<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
INTERNATIONAL EQUITY PORTFOLIO
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
September 15, 1999
Mr. Allen Johnson
Chrysler Foundation
1000 Chrysler Drive
Auburn Hills, MI 48326-2766
Dear Mr. Johnson,
On June 4, 1999, Bankers Trust merged with Deutsche Bank A.G. As a result
of the merger, we are asking shareholders of BT Mutual Funds to approve new
advisory agreements and to vote on other proposals. As a direct investor in the
International Equity Portfolio, we are soliciting your vote on some of the same
proposals for a shareholder meeting to be held October 15, 1999 at 4:00 p.m. at
One South Street, Baltimore, Maryland 21202.
We have enclosed proxy statements and proxy cards for (a) BT Investment
Funds, which includes as a series International Equity Fund, a mutual fund
investing all of its assets in International Equity Portfolio, (b) BT Advisor
Funds, which includes as a series U.S. Bond Index Fund, a mutual fund investing
all of its assets in U.S. Bond Index Portfolio and (c) Small Cap Index
Portfolio. The proxy statement for BT Investment Funds includes proposals
applicable to shareholders of each of its series funds, some of which are not
applicable to International Equity Portfolio; therefore, you would only vote on
those proposals that request a vote by holders of interests in International
Equity Portfolio. As a result, your proxy card for the BT Investment Funds proxy
statement only requests votes on issues relating to International Equity
Portfolio. Your proxy cards for BT Advisor Funds and Small Cap Index Portfolio
proxy statements request your vote on all of the proposals included in the
respective proxy statements.
Please forward these materials to the person at your firm authorized to
execute the proxy cards and ask them to return them to us as soon as possible in
the enclosed postage-paid envelope. Thank you for your assistance. If you have
any questions, please contact me at (212) 250-9360.
Sincerely,
Marco Veissid
Director, Client Service
<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:
. The merger has no effect on the number of shares you own or the
value of those shares.
. The advisory fees payable under the new advisory agreements have
not increased.
. The investment objective and policies of your mutual fund
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:
. Read all enclosed materials including the Questions & Answers
section.
. Choose one of the following options to vote:
1. By Mail: Complete the enclosed proxy card and return in
postage-paid envelope provided.
2. By Telephone: Call the Toll-Free # on your proxy card.
3. By Internet: Logon to www.proxyvote.com.
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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 (unless you
are voting by telephone or through the Internet).
Sincerely,
/s/ Daniel O. Hirsch
Daniel O. Hirsch
Secretary
BT Mutual Funds
<PAGE>
QUESTIONS AND ANSWERS
IMPORTANT NEWS
FOR SHAREHOLDERS OF BT INVESTMENT FUNDS
Here is a brief overview of some matters affecting your Fund which require
a shareholder vote. We encourage you to read the full text of the enclosed
Proxy Statement, and to vote your shares.
Q. What has happened to require a shareholder vote?
A. On June 4, 1999, Bankers Trust became a subsidiary of Deutsche Bank A.G.
The combined entity now ranks as the fourth largest investment manager in
the world with $670-billion in assets in a full range of active and index
strategies.
To ensure that Bankers Trust or an affiliate may continue to serve as in-
vestment adviser of the BT Mutual Funds, we are seeking shareholder ap-
proval 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 combi-
nations. 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 agree-
ments contains substantially the same terms and conditions as the agreement
in effect prior to the merger, except for the dates of execution and termi-
nation. 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.
Q. Have the investment advisory fees remained the same?
A. Yes.
<PAGE>
Q. What are the benefits of the merger?
A. There are several potential positive aspects of the merger you may be in-
terested in. Most notably, the combined institution will be one of the
largest financial institutions in the world, as well as a leader in a num-
ber 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 Corpo-
ration, your Fund's information agent, at 1-800-732-6168.
Q. How can I vote my shares?
A. You may choose from one of the following options to vote your shares:
. By mail, with the enclosed proxy card(s) and return envelope.
. By telephone, with a toll-free call to the telephone number that
appears on your proxy card.
. Through the Internet, by using the Internet address located on
your proxy card and following the instructions on the site.
. In person at the shareholder meeting (see details enclosed in
proxy statement).
Q. Will my BT Mutual Fund pay for the proxy solicitation and legal costs asso-
ciated with this transaction?
A. No, Bankers Trust will bear these costs.
Q. What happens if I own shares in more than one BT Mutual Fund?
A. If you have more than one BT Mutual Fund in your name at the same address,
you will receive separate proxy cards for each Fund but only one proxy
statement for the account.
Please vote all issues on each proxy card that you receive. Thank you for mail-
ing your proxy card(s) promptly.
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BT INVESTMENT FUNDS
Cash Management Fund ("Cash Fund")
Intermediate Tax Free Fund
Tax Free Money Fund
NY Tax Free Money Fund
Treasury Money Fund
International Equity Fund
Capital Appreciation Fund
BT Investment Lifecycle Long Range Fund
BT Investment Lifecycle Mid Range Fund
BT Investment Lifecycle Short Range Fund
Pacific Basin Equity Fund
Latin American Equity Fund
Small Cap Fund
BT PreservationPlus Income Fund ("PreservationPlus Income Fund")
One South Street
Baltimore, Maryland 21202
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held September 21, 1999
A Special Meeting of shareholders of BT Investment Funds (the "Trust") will
be held at the offices of BT Alex. Brown Incorporated, One South Street, 30th
Floor, Baltimore, Maryland 21202, on September 21, 1999 at 11:00 a.m. (the
"Special Meeting"). The Trust is an open-end management investment company, or-
ganized under the laws of the Commonwealth of Massachusetts, that is comprised
of the above fourteen series (each a "Fund," and collectively, the "Funds") and
the Quantitative Equity Fund, Global Emerging Markets Equity Fund, BT Global
Equity Fund and BT European Equity Fund, which are not addressed in the accom-
panying Joint Proxy Statement ("Proxy Statement"). Each Fund operates as a
feeder fund in a master-feeder fund arrangement with a corresponding master
fund portfolio (each a "Portfolio," and collectively, the "Portfolios"). As
feeder funds, each 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 Portfolios in which the Funds in-
vest are organized either as separate series of BT Investment Portfolios, an
open-end management investment company, or 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
Fund's voting rights with respect to the Portfolio interests that it holds must
be passed through to the Fund's own shareholders.
<PAGE>
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: To approve or disapprove new investment advisory
(Proposal IA: All Funds agreements (each a "New Advisory Agreement" and
Proposals IB and IC: All collectively the "New Advisory Agreements") for
Funds EXCEPT Cash Fund) each Fund's corresponding Portfolio:
A. To approve or disapprove a New Advisory
Agreement between each Fund's corresponding Port-
folio 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 Port-
folio and Morgan Grenfell Inc. ("MGI") (the "New
MGI Advisory Agreements") to be implemented
within two years of the date of the Special Meet-
ing upon approval of the members of the Trust's
and the Portfolios' Boards of Trustees, respec-
tively, who are not "interested persons" thereof
("Independent Trustees") (as defined in the In-
vestment Company Act of 1940, as amended (the
"Act")).
C. To approve or disapprove a new sub-invest-
ment advisory agreement (the "New Sub-advisory
Agreements," which term, unless otherwise speci-
fied, is included within the meaning of New Advi-
sory Agreements) among each Fund's corresponding
Portfolio, MGI and either
. Bankers Trust (for each Fund EXCEPT Pacific Ba-
sin Equity Fund and Latin American Equity Fund)
or
. Morgan Grenfell Investment Services Ltd.
("MGIS" and, together with Bankers Trust and
MGI, the "Advisers") (for Pacific Basin Equity
Fund and Latin American Equity Fund ONLY)
under which Bankers Trust or MGIS, as applicable,
may perform certain of MGI's responsibilities, at
MGI's expense, under the applicable New MGI Advi-
sory Agreement with the applicable Portfolio
2
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upon approval of the Independent Trustees of the
Trust and the Portfolio.
PROPOSAL II: To elect Trustees of the Trust and the Portfo-
(All Funds) lios to hold office until their respective suc-
cessors have been duly elected and qualified or
until their earlier resignation or removal.
PROPOSAL III: To ratify or reject the selection of
(All Funds EXCEPT PricewaterhouseCoopers LLP as the independent
PreservationPlus Income accountants for the applicable Funds and their
Fund) corresponding Portfolios for the current fiscal
year.
PROPOSAL IV:
(PreservationPlus Income To ratify or reject the selection of Ernst &
Fund ONLY) Young LLP as the independent accountants for
PreservationPlus Income Fund and its correspond-
ing 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.
The New Advisory Agreements described in Proposals IA, IB and IC, respec-
tively, will contain substantially the same terms and conditions, except for
the parties and the dates of execution, effectiveness and initial term, as the
prior investment advisory agreements pursuant to which services were provided
to the Portfolios. In addition, the form of New Sub-advisory Agreement autho-
rizes the applicable investment adviser to adjust the duties, the amounts of
assets to be managed and the fees paid to the applicable investment subadviser
with and upon the approval of the Boards and the Independent Trustees of each
Board. (The shareholders of Cash Fund are not being asked to vote on Proposals
IB and IC.) As more fully discussed in the accompanying Proxy Statement, ap-
proval 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. Each of MGI and MGIS is, and as a result of this transac-
tion, 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 or MGIS, as applicable, de-
scribed in Proposal IC will permit Deutsche Bank, upon the approval of the In-
dependent Trustees of the Trust and the Portfolios, to simplify the organiza-
tional structure of its U.S. mutual fund operations, enhance the efficiency of
their administration and promote consistency of internal controls, compliance
and regulatory oversight. The deferral in implementing the New Advisory Agree-
ments with MGI is needed to permit Deutsche Bank a
3
<PAGE>
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 COM-
MUNICATIONS CORPORATION AT 1-800-732-6168.
This notice and related proxy material are first being mailed to sharehold-
ers on or about August 23, 1999. This proxy is being solicited on behalf of the
Board of Trustees of the Trust.
By Order of the Board of Trustees,
/s/ Daniel O. Hirsch
Daniel O. Hirsch, Secretary
New York, New York
August 23, 1999
WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DATE
AND SIGN THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE
IN ORDER TO ASSURE REPRESENTATION OF YOUR SHARES (UNLESS YOU ARE VOTING BY
TELEPHONE OR THROUGH THE INTERNET). NO POSTAGE NEED BE AFFIXED IF THE PROXY CARD
IS MAILED IN THE UNITED STATES.
