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File No. 811-6071
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 Rule 14a-11(c) or Rule 14a-12
BT INSTITUTIONAL FUNDS
----------------------
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement., if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: __________________________________________
2) Form, Schedule or Registration Statement No.:_____________________
3) Filing Party: ____________________________________________________
4) Date Filed: ______________________________________________________
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March 3, 2000
BT Institutional Funds
Institutional Daily Assets Fund
Dear Shareholder,
I am writing to let you know that a meeting will be held on March 23, 2000 for
shareholders to vote on important proposals for the Institutional Daily Assets
Fund (the "Fund"). As a shareholder in the Fund, you are entitled to vote on
these proposals.
The Proposals
. To approve the conversion of the Fund's structure from a stand-alone fund
to a master-feeder structure.
. To approve or disapprove the new advisory agreements for the newly created
portfolio.
. To ratify or reject the independent accountants for the Fund and the
Portfolio for the current fiscal year.
What this means for your investment
. If the conversion is approved, the Fund will invest all of its assets in a
newly created portfolio, the Daily Assets Portfolio. The master-feeder
structure will enable the Daily Assets Portfolio to pursue additional
distribution outlets.
. The conversion 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 of your mutual fund investment has not changed.
The BT Institutional Funds' Board of Trustees, whose primary role is to protect
your interests as a shareholder, has reviewed the proposals. In the Trustees'
opinion, the proposals are fair and reasonable. THE TRUSTEES RECOMMEND THAT YOU
VOTE "FOR" THE PROPOSALS.
How to vote
CAST YOUR VOTE BY COMPLETING AND SIGNING THE PROXY CARD, UNLESS YOU ARE VOTING
BY TELEPHONE. PLEASE MAIL YOUR COMPLETED AND SIGNED PROXY AS SOON AS POSSIBLE,
USING THE POSTAGE-PAID ENVELOPE PROVIDED. PLEASE VOTE! YOUR VOTE IS EXTREMELY
IMPORTANT, NO MATTER HOW MANY SHARES YOU OWN.
IF YOU ARE VOTING BY TELEPHONE, PLEASE DIAL THE TOLL-FREE NUMBER ON YOUR PROXY
CARD AND FOLLOW THE DIRECTIONS GIVEN BY THE AUTOMATED TOUCH-TONE PHONE SYSTEM.
Any questions?
Please call 1-800-730-1313 if you have any questions about the proposals or
voting procedures.
Sincerely,
/S/ Daniel O. Hirsch
Daniel O. Hirsch, Secretary
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March 3, 2000
QUESTIONS AND ANSWERS
IMPORTANT NEWS
FOR SHAREHOLDERS OF BT INSTITUTIONAL FUNDS
Here is a brief overview of some matters affecting the Institutional Daily
Assets 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 December 8, 1999 the Board of Trustees of the Institutional Daily Assets
Fund (the "Fund") approved a new investment policy to authorize the Fund to
invest all of its investable assets in a specific corresponding series (the
"Portfolio") of an open-end management investment company (BT Investment
Portfolios), having the same investment objective, policies and
restrictions as the Fund. As a fundamental policy, the Fund cannot own more
than 10% of the voting securities of any issuer. A shareholder vote is
required to change this fundamental policy.
THE BOARD MEMBERS OF THE INSTITUTIONAL DAILY ASSETS FUND RECOMMEND THAT YOU VOTE
"FOR" THIS PROPOSAL.
Q. Why do I have to approve a new investment advisory agreement and will that
agreement change?
A. All of the investment advisory services will be moved from the Fund to the
Portfolio. Therefore, the Fund will no longer need an advisory agreement, but
the Portfolio will need an agreement. The provisions of the agreement will
remain substantially the same, except for the parties, the dates of execution
and the term of the agreement.
Q. How does the Board of Trustees of the Institutional Daily Assets Fund
recommend that I vote?
A. After careful consideration, the Board of Trustees of the Fund recommends
that you vote in favor of all the proposals on the enclosed proxy card.
Q. Whom do I call for more information?
A. If you need more information, please call 1-800-730-1313.
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 and return envelope.
. By telephone, with a toll-free call to the telephone number that
appears on your proxy card.
. In person at the shareholder meeting (see details enclosed in proxy
statement).
Please vote all issues on the proxy card. Thank you for mailing your proxy card
promptly.
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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 March 23, 2000
A Special Meeting of shareholders of BT Institutional Funds (the "Trust")
will be held at the offices of Deutsche Asset Management, One South Street, 30th
Floor, Baltimore, MD 21202 on March 23, 2000 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
Institutional Daily Assets Fund (the "Fund"), Institutional Cash Management
Fund, Institutional Cash Reserves, Institutional Treasury Money Fund,
International 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 conversion of the Fund's structure from a
stand-alone fund to a master-feeder fund structure, whereby
the Fund would invest all of its investable assets in a
Portfolio that is a series of BT Investment Portfolios (the
"Portfolio Trust").
PROPOSAL II: To approve or disapprove new investment advisory agreements
(each a "New Advisory Agreement" and together the "New
Advisory Agreements") for the Portfolio:
A. To approve or disapprove a New Advisory Agreement between
the Portfolio and Bankers Trust Company ("Bankers Trust")
(the "New BT Advisory Agreement").
B. To approve or disapprove a New Advisory Agreement between
the Portfolio and Deutsche Asset Management, Inc. ("DAMI"
and, together with Bankers Trust, the "Advisers") (the "New
DAMI Advisory Agreement") to be implemented within two years
of the date of the Special Meeting upon approval of the
members of the Trust's Board of Trustees, who are not
"interested persons" ("Independent Trustees") (as defined in
the Investment Company Act of 1940, as amended (the "1940
Act")).
C. To approve or disapprove a new sub-investment advisory
agreement (the "New Sub-advisory Agreement," which term,
unless otherwise specified, is included within the meaning
of New Advisory Agreements) among the Portfolio, DAMI and
Bankers Trust under which Bankers Trust may perform certain
of DAMI's responsibilities, at DAMI's expense, under the New
DAMI Advisory Agreement with the Portfolio.
PROPOSAL III: To ratify or reject the selection of PricewaterhouseCoopers
LLP as the independent accountants for the Portfolio and the
Fund for the 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 IIA, IIB and IIC,
respectively, 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,
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the amounts of assets to be managed and the fees paid to the investment
sub-adviser with and upon the approval 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 generally occasioned by the conversion of the
Fund's structure from a stand-alone fund to a master-feeder structure. The New
Advisory Agreement with DAMI described in Proposal IIB and the New Sub-advisory
Agreement with Bankers Trust described in Proposal IIC will permit Deutsche Bank
A.G. ("Deutsche Bank"), the parent of both Bankers Trust and DAMI, upon the
approval of the Independent Trustees, to simplify the organizational 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 Advisory Agreement
with DAMI is needed to permit Deutsche Bank a sufficient amount of time to plan,
prepare and institute the necessary arrangements for DAMI to consolidate
Deutsche Bank's U.S. mutual fund operations.
