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:
[ ] Preliminary Proxy Statement
[ X ] 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):
[ ] $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
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and state how it was determined.
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Lehman Brothers Institutional Funds Group Trust
Dear Lehman Brothers Institutional Funds 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 Inc.,
the Funds' investment adviser. 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 were to be increased, which would
only occur 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
James A. Carbone
Co-Chairman of the Board of Trustees
ANDREW D. GORDON
Andrew D. Gordon
Co-Chairman of the Board of Trustees
and President
LEHMAN BROTHERS INSTITUTIONAL FUNDS GROUP TRUST
One Exchange Place
Boston, Massachusetts 02109
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 the
offices of Lehman Brothers Inc. at 3 World Financial
Center, 200 Vesey Street, 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 (617) 871-
2569 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
January 3, 1996
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 Jane B. Doe
u/t/d 12/28/78
Custodial 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
One Exchange Place
Boston, Massachusetts 02109
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 January 3, 1996.
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
5,380,980,687.98 shares of the Prime Money Market Fund,
2,107,558,759.33 shares of the Prime Value Money Market Fund,
118,693,800.32 shares of the Government Obligations Money Market
Fund, 1,040,116.10 shares of the Cash Management Fund,
250,592,015.97 shares of the Treasury Instruments Money Market
Fund II, 75,640,162.76 shares of the Tax-Free Money Market Fund
and 114,792,248.60 shares of the Municipal Money Market Fund.
Appendix A to this Proxy Statement sets forth with respect to each
Fund a list of shareholders who, to the knowledge of the
management of the Trust, beneficially own more than 5% of the
outstanding shares of such Fund as of the record date. As of the
record date, the officers and the Trustees of the Trust
beneficially owned less than 1% of the outstanding shares of each
Fund 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 advisory
agreement between the Trust, on behalf of each Fund, and Lehman
Brothers Global Asset Management Inc., each Fund's investment
adviser, containing substantially the same terms as the current
investment advisory agreement, with the exception of an increase
in the contractual investment advisory fees. This proposal 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 any service and distribution fees) unless the expense
cap is increased after sixty (60) days notice to shareholders.
All Funds
Proposal 3 Approval or disapproval of the modification of each
Fund's investment restriction regarding borrowing. All Funds
(except Cash Management Fund)
Proposal 4 Approval or disapproval of the modification of each
Fund's investment restriction regarding making loans. All Funds
(except Cash Management Fund) Proposal 5 Ratification or
rejection of the selection of Ernst & Young LLP as the Trust's
independent public accountants for the fiscal year ending January
31, 1996. All Funds
Proposal 1. All Funds
To Elect Six (6) Trustees Of The Trust
The Proposal
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 Position with Served as a
Number of Shares and
Occupation and Other the Trust Trustee Since %
Beneficially Owned***
Trusteeships** During
as of December 21, 1995
the Past Five Years
Charles F. Barber, Age 78
Consultant; formerly
Chairman of the Board,
ASARCO Incorporated Trustee 1993
None
*James A. Carbone, Age 43
Managing Director,
Lehman Brothers Inc. Co-Chairman 1995
None
of the Board
and Trustee
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 Trustee 1993
None
*Andrew D. Gordon, Age 41
Managing Director, Lehman
Brothers Inc. Co-Chairman
of the Board, Trustee and
President 1994 None
Edward J. Kaier, Age 50
Partner with the Law Firm
of Hepburn Willcox Hamilton
& Putnam Trustee
1993 None
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 Trustee 1993
None
* ``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 Position with Served as an Officer
Number of Shares
Occupation the Trust Since
and % Beneficially
and Trusteeships*
Owned** as of
During the Past Five Years
December 21, 1995
and % Beneficially
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 Vice President and
Investment
Officer 1993 None
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 Vice President and
Investment
Officer 1994 None
Michael C. Kardok, Age 36
Vice President, First Data
Investor Services Group, Inc.;
prior to May 1994, Vice President,
The Boston Company Advisors,
Inc. Treasurer
1994 None
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. Secretary
1994 None
* 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 $104,841 (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 Person,Position Aggregate Pension or
Estimated Total
Compensation
Retirement Annual Compensation
From Trust
Benefits Benefits From the Trust
Accrued as Upon and Fund Complex
Part of Trust Retirement Paid to Trustees**
Expenses
Charles F. Barber
Trustee $25,000
$0 N/A $25,000 (1)
*James A. Carbone
Co-Chairman of the
Board and Trustee $0 $0
N/A $0 (2)
Burt N. Dorsett
Trustee $25,000
$0 N/A $52,500 (2)
*Andrew D. Gordon
Co-Chairman of the
Board, Trustee
and President $0 $0
N/A $0 (2)
Edward J. Kaier
Trustee $25,000
$0 N/A $25,000 (1)
S. Donald Wiley
Trustee $25,000
$0 N/A $25,000 (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 Funds' 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.