4
<PAGE>
BT Investment Funds
Cash Management Fund ("Cash Fund")
Intermediate Tax Free Fund ("Intermediate Fund")
Tax Free Money Fund ("Tax Free Fund")
NY Tax Free Money Fund ("NY Fund")
Treasury Money Fund ("Treasury Fund")
International Equity Fund ("International Fund")
Capital Appreciation Fund ("Capital Fund")
BT Investment Lifecycle Long Range Fund ("Long Range Fund")
BT Investment Lifecycle Mid Range Fund ("Mid Range Fund")
BT Investment Lifecycle Short Range Fund ("Short Range Fund")
Pacific Basin Equity Fund ("Pacific Fund")
Latin American Equity Fund ("Latin American Fund")
Small Cap Fund
BT PreservationPlus Income Fund ("PreservationPlus Income Fund")
One South Street
Baltimore, Maryland 21202
PROXY STATEMENT FOR THE SPECIAL MEETING OF SHAREHOLDERS
September 21, 1999
This Joint Proxy Statement ("Proxy Statement") is being furnished in con-
nection with the solicitation of proxies by the Board of Trustees of BT Invest-
ment Funds (the "Trust") with respect to the above fourteen 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 Incorporated, One
South Street, 30th Floor, Baltimore, Maryland 21202 on September 21, 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 Fund operates as a feeder fund in a master-feeder fund arrangement
with a corresponding master fund portfolio (each a "Portfolio," and collective-
ly, the "Portfolios"). The Portfolios in which the Funds invest are organized
either as separate series of BT Investment Portfolios ("BT Portfolios"), an
open-end management investment company, or as separately registered open-end
management investment companies, in each case established as a trust under the
laws of the State of New York. As feeder funds, each 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.
<PAGE>
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 actu-
ally taken by the Trust on behalf of the applicable series or Fund. Some ac-
tions 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 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 prop-
erly come before the meeting or any adjournments thereof:
PROPOSAL I: To approve or disapprove new investment advisory
(Proposal IA: All Funds agreements (each a "New Advisory Agreement" and
Proposals IB and IC: All collectively the "New Advisory Agreements") for
Funds EXCEPT Cash Fund) each Fund's corresponding Portfolio:
A. To approve or disapprove a New Advisory
Agreement between each Fund's corresponding Port-
folio 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 Port-
folio and Morgan Grenfell Inc. ("MGI") (the "New
MGI Advisory Agreements") to be implemented
within two years of the date of the Special Meet-
ing upon approval of the members of the Trust's
and the Portfolios' Boards of Trustees, respec-
tively, who are not "interested persons" thereof
("Independent Trustees") (as defined in the In-
vestment Company Act of 1940, as amended (the
"Act")).
2
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C. To approve or disapprove a new sub-
investment advisory agreement (the "New Sub-
advisory Agreements," which term, unless other-
wise specified, is included within the meaning of
New Advisory Agreements) among each Fund's corre-
sponding Portfolio, MGI and either
. Bankers Trust (for each Fund EXCEPT Pacific
Fund and Latin American Fund) or
. Morgan Grenfell Investment Services Ltd.
("MGIS" and, together with Bankers Trust and
MGI, the "Advisers") (for Pacific Fund and
Latin American Fund ONLY)
under which Bankers Trust or MGIS, as applicable,
may perform certain of MGI's responsibilities, at
MGI's expense, under the applicable New MGI Advi-
sory 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
(All Funds EXCEPT PricewaterhouseCoopers LLP as the independent ac-
PreservationPlus Income countants for the applicable Funds and their cor-
Fund) responding Portfolios for the current fiscal
year.
PROPOSAL IV:
(PreservationPlus To ratify or reject the selection of Ernst &
Income Fund ONLY) Young LLP as the independent accountants for the
PreservationPlus Income Fund and its correspond-
ing 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.
3
<PAGE>
The Funds' shareholders are to consider the approval of New Advisory
Agreements for each Fund's corresponding Portfolio, as indicated in the table
below:
<TABLE>
<CAPTION>
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Fund Corresponding Portfolio
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<C> <S>
Cash Fund**** Cash Management Portfolio ("Cash
Portfolio")*
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Intermediate Fund**** Intermediate Tax Free Portfolio
("Intermediate Portfolio")*
- ---------------------------------------------------------------------------
Tax Free Fund**** Tax Free Money Portfolio ("Tax Free
Portfolio")*
- ---------------------------------------------------------------------------
NY Fund**** NY Tax Free Portfolio ("NY Portfolio")*
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Treasury Fund**** Treasury Money Portfolio ("Treasury
Portfolio")*
- ---------------------------------------------------------------------------
International Fund**** International Equity Portfolio
("International Portfolio")*
- ---------------------------------------------------------------------------
Capital Fund**** Capital Appreciation Portfolio ("Capital
Portfolio")*
- ---------------------------------------------------------------------------
Long Range Fund**** Asset Management Portfolio ("Asset
Portfolio")*
- ---------------------------------------------------------------------------
Mid Range Fund**** Asset Management Portfolio II ("Asset
Portfolio II")**
- ---------------------------------------------------------------------------
Short Range Fund**** Asset Management Portfolio III ("Asset
Portfolio III")**
- ---------------------------------------------------------------------------
Pacific Fund*** Pacific Basin Portfolio ("Pacific
Portfolio")**
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Latin American Fund*** Latin American Equity Portfolio ("Latin
American Portfolio")**
- ---------------------------------------------------------------------------
Small Cap Fund**** Small Cap Portfolio**
- ---------------------------------------------------------------------------
PreservationPlus Income Fund**** BT PreservationPlus Income Portfolio
("PreservationPlus Income Portfolio")**
- ---------------------------------------------------------------------------
</TABLE>
- -----------
* 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.
*** Prior to the Merger (as defined herein), the corresponding Portfolios to
these Funds were sub-advised by BT Funds Management (International) Lim-
ited ("FMIL"), at the time an indirect wholly owned subsidiary of Bankers
Trust Corporation ("BT Corporation"). The sub-advisory agreements between
Bankers Trust and FMIL with respect to these Funds were terminated prior
to the time of the Merger (as defined herein). The sub-advisory agreements
between Bankers Trust and FMIL for these Funds are not being renewed.
These Funds' shareholders will consider the approval of the New Sub-advi-
sory Agreements between MGI and MGIS.
**** These Funds' shareholders will consider the approval of the New Sub-advi-
sory Agreements between MGI and Bankers Trust.
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/ Mr. Biggar currently
serves on the
- -----------
/1/Unless otherwise indicated, references in this Proxy Statement to the
"Trustee Nominees" includes Trustee Nominees of both the Trust and the Port-
folios.
4
<PAGE>
Board of the Portfolios and Messrs. Dill and Saunders currently serve on the
Boards of both the Trust and the Portfolios (collectively, the "Boards"). Drs.
Herring and Gruber and Messrs. 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 reimburse-
ment of brokerage firms and others for their expenses in forwarding solicita-
tion 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 record-
ed. Proxies voted by telephone or through the Internet may be revoked at any
time before they are voted in the same manner that proxies voted by mail may be
revoked.
The Annual Report of each Fund containing audited financial statements for
the fiscal year ended September 30, 1998 (for the Intermediate Fund, Interna-
tional Fund, Capital Fund, Pacific Fund, Latin American Fund, Small Cap Fund
and PreservationPlus Income Fund), December 31, 1998 (for the Cash Fund, Tax
Free Fund, Treasury Fund and NY Fund) and March 31, 1999 (for the Long Range
Fund, Mid Range Fund and Short Range Fund), as well as the Semi-Annual Report
of each Fund (each a "Report"), have previously been furnished to the Funds'
respective shareholders. An additional copy of each Report will be furnished
without charge upon request by writing to the Trust at the address set forth on
the cover of this Proxy Statement or by calling 1-800-730-1313.
If the enclosed Proxy is properly executed and returned in time to be voted
at the Special Meeting, the shares represented thereby will be voted in accor-
dance 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
5
<PAGE>
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 invest-
ment authority, and shares in any other accounts as to which Bankers Trust is
the agent of record, which are not otherwise represented in person or by proxy
at the Special Meeting. Bankers Trust will vote shares of each Fund over which
it has investment discretion in accord with its fiduciary and other legal ob-
ligations, 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 ab-
staining, 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 com-
monly referred to as "mirror" or "echo" voting.
In the event that a quorum is not present at the Special Meeting, or if a
quorum is present but sufficient votes to approve a Proposal are not received,
the persons named as proxies may propose one or more adjournments of the Spe-
cial Meeting to permit further solicitation of Proxies with respect to the
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 per-
sons have not received instructions from the beneficial owner or other persons
entitled to vote shares on a particular matter with respect to which the bro-
kers 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.)
6
<PAGE>
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:
<TABLE>
<S> <C>
Cash Management Fund 394,856,658.5 shares
Intermediate Tax Free Fund 1,971,533.304 shares
Tax Free Fund 147,777,254.26 shares
NY Tax Free Fund 93,127,311.64 shares
Treasury Fund 538,949,420.51 shares
International Equity Fund 16,148,053.51 shares
Capital Appreciation Fund 1,761,211.813 shares
Long Range Fund 11,723,702.281 shares
Mid Range Fund 7,689,296.466 shares
Short Range Fund 4,549,947.289 shares
Pacific Fund 1,978,613.314 shares
Latin American Fund 590,162.384 shares
Small Cap Fund 9,888,514.376 shares
PreservationPlus Income Fund 4,757.692 shares
</TABLE>
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 com-
mon 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 own-
er. 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 es-
sential 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:
. indicate your instructions on the Proxy (or Proxies);
. date and sign the Proxy (or Proxies); and
. mail the Proxy (or Proxies) promptly in the enclosed envelope.
7
<PAGE>
Beneficial Ownership of Shares of the Funds
Annex I attached hereto sets forth information as of the Record Date re-
garding 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 outstand-
ing shares of the Fund, (ii) the Trustees and Trustee Nominees, (iii) the ex-
ecutive 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 Securi-
ties and Exchange Commission (the "Commission"), and the information is not
necessarily indicative of beneficial ownership for any other purpose. Under
these rules, beneficial ownership includes any shares as to which the individ-
ual has the sole or shared voting power or investment power and also any
shares which the individual has the right to acquire within 60 days of the
Record Date through the exercise of any stock option or other right. Unless
otherwise indicated, each person has sole investment and voting power (or
shares this power with his or her spouse) with respect to the shares set forth
in Annex I. The inclusion herein of any shares deemed beneficially owned does
not constitute an admission of beneficial ownership of the shares.
Collectively, the Trustees and officers of the Trust own less than 1% of
each Fund's outstanding shares.
Background
Master-Feeder Structure. Shareholders of the Funds are being asked to ap-
prove the New Advisory Agreements, as applicable, and to elect new Boards of
Trustees of the Trust and the Portfolios. As indicated earlier, each Fund op-
erates as a feeder fund in a master-feeder fund arrangement with the Portfo-
lios, 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, six of the Portfolios are separate
series of BT Portfolios, while the remaining eight Portfolios 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
8
<PAGE>
adviser, custodian and administrator of each Portfolio. Bankers Trust is a
wholly owned subsidiary of Bankers Trust Corporation ("BT Corporation"), lo-
cated 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, Port-
land, 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.
9
<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 appli-
cable investment subadviser with and upon the approval of the Boards 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 pro-
vided 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 either Bankers Trust or MGIS, as applica-
ble, described in Proposal IC (which are not proposed for approval by share-
holders of Cash Fund) will permit Deutsche Bank, upon the approval of the In-
dependent Trustees of the Trust and the applicable Portfolio, to simplify the
organizational structure of its U.S. mutual fund operations, enhance the effi-
ciency 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) pursu-
ant 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.
