Trust will have good and
marketable title to the Acquiring Fund's assets;
(e) The Morgan Grenfell Trust is not, and the execution, delivery and
performance of this Agreement on behalf of the Acquiring Fund will not result,
in a material violation of its Declaration of Trust or By-laws or of any
agreement, indenture, instrument, contract, lease or other undertaking with
respect to the Acquiring Fund to which the Morgan Grenfell Trust is a party or
by which it is bound;
(f) No material litigation or administrative proceeding or
investigation of or before any court or governmental body is presently pending
or threatened against the Morgan Grenfell Trust with respect to the Acquiring
Fund or any of the Acquiring Fund's properties or assets, except as previously
disclosed in writing to, and acknowledged in writing by, the Acquired Fund. The
Morgan Grenfell Trust and the Acquiring Fund know of no facts which might form
the basis for the institution of such proceedings and neither the Morgan
Grenfell Trust nor the Acquiring Fund is a party to or subject to the provisions
of any order, decree or judgment of any court or governmental body which
materially and adversely affects the Acquiring Fund's business or the Morgan
Grenfell Trust's ability on behalf of the Acquiring Fund to consummate the
transactions contemplated herein;
(g) The Statement of Assets and Liabilities of the Acquiring Fund as of
October 31, 1998 has been audited by PricewaterhouseCoopers LLP, independent
certified public accountants, and is in accordance with generally accepted
accounting principles consistently applied, and such statement (copies of which
have been furnished to each of the other parties hereto) fairly reflects the
financial condition of the Acquiring Fund as of such date, and there are no
known contingent liabilities of the Acquiring Fund as of such date not disclosed
therein;
(h) Since October 31, 1998, there has not been any material adverse
change in the Acquiring Fund's financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of business, or any
incurrence by the Acquiring Fund of indebtedness maturing more than one year
from the date that such indebtedness was incurred, except as otherwise disclosed
to and accepted by the Acquired Fund. For the purposes of this subparagraph (h),
a decline in net asset value per share of the Acquiring Fund shall not
constitute a material adverse change;
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(i) At the Closing Date, all federal and other tax returns and reports
of the Acquiring Fund required by law then to have been filed by such dates
shall have been filed, and all federal and other taxes shown as due on said
returns and reports shall have been paid so far as due, or provision shall have
been made for the payment thereof and, to the best of the Acquiring Fund's
knowledge, no such return is currently under audit and no assessment has been
asserted with respect to such returns;
(j) For each taxable year of its operations, the Acquiring Fund has met
the requirements of Subchapter M of the Code for qualification and treatment as
a regulated investment company and has elected to be treated as such and will
qualify as such on the Closing Date;
(k) At the date hereof, all issued and outstanding shares of the
Acquiring Fund are, and at the Closing Date will be, duly and validly issued and
outstanding, fully paid and non-assessable. The Acquiring Fund does not have
outstanding any options, warrants or other rights to subscribe for or purchase
any shares of the Acquiring Fund, nor is there outstanding any security
convertible into shares of the Acquiring Fund;
(1) The execution, delivery and performance of this Agreement has been
duly authorized by all necessary action, if any, on the part of the Morgan
Grenfell Trust's Board of Trustees on behalf of the Acquiring Fund, and,
assuming due authorization, execution and delivery by the BT Trust on behalf of
the Acquired Fund, this Agreement will constitute a valid and binding obligation
of the Morgan Grenfell Trust on behalf of the Acquiring Fund, enforceable in
accordance with its terms, subject as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting creditors'
rights and to general equity principles;
(m) The Acquiring Fund Shares to be issued and delivered to the
Acquired Fund, for the account of the Acquired Fund shareholders, pursuant to
the terms of this Agreement, will at the Closing Date have been duly authorized
and, when so issued and delivered, will be duly and validly issued Acquiring
Fund Shares and will be fully paid and non-assessable;
(n) The information to be furnished by the Acquiring Fund for use in
no-action letters, applications for exemptive orders, registration statements,
proxy materials and other documents which may be necessary in connection with
the transactions contemplated hereby shall be accurate and complete in all
material respects and shall comply in all material respects with federal
securities and other laws and regulations applicable thereto;
(o) The information contained in Proxy Statement to be included in the
Registration Statement (only insofar as it relates to the Acquiring Fund) will,
on the effective date of the Registration Statement and on the Closing Date, not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which such statements were made, not
misleading; and
(p) The Morgan Grenfell Trust, on behalf of the Acquiring Fund, agrees
to use all reasonable efforts to obtain the approvals and authorizations
required by the Securities Act, the Investment Company Act and such of the state
Blue Sky or securities laws as it may deem appropriate in order to continue the
Acquiring Fund's operations after the Closing Date.
