SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
BT PYRAMID MUTUAL FUNDS
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(I)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
2
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BT Pyramid Mutual Funds
BT Investment Equity Appreciation Fund ("Equity Appreciation Fund")
o Investment Class
o Service Class
BT Investment Money Market Fund ("Money Market Fund")
BT Investment Equity 500 Index Fund ("Equity 500 Fund")
BT PreservationPlus Fund ("PreservationPlus Fund")
o Investment Class
o Institutional Class
o Institutional Service Class
o Service Class
One South Street
Baltimore, Maryland 21202
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held October 8, 1999
A Special Meeting of shareholders of BT Pyramid Mutual Funds (the "Trust")
will be held at the offices of BT Alex. Brown Incorporated, One South Street,
30th Floor, Baltimore, Maryland 21202 on October 8, 1999 at 11:00 a.m. (the
"Special Meeting"). The Trust is an open-end management investment company,
organized under the laws of the Commonwealth of Massachusetts, that is comprised
of the above four series (each a "Fund," and collectively, the "Funds") and BT
Institutional Asset Management Fund, which is not addressed in the accompanying
Joint Proxy Statement ("Proxy Statement"). Each of the Money Market Fund, Equity
500 Fund and PreservationPlus Fund (the "Feeder Funds") operates as a feeder
fund in a master-feeder fund arrangement with a corresponding master fund
portfolio (each a "Portfolio," and collectively, the "Portfolios"). Each Feeder
Fund seeks to achieve its respective investment objectives by investing all of
its investable assets in a corresponding Portfolio with the same investment
objective and policies. The Portfolio in which the PreservationPlus Fund invests
is organized as a separate series of BT Investment Portfolios, an open-end
management investment company, and the Portfolios in which the Money Market Fund
and Equity 500 Fund invest are organized as separately registered open-end
management investment companies, in each case established as a trust under the
laws of the State of New York. Pursuant to the requirements of the Investment
Company Act of 1940, as amended, applicable to master-feeder arrangements, each
Feeder Fund's voting rights with respect to the Portfolio interests that it
holds must be passed through to the Fund's own shareholders.
The Equity Appreciation Fund is not part of a master-feeder arrangement
and, as such, makes direct investments in securities rather than through a
Portfolio. Throughout the Proxy Statement, for shareholders of the Equity
Appreciation Fund references to the Trustees of the Trust and the Portfolio
should be read as a reference to the Trustees of the Trust, references to the
Boards should be read as a reference to the Board of the Trust and references to
agreements of a Portfolio should be read as references to an agreement in
respect of this Fund.
The PreservationPlus Fund is comprised of four separate classes and the
Equity Appreciation Fund is comprised of two separate classes, each with its own
expense structure. However, since the proposals presented in the Proxy Statement
uniformly affect all classes, shareholders of each class may vote on all the
proposals, and each vote regardless of its class has equal weight.
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The Special Meeting is being held to consider and vote on the following
matters for each Fund, as indicated below and more fully described under the
corresponding Proposals in the Proxy Statement, and such other matters as may
properly come before the meeting or any adjournments thereof:
PROPOSAL I:
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(Proposal IA: All Funds To approve or disapprove new investment advisory
Proposals IB and IC: agreements (each a "New Advisory Agreement" and
Equity Appreciation collectively the "New Advisory Agreements") for
Fund and each Fund's corresponding Portfolio:
PreservationPlus Fund
ONLY)
A. To approve or disapprove a New Advisory
Agreement between each Fund's corresponding
Portfolio and Bankers Trust Company ("Bankers
Trust").
B. To approve or disapprove a New Advisory
Agreement between each Fund's corresponding
Portfolio and Morgan Grenfell Inc. ("MGI" and,
together with Bankers Trust, the "Advisers") to
be implemented within two years of the date of
the Special Meeting upon approval of the
members of the Trust's and the Portfolio's
Boards of Trustees, respectively, who are not
"interested persons" ("Independent Trustees")
(as defined in the Investment Company Act of
1940, as amended).
C. To approve or disapprove a new sub-investment
advisory agreement (the "New Sub-advisory
Agreements," which term, unless otherwise
specified, is included within the meaning of
New Advisory Agreements) among each Fund's
corresponding Portfolio, MGI and Bankers Trust
under which Bankers Trust may perform certain
of MGI's responsibilities, at MGI's expense,
under the applicable New MGI Advisory Agreement
with the applicable Portfolio upon approval of
the Independent Trustees of the Trust and the
Portfolio.
PROPOSAL II: To elect Trustees of the Trust and the Portfolios
(All Funds) to hold office until their respective successors
have been duly elected and qualified or until
their earlier resignation or removal.
PROPOSAL III: To ratify or reject the selection of
(Money Market Fund, PricewaterhouseCoopers LLP as the independent
Equity 500 Fund and accountants for the Money Market Fund, Equity 500
Equity Appreciation Fund and Equity Appreciation Fund and their
Fund ONLY) corresponding Portfolios for the current fiscal
year.
PROPOSAL IV: To ratify or reject the selection of Ernst &
(PreservationPlus Fund Young LLP as the independent accountants for
ONLY) PreservationPlus Fund and its corresponding
Portfolio for the current fiscal year.
The appointed proxies will vote in their discretion on any other business
as may properly come before the Special Meeting or any adjournment thereof.
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THE NEW ADVISORY AGREEMENTS DESCRIBED IN PROPOSALS IA, IB AND IC,
RESPECTIVELY, WILL CONTAIN SUBSTANTIALLY THE SAME TERMS AND CONDITIONS, EXCEPT
FOR THE PARTIES AND THE DATES OF EXECUTION, EFFECTIVENESS AND INITIAL TERM, AS
THE PRIOR INVESTMENT ADVISORY AGREEMENTS PURSUANT TO WHICH SERVICES WERE
PROVIDED TO THE PORTFOLIOS. IN ADDITION, THE FORM OF NEW SUB-ADVISORY AGREEMENT
AUTHORIZES THE APPLICABLE INVESTMENT ADVISER TO ADJUST THE DUTIES, THE AMOUNT OF
ASSETS TO BE MANAGED AND THE FEES PAID TO THE INVESTMENT SUBADVISER WITH AND
UPON THE APPROVAL OF THE BOARD AND THE INDEPENDENT TRUSTEES OF EACH BOARD. (THE
MONEY MARKET FUND AND EQUITY 500 FUND ARE NOT BEING ASKED TO VOTE ON PROPOSALS
IB AND IC.) AS MORE FULLY DISCUSSED IN THE ACCOMPANYING JOINT PROXY STATEMENT,
APPROVAL OF THE NEW ADVISORY AGREEMENTS, WHICH PROVIDE FOR THE SAME SERVICES TO
BE PROVIDED AT THE SAME FEES, IS GENERALLY OCCASIONED BY THE MERGER OF CIRCLE
ACQUISITION CORPORATION, A WHOLLY-OWNED SUBSIDIARY OF DEUTSCHE BANK A.G.
("DEUTSCHE BANK"), WITH AND INTO BANKERS TRUST CORPORATION, THE PARENT COMPANY
OF BANKERS TRUST. MGI IS, AND AS A RESULT OF THIS TRANSACTION, BANKERS TRUST
BECAME, AN INDIRECT WHOLLY OWNED SUBSIDIARY OF DEUTSCHE BANK. THE NEW ADVISORY
AGREEMENTS WITH MGI DESCRIBED IN PROPOSAL IB AND THE NEW SUB-ADVISORY AGREEMENTS
WITH BANKERS TRUST DESCRIBED IN PROPOSAL IC WILL PERMIT DEUTSCHE BANK, UPON THE
APPROVAL OF THE INDEPENDENT TRUSTEES OF THE TRUST AND THE PORTFOLIOS, TO
SIMPLIFY THE ORGANIZATIONAL STRUCTURE OF ITS U.S. MUTUAL FUND OPERATIONS,
ENHANCE THE EFFICIENCY OF THEIR ADMINISTRATION AND PROMOTE CONSISTENCY OF
INTERNAL CONTROLS, COMPLIANCE AND REGULATORY OVERSIGHT. THE DEFERRAL IN
IMPLEMENTING THE NEW ADVISORY AGREEMENTS WITH MGI IS NEEDED TO PERMIT DEUTSCHE
BANK A SUFFICIENT AMOUNT OF TIME (WHICH WILL VARY FOR DIFFERENT PORTFOLIOS) TO
PLAN, PREPARE AND INSTITUTE THE NECESSARY ARRANGEMENTS FOR MGI TO CONSOLIDATE
DEUTSCHE BANK'S U.S. MUTUAL FUND OPERATIONS.
The close of business on July 22, 1999 has been fixed as the record date
for the determination of the shareholders of each Fund entitled to notice of,
and to vote at, the Special Meeting. You are cordially invited to attend the
Special Meeting.
IF YOU HAVE ANY QUESTIONS CONCERNING THE PROXY STATEMENT OR THE PROCEDURES
TO BE FOLLOWED TO EXECUTE AND DELIVER A PROXY, PLEASE CONTACT SHAREHOLDER
COMMUNICATIONS CORPORATION AT 1-800-732-6168.
This notice and related proxy material are first being mailed to
shareholders on or about August 23, 1999. This proxy is being solicited on
behalf of the Board of Trustees of the Trust.
By Order of the Board of Trustees,
Daniel O. Hirsch, Secretary
New York, New York
August 23, 1999
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WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE,
DATE AND SIGN THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN
THE ENCLOSED ENVELOPE IN ORDER TO ASSURE REPRESENTATION
OF YOUR SHARES (UNLESS YOU ARE VOTING BY TELEPHONE
OR THROUGH THE INTERNET). NO POSTAGE NEED BE
AFFIXED IF THE PROXY CARD IS MAILED
IN THE UNITED STATES.
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BT PYRAMID MUTUAL FUNDS
BT Investment Equity Appreciation Fund (Equity Appreciation Fund")
o Investment Class
o Service Class
BT Investment Money Market Fund ("Money Market Fund")
BT Investment Equity 500 Index Fund ("Equity 500 Fund")
BT PreservationPlus Fund ("PreservationPlus Fund")
o Investment Class
o Institutional Class
o Institutional Service Class
o Service Class
One South Street
Baltimore, Maryland 21202
PROXY STATEMENT FOR THE SPECIAL MEETING OF SHAREHOLDERS
October 8, 1999
This Joint Proxy Statement ("Proxy Statement") is being furnished in
connection with the solicitation of proxies by the Board of Trustees of BT
Pyramid Mutual Funds (the "Trust") with respect to the above four series thereof
(each a "Fund," and collectively, the "Funds") for use at the special meeting of
the Trust to be held at the offices of BT Alex. Brown, One South Street, 30th
Floor, Baltimore, Maryland 21202 on October 8, 1999 at 11:00 a.m. (the "Special
Meeting") and at any adjournments thereof. This Proxy Statement and accompanying
proxy card(s) ("Proxy") are expected to be mailed to shareholders on or about
August 23, 1999.
Each of the Money Market Fund, Equity 500 Fund and PreservationPlus Fund
(the "Feeder Funds") operates as a feeder fund in a master-feeder fund
arrangement with a corresponding master fund portfolio (each a "Portfolio," and
collectively, the "Portfolios"). The Portfolio in which the BT PreservationPlus
Fund invests is organized as a separate series of BT Investment Portfolios ("BT
Portfolios"), an open-end management investment company, and the Portfolios in
which the Money Market Fund and Equity 500 Fund invest are organized as
separately registered open-end management investment companies, in each case
established as a trust under the laws of the State of New York. Each Feeder Fund
seeks to achieve its respective investment objectives by investing all of its
investable assets in a corresponding Portfolio with the same investment
objectives and policies.
The Equity Appreciation Fund is not part of a master-feeder arrangement
and, as such, makes direct investments in securities rather than through a
Portfolio. Throughout this Proxy Statement, for shareholders of the Equity
Appreciation Fund references to the Trustees of the Trust and the Portfolio
should be read as a reference to the Trustees of the Trust, references to the
Boards should be read as a reference to the Board of the Trust and references to
agreements of a Portfolio should be read as references to an agreement in
respect of this Fund.
For simplicity, actions are described in this Proxy Statement as being
taken by a Fund, which is a series of the Trust, although all actions are
actually taken by the Trust on behalf of the applicable
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series or Fund. Some actions described as taken by or with respect to a Fund are
actually actions to be taken by the corresponding Portfolio in which the Fund
invests all of its assets and on which the Fund votes as a shareholder. Further,
actions described as being taken by the shareholders of the Trust with respect
to its Board of Trustees will also be taken by the Funds as shareholders of the
Portfolios with respect to the Portfolios' respective Boards of Trustees. Your
vote and the vote of other shareholders of the relevant Fund determines how the
Fund will vote with respect to itself and its corresponding Portfolio. See
"Background."
The PreservationPlus Fund is comprised of four separate classes and the
Equity Appreciation Fund is comprised of two separate classes, each with its own
expense structure. However, since the proposals presented in this Proxy
Statement uniformly affect all classes, shareholders of each class may vote on
all the proposals, and each vote regardless of its class has equal weight.
The Special Meeting is being held to consider and vote on the following
matters for each Fund, as indicated below and described more fully under the
corresponding Proposals discussed herein, and such other matters as may properly
come before the meeting or any adjournments thereof:
PROPOSAL I:
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(Proposal IA: All To approve or disapprove new investment advisory
Funds agreements (each a "New Advisory Agreement" and
Proposals IB and IC: collectively the "New Advisory Agreements") for
Equity Appreciation each Fund's corresponding Portfolio:
Fund and
PreservationPlus Fund
ONLY)
A. To approve or disapprove a New Advisory
Agreement between each Fund's corresponding
Portfolio and Bankers Trust Company ("Bankers
Trust") (the "New BT Advisory Agreements").
B. To approve or disapprove a New Advisory
Agreement between each Fund's corresponding
portfolio and Morgan Grenfell Inc. ("MGI," and,
together with Bankers Trust, the "Advisers")
(the "New MGI Advisory Agreements") to be
implemented within two years of the date of the
Special Meeting upon approval of the members of
the Trust's and the Portfolios' Boards of
Trustees, respectively, who are not "interested
persons" thereof ("Independent Trustees") (as
defined in the Investment Company Act of 1940,
as amended (the "Act")).
C. To approve or disapprove a new sub-investment
advisory agreement (the "New Sub-advisory
Agreements," which term, unless otherwise
specified, is included within the meaning of
New Advisory Agreements) among each Fund's
corresponding Portfolio, MGI and Bankers Trust
under which Bankers Trust may perform certain
of MGI's responsibilities, at MGI's expense,
under the applicable New MGI Advisory Agreement
with the applicable Portfolio upon approval of
the Independent Trustees of the Trust and the
Portfolios.