10
<PAGE>
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 Ad-
visory 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):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Date of
Prior Date Last Date Last
Portfolio Advisory Approved Approved
(Fiscal Year) Agreement By Portfolio's By Fund's Fee
- --------------------------------------------------------------------------------------------
Trustees Shareholders* Trustees Shareholders*
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Cash Portfolio
(12/31/98) 4/23/90 3/8/99 4/23/90 3/8/99 4/23/90 $8,019,083
- --------------------------------------------------------------------------------------------
Intermediate Portfolio
(12/31/98) 4/8/92 3/8/99 4/8/92 3/8/99 4/8/92 $87,127
- --------------------------------------------------------------------------------------------
Tax Free Portfolio
(12/31/98) 4/23/90 3/8/99 4/23/90 3/8/99 4/23/90 $250,537
- --------------------------------------------------------------------------------------------
NY Portfolio (12/31/98) 4/23/90 3/8/99 4/23/90 3/8/99 4/23/90 $128,675
- --------------------------------------------------------------------------------------------
Treasury Portfolio
(12/31/98) 4/23/90 3/8/99 4/23/90 3/8/99 4/23/90 $3,666,082
- --------------------------------------------------------------------------------------------
International Portfolio
(9/30/98) 4/8/92 3/8/99 4/8/92 3/8/99 4/8/92 $8,493,173
- --------------------------------------------------------------------------------------------
Capital Portfolio
(9/30/98) 10/28/92 3/8/99 10/28/92 3/8/99 10/28/92 $252,946
- --------------------------------------------------------------------------------------------
Asset Portfolio
(3/31/99) 4/8/92 3/8/99 4/8/92 3/8/99 4/8/92 $4,398,804
- --------------------------------------------------------------------------------------------
Asset Portfolio II
(3/31/99) 4/28/93 3/8/99 4/28/93 3/8/99 4/28/93 $568,410
- --------------------------------------------------------------------------------------------
Asset Portfolio III
(3/31/99) 4/28/93 3/8/99 4/28/93 3/8/99 4/28/93 $370,595
- --------------------------------------------------------------------------------------------
Pacific Portfolio
(9/30/98) 4/28/93 3/8/99 4/28/93 3/8/99 4/28/93 $95,400
- --------------------------------------------------------------------------------------------
Latin American Portfolio
(9/30/98) 4/28/93 3/8/99 4/28/93 3/8/99 4/28/93 $256,724
- --------------------------------------------------------------------------------------------
Small Cap Portfolio
(9/30/98) 4/28/93 3/8/99 4/28/93 3/8/99 4/28/93 $1,520,784
- --------------------------------------------------------------------------------------------
PreservationPlus Income
Portfolio (9/30/98) 4/28/93 3/8/99 4/28/93 3/8/99 4/28/93 $202,099
- --------------------------------------------------------------------------------------------
</TABLE>
- -----------
* Shareholders voted to approve the Prior Advisory Agreements on their respec-
tive dates of inception.
11
<PAGE>
The Merger. On November 30, 1998, BT Corporation, Deutsche Bank and Circle
Acquisition Corporation entered into an Agreement and Plan of Merger (the
"Merger Agreement"). Pursuant to the terms of the Merger Agreement, Circle Ac-
quisition Corporation, a wholly owned New York subsidiary of Deutsche Bank,
merged with and into BT Corporation on June 4, 1999, with BT Corporation con-
tinuing 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 Corpora-
tion, along with its affiliates, has continued to offer the range of financial
products and services, including investment advisory services, that it offered
prior to the Merger.
As a result of the Merger, BT Corporation became a wholly owned subsidiary
of Deutsche Bank. Deutsche Bank is a banking company with limited liability
organized under the laws of the Federal Republic of Germany. Deutsche Bank is
the parent company of a group consisting of banks, capital markets companies,
fund management companies, mortgage banks, a property finance company, in-
stallment financing and leasing companies, insurance companies, research and
consultancy companies and other domestic and foreign companies (the "Deutsche
Bank Group"). At March 31, 1999, the Deutsche Bank Group had total assets of
US $727 billion. The Deutsche Bank Group's capital and reserves at March 31,
1999 were US $19.6 billion.
Impact of the Merger on the Prior Advisory Agreements. Section 15(a) of
the Act provides, in pertinent part, that "[i]t shall be unlawful for any per-
son to serve or act as investment adviser of a registered investment company,
except pursuant to a written contract, which contract, whether with such reg-
istered company or with an investment adviser of such registered company, has
been approved by the vote of a majority of the outstanding voting securities
of such registered company . . . ." Section 15(a)(4) of the Act further re-
quires that such written contract provide for automatic termination in the
event of its assignment. Section 2(a)(4) of the Act defines "assignment" to
include any direct or indirect transfer of a contract by the assignor.
While it may be argued otherwise, consummation of the Merger may have re-
sulted in an "assignment" of the Prior Advisory 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
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 ob-
taining prior shareholder approval, of the New BT Advisory Agreements during
12
<PAGE>
an interim period commencing on the date of the closing of the Merger and con-
tinuing, 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 Advi-
sory 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 Port-
folios expect to continue to deposit these fees in such account until approval
of the New BT Advisory Agreements by the respective shareholders of the Port-
folios 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. The following table sets forth
the amount in escrow for each Fund as of June 30, 1999:
<TABLE>
<CAPTION>
Amount in
Fund Escrow
------------------------------------------
<S> <C>
Cash Fund $41,047.79
Intermediate Fund $4,207.19
Tax Free Fund $21,051.34
NY Fund $9,724.06
Treasury Fund $58,968.39
International Fund $866,405.57
Capital Fund $7,627.76
Long Range Fund $59,954.70
Mid Range Fund $10,052.72
Short Range Fund $0.00
Pacific Fund $2,617.18
Latin American Fund $2,015.02
Small Cap Fund $84,014.15
PreservationPlus Income Fund $2,025.45
</TABLE>
The Funds, as shareholders of the Portfolios, are not being asked to ap-
prove or disapprove the Merger or the Merger Agreement; rather, they are being
asked under these Proposals to approve and continue the New BT Advisory Agree-
ments 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
applicable investment subadviser with and upon the approval of the Boards and
the Independent Trustees of each Board. The advisory fee rates charged to the
Portfolios under the Prior Advisory Agreements have continued to apply under
13
<PAGE>
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 di-
rectly to the applicable subadviser. In addition, the Advisers have advised the
Portfolios that they can expect to continue to receive the same level and qual-
ity 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 ap-
prise and consult with the relevant Board or Boards to ensure that the applica-
ble Board, including a majority of the Board's Independent Trustees, is satis-
fied that the services provided by the Advisers will not be diminished in scope
and quality.
The New Advisory Agreements
The New Advisory Agreements. The form of the New Advisory and Sub-advisory
Agreement is attached to this Proxy Statement as Exhibit A. If shareholders ap-
prove 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 sharehold-
ers of the applicable Portfolio, provided that they are also approved by a ma-
jority of the Independent Trustees. The terms and conditions of the New Advi-
sory Agreements, other than the parties and their dates of execution, effec-
tiveness and initial term, are substantially the same as those of the Prior Ad-
visory Agreements. The New BT Advisory Agreements and the New MGI Advisory
Agreements will be between the Trust and either Bankers Trust or MGI, as appli-
cable; the New Sub-advisory Agreements will be among the Trust, MGI (as Advis-
er) and either Bankers Trust or MGIS, as applicable (as subadviser). 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 Sub-advisory 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 Sub-advisory Agreements, as applicable, are implemented. MGI, as Adviser,
and Bankers Trust or MGIS, as applicable, as subadviser, would perform its re-
spective advisory duties and be paid its respective advisory fees only upon im-
plementation 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 invest-
ment 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 port-
folios. Subject to the supervision and control of the Portfolios' Boards, each
of the
14
<PAGE>
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 "Ex-
change Act"), the Act and the Investment Advisers Act of 1940, as amended (the
"Advisers Act"), and will conduct its activities under the New Advisory Agree-
ments in accordance with applicable regulations of the Board of Governors of
the Federal Reserve System pertaining to the investment advisory activities of
bank holding companies and their subsidiaries, (b) provide the services ren-
dered by it in accordance with the applicable Portfolio's investment objec-
tives and policies as stated in Prospectuses and Statements of Additional In-
formation of the relevant Funds, as from time to time in effect, and the Port-
folios' 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 de-
terminations for each Portfolio either directly with the issuer or with any
broker or dealer selected by it, (d) determine from time to time what securi-
ties or other investments will be purchased, sold or retained by each Portfo-
lio, and (e) maintain books and records with respect to the securities trans-
actions 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 Portfo-
lios 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 Advi-
sory 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 applica-
ble, is paid a fee under the New Advisory Agreements for its services, calcu-
lated daily and paid monthly, equal, on an annual basis, to the following:
15
<PAGE>
<TABLE>
<CAPTION>
Advisory
Portfolio Agreement Fee*
--------------------------------------------------
<S> <C>
Cash Portfolio 0.15%
Intermediate Portfolio 0.40%
Tax Free Portfolio 0.15%
NY Portfolio 0.15%
Treasury Portfolio 0.15%
International Portfolio 0.65%
Capital Portfolio 0.65%
Asset Portfolio 0.65%
Asset Portfolio II 0.65%
Asset Portfolio III 0.65%
Pacific Portfolio 0.75%
Latin American Portfolio 1.00%
Small Cap Portfolio 0.65%
PreservationPlus Income Portfolio 0.70%
</TABLE>
- -----------
* Pursuant to the Expense Limitation Agreement between Bankers Trust and the
Trust, the total fund operating expenses for each Fund (except for
PreservationPlus Income Fund and Treasury Fund) are capped for the current
fiscal year. The fee rates shown do not reflect the cap.
Generally. If approved, the New Advisory Agreements, as applicable, will
each remain in effect for an initial term of two years (unless sooner terminat-
ed), and shall remain in effect from year to year thereafter if approved annu-
ally (1) by the Portfolios' Boards or by the holders of a majority of the Port-
folios' 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 Advi-
sory 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 Port-
folios) or from engaging in other activities. In addition, the Advisers are ob-
ligated to pay expenses associated with providing the services contemplated by
the New Advisory Agreements. The Portfolios bear certain other expenses includ-
ing the fees of the Portfolios' Boards. The Portfolios also pay any extraordi-
nary expenses incurred.
16
<PAGE>
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 Agree-
ments relate, provided that nothing therein shall be deemed to protect or pur-
port 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 per-
formance 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 originat-
ing loans and other forms of credit, accepting deposits and arranging
financings. Bankers Trust also engages in trading currencies, securities, de-
rivatives and commodities. In addition to providing investment advisory serv-
ices to the Portfolios, Bankers Trust serves as investment adviser to 31 other
investment companies and as investment subadviser to 34 other investment com-
panies. (See Annex II for a list of those investment companies that Bankers
Trust advises that have investment objectives similar to those of the Portfo-
lios, together with information regarding the fees charged to those compa-
nies.) As of March 31, 1999, Bankers Trust had over $313 billion of assets un-
der management, including approximately $16.2 million of assets in the Portfo-
lios.
The names, business addresses and principal occupations of the current
chief executive officer and directors of Bankers Trust are set forth below.
<TABLE>
<CAPTION>
Name and Address Principal Occupation
- -------------------------------------------------------------------
<S> <C>
Josef Ackermann Chairman of the Board, Chief Executive
Deutsche Bank A.G. Officer and President, Bankers Trust
Taunusanlage 12 Company; Member, Board of Managing
D-60262 Frankfurt am Main Directors, Deutsche Bank A.G.
