SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ X ] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or
Sec. 240.14a-12
. . . . . . . . . . . . . . .LEHMAN BROTHERS INSTITUTIONAL FUNDS
GROUP TRUST. . . . . . . . . . . . . .
(Name of Registrant as Specified In Its Charter)
. . . . . . . . . . . . . . . . . . . . . . . . . .ELIZABETH A.
RUSSELL, SECRETARY . . . . . . . . . . . . . . . . . . . . . . . .
. .
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
[ ] 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:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . .
2) Aggregate number of securities to which transaction applies:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . .
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:1
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . .
4) Proposed maximum aggregate value of transaction:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . .
1 Set forth the amount on which the filing fee is calculated
and state how it was determined.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
1) Amount Previously Paid:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . .
2) Form, Schedule or Registration Statement No.:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . .
3) Filing Party:
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4) Date Filed:
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.. . . . . . . . . . . .
PRESIDENT'S LETTER
Lehman Brothers Institutional Funds Group Trust
Dear Lehman Brothers Institutional Fund Investor:
We are writing to you in connection with the upcoming
Special Meeting of Shareholders of the Lehman Brothers
Institutional Funds Group Trust (the "Funds" or the "Trust") to be
held on January 31, 1996. The attached Notice of Meeting and
Proxy Statement describe several proposals being submitted for
your consideration that can be divided into three broad
categories:
* Corporate Governance: Proposals Nos. 1 and 5 involve the
election of the Board of Trustees and the approval of the Funds'
independent auditors;
* Changes to Investment Restrictions: Proposals Nos. 3 and 4
concern changing certain investment restrictions to conform them
generally with the Trust's other investment portfolios and the
allowable limits available under the Investment Company Act of
1940; and
* Consideration of a New Investment Advisory Agreement:
Proposal No. 2 deals with an increase in the contractual
investment advisory fees of Lehman Brothers Global Asset
Management ("LBGAM"). Proposal No. 2, however, will not impact
the 18 basis point cap on the Funds' overall operating expenses
(26 basis points with respect to Cash Management Fund and
excluding the Service/Distribution fees borne by Class B, C and E)
unless the expense cap is increased after sixty (60) days notice
to shareholders.
The Funds' Board of Trustees carefully considered these
matters and has unanimously recommended that you approve them.
We urge you to return your proxy card without delay. We
greatly appreciate your continuing support of the Lehman Brothers
Institutional Funds.
JAMES A. CARBONE ANDREW D. GORDON
James A. Carbone Andrew D. Gordon
Co-Chairman of the Board Co-Chairman of the Board
of Trustees of Trustees and President
DRAFT
12/14/95
LEHMAN BROTHERS INSTITUTIONAL FUNDS GROUP TRUST
3 World Financial Center
200 Vesey Street
New York, New York 10285
_____________
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held on January 31, 1996
_____________
To the Shareholders of
Lehman Brothers Institutional Funds Group Trust:
Notice is hereby given that a Special Meeting of
Shareholders of Lehman Brothers Institutional Funds Group
Trust (the "Trust"), a Massachusetts business trust
consisting of the Prime Money Market Fund, Prime Value
Money Market Fund, Government Obligations Money Market
Fund, Cash Management Fund, Treasury Instruments Money
Market Fund II, Tax-Free Money Market Fund and Municipal
Money Market Fund (collectively, the "Funds"), will be
held at 200 Vesey Street, 3 World Financial Center,
Conference Rm. 2 - 26th Floor, New York, New York 10285,
on January 31, 1996 at 10:00 a.m., for the following
purposes:
1. To elect six (6) Trustees of the Trust.
(Proposal 1)
2. To approve or disapprove a proposed new investment
advisory agreement for each Fund between the Trust, on
behalf of such Fund, and Lehman Brothers Global Asset
Management Inc. ("LBGAM"), each Fund's Investment Adviser.
(Proposal 2)
3. To approve or disapprove the modification of each
Fund's (except the Cash Management Fund's) investment
restriction regarding borrowing. (Proposal 3)
4. To approve or disapprove the modification of each
Fund's (except the Cash Management Fund's) investment
restriction regarding making loans. (Proposal 4)
5. To ratify or reject the selection of Ernst & Young
LLP as the independent public accountants being employed
by the Trust for the fiscal year ending January 31, 1996.
(Proposal 5)
6. To consider and vote upon such other matters as may
come before said meeting or any adjournment thereof.
These Proposals are discussed in greater detail in
the attached Proxy Statement.
The close of business on December 21, 1995, has been
fixed as the record date for the determination of
shareholders entitled to notice of and to vote at the
Special Meeting and any adjournments thereof.
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO
ATTEND THE MEETING, WE ASK THAT YOU PLEASE COMPLETE AND
SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY EITHER
BY FAX ___________ OR IN THE ENCLOSED ENVELOPE, WHICH
NEEDS NO POSTAGE IF MAILED IN THE CONTINENTAL UNITED
STATES. INSTRUCTIONS FOR THE PROPER EXECUTION OF PROXIES
ARE SET FORTH ON THE INSIDE COVER.
By Order of the Board of Trustees
PATRICIA L. BICKIMER
Secretary
__________, 1995
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards
may be of assistance to you and avoid the time and expense
to the Trust involved in validating your vote if you fail
to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it
appears in the registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name
of the party signing should conform exactly to the name
shown in the registration on the proxy card.
3. All Other Accounts: The capacity of the individual
signing the proxy card should be indicated unless it is
reflected in the form of registration. For example:
Registration Valid Signature
Corporate Accounts
(1) ABC Corp ABC Corp.
(2) ABC Corp John Doe, Treasurer
(3) ABC Corp.
c/o John Doe, Treasurer John Doe
(4) ABC Corp., Profit Sharing Plan John Doe,
Trustee
Trust Accounts
(1) ABC Trust Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d 12/28/78 Jane B. Doe
Custodian or Estate Accounts
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr. UGMA John B.
Smith, Jr.
(2) John B.
Smith.............................................. John
B. Smith, Jr., Executor
LEHMAN BROTHERS INSTITUTIONAL FUNDS GROUP TRUST
3 World Financial Center
200 Vesey Street
New York, New York 10285
SPECIAL MEETING OF SHAREHOLDERS
January 31, 1996
__________
PROXY STATEMENT
This Proxy Statement is furnished in connection with
the solicitation of proxies by the Board of Trustees (the
"Board") of Lehman Brothers Institutional Funds Group
Trust (the "Trust") for use at a Special Meeting of
Shareholders of the Trust to be held on January 31, 1996,
at 10:00 a.m. at 200 Vesey Street, Conference Rm. 2 - 26th
Floor, New York, New York 10285, and at any adjournments
thereof (the "Meeting"). The Trust is comprised of the
Prime Money Market Fund, Prime Value Money Market Fund,
Government Obligations Money Market Fund, Cash Management
Fund, Treasury Instruments Money Market Fund II, Tax-Free
Money Market Fund and Municipal Money Market Fund
(collectively, the "Funds"). A Notice of Special Meeting
of Shareholders and a proxy card accompany this Proxy
Statement.
Proxy solicitations will be made primarily by mail
but officers of the Trust; officers and employees of First
Data Investor Services Group, Inc. ("FDISG" or the
"Administrator"), the Trust's administrator; affiliates of
FDISG; officers and employees of Lehman Brothers
Inc.("Lehman"), the Trust's distributor; or other
representatives of the Trust may also solicit proxies by
telephone, electronic mail or in person. The costs of the
proxy solicitation and the expenses incurred in connection
with preparing the Proxy Statement and its enclosures will
be paid by the Trust. The Trust's most recent annual and
semi-annual reports are available upon request, without
charge, by writing to the Trust at One Exchange Place,
Boston, MA 02109 or calling the Trust at 1-800-368-5556.
This Proxy Statement is first being mailed to shareholders
on or about December 28, 1995.
The Trust currently issues four classes of shares of
beneficial interest ("Shares") of each of the Funds except
the Cash Management Fund, which has only one class of
Shares. Shareholders of each Fund will vote separately on
proposals 2, 3 and 4 with respect to such Fund.
Shareholders of all Funds will vote together on proposals
1 and 5. Each shareholder is entitled to one vote for
each full share and an appropriate fraction of a vote for
each fractional share held. If the enclosed Proxy is
properly executed and returned in time to be voted at the
Meeting, the shares represented thereby will be voted in
accordance with the instructions marked thereon. Unless
instructions to the contrary are marked thereon, the Proxy
will be voted FOR the election of the nominees as
Trustees and FOR the other matters listed in the
accompanying Notice of a Special Meeting of Shareholders.
