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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
BT INSTITUTIONAL FUNDS
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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August 23, 1999
Dear Shareholder:
On June 4, 1999, Bankers Trust merged with Deutsche Bank A.G. As a result
of the merger, we are asking shareholders of BT Mutual Funds to approve new ad-
visory agreements. Enclosed is further information relating to these changes,
including a Questions & Answers section and proxy card(s).
Important information about the changes:
. The merger has no effect on the number of shares you own or the
value of those shares.
. The advisory fees payable under the new advisory agreements have
not increased.
. The investment objective and policies of your mutual fund invest-
ment have not changed.
In addition to the change in advisory agreements, shareholders are also be-
ing asked to approve other changes outlined in the enclosed Proxy Statement.
The Board of Trustees of your BT Mutual Fund believes that the proposals are
important and recommends that you read the enclosed materials carefully and
then vote for all proposals.
What you need to do:
. Read all enclosed materials including the Questions & Answers
section.
. Choose one of the following options to vote:
1. By Mail: Complete the enclosed proxy card and return in
postage-paid enveloped provided.
2. By Telephone: Call Toll-Free # on your proxy card.
3. By Internet: Logon to www.proxyvote.com.
4. Attend Shareholder Meeting (details enclosed).
Please note: if you own shares of more than one Fund, you will receive more
than one proxy card. Please sign and return each proxy card you receive.
Sincerely,
Daniel O. Hirsch
Secretary
BT Mutual Funds
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QUESTIONS AND ANSWERS
IMPORTANT NEWS
FOR SHAREHOLDERS OF BT INSTITUTIONAL FUNDS
Here is a brief overview of some matters affecting your Fund which require
a shareholder vote. We encourage you to read the full text of the enclosed
Proxy Statement, and to vote your shares.
Q. What has happened to require a shareholder vote?
A. On June 4, 1999, Bankers Trust became a subsidiary of Deutsche Bank
A.G. The combined entity now ranks as the fourth largest investment
manager in the world with $670-billion in assets in a full range of
active and index strategies.
To ensure that Bankers Trust, or an affiliate, may continue to serve
as investment adviser of the BT Mutual Funds, we are seeking share-
holder approval of new advisory agreements.
THE BOARD MEMBERS OF YOUR FUND RECOMMEND THAT YOU VOTE FOR THESE PROPOSALS.
Q. Why am I being asked to vote on the new advisory agreements?
A. The Investment Company Act, which regulates investment companies in
the United States such as your BT Mutual Fund, requires a shareholder
vote to approve a new advisory agreement following certain types of
business combinations. Each of the new advisory agreements became
effective immediately upon consummation of the merger and will
continue in effect only upon shareholder approval.
Q. How does the merger affect my BT Mutual Fund?
A. Your BT Mutual Fund and its respective investment objectives have not
changed as a result of the merger. You still own the same shares in
the same Fund as you did prior to the merger. Each of the new advisory
agreements contains substantially the same terms and conditions as the
agreement in effect prior to the merger, except for the dates of
execution and termination. If shareholders do not approve the new
advisory agreements, the agreements will no longer continue and the
governing Board of your Fund will take such action as they deem to be
in the best interests of the Fund, and their respective shareholders.
Q. Have the investment advisory fees remained the same?
A. Yes.
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Q. What are the benefits of the merger?
A. There are several potential positive aspects of the merger you may be
interested in. Most notably, the combined institution will be one of
the largest financial institutions in the world, as well as a leader
in a number of important categories, including asset management. The
financial strength of the combined institution coupled with the
increased breadth and depth of its resources and capabilities are
advantages the acquisition brings. Further, as a truly global
institution, the combined entity will be in a unique position to
provide coverage, services and products.
Q. How does the Board of Trustees of my BT Mutual Fund recommend that I
vote?
A. After careful consideration, the Board of Trustees of your BT Mutual
Fund recommends that you vote in favor of all the proposals on the
enclosed proxy card(s).
Q. Whom do I call for more information?
A. If you need more information, please call Shareholder Communications
Corporation, your Fund's information agent, at 1-800-732-6168.
Q. How can I vote my shares?
A. You may choose from one of the following options to vote your shares:
. By mail, with the enclosed proxy card(s) and return envelope.
. By telephone, with a toll-free call to the telephone number that
appears on your proxy card.
. Through the Internet, by using the Internet address located on
your proxy card and following the instructions on the site.
. In person at the shareholder meeting (see details enclosed in
proxy statement).
Q. Will my BT Mutual Fund pay for the proxy solicitation and legal costs
associated with this transaction?
A. No, Bankers Trust will bear these costs.
Q. What happens if I own shares in more than one BT Mutual Fund?
A. If you have more than one BT Mutual Fund in your name at the same
address, you will receive separate proxy cards for each Fund but only
one proxy statement for the account.
Please vote all issues on each proxy card that you receive. Thank you for
mailing your proxy card(s) promptly.
2
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BT INSTITUTIONAL FUNDS
Institutional Daily Assets Fund
One South Street
Baltimore, Maryland 21202
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held October 8, 1999
A Special Meeting of shareholders of BT Institutional Funds (the "Trust")
will be held at the offices of BT Alex. Brown Incorporated, One South Street,
30th Floor, Baltimore, MD 21202 on October 8, 1999 at 11:00 a.m. (the "Special
Meeting"). The Trust is an open-end management investment company, organized
under the laws of the Commonwealth of Massachusetts, that is comprised of In-
stitutional Daily Assets Fund (the "Fund") and Institutional Cash Management
Fund, Institutional Cash Reserves, Institutional Treasury Money Fund, Interna-
tional Equity Fund, Equity 500 Index Fund, Institutional Liquid Assets Fund and
Institutional Treasury Assets Fund, which are not addressed in the accompanying
Proxy Statement ("Proxy Statement").
The Special Meeting is being held to consider and vote on the following
matters for the Fund, as indicated below and more fully described under the
corresponding Proposals in the Proxy Statement, and such other matters as may
properly come before the meeting or any adjournments thereof:
PROPOSAL I: To approve or disapprove new investment advi-
sory agreements (each a "New Advisory Agree-
ment" and together the "New Advisory Agree-
ments") for the Trust:
A. To approve or disapprove a New Advisory
Agreement between the Trust and Bankers Trust
Company ("Bankers Trust") (the "New BT Advisory
Agreement").
B. To approve or disapprove a New Advisory
Agreement between the Trust and Morgan Grenfell
Inc. ("MGI" and, together with Bankers Trust,
the "Advisers") (the "New MGI Advisory Agree-
ment") to be implemented within two years of
the date of the Special Meeting upon approval
of the members of the Trust's Board of Trust-
ees, who are not "interested persons" ("Inde-
pendent Trustees") (as defined in the Invest-
ment Company Act of 1940, as amended (the
"Act")).
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C. To approve or disapprove a new sub-in-
vestment advisory agreement (the "New Sub-
advisory Agreement," which term, unless other-
wise specified, is included within the meaning
of New Advisory Agreements) among the Trust,
MGI and Bankers Trust under which Bankers Trust
may perform certain of MGI's responsibilities,
at MGI's expense, under the New MGI Advisory
Agreement with the Trust upon approval of the
Independent Trustees.
PROPOSAL II: To elect Trustees of the Trust to hold office
until their respective successors have been
duly elected and qualified or until their ear-
lier resignation or removal.
PROPOSAL III: To ratify or reject the selection of
PricewaterhouseCoopers LLP as the independent
accountants for the Fund's current fiscal year.
The appointed proxies will vote in their discretion on any other business
as may properly come before the Special Meeting or any adjournment thereof.
The New Advisory Agreements described in Proposals IA, IB and IC, respec-
tively, will contain substantially the same terms and conditions, except for
the parties and the dates of execution, effectiveness and initial term, as the
prior investment advisory agreement pursuant to which services were provided to
the Trust. In addition, the form of New Sub-advisory Agreement authorizes the
applicable investment adviser to adjust the duties, the amounts of assets to be
managed and the fees paid to the investment subadviser with and upon the ap-
proval of the Board and the Independent Trustees. As more fully discussed in
the accompanying Proxy Statement, approval of the New Advisory Agreements,
which provide for the same services to be provided at the same fees, is gener-
ally occasioned by the merger of Circle Acquisition Corporation, a wholly owned
subsidiary of Deutsche Bank A.G. ("Deutsche Bank"), with and into Bankers Trust
Corporation, the parent company of Bankers Trust. MGI is, and as a result of
this transaction, Bankers Trust became, an indirect wholly owned subsidiary of
Deutsche Bank. The New Advisory Agreement with MGI described in Proposal IB and
the New Sub-advisory Agreement with Bankers Trust described in Proposal IC will
permit Deutsche Bank, upon the approval of the Independent Trustees, to sim-
plify the organizational structure of its U.S. mutual fund operations, enhance
the efficiency of their administration and promote consistency of internal con-
trols, compliance and regulatory oversight. The deferral in implementing the
New Advisory Agreement with MGI is needed to permit Deutsche Bank a sufficient
amount of time to plan, prepare
2
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and institute the necessary arrangements for MGI to consolidate Deutsche Bank's
U.S. mutual fund operations.
The close of business on July 22, 1999 has been fixed as the record date
for the determination of the shareholders of the Fund entitled to notice of,
and to vote at, the Special Meeting. You are cordially invited to attend the
Special Meeting.
IF YOU HAVE ANY QUESTIONS CONCERNING THE PROXY STATEMENT OR THE PROCEDURES
TO BE FOLLOWED TO EXECUTE AND DELIVER A PROXY, PLEASE CONTACT SHAREHOLDER COM-
MUNICATIONS CORPORATION AT 1-800-732-6168.
This notice and related proxy material are first being mailed to sharehold-
ers on or about August 23, 1999. This proxy is being solicited on behalf of the
Board of Trustees of the Trust.
By Order of the Board of Trustees,
/s/ Daniel O. Hirsch
Daniel O. Hirsch, Secretary
New York, New York
August 23, 1999
WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING, PLEASE
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY
IN THE ENCLOSED ENVELOPE IN ORDER TO ASSURE REPRESENTATION OF YOUR
SHARES (UNLESS YOU ARE VOTING BY TELEPHONE OR THROUGH THE
INTERNET). NO POSTAGE NEED BE AFFIXED IF THE PROXY CARD IS MAILED
IN THE UNITED STATES.