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PROPOSAL II: To elect Trustees of the Trust and the Portfolios
(All Funds) to hold office until their respective successors
have been duly elected and qualified or until
their earlier resignation or removal.
PROPOSAL III: To ratify or reject the selection of
(Money Market Fund, PricewaterhouseCoopers LLP as the independent
Equity 500 Fund and accountants for the Money Market Fund, Equity 500
Equity Appreciation Fund and Equity Appreciation Fund and their
ONLY) corresponding Portfolios for the current fiscal
Fund year.
PROPOSAL IV: To ratify or reject the selection of Ernst & Young
(PreservationPlus LLP as the independent accountants for the
Fund ONLY) PreservationPlus Fund and its corresponding
Portfolio for the current fiscal year.
The appointed proxies will vote on any other business as may properly come
before the Special Meeting or any adjournment thereof.
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The Funds' shareholders are to consider the approval of new investment
advisory agreements as indicated in the table below:
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Fund Corresponding Portfolio
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Equity Appreciation Fund N/A
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Money Market Fund Cash Management Portfolio ("Cash Portfolio")*
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Equity 500 Fund Equity 500 Index Portfolio ("Equity 500 Portfolio")*
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PreservationPlus Fund BT PreservationPlus Portfolio ("PreservationPlus
Portfolio")**
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* A separately registered open-end management company organized as a trust
under the laws of the State of New York.
** A separate series of BT Portfolios.
The shareholders of the Trust are also to consider the election of Charles
P. Biggar, S. Leland Dill, Martin J. Gruber, Richard Hale, Richard J. Herring,
Bruce E. Langton, Philip Saunders, Jr. and Harry Van Benschoten (the "Trustee
Nominees") as Trustees of the Trust and Portfolios.1 Dr. Gruber and Mr. Van
Benschoten currently serve on the Board of the Trust and Messrs. Biggar, Dill
and Saunders currently serve on the Board of the Portfolios (collectively, the
"Boards"). Drs. Gruber and Herring and Messrs. Biggar, Dill, Langton and Van
Benschoten currently serve as Trustees of various other investment companies
within the Bankers Trust family of funds. To ensure adherence by the Trust and
the Portfolios to Section 15(f) of the Act, only Mr. Hale will be an "interested
person" (within the meaning of Section 2(a)(19) of the Act) of the Funds or
Portfolios following the Merger (as defined herein) and the approval of the New
Advisory Agreements.
Notice of the Special Meeting and a Proxy accompany this Proxy Statement.
Proxy solicitations will be made primarily by mail, but solicitations may also
be made by telephone, telegraph, through the Internet or in person by officers
or agents of the Funds. All costs of solicitation, including (a) printing and
mailing of this Proxy Statement and accompanying material, (b) the reimbursement
of brokerage firms and others for their expenses in forwarding solicitation
material to the beneficial owners of the Funds' shares, (c) payment to
Shareholder Communications Corporation for its services in soliciting proxies
and (d) supplementary solicitations to submit Proxies, will be borne by Bankers
Trust. If the Funds record votes by telephone or through the Internet, they will
use procedures designed to authenticate shareholders' identities, to allow
shareholders to authorize the voting of their shares in accordance with their
instructions, and to confirm that their instructions have been properly
recorded. Proxies voted by telephone or through the Internet may be revoked at
any time before they are voted in the same manner that proxies voted by mail may
be revoked.
THE ANNUAL REPORT OF EACH FUND CONTAINING AUDITED FINANCIAL STATEMENTS FOR
THE FISCAL YEAR ENDED SEPTEMBER 30, 1998 (FOR THE PRESERVATIONPLUS FUND) AND
DECEMBER 31, 1998 (FOR THE MONEY MARKET FUND AND EQUITY 500 FUND), AS WELL AS
THE SEMI-ANNUAL REPORT OF EACH FUND (EACH A "REPORT"), HAVE PREVIOUSLY BEEN
FURNISHED TO THE FUNDS' RESPECTIVE SHAREHOLDERS. AN
1 Unless otherwise indicated, references in this Proxy Statement to the
"Trustee Nominees" includes the Trustee Nominees of both the Trust and the
Portfolios.
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ADDITIONAL COPY OF EACH REPORT WILL BE FURNISHED WITHOUT CHARGE UPON REQUEST BY
WRITING TO THE TRUST AT THE ADDRESS SET FORTH ON THE COVER OF THIS PROXY
STATEMENT OR BY CALLING 1-800-368-4031.
If the enclosed Proxy is properly executed and returned in time to be
voted at the Special Meeting, the shares represented thereby will be voted in
accordance with the instructions marked on the Proxy. Shares of a Fund are
entitled to one vote each at the Special Meeting and fractional shares are
entitled to proportionate shares of one vote. If no instructions are marked on
the Proxy with respect to a specific Proposal, the Proxy will be voted "FOR" the
approval of such Proposal and in accordance with the judgment of the persons
appointed as proxies with respect to any other matter that may properly come
before the Special Meeting. Any shareholder giving a Proxy has the right to
attend the Special Meeting to vote his/her shares in person (thereby revoking
any prior Proxy) and also the right to revoke the Proxy at any time by written
notice received by the applicable Fund prior to the time it is voted.
Bankers Trust will vote any shares in accounts as to which it has
investment authority, and shares in any other accounts as to which Bankers Trust
is the agent of record, which are not otherwise represented in person or by
proxy at the Special Meeting. Bankers Trust will vote shares of each Fund over
which it has investment discretion in accord with its fiduciary and other legal
obligations, and in its discretion may consult with the beneficial owners or
other fiduciaries. Bankers Trust will vote shares of each Fund for which it is
the owner of record but does not have investment discretion, with respect to
each Proposal on which shareholders of the applicable Fund are entitled to vote,
which are not otherwise represented in person or by proxy at the Special
Meeting. These shares will be voted by Bankers Trust for, against, or
abstaining, in the same proportion as the votes cast by holders of all shares in
the Fund otherwise represented at the Special Meeting. This practice is commonly
referred to as "mirror" or "echo" voting.
In the event that a quorum is not present at the Special Meeting, or if a
quorum is present but sufficient votes to approve a Proposal are not received,
the persons named as proxies may propose one or more adjournments of the Special
Meeting to permit further solicitation of Proxies with respect to the Proposal.
In determining whether to adjourn the Special Meeting, the following factors may
be considered: the nature of the proposals that are the subject of the Special
Meeting, the percentage of votes actually cast, the percentage of negative votes
actually cast, the nature of any further solicitation and the information to be
provided to shareholders with respect to the reasons for the solicitation. Any
adjournment will require the affirmative vote of a majority of those shares
represented at the Special Meeting in person or by Proxy. The persons named as
proxies will vote those Proxies that they are entitled to vote "FOR" any
Proposal in favor of an adjournment and will vote those Proxies required to be
voted "AGAINST" any such Proposal against any adjournment. A shareholder vote
may be taken on one or more of the Proposals in the Proxy Statement prior to any
adjournment if sufficient votes have been received and it is otherwise
appropriate. A quorum of shareholders is constituted by the presence in person
or by proxy of the holders of a majority of the outstanding shares of the Trust
or a Fund thereof (as applicable) entitled to vote at the Special Meeting. For
purposes of determining the presence of a quorum for transacting business at the
Special Meeting, abstentions and broker "non-votes" (that is, proxies from
brokers or nominees indicating that these persons have not received instructions
from the beneficial owner or other persons entitled to vote shares on a
particular matter with respect to which the brokers or nominees do not have
discretionary power) will be treated as shares that are present but which have
not been voted. (See "Vote Required" for a further discussion of abstentions and
broker non-votes.)
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Shareholders of record at the close of business on July 22, 1999 (the
"Record Date") are entitled to notice of, and to vote at, the Special Meeting.
As of the Record Date, the following number of shares of each Fund were issued
and outstanding:
Equity Appreciation Fund ................... 8,477,424.987 shares
Money Market Fund .......................... 609,097,575.050 shares
Equity 500 Fund ............................ 5,368,831.86 shares
PreservationPlus Fund....................... 33,478,701.89 shares
This Proxy Statement is being used in order to reduce the preparation,
printing, handling and postage expenses that would result from the use of a
separate statement for each Fund and, because shareholders may own shares of
more than one Fund, the combined statement may avoid burdening shareholders with
more than one proxy statement. To the extent information relating to common
ownership is available to the Funds, a shareholder that owns of record shares in
two or more of the Funds will receive a package containing a Proxy Statement and
Proxies for the Funds in which such shareholder is a record owner. If the
information relating to common ownership is not available to the Funds, a
shareholder that beneficially owns of record shares in two or more Funds may
receive two or more packages each containing a Proxy Statement and a Proxy for
each Fund in which the shareholder is a beneficial owner. It is essential that
shareholders complete, date, sign and return each enclosed Proxy, unless a
shareholder is voting by telephone or through the Internet.
In order that your shares may be represented, you are requested to, unless
you are voting by telephone or through the Internet :
o indicate your instructions on the Proxy (or Proxies);
o date and sign the Proxy (or Proxies); and
o mail the Proxy (or Proxies) promptly in the enclosed envelope.
Beneficial Ownership of Shares of the Funds
Annex I attached hereto sets forth information as of the Record Date
regarding the beneficial ownership of the Funds' shares by (i) the only persons
known by each Fund to beneficially own more than five percent of the outstanding
shares of the Fund, (ii) the Trustees and Trustee Nominees, (iii) the executive
officers of each Fund, and (iv) the Trustees and executive officers of each Fund
as a group. The number of shares beneficially owned by each Trustee, Trustee
Nominee or executive officer is determined under rules of the Securities and
Exchange Commission (the "Commission"), and the information is not necessarily
indicative of beneficial ownership for any other purpose. Under these rules,
beneficial ownership includes any shares as to which the individual has the sole
or shared voting power or investment power and also any shares which the
individual has the right to acquire within 60 days of the Record Date through
the exercise of any stock option or other right. Unless otherwise indicated,
each person has sole investment and voting power (or shares this power with his
or her spouse) with respect to the shares set forth in Annex I. The inclusion
herein of any shares deemed beneficially owned does not constitute an admission
of beneficial ownership of the shares.
Collectively, the Trustees and officers of the Trust own less than 1% of
each Fund's outstanding shares.
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<PAGE>
Background
Master-Feeder Structure. Shareholders of the Funds are being asked to
approve the New Advisory Agreements, as applicable, and to elect new Boards of
Trustees of the Trust and the Portfolios. As indicated earlier, each Fund
operates as a feeder fund in a master-feeder fund arrangement with the
Portfolios, which serve as master funds. As feeder funds, the Funds seek to
achieve their respective investment objectives by investing all of their
investable assets in a corresponding Portfolio with the same investment
objectives and policies. The Portfolios invest directly in investment securities
and other investments. Pursuant to the requirements of the Act applicable to
master-feeder arrangements, each Fund's voting rights with respect to the
Portfolio shares that it holds must be passed through to the Fund's own
shareholders. Other feeder funds of a particular Portfolio will also vote in
accordance with their respective charters and/or other applicable requirements
with respect to the approval of the applicable New Advisory Agreement(s), the
election of Trustees of the Portfolios and the ratification of the Portfolios'
independent accountants.
The Portfolios. As indicated earlier, the PreservationPlus Portfolio is a
separate series of BT Portfolios, while the Cash Portfolio and Equity 500
Portfolio are separately registered open-end management investment companies.
Bankers Trust, a banking corporation organized under the laws of the State of
New York, located at 130 Liberty Street (One Bankers Trust Plaza), New York, New
York 10006, serves as the investment adviser, custodian and administrator of
each Portfolio. Bankers Trust is a wholly owned subsidiary of Bankers Trust
Corporation ("BT Corporation"), located at 130 Liberty Street (One Bankers Trust
Plaza), New York, New York 10006, a registered bank holding company organized
under the laws of the State of New York. As discussed later in this Proxy
Statement, as a result of the Merger (as defined herein), BT Corporation became
a wholly owned subsidiary of Deutsche Bank, A.G. ("Deutsche Bank"), located at
31 West 52nd Street, New York, New York 10019. ICC Distributors, Inc., located
at Two Portland Square, Portland, Maine 04101, serves as the principal
underwriter of each Portfolio. ICC Distributors, Inc. is not affiliated with
Bankers Trust, Deutsche Bank or any of their affiliates.
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<PAGE>
PROPOSALS IA, IB AND IC
Approval Of New ADVISORY Agreements
THE NEW ADVISORY AGREEMENTS WILL CONTAIN SUBSTANTIALLY THE SAME TERMS AND
CONDITIONS, EXCEPT FOR THE PARTIES AND THE DATES OF EXECUTION, EFFECTIVENESS AND
INITIAL TERM, AS THE PRIOR INVESTMENT ADVISORY AGREEMENTS PURSUANT TO WHICH
SERVICES WERE PROVIDED TO THE PORTFOLIOS. IN ADDITION, THE FORM OF NEW
SUB-ADVISORY AGREEMENT AUTHORIZES THE APPLICABLE INVESTMENT ADVISER TO ADJUST
THE DUTIES, THE AMOUNT OF ASSETS TO BE MANAGED AND THE FEES PAID TO THE
INVESTMENT SUBADVISER WITH AND UPON THE APPROVAL OF THE BOARD AND THE
INDEPENDENT TRUSTEES OF EACH BOARD. AS MORE FULLY DISCUSSED BELOW, APPROVAL OF
THE NEW ADVISORY AGREEMENTS, WHICH PROVIDE FOR THE SAME SERVICES TO BE PROVIDED
AT THE SAME FEES, IS GENERALLY OCCASIONED BY THE MERGER (AS DEFINED HEREIN)
PURSUANT TO WHICH BANKERS TRUST BECAME AN INDIRECT SUBSIDIARY OF DEUTSCHE BANK.
THE NEW MGI ADVISORY AGREEMENTS DESCRIBED IN PROPOSAL IB AND THE NEW
SUB-ADVISORY AGREEMENTS WITH BANKERS TRUST DESCRIBED IN PROPOSAL IC (WHICH ARE
NOT PROPOSED FOR APPROVAL BY SHAREHOLDERS OF MONEY MARKET FUND OR EQUITY 500
FUND) WILL PERMIT DEUTSCHE BANK, UPON THE APPROVAL OF THE INDEPENDENT TRUSTEES
OF THE TRUST AND THE APPLICABLE PORTFOLIO, TO SIMPLIFY THE ORGANIZATIONAL
STRUCTURE OF ITS U.S. MUTUAL FUND OPERATIONS, ENHANCE THE EFFICIENCY OF THEIR
ADMINISTRATION AND PROMOTE CONSISTENCY OF INTERNAL CONTROLS, COMPLIANCE AND
REGULATORY OVERSIGHT. THE DEFERRAL IN IMPLEMENTING THE NEW MGI ADVISORY
AGREEMENTS IS NEEDED TO PERMIT DEUTSCHE BANK A SUFFICIENT AMOUNT OF TIME (WHICH
WILL VARY FOR DIFFERENT PORTFOLIOS) TO PLAN, PREPARE AND INSTITUTE THE NECESSARY
ARRANGEMENTS FOR MGI TO CONSOLIDATE DEUTSCHE BANK'S U.S. MUTUAL FUND OPERATIONS.