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 Address* Position with LBGAM Principal
Occupation
Robert J. Lunn Director and Chief Head
of Financial Services Division --
Executive Officer
Lehman
James A. Carbone Director and President Head of
Asset Management
- -- Lehman
Andrew D. Gordon Director and Chief Managing
Director -- Lehman
Operating Officer
Peter Barbieri Chief Financial Officer
Senior Vice President -- Lehman
Jack H. Jacobs Managing Director
Managing Director -- Lehman
Andrew T. Osinski Managing Director Managing
Director -- Lehman
John M. Winters Senior Vice President Senior
Portfolio Manager -- Lehman
Timothy J. Donovan Senior Vice President
Portfolio Manager -- Lehman
Ellen M. Bermel Vice President
Vice President & Portfolio Manager --
Lehman
Nicholas Rabiecki III Vice President
Vice President & Portfolio Manager --
Lehman
Amy S. Gilfenbaum Treasurer
Treasurer -- Lehman
* The address for each Director and executive officer of LBGAM is
3 World Financial Center, New York, New York 10285.
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 contractual advisory fee to .20% of the
value of each Fund's average daily net assets.
In addition to investment advisory fees paid to LBGAM, the
Trust has also reimbursed Lehman in the amount of $547,639 during
the current fiscal year ending January 31, 1996 for certain
expenses associated with ``Lehman Brothers ExpressNet'' (``LEX''),
a computer-based order entry system. The Trust's reimbursement to
Lehman for certain expenses associated with LEX is not impacted by
the New Agreement.
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. 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 performance of the Funds
while under the Adviser's management to be superior compared to
other similar funds. In light of the fact that the Board
considered (a) LBGAM's advisory and management services to be
highly satisfactory, (b) the Funds' performance under LBGAM's
management to be superior and (c) the advisory fees under the New
Agreement to be lower than similiar investment funds, the Board
concluded that the advisory fee under the New Agreement for each
Fund was fair and reasonable .
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). The Adviser 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. These voluntary fee waiver and
expense reimbursement arrangements will not be changed unless
shareholders are provided at least 60 days' advance written
notice. 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
excluding advisory fees 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 $1,770,467 in investment advisory
fees, after giving effect to waivers and reimbursement of expenses
of certain Funds. Without such waivers and reimbursements, the
aggregate amount paid by the Trust to LBGAM would have been
$5,255,719. Had the proposed fee been in effect at the time, the
Trust would have paid LBGAM the same amount 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 $10,315,150. These aggregate amounts include fees
paid with respect to investment portfolios of the Trust that have
ceased operations. 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 operating as
of the date of this proxy statement.
Current
Investment Proposed Investment
Advisory Fees
Advisory Fees
Fund Name After Waivers and Absent Waivers After Waivers
and Absent Waivers
Reimbursements and
Reimbursements and
Reimbursements Reimbursements
Prime Money
Market Fund $1,215,000 $2,386,734
$1,215,000 $4,773,468
Prime Value
Money Market
Fund $470,165 $1,858,719
$470,165 $3,717,438 Government
Obligations
Money
Market Fund $38,176 $86,255
$38,176 $172,510
Cash Management
Fund $0 $11,931
$0 $23,862
Treasury Instruments
Money Market
Fund II $125,899 $357,350
$125,899 $714,700
Tax-Free Money
Market Fund $0 $59,392
$0 $118,784
Municipal Money
Market Fund $72,797 $223,512
$72,797 $447,024
As indicated by the table above, after waivers and reimbursements,
had the proposed fee been in effect for the fiscal year ended
January 31, 1995 there would have been a 0% increase in the actual
advisory fees paid. Absent the waivers and reimbursements in
effect for the Funds, the proposed fee increase, expressed as a
percentage, would have been 100%.
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:
Investment Advisory Fee Rate*
Fund Name Fund Size
Before After
as of 12/20/95
Waivers Waivers**
Lehman Brothers
Funds, Inc.
Daily Income Fund $641,512,930 .30%
.20%(1)
Municipal Income Fund $217,435,858 .30%
.21%(1)
New York Municipal
Money Market
Fund*** $ 62,972,596
.30% .20%(2)
* 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 each Fund.
