<PAGE>
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
(RULE 14a-101)
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[ ] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
M.S.D. & T. FUNDS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(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.
<PAGE>
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
M.S.D. & T. FUNDS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
----------------
June 22, 1998
To the Shareholders of
M.S.D. & T. Funds, Inc.
An Annual Meeting of Shareholders of M.S.D. & T. Funds, Inc. (the "Company")
will be held on July 24, 1998, at 1:30 P.M. Eastern Time, at the offices of
Mercantile-Safe Deposit & Trust Company, Second Floor Board Room, Two Hopkins
Plaza, Baltimore, Maryland 21201, for the following purposes:
(1) The election of a Board of five (5) Directors;
(2) The ratification or rejection of the selection of Coopers & Lybrand
L.L.P. as the Company's independent accountants for the fiscal year ending
May 31, 1999;
(3) The approval or disapproval of a new investment advisory agreement
between the Company and Mercantile-Safe Deposit & Trust Company
("Mercantile") with respect to the Prime Money Market Fund, Government
Money Market Fund, Tax-Exempt Money Market Fund, Growth & Income Fund,
International Equity Fund, Limited Maturity Bond Fund, Maryland Tax-Exempt
Bond Fund, Diversified Real Estate Fund, Equity Income Fund, Equity Growth
Fund, Total Return Bond Fund, National Tax-Exempt Bond Fund and
Intermediate Tax-Exempt Bond Fund; and
(4) The transaction of such other business as may properly come before
the meeting or any adjournment thereof.
The proposals referred to above are discussed in the Proxy Statement
attached to this Notice. Each shareholder is invited to attend the Annual
Meeting of Shareholders in person. Shareholders of record at the close of
business on June 18, 1998 have the right to vote at the meeting. If you cannot
be present at the meeting, we urge you to fill in, sign and promptly return
the enclosed proxy in order that the meeting can be held and a maximum number
of shares may be voted.
THE COMPANY HAS BEEN ADVISED BY MERCANTILE THAT CERTAIN CUSTOMERS OF
MERCANTILE, WHO ARE BENEFICIAL OWNERS OF SHARES OF COMMON STOCK OF THE
COMPANY'S INVESTMENT PORTFOLIOS, HAVE ELECTED NOT TO RECEIVE PROXY MATERIALS
WITH RESPECT TO INVESTMENTS HELD OF RECORD, FOR THEIR BENEFIT, BY MERCANTILE.
MERCANTILE HAS ASKED THE COMPANY TO ADVISE SHAREHOLDERS IN THAT CATEGORY THAT
THE ENCLOSED PROXY MATERIALS ARE BEING PROVIDED TO THEM IN THIS CASE IN ORDER
TO COMPLY WITH LEGAL REQUIREMENTS APPLICABLE TO THE COMPANY AND MERCANTILE.
SUCH CUSTOMERS WHO RECEIVE THESE MATERIALS ARE REQUESTED TO COMPLETE THE
ENCLOSED PROXY AND RETURN IT IN THE POSTAGE-PAID ENVELOPE PROVIDED.
By Order of the Board of Directors
W. BRUCE McCONNEL, III
Secretary
WE NEED YOUR PROXY VOTE IMMEDIATELY
A SHAREHOLDER MAY THINK HIS OR HER VOTE IS NOT IMPORTANT, BUT IT IS VITAL.
BY LAW, THE ANNUAL MEETING OF SHAREHOLDERS OF THE COMPANY SCHEDULED FOR JULY
24, 1998 WILL HAVE TO BE ADJOURNED WITHOUT CONDUCTING ANY BUSINESS IF LESS
THAN A MAJORITY OF THE SHARES ELIGIBLE TO VOTE ARE REPRESENTED. IN THAT EVENT,
THE COMPANY WOULD CONTINUE TO SOLICIT VOTES IN AN ATTEMPT TO ACHIEVE A QUORUM.
CLEARLY, YOUR VOTE COULD BE CRITICAL IN ALLOWING THE COMPANY TO HOLD THE
MEETING AS SCHEDULED, SO PLEASE RETURN YOUR PROXY CARD IMMEDIATELY.
<PAGE>
M.S.D. & T. FUNDS, INC.
TWO HOPKINS PLAZA
BALTIMORE, MARYLAND 21201
1-800-551-2145
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of M.S.D. & T. Funds, Inc. (the "Company")
for use at an Annual Meeting of Shareholders of the Company to be held at the
offices of Mercantile-Safe Deposit & Trust Company, Second Floor Board Room,
Two Hopkins Plaza, Baltimore, Maryland 21201 on July 24, 1998, at 1:30 P.M.
Eastern Time. As used in this Proxy Statement, the meeting and any adjournment
thereof is referred to as the "Meeting"; the Company's investment portfolios
are referred to as "Funds"; and the Funds' shares are referred to as "Shares."
It is expected that the solicitation of proxies will be primarily by mail.
The Company's officers and service contractors may also solicit proxies by
telephone, telegraph, facsimile or personal interview. The Company will bear
all proxy solicitation costs. Any shareholder giving a proxy may revoke it at
any time before it is exercised by submitting to the Company a written notice
of revocation or a subsequently executed proxy or by attending the Meeting and
electing to vote in person. This Proxy Statement and the enclosed proxy are
expected to be distributed to shareholders on or about June 25, 1998.
The following table summarizes the proposals to be voted on at the Meeting
and indicates those shareholders who are being solicited with respect to each
proposal:
<TABLE>
<CAPTION>
PROPOSAL SHAREHOLDERS SOLICITED
-------- ----------------------
<S> <C>
1. Election of a Board of five (5) All Funds voting together in the
Directors. aggregate.
2. Ratification or rejection of the All Funds voting together in the
selection of Coopers & Lybrand aggregate.
L.L.P. as the Company's
independent accountants for the
fiscal year ending May 31, 1999.
3. Approval or disapproval of a new Shareholders of each Fund (other than
Advisory Agreement with the Tax-Exempt Money Market Fund
Mercantile- Safe Deposit & Trust (Trust)) voting separately on a Fund-
Company. by-Fund basis.
</TABLE>
A proxy is enclosed with respect to the Shares you own in the Company. If
the proxy is executed properly and returned, the Shares represented by it will
be voted at the Meeting in accordance with the instructions thereon. Each full
Share is entitled to one vote and each fractional Share to a proportionate
fractional vote. If you do not expect to be present at the Meeting and wish
your Shares to be voted, please complete the enclosed proxy and mail it in the
enclosed reply envelope.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF EACH PROPOSAL
DESCRIBED IN THIS PROXY STATEMENT.
PROPOSAL 1
(ALL FUNDS)
At the Meeting, shareholders will be asked to consider the election of five
Directors, who will constitute the entire Board of Directors of the Company.
Each elected Director will hold office for an indefinite term until the
earlier of (1) the date the election of a Director's successor in office
becomes effective, or (2) the date a Director resigns or his term as a
Director is terminated in accordance with the Company's By-Laws. Normally,
there will be no meetings of shareholders for the purpose of electing
Directors except as required by the Investment
<PAGE>
Company Act of 1940, as amended (the "1940 Act"). See "Other Matters" below.
The Directors may, as permitted by the 1940 Act, appoint additional Directors
without shareholder approval.
All Shares represented by valid proxies will be voted in the election of
Directors for each nominee named below, unless authority to vote for a
particular nominee is withheld. The five nominees who receive the highest
number of votes cast at the Meeting will be elected as Directors. Cumulative
voting is not permitted. Each nominee has consented to being named in this
Proxy Statement and to serve if elected. If a nominee withdraws from the
election or is otherwise unable to serve, the named proxies will vote for the
election of such substitute nominee as the Board of Directors may recommend,
unless the Board decides to reduce the number of Directors serving on the
Board.
Messrs. Disharoon, Decatur H. Miller, Murphy and Packard are incumbent
Directors who are standing for re-election. Messrs. Disharoon, Decatur H.
Miller and Packard were last elected by shareholders at a meeting held on July
16, 1990. Mr. Murphy was appointed to the Board of Directors on April 29, 1994.
In addition, the incumbent Directors of the Company have nominated Dr. Edward
D. Miller as an additional Director to be voted on by the Company's
shareholders.
The following table contains relevant information about the nominees:
<TABLE>
<CAPTION>
COMPANY SHARES
OWNED
PRINCIPAL OCCUPATIONS BENEFICIALLY
POSITION WITH DURING PAST 5 YEARS AS OF
NAME AND ADDRESS THE COMPANY AND OTHER AFFILIATIONS APRIL 1, 1998
---------------- ------------- ---------------------- --------------
<S> <C> <C> <C>
LESLIE B. DISHAROON* Chairman of the Retired; Director, Baltimore **
11321 John Carroll Road Board, Gas & Electric Company;
Owings Mills, MD 21117 President; Director, Travelers Inc.
Age: 65 Director since (diversified financial
1989 services); Director, GRC
International, Inc. (technology
based services and products);
Director, Aegon USA, Inc.
(holding company-insurance).
DECATUR H. MILLER* Director since Retired; Partner and former **
26 Whitfield Road 1989; Treasurer Chairman of the law firm of
Baltimore, MD 21201 Piper & Marbury L.L.P.,
Age: 65 Baltimore, Maryland until 1995.
EDWARD D. MILLER Nominee Dean/Chief Executive Officer, None
Johns Hopkins Medicine Johns Hopkins Medicine, January
720 Rutland Street 1997 to date; Interim Dean,
Baltimore, MD 21205-2196 Johns Hopkins Medicine, March
Age: 55 1996 to January 1997; Chairman,
Department of Anesthesiology
and Critical Care Medicine,
Johns Hopkins University, July
1994 to date; Chairman,
Department of Anesthesiology,
Columbia Presbyterian Hospital,
March 1993 to June 1994.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
COMPANY SHARES
OWNED
PRINCIPAL OCCUPATIONS BENEFICIALLY
POSITION WITH DURING PAST 5 YEARS AS OF
NAME AND ADDRESS THE COMPANY AND OTHER AFFILIATIONS APRIL 1, 1998
---------------- ------------- ---------------------- --------------
<S> <C> <C> <C>
JOHN R. MURPHY Director since Vice Chairman, National None
3115 Blendon Road 1994 Geographic Society, March 1998
Owings Mills, MD 21117 to date; President and Chief
Age: 64 Executive Officer, National
Geographic Society, May 1996 to
March 1998; Director, Provant,
Inc.; Director Omnicom Group,
Inc. (holding
company-advertising); Director,
Monarch Avalon Inc. (games,
graphic arts, envelope
manufacturing) until 1994.
GEORGE R. PACKARD, III Director since President, U.S.-Japan None
4425 Garfield Street, 1989 Foundation, beginning July,
N.W. 1998; Visiting President,
Washington, DC 20007 International University of
Age: 66 Japan, 1994 to date; Former
Dean, School of Advanced
International Studies at The
Johns Hopkins University;
Director, Offitbank (private
bank).
</TABLE>
- --------
* Mr. Disharoon is an "interested person" of the Company as defined in the
1940 Act because he and his wife own stock in Mercantile Bankshares
Corporation, the parent corporation of the Company's investment adviser, and
because he serves as an officer of the Company. Mr. Decatur H. Miller is an
"interested person" of the Company because he is a co-trustee of a trust for
which Mercantile is also a co-trustee and because he serves as an officer of
the Company.
** As of April 1, 1998, Mr. Disharoon beneficially owned 1,432.235 Shares of
the Company's International Equity Fund. As of April 1, 1998, Mr. Decatur H.
Miller beneficially owned 656.520 Shares of the Company's Prime Money Market
Fund, 2,252.176 Shares of the Company's Growth & Income Fund and 2,470.464
Shares of the Company's International Equity Fund.
Effective June 1, 1998, each Director of the Company receives an annual fee
of $9,500 plus $2,000 for each Board meeting attended and reimbursement of
expenses incurred as a Director. Additionally, the Chairman and President of
the Company receives an additional annual fee of $7,500 for his services in
such capacities. Prior to June 1, 1998, each Director received an annual fee of
$3,500 plus $1,625 for each Board meeting attended and reimbursement of
expenses incurred as a Director. Remuneration for services rendered during the
Company's fiscal year ended May 31, 1998 and distributed to all Directors and
officers as a group was $45,125. As of April 1, 1998, the Directors and
officers of the Company, as a group, owned less than 1% of the outstanding
shares of each Fund.
