As filed with the Securities and Exchange Commission on February 29, 1996
Registration No. 33-______
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
[ ]Pre-Effective Amendment No.__ [ ]Post-Effective Amendment No.__
BT PYRAMID MUTUAL FUNDS
(Exact Name of Registrant as Specified in Charter)
Area Code and Telephone Number: (617) 423-0800
6 ST. JAMES AVENUE, BOSTON, MASSACHUSETTS 02116
(Address of Principal Executive Offices) (Zip code)
Philip W. Coolidge
Signature Broker-Dealer Services, Inc.
6 St. James Avenue
Boston, Massachusetts 02116
(Name and Address of Agent for Service)
copy to:
Burton M. Leibert, Esq.
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022
Approximate date of proposed public offering: As soon as possible after the
effective date of this Registration Statement.
- -------------------------------------------------------------------------------
Registrant has registered an indefinite amount of securities pursuant to Rule
24f-2 under the Investment Company Act of 1940. Accordingly, no fee is payable
herewith. Registrant's Rule 24f-2 Notice for the fiscal year ended December 31,
1994 was filed with the Securities and Exchange Commission on February 27, 1995.
Registrant's Rule 24f-2 Notice for the fiscal year ended December 31, 1995 will
be filed with the Securities and Exchange Commission on or about February 29,
1996.
Registrant hereby amends this Registration Statement on such date or dates as
may be necessary to delay its effective date until the Registrant shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
BT0487B
<PAGE>
BT PYRAMID MUTUAL FUNDS
CONTENTS OF
REGISTRATION STATEMENT
This Registration Statement contains the following pages and documents:
Front Cover
Contents Page
Cross-Reference Sheet
Letter to Shareholders
Notice of Special Meeting
Part A - Prospectus/Proxy Statement
Part B - Statement of Additional Information
Part C - Other Information
Signature Page
Exhibits
<PAGE>
BT PYRAMID MUTUAL FUNDS
FORM N-14 CROSS REFERENCE SHEET
Pursuant to Rule 481(a) Under the Securities Act of 1933
================================================================================
Prospectus/Proxy
PART A ITEM NO. AND CAPTION STATEMENT CAPTION
- --------------------------------------------------------------------------------
Item 1. Beginning of Cover Page; Cross Reference Sheet
Registration Statement
and Outside Front Cover
Page of Prospectus
- --------------------------------------------------------------------------------
Item 2. Beginning and Outside Table of Contents
Back Cover Page of
Prospectus
- --------------------------------------------------------------------------------
Item 3. Synopsis Information Summary; Comparison of Investment
and Risk Factors Objectives and Policies
- --------------------------------------------------------------------------------
Item 4. Information About the Summary; Reasons for the
Transaction Reorganization; Information About
the Reorganization; Information on
Shareholders' Rights; Exhibit A
(Agreement and Plan of
Reorganization)
- --------------------------------------------------------------------------------
Item 5. Information About the Cover Page; Summary; Information
Registrant About the Reorganization;
Comparison of
Investment Objectives
and Policies;
Information on
Shareholders' Rights;
Additional
Information About The
Acquiring Fund and
The Acquired Fund;
Prospectus of BT
Investment Limited
Term U.S. Government
Securities Fund dated
April 28, 1995.
- -------------------------------------------------------------------------------
Item 6. Information About the Summary; Information About the
Company Being Acquired Reorganization; Comparison of
Investment Objectives and
Policies; Information on
Shareholders' Rights; Additional
Information About The Acquiring
Fund and The Acquired Fund
- --------------------------------------------------------------------------------
Item 7. Voting Information Summary; Information About the
Reorganization; Information on
Shareholders' Rights; Voting
Information
- --------------------------------------------------------------------------------
Item 8. Interest of Certain Financial Statements and Experts;
Persons and Experts Legal Matters
<PAGE>
- --------------------------------------------------------------------------------
Item 9. Additional Information Not Applicable
Required for Re-
offering By Persons
Deemed to be
Underwriters
- --------------------------------------------------------------------------------
================================================================================
================================================================================
Statement of Additional
PART B ITEM NO. AND CAPTION Information
INFORMATION CAPTION
- --------------------------------------------------------------------------------
Item Cover Page Cover Page
10.
- --------------------------------------------------------------------------------
Item Table of Contents Cover Page
11.
- --------------------------------------------------------------------------------
Item Additional Information Cover Page; Statement of
12. About the Registrant Additional Information of the
Acquiring Fund
- --------------------------------------------------------------------------------
Item Additional Information Not Applicable
13. About the Company Being
Acquired
- --------------------------------------------------------------------------------
Item Financial Statements Annual Report of the Acquired
14. Fund; Annual Report of the
Acquiring Fund;
Pro Forma Financial Statements
- --------------------------------------------------------------------------------
================================================================================
================================================================================
PART C ITEM NO. AND CAPTION OTHER INFORMATION CAPTION
- --------------------------------------------------------------------------------
15. A caption "Information on
Shareholders' Rights -- Liability
of Trustees"
- --------------------------------------------------------------------------------
Item Exhibits Exhibits
16.
- --------------------------------------------------------------------------------
Item Undertakings Undertakings
17.
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================================================================================
<PAGE>
A SPECIAL NOTICE TO SHAREHOLDERS OF
BT INSTITUTIONAL FUNDS --
SHORT/INTERMEDIATE U.S. GOVERNMENT SECURITIES FUND
YOUR VOTE IS IMPORTANT
Dear Shareholder:
The Board of Trustees of BT Institutional Funds (the "Trust") has recently
reviewed and unanimously endorsed a proposal for a reorganization of
Short/Intermediate U.S. Government Securities Fund (the "Fund"), a series of the
Trust, which it judges to be in the best interests of the Fund's shareholders.
UNDER THE TERMS OF THE PROPOSAL, BT INVESTMENT LIMITED TERM U.S. GOVERNMENT
SECURITIES FUND (THE "ACQUIRING FUND") WOULD ACQUIRE ALL OR SUBSTANTIALLY ALL OF
THE ASSETS AND LIABILITIES OF THE FUND. After such transfer, the Fund would be
liquidated and you would become a shareholder of the Acquiring Fund, having
received shares of beneficial interest in an aggregate value equal to the
aggregate value of your investment in the Fund at the time of the transaction.
Because both the Fund and the Acquiring Fund invest all of their assets in the
same registered investment company, the Short/Intermediate U.S. Government
Securities Portfolio, the assets of the Fund will continue to be invested in the
same portfolio securities following the proposed transaction.
The Board of Trustees of the Trust has determined that it is in your best
interests to combine the Fund with the Acquiring Fund. In making this
determination, the Board considered, among other things, that although the
annual operating expenses of the Acquiring Fund, after reimbursements or
waivers, will be greater than the current annual operating expenses of the Fund,
after reimbursements or waivers, the service providers of the Fund have
indicated that they are unwilling to continue reimbursing or waiving the
operating expenses of the Fund. The Board was further informed that it is
anticipated that the service providers of the Acquiring Fund will continue their
reimbursements or waivers and, therefore, absent the reorganization, the annual
operating expenses of the Fund would be greater than the annual operating
expenses of the Acquiring Fund after reimbursements or waivers. In addition, the
Board considered that the investment objective of the Fund is the same as the
investment objective of the Acquiring Fund and that the reorganization would, in
the opinion of counsel, be free from federal income taxes to you, the Fund and
the Acquiring Fund.
SPECIAL MEETING OF SHAREHOLDERS: YOUR VOTE IS IMPORTANT
To consider this transaction, we have called a Special Meeting of Shareholders
to be held on April __, 1996. WE STRONGLY INVITE YOUR PARTICIPATION BY ASKING
YOU TO REVIEW, COMPLETE AND RETURN YOUR PROXY PROMPTLY.
<PAGE>
Detailed information about the proposed transaction is described in the enclosed
proxy statement. On behalf of the Board, I thank you for your participation as a
shareholder and urge you to please exercise your right to vote by completing,
dating and signing the enclosed proxy card. A self-addressed, postage-paid
envelope has been enclosed for your convenience.
If you have any questions about the proposed transaction, please feel free to
call your financial consultant.
IT IS VERY IMPORTANT THAT YOUR VOTING INSTRUCTIONS
BE RECEIVED PROMPTLY
Sincerely,
PHILIP W. COOLIDGE
President
March __, 1996
<PAGE>
BT INSTITUTIONAL FUNDS--
SHORT/INTERMEDIATE U.S. GOVERNMENT SECURITIES FUND
6 St. James Avenue
Boston, Massachusetts 02116
------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held on April __, 1996
------------------
To Our Shareholders:
Notice is hereby given that a Special Meeting of the Shareholders (the
"Meeting") of Short/Intermediate U.S. Government Securities Fund (the "Fund"), a
separate series of BT Institutional Funds (the "Trust"), will be held at the
offices of the Trust at 6 St. James Avenue, 9th Floor, Boston, Massachusetts on
April __, 1996, commencing at 9:30 a.m. for the following purposes:
1. To consider and act upon the Agreement and Plan of
Reorganization (the "Plan") dated as of February 9,
1996 providing for (i) the acquisition of all or
substantially all of the assets of the Fund by BT
Investment Limited Term U.S. Government Securities
Fund (the "Acquiring Fund"), a series of BT Pyramid
Mutual Funds, in exchange for shares of beneficial
interest of the Acquiring Fund and the assumption by
the Acquiring Fund of certain scheduled liabilities
of the Fund; (ii) the distribution of such shares of
the Acquiring Fund to shareholders of the Fund in
liquidation of the Fund; and (iii) the subsequent
termination of the Fund.
2. To transact such other business as may properly come
before the Meeting or any adjournment or adjournments
thereof.
The Trustees of the Trust have fixed the close of business on March __,
1996 as the record date for the determination of shareholders of the Fund
entitled to notice of and to vote at the Meeting and any adjournment or
adjournments thereof.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS WHO DO
NOT EXPECT TO ATTEND THE SPECIAL MEETING ARE URGED TO SIGN AND RETURN WITHOUT
DELAY THE ENCLOSED PROXY CARD IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO
POSTAGE, SO THAT THEIR SHARES MAY BE REPRESENTED AT THE MEETING. INSTRUCTIONS
FOR THE PROPER EXECUTION OF PROXY CARDS ARE SET FORTH ON THE FOLLOWING PAGE.
By Order of the Board of Trustees
THOMAS M. LENZ, SECRETARY
March __, 1996
YOUR PROMPT ATTENTION TO THE ENCLOSED PROXY WILL HELP TO AVOID THE EXPENSE OF
FURTHER SOLICITATION.
<PAGE>
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of
assistance to you and avoid the time and expense involved in validating your
vote if you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in
the registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the
party signing should conform exactly to the name shown in the
registration on the proxy card.
3. All Other Accounts: The capacity of the individual signing the
proxy card should be indicated unless it is reflected in the
form of registration. For example:
REGISTRATION VALID SIGNATURE
CORPORATE ACCOUNTS
(1) ABC Corp. .. . . . . . . . . . . . . ABC Corp.
(2) ABC Corp. .. . . . . . . . . . . . . John Doe, Treasurer
(3) ABC Corp.
c/o John Doe, Treasurer . . . . . John Doe
(4) ABC Corp. Profit Sharing Plan . . . John Doe, Trustee
TRUST ACCOUNTS
(1) ABC Trust . . . . . . . . . . . . . Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d 12/28/78 . . . . . . . . . . Jane B. Doe
CUSTODIAL OR ESTATE ACCOUNTS
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr. UGMA . . John B. Smith
(2) John B. Smith . . . . . . . . . . . John B. Smith, Jr.,
Executor
<PAGE>
PROSPECTUS/PROXY STATEMENT
DATED MARCH __, 1996
ACQUISITION OF THE ASSETS OF
SHORT/INTERMEDIATE U.S. GOVERNMENT SECURITIES FUND
A SEPARATE SERIES OF
BT INSTITUTIONAL FUNDS
6 ST. JAMES AVENUE
BOSTON, MASSACHUSETTS 02116
(617)423-0800
BY AND IN EXCHANGE FOR SHARES OF
BT INVESTMENT LIMITED TERM U.S. GOVERNMENT SECURITIES FUND
A SEPARATE SERIES OF
BT PYRAMID MUTUAL FUNDS
6 ST. JAMES AVENUE
BOSTON, MASSACHUSETTS 02116
(617) 423-0800
This Prospectus/Proxy Statement is being furnished to shareholders of
Short/Intermediate U.S. Government Securities Fund (the "Acquired Fund"), a
series of BT Institutional Funds (the "Institutional Trust"), in connection with
a proposed plan of reorganization to be submitted to shareholders of the
Acquired Fund for consideration at a Special Meeting of Shareholders to be held
on April __, 1996 at 9:30 a.m. (the "Meeting"), at the offices of the
Institutional Trust at 6 St. James Avenue, 9th Floor, Boston, Massachusetts, or
any adjournment or adjournments thereof.
The plan provides for the acquisition of all or substantially all of
the assets of the Acquired Fund by BT Investment Limited Term U.S. Government
Securities Fund (the "Acquiring Fund"), a series of BT Pyramid Mutual Funds (the
"Pyramid Trust"), in exchange for shares of beneficial interest of the Acquiring
Fund and the assumption by the Acquiring Fund of certain scheduled liabilities
of the Acquired Fund (collectively, the Acquired Fund and the Acquiring Fund are
referred to herein as the "Funds"). Following the exchange, shares of the
Acquiring Fund will be distributed to shareholders of the Acquired Fund in
liquidation of the Acquired Fund, and the Acquired Fund will be terminated
(collectively, such transactions are referred to herein as the
"Reorganization"). As a result of the proposed Reorganization, each shareholder
of the Acquired Fund will receive that number of shares of the Acquiring Fund
having an aggregate value equal to the aggregate value of such shareholder's
shares of the Acquired Fund.