3
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BT Institutional Funds
Institutional Daily Assets Fund
One South Street
Baltimore, Maryland 21202
PROXY STATEMENT FOR THE SPECIAL MEETING OF SHAREHOLDERS
October 8, 1999
This Proxy Statement ("Proxy Statement") is being furnished in connection
with the solicitation of proxies by the Board of Trustees of BT Institutional
Funds (the "Trust") with respect to the Institutional Daily Assets Fund (the
"Fund") for use at the special meeting of the Trust to be held at the offices
of BT Alex. Brown Incorporated, One South Street, 30th Floor, Baltimore, Mary-
land 21202 on October 8, 1999 at 11:00 a.m. (the "Special Meeting") and at any
adjournments thereof. This Proxy Statement and accompanying proxy card(s)
("Proxy") are expected to be mailed to shareholders on or about August 23,
1999.
The Trust is comprised of several series. The Fund is a separate series of
the Trust, along with seven other funds, which are not addressed in this Proxy
Statement.
For simplicity, actions are described in this Proxy Statement as being
taken by the Fund, although all actions are actually taken by the Trust on be-
half of the Fund.
The Special Meeting is being held to consider and vote on the following
matters for the Fund, as indicated below and described more fully under the
corresponding Proposals discussed herein, and such other matters as may prop-
erly come before the meeting or any adjournments thereof:
PROPOSAL I:
To approve or disapprove new investment advi-
sory agreements (each a "New Advisory Agree-
ment" and together the "New Advisory Agree-
ments") for the Trust:
A. To approve or disapprove a New Advisory
Agreement between the Trust and Bankers Trust
Company ("Bankers Trust") (the "New BT Advisory
Agreement").
B. To approve or disapprove a New Advisory
Agreement between the Trust and Morgan Grenfell
Inc. ("MGI" and, together with Bankers
<PAGE>
Trust, the "Advisers") (the "New MGI Advisory
Agreement") to be implemented within two years
of the date of the Special Meeting upon ap-
proval of the members of the Trust's Board of
Trustees, who are not "interested persons"
thereof ("Independent Trustees") (as defined in
the Investment Company Act of 1940, as amended
(the "Act")).
C. To approve or disapprove a new sub-
investment advisory agreement (the "New Sub-ad-
visory Agreement," which term, unless otherwise
specified, is included within the meaning of
the New Advisory Agreements) among the Trust,
MGI and Bankers Trust under which Bankers Trust
may perform certain of MGI's responsibilities,
at MGI's expense, under the New MGI Advisory
Agreement with the Trust upon approval of the
Independent Trustees.
PROPOSAL II: To elect Trustees of the Trust to hold office
until their respective successors have been
duly elected and qualified or until their ear-
lier resignation or removal.
PROPOSAL III: To ratify or reject the selection of
PricewaterhouseCoopers LLP as the independent
accountants for the Fund for the current fiscal
year.
The appointed proxies will vote on any other business as may properly come
before the Special Meeting or any adjournment thereof.
Among the proposals, the shareholders of the Trust are to consider the
election of Charles P. Biggar, S. Leland Dill, Martin J. Gruber, Richard Hale,
Richard J. Herring, Bruce E. Langton, Philip Saunders, Jr., and Harry Van Ben-
schoten (the "Trustee Nominees") as Trustees of the Trust. Dr. Herring and
Messrs. Biggar and Langton currently serve on the Board of the Trust (the
"Board") and Dr. Gruber and Messrs. Dill, Saunders and Van Benschoten serve as
Trustees of various other investment companies within the Bankers Trust family
of funds. To ensure adherence by the Trust to Section 15(f) of the Act, only
Mr. Hale will be an "interested person" (within the meaning of Section 2(a)(19)
of the Act) of the Fund following the Merger (as defined herein) and the ap-
proval of the New Advisory Agreements.
2
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Notice of the Special Meeting and a Proxy accompany this Proxy Statement.
Proxy solicitations will be made primarily by mail, but solicitations may also
be made by telephone, telegraph, through the Internet or in person by officers
or agents of the Fund. All costs of solicitation, including (a) printing and
mailing of this Proxy Statement and accompanying material, (b) the reimburse-
ment of brokerage firms and others for their expenses in forwarding solicita-
tion material to the beneficial owners of the Fund's shares, (c) payment to
Shareholder Communications Corporation for its services in soliciting proxies
and (d) supplementary solicitations to submit Proxies, will be borne by Bankers
Trust. If the Fund records votes by telephone or through the Internet, it will
use procedures designed to authenticate shareholders' identities, to allow
shareholders to authorize the voting of their shares in accordance with their
instructions, and to confirm that their instructions have been properly record-
ed. Proxies voted by telephone or through the Internet may be revoked at any
time before they are voted in the same manner that proxies voted by mail may be
revoked.
The Annual Report of the Fund containing audited financial statements for
the fiscal year ended December 31, 1998, as well as the Semi-Annual Report of
the Fund (each a "Report"), have previously been furnished to the Fund's share-
holders. An additional copy of each Report will be furnished without charge
upon request by writing to the Trust at the address set forth on the cover of
this Proxy Statement or by calling 1-800-368-4031.
If the enclosed Proxy is properly executed and returned in time to be voted
at the Special Meeting, the shares represented thereby will be voted in accor-
dance with the instructions marked on the Proxy. Shares of the Fund are enti-
tled to one vote each at the Special Meeting and fractional shares are entitled
to proportionate shares of one vote. If no instructions are marked on the Proxy
with respect to a specific Proposal, the Proxy will be voted "FOR" the approval
of such Proposal and in accordance with the judgment of the persons appointed
as proxies with respect to any other matter that may properly come before the
Special Meeting. Any shareholder giving a Proxy has the right to attend the
Special Meeting to vote his/her shares in person (thereby revoking any prior
Proxy) and also the right to revoke the Proxy at any time by written notice re-
ceived by the Fund prior to the time it is voted.
Bankers Trust will vote any shares in accounts as to which it has invest-
ment authority, and shares in any other accounts as to which Bankers Trust is
the agent of record, which are not otherwise represented in person or by proxy
at the Special Meeting. Bankers Trust will vote shares of the Fund over which
it has investment discretion in accord with its fiduciary and other legal obli-
gations, and in its discretion may consult with the beneficial owners or other
fiduciaries. Bankers Trust will vote shares of the Fund for which it is the
owner of record but does not have investment discretion, with respect to each
Proposal on which shareholders
3
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of the Fund are entitled to vote, which are not otherwise represented in person
or by proxy at the Special Meeting. These shares will be voted by Bankers Trust
for, against, or abstaining, in the same proportion as the votes cast by hold-
ers of all shares in the Fund otherwise represented at the Special Meeting.
This practice is commonly referred to as "mirror" or "echo" voting.
In the event that a quorum is not present at the Special Meeting, or if a
quorum is present but sufficient votes to approve a Proposal are not received,
the persons named as proxies may propose one or more adjournments of the Spe-
cial Meeting to permit further solicitation of Proxies with respect to the Pro-
posal. In determining whether to adjourn the Special Meeting, the following
factors may be considered: the nature of the proposals that are the subject of
the Special Meeting, the percentage of votes actually cast, the percentage of
negative votes actually cast, the nature of any further solicitation and the
information to be provided to shareholders with respect to the reasons for the
solicitation. Any adjournment will require the affirmative vote of a majority
of those shares represented at the Special Meeting in person or by Proxy. The
persons named as proxies will vote those Proxies that they are entitled to vote
"FOR" any Proposal in favor of an adjournment and will vote those Proxies re-
quired to be voted "AGAINST" any such Proposal against any adjournment. A
shareholder vote may be taken on one or more of the Proposals in the Proxy
Statement prior to any adjournment if sufficient votes have been received and
it is otherwise appropriate. A quorum of shareholders is constituted by the
presence in person or by proxy of the holders of a majority of the outstanding
shares of the Trust or Fund (as applicable) entitled to vote at the Special
Meeting. For purposes of determining the presence of a quorum for transacting
business at the Special Meeting, abstentions and broker "non-votes" (that is,
proxies from brokers or nominees indicating that these persons have not re-
ceived instructions from the beneficial owner 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 but
which have not been voted. (See "Vote Required" for a further discussion of ab-
stentions and broker non-votes.)
Shareholders of record at the close of business on July 22, 1999 (the "Rec-
ord Date") are entitled to notice of, and to vote at, the Special Meeting. As
of the Record Date, 6,875,757,455 shares of the Fund were issued and outstand-
ing.
In order that your shares may be represented, you are requested to (unless
you are voting by telephone or through the Internet):
. indicate your instructions on the Proxy;
. date and sign the Proxy; and
. mail the Proxy promptly in the enclosed envelope.
4
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Beneficial Ownership of Shares of the Fund
Annex I attached hereto sets forth information as of the Record Date re-
garding the beneficial ownership of the Fund's shares by (i) the only persons
known by the Fund to beneficially own more than five percent of the outstand-
ing shares of the Fund, (ii) the Trustees and Trustee Nominees, (iii) the ex-
ecutive officers of the Fund, and (iv) the Trustees and executive officers of
the Fund as a group. The number of shares beneficially owned by each Trustee,
Trustee Nominee or executive officer is determined under rules of the Securi-
ties and Exchange Commission (the "Commission"), and the information is not
necessarily indicative of beneficial ownership for any other purpose. Under
these rules, beneficial ownership includes any shares as to which the individ-
ual has the sole or shared voting power or investment power and also any
shares which the individual has the right to acquire within 60 days of the
Record Date through the exercise of any stock option or other right. Unless
otherwise indicated, each person has sole investment and voting power (or
shares this power with his or her spouse) with respect to the shares set forth
in Annex I. The inclusion herein of any shares deemed beneficially owned does
not constitute an admission of beneficial ownership of the shares.
Collectively, the Trustees and officers of the Trust own less than 1% of
the Fund's outstanding shares.