The Prior Advisory Agreements.
The Prior Advisory Agreements. Prior to June 4, 1999, Bankers Trust served
as investment adviser to each of the Portfolios (as discussed earlier) pursuant
to separate investment advisory agreements between Bankers Trust and the
applicable Portfolios (the "Prior Advisory Agreements"). The Prior Advisory
Agreements were initially approved by the Boards of the applicable Portfolio and
Trust, including a majority of the Independent Trustees of the Portfolio or the
Trust, respectively.
The following table lists: (i) the date of each Prior Advisory Agreement;
(ii) the most recent date on which each Prior Advisory Agreement was approved by
the applicable Portfolio's Trustees, including a majority of the Independent
Trustees, and shareholders; (iii) the most recent date on which each Prior
Advisory Agreement was approved by the applicable Fund's Trustees, including a
majority of the Independent Trustees, and shareholders; and (iv) the amount paid
by the Portfolios to Bankers Trust for services rendered pursuant to the Prior
Advisory Agreements (for each Portfolio's last fiscal year):
-8-
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
Date of
Prior
Portfolio Advisory Date Last Approved Date Last Approved
(Fiscal Year) Agreement By Portfolio's By Fund's Fee
- -------------------------------------------------------------------------------------
Trustees Shareholder* Trustees Shareholders*
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Equity
Appreciation
Fund (9/30/98) 8/6/96 N/A N/A 3/8/99 8/6/96 $1,059,224
- -------------------------------------------------------------------------------------
Cash Portfolio
(12/31/98) 4/23/90 3/8/99 4/23/90 3/8/99 4/23/90 $8,019,093
- -------------------------------------------------------------------------------------
Equity 500
Portfolio
(12/31/98) 4/8/92 3/8/99 4/8/92 3/8/99 4/8/92 $3,186,503
- -------------------------------------------------------------------------------------
PreservationPlus
Portfolio
(9/30/98) 4/28/93 3/8/99 4/28/93 3/8/99 4/28/93 $ 435,257
- -------------------------------------------------------------------------------------
</TABLE>
- --------------------------
* Shareholders voted to approve the Prior Advisory Agreements on their
respective dates of inception.
The Merger. On November 30, 1998, BT Corporation, Deutsche Bank and Circle
Acquisition Corporation entered into an Agreement and Plan of Merger (the
"Merger Agreement"). Pursuant to the terms of the Merger Agreement, Circle
Acquisition Corporation, a wholly owned New York subsidiary of Deutsche Bank,
merged with and into BT Corporation on June 4, 1999, with BT Corporation
continuing as the surviving entity (the "Merger"). Under the terms of the
Merger, each outstanding share of BT Corporation common stock was converted into
the right to receive $93 in cash, without interest. Since the Merger, BT
Corporation, along with its affiliates, has continued to offer the range of
financial products and services, including investment advisory services, that it
offered prior to the Merger.
As a result of the Merger, BT Corporation became a wholly owned subsidiary
of Deutsche Bank. Deutsche Bank is a banking company with limited liability
organized under the laws of the Federal Republic of Germany. Deutsche Bank is
the parent company of a group consisting of banks, capital markets companies,
fund management companies, mortgage banks, a property finance company,
installment financing and leasing companies, insurance companies, research and
consultancy companies and other domestic and foreign companies (the "Deutsche
Bank Group"). At March 31, 1999, the Deutsche Bank Group had total assets of US
$727 billion. The Deutsche Bank Group's capital and reserves at March 31, 1999
were US $19.6 billion.
Impact of the Merger on the Prior Advisory Agreements. Section 15(a) of
the Act provides, in pertinent part, that "[i]t shall be unlawful for any person
to serve or act as investment adviser of a registered investment company, except
pursuant to a written contract, which contract, whether with such registered
company or with an investment adviser of such registered company, has been
approved by the vote of a majority of the outstanding voting securities of such
registered company. . . ." Section 15(a)(4) of the Act further requires that
such written contract provide for automatic termination in the event of its
assignment. Section 2(a)(4) of the Act defines "assignment" to include any
direct or indirect transfer of a contract by the assignor.
While it may be argued otherwise, consummation of the Merger may have
resulted in an "assignment" of the Prior Advisory Agreements within the meaning
of the Act, terminating the agreements according to their respective terms and
the Act as of June 4, 1999. Specifically, as Bankers Trust is a wholly owned
subsidiary of BT Corporation, the merger of Circle Corporation with and into
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<PAGE>
BT Corporation could be deemed to have resulted in an "assignment" of the Prior
Advisory Agreements with Bankers Trust.
On May 25, 1999, Bankers Trust was granted an exemptive order (the
"Exemptive Order") by the Commission permitting implementation, without
obtaining prior shareholder approval, of the New BT Advisory Agreements during
an interim period commencing on the date of the closing of the Merger and
continuing, for a period of up to 150 days, through the date on which each of
the New BT Advisory Agreements are approved or disapproved by the respective
shareholders of each Portfolio (the "Interim Period"). Under the terms of the
Exemptive Order, Bankers Trust was allowed to receive advisory fees during the
Interim Period pursuant to the New BT Advisory Agreements, provided that these
fees would be held in escrow pending shareholder approval of the New BT Advisory
Agreements. In accordance with the Exemptive Order, the advisory fees charged to
the Portfolios and paid to Bankers Trust under the New BT Advisory Agreements
have been held in an interest-bearing escrow account and the Portfolios expect
to continue to deposit these fees in such account until approval of the New BT
Advisory Agreements by the respective shareholders of the Portfolios has been
obtained. If the New BT Advisory Agreements are not approved by the shareholders
by the expiration of the Interim Period, the fees held in escrow will be
remitted to the applicable Fund. As of June 30, 1999, the amount in escrow for
Equity Appreciation Fund totaled $75,039.44, for Money Market Fund totaled
$59,131.66, for Equity 500 Fund totaled $69,830.45 and for PreservationPlus Fund
totaled $48,067.89.
The Funds, as shareholders of the Portfolios, are not being asked to
approve or disapprove the Merger or the Merger Agreement; rather, they are being
asked under these Proposals to approve and continue the New BT Advisory
Agreements and to approve the New Advisory Agreements for the Portfolios. OTHER
THAN THE PARTIES AND THE DATES OF EXECUTION, EFFECTIVENESS, AND INITIAL TERM OF
THE AGREEMENTS, THE NEW ADVISORY AGREEMENTS CONTAIN SUBSTANTIALLY THE SAME TERMS
AND CONDITIONS AS THE PRIOR ADVISORY AGREEMENTS. In addition, the form of New
Sub-advisory Agreement authorizes the applicable investment adviser to adjust
the duties, the amount of assets to be managed and the fees paid to the
investment subadviser with and upon the approval of the Board and the
Independent Trustees. The advisory fee rates charged to the Portfolios under the
Prior Advisory Agreements have continued to apply under the New BT Advisory
Agreements and would continue to apply under the New MGI Advisory Agreements.
MGI, and not the Portfolios, would be solely responsible for paying the
sub-advisory fees, which may vary from time to time as approved by the
Independent Trustees. The sub-advisory fees would be paid by MGI directly to the
subadviser. In addition, the Advisers have advised the Portfolios that they can
expect to continue to receive the same level and quality of services under the
New Advisory Agreements as they received under the Prior Advisory Agreements.
The Advisers have represented to the Boards that in the event of any material
change in the investment management personnel of the Advisers responsible for
providing services to the Funds, the Advisers will apprise and consult with the
relevant Board or Boards to ensure that the applicable Board, including a
majority of the Board's Independent Trustees, is satisfied that the services
provided by the Advisers will not be diminished in scope and quality.
The New Advisory Agreements
The New Advisory Agreements. The form of the New Advisory and the
Sub-advisory Agreement is attached to this Proxy Statement as Exhibit A. If
shareholders approve the New Advisory Agreements, each of the agreements will
remain in effect for an initial term of two years from its effective date, and
may be renewed annually thereafter by specific approval of the respective Board
or shareholders of the applicable Portfolio, provided that they are also
approved by a majority of
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<PAGE>
the Independent Trustees. The terms and conditions of the New Advisory
Agreements other than the parties and their dates of execution, effectiveness
and initial term, are substantially the same as those of the Prior Advisory
Agreements. The New BT Advisory Agreements and the New MGI Advisory Agreements
will be between the Trust and either Bankers Trust or MGI, as applicable; the
New Sub-advisory Agreements will be among the Trust, MGI (as Adviser) and
Bankers Trust (as sub-adviser). Each of the New BT Advisory Agreements became
effective as of June 4, 1999, the date of the consummation of the Merger.
If the New MGI Advisory Agreements and/or the New Subadvisory Agreements are
approved, Bankers Trust will continue to perform its advisory duties under the
New BT Advisory Agreements until the New MGI Advisory Agreements and/or the New
Subadvisory Agreements are implemented. MGI, as Adviser, and Bankers Trust, as
subadviser, would perform its respective advisory duties and be paid its
respective advisory fees only upon implementation of the applicable New Advisory
Agreement.
Under the terms of the New Advisory Agreements, as under the Prior
Advisory Agreements, each of the Advisers agrees to furnish the Portfolios with
investment advisory and other services in connection with a continuous
investment program for the Portfolios, including investment research and
management with respect to all securities, investments, cash and cash
equivalents in the portfolios. Subject to the supervision and control of the
Portfolios' Boards, each of the Advisers agrees to (a) conform to all applicable
rules and regulations of the Commission, including all applicable provisions of
the Securities Act of 1933, as amended (the "1933 Act"), the Securities Exchange
Act of 1934 (the "Exchange Act"), the Act and the Investment Advisers Act of
1940, as amended (the "Advisers Act"), and will conduct its activities under the
New Advisory Agreements in accordance with applicable regulations of the Board
of Governors of the Federal Reserve System pertaining to the investment advisory
activities of bank holding companies and their subsidiaries, (b) provide the
services rendered by it in accordance with the applicable Portfolio's investment
objectives and policies as stated in Prospectuses and Statements of Additional
Information of the relevant Funds, as from time to time in effect, and the
Portfolios' then current registration statements on Form N-1A as filed with the
Commission and the then current offering Memorandum if the Portfolio is not
registered under the 1933 Act, (c) place orders pursuant to its investment
determinations for each Portfolio either directly with the issuer or with any
broker or dealer selected by it, (d) determine from time to time what securities
or other investments will be purchased, sold or retained by each Portfolio, and
(e) maintain books and records with respect to the securities transactions of
each Portfolio and render to the Board of Trustees of the Trust such periodic
and special reports as they may request.
THE ADVISORY FEES. THE INVESTMENT ADVISORY FEE RATE CHARGED TO THE
PORTFOLIOS UNDER THE NEW BT ADVISORY AGREEMENTS AND THE NEW MGI ADVISORY
AGREEMENTS IS THE SAME AS THE INVESTMENT ADVISORY FEE RATE CHARGED UNDER THE
PRIOR ADVISORY AGREEMENTS. AS NOTED ABOVE, THE INVESTMENT ADVISORY FEE PAYABLE
UNDER THE NEW SUB-ADVISORY AGREEMENTS WOULD BE PAID BY MGI, NOT THE PORTFOLIOS,
AND MAY VARY FROM TIME TO TIME, SUBJECT TO THE APPROVAL OF THE APPLICABLE
PORTFOLIO'S BOARD OF TRUSTEES, INCLUDING A MAJORITY OF ITS INDEPENDENT TRUSTEES.
As under the Prior Advisory Agreements, Bankers Trust or MGI, as
applicable, is paid a fee under the New Advisory Agreements for its services,
calculated daily and paid monthly, equal, on an annual basis, to the following:
------------------------------------------------------------------------
PORTFOLIO ADVISORY AGREEMENT FEE*
------------------------------------------------------------------------
Equity Appreciation Fund 0.65%
------------------------------------------------------------------------
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<PAGE>
------------------------------------------------------------------------
PORTFOLIO ADVISORY AGREEMENT FEE*
------------------------------------------------------------------------
Cash Portfolio 0.15%
------------------------------------------------------------------------
Equity 500 Portfolio 0.085%**
------------------------------------------------------------------------
PreservationPlus Portfolio 0.35%
------------------------------------------------------------------------
--------------------------
* Pursuant to the Expense Limitation Agreement between Bankers Trust and the
Trust, the total fund operating expenses for each Fund (except for the
PreservationPlus Fund) are capped for the current fiscal year. Bankers Trust
has voluntarily waived a portion of the fees payable to it with respect to
the PreservationPlus Fund. The fee rates shown do not reflect the cap.
** This represents the actual fee paid to Bankers Trust over the last fiscal
year. The fee was reduced to 0.075% on May 6, 1998.
Generally. If approved, the New Advisory Agreements, as applicable, will
each remain in effect for an initial term of two years (unless sooner
terminated), and shall remain in effect from year to year thereafter if approved
annually (1) by the Portfolios' Boards or by the holders of a majority of the
Portfolios' respective outstanding voting securities (i.e., in most cases, the
Funds) and (2) by a majority of the Independent Trustees who are not parties to
such contract or agreement. Like the Prior Advisory Agreements, the New Advisory
Agreements will terminate upon assignment by any party and are terminable,
without penalty, on 60 days' written notice by the Portfolios' Boards or by a
"majority" vote of the shareholders of the Portfolios (as defined in the Act) or
upon 60 days' written notice by the applicable Adviser.
The services of the Advisers are not deemed to be exclusive and nothing in
the New Advisory Agreements prevents them or their affiliates from providing
similar services to other investment companies and other clients (whether or not
their investment objectives and policies are similar to those of the Portfolios)
or from engaging in other activities. In addition, the Advisers are obligated to
pay expenses associated with providing the services contemplated by the New
Advisory Agreements. The Portfolios bear certain other expenses including the
fees of the Portfolios' Boards. The Portfolios also pay any extraordinary
expenses incurred.
Under the New Advisory Agreements, each of the Advisers will exercise its
best judgment in rendering its advisory services. The Advisers shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Portfolios in connection with the matters to which the New Advisory
Agreements relate, provided that nothing therein shall be deemed to protect or
purport to protect the Advisers against any liability to the Portfolios or to
its shareholders to which the Advisers could otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence on their part in the
performance of their duties or by reason of the Advisers' reckless disregard of
their obligations and duties under the New Advisory Agreements.