5. COVENANTS OF EACH OF THE PARTIES
5.1. The BT Trust, on behalf of the Acquired Fund, will operate its
business in the ordinary course between the date hereof and the Closing Date. It
is understood that such ordinary course of business will include the declaration
and payment of customary dividends and distributions and any other dividends and
distributions necessary or advisable (except to the extent distributions that
are not customary may be limited by representations made in connection with the
issuance of the tax opinion described in paragraph 8.6 hereof), in each case
payable either in cash or in additional shares.
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5.2. The Morgan Grenfell Trust, on behalf of the Acquiring Fund, will
operate its business in the ordinary course between the date hereof and the
Closing Date. It is understood that such ordinary course of business will
include the declaration and payment of customary dividends and distributions and
any other dividends and distributions necessary or advisable, in each case
payable either in cash or in additional shares.
5.3. The BT Trust will call a meeting of the Acquired Fund's
shareholders to consider and act upon this Agreement and to take all other
action necessary to obtain approval of the transactions contemplated herein.
5.4. The Acquired Fund covenants that the Acquiring Fund Shares to be
issued hereunder are not being acquired for the purpose of making any
distribution thereof other than in accordance with the terms of this Agreement.
5.5. The Acquired Fund will assist the Acquiring Fund in obtaining such
information as the Acquiring Fund reasonably requests concerning the beneficial
ownership of the Acquired Fund's shares.
5.6. Subject to the provisions of this Agreement, the BT Trust, on
behalf of the Acquired Fund, and the Morgan Grenfell Trust, on behalf of the
Acquiring Fund, each will take, or cause to be taken, all action, and do or
cause to be done, all things reasonably necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement.
5.7. The Acquired Fund shall furnish to the Acquiring Fund on the
Closing Date the Statement of Assets and Liabilities of the Acquired Fund as of
the Closing Date, which statement shall be prepared in accordance with generally
accepted accounting principles consistently applied and shall be certified by
the BT Trust's Treasurer or Assistant Treasurer. As promptly as practicable, but
in any case within 60 days after the Closing Date, the Acquired Fund shall
furnish to the Acquiring Fund, in such form as is reasonably satisfactory to the
Acquiring Fund, a statement of the earnings and profits of the Acquired Fund for
federal income tax purposes, and of any capital loss carryovers and other items
that will be carried over to the Acquiring Fund as a result of Section 381 of
the Code, and which statement will be certified by the President of the BT
Trust.
5.8. The Acquired Fund will provide the Acquiring Fund with information
reasonably necessary for the preparation of a prospectus (the "PROSPECTUS"),
which will include the Proxy Statement, referred to in paragraph 4.1(n), all to
be included in the Registration Statement, in compliance with the Securities
Act, the Securities Exchange Act of 1934 (the "EXCHANGE ACT"), and the
Investment Company Act in connection with the meeting of the Acquired Fund's
shareholders to consider approval of this Agreement and the transactions
contemplated herein.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Acquired Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquiring Fund of all of the obligations to be performed by it hereunder on or
before the Closing Date and, in addition thereto, the following further
conditions:
6.1. All representations and warranties made in this Agreement by or on
behalf of the Acquiring Fund shall be true and correct in all material respects
as of the date hereof and, except as they may be affected by the transactions
contemplated by this Agreement, as of the Closing Date with the same force and
effect as if made on and as of the Closing Date;
6.2. The Morgan Grenfell Trust on behalf of the Acquiring Fund shall
have delivered to the Acquired Fund a certificate executed in its name by its
President or Vice President and its Treasurer or Assistant Treasurer, in form
and substance reasonably satisfactory to the Acquired Fund and dated as of the
Closing Date, to the effect that the representations and warranties made in this
Agreement by or on behalf of the Acquiring Fund are true and correct at and as
of the Closing Date, except as they may be
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affected by the transactions contemplated by this Agreement; and
6.3. The Acquired Fund shall have received on the Closing Date a
favorable opinion from Hale and Dorr LLP, counsel to the Acquiring Fund, dated
as of the Closing Date, in a form reasonably satisfactory to Daniel O. Hirsch,
Secretary of the Acquired Fund, covering the following points: That
(i) the Acquiring Fund is a series of the Morgan Grenfell Trust, which
is a business trust validly existing and in good standing under the laws of the
State of Delaware and has the power, under its Declaration of Trust, to own all
of its properties and assets and to carry on its business as described in its
current prospectus and statement of additional information;
(ii) this Agreement has been duly authorized, executed and delivered by
the Morgan Grenfell Trust on behalf of the Acquiring Fund and, assuming that the