** 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.
(1) For the year ended July 31, 1995
(2) Estimated
The following tables compare the costs and expenses that a
shareholder can expect to incur as an investor in each class of
each Fund under the Current Agreement, based upon operating
expenses for the fiscal year ending January 31, 1995
(restated to reflect expected fees for the fiscal year ending
January 31, 1996), to the costs and expenses under the New
Agreement:
Prime Money Market Fund
Class A Class B
Class C Class E
Current Proposed Current
Proposed Current Proposed Current Proposed
Fees Fees Fees
Fees Fees Fees Fees Fees
Annual Operating
Expenses
(as a percentage
of average net
assets)
Advisory Fees .10% .10%* .10% .10%*
.10% .10%* .10% .10%*
Rule 12b-1 fees None None .25% .25%
.35% .35% .15% .15%
Other Expenses
-- including
Administration
Fees .08% .08% .08%
.08% .08% .08% .08% .08%
Total Fund
Operating Expenses
(after waivers or
expense
reimbursement) .18% .18% .43% .43%
.53% .53% .33% .33% Total Fund
Operating
Expenses (absent
waivers and expense
reimbursement) .25% .35% .50% .60%
.60% .70% .40% .50%
Prime Value Money Market Fund
Class A Class B
Class C Class E
Current Proposed Current
Proposed Current Proposed Current Proposed
Fees Fees Fees
Fees Fees Fees Fees Fees
Annual Operating
Expenses
(as a percentage
of average net
assets)
Advisory Fees .10% .10%* .10% .10%*
.10% .10%* .10% .10%*
Rule 12b-1 fees None None .25% .25%
.35% .35% .15% .15%
Other Expenses
-- including
Administration
Fees .08% .08% .08%
.08% .08% .08% .08% .08%
Total Fund
Operating Expenses
(after waivers or
expense
reimbursement) .18% .18% .43% .43%
.53% .53% .33% .33% Total Fund
Operating
Expenses (absent
waivers and expense
reimbursement) .25% .35% .50% .60%
.60% .70% .40% .50%
* After waivers or expense reimbursements.
Government Obligations Money Market Fund
Class A Class B
Class C Class E
Current Proposed Current
Proposed Current Proposed Current Proposed
Fees Fees Fees
Fees Fees Fees Fees Fees
Annual Operating
Expenses
(as a percentage
of average
net assets)
Advisory Fees
(net of applicable
fee waivers) .04% .04% .04%
.04% .04% .04% .04% .04%
Rule 12b-1 fees None None .25% .25%
.35% .35% .15% .15%
Other Expenses
-- including
Administration
Fees .14% .14% .14%
.14% .14% .14% .14% .14% Total Fund
Operating Expenses
(after waivers or
expense
reimbursement) .18% .18% .43% .43%
.53% .53% .33% .33% Total Fund
Operating
Expenses (absent
waivers and expense
reimbursement) .34% .44% .59% .69%
.69% .79% .49% .59%
Cash Management Fund
Class A
Current Fees Proposed Fees
Annual Operating
Expenses
(as a percentage
of average
net assets)
Advisory Fees
(net of applicable
fee waivers) .00% .00%
Rule 12b-1 fees None None
Other Expenses
-- including
Administration
Fees .26% .26%
Total Fund
Operating Expenses
(after waivers or
expense
reimbursement) .26% .26%
Total Fund
Operating Expenses
(absent waivers and
expense
reimbursement) 1.84% 1.94%
Treasury Instruments Money Market Fund II
Class A Class B
Class C Class E
Current Proposed Current
Proposed Current Proposed Current Proposed
Fees Fees Fees
Fees Fees Fees Fees Fees
Annual Operating
Expenses
(as a percentage
of average net
assets)
Advisory Fees .10% .10%* .10% .10%*
.10% .10%* .10% .10%*
Rule 12b-1 fees None None .25% .25%
.35% .35% .15% .15%
Other Expenses
-- including
Administration
Fees .08% .08% .08%
.08% .08% .08% .08% .08%
Total Fund
Operating Expenses
(after waivers or
expense
reimbursement) .18% .18% .43% .43%
.53% .53% .33% .33% Total Fund
Operating
Expenses (absent
waivers and expense
reimbursement) .25% .35% .50% .60%
.60% .70% .40% .50%
* After waivers or expense reimbursements.
Tax-Free Money Market Fund
Class A Class B
Class C Class E
Current Proposed Current
Proposed Current Proposed Current Proposed
Fees Fees Fees
Fees Fees Fees Fees Fees
Annual Operating
Expenses
(as a percentage
of average
net assets)
Advisory Fees
(net of applicable
fee waivers) .03% .03% .03%
.03% .03% .03% .03% .03%
Rule 12b-1 fees None None .25% .25%
.35% .35% .15% .15%
Other Expenses
-- including
Administration
Fees .15% .15% .15%
.15% .15% .15% .15% .15% Total Fund
Operating Expenses
(after waivers or
expense
reimbursement) .18% .18% .43% .43%
.53% .53% .33% .33% Total Fund
Operating
Expenses (absent
waivers and expense
reimbursement) .35% .45% .60% .70%
.70% .80% .50% .60%
Municipal Money Market Fund
Class A Class B
Class C Class E
Current Proposed Current
Proposed Current Proposed Current Proposed
Fees Fees Fees
Fees Fees Fees Fees Fees
Annual Operating
Expenses
(as a percentage
of average
net assets)
Advisory Fees
(net of applicable
fee waivers) .06% .06% .06%
.06% .06% .06% .06% .06%
Rule 12b-1 fees None None .25% .25%
.35% .35% .15% .15%
Other Expenses
-- including
Administration
Fees .12% .12% .12%
.12% .12% .12% .12% .12% Total Fund
Operating Expenses
(after waivers or
expense
reimbursement) .18% .18% .43% .43%
.53% .53% .33% .33% Total Fund
Operating
Expenses (absent
waivers and expense
reimbursement) .32% .42% .57% .67%
.67% .77% .47% .57%
Example: Based on expenses incurred for the year ended January 31,
1995, 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 Year 3 Years
5 Years 10 Years
Proposed Current Current Proposed
Current Proposed Current Proposed
Fees Fees Fees
Fees Fees Fees Fees Fees
Class A $2 $2 $6 $6
$10 $10 $23 $23
Class A --
Cash
Management
Fund Only $3 $3 $8 $8
$15 $15 $33 $33
Class B $4 $4 $14
$14 $24 $24 $54 $54
Class C $5 $5 $17
$17 $30 $30 $66 $66
Class E $3 $3 $11
$11 $19 $19 $42 $42
After carefully evaluating the foregoing factors and materials
presented to it (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 Funds' shareholders.
