As filed with the Securities and Exchange Commission on May 8, 1996 Registration
No. 33-45973
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
[X] Pre-Effective Amendment No. 1 [ ] 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.
<PAGE>
- - ------------------------------------------------------------------------------
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 was
filed with the Securities and Exchange Commission on 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.
Short/Intermediate U.S. Government Securities Portfolio has also signed this
registration statement.
BT0489D
<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
<TABLE>
<CAPTION>
===================================================================================================================
Prospectus/Proxy
PART A ITEM NO. AND CAPTION STATEMENT CAPTION
<S> <C> <C>
- - -------------------------------------------------------------------------------------------------------------------
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 29, 1996.
- - -------------------------------------------------------------------------------------------------------------------
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;
Prospectus of Short/Intermediate
U.S. Government Securities Fund
dated April 29, 1996
<PAGE>
- - -------------------------------------------------------------------------------------------------------------------
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
- - -------------------------------------------------------------------------------------------------------------------
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 BT
Investment Limited Term U.S.
Government Securities Fund dated
April 29, 1996.
- - -------------------------------------------------------------------------------------------------------------------
Item Additional Information Statement of Additional
13. About the Company Being Information of Short/Intermediate
Acquired U.S. Government Securities Fund
dated April 29, 1996
- - -------------------------------------------------------------------------------------------------------------------
Item Financial Statements Annual Report of the Acquired
14. Fund; Annual Report of the
Acquiring Fund;
Pro Forma Combined Statements
(unaudited)
- - -------------------------------------------------------------------------------------------------------------------
===================================================================================================================
===================================================================================================================
PART C ITEM NO. AND CAPTION OTHER INFORMATION CAPTION
- - -------------------------------------------------------------------------------------------------------------------
Item Indemnification Incorporated by reference to Part
15. A caption "Information on
Shareholders' Rights -- Liability
of Trustees"
- - -------------------------------------------------------------------------------------------------------------------
Item Exhibits Exhibits
16.
- - -------------------------------------------------------------------------------------------------------------------
Item Undertakings Undertakings
17.
- - -------------------------------------------------------------------------------------------------------------------
===================================================================================================================
</TABLE>
<PAGE>
A SPECIAL NOTICE TO SHAREHOLDERS OF
BT INVESTMENT FUNDS
SHORT/INTERMEDIATE U.S. GOVERNMENT SECURITIES FUND
Dear Shareholder:
The Board of Trustees of BT Investment 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 the annual
operating expenses of the Acquiring Fund will be less than the current annual
operating expenses of the 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 May 28, 1996. WE STRONGLY INVITE YOUR PARTICIPATION
BY ASKING YOU TO REVIEW, COMPLETE AND RETURN YOUR PROXY PROMPTLY.
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
May 17, 1996
<PAGE>
BT INVESTMENT 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 May 28, 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 Investment Funds (the "Trust"), will be held at the
offices of the Trust at 6 St. James Avenue, 9th Floor, Boston, Massachusetts on
May 28, 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 May 1,
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
May 17, 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 MAY ____, 1996
ACQUISITION OF THE ASSETS OF
SHORT/INTERMEDIATE U.S. GOVERNMENT SECURITIES FUND
A SEPARATE SERIES OF
BT INVESTMENT 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 (the "Acquired Fund"), a series of
BT Investment Funds (the "Investment 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 May 28, 1996 at
9:30 a.m. (the "Meeting"), at the offices of the Investment 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") (each of the Investment Trust and the Pyramid Trust is a
"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 (each of the Acquired Fund and the Acquiring Fund is a "Fund").
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
<PAGE>
investment company. The investment objective of both Funds is to seek a high
level of current income consistent with the preservation of capital. The
Investment 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 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 Company
("Bankers Trust") is the investment adviser (the "Adviser") of the Portfolio.
Since all of each Fund's Assets are invested in the Portfolio, neither the
Investment 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 herein by
reference. A Statement of Additional Information dated May ____, 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 29, 1996 is
incorporated herein in its entirety by reference and a copy
accompanies this Prospectus/Proxy Statement.
2. The Prospectus of the Acquired Fund dated April 29, 1996 is
incorporated herein in its entirety by reference.
<PAGE>
Exhibit A to this Prospectus/Proxy Statement 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.............................................................3
REASONS FOR THE REORGANIZATION......................................7
INFORMATION ABOUT THE REORGANIZATION................................8
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES...................11
INFORMATION ON SHAREHOLDERS' RIGHTS................................12
ADDITIONAL INFORMATION ABOUT THE ACQUIRING FUND
AND THE ACQUIRED FUND..............................................14
OTHER BUSINESS.....................................................14
VOTING INFORMATION.................................................14
FINANCIAL STATEMENTS AND EXPERTS...................................16
EXHIBIT A: AGREEMENT AND PLAN OF REORGANIZATION
ADDITIONAL MATERIALS
Prospectus of the BT Investment Limited Term U.S. Government Securities Fund
dated April 29, 1996.
Prospectus of the Short/Intermediate U.S. Geovernment Securities Fund dated
April 29, 1996.
<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 EXHIBIT A TO THIS
PROSPECTUS/PROXY STATEMENT , THE ACCOMPANYING PROSPECTUS OF THE ACQUIRING FUND
DATED APRIL 29, 1996, AND THE ACCOMPANYING PROSPECTUS OF THE ACQUIRED FUND DATED
APRIL 29, 1996.