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
behalf of the Fund. Also, actions described as being taken by the Portfolio may
actually be taken by the Portfolio Trust on behalf of the Portfolio.
The close of business on February 15, 2000 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 CALL 1-800-730-1313.
This notice and related proxy material are first being mailed to
shareholders on or about March 3, 2000. This proxy is being solicited on behalf
of the Trustees of the Trust.
By Order of the Board of Trustees,
/S/ Daniel O. Hirsch
Daniel O. Hirsch, Secretary
New York, New York
March 3, 2000
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). NO POSTAGE NEED BE AFFIXED IF THE PROXY CARD IS MAILED IN THE UNITED
STATES.
IF YOU ARE VOTING BY TELEPHONE, PLEASE DIAL THE TOLL-FREE NUMBER ON YOUR PROXY
CARD AND FOLLOW THE DIRECTIONS GIVEN BY THE AUTOMATED TOUCH-TONE PHONE SYSTEM.
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BT INSTITUTIONAL FUNDS
One South Street
Baltimore, Maryland 21202
PROXY STATEMENT FOR THE SPECIAL MEETING OF SHAREHOLDERS
March 23, 2000
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
Deutsche Asset Management, One South Street, 30th Floor, Baltimore, Maryland
21202 on March 23, 2000 at 11:00 am (the "Special Meeting") and at any
adjournments thereof. This Proxy Statement and accompanying proxy card ("Proxy")
are expected to be mailed to shareholders on or about March 3, 2000.
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.
If shareholders approve Proposal I, all of the investable assets of the
Fund will be invested in a corresponding series (the "Portfolio") of an open-end
management investment company (the "Portfolio Trust").
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
behalf of the Fund. Also, actions described as being taken by the Portfolio may
actually be taken by the Portfolio Trust on behalf of the Portfolio.
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 properly
come before the meeting or any adjournments thereof:
PROPOSAL I: To approve conversion of the Fund's structure from a stand-alone
fund to a master-feeder fund structure, whereby the Fund would
invest all of its investable assets in a Portfolio that is a
series of BT Investment Portfolios (the "Portfolio Trust").
PROPOSAL II: To approve or disapprove new investment advisory agreements (each
a "New Advisory Agreement" and together the "New Advisory
Agreements") for the Portfolio:
A. To approve or disapprove a New Advisory Agreement between the
Portfolio and Bankers Trust Company ("Bankers Trust") (the "New
BT Advisory Agreement").
B. To approve or disapprove a New Advisory Agreement between the
Portfolio and Deutsche Asset Management, Inc. ("DAMI" and,
together with Bankers Trust, the "Advisers") (the "New DAMI
Advisory Agreement") to be implemented within two years of the
date of the Special Meeting upon approval 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 "1940 Act")).
C. To approve or disapprove a new sub-investment advisory
agreement (the "New Sub-advisory Agreement," which term, unless
otherwise specified, is included within the meaning of the New
Advisory Agreements) among the Portfolio, DAMI and Bankers Trust
under which Bankers Trust may perform certain of DAMI's
responsibilities, at DAMI's expense, under the New DAMI Advisory
Agreement with the Portfolio.
PROPOSAL III: To ratify or reject the selection of PricewaterhouseCoopers LLP
as the independent accountants for the Portfolio and the Fund for
the current fiscal year.
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The appointed proxies will vote on any other business as may properly come
before the Special Meeting or any adjournment thereof.
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, 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 reimbursement of brokerage firms
and others for their expenses in forwarding solicitation material to the
beneficial owners of the Fund's shares and (c) supplementary solicitations to
submit Proxies, will be borne by the Fund. If the Fund records votes by
telephone, it will use procedures designed to authenticate shareholders'
identities, to allow shareholders to authorize the voting of their shares in
accordance with their instructions, and to confirm that their instructions have
been properly recorded. Proxies voted by telephone 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 June 30, 1999, as well as the Semi-Annual Report of the
Fund (each a "Report"), have previously been furnished to the Fund's
shareholders. 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 1-800-730-1313.
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
accordance with the instructions marked on the Proxy. Shares of the Fund are
entitled 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 received by the Fund prior to the time it is voted.
Bankers Trust will vote any shares in accounts as to which it has
investment 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
obligations, 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, 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 holders 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 Special
Meeting to permit further solicitation of Proxies with respect to the Proposal.
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 required 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 Fund
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 received 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 abstentions and broker non-votes).
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Shareholders of record at the close of business on February 15, 2000 (the
"Record Date") are entitled to notice of, and to vote at, the Special Meeting.
As of the Record Date, 8,806,334,289 shares of the Fund were issued and
outstanding.
In order that your shares may be represented, you are requested to (unless
you are voting by telephone):
. indicate your instructions on the Proxy;
. date and sign the Proxy; and
. mail the Proxy promptly in the enclosed envelope.
Beneficial Ownership of Shares of the Fund
Annex I attached hereto sets forth information as of the Record Date
regarding the beneficial ownership of the Fund's shares, by (a) the only persons
known by the Fund to beneficially own more than five percent of the outstanding
shares of the Fund; (b) the Trustees; (c) the executive officers of the Fund;
and (d) the Trustees and executive officers of the Fund as a group. The number
of shares beneficially owned by each Trustee and executive officer is determined
under rules of the Securities 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 individual 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 executive officers of the Fund 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 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 placement
agent of the Fund. ICC Distributors, Inc. is not affiliated with Bankers Trust,
Deutsche Bank or any of their affiliates.
PROPOSAL I
TO ADOPT AND IMPLEMENT A NEW INVESTMENT POLICY
TO AUTHORIZE THE FUND TO CONVERT TO A MASTER-FEEDER STRUCTURE
The Trustees of the Trust have approved the adoption and implementation of
a new fundamental investment policy for the Fund and a modification of the
Fund's non-fundamental policies to permit the Fund to pursue its investment
objective through a fund structure commonly known as a "master-feeder" structure
and to invest all of its investable assets ("Investable Assets") in a newly
created portfolio. The newly created portfolio will be named the Daily Assets
Portfolio (the "Portfolio").1 The Portfolio will be organized as a separate
series of BT
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1 The Fund operates as an investment vehicle for collateral in certain
securities lending transactions under an exemptive order granted by the
Commission. A condition to that order could be interpreted to preclude the Fund
from operating in a master-feeder structure. The Fund intends to file a request
for an amendment to its order to permit this structure. Although we believe the
SEC will grant this order, there is no assurance that it will do so.