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.
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 Proposal
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 enter into
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
avoid otherwise selling securities during unfavorable market
conditions. 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 that the Fund may (i)
borrow money, for temporary or emergency purposes (not for
leveraging or investment), from banks or, subject to specific
authorization by the SEC, from funds advised by the Adviser or an
affiliate of the Adviser, and (ii) engage in reverse repurchase
agreements, provided that (i) and (ii) in combination do not
exceed one-third of the value of the particular Fund's total
assets. A Fund may not mortgage, pledge or hypothecate its assets
except in connection with such borrowings and reverse repurchase
agreements and then only in amounts not exceeding one-third of the
value of the particular Fund's total assets. 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 12 ) 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 Proposal
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. A repurchase agreement is considered
to be a loan under the 1940 Act. 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
presently intend to engage in repurchase transactions,
unless such transactions would not generate taxable income to such
Funds.
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 (as
defined on page 12) 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 First Data Investor Services Group, Inc., 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.
January 3, 1996
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 (617) 871-2569.
APPENDIX A
PRINCIPAL BENEFICIAL OWNERS AS OF DECEMBER 21, 1995
Fund Name Names and
Addresses of
Beneficial Owners Number of
Shares
Beneficially
Owned Percentage of
Shares
Beneficially
Owned
Prime Money Market Fund Harris Trust And Savings Bank
200 West Monroe St.
Chicago, IL 60606 406,906,701.80 7.56% Tanfir & Co.
First Interstate Bank
26610 West Agoura Road
Calabasas, CA 91302
345,910,609.01 6.43% Bankers Trust Co. Sec. Lending
Reserve Desk
35th Floor
130 Liberty Street
New York, NY 10006
335,000,000.00 6.23% Prime Value Money Market Fund
NationsBank of Texas, NA
1401 Elm Street
11th Floor
Dallas, TX 75202-2911 155,036,000.00 7.36% Bank of America
Illinois
231 South Lasalle
Room 2015
Chicago, IL 60697 145,727,000.00 6.91% Mobilemedia
Communications Inc.
65 Challenger Road
Ridgefield Park, NJ 07660 108,685,433.17 5.16% Trulin & Co.
P.O. Box 1412
Rochester, NY 14603
107,867,785.67 5.12% Government Obligations Money
Market Fund
Bank of Boston
150 Royal St.
Canton, MA 02021
35,820,699.25
30.18% Oster & Co.
P.O. Box 1338
Victoria, TX 77902
14,007,960.10 11.80% New United Motor Manufacturing, Inc.
45500 Fremont Blvd.
Fremont, CA 94538
13,870,000.00 11.69% Old Kent Bank and Trust Company
Investment Management Division
Second Floor Monroe Building
111 Lyon N.W.
Grand Rapids, MI 49503
6,000,000.00 5.06%
Fund Name Names and
Addresses of
Beneficial Owners Number of
Shares
Beneficially
Owned Percentage of
Shares
Beneficially
Owned
Government Obligations Money
Market Fund (continued)
Hare & Co.
c/o Bank of New York
Special Processing Department
One Wall Street,
5th Floor
New York, NY 10286
13,401,386.38
11.29% Cash Management Fund Lehman Brothers Inc.
200 Vesey Street
28th Floor
New York, NY 10285-1200
1,040,000.00 99.99% Treasury Instruments Money Market
Fund II
Macerich Partnership, L.P.
233 Wilshire Blvd., Suite 700
Santa Monica, CA 90401
65,286,886.05
26.05% Health Care Service Corporation
233 N. Michigan Avenue
10th Floor
Chicago, IL 60601 53,852,989.02 21.49% BSDT as Escrow Agent
for APEX
Property & Track Exchange, Inc.
1606Y
One Cabot Road
Medford, MA 02155 25,095,083.51 10.01% Bank of Boston
150 Royal St.
Mail Stop 450208
Canton, MA 02021
14,428,693.54 5.76% Perusahaan Petambangan Minyak Dan
Gas Bumi Negara (Pertamina)
350 Park Avenue
9th Floor
New York, NY 10022-6022
24,940,045.30 9.95%
Silicon Valley Group Inc.
2240 Ringwood Ave.
San Jose, CA 95131
13,184,656.43 5.26% Tax-Free Money Market Fund Trulin & Co.