3
<PAGE>
The following chart provides certain information about the fees received by
the Company's Directors for their services as members of the Board of Directors
for the fiscal year ended May 31, 1998:
<TABLE>
<CAPTION>
TOTAL
PENSION OR COMPENSATION
RETIREMENT FROM THE
AGGREGATE BENEFITS ESTIMATED COMPANY AND
COMPENSATION ACCRUED AS PART ANNUAL FUND COMPLEX*
FROM THE OF COMPANY BENEFITS UPON PAID TO
NAME OF PERSON/POSITION COMPANY EXPENSES RETIREMENT DIRECTORS
----------------------- ------------ --------------- ------------- -------------
<S> <C> <C> <C> <C>
Leslie B. Disharoon..... $10,000 N/A N/A $10,000
Chairman of the Board
of Directors and
President
Decatur H. Miller....... $ 8,375 N/A N/A $ 8,375
Director and Treasurer
John R. Murphy.......... $10,000 N/A N/A $10,000
Director
George R. Packard, III.. $ 8,375 N/A N/A $ 8,375
Director
J. Stevenson Peck**..... $ 8,375 N/A N/A $ 8,375
Director
</TABLE>
- --------
* The "Fund Complex" consists solely of the Company.
** Mr. Peck resigned as a Director of the Company on March 2, 1998.
The Board of Directors of the Company held four meetings during the last
fiscal year, which ended May 31, 1998. During that year, Messrs. Disharoon and
Murphy attended all meetings, Mr. Peck attended all meetings prior to his
resignation as a Director, and Messrs. Decatur H. Miller and Packard attended
all but one meeting. The Board does not have standing audit, compensation or
nominating committees. The Board of Directors is prepared to review nominations
from shareholders to fill any future vacancies on the Board in written
communications delivered to the Company at its address on page 1.
Mr. Disharoon has served as Chairman of the Board since May 17, 1989.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" EACH NOMINEE
FOR DIRECTOR OF THE COMPANY.
PROPOSAL 2
(ALL FUNDS)
Shareholders are also being asked to vote upon the ratification or rejection
of the selection of Coopers & Lybrand L.L.P. ("Coopers & Lybrand") as
independent accountants for the Company's fiscal year ending May 31, 1999.
Approval of the proposal requires the affirmative vote of a majority of the
shares cast at the Meeting, either in person or by proxy, assuming that a
quorum is reached. Unless instructed otherwise, the persons named as proxies in
the accompanying Proxy will vote for Coopers & Lybrand.
The Board of Directors of the Company, including all of the Directors who are
not "interested persons" of the Company, selected Coopers & Lybrand as the
Company's independent accountants for the fiscal year ending May 31, 1999 at a
meeting held on April 24, 1998. Coopers & Lybrand has stated that it has no
material direct or indirect financial interest in the Company. Coopers &
Lybrand, with offices at 2400 Eleven Penn Center, Philadelphia, Pennsylvania
19103, has served as the Company's independent accountants since its
commencement of operations in 1989.
4
<PAGE>
As part of its audit of the Company's financial statements for the fiscal
year ended May 31, 1997, Coopers & Lybrand reviewed the Company's annual report
to shareholders and its related filings with the Securities and Exchange
Commission (the "SEC"). In addition, Coopers & Lybrand performed additional
non-audit services for the Company which included a review of the Company's tax
returns. Coopers & Lybrand will provide these same services as part of the
audit of the Company's financial statements for the fiscal year ended May 31,
1998, which is currently in progress.
A representative of Coopers & Lybrand is expected to be available by
telephone at the Meeting should any matter arise requiring consultation with
the accountants, and Coopers & Lybrand will be given the opportunity to make a
statement if it chooses.
On September 18, 1997, Coopers & Lybrand and Price Waterhouse LLP ("Price
Waterhouse") announced plans to merge their practices worldwide. The partners
of both firms have approved the merger. Coopers & Lybrand and Price Waterhouse
expect the merger, which is subject to approval by the regulators, to become
effective July 1, 1998. At such time, Coopers & Lybrand will be known as
PricewaterhouseCoopers.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE
RATIFICATION OF THE SELECTION OF COOPERS & LYBRAND AS INDEPENDENT ACCOUNTANTS
OF THE COMPANY.
PROPOSAL 3
(EACH FUND OTHER THAN THE TAX-EXEMPT MONEY MARKET FUND (TRUST))
At the Meeting, shareholders of each Fund (other than the Tax-Exempt Money
Market Fund (Trust)) will be asked to approve a new investment advisory
agreement (the "New Agreement") with Mercantile-Safe Deposit & Trust Company
("Mercantile"). Mercantile currently serves as investment adviser to the
Company pursuant to seven separate investment advisory agreements. Six of those
investment advisory agreements (the "Current Agreements") pertaining to the
Prime Money Market, Government Money Market and Tax-Exempt Money Market Funds,
the Growth & Income and Limited Maturity Bond Funds, the Maryland Tax-Exempt
Bond Fund, the International Equity Fund, the Diversified Real Estate Fund, and
the Equity Income, Equity Growth, Total Return Bond, National Tax-Exempt Bond
and Intermediate Tax-Exempt Bond Funds, respectively, will be consolidated into
the New Agreement. The terms and conditions of the New Agreement are the same
as those of the Current Agreements except for provisions relating to (1) the
effective date (which will be July 24, 1998 or such later date as the New
Agreement is approved by shareholders of the Funds), (2) the ability of
Mercantile to utilize a sub-adviser if desirable (currently, Mercantile is
authorized to do so only with respect to the International Equity Fund,
Diversified Real Estate Fund, Equity Income Fund, Equity Growth Fund, Total
Return Bond Fund, National Tax-Exempt Bond Fund and Intermediate Tax-Exempt
Bond Fund, (3) the implementation of advisory fee breakpoints as described
below, (4) the standard of care to which Mercantile is subject in providing
advisory services under the New Agreement (a negligence standard care has been
substituted for the gross negligence standard of care in the Current
Agreements), and (5) the termination date (July 31, 1999). Significant
provisions of the New Agreement are summarized below, however, this summary is
qualified in its entirety by reference to the New Agreement, a copy of which is
attached to this Proxy Statement as Exhibit A.
No changes are proposed to the current Advisory Agreement between the Company
and Mercantile with respect to the Tax-Exempt Money Market Fund (Trust).
TERMS AND CONDITIONS OF THE NEW AGREEMENT. In the New Agreement, Mercantile
agrees, subject to the general supervision and approval of the Company's Board
of Directors, to be responsible for the management of, and to provide a
continuous investment program for, each Fund's portfolio in accordance with
such Fund's investment objective, policies and limitations, and to make
decisions with respect to and place orders for all purchases and sales of
portfolio securities for the respective Funds. Mercantile's responsibilities as
investment adviser include providing investment research and management with
respect to all securities, investments, cash
5
<PAGE>
and cash equivalents in the Funds and maintaining books and records with
respect to each Fund's securities transactions.
The New Agreement authorizes Mercantile to employ or contract with other
persons to assist it in the performance of its responsibilities under the
Agreement, including one or more sub-advisers who may perform any or all of the
advisory services described above under Mercantile's supervision. Any sub-
adviser must be approved as required by the 1940 Act. Any fees or compensation
payable to such other persons or sub-advisers will be paid by Mercantile.
For the services provided and expenses assumed pursuant to the New Agreement,
Mercantile is entitled to advisory fees, computed daily and payable monthly, at
the following annual rates: (a) 0.25% of the first $1 billion of the average
daily net assets of each of the Prime Money Market Fund, Government Money
Market Fund and Tax-Exempt Money Market Fund, plus 0.20% of each such Fund's
average daily net assets in excess of $1 billion; (b) 0.60% of the first $1
billion of the average daily net assets of each of the Growth & Income Fund,
Equity Income Fund and Equity Growth Fund, plus 0.40% of each such Fund's
average daily net assets in excess of $1 billion; (c) 0.35% of the first $1
billion of the average daily net assets of each of the Limited Maturity Bond
Fund and Total Return Bond Fund, plus 0.20% of each such Fund's average daily
net assets in excess of $1 billion; (d) 0.50% of the first $1 billion of the
average daily net assets of each of the Maryland Tax-Exempt Bond Fund, National
Tax-Exempt Bond Fund and Intermediate Tax-Exempt Bond Fund, plus 0.25% of each
such Fund's average daily net assets in excess of $1 billion; (e) 0.80% of the
first $1 billion of the average daily net assets of the International Equity
Fund, plus 0.70% of such Fund's average daily net assets in excess of $1
billion; and (f) 0.80% of the first $1 billion of the average daily net assets
of the Diversified Real Estate Fund, plus 0.60% of such Fund's average daily
net assets in excess of $1 billion. The advisory fees payable by each Fund
under the New Agreement are the separate obligation of that Fund (and not the
joint obligation of all Funds). Mercantile may from time to time voluntarily
waive all or a portion of its advisory fees in order to assist a Fund in
maintaining a competitive expense ratio.
The New Agreement provides that Mercantile will pay all expenses incurred by
it in connection with its activities under the New Agreement other than the
expenses to be borne by the Funds. Expenses to be borne by the Funds include,
without limitation, brokerage fees, commissions and other transaction costs,
outside auditing and legal expenses, SEC fees, costs of shareholders' reports
and meetings, costs of proxy statements and prospectuses, and extraordinary
expenses.
The New Agreement also provides that Mercantile may place orders for
portfolio securities either directly with the issuer or with any broker or
dealer selected by Mercantile. In executing portfolio transactions and
selecting brokers or dealers, the New Agreement requires Mercantile to use its
reasonable best efforts to seek the most favorable execution of orders, after
taking into account all factors Mercantile deems relevant, including the
breadth of the market in the security, the price of the security, the financial
condition and execution capability of the broker or dealer, and the
reasonableness of the commission, if any, both for the specific transaction and
on a continuing basis.
Consistent with this obligation, Mercantile may, to the extent permitted by
law, purchase and sell portfolio securities from and to brokers and dealers who
provide brokerage and research services (within the meaning of Section 28(e) of
the Securities Exchange Act of 1934, as amended) to or for the benefit of the
Funds and/or other accounts over which Mercantile or any of its affiliates
exercises investment discretion. Mercantile is authorized to pay to a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for any Fund which is in excess of the amount
of commission another broker or dealer would have charged for effecting that
transaction if Mercantile determines in good faith that such commission was
reasonable in relation to the value of brokerage and research services provided
by such broker or dealer, viewed in terms of either that particular transaction
or Mercantile's overall responsibilities to the particular Fund and to the
Company. Such brokerage and research services might consist of reports and
statistics relating to specific companies or industries, general summaries of
groups of stocks or bonds and their comparative earnings and yields, or broad
overviews of the stock, bond and government securities markets and
6
<PAGE>
the economy. Such brokerage or research services may be useful to Mercantile in
serving other clients as well as the Company, and conversely brokerage or
research services obtained by the placement of business of other clients may be
useful to Mercantile in carrying out its obligations to the Company. In no
instance will portfolio securities be purchased from or sold to Mercantile or
the Funds' principal underwriter, BISYS Fund Services, or any affiliated person
of either of them, except as permitted by the SEC. Mercantile may not make
loans for the purpose of purchasing or carrying Fund Shares, or make interest-
bearing loans to the Company.
Further, the New Agreement provides that Mercantile and others who may assist
Mercantile in providing services to the Fund shall not be liable for any
alleged or actual error of judgment or mistake of law or for any alleged or
actual loss suffered by a Fund or the Company, and each Fund and the Company
have agreed to indemnify and hold harmless Mercantile and such other persons
against and from any claims, liabilities, actions, suits, proceedings,
judgments or damages (and expenses as and when incurred in connection
therewith, including the reasonable cost of investigating or defending same,
including but not limited to attorneys' fees) arising out of any such alleged
or actual error of judgment or mistake of law or loss; however, nothing in the
New Agreement will be deemed to protect or purport to protect Mercantile or any
such other person against any liability to the Company or its shareholders
resulting from willful misfeasance, bad faith or negligence in the performance
of its duties under the New Agreement or by reason of reckless disregard of the
obligations or duties thereunder. The New Agreement provides, however, that
such indemnification shall not inure to the benefit of any person or sub-
adviser employed by Mercantile or with which Mercantile has contracted.
If approved by a majority of the outstanding Shares of a Fund (as defined
below) and not sooner terminated, the New Agreement will continue in effect
with respect to such Fund until July 31, 1999 and thereafter from year to year,
provided that such continuance is approved at least annually (i) by the vote of
a majority of those members of the Board of Directors who are not parties to
the New Agreement or "interested persons" (as defined in the 1940 Act) of any
such party, and (ii) by the Board of Directors or by vote of a majority of the
outstanding Shares of such Fund.