The Advisers
Bankers Trust. Bankers Trust is the principal banking subsidiary of BT
Corporation. Bankers Trust is a bank and, therefore, not required to register as
an investment adviser under the Advisers Act. Bankers Trust provides a broad
range of commercial banking and financial services, including originating loans
and other forms of credit, accepting deposits and arranging financings. Bankers
Trust also engages in trading currencies, securities, derivatives and
commodities. In addition to providing investment advisory services to the
Portfolios, Bankers Trust serves as investment adviser to 31 other investment
companies and as investment subadviser to 34 other investment companies. (See
Annex II for a list of those investment companies that Bankers Trust advises
that have investment objectives similar to those of the Portfolios, together
with information regarding the fees charged to those
-12-
<PAGE>
companies.) As of March 31, 1999, Bankers Trust had over $313 billion of assets
under management, including $1.8 billion of assets in the Portfolios.
The names, businesses addresses and principal occupations of the current
directors and chief executive officer of Bankers Trust are set forth below.
NAME AND ADDRESS PRINCIPAL OCCUPATION
Josef Ackermann Chairman of the Board, Chief Executive
Deutsche Bank A.G. Officer and President, Bankers Trust
Taunusanlage 12 Company; Member, Board of Managing
D-60262 Frankfurt am Main Directors, Deutsche Bank A.G.
Federal Republic of Germany
Hans Angermueller Shearman & Sterling, of counsel
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Mr. George B. Beitzel Director, Computer Task Group, Inc.;
29 King Street Director, Phillips Petroleum Company;
Chappaqua, NY 10514-3432 Director, TIG Holdings Inc.
Mr. William R. Howell Chairman Emeritus, J.C. Penney Company,
J.C. Penney Company, Inc. Inc.; Director, Exxon Corporation;
P.O. Box 10001 Director, Halliburton Company; Director,
Dallas, TX 75301-1109 National Organization on Disability;
Director, National Retail Federation;
Director and Chairman, Southern Methodist
University Board of Trustees; Director,
Warner-Lambert Company; Director, The
Williams Companies, Inc.
Hermann-Josef Lamberti Member, Board of Managing Directors;
Deutsche Bank A.G. Deutsche Bank A.G.
Taunusanlage 12
D-60262 Frankfurt am Main
Federal Republic of Germany
John A. Ross Regional Chief Executive Officer,
Deutsche Bank A.G. Deutsche Bank Americas Holding Corp.
31 West 52nd Street
New York, NY 10019
Ronaldo H. Schmitz Member, Board of Managing Directors,
Deutsche Bank A.G. Deutsche Bank A.G.
Taunusanlage 12
D-60262 Frankfurt am Main
Federal Republic of Germany
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<PAGE>
In addition to serving as investment adviser to the Portfolios, Bankers
Trust also serves as administrator, transfer agent and custodian of each
Portfolio and Fund. These services will continue to be provided by Bankers Trust
after approval of the New Advisory Agreements. (Annex III sets forth the fees
paid to Bankers Trust by the Portfolios and the Funds for these services for the
most recently completed fiscal year.)
MGI. MGI is a corporation organized under the laws of the State of
Delaware and is a registered investment adviser under the Advisers Act. It is
located at 885 Third Avenue, 32nd Floor, New York, NY 10022. MGI provides a full
range of investment advisory services to institutional clients. MGI serves as
investment adviser to ten other investment companies and as investment
subadviser to five other investment companies. MGI is a subsidiary of Morgan
Grenfell Asset Management Ltd. ("MGAM"), located at 20 Finsbury Circus, London,
England, a wholly owned subsidiary of Deutsche Morgan Grenfell Group PLC,
located at 23 Great Winchester Street, London, England, an investment holding
company, which is, in turn, a wholly owned subsidiary of Deutsche Bank. MGAM
currently manages approximately $16.5 billion for a wide range of pension,
corporate, insurance, local authority, government and private clients worldwide.
(See Annex II for a list of those investment companies that MGI advises that
have investment objectives similar to those of the Portfolios, together with
information regarding the fees charged to those companies.)
The names, business addresses and principal occupations of the current
directors and chief executive officer of MGI are set forth below. Except as
otherwise indicated, the business address of the individuals named below is 885
Third Avenue, 32nd Floor, New York, NY 10022 and their positions at MGI
constitute their principal occupation.
NAME AND ADDRESS PRINCIPAL OCCUPATION
Richard Marin President and Director, Morgan
280 Park Avenue Grenfell Inc.; Managing
New York, NY 10017 Director, Deutsche Bank, A.G.
David Westover Baldt Executive Vice President and
Director, Morgan Grenfell Inc.
Joan A. Binstock Chief Operating Officer,
Secretary, Treasurer, and
Director, Morgan Grenfell Inc.
Audrey Mary Theresa Jones Executive Vice President,
Portfolio Manager and
Director, Morgan Grenfell Inc.
Robert H. Smith Chairman and Director, Morgan
Grenfell Inc.; Chief Executive
Officer, Morgan Grenfell Asset
Management; Chairman and Chief
Executive Officer, Morgan
Grenfell Development Capital
Steven Schneider Managing Director, Deutsche
280 Park Avenue Bank A.G.
New York, NY 10017
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<PAGE>
Section 15(f) of the Act
Section 15(f) of the Act provides that when a change of control of an
investment adviser to an investment company occurs, the investment adviser or
any of its affiliated persons may receive an amount or benefit in connection
therewith as long as two conditions are satisfied.
First, no "unfair burden" may be imposed on the investment company as a
result of the transaction relating to the change of control, or any express or
implied terms, conditions or understandings applicable thereto. As defined in
the Act, the term "unfair burden" includes any arrangement during the two (2)
year period after the change in control whereby the investment adviser (or
predecessor or successor adviser), or any "interested person" (as defined in the
Act) of such adviser, receives or is entitled to receive any compensation,
directly or indirectly, from the investment company or its security holders
(other than fees for bona fide investment advisory or other services), or from
any person in connection with the purchase or sale or other property to, or on
behalf of the investment company (other than fees for bona fide brokerage and
principal underwriting services). The Advisers have advised the Boards that
there are no circumstances arising from the Merger that might result in an
"unfair burden" (within the meaning of section 15(f) of the Act) being imposed
on the Portfolios. After conducting its reviews of the Advisers and of Bankers
Trust's performance, and after reviewing materials specifically provided by
Bankers Trust as a result of the termination of the Prior Advisory Agreements
and its request that the Board approve the New Advisory Agreements, the Boards
were satisfied that they had received and appropriately considered the relevant
factors and, after consultation with counsel, the Boards determined to approve
the New Advisory Agreements.
The second condition is that, during the three (3) year period immediately
following the Merger, at least 75% of the members of the Portfolios' Boards must
not be "interested persons" of the Advisers within the meaning of the Act. All
current members of the Boards are not, and have continued not to be since the
Merger, "interested persons" of the Advisers.
Additional Information
On March 11, 1999, Bankers Trust announced that it had reached an
agreement with the United States Attorney's Office in the Southern District of
New York to resolve an investigation concerning inappropriate transfers of
unclaimed funds and related record-keeping problems that occurred between 1994
and early 1996. Bankers Trust pleaded guilty to misstating entries in the bank's
books and records and agreed to pay a $63.5 million fine to state and federal
authorities. On July 26, 1999, the federal criminal proceedings were concluded
with Bankers Trust's formal sentencing. The events leading up to the guilty
pleas did not arise out of the investment advisory or mutual fund management
activities of Bankers Trust or its affiliates.
As a result of the plea, absent an order from the Commission, Bankers
Trust would not be able to continue to provide investment advisory services to
the Portfolios or the Funds. The Commission has granted Bankers Trust a
temporary order under Section 9(c) of the Act to permit Bankers Trust and its
affiliates to continue to provide investment advisory services to registered
investment companies, and Bankers Trust, pursuant to Section 9(c) of the Act,
has filed an application for a permanent order. On May 7, 1999, the Commission
extended the temporary order under Section 9(c) of the Act until the Commission
takes final action on the application for a permanent order, or, if earlier,
November 8, 1999. However, there is no assurance that the Commission will grant
a permanent order. If the Commission refuses to grant a permanent order,
shareholders will receive supplemental proxy materials
-15-
<PAGE>
requesting approval to release any amounts held in escrow up to the time of the
refusal and such other action as deemed appropriate by the Boards.
Recommendation of the Boards
At a meeting of the Boards held on March 8, 1999 called for the purpose
of, among other things, voting on approval of the New BT Advisory Agreements,
the Boards, including the Independent Trustees, unanimously approved the New BT
Advisory Agreements. In reaching this conclusion, the Boards obtained from BT
Corporation, Deutsche Bank and Bankers Trust such information as they deemed
reasonably necessary to approve Bankers Trust as investment adviser to the
Portfolios. Additionally, the Boards considered a number of factors, including,
among other things, the continuity of the management of the Portfolios after the
Merger; the nature, scope and quality of services that Bankers Trust would
likely provide to the Portfolios; the quality of the personnel of Bankers Trust;
Bankers Trust's commitment to continue to provide these services in the future;
the maintenance of the identical advisory fee rates; and the fact that the New
BT Advisory Agreements contain substantially the same terms and conditions as
the Prior Advisory Agreements. Based on the factors discussed above and others,
the Boards determined that the New BT Advisory Agreements are fair and
reasonable and in the best interest of the Portfolios and their respective
shareholders.
At meetings of the Boards held on July 15 and July 27, 1999 called for the
purpose of, among other things, discussing and voting on approval of the New MGI
Advisory Agreements and the New Sub-advisory Agreements, the Boards obtained
from Deutsche Bank and MGI such information as they deemed reasonably necessary
to approve MGI as an investment adviser to the Portfolios. Representatives of
Deutsche Bank and MGI made detailed presentations at the July 15th and July 27th
meetings with respect to, among other factors, the organizational structure,
assets under management, asset management services, financial condition and
business plan of MGI. The Boards considered the same factors described above for
the New BT Advisory Agreements with regard to the New MGI Advisory Agreements
and the New Sub-advisory Agreements. The Boards also considered a number of
other factors, including the capacity of MGI to perform its duties under the New
Advisory Agreements; the high degree of continuity of investment management
personnel expected to be available to the Portfolios because most of the
personnel of Bankers Trust who provided services under the Prior Management
Agreements will be employed by MGI; the financial standings of Deutsche Bank and
MGI; the benefits to the Funds and Portfolios from technological advances being
instituted by Deutsche Bank on a world-wide basis; the experience and expertise
of MGI as an investment adviser, as reflected in its amount of assets under
management; and the new organizational structure proposed to be created as a
component of the Merger and the benefits that may accrue to the shareholders as
a result thereof. With respect to the last factor, the Boards considered that
the proposed organizational structure may simplify the organizational structure
of Deutsche Bank's U.S. mutual fund operations, enhance the efficiency of their
administration and promote consistency of internal controls, compliance and
regulatory oversight. Additionally, the eventual implementation of the New MGI
Advisory Agreements will provide the Funds and the Portfolios with an investment
adviser registered under the Advisers Act.
The Boards were apprised that the deferral in implementing the New MGI
Advisory Agreements is needed to permit Deutsche Bank a sufficient amount of
time (which will vary for different Portfolios) to plan, prepare and institute
the necessary arrangements for MGI to consolidate Deutsche Bank's U.S. mutual
fund operations. The Advisers also emphasized to the Boards that the New MGI
Advisory Agreements and the New Sub-advisory Agreements would be implemented
only upon the approval of the Independent Trustees based on information they
then deemed adequate and
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<PAGE>
necessary to consider these arrangements. At the July 27th meeting of the
Boards, a majority of the Boards, including a majority of the Independent
Trustees, approved the New MGI Advisory Agreements and the New Sub-advisory
Agreements.
Based on the factors discussed above and others, the Boards determined
that the New MGI Advisory Agreements and the New Sub-Advisory Agreements are
fair and reasonable and in the best interest of the Portfolios and their
respective shareholders.
In addition, at meetings held on March 24 and April 21, 1999 the Boards,
including the Independent Trustees, also were apprised of the guilty pleas
discussed above and the exemptive relief sought by Bankers Trust.
Therefore, after careful consideration, the Boards, including the
Independent Trustees of each, recommend that the respective shareholders of the
Funds vote "FOR" the approval of the New Advisory Agreements as set forth in
these Proposals.
If the New BT Advisory Agreements are approved by the shareholders, each
agreement will continue in effect as described above. If any New BT Advisory
Agreement is not approved by the shareholders, the advisory fees held in escrow
with respect to that New BT Advisory Agreement will be paid over to the
applicable Portfolio. In such event, the applicable Board(s) will consider what
other action is appropriate based upon the interests of the shareholders. If any
New MGI Advisory Agreements and/or New Sub-advisory Agreements are not approved
by the shareholders, the applicable New BT Advisory Agreement(s), if they have
been approved by the shareholders, will continue in effect in accordance with
their terms while the Boards consider whether and the extent to which other
action is appropriate based upon the interests of the shareholders. If
shareholders of a Fund do not approve the applicable New Advisory Agreements at
the same time that shareholders of other investment companies approve the
applicable New Advisory Agreements with respect to a common Portfolio in a
manner sufficient to implement the New Advisory Agreements for that Portfolio,
the applicable Fund will remain a participant in that Portfolio while the Boards
consider what other action, if any, is appropriate based upon the interests of
the shareholders of the applicable Fund.
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<PAGE>
PROPOSAL II
ELECTION OF BOARDS OF TRUSTEES OF THE TRUST AND THE PORTFOLIOS
Trustees constituting the entire Board of Trustees of the Trust and of
each Portfolio are to be elected at the Special Meeting to serve until their
successors have been duly elected and qualified or until their earlier
resignation or removal. The Trustee Nominees were recently selected by the
Independent Trustees of the Boards and nominated by the full Boards at a meeting
held on July 15, 1999. The names and ages of the Trustee Nominees, their
principal occupations during the past five years and certain of their other
affiliations are provided below. Of the Trustee Nominees, Martin J. Gruber and
Harry Van Benschoten are currently Trustees of the Trust and Charles P. Biggar,
S. Leland Dill and Philip Saunders, Jr. are currently Trustees of the
Portfolios. No Trustee or Trustee Nominee of the Trust or the Portfolios serves
or will serve as an officer of the Trust or any Portfolio. Each of the Trustee
Nominees has agreed to serve if elected at the Special Meeting. It is the
intention of the persons designated as proxies in the Proxy, unless otherwise
directed therein, to vote at the Special Meeting for the election of the Trustee
Nominees named below as the entire Board of Trustees of the Trust and of each
Portfolio. If any Trustee Nominee is unable or unavailable to serve, the persons
named in the Proxies will vote the Proxies for such other person as the Boards
may recommend.