Background
The Fund. As indicated earlier, the Fund is a separate series of the
Trust. Bankers Trust, a banking corporation organized under the laws of the
State of New York, located at 130 Liberty Street (One Bankers Trust Plaza),
New York, New York 10006, serves as the investment adviser and custodian of
the Fund. Bankers Trust is a wholly-owned subsidiary of Bankers Trust Corpora-
tion ("BT Corporation"), located at 130 Liberty Street (One Bankers Trust Pla-
za), New York, New York 10006, a registered bank holding company organized un-
der the laws of the State of New York. As discussed later in this Proxy State-
ment, as a result of the Merger (as defined herein), BT Corporation became a
wholly owned subsidiary of Deutsche Bank A.G. ("Deutsche Bank"), located at 31
West 52 Street, New York, NY 10019. ICC Distributors, Inc., located at Two
Portland Square, Portland, Maine 04101 serves as the principal underwriter of
the Fund. ICC Distributors, Inc. is not affiliated with Bankers Trust,
Deutsche Bank or any of their affiliates.
5
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PROPOSALS IA, IB AND IC
APPROVAL OF NEW ADVISORY AGREEMENTS
The New Advisory Agreements will contain substantially the same terms and
conditions, except for the parties and the dates of execution, effectiveness
and initial term, as the prior investment advisory agreement pursuant to which
services were provided to the Fund. In addition, the form of New Sub-advisory
Agreement authorizes the applicable investment adviser to adjust the duties,
the amounts of assets to be managed and the fees paid to the applicable in-
vestment subadviser with and upon the approval of the Board and of the Inde-
pendent Trustees. As more fully discussed below, approval of the New Advisory
Agreements, which provides for the same services to be provided at the same
fees, is generally occasioned by the Merger (as defined herein) pursuant to
which Bankers Trust became an indirect subsidiary of Deutsche Bank. The New
MGI Advisory Agreement described in Proposal IB and the New Sub-advisory
Agreement with Bankers Trust described in Proposal IC will permit Deutsche
Bank, upon the approval of the Independent Trustees, to simplify the organiza-
tional structure of its U.S. mutual fund operations, enhance the efficiency of
their administration and promote consistency of internal controls, compliance
and regulatory oversight. The deferral in implementing the New MGI Advisory
Agreement is needed to permit Deutsche Bank a sufficient amount of time to
plan, prepare and institute the necessary arrangements for MGI to consolidate
Deutsche Bank's U.S. mutual fund operations.
The Prior Advisory Agreement
The Prior Advisory Agreement. Prior to June 4, 1999, Bankers Trust served
as investment adviser to the Fund (as discussed earlier) pursuant to an in-
vestment advisory agreement between Bankers Trust and the Fund (the "Prior Ad-
visory Agreement"). The Prior Advisory Agreement was initially approved by the
Board, including a majority of the Independent Trustees.
The date of the Prior Advisory Agreement was August 6, 1996. The Prior Ad-
visory Agreement was most recently approved by the Board on March 8, 1999. The
advisory fee rate is 0.10%. The amount paid by the Trust for services rendered
to the Fund pursuant to the Prior Advisory Agreement was $4,260,363.00./1/
The Merger. On November 30, 1998, BT Corporation, Deutsche Bank and Circle
Acquisition Corporation entered into an Agreement and Plan of Merger (the
"Merger Agreement"). Pursuant to the terms of the Merger Agreement, Circle Ac-
quisition Corporation, a wholly owned New York subsidiary of Deutsche Bank,
merged with and into BT Corporation on June 4, 1999, with BT Corpora-
- -----------
/1/ Pursuant to an Expense Limitation Agreement between Bankers Trust and
the Trust, the total fund operating expenses for the Fund are capped for the
current fiscal year. The fee rate and fee shown do not reflect the cap.
6
<PAGE>
tion continuing as the surviving entity (the "Merger"). Under the terms of the
Merger, each outstanding share of BT Corporation common stock was converted
into the right to receive $93 in cash, without interest. Since the Merger,
BT Corporation, along with its affiliates, has continued to offer the range of
financial products and services, including investment advisory services, that
it offered prior to the Merger.
As a result of the Merger, BT Corporation became a wholly-owned subsidiary
of Deutsche Bank. Deutsche Bank is a banking company with limited liability
organized under the laws of the Federal Republic of Germany. Deutsche Bank is
the parent company of a group consisting of banks, capital markets companies,
fund management companies, mortgage banks, a property finance company, in-
stallment financing and leasing companies, insurance companies, research and
consultancy companies and other domestic and foreign companies (the "Deutsche
Bank Group"). At March 31, 1999, the Deutsche Bank Group had total assets of
US $727 billion. The Deutsche Bank Group's capital and reserves at March 31,
1999, were US $19.6 billion.
Impact of the Merger on the Prior Advisory Agreement. Section 15(a) of the
Act provides, in pertinent part, that "[i]t shall be unlawful for any person
to serve or act as investment adviser of a registered investment company, ex-
cept pursuant to a written contract, which contract, whether with such regis-
tered company or with an investment adviser of such registered company, has
been approved by the vote of a majority of the outstanding voting securities
of such registered company. . . ." Section 15(a)(4) of the Act further re-
quires that such written contract provide for automatic termination in the
event of its assignment. Section 2(a)(4) of the Act defines "assignment" to
include any direct or indirect transfer of a contract by the assignor.
While it may be argued otherwise, consummation of the Merger may have re-
sulted in an "assignment" of the Prior Advisory Agreement within the meaning
of the Act, terminating the agreement according to its terms and the Act as of
June 4, 1999. Specifically, as Bankers Trust is a wholly owned subsidiary of
BT Corporation, the merger of Circle Acquisition Corporation with and into BT
Corporation could be deemed to have resulted in an "assignment" of the Prior
Advisory Agreement with Bankers Trust.
On May 25, 1999, Bankers Trust was granted an exemptive order (the
"Exemptive Order") by the Commission permitting implementation, without ob-
taining prior shareholder approval, of the New BT Advisory Agreement during an
interim period commencing on the date of the closing of the Merger and contin-
uing, for a period of up to 150 days, through the date on which the New BT Ad-
visory Agreement is approved or disapproved by the shareholders of the Fund
(the "Interim Period"). Under the terms of the Exemptive Order, Bankers Trust
was allowed to receive advisory fees during the Interim Period pursuant to
7
<PAGE>
the New BT Advisory Agreement, provided that these fees would be held in es-
crow pending shareholder approval of the New BT Advisory Agreement. In accor-
dance with the Exemptive Order, the advisory fees charged to the Fund and paid
to Bankers Trust under the New BT Advisory Agreement have been held in an in-
terest-bearing escrow account and the Trust expects to continue to deposit
these fees in such account until approval of the New BT Advisory Agreement by
the shareholders of the Fund has been obtained. If the New BT Advisory Agree-
ment is not approved by the shareholders by the expiration of the Interim Pe-
riod, the fees held in escrow will be remitted to the Fund. As of June 30,
1999, the amount in escrow totaled $609,666.96.
The shareholders of the Fund are not being asked to approve or disapprove
the Merger or the Merger Agreement; rather, they are being asked under these
Proposals to approve and continue the New BT Advisory Agreement and to approve
the New Advisory Agreements for the Fund. Other than the parties and the dates
of execution, effectiveness, and initial term of the agreement, the New Advi-
sory Agreements will contain substantially the same terms and conditions as
the Prior Advisory Agreement. In addition, the form of New Sub-advisory Agree-
ment authorizes the applicable investment adviser to adjust the duties, the
amounts of assets to be managed and the fees paid to the investment subadviser
with and upon the approval of the Board and the Independent Trustees. The ad-
visory fee rate charged to the Trust under the Prior Advisory Agreement has
continued to apply under the New BT Advisory Agreement and would continue to
apply under the New MGI Advisory Agreement. MGI, and not the Trust, would be
solely responsible for paying the sub-advisory fees, which may vary from time
to time as approved by the Independent Trustees. The sub- advisory fees would
be paid by MGI directly to the subadviser. In addition, the Advisers have ad-
vised the Fund that it can expect to continue to receive the same level and
quality of services under the New BT Advisory Agreement as it received under
the Prior Advisory Agreement. The Advisers have represented to the Board that
in the event of any material change in the investment management personnel of
the Advisers responsible for providing services to the Fund, the Advisers will
apprise and consult with the Board to ensure that the Board, including a ma-
jority of the Board's Independent Trustees, is satisfied that the services
provided by the Advisers will not be diminished in scope and quality.
The New Advisory Agreements
The New Advisory Agreements. The form of the New Advisory and Sub-advisory
Agreement is attached to this Proxy Statement as Exhibit A. If shareholders
approve the New Advisory Agreements, each of the agreements will remain in ef-
fect for an initial term of two years from its effective date, and may be re-
newed annually thereafter by specific approval of the Board or by the share-
holders of the Fund, provided that they are also approved by a majority of the
Independent Trustees. The terms and conditions of the New Advisory Agreements,
8
<PAGE>
other than the parties and the dates of execution, effectiveness and initial
term, are substantially the same as those of the Prior Advisory Agreement. In
addition, the form of the New Sub-advisory Agreement authorizes the applicable
investment adviser to adjust the duties, the amount of assets to be managed
and the fees paid to the investment subadviser with and upon approval of the
Board and the Independent Trustees. The New BT Advisory Agreement became ef-
fective as of June 4, 1999, the date of the consummation of the Merger.
If the New MGI Advisory Agreement and/or the New Sub-advisory Agreement is
approved, Bankers Trust will continue to perform its advisory duties under the
New BT Advisory Agreement until the New MGI Advisory Agreement and/or the New
Sub-advisory Agreement, as applicable, is implemented. MGI, as Adviser, and
Bankers Trust, as subadviser, would perform its respective advisory duties and
be paid its respective advisory fees only upon implementation of the applica-
ble New Advisory Agreement.
