<PAGE>
Supplement dated January 21, 2000
to the Prospectus dated March 1, 1999, as supplemented
through March 31, 1999
of Flag Investors International Fund, Inc.
(Replacing Supplement Dated October 11, 1999)
The Prospectus dated March 1, 1999, as supplemented through March 31,
1999, of Flag Investors International Fund, Inc. (the "Fund") is hereby amended
and supplemented by the following:
At a meeting held on January 17, 2000, the Board of Directors of the
Fund authorized a special meeting of the Fund's shareholders to be held no later
than March 1, 2000, in order to (1) seek shareholder approval of a
reorganization (the "Reorganization") of the Fund's structure into a
master-feeder structure under which the Fund would invest all of its assets in
the International Equity Portfolio (the "master fund") and (2) to elect
Directors of the Fund. Fund shareholders of record as of January 24, 2000 will
be entitled to vote at the special meeting.
The Board also authorized a capital gains distribution to be paid on or
before March 1, 2000, contingent upon shareholder approval of the
Reorganization. The per share amount of this capital gains distribution will be
based upon the capital gains realized by the Fund when selling portfolio
securities in connection with the Reorganization. As of January 20, 2000, the
net gain on the Fund's portfolio holdings is estimated to be $3.83 per share.
International stock markets are volatile. The actual amount of this capital
gains distribution may be higher or lower based on the value of the Fund's
holdings and the specific portfolio securities sold when the Reorganization
takes place. The per share amount of the distribution may also vary based on the
number of Fund shares outstanding at the time of the distribution. You should
contact your tax advisor if you have specific questions about the federal, state
or local income tax implications of purchasing Fund shares.
If approved, the Reorganization is expected to occur on or before March
1, 2000. When the Reorganization occurs, the investment advisory services will
be provided to the Fund at the master fund level. The effect of the
Reorganization is that shareholders of the Fund will have their investments
managed by Bankers Trust, the investment advisor of the master fund, rather than
Investment Company Capital Corp. ("ICC") and The Glenmede Trust Company
("Glenmede").
<PAGE>
Additionally, the following amends and supplements the Fund's
prospectus to show certain changes to the Shareholder Transaction Expenses of
the Fund and Example on page 2.
You may pay the following fees and expenses if you buy and hold Shares of the
Fund.
Shareholder Transaction Expenses
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price).....................................5.50%
Example:
This Example assumes that you invest $10,000 in Class A Shares for the time
periods indicated and then redeem all of your shares at the end of those
periods. The Example also assumes that your investment has a 5% return each year
and that the Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A Shares..................... $694* $1,257* $1,860* $3,563*
</TABLE>
*Based on Total Annual Fund Operating Expenses after fee waivers and
reimbursements for year 1 only.
Under "Purchase Price," the table on page 6 is replaced with the following:
Class A Sales Charge
as a % of
-------------------------------
Offering Net Amount
Amount of Purchase Price Invested
------------------ ------------- -----------------
Less than $50,000 5.50% 5.82%
$50,000-$99,999 4.50% 4.71%
$100,000-$249,999 3.50% 3.63%
$250,000-$499,999 2.50% 2.56%
$500,000-$1,000,000 2.00% 2.04%
$1,000,000 and over None None
<PAGE>
Finally, the fourth paragraph of the section "Investment Advisor and
Sub-Advisor" in the prospectus is amended and supplemented as follows:
The Advisor is an indirect, wholly owned subsidiary of
Deutsche Bank, AG. Deutsche Bank is a major global banking institution engaged
in a wide range of financial services, including investment management, mutual
funds, retail and commercial banking, investment banking and insurance.
The Advisor was formerly an indirect subsidiary of Bankers Trust
Corporation. It became an indirect subsidiary of Deutsche Bank as a result of
Bankers Trust Corporation's merger with Deutsche Bank on June 4, 1999. Because
this merger resulted in a change of control of the Advisor, the shareholders
were asked to approve a new investment advisory agreement between the Fund and
Investment Company Capital Corp. ("ICC"), and a new sub-advisory agreement among
the Fund, ICC and Glenmede Trust Company. Under these agreements, the services
provided to the Fund by the Advisor are the same as the services provided under
the agreements in effect when the Advisor was a subsidiary of Bankers Trust. The
agreements were approved at a Special Meeting of shareholders held on October 7,
1999.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