The following table sets forth the names, ages, position with the
Trust/Portfolios, and principal occupation of each Trustee Nominee; each Trustee
Nominee is proposed to be elected as such for the Trust and for each Portfolio.
TRUSTEE NOMINEES
<TABLE>
<CAPTION>
Position with
Name and Age Trust/Portfolios Principal Occupations During Last Five Years
- ------------ ---------------- --------------------------------------------
<S> <C> <C>
Charles P. Biggar Trustee of Retired; formerly, Vice President of International
(1)+ Portfolios Business Machines ("IBM") and President of the
Age: 68 since National Services and Field Engineering Divisions
inception of of IBM.
each Portfolio
S. Leland Dill (1)+ Trustee of Retired; Director, Coutts (U.S.A.) International;
Age: 69 Portfolios Director, Phoenix-Zweig Trust(4) and
since Phoenix-Euclid Market Neutral Fund(4); former
inception of Partner of KPMG Peat Marwick; Director, Vintners
each Portfolio International Company Inc.; Director, Coutts Trust
Holdings Ltd.; Director, Coutts Group; General
Partner, Pemco(3).
Martin J. Gruber Trustee of Nomura Professor of Finance, Leonard N. Stern
(1)+ Trust since School of Business, New York University (since
Age: 61 1992 1964); Trustee, TIAA(4); Trustee, SG Cowen Mutual
Funds(4); Trustee, Japan Equity Fund(4); Trustee,
Taiwan Equity Fund(4).
Richard Hale* Managing Director, Deutsche Asset Management;
Age: 53 Director, Flag Investors Fund(4); Managing
Director, BT Alex. Brown Incorporated; Director
and President, Investment Company Capital Corp.
Richard J. Herring Jacob Safra Professor of International Banking,
(2)+ Age: 53 Professor of Finance and Vice Dean, The Wharton
School, University of Pennsylvania (since 1972).
-18-
<PAGE>
Bruce E. Langton Retired; Trustee, Allmerica Financial Mutual
(2)+ Funds (1994 to present); Member, Pension &
Age: 68 Thrift Plans and Investment Committee,
Unilever U.S. Corporation (1989 to present)
(3); Director, TWA Pilots Directed Account
Plan and 401K Plan (1988 to present)(4).
Philip Saunders, Trustee of Principal, Philip Saunders Associates (Economic
Jr. (1)+ Portfolios and Financial Analysis); Former Director,
Age: 63 since Financial Industry Consulting, Wolf and Company;
inception of President, John Hancock Home Mortgage Corporation;
each Portfolio Senior Vice President of Treasury and Financial
Services, John Hancock Mutual Life Insurance
Company, Inc.
Harry Van Trustee of Retired; Director, Canada Life Insurance
Benschoten (1)+ Trust since Corporation of New York.
Age: 71 1992
</TABLE>
- ------------------
* "Interested Person" within the meaning of Section 2(a)(19) of the Act.
+ Dr. Gruber and Mr. Van Benschoten are members of the Audit Committee of the
Board of the Trust and Messrs. Biggar, Dill and Saunders are members of the
Audit Committee of the Boards of the Portfolios.
(1) Holds one other Trusteeship in the Bankers Trust Fund Complex, as defined
below.
(2) Holds two other Trusteeships in the Bankers Trust Fund Complex, as defined
below.
(3) A publicly held company with securities registered pursuant to section 12
of the Exchange Act.
(4) An investment company registered under the Act.
Each Board has established an Audit Committee that meets with the
Trust's/Portfolios' independent accountants to review the financial statements
of the Trust/Portfolios, the adequacy of internal controls and the accounting
procedures and policies of the Trust/Portfolios, and reports on these matters to
the Board. The Independent Trustees of each Board, who constitute 100% of the
membership of each current Board, select and nominate the new trustee nominees
who are not "interested persons," as defined under the Act, of the Trust or
Portfolios, as applicable. The Boards do not have compensation committees.
During 1998, the Boards held six meetings and the Audit Committee held two
meetings.
If Richard Hale is elected, he will not be a member of the Audit
Committee.
The following table sets forth the compensation received by the Trustee
Nominees for their services to the Trust, Portfolios and Bankers Trust Fund
Complex (as defined below) during the most recent calendar year. In addition to
the fees listed below, the Trustees are also reimbursed for all reasonable
expenses incurred during the execution of their duties for the Trust, Portfolios
and Bankers Trust Fund Complex.
-19-
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
Pension or Total
Retirement Estimated Compensation
Aggregate Aggregate Benefits Annual From the
Compensation Compensation Accrued as Benefits Complex
from the from the Part of Trust upon Paid to
Name of Trustee Trust Portfolios Expenses Retirement Trustees
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Charles P. Biggar N/A $25,142.65 N/A N/A $36,250
- ---------------------------------------------------------------------------------------
S. Leland Dill N/A $3,882.00 N/A N/A $36,250
- ---------------------------------------------------------------------------------------
Martin J. Gruber $19,166.66 N/A N/A N/A $36,250
- ---------------------------------------------------------------------------------------
Richard Hale N/A N/A N/A N/A N/A
- ---------------------------------------------------------------------------------------
Richard J. Herring N/A N/A N/A N/A $35,000
- ---------------------------------------------------------------------------------------
Bruce E. Langton N/A $25,424.54 N/A N/A $35,000
- ---------------------------------------------------------------------------------------
Philip Saunders, Jr. N/A $ 3,910.00 N/A N/A $36,250
- ---------------------------------------------------------------------------------------
Harry Van Benschoten $19,166.66 N/A N/A N/A $36,250
- ---------------------------------------------------------------------------------------
</TABLE>
- ------------------
* The "Bankers Trust Fund Complex" consists of the Trust and the Portfolios, as
well as BT Institutional Funds, BT Investment Funds, BT Adviser Funds and BT
Insurance Funds Trust.
The following table sets forth the names, ages, position with the Trust
and length of service in such position, and principal occupations during the
past five years of the Officers of the Trust.
Name and Age Position with Trust and Principal Occupations
- ------------ ---------------------------------------------
John A. Keffer
Age: 56 President and Chief Executive Officer
since 1998; President, Forum Financial
Group L.L.C. and its affiliates;
President, ICC Distributors, Inc.*
Daniel O. Hirsch Secretary since 1998; Director,
Age: 45 Deutsche Asset Management since 1999;
Director, BT Alex. Brown Incorporated
and Investment Company Capital
Corporation, 1998-99; Associate
General Counsel, Office of General
Counsel, United States Securities and
Exchange Commission, 1993-1998.
Charles A. Rizzo Treasurer since 1999; Vice President
Age: 41 and Department Head, Deutsche Asset
Management since 1998; Senior Manager,
PricewaterhouseCoopers LLP 1993-98.
- ------------------
* Underwriter/distributor for the Trust. Mr. Keffer owns 100% of the
shares of ICC Distributors, Inc.
Recommendation of the Boards
At a meeting of the Boards held on July 27, 1999, the Boards, based on a
recommendation of the incumbent Independent Trustees of each, unanimously
approved the nomination of the Trustee Nominees. In reaching this conclusion,
the Boards obtained from the Trustee Nominees such information as they deemed
reasonably necessary to approve the Trustee Nominees and considered a number of
factors, including, among other things: alignment of the members of the Boards
of the Trust
-20-
<PAGE>
and the Portfolios; the nature, scope and quality of services that the Trustee
Nominees would likely provide to the Trust and the Portfolios; and the
desirability of maintaining adherence to Section 15(f) of the Act. Based on the
factors discussed above and others, the Boards determined that the election of
the Trustee Nominees is in the best interest of the Trust and the Portfolios and
their respective shareholders.
Therefore, after careful consideration, the Boards, including the
Independent Trustees of each, recommend that the respective shareholders of the
Trust and the Portfolios vote "FOR" the election of the Trustee Nominees as set
forth in this Proposal.
If the Trustee Nominees are elected by the applicable shareholders, each
Trustee Nominee will serve until his successor is duly elected and qualified or
until his earlier resignation or removal. If the Trustee Nominees are not
elected, the applicable Board(s) will consider what action is appropriate based
upon the interests of the Trust's or Portfolios' shareholders, as applicable.
-21-
<PAGE>
PROPOSAL III
RATIFICATION OF THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT
ACCOUNTANTS FOR BT INVESTMENT MONEY MARKET FUND, BT CASH MANAGEMENT
PORTFOLIO, BT INVESTMENT EQUITY 500 INDEX FUND, BT EQUITY 500 INDEX PORTFOLIO
AND BT EQUITY APPRECIATION FUND
The Boards of the Trust and the above Portfolios, including a majority of
the Independent Trustees of each, have approved the selection of
PricewaterhouseCoopers LLP to serve as independent accountants for the above
Funds and the above Portfolios for the current fiscal year.
PricewaterhouseCoopers LLP has served as independent accountants of each Fund
and each Portfolio since the date of the applicable Fund and Portfolio's
inception and has advised the Trust and the Portfolios that they have no direct
or indirect financial interest in any Fund or Portfolio. Representatives of
PricewaterhouseCoopers LLP are not expected to be present at the Special Meeting
and, thus, are not expected to make a statement; however, one or more
representatives will be available by telephone to respond to appropriate
questions posed by shareholders or management.
Therefore, after careful consideration, the Boards, including the
Independent Trustees of each, recommend that the respective shareholders of the
Trust and the Portfolios vote "FOR" the ratification of the independent
accountants as set forth in this Proposal.
-22-
<PAGE>
PROPOSAL IV
RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP AS INDEPENDENT
ACCOUNTANTS FOR PRESERVATIONPLUS FUND AND PRESERVATIONPLUS PORTFOLIO
The Boards of the Trust and PreservationPlus Portfolio, including a
majority of the Independent Trustees of each, have approved the selection of
Ernst & Young LLP to serve as independent accountants for PreservationPlus Fund
and PreservationPlus Portfolio for the current fiscal year. Ernst & Young LLP
has served as independent accountants of PreservationPlus Fund and
PreservationPlus Portfolio since their respective dates of inception and has
advised the Trust and the PreservationPlus Portfolio that they have no direct or
indirect financial interest in PreservationPlus Fund or PreservationPlus
Portfolio. Representatives of Ernst & Young LLP are not expected to be present
at the Special Meeting and, thus, are not expected to make a statement; however,
one or more representatives will be available by telephone to respond to
appropriate questions posed by shareholders or management.
Therefore, after careful consideration, the Boards, including the
Independent Trustees of each, recommend that the respective shareholders of the
Trust and the Portfolios vote "FOR" the ratification of the independent
accountants as set forth in this Proposal.
VOTE REQUIRED
In view of the master-feeder structure discussed earlier, approval of each
of Proposals IA, IB and IC with respect to a particular Portfolio's New Advisory
Agreements requires the affirmative vote of a "majority" of the outstanding
shares of the Portfolio's various feeder funds as shareholders of the Portfolio.
"Majority" (as defined in the Act) means (as of the Record Date) the lesser of
(a) 67% or more of the shares of the applicable Portfolio present at the special
meeting, if the holders of more than 50% of the outstanding shares of the
Portfolio are present in person or by proxy, or (b) more than 50% of the
outstanding shares of the Portfolio (with respect to the applicable feeder
funds) determined by reference to the shares outstanding of the various feeder
funds). Because abstentions and broker non-votes are treated as shares present
but not voting, any abstentions and broker non-votes will have the effect of
votes against Proposals IA, IB and IC, which require the approval of a specified
percentage of the outstanding shares of a Portfolio.
Approval of Proposal II with respect to the Trustee Nominees of the Trust
requires the affirmative vote of a plurality of the votes cast in person or by
proxy at the Special Meeting for all Funds voting collectively. Approval of
Proposal II with respect to the Trustee Nominees of the Portfolios requires the
affirmative vote of a plurality of the votes cast in person or by proxy at the
special meetings of shareholders of all the Portfolios' various feeder funds
voting collectively. Because abstentions and broker non-votes are not treated as
shares voted, abstentions and broker non-votes will have no impact on Proposal
II.
Approval of Proposals III and IV with respect to the selection of the
independent accountants of the applicable Funds requires the affirmative vote of
a majority of the votes cast in person or by proxy at the Special Meeting for
each Fund. Approval of Proposals III and IV with respect to the selection of the
independent accountants of the applicable Portfolios requires the affirmative
vote of a majority of the votes cast in person or by proxy at the special
meetings of shareholders of each Portfolio's various
-23-
<PAGE>
feeder funds. Because abstentions and broker non-votes are not treated as shares
voted, abstentions and broker non-votes will have no impact on Proposals III and
IV.
- --------------------------------------------------------------------------------
THE BOARDS, INCLUDING THE INDEPENDENT TRUSTEES OF EACH, RECOMMEND THAT THE
SHAREHOLDERS VOTE "FOR" APPROVAL OF PROPOSALS IA, IB,
IC, II, III AND IV. ANY UNMARKED PROXIES WILL BE SO VOTED.
- --------------------------------------------------------------------------------
The Board is not aware of any other matters that will come before the
Special Meeting. Should any other matter properly come before the Special
Meeting, it is the intention of the persons named in the accompanying Proxy to
vote the Proxy in accordance with their judgment on such matters.
SUBMISSION OF SHAREHOLDER PROPOSALS
The Funds do not hold regular shareholders' meetings. Shareholders wishing
to submit proposals for inclusion in a proxy statement for a subsequent
shareholders' meeting should send their written proposals to the Secretary of
the Trust at the address set forth on the cover of this Proxy Statement.
Proposals must be received at a reasonable time prior to the date of a
meeting of shareholders to be considered for inclusion in the materials for a
Fund's meeting. Timely submission of a proposal does not, however, necessarily
mean that such proposal will be included.
SHAREHOLDERS' REQUEST FOR SPECIAL MEETING
Shareholders holding at least 10% of each Fund's outstanding voting
securities (as defined in the Act) may require the calling of a meeting of
shareholders for the purpose of voting on the removal of any Trustee of the
Fund. Meetings of shareholders for any other purpose also shall be called by the
applicable Board of Trustees when requested in writing by shareholders holding
at least 10% of the shares then outstanding.
IF YOU HAVE ANY QUESTIONS CONCERNING THE PROXY STATEMENT OR THE PROCEDURES
TO BE FOLLOWED TO EXECUTE AND DELIVER A PROXY, PLEASE CONTACT SHAREHOLDER
COMMUNICATIONS CORPORATION AT 1-800-732-6168.
- --------------------------------------------------------------------------------
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE special MEETING AND WHO
WISH TO HAVE THEIR SHARES VOTED ARE REQUESTED TO DATE AND SIGN THE ENCLOSED
PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE, UNLESS THEY ARE
VOTING BY TELEPHONE OR THROUGH THE INTERNET.