The Acquired Fund and the Acquiring Fund are each a series of separate
trusts, each registered with the Securities and Exchange Commission (the "SEC")
as an open-end management investment company. The investment objective of both
Funds is to seek a high level of current income consistent with the preservation
of capital. The Institutional Trust and the Pyramid Trust currently seek to
achieve the investment objective of the Acquired Fund and the Acquiring Fund,
respectively, by investing each Fund's investable assets ("Assets") in a
registered investment company having the same investment objective as the Fund.
Currently, all of the Assets of the Acquired Fund and the Acquiring Fund are
invested in the same registered investment company: the
<PAGE>
Short/Intermediate U.S. Government Securities Portfolio (the "Portfolio"). The
Reorganization is structured to be tax-free for federal income tax purposes to
shareholders and to both the Funds and the Portfolio.
The investment characteristics of the Acquired Fund and the Acquiring
Fund correspond directly to those of the Portfolio. The investment objectives of
the Funds and the Portfolio are described under "Comparison of Investment
Objectives and Policies" in this Prospectus/Proxy Statement. Bankers Trust is
the investment adviser of the Portfolio (the "Adviser"). Since all of the Funds'
Assets are invested in the Portfolio, neither the Institutional Trust nor the
Pyramid Trust retains a separate investment adviser for the Acquired Fund or the
Acquiring Fund.
This Prospectus/Proxy Statement, which should be retained for future
reference, sets forth concisely the information about the Acquiring Fund that a
prospective investor should know before investing. Certain relevant documents
listed below, which have been filed with the SEC, are incorporated in whole or
in part by reference. A Statement of Additional Information dated March __,
1996, relating to this Prospectus/Proxy Statement and the Reorganization, has
been filed with the SEC and is incorporated by reference into this
Prospectus/Proxy Statement. A copy of such Statement of Additional Information
is available upon request and without charge by writing to the Acquired Fund at
the address listed on the cover page of this Prospectus/Proxy Statement or by
calling toll-free 1-800-422-6577. Similarly, a copy of the most recent annual
report of the Acquired Fund also is available upon request and without charge by
writing to the Acquired Fund at the address listed on the cover page of this
Prospectus/Proxy Statement or by calling toll-free 1-800-422-6577.
1. The Prospectus of the Acquiring Fund dated April 28, 1995 is
incorporated in its entirety by reference and a copy is
included herein.
2. The Prospectus of the Acquired Fund dated April 28, 1995 is
incorporated in its entirety by reference.
Also accompanying this Prospectus/Proxy Statement as Exhibit A is a
copy of the Agreement and Plan of Reorganization (the "Plan") for the proposed
transaction.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS/PROXY STATEMENT. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
PAGE
SUMMARY................................................................. 4
REASONS FOR THE REORGANIZATION.......................................... 8
INFORMATION ABOUT THE REORGANIZATION.................................... 9
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES........................ 12
INFORMATION ON SHAREHOLDERS' RIGHTS..................................... 13
ADDITIONAL INFORMATION ABOUT THE ACQUIRING FUND
AND THE ACQUIRED FUND................................................... 15
OTHER BUSINESS.......................................................... 15
VOTING INFORMATION...................................................... 15
FINANCIAL STATEMENTS AND EXPERTS........................................ 17
EXHIBIT A: AGREEMENT AND PLAN OF REORGANIZATION.........................A-1
ADDITIONAL MATERIALS
Prospectus of the BT Investment Limited Term U.S. Government Securities Fund
dated April 28, 1995.
<PAGE>
SUMMARY
THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
ADDITIONAL INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS/PROXY STATEMENT,
THE AGREEMENT AND PLAN OF REORGANIZATION, A COPY OF WHICH IS ATTACHED TO THIS
PROSPECTUS/PROXY STATEMENT AS EXHIBIT A, THE ACCOMPANYING PROSPECTUS OF THE
ACQUIRING FUND DATED APRIL 28, 1995, AND THE PROSPECTUS OF THE ACQUIRED FUND
DATED APRIL 28, 1995.
The Plan provides for the transfer of all or substantially all of the
assets of the Acquired Fund to the Acquiring Fund in exchange for shares of
beneficial interest of the Acquiring Fund and the assumption by the Acquiring
Fund of certain scheduled liabilities of the Acquired Fund. The Acquired Fund
would then distribute such shares of the Acquiring Fund to its shareholders in
liquidation of the Acquired Fund. As a result of the Reorganization, each
shareholder of the Acquired Fund will become the owner of that number of full
and fractional shares of the Acquiring Fund having an aggregate value equal to
the aggregate value of the shareholders shares of the Acquired Fund as of the
close of business on the date that the Acquired Fund's assets are exchanged for
shares of the Acquiring Fund. Following the Reorganization, the Acquired Fund
will be terminated. See "Information About the Reorganization - Plan of
Reorganization."
For the reasons set forth below under "Reasons for the Reorganization,"
the Board of Trustees of the Institutional Trust, including a majority of the
Trustees who are not "interested persons" as that term is defined in the
Investment Company Act of 1940, as amended (the "1940 Act") (the "Independent
Trustees"), has unanimously concluded that the Reorganization would be in the
best interests of the shareholders of the Acquired Fund and that the
transactions contemplated by the Reorganization will not dilute the interests of
the existing shareholders of the Acquired Fund. Similarly, the Board of Trustees
of the Pyramid Trust, including the Independent Trustees of the Board, has
unanimously concluded that the Reorganization would be in the best interests of
the Acquiring Fund and that the transactions contemplated by the Reorganization
will not dilute the interests of the existing shareholders of the Acquiring
Fund. The Board of Trustees of the Institutional Trust has, therefore, submitted
the Plan for approval by the Acquired Fund's shareholders.
Approval of the Reorganization will require the affirmative "vote of a
majority of the outstanding voting securities" of the Acquired Fund. Under the
1940 Act, this means that to be approved, the proposal must receive the
affirmative vote of the lesser of (a) 67% of the shares of the Acquired Fund
present at the Meeting, if the holders of more than 50% of the outstanding
shares of the Acquired Fund are present or represented by proxy, or (b) more
than 50% of the outstanding shares of the Acquired Fund. See "Voting
Information."
TAX CONSEQUENCES. Prior to completion of the Reorganization, the Funds
will have received an opinion of counsel that, upon the Reorganization, no gain
or loss will be recognized by the Acquired Fund or its shareholders for federal
income tax purposes. The holding period and aggregate tax basis of the Acquiring
Fund shares that are received by an Acquired Fund shareholder will be the same
as the holding period and aggregate tax basis of the shares
-4-
<PAGE>
of the Acquired Fund previously held by such shareholder. See "Information About
the Reorganization - Federal Income Tax Consequences."
The Portfolio is structured as a partnership for federal income tax
purposes and allocates its realized capital gains and losses to the Funds
annually at the end of its taxable year. As a consequence, it is expected that
no realized capital gains will have been allocated to the Acquired Fund.
Instead, the Portfolio will allocate all of its capital gains and losses to the
Acquiring Fund, which will make a pro rata distribution of any net capital gains
to its shareholders (including the former shareholders of the Acquired Fund). As
a result of the Reorganization, shareholders of both Funds may receive a
different amount of capital gains distributions than the amount they would have
received had the Reorganization not occurred.
INVESTMENT OBJECTIVES AND POLICIES. The Acquired Fund and the Acquiring
Fund have the same investment objective and investment policies. The investment
objective of both Funds is to seek a high level of current income consistent
with preservation of capital. For a discussion of the investment policies of the
Acquiring Fund and the Acquired Fund, see "Comparison of Investment Objectives
and Policies."
MASTER-FEEDER FUND STRUCTURE. The Institutional Trust and the Pyramid
Trust seek to achieve the investment objective of the Acquired Fund and the
Acquiring Fund, respectively, by investing each Fund's Assets in a separate
registered investment company having the same investment objective as the Funds.
Currently, all of the Assets of the Acquired Fund and the Acquiring Fund are
invested in the Portfolio. Due to this structure, an investor's interest in the
securities of the Portfolio is indirect, like investments in other investment
companies and pooled investment vehicles. In addition, the Portfolio also may
sell beneficial interests to other mutual funds or institutional investors on
the same terms and conditions as it sells to the Funds. Such other investors may
sell their shares at a different public offering price than either of the Funds,
which may cause shareholders to experience different returns. Information
concerning other holders of interests in the Portfolio is available from Bankers
Trust at 1-800-545-1074.
FEES AND EXPENSES. The following table provides: (1) a summary of the
aggregate annual operating expenses of the Acquiring Fund and the Portfolio; (2)
a summary of expenses relating to purchases and sales of shares of the Acquired
Fund, and the aggregate annual operating expenses of the Acquiring Fund and the
Portfolio; and (3) a pro forma summary of expenses relating to purchases and
sales of shares of the Acquiring Fund, and the aggregate annual operating
expenses of the Acquiring Fund and the Portfolio, following the Reorganization.
The table also illustrates the dollar cost of such expenses on a $1,000
investment in the Funds. The Trustees of the Pyramid Trust believe that the
aggregate per share expense of the Acquiring Fund and the Portfolio will be less
than or approximately equal to the expenses which the Acquiring Fund would incur
if the Pyramid Trust retained services of an investment adviser and the assets
of the Acquiring Fund were invested directly in the type of securities being
held by the Portfolio.
-5-
<PAGE>
ANNUAL OPERATING EXPENSES
(AS A PERCENTAGE OF THE AVERAGE DAILY NET ASSETS OF THE FUNDS)
<TABLE>
<CAPTION>
ACQUIRING FUND ACQUIRED FUND PRO FORMA
<S> <C> <C> <C>
Investment advisory fee 0.20% 0.20% 0.20%
(after reimbursements or
waivers)
12b-1 fees 0.00% 0.00% 0.00%
Other expenses
(after reimbursements or
waivers) 0.40% 0.30% 0.40%
Total operating expenses
(after reimbursements or
waivers) 0.60% 0.50% 0.60%
</TABLE>
Example
You would pay the following expenses on a $1,000 investment assuming: (1) 5%
annual return and (2) redemption at the end of each time period.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
ACQUIRING FUND $6 $19 $33 $75
ACQUIRED FUND $5 $16 $28 $63
PRO FORMA $6 $19 $33 $75
</TABLE>
Management fees paid to Bankers Trust by the Portfolio include an investment
advisory fee, computed daily and paid monthly, at the annual rate of 0.20% of
the average daily net assets of the Portfolio. Bankers Trust has agreed
voluntarily to waive a portion of its advisory fee. Without such waiver, the
Portfolio's investment advisory fee would be equal to 0.25%.
Both the Institutional Trust and the Pyramid Trust also have adopted
for the Acquired Fund and the Acquiring Fund, respectively, a plan of
distribution pursuant to Rule 12b-1 under the 1940 Act which permits the
reimbursements of distribution expenses in amounts up to 0.20% of average net
assets are authorized to be made. Neither Trust, however, expects that any
payments actually will be made under those plans in the foreseeable future.
Total operating expenses, before reimbursements or waivers, for the
fiscal year ended December 31, 1995 were 1.99% for the Acquired Fund and 0.84%
for the Acquiring Fund. Bankers Trust and Signature Broker-Dealer Services, Inc.
("Signature"), the distributor of shares of the Funds, had agreed, however, to
waive or reimburse expenses such that the total operating expenses of the
Acquired Fund would not exceed 0.50% of the Acquired Fund's average net assets
annually, and the total operating expenses of the Acquiring Fund would not
exceed 0.60%. The service providers of the Acquired Fund have indicated that
they are unwilling to continue reimbursing or waiving the operating expenses of
the Acquired Fund, in which case the annual operating expenses of the Acquired
Fund in the absence of the Reorganization would be greater than the annual
operating expenses of the Acquiring Fund, after reimbursements or waivers. In
effecting the Reorganization it is estimated that the expense
-6-
<PAGE>
ratio for the shares of the Acquiring Fund would be 0.81% (before reimbursements
or waivers). It is anticipated, however, that the service providers to the
Acquiring Fund and the Portfolio will continue their waivers or expense
reimbursements for the benefit of shareholders of the Acquiring Fund so that
total operating expenses of the Acquiring Fund will not exceed 0.60%. Because
such waivers or expense reimbursements are voluntary, there is no assurance that
the service providers to the Funds and the Portfolio will be willing to continue
to waive a portion of their fees or reimburse expenses in the future.
EXCHANGE PRIVILEGES. Shareholders of both of the Funds currently are
entitled to exchange their shares for shares of certain other funds in the BT
Family of Funds registered in their state. It is anticipated that, after the
Reorganization, the same exchange privileges will continue with respect to
shareholders of the Acquiring Fund. Any exchange will be a taxable event for
which a shareholder may have to recognize a gain or loss under federal income
tax provisions. The Acquiring Fund reserves the right to terminate or modify the
exchange privilege in the future.
DIVIDENDS. Each Fund has the same policies with respect to the
distribution of dividends. Each Fund distributes substantially all of its net
investment income and capital gains to shareholders each year. Income dividends
are declared daily and paid monthly. Any net capital gains are distributed in
December. Unless a shareholder has instructed the Funds to pay dividends and
distributions in cash, each Fund reinvests dividends and distributions
automatically in additional shares of that Fund. Subsequent to the
Reorganization, Acquired Fund shareholders who have elected to receive dividends
and distributions in cash will continue to receive distributions in such manner
from the Acquiring Fund. Such shareholders may elect at any time to have their
dividends and distributions reinvested automatically in additional shares of the
Acquiring Fund by contacting the Trust. See "Dividends, Distributions and Taxes"
in the accompanying Prospectus of the Acquiring Fund.