Under the terms of the New Advisory Agreements, as under the Prior Advi-
sory Agreement, each of the Advisers agrees to furnish the Fund with invest-
ment advisory and other services in connection with a continuous investment
program for the Fund, including investment research and management with re-
spect to all securities, investments, cash and cash equivalents in the portfo-
lios. Subject to the supervision and control of the Board, each of the Advis-
ers agrees to (a) conform to all applicable rules and regulations of the Com-
mission, including all applicable provisions of the Securities Act of 1933, as
amended (the "1933 Act"), the Securities Exchange Act of 1934 (the "Exchange
Act"), the Act and the Investment Advisers Act of 1940, as amended (the "Ad-
visers Act"), and will conduct its activities under the New Advisory Agree-
ments in accordance with applicable regulations of the Board of Governors of
the Federal Reserve System pertaining to the investment advisory activities of
bank holding companies and their subsidiaries, (b) provide the services ren-
dered by it in accordance with the Fund's investment objectives and policies
as stated in the Prospectus and Statement of Additional Information of the
Fund, as from time to time in effect, and the Fund's then current registration
statement on Form N-1A as filed with the Commission and the then current of-
fering Memorandum if the Fund is not registered under the 1933 Act, (c) place
orders pursuant to its investment determinations for the Fund either directly
with the issuer or with any broker or dealer selected by it, (d) determine
from time to time what securities or other investments will be purchased, sold
or retained by the Fund and (e) maintain books and records with respect to the
securities transactions of the Fund and render to the Board such periodic and
special reports as they may request.
The Advisory Fee. The investment advisory fee rate charged to the Trust
under the New BT Advisory Agreement and the New MGI Advisory Agreement is the
same as the investment advisory fee rate charged under the Prior Advisory
Agreement. As noted above, the investment advisory fee pay-
9
<PAGE>
able under the New Sub-advisory Agreement would be paid by MGI, not the Trust,
and may vary from time to time, subject to approval of the Board, including a
majority of the Independent Trustees.
Bankers Trust is paid a fee under the New BT Advisory Agreement for its
services, calculated daily and paid monthly, equal, on an annual basis, to
0.10% of the Fund's average daily net assets.
Generally. If approved, the New Advisory Agreements, as applicable, will
remain in effect for an initial term of two years (unless sooner terminated),
and shall remain in effect from year to year thereafter if approved annually
(1) by the Board or by the holders of a majority of the Fund's outstanding
voting securities and (2) by a majority of the Independent Trustees who are
not parties to such contract or agreement. Like the Prior Advisory Agreement,
the New Advisory Agreements will terminate upon assignment by any party and
are terminable, without penalty, on 60 days' written notice by the Board or by
a "majority" vote of the shareholders of the Fund (as defined in the Act) or
upon 60 days' written notice by the applicable Adviser.
The services of the Advisers are not deemed to be exclusive and nothing in
the New Advisory Agreements prevents them or their affiliates from providing
similar services to other investment companies and other clients (whether or
not their investment objectives and policies are similar to those of the Fund)
or from engaging in other activities. In addition, the Advisers are obligated
to pay expenses associated with providing the services contemplated by the New
Advisory Agreements. The Trust bears certain other expenses including the fees
of the Board. The Trust also pays any extraordinary expenses incurred.
Under the New Advisory Agreements, each of the Advisers will exercise its
best judgment in rendering its advisory services. The Advisers shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Trust or the Fund in connection with the matters to which the New Advisory
Agreements relate, provided that nothing therein shall be deemed to protect or
purport to protect the Advisers against any liability to the Trust or the Fund
or to its shareholders to which the Advisers could otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence on their part in
the performance of their duties or by reason of the Advisers' reckless disre-
gard of their obligations and duties under the New Advisory Agreements.
The Advisers
Bankers Trust. Bankers Trust is the principal banking subsidiary of BT
Corporation. Bankers Trust is a bank and, therefore, not required to register
as an investment adviser under the Advisers Act. Bankers Trust provides a
broad range
10
<PAGE>
of commercial banking and financial services, including originating loans and
other forms of credit, accepting deposits and arranging financings. Bankers
Trust also engages in trading currencies, securities, derivatives and commodi-
ties. In addition to providing investment advisory services to the Fund, Bank-
ers Trust serves as investment adviser to 31 other investment companies and in-
vestment subadviser to 34 other investment companies. (See Annex II for a list
of those investment companies that Bankers Trust advises that have investment
objectives similar to those of the Fund, together with information regarding
the fees charged to those companies.) As of March 31, 1999, Bankers Trust had
over $313 billion of assets under management.
The names, businesses addresses and principal occupations of the current
directors and chief executive officer of Bankers Trust are set forth below.
<TABLE>
<CAPTION>
Name and Address Principal Occupation
- -------------------------------------------------------------------
<S> <C>
Josef Ackermann Chairman of the Board, Chief Executive
Deutsche Bank A.G. Officer and President, Bankers Trust
Taunusanlage 12 Company; Member, Board of Managing
D-60262 Frankfurt am Main Directors, Deutsche Bank A.G.
Federal Republic of Germany
Hans Angermueller Shearman & Sterling, of counsel
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
George B. Beitzel Director, Computer Task Group, Inc.;
29 King Street Director, Phillips Petroleum Company;
Chappaqua, NY 10514-3432 Director, TIG Holdings Inc.
William R. Howell Chairman Emeritus, J.C. Penney
J.C. Penney Company, Inc. Company, Inc.; Director, Exxon
P.O. Box 10001 Corporation; Director, Halliburton
Dallas, TX 75301-1109 Company; Director, National
Organization on Disability; Director,
National Retail Federation; Director
and Chairman, Southern Methodist
University Board of Trustees;
Director, Warner-Lambert Company;
Director, The Williams Companies, Inc.
Hermann-Josef Lamberti Member, Board of Managing Directors,
Deutsche Bank A.G. Deutsche Bank A.G.
Taunusanlage 12
D-60262 Frankfurt am Main
Federal Republic of Germany
</TABLE>
11
<PAGE>
<TABLE>
<S> <C>
John A. Ross Regional Chief Executive Officer,
Deutsche Bank A.G. Deutsche Bank Americas Holding Corp.
31 West 52nd Street
New York, NY 10019
Ronaldo H. Schmitz Member, Board of Managing Directors,
Deutsche Bank A.G. Deutsche Bank A.G.
Taunusanlage 12
D-60262 Frankfurt am Main
Federal Republic of Germany
</TABLE>
In addition to serving as investment adviser to the Fund, Bankers Trust
also serves as administrator, transfer agent and custodian of the Fund. These
services will continue to be provided by Bankers Trust after approval of the
New Advisory Agreements. The Trust paid fees to Bankers Trust in the amount of
$258,600 for these services for the most recently completed fiscal year.
MGI. MGI is a corporation organized under the laws of the State of Dela-
ware and is a registered investment adviser under the Advisers Act. It is lo-
cated at 885 Third Avenue, 32nd Floor, New York, NY 10022. MGI provides a full
range of investment advisory services to institutional clients. MGI serves as
investment adviser to ten other investment companies and is subadviser to five
other investment companies. MGI is a subsidiary of Morgan Grenfell Asset Man-
agement Ltd. ("MGAM"), located at 20 Finsbury Circus, London, England, a
wholly owned subsidiary of Deutsche Morgan Grenfell Group PLC, located at
Great Winchester Street, London, England, an investment holding company which
is, in turn, a wholly owned subsidiary of Deutsche Bank. MGAM currently man-
ages approximately $16.5 billion for a wide range of pension, corporate, in-
surance, local authority, government and private clients worldwide. (See Annex
II for a list of those investment companies that MGI advises that have invest-
ment objectives similar to those of the Fund, together with information re-
garding the fees charged to those companies.)
The names, business addresses and principal occupations of the current di-
rectors and chief executive officer of MGI are set forth below. Except as oth-
erwise indicated, the business address of the individuals named below is 885
Third Avenue, 32nd Floor, New York, NY 10022 and their positions at MGI con-
stitute their principal occupation.
<TABLE>
<CAPTION>
Name and Address Principal Occupation
- ------------------------------------------------------------
<S> <C>
Richard Marin President and Director, Morgan
280 Park Avenue Grenfell Inc.; Managing Director,
New York, NY 10017 Bankers Trust Company
David Westover Baldt Executive Vice President and Director,
Morgan Grenfell Inc.
</TABLE>
12
<PAGE>
<TABLE>
<S> <C>
Joan A. Binstock Chief Operating Officer, Secretary,
Treasurer and Director, Morgan
Grenfell Inc.
Audrey Mary Theresa Jones Executive Vice President, Portfolio
Manager and Director, Morgan Grenfell
Inc.
Robert H. Smith Chairman and Director, Morgan Grenfell
Inc.; Chief Executive Officer, Morgan
Grenfell Asset Management; Chairman
and Chief Executive Officer, Morgan
Grenfell Development Capital
Steven Schneider Managing Director, Bankers Trust
280 Park Avenue Company
New York, NY 10017
</TABLE>
Section 15(f) of the Act
Section 15(f) of the Act provides that when a change of control of an in-
vestment adviser to an investment company occurs, the investment adviser or any
of its affiliated persons may receive an amount or benefit in connection there-
with as long as two conditions are satisfied.
First, no "unfair burden" may be imposed on the investment company as a re-
sult of the transaction relating to the change of control, or any express or
implied terms, conditions or understandings applicable thereto. As defined in
the Act, the term "unfair burden" includes any arrangement during the two (2)
year period after the change in control whereby the investment adviser (or
predecessor or successor adviser), or any "interested person" (as defined in
the Act) of such adviser, receives or is entitled to receive any compensation,
directly or indirectly, from the investment company or its security holders
(other than fees for bona fide investment advisory or other services), or from
any person in connection with the purchase or sale of other property to, or on
behalf of the investment company (other than fees for bona fide brokerage and
principal underwriting services). The Advisers have advised the Board that
there are no circumstances arising from the Merger that might result in an "un-
fair burden" (within the meaning of section 15(f) of the Act) being imposed on
the Trust. After conducting its reviews of the Advisers and of Bankers Trust's
performance, and after reviewing materials specifically provided by Bankers
Trust as a result of the termination of the Prior Advisory Agreement and its
request that the Board approve the New Advisory Agreements, the Board was sat-
isfied that it had received and appropriately considered the relevant factors
and, after consultation with counsel, the Board determined to approve the New
Advisory Agreements.
The second condition is that, during the three (3) year period immediately
following the Merger, at least 75% of the members of the Board must not be "in-
terested persons" of the Advisers within the meaning of the Act. All current
13
<PAGE>
members of the Board are not, and have continued not to be since the Merger,
"interested persons" of the Advisers.