Prospectus, Registration Statement and Proxy Statement comply with the
Securities Act, the Exchange Act and the Investment Company Act and the rules
and regulations thereunder and, assuming due authorization, execution and
delivery of the Agreement by the BT Trust on behalf of the Acquired Fund, is a
valid and binding obligation of the Morgan Grenfell Trust enforceable against
the Morgan Grenfell Trust in accordance with its terms, subject as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights generally and to general equity
principles;
(iii) the Acquiring Fund Shares to be issued to the Acquired Fund and
delivered to the Acquired Fund shareholders as provided by this Agreement are
duly authorized and upon such delivery will be validly issued and outstanding
and fully paid and non-assessable, and no shareholder of the Acquiring Fund has
any preemptive rights to subscription or purchase in respect thereof;
(iv) the execution and delivery of this Agreement did not, and the
consummation of the transactions contemplated hereby will not, result in a
material violation of The Declaration of Trust or By-laws of the Morgan Grenfell
Trust; and
(v) to the knowledge of such counsel, no consent, approval,
authorization or order of any court or governmental authority of the United
States or the State of Delaware is required for the consummation by the Morgan
Grenfell Trust on behalf of the Acquiring Fund of the transactions contemplated
herein, except such as have been obtained under the Securities Act, the Exchange
Act and the Investment Company Act, and such as may be required under state
securities law.
Such counsel may rely, as to matters governed by the laws of the State
of Delaware, on an opinion of Delaware counsel. Such opinion also shall include
such other matters incident to the transaction contemplated hereby as the BT
Trust on the behalf of the Acquired Fund may reasonably request. Finally, such
opinion need not opine with respect to the applicability of Section 17(a) under
the Investment Company Act or Rule 17a-8 thereunder.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquired Fund of all the obligations to be performed by it hereunder on or
before the Closing Date and, in addition thereto, the following further
conditions:
7.1. All representations and warranties made in this Agreement by or on
behalf of the Acquired Fund contained in this Agreement shall be true and
correct in all material respects as of the date hereof and, except as they may
be affected by the transactions contemplated by this Agreement, as of the
Closing Date with the same force and effect as if made on and as of the Closing
Date;
7.2. The Acquired Fund shall have delivered to the Acquiring Fund a
statement of the Acquired Fund's assets and liabilities showing the federal tax
bases and holding periods as of the Closing Date, certified by the BT Trust's
Treasurer or Assistant Treasurer on behalf of the Acquired Fund; and
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7.3. The BT Trust, on behalf of the Acquired Fund, shall have delivered
to the Acquiring Fund on the Closing Date a certificate executed in its name by
its President or Vice President and Treasurer or Assistant Treasurer, in form
and substance satisfactory to the Acquiring Fund and dated as of the Closing
Date, to the effect that the representations and warranties made in this
Agreement by or on behalf of the Acquired Fund are true and correct at and as of
the Closing Date, except as they may be affected by the transactions
contemplated by this Agreement.
7.4. The Acquiring Fund shall have received on the Closing Date a
favorable opinion of Willkie Farr & Gallagher, counsel to the Acquired Fund, in
a form satisfactory to Joan A. Binstock, Secretary of the Acquiring Fund,
covering the following points: That
(i) the Acquired Fund is a series of the BT Trust, which is a business
trust validly existing and in good standing under the laws of The Commonwealth
of Massachusetts [and has the power, under its Declaration of Trust, to own all
of its properties and assets and to carry on its business as described in its
current prospectus and statement of additional information];
(ii) this Agreement has been duly authorized, executed and delivered by
the BT Trust on behalf of the Acquired Fund and, assuming that the Prospectus,
the Registration Statement and the Proxy Statement comply with the Securities
Act, the Exchange Act and the Investment Company Act and the rules and
regulations thereunder and, assuming due authorization, execution and delivery
of the Agreement by the Morgan Grenfell Trust on behalf of the Acquiring Fund,
is a valid and binding obligation of the BT Trust enforceable against the BT
Trust in accordance with its terms, subject as to enforcement to bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or affecting
creditors' rights generally and to general equity principles;
(iii) the execution and delivery of this Agreement did not, and the
consummation of the transactions contemplated hereby will not, result in a
material violation of the Declaration of Trust or By-laws of the BT Trust; and
(iv) to the knowledge of such counsel, no consent, approval,
authorization or order of any court or governmental authority of the United
States or The Commonwealth of Massachusetts is required for the consummation by
the BT Trust of the transactions contemplated herein, except such as have been
obtained under the Securities Act, the Exchange Act and the Investment Company
Act, and such as may be required under state securities laws.