P.O. Box 1412
Rochester, NY 14603 15,704,399.01 20.76% Bank of Boston
150 Royal St.
Canton, MA 02021 12,320,706.41 16.29% Edrayco
c/o First National Bank of Gainsville,
GA
P.O. Box 937
Gainsville, GA 30503 7,602,885.59 10.05%
Fund Name Names and
Addresses of
Beneficial Owners Number of
Shares
Beneficially
Owned Percentage of
Shares
Beneficially
Owned
Tax-Free Money Market Fund
(continued)
Douglas S. Schatz
c/o Lehman Brothers
1009 Lochland Court
Fort Collins, CO 80524-9644
8,711,417.47
11.52% Richard Egan & Maureen Egan
TTEES The Richard Egan Trust
DTD 5/16/86
c/o Lehman Brothers
2 Westborough Bus. Pk., 200 Frieberg
Westborough, MA 01581-3911 5,304,730.18 7.01% Trust Company
of Knoxville
P.O. Box 789
Knoxville, TN 37901-0789 4,181,718.30 5.53% Municipal Money
Market Fund Employers Reinsurance Corporation
P.O. Box 2991
Overland Park, KS 66201-1391 25,556,685.46 22.26% Deposit
Guaranty National Bank
Trust Division
P.O. Box 23110
Jackson, MS 39225-3100 12,163,725.00 10.60% Synopsys Inc.
700 East Middlefield Road
Mountain View, CA 94043 10,639,000.00 9.27%
National Data Corp.
One National Data Plaza
Atlanta, GA 30329 8,000,000.00 6.97% Sinclair Oil Corp.
P.O. Box 30825
Salt Lake City, Utah 84130 7,500,000.00 6.53% Publix
Supermarket
P.O. Box 407
Lakeland, FL 33802 7,200,000.00 6.27% Society Asset
Management, Inc.
127 Public Square
19th Floor
Cleveland, OH 44114 6,194,449.00 5.40% The Gap, Inc.
900 Cherry Avenue
San Bruno, CA 94066 6,000,000.00 5.23%
EXHIBIT A
[Name of Fund]
LEHMAN BROTHERS INSTITUTIONAL FUNDS GROUP TRUST
PROPOSED INVESTMENT ADVISORY AGREEMENT
February 1, 1996
Lehman Brothers Global Asset Management Inc.
Three World Trade Center
New York, NY
Ladies and Gentlemen:
Lehman Brothers Institutional Funds Group Trust (the ``Trust''), a
business trust organized under the laws of The Commonwealth of
Massachusetts, confirms its agreement with Lehman Brothers Global
Asset Management Inc. (the ``Advisor'') regarding investment
advisory services to be provided by the Advisor to the [Name of
Fund] (the ``Fund''), a portfolio of the Trust. The Advisor agrees
to provide services upon the following terms and conditions:
1. Investment Description; Appointment.
The Trust anticipates that the Fund will employ its capital by
investing and reinvesting in investments of the kind and in
accordance with the limitations specified in the Trust's
Declaration of Trust dated November 25, 1992, as amended from time
to time (the ``Declaration of Trust ''), in the prospectus (the
``Prospectus'') and the statement of additional information (the
``Statement'') describing the Fund filed with the Securities and
Exchange Commission as part of the Trust's Registration Statement
on Form N-1A, as amended from time to time, and in the manner and
to the extent as may from time to time be approved by the Board of
Trustees of the Trust. Copies of the Prospectus, the Statement and
the Declaration of Trust have been or will be submitted to the
Advisor. The Trust desires to employ and appoints the Advisor to
act as the Fund's investment adviser. The Advisor accepts the
appointment and agrees to furnish the services for the
compensation set forth below.
2. Services as Investment Advisor.
Subject to the supervision and direction of the Board of Trustees
of the Trust, the Advisor has general oversight responsibility for
the investment advisory services provided to the Fund and will
exercise this responsibility in accordance with the Declaration of
Trust, the Investment Company Act of 1940 and the Investment
Advisers Act of 1940, as the same may from time to time be
amended, and with the Fund's investment objective and policies as
stated in the Prospectus and Statement of Additional Information
relating to the Fund as from time to time in effect. In connection
therewith, the Advisor will, among other things, (a) participate
in the formulation of the Fund's investment policies, (b) analyze
economic trends affecting the Fund, and (c) monitor the brokerage
and research services (as those terms are defined in Section 28(e)
of the Securities Act of 1934) that are provided to the Fund and
may be considered by the Advisor in selecting brokers or dealers
to execute particular transactions.
3. Information Provided to the Trust.
The Advisor will keep the Trust informed of developments
materially affecting the Fund, and will, on its own initiative,
furnish the Trust from time to time with whatever information the
Advisor believes is appropriate for this purpose.