Additional Information
On March 11, 1999, Bankers Trust announced that it had reached an agreement
with the United States Attorney's Office in the Southern District of New York
to resolve an investigation concerning inappropriate transfers of unclaimed
funds and related record-keeping problems that occurred between 1994 and early
1996. Bankers Trust pleaded guilty to misstating entries in the bank's books
and records and agreed to pay a $63.5 million fine to state and federal author-
ities. On July 26, 1999, the federal criminal proceedings were concluded with
Bankers Trust's formal sentencing. The events leading up to the guilty pleas
did not arise out of the investment advisory or mutual fund management activi-
ties of Bankers Trust or its affiliates.
As a result of the plea, absent an order from the Commission, Bankers Trust
would not be able to continue to provide investment advisory services to the
Fund. The Commission has granted Bankers Trust a temporary order under Section
9(c) of the Act to permit Bankers Trust and its affiliates to continue to pro-
vide investment advisory services to registered investment companies, and Bank-
ers Trust, pursuant to Section 9(c) of the Act, has filed an application for a
permanent order. On May 7, 1999, the Commission extended the temporary order
under Section 9(c) of the Act until the Commission takes final action on the
application for a permanent order or, if earlier, November 8, 1999. However,
there is no assurance that the Commission will grant a permanent order. If the
Commission refuses to grant a permanent order, shareholders will receive sup-
plemental proxy materials requesting approval to release any amounts held in
escrow up to the time of the refusal and such other action as deemed appropri-
ate by the Board.
Recommendation of the Board
At a meeting of the Board held on March 8, 1999 called for the purpose of,
among other things, voting on approval of the New BT Advisory Agreement, the
Board, including the Independent Trustees, unanimously approved the New BT Ad-
visory Agreement. In reaching this conclusion, the Board obtained from BT Cor-
poration, Deutsche Bank and Bankers Trust such information as they deemed rea-
sonably necessary to approve Bankers Trust as investment adviser to the Trust.
Additionally, the Board considered a number of factors, including, among other
things, the continuity of the management of the Trust after the Merger; the na-
ture, scope and quality of services that Bankers Trust would likely provide to
the Fund; the quality of the personnel of Bankers Trust; Bankers Trust's com-
mitment to continue to provide these services in the future; the maintenance of
the identical advisory fee rates; and the fact that the New BT Advisory Agree-
ment con-
14
<PAGE>
tains substantially the same terms and conditions as the Prior Advisory Agree-
ment. Based on the factors discussed above and others, the Board determined
that the New BT Advisory Agreement is fair and reasonable and in the best in-
terest of the Fund and its shareholders.
At meetings of the Board held on July 15 and July 27, 1999 called for the
purpose of, among other things, discussing and voting on approval of the New
MGI Advisory Agreement and the New Sub-advisory Agreement, the Board obtained
from Deutsche Bank and MGI such information as it deemed reasonably necessary
to approve MGI as investment adviser to the Fund. Representatives of Deutsche
Bank and MGI made detailed presentations at the July 15th meeting with respect
to, among other factors, the organizational structure, assets under management,
asset management services, financial condition and business plan of MGI. The
Board considered the same factors described above for the New BT Advisory
Agreement with regard to the New MGI Advisory Agreement and the New Sub-advi-
sory Agreement. The Board also considered a number of other factors, including
the capacity of MGI to perform its duties under the New Advisory Agreements;
the high degree of continuity of investment management personnel expected to be
available to the Fund because most of the personnel of Bankers Trust who pro-
vided services under the Prior Advisory Agreement will be employed by MGI; the
financial standings of Deutsche Bank and MGI; the benefits to the Fund and the
Trust from technological advances being instituted by Deutsche Bank on a world-
wide basis; the experience and expertise of MGI as an investment adviser, as
reflected in its amount of assets under management, and the new organizational
structure proposed to be created as a component of the Merger and the benefits
that may accrue to the shareholders as a result thereof. With respect to the
last factor, the Board considered that the proposed organizational structure
may simplify the organizational structure of Deutsche Bank's U.S. mutual fund
operations, enhance the efficiency of their administration and promote consis-
tency of internal controls, compliance and regulatory oversight. Additionally,
the eventual implementation of the New MGI Advisory Agreement will provide the
Fund and the Trust with an investment adviser registered under the Advisers
Act.
The Board was apprised that the deferral in implementing the New MGI Advi-
sory Agreement is needed to permit Deutsche Bank a sufficient amount of time to
plan, prepare and institute the necessary arrangements for MGI to consolidate
Deutsche Bank's U.S. mutual fund operations. The Advisers also emphasized to
the Board that the New MGI Advisory Agreement and the New Sub-advisory Agree-
ment would be implemented only upon the approval of the Independent Trustees
based on information they then deemed adequate and necessary to consider these
arrangements. At the July 27th meeting of the Board, a majority of the Board,
including a majority of the Independent Trustees, approved the New MGI Advisory
Agreement and the New Sub-advisory Agreement.
15
<PAGE>
Based on the factors discussed above and others, the Board determined that
the New MGI Advisory Agreement and the New Sub-Advisory Agreement are fair and
reasonable and in the best interest of the shareholders.
In addition, at meetings held on March 24 and April 21, 1999 the Board, in-
cluding the Independent Trustees, also were apprised of the guilty pleas dis-
cussed above and the exemptive relief sought by Bankers Trust.
Therefore, after careful consideration, the Board, including the Indepen-
dent Trustees, recommends that the shareholders of the Fund vote "FOR" the ap-
proval of the New Advisory Agreements as set forth in these Proposals.
If the New BT Advisory Agreement is approved by the shareholders, it will
continue in effect as described above. If the New BT Advisory Agreement is not
approved by the shareholders, the advisory fees held in escrow with respect to
the New BT Advisory Agreement will be paid over to the Trust. In such event,
the Board will consider what other action is appropriate based upon the inter-
ests of the shareholders. If the New MGI Advisory Agreement and/or the New Sub-
advisory Agreement are not approved by the shareholders, the New BT Advisory
Agreement, if it has been approved by the shareholders, will continue in effect
in accordance with its terms while the Board considers whether and the extent
to which other action is appropriate based upon the interests of the sharehold-
ers.
16
<PAGE>
PROPOSAL II
ELECTION OF BOARD OF TRUSTEES OF THE TRUST
Trustees constituting the entire Board are to be elected at the Special
Meeting to serve until their successors have been duly elected and qualified or
until their earlier resignation or removal. The Trustee Nominees were recently
selected by the Independent Trustees and nominated by the full Board at a meet-
ing held on July 27, 1999. The names and ages of the Trustee Nominees, their
principal occupations during the past five years and certain of their other af-
filiations are provided below. Of the Trustee Nominees, Charles P. Biggar,
Richard J. Herring and Bruce E. Langton are currently Trustees of the Trust. No
Trustee or Trustee Nominee of the Trust serves or will serve as an officer of
the Trust. Each of the Trustee Nominees has agreed to serve if elected at the
Special Meeting. It is the intention of the persons designated as proxies in
the Proxy, unless otherwise directed therein, to vote at the Special Meeting
for the election of the Trustee Nominees named below as the entire Board of the
Trust. If any Trustee Nominee is unable or unavailable to serve, the persons
named in the Proxies will vote the Proxies for such other person as the Board
may recommend.
The following table sets forth the name, age, position with the Trust, and
principal occupation of each Trustee Nominee:
TRUSTEE NOMINEES
<TABLE>
<CAPTION>
Position with Principal Occupations
Name and Age Trust During Last Five Years
- -----------------------------------------------------------------------
<S> <C> <C>
Charles P. Biggar(1)+ Trustee of Retired; formerly, Vice President
Age: 68 Trust since of International Business
1990 Machines ("IBM") and President of
the National Services and Field
Engineering Divisions of IBM.
S. Leland Dill(2) Retired; Director, Coutts
Age: 69 (U.S.A.) International; Trustee,
Phoenix-Zweig Trust(4) and
Phoenix-Euclid Market Neutral
Fund(4); former Partner of KPMG
Peat Marwick; Director, Vintners
International Company Inc.;
Director, Coutts Trust Holdings
Ltd.; Director, Coutts Group;
General Partner, Pemco(4).
Martin J. Gruber(2) Nomura Professor of Finance,
Age: 62 Leonard N. Stern School of
Business, New York University
(since 1964); Trustee, TIAA(4);
Trustee, SG Cowen Mutual
Funds(4); Trustee, Japan Equity
Fund(4); Trustee, Taiwan Equity
Fund(4).
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
Position with Principal Occupations
Name and Age Trust During Last Five Years
- -------------------------------------------------------------------------
<S> <C> <C>
Richard Hale* Managing Director, Deutsche Asset
Age: 54 Management; Director, Flag
Investors Fund(4); Managing
Director, BT Alex. Brown
Incorporated; Director and
President, Investment Company
Capital Corp.
Richard J. Herring(1)+ Trustee of Jacob Safra Professor of
Age: 53 Trust since International Banking, Professor
1990 of Finance and Vice Dean, The
Wharton School, University of
Pennsylvania (since 1972).
Bruce E. Langton(1)+ Trustee of Retired; Trustee, Allmerica
Age: 68 Trust since Financial Mutual Funds (1994 to
1990 present); Member, Pension &
Thrift Plans and Investment
Committee, Unilever U.S.
Corporation (1989 to present)(3);
Director, TWA Pilots Directed
Account Plan and 401K Plan (1988
to present)(4).
Philip Saunders, Jr.(2) Principal, Philip Saunders
Age: 63 Associates (Economic and
Financial Analysis); Former
Director, Financial Industry
Consulting, Wolf and Company;
President, John Hancock Home
Mortgage Corporation; Senior Vice
President of Treasury and
Financial Services, John Hancock
Mutual Life Insurance Company,
Inc.
Harry Van Benschoten(2) Retired; Director, Canada Life
Age: 71 Insurance Corporation of New
York.
</TABLE>
- -----------
* "Interested Person" within the meaning of Section 2(a)(19) of the Act. Mr.
Hale is a Managing Director of Deutsche Asset Management, the U.S. asset
management unit of Deutsche Bank and its affiliates.
+Member of the Audit Committee.
(1)Holds one other trusteeship in the Bankers Trust Fund Complex, as defined
herein.