- --------------------------------------------------------------------------------
By Order of the Board of Trustees,
Daniel O. Hirsch, Secretary
August 23, 1999
- --------------------------------------------------------------------------------
THE BOARD OF TRUSTEES OF THE TRUST HOPES THAT SHAREHOLDERS WILL ATTEND
THE SPECIAL MEETING. WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED
TO COMPLETE, DATE, SIGN AND RETURN EACH ENCLOSED PROXY IN THE
ACCOMPANYING ENVELOPE (UNLESS YOU ARE VOTING BY TELEPHONE
OR THROUGH THE INTERNET).
- --------------------------------------------------------------------------------
-24-
<PAGE>
Annex I
MONEY MARKET FUND:
(i) 5% Shareholders
Shares
Beneficially Percent Ownership
Name and Address of Beneficial Owner Owned of Outstanding Shares
- ------------------------------------ ----- ---------------------
Bankers Trust Co. 113,912,369.4200 19.232
Custody Texas Instruments Employees
Universal Profit Sharing Plan
Attn: Michael Bucowski
34 Exchange Place
Jersey City, NJ 07302-3885
Capital Factors 51,012,156.6300 8.612
Financing Trust Series 1994-1
120 East Palmetto Park Road
Boca Raton, FL 33432-4835
<PAGE>
EQUITY 500 FUND:
Shares
Beneficially Percent Ownership
Name and Address of Beneficial Owner Owned of Outstanding Shares
- ------------------------------------ ----- ---------------------
Bankers Trust Company 944,347.4260 17.589
Custody 401(k) Westinghouse Personal
Investment
Bankers Trust Co. Mail Stop 3064
Attn: John Sawicki
34 Exchange Place, 6th Floor
Jersey City, NJ 07302-3885
State Street Bank and Trust Custody 597,853.6060 11.136
of Northrop Grumman ESSD Savings
Attn: Annette Johnson
34 Exchange Place, # 6-3064
Jersey City, NJ 07302-3885
Bankers Trust Company 481,983.3900 8.977
Custody 401(k) Matsushita Elec.
Corp. of America
Attn: Elijah Outen
100 Plaza One, Mailstop 3064
Jersey City, NJ 07311-3999
Bankers Trust Co. Custody 401(k) 319,737.5500 5.955
Framatome Technologies
Attn: Tom Arnold
Recordkeeping
684 Grassmere Park Road
Nashville, TN 37211-3658
Bechtel Bettis Inc. Savings Plan 275,197.1960 5.126
c/o Bankers Trust Company
100 Plaza One
Jersey City, NJ 07311-3901
PRESERVATIONPLUS FUND:
Shares
Beneficially Percent Ownership
Name and Address of Beneficial Owner Owned of Outstanding Shares
- ------------------------------------ ----- ---------------------
Institutional Service Class 4,020,896.304 35.167%
Collins & Aikman Retirement Income Plan
c/o Bankers Trust
100 Plaza One MS 3055
Attn: Frances Chaba
Jersey City NJ 07311-3902
-2-
<PAGE>
Bankers Trust Co. Trustee 3,433,270.39 30.027%
U/A Dtd 7/1/91
FBO The Sweetheart Cup Co.
100 Plaza One
401K PS & Retirement Plan
Jersey City NJ 07311-3901
Bankers Trust Co. Trustee 2,046,740.784 17.901%
U/A Dtd 10/1/98
Grove US LLC Retirement Savings 40
130 Liberty Street Fl. 20
Attn: Anna Tikonoff
New York, NY 10006-1105
Northwestern Trust Company 1,806,704.765 15.801%
SVG 401K Savings Plan
1201 3rd Avenue Suite 2010
Seattle WA 98101-3206
Institutional Class
Chase Manhattan Bank Trustee 9,482,704.52 51.278%
U/A 1/1/85 FBO Avon Employees
Savings & Stock Ownership Plan
130 Liberty Street Fl. 23
Attn: Anna Tikonoff
New York NY 10006-1105
Bankers Trust Co. of CA Trustee 3,531,523.586 19.097%
U/A 8/1/92
Futura 401(K) Savings Plan
PO Box 9014 Church St. Station
Fixed Account
New York NY 10008
Boston Safe Deposit & Trust Co. 2,850,105.798 15.412%
Trustee
Thermo Electron Corp.
Plus Plan U/A Dtd 1/1/94
130 Liberty Street Fl. 23
New York NY 10006-1105
Investment Class
Robert E. Rich, Robert E. Rich, Jr., 1,617,202.175 80.059%
David A. Rich, Trustees
U/A Dtd 1/1/85
Rich Prods. Retirement & Savings Plan
1150 Niagara Street
c/o James R. Haddad
Buffalo, NY 14213-1714
-3-
<PAGE>
Province HealthCare Company 165,664.291 8.201%
401K Plan U/A Dtd 11/1/97
c/o Amsouth Bank
PO Box 830859
Attn: Tracey Crain
Birmingham AL 35283
Service Class
National Plus 401K Plan 673,702.706 43.973%
FBO Textile Workers Pension Fund
U/A Dtd 3/30/89
6 Blackstone Valley Pl. Ste. 302
c/o Monica Bender
Lincoln RI 02865-1112
Northwestern Trust Company 466,454.655 30.446%
U/A Dtd 9/1/96
FBO Community Health Systems
1201 3rd Avenue Ste. 2010
Retirement & Profit Sharing Plan
Seattle WA 98101-3026
Security Trust Company Trustee 233,261.04 15.225%
U/A Dtd 5/1/99
FBO Burnstead Construction
2390 E. Camelback Rd. Ste. 240
401(K) PSP
Phoenix AZ 85016-3434
Patrick Shao & Deb Schmitz Trustees 85,737.601 5.596%
Wheel Works 401(K) Plan
802 S. 1st Street
San Jose CA 95110-3194
*
EQUITY APPRECIATION FUND:
Shares
Beneficially Percent Ownership
Name and Address of Beneficial Owner Owned of Outstanding Shares
- ------------------------------------ ----- ---------------------
Northern Telecom Omnibus Account 5,101,490.6550 60.177
c/o Bankers Trust Company
Attn: John Sawicki
Mail-stop 3064
34 Exchange Place, 6th Floor
Jersey City, NJ 07302-3885
-4-
<PAGE>
Bankers Trust Co. as Trustee for 1,633,735.1290 19.272
Westinghouse Savannah River Inc.
Savings and Investment Plan
34 Exchange Pl. - Mail Stop 3064
Jersey City, NJ 07302-3885
Bankers Trust Co. as Trustee for 514,213.3720 6.066
Hanson Industries Plan 401(k)
Attn: Marisa Depp, Mail Stop 3055
34 Exchange Pl., 5th Floor
Jersey City, NJ 07302-3885
Bankers Trust Co. as Trustee for 502,724.1040 5.930
Millenium Chemicals 401(k)
Attn: Linda Castello
200 International Circle, Ste 2000
Hunt Valley, MD 21030-1336
(ii) Trustees and Trustee Nominees *
Charles P. Biggar *
S. Leland Dill *
Martin J. Gruber *
Richard Hale *
Richard J. Herring *
Bruce E. Langton *
Philip Saunders, Jr. *
Harry Van Benschoten *
(iii) Executive Officers *
John A. Keffer *
Daniel O. Hirsch *
Charles Rizzo *
(iv) Trustees and Executive Officers
as a Group *
- -------------
* The Trustees, the Trustee Nominees, the executive officers of the Trust and
the Trustees and executive officers as a group own less than 1% of the Fund's
outstanding shares.
-5-
<PAGE>
Annex II
I. Bankers Trust
[TO COME]
<PAGE>
II. Morgan Grenfell Inc.
[TO COME]
-2-
<PAGE>
Annex III
- --------------------------------------------------------------------------------
FUND FEE PORTFOLIO FEE
- --------------------------------------------------------------------------------
Equity Appreciation Fund $814,788 N/A N/A
- --------------------------------------------------------------------------------
Cash Management
Money Market Fund $1,295,091 Portfolio $2,673,031
- --------------------------------------------------------------------------------
Equity Index
Equity 500 Fund $2,262,552 Portfolio $676,625
- --------------------------------------------------------------------------------
PreservationPlus
PreservationPlus Fund $255,319 Portfolio $64,560
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT A
[FORM OF INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENT]
AGREEMENT made as of [_________________] by and between [Trust Name], a
(state of organization) (herein called the "Trust") and [________________]
(herein called the "Investment Adviser") [and [______________] (herein called
the "Investment Subadviser")].
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940;
WHEREAS, the Trust desires to retain the Investment Adviser to render
investment advisory and other services to the Trust with respect to certain of
its series of shares of beneficial interests as may currently exist or be
created in the future (each, a "Fund") as listed on Exhibit A hereto, and the
Investment Adviser is willing to so render such services on the terms
hereinafter set forth;
[WHEREAS, the Investment Adviser desires to retain the Investment
Subadviser to perform certain of the Investment Adviser's duties under this
Agreement, and the Investment Subadviser is willing to so render such services
on the terms hereinafter set forth;]
NOW, THEREFORE, this Agreement
W I T N E S S E T H:
In consideration of the promises and mutual covenants herein contained, it
is agreed between the parties hereto as follows:
1. Appointment. The [Trust] [Investment Adviser] hereby appoints the
[Investment Adviser] [Investment Subadviser] to act as [investment adviser]
[investment subadviser] to each Fund for the period and on the terms set forth
in this Agreement. The [Investment Adviser] [Investment Subadviser] accepts such
appointment and agrees to render the services herein set forth for the
compensation herein provided.
2. Management. Subject to the supervision of the [Board of Trustees of the
Trust] [Investment Adviser], the [Investment Adviser] [Investment Subadviser]
will provide a continuous investment program for the Fund, including investment
research and management with respect to all securities, investments, cash and
cash equivalents in the Fund. The [Investment Adviser] [Investment Subadviser]
will determine from time to time what securities and other investments will be
purchased, retained or sold by each Fund. The [Investment Adviser] [Investment
Subadviser] will provide the services rendered by it hereunder in accordance
with the investment objective(s) and policies of each Fund as stated in the
Fund's then-current prospectus and statement of additional information (or the
Fund's then current registration statement on Form N-1A as filed with the
Securities and Exchange Commission (the "SEC") and the then-current offering
memorandum if the Fund is not registered under the Securities Act of 1933, as
amended ("1933 Act"). The [Investment Adviser] [Investment Subadviser] further
agrees that:
(a) it will conform with all applicable rules and regulations of the
SEC (herein called the "Rules") and with all applicable provisions of the 1933
Act; as amended, the Securities Exchange Act of 1934, as amended (the "1934
Act"), the Investment Company Act of 1940, as amended (the "1940 Act"); and the
Investment Advisers Act of 1940, as amended (the "Advisers Act"), and will, in
addition, conduct its activities under this Agreement in accordance with
applicable regulations of the Board of Governors of the Federal Reserve System
pertaining to the investment advisory activities of bank holding companies and
their subsidiaries;
<PAGE>
(b) it will place orders pursuant to its investment determinations for
each Fund either directly with the issuer or with any broker or dealer selected
by it. In placing orders with brokers and dealers, the [Investment Adviser]
[Investment Subadviser] will use its reasonable best efforts to obtain the best
net price and the most favorable execution of its orders, after taking into
account all factors it deems relevant, including the breadth of the market in
the security, the price of the security, the financial condition and execution
capability of the broker or dealer, and the reasonableness of the commission, if
any, both for the specific transaction and on a continuing basis. Consistent
with this obligation, the [Investment Adviser] [Investment Subadviser] may, to
the extent permitted by law, purchase and sell portfolio securities to and from
brokers and dealers who provide brokerage and research services (within the
meaning of Section 28(e) of the 1934 Act) to or for the benefit of any fund
and/or other accounts over which the [Investment Adviser] [Investment
Subadviser] or any of its affiliates exercises investment discretion. Subject to
the review of the [Trust's Board of Trustees] [Investment Adviser] from time to
time with respect to the extent and continuation of the policy, the [Investment
Adviser] [Investment Subadviser] is authorized to pay to a broker or dealer who
provides such brokerage and research services a commission for effecting a
securities transaction which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if the
[Investment Adviser] [Investment Subadviser] determines in good faith that such
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of either that
particular transaction or the overall responsibilities of the [Investment
Adviser] [Investment Subadviser] with respect to the accounts as to which it
exercises investment discretion; and
(c) it will maintain books and records with respect to the securities
transactions of each Fund and will render to the [Trust's Board of Trustees]
[Investment Adviser] such periodic and special reports as the Board may request.
3. [Subject to the provisions of this Agreement, the duties of the
Investment Subadviser, the portion of portfolio assets that the Subadviser shall
manage, and the fees to be paid the Investment Subadviser by the Investment
Adviser under and pursuant to this Agreement may be adjusted from time to time
by the Investment Adviser with and upon the approval of the Board and the
members of the Trust's Board of Trustees who are not "interested persons," as
defined in the Act ].1
4. Services Not Exclusive. The investment advisory services rendered by
the [Investment Adviser] [Investment Subadviser] hereunder are not to be deemed
exclusive, and the [Investment Adviser] [Investment Subadviser] shall be free to
render similar services to others so long as its services under this Agreement
are not impaired thereby.
5. Books and Records. In compliance with the requirements of Rule 31a-3 of
the Rules under the 1940 Act, the [Investment Adviser] [Investment Subadviser]
hereby agrees that all records which it maintains for the Trust are the property
of the Trust and further agrees to surrender promptly to the [Trust] [Investment
Adviser] any of such records upon request of the [Trust] [Investment Adviser].
The [Investment Adviser] [Investment Subadviser] further agrees to preserve for
the periods prescribed by Rule 31a-2 under the 1940 Act the records required to
be maintained by Rule 31a-1 under the 1940 Act and to comply in full with the
requirements of Rule 204-2 under the Advisers Act pertaining to the maintenance
of books and records.
6. Expenses. During the term of this Agreement, the [Investment Adviser]
[Investment Subadviser] will pay all expenses incurred by it in connection with
its activities under this Agreement other than the cost of purchasing securities
(including brokerage commissions, if any) for the Fund.
7. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, the [Trust] [Investment Adviser] will pay the
[Investment Adviser] [Investment Subadviser], and the [Investment Adviser]
[Investment Subadviser] will accept as full compensation therefor, fees,
computed daily and payable monthly, on an annual basis equal to the percentage
set forth on Exhibit A hereto of that Fund's average daily net
- ---------
1 Provision contained in the form of Investment Subadvisory Agreement only.
2
<PAGE>
assets.