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 Investment 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 Investment 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" (as defined in the 1940 Act)
("Majority Shareholder Vote") of the Acquired Fund. Majority Shareholder Vote
means that to be approved, the proposal must receive the affirmative vote of the
lesser of: (i) 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 (ii) more than 50% of the outstanding
-3-
<PAGE>
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 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 Investment 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
-4-
<PAGE>
Acquiring Fund and the Portfolio; (2) a summary of the aggregate annual
operating expenses of the Acquired Fund and the Portfolio; and (3) a pro forma
summary of 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>
<TABLE>
<CAPTION>
ANNUAL OPERATING EXPENSES
(AS A PERCENTAGE OF THE AVERAGE DAILY NET ASSETS OF THE FUND)
ACQUIRING FUND ACQUIRED FUND PRO FORMA
<S> <C> <C> <C>
Investment advisory fee
(after reimbursements or waivers) 0.20% 0.20% 0.20%
12b-1 fees 0.00% 0.00% 0.00%
Other expenses 0.40% 0.65% 0.40%
----- ----- -----
(after reimbursements or waivers)
Total operations expenses 0.60% 0.85% 0.60%
(after reimbursements or waivers)
</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.
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
ACQUIRING FUND $6 $19 $33 $ 75
ACQUIRED FUND $9 $27 $47 $105
PRO FORMA $6 $19 $33 $ 75
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
on an annual basis to 0.25% of the Portfolio's average daily net assets.
Both the Investment 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.
-6-
<PAGE>
Total operating expenses, before reimbursements or waivers, for the fiscal
year ended December 31, 1995 were 1.13% 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 0.85% of the Acquired Fund's average net assets
annually, and the total operating expenses of the Acquiring Fund would not
exceed 0.60%. In effecting the Reorganization it is estimated that the expense
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
-7-
<PAGE>
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 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 the respective shareholders to combine the Acquired Fund with
the Acquiring Fund. In reaching this conclusion, each Board considered a number
of factors as described below.
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Among other factors, each Board considered the fact that each of the
Acquiring Fund and the Acquired Fundinvests substantially all of its 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. In addition, each Board considered that a
reduction in expenses is expected to be realized 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. In that case, the expense ratio of shareholders in the
Acquired Fund effectively will be reduced from 0.85% to 0.60%.
Each Board also considered that each of the Funds and the Portfolio share
the same service providers, including Bankers Trust as the Adviser to the
Portfolio and as the administrator, custodian and transfer agent to each Fund
and to the Portfolio. Further, each Board considered that the Reorganization
would be effected
as a tax-free reorganization.
In light of the foregoing, the Board of Trustees of the Investment 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 Investment 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
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liabilities of the Acquired Fund prepared as of the close of regular trading on
the NYSE, currently 4:00 p.m. New York City 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.
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
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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: (i) 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 (ii) 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 Investment 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;
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(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 May 1, 1996, and on a pro forma basis
as of that date, giving effect to the proposed acquisition of assets at net
asset value.
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Acquired Fund Acquiring Fund Pro Forma
(UNAUDITED) (UNAUDITED) (UNAUDITED)
Net assets $27,482,624 $26,771,624 $54,254,460
Net asset value per share $ 9.83 $ 9.84 $ 9.83
Shares outstanding 2,793,659 2,722,244 5,514,374
As of May 1, 1996 (the "Record Date"), there were 2,793,659 outstanding
shares of the Acquired Fund and 2,722,244 outstanding shares of the Acquiring
Fund. [AS OF THE RECORD DATE, THE OFFICERS AND TRUSTEES OF THE INVESTMENT TRUST
BENEFICIALLY OWNED AS A GROUP LESS THAN 1% OF THE OUTSTANDING SHARES OF THE
ACQUIRED FUND AND THE OFFICERS AND TRUSTEES OF THE PYRAMID TRUST BENEFICIALLY
OWNED AS A GROUP LESS THAN 1% OF THE OUTSTANDING SHARES OF THE ACQUIRING FUND.]
To the best knowledge of the Investment 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. Batrus & Co, whose address is 1 Bankers Trust Plaza, 17th Floor,
New York, NY 10006, owned beneficially 212,014 (7.59%) shares; Jewish Community
foundation of the South Palm Beach County Jewish Federation whose address is
9901 Donna Klein Blvd, Boca Raton, FL 33428, owned beneficially 177,000 (6.34%)
shares; and Reverend John J. Sass Associates LP, c/o Harlem Churches for
Community Improvement, Inc. whose address is 2854 Frederick Douglas Blvd., New
York, NY 10039, owned beneficially 173,598 (6.21%) shares of the Acquired Fund.
To the best knowledge 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. Bankers Trust Co. Cust Westinghouse Savannah River Co Benefits Trust
501(c)(9) whose address is 34 Exchange Place, 6th Floor, Jersey City, NJ 073021,
owned beneficially 295,382 (10.85%) shares and Bankers Trust Co Cust 401(k)
Mapco, Inc Profit Sharing & Savings Program whose address is 648 Grassmere Park
Road, Nashville, TN 37211, owned beneficially 2,268,901 (83.35%) shares of the
Acquiring Fund. After the Reorganization, Bankers Trust Co. Cust Westinghouse
Savannah River Co Benefits Trust 501(c)(9) whose address is 34 Exchange Place,
6th Floor, Jersey City, NJ 07302 is expected to own beneficially 5.36% of the
combined fund and Bankers Trust Co Cust 401(k) Mapco, Inc Profit Sharing &
Savings Program whose address is 648 Grassmere Park Road, Nashville, TN 37211,
is expected to own beneficially 4.15% of the combined fund.