(2)Holds two other trusteeships in the Bankers Trust Fund Complex, as defined
herein.
(3)A publicly held company with securities registered pursuant to Section 12 of
the Exchange Act.
(4)An investment company registered under the Act.
The Board has established an Audit Committee that meets with the Trust's
independent accountants to review the financial statements of the Trust, the
adequacy of internal controls and the accounting procedures and policies of the
Trust, and reports on these matters to the Board. The Independent Trustees, who
constitute 100% of the membership of the current Board, select and nominate the
new trustee nominees who are not "interested persons," as defined under the
Act, of the Trust. The Board does not have a compensation committee. During
1998, the Board held four meetings and the Audit Committee held two meetings.
No Trustee attended less than 75% of the applicable meetings.
18
<PAGE>
If Richard Hale is elected, he will not be a member of the Audit Commit-
tee.
The following table sets forth the compensation received by the Trustee
Nominees for their services to the Trust and Bankers Trust Fund Complex (as
defined below) during the most recent calendar year ended December 31, 1998.
In addition to the fees listed below, the Trustees are also reimbursed for all
reasonable expenses incurred during the execution of their duties for the
Trust and Bankers Trust Fund Complex.*
<TABLE>
<CAPTION>
Pension or Retirement Estimated
Aggregate Benefits Accrued as Annual Total Compensation
Compensation Part of Trust Benefits upon From the Complex*
Name of Trustee from the Trust Expenses Retirement Paid to Trustees
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Charles P. Biggar $11,107 N/A N/A $36,250
- -------------------------------------------------------------------------------------------
S. Leland Dill N/A N/A N/A $36,250
- -------------------------------------------------------------------------------------------
Martin J. Gruber N/A N/A N/A $36,250
- -------------------------------------------------------------------------------------------
Richard Hale N/A N/A N/A N/A
- -------------------------------------------------------------------------------------------
Richard J. Herring $23,625 N/A N/A $35,000
- -------------------------------------------------------------------------------------------
Bruce E. Langton $23,625 N/A N/A $35,000
- -------------------------------------------------------------------------------------------
Philip Saunders, Jr. N/A N/A N/A $36,250
- -------------------------------------------------------------------------------------------
Harry Van Benschoten N/A N/A N/A $36,250
- -------------------------------------------------------------------------------------------
</TABLE>
- ----------
* The "Bankers Trust Fund Complex" consists of the Trust as well as BT In-
vestment Funds, BT Pyramid Mutual Funds, BT Advisor Funds and BT Insurance
Funds Trust (collectively, the "BT Funds"), as well as the portfolios into
which those series of the BT Funds which have a master feeder structure in-
vest.
19
<PAGE>
The following table sets forth the names, ages, position with the Trust and
length of service in such position, and principal occupations during the past
five years, of the officers of the Trust.
<TABLE>
<CAPTION>
Position with Trust and Principal
Name and Age Occupations
- ---------------------------------------------------
<S> <C>
John A. Keffer President and Chief Executive
Age: 57 Officer since 1998; President,
Forum Financial Group L.L.C. and
its affiliates; President, ICC
Distributors, Inc.*
Daniel O. Hirsch Secretary since 1998; Director,
Age: 45 Deutsche Asset Management since
1999; Director, BT Alex. Brown
Incorporated and Investment
Company Capital Corporation,
1998-99; Associate General
Counsel, Office of General
Counsel, United States Securities
and Exchange Commission, 1993-
1998.
Charles A. Rizzo Treasurer since 1999; Vice
Age: 41 President and Department Head,
Deutsche Asset Management since
1998; Senior Manager,
PricewaterhouseCoopers LLP 1993-
98.
</TABLE>
- -----------
* Underwriter/Distributor for the Trust. Mr. Keffer owns 100% of the shares
of ICC Distributors, Inc.
Recommendation of the Board
At a meeting of the Board held on July 27, 1999, the Board, based on a rec-
ommendation of the incumbent Independent Trustees, unanimously approved the
nomination of the Trustee Nominees. In reaching this conclusion, the Board ob-
tained from the Trustee Nominees such information as they deemed reasonably
necessary to approve the Trustee Nominees and considered a number of factors,
including, among other things: the nature, scope and quality of services that
the Trustee Nominees would likely provide to the Trust and the desirability of
maintaining adherence to Section 15(f) of the Act. Based on the factors dis-
cussed above and others, the Board determined that the election of the Trustee
Nominees is in the best interest of the Trust and its shareholders.
Therefore, after careful consideration, the Board, including the Indepen-
dent Trustees, recommends that the shareholders of the Trust vote "FOR" the
election of the Trustee Nominees as set forth in this Proposal.
If the Trustee Nominees are elected by the applicable shareholders, each
Trustee Nominee will serve until his successor is duly elected and qualified or
until his earlier resignation or removal. If the Trustee Nominees are not
elected, the Board will consider what action is appropriate based upon the in-
terests of the Trust's shareholders.
20
<PAGE>
PROPOSAL III
RATIFICATION OF THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT
ACCOUNTANTS FOR THE FUND
The Board, including a majority of the Independent Trustees, has approved
the selection of PricewaterhouseCoopers LLP to serve as independent accountants
for the Fund for the current fiscal year. PricewaterhouseCoopers LLP has served
as independent accountants of the Fund since the date of the Fund's inception
and has advised the Trust that they have no direct or indirect financial inter-
est in the Fund. Representatives of PricewaterhouseCoopers LLP are not expected
to be present at the Special Meeting and, thus, are not expected to make a
statement; however, one or more representatives will be available by telephone
to respond to appropriate questions posed by shareholders or management.
Therefore, after careful consideration, the Board, including the Indepen-
dent Trustees, recommends that the shareholders of the Trust vote "FOR" the
ratification of the independent accountants as set forth in this Proposal.
21
<PAGE>
VOTE REQUIRED
Approval of Proposals IA, IB and IC with respect to the Trust's New Advi-
sory Agreements requires the affirmative vote of a "majority" of the outstand-
ing shares of the Fund. "Majority" (as defined in the Act) means (as of the
Record Date) the lesser of (a) 67% or more of the shares of the Fund present at
the special 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 out-
standing shares of the Fund present and voting at the special meeting. Because
abstentions and broker non-votes are treated as shares present but not voting,
any abstentions and broker non-votes will have the effect of votes against Pro-
posals IA, IB and IC, which requires the approval of a specified percentage of
the outstanding shares of the Fund.
Approval of Proposal II with respect to the Trustee Nominees requires the
affirmative vote of a plurality of the votes cast in person or by proxy at the
Special Meeting. Because abstentions and broker non-votes are not treated as
shares voted, abstentions and broker non-votes will have no impact on Proposal
II.
Approval of Proposal III with respect to the selection of the independent
accountants of the Fund requires the affirmative vote of a majority of the
votes cast in person or by proxy at the Special Meeting for the Fund. Because
abstentions and broker non-votes are not treated as shares voted, abstentions
and broker non-votes will have no impact on Proposal III.
THE BOARD, INCLUDING THE INDEPENDENT TRUSTEES, RECOMMENDS THAT THE
SHAREHOLDERS VOTE "FOR" APPROVAL OF PROPOSALS IA, IB, IC, II AND III.
ANY UNMARKED PROXIES WILL BE SO VOTED.
The Board is not aware of any other matters that will come before the Spe-
cial Meeting. Should any other matter properly come before the Special Meeting,
it is the intention of the persons named in the accompanying Proxy to vote the
Proxy in accordance with their judgment on such matters.
SUBMISSION OF SHAREHOLDER PROPOSALS
The Fund does not hold regular shareholders' meetings. Shareholders wishing
to submit proposals for inclusion in a proxy statement for a subsequent share-
holders' meeting should send their written proposals to the Secretary of the
Trust at the address set forth on the cover of this Proxy Statement.
22
<PAGE>
Proposals must be received at a reasonable time prior to the date of a
meeting of shareholders to be considered for inclusion in the materials for the
Fund's meeting. Timely submission of a proposal does not, however, necessarily
mean that such proposal will be included.
SHAREHOLDERS' REQUEST FOR SPECIAL MEETING
Shareholders holding at least 10% of the Fund's outstanding voting securi-
ties (as defined in the Act) may require the calling of a meeting of sharehold-
ers for the purpose of voting on the removal of any Trustee. Meetings of share-
holders for any other purpose also shall be called by the Board when requested
in writing by shareholders holding at least 10% of the shares then outstanding.
IF YOU HAVE ANY QUESTIONS CONCERNING THE PROXY STATEMENT OR THE PROCEDURES
TO BE FOLLOWED TO EXECUTE AND DELIVER A PROXY, PLEASE CONTACT SHAREHOLDER COM-
MUNICATIONS CORPORATION AT 1-800-732-6168.
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE SPECIAL MEETING AND
WHO WISH TO HAVE THEIR SHARES VOTED ARE REQUESTED TO DATE AND SIGN THE
ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE, UNLESS THEY
ARE VOTING BY TELEPHONE OR THROUGH THE INTERNET. NO POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES.
By Order of the Board of Trustees,
/s/ Daniel O. Hirsch
Daniel O. Hirsch, Secretary
August 23, 1999
THE BOARD OF TRUSTEES OF THE TRUST HOPES THAT SHAREHOLDERS WILL ATTEND
THE SPECIAL MEETING. WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED
TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ACCOM-
PANYING ENVELOPE (UNLESS YOU ARE VOTING BY TELEPHONE OR THROUGH
THE INTERNET).