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Investment Portfolios, the Portfolio Trust, and will have substantially the same
investment objective, policies and restrictions as the Fund.
In the master-feeder fund structure, the Fund would seek to achieve its
investment objective by investing in the Portfolio, rather than through
investing directly in securities. The Portfolio in turn would invest in
securities in accordance with its investment objective, policies and
restrictions. The Portfolio's shares may be offered directly to institutional
investors, in addition to other feeder funds, but are not available for purchase
directly by members of the general public. The expense ratios, yields and total
returns to other investors in the Portfolio may be different from those of the
Fund due to differences in expenses.
The purpose of a master-feeder fund arrangement is to achieve operational
efficiencies through economies of scale by achieving a lower ratio of operating
expenses to net assets, assuming that the assets of the Portfolio are greater
than the assets of any individual feeder fund. There can be no assurance that
such economies of scale will be realized, however.
The Portfolio Trust is a New York trust registered as an open-end
management investment company under the 1940 Act. Currently, Bankers Trust (the
"Adviser") serves as the Fund's investment adviser and will continue to serve as
the Portfolio's investment adviser, unless and until Proposals IIB or IIC are
implemented within two years of the date of the Special Meeting.
If shareholders approve this Proposal, the Fund would convert to a
master-feeder fund structure by exchanging all of its Investable Assets
(securities and cash) as well as certain other assets (including receivables for
securities sold and interest on securities) for an interest in the Portfolio.
The value of a shareholder's investment in the Fund will be the same immediately
after the Fund's investment in the Portfolio as immediately before that
investment. Of course, the value of a shareholder's investment in the Fund may
fluctuate thereafter.
If shareholders approve this Proposal, the Trustees would convert the Fund
to a master-feeder structure during the first half of the year 2000.
Description of the Portfolio
The Portfolio will be a no-load, open-end management investment company
registered under the 1940 Act. The Portfolio Trust was organized as a master
trust fund under New York law on March 27, 1993. The investment objective of the
Portfolio, a series of the Portfolio Trust, is the same as the investment
objective of the Fund. The Portfolio will seek to achieve its investment
objective through investments limited to the types of securities in which the
Fund is authorized to invest. The investment restrictions or policies of the
Portfolio will be such that the Portfolio may not invest in any security or
engage in any transaction which would not be permitted by the investment
restrictions and policies of the Fund if the Fund were to invest directly in
such a security or engage directly in such a transaction.
The investment objective of the Portfolio will not be a fundamental policy.
The approval of the Portfolio's investors (i.e., the Fund and other holders of
interests in the Portfolio) would be required to change any of its fundamental
investment policies or restrictions; however, any change in non-fundamental
investment policies or restrictions would not require such approval. The Fund
would be able to withdraw its investment in the Portfolio at any time if the
Trustees determine, without shareholder approval, that it is in the best
interests of the Fund to do so (including if as a result of any changes in
fundamental or non-fundamental investment policies or restrictions, the Fund's
or the Portfolio's investment objectives, policies or restrictions were no
longer substantially the same). Upon any such withdrawal, the Trustees would
consider what further action might be taken, including investing all the
Investable Assets of the Fund in another pooled investment entity having
substantially the same investment objective as the Fund or the retention of an
investment adviser to manage directly the Fund's assets in accordance with its
investment objective (as is presently the case).
The Portfolio will have its own Board of Trustees, including a majority of
Trustees who are not "interested persons" (as defined in the 1940 Act) of the
Portfolio.
<PAGE>
Modification of Investment Policies and Restrictions
Certain of the Fund's existing fundamental investment restrictions, such as
those limiting investments by the Fund in a single issuer, presently prevent the
Fund from using a master-feeder structure. To provide the Fund with the
flexibility to use a master-feeder structure, the Board of Trustees has approved
a modification to the Fund's fundamental and non-fundamental investment
restrictions by adding the following new investment policy:
"Notwithstanding the investment policies and restrictions of the Fund,
upon approval of the Board of Trustees, the Fund may invest all or part
of its investable assets in a management investment company with
substantially the same investment objective, policies and restrictions as
the Fund."
This additional investment policy would also apply to any non-fundamental
investment policies or restrictions of the Fund, which would otherwise preclude
the Fund from being part of a master-feeder structure.
In addition, under the Trust's Declaration of Trust, a shareholder vote is
required to sell or transfer substantially all of the assets of the Fund. As
conversion to a master-feeder fund structure contemplates an exchange of the
Fund's investable assets for an interest in the Portfolio, as described above,
this conversion requires, under a conservative interpretation of the Trust's
Declaration of Trust, the affirmative vote of a "majority" (as defined in the
1940 Act) of the votes cast in person or by proxy at the Special Meeting for the
Fund.
The Master-Feeder Structure
The Investment Adviser and Administrator. If the Fund invests all of its
Investable Assets in the Portfolio, the Fund would no longer directly require
investment advisory services. For this reason, if the Fund invests all of its
Investable Assets in the Portfolio, the Fund would terminate its investment
advisory agreement with the Adviser. The investment advisory function would then
be performed by the Adviser under an investment advisory agreement with the
Portfolio. The Fund would, therefore, indirectly bear its proportionate share of
the advisory fees paid by the Portfolio pursuant to its investment advisory
agreement with the applicable Adviser rather than pay the applicable Adviser
directly for advisory services. Pursuant to the Portfolio's investment advisory
agreement, the applicable Adviser will be paid a fee at the same rate and
calculated in the same manner as the fee currently being paid by the Fund.
If approved by shareholders and upon exchange of its Investable Assets for
interests in the Portfolio, the Fund and the Portfolio would retain the services
of Bankers Trust under an administration agreement. Under the administration
agreement, Bankers Trust would provide the Fund and the Portfolio with general
office facilities and supervise the overall administration of the Fund.
Currently, for these services, Bankers Trust receives compensation from the Fund
at a rate equal on an annual basis to 0.02% of the Fund's average daily net
assets.
The Fund's net asset value is determined at 5:30 on each day the Fund is
open for business. The Fund uses the amortized cost method to account for any
premiums or discounts above or below the face value of any securities it buys.