4. Standard of Care.
The Advisor will exercise its best judgment in rendering the
services described in paragraph 2 of this Agreement. The Advisor
will not be liable for any error of judgment or mistake of law or
for any loss suffered by the Fund in connection with the matters
to which this Agreement relates, except that nothing in this
Agreement may be deemed to protect or purport to protect the
Advisor against any liability to the Trust or to shareholders of
the Fund to which the Advisor would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence on its part
in the performance of its duties or by reason of the Advisor's
reckless disregard of its obligations and duties under this
Agreement.
5. Compensation.
In consideration of the services rendered pursuant to this
Agreement, the Trust will pay the Advisor on the first business
day of each month a fee for the previous month at the annual rate
of %1 of the value of the Fund's average daily net assets. The
fee for the period from the date the Fund commences its investment
operations to the end of the month during which the Fund commences
its investment operations will be prorated according to the
proportion that the period bears to the full monthly period. Upon
any termination of this Agreement before the end of a month, the
fee for such part of that month will be prorated according to the
proportion that the period bears to the full monthly period and
will be payable upon the date of termination of this Agreement.
For the purpose of determining fees payable to the Advisor, the
value of the Fund's net assets will be computed at the times and
in the manner specified in the Prospectus and/or the Statement.
6. Expenses.
The Advisor will bear all expenses in connection with the
performance of its services under this Agreement. The Fund will
bear certain other expenses to be incurred in its operation,
including, but not limited to: costs incurred in connection with
the Trust's organization; investment advisory, administration and
shareholder servicing fees; fees for necessary professional and
brokerage services; fees for any pricing service; the costs of
regulatory compliance; and the costs associated with maintaining
the Trust's legal existence; and costs of corresponding with
shareholders of the Fund.
7. Reduction of Fee.
If in any fiscal year of the Fund, the aggregate expenses of the
Fund (including fees pursuant to this Agreement and the Trust's
administration agreement relating to the Fund, but excluding
interest, taxes, brokerage fees, fees paid by the Fund pursuant to
the Trust's shareholder services plan and, if permitted by the
relevant state securities commissions, extraordinary expenses)
exceed the expense limitation of any state having jurisdiction
over the Fund, the Advisor will reduce its fee to the Fund for
that excess expense to the extent required by state law in the
same proportion as its advisory fee bears to the Fund's aggregate
fees for investment advice and administration. A fee reduction
pursuant to this paragraph 7, if any, will be estimated,
reconciled and paid on a monthly basis.
8. Services to Other Companies or Accounts.
(a) The Trust understands that the Advisor now acts, will continue
to act and may act in the future as investment adviser to
fiduciary and other managed accounts, and may act in the future as
investment adviser to other investment companies, and the Trust
has no objection to the Advisor so acting, provided that whenever
the Fund and one or more fiduciary and other managed accounts or
other investment companies advised by the Advisor have available
funds for investment, investments suitable and appropriate for
each will be allocated in accordance with a formula believed by
the Advisor to be equitable to each. The Trust recognizes that in
some cases this procedure may adversely affect the price paid or
received by the Fund or the size of the position obtained or
disposed of by the Fund.
(b) The Trust understands that the persons employed by the Advisor
to assist in the performance of the Advisor's duties under this
Agreement will not devote their full time to such service and
nothing contained in this Agreement will be deemed to limit or
restrict the right of the Advisor or any affiliate of the Advisor
to engage in and devote time and attention to other businesses or
to render services of whatever kind or nature.
1 Please see Schedule A for a list of fees.
9. Term of Agreement.
(a) This Agreement will become effective as of the date hereof and
will continue for an initial two-year term and will continue
thereafter so long as the continuance is specifically approved at
least annually by (i) the Board of Trustees of the Trust or (ii) a
vote of a ``majority'' (as defined in the Investment Company Act
of 1940, as amended (the ``1940 Act'')) of the Fund's outstanding
voting securities, provided that in either event the continuance
is also approved by a majority of the Board of Trustees who are
not ``interested persons'' (as defined in the 1940 Act) of any
party to this Agreement, by vote cast in person at a meeting
called for the purpose of voting on the approval.
(b) This Agreement is terminable, without penalty, on 60 days'
written notice, by the Board of Trustees of the Trust or by vote
of holders of a majority of the Fund's outstanding voting
securities, or upon 90 days' written notice, by the Advisor.
(c) This Agreement will terminate automatically in the event of
its ``assignment'' (as defined in the 1940 Act).
10. Representation by the Trust.
The Trust represents that a copy of the Declaration of Trust is on
file with the Secretary of The Commonwealth of Massachusetts and
with the Boston City Clerk.
11. Limitation of Liability.
The Trust and the Advisor agree that the obligations of the Trust
under this Agreement will not be binding upon any of the Trustees
of the Trust, shareholders of the Fund, nominees, officers,
employees or agents, whether past, present or future, of the
Trust, individually, but are binding only upon the assets and
property of the Fund, as provided in the Declaration of Trust. The
execution and delivery of this Agreement have been authorized by
the Trustees of the Trust and signed by an authorized officer of
the Trust, acting as such, and neither the authorization by the
Trustees, nor the execution and delivery by the officer will be
deemed to have been made by any of them individually or to impose
any liability on any of them personally, but will bind only the
assets and property of the Fund as provided in its Declaration of
Trust. No series of the Trust, including the Fund, will be liable
for any claims against any other series.