23
<PAGE>
Annex I
(i) 5% Shareholders
<TABLE>
<CAPTION>
Shares Beneficially Percent Ownership
Name and Address of Beneficial Owner Owned of Outstanding Shares
- -------------------------------------------------------------------------------
<S> <C> <C>
Fidelity Spartan US Equity Index
(500) Fund 1,276,030,994 18.58%
Mr. Craig Spurr
82 Devonshire Street
Boston MA 02109-3614
Los Angeles Fire & Police Pension
Systems 866,099,668 12.61%
Mr. Thomas Lopez
360 East Second Street,
Suite 600
Department of Pensions
Los Angeles CA 90012-4203
Washington University 356,458,079 5.19%
Ms. Barbara A Feiner
7425 Forsyth Boulevard
Campus Box 1047
St. Louis MO 63105
Lockheed Martin Investment
Management Company 421,890,165 6.14%
Ms Cora Ingrim
6705 Rockledge Drive
Suite 550
Bethesda MD 20817
Employees Retirement System
of the State of Hawaii 408,349,981 5.95%
Mr. Nathan Fisher
201 Merchant Street
Suite 1400
Honolulu HI 96813-2980
(ii) Trustees and Trustee Nominees *
Charles P. Biggar *
S. Leland Dill *
Martin J. Gruber *
Richard Hale *
Richard J. Herring *
Bruce E. Langton *
Phillip Saunders, Jr. *
Harry Van Benschoten *
(iii) Executive Officers *
John A. Keffer *
Daniel O. Hirsch *
Charles A. Rizzo *
(iv) Trustees and Executive Officers
as a Group *
</TABLE>
- -----------
* The Trustees, the Trustee Nominees, the executive officers of the Trust and
the Trustees and executive officers as a group own less than 1% of the
Fund's outstanding shares.
<PAGE>
Annex II
INSTITUTIONAL DAILY ASSETS FUND
BANKERS TRUST
<TABLE>
<CAPTION>
Advisory
Net Assets Fee as a
(As of Percentage
Most Recently of Average
Completed Daily Net
Fiscal Year) Assets
- ---------------------------------------------------------------------
<S> <C> <C>
Liquid Assets Portfolio:
Includes the following feeder fund:
BT Institutional Liquid Assets Fund $3,374,159,676.00 0.15%
BT Institutional Treasury Assets Fund $ 488,225,501.00 0.10%
- ---------------------------------------------------------------------
</TABLE>
MORGAN GRENFELL INC.
None.
<PAGE>
EXHIBIT A
[FORM OF INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENT]
AGREEMENT made as of [ ] by and between [Trust Name], a (state of or-
ganization) (herein called the "Trust") and [ ] (herein called the "Invest-
ment Adviser") [and [ ] (herein called the "Investment Subadviser")].
WHEREAS, the Trust is registered as an open-end management investment com-
pany under the Investment Company Act of 1940;
WHEREAS, the Trust desires to retain the Investment Adviser to render in-
vestment advisory and other services to the Trust with respect to certain of
its series of shares of beneficial interests as may currently exist or be cre-
ated in the future (each, a "Fund") as listed on Exhibit A hereto, and the In-
vestment Adviser is willing to so render such services on the terms hereinafter
set forth;
[WHEREAS, the Investment Adviser desires to retain the Investment
subadviser to perform certain of the Investment Adviser's duties under this
Agreement, and the Investment Subadviser is willing to so render such services
on the terms hereinafter set forth;]/1/
NOW, THEREFORE, this Agreement
W I T N E S S E T H:
In consideration of the promises and mutual covenants herein contained, it
is agreed between the parties hereto as follows:
1. Appointment. The [Trust] [Investment Adviser] hereby appoints the [In-
vestment Adviser] [Investment Subadviser] to act as [investment adviser] to
each Fund for the period and on the terms set forth in this Agreement. The [In-
vestment Adviser] [Investment Subadviser] accepts such appointment and agrees
to render the services herein set forth for the compensation herein provided.
2. Management. Subject to the supervision of the [Board of Trustees of the
Trust] [Investment Adviser], the [Investment Adviser] will provide a continuous
investment program for the Fund, including investment research and management
with respect to all securities, investments, cash and cash equivalents in the
Fund. The [Investment Adviser] [Investment Subadviser] will determine from
/1/ Contained in the form of Investment Sub-advisory Agreement only.
<PAGE>
time to time what securities and other investments will be purchased, retained
or sold by each Fund. The [Investment Adviser] [Investment Subadviser] will
provide the services rendered by it hereunder in accordance with the investment
objective(s) and policies of each Fund as stated in the Fund's then-current
prospectus and statement of additional information (or the Fund's then current
registration statement on Form N-1A as filed with the Securities and Exchange
Commission (the "SEC") and the then-current offering memorandum if the Fund is
not registered under the Securities Act of 1933, as amended ("1933 Act"). The
[Investment Adviser] [Investment Subadviser] further agrees that:
(a) it will conform with all applicable rules and regulations of the
SEC (herein called the "Rules") and with all applicable provisions of the
1933 Act; as amended, the Securities Exchange Act of 1934, as amended (the
"1934 Act"), the Investment Company Act of 1940, as amended (the "1940
Act"); and the Investment Advisers Act of 1940, as amended (the "Advisers
Act"), and will, in addition, conduct its activities under this Agreement
in accordance with applicable regulations of the Board of Governors of the
Federal Reserve System pertaining to the investment advisory activities of
bank holding companies and their subsidiaries;
(b) it will place orders pursuant to its investment determinations for
each Fund either directly with the issuer or with any broker or dealer se-
lected by it. In placing orders with brokers and dealers, the Investment
Adviser will use its reasonable best efforts to obtain the best net price
and the most favorable execution of its orders, after taking into account
all factors it 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 commis-
sion, if any, both for the specific transaction and on a continuing basis.
Consistent with this obligation, the [Investment Adviser] [Investment
Subadviser] may, to the extent permitted by law, purchase and sell portfo-
lio securities to and from brokers and dealers who provide brokerage and
research services (within the meaning of Section 28(e) of the 1934 Act) to
or for the benefit of any fund and/or other accounts over which the [In-
vestment Adviser] [Investment Subadviser] or any of its affiliates exer-
cises investment discretion. Subject to the review of the Trust's Board of
Trustees from time to time with respect to the extent and continuation of
the policy, the [Investment Adviser] [Investment Subadviser] is authorized
to pay to a broker or dealer who provides such brokerage and research
services a commission for effecting a securities transaction which is in
excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if the [Investment Adviser] [In-
vestment Subadviser] determines 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 particu-
lar transaction or the overall responsibilities of the [Investment
EX-2
<PAGE>
Adviser] [Investment Subadviser] with respect to the accounts as to which
it exercises investment discretion; and
(c) it will maintain books and records with respect to the securities
transactions of each Fund and will render to the [Trust's Board of Trust-
ees] [Investment Adviser] such periodic and special reports as the Board
may request.
3. [Subject to the provisions of this Agreement, the duties of the Invest-
ment Subadviser, the portion of portfolio assets that the Subadviser shall man-
age, and the fees to be paid the Investment Subadviser by the Investment Ad-
viser under and pursuant to this Agreement may be adjusted form time to time by
the Investment Adviser with and upon the approval of the Board and the members
of the Trust's Board of Trustees who are not "interested persons," as defined
in the Act.]/2/
4. Services Not Exclusive. The investment advisory services rendered by the
Investment Adviser hereunder are not to be deemed exclusive, and the Investment
Adviser shall be free to render similar services to others so long as its serv-
ices under this Agreement are not impaired thereby.
5. Books and Records. In compliance with the requirements of Rule 31a-3 of
the Rules under the 1940 Act, the [Investment Adviser] [Investment Subadviser]
hereby agrees that all records which it maintains for the Trust are the prop-
erty of the Trust and further agrees to surrender promptly to the Trust any of
such records upon request of the Trust. The [Investment Adviser] [Investment
Subadviser] further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by Rule 31a-1 under
the 1940 Act and to comply in full with the requirements of Rule 204-2 under
the Advisers Act pertaining to the maintenance of books and records.
6. Expenses. During the term of this Agreement, the [Investment Adviser]
[Investment Subadviser] will pay all expenses incurred by it in connection with
its activities under this Agreement other than the cost of purchasing securi-
ties (including brokerage commissions, if any) for the Fund.
7. Compensation. For the services provided and the expenses assumed pursu-
ant to this Agreement, the [Trust] [Investment Adviser] will pay the [Invest-
ment Adviser] [Investment Subadviser], and the [Investment Adviser] [Investment
Subadviser] will accept as full compensation therefor, fees, computed daily and
payable monthly, on an annual basis equal to the percentage set forth on Ex-
hibit A hereto of that Fund's average daily net assets.
- -----------
2Provision contained in the form of Investment Sub-advisory Agreement only.
EX-3
<PAGE>
8. Limitation of Liability of the Investment Adviser: Indemnification.
(a) The [Investment Adviser] [Investment Subadviser] shall not be liable
for any error of judgment or mistake of law or for any loss suffered by a Fund
in connection with the matters to which this Agreement relates, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of com-
pensation for services or a loss resulting from willful misfeasance, bad faith
or gross negligence on the part of the [Investment Adviser] [Investment
Subadviser] in the performance of its duties or from reckless disregard by it
of its obligations and duties under this Agreement;
(b) Subject to the exceptions and limitations contained in Section 7(c)
below:
(i) the [Investment Adviser] [Investment Subadviser] (hereinafter re-
ferred to as a "Covered Person") shall be indemnified by the respective
Fund to the fullest extent permitted by law, against liability and against
all expenses reasonably incurred or paid by him in connection with any
claim, action, suit or proceeding in which he becomes involved, as a party
or otherwise, by virtue of his being or having been the [Investment Advis-
er] [Investment Subadviser] of the Fund, and against amounts paid or in-
curred by him in the settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall apply
to all claims, actions, suits or proceedings (civil, criminal or other,
including appeals), actual or threatened while in office or thereafter,
and the words "liability" and "expenses" shall include, without limita-
tion, attorneys' fees, costs, judgments, amounts paid in settlement,
fines, penalties and other liabilities.
(c) No indemnification shall be provided hereunder to a Covered Person:
(i) who shall have been adjudicated by a court or body before which
the proceeding was brought (A) to be liable to the [Trust] [Investment Ad-
viser] or to one or more Funds' investors by reason of willful misfea-
sance, bad faith, gross negligence or reckless disregard of the duties in-
volved in the conduct of his office, or (B) not to have acted in good
faith in the reasonable belief that his action was in the best interest of
a Fund; or
(ii) in the event of a settlement, unless there has been a determina-
tion that such Covered Person did not engage in willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in
the conduct of his office;
(A) by the court or other body approving the settlement; or
EX-4
<PAGE>
(B) by at least a majority of those Trustees who are neither In-
terested Persons of the Trust nor are parties to the matter based
upon a review of readily available facts (as opposed to a full trial-
type inquiry); or
(C) by written opinion of independent legal counsel based upon a
review of readily available facts (as opposed to a full trial-type
inquiry); provided, however, that any investor in a Fund may, by ap-
propriate legal proceedings, challenge any such determination by the
Trustees or by independent counsel.