Any shareholder who has given a proxy has the right to
revoke it at any time prior to its exercise either by
attending the Meeting and voting his or her shares in
person or by submitting a letter of revocation or a later-
dated Proxy to the Trust at the above address prior to the
date of the Meeting.
In the event that a quorum is present at the Meeting
but sufficient votes to approve any of the proposed items
is not received, the persons named as proxies may propose
one or more adjournments of such Meeting to permit further
solicitation of proxies. A shareholder vote may be taken
on one or more of the proposals in this Proxy Statement
prior to such adjournment if sufficient votes have been
received and it is otherwise appropriate. Any such
adjournment will require the affirmative vote of a
majority of those shares of the Trust present at the
Meeting in person or by proxy. If a quorum is present,
the persons named as proxies will vote those proxies that
they are entitled to vote FOR any such proposal in favor
of such an adjournment and will vote those proxies
required to be voted for rejection of any such item
against any such adjournment.
The close of business on December 21, 1995, has been
fixed as the record date for the determination of
shareholders entitled to notice of and to vote at the
Meeting, including all adjournments thereof. On the
record date there were outstanding ______ shares of the
Prime Money Market Fund, ______ shares of the Prime Value
Money Market Fund, ______ shares of the Government
Obligations Money Market Fund, ______ shares of the Cash
Management Fund, ______ shares of the Treasury Instruments
Money Market Fund II, ______ shares of the Tax-Free Money
Market Fund and ______ shares of the Municipal Money
Market Fund. As of the record date, to the knowledge of
the management of the Trust, no single shareholder or
"group" (as that term is used in Section 13(d) of the
Securities Act of 1934, as amended), beneficially owned
more than 5% of the outstanding shares of the Trust. As
of the record date, the officers and the Board of the
Trust beneficially owned less than 1% of the outstanding
shares of the Trust.
SUMMARY OF PROPOSALS
The table set forth below lists each proposal
contained in the Proxy Statement and the Funds whose
shareholders will be voting on the proposal.
Proposal Number
Proposal Summary Fund(s)
Proposal 1 Election of six (6) Trustees of the
Trust. All Funds
Proposal 2 Approval or disapproval of a new
investment All Funds
advisory agreement between the Trust, on
be-
half of each Fund, and the Trust's
investment
adviser, containing substantially the same
terms
as the current investment advisory
agreement,
with the exception of an increase in the
investment advisory fees.
Proposal 3 Approval or disapproval of the
modification of All Funds
each Fund's investment restriction
regarding (except Cash
borrowing. Management
Fund)
Proposal 4 Approval or disapproval of the
modification All Funds
of each Fund's investment restriction
regarding (except Cash
making loans. Management
Fund)
Proposal 5 Ratification or rejection of the
selection of All Funds
Ernst & Young LLP as the Trust's inde-
pendent public accountants for the fiscal
year ending January 31, 1996.
PROPOSAL 1.
TO ELECT SIX (6) TRUSTEES OF THE TRUST
At the Meeting, shareholders will be asked to elect six
(6) Trustees. Each of the nominees currently serves as a
Trustee of the Trust and has consented to continue serving
as a Trustee of the Trust if elected at the Meeting. If a
designated nominee declines or otherwise becomes
unavailable for election, however, the proxy confers
discretionary power on the persons named therein to vote
in favor of a substitute nominee or nominees.
If elected, the Trustees will hold office without limit in
time except that a Trustee may resign at any time and/or
may be removed at any meeting of shareholders called for
that purpose by a majority of the votes entitled to be
cast for the election of Trustees. In case a vacancy
shall exist for any reason, the remaining Trustees may
fill the vacancy by appointing another Trustee. If at any
time less than a majority of the Trustees holding office
have been elected by shareholders, the Trustees then in
office will call a shareholders' meeting for the purpose
of electing Trustees.
Set forth below is a list of the nominees together with
certain other information.
Name, Age,
Principal
Occupation
and Other
Trusteeships
**
During the
Past Five
Years
P
o
s
i
t
i
o
n
w
i
t
h
t
h
e
T
r
u
s
t
S
e
r
v
e
d
a
s
a
T
r
u
s
t
e
e
S
i
n
c
e
Numbe
r of
Share
s and
%
Benef
icial
ly
Owned
***
as of
Decem
ber
21,
1995
Charles F.
Barber, Age
78
Consultant;
formerly
Chairman of
the Board,
ASARCO
Incorporated
T
r
u
s
t
e
e
1
9
9
3
*James A.
Carbone, Age
43
Managing
Director,
Lehman
Brothers
Inc.
C
o
- - - -
C
h
a
i
r
m
a
n
o
f
t
h
e
B
o
a
r
d
a
n
d
T
r
u
s
t
e
e
1
9
9
5
Burt N.
Dorsett, Age
65
Managing
Partner,
Dorsett
McCabe
Capital
Management,
Inc., an
investment
counseling
firm;
Director,
Research
Corporation
Technologies
, a non-
profit
patent-
clearing and
licensing
operation;
formerly
President,
Westinghouse
Pension
Investments
Corporation;
formerly
Executive
Vice
President
and Trustee,
College
Retirement
Equities
Fund, Inc.,
a variable
annuity
fund; and
formerly
Investment
Officer,
University
of Rochester
T
r
u
s
t
e
e
1
9
9
3
*Andrew D.
Gordon, Age
41
Managing
Director,
Lehman
Brothers
Inc.
C
o
- - - -
C
h
a
i
r
m
a
n
o
f
t
h
e
B
o
a
r
d
,
T
r
u
s
t
e
e
a
n
d
P
r
e
s
i
d
e
n
t
1
9
9
4
Edward J.
Kaier, Age
50
Partner with
the Law Firm
of Hepburn
Willcox
Hamilton &
Putnam
T
r
u
s
t
e
e
1
9
9
3
S. Donald
Wiley, Age
69
Vice-
Chairman and
Trustee,
H.J. Heinz
Company
Foundation;
prior to
October
1990, Senior
Vice
President,
General
Counsel and
Secretary,
H.J. Heinz
Company
T
r
u
s
t
e
e
1
9
9
3
* "Interested person" of the Trust, as defined in the
Investment Company Act of 1940 (the "1940 Act") by virtue
of his position, or a relative's position, as an officer
or director of the Trust's investment adviser,
distributor or one of their affiliates.
** Directorships, general partnerships or trusteeships
of companies that are required to report to the Securities
and Exchange Commission (the "SEC") other than registered
investment companies.
*** For this purpose, "beneficial ownership" is defined
under Section 13(d) of the Securities Exchange Act of
1934. The information as to beneficial ownership is based
upon information furnished to the Trust by the nominees.
The following Officers of the Trust continue to serve in
that capacity until their resignation or removal.
Name, Age,
Principal
Occupation
and
Trusteeships
*
During the
Past Five
Years
P
o
s
i
t
i
o
n
w
i
t
h
t
h
e
T
r
u
s
t
S
e
r
v
e
d
a
s
a
n
O
f
f
i
c
e
r
S
i
n
c
e
Number
of
Shares
and
%
Benefic
ially
Owned**
as of
Decembe
r 21,
1995
John M.
Winters, Age
46
Senior Vice
President
and Senior
Money Market
Portfolio
Manager,
Lehman
Brothers
Global Asset
Management
Inc.;
formerly
Product
Manager with
Lehman
Brothers
Capital
Markets
Group
V
i
c
e
P
r
e
s
i
d
e
n
t
a
n
d
I
n
v
e
s
t
m
e
n
t
O
f
f
i
c
e
r
1
9
9
3
Nicholas
Rabiecki,
III, Age 37
Vice
President
and Senior
Portfolio
Manager,
Lehman
Brothers
Global Asset
Management
Inc.;
formerly
Senior
Fixed-Income
Portfolio
Manager with
Chase
Private
Banking
V
i
c
e
P
r
e
s
i
d
e
n
t
a
n
d
I
n
v
e
s
t
m
e
n
t
O
f
f
i
c
e
r
1
9
9
4
Michael C.
Kardok, Age
36
Vice
President,
First Data
Investor
Services
Group, Inc.;
prior to May
1994, Vice
President,
The Boston
Company
Advisors,
Inc.