This method writes down the premium - or marks up the discount - at a constant
rate until maturity. It does not reflect daily fluctuations in market value. All
cash receivables and current payments are valued at face value. Other assets are
valued at fair value as determined in good faith by the Fund's Board. The Fund's
net asset value will normally be $1.00 a share.
Voting Rights. Interests in the Portfolio will be fully paid and
non-assessable. The Portfolio normally will not hold meetings of holders of such
interests except as required under the 1940 Act. The Portfolio would be required
to hold a meeting of holders in the event that at any time less than a majority
of its Trustees holding office have been elected by holders. The Trustees of the
Portfolio will continue to hold office until their successors are elected and
are qualified. Holders holding a specified percentage of interests in the
Portfolio may call a meeting of holders in the Portfolio for the purpose of
removing any Trustee. A Trustee of the Portfolio may be removed upon the
affirmative vote of two-thirds of the interests held by holders in the Portfolio
qualified to vote in the election. The 1940 Act requires the Portfolio to assist
its holders in calling such a meeting. Upon liquidation of the Portfolio,
holders in the Portfolio would be entitled to share pro rata in the net assets
of the Portfolio available for distribution to holders.
<PAGE>
Each holder in the Portfolio, including the Fund, will be entitled to a
vote in proportion to its percentage interest in the Portfolio. Except as
described below, whenever the Fund is requested to vote on matters pertaining to
the Portfolio, the Fund will hold a meeting of its shareholders and will cast
its votes proportionately as instructed by Fund shareholders that voted at the
Fund meeting. Fund shareholders that do not vote at the Fund meeting will not
affect the Fund's votes at the Portfolio meeting. The percentage of the Fund's
votes representing Fund shareholders not voting will be voted by the Trustees of
the Trust in the same proportion as the Fund's shareholders who do, in fact,
vote.
Subject to applicable statutory and regulatory requirements, the Fund would
not be required to request a vote of its shareholders with respect, to (a) any
proposal relating to the Portfolio, which proposal, if made with respect to the
Fund, would not require the vote of the shareholders of the Fund; or (b) any
proposal with respect to the Portfolio that is identical in all material
respects to a proposal that has previously been approved by shareholders of the
Fund. Any proposal submitted to holders in the Portfolio that is not required to
be voted on by shareholders of the Fund would nonetheless be voted on by the
Trustees of the Trust.
Interest Holder Liability. Investments in the Portfolio will not be
transferable, but a holder may withdraw all or any portion of its investment at
any time at net asset value. Each holder in the Portfolio, including the Fund,
will be liable under the Portfolio's Declaration of Trust for the obligations of
the Portfolio only up to the amount of its interest in the Portfolio. However,
because the Portfolio's Declaration of Trust will disclaim holder liability and
provides for indemnification against such liability, the risk of a holder in the
Portfolio incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance existed and the Portfolio
itself was unable to meet its obligations. As such, it is unlikely that the Fund
would experience liability from the new investment structure itself.
Comparative Expenses
The following table shows the annual expenses for the Fund for the six
months ended December 31, 1999, and a pro forma adjustment that includes the
estimated costs of operating the Fund in the master-feeder fund structure. The
pro forma adjustment assumes, that (a) there were no holders of interests in the
Portfolio other than the Fund; (b) the average daily net assets of the Fund and
the Portfolio were equal to the actual average daily net assets of the Fund
during the period; and (c) the average daily net assets invested by the Fund in
the Portfolio were $6,667,621,280.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Average Annual Fund Operating
Expenses for the six months Aggregate Pro Forma
ended 12/31/991 Expenses2
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Management Fees 0.10% 0.10%
- ---------------------------------------------------------------------------------------------
12b-1 Distribution Expenses None None
- ---------------------------------------------------------------------------------------------
Other Expenses 0.022% 0.022%
- ---------------------------------------------------------------------------------------------
Total Operating Expenses 0.122% 0.122%
- ---------------------------------------------------------------------------------------------
Less: Fee Waivers or Expense
Reimbursement (0.002)% (0.102)%
- ---------------------------------------------------------------------------------------------
Net Expenses 0.12% 0.02%
- ---------------------------------------------------------------------------------------------
</TABLE>
1 For the 16-month period from the Fund's fiscal year ended June 30, 1999,
Bankers Trust contractually agreed to waive its fees and reimburse expenses so
that total expenses would not exceed .12%. On or about the time of the master-
feeder conversion, Bankers Trust will contractually agree to waive its fees
and reimburse expenses so that total expenses will not exceed 0.02%.
2 Pro forma expenses show the projected annual expenses after the conversion to
Master-feeder structure and with an expense cap of 0.02%.
* After expense limitation. See "Expense Limitation" below.
Expense Limitation. As noted above, Bankers Trust has contractually agreed to
waive its expenses. In the absence of the Expense Limitation, the Management Fee
is estimated to be, on a pro forma basis, approximately 0.10% and
<PAGE>
the Total Operating Expenses are estimated to be, on a pro forma basis, 0.12%.
When the contract expires, Bankers Trust may modify such limitation in the
future at its discretion, although it has no current intention to do so.
Example1
Hypothetically assume that the Fund's annual return is 5% and that its
total operating expenses are exactly as described in the column captioned
"Aggregate Pro Forma Expenses." For every $10,000 invested, an investor would
have paid the following expenses if an account were closed after the number of
years indicated:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
1 year 3 years 5 years 10 years
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Current structure $13 $40 $70 $159
- -------------------------------------------------------------------------------------------------
Pro forma $2 $6 $12 $26
- -------------------------------------------------------------------------------------------------
</TABLE>
1 For the 16 months, the expense example takes into account fee waivers and
reimbursements.
The purpose of the table is to assist shareholders in understanding the
various costs and expenses that a shareholder in the Fund will bear directly and
indirectly both under the current structure and on a pro forma basis if the
master-feeder structure is approved. The example is included solely for
illustrative purposes and should not be considered a representation of future
performance or expenses. Actual expenses may be more or less than those shown.
If the Fund were converted to a master-feeder structure, the Fund would
receive the same administrative services under the master-feeder structure at
the same fees as are currently provided to the Fund. Under the New Advisory
Agreements, the Portfolio would receive the same investment advisory services at
the same fee rates as are currently provided to the Fund. The New Advisory
Agreements would, however, be between the applicable Adviser and the Portfolio,
rather than the Fund.
If the Fund is converted to a master-feeder fund structure, actual Total
Operating Expenses to be incurred may vary from the pro forma Total Operating
Expenses indicated above due to changes in the Fund's and the Portfolio's
expenses and net asset value between December 31, 1999 and the conversion date.