Federal Republic of Germany
Hans Angermueller Shearman & Sterling, of counsel
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
George B. Beitzel Director, Computer Task Group, Inc.;
29 King Street Director, Phillips Petroleum Company;
Chappaqua, NY 10514-3432 Director, TIG Holdings, Inc.
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
Name and Address Principal Occupation
- ---------------------------------------------------------------------
<S> <C>
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
- ---------------------------------------------------------------------
</TABLE>
In addition to serving as investment adviser to the Portfolios, Bankers
Trust also serves as administrator, transfer agent and custodian of each Port-
folio 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
each Fund's most recently completed fiscal year.)
MGI. MGI is a corporation organized under the laws of the State of Dela-
ware and is a registered investment adviser under the Advisers Act. It is lo-
cated at 885 Third Avenue, 32nd Floor, New York, NY 10022. MGI provides a full
range of investment advisory services to institutional clients. MGI serves as
investment adviser to ten other investment companies and as investment
subadviser to five other investment companies. MGI is a subsidiary of Morgan
Grenfell Asset Management Ltd. ("MGAM"), located at 20 Finsbury Circus, Lon-
don, 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 world-
wide. (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.)
18
<PAGE>
The names, business addresses and principal occupations of the current di-
rectors and chief executive officer of MGI are set forth below. Except as oth-
erwise indicated, the business address of the individuals named below is 885
Third Avenue, 32nd Floor, New York, NY 10022 and their positions at MGI con-
stitute their principal occupation.
<TABLE>
<CAPTION>
Name and Address Principal Occupation
- -------------------------------------------------------------------
<S> <C>
Richard Marin President and Director, Morgan Grenfell
280 Park Avenue Inc.; Managing Director, Bankers Trust
New York, NY 10017 Company
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, Bankers Trust Company
280 Park Avenue
New York, NY 10017
- -------------------------------------------------------------------
</TABLE>
MGIS. MGIS is located at 20 Finsbury Circus, London, England and also is
registered as an investment adviser with the Commission. MGIS provides a full
range of international investment advisory services to institutional clients.
MGIS serves as investment adviser to 13 other investment companies. MGIS is a
subsidiary of MGAM. As of June 30, 1999, MGIS managed approximately $12.1 bil-
lion in assets. (See Annex II for a list of those investment companies that
MGIS advises that have investment objectives similar to those of the Portfo-
lios, together with the information regarding the fees charged to those compa-
nies.)
19
<PAGE>
The names, business addresses and principal occupations of the current di-
rectors and chief executive officer of MGIS are set forth below. Except as
otherwise indicated, the business address of the individuals named below is 20
Finsbury Circus, London, England and their positions at MGIS constitute their
principal occupation.
<TABLE>
<CAPTION>
Name and Address Principal Occupation
- ----------------------------------------------------------
<S> <C>
Neil P. Jenkins Chief Executive and Director, Morgan
Grenfell Investment Services Ltd.; Vice
President, Morgan Grenfell Investment
Trust
Ian D. Kelson Director, Morgan Grenfell Investment
Services Ltd. and Morgan Grenfell Asset
Management Ltd.
Alexander Tedder Director and Fund Manager, Morgan
Grenfell Investment Services Ltd.
Richard C. Wilson Director and Fund Manager, Morgan
Grenfell Investment Services Ltd.
- ----------------------------------------------------------
</TABLE>
Section 15(f) of the Act
Section 15(f) of the Act provides that when a change of control of an in-
vestment adviser to an investment company occurs, the investment adviser or
any of its affiliated persons may receive an amount or benefit in connection
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 of other property to, or on
behalf of the investment company (other than fees for bona fide brokerage and
principal underwriting services). The Advisers have advised the 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 rele-
vant factors and, after consultation with counsel, the Boards determined to
approve the New Advisory Agreements.
20
<PAGE>
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 author-
ities. On July 26, 1999, the federal criminal proceedings were concluded with
Bankers Trust's formal sentencing. The events leading up to the guilty pleas
did not arise out of the investment advisory or mutual fund management activi-
ties of Bankers Trust or its affiliates.
As a result of the plea, absent an order from the Commission, Bankers Trust
would not be able to continue to provide investment advisory services to the
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 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 Ad-
visory 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
21
<PAGE>
provide to the Portfolios; the quality of the personnel of Bankers Trust; Bank-
ers 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 ob-
tained from Deutsche Bank, MGI and MGIS such information as they deemed reason-
ably necessary to approve MGI and MGIS as investment advisers to the Portfo-
lios. Representatives of Deutsche Bank, MGI and MGIS made detailed presenta-
tions at the July 15th and July 27th meetings with respect to, among other fac-
tors, the organizational structure, assets under management, asset management
services, financial conditions and business plans of MGI and MGIS. 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 Agree-
ments. The Boards also considered a number of other factors, including the ca-
pacity of MGI and MGIS to perform their duties under the New Advisory Agree-
ments; the high degree of continuity of investment management personnel ex-
pected to be available to the Portfolios because most of the personnel of Bank-
ers Trust who provided services under the Prior Management Agreements will be
employed by MGI; the financial standings of Deutsche Bank, MGI and MGIS; the
benefits to the Funds and Portfolios from technological advances being insti-
tuted by Deutsche Bank on a world-wide basis; the experience and expertise of
MGI and MGIS as investment advisers, as reflected in their amounts 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 sharehold-
ers 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 effi-
ciency 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. With respect to
MGIS, the Boards also particularly considered MGIS' experience in managing as-
sets in the United Kingdom for U.S. registered funds and the familiarity of
MGIS with U.S. compliance requirements.
The Boards were apprised that the deferral in implementing the New MGI Ad-
visory Agreements is needed to permit Deutsche Bank a sufficient amount of
22
<PAGE>
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 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 dis-
cussed above and the exemptive relief sought by Bankers Trust.
Therefore, after careful consideration, the Boards, including the Indepen-
dent 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 appli-
cable 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 ap-
proved by the shareholders, the applicable New BT Advisory Agreement(s), if
they have been approved by the shareholders, will continue in effect in accor-
dance 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 man-
ner 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.
23
<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 succes-
sors have been duly elected and qualified or until their earlier resignation or
removal. The Trustee Nominees were recently selected by the Independent Trust-
ees of the Boards and nominated by the full Boards at a meeting held on July
27, 1999. The names and ages of the Trustee Nominees, their principal occupa-
tions during the past five years and certain of their other affiliations are
provided below. Of the Trustee Nominees, Charles P. Biggar is currently a
Trustee of the Portfolios and S. Leland Dill and Philip Saunders, Jr. are cur-
rently Trustees of both the Trust and 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 Spe-
cial 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 name, age, 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 Principal Occupations During
Name and Age Trust/Portfolios Last Five Years
- -----------------------------------------------------------------------
<S> <C> <C>
Charles P. Biggar(1)+ Trustee of Retired; formerly, Vice
Age: 68 Portfolios President of International
since Business Machines ("IBM") and
inception of President of the National
each Portfolio Services and Field Engineering
Divisions of IBM.
S. Leland Dill+ Trustee of Retired; Director, Coutts
Age: 69 Trust since (U.S.A.) International;
1986 and Trustee, Phoenix-Zweig Trust(4)
Trustee of and Phoenix-Euclid Market
Portfolios Neutral Fund(4); former Partner
since of KPMG Peat Marwick; Director,
inception of Vintners International Company
each Portfolio Inc.; Director, Coutts Trust
Holdings Ltd.; Director, Coutts
Group; General Partner,
Pemco(4).
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
Position with Principal Occupations During
Name and Age Trust/Portfolios Last Five Years
- --------------------------------------------------------------------------
<S> <C> <C>
Martin J. Gruber(2) Nomura Professor of Finance,
Age: 62 Leonard N. Stern School of
Business, New York University
(since 1964); Trustee, TIAA(4);
Trustee, SG Cowen Mutual
Funds(4); Trustee, Japan Equity
Fund(4); Trustee, Taiwan Equity
Fund(4).
Richard Hale* Managing Director, Deutsche
Age: 54 Asset Management; Director,
Flag Investors Fund(4);
Managing Director, BT Alex.
Brown Incorporated; Director
and President, Investment
Company Capital Corp.
Richard J. Herring(2) Jacob Safra Professor of
Age: 53 International Banking,
Professor of Finance and Vice
Dean, The Wharton School,
University of Pennsylvania
(since 1972).
Bruce E. Langton(2) Retired; Trustee, Allmerica
Age: 68 Financial Mutual Funds (1994 to
present); Member, Pension &
Thrift Plans and Investment
Committee, Unilever U.S.
Corporation (1989 to
present)(3); Director, TWA
Pilots Directed Account Plan
and 401K Plan (1988 to
present)(4).
Philip Saunders, Jr.(1)+ Trustee of Principal, Philip Saunders
Age: 63 Trust since Associates (Economic and
1986 and Financial Analysis); Former
Trustee of Director, Financial Industry
Portfolios Consulting, Wolf and Company;
since President, John Hancock Home
inception of Mortgage Corporation; Senior
each Portfolio Vice President of Treasury and
Financial Services, John
Hancock Mutual Life Insurance
Company, Inc.
Harry Van Benschoten(2) Retired; Director, Canada Life
Age: 71 Insurance Corporation of New
York.
</TABLE>
- -----------
* "Interested Person" within the meaning of Section 2(a)(19) of the Act. Mr.
Hale is a Managing Director of Deutsche Asset Management, the U.S. asset
management unit of Deutsche Bank and its affiliates.
+ Messrs. Dill and Saunders are members of the Audit Committee of the Trust
and Messrs. Biggar, Dill and Saunders are members of the Audit Committee of
the Portfolios.
(1) Holds one other trusteeship in the Bankers Trust Fund Complex, as defined
herein.
(2) Holds two other trusteeships in the Bankers Trust Fund Complex, as defined
herein.
(3) A publicly held company with securities registered pursuant to Section 12
of the Exchange Act.
(4) An investment company registered under the Act.
25
<PAGE>
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 nom-
inees 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 Board of BT Investment Portfolios held six meetings, the
other Boards held four meetings and the Audit Committees held two meetings. No
Trustee attended less than 75% of the applicable meetings.
If Richard Hale is elected, he will not be a member of the Audit Commit-
tee.
The following table sets forth the compensation received by the Trustee
Nominees for their services to the Trust, Portfolios and Bankers Trust Fund
Complex (as defined below) during the calendar year ended December 31, 1998.
In addition to the fees listed below, the Trustees are also reimbursed for all
reasonable expenses incurred during the execution of their duties for the
Trust, Portfolios and Bankers Trust Fund Complex.*
<TABLE>
<CAPTION>
Aggregate Estimated
Aggregate Compensation Pension or Retirement Annual Total Compensation
Compensation from the Benefits Accrued as Benefits upon From the Complex*
Name of Trustee from the Trust Portfolios Part of Trust Expenses Retirement Paid to Trustees
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Charles P. Biggar $11,107 $25,143 N/A N/A $36,250
S. Leland Dill $14,485 $3,882 N/A N/A $36,250
Martin J. Gruber N/A 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 N/A N/A N/A $35,000
Philip Saunders, Jr. $14,582 $3,910 N/A N/A $36,250
Harry Van Benschoten N/A 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 Pyramid Mutual Funds, BT Adviser Funds
and BT Insurance Funds Trust.