T
r
e
a
s
u
r
e
r
1
9
9
4
Patricia L.
Bickimer,
Age 42
Vice
President
and
Associate
General
Counsel,
First Data
Investor
Services
Group, Inc.;
prior to May
1994, Vice
President
and
Associate
General
Counsel, The
Boston
Company
Advisors,
Inc.
S
e
c
r
e
t
a
r
y
1
9
9
4
* Directorships, general partnerships or trusteeships
of companies that are required to report to the SEC other
than registered investment companies.
** For this purpose, "beneficial ownership" is defined
under Section 13(d) of the Securities Exchange Act of
1934. The information as to beneficial ownership is based
upon information furnished to the Trust by the
nominees.
No officer, director, or employee of Lehman, Lehman
Brothers Global Asset Management Inc. ("LBGAM" or the
"Adviser"), or any of their parents or subsidiaries
receives any compensation from the Trust for serving as an
Officer or Trustee of the Trust. The Trust pays each
Trustee who is not an officer, trustee or employee of
Lehman, LBGAM or any of their affiliates $20,000 per annum
plus $1,250 per meeting attended and reimburses them for
travel and out-of-pocket expenses. The Trust held four
Board Meetings during the fiscal year ended January 31,
1995, all of which were regular meetings. Each of the
Trustees attended all of the scheduled Meetings of the
Board and of any committee of the Board of which he was a
member. The aggregate remuneration paid to Trustees by
the Trust for the fiscal year ended January 31, 1995
amounted to _____________(including reimbursement for
travel and out-of-pocket expenses).
The table below shows the compensation that the incumbent
Trustees received during the Trust's last fiscal year.
The Officers of the Trust receive no compensation from the
Trust for serving in such capacity.
Compensation Table
Name
of
Pers
on,
Posi
tion
A
g
g
r
e
g
a
t
e
C
o
m
p
e
n
s
a
t
i
o
n
F
r
o
m
T
r
u
s
t
Pe
ns
io
n
or
Re
ti
re
me
nt
Be
ne
fi
ts
Ac
cr
ue
d
as
pa
rt
of
Tr
us
t
Ex
pe
ns
es
Est
ima
ted
Ann
ual
Ben
efi
ts
Upo
n
Ret
ire
men
t
T
o
t
a
l
C
o
m
p
e
n
s
a
t
i
o
n
F
r
o
m
t
h
e
T
r
u
s
t
a
n
d
F
u
n
d
C
o
m
p
l
e
x
P
a
i
d
t
o
T
r
u
s
t
e
e
s
*
*
Char
les
F.
Barb
er,
Trus
tee
$
2
5
,
0
0
0
$0
N/A
$
2
5
,
0
0
0
(
1
)
*Jam
es
A.
Carb
one,
Co-
Chai
rman
of
the
Boar
d
and
Trus
tee
0
$0
N/A
$
0
(
2
)
Burt
N.
Dors
ett,
Trus
tee
$
2
5
,
0
0
0
$0
N/A
$
5
2
,
5
0
0
(
2
)
*And
rew
D.
Gord
on,
Co-
Chai
rman
of
the
Boar
d,
Trus
tee
and
Pres
iden
t.
0
$0
N/A
$
0
(
2
)
Edwa
rd
J.
Kaie
r,
Trus
tee
$
2
5
,
0
0
0
$0
N/A
$
2
5
,
0
0
0
(
1
)
S.
Dona
ld
Wile
y,
Trus
tee
$
2
5
,
0
0
0
$0
N/A
$
2
5
,
0
0
0
(
1
)
* "Interested person" of the Trust, as defined in the
1940 Act, by virtue of his position, or a relative's
position, as an officer or director of the Trust's
investment adviser, distributor or one of their
affiliates.
** Represents the total compensation paid to such
persons by all investment companies (including the Trust)
from which such person received compensation during the
fiscal year ended January 31, 1995 that are
considered part of the same "fund complex" as the Trust
because they have common or affiliated investment
advisers. The parenthetical number represents the number
of such investment companies, including the Trust.
The Board of Trustees has an Audit Committee consisting of
all Trustees who are not "interested persons" as defined
in the 1940 Act) of the Trust. The Audit Committee meets
with the Trust's independent accountants to review and
approve the scope and results of their professional
services; to review the procedures for evaluating the
adequacy of the Trust's accounting controls; to consider
the range of audit fees; and to make recommendations to
the Board regarding the engagement of the Trust's
independent accountants. This committee currently
consists of Messrs. Barber, Dorsett, Kaier and Wiley. The
Audit Committee met once during the fiscal year ended
January 31, 1995.
The Board also has a Nominating Committee consisting of
not less than three members of the Board who are not
"interested persons" of the Trust. The purpose of the
Nominating Committee is to select and nominate those
Trustees who are not "interested persons" of the Trust .
This committee currently consists of Messrs. Barber,
Dorsett, Kaier and Wiley. The Nominating Committee did
not meet during the fiscal year ended January 31, 1995.
REQUIRED VOTE
Election of each of the listed nominees for Trustees of
the Trust must be approved by a plurality of the votes
cast at the Meeting in person or by proxy, with
shareholders of the Funds voting as a single class.
THE TRUSTEES, INCLUDING ALL OF THE INDEPENDENT BOARD
MEMBERS, RECOMMEND THAT SHAREHOLDERS VOTE "FOR" THE
ELECTION OF EACH NOMINEE TO THE BOARD.
PROPOSAL 2. ALL FUNDS
TO APPROVE OR DISAPPROVE A PROPOSED NEW INVESTMENT
ADVISORY AGREEMENT BETWEEN THE TRUST, ON BEHALF OF EACH
FUND, AND LEHMAN BROTHERS GLOBAL ASSET MANAGEMENT INC.
THE PROPOSAL
At the Meeting, shareholders of each Fund will be
asked to approve a new investment advisory agreement
(individually, a "New Agreement") between the Trust, on
behalf of such Fund, and LBGAM. LBGAM, each Fund's
investment adviser, is a wholly owned subsidiary of Lehman
Brothers Holdings Inc. ("Holdings"). The principal
business address of LBGAM and Holdings is 3 World
Financial Center, 200 Vesey Street, New York, New York
10285. As of _________, 1995, FMR Corp. beneficially
owned approximately [12.3%] of the outstanding voting
securities of Holdings.
The names, positions with LBGAM and principal
occupation of each executive officer and director of LBGAM
are set forth in the following table:
Name
and
Addres
s*
Position with
LBGAM
Principal
Occupation**
James
A.
Carbon
e
Director and
President
Head of
Asset
Management -
Lehman
Andrew
D.
Gordon
Director and
Chief
Operating
Officer
Managing
Director -
Lehman
Robert
J.
Lunn
Director and
Chief
Executive
Officer
Head of
Financial
Services
Division -
Lehman
Peter
Barbie
ri
Chief
Financial
Officer
Senior Vice
President -
Lehman
Jack
H.
Jacobs
Managing
Director
Andrew
T.
Osinsk
i
Managing
Director
Timoth
y J.
Donova
n
Senior Vice
President
Vice
President &
Portfolio
Manager -
Lehman
John
M.
Winter
s
Senior Vice
President
Senior Vice
President &
Senior
Portfolio
Manager -
Lehman
Ellen
M.
Bermel
Vice
President
Vice
President &
Portfolio
Manager -
Lehman
Nichol
as
Rabiec
ki III
Vice
President
Vice
President &
Portfolio
Manager -
Lehman
Amy S.
Gilfen
baum
Treasurer
Karen
C.
Manson
Secretary
* The address for each Director and executive officer
of LBGAM is 3 World Financial Center, New York, New York
10285.
** Principal occupation is not listed in this column if
it is already listed under the preceding column.
Each Fund is currently advised by LBGAM under an
agreement with the Trust, on behalf of such Fund, dated
February 5, 1993 (individually, a "Current Agreement").
The Current Agreement of each Fund was initially approved
by Lehman as the sole shareholder on February 4, 1993, and
most recently approved by the Board on December 5, 1995.
Pursuant to each Current Agreement, LBGAM is entitled to
receive a monthly fee from each Fund at the annual rate of
.10% of the value of the Fund's average daily net assets.