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<PAGE>
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
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
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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 a "vote of the majority of the outstanding voting securities"
(as defined in the 1940 Act) of the Fund or Portfolio, as the case may be. In
addition, the Portfolio and each Fund has adopted identical non-fundamental
investment policies 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 Investment Trust's Statement of Additional Information.
INFORMATION ON SHAREHOLDERS' RIGHTS
GENERAL. The Acquired Fund and the Acquiring Fund, as series of the
Investment 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 Investment 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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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 Investment 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 Investment 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 that 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. Each Trust's Declaration 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.
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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 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 29, 1996 and the
statement of additional information dated April 29, 1996 related thereto each of
which has been filed with the SEC and is incorporated herein by reference. A
copy of such prospectus accompanies this Prospectus/Proxy Statement. 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 29, 1996 and in the Statement of Additional
Information dated April 29, 1996 related thereto each of which has been filed
with the SEC and is incorporated herein by reference. A copy of such Prospectus
and 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.
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OTHER BUSINESS
The Trustees of the Investment 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 Investment Trust to be
used at the Special Meeting of Shareholders of the Acquired Fund to be held on
May 28, 1996 at 9:30 a.m., at the offices of The Acquired Fund, 6 St. James
Avenue, 9th Floor, 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 mailed to shareholders of the Acquired Fund on or about May 1,
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.
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Approval of the Plan will require approval by a Majority Shareholder Vote.
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 $17,500. 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
provided for the Acquiring Fund by Bankers Trust and Signature) and 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 May 28, 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 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 , the statements of changes in
net assets for the two years ended December 31, 1995 and the financial
highlights for the three years ended December 31, 1995 and for the period from
August 24, 1992 (commencement of operations) to December 31, 1992, are included
in the Statement of Additional Information relating to 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
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of the Acquiring Fund, including the schedule of portfolio investments, as of
December 31, 1995, the related statement of operations for the year ended
December 31, 1995, the statements of changes in net assets for the two years
ended December 31, 1994 and 1995 and the financial highlights for the three
years ended December 31, 1995 and the period from August 24, 1992 (commencement
of operations) through December 31, 1992, are included in the Statement of
Additional Information relating to 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 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.
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EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of this 9th day of February, 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 Investment Funds (the "Investment 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 Investment 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 Investment 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 Investment 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;
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NOW, THEREFORE, in consideration of the premises and of the
covenants and agreements hereinafter set forth, the parties hereto covenant and
agree as 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
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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
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
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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 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 Investment 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 Investment 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 Investment 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 Investment Trust,
which is a business trust, validly existing and in good standing under the laws
of The Commonwealth of Massachusetts;
(b) The Investment 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 Investment Trust is not, and the execution, delivery
and performance of this Agreement in respect of the Acquired Fund will not
result,
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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 Investment Trust is a party or by
which it is bound;
(d) The Investment 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 Investment Trust or to the
Acquired Fund prior to the Closing Date;
(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 Investment 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 Investment Trust and the
Acquired Fund know of no facts which might form the basis for the institution of
such proceedings and neither the Investment 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 Investment Trust's ability to consummate the transactions
herein contemplated;
(f) The Statement of Assets and Liabilities of the Acquired
Fund as of December 31, 1995 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;
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<PAGE>
(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 Investment 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 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 Investment
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 Investment
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;
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<PAGE>
(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;
(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 December 31, 1995 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;
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(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
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 Investment 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
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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 Investment 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.
5.3. The Investment 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
Investment 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 Investment 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
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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
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 Willkie Farr & Gallagher, 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 Investment 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
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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 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
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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 Investment 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 Investment 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 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 Investment Trust's Treasurer or Assistant Treasurer on
behalf of the Acquired Fund;
7.3. The Investment 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 Willkie Farr & Gallagher, 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 Investment Trust which is
a business trust validly existing and in good standing under the laws
of The
A-12
<PAGE>
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 Investment 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 Investment
Trust enforceable against the Investment 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 Investment
Trust or any provision of any agreement (known to such counsel) to
which the Investment 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 Investment 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 Investment Trust
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 laws;
(v) only insofar as they relate to the Investment 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 Investment 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 Investment Trust with
respect to the Acquired Fund or any of the properties or assets of the
Acquired Fund and the Investment 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 Investment Trust at which the contents
of the Proxy
A-13
<PAGE>
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 Investment 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 Investment 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 Investment 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.
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 Investment
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
A-14
<PAGE>
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 Investment Trust in respect of the Acquired Fund and
satisfactory to Thomas M. Lenz, 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 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
A-15
<PAGE>
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 Investment 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 Investment Trust on behalf of the Acquired Fund and the Pyramid Trust on
behalf of the Acquiring Fund; provided, however, that following the meeting of
A-16
<PAGE>
the Acquired Fund shareholders called by the Investment 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.