PURCHASE AND REDEMPTION PROCEDURES. Purchase of shares of either Fund
currently may be made through Bankers Trust, as the Trusts' transfer agent, or
through another bank or a dealer or other institution that has a sub-servicing
agreement with Bankers Trust. Each Fund's shares are sold continuously at their
net asset value next determined after a purchase order is received and becomes
effective. Bankers Trust currently serves as transfer agent to both of the Funds
and will remain as transfer agent to the Acquiring Fund. See "Purchase and
Redemption of Shares - Purchase of Shares" in the accompanying Prospectus of the
Acquiring Fund.
Shareholders of either Fund may redeem their shares without charge on
any day such Fund calculates its net asset value. Redemption requests received
prior to the close of regular trading on the New York Stock Exchange Inc. (the
"NYSE") are priced at the net asset value per share determined on that day;
otherwise, redemption requests are priced at the net asset value as next
determined. See "Purchase and Redemption of Shares - Redemption of Shares" in
the accompanying Prospectus of the Acquiring Fund.
SHAREHOLDERS' RIGHTS. The Acquired Fund and the Acquiring Fund are each
a series of Trusts which are business trusts organized under the laws of The
Commonwealth of Massachusetts. As a result, shareholders of the Acquiring
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Fund and the Acquired Fund have similar voting rights. For example, neither Fund
holds an annual meeting of shareholders, and there is normally no meeting of
shareholders for the purpose of electing Trustees unless and until such time as
less than a majority of the Trustees holding office have been elected by the
shareholders. In addition, under the laws of The Commonwealth of Massachusetts,
shareholders of the Acquired Fund do not have appraisal rights in connection
with a combination or acquisition of the assets of the Acquired Fund by another
entity. Shareholders of the Acquired Fund may however, redeem their shares at
net asset value prior to the date of the Reorganization. See "Information on
Shareholders' Rights."
INVESTMENT RISKS. Due to the corresponding investment objectives and
policies of the Acquiring Fund and the Acquired Fund, an investment in the
Acquiring Fund involves investment risks that are identical to those of the
Acquired Fund. Such risks are those generally associated with investing
primarily in high quality instruments with short to intermediate-term
maturities. For a full description of the risks involved in investing in the
Acquiring Fund, refer to "Risk Factors; Matching the Fund to Your Investment
Needs" in the accompanying Prospectus of the Acquiring Fund.
REASONS FOR THE REORGANIZATION
The Boards of Trustees of each Trust have determined that it is
advantageous to combine the Acquired Fund with the Acquiring Fund. In reaching
this conclusion, the Boards considered a number of factors as described below.
Among other factors, each Board considered the fact that the Acquiring
Fund and the Acquired Fund each invest substantially all of their Assets in the
same Portfolio and, accordingly, can expect to have identical investment
performance except to the extent that such performance may deviate due to
differences in Fund expenses. Although the expense ratio of shareholders in the
Acquired Fund effectively will be increased from 0.50% to 0.60%, the Board of
Trustees of the Institutional Trust considered that the service providers to the
Acquired Fund indicated their unwillingness to continue to waive or reimburse
expenses of the Acquired Fund in the absence of the Reorganization. In the
absence of any waiver or reimbursement by the Acquired Fund's service providers,
the expense ratio of the Acquired Fund would be _______. The Boards also
considered that a reduction in expenses is expected to be realized (not giving
effect to any waiver or reimbursement) as a result of the elimination of
duplicative costs presently incurred for services that are performed for both
Funds and that such reduction in expenses would make it easier for the Funds'
service providers to continue to waive or reimburse expenses such that total
operating expenses of the Acquiring Fund will not exceed 0.60% of average net
assets annually.
The Boards also considered that each of the Funds invests all of its
Assets in the Portfolio and the fact that the Funds and the Portfolio share the
same service providers, including the investment adviser to the Portfolio and
the administrator, custodian and transfer agent to the Funds and the Portfolio.
Further, the Board considered that the Reorganization would be effected as a
tax-free reorganization.
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In light of the foregoing, the Board of Trustees of the Institutional
Trust, including the Independent Trustees, has decided that the Reorganization
is in the best interests of the Acquired Fund and its shareholders. The Board of
Trustees of the Institutional Trust also has determined that the Reorganization
would not result in a dilution of the interests of the shareholders of either
the Acquired Fund. Similarly, the Board of Trustees of the Pyramid Trust,
including the Independent Trustees, has decided that the Reorganization is in
the best interests of the Acquiring Fund and its shareholders. The Board of
Trustees of the Pyramid Trust also has determined that the Reorganization would
not result in a dilution of the interests of the shareholders of either the
Acquired Fund.
INFORMATION ABOUT THE REORGANIZATION
PLAN OF REORGANIZATION. The following summary of the Plan is qualified
in its entirety by reference to the Plan (Exhibit A hereto). The Plan provides
that the Acquiring Fund will acquire all or substantially all of the assets of
the Acquired Fund in exchange for shares of the Acquiring Fund and the
assumption by the Acquiring Fund of certain scheduled liabilities of the
Acquired Fund. The Acquired Fund will then distribute such shares of the
Acquiring Fund to its shareholders in liquidation of the Acquired Fund. Such
transactions will occur on ___________________ or such later date as may be
agreed upon by the parties (the "Closing Date").
Prior to the Closing Date, the Acquired Fund will endeavor to discharge
all of its known liabilities and obligations. The Acquiring Fund will not assume
any liabilities or obligations other than those reflected on unaudited
statements of assets and liabilities of the Acquired Fund prepared as of the
close of regular trading on the NYSE, currently 4:00 p.m. New York time, on the
Closing Date. The number of full and fractional shares of the Acquiring Fund to
be delivered to the Acquired Fund and distributed to the Acquired Fund
shareholders will be determined on the basis of the Acquiring Fund's and the
Acquired Fund's relative net asset values per share, respectively, computed as
of the close of regular trading on the NYSE on the Closing Date. The net asset
value per share will be determined by dividing assets, less liabilities, by the
total number of outstanding shares.
At or prior to the Closing Date, the Acquired Fund will, and the
Acquiring Fund may, declare a dividend or dividends which, together with all
previous dividends, will have the effect of distributing to their respective
shareholders all net investment income for the period ending on or prior to the
Closing Date.
On the Closing Date or as soon thereafter as conveniently practicable
the Acquired Fund will liquidate and distribute PRO RATA to shareholders of
record as of the close of business on the Closing Date the full and fractional
shares of the Acquiring Fund received by the Acquired Fund. Such liquidation and
distribution will be accomplished by the establishment of accounts in the names
of the Acquired Fund's shareholders on the share records of the Acquiring Fund's
transfer agent. Each account will represent the respective PRO RATA number of
full and fractional shares of the Acquiring Fund due to each of the Acquired
Fund's shareholders. After such distribution and the winding up of its affairs,
the Acquired Fund will be terminated.
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The consummation of the Reorganization is subject to the conditions set
forth in the Plan. Notwithstanding approval of the Acquired Fund's shareholders,
the Plan may be terminated at any time at or prior to the Closing Date (1) by
mutual agreement of the Trusts or (2) by either Trust upon a material breach by
the other Trust of any representation warranty or agreement contained therein.
Approval of the Plan will require the affirmative "vote of a majority
of the outstanding voting securities" of the Acquired Fund, which, as defined
under the 1940 Act, is the lesser of: (a) 67% of the shares of the Acquired Fund
present at the Meeting, if the holders of more than 50% of the outstanding
shares of the Acquired Fund are present or represented by proxy; or (b) more
than 50% of the outstanding shares of the Acquired Fund. If the Reorganization
is not approved by shareholders of the Acquired Fund, the Board of Trustees of
the Institutional Trust will consider other possible courses of action,
including liquidation of the Acquired Fund.
DESCRIPTION OF THE ACQUIRING FUND'S SHARES. Full and fractional shares
of beneficial interest of the Acquiring Fund will be issued to the Acquired Fund
in accordance with the procedures detailed in the Plan and as described in the
Acquiring Fund's Prospectus. The Acquiring Fund does not issue share
certificates to shareholders. See "Information on Shareholders' Rights" and the
Prospectus of the Acquiring Fund for additional information with respect to the
shares of the Acquiring Fund.
FEDERAL INCOME TAX CONSEQUENCES. The exchange of assets for shares of
the Acquiring Fund is intended to qualify for federal income tax purposes as a
tax-free reorganization under Section 368(a) of the Internal Revenue Code of
1986, as amended (the "Code"). As a condition to the closing of the
Reorganization, each Fund and the Portfolio will receive an opinion from Willkie
Farr & Gallagher, counsel to the Funds, to the effect that, on the basis of the
existing provisions of the Code, U.S. Treasury regulations issued thereunder,
current administrative rules, pronouncements and court decisions, for federal
income tax purposes, upon consummation of the Reorganization:
(1) the transfer of all or substantially all of the
Acquired Fund's assets in exchange for shares of the Acquiring
Fund and the assumption by the Acquiring Fund of certain
scheduled liabilities of the Acquired Fund, will constitute a
"reorganization" within the meaning of Section 368(a)(1)(C) of
the Code, and the Acquiring Fund and the Acquired Fund are
each a "party to a reorganization" within the meaning of
Section 368(b) of the Code;
(2) no gain or loss will be recognized by the
Acquiring Fund upon the receipt of the assets of the Acquired
Fund in exchange for shares of the Acquiring Fund and the
assumption by the Acquiring Fund of certain scheduled
liabilities of the Acquired Fund;
(3) no gain or loss will be recognized by the
Acquired Fund upon the transfer of its assets to the Acquiring
Fund in exchange for shares of the Acquiring Fund and the
assumption by the Acquiring Fund of certain scheduled
liabilities of the Acquired Fund or upon the distribution
(whether actual or constructive) of shares of the Acquiring
Fund to the Acquired Fund's shareholders;
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<PAGE>
(4) no gain or loss will be recognized by the
Acquired Fund's shareholders upon the exchange of their
Acquired Fund shares for the Acquiring Fund shares and the
assumption by the Acquiring Fund of certain scheduled
liabilities of the Acquired Fund; and
(5) the aggregate tax basis for the shares of the
Acquiring Fund received by each shareholder of the Acquired
Fund pursuant to the Reorganization will be the same as the
aggregate tax basis of the Acquired Fund shares held by such
shareholder immediately prior to the Reorganization, and the
holding period of the shares of the Acquiring Fund to be
received by each shareholder of the Acquired Fund will include
the period during which the Acquired Fund shares exchanged
therefor were held by such shareholder (provided that the
Acquired Fund shares were held as capital assets on the date
of the Reorganization).
The Portfolio is structured as a partnership for federal income tax
purposes and allocates its realized capital gains and losses to the Funds
annually at the end of its taxable year. As a consequence, it is expected that
no realized capital gains will have been allocated to the Acquired Fund.
Instead, the Portfolio will allocate all of its capital gains and losses to the
Acquiring Fund, which will make a pro rata distribution of any net capital gains
to its shareholders (including the former shareholders of the Acquired Fund). As
a result of the Reorganization, shareholders of both Funds may receive a
different amount of capital gains distributions than the amount they would have
received had the Reorganization not occurred.
Shareholders of the Acquired Fund should consult their tax advisors
regarding the effect, if any, of the proposed Reorganization in light of their
individual circumstances. Since the foregoing discussion relates only to the
federal income tax consequences of the Reorganization, shareholders of the
Acquired Fund also should consult their tax advisors as to state and local tax
consequences, if any, of the Reorganization.
CAPITALIZATION. The following table shows the capitalization of the
Acquiring Fund and the Acquired Fund as of ________________, 1996, and on a pro
forma basis as of that date, giving effect to the proposed acquisition of assets
at net asset value.
<TABLE>
<CAPTION>
Acquired Fund Acquiring Fund Pro Forma
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
Net assets $__________ $___________ $__________
Net asset value
per share $__________ $___________ $__________
Shares outstanding __________ ___________ __________
</TABLE>
As of March__, 1996 (the "Record Date"), there were _____________
outstanding shares of the Acquired Fund and ______________ outstanding shares of
the Acquiring Fund. As of the Record Date, the officers and Trustees of the
Institutional Trust beneficially owned as a group less than __% of the
outstanding shares of the Acquired Fund and the officers and Trustees of the
Pyramid Trust beneficially owned as a group less than __% of the outstanding
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<PAGE>
shares of the Acquiring Fund. To the best knowledge of the Trustees of the
Institutional Trust, as of the Record Date, other than as set forth below, no
shareholder or "group" (as that term is used in Section 13(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) owned beneficially or of
record more than 5% of the outstanding shares of the Acquired Fund.
_______________, whose address is ________________________, owned beneficially
_____________ (______%) shares of the Acquired Fund. To the best knowledge of
the Trustees of the Trust, as of the Record Date, other than as set forth below,
no shareholder or group (as that term is issued in Section 13(d) of the Exchange
Act) owned beneficially or of record more than 5% of the Acquiring Fund.
_________________________ owned beneficially _________(____%) shares of the
Acquiring Fund. After the Reorganization, ____________ is expected to own
beneficially _____% of the combined fund and ________________________ is
expected to own beneficially ____% of the combined fund.
COMPARISON OF INVESTMENT
OBJECTIVES AND POLICIES
The investment characteristics of the Acquired Fund and the Acquiring
Fund correspond directly to those of the Portfolio. For a full discussion of the
investment objectives, policies and restrictions of the Acquiring Fund and the
Portfolio, refer to the Prospectus of the Acquiring Fund, which accompanies this
prospectus/Proxy Statement, under the caption "Investment Objective and
Policies."