The New Agreement contains substantially the same terms
and conditions found in the Current Agreement with the
exception of an increase in the advisory fee to .20% of
the value of each Fund's average daily net assets. In
recommending shareholder approval of the New Agreement,
the Board considered information from the Adviser
indicating that advisory fees under the Current Agreement
are generally lower than those of comparable funds and
that, even with the fee increase proposed under the New
Agreement, the Funds' advisory fees would not exceed those
of many comparable funds. In addition, the Board
considered the fact that each Fund had a satisfactory
level of performance while under the Adviser's management.
For additional factors considered by the Board, see
"Evaluation By the Board and Reasons for the Proposal" on
page ______.
If approved by shareholders of a Fund, the New
Agreement will commence on February 1, 1996 with respect
to such Fund, and will continue initially for a two-year
period and automatically for successive annual periods
thereafter; provided such continuance is approved at least
annually by (a) a majority of the Board who are not
interested persons of the Trust (as the term is used in
the 1940 Act) and (b) a majority of the full Board or a
majority of the outstanding voting securities of the
Trust, as defined in the 1940 Act.
Since each Fund commenced operations, the Adviser and
the Administrator have voluntarily waived fees and
reimbursed expenses to the extent necessary to maintain an
annualized expense ratio at a level no greater than .18%
(excluding Rule 12b-1 fees) of average daily net assets
with respect to the Funds (.26% in the case of the Cash
Management Fund). These voluntary fee waiver and expense
reimbursement arrangements will not be changed unless
shareholders are provided at least 60 days' advance
written notice. The Advisor and the Administrator have
agreed to maintain the voluntary waivers "capping"
expenses at .18% under the New Agreement for each Fund
(.26% for the Cash Management Fund), if the New Agreement
is approved by shareholders. The expense "cap" has the
effect of limiting the net fees available to LBGAM and the
Administrator to an amount below the contractual rates and
eliminating any impact that the proposed fee increase
might have on the Funds' performance. Assuming no
increase in a Fund's expense "cap" above .18% (.26% for
the Cash Management Fund), LBGAM will benefit from the
proposed fee increase only to the extent that a Fund's
expenses are less than .08% of average net assets (.16%
with respect to the Cash Management Fund). Consequently,
the fee increase combined with the expense "cap" enhances
the economic incentive of LBGAM to actively monitor the
expenses borne by the Funds without adversely affecting
the Funds' operations and services to shareholders. If
the expense "cap" were raised, the proposed fee increase
could, depending on the level of expenses, result in
additional compensation to LBGAM.
For the fiscal year ended January 31, 1995, the Trust
paid LBGAM an aggregate amount of $_________ in
investment advisory fees, after giving effect to waivers
and reimbursement expenses of certain Funds. Without such
waivers and reimbursements, the aggregate amount paid by
the Trust to LBGAM would have been $_____. Had the
proposed fee been in effect at the time, the Trust would
have paid LBGAM an aggregate amount of $____________ in
investment advisory fees, for the same period, after
giving effect to waivers and reimbursement expenses of
certain Funds. Without such waivers and reimbursements,
the aggregate amount paid by the Trust to LBGAM would have
been $ ____. The table below sets forth the aggregate
amounts that were paid or that would have been paid for
the fiscal year ended January 31, 1995 with respect to
each Fund.
FUND
NAME
CURRENT
INVESTMENT
ADVISORY FEES
PROPOSED
INVESTMENT
ADVISORY FEES
A
f
t
e
r
W
a
i
v
e
r
s
a
n
d
R
e
i
m
b
u
r
s
e
m
e
n
t
s
A
b
s
e
n
t
W
a
i
v
e
r
s
a
n
d
R
e
i
m
b
u
r
s
e
m
e
n
t
s
A
f
t
e
r
W
a
i
v
e
r
s
a
n
d
R
e
i
m
b
u
r
s
e
m
e
n
t
s
A
b
s
e
n
t
W
a
i
v
e
r
s
a
n
d
R
e
i
m
b
u
r
s
e
m
e
n
t
s
Prime
Money
Market
Fund
Prime
Value
Money
Market
Fund
Governm
ent
Obligat
ions
Money
Market
Fund
Cash
Managem
ent
Fund
Treasur
y
Instrum
ents
Money
Market
Fund II
Tax-
Free
Money
Market
Fund
Municip
al
Money
Market
Fund
The difference between the aggregate amount paid by
the Trust as a whole to LBGAM for the fiscal year ended
January 31, 1995, and the aggregate fee amount that would
have been paid had the proposed fee been in effect for the
same period, as a percentage of the aggregate amount paid,
is ____% (after waivers and reimbursements) and ____%
(absent waivers and reimbursements). The table below sets
forth this information with respect to each Fund.
FUND NAME
DIFFERENCE BETWEEN THE AGGREGATE
AMOUNT PAID FOR THE FISCAL YEAR
ENDED JANUARY 31, 1995,
AND THE AGGREGATE AMOUNT THAT
WOULD HAVE BEEN PAID HAD THE
PROPOSED FEE BEEN IN EFFECT FOR
THE SAME PERIOD,
EXPRESSED AS A PERCENTAGE OF THE
AGGREGATE AMOUNT PAID
After
Waivers
and
Reimbursem
ents
Absent
Waivers
and
Reimbursem
ents
Prime Money
Market Fund
Prime Value
Money Market
Fund
Government
Obligations
Money Market
Fund
Cash
Management
Fund
Treasury
Instruments
Money
Market Fund
II
Tax-Free
Money Market
Fund
Municipal
Money Market
Fund
In addition to investment advisory fees paid to LBGAM, the
Trust also reimbursed Lehman in the amount of $547,639 for
certain expenses associated with "Lehman Brothers
ExpressNet" ("LEX"), a computer-based order entry system.
If the New Agreement is approved by shareholders, the
Trust will continue to reimburse Lehman for expenses
associated with LEX.
INFORMATION ABOUT LBGAM
The following table sets forth pertinent information
relative to other investment companies that are advised by
LBGAM having similar investment objectives as the Funds:
Fund Name
F
u
n
d
S
i
z
e
a
s
o
f
1
2
/
2
1
/
9
5
Investment
Advisory
Fee Rate*
Lehman Brothers Funds,
Inc.
B
e
f
o
r
e
W
a
i
v
e
r
s
A
f
t
e
r
W
a
i
v
e
r
s
Daily Income Fund
.
3
0
%
[
]
*
*
Municipal Income
Fund
.
3
0
%
[
]
*
*
New York
Municipal Money Market
Fund***
.
3
0
%
[
]
*
*
* Paid monthly at the annual rates listed, based on the
value of each Fund's respective average daily net
assets. Such fee does not include the administration fee
of ____%.
** LBGAM has agreed to waive voluntarily investment
advisory fees from the Daily Income Fund,
Municipal Income Fund and New York Municipal Money
Market Fund.
*** The New York Municipal Money Market Fund commenced
operations on November 6, 1995.
The following tables compare the costs and expenses that a shareholder
can expect to incur as
an investor in each class of each Fund based upon operating expenses
for the fiscal year
ended January 31, 1995 (restated to reflect expected fees for
the fiscal year ended January
31, 1996) to the costs and expenses under the New Agreement:
Prime Money Market Fund
Cl
as
s
A
Cl
as
s
B
Cla
ss
C
Cla
ss
E
Annual Operating
Expenses
(as a percentage of
average net assets)
C
u
r
r
e
n
t
F
e
e
s
P
r
o
p
o
s
e
d
F
e
e
s
C
u
r
r
e
n
t
F
e
e
s
P
r
o
p
o
s
e
d
F
e
e
s
C
u
r
r
e
n
t
F
e
e
s
P
r
o
p
o
s
e
d
F
e
e
s
C
u
r
r
e
n
t
F
e
e
s
P
r
o
p
o
s
e
d
F
e
e
s
Advisory Fees
.
1
0
%
.
1
0
%
*
.
1
0
%
.
1
0
%
*
.
1
0
%
.
1
0
%
*
.
1
0
%
.
1
0
%
*
Rule 12b-1 fees
N
o
n
e
N
o
n
e
.
2
5
%
.
2
5
%
.
3
5
%
.
3
5
%
.
1
5
%
.
1
5
%
Other Expenses -
including
Administration Fees
.
0
8
%
.
0
8
%
.
0
8
%
.
0
8
%
*
.
0
8
%
.
0
8
%
.
0
8
%
.
0
8
%
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
Total Fund
Operating Expenses
(after waivers or
expense
reimbursement)
.
1
8
%
.
1
8
%
.
4
3
%
.
5
3
%
.
5
3
%
.
5
3
%
.