26
<PAGE>
The following table sets forth the names, ages, position with the Trust and
length of service in such position, and principal occupations during the past
five years of the officers of the Trust.
<TABLE>
<CAPTION>
Position with Trust and Principal
Name and Age Occupations
- -------------------------------------------------------------
<S> <C>
John A. Keffer President and Chief Executive Officer since
Age: 57 1998; President, Forum Financial Group
L.L.C. and its affiliates; President, ICC
Distributors, Inc. *
Daniel O. Hirsch Secretary since 1998; Director, Deutsche
Age: 45 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 and
Age: 41 Department Head, Deutsche Asset Management
since 1998; Senior Manager,
PricewaterhouseCoopers LLP 1993-98.
</TABLE>
- -----------
* Underwriter/distributor for the Trust. Mr. Keffer owns 100% of the shares of
ICC Distributors, Inc.
Recommendation of the 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 ap-
proved the nomination of the Trustee Nominees. In reaching this conclusion, the
Boards obtained from the Trustee Nominees such information as they deemed rea-
sonably 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 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 Indepen-
dent 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.
27
<PAGE>
PROPOSAL III
RATIFICATION OF THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT
ACCOUNTANTS FOR ALL FUNDS AND PORTFOLIOS OTHER THAN THE PRESERVATIONPLUS INCOME
FUND AND PRESERVATIONPLUS INCOME PORTFOLIO
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 incep-
tion 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 Meet-
ing and, thus, are not expected to make a statement; however, one or more rep-
resentatives will be available by telephone to respond to appropriate questions
posed by shareholders or management.
Therefore, after careful consideration, the Boards, including the Indepen-
dent 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.
28
<PAGE>
PROPOSAL IV
RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP AS INDEPENDENT ACCOUNTANTS
FOR PRESERVATIONPLUS INCOME FUND AND PRESERVATIONPLUS INCOME PORTFOLIO
The Boards of the Trust and PreservationPlus Portfolio, including a major-
ity 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 finan-
cial interest in PreservationPlus Fund or PreservationPlus Portfolio. Repre-
sentatives 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 ques-
tions posed by shareholders or management.
Therefore, after careful consideration, the Boards, including the Indepen-
dent 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 Advi-
sory Agreements requires the affirmative vote of a "majority" of the outstand-
ing shares of the Portfolio's various feeder funds as shareholders of the Port-
folio. "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 speci-
fied 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
29
<PAGE>
of shareholders of all the Portfolios' various feeder funds voting collective-
ly. 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 inde-
pendent 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 affirma-
tive vote of a majority of the votes cast in person or by proxy at the special
meetings of shareholders of each Portfolio's various feeder funds. Because ab-
stentions 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 Spe-
cial Meeting. Should any other matter properly come before the Special Meeting,
it is the intention of the persons named in the accompanying Proxy to vote the
Proxy in accordance with their judgment on such matters.
SUBMISSION OF SHAREHOLDER PROPOSALS
The Funds do not hold regular shareholders' meetings. Shareholders wishing
to submit proposals for inclusion in a proxy statement for a subsequent share-
holders' meeting should send their written proposals to the Secretary of the
Trust at the address set forth on the cover of this Proxy Statement.
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 securi-
ties (as defined in the Act) may require the calling of a meeting of sharehold-
ers for the purpose of voting on the removal of any Trustee of the Fund. Meet-
ings of shareholders for any other purpose also shall be called by the applica-
ble Board of Trustees when requested in writing by shareholders holding at
least 10% of the shares then outstanding.
30
<PAGE>
IF YOU HAVE ANY QUESTIONS CONCERNING THE PROXY STATEMENT OR THE PROCEDURES
TO BE FOLLOWED TO EXECUTE AND DELIVER A PROXY, PLEASE CONTACT SHAREHOLDER COM-
MUNICATIONS CORPORATION AT 1-800-732-6168.
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE SPECIAL MEETING AND WHO
WISH TO HAVE THEIR SHARES VOTED ARE REQUESTED TO DATE AND SIGN THE ENCLOSED
PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE, UNLESS THEY ARE VOTING BY
TELEPHONE OR THROUGH THE INTERNET.
By Order of the Board of Trustees,
/s/ Daniel O. Hirsch
Daniel O. Hirsch, Secretary
August 23, 1999
THE BOARD OF TRUSTEES OF THE TRUST HOPES THAT SHAREHOLDERS WILL ATTEND THE
SPECIAL MEETING. WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE,
DATE, SIGN AND RETURN EACH ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE (UNLESS
YOU ARE VOTING BY TELEPHONE OR THROUGH THE INTERNET).
31
<PAGE>
Annex I
(i) 5% Shareholders
CASH FUND:
<TABLE>
<CAPTION>
Shares
Beneficially Percent Ownership
Name and Address of Beneficial Owner Owned of Outstanding Shares
- -----------------------------------------------------------------------------
<S> <C> <C>
Circuit City Credit Card Master Trust 231,000,002.9800 59.021
94-2 Principal Funding Account
9954 Mayland Drive
Richmond, VA 23233-1454
Private Bank Sweep 66,698,128.8900 17.042
Investment Advisory--Linda Anderson
1 BT Plaza, 17th Floor
New York, NY 10015
Private Bank Sweep 46,779,048.3300 11.952
Custody--Linda Anderson
1 BT Plaza, 17th Floor
New York, NY 10015
- -----------------------------------------------------------------------------
INTERMEDIATE FUND:
<CAPTION>
Shares
Beneficially Percent Ownership
Name and Address of Beneficial Owner Owned of Outstanding Shares
- -----------------------------------------------------------------------------
<S> <C> <C>
Bankers Trust Company 278,551.5320 14.129
FBO 2300414040
PO Box 9005
Church Street Station
New York, NY 10008
Bankers Trust Company 116,112.5690 5.889
FBO 2562162424
PO Box 9005
Church Street Station
New York, NY 10008
- -----------------------------------------------------------------------------
TAX FREE FUND:
<CAPTION>
Shares
Beneficially Percent Ownership
Name and Address of Beneficial Owner Owned of Outstanding Shares
- -----------------------------------------------------------------------------
<S> <C> <C>
Private Bank Sweep 65,595,452.2800 41.515
Investment Advisory--Linda Anderson
1 BT Plaza, 17th Floor
New York, NY 10015
Private Bank Sweep Custody 59,438,538.6800 37.618
Attn: Linda Anderson
1 BT Plaza, 17th Floor
New York, NY 10015
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Beneficial Shares Beneficially Percent Ownership
Owner Owned of Outstanding Shares
- -------------------------------------------------------------------------
<S> <C> <C>
INFID & Co 15,689,611.3900 9.930
c/o Bankers Trust Company
PO Box 9005
Church Street Station
New York, NY 10008
- -------------------------------------------------------------------------
NY FUND:
<CAPTION>
Name and Address of Beneficial Shares Beneficially Percent Ownership
Owner Owned of Outstanding Shares
- -------------------------------------------------------------------------
<S> <C> <C>
Private Bank Sweep Custody 29,109,072.3600 31.777
Attn: Linda Anderson
1 BT Plaza, 17th Floor
New York, NY 10015
Private Bank Sweep 24,945,329.5800 27.232
Investment Advisory--Linda
Anderson
1 BT Plaza, 17th Floor
New York, NY 10015
Core Mark International Inc. 8,459,716.8900 9.235
Escrow Agreement for Jupiter
Partners
c/o Jupiter Partners LP
30 Rockefeller Plaza, STE
4525
New York, NY 10112-4599
Frank N. Newman 7,408,188.1700 8.087
c/o Bankers Trust Company
130 Liberty Street, 34th
Floor
New York, NY 10006-1105
- -------------------------------------------------------------------------
TREASURY FUND:
<CAPTION>
Name and Address of Beneficial Shares Beneficially Percent Ownership
Owner Owned of Outstanding Shares
- -------------------------------------------------------------------------
<S> <C> <C>
Private Bank Sweep 68,959,031.6400 15.534
Investment Advisory--Linda
Anderson
1 BT Plaza, 17th Floor
New York, NY 10015
Vendee 1992-1/Master Reserve 39,493,941.4900 8.896
c/o Bankers Trust Company
3 Park Plaza, 16th Floor
Irving, CA 92614-8505
Private Bank Sweep 31,849,344.5400 7.174
Investment Advisory--Linda
Anderson
1 BT Plaza, 17th Floor
New York, NY 10015
</TABLE>
- --------------------------------------------------------------------------------
I-2
<PAGE>
INTERNATIONAL FUND:
<TABLE>
<CAPTION>
Name and Address of Shares Beneficially Percent Ownership
Beneficial Owner Owned of Outstanding Shares
- ----------------------------------------------------------------------------
<S> <C> <C>
Charles Schwab & Co 26,418,757.1410 34.694
Omnibus Account Reinvest
101 Montegomery Street
San Francisco, CA 94104
National Financial Services Corp. 10,123,017.1080 13.294
for exclusive benefit our
customers
Attn: Mutual Funds
Church Street Station
PO Box 3908
New York, NY 10008-3908
- ----------------------------------------------------------------------------
</TABLE>
CAPITAL FUND:
<TABLE>
<CAPTION>
Name and Address of Shares Beneficially Percent Ownership
Beneficial Owner Owned of Outstanding Shares
- ----------------------------------------------------------------------------
<S> <C> <C>
N/A N/A N/A
- ----------------------------------------------------------------------------
</TABLE>
LONG RANGE FUND:
<TABLE>
<CAPTION>
Name and Address of Shares Beneficially Percent Ownership
Beneficial Owner Owned of Outstanding Shares
- -----------------------------------------------------------------------------
<S> <C> <C>
Partnershare Plan of Bankers Trust 3,402,970.1100 29.026
Co
Attn: Justin Lake
100 Plaza One
Jersey City, NJ 07311-3901
Bankers Trust Co. as Trustee for 2,336,327.6890 19.928
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 919,642.5630 7.844
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 823,322.9480 7.023
Millenium Chemicals 401(k)
Attn: Linda Castello
200 International Circle, Ste
2000
Hunt Valley, MD 21030-1336
</TABLE>
I-3
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Beneficial Shares Beneficially Percent Ownership
Owner Owned of Outstanding Shares
- -----------------------------------------------------------------------------
<S> <C> <C>
Bankers Trust Company 814,332.9390 6.946
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
Bankers Trust Co. as Trustee for 698,035.4540 5.954
Grove US
LLC Retirement Savings and
Investment Place
565 Buchanan Trail East
Shady Grove, PA 17256
State Street Bank and Trust 653,561.4590
Custody of Northrop Grumman ESSD
Savings
Attn: Annette Johnson
34 Exchange Place, # 6-3064
Jersey City, NJ 07302-3885
- -----------------------------------------------------------------------------
MID RANGE FUND:
<CAPTION>
Name and Address of Beneficial Shares Beneficially Percent Ownership
Owner Owned of Outstanding Shares
- -----------------------------------------------------------------------------
<S> <C> <C>
Charles Schwab & Co 1,666,604.9120 21.674
Omnibus Account Reinvest
Attn: Mutual Fund Acct. Mgmt.