Assuming that the Fund was the only holder of an interest in the Portfolio and
that the Fund was fully invested therein, the net asset value per share,
distributions per share and net investment income per share of the Fund would
have been approximately the same on a pro forma basis as the actual net asset
value, distributions and net investment income per share of the Fund during the
period indicated, except for the new Expense Limitation.
Tax Considerations
The Trust anticipates that its contribution of the Fund's Investable Assets
to the Portfolio in exchange for an interest in the Portfolio in the manner
contemplated will not result in the recognition of gain or loss to the Fund for
federal income tax purposes.
As a regulated investment company under the Internal Revenue Code of 1986,
as amended (the "Code"), the Fund does not pay federal income or excise taxes to
the extent that it distributes to shareholders its net investment income and net
realized capital gains in accordance with the timing and other requirements
imposed by the Code. The Portfolio will be organized and intends to conduct its
operations in a manner such that, (a) it also will not be required to pay any
federal income or excise taxes; and (b) the Fund, by investing all of its
Investable Assets in the Portfolio, will be able to continue to qualify as a
regulated investment company under the Code.
At a meeting of the Board held on December 8, 1999 a majority of the
Board, including the Independent Trustees, approved (subject to shareholder
approval) the conversion of the Fund from a stand-alone fund structure to a
master-feeder fund structure. In reaching this conclusion, the Board considered
a number of factors, including the operational efficiencies expected to be
obtained by achieving structural consistency with the other series in the Trust
(most of which presently operate as master-feeder funds); that the fees paid by
the Trust for the advisory, administrative and distributive services provided to
the Fund would remain the same; the economies of scale that may be realized
through conversion to a master-feeder fund structure; and the opportunity that
the conversion
<PAGE>
provides to pursue additional distribution outlets for the Fund. Based on the
factors discussed above and others, the Board determined that the conversion of
the Fund to a master-feeder fund structure is in the best interest of the Fund
and its shareholders.
Therefore, after careful consideration, the Board, including the
Independent Trustees, recommends that the shareholders of the Trust vote "FOR"
the conversion of the Fund to a master-feeder fund structure as set forth in
this Proposal.
If the conversion of the Fund to a master-feeder fund structure is
approved, the Board will proceed to invest all of the Investable Assets of the
Fund in the Portfolio, as described above. If the conversion of the Fund to a
master-feeder fund structure is not approved, the Board will consider whether
any other action is appropriate in the interests of the shareholders.
PROPOSALS IIA, IIB, IIC AND III
The shareholders of the Fund may authorize the Fund to vote on certain
matters as the initial holder in the Portfolio. That vote is expected to take
place just after the Fund's investment in the Portfolio. Specifically it is
expected that the Portfolio will ask its holders to vote to:
. Approve the investment advisory agreement between the Portfolio Trust,
on behalf of the Portfolio, and its investment adviser and/or
sub-adviser; and
. Ratify the selection of PricewaterhouseCoopers LLP as the independent
accountants of the Portfolio.
These proposals are further described below and later in this Proxy Statement.
If authorized by the shareholders, the Trust, on behalf of the Fund, will
cast its votes in favor of each of these proposals. At the present time it is
anticipated that the Fund will initially own substantially all of the interests
in the Portfolio.
PROPOSAL IIA, IIB AND IIC
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 1. 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 investment
sub-adviser with and upon the approval of the Board and of the Independent
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 conversion of the Fund from a stand-alone
fund to a master-feeder fund. The New DAMI Advisory Agreement described in
Proposal IIB and the New Sub-advisory Agreement with Bankers Trust described in
Proposal IIC will permit Deutsche Bank, upon the approval of the Independent
Trustees, to simplify the organizational 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 DAMI Advisory Agreement is needed to permit
Deutsche Bank a sufficient amount of time to plan, prepare and institute the
necessary arrangements for DAMI to consolidate Deutsche Bank's U.S. mutual fund
operations.
Deutsche Bank is the parent company of a group consisting of banks, capital
markets companies, fund management companies, mortgage banks, a property finance
company, installment financing and leasing companies, insurance companies,
research and consultancy companies and other domestic and foreign companies.
- ----------
1 Although unrelated to the master-feeder conversion, on or about the time of
the conversion, Bankers Trust will contractually agree to waive its fees and
reimburse expenses so the total expenses will not exceed 0.02%.
<PAGE>
The Current Advisory Agreement
The Current Advisory Agreement. Bankers Trust has served as investment
adviser to the Fund pursuant to an investment advisory agreement between Bankers
Trust and the Fund (the "Current Advisory Agreement"). The date of the Current
Advisory Agreement is June 4, 1999. The Current Advisory Agreement was most
recently approved by the Board on July 27, 1999. Under the Agreement, the
advisory fee rate is 0.10%. The amount paid by the Trust for services rendered
to the Fund pursuant to the Current Advisory Agreement was $3,353,760./1/
The advisory fee rate charged to the Trust under the Current Advisory
Agreement and the New BT Advisory Agreement would continue to apply under the
New DAMI Advisory Agreement. DAMI, 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
DAMI directly to the sub-adviser. In addition, the Advisers have advised the
Portfolio that it can expect to continue to receive the same level and quality
of services as the Fund has received under the Current 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 Portfolio, the Advisers will apprise and consult with the Board
to ensure that the Board, including a majority 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
effect for an initial term of two years from its effective date, and may be
renewed annually thereafter by specific approval of the Board or by the
shareholders of the Portfolio, provided that they are also approved by a
majority of the Independent Trustees. The terms and conditions of the New
Advisory Agreements, other than the parties and the dates of execution,
effectiveness and initial term, are substantially the same as those of the
Current 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 sub-adviser
with and upon approval of the Board and the Independent Trustees.
If the New DAMI 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 DAMI Advisory Agreement and/or the New
Sub-advisory Agreement, as applicable, is implemented. DAMI, as Adviser, and
Bankers Trust, as sub-adviser, would perform its respective advisory duties and
be paid its respective advisory fees only upon implementation of the applicable
New Advisory Agreement.
Under the terms of the New Advisory Agreements, as under the Current
Advisory Agreement, each of the Advisers agrees to furnish the Portfolio with
investment advisory and other services in connection with a continuous
investment program for the Portfolio, including investment research and
management with respect to all securities, investments, cash and cash
equivalents in the Portfolio. Subject to the supervision and control of the
Board, each of the Advisers agrees to, (a) conform to all applicable rules and
regulations of the Commission, 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 1940 Act and the Investment Advisers Act of
1940, as amended (the "Advisers Act"), and will conduct its activities under the
New Advisory Agreements 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 rendered by it in accordance with the Portfolio's investment objectives
and policies as stated in the Prospectus and Statement of Additional Information
of the Portfolio, as from time to time in effect, and the Portfolio's then
current registration statement on Form N-1A as filed with the Commission and the
then current offering Memorandum if the Fund is not registered under the 1933
Act; (c) place orders pursuant to its investment determinations for the
Portfolio 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
- ----------
/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.