3
3
%
.
3
3
%
Total Fund
Operating Expenses
(absent waivers and
expense
reimbursement)
.
2
5
%
.
3
5
%
.
5
0
%
.
6
0
%
.
6
0
%
.
7
0
%
.
4
0
%
.
5
0
%
Prime Value Money Market Fund
Cl
as
s
A
Cla
ss
B
Cl
as
s
C
Cla
ss
E
Annual Operating
Expenses
(as a percentage of
average net assets)
C
u
r
r
e
n
t
F
e
e
s
P
r
o
p
o
s
e
d
F
e
e
s
C
u
r
r
e
n
t
F
e
e
s
P
r
o
p
o
s
e
d
F
e
e
s
C
u
r
r
e
n
t
F
e
e
s
P
r
o
p
o
s
e
d
F
e
e
s
C
u
r
r
e
n
t
F
e
e
s
P
r
o
p
o
s
e
d
F
e
e
s
Advisory Fees
.
1
0
%
.
1
0
%
*
.
1
0
%
.
1
0
%
*
.
1
0
%
.
1
0
%
*
.
1
0
%
.
1
0
%
*
Rule 12b-1 fees
N
o
n
e
N
o
n
e
.
2
5
%
.
2
5
%
.
3
5
%
.
3
5
%
.
1
5
%
.
1
5
%
Other Expenses -
including
Administration Fees
.
0
8
%
.
0
8
%
.
0
8
%
.
0
8
%
.
0
8
%
.
0
8
%
.
0
8
%
.
0
8
%
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
Total Fund
Operating Expenses
(after waivers or
expense
reimbursement)
.
1
8
%
.
1
8
%
.
4
3
%
.
4
3
%
.
5
3
%
.
5
3
%
.
3
3
%
.
3
3
%
Total Fund
Operating Expenses
(absent waivers and
expense
reimbursement)
.
2
5
%
.
3
5
%
.
5
0
%
.
6
0
%
.
6
0
%
.
7
0
%
.
4
0
%
.
5
0
%
* After waivers or expense reimbursements.
Government Obligations Money Market Fund
Cl
as
s
A
Cla
ss
B
Cl
as
s
C
Cla
ss
E
Annual Operating
Expenses
(as a percentage of
average net assets)
C
u
r
r
e
n
t
F
e
e
s
P
r
o
p
o
s
e
d
F
e
e
s
C
u
r
r
e
n
t
F
e
e
s
P
r
o
p
o
s
e
d
F
e
e
s
C
u
r
r
e
n
t
F
e
e
s
P
r
o
p
o
s
e
d
F
e
e
s
C
u
r
r
e
n
t
F
e
e
s
P
r
o
p
o
s
e
d
F
e
e
s
Advisory Fees (net
of applicable fee
waivers)
.
0
4
%
.
0
4
%
.
0
4
%
.
0
4
%
.
0
4
%
.
0
4
%
.
0
4
%
.
0
4
%
Rule 12b-1 fees
N
o
n
e
N
o
n
e
.
2
5
%
.
2
5
%
.
3
5
%
.
3
5
%
.
1
5
%
.
1
5
%
Other Expenses -
including
Administration Fees
.
1
4
%
.
1
4
%
.
1
4
%
.
1
4
%
.
1
4
%
.
1
4
%
.
1
4
%
.
1
4
%
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
Total Fund
Operating Expenses
(after waivers or
expense
reimbursement)
.
1
8
%
.
1
8
%
.
4
3
%
.
4
3
%
.
5
3
%
.
5
3
%
.
3
3
%
.
5
3
%
Total Fund
Operating Expenses
(absent waivers and
expense
reimbursement)
.
3
4
%
.
4
4
%
.
5
9
%
.
6
9
%
.
6
9
%
.
7
9
%
.
4
9
%
.
5
9
%
Cash Management Fund
Cl
as
s
A
Annual Operating
Expenses
(as a percentage of
average net assets)
C
u
r
r
e
n
t
F
e
e
s
P
r
o
p
o
s
e
d
F
e
e
s
Advisory Fees (net
of applicable fee
waivers)
.
0
0
%
.
0
Rule 12b-1 fees
N
o
n
e
N
o
n
e
Other Expenses -
including
Administration Fees
.
2
6
%
.
2
6
%
=
=
=
=
=
Total Fund
Operating Expenses
(after waivers or
expense
reimbursement)
.
2
6
%
.
2
6
%
Total Fund
Operating Expenses
(absent waivers and
expense
reimbursement)
1
.
8
4
%
1
.
9
4
%
Treasury Instruments Money Market Fund II
Cl
as
s
A
Cla
ss
B
Cl
as
s
C
Cla
ss
E
Annual Operating
Expenses
(as a percentage of
average net assets)
C
u
r
r
e
n
t
F
e
e
s
P
r
o
p
o
s
e
d
F
e
e
s
C
u
r
r
e
n
t
F
e
e
s
P
r
o
p
o
s
e
d
F
e
e
s
C
u
r
r
e
n
t
F
e
e
s
P
r
o
p
o
s
e
d
F
e
e
s
C
u
r
r
e
n
t
F
e
e
s
P
r
o
p
o
s
e
d
F
e
e
s
Advisory Fees
.
1
0
%
.
1
0
%
*
.
1
0
%
.
1
0
%
*
.
1
0
%
.
1
0
%
*
.
1
0
%
.
1
0
%
*
Rule 12b-1 fees
N
o
n
e
N
o
n
e
.
2
5
%
.
2
5
%
.
3
5
%
.
3
5
%
.
1
5
%
.
1
5
%
Other Expenses -
including
Administration Fees
.
0
8
%
.
0
8
%
.
0
8
%
.
0
8
%
.
0
8
%
.
0
8
%
.
0
8
%
.
0
8
%
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
Total Fund
Operating Expenses
(after waivers or
expense
reimbursement)
.
1
8
%
.
1
8
%
.
4
3
%
.
4
3
%
.
5
3
%
.
5
3
%
.
3
3
%
.
3
3
%
Total Fund
Operating Expenses
(absent waivers and
expense
reimbursement)
.
2
5
%
.
3
5
%
.
5
0
%
.
6
0
%
.
6
0
%
.
7
0
%
.
4
0
%
.
5
0
%
* After waivers or expense reimbursements.
Tax-Free Money Market Fund
Cla
ss
A
Cla
ss
B
Cla
ss
C
Cl
as
s
E
Annual Operating
Expenses
(as a percentage of
average net assets)
C
u
r
r
e
n
t
F
e
e
s
P
r
o
p
o
s
e
d
F
e
e
s
C
u
r
r
e
n
t
F
e
e
s
P
r
o
p
o
s
e
d
F
e
e
s
C
u
r
r
e
n
t
F
e
e
s
P
r
o
p
o
s
e
d
F
e
e
s
C
u
r
r
e
n
t
F
e
e
s
P
r
o
p
o
s
e
d
F
e
e
s
Advisory Fees (net
of applicable fee
waivers)
.
0
3
%
.
0
3
%
.
0
3
%
.
0
3
%
.
0
3
%
.
0
3
%
.
0
3
%
.
0
3
%
Rule 12b-1 fees
N
o
n
e
N
o
n
e
.
2
5
%
.
2
5
%
.
3
5
%
.
3
5
%
.
1
5
%
.
1
5
%
Other Expenses -
including
Administration Fees
.
1
5
%
.
1
5
%
.
1
5
%
.
1
5
%
.
1
5
%
.
1
5
%
.
1
5
%
.
1
5
%
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
Total Fund
Operating Expenses
(after waivers or
expense
reimbursement)
.
1
8
%
.
1
8
%
.
4
3
%
.
4
3
%
.
5
3
%
.
5
3
%
.
3
3
%
.
3
3
%
Total Fund
Operating Expenses
(absent waivers and
expense
reimbursement)
.
3
5
%
.
4
5
%
.
6
0
%
.
7
0
%
.
7
0
%
.
8
0
%
.
5
0
%
.
6
0
%
Municipal Money Market Fund
Cla
ss
A
Cla
ss
B
Cl
as
s
C
Cl
as
s
E
Annual Operating
Expenses
(as a percentage of
average net assets)
C
u
r
r
e
n
t
F
e
e
s
P
r
o
p
o
s
e
d
F
e
e
s
C
u
r
r
e
n
t
F
e
e
s
P
r
o
p
o
s
e
d
F
e
e
s
C
u
r
r
e
n
t
F
e
e
s
P
r
o
p
o
s
e
d
F
e
e
s
C
u
r
r
e
n
t
F
e
e
s
P
r
o
p
o
s
e
d
F
e
e
s
Advisory Fees (net
of applicable fee
waivers)
.