Team
101 Montegomery Street
San Francisco, CA 94104
Bankers Trust Company 985,563.4470 12.817
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
Bankers Trust Co. as Trustee for 867,083.3450 11.276
Westinghouse
Savannah River Inc.
Savings and Investment Plan
34 Exchange Pl.--Mail Stop 3064
Jersey City, NJ 07302-3885
Partnershare Plan of Bankers Trust 767,109.0270 9.976
Co
Attn: Justin Lake
100 Plaza One
Jersey City, NJ 07311-3901
</TABLE>
I-4
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Beneficial Shares Beneficially Percent Ownership
Owner Owned of Outstanding Shares
- ------------------------------------------------------------------------------
<S> <C> <C>
National Financial Services Corp. 691,362.8420 8.991
for exclusive benefit our
customers
Attn: Mutual Funds
Church Street Station
PO Box 3908
New York, NY 10008-3908
Bankers Trust Co. as Trustee for 581,492.1820 7.562
Millenium Chemicals 401(k) Attn:
Linda Castello 200 International
Circle, Ste 2000 Hunt Valley, MD
21030-1336
Bankers Trust Co. as Trustee for 426,911.9070 5.552
Hanson Industries Plan 401(k)
Attn: Marisa Depp, Mail Stop 3055
34 Exchange Pl., 5th Floor Jersey
City, NJ 07302-3885
State Street Bank and Trust Custody 422,248.7450 5.491
of Northrop Grumman ESSD Savings
Attn: Annette Johnson 34 Exchange
Place, # 6-3064 Jersey City, NJ
07302-3885
- ------------------------------------------------------------------------------
SHORT RANGE FUND:
<CAPTION>
Name and Address of Beneficial Shares Beneficially Percent Ownership
Owner Owned of Outstanding Shares
- ------------------------------------------------------------------------------
<S> <C> <C>
Bankers Trust Company 908,318.6260 19.963
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
Bankers Trust Co. as Trustee for 836,702.5660 18.389
Grove US LLC Retirement Savings
and Investment Place
565 Buchanan Trail East
Shady Grove, PA 17256
Partnershare Plan of Bankers Trust 495,631.5430 10.893
Co.
Attn: Justin Lake
100 Plaza One
Jersey City, NJ 07311-3901
Bankers Trust Co. as Trustee for 452,202.7400 9.939
Westinghouse Savannah River Inc.
Savings and Investment Plan
34 Exchange Pl.--Mail Stop 3064
Jersey City, NJ 07302-3885
</TABLE>
I-5
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Beneficial Shares Beneficially Percent Ownership
Owner Owned of Outstanding Shares
- -----------------------------------------------------------------------------
<S> <C> <C>
State Street Bank and Trust 298,753.8640 6.566
Custody of Northrop Grumman ESSD
Savings Attn: Annette Johnson
34 Exchange Place, #6-3064
Jersey City, NJ 07302-3885
Charles Schwab & Co. 260,134.1790 5.717
Omnibus Account Reinvest
Attn: Mutual Fund Acct. Mgmt.
Team
101 Montegomery Street
San Francisco, CA 94104
- -----------------------------------------------------------------------------
PACIFIC FUND:
<CAPTION>
Name and Address of Beneficial Shares Beneficially Percent Ownership
Owner Owned of Outstanding Shares
- -----------------------------------------------------------------------------
<S> <C> <C>
Richard P. Small 303,028.2190 15.315
PO Box 52566
Tulsa, OK 74152-0566
Charles Schwab & Co. 241,514.9290 12.206
Omnibus Account Reinvest
Attn: Mutual Fund Acct. Mgmt.
Team 333-8 101 Montegomery
Street
San Francisco, Ca 94104
FTC & Co. 237,534.1950 12.005
Attn: Datalynx-House Account
PO Box 173736
Denver, CO 80217-3736
- -----------------------------------------------------------------------------
LATIN AMERICAN FUND:
<CAPTION>
Name and Address of Beneficial Shares Beneficially Percent Ownership
Owner Owned of Outstanding Shares
- -----------------------------------------------------------------------------
<S> <C> <C>
Charles Schwab & Co. 231,519.2060 39.230
Omnibus Account Reinvest
Attn: Mutual Fund Acct. Mgmt.
Team
101 Montegomery Street
San Francisco, CA 94104
BT Alex Brown Incorporation 79,302.1410 13.437
FBO 235-28930-16
PO Box 1346
Baltimore, MD
Nat'l Financial Services Corp. 34,735.5420 5.886
for Excl Benefit Our Customers
Attn: Mutual Funds
Church Street Station
PO Box 3908
New York, NY 10008-3908
- -----------------------------------------------------------------------------
</TABLE>
I-6
<PAGE>
SMALL CAP FUND:
<TABLE>
<CAPTION>
Name and Address of Beneficial Shares Beneficially Percent Ownership
Owner Owned of Outstanding Shares
- -----------------------------------------------------------------------------
<S> <C> <C>
Bankers Trust Co. as Trustee for 3,026,243.3730 30.604
Westinghouse Savannah River Inc.
Savings and Investment Plan
34 Exchange Pl.--Mail Stop 3064
Jersey City, NJ 07302-3885
- -----------------------------------------------------------------------------
PRESERVATIONPLUS INCOME FUND:
<CAPTION>
Name and Address of Beneficial Shares Beneficially Percent Ownership
Owner Owned of Outstanding Shares
- -----------------------------------------------------------------------------
<S> <C> <C>
INV Fiduciary Trust Co 2,044.0570 42.963
IRA A/C Katarina Bagar
301 West 45th Street, Apt. 17K
New York, NY 10036-3837
INV Fiduciary Trust Co 1,202.5190 25.275
IRA R/O Janice A. Mohs
104 Westminister Blvd.
Goose Creek, SC 29445-4872
INV Fiduciary Trust Co 546.4680 11.486
IRA A/C Harry W. Weisberg
405 Bayberry Ct.
Englishtown, NJ 07726-4740
INV Fiduciary Trust Co 546.4680 11.486
IRA A/C Marilyn Weisberg
405 Bayberry Ct.
Englishtown, NJ 07726-4740
</TABLE>
(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.
I-7
<PAGE>
Annex II
BT INVESTMENT FUNDS
<TABLE>
<CAPTION>
Advisory
Fee as a
Net Assets (As of Most Percentage of
Recently Completed Average Daily
Fiscal Year) Net Assets
- --------------------------------------------------------------------------------
<S> <C> <C>
Cash Management Portfolio:
Includes the following feeder funds: 0.15%
BT Investment Cash Management Fund $232,585,828.00
BT Investment Money Market Fund $436,604,000.00
BT Institutional Cash Management Fund $2,347,142,000.00
Institutional Cash Reserves $2,367,776,951.00
Money Market ProFund $204,909,098.00
Treasury Money Portfolio:
Includes the following feeder funds: 0.15%
BT Investment Treasury Money Fund $308,910,930.00
BT Institutional Treasury Money Fund $1,728,834,000.00
Intermediate Tax Free Portfolio:
Includes the following feeder fund: 0.40%
BT Investment Intermediate Tax Free
Fund $24,071,986.00
Morgan Grenfell Municipal Bond Fund $668,241,541.00 0.40%
Morgan Grenfell Short-Term Municipal Bond
Fund $92,441,544.00 0.40%
Pace Municipal Fixed Income Investment
Fund $56,768,000.00 0.20%
NY Tax Free Money Portfolio:
Includes the following feeder fund: 0.15%
BT Investment NY Tax Free Money Fund $77,839,230.00
Tax Free Money Portfolio:
Includes the following feeder fund: 0.15%
BT Investment Tax Free Money Fund $201,094,223.00
International Equity Portfolio:
Includes the following feeder funds: 0.65%
BT Investment International Equity Fund $1,251,580,000.00
BT Institutional International Equity
Fund $564,912,810.00
Security Equity Fund--International
Series (Security Benefit) $5,116,633.76 NOTE H
Style Select Series, Inc.--International
Equity Portfolio (Sun America) $38,380,000.00 At an annual
rate of 0.60%
Latin America Equity Portfolio:
Includes the following feeder fund: 1.00%
BT Investment Latin America Equity Fund $6,256,338.00
Pacific Basin Equity Portfolio
Includes the following feeder fund: 0.75%
BT Investment Pacific Basin Equity Fund $4,268,200.00
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
Advisory
Fee as a
Net Assets (As of Most Percentage of
Recently Completed Average Daily
Fiscal Year) Net Assets
- -------------------------------------------------------------------------------
<S> <C> <C>
Season Series Trust--International Equity
Portfolio (Sun America) $5,069,965.31 .15%--first
$500 million
0.05% over
$500 million
Global Emerging Markets Equity Portfolio
Includes the following feeder fund: 1.10%
BT Investment Global Emerging Markets
Equity Fund $1,967,543.00
Morgan Grenfell European Equity Growth
Fund $48,978,626.00 0.70%
Morgan Grenfell International Small Cap
Equity Fund $25,597,321.00 1.00%
Morgan Grenfell European Small Cap Equity
Fund $2,707,986.00 1.00%
Morgan Grenfell Emerging Markets Equity
Fund $150,296,502.00 1.00%
Capital Appreciation Portfolio:
Includes the following feeder fund: 0.65%
BT Investment Capital Appreciation Fund $25,496,736.00
Small Cap Portfolio:
Includes the following feeder fund: 0.65%
BT Investment Small Cap Fund $172,310,059.00
BT Investment Equity Appreciation Fund $122,077,106.00 0.65%
American General Series Portfolio Company
3--Small Cap Value Funds (VALIC)(a) $3,273,066.27 NOTE A
Season Series Trust--Large Cap Growth
Portfolio (Sun America)(a) $5,142,375.93 0.10%--first
$500 million
0.03%--over
$500 million
Season Series Trust--Large-Cap Composite
Portfolio (Sun America)(a) $5,308,328.33 0.05%--first
$500 million
0.03%--over
$500 million
Season Series Trust--Large-Cap Value
Portfolio (Sun America)(a) $5,470,359.19 0.10%--first
$500 million
0.03%--over
$500 million
</TABLE>
- -----------
(a) Bankers Trust acts as subadviser of the portion of the portfolio of this
fund which invests according to an investment strategy that seeks to repli-
cate a securities index.