If the foregoing is in accordance with your understanding, kindly
indicate your acceptance of this Agreement by signing and
returning the enclosed copy of this Agreement.
Very truly yours,
LEHMAN BROTHERS INSTITUTIONAL
FUNDS GROUP TRUST
By:
Name:
Title:
Accepted:
LEHMAN BROTHERS GLOBAL
ASSET MANAGEMENT INC.
By:
Name:
Title:
SCHEDULE A
effective February 1, 1996
Name of Fund Contractual
Rate Prime Money Market Fund .20% Prime Value Money Market
Fund .20% Government Obligations Money Market Fund .20% Cash
Management Fund .20% Treasury Instruments Money Market Fund II
.20% Municipal Money Market Fund .20% Tax-Free Money Market
Fund .20%
EXHIBIT A
[Name of Fund]
LEHMAN BROTHERS INSTITUTIONAL FUNDS GROUP TRUST
PROPOSED
INVESTMENT ADVISORY AGREEMENT
February 1,
1996
Lehman Brothers Global Asset Management Inc.
Three World Trade Center
New York, NY
Ladies and Gentlemen:
Lehman Brothers Institutional Funds Group Trust (the
"Trust"), a business trust organized under the laws of The
Commonwealth of Massachusetts, confirms its agreement with Lehman
Brothers Global Asset Management Inc. (the "Advisor") regarding
investment advisory services to be provided by the Advisor to the
[Name of Fund] (the "Fund"), a portfolio of the Trust. The
Advisor agrees to provide services upon the following terms and
conditions:
1. Investment Description; Appointment.
The Trust anticipates that the Fund will employ its
capital by investing and reinvesting in investments of the kind
and in accordance with the limitations specified in the Trust's
Declaration of Trust dated November 25, 1992, as amended from time
to time (the "Declaration of Trust "), in the prospectus (the
"Prospectus") and the statement of additional information (the
"Statement") describing the Fund filed with the Securities and
Exchange Commission as part of the Trust's Registration Statement
on Form N-1A, as amended from time to time, and in the manner and
to the extent as may from time to time be approved by the Board of
Trustees of the Trust. Copies of the Prospectus, the Statement
and the Declaration of Trust have been or will be submitted to the
Advisor. The Trust desires to employ and appoints the Advisor to
act as the Fund's investment adviser. The Advisor accepts the
appointment and agrees to furnish the services for the
compensation set forth below.
2. Services as Investment Adviser.
Subject to the supervision and direction of the Board
of Trustees of the Trust, the Advisor has general oversight
responsibility for the investment advisory services provided to
the Fund and will exercise this responsibility in accordance with
the Declaration of Trust, the Investment Company Act of 1940 and
the Investment Advisers Act of 1940, as the same may from time to
time be amended, and with the Fund's investment objective and
policies as stated in the Prospectus and Statement of Additional
Information relating to the Fund as from time to time in effect.
In connection therewith, the Advisor will, among other things, (a)
participate in the formulation of the Fund's investment policies,
(b) analyze economic trends affecting the Fund, and (c) monitor
the brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Act of 1934) that are provided to
the Fund and may be considered by the Advisor in selecting brokers
or dealers to execute particular transactions.
3. Information Provided to the Trust.
The Advisor will keep the Trust informed of
developments materially affecting the Fund, and will, on its own
initiative, furnish the Trust from time to time with whatever
information the Advisor believes is appropriate for this purpose.
4. Standard of Care.
The Advisor will exercise its best judgment in
rendering the services described in paragraph 2 of this Agreement.
The Advisor will not be liable for any error of judgment or
mistake of law or for any loss suffered by the Fund in connection
with the matters to which this Agreement relates, except that
nothing in this Agreement may be deemed to protect or purport to
protect the Advisor against any liability to the Trust or to
shareholders of the Fund to which the Advisor would otherwise be
subject by reason of willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or by
reason of the Advisor's reckless disregard of its obligations and
duties under this Agreement.
5. Compensation.
In consideration of the services rendered pursuant to
this Agreement, the Trust will pay the Advisor on the first
business day of each month a fee for the previous month at the
annual rate of __% of the value of the Fund's average daily net
assets. The fee for the period from the date the Fund commences
its investment operations to the end of the month during which the
Fund commences its investment operations will be prorated
according to the proportion that the period bears to the full
monthly period. Upon any termination of this Agreement before the
end of a month, the fee for such part of that month will be
prorated according to the proportion that the period bears to the
full monthly period and will be payable upon the date of
termination of this Agreement. For the purpose of determining
fees payable to the Advisor, the value of the Fund's net assets
will be computed at the times and in the manner specified in the
Prospectus and/or the Statement.