INVESTMENT OBJECTIVE. The investment objective of each of the Funds and
the Portfolio is to seek a high level of current income consistent with the
preservation of capital. There can be no assurance that either Fund or the
Portfolio will be able to achieve its investment objective. The investment
objective is not a fundamental policy of either of the Funds or the Portfolio
and may be changed upon notice to but without the approval of the applicable
Fund's shareholders.
PRIMARY INVESTMENTS. The Portfolio seeks to achieve its objective by
investing 100% of its assets in U.S. Government securities, including repurchase
agreements secured by U.S. Government securities.
In selecting investments for the Portfolio, Bankers Trust attempts to
maintain the Portfolio's overall sensitivity to interest rates in a range
similar to that of short-term to intermediate-term government bonds and notes
with weighted average maturities of two to five years. Because the Portfolio may
invest in mortgage securities whose prices are less sensitive to interest rates
that their relatively long maturities would suggest, the Portfolio's
dollar-weighted average maturity may be longer than five years from time to
time, but will not exceed seven years under normal conditions. The Portfolio may
hold individual securities with remaining maturities of more than seven years as
long as the Portfolio's dollar-weighted average maturity remains within the
above limit. The remaining maturities of individual securities, excluding
mortgage securities, will normally not exceed ten years.
"U.S. Government securities" as used herein means securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities. U.S.
Government securities have varying degrees of government backing. They may be
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<PAGE>
backed by the credit of the government as a whole or only by the issuing agency.
Securities issued by the Federal Home Loan Banks and the Federal National
Mortgage Association are supported by the agency's right to borrow money from
the U.S. Treasury under certain circumstances. There is no assurance that the
U.S. Government will support the obligations of its agencies or
instrumentalities if it is not required to do so by law. U.S. Treasury bonds,
notes, bills, and some agency securities, such as those issued by the Government
National Mortgage Association, are backed by the full faith and credit of the
U.S. Government as to payment of principal and interest and are the highest
quality government securities. Neither the Funds, the Portfolio, nor their
respective share prices and yields are guaranteed by the U.S. Government. For
more information about U.S. Government securities, refer to the Prospectus of
the Acquiring Fund, which accompanies this prospectus/Proxy Statement, under the
caption "Investment Objective and Policies."
INVESTMENT RESTRICTIONS. Each of the Funds and the Portfolio has
adopted identical fundamental investment restrictions which may not be changed
without the approval of the holders of a majority, as defined in the 1940 Act,
of the respective Fund's or Portfolio's voting securities. In addition, the
Portfolio and each Fund has adopted identical non-fundamental investment
restrictions in order to comply with certain state and federal statutes and
policies. For a full discussion of these investment restrictions see "Investment
Restrictions" in the Pyramid Trust's or Institutional Trust's Statement of
Additional Information.
INFORMATION ON SHAREHOLDERS' RIGHTS
GENERAL. The Acquired Fund and the Acquiring Fund, as series of the
Institutional Trust and Pyramid Trust, respectively, are similar in their
aspects of corporate governance. Both Funds are governed by the respective
Trust's Declaration of Trust and By-laws as well as applicable Massachusetts and
federal law. A summary of shareholders' rights of both Funds is set forth below.
VOTING RIGHTS. Neither the Institutional Trust nor the Pyramid Trust
holds an annual meeting of shareholders, and there normally is no meeting of
shareholders for the purpose of electing Trustees unless and until such time as
less than a majority of the Trustees holding office have been elected by
shareholders. A meeting of shareholders of the Acquired Fund or the Acquiring
Fund, for any purpose, must be called upon the written request of shareholders
holding at least 10% of such Fund's outstanding shares. On each matter submitted
to a vote of the shareholders of the Acquired Fund or the Acquiring Fund, each
shareholder is entitled to one vote for each whole share owned and a
proportionate, functional vote for each fractional share outstanding in the
shareholder's name on the Fund's books. A Trustee of either Trust holds office
for the lifetime of the respective Trusts or until the next meeting of
shareholders called for the purpose of electing Trustees and the election and
qualification of his successor or until such Trustee sooner dies, resigns or is
removed. Trustees of the Trusts have the power to alter the number of Trustees,
and vacancies on the Board may be filled by a majority of the Trust's Board of
Trustees, subject to the limitations of the 1940 Act.
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<PAGE>
APPRAISAL RIGHTS. Under the laws of The Commonwealth of Massachusetts,
shareholders of the Acquired Fund do not have appraisal rights in connection
with a combination or acquisition of the assets of the Acquired Fund by another
entity. Shareholders of the Acquired Fund may, however, redeem their shares at
net asset value prior to the date of the Reorganization.
LIQUIDATION OR TERMINATION. In the event of a liquidation or
termination, shareholders of both Funds are entitled to receive, when and as
declared by the Trustees, the excess of the assets belonging to the Fund over
the liabilities belonging to the Fund. In either case, the assets so distributed
to shareholders will be distributed among the shareholders in proportion to the
number of shares held by them and recorded in the books of the Acquired Fund or
the Acquiring Fund, as the case may be.
SHAREHOLDER LIABILITY. Under Massachusetts law, shareholders of the
Acquiring Fund or the Acquired Fund may, under certain circumstances, be held
personally liable for the obligations of the Acquiring Fund or the Acquired
Fund, respectively. The Declarations of Trust of both the Institutional Trust
and the Pyramid Trust, however, disclaim shareholder liability for acts or
obligations of the Trusts and require that notice of such disclaimer be given in
each agreement, obligation or instrument entered into or executed by the Trust
or a Trustee. The Declarations of Trust of both the Institutional Trust and the
Pyramid Trust provide for indemnification out of the property of the Funds for
all losses and expenses of any shareholder held personally liable for the
obligations of the Funds. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is considered remote since it is
limited to circumstances in which a disclaimer is inoperative and the Funds
themselves would be unable to meet their obligations. A substantial number of
mutual funds in the United States are organized as Massachusetts business
trusts.
LIABILITY OF TRUSTEES. Under each Trust's Declaration of Trust, a
Trustee of either Trust will be personally liable only for his or her own
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of Trustee. The Trusts'
Declarations of Trust further provide that Trustees and officers of each Trust
will be indemnified for the expenses of litigation against them unless it is
determined that the person did not act in good faith in the reasonable belief
that the person's actions were in or not opposed to the best interest of the
Trusts or the Funds or the person's conduct is determined to constitute willful
misfeasance, bad faith, gross negligence or reckless disregard of the person's
duties.
RIGHTS OF INSPECTION. Shareholders of the Acquiring Fund and the
Acquired Fund have the same inspection rights as are permitted shareholders of a
Massachusetts corporation under Massachusetts corporate law or such greater
inspection rights as the Trustees may determine from time to time. Currently,
each shareholder of a Massachusetts corporation is permitted to inspect the
records, accounts and books of a corporation for any legitimate business
purpose.
The foregoing is only a summary of certain characteristics of the
operations of the Trust, the Acquiring Fund and the Acquired Fund, the Trust's
Declaration of Trust, the Trust's By-laws and Massachusetts law. The foregoing
is not a complete description of the documents cited. Shareholders
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<PAGE>
should refer to the provisions of such Declaration of Trust, By-laws and
Massachusetts law directly for a more thorough description.
ADDITIONAL INFORMATION ABOUT
THE ACQUIRING FUND
AND
THE ACQUIRED FUND
THE ACQUIRING FUND. Information about the Acquiring Fund is
incorporated herein by reference from its current prospectus dated April 28,
1995 and the statement of additional information dated April 28, 1995. A copy of
such statement of additional information is available upon request and without
charge by writing to the Acquiring Fund at the address listed on the cover page
of this prospectus/Proxy Statement or by calling toll-free 1-800- 422-6577.
THE ACQUIRED FUND. Information about the Acquired Fund is included in
its current Prospectus dated April 28, 1995 and in the statement of additional
information dated April 28, 1995 that has been filed with the SEC, both of which
are incorporated herein by reference. A copy of the prospectus and the statement
of additional information is available upon request and without charge by
writing to the Acquired Fund at the address listed on the cover page of this
prospectus/Proxy Statement or by calling toll-free 1-800-422-6577.
Both the Acquiring Fund and the Acquired Fund are subject to the
informational requirements of the Securities Exchange Act and in accordance
therewith file reports and other information including proxy material, reports
and charter documents with the SEC. These materials can be inspected and copies
obtained at the Public Reference Facilities maintained by the SEC at 450 Fifth
Street, N.W. Washington, D.C. 20549 and at the New York Regional Office of the
SEC at 75 Park Place, New York, New York 10007. Copies of such material can also
be obtained from the Public Reference Branch, Office of Consumer Affairs and
Information Services, SEC, Washington, D.C. 20549 at prescribed rates.
OTHER BUSINESS
The Trustees of the Institutional Trust do not intend to present any
other business at the Meeting. If, however, any other matters are properly
brought before the Meeting the persons named in the accompanying form of proxy
will vote thereon in accordance with their judgment.
VOTING INFORMATION
This Prospectus/Proxy Statement is furnished in connection with a
solicitation of proxies by the Board of Trustees of the Institutional Trust to
be used at the Special Meeting of Shareholders of the Acquired Fund to be held
at 9:30 a.m., at the offices of the Acquiring Fund, 6 St. James Avenue, Boston,
Massachusetts, and at any adjournment thereof. This prospectus/Proxy Statement,
along with a Notice of the Meeting and a proxy card, is first being
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<PAGE>
mailed to shareholders of the Acquired Fund on or about March __, 1996. Only
shareholders of record as of the close of business on the Record Date will be
entitled to notice of, and to vote at, the Meeting or any adjournment thereof.
The holders of a majority of the shares of the Acquired Fund outstanding at the
close of business on the Record Date present in person or represented by proxy
will constitute a quorum for the Meeting. For purposes of determining a quorum
for transacting business at the Meeting, abstentions and broker "non-votes"
(that is, proxies from brokers or nominees indicating that such 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. For this reason, abstentions and broker non-votes
will have the effect of a "no" vote for purposes of obtaining the requisite
approval of the Plan. If the enclosed form of proxy is properly executed and
returned in time to be voted at the Meeting, the proxies named therein will vote
the shares represented by the proxy in accordance with the instructions marked
thereon. Unmarked proxies will be voted FOR the proposed Reorganization and FOR
any other matters deemed appropriate. A proxy may be revoked at any time on or
before the Meeting by written notice to the Secretary of the Acquired Fund,
Thomas M. Lenz, 6 St. James Avenue, Boston, Massachusetts 02116. Unless revoked,
all valid proxies will be voted in accordance with the specifications thereon
or, in the absence of such specifications, for approval of the Plan and the
Reorganization contemplated thereby.
Approval of the Plan will require the affirmative "vote of a majority
of the outstanding voting securities" of the Acquired Fund, which is the lesser
of: (a) 67% of the shares of the Acquired Fund present at the Meeting, if the
holders of more than 50% of the outstanding shares of the Acquired Fund are
present or represented by proxy; or (b) more than 50% of the outstanding shares
of the Acquired Fund. Shareholders of the Acquired Fund are entitled to one vote
for each share. Fractional shares are entitled to proportional voting rights.
Proxy solicitations will be made primarily by mail, but proxy
solicitations also may be made by telephone, telegraph or personal interviews
conducted by officers and employees of the Trust, Signature and/or Bankers
Trust. The aggregate cost of solicitation of the shareholders of the Acquired
Fund is expected to be approximately $__________. Expenses of the
Reorganization, including the costs of the proxy solicitation and the
preparation of enclosures to the Prospectus/Proxy Statement, reimbursement of
expenses of forwarding solicitation material to beneficial owners of shares of
the Acquired Fund and expenses incurred in connection with the preparation of
this Prospectus/Proxy Statement, will be borne by the Acquiring Fund (subject,
however, to the voluntary expense cap provided by Bankers Trust and Signature),
except that the Acquired Fund will be liable for its fees and expenses incurred
in connection with its liquidation and termination.
In the event that sufficient votes to approve the Reorganization are
not received by April __, 1996, the persons named as proxies may propose one or
more adjournments of the Meeting to permit further solicitation of proxies. In
determining whether to adjourn the Meeting, the following factors may be
considered: 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
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<PAGE>
solicitation. Any such adjournment will require an affirmative vote by the
holders of a majority of the shares present in person or by proxy and entitled
to vote at the Meeting. The persons named as proxies will vote upon a decision
to adjourn the Meeting.
The votes of the shareholders of the Acquiring Fund are not being
solicited by this Prospectus/Proxy Statement.
FINANCIAL STATEMENTS AND EXPERTS
The statement of assets and liabilities of the Acquired Fund, including
the schedule of investments, as of December 31, 1995, the related statement of
operations for the year ended December 31, 1995 and the statements of changes in
net assets and the financial highlights for the year ended December 31, 1995 and
for the period from January 24, 1994 (commencement of operations) through
December 31, 1995, have been incorporated by reference into this
Prospectus/Proxy Statement in reliance upon the reports of Coopers & Lybrand
L.L.P., independent certified public accountants, given on the authority of such
firm as experts in accounting and auditing. The statement of assets and
liabilities of the Acquiring Fund, including the schedule of portfolio
investments, as of December 31, 1995, the related statement of operations, the
statements of changes in net assets for the years ended December 31, 1994 and
1995 and the financial highlights for the period from August 24, 1992
(commencement of operations) through December 31, 1995, have been incorporated
by reference into this Prospectus/Proxy Statement in reliance upon the reports
of Coopers & Lybrand L.L.P., independent certified public accountants, given on
the authority of such firm as experts in accounting and auditing.