<PAGE>
purchased, sold or retained by the Portfolio; and (e) maintain books and records
with respect to the securities transactions of the Portfolio 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 Portfolio
under the New BT Advisory Agreement and the New DAMI Advisory Agreement is the
same as the investment advisory fee rate charged under the Current Advisory
Agreement. As noted above, the investment advisory fee payable under the New
Sub-advisory Agreement would be paid by DAMI, not the Portfolio, 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 Current 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. On or about the time of the
master-feeder conversion described above, Bankers Trust will contractually agree
to waive its fees so that the total expenses will be lower.
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;
(a) by the Portfolio's Board or by the holders of a majority of the Portfolio's
outstanding voting securities; and (b) by a majority of the Independent Trustees
who are not parties to such contract or agreement. Like the Current 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 Portfolio (as defined
in the 1940 Act and) 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 Portfolio)
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 Portfolio bears certain other expenses including the
fees of the Portfolio's Board. The Portfolio 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 Portfolio 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 Portfolio 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 disregard of
their obligations and duties under the New Advisory Agreements.
The Advisers
Bankers Trust. Bankers Trust is a wholly owned subsidiary of Deutsche Bank.
Bankers Trust is a bank and, therefore, currently not required to register as an
investment adviser under the Advisers Act. Bankers Trust provides a broad range
of commercial banking and financial services, including originating loans and
other forms of credit, accepting deposits and arranging financing. Bankers Trust
also engages in trading currencies, securities, derivatives and commodities. In
addition to providing investment advisory services to the Fund, Bankers Trust
serves as investment adviser to 31 other investment companies and investment
sub-adviser 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 Portfolio, together with information regarding the fees
charged to those companies.) As of December 31, 1999, Bankers Trust had $285
billion of assets under management.
<PAGE>
The names, business addresses and principal occupations of the current
directors and chief executive officer of Bankers Trust are set forth below.
Name and Address Principal Occupation
---------------- --------------------
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 Director, Bankers Trust; Director of various
Shearman & Sterling corporations; Shearman & Sterling, of counsel
599 Lexington Avenue
New York, NY 10022
George B. Beitzel Director, Bankers Trust;
29 King Street Director of various corporations
Chappaqua, NY 10514-3432
William R. Howell Chairman, Bankers Trust;
J.C. Penney Company, Inc. Director of various corporations
P.O. Box 10001
Dallas, TX 75301-1109
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
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
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 to the Fund and the Portfolio by Bankers
Trust after approval of the New Advisory Agreements. The Fund paid fees to
Bankers Trust in the amount of $7,642,794 for these services for the most
recently completed fiscal year.
DAMI is a corporation organized under the laws of the State of Delaware and
is a registered investment adviser under the Advisers Act. It is located at 885
Third Avenue, 32nd Floor, New York, NY 10022. DAMI provides a full range of
investment advisory services to institutional clients. DAMI serves as investment
adviser to 11 other investment companies and is sub-adviser to five other
investment companies. DAMI is a subsidiary of Deutsche Bank. DAMI currently
manages a wide range of pension, corporate, insurance, local authority,
government and private clients worldwide. (See Annex II for a list of those
investment companies that DAMI advises that have investment objectives similar
to those of the Portfolio.)
<PAGE>
The names, business addresses and principal occupations of the current
directors and chief executive officer of DAMI are set forth below. Except as
otherwise indicated, the business address of the individuals named below is 885
Third Avenue, 32nd Floor, New York, NY 10022 and their positions at DAMI
constitute their principal occupation.
<TABLE>
<CAPTION>
Name and Address Principal Occupation
<S> <C>
Richard Marin President and Director, Deutsche Asset
Park Avenue Asset Management, Inc.; Managing Director,
New York, NY 10017 Bankers Trust Company
David Westover Baldt Executive Vice President and Director,
Deutsche Asset Management, Inc.
Audrey Mary Theresa Jones Executive Vice President, Portfolio
Manager and Director, Deutsche Asset Management, Inc.
Robert H. Smith Chairman and Director, Deutsche Asset Management, Inc.;
Chief Executive Officer, Deutsche Asset Management; Inc.
Chairman and Chief Executive Officer, Morgan Grenfell
Development Capital
Steven Schneider Managing Director, Bankers Trust
280 Park Avenue Company
New York, NY 10017
</TABLE>
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 authorities.
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 activities 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
provide investment advisory services to registered investment companies, and
Bankers Trust, pursuant to Section 9(c) of the Act, has filed an application for
a permanent order. The Commission has extended the temporary order under Section
9(c) of the Act until the Commission takes final action on the application for a
permanent order. However, there is no assurance that the Commission will grant a
permanent order.
Recommendation of the Board
At a meeting of the Board held on December 8, 1999 called for the purpose
of, among other things, voting on approval of the New Advisory Agreement with
the Portfolio, the Board, including the Independent Trustees, unanimously
approved the New Advisory Agreement 1. In reaching this conclusion, the Board
obtained from Deutsche Bank and Bankers Trust such information as they deemed
reasonably necessary to approve Bankers Trust
- ----------
1 The Trustees also met on July 15 and July 27, 1999 to discuss the New Advisory
Agreements for the Fund. The details described herein were considered by the
Board collectively at several meetings described herein. These advisory
agreements were approved by shareholders of the Fund on October 8, 1999. The New
Advisory Agreements with the Portfolio are substantially the same as those
approved for the Fund by shareholders in October, except for the parties and the
dates of execution, effectiveness and initial terms.
<PAGE>
as investment adviser to the Portfolio. Additionally, the Board considered a
number of factors, including, among other things, the nature, scope and quality
of services that Bankers Trust would likely provide to the Portfolio; the
quality of the personnel of Bankers Trust; Bankers Trust's commitment 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 Agreement
contains substantially the same terms and conditions as the Current Advisory
Agreement. 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
interest of the Portfolio and its shareholders.