0
6
%
.
0
6
%
.
0
6
%
.
0
6
%
.
0
6
%
.
0
6
%
.
0
6
%
.
0
6
%
Rule 12b-1 fees
N
o
n
e
N
o
n
e
.
2
5
%
.
2
5
%
.
3
5
%
.
3
5
%
.
1
5
%
.
1
5
%
Other Expenses -
including
Administration Fees
.
1
2
%
.
1
2
%
.
1
2
%
.
1
2
%
.
1
2
%
.
1
2
%
.
1
2
%
.
1
2
%
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
=
Total Fund
Operating Expenses
(after waivers or
expense
reimbursement)
.
1
8
%
.
1
8
%
.
4
3
%
.
1
8
%
.
5
3
%
.
1
8
%
.
3
3
%
.
1
8
%
Total Fund
Operating Expenses
(absent waivers and
expense
reimbursement)
.
3
2
%
.
4
2
%
.
5
7
%
.
6
7
%
.
6
7
%
.
7
7
%
.
4
7
%
.
5
7
%
Example: An investor would pay the following expenses on a $1,000
investment, assuming (1) a
5% annual return and (2) redemption at the end of each time period with
respect to the classes listed:
1
Y
e
a
r
3
Y
e
a
r
s
5
Y
e
a
r
s
1
0
Y
e
a
r
s
C
u
r
r
e
n
t
F
e
e
s
P
r
o
p
o
s
e
d
F
e
e
s
C
u
r
r
e
n
t
F
e
e
s
P
r
o
p
o
s
e
d
F
e
e
s
C
u
r
r
e
n
t
F
e
e
s
P
r
o
p
o
s
e
d
F
e
e
s
C
u
r
r
e
n
t
F
e
e
s
P
r
o
p
o
s
e
d
F
e
e
s
C
l
a
s
s
A
$
2
$
6
$
1
0
$
2
3
C
l
a
s
s
A
- - - -
C
a
s
h
M
a
n
a
g
e
m
e
n
t
F
u
n
d
O
n
l
y
$
3
$
8
$
1
5
$
3
3
C
l
a
s
s
B
$
4
$
1
4
$
2
4
$
5
4
C
l
a
s
s
C
$
5
$
1
7
$
3
0
$
6
6
C
l
a
s
s
E
$
3
$
1
1
$
1
9
$
4
2
EVALUATION BY THE BOARD AND REASONS FOR THE PROPOSAL
On December 5, 1995, the Board met in person at a
meeting called for the purpose of considering, among other
things, the New Agreements with LBGAM. It also
considered, at that time, continuation of each Fund's
Current Agreement with LBGAM and various other possible
alternatives. In considering whether to approve the New
Agreement for a Fund and to submit it to shareholders of
the Fund for their approval, the Board considered a number
of factors, including the business organization,
investment management experience, financial resources and
personnel of LBGAM and its affiliates, and their impact on
the Funds. Representatives of LBGAM were present to
respond to questions from the Board and its independent
counsel. The Board reviewed and considered LBGAM's
investment performance on behalf of each Fund and the
investment performance of LBGAM in managing funds with
objectives and policies similar to those of the Funds.
The Board compared the past performance of each Fund with
various indices and industry standards. It also compared
the advisory fees and total expense ratios under the New
Agreement for each Fund with advisory fees and total
expense ratios of other similar funds on both a
contractual basis and net of fee waivers and expense
reimbursements. The Board concluded that the advisory fee
under the New Agreement for each Fund was fair and
reasonable in light of, among other things, LBGAM's
satisfactory advisory and management services to the Fund.
After carefully evaluating the foregoing materials
and factors (and after meeting in executive session with
independent counsel), the Trustees of the Trust who were
not "interested persons" of the Trust approved, with
respect to each Fund and subject to shareholder approval,
the New Agreement with LBGAM, substantially in the form of
Exhibit A to this Proxy Statement. The entire Board then
reconvened and, with respect to each Fund, approved the
New Agreement and recommended its approval by the Fund's
shareholders.
REQUIRED VOTE
Approval of the New Agreement with respect to each
Fund will require the affirmative vote of a "majority of
the outstanding voting securities" of such Fund, which for
this purpose means the affirmative vote of the lesser of
(1) more than 50% of the outstanding shares of the Fund or
(2) 67% or more of the shares of the Fund present at the
Meeting if more than 50% of the outstanding shares of the
Fund are represented at the Meeting in person or by proxy.
If shareholder approval of the New Agreement is not
obtained by a Fund, LBGAM will continue to act as
investment adviser to the Fund pursuant to the Current
Agreement.
THE BOARD, INCLUDING ALL OF THE INDEPENDENT BOARD MEMBERS,
RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" PROPOSAL 2.
PROPOSAL 3. ALL FUNDS EXCEPT THE CASH MANAGEMENT FUND
MODIFICATION OF A FUNDAMENTAL POLICY REGARDING BORROWING
The Prime Money Market Fund, Prime Value Money Market
Fund, Government Obligations Money Market Fund, Treasury
Instruments Money Market Fund II, Tax-Free Money Market
Fund and Municipal Money Market Fund (the "10% Borrowing
Funds") each has a fundamental policy prohibiting the Fund
from (i) borrowing, except as borrowings may be necessary
for temporary or emergency purposes (such as meeting
redemption requests that might otherwise require the
untimely disposition of securities) in amounts not in
excess of 10% of the Fund's total assets and (ii)
mortgaging, pledging or hypothecating its assets except in
connection with the aforementioned borrowing and in
amounts not exceeding the lesser of the dollar amounts
borrowed or 10% of the value of the Fund's assets at the
time of such borrowing. In addition, a 10% Borrowing Fund
may not make additional investments when borrowings exceed
5% of the Fund's assets. Further, none of the 10%
Borrowing Funds, except the Government Obligations Money
Market Fund and the Treasury Instruments Money Market Fund
II, may invest in reverse repurchase agreements. The
language of these fundamental policies varies among the
10% Borrowing Funds.
Proposal 3 would modify the fundamental policy of the
10% Borrowing Funds in order to (i) increase the amount
that may be borrowed from 10% to 33 1/3% of a Fund's total
assets, (ii) increase the amount that may be pledged,
mortgaged or hypothecated to an amount not in excess of 33
1/3% of the value of a Fund's total assets at the time of
the borrowing, (iii) indicate that, subject to specific
authorization from the Securities and Exchange Commission
(the "SEC"), a Fund may borrow from funds advised by the
Adviser or an affiliate of the Adviser, and (iv) indicate
that a permitted borrowing may take the form of a sale of
portfolio securities accompanied by a simultaneous
agreement as to their repurchase.
Adoption of the proposed investment limitation is not
expected to affect the way in which the 10% Borrowing
Funds are managed, the investment performance of the 10%
Borrowing Funds, or the securities or instruments in which
the 10% Borrowing Funds invest. However, the proposal
would permit greater flexibility in the administration of
the 10% Borrowing Funds' portfolios.
With respect to increasing the percentage that may be
borrowed, mortgaged, pledged or hypothecated, it is
believed that such an increase would benefit the 10%
Borrowing Funds by expanding their range of permissible
financing strategies.
With respect to permitting borrowings among
affiliated funds, it is believed that this change would
give the 10% Borrowing Funds the ability to borrow at a
lower cost than would be the case with non-affiliated
parties. However, such transactions would not be engaged
in without the specific permission of the SEC, as required
by the 1940 Act and the rules thereunder.
With respect to permitting the 10% Borrowing Funds to
enter into reverse repurchase agreements, it is believed
that such transactions would provide further means by
which each Fund might generate additional income to the
Fund. Under a reverse repurchase agreement, a Fund would
sell securities and agree to repurchase them at a mutually
agreed date and price. At the time a Fund enters into a
reverse repurchase agreement, it will establish and
maintain a segregated account with an approved custodian
containing cash or liquid high-grade debt securities
having a value not less than the repurchase price
(including accrued interest). Reverse repurchase
agreements involve the risk that the market value of the
securities may decline below the price of the securities a
Fund has sold but is obligated to repurchase. In the
event the buyer of securities under a reverse repurchase
agreement files for bankruptcy or becomes insolvent, such
buyer or its trustee or receiver may receive an extension
of time to determine whether to enforce a Fund's
obligation to repurchase the securities, and the Fund's
use of the proceeds of the reverse repurchase agreement
may effectively be restricted pending such decision.