Such counsel may rely, as to matters governed by the laws of The
Commonwealth of Massachusetts, on an opinion of Massachusetts counsel. [Such
opinion also shall include such other matters incident to the transaction
contemplated hereby as the Morgan Grenfell Trust on the behalf of the Acquiring
Fund may reasonably request.] Finally, such opinion need not opine with respect
to the applicability of Section 17(a) under the 1940 Act or Rule 17a-8
thereunder.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH OF THE PARTIES
If any of the conditions set forth below do not exist on or before the
Closing Date with respect to either party hereto, the other party to this
Agreement shall, at its option, not be required to consummate the transactions
contemplated by this Agreement:
8.1. This Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of the holders of the outstanding shares of
the Acquired Fund in accordance with the provisions of the BT Trust's
Declaration of Trust and By-laws and certified copies of the votes evidencing
such approval shall have been delivered to the Acquiring Fund. Notwithstanding
anything herein to the contrary, no party hereto may waive the conditions set
forth in this paragraph 8.1;
8.2. On the Closing Date, no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other
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relief in connection with, this Agreement or the transactions contemplated
herein;
8.3. All consents of other parties and all other consents, orders and
permits of federal, state and local regulatory authorities (including those of
the Commission and of state Blue Sky and securities authorities, including
"no-action" positions of and exemptive orders from such federal and state
authorities) deemed necessary by either party hereto to permit consummation, in
all material respects, of the transactions contemplated hereby shall have been
obtained, except where failure to obtain any such consent, order or permit would
not involve a risk of a material adverse effect on the assets or properties of
any party hereto, provided that any party may for itself waive any of such
conditions;
8.4. The Registration Statement shall have become effective under the
Securities Act and no stop orders suspending the effectiveness thereof shall
have been issued and, to the best knowledge of the parties hereto, no
investigation or proceeding for that purpose shall have been instituted or be
pending, threatened or contemplated under the Securities Act;
8.5. The Acquired Fund shall have distributed to its shareholders all
of its investment company taxable income, as defined in Section 852(b)(2) of the
Code (prior to reduction by any dividends paid deduction), and all of its net
capital gain, as such term is used in Section 852(b)(3)(C) of the Code, after
reduction by any capital loss carryforward, and all of the excess of (1) its
interest income excludable from gross income under Section 103(a) of the Code
over (2) the deductions disallowed under Sections 265 and 171(a)(2) of the Code,
in each case for its taxable year ending on the Closing Date.
8.6. The parties shall have received a favorable opinion of Hale and
Dorr LLP, addressed to the Morgan Grenfell Trust in respect of the Acquiring
Fund and of Willkie Farr & Gallagher, addressed to the BT Trust in respect of
the Acquired Fund and satisfactory to Joan A. Binstock and Daniel O. Hirsch, as
Secretary of each of the parties, respectively, substantially to the effect that
for federal income tax purposes:
(a) The acquisition by the Acquiring Fund of all of the assets of the
Acquired Fund solely in exchange for the issuance of Acquiring Fund Shares to
the Acquired Fund and the assumption of certain scheduled Acquired Fund
liabilities by the Acquiring Fund, followed by the distribution by the Acquired
Fund, in liquidation of the Acquired Fund, of Acquiring Fund Shares to the
shareholders of the Acquired Fund in exchange for their Acquired Fund shares of
beneficial interest and the termination of the Acquired Fund, will constitute a
reorganization within the meaning of Section 368(a)(1) of the Code, and the
Acquired Fund and the Acquiring Fund will each be "a party to a reorganization"
within the meaning of Section 368(b) of the Code;
(b) No gain or loss will be recognized by the Acquired Fund upon (i)
the transfer of all of its assets to the Acquiring Fund solely in exchange for
the issuance of Acquiring Fund Shares to the Acquired Fund and the assumption of
certain scheduled Acquired Fund liabilities by the Acquiring Fund and (ii) the
distribution by the Acquired Fund of such Acquiring Fund Shares to the
shareholders of the Acquired Fund;
(c) No gain or loss will be recognized by the Acquiring Fund upon the
receipt of the assets of the Acquired Fund solely in exchange for the issuance
of Acquiring Fund Shares to the Acquired Fund and the assumption of certain
scheduled Acquired Fund liabilities by the Acquiring Fund;
(d) The basis of the assets of the Acquired Fund acquired by the
Acquiring Fund will be, in each instance, the same as the basis of those assets
in the hands of the Acquired Fund immediately prior to the transfer;
(e) The tax holding period of the assets of the Acquired Fund in the
hands of the Acquiring Fund will, in each instance, include Acquired Fund's tax
holding period for those assets;
(f) The shareholders of the Acquired Fund will not recognize gain or
loss upon the exchange of all of their shares of beneficial interest of the
Acquired Fund solely for Acquiring Fund Shares as part
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of the transaction;
(g) The basis of the Acquiring Fund Shares received by the Acquired
Fund shareholders in the transaction will be the same as the basis of the shares
of beneficial interest of the Acquired Fund surrendered in exchange therefor;
and
(h) The tax holding period of the Acquiring Fund Shares received by the
Acquired Fund shareholders will include, for each shareholder, the tax holding
period for the shares of beneficial interest of the Acquired Fund surrendered in
exchange therefor, provided that the Acquired Fund shares were held as capital
assets on the date of the exchange.