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 Investment 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 Commonwealth 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
Investment 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 Investment Trust or the
Pyramid Trust, as the case may be, as provided in the trust instruments of the
Investment Trust and the Pyramid Trust, respectively. The execution and delivery
of this Agreement have been authorized by the Trustees of each of the Investment
Trust and the Pyramid Trust, and this Agreement has been executed by authorized
officers of the Investment 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 Investment Trust and the Pyramid Trust, as the case may be, as provided in
the Declaration of Trust of the Investment Trust and the Pyramid Trust,
respectively.
A-17
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its President or Vice President and attested by its
Secretary or Assistant Secretary.
Attest: BT INVESTMENT FUNDS
on behalf of SHORT/INTERMEDIATE U.S.
GOVERNMENT SECURITIES FUND
By: /S/ THOMAS M. LENZ By: /S/ PHILIP W. COOLIDGE
Name: Thomas M. Lenz Name: Philip W. Coolidge
Title: Secretary Title: President
Attest: BT PYRAMID MUTUAL FUNDS
on behalf of LIMITED TERM
U.S. GOVERNMENT SECURITIES FUND
By: /S/ THOMAS M. LENZ By: /S/ PHILIP W. COOLIDGE
Name: Thomas M. Lenz Name: Philip W. Coolidge
Title: Secretary Title: President
BT0486A
A-18
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
DATED MAY ____, 1996
ACQUISITION OF THE ASSETS OF
SHORT/INTERMEDIATE U.S. GOVERNMENT SECURITIES FUND
A SEPARATE SERIES OF
BT INVESTMENT 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 the Acquiring Fund dated April
29, 1996.
2. Statement of Additional Information of the Acquired Fund dated April
29, 1996.
3. Annual Report of the Acquiring Fund for the fiscal year ended December
31, 1995.
4. Annual Report of the Acquired Fund for the fiscal year ended December
31, 1995.
5. Pro Forma Financial Statements.
This Statement of Additional Information is not a prospectus. A
Prospectus/Proxy Statement, dated May ____, 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 only be read in conjunction with such
Prospectus/ Proxy Statement .
The date of this Statement of Additional Information is May ____, 1996.
<PAGE>
<TABLE>
<CAPTION>
INV. LIMITED
S/I U.S. TERM U.S. PRO
GOV'T GOV'T FORMA COMBINED
STATEMENT OF ASSETS AND LIABILITIES FUND FUND ADJUSTMENTS FUND
=======================================================================================================================
December 31, 1995
ASSETS
- - -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment in Portfolio, at Value $23,213,347 $29,770,837 $52,984,184
- - -----------------------------------------------------------------------------------------------------------------------
Due from Banker Trust 4,823 17,526 22,349
- - -----------------------------------------------------------------------------------------------------------------------
Receivable for Capital Stock Sold 86,015 86,015
- - -----------------------------------------------------------------------------------------------------------------------
Deferred Organizational Expenses 5,926 5,926
- - -----------------------------------------------------------------------------------------------------------------------
Prepaid Expense and Other Receivable 7,235 14,633 21,868
=======================================================================================================================
Total Assets 23,225,405 29,894,937 53,120,342
=======================================================================================================================
LIABILITIES
- - -----------------------------------------------------------------------------------------------------------------------
Payable for Capital Stock Redeemed 25,678 - 25,678
- - -----------------------------------------------------------------------------------------------------------------------
Dividend Payable 7,197 - 7,197
- - -----------------------------------------------------------------------------------------------------------------------
Accrued Expenses and Accounts Payable 24,467 25,045 (14,586) 34,926
=======================================================================================================================
Total Liabilities 57,342 25,045 (14,586) 67,801
=======================================================================================================================
NET ASSETS $23,168,063 $29,869,892 $53,052,541
- - -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, PER SHARE $9.96 $9.96 $9.96
=======================================================================================================================
COMPOSITION OF NET ASSETS
- - -----------------------------------------------------------------------------------------------------------------------
Paid-in Capital 23,162,691 29,601,204 14,586 52,778,481
- - -----------------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) from Security
Transactions 55,911 25,624 81,535
- - -----------------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation (Depreciation)
on Securities (50,539) 243,064 192,525
- - -----------------------------------------------------------------------------------------------------------------------
NET ASSETS, DECEMBER 31, 1995 $23,168,063 $29,869,892 $14,586 $53,052,541
=======================================================================================================================
=======================================================================================================================
OUTSTANDING SHARES, DECEMBER 31, 1995 2,326,397 3,000,289 5,326,686
=======================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INV. LIMITED
S/I U.S. TERM U.S.