Reverse repurchase agreements are considered to be
borrowings under the 1940 Act.
Subject to shareholder approval, the Board intends to
replace each 10% Borrowing Fund's current fundamental
investment limitation with the following amended
fundamental investment limitation governing borrowing:
A Fund may not [B]orrow money except from banks or,
subject to specific authorization by the SEC, from funds
advised by the Adviser or an affiliate of the Adviser. A
Fund may borrow money for temporary or emergency purposes
and then in an amount not exceeding one-third of the value
of the particular Fund's total assets, or mortgage, pledge
or hypothecate its assets except in connection with any
such borrowing and in amounts not in excess of one-third
of the value of the particular Fund's total assets at the
time of such borrowing. Borrowing may take the form of a
sale of portfolio securities accompanied by a simultaneous
agreement as to their repurchase. Additional investments
will not be made when borrowings exceed 5% of the Fund's
assets.
The Board has concluded that the proposed amendment
will benefit each 10% Borrowing Fund by permitting greater
flexibility in the administration of its portfolio.
Accordingly, the Trustees recommend that shareholders of
the 10% Borrowing Funds vote FOR the proposed amendment.
The amended limitation, upon shareholder approval, will
become effective immediately.
REQUIRED VOTE
With respect to each 10% Borrowing Fund, the
affirmative vote of a majority of the outstanding voting
securities of such Fund (as defined on page 14) entitled
to vote is required to approve modification of the
investment restriction regarding borrowing. If Proposal 3
is not approved by the shareholders of a 10% Borrowing
Fund, the current investment restriction with respect to
borrowing will remain unchanged for that Fund.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" PROPOSAL
3.
PROPOSAL 4. ALL FUNDS EXCEPT CASH MANAGEMENT FUND
MODIFICATION OF A FUNDAMENTAL POLICY REGARDING LENDING BY
A FUND
The Prime Money Market Fund, Prime Value Money Market
Fund, Government Obligations Money Market Fund, Treasury
Instruments Money Market Fund II, Tax-Free Money Market
Fund and Municipal Money Market Fund (the "Proposal 4
Funds") each has a fundamental policy prohibiting the Fund
from lending its assets to other persons, except that the
Fund may purchase or hold debt instruments in accordance
with its investment objectives and policies. In addition,
the Prime Money Market Fund, the Prime Value Money Market
Fund, the Government Obligations Money Market Fund and the
Treasury Instruments Money Market Fund II may enter into
repurchase agreements for securities, and the Government
Obligations Money Market Fund and the Treasury Instruments
Money Market Fund II may also lend portfolio securities.
In some instances, the language of these restrictions
varies from Proposal 4 Fund to Proposal 4 Fund.
Proposal 4 would modify the fundamental investment
restriction of the Proposal 4 Funds in order to (i) permit
each Proposal 4 Fund to lend securities, (ii) permit each
Proposal 4 Fund to enter into repurchase agreements, (iii)
permit each Proposal 4 Fund, subject to specific
authorization by the SEC, to lend money to other funds
advised by the Adviser or an affiliate of the Adviser, and
(iv) standardize the language of the investment limitation
so that each Proposal 4 Fund's limitation will be
substantially the same as that of the Cash Management
Fund.
Adoption of the proposed limitation on lending is not
expected to affect the way in which the Proposal 4 Funds
are managed, the investment performance of the Proposal 4
Funds, or the securities or instruments in which the
Proposal 4 Funds invest. However, the Proposal 4 Funds'
portfolios may benefit from the added lending flexibility
contemplated by the proposal.
If this proposal is approved by shareholders, each
Proposal 4 Fund, in addition to the Government Obligations
Money Market Fund and Treasury Instruments Money Market
Fund, may lend portfolio securities to U.S. and foreign
brokers, dealers, banks or other institutional borrowers
of securities that the Adviser has determined are
creditworthy under guidelines established by the Board.
These loans, if and when made, would not exceed 33 1/3% of
the value of the Proposal 4 Fund's total assets. The
Proposal 4 Fund's loans of securities will be
collateralized by cash, letters of credit or securities
issued or guaranteed by the U.S. government or its
agencies. The cash or instruments collateralizing the
Proposal 4 Fund's loans of securities will be maintained
at all times in a segregated account with the Proposal 4
Fund's custodian, or with a designated sub-custodian, in
an amount at least equal to the current market value of
the loaned securities. From time to time, the Proposal 4
Fund may return a part of the interest earned from the
investment of collateral received for securities loaned to
the borrower and/or a third party, which is unaffiliated
with the Proposal 4 Fund or with Lehman, and which is
acting as a "finder." With respect to loans by the
Proposal 4 Fund of their portfolio securities, the
Proposal 4 Fund would continue to accrue interest on
loaned securities and would also earn income on loans.
Any cash collateral received by the Proposal 4 Fund in
connection with such loans would be invested in eligible
short-term obligations.
Each Proposal 4 Fund will comply with the following
conditions whenever it loans securities: (1) the Fund
must receive at least 100% cash collateral or equivalent
securities from the borrower; (2) the borrower must
increase the collateral whenever the market value of the
securities loaned rises above the level of the collateral;
(3) the Fund must be able to terminate the loan on short
notice, in accordance with SEC policy and industry
standards; (4) the Fund must receive reasonable interest
on the loan, as well as any dividends, interest or other
distributions on the loaned securities, and any increase
in market value; (5) the Fund may pay only reasonable
custodian fees in connection with the loan; and (6) voting
rights on the loaned securities may pass to the borrower
except that, if a material event adversely affecting the
investment in the loaned securities occurs, the Board must
terminate the loan and regain the right to vote the
securities. In lending securities to U.S. and foreign
brokers, dealers, banks or other institutions, the Fund
will be subject to risks, which, like those associated
with other extensions of credit, include the possible loss
of rights in the collateral should the borrower fail
financially.
If this proposal is approved by shareholders, the
Tax-Free Money Market Fund and Municipal Money Market
Fund, in addition to the other Proposal 4 Funds, may enter
into repurchase agreements. Under a repurchase agreement,
a Fund acquires securities subject to the seller's
agreement to repurchase the securities at a specified time
and price. If the seller becomes subject to a proceeding
under the bankruptcy laws or its assets are otherwise
subject to a stay order, the Fund's right to liquidate the
securities may be restricted (during which time the value
of the securities could decline). A Proposal 4 Fund will
enter repurchase agreements in order to earn additional
income on available cash or as a temporary defensive
measure. Absent emergency or extraordinary circumstances,
the Tax-Free Money Market Fund and the Municipal Money
Market Fund do not intend to engage in repurchase
transactions, unless such transactions would not generate
taxable income to such Funds. A repurchase agreement is
considered to be a loan under the 1940 Act.
If this proposal is approved by shareholders, each
Proposal 4 Fund also may, subject to specific
authorization by the SEC, lend money to its affiliate
funds. It is believed that this type of transaction would
be easier and more cost efficient administratively than
lending to funds not affiliated with the Funds. It may
also put the Fund in a better position to borrow money
from these same affiliated funds should any of the Funds
have such a need.
Subject to shareholder approval, the Trustees intend
to replace each Proposal 4 Fund's current fundamental
investment limitation with the following amended
fundamental investment limitation governing lending by the
Fund:
[A Fund may not] [m]ake loans except that the Fund
may (i) purchase or hold debt obligations in accordance
with its investment objective and policies, (ii) enter
into repurchase agreements for securities, (iii) lend
portfolio securities and (iv) subject to specific
authorization by the SEC, lend money to other funds
advised by the Adviser or an affiliate of the Adviser.
The Board of Trustees has concluded that the proposed
amendment will benefit each Proposal 4 Fund by allowing
for added lending flexibility. Accordingly, the Trustees
recommend that shareholders of each of the Proposal 4
Funds vote FOR the proposed amendment. With respect to
each Proposal 4 Fund, the amended limitation, upon
shareholder approval, will become effective immediately.
REQUIRED VOTE
With respect to each Proposal 4 Fund, the affirmative
vote of a majority of such Fund's outstanding voting
securities of such Fund (as defined on page ___) entitled
to vote is required to approve modification of the
investment restriction regarding lending. If Proposal 4
is not approved by the shareholders of a Proposal 4 Fund,
the current investment restriction with respect to making
loans will remain unchanged for that Fund.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" PROPOSAL
4.