-17-
THE BOARD OF TRUSTEES OF THE ACQUIRED FUND, INCLUDING THE INDEPENDENT TRUSTEES,
UNANIMOUSLY RECOMMEND APPROVAL OF THE PLAN, AND ANY UNMARKED PROXIES WITHOUT
INSTRUCTIONS TO THE CONTRARY WILL BE VOTED IN FAVOR OF APPROVAL OF THE PLAN.
<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of this ___ day of _________, 1996, among (i) BT Pyramid Mutual Funds (the
"Pyramid Trust"), a business trust organized under the laws of The Commonwealth
of Massachusetts with its principal place of business at 6 St. James Avenue,
Boston, Massachusetts 02116, on behalf of Limited Term U.S. Government
Securities Fund (the "Acquiring Fund"), a series of the Pyramid Trust, and (ii)
BT Institutional Funds (the "Institutional Trust"), a business trust organized
under the laws of The Commonwealth of Massachusetts with its principal place of
business at 6 St. James Avenue, Boston, Massachusetts 02116, on behalf of
Short/Intermediate U.S. Government Securities Fund (the "Acquired Fund"), a
series of the Institutional Trust.
This Agreement is intended to be and is adopted as a plan of
reorganization within the meaning of Section 368(a)(1)(C) of the United States
Internal Revenue Code of 1986, as amended (the "Code"). The reorganization (the
"Reorganization") will consist of (i) the transfer of all or substantially all
of the assets of the Acquired Fund in exchange for shares of beneficial interest
of the Acquiring Fund (collectively, the "Acquiring Fund Shares" and each, an
"Acquiring Fund Share"), and the assumption by the Acquiring Fund of certain
scheduled liabilities of the Acquired Fund, and (ii) the distribution, on the
Closing Date herein referred to or as soon thereafter as conveniently
practicable, of the Acquiring Fund Shares to the shareholders of the Acquired
Fund in liquidation of the Acquired Fund and the termination of the Acquired
Fund, all upon the terms and conditions hereinafter set forth in this Agreement.
WHEREAS, the Institutional Trust and the Pyramid Trust are each
registered investment companies of the management type and the Acquired Fund
owns securities that generally are assets of the character in which the
Acquiring Fund is permitted to invest;
WHEREAS, the Acquiring Fund is authorized to issue shares of beneficial
interest;
WHEREAS, the Board of Trustees of the Institutional Trust has
determined that the exchange of all or substantially all of the assets and
certain of the liabilities of the Acquired Fund for Acquiring Fund Shares is in
the best interests of the Acquired Fund shareholders and that the interests of
the existing shareholders of the Acquired Fund would not be diluted as a result
of this transaction;
WHEREAS, the Board of Trustees of the Pyramid Trust has determined that
the exchange of all or substantially all of the assets and certain of the
liabilities of the Acquired Fund for Acquiring Fund Shares and the assumption of
such liabilities by the Acquiring Fund is in the best interests of the Acquiring
Fund shareholders and that the interests of the existing shareholders of the
Acquiring Fund would not be diluted as a result of this transaction;
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter set forth, the parties hereto covenant and agree as
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follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR THE ACQUIRING FUND
SHARES AND ASSUMPTION OF THE ACQUIRED FUND'S SCHEDULED LIABILITIES AND
LIQUIDATION AND TERMINATION OF THE ACQUIRED FUND
1.1 Subject to the terms and conditions herein set forth and on the
basis of the representations and warranties contained herein, the Acquired Fund
agrees to transfer its assets as set forth in paragraph 1.2 to the Acquiring
Fund, and the Acquiring Fund agrees in exchange therefor: (i) to deliver to the
Acquired Fund the number of Acquiring Fund Shares, including fractional
Acquiring Fund Shares, determined by dividing the value of the Acquired Fund's
net assets attributable to its shares, computed in the manner and as of the time
and date set forth in paragraph 2.1, by the net asset value of one Acquiring
Fund Share, computed in the manner as of the time and date set forth in
paragraph 2.2; and (ii) to assume certain scheduled liabilities of the Acquired
Fund, as set forth in paragraph 1.3. Such transactions shall take place at the
closing provided for in paragraph 3.1 (the "Closing").
1.2 (a) The assets of the Acquired Fund to be acquired by the Acquiring
Fund shall consist of all or substantially all of its property, including,
without limitation, any and all rights and interests in and with respect to
Short/Intermediate U.S. Government Securities Portfolio, all good will, all
interests in the name of the Acquired Fund, all other intangible property and
all books and records of the Acquired Fund.
(b) The Acquired Fund has provided the Acquiring Fund with a list of
all of the Acquired Fund's assets as of the date of execution of this Agreement.
1.3 The Acquired Fund will endeavor to discharge all the Acquired
Fund's known liabilities and obligations prior to the Closing Date. The
Acquiring Fund shall assume all liabilities, expenses, costs, charges and
reserves reflected on an unaudited Statement of Assets and Liabilities of the
Acquired Fund prepared by Bankers Trust Company, as administrator of the
Acquired Fund, as of the Valuation Date, in accordance with generally accepted
accounting principles consistently applied from the prior audited period. The
Acquiring Fund shall assume only those liabilities of the Acquired Fund
reflected in that unaudited Statement of Assets and Liabilities and shall not
assume any other liabilities, whether absolute or contingent, not reflected
thereon.
1.4 On the Closing Date or as soon thereafter as is conveniently
practicable (the "Liquidation Date"), the Acquired Fund will liquidate and
distribute pro rata to the Acquired Fund's shareholders of record determined as
of the close of business on the Closing Date (the "Acquired Fund Shareholders"),
the Acquiring Fund Shares it receives pursuant to paragraph 1.1. Such
liquidation and distribution will be accomplished by the transfer of the
Acquiring Fund Shares then credited to the account of the Acquired Fund on the
books of the Acquiring Fund to open accounts on the share records of the
Acquiring Fund in the name of the Acquired Fund's shareholders and representing
the respective pro rata number of the Acquiring Fund Shares due such
shareholders. All issued and outstanding shares of the Acquired Fund will
simultaneously be cancelled on the books of the Acquired Fund, although share
certificates representing interests in the Acquired Fund will represent a number
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of Acquiring Fund Shares after the Closing Date as determined in accordance with
paragraph 1.1. The Acquiring Fund shall not issue certificates representing the
Acquiring Fund Shares in connection with such exchange.
1.5 Ownership of Acquiring Fund Shares will be shown on the books of
the Acquiring Fund's transfer agent. Acquiring Fund Shares will be issued in the
manner described in the Acquiring Fund's current prospectus and statement of
additional information.
1.6 Any transfer taxes payable upon issuance of the Acquiring Fund
Shares in a name other than the registered holder of the Acquired Fund shares on
the books of the Acquired Fund as of that time shall, as a condition of such
issuance and transfer, be paid by the person to whom such Acquiring Fund Shares
are to be issued and transferred.
1.7 Any reporting responsibility of the Acquired Fund is and shall
remain the responsibility of the Acquired Fund up to and including the Closing
Date and such later dates on which the Acquired Fund is terminated.
1.8 The Acquired Fund shall, following the Closing Date and the making
of all distributions pursuant to paragraph 1.4, be terminated under the laws of
The Commonwealth of Massachusetts and in accordance with its governing
documents.
2. VALUATION
2.1. The value of the assets of the Acquired Fund to be transferred
hereunder shall be the value of such assets computed as of the close of regular
trading on the New York Stock Exchange, Inc. (the "NYSE") on the Closing Date
(such time and date being hereinafter called the "Valuation Date"), using the
valuation procedures set forth in the then current prospectus or statement of
additional information of the Acquired Fund.
2.2. The net asset value of the Acquiring Fund Shares shall be the
value computed as of the close of regular trading on the NYSE on the Valuation
Date, using the valuation procedures set forth in the then current prospectus or
statement of additional information of the Acquiring Fund.
2.3. All computations of value shall be made by Bankers Trust Company
in accordance with its regular practice as pricing agent for each of the parties
hereto.
3. CLOSING AND CLOSING DATE
3.1. The Closing Date shall be _____________, or such later date as the
parties may agree to in writing. All acts taking place at the Closing shall be
deemed to take place simultaneously as of the close of business on the Closing
Date unless otherwise provided. The Closing shall be held as of 5:00 p.m. at the
offices of Bankers Trust Company, 280 Park Avenue, New York, New York, or at
such other time and/or place as the parties may agree.
3.2. The custodian for the Acquired Fund (the "Custodian") shall
deliver at the Closing a certificate of an authorized officer stating that: (a)
the Acquired Fund's assets have been delivered in proper form to the Acquiring
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Fund on the Closing Date and (b) all necessary transfer taxes including all
applicable federal and state stock transfer stamps, if any, shall have been
paid, or provision for payment shall have been made, in conjunction with the
delivery of portfolio securities.
3.3. In the event that on the Valuation Date (a) the NYSE or another
primary trading market for portfolio securities of the Short/Intermediate U.S.
Government Securities Portfolio shall be closed to trading or trading thereon
shall be restricted or (b) trading or the reporting of trading on the NYSE or
elsewhere shall be disrupted so that accurate appraisal of the value of the net
assets of the parties hereto is impracticable, the Closing Date shall be
postponed until the first business day after the day when trading shall have
been fully resumed and reporting shall have been restored.
3.4. The Acquired Fund shall deliver to the Acquiring Fund at the
Closing a list of the names and addresses of the Acquired Fund Shareholders and
the number and percentage ownership of outstanding shares owned by each such
shareholder immediately prior to the Closing, certified on behalf of the
Acquired Fund by the President or a Vice President of the Institutional Trust.
The Acquiring Fund shall issue and deliver a confirmation evidencing the
Acquiring Fund Shares to be credited to the Acquired Fund's account on the
Closing Date to the Secretary of the Institutional Trust on behalf of the
Acquired Fund, or provide evidence satisfactory to the Acquired Fund that such
Acquiring Fund Shares have been credited to the Acquired Fund's account on the
books of the Acquiring Fund. At the Closing, each party shall deliver to the
other such bills of sale, checks, assignments, share certificates, if any,
receipts or other documents as such other party or its counsel may reasonably
request.
4. REPRESENTATIONS AND WARRANTIES
4.1. The Institutional Trust and the Acquired Fund represent and
warrant to the Pyramid Trust and the Acquiring Fund as follows:
(a) The Acquired Fund is a series of the Institutional Trust, which is
a business trust, validly existing and in good standing under the laws of The
Commonwealth of Massachusetts;
(b) The Institutional Trust is a registered investment company
classified as a management company of the open-end type, and its registration
with the Securities and Exchange Commission (the "Commission") as an investment
company under the Investment Company Act of 1940 (the "Investment Company Act")
is in full force and effect;
(c) The Institutional Trust is not, and the execution, delivery and
performance of this Agreement in respect of the Acquired Fund will not result,
in a material violation of its Declaration of Trust or By-laws or of any
agreement, indenture, instrument, contract, lease or other undertaking with
respect to the Acquired Fund to which the Institutional Trust is a party or by
which it is bound;
(d) The Institutional Trust has no material contracts or other
commitments (other than this Agreement) with respect to the Acquired Fund which
will be terminated with liability to either the Institutional Trust or to the
Acquired Fund prior to the Closing Date;
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(e) No material litigation or administrative proceeding or
investigation of or before any court or governmental body is presently pending
or to its knowledge threatened against the Institutional Trust with respect to
the Acquired Fund or any of the Acquired Fund's properties or assets, except as
previously disclosed to the Acquiring Fund. The Institutional Trust and the
Acquired Fund know of no facts which might form the basis for the institution of
such proceedings and neither the Institutional Trust nor the Acquired Fund is a
party to or subject to the provisions of any order, decree or judgment of any
court or governmental body which materially and adversely affects the Acquired
Fund's business or the Institutional Trust's ability to consummate the
transactions herein contemplated;
(f) The Statement of Assets and Liabilities of the Acquired Fund as of
_____________ has been audited by Coopers & Lybrand L.L.P., independent
certified public accountants, and is in accordance with generally accepted
accounting principles consistently applied, and such statement (copies of which
have been furnished to each of the other parties hereto) fairly reflects the
financial condition of the Acquired Fund as of such date, and there are no known
contingent liabilities of the Acquired Fund as of such date not disclosed
therein;
(g) Since December 31, 1995, there has not been any material adverse
change in the Acquired Fund's financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of business, or any
incurrence by the Acquired Fund of indebtedness maturing more than one year from
the date that such indebtedness was incurred, except as otherwise disclosed to
and accepted by each of the other parties hereto. For the purposes of this
subparagraph (g), a decline in net asset value per share of the Acquired Fund
shall not constitute a material adverse change;
(h) At the Closing Date, all federal and other tax returns and reports
of the Acquired Fund required by law then to have been filed by such dates shall
have been filed, and all federal and other taxes shown as due on such returns
shall have been paid so far as due, or provision shall have been made for the
payment thereof and, to the best of the Acquired Fund's knowledge, no such
return is currently under audit and no assessment has been asserted with respect
to such returns;
(i) For each fiscal year of its operation, the Acquired Fund has met
the requirements of Subchapter M of the Code for qualification and treatment as
a regulated investment company;
(j) All issued and outstanding shares of the Acquired Fund are, and at
the Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable. All of the issued and outstanding shares of the Acquired
Fund will, at the time of Closing, be held by the persons and in the amounts set
forth in the records of the transfer agent as provided in paragraph 3.4. The
Acquired Fund does not have outstanding any options, warrants or other rights to
subscribe for or purchase any shares of the Acquired Fund, nor is there
outstanding any security convertible into any shares of the Acquired Fund;
(k) At the Closing Date, the Institutional Trust in respect of the
Acquired Fund will have good and marketable title to the assets to be
transferred to the Acquiring Fund pursuant to paragraph 1.1 and full right,
power and authority to sell, assign, transfer and deliver such asset hereunder
and, upon
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<PAGE>
delivery and payment for such assets, the Acquiring Fund will acquire good and
marketable title thereto, subject to no restrictions on the full transfer
thereof, including such restrictions as might arise under the Securities Act of
1933 (the "Securities Act"), other than as disclosed to the Acquiring Fund;
(l) The execution, delivery and performance of this Agreement has been
duly authorized by all necessary action on the part of the Institutional Trust's
Board of Trustees on behalf of the Acquired Fund, and, subject to the approval
of the Acquired Fund shareholders, assuming due authorization, execution and
delivery by the Pyramid Trust on behalf of the Acquiring Fund, this Agreement
will constitute a valid and binding obligation of the Institutional Trust in
respect of the Acquired Fund, enforceable in accordance with its terms, subject
as to enforcement, to bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights and to general equity
principles;
(m) The information to be furnished by the Acquired Fund for use in
no-action letters, applications for exemptive orders, registration statements,
proxy materials and other documents which may be necessary in connection with
the transactions contemplated hereby shall be accurate and complete in all
material respects and shall comply in all material respects with federal
securities and other laws and regulations thereunder applicable thereto; and
(n) The proxy statement of the Acquired Fund (the "Proxy Statement") to
be included in the registration statement on Form N-14 of the Acquiring Fund
(the "Registration Statement") (other than information therein that relates to
the Acquiring Fund) will, on the effective date of the Registration Statement
and on the Closing Date, not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which such
statements were made, not materially misleading.