II-2
<PAGE>
<TABLE>
<CAPTION>
Advisory
Fee as a
Net Assets (As of Most Percentage of
Recently Completed Average Daily
Fiscal Year) Net Assets
- --------------------------------------------------------------------------------
<S> <C> <C>
Season Series Trust--Mid-Cap Growth
Portfolio (Sun America)(a) $5,380,426.86 0.10%--first
$500 million
0.03%--over
$500 million
Season Series Trust--Mid-Cap Value
Portfolio $5,504,588.18 0.10%--first
(Sun America)(a) $500 million
0.03%--over
$500 million
Season Series Trust--Small-Cap Portfolio
(Sun America)(a) $5,350,213.30 0.07%--first
$500 million
0.03%--over
$500 million
Morgan Grenfell Smaller Companies Fund $6,513,010.00 1.00%
Morgan Grenfell Micro Cap Fund $17,485,411.00 1.50%
Morgan Grenfell Small Cap Fund, Inc. $116,599,100.00 1.00%
Morgan Grenfell International Select
Equity Fund $57,890,123.00 0.70%
Asset Management Portfolio
Includes the following feeder fund: 0.65%
BT Investment Lifecycle Long Range Fund $133,549,990.00
BT Institutional Asset Management Fund $570,120,359.00
Asset Management Portfolio II
Includes the following feeder fund: 0.65%
BT Investment Lifecycle Mid Range Fund $77,555,590.00
Asset Management Portfolio III
Includes the following feeder fund: 0.65%
BT Investment Lifecycle Short Range Fund $44,531,798.00
Morgan Grenfell Fixed Income Fund $1,245,563,331.00 0.40%
Morgan Grenfell Short-Term Fixed Income
Fund $23,894,825.00 0.40%
Morgan Grenfell Fixed Income Portfolio $111,854,000.00 0.275%
Morgan Grenfell Limited Duration Municipal
Bond Portfolio $48,037,000.00 0.20%
Morgan Granfell Intermediate Term
Municipal Bond Portfolio $116,854,000.00 0.275%
EAFE(R) Equity Index Portfolio
Includes the following feeder funds: 0.15%
BT EAFE(R) Equity Index Fund $40,456,887.00
BT Insurance EAFE(R) Equity Index Fund $35,956,000.00 0.45%
EQ Advisors Trust--International Equity
Index Portfolio (Equitable) $62,195,249.46 0.15%
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
Advisory
Fee as a
Net Assets (As of Most Percentage of
Recently Completed Average Daily
Fiscal Year) Net Assets
- -------------------------------------------------------------------------------
<S> <C> <C>
Small Cap Index Portfolio
Includes the following feeder funds: 0.25%
BT Small Cap Index Fund $115,475,476.00
BT Insurance Small Cap Index Fund $36,743,759.00 0.35%
American General Series Portfolio--Small
Cap Index Fund (VALIC) $223,185,980.64 NOTE B
American General Series Portfolio Company
2--Small Cap Index Fund (VALIC) $6,109,550.02 NOTE C
American General Series Portfolio Company
2--Small Cap Value Fund (VALIC) $2,904,138.62 NOTE C
EQ Advisors Trust--Small Company Index
Portoflio (Equitable) $41,807,938.79 0.05%
U.S. Bond Index Portfolio:
Includes the following feeder fund: 0.15%
BT U.S. Bond Index Fund $39,790,125.00
Season Series Trust--Diversified Fixed $5,245,870.74 0.12%--first
Income Portfolio (Sun America) $500 million
0.08%--over
$500 million
Equity 500 Index Portfolio:
Includes the following feeder funds: 0.08%
BT Institutional Equity 500 Index Fund $2,288,969,859.00
Scudder S&P 500 Index Fund $244,805,518.35
American Aadvantage S&P 500 Index Fund $322,610,586.01
USAA S&P 500 Index Fund $2,713,859,248.97
American Advantage S&P 500 Index
Mileage Fund $3,632,960.16
BT Investment Equity 500 Index Fund $929,474,411.08
Quantitative Equity Fund N/A(1) 0.50%
American Skandia Trust--AST Bankers Trust
Enhanced 500 Portfolio $452,128,871.00 NOTE D
Security Equity Fund--Enhanced Index
Series (Security Benefit) $15,785,667.21 NOTE G
BT Insurance Equity 500 Index Fund $49,691,350.00 0.20%
</TABLE>
- -----------
(1) The fund commenced operations on March 31, 1999. Accordingly, the fund does
not have a full fiscal year of operations to report.
II-4
<PAGE>
<TABLE>
<CAPTION>
Advisory
Fee as a
Net Assets (As of Most Percentage of
Recently Completed Average Daily
Fiscal Year) Net Assets
- -------------------------------------------------------------------------------
<S> <C> <C>
American General Series Portfolio--
MidCap Index Fund (VALIC) $814,774,297.65 NOTE B
American General Series Portfolio--
Stock Index Fund (VALIC) $4,624,973,419.19 NOTE B
American General Series Portfolio
Company 2--Stock Index Fund
(VALIC) $12,489,608.16 NOTE C
American General Series Portfolio
Company 2--MidCap Index Fund $6,585,995.57 NOTE C
EQ Advisors Trust--BT Equity 500
Index Portoflio (Equitable) $392,561,486.32 0.05%
Variable Insurance Products Fund
II--Index 500 Portfolio $4,624,170,180.40 At an annual
(Fidelity) rate of 0.006%
(0.6 basis points)
Fidelity Concord Street Trust--
Spartan U.S. Equity Index Fund $17,202,394,585.66 At an annual
rate of 0.006%
(0.6 basis points)
Pacific Select Fund--Equity Index
Portoflio (Pacific Mutual) $1,808,280,989.82 NOTE E
AARP U.S. Stock Index Fund
(Scudder) $464,922,428.55 NOTE F
Liquid Assets Portfolio:
Includes the following feeder
fund: 0.15%
BT Institutional Liquid Assets
Fund $3,374,159,676.00
BT Institutional Daily Assets
Fund $5,729,267,273.00 0.10%
BT Institutional Treasury Assets
Fund $488,225,501.00 0.10%
BT PreservationPlus Income
Portfolio:
Includes the following feeder
funds: 0.70%
BT PreservationPlus Income Fund $100,713.00
Security Income Fund: Capital
Preservation Series $100,713.00
SBL Fund--Series H (Security
Benefit) $10,978,410.48 NOTE G
BT PreservationPlus Portfolio:
Includes the following feeder
fund:
BT PreservationPlus Fund $232,737,181 0.20%
Morgan Grenfell High Yield Bond
Fund $326,853,026.00 0.50%
Pennsylvania Municipal Portfolio $116,854,000.00 0.20%
Morgan Grenfell Global Fixed Income
Fund $52,816,905.00 0.50%
Morgan Grenfell International Fixed
Income Fund $17,478,132.00 0.50%
Morgan Grenfell Emerging Markets
Debt Fund $304,435,589.00 1.00%
Morgan Grenfell Core Global Fixed
Income Fund $32,730,982.00 0.50%
</TABLE>
II-5
<PAGE>
NOTE A) A monthly fee computed at the annual rate of 0.03% of the average
daily net asset value of the portion of the Small Cap Value Fund portfolio that
BT manages.
NOTE B) A monthly fee computed at the annual rate of 0.03% on the first
$300 million and 0.02% on assets over $300 million for the MidCap Index Fund,
0.02% on the first $2 billion and 0.01% on assets over $2 billion for the Stock
Index Fund and 0.03% on the first $150 million and 0.02% on assets over $150
million for the Small Cap Index Fund. Notwithstanding the above provision,
VALIC is required to pay a minimum annual sub-advisory fee of $50,000 to BTC
for the Small Cap Index Fund. There are no minimum sub-advisory fees for the
Stock Index Fund, MidCap Index Fund. The Investment Sub-Advisory Agreements re-
quire that each Sub-Adviser promptly reduce its monthly fee by the amount of
any commission, tender and exchange offer solicitation fees, other fees or sim-
ilar payments received by the Sub-Adviser, or any affiliated person of the Sub-
Adviser, in connection with Sub-Advised Fund portfolio transactions.
NOTE C) A monthly fee computed at the annual rate of 0.03% of the average
daily net asset values of the portion of the Small Cap Value Fund portfolio
that BT manages. With respect to the Stock Index Fund, VALIC shall pay to Bank-
ers Trust, a monthly fee computed at the annual rate of 0.02% of the first $2
billion and 0.01% of average daily net asset values on the excess over $2 bil-
lion. VALIC shall pay Bankers Trust, a monthly fee computed at the annual rate
of 0.03% of the first $300 million and 0.02% of average daily net asset values
on the excess over $300 million of the Mid Cap Index Fund, and 0.03% of the
first $150 million and 0.02% of average daily net asset values on the excess
over $150 million of the Small Cap Index Fund.
NOTE D) An annual rate of .17% of the portion of the average daily net as-
sets of the Portfolio not in excess of $300 million; plus .13% of the portion
of the net assets over $300 million.
NOTE E) A fee is paid at the beginning of each calendar quarter, based on
an annual percentage of the combined daily net assets of the Equity Index and
Small-Cap Index Portfolios, according to the following schedule, subject to a
minimum annual fee of $100,000: 0.08% on first $100 million; 0.04% on next $100
million; 0.02% on excess.
NOTE F) The fee paid to the Sub-Adviser is calculated on a quarterly basis
and depends on the level of total assets in the AARP U.S. Stock Index Fund. The
fee rate decreases as the level of total assets for the Fund increases. The fee
rate for each level of assets is: 0.07% of the first $100 million of average
daily net assets, 0.03% of such assets in excess of $100 million, and 0.01% of
such assets in excess of $200 million with a minimum annual fee of $75,000.
II-6
<PAGE>
NOTE G) An annual rate of .20% of the combined average daily net assets of
the Enhanced Index Funds of $100 million or less; and an annual rate of .15% of
the combined average daily net assets of the Enhanced Index Funds of more than
$100 million but less than $300 million; and an annual rate of .13% of the com-
bined average daily net assets of the Enhanced Index Funds of more than $300
million.
Subject to the following minimum fees: (I) in the first year from the date
the Enhanced Index Series of Security Equity Fund is seeded (the "Seeding
Date"), no minimum fee; (ii) in the second year from the Seeding Date, $100,000
minimum and (iii) in the third year from the Seeding Date and each year there-
after, $200,000 minimum. If at the end of the second year from the Seeding Date
the total amount of the fees paid by the Advisor to the Sub-Advisor for serv-
ices to the Enhanced Index Funds is collectively less than $100,000, then the
Advisor will pay any such difference in a lump-sum to the Sub-Advisor. If at
the end of the third year from the Seeding Date, and each year thereafter that
this Agreement is in effect, the total amount of the fees paid by the Advisor
to the Sub-Advisor for services to the Enhanced Index Funds is collectively
less than $200,000, then the Advisor will pay any such difference in a lump-sum
to the Sub-Advisor.
NOTE H) An annual rate of .60% of the combined average daily net assets of
the International Funds of $200 million or less; and an annual rate of .55% of
the combined average daily net assets of the International Fund of more than
$200 million.
II-7
<PAGE>
Annex III
<TABLE>
<CAPTION>
Fund Fee Portfolio Fee
- --------------------------------------------------------------------
<S> <C> <C> <C>
Cash Fund $884,771 Cash Portfolio $2,673,031
- --------------------------------------------------------------------
Intermediate Fund $86,961 Intermediate Portfolio $10,895
- --------------------------------------------------------------------
Tax Free Fund $915,978 Tax Free Portfolio $83,512
- --------------------------------------------------------------------
NY Fund $470,872 NY Portfolio $42,892
- --------------------------------------------------------------------
Treasury Fund $2,129,609 Treasury Portfolio $1,222,027
- --------------------------------------------------------------------
International Fund $7,950,217 International Portfolio $1,959,963
- --------------------------------------------------------------------
Capital Fund $252,297 Capital Portfolio $38,915
- --------------------------------------------------------------------
Long Range Fund $909,047 Asset Portfolio $676,739
- --------------------------------------------------------------------
Mid Range Fund $567,803 Asset Portfolio II $87,448
- --------------------------------------------------------------------
Short Range Fund $370,272 Asset Portfolio III $57,015
- --------------------------------------------------------------------
Pacific Fund $95,257 Pacific Portfolio $31,800
- --------------------------------------------------------------------
Latin American Fund $243,579 Latin American Portfolio $51,345
- --------------------------------------------------------------------
Small Cap Fund $1,518,290 Small Cap Portfolio $233,967
- --------------------------------------------------------------------
PreservationPlus PreservationPlus Income
Income Fund * Portfolio *
- --------------------------------------------------------------------
</TABLE>
* Not in existence for the prior fiscal year.