8. Limitation of Liability of the [Investment Adviser] [Investment
Subadviser]: Indemnification.
(a) The [Investment Adviser] [Investment Subadviser] shall not be
liable for any error of judgment or mistake of law or for any loss suffered by a
Fund in connection with the matters to which this Agreement relates, except a
loss resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or gross negligence on the part of the [Investment Adviser] [Investment
Subadviser] in the performance of its duties or from reckless disregard by it of
its obligations and duties under this Agreement;
(b) Subject to the exceptions and limitations contained in Section 7(c)
below:
(i) the [Investment Adviser] [Investment Subadviser]
(hereinafter referred to as a "Covered Person") shall be indemnified by the
respective Fund to the fullest extent permitted by law, against liability and
against all expenses reasonably incurred or paid by him in connection with any
claim, action, suit or proceeding in which he becomes involved, as a party or
otherwise, by virtue of his being or having been the [Investment Adviser]
[Investment Subadviser] of the Fund, and against amounts paid or incurred by him
in the settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding"
shall apply to all claims, actions, suits or proceedings (civil, criminal or
other, including appeals), actual or threatened while in office or thereafter,
and the words "liability" and "expenses" shall include, without limitation,
attorneys' fees, costs, judgments, amounts paid in settlement, fines, penalties
and other liabilities.
(c) No indemnification shall be provided hereunder to a Covered Person:
(i) who shall have been adjudicated by a court or body before
which the proceeding was brought (A) to be liable to the [Trust] [Investment
Adviser] or to one or more Funds' investors by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office, or (B) not to have acted in good faith in the reasonable
belief that his action was in the best interest of a Fund; or
(ii) in the event of a settlement, unless there has been a
determination that such Covered Person did not engage in willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office;
(A) by the court or other body approving the settlement;
or
(B) by at least a majority of those Trustees who are
neither Interested Persons of the Trust nor are parties to the matter based upon
a review of readily available facts (as opposed to a full trial-type inquiry);
or
(C) by written opinion of independent legal counsel based
upon a review of readily available facts (as opposed to a full trial-type
inquiry); provided, however, that any investor in a Fund may, by appropriate
legal proceedings, challenge any such determination by the Trustees or by
independent counsel.
(d) The rights of indemnification herein provided may be insured
against by policies maintained by the [Trust] [Investment Adviser], shall be
severable, shall not be exclusive of or affect any other rights to which any
Covered Person may now or hereafter be entitled, shall continue as to a person
who has ceased to be a Covered Person and shall inure to the benefit of the
successors and assigns of such person. Nothing contained herein shall affect any
rights to indemnification to which Trust personnel and any other persons, other
than a Covered Person, may be entitled by contract or otherwise under law.
3
<PAGE>
(e) Expenses in connection with the preparation and presentation of a
defense to any claim, suit or proceeding of the character described in
subsection (b) of this Section 7 may be paid by the [Trust] [Investment Adviser]
on behalf of the respective Fund from time to time prior to final disposition
thereto upon receipt of an undertaking by or on behalf of such Covered Person
that such amount will be paid over by him to the [Trust] [Investment Adviser] on
behalf of the respective Fund if it is ultimately determined that he is not
entitled to indemnification under this Section 7; provided, however, that either
(i) such Covered Person shall have provided appropriate security for such
undertaking or (ii) the [Trust] [Investment Adviser] shall be insured against
losses arising out of any such advance payments, or (iii) either a majority of
the Trustees who are neither Interested Persons of the Trust nor parties to the
matter, or independent legal counsel in a written opinion, shall have
determined, based upon a review of readily available facts as opposed to a
trial-type inquiry or full investigation, that there is reason to believe that
such Covered Person will be entitled to indemnification under this Section 7.
9. Duration and Termination. This Agreement shall be effective as to a
Fund as of the date the Fund commences investment operations after this
Agreement shall have been approved by the Board of Trustees of the Trust with
respect to that Fund and the Investor(s) in the Fund in the manner contemplated
by Section 15 of the 1940 Act and, unless sooner terminated as provided herein,
shall continue until the second anniversary of such date. Thereafter, if not
terminated, this Agreement shall continue in effect as to such Fund for
successive periods of 12 months each, provided such continuance is specifically
approved at least annually (a) by the vote of a majority of those members of the
Board of Trustees of the Trust who are not parties to this Agreement or
Interested Persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval, or (b) by Vote of a Majority of the
Outstanding Voting Securities of the Trust; provided, however, that this
Agreement may be terminated by the Trust at any time, without the payment of any
penalty, by the Board of Trustees of the Trust, by Vote of a Majority of the
Outstanding Voting Securities of the Trust on 60 days' written notice to the
[Investment Adviser] [Investment Subadviser], or by the [Investment Adviser]
[Investment Subadviser] as to the [Trust] [Investment Adviser] at any time,
without payment of any penalty, on 90 days' written notice to the [Trust]
[Investment Adviser]. This Agreement will immediately terminate in the event of
its assignment (as used in this Agreement, the terms "Vote of a Majority of the
Outstanding Voting Securities," "Interested Person" and "Assignment" shall have
the same meanings as such terms have in the 1940 Act and the rules and
regulatory constructions thereunder.)
10. Amendment of this Agreement. No material term of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no amendment of a material term of this
Agreement shall be effective with respect to a Fund, until approved by Vote of a
Majority of the Outstanding Voting Securities of that Fund.
11. Representations and Warranties. The [Investment Adviser]
[Investment Subadviser] hereby represents and warrants as follows:
(a) [The [Investment Adviser] [Investment Subadviser] is exempt from
registration under the 1940 Act:]
(b) The [Investment Adviser] [Investment Subadviser] has all requisite
authority to enter into, execute, deliver and perform its obligations under this
Agreement;
(c) This Agreement is legal, valid and binding, and enforceable in
accordance with its terms; and
(d) The performance by the [Investment Adviser] [Investment Subadviser] of
its obligations under this Agreement does not conflict with any law to which it
is subject.
12. Covenants. The [Investment Adviser] [Investment Subadviser] hereby
covenants and agrees that, so long as this Agreement shall remain in effect:
4
<PAGE>
(a) The [Investment Adviser] [Investment Subadviser] shall remain
either exempt from, or registered under, the registration provisions of the
Advisers Act; and
(b) The performance by the [Investment Adviser] [Investment Subadviser]
of its obligations under this Agreement shall not conflict with any law to which
it is then subject.
13. Notices. Any notice required to be given pursuant to this Agreement
shall be deemed duly given if delivered or mailed by registered mail, postage
prepaid, (a) to the Investment Adviser, Mutual Funds Services, 130 Liberty
Street (One Bankers Trust Plaza), New York, New York 10006 , [(b) to the
Subadviser, [Address] or ](c) to the Trust, c/o BT Alex. Brown, Incorporated,
One South Street, Baltimore, Maryland 21202.
14. Waiver. With full knowledge of the circumstances and the effect of its
action, the [Investment Adviser] [Investment Subadviser] hereby waives any and
all rights which it may acquire in the future against the property of any
investor in a Fund, other than shares in that Fund, which arise out of any
action or inaction of the [Trust] [Investment Adviser] under this Agreement.
15. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and shall be governed by the laws
of the ______________________________, without reference to principles of
conflicts of law. The Trust is organized under the laws of
_________________________________ pursuant to a ______________ dated
______________. No Trustee, officer or employee of the Trust shall be personally
bound by or liable hereunder, nor shall resort be had to their private property
for the satisfaction of any obligation or claim hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
[SIGNATORIES]
5
<PAGE>
EXHIBIT A
TO
INVESTMENT ADVISORY AGREEMENT
MADE AS OF ____________________
BETWEEN
[Trust Name] AND [______________]
Fund Investment Advisory Fee
6
<PAGE>
FORM OF PROXY CARD
[BANKERS TRUST LOGO]
[BT ALEX. BROWN]
MUTUAL FUND SERVICES -- LEGAL DEPARTMENT
MS 1-18-8
One South Street
Baltimore, Maryland 21202-3220
BT Pyramid Mutual Funds
BT Investment Equity Appreciation Fund
One South Street
Baltimore, Maryland 21202
PROXY FOR THE SPECIAL MEETING OF
STOCKHOLDERS
11:00 a.m., Eastern time, on October 8, 1999
The undersigned hereby appoints Daniel O. Hirsch
and Amy M. Olmert and each of them, with full power of
substitution, as proxies of the undersigned to vote all
shares of stock that the undersigned is entitled in any
capacity to vote at the above-stated special meeting,
and at any and all adjournments or postponements
thereof (the "Special Meeting"), on the matters set
forth on this Proxy Card, and, in their discretion,
upon all matters incident to the conduct of the Special
Meeting and upon such other matters as may properly be
brought before the Special Meeting. This proxy revokes
all prior proxies given by the undersigned.
All properly executed proxies will be voted as
directed. If no instructions are indicated on a
properly executed proxy, the proxy will be voted FOR
approval of Proposals IA, IB, IC, II and III. All
ABSTAIN votes will be counted in determining the
existence of a quorum at the Special Meeting and, for
Proposals IA, IB and IC, as votes AGAINST the
applicable Proposal.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
TRUSTEES WITH RESPECT TO YOUR FUND. THE BOARD OF
TRUSTEES RECOMMENDS A VOTE FOR PROPOSALS IA, IB, IC, II
AND III.
UNLESS VOTING BY TELEPHONE OR INTERNET, PLEASE
SIGN AND DATE BELOW AND MAIL THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
To vote by Telephone
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Call 1-800-690-6903.
3) Enter the 12-digit control number set
forth on the Proxy card and follow the
simple instructions.
To vote by Internet
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Go to Website www.proxyvote.com.
3) Enter the 12-digit control number set
forth on the Proxy card and follow the
simple instructions.
DO NOT RETURN YOUR PROXY CARD IF YOU VOTE BY
PHONE OR INTERNET.
TO VOTE, MARK BLOCKS IN BLUE OR BLACK INK AS FOLLOWS:
KEEP THIS PORTION FOR YOUR RECORDS.
<PAGE>
DETACH AND RETURN THIS PORTION ONLY.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
BT INVESTMENT EQUITY APPRECIATION FUND
YOUR VOTE IS IMPORTANT. PLEASE SIGN, DATE AND MAIL THIS PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
(Joint owners should EACH sign. Please sign EXACTLY as your name(s) appears on
this card. When signing as attorney, trustee, executor, administrator, guardian
or corporate officer, please give your FULL title below.)
Vote on Trustees
<TABLE>
<S> <C> <C> <C>
II. Election of Messrs. (01) Biggar, For All Withhold All For All Except: To withhold authority
(02) Dill, (03) Hale, (04) Langton, to vote, mark "For All
(05) Saunders, and (06) Van Benschoten Except" and write the
and Drs. (07) Gruber and (08) Herring nominee's number on the
as Trustees of the Board. line below
------------------------
Vote on Proposals
IA. Approval of New Investment FOR AGAINST ABSTAIN III. Ratification of
Advisory Agreement with the selection
Bankers Trust Company of PricewaterhouseCoopers
LLP as the
independent
accountants of
IB. Approval of New Investment FOR AGAINST ABSTAIN the Fund. FOR[] AGAINST[] ABSTAIN []
Advisory Agreement with
Morgan Grenfell Inc.
IC. Approval of FOR AGAINST ABSTAIN The appointed proxies will vote on any
New Investment other business as may properly come before
Sub-advisory the Special Meeting
Agreement with
Bankers Trust Receipt of the Notice and the Joint Proxy
Company Statement, dated August 23, 1999 (the
"Proxy Statement"), is hereby acknowledged.
- ---------------------------------- -------------------------------
- ---------------------------------- -------------------------------
Signature (Please sign Signature (Joint
within box) Date Owners) Date
</TABLE>
<PAGE>
FORM OF PROXY CARD
[BANKERS TRUST LOGO]
[BT ALEX. BROWN]
MUTUAL FUND SERVICES -- LEGAL DEPARTMENT
MS 1-18-8
One South Street
Baltimore, Maryland 21202-3220
BT Pyramid Mutual Funds
BT Investment Money Market Fund
One South Street
Baltimore, Maryland 21202
PROXY FOR THE SPECIAL MEETING OF
STOCKHOLDERS
11:00 a.m., Eastern time, on October 8, 1999
The undersigned hereby appoints Daniel O. Hirsch
and Amy M. Olmert and each of them, with full power of
substitution, as proxies of the undersigned to vote all
shares of stock that the undersigned is entitled in any
capacity to vote at the above-stated special meeting,
and at any and all adjournments or postponements
thereof (the "Special Meeting"), on the matters set
forth on this Proxy Card, and, in their discretion,
upon all matters incident to the conduct of the Special
Meeting and upon such other matters as may properly be
brought before the Special Meeting. This proxy revokes
all prior proxies given by the undersigned.
All properly executed proxies will be voted as
directed. If no instructions are indicated on a
properly executed proxy, the proxy will be voted FOR
approval of Proposals IA, IB, IC, II and III. All
ABSTAIN votes will be counted in determining the
existence of a quorum at the Special Meeting and, for
Proposals IA, IB and IC, as votes AGAINST the
applicable Proposal.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
TRUSTEES WITH RESPECT TO YOUR FUND. THE BOARD OF
TRUSTEES RECOMMENDS A VOTE FOR PROPOSALS IA, IB, IC, II
AND III.
UNLESS VOTING BY TELEPHONE OR INTERNET, PLEASE
SIGN AND DATE BELOW AND MAIL THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
To vote by Telephone
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Call 1-800-690-6903.
3) Enter the 12-digit control number set
forth on the Proxy card and follow the
simple instructions.
To vote by Internet
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Go to Website www.proxyvote.com.
3) Enter the 12-digit control number set
forth on the Proxy card and follow the
simple instructions.
DO NOT RETURN YOUR PROXY CARD IF YOU VOTE BY
PHONE OR INTERNET.
TO VOTE, MARK BLOCKS IN BLUE OR BLACK INK AS
FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS.
8
<PAGE>
DETACH AND RETURN THIS PORTION ONLY.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
BT INVESTMENT MONEY MARKET FUND
YOUR VOTE IS IMPORTANT. PLEASE SIGN, DATE AND MAIL THIS PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
(Joint owners should EACH sign. Please sign EXACTLY as your name(s) appears on
this card. When signing as attorney, trustee, executor, administrator, guardian
or corporate officer, please give your FULL title below.)
Vote on Trustees
<TABLE>
<S> <C>
II. Election of Messrs. (01) Biggar, For Withhold All For Except: To withhold
(02) Dill, (03) Hale, (04) Langton, authority
(05) Saunders, and (06) Van Benschoten to vote, mark
and Drs. (07) Gruber and (08) Herring "For All
as Trustees of the Board. Except" and
write the
nominee's
number on the
line below.