The New Agreement provides that it will terminate automatically in the event
of its "assignment" (as defined in the 1940 Act), and that it is terminable
with respect to one or more Funds by Mercantile, by the Board of Directors of
the Company, or by vote of a majority of the outstanding Shares of such Fund or
Funds, without penalty, on 60 days' notice.
EVALUATION BY THE BOARD OF DIRECTORS. The New Agreement was approved by a
majority of the Company's Board of Directors and by a majority of those members
of the Board of Directors who are not "interested persons" (as defined in the
1940 Act) of any party to the New Agreement at a meeting held on April 24,
1998. The New Agreement was proposed in order to consolidate the Current
Agreements into the New Agreement and to implement certain changes in the terms
of the Current Agreements. These changes include (1) the institution of
advisory fee breakpoints with respect to each Fund, which will allow the
shareholders of each Fund to share in any economies of scale realized by
Mercantile as the assets of the Funds increase, (2) a change from a gross
negligence to a negligence standard of care, which will result in Mercantile
being held to a higher standard of care in providing advisory services under
the New Agreement, and (3) allowing Mercantile to utilize a sub-adviser to
assist it in providing advisory services to each Fund. The Board of Directors
considered that, except as noted above, the New Agreement was the same as the
Current Agreements and that there would be no change in the personnel at
Mercantile providing advisory services to the Funds as a result of the New
Agreement. The Board considered each of these factors to be of material
importance in connection with its recommendation of the New Agreement. Based
upon their consideration, analysis and evaluation of the above factors and
other information deemed by them to be relevant, the Board has concluded that
the approval of the New Agreement would be in the best interest of the Funds
and their respective shareholders.
At the time of their approval of the New Agreement, two of the members of the
Company's Board of Directors were considered to be "interested" Directors
within the meaning of the 1940 Act. Leslie B. Disharoon, Chairman of the Board
of Directors and President of the Company, and his wife each own shares of
Mercantile
7
<PAGE>
Bankshares Corporation, the parent of the Company's investment adviser. Decatur
H. Miller, Treasurer of the Company and a member of the Board, serves as a co-
trustee of a trust for which Mercantile is also a co-trustee.
INFORMATION CONCERNING THE CURRENT AGREEMENTS. The Current Agreement with
respect to the Prime Money Market Fund, Government Money Market Fund and Tax-
Exempt Money Market Fund is dated July 21, 1989, was approved by the
shareholders of each such Fund on July 16, 1990 for the purpose of complying
with certain conditions imposed by the 1940 Act as well as by the SEC at that
time in connection with the registration of such Funds under the federal
securities laws, and was last approved by the Board of Directors of the Company
on April 24, 1998. Pursuant to such Agreement, Mercantile is entitled to
receive advisory fees at the annual rate of 0.25% of each Fund's average daily
net assets. For the fiscal year ended May 31, 1998, Mercantile received
advisory fees (after waivers) at the effective annual rates of 0.24%, 0.23% and
0.23% of the average daily net assets of the Prime Money Market Fund,
Government Money Market Fund and Tax-Exempt Money Market Fund, respectively,
representing $962,316 with respect to the Prime Money Market Fund, $825,312
with respect to the Government Money Market Fund and $198,495 with respect to
the Tax-Exempt Money Market Fund.
The Current Agreement with respect to the Growth & Income Fund and Limited
Maturity Bond Fund is dated November 13, 1990, was approved by the shareholders
of each such Fund on October 28, 1991 for the purpose of complying with certain
conditions imposed by the 1940 Act as well as by the SEC at that time in
connection with the registration of such Funds under the federal securities
laws, and was last approved by the Board of Directors of the Company on April
24, 1998. Pursuant to such Agreement, Mercantile is entitled to receive
advisory fees at the annual rates of 0.60% of the average daily net assets of
the Growth & Income Fund and 0.35% of the average daily net assets of the
Limited Maturity Bond Fund. For the fiscal year ended May 31, 1998, Mercantile
received advisory fees (after waivers) at the effective annual rates of 0.43%
and 0.15% of the average daily net assets of the Growth & Income Fund and
Limited Maturity Bond Fund, respectively, representing $767,215 with respect to
the Growth & Income Fund and $63,787 with respect to the Limited Maturity Bond
Fund.
The Current Agreement with respect to the Maryland Tax-Exempt Bond Fund is
dated February 3, 1992, was approved by the sole shareholder of such Fund on
June 2, 1992 prior to the Fund's initial public offering, and was last approved
by the Board of Directors of the Company on April 24, 1998. Pursuant to such
Agreement, Mercantile is entitled to receive advisory fees at the annual rate
of 0.50% of such Fund's average daily net assets. For the fiscal year ended May
31, 1998, Mercantile received advisory fees (after waivers) at the effective
annual rate of 0.07% of the Fund's average daily net assets, representing
$6,676.
The Current Agreement with respect to the International Equity Fund is dated
June 29, 1993, was approved by the sole shareholder of such Fund on June 29,
1993 prior to the Fund's initial public offering, and was last approved by the
Company's Board of Directors on April 24, 1998. Pursuant to such Agreement,
Mercantile is entitled to receive advisory fees at the annual rate of 0.80% of
the Fund's average daily net assets. For the fiscal year ending May 31, 1998,
Mercantile received advisory fees (after waivers) at the effective annual rate
of 0.74% of the Fund's average daily net assets, representing $610,880. Of the
fees paid to Mercantile, $343,619 was paid to BlackRock, Inc., the sub-adviser
to the Fund, pursuant to the terms of a Sub-Advisory Agreement dated March 19,
1996.
The Current Agreement with respect to the Diversified Real Estate Fund is
dated July 31, 1997, was approved by the sole shareholder of such Fund on July
31, 1997 and was last approved by the Board of Directors of the Company on
April 24, 1998. Pursuant to such Agreement, Mercantile is entitled to receive
advisory fees at the annual rate of 0.80% of the Fund's average daily net
assets. For the period August 1, 1997 (commencement of operations) through May
31, 1998, Mercantile waived all advisory fees payable to it.
The Current Agreement with respect to the Equity Growth Fund, Equity Income
Fund, Total Return Bond Fund, National Tax-Exempt Bond Fund and Intermediate
Tax-Exempt Bond Fund is dated February 27, 1998, was approved by the sole
shareholder of each such Fund on February 27, 1998 prior to each such Fund's
initial public offering, and was last approved by the Board of Directors of the
Company on October 24, 1997. Pursuant
8
<PAGE>
to such Agreement, Mercantile is entitled to receive advisory fees at the
annual rates of 0.60%, 0.60%, 0.35%, 0.50% and 0.50% of the average daily net
assets of the Equity Income Fund, Equity Growth Fund, Total Return Bond Fund,
National Tax-Exempt Bond Fund and Intermediate Tax-Exempt Bond Fund,
respectively. For the period March 1, 1998 (commencement of operations) through
May 31, 1998, Mercantile received advisory fees (after waivers) at the
effective annual rates of 0.45%, 0.31%, 0.20%, 0.21% and 0.20% of the average
daily net assets of the Equity Income Fund, Equity Growth Fund, Total Return
Bond Fund, National Tax-Exempt Bond Fund and Intermediate Tax-Exempt Bond Fund,
respectively, representing $372,017 with respect to the Equity Income Fund,
$27,570 with respect to the Equity Growth Fund, $50,020 with respect to the
Total Return Bond Fund, $91,231 with respect to the National Tax-Exempt Bond
Fund and $48,852 with respect to the Intermediate Tax-Exempt Bond Fund.
REQUIRED VOTE. The approval of the New Agreement requires the affirmative
vote of the holders of a "majority of the outstanding shares" of each Fund (as
defined in the 1940 Act), which means the lesser of (a) the holders of 67% or
more of the Shares of the Fund present at the Meeting if the holders of more
than 50% of the outstanding Shares of such Fund are present in person or by
proxy, or (b) more than 50% of the outstanding Shares of the Fund.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE NEW
AGREEMENT.
VOTING INFORMATION
RECORD DATE. Only shareholders of record at the close of business on June 18,
1998 will be entitled to vote at the Meeting. On that date, the outstanding
Shares were as follows:
<TABLE>
<CAPTION>
NUMBER OF
FUND SHARES OUTSTANDING
---- ------------------
<S> <C>
Prime Money Market Fund................................. 447,780,844.260
Government Money Market Fund............................ 389,642,358.750
Tax-Exempt Money Market Fund............................ 91,026,226.870
Tax-Exempt Money Market Fund (Trust).................... 55,436,753.000
Growth & Income Fund.................................... 17,463,205.560
International Equity Fund............................... 6,257,464.571
Limited Maturity Bond Fund.............................. 14,463,012.475
Maryland Tax-Exempt Bond Fund........................... 1,533,829.323
Diversified Real Estate Fund............................ 658,849.566
Equity Income Fund...................................... 30,995,686.226
Equity Growth Fund...................................... 3,327,981.718
Total Return Bond Fund.................................. 10,243,444.462
National Tax-Exempt Bond Fund........................... 17,748,399.132
Intermediate Tax-Exempt Bond Fund....................... 9,237,886.089
</TABLE>
QUORUM. A quorum is constituted with respect to the Company or a Fund, by the
presence in person or by proxy of the holders of at least a majority of all of
the votes entitled to be cast at the Meeting by shareholders of the Company or
such Fund. For purposes of determining the presence of a quorum, abstentions,
but not broker "non-votes" (that is, proxies from brokers or nominees
indicating that such persons have not received instructions from the beneficial
owners or other persons entitled to vote shares on a particular matter with
respect to which the brokers or nominees do not have discretionary power), will
be treated as shares that are present at the Meeting but which have not been
voted. Abstentions and broker "non-votes" will have the effect of a "no" vote
for purposes of obtaining the requisite approval of each proposal.
In the event that a quorum is not present at the Meeting or at any
adjournment thereof, or in the event that a quorum is present at the Meeting
but sufficient votes to approve any of the proposals are not received, the
persons
9
<PAGE>
named as proxies, or their substitutes, may propose and vote for one or more
adjournments of the Meeting to permit the further solicitation of proxies. Any
such adjournment will require the affirmative vote of a majority of those
Shares affected by the adjournment that are represented at the Meeting in
person or by proxy. If a quorum is present, the persons named as proxies will
vote those proxies which they are entitled to vote FOR any of the proposals in
favor of such adjournments, and will vote those proxies required to be voted
AGAINST all proposals against any such adjournments.
OTHER SHAREHOLDER INFORMATION. As of June 18, 1998, the record date for the
Meeting, Mercantile held of record, in a fiduciary or representative capacity
for its customers, substantially all of the outstanding Shares of each Fund. On
such date, Mercantile may be deemed to be the beneficial owner, for purposes of
the federal securities laws, of approximately 55.6%, 30.8%, 51.7%, 44.4%,
51.6%, 63.0%, 64.9%, 52.7%, 93.3%, 73.1%, 68.0%, 82.2%, 64.9% and 71.5% of the
Shares of the Prime Money Market Fund, Government Money Market Fund, Tax-Exempt
Money Market Fund, Tax-Exempt Money Market Fund (Trust), Growth & Income Fund,
International Equity Fund, Limited Maturity Bond Fund, Maryland Tax-Exempt Bond
Fund, Diversified Real Estate Fund, Equity Growth Fund, Equity Income Fund,
Total Return Bond Fund, National Tax-Exempt Bond Fund and Intermediate Tax-
Exempt Bond Fund, respectively, that were outstanding on that date because
Mercantile possessed sole or shared voting or investment power with respect to
such Shares. Mercantile does not, however, have any economic interest in such
Shares which are held solely for the benefit of its customers.