PROPOSAL 5. ALL FUNDS
TO RATIFY OR REJECT THE SELECTION OF ERNST & YOUNG LLP AS
INDEPENDENT PUBLIC ACCOUNTANTS
THE PROPOSAL
At the Meeting, shareholders of each Fund will be
asked to vote in favor of ratifying the selection, by a
majority of the Trustees who are not "interested persons"
(as that term is defined in the 1940 Act) of the Trust, of
Ernst & Young LLP under Section 32(a) of the 1940 Act as
independent public accountants to certify every financial
statement of the Trust required by the law or regulation
to be certified by independent public accountants and
filed with the SEC in respect of all or any part of the
fiscal year ending January 31, 1996. Ernst & Young has no
direct or material indirect interest in the Trust. [A
representative of Ernst & Young is expected to be present
at the Meeting and will have an opportunity to make a
statement if he or she desires to do so. Such
representative is also expected to be available to respond
to appropriate questions.]
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" PROPOSAL
5.
Principal Underwriter, Investment Adviser and
Administrator
Lehman sponsors each Fund and acts as distributor of
its shares. LBGAM serves as each Fund's investment
adviser. The business address for both Lehman and LBGAM
is 3 World Financial Center, 200 Vesey Street, New York,
New York 10285. FDISG, located at One Exchange Place,
Boston, Massachusetts 02109, acts as administrator for the
Trust. Patricia L. Bickimer, Secretary of the Trust and
Associate General Counsel of FDISG, is a shareholder of
Holdings.
Broker Non-Votes and Abstentions
If a proxy which is properly executed and returned
accompanied by instructions to withhold authority to vote
represents a broker "non-vote" (i.e. shares held by
brokers or nominees as to which (i) instructions have not
been received from the beneficial owners or the persons
entitled to vote and (ii) the broker or nominee does not
have the discretionary voting power on a particular
matter), is unmarked, or is marked with an abstention
(collectively, "abstentions"), the shares represented
thereby will be considered to be present at the Meeting
for purposes of determining the existence of a quorum for
the transaction of business. With respect to Proposals 1
and 5, neither abstentions nor broker non-votes have any
effect on the outcome. With respect to Proposals 2, 3 and
4, abstentions and broker non-votes has the effect of a
negative vote on the proposal. Any shareholder who has
given a proxy has the right to revoke it at any time prior
to its exercise either by attending the Meeting and voting
his or her shares in person, or by submitting a letter of
revocation or a later-dated proxy to the Trust at the
above address prior to the date of the Meeting.
Shareholders of the Trust will be informed of the
voting results of the Meeting in the Trust's Annual Report
dated January 31, 1996.
SUBMISSION OF SHAREHOLDER PROPOSALS
The Trust is not generally required to hold annual or
special shareholder meetings. Shareholders wishing to
submit proposals for inclusion in a proxy statement for a
subsequent shareholder meeting should send their written
proposals to the Secretary of the Trust at FDISG, One
Exchange Place, Boston, Massachusetts 02109. Shareholder
proposals for inclusion in the Trust's proxy statement for
any subsequent meeting must be received by the Trust a
reasonable period of time prior to any such meeting.
SHAREHOLDERS' REQUEST FOR SPECIAL MEETING
Shareholders holding at least 10% of the Trust's
outstanding voting securities (as defined in the 1940 Act)
may require the calling of a meeting of shareholders for
the purpose of voting on the removal of any Board member
of the Trust. Meetings of shareholders for any other
purpose also shall be called by the Board members when
requested in writing by shareholders holding at least 10%
of the shares then outstanding.
OTHER MATTERS TO COME BEFORE THE MEETING
The Board does not intend to present any other
business at the Meeting, nor is it aware that any
shareholder intends to do so. If, however, any other
matters are properly brought before the Meeting, the
persons named in the accompanying form of proxy will vote
thereon in accordance with their judgment.
___, 1995
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY.
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING ARE
THEREFORE URGED TO COMPLETE, SIGN, DATE AND RETURN THE
PROXY CARD AS SOON AS POSSIBLE IN THE ENCLOSED POSTAGE-
PAID ENVELOPE OR BY FAX ______________.
LEHMAN BROTHERS INSTITUTIONAL FUNDS GROUP TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned holder of shares of Beneficial Interest of Lehman
Brothers Institutional Funds Group Trust, a Massachusetts business
trust (the "Trust"), hereby appoints Michael C. Kardok and
Elizabeth A. Russell, and each of them, attorneys and proxies for
the undersigned, with full powers of substitution and revocation,
to represent the undersigned and to vote on behalf of the
undersigned all shares of Beneficial Interest which the
undersigned is entitled to vote at the Special Meeting of
Shareholders of the Trust to be held at the offices of the Trust
at 3 World Financial Center, 200 Vesey Street, New York, New York
10285 at 10:00 a.m., on January 31, 1996, and any adjournments
thereof. The undersigned hereby acknowledges receipt of the
Notice of Special Meeting and Proxy Statement and hereby instructs
said attorneys and proxies to vote said shares as indicated
hereon. In their discretion, the proxies are authorized to vote
upon such other business as may properly come before the Meeting.
A majority of the proxies present and acting at the Meeting in
person or by substitute (or, if only one shall be so present, then
that one) shall have and may exercise all of the power and
authority of said proxies hereunder. The undersigned hereby
revokes any proxy previously given.
NOTE: Please
sign exactly as your name appears on this
Proxy. If
joint owners, EITHER may sign this Proxy.
When signing
as attorney, executor, administrator,
trustee,
guardian or corporate officer, please give your
full title.
DATE:
Signature(s) (Title(s), if applicable)
PLEASE
SIGN, DATE AND RETURN
PROMPTLY IN
THE ENCLOSED ENVELOPE
Please indicate your vote by an "X" in the appropriate box below.
This proxy, if properly executed, will be voted in the manner
directed by the undersigned shareholder.
IF YOU ARE A SHAREHOLDER OF THE CASH MANAGEMENT FUND, YOU SHOULD
VOTE ONLY ON PROPOSALS 1, 2 AND 5. IF YOU ARE A SHAREHOLDER OF
ANY OTHER FUND, YOU SHOULD VOTE ON ALL PROPOSALS. IF NO DIRECTION
IS MADE, THIS PROXY WILL BE VOTED FOR ELECTION OF NOMINEES AND FOR
PROPOSALS 2, 3 (All Funds except Cash Management Fund), 4 (All
Funds except Cash Management Fund) and 5.
Please refer to the Proxy Statement for a discussion of the
Proposals.
1. ELECTION OF NOMINEES FOR TRUSTEE OF THE TRUST
FOR all nominees listed *
(except as marked to the contrary below)
WITHHOLD AUTHORITY *
to vote for all nominees
Charles F. Barber, James A. Carbone, Burt N. Dorsett,
Andrew F. Gordon, Edward J. Kaier, and S. Donald Wiley
(Instruction: To withhold authority for any individual, write his
name on the line below)
__________________________________________________________________
__
2. APPROVAL OF NEW INVESTMENT ADVISORY AGREEMENT FOR
* AGAINST * ABSTAIN *
3. APPROVAL OF MODIFICATION OF INVESTMENT
FOR * AGAINST * ABSTAIN *
RESTRICTION REGARDING BORROWING
4. APPROVAL OF MODIFICATION OF INVESTMENT
FOR * AGAINST * ABSTAIN *
RESTRICTION REGARDING MAKING LOANS
5. RATIFICATION OF SELECTION OF INDEPENDENT
FOR * AGAINST * ABSTAIN *
PUBLIC ACCOUNTANTS.
The Board of Trustees recommends that the shareholders vote "FOR"
election of the nominees for Trustee of the Trust; vote "FOR"
approval of the new investment advisory agreement for each Fund
between the Trust, on behalf of such Fund, and Lehman Brothers
Global Asset Management Inc.; vote "FOR" approval of a
modification to the Trust's investment restriction regarding
borrowing; vote "FOR" approval of a modification to the Trust's
investment restriction regarding making loans; and vote "FOR"
ratification of selection of independent public accountants.
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G:\SHARED\LEHMAN\INSTITUT\PROXIES\AVDFEE.DOC
g:\shared\lehman\institut\proxies\card.doc