6. Expenses.
The Advisor will bear all expenses in connection with
the performance of its services under this Agreement. The Fund
will bear certain other expenses to be incurred in its operation,
including, but not limited to: costs incurred in connection with
the Trust's organization; investment advisory, administration and
shareholder servicing fees; fees for necessary professional and
brokerage services; fees for any pricing service; the costs of
regulatory compliance; and the costs associated with maintaining
the Trust's legal existence; and costs of corresponding with
shareholders of the Fund.
7. Reduction of Fee.
If in any fiscal year of the Fund, the aggregate
expenses of the Fund (including fees pursuant to this Agreement
and the Trust's administration agreement relating to the Fund, but
excluding interest, taxes, brokerage fees, fees paid by the Fund
pursuant to the Trust's shareholder services plan and, if
permitted by the relevant state securities commissions,
extraordinary expenses) exceed the expense limitation of any state
having jurisdiction over the Fund, the Advisor will reduce its fee
to the Fund for that excess expense to the extent required by
state law in the same proportion as its advisory fee bears to the
Fund's aggregate fees for investment advice and administration. A
fee reduction pursuant to this paragraph 7, if any, will be
estimated, reconciled and paid on a monthly basis.
8. Services to Other Companies or Accounts.
(a) The Trust understands that the Advisor now acts,
will continue to act and may act in the future as investment
adviser to fiduciary and other managed accounts, and may act in
the future as investment adviser to other investment companies,
and the Trust has no objection to the Advisor so acting, provided
that whenever the Fund and one or more fiduciary and other managed
accounts or other investment companies advised by the Advisor have
available funds for investment, investments suitable and
appropriate for each will be allocated in accordance with a
formula believed by the Advisor to be equitable to each. The
Trust recognizes that in some cases this procedure may adversely
affect the price paid or received by the Fund or the size of the
position obtained or disposed of by the Fund.
(b) The Trust understands that the persons employed
by the Advisor to assist in the performance of the Advisor's
duties under this Agreement will not devote their full time to
such service and nothing contained in this Agreement will be
deemed to limit or restrict the right of the Advisor or any
affiliate of the Advisor to engage in and devote time and
attention to other businesses or to render services of whatever
kind or nature.
9. Term of Agreement.
(a) This Agreement will become effective as of the
date hereof and will continue for an initial two-year term and
will continue thereafter so long as the continuance is
specifically approved at least annually by (i) the Board of
Trustees of the Trust or (ii) a vote of a "majority" (as defined
in the Investment Company Act of 1940, as amended (the "1940
Act")) of the Fund's outstanding voting securities, provided that
in either event the continuance is also approved by a majority of
the Board of Trustees who are not "interested persons" (as defined
in the 1940 Act) of any party to this Agreement, by vote cast in
person at a meeting called for the purpose of voting on the
approval.
(b) This Agreement is terminable, without penalty, on
60 days' written notice, by the Board of Trustees of the Trust or
by vote of holders of a majority of the Fund's outstanding voting
securities, or upon 90 days' written notice, by the Advisor.
(c) This Agreement will terminate automatically in
the event of its "assignment" (as defined in the 1940 Act).
10. Representation by the Trust.
The Trust represents that a copy of the Declaration of
Trust is on file with the Secretary of The Commonwealth of
Massachusetts and with the Boston City Clerk.
11. Limitation of Liability.
The Trust and the Advisor agree that the obligations
of the Trust under this Agreement will not be binding upon any of
the Trustees of the Trust, shareholders of the Fund, nominees,
officers, employees or agents, whether past, present or future, of
the Trust, individually, but are binding only upon the assets and
property of the Fund, as provided in the Declaration of Trust.
The execution and delivery of this Agreement have been authorized
by the Trustees of the Trust and signed by an authorized officer
of the Trust, acting as such, and neither the authorization by the
Trustees, nor the execution and delivery by the officer will be
deemed to have been made by any of them individually or to impose
any liability on any of them personally, but will bind only the
assets and property of the Fund as provided in its Declaration of
Trust . No series of the Trust, including the Fund, will be
liable for any claims against any other series.
* * * * *
If the foregoing is in accordance with your
understanding, kindly indicate your acceptance of this Agreement
by signing and returning the enclosed copy of this Agreement.
Very truly yours,
LEHMAN BROTHERS INSTITUTIONAL FUNDS GROUP TRUST
By:
Name:
Title:
Accepted:
LEHMAN BROTHERS GLOBAL
ASSET MANAGEMENT INC.
By:
Name:
Title:
SCHEDULE A
effective February 1, 1996
Name of Fund
Cont
ract
ual
Rate
Prime Money Market Fund
.20%
Prime Value Money Market Fund
.20%
Government Obligations Money
Market Fund
.20%
Cash Management Fund
.20%
Treasury Instruments Money Market
Fund II
.20%
Municipal Money Market Fund
.20%
Tax-Free Money Market Fund
.20%
Please see Schedule A for a list of fees.
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 Lehman
Brothers 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 certain Fund's investment restriction
regarding
borrowing; vote "FOR" approval of a modification to certain
Fund's
investment restriction regarding making loans; and vote "FOR"
ratification of selection of independent public accountants.