The name, address and share ownership of each other person who may have
possessed sole or shared voting or investment power with respect to more than
5% of the Company's outstanding Shares at that date were:
<TABLE>
<CAPTION>
PERCENTAGE
AMOUNT OF FUND OF FUND
FUND NAME AND ADDRESS SHARES OWNED SHARES OWNED
---- ---------------- -------------- ------------
<S> <C> <C> <C>
Government Money Market Mr. James G. Robinson 28,926,199.00 7.42%
Fund 10 East Lee Street
Suite 2705
Baltimore, MD 21202
Tax-Exempt Money Market Fred Hittman 4,791,519.00 5.26%
Fund 3211 Keyser Road
Baltimore, MD 21208
Reliable Liquors, Inc. 9,324,600.00 10.24%
2200 Winchester Street
Baltimore, MD 21216
Tax-Exempt Money Market Robert H. Levi Marital Trust 3,665,587.00 6.61%
Fund (Trust) c/o Mercantile-Safe Deposit
and Trust Company
Two Hopkins Plaza
Baltimore, MD 21201
Betty Washington Whiting 3,960,252.00 7.14%
Deed of Trust
c/o Mercantile-Safe Deposit
and Trust Company
Two Hopkins Plaza
Baltimore, MD 21201
Maryland Tax-Exempt Bond Mr. Kenneth H. Roberts 169,253.593 11.03%
Fund 6287 Firethorn Drive
Clarksville, MD 21029
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE
AMOUNT OF FUND OF FUND
FUND NAME AND ADDRESS SHARES OWNED SHARES OWNED
- ---- ---------------- -------------- ------------
<S> <C> <C> <C>
Chelton Communications 100,925.926 6.58%
Systems, Inc.
58 Main Street, Route 117
Bolton, MA 01740
</TABLE>
For purposes of the 1940 Act, any person who owns directly or through one or
more controlled companies more than 25% of the voting securities of a company
is presumed to "control" such company. Under this definition, Mercantile may be
deemed to be a controlling person of the Company. The Company has been advised
by Mercantile that subject to its fiduciary responsibilities, it intends to
vote the Shares over which it has voting power FOR and AGAINST each proposal
presented at the Meeting in the same proportions as the total votes that are
cast FOR and AGAINST the proposal by other shareholders of the Company.
ADDITIONAL INFORMATION
INFORMATION ABOUT MERCANTILE. Mercantile's principal offices are located at
Two Hopkins Plaza, Baltimore, Maryland 21201. Mercantile is a wholly-owned
subsidiary of Mercantile Bankshares Corporation, a publicly-held bank holding
company, whose principal offices are also located at Two Hopkins Plaza,
Baltimore, Maryland 21201. As of June 18, 1998, to the Company's knowledge, no
person owned beneficially or of record 10% or more of any class of issued and
outstanding voting securities of Mercantile Bankshares Corporation.
The New Advisory Agreement permits Mercantile to act as investment adviser to
one or more other investment companies and to fiduciary or other managed
accounts. While Mercantile does not provide investment advisory services to any
investment companies other than the Company, it does provide such services to
fiduciary and other managed accounts. Mercantile also serves as investment
adviser to the Company's Tax-Exempt Money Market Fund (Trust), with net assets
at June 18, 1998 of approximately $55,435,606. Pursuant to the terms of the
investment advisory agreement relating to that Fund, Mercantile receives no
advisory fees for providing services to the Fund.
The name, address and principal occupation of the chief executive officer and
each director of Mercantile as of June 18, 1998 were as follows:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME POSITION WITH MERCANTILE AND ADDRESS
---- ------------------------ --------------------
<S> <C> <C>
H. Furlong Baldwin...... Director, Chairman of the Director, Chairman of the
Board, and Chief Executive Board, and Chief Executive
Officer Officer
Mercantile Bankshares
Corporation
Two Hopkins Plaza
Baltimore, MD 21201
Cynthia A. Archer....... Director Senior Vice President,
Intermodal Service Group,
Consolidated Rail Corp. and
Conrail
2001 Market Street
Philadelphia. PA 19101
Thomas M. Bancroft, Director Retired
Jr..................... c/o Mercantile-Safe Deposit &
Trust Company
Two Hopkins Plaza
Baltimore, MD 21201
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME POSITION WITH MERCANTILE AND ADDRESS
---- ------------------------ --------------------
<S> <C> <C>
Richard O. Berndt....... Director Partner
Gallagher, Evelius & Jones
The Park Charles Building,
Suite 400
218 North Charles Street
Baltimore, MD 21201
James A. Block, M.D..... Director Retired
c/o Mercantile-Safe Deposit &
Trust Company
Two Hopkins Plaza
Baltimore, MD 21201
William R. Brody........ Director President
The Johns Hopkins University
Charles & 34th St.
Baltimore, MD 21218
George L. Bunting....... Director President & Chief Executive
Officer
Bunting Management Group
Suite 350
9690 Deereco Road
Timonium, MD 21093
Martin L. Grass......... Director Chairman & Chief Executive
Officer
Rite-Aid Corporation
Camp Hill, PA
Freeman A. Habrowski, Director President
III.................... University of Maryland
Baltimore County
1000 Hilltop Circle
Baltimore, MD 21250
B. Larry Jenkins........ Director Director, Chairman of the
Board, President and
Chief Executive Officer
Monumental Life Insurance
Company
2 East Chase Street
Baltimore, MD 21202
Mary Junck.............. Director President
Times Mirror Eastern Newspapers
Executive Vice President
Times Mirror
501 North Calvert Street
Baltimore, MD 21278
Robert A. Kinsley....... Director Chief Executive Officer
Kinsley Construction
2700 Water St.
York, PA 17403-9306
William J. McCarthy..... Director Principal, William J. McCarthy,
P.C., a Partner, Venable,
Baetjer and Howard L.L.P.
Two Hopkins Plaza
Baltimore, MD 21201
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME POSITION WITH MERCANTILE AND ADDRESS
---- ------------------------ --------------------
<S> <C> <C>
Morris W. Offit......... Director Chairman of the Board and Chief
Executive Officer
OFFITBANK
Manhattan Tower
101 East 52nd Street
New York, NY 10022
Martin B. Plant......... Director Chairman
Keywell Corp.
7600 Rolling Mill Road
Baltimore, MD 21224
Christian H. Director Director, Chairman of the Board
Poindexter............. and Chief Executive Officer
Baltimore Gas & Electric
Company
P.O. Box 1475
Baltimore, MD 21203
J. Marshall Reid........ Director, President and Chief President & Chief Operating
Operating Officer Officer Mercantile-Safe Deposit
& Trust Company
Two Hopkins Plaza
Baltimore, MD 21201
William C. Richardson... Director President & Chief Executive
Officer W.K. Kellogg Foundation
One Michigan Avenue,
East Battle Creek, MI 49017
Donald J. Shepard....... Director Chairman of the Board,
President and Chief Executive
Officer
AEGON USA Inc.
2 East Chase Street
Baltimore, MD 21202
Brian B. Topping........ Director and Vice Chairman of Vice Chairman of the Board
the Board Mercantile-Safe Deposit & Trust
Company
Two Hopkins Plaza
Baltimore, MD 21202
</TABLE>
BANKING LAWS. Banking laws and regulations, including the Glass-Steagall Act
as presently interpreted by the Board of Governors of the Federal Reserve
System, prohibit a bank holding company registered under the federal Bank
Holding Company Act of 1956 or any affiliate thereof from sponsoring,
organizing or controlling a registered open-end investment company
continuously engaged in the issuance of its shares, and prohibit banks
generally from underwriting, selling or distributing securities, but in
general do not prohibit such a holding company or affiliated banks generally
from acting as adviser to such an investment company or from purchasing shares
of such a company as agent for and upon the order of customers. Mercantile is
subject to such laws and regulations. Mercantile believes that it may perform
the services contemplated by the New Agreement. However, future changes in
legal requirements relating to the permissible activities of banks and their
affiliates, as well as future interpretations of current requirements, could
prevent Mercantile from continuing to perform investment advisory services for
the Company.
13
<PAGE>
If Mercantile were prohibited from performing investment advisory services
for the Company, it is expected that the Board of Directors of the Company
would select another qualified firm. Any new advisory agreement would be
subject to shareholder approval.
PAYMENTS TO AFFILIATES. Mercantile also serves as administrator to the
Company. For its services as administrator, Mercantile receives fees from the
Funds, computed daily and payable monthly, calculated at the annual rate of
.125% of the Company's aggregate average daily net assets. For the fiscal year
ended May 31, 1998, Mercantile received administrative fees (net of waivers)
from each Fund as follows:
<TABLE>
<CAPTION>
FUND ADMINISTRATION FEE
---- ------------------
<S> <C> <C>
Prime Money Market Fund............................ $351,536
Government Money Market Fund....................... $364,539
Tax-Exempt Money Market Fund....................... $ 64,253
Tax-Exempt Money Market Fund (Trust)............... $ 42,599
Growth & Income Fund............................... $221,769
International Equity Fund.......................... $ 61,960
Limited Maturity Bond Fund......................... $ 22,388
Maryland Tax-Exempt Bond Fund...................... $ 1,492
Diversified Real Estate Fund....................... $ -0-
Equity Income Fund................................. $ 42,189
Equity Growth Fund................................. $ 8,982
Total Return Bond Fund............................. $ -0-
National Tax-Exempt Bond Fund...................... $ 4,414
Intermediate Tax-Exempt Bond Fund.................. $ -0-
</TABLE>
It is expected that Mercantile will continue to provide administrative
services to the Company after the Meeting.
OFFICERS. Officers of the Company are elected by the Directors and hold
office until they resign, are removed or are otherwise disqualified to serve.
The following table sets forth certain information about the Company's officers
who are not also Directors.
<TABLE>
<CAPTION>
OFFICER POSITION WITH PRINCIPAL OCCUPATIONS DURING
NAME AND ADDRESS AGE SINCE THE COMPANY PAST 5 YEARS AND OTHER AFFILIATIONS
---------------- --- ------- ------------- -----------------------------------
<S> <C> <C> <C> <C>
W. Bruce McConnel III... 55 1989 Secretary Partner of the law firm of Drinker
Suite 1100 Biddle & Reath LLP, Philadelphia,
1345 Chestnut Street Pennsylvania since 1977.
Philadelphia, PA 19107
</TABLE>
The officers of the Company who are not also Directors receive no
compensation directly from the Company for performing the duties of their
offices. Drinker Biddle & Reath LLP, of which Mr. McConnel is a partner,
receives legal fees for services provided to the Company.
SUB-ADVISER. BlackRock, Inc., the sub-adviser to the Company's International
Equity Fund, has its principal offices at 345 Park Avenue, New York, New York
10137.
DISTRIBUTOR. BISYS Fund Services (the "Distributor") serves as the exclusive
distributor of the Shares of the Company. The Distributor's principal offices
are located at 3435 Stelzer Road, Columbus, Ohio 43219.
14
<PAGE>
OTHER MATTERS
The Company does not intend to hold Annual Meetings of Shareholders except
to the extent that such meetings may be required under the 1940 Act or state
law. Shareholders who wish to submit proposals for inclusion in the Proxy
Statement for a subsequent shareholder meeting should send their written
proposals to the Company at its principal office within a reasonable time
before such meeting.
No business other than the matters described above is expected to come
before the Meeting, but should any other matter requiring a vote of
shareholders arise, including any question as to an adjournment of the
Meeting, the persons named in the enclosed Proxy will vote thereon according
to their best judgment in the interests of the Company.
Dated: June 22, 1998
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING AND WHO WISH TO
HAVE THEIR SHARES VOTED ARE REQUESTED TO COMPLETE THE ENCLOSED PROXY AND
RETURN IT IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES.
THE COMPANY WILL FURNISH, WITHOUT CHARGE, COPIES OF THE COMPANY'S ANNUAL AND
SEMI-ANNUAL REPORTS TO SHAREHOLDERS DATED MAY 31, 1997 AND NOVEMBER 30, 1997,
RESPECTIVELY, TO ANY SHAREHOLDER UPON REQUEST. THE COMPANY'S ANNUAL AND SEMI-
ANNUAL REPORTS TO SHAREHOLDERS MAY BE OBTAINED FROM THE COMPANY BY WRITING TO
THE COMPANY AT TWO HOPKINS PLAZA, BALTIMORE, MARYLAND 21201 OR BY CALLING 1-
800-551-2145.
15
<PAGE>
EXHIBIT A
ADVISORY AGREEMENT
M.S.D. & T. FUNDS, INC.