GOV'T GOV'T
STATEMENT OF OPERATIONS FUND FUND
===================================================================================================================================
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
- - -----------------------------------------------------------------------------------------------------------------------------------
Income From Portfolio, Net $1,200,715 $1,857,232
- - -----------------------------------------------------------------------------------------------------------------------------------
EXPENSES
- - -----------------------------------------------------------------------------------------------------------------------------------
Administration and Services $108,374 $91,142
- - -----------------------------------------------------------------------------------------------------------------------------------
Professional 8,879 8,879
- - -----------------------------------------------------------------------------------------------------------------------------------
Registration 15,186 20,358
- - -----------------------------------------------------------------------------------------------------------------------------------
Trustees 2,077 6,534
- - -----------------------------------------------------------------------------------------------------------------------------------
Amortization of Organizational Expenses 1,164 5,780
- - -----------------------------------------------------------------------------------------------------------------------------------
Shareholder Reports 17,022 15,166
- - -----------------------------------------------------------------------------------------------------------------------------------
Taxes & Miscellaneous 1,756 1,959
- - -----------------------------------------------------------------------------------------------------------------------------------
Total Expenses 154,458 149,818
- - -----------------------------------------------------------------------------------------------------------------------------------
Less: Expenses Absorbed by Bankers Trust (46,084) 108,374 (58,676) 91,142
- - -----------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 1,092,341 $1,766,090
- - -----------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON SECURITIES
- - -----------------------------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) from Security Transactions 337,315 463,090
- - -----------------------------------------------------------------------------------------------------------------------------------
Net Change in Unrealized Appreciation (Depreciation) on Securities 297,631 628,130
- - -----------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON SECURITIES 634,946 1,091,220
===================================================================================================================================
NET INCREASE IN NET ASSETS FROM OPERATIONS $1,727,287 $2,857,310
===================================================================================================================================
YEAR TO DATE AVERAGE NET ASSETS 19,704,384 30,380,547
===================================================================================================================================
GROSS EXPENSE RATIO 0.78% 0.49%
- - -----------------------------------------------------------------------------------------------------------------------------------
REIMBURSEMENT RATIO -0.23% -0.19%
- - -----------------------------------------------------------------------------------------------------------------------------------
NET EXPENSE RATIO 0.55% 0.30%
===================================================================================================================================
<PAGE>
<CAPTION>
PRO
FORMA FUND
STATEMENT OF OPERATIONS [continued] ADJUSTMENTS COMBINED
=================================================================================================================================
- - ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
- - ---------------------------------------------------------------------------------------------------------------------------------
Income From Portfolio, Net $3,057,947
- - ---------------------------------------------------------------------------------------------------------------------------------
EXPENSES
- - ---------------------------------------------------------------------------------------------------------------------------------
Administration and Services 199,516
- - ---------------------------------------------------------------------------------------------------------------------------------
Professional (3,100) 14,658
- - ---------------------------------------------------------------------------------------------------------------------------------
Registration 35,544
- - ---------------------------------------------------------------------------------------------------------------------------------
Trustees 8,611
- - ---------------------------------------------------------------------------------------------------------------------------------
Amortization of Organizational Expenses (1,486) 5,458
- - ---------------------------------------------------------------------------------------------------------------------------------
Shareholder Reports (10,000) 22,188
- - ---------------------------------------------------------------------------------------------------------------------------------
Taxes & Miscellaneous 3,715
- - ---------------------------------------------------------------------------------------------------------------------------------
Total Expenses (14,586) 289,690
- - ---------------------------------------------------------------------------------------------------------------------------------
Less: Expenses Absorbed by Bankers Trust (104,760) 184,930
- - ---------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $2,873,017
- - ---------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON SECURITIES
- - ---------------------------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) from Security Transactions 800,405
- - ---------------------------------------------------------------------------------------------------------------------------------
Net Change in Unrealized Appreciation (Depreciation) on Securities 925,761
- - ---------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON SECURITIES 1,726,166
=================================================================================================================================
NET INCREASE IN NET ASSETS FROM OPERATIONS $4,599,183
=================================================================================================================================
YEAR TO DATE AVERAGE NET ASSETS 50,084,931
=================================================================================================================================
GROSS EXPENSE RATIO 0.58%
- - ---------------------------------------------------------------------------------------------------------------------------------
REIMBURSEMENT RATIO -0.21%
- - ---------------------------------------------------------------------------------------------------------------------------------
NET EXPENSE RATIO 0.37%
=================================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INV. LIMITED
S/I U.S. TERM U.S.
GOV'T GOV'T COMBINED
STATEMENT OF CHANGES IN NET ASSETS FUND FUND FUND
=================================================================================================================================
For the For the For the For the For the For the
year ended year ended year ended year ended year ended year ended
December December December December December December
31, 1995 31, 1994 31, 1995 31, 1994 31, 1995 31, 1994
- - ---------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
- - ---------------------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
- - ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Investment Income $1,092,341 $590,680 $1,766,090 $944,156 $2,873,017 $1,534,836
- - ---------------------------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss
from Security Transactions 337,315 (296,803) 463,090 (422,528) 800,405 (719,331)
- - ---------------------------------------------------------------------------------------------------------------------------------
Net Unrealized Appreciation
(Depreciation) on Securities 297,631 (337,589) 628,130 (405,207) 925,761 (742,796)
- - ---------------------------------------------------------------------------------------------------------------------------------
Net (Decrease) in Net Assets
from Operations 1,727,287 (43,712) 2,857,310 116,421 4,599,183 72,709
- - ---------------------------------------------------------------------------------------------------------------------------------
FROM DIVIDENDS AND DISTRIBUTIONS
TO SHAREHOLDERS
- - ---------------------------------------------------------------------------------------------------------------------------------
Net Investment Income (1,092,347) (590,674) (1,766,090) (944,156) (2,858,437) ($1,534,830)
- - ---------------------------------------------------------------------------------------------------------------------------------
Net Realized Gain from Security
Transactions - - - - - -
- - ---------------------------------------------------------------------------------------------------------------------------------
Net (Decrease) in Net Assets
from Distributions to Shareholders (1,092,347) (590,674) (1,766,090) (944,156) (2,858,437) (1,534,830)
- - ---------------------------------------------------------------------------------------------------------------------------------
FROM CAPITAL SHARES TRANSACTIONS
- - ---------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets from
Capital Shares Transactions 8,444,966 579,998 (2,523,359) 28,667,659 5,921,607 $29,247,657
- - ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 9,079,906 (54,388) (1,432,139) 27,839,924 7,662,353 27,785,536
=================================================================================================================================
NET ASSETS
- - ---------------------------------------------------------------------------------------------------------------------------------
Beginning of Year 14,088,157 14,142,545 31,302,031 3,462,107 45,390,188 $17,604,652
- - ---------------------------------------------------------------------------------------------------------------------------------
End of Year $23,168,063 $14,088,157 $29,869,892 $31,302,031 $53,052,541 $45,390,188
=================================================================================================================================
</TABLE>
<PAGE>
1. GENERAL
The accompanying pro forma financial statements are presented to show the
effect of the proposed acquisition of the Short/Intermediate US Government
Securities Fund of the BT Investment Funds by the Limited Term US
Government Securities Fund of the BT Pyramid Mutual Funds, as if such
acquisition had taken place as of January 1, 1996.