Notwithstanding anything herein to the contrary, no party hereto may
waive in any material respect the conditions set forth in this paragraph 8.6.
8.7 Each of the Acquiring Fund and the Acquired Fund agrees to make and
provide representations with respect to itself that are reasonably necessary to
enable Hale and Dorr LLP to deliver an opinion substantially as set forth in
this paragraph 8.7.
9. BROKERAGE FEES AND EXPENSES
9.1. Each party hereto represents and warrants to each other party
hereto, that there are no brokers or finders entitled to receive any payments in
connection with the transactions provided for herein.
9.2. The parties have been informed by Bankers Trust Company that
Bankers Trust Company will pay for all expenses incurred in connection with the
Reorganization except that the Acquired Fund shall be liable for its fees and
expenses incurred in connection with its liquidation and termination.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1. The parties hereto agree that no party has made any
representation, warranty or covenant not set forth herein or referred to in
paragraph 8.7 hereof and that this Agreement constitutes the entire agreement
between the parties.
10.2. The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection herewith
shall survive the consummation of the transactions contemplated hereunder.
11. TERMINATION
11.1. This Agreement may be terminated at any time prior to the Closing
Date by: (i) the mutual agreement of the BT Trust on behalf of the Acquired Fund
and the Morgan Grenfell Trust on behalf of the Acquiring Fund; (ii) any party in
the event that the other party hereto shall materially breach any
representation, warranty or agreement contained herein to be performed at or
prior to the Closing Date; or (iii) a condition herein expressed to be precedent
to the obligations of the terminating party has not been met and it reasonably
appears that it will not or cannot be met.
11.2. In the event of any such termination, there shall be no liability
for damages on the part of any party hereto or their respective Trustees or
officers to any other party, but each shall bear the expenses incurred by it
incidental to the preparation and carrying out of this Agreement.
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<PAGE>
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner
as may be mutually agreed upon in writing by the authorized officers of the BT
Trust on behalf of the Acquired Fund and the Morgan Grenfell Trust on behalf of
the Acquiring Fund; provided, however, that following the meeting of the
Acquired Fund shareholders called by the BT Trust pursuant to paragraph 5.3 of
this Agreement, no such amendment may have the effect of changing the provisions
for determining the number of the Acquiring Fund Shares to be issued to the
Acquired Fund shareholders under this Agreement to the detriment of such
shareholders without their further approval.
13. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by prepaid
telegraph, telecopy or certified mail addressed to the BT Trust on behalf of the
Acquired Fund and the Morgan Grenfell Trust on behalf of the Acquiring Fund at
885 Third Avenue, New York, New York 10022.
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF
LIABILITY
14.1. The article and paragraph headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original.
14.3. This Agreement shall be governed by and construed in accordance
with the laws of The Commonwealth of Massachusetts.
14.4. This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other parties hereto. Nothing herein
expressed or implied is intended or shall be construed to confer upon or give
any person, firm, corporation or other entity, other than the parties hereto and
their respective successors and assigns, any rights or remedies under or by
reason of this Agreement.