Two Hopkins Plaza
Baltimore, Maryland 21201
July , 1998
Mercantile-Safe Deposit & Trust Company
Two Hopkins Plaza
Baltimore, Maryland 21201
Dear Sirs:
This will confirm the agreement, entered into in consideration of the
premises and mutual covenants herein contained, and for other good and
valuable consideration, between the undersigned (the "Company") and you as
follows:
1. General. The Company is an open-end investment company. This Agreement
relates to thirteen of the Company's portfolios--the Prime Money Market
Fund, the Government Money Market Fund, the Tax-Exempt Money Market Fund,
the Growth & Income Fund, the International Equity Fund, the Limited
Maturity Bond Fund, the Maryland Tax-Exempt Bond Fund, the Diversified Real
Estate Fund, the Equity Income Fund, the Equity Growth Fund, the Total
Return Bond Fund, the National Tax-Exempt Bond Fund and the Intermediate
Tax-Exempt Bond Fund (individually, a "Fund" and collectively, the
"Funds"). The Company proposes to engage in the business of investing and
reinvesting the assets of each Fund in the manner and in accordance with
the investment objective, policies and limitations specified with respect
to each Fund in the Company's Prospectuses and Statements of Additional
Information relating to the Funds (the "Prospectus") included in the
Company's Registration Statement on Form N-1A, as amended from time to
time, filed under the Investment Company Act of 1940, as amended (the "1940
Act"), and the Securities Act of 1933, as amended. Copies of the Prospectus
have been furnished to you. Any amendments to the Prospectus shall be
furnished to you promptly.
2. Advisory Services. Subject to the supervision and approval of the
Company's Board of Directors, you will provide investment management of
each Fund's portfolio in accordance with such Fund's investment objective,
policies and limitations as stated in the Prospectus as from time to time
in effect, and resolutions of the Company's Board of Directors of which you
will be advised. In connection therewith, you will obtain and provide
investment research and will supervise each Fund's investments and conduct
a continuous program of investment, evaluation and, if appropriate, sale
and reinvestment of such Fund's assets.
In the event that the Company establishes one or more portfolios other
than the Funds with respect to which it desires to retain you as investment
adviser hereunder, it shall notify you in writing. If you are willing to
render such services under this Agreement you shall notify the Company in
writing, whereupon such portfolio shall become a Fund hereunder and shall
be subject to the provisions of this Agreement to the same extent as the
other Funds except to the extent that said provisions (including those
relating to compensation payable by such additional Fund to you as
investment adviser) are modified with respect to such additional Fund in
writing by you and the Company at the time.
You will comply with all rules and regulations of the Securities and
Exchange Commission applicable to you in connection with your performance
of this Agreement, and will in addition conduct your activities under this
Agreement in accordance with other law, including banking law, applicable
to you.
You will not make loans for the purpose of purchasing or carrying Fund
shares, or make interest-bearing loans to the Company.
A-1
<PAGE>
You will place orders for the purchase and sale of portfolio securities
and will solicit broker-dealers to execute transactions in accordance with
the Funds' policies and restrictions regarding brokerage allocations. You
will place orders pursuant to your investment determination for the Funds
either directly with the issuer or with any broker or dealer selected by
you. In executing portfolio transactions and selecting brokers or dealers,
you will use your reasonable best efforts to seek the most favorable
execution of orders, after taking into account all factors you deem
relevant, including the breadth of the market in the security, the price of
the security, the financial condition and execution capability of the
broker or dealer, and the reasonableness of the commission, if any, both
for the specific transaction and on a continuing basis. Consistent with
this obligation, you may, to the extent permitted by law, purchase and sell
portfolio securities to and from brokers and dealers who provide brokerage
and research services (within the meaning of Section 28(e) of the
Securities Exchange Act of 1934, as amended) to or for the benefit of the
Funds and/or other accounts over which you or any of your affiliates
exercises investment discretion. You are authorized to pay to a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for any Fund which is in excess of the
amount of commission another broker or dealer would have charged for
effecting that transaction if you determine in good faith that such
commission was reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms of
either that particular transaction or your overall responsibilities to the
particular Fund and to the Company. In no instance will portfolio
securities be purchased from or sold to you, or the Funds' principal
underwriter, or any affiliated person thereof except as permitted by the
Securities and Exchange Commission.
3. Assistance. You may employ or contract with other persons to assist
you in the performance of this Agreement including, without limitation, one
or more sub-advisers who may perform under your supervision any or all of
the services described under Section 2 for one or more of the Funds;
provided, however, that the retention of any sub-adviser shall be approved
as may be required by the 1940 Act. Such other persons and/or sub-advisers
may include other investment advisory or management firms and officers or
employees who are employed by both you and the Company. The fees or other
compensation of any such other persons or sub-advisers shall be paid by you
and no obligation may be incurred on the Company's behalf to any such
person or sub-adviser.
In the event that you appoint a sub-adviser for one or more of the Funds,
you will review, monitor, and report to the Company's Board of Directors on
the performance and investment procedures of any such sub-adviser; assist
and consult with any sub-adviser in connection with such Fund's or Funds'
continuous investment program; and, if applicable, approve lists of foreign
countries which may be recommended by any sub-adviser for investment by
such Fund or Funds.
4. Fees. In consideration of the advisory services rendered pursuant to
this Agreement, (a) the Prime Money Market Fund, the Government Money
Market Fund and the Tax-Exempt Money Market Fund each will pay you on the
first business day of each month a fee at the annual rate of .25% of the
first $1 billion of such Fund's average daily net assets during the
preceding month plus .20% of such Fund's average daily net assets in excess
of $1 billion during the preceding month, (b) the Growth & Income Fund, the
Equity Income Fund and the Equity Growth Fund each will pay you on the
first business day of each month a fee at the annual rate of .60% of the
first $1 billion of such Fund's average daily net assets during the
preceding month plus .40% of such Fund's average daily net assets in excess
of $1 billion during the preceding month, (c) the Limited Maturity Bond
Fund and the Total Return Bond Fund each will pay you on the first business
day of each month a fee at the annual rate of .35% of the first $1 billion
of such Fund's average daily net assets during the preceding month plus
.20% of such Fund's average daily net assets in excess of $1 billion during
the preceding month, (d) the Maryland Tax-Exempt Bond Fund, the National
Tax-Exempt Bond Fund and the Intermediate Tax-Exempt Bond Fund each will
pay you on the first business day of each month a fee at the annual rate of
.50% of the first $1 billion of such Fund's average daily net assets during
the preceding month plus .25% of such Fund's average daily net assets in
excess of $1 billion during the preceding month, (e) the International
Equity Fund will pay you a fee on the first business day of each
A-2
<PAGE>
month at the annual rate of .80% of the first $1 billion of such Fund's
average daily net assets during the preceding month plus .70% of such
Fund's average daily net assets in excess of $1 billion during the
preceding month, and (f) the Diversified Real Estate Fund shall pay you a
fee on the first business day of each month at the annual rate of .80% of
the first $1 billion of such Fund's average daily net assets during the
preceding month plus .60% of such Fund's average daily net assets in excess
of $1 billion during the preceding month. Net asset value shall be computed
in the manner, on such days and at such time or times as described in the
Funds' Prospectus from time to time. The fee for the period from the date
of commencement of operations of any Fund to the end of the first month
thereafter shall be prorated according to the proportion which such period
bears to the full monthly period, and upon any termination of this
Agreement with respect to any Fund before the end of any month, the fee for
such part of a month shall be prorated according to the proportion which
such period bears to the full monthly period and shall be payable upon the
date of termination of this Agreement with respect to such Fund.
5. Expenses. You will bear all of your own expenses in connection with
the performance of your services under this Agreement, provided that such
expenses will not include the expenses to be borne by the Funds, as set
forth below. The expenses to be borne by the Funds include, without
limitation, the following: organizational costs; taxes; interest; brokerage
fees and commissions and other expenses in any way related to the
execution, recording and settlement of portfolio security transactions;
fees of Directors who are not also your officers; Securities and Exchange
Commission fees; state Blue Sky qualification fees; charges of custodians
and transfer and dividend paying agents; premiums for directors and
officers liability insurance; costs of fidelity bonds; industry association
fees; outside auditing and legal expenses; costs of maintaining corporate
existence; costs of maintaining required books and accounts; cost of office
facilities and supplies; data processing, clerical, accounting and
bookkeeping services and other administrative expenses; costs attributable
to investor services (including, without limitation, telephone and
personnel expenses); costs of Securities and Exchange Commission regulatory
reports; costs of shareholders' reports and meetings; costs of preparing,
printing and mailing prospectuses for regulatory purposes and for
distribution to existing shareholders; and any extraordinary expenses.
6. Liability. You shall exercise your best judgment in rendering the
services to be provided to each Fund. You shall remit to the particular
Fund or Funds the amount of any recovery you obtain for the benefit of such
Fund or Funds from any person or sub-adviser whom you have employed or with
whom you have contracted pursuant to Section 3 of this Agreement, for the
acts and omissions of such person or sub-adviser. Subject to the foregoing,
each Fund agrees as an inducement to you and others who may assist you in
providing services to such Fund that you and such other persons shall not
be liable for any alleged or actual error of judgment or mistake of law or
for any alleged or actual loss suffered by such Fund or the Company and
each Fund and the Company agree to indemnify and hold harmless you and such
other persons against and from any claims, liabilities, actions, suits,
proceedings, judgments or damages (and expenses as and when incurred in
connection therewith, including the reasonable cost of investigating or
defending same, including, but not limited to attorneys' fees) arising out
of any such alleged or actual error of judgment or mistake of law or loss;
provided, however, that nothing herein shall be deemed to protect or
purport to protect you or any such other persons against any liability to
any Fund or to its shareholders to which you or they would otherwise be
subject by reason of willful misfeasance, bad faith or negligence in the
performance of duties hereunder, or by reason of reckless disregard of the
obligations and duties hereunder; and provided further, that this sentence
shall not inure to the benefit of any person or sub-adviser (or others who
may assist any such person or sub-adviser) whom you have employed or with
whom you have contracted pursuant to Section 3 of this Agreement.
7. Other Accounts. The Company understands that you and other persons
with whom you contract to provide the services hereunder may from time to
time act as investment adviser to one or more other investment companies
and fiduciary or other managed accounts, and the Company has no objection
to your or their so acting. When the purchase or sale of securities of the
same issuer is suitable for the investment objectives of two or more
companies or accounts managed by you or such other persons which have
A-3
<PAGE>
available funds for investment, the available securities may be allocated
in a manner believed by you and such other persons to be equitable to each
company or account. It is recognized that in some cases this procedure may
adversely affect the price paid or received by a Fund or the size of the
position obtainable for or disposed of by a Fund.
In addition, it is understood that you and the persons with whom you
contract to assist in the performance of your duties hereunder will not
devote their full time to such service and nothing contained herein shall
be deemed to limit or restrict your or their right to engage in and devote
time and attention to similar or other businesses.
8. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, you agree that all records which you maintain for the
Company are the property of the Company and you further agree to surrender
promptly to the Company any of such records upon the Company's request. You
further agree to preserve for the periods prescribed by Rule 31a-2 under
the 1940 Act such records that you, as investment adviser, are required to
maintain by Rule 31a-1 under the 1940 Act.
9. Term. This Agreement shall continue with respect to each Fund until
July 31, 1999 and thereafter shall continue automatically for successive
12-month periods, provided such continuance with respect to each Fund is
specifically approved at least annually by the Company's Board of Directors
or by vote of the lesser of (a) 67% of the shares of such Fund represented
at a meeting if the holders of more than 50% of the outstanding shares of
the Fund are present in person or by proxy or (b) more than 50% of the
outstanding shares of such Fund, provided that in either event its
continuance also is approved by a majority of the Company's Directors who
are not "interested persons" (as defined in the 1940 Act) of any party to
this Agreement, by vote cast in person at a meeting called for the purpose
of voting on such approval. This Agreement is terminable with respect to
any Fund without penalty, on 60 days' notice, by you or by the Company's
Board of Directors or by vote of the lesser of (a) 67% of the shares of
such Fund represented at a meeting if the holders of more than 50% of the
outstanding shares of the Fund are present in person or by proxy or (b)
more than 50% of the outstanding shares of such Fund. This Agreement will
terminate automatically in the event of its assignment (as defined in the
1940 Act).
10. Amendment. This Agreement may be amended only by an instrument in
writing signed by the party against which enforcement of the amendment is
sought. No amendment of this Agreement shall be effective with respect to a
particular Fund until approved by vote of a majority of such Fund's
outstanding voting securities.
11. M.S.D. & T. or Mercantile-Safe Deposit & Trust Company. The Company
recognizes that from time to time your directors, officers and employees
may serve as directors, trustees, partners, officers and employees of other
corporations, business trusts, partnerships or other entities (including
other investment companies) and that such other entities may include the
name "M.S.D. & T." or "Mercantile-Safe Deposit & Trust Company" as part of
their name. You or your affiliates may enter into investment advisory or
other agreements with such other entities. If you cease to act as the
Company's investment adviser, the Company agrees that, at your request, the
Company will take all necessary action to change the name of the Company
and its Funds to a name not including "M.S.D. & T." or "Mercantile-Safe
Deposit & Trust Company" in any form or combination of words.
12. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court
decision, statute, rule, or otherwise, the remainder of this Agreement
shall not be affected thereby. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors and shall be governed by Maryland law; provided, that nothing
herein shall be construed in a manner inconsistent with the 1940 Act, the
Investment Advisers Act of 1940, as amended, or any rule or regulation of
the Securities and Exchange Commission thereunder.
A-4
<PAGE>
If the foregoing is in accordance with your understanding, will you kindly
so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
M.S.D. & T. FUNDS, INC.
By: _________________________________
President
Accepted:
MERCANTILE-SAFE DEPOSIT &
TRUST COMPANY
By: _________________________________
A-5
<PAGE>
PROXY
Carefully fold & detach along perforation
- --------------------------------------------------------------------------------
M.S.D. & T. FUNDS, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS of M.S.D.& T. Funds,
Inc., (the "Company") for use at an Annual Meeting of Shareholders to be
held on July 24, 1998, at 1:30 P.M. Eastern Time, at the offices of
Mercantile-Safe Deposit & Trust Company, Second Floor Board Room, Two
Hopkins Plaza, Baltimore, Maryland 21201.
The undersigned hereby appoints Linda A. Durkin, Cornelia H. Kline and
Joseph J. DiDomenico, Jr., and each of them, with full power of
substitution, as proxies of the undersigned to vote at the above-stated
Annual Meeting, and at all adjournments or postponements thereof, all
shares of Common Stock representing interests in the Company's Prime Money
Market Fund (the "Fund") held of record by the undersigned on June 18, 1998,
the record date for the Meeting, upon the following matters AND UPON ANY
OTHER MATTER THAT MAY COME BEFORE THE MEETING, IN THEIR DISCRETION:
(1) Election of Directors:
[_] For all nominees listed below (except as marked to the contrary
below)
[_] Withhold authority to vote for all nominees listed below INSTRUCTION:
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH HIS NAME IN THE LIST BELOW:
L.B. Disharoon D.H. Miller E.D. Miller J.R. Murphy G.R. Packard
(2) Proposal to ratify the selection of Coopers & Lybrand L.L.P. as the
Company's independent accountants for the fiscal year ending May 31,
1999:
FOR AGAINST ABSTAIN
[_] [_] [_]
(3) Proposal to approve a new Advisory Agreement between the Company and
Mercantile-Safe Deposit & Trust Company with respect to the Fund.
FOR AGAINST ABSTAIN
[_] [_] [_]
(4) In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting.
(continued, and to be signed, on other side)
<PAGE>
PROMPTLY COMPLETE AND RETURN THE
PROXY/VOTING INSTRUCTION FORM BELOW
IN THE ENVELOPE PROVIDED
Carefully fold & detach along perforation
- --------------------------------------------------------------------------------
(continued from other side)
Every properly signed proxy will be voted in the manner specified hereon and,
IN THE ABSENCE OF SPECIFICATION, WILL BE TREATED AS GRANTING AUTHORITY TO VOTE
"FOR" THE PROPOSALS.
PLEASE SIGN, DATE
AND RETURN THE PROXY
CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
Date ________________________ Date ________________________
Signature __________ Signature (Joint Owners) _____________
Please sign exactly as name appears hereon. When shares are
held by joint tenants, both should sign. When signing as
attorney or executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please sign
in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by
authorized person.
<PAGE>
PROXY
Carefully fold & detach along perforation
- --------------------------------------------------------------------------------
M.S.D. & T. FUNDS, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS of M.S.D.& T. Funds,
Inc. (the "Company") for use at an Annual Meeting of Shareholders to be
held on July 24, 1998, at 1:30 P.M. Eastern Time, at the offices of
Mercantile-Safe Deposit & Trust Company, Second Floor Board Room, Two
Hopkins Plaza, Baltimore, Maryland 21201.
The undersigned hereby appoints Linda A. Durkin, Cornelia H. Kline and
Joseph J. DiDomenico, Jr., and each of them, with full power of
substitution, as proxies of the undersigned to vote at the above-stated
Annual Meeting, and at all adjournments or postponements thereof, all
shares of Common Stock representing interests in the Company's Government
Money Market Fund (the "Fund") held of record by the undersigned on June
18, 1998, the record date for the Meeting, upon the following matters AND
UPON ANY OTHER MATTER THAT MAY COME BEFORE THE MEETING, IN THEIR
DISCRETION:
(1) Election of Directors:
[_] For all nominees listed below (except as marked to the contrary below)
[_] Withhold authority to vote for all nominees listed below INSTRUCTION:
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH HIS NAME IN THE LIST BELOW:
L.B. Disharoon D.H. Miller E.D. Miller J.R. Murphy G.R. Packard
(2) Proposal to ratify the selection of Coopers & Lybrand L.L.P. as the
Company's independent accountants for the fiscal year ending May 31,
1999:
FOR AGAINST ABSTAIN
[_] [_] [_]
(3) Proposal to approve a new Advisory Agreement between the Company and
Mercantile-Safe Deposit & Trust Company with respect to the Fund.
FOR AGAINST ABSTAIN
[_] [_] [_]
(4) In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting.
(continued, and to be signed, on other side)
<PAGE>
PROMPTLY COMPLETE AND RETURN THE
PROXY/VOTING INSTRUCTION FORM BELOW
IN THE ENVELOPE PROVIDED
Carefully fold & detach along perforation
- --------------------------------------------------------------------------------
(continued from other side)
Every properly signed proxy will be voted in the manner specified hereon and,
IN THE ABSENCE OF SPECIFICATION, WILL BE TREATED AS GRANTING AUTHORITY TO VOTE
"FOR" THE PROPOSALS.
PLEASE SIGN, DATE
AND RETURN THE PROXY
CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
Date ____________________________ Date ______________________
Signature ____________ Signature (Joint Owners) _____________
Please sign exactly as name appears hereon. When shares are
held by joint tenants, both should sign. When signing as
attorney or executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please sign
in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by
authorized person.
<PAGE>
PROXY
Carefully fold & detach along perforation
- --------------------------------------------------------------------------------
M.S.D. & T. FUNDS, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS of M.S.D.& T. Funds,
Inc. (the "Company") for use at an Annual Meeting of Shareholders to be
held on July 24, 1998, at 1:30 P.M. Eastern Time, at the offices of
Mercantile-Safe Deposit & Trust Company, Second Floor Board Room, Two
Hopkins Plaza, Baltimore, Maryland 21201.
The undersigned hereby appoints Linda A. Durkin, Cornelia H. Kline and
Joseph J. DiDomenico, Jr., and each of them, with full power of
substitution, as proxies of the undersigned to vote at the above-stated
Annual Meeting, and at all adjournments or postponements thereof, all
shares of Common Stock representing interests in the Company's Tax-Exempt
Money Market Fund (the "Fund") held of record by the undersigned on June
18, 1998, the record date for the Meeting, upon the following matters AND
UPON ANY OTHER MATTER THAT MAY COME BEFORE THE MEETING, IN THEIR
DISCRETION:
(1) Election of Directors:
[_] For all nominees listed below (except as marked to the contrary below)
[_] Withhold authority to vote for all nominees listed below INSTRUCTION:
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH HIS NAME IN THE LIST BELOW:
L.B. Disharoon D.H. Miller E.D. Miller J.R. Murphy G.R. Packard
(2) Proposal to ratify the selection of Coopers & Lybrand L.L.P. as the
Company's independent accountants for the fiscal year ending May 31,
1999:
FOR AGAINST ABSTAIN
[_] [_] [_]
(3) Proposal to approve a new Advisory Agreement between the Company and
Mercantile-Safe Deposit & Trust Company with respect to the Fund.
FOR AGAINST ABSTAIN
[_] [_] [_]
(4) In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting.
(continued, and to be signed, on other side)
<PAGE>
PROMPTLY COMPLETE AND RETURN THE
PROXY/VOTING INSTRUCTION FORM BELOW
IN THE ENVELOPE PROVIDED
Carefully fold & detach along perforation
- --------------------------------------------------------------------------------
(continued from other side)
Every properly signed proxy will be voted in the manner specified hereon and,
IN THE ABSENCE OF SPECIFICATION, WILL BE TREATED AS GRANTING AUTHORITY TO VOTE
"FOR" THE PROPOSALS.
PLEASE SIGN, DATE
AND RETURN THE PROXY
CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
Date _____________________ Date ___________________________
Signature __________ Signature (Joint Owners) _____________
Please sign exactly as name appears hereon. When shares are
held by joint tenants, both should sign. When signing as
attorney or executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please sign
in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by
authorized person.
<PAGE>
PROXY
Carefully fold & detach along perforation
- --------------------------------------------------------------------------------
M.S.D. & T. FUNDS, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS of M.S.D.& T. Funds,
Inc. (the "Company") for use at an Annual Meeting of Shareholders to be
held on July 24, 1998, at 1:30 P.M. Eastern Time, at the offices of
Mercantile-Safe Deposit & Trust Company, Second Floor Board Room, Two
Hopkins Plaza, Baltimore, Maryland 21201.
The undersigned hereby appoints Linda A. Durkin, Cornelia H. Kline and
Joseph J. DiDomenico, Jr., and each of them, with full power of
substitution, as proxies of the undersigned to vote at the above-stated
Annual Meeting, and at all adjournments or postponements thereof, all
shares of Common Stock representing interests in the Company's Tax-Exempt
Money Market Fund (Trust) (the "Fund") held of record by the undersigned on
June 18, 1998, the record date for the Meeting, upon the following matters
AND UPON ANY OTHER MATTER THAT MAY COME BEFORE THE MEETING, IN THEIR
DISCRETION:
(1) Election of Directors:
[_] For all nominees listed below (except as marked to the contrary below)
[_] Withhold authority to vote for all nominees listed below INSTRUCTION:
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH HIS NAME IN THE LIST BELOW:
L.B. Disharoon D.H. Miller E.D. Miller J.R. Murphy G.R. Packard
(2) Proposal to ratify the selection of Coopers & Lybrand L.L.P. as the
Company's independent accountants for the fiscal year ending May 31,
1999:
FOR AGAINST ABSTAIN
[_] [_] [_]
(3) In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting.
(continued, and to be signed, on other side)
<PAGE>
PROMPTLY COMPLETE AND RETURN THE
PROXY/VOTING INSTRUCTION FORM BELOW
IN THE ENVELOPE PROVIDED
Carefully fold & detach along perforation
- --------------------------------------------------------------------------------
(continued from other side)
Every properly signed proxy will be voted in the manner specified hereon and,
IN THE ABSENCE OF SPECIFICATION, WILL BE TREATED AS GRANTING AUTHORITY TO VOTE
"FOR" THE PROPOSALS.
PLEASE SIGN, DATE
AND RETURN THE PROXY
CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
Date _______________________ Date __________________________
Signature ___________ Signature (Joint Owners) _____________
Please sign exactly as name appears hereon. When shares are
held by joint tenants, both should sign. When signing as
attorney or executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please sign
in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by
authorized person.
<PAGE>
PROXY
Carefully fold & detach along perforation
- --------------------------------------------------------------------------------
M.S.D. & T. FUNDS, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS of M.S.D.& T. Funds,
Inc. (the "Company") for use at an Annual Meeting of Shareholders to be
held on July 24, 1998, at 1:30 P.M. Eastern Time, at the offices of
Mercantile-Safe Deposit & Trust Company, Second Floor Board Room, Two
Hopkins Plaza, Baltimore, Maryland 21201.
The undersigned hereby appoints Linda A. Durkin, Cornelia H. Kline and
Joseph J. DiDomenico, Jr., and each of them, with full power of
substitution, as proxies of the undersigned to vote at the above-stated
Annual Meeting, and at all adjournments or postponements thereof, all
shares of Common Stock representing interests in the Company's Growth &
Income Fund (the "Fund") held of record by the undersigned on June 18,
1998, the record date for the Meeting, upon the following matters AND UPON
ANY OTHER MATTER THAT MAY COME BEFORE THE MEETING, IN THEIR DISCRETION:
(1) Election of Directors:
[_] For all nominees listed below (except as marked to the contrary
below)
[_] Withhold authority to vote for all nominees listed below INSTRUCTION:
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH HIS NAME IN THE LIST BELOW:
L.B. Disharoon D.H. Miller E.D. Miller J.R. Murphy G.R. Packard
(2) Proposal to ratify the selection of Coopers & Lybrand L.L.P. as the
Company's independent accountants for the fiscal year ending May 31,
1999:
FOR AGAINST ABSTAIN
[_] [_] [_]
(3) Proposal to approve a new Advisory Agreement between the Company and
Mercantile-Safe Deposit & Trust Company with respect to the Fund.