Short/Intermediate US Government Securities Fund and Limited Term US
Government Securities Fund invest substantially all of its assets in the
Short/Intermediate US Government Securities Portfolio ("Portfolio"). Since
the acquisition will not have any effect on the Portfolio the pro forma
financial statements for the portfolio will not be presented. The statement
of assets and liabilities, the related statement of operations and the
schedule of portfolio investments of the Short/Intermediate US Government
Securities Portfolio are included in the annual reports for the
Short/Intermediate US Government Securities Fund and Limited Term US
Government Securities Fund, dated December 31, 1995.
Under the terms of the Agreement and Plan of Reorganization, the
combination of the Limited Term US Government Securities Fund and
Short/Intermediate US Government Securities Fund will be structured for tax
purposes to qualify as a tax-free reorganization under the Internal Revenue
Code and, accordingly, will be accounted for by the method of accounting
for tax free mergers of investment companies. The acquisition of the net
assets of Short/Intermediate US Government Securities Fund in exchange for
shares of Limited Term US Government Securities Fund at net asset value.
The statement of assets and liabilities and the related statement of
operations of Short/Intermediate US Government Securities Fund and Limited
Term US Government Securities Fund which are included in their respective
annual reports dated December 31, 1995.
The following notes refer to the accompanying pro forma financial
statements as if the aforementioned acquisition of Short/Intermediate US
Government Securities Fund and Limited Term US Government Securities Fund
had taken place as of January 1, 1996.
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
A. Organization
BT Pyramid Mutual Funds (the "Trust") is registered under the
Investment Company Act of 1940 (the "Act"), as amended, as an open-end
management investment company. The Trust was organized on February 28,
1992, as a business trust under the laws of the Commonwealth of
Massachusetts. The BT Investment Limited Term US Government Securities
Fund (the "Fund") is one of the funds offered to investors by the
Trust. The Fund commenced operations and began offering shares of
beneficial interest on August 24, 1992. The Fund invest substantially
all of its assets in the Short/Intermediate US Government Securities
Portfolio (the "Portfolio"). The Portfolio is an open-end management
investment company registered under the Act. The Fund seeks to achieve
its investment objective by investing all of its investable assets in
the Portfolio. The value of such investment in the Portfolio reflects
the Fund's proportionate interest in the net assets of the Portfolio.
At December 31, 1995, the Fund's investment was approximately 54% of
the Portfolio.
B. Investment Income
The Fund earns interest income, net of expenses, daily on its
investment in the Portfolio. All of the net investment income and
realized and unrealized gains and losses from the security transactions
of the Portfolio are allocated pro rata among the investors in the
Portfolio at the time of such determination.
C. Organizational Expenses
Costs incurred by the Fund in connection with its organization and
initial registration are being amortized evenly over a period of sixty
months.
D. Dividends
The Fund declares dividends daily from net investment income and pays
these dividends monthly. Dividends payable to shareholders are recorded
by the Fund on the ex-dividend date, which is the same as the
declaration date. Distributions of net realized short-term and
long-term capital gains, if any, will be made annually to the extent
they are not offset by any capital loss carryforwards.
E. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to shareholders. Therefore, no
federal income tax provision is required.
F. Other
The Trust accounts separately for the assets, liabilities, and
operations of the Fund. Expenses directly attributed to the Fund are
charged to the Fund, while expenses which are attributable to all of
the Trust's funds are allocated among them.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts in the financial
statements.
NOTE 2 - FEES AND TRANSACTIONS WITH AFFILIATES
The Fund has entered into an Administration and Service Agreement with
Bankers Trust Company ("Bankers Trust"). Under this Administration and
Services Agreement, Bankers Trust provides administrative, custody,
transfer agency and shareholder services to the Fund in return for a fee
computed daily and paid monthly at an annual rate of 0.30 of 1% of the
Fund's average daily net assets. For the year ended December 31, 1995, this
fee aggregated $91,142.
The Trust has entered into a Distribution Agreement with Signature
Broker-Dealer Service, Inc. ("Signature"). Under the Distribution Agreement
with the Trust, pursuant to Rule 12b-1 of the 1940 Act, Signature may seek
reimbursement, at annual rate not exceeding 0.20 of 1% of the Fund's
average daily net assets, for expensed incurred in connection with any
activities primarily intended to result in the sale of the Fund's shares.