With respect to the approval of the New DAMI Advisory Agreement and the New
Sub-advisory Agreement, the Board obtained from Deutsche Bank and DAMI such
information as it deemed reasonably necessary to approve DAMI as investment
adviser to the Portfolio. The Board considered the same factors described above
for the New BT Advisory Agreement with regard to the New DAMI Advisory Agreement
and the New Sub-advisory Agreement. The Board also considered a number of other
factors, including the capacity of DAMI to perform its duties under the New
Advisory Agreements; the high degree of continuity of investment management
personnel expected to be available to the Portfolio because most of the
personnel of Bankers Trust who provide services under the Current Advisory
Agreement will be employed by DAMI; the financial standings of Deutsche Bank and
DAMI; the benefits to the Portfolio from technological advances being instituted
by Deutsche Bank on a world-wide basis; and the experience and expertise of DAMI
as an investment adviser, as reflected in its amount of assets under management.
The Board was apprised that the deferral in implementing the New DAMI
Advisory Agreement is needed to permit Deutsche Bank a sufficient amount of time
to plan, prepare and institute the necessary arrangements for DAMI to
consolidate Deutsche Bank's U.S. mutual fund operations. The Advisers also
emphasized to the Board that the New DAMI Advisory Agreement and the New
Sub-advisory Agreement 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 December 8, 1999 meeting of the
Board, a majority of the Board, including a majority of the Independent
Trustees, approved the New DAMI Advisory Agreement and the New Sub-advisory
Agreement.
Based on the factors discussed above and others, the Board determined that
the New DAMI 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,
including the Independent Trustees, also were apprised of the guilty pleas
discussed above.
Therefore, after careful consideration, the Board, including the
Independent Trustees, recommends that the shareholders of the Fund vote "FOR"
the approval 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 DAMI 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
shareholders.
PROPOSAL III
RATIFICATION OF THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT
ACCOUNTANTS FOR THE PORTFOLIO AND 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 Portfolio and 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 interest 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.
<PAGE>
Therefore, after careful consideration, the Board, including the
Independent Trustees, recommends that the shareholders of the Trust on behalf of
the Fund vote "FOR" the ratification of the independent accountants as set forth
in this Proposal.
VOTE REQUIRED
Approval of Proposal I with respect to the change in structure and
Proposals IIA, IIB and IIC with respect to the Portfolio's New Advisory
Agreements require the affirmative vote of a "majority" of the outstanding
shares of the Fund. "Majority" (as defined in the 1940 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
outstanding 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 Proposals I, IIA, IIB and IIC, which require the approval of a specified
percentage of the outstanding shares of the Fund.
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 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 I, IIA, IIB, IIC, AND III. ANY UNMARKED PROXIES
WILL BE SO VOTED.
The Board is not aware of any other matters that will come before the
Special 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
shareholders' meeting should send their written proposals to the Secretary of
the Trust at the address set forth on the cover of this Proxy Statement.
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
securities (as defined in the Act) may require the calling of a meeting of
shareholders for the purpose of voting on the removal of any Trustee. Meetings
of shareholders 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.
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. 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
March 3, 2000
<PAGE>
Annex I
INSTITUTIONAL DAILY ASSETS FUND
(a) 5% Shareholders as of February 15, 2000.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Name and address of Beneficial Owner Shares Beneficially Owned Percent Ownership of
Outstanding Shares
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Los Angeles Fire and Police Pension
Mr. Thomas Lopez 997,493,968 11.33%
360 East Second Street
Suite 600
Department of Pensions
Los Angeles, CA 90012-4203
- ----------------------------------------------------------------------------------------------------------------------
Lockheed Martin Corporation 900,642,040 10.23%
Ms. Cora Ingrim
6705 Rockledge Drive
Suite 550
Bethesda, MD 20817
- ----------------------------------------------------------------------------------------------------------------------
Fidelity Commonwealth Trust: Spartan Market Index 563,679,192 6.40%
(500) Fund
Mr. Craig Spurr
82 Devonshire Street
Boston, MA 02109-3614
- ----------------------------------------------------------------------------------------------------------------------
Washington University 529,939,038 6.02%
Ms. Barbara R. Feiner
7425 Forsyth Boulevard
Campus Box 1047
St. Louis, MO 63105
- ----------------------------------------------------------------------------------------------------------------------
Employees Retirement System of the State of Hawaii 485,985,715 5.52%
Mr. Nathan Fisher
201 Merchant Street
Suite 1400
Honolulu, HI 96813-2980
- ----------------------------------------------------------------------------------------------------------------------
(b)Trustees *
- ----------------------------------------------------------------------------------------------------------------------
(c)Executive Officers *
- ----------------------------------------------------------------------------------------------------------------------
(d)Trustees and Executive Officers as a Group *
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
* The Trustees and the executive officers of the Fund and the Trustees and
executive officers as a group own less than 1% of the Fund's outstanding shares.
<PAGE>
Annex II
Funds Advised by Bankers Trust:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Net Assets (As of Most Recently Advisory Fee as a Percentage of
Completed Fiscal Year, 12/30/99) Average Daily Net Assets
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Liquid Assets Portfolio:
- -------------------------------------------------------------------------------------------------------------------------
Includes the following feeder funds:
- -------------------------------------------------------------------------------------------------------------------------
BT Institutional Liquid Assets Fund $3,319,577,659 0.15%
- -------------------------------------------------------------------------------------------------------------------------
BT Institutional Treasury Assets Fund $638,866,440 0.15%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
Funds Advised by DAMI:
None.
<PAGE>
EXHIBIT A
[FORM OF INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENT]
- --------------------------------------------------------
AGREEMENT made as of [_________________] by and between [Trust Name], a (state
of organization) (herein called the "Trust") and [________________] (herein
called the "Investment Adviser") [and [______________] (herein called the
"Investment Subadviser")].
WHEREAS, the Trust is registered as an open-end management investment company
under the Investment Company Act of 1940;
WHEREAS, the Trust desires to retain the Investment Adviser to render investment
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 created in the
future (each, a "Fund") as listed on Exhibit A hereto, and the Investment
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;]7
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 [Investment
-----------
Adviser] [Investment Subadviser] to act as [investment adviser] [investment
subadviser] to each Fund for the period and on the terms set forth in this
Agreement. The [Investment 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] [Investment Subadviser]
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 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: 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; it will place orders pursuant to its investment
determinations for each Fund either directly with the issuer or with any broker
or dealer selected by it. In placing orders with brokers and dealers, the
[Investment Adviser] [Investment Subadviser] 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 commission, 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
portfolio securities to and from brokers and dealers who provide
- ----------
1 Contained in the form of Investment Sub-advisory Agreement only.
<PAGE>
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
[Investment Adviser] [Investment Subadviser] or any of its affiliates exercises
investment discretion. Subject to the review of the [Trust's Board of Trustees]
[Investment Adviser] 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] [Investment 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 particular transaction or the overall
responsibilities of the [Investment Adviser] [Investment Subadviser] with
respect to the accounts as to which it exercises investment discretion; and it
will maintain books and records with respect to the securities transactions of
each Fund and will render to the [Trust's Board of Trustees] [Investment
Adviser] such periodic and special reports as the Board may request.