<PAGE>
EXHIBIT A
[FORM OF INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENT]
AGREEMENT made as of [ ] by and between [Trust Name], a (state of organ-
ization) (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 com-
pany under the Investment Company Act of 1940;
WHEREAS, the Trust desires to retain the Investment Adviser to render in-
vestment advisory and other services to the Trust with respect to certain of
its series of shares of beneficial interests as may currently exist or be cre-
ated in the future (each, a "Fund") as listed on Exhibit A hereto, and the In-
vestment Adviser is willing to so render such services on the terms hereinaf-
ter set forth;
[WHEREAS, the Investment Adviser desires to retain the Investment
Subadviser to perform certain of the Investment Adviser's duties under this
Agreement, and the Investment Subadviser is willing to so render such services
on the terms hereinafter set forth;](/1/)
NOW, THEREFORE, this Agreement
WITNESSETH:
In consideration of the promises and mutual covenants herein contained, it
is agreed between the parties hereto as follows:
1. Appointment. The [Trust] [Investment Adviser] hereby appoints the [In-
vestment Adviser] [Investment Subadviser] to act as [investment adviser] [in-
vestment 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 compen-
sation 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 invest-
ment 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 invest-
ments will be purchased, retained or sold by each Fund. The [Investment Advis-
er] [Investment Subadviser] will provide the services rendered by it hereun-
- -----------
(/1/)Contained in the form of Investment Sub-advisory Agreement only.
<PAGE>
der 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 infor-
mation (or the Fund's then current registration statement on Form N-1A as filed
with the Securities and Exchange Commission (the "SEC") and the then-current
offering memorandum if the Fund is not registered under the Securities Act of
1933, as amended ("1933 Act"). The [Investment Adviser] [Investment Subadviser]
further agrees that:
(a) it will conform with all applicable rules and regulations of the
SEC (herein called the "Rules") and with all applicable provisions of the
1933 Act; as amended, the Securities Exchange Act of 1934, as amended (the
"1934 Act"), the Investment Company Act of 1940, as amended (the "1940
Act"); and the Investment Advisers Act of 1940, as amended (the "Advisers
Act"), and will, in addition, conduct its activities under this Agreement
in accordance with applicable regulations of the Board of Governors of the
Federal Reserve System pertaining to the investment advisory activities of
bank holding companies and their subsidiaries;
(b) it will place orders pursuant to its investment determinations for
each Fund either directly with the issuer or with any broker or dealer se-
lected by it. In placing orders with brokers and dealers, the [Investment
Adviser] [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 fi-
nancial condition and execution capability of the broker or dealer, and
the reasonableness of the commission, if any, both for the specific trans-
action 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 com-
mission for effecting a securities transaction which is in excess of the
amount of commission another broker or dealer would have charged for ef-
fecting 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 trans-
action or the overall responsibilities of the [Investment Adviser] [In-
vestment
EX-2
<PAGE>
Subadviser] with respect to the accounts as to which it exercises invest-
ment discretion; and
(c) it will maintain books and records with respect to the securities
transactions of each Fund and will render to the [Trust's Board of Trust-
ees] [Investment Adviser] such periodic and special reports as the Board
may request.
3. [Subject to the provisions of this Agreement, the duties of the Invest-
ment Subadviser, the portion of portfolio assets that the Subadviser shall
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 mem-
bers of the Trust's Board of Trustees who are not "interested persons," as de-
fined in the Act](/2/)
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 prop-
erty of the Trust and further agrees to surrender promptly to the [Trust] [In-
vestment 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 rec-
ords 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 se-
curities (including brokerage commissions, if any) for the Fund.
7. Compensation. For the services provided and the expenses assumed pursu-
ant to this Agreement, the [Trust] [Investment Adviser] will pay the [Invest-
ment Adviser] [Investment Subadviser], and the [Investment Adviser] [Invest-
ment Subadviser] will accept as full compensation therefor, fees, computed
daily and payable monthly, on an annual basis equal to the percentage set
forth on Exhibit A hereto of that Fund's average daily net assets.
- -----------
(2) Provision contained in the form of Investment Sub-advisory Agreement only.
EX-3
<PAGE>
8. Limitation of Liability of the [Investment Adviser] [Investment
Subadviser]: Indemnification.
(a) The [Investment Adviser] [Investment Subadviser] shall not be lia-
ble 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 Agree-
ment;
(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 re-
spective Fund to the fullest extent permitted by law, against liabil-
ity and against all expenses reasonably incurred or paid by him in
connection with any claim, action, suit or proceeding in which he be-
comes 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 Per-
son:
(i) who shall have been adjudicated by a court or body before
which the proceeding was brought (A) to be liable to the [Trust] [In-
vestment Adviser] or to one or more Funds' investors by reason of
willful misfeasance, bad faith, gross negligence or reckless disre-
gard 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 deter-
mination that such Covered Person did not engage in willful misfea-
sance, bad faith, gross negligence or reckless disregard of the du-
ties involved in the conduct of his office;
(A) by the court or other body approving the settlement; or
EX-4
<PAGE>
(B) by at least a majority of those Trustees who are neither
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 con-
tained herein shall affect any rights to indemnification to which Trust
personnel and any other persons, other than a Covered Person, may be enti-
tled by contract or otherwise under law.
(e) Expenses in connection with the preparation and presentation of a
defense to any claim, suit or proceeding of the character described in
subsection (b) of this Section 7 may be paid by the [Trust] [Investment
Adviser] on behalf of the respective Fund from time to time prior to final
disposition thereto upon receipt of an undertaking by or on behalf of such
Covered Person that such amount will be paid over by him to the [Trust]
[Investment Adviser] on behalf of the respective Fund if it is ultimately
determined that he is not entitled to indemnification under this Section
7; provided, however, that either (i) such Covered Person shall have pro-
vided appropriate security for such undertaking or (ii) the [Trust] [In-
vestment Adviser] shall be insured against losses arising out of any such
advance payments, or (iii) either a majority of the Trustees who are nei-
ther Interested Persons of the Trust nor parties to the matter, or inde-
pendent legal counsel in a written opinion, shall have determined, based
upon a review of readily available facts as opposed to a trial-type in-
quiry 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 con-
tinue until the second anniversary of such date. Thereafter, if not terminated,
this Agreement shall continue in effect as to such Fund for successive
EX-5
<PAGE>
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 pen-
alty, 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 Securi-
ties," "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 un-
der this Agreement;
(c) This Agreement is legal, valid and binding, and enforceable in ac-
cordance with its terms; and
(d) The performance by the [Investment Adviser] [Investment
Subadviser] of its obligations under this Agreement does not conflict with
any law to which it is subject.
12. Covenants. The [Investment Adviser] [Investment Subadviser] hereby cov-
enants and agrees that, so long as this Agreement shall remain in effect:
(a) The [Investment Adviser] [Investment Subadviser] shall remain ei-
ther exempt from, or registered under, the registration provisions of the
Advisers Act; and
EX-6
<PAGE>
(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 in-
vestor in a Fund, other than shares in that Fund, which arise out of any ac-
tion or inaction of the [Trust] [Investment Adviser] under this Agreement.
15. Miscellaneous. The captions in this Agreement are included for conve-
nience of reference only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect. If any provision of
this Agreement shall be held or made invalid by a court decision, statute,
rule or otherwise, the remainder of this Agreement shall not be affected
thereby.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and shall be governed by the
laws of the ____, without reference to principles of conflicts of law. The
Trust is organized under the laws of ___ pursuant to a ___ dated ___. No
Trustee, officer or employee of the Trust shall be personally bound by or lia-
ble hereunder, nor shall resort be had to their private property for the sat-
isfaction of any obligation or claim hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
[SIGNATORIES]
EX-7
<PAGE>
EXHIBIT A
TO
INVESTMENT ADVISORY AGREEMENT
MADE AS OF
BETWEEN
[Trust Name] AND [ ]
Fund Investment Advisory Fee
EX-8
<PAGE>
CUSIP #055922306
CUSIP #055922207
CUSIP #055922108
CUSIP #055922405
CUSIP #055922827
CUSIP #055922835
CUSIP #055922843
CUSIP #055922801
CUSIP #055922868
CUSIP #055922819
CUSIP #055922736
CUSIP #055922785
CUSIP #055922769
CUSIP #055922660
<PAGE>
FORM OF PROXY CARD
<TABLE>
<S> <C>
DEUTSCHE BANC ALEX. BROWN International Equity Portfolio
MUTUAL FUND SERVICES
MS 1-18-8 One South Street
Baltimore, Maryland 21202
One South Street PROXY FOR THE SPECIAL MEETING OF STOCKHOLDERS
Baltimore, Maryland 21202-3220 4:00 p.m., Eastern time, on October 15, 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 THE INTERNATIONAL EQUITY FUND. THE BOARD
OF TRUSTEES RECOMMENDS A VOTE FOR PROPOSALS IA, IB, IC, II
---
AND III.
PLEASE SIGN AND DATE BELOW AND MAIL THIS PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
TO VOTE, MARK BLOCKS IN BLUE OR BLACK INK AS FOLLOWS:
</TABLE>
KEEP THIS PORTION FOR YOUR RECORDS.
<PAGE>
DETACH AND RETURN THIS PORTION ONLY.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
INTERNATIONAL EQUITY PORTFOLIO
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> <C>
II. Election of Messrs. (01) Biggar, (02) Dill, For All Withhold All For All Except: To withhold authority
(03) Hale, (04) Langton, (05) Saunders, and to vote, mark "For All
(06) Van Benschoten and Drs. (07) Gruber and [_] [_] [_] Except" and write the
(08) Herring as Trustees of the Boards. nominee's number on the
line below.
__________________
Vote on Proposals
IA. Approval of New Investment Advisory III. Ratification of the selection of PricewaterhouseCoopers LLP
Agreement with Bankers Trust Company as the independent accountants of the Portfolio.
FOR [_] AGAINST [_] ABSTAIN [_] FOR[_] AGAINST[_] ABSTAIN [_]
IB. Approval of New Investment Advisory The appointed proxies will vote on any other business as may
Agreement with Morgan Grenfell Inc. properly come before the Special Meeting and any adjournment thereof.
FOR [_] AGAINST [_] ABSTAIN [_]
Receipt of the Notice and the Joint Proxy Statement is
IC. Approval of New Investment Sub-advisory hereby acknowledged.
Agreement with Bankers Trust Company
FOR [_] AGAINST [_] ABSTAIN [_]
- -------------------------------------------------- ---------------------------------------
| | | | | |
- -------------------------------------------------- ---------------------------------------
Signature (Please sign within box) Date Signature (Joint Owners) Date
</TABLE>
-2-