For the year ended December 31, 1995, there were no reimbursable expenses
incurred under this agreement.
Bankers Trust has voluntarily undertaken to waive and reimburse expenses of
the Fund, to the extent necessary, to limit all expenses to 0.30 of 1% of
the average daily net assets of the Fund, excluding expenses of the
Portfolio, and 0.60 of 1% of the average daily net assets of the Fund,
including expenses of the Portfolio. For the year ended December 31, 1995,
expenses of the Fund have been reduced by $58,676.
The Fund is subject to such limitations as may from time to time be imposed
by the Blue Sky laws of states in which the Fund sells its shares.
Currently, the most restrictive jurisdiction imposes expense limitations of
2.5% of the first $30,000,000 of the average daily net assets, 2.0% of the
next $70,000,000, and 1.5% of any excess over $100,000,000.
Certain trustees and officers of the Funds are also directors, officers
and/or employees of Signature. None of the trustees so affiliated received
compensation for service as trustee of the Fund. Similarly, none of the
Fund's officers received compensation from the Fund.
2. PRO FORMA ADJUSTMENTS
The accompanying pro forma financial statements reflect adjustments made to
expenses for duplicated services that would not have been incurred if the
merger took place on January 1, 1996. Since the funds had identical net
asset values per share of $9.96 at December 31, 1995, there were no changes
in the fund shares.
NOTE 3 - SHARES OF BENEFICIAL INTEREST
At December 31, 1995, there were an unlimited number of shares of
beneficial interest authorized. Transactions in shares of beneficial
interest were as follows:
<TABLE>
<CAPTION>
For the For the
year ended year ended
December December
31, 1995 31, 1994
---------------------------------------- ------------------------------------
Shares Amount Shares Amount
------------ ------------- ------------ -------------
<S> <C> <C> <C> <C>
Sold 1,207,729 11,921,648 3,429,062 33,692,378
Reinvested 178,335 1,754,361 93,259 939,424
Redeemed (1,643,080) (16,199,368) (609,128) (5,964,143)
---------- ----------- ---------- ----------
Net Increase
(Decrease) (257,016) (253,359) (2,913,193) (28,667,659)
========== =========== =========- ===========
</TABLE>
<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. 33-7404 and 811-4760) (the
"Registration Statement")
(1A) Declaration of 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).
(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
C-1
<PAGE>
(11) Legal opinion and consent with respect to validity of shares.5
(12) Legal opinion and consent with respect to tax matters.4
(13) Not applicable.
(14) Consent of independent accountant.5
(15) Not applicable.
(16) Not applicable.
(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 Incorporated by reference herein from the initial filing of this
registration statement on Form N-14 with the SEC on February 29,
1996.
5 Filed herewith.
ITEM 17. UNDERTAKINGS
C-2
<PAGE>
(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.
C-3
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, as amended, this registration
statement on Form N-14 (File No. 33-45973) has been signed on behalf of the
registrant, in the City of Boston and The Commonwealth of Massachusetts on the
30th day of April, 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 above.
SIGNATURE TITLE
/S/PHILIP W. COOLIDGE President and Trustee
Philip W. Coolidge
HARRY VAN BENSCHOTEN Trustee
Harry Van Benschoten
MARTIN J. GRUBER Trustee
Martin J. Gruber
KEVIN J. LANCASTER Trustee
Kevin J. Lancaster
/S/JOHN R. ELDER Treasurer and Secretary (Principal
John R. Elder Financial and Principal Accounting Officer)
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, as amended, this registration
statement on Form N-14 (File No. 33-45973) of BT Pyramid Mutual Funds has been
signed on behalf of Short/Intermediate U.S. Government Securities Portfolio, in
the City of Boston and The Commonwealth of Massachusetts on the 30th day of
April, 1996.
SHORT/INTERMEDIATE U.S. GOVERNMENT SECURITIES
PORTFOLIO
BY: /S/ PHILIP W. COOLIDGE
Philip W. Coolidge
President
As required by the Securities Act of 1933, as amended, this registration
statement of BT Pyramid Mutual Funds has been signed by the following persons in
the capacities and on the date indicated above.
SIGNATURE TITLE
/S/PHILIP W. COOLIDGE President and Trustee of Short/Intermediate
Philip W. Coolidge U.S. Government Securities Portfolio
CHARLES P. BIGGAR Trustee of Short/Intermediate U.S. Government
Charles P. Biggar Securities Portfolio
S. LELAND DILL Trustee of Short/Intermediate U.S. Government
S. Leland Dill Securities Portfolio
PHILIP SAUNDERS, JR. Trustee of Short/Intermediate U.S. Government
Philip Saunders, Jr. Securities Portfolio
/S/JOHN R. ELDER Treasurer of Short/Intermediate U.S. Government
John R. Elder Securities Portfolio (Principal Financial
and Principal Accounting Officer)
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
(11) Legal opinion and consent with respect to validity of
shares.
(14) Consent of independent accountant
(17) Form of proxy card.