3. [Subject to the provisions of this Agreement, the duties of the Investment
Subadviser, the portion of portfolio assets that the Subadviser shall manage,
and the fees to be paid the Investment Subadviser by the Investment Adviser
under and pursuant to this Agreement may be adjusted from 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] 1
4. Services Not Exclusive. The investment advisory services rendered by the
----------------------
[Investment Adviser] [Investment Subadviser] hereunder are not to be deemed
exclusive, and the [Investment Adviser] [Investment Subadviser] shall be free to
render similar services to others so long as its services 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 property
of the Trust and further agrees to surrender promptly to the [Trust] [Investment
Adviser] any of such records upon request of the [Trust] [Investment Adviser].
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 securities
(including brokerage commissions, if any) for the Fund.
7. Compensation. For the services provided and the expenses assumed pursuant to
------------
this Agreement, The [Trust] [Investment Adviser] will pay the [Investment
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 Exhibit
A hereto of that Fund's average daily net assets.
8. Limitation of Liability of the [Investment Adviser] [Investment Subadviser]:
---------------------------------------------------------------------------
Indemnification.
- ----------------
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
compensation 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; Subject to the exceptions and
limitations contained in Section 7(c) below:
(i) the [Investment Adviser] [Investment Subadviser] (hereinafter referred 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
- ----------
1 Provision contained in the form of Investment Subadvisory Agreement only.
<PAGE>
involved, as a party or otherwise, by virtue of his being or having been the
[Investment Adviser] [Investment Subadviser] of the Fund, and against amounts
paid or incurred 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 limitation, 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 Adviser] or
to one or more Funds' investors by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved 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 determination 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; by the court or other body approving the settlement; or by at least a
majority of those Trustees who are neither Interested 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 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
appropriate 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 contained herein shall affect any rights to
indemnification to which Trust personnel and any other persons, other than a
Covered Person, may be entitled 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 provided appropriate security for such undertaking or
(ii) the [Trust] [Investment Adviser] shall be insured against losses arising
out of any such advance payments, or (iii) either a majority of the Trustees who
are neither Interested Persons of the Trust 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, shall continue
until the second anniversary of such date. Thereafter, if not terminated, this
Agreement shall continue in effect as to such Fund for successive periods of 12
months each, provided such continuance is specifically approved 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 Interested 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 Outstanding 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 Adviser]. This Agreement will
immediately terminate in the event of its assignment (as used in this Agreement,
the terms "Vote of
<PAGE>
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 constructions 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:
[The [Investment Adviser] [Investment Subadviser] is exempt from registration
under the 1940 Act:]
The [Investment Adviser] [Investment Subadviser] has all requisite authority to
enter into, execute, deliver and perform its obligations under this Agreement;
This Agreement is legal, valid and binding, and enforceable in accordance with
its terms; and
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 covenants
---------
and agrees that, so long as this Agreement shall remain in effect:
The [Investment Adviser] [Investment Subadviser] shall remain either exempt
from, or registered under, the registration provisions of the Advisers Act; and
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, Mutual Funds Services, 130 Liberty Street (One
Bankers Trust Plaza), New York, New York 10006 , [(b) to the Subadviser,
[Address] or ](c) to the Trust, c/o BT Alex. Brown, Incorporated, One South
Street, Baltimore, 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
investor in a Fund, other than shares in that Fund, which arise out of any
action or inaction of the [Trust] [Investment Adviser] under this Agreement.
15. Miscellaneous. The captions in this Agreement are included for convenience
-------------
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]
<PAGE>
EXHIBIT A
- ---------
TO
INVESTMENT ADVISORY AGREEMENT
MADE AS OF ____________________
BETWEEN
[Trust Name] AND [______________]
Fund Investment Advisory Fee
- ---- -----------------------
<PAGE>
FORM OF PROXY CARD
BT INSTITUTIONAL FUNDS
INSTITUTIONAL DAILY ASSETS FUND
One South Street, Baltimore, Maryland
PROXY FOR THE SPECIAL MEETING OF STOCKHOLDERS
11:00 A.M., Eastern time, on Thursday, March 23, 2000
The undersigned hereby appoints Daniel O. Hirsch and Amy M. Olmert to 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 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 I, IIA, IIB, IIC and III. All ABSTAIN votes will be counted only in
determining the existence of a quorum at the Special Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES WITH RESPECT TO THE
INSTITUTIOANL DAILY ASSETS FUND. THE BOARD OF TRUSTEES RECOMMENDS A VOTE "FOR"
PROPOSALS I, IIA, IIB, IIC AND III.
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, dated March 3, 2000 (the "Proxy Statement"), is hereby
acknowledged.
To vote by Telephone
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Call 1-800-690-6903
3) Enter the 12-digit control number set forth on the Proxy card and follow
the instructions.
<PAGE>
Please mark boxes in blue or black ink.
Vote on Proposals
I.
Approval of conversion of the Fund's structure from a stand-alone fund
structure to a master-feeder structure whereby the Fund would invest all if
its investable assets in a the Daily Assets Portfolio.
FOR AGAINST ABSTAIN
IIA.
Approval of New Investment Advisory Agreement between the Portfolio and
Bankers Trust Company.
FOR AGAINST ABSTAIN
IIB.
Approval of New Investment Advisory Agreement between the Portfolio and
Deutsche Asset Management, Inc.
FOR AGAINST ABSTAIN
IIC.
Approval of New Investment Sub-advisory Agreement among the Portfolio,
Deutsche Asset Management, Inc., and Bankers Trust Company.
FOR AGAINST ABSTAIN
III.
Ratification of the selection of PricewaterhouseCoopers LLP as the
independent accountants of the Fund and its corresponding Portfolio.
FOR AGAINST ABSTAIN
- --------------------------------------------------------------------------------
PLEASE SIGN AND DATE BELOW AND MAIL THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
----------------------------------------------
(Title or Authority)
----------------------------------------------
(Signature)
----------------------------------------------
(Signature)
Dated: [____________________________], 2000
(Joint owners should EACH sign. Please sign
EXACTLY as your name(s) appears on this card.
When signing as attorney, trustee, executor,
administrator, guardian or corporate officer,
please give your FULL title below.)
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT, PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