4.2. The Pyramid Trust and the Acquiring Fund represent and warrant to
each of the other parties hereto as follows:
(a) The Acquiring Fund is a series of the Pyramid Trust, which is a
business trust, validly existing and in good standing under the laws of The
Commonwealth of Massachusetts;
(b) The Pyramid Trust is a registered investment company classified as
a management company of the open-end type, and its registration with the
Commission as an investment company under the Investment Company Act is in full
force and effect;
(c) The current prospectus of and statement of additional information
of the Pyramid Trust conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and regulations of
the Commission thereunder and do not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading;
(d) At the Closing Date, the Pyramid Trust will have good and
marketable title to the Acquiring Fund's assets;
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<PAGE>
(e) The Pyramid Trust is not, and the execution, delivery and
performance of this Agreement on behalf of the Acquiring Fund will not result,
in a material violation of its Declaration of Trust or By-laws or of any
agreement, indenture, instrument, contract, lease or other undertaking with
respect to the Acquiring Fund to which the Pyramid Trust is a party or by which
it is bound;
(f) No material litigation or administrative proceeding or
investigation of or before any court or governmental body is presently pending
or threatened against the Pyramid Trust with respect to the Acquiring Fund or
any of the Acquiring Fund's properties or assets, except as previously disclosed
to the Acquired Fund. The Pyramid Trust and the Acquiring Fund know of no facts
which might form the basis for the institution of such proceedings and neither
the Pyramid Trust nor the Acquiring Fund is a party to or subject to the
provisions of any order, decree or judgment of any court or governmental body
which materially and adversely affects the Acquiring Fund's business or the
Pyramid Trust's ability on behalf of the Acquiring Fund to consummate the
transactions contemplated herein;
(g) The Statement of Assets and Liabilities of the Acquiring Fund as of
_______________ has been audited by Coopers & Lybrand L.L.P., independent
certified public accountants, and is in accordance with generally accepted
accounting principles consistently applied, and such statement (copies of which
have been furnished to each of the other parties hereto) fairly reflects the
financial condition of the Acquiring Fund as of such date, and there are no
known contingent liabilities of the Acquiring Fund as of such date not disclosed
therein;
(h) Since December 31, 1995, there has not been any material adverse
change in the Acquiring Fund's financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of business, or any
incurrence by the Acquiring Fund of indebtedness maturing more than one year
from the date that such indebtedness was incurred, except as otherwise disclosed
to and accepted by the Acquired Fund. For the purposes of this subparagraph (h),
a decline in net asset value per share of the Acquiring Fund shall not
constitute a material adverse change;
(i) At the Closing Date, all federal and other tax returns and reports
of the Acquiring Fund required by law then to have been filed by such dates
shall have been filed, and all federal and other taxes shown as due on said
returns and reports shall have been paid so far as due, or provision shall have
been made for the payment thereof and, to the best of the Acquiring Fund's
knowledge, no such return is currently under audit and no assessment has been
asserted with respect to such returns;
(j) For each fiscal year of its operations, the Acquiring Fund has met
the requirements of Subchapter M of the Code for qualification and treatment as
a regulated investment company and the Acquiring Fund intends to do so in the
future;
(k) At the date hereof, all issued and outstanding shares of the
Acquiring Fund are, and at the Closing Date will be, duly and validly issued and
outstanding, fully paid and non-assessable. The Acquiring Fund does not have
outstanding any options, warrants or other rights to subscribe for or purchase
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<PAGE>
any shares of the Acquiring Fund, nor is there outstanding any security
convertible into shares of the Acquiring Fund;
(l) The execution, delivery and performance of this Agreement has been
duly authorized by all necessary action, if any, on the part of the Pyramid
Trust's Board of Trustees on behalf of the Acquiring Fund, and, assuming due
authorization, execution and delivery by the Institutional Trust on behalf of
the Acquired Fund, this Agreement will constitute a valid and binding obligation
of the Pyramid Trust on behalf of the Acquiring Fund, enforceable in accordance
with its terms, subject as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting creditors'
rights and to general equity principles;
(m) The Acquiring Fund Shares to be issued and delivered to the
Acquired Fund, for the account of the Acquired Fund shareholders, pursuant to
the terms of this Agreement, will at the Closing Date have been duly authorized
and, when so issued and delivered, will be duly and validly issued Acquiring
Fund Shares and will be fully paid and non-assessable;
(n) The information to be furnished by the Acquiring Fund for use in
no-action letters, applications for exemptive orders, registration statements,
proxy materials and other documents which may be necessary in connection with
the transactions contemplated hereby shall be accurate and complete in all
material respects and shall comply in all material respects with federal
securities and other laws and regulations applicable thereto;
(o) The Proxy Statement to be included in the Registration Statement
(only insofar as it relates to the Acquiring Fund) will, on the effective date
of the Registration Statement and on the Closing Date, not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which such statements were made, not misleading; and
(p) The Pyramid Trust, on behalf of the Acquiring Fund, agrees to use
all reasonable efforts to obtain the approvals and authorizations required by
the Securities Act, the Investment Company Act and such of the state Blue Sky or
securities laws as it may deem appropriate in order to continue the Acquiring
Fund's operations after the Closing Date.
5. COVENANTS OF EACH OF THE PARTIES
5.1. The Institutional Trust, on behalf of the Acquired Fund, will
operate its business in the ordinary course between the date hereof and the
Closing Date. It is understood that such ordinary course of business will
include the declaration and payment of customary dividends and distributions and
any other dividends and distributions deemed advisable, in each case payable
either in cash or in additional shares.
5.2. The Pyramid Trust, on behalf of the Acquiring Fund, will operate
its business in the ordinary course between the date hereof and the Closing
Date. It is understood that such ordinary course of business will include the
declaration and payment of customary dividends and distributions and any other
dividends and distributions deemed advisable, in each case payable either in
cash or in additional shares.
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5.3. The Institutional Trust will call a meeting of the Acquired Fund's
shareholders to consider and act upon this Agreement and to take all other
action necessary to obtain approval of the transactions contemplated herein.
5.4. The Acquired Fund and the Acquiring Fund covenant that the
Acquiring Fund Shares to be issued hereunder are not being acquired for the
purpose of making any distribution thereof other than in accordance with the
terms of this Agreement.
5.5. The Acquired Fund will assist the Acquiring Fund in obtaining such
information as the Acquiring Fund reasonably requests concerning the beneficial
ownership of the Acquired Fund's shares.
5.6. Subject to the provisions of this Agreement, the Institutional
Trust, on behalf of the Acquired Fund, and the Pyramid Trust, on behalf of the
Acquiring Fund, each will take, or cause to be taken, all action, and do or
cause to be done, all things reasonably necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement.
5.7. As promptly as practicable, but in any case within sixty days
after the Closing Date, the Acquired Fund shall furnish the Acquiring Fund, in
such form as is reasonably satisfactory to the Acquiring Fund, a statement of
its earnings and profits for federal income tax purposes which will be carried
over to the Acquiring Fund as a result of Section 381 of the Code, and which
will be certified by the President or a Vice President and the Treasurer or an
Assistant Treasurer of the Institutional Trust on behalf of the Acquired Fund.
5.8. The Acquired Fund will provide the Acquiring Fund with information
reasonably necessary for the preparation of a prospectus (the "Prospectus")
which will include the Proxy Statement, referred to in paragraph 4.1(n), all to
be included in the Registration Statement, in compliance with the Securities
Act, the Securities Exchange Act of 1934 (the "Exchange Act"), and the
Investment Company Act in connection with the meeting of the Acquired Fund's
shareholders to consider approval of this Agreement and the transactions
contemplated herein.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Acquired Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquiring Fund of all of the obligations to be performed by it hereunder on or
before the Closing Date and, in addition thereto, the following further
conditions:
6.1. All representations and warranties made in this Agreement by or on
behalf of the Acquiring Fund shall be true and correct in all material respects
as of the date hereof and, except as they may be affected by the transactions
contemplated by this Agreement, as of the Closing Date with the same force and
effect as if made on and as of the Closing Date;
6.2. The Pyramid Trust on behalf of the Acquiring Fund shall have
delivered to the Acquired Fund a certificate executed in its name by its
President or Vice President and its Treasurer or Assistant Treasurer, in form
and substance reasonably satisfactory to the Acquired Fund and dated as of the
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Closing Date, to the effect that the representations and warranties made in this
Agreement by or on behalf of the Acquiring Fund are true and correct at and as
of the Closing Date, except as they may be affected by the transactions
contemplated by this Agreement; and
6.3. The Acquired Fund shall have received on the Closing Date a
favorable opinion from Philip W. Coolidge, counsel to the Acquiring Fund,
dated as of the Closing Date, in a form reasonably satisfactory to Thomas M.
Lenz, Secretary of the Acquired Fund, covering the following points:
That (i) the Acquiring Fund is a series of the Pyramid Trust which is a
business trust validly existing and in good standing under the laws of
The Commonwealth of Massachusetts and has the power, under its
Declaration of Trust, to own all of its properties and assets and to
carry on its business as presently conducted; (ii) this Agreement has
been duly authorized, executed and delivered by the Pyramid Trust on
behalf of the Acquiring Fund and, assuming that the Prospectus,
Registration Statement and Proxy Statement comply with the Securities
Act, the Exchange Act and the Investment Company Act and the rules and
regulations thereunder and, assuming due authorization, execution and
delivery of the Agreement by the Institutional Trust on behalf of the
Acquired Fund, is a valid and binding obligation of the Pyramid Trust
enforceable against the Pyramid Trust in accordance with its terms,
subject as to enforcement, to bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors' rights
generally and to general equity principles; (iii) the Acquiring Fund
Shares to be issued and delivered to the Acquired Fund shareholders as
provided by this Agreement are duly authorized and upon such delivery
will be validly issued and outstanding and fully paid and
non-assessable with no personal liability attaching to ownership
thereof, and no shareholder of the Acquiring Fund has any preemptive
rights to subscription or purchase in respect thereof; (iv) the
execution and delivery of this Agreement did not, and the consummation
of the transactions contemplated hereby will not, result in a material
violation of The Declaration of Trust or By-laws of the Pyramid Trust
or any provision of any agreement (known to such counsel) to which the
Pyramid Trust with respect to the Acquiring Fund is a party or by which
it is bound or, to the knowledge of such counsel, result in the
acceleration of any obligation or the imposition of any penalty, under
any agreement, judgment, or decree to which the Pyramid Trust with
respect to the Acquiring Fund is a party or by which it is bound; (v)
to the knowledge of such counsel, no consent, approval, authorization
or order of any court or governmental authority of the United States,
the State of New York or The Commonwealth of Massachusetts is required
for the consummation by the Pyramid Trust on behalf of the Acquiring
Fund of the transactions contemplated herein, except such as have been
obtained under the Securities Act, the Exchange Act and the Investment
Company Act, and such as may be required under state securities law;
(vi) only insofar as they relate to the Acquiring Fund, the
descriptions in the Proxy Statement of statutes, legal and governmental
proceedings and contracts and other documents, if any, are accurate and
fairly present the information required to be shown; (vii) such counsel
does not know of any legal or governmental proceedings, only insofar as
they relate to the Acquiring Fund, existing on or before the effective
date of the Registration Statement or the Closing Date required to be
described in the Registration
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Statement or to be filed as exhibits to the Registration Statement
which are not described as required; (viii) the Pyramid Trust is
registered as an investment company under the Investment Company Act
and its registration with the Commission as an investment company under
the Investment Company Act is in full force and effect; and (ix) to the
best knowledge of such counsel, no litigation or administrative
proceeding or investigation of or before any court or governmental body
is presently pending or threatened as to the Pyramid Trust with respect
to the Acquiring Fund or any of the properties or assets of the
Acquiring Fund and the Pyramid Trust is not a party to or subject to
the provisions of any order, decree or judgment of any court or
governmental body, which materially and adversely affects the business
of the Acquiring Fund, other than as previously disclosed in the
Registration Statement or as disclosed to the Acquired Fund. Such
counsel also shall state that they have participated in conferences
with officers and other representatives of the Pyramid Trust at which
the contents of the Proxy Statement and related matters were discussed
and, although they are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Proxy Statement (except to the extent
indicated in paragraph (vi) of their above opinion), on the basis of
the foregoing (relying as to materiality to a large extent upon the
opinions of officers and other representatives of the Pyramid Trust),
no facts have come to their attention that lead them to believe that
the Proxy Statement as of its date, as of the date of the Acquired Fund
shareholders' meeting, and as of the Closing Date, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein regarding the Acquiring Fund or the
Pyramid Trust or necessary to make the statements therein regarding the
Acquiring Fund or the Pyramid Trust, in the light of the circumstances
under which they were made, not misleading. Such opinion may state that
such counsel does not express any opinion or belief as to the financial
statements or other financial data or as to the information relating to
the Acquiring Fund contained in the Proxy Statement or Registration
Statement, and that such opinion is solely for the benefit of the
Institutional Trust and the Pyramid Trust and their respective trustees
and officers. Such counsel may rely, as to matters governed by the laws
of The Commonwealth of Massachusetts, on an opinion of Massachusetts
counsel. Such opinion also shall include such other matters incident to
the transaction contemplated hereby as the Institutional Trust on
behalf of the Acquired Fund may reasonably request. Finally, such
opinion need not opine with respect to the applicability of Section
17(a) under the Investment Company Act or Rule 17a-8 thereunder.