---------------------
Vote on Proposals
IA. Approval of III. Ratification of
New Investment Advisory the selection of
Agreement with PricewaterhouseCoopers
Bankers Trust Company FOR AGAINST ABSTAIN LLP as the independent accountants
of the Fund. FOR[] AGAINST [] ABSTAIN []
IB. Approval of
New Investment
Advisory
Agreement with
Morgan Grenfell FOR AGAINST ABSTAIN The appointed proxies will vote on any
Inc. other business as may properly come before
the Special Meeting
IC. Approval of Receipt of the Notice and the Joint Proxy
New Investment Statement, dated August 23, 1999 (the
Sub-advisory "Proxy Statement"), is hereby acknowledged.
Agreement with
Bankers Trust FOR AGAINST ABSTAIN
Company
- ---------------------------------- -------------------------------
- ---------------------------------- -------------------------------
Signature (Please sign Signature (Joint
within box) Date Owners) Date
</TABLE>
<PAGE>
FORM OF PROXY CARD
[BANKERS TRUST LOGO]
[BT ALEX. BROWN]
MUTUAL FUND SERVICES -- LEGAL DEPARTMENT
MS 1-18-8
One South Street
Baltimore, Maryland 21202-3220
BT Pyramid Mutual Funds
BT Investment Equity 500 Index Fund
One South Street
Baltimore, Maryland 21202
PROXY FOR THE SPECIAL MEETING OF
STOCKHOLDERS
11:00 a.m., Eastern time, on October 8, 1999
The undersigned hereby appoints Daniel O. Hirsch
and Amy M. Olmert and each of them, with full power of
substitution, as proxies of the undersigned to vote all
shares of stock that the undersigned is entitled in any
capacity to vote at the above-stated special meeting,
and at any and all adjournments or postponements
thereof (the "Special Meeting"), on the matters set
forth on this Proxy Card, and, in their discretion,
upon all matters incident to the conduct of the Special
Meeting and upon such other matters as may properly be
brought before the Special Meeting. This proxy revokes
all prior proxies given by the undersigned.
All properly executed proxies will be voted as
directed. If no instructions are indicated on a
properly executed proxy, the proxy will be voted FOR
approval of Proposals IA, IB, IC, II and III. All
ABSTAIN votes will be counted in determining the
existence of a quorum at the Special Meeting and, for
Proposals IA, IB and IC, as votes AGAINST the
applicable Proposal.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
TRUSTEES WITH RESPECT TO YOUR FUND. THE BOARD OF
TRUSTEES RECOMMENDS A VOTE FOR PROPOSALS IA, IB, IC, II
AND III.
UNLESS VOTING BY TELEPHONE OR INTERNET, PLEASE
SIGN AND DATE BELOW AND MAIL THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
To vote by Telephone
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Call 1-800-690-6903.
3) Enter the 12-digit control number set
forth on the Proxy card and follow the
simple instructions.
To vote by Internet
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Go to Website www.proxyvote.com.
3) Enter the 12-digit control number set
forth on the Proxy card and follow the
simple instructions.
DO NOT RETURN YOUR PROXY CARD IF YOU VOTE BY
PHONE OR INTERNET.
TO VOTE, MARK BLOCKS IN BLUE OR BLACK INK AS FOLLOWS:
KEEP THIS PORTION FOR YOUR RECORDS.
<PAGE>
DETACH AND RETURN THIS PORTION ONLY.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
BT INVESTMENT EQUITY 500 INDEX FUND
YOUR VOTE IS IMPORTANT. PLEASE SIGN, DATE AND MAIL THIS PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
(Joint owners should EACH sign. Please sign EXACTLY as your name(s) appears on
this card. When signing as attorney, trustee, executor, administrator, guardian
or corporate officer, please give your FULL title below.)
Vote on Trustees
<TABLE>
<S> <C>
II. Election of Messrs. (01) Biggar, For All Withhold All For All Except: To withhold
(02) Dill, (03) Hale, (04) Langton, authority
(05) Saunders, and (06) Van Benschoten to vote, mark
and Drs. (07) Gruber and (08) Herring "For All
as Trustees of the Boards. Except" and
write the
nominee's
number on the
line below.
---------------
Vote on Proposals
IA. Approval of III. Ratification of the selection
New Investment of PricewaterhouseCoopers
Advisory LLP as the independent accountants of
Agreement with the Fund and its corresponding
Bankers Trust FOR AGAINST ABSTAIN Portfolio. FOR [] AGAINST [] ABSTAIN []
Company
IB. Approval of FOR AGAINST ABSTAIN The appointed proxies will vote on any
New Investment other business as may properly come before
Advisory the Special Meeting
Agreement with
Morgan Grenfell
Inc. Receipt of the Notice and the Joint Proxy
Statement, dated August 23, 1999 (the
"Proxy Statement"), is hereby acknowledged.
IC. Approval of FOR AGAINST ABSTAIN
New Investment
Sub-advisory
Agreement with
Bankers Trust
Company
- ---------------------------------- -------------------------------
- ---------------------------------- -------------------------------
Signature (Please sign Signature (Joint
within box) Date Owners) Date
</TABLE>
<PAGE>
FORM OF PROXY CARD
[BANKERS TRUST LOGO]
[BT ALEX. BROWN]
MUTUAL FUND SERVICES -- LEGAL DEPARTMENT
MS 1-18-8
One South Street
Baltimore, Maryland 21202-3220
BT Pyramid Mutual Funds
BT PreservationPlus Fund
One South Street
Baltimore, Maryland 21202
PROXY FOR THE SPECIAL MEETING OF
STOCKHOLDERS
11:00 a.m., Eastern time, on October 8, 1999
The undersigned hereby appoints Daniel O. Hirsch
and Amy M. Olmert and each of them, with full power of
substitution, as proxies of the undersigned to vote all
shares of stock that the undersigned is entitled in any
capacity to vote at the above-stated special meeting,
and at any and all adjournments or postponements
thereof (the "Special Meeting"), on the matters set
forth on this Proxy Card, and, in their discretion,
upon all matters incident to the conduct of the Special
Meeting and upon such other matters as may properly be
brought before the Special Meeting. This proxy revokes
all prior proxies given by the undersigned.
All properly executed proxies will be voted as
directed. If no instructions are indicated on a
properly executed proxy, the proxy will be voted FOR
approval of Proposals IA, IB, IC, II and III. All
ABSTAIN votes will be counted in determining the
existence of a quorum at the Special Meeting and, for
Proposals IA, IB and IC, as votes AGAINST the
applicable Proposal.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
TRUSTEES WITH RESPECT TO YOUR FUND. THE BOARD OF
TRUSTEES RECOMMENDS A VOTE FOR PROPOSALS IA, IB, IC, II
AND III.
UNLESS VOTING BY TELEPHONE OR INTERNET, PLEASE
SIGN AND DATE BELOW AND MAIL THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
To vote by Telephone
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Call 1-800-690-6903.
3) Enter the 12-digit control number set
forth on the Proxy card and follow the
simple instructions.
To vote by Internet
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Go to Website www.proxyvote.com.
3) Enter the 12-digit control number set
forth on the Proxy card and follow the
simple instructions.
DO NOT RETURN YOUR PROXY CARD IF YOU VOTE BY
PHONE OR INTERNET.
TO VOTE, MARK BLOCKS IN BLUE OR BLACK INK AS FOLLOWS:
KEEP THIS PORTION FOR YOUR RECORDS.
<PAGE>
DETACH AND RETURN THIS PORTION ONLY.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
BT PRESERVATIONPLUS FUND
YOUR VOTE IS IMPORTANT. PLEASE SIGN, DATE AND MAIL THIS PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
(Joint owners should EACH sign. Please sign EXACTLY as your name(s) appears on
this card. When signing as attorney, trustee, executor, administrator, guardian
or corporate officer, please give your FULL title below.)
<TABLE>
<S> <C>
Vote on Trustees For All Withhold All For All Except: To withhold
authority
II. Election of Messrs. (01) Biggar, to vote, mark
(02) Dill, (03) Hale, (04) Langton, "For All
(05) Saunders, and (06) Van Benschoten Except" and
and Drs. (07) Gruber and (08) Herring write the
as Trustees of the Boards. nominee's
number on the
line below.
-----------------------------
Vote on Proposals
IA. Approval of III. Ratification of
New Investment the selection
Advisory of Ernst &
Agreement with Young LLP as
Bankers Trust the independent
Company FOR AGAINST ABSTAIN accountants of
the Fund and its
corresponding
Portfolio. FOR [] AGAINAST [] ABSTAIN []
IB. Approval of The appointed proxies will vote on any
New Investment other business as may properly come before
Advisory the Special Meeting
Agreement with
Morgan Grenfell FOR AGAINST ABSTAIN
Inc. Receipt of the Notice and the Joint Proxy
Statement, dated August 23, 1999 (the
"Proxy Statement"), is hereby acknowledged.
IC. Approval of FOR AGAINST ABSTAIN
New Investment
Sub-advisory
Agreement with
Bankers Trust
Company
- ---------------------------------- -------------------------------
- ---------------------------------- -------------------------------
Signature (Please sign Signature (Joint
within box) Date Owners) Date
</TABLE>
<PAGE>
August 23, 1999
IMPORTANT NEWS
FOR SHAREHOLDERS OF BT PYRAMID MUTUAL FUNDS
Here is a brief overview of some matters affecting your Fund which
require a shareholder vote. We encourage you to read the full text of the
enclosed Proxy Statement, and to vote your shares.
Q. What has happened to require a shareholder vote?
A. On June 4, 1999, Bankers Trust became a subsidiary of Deutsche Bank AG.
Deutsche Bank, a banking company organized under the laws of the Federal
Republic of Germany, provides a comprehensive range of global banking and
financial services.
Deutsche Bank now ranks as the fourth largest investment manager in the
world with $670-billion in assets in a full range of active and index
strategies. Deutsche Asset Management handles the investment management
activities of Deutsche Bank in the Americas, United Kingdom and Asia and
will manage $256 billion in assets globally.
To ensure that Bankers Trust may continue to serve as investment adviser
of the BT Mutual Funds, we are seeking shareholder approval of new
advisory agreements.
THE BOARD MEMBERS OF YOUR FUND RECOMMEND THAT YOU VOTE FOR THESE
PROPOSALS.
Q. Why am I being asked to vote on the new advisory agreements?
A. The Investment Company Act, which regulates investment companies in the
United States such as your BT Mutual Fund, requires a shareholder vote to
approve a new advisory agreement following certain types of business
combinations. Each of the new advisory agreements became effective
immediately upon consummation of the merger and will continue in effect
only upon shareholder approval.
Q. How does the merger affect my BT Mutual Fund?
A. Your BT Mutual Fund and its respective investment objectives have not
changed as a result of the merger. You still own the same shares in
the same Fund as you did prior to the merger. Each of the new advisory
agreements contains substantially the same terms and conditions as the
agreement in effect prior to the merger, except for the dates of
execution and termination. If shareholders do not approve the new
advisory agreements, the agreements will no longer continue and the
governing Boards of your Fund will take such action as they deem to be
in the best interests of the Fund, and their respective shareholders.
<PAGE>
Q. Have the investment advisory fees remained the same?
A. Yes.
Q. What are the benefits of the merger?
A. There are several potential positive aspects of the merger you may be
interested in. Most notably, the combined institution will be one of
the largest financial institutions in the world, as well as a leader in
a number of important categories, including asset management. The
financial strength of the combined institution coupled with the
increased breadth and depth of its resources and capabilities are
advantages the acquisition brings. Further, as a truly global
institution, the combined entity will be in a unique position to
provide coverage, services and products.
Q. How does the Board of Trustees of my BT Mutual Fund recommend that I vote?
A. After careful consideration, the Board of Trustees of your BT Mutual Fund
recommends that you vote in favor of all the proposals on the enclosed
proxy card(s).
Q. Whom do I call for more information?
A. If you need more information, please call Shareholder Communications
Corporation, your Fund's information agent, at 1-800-732-6168.
Q. How can I vote my shares?
A. You may choose from one of the following options to vote your shares:
o By mail, with the enclosed proxy card(s) and return envelope.
o By telephone, with a toll-free call to the telephone number that
appears on your proxy card.
o Through the Internet, by using the Internet address located on your
proxy card and following the instructions on the site.
o In person at the shareholder meeting (see details enclosed in proxy
statement).
Q. Will my BT Mutual Fund pay for the proxy solicitation and legal costs
associated with this transaction?
A. No, Bankers Trust will bear these costs.
Q. What happens if I own shares in more than one BT Mutual Fund?
A. If you have more than one BT Mutual Fund in your name at the same address,
you will receive separate proxy cards for each Fund but only one proxy
statement for the account.
<PAGE>
Please vote all issues on each proxy card that you receive. Thank you for
mailing your proxy card(s) promptly.
<PAGE>
August 23, 1999
Dear Shareholder:
On June 4, 1999, Bankers Trust merged with Deutsche Bank AG. As a result of the
merger, we are asking shareholders of BT Mutual Funds to approve new advisory
agreements. Enclosed is further information relating to these changes, including
a Questions & Answers section and proxy card(s).
Important information about the changes:
o The merger has no effect on the number of shares you own or the
value of those shares.
o The advisory fees payable under the new advisory agreements have not
increased.
o The investment objective and policies of your mutual fund investment
have not changed.
In addition to the change in advisory agreements, shareholders are also being
asked to approve other changes outlined in the enclosed Proxy Statement. The
Board of Trustees of your BT Mutual Fund believes that the proposals are
important and recommends that you read the enclosed materials carefully and then
vote for all proposals.
What you need to do:
o Read all enclosed materials including the Questions & Answers
section.
o Choose one of the following options to vote:
1. By Mail: Complete the enclosed proxy card and return in
postage-paid envelope provided.
2. By Telephone: Call the Toll-Free # on your proxy card by
(DD/MM/YY).
3. By Internet: Logon to WWW.PROXYVOTE.COM by (DD/MM/YY)
4. Attend Shareholder Meeting (details enclosed)
Please note: if you own shares of more than one Fund, you will receive more than
one proxy card. Please sign and return each proxy card you receive.
Sincerely,
[INSERT MR. HIRSCH'S SIGNATURE]
Daniel O. Hirsch
Secretary
<PAGE>
BT Mutual Funds
<PAGE>
Should members of the staff have any questions or comments regarding
the enclosed materials, they should call the undersigned, Burton M. Leibert or
Jon S. Rand of this office at (212) 728-8000.
Very truly yours,
/s/ Mary C. Carty
Mary C. Carty
Enclosures
cc: John Grzeskiewicz
Daniel O. Hirsch
Fran Pollack-Matz
Burton M. Leibert
Jon S. Rand