May 8, 1996
BT Pyramid Mutual Funds
6 St. James Avenue
Boston, Massachusetts 02116
Ladies and Gentlemen;
This opinion is being furnished in connection with the proposed
reorganization as described in the Agreement and Plan of Reorganization dated as
of February 9, 1996 (the "Agreement") among BT Pyramid Mutual Funds (the
"Pyramid Trust"), a business trust organized under the laws of the Commonwealth
of Massachusetts, on behalf of Limited Term U.S. Government Securities Fund (the
"Acquiring Fund"), a series of the Pyramid Trust, and BT Investment Funds (the
"Investment Trust"), a business trust organized under the laws of the
Commonwealth of Massachusetts, on behalf of Short/Intermediate U.S. Government
Securities Fund (the "Acquired Fund"), the registration statement on Form N-14
(the "Registration Statement") under the Investment Company Act of 1940, as
amended (the "1940 Act"), and the Securities Act of 1933, as amended (the "1933
Act"), of the Pyramid Trust, and in conjunction with the registration, pursuant
to Rule 24f-2 under the 1940 Act, of an indefinite number of Shares of
Beneficial Interest (par value $0.00001 per share) (the "Shares") of the Pyramid
Trust's series.
This opinion is limited solely to the laws of the Commonwealth of
Massachusetts as applied by courts in such Commonwealth. I understand that the
foregoing limitation is acceptable to you.
I have examined copies of the Pyramid Trust's Declaration of Trust, its
ByLaws, resolutions adopted by its Board of Trustees and such other records and
documents as I have deemed necessary for purposes of this opinion.
Based upon the subject of the foregoing, please be advised that it is my
opinion that all necessary Pyramid Trust action precedent to the issuance of the
shares registered pursuant to the Registration Statement has been duly taken.
Pyramid Trust's Shares when issued will be legally issued and fully paid and non
assessable, except that, as set forth in the Registration Statement,
shareholders of the Trust may under certain circumstances be held personally
liable for its obligations.
Very truly yours,
/s/ PHILIP W. COOLIDGE
Philip W. Coolidge
CONSENT OF INDEPENDENT AUDITORS
We consent to the inclusion in this Pre-effective Amendment to the Registration
Statement of the BT Pyramid Mutual Funds of Form N-14 of our report dated
February 22, 1996 on our audit of the financial statements and financial
highlights of the Short/Intermediate U.S. Government Securities Portfolio, which
report is included in the Annual Report to Shareholders for the year ended
December 31, 1995 which is included in the Registration Statement. We also
consent to the reference to our Firm under the caption "Financial Statements
and Experts".
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Kansas City, Missouri
May 8, 1996
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the inclusion in this Pre-effective Amendment to the Registration
Statement of the BT Pyramid Mutual Funds of Form N-14 of our report dated
February 22, 1996 on our audit of the financial statements and financial
highlights of the Short/Intermediate U.S. Government Securities Fund (one of the
funds comprising BT Investment Funds), which report is included in the Annual
Report to Shareholders for the year ended December 31, 1995 which is included in
the Registration Statement. We also consent to the reference to our Firm under
the caption "Financial Statements and Experts".
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Kansas City, Missouri
May 8, 1996
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the inclusion in this Pre-effective Amendment to the Registration
Statement of the BT Pyramid Mutual Funds of Form N-14 of our report dated
February 22, 1996 on our audit of the financial statements and financial
highlights of the BT Investment Limited Term U.S. Government Securities Fund
(one of the funds comprising BT Pyramid Mutual Funds), which report is included
in the Annual Report to Shareholders for the year ended December 31, 1995 which
is included in the Registration Statement. We also consent to the reference to
our Firm under the caption "Financial Statements and Experts".
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Kansas City, Missouri
May 8, 1996
PROXY BALLOT
SHORT/INTERMEDIATE U.S. GOVERNMENT SECURITIES FUND
A SERIES OF
BT INVESTMENT FUNDS
The undersigned, revoking all prior proxies, hereby appoints Thomas M. Lenz,
Philip W. Coolidge and Andres E. Saldana, or any of them individually, as
proxies, with full powers of substitution, to vote for the undersigned at the
Special Meeting of Shareholders of Short/Intermediate U.S. Government Securities
Fund (the "Fund"), a series of BT Investment Funds (the "Trust"), to be held at
the offices of the Trust, 6 St. James Avenue, Boston, Massachusetts on May 15,
1996, at 10:00 a.m., or any adjournment thereof, notice of which meeting and the
Proxy Statement accompanying the same have been received by the undersigned,
upon the following manners as described in the Notice of Special Meeting and
accompanying Proxy Statement.
1) TO APPROVE 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 INVESTMENT LIMITED TERM U.S.
GOVERNMENT SECURITIES FUND (THE "ACQUIRING FUND"). A SERIES OF BT PYRAMID
MUTUAL FUNDS, IN EXCHANGE FOR SHARE 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.
FOR |_| AGAINST |_| ABSTAIN |_|
2) TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR
ANY ADJOURNMENT THEREOF.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES
SAID PROXIES WILL VOTE THIS PROXY AS DIRECTED, OR IF NO DIRECTION IS
INDICATED, FOR PROPOSALS 1 AND 2 UNLESS AUTHORITY TO DO SO IS SPECIFICALLY
WITHHELD IN THE MANNER PROVIDED.
DATED _______, 1996
(please date this proxy)
-------------------------------------------
Please sign exactly as your name or names appear above.
Corporate proxies should be signed by an authorized officer.
------------------------------------------------------------------------
PLEASE MARK, DATE SIGN AND RETURN THIS PROXY
BALLOT PROMPTLY, USING THE ENCLOSED ENVELOPE.
------------------------------------------------------------------------