FOR AGAINST ABSTAIN
[_] [_] [_]
(4) In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting.
(continued, and to be signed, on other side)
<PAGE>
PROMPTLY COMPLETE AND RETURN THE
PROXY/VOTING INSTRUCTION FORM BELOW
IN THE ENVELOPE PROVIDED
Carefully fold & detach along perforation
- --------------------------------------------------------------------------------
(continued from other side)
Every properly signed proxy will be voted in the manner specified hereon and,
IN THE ABSENCE OF SPECIFICATION, WILL BE TREATED AS GRANTING AUTHORITY TO VOTE
"FOR" THE PROPOSALS.
PLEASE SIGN, DATE
AND RETURN THE PROXY
CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
Date _________________________ Date _________________________
Signature ____________ Signature (Joint Owners) _____________
Please sign exactly as name appears hereon. When shares are
held by joint tenants, both should sign. When signing as
attorney or executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please sign
in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by
authorized person.
<PAGE>
PROXY
Carefully fold & detach along perforation
- --------------------------------------------------------------------------------
M.S.D. & T. FUNDS, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS of M.S.D.& T. Funds,
Inc. (the "Company") for use at an Annual Meeting of Shareholders to be
held on July 24, 1998, at 1:30 P.M. Eastern Time, at the offices of
Mercantile-Safe Deposit & Trust Company, Second Floor Board Room, Two
Hopkins Plaza, Baltimore, Maryland 21201.
The undersigned hereby appoints Linda A. Durkin, Cornelia H. Kline and
Joseph J. DiDomenico, Jr., and each of them, with full power of
substitution, as proxies of the undersigned to vote at the above-stated
Annual Meeting, and at all adjournments or postponements thereof, all
shares of Common Stock representing interests in the Company's
International Equity Fund (the "Fund") held of record by the undersigned on
June 18, 1998, the record date for the Meeting, upon the following matters
AND UPON ANY OTHER MATTER THAT MAY COME BEFORE THE MEETING, IN THEIR
DISCRETION:
(1) Election of Directors:
[_] For all nominees listed below (except as marked to the contrary
below)
[_] Withhold authority to vote for all nominees listed below INSTRUCTION:
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH HIS NAME IN THE LIST BELOW:
L.B. Disharoon D.H. Miller E.D. Miller J.R. Murphy G.R. Packard
(2) Proposal to ratify the selection of Coopers & Lybrand L.L.P. as the
Company's independent accountants for the fiscal year ending May 31,
1999:
FOR AGAINST ABSTAIN
[_] [_] [_]
(3) Proposal to approve a new Advisory Agreement between the Company and
Mercantile-Safe Deposit & Trust Company with respect to the Fund.
FOR AGAINST ABSTAIN
[_] [_] [_]
(4) In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting.
(continued, and to be signed, on other side)
<PAGE>
PROMPTLY COMPLETE AND RETURN THE
PROXY/VOTING INSTRUCTION FORM BELOW
IN THE ENVELOPE PROVIDED
Carefully fold & detach along perforation
- --------------------------------------------------------------------------------
(continued from other side)
Every properly signed proxy will be voted in the manner specified hereon and,
IN THE ABSENCE OF SPECIFICATION, WILL BE TREATED AS GRANTING AUTHORITY TO VOTE
"FOR" THE PROPOSALS.
PLEASE SIGN, DATE
AND RETURN THE PROXY
CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
Date ______________________ Date ____________________________
Signature ____________ Signature (Joint Owners) _____________
Please sign exactly as name appears hereon. When shares are
held by joint tenants, both should sign. When signing as
attorney or executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please sign
in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by
authorized person.
<PAGE>
PROXY
Carefully fold & detach along perforation
- --------------------------------------------------------------------------------
M.S.D. & T. FUNDS, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS of M.S.D.& T. Funds,
Inc. (the "Company") for use at an Annual Meeting of Shareholders to be
held on July 24, 1998, at 1:30 P.M. Eastern Time, at the offices of
Mercantile-Safe Deposit & Trust Company, Second Floor Board Room, Two
Hopkins Plaza, Baltimore, Maryland 21201.
The undersigned hereby appoints Linda A. Durkin, Cornelia H. Kline and
Joseph J. DiDomenico, Jr., and each of them, with full power of
substitution, as proxies of the undersigned to vote at the above-stated
Annual Meeting, and at all adjournments or postponements thereof, all
shares of Common Stock representing interests in the Company's Limited
Maturity Bond Fund (the "Fund") held of record by the undersigned on June
18, 1998, the record date for the Meeting, upon the following matters AND
UPON ANY OTHER MATTER THAT MAY COME BEFORE THE MEETING, IN THEIR
DISCRETION:
(1) Election of Directors:
[_] For all nominees listed below (except as marked to the contrary
below)
[_] Withhold authority to vote for all nominees listed below INSTRUCTION:
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH HIS NAME IN THE LIST BELOW:
L.B. Disharoon D.H. Miller E.D. Miller J.R. Murphy G.R. Packard
(2) Proposal to ratify the selection of Coopers & Lybrand L.L.P. as the
Company's independent accountants for the fiscal year ending May 31,
1999:
FOR AGAINST ABSTAIN
[_] [_] [_]
(3) Proposal to approve a new Advisory Agreement between the Company and
Mercantile-Safe Deposit & Trust Company with respect to the Fund.
FOR AGAINST ABSTAIN
[_] [_] [_]
(4) In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting.
(continued, and to be signed, on other side)
<PAGE>
PROMPTLY COMPLETE AND RETURN THE
PROXY/VOTING INSTRUCTION FORM BELOW
IN THE ENVELOPE PROVIDED
Carefully fold & detach along perforation
- --------------------------------------------------------------------------------
(continued from other side)
Every properly signed proxy will be voted in the manner specified hereon and,
IN THE ABSENCE OF SPECIFICATION, WILL BE TREATED AS GRANTING AUTHORITY TO VOTE
"FOR" THE PROPOSALS.
PLEASE SIGN, DATE
AND RETURN THE PROXY
CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
Date ______________________ Date ____________________________
Signature ____________ Signature (Joint Owners) _____________
Please sign exactly as name appears hereon. When shares are
held by joint tenants, both should sign. When signing as
attorney or executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please sign
in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by
authorized person.
<PAGE>
PROXY
Carefully fold & detach along perforation
- --------------------------------------------------------------------------------
M.S.D. & T. FUNDS, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS of M.S.D.& T. Funds,
Inc. (the "Company") for use at an Annual Meeting of Shareholders to be
held on July 24, 1998, at 1:30 P.M. Eastern Time, at the offices of
Mercantile-Safe Deposit & Trust Company, Second Floor Board Room, Two
Hopkins Plaza, Baltimore, Maryland 21201.
The undersigned hereby appoints Linda A. Durkin, Cornelia H. Kline and
Joseph J. DiDomenico, Jr., and each of them, with full power of
substitution, as proxies of the undersigned to vote at the above-stated
Annual Meeting, and at all adjournments or postponements thereof, all
shares of Common Stock representing interests in the Company's Maryland Tax-
Exempt Bond Fund (the "Fund") held of record by the undersigned on June 18,
1998, the record date for the Meeting, upon the following matters AND UPON
ANY OTHER MATTER THAT MAY COME BEFORE THE MEETING, IN THEIR DISCRETION:
(1) Election of Directors:
[_] For all nominees listed below (except as marked to the contrary
below)
[_] Withhold authority to vote for all nominees listed below
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, STRIKE A LINE THROUGH HIS NAME IN THE LIST BELOW:
L.B. Disharoon D.H. Miller E.D. Miller J.R. Murphy G.R. Packard
(2) Proposal to ratify the selection of Coopers & Lybrand L.L.P. as the
Company's independent accountants for the fiscal year ending May 31,
1999:
FOR AGAINST ABSTAIN
[_] [_] [_]
(3) Proposal to approve a new Advisory Agreement between the Company and
Mercantile-Safe Deposit & Trust Company with respect to the Fund.
FOR AGAINST ABSTAIN
[_] [_] [_]
(4) In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting.
(continued, and to be signed, on other side)
<PAGE>
PROMPTLY COMPLETE AND RETURN THE
PROXY/VOTING INSTRUCTION FORM BELOW
IN THE ENVELOPE PROVIDED
Carefully fold & detach along perforation
- --------------------------------------------------------------------------------
(continued from other side)
Every properly signed proxy will be voted in the manner specified hereon and,
IN THE ABSENCE OF SPECIFICATION, WILL BE TREATED AS GRANTING AUTHORITY TO VOTE
"FOR" THE PROPOSALS.
PLEASE SIGN, DATE
AND RETURN THE PROXY
CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
Date _______________________ Date ___________________________
Signature ____________ Signature (Joint Owners) _____________
Please sign exactly as name appears hereon. When shares are
held by joint tenants, both should sign. When signing as
attorney or executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please sign
in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by
authorized person.
<PAGE>
PROXY
Carefully fold & detach along perforation
- --------------------------------------------------------------------------------
M.S.D. & T. FUNDS, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS of M.S.D.& T. Funds,
Inc. (the "Company") for use at an Annual Meeting of Shareholders to be
held on July 24, 1998, at 1:30 P.M. Eastern Time, at the offices of
Mercantile-Safe Deposit & Trust Company, Second Floor Board Room, Two
Hopkins Plaza, Baltimore, Maryland 21201.
The undersigned hereby appoints Linda A. Durkin, Cornelia H. Kline and
Joseph J. DiDomenico, Jr., and each of them, with full power of
substitution, as proxies of the undersigned to vote at the above-stated
Annual Meeting, and at all adjournments or postponements thereof, all
shares of Common Stock representing interests in the Company's Diversified
Real Estate Fund (the "Fund") held of record by the undersigned on June 18,
1998, the record date for the Meeting, upon the following matters AND UPON
ANY OTHER MATTER THAT MAY COME BEFORE THE MEETING, IN THEIR DISCRETION:
(1) Election of Directors:
[_] For all nominees listed below (except as marked to the contrary
below)
[_] Withhold authority to vote for all nominees listed below INSTRUCTION:
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH HIS NAME IN THE LIST BELOW:
L.B. Disharoon D.H. Miller E.D. Miller J.R. Murphy G.R. Packard
(2) Proposal to ratify the selection of Coopers & Lybrand L.L.P. as the
Company's independent accountants for the fiscal year ending May 31,
1999:
FOR AGAINST ABSTAIN
[_] [_] [_]
(3) Proposal to approve a new Advisory Agreement between the Company and
Mercantile-Safe Deposit & Trust Company with respect to the Fund.
FOR AGAINST ABSTAIN
[_] [_] [_]
(4) In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting.
(continued, and to be signed, on other side)
<PAGE>
PROMPTLY COMPLETE AND RETURN THE
PROXY/VOTING INSTRUCTION FORM BELOW
IN THE ENVELOPE PROVIDED
Carefully fold & detach along perforation
- --------------------------------------------------------------------------------
(continued from other side)
Every properly signed proxy will be voted in the manner specified hereon and,
IN THE ABSENCE OF SPECIFICATION, WILL BE TREATED AS GRANTING AUTHORITY TO VOTE
"FOR" THE PROPOSALS.
PLEASE SIGN, DATE
AND RETURN THE PROXY
CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
Date ___________________________ Date _______________________
Signature ____________ Signature (Joint Owners) _____________
Please sign exactly as name appears hereon. When shares are
held by joint tenants, both should sign. When signing as
attorney or executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please sign
in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by
authorized person.
<PAGE>
PROXY
Carefully fold & detach along perforation
- --------------------------------------------------------------------------------
M.S.D. & T. FUNDS, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS of M.S.D.& T. Funds,
Inc. (the "Company") for use at an Annual Meeting of Shareholders to be
held on July 24, 1998, at 1:30 P.M. Eastern Time, at the offices of
Mercantile-Safe Deposit & Trust Company, Second Floor Board Room, Two
Hopkins Plaza, Baltimore, Maryland 21201.