(d) The rights of indemnification herein provided may be insured
against by policies maintained by the [Trust] [Investment Adviser], shall
be severable, shall not be exclusive of or affect any other rights to
which any Covered Person may now or hereafter be entitled, shall continue
as to a person who has ceased to be a Covered Person and shall inure to
the benefit of the successors and assigns of such person. Nothing con-
tained herein shall affect any rights to indemnification to which Trust
personnel and any other persons, other than a Covered Person, may be enti-
tled by contract or otherwise under law.
(e) Expenses in connection with the preparation and presentation of a
defense to any claim, suit or proceeding of the character described in
subsection (b) of this Section 7 may be paid by the [Trust] [Investment
Adviser] on behalf of the respective Fund from time to time prior to final
disposition thereto upon receipt of an undertaking by or on behalf of such
Covered Person that such amount will be paid over by him to the [Trust]
[Investment Adviser] on behalf of the respective Fund if it is ultimately
determined that he is not entitled to indemnification under this Section
7; provided, however, that either (i) such Covered Person shall have pro-
vided appropriate security for such undertaking or (ii) the [Trust] [In-
vestment Adviser] shall be insured against losses arising out of any such
advance payments, or (iii) either a majority of the Trustees who are nei-
ther Interested Persons of the [Trust] [Investment Adviser] nor parties to
the matter, or independent legal counsel in a written opinion, shall have
determined, based upon a review of readily available facts as opposed to a
trial-type inquiry or full investigation, that there is reason to believe
that such Covered Person will be entitled to indemnification under this
Section 7.
9. Duration and Termination. This Agreement shall be effective as to a Fund
as of the date the Fund commences investment operations after this Agreement
shall have been approved by the Board of Trustees of the Trust with respect to
that Fund and the Investor(s) in the Fund in the manner contemplated by Section
15 of the 1940 Act and, unless sooner terminated as provided herein,
EX-5
<PAGE>
shall continue until the second anniversary of such date. Thereafter, if not
terminated, this Agreement shall continue in effect as to such Fund for succes-
sive periods of 12 months each, provided such continuance is specifically ap-
proved at least annually (a) by the vote of a majority of those members of the
Board of Trustees of the Trust who are not parties to this Agreement or Inter-
ested Persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval, or (b) by Vote of a Majority of the Out-
standing Voting Securities of the Trust; provided, however, that this Agreement
may be terminated by the Trust at any time, without the payment of any penalty,
by the Board of Trustees of the Trust, by Vote of a Majority of the Outstanding
Voting Securities of the Trust on 60 days' written notice to the [Investment
Adviser] [Investment Subadviser], or by the [Investment Adviser] [Investment
Subadviser] as to the [Trust[[Investment Adviser] at any time, without payment
of any penalty, on 90 days' written notice to the [Trust] [Investment Advis-
er]]. This Agreement will immediately terminate in the event of its assignment
(as used in this Agreement, the terms "Vote of a Majority of the Outstanding
Voting Securities," "Interested Person" and "Assignment' shall have the same
meanings as such terms have in the 1940 Act and the rules and regulatory con-
structions thereunder.)
10. Amendment of this Agreement. No material term of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no amendment of a material term of this
Agreement shall be effective with respect to a Fund, until approved by Vote of
a Majority of the Outstanding Voting Securities of that Fund.
11. Representations and Warranties. The [Investment Adviser] [Investment
Subadviser] hereby represents and warrants as follows:
(a) The [Investment Adviser] [Investment Subadviser] is exempt from
registration under the 1940 Act:
(b) The [Investment Adviser] [Investment Subadviser] has all requisite
authority to enter into, execute, deliver and perform its obligations un-
der this Agreement;
(c) This Agreement is legal, valid and binding, and enforceable in ac-
cordance with its terms; and
(d) The performance by the [Investment Adviser] [Investment
Subadviser] of its obligations under this Agreement does not conflict with
any law to which it is subject.
12. Covenants. The [Investment Adviser] [Investment Subadviser] hereby cov-
enants and agrees that, so long as this Agreement shall remain in effect:
EX-6
<PAGE>
(a) The [Investment Adviser] [Investment Subadviser] shall remain ei-
ther exempt from, or registered under, the registration provisions of the
Advisers Act; and
(b) The performance by the [Investment Adviser] [Investment
Subadviser] of its obligations under this Agreement shall not conflict
with any law to which it is then subject.
13. Notices. Any notice required to be given pursuant to this Agreement
shall be deemed duly given if delivered or mailed by registered mail, postage
prepaid, (a) to the [Investment Adviser] [Investment Subadviser], Mutual Funds
Services, 130 Liberty Street (One Bankers Trust Plaza), New York, New York
10006 or (b) to the Trust, c/o BT Alex. Brown, Inc., One South Street, Balti-
more, Maryland 21202.
14. Waiver. With full knowledge of the circumstances and the effect of its
action, the [Investment Adviser] [Investment Subadviser] hereby waives any and
all rights which it may acquire in the future against the property of any in-
vestor in a Fund, other than shares in that Fund, which arise out of any ac-
tion or inaction of the [Trust] [Investment Adviser] under this Agreement.
15. Miscellaneous. The captions in this Agreement are included for conve-
nience of reference only and in no way define or delimit 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 the
laws of the , without reference to principles of conflicts of law. The
Trust is organized under the laws of pursuant to a dated .
No Trustee, officer or employee of the Trust shall be personally bound by or
liable hereunder, nor shall resort be had to their private property for the
satisfaction of any obligation or claim hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
[SIGNATORIES]
EX-7
<PAGE>
EXHIBIT A
TO
INVESTMENT ADVISORY AGREEMENT
MADE AS OF
BETWEEN
[Trust Name] AND [ ]
Fund Investment Advisory Fee
- ---- -----------------------
EX-8
<PAGE>
CUSIP #055924666
<PAGE>
FORM OF PROXY CARD
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
FORM OF PROXY CARD
[BANKERS TRUST LOGO] BT Institutional Funds
Deutsche Banc ALEX. BROWN Institutional Daily Assets Fund
MUTUAL FUND SERVICES -- LEGAL DEPARTMENT
MS 1-18-8 One South Street
Baltimore, Maryland 21202
One South Street
Baltimore, Maryland 21202-3220 PROXY FOR THE SPECIAL MEETING OF STOCKHOLDERS
11:00 a.m., Eastern time, on October 8, 1999
The undersigned hereby appoints Daniel O. Hirsch and
Amy M. Olmert and each of them, with full power of substitution,
as proxies of the undersigned to vote all shares of stock that
the undersigned is entitled in any capacity to vote at the
above-stated special meeting, and at any and all adjournments or
postponements thereof (the "Special Meeting"), on the matters
set forth on this Proxy Card, and, in their discretion, upon all
matters incident to the conduct of the Special Meeting and
upon such other matters as may properly be brought before the
Special Meeting. This proxy revokes all prior proxies given by
the undersigned.
All properly executed proxies will be voted as
directed. If no instructions are indicated on a properly
executed proxy, the proxy will be voted FOR approval
of Proposals IA, IB, IC, II and III. All ABSTAIN votes
will be counted in determining the existence of a quorum
at the Special Meeting and, for Proposals IA, IB and IC,
as votes AGAINST the applicable Proposal.
To vote by Telephone THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
TRUSTEES WITH RESPECT TO YOUR FUND.
1) Read the Proxy Statement and have the Proxy card below at THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR PROPOSALS IA,
hand. IB, IC, II AND III.
2) Call 1-800-690-6903.
3) Enter the 12-digit control number set forth on the Proxy UNLESS VOTING BY TELEPHONE OR INTERNET, PLEASE SIGN AND DATE
card and follow the simple instructions. BELOW AND MAIL THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
To vote by Internet
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Go to Website www.proxyvote.com.
3) Enter the 12-digit control number set forth on the Proxy card
and follow the simple instructions.
DO NOT RETURN YOUR PROXY CARD IF YOU VOTE BY PHONE OR INTERNET.
TO VOTE, MARK BLOCKS IN BLUE OR BLACK INK AS FOLLOWS:
KEEP THIS PORTION FOR YOUR RECORDS.
</TABLE>
<PAGE>
DETACH AND RETURN THIS PORTION ONLY.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
INSTITUTIONAL DAILY ASSETS FUND
YOUR VOTE IS IMPORTANT. PLEASE SIGN, DATE AND MAIL THIS PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
(Joint owners should EACH sign. Please sign EXACTLY as your name(s) appears on
this card. When signing as attorney, trustee, executor, administrator, guardian
or corporate officer, please give your FULL title below.)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Vote on Trustees
II. Election of Messrs. (01) Biggar, (02) Dill, (03) Hale, For All Withhold All For All Except: To withhold authority
(04) Langton, (05) Saunders, and (06) Van Benschoten to vote, mark "For
and Drs. (07) Gruber and (08) Herring as Trustees of |_| |_| |_| All Except" and write
the Board. the nominee's number
on the line below.
------------------
Vote on Proposals
IA. Approval of New III. Ratification of the
Investment Advisory selection of
Agreement with Bankers PricewaterhouseCoopers
Trust Company FOR [] AGAINST [] ABSTAIN [] LLP as the independent
accountants of the Fund
and its corresponding
Portfolio. FOR [] AGAINST [] ABSTAIN []
IB. Approval of New
Investment Advisory
Agreement with Morgan
Grenfell Inc. FOR [] AGAINST [] ABSTAIN []
The appointed proxies will vote on any other business as may
properly come before the Special Meeting or any adjournment
thereof.
Receipt of the Notice and the Proxy Statement.
IC. Approval of New
Investment Sub-advisory
Agreement with Bankers
Trust Company FOR [] AGAINST [] ABSTAIN []
- ------------------------------------ ------------ ------------------------------- -------------
- ------------------------------------ ------------ ------------------------------- -------------
Signature (Please sign within box) Date Signature (Joint Owners) Date
</TABLE>
-2-