14.5. It is expressly agreed that the obligations of the Morgan
Grenfell Trust and the BT Trust shall not be binding upon any of their
respective Trustees, shareholders, nominees, officers, agents or employees
personally, but bind only the trust property of the Morgan Grenfell Trust or the
BT Trust, as the case may be, as provided in the trust instruments of the Morgan
Grenfell Trust and the BT Trust, respectively. The execution and delivery of
this Agreement have been authorized by the Trustees of each of the Morgan
Grenfell Trust and the BT Trust, and this Agreement has been executed by
authorized officers of the Morgan Grenfell Trust and the BT Trust on behalf of
the Acquired Fund and the Acquiring Fund, respectively, acting as such, and
neither such authorization by such Trustees nor such execution and delivery by
such officers shall be deemed to have been made by any of them individually or
to impose any liability on any of them personally, but shall bind only the trust
property of the Morgan Grenfell Trust and the BT Trust, as the case may be, as
provided in the Declaration of Trust of the Morgan Grenfell Trust and the BT
Trust, respectively.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its President or Vice President and attested by its
Secretary or Assistant Secretary.
Attest: BT INVESTMENT FUNDS ON BEHALF OF
GLOBAL EMERGING MARKETS EQUITY FUND
By: __________________________ By: __________________________
Name: Daniel O. Hirsch Name: __________________________
Title: Secretary Title: __________________________
Attest: MORGAN GRENFELL INVESTMENT TRUST
ON BEHALF OF
MORGAN GRENFELL EMERGING MARKETS
EQUITY FUND
By: __________________________ By: __________________________
Name: Joan A. Binstock Name: __________________________
Title: Secretary Title: __________________________
Page 14
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*
FORM OF PROXY CARD
BT INVESTMENT FUNDS
GLOBAL EMERGING MARKETS EQUITY FUND
One South Street, Baltimore, Maryland
PROXY FOR THE SPECIAL MEETING OF STOCKHOLDERS
10:00 a.m., Eastern time, on Tuesday, September 21, 1999
The undersigned hereby appoints Daniel O. Hirsch, Amy M. Olmert and
each of them, with full power of substitution as proxies of the undersigned to
vote all shares of stock that the undersigned is entitled in any capacity to
vote at the above-stated special meeting, and at any and all adjournments or
postponements thereof (the "Special Meeting"), on the matters set forth on this
Proxy Card, and, in their discretion, upon all matters incident to the conduct
of the Special Meeting and upon such other matters as may properly be brought
before the Special Meeting. This proxy revokes all prior proxies given by the
undersigned.
All properly executed proxies will be voted as directed. If no
instructions are indicated on a properly executed proxy, the proxy will be voted
FOR approval of Proposal I. All ABSTAIN votes will be counted only in
determining the existence of a quorum at the Special Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES WITH RESPECT
TO THE BT GLOBAL EMERGING MARKETS EQUITY FUND. THE BOARD OF TRUSTEES
RECOMMENDS A VOTE FOR PROPOSAL I.
The appointed proxies will vote on any other business as may properly come
before the Special Meeting or any adjournment thereof.
Receipt of the notice and the Proxy Statement, (the "Proxy Statement"), is
hereby acknowledged.
To vote by Telephone
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Call 1-800-690-6903
3) Enter the 12-digit control number set forth on the Proxy card and follow
the simple instructions.
To vote by Internet
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Go to the Website www.proxyvote.com
3) Enter the 12-digit control number set forth on the Proxy card and follow
the simple instructions.
DO NOT RETURN YOUR PROXY IF YOU VOTE BY TELEPHONE OR INTERNET.
UNLESS VOTING BY TELEPHONE OR INTERNET, PLEASE SIGN AND DATE BELOW AND MAIL THIS
PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
<PAGE>
TO VOTE, MARK BOXES IN BLUE OR BLACK INK.
Vote On Proposal
I. Approval of agreement and plan of reorganization between BT Global
Emerging Markets Equity Fund and Morgan Grenfell Emerging Markets
Equity Fund ("MG Fund"), pursuant to which: (a) BT Fund would transfer
all of its assets to MG Fund in exchange for MG Fund's assumption of BT
Fund's liabilities and the issuance of Institutional shares of MG Fund
to be distributed pro rata to BT Fund shareholders, and (b) BT Fund
would be terminated.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Joint owners should EACH sign. Please sign EXACTLY as your name(s) appears on
this card. When signing as attorney, trustee, executor, administrator, guardian
or corporate officer, please give your FULL title below.
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT, PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
-------------------------------------------------
(Title or Authority)
-------------------------------------------------
(Signature)
-------------------------------------------------
(Signature)
Dated: [_________________________________], 1999