In this paragraph 6.3, references to the Proxy Statement
include and relate only to the text of such Proxy Statement and not to any
exhibits or attachments thereto or to any documents incorporated by reference
therein.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquired Fund of all the obligations to be performed by it hereunder on or
before the Closing Date and, in addition thereto, the following further
conditions:
7.1. All representations and warranties made in this Agreement by
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<PAGE>
or on behalf of the Acquired Fund contained in this Agreement shall be true and
correct in all material respects as of the date hereof and, except as they may
be affected by the transactions contemplated by this Agreement, as of the
Closing Date with the same force and effect as if made on and as of the Closing
Date;
7.2. The Acquired Fund shall have delivered to the Acquiring Fund a
statement of the Acquired Fund's assets and liabilities as of the Closing Date,
certified by the Institutional Trust's Treasurer or Assistant Treasurer on
behalf of the Acquired Fund;
7.3. The Institutional Trust on behalf of the Acquired Fund shall have
delivered to the Acquiring Fund on the Closing Date a certificate executed in
its name by its President or Vice President and Treasurer or Assistant
Treasurer, in form and substance satisfactory to the Acquiring Fund and dated as
of the Closing Date, to the effect that the representations and warranties made
in this Agreement by or on behalf of the Acquired Fund are true and correct at
and as of the Closing Date, except as they may be affected by the transactions
contemplated by this Agreement; and
7.4. The Acquiring Fund shall have received on the Closing Date a
favorable opinion of Philip W. Coolidge, counsel to the Acquired Fund, in
a form satisfactory to Thomas M. Lenz, Secretary of the Acquiring Fund, covering
the following points:
That (i) the Acquired Fund is a series of the Institutional Trust which
is a business trust validly existing and in good standing under the
laws of The Commonwealth of Massachusetts and has the power, under its
Declaration of Trust, to own all of its properties and assets and to
carry on its business as presently conducted; (ii) this Agreement has
been duly authorized, executed and delivered by the Institutional Trust
on behalf of the Acquired Fund and, assuming that the Prospectus, the
Registration Statement and the Proxy Statement comply with the
Securities Act, the Exchange Act and the Investment Company Act and the
rules and regulations thereunder and, assuming due authorization,
execution and delivery of the Agreement by the Pyramid Trust on behalf
of the Acquiring Fund, is a valid and binding obligation of the
Institutional Trust enforceable against the Institutional Trust in
accordance with its terms, subject as to enforcement to bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights generally and to general equity principles;
(iii) the execution and delivery of this Agreement did not, and the
consummation of the transactions contemplated hereby will not, result
in a material violation of the Declaration of Trust or By-laws of the
Institutional Trust or any provision of any agreement (known to such
counsel) to which the Institutional Trust with respect to the Acquired
Fund is a party or by which it is bound or, to the knowledge of such
counsel, result in the acceleration of any obligation or the imposition
of any penalty, under any agreement, judgment or decree to which the
Institutional Trust with respect to the Acquired Fund is a party or by
which it is bound; (iv) to the knowledge of such counsel, no consent,
approval, authorization or order of any court or governmental authority
of the United States, the State of New York or The Commonwealth of
Massachusetts is required for the consummation by the Institutional
Trust of the transactions contemplated herein, except such as have been
obtained under the Securities Act, the Exchange Act and the Investment
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<PAGE>
Company Act, and such as may be required under state securities laws;
(v) only insofar as they relate to the Institutional Trust and the
Acquired Fund, the descriptions in the Proxy Statement of statutes,
legal and governmental proceedings and contracts and other documents,
if any, are accurate and fairly present the information required to be
shown; (vi) such counsel does not know of any legal or governmental
proceedings, only insofar as they relate to the Acquired Fund existing
on or before the effective date of the Registration Statement or the
Closing Date, required to be described in the Proxy Statement or to be
filed as exhibits to the Registration Statement which are not described
and filed as required; (vii) the Institutional Trust is registered as
an investment company under the Investment Company Act and its
registration with the Commission as an investment company under the
Investment Company Act is in full force and effect; and (viii) to the
best knowledge of such counsel, no litigation or administrative
proceeding or investigation of or before any court or governmental body
is presently pending or threatened as to the Institutional Trust with
respect to the Acquired Fund or any of the properties or assets of the
Acquired Fund and the Institutional Trust is not a party to nor subject
to the provisions of any order, decree or judgment of any court or
governmental body, which materially and adversely affects the business
of the Acquired Fund other than as previously disclosed in the Proxy
Statement or as disclosed to the Acquiring Fund. Such counsel also
shall state that they have participated in conferences with officers
and other representatives of the Institutional Trust at which the
contents of the Proxy Statement and related matters were discussed and,
although they are not passing upon and do not assume any responsibility
for the accuracy, completeness or fairness of the statements contained
in the Proxy Statement (except to the extent indicated in paragraph (v)
of their above opinion), on the basis of the foregoing (relying as to
materiality to a large extent upon the opinions of officers and other
representatives of the Institutional Trust), no facts have come to
their attention that lead them to believe that the Proxy Statement as
of its date, as of the date of the Acquired Fund shareholders' meeting,
and as of the Closing Date, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein
regarding the Acquired Fund or the Institutional Trust or necessary in
the light of the circumstances under which they were made, to make the
statements therein not misleading. Such opinion may state that such
counsel does not express any opinion or belief as to the financial
statements or other financial data, or as to the information relating
to the Acquired Fund, contained in the Proxy Statement or Registration
Statement, and that such opinion is solely for the benefit of the
Pyramid Trust and the Institutional Trust and their respective trustees
and officers. Such counsel may rely, as to matters governed by the laws
of The Commonwealth of Massachusetts, on an opinion of Massachusetts
counsel. Such opinion also shall include such other matters incident to
the transaction contemplated hereby as the Pyramid Trust on the behalf
of the Acquiring Fund may reasonably request. Finally, such opinion
need not opine with respect to the applicability of Section 17(a) under
the 1940 Act or Rule 17a-8 thereunder.
In this paragraph 7.4, references to the Proxy Statement include and
relate to only the text of such Proxy Statement and not to any exhibits or
attachments thereto or to any documents incorporated by reference therein.
A-13
<PAGE>
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH OF THE PARTIES
If any of the conditions set forth below do not exist on or before the
Closing Date with respect to either party hereto, the other party to this
Agreement shall, at its option, not be required to consummate the transactions
contemplated by this Agreement:
8.1. This Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of the holders of the outstanding shares of
the Acquired Fund in accordance with the provisions of the Institutional Trust's
Declaration of Trust and By-laws and certified copies of the votes evidencing
such approval shall have been delivered to the Acquiring Fund. Notwithstanding
anything herein to the contrary, no party hereto may waive the conditions set
forth in this paragraph 8.1;
8.2. On the Closing Date, no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein;
8.3. All consents of other parties and all other consents, orders and
permits of federal, state and local regulatory authorities (including those of
the Commission and of state Blue Sky and securities authorities, including
"no-action" positions of and exemptive orders from such federal and state
authorities) deemed necessary by either party hereto to permit consummation, in
all material respects, of the transactions contemplated hereby shall have been
obtained, except where failure to obtain any such consent, order or permit would
not involve a risk of a material adverse effect on the assets or properties of
any party hereto, provided that any party may for itself waive any of such
conditions;
8.4. The Registration Statement shall have become effective under the
Securities Act and no stop orders suspending the effectiveness thereof shall
have been issued and, to the best knowledge of the parties hereto, no
investigation or proceeding for that purpose shall have been instituted or be
pending, threatened or contemplated under the Securities Act;
8.5. The Acquired Fund shall have declared and paid a dividend or
dividends on the outstanding shares of the Acquired Fund, which, together with
all previous such dividends, shall have the effect of distributing to the
shareholders of such Acquired Fund all of the investment company taxable income
of the Acquired Fund for all taxable years ending on or prior to the Closing
Date.
8.6. The parties shall have received a favorable opinion of Willkie
Farr & Gallagher, addressed to the Pyramid Trust in respect of the Acquiring
Fund and the Institutional Trust in respect of the Acquired Fund and
satisfactory to ______________ and _______________, as Secretary of each of the
parties, respectively, substantially to the effect that for federal income tax
purposes:
(i) the transfer of all or substantially all of the Acquired
Fund's assets in exchange for the Acquiring Fund Shares and
the assumption by the Acquiring Fund of certain scheduled
liabilities of the Acquired Fund, will constitute a
"reorganization" within the meaning
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<PAGE>
of Section 368(a)(1)(C) of the Code, and the Acquiring Fund
and the Acquired Fund are each a "party to a reorganization"
within the meaning of Section 368(b) of the Code; (ii) no gain
or loss will be recognized by the Acquiring Fund upon the
receipt of the assets of the Acquired Fund in exchange for the
Acquiring Fund Shares and the assumption by the Acquiring Fund
of certain scheduled liabilities of the Acquired Fund; (iii)
no gain or loss will be recognized by the Acquired Fund upon
the transfer of its assets to the Acquiring Fund in exchange
for the Acquiring Fund Shares and the assumption by the
Acquiring Fund of certain scheduled liabilities of the
Acquired Fund or upon the distribution (whether actual or
constructive) of the Acquiring Fund Shares to the Acquired
Fund Shareholders; (iv) no gain or loss will be recognized by
the Acquired Fund shareholders upon the exchange of their
Acquired Fund shares for the Acquiring Fund Shares and the
assumption by the Acquiring Fund of certain scheduled
liabilities of the Acquired Fund; and (v) the aggregate tax
basis for the Acquiring Fund Shares received by each of the
Acquired Fund shareholders pursuant to the Reorganization will
be the same as the aggregate tax basis of the Acquired Fund
shares held by such shareholder immediately prior to the
Reorganization, and the holding period of the Acquiring Fund
Shares to be received by each Acquired Fund shareholder will
include the period during which the Acquired Fund shares
exchanged therefor were held by such shareholder (provided
that the Acquired Fund shares were held as capital assets on
the date of the Reorganization).
Notwithstanding anything herein to the contrary, no party hereto may
waive the conditions set forth in this paragraph 8.6.
9. BROKERAGE FEES AND EXPENSES
9.1. Each party hereto represents and warrants to each other party
hereto, that there are no brokers or finders entitled to receive any payments in
connection with the transactions provided for herein.
9.2. The Funds have been informed by Bankers Trust Company that Bankers
Trust Company will pay for all expenses incurred in connection with the
Reorganization except that the Acquired Fund shall be liable for its fees and
expenses incurred in connection with its liquidation and termination.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1. The parties hereto agree that no party has made any
representation, warranty or covenant not set forth herein and that this
Agreement constitutes the entire agreement between the parties.
10.2. The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection herewith
shall survive the consummation of the transactions contemplated hereunder.
11. TERMINATION
11.1. This Agreement may be terminated at any time prior to the
Closing Date by: (1) the mutual agreement of the Institutional Trust on behalf
of the Acquired Fund and the Pyramid Trust on behalf of the Acquiring Fund; (2)
any party in the event that the other party hereto shall materially breach any
representation, warranty or agreement contained herein to be performed at or
prior to the Closing Date; or (3) a condition herein expressed to be precedent
to the obligations of the terminating party has not been met and it reasonably
appears that it will not or cannot be met.
11.2. In the event of any such termination, there shall be no liability
for damages on the part of any party hereto or their respective Trustees or
officers to any other party, but each shall bear the expenses incurred by it
incidental to the preparation and carrying out of this Agreement.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner
as may be mutually agreed upon in writing by the authorized officers of the
Institutional Trust on behalf of the Acquired Fund and the Pyramid Trust on
behalf of the Acquiring Fund; provided, however, that following the meeting of
the Acquired Fund shareholders called by the Institutional Trust pursuant to
paragraph 5.3 of this Agreement, no such amendment may have the effect of
changing the provisions for determining the number of the Acquiring Fund Shares
to be issued to the Acquired Fund shareholders under this Agreement to the
detriment of such shareholders without their further approval.