The undersigned hereby appoints Linda A. Durkin, Cornelia H. Kline and
Joseph J. DiDomenico, Jr., and each of them, with full power of
substitution, as proxies of the undersigned to vote at the above-stated
Annual Meeting, and at all adjournments or postponements thereof, all
shares of Common Stock representing interests in the Company's Equity
Income Fund (the "Fund") held of record by the undersigned on June 18,
1998, the record date for the Meeting, upon the following matters AND UPON
ANY OTHER MATTER THAT MAY COME BEFORE THE MEETING, IN THEIR DISCRETION:
(1) Election of Directors:
[_] For all nominees listed below (except as marked to the contrary
below)
[_] Withhold authority to vote for all nominees listed below INSTRUCTION:
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH HIS NAME IN THE LIST BELOW:
L.B. Disharoon D.H. Miller E.D. Miller J.R. Murphy G.R. Packard
(2) Proposal to ratify the selection of Coopers & Lybrand L.L.P. as the
Company's independent accountants for the fiscal year ending May 31,
1999:
FOR AGAINST ABSTAIN
[_] [_] [_]
(3) Proposal to approve a new Advisory Agreement between the Company and
Mercantile-Safe Deposit & Trust Company with respect to the Fund.
FOR AGAINST ABSTAIN
[_] [_] [_]
(4) In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting.
(continued, and to be signed, on other side)
<PAGE>
PROMPTLY COMPLETE AND RETURN THE
PROXY/VOTING INSTRUCTION FORM BELOW
IN THE ENVELOPE PROVIDED
Carefully fold & detach along perforation
- --------------------------------------------------------------------------------
(continued from other side)
Every properly signed proxy will be voted in the manner specified hereon and,
IN THE ABSENCE OF SPECIFICATION, WILL BE TREATED AS GRANTING AUTHORITY TO VOTE
"FOR" THE PROPOSALS.
PLEASE SIGN, DATE
AND RETURN THE PROXY
CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
Date ___________________________ Date _______________________
Signature ____________ Signature (Joint Owners) _____________
Please sign exactly as name appears hereon. When shares are
held by joint tenants, both should sign. When signing as
attorney or executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please sign
in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by
authorized person.
<PAGE>
PROXY
Carefully fold & detach along perforation
- --------------------------------------------------------------------------------
M.S.D. & T. FUNDS, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS of M.S.D.& T. Funds,
Inc. (the "Company") for use at an Annual Meeting of Shareholders to be
held on July 24, 1998, at 1:30 P.M. Eastern Time, at the offices of
Mercantile-Safe Deposit & Trust Company, Second Floor Board Room, Two
Hopkins Plaza, Baltimore, Maryland 21201.
The undersigned hereby appoints Linda A. Durkin, Cornelia H. Kline and
Joseph J. DiDomenico, Jr., and each of them, with full power of
substitution, as proxies of the undersigned to vote at the above-stated
Annual Meeting, and at all adjournments or postponements thereof, all
shares of Common Stock representing interests in the Company's Equity
Growth Fund (the "Fund") held of record by the undersigned on June 18,
1998, the record date for the Meeting, upon the following matters AND UPON
ANY OTHER MATTER THAT MAY COME BEFORE THE MEETING, IN THEIR DISCRETION:
(1) Election of Directors:
[_] For all nominees listed below (except as marked to the contrary
below)
[_] Withhold authority to vote for all nominees listed below INSTRUCTION:
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH HIS NAME IN THE LIST BELOW:
L.B. Disharoon D.H. Miller E.D. Miller J.R. Murphy G.R. Packard
(2) Proposal to ratify the selection of Coopers & Lybrand L.L.P. as the
Company's independent accountants for the fiscal year ending May 31,
1999:
FOR AGAINST ABSTAIN
[_] [_] [_]
(3) Proposal to approve a new Advisory Agreement between the Company and
Mercantile-Safe Deposit & Trust Company with respect to the Fund.
FOR AGAINST ABSTAIN
[_] [_] [_]
(4) In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the Meeting.
(continued, and to be signed, on other side)
<PAGE>
PROMPTLY COMPLETE AND RETURN THE
PROXY/VOTING INSTRUCTION FORM BELOW
IN THE ENVELOPE PROVIDED
Carefully fold & detach along perforation
- --------------------------------------------------------------------------------
(continued from other side)
Every properly signed proxy will be voted in the manner specified hereon and,
IN THE ABSENCE OF SPECIFICATION, WILL BE TREATED AS GRANTING AUTHORITY TO VOTE
"FOR" THE PROPOSALS.
PLEASE SIGN, DATE
AND RETURN THE PROXY
CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
Date ___________________________ Date _______________________
Signature ____________ Signature (Joint Owners) _____________
Please sign exactly as name appears hereon. When shares are
held by joint tenants, both should sign. When signing as
attorney or executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please sign
in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by
authorized person.
<PAGE>
PROXY
Carefully fold & detach along perforation
- --------------------------------------------------------------------------------
M.S.D. & T. FUNDS, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS of M.S.D.& T. Funds,
Inc. (the "Company") for use at an Annual Meeting of Shareholders to be
held on July 24, 1998, at 1:30 P.M. Eastern Time, at the offices of
Mercantile-Safe Deposit & Trust Company, Second Floor Board Room, Two
Hopkins Plaza, Baltimore, Maryland 21201.
The undersigned hereby appoints Linda A. Durkin, Cornelia H. Kline and
Joseph J. DiDomenico, Jr., and each of them, with full power of
substitution, as proxies of the undersigned to vote at the above-stated
Annual Meeting, and at all adjournments or postponements thereof, all
shares of Common Stock representing interests in the Company's Total Return
Bond Fund (the "Fund") held of record by the undersigned on June 18, 1998,
the record date for the Meeting, upon the following matters AND UPON ANY
OTHER MATTER THAT MAY COME BEFORE THE MEETING, IN THEIR DISCRETION:
(1) Election of Directors:
[_] For all nominees listed below (except as marked to the contrary
below)
[_] Withhold authority to vote for all nominees listed below INSTRUCTION:
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH HIS NAME IN THE LIST BELOW:
L.B. Disharoon D.H. Miller E.D. Miller J.R. Murphy G.R. Packard
(2) Proposal to ratify the selection of Coopers & Lybrand L.L.P. as the
Company's independent accountants for the fiscal year ending May 31, 1999:
FOR AGAINST ABSTAIN
[_] [_] [_]
(3) Proposal to approve a new Advisory Agreement between the Company and
Mercantile-Safe Deposit & Trust Company with respect to the Fund.
FOR AGAINST ABSTAIN
[_] [_] [_]
(4) In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the Meeting.
(continued, and to be signed, on other side)
<PAGE>
PROMPTLY COMPLETE AND RETURN THE
PROXY/VOTING INSTRUCTION FORM BELOW
IN THE ENVELOPE PROVIDED
Carefully fold & detach along perforation
- --------------------------------------------------------------------------------
(continued from other side)
Every properly signed proxy will be voted in the manner specified hereon and,
IN THE ABSENCE OF SPECIFICATION, WILL BE TREATED AS GRANTING AUTHORITY TO VOTE
"FOR" THE PROPOSALS.
PLEASE SIGN, DATE
AND RETURN THE PROXY
CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
Date ___________________________ Date _______________________
Signature ____________ Signature (Joint Owners) _____________
Please sign exactly as name appears hereon. When shares are
held by joint tenants, both should sign. When signing as
attorney or executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please sign
in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by
authorized person.
<PAGE>
PROXY
Carefully fold & detach along perforation
- --------------------------------------------------------------------------------
M.S.D. & T. FUNDS, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS of M.S.D.& T. Funds,
Inc. (the "Company") for use at an Annual Meeting of Shareholders to be
held on July 24, 1998, at 1:30 P.M. Eastern Time, at the offices of
Mercantile-Safe Deposit & Trust Company, Second Floor Board Room, Two
Hopkins Plaza, Baltimore, Maryland 21201.
The undersigned hereby appoints Linda A. Durkin, Cornelia H. Kline and
Joseph J. DiDomenico, Jr., and each of them, with full power of
substitution, as proxies of the undersigned to vote at the above-stated
Annual Meeting, and at all adjournments or postponements thereof, all
shares of Common Stock representing interests in the Company's National Tax-
Exempt Bond Fund (the "Fund") held of record by the undersigned on June 18,
1998, the record date for the Meeting, upon the following matters AND UPON
ANY OTHER MATTER THAT MAY COME BEFORE THE MEETING, IN THEIR DISCRETION:
(1) Election of Directors:
[_] For all nominees listed below (except as marked to the contrary
below)
[_] Withhold authority to vote for all nominees listed below
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, STRIKE A LINE THROUGH HIS NAME IN THE LIST BELOW:
L.B. Disharoon D.H. Miller E.D. Miller J.R. Murphy G.R. Packard
(2) Proposal to ratify the selection of Coopers & Lybrand L.L.P. as the
Company's independent accountants for the fiscal year ending May 31,
1999:
FOR AGAINST ABSTAIN
[_] [_] [_]
(3) Proposal to approve a new Advisory Agreement between the Company and
Mercantile-Safe Deposit & Trust Company with respect to the Fund.
FOR AGAINST ABSTAIN
[_] [_] [_]
(4) In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting.
(continued, and to be signed, on other side)
<PAGE>
PROMPTLY COMPLETE AND RETURN THE
PROXY/VOTING INSTRUCTION FORM BELOW
IN THE ENVELOPE PROVIDED
Carefully fold & detach along perforation
- --------------------------------------------------------------------------------
(continued from other side)
Every properly signed proxy will be voted in the manner specified hereon and,
IN THE ABSENCE OF SPECIFICATION, WILL BE TREATED AS GRANTING AUTHORITY TO VOTE
"FOR" THE PROPOSALS.
PLEASE SIGN, DATE
AND RETURN THE PROXY
CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
Date ___________________________ Date _______________________
Signature ____________ Signature (Joint Owners) _____________
Please sign exactly as name appears hereon. When shares are
held by joint tenants, both should sign. When signing as
attorney or executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please sign
in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by
authorized person.
<PAGE>
PROXY
Carefully fold & detach along perforation
- --------------------------------------------------------------------------------
M.S.D. & T. FUNDS, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF M.S.D.& T. Funds,
Inc. (the "Company") for use at an Annual Meeting of Shareholders to be
held on July 24, 1998, at 1:30 P.M. Eastern Time, at the offices of
Mercantile-Safe Deposit & Trust Company, Second Floor Board Room, Two
Hopkins Plaza, Baltimore, Maryland 21201.
The undersigned hereby appoints Linda A. Durkin, Cornelia H. Kline and
Joseph J. DiDomenico, Jr., and each of them, with full power of
substitution, as proxies of the undersigned to vote at the above-stated
Annual Meeting, and at all adjournments or postponements thereof, all
shares of Common Stock representing interests in the Company's Intermediate
Tax-Exempt Bond Fund (the "Fund") held of record by the undersigned on June
18, 1998, the record date for the Meeting, upon the following matters AND
UPON ANY OTHER MATTER THAT MAY COME BEFORE THE MEETING, IN THEIR
DISCRETION:
(1) Election of Directors:
[_] For all nominees listed below (except as marked to the contrary below)
[_] Withhold authority to vote for all nominees listed below INSTRUCTION:
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH HIS NAME IN THE LIST BELOW:
L.B. Disharoon D.H. Miller E.D. Miller J.R. Murphy G.R. Packard
(2) Proposal to ratify the selection of Coopers & Lybrand L.L.P. as the
Company's independent accountants for the fiscal year ending May 31,
1999:
FOR AGAINST ABSTAIN
[_] [_] [_]
(3) Proposal to approve a new Advisory Agreement between the Company and
Mercantile-Safe Deposit & Trust Company with respect to the Fund.
FOR AGAINST ABSTAIN
[_] [_] [_]
(4) In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting.
(continued, and to be signed, on other side)
<PAGE>
PROMPTLY COMPLETE AND RETURN THE
PROXY/VOTING INSTRUCTION FORM BELOW
IN THE ENVELOPE PROVIDED
Carefully fold & detach along perforation
- --------------------------------------------------------------------------------
(continued from other side)
Every properly signed proxy will be voted in the manner specified hereon and,
IN THE ABSENCE OF SPECIFICATION, WILL BE TREATED AS GRANTING AUTHORITY TO VOTE
"FOR" THE PROPOSALS.
PLEASE SIGN, DATE
AND RETURN THE PROXY
CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
Date ___________________________ Date _______________________
Signature ____________ Signature (Joint Owners) _____________
Please sign exactly as name appears hereon. When shares are
held by joint tenants, both should sign. When signing as
attorney or executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please sign
in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by
authorized person.