A-15
<PAGE>
13. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by prepaid
telegraph, telecopy or certified mail addressed to the Institutional Trust on
behalf of the Acquired Fund and the Pyramid Trust on behalf of the Acquiring
Fund at 6 St. James Avenue, Boston, Massachusetts 02116.
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF LIABILITY
14.1 The article and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2 This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original.
14.3 This Agreement shall be governed by and construed in accordance
with the laws of the State of Massachusetts.
14.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other parties hereto. Nothing herein
expressed or implied is intended or shall be construed to confer upon or give
any person, firm, corporation or other entity, other than the parties hereto and
their respective successors and assigns, any rights or remedies under or by
reason of this Agreement.
14.5 It is expressly agreed that the obligations of the Institutional
Trust and the Pyramid Trust shall not be binding upon any of their respective
Trustees, shareholders, nominees, officers, agents or employees personally, but
bind only the trust property of the Institutional Trust or the Pyramid Trust, as
the case may be, as provided in the trust instruments of the Institutional Trust
and the Pyramid Trust, respectively. The execution and delivery of this
Agreement have been authorized by the Trustees of each of the Institutional
Trust and the Pyramid Trust, and this Agreement has been executed by authorized
officers of the Institutional Trust and the Pyramid Trust on behalf of the
Acquired Fund and the Acquiring Fund, respectively, acting as such, and neither
such authorization by such Trustees nor such execution and delivery by such
officers shall be deemed to have been made by any of them individually or to
impose any liability on any of them personally, but shall bind only the trust
property of the Institutional Trust and the Pyramid Trust, as the case may be,
as provided in the Declaration of Trust of the Institutional Trust and the
Pyramid Trust, respectively.
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<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its Chairman of the Board, President or Vice
President and attested by its Secretary or Assistant Secretary.
Attest: BT INSTITUTIONAL FUNDS
on behalf of SHORT/INTERMEDIATE
U.S. GOVERNMENT SECURITIES FUND
_________________________ By:___________________________
Name: Thomas M. Lenz Name: Philip W. Coolidge
Title: Assistant Secretary Title: President
Attest: BT PYRAMID MUTUAL FUNDS
on behalf of LIMITED TERM
U.S. GOVERNMENT SECURITIES FUND
_________________________ By:___________________________
Name: Thomas M. Lenz Name: Philip W. Coolidge
Title: Assistant Secretary Title: President
A-17
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
DATED MARCH __, 1996
ACQUISITION OF THE ASSETS OF
SHORT/INTERMEDIATE U.S. GOVERNMENT SECURITIES FUND
A SEPARATE SERIES OF
BT INSTITUTIONAL FUNDS
6 ST. JAMES AVENUE
BOSTON, MASSACHUSETTS 02116
(617)423-0800
BY AND IN EXCHANGE FOR SHARES OF
BT INVESTMENT LIMITED TERM U.S. GOVERNMENT SECURITIES FUND
A SEPARATE SERIES OF
BT PYRAMID MUTUAL FUNDS
6 ST. JAMES AVENUE
BOSTON, MASSACHUSETTS 02116
(617) 423-0800
This Statement of Additional Information, relating specifically to the
proposed transfer of all or substantially all of the assets of
Short/Intermediate U.S. Government Securities Fund (the "Acquired Fund") to BT
Investment Limited Term U.S. Government Securities Fund (the "Acquiring Fund")
in exchange for shares of beneficial interest of the Acquiring Fund and the
assumption by the Acquiring Fund of certain scheduled liabilities of the
Acquired Fund, consists of this cover page and the following described
documents, each of which accompanies this Statement of Additional Information
and is incorporated herein by reference.
1. Statement of Additional Information of BT Pyramid Mutual Funds
dated April 28, 1995.
2. Annual Report of the Acquiring Fund for the fiscal year ended
December 31, 1995.
3. Annual Report of the Acquired Fund for the fiscal year ended
December 31, 1995.
This Statement of Additional Information is not a prospectus. A
Prospectus/Proxy Statement, dated March __, 1996, relating to the
above-referenced matter may be obtained without charge by calling or writing
either the Acquiring Fund or the Acquired Fund at the telephone numbers or
addresses set forth above or by calling toll-free 1-800-422-6577. This Statement
of Additional Information should be read in conjunction with the
Prospectus/Proxy Statement dated March __, 1996.
The date of this Statement of Additional Information is March __, 1996.
<PAGE>
BT PYRAMID MUTUAL FUNDS
PART C
OTHER INFORMATION
ITEM 15. INDEMNIFICATION
The response to this item is incorporated by
reference to "Liability of Trustees" under the
caption "Information on Shareholders' Rights" in Part
A of this Registration
Statement.
ITEM 16. EXHIBITS--References are to Registrant's Registration
Statement on Form N-1A as filed with the Securities
and Exchange Commission (the "SEC") (File Nos.
33-06576 and 811- 45973) (the "Registration
Statement")
(1A) Declaration of Trust of the Trust.3
(1B) Second Amended and Restated Designation of Series.3
(1C) Third Amended and Restated Establishment and
Designation of Series.3
(1D) Fourth Amended and Restated Establishment and
Designation of Series.3
(1E) Fifth Amended and Restated Establishment and
Designation of Series.3
(2) By-Laws of the Trust.3
(3) Not Applicable.
(4) Agreement and Plan of Reorganization (included as
Exhibit A to Registrant's prospectus/Proxy
Statement contained in Part A of this Registration
Statement).4
(5) Not Applicable.
(6) Not Applicable.
(7) Distribution Agreement.1
(8) Not Applicable.
(9) Administration and Services Agreement.2
(10) Plan of Distribution pursuant to Rule 12b-1 under the
1940 Act.1
(11) Opinion and Consent with respect to validity of
shares.5
(12) Opinion and Consent with respect to tax matters.4
(13) Not Applicable.
(14) Consent of Independent Accountant.5
<PAGE>
(15) Not Applicable.
(16) Powers of Attorney.1
(17) Form of Proxy Card.5
1. Incorporated by reference herein from Pre-Effective Amendment No. 1 to
the Registration Statement as filed with the SEC on June 9, 1992.
2. Incorporated by reference herein from Post-Effective Amendment No. 5 to
the Registration Statement as filed with the SEC on April 30, 1993.
3. Incorporated by reference herein from Post-Effective Amendment No. 5 to
the Registration Statement as filed with the SEC on July 31, 1995.
4. Filed herewith.
5. To be filed by amendment.
ITEM 17. UNDERTAKINGS
(1) The undersigned Registrant agrees that prior to any public reoffering
of the securities registered through the use of a prospectus which is a
part of this Registration Statement by any person or party who is
deemed to be an underwriter within the meaning of Rule 145(c) of the
Securities Act of 1933, the reoffering prospectus will contain the
information called for by the applicable registration form for
reofferings by persons who may be deemed underwriters, in addition to
the information called for by the other items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as a part of an amendment to
the Registration Statement and will not be used until the amendment is
effective, and that, in determining any liability under the Securities
Act of 1933, each post-effective amendment shall be deemed to be a new
registration statement for the securities offered therein, and the
offering of the securities at that time shall be deemed to be the
initial bona fide offering of them.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, as amended, this
Registration Statement has been signed on behalf of the registrant, in the City
of Boston and The Commonwealth of Massachusetts on the 28th day of February,
1996.
BT PYRAMID MUTUAL FUNDS
BY: /S/ PHILIP W. COOLIDGE
Philip W. Coolidge
President
As required by the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE
/S/ PHILIP W. COOLIDGE President
Philip W. Coolidge and Trustee
HARRY VANBENSCHOTEN* Trustee
Harry VanBenschoten
MARTIN J. GRUBER* Trustee
Martin J. Gruber
KELVIN J. LANCASTER* Trustee
Kelvin J. Lancaster
/S/ JOHN R. ELDER Treasurer(Principal
John R. Elder Financial and
Principal Accounting
Officer)
*By: /S/ PHILIP W. COOLIDGE
Philip W. Coolidge
as Attorney-in-Fact pursuant to
a Power of Attorney previously filed.
BT0487B
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
12. Opinion and Consent with respect to tax matters
WILLKIE FARR & GALLAGHER NEW YORK
WASHINGTON, D.C.
LONDON
PARIS
February 21, 1996
BT Pyramid Mutual Funds,
on behalf of Limited Term U.S. Government
Securities Fund
BT Institutional Funds,
on behalf of Short/Intermediate U.S.
Government Securities Fund
Short/Intermediate U.S. Government Securities Portfolio
6 St. James Avenue
Boston, Massachusetts 02116
Ladies and Gentlemen:
You have asked us for our opinion concerning certain federal income tax
consequences to (a) Short/Intermediate U.S. Government Securities Fund
(the "Acquired Fund"), a separate series of BT Institutional Funds, a
business trust organized under the laws of The Commonwealth of
Massachusetts, (b) Limited Term U.S. Government Securities Fund (the
"Acquiring Fund"), a separate series of BT Pyramid Mutual Funds, a
business trust organized under the laws of The Commonwealth of
Massachusetts, and (c) holders of shares of beneficial interest in the
Acquired Fund (the "Acquired Fund Shareholders") when the Acquired Fund
Shareholders receive shares of beneficial interest in the Acquiring
Fund (the "Acquiring Fund Shares"), in liquidation of their interests
in the Acquired Fund pursuant to an acquisition by the Acquiring Fund
of all or substantially all of the assets of the Acquired Fund in
exchange for the Acquiring Fund Shares and the assumption by the
Acquiring Fund of certain scheduled liabilities of the Acquired Fund
and the subsequent liquidation of the Acquired Fund and distribution in
liquidation of the Acquiring Fund Shares to the
ONE CITICORP CENTER 212 821 8000
153 EAST 53RD STREET FAX: 212 821 8111
NEW YORK, NY 10022-4677
<PAGE>
Acquired Fund Shareholders (the "Reorganization"), all pursuant to an
agreement and plan of reorganization.
We have reviewed such documents and materials as we have considered
necessary for the purpose of rendering this opinion. In rendering this
opinion, we assume that such documents as yet unexecuted will, when
executed, conform in all material respects to the proposed forms of
such documents that we have examined. In addition, we assume the
genuineness of all signatures, the capacity of each party executing a
document so to execute that document, the authenticity of all documents
submitted to us as originals and the conformity to original documents
of all documents submitted to us as certified or photostatic copies.
We have made inquiry as to the underlying facts which we considered to
be relevant to the conclusions set forth in this letter. The opinions
expressed in this letter are based upon certain factual statements
relating to the Acquired Fund and the Acquiring Fund set forth in the
Registration Statement on Form N-14 (the "Registration Statement")
filed by BT Pyramid Mutual Funds on behalf of the Acquiring Fund with
the Securities and Exchange Commission and representations to be made
in letters from the Acquired Fund and the Acquiring Fund addressed to
us for our use in rendering a final opinion. Based on information
received and expected to be received from the Acquired Fund and the
Acquiring Fund, we have no reason to believe that we will not be able
to render this opinion as a final opinion at the Closing. We have no
reason to believe that these representations and facts will not be
valid, but we have not attempted and will not attempt to verify
independently any of these representations and facts, and this opinion
is based upon the assumption that each of them is accurate. Capitalized
terms used herein and not otherwise defined shall have the meaning
given them in the Registration Statement.
The conclusions expressed herein are based upon the Internal Revenue
Code of 1986 (the "Code"), Treasury regulations issued thereunder,
published rulings and procedures of the Internal Revenue Service and
judicial decisions, all as in effect on the date of this letter.
Based upon the foregoing, it is our opinion that:
(1) the transfer of all or substantially all of the Acquired
Fund's assets in exchange for Acquiring Fund Shares and the assumption
by the Acquiring Fund of certain scheduled liabilities of the Acquired
Fund will constitute a "reorganization" within the meaning of Section
368(a)(1)(C) of the Code, and the Acquired Fund and the Acquiring Fund
are each a "party to a reorganization" within the meaning of Section
368(b) of the Code;
(2) no gain or loss will be recognized by the Acquiring Fund
upon the receipt of the assets of the Acquired Fund in exchange for
Acquiring Fund Shares and the assumption by the Acquiring Fund of
certain scheduled liabilities of the Acquired Fund;
(3) no gain or loss will be recognized by the Acquired Fund
upon the transfer of its assets to the Acquiring Fund in exchange for
Acquiring Fund Shares and the assumption by the Acquiring Fund of
certain scheduled liabilities of the Acquired Fund or upon the
distribution (whether actual or constructive) of Acquiring Fund Shares
to Acquired Fund Shareholders;
(4) no gain or loss will be recognized by Acquired Fund
Shareholders upon the exchange of their shares of the Acquired Fund for
Acquiring Fund Shares;
(5) the aggregate tax basis of Acquiring Fund Shares received
by each Acquired Fund Shareholder pursuant to the Reorganization will
be the same as the aggregate tax basis of the shares of the Acquired
Fund surrendered therefor, and the holding period of the Acquiring Fund
Shares to be received by each Acquired Fund Shareholder will include
the period during which the shares of the Acquired Fund exchanged
therefor were held by such Acquired Fund Shareholder (provided the
shares of the Acquired Fund were held as capital assets on the date of
the Reorganization); and
(6) the tax basis to the Acquiring Fund of the Acquired Fund's
assets acquired by the Acquiring Fund will be the same as the tax basis
of such assets to the Acquired Fund immediately prior to the
Reorganization, and the holding period of the assets of the Acquired
Fund in the hands of the Acquiring Fund will include the period during
which those assets were held by the Acquired Fund.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name and any reference to
our firm in the Registration Statement or in the Prospectus/Proxy
Statement constituting a part thereof.
Very truly yours,
/s/ WILLKIE FARR & GALLAGHER
WILLKIE FARR & GALLAGHER
